Almarzooqi v Salih
[2020] NZHC 1049
•20 May 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-751
[2020] NZHC 1049
BETWEEN RAHLA HUSSEIN AMIN HARDER ALMARZOOQI
PlaintiffAND
RAFID MOHAMMED SALIH
Defendant
Hearing: 20 March 2020 Counsel:
C T C Bell and R M Stoop for Plaintiff/Respondent M V Smith for Defendant/Applicant
Judgment:
20 May 2020
JUDGMENT OF ASSOCIATE JUDGE JOHNSTON
Introduction
[1] The plaintiff and respondent, Rahla Hussein Amin Harder Almarzooqi, sues the defendant and applicant, Rafid Mohammed Salih, seeking the recovery of a dowry.
[2] What is before the Court for determination at this stage is an application by Mr Salih pursuant to r 5.45 of the High Court Rules 2016 for an order for security for costs.
Background
[3] To a very large extent, the background to the proceeding and this application is common ground.
ALMARZOOQI v SALIH [2020] NZHC 1049 [20 May 2020]
[4] Ms Almarzooqi is a United Arab Emirates citizen, with New Zealand residency. Mr Salih is a citizen of both Iran and New Zealand. On 26 December 2013, the parties were married in the UAE under Islamic law. This involved them in entering into a contract of marriage, a translation of which is before the Court. Amongst other things, this provides that Mr Salih will pay Ms Almarzooqi a “prompt dowry” of 30,000 Dirhams (about $12,725) at the commencement of the marriage and a “deferred dowry” of 500,000 Dirhams (about $212,095) in the event of Mr Salih’s death or the parties’ divorce. For reasons that will become apparent, I mention that, on my reading of the contract, the obligation on Mr Salih’s part to pay the deferred dowry on divorce was not contingent upon separation or divorce being at his instigation.
[5] Mr Salih returned to New Zealand where he lives in January 2014. Ms Almarzooqi moved here to be with him in April 2014. The couple separated in May 2014, so the marriage lasted only five months and the couple only lived together for a month. In December 2015, Ms Almarzooqi travelled back to the UAE to apply for a divorce there. She filed her application on 2 February 2016.
[6] The UAE Court issued its judgment on 1 November 2016. A translation of this is before the Court. It is apparent that it was a default judgment, Mr Salih being treated as not having entered an appearance. The Court ordered Mr Salih to pay Ms Almarzooqi the deferred dowry of 500,000 Dirhams; 3,000 Dirhams for “alimony support”; and 7,500 Dirhams for “housing support”. Ms Almarzooqi arranged for the judgment to be served on Mr Salih here in New Zealand on 29 June 2017. At about the same time, Ms Almarzooqi also applied to the Family Court in this country for an order for the dissolution of the marriage, and such an order was made on 22 August 2017.
Ms Almarzooqi’s proceeding
[7] Against that background, Ms Almarzooqi sues Mr Salih and applies for summary judgment pursuant to pt 12 of the High Court Rules. She pleads two causes of action:
(a)a common law claim for the enforcement of a foreign judgment; and
(b)a claim for breach of the contract of marriage in which she claims the 500,000 Dirhams payable on divorce.
[8] Mr Salih has filed a notice of opposition to the application for summary judgment and supporting affidavit evidence, and now applies for an order for security for costs.
Security for costs
[9] Rule 5.45 of the High Court Rules provides that if the Court is satisfied that there is reason to believe that the plaintiff will be unable to pay a costs award if unsuccessful in the proceeding, the judge may, if he or she thinks it just in all the circumstances, make an order for security for costs in favour of the defendant.
[10] Thus, the threshold issue is whether there is reason to believe that Ms Almarzooqi will be unable to pay a costs award if she is unsuccessful in her summary judgment application or at trial.
[11] In this litigation, Ms Almarzooqi is legally aided. Mr Smith submitted that that is a sufficient basis upon which the Court may conclude that, if she is unsuccessful, she may not be in a position to meet a costs award against her. This is certainly the approach that was adopted by Greig J in Amev Life Assurance Co Ltd v Dickson-McIver.1 Mr Bell did not contend otherwise. In her affidavit evidence Ms Almarzooqi makes no attempt to establish that she would be in a position to meet a costs award. I am satisfied that the threshold test is met.
[12] The real issue, then, is whether it is just in all the circumstances to make an order.
[13] Mr Smith acknowledged that Mr Salih faces two particular difficulties in this case:
1 Amev Life Assurance Co Ltd v Dickson-McIvor [1993] 1 NZLR 733 at 738.
(a)First, because Ms Almarzooqi is legally aided, s 45 of the Legal Services Act 2011 comes into play. This provides that only in exceptional circumstances (obvious examples include fraud) will a costs award be made against a legally aided party. In Laverty v Para Franchising Ltd, still the leading case on costs in this area, McGrath J stated that “without such protection the potential for such a costs order would deter persons of limited means from exercising their right of access to the courts, even with the support of legal aid.”2 In practical terms, what this means in the context of an application for security for costs is that the defendant must be able to satisfy the Court not only that the usual considerations favour the granting of an order, but also that in the event of the plaintiff being unsuccessful in the proceeding there is a real prospect of such an award being made, despite s 45.
(b)Second, as already said, Ms Almarzooqi is applying for summary judgment. At this stage in the proceeding, the immediate matter for determination is that application. As Mr Smith says, to persuade a court to order “security for a summary judgment application the defendant must show a very strong case on the merits that the application will fail and that the court is likely to order costs against the plaintiff”. As he accepts, the courts do not generally award costs against unsuccessful applicants for summary judgment, because, even if the plaintiff fails on a summary judgment application, the claim may nevertheless succeed at trial.
[14]I will return to those particular aspects of the case later in this judgment.
[15] The starting point is that r 5.45 confers on the Court a wide discretion — both as to whether an order should be made, and as to the quantum of any order. Like all discretions, this one must be exercised on a principled basis.3
2 Laverty v Para Franchising Ltd [2006] 1 NZLR 650 (CA) at [19].
3 See the discussion in AS McLachlan Ltd v MEL Network Ltd (2002) 16 PRNZ 747 (CA) at [13]-[14].
[16] There is no shortage of reported cases that serve as examples of the courts exercising this discretion. As a rule, such cases are of limited assistance as they tend to turn on the particular characteristics of each case. However, in Highgate on Broadway Ltd v Devine,4 Kos J, having acknowledged the broad nature of the discretion, and emphasised that impecuniosity — the threshold question — is not enough, helpfully formulated a series of questions intended to assist analysis in any given case. His Honour’s questions fall into three groups: questions an affirmative answer to which may tend to suggest that an order for security for costs is warranted; questions an affirmative answer to which may suggest that an order is not appropriate; and some questions that apply generally. I adopt this approach.
The first category of questions
Is the plaintiff a nominal one?
[17] If the Court perceives than an impecunious plaintiff is being put up in the case so as to shield others from the risk of a costs award, then that will make an order more likely.
[18]There is no such suggestion here. Ms Almarzooqi is the only possible plaintiff.
Is there evidence of the plaintiff disposing of assets to avoid meeting an adverse costs award?
[19] I would be inclined to broaden this question. It is not just a matter of a plaintiff disposing of assets. The same essential issue would arise in respect of a plaintiff who was hiding assets.
[20] Mr Smith submitted that the Court should conclude that there is evidence that Ms Almarzooqi may have hidden assets from which she could pay costs from her own resources. In this regard, he points to Mr Salih’s evidence that when Ms Almarzooqi came to this country in April 2014, she arrived with “a carry bag approximately 300 x 250 x 250 full of jewellery, predominantly gold”.
4 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017.]
[21] That evidence is hardly conclusive as to Ms Almarzooqi’s current financial position. The fact is that she has applied for and obtained a grant of legal aid on the basis that she is unable to pay for representation. The Legal Aid Agency scrutinises applications with care and its determination of the position is entitled to respect. I place little, if any, reliance on tales of bags of gold.
[22] I am not satisfied that there is evidence that Ms Almarzooqi has disposed of or hidden assets.
Is the plaintiff’s substantive claim prima facie meritorious?
[23] This is always an important consideration. In this case it assumed particular significance. Mr Smith certainly put it at the forefront of his submissions in support of Mr Salih’s application, and it was the issue that dominated the argument before me.
[24] Mr Smith submitted that Ms Almarzooqi cannot succeed in her claim – in her summary judgment application or at trial. He developed this argument in some detail. I intend no disrespect in saying that I propose to focus on the key aspects of both Mr Smith’s argument and Mr Bell’s response.
[25] The first point is that Ms Almarzooqi cannot take advantage of the statutory regimes for the enforcement of foreign judgments. The Reciprocal Enforcement of Judgments Act 1934 does not apply as the UAE is not a signatory to the relevant treaty. The Senior Courts Act 2016 applies only to Commonwealth judgments.
[26]Ms Almarzooqi must rely, therefore, on the common law.
[27] As already said, she pleads two causes of action. The first is a common law action for enforcement of the judgment of the UAE court.
[28] The common law recognises foreign judgments in the sense that it accepts that they give rise to an obligation of debt as between judgment creditor and judgment debtor. But such judgments are not enforceable as if they were a New Zealand judgment (except via the statutory processes to which I have already referred, and
which do not apply here), so that the judgment creditor must commence proceedings, effectively to seek leave to enforce a foreign judgment in this country.
[29] Such leave will be granted provided the judgment creditor can satisfy the New Zealand Court of three things:
(a)that the foreign court had jurisdiction;
(b)that the judgment is for a liquidated sum (other than certain categories of liquidated sums which are irrelevant here); and
(c)that the judgment is final and conclusive.5
[30] Mr Smith submitted that, in this case, Ms Almarzooqi cannot overcome the first of those threshold hurdles, that is to say, that, for the particular purposes of enforcement in this country, the UAE Court lacked jurisdiction to make the order it did in her favour against Mr Salih.
[31] In relation to this submission, Mr Smith relied on the Court of Appeal’s judgment in von Wyl v Engeler,6 where the Court of Appeal said:
The foreign Court must have had jurisdiction as determined by the New Zealand rules of conflict of laws, rather than according to the foreign Court's own law. … Jurisdiction in personam exists where the debtor was present in the foreign country at the time the proceedings were instituted; or where the judgment debtor was plaintiff or counterclaimed in the foreign Court; or where, being defendant in the foreign Court, submitted to the jurisdiction of that Court by voluntarily appearing in the proceedings; or before the commencement of the proceedings agreed in respect of the subject- matter of the proceedings to submit to the jurisdiction of that Court or of the Courts of that country … , and an agreement to submit may take the form of an agreement to accept service at a designated address … .
[32] There is no suggestion that the first or second of the possibilities identified by the Court has any application here. However, Mr Bell submitted that, in one way or another, Mr Salih had submitted to the jurisdiction of the UAE Court.
5 See Eilenberg v Gutierrez [2017] NZCA 270 at [30].
6 Von Wyl v Engler [1998] 3 NZLR 416; (1998) 12 PRNZ 187.
[33]He argued first that, in executing the contract of marriage, Mr Salih did so.
[34]In this regard, he pointed to the preamble to the contract which provides:
This marriage contact is solemnized this Thursday, 23 Saffar 1435 H, corresponding to 26 of December 2013, at Dubai first instance/Sharia Court by judge/Mohammed Eshaq Mal Allah Feroz, by proposal and acceptance, and in accordance with Islamic Sharia, God’s Holy Book, and the Tradition of His Prophet, to whom all God’s prayers and blessings be, between the two contracting parties.
[35] I do not see that that can amount to a prospective submission to the jurisdiction of the UAE courts. It is a description of the jurisdiction of the Court under which the marriage was originally solemnised. In my view, it goes no further than that.
[36] The second point Mr Bell emphasised, was that Mr Salih was served with the originating documentation in Ms Almarzooqi’s UAE divorce proceeding and tried to involve himself in the proceeding. In this regard, I quote directly from Mr Salih’s affidavit evidence:
5.During 2016 I was served with an application for divorce and accompanying affidavits issued out of the Personal Matters Court, Dubai, a court that administers Sharia-based law. The application had been filed by the plaintiff who had travelled to Dubai from New Zealand to take the action. The plaintiff sought the divorce on that basis that she had suffered domestic abuse from me. In support of her allegations, that I deny, 2 of her brothers gave evidence in the court that they had witnessed my abusing the plaintiff including assaulting and beating her. This evidence is a fabrication. I have only met the brothers briefly when I was in Dubai at the time of our marriage.
6.While I did not object to the plaintiff’s application for divorce I objected to the false allegations made about me to secure a monetary award under the marriage contract and I did not want the court to consider the matter on uncontested evidence; I wished to defend myself. I contacted the court to determine what steps I needed to take. I was advised that I had to appear in person or instruct a solicitor. I was unwilling to exercise either of those options. I am not a citizen of the UAE, I have never lived there and I have never had any intention of doing so. I know that corruption is rife in the Emirati judicial system as is prejudice against non-Emiratis such as me. I feared that if I travelled to Dubai to defend the application that I would be imprisoned, with or without a trial, until I had paid the monies sought. I had already been threatened by the plaintiff that if I travelled to the UAE I would be prevented from leaving until I had paid her monies and that her family would be able to arrange for my imprisonment. Although I knew she was very capable of lying I knew
enough of her family’s standing to believe that these threats could be carried out. I was also unwilling to engage a Dubai based lawyer because it is common knowledge that Emiratis’ lawyers are susceptible to pressure from powerful families and I believe engaging a lawyer would have been an expensive and futile course of action. Instead I instructed my lawyer to prepare documents advising the court I did not oppose the application but opposed the grounds upon which the application was sought and I affirmed in an affidavit accordingly. The English and Arabic copies are attached to the plaintiff’s affidavit and marked “D” & “E”. I had the documents translated and certified by Apostille and I forwarded them to a trusted agent to file in the court. When the agent presented to the court to file the documents the registrar refused to accept them leaving them with my agent who returned them to me in a DHL courier pack.
[37] In New Zealand terminology, Mr Salih attempted to enter an appearance in the UAE proceeding but did not manage to get his documentation past the Registrar across the counter.
[38] In my view, at New Zealand law, that does not amount to a submission to the jurisdiction. Submission to the jurisdiction is a technical term that involves taking some unqualified formal step in the proceeding, usually by entering a defence. As is evident, Mr Salih was prevented from doing so.
[39] It would be ironic if, having been prevented from submitting to the jurisdiction, Mr Salih was somehow deemed to have done so by the very actions that were thwarted by the rejection of his documentation.
[40] In relation to this issue Mr Bell relied on Pawson v Claridge & Archetype Ltd.7 In that case the (New Zealand based) defendant filed and served a “motion” in a North American proceeding which was irregular because unsigned and therefore “struck from the file” by the court. Associate Judge Sargisson held that this amounted to a submission to the foreign court’s jurisdiction. I would be inclined to take a stricter view of what is required. It seems to me that it is at very least arguable that, the court having struck the defendant’s appearance from the file, the defendant is entitled to be treated as not having entered any appearance at all. In any event, the situation in
7 Pawson v Claridge & Archetype Ltd, HC Auckland CIV-2009-404-4367, Associate Judge Sargisson, 25 June 2010.
Pawson appears to me to be different from the present case where Mr Salih’s defence was not even accepted for filing.
[41] I am not satisfied that there is a proper foundation for the contention that Mr Salih submitted to the jurisdiction of the UAE Court. It follows that, in my view, there is a real question as to whether Ms Almarzooqi can succeed on her first cause of action.
[42] I turn therefore to her second cause of action, in which she sues on the debt said to have been created by the contract of marriage.
[43] It would appear to be common ground that, at UAE law, the marriage contract in evidence is an enforceable arrangement, or at least Mr Smith did not contend otherwise.
[44] Earlier in this judgment, I referred to the fact that on its face the contract appears to provide that the deferred dowry of 500,000 Dirhams was payable on divorce irrespective of fault. I emphasised this because aspects of the judgment of the UAE Court suggest that the Court would not have ordered Mr Salih to pay this amount had it concluded that Ms Almarzooqi was responsible for the separation. That appears to me to be a gloss on the terms of the contract, no doubt arising from subtleties of UAE law about which I have no evidential basis for reaching any view at all.
[45] Insofar as this cause of action is concerned, Ms Almarzooqi has elected the New Zealand courts as the forum for determining the recoverability or otherwise of the deferred dowry by commencing proceedings here. For his part, Mr Salih has submitted to the jurisdiction of the New Zealand courts by filing and serving his notice of opposition and affidavit evidence. New Zealand is therefore the proper jurisdiction for the determination of this issue.8
[46] As to the proper law of the contract, Mr Smith made extensive submissions in relation to this. I do not think that it does any disservice to his careful analysis to say
8 The lex fori.
that in the absence of express agreement as to the proper law, the legal system with the closest connection with the dispute will be treated as the proper law of the contract.
[47] I am quite satisfied that the overwhelmingly most important consideration in this case is that, although the parties married and entered into their contract in the UAE, it was their joint intention at the time that the contract would govern their relationship as a married couple in New Zealand, where they intended to reside, and of course where they did begin and end their married life.
[48] It appears to me that other considerations that are sometimes of significance in determining the proper law of the contract such as the parties’ citizenships, the fact that they married in the UAE and the like, pale into insignificance, when put up against the reality that they intended to, and did, reside in New Zealand, where they must have intended the contract to govern their married life.
[49] It follows, it seems to me, as Mr Smith submitted, that the proper law of the contract is New Zealand law.9
[50] That conclusion virtually deals with the issue of the prospects of Ms Almarzooqi’s claim being successful.
[51] The comprehensive statutory regime for dealing with such things as the dissolution of marriages and other such relationships, maintenance and the division of separate and relationship property are entirely inconsistent with the terms of the contract of marriage between Mr Salih and Ms Almarzooqi. To take just one point as an example, fault-based penalties for the dissolution of the relationship are not a part of New Zealand’s relationship property law.
[52] Although counsel did not touch on this point, there may be an issue as to whether this Court has jurisdiction to deal with Ms Almarzooqi’s substantive claim having regard to the Family Court’s original and exclusive jurisdiction in relation to relationship property proceedings.10
9 The lex causae.
10 Property (Relationships) Act 1976, s 22.
[53] In any event, it appears to me that the prospect of a New Zealand court, faced with a couple who, although they may have married out of the country, intended to and did live their married life here, separated here, obtained an order from the Family Court dissolving their marriage, and both continue to live here, enforcing a contract of marriage which ignores our statutory regime altogether and is inconsistent with it, is very poor.
[54] In short then, in my judgment, Ms Almarzooqi’s case is not a strong one. I would answer this question in the negative.
Does the plaintiff have access to third party funding?
[55] Mr Smith submits that she does. In support of this submission, he points to the affidavit evidence — almost entirely uncontested — that Ms Almarzooqi comes from a wealthy UAE family, that her father, or her parents, have in the past provided her with financial support (for example funding a prolonged stay in an Auckland private hospital) and that she is currently being supported by them. He points to the apparent incongruity of Ms Almarzooqi’s parents providing her with financial support of the sort described and her applying for legal aid, an issue which was apparently the subject of some attention in earlier Family Court proceedings in 2019, when both of these parties sought protection orders against the other.
[56] Although this evidence is troubling, for myself I do not think that, because Ms Almarzooqi’s family has apparently provided her with financial support in respect of other costs, it is open to the Court to conclude that they should be expected to do so for the purposes of this litigation. I do not regard this as a significant issue here.
Would the denial of security for costs in the circumstances of this litigation be oppressive to the reasonable interests of the defendant and parties other than the plaintiff?
[57] Under this heading, Kόs J observed that security for costs is relatively exceptional. As I read his Honour’s judgment, what he was saying was that the exceptional nature of security for costs is justified only where not to make an order for security would be oppressive to a defendant, especially where the plaintiff’s claim lacks merit.
[58] Although I have expressed a firm view as to the strength of the plaintiff’s case, it is not obvious to me that to refuse an order for security for costs would necessarily operate oppressively on the defendant. He has not, in his affidavit evidence, revealed his financial position, and the Court is therefore entitled to assume that he has sufficient wherewithal to meet the costs of the litigation. I regard this issue as a neutral one.
[59] In summary then, the only question from this first group which appears to me clearly to point to one outcome or another concerns the merits of Ms Almarzooqi’s case. I have said that I view it as a weak case. That provides some support for an order or security for costs.
The second category of questions
Is it reasonably probable that impecuniosity was caused by the defendant?
[60] There is a sense in which this may be probable, to the extent that Mr Salih has not paid the deferred dowry.
[61] However, having regard to the view I have reached as to the enforceability of this obligation in New Zealand, it is difficult to see how that can influence the order here.
Would ordering security deprive the plaintiff of the capacity to advance a prima facie meritorious case?
[62] It is conceivable that an order for security as to costs may deprive Ms Almarzooqi of her ability to advance her case.
[63] However, again, having regard to the view I have reached as to her substantive claim, in the end, I think this too must be regarded as a neutral factor.
Has the applicant delayed unduly in applying for security?
[64] Ms Almarzooqi commenced her proceedings in December 2019. Mr Salih responded with his notice of opposition and application for security for costs within 30 days. There is no question of delay.
[65] In the end, I do not view any of these three questions as being of great significance in this case.
The third category of questions
The conduct of the parties
[66] At this stage of the case, I am not prepared to make any judgments about the conduct of the parties, at least for the purposes of evaluating this application.
[67]Accordingly, I regard this point as irrelevant here.
Are there any other relevant considerations?
[68] My view is that the important considerations have emerged from the above questions and discussion.
[69] There are however the points that I started with: the fact that Ms Almarzooqi is legally aided and that the next step in the proceeding is her summary judgment application. To which I have yet to return.
How should the respective interests of the parties best be balanced?
[70] This is clearly a very important consideration. The balancing exercise must necessarily bring to account all of the points canvassed above.
Discussion
[71] As the Court of Appeal emphasised in A S McLaughlin v MEL Network Ltd11, access to the courts for a genuine plaintiff is not lightly to be denied — access to justice, then, is the starting point.
[72] On the basis of the evidence that is before the Court at this stage it appears to me that there is at least a possibility that a substantial order for security for costs at this point may prevent Ms Almarzooqi from prosecuting her claim.
11 Above n 3, at [15].
[73] Those things said, I have reached a clear view that Ms Almarzooqi’s claim is weak.
[74]Those factors appear to me to leave matters relatively evenly balanced.
[75] That brings me full circle back to the two points referred to earlier in this judgment, that is to say that Ms Almarzooqi is legally aided and that the immediate matter for disposal is her application for summary judgment. In this case, those factors are decisive in my view. Given that s 45 by the Legal Services Act as discussed earlier will apply to every aspect of the litigation, and that only exceptionally will the courts award costs against an unsuccessful plaintiff applicant for summary judgment, the view I take is that the prospect of the Court awarding costs against Ms Almarzooqi in the event that her application for summary judgment is unsuccessful is vanishingly small.
[76] As Associate Judge Bell said in Everest Serviced Apartments v Body Corporate 51190912, “if the court will not order costs against the plaintiff, there is no point in ordering the plaintiff to provide security”.
[77] On that basis, my judgment is that to order security for costs against Ms Almarzooqi in this proceeding, and at this stage, would be inappropriate and I decline to do so.
[78] Of course it remains open to the defendant to make a further application at a later stage in the proceeding when different considerations may apply.
Costs
[79] Neither counsel addressed me in relation to costs in connection with this application and I reserve these (though of course s 45 of the Legal Services Act governs costs on this application as on every other aspect of the proceeding).
12 Everest Serviced Apartments v Body Corporate 511909 [2019] NZHC 1987 at [11].
[80] If counsel are unable to settle costs, as I would expect them to be able to do, they may file memoranda in the usual way and I will deal with them on the papers.
Associate Judge Johnston
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for plaintiff/respondent Michael Smith Law, Wellington for defendant/applicant
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