Jenni BlissettRecently the Local Court Magistrate was required to rule on whether a couple whose Islamic marriage included a contract that the husband pay his wife a $50,000 “deferred dowry” if he left her was enforceable.

The short facts were that the parties had married under Islamic Law in 2004.  The man divorced his wife under Islamic Law by telling her during an argument “you are divorced”.   The magistrate upheld the contract between the parties and found the contract was enforceable.  The decision was appealed to the Supreme Court of New South Wales on a number of grounds.

These included:

  • the Magistrate did not have the jurisdiction, as it was a matter involving “Sharia Law”;
  • the agreement was not properly executed pursuant to the New South Wales Property (Relationships) Act; and
  • a further ground of appeal was that the contract (being the delayed payment of a dowry of $50,000) should not be enforceable as it was contrary to public policy.

In effect, it was argued the agreement was of certain “servitude”.  The requirement to pay $50,000 if the husband initiated separation or divorce was to compel the husband to remain married.  Also, it was argued that the payment was a penalty clause and was, therefore, void for illegality.

All these arguments were rejected by the Supreme Court of New South Wales and the magistrate’s decision was upheld.  The New South Wales Supreme Court went on to refer to decisions in other countries where such contracts were upheld.

Finally, the Supreme Court noted there was no Australian case law on this matter where cultural or religious tradition is raised and that this question and issue would be referred to both the Commonwealth and New South Wales Law Reform Commission for review.

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