The enforceability of religious or cultural marriage agreements within New Zealand law is a complex issue.
In this article, Director, Stephanie Irons from the private wealth team, discusses a recent Court of Appeal decision involving a nikah. A nikah is an Islamic marriage contract. Here she explains how such agreements are treated in relation to the Property (Relationships) Act 1976. This case offers valuable insight into the limits of enforceability and the protections available under New Zealand law.
This case came about when Mr Salih, and his former wife Ms Almarzooqi, had divorced. They were in a disagreement regarding the payment of the mahr.
The case is a fascinating example of the intersection between Islamic law and New Zealand law. The judgment considers a number of issues, with the focus being the proper law of the nikah.
My practice area in private wealth draws my attention to a point which may seem minor. Comprising a mere 5 paragraphs of a 116 paragraph judgment. But in my view, it is significant.
Was the nikah an agreement purporting to contract out of the Property (Relationships) Act 1976 (PRA)?
The Court found that it was not. It ruled on the basis that “not every contract between domestic partners relating to property will be subject to the PRA, or constitute a contracting out agreement”.
In this case, the Court found no basis on which it could conclude that the agreement was entered into for the purpose of contracting out of the PRA. It was also not purporting to do any of the things defined in s21F of the Act.
This was despite the fact that it was an agreement relating to the property of the parties as a result of their marriage (and subsequent separation).
The Court did note that the question as to whether an agreement falls within the scope of s21 of the PRA is a question of fact. The Court expressly left open the possibility that a nikah entered into in different circumstances or on different terms could be treated differently. It might be found to be a purported contracting out agreement. It could also be taken into account when making other determinations under the PRA.
The significance of this decision lies in the lack of safeguards for individuals entering into contracts with their domestic partners. If those contracts fall outside the scope of the PRA, the usual protections do not apply.
In order for a contracting out agreement to be valid, each party must be independently advised. Their solicitor must certify that they have explained the meaning and effect of the agreement.
The purpose of these stringent requirements is to ensure that the more vulnerable party gets a fair deal. Or at least understands what they are foregoing.
For a contract that the Court finds to fall outside the scope of the PRA, that vulnerable party will have lost that protection.
In case you were wondering. The Court allowed the appeal of Mr Salih against the decision requiring him to pay mahr to Ms Almarzooqi. Remitting the case back to the High Court for reconsideration.
If you feel you could use some specialist advice, don’t hesitate to contact the Trusts & Wealth Protection Team.