Background
Ms. Malekan (Applicant) and Mr. Behzadi (Respondent) were
married in Iran. The parties’ Iranian marriage contract, entered
into on July 19, 2000, included a Mahr of
1,000 full Bahar Azadi gold coins. After more than twenty years
of marriage, the parties separated in 2022.
In addressing the equalization of net family property (NFP), the
Ontario Superior Court of Justice discovered that despite both
parties’ earlier pleadings on the validity and enforcement of
the Mahr, neither side had placed its value in the NFP
statements before the Court. The Applicant intended to pursue
enforcement in Iran (and had filed a Form 12 withdrawing the
Mahr claim in Ontario). Meanwhile, the Respondent sought to have
the Mahr treated as property to be equalized in Ontario. As
such, the Court was left to decide whether the Mahr belonged in
the Ontario property calculations and, if so, how it should be
valued and characterized.
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The Law
Under s. 4 of the Family Law Act, net family property
means the value of all property, except property described in
subsection 2, that the spouse owns on valuation date after
deducting the spouse’s debt and any other liability. Excluded
property includes the value of property, other than a
matrimonial home, that a spouse owned on the date of marriage,
after deducting the spouse’s debt and other liabilities, other
than debt or liabilities related directly to the acquisition or
significant improvement of a matrimonial home, as calculated as
of the date of marriage.
Part I of the Family Law Act, requires each
spouse’s NFP to include any interest, present or future, vested
or contingent, in real or personal property on both the date of
marriage and the valuation date, subject only to the narrow
exclusions contained in section 4(2). Specifically, “property”
under the FLA includes:
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Property over which a spouse has, alone or in conjunction with
another person, a power of appointment exercisable in favour
of himself or herself;
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Property disposed of by a spouse, but over which the spouse
has, alone or in conjunction with another person, a power to
revoke the disposition or a power to consume or dispose of the
property; and
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In the case of a spouse’s rights under a pension plan, the
imputed value, for family law purposes, of the spouse’s
interest in the plan, as determined in accordance with section
10.1, for the period beginning with the date of the marriage
and ending on the valuation date.
Ontario courts treat the Islamic Mahr, if executed in accordance
with the formalities in section 55(1) of the FLA,
as an enforceable domestic contract, and thus “property” within
the meaning of section 4(1).
Bakhshi v. Hosseinzadeh, 2017 ONCA 838, the leading
Court of Appeal decision on treatment of the Mahr, clarifies
that a Mahr can be excluded from the equalization calculation if
the contract demonstrates the parties’ intention to do so. As
such, the Islamic Mahr is not automatically treated as excluded
property for the purposes of equalization.
According to s. 5(6) of the FLA, even after
property is included in a spouse’s NFP, a Court may vary the
equalization payment (i.e. order an unequal division of net
family property) if its operation would be unconscionable,
providing a fairness safety-valve.
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Analysis
Is the Mahr “Property” for the Purposes of Equalization?
The exclusions set out in s. 4(2) of the FLA do not apply in
this circumstance. Even though both parties agree that the terms
of Mahr are a domestic contract, there is no provision within
the domestic contract/Mahr which provides that it is not to be
included in the parties’ net family property.
Therefore, the Mahr is treated as property for the purposes of
equalization, and as such, should form part of one’s net family
property. The parties’ marriage contract created a debt, on
consent, immediately upon marriage, contingent only on demand.
Under the expansive statutory definition, a contingent debt is
still property to the creditor (Applicant) and a liability to
the debtor (Respondent).
To allow a party to pick and choose what property and/or debts
and liabilities are to be included runs contrary to the purpose
of equalization. Hence, the Mahr is required to be considered
under the property provisions of the FLA, which addresses all
forms of property, debt, and money owing to the parties, unless
there is a valid domestic contract that contracts out of the
Ontario regime. However, no such valid domestic contract exists
in this case. Only if the parties consented to the Mahr not
being included in the equalization calculation, or had permitted
the Mahr matter to be adjudicated in an Iranian court, could it
have been excluded from the equalization calculation.
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Should the Mahr Be Treated As Property on the Date of Marriage
or on the Date of Valuation?
Following the approach of recent ONSC decisions (R. v. N.,2021 ONSC 7638 and Nasrollahzadeh v. Akhtari,
2025 ONSC 3028), the Court held that the Mahr must
appear twice in the NFP statement. First, it
must appear as an asset of the Applicant, and
a matching liability of the Respondent, on
the valuation date. Second, it must appear as an
asset/liability pair (respectively) on the date of marriage.
The Mahr created a debt payable immediately upon marriage. The
fact that payment is contingent upon the Applicant making a
demand for it does not disqualify it as property. Property is
defined under the FLA to mean any interest,
present or future, vested or contingent, in real or personal
property. This includes the Mahr on the valuation date and the
date of marriage.
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A Basis for Unequal Division:
The Applicant argued that inclusion of the Mahr in the spouses’
NFP could be unfair. Heeding the Applicant’s concerns, the Court
acknowledged that any potential unfairness could be addressed
later through a section 5(6) unequal division claim if the
resulting payment is unconscionable. However, it ultimately held
that exclusion of the Mahr from the outset would defeat
Ontario’s property regime.
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Conclusion
Ultimately, Justice Sah ruled that the Mahr forms part of the
spouses’ property, and must be listed as an asset to the wife
and matching liability to the husband on both the date of
marriage and the valuation date. However, because neither party
had expert evidence on the historical and current value of 1,000
Bahar Azadi coins, the Court directed the parties to agree (or
have the Court select) a valuator, delaying further trial dates
until the valuation is produced.
This decision underscores that:
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Islamic marriage contracts are fully cognizable under
Ontario’s equalization framework.
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Parties cannot “pick and choose” which assets or debts count
in their NFP. Future litigants should ensure timely expert
valuation evidence of the subject of their Mahr and, if they
wish to exclude a Mahr from the Ontario equalization scheme,
negotiate an explicit domestic contract to that effect, or be
prepared to rely on s. 5(6) to address any resulting inequity.
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