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.
The Law:
Under s. 4 of the FLA, 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, R.S.O. 1990, c. F.3. (“FLA”) 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:
- Property over which a spouse has, alone or in conjunction with another person, a power of appointment exercisable in favour of himself or herself;
- 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
- 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.
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.
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.
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.
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 (i) Islamic marriage contracts are fully cognizable under Ontario’s equalization framework, and (ii) 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.