ENFORCEABILITY OF IRANIAN MAHR CONTRACT IN BAHAR GOLD COINS
- Peter Cozzi
- Jan 21
- 4 min read
Enforcing Iranian Mahr contracts for the delivery of Iranian gold coins is in Ontario for family law purposes, a domestic contract which is deemed by the Court to be a contract for the payment of money or a contract imposing an obligation for the payment of money, and accordingly it would clearly offend and contravene against the federal provisions of the Currency Act, R.S.C. c. C. 52.
The Currency Act has some relevant applicability to these contracts because an Iranian Mahr domestic contract under Ontario law in a family law case has been determined by the Court, including the Ontario Court of Appeal, to be an agreement for the payment of money.
Although initially there was a dispute as to whether traditional marriage contracts under Muslim law could be enforced in Canada, that issue was resolved by the Supreme Court of Canada in Bruker v. Marcovitz [1].
Accordingly, the law from the Kaddoura v Hammoud [2], case where the Court had held that the obligation to pay a deferred Mahr (it was only $30,000.00) was not an obligation that should be adjudicated in the civil courts and was not necessarily a matter of enforceable civil law, is no longer applicable.
Certainly, the Family Law Act permits parties to enter into a marriage contract in which they can agree upon their respective rights and obligations upon separation with respect to the ownership and division of property and their support obligations and other matters in the settlement of their affairs.
In Bruker v. Marcovitz[3] the Supreme Court said that a religious marriage contract that meets all the provincial requirements for a civil contract is legally enforceable, despite the contract’s predominantly moral and religious aspects. The Supreme Court said that invoking the Charter’s freedom of religion right should not immunize a party from a contractual breach of a valid contract.
The Supreme Court of Canada in Bruker v. Marcovitz[4] did not consider the effect of the federal Currency Act to a foreign entered domestic contract, like an Iranian Mahr, as such issue was not before the Supreme Court.
However, the Courts in Ontario have also held in a number of cases that a Mahr contract entered into in Iran as a domestic contract between two married persons for the payment of Iranian gold coins is to be interpreted under the law of Ontario in a family law case as a demand obligation for the payment of money.
In Faizian v. Ashouri[5] at para 55, the Court accepted and agreed that a Mahr payment obligation is really a demand obligation with or having currency or paper value. In other words, the Court in Faizian v. Ashouri ruled that a Mahr relating to the payment of Iranian gold coins is really for a monetary payment or the payment of money.
No cases have judicially considered the narrow and specific question of the effect of the Currency Act on the Ontario enforceability of a foreign or Iranian Mahr contract which does not provide for the payment or payment obligation of money in either Canadian or another country’s official currency.
But just because none of the cases have considered the impact of the Currency Act on the court-determined conclusion and fact that the treatment of a payment obligation under a Mahr is really a payment of a monetary obligation in Ontario, doesn’t mean that the Currency Act is not relevant.
If the enforcement of a valid contract offends against public policy in some way, it should not be enforced.
Accordingly, just because a court has not judicially considered the applicability of the Currency Act to the enforceability of a Mahr for the payment of a monetary demand obligation, does not mean that the Currency Act should have no applicability, or that it should be given no consideration by a court.
Parliament has ruled in its wisdom that the Currency Act applies to all obligations for the payment of money in Canada.
For the purposes of clarifying the certainty of contractual intention, section 13 of the federal Currency Act, R.S.C., 1985, c. C 52, an Act respecting the currency of enforceable agreements in Canada, specifically provides that in order to be enforceable in Ontario, every agreement for the payment of money, or of the liability to pay money, shall be stated to be in Canadian currency.
Iran’s official currency is the Iranian Rial, not gold coins.
While section 13 (1) (a) of the Currency Act creates an exception for an agreement made in the currency of another country, one other than Canada like Iran, the within Iranian Mahr Agreement for the payment of the stated Persian gold coins does not reflect a payment obligation in Iranian legal currency, as the gold coins are not Iranian legal currency.
Consequently, if the intention of Parliament is to be honoured, the Iranian Mahr contract relating to the gold coins should not be enforceable in Ontario, as while being an agreement for the payment of money, it is not stated to be in either Canadian or Iranian currency.
There does not appear to be any requisite ambiguity in the Currency Act allowing a court to interpret the Iranian Mahr contract in a way different than how Parliament likely implicitly intended, from a literal reading of the statute.
Why then, since enforcing the Iranian Mahr contract for a payment of money would contravene the provisions of the Currency Act, should the Mahr agreement be enforced by a court in Canada?
The real value of the Currency Act for courts is both that it is void for illegality, and that it buttresses the credibility of the argument that enforcing it, like the unconscionability argument, would be against public policy. Respectfully, a combination of these two public policy arguments makes it easier to see why a court should not want to enforce the Iranian Mahr in family law cases.
[5] Faizian v Ashouri, [2023] OJ No 5347 at para 55
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