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The first defendant (Neima Mohamed, herein Neima), as the plaintiff in the court of first instance, had submitted that:

1. On 4 April 2004, she and the plaintiff (Mostafa Mohamed, herein Mostafa) were married;
2. On 28 February 2005, the parties had executed a pre-nuptial financial agreement that would regulate their financial affairs during and after their marriage;
3. The agreement stated that Mostafa should pay to Neima $50,000.00 if he initiated separation or divorce proceedings against her; and
4. On 11 September 2008, Mostafa Islamically divorced Neima.

Mostafa denied marrying Neima, did not admit points 2 and 3, and denied Islamically divorcing her. Moreover, Mostafa submitted that any separation of the parties had been initiated by Neima.

Before the court of first instance, Mostafa denied having been married to Neima under Islamic law. Her Honour Magistrate Trad did not answer that question, but rather found that the parties had been in a 'domestic relationship'. Regardless, the parties could not agree who initiated the separation and on which date the separation occurred. Mostafa claimed that Neima had initiated the separation on 11 September 2008 by taking his key to their Rockdale unit, while Neima claimed that Mostafa, on 11 April 2007, had asked her to leave their home, and alternatively, on 11 September 2008, had Islamically divorced her.

On the facts, Magistrate Trad found that Mostafa had initiated the divorce on 11 April 2007, further evidenced by him sending his daughter to tell Neima to leave by a certain date, with directions as to the division of their property. Therefore, her Honour found that sufficient evidence existed to activate cl 11 of the parties' agreement, compelling Mostafa to pay to Neima the agreed-upon sum of $50,000.00 (Moackar Sadak or dowry).

On appeal, Harrison AsJ found that Mostafa could appeal the initial decision pursuant to s 69 of the Supreme Court Act 1970, which granted the Court jurisdiction to quash the decision of a lower court if based on an error of law. Mostafa sought to dispute the findings of Magistrate Trad in their entirety on the following grounds:

1. that her Honour had made errors of fact and law;
2. that the decision suffered from jurisdictional error;
3. that her Honour had failed to acknowledge that the agreement had not been executed in accordance with the law;
4. that her Honour had failed to find that the agreement was unenforceable because it conflicted with public policy; and
5. that her Honour had erred by failing to find that the separation, for the purposes of the agreement, did not have to accord with shari'a law.

With regards to appeal ground 4, Mostafa submitted that her Honour had failed to recognise that the agreement was one of servitude in that it compelled Mostafa to remain in a relationship with Neima, lest he pay her $50,000.00. Moreover, it was contrary to public policy for her Honour to determine which party had left the relationship, and cl 11 was void for illegality as it was a penalty clause. The Court found the precedent cited in support of its submission by Mostafa's counsel to be somewhat irrelevant. It found the precedent cited by Neima's counsel, which stated that the court would, where possible, hold parties seeking separation or divorce to their agreement, relevant. The Court also acknowledged the issue of the payment of Moackar Sadak, noting that the lack of any precedent regarding such payment in Australia may necessitate seeing how other common law countries have approached such agreements. The Court also provided a brief discussion on mahr, based on Ann Black and Kerrie Sadiq's, 'Good and Bad Sharia: Australia's Mixed Response to Islamic Law' (2011) 17 UNSW Law Journal 82, noting that mahr appeared to be what the parties meant by Moackar Sadak. The Court found that cases dealing with mahr from the United States, Canada and the United Kingdom all found such agreements enforceable, provided they could not be invalidated for other reasons. Counsel for Neima submitted that, while some customs might be contrary to public policy, what is of utmost importance in enforcing such an agreement is that the parties to the agreement knowingly and voluntarily adhered to those customs.

Harrison AsJ found that, in enforcing such agreements, courts of common law countries have applied common law or the relevant legislation (if any), rather than sharīʿa law. Moreover, that none of these courts found that agreements such as that made by the parties in this instance contradict public policy. Harrison AsJ also dismissed Mostafa's argument that it was not for the Court to decide who left the relationship, stating that '[c]ourts are often called upon, especially in family matters, to determine sensitive factual matters such as when a relationship has ended, or whether it was indeed a de facto relationship...'.

With regards to Mostafa's submission that cl 11 was a penalty clause, Harrison AsJ disagreed. Her Honour found that the Property (Relationships) Act and the Family Law Act allowed parties to enter into financial agreements. Moreover, that cl 11 formed part of the 'greater bargain' between the parties.

Harrison AsJ also dismissed Mostafa's submissions that the court of first instance did not have jurisdiction to adjudicate the validity of the agreement, or to determine whether or not the parties' separation had to accord with sharīʿa law. The Court found that as the agreement had neither specified an appropriate dispute resolution forum or jurisdiction (common law or sharīʿa law), nothing precluded the court of first instance from adjudicating the case. Secondly, that Magistrate Trad had not considered the meaning of 'divorce' under sharīʿa law, instead determining when the separation had occurred on the facts. The Court also noted that Mostafa had not relied on any expert evidence relating to sharīʿa law, and that Magistrate Trad was in no way required to apply sharīʿa law to interpret the parties' agreement.

Mostafa's counsel conceded the inapplicability of the Property (Relationships) Act but argued that Magistrate Trad had applied it regardless. The Court found it irrelevant whether or not the agreement satisfied the requirements of the Property (Relationships) Act, stating that Magistrate Trad had correctly applied the laws of contract to the agreement.

Mostafa also submitted that as the parties had not been married under Australian law, the agreement was unenforceable because the terms 'separation' and 'divorce', per cl 11 of the agreement, are inapplicable to de facto relationships. The Court agreed to consider whether or not marriage under Australian law was a condition precedent to the enforceability of the agreement, but concurred with Neima's counsel that, among other submissions, the agreement did not specify marriage under Australian law as a condition precedent to the enforceability of the agreement, or to cl 11 specifically. Moreover, that the word 'separation' is distinct from 'divorce' and is applicable to the cessation of a de facto relationship. The Court also noted that the agreement was to secure the parties' individual assets, as both parties had been previously married and had significant assets individually.

With regards to which party initiated the separation and on what date, Harrsion AsJ noted Magistrate Trad's deliberations and that her Honour was unable to rely on any 'so-called independent witnesses' because all the evidence provided by witnesses had been informed by what the parties had told them. Magistrate Trad had, therefore, relied on Neima's evidence that, on 11 April 2007, the parties had argued and Mostafa had waved a knife in front of Neima. That evening Mostafa's daughter, accompanied by a police officer, had come to collect some of Mostafa's belongings and to give her a list separating the parties' belongings. On 13 April 2007, Neima moved out of the parties' unit. While the parties had attempted to reconcile, in September 2008, following another argument, Mostafa said the words 'you are divorced' to Neima. Mostafa denied this, stating that Neima had initiated the separation in September 2008 by asking him to leave their Lakemba unit. Mostafa also denied saying the words 'I divorce you'.

All other submissions made by Mostafa on appeal were dismissed on the grounds that they were not covered in Mostafa's submissions. Harrison AsJ also found that Magistrate Trad had made her findings pursuant to ample evidence. Harrison AsJ noted that this appeal raised religious and cultural issues not previously dealt with by the Australian courts, and that the question of how such agreements should be dealt with would be referred to the Australian Law Reform Commission and NSW Law Reform Commission for their consideration.

Decided by the Supreme Court of India, Vishwa Lochan Madan v. Union of India decreed that fatwās issued by sharīʿa courts hold no legal leverage. 

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