Date: 20110622
Docket: T-1515-10
Citation: 2011 FC 736
Ottawa, Ontario, June 22, 2011
PRESENT: The Honourable Mr. Justice Crampton
BETWEEN:
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ABBAS MAMNUNI
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Applicant
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and
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THE MINISTER OF PUBLIC
SAFETY
AND EMERGENCY PREPAREDNESS
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Respondent
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REASONS FOR JUDGMENT AND
JUDGMENT
[1]
The
Applicant, Mr. Abbas Mamnuni, was at Vancouver International Airport, while en
route from Toronto to China, when he was approached by a Canada Border
Services Agency (CBSA) officer conducting currency export checks. The CBSA
officer ended up seizing Euros, Canadian dollars and American currency, with a
collective value of approximately $53,000 CAD, from him. The officer suspected
that the currency was proceeds of crime, as contemplated by sections 12 and 18
of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act,
SC 2000, c 17 (the “Act”). Mr. Mamnuni then
sought ministerial review of the seizure, in accordance with section 25 of the
Act.
[2]
In
August 2010, the Manager of the Appeals Division of the Recourse Directorate,
on behalf of the Minister of Public Safety and Emergency Preparedness (the “Minister’s
Delegate”), found, pursuant to section 27 of the Act, that there was a
contravention of the Act. Pursuant to section 29 of the Act, she also held that
the seized currency would remain forfeited.
[3]
The
Applicant seeks to have the decision set aside on the basis that the Minister’s
Delegate erred by:
i) imposing
an impossible burden of proof on the Applicant;
ii)
reaching her decision without regard to the fact that the seized currency was
a collection and accumulation of non-reportable currency;
iii) overlooking
the requirements of section 14 of the Act; and
iv) failing
to reach her decision in accordance with the principles of natural justice.
[4]
For
the reasons that follow, this application is dismissed.
I. Background
[5]
Mr.
Abbas Mamnuni is a businessman who owns and operates a clothing store and a
clothing import company, named Montberg Ltd. On February 26, 2009, he traveled
from Toronto to China via
Vancouver International Airport.
[6]
While
awaiting his onward flight at Vancouver International Airport, and after
having passed through the standard security check, he was approached by a CBSA
officer who informed him that he was conducting a currency export check. There
are two very different versions of what then transpired.
[7]
According
to Mr. Mamnuni, the officer asked him whether he had currency in his possession
equal to or greater than $10,000, to which he immediately replied “yes”. When
asked about the amount of money in his possession, he claims that he replied
that he had about 32,500 Euros and a few hundred Canadian and American dollars.
When he was then asked if he had reported the currency prior to his departure,
he replied “no”. He was then escorted to an office where he was asked to
produce all his currency. Mr. Mamnuni then presented 32,520 Euros, $940
Canadian dollars, $151 US dollars, 2,220 Chinese yuan and 110,000 Korean won.
The Chinese and Korean currencies were returned to him for humanitarian
purposes. The rest of the money was seized by the officer.
[8]
According
to the Respondent, Mr. Mamnuni was initially asked whether he was aware of the
Act and to identify his travel destination. He replied that he knew the
legislation and was traveling to China for business purposes.
He was then asked if he had reported any currency to the CBSA prior to his
departure. He replied that he had not done so. He was not asked if he had any
money to declare. Instead he was escorted to the currency office for further
examination, where he presented all of his currency to the officer. When asked
why he failed to declare the money, as required by the Act, he stated that he
simply forgot. In his subsequent written submissions, he attributed his
forgetfulness, at least in part, to the fact that he had only purchased his
airline ticket the evening before his departure from Toronto. As a result
of the responses that he gave to various questions posed by the officer, the
officer seized Mr. Mamnuni’s Euros, Canadian and American dollars.
[9]
On
April 16, 2009, Mr. Mamnuni sought a ministerial review of the officer’s
decision. After receiving multiple written submissions from Mr. Mamnuni and a
detailed written report from the officer in question, a CBSA Adjudicator (the “Adjudicator”)
recommended that the Minister’s Delegate conclude that the Act had been
contravened and that the seized currency should be confirmed as forfeited.
II.
Relevant Legislation
[10]
The
legislation relevant to this application is set forth in the Act and is attached
to these reasons as Appendix “A”.
[11]
In
brief, pursuant to section 3 of the Act, the purpose of the Act is to implement
specific measures to detect and deter money laundering and the financing of
terrorist activities, to facilitate the investigation of such conduct, to
respond to threats posed by organized crime, and to assist in fulfilling
Canada’s international commitments to participate in the fight against
transnational crime and terrorist activity. In pursuit of these objectives, subsection
12(1) requires persons described in subsection 12(3) to report to a CBSA
officer the importation or exportation of currency or monetary instruments of a
value equal to or greater than the prescribed amount, which is currently
$10,000, under the Cross-Border Currency and Monetary Instruments Reporting
Regulations, SOR/2002-412.
[12]
The
persons referred to in subsection 12(3) include persons departing from Canada who have
currency in their possession.
[13]
Pursuant
to subsection 18(1), if a CBSA officer believes on reasonable grounds that
subsection 12(1) has been contravened, the officer may seize as forfeit the
currency or monetary instruments in question. Section 18(2) requires that a
CBSA officer return the seized currency or monetary instruments upon payment of
the prescribed penalty, unless the officer has reasonable grounds to suspect
that the currency or monetary instruments are proceeds of crime.
[14]
Pursuant
to section 25, a person from whom currency has been seized may, within 90 days
after the date of the seizure, request a decision of the Minister as to whether
subsection 12(1) was contravened. The Minister is then required to decide
whether subsection 12(1) was contravened (section 27). If the Minister
concludes that there was a contravention of subsection 12(1), the Minister may:
(i) decide to return the currency or monetary instruments, or an equivalent
amount of money, with or without payment of a penalty; (ii) decide that any
penalty or portion thereof that has already been paid be remitted; or (iii)
confirm the forfeiture in question (section 29).
[15]
If a
person is not satisfied with the Minister’s decision under section 27 with
respect to the issue of contravention, subsection 30(1) allows the person
to appeal that decision by way of an action in the Federal Court.
[16]
In addition
to the foregoing, section 14 of the Act provides that if a person indicates to
an officer that he or she has currency or monetary instruments to report under
subsection 12(1), but the report has not yet been completed, the officer may,
after giving notice in the prescribed manner to the person, retain the currency
or monetary instruments until the officer is satisfied that the currency or
monetary instruments have been reported under subsection 12(1) or the importer
or exporter of the currency or monetary instruments advises the officer that
they do not wish to proceed with the import or export in question (subsections
14(1) and (3)).
III. The Adjudicator’s Recommendation
[17]
After
summarizing the officer’s account of his initial exchanges with Mr. Mamnuni, as
set forth above, the
Adjudicator summarized the remainder of what took place between the officer and
Mr. Mamnuni. According to the Adjudicator, Mr. Mamnuni explained that he was
traveling to China to buy clothes for his
clothing store, that the Euros in question had been acquired over the past
three years, and that the currency was part of his savings and was kept at his
home. When asked why he did not keep it at the bank, the Applicant stated that
it was his money and he could do whatever he wanted with it. When asked why he
was carrying Euros to purchase clothing in China, the Applicant stated that Euros are easier
than other currencies to carry around and that he could get a better rate for
Euros in China.
[18]
The
Adjudicator noted that the interview revealed that the Applicant had an
expensive lifestyle. He owned two vehicles and a house, on which he owed
$410,000. He paid $4,900 a month for his store’s rent, and despite claiming
financial hardship, he had two personal bank accounts with balances of $18,000
and $9,000 respectively. The company’s bank accounts also had balances of
$2,000 and $50,000 respectively. In addition, he had accounts in China which
had “unusual” movements of U.S.
funds, although there had been no transactions in either account since May
2008.
[19]
The
Adjudicator also noted that Mr. Mamnuni “kept contradicting himself” during the
interview. For example, he initially stated that he kept his savings at home,
but later explained that he had brought the money home from his safety deposit
box a couple of weeks earlier. He also gave conflicting evidence regarding
whether his wife was aware of the money he kept at home.
[20]
The
Adjudicator then stated that the officer seized the currency as suspected
proceeds of crime, based on 19 grounds, which included the following:
i) There
were signs at the airport regarding the currency legislation, but no report was
made;
ii) Mr.
Mamnuni claimed to know the currency legislation;
iii) he
admitted to having traveled with and properly reported currency over the
reporting threshold on two other occasions;
iv) he
admitted to having been examined by CBSA officers before;
v) he
was traveling on tickets bought the day before;
vi) he gave
contradicting statements regarding his wife’s knowledge of the currency;
vii) he
gave contradicting statements about keeping the money at home;
viii) he
was carrying 65 bills of 500 Euro notes, which are commonly used in money
laundering because it is easier to transport large amounts of money in fewer
bills to avoid detection;
ix) he
was nervous, with shifting weight and a dry mouth;
x) he
did not know how much income he had reported or made in the previous years, and
legitimate income earners know their respective incomes; and
xi) he
was traveling on a purchasing trip without a purchasing list or a list of
suppliers, without knowing what he wanted to purchase and without knowing how
much he would spend.
[21]
The
Adjudicator proceeded to review the submissions made by Mr. Mamnuni in support
of his request for ministerial review. Among other things, she summarized Mr.
Mamnuni’s version of his exchanges with the officer. She also acknowledged
certain information which indicated that he had traveled to China frequently, that he had
imported clothing from China, and had Chinese savings accounts, in which all
transactions were either in U.S.
or Chinese currencies.
[22]
In
addition, she observed that Mr. Mamnuni had provided his business tax returns
for the fiscal years 2002-2008, which showed the following levels of income:
(i) for 2002-03: $11,993; (ii) for 2003-04: $15,846; (iii) for 2004-2005:
$17,749; (iv) for 2005-06: $21,453; and (v) for 2007-08: - $271.40. As to his
personal income, the evidence indicated that between 2006 and 2008, it rose
from $25,597 to $39,638. As to other sources of funds, she noted that Mr.
Mamnuni provided electronic transaction receipts of transfers made by his
brother amounting to $123,000, which he indicated was his inheritance from his father’s
passing that was then used as a down payment on his home.
[23]
On
October 16, 2009, the Adjudicator wrote Mr. Mamnuni a letter, stating that the
documents he had submitted were evidence of cash flow, but that a link could
not reasonably be established between the money seized in February 2009 and the
documents dating back to 2007. Among other things, she added that no
explanation had been provided in respect of previously identified discrepancies.
In this regard, she observed that: (i) his personal income tax reports
demonstrate that his income was insufficient to support his lifestyle; (ii) at
the time of the seizure, he stated that the money he received from his brother
was used for a down payment on his home, not to purchase clothes in China; and (iii)
he originally stated that he kept the currency at his home, only to later state
that he had just brought the currency from his safety deposit box.
[24]
Regarding
whether the currency was properly reported, the Adjudicator concluded in her
report that the evidence established that there was a contravention of the Act,
because no written report had been made by Mr. Mamnuni under the Act prior to his
encounter with the officer. She noted the conflicting evidence regarding the
exchange between the officer and Mr. Mamnuni, and indicated that it was
possible that the Applicant had the intention to make a declaration but did not
have the time to do so when he was encountered by the officer. However, she observed
that the Applicant stated that he had forgotten to report it, rather than that
he had intended to make the report.
[25]
Similarly,
the Adjudicator rejected Mr. Mamnuni’s submissions with respect to whether a
legitimate origin of the currency had been established. In this regard, she reiterated
some of the factors that had been identified by the officer, including certain
inconsistencies in his evidence.
[26]
She
also emphasized that the documentation provided by Mr. Mamnuni only focused on
his annual income and the financial situation of his company, and did not demonstrate
the legal origin of the seized currency.
[27]
In
light of all the above, the Adjudicator recommended that: (i) under section 27
of the Act, the Minister’s Delegate should find that there was a contravention
of the Act or the Regulations with respect to the currency that was seized; and
(ii) under section 29 of the Act, the Minister’s Delegate should find that the
seized currency should be “held as forfeit”.
IV. The Decision under
Review
[28]
On August 23, 2010, the
Minister’s Delegate issued a decision that was broadly consistent with the
Adjudicator’s findings and recommendations. In explaining the reasons for her
decision, she began by summarizing the Respondent’s version of the exchanges
that took place between the CBSA officer and Mr. Mamnuni at Vancouver International Airport. She then listed
the above-mentioned 19 points that the officer had identified as providing reasonable
grounds for suspecting that the currency in question was the proceeds of crime.
She proceeded to observe that these grounds were accepted as valid in
establishing reasonable grounds to suspect that the currency was the proceeds
of a crime.
[29]
The
Minister’s Delegate then reviewed Mr. Mamnuni’s submissions regarding the origin
of the currency. She noted that he had explained that the majority of the
currency was to be used to purchase clothing in China and that the evidence presented included tax
returns for Mr. Mamnuni’s business, import documentation and other
documentation supporting the explanation that his income was low and derived
solely from the business. However, she found that this evidence did not
establish an identifiable link between the seized currency and its lawful
origin. She also observed that the currency conversion receipts submitted by
the Applicant were dated between August 2006 and September 2008, well in
advance of Mr. Mamnuni’s trip to China, a country to which he claimed to travel one or
two times per year for the past several years.
[30]
In
addition, she noted that Mr. Mamnuni’s second explanation as to the origin of
the currency was that the money constituted his inheritance from his father, which
had been forwarded from his family in Iran. She observed that there was no evidence
submitted to corroborate the claim that the money constituted his inheritance,
and that at the time the currency was seized, he had indicated that his
inheritance money had been used as a down payment on his home. Therefore, she
stated that this explanation could not be accepted and did not demonstrate the
legal origin of the seized currency.
[31]
Based
on the foregoing, the Minister’s Delegate concluded that the explanations
provided and the evidence submitted did not remove the suspicion that the
currency was the proceeds of crime. She added that, in view of this conclusion,
discretion could not be granted with respect to the forfeiture of the currency.
As a result, the currency would remain forfeited.
V. Standard of Review
[32]
The
standard of review
applicable to the first issue that has been raised, regarding the burden of
proof that was imposed on Mr. Mamnuni, is reasonableness (Sellathurai v Canada
(Minister of Public Safety and Emergency Preparedness), 2008 FCA 255, at para 51;
Yang v Canada (Minister of Public Safety and Emergency Preparedness),
2008 FCA 281, at paras 9-13 (“Yang FCA”)). That is also the standard of review applicable to the
second issue that has been raised, regarding whether the Minister’s Delegate
erred by reaching
her decision without regard to the fact that the currency was a collection and
accumulation of non-reportable currency (Dunsmuir v New Brunswick, 2008 SCC 9, at paras 51-55).
[33]
In
my view, the issue that has
been raised with respect to whether the Minister’s Delegate erred by overlooking
the requirements of section 14 of the Act is also subject to review on a
standard of reasonableness, as this is, in essence, an issue involving the
exercise of Ministerial discretion (Dunsmuir, above, at para 53) and,
possibly, the interpretation of the circumstances in which the enabling, or
“home,” statute in question contemplates the exercise of such discretion (Dunsmuir,
above, at paras 54 and 59; Canada (Minister of Citizenship and
Immigration) v Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, at para 44; Celgene Corp v Canada (Attorney General), 2011 SCC 1, at para 34; Smith v Alliance Pipeline Ltd, 2011 SCC 7, at paras 26, 37 and 38). That
said, nothing turns on this, as I have determined that Parliament did not
intend the discretion contemplated by section 14 of the Act to be exercised in
circumstances where, as here, a person has failed to indicate that he or she
has currency to report before passing through the security check at their point
of departure from Canada and before being approached by a customs officer.
[34]
The
fourth issue that has been raised
is somewhat awkwardly worded. However, it is, in essence, a question as to
whether Ministerial discretion was exercised in accordance with the principles
of procedural fairness. That issue is reviewable on a standard of correctness (Dunsmuir,
above, at paras 55, and 79; Khosa, above, at para 43).
VI. Analysis
A. Did the Minister’s Delegate err by
imposing an impossible burden of proof on the
Applicant?
[35]
Mr.
Mamnuni submitted that the Minister’s Delegate erred in law by imposing a
burden and standard of proof on him that was too high. In this regard, he noted
that the Adjudicator stated, in a letter to him dated October 1, 2009, that an explanation
as to the origin of the currency “must be proven in sufficient details and with
enough credible, reliable and independent evidence to establish that no
other reasonable explanation is possible” (emphasis added). Similarly, in a
letter dated October 16, 2009, she stated that “failure to provide credible
explanation to eliminate any doubts on the legitimate nature of the
seized currency” would likely result in the continued forfeiture of the
currency (emphasis added). Mr. Mamnuni also noted that in her recommendation to
the Minister’s Delegate, the Adjudicator characterized the burden of proof in
essentially the same terms.
[36]
In
support of his position, Mr. Mamnuni relied on Yusufov v Canada (Minister of Public
Safety and Emergency Preparedness), 2007 FC 453 as authority for his view that the
Adjudicator’s findings form part of the decision of the Minister’s Delegate.
With respect to the burden of proof, he relied on Qasem v Canada (Minister of National
Revenue),
2008 FC 31.
[37]
I
do not agree with Mr. Mamnuni’s submissions.
[38]
In
Yusufov, above, the parties
agreed that the adjudicator’s Case Synopsis and Reasons formed part of the
reasons for the Minister’s decision. There was no further discussion on the
issue in the reasons given by Justice Judith A. Snider. However, in the
subsequent case of Yang v Canada (Minister of Public Safety and Emergency
Preparedness), 2008 FC 158 (“Yang FC”), Justice Snider rejected the
position that the adjudicator in that case had actually made the decision under
review, which was then “rubber-stamped” by the Minister’s Delegate. She did so after
noting that there were differences between the decision of the Minister’s
Delegate and recommendations made in the adjudicator’s Case Synopsis and
Reasons. She observed that this indicated that the Minister’s Delegate did not
simply “rubber-stamp” the Case Synopsis report, but had exercised his
discretion and decision-making authority. Justice Snider’s conclusion on this
point was not addressed in the Federal Court of Appeal’s decision upholding her
decision (Yang FCA, above).
[39]
As
in Yusufov, above, the
Minister’s Delegate in the case at bar issued her own reasons for her decision.
In that decision, she summarized Mr. Mamnuni’s submissions and evidence and
then concluded that they “did not remove the suspicion that the currency was
proceeds of crime.” Based on the information summarized in the letter, which
included the grounds relied upon by the officer in seizing the currency, I am
satisfied that the Minister’s Delegate did not merely “rubber stamp” the
Adjudicator’s recommendations, but rather exercised her own discretion and decision-making
authority. My conclusion on this point is reinforced by the fact that, in her
decision, the Minister’s
Delegate explicitly stated that she had “fully considered the documentation [Mr.
Mamnuni] provided as well as the reports from the issuing officer.”
[40]
The involvement
of the Minister’s
Delegate in the case at bar was qualitatively very different from situations in which an
administrative officer’s report may be considered to form part of a reviewable
decision taken by a Ministerial delegate or other person. In those situations,
the decision of the Ministerial delegate or other person essentially “rubber
stamps” the officer’s decision, or does not explain the basis for the decision.
For example, in the immigration field, the Computer Assisted Immigration
Processing System (CAIPS) notes of administrative officers are sometimes considered
to form part of the decision that is subject to judicial review, because the
letter informing the applicant of the decision does not explain the grounds for
the decision, and the CAIPS notes are the principle record of those grounds. For
the reasons discussed above, the decision of the Minister’s Delegate in the case at bar
provided such grounds and reflected a full and true exercise of the discretion
contemplated by the Act.
[41]
In her
decision, the only reference made to a burden was towards the end, after the Minister’s
Delegate had summarized Mr. Mamnuni’s evidence and had listed the officer’s
grounds for suspecting the currency in question to be proceeds of crime. At
that point, she concluded that “the documentation did not demonstrate the legal
origin of the seized currency” and that “the explanations provided by you and
the evidence submitted did not remove the suspicion that the currency was
proceeds of crime.” She added: “[i]n view of the foregoing, discretion cannot
be granted with respect to the forfeiture of the currency and, as such, it will
remain forfeited.”
[42]
The
“did not demonstrate the legal origin of” and “did not remove the suspicion”
language used by the Minister’s Delegate is very similar to the language that
the Minister’s delegate employed in Sellathurai, above (see para 14);
and in Yang FC, above (see para 23). Those cases were issued after this
Court’s decision in Qasem, above, and therefore
better reflect the current law on this point.
[43]
In Sellathurai,
above, at para 43,
the Federal Court of Appeal noted that such language mischaracterizes the
nature of the discretion exercised under section 29, as this suggests that the
seizing officer’s decision is being reassessed. However, “once the breach of
section 12 is confirmed, the only issue remaining is whether the Minister will
grant relief from forfeiture.”
[44]
The
Court of Appeal then proceeded to address the standard of proof applicable to
decisions taken under section 29 of the Act. At para 51 of its decision, it
stated:
…
What standard of proof must the applicant meet in order to satisfy the Minister
that the seized funds are not proceeds of crime? In my view, this question is
resolved by the issue of standard of review. The Minister’s decision under
section 29 is reviewable on a standard of reasonableness. It follows that if
the Minister’s conclusion as to the legitimacy of the source of the funds is
reasonable, having regard to the evidence in the record before him, then his
decision is not reviewable. Similarly, if the Minister’s conclusion is
unreasonable, then the decision is reviewable and the Court should intervene.
It is neither necessary nor useful to attempt to define in advance the nature
and kind of proof which the applicant must put before the Minister.
[45]
This
approach was followed a short while later, in Yang FCA, above, at para
13. There, the Court of Appeal stated, after quoting at length from the
majority decision in Sellathurai, above:
[13]
The Minister, quite properly, sought to obtain from the appellant additional
information respecting the legitimacy of the funds. He was not satisfied that
any credible one had been presented. He came to the conclusion that the
appellant had “failed to provide any legitimate documentary evidence or
information to demonstrate that the funds were legitimately obtained” and that
“Reasonable suspicion still stands” (A.B., p. 06). The Minister, not having
been satisfied, to use the words of Pelletier J.A. at para 50, “that the seized
funds are not proceeds of crime”, it was reasonably open to him to confirm the
forfeiture.
[46]
Based
on the foregoing, and the evidence that was before the Minister’s Delegate, I
am satisfied that it was reasonably open to her to decline to exercise her
discretion to confirm the forfeiture of the currency in question. Mr. Mamnuni
was repeatedly and consistently asked to provide sufficient details to
establish the legal origin of the currency. He failed to do so. He must now
bear the consequences.
B. Did the Minister’s
Delegate err by reaching her decision without regard to the fact that
the currency was a collection and accumulation of non-reportable currency?
[48]
Mr.
Mamnuni made various submissions in support of this ground of challenge of the
decision made by the Minister’s Delegate. In essence, his position is that it
was not reasonable for her to reject his explanation for why he was unable to
provide greater substantiation for his assertion that the seized currency
represented an accumulation of savings over a period of three years. In short,
his explanation was that those savings were converted to Euros in several
transactions that were each unreportable, because they were each for a monetary
value below $10,000.00. Given that the exchange transactions were below that
threshold, he did not keep any documentation regarding the origin of the funds.
[49]
I
disagree with Mr. Mamnuni’s submissions on this point. In brief,
they fail to recognize that it was his burden to satisfy the Minister’s
Delegate that the seized currency was not proceeds of crime (Sellathurai,
above, at para 50). As noted by the Minister’s Delegate, the currency
conversion receipts, like the other evidence provided by Mr. Mamnuni, “did not
demonstrate the legal origin of the seized currency.” Accordingly, it was
entirely reasonable for her to decline to exercise her discretion,
notwithstanding that Mr. Mamnuni had provided those conversion receipts to her.
[50]
In
my view, this outcome was well within the range of acceptable ones in this case
that are defensible in
respect of the facts and law. The decision of the Minister’s Delegate on this
point was also
appropriately justified, transparent and intelligible (Dunsmuir, above,
at para 47).
C.
Did the Minister err by overlooking the requirements of section 14 of the Act?
[51]
In
his written submissions, Mr. Mamnuni appeared to take the position that the
Adjudicator and the Minister’s
Delegate both erred by determining that section 12 of the Act had been
contravened, without having regard to the “oral declaration” that he claims to
have made to the officer prior to entering the verification room at Vancouver
International Airport.
[52]
In response, the
Respondent submitted that this Court has no jurisdiction to consider this
ground of review. In short, the Respondent’s position is that this issue goes
to whether a report, whether written or otherwise, was made pursuant to
subsection 12(1) of the Act. In turn, the determination of whether there has
been a contravention of subsection 12(1) is made pursuant to section 27; and
section 30 provides that appeals of such decisions may be made by way of an
action in this Court.
[53]
I agree
with the Respondent’s position on this point, which is well supported by the
jurisprudence of this Court (see, for example, Dupre v Canada (Minister of Public Safety and Emergency
Preparedness), 2007 FC 1177, at paras
24-25; Dokaj v Canada (Minister of National Revenue), 2005 FC 1437, at
paras 32-38; Tourki v Canada (Minister of Public Safety and Emergency
Preparedness), 2006 FC 50, at paras 34-35; and Ondre v Canada (Minister
of Public Safety and Emergency Preparedness), 2007 FC 454, at para 15).
[54]
In
any event, it should be noted for the record that Mr. Mamnuni’s counsel conceded,
during his oral submissions before this Court, that Mr. Mamnuni had contravened
subsection 12(1).
[55]
Mr.
Mamnuni also submitted that the officer had an obligation to consider
exercising discretion in his favour pursuant to section 14 once he made his
“oral declaration” to the officer. In this regard, he referred to provisions in
the CBSA’s Memorandum D19-14-1 and in the CBSA Enforcement Manual that
essentially repeat what is stated in subsection 14(1). He also noted that the
latter document adds that “[n]egligence, carelessness, and lack of knowledge on
the part of a person making a report are factors worthy of consideration when
deciding whether or not to proceed with a penalty action.” However, this begs
the questions of whether Mr. Mamnuni was “a person making a report” and whether
the discretion referred to in subsection 14(1) was intended to be applied in circumstances
such as those in the case at bar. Moreover, insofar as the quoted passage from
the CBSA Enforcement Manual is concerned, that passage appears in a
section of the manual that concerns amending currency reports, not making
late reports.
[56]
Another
passage in the Manual that Mr. Mamnuni attempted to rely upon addressed
procedures to be followed during a search. However, he claims to have made his
“oral declaration” at the outset of his exchange with the officer. At that
time, the officer was simply having an initial exploratory conversation with
Mr. Mamnumi.
[57]
Mr.
Mamnuni further asserts that in exercising her discretion under section 29, the
Minister’s Delegate erred by failing to “address and analyze the issues surrounding
the officer’s failure to exercise discretion under section 14 and the
consequences of such failure.”
[58]
In
support of his position, Mr. Mamnuni stated that a “plain reading” of section
14 reflects that Parliament enacted that section to ensure that money will not
be taken from persons who “candidly and readily” inform a customs officer that
they “have currency to report but forgot to complete the report.” Relying on
the Supreme Court of Canada’s decision in Maple Lodge Farms Ltd v Canada,
[1982] 2 S.C.R. 2, he asserted that, in exercising their discretion, Ministers are
required “to act in good faith and to have regard to all relevant
considerations, not be swayed by irrelevant ones and not make their
decisions perversely and capriciously” (emphasis in original).
[59]
Once
again, this begs the questions of whether: (i) Mr. Mamnuni “candidly and
readily” informed the officer that he had currency to report and simply forgot
to complete the report; (ii) the officer and the Minister’s Delegate failed to
act in good faith and to have regard to all relevant considerations; and (iii)
the latter two individuals were swayed by irrelevant considerations or made
their decisions in a perverse and capricious manner. In my view, the evidence
does not support any of these propositions.
[60]
I
am satisfied that, in accepting the officer’s version of his exchanges with Mr.
Mamnuni, the Minister’s Delegate implicitly rejected Mr. Mamnuni’s version of
the exchanges he had with the officer. The discrepancy between Mr. Mamnuni’s
version of those exchanges and the officer’s version was clearly described in
the Adjudicator’s Case Synopsis and Reasons for Decision (“Case Synopsis”).
That document also noted that the Adjudicator specifically requested that the officer
respond to Mr. Mamnuni’s statement that, “when asked if he had money to
declare, he stated that he did”. In addition, the Case Synopsis noted that the officer
confirmed that he never asked the claimant if he had any currency to declare.
Instead, he asked Mr. Mamnuni if he had made a declaration and he replied “no”.
In the officer’s view, “the point of finality had been reached”.
[61]
I
am satisfied that the Minister’s Delegate turned her mind to the discrepancy
between the two versions of what happened, because she clearly stated, at the
outset of her decision, that she had “reviewed the enforcement action, the
evidence and the law as it applies in [this] case” and had “fully considered
the documentation [Mr. Mamnuni] provided as well as the reports from the
issuing office.”
[62]
In
then describing the officer’s version of his exchanges with Mr. Mamnuni, the
Minister’s Delegate implicitly rejected Mr. Mamnuni’s version of those
exchanges. As a consequence, there was nothing more for her to consider in
respect of the alleged “oral declaration”. In short, she evidently was
satisfied that no such declaration, as contemplated by section 14, had been
made. As such, there was nothing in relation to section 14 for the Minister’s Delegate
to consider in exercising her discretion under section 29.
[63]
In
any event, I fail to see how the alleged oral declaration might have been of
assistance to the Minister’s Delegate, whose focus in making her decision under
section 29 was upon whether she was satisfied that the seized currency was not
proceeds of crime (Sellathurai, above, at para 50). The fact that an
oral declaration may have been made regarding the existence of those funds on
Mr. Mamnuni’s person would not have materially assisted the Minister’s Delegate
to satisfy herself that the seized currency was not proceeds of crime.
[64]
Moreover,
I am satisfied that Parliament did not intend the discretion contemplated in
section 14 to be exercised in circumstances such as those that existed in this
case. In particular, there
were signs at Vancouver International Airport reminding travelers of the Act;
Mr. Mamnuni conceded that he was familiar with the Act and that he had made
currency reports in the past. He admitted that he had not made a report under
the Act in respect of the currency that he was carrying before he was
approached by the officer, notwithstanding that he had opportunities to do so
prior to his departure in Toronto and again in Vancouver. In addition, he had already
passed through security.
[65]
Contrary
to his claims of having “candidly and readily” informed the officer that he had
currency to report, there is no evidence to suggest that he had any intention
of “candidly and readily” reporting or indicating, in any way, that he had
currency to report, prior to when he was approached by the officer. His
position seems to be that: (i) he was entitled to refrain from reporting or
providing any indication whatsoever that had currency to report, until he was
approached by the officer; and (ii) he was entitled to the exercise of the
discretion contemplated by section 14 until that point in time, provided that
he then indicated to the officer that he had currency to report.
[66]
I
disagree.
[67]
In
my view, the discretion contemplated by subsection 14(1) is no longer available
once a person who has passed through security and has not yet indicated that he
has currency or monetary instruments to report, is approached by a customs
officer. In my view, it would seriously undermine the objectives of the Act
that are set forth in section 3 thereof, to interpret subsection 14(1) in a
manner that it could be applied in such circumstances. The obligation is on the
person who is exporting currency with a value of $10,000.00 or greater to
report that currency. That obligation is proactive and must be fulfilled prior
to the point in time at which a customs officer in the post-security check area
of an airport approaches the person.
[68]
Even
if I am wrong and subsection 14(1) might be said to continue to be available in
such circumstances, I am satisfied that, in view of the additional relevant
considerations that were present in this case, the officer did not err in
failing to explicitly consider exercising his discretion under subsection 14(1)
in Mamnuni’s favour. I am also satisfied that the Minister’s Delegate did not
err in failing to take into account, in exercising her discretion under section
29 of the Act, “the issues surrounding the officer’s failure to exercise
discretion under s. 14 and the consequences of such failure”, even if Mr.
Mamnuni’s claims of having made an “oral declaration” to the officer are
accepted as true.
[69]
In
short, the additional relevant considerations that were present in this case
are such that it was reasonable and entirely appropriate for: (i) the officer
to have failed to consider exercising his discretion under subsection 14(1);
and (ii) the Minister’s Delegate to have failed consider the relevance of that
failure by the officer, in exercising her discretion under section 29 of the
Act.
[70]
Those
additional considerations included: (i) the various contradictory statements
that were made by Mr. Mamnuni to the officer; (ii) his nervous demeanour; (iii)
the officer’s determination that Mr. Mamnuni had an expensive lifestyle, yet
claimed to be experiencing financial hardship and subsequently provided copies
of income tax returns in which he reported “relatively low” personal income;
and (iv) the fact that Mr. Mamnuni claimed to be on a purchasing trip, yet he
was not in possession of any purchasing list or any list of suppliers in China,
he did not know what and how much clothing he wanted to buy, and he did not
know how much money he would spend purchasing clothing.
[71]
In
summary, I am satisfied that neither the officer nor the Minister’s
Delegate erred as Mr. Mamnuni has suggested, in connection with section 14 of the
Act.
D. Did the Minister’s Delegate err by
failing to reach her decision in accordance with the
principles of natural justice?
[72]
Mr.
Mamnuni asserts that the Minister’s Delegate erred by failing to have regard
for the fact that there was a breach of natural justice when the CBSA sought a
legal opinion and did not share that opinion with him or give him an
opportunity to participate in the decision-making process. In this latter
regard, Mr. Mamnuni asserts that the Adjudicator’s Case Synopsis ought
to have been disclosed to him prior to when he received that document after
commencing this application for judicial review and requesting a copy of the
Certified Tribunal Record, pursuant to Rule 317 of the Federal Courts Rules,
SOR/98-106.
[73]
Mr.
Mamnuni further submitted
that both the Adjudicator and the Minister’s Delegate had a duty to: (i)
disclose the legal opinion and Case Synopsis to him; and (ii) to provide him
with an opportunity to address the Adjudicator’s views and recommendations,
which were external sources of evidence that were provided to the Minister’s
Delegate and were prejudicial to his position. In his view, the failure to
disclose those documents, and their existence, to him deprived him of clear
notice of the case he had to meet, and the opportunity to make appropriate
submissions in response thereto. Among other things, he asserted that the date
of the legal opinion and the fact that it was obtained in respect of “oral
declarations” demonstrated that the officer’s version of his exchange with Mr.
Mamnuni lacked credibility.
[74]
I
disagree with each of the foregoing submissions and assertions.
[75]
The
legal opinion, received on March 20, 2009, approximately three weeks after Mr.
Mamnuni’s encounter with the officer, was protected by solicitor-client
privileged, assuming that it was intended to be kept confidential by the
parties to that communication (Pritchard v Ontario (Human Rights Commission),
[2004] 1 S.C.R. 809, at paras 19-21, and 27; Maax Bath Inc v Almag Aluminum Inc,
2009 FCA 204, at para 14). Mr. Mamnuni did not adduce any evidence to indicate
that the legal opinion was not intended to be kept confidential. Although the
privilege may have been waived when the Case Synopsis, which quoted from
the opinion, was disclosed to Mr. Mamnuni in response to his request under Rule
317, that waiver did not occur until after the Minister’s Delegate issued the
decision under review.
[76]
In
any event, even if the legal opinion should have been disclosed to Mr. Mamnuni,
I am satisfied that he was not prejudiced by the failure to disclose that
opinion to him, at least for the purposes of this judicial review. The essence
of that legal opinion was simply that “oral declarations” to an officer do not
constitute reports for the purposes of subsection 12(1). This precise point was
conceded by Mr. Mamnuni’s counsel during the oral hearing.
[77]
Moreover,
the legal opinion went to the issue of whether an “oral declaration”
constituted a report for the purposes of section 12(1). As discussed in Part
IV.C above, the issue of whether there was a breach of subsection 12(1) of the
Act is a matter for the Minister’s Delegate to decide under section 27 of the
Act, and this Court has no jurisdiction on an application for review to review
that particular decision.
[78]
As
to the potential significance of the date of the legal opinion, there are many
possible explanations as to why the legal opinion may have been requested by
the officer, prior to when Mr. Mamnuni made his initial request under section
25 of the Act for a decision as to whether subsection 12(1) was contravened. I
do not agree that the fact that the legal opinion was requested prior to that
point in time demonstrates that an “oral declaration” had in fact been made by
Mr. Mamnuni, and that the officer’s version of events was therefore “not
credible.” Indeed, it is not even clear that the legal opinion was requested by
the officer and in connection with this particular manner. Even assuming that
the officer requested the opinion in respect of this matter, there are many reasons
why he may have done so, including simply in anticipation of this argument
being raised by Mr. Mamnuni. In my view, it was reasonably open to both the
Adjudicator and the Minister’s Delegate to accept the officer’s version of
events, particularly given all of the circumstances that existed in this case,
including those that are summarized at paragraph 70 above.
[79]
I
am satisfied that the failure to disclose the legal opinion and the Case
Synopsis, which is also a privileged document (Maax Bath, above, at para
14), to Mr. Mamnuni did not breach his procedural fairness rights (Pritchard,
above, at para 31). As previously noted, in exercising her discretion under
section 29, the focus of the Minister’s Delegate was upon whether she was
satisfied that the seized currency was not proceeds of crime (Sellathurai, above, at para 50). Mr. Mamnuni
was provided with numerous opportunities to address this issue and the
shortcomings that the Adjudicator identified with respect to his submissions
and evidence. It does not follow from the fact that he ultimately failed to
satisfy the Adjudicator or the Minister’s Delegate on this point that his
procedural fairness rights were violated. On the contrary, I am satisfied that
they were not violated.
[80]
As noted in Dag v Canada (Minister
of Public Safety and Emergency Preparedness), 2007 FC 427, at para 52:
[52] … [T]he need to provide evidence to support the
applicants’ claim regarding the origin of the funds was always made clear to
them, and that they were in fact provided with an opportunity to do so, both at
their meeting with the adjudicator and through their additional written
submissions. Since they were also challenging the finding of the customs
officers that they had contravened subsection 12(1) of the Act, the need to
make submissions to that effect appears to me to be self-evident, as is the
need to justify their decision to carry the currency on their person rather
than rely on a transaction through a financial institution, which is the normal
practice for business owners such as themselves. All conclusions drawn by the
adjudicator relied on the factual records of the customs officers and the
evidence submitted by the applicants. The applicants were provided with an
opportunity to make all the submissions they wished, and were granted
extensions of deadline for doing so, but failed to provide the necessary
evidence to sustain their claim on the legitimate provenance of the funds in
question. Therefore, I agree with the respondent that there would have been no
benefit to either the applicants or the decision-maker in communicating the
adjudicator’s report to the applicants before rendering a final decision.
VII. Conclusion
[81]
The
application for judicial review is dismissed.
[82]
There
is no question for certification.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that this application for judicial review is dismissed.
“Paul S. Crampton”
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