Dag v. Canada (Public Safety and Emergency Preparedness), 2007 FC 427

 

 

 

 

Date: 20070420

Docket: T-437-06

Citation: 2007 FC 427

Ottawa, Ontario, April 20, 2007

 

PRESENT:     The Honourable Mr. Justice Blais

 

 

BETWEEN:

MEHMET DAG, CENNET YAS DAG

Applicants

and

 

THE MINISTER OF PUBLIC SAFETY

AND EMERGENCY PREPAREDNESS

Respondent

 

REASONS FOR JUDGMENT AND JUDGMENT

 

[1]               This is an application for judicial review under section 18. 1 of the Federal Courts Act, R.S.C. 1985, c. F-7, in respect of the decision of the Minister of Public Safety and Emergency Preparedness (the Minister) dated April 20, 2004, whereby it was decided that the motive for the infraction was validly retained to justify the seizure of $125,275.00 CAN from the applicants, and that pursuant to section 29 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (the Act), the seized currency was forfeited.

 

 

BACKGROUND

[2]               Mehmet Dag and Cennet Yas Dag (the applicants) are husband and wife. They are Canadian citizens, who immigrated to Canada from Turkey in 1993. They now work in the restaurant business.

 

[3]               Mr. Dag left Montreal for London, England on January 31, 2003, and remained there until November 2003, then travelled briefly to Paris, before returning to Montreal on November 21, 2003. His wife travelled to London on June 4, 2003, and returned with him on November 21, 2003.

 

[4]               Upon their arrival at the Dorval International Airport in Montreal, the applicants reported separately to customs. On their respective signed customs declaration cards, in response to the query as to whether they were transporting currency or monetary instruments totalling $10,000.00 CAN or more, the applicants both answered in the negative. Both applicants were searched by separate customs agents who discovered that Mr. Dag was carrying 10,000.00 British pounds in currency in his pockets (a value of approximately $22,200.00 CAN), while his wife was carrying 66,500.00 Euros in currency hidden in a pair of stockings wrapped around her waist (a value of approximately $103,075.00 CAN). In total, they were carrying currency worth approximately $125,275.00 CAN.

 

[5]               When asked about the provenance of the funds by the customs officer, Mr. Dag explained that the currency derived from the sale of their restaurant in Great Britain, but he did not have in his possession the contract of sale.

 

[6]               As the currency in the possession of the applicants had not been reported to the customs officials as required by subsection 12(1) of the Act, it was seized as forfeit pursuant to subsection 18(1) of the Act.

 

[7]               By letter dated November 26, 2003, the applicants requested a decision of the Minister pursuant to section 25 of the Act, as to whether subsection 12(1) of the Act had been contravened. By letter dated December 11, 2003, the applicants were subsequently provided with written notice of the circumstances of the seizure and an opportunity to submit evidence to the Minister, in accordance with section 26 of the Act.

 

[8]               The first stage of the review of the customs officer’s decision under subsections 12(1) and 18(1) of the Act is done by an adjudicator from the Customs Appeal Directorate at the Canada Border Services Agency (CBSA), which has been given the mandate to conduct a complete and impartial review of decisions rendered by customs agents.

 

[9]               On February 12, 2004, Mr. Dag made submissions in person to the adjudicator, with the help of a translator. The applicant was then given until March 27, 2004, to submit a written summary explaining the origin of the funds in question as well as supporting documentation. No summary was provided, but supporting documentation was sent to the Minister on March 23, 2004. 

 

[10]           Essentially, the applicants maintain that they traveled to London to purchase a restaurant from Mr. Mehmet Temur and completed the transaction in March 2003. They state that they incorporated the restaurant under the name “Pizza 2 for 1 Ltd,” with their son, Ali Dag, acting as the Director.  Then in October 2003, they sold the restaurant to Mr. Yusuf Sar for an amount of 38,000 British pounds.  The applicants maintain that there was no written contract of sale. The applicants also claim in their submissions that the currency in their possession included revenues of 12,199.80 British pounds from operating Pizza 2 for 1 Ltd.

 

[11]           On April 6, 2004, the adjudicator issued a report entitled “Sommaire du cas et raisons pour la décision” (Synopsis and Reasons), recommending that the Minister issue a decision to the effect that the Act was contravened and that the currency seized should be forfeited. This report was forwarded to the Manager of the Customs Appeal Directorate who is delegated to make the Minister’s decisions under sections 25 to 29 of the Act.

 

[12]           On April 20, 2004, the Minister’s delegate issued a decision pursuant to section 27 of the Act, determining that the seizure of the currency was justified under subsection 12(1) of the Act, on the ground that the applicants had not reported the importation of the currency to customs officials.  The decision also confirmed that, pursuant to section 29 of the Act, the seized currency was forfeited, and that such forfeiture was in accordance with the Cross-border Currency and Monetary Instruments Reporting Regulations, SOR/2002-412 (the Regulations).

 

[13]           The applicants decided to appeal the section 27 decision to this Court, as provided for under subsection 30(1) of the Act, and began an action on July 9, 2004. The matter was set to be heard on November 14 and 15, 2006, but the action was withdrawn one week prior to the hearing.

 

[14]           In October 2005, Justice Carolyn Layden-Stevenson released her decision in Dokaj v. Canada (Minister of National Revenue – M.N.R.), 2005 FC 1437, [2006] 2 F.C.R. 152, in which she distinguished the Minister’s decision under section 27 of the Act from his decision made pursuant to section 29 of the Act.  She concluded that the appeal process provided for in section 30 of the Act applies only to the decisions made under section 27. Therefore, the Minister’s decision as to the appropriate penalties under section 29 of the Act is subject only to judicial review.

 

[15]           On March 10, 2006, the applicants commenced the present application for judicial review to challenge the decision of the Minister under section 29 of the Act.

 

ISSUES FOR CONSIDERATION

[16]           The following issues must be considered in this judicial review application:

1)   Did the Minister err by confirming the forfeiture of the currency, pursuant to section 29 of the Act?

2)   Did the Minister violate the duty of procedural fairness owed to the applicants, notably by providing insufficient reasons for the decision?

 

STANDARD OF REVIEW

[17]           First, on the question of procedural fairness, the decision of the Minister must be reviewed on a standard of correctness (Canadian Union of Public Employees (C.U.P.E.) v. Ontario (Minister of Labour), [2003] 1 S.C.R. 539). As such, if this Court finds that the duty of fairness owed to the applicant was violated, no deference will be given to the decision-maker and the application to set aside the decision will be granted (Congrégation des témoins de Jéhovah de St-Jérôme-Lafontaine v. Lafontaine (Village), [2004] 2 S.C.R. 650).

 

[18]           Second, to address the question of whether the Minister erred by confirming the forfeiture of the currency, the proper standard of review must be determined by using the pragmatic and functional analysis, as described in Dr. Q v. College of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226.

 

Privative Clause / Appeal Provisions

[19]           In her recent decision in Sellathurai v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 208, [2007] F.C.J. No. 280 (QL), Madam Justice Sandra J. Simpson noted, at paragraph 47, that the Act contains a strong privative clause found at section 24, which states:

 

[20]           Justice Simpson then noted that there is no statutory appeal from a decision under section 29 of the Act, and thus review is only available through judicial review proceedings. Like Justice Simpson, I believe that these facts suggest a high degree of deference.

 

 

Relative Expertise

[21]           In Thérancé c. Canada (Ministre de la Sécurité publique), 2007 CF 136, [2007] A.C.F. no 178 (QL), Mr. Justice Michel Beaudry held at paragraphs 15 and 16:

15     La Loi confie aux autorités douanières la vérification des déclarations d'importation ou d'exportation d'espèces ou d'effets. Elle accorde aussi aux agents douaniers le pouvoir de saisir à titre de confiscation les espèces ou effets en autant que ces derniers ont des motifs raisonnables de croire qu'il y a eu contravention au paragraphe 12(1). Lorsqu'il y a eu saisie, les espèces ou les effets doivent être restitués moins une pénalité réglementaire sauf si les agents soupçonnent pour des motifs raisonnables qu'il s'agit de produits de la criminalité ou de fonds destinés au financement des activités terroristes (paragraphe 18(2)).

16     Ceux et celles qui détiennent ces pouvoirs décisionnels ont à leur disposition des mécanismes qui sont de plus en plus sophistiqués pour détecter la vraie ou la fausse documentation employée par certains individus afin de prouver l'acquisition, la possession et la destination de la propriété des biens. Il y a donc lieu de faire preuve de retenue.

 

 

[22]           Justice Simpson also discussed the expertise of the Minister’s delegate at paragraphs 49 and 50 of her decision in Sellathurai, above:

¶ 49      Section 29 decisions about the appropriate penalty to impose when currency is unreported are made by Minister's delegates. They are individuals who hold the position of "Manager" in the Adjudications Division of the CBSA's Recourse Directorate. The cross-examination of the Minister's Delegate on his affidavit in this case discloses that managers and adjudicators receive training from RCMP and Department of Justice specialists and that they are guided in their work by an RCMP document entitled "Integrated Proceeds of Crime Investigator Indicator List".

 

¶ 50      There have been 307 decisions made under section 29 since it came into force on January 6, 2003 and in 216 of those cases, forfeiture of the seized currency was confirmed. For these reasons, I acknowledged that Managers have considerable expertise relative to the Court.

 

 

[23]           Justice Simpson went on to conclude that in the case before her, the Minister’s delegate was not required to use any special expertise, as the assessment focused on the credibility of the applicant who had contradicted himself, and on the failure to supply adequate documentation to support his story, which the Court is also able to address. In the case before me, the decision of the Minister’s delegate also rested in part on the lack of supporting evidence, as well as typical business practice. Unlike Justice Simpson however, I would conclude on this factor that the Minister’s delegates do have somewhat greater expertise than the Court, particularly in light of the number of cases that have come before them since the implementation of the Act, and follow the conclusions of Mr. Justice Beaudry in Thérancé, above.

 

The Purpose of the Act and of Section 29

[24]           On the question of the purpose of the Act and of section 29 in particular, I would adopt the analysis of Justice Simpson, who concluded at paragraph 58 in Sellathurai, above:

[…] In my view, the balancing of private and public interests was done by Parliament when it established the legislative scheme. A Minister's Delegate has a much narrower role under section 29. He is simply determining whether, on the facts in a particular applicant's case, a forfeiture should be confirmed. Accordingly, because, in my view, this factor is not polycentric it does not suggest a deferential approach.

 

The Nature of the Question

[25]           The question of whether or not there were reasonable grounds to suspect that the undeclared currency constituted proceeds of crime so as to justify the forfeiture under section 29 of the Act, is a question of mixed fact and law, requiring the understanding and application of the legal test of  ‘reasonable grounds to suspect’, in light of the factual record.

 

Conclusion

[26]           Having considered the four factors, I have concluded that the proper standard of review is that of reasonableness, which requires the Court to determine whether the Minister’s decision can stand up to a somewhat probing examination (Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247). 

 

ANALYSIS

1) Did the Minister err by confirming the forfeiture of the currency, pursuant to section 29 of the Act?

 

[27]           Section 29 of the Act reads as follows:

[28]           Section 29 in turn refers to subsection 12(1) of the Act, which requires the reporting, in accordance with the Regulations, of the importation or exportation of currency above the prescribed amount, in this case $10,000.00 CAN, as per section 2 of the Regulations. While the applicants initially challenged the finding of the Minister to the effect that subsection 12(1) of the Act had in fact been violated, they have abandoned the action and thus we can conclude for our purposes that there was a violation. The next relevant section for the purpose of our analysis is section 18 of the Act, which allows an officer with reasonable grounds to believe that subsection 12(1) has been violated, to seize as forfeit the currency in question. Once the currency has been seized, the next step is outlined at subsection 18(2) of the Act, which reads as follows:

 

[29]           It is this determination as to whether there were “reasonable grounds to suspect that the currency or monetary instruments are proceeds of crime within the meaning of subsection 462.3(1) of the Criminal Code or funds for use in the financing of terrorist activities”, which is challenged by the applicants.

 

[30]           As noted by the respondent, the case at bar deals with an administrative review of an in rem property seizure. This means that the sole issue is whether there are reasonable grounds to suspect that the currency itself is proceeds of crime, not whether the person who failed to declare the currency has committed a crime (Tourki v. Canada (Minister of Public Safety and Emergency Preparedness), 2006 FC 50, [2006] F.C.J. No. 52 (QL).

 

[31]           As noted by Justice Simpson in Sellathurai, above, the legislation is silent regarding the principles to be used by the Minister’s delegate in deciding whether or not to confirm the forfeiture of the currency. She does conclude however, and I agree, that the proper test would be for the delegate to apply the same test as the customs officer, that is to say to determine whether there remained “reasonable grounds to suspect” that the currency was proceeds of crime.

 

[32]           In R. v. Monney, [1999] 1 S.C.R. 652, the Supreme Court of Canada considered section 98 of the Customs Act, R.S.C., 1985, c. 1 (2nd Supp.), which required a customs officer to have reasonable grounds to suspect that a person had narcotics on or about his person, before conducting a strip search. Speaking to the notion of “reasonable grounds to suspect”, the Supreme Court noted at paragraph 49, that it was to be viewed “as a lesser but included standard in the threshold of reasonable and probable grounds to believe”. In the subsequent case of Mugesera v. Canada (Minister of Citizenship and Immigration), [2005] 2 S.C.R. 100, the Supreme Court of Canada discussed the meaning of “reasonable grounds to believe” and concluded at paragraph 114:

¶ 114     The first issue raised by s. 19(1)(j) of the Immigration Act is the meaning of the evidentiary standard that there be “reasonable grounds to believe” that a person has committed a crime against humanity. The FCA has found, and we agree, that the “reasonable grounds to believe” standard requires something more than mere suspicion, but less that the standard applicable in civil matters of proof on the balance of probabilities: Sivakumar v. Canada (Minister of Employment and Immigration), [1994] 1 F.C. 433 (C.A.), at p. 445; Chiau v. Canada (Minister of Citizenship and Immigration), [2001] 2 F.C. 297 (C.A.), at para. 60. In essence, reasonable grounds will exist where there is an objective basis for the belief which is based on compelling and credible information: Sabour v. Canada (Minister of Citizenship & Immigration) (2000), 9 Imm. L.R. (3d) 61 (F.C.T.D.).

 

 

 

[33]           Having considered both of these decisions, Justice Simpson offered the following conclusion at paragraphs 70 and 71 of Sellathurai, above:

¶ 70      The question then is how to describe the lesser but included standard. In my view, even reasonable grounds to suspect must involve more that a "mere" or subjective suspicion or a hunch. The suspicion must be supported by credible objective evidence. In this regard, see R v. Calderon, [2004] O.J. No. 3474. There, the Ontario Court of Appeal considered whether police officers had reasonable grounds to suspect that the appellants had been implicated in the transportation of drugs. In that connection, the Court noted that an objective assessment was essential. The Court said at paragraph 69 that "... even a hunch born of intuition gained by experience ..." would not support a conclusion that reasonable grounds to suspect were present.

 

¶ 71      If credible objective evidence is required to support a suspicion, the question becomes where does the lesser standard appear. To this point, both reasonable grounds to believe and suspect have been treated identically. In my view, the difference must appear in the characterization of the evidence. In Mugasera, supra, the Court said that "compelling" evidence was needed to support reason to believe. In my view, this is where the distinction is made. Evidence to support a suspicion need not be compelling, it must simply be credible and objective.

 

[34]           I completely agree with Justice Simpson’s analysis in Sellathurai, above, with respect to the test to be applied by the Minister’s delegate under section 29 of the Act.

 

[35]           Turning to the application of the test to the factual record in this case, the applicants submit that the Minister did not in fact apply the test of “reasonable grounds to suspect”, as this test was not mentioned in the decision. Rather, the applicants submit that the Minister essentially forfeited the currency because it was not declared.

 

[36]           The respondent for his part maintains that the analysis prepared by the adjudicator and submitted to the Minister, clearly establishes the reasonable grounds to suspect that the currency is proceeds of crime, particularly in light of the incomplete and implausible explanation given by the applicants for the origin of the currency.

 

[37]           As I will address the issue of sufficiency of reasons under the heading of procedural fairness, for the purpose of determining the reasonableness of the Minister’s decision, I will accept that the Minister did rely on the report of the adjudicator from the Customs Appeal Directorate at the CBSA, and examine whether this report discloses a proper application of the test in light of the factual record.

 

[38]           The report provides a concise factual background, as well as a summary of the relevant statutory provisions. The adjudicator acknowledged the receipt of documents from the applicants relating to a restaurant in Great Britain, including a report from an accountant to the effect that the applicants netted a profit of 30,199.80 British pounds from the operation and the sale of this restaurant. The adjudicator then noted that, based on the information in the file, there were a number of elements that provided reasonable grounds to suspect that the origin of the currency was illicit, namely: 1) the failure of the applicants to declare the currency in their possession; 2) the fact that transporting large sums of money is not a legitimate business practice; and 3) the lack of evidence in support of the origin of the currency.

 

[39]           On the failure of the applicants to declare the currency in their possession in filling out their customs declaration card, the respondent submits that, while concealment and failure to declare are not necessarily determinative that the funds are proceeds of crime, they are elements which ought to be taken into consideration since they show the likelihood of an ulterior motive by the individuals. Interestingly, I also note that the applicants did declare the two cigarette cartons worth $50 that they brought back with them.

 

[40]           On the issue of legitimate business practice, the respondent notes that one would expect a legitimate transaction of that size to be handled through a financial institution. Since financial institutions are obligated to declare electronic transfers of funds received from another country valued at or greater than $10,000.00 CAN, the method chosen by the applicants allowed them to circumvent this requirement and, if it had been successful, would have allowed the transfer of funds to go undetected. Therefore, once again, the respondent notes that the approach chosen by the applicants leads one to suspect that they had an ulterior motive in transporting the money this way.

 

[41]           On the issue of the lack of evidence to establish the origin of the currency, which the respondent perceives as the central element in the determination, the applicants provided the adjudicator with a series of documents relating to the purchase and operation of a restaurant in Britain. However, while these documents may support the existence of said restaurant and the role of the applicants’ son in its management, they do not address the origin of the funds directly. The only document provided by the applicants which purports to address this point is the report of an accountant for the period ending December 31, 2003, which indicates that the applicants purchased the restaurant for 20,000.00 British pounds, sold it for 38,000.00 British pounds, and derived a net business profit of 12,199.80 British pounds. However, this report was prepared after the seizure of the currency and was based on information provided by the son of the applicants to the accountant, who did not himself verify the information. It remains that the record contains no contract of sale for the restaurant and no documentation to substantiate its financial earnings. As such, the respondent submits that this raises the likelihood that this business had little or no legitimate operation and was mainly designed to constitute a cover for illegal activity.

 

[42]           I have carefully reviewed the documents submitted by the applicants, and while such documents could be related to restaurant operations, there are other much more relevant documents that could have been provided such as accounts books, details of transactions, monthly results, pictures, list of cheques made over the period. It is simply not possible to see, from the material provided, how the profit was generated.

 

[43]           Confronted with a similar argument in Sellathurai, above, Justice Simpson noted at paragraph 44 of her decision:

¶ 44      It is clear to me that the adjudicator's focus on proof of the actual source of the Forfeited Currency was appropriate. It was not enough to merely show through bank statements and bald statements in affidavits that the Applicant and his business associates had sufficient means to have provided the Forfeited Currency.

 

In so doing, she referred to a previous decision of mine rendered in the immigration context, Martirossian v. Canada (Minister of Citizenship and Immigration), 2001 FCT 1119, [2001] F.C.J. No. 1538 (QL),where I concluded that the visa officer, in reviewing an application for permanent residence in the investor class, was quite justified to question the origin of the applicant’s funds and to state her dissatisfaction with the evidence presented in this regard, which consisted essentially of bank statements and did not contain any documents that could demonstrate the existence and legality of the alleged sales.

 

[44]           Having considered all of the evidence submitted, as well as the arguments of both parties, I find that I must agree with the respondent that there were “reasonable grounds to suspect” that the currency was “proceeds of crime within the meaning of subsection 462.3(1) of the Criminal Code or funds for use in the financing of terrorist activities”, and that such grounds were clearly stated in the recommendation of the adjudicator, on which the Minister’s delegate relied. This leads me to the conclusion that the Minister’s decision was reasonable and should not be set aside.

 

2) Did the Minister violate the duty of procedural fairness owed to the applicants, notably by providing insufficient reasons for the decision?

 

[45]           The applicants submit that the Minister had a statutory duty to provide reasons, which he failed to uphold. The decision of the Minister simply mentioned that all documents submitted as well as the reports in the file were considered, without reference to any specific facts or arguments. The Minister then stated that, pursuant to section 27 of the Act, the seizure of the currency was justified under subsection 12(1) of the Act, on the ground that the applicants had not reported the importation of the currency to customs officials.  Finally, the Minister confirmed that, pursuant to section 29 of the Act, the seized currency was forfeited, and that such forfeiture was in accordance with the Regulations.

 

[46]           On the issue of sufficiency of reasons, the respondent begins by emphasizing that there is no legal duty on the part of the Minister to provide reasons for a decision under section 29 of the Act, unlike the requirement that exists for decisions under section 27. In any event, the respondent submits that the letter dated April 20, 2004, must not be read in isolation, but rather in light of the adjudicator’s report to the Minister, which does provide a summary of the facts and of the evidence submitted, as well as specific grounds for the recommendation under section 29 of the Act.

 

[47]           Normally, in order to determine whether there was an obligation on the part of the Minister to provide reasons and the extent of that obligation, I would turn to the decision of the Supreme Court of Canada in Baker v. Canada (Minister of Citizenship and Immigration), [1992] 2 S.C.R. 817, and weigh the various factors identified by Madam Justice Claire L’Heureux-Dubé, in order to determine the proper scope of the duty of procedural fairness owed to the applicants. In this case, however, not only do I agree with the respondent that the letter of April 20, 2004 must be read in tandem with the adjudicator’s report which contains the more detailed reasons for the decision, but I also agree with the respondent’s subsequent argument to the effect that, having failed to request additional reasons from the Minister, the applicants cannot seek to have the decision set aside on the basis of insufficient reasons.

 

[48]           In Marine Atlantic Inc. v. Canadian Merchant Service Guild, [2000] F.C.J. No. 1217 (QL), the Federal Court of Appeal adopted the reasoning of Mr. Justice John M. Evans (as he then was) in Liang v. Canada (Minister of Citizenship and Immigration), [1999] F.C.J. No. 1301 (QL) at paragraph 31, to the effect that “the duty of fairness normally only requires reasons to be given on the request of the person to whom the duty is owed and, in the absence of such a request, there will be no breach of the duty of fairness”.  The Federal Court of Appeal noted at paragraph 5 of Marine Atlantic Inc., above:

We agree with Evans J. Before seeking judicial review of a tribunal order on the grounds of failure to provide reasons, there is an obligation on parties to request reasons from the tribunal. If the tribunal refuses or provides inadequate reasons, resort to the Court may be appropriate. However, it would unduly complicate the administration of justice if parties could resort to the Court to seek to quash orders of tribunals on the grounds of failure to provide reasons without first requesting them from the tribunal.

 

[49]           Subsequent jurisprudence from the Federal Court has held that this rule also applies in cases where reasons were provided, but were deemed inadequate by the applicant. For instance, in Hayama v. Canada (Minister of Citizenship and Immigration), 2003 FC 1305, [2003] F.C.J. No. 1642 (QL), Mr. Justice Edmond P. Blanchard considered an argument that the applicant had not requested reasons because he already had the program manager's reasons. Justice Blanchard applied the reasoning of the Federal Court of Appeal in Marine Atlantic Inc., above, and concluded at paragraph 15:

¶  15      The comments of Rothstein J. A. are dispositive with respect to the failure of the respondent to provide reasons. The applicant did not request reasons. His argument that he had the reasons and therefore there was nothing left to request is without merit. If the applicant was unsatisfied with the decision letter and felt it did not adequately explain the decision, a request should have been made for further elucidation. There is no evidence that such a request would have been refused. I therefore conclude that, in the circumstances of this case, there is no breach of duty of fairness due to an absence of reasons, or inadequacy of reasons.

 

 

[50]           Finally, the applicants raise an additional argument with respect to procedural fairness, claiming that this duty was violated as they were not provided in advance of the Minister’s decision with the document entitled “Sommaire du cas et raisons pour la décision”, dated April 6, 2004, which formed the basis of the Minister’s decision, and thus were denied an opportunity to respond. Furthermore, this document contains a paragraph which continues to be withheld from the applicants, on the pretext of privilege, which also constitutes a violation of the duty of procedural fairness owed to the applicants.

 

[51]           On the failure of the Minister to provide the applicants with the report of the adjudicator prior to rendering a decision, the respondent maintains that there was no such obligation and that the applicants had an ample opportunity to be heard, both in writing and orally, and to submit documentation to support their claim regarding the origin of the funds. It was clear from the letter dated December 11, 2003, and from the meeting with the Minister’s delegate on February 12, 2004, that the Minister was looking for documentary evidence relating to the alleged origin of the funds. The recommendation of the adjudicator was based on facts that were well known to the applicants and on the evidence already provided by them. Given the relatively poor nature of the documentary evidence submitted by the applicants, there was not a great deal of analysis to be conducted by the adjudicator at that level. Thus, there would not have been any benefit to be derived from providing the applicants with a further opportunity to comment on the adjudicator’s analysis with additional submissions. Therefore, even if there had been a breach of procedural fairness, which the respondent denies, the applicants would not have suffered any prejudice from it and the decision should not be reversed on that basis (see Cable Television Assn. v. American College Sports Co., [1991] 3 F.C. 626 (FCA)).

 

[52]           This argument can be easily disposed of by noting, as the respondent has, that the 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.

 

[53]           Finally, with regard to the one paragraph in the adjudicator’s recommendation, which contains information that was not divulged to the applicants, the respondent notes that this information is subject to privilege for reasons related to the public interest and national security. The respondent submits that the applicants have not challenged the privilege in accordance with rule 318(2) of the Federal Court Rules, SOR/98-106, and having failed to object to the privilege at the first opportunity, they cannot claim that the non-disclosure breaches procedural fairness. In any event, the respondent submits that it is clear from the adjudicator’s recommendation that this was not the reason for the decision by the Minister and is therefore not a determinant fact. It is something that was considered by the customs officer, not by the Minister. The reasons for the section 29 decision by the Minister are summarized towards the end of the recommendation and do not contain any privileged information or any facts not known to the applicants. Thus, even if the applicants had challenged the privilege and had been able to establish that they were wrongfully deprived of information, there would be no prejudice as it was obviously not a determinant factor in the decision.

 

[54]           I agree with the respondent on this point and see no reason to pursue the argument further.

 

[55]           For all the above reasons, this application is dismissed.

 

[56]           Costs in favour of the respondent.

JUDGMENT

1. The application is dismissed;
2. Costs in favour of the respondent.

 

 

“Pierre Blais”

ANNEX

PERTINENT LEGISLATION

 

Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17

 

Cross-border Currency and Monetary Instruments Reporting Regulations, SOR/2002-412

 

 

FEDERAL COURT

 

 

NAMES OF COUSEL AND SOLICITORS OF RECORD

 

 

DOCKET:                                           T-437-06

 

STYLE OF CAUSE:                           MEHMET DAG, cennet yas dag

                                                            v. THE MINISTER OF

                                                            PUBLIC SAFETY AND EMERGENCY

                                                            PREPAREDNESS

 

PLACE OF HEARING:                     Montreal

 

DATE OF HEARING:                       March 27, 2007

 

REASONS FOR JUDGMENT AND JUDGMENT:          MR. JUSTICE BLAIS

 

DATED:                                              April 20, 2007

 

 

APPEARANCES:

 

Ms. Nataliya Dzera                               FOR APPLICANTS

 

Mr. Marc Ribeiro                                 FOR RESPONDENT

 

                       

 

 

SOLICITORS OF RECORD:

 

WAICE FERDOUSSI                         FOR APPLICANTS

Montreal, Quebec

 

JOHN H. SIMS, Q.C.

Montreal, Quebec                                FOR RESPONDENT