Docket: T-87-14
Citation:
2014 FC 980
Ottawa, Ontario, October 15, 2014
PRESENT: The
Honourable Madam Justice Mactavish
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BETWEEN:
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ABDULAZIZ ISSA
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Applicant
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And
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MINISTER OF PUBLIC SAFETY AND
EMERGENCY PREPAREDNESS
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Respondent
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JUDGMENT AND REASONS
[1]
Abdulaziz Issa seeks judicial review of a Minister’s
Delegate’s decision confirming that the sum of $11,106.70 seized by Canadian
Border Services Agency officers at the Vancouver airport under the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act would be held as
forfeit.
[2]
Mr. Issa asserts that the Minister’s
Delegate imposed a burden on him to establish the source of the funds in issue
that was impossible to satisfy. The Minister’s Delegate further erred, Mr. Issa
says, by refusing to return any of the disputed funds to him unless he could
prove the source of all of the funds in question. Finally, Mr. Issa says
that the Minister’s Delegate’s decision was unreasonable.
[3]
I have not been persuaded that the Minister’s
Delegate erred as alleged. Consequently, the application for judicial review
will be dismissed.
I.
Background
[4]
On January 25, 2012, Mr. Issa was at the Vancouver International Airport, preparing to board a flight to Kenya, via Amsterdam. A CBSA
agent asked him whether he was traveling with currency equal to or greater than
$10,000 Canadian. Mr. Issa stated that he had $9,000 in his possession. He
confirmed that some of this money was his, and that some belonged to other
people.
[5]
An officer then escorted Mr. Issa to a CBSA
office, whereupon Mr. Issa produced currency amounting to $11,106.70 in
Canadian funds. Mr. Issa stated that he had not reported having more than
$10,000 as he had misunderstood the question, and had only reported the money that
belonged to him.
[6]
The CBSA officer asked Mr. Issa why he
needed so much money, given his claim that he was just going on vacation. Mr. Issa
explained that he needed $5,000 for expenses and $1,500 for rent during his
trip.
[7]
When CBSA officers examined Mr. Issa’s
luggage, they found a baggie containing 39.36 grams of a green leafy substance,
which Mr. Issa subsequently identified as khat. I do not understand there
to now be any dispute about the identity of the substance found on Mr. Issa,
or that khat is an illegal drug in Canada.
[8]
A search of CBSA databases revealed that Mr. Issa
had been the subject of a customs enforcement action in March of 2011 involving
the importation of approximately 20 kilograms of khat. While not now denying
that this was so, at the time that he was questioned by CBSA officials, Mr. Issa
professed to not know what this record referred to.
[9]
When asked a CBSA officer asked Mr. Issa where
the money he was carrying had come from, he stated that he had withdrawn $6,000
from the TD Bank and that $4,500 had been obtained from the VBCE Currency
Exchange. He did not explain the source of the $4,500, but said that the $6,000
was business income from his work as a taxi driver.
[10]
Following further discussion with Mr. Issa,
CBSA officials seized $11,050 of the money in Mr. Issa’s possession under
subsection 18(1) of the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, S.C. 2000, c. 17. The equivalent of just over $60 in various
currencies was returned to him “to cover local expenses”.
[11]
The grounds cited by the CBSA for the seizure
were that:
•
Subject was in possession of currency total[l]ing
more than $10,000 CAD that was not reported, despite multiple opportunities to
do so.
•
Clear and visible signage is posted at every
entrance of the International Departures area, explaining the CBSA reporting
requirements when travelling with currency over $10,000 CAD or more.
•
Subject travelling across an international
border with large amount of currency.
•
Bulk smuggling is a common form of money
laundering and distances money from illicit source.
•
Subject travelling beyond his means for his
stated income, living situation, and debt.
•
Currency not wrapped to banking standards and
was in $100 bills which have been suggested as being a preferred currency for
smuggling to foreign jurisdictions.
•
Officer explained that the currency seizure is a
civil penalty and that the claimant was being questioned to determine the
legitimacy of the currency, claimant was uncooperative, answered reluctantly or
was evasive.
•
Claimant made false or contradictory statements
during questioning, for instance not carrying currency above the threshold,
imported khat previously because he did not know it was prohibited…[t]old the
seizing officer he lived with his wife and 7 children, yet told the assisting
officer he did not live with his family.
•
Concurrent to the non-report of the currency,
claimant was arrested for exporting narcotics out of Canada.
•
Previous CBSA enforcement history for
importation of commercial quantities of narcotics.
•
Travelling to a drug source country and showed
no emotion when he was told that his currency was being seized as proceeds of
crime without terms of release.
[12]
Mr. Issa then sought an administrative review
of the officer’s decision. A lengthy exchange of correspondence then ensued between
Mr. Issa and CBSA officials, as Mr. Issa endeavoured to establish
that the source of the seized funds was indeed legitimate. The individuals
whose money Ms. Issa was purportedly transporting also sent correspondence to
the CBSA, explaining where their money had come from.
[13]
On September 26, 2013, a Minister’s Delegate
rendered a decision under section 27 of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act, confirming that Mr. Issa had contravened
the reporting requirements of the legislation. Mr. Issa has not challenged that
decision.
[14]
Included with the section 27 decision was a
second decision, this one under section 29 of the Act. In this second decision,
the Minister’s Delegate confirmed that the monies seized on January 25, 2012
would be held as forfeit, as Mr. Issa had been unable to establish the
legitimate origins of the currency seized. It is this decision that is the
subject of this application for judicial review.
II.
The Minister’s Delegate’s Decision
[15]
Based upon the documents provided to the CBSA
by, or on behalf of Mr. Issa, the Minister’s Delegate was not satisfied
that the seized currency had a legitimate and lawful origin. In particular, the
Minister’s Delegate found that banking records provided by Mr. Issa and
his friends demonstrated that money had been deposited into, and then withdrawn
from financial institutions. These records did not, however, demonstrate the
original source of the funds.
[16]
The Minister’s Delegate acknowledged that Mr. Issa
and his friends worked as taxi drivers in what is essentially a cash business,
and that this would make it difficult for them to establish the lawful origin
of the funds that were found in Mr. Issa’s possession. It was, however,
made clear to Mr. Issa during the review process that additional evidence
as to the source of the funds would be required. Although he was afforded an
opportunity to provide such evidence, Mr. Issa failed to do so.
[17]
Given that the legitimate origin of the seized
funds had not been established, the Minister’s Delegate declined to exercise
the discretion conferred on him by section 29 of the Act, and the forfeiture of
the funds was maintained.
III.
Issues
[18]
Mr. Issa asserts in his memorandum of fact
and law that the Minister’s Delegate erred by imposing a burden on him to
establish the source of the funds that was impossible to satisfy. This argument
was recast somewhat at the hearing, with counsel submitting that the issue was “whether the Minister’s Delegate should have been convinced by Mr. Issa’s
story”. The arguments advanced by Mr. Issa were thus really
addressed to the reasonableness of the Minister’s Delegate’s decision and will
be considered in that context.
[19]
The second issue raised by Mr. Issa is whether
the Minister’s Delegate erred in refusing to return a portion of the seized
funds to him.
IV.
The New Evidence
[20]
Mr. Issa’s affidavit identifies sources of
income that he had not previously identified, and provides a further
explanation as to why Mr. Issa was confused about the amount of money that
he was carrying. Counsel for Mr. Issa conceded at the hearing that this
information cannot properly be considered in an application for judicial
review, as it was not before the Minister’s Delegate when he made the decision
under review. I have accordingly disregarded it.
V.
Was the Minister’s Delegate’s Decision
Reasonable?
[21]
In order to put the Minister’s Delegate’s
decision into context, it is first necessary to have an understanding of the
legislative scheme of the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, and the relevant jurisprudence.
[22]
As the Federal Court of Appeal observed in Sellathurai
v. Canada (Minister of Public Safety & Emergency Preparedness), 2008
FCA 255, at para. 34, [2009] 2 F.C.R. 576, the Minister’s
discretion under section 29 of the Act is only engaged once he has concluded that
there has been a failure to report under section 12 of the Act.
[23]
Given that Mr. Issa does not dispute that
he failed to report that he was carrying more than $10,000 on January 25, 2012,
“the starting point for the exercise of the Minister’s
discretion is that the forfeited currency … is, for all legal purposes,
property of the Crown”: Sellathurai, above at para. 34. It
is not the role of the Minister or Minister’s Delegate in a section 29 decision
to reassess the customs officer’s contravention decision: Sellathurai,
above at para. 43. The only issue to be determined under section 29 of the
Act “is whether the Minister will exercise his discretion
to grant relief from forfeiture”: Sellathurai, above at para. 36.
[24]
The onus is on an applicant under section 29 of
the Act to demonstrate that the seized currency is not the proceeds of
crime. As the Federal Court of Appeal observed in Sellathurai, one
obvious way to do this is to show that the seized funds came from a legitimate
source. If an applicant is unable to show that the funds came from a legitimate
source, the Minister is entitled to decline to exercise his discretion to grant
relief from forfeiture: Sellathurai, above at para. 50.
[25]
As concerns the standard of proof that an
applicant must meet to obtain section 29 relief, the Federal Court of Appeal
held in Sellathurai that it was “neither necessary
nor useful to attempt to define in advance the nature and kind of proof which
the applicant must put before the Minister”: at para. 51. The
question is whether the Minister’s conclusion as to the legitimacy of the
source of the funds in question is reasonable, in light of the evidence in the
record.
[26]
In deciding whether the decision under review
was reasonable, it is sufficient if the reasons offered by the Minister’s
Delegate are transparent, intelligible and justified, and that the result
reached “falls within a range of possible, acceptable
outcomes which are defensible in respect of the facts and law”: Dunsmuir v.
New Brunswick, 2008 SCC 9 at para. 47, [2008] 1
S.C.R. 190.
[27]
Similarly, it is not for this Court to reweigh
the evidence. Rather, under a reasonableness review, the Court’s role is
limited to making findings of irrationality or arbitrariness: Kanthasamy v. Canada (Citizenship and Immigration), 2014 FCA 113 at para. 99, 372 D.L.R. (4th)
539.
[28]
Keeping the relevant legal principles in mind, I
am satisfied that the decision of the Minister’s Delegate in this case was
indeed reasonable.
[29]
As was the case in Sellathurai, the
evidence Mr. Issa provided in support of his application for section 29
relief was essentially unverifiable. He provided a letter confirming his
employment as a taxi driver as well as banking statements for a couple of
months preceding his scheduled departure. While these statements confirmed that
Mr. Issa had money in his possession at certain times, it did not
demonstrate the source of the funds that were seized by the CBSA.
[30]
Employment letters and banking statements
provided by the individuals whose money was in Mr. Issa’s possession at
the time of the seizure also did not provide an identifiable link between the
individuals’ employment and the monies seized.
[31]
Mr. Issa argues that taxi drivers work in a
cash business, and that he and his friends did not have books and records to
demonstrate the source of their funds. However, as the Minister has pointed
out, taxpayers are required to keep books and records of their earnings in
order to comply with their obligations under the Income Tax Act, R.S.C.
1985 (5th Supp.), c. 1.
[32]
A CBSA adjudicator repeatedly told Mr. Issa that
the information he had provided to the CBSA was insufficient to demonstrate
that the monies seized on January 25, 2012 came from a legitimate source. The
adjudicator explained why this was so, and Mr. Issa was afforded additional
time to provide additional documentation. He failed to do so, and the
Minister’s Delegate concluded that he had not met his onus under section 29 of the
Act. That conclusion was one that was reasonably open to the Minister’s
Delegate on the record before him.
VI.
Did the Minister’s Delegate Err in Refusing to
Return a Portion of the Seized Funds to Mr. Issa?
[33]
Mr. Issa also contends that the CBSA
adjudicator who prepared a case synopsis for the Minister’s Delegate found that
Mr. Issa’s brother had provided payroll cheque stubs and banking records that
substantiated the source of $500 of the monies in issue. Given this finding, Mr. Issa
submits that the Minister’s Delegate should have authorized a partial return of
the seized currency to this extent.
[34]
As the parties have noted, there is some
divergence in the jurisprudence of this Court as to whether section 29 of the
Act permits partial relief from forfeiture where it can be established that a
portion of the seized funds were not the proceeds of crime. In Da Huang v. Canada (Minister of Public Safety and Emergency Preparedness), 2013 FC 729, [2013] 435
F.T.R. 243, this Court held that it did. However, a contrary finding was made
in Admasu v. Canada (Minister of Public Safety and Emergency Preparedness),
2012 FC 451, [2012] 408 F.T.R. 143, Dhamo v. Canada (Minister of Public
Safety and Emergency Preparedness), 2013 FC 443 at paras. 16 and 33, [2013]
F.C.J. No. 496, Mohammad v. Canada (Minister of Public Safety and Emergency
Preparedness), 2013 FC 148, 427
F.T.R. 185 and Tran v. Canada (Minister of Public Safety and Emergency
Preparedness), 2013 FC 600, [2013] 433 F.T.R. 273.
[35]
I do not, however, need to decide this question
in this case as the Minister’s Delegate reasonably found as a fact that Mr.
Issa had not established that any portion of the seized funds were not
the proceeds of crime
[36]
The CBSA adjudicator who prepared the case
synopsis for the Minister’s Delegate did not find that the $500 was not
the proceeds of crime. She simply stated that “it is
feasible that the currency provided by [Mr. Issa’s brother] could be
sourced from his employer earnings”.
[37]
More importantly, the Minister’s Delegate observed
that none of the documents provided by, or on behalf of Mr. Issa
established where any of the money originated, or that any of the money, including
the $500 allegedly provided by Mr. Issa’s brother, was not the proceeds of
crime. This conclusion was reasonably open to the Minister’s Delegate on the
record before him, and Mr. Issa has not established the existence of a
reviewable error in this regard.
VII.
Conclusion
[38]
For these reasons, Mr. Issa’s application
for judicial review is dismissed with costs to the Minister fixed in the amount
of $1,500.00.
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