Docket: T-425-16
Citation: 2018 FC 219
Ottawa, Ontario, February 27, 2018
PRESENT: The Honourable Mr. Justice Manson
| BETWEEN:
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| ABDULKADIR FARAH JAMA
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| Applicant
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| and
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| THE ATTORNEY GENERAL OF CANADA
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| Respondent
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JUDGMENT AND REASONS
I. Introduction
[1] This is an application for judicial review pursuant to section 18.1 of the Federal Courts Act, RSC 1985, c F-7 [Federal Courts Act] of a decision made by a delegate of the Minister of Public Safety and Emergency Preparedness (the “Delegate”) to hold as forfeit the Applicant’s seized currency of 11,484.27 CDN, pursuant to section 29 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, s 17 [PCMLTFA].
II. Background
[2] The Applicant was born in Somalia and is a Canadian citizen. He owns an importing and exporting business, which requires him to frequently travel to Kenya and China, and he claims that he often carries cash with him on those trips for the purpose of conducting business.
[3] On November 20, 2014, the Applicant was at Toronto’s Pearson International Airport (the “Airport”) returning from a business trip in Kenya. Upon arrival, the Applicant declared that he did not have currency in his possession equivalent to or greater than 10,000.00 CDN; however, he was referred to secondary inspection. During the secondary inspection, a Canadian Border Services Agency (“CBSA”) officer (the “Officer”) asked the Applicant if he had any currency. The Applicant replied that he did and then provided the Officer with all of the currency in his possession.
[4] The Officer found that the Applicant was in possession of 780.00 EUR, 8,780.00 USD and 2,200.00 RMB, which equated to 11,484.27 CDN. As such, the Applicant was obligated to declare this currency but did not. He claimed that he mistakenly believed he was carrying less than 10,000.00 CDN.
[5] The Officer questioned the Applicant about the origins of the currency. The Applicant explained that his cousin in Kenya had supplied most of the money, for the purpose of him purchasing goods in China on his cousin’s behalf, but he had no records or communications to prove this. As well, the Applicant stated that he was an importer of Chinese goods and earned approximately 2000.00 CAD per month. He typically wired money to China but did not explain why he was carrying currency on this occasion.
[6] The Officer seized the currency as proceeds of crime, based on the following indicators:
- the Applicant had just come from a high risk country;
- there was no documentary evidence on the source of the currency;
- the source of the currency was not a financial institution;
- there was an unclear purpose and/or no documentation for the use of currency;
- the amount of the currency was inconsistent with his income;
- the source of his revenue was unclear: he stated one occupation but also had a recently issued taxi driver license;
- he repeatedly avoided answering questions directly;
- he continued to profess innocence rather than answer questions; and
- there were conflicting statements about prior border crossings with currency.
[7] On January 4, 2015, the Applicant sent a letter to the CBSA requesting that the seized currency be returned to him. The Applicant explained that he had inadvertently failed to declare the currency because he had not done proper foreign exchange calculations. As well, his cousin had supplied him with the majority of the seized currency for the purpose of him purchasing goods on his cousin’s behalf. Furthermore, he conducts an importing and exporting business and regularly carries cash on him, which allows for flexibility in making purchases as well as avoiding fees involved with bank transfers or credit cards.
[8] The Applicant submitted documents in support of his request including a certificate of incorporation for “Jama Import Export Ltd.”
as well as various invoices and receipts for goods purchased in China, certificates of origin, packing lists, bills of lading and travel itineraries. Some of these documents bear the name of the Applicant or his corporation. As well, the Applicant’s passport shows regular travel to China and Kenya. Finally, three banking receipts were provided: the first is dated February 17, 2012, and is for a cheque deposit of 16,000 USD; the second is dated August 4, 2012, and is for a cash deposit of 7,000 USD; the third is dated March 11, 2014, and is for a cash withdrawal of 2,800 USD.
[9] In addition to those documents, the Applicant provided two affidavits. The first, sworn by the Applicant’s cousin in Nairobi, Kenya, on November 21, 2014, states that the cousin advanced 8,800 USD to the Applicant for business purposes. The Applicant was to travel to China to purchase various goods on his behalf using that currency. The second, sworn by the Applicant on May 17, 2016, admits that he returned to Toronto from Kenya while carrying the currency in question. He had failed to convert those currencies into Canadian dollars and voluntarily provided the currency to the Officer when asked to do so. The currency was for the purpose of purchasing goods for his cousin, who owns a general store in Kenya where cash is the primary form of payment.
[10] In a letter to the Applicant dated December 11, 2015, the CBSA explained the reasons for the seizure and stated that if no further documentation was received to support the legitimate origin of the seized currency, it would be held as forfeit. The following examples of such documentation were provided: evidence of the origin of the currency (e.g., pay stubs, T4s, records of employment or credit withdrawal records); bank statements demonstrating the deposit of employment income or credit withdrawals into his account and the withdrawal of funds totalling the seized currency; transfer of funds between the Applicant and other individuals who contributed to the funds seized; and a timeline of what the Applicant did with the seized currency from the time it was lawfully obtained until it was seized.
[11] On February 12, 2016, the Delegate rejected the Applicant’s request to have the currency returned to him. Pursuant to section 27 of the PCMLTFA, the Delegate found that there had been a contravention of subsection 12(1) of the PCMLTFA. The Applicant had 11,484.27 CDN in his possession and failed to declare it. His lack of intent or knowledge of the reporting requirements, and the amount by which the currency in his possession exceeded 10,000 CDN, were not relevant. Moreover, the Officer had provided sufficient reasons for having seized the currency as proceeds of crime.
[12] Pursuant to section 29 of the PCMLTFA, the Delegate found that the seized currency shall be held as forfeit. The affidavit and business records provided by the Applicant did not establish the legitimate origins of the currency, and no other documentation had been provided to account for the currency. As a result, the CBSA could not definitively ascertain the origins of any of the seized currency and continued to have suspicions regarding the legitimate origin of those funds.
[13] On March 14, 2016, the Applicant applied for judicial review of the Delegate’s decision, pursuant to subsection 18.1 of the Federal Courts Act.
A. Preliminary Issues
(1) The scope of this judicial review
[14] Only the Delegate’s decision to not grant relief from forfeiture, pursuant to section 29 of the PCMLTFA, is properly under review (Tourki v Canada (Minister of Public Safety and Emergency Preparedness), 2007 FCA 186 at para 18).
[15] If the Applicant seeks to appeal the Delegate’s decision under section 27 of the PCMLTFA, he must bring an action in the Federal Court under section 30 of the PCMLTFA (Dobrovolny v Canada (Minister of Public Safety and Emergency Preparedness), 2011 FC 526 at paras 17-19).
[16] The Applicant has raised several issues related to the initial seizure of the currency. First, he submits that a reasonable person would conclude that the CBSA officers at the Airport, who subjected him to a secondary screening and then seized the currency, were biased. Second, he submits that the currency should not have been seized as proceeds of crime or used to finance terrorist activity, pursuant to subsection 18(2) of the PCMLTFA. Third, he submits that the CBSA officer, who sent the Applicant to secondary screening, provided inadequate reasons for doing so.
[17] These issues are not within the scope of this judicial review. As outlined above, only the Delegate’s decision to not grant relief from forfeiture, pursuant to section 29 of the PCMLTFA, is properly under review. As the Federal Court of Appeal stated in Sellathurai v Canada (Minister of Public Safety and Emergency Preparedness), 2008 FCA 255 [Sellathurai] at paragraph 36:
It seems to me to follow from this that the effect of the customs officer's conclusion that he or she had reasonable grounds to suspect that the seized currency was proceeds of crime is spent once the breach of section 12 is confirmed by the Minister. The forfeiture is complete and the currency is property of the Crown. The only question remaining for determination under section 29 is whether the Minister will exercise his discretion to grant relief from forfeiture, either by returning the funds themselves or by returning the statutory penalty paid to secure the release of the funds.
[Emphasis added]
[18] As this Court stated in Majeed v Canada (Minister of Public Safety), 2007 FC 1082 [Majeed] at paragraph 36:
[…] [T]he decision under review is not that of customs officers under section 18 of the Act. Rather, the decision that forms the subject matter of this application for judicial review is the decision of the Minister’s delegate under section 29 of the Act. Thus any question as to the competence of customs officers is of limited relevance to the issues on this application.
(2) The Applicant’s Charter arguments
[19] The Respondent submits that the Applicant should be precluded from raising arguments based on the Canadian Charter of Rights and Freedoms, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), c 11 [Charter] because his notice of application makes no mention of the Charter and those arguments were raised for the first time in his memorandum of fact and law.
[20] I agree with the Respondent. Rule 301(e) of the Federal Courts Rules, SOR/98-106 [Federal Courts Rules], provides that a notice of application shall set out “a complete and concise statement of the grounds intended to be argued, including a reference to any statutory provision or rule to be relied on”
. An applicant for judicial review must set out in their notice of application the grounds on which they rely, and cannot present new grounds in their memorandum of fact and law (Tl’azt’en Nation v Sam, 2013 FC 226 at para 6).
[21] While the Court does have discretion in this matter, considerations relevant to the exercise of that discretion might include:
- whether all of the facts and matters relevant to the new issue or issues were known (or available with reasonable diligence) at the time the application for leave was filed and/or perfected;
- whether there is any suggestion of prejudice to the opposing party if the new issues are considered;
- whether the record discloses all of the facts relevant to the new issues;
- whether the new issues are related to those in respect of which leave was granted;
- the apparent strength of the new issue or issues; and
- whether allowing new issues to be raised would unduly delay the hearing of the application.
Al Mansuri v Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 22 at paragraph 12
[22] There is no reason why the Applicant could not have raised this issue on a timely basis. In fact, the Applicant has still not filed a notice of constitutional question.
[23] Furthermore, the Applicant’s Charter arguments have little in common with the issues upon which the Court granted leave. While the basis of the application for judicial review is the
fairness and reasonableness of the Delegate’s decision to retain the seized currency, the Applicant’s Charter issue is much broader and framed in vague and imprecise terms:
At issue is whether the cumulative effects of law and policies implemented by the Minister of Public Safety and Emergency Preparedness and the Minister of Finance in relation to [the PCMLTFA] that allow for improper and discriminatory acts, violates the Applicant’s s. 15(1) rights guaranteed by the [Charter].
[24] The Respondent has advanced no evidence on this issue because it had no notice that such a question would be raised.
[25] The statement of this Court in Majeed at paragraph 25 is apt here:
Not only does this course of events seriously prejudice the respondent, it would also mean that the Court would be called upon to determine a constitutional issue largely in an evidentiary vacuum. As the Supreme Court of Canada has repeatedly observed, Charter issues should be decided on the basis of a proper evidentiary record: see, for example, Hill v. Church of Scientology of Toronto, 1995 CanLII 59 (SCC), [1995] 2 S.C.R. 1130 at ¶ 80, and MacKay v. Manitoba, 1989 CanLII 26 (SCC), [1989] 2 S.C.R. 357 at ¶ 8 and following.
[26] The Applicant should have filed a motion to amend the notice of application pursuant to Rule 75(1) of the Federal Court Rules as well as a notice of constitutional question. Accordingly, his Charter arguments will not be considered.
III. Issue
[27] Was the Delegate’s decision not to grant relief from forfeiture reasonable?
IV. Standard of Review
[28] The standard of review of a decision under section 29 of the PCMLTFA is reasonableness (Dag v Canada (Minister of Public Safety and Emergency Preparedness), 2008 FCA 95 at para 4).
V. Analysis
[29] The relevant statutory provisions in play are attached as Appendix A.
A. Was the Delegate’s decision not to grant relief from forfeiture reasonable?
[30] The Applicant submits that he provided ample evidence to show that his currency was not from an illegitimate source. Furthermore, the Delegate’s reasons inadequately address the evidence that was submitted by the Applicant to demonstrate the origins and movement of the currency.
[31] The onus is on the Applicant to establish that there are no reasonable grounds for the suspicion that the currency is from proceeds of crime or used to finance terrorism. Other than his cousin’s affidavit, which is insufficient to show that the currency is from a legitimate source, the Applicant has not provided any documentation to show the legitimate origin of the currency.
[32] In my opinion, the Delegate reasonably found that the evidence provided by the Applicant was not sufficient to establish the origins and movement of the seized currency.
[33] The Federal Court of Appeal has described the standard of proof that the Applicant must meet in order to satisfy the Delegate that the seized funds are not proceeds of crime (Sellathurai at paras 49-51):
[49] Where the Minister repeatedly asks for proof that the seized currency has a legitimate source, as he did in this case, it is a fair conclusion that he made his decision on the basis of the applicant's evidence on that issue. The underlying logic is unassailable. If the currency can be shown to have a legitimate source, then it cannot be proceeds of crime.
[50] If, on the other hand, the Minister is not satisfied that the seized currency comes from a legitimate source, it does not mean that the funds are proceeds of crime. It simply means that the Minister has not been satisfied that they are not proceeds of crime. The distinction is important because it goes directly to the nature of the decision which the Minister is asked to make under section 29 which, as noted earlier in these reasons, is an application for relief from forfeiture. The issue is not whether the Minister can show reasonable grounds to suspect that the seized funds are proceeds of crime. The only issue is whether the applicant can persuade the Minister to exercise his discretion to grant relief from forfeiture by satisfying him that the seized funds are not proceeds of crime. Without precluding the possibility that the Minister can be satisfied on this issue in other ways, the obvious approach is to show that the funds come from a legitimate source. That is what the Minister requested in this case, and when Mr. Sellathurai was unable to satisfy him on the issue, the Minister was entitled to decline to exercise his discretion to grant relief from forfeiture.
[51] This leads to the question which was argued at length before us. 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.
[34] Here, as was the case in Sellathurai, the determinative factor in maintaining the forfeiture was the absence of sufficient evidence to show that the funds were from a legitimate source. The Delegate stated:
[T]he evidence provided does not establish the legitimate origins of the currency. Specifically, with respect to your representative’s statement that your cousin gave you $8,000.00 USD of the seized currency, you were asked to submit documentation to establish your cousin’s lawful origin of the currency, a paper trail from the time your cousin obtained the currency lawfully and a link to show the movement of the money between your cousin and you. However, no documentation was submitted to account for the United States Currency or the Euros or Yuan Renminbi. The signed affidavit provided by your representative does not demonstrate the lawful origin of the currency and does not provide a paper trail to link that portion of currency to the seized currency.
As the documentation supplied does not identify the legitimate origins of the aforementioned amounts of currency, the suspicion regarding the legitimate origin of these particular funds remains as the Agency was not able to definitively ascertain their origin. In view of the foregoing, discretion cannot be granted with respect to the forfeiture of the currency and, as such, it will remain forfeited.
[35] Those reasons contain the elements of transparency, intelligibility and justifiability in the decision-making process and the outcome is within the range of reasonable possible outcomes based on the facts and the law. The Delegate specifically requested documentation showing the legitimate origins and movement of the seized currency. The Applicant provided no such documentation. The documents provided by the Applicant only support his contention that he runs an import and export business and conducts business in China.
[36] Furthermore, affidavits stating that funds are from a legitimate source are not sufficient to establish the legitimate origins of funds (Sellathurai; Kang v Canada (Minister of Public Safety and Emergency Preparedness), 2011 FC 798; Sebastiao v Canada (Minister of Public Safety and Emergency Preparedness), 2013 FC 527 at para 52).
[37] Finally, while the Applicant raised the issue of reasonable apprehension of bias by the CBSA officer who originally pulled the Applicant aside for secondary examination, there is no evidence to support such a finding of fact.
[38] The Delegate’s decision to not grant relief from forfeiture was reasonable.
[39] The parties agreed at the hearing that costs to the successful party should be fixed in a lump sum of $1500.00. The Applicant requested that if costs were awarded against him, he be given an extended period of time to pay such costs. I shall give the Applicant six (6) months to pay costs in full from the date of this judgment.
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