Date: 19980601
Docket: IMM-1431-97
BETWEEN:
Applicant,
- and -
THE MINISTER OF CITIZENSHIP AND IMMIGRATION,
Respondent.
REASONS FOR ORDER
MULDOON, J.
[1] This is an application for judicial review pursuant to section 82.1(2) of the Immigration Act, R.S.C. 1985 c.I-2, of a decision of a visa officer (B030449403) dated March 4, 1997 in which the visa officer refused the applicant's application for permanent residence as an investor.
[2] The applicant is a medical doctor, having graduated from the Henan Medical University in China in 1961. Upon graduation, the applicant practiced medicine in China until 1976. From 1977 to 1982, the applicant was employed by an acupuncture clinic in Hong Kong. From 1982 to 1985, he worked as a first aid officer during the construction of the transit railway in Hong Kong. In 1985, the applicant began his career at Jardine Matheson in the sales department. In 1993 he was transferred to Inchcape JDH Limited where he is now employed as a sales manager of the Danby Division.
[3] The applicant is responsible for the sale of medical laboratory equipment in China. His responsibilities include the preparation of multi-year strategic plans and yearly operational plans, managing a staff of seven (three engineers, three sales representatives and a secretary), preparing financial forecasts, budgeting, marketing and sales, which includes negotiating contracts and designing client satisfaction surveys for his division. In 1994 to 1995, the sales in his division amounted to HK $17 000 000.00 ($2 982 456.14 CAD) He reports to the general manager of Inchcape JDH Limited.
[4] On July 5, 1996, the applicant signed a subscription agreement with the British Columbia Investment Fund. After a review of the applicant"s file, the applicant was called in for an interview scheduled to take place on February 14, 1997. At the interview, the visa officer confirmed the applicant"s personal net worth of approximately $ 1 300 000.00 CAD. During the interview, the visa officer and the applicant discussed the definition of "investor" as it appears in the Immigration Act . The visa officer informed the applicant that she was not satisfied that the applicant"s position at Inchcape JDH was consistent with the level of responsibility required in operating, directing or controlling a business.
[5] On February 20, 1997, the applicant sent a letter to the attention of the visa officer, Mary Coutler, who was responsible for his file: (page 9 of the Application Record - AR). The letter reiterates some of his responsibilities at Inchcape JDH but also states that as a sales manager, he is held accountable to the corporation as if operating his own business. The applicant also indicates that he feels that he meets the definition of "entrepreneur" as he has the "ability to establish, purchase or make a substantial investment in a business or commercial venture in Canada". He adds that, in his opinion, his business will contribute significantly to the economy of Canada. He concludes by asking the visa officer to reconsider his application under "the Business category".
[6] The visa officer states that the letter was not brought to her attention before the letter refusing the applicant"s application was sent. The letter (AR, page 14 to 15) refusing the applicant"s application reads, in part:
| 1. I am not satisfied that you have ever successfully operated, controlled or directed a business. During your interview of February 14th, 1997, you stated that you had practiced medicine in a hospital, worked for an acupuncture clinic as a medical officer during the construction of the MTR. During this time, you did not operate, control or direct the businesses that you worked for. |
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| 2. In 1985 you began your career in sales and in 1993 were transferred to Inchcape JDH Limited where you are now employed as a Sales Manager. Having discussed you [sic] responsibilities which include managing sales representatives and service engineers in the PRC, I am satisfied that you are a qualified and experienced Sales Manager. Unfortunately, the management of a particular division of Inchcape JDH Limited does not equate to operating, controlling or directing Inchcape JDH in your own right. |
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In her affidavit, the visa officer, Mary Coutler deposes that:
| I was not satisfied that Mr. Koo"s employment with Inchcape JDH Limited constitutes operating, controlling or directing a business. As a Sales Manager of one division of a major multinational firm, Mr. Koo was able to demonstrate that his responsibilities included the supervision of staff, the management of a significant budget and considerable autonomy in the day to day operations of his particular division. However, this management responsibility does not constitute controlling, operating or directing a business. |
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| It was my belief that decisions on the operation, control and direction of the business that would impact on the overall direction of the company were made by persons of higher position in the organizational hierarchy of Inchcape JDH Limited. Mr. Koo reported to the General Manager and confirmed at interview that his decision-making responsibility was limited. |
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| Mr. Koo explained that he was not aware that he would have to satisfy the visa officer that he had operated, controlled or directed a business. I further explained that although it was not necessary to actually own the business or shares in the business, I was not satisfied, in this case, that his position in the Danby Division of Inchcape JDH Limited was consistent with the level of responsibility implicit in operating, directing or controlling Inchcape JDH Limited. Basically, Inchcape is an extremely large, well-known corporation in Hong Kong. The fact that the applicant was given responsibility for a small division of 8 persons which was primarily involved in the sale of medical equipment to the PRC, does not, in my opinion allow the applicant to meet the requirement of directing, controlling or operating a business. |
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[7] The applicant has raised the following issues in this application for judicial review:
| 1. Did the visa officer err in determining the applicant does not come within the definition of "investor"? |
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| 2. Did the visa officer breach the duty of procedural fairness by not considering the letter sent by the applicant when making her decision? |
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Investor Definition
[8] Subsection 2(1) of the Immigration Regulations, 1978 SOR 78/192 defines "investor" as follows:
| "investor" means an immigrant who |
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| (a) has successfully operated, controlled or directed a business, |
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| (b) has made a minimum investment since the date of the investor"s application for an immigrant visa as an investor, and |
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| (c) has a net worth, accumulated by the immigrant"s own endeavours, |
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| (i) where the immigrant makes an investment referred to in subparagraph (a)(i) or (ii), (b)(i), (c)(i) or (ii), (d)(i) or (ii) or (e)(i) or (ii) of the definition "minimum investment", of at least $500,000, or |
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| (ii) where the immigrant makes an investment referred to in subparagraph (a)(iii), (b)(ii), (c)(iii), (d)(iii) or (e)(iii) of the definition "minimum investment", of at least $700,000; |
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The visa officer determined that the applicant met the requirements of paragraph (b) and (c) but decided that the applicant did not "operate, control or direct" a business.
[9] The applicant relies on Chen v. Minister of Employment and Immigration (1993), 65 F.T.R. 73, 20 Imm.L.R. (2d) 290, in which Mr. Justice Rothstein held that the words "operated, directed or controlled" contained in the Regulation must be read disjunctively; that is, that a visa officer is required to assess each aspect of the definition separately to determine whether an applicant meets at least one of the requirements.
[10] On the facts of this case, it appears that the applicant did not control or direct the business by which he was employed. However, the applicant argues that he "operated" his particular division of Inchcape JDH Limited and that this amounts to "operating" a business, in its own right. To support this argument, the applicant relies on Cheng v. Canada (Secretary of State) (1995), 25 Imm. L.R. (2d) 162, a decision of Mr. Justice Cullen of this Court.
[11] In Cheng, like the case at bar, the applicant worked for a large corporation as a sales manager. The applicant was responsible for all aspects of sales in the Hong Kong and China. He was a supervisor of 14 employees, in a corporation that employed 3000 workers. After being interviewed by visa officer, Mr. Cheng"s application for permanent residence was denied on the basis that he did not own, control or operate the business for which he worked. Mr. Justice Cullen relied upon Guidelines which have since been repealed, in the Immigration Manual to hold that the investor category is not limited to "owners, presidents or vice-presidents, but is intended to extend to such persons who have held a post of significant responsibility, such as a manager of a particular division or section of a larger company".
[12] Mr. Justice Cullen held that the visa officer imported additional requirements into the criteria for qualifying for the investor program; namely the operation of the corporation as a whole. To that end, Mr. Justice Cullen made the following comments;
| Indeed, if she [the visa officer] found that the applicant was responsible for the operation of an integral, profit-generating part of the business, then he ought to have met the criteria absent some other factor. In the case at bar, the only such factor I can see is the added requirement of operating the business as a whole. This means that only those few at the actual top of the corporate ladder would qualify, while others in positions of otherwise great practical responsibility would not. |
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| This strict reading of the definition of investor is not consistent with the policies of Immigration Canada, as set out in the Regulations, or expressed in the guidelines. It is not intended that the applicant operate a wholly-owned business or a wholly-owned undertaking. That interpretation is clearly wrong and the addition of such a criteria does amount to an error of law which adversely affected the exercise of her jurisdiction and which warrants referring the matter back to a different Immigration Officer for redetermination. Essentially, by imposing her own criteria for the definition of investor on the circumstances of the applicant, the officer has fettered her discretion. Further, unless and until some new guidelines are introduced, the parties affected by the policy are entitled to be treated in a consistent manner, not to the arbitrary addition of criteria by each particular Immigration officer. |
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(pp. 166-67)
[13] While the guidelines referred to by Mr. Justice Cullen have since been repealed, this case has also been cited with approval by Mr. Justice Pinard (Tam v. Canada (Minister of Citizenship and Immigration)) and Mr. Justice Gibson (Kwok v. Canada (Minister of Citizenship and Immigration) ) for the proposition that an applicant does not have to own a business to qualify as an investor. A visa officer must assess the qualifications of the applicant to determine whether the applicant"s responsibilities amount to "operating, directing or controlling" a business; not whether the responsibilities amount to "operating, directing or controlling" the entire business with which the applicant is employed. In Kwok, Mr. Justice Gibson stated the following:
| Title is not a relevant consideration, except as may accurately reflect responsibility. Ownership of shares in the business is not a relevant consideration in respect of operation of a business. Salary may be a relevant consideration, but there is nothing to indicate that the visa officer took into account the evidence before him that the Applicant received performance bonuses in addition to his salary which might have been significant in amount and been in the nature of profit sharing that would involve the Applicant in enjoyment of a share in his employers [sic] success. The Applicant"s reporting relationship is certainly relevant to "control" but, as with his title, is much less relevant to the question of operation of a business than the nature of the Applicant"s authority and responsibility. |
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Looking to the visa officer"s decision herein, it appears that she similarly erred by requiring that the applicant own Inchcape JDH as a whole and she failed to assess whether his responsibilities were consistent with operating, directing or controlling a business. This reasoning is shown both in the refusal letter sent to the applicant and her affidavit. The letter reads:
| Having discussed you [sic] responsibilities which include managing sales representatives and service engineers in the PRC, I am satisfied that you are a qualified and experienced Sales Manager. Unfortunately, the management of a particular division of Inchcape JDH Limited does not equate to operating, controlling or directing Inchcape JDH in your own right. |
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In her affidavit, she states:
| I further explained that although it was not necessary to actually own the business or shares in the business, I was not satisfied, in this case, that his position in the Danby Division of Inchcape JDH Limited was consistent with the level of responsibility implicit in operating, directing or controlling Inchcape JDH Limited. |
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Based on the above comments, it seems clear that the visa officer erred by failing to assess whether the applicant"s responsibilities were consistent with the responsibilities required in controlling a business. Instead, her focus was whether the responsibilities amounted to controlling Inchcape JDH Limited.
[14] As to the applicant"s second argument, it is apparent that the argument must fail. The letter sent to the visa officer stated no more than was already contained in his file. While the visa officer clearly did not consider the letter, it does not provide "additional evidence" as it was merely a reiteration of facts already known.
[15] Therefore, based on the visa officer"s error in law, this application for judicial review must be allowed. Another visa officer shall therefore assess Dr. Koo's application for permanent residence as an investor.
[16] In oral argument counsel for the applicant requested costs under rule 22 of the Federal Court Immigration Rules SOR/93-22. This rule provides that:
| No costs shall be awarded to or payable by any party in respect of an application or an appeal under these Rules unless the Court, for special reasons orders. |
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Counsel for the applicant argued that special reasons exist: the visa officer in Hong Kong did not abide by the Court"s pronouncement in Cheng and needlessly caused this judicial review application to be commenced. Counsel for the respondent argued that special reasons do not exist, as there was no malice on the part of the visa officer and the issue was merely one of differing opinions as to whether the jurisprudence applied.
[17] The cases to date in which costs have been awarded were certainly extraordinary cases warranting cost sanctions. For example, in Chan v. Minister of Employment and Immigration (1994), 82 F.T.R. 244 the respondent was willing to consent to the judicial review application but the applicant, believing in the strength of his case insisted that the matter be fully litigated to establish that certain regulations application to his application for permanent residency were ultra vires. Accordingly, Mr. Justice Rothstein awarded costs against the applicant.
[18] Another case which demonstrates special reasons is Minister of Employment and Immigration v. Ermeyev (1994), 83 F.T.R. 159. In that case, costs were awarded against the Minister because the Court was of the view that the respondents were unnecessarily put through a great deal of trouble and expense for a period of 4 years by the Minister"s officials. At the discontinuance of the judicial review, costs were awarded against the Minister.
[19] Both of these case establish that special reasons exist when a case which ought not to be brought before this Court is nonetheless commenced or continued despite clear signs that it is frivolous. Such is not the case at bar. The applicant's counsel achieved a fine lather of oratorical indignation, saying that the visa officer and the respondent's department have treated Mr. Justice Cullen's decision in Cheng as less important, as having "no more force and effect at [Canadian commissions and consulates] than wallpaper". It seemed to the applicant's counsel "that probably romance novels get more attention". He asserted that this case should never have needed to have come before the Court for judicial review, and the respondent should pay all or part of Dr. Koo's costs to wake up the department out of its generally contumacious attitude about Federal Court decisions, as he alleged. Counsel thought that costs ought also to be awarded regularly against applicants whose cases are weak or frivolous.
[20] Although the visa officer erred in conducting her assessment, it does not for this time warrant costs as there is no evidence that the decision was made in bad faith: negligence perhaps. By participating in this judicial review, the Minister has not, by counsel, demonstrated frivolous behaviour such that an award of costs could prevail, this time. But awards of costs are likely coming.
[21] Accordingly, the applicant"s request for costs fails, but just barely.
F.C. Muldoon
Judge
Ottawa, Ontario
June 1, 1998
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