Date: 20071019
Docket: T-1238-06
Citation: 2007 FC 1082
Ottawa, Ontario, October 19,
2007
PRESENT: The Honourable Madam Justice Mactavish
BETWEEN:
JAVED
MAJEED
Applicant
and
THE
MINISTER OF PUBLIC SAFETY
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
[1]
On
May 15, 2005, Javed Majeed arrived at Pearson International Airport on a flight
from Pakistan. He provided
customs officials with a written declaration which indicated that he was not
bringing more that $10,000 in Canadian funds into this country. Customs
officers subsequently discovered that he was carrying $43,070 worth of Canadian
and American currency.
[2]
After
questioning Mr. Majeed, customs officials seized the money as forfeit as
suspected proceeds of crime, in accordance with subsection 18(1) of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act, 2000, c. 17 (“the
Act”). Mr. Majeed then sought an administrative review of the officer’s
decision. A Minister’s delegate confirmed the forfeiture.
[3]
Mr.
Majeed now seeks judicial review of that decision, asserting that the
forfeiture provisions of the Act are inconsistent with section 8 of the Canadian
Charter of Rights and Freedoms. He also argues that the customs officer
was not capable of making the original decision to seize the money in issue.
Mr. Majeed further submits that the Minister’s delegate erred in applying the
wrong burden and standard of proof, and was biased against him. Finally, Mr.
Majeed says that the decision to confirm the customs officer’s decision was
unreasonable.
[4]
For
the reasons that follow, I am of the view that there is no merit to any of Mr.
Majeed’s arguments. As a consequence, the application for judicial review will
be dismissed.
Background
[5]
In
order to understand the issues in this case, it is necessary to have some
understanding of the legislative scheme provided for in the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act. To assist in this
regard, the relevant provisions of the Act are attached as an appendix to this
decision.
[6]
Under
the provisions of subsection 12(1) of the Act, Mr. Majeed was obliged to report
to Canada Customs if he was bringing currency worth more that $10,000 into this
country. It is not disputed that Mr. Majeed failed to do so, and that a search
of his belongings uncovered $43,070 in Canadian and American currency.
[7]
Mr.
Majeed explained that the money came from several sources, including the
proceeds of the sale of a property in Pakistan, and his personal
savings.
[8]
The
customs officials found that given that the money had not been declared, that
the amount of money that Mr. Majeed was carrying was not consistent with his
income, and that $43,070 was a large amount of cash to be carrying across an
international border, the money was seized as forfeit.
[9]
As
the Customs officers were of the view that there were reasonable grounds to
suspect that the funds were the proceeds of crime, no terms of release were
offered to Mr. Majeed.
[10]
Following
the seizure of the funds, Mr. Majeed 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.
[11]
A
member of the Canadian Border Security Agency’s Admissibility Branch then
invited Mr. Majeed to provide any evidence that he wished to provide in the matter.
Mr. Majeed provided an affidavit indicating that the funds were from his own
legitimate sources of savings and investments, as well as from the sale of a
property in Pakistan. He included
copies of the sale agreement, as well as bank statements which reflected
withdrawals from his personal account.
[12]
The
CBSA then informed Mr. Majeed it did not accept his banking records as evidence
as to the source of a portion of the funds, as they did not establish that
money withdrawn from his account several years previously was the same money
seized at the airport. The CBSA also requested further evidence to show the
conversion of the funds from the sale of the property into Canadian and
American currency.
[13]
Mr.
Majeed then explained that to protect against the potential threat of robbery,
he had exchanged the funds in several instalments, at different locations. He
further stated that as a result of concerns for his safety, he did not retain
receipts of the transactions. According to Mr. Majeed, the continued possession
of such receipts might reveal to potential criminals the amount of money on his
person or in his possession.
[14]
The
CBSA responded, reiterating its concern with respect to Mr. Majeed’s failure to
provide documentary evidence to show the conversion of funds from the sale of
the home into Canadian and American currency.
[15]
In
a decision dated June 29, 2006, a Minister’s delegate found that subsection
12(1) of the Act had been contravened, as Mr. Majeed had not reported the
importation of the currency, as required by law. The operative portion of the
decision provides:
The evidence submitted has confirmed that
you failed to properly report $22,000.00 US and $15,800.00 CAD to Customs
officials on May 16, 2005. You were specifically questioned by a Customs officer.
As such, you were provided with every opportunity to make a true and complete
declaration and yet failed to do so. A reasonable suspicion existed at the time
of seizure, the forfeiture of the currency was warranted. The documentation
submitted did not establish the legitimate origin of the seized currency. The
bank statements submitted were not current. Furthermore, you were requested to
provide documentary evidence of the conversion of currency from the sale of a
house. You stated that you were unable to do so as you did not keep any
documentary records. Based on the totality of the evidence and the lack of
verifiable, credible evidence, reasonable suspicion still exists. As such, the
currency shall remain forfeit.
[16]
In
an attached “Case Synopsis and Reasons for Decision” completed by an
adjudicator, the correspondence history between Mr. Majeed and the CBSA is
reviewed. Essentially, that report reiterates the adjudicator’s concern that
Mr. Majeed had failed to provide documentary evidence to demonstrate the sale
of the property in Pakistan and the conversion of the proceeds into
Canadian and American currency. The adjudicator also noted that there was
insufficient evidence to establish that some of the funds came from Mr.
Majeed’s personal savings. Because of his failure to provide sufficient
evidence as to the source of the funds, Mr. Majeed had not successfully
challenged the reasonable suspicion that the currency was proceeds of crime.
[17]
Therefore,
it was determined that there had been a contravention of subsection 12(1) of
the Act on the basis of Mr. Majeed’s failure to report the importation of
currency. In addition, the Minister authorized that the seized currency be held
as forfeit in accordance with the provisions of section 29 of the Act.
[18]
It
is the section 29 decision that forms the basis of this application for
judicial review.
[19]
Before
turning to address the issues properly before this Court on this application,
it is first necessary to address Mr. Majeed’s efforts to challenge the
forfeiture provisions of the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act.
The Charter
Issues
[20]
Mr.
Majeed’s Notice of Application for Judicial Review makes no mention of any Charter
issues in this case. In his memorandum of fact and law, he asserts only that
“Section 18(2) of the Act violates section 8 of the Charter by
creating a threshold that allows for the unreasonable seizure of an
individual’s funds”. The memorandum of fact and law goes on to state that this
issue will be addressed in a Notice of Constitutional Question. Mr. Majeed’s
affidavit is silent with respect to the Charter issue.
[21]
Shortly
before the hearing in this matter, Mr. Majeed served a Notice of Constitutional
Question challenging the constitutional validity of the “the authority
conferred on an officer under section 18(2) of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act”. It is in this document that, for
the first time, Mr. Majeed outlines the basis for his challenge.
[22]
At
the commencement of the hearing, counsel for the respondent objected to Mr.
Majeed endeavouring to raise a Charter issue in this manner.
[23]
After
hearing from counsel for Mr. Majeed, I ruled that he would not be permitted to
pursue his Charter issue. This is because the jurisprudence is clear:
this Court will deal only with the grounds of review invoked by an applicant in
his or her Notice of Application for Judicial Review. If an applicant were
permitted to invoke new grounds of review in his or her memorandum of fact and
law, the respondent would not be able to adduce evidence to address the new
ground: see, for example, Arora v. Canada (Minister of Citizenship and
Immigration), [2001] F.C.J. No. 24.
[24]
In
this case, the situation is worse than that which confronted the Court in the Arora
matter. Mr. Majeed’s memorandum of fact and law does not even assist the
respondent in gleaning the basis for his Charter argument. Thus, not
only did the respondent have no opportunity to adduce evidence in support of
the Minister’s position, the respondent also had no opportunity to respond to
the Charter argument in its memorandum of fact and law.
[25]
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] 2 S.C.R. 1130 at ¶ 80, and MacKay v. Manitoba,
[1989] 2 S.C.R. 357 at ¶ 8 and following.
Issues
[26]
Having
refused to entertain Mr. Majeed’s Charter challenge, the remaining
issues for determination on this application are the following:
1. What is the
appropriate standard of review to be applied to the Minister’s decision?
2. Was
the Customs officer capable of making the original decision to seize the money
in issue?
3. Did the Minister’s
delegate err in applying the wrong burden and standard of proof?
4. Was the Minister’s
delegate biased against Mr. Majeed?
5. Was the Minister’s
delegate’s decision unreasonable?
Standard of Review
[27]
The
parties agree that Mr. Majeed’s arguments with respect to the appropriate
burden and standard of proof are legal questions which should be reviewed
against a standard of correctness. I agree with this, adopting pragmatic and
functional analysis carried out by Justice Simpson in Sellathurai v. Canada (Minister of
Public Safety and Emergency Preparedness), 2007 FC 208, as it
relates to questions of law.
[28]
Mr.
Majeed’s bias argument raises a question of procedural fairness. The issue of
the standard of review does not arise in relation to such questions – it is for
the Court to determine whether the individual received a fair hearing or not,
having regard to all of the relevant circumstances: Sketchley v. Canada
(Attorney General), [2005] F.C.J. No. 2056, 2005 FCA 404, at ¶ 52-53.
[29]
I
understand Mr. Majeed’s argument with respect to the alleged incapacity of the
customs officer to raise a further question that is essentially legal in
nature, and I intend to consider this issue on the standard of correctness.
[30]
Finally,
insofar as the merits of the Minister’s delegate’s decision is concerned, I
note that there is a divergence in the jurisprudence of this Court as to the
appropriate standard of review to be applied to the merits of decisions made
under section 29 of the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act.
[31]
Some
judges have found the standard of review to be that of patent
unreasonableness: see, for example, Thérancé c. Canada (Ministre de
la sécurité publique), 2007 CF 136. More commonly, judges have found
the standard to be that of reasonableness: see Dag v. Canada (Minister of
Public Safety and Emergency Preparedness), 2007 FC 427, and Sellathurai,
previously cited.
[32]
It
is not necessary to resolve this issue in this case, as I am satisfied that the
merits of the decision under review can survive scrutiny under the more
exacting standard of reasonableness.
Was the Customs Officer
Capable of Making the Original Seizure Decision?
[33]
As
I understand Mr. Majeed’s submissions on this issue, he contends that before
applying the “reasonable grounds to suspect” standard, customs officers need to
understand what factors to look for, and which factors will satisfy the
standard.
[34]
According
to Mr. Majeed, given that customs officers are not police officers, prosecutors
or judges, they are therefore not qualified to determine whether there are
reasonable grounds to suspect that currency is the proceeds of crime in a given
case, as this is a question of law. As a consequence, he says that the
decision under review should be set aside.
[35]
Mr.
Majeed cites no legal authority in support of his position, and I do not accept
his argument.
[36]
First
of all, the 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.
[37]
Moreover,
as was the case with Mr. Majeed’s Charter issues, fairness concerns
arise as a result of the way that he has attempted to bring this issue
forward. That is, Mr. Majeed did not clearly raise any issue as to the alleged
lack of qualifications on the part of the officers in either his Notice of
Application or his affidavit. As a consequence, the respondent was not on
notice that this was an issue, and was not afforded the opportunity to adduce
evidence with respect to the skills and training of customs officers. It
would, therefore, be unfair to the respondent to allow Mr. Majeed to pursue
this argument.
Did the Minister’s
Delegate Apply the Wrong Burden and Standard of Proof?
[38]
Mr.
Majeed argues that the Minister’s delegate erred in applying the wrong burden
and standard of proof in his case. According to Mr. Majeed, the Minister’s
delegate essentially required him to establish, beyond a reasonable doubt, that
the funds in issue were not proceeds of crime.
[39]
Mr.
Majeed submits that the seizure and forfeiture process established by the Act
is a civil collection mechanism, and that as such, the appropriate standard of
proof should be that of a balance of probabilities. While the “immediacy” of
the interaction between travellers and customs officers at the border may allow
for the more relaxed standard of “reasonable grounds to suspect”, that
“immediacy” is no longer present at the time of a review by a Minister’s
delegate. As a consequence, Mr. Majeed says, he should only have to
demonstrate on a balance of probabilities that the funds in issue were not the
proceeds of crime.
[40]
Although
Mr. Majeed asserts that the Minister’s delegate erred in applying both the
wrong burden and the wrong standard of proof in his case, his submissions focus
only on the issue of the standard of proof. As such, I do not understand him
to be saying that the burden should be on the government to establish the Act
disputed funds are the proceeds of crime. Rather, I understand his concern to
relate only to the standard of proof that must be met by an individual, in
order to demonstrate that funds are not the proceeds of crime.
[41]
This
same argument was carefully considered by Justice Simpson in Sellathurai,
and again by Justice Blais in Dag.
[42]
Justice
Simpson noted that a decision under section 29 of the Act involves an in rem
finding with respect to the currency in issue. A section 29 decision is not a
criminal or other in personam proceeding.
[43]
In
considering the standard of proof to be applied in a decision under section 29
of the Act, Justice Simpson commenced by drawing an analogy to the phrase
“reasonable grounds to suspect”. She then observed that the “reasonable grounds
to believe” standard requires “something more than mere suspicion, but less
than the standard applicable in civil matters of proof on the balance of
probabilities.” Therefore “reasonable grounds will exist where there is an
objective basis for the belief which is based on compelling and credible
information”.
[44]
As
the Supreme Court of Canada noted in R. v. Monney, [1999] 1
S.C.R. 652, the reasonable grounds to suspect standard is a lesser one, but
included in the threshold of “reasonable grounds to believe”.
[45]
With
respect to this lesser standard of “reasonable grounds to suspect”, Justice
Simpson stated that this standard “must involve more tha[n] a “mere” or
subjective suspicion or a hunch. The suspicion must be supported by credible
objective evidence”: see Sellathurai, at ¶ 70.
[46]
Moreover,
Justice Simpson confirmed that it is the individual, not the Minister, who has
the burden of providing evidence to dispel the suspicion.
[47]
As
to the extent of that burden on the individual, Justice Simpson held that an
individual seeking relief under section 29 of the Act must establish beyond a
reasonable doubt that there are no reasonable grounds for the suspicion that
the funds in issue were not the proceeds of crime. Only in such circumstances
will the evidence be sufficient to displace a reasonable suspicion: see Sellathurai,
at ¶ 72.
[48]
In
coming to this conclusion, Justice Simpson noted that:
¶ 73 […I]f a Minister’s Delegate
were only satisfied on the balance of probabilities that there were no
reasonable grounds for suspicion, it would still be open to him to suspect that
forfeited currency was proceeds of crime. The civil standard of proof
does not free the mind from all reasonable doubt and, if reasonable doubt
exists, suspicion survives.
[49]
As
noted above, this analysis has been adopted by other judges of this Court, and
Mr. Majeed has not persuaded me that I should impose a lesser standard of proof
in this case.
[50]
Section
18 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
allows the CBSA to seize currency as forfeit where there are reasonable grounds
to suspect that the funds are the proceeds of crime. As Justice Simpson noted
in Sellathurai, in order to satisfy a Minister’s delegate that there are
no reasonable grounds to suspect that the money is the proceeds of
crime, it follows that an applicant for relief must establish the source of the
funds beyond a reasonable doubt.
Was the Minister’s
Delegate Biased Against Mr. Majeed?
[51]
Mr.
Majeed argues that the Minister’s delegate failed to accord him a fair hearing,
as the delegate was biased against him. In support of this contention, Mr.
Majeed points to an exchange of letters between Mr. Majeed and his counsel and
the CBSA in the course of the section 29 proceeding, before the final decision
was rendered.
[52]
In
particular, Mr. Majeed points to the statement in one letter from the CBSA
which states that:
The act of not declaring cash or a
monetary instrument of $10,000 or more is an act of deceit (and a violation of
the law) and is strong evidence that the traveller does not wish Canada Customs
to know he/she has the money on his/her person and he/she is willing to break
the law to accomplish this goal.
[53]
According
to Mr. Majeed, this statement raises a reasonable apprehension of bias as it
prejudges the intention of Mr. Majeed, in a situation where there was no
evidence on which to make such a finding.
[54]
The
test for determining whether actual bias or a reasonable apprehension of bias
exists in relation to a particular decision-maker is well known: that is, the
question for the Court is what an informed person, viewing the matter
realistically and practically - and having thought the matter through – would
conclude. That is, would he or she think it more likely than not that the
decision-maker, either consciously or unconsciously, would not decide fairly:
see Committee for Justice and Liberty v. Canada (National
Energy Board), [1978] 1 S.C.R. 369, at p. 394.
[55]
Mr.
Majeed has not established the existence of a reasonable apprehension of bias
on the part of the Minister’s delegate in this case. The statement in question
simply makes the observation that it is a violation of the law not to report
the importation of cash or monetary instruments worth more than $10,000. The
Minister’s delegate then goes on to make the self-evident observation that the
failure to report is strong evidence that Mr. Majeed did not want Canada
Customs to know that he had the money on his person and that he was willing to
break the law to accomplish this goal.
[56]
In
the circumstances, I see nothing improper about this statement, particularly as
at no time in his dealing with the CBSA has Mr. Majeed ever offered any
explanation for his failure to report the currency.
[57]
This
then leaves the question of whether the Minister’s delegate’s decision was
unreasonable.
Was the Minister’s
Delegate’s Decision Unreasonable?
[58]
Mr.
Majeed submits that the Minister’s delegate’s decision was unreasonable, as he
had provided a clear explanation as to the source of the funds in issue.
[59]
I
am not persuaded that the decision of the Minister’s delegate was unreasonable.
[60]
There
is no dispute about the fact that Mr. Majeed lied on his customs declaration,
when he said that he was not carrying more than $10,000 in cash into the
country. As was noted earlier in this decision, despite having been afforded
the opportunity to do so, Mr. Majeed has never offered any explanation or
excuse for his misrepresentation to customs officials.
[61]
As
for the documentation provided by Mr. Majeed to explain the source of the
funds, it is true that Mr. Majeed did provide documents to indicate that he had
sold a property in Pakistan, and that he had received the proceeds in
Rupees. However, he was unable to produce records to show that these proceeds
had been converted into Canadian and American funds, so that the proceeds of
the sale could be linked to the money that he was carrying into the country.
As such, it was not unreasonable to suspect that the unreported currency was
not the legitimately acquired proceeds of a house sale.
[62]
Moreover,
Mr. Majeed’s explanation for his inability to produce this documentation defies
belief. Simply put, he would have had the Minister’s delegate believe that
while it was safe enough to carry around large sums of cash in Pakistan, it was too
dangerous to carry receipts showing the conversion of currency.
[63]
Insofar
as the other documentation was concerned, to demonstrate that some of the funds
came from his mother, Mr. Majeed relied on a receipt which seemingly
shows that he had sent money to his mother, some five years earlier.
The Minister’s delegate finding that this documentation did not assist in
demonstrating the source of the funds was entirely reasonable.
[64]
Finally,
Mr. Majeed claims that some of the funds came from his personal savings. Mr.
Majeed evidently had a bank account in this country, but was unable to produce
banking records reflecting his account as a source of the funds. The banking
records that he did produce were for the period between 2000 and 2001, and thus
the concern of the Minister’s delegate with respect to the probative value of
this documentation was entirely reasonable.
Conclusion
[65]
In
the circumstances, the decision of the Minister’s delegate can withstand a
somewhat probing examination, and the application for judicial review will be
dismissed.
JUDGMENT
THIS COURT ORDERS AND
ADJUDGES that this application for judicial review is dismissed, with
costs.
“Anne
Mactavish”
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