Date: 20081128
Docket: IMM-2401-08
Citation: 2008 FC 1330
Ottawa, Ontario, November 28, 2008
PRESENT: The Honourable Mr. Justice Kelen
BETWEEN:
SEYED SAEED NASSERI
Applicant
and
THE MINISTER OF
CITIZENSHIP AND IMMIGRATION
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
This
is judicial review of a decision of a visa officer in Damascus, Syria dated
March 17, 2008 refusing the applicant’s application for permanent residence in
Canada as “an entrepreneur” under Section 12(2) of the Immigration and Refugee
Protection Act (IRPA), on the basis that the applicant did not qualify as “an
entrepreneur” under the definitions in Section 88(1) of the Immigration and
Refugee Protection Regulations (IRPR).
FACTS
[2]
The
applicant is a 67 year old citizen of Iran. He submitted an
application for permanent residence under the entrepreneur class on September
21, 2003 for himself and his family.
[3]
The
applicant is a mechanic and has been the sole owner and manager of a mechanical
repair workshop business in Tehran, Iran, for over
forty years. The applicant states that he has a net worth exceeding $2,000,000
accumulated from the operation of his business and the value of his residential
property.
[4]
The
applicant declared in Schedule 6 to his application that the net assets of his
business for the fiscal years of 2005 and 2006 amounted to $127,652.00 and
$125,129.00 respectively, and that the net income of his business for those
years was $54,886.00 and $56,105.00 respectively. The applicant provided
audited financial statements as evidence of this information.
[5]
The
applicant states that he has employed four employees in his business during all
the relevant fiscal periods.
[6]
The
applicant states that he relies heavily on the services of an independent
accounting firm, Noga & Co. (the “auditors”), in the financial management
of his business. The auditors send a person to the applicant’s business every
week to assist with bookkeeping, and also audit the applicant’s documents and
provide annual audited financial statements of his business. These are the
statements that were provided by the applicant as evidence of his business
assets and income.
[7]
The
applicant had an interview with the visa officer on March 16, 2008. The
Officer questioned the applicant about his business and, in a letter dated
March 17, 2008, denied the applicant’s application for permanent residence in Canada on the basis
that the applicant’s business did not meet the requirements of a “qualifying
business” set out in Section 88(1) of IRPR.
Relevant Legislation
[8]
Section
12(2) of IRPA provides that foreign nationals may be selected for permanent
residence status on the basis of their economic status:
|
Economic Immigration
12. (2)
A foreign national may be selected as a member of the economic class on the
basis of their ability to become economically established in Canada.
|
Immigration économique
12. (2) La
sélection des étrangers de la catégorie « immigration économique »
se fait en fonction de leur capacité à réussir leur établissement économique
au Canada.
|
[9]
Section
88(1) of the IRPR gives the relevant definitions for those applying for
permanent residence status as entrepreneurs.
|
"entrepreneur"
means a foreign national who
(a) has business
experience;
(b) has a legally
obtained minimum net worth; and
(c) provides a written statement to an officer that
they intend and will be able to meet the conditions referred to in
subsections 98(1) to (5).
|
«entrepreneur»
Étranger qui, à la fois :
a) a de l’expérience dans l’exploitation d’une entreprise;
b) a l’avoir net minimal et l’a obtenu licitement;
c) fournit
à un agent une déclaration écrite portant qu’il a l’intention et est en
mesure de remplir les conditions visées aux paragraphes 98(1) à (5).
|
Applicants under this category must meet
this definition for at least two of the five years preceding their application.
[10]
“Business
experience” is defined as:
|
"business
experience”, in respect of:
(b) an
entrepreneur, other than an entrepreneur selected by a province, means a
minimum of two years of experience consisting of two one-year periods of
experience in the management of a qualifying business and the control of a
percentage of equity of the qualifying business during the period beginning
five years before the date of application for a permanent resident visa and
ending on the day a determination is made in respect of the application;
|
«expérience
dans l’exploitation d’une entreprise»:
b)
s’agissant d’un entrepreneur, autre qu’un entrepreneur sélectionné par une
province, s’entend de l’expérience d’une durée d’au moins deux ans composée
de deux périodes d’un an d’expérience dans la gestion d’une entreprise
admissible et le contrôle d’un pourcentage des capitaux propres de celle-ci
au cours de la période commençant cinq ans avant la date où la demande de
visa de résident permanent est faite et prenant fin à la date où il est
statué sur celle-ci;
|
[11]
“Qualifying
business” is defined as:
|
"qualifying business” means a business – other than
a business operated primarily for the purpose of deriving investment income
such as interest, dividends or capital gains — for which, during the year
under consideration, there is documentary evidence of any two of the
following:
(a) the percentage of
equity multiplied by the number of full time job equivalents is equal to or
greater than two full-time job equivalents per year;
(b) the percentage of
equity multiplied by the total annual sales is equal to or greater than
$500,000;
(c) the percentage of
equity multiplied by the net income in the year is equal to or greater than
$50,000; and
(d) the percentage of equity multiplied by the net
assets at the end of the year is equal to or greater than $125,000.
|
«entreprise admissible» Toute
entreprise — autre qu’une entreprise exploitée principalement dans le but de
retirer un revenu de placement, tels des intérêts, des dividendes ou des
gains en capitaux — à l’égard de laquelle il existe une preuve documentaire
établissant que, au cours de l’année en cause, elle satisfaisait à deux des
critères suivants :
a) le pourcentage des capitaux propres, multiplié par le nombre
d’équivalents d’emploi à temps plein, est égal ou supérieur à deux
équivalents d’emploi à temps plein par an;
b) le pourcentage des capitaux propres, multiplié par le chiffre
d’affaires annuel, est égal ou supérieur à 500 000 $;
c) le pourcentage des capitaux propres, multiplié par le revenu net
annuel, est égal ou supérieur à 50 000 $;
d) le
pourcentage des capitaux propres, multiplié par l’actif net à la fin de
l’année, est égal ou supérieur à 125 000 $.
|
Decision under review
[12]
In
denying the applicant’s application, the visa officer wrote:
I am not satisfied that Nasseri Repair
Shop meets the requirements of a Qualifying Business for the following reasons:
Annual sales: Based on the figures provided in your
schedule 6 and financial statements, the annual sales amounts do not meet the
minimum requirements of a qualifying business in any of the years for which
information is provided.
Net income: I have reviewed the invoices and tax
documents you submitted as proof of your net income. This documentation is
insufficient to establish that this business achieved the net income as stated
on your schedule 6 form and your financial statements.
Net assets: I questioned you regarding the net
asset value of the business and the breakdown of business assets. The
responses you provided were inconsistent with the information on your Schedule
6 and financial statements. In addition, the information on your financial
statements and Schedule 6 is not supported by documentary evidence which shows
that the net asset value of this business meets the minimum requirements.
Based on a review of the information on
file, I am not satisfied that this is a qualifying business. There is
insufficient evidence to satisfy me that this business meets at least two of
the four business performance attributes for at least two years. Consequently,
you have not satisfied me that you are an entrepreneur and therefore eligible
for a permanent resident visa as a member of the entrepreneur class.
(Applicant’s Record, p. 8)
[13]
The
applicant seeks judicial review of this decision on the basis that he provided
sufficient documentary evidence establishing at least two of the four business
performance attributes, that the visa officer’s decision was based on
irrelevant factors and miscommunications during the interview, and that the visa
officer’s decision was therefore unreasonable.
STANDARD OF REVIEW
[14]
Decisions
of a visa officer are entitled to a substantial degree of deference. Following
the Supreme Court’s decision in Dunsmuir v. New Brunswick [2008] S.C.J. No. 9,
2008 SCC 9, holding that the two standards of review are correctness and
reasonableness,
decisions of a visa officer relating to applications for permanent residence
under the entrepreneur class are subject to a standard of review of
reasonableness. Nadezhda v. Canada (MCI) 2008 FC 553, 167 A.C.W.S. (3d)
779, per Justice Phelan at paragraphs 11-12; Shakeri v. Canada (MCI),
2008 FC 752, per Justice Lagacé at paragraph 7.
[15]
In reviewing
the Board’s decision using a standard of reasonableness, the Court will
consider "the existence of justification, transparency and intelligibility
within the decision-making process” and “whether the decision falls within a
range of possible, acceptable outcomes which are defensible in respect of the
facts and law.” (Dunsmuir at paragraph 47).
ANALYSIS
[16]
In
order to meet the requirements of a “qualifying business” the applicant’s
repair shop has to meet two of the four criteria outlined in the IRPR. Thus,
the visa officer’s finding that the applicant’s annual sales do not meet
the minimum requirements in the regulations, which the applicant does not
contest, is not a bar to the applicant’s business being determined a qualifying
business. The applicant submits that his business meets the other three
criteria of a qualifying business, i.e. he has employed four full-time
employees and has maintained a net income of over $50,000 and net
assets of over $125,000 for the relevant years. The visa officer did not
dispute that the applicant has employed the requisite number of employees at
all relevant times. Thus, the applicant had to establish that he satisfied one
additional requirement in order to show that he owned a “qualifying business.”
[17]
Section
88 of the IRPR provides the following definitions for “net income” and “net
assets”:
|
"net
assets" , in respect of a qualifying business or a qualifying Canadian business,
means the assets of the business, minus the liabilities of the business, plus
shareholder loans made to the business by the foreign national who is making
or has made an application for a permanent resident visa and their spouse or
common-law partner.
"net income" , in respect of a qualifying business
or a qualifying Canadian business, means the after tax profit or loss of the
business plus remuneration by the business to the foreign national who is
making or has made an application for a permanent resident visa and their
spouse or common-law partner.
|
«actif net» S’agissant
d’une entreprise admissible ou d’une entreprise canadienne admissible,
s’entend de l’excédent de l’actif de celle-ci sur son passif, augmenté des
prêts octroyés à l’entreprise par l’étranger qui demande ou a demandé un visa
de résident permanent et son époux ou conjoint de fait.
«revenu net» S’agissant d’une entreprise admissible
ou d’une entreprise canadienne admissible, les bénéfices ou pertes de
l’entreprise après impôts, compte tenu de la rémunération versée par
l’entreprise à l’étranger qui demande ou a demandé un visa de résident
permanent et à son époux ou conjoint de fait.
|
[18]
The
applicant provided audited financial statements prepared by his
accountants. He states that he relied on these statements in providing the
amounts in his application. Schedule 6 of the applicant’s application states
that his net income was $54,886 in 2005 and $56,105 in 2006, and his net assets
totalled $ $127,652 in 2005 and $125,129 in 2006.
[19]
The
applicant included a tax statement for the 2006 operating year from the
Ministry of Economic and Financial Affairs in his documentary evidence, but
there is no similar statement for 2005, and it is not clear whether the tax
statement provided is for the full amount of taxes paid in 2006 (Tribunal
Record, p. 70). Thus, the visa officer was correct in concluding that there
was insufficient documentary evidence to show that the applicant had the
requisite net income, after taxes, for the relevant years. However, the
applicant would still qualify for a visa as an entrepreneur if his net assets were
found to meet the requirements seat out in section 88 of the IRPR.
[20]
The
applicant was questioned about his net assets during the interview. The visa officer
found that the applicant’s responses “were inconsistent with the information on
your Schedule 6 and financial statements.” The relevant portion of the CAIPS
notes states:
What documentary proof do you have of the
net assets of your business? The fixed assets, PA asks. What is the ttl (sic)
net asset value of your business? Mechanical permit. What doc evidence do you
have of the value of the net assets of this business? I have a shop. What
documentary evidence do you have of the value of the net assets of your
business? Equipment. I have motors. What doc proof do you have of the value
of the assets? I have them here. Repairing equipment. What documentary proof
do you have that support the net asset value? It’s there. What do you have?
This refers to the repairing equipment. What docs do you have, other than
these invoices, what docs do you have to support the value of bus assets?
Looks through his bag. States he is sure it is his file. Asked what the name
of the doc is so I can look at it. States: the jack, the repairing equipment.
[21]
The
respondent states that these portions of the transcript indicate that the
applicant was unable to answer simple questions about his business, leaving the
visa officer with an insufficient basis to make an informed decision that the applicant’s
shop was a qualifying business within the meaning of section 88 of the IRPR.
[22]
According
to the applicant, these CAIPS notes indicate that there was confusion on both
the applicant and the visa officer’s part, and that the visa officer based her
decision in part on irrelevant issues and in part on the confusion resulting
from the miscommunications during the interview. The applicant points to other
portions of the CAIPS notes where the visa officer or the applicant were
confused, such as the visa officer’s confusion between two individuals named
Valot Ratoos and Varouj Ratodsi, or the applicant’s confusion over the meaning
of the term “profit margin.” (Applicant’s Record, pp. 12-13)
[23]
The
visa officer did not specify in her decision what additional evidence would be
necessary to substantiate the applicant’s net assets. This should have been
made clear to the applicant, and the applicant should have been given an
opportunity to gather the documents supporting the applicant’s net assets and
present them to the visa officer with the assistance of his accountant. The Overseas
Processing Manual identifies balance sheets and income statements as the
primary source of financial information in applying the criteria. It further
states that “there are essentially three levels of assurance that a public
accountant can provide to the users of financial information: audits; review
engagements; and compilation engagements.”
[24]
During
the interview, the visa officer asked the applicant several times what
documentary evidence he had to establish the criteria, but did not indicate in
the interview or the subsequent letter what additional documents may have been
necessary to establish his net assets. It is unclear from visa officer’s
decision why she felt there was insufficient material to determine net assets.
The audited financial statements provide a calculation of net assets for the
relevant years. The visa officer did not state that the financial statements
were not credible, reliable or satisfactory. These financial statements are the
best evidence of the value of the business and its assets.
[25]
The
visa officer stated that there were inconsistencies between the documentary
evidence and the applicant’s responses in the interview. However, the
applicant did not provide any information during the interview that
contradicted the documentary evidence, although he clearly did not understand
some of the visa officer’s questions.
[26]
The
CAIPS notes indicate that there were serious communication problems during the
interview, which must have been evident to the visa officer. However, the visa
officer did not make any adverse findings as to credibility of applicant or
infer from the applicant’s failure to understand him that the applicant was not
the owner of the business in question. Thus, the applicant’s failure to
understand the officer’s questions does not evince any inconsistency between
his documentary evidence and his responses. The visa officer should have
explained clearly why the audited financial statements provided were
insufficient to determine whether applicant’s net assets met requirements.
Without such an explanation, her decision is not “intelligible” and thus does
not meet reasonableness definition of Dunsmuir.
[27]
For
these reasons, the application for judicial review is granted and the matter
will be referred back to another visa officer for redetermination with the
direction that its processing be expedited.
[28]
Neither party
considered that this case raised any serious question of general importance
that ought to be certified for an appeal. The Court agrees.
JUDGMENT
THIS COURT
ORDERS AND ADJUDGES that:
This
application for judicial review is allowed, the decision of the visa officer is
set aside, and the application is referred to another visa officer for
redetermination with the Court’s direction that the redetermination be
expedited.
“Michael
A. Kelen”
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