Date: 20130521
Docket: T-1229-12
Citation: 2013 FC 527
[UNREVISED ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, May 21, 2013
PRESENT: The Honourable Mr.
Justice Scott
BETWEEN:
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ROCCO SEBASTIAO
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Applicant
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and
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THE MINISTER OF PUBLIC SAFETY AND
EMERGENCY PREPAREDNESS
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Respondent
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REASONS FOR JUDGMENT AND JUDGMENT
I. Introduction
[1]
This
is an application for judicial review under section 18.1 of the Federal
Courts Act, RSC 1985, c F-7, of a decision of the delegate of the Minister
of Public Safety and Emergency Preparedness (the Minister’s delegate), dated
May 17, 2012, confirming the forfeiture of currency seized by the Canada Border
Services Agency (the CBSA) under section 29 of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act, SC 2000, c 17 (the Act).
[2]
For
the following reasons, this application for judicial review is dismissed.
II. Facts
[3]
Rocco
Sebastiao (the applicant) left Canada on August 22, 2010, for the Democratic
Republic of the Congo.
[4]
On October 15,
2010, the applicant arrived at Pierre Elliot Trudeau Airport from the Democratic
Republic of the Congo.
[5]
The
applicant gave his customs declaration card to the customs officer in the
primary inspection line. He had replied “No” to the question of whether he was bringing
in more than CAN$10,000.
[6]
The
customs officer asked the applicant the same question, and again he answered
negatively. The officer then asked him how much money he was bringing in. The
applicant replied, [translation]
“$9,000, more or less”. The customs officer wrote “$9,000.00” on the customs
declaration card and circled “CAN$10,000”.
[7]
Suspicious
about the applicant’s declaration about how much money he was bringing into
Canada, the primary inspection officer referred him to the secondary inspection
line. The same day, the primary inspection officer prepared his report, in
which he recorded the conversation he had had with the applicant at the primary
inspection line.
[8]
The
applicant then entered the secondary inspection line for a more thorough
examination of his customs declaration. The customs officer at the secondary
inspection line also asked him how much money he was bringing into Canada. The
applicant stated that he had US$9,000 and CAN$200 in his possession.
[9]
Officer Sarette,
assisted by Officer Arby Gazarian, began to inspect the applicant’s luggage. In
a small bag that appeared to be made of black leather, hidden in a Kenya
Airways air sickness bag, was a zip-lock bag containing banknotes and a sealed
envelope. The customs officers found approximately CAN$12,945.72 in currency,
more than the CAN$10,000 limit above which a written declaration is required
under the Act:
•
In the zip-lock bag: 2
Canadian $100 bills
8 American $50 bills
93 American $100 bills
•
In
the sealed envelope: 30 American $100 bills
[10]
The secondary
inspection officer asked the applicant why he had not declared the full amount
to the primary inspection officer.
[11]
The
applicant initially responded that he had told the primary inspection officer
that he was carrying US$3,000 in addition to US$9,000. The applicant then
changed his story and stated that he had not mentioned the amount of US$3,000
to the primary officer because that amount did not belong to him and he did not
know the procedure. The officer reminded the applicant that he had travelled
abroad 17 times over the course of the 6 preceding years, including
6 trips in 2009 and 4 in 2010.
[12]
The
secondary inspection officer then asked the applicant about the source of the
money. The applicant stated that it consisted of his employment earnings and
that the money in the sealed envelope was for his wife so that she could
purchase a car for a friend in the Congo, or computers if no car could be found.
[13]
The
applicant stated that he had reported CAN$18,000 in earnings for the 2009
taxation year. A social assistance recipient, he explained that his trips were
covered by the association for which he works, the Festival international des musiques
traditionnelles [international folk music festival] of Canada. His trips to China were
financed by a friend for whom he works on a volunteer basis. The applicant
works as a stylist and couturier and creates clothing for this friend, who, in
exchange, provides him with clothing for himself and his wife and children.
[14]
The
customs officer decided to seize as forfeit the CAN$12,945 in the applicant’s
possession under subsection 18(1) of the Act on the grounds that it had
not been declared in accordance with section 12 of the Act.
[15]
The
officer decided not to grant the applicant a customs release under
subsection 18(2) of the Act because he suspected that the cash might be
proceeds of crime. The applicant protested, arguing that he had received the
money in April 2010 in the Congo for selling his rights in music CDs for
US$7,000. He then returned to Canada with this amount, which he planned to
reinvest during his next trip to the Congo. Since he did not find a business
opportunity, he returned to Canada with the money a second time.
[16]
The
grounds for the forfeiture and refusal of a release can be found at pages 2
and 3 of the customs officer’s narrative report:
[translation]
- The money was hidden in a Kenya Airways air sickness bag.
- The passenger was travelling with two valid copies of his driver’s
licence.
- The passenger was unable to establish the source of the money.
- The passenger regularly travels abroad, which is incompatible with his
reported earnings.
- The passenger was travelling with two passports, one of which was not
expired but cancelled. The second passport had been issued a few days before
his departure.
- The passenger was travelling with passport photos. He stated that they
were photos of his ex-wife, but the name on one of the photos did not match the
name provided by the passenger.
- The passenger was travelling with the health insurance card of his
daughter, who had remained in Canada, despite the fact that he had left Canada
on August 22, 2010.
- The passenger was carrying a chequebook in his luggage that belonged to
another person; he stated that this person had forgotten the chequebook at his
home during a trip in June 2010. When he was questioned about why he was
travelling with the chequebook, the passenger had no explanation.
- The passenger was travelling on one-way tickets.
- The passenger has crossed international borders with a large amount of
money on more than one previous occasion.
- The passenger . . . declared an amount of US$9,000
to avoid having to explain the source of the money.
- According to the information received from CBSA intelligence officer
Mark Solomon, the passenger was intercepted in 2002 at Queenston Bridge carrying
fake identification cards. In 2008 he allegedly purchased an airplane ticket
with a fake credit card.
- The passenger tried to invite to Canada a group of musicians who were
denied tourist visas by the Embassy in Nairobi on October 13, 2010. However,
I asked the passenger why he had travelled to Kenya. He stated that he had gone
to Kenya to try to arrange for care for his sister (Respondent’s Record, Vol 1,
pp 20‑21).
[17]
On
October 29, 2010, the applicant requested ministerial review under
section 25 of the Act. In this request for a decision, he acknowledged
that he had not declared all of the currency that had been seized. He
reiterated that the amount of US$3,000 in the sealed envelope did not belong to
him, adding that it had been given to him by a man in the Congo and that it was
meant to go to a Montréal resident named Makaya. The applicant then explained
that he needed the money and asked that it be returned to him. Several
documents were attached to his request.
[18]
On
November 5, 2010, the CBSA acknowledged receipt of the request for ministerial
review.
[19]
The
applicant made the following statements:
[translation]
•
In 2003, he opened a
music production company in Ontario called Roma Productions, whose purpose is
to produce African music in Canada. The business [translation] “is not performing well”.
•
The applicant moved
to Quebec in 2004. From 2005 to 2008, the business continued to suffer. The
applicant therefore allegedly asked a lawyer friend in Montréal to lend him $6,000
to purchase a licence for the rights to three African music albums. On
August 15, 2008, in the Congo, he bought such a licence from an African
artist named Defao Matumona for $15,000, of which US$6,000 was paid [translation] “before the contract of
purchase was signed”, and of which US$9,000 was to be paid by December 15,
2010.
•
In April 2010 in
the Congo, the applicant allegedly sold three licences for these albums to a
producer in Kinshasa for US$7,000. This producer, Baoby Mansiantima Fidele,
acquired the distribution rights for these albums in the territories of the Democratic
Republic of the Congo, Angola and Congo Brazzaville.
•
The purpose of the
sale of this licence for US$7,000, which took place in April 2010, was to
enable the applicant to pay off the US$9,000 debt he had contracted in
August 2008 with Defao Matumona, which he had to pay no later than
December 15, 2010.
•
The applicant
allegedly returned to Canada in April 2010 with the US$7,000, which he
kept at home while waiting for a suitable business opportunity.
•
In August 2010,
the applicant learned that his sister, who lived in Africa, was seriously ill;
he returned to Africa with US$9,000 to pay off the balance of the debt he had
contracted in August 2008 to purchase the licences from artist Defao
Matumona.
•
Because the artist in
question had not remained in the Democratic Republic of the Congo for very
long, the applicant returned to Canada with the US$9,000 in $100 bills,
which were seized by a customs officer. The applicant was to meet the supposed
artist in the United States to return the US$9,000 to him in late 2010.
•
Before the applicant
left the Congo for Canada, a man named Papy Makasi allegedly gave him US$3,000
in $100 bills for a Montréal resident named Makaya Nzau, so that the latter
might purchase a car in Canada for Makasi, a resident of the Democratic
Republic of the Congo. The applicant did not explain how or with what money the
car purchased in Canada was to be shipped to the Congo.
•
The applicant is
seeking leniency from the adjudicator overseeing his request for ministerial
review, noting that there are no Congolese banks that do business with Canadian
banks, and that even the artist to whom he owed the US$9,000, who works in East
Africa and the United States, does not have a bank account (see Respondent’s
Record, Vol 2, pp 393-394).
[20]
In
the exhibits filed in support of his submissions of November 12, 2010, the
applicant specified that he earns his income from the sale of African music CDs
and DVDs to Canadian merchants and the resale of clothing purchased in China.
[21]
On
November
16, 2010, the
adjudicator acknowledged receipt of the applicant’s request for review filed on
October 29, 2010. The adjudicator sent the applicant the notice describing
the circumstances of the seizure. The adjudicator began by stating that her
initial reading of the file indicated that the seizure was justified by the
failure to declare an amount greater than CAN$10,000, contrary to
subsection 12(1) of the Act.
[22]
The
adjudicator stated that she was unable to identify with certainty the legal
provenance of the seized funds. She also noted that the applicant had provided
extensive documentation in support of his application, but no evidence
establishing a legitimate source for the funds. The adjudicator specifically
asked the applicant to file documents or evidence clearly demonstrating the
legitimate source of the seized funds. The adjudicator also sent the applicant
copies of the narrative reports written by the customs officers at the time of
the seizure.
[23]
On
December 14, 2010, the adjudicator acknowledged receipt of the applicant’s
written submissions of November 12, 2010. The adjudicator again asked the
applicant for evidence of the legitimate source of the seized funds.
[24]
On
January 12 and 25, 2011, the applicant provided the adjudicator with
additional written submissions in support of his application.
[25]
On
February 17, 2011, the adjudicator again explained to the applicant the
need to demonstrate the legitimate source of the seized funds. For example, the
adjudicator was seeking evidence of transactions showing how Makasi, the
alleged owner of the US$3,000 seized from the applicant, had obtained that
amount. The adjudicator was seeking transactional evidence of the legitimacy of
the seized funds.
[26]
On
March 18, 2011, the applicant provided the adjudicator with additional
submissions and documents.
[27]
From
April 28, 2011, to January 13, 2012, the adjudicator and the
applicant exchanged correspondence about the file: the adjudicator continued to
seek evidence from the applicant demonstrating the legitimate source of the
seized funds.
[28]
On
April 12, 2012, Adjudicator Cayer prepared her “Case Synopsis and Reasons
for Decision”, which sets out the evidence gathered during the adjudication
process. This document contains a recommendation addressed to the Minister’s
delegate responsible for the decisions referred to in sections 27 and 29
of the Act. It was given to the Minister’s delegate, Jean-Marc Dupuis, for a
decision.
[29]
On
May 17, 2012, Dupuis rendered his decisions under sections 27 and 29 of
the Act: he decided that there had been a violation of the Act with respect to
the seized funds and that the forfeiture should be confirmed.
[30]
On
June 22, 2012, the applicant filed an application for judicial review
against the decisions rendered by the Minister on May 17, 2012. The Notice
of Application was supported by an affidavit served on the respondent in
compliance with Rule 306 of the Federal Courts Rules, SOR/98-106, on
July 23, 2012.
[31]
The
applicant did not file an action under section 30 of the Act to challenge
the Minister’s decision rendered under section 27 of the Act.
III.
Legislation
[32]
The
statutory provisions applicable in this case are reproduced in the Annex to
this judgment.
IV. Issue and Standard of
Review
A. Issue
•
Was the decision by the Minister’s delegate to confirm the forfeiture of
the seized currency reasonable?
B. Standard of review
[33]
The
standard of review applicable to a Minister’s decision under section 29 of
the Act is reasonableness (see Sellathurai v Minister of Public Safety and
Emergency Preparedness (Attorney General of Canada), 2008 FCA 255 at para
25).
V. Parties’ positions
A. Applicant’s position
[34]
The
applicant submits that the decision to confirm the forfeiture is unreasonable.
[35]
The
applicant claims to have established the legitimacy of the source of the funds
in question. His version of the facts has not changed and is well supported by
the documentary evidence.
[36]
The
applicant notes that the amounts in question are significant for him and that
his sustained efforts to recover the money are inconsistent with the theory
that he is an international criminal.
[37]
The
applicant insists that he did not attempt to hide the $3,000 that he was
carrying when he filled out his written customs declaration form. The applicant
believed that he was required to declare only the money that belonged to him.
Because the $3,000 did not belong to him, he did not declare it.
B. Respondent’s position
[38]
The
respondent submits first that the applicant admits in his Memorandum of Fact
and Law that he failed to declare that he was carrying more than CAN$10,000
when he arrived at Pierre Elliott Trudeau Airport on October 15, 2010. He notes
that the applicant nevertheless claims to have established a legitimate source for
the seized funds during the adjudication process before the Minister.
[39]
The
respondent submits that the evidence provided by the applicant to the CBSA
adjudicators in no way establishes a legitimate source for the seized funds.
The applicant has not filed a single independent, credible piece of evidence in
support of his claims (e.g., copies of cheques, documents recording the
exchange into American dollars of foreign currency in the amounts seized,
evidence of bank deposits over the course of several years).
[40]
The
respondent submits that the bank statements produced by the applicant do not
establish the source of the money at issue. He points out that the Court has
already held that bank documents do not establish the origin of currency, only
its possession (see Tourki v Canada (Minister of Public Safety and Emergency
Preparedness), 2007 FC 746 at para 38; Sellathurai v Canada (Minister of
Public Safety and Emergency Preparedness), 2007 FC 208 at para 44). Similarly,
the certificates of good conduct of Mansiatima and Makasi filed by the
applicant do not establish a legitimate source for the seized funds.
[41]
In
addition to the applicant’s inability to demonstrate a legitimate source for
the funds at issue, the respondent raises several other factual elements that
justify the suspicion of the Minister’s delegate that they were proceeds of
crime, such as the following: (1) the different stories the applicant provided
to explain the ownership and provenance of the funds; (2) the fact that the
applicant travels abroad frequently despite receiving social assistance and
without any evidence of income that would enable him to pay for his airplane
tickets; and (3) the lack of explanation during the adjudication process for
his relationship with the Congolese taxi driver who allegedly voluntarily provided
him with $3,000 in small bills to give to a Montréal resident about whom we
also have no information.
[42]
The
respondent closed his submissions by citing this Court’s finding in Sidhu v
Canada (Minister of Public Safety and Emergency Preparedness), 2010 FC 911
at para 44:
Based on the evidence that was before her, the Minister’s delegate
confirmed the forfeiture. It cannot be said that her conclusion was
unreasonable; her finding that the evidence failed to establish that the
currency originated from a legitimate source was definitely one of the number
of possible, reasonable conclusions that was open to her.
VI. Analysis
[43]
For
a proper understanding of the applicant’s burden of proof, it would be useful
at this stage to summarize the key principles of the legislation applicable to
this case. In Guillaume v Canada (Minister of Public Safety and Emergency
Preparedness), 2013 FC 143 [Guillaume], Justice Boivin wrote
the following:
[34] . . . The Act establishes a scheme requiring the
reporting of suspicious financial transactions and of cross-border movements of
currency and monetary instruments, as stated in subparagraph 3(a)(ii) of
the Act. Part 2 of the Act therefore provides for a currency reporting regime
under which importers and exporters of currency must make a written report to a
customs officer whenever they import or export currency of a value equal to or
greater than the prescribed amount, namely, $10,000 (subsections 12(1) and (3)
of the Act; sections 2 and 3 of the Regulations). The importation or
exportation of currency of a value equal to or greater than $10,000 is not in
itself illegal; the Act simply requires that it be reported.
[35] If a report is not made, the currency will be seized pursuant to
subsection 18(1) of the Act. Under subsection 18(2), the customs officer must
then decide whether there are reasonable grounds to suspect that the currency
is proceeds of crime within the meaning of subsection 462.3(1) of the Criminal
Code, RSC 1985, c C-46. If such grounds exist, the currency cannot be
returned. If there are no such suspicions, then the officer must return the
currency once a monetary penalty has been paid.
[36] According to sections 23 and 24 of the Act, a forfeiture is
effective immediately from the time of the contravention of subsection 12(1),
is final and is not subject to review except to the extent and in the manner
provided by sections 24.1 and 25 of the Act. Under section 25, a person may
within 90 days after the date of the seizure request a decision of the Minister
as to whether subsection 12(1) was contravened. According to subsection 26(1)
of the Act, the CBSA must serve written notice of the circumstances of the
seizure on the person concerned, who has thirty (30) days to furnish any
evidence in the matter that they desire to furnish (subsection 26(2) of the
Act). The Minister then has ninety (90) days to decide whether subsection 12(1)
was contravened, that is, whether no report was made (section 27 of the Act).
If the Minister decides that subsection 12(1) was not contravened, the seized
currency is returned (section 28 of the Act). If the Minister decides that
subsection 12(1) was contravened, section 29 of the Act applies, and the
Minister may return the currency, on payment of a penalty or without penalty;
remit any penalty or portion of any penalty; or confirm that the currency is
forfeit.
[37] Under section 30 of the Act, a person who has challenged a
seizure by requesting a decision under section 27 as to whether there was a
failure to make a report may appeal the decision by way of an action in the
Federal Court. This action is limited to determining the validity of the
decision made pursuant to subsection 27(1), namely, whether there was indeed a
contravention of subsection 12(1), the requirement to make a report. The
present case is not such an action; it is, rather, an application for judicial
review under section 18.1 of the Federal Courts Act of the discretionary
decision of the Minister to confirm the forfeiture pursuant to section 29 of
the Act. Judicial review is the only remedy available to an individual who
wishes to challenge a ministerial decision made pursuant to section 29 (Guillaume,
above, at paras 34 to 37).
[44]
The
Court must therefore determine whether the decision of the Minister’s delegate,
pursuant to section 29 of the Act, to confirm the forfeiture of the
currency seized by the customs officer was reasonable. More specifically, the
Court must determine whether “the Minister’s [delegate’s] conclusion as to the
legitimacy of the source of the [seized] funds is reasonable, having regard to
the evidence in the record before him” (Sellathurai v Canada (Minister of
Public Safety and Emergency Preparedness), 2008 FCA 255 at para 51).
[45]
After
seizing the money (US$12,700 and CAN$200) as forfeit under
subsection 18(1) of the Act, the customs officer then decided, in
accordance with subsection 18(2) of the Act, not to return the money to
the applicant because he suspected that it constituted proceeds of crime.
[46]
The
applicant failed to convince the Minister’s delegate that the funds at issue
were not proceeds of crime. In other words, he did not establish a legitimate
source for the funds. The Minister’s delegate decided not to exercise his
discretion under section 29 of the Act to cancel the forfeiture.
[47]
As
mentioned above, the customs officer provided the following grounds for the
forfeiture and his refusal to grant a release on October 15, 2010:
[translation]
1. The money was hidden in a Kenya Airways air sickness bag.
2. The passenger was travelling with two valid copies of his
driver’s licence.
3. The passenger was unable to establish the source of the money.
4. The passenger regularly travels abroad, which is incompatible
with his reported earnings.
5. The passenger was travelling with two passports, one of which
was not expired but cancelled, and the second of which had been issued a few
days before his departure.
6. The passenger was travelling with passport photos. When
questioned he answered that they were photos of his ex-wife, but the name on
one of the photos did not match the name provided by the passenger.
7. The passenger was travelling with the health insurance card of
his daughter, who had remained in Canada, despite the fact that he had left
Canada on August 22, 2010.
8. The passenger was carrying a chequebook in his luggage that
belonged to another person; he stated that this person had forgotten the
chequebook at his home during a trip in June 2010. When he was
questioned about why he was travelling with the chequebook, the passenger had
no explanation.
9. The passenger was travelling on one-way tickets.
10. The passenger has crossed international borders with a large
amount of money on more than one previous occasion.
11. The passenger declared an amount of US$9,000 to avoid
having to explain the source of the money.
12. According to the information received from the CBSA intelligence
officer, the passenger was intercepted in 2002 at Queenston Bridge carrying
fake identification cards. In 2008 he allegedly purchased an airplane ticket
with a fake credit card.
13. The passenger had tried to invite to Canada a group of musicians
who had been denied tourist visas by the Embassy in Nairobi on October 13,
2010—however, when asked why he had travelled to Kenya, he answered that he had
gone to take care of his sister (Respondent’s Record, Vol 1, pp 14-15).
[48]
In
order to persuade the Minister’s delegate that the seized funds were from a
legitimate source, the applicant filed several documents, including a contract
of sale entered into by the applicant and Baoby Mansiantima Fidele on April 6,
2010, in which Fidele undertook to pay US$7,000 in exchange for a licence to
sell three music albums in the Congo and Angola; a copy of a currency
conversion record from August 2010 in the amount of CAN$4,999.38 for
US$4,750; bank statements for TD Bank account number 4256 6316697 showing all
transactions from April 15 to August 31, 2010; a death record for Kenga
Sebastiao; and the affidavits of Papy Makasi (taxi driver) and Baoby
Mansiantima Fidele.
[49]
Having
considered all of the evidence, the Minister’s delegate held that the applicant
had failed to demonstrate that the seized currency came from a legitimate
source. The delegate also noted that the copy of the receipt recording the
conversion of CAN$4,999.38 into US$4,750 in no way establishes the legitimate
source or provenance of the seized funds.
[50]
The
delegate also noted that the bank statements show balances of less than $10 for
the months of June, July and August 2010. The applicant failed to explain why
he did not deposit the amounts received abroad (i.e., the US$7,000 obtained in
April 2010) in his bank account to earn interest. The delegate then noted
that [translation] “those
attempting to launder proceeds of crime try to avoid detection, often by
leaving no trace of their activities” (Respondent’s Record, Vol 1, p 16).
[51]
Having
considered all the evidence, the Court is of the view that the delegate’s
decision is reasonable. The applicant’s failure to establish a legitimate
source for the seized funds (e.g., copies of cheques), in conjunction with
other facts in this case, leads us inexorably to the finding that the decision
of the Minister’s delegate falls within the range of possible outcomes.
[52]
This
Court has already held that affidavits stating that the funds are from a
legitimate source are not enough (see Sellathurai v Canada (Minister of
Public Safety and Emergency Preparedness), 2007 FC 208 at para 44; Hamam
v Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC
691 at para 30).
[53]
The
amount of effort made by the applicant to recover the amount seized in no way
establishes the legitimate provenance of these funds. The fact that the
applicant is challenging this decision in court shows that he wishes to have
the seizure overturned, not that the funds seized are from a legitimate source,
although the Court does not question the applicant’s good faith.
[54]
Although
certain grounds cited by the customs officer for upholding the seizure of funds
appear rather tenuous, in this case, the burden to establish the legitimate source
of the amount seized using decisive evidence rests with the applicant. After an
attentive examination of the evidence filed by the applicant, the Court finds
that he did not discharge his burden of proof. None of the evidence filed
allows the Court to find that the funds in question are from a legitimate
source, despite numerous exchanges with the respondent. The Court is of the
opinion that it would have been possible for the applicant to file a copy of
the cheque from Adam Atlas, counsel, drawn on the Bank of Nova Scotia, that the
applicant alleges to have cashed. By doing so, he would have established the
legitimate source of at least $7,000, in cash. He failed to do this. In the
circumstances, the Court has no other choice but to find that the Minister’s
decision to confirm the seizure of the currency falls within the range of
possible outcomes and therefore to dismiss this application for judicial
review.
JUDGMENT
THE COURT dismisses this
application for judicial review without costs.
“André F.J. Scott”
Certified true translation
Francie Gow, BCL, LLB
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