Date: 20130628
Docket: T-1219-12
Citation:
2013 FC 729
Ottawa, Ontario,
June 28, 2013
PRESENT: The
Honourable Madam Justice Simpson
BETWEEN:
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ROBERT BO DA HUANG
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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
ORDER AND ORDER
[1]
Robert
Bo Da Huang [the Applicant] is self-represented and appeared with the
assistance of an interpreter. He applies for judicial review of a decision made
by a delegate of the Minister of Public Safety and Emergency Preparedness,
dated May 24, 2012 [the Decision], in which she decided that: i) there
had a been a contravention of s. 12(1) of the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 [the Act], and ii)
that the currency which had been seized from the Applicant would be held as forfeit
pursuant to paragraph 29(1)(c) of the Act.
The Facts
[2]
On
January 5, 2011, the Applicant was scheduled to fly from Vancouver to Hong Kong. When approached in the departures area of the Vancouver International Airport by a Canada Border Services Agency customs officer [the Officer], the Applicant
admitted to carrying more than $10,000.00 in currency which he had not reported.
A total of $15,760.00 in cash was found in the Applicant’s bag. It was not
concealed but was organized into three bundles: one wrapped in elastic bands,
one wrapped in a thin piece of paper and one loose bundle.
[3]
Following
an interview with the Applicant, the Officer decided to hold the seized
currency as suspected proceeds of crime. The fact that the Applicant had
previously been convicted of drug smuggling, had been unemployed since
2007 and had no other source of income since then were among the reasons
provided by the Officer for his suspicions. The sum of $15,760.00 will be
described as the “Seized Funds”.
[4]
The
Applicant contested the seizure to the Recourse Directorate and requested a
Ministerial review pursuant to s. 25 of the Act. He provided the following
explanation for the Seized Funds: (1) $ 6,700.00 was from the sale of his car;
(2) $ 2,000.00 was “lucky money” given to him by his mother; and (3) the
balance was his personal savings. He submitted a purchase agreement for the
car, dated January 4, 2010 and a TD bank receipt indicating that the same amount
had been deposited into his bank account.
[5]
An
exchange with the adjudicator at the Recourse Directorate followed in which the
Applicant was told that, although the $6,700.00 would be accepted as legitimate
[the Legitimate Funds], he had failed to provide evidence to demonstrate an
identifiable link between his savings and the “lucky money” and legitimate
origins. This meant that the adjudicator still suspected that $9,060.00 of the
Seized Funds was proceeds of crime. This amount will be described as the
“Illicit Funds”.
The Decision
[6]
On
May 24, 2012, the Minister’s delegate informed the Applicant that all of the
Seized Funds (i.e. $15,760.00) would be held as forfeit notwithstanding that
only $9,060.00 was considered to be the Illicit Funds.
[7]
The
reasons provide as follows: “Although there was evidence to support you
received $6,700 from the sale of the vehicle, no additional corroborating
evidence was provided to substantiate the legitimate origin of the remainder of
the seized currency”.
[8]
At
the hearing, held in Vancouver on May 21, 2013, counsel for the Minister
conceded that the Respondent was satisfied that the Applicant had demonstrated
that $6,700.00 of the Seized Funds was money earned from the sale of his car
and did not represent proceeds of crime or funds used in the financing of
terrorist activity.
Jurisdiction
[9]
The
Applicant’s Notice of Application challenges not only the Minister’s decision
to hold the currency forfeit under s. 29 but also the decision confirming the
contravention of the Act pursuant to s. 27. However, s. 30 of the Act makes it
clear that the question of whether the Act was contravened may only be
challenged by way of an action in the Federal Court (Tourki v Canada
(Minister of Public Safety & Emergency Preparedness), 2007 FCA 186 at
paras 16-18; Kang v Canada (Minister of Public Safety & Emergency
Preparedness), 2011 FC 798 paras 29-30).
Thus, it is only the Minister’s decision to hold the Seized Funds forfeit
pursuant to s. 29 that is open to challenge in this proceeding.
The Issue
[10]
It
became clear at the hearing that I considered the determinative issue to be
whether s. 29 of the Act permits the Minister to hold forfeit only the Illicit
Funds.
[11]
Since
the Respondent had no notice of the Court’s concern about this issue, the
parties were asked to provide supplementary submissions.
The Act
[12]
The
following provisions of the Act are relevant:
3. The object of this
Act is
(a)
to implement specific measures to detect and deter money laundering and the
financing of terrorist activities and to facilitate the investigation and
prosecution of money laundering offences and terrorist activity financing
offences, including
(i) establishing record keeping
and client identification requirements for financial services providers and
other persons or entities that engage in businesses, professions or
activities that are susceptible to being used for money laundering or the
financing of terrorist activities,
(ii) requiring the reporting of
suspicious financial transactions and of cross-border movements of currency
and monetary instruments, and
(iii) establishing an agency
that is responsible for dealing with reported and other information;
(b)
to respond to the threat posed by organized crime by providing law
enforcement officials with the information they need to deprive criminals of
the proceeds of their criminal activities, while ensuring that appropriate
safeguards are put in place to protect the privacy of persons with respect to
personal information about themselves; and
(c)
to assist in fulfilling Canada’s international commitments to participate in
the fight against transnational crime, particularly money laundering, and the
fight against terrorist activity.
12. (1) Every person or
entity referred to in subsection (3) shall report to an officer, in
accordance with the regulations, the importation or exportation of currency
or monetary instruments of a value equal to or greater than the prescribed
amount.
[…]
18. (1) If an officer
believes on reasonable grounds that subsection 12(1) has been contravened,
the officer may seize as forfeit the currency or monetary instruments.
(2)
The officer shall, on payment of a penalty in the prescribed amount, return
the seized currency or monetary instruments to the individual from whom they
were seized or to the lawful owner unless the officer has reasonable grounds
to suspect that the currency or monetary instruments are proceeds of crime
within the meaning of subsection 462.3(1) of the Criminal Code or funds for
use in the financing of terrorist activities.
[…]
25. A person from whom
currency or monetary instruments were seized under section 18, or the lawful
owner of the currency or monetary instruments, may within 90 days after the
date of the seizure request a decision of the Minister as to whether
subsection 12(1) was contravened, by giving notice in writing to the officer
who seized the currency or monetary instruments or to an officer at the
customs office closest to the place where the seizure took place.
29. (1) If the Minister
decides that subsection 12(1) was contravened, the Minister may, subject to
the terms and conditions that the Minister may determine,
(a)
decide that the currency or monetary instruments or, subject to subsection
(2), an amount of money equal to their value on the day the Minister of
Public Works and Government Services is informed of the decision, be
returned, on payment of a penalty in the prescribed amount or without
penalty;
(b)
decide that any penalty or portion of any penalty that was paid under subsection
18(2) be remitted; or
(c)
subject to any order made under section 33 or 34, confirm that the currency
or monetary instruments are forfeited to Her Majesty in right of Canada.
The
Minister of Public Works and Government Services shall give effect to a
decision of the Minister under paragraph (a) or (b) on being informed of it.
(2)
The total amount paid under paragraph (1)(a) shall, if the currency or
monetary instruments were sold or otherwise disposed of under the Seized
Property Management Act, not exceed the proceeds of the sale or disposition,
if any, less any costs incurred by Her Majesty in respect of the currency or
monetary instruments.
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3. La présente loi a pour
objet :
a)
de mettre en oeuvre des mesures visant à détecter et décourager le recyclage
des produits de la criminalité et le financement des activités terroristes et
à faciliter les enquêtes et les poursuites relatives aux infractions de
recyclage des produits de la criminalité et aux infractions de financement
des activités terroristes, notamment :
(i) imposer des obligations de
tenue de documents et d’identification des clients aux fournisseurs de
services financiers et autres personnes ou entités qui se livrent à
l’exploitation d’une entreprise ou à l’exercice d’une profession ou
d’activités susceptibles d’être utilisées pour le recyclage des produits de
la criminalité ou pour le financement des activités terroristes,
(ii) établir un régime de
déclaration obligatoire des opérations financières douteuses et des
mouvements transfrontaliers d’espèces et d’effets,
(iii) constituer un organisme
chargé de l’examen de renseignements, notamment ceux portés à son attention
en application du sous-alinéa (ii);
b)
de combattre le crime organisé en fournissant aux responsables de
l’application de la loi les renseignements leur permettant de priver les
criminels du produit de leurs activités illicites, tout en assurant la mise
en place des garanties nécessaires à la protection de la vie privée des
personnes à l’égard des renseignements personnels les concernant;
c)
d’aider le Canada à remplir ses engagements internationaux dans la lutte
contre le crime transnational, particulièrement le recyclage des produits de
la criminalité, et la lutte contre les activités terroristes.
12. (1) Les personnes ou
entités visées au paragraphe (3) sont tenues de déclarer à l'agent,
conformément aux règlements, l'importation ou l'exportation des espèces ou
effets d'une valeur égale ou supérieure au montant réglementaire.
[…]
18. (1) S’il a des motifs
raisonnables de croire qu’il y a eu contravention au paragraphe 12(1),
l’agent peut saisir à titre de confiscation les espèces ou effets.
(2)
Sur réception du paiement de la pénalité réglementaire, l'agent restitue au
saisi ou au propriétaire légitime les espèces ou effets saisis sauf s'il
soupçonne, pour des motifs raisonnables, qu'il s'agit de produits de la
criminalité au sens du paragraphe 462.3(1) du Code criminel ou de fonds
destinés au financement des activités terroristes.
[…]
25. La personne entre les
mains de qui ont été saisis des espèces ou effets en vertu de l'article 18 ou
leur propriétaire légitime peut, dans les quatre-vingt-dix jours suivant la
saisie, demander au ministre de décider s'il y a eu contravention au
paragraphe 12(1) en donnant un avis écrit à l'agent qui les a saisis ou à un
agent du bureau de douane le plus proche du lieu de la saisie.
29. (1) S’il décide qu’il
y a eu contravention au paragraphe 12(1), le ministre peut, aux conditions
qu’il fixe :
a)
soit restituer les espèces ou effets ou, sous réserve du paragraphe (2), la
valeur de ceux-ci à la date où le ministre des Travaux publics et des
Services gouvernementaux est informé de la décision, sur réception de la
pénalité réglementaire ou sans pénalité;
b)
soit restituer tout ou partie de la pénalité versée en application du
paragraphe 18(2);
c)
soit confirmer la confiscation des espèces ou effets au profit de Sa Majesté
du chef du Canada, sous réserve de toute ordonnance rendue en application des
articles 33 ou 34.
Le
ministre des Travaux publics et des Services gouvernementaux, dès qu’il en
est informé, prend les mesures nécessaires à l’application des alinéas a) ou
b).
(2)
En cas de vente ou autre forme d’aliénation des espèces ou effets en vertu de
la Loi sur l’administration des biens saisis, le montant de la somme versée
en vertu de l’alinéa (1)a) ne peut être supérieur au produit éventuel de la
vente ou de l’aliénation, duquel sont soustraits les frais afférents exposés
par Sa Majesté; à défaut de produit de l’aliénation, aucun paiement n’est
effectué.
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The Statutory
Context
[13]
Subsection
12(1) of the Act requires individuals to report the importation or exportation
of currency or monetary instruments equal to or greater than the prescribed
amount. The Cross-Border Currency and Monetary Instruments Reporting
Regulations, SOR/2002-412 [the Regulations] sets the prescribed amount at
$10,000.00.
[14]
Subsection
18(1) of the Act permits an officer to seize as forfeit currency or monetary
instruments if there are reasonable grounds to believe that there has been a
contravention of s. 12(1). However, the seized currency “shall” be returned to
an individual upon payment of the penalty prescribed in the Regulations unless
the officer has reasonable grounds to suspect that the funds are proceeds of
crime or used for financing terrorist activity (together, the Suspicions). If
the officer does hold such Suspicions, then the funds remain forfeit.
[15]
In
my view, this section provides the foundation for seizure and it clearly sets
out Parliament’s intention: if there is a failure to report, a penalty is
payable but Canada will only seize for forfeit funds which are subject to the
Suspicions. It is noteworthy that there is nothing in this section which
precludes the retention of a portion of the seized currency or monetary
instruments if an officer is satisfied that only a portion is suspicious.
[16]
Section
25 permits a person from whom funds were seized to request a Minister’s
decision about whether there was a contravention of s. 12(1), i.e. a failure to
report. Under s. 29, if the Minister decides that such a contravention
occurred, the Minister may return the currency or monetary instruments or confirm
that they are forfeited. It is of note that s. 29 does not expressly preclude
the return of a portion of seized funds once their legitimate origins have been
established.
Discussion
[17]
The
Applicant argued that the Decision was unreasonable because it ignored the
additional corroborating evidence provided to substantiate the legitimacy of
the Illicit Funds. However, having reviewed the evidence submitted by the
Applicant and the record before the Minister, it is my view that it was reasonable
for the Minister to hold forfeit the amount said to be the Applicant’s personal
savings and the money he received from his mother.
[18]
Regarding
the Legitimate Funds, the Respondent submits in supplementary submissions,
dated June 11, 2013, that the principles of statutory interpretation, namely
the modern approach to statutory interpretation and the “implied exclusion”
principle, lead to the conclusion that s. 29 does not grant the Minister
discretion to return a portion of the Seized Funds to the Applicant. The
Applicant also filed supplementary submissions, dated June 19, 2013, in which
he disagreed with the Respondent’s position saying that it was unfair. He now asks
that only the Legitimate Funds be returned to him.
[19]
The
Respondent says that in Bell ExpressVu Limited Partnership v Rex, 2002
SCC 42 at paras 26-27 (SCC), the Supreme Court of Canada confirmed that the
modern approach to interpreting statutes requires that the words in legislation
be read in their entire context and in their grammatical and ordinary sense
harmoniously with the legislation’s scheme and object and the intention of
Parliament. The Respondent argues that because there is no reference in either
s. 29 or elsewhere in the Act to the partial return of seized currency, it is
apparent that the Parliament did not authorize a partial return of seized unreported
funds.
[20]
The
Respondent also relies on the Supreme Court’s statements in Bell ExpressVu regarding
the applicability of other statutory principles when there is ambiguity about
the meaning of a provision. If s. 29 is deemed ambiguous, the Respondent
submits that the “implied exclusion” principle applies. It stipulates that where
legislation expressly provides for something in one provision, it is to be
assumed that the same meaning does not apply where it is not mentioned in
another provision. In this case, the Respondent says that Parliament’s
intention not to provide for a return of a portion of seized funds in paragraph
29(1)(a) is manifest when contrasted with paragraph 29(1)(b) which allows the
Minister to remit “any penalty or portion of any penalty…” [emphasis
added] to an individual. The Respondent argues that the differential treatment
of these proximate concepts, found mere subparagraphs apart, is a strong
indication that Parliament had in fact turned its mind to the issue of partial
relief for seized funds but decided against such a measure.
[21]
Counsel
for the Respondent further submits that this Court has specifically addressed
this issue and determined that s. 29 does not permit partial relief from
forfeiture. The issue was directly addressed by Mr. Justice Rennie in Admasu
v Canada (Minister of Public Safety and Emergency Preparedness), 2012 FC
451. The applicant in that case had failed to report just over $14,000.00 as he
was boarding a flight for Ethiopia via Amsterdam. The Recourse Directorate
accepted that $5,000.00 of the seized currency had a legitimate origin but refused
to return that amount because the applicant had failed to identify a legitimate
source for all of the seized currency. Mr. Justice Rennie noted the difference
in language between paragraph 29(1)(a) and paragraph 29(1)(b) and concluded
that the Act does not permit partial forfeiture of seized funds. He repeated this
conclusion in Dhamo v Canada (Minister of Public Safety and Emergency
Preparedness), 2013 FC 443 at paras 16 and 33 where he said that it is not
possible for the Minister to grant partial relief from forfeiture.
[22]
In
Mohammad v Canada (Minister of Public Safety and Emergency Preparedness),
2013 FC 148, Mr. Justice Martineau reached the same conclusion and Madam
Justice Gleason has quoted Mr. Justice Rennie’s conclusion with approval
although she did not find it necessary to decide the issue on the facts of her
case, see Tran v Canada (Minister of Public Safety and Emergency
Preparedness), 2013 FC 600.
[23]
The
Respondent stresses the importance of judicial comity and urges me to follow
these decisions. As noted by Mr. Justice Marc Noël in Allegran Inc. v Canada
(Minister of Health), 2012 FCA 308, the doctrine of comity seeks to promote
certainty in the law by preventing the same issue from being decided
differently by different judges of the same court.
[24]
The
Respondent submits that it is only where there are “strong reasons to the
contrary” that decisions of judicial colleagues should not be followed (Apotex
Inc. v Pfizer Canada Inc., [2013] FCJ No 562 at paras 13-14 (FC); Altana
Pharma Inc. v Novopharm Ltd., 2007 FC 1095 at para 36). According to the
Respondent, this has been interpreted to meant the presence of one of the
following factors:
-Subsequent
decisions have affected the validity of the impugned judgment;
-It is
considered that some binding authority in case law or some relevant statute was
not considered;
-The judgment
was unconsidered, a nisi prius judgment given in circumstances familiar
with all trial judges, where the exigencies of the trial require an immediate
decision without opportunity to fully consult authority.
[25]
The
Respondent submits that none of these factors are present in the current case
and thus there is no reason to depart from the four recent judgments of this
Court.
[26]
However,
in
Allegran
Inc.,
supra at paragraph 48, the Federal Court of Appeal indicated that a
judge of this Court may depart from conclusions of law by another judge of the
Court where he or she is convinced that a departure is necessary and can
articulate cogent reasons for doing so. This Court has also acknowledged
an exception to the principle of judicial comity where a judge is of the view
that, if a previous decision of the Court were followed, it would create an
injustice (Almrei v Canada (Minister of Citizenship and Immigration),
2007 FC 1025 at para 62).
[27]
With
great respect to my colleagues, I am unable to agree with their conclusion that,
because the Act specifies in paragraph 29(1)(b) that a portion of the penalty
may be returned, it follows that a portion of the seized funds which is
legitimate may not be returned under paragraph 29(1))(a) because that paragraph
does not refer to a “portion”.
[28]
My
inability to agree is based on the following points which, in my view,
constitute “strong reasons to the contrary”. I note that none of these points
were referred to in the earlier Federal Court decisions:
i.
The
objectives of Act are set out in s. 3 and confiscating legitimate funds does
not further those objectives. In Sellathurai v Canada (Minister of Public
Safety and Emergency Preparedness), 2008 FCA 255, the Federal Court of
Appeal considered the Minister’s exercise of discretion under s. 29 of the Act.
In that regard, it said at paragraph 53 that “The Minister’s discretion must be
exercised within the parameters of the Act and the objectives which Parliament
sought to achieve by that legislation”. In my view, it would not be reasonable
for the Minister to exercise his discretion in favour of holding the Legitimate
Funds forfeit;
ii.
The
penalty for this Applicant’s failure to report the Legitimate Funds is $250.00
according to s. 18(a) of the Regulations. Confiscation of $6,700.00 effectively
imposes a draconian penalty not mandated by the Act;
iii.
In
my view, if Parliament had intended to confiscate the Legitimate Funds it would
have stated that fact in unequivocal terms. Although counsel for the Respondent
was given the opportunity to make submissions on this issue, the Court was not
provided with any legislative history showing that Parliament intended to
appropriate such funds;
iv.
If
the Applicant had had the documents about the sale of his car at the airport,
the Officer would have been required by s. 18(2) of the Act to return the
Legitimate Funds at that time subject to payment of the prescribed penalty.
Accordingly, it makes no sense that it is open to the Minister to confirm the forfeiture
of those funds at a later date.
v.
The
interpretation advanced by the Respondent could lead to absurdly punitive
results. For example, if $100,000.00 was seized and $99,000.00 was later shown
to be legitimate, the Respondent would nevertheless say that the Minister has
no discretion to return the $99,000.00 under paragraph 29(1)(c) of the Act. In Re: Rizzo
& Rizzo Shoes Ltd., [1998] 1 S.C.R. 27 (SCC) at paragraph 27, the
Supreme Court of Canada noted that “It is a well established principle of
statutory interpretation that the legislature does not intend to produce absurd
consequences.” Absurdity is defined in the decision to include interpretations
that lead to inequitable consequences and those which are incompatible with the
objects of the legislation.
vi.
Lastly,
although the word “portion” appears in paragraph 29(1)(b), it is used in
reference to the penalty which, according to the Regulations, cannot be more
than $5,000.00. In my view, the interpretation of paragraph 29(1)(a), which
could determine the fate of large sums of money, should not be based solely on
the language used in a penalty provision. In other words, contrary to the
Respondent’s submissions, I do not find that the penalty for failing to report
and the forfeiture of suspicious funds are “proximate concepts”. This being so,
I am not persuaded that the implied exclusion principle of statutory
interpretation is applicable.
Conclusion
[29]
For
all these reasons, it is my conclusion that the Decision to confirm forfeiture
of the Seized Funds including the Legitimate Funds was an unreasonable exercise
of discretion.
ORDER
THIS
COURT ORDERS that
The Decision is
hereby set aside and the Applicant’s request for the return of the Legitimate
Funds is to be reconsidered by the Minister in accordance with these reasons.
“Sandra J. Simpson”