Ottawa, Ontario, October 19, 2007
PRESENT: The Honourable Madam Justice Mactavish
BETWEEN:
and
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.
APPENDIX
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1238-06
STYLE OF CAUSE: JAVED MAJEED v.
THE MINISTER OF PUBLIC SAFETY
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: October 3, 2007
APPEARANCES:
Mr. Raza Kayani FOR THE APPLICANT
Mr. Michael Roach For the Respondent
SOLICITORS OF RECORD:
RAZA KAYANI LLP
Barristers & Solicitors
Toronto, Ontario FOR THE APPLICANT
JOHN H. SIMS, Q.C.
Deputy Attorney General of Canada For the Respondent