Sellathurai v. Canada (Public Safety and Emergency Preparedness)

Sellathurai v. Canada (Public Safety and Emergency Preparedness)
Court (s) Database
Federal Court of Appeal Decisions
Date
2008-09-09
Neutral citation
2008 FCA 255
File numbers
A-148-07
Notes
Reported Decision
Decision Content
Date: 20080909
Docket: A-148-07
Citation: 2008 FCA 255
CORAM: NADON J.A.
PELLETIER J.A.
RYER J.A.
BETWEEN:
GOWRKUMARAN SELLATHURAI
Appellant
and
MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS
(SOLICITOR GENERAL OF CANADA)
Respondent
Heard at Toronto, Ontario, on June 17, 2008.
Judgment delivered at Ottawa, Ontario, on September 9, 2008.
REASONS FOR JUDGMENT BY: PELLETIER J.A.
CONCURRED IN BY: NADON J.A.
CONCURRING REASONS BY: RYER J.A.
Date: 20080909
Docket: A-148-07
Citation: 2008 FCA 255
CORAM: NADON J.A.
PELLETIER J.A.
RYER J.A.
BETWEEN:
GOWRKUMARAN SELLATHURAI
Appellant
and
MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS
(SOLICITOR GENERAL OF CANADA)
Respondent
REASONS FOR JUDGMENT
PELLETIER J.A.
INTRODUCTION
[1] This is an appeal from the decision of Simpson J. of the Federal Court, reported at 2007 FC 208, [2007] F.C.J. No. 280, dismissing Mr. Sellathurai's application for judicial review of the Minister's decision (made on his behalf by his delegate) declining to return approximately $123,000 which were seized from him by a customs officer as he was about to depart for Sri Lanka from Pearson International Airport.
[2] The funds were seized and forfeited because Mr. Sellathurai failed to declare them to a customs officer as he was required to do by section 12 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (the Act) and, as conceded by his counsel, at the time of seizure there were reasonable grounds to suspect that the funds were proceeds of crime or were to be used in the funding of terrorism. The issue in this appeal is whether the Minister properly exercised his discretion in refusing to return the funds to Mr. Sellathurai.
THE FACTS
[3] The following statement of the facts surrounding the seizure is taken from the Case Synopsis and Reasons for Decision prepared by the Canada Border Services Agency (formerly the Canada Customs and Revenue Agency) (the Agency) in response to Mr. Sellathurai's request for a ministerial review of the seizure of his funds:
… on November 10, 2003, Mr. Sellathurai was questioned by Customs officials at Pearson International Airport, Toronto, Ontario outbound from Canada. He reported $4,000.00 in Canadian currency and $400.00 in American currency. He was asked the purpose of his trip. Mr. Sellathurai responded that he was to attend the funeral of his father and would be absent from Canada one week. The officer examined his passport noting that he had exited the United Arab Emirates on October 13, 2003. The officer asked to verify his currency. Mr. Sellathurai provided an envelope that contained several bills. The officer requested that he present the American currency, which he stated was in his carry-on. The officer questioned why he was taking $4,000.00 for a week-long trip. He advised the officer that he was an importer of clothing and a grocer as well as a salesman. Examination of his carry-on revealed two gold bars. When asked the value, he stated "$20,000.00". A receipt was provided from a Canadian jewellery store indicating that gold jewellery had been exchanged for the two gold bars. In his front pant pocket was more money. Mr. Sellathurai was moved to a private area for further examination. Mr. Sellathurai had, in total, eight envelopes of currency, the gold bars and some American currency. The officer asked him what the money was intended for. He stated that he was going to buy jewellery. At this time, the officer reminded him that he had stated he was a salesman, grocer and importer of clothing. Mr. Sellathurai stated that he is also a wholesaler of jewellery. He provided a business card. The name on the card was the same as the business name on the receipt for the gold bars. The officer advised Mr. Sellathurai that the currency was under seizure. While the paperwork was being prepared, Mr. Sellathurai stated that $90,000.00 was a loan from a jeweller in Montreal. He stated that $47,000.00 was from one individual and another $45,000.00 was from another person. He was unsure of their names at first. He stated that he intended to purchase jewellery for the two on this trip. He had no contract to substantiate this and no documents to support a withdrawal from a banking institution. As the officer had reasonable grounds to suspect that the currency was proceeds of crime, no terms of release were offered. The officer returned his documents, his two gold bars and other jewellery.
[Appeal Book, at p. 227-228.]
[4] The seizure was made under the authority of sections 12 and 18 of the Act: section 12 requires all persons entering or leaving Canada with more than a prescribed amount of currency to report that amount to the nearest customs office upon arriving in or leaving Canada, while section 18 authorizes seizure in the event of a breach of section 12:
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.
…
(3) Currency or monetary instruments shall be reported under subsection (1)
(a) in the case of currency or monetary instruments in the actual possession of a person arriving in or departing from Canada, or that form part of their baggage if they and their baggage are being carried on board the same conveyance, by that person or, in prescribed circumstances, by the person in charge of the conveyance;
…
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.
…
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.
[…]
(3) Le déclarant est, selon le cas :
a) la personne ayant en sa possession effective ou parmi ses bagages les espèces ou effets se trouvant à bord du moyen de transport par lequel elle arrive au Canada ou quitte le pays ou la personne qui, dans les circonstances réglementaires, est responsable du moyen de transport;
[…]
18. (1) S'il a des motifs raisonnables de croire qu' l 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.
[…]
[5] The prescribed amount is $10,000: see section 2 of the Cross-border Currency and Monetary Instruments Reporting Regulations, S.O.R./2002-412.
[6] In accordance with paragraph 18(3)(a) of the Act, the officer gave Mr. Sellathurai written notice of the seizure and of his recourse under sections 25 and 30 of the Act:
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.
…
30. (1) A person who requests a decision of the Minister under section 27 may, within 90 days after being notified of the decision, appeal the decision by way of an action in the Federal Court in which the person is the plaintiff and the Minister is the defendant.
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.
[…]
30.(1) La personne qui a demandé que soit rendue une décision en vertu de l'article 27 peut, dans les quatre-vingt-dix jours suivant la communication de cette décision, en appeler par voie d'action à la Cour fédérale à titre de demandeur, le ministre étant le défendeur.
[7] Mr. Sellathurai exercised his right to request a ministerial review of the officer's decision. In a letter dated January 12, 2004, an officer of the Agency set out the circumstances surrounding the seizure. The officer then went on to request further information:
Please submit evidence to support where you obtained the money such as withdrawal from a bank account or other such evidence that would support that the money was legitimately obtained.
[Emphasis added.]
[Appeal Book, at p. 63.]
[8] No specific grounds for suspicion are identified in this letter and no specific explanations are requested. The only proof requested is proof that the funds were legitimately obtained.
[9] In response to this request, Mr. Sellathurai supplied three affidavits and three letters of reference. The affidavits were provided by Sathi Sathananthan, Shudhir Chawla, and George Montgomery Pathinather. Sathi Sathananthan, Mr. Sellathurai's bookkeeper, produced bank statements and cancelled cheques showing withdrawals from Mr. Sellathurai's business account between September 19, 2003 and November 10, 2003, in the amount of $37,000 by way of cheques drawn in favour of Mr. Sellathurai's wife.
[10] Shudhir Chawla deposed that he is Mr. Sellathurai's business associate and that he loaned him $47,000 in cash to purchase 22 carat gold jewellery for him in Dubai. The $47,000 was the product of the sale of 93 ounces of gold bullion in various cash transactions. George Montgomery Pathinather deposed that he is in the jewellery business in Montreal and has known Mr. Sellathurai for three and a half years. He further deposed that he provided the latter, from funds kept in his office safe, $45,000 in cash, generated by cash transactions.
[11] The officer responded to these elements of proof in a letter to Mr. Sellathurai's counsel dated March 15, 2004. The material parts of that letter are as follows:
The affidavits from George Pathinather and Shudhir Chawla do not substantiate the legitimacy of their portion of the seized currency. Legitimate businesses wish to maintain records of their funds and expenses to ensure records for tax purposes and maintain internal audit controls…They will require documentary evidence to support the legitimacy of the seized currency.
…
Having broken the law and failed to declare, a person cannot regain currency seized as forfeit, on a reasonable suspicion under the Act, by merely telling a story that could be true. An innocent explanation as to the origin of the funds must be proven in sufficient detail and with enough credible, reliable and independent evidence to establish that no other reasonable explanation is possible…
[Emphasis added.]
[Appeal Book, at p. 103-104.]
[12] When counsel objected to the dismissal of the evidence provided on Mr. Sellathurai's behalf, the officer responded as follows in a letter dated May 3, 2004:
I would like to re-state that the affidavits from George Pathinather and Shudhir Chawla do not substantiate the legitimacy of their portion of the seized currency. They will require documentary evidence to support the legitimacy of the seized currency.
[Appeal Book, at p. 107.]
[13] In a letter dated June 18, 2004, the officer responded to a further inquiry by Mr. Sellathurai's counsel by re-stating the position taken in her letter of March 15, 2004, and insisting upon production of documentary evidence to support the legitimacy of the seized currency: Appeal Book, at p. 108-109.
[14] The Minister (by his delegate) advised Mr. Sellathurai of his decision by letter dated October 6, 2005. The reasons given for the decision are contained in the following two paragraphs:
The evidence submitted has confirmed that you were specifically questioned by a Customs officer at Pearson International Airport on November 10, 2003, and you advised the officer that you did not have currency in excess of $10,000.00 CAD. Examination revealed $435.00 USD currency and $123,000.00 Canadian currency. Consequently, by virtue of section 12 and 18 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; [sic] the currency was lawfully subject to seizure. No terms of release were offered for the currency as the officer had reasonable suspicion to suspect proceeds of crime [sic].
Although your solicitor's representations have been considered, mitigation has not been granted in this case. The evidence provided is not verifiable and does not substantiate the origin of the currency. Based on the totality of the evidence and the lack of verifiable evidence to support the legitimate origin of the currency, reasonable suspicion still exists. As such the currency has been held as forfeit…
[Appeal Book, at p. 116-117.]
THE FEDERAL COURT'S DECISION
[15] Mr. Sellathurai sought judicial review of this decision in the Federal Court. The application judge reviewed the facts and addressed the question of standard of review. She concluded that the Minister's decision should be reviewed on a standard of reasonableness, except "when dealing with the burden of proof faced by an applicant who wishes to dispel ' reasonable grounds to suspect'. On that issue, correctness will be the standard of review:" Reasons for Decision, at para. 60.
[16] Counsel for Mr. Sellathurai argued that the Minister's delegate used the wrong test in deciding whether to confirm the forfeiture of Mr. Sellathurai's funds. This is apparent from the application judge's statement of the issues:
61. The Applicant has raised the following issues. The headings are mine.
No reasonable grounds?
I. The Minister erred in his decision that the funds in question are forfeit insofar as there exists no reasonable grounds to suspect that the funds in question are the proceeds of crime.
An improper test?
II. The Minister erred in his decision insofar as he improperly reversed the burden of proof, finding, in effect, that the Applicant failed to prove that the funds in question were not the proceeds of crime.
A contradictory decision?
III. The Minister erred in his decision insofar as his decision is, on its face, contradictory and therefore unreasonable.
[Reasons for Judgment and Judgment, at para. 61.]
[17] The application judge dealt with the second issue, that of the reversal of the onus of proof, in the following terms:
63. Section 29 of the Act is silent about the principles to be used by a Minister's Delegate in deciding whether to confirm a currency forfeiture. However, the Decision makes it clear that, in this case, the Minister's Delegate was determining whether a reasonable suspicion still existed. In other words, the Minister's Delegate adopted for the Decision the test the Customs Officer at the airport was required to use when she declined to return the Forfeited Currency, pursuant to subsection 18(2) of the Act. That subsection provides that she must have had "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". In my view, the Decision stated the correct test when it indicated that the Minister's Delegate was determining whether such reasonable grounds still existed.
[Reasons for Judgment and Judgment, at para. 63.]
[18] The application judge found no merit in the first issue and then analyzed the issue of standard of proof applicable to an applicant who sought to recover funds seized as forfeit. After a discussion of the authorities, she concluded as follows:
72. With regard to the burden of proof on an applicant who wishes to dispel a suspicion based on reasonable grounds, it is my view that such an applicant must adduce evidence which proves beyond a reasonable doubt that there are no reasonable grounds for suspicion. Only in such circumstances will the evidence be sufficient to displace a reasonable suspicion.
73. I have reached this conclusion because, if 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.
74. In this case, the adjudicator required proof beyond all doubt and I am satisfied that this constituted an error in law because proof beyond a reasonable doubt is sufficient to defeat reasonable grounds for suspicion.
[19] The application judge concluded that the adjudicator [the Agency officer] required proof in excess of proof beyond a reasonable doubt because of the statement, quoted earlier in these reasons, that proof that there was no other reasonable explanation as to the source of the funds, was required. However, the application judge went on to conclude that the error was not material because Mr. Sellathurai's evidence fell below the standard of proof beyond a reasonable doubt. Since the Minister's error could not have affected the outcome, the application for judicial review could not succeed and was therefore dismissed.
THE POSITIONS OF THE PARTIES
[20] In the Memorandum of Fact and Law filed on Mr. Sellathurai's behalf, his counsel defined the issue in the appeal as follows:
15. The Appellant respectfully submits that Justice Simpson erred in law in finding that, in order to dispel a reasonable suspicion that funds seized and held as forfeit are the proceeds of crime under section 18(2) of the Proceeds of Crime (Money Laundering) and Terrorism Financing Act and to thereby obtain the return of the currency under section 29(1)(a) of the Act, the Appellant had to establish beyond a reasonable doubt that the funds were legitimately obtained. It is submitted that the standard of proof required to dispel a reasonable suspicion properly lies between the civil standard of proof on a balance of probabilities and the criminal standard of proof beyond a reasonable doubt.
[Emphasis in the original.]
[Appellant's Memorandum, at para. 15.]
[21] The balance of the Memorandum discussed the nuances of standard of proof, proof beyond a reasonable doubt and proof required to dispel a reasonable doubt. In the course of that discussion, counsel for Mr. Sellathurai conceded that:
… reasonable suspicion existed at the time of the forfeiture by the CBSA officer.
[Emphasis in the original.]
[Appellant's Memorandum, at para. 16.]
[22] The substance of the appellant's argument was that since the evidence submitted by Mr. Sellathurai was uncontradicted and was relevant to the source and the legitimacy of the funds, it ought to have been accepted as sufficient to dispel the reasonable suspicion which existed at the time of the seizure of the currency. Counsel argued that the requirement of proof beyond a reasonable doubt is misplaced since that standard is used only in the criminal context where the liberty of the subject is at stake. In this case, the Act makes no reference to proof beyond a reasonable doubt. According to counsel for Mr. Sellathurai, the appropriate standard of proof required to dispel reasonable suspicion lies between the civil standard of proof and the criminal standard of proof beyond a reasonable doubt. In taking this position, counsel relies on a quotation from Bennett J. in R. v. Pilarinos, 2001 BCSC 1690, [2001] B.C.J. No. 2540, at paragraph 143, dealing with proof of a reasonable apprehension of bias:
143. In summary, there is a strong presumption of judicial integrity that may only be displaced by cogent evidence establishing a real likelihood of bias. It is trite to note that this burden is higher than a simple balance of probabilities, but lower than proof beyond a reasonable doubt. The burden lies with the person alleging a reasonable apprehension of bias. A reasonable apprehension of bias is determined by the well-informed, right-minded individual who is aware of all of the circumstances, including the nature of the case, its surrounding circumstances and the presumption of judicial integrity.
[23] Counsel for Mr. Sellathurai concluded his argument by suggesting:
… At the very least, when the material was being submitted by the Appellant to the Recourse Directorate, some effort should have been made by the Recourse Directorate or the Minister's Delegate to put the Appellant on notice as to the standard that was being applied so that he could meet it…
[Appellant's Memorandum, at para. 26.]
[24] The Minister's position is that the application judge's conclusion is reasonable and therefore, no intervention is justified.
ANALYSIS
Standard of Review
[25] The question of the standard of review of the Minister's decision under section 29 was settled by this Court in Dag v. Canada (Minister of Public Safety and Emergency Preparedness), 2008 FCA 95, 70 Admin. L.R. (4th) 214, at paragraph 4 (Dag), where it was held that the standard of review of the Minister's decision under section 29 was reasonableness. Consideration of the issue of the standard of review of the decision as to the standard of proof to be met by the applicant will, for reasons which will become apparent, be deferred to a later point in these reasons.
Review of the Jurisprudence
[26] Simpson J.'s decision in this case was followed in a number of subsequent cases in the Federal Court which adopted her endorsement of the Minister's statement of the basis on which he was exercising his discretion under section 29 of the Act: see Dag, 2007 FC 427, 318 F.T.R. 269, at para. 31, aff'd 2008 FCA 95; Dupre v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 1177, [2007] F.C.J. No. 1521, at para. 22 (Dupre); Hamam v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 691, 314 F.T.R. 151, at para. 24; Yang v. Canada (Minister of Public Safety and Emergency Preparedness), 2008 FC 158, [2008] F.C.J. No. 197, at para. 11 (Yang); Lyew v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 1117, 317 F.T.R. 234, at para. 31 (Lyew); Dang v. Canada (Minister of Public Safety and Emergency Preparedness), 2008 FC 157, [2008] F.C.J. No. 196, at para. 29; Ondre v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 454, 312 F.T.R. 134, at para. 46 (Ondre); Yusufov v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FC 453, 312 F.T.R. 122, at para. 42 (Yusufov); Majeed v. Canada (Minister of Public Safety), 2007 FC 1082, [2007] F.C.J. No. 1394, at para. 47 (Majeed); Qasem v. Canada (Minister of National Revenue), 2008 FC 31, 322 F.T.R. 47, at para. 14 (Qasem).
[27] On the other hand, there has been a certain divergence of opinion as to the standard of proof to be met by the applicant. Some judges have adopted Simpson J.'s position that the appropriate standard is proof beyond a reasonable doubt: see Ondre, at para. 19; Yusufov, at para. 20; Majeed, at para. 50. Other judges have framed the issue in terms of the evidentiary burden on the applicant to dispel the Minister's suspicions: see Dupre, at paras. 37-38; Yang, at paras. 20-21; Qasem, at para.18. Some judges have been critical of the use of language taken from the criminal context to describe the burden upon the applicant: Qasem, at para. 21; Lyew, at para. 32.
[28] It appears from this that Simpson J.'s decision in this case has, to some extent, framed the terms of the debate with respect to the operation of section 29. Two themes have emerged from the jurisprudence, namely the basis on which the Minister exercises his discretion under section 29 and the standard of proof to be met by an applicant. Before examining these in more detail, it is necessary to examine the nature of the Minister's decision under section 29.
The Nature of the Section 29 Decision
[29] To understand what the Minister is required to do under section 29, it is necessary to understand the status of the seized currency at the time the section 29 decision is taken.
[30] The forfeiture of currency under section 18 is effective as of the time of the breach of section 12:
23. Subject to subsection 18(2) and sections 25 to 31, currency or monetary instruments seized as forfeit under subsection 18(1) are forfeited to Her Majesty in right of Canada from the time of the contravention of subsection 12(1) in respect of which they were seized, and no act or proceeding after the forfeiture is necessary to effect the forfeiture.
23. Sous réserve du paragraphe 18(2) et des articles 25 à 31, les espèces ou effets saisis en application du paragraphe 18(1) sont confisqués au profit de Sa Majesté du chef du Canada à compter de la contravention au paragraphe 12(1) qui a motivé la saisie. La confiscation produit dès lors son plein effet et n'est assujettie à aucune autre formalité.
[31] Not only is the forfeiture effective as of the date of the breach of section 12, it is also final, subject only to judicial review of the finding that section 12 has been breached:
24. The forfeiture of currency or monetary instruments seized under this Part is final and is not subject to review or to be set aside or otherwise dealt with except to the extent and in the manner provided by sections 25 to 30.
24. La confiscation d'espèces ou d'effets saisis en vertu de la présente partie est définitive et n'est susceptible de révision, de rejet ou de toute autre forme d'intervention que dans la mesure et selon les modalités prévues aux articles 25 à 30.
[32] As this Court pointed out in Tourki v. Canada (Minister of Public Safety and Emergency Preparedness), 2007 FCA 186, 284 D.L.R. (4th) 356 (Tourki), that which is the subject of review under sections 25 to 30 is the conclusion that there has been a breach of section 12, not the consequences of that breach: see paras. 16-18. Of course, the applicant's only interest in challenging the finding under section 12 is to attempt to obtain the return of the funds seized or the penalty paid. And since the only way to access the discretion vested in the Minister under section 29 is to request a review under section 25, such an application is, in effect, an application for relief from forfeiture.
[33] The only means by which a decision under section 29 may be challenged is by means of judicial review: see Tourki, at para. 18. The jurisprudence suggests that the question raised in such an application for judicial review is the relationship between the Minister's decision under section 29 and that of the customs officer under subsection 18(2). Does section 29 call for the Minister to review or to repeat the exercise undertaken by the customs officer in coming to the conclusion to seize the funds?
29.(1) If the Minister decides that subsection 12(1) was contravened, the Minister shall, 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.
29.(1) S'il décide qu'il y a eu contravention au paragraphe 12(1), le ministre, aux conditions qu'il fixe :
a) soit décide de 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 décide de restituer tout ou partie de la pénalité versée en application du paragraphe 18(2);
c) soit confirme 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).
[34] The Minister is only called upon to exercise his discretion under section 29 where he concludes, pursuant to a request made under section 25, that there has in fact been a breach of section 12. Consequently, the starting point for the exercise of the Minister's discretion is that the forfeited currency, which is now in the hands of the Minister of Public Works pursuant to section 22, is, for all legal purposes, property of the Crown: see Canada v. Central Railway Signal Co., [1933] S.C.R. 555 at p. 557-558, where the following appears:
Some question was raised on the argument as to the effect of the seizure of the 4th July and as to its character as well. The point was not raised in the courts below and the evidence on the point is quite sufficient. It is not open to question on that evidence, that the goods were seized, and "seized as forfeited" for violation of the Excise Act. Nor is there any room for doubt as to the effect of such a seizure. It proceeds upon the assumption that the goods, having been forfeited ipso jure, in consequence of the violation of the Act, are at the time of seizure, and not as a consequence of it, the property of the Crown. There are several provisions of the statute under which forfeiture supervenes upon the commission of the offence, as a legal consequence of the offence, independently of any act on the part of the officers of excise or any conviction or other judgment of a court.
[35] The logic which applies under the Excise Act, R.S.C. 1985, c. E-14, also applies to the Customs Act, R.S.C. 1985, (2nd Supp.), c. 1, as well as to the Act under consideration here: see Tourki, at para. 17.
[36] It seems to me to follow from this that the effect of the customs officer's conclusion that he or she had reasonable grounds to suspect that the seized currency was proceeds of crime is spent once the breach of section 12 is confirmed by the Minister. The forfeiture is complete and the currency is property of the Crown. The only question remaining for determination under section 29 is whether the Minister will exercise his discretion to grant relief from forfeiture, either by returning the funds themselves or by returning the statutory penalty paid to secure the release of the funds.
[37] In this case, the Minister recognized the nature of the discretion he was being called upon to exercise when he advised Mr. Sellathurai, in his letter of October 6, 2005, that "mitigation has not been granted in this case": Appeal Book, at p. 117. Mitigation of the consequences of forfeiture is, in effect, relief from forfeiture. While the Minister's characterization of the decision he makes under section 29 is not conclusive, I find confirmation of my position in the Minister's response to Mr. Sellathurai's request.
The Basis of the Exercise of the Minister's Discretion
[38] This leads to the question as to how the Minister will exercise his discretion. As this Court recognized in Tourki, at paragraph 29, the Act does not stipulate the basis on which the Minister is to exercise his discretion. The jurisprudence on the exercise of a statutory discretion requires, among other considerations, that the discretion be exercised to further the objects of the statute which confers the discretion:
It is, as well, a clearly-established rule that the courts should not interfere with the exercise of a discretion by a statutory authority merely because the court might have exercised the discretion in a different manner had it been charged with that responsibility. Where the statutory discretion has been exercised in good faith and, where required, in accordance with the principles of natural justice, and where reliance has not been placed upon considerations irrelevant or extraneous to the statutory purpose, the courts should not interfere.
[Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2, at p. 7-8 (Maple Lodge Farms).]
[39] While the basis upon which courts will intervene with respect to discretionary decisions has evolved since Maple Lodge Farms, consideration of the statutory purpose remains a key element of the analysis: see Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, at paras. 67-68; Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, at para. 36.
The Exercise of the Minister's Discretion
[40] How did the Minister exercise his discretion in this case? The answer to that question requires a review of what the Minister did, as well as what the Minister said he did. In my view, they are not the same thing.
[41] From his first contact with Mr. Sellathurai, the Minister (acting through the Agency and through his delegate) asked him for one thing only: to demonstrate to him that the seized funds came from a legitimate source. A review of the exchange of correspondence between the Agency and Mr. Sellathurai's counsel, set out in the first part of these reasons, shows that Mr. Sellathurai was repeatedly and consistently asked to provide proof that the seized funds came from a legitimate source. When Mr. Sellathurai did provide such proof in the form of the affidavits of Sathananthan, Chawla, and Pathinather, the Minister was not persuaded because the affidavits provided explanations which were unverifiable. It seems clear from a fair reading of the record that what the Minister actually did was to insist upon proof of the legitimacy of the source of the funds as a condition of exercising his discretion in favour of Mr. Sellathurai.
[42] What the Minister said he did is slightly different. In his letter to Mr. Sellathurai explaining why he was refusing his request for "mitigation", the Minister wrote as follows:
Although your solicitor's representations have been considered, mitigation has not been granted in this case. The evidence provided is not verifiable and does not substantiate the origin of the currency. Based on the totality of the evidence and the lack of verifiable evidence to support the legitimate origin of the currency, reasonable suspicion still exists. As such the currency has been held as forfeit…
[Emphasis added.]
[Appeal Book, at p. 117.]
[43] There is logic in the Minister's reasoning that if the applicant cannot show that the seized funds come from a legitimate source, the customs officer's reasonable grounds for suspicion that the funds are proceeds of crime still remain. However, to cast the issue in these terms is to see the section 29 decision in terms of reassessing the customs officer's decision. As noted above, once the breach of section 12 is confirmed, the only issue remaining is whether the Minister will grant relief from forfeiture. Thus while the Minister's statement appears reasonable, it mischaracterizes the nature of the problem confronting the Minister.
[44] The reference to "reasonable suspicion still exists" suggests that the Minister considered the reasonable grounds for suspicion identified by the customs officer and, in light of the information provided by Mr. Sellathurai, decided whether those grounds for suspicion were still legitimate. In her reasons, the application judge equated this exercise with the adoption of the test imposed on the Minister by subsection 18(2): see para. 63.
[45] The application judge may have been lead to that conclusion by the nature of the affidavit filed by the Minister's delegate. While the letter setting out the reasons for the refusal of Mr. Sellathurai's request deals only with the evidence of the legitimacy of the source of the seized funds, the Minister's delegate filed an affidavit in which he restated and reviewed the grounds for suspicion identified by the customs officer, and indicated why he believed they remained unanswered. In my view, this form of affidavit is inappropriate and ought not to have been given any weight at all.
[46] The judges of the Federal Court have previously stated that a tribunal or a decision-maker cannot improve upon the reasons given to the applicant by means of the affidavit filed in the judicial review proceedings. In Simmonds v. Canada (Minister of National Revenue), 2006 FC 130, 289 F.T.R. 15, Dawson J. wrote at paragraph 22 of her reasons:
I observe the transparency in decision-making is not promoted by allowing decision-makers to supplement their reasons after the fact in affidavits.
[47] See to the same effect Kalra v. Canada (Minister of Citizenship and Immigration), 2003 FC 941, 29 Imm. L.R. (3d) 208, at para. 15; Yue v. Canada (Minister of Citizenship and Immigration), 2006 FC 717, [2006] F.C.J. No. 914, at para. 3; bin Abdullah v. Canada (Minister of Citizenship and Immigration), 2006 FC 1185, [2006] F.C.J. No. 1482, at para. 13. Any other approach to this issue allows tribunals to remedy a defect in their decision by filing further and better reasons in the form of an affidavit. In those circumstances, an applicant for judicial review is being asked to hit a moving target.
[48] Quite apart from its admissibility on the issue of the reasons for the decision, the Minister's delegate's affidavit raises issues of credibility because the factual issues identified in the affidavit were never raised with Mr. Sellathurai, nor was he ever asked for any explanation of any of the facts which were identified as giving rise to reasonable grounds for suspicion. One would have thought that if the Minister's delegate was examining the facts identified as the grounds for suspicion, he would have made inquiries about them.
[49] Where the Minister repeatedly asks for proof that the seized currency has a legitimate source, as he did in this case, it is a fair conclusion that he made his decision on the basis of the applicant's evidence on that issue. The underlying logic is unassailable. If the currency can be shown to have a legitimate source, then it cannot be proceeds of crime.
[50] If, on the other hand, the Minister is not satisfied that the seized currency comes from a legitimate source, it does not mean that the funds are proceeds of crime. It simply means that the Minister has not been satisfied that they are not proceeds of crime. The distinction is important because it goes directly to the nature of the decision which the Minister is asked to make under section 29 which, as noted earlier in these reasons, is an application for relief from forfeiture. The issue is not whether the Minister can show reasonable grounds to suspect that the seized funds are proceeds of crime. The only issue is whether the applicant can persuade the Minister to exercise his discretion