Date: 20210825

Docket: T-747-19

Citation: 2021 FC 875

Ottawa, Ontario, August 25, 2021

PRESENT: The Honourable Mr. Justice Gleeson

BETWEEN:

RAMEZ RIHANE NABIL KHUBIEH

Applicants

and

THE MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS

Respondent

JUDGMENT AND REASONS

I. Overview

[1] The Applicants, Mr. Ramez Rihane and Mr. Nabil Khubieh, apply under section 18.1 of the Federal Courts Act, RSC 1985, c F-7 for review of the April 4, 2019 decision by the Minister’s Delegate [MD] holding that funds seized upon entry into Canada be held as forfeit pursuant to paragraph 29(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17 [PCMLTFA].

[2] The Applicants argue an Order quashing the MD’s decision and directing the return of the seized currency should issue for two reasons. They submit the MD:

1. violated their procedural fairness rights by not interviewing the Applicants in regard to the source of the seized currency; and

2. unreasonably concluded the Applicants had failed to demonstrate the seized currency came from a legitimate source.

[3] I am not convinced that the Court’s intervention is warranted. The MD was not required to interview the Applicants. The conclusion that the Applicants had failed to meet their burden of demonstrating a legitimate source of the seized currency was reasonably available to the MD. My reasons follow.

II. Background

[4] Mr. Khubieh is a United States citizen. His friend and co-Applicant Mr. Rihane is a Syrian citizen who was living in California.

A. The seizure

[5] On August 9, 2018, Mr. Khubieh attempted to enter Canada at the Saint-Bernard de Lacolle port of entry in Quebec. Mr. Khubieh declared and then confirmed to the primary Border Services Officer [BSO] that he was not in possession of currency exceeding $10,000 Canadian dollars [CAD]. Mr. Khubieh also informed the primary BSO that he was a resident of Minnesota and a limousine driver and that the California-plated vehicle he was driving was his employer’s.

[6] Mr. Khubieh was referred to a secondary interview with two BSOs. He informed the BSOs undertaking the secondary inspection that he was the owner of the car and that there was between $20,000 and $30,000 United States dollars [USD] in the car. The BSOs searched the car and found $30,600 USD, credit cards and an identity card in the name of the co-Applicant Mr. Rihane in a concealed compartment. The BSOs also found the car was registered to Mr. Rihane.

[7] Mr. Khubieh was detained and interviewed. He informed the BSOs that he earned the money while working as an elevator repairperson and that he did not keep the money in a bank account because he did not trust banks. He had no documentation to establish the source of the funds, had no knowledge of how the money had been packaged and did not know the denomination of the USD bills.

[8] The funds were seized pursuant to section 12 of the PCMLTFA. Mr. Khubieh was allowed to return to the United States.

B. The request for review

[9] On October 15, 2018, Mr. Khubieh requested the MD review the seizure and forfeiture of the $30,600.00 USD as provided for at section 25 of the PCMLTFA.

[10] In seeking the review, Mr. Khubieh reported that he had explained to one of the BSOs that the money belonged to his friend, Mr. Rihane. Mr. Rihane was crossing into Canada separately to make a refugee claim. Mr. Rihane feared the car and money would be seized at the border and therefore asked Mr. Khubieh to transport the car and money to Canada for him. Mr. Rihane reportedly had entered Canada but was deported to the United States after a failed refugee claim. Mr. Khubieh indicated that Mr. Rihane was willing to provide proof of the source of the funds.

[11] Mr. Khubieh’s request for review was acknowledged by the MD. The MD provided a written notice of the circumstances of the seizure and requested Mr. Khubieh provide documentary evidence showing the lawful origin of the $30,600.00 USD. The MD specified that “[t]he evidence provided must demonstrate an identifiable link between the seized currency and a legitimate origin of the currency and must accurately account for the seized currency in its entirety” (emphasis in original).

[12] Mr. Khubieh provided documents in response to the written notice. The MD subsequently advised Mr. Khubieh in writing that the documentation provided failed to demonstrate a lawful origin of the funds or that Mr. Khubieh received the money from Mr. Rihane. Mr. Khubieh was advised that further documentation addressing the identified concerns could be submitted.

[13] This time Mr. Rihane responded, providing additional tax return documentation and bank statements. Mr. Rihane reported the funds were generated by two businesses he operated: an ice cream truck and a limousine service.

III. Decision under Review

[14] The MD reviewed the circumstances of the seizure and identified the indicators relied upon to form the reasonable belief at the time of the seizure that the funds were proceeds of crime or money laundering. The MD concluded the seizure was warranted due to Mr. Khubieh’s failure to declare the $30,600 USD, having been provided the opportunity to do so on two occasions during the primary inspection.

[15] The MD highlighted the significant inconsistencies between Mr. Khubieh’s statements to the BSOs regarding the source and ownership of the funds and his relationship with Mr. Rihane.

[16] The MD considered the evidence put forward by Mr. Khubieh and the additional documentation provided by Mr. Rihane. The MD concluded that Mr. Khubieh (as the original claimant) had failed to dispel the BSOs’ reasonable grounds for the seizure and determined that the $30,600 USD was to be held as forfeit.

IV. Preliminary Issue

[17] The Respondent objects to an affidavit sworn by an individual identified as Merve Yilbas [Yilbas Affidavit] and filed by the Applicants. The Respondent takes issue with the Yilbas Affidavit on three grounds. First, the Respondent notes that the version of the Yilbas Affidavit filed as part of the Applicants’ Record differs from the Yilbas Affidavit that had been previously served on the Respondent. Second, the Affidavit fails to include a sworn statement as to the basis for the Affiant’s knowledge or belief. Third, the Affidavit includes documents that were not before the decision maker and were the subject of an unsuccessful motion to file additional evidence under Rule 312 of the Federal Courts Rules (Order of Prothonotary Mandy Aylen, December 17, 2020 [December 2020 Order]).

[18] Generally, new evidence is not admissible on judicial review (Association of Universities and Colleges of Canada v Canadian Copyright Licensing Agency (Access Copyright), 2012 FCA 22 at para 19). Prothonotary Mandy Aylen determined that none of the exceptions to the general rule apply in this instance (December 2020 Order at para 14).

[19] At the outset of the hearing, counsel for the Applicants conceded that the new evidence in the Yilbas Affidavit was not properly before the Court and that the Application was to be considered on the basis of the Tribunal Record. Although the Yilbas Affidavit does include documents that were before the decision maker, these documents are also found in the Tribunal Record.

[20] I have not considered or relied upon the Yilbas Affidavit.

V. Standard of Review

[21] The parties agree that the MD’s decision is reviewable on the reasonableness standard (Sandwidi c Canada (Sécurité publique et Protection civile), 2020 CF 995 at para 25 [Sandwidi]). A reasonable decision is one that is “based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law” (Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at para 85).

[22] With respect to questions of procedural fairness, strictly speaking, no standard of review is applied (Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69 at para 54 [CPR]). The guiding question is “whether the procedure was fair having regard to all of the circumstances” (CPR at para 54).

VI. Analysis

[23] I am of the view that there was no breach of procedural fairness and that the decision is reasonable. I begin my analysis with a brief overview of the legal framework governing the seizure and forfeiture in this case.

A. The applicable legal framework

[24] In Sandwidi, at paragraph 28, Justice Yvan Roy summarized the applicable legal framework, noting the purpose of the PCMLTFA: “It targets money laundering and the financing of terrorist activities by creating strict requirements for declaring financial transactions, besides of course establishing record keeping and client identification requirements for financial service providers, among others (s. 3 of the Act).”

[25] Persons entering Canada are required to report the importation of currency that has a value equal to or greater than the amount prescribed in the regulations (PCMLTFA, subsections 12(1) and (3)). Persons arriving in or departing from Canada are required to answer questions posed by a BSO truthfully (PCMLTFA, subsection 12(4)). Section 2 of the Cross-border Currency and Monetary Instruments Reporting Regulations SOR/2002-412 [Reporting Regulations] prescribes that $10,000 CAD or its equivalent in foreign currency triggers the reporting obligation under section 12 of the PCMLTFA.

[26] Where a BSO has reason to believe that the reporting obligation has been contravened, the officer may seize undeclared currency as forfeit. Where a prescribed penalty is paid, the currency shall be returned unless the BSO has reasonable grounds to suspect the currency is proceeds of crime (PCMLTFA, section 18).

[27] The person from whom currency has been seized or the lawful owner of the seized currency may request a decision from the Minister as to whether subsection 12(1) of the PCMLTFA was contravened (section 25). Where a decision from the Minister is requested, a notice of the circumstances of the seizure shall be served on the person requesting the decision and that person may then provide any evidence in relation to the matter (section 26).

[28] The Minister shall then determine whether there was a contravention of section 12 (PCMLTFA, section 27). Should the Minister determine there was a contravention, the Minister may, among other options, confirm the forfeiture (PCMLTFA, section 29).

[29] This legislative framework creates two reviewable decisions which must be challenged in separate proceedings. A challenge to the Minister’s decision that the PCMLTFA was contravened proceeds by way of action (section 30). Challenges to the penalty applied for that contravention proceed by way of judicial review pursuant to section 18.1 of the Federal Courts Act, RSC 1985, c F-7 (Hoang v Canada (Public Safety and Emergency Preparedness), 2017 FC 1133 at paras 7 and 8, citing Guillaume v Canada (Public Safety and Emergency Preparedness), 2013 FC 143 at para 37). The Applicants have chosen to pursue judicial review of the penalty decision confirming forfeiture of the currency seized.

[30] The relevant portions of the PCMLTFA and the Reporting Regulations are reproduced at Annex A for ease of reference.

B. No breach of procedural fairness

[31] The Applicants submit that they did explain the origin of the seized funds and argue that if the MD had any concerns relating to the credibility of the evidence the MD should have asked the Applicants to attend an interview. The failure to conduct an interview, they argue, was unfair. The Respondent submits the Applicants were given notice of the case to be met both during the enforcement action and during the ministerial review process; the requirements for fairness and natural justice were met.

[32] Contrary to the Applicants’ assertion, the MD’s decision was not one based on credibility concerns. Rather, the MD concluded the evidence submitted was insufficient to satisfy the Applicants’ burden. Where a decision maker “determines that the evidence, even if believed, does not meet the burden of proof, the case is not decided on credibility, but on the sufficiency of evidence. Conversely, if the evidence offered satisfies the burden of proof but is dismissed on other grounds, the [decision maker] is making a credibility finding” (Ansar v Canada (Citizenship and Immigration), 2019 FC 197 at para 24).

[33] In forfeiture reviews, it is well established that the Applicants have the burden of putting sufficient evidence before the MD to demonstrate the legitimate origin of seized funds (Sandwidi at para 63, citing Sebastiao v Canada (Public Safety and Emergency Preparedness), 2013 FC 527 at para 54). In this case, the Applicants were provided a Notice of Circumstances for Seizure that clearly sets out the requirement that the Applicants provide evidence demonstrating an identifiable link between the seized currency and a legitimate origin. The MD then requested further information from the Applicants in providing notice that the evidence submitted in response to the Notice of Circumstances for Seizure failed to demonstrate the lawful origin of the seized funds. In seeking further information, the MD’s concern was one of sufficiency, not credibility.

[34] Having made the Applicants aware of their burden and provided them an opportunity to submit evidence to demonstrate a legitimate origin for the seized funds, the MD was under no obligation to then hold an interview where of the view that insufficient evidence had been provided. The process was fair.

[35] I will now turn to the issue of whether the decision was reasonable.

C. The MD reasonably found that the applicants failed to show the funds originated from a legitimate source

[36] The Applicants have not challenged the MD’s conclusion that section 12 of the PCMLTFA was contravened. The sole issue is whether the MD reasonably concluded the Applicants had failed to demonstrate the seized currency comes from a legitimate source. The issue is not whether the MD can show reasonable grounds to suspect that the seized currency is proceeds of crime; the issue is whether the Applicants have satisfied the MD that the funds are not proceeds of crime (Sellathurai v Canada (Minister of Public Safety and Emergency Preparedness), 2008 FCA 255 at para 50).

[37] The evidence does demonstrate that the funds originated from Mr. Rihane’s bank accounts. However, a bank account is not a legitimate source of income: “it is possible that proceeds of crime can be funnelled through and withdrawn from a bank account” (Tran v Canada (Minister of Public Safety and Emergency Preparedness), 2013 FC 600 at para 26; Amari v Canada (Minister of Public Safety and Emergency Preparedness), 2014 FC 539 at para 27).

[38] The Applicant did advance an explanation for how the funds had been generated and the evidence was addressed by the MD.

[39] In considering the banking and tax documentation provided, the MD noted that the two accounts associated with the businesses the Applicants claimed as the legitimate source of the funds did not account for all the seized currency. The MD also found that the banking and tax documentation was insufficient to identify the origin of the funds in a number of the bank accounts that Mr. Rihane reported as the source of the seized funds.

[40] The MD noted that it was not clear why funds were withdrawn from accounts held with one financial institution, deposited in the accounts of another financial institution and then withdrawn again a few days later. Finally, the MD found that although there was evidence that Mr. Rihane had flown to meet with Mr. Khubieh and that Mr. Rihane spent the night prior to the seizure in a hotel, there was an absence of documentary evidence to indicate the seized funds had been provided to Mr. Khubieh by Mr. Rihane as claimed or to explain what happened to the $30,600.00 between its August 3, 2018 withdrawal and its August 9, 2018 seizure. At no point did the Applicants represent to the MD that the documentation requested in the Notice of Circumstances for Seizure or the MD’s request for further information did not exist.

[41] The MD reasonably concluded the Applicants’ explanation was not supported with verifiable evidence as required by the jurisprudence and as requested by the MD (Walsh v Canada (Public Safety and Emergency Preparedness), 2018 FC 883 at paras 28 and 29, citing Docherty v Canada (Minister of Public Safety and Emergency Preparedness), 2013 FCA 89 at para 19). I agree with the Respondent’s submissions to the effect that the evidence provided demonstrates the movement of funds but does not demonstrate the origin of those funds.

[42] Faced with such evidence and submissions, it was reasonable for the MD to find the Applicants had not provided sufficient evidence to establish a legitimate origin of the funds and that the seized currency should be held as forfeit.

VII. Conclusion

[43] The Application is dismissed.

[44] The Respondent seeks costs, arguing in oral submissions that an amount of $4,200 is appropriate and in accordance with the tariff.

[45] The Applicants argue that costs should not be awarded and request that the Court consider the Applicants’ circumstances, including the loss of Mr. Rihane’s savings.

[46] Having taken into account all of the circumstances, including the complexity of the issues raised and the Applicants’ failure to address deficiencies in the Application Record identified by the Respondent in advance of the hearing of this matter, costs in the amount of $1,500 inclusive of all disbursements and taxes are awarded to the Respondent.

 

JUDGMENT IN T-747-19

THIS COURT’S JUDGMENT is that:

1. The Application is dismissed;

2. The second Applicant in the style of cause is amended to correct a typographical error to the name of the second Applicant from Nabil Kubieh to Nabil Khubieh;

3. The Respondent in the style of cause is amended to correct the name of the Respondent from the Minister of Public Safety and Prepardness to the Minister of Public Safety and Emergency Preparedness; and

4. Costs to the Respondent in the amount of $1,500 inclusive of all disbursements and taxes.

“Patrick Gleeson”

ANNEX A

Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17

Loi sur le recyclage des produits de la criminalité et le financement des activités terroristres, LC 2000, ch 17

Cross-border Currency and Monetary Instruments Reporting Regulations, SOR/2002-412

Réglement sur la declaration des movements transfrontaliers d’espѐces et d’effets, DORS/2002-412

Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17

Loi sur le recyclage des produits de la criminalité et le financement des activités terroristes, LC 200, c 17

 

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:	T-747-19
STYLE OF CAUSE:	RAMEZ RIHANE NABIL KHUBIEH v THE MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS
PLACE OF HEARING:	BY VIDEOCONFERENCE
DATE OF HEARING:	JULY 5, 2021
JUDGMENT AND REASONS:	GLEESON J.
DATED:	august 25, 2021

APPEARANCES:

Lior Eisenfeld	For The APPLICANTS
Lorne Ptack	For The RESPONDENT

SOLICITORS OF RECORD:

Eisenfeld Immigration Law Office Ottawa, ON	For The APPLICANTS
Attorney General of Canada Ottawa, ON	For The RESPONDENT