Ottawa, Ontario, January 19, 2006
PRESENT: THE HONOURABLE MR. JUSTICE HARRINGTON
BETWEEN:
Plaintiff
and
THE MINISTER OF PUBLIC SAFETY
AND EMERGENCY PREPAREDNESS CANADA
Defendant
REASONS FOR JUDGMENT AND JUDGMENT
[1] Skander Tourki boarded the Air Canada flight bound from Montreal to Paris with several bundles of cash in his briefcase. He had $56,200 in U.S. currency, 10,015 Euros, 80 Moroccan Dirhams, 10 Deutsche Marks and $11,830 in Canadian currency. At exchange rates current at the time, 5 July 2003, it added up to CAN$102,642.33. Canada Customs had received a tip from the private company which operates the security check point that Mr. Tourki said he had $25,000 cash in his briefcase, being the proceeds of the sale of an automobile. Customs had him removed from the plane by the Montreal Police. His checked-in luggage was also removed. He was searched and the full amount of money in his briefcase was totted up. No other money was found. The Customs officer in charge decided that Mr. Tourki had violated the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and confiscated the entire amount as forfeit, being suspicious that it was derived from the proceeds of crime. Both the decision that he had failed to declare as required by law, and the decision to forfeit the money were confirmed on behalf of the defendant Minister.
[2] Mr. Tourki seeks the return of that money. The Minister takes the point that all the Court can do in this action is determine whether or not he had failed to make the required declaration. If the Court finds he made the declaration, the money will be returned. However, if the Court finds that he failed to declare, the Court cannot, at this time, in this action, deal with the Minister's decision to confirm the forfeiture of the money. The Minister does not say that her decision to forfeit is beyond judicial scrutiny. She submits that her decision may subsequently be the subject of a judicial review, a process which is quite different from a trial.
[3] For his part, Mr. Tourki disputes that interpretation of the Act. Both decisions of the Minister should be dealt within this action. To the extent there is case law to the contrary, and there is one, that case is wrongly decided and not binding. Furthermore, the relevant provisions of the Act are unconstitutional in that they are contrary to the Canadian Charter of Rights and Freedoms.
[4] Consequently, and in order to better appreciate the scope and nature of this action, consideration must be given to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
MONEY LAUNDERING ACT
[5] An Act to facilitate combating the laundering of proceeds of crime and combating the financing of terrorist activities, to establish the Financial Transactions and Reports Analysis Centre of Canada and to amend and repeal certain Acts in consequence, was assented to 29th, June, 2000. Its short title is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. I shall call it the Money Laundering Act for brevity, and also because the money was forfeited as being suspected proceeds of crime. The Minister acknowledges that this case has nothing to with the financing of terrorists.
[6] The Act includes six parts:
1. Record Keeping and Reporting of Suspicious Transactions
2. Reporting of Currency and Monetary Instruments
3. Financial Transactions and Reports Analysis Centre of Canada (Fintrac)
4. Regulations
5. Offences and Punishments
6. Transitional Provisions
[7] Fintrac has been established in an effort to minimize gaps in the paper trail of suspicious transactions by requiring banks and other entities to report. Although Part V sets out circumstances in which a person or entity could be guilty of an offence on indictment, or on summary conviction, no charge has been laid against Mr. Tourki.
[8] He has run afoul of Sections 12 through 30 of Part II. "Reporting of Currency and Monetary Instruments", appended hereto.
[9] Mr. Tourki was free to export or import cash in unlimited amounts. However, Section 12(1), and Regulations thereunder, required him to report to Customs in writing if he was importing or exporting cash or certain financial instruments of a value of $10,000 or more. These reports are sent to Fintrac for recording and record keeping purposes.
[10] Section 15 allows an officer to search any person who is about to leave Canada if he or she "suspects on reasonable grounds" that the person has secreted on or about his person currency in excess of $10,000 that has not been reported. In Mr. Tourki's case, the officers' suspicions were not only reasonable, but also well-founded.
[11] Section 18(1) allows the officer, if she believes Section 12(1) has been contravened, to seize as forfeit the currency. That was done in this case. Then, Section 18(2) goes on to provide that the money shall be returned on payment of a penalty in the prescribed amount, which penalty, depending on the circumstances set out in the Regulations, ranges from $250,00 to $5,000, irrespective of the amount not declared.
[12] However, the officer is not to return the money if she "has reasonable grounds to suspect that [it is] proceeds of crime within the meaning of subsection 462.3(1) of the Criminal Code..." Subsection 462.3(1) is found in Part XII.2 of the Code entitled Proceeds of Crime. In essence, the "Proceeds of Crime" means any property, benefit or advantage, within or without Canada derived directly or indirectly, as a result of the commission in Canada of an indictable offence, or an act or omission elsewhere that would have constituted an indictable offence if it had occurred in Canada.
[13] The decisions of the Customs officer that Mr. Tourki had failed to declare, and to forfeit the money are not directly reviewable by this Court on judicial review, as Section 24 of the Act provides for another recourse. Under Section 25, Mr. Tourki was entitled, and did request the Minister to decide whether Section 12(1) was contravened.
[14] The Minister makes that decision pursuant to Section 27. If she decides that Section 12(1) was not contravened, the money is returned pursuant to Section 28. However, if, as in this case, she decides that the section 12(1) was contravened, she may, pursuant to Section 29, return the money, with or without penalty, return any penalty in whole or in part, or confirm that the currency is forfeited to Her Majesty. She did the latter.
[15] Now we come to the crux of the debate as to the scope of this action. Section 30 provides that "a person who requests a decision of the Minister under Section 25 may ... appeal the decision by way of an (ordinary) action in the Federal Court..." However, Section 25 read with Sections 12(1) and 27 is limited to the decision as to whether or not Mr. Tourki failed to declare the currency. The consequences of a contravention appear to be subject to a completely separate decision under Section 29.
[16] Thus, the Minister submits that her decision to confirm the forfeiture of the money is beyond the scope of the present action. She acknowledges that Section 24 does not oust the superintending power of this Court and that a decision under Section 29 may be subject to judicial review in accordance with Sections 18 and 18.1 of the Federal Courts Act. There are some important distinctions between an action, and a judicial review by way of application. An action such as contemplated by Section 30 of the Act is a trial de novo. The Court owes no deference to the Customs Officer's suspicions or to the decision or decisions of the Minister. The Court's decision is based upon the evidence produced at trial. That evidence may not correspond with the evidence before the Minister. There may be new evidence, and some of the material before the Minister may not necessarily be before the Court.
[17] On the other hand, a judicial review is normally based on the material that was before the person whose decision is under review, and some deference is owed to that person in accordance with the functional and pragmatic approach to judicial review as summarized in such cases as Dr. Q v. College of Physicians and Surgeons of British Columbia [2003] 1 S.C.R. 226 and Law Society of New Brunswick v. Ryan [2003] 1 S.C.R. 247.
[18] In accordance with the respective contentions of the parties, Mr. Tourki intended to lead evidence not only as to the circumstances which would allow the Court to decide whether he had actually failed to declare, but also as to the provenance and intended end-use of the cash. The Minister objected taking the point that the evidence should simply be limited to whether or not he had failed to declare. As there is only one recent case on point and no actual trial under the sections of the Act relevant to this case, I allowed all of Mr. Tourki's evidence, under reserve of the Minister's general objection. Consequently, the Minister, subject to that objection also led evidence to cast suspicion as to the provenance of the money to justify her position that it was the proceeds of crime.
ISSUES
[19] There are four issues to address:
A. Did Mr. Tourki fail to report to Customs that he was exporting more than $10,000?
B. Is it open for the Court in this action to make a ruling on the Minister's decision to keep the money as "forfeit"?
C. Are the provisions of the Act relevant to this action ultra vires as violating the Charter?
D. If the decision to confirm forfeiture is beyond the scope of this action, should the Court nevertheless opine whether the evidence gave rise to reasonable grounds to suspect the money was the proceeds of crime?
A. Did Mr. Tourki fail to report to Customs that he was exporting more than $10,000?
[20] There is no doubt that Mr. Tourki knew he was carrying more than $10,000 cash. He readily made that admission to the two Customs Officers who interviewed him, Marie-Josée Simard, who was assisted by J. C. Premont. Mr. Premont testified that before Mr. Tourki left the airport in the early hours of 6 July 2003, he filled in the required form and had Mr. Tourki sign it. He gave no explanation as to why it was signed, other than to say that the completed form, together with the seizure receipt documents, were sent to Ottawa.
[21] Mr. Tourki submits that if the law is as harsh as the defendant makes it out to be, then it must be scrupulously followed to the letter. Since he filled out a form and gave it to a Customs officer before he left Canada he abided by the requirements of Section 12.
[22] Whatever Mr. Premont had in mind by having Mr. Tourki sign a declaration form (perhaps he thought it was an admission that the currency count set out in the receipt was correct), it does not and cannot serve as the declaration contemplated by Section 12 of the Act. Mr. Tourki had certainly gone beyond the point where he could have made a declaration as he was sitting on a plane on the tarmac. Section 15 provides that an officer may search persons who are about to leave Canada "at any time before their departure". This is a clear indication that the point of declaration and the point of departure are different. I have no hesitation in holding that the form signed by Mr. Tourki did not constitute a report in satisfaction of the obligation imposed upon him by Section 12.
[23] Mr. Tourki has another argument, a multi-faceted application of the principle of estoppel. Mr. Tourki claims he was not aware that the law required him to declare. Although he properly admits that ignorance of the law is no excuse, he asserts that that ignorance should be considered together with the Minister's failure to adequately publicise the law and to make Customs officers readily available, as well as the failure of the security guards to alert him to his obligation, while at the same time informing Customs that he was carrying a large amount of cash. In answer to the hypothetical question, he naturally said he would have declared had he been aware of his duty.
[24] I do not accept this latter point. During his interview with officers Simard and Premont, and at trial, he admitted that when he returned to Canada from a previous trip earlier in 2003 he had upon his person more than $10,000, and did not make a declaration. He even produced one of the forms that are given to incoming passengers to fill in before presenting to Canada Customs. It clearly states the obligation to report excessive currency.
[25] Part II of the Act had been proclaimed in force by publication in the Canada Gazette in January 2003. That is the only publicity required by law. The Customs officers also testified that there was a media publicity campaign and brochures were available at the airport. More particularly, there was a large sign at the entrance to the security area. Mr Tourki says he did not see that sign. Based on the evidence of officers Simard and Premont, I am satisfied on the balance of probabilities that the sign was there 5 July 2003, even though they only saw it before and after. In any event, there was no legal obligation that the sign be there.
[26] As to the role of the private security company, it had obligations under the Aeronautics Act to search for articles prohibited from being carried onboard a plane. It owed no duty to Canada Customs and no duty to Mr. Tourki. Even if Mr. Tourki has cause to complain that it should not have informed Customs without simultaneously informing him of his duty, which I find too far fetched, that issue is not before the Court. That tip certainly gave the Customs officers reason to suspect that he was about to leave the country without making the required declaration.
[27] It is incumbent upon the traveller to report. The law imposes a self-reporting system. The traveller must search and find the Customs office. Mr. Tourki says that there was no Customs office at the airport after he went through security. That is only partially true. He could have left the security area on the departure level and gone down to the Customs office on the arrival level and then gone through security again. While a Customs kiosk in the departure area would be more user friendly, there was no legal requirement that such a kiosk be there.
[28] Nor can Mr. Tourki take any comfort in the fact that incoming passengers by plane are given landing cards which alert them to the obligation to report excessive currency, while outgoing airplane passengers are not. He presented no evidence that the same holds true for passengers leaving Canada for or returning from the United States by automobile.
[29] I hold that Mr. Tourki failed to report that he was exporting $10,000 or more, in currency, as required by Section 12(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
B. Is it open for the Court in this action to make a ruling on the Minister's decision to keep the money as "forfeit"?
[30] As mentioned earlier in these reasons, the Minister takes the position that this Court's jurisdiction under Subsection 30(1) of the Money Laundering Act is simply to determine whether or not Mr. Tourki failed to make the required declaration. Having so found, her decision to confirm the forfeiture may be subject to a judicial review, but is beyond the purview of this action. She took that point in her statement of defence, which since then has been bolstered by the decision of Madam Justice Layden-Stevenson in Dokaj v. Canada (Minister of National Revenue-MNR) 2005 FC 1437, [2005] F.C.J. No. 1783 (QL).
[31] For his part, Maître Choquette on behalf of Mr. Tourki, submits that it is so illogical to separate the contravention from the consequences that Parliament could not possibly have had that intention. It follows, according to him, that Dokaj, supra, is wrongly decided and not being a decision of a higher Court is not binding upon me. Once the Minister declares that Section 12(1) was contravened, she must decide what to do, i.e. keep or return the money or the penalty, in whole or in part. Section 30 gives Mr. Tourki 90 days to appeal her decision by way of an action, while Section 18.1 of the Federal Courts Act requires an application for judicial review to be taken within 30 days of the decision. What is the point of seeking judicial review of a decision on sanctions, while in due course the very basis of that sanction, i.e. contravention of Section 12 of the Act, may be set aside?
[32] There is much to be said for this position. For instance, Mr. Justice Gonthier speaking for the Supreme Court in Nova Scotia(Workers' Compensation Board) v. Martin[2003] 2 S.C.R. 504 said at paragraph 29: "...Canadians should be entitled to assert the rights and freedoms that the Constitution guarantees them in the most accessible forum available, without the need for parallel proceedings before the courts." More recently in Vaughan v. Canada [2005] 1 S.C.R. 146, the Supreme Court, in dealing with the Public Service Staff Relations Act, concluded that the language of that Act, and the context of the dispute did not amount to an explicit ouster of Federal Court jurisdiction. Nevertheless, it held that the Court should not, as a matter of judicial discretion, get involved.
[33] No matter how logical and preferable it would be that all legal consequences arising out of the same incident be determined in the same place and at the same time, Parliament within its fields of legislative competence, subject to the Charter, can do whatever it likes.
[34] The Act contemplates various judicial proceedings, some in the Federal Court at large, some before its Chief Justice or judges specially designated by him, some before the Federal Court of Appeal, and some before courts administered by the provinces. There has been no effort to limit proceedings to a specific forum. I must conclude that Section 30 means exactly what it says. The result is that this action is limited to a determination as to whether Mr. Tourki failed to report to Customs as required by Section 12.
[35] It is not necessary for me to consider the circumstances in which a judge need not follow a decision of another judge of the same Court. Madam Justice Layden-Stevenson made a thorough analysis of the Act, considered its purpose, considered the principles of statutory interpretation and drew appropriate parallels from the source and inspiration of the forfeiture provisions of the Act, which are to be found in the Customs Act. She drew on a long line of authority including the decision of Mr. Justice MacKay in ACL Canada Inc. v. Canada (1993) 68 F.T.R. 180, (1993) 107 D.L.R. (4th) 736, [1993] F.C.J. No. 1048 (QL). See paragraphs 42 and 43 of her reasons.
[36] There is nothing for me to add, except to say that I wholeheartedly agree with her analysis.
C. Are the provisions of the Act relevant to this action ultra vires as violating the Charter?
[37] The opening premise is that Parliament is supreme. As stated in the tenth edition of Dicey, Introduction to the Study of the Law of the Constitution, at pages 39 and 40 "the principle of Parliamentary sovereignty means neither more nor less than this, namely, that Parliament thus defined has, under the English Constitution, the right to make or unmake any law whatever; and, further, that no person or body is recognized by the Law of England as having a right to override or set aside the legislation of Parliament".
[38] There are two fundamental limitations on that premise in Canada. The first is that Canada is a federal state with jurisdiction to legislate divided between the Federal Parliament and the Provincial Legislatures. The second is that an Act passed by the appropriate legislative body may not violate the Canadian Charter of Rights and Freedoms. It falls upon the Courts to decide if an act is ultra vires in either of these two senses.
[39] Although Mr. Tourki does not claim that the Act is unconstitutional because it was enacted by Parliament, rather than by a provincial legislature, it is nevertheless helpful to constitutionally situate the forfeiture provisions of the Money Laundering Act, which he disputes.
[40] It should be noted that Parliament in enacting the Act was far more lenient than past Parliaments or the Imperial Parliament of yesteryear. In the past, if a Customs Act or an Excise Act was violated, there was forfeiture, plain and simple. The forfeiture, like the arrest of maritime property in an admiralty action, and the determination of a person's status, is a proceeding in rem. Fault, complicity or mens rea on the part of the owner of the property forfeited is not a necessary component. Forfeiture as a deterrent to the importation of prohibited goods, or goods on which duty has not been paid, goes back centuries. For instance, the Customs Act which was before the Court in Croft v. Dunphy, [1933] A.C. 156 (JCPC), [1933] 1 D.L.R. 225, provided that if dutiable or prohibited goods were found on a vessel "hovering in territorial waters of Canada... such vessel with her apparel, rigging, tackle, furniture, store, and cargo shall be seized and forfeited."
[41] A prime feature of in rem proceedings is that there need not be any personal blameworthiness or breach of a legal obligation on the part of the owner of the property. The original action in rem against a ship gave effect to a maritime lien, a lien which may have arisen without fault on the part of the shipowner. A ship may be liable for a collision, even though her owner is not. At the time she may have been chartered by a demise, her possession being in the hands of a third party. This type of ancient maritime lien is still found today in Sections 22 and 43 of the Federal Courts Act.
[42] As stated by Lord Watson in the Henrich Björn (1886) 11 App. Cas. 270 at pages 276-277:
"The action is in rem, that being, as I understand the term, a proceeding directed against a ship or other chattel in which the plaintiff seeks either to have the res adjudged to him in property or possession, or to have it sold, under the authority of the Court, and the proceeds, or part thereof, adjudged to him in satisfaction of his pecuniary claims."
[43] Forfeiture, like the action in rem, is a proceeding by which a thing relating to the commission of an offence, such as goods not declared, or the carrying vehicle, becomes vested in Her Majesty by operation of law, without the necessity of a judgment. Section 23 of the Money Laundering Act provides that the currency or monetary instruments seized as forfeit are forfeited from the time they were seized, and no other act or proceeding after the forfeiture is necessary to give effect thereto.
[44] Whether the Money Laundering Act be characterized as relating to criminal law, trade and commerce, customs or currency, all federal legislative classes of subject under Section 91 of the Constitution, the Act falls within the general rubric of Section 91 "peace, order and good government".
[45] As stated by Newcombe J. in Dunphy v. Croft, [1931] S.C.R.531 at page 540:
"When, therefore, a British subject and resident and being in Canada sets himself up to defeat the Customs Laws by contriving to evade them, to defraud the revenue and illegally to introduce into the country a prohibited commodity which has been found a menace to the national life, threatening disaster; and when the Parliament of Canada, having the powers to which I have alluded, finds a remedy in the enactments which the appellant complains, is that not legislation... for the peace, order and good government of Canada?"
[46] Newcombe J. was speaking in dissent in that case which was limited to determining the extraterritorial effect of Canada's Customs Act. He was upheld by the Privy Council (Croft v. Dunphy, supra). Lord MacMillan went through the history of the Hovering Acts and stated "the measures against "hovering" were no doubt enacted by the Imperial Parliament because they were deemed necessary to render anti-smuggling legislation effective."
[47] Drug smuggling and terrorist activities are a scourge of national and international life. The reasons for forfeiture are just as valid now as they were then.
[48] Turning now to the Charter, Mr. Tourki argues that Section 12 of the Money Laundering Act which obliged him to report, and the enforcement provisions of Part II of the Act, Sections 15, 16, 18, 19 and 22 through 29 are unconstitutional in that they violate Sections 7, 8 and Subsection 11 d) of the Canadian Charter of Rights and Freedoms and that Section 1 is not applicable because no limits upon those rights can be reasonably justified.
[49] The relevant Sections of the Charter provide:
| 1. The Canadian Charter of Rights and Freedoms guarantees the rights and freedoms set out in it subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.
(...) |
1. La Charte canadienne des droits et libertés garantit les droits et libertés qui y sont énoncés. Ils ne peuvent être restreints que par une règle de droit, dans des limites qui soient raisonnables et dont la justification puisse se démontrer dans le cadre d'une société libre et démocratique.
...
|
| 7. Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.
(...) |
7. Chacun a droit à la vie, à la liberté et à la sécurité de sa personne; il ne peut être porté atteinte à ce droit qu'en conformité avec les principes de justice fondamentale.
...
|
| 8. Everyone has the right to be secure against unreasonable search or seizure.
(...) |
8. Chacun a droit à la protection contre les fouilles, les perquisitions ou les saisies abusives.
...
|
| 11. Any person charged with an offence has the right (...) d) to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal; |
11. Tout inculpé a le droit : d) d'être présumé innocent tant qu'il n'est pas déclaré coupable, conformément à la loi, par un tribunal indépendant et impartial à l'issue d'un procès public et équitable; |
[50] The cases upon which Mr. Tourki relies are R. v. Oakes, [1986] 1 S.C.R. 103 and R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606. Oakes struck down a portion of the Narcotic Control Act which raised a presumption that possession of a drug was for the purposes of trafficking. The Court held that the scourge of trafficking did not justify a limitation upon Mr. Oakes' rights in accordance with Section 1. The offending provisions were more than a "minimum impairment" upon his liberty.
[51] The Nova Scotia Pharmaceutical, supra, case held that vagueness can be raised under Section 7 of the Charter. It is a principle of fundamental justice that laws must not be too vague. A law will be found unconstitutional if it so lacks in precision as not to give sufficient guidance for legal debate.
[52] Mr. Tourki has compressed the reporting obligation and enforcement procedures together so as to argue that the law presumes him guilty of an offense, a law which is too vague because enforcement is based upon mere suspicion. I cannot agree.
[53] The presumption of innocence, which existed long before the Charter, is only available to persons charged with an offence. Section 11 has no application because Mr. Tourki has not been charged with an offence. Although Part V of the Act is entitled "Offences and Punishment", the forfeiture proceedings presently before the Court are limited to Part II.
[54] As aforesaid, forfeiture proceedings are directed against a thing, not proceedings against a person. The application of the Charter to in rem proceedings was considered by the Supreme Court in Martineau v. Canada(Minister of National Revenue-MNR) [2004] 3 S.C.R. 737. That case dealt an "ascertained" forfeiture, a proceeding directed against a substituted res. The Court held that the relevant provisions of the Customs Act, very similar to the Act in issue, are not penal in nature. That Act like this Act, has a self-reporting system with both civil and penal enforcement mechanisms.
[55] The search and seizure provisions of the Act are not unreasonable. Not only have they been around for centuries, as per Croft v. Dunphy, supra, they are part of our border control and necessary to protect Canada's sovereignty. As noted by Professor Hogg in Constitutional Law of Canada, 4th edition, at section 45.4, the concept of unreasonable search or seizure has gone from protection of property to protection of privacy. In R. v. Simmons [1988] 2 S.C.R. 495, the appellant was obliged to undergo a strip search at Customs. The Supreme Court held that the degree of personal privacy reasonably expected at Customs is lower than in most other situations. Sovereign states have the right to control both who and what enters their boundaries. Travelers seeking to cross national boundaries fully expect to be subject to a screening process. Physical searches of luggage and of the person are accepted aspects of that process where they are grounds for suspecting that a person has made a false declaration or is transporting prohibited goods.
[56] Finally, as to "vagueness" the law is crystal clear. If you do not declare, the Customs officer is entitled to forfeit that which should have been declared. It is as simple as that.
[57] To conclude on this point, the Act is constitutional, and does not violate the Charter.
D. If the decision to confirm forfeiture is beyond the scope of this action, should the Court nevertheless opine whether the evidence gave rise to reasonable grounds to suspect the money was the proceeds of crime?
[58] As I have held that the decision of the Minister to confirm the forfeiture is beyond the scope of this action, it follows that I must uphold the Minister's objection to a great deal of the evidence led on behalf of Mr. Tourki, on the grounds of relevancy. None of the evidence of Abdel Kader Hassouna and Cherikan Tourki, the plaintiff's brothers, is relevant as it deals with the provenance of the money and its intended end-use. Likewise, the exhibits relating to a family estate in Tunisia are not relevant either.
[59] That being said, in the event that I am wrong and the Minister's decision to confirm the forfeiture is also the subject of this appeal, I am of the opinion, based on the evidence at trial, that there are no reasonable grounds to suspect that the $102,642.33 or any part thereof are the proceeds of crime within the meaning of Section 462.3(1) of the Criminal Code. In reaching that opinion, it was not necessary to consider the burden of proof and the threshold which must be reached before it can be said that suspicions are supported by reasonable grounds.
[60] The money came from four sources. Abdel Kader Hassouna provided some US$52,000 and Cherikan Tourki CAN$12,000. The balance came from the plaintiff, and his mother who lives in Tunisia. Those four, together with other relatives, hold a property in Tunisia in undivided ownership. The intention was to buy out some of the other relatives. The transcript of land registry indicates that some steps had already been taken before July 2003 to reduce the number of owners.
[61] Abdel Kader Hassouna operates a garage in Montreal, largely on a cash basis. Many of his customers, particularly Haitian taxi drivers, often deal in U.S. cash. The $52,000 in U.S. currency represents savings during a three year period. It is no crime to deal in US cash. The defendant did not even suggest that the money was undeclared for income tax purposes.
[62] Cherikan Tourki operates a bar. The $12,000 in Canadian currency represented his savings. In 1999 he pleaded guilty, against a fine, to possession and trafficking of drugs. He claims he only pleaded guilty because the drugs were found in his establishment. He is not particularly truthful as he lied in one, if not both, of the affidavits filed as court exhibits. Nevertheless, there were no grounds whatsoever put before the Court to support the proposition that the $12,000 in Canadian currency represented proceeds of crime.
[63] Skander Tourki, like his two brothers, is a Canadian citizen. He immigrated here in 1982. He is not an ideal citizen. He has worked little, and is a welfare fraud. He is also a braggart, and somewhat economical with the truth. He takes welfare cheques, while pretending to be a rich man. However, it is not his character which is on trial, it is the money in his possession which is on trial.
[64] Some of his money came from an unofficial currency exchange business he operated with his mother. The way it worked was this. A number of Tunisian students, of wealthy parents, are studying in Montreal .Tunisian currency restrictions are such that their parents cannot transfer them enough money to accommodate the lifestyle to which they have become accustomed. If a student needed, say $10,000, his parents would pay Mr. Tourki's mother the local equivalent of $10,500. Mr. Tourki would then give the student $9,500 in Canadian currency, or sometimes in part by buying clothing on his credit cards.
[65] Mr. Tourki spoke of a profit of some 10% to 15%. However, no evidence was led as to whether this was on the official rate, or on the black market rate. While one may have reasonable grounds to suspect certain facts, one cannot have reasonable grounds to suspect the state of the law. The definition of a crime is a matter of law. The Supreme Court recently dealt with "reasonable grounds to believe" that a Crime against humanity had been committed. See Mugesera v. Canada(Minister of Citizenship and Immigration) 2005 SCC 40, [2005] S.C.J. No. 39 (QL), particularly at paragraphs 114-117. Based on the evidence before me, it is not necessary to compare "reasonable grounds to believe" with "reasonable grounds to suspect". In either case "reasonable grounds" requires some sort of an objective basis.
[66] The Court heard three witnesses as to the events of 5 July 2003, Skander Tourki and Customs officers Simard and Premont. To the extent there is discrepancy, the Court prefers the evidence of officers Simard and Premont, who also prepared contemporaneous reports, which were filed. In addition, the notes of an interview Mr. Tourki had with other Customs officers a few days later were filed by consent, as was his entire examination for discovery. Although the details vary somewhat, this may well be accounted for by the fact that there were different interlocutors asking different questions at different times. Mr. Tourki's essential story as to the provenance of the money, and its intended end-use was reasonably consistent.
[67] Cash, particularly US cash, was preferable in Tunisia. The exchange rate was better, and Mr. Tourki was candid enough to say that he hoped to make a few thousand extra dollars on the black market. He testified that although there were severe restrictions on the amount of cash that can be brought in and out of Tunisia, he personally had no difficulty. Perhaps he was too delicate to explain exactly why he had no problem getting the cash by Customs officers there. However, Tunisia's fiscal laws are none of our concern.
[68] Customs officers Simard and Premont testified that Mr. Tourki changed his story at the outset as to exactly how much money he had. However, it was conceded that concealment was minimum. The Regulations only call for a fine of $5,000 if one is hiding the cash in a false bottom of a trunk!
[69] He appeared nervous. I imagine most people hauled off a plane would be nervous. He must have been wondering how on earth he was going to explain this to his big brother whose US$52,000 was seized.
[70] Customs officer Simard was of the view that the money represented the proceeds of crime because she thought it was illegal for an individual to lend money at interest. She was wrong in law. Customs officers have been given no special training by the RCMP in what to look for in deciding whether or not there are reasonable grounds to suspect.
[71] It has been suggested that the money forfeited is the proceeds of crime because Mr. Tourki was receiving a payment of interest at a criminal rate, being a rate in excess of 60% per annum, the whole contrary to Section 347 of the Criminal Code. The basis of loan sharking is that there be an actual loan, which is broadly defined as being credit advanced. Interest within the meaning of the Section includes all charges and expenses including fees and commissions. However, no analysis whatsoever was presented to the Court, such as evidence from a Fellow of the Canadian Institute of Actuaries calculating the effective annual rate of interest, as provided for in Section 347(4). No reasonable grounds whatever have been advanced to suggest that some of the money represented the proceeds of loan sharking.
[72] The Minister called Richard Reynolds from the RCMP as an expert in money laundering and terrorist financing. However, his testimony was not aimed at the $102,642.33 in this case. Rather, he was called on the Charter issue. Had I found that the act prima facie violated Sections 7, 8 or 11, it would have been necessary to consider whether the act was nevertheless a reasonable limit prescribed by law as justified in a free and democratic society. Since I found that Sections 7, 8 and 11 were not violated, it was not necessary to consider Section 1.
CONCLUSION AND COSTS
[73] This action is limited by the language of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to an appeal by way of a trial de novo of the Minister's decision that the plaintiff had violated Section 12(1) of that Act. I find that the plaintiff, Skander Tourki, had failed to report to Customs that he was exporting currency of a value of at least $10,000, contrary to the requirements of Section 12(1) of the Act, and the Regulations thereunder.
[74] The provisions of the Act covered by the notice of a constitutional question are within the legislative power of Parliament and do not violate the Canadian Charter of Rights and Freedoms.
[75] The Minister shall have her costs.
JUDGMENT
THIS COURT HEREBY ORDERS AND ADJUDGES that: the action is dismissed with costs.
"Sean Harrington"
JUDGE
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-903-04
STYLE OF CAUSE: Skander Tourki v. The Minister of Public Safety and Emergency Preparedness Canada
PLACE OF HEARING: MONTREAL, QUEBEC
DATES OF HEARING: DECEMBER 12-13, 2005
AND ORDER: HARRINGTON J.
APPEARANCES:
| Jérôme Choquette, Q.C. Jean-Stéphane Kourie |
FOR THE PLAINTIFF |
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| Marc Ribiero Jacques Mimar Frederic Paquin |
FOR THE DEFENDANT |
SOLICITORS OF RECORD:
| Choquette, Beaupré, Rhéaume Montreal, Quebec |
FOR THE PLAINTIFF |
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| John H. Sims, Q.C. Deputy Attorney General of Canada |
FOR THE DEFENDANT |
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