Date: 20040326
Docket: IMM-5606-01
Citation: 2004 FC 463
Ottawa, Ontario, this 26th day of March, 2004
Present: The Honourable Justice James Russell
BETWEEN:
XI HUI MA
Applicant
and
THE MINISTER OF CITIZENSHIP AND IMMIGRATION
Respondent
REASONS FOR ORDER AND ORDER
[1] This is an application for judicial review of a decision ("Decision") of a visa officer ("Visa Officer"), dated October 30, 2001 dismissing the application of Xi Hui Ma ("Applicant") for permanent residence ("Application").
BACKGROUND
General
[2] The Applicant graduated from Jiangyin Diesel Engine Factory Technology School in 1976. Upon graduation, he was assigned to Jiangyin Metallurgical Machinery Factory in Jiangyin city in China, where he advanced from a metallurgical worker to a workshop director and, subsequently, to a Factory Deputy Director in charge of sales and marketing development.
[3] In 1987, the Applicant was appointed as a section manager of Jiangyin Agricultural, Industrial and Commercial Joint Corporation. There he was responsible for marketing and public relations. Essentially, he promoted the sales of the corporation to increase its customer base.
[4] In 1990, the Corporation underwent restructuring and was renamed Jiangyin Huaye Steel Pipe Company ("HSPC"). It took the structure of a collective enterprise under the jurisdiction of Jiangyin Sanguang Town Government ("Town Government"). HSPC is primarily engaged in the trade of various types and specifications of steel pipes. The Applicant is employed at HSPC as the Sales Manager. His responsibilities included, among many other things, strategy development and decision-making for the company.
[5] The Applicant advanced his education by completing a two-year course at the Wuxi Light Industry College in 1996.
The Applicant's Cheng Bao Agreement
[6] The Applicant entered into a management agreement ("Cheng Bao Agreement") with the Town Government for 1996-1998. Contractual management, or a cheng bao agreement, is a system used by a state-owned enterprise in China wherein all or a part of its operations and management rights are handed to a contractor for a set period of time. During this period, the contractor assumes all the operational risks and can retain the operational profits as a return after a fixed management fee is paid to the registered owner of the business.
[7] Under the Applicant's control and direction, HSPC increased its net income as well as net equity. The Applicant submits that the KPMG Business Performance Assessment (the "KPMG Report") which was compiled as part of his application, confirms that the Applicant's share of HSPC's equity is 100% according to the contract, and that he is the contractor under the Cheng Bao Agreement.
[8] KPMG assessment officers visited HSPC, interviewed the Applicant and other staff, made inquiries with the company bank manager, reviewed and assessed HSPC's financial statements for 1996, 1997, and 1998, and collated and summarized the information. The Applicant submits that KPMG is a highly reputable accounting company that performs thorough investigations.
[9] The Applicant also retained Wuxi Certified Public Accountant Co. Ltd. ("Wuxi") to prepare an updated Business Performance Assessment Report ("Wuxi Report"). The Wuxi Report confirmed that the Applicant's Cheng Bao Agreement was extended for another three-year term based on similar conditions, and that the net equity of HSPC had increased from 1999 to 2000. The Wuxi Report also confirmed that the Applicant's share of the HSPC equity was 100%.
[10] The Applicant declared his net worth to be CDN $1,253,963, which included CDN $298,111 in fixed bank deposits. The Applicant submitted a number of supporting business documents to the Visa Officer to substantiate his Application. All of HSPC's financial statements were submitted to local officials for taxation before being submitted to the Visa Officer.
Nature of the Cheng Bao Agreement
[11] The Applicant submits that, under the Cheng Bao Agreement in question, he was responsible for managing all the operational activities of HSPC. In effect, the possession of HSPC transferred to the Applicant for the three year period from January 1996 until December 1998. The Applicant submits that this kind of arrangement generally serves as a form of corporate rehabilitation in China, by which business people take over a company from the government, assume operational risks and retain operational profits, and then return the company to the government in a repaired state.
[12] According to the contractual arrangement in this case, the Applicant submits that the office building and equipment facility were transferred to the Applicant in exchange for fixed annual fees of RMB 300 000 and management fees payable to the Town Government based on sales revenue. In addition, the Applicant was obliged to pay a surcharge for education and contribute to an agriculture fund. After deducting such fees, taxes and levies, the Applicant was entitled to any leftover profits of HSPC.
Entitlement to Funds
[13] The Applicant submits that the KPMG Report, the Wuxi Report, and the Cheng Bao Agreement itself, all confirm the Applicant's entitlement to the leftover profits of HSPC. The Applicant also submits that a number of sources confirm that he is the holder of the Cheng Bao Agreement.
[14] The Applicant agrees that neither of the Cheng Bao Agreements found in the Certified Tribunal Record specifically name the Applicant as the contractor. However, the Applicant argues that both the KPMG Report and the Wuxi Report explain the custom surrounding cheng bao agreements in China and that the signatory is, in fact, the contractor. Moreover, the Applicant submits that neither accounting firm would risk naming the Applicant as the contractor unless he really was the contractor under the Cheng Bao Agreement.
DECISION UNDER REVIEW
[15] The Applicant submitted his application for permanent residence in Canada under the Investor category in March, 1999. He also made an investment of CDN $250,000 into the New Brunswick Government Economic Development Fund II Inc..
[16] As part of the application, the Applicant was required to submit documents which could be replaced by a Business Performance Assessment. The application kit ("Kit") for the Business Category required applicants to submit a number of documents in support of their applications. Page C-5 of the Kit stated as follows:
In place of items mentioned from 18 to 21 or 23 to 28 inclusive, you may instead submit a Business Performance Assessment done by an international accounting firm ... The following accountancy firms are able to provide Business Performance Assessments ... KPMG Peat Marwick ..."
[17] The Application kit for Business Class - Hong Kong indicates that the following may submit a Business Performance Assessment:
Managers who have not owned a business must provide:
18. A notarized sworn statement and supporting documents which attests to the origin/source or the manner in which your starting capital and/or your current assets have been accumulated (e.g., work revenues, salary, bonus, business revenue, dividends, profits, capital gains, contractual agreements, etc.).
Sole Proprietors and Partners of Unincorporated Business must also provide:
19. Local government certified Business Registration, application for business registration and capital verification report (for China).
20. Copies of contractual agreements to operate a business if applicable.
21. Financial statements (including profit and loss statements) prepared by a certified accounting firm for most recent three years, and for previously owned businesses.
23. A notarized sworn statement and supporting documents which attests to the origin / source or the manner in which your starting capital and / or your current assets have been accumulated (e.g., work revenues, salary, bonus, business revenues, dividends, profits, capital gains, contractual agreements, etc.).
Shareholders and Directors of Limited Companies must also provide:
24. Local government certifies Business Registration and application for business registration.
25. List of shareholders and/or capital verification report (for China)
26. Articles of incorporation or articles of association.
27. Copies of contractual agreement to operate a business if applicable.
28. Financial statements (including profit and loss statements) prepared by a certified accounting firm for most recent three years, and for previously owned businesses.
[18] The Applicant submitted a Business Performance Assessment performed by KPMG on September 29, 1999. He supplemented this by submitting an updated Business Performance Assessment prepared by Wuxi before his interview.
[19] The Visa Officer refused the Applicant by letter dated October 30, 2001. In her refusal letter, she stated that the Applicant did not meet the definition of "investor" because she was not satisfied on the following matters:
The documents that you have provided to me do not indicate that you are the holder of the cheng bao agreement, but that you are merely the legal representative of the the (sic)company which holds the cheng bao. You have indicated to me that you hold no shares in that company. As such, you have failed to establish that the profits held within the company are yours. Moreover, you provided me with no evidence or documents to substantiate the amount of the stated undistributed profits. Since you indicated that a good portion of your personal net worth rests in the company, you have failed to satisfy me that you have accumulated the requisite amount of funds. In addition, you were unable to give me an accurate description of the terms and conditions of the cheng bao contract. These concerns were shared with you at the interview, and you were given ample opportunity to address them.
[20] The Applicant explained to the Visa Officer that it is customary to use the name of HSPC on the Cheng Bao Agreement, but the person who signs the contract is the holder of the cheng bao interests. The Applicant says that the Visa Officer did not understand the legal nature of the Cheng Bao Agreement in this regard.
[21] In his written materials, the Applicant alleged that the interview convocation letter did not indicate to the Applicant that he would have to be familiar with details of contracts and financial information. The Applicant, therefore, argued that he had a legitimate expectation that he did not have to concern himself with such matters. At the hearing of this matter in Toronto on November 27, 2003, the Applicant abandoned this argument.
[22] The Visa Officer states in her affidavit that the documents submitted by the Applicant did not demonstrate that the Applicant was, in fact, entitled to the profits of HSPC. She based her conclusion on her understanding that "none of the documentation provided by the Applicant listed him as a party to the cheng bao agreement." The Applicant was not cross-examined on his affidavit.
[23] The Applicant submits that he addressed this concern of the Visa Officer at the interview. He explained to her that the government does own HSPC but, as signatory to the Cheng Bao Agreement, he was considered the subcontractor and as such was entitled to the profits for the duration of the contractual period.
[24] The Applicant submits that the KPMG Report clarifies how the ownership of HSPC is divided during the contractual period. The Applicant also notes that the Wuxi Report confirmed the Applicant's contractual ownership of HSPC and entitlement to profits during the second contractual period. The Applicant notes that both accounting reports confirm that the Applicant's share in equity was 100%.
RELEVANT LEGISLATION
[25] Investors are defined in s. 2(1) of the Immigration Regulations, 1978, as follows:
| "investor" means an immigrant who
(a) has successfully operated, controlled or directed a business,
(b) indicates to the Minister, in writing, that they intend to make an investment or have made an investment, and
(c) has a net worth, accumulated by their own endeavours, of at least $800,000; |
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"investisseur" Immigrant qui répond aux critères suivants:
a) il a exploité, contrôlé ou dirigé avec succès une entreprise;
b) il a indiqué par écrit au ministre qu'il a fait ou a l'intention de faire un placement;
c) il possède un avoir net d'au moins 800 000$, accumulé par ses propres efforts. |
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[26] Section 8(1) of the Immigration Act, R.S.C. 1985, c. I-2 indicates as follows:
| 8. (1) Where a person seeks to come into Canada, the burden of proving that that person has a right to come into Canada or that his admission would not be contrary to this Act or the regulations rests on that person. |
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8. (1) Il incombe à quiconque cherche à entrer au Canada de prouver qu'il en a le droit ou que le fait d'y être admis ne contreviendrait pas à la présente loi ni à ses règlements. |
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[27] Section 9(3) of the Immigration Act provides as follows:
| (3) Every person shall answer truthfully all questions put to that person by a visa officer and shall produce such documentation as may be required by the visa officer for the purpose of establishing that his admission would not be contrary to this Act or the regulations. |
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(3) Toute personne doit répondre franchement aux questions de l'agent des visas et produire toutes les pièces qu'exige celui-ci pour établir que son admission ne contreviendrait pas à la présente loi ni à ses règlements. |
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ISSUES
[28] The issues raised by the Applicant are as follows:
Did the Visa Officer have to address the contents of the business performance assessment reports and rationalize or deal with any contradictions between her assessment and the reports?
Did the Visa Officer err in finding that the Applicant had to "control operate and direct" (COD) the company as opposed to "control operate or direct"?
ARGUMENTS
Applicant
What is the applicable standard of review to apply to the Decision of the Visa Officer?
[29] The Applicant submits that the Visa Officer's experience and knowledge in business applications was limited and that she was not qualified enough to properly assess the application. The Applicant submits that this is evident from the Visa Officer's blatant disregard of the Business Performance Assessment Reports submitted by the Applicant in accordance with the Kit.
[30] The Applicant argues that it is a reasonable expectation that a visa officer will have adequate familiarity with, and an understanding of, the applicable regulations. The evidence does not demonstrate that the Visa Officer possessed such an understanding in this case. Moreover, the Applicant submits that the Visa Officer had no business education or business experience herself. As a result, the standard of review of the Visa Officer's Decision in this case should be correctness.
Did the Visa Officer have to address the contents of the Business Performance Assessment Report and rationalize or deal with any contradictions between her assessment and the reports?
[31] The Applicant submits that both the KPMG Report and Wuxi Report confirm the details of the Applicant's 100% share in HSPC's equity for the contractual period. The Applicant also submits that there was far too much detail in both reports indicating the Applicant's management participation as a director and a contractor for the Visa Officer to ignore.
[32] The Applicant argues that in a situation such as this one, where the financial information that the Visa Officer would normally require can be replaced by a Business Performance Assessment Report, and where an assessment can be performed by a large and reputable accounting firm, the evidence should be considered weighty. The Applicant submits that the Visa Officer is not bound to accept this information, but she is expected to consider it.
[33] The Applicant notes that Cullen J. in Poste v. Canada (Minister of Citizenship and Immigration), [1997] F.C.J. No. 1805 (T.D.) commented on this issue at para. 61:
When a government body such as Immigration requests information of an individual, it is duty-bound to consider that information when received. This is especially so in the case where the information requested is in the form of expert opinion, which is time-consuming as well as costly to acquire. If a decision is rendered that runs contrary to the information requested, the decision maker must at least make reference to the contrary information, and account for its rejection. To be put bluntly, if Immigration requests certain medical reports, receives two positive medical reports and one negative report, and a medical assessment is rendered apparently solely on the negative medical report, reasons must be given as to why the positive reports are absent from the analysis. Even if the decision makers had considered the requested information, and had placed it in the context of all the circumstances of the case, there is nothing on the face of the record communicated to the applicant to indicate that consideration of the favourable material was seriously made. There is no appearance of justice. The decision makers thus failed the applicant in these basic duties of procedural fairness and natural justice in this case.
[34] The Applicant submits that where there are no reasons for not paying attention to the documents submitted a denial of natural justice occurs. Further, the Applicant says that if the reports indicate an opinion that is contrary to the decision reached by the Visa Officer, then the Visa Officer must address the contrary decision and give reasons for not accepting it. That did not happen in this case.
Did the Visa Officer err in finding that the Applicant had to "control operate and direct" (COD) his company as opposed to "control operate or direct"?
[35] The Applicant submits that it is clear from the cross-examination of the Visa Officer that the incorrect test for "control, operate or direct" was applied. The Visa Officer stated that, unless the Applicant did not meet all three components of the test, he failed the entire test. This is despite the fact that the Visa Officer admits in cross examination she is aware that the test is disjunctive.
[36] The Applicant points out that Muldoon J. confirmed Rothstein J.'s statements on this issue in Koo v. Canada (Minister of Citizenship and Immigration), [1998] F.C.J. No. 732 (T.D.) at paragraph 9:
The applicant relies on Chen v. Minister of Employment and Immigration (1993), 65 F.T.R. 73, 20 Imm.L.R. (2d) 290, in which Mr. Justice Rothstein held that the words "operated, directed or controlled" contained in the Regulation must be read disjunctively; that is, that a visa officer is required to assess each aspect of the definition separately to determine whether an applicant meets at least one of the requirements.
[37] The Applicant submits that the Visa Officer's Decision be given little weight as her application of the "control, operate or direct" test was incorrect and her judgement was unsound and unreliable.
[38] Further, the Applicant contends that the Visa Officer indicated to the Applicant that it was her belief that the Cheng Bao Agreement was signed by him as a legal representative of HSPC. The Applicant says that this is a perverse finding of fact because the Applicant is not a lawyer. Therefore, the fact that he signed the Cheng Bao Agreement can only suggest that he is the operator of HSPC. Alternatively, the Applicant could have signed the agreement on his own behalf. The Applicant submits that, either way, the only reasonable inference to be taken from the fact that he signed the agreement and the information found in both accounting reports is that the Applicant is the operator of HSPC.
Given the fact that the Applicant was the chief sales director of the company, is it either fair or proper to examine him without proper notice about accounting questions, given that those accounting questions were dealt with in the Business Performance Assessment?
[39] The Applicant claims that he was entitled to a legitimate expectation that matters of fact surrounding all accounting matters would be regarded as dealt with in the KPMG Report and the Wuxi Report. The Applicant submits that he was not obliged to concern himself with these issues at the interview, and the convocation letter did not give the Applicant notice of what he had to review and discuss.
[40] The Applicant further submits that, even if he was not aware of financial matters (given that he was the sales manager), his position as such was sufficient to bring him within the definition of "control, operate or direct." The Applicant submits that had the Visa Officer turned her mind to the reports, she would have realized that her questions were all answered in the information provided in those reports. The Applicant also says that his apparent lack of knowledge was not because he was not HSPC's director, but because it is not his responsibility to be familiar with financial matters.
Respondent
What is the applicable standard of review to apply to the Decision of the Visa Officer?
[41] The Respondent notes that in To v. Canada (Minister of Employment and Immigration), [1996] F.C.J. No. 696 , the Federal Court of Appeal held that the appropriate standard of review for the discretionary decisions of visa officers with respect to immigration applications is the same standard enunciated in Maple Lodge Farms Ltd. v. Government of Canada et al., [1982] 2 S.C.R. 2.
[42] Also, in Lim v. Canada (Minister of Employment and Immigration) (1989), 8 Imm. L.R. (2d) 261 (F.C.T.D.), Jerome A.C.J. made the following observations regarding judicial review of visa officer decisions:
To succeed, the applicant must do more than persuade me that I might have reached a different conclusion from the assessment. He must satisfy me that, as a result of an error in interpretation of the statute, the visa officer failed to carry out the assessment that was required of him, or in the alternative, in carrying out such an assessment, he failed in the duty of fairness to the applicant.
Did the Visa Officer have to address the contents of the Business Performance Assessment Reports and rationalize or deal with any contradictions between her assessment and the reports?
[43] The Respondent submits that the Visa Officer's decision was based on her finding that the Applicant had not established that he had a personal net worth, accumulated by his own endeavours, that would satisfy the third element of the investor definition.
[44] The Respondent submits that the KPMG Report was based on information gathered from an on-site inspection and interview with the Applicant and his staff, verification of HSPC's credit rating, and a review of the HSPC's financial statements. The information contained in the Wuxi Report was obtained from the Applicant and after a review of HSPC's financial statements prepared by the Applicant for immigration purposes.
[45] The Respondent says that the Visa Officer did not ignore the reports. To the contrary, the Visa Officer directly addressed the reports, as is made clear in the CAIPS notes and in her affidavit. The fact that the Visa Officer did not agree with the assessments provided in the reports does not mean that she ignored them. She stated quite clearly the basis upon which she did not accept the assessments by KPMG and Wuxi. In her affidavit she has the following to say on this issue:
In response to paragraph 23 of the Applicant's Affidavit, I duly considered the accounting reports submitted, however, they did not establish the relationship between the Applicant and the parent company, nor did they indicate they had conducted any independent research on the validity of the actual meaning of the cheng bao agreement.
Affidavit of Nicole Gareau, sworn March 21, 2002 at paragraph 13
[46] The Respondent also submits that, in the CAIPS notes, the Visa Officer concluded as follows:
The contract presented by the applicant indicates that the parties to the contract are the government and Huaye Co. Although the PI signed as legal representative, the contract is not in his name. PI stated that all the assets belong to the government, but that he has access (sic) to the profits. I was shown no legal documentation that would support this. Since PI failed to prove that the profits held in the company are his, and that a good portion of his PNW is held within the company, I am not satisfied that his personal net worth meets the regulatory definition. In addition, apart from a prepared financial statement, PI failed to provide any documentation (bank statements etc) that show how much money is held in the company.
CAIPS Notes, Certified Tribunal Record, page 5
[47] The Respondent submits that the Poste, supra, decision upon which the Applicant seeks to rely, is distinguishable from the case at bar. In Poste, the applicants had been formally requested to submit three expert medical reports to address the issue of the possible medical inadmissibility of their mildly mentally retarded son. In the end, the decision on possible medical inadmissibility was made after considering only one of three reports. The report referred to in the decision was negative, while the two reports that were ignored were more favourable. Cullen J. concluded that the failure to consider all of the requested reports was a breach of procedural fairness and natural justice in the circumstances of the case.
[48] The Respondent submits that the case at bar is clearly distinguishable on its facts. First of all, the Applicant voluntarily obtained the financial reports from KPMG and Wuxi. They were not "required" documents.
[49] Furthermore, the Respondent submits that the submission of Business Performance Assessment Reports, whether voluntary or upon request, does not limit the scope of the Visa Officer's discretion. In the case of Hao v. Canada (Minister of Citizenship and Immigration), [2000] F.C.J. No. 2013 (T.D.), a visa officer advised an investor applicant at the interview that his application would be refused due to a lack of evidence relating to, among other things, insufficient proof of his personal net worth. The visa officer in that case advised the applicant that such concerns could be addressed by the submission of a Business Performance Assessment. The applicant submitted such an assessment but the visa officer in that case concluded it did not address the issue of the source of funds. In regard to the assessment of evidence, Pinard J stated as follows:
9. As I stated in Chou v. The Minister of Citizenship and Immigration, [1999] F.C.J. No. 1766, (November 16, 1999), IMM-5982-98:
... Moreover, under subsection 8(1) of the Immigration Act, the onus is on the applicant to show that he or she has a right to come into Canada. This means that it is the responsibility of the applicant to produce all relevant information which may assist his or her application.
10. In my view, the visa officer's contention was proper and he denied the visa on appropriate grounds, namely, that in the absence of the documentation he had requested, he was unable to verify the admissibility of the applicant with respect to section 19 of the Act.
[50] The Respondent submits that, in the case at bar, the reports submitted by the Applicant did not address the principal issues of concern to the Visa Officer, namely, his personal ownership of the profits of HSPC.
[51] The Respondent notes that Pinard J. discussed the issue of procedural fairness in this context in Hao, supra:
12. Alternatively, the applicant raises the issue of procedural fairness. However, as stated by Muldoon J. in Asghar v. Minister of Citizenship and Immigration, [1997] F.C.J. No. 1091, (August 21, 1997), IMM-2114-96, the duty of procedural fairness:
... does not arise merely because the visa officer has not been convinced, after weighing the evidence, that the application is well-founded. The visa officer's task is precisely to weigh the evidence submitted by the applicant.
13. Having reviewed the tribunal record, concentrating on the visa officer's Computer Assisted Immigration Processing System notes and the BPA of the applicant, I am satisfied that the visa officer who conducted the interview assessed the record reasonably. It is clear in the present case that the visa officer exercised his discretion in good faith, based on the evidence and/or lack of evidence before him. There is no proof that the principles of natural justice have been violated, nor that considerations irrelevant or extraneous to the statutory purpose of the Act have been relied upon.
[52] The Respondent further submits that in the case of Zhen v. Canada (Minister of Citizenship and Immigration), [1996] F.C.J. No. 1537 (T.D.), an applicant under the entrepreneur category told the visa officer in that case that the business he owned in China was registered in the name of a Japanese friend. The officer concluded there was no credible documentation to prove the sources of the applicant's net worth or sufficient resources to establish his business. Heald D.J. held as follows:
... It seems clear that the visa officer did not accept the applicant's documentation as proof of the business arrangements entered into by the applicant. The record establishes, in my view, that the visa officer carefully considered the supporting documents put forward by the applicant. After reviewing them he concluded that they were not persuasive. I agree with him. The certificates of investment merely outline the share structure of the companies. The brief agreement is not persuasive evidence of a trust relationship.
[53] The Respondent submits that similarly, in the case at bar, the materials provided by the Applicant outline the agreement between the two companies but the documents do not indicate the profits of HSPC (by the Applicant's own admission, a government-owned company) belong to the Applicant.
[54] The Respondent says the Visa Officer's conclusion that the Applicant had not established he had met the third element of the definition of an investor was reasonably open to her, based on the evidence before her.
Did the Visa Officer err in finding that the Applicant had to "control operate and direct" (COD) his company as opposed to "control operate or direct"?
[55] The Respondent submits that the definition of investor must be read conjunctively. In order to qualify as an investor, an applicant must satisfy the visa officer that he / she fulfills all three elements of the definition (Kwok v. Canada (Minister of Citizenship and Immigration), [1997] F.C.J. No. 1597 (T.D.) at paragraph 9).
[56] The Respondent submits that, while the Visa Officer under cross- examination stated that she did not believe the Applicant had established that he met the first element of the definition of "investor," she also stated that the basis of her decision took into account the third element. This is also clear from the Decision letter itself.
[57] In the alternative, the Respondent submits that the Applicant has mischaracterised the Decision of the Visa Officer as regards the issue of "control, operate or direct" as the Visa Officer clearly stated under cross-examination that the test was disjunctive. At no time did she state that the Applicant had to meet all three elements of "control, operate or direct" to succeed.
Given the fact that the Applicant was the chief sales director of the company, is it either fair or proper to examine him without proper notice about accounting questions, given that those accounting questions were dealt with in the Business Performance Assessment?
[58] The Respondent contends that the onus is on the Applicant to discharge the burden as set out in section 8 of the Immigration Act. The Respondent submits that the Applicant's inability to answer questions relating to the finances of HSPC, the profits of which he claimed to own, is a valid basis for doubting his right to access those funds (Zhang v. Canada (Minister of Citizenship and Immigration), [2001] F.C.J. No. 663 (T.D.)).
[59] The Respondent submits that there is no obligation on a visa officer to provide an applicant in advance with the questions that will be asked at an interview. This would defeat the purpose of the interview.
[60] The Respondent finally submits that the Visa Officer did not expect the Applicant to be able to recite a myriad of specific financial data with regard to his business. Rather, the Visa Officer was quite clear that she was looking for information to establish that the Applicant had access to the profits of the HSPC.
ANALYSIS
What is the applicable standard of review to apply to the Decision of the Visa Officer?
[61] In To v. Canada (Minister of Employment and Immigration), [1996] F.C.J. No. 696 , the Federal Court of Appeal held that the appropriate standard of review of the discretionary decisions of visa officers with respect to immigration applications is the same standard enunciated in Maple Lodge Farms Ltd. v. Government of Canada et al., [1982] 2 S.C.R. 2 at pages 7 and 8 where McIntyre J. stated as follows:
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, were 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.
[62] In Lim v. Canada (Minister of Employment and Immigration) (1989), 8 Imm. L.R. (2d) 261 (F.C.T.D.), Jerome A.C.J. made the following observations regarding judicial review of visa officer decisions:
To succeed, the applicant must do more than persuade me that I might have reached a different conclusion from the assessment. He must satisfy me that, as a result of an error in interpretation of the statute, the visa officer failed to carry out the assessment that was required of him, or in the alternative, in carrying out such an assessment, he failed in the duty of fairness to the applicant.
[63] I regard To, supra, and Lim, supra, as applicable to the case at bar.
Did the Visa Officer have to address the contents of the business performance assessment reports and rationalize or deal with any contradictions between her assessment and the reports?
[64] I agree with the Respondent that the fundamental issue of concern to the Visa Officer was the Applicant's accumulated net worth and his entitlement to the excess profits of HSPC. The KPMG Report directly addresses profit attribution at page 4 of the report:
According to the contracted management agreement between Mr. Ma and the Government, the office building and equipment facility were provided to Mr. Ma by the Government while Mr. Ma should pay annual fixed contract profit amounting to RMB300,000 and management fee based on sales revenue to the Government. In addition, Mr. Ma should also pay an education surcharge and agriculture fund. But these tax fees were handed over to the state tax bureau, as advised by Mr. Ma. After deducting the above describes fixed contract profit and various fees, Mr. Ma is entitled to any profit leftover of the Company. Please refer to Appendix 5 for a copy of the contracted management agreement.
[65] On the important issue of profit entitlement, the Visa Officer questions the information in the reports because, in most material respects, it was provided to the assessors by the Applicant himself. The KPMG Report sets out the approach and methodology used in compiling the information as follows:
III. Procedures performed
To achieve the above objectives, we performed the following procedures:
1. visited the Company;
2. interviewed Mr. Ma and his staff;
3. interviewed the bank manager to verify the Company's credit standing with the bank;
4. read the Company's financial statements for 1998, 1997 and 1996, summarized financial information in our report and obtained explanations for any significant fluctuations;
5. disclosed any applicable adjustments made to the financial statements, in accordance with the International Accounting Standards.
The financial data in our report has been extracted from information provided to us by Mr. Ma and his staff. Copy of the representation letter in respect of the Company is enclosed in Appendix 1.
[66] The Applicant says that the authority and weight of a report prepared by KPMG is significant and, if the Visa Officer rejects it, she must provide convincing reasons for doing so. In addition, the Applicant says that KPMG did seek a degree of independent verification from the Town Government and the bank.
[67] The reasons provided by the Visa Officer for rejecting the KPMG conclusions, as found in the CAIPS notes and the Visa Officer's affidavit, are as follows:
Conclusion:
The contract presented by the applicant indicate that the parties to the contract are the government and Huaye Co. Although the PI signed as legal representative, the contract is not in his name. PI stated that all the assets belong to the government, but that he access (sic) to the profits. I was shown no legal documentation that would support this. Since PI failed to prove that the profits held in the company are his, and that a good portion of his PNW is held within the company, I am not satisfied that his personal net worth meets the regulatory definition. In addition, apart from a prepared financial statement, PI failed to provide any documentation (bank statements, etc) that show how much money is held in the company. Moreover, when asked to describe the terms and conditions of the cheng bao agreement, his version clearly contradicted what is written in the agreement. I am therefore not satisfied that accepting PIs application would not be contrary to the Immigration Act.
...
7. I was not satisfied that the Applicant met the definition of an investor. I explained to the Applicant that the information provided in regard to his business financial information did not indicate that he is the holder of the cheng bao agreement. While he signed the document as the legal representative of Huaye, the agreement was between Huaye and the government. I further explained to the Applicant that, as a result, I was not satisfied that the funds in the company were actually his or whether they would remain with the company. The Applicant respondent that the cheng bao agreement stated the profits were his to keep. I pointed out to the Applicant that the agreement said the profits belonged to Huaye and he again stated he could take the money himself.
8. I asked the Applicant to explain the terms and conditions of the cheng bao agreement. He was not very familiar with the terms.
9. I expressed my concerns to the Applicant and allowed him to address those concerns.
10. Based on documents provide by the Applicant I could not conclude that he had established that the profits that are held in Huaye belong to him. As the profits in that company were said to make up a large portion of the Applicant's net worth, I was not satisfied that the Applicant had accumulated the amount of funds required for inclusion in the investors class.
...
12. In response to paragraph 22 of the Applicant's Affidavit, none of the documentation provided by the Applicant listed him as a party to the cheng bao agreement.
13. In response to paragraph 23 of the Applicant's Affidavit, I duly considered the accounting reports submitted, however, they did not establish the relationship between the Applicant and the parent company, nor did they indicate they had conducted any independent research on the validity of the actual meaning of the cheng bao agreement.
14. In response to paragraph 27 of the Applicant's Affidavit, I did not unduly emphasize a few inconsistencies. The Applicant was not very familiar with the terms of the cheng bao agreement nor was he very familiar with the contents of the financial statements. This, in addition to the fact that the cheng bao agreement does not name him as one of the operators of the agreement, there was not sufficient evidence for me to establish that the Applicant was the actual contractor of the cheng bao agreement and therefore, that he owned the profits.
15. I expressed my concerns to the Applicant and provided him an opportunity to respond.
...
[68] So the narrow issue before me is whether the Visa Officer's failure to be satisfied by the information in the reports was patently unreasonable. There is no doubt that the Visa Officer did indeed address and weigh the evidence contained in the reports on this issue.
[69] Confronted with this information and the authority that inevitably attaches to a report compiled by KPMG it might be possible to say that the Visa Officer in this case was exceptionally fastidious. But she considered the information in good faith and gave her reasons why it did not satisfy her on the crucial issues of concern. She was not perverse, capricious or patently unreasonable. Nor was the Decision based upon irrelevant considerations. I may have come to a different conclusion, but I cannot say she committed a reviewable error in this regard.
Did the Visa Officer err in finding that the Applicant had to "control operate and direct" (COD) his company as opposed to "control operate or direct"?
[70] Having reviewed the materials I do not believe that this issue played any part in the Visa Officer's Decision to reject the Applicant. Consequently, there was no reviewable error in this regard.
ORDER
THIS COURT ORDERS that
1. This Application for judicial review is dismissed.
2. There are no questions for certification.
|
"James Russell" |
|
JFC |
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
DOCKET: IMM-5606-01
STYLE OF CAUSE: XI HUI MA
Applicant
- and -
THE MINISTER OF CITIZENSHIP AND
IMMIGRATION
Respondent
PLACE OF HEARING: TORONTO, ONTARIO
DATE OF HEARING: THURSDAY, NOVEMBER 27, 2003
REASONS FOR ORDER BY: The Honourable Justice Russell
APPEARANCES BY: Mr. Cecil Rotenberg
For the Applicant
Ms. Rhonda Marquis
For the Respondent
SOLICITORS OF RECORD: Mr. Cecil Rotenberg
Barrister & Solicitor
255 Duncan Mill Rd.,
Suite 803,
Toronto, Ontario
M3B 3H9 For the Applicant
Morris Rosenberg
Deputy Attorney General of Canada
For the Respondent
FEDERAL COURT OF CANADA
Date: 20040326
Docket: IMM-5606-01
BETWEEN:
XI HUI MA
Applicant
- and -
THE MINISTER OF CITIZENSHIP AND IMMIGRATION
Respondent
REASONS FOR ORDER and ORDER