Forfeiture of seized legitimate funds was unreasonable exercise of discretion

Federal court | Customs and Excise Offences


Forfeiture of seized legitimate funds was unreasonable exercise of discretion

Applicant applied for judicial review of decision of respondent Minister that there had been contravention of s. 12(1) of Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Can.) and that all currency that had been seized from applicant would be held as forfeit. Applicant was scheduled to fly from Vancouver to Hong Kong. At airport applicant was approached by customs officer. Applicant admitted to carrying more than $10,000 in currency that he had not reported. Total of $15,760 was found in applicant’s bag. Officer decided to hold seized currency as suspected proceeds of crime. Applicant had been previously convicted of drug smuggling, had been unemployed since 2007 and had no other source of income. Applicant contested seizure and provided explanation for seized funds in that they were made up of $6,700 from sale of car, $2,000 was lucky money mother had given him and balance was his personal savings. Adjudicator determined that $6,700 was accepted as legitimate but that applicant had not provided evidence to demonstrate identifiable link between savings and lucky money and legitimate origins. Adjudicator still suspected that $9,060 of seized money was proceeds of crime. Minister determined that all of seized funds would be held as forfeit. Application granted. It could not be case that because Act specified in s. 29(1)(b) that portion of penalty may be returned, it followed that portion of seized funds that were legitimate may not be returned under s. 29(1)(a) because that section did not refer to “portion”. Confiscating legitimate funds did not further objectives of Act. Penalty for applicant’s failure to report legitimate funds was $250 and confiscation of $6,700 imposed draconian remedy that was not mandated by Act. If Parliament intended to confiscate legitimate funds it would have stated so in unequivocal terms. Interpretation advanced by Minister could lead to absurd punitive results. Interpretation of s. 29(1)(a) of Act, which could determine fate of large sums of money, should not be based solely on language used on penalty provision. Decision that confirmed forfeiture of seized funds, including legitimate funds, was unreasonable exercise of discretion.
Huang v. Canada (Minister of Public Safety and Emergency Preparedness) (Jun. 28, 2013, F.C., Sandra J. Simpson J., File No. T-1219-12) 108 W.C.B. (2d) 638.

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