Date: 20050711
Docket: IMM-9503-04
Citation: 2005 FC 970
Ottawa, Ontario, this 11th day of July, 2005
Present: THE HONOURABLE MR. JUSTICE SIMON NOËL
BETWEEN:
HUI PING XU
Applicant
and
MINISTER OF CITIZENSHIP AND IMMIGRATION
Respondent
REASONS FOR ORDER AND ORDER
[1] This is an application for judicial review of a decision of the Refugee Protection Division (the "panel") of the Immigration and Refugee Board (the "IRB") dated October 19, 2004, wherein the Applicant was determined to not be a Convention refugee or a "person in need of protection" as defined by sections 96 and 97 respectively of the Immigration and Refugee Protection Act, S.C. 2001, c. 27 ("IRPA"), due to his status as a person referred to in Article 1F(b) of the United Nations Convention Relating to the Status of Refugees (the "Convention") and s. 170 of IRPA. The Applicant seeks either an order that the panel be directed to decide in accordance with the directions of the Court, or that this decision be set aside and the Applicant's claim be sent back for redetermination before a newly-constituted panel in accordance with such further direction as the Court may deem appropriate.
ISSUE
[2] Did the panel err in determining the Applicant's credibility, base its decision on erroneous findings of fact or law, err in its application of the exclusion clause 1F(b) of the Convention, or otherwise fail to observe a principle of natural justice or procedural fairness in reaching its determination that the Applicant was inadmissible?
CONCLUSION
[3] The panel did not make any errors of importance that would justify an intervention by this Court. The decision is solidly based on a reasonable interpretation of the facts, and the determination that the fraudulent scheme in which the Applicant participated was a serious non-political crime is valid.
BACKGROUND
[4] The Applicant, Hui Ping Xu (Mr. Xu or "Applicant"), is a 55-year-old citizen of China. He claims that he is in need of refugee protection because he is suspected of corruption by the Chinese authorities.
[5] Mr. Xu worked as the head of purchasing for the Shanghai First Lumber Factory (the "company") in China since 1978. In 1995, Mr. Xu was told by his boss, Mr. Guo Guang Chen (Mr. Chen), to mark up the price of incoming lumber by approximately $20-30RMB/sq.m. (the "inflated price" or the "markup"). According to company policy, Mr. Chen was allowed to take 4% of the incoming purchase price of the lumber for his expense account; so if the purchase price was increased, Mr. Chen would get a larger amount.
[6] Mr. Xu complied with this request; however, he claims to have honestly believed that Mr. Chen was using this increased expense account in order to more fully market the company and thus increase business. It was not until January or February 1998 that Mr. Xu realized Mr. Chen was in fact pocketing the money from the markups for personal use.
[7] Mr. Xu continued to prepare the invoices with inflated prices for approximately another five (5) or six (6) months, at which point he requested a health leave from work, citing medical reasons. In 2000, Mr. Chen asked him to resign, which he did.
[8] In 2003, faced with economic difficulties, the company conducted an audit and discovered the inflated prices. In September 2003, after hearing that the prosecution department of the Shanghai City's People Court was investigating the markups at the company, Mr. Xu, fearing that Mr. Chen would blame him for the financial irregularities, secured a temporary visa to Canada and left.
[9] In late November 2003, Mr. Xu's family back in China received a summons ordering Mr. Xu to appear at the Shanghai City's Economic Court to answer questions into allegations of corruption and malpractice against him.
THE CONTESTED DECISION
[10] Mr. Xu's refugee claim was heard on July 26, 2004, and a negative decision rendered by the panel on October 19, 2004.
[11] The panel determined that Mr. Xu was not credible when he said that he had only learned about Mr. Chen's misappropriation of the inflated prices at a dinner part which he had attended along with some company suppliers in early 1998. The panel was not convinced by Mr. Xu's version of events at the dinner. The comments made by the suppliers seemed very general. Mr. Xu also admitted to having a feeling from the outset that the markups were not not proper. Further, given Mr. Xu's position in the company, the panel found it hard to believe that he would not have realized earlier on that Mr. Chen was misappropriating funds from the inflated prices. The panel determined that Mr. Xu's version of events was likely fabricated or elaborated to protect himself. Mr. Xu also stayed in his position an additional six months before taking sick leave, for reasons that were unconvincing to the panel (e.g., it is not easy to switch jobs in China).
[12] The sick leave itself raised red flags for the panel. The medical certificates used to obtain the sick leave were given to Mr. Xu by a doctor who "owed him a favour". Mr. Xu had in the past given the doctor some building materials, something which he claimed the company permitted him to do from time to time. This indicated to the panel that Mr. Xu had previously been involved in corrupt practices, making his version of events even less likely.
[13] On a balance of probabilities, the panel found it was reasonable to believe that Mr. Xu had been involved in economic offences of a serious enough nature to exclude him under Article 1F(b) of the Convention and s. 170 of IRPA. Therefore, his claim for refugee protection was rejected.
SUBMISSIONS OF THE PARTIES
The Applicant
[14] The Applicant submits that the panel erred in determining that it was reasonable to believe he was knowingly involved in fraudulent activity and embezzlement as early as August 1995 when he first became involved in the markups on the invoices. The Applicant states that the evidence clearly demonstrates that while he had misgivings about the markups, he did not think they were illegal since he believed Mr. Chen was acting in the best interests of the company. The only period during which Mr. Xu realized he was complicit in illegal activity was between January 1998 and May or June of that same year, at which point he tried to reduce his complicity as much as possible by avoiding the preparation of the invoices. In his Memorandum, the Applicant cites many examples showing that the panel was confused on this point through the entirety of the hearing. This erroneous finding of fact, in the Applicant's submission, colours the panel's entire analysis.
[15] The Applicant further states that the panel erred in impeaching his credibility because he had not attempted to "cover himself" by taking copies of the fake invoices or otherwise assembling evidence to protect himself against the authorities. The Applicant states this indicates a subjective frame of mind that he could not be expected to have; first, since he did not realize his activity was enabling Mr. Chen's illegal use of the funds and, second, since there was no way for him to know that the company records would be audited some five (5) years later.
[16] The finding regarding the false medical certificate was irrelevant to the question of economic crime, and the panel misinterpreted how the Applicant became aware of the illegal activity of Mr. Chen (e.g., the Applicant claims there was no dinner party). The panel made multiple erroneous findings of fact which go to the heart of its findings on credibility, and thus were patently unreasonable.
[17] The Applicant further submits that the panel misinterpreted the exclusion clause contained in Article 1F(b) of the Convention. Specifically, in determining that the economic crime with which Mr. Xu had been charged could be considered a parallel offence under s. 36(1) of IRPA, the Applicant claims that the panel ignored some of the criteria set out by Kelen J. in Xie v. Canada (Minister of Citizenship and Immigration), 2003 FC 1023, affd 2004 FCA 250, namely, the fact that the Applicant had no previous criminal record and that he did not personally benefit from the fraud. These are mitigating factors that should have been taken into consideration.
[18] Finally, the Applicant argues that a proper reading of the exclusion clauses in IRPA suggest, in their entirety, that in order to deny refugee protection to a claimant, there needs to be not only a finding of serious criminality but also an opinion as to whether the person concerned is a danger to the public. The panel had trouble understanding this argument, and advised the Applicant, at pages 200-01, that since it did not foresee making an analogy between serious non-political crime and serious criminality as defined in s. 36 of IRPA, counsel for the Applicant did not have to make written submissions on this point. However, in its decision, this is the exact basis upon which the panel rejected the Applicant's refugee claim (see page 7 of the panel's decision). It is a violation of procedural fairness to direct counsel that submissions on a particular point are unnecessary and then to subsequently make adverse findings of fact on that same basis: see, e.g., Velauthar v. Canada (Minister of Employment and Immigration), [1992] F.C.J. No. 425 (F.C.A.); Bondarenko v. Canada (Minister of Citizenship and Immigration), 2004 FC 306 (F.C.); Sivamoorthy v. Canada (Minister of Citizenship and Immigration), 2003 FCT 408 (T.D.); Murji v. Canada (Minister of Citizenship and Immigration), 2004 FC 148 (F.C.).
The Respondent
[19] The Respondent, the Minister of Citizenship and Immigration (the "Minister" or "Respondent") submits that, contrary to the Applicant's submissions, the panel's findings of fact were reasonable. The panel is able to make credibility findings based upon contradictions, inconsistencies, implausibilities and a lack of detail in an applicant's story, all of which were present here. The panel did not ignore the Applicant's testimony that he was unaware of Mr. Chen's illegal activities; rather, it found this testimony inconsistent and implausible since, first, Mr. Xu admitted he knew from the beginning that Mr. Chen was requesting extra markups in order to supplement his expense account and, second, the explanation provided by Mr. Xu as to how he became aware of the illegal activity was vague and inconsistent. Neither could Mr. Xu provide further explanation as to why he continued the activity for another five to six months after realizing it was illegal (if in fact it was only in early 1998 that he realized this).
[20] The Respondent claims that the panel properly considered all the circumstances of the Applicant's case. The panel correctly determined that it was reasonable to believe that Mr. Xu was implicated in a scheme which cost the company over more than $1 million CDN over five years, qualifying this as a serious offence and therefore subject, according to the Criminal Code of Canada, to a term of imprisonment of up to 10 years.
[21] Finally, the panel properly assessed whether this was a "serious non-political crime". Contrary to the Applicant's claim, the panel did allow counsel for the Applicant to make lengthy submissions at the hearing as to how the exclusion clause should be interpreted. The panel was entitled, after hearing the submissions, to prefer its own interpretation of the law. Further, according to the Respondent, the interpretation taken by the panel is also consistent with judicial authority in Canada.
ANALYSIS
Standard of Review
[22] The applicable standard of review for cases involving exclusion under the Convention was analyzed by Décary J.A. in Harb v. Canada (Minister of Citizenship and Immigration) (2003), 27 Imm. L.R. (3d) 1 (F.C.A.) (Harb), at paragraph 14:
In so far as these are findings of fact they can only be reviewed if they are erroneous and made in a perverse or capricious manner or without regard for the material before the Refugee Division (this standard of review is laid down in s. 18.1(4)(d) of the Federal Court Act, and is defined in other jurisdictions by the phrase "patently unreasonable"). These findings, in so far as they apply the law to the facts of the case, can only be reviewed if they are unreasonable. In so far as they interpret the meaning of the exclusion clause, the findings can be reviewed if they are erroneous. (On the standard of review, see Shrestha v. The Minister of Citizenship and Immigration, 2002 FCT 886 [sic], Lemieux J. at paras. 10, 11 and 12.)
[23] In Xie v. Canada (Minister of Citizenship and Immigration), [2004] 2 F.C.R. 372 (F.C.), Justice Kelen added an analysis of the standard of review applicable when a person is excluded specifically by virtue of Article 1F(b) of the Convention where there exists reasonable grounds to believe he or she has committed embezzlement in their country of origin (at para. 19):
First, the standard of patent unreasonableness will be applied to the panel's findings of fact and its credibility finding.
Second, the Refugee Division's determination that there are serious reasons for considering the applicant to have committed embezzlement required an application of the law to the facts of the case. This is a question of mixed fact and law, and will be reviewed using reasonableness simpliciter: Sharma v. Canada (Minister of Citizenship and Immigration) (2003), 230 F.T.R. 24 (F.C.T.D.), at paragraph 12.
Third, correctness will be applied to the Refugee Division's finding that a purely economic offence can constitute a serious non-political crime because interpreting articles of the Convention is a determination of law: Pushpanathan v. Canada (Minister of Citizenship and Immigration), [1998] 1 S.C.R. 982, at paragraphs 42-50. ...
[24] Therefore, the panel's assessment of Mr. Xu's credibility will be reviewed according to a standard of patent unreasonableness. The panel's determination that there were serious reasons to believe Mr. Xu was actively involved in the embezzlement of funds will be reviewed according to the standard of reasonableness. These two first determinations are inextricably linked and I shall deal with them together. Finally, the question of the panel's determination that the crime committed by Mr. Xu constituted a "non-political serious offence" as per Article 1F(b) of the Convention will be assessed on a standard of correctness.
(a) Mr. Xu's credibility and his involvement in the markup scheme
[25] The panel determined that Mr. Xu was not credible with regard to his claim that he did not know for almost three years (from mid-1995 to early 1998) that the markups which Mr. Chen had asked him to make on incoming lumber purchases were being used illegally by Mr. Chen:
The claimant acknowledged having a sense from the beginning that the manager was up to fraud and embezzlement. [...] In the hearing room, the claimant explained that inflating the purchase price was wrong, but that he had to do what he was told, an admission that also shows that he was aware of the illegality of inflating the lumber's price in the first place.
[26] A review of the transcript fully supports these findings. The Applicant gave his opinion that the scheme was "wrong" and that the "losers" would be the company and the employees (see Applicant's Record, pages 54-55). In giving these answers, the Applicant demonstrated a clear understanding of the scheme and the consequences of such a scheme on the company and the other employees. Such answers are clear admissions which have to be taken into consideration by the decision-maker. Not doing so would be patently unreasonable. The Applicant also demonstrated that he was fully aware that the money was not going to whom it should be going (i.e., all profits would normally be split among the employees and the company). There is no doubt that the Applicant tried to stay away from admitting he knew the scheme was in fact illegal, but his testimony has to be read in light of what it says, and it was reasonable for the panel to conclude that he knew it was illegal. It should also be noted that Mr. Xu's role in the scheme was essential to its success. Without it, the scheme would not have worked.
[27] There is an allegation made that Mr. Xu was engaged in corrupt activity due to his ability to secure a false medical certificate allowing him to obtain medical leave from the company. The panel disbelieves Mr. Xu's explanation of why he could not leave earlier (e.g., in early 1998 when he first found out about Mr. Chen's misappropriation of the funds) since it notes that another employee left at the same time without having recourse to such a certificate. This inference was properly made since it tends to indicate that the Applicant had a patten of behaviour supporting the finding that he knew about the scheme and its illegality.
[28] In the circumstances, the panel's determination that Mr. Xu was not credible is based on reasonable findings of fact and its reasons are stated in clear and unmistakable terms.
(b) Article 1F(b) of the Convention: "serious non-political offence"
[29] In determining that a purely economic offence could be considered adequate for the purposes of exclusion under IRPA, the panel followed the analysis undertaken by Kelen J. in Xie, supra. This approach has been confirmed by the Federal Court of Appeal: Xie v. Canada (Minister of Citizenship and Immigration), [2004] F.C.J. No. 1142 (F.C.A.) at para. 40. A reading of the decision shows that after assessing whether the scheme was a serious non-political crime, the panel then went on to describe what the scheme was and the participation of the Applicant in it, through different credibility findings. The Applicant claims that the panel should have mentioned that he had no criminal record and that he did not gain any benefits from the scheme. Again, a full and proper reading of the panel's decision shows that its reasons for finding that such a scheme was a serious non-political crime were validly made and soundly based on judicial authority. It should also be kept in mind that, in Canada, a fraud of a company of over $1 million would certainly be dealt with as a serious crime. The panel's decision properly reflects this.
Procedural fairness
[30] The panel provided ample opportunity for counsel for the Applicant to make submissions on the point of whether the Applicant's alleged crime should be classified as a serious one. In the end, the panel was entitled to prefer its interpretation of judicial authority over the Applicant's, especially here where the panel's determination was completely in line with legal precedent. The panel properly followed the lead of the Federal Court and Federal Court of Appeal in deciding that the question of whether a crime is "serious" for the purposes of Article 1F(b) of the Convention can be determined by reference to the maximum sentence that would have been imposed for the same crime had it been committed in Canada: Xie, supra (both levels); Chan v. Canada (Minister of Citizenship and Immigration), [2000] 4 F.C. 390 (F.C.A.).
[31] Therefore, in light of my reading of the decision, and having had the opportunity to review the evidence and hear counsel for both parties, I can only come to the conclusion that there is no reason for this Court to intervene.
[32] The parties were asked if they wished to suggest a question for certification and they have not.
ORDER
THIS COURT ORDERS THAT:
This application for judicial review is dismissed and no question will be certified.
"Simon Noël" Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: IMM-9503-04
STYLE OF CAUSE: HUI PING XU v. MCI
PLACE OF HEARING: Vancouver, BC
DATE OF HEARING: July 5, 2005
REASONS FOR JUDGMENT: NOËL, J.S.
DATED: July 11th, 2005
APPEARANCES:
Mr. Shane Molyneaux For Applicant
Mr. Keith R. Reimer For Respondent
SOLICITORS OF RECORD:
Elgin, Cannon & Associates For Applicant
Vancouver, British Columbia
Morris Rosenberg For Respondent
Deputy Attorney General of Canada