R. v. Fathie Date:, 2011 BCPC 13

Citation: R. v. Fathie Date: 20110107 2011 BCPC 0013 File No: 54748-1 Registry: RICHMOND IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. GRANT FATHIE REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE HUBBARD Counsel for the Crown: D. Clements Counsel for the Defendant: J. Richardson Place of Hearing: Richmond , B.C.

Date of Judgment: January 7, 2011 [ 1 ] The accused Grant Fathie is charged that: On or about the 1st of December 2009, at or near the Vancouver International Airport, at or near Richmond in the Province of British Columbia, he did fail to report to an officer in accordance with the regulations, the exportation of currency in an amount exceeding $10,000,00, contrary to Sec. 12(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, thereby committing an offence pursuant to

Section 74 of the said Act. [ 2 ] Section 12(1) of the Act provides: Every person or entity referred to in subsection (3) shall report to an officer in accordance with the regulations the importation or exportation of currency or monetary instruments of a value equal to or greater than the prescribed amount. [ 3 ]

Section 11 of the regulations provides: A report with respect to currency or monetary instruments transported by a person departing from Canada shall be submitted without delay by the person at the Customs office located at the place of exportation or, if it is not open for business at the time of exportation, at

the nearest Customs office that is open for business at that time. [ 4 ] The evidence led by the Crown in this case was that of Officer Mark Flagel of the Canada Border Service Agency. Mr. Flagel said that on the 1st of December 2009, he was on duty at gate 58 at Vancouver International Airport (YVR) examining passengers leaving the country on Air Canada Flight 3 to Tokyo.

He stated that he approached the accused, Grant Fathie, in the area of the jetway, being the part of the terminal immediately prior to the moveable ramp leading to the aircraft, introduced himself, saying that he was enforcing outbound currency regulations and asked if Mr. Fathie had reported any currency that day. To this inquiry, his evidence was the accused said, " No, but I have more than $10,000. " He then took Mr. Fathie aside to a nearby interview room, where the accused told him that he had approximately 2.5 million yen and, according to Mr. Flagel, produced it from one of his carryon bags.

On cross- examination, Mr. Flagel admitted that it was possible that Mr. Fathie in fact produced it from his jacket pocket, which is where the accused said he was carrying it when he later took the witness stand. I accept Mr. Fathie's evidence on this point and find that he was in fact carrying it in his inside jacket pocket. [ 5 ] The money was roughly counted and in fact amounted to 2.65 million yen. There was also approximately $500 Canadian cash in Mr. Fathie's wallet. Mr.

Fathie was advised that he was being arrested on the basis of there being reasonable grounds to suspect that it was the proceeds of crime, and the money was seized. [ 6 ] The Crown have conceded that there is in fact no evidence that it was in fact proceeds of crime. Mr.

Fathie produced in evidence documents which have satisfied me that he had, on November the 21st, 2009, sold a 24-foot Bayliner for $26,750 and on November the 4th, 2009, received an ICBC settlement for $11,269.38 in respect of a damaged Porsche, and that these two transactions were the primary source of the $32,091.50 that he had on December the 1st, 2009 exchanged for 2.65 million yen at the Vancouver Bullion and Currency Exchange at 800 West Pender Street, Vancouver, this being the money that he was carrying in his jacket pocket. [ 7 ] Mr.

Flagel further testified that immediately outside of the security check area at YVR there was a sign, depicted in a photograph taken by the accused and marked as Exhibit 1, which said, inter alia: “Are you entering or leaving Canada with CAD 10,000 or more? This means any currency, domestic or foreign banknotes and securities such as traveller's cheques, stocks and bonds, etc. If so, report to Canadian Customs. Failure to report could result in seizure and penalties.” [ 8 ] Mr.

Flagel said that there was no Canadian Customs office inside the security gate prior to the departure gate and that the nearest office was in fact outside the arrival area on level 2, and that this is where Mr. Fathie should have reported the cash.

He did admit, however, that he usually carried blank declaration forms with him and he sometimes used his discretion and allowed departing passengers to complete the form at the gate and deliver it to him. [ 9 ] A blank form was introduced as Exhibit 9, and it states on the back of the paper that the Act: “. . . requires of every person or entity the obligation to report to CBSA the importation or exportation of currency or monetary instruments of a value equal or greater than CAD 10,000.” [ 10 ] I note that this form refers to reporting to CBSA and does not specify a Customs office as in the regulations, while s. 12(1) of the Act refers to reporting to an officer.

There is thus a lack of clarity as to where and how reporting should be done. [ 11 ] It was clear from Mr. Flagel's evidence that on arrival in Canada at YVR, the reporting was usually done at a booth prior to baggage pick-up and not at the Customs office outside the arrivals area. [ 12 ] Mr. Fathie, when he took the witness stand in his own defence, said that he had lived in Japan for a number of years between 1998 and 2009, and had been ordinarily resident for tax purposes in Japan from 2005 until he separated from his Japanese wife in February 2009.

He said that his business at the time of the alleged offence was exporting used German cars aged more than 15 years from Japan to Canada, and that the reason he had so much cash on him was that he was going to Tokyo to purchase cars at an auction the day after his arrival, and that he needed the cash to use at the auction as they were cash transactions. He said that he was aware of the obligation to report, as he had travelled to Japan on many occasions, and there was a corresponding obligation to report any amount over one million yen on arrival in Japan.

He said that he had on previous trips seen an officer at the gate and seen the form being filled out at that location. [ 13 ] He said that on December the 1 st , he could not say that he had actually seen the sign outside of the security check area, as he was rushed. He had had to change from a JAL flight to an Air Canada flight at the last minute because the JAL flight had been diverted to Sapporo and he wanted to take a direct flight to Tokyo for which he had paid. He said that he knew he had to report and always intended to do so. He said that if he had not been approached by Mr.

Flagel, he would have inquired at the airline desk as to where he should report, and that he was not aware of the requirement to report to the office on level 2. [ 14 ] I have to ask myself whether or not I believe the evidence of the accused with regard to his intentions. There is room for doubt, in that he told Mr. Flagel in the interview room that he was in a rush and just forgot. However, having considered Mr. Fathie's evidence, coupled with the immediate disclosure to Mr.

Flagel that he had more than $10,000 on his possession, I have concluded that he was in fact telling me the truth on the witness stand and that he did intend to report the funds and did in fact do so when first given the opportunity. This conclusion is supported by the evidence I have heard from Mr. Fathie, that at other international airports overseas, there is normally a desk where one reports to a Customs officer for passport control and currency matters after security, and that there is no such facility at YVR.

Whilst I cannot take judicial notice of my own experience in international travel, this evidence is consistent with my own observations. [ 15 ] The process that was in fact in place at YVR on December the 1st, 2009 was, in my view, a sloppy one. The sign outside security did not indicate where a traveller had to report and it would be reasonable to assume that Canada Customs would be available in a conspicuous location inside security. This lends credence to the evidence of Mr. Fathie as to what he thought he had to do and what he intended to do.

[16] The Crown have referred me to the case of Tourki v. Canada (Minister of Public Safety and Emergency Preparedness), 2006FC 50 , 2006 F.C. 50. This is a case where a Mr. Tourki was apprehended on board a Montreal to Paris flight with theequivalent of $102,642.33 in his briefcase. Mr. Justice Harrington of the Federal Court said in an application for refund of the moneyseized, at paragraph 27: “It is incumbent upon the traveller to report. The law imposes a self-reporting system. The traveller must search and find the Customsoffice. Mr.

Tourki says that there was no Customs office at the airport after he went through security. That is only partially true. Hecould have left the security area on the departure level and gone down to the Customs office on the arrival level and then gone throughsecurity again. While a Customs kiosk in the departure area would be more user friendly, there was no legal requirement that such akiosk be there.” [17] This case can, however, be distinguished from the case before me in that Mr. Tourki said he was not aware of the obligation toreport and he was in fact in the aircraft on the tarmac when apprehended.

In the case before me, Mr. Fathie did in fact report the amounthe was taking out of the country to Mr. Flagel at the first opportunity that was offered to him, and I am satisfied that he always intendedto do so. In the circumstances, I find that he did not commit the offence charged and find him not guilty. (REASONS FOR JUDGMENT CONCLUDED)