The decision below illustrates the common misconception by many permanent residents who attempt to incorporate a business to "employ themselves" to meet the residency obligation.The court rejected the judicial review application on the basis that there was no ongoing business in Canada despite the applicant's claims th the was engaged in consulting services. the court did not discount the possibility that , in some circumstances, self-employment could qualify to meet the residency obligation, but it would be depending on the fact of each case.
Durve v. Canada (Minister of Citizenship and Immigration)
Between
Rajendra Govind Durve, Applicant, and
The Minister of Citizenship and Immigration, Respondent
[2014] F.C.J. No. 897
2014 FC 874
Docket: IMM-1332-13
Federal Court
Toronto, Ontario
Kane J.
Heard: April 10, 2014.
Judgment: September 15, 2014.
(157 paras.)
JUDGMENT AND REASONS
1 KANE
J.:-- This application for judicial review addresses the residency requirements
for permanent residents prescribed by section 28 of the Immigration
and Refugee Protection Act, SC 2001, c 27 [IRPA] and their application to permanent
residents who spend periods of time out of Canada working for their own
business. The applicant, Rajendra Govind Durve, seeks judicial review of the
decision of the Appeal Division of the Immigration and Refugee Board of Canada
(the "Board") dated January 28, 2013 which found that he had failed
to comply with the residency requirements and which upheld the decision to not
renew his permanent resident status.
Overview
2 Mr
Durve, a citizen of India, landed in Canada in 2002 and was later granted
permanent resident status. He incorporated a business best described as a
"one-man operation" in Ontario in 2004. He frequently travelled to
India and other countries for significant periods of time. In May 2009,
Citizenship and Immigration Canada did not renew his permanent resident card
because he failed to meet the residency requirement of 730 days in Canada in a
five year period. The Board upheld that decision. In Durve
v Canada (Citizenship and Immigration Canada), 2011 FC
995, [2011] F.C.J. No. 1226 [Durve #1], the Court allowed the judicial review and remitted the appeal back
to the Board for a new hearing (de novo).
3 The
Board conducted a de novo hearing
and again dismissed the appeal on the basis that Mr Durve did not meet the
residency requirements of section 28 of the Act; he was not physically present in Canada for 730 days and he did not
otherwise comply because he was not outside Canada employed on a full-time
basis by a Canadian business. The Board found that his business was not an
"ongoing operation in Canada". This decision is now the subject of
judicial review.
4 The
applicant submits that the Board: denied him procedural fairness; erred in
interpreting the provisions of the Act and formulating the test for an ongoing operation in Canada; erred
in applying that test; and unreasonably refused to exercise its discretion
based on humanitarian and compassionate ["H&C"] grounds.
5 I
have considered the Board's decision, the extensive record and the arguments of
the parties and I find that there was no breach of procedural fairness and the
decision is reasonable.
6 The
Board undertook a lengthy and careful examination of a vast amount of
documentary evidence. In response to the guidance provided by Justice Gauthier
in Durve #1, the Board considered
several factors or indicia to determine whether Mr Durve's one-man business met
the requirements of an ongoing operation in Canada. While a range of factors
should be considered, no single factor is determinative as one-man and other
small businesses will vary. In the present case, Mr Durve was self-employed and
he was the business. He claimed to be working for his Canadian business from
wherever he was located. The reality was that he was seldom in Canada for more
than several days at a time (with four visits of approximately one month) in
the five year period and there was little evidence to show any connection
between the advice or consultant work he provided to his clients and Canada.
The Board's determination is factual, based on all the evidence, and there is
no basis to disturb its findings.
7 The
Board also reasonably concluded that there were no H&C considerations at
play to warrant the exercise of its discretion to exempt Mr Durve from the
residency requirements.
8 Although
the applicant submits that he would be an asset to Canada, and there is no
reason to doubt this, he simply did not observe the residency requirements, of
which he was well aware and which are not onerous, nor did he establish that
his business has sufficient connection to Canada to be considered an ongoing
operation in Canada.
9 For
the more detailed reasons that follow, the application is dismissed.
Background
10 Mr
Durve landed in Canada on May 25, 2002. In March 2008, he applied to renew his
permanent resident [PR] status before its expiry, but he left the country for
business before receiving a decision. In March 2009, he was advised that
Citizenship and Immigration Canada [CIC] did not have enough information to
establish that he had met his residency obligation of 730 days in the five year
span between April 1, 2004 and March 31, 2009. Later in March 2009, he applied
to the Canadian High Commission at New Delhi for a travel document to return to
Canada. In June 2009 he was advised that his PR status was revoked along with
his application for a travel document. His appeal of that decision was
rejected. In Durve #1, at para 23
Justice Gauthier found that the Board had not considered all the evidence and
that the very brief "decision does not meet the requirements of
justification and transparency applicable under the standard of
reasonableness."
11 In
a de novo hearing, the Board
considered the same five year span -- April 1, 2004 to March 31, 2009. The
Board considered all the evidence; the appeal records from the first hearing,
three exhibits entered at the first hearing, and new disclosure consisting of
six volumes of over 1000 pages.
The Applicant's facts
12 Mr
Durve first applied to immigrate to Canada as a Foreign Skilled Worker. He
describes himself as a financial advisor, with the specialty of promoting
Indo-Canadian business relations. He was issued an immigrant visa and landed in
Canada on May 25, 2002. In 2004, after two years of looking for employment, he
registered a financial consultancy business as 1623709 Ontario Inc, with its
corporate office listed at the residence of his settlement advisor, Mr Kapoor.
13 During
the five year period at issue, 2004-2009, Mr Durve made approximately 25 to 30
international business trips from Canada. He noted that his consulting
contracts included:
· *
An October 16, 2004
agreement with Mississauga-based Skyport Financial Group Inc
("Skyport");
· *
An ongoing contract with
the multi-national company Adept Consulting Services Inc
("Adept");
· *
An ongoing contractual
relationship with Mumbai-based Time Media and Entertainment (PvT) Ltd
("Time Media"); and,
· *
An ongoing contract with
Mumbai-based Lakeland Chemicals (India) Ltd, ("Lakeland"); and
14 The
applicant's own evidence before the Board was that:
· *
He travelled to India
for several reasons: for recuperation following medical treatment; to assist
his mother following his father's death and, more generally, to tend to his
aging mother, whom he visits five to six times a year;
· *
He regularly travels to
other countries, including the US, several European countries, Thailand, the
UK, and the UAE, in order to meet clients and potential clients and to assist
with and oversee the implementation of financial business systems. This
includes some personal travel of short duration on his trips to Thailand;
· *
He frequently returns to
Canada and has a residence here. He divested himself of his property and some
of his parent's properties in India. He purchased a condominium in Canada,
which was only completed in 2011, and remains unfurnished pending his permanent
resident status. He stays at hotels or at his settlement advisor's home when he
is in Canada; and,
· *
Canada is the base of
his business operations. He wound down his consultancy business in India. His
efforts to build his business in Canada have suffered due to his uncertain
immigration status and the economic downturn. He does not operate business accounts
in India, although he has personal accounts there. When in India, he uses his
late father's office. He has income in both Canada and India and files taxes in
both jurisdictions.
The Relevant Legislative Provisions
15 The
relevant provisions of the Immigration and Refugee
Protection Act and the Immigration and Refugee Protection Regulations are set out below:
The Act
· 28.
(1) A permanent resident
must comply with a residency obligation with respect to every five-year
period.
· (2)
The following provisions
govern the residency obligation under subsection (1):
· (a)
a permanent resident
complies with the residency obligation with respect to a five-year period if,
on each of a total of at least 730 days in that five-year period, they
are
· (i)
physically present in
Canada,
· (ii)
outside Canada
accompanying a Canadian citizen who is their spouse or common-law partner or,
in the case of a child, their parent,
· (iii)
outside Canada employed
on a full-time basis by a Canadian business or in the federal public
administration or the public service of a province,
· (iv)
outside Canada
accompanying a permanent resident who is their spouse or common-law partner or,
in the case of a child, their parent and who is employed on a full-time basis
by a Canadian business or in the federal public administration or the public
service of a province, or
· (v)
referred to in
regulations providing for other means of compliance;
· (b)
it is sufficient for a
permanent resident to demonstrate at examination
· (i)
if they have been a
permanent resident for less than five years, that they will be able to meet the
residency obligation in respect of the five-year period immediately after they
became a permanent resident;
· (ii)
if they have been a
permanent resident for five years or more, that they have met the residency
obligation in respect of the five-year period immediately before the
examination; and
· (c)
a determination by an officer
that humanitarian and compassionate considerations relating to a permanent
resident, taking into account the best interests of a child directly affected
by the determination, justify the retention of permanent resident status
overcomes any breach of the residency obligation prior to the
determination.
* * *
· 28.
(1) L'obligation de
résidence est applicable à chaque période quinquennale.
· (2)
Les dispositions
suivantes régissent l'obligation de résidence:
· a)
le résident permanent se
conforme à l'obligation dès lors que, pour au moins 730 jours pendant une
période quinquennale, selon le cas:
· (i)
il est effectivement
présent au Canada,
· (ii)
il accompagne, hors du
Canada, un citoyen canadien qui est son époux ou conjoint de fait ou, dans le
cas d'un enfant, l'un de ses parents,
· (iii)
il travaille, hors du
Canada, à temps plein pour une entreprise canadienne ou pour l'administration
publique fédérale ou provinciale,
· (iv)
il accompagne, hors du
Canada, un résident permanent qui est son époux ou conjoint de fait ou, dans le
cas d'un enfant, l'un de ses parents, et qui travaille à temps plein pour une
entreprise canadienne ou pour l'administration publique fédérale ou
provinciale,
· (v)
il se conforme au mode
d'exécution prévu par règlement;
· b)
il suffit au résident
permanent de prouver, lors du contrôle, qu'il se conformera à l'obligation pour
la période quinquennale suivant l'acquisition de son statut, s'il est résident
permanent depuis moins de cinq ans, et, dans le cas contraire, qu'il s'y est
conformé pour la période quinquennale précédant le contrôle;
· c)
le constat par l'agent
que des circonstances d'ordre humanitaire relatives au résident permanent --
compte tenu de l'intérêt supérieur de l'enfant directement touché -- justifient
le maintien du statut rend inopposable l'inobservation de l'obligation
précédant le contrôle.
The Regulations
· 61.
(1) Subject to
subsection (2), for the purposes of subparagraphs 28(2)(a)(iii) and (iv) of the
Act and of this section, a Canadian business is
· (a)
a corporation that is
incorporated under the laws of Canada or of a province and that has an ongoing
operation in Canada;
(b) an enterprise, other than a corporation
described in
paragraph (a), that has an ongoing operation in Canada and
· (i)
that is capable of
generating revenue and is carried on in anticipation of profit, and
· (ii)
in which a majority of
voting or ownership interests is held by Canadian citizens, permanent
residents, or Canadian businesses as defined in this subsection; or
· (c)
an organization or
enterprise created under the laws of Canada or a province.
· (2)
For greater certainty, a
Canadian business does not include a business that serves primarily to allow a
permanent resident to comply with their residency obligation while residing
outside Canada.
· (3)
For the purposes of
subparagraphs 28(2)(a)(iii) and (iv) of the Act, the expression "employed
on a full-time basis by a Canadian business or in the public service of Canada
or of a province" means, in relation to a permanent resident, that the
permanent resident is an employee of, or under contract to provide services to,
a Canadian business or the public service of Canada or of a province, and is
assigned on a full-time basis as a term of the employment or contract to
· (a)
a position outside
Canada;
· (b)
an affiliated enterprise
outside Canada; or
· (c)
a client of the Canadian
business or the public service outside Canada.
[...]
* * *
· 61.
(1) Sous réserve du
paragraphe (2), pour l'application des sous-alinéas 28(2)a)(iii) et (iv) de la
Loi et du présent article, constitue une entreprise canadienne:
· a)
toute société constituée
sous le régime du droit fédéral ou provincial et exploitée de façon continue au
Canada;
· b)
toute entreprise non
visée à l'alinéa a) qui est exploitée de façon continue au Canada et qui
satisfait aux exigences suivantes:
· (i)
elle est exploitée dans
un but lucratif et elle est susceptible de produire des recettes,
· (ii)
la majorité de ses
actions avec droit de vote ou titres de participation sont détenus par des
citoyens canadiens, des résidents permanents ou des entreprises canadiennes au
sens du présent paragraphe;
· c)
toute organisation ou
entreprise créée sous le régime du droit fédéral ou provincial.
· (2)
Il est entendu que
l'entreprise dont le but principal est de permettre à un résident permanent de
se conformer à l'obligation de résidence tout en résidant à l'extérieur du
Canada ne constitue pas une entreprise canadienne.
· (3)
Pour l'application des
sous-alinéas 28(2)a)(iii) et (iv) de la Loi respectivement, les expressions
"travaille, hors du Canada, à temps plein pour une entreprise canadienne
ou pour l'administration publique fédérale ou provinciale" et
"travaille à temps plein pour une entreprise canadienne ou pour
l'administration publique fédérale ou provinciale", à l'égard d'un
résident permanent, signifient qu'il est l'employé ou le fournisseur de
services à contrat d'une entreprise canadienne ou de l'administration publique,
fédérale ou provinciale, et est affecté à temps plein, au titre de son emploi
ou du contrat de fourniture:
· a)
soit à un poste à
l'extérieur du Canada;
· b)
soit à une entreprise
affiliée se trouvant à l'extérieur du Canada;
· c)
soit à un client de
l'entreprise canadienne ou de l'administration publique se trouvant à
l'extérieur du Canada.
[...]
The Decision under Review
16 The
Board's 49-page decision is comprehensive. A summary of the decision is set out
below to provide the necessary context for the applicant's arguments regarding
the Board's alleged errors.
17 The
Board thoroughly canvassed the submissions of the parties and the guidance
provided by Justice Gauthier in Durve #1 noting that Justice Gauthier had directed it to be more precise
about the indicia to consider when applying the relevant provisions of the Act and the Regulations in the small business context. The Board also noted that Justice
Gauthier had indicated that the question whether there is an ongoing operation
in Canada is factual, to be determined by the nature and the degree of the
business activities in each individual case and that no particular indicia is
determinative.
18 The
Board then noted the applicant's position and submissions, including:
· *
While not physically
present in Canada, he satisfies the residency obligation because he is outside
Canada due to work for his Canadian business, pursuant to subparagraph 28(1)
(a)(iii) of the Act.
· *
His business is
incorporated under Ontario law and is ongoing. The purpose of incorporation was
not to enable him to meet his residency obligations.
· *
There is no requirement
that his Canadian business be "for profit" or that work be
demonstrated through proper business contracts. Although he does not make a lot
of money from his business, this does not mean that he did not work for his
Canadian business.
· *
His ongoing business
activity need not take place in Canada. He continues to work from wherever he
travels and that this work is full-time. His situation is analogous to, for
example, Canadian mining businesses with international assets.
· *
He does not have a
residence outside Canada.
· *
He is a "one-man
show" and knows his clients personally.
· *
His time is spent
working for his Canadian business on contracts, developing contracts, and
developing business projects to bring business to Canada. Some of this work is
not remunerated.
· *
He has the financial
means to support himself while cultivating clients.
19 As
a preliminary issue, the Board addressed Mr Durve's allegation that he had been
denied the opportunity to clarify his financial statements in response to the
submissions of the respondent about discrepancies in those documents. The Board
noted that an appeal is a de novo
hearing and is adversarial in nature. The applicant bears the onus to establish
his case on a balance of probabilities with clear and cogent evidence. The
Board noted that it was familiar with financial and corporate records and
capable of understanding the financial documents provided by the applicant
without further clarification. The Board rejected the applicant's argument that
the evidence should not be considered by the Board because it would be unfair and
found that it was contrary to the appeal process to suggest that evidence on
the record, which had been provided by the applicant himself, should not be
considered. The Board noted that the decision of Justice Gauthier had directed
it to re-determine the appeal on the basis of "all of the facts and the
evidence before the decision-maker".
20 The
Board then focussed on the key issues: whether the appellant had satisfied the
residency requirements of section 28 as informed by section 61 of the Regulations; and, if not, whether sufficient
H&C grounds warranted special relief.
21 The
Board considered whether the appellant had satisfied his residency requirement
because he had been "outside Canada employed on a full-time basis by a
Canadian business" in accordance with subparagraph 28(2)(a)(ii). The Board
noted that this requires consideration of definitions set out in the Regulations and raises four questions:
· *
Is the Canadian business
a corporation incorporated under the laws of Canada (paragraph 61(1)(a) of the Regulations)?
· *
Is the Canadian business
a corporation and does it have ongoing operations in Canada (paragraph 61(1)(a)
of the Regulations)?
· *
Is Mr Durve a full-time
employee of the Canadian business or under contract to provide services to the
Canadian business (subsection 61(3))?
· *
Is Mr Durve an employee
or under contract with the Canadian business and is he assigned on a full-time
basis as a term of either his employment or contract to a position outside of
Canada or a client of the Canadian business outside of Canada ? (paragraph
61(3)(c))?
Canadian business; ongoing operations in Canada
22 The
business was incorporated under the laws of Ontario; the issue for the Board
was whether the business has or had ongoing operations in Canada.
23 The
Board first distinguished the applicant's business, being a personal services
corporation, from a large company with multiple shareholders, directors and
employees. It noted that operations in Canada may not be self-evident where a
corporation has a single shareholder, director or employee, where no tangible
product is produced and where the business is provided by that sole
shareholder, director or employee.
24 It
noted, echoing Justice Gauthier's reference in Durve #1 to Faeli v Canada (Minister of Citizenship
and Immigration), [2005] IADD No 267, that the term
"ongoing" must have some meaning beyond the mere fact of
incorporation. The Board acknowledged the importance, as identified by Justice
Gauthier at para 15, "of examining the nature of an applicant's activities
while outside of Canada in relation to the business of his or her Canadian
company."
25 The
Board considered the ordinary and common sense meaning of the term
"ongoing" and the dictionary definition, as "continuing
activities". It also considered the requirement of "in Canada"
and concluded that "ongoing operations in Canada" requires that the
company's continuing activities be fully located in Canada.
26 The
Board found that Mr Durve's product is the services he provides and his brain
is his primary tool. Therefore, he need not be in any particular place to
provide his services.
27 The
Board examined the evidence and testimony including Mr Durve's description of
his consultancy services, which included financial consultancy, domain and
software advice and the business relationships with Skyport and Adept and found
that, while it is clear what he does when he is outside Canada, it is not clear
what he does in Canada or how his activities outside Canada relate to his
business in Canada.
28 It
noted at para 34: "[y]et, when the panel considers the totality of the
evidence, including the transcript from the first IAD hearing, the disclosure
in both hearings and the submission of the appellant's counsel it remains
largely unclear just what the appellant actually does".
29 The
Board extensively reviewed the documents regarding Mr Durve's work for Adept
and Skyport.
30 The
Board found that the letters of understanding with Adept did not assist in
ascertaining the business activities of 1623709 Ontario Inc. and how they
constituted ongoing operations in Canada. The Board reiterated that it was
looking at the nature of his activities outside of Canada in relation to the
business of his Canadian corporation. The Board concluded that:
· The activity of a "representative" or "agent" or
"employee" of an Ontario corporation marketing the IT services and/or
technology of an American corporation to third parties in the Middle East has
no relationship to the Canadian company. There is no nexus between the ongoing
business of the Canadian corporation and these marketing contracts. Here the
corporate vehicle has not been chosen primarily for tax purposes, but rather
for immigration purposes.
31 The
Board also noted that the 2008 invoices do not show that accounting services
were provided to Adept and do not match Mr Durve's narrative that he provided
nine months of business promotion services to Adept.
32 With
respect to Skyport, the Board found that the relationship ended in December
2007, two years before the end of the five year span, with no evidence that it
was ever renewed. The Board found that the one aspect of the contract with
Skyport that could have become an ongoing business operation in Canada never
materialized. The Board considered the terms of the contract as well as Mr
Durve's testimony and concluded that he had failed to generate a sufficient
client-base for Skyport in India, UK, the US, and Dubai. Instead he merely
undertook bookkeeping projects for Skyport on an hourly basis and relied on
resources in India to do so.
33 The
Board also considered the role of the settlement advisor, Mr Kapoor. Mr Durve
used Mr Kapoor's home address as his business address and he stayed with Mr
Kapoor often while in Canada. The Board noted that Mr Kapoor answered the phone
and took the mail for the business office in Canada for a nominal fee of $200
per month. The Board found that this was not an indicator of any form of
ongoing operation in Canada. The Board concluded, after considering other
evidence, including cancelled checks and an undated service agreement, that Mr
Kapoor was more of a service provider and was not an employee.
34 The
Board found that various letters from other businesses submitted by Mr Durve
only generally described his business activities and did not demonstrate that
he performed paid work for these individuals or businesses. With respect to
Time Media and Lakeland, the Board noted that neither business indicated that
it had a relationship with 1623709 Ontario Inc, but only mentioned a personal
relationship with Mr Durve.
35 The
Board accepted that much of Mr Durve's work is done on an informal basis given
his personal relationships with his clients and that some work related to
business development is unpaid. However, the Board found that there was insufficient
evidence of a business with an ongoing operation in Canada. The Board found
that the business had no nexus to Canada, but was instead tied to Mr Durve's
own physical location, which could be Canada, India, or elsewhere.
36 The
Board stated: "[...] for the purposes of proving that ones Canadian
business is conducting business abroad for Indian based companies, the lack of
formal contracts, letters of understanding etc. goes to the sufficiency of
evidence . [...] it is this very lack of documentary evidence of all the work
conducted by 1623709 Ontario Inc. that calls into question the appellant's
claim to having a business with an ongoing operation in Canada".
37 After
considering the nature of the business activities and finding the evidence
lacking, the Board noted that the next most important indicia of an
"ongoing operation in Canada" is revenue, as demonstrated by
corporate and financial records. The Board noted that other documents, such as
utility bills and credit card bills, are of lesser probative value, especially
since the applicant did not provide much context to situate them in his
business activities. The Board scrutinized the corporate and financial records
of 1623709 Ontario Inc and found them to be unreliable because they were
prepared by the applicant himself, were unaudited and had no explanatory notes.
The Board also found some discrepancies in certain financial statements that
could not be reconciled with the invoices.
38 The
Board considered Mr Durve's submission that there is no requirement to make a
profit. The Board did not make any finding that profit was a requirement. The
Board noted, however, that there was no indication of how Mr Durve's work to
obtain future business was related to the ongoing operations in Canada of his
incorporated business.
39 The
Board concluded that Mr Durve had failed to show any ongoing operation in
Canada which had any form of nexus to the stated activity of the business. The
Board further found that because the two requirements set out in paragraph 61(1)(a)
of the Regulations for a
"Canadian business" - that of an ongoing operation in Canada, had not
been met on a balance of probabilities, there was no need for it to consider
the application of sub-paragraph 28(2)(a)iii of the Act, as guided by subsection 61(3) of the Regulations, to assess whether the applicant had been outside of Canada employed
on a full-time basis by a Canadian business .
40 Despite
this finding, the Board nevertheless considered whether subparagraph
28(2)(a)iii applied.
Employed on a full-time basis by a Canadian
business
41 Subsection
61(3) guides the application of subparagraph 28(2)(a)(iii), i.e., whether the
permanent resident complies with the residency obligation because he or she is
outside Canada employed on a full-time basis by a Canadian business or in the
public service of Canada or of a province.
42 The
Board noted that the jurisprudence on the meaning of "employed on a
full-time basis by a Canadian business", Canada
(Citizenship and Immigration) v Jiang, 2011 FC 349,
[2011] F.C.J. No. 560 [Jiang] and
Bi v Canada (Citizenship and Immigration), 2012 FC 293, [2012] F.C.J. No. 366 [Bi], was not helpful to the current facts. In Jiang and Bi the permanent
residents were employed by larger enterprises that had businesses and employees
both in Canada and abroad, and it was possible to view them as being on
assignment when abroad. In contrast, Mr Durve occupies his position whether he
is in Canada or abroad and his "assignment" is entirely dependent on
where he chooses to live for the purposes of doing his work.
43 Despite
the inapplicability of the jurisprudence to Mr Durve's circumstances, the Board
took a broad look at the notion of "employed on a full-time basis"
and concluded that Mr Durve's work would not qualify because much of it was
spent in business development for no specific client and it did not otherwise
relate to the ongoing operations of 1623709 Ontario Inc in Canada. The Board
rejected the argument that unpaid work is still work, noting that such logic
would enable Mr Durve to spend all his time doing research and business
development abroad while fulfilling his residency obligation.
44 The
Board noted:
· Since the appellant defines his business in respect of the financial
consultancy services he provides his clients to the extent that he is doing
unpaid work for no specific client it cannot be said that he is employed on a
full-time basis.
[...]
· If there was no or little work aboard (sic) for his Canadian business then logically the justification for the
appellants remaining outside Canada was also absent.
45 The
Board also compared the applicant's claimed Canadian personal income and his
claimed business activity and found that his personal income exceeded his
business income, suggesting that he had income from sources other than his
Canadian business (1623709 Ontario Inc) and supporting the view that he was not
working full time for his Canadian business. The Board concluded that the full
extent of the applicant's work abroad is unknown.
Other Considerations
46 The
Board found that despite Mr Durve's view that his home base is in Canada, this
was not the case because he had only spent 279 days in the relevant five year
span in Canada. He had no place of residence in Canada and had given the name
and address of his settlement advisor on his application for a travel document.
The Board found that although the applicant may have sold his own residence in
India, he continued to have a residence in India shared with his mother. The
Board acknowledged that he purchased two condos in the Toronto area in 2006,
but only took possession of one in 2011. The other purchase was cancelled due
to construction delays. Buying a condominium under development in Canada does
not create establishment nor prove any abiding connection.
Humanitarian and Compassionate Considerations
47 The
Board noted that, initially, the applicant had made some effort to establish
himself in Canada but that this did not develop and he was merely an occasional
visitor. He spent the vast majority of his time abroad. The Board acknowledged
his obligations to his parents who were elderly and in poor health, but noted
that this would or should have been anticipated when he came to Canada and that
his family had the means to hire help. The Board concluded that if his familial
duties took precedence over his residency obligations to Canada, he should not
expect much sympathy. The Board further noted that his family would suffer no
hardship if he loses his permanent residence status. He is unmarried and has no
family in Canada. His mother remains in India and his only sister is in the
United States. The Board remarked that it is not readily apparent what hardship
would follow from his loss of permanent resident status, as he has always been
able to work wherever he goes. The Board considered the stigma of being a single
man in India, but found that his status was a personal decision. The Board also
acknowledged his efforts in pursuing his appeal but did not find this to be
unique or special and did not warrant an exercise of discretion pursuant to
H&C factors.
48 In
conclusion, the Board reiterated that, beyond incorporating his company in
Canada, it is not evident that Mr Durve's business ever had an ongoing
operation in Canada. The Board rejected an analogy with Canadian mining
companies with overseas operations, which involve many Canadian and
foreign-based employees. However, the Board did not rule out that one-man
operations could meet the requirements of section 61 of the Regulations and noted that the determination
relies on the specific facts. The Board found that, in general, unless a
one-man operation can establish with clear, cogent and convincing evidence that
the Canadian business has ongoing operations in Canada, it cannot use a
Canadian incorporation to satisfy the residency obligation. The Board provided
two examples of the type of ongoing operation in Canada that could or might be
sustained by one-man operations: an accountant's business with an established
and ongoing operation in Canada which is contracted to provide services to a
Canadian business's operations outside Canada on a temporary basis; and a
one-man trading company that distributes goods in Canada but requires periodic
absences from Canada for the purposes of buying and quality control.
49 The
Board concluded that Mr Durve's business is as described in subsection 61(2) a
"business that serves primarily to allow a permanent resident to comply
with their residency".
The Applicant's Overall position
50 Mr
Durve submits that the Board breached its duty of procedural fairness by not providing
an opportunity for him to clarify the discrepancies in his financial statements
and by not permitting him to address the Board's concerns about the Skyport
contract which Mr Durve submits had a nexus to Canada.
51 He
further submits that the decision is not reasonable; the Board did not follow
the guidance provided by Justice Gauthier in Durve #1, it imported additional requirements into the test for on-going
operation in Canada, including that the business be fully located in Canada;
erred in applying the test, including by ignoring some evidence; and, erred in
determining that the applicant was not fully employed by his Canadian business
while outside Canada. The applicant argues that it should be sufficient for the
purposes of section 28 for the business to be a "functioning entity"
in Canada.
52 Finally,
the Board erred in its analysis and in not exercising its discretion in favour
of Mr Durve on H&C grounds.
The Respondent's Overall position
53 The
respondent submits that there was no breach of procedural fairness; the Board
in its de novo hearing considered
all the evidence which had been provided by the applicant and his testimony
both at the earlier hearing and the de novo hearing, and the applicant had full opportunity to produce the
evidence he relied on.
54 The
Board's decision was reasonable; it properly interpreted the provisions of
section 28 guided by the definitions in the Regulations, it identified the indicia or factors it considered in determining
whether the applicant had an ongoing operation in Canada and reasonably found,
due to the insufficiency of the evidence, that he did not.
55 The
Board also reasonably found that there were no special circumstances to warrant
the exercise of its discretion on H&C grounds.
Standard of Review
56 Issues
of procedural fairness are reviewable on a standard of correctness.
57 Issues
of mixed fact and law are reviewable on a standard of reasonableness. The
jurisprudence emphasizes that where the standard of reasonableness applies, the
role of the Court is to determine whether the decision "falls within 'a
range of possible, acceptable outcomes which are defensible in respect of the
facts and law' (Dunsmuir, at para
47). There might be more than one reasonable outcome. However, as long as the
process and the outcome fit comfortably with the principles of justification,
transparency and intelligibility, it is not open to a reviewing court to
substitute its own view of a preferable outcome." (Canada
(Citizenship and Immigration) v Khosa, 2009 SCC 12,
[2009] 1 SCR 339 at para 59). The Court does not re-weigh the evidence or
remake the decision.
The Issues
58 The
applicant has raised three issues:
· 1)
Did the Board deny the
applicant procedural fairness?
· 2)
Did the Board err in
formulating and applying the residency requirements of section 28- in
particular subparagraph 28(2)(c) (iii) and the meaning of a Canadian business
as an "ongoing operation in Canada"?
· 3)
Did the Board err in its
analysis of the H&C factors and is its determination unreasonable?
Did the Board deny the applicant procedural
fairness?
59 Mr
Durve submits that the Board erred in not providing him with an opportunity to
respond to deficiencies and discrepancies in his financial records that were
raised by the respondent. He argues that the Board did not make any clear
credibility findings against him and should not have simply accepted the
respondent's arguments which indirectly undermined his evidence.
60 He
further submits that he was not made aware of the Board's concerns regarding
his contract with Skyport and not provided an opportunity to clarify this work,
which had a nexus to Canada.
61 The
respondent submits that the onus was on the applicant to demonstrate that the
decision to deny his PR status was not reasonable and that his appeal should be
allowed. He had the opportunity to reply to the differences and discrepancies
that were identified in his financial records, but chose not to do so. Mr Durve
and his counsel were aware of the concern raised in the respondent's
submissions and could have dealt with this evidence in reply submissions but
did not do so.
62 The
respondent adds that although there was no breach of procedural fairness
regarding the financial statements, the concerns about the financial records do
not affect the Board's key findings that the Canadian corporation had no
ongoing operation and that there is no connection between its business
activities and Canada.
There was no breach of procedural fairness
63 The
principles of procedural fairness do not require the Board to confront the
applicant with the accounting differences and discrepancies identified in his
own financial records. The applicant was alerted to these discrepancies by the
respondent's submissions and had ample opportunity to disclose additional
documentary evidence or to call other witnesses. He did not do so. Nor did his
counsel question him at the hearing to elaborate. He was well represented and
he produced a record to the Board of more than 1,000 pages, as well as the
record from the first appeal. He cannot now claim a breach of procedural
fairness.
64 Moreover,
Mr Durve describes himself as a financial consultant and, therefore, would have
understood and could have further explained the accounting differences and
discrepancies identified by the respondent. These records had been provided by
Mr Durve and he was aware of their contents; they did not take him by surprise,
nor did the respondent's submissions.
65 The
Board noted that while it could have benefitted from specialized accounting
knowledge, its own experience and expertise was more than adequate to allow it
to analyze the applicant's submissions and evidence. I agree that this was
within the Board's experience.
66 With
respect to Mr Durve's submissions that the Board failed to put its concerns
about his relationship with Skyport to him, I do not agree that there was any
breach of procedural fairness. The onus is on him to establish that his
business was an ongoing operation in Canada. The Board noted that he provided
very little testimony about Skyport. The Board also looked at the transcripts
from the 2010 hearing when he was questioned about what he does for Skyport
noting the brief answer and that no further questions were put to him by his
counsel. Despite the paucity of oral testimony, the contract with Skyport was analyzed
in great detail by the Board. It cannot be said that there was a breach of
procedural fairness or that the Board ignored his evidence regarding the
business relationship with Skyport.
Did the Board err in formulating and applying the
residency requirements of section 28 -- in particular subparagraph
28(2)(c)(iii) and the meaning of a Canadian business as an "ongoing
operation in Canada"?
67 Mr
Durve argues that the Board erred in interpreting the provisions of section 28
and section 61 of the Regulations
with respect to the meanings of "Canadian business" as an
"ongoing operation in Canada", and imported additional elements into
the provision including that the business have continuing activities that are
fully located in Canada. He submits that the Board did not follow the findings
or the direction of Justice Gauthier in Durve #1.
68 In
addition, the Board erred in its assessment of whether he was employed
full-time by his Canadian business while he was working abroad.
69 Mr
Durve notes that the test for "Canadian business" and "ongoing
operation in Canada" is factual -- there is no single determinative
indicator. He submits that his situation must be evaluated in light of the
nature and size of his business and the difficulties he has faced.
70 Mr
Durve raises many of the same arguments he made to the Board to support his
position that his Canadian business was an ongoing operation in Canada,
including that his business paid for the services of and rented an office from Mr
Kapoor, his settlement advisor, that he started the business after failing to
find work two years after landing in Canada, that proper business contracts and
financial viability are not legal requirements to a finding of an ongoing
operation, that business has been slow given the economic downturn and his
uncertain immigration status but that he worked full-time and there was no
indication that he received a salary from any other source, that he has an
office in Canada at Mr Kapoor's address, that all consulting fees generated by
the business were payable to 1623709 Ontario Inc, and that he had no other
residence except for the condo he purchased in Canada but does not live in. He
also argues that his travel pattern shows that his home base is in Canada as he
leaves from and returns to Canada.
71 Mr
Durve now also argues that the Board ignored the evidence of his business
relationship with Skyport, a Canadian client that retained him to do work in
India because of his business in Canada. He notes that his evidence was that
Skyport chose him because he could both outsource labour in India and provide a
business in Canada which would comply with Canadian standards and regulations.
72 Mr
Durve submits that the Board erred in narrowly interpreting "ongoing
operation" as continuing activities in Canada because an ongoing operation
should also include an ongoing "functioning entity". Mr Durve submits
that his business was indeed a functioning entity in Canada with ongoing
functions and that this should be sufficient to satisfy the test of ongoing
operation in Canada. He submits that his business functions in Canada as
reflected in its incorporation, office location and the role played by Mr
Kapoor in Canada.
73 In
addition, Mr Durve argues that the Board erred by incorporating an additional
requirement that the business be "fully" located in Canada; a
business which conducts activities abroad could never comply with being fully
located in Canada.
74 He
also submits that the Board erred in determining that he was not employed on a
full-time basis while working abroad for his Canadian company and argues that
"full-time basis" does not require paid employment. The Board found
he did not work full time because he did not get paid for all his work and his
income was low.
75 In
his written submissions, Mr Durve asserts that he was physically present in
Canada for 730 days in the five year period. He adds that when he is not in
Canada, he is working full time for his Canadian business.
76 Mr
Durve also submits that the Court should take the opportunity to craft a clear
test for the determination of "ongoing operation in Canada" to avoid
future litigation and to provide some guidance for permanent resident small
business owners, like Mr Durve, who conduct business outside of Canada.
77 The
respondent submits that section 28 of the Act as guided by paragraph 61(1)(a) of the Regulations envisions two conjunctive criteria: an ongoing
operation and one that is in
Canada. The respondent submits that the use of the present
tense in the provision signifies that an "ongoing operation" requires
a continuing activity, as noted by Justice Gauthier's decision in Durve #1 at paras 13-15. The term "in
Canada" requires that the business activity be conducted in Canada or have
a sufficient connection to business activity in Canada.
78 The
Board reasonably concluded that the applicant's business was not an
"ongoing operation" and did not have any activities that are in or
are sufficiently connected to Canada.
79 With
respect to the contracts or letters with Time Media and Lakeland, the
respondent notes that the Board considered the evidence and found it did not
mention a relationship with 1623709 Ontario Inc. With respect to Skyport, the
respondent notes that the evidence demonstrated only the intention of the
parties, but not how the business relationship ultimately played out.
80 Furthermore,
the respondent submits that the Board did not require the applicant's business
to be profitable. The Board found that the business was not ongoing due to the
lack of real business activity. In any event, profitability is inherent in a
for-profit business and the lack of an expectation of profit would reasonably
heighten the risk of a business being viewed as established for the sole purpose
of meeting the residency requirements. The respondent suggests that the Board's
comments regarding profit are obiter -- but are not unreasonable.
81 The
respondent also submits that the Board reasonably concluded that the applicant
did not work full time for his business while abroad. The Board's conclusion
was not based on his lack of revenue, but on the lack of evidence; for example,
the applicant did not provide evidence about how much time was spent providing
services to his clients and his tax returns report income that exceeds the
profits of his business.
82 The
respondent points to the record regarding the lack of evidence produced by the
applicant to support his business activities, noting that he could only produce
invoices for work done for the one Canadian company, Skyport, from 2005-2007 in
which he brokered to have accounting work done in India.
83 Similarly,
he could produce only a few invoices for services rendered for Adept, a US
company, for a few months in 2004, 2005, and for one month in 2007.
84 The
applicant could not establish that he was employed on a full-time basis by his
Canadian business. He worked 80-90 days per year from 2005-2007 providing
services to Skyport, but he could provide no information for the time worked
for Skyport in 2008 or 2009. Nor could he provide any documentation for the
hours worked for Adept in the five year period.
85 The
respondent also notes that with respect to the work done for Skyport, there is
no evidence that it had any connection to Canadian law, business practices or
accounting rules. The Board noted that the applicant produced no evidence that
he is a recognised accountant in Canada and the rate he charged to Skyport was
far below what a professional would charge.
86 The
respondent submits that the Board reasonably found that there must be a
sufficient connection between the work and Canada; this is supported by the
clear wording of subsection 61(1) of the Regulations.
· The Board did not err in interpreting or applying section 28
87 The
Board reasonably interpreted section 28 of the Act guided by section 61 of the Regulations and applied the provisions to the evidence before it. The Board
directed itself to four questions as noted in its decision and answered each in
turn. It considered a range of factors or indicia to determine whether the
applicant's business was an ongoing operation in Canada and reasonably
concluded it was not.
88 Having
determined that the business was not an ongoing operation in Canada and was,
therefore, not a Canadian business, there was no need for the Board to consider
whether the applicant could comply with his residency requirements by being
"outside Canada employed full-time by a Canadian business".
89 However,
the Board did go on to consider whether the applicant was or would have been a
full-time employee of his own business while working abroad, and reasonably
found he was not.
90 The
Board's interpretation or "test" for "ongoing operation in
Canada" was based on the language of paragraph 61(1)(a) of the Regulations. Relying on the plain meaning of
the phrase, the Board concluded that "ongoing" must go beyond the
mere fact of incorporation, and that it means "continuing activity".
The additional qualifier of "in Canada" requires that the continuing
activity be "fully" in Canada. The Board applied the test reasonably,
as it examined how the applicant's activities while outside of Canada related
to his business in Canada.
91 I
do not agree with the applicant that it would be impossible for the continuing
activities to be "fully" located in Canada, where the business is
like Mr Durve's, i.e., a self-employed person who works for his clients
wherever he is located. The requirement to be fully located in Canada does not
demand that all work and every business activity or service be carried out in
Canada but that a sufficient connection exists between work done abroad and the
ongoing operation of the business in Canada. However, in my view there must be
some business done in Canada and the proportion of business done within Canada
and outside of Canada for the Canadian business is a relevant consideration.
92 Based
on the evidence, the Board reasonably concluded that it is unclear just what Mr
Durve does for his business in Canada while he is abroad. The Board underwent a
thorough and detailed analysis of the business, including its clientele and
contracts, Mr Durve's relationship with his settlement advisor and his
revenues, and reasonably found that the business was not anchored in Canada,
but rather followed him wherever he went.
93 The
Board also reasonably concluded that Mr Durve's travel patterns do not support
his position that Canada is his home base. In fact, the applicant had no place
of residence in Canada. Although he purchased a condo in 2006, he would have
been well aware that it would not be ready for several years. Ultimately, he
only took possession in 2011, which falls two years outside the relevant
period, and he continues to not live in it. The second condo purchase was
cancelled due to delays. He used the name and address of his settlement advisor
on his application for a travel document in 2008. The Board reasonably
concluded that he still has a residence outside Canada, in India, which he
shares with his mother.
94 Mr
Durve submits that the Board's interpretation of ongoing operation as
"continuing activity" is too narrow and that by relying on dictionary
definitions and common sense, as the Board did, an ongoing operation would
equally be defined as a "functioning entity". He does not offer a
clear explanation of what a "functioning entity" means, but it would
appear to capture Mr Durve's situation; incorporation in Canada with a mailing
address and phone service and an intention to eventually reside in Canada. (I
note that the applicant expanded on this notion in post hearing submissions to
support a proposed certified question.)
95 In
my view, Mr Durve's proposed interpretation of an ongoing operation as a
"functioning entity" is not a good alternative for him. The
dictionary definition of "entity" is something that exists by itself
or is separate from other things. This would include a business.
"Function" or "functioning" has meanings depending on the
context but more generally means "operate" or "operating".
So a functioning entity is an operating entity or, in this case, an operating
business.
96 Even
if "functioning entity" could constitute an ongoing operation, the
Board reasonably found that Mr Durve had not established that he had a
functioning entity, i.e. an operating business in Canada.
97 I
suspect that Mr Durve seeks a lower standard for "functioning entity"
that would include simply some presence in Canada. Such an interpretation could
not have been contemplated by the legislation as it is intended to permit permanent
residents with businesses that have a real and hopefully beneficial connection
to Canada to retain their permanent resident status while they pursue their
business outside of Canada.
98 Although
the Board need not have considered the issue of full-time employment by a
Canadian business, it reasonably found that Mr Durve was not a full-time
employee of his business. The Board considered Mr Durve's submissions that
there is no requirement that the Canadian business be viable or for profit and
that, although he does not work fixed hours, he works full time. Contrary to Mr
Durve's characterization, the Board did not reach its conclusion because he did
not make a lot of money or was doing unpaid work, but because most of his time
was spent in business development for no specific client that had no link to
the ongoing operations of 1623709 Ontario Inc in Canada.
99 The
Board considered the not for profit business studies the applicant had produced
regarding a potential wine packaging business in India, noting that this did
not relate to the ongoing operations of his Canadian company. The Board also
noted that the letters from Time and Lakeland did not refer at all to the
Canadian corporation. The Board also compared Mr Durve's tax returns to the revenue
generated by the business and concluded that Mr Durve earned from other sources
than the corporation and that this discrepancy was not explained to the Board's
satisfaction. The Board concluded, "Since the appellant defines his
business in respect of the financial consultancy services he provides his
clients to the extent that he is doing unpaid work for no specific client it
cannot be said that he is employed on a full-time basis."
100 The
Board considered the available jurisprudence regarding subsection 61(3) of the Regulations, Bi and Jiang, and
concluded that the concept of being assigned on a full-time basis did not apply
to Mr Durve's circumstances.
101 I
agree that subsection 61(3) of the Regulations does not specifically address the situation of a self-employed
person and the Board reasonably considered a more liberal interpretation of
that provision in the context of the present facts and concluded, based on the
evidence provided by Mr Durve, that he had not established that he worked full-time
for his own business and his clients while outside Canada. I would also
reiterate that the Board did not need to pursue this having already found that
Mr Durve did not have a Canadian business.
102 With
respect to the contract with Skyport, the Board examined all the terms of the
contract with Skyport and reasonably concluded that the proposed work which
could have had a nexus with Canada, and which presumably could have established
that some of Mr Durve's work had a nexus to his business in Canada, did not
come to fruition. Moreover the contract anticipated that if that work did not
occur, bookkeeping services could be provided. The only evidence of work done
for Skyport was in fact bookkeeping and this was done in India by persons in
India. The Board reasonably concluded that this had no connection to Mr Durve's
Canadian business. The contract with Skyport ended in 2007 and as the
respondent notes, the work done for Skyport amounted to 80-90 days per year
from 2005-2007.
103 Although
Mr Durve did not establish that he was employed full-time for his business,
there will be situations where a self-employed person is able to establish that
they worked full-time for their Canadian business abroad for a period of time.
However, the starting point would be to establish that it was in fact a
Canadian business, i.e., with continuing activities in Canada. The Board
provided two such examples.
104 With
respect to the assertion in the applicant's written memorandum that he was
physically present in Canada for 730 days, this is not at all supported by the
evidence. I can only conclude that this statement is in error and was meant to
suggest that once his work abroad was taken into account, he would meet the 730
day threshold. However, this is clearly not the case. Mr Durve has not
established that his work abroad filled the gap between his 279 days in Canada
and the 730 day requirement.
105 Finally,
I do not agree with the applicant that Justice Gauthier made findings in Durve #1 that the Board failed to observe or
apply, including that Mr Durve had a presence in Canada and that he was
credible.
106 I
note that Justice Gauthier made it very clear that the reason to allow the
judicial review was the lack of justification and transparency in the scant
reasons provided by the Board. She also made it clear that on a de novo hearing all the evidence was to be
considered. A de novo hearing is
brand new and the decision maker is not bound by previous findings -- but there
were no such findings. Justice Gauthier noted that credibility was not
challenged at that time. This is not the same thing as making a credibility
finding.
107 The
Board on the de novo hearing did
not focus on Mr Durve's credibility but on the insufficiency of evidence. In
addition, a presence in Canada is not the test for residency.
108 The
Board referred to Justice Gauthier's decision throughout its decision, and
noted in particular that she had identified the need for the Board to consider
what indicia or criteria applied to the ongoing operation of a small business.
The Board did just that.
109 In
Durve#1, Justice Gauthier made it
clear that the determination in accordance with section 28 and the Regulations was for the Board to address:
· [25] Nothing in my decision should be construed as implicitly
accepting that Mr. Durve's company falls within the parameters of subsection
61(1) of the Regulations and that
it is not excluded under subsection 61(2) of the Regulations or even that the applicant would meet the requirement of
subparagraph 28(2)(a)(iii) of IRPA. The Court simply finds that this matter has not been properly
assessed on the basis of all the facts and the evidence before the decision
maker and that the said decision maker has not sufficiently explained its
reasoning to enable the Court to properly assess the validity of its
conclusion. In that respect, I note that it would be helpful if the IAD could
be more precise as to the indicia it will look at when considering the
application of the above-mentioned provisions to businesses started by new
permanent residents on a very small scale and which involve developing
clientele abroad. For example, if a one-man operation is not acceptable, it
should be clearly spelled out.
The relevant considerations
110 Mr
Durve suggests that a clear and consistent approach is needed to determine how
to apply the residency requirements for permanent residents with small or even
one person Canadian businesses.
111 The
Board identified several indicia or considerations and did not rule out that
one-man operations could fit within section 28. It provided two examples of
one-man operations that could satisfy the criteria as a Canadian business and
permit the permanent resident to work outside of Canada for that business.
Other analogous examples could be imagined, but as noted by the Board echoing
Justice Gauthier in Durve #1,
compliance with the residency requirements is a factual determination. It is
not possible to anticipate all the potential fact scenarios and set out a list
of criteria which if met, will lead to compliance with the residency
requirement. Some criteria will weigh more heavily than others depending on the
nature of the business, the time spent within and outside of Canada and,
importantly, the nexus or connection between the work outside Canada and the
business in Canada.
112 Where
the business is a one-man operation with no employees in Canada, more focus
will be put on the nature of the business in Canada and how the work conducted
by the one-man operation or self-employed person relates to the Canadian
business.
113 One
of the examples cited by the Board is that of an accountant's business with an
established and ongoing operation in Canada contracted to provide services to a
Canadian business outside Canada on a temporary basis. This contemplates that
the permanent resident conducts business and provides these same services in
Canada and that the techniques, business practices, expertise, necessary
accreditation or principles applied would be governed by or informed by
Canadian practices and would guide the work for the other Canadian business
outside Canada. In other words, there is a Canadian "product" being
delivered in the form of the services provided by the self-employed or
"one-man "operation.
114 I
have set out the indicia or considerations noted by the Board and have
elaborated on some, but I note that this is not a checklist. The applicability
of these considerations will vary depending on the facts, as will the weight
attached to the various considerations.
115 The
basic principles remain that: the onus is on the permanent resident to provide
clear and cogent evidence that his business is a Canadian business (an ongoing
operation in Canada) and that work done outside Canada is full-time work for
the Canadian business; the inquiry is a question of fact to be determined by
the nature and the degree of the applicant's business activities in each
individual case; and, the focus is on the nature of an applicant's business
activities while outside of Canada in relation to the business of his Canadian
company.
116 An
ongoing business is a business with continuing activities in Canada. This
determination takes into account what the business actually does within Canada,
and how this is demonstrated or documented.
117 In
assessing whether the business is an ongoing operation, the relevant
considerations will vary with the nature and size of the business. Where the
business is a self-employed person or a very small business, the goods or
services, which would include advice, must be identifiable.
118 The
decision maker should consider whether there are any employees (even
part-time), associates or contractors in Canada that ensure the business
continues to operate in Canada and that services are or could be provided in
Canada while the permanent resident is outside Canada conducting business or
providing the services of the Canadian business.
119 The
corporation's physical office is a consideration, even in the day and age of
the virtual office, and notwithstanding that the business may be able to provide
services from elsewhere, including whether there are any employees working from
that location (even part- time) and whether any work is done or services
provided from that location. The requirement to be "in Canada"
involves consideration of the business activities or services carried out in
Canada and the link between the business carried on outside Canada with the
business in Canada. It is not essential that all work and every business
activity or service be carried out in Canada but that a sufficient connection
or nexus exists between work done abroad and the ongoing operation of the
business in Canada. However, as noted above, some business should be done in
Canada and the proportion of business done within Canada and outside of Canada
is a relevant consideration.
120 The
nature of business activities outside Canada and how they advance the overall
goal of the business in Canada, and their connection or nexus to the Canadian
business is a significant consideration. For example, whether the permanent
resident has qualifications or accreditations in Canada that are relied on by
those he provides services to outside of Canada and whether the permanent
resident uses Canadian business principles and practices or rules of his or her
profession guided by Canadian standards in his or her work abroad are all
relevant to the issue of nexus.
121 The
permanent resident's pattern of travel, residence in Canada and residence
outside of Canada (recognizing that the permanent resident may have both) are
also relevant considerations.
122 With
respect to assessing whether the permanent resident was employed full-time for
the Canadian business, again the nature of the business must provide the
context because a self-employed person cannot "assign" him or herself
as contemplated by the Regulations. Records of the time spent for specific services provided and
clients' businesses will be informative, including time spent for work that is
not remunerated and the reason for this.
123 Unpaid
work could qualify as business activities, but it should relate to the ongoing
business in Canada. Considerations include whether there is a business plan
that forecasts the unpaid or developmental work needed to advance the business
with a view to future paid work and the proportion of paid work compared to
unpaid work.
124 The
revenue of the business should be considered, including whether the financial
statements of the business reflect the described business activities and can be
reconciled with invoices. Business records that document how the time was spent
by the permanent resident on business abroad would be useful for the decision
maker. If the permanent resident's personal income exceeds the income from the
claimed business activities, it will be more difficult to establish that it is
full-time work for the Canadian business.
Did the Board err in its analysis of the H&C
factors by failing to consider the jurisprudence?
125 Mr
Durve submits that the Board should have approached his appeal from the
perspective of retaining his permanent resident status, i.e., positively, as
established by the Supreme Court of Canada in Chieu v
Canada (Minister of Citizenship and Immigration), 2002
SCC 3, [2002] 1 SCR 84 [Chieu].
126 He
suggests that the Board did not consider the principles from the jurisprudence
in assessing his H&C grounds and, in particular, it ignored his unique and
special circumstances, which, he submits would evoke the sympathy of the
reasonable person (Chirwa v Canada (Minister of Manpower
& Immigration), [1970] IABD No 1 [Chirwa]). He is an unmarried man, growing
older, whose only close family is abroad and who has been working for several
years to build his Canadian business. His only residence is in Canada.
127 He
is financially well-established and will benefit Canada in the long-term. He
submits that the loss of permanent resident status is too harsh a sanction
given his intention to simply do well in Canada. He notes that the Board had
previously identified the relevant factors to consider in Hussain v Canada (Minister of Citizenship and Immigration), [2010] IADD No 552 at para 42 [Hussain] which should have been applied.
128 The
respondent notes that there is no basis to find the assessment of the H&C
grounds to be unreasonable. In addition, the Chirwa standard is not the governing test for H&C relief nor do the Hussain factors necessarily lead to H&C
relief.
The H&C assessment is reasonable
129 Paragraph
28(2)(c) permits the decision maker to exercise its discretion to relieve
against the breach of the residency requirement where there are H&C
considerations. There is no entitlement to an H&C exemption. The Board
reasonably declined to exercise its discretion.
130 Although
the applicant suggests that the Hussain factors should have been considered, the Board considered similar
factors although it did not specifically refer to the jurisprudence. The
relevant factors were first articulated in Ribic v
Canada (Minister of Employment and Immigration), [1985]
IABD No 4 [Ribic] and were
endorsed by the Supreme Court of Canada in Chieu at para 40, albeit in the context of the removal from Canada of a
permanent resident for misrepresentation. In Tai v
Canada (Minister of Citizenship and Immigration), 2011
FC 248, [2011] F.C.J. No. 289, Justice Shore noted that these factors had been
extensively relied on for H&C assessments and he applied these same factors
in the context of section 28.
131 The
Ribic factors are:
· a)
The degree of
establishment in Canada including employment and skills training;
· b)
The reasons for leaving
Canada;
· c)
The reasons of continued
or lengthy stay abroad;
· d)
Whether any attempts
were made to return to Canada at the first opportunity;
· e)
The family support
available in Canada;
· f)
The impact that the
removal has on a person and his family;
· g)
The hardship which the
appellant would suffer if he was removed from Canada.
132 While
the Board did not refer to or neatly organize the Ribic factors, the decision clearly indicates that it considered and
balanced these same factors. The Board considered Mr Durve's initial
establishment in Canada and his efforts since that time. It noted that while he
may have a relationship with Canada, he has not resided here and he is only an
occasional visitor. The Board acknowledged the 2006 purchase of a condo but
given that he did not take possession of it until 2011, reasonably found that
it was not much evidence of establishment.
133 The
Board examined his many departures from Canada and his evidence that the reason
was for business, to attend to his father's estate and to attend to his mother.
His lengthy stays abroad were for the same reasons. The Board noted that
although he returned to Canada from his travels, it was not with the intention
of remaining permanently.
134 Given
that Mr Durve has no family here and his only sister is in the US, the Board
found no ties to Canada.
135 The
Board also found that he would not suffer any hardship, nor would his few
family members abroad, due to his loss of permanent resident status because he
is self-employed and he has always been able to work from wherever he is.
136 The
Board was entitled to conclude that, although Mr Durve demonstrated a desire to
remain in Canada through the great effort he expended in pursuing his appeals,
these efforts are not unique nor do they constitute special circumstances
warranting the discretion in his favour.
137 I
agree with the respondent that Chirwa has not been adopted by the Courts for other H&C determinations.
For example, see Serrano Lemus v Canada (Minister of
Citizenship and Immigration), 2012 FC 1274, [2012]
F.C.J. No. 1374, where Justice Near (as he then was) considered a similar
argument, albeit in the context of H&C applications under subsection 25(1)
of the Act.
138 Regardless,
there was no need for the Board to explicitly refer to Chirwa when it clearly considered all the applicant's submissions and
reasonably concluded that there were no unique or special circumstances. While
the applicant's view may be that his situation evokes sympathy to the extent
that the Board should exercise discretion in his favour, the Board's assessment
did not lead it to this conclusion.
139 I
agree that the loss of permanent resident status is a harsh penalty for anyone
who is attempting to transition to permanent residence in Canada. While the
applicant hopes to one day be fully integrated into Canadian society and has
experienced personal setbacks due to the economic downturn and the health of
his parents, the requirements of Canada's immigration laws are clear and the
residency requirements, which demands physical presence for 730 days out of a
five year period, or 40%, and provides alternative ways to establish residency,
are not onerous. Mr Durve had ample time since 2002 and particularly since 2004
to establish himself in Canada and/or to establish a nexus between his work
abroad and his Canadian business.
Proposed Certified Question
140 Mr
Durve proposed two questions for certification and has made submissions in
support of the questions highlighting their general importance, which to some
extent reiterate the arguments made on judicial review.
141 He
reiterates the circumstances of his business, asserting that his Canadian
corporation has continued to operate in Canada through Mr Kapoor acting on his
behalf.
142 Mr
Durve submits that the Board's finding that paragraph 61(1)(a) of the Regulations which defines Canadian business as
an "ongoing operation in Canada" requires continuing activities fully
located in Canada is incorrect in law and unreasonable and will thwart the
development of many legitimate businesses.
143 He
again submits that the Board relied on dictionary definitions in reaching that
interpretation which would also support the meaning of ongoing operation as a
continuing "functional entity" (or "functioning entity" as
referred to earlier). He submits that his business was and is a continuing
functional entity in Canada and that such an interpretation is essential for
small and other businesses that do their work entirely outside Canada with only
a functional business presence in Canada.
144 He
argues that it could not be the intent of the legislators to thwart the
development of businesses where work is done out of Canada but the business is
in Canada, markets itself as Canadian and brings income into Canada.
145 He
further argues that the Board found that he was not fully employed because his
unpaid work was not taken into account. He notes that people may work long
hours unpaid to build a business. The Board's conclusion may impact others
seeking to maintain their permanent resident status while working abroad and
the proposed question is one of general importance.
146 The
two questions proposed for certification are:
· 1. Does the "ongoing operation of a Canadian business referred
to in paragraph 61(1)(a) of the IRPA Regulations require that the business be
engaged fully in its business activities in Canada, or is it sufficient that
the business be a functional entity, whose activities are primarily conducted
outside of Canada.
· 2. Does being "employed on a full time basis" within the
meaning of subparagraph 28(2)(a)(iii) of the IRPA only include full time paid
employment or can it also include work which is not paid.
147 Mr
Durve submits that both questions would be determinative because if the Board
had accepted his unpaid work in assessing whether he was outside Canada
employed on a full-time basis for his Canadian company and had accepted that
the functioning presence of his company in Canada through Mr Kapoor constituted
an ongoing operation, then the outcome may have been different.
148 The
respondent submits that the questions do not meet the criteria for a certified
question as they do not raise a serious question of general importance that is
dispositive of the appeal. The present facts raise only a narrow issue of the
one-man business whose operations are conducted significantly outside of
Canada. Moreover, the meaning of "ongoing operation in Canada" can be
determined by principles of statutory interpretation and the term "in
Canada" requires a significant connection to business conducted within
Canada or linked to Canadian business activities. This is an issue of statutory
interpretation and was reasonably interpreted by the Board.
149 The
respondent adds that the second proposed question regarding full-time
employment, would not be dispositive. The Board determined that Mr Durve did
not establish that he worked on a full-time basis performing work for the
clients of his corporation nor did he provide evidence of how much work he did
to seek new business for his corporation. Even if the questions were answered
in the applicant's favour, it would not be dispositive because he could not
establish the extent of his unpaid work for his corporation.
No question for certification
150 The
test for certifying a question was set out by the Federal Court of Appeal in Canada (Minister of Citizenship and Immigration) v Liyanagamage, [1994] F.C.J. No. 1637, 176 NR 4 at para 4. The question must be
one which transcends the interest of the immediate parties to the litigation
and contemplates issues of broad significance of general application and must
be determinative of the appeal.
151 Or,
as more simply put in subsequent cases, in order to be a certified question the
question must be a serious question of general importance which would be
dispositive of the appeal.
152 Neither
of the questions proposed by the applicant meets the test.
153 The
first proposed question seeks to gain the Court's possible approval of an
interpretation of a Canadian business and ongoing operation in Canada which is
not supported by the language of the Act or the Regulations. It
raises a policy issue which should be left to Parliament; whether a permanent
resident can comply with their residency requirements through a business which
is "primarily conducted abroad". In my view, this is not the
intention of the legislation, which currently provides several ways for a
permanent resident to meet their residency requirements, which as noted above
are not particularly onerous, and which contemplates a connection to Canada,
that would not be satisfied where the business is primarily conducted abroad.
154 I
agree with the respondent that a functioning entity whose primary business
activities are conducted outside of Canada with no other connection to Canadian
business activities cannot be said to have an ongoing operation in Canada.
155 Mr
Durve's approach would appear to contradict subsection 28(2) which makes it
clear that the definition of Canadian business does not include a business that
is primarily to allow a permanent resident to meet their residency requirements
while continuing to reside outside of Canada.
156 As
noted above, 'functioning entity" or "functional entity" has no
clear meaning and likely means "operating entity/business" and
therefore does not differ from the notion of ongoing operation which the Board
reasonably interpreted as continuing activities. The argument for a different
or broader interpretation is circuitous. Moreover, the Board found that Mr
Durve had not established what his business did in Canada -- i.e. there was no
evidence to establish it was either a functioning entity or an ongoing
operation in Canada.
157 The
second question would only be dispositive if the applicant had established,
first, that he had a Canadian business and, second, that he had evidence to
support his full-time work. This is a factual determination and the Board found
that he could not so establish. Whether the work was paid or unpaid was not the
issue, he could not establish what work was done. As noted above, some unpaid work
may be considered as full-time work for the Canadian business if there is
evidence to establish that it is done in furtherance of future paid work or is
part of the business plan, and the amount of unpaid work is not
disproportionate to the paid work.
JUDGMENT
THIS COURT'S JUDGMENT is that:
· 1.
The application for
judicial review is dismissed.
· 2.
No question is
certified.
KANE J.
