SCC Rules in Mavi Immigration Case

On June 10, 2011, the Supreme Court of Canada released its decision in Canada (Attorney General) v. Mavi, 2011 SCC 30, a case involving the enforcement of immigration sponsorship debts. Pursuant to the Immigration and Refugee Protection Act (IRPA), a person who sponsors a family member to come to Canada must sign an undertaking promising to repay any social assistance monies received by the sponsored immigrant during the period of the undertaking, which can be three to 10 years depending on the nature of the relationship between the sponsor and the family member.

Each of the eight sponsors involved in this case alleged that they defaulted on their undertakings for reasons beyond their control. For example, one sponsor sponsored her mother to come to Canada. Shortly after arriving, her mother had a sudden debilitating stroke that required institutional care, the cost of which was being claimed by Ontario against the sponsor. Two of the other sponsors are women who defaulted on their undertakings because they were fleeing domestic abuse.

In a joint application to the Superior Court of Justice, the sponsors argued that the language of s. 145(2) of the IRPA, which provides that a sponsorship debt “may be recovered,” confers a discretion whether to enforce a sponsorship debt. The sponsors further argued that the governments owed them a duty of fairness when exercising their discretion. Canada and Ontario argued that sponsorship undertakings are contracts and therefore the relationship between sponsors and the governments are governed by the law of contract.

The applications judge dismissed the sponsors' applications. The applications judge found that the legislative scheme showed a Parliamentary intent to create a collection procedure that was “purely administrative in nature.” The applications judge also accepted the governments' argument that the relationship was governed by the law of contract.

The Ontario Court of Appeal overturned the decision of the applications judge. After considering the legislative scheme and the wording of the undertakings themselves, the Court of Appeal concluded that the governments have a case-by-case discretion whether to enforce sponsorship debts, and owe sponsors a duty of fairness which includes a process through which they can explain their individual circumstances. The Court of Appeal also found that Ontario fettered its discretion under the IRPA.

On appeal to the SCC, Canada and Ontario again argued that there can be no duty of fairness because the relationship is essentially contractual in nature. Canada also argued that discretion to forgive or reduce a debt can only be done pursuant to the Financial Administration Act. These arguments were rejected by the SCC. The SCC held that the mere existence of the undertaking did not extricate the relationship from the public law context. The SCC also stated that the Financial Administration Act was a statute of very general application and does not preclude Parliament from enacting a more specialized collection regime like the one in the IRPA.

The SCC concluded that the governments do exercise a discretion, and owe a duty of fairness in the exercise of that discretion. However, the discretion and duty of fairness must be understood within the context of the particular enforcement regime. The SCC noted that the issue was statutory debt collection. The SCC also noted that sponsors undertake these obligations in writing. They understand or ought to understand that default may have serious financial consequences.

The SCC held that the governments have a limited discretion to defer enforcement action having regard to a sponsor's circumstances and to enter into agreements respecting terms of payment, but the discretion does not extend to the forgiveness of a debt. The SCC acknowledged that the governments have the discretion to enter into an agreement requiring a sponsor to pay $20 a month on a debt, even if such an agreement will never result in the full amount being paid. The SCC reviewed Ontario's policies and procedures and concluded that it did not fetter its discretion.

The SCC also held that, while the governments owe sponsors a duty of procedural fairness, the duty does not require elaborate processes. Nevertheless, it does oblige a government, prior to enforcing a debt: to notify a sponsor at his or her last known address of the claim; to afford the sponsor an opportunity within limited time to explain in writing his or her relevant personal and financial circumstances that militate against immediate collection; to consider any relevant circumstances brought to its attention keeping in mind that the undertakings were an essential condition of the sponsorship; and to notify the sponsor of the government's decision without the need to provide reasons for the decision. The SCC rejected the sponsors' argument that the governments should be required to provide reasons for the enforcement decision.

Lucas Lung of Lerners LLP and Lisa Loader of the Community Legal Clinic - Simcoe, Haliburton, Kawartha Lakes, acted for the respondents Pritpal Singh Mavi, Maria Cristina Jatuff de Altamirano, Oleg Grankin, Raymond Hince and Homa Vossoughi at the Ontario Court of Appeal and also brought the court challenge to the Supreme Court of Canada.

Lorne Waldman and Jacqueline Swaisland of Lorne Waldman & Associates acted for the respondent Nedzad Dzihic.

Hugh Evans acted for the respondents Rania El-Murr, Hamid Zebaradami.

Urszula Kaczmarczyk and Christine Mohr of Justice Canada acted for the appellant the Attorney General of Canada.

Robert Ratcliffe, Sara Blake and Baaba Forson acted for the appellant the Attorney General of Ontario.

Ranjan Agarwal and Daniel Holden of Bennett Jones LLP acted for the intervenor the South Asian Legal Clinic of Ontario.

Chantal Tie, Carole Dahan and Aviva Basman acted for the intervenor the Canadian Council for Refugees.

Geraldine Sadoway acted for the intervenor the Metropolitan Action Committee on Violence against Women and Children.

Guy Régimbald of Gowling Lafleur Henderson LLP acted for the intervenor the Canadian Civil Liberties Association.