ACL Canada Inc. v. Canada
T-1548-88
MacKay J.
8/10/93
31 pp.
Appeal by way of action under Customs Act, s. 135 from Minister's decisions respecting two forfeitures ordered in relation to two seizures by Customs and Excise -- First forfeiture concerning goods seized pursuant to ss. 110, 122 -- Second forfeiture "ascertained forfeiture" ordered pursuant to s. 124 -- Plaintiff seeking declarations entitled to repayment of sums forfeited, order quashing Minister's decisions based on perceived unfairness in process in assessing amounts to be forfeited, declaration no administrative penalty payable by plaintiff, interest on any amounts overpaid -- In fulfilment of part of obligations to Atlantic Container Lines, international transatlantic ocean container shipping consortium, plaintiff overseeing repair of temperature-controlled containers used in international shipping -- Proving impossible for technical department to fulfil regular duties and do paperwork entailed in importing, paying duty, taxes on parts to be installed in containers for export, and applying for drawback -- On own initiative, plaintiff's employee importing parts without completing proper customs documentation -- No intention to deprive Revenue Canada of any duty or taxes -- In April 1986 Customs and Excise seizing three small parts found in storage at plaintiff's Halifax terminal not reported to Customs when imported -- Halifax office unaware of existence of those parts, believed to have been misdirected to it -- $100 fine imposed and paid -- On August 17, 1987 Customs and Excise seizing spare parts in plaintiff's inventory, alleging parts smuggled or unreported in contravention of s. 12 -- Under s. 122, goods seized as forfeit as result of contravention of Act or regulations becoming subject to forfeiture from time of contravention -- Plaintiff paying $41,424.80 under protest for release of parts pursuant to s. 117(a)(ii) -- That amount including penalty of three times duty and taxes evaded calculated according to chart in Customs Enforcement Manual for repeat offence of smuggling -- In considering this repeat offence, Customs and Excise considering 1986 infraction as prior offence -- Plaintiff requesting Minister's decision pursuant to s. 129 -- On basis of information obtained from plaintiff about other unreported parts, Customs and Excise serving second seizure notice dated September 17, 1987 requiring $112,360.70 as payment to be forfeited pursuant to s. 124 -- Plaintiff again paying under protest and Minister's decision in relation to ascertained forfeiture again requested pursuant to s. 129 -- Adjudicator determining August 17 seizure for not reporting, but repeat offence and unascertained forfeiture smuggling, but not repeat offence -- By notices dated May 6, 1988 Minister deciding contraventions of Act and regulations, but reducing amount of penalty in respect of each forfeiture to two times total duty and taxes owing -- Plaintiff receiving Minister's decisions May 13, 1988 -- S. 135 requiring person requesting Minister's decision under s. 131 to appeal within 90 days of notification by way of action to Federal Court, Trial Division -- Statement of claim filed August 5, 1988 relating only to Minister's decision concerning August 17 seizure -- On August 10 plaintiff advising defendant intended to file amended statement of claim referring to both decisions of Minister -- Amended statement of claim filed August 15, 1988 -- (1) Defendant alleging appeal with respect to Minister's decision concerning ascertained forfeiture out-of-time in light of 90-day limitation period for commencing action established by s. 135 -- Under s. 149 notice effective on May 9, 1988, but even if date of reception effective date, amended statement of claim filed later than date specified by s. 135(1) -- S. 135(2) providing Court's Rules "applicable to ordinary actions apply in respect of actions instituted under s. 135(1)" -- Action instituted by statement of claim filed August 5, however defective -- Plaintiff entitled to amend statement of claim without leave since at time did so defendants had not pleaded to original in accord with R. 421(1)[cad 211]Defendant not challenging amendment pursuant to RR. 422 or 419 -- RR. 424, 427 giving Court discretion to allow amendments in appropriate cases, not directly in play as no motion before Court to permit amendment -- Ordinarily amendments to pleadings deemed effective from date of original pleading, August 5, unless amendment not acceptable if subject of motion to amend original statement of claim pursuant to RR. 424, 427 -- Cause of action concerning Minister's decision in regard to ascertained forfeiture within scope of amendments contemplated under R. 427 as new cause of action relating to second decision of Minister and not included in original statement of claim -- Arising out of substantially same facts as other seizure, cause of action in respect of which relief already claimed -- Actions basically same, penalties applicable to actual and ascertained forfeitures in accord with Enforcement Manual same -- Defendant unable to claim surprise or prejudice because of amendment -- Were there motion before Court to permit amendment, would be in interests of justice to permit such amendment under RR. 424, 427 -- Amended statement of claim accepted as framing full claim in action and amendments effective as of date of filing of original statement of claim, date within s. 135 limitation period -- (2) S. 135, providing appeal from Minister's decision by one who requested decision under s. 131 precluding appeal of determination under s. 133 -- S. 135 providing appeal in relation to Minister's decision under s. 131, which provides for decision only with respect to issue of whether contravention of Act or regulations -- Privative clause provided by ss. 123, 127 precluding review of forfeiture of goods seized or money held as forfeit "except to the extent and in the manner provided by s. 129" -- S. 129 provides opportunity to request decision of Minister under s. 131 -- Any appeal, both within department under s. 129 by requesting decision of Minister and by appeal to Court under s. 135 from Minister's decision to review of decision specified under s. 131 i.e. whether contravention of Act or regulations, limited -- Insulating from appeal penalty imposed in event contravention of Act carries on long-standing regime under past Customs Acts -- Minister's discretion in relation to penalties not unlimited -- Act and regulations specify maximum penalties -- Court does have jurisdiction under Federal Court Act, ss. 18, 18.1 to consider whether discretion to impose penalties, consequent upon contravention of Act, exercised in accordance with law -- Presenting anomalous situation as Customs Act providing for appeal from Minister's decisions by way of action within 90 days of notification of decision, and Federal Court Act requiring relief be sought by application for judicial review within 30 days of decision -- Parliament might consider whether both decisions of Minister under ss. 131 and 133 should be subject to review in single proceeding by way of appeal or by application for judicial review -- (3) Plaintiff's case for relief under Federal Court Act, s. 18 as it was when action commenced based on perceived unfairness in process followed by Adjudications Division acting for Minister -- Reports and correspondence from customs officers responsible for both seizures not made available to plaintiff prior to determinations -- Customs enforcement procedures only provided after action commenced -- Process followed not complying with Minister's duty of fairness -- Adjudications Division not providing to plaintiff information or evidence upon which relied in reaching its decisions, and plaintiff not in position to fully know case to be met or allegations or charges against it -- At very least, original reports of Customs officers relating to seizures, and any subsequent comments from them, particularly comments relating to submissions made by plaintiff ought to have been provided to plaintiff with opportunity to respond before decisions made -- Minister's determinations set aside -- Since contravention under Act only matter for consideration under s. 135, and plaintiff conceding contravention, action dismissed -- Appeal in relation to amounts declared as forfeit also dismissed since not within Court's jurisdiction to review under s. 135 -- Declarations plaintiff entitled to repayment and return of sums forfeited and that no administrative penalties payable relating to determinations of Minister concerning amount forfeited or remitted under s. 133 and outside Court's jurisdiction under s. 135 -- Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, ss. 12, 110, 117, 118, 122, 123, 124, 127, 129, 130, 131, 133, 135, 149 -- Federal Court Rules, C.R.C., c. 663, RR. 419, 421, 422, 424, 427 -- Federal Court Act, R.S.C., 1985, c. F-7, ss. 18 (as am. by S.C. 1990, c. 8, s. 4), 18.1 (as am. idem, s. 5).