The Queen (Plaintiff)
v.
Sun Parlor Advertising Company, Warren Parr
and Adelaide Benton (Defendants)
Trial Division, Urie J.—Windsor, October 16;
Ottawa, October 22, 1973.
Customs—Failure to report imported goods to customs
officer—Automatic forfeiture—Customs Act, R.S.C. 1970, c.
C-40, secs. 180, 205.
On several occasions between 1968 and 1970 defendants
imported certain photographic supplies from the United
States at Windsor, Ontario, by automobile. On no occasion
did they make a written report respecting the imported
goods to a customs officer and on each occasion they were
permitted to pass without paying duty. The goods were in
fact dutiable.
Held, while the goods were not "smuggled or clandestine
ly introduced into Canada" within the meaning of section
192 of the Customs Act, R.S.C. 1970, c. C-40, an automatic
forfeiture of the goods occurred under section 180 for
failure to make a written report of the goods to a customs
officer and under section 205 for having possession of
goods unlawfully imported.
The King v. Bureau [1949] S.C.R. 367; Marun and
Minogue v. The Queen [1965] 1 Ex.C.R. 280, referred
to.
ACTION.
COUNSEL:
Paul Evraire for plaintiff.
J. G. Quinn for defendants.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Bondy, Kirwin & Associates, Windsor, for
defendants.
URIE J.—This is a claim on behalf of the
plaintiff to recover the sum of $2122.03 from
the defendants pursuant to the provisions of the
Customs Act, being the duty paid value of
goods imported by the defendants from the
United States during the period 1 August 1969
to 20 November 1970 and for a further sum of
$199.14 representing the duty payable on goods
imported by the defendants from the United
States during the period 26 June 1968 to 30 July
1969.
The parties filed an Agreed Statement of
Facts, a summary of which will concisely set
forth the issues.
The defendants, Warren Parr and Adelaide
Benton, were, at all material times from June
26, 1968 to November 20, 1970, partners in Sun
Parlor Advertising Company, a printing enter
prise licensed as a manufacturer under the
Excise Tax Act and carrying on business in the
City of Windsor in the Province of Ontario. On
October 2, 1964 the defendant Warren Parr, on
behalf of Sun Parlor Advertising Company,
wrote to the Department of National Revenue,
Customs and Excise Division, requesting a
ruling as to whether or not offset printing plates,
both metal and paper, and chemicals for these
plates and sheet film were allowed to enter
Canada from the United States duty free. An
acknowledgement of the receipt of this letter
was given by the Department on October 16,
1964 and on October 23, 1964 J. B. Finn, on
behalf of the Department, wrote to the defend
ant, Sun Parlor Advertising Company, to the
attention of the defendant Parr, in part as
follows:
In order to advise you definitely in this matter the Depart
ment will require descriptive literature published by the
manufacturer concerning the nature and function of the
offset printing plates and the sheet film. With respect to the
chemicals the Department will require literature in which
their components are identified. In the absence of such
literature the Department will require clearly identified sam
ples of the chemicals which you propose to import.
On January 6, 1965 Mr. Parr replied to Mr.
Finn's letter as follows:
Concerning your letter of October 23, 1964, we are sending
you requested literature and information which was request
ed by you at that time.
Enclosed please find descriptive literature published by the
manufacturer concerning the nature and function of offset
printing plates and sheet film.
Enclosed you will find samples of various newspapers and
school books which we propose to do from the materials
listed above.
If you need additional information concerning the tariff
classification of these plates, chemicals, and films, please let
us know.
A form letter acknowledging Mr. Parr's letter
of January 6, 1965 was sent to the defendants.
All parties agree that these letters were
despatched and received. However, on Febru-
ary 19, 1965, Mr. Finn wrote to Sun Parlor
Advertising Company to the attention of Mr.
Parr the following letter which Mr. Parr denies
ever having received:
This is further to the Department's interim reply of January
12, 1965 referring to your letter of January 6th concerning
the tariff classification of offset printing plates, chemicals
and films which you propose to import for use in the
production of various articles of printed matter.
Based on the information provided I may advise that offset
printing plates are dutiable according to the component
material of chief value or the finish thereon. If the compo
nent material is aluminum tariff item 354 applies at 221% ad
valorem.
Blank Lithographic film imported for use in the production
of printing plates is dutiable under tariff item 187 at 20% ad
valorem.
In order to advise you concerning the tariff classification of
the chemicals to which you refer the Department will
require samples, in the condition as imported, along with
copies of the labels affixed to the containers in which the
chemicals are imported.
The above-mentioned rates of duty are those applicable
under the Most-Favoured-Nation Tariff.
You are, no doubt, familiar with the application of sales tax.
Both Mr. Parr and Mrs. Benton further stated
that no further correspondence was directed to
the Department by either of them on behalf of
the defendant Sun Parlor Advertising Company
nor did they receive any further correspondence
from the Department.
During the period from June 26, 1968 to
November 20, 1970 the defendant Parr admit
ted having imported from the United States
photographic supplies having a duty paid value
of $3656.97. The actual value of the goods was
$3201.85, the balance of the duty paid value
being the duty imposed of $455.12. The parties
agree that at the time of importation the defend
ant Parr did not make a written report to the
collector or proper officer at the custom-house
of all the goods in the vehicle and of the quanti-
ties and values of such goods, nor did he make
due entry of the said goods in accordance with
the requirements of section 18 of the Customs
Act. Neither did he deliver to the collector or
other proper officer at the port of entry an
invoice or a bill of entry for such goods as
required by section 20 of the Customs Act, nor
did he pay any duty in respect of the said goods
as required by section 22 of the said Act.
None of the goods imported were warehoused
but were used by the defendant Sun Parlor
Advertising Company for the most part in pro
ducing books to be shipped back to the United
States for the Detroit police and firemen. Ulti
mately Sun Parlor Advertising Company
received from the Department of National
Revenue a letter of demand for payment of the
duty paid value of the goods in question in the
sum of $3656.97 followed after the requisite
time lapse by a notice of seizure. The defendant
Sun Parlor Advertising Company objected to
the seizure following which a ministerial deci
sion was given to Sun Parlor Advertising Com
pany confirming the decision and the defendant
Sun Parlor Advertising Company, through its
solicitors, subsequently notified the Department
of non-acceptance thereof.
The defendant Benton testified that on
August 5, 1964, she brought in from the United
States in her automobile what was described as
"photo base paper" having a value of $42.82
and was given an appraisal note by a customs
officer at the Port of Windsor showing that
there was no duty payable with respect thereto.
The defendant Parr in his testimony stated that
he wrote the letters to the Department of
National Revenue after the importation of the
goods by Mrs. Benton above referred to
because some printers in Windsor had had
trouble in importing photographic material for
the printing trade and others had not. However,
he stated that he never received a definite ruling
in reply to his inquiry from the departmental
officials in Ottawa and admitted that he had not
made any further inquiries except through the
local office at Windsor. During the period in
question, namely between June 26, 1968 and
November 20, 1970, Mr. Parr admitted the
importations referred to in the Exhibits to the
Agreed Statement of Facts but stated that on
each occasion he had brought the goods in the
back seat of his Renault automobile, had been
questioned by a uniformed customs officer at
either the Windsor bridge or tunnel from
Detroit, had advised that official that the ma
terial was "stuff for an American book" and
when asked if it was going back to the United
States, he answered in the affirmative and in
each of 31 cases was permitted to pass without
filing any written material or paying any duty.
The material he was bringing in was bulky, was
plainly visible in the back seat of his car and in
each case had attached thereto a packing slip
listing the contents of the boxes. The packing
slip did not set forth the value of the individual
items contained in the boxes and, he states, was
never examined by the customs official. The
importations were used in the production of
books for use by the Detroit police and firemen.
The goods were ordered from a supplier in
Detroit and the invoice was sent by that supplier
to the defendant Sun Parlor Advertising Com
pany at its Windsor address. The goods them
selves were delivered to the Detroit Eagles
Lodge, of which Mr. Parr was a member, and he
would pick the goods up when he attended
meetings of the Lodge, usually on Wednesday
or Saturday nights. The importations, therefore,
would generally take place between the hours of
11.00 p.m. and 12.00 midnight. He admitted
that he had never sent samples of the importa
tions to the Department of National Revenue at
Ottawa as requested by Mr. Finn although he
believes that he sent a piece of photo based
paper to him.
Mr. Parr said, however, that on a number of
occasions to support his position with the cus
toms officer at the port of entry that the goods
in his car were duty free, he produced the
appraisal note (Exhibit D) which was obtained
by Mrs. Benton on August 5, 1964.
An importer of goods from a foreign country
has three obligations under the Customs Act:
(a) to declare the goods in the manner pre
scribed by section 18 of the Act,
(b) to enter the goods in the manner pre
scribed by sections 20, 21 and 51 of the Act,
and
(c) unless the goods are warehoused, to pay
duty on the imported goods as required by
section 22 of the Act.
The applicable sections read as follows:
18. Every person in charge of a vehicle arriving in
Canada, other than a railway carriage, and every person
arriving in Canada on foot or otherwise, shall
(a) come to the custom-house nearest to the point at
which he arrived in Canada, or to the station of the officer
nearest to such point if that station is nearer thereto than
a custom-house;
(b) before unloading or in any manner disposing thereof,
make a report in writing to the collector or proper officer
at such custom-house or station of all goods in his charge
or custody or in the vehicle and of the fittings, furnishings
and appurtenances of the vehicle and any animals drawing
it and their harness and tackle, and of the quantities and
values of such goods, fittings, furnishings, appurtenances,
harness and tackle; and
(c) then and there truly answer all such questions respect
ing the articles mentioned in paragraph (b) as the collector
or proper officer requires of him and make due entry
thereof as required by law.
20. The person entering any goods inwards shall deliver
to the collector or other proper officer
(a) an invoice of such goods showing the place and date of
purchase and the name or the style of the firm or person
from whom the goods were purchased, and a full descrip
tion thereof in detail, giving the quantity and value of each
kind of goods so imported; and
(b) a bill of entry of such goods, in such form as is
appointed by a competent authority, fairly written or
printed, or partly written and partly printed, and in dupli
cate, containing the name of the importer, and if imported
by water, the name of the vessel and of the master, and of
the place to which bound, and of the place, within the
port, where the goods are to be unladen, and the descrip
tion of the goods, and the marks and numbers and con
tents of the packages, and the place from which the goods
are imported, and of what country or place such goods are
the growth, produce or manufacture.
21. The quantity and value of any goods shall always be
stated in the bill of entry thereof, although such goods are
not subject to duty, and the invoice thereof shall be pro
duced to the collector.
22. (1) Unless the goods are to be warehoused in the
manner provided by this Act, the importer shall, at the time
of entry,
(a) pay or cause to be so paid, all duties upon all goods
entered inwards; or
(b) in the case of goods entered in accordance with the
terms and conditions prescribed by regulations made
under subsection (3), present in respect of the duties upon
such goods a bond, note or other document as prescribed
by such regulations;
and the collector or other proper officer shall, immediately
thereupon, grant his warrant for the unlading of such goods,
and grant a permit for the conveyance of such goods further
into Canada, if so required by the importer.
Counsel for the plaintiff argued that since the
defendant Parr admitted that he did not comply
with any of the sections in any of the 31 impor
tations at issue in that he did not make a report
in writing to the collector at the custom-house,
did not deliver to the collector invoices or bills
of lading and did not pay duties, the goods were,
therefore, unlawfully imported and were
automatically forfeited under section 180 or 192
or 205 of the Act. Counsel pointed out that the
burden of proof that they are not so liable lies
upon the importer by virtue of section 248 of
the Act.
The above mentioned sections read as
follows:
180. (1) Where the person in charge or custody of any
article mentioned in paragraph 18(b) has failed to comply
with any of the requirements of section 18, all the articles
mentioned in paragraph (b) of that section in the charge or
custody of such person shall be forfeited and may be seized
and dealt with accordingly.
(2) If the articles so forfeited or any of them are not
found, the owner at the time of importation and the import
er, and every other person who has been in any way
connected with the unlawful importation of such articles
shall forfeit a sum equal to the value of the articles, and
whether such articles are found or not ... .
192. (1) If any person
(a) smuggles or clandestinely introduces into Canada any
goods subject to duty under the value for duty of two
hundred dollars;
(b) makes out or passes or attempts to pass through the
custom-house, any false, forged or fraudulent invoice of
any goods of whatever value; or
(c) in any way attempts to defraud the revenue by avoid
ing the payment of the duty or any part of the duty on any
goods of whatever value;
such goods if found shall be seized and forfeited, or if not
found but the value thereof has been ascertained, the person
so offending shall forfeit the value thereof as ascertained,
such forfeiture to be without power of remission in cases of
offences under paragraph (a).
205. (1) If any person whether the owner or not, without
lawful excuse, the proof of which shall be on the person
accused, has in possession, harbours, keeps, conceals, pur
chases, sells or exchanges any goods unlawfully imported
into Canada, whether such goods are dutiable or not, or
whereon the duties lawfully payable have not been paid,
such goods, if found, shall be seized and forfeited without
power of remission, and, if such goods are not found, the
person so offending shall forfeit the value thereof without
power of remission.
248. (1) In any proceedings instituted for any penalty,
punishment or forfeiture or for the recovery of any duty
under this Act, or any other law relating to the customs or to
trade and navigation, in case of any question of, or relating
to the identity, origin, importation, lading or exportation of
any goods or the payment of duties on any goods, or the
compliance with the requirements of this Act with regard to
the entry of any goods, or the doing or omission of anything
by which such penalty, punishment, forfeiture or liability for
duty would be incurred or avoided, the burden of proof lies
upon the owner or claimant of the goods or the person
whose duty it was to comply with this Act or in whose
possession the goods were found, and not upon Her Majesty
or upon the person representing Her Majesty.
Plaintiff's counsel also argued that the goods
were smuggled or clandestinely introduced into
Canada and forfeiture therefore automatically
occurred under section 192. The word "smug-
gle" is defined in the Shorter Oxford Dictionary
as
To convey (goods) clandestinely into (or out of) a country or
district, in order to avoid payment of legal duties, or in
contravention of some enactment; to bring in, over, etc. in
this way.
The element of secrecy or concealment import
ed by the use of the word "clandestinely" both
in the definition and in the section leads me to
the conclusion that section 192 is not applicable
in this case. The defendant testified that in each
of the instances at issue he brought the goods
into Canada in the back seat of his small
Renault automobile in the full view of any cus
toms inspector or anyone else who cared to
look. His testimony in this regard was in no way
contradicted and no other evidence was
adduced suggesting that the goods were import
ed in any other way. The Fotorama plates were
frequently 251" x 36" in size and the sheets of
"photo based paper" known under the trade
name "Ortho" were sometimes of a 20" x 24"
size. These, with other imported materials, were
contained in sealed boxes to protect them from
the light which boxes, therefore, must have
been highly visible to any inspecting officer
reasonably careful in carrying out his duties.
One can imagine that in one or two of the
thirty-one importations the boxes might not
have been observed by such an inspecting offi
cer but it is difficult to conceive of their not
being seen on each occasion. I do not think,
therefore, that the goods were introduced into
Canada by smuggling or clandestinely as con
templated by section 192 of the Act and the
forfeiture that follows the unlawful entry, if
any, does not arise under this section.
I must here, however, take note of the fact
that the Deputy Minister in his notice dated July
20, 1973, (Exhibit 40 in the Agreed Statement
of Facts) stated that the charges for infractions
of the Customs Laws by the defendant Sun
Parlor Advertising Company were "that the
goods listed in Schedule 'A' were smuggled or
clandestinely introduced into Canada". Since I
find that the goods were not smuggled nor
clandestinely introduced to Canada is the for
feiture thus void?
The question was considered in a different set
of circumstances in The King v. Bureau [1949]
S.C.R. 367. At page 378 Rinfret C.J., stated:
Nor, with respect, do I agree with the learned President
([1948] Ex.C.R. 257) that in the Exchequer Court of Canada
the case had to be decided exclusively on the reasons given
by the Minister when he ordered the seizure and forfeiture
of the cigarettes and automobile. Under Section 177 [now
S.163], dealing with the reference by the Minister to the
Court, the Court is directed to hear and consider such
matter upon the papers and evidence referred and upon any
further evidence which, under the direction of the Court, the
owner or claimant of the thing seized or detained, or the
person alleged to have incurred the penalty, or the Crown,
produces, "and the court shall decide according to the right
of the matter". In my opinion, that section authorizes the
Exchequer Court to explore the whole subject matter and
the circumstances referred to it—not to say anything of the
fact that, in the present case, that is precisely what was done
in the evidence submitted to that Court, to which the
respondent made no objection. In the circumstances, it was
fully within the power of the Exchequer Court to declare the
seizure and forfeiture valid upon all the contraventions of
the Act which were allegedly proven in the case.
On the basis of the above authority then, I am
of the opinion that I am not limited to the
finding of the Deputy Minister as disclosed in
his Notice of Forfeiture and am entitled to
examination of all of the evidence adduced at
the trial of this action to determine whether or
not forfeiture follows any unlawful entry under
either section 180 or 205 of the Act.
There seems to be no doubt whatsoever that
the defendant Parr failed to comply with many
of the requirements of sections 18, 20, 21 and
22 of the Act but it was argued by his counsel
that since, according to his testimony which is
uncontradicted, he did attend at the custom-
house on each of the 31 occasions and made an
oral declaration following which he was
informed that the goods were not dutiable and
that he might pass, that he had in fact complied
with the spirit, if not with the letter, of those
sections. He relies, firstly, on the fact that the
defendant Mrs. Benton, in 1964, received an
appraisal note indicating that goods of a like
nature were not dutiable which appraisal note
was, according to the defendant Parr, produced
by him on several occasions to the inspecting
officer at the port of entry and that the inspect
ing officer merely followed the precedent creat
ed by the 1964 entry in permitting the goods
through duty free. Secondly, he relies on Marun
and Minogue v. The Queen [1965] 1 Ex.C.R.
280 as authority for the proposition that where
a practice is adopted by customs officials in
permitting goods to enter Canada without being
declared in the manner contemplated by the
Customs Act but by oral declaration alone then
since oral declarations had been made in each
importation made by the defendant Parr, the
entries were not unlawful and there is no man
datory forfeiture under section 180(1) and (2) or
section 205(1).
I do not agree that the above mentioned case
is authority for the proposition cited because, as
Cattanach J. pointed out, while it is quite true
that travellers returning to Canada are not
required to declare in writing, but only verbally,
a great many articles such as clothing and jewel
lery being worn, their suitcases and the like
goods, acquired in Canada, it is for the very
practical reason that every person of necessity
must have most of these items and they are not
subject to tax or duty in any event. In the case
at bar I am not dealing with goods acquired in
Canada., The matter at issue involves goods
acquired in the United States being brought into
Canada by Canadian citizens. It has not been
established to my satisfaction that any customs
official is empowered to waive compliance with
obligations imposed by the Customs Act upon
an importer of goods acquired out of the coun
try nor that if he does improperly so waive that
an importer is relieved of those obligations and
from the consequences of his failure to comply
therewith. In fact, by implication the defendant
Parr has acknowledged that he recognized that
there might be duty payable in that he wrote to
the Department in 1964 requesting a ruling
thereon. Moreover, in his examination for dis
covery he stated that having received no further
reply from the officials in Ottawa, he pursued
the matter with the Port of Windsor officials
and was told that his importations were duty
free, although he had no recollection of whom
the official was who so advised him. Thus, I
conclude that Mr. Parr was aware, to some
extent at least, of his obligations under the
Customs Act and, therefore, ought to have
ensured that he fully complied with such
obligations.
I share the opinion of Cattanach J. that the
provisions of sections 180 and 205 are manda
tory and forfeiture occurs automatically upon
unlawful importation of goods by virtue of sec
tion 2(1) of the Customs Act, the relevant por
tion of which reads as follows:
"seized and forfeited", "liable to forfeiture" or "subject to
forfeiture", or any other expression that might of itself
imply that some act subsequent to the commission of the
offence is necessary to work the forfeiture, shall not be
construed as rendering any such subsequent act neces
sary, but the forfeiture shall accrue at the time and by the
commission of the offence, in respect of which the penal
ty of forfeiture is imposed;
Unlawful importation arises through the
defendants' failure to comply with the provi-
sions of section 18(b) of the Act and, therefore,
under section 180(1) the goods are forfeited,
and by virtue of section 2(1) such forfeiture
takes place at the time of the commission of the
offence. Cattanach J. said in the Marun case
(supra) at page 295:
The forfeiture is not brought about by any act of the
Customs officials or officers of the Department, but it is the
legal unescapable consequence of the unlawful importation
of the goods by the suppliant, Marun. The goods thereupon
became the property of the Crown and no act by any officer
of the Crown can undo that forfeiture.
The provisions appear harsh but they are, in
my opinion, clear and unambiguous and while I
have some sympathy for the defendants it is
clear that their failure to declare and enter the
imported goods as required by sections 18, 20,
21 and 22, at least until they had obtained the
anticipated favourable ruling which they had
requested, has caused their misfortune. Since
the imported goods cannot be found, having
been used in the production of the printed ma
terial which the defendant Parr said was
returned to the United States, I must apply the
provisions of section 180(2) and I find that the
plaintiff is entitled to judgment against the
defendants in the sum of $2122.03. This is less
than the total duty paid value of the goods
imported during the period in question, namely
June 26, 1968 to November 20, 1970, the total
of which was $3656.97. The reason for the
lesser forfeiture is due to the fact that under
section 265 of the Act only those unlawful
importations made within three years from the
date of commencement of the action are subject
to forfeiture, the total of which was not disput
ed and was in the said sum of $2,122.03. Since
there is no such time limitation in respect of
payment of duty, the plaintiff is also entitled to
a judgment for the duty payable on importations
made between June 26, 1968 and July 30, 1969
in the sum of $199.14.
In my view the customs officials both at the
Port of Windsor and at the Department of
National Revenue, Customs & Excise in
Ottawa, were negligent in the discharge of their
duties in permitting the defendants to enter
goods into Canada over a relatively long period
of time without being properly declared and
without payment of duty and in failing to give
them the ruling which they requested in 1964.
For this reason the plaintiff will not be entitled
to costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.