T-388-80
The Queen (Plaintiff)
v.
Cerescorp Inc. (Defendant)
Trial Division, Joyal J.—Montreal, December 6,
1984; Ottawa, March 25, 1985.
Customs and excise — Importation of goods — British
Preferential Tariff — Requirement goods be conveyed without
transhipment not met — Remission Order providing for
exemption from requirement where transhipment due "to cir
cumstances beyond the control of the importer" — Exemption
not available herein as such circumstances not proven —
Defendant failing to prove "direct shipment was not possible"
— Whether "business test" applicable — Excise Tax Act,
R.S.C. 1970, c. E-13 — Customs Tariff R.S.C. 1970, c. C-41,
s.3(1),(2) (as am. by S.C. 1980-81-82-83, c. 67, s. 2(1)), (3.1)
(as added idem, s. 2(4)), tariff item 42700-1 — Foreign Ports
Transhipped Goods Remission Order, C.R.C., c. 767, ss. 1, 2,
3, 4.
In order to fulfill a contract, the defendant, a Canadian
stevedoring firm, purchased a special type of crane from a
company located in Eire. After several shipping companies, for
different reasons, refused to transport the crane from Eire to
Montreal, the defendant found a Belgium-based company
which agreed to do so on a scheduled Antwerp-Montreal run.
However, because the closest port in Eire could not handle
large ships, the crane had to be shipped in parts, on board a
smaller vessel, to Antwerp, there to be transhipped on a larger
vessel for the Atlantic crossing.
The issue is which of the British Preferential Tariff (BPT) (a
2 1 / 2 % rate of customs duties) or the Most-Preferred-Nation
Tariff (MPNT) (a 15% rate of customs duties) applies in this
case, Eire being a country benefiting from the former and
Belgium, from the latter.
Section 3 of the Customs Tariff provides that the BPT
applies only where the goods are conveyed from a BPT country
without further transhipment into a port of Canada. It also
provides, however, that the Governor in Council may, by order,
exempt goods from that requirement. The Foreign Ports Tran-
shipped Goods Remission Order, adopted pursuant to that
enabling provision, does just that and provides for the remission
of the customs duties when the transhipment is due to "circum-
stances beyond the control of the importer" who has to "show
that direct shipment was not possible".
The defendant pleads in favour of a "business test" approach
to the interpretation of the Order. This would mean that the
"direct shipment" requirement has to be looked at in terms of
"business exigencies" and that, in effect, all that is required is
reasonable effort to have the equipment shipped directly to
Canada.
This action was brought for payment of amounts due to the
Crown in respect of duties and sales tax.
Held, the action should be allowed.
The defendant has failed to discharge the onus imposed on it.
Its efforts to find means to comply with the BPT rules were
insufficient. While business experience must be taken into
consideration in determining whether the conditions of the
Order have been met, the requirements of the Order are more
demanding than a mere "business test".
The contract commitments of the defendant did not compel
it to make the choice it made. Time was not yet a critical
factor. There is evidence that the defendant arranged for earlier
delivery of the equipment because it found it to its advantage to
do so. It unduly narrowed the scope of its inquiry because of its
unnecessary insistance on rapid delivery, on a winter voyage
which limited the choice or availability of carriers, on shipping
companies running a regular or scheduled service across the
Atlantic. To be brought within the provisions of the Order, an
importer must provide evidence that either the circumstances
were in fact beyond his control or that direct shipment was in
fact not possible.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Crawford v. Wilson (1896), 1 Corn. Cas. 277 (C.A.);
Carolina Spruce Co. v. Black Mountain R. Co., 201
S.W. 154 (Tenn. S.C. 1918); Australian Dispatch Line
(Inc) v. Anglo-Canadian Shipping Co., Ltd., [1940] 2
W.W.R. 266 (B.C.C.A.); Moss v. Smith (1850), 9 C.P.
94; 19 L.J.C.P. 225; 137 E.R. 827.
REFERRED TO:
Wylie v. Montreal (1885), 12 S.C.R. 384.
COUNSEL:
Daniel Marecki for plaintiff.
Michael Kaylor and David W. Rothschild for
defendant.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Gottlieb, Kaylor, Swift & Stocks, Montreal,
for defendant.
The following are the reasons for judgment
rendered in English by
JOYAL J.: This is an action for payment of
moneys due and owing to the Crown by the
defendant on the duties and sales tax assessed
under the Customs Tariff and the Excise Tax
Act. 2 The trial of the action was held in Montreal
on December 6, 1984.
Before dealing with the procedural and substan
tive elements of this conflict, I should perhaps
recite its history.
The defendant, Cerescorp Inc., is engaged in the
business of loading and unloading marine cargo. It
has been in this business for many years. It has
promoted or reacted to increasingly sophisticated
techniques for the loading and unloading of ships'
cargoes. In the competitive market between ship
ping companies and between stevedoring compa
nies, the defendant has had to innovate in one
sense and respond to customers' needs on the
other.
In pursuing its objects and purposes, the defend
ant in 1978 got word that Atlantic Container
Lines (hereinafter referred to as ACL) wished to
extend and improve its loading and unloading
facilities in the port of Montreal. ACL was
engaged at that time in providing regular or sched
uled service between Europe and Canada for the
carriage of freight. ACL had adopted both the
"container" and "roll-on/roll-off" techniques in
the carriage of cargo and in the design of its cargo
ships, the whole to provide a more cost-effective
and more expeditious loading or unloading of
ships. It is a fact that time for loading and unload
ing is of the essence to a carrier. Turn-around
time, like down time in other industries, is an
important cost factor to which management and
staff continuously bend their collective minds.
It was in the summer of 1978 that the defendant
offered its services to ACL and proposed the
installation of a new container and roll-on/roll-off
terminal in Montreal. ACL's requirements, dis
closed to the defendant at that time, imposed on
the defendant the elaboration of a project involv
ing land, equipment, ramps and other facilities. It
was necessary for the defendant to submit a pro
posal to ACL, the details of which would be
responsive to ACL's needs and exigencies, would
be cost effective and would provide it with com
petitive prices.
' R.S.C. 1970, c. C-41.
2 R.S.C. 1970, c. E-13.
Responding to ACL's requirements imposed on
the defendant substantial capital commitments.
The defendant had to acquire extensive land for
the storage of large containers both inbound and
outbound. It had to plan ramps for the handling of
roll-on/roll-off cargo. It had to provide large and
heavy mobile equipment of the fork-lift variety for
the loading and unloading of containers to accom
modate other transportation modes like flat-bed
trucks and railway cars.
The defendant approached the port of Montreal
authorities. It found it could lease undeveloped
terminal facilities in an area of the port of Mon-
treal called Section 66. The defendant started to
put its project together, determining its sources of
supply and costing the many items of expenditure
which would be involved.
Included in the defendant's package to ACL
was the proposal to provide ACL with a state-of-
the-art crane or gantry for the loading and unload
ing of container-type cargo. To comply with design
and performance criteria imposed by ACL, the
defendant had to install a rail-moveable crane
having an outreach of some ninety feet, a back-
reach of over 200 feet and a clear height of some
ninety feet under its spreaders or legs. To appreci
ate the scale of this modified Eiffel Tower on
wheels, one merely looks at its price which is in the
neighbourhood of $1.8 million.
In the late summer and early fall of 1978, the
defendant looked for a source of supply for its
giant crane. It contacted its parent in Chicago who
in turn inquired as to its availability in the United
States. It contacted Dominion Bridge but with no
success. The defendant was not particularly con
cerned with obtaining a new crane or a used crane
so long as the crane conformed to ACL's specifica
tions. In due course, the defendant found that the
equipment was unavailable in either the eastern
United States or eastern Canada.
Finally, in late October or early November
1978, the defendant found what it wanted. It was a
Liebherr-design crane, otherwise known as a
Tango crane, which could be purchased from a
company called Sea Containers Atlantic Ltd.
whose facilities were located near a small harbour
in south-west Eire called Fenit. The price was
right and the projected delivery date of the equip
ment was in keeping with the projected lead time
which the defendant required. The projected deliv
ery date was December 15, 1978.
The defendant then inquired as to the transpor
tation of the crane from Fenit to Canada. It
approached several shipping companies. It first
approached its own new customer, ACL. This
company controlled east-bound cargoes only. It
had to contact Southampton, U.K. which con
trolled west-bound cargoes. ACL said it couldn't
do it.
The defendant got in touch with CP Ships, one
of the few carriers on regular service between
Europe and Montreal during the winter months.
CP Ships was not interested. The defendant then
contacted Manchester Lines, Polish Lines and
Soviet Lines. The latter company showed interest
in picking up the cargo in Eire on its way to
Montreal, but later desisted when, upon further
investigation, it found out that the water depth in
the small port of Fenit could not handle its ships.
Manchester Lines and Polish Lines also gave nega
tive answers.
Finally, the defendant negotiated with Cast
Shipping. Cast Shipping operated a regular service
between Europe and Canada, some four ships pro
viding collectively a weekly service between the
two. Unlike ACL, however, which had a base in
Southampton, U.K., Cast's European base was in
Antwerp, Belgium. It was required, therefore, that
Cast load the crane in its several parts at the small
port of Fenit, Eire, on board a small feeder Cast
vessel, ship the crane to Antwerp and from there,
tranship it on one of its larger ships for the eventu
al scheduled run to Montreal.
In the meantime, the usual delays had been
experienced by the crane fabricator, Sea Contain
ers. It advised the defendant that the crane would
not be free on board at Fenit before January 15,
1979. The goods finally arrived in the port of
Montreal on February 20, 1979. Because of
damage to some pieces of the electronic equipment
contained in the cargo, it was not before March
29, 1979 that the equipment cleared customs in
Montreal.
At customs, the defendant disclosed a value of
$1.8 million. That value for duty was not in dis
pute. The crane and its several parts were classi
fied under tariff item 42700-1 of the Customs
Tariff. There was no dispute on this either. Where
there developed a dispute between plaintiff and the
Crown, it was in respect of the duty applicable
under tariff item 42700-1.
The goods being imported originated in Eire
where the treatment is under the British Preferen
tial Tariff at 2 1 / 2 %. This was the percentage the
defendant was willing to pay. The Crown, how
ever, contended that that tariff only applied when
the goods left a British preferential port of origin
and moved directly to Canada. In the case at hand,
the goods had been transhipped at Antwerp, Bel-
gium, and that country enjoys only Most-
Favoured-Nation treatment at 15%. As is readily
seen, the spread between 2 1 / 2 % and 15% on $1.8
million is considerable. Under a British Preferen
tial tariff, customs duties at 2 1 / 2 %, to which must
be added, under the Excise Tax Act, an excise tax
of 9%, make a total of $211,050. At the Most-
Favoured-Nation rate, the total soars to $456,300.
The case for the Crown is founded on statute.
The Statute is the Customs Tariff. The charging
section in that statute is subsection 3(1) which
reads as follows:
3. (1) Subject to this Act and the Customs Act, there shall be
levied, collected and paid upon all goods enumerated, or
referred to as not enumerated, in Schedule A, when such goods
are imported into Canada or taken out of warehouse for
consumption therein, the several rates of duties of customs, if
any, set opposite to each item respectively or charged on goods
as not enumerated, in the column of the tariff applicable to the
goods, subject to the conditions specified in this section.
Subsection 3(2) [as am. by S.C. 1980-81-82-83,
c. 67, s. 2(1) ] provides that:
3....
(2) Subject to any other provision of this Act, the rates of
customs duties, if any, set forth in column (I), "British Prefer
ential Tariff', apply to goods the growth, produce or manufac
ture of the following British countries when conveyed without
transhipment from a port of any British country enjoying the
benefits of the British Preferential Tariff into a port of Canada:
This subsection then lists in excess of some sixty
countries whose goods enjoy the benefits of the
British Preferential Tariff. The Republic of Eire,
or Ireland, is among them.
The condition that the conveyance of the goods
be without transhipment is repeated in the con
cluding words of subsection 3(2) as follows:
(2) ...
goods entitled to the benefits of the British Preferential Tariff
shall be accorded such benefits when such goods are shipped on
a bill of lading consigned to a consignee in a specified port in
Canada when such goods are transferred at a port in a British
possession, and conveyed without further transhipment into a
port of Canada.
Further in the statute, one finds some possible
relief from the no transhipment or direct shipment
requirement. This is found in paragraph (3.1) [as
added by S.C. 1980-81-82-83, c. 67, s. 2(4)] of
subsection 3 which provides that:
(3.1) The Governor in Council may, by order,
(a) exempt goods ... admitted to the benefits of the British
Preferential Tariff ... from the requirement that they be
conveyed without transhipment ...
on such terms and conditions, if any, as are specified in the
order.
The Governor in Council did pass such an
order 3 and the following is the text of it:
1. This Order may be cited as the Foreign Ports Transhipped
Goods Remission Order.
3 Foreign Ports Transhipped Goods Remission Order,
C.R.C., c. 767.
2. Subject to section 3, remission is hereby granted of the
customs duty and taxes on goods originating in countries
enjoying the privileges of the British Preferential Tariff when
those goods are not, as required by section 3 of the Customs
Tariff, conveyed without transhipment into a port of Canada
but, owing to circumstances beyond the control of the importer,
are transhipped from a foreign port.
3. The remission is not payable unless satisfactory evidence is
supplied to the Department of National Revenue, Customs and
Excise to show that direct shipment was not possible.
4. The remission is [sic] each case shall be the difference
between the duty and taxes properly payable under the British
Preferential Tariff and those payable under the tariff that
would apply to importations from the country in which the
goods were transhipped.
The defendant tried to bring itself within the
terms of the above Order. It applied for remission.
The Crown refused on the grounds that the condi
tion for the granting of a remission had not been
met. Subsequently, the Crown sued the defendant
for recovery of that part of the customs duties and
taxes remaining unpaid and based on the 15%
Most-Favoured-Nation rate.
I am indebted to both counsel for their able
assistance to the Court in filing written submis
sions on the issues raised. The material they have
filed is all the more useful as the parties were in
agreement that the provision respecting the condi
tions of a remission order had never before been
subject to judicial review. Neither party raised any
issue respecting the jurisdiction of this Court to
deal with the Crown's money claim or with the
defendant's response to it in urging this Court to
overturn the Crown's refusal to grant remission.
Counsel for the Crown contended first of all
that the provision of the Remission Order, being
an exemption provision, must be strictly
construed. 4 Counsel also argued that the Order
imposes the condition of "direct shipment" from a
British country meaning that the concept of direct
shipment is not limited to a particular place or
port within that country. It followed that if no
direct shipment from Fenit to Canada was possi
ble, there was any number of alternative means to
get the equipment from Fenit to an alternate
4 See Wylie v. Montreal (1885), 12 S.C.R. 384.
British port from which shipment to Canada was
possible.
Counsel for the Crown further alleged that the
notion of the shortest route possible is not present
in the Remission Order. It would have been open
to the defendant to arrange shipping along more
circuitous lines, even if it meant longer time for
delivery. The essence of the "no transhipment"
condition did not preclude the defendant from
having the equipment trucked to another port in
Eire or in the United Kingdom, as indeed, it was
trucked some fifteen or twenty miles from the
fabricator's shop in Fenit to dockside.
Counsel for the Crown conceded that in the
circumstances of the case, the voyage from Fenit
to Canada without transhipment might have been
impractical, or inconvenient, but the impractical or
inconvenient aspects of it are not "beyond the
control of the importer" as that expression is found
in the Order.
Counsel for the Crown further asserted that the
burden of proof to bring the situation within the
terms of the Order rested exclusively on the
importer and that the defendant, in this case, had
failed to discharge that onus. There was evidence
obtained by the Crown through the office of the
High Commissioner for Canada in the United
Kingdom that shipment from a British Preferential
Tariff port would have been possible. Even if this
information was obtained well after the period
material to this issue, it was not up to the Crown
to prove conclusively that direct shipment was
possible. It was up to the defendant to prove
conclusively that it was not.
Defendant's counsel, on the other hand, pleaded
the "business test" approach to the interpretation
of the Order. This would suggest that "circum-
stances beyond the control of the importer" or
evidence showing that "direct shipment was not
possible" must conform with business practicali
ties. It was open to the defendant, therefore, to
decide that according to the business exigencies,
the equipment had to be transported via Antwerp
and that it would have been unbusinesslike to do
otherwise. Reasonable effort to have the equip-
ment shipped directly to Canada is all that is
required by the terms of the Order.
By analogy, Counsel for the defendant cited the
decision in Crawford v. Wilson. 5 In that case, the
defendants had undertaken to deliver a cargo at
Rio, [page 280] "all unavoidable accidents or hin
drances, in procuring, loading, and/or discharging
the cargo [excepted]". When the cargo arrived in
Rio, a rebellion was in progress so that arrange
ments for unloading the cargo were and continued
to be seriously disorganized. In exonerating the
defendants on an action for demurrage, Lord
Esher M.R. said, at page 280:
In my opinion, if, by something happening at the port of
discharge which the defendants could not possibly avoid, they
could not take delivery without doing something which it was
wholly unreasonable that they should be called upon to do, they
would be hindered, although by doing the unreasonable thing
they might possibly have taken delivery.
Similarly, at page 284, Lopes L.J. is quoted as
saying:
The kind of delivery possible was not reasonable or recognized,
and if the defendants had been compelled to resort to such a
course, they would have been hindered within the meaning of
the exceptions.
In a United States decision (Supreme Court of
Tennessee), Carolina Spruce Co. v. Black Moun
tain R. Co., 6 Williams J., at page 156, stated with
respect to the term "prevented by weather condi
tions or other causes beyond its control" that:
We are of opinion that the phrase comes nearer to being
synonymous with "unavoidably prevented," and that it can
hardly be the equivalent of what is called the act of God; but it
cannot mean less than that there must have interposed some
hindrance which the railway company, as the actor party, could
not foresee or overcome by the reasonable exercise of its powers
and the use of the means and appliances that were, or in the
exercise of commensurate care should have been, available.
What is meant is that the happening must not have been
occasioned in any degree by the want of such foresight, care,
and skill as the law holds one in like circumstances bound to
exercise. The words "beyond control" fairly imply a pledge to
exercise human agencies to the point of excluding negligence
under the above test, and if this be true human agencies are not
excluded from consideration as factors.
5 (1896), 1 Corn. Cas. 277 (C.A.).
6 201 S.W. 154 (Tenn. S.C. 1918).
In Chicago, etc., R. Co. v. U.S., 194 Fed. 342, 114 C.C.A.
334, it was said in respect of the closely related phrase "una-
voidable cause":
"An .. . `unavoidable cause' ... is a cause which reason
ably prudent and cautious men under like circumstances do
not and would not ordinarily anticipate and whose effects
under similar circumstances they do not and would not
ordinarily avoid."
With respect to the interpretation of the term
"direct shipment was not possible", counsel for the
defendant quoted the case of Australian Dispatch
Line (Inc) v. Anglo-Canadian Shipping Co., Ltd.,'
where O'Halloran J.A. affirmed, at page 269, a
statement of Maule J. (in Moss v. Smith (1850), 9
C.P. 94, at page 103; 19 L.J.C.P. 225; 137 E.R.
827):
... in matters of business a thing is said to be impossible when
it is not practicable; and a thing is impracticable when it can
only be done at an excessive or unreasonable cost.
On the issue of unforeseeable circumstances or
of reasonable measures to prevent the event, coun
sel for the defendant urged me to find that the
defendant could not have foreseen, at the time the
purchase of the crane was made, that direct ship
ment would not be possible at the time the crane
was ready for shipment. Every measure was taken
to effect direct shipment. The impossibility faced
by the defendant was a relative and not an abso
lute one and the element of relative impossibility
was sufficient to discharge the onus upon it.
I was particularly impressed by the defendant's
counsel's plea that the Remission Order conditions
should be interpreted by reference to the "busi-
ness" test. It would follow from this that the
investigations and inquiries made by the defendant
to have the equipment carried directly from Eire to
Canada or transhipped to Canada from another
United Kingdom port had been sufficiently thor
ough and complete as to bring the eventual car
riage through Antwerp, Belgium, within the condi
tions expressed in the Order.
There seems to be little doubt that in contract
cases, a "business test" may be applied when
interpreting exception clauses to liberate a party to
7 [1940] 2 W.W.R. 266 (B.C.C.A.).
a contract from liability arising from late delivery
or non-delivery of goods or services. The test of
reasonableness, in many cases, is the business test
in the sense that a businessman would regard a
particular circumstance in the light of his business
experience. Such an occupational approach to
relieve a contracting party from liability or to
exempt him from due performance will normally
raise a number of considerations which have their
roots in the ways and means with which business
relationships are conducted. In the light of such
experiences, a court will decide whether or not a
breached condition is or is not capable of perform
ance, having due regard to all such circumstances.
Generally speaking, I should find little difficulty
in applying a "business test" to the case at bar.
Business experience is certainly one of the indicia
among all the circumstances to be examined by a
trier of facts in order to determine if the conditions
of the Order, namely "circumstances beyond the
control of the importer", or "direct shipment was
not possible" have been met.
It comes out of the evidence that the defendant's
inquiries were substantially direct to shipping com
panies with regular sailings across the Atlantic
Ocean. The weight or size of the equipment cer
tainly did not warrant a special charter. Further
more, it was important for the defendant to have
the equipment loaded at Fenit as soon as possible
after the equipment was ready for delivery. When
the defendant finally contracted with Cast Ship
ping, it required the shipping company to load the
equipment at Fenit aboard a smaller Cast feeder
vessel, to sail from there to Antwerp, Belgium and
from there, to have the equipment reloaded on a
Cast vessel making the regular run between Ant-
werp and Montreal.
This evidence establishes that at least, loading
aboard a ship in Fenit was possible. There is no
evidence however as to whether or not the Cast
feeder vessel could have detoured to Portsmouth,
or Southampton or some other U.K. or Eire port in
order to comply with the British Preferential
Tariff rules. Neither is there any evidence as to
attempts to find other means of getting the equip
ment to another British Preferential Tariff port by
some other transportation mode prior to its ulti
mate Atlantic crossing to Canada.
In my view, the defendant has failed to dis
charge the onus imposed on him. The irony of it is
that such failure is attributable to a "business
test" approach.
As I view the evidence, the defendant made a
business decision. The defendant, at some moment
or other, during the relevant period, decided for
purely business reasons that its equipment would
be delivered to Canada via Antwerp. That was the
defendant's decision to make and it made it.
I find as a fact that the defendant was not
compelled or impelled to do so by reason of the
contract commitments respecting delivery imposed
on the defendant by its customer, ACL. If time
limits were imposed for the delivery and installa
tion of the equipment, the time remaining for the
defendant had not at the material time become
critical. According to the contract, the defendant
had until October 1979 to perform. By the time
the equipment was ready for shipment from Fenit,
the defendant had ample time left to arrange for
transportation of its goods to Canada in such a
manner as to enjoy the benefits of the British
Preferential Tariff.
Concurrently, as will be noted later, the time
constraints to take delivery of the equipment
imposed on the defendant by virtue of its purchase
contract with Sea Containers Atlantic Ltd. were
not critical.
In this respect, therefore, the defendant applied
its own business test. It found it to its advantage to
arrange for earlier delivery of the equipment.
Although admittedly the defendant made several
attempts through various shipping companies and
agencies to get direct transportation to Canada, it
seems clear from that evidence that the constraints
it put on its inquiries were far greater than the
constraints imposed on it by its contracts. The
defendant not only wanted its equipment shipped,
but wanted it shipped as soon as the equipment
was ready for loading at Fenit.
The defendant, as I see it, decided that the
earlier it could get the equipment to Canada and
erect it on site, the earlier the equipment would
become operational and the earlier the equipment
would begin producing revenue.
There is also further evidence as to the motives
for the defendant proceeding as it did. There is
evidence that the defendant was very concerned
with making good on its contract with its custom
er. It was a new contract involving a new custom
er. The defendant had contracted to take over the
stevedoring duties from a previous company. I
conclude that the defendant had to weigh the
financial disadvantages of getting delivery through
Antwerp against the financial returns of a more
expeditious performance or the intangible returns
in having a grateful and satisfied customer.
For such purposes, and perhaps for other pur
poses as well, the defendant narrowed considerably
the scope of its inquiry. Its communications with
various shipping lines, according to the evidence
before me, were directed to the carriage of the
equipment as soon as the equipment was ready for
transport. There is evidence that it was extremely
important for the defendant's customer to get
delivery of the crane as soon as possible. As men
tioned earlier, the defendant was contemplating a
winter voyage in January or February of 1979
limiting the choice or availability of carriers. Fur
thermore, inquiries were substantially limited to
shipping companies running a regular or scheduled
service across the North Atlantic. The evidence
adduced by the defendant with respect to shipment
in the latter part of the winter season or in early
spring is either unsubstantial or vague. In my view,
it falls short of the conclusive evidence the Order
imposes on an importer in such circumstances.
I have read the agreement of December 8, 1978
between ACL and the defendant filed as Exhibit
D-3. I have also read the terms of the agreement
dated November 24, 1978 between Sea Containers
Atlantic Ltd. and the defendant filed as Exhibit
D-4 respecting the sale of the Tango crane. It is
clear from the provisions of these two agreements
that it was in the interest of the defendant to get
delivery of the crane at the earliest possible time.
Early delivery narrowed the time frame within
which the crane would begin producing revenue.
Conversely, I fail to find in the purchase agree
ment with Sea Containers Atlantic Ltd. such
imperious conditions imposed on the defendant as
would put it in financial jeopardy if some delay in
taking possession were experienced. Indeed, as I
read section 5(f) of that agreement, a per diem
penalty against the defendant for delays in effect
ing handover (as that term is used in the agree
ment) did not begin to run until April 15, 1979.
A number of hypothetical instances were sug
gested to me during argument which might justify
a remission order. It is difficult to establish general
principles in this regard, but I daresay that to be
brought within the provision of the Order, an
importer must provide evidence that either the
circumstances were in fact beyond his control or
that direct shipment was in fact not possible. It
seems to me a matter of evidence to be weighed by
a court to determine in each particular case wheth
er such a fact situation existed, either in absolute
or in relative terms. One could conceive of the
condition being met if during a voyage, a carrier
might, without the prior knowledge of the import
er, tranship the goods through a non-British Pref
erential Tariff port, or if the goods loaded at a
British Preferential Tariff port should be rerouted
to Boston because of strike action in Canadian
ports. One might also agree that if the goods were
imported from a land-locked British Preferential
Tariff country, transhipment through some seaport
or other would merit the granting of a remission
order. One could also conceive that in dealing with
perishable goods, delays in arranging direct ship
ment to Canada would, in the special circum
stances of the case, bring the importer within the
terms of the Order. Having found, however, that
on the evidence before me the defendant has not
discharged the burden imposed on it by the terms
of the Order, I should venture no further in my
hypotheses.
There will therefore be judgment for the Crown
declaring that customs duties on the imported
equipment are due and owing by the defendant on
the basis of a Most-Favoured-Nation Tariff at
15%. I would ask the parties to agree to and
submit a draft formal judgment setting out the
final calculations of all amounts due and owing by
the defendant to the Crown. In the event of disa
greement, either party may move in the usual way.
I remain, of course, seized of the matter until the
formal judgment has been signed.
As the terms of the Remission Order have not
before been scutinized by this Court, I believe it is
proper that I should make no order as 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.