T-64-80, T-2207-80.
T-3346-80, T-5652-80.
T-707-84
The Queen (Plaintiff)
v.
Amway of Canada Limited/Amway du Canada
Ltée and Amway Corporation (Defendants)
INDEXED AS: R. v. AMWAY OF CANADA LTD.
Trial Division, Reed J.—Ottawa, November 18,
19 and 29, 1985.
Constitutional law — Charter of Rights — Criminal process
— Non-compellability — Forfeiture of goods under s. 192
Customs Act — Refusal to produce documents based on
privilege against self-incrimination — Analogy between right
not to be compelled to testify provided for in s. 11(c) Charter,
and right not to produce documents — Whether s. 11(c)
applicable to all penal offences, including s. 192 offences —
By producing documents in its favour, party not choosing to
stand mute — Production of all relevant documents ordered
— Customs Act, R.S.C. 1970, c. C-40, s. 192 — Canadian
Charter of Rights and Freedoms, being Part I of the Constitu
tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11
(U.K.), ss. I, 11(c),(d), 13 — Canada Evidence Act, R.S.C.
1970, c. E-10, s. 5(2).
Practice — Discovery Production of documents — For
feiture of goods under s. 192 Customs Act — Order to file
proper R. 448 list of documents — Scope of discovery cannot
be controlled by denying or admitting allegations in statement
of claim — Refusal to produce certain documents based on
privilege against self-incrimination — Party producing docu
ments in its favour not choosing to stand mute — Accordingly
required to produce all documents, including those adverse to
it — R. 448 referring to privilege claimed on basis of solicitor-
client relationship or Crown immunity Customs Act, R.S.C.
1970, c. C-40, s. 192 — Federal Court Rules, C.R.C., c. 663,
R. 448.
Customs and excise — Customs Act — Forfeiture of goods
under s. 192 Customs Act — Refusal to produce certain
documents — Privilege against self-incrimination Whether
right under common law and s. 11(c) Charter not to be
compelled to testify applying to all penal offences, including s.
192 — Common law privilege overridden by s. 170 Customs
Act S. 11(c) not applicable — By producing certain docu
ments, party choosing to testify — Whether s. 192 applicable
to importers only or to "any person" to be resolved at trial —
Customs Act, R.S.C. 1970, c. C-40, ss. 20, 21, 22, 161, 162,
163, 170, 192, 248(1), 252.
The plaintiff moves to require Amway Corporation to file a
list of documents complying with Federal Court Rule 448 and
to require Amway of Canada Limited to produce documents
for which the latter claims privilege on the ground of self-
incrimination. The defendant Amway Corporation seeks to
have the plaintiff's statement of claim struck out as against it.
The Crown seeks in its main actions to enforce subsection
l 92(1) of the Customs Act. Under that subsection, where goods
have been smuggled, or undervalued, or where false invoices
have been made out, such goods, or a sum equal to their value,
shall be forfeited to the Crown.
Held, the plaintiff's motions should be allowed and the
motion to strike out, denied.
Rule 448 list of documents
Under Rule 448, the Court may order any party to file a list
of documents relating to "any matter in question in the cause".
Amway Corporation argues that since the only issue between it
and the plaintiff is whether Amway imported goods into
Canada and that since Amway has denied such an allegation, it
is required to produce documents relating solely to that issue.
The argument is without merit. It would require reading the
paragraph of the statement of claim alleging that Amway
Corporation imported goods into Canada as an integral part of
every other paragraph of the statement of claim. A defendant
cannot control the scope of discovery as against it by either
denying or admitting the allegations against it in a statement of
claim.
Claim of privilege on the basis of self-incrimination
Amway Canada argues that at common law and under
paragraph 11(c) of the Charter a person charged with an
offence has a right to stand mute (i.e. cannot be compelled to
testify) and that therefore, by analogy, it cannot be compelled
to produce certain documents.
The first element of the argument is rejected. The common
law privilege is overridden by section 170 of the Customs Act
which provides for the production of all invoices, documents,
etc., for the purposes of any suit under the said Act.
With respect to paragraph 11(c) of the Charter, Amway
Canada contends that it is applicable to all penal offences,
including those set out in section 192 of the Customs Act, and
not merely applicable to those offences either enforced by way
of summary conviction or indictable offence. Even if paragraph
11(c) could apply to a forfeiture proceeding, it could not, in any
event, apply to preclude the production of documents in this
case. If an accused chooses to testify, all relevant questions are
required to be answered. In the present case, Amway Canada,
by producing documents which support its position, has not
chosen to stand mute. Accordingly, it cannot now refuse to
produce other relevant documents which do not support its
position.
Rule 448 was not drafted by reference to the non-compella-
bility rule, now set out in paragraph 11(c) of the Charter, but
rather with reference to the privilege claimed, whether on the
basis of a solicitor-client relationship or Crown immunity. The
defendant might have sought, prior to filing a Rule 448 list of
documents, an order of the Court adapting the Rules to accom
modate the Charter rights asserted. The defendant would there
by have raised the issue of its compellability prior to the
commencement of the discovery. Furthermore, it is well settled
that the non-compellability rule does not preclude the produc
tion of objective fact evidence nor of non-testimonial out-of-
court statements. The documents in question here, in the hands
of a corporation, are much more analogous to the objective fact
evidence which the Supreme Court dealt with in Curr v. The
Queen, [1972] S.C.R. 889, than they are to the testimonial type
evidence to which paragraph 11(c) is addressed.
Motion to strike out Amway Corporation as defendant
Amway Corporation argues that subsection 192(1) of Cus
toms Act imposes liabilities only against importers of goods.
Subsection 192(1), however, purports to apply to "any person".
There exists a contentious legal issue of statutory interpretation
that should be resolved at trial.
The argument that the examination for discovery disclosed
no factual basis for the allegation that Amway Corporation was
an importer of goods, was rejected.
CASES JUDICIALLY CONSIDERED
CONSIDERED:
R. v. Gary Bowl Limited, [1974] 2 F.C. 146 (C.A.).
REFERRED TO:
Compagnie Financiere du Pacifique v. Peruvian Guano
Company (1882), 11 Q.B.D. 55 (C.A.); Boxer v. Reesor
(1983), 43 B.C.L.R. 352 (S.C.); R. v. Special Risks
Holdings Inc., [1983] 2 F.C. 743 (C.A.); Everest &
Jennings Canadian Ltd. v. Invacare Corporation, [1984]
1 F.C. 856 (C.A.); Law Society of Upper Canada v.
Skapinker, [1984] 1 S.C.R. 357; Hunter et al. v. South-
am Inc., [1984] 2 S.C.R. 145; R. v. Big M Drug Mart
Ltd. et al., [1985] 1 S.C.R. 295; Peltari v. Dir. of Lower
Mainland Reg. Correctional Centre (1984), 42 C.R. (3d)
103 (B.C.S.C.); Russell v. Radley, [1984] 1 F.C. 543
(T.D.); Boyd v. United States, 116 U.S. 616 (1886);
Amway of Canada, Ltd. and M.N.R. (1983), 5 C.E.R.
247 (F.C.T.D.); Ng v. R. (1981), 24 C.R. (3d) 178 (Ont.
S.C.); Curr v. The Queen, [1972] S.C.R. 889; Validity of
Section 92(4) of The Vehicles Act, 1957 (Sask.), [1958]
S.C.R. 608; Marcoux et al. v. The Queen, [1976] 1
S.C.R. 763; Cyrus J. Moulton Ltd. v. The Queen, [1976]
1 F.C. 437 (C.A.); Diamond Shamrock Corporation v.
Hooker Chemicals & Plastics Corp. et al. (1982), 66
C.P.R. (2d) 145 (F.C.T.D.); Gilbert v. Smith (1876), 2
Ch. D. 686 (C.A.).
COUNSEL:
E. R. Sojonky, Q.C. and M. F. Ciavaglia for
plaintiff.
M. Noël and J. Bernier for defendants.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Verchère, Noël & Eddy, Montreal, for
defendants.
The following are the reasons for order ren
dered in English by
REED J.: These reasons pertain to several
motions (two brought by the plaintiff, one brought
by the defendant, Amway Corporation), which
were all heard together and which are intertwined.
A fourth was also heard at the same time but
because further argument has been sought thereon
it is not yet dealt with.
The plaintiff brought motions seeking, (1) to
require the defendant, Amway Corporation, to file
a list of documents which complies with Rule 448
[Federal Court Rules, C.R.C., c. 663] and, (2) to
require the defendant, Amway of Canada Limited,
to produce some 33 documents listed in Schedule
I, Part II, Part B of its Rule 448 list of documents
(filed on August 12, 1985), for which it claims
privilege on the ground of self-incrimination. The
motion brought by the defendant, Amway Corpo
ration, seeks to have the plaintiff's claim struck
out as against it, pursuant to Rule 419, or to have
judgment entered in its favour, pursuant to Rule
341, without further determination of the issues
between the parties.
The main actions to which these motions relate
are five in number seeking to enforce certain provi
sions of the Customs Act, R.S.C. 1970, c. C-40, as
amended, particularly subsection 192(1). That
subsection provides that when goods have been
smuggled into Canada, or when false invoices have
been made out with respect to goods, or when they
have been undervalued, such goods shall be forfeit-
ed to the Crown. The subsection also provides that
when the goods cannot be found, a sum of money
equal to their value is forfeited to the Crown.'
It is this provision which it is sought to apply
and the total amount claimed by the plaintiff from
the defendants is:
value of goods $118,451,026.20
duty 16,821,350.80
sales tax 12,770,989.58
$148,043,366.58
The statements of claim allege that: the defend
ants imported goods into Canada (paragraph 2);
they were required to present, for customs pur
poses, invoices setting forth the fair market value
of the goods (paragraph 3); the defendants pro
vided false documentation in this regard to the
Department of National Revenue (paragraph 4);
the defendants made false declarations to Customs
regarding fair market value (paragraph 5); and in
the alternative that they undervalued the goods
and thereby defrauded the revenue of duty
(paragraph 8).
Rule 448 list of documents—Amway Corporation
An affidavit filed in support of the plaintiff's
motion discloses that on August 6, 1985, when
Amway Corporation served its Rule 448 list of
documents on the plaintiff, that list was accom
panied by a letter which stated:
I 192. (l) 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 avoiding
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).
... the only issue of fact as between the Defendant Amway
Corporation and the Plaintiff is, in our view, the denial by
paragraph 2 of the respective Defences of the allegation in
paragraph 2 of the respective Statements of Claim that Amway
Corporation imported goods into Canada, and that being the
only issue of fact, it is the only "matter in question" relating to
which there could be any documents that require to be listed by
Amway Corporation to comply with Rule 448.
For the above reasons, we are satisfied, after very careful
consideration, that the documents listed with reference to
aforesaid aspect of each case are, in principle, all the docu
ments "relating to any matter in question in the cause or
matter" that are or have been in Amway Corporation's posses
sion, etc.
The plaintiff argues that implicit in this asser
tion is a recognition that there are further docu
ments in Amway Corporation's possession which
should have been produced but which were not
produced because of counsel's interpretation of the
"matter in issue".
It is trite law that on discovery every document
which may either directly or indirectly enable the
party seeking production either to advance his own
case or damage that of his adversary must be
produced: Compagnie Financiere du Pacifique v.
Peruvian Guano Company (1882), 11 Q.B.D. 55
(C.A.); Boxer v. Reesor (1983), 43 B.C.L.R. 352
(S.C.); R. v. Special Risks Holdings Inc., [1983] 2
F.C. 743 (C.A.); Everest & Jennings Canadian
Ltd. v. Invacare Corporation, [1984] 1 F.C. 856
(C.A.).
The defendant, Amway Corporation, does not
contest this statement of the law but argues that
on the basis of the plaintiff's statements of claim
the only issue, as between the plaintiff and Amway
Corporation is whether or not Amway Corporation
imported goods into Canada. It is argued that
because Amway Corporation has denied that it
imported goods into Canada, it is required to
produce only documents relating to that issue and
not any documents which might relate to the
providing of false documentation to the Depart
ment of National Revenue, false declarations to
Customs, or the undervaluing of goods.
Counsel's argument proceeds by taking para
graph two of the statements of claim and reading
that paragraph as an integral part (or condition
precedent) of every other paragraph in the state
ments of claim. Paragraph two states:
... the defendants imported into Canada, certain goods, of
which they were the owners. The Defendants entered these
goods under one hundred and eighty-two (182) separate Cus
toms entries.
Counsel for Amway argues that paragraph two
must be read as describing the goods which were
either imported severally by either Amway Corpo
ration or Amway Canada, or jointly (by the two
corporations acting in concert), but then makes a
quantum leap in his argument by stating that the
only issue to which Amway Corporation must
respond is the allegation that it imported goods
into Canada. This is not a reasonable interpreta
tion of the statements of claim.
I find the argument completely without merit.
The statements of claim, on their face, are com
posed of independent paragraphs, all of which
allege that the defendants engaged in certain
activities. Counsel's argument requires reading
into each paragraph words that are not there. I do
not read the statements of claim in that fashion; in
fact it takes some linguistic gymnastics if not
purposive misconstruction to do so.
There is nothing on a plain reading of the
statements of claim which precludes, for example,
the allegation of undervaluing as against Amway
Corporation to be in relation to goods imported by
Amway Canada. Whether this makes Amway
Corporation legally liable under the Customs Act
is another issue—one which will undoubtedly be
addressed in argument at trial (see infra page
326).
Counsel does not contest that the other defend
ant, Amway Canada, must produce documents
relating to the providing of false documentation, of
false statements to Customs and of undervaluation
(to the extent it has them). In his view this is
because Amway Canada has admitted that it was
an importer of the goods. To state the defendant's
argument in this fashion makes it clear that it is
based on the premise that a defendant can control
the scope of discovery as against it by either
denying or admitting the allegations made against
it in a statement of claim. To state the argument
thus, is to demonstrate its fallacy.
Alternatively, counsel for Amway Corporation
invited the Court to determine the threshold ques
tion (as he characterized it) as to whether or not
Amway Corporation was an importer of goods,
pursuant to Rule 476. I decline to do so. This is
not an appropriate circumstance for the applica
tion of that Rule.
Claim of privilege on the basis of self-incrimina-
tion—Amway Canada
The defendant, Amway Canada, claims in its
list of documents filed pursuant to Rule 448, privi
lege for certain documents so listed, on the ground
that disclosure would involve self-incrimination.
The privilege in issue is not that accorded to a
witness by subsection 5(2) of the Canada Evidence
Act, R.S.C. 1970, c. E-10, now also by section 13
of the Canadian Charter of Rights and Freedoms 2
[being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11
(U.K.)]. This privilege does not excuse a witness
from producing documents (or answering ques
tions). It merely allows a person claiming there-
under to avoid having the evidence so given used
against it in subsequent proceedings. This is not
what is claimed in the present case. Indeed, subse
quent criminal proceedings seem highly unlikely
because both defendants have already been con
victed, on November 10, 1983 in the Supreme
Court of Ontario, of fraud in relation to the events
which underlie the plaintiffs present claim against
them.
Amway Canada's argument is that at common
law, and now under the Canadian Charter of
Rights and Freedoms, a person accused of an
2 13. A witness who testifies in any proceedings has the right
not to have any incriminating evidence so given used to incrimi
nate that witness in any other proceedings, except in a prosecu
tion for perjury or for the giving of contradictory evidence.
offence has a right to stand mute (i.e.: cannot be
compelled to be a witness).
The argument based on common law is quickly
answered. Any such privilege is overridden by
statute. Section 170 of the Customs Act provides
for the production of all invoices, documents, etc.
for the purposes of any suit under the Act.
Paragraph 11(c) of the Canadian Charter of
Rights and Freedoms provides:
11. Any person charged with an offence has the right
(c) not to be compelled to be a witness in proceedings against
that person in respect of the offence;
Counsel's argument is that section 192' of the
Customs Act is penal in nature (regardless of
whether the forfeiture provisions or those provid
ing for summary conviction or indictable offences
are invoked). He contends that paragraph 11(c) of
the Charter is applicable to all penal offences,
regardless of the procedure used to enforce them.
This requires reading the word "charged" in sec
tion 11 as broad enough to include the notice
procedure under section 161 of the Customs Act.
3 Subsection 192(1) defining the offence to which section 192
applies is set out above (page 316). Subsections 192(2) and (3)
provide:
192....
(2) Every such person shall, in addition to any other penalty
to which he is subject for any such offence,
(a) forfeit a sum equal to the value of such goods, which sum
may be recovered in any court of competent jurisdiction; and
(b) further be liable on summary conviction before two
justices of the peace to a penalty not exceeding two hundred
dollars and not less than fifty dollars, or to imprisonment for
a term not exceeding one year and not less than one month,
or to both fine and imprisonment.
(3) Every one who smuggles or clandestinely introduces into
Canada any goods subject to duty of the value for duty of two
hundred dollars or over is guilty of an indictable offence and
liable on conviction, in addition to any other penalty to which
he is subject for any such offence, to a penalty not exceeding
one thousand dollars and not less than two hundred dollars, or
to imprisonment for a term not exceeding four years and not
less than one year, or to both fine and imprisonment, and such
goods if found shall be seized and forfeited without power of
remission, or if not found but the value thereof has been
(Continued on next page)
In support of the contention that section 11 of
the Charter encompasses actions that are truly
penal in nature, not merely those in which the
enforcement is by way of summary conviction or
indictable offence, counsel cite' Peltari v. Dir. of
Lower Mainland Reg. Correctional Centre (1984),
42 C.R. (3d) 103 (B.C.S.Ç.); Russell v. Radley,
[ 1984] 1 F.C. 543 (T.D.). `He refers particularly to
the analysis of Mr. Justice Gibbs at page 111 in
the Peltari decision:
Upon reviewing other Charter cases, and upon careful ana
lysis of the Charter, and particularly s. 11, it is my opinion that
"offence" in s. 11(h) means conduct prohibited by law on pain
of punishment.
And to the conclusion of Mr. Justice Muldoon at
page 565 of the Russell decision:
Equally, there seems no doubt that the word "offence" in
section 11 excludes a tort or a délit. What then is meant by
"offence"? Surely it must mean conduct (truly, culpable mis
conduct) defined and prohibited by law, which, if found beyond
a reasonable doubt to have been committed in fact, is punish
able by fine, imprisonment or other penalty imposed according
to law upon the culpable miscreant, the offender.
The Supreme Court has held that the Charter
should be liberally interpreted: Law Society of
Upper Canada v. Skapinker, [1984] 1 S.C.R. 357;
Hunter et al. v. Southam Inc., [1984] 2 S.C.R.
145; R. v. Big M Drug Mart Ltd. et al., [1985] 1
S.C.R. 295.
Equally I am aware that in the United States,
where, as is well known, a much broader definition
of privilege against self-incrimination has devel
oped than exists in Canada, that privilege has been
held applicable in cases involving forfeiture.
(McCormick on Evidence, West Pub. Co., 2d ed.
1972, at pages 257-258; Boyd v. United States,
116 U.S. 616 (1886).)
It should be noted that if the defendant's argu
ment is right and section 11 protections apply to
the forfeiture action, not only would paragraph
11(c) become an issue, but paragraph 11(d) also.
Paragraph 11(d) provides that a person is "to be
(Continued from previous page)
ascertained, the person so offending shall forfeit without power
of remission the value thereof as ascertained.
presumed innocent until proven guilty". But sub
section 248(1) of the Customs Act provides:
248. (1) In any proceedings instituted for any penalty,
punishment or forfeiture or ... the burden of proof lies upon
the ... person whose duty it was to comply with this Act ...
and not upon Her Majesty ....
The plaintiff argues that the forfeiture proceed
ing is civil in nature; that forfeiture results in a
debt owing to the Crown, which by its very nature
is a civil matter; that section 11 of the Charter
requires a criminal type procedure—it is specifi
cally stated to apply where "Any person [is]
charged". Mr. Justice Cattanach's decision in
Amway of Canada, Ltd. and M.N.R. (1983), 5
C.E.R. 247 (F.C.T.D.) and that of the Ontario
Supreme Court in Ng v. R. (1981), 24 C.R. (3d)
178 are cited. Neither of these are particularly
helpful since neither deals with the scope of para
graph 11(c). In addition, while Mr. Justice Cat-
tanach referred to forfeiture proceedings as civil
he was obviously adopting the terminology used by
counsel. Other passages in his judgment make it
clear that he considered forfeiture to be a penalty
arising out of the commission of an offence. In Ng,
Mr. Justice Eberle did not find it necessary to
decide for the purpose of his decision whether
forfeiture proceedings were civil or "quasi-crimi
nal". The consequence of the plaintiffs position is
that if the Crown had proceeded against the
defendant under paragraph 192(2)(b) by way of
summary conviction (for which the maximum fine
is $200) all the guarantees of section 11 of the
Charter would apply, but since it proceeded under
192(2)(a) by way of forfeiture (for which
$118,026.20 is sought) the Charter guarantees do
not apply.
The Charter issue was raised by the defendants
in response to the plaintiffs motion for production
of documents. It was clear that it was unanticipat
ed by the plaintiff. Therefore the exhaustive and
considered response which the issue deserves was
not available to me. While I might reopen the issue
to allow for further argument I have decided not to
do so because, in my view, the defendants' position
in any event cannot succeed.
Even if paragraph 11(c) applies to a forfeiture
proceeding such as the present, and even if it
applies to accord protection to corporations as well
as to individuals, I do not think it can apply to
preclude the production of documents in this case.
The argument being made is that since an accused
cannot be compelled to testify, the defendant cor
poration cannot be compelled to produce docu
ments. Yet if an accused chooses to testify all
relevant questions are required to be answered. 4 In
this case the defendant corporation has produced
documents which support its position; it has not
chosen to stand mute. Accordingly, even under the
application of the rule it cannot now refuse to
produce other relevant documents, those which do
not support its position.
While it is true that the Rules of this Court
require the production of documents and require
that those for which privilege is sought be so
identified in the 448 list, that Rule was not drafted
by reference to the non-compellability rule, now
set out in paragraph 11(c) of the Charter. It was
drafted with reference to privilege claimed, for
example, on the basis of a solicitor-client relation
ship or Crown immunity. Trying to apply the rule
of non-compellability within the context of discov
ery proceedings, as the defendant asks me to do,
demonstrates how awkardly it applies, if it applies
at all. But in any event, proceeding by analogy, an
accused may refuse to testify, but if he does so, he
is required to answer all questions, other than
those to which a solicitor-client or other privilege
might apply but not on the ground of a privilege
against self-incrimination. Concomitantly, in this
case the defendant might have sought, prior to
filing a 448 list of documents, an order of the
Court (pursuant to section 252 of the Customs
Act) adapting the Rules to accommodate the
Charter rights which are now asserted. This would
° See generally: Report of the Federal/Provincial Task Force
on Uniform Rules of Evidence (Carswell, 1982), especially at
pages 424 and following, and Ratushny, Self-incrimination in
the Canadian Criminal Process (Carswell, 1979).
have raised the issue of the compellability of the
defendant prior to the commencement of the dis
covery. But that was not done. The defendant filed
a list of documents in its favour. It must now file a
list of the other relevant documents.
In addition, it is well settled that the
non-compellability rule does not preclude the pro
duction of objective fact evidence, nor non-tes
timonial out-of-court statements: Curr v. The
Queen, [1972] S.C.R. 889; Validity of Section
92(4) of The Vehicles Act, 1957 (Sask.), [1958]
S.C.R. 608; Marcoux et al. v. The Queen, [1976]
1 S.C.R. 763. The documents in question in gener
al, were prepared long before the trial proceedings.
In my view, in the hands of a corporation they are
much more analogous to the objective fact evi
dence which the Supreme Court dealt with in the
Curr case, than they are to the testimonial type
evidence to which paragraph 11(c) is addressed.
And lastly, if the defendants are right in the
arguments which they have made and which I
have not addressed, and if I am wrong with respect
to the scope of protection flowing in any event
from paragraph 11(c), there would still be section
1 of the Charter to consider. This would seem to
be a most appropriate case for its application.
Motion to strike out Amway Corporation as a
defendant
Amway Corporation seeks an order striking out
paragraph two of the plaintiff's statement of claim
pursuant to Rule 419, and consequent thereon an
order entering judgment dismissing the action as
against it. The ground alleged is that paragraph 2
is scandalous, frivolous or vexatious, or otherwise
an abuse of the process of the Court. Alternatively
an order is sought for judgment in Amway Corpo
ration's favour pursuant to Rule 341, on the
ground that there are admissions in the examina-
tion for discovery and other documents justifying
such an order.
The claim pursuant to Rule 419 was not really
seriously pursued and indeed it does not deserve
serious consideration. In the first place paragraph
two of the statement of claim has long been plead
ed over. Secondly, even if paragraph two were
attachable for vagueness that would not justify
striking out the whole statement of claim. The
obvious remedy would be to allow the plaintiff an
opportunity to amend.
The argument made by Amway Corporation in
support of both motions is that (1) the Customs
Act imposes duties, liabilities and penalties only
against importers of goods (sometimes also the
owners or carriers); (2) the statement of claim as
against Amway Corporation (as noted above,
pages 317 and following) raises only the issue of
whether or not it was an importer; (3) the evidence
given so far on the examination for discovery of
the plaintiffs witness, Dwight St. Louis, discloses
no factual basis for the Crown's allegation that
Amway Corporation was an importer; and there
fore the statement of claim should be struck out as
against it or judgment should be entered in its
favour.
It is not clear and obvious that the Customs Act
imposes liabilities only on importers (owners and
carriers). Subsection 192(1) on which the Crown's
action is framed provides:
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 avoiding
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). [Underlining added.]
Counsel for Amway Corporation argues that para
graph (b) should be interpreted as imposing a
liability only on an importer (even though the
section is framed as relating to "any person")
because the duty of providing invoices is imposed
elsewhere in the Act on the importer (sections 20
and 21). It is argued that paragraph (c) only
imposes liability on importers because it is the
importer which has the liability to pay duty (sec-
tion 22).
This may be one possible interpretation of sub
section 192(1) but equally the contrary and more
general application of the subsection can be
argued by reference to the fact that the subsection
purports to apply to "any person". Thus, it is clear
that even if the facts as alleged by the defendant
were true (that Amway Corporation was not an
importer) there exists a contentious legal issue of
statutory interpretation to be resolved. There is an
issue for argument at trial, not one to be disposed
of by a motions judge in a preliminary proceeding
pursuant to Rule 341. Refer: R. v. Gary Bowl
Limited, [1974] 2 F.C. 146 (C.A.) quoting [at
page 148] from Gilbert v. Smith (1876), 2 Ch. D.
686 (C.A.) [at page 689] in relation to Rule 341:
The rule was not meant to apply when there is any serious
question of law to be argued.
And at page 149 of the Gary Bowl decision, per
Chief Justice Thurlow:
... when the material facts are clearly admitted and the result
of the application of the law to them is not in doubt so that it is
apparent that a plaintiff is entitled ex debito justitiae to the
relief which he claims in the action or that a defendant is
entitled to judgment dismissing the action against him, as the
case may be, a motion under Rule 341 is an appropriate
procedure to obtain such relief immediately in lieu of allowing
the action to proceed to a trial which in the end can have no
other result.
See also: Cyrus J. Moulton Ltd. v. The Queen,
[1976] 1 F.C. 437 (C.A.) and Diamond Shamrock
Corporation v. Hooker Chemicals & Plastics
Corp. et al. (1982), 66 C.P.R. (2d) 145
(F.C.T.D.).
While this reason alone would justify denial of
the defendant's motion I will consider the other
elements of its argument.
With respect to the defendant's interpretation of
the plaintiff's statement of claim, I have already
indicated that I do not read it as restrictively as
counsel for Amway Corporation urges (see supra:
pages 318 and following). In my opinion, the
statement of claim does more than raise as against
Amway Corporation the issue of whether or not
that corporation was an importer of the goods.
With respect to counsel's argument that the
discovery proceedings so far disclose no factual
basis for the plaintiffs allegation that Amway
Corporation was an importer of the goods—indeed
he argues that the Crown's witness has admitted
that fact—these arguments are without founda
tion.
Counsel's conclusions in this regard are based
largely on questions he repeatedly put to the plain
tiff's witness concerning the documents, which
have so far been produced. He asked, with respect
to each, who, according to the documents, was
listed thereon as the importer. It was, of course,
Amway Canada. This is not surprising; but, nor is
it determinative of the issue as to who was and
who was not in reality the importer.
Secondly, the conclusion that counsel asks me to
draw (i.e. that Amway Corporation was not an
importer) involves a weighing of the evidence given
by the Crown's witness on discovery, an evaluation
and assessment of the affidavit evidence given by
certain independent customs brokers on deporta
tion proceedings brought against Messrs.
VanAndel and DeVos with respect to the fraud
charges, and the making of conclusions and infer
ences from documents the Crown sent to Amway
Corporation and Amway Canada, including the
report to the Minister given pursuant to sections
162 and 163 of the Act. These are clearly matters
to be determined at trial, by the Trial Judge, after
all the evidence, including presentation of the
Crown's case, has been heard. It is premature for a
motions judge to embark on that endeavour. This
is not a case where the discoveries clearly disclose
the disappearance of the issue to which the claim
relates.
Thirdly, it strikes me as a rare species of effron
tery for the defendant, having discovered the
plaintiff's witness, while refusing to produce all
relevant documents in its own possession and while
refusing to allow discovery of its own officers, to
seek to have judgment rendered in its favour, on
the ground that the answers to questions on discov
ery do not sufficiently prove the facts in issue as
against it. The questions asked of the witness on
discovery were completely in the control of the
defendant's counsel. The Crown has had no oppor
tunity to present its case.
Fourthly, counsel's representations that the
plaintiff has admitted in the examination for dis
covery that the defendant, Amway Corporation
was not an importer of the goods is simply not
substantiated by the record. See: Examination for
Discovery Exhibit A, volume I; page 60, lines
15-25; pages 62-63; page 69, lines 22-27; page 73,
lines 15-22; pages 74-78; page 145; page 150 and
page 205 Exhibit A, volume III, pages 515-517;
page 546. While counsel often indulge in a certain
amount of overstated rhetoric in pleading their
client's case, the obviously incorrect generaliza
tions made in this case were not useful.
Conclusion
Accordingly, the motion seeking a proper Rule
448 list of documents from Amway Corporation
and the motion requiring Amway Canada to pro
duce the documents listed in Schedule I, Part II,
Part B for which it has claimed privilege are
allowed. The motion seeking to have the plaintiff's
statement of claim struck out as against Amway
Corporation is denied.
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.