Date: 20060905
Docket: T-314-04
Citation: 2006 FC 1062
Vancouver, British Columbia, September 5, 2006
PRESENT: Roger R. Lafrenière, Esquire
Prothonotary
SIMPLIFIED ACTION
BETWEEN:
ARTHUR MAINIL, in his personal
capacity
and as agent for DON OLAH
Plaintiff
and
THE
MINISTER OF NATIONAL REVENUE
Defendant
REASONS FOR ORDER AND ORDER
[1]
The
Plaintiff arranged for the delivery of a shipment of durum wheat to the border
between the United
States of America
(U.S.) and Canada near Portal, North Dakota and
North Portal, Saskatchewan. The wheat was refused entry
by U.S. Customs because an export permit from the Canadian Wheat Board was not
produced.
[2]
When the
wheat crossed back into Canada, it was seized on the grounds that it had been
exported without having been reported in writing to Canada Customs, and without
presentation of a valid export licence, in contravention of the Customs Act, R.S.,
1985, c. 1 (2nd Supp.) (Customs Act), and the Canadian Wheat Board
Regulations, C.R.C., c. 397 (CWB Regulations).
[3]
The
Plaintiff paid $3,062.00 to obtain the release of the goods. By way of
simplified action, the Plaintiff seeks to recover the amount paid.
[4]
Based on
the facts adduced at trial, the Plaintiff’s standing to bring this action is suspect.
The key issue, however, is whether the seized wheat was “exported” within the
meaning of the Customs Act and the CWB Regulations.
Legislative background
[5]
To place
this case in context, a brief review of the legislation governing the
exportation of wheat from Western
Canada is in
order.
[6]
Section 14
of the CWB Regulations requires that an exporter of wheat or barley
obtain a licence from the Corporation (defined as the CWB in the Canadian
Wheat Board Act, R.S., c. C-12) before grain may be exported.
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14. The
Corporation may grant a licence for the export, or for the sale or purchase
for delivery outside Canada, of wheat, wheat products, barley or barley
products if
(a) the export, sale or
purchase of the grain or products for which the licence is sought does not
adversely affect the marketing by the Corporation, in interprovincial or
export trade, of grain grown in Canada; and
(b) the applicant pays
to the Corporation a sum of money that, in the opinion of the Corporation,
represents the pecuniary benefit enuring to the applicant
pursuant to the granting of the licence, arising solely by reason of the
prohibition of the export of that grain or those products without a licence,
and the then existing differences between the prices of that grain or those
products inside and outside Canada.
14.1 The
Corporation may grant a licence for the transportation from one province to
another, or for the sale or delivery anywhere in Canada, of wheat, wheat
products, barley or barley products, but no fee shall be charged for such a
licence.
14.2
Any person who exports wheat, wheat products, barley or barley products from Canada
shall, at the time of exportation, give to a customs officer at the customs
office at the point of exit specified on the export licence
(a) the original export
licence for that grain or product, and a copy of it; or
(b) in the case of an
export licence for multiple shipments of that grain or product
(i) at the time of every
shipment except the final shipment, two copies of the export licence, and
(ii) at the time of the final
shipment, the original export licence and a copy of it.
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14. La Commission peut octroyer des
licences pour l’exportation ou pour la vente ou l’achat en vue de la
livraison à l’étranger de blé, de produits du blé, d’orge ou de produits de
l’orge si les conditions suivantes sont réunies :
a)
l’exportation, la vente ou l’achat des grains ou des produits pour lesquels
une licence est demandée ne nuit pas, dans le cadre du commerce
interprovincial ou de l’exportation, à la commercialisation par la Commission
du grain cultivé au Canada;
b) le
demandeur verse à la Commission une somme qui, de l’avis de celle-ci,
correspond à l’avantage pécuniaire que représente la licence, lequel avantage
découle uniquement, d’une part, du fait que sans cette licence l’exportation
serait interdite et, d’autre part, des différences existant à ce moment entre
les prix intérieurs et extérieurs des grains ou des produits en question.
14.1 La Commission peut
octroyer des licences pour le transport d’une province à une autre ou pour la
vente ou la livraison en quelque lieu du Canada de blé, de produits du blé,
d’orge ou de produits de l’orge, ces licences étant octroyées à titre
gratuit.
14.2 Quiconque exporte
du blé, des produits du blé, de l’orge ou des produits de l’orge doit, au
moment de l’exportation, remettre à l’agent du bureau des douanes au point de
sortie précisé sur la licence d’exportation :
a) soit
l’original de la licence d’exportation visant ces céréales ou produits
céréaliers, et une copie de celle-ci;
b) soit,
s’il s’agit d’une licence d’exportation visant plusieurs expéditions de ces céréales
ou produits céréaliers :
(i) deux
copies de la licence lors de chaque expédition sauf la dernière,
(ii)
l’original et une copie de la licence lors de la dernière expédition.
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[7]
Section 95
of the Customs Act and section 3 of the Reporting of Exported Goods
Regulations, SOR/86-1001 (Reporting Regulations) require that goods
be reported in writing.
Section 95 of the Customs Act
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95. (1) Subject to
paragraph (2)(a), all goods that are exported shall be reported at
such time and place and in such manner as may be prescribed.
(2) The Governor in
Council may prescribe
(a) the
classes of goods that are exempted from the requirements of subsection (1)
and the circumstances in which any of those classes of goods are not so
exempted; and
(b) the
classes of persons who are required to report goods under subsection (1) and
the circumstances in which they are so required.
(3) Every person
reporting goods under subsection (1) shall
(a) answer
truthfully any question asked by an officer with respect to the goods; and
(b) where an
officer so requests, present the goods to the officer, remove any covering
from the goods, unload any conveyance or open any part thereof, or open or
unpack any package or container that the officer wishes to examine.
(4) If goods are required to be reported in writing,
they shall be reported in the prescribed form containing the prescribed
information or in such form containing such information as is satisfactory to
the Minister.
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95. (1) Sous
réserve de l’alinéa (2)a), toutes les marchandises exportées doivent
être déclarées selon les modalités réglementaires de temps, de lieu et de
forme.
(2) Le
gouverneur en conseil peut, par règlement :
a)
désigner les catégories de marchandises exemptées des dispositions du
paragraphe (1) et déterminer les circonstances où certaines de ces catégories
ne sont pas exemptées;
b)
désigner les catégories de personnes tenues de déclarer des marchandises en
application du paragraphe (1) et déterminer les circonstances des
déclarations.
(3) Le
déclarant visé au paragraphe (1) doit :
a)
répondre véridiquement aux questions que lui pose l’agent sur les
marchandises;
b) à la
demande de l’agent, lui présenter les marchandises et les déballer, ainsi que
décharger les moyens de transport et en ouvrir les parties, ouvrir ou défaire
les colis et autres contenants que l’agent veut examiner.
(4) Les
déclarations de marchandises à faire par écrit sont à établir avec les
renseignements et en la forme réglementaires ou satisfaisants pour le
ministre.
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Section 3 of the Reporting
Regulations
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3. Except as otherwise provided in these
Regulations, all goods that are exported shall, prior to their exportation,
be reported under section 95 of the Act in writing by the exporter, the agent
of the exporter or the person transporting the goods
(a) in the case of exportation of goods by mail, at
the post office where the goods are mailed;
(b) in the case of exportation of goods by vessel,
at the last port of call of the vessel where a customs office is located;
(c) in the case of exportation of goods by
aircraft, at the customs office nearest the place of departure of the
aircraft; or
(d) in any other case, at the customs office
nearest the place of exportation of the goods or at any other customs office
designated for the purpose of reporting pursuant to section 5 of the Act.
SOR/88-85.
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3. Sauf
disposition contraire du présent règlement, toutes les marchandises exportées
doivent être déclarées par écrit en vertu de l'article 95 de la Loi, avant
leur exportation, par l'exportateur, son mandataire ou la personne
transportant les marchandises :
a) dans le
cas de marchandises exportées par courrier, au bureau de poste d'où elles
sont expédiées;
b) dans le
cas de marchandises exportées par bateau, au dernier port où ce bateau fait
escale et où il y a un bureau de douane;
c) dans le
cas de marchandises exportées par aéronef, au bureau de douane le plus proche
de leur point de départ;
d) dans
tout autre cas, au bureau de douane le plus proche du point d'exportation des
marchandises ou à tout autre bureau de douane établi, en vertu de l'article 5
de la Loi, pour recevoir les déclarations. DORS/88-85.
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[8]
In
addition, section 5 of the Reporting Regulations requires that the
exporter provide the export licence to Customs prior to exportation of the
grain.
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5. For the purposes of these Regulations, the exporter of goods shall
provide to the chief officer of customs on or before the day of exportation
any information and all certificates, licences, permits or other documents
relating to the goods that are required under the Act or any other Act of
Parliament, or under any regulations made pursuant thereto, that prohibit,
control or regulate the exportation of goods.
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5. Aux
fins du présent règlement, l'exportateur des marchandises doit fournir à l'agent
en chef des douanes, le jour où les marchandises sont exportées ou avant
cette date, tous les renseignements et les certificats, licences, permis ou
autres documents relatifs à ces marchandises qui sont requis en vertu de la
Loi, d'une autre loi fédérale ou de leurs règlements d'application qui
prohibent, contrôlent ou réglementent l'exportation de marchandises.
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Facts
[9]
This
action is governed by the simplified procedure set out in Rules 292 to 299 of
the Federal Courts Rules, SOR/98-106 as amended. Accordingly, the
parties’ evidence-in-chief was adduced by affidavit and the deponents were
cross-examined at trial. Since statements were obtained from the persons
involved in the failed shipment of wheat and its seizure contemporaneously with
the events, there is no genuine dispute over the material facts.
[10]
The
Plaintiff is a farmer who owns a grain elevator located in Stoughton, Saskatchewan. He has long
complained about what he perceives as discrimination against western Canadian
grain producers, who are required by law to broker their grain exclusively
through the CWB.
[11]
According
to the Plaintiff, he negotiated the sale of durum wheat on behalf of another
local farmer, Don Olah, to Berthold Farmer’s Elevator in Berthold, North Dakota (Berthold Elevator) some time prior to
February 11, 2002.
[12]
Berthold
Elevator made arrangements with an American trucker, Craig Grabow, to pick up
the wheat at the Plaintiff’s elevator with a semi-trailer truck on February 11,
2002. The Plaintiff testified that he loaded the wheat onto Mr. Grabow’s truck
that morning. He denies having anything else to do with transportation of the
wheat or knowing its final destination. He also disclaimed any responsibility
for securing an export permit since it “wasn’t (his) wheat”.
[13]
After the
wheat was loaded, both Mr. Grabow and the Plaintiff made their way in separate
vehicles to the Canada-U.S. border, passing by the Canadian Customs office. Mr.
Grabow reported to U.S. Customs at the port of entry at Portal, North Dakota,
around 10:00 a.m.
[14]
The
shipment of wheat was refused entry into the U.S. because it was not accompanied by a
valid export licence from the Canadian Wheat Board. The truck sat idle at U.S.
Customs for over 4 hours while the Plaintiff attempted to locate a brokerage
firm in Portal to obtain clearance for the wheat into the U.S. His attempts proved futile.
[15]
Around
2:25 p.m., Canada Customs was notified by U.S. Customs that the shipment of
wheat would be returning to Canada. The Plaintiff arrived at the
primary area of Canada Customs at approximately 3:45 p.m., and was directed
into an office, where he was cautioned by Customs Officer Tim Fogarthy and then
interviewed about the “wheat incident on the U.S. side”.
[16]
When asked
who owned the durum wheat, the Plaintiff replied that Berthold Elevator was the
owner. The balance of the interview is summarized as follows in a narrative
report prepared in relation to the seizure action.
Officer FOGARTHY asked Mr. MAINIL who the
truck driver was. Mr. MAINIL stated that he did not know. Officer FOGARTHY
asked Mr. MAINIL “How did you know about the Wheat?” Mr. MAINIL stated that he
had heard about it. Officer FOGARTHY stated that everyone who exports Wheat or
Barley must have a Wheat Board Permit. Mr. MAINIL stated that the Brandon Court ruled that there was no such
thing as a Wheat Board Permit. Officer FOGARTHY stated that everyone who
exports Wheat or Barley must have a permit. Mr. MAINIL stated that a U.S.
truck came to Canada, picked up a load of Wheat
and was importing the wheat into the United States. Mr. MAINIL came down to see what would happen when the
truck was American and the driver was American.
[17]
At 3:47
p.m., Mr. Grabow pulled into the primary area in his truck loaded with wheat.
His truck and contents were immediately placed under Customs seizure on the
grounds that the wheat had not been properly exported from Canada in accordance with section 95
of the Customs Act.
[18]
Mr. Grabow
was cautioned and questioned regarding the wheat. He claimed that he was not
aware that an export permit was required on exit of the grain from Canada. He also stated the Plaintiff
told him he would be handling all of the paperwork and that it would be waiting
for him at the border.
[19]
The wheat
was initially detained pending identification of the owner and exporter.
Berthold Elevator initially claimed to be both owner and exporter. However, on
February 12, 2002, the day following the seizure, Mr. Olah declared that he was
in fact the owner and that he was getting an export permit to export the wheat
to the US.
[20]
Seizure
action was taken in the name of the Plaintiff, as agent for Mr. Olah on the
grounds that the wheat was exported without a report in writing to Canada
Customs and without presentation of a valid export, contrary to section 95 of
the Customs Act and the Reporting Regulations. In order to
obtain the release of the wheat and trailer, the Plaintiff was required to pay
$3,062.00.
[21]
The
Plaintiff submitted a Request for a Decision of the Minister in accordance with
section 129 of the Customs Act. According to the Plaintiff, the wheat
had not been exported to the U.S. and no offence had been
committed. A ministerial decision was rendered on November 25, 2003, confirming
the forfeiture of $3,062.00.
Analysis
[22]
The
Plaintiff has maintained throughout that the wheat in question was owned by
Berthold Elevator and that Berthold Elevator was the exporter. According to the
Plaintiff, “it was American grain and an American carrier”.
[23]
In the
absence of any proprietary claim to wheat or any role in its exportation, the
Plaintiff’s standing to challenge the seizure action would appear to be
tenuous. Canada Customs concluded, however, that the Plaintiff was the driving
force behind the unlawful export and, in the absence of conclusive evidence of
an actual sale, such as a bill of sale from Berthold Elevator, deemed the
Plaintiff to be the exporter of record. There is ample evidence to support this
conclusion.
[24]
The
Plaintiff attempted to portray himself as just an elevator operator, whose only
role was to load a truck with wheat. In cross-examination, he stated that he
wasn’t even sure whether the wheat was going to the U.S. or elsewhere in Canada. And yet, the Plaintiff
negotiated the sale of wheat with an American company, loaded the wheat onto an
American licensed truck, attended at the U.S. port of entry with an American driver,
and spent over 4 hours trying to locate an American brokerage firm to broker
the wheat. These are not the actions of a simple bystander. On the evidence
before me, I conclude that the Plaintiff orchestrated the sale and export with
American actors to test the CWB’s monopoly and will proceed on the basis that
the Plaintiff was the true exporter.
[25]
The
Plaintiff submits that since the wheat was refused entry in the U.S. and was returned to an elevator in Canada, an export did not occur and
therefore no offence has been committed. However, I conclude that an export
did take place since the goods left Canada,
albeit for only a few hours.
[26]
Section 2
of the Customs Act provides a rather circular definition of export,
stating that “export means export from Canada”. The case law cited by the
parties is also of little assistance, since the focus is on intention to
export, as opposed to the act of exportation itself. Therefore, in the absence of any
different meaning attributed to the word in the Customs Act, export
should be read in its grammatical and ordinary sense, harmoniously with the
scheme and commercial context of the Act.
[27]
According
to Black's Law Dictionary, exportation is "the act of sending or carrying
goods from one country to another". It follows that the mere crossing out
of a country's border of goods for commercial purposes constitutes exportation.
The fact that the Plaintiff failed to import the wheat into the U.S. is completely irrelevant, since
importation is a separate transaction.
[28]
Even if
the wheat was not exported within the meaning of the Customs Act, the
Plaintiff contravened the law. By operation of section 95 of the Customs Act,
sections 3 and 5 of the Reporting Regulations, and section 14 of the CWB
Regulations, an exporter of wheat is required to: (1) report in writing to
Canada Customs prior to export of the grain; (2) present documentation that
would allow Canada Customs to identify the goods, their quantity and destination,
and; (3) provide evidence that the controlled or regulated goods may be
lawfully exported, such as an export licence.
[29]
A clear
contravention took place in that no report in writing was made to Canada
Customs and no export licence was obtained prior to the export (or attempted
export) of the wheat.
[30]
In the
circumstances, the Plaintiff has failed to establish that the forfeiture was
unlawful. The action must accordingly be dismissed, with costs.
ORDER
THIS COURT ORDERS
that the
action is dismissed, with costs.
“Roger
R. Lafrenière”
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