Date: 20050803
Docket: T-680-03
Citation: 2005 FC 1054
BETWEEN:
AMERSHAM HEALTH INC.
Plaintiff
- and -
HER MAJESTY THE QUEEN
IN RIGHT OF CANADA
as represented by
the Minister of National Revenue
Defendant
REASONS FOR ORDER AND ORDER
HUGESSEN J.
INTRODUCTION
[1] This is a motion for the determination of a question of law. The parties have filed an agreed statement of facts and the question to be decided is whether interest is payable under either of the Customs Tariff S.C. 1997, c. 36, or the Customs Act R.S.C. 1985, c. 1 on duties levied under the Special Import Measures Act R.S.C. 1985, c. 15 ("SIMA") and subsequently partially refunded to the plaintiff under an order made under s. 115 of the Customs Tariff.
BACKGROUND
[2] As set out in the Agreed Statement of Facts, imports by the Plaintiff of certain X-ray contrast media (the "subject goods") were found to have been dumped and to be causing injury to Canadian producers following an inquiry by the Canadian International Trade Tribunal (the "CITT") under SIMA. Accordingly, anti-dumping duties under SIMA were levied on the subject goods at the rate set out in the Final Determination issued by the Commissioner of the Canada Customs and Revenue Agency (the "CCRA"), as it then was (now the Canada Border Services Agency, or "CBSA"), .
[3] Following recommendations by the CITT that the collection in full of these anti-dumping duties would not be in the public interest under the provisions of section 45 of SIMA, the Governor General in Council issued a Remission Order, on May 2, 2001, under section 115 of the Customs Tariff. The Remission Order remitted a portion of the anti-dumping duties paid or payable on the subject goods imported on or after 31 December 1999, pursuant to the formula set out in the Schedule to the Remission Order.
[4] On 7 September 2001, the Plaintiff was advised by the CCRA that, pursuant to the Remission Order, a partial refund of the anti-dumping duties had been approved. The Plaintiff was refunded amounts in respect of anti-dumping duties paid on imports of subject goods in March and April 2000 totaling $2,131,348.51, including accrued interest to the date of the refund in the amount of $89,826.93.
[5] By notice dated 3 October 2001, the Plaintiff was advised by the CCRA that the interest portion of the 7 September 2001 refund had been given in error, as there was no provision under section 115 of the Customs Tariff to pay interest on the duties remitted.
[6] While the Defendant ultimately refunded $5,620,819.80 of the anti-dumping duties to the Plaintiff under the terms of the Remission Order, no interest was paid on the refunded amount, and the defendant clawed back from later payments the interest amount of $89,826.93 previously paid to the Plaintiff. The Plaintiff requested that the Minister re-consider that decision but its request was rejected. The Plaintiff then sought to have its entitlement to interest decided before the CITT by way of a re-determination under the Customs Act. In its decision AP-2001-093, issued on 10 March 2003, the CITT found that it did not have jurisdiction over the matter. As a result, the Plaintiff commenced the present action.
[7] The refund of duties granted to plaintiff was under s. 115 of the Tariff, which reads:
Discretionary relief
115. (1) The Governor in Council may, on the recommendation of the Minister or the Minister of National Revenue, by order, remit duties.
Scope of relief
(2) A remission under subsection (1) may be conditional or unconditional, may be granted in respect of the whole or any portion of the duties and may be granted regardless of whether any liability to pay the duties has arisen.
Remission by way of refund
(3) If duties have been paid, a remission under subsection (1) shall be made by granting a refund of the duties to be remitted.
[8] The question to be decided in the present matter, as stated in the Order of Prothonotary Milczynski, dated 2 March 2005, is the following:
Is the Plaintiff entitled to the payment of interest on anti-dumping duties remitted to it by the Crown under any applicable provisions of the Customs Act, Customs Tariff or any other law of Canada?
[9] It is common ground and settled law that interest cannot be claimed against the Crown unless there is a statute or contract expressly providing for it (see Gladstone v. Canada (Attorney General), [2005] 20 S.C.J. 21 (S.C.C.) at para. 20).
[10] The plaintiff submits that, by virtue of s. 12 of the Customs Tariff, certain sections of the Customs Act are relevant and provide for the payment of interest to it. Section 12 of the Customs Tariff reads as follows:
12. The provisions of the Customs Act apply, with such modifications as the circumstances require, in respect of the administration and enforcement of this Act and the regulations, and for the purposes thereof, a contravention of this Act or the regulations or a failure to comply with a condition to which relief or a remission, drawback or refund under Part 3 is subject or to which classification under a tariff item is subject is deemed to be a contravention of the Customs Act.
[11] The plaintiff goes on to argue that, by virtue of s. 12 of the Tariff, ss 74(1)(g) and 80.1 of the Customs Act apply and make interest payable by the defendant. Those provisions read as follows:
74. (1) Subject to this section, section 75 and any regulations made under
section 81, a person who paid duties on imported goods may, in
accordance with subsection (3), apply for a refund of all or part of those duties, and the Minister may grant to that person a refund of all of part of those duties if:
[...]
(g) the duties were overpaid or paid in error for any reason that may be prescribed.
[...]
[...]
80.1 Notwithstanding subsection 80(1), any person who, under paragraph 74(1)(g), is granted a refund of duties on imported goods on which the rate of customs duty is reduced by a retroactive order or regulation of the governor in council made under the Customs Tariff shall be granted, in addition to the refund, interest at the prescribed rate for the period beginning on the day after the duties were paid and ending on the day the refund is granted, calculated on the same amount of the refund.
[12] Part 9 of the Refund of Duties Regulations SOR/98-48 deals with "Duties Overpaid or Paid in Error for Other Reasons". Section 31 of Part 9 sets out the prescribed reasons under which refunds of duties are to be granted and states,
31. This Part applies to the granting of a refund under paragraph 74(1)(g) of the Act of duties overpaid or paid
(a) if the duties are reduced or removed by retroactive order or regulation made under the Customs Tariff; ...
ANALYSIS
[13] The Iodinated Contrast Media Anti-Dumping Duty Remission Order, P.C. 2001-799, 2 May 2001, SOR/2001-161 (the "Remission Order") starts with the words:
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 115 of the Customs Tariff, hereby makes the annexed Iodinated Contrast Media Anti-dumping Duty Remission Order.
[14] It is clear from this passage that the refund was given under the discretionary power of the Governor in Council provided for in s. 115 of the Customs Tariff. The plaintiff's major hurdle in this case is to show that the refund is one dealt with in s. 74(1)(g) of the Customs Act. If so, then interest is payable under s. 80.1 of that statute. If not, neither s. 115 of the Customs Tariff nor the Remission Order itself make any provision for interest and none is payable.
[15] The plaintiff submits that for the purposes of s. 80.1 of the Customs Act the Remission Order is a retroactive order made under the Customs Tariff. Although the Order itself does not expressly use the word "retroactive", s. 2 of the Order grants partial remission of duties "that were paid or payable on or after December 31, 1999." Thus, it is clear that the order applies retroactively, that is to say that the order affects a period prior to its date of May 2, 2001.
[16] Section 141 of the Customs Tariff notes the following with respect to a retroactive order:
141. (1) An order or regulation made under this Act may, if it so provides, be retroactive and have effect in respect of any period before it is made [...]
[17] The plaintiff's greatest hurdle is to convince the Court that the Remission Order, issued under s. 115 of the Customs Tariff, is a refund under s. 74(1)(g) of the Customs
Act. In this regard, the plaintiff suggests that this Court look to s. 31(a) of the Refund of Duties Regulations reproduced supra.
[18] That text, however, by its terms only applies in respect of a "refund under paragraph 74(1)(g)" of the Customs Act. Thus, while the Remission Order is a retroactive order made under the Customs Tariff, the Refund of Duties Regulations simply do not provide that an Order under s. 115 of the Customs Tariff is the same as a refund under s. 74(1)(g) of the Customs Act.
[19] While both s. 74(1)(g) of the Customs Act and s. 115 of the Customs Tariff are empowering provisions authorizing the granting of remission or refund of duties, there are significant formal differences between them. Most obvious is the fact that the former text gives authority to the Minister while the latter grants it to the Governor in Council. The triggering mechanism for s. 74 is an application by "a person who paid duties "while for s. 115 it is "the recommendation of the Minister or the Minister of National Revenue." The Minister's authority under s. 74 is controlled and restricted by the Refund of Duties Regulations while that of the Governor in Council is virtually unrestricted and wholly a matter of discretion. There is a very broad power to add conditions to a remission order under s. 115 while no such power is evident from a reading of s. 74. Finally, of course, interest is specifically made payable by s. 80.1 on a refund under s. 74(1)(g) while s. 127 of the Customs Tariff provided at the relevant time:
(2) A person who, under a provision of this Part other than section 115, is granted
a drawback or refund of an amount in respect of duty levied under the Special Import Measures Act shall be granted, in addition to the drawback or refund, interest on it at the prescribed rate in respect of each month or fraction of a month during the period beginning on the ninety-first day after the day an application for the drawback or refund is made in accordance with this Part and ending on the day the drawback or refund is granted.
[20] This text in my view manifests a clear legislative intention not to grant interest on refunds made under s. 115 of the Customs Tariff unless, of course, such interest is provided for in one of the conditions contained in the remission order made under that section. In the present case there is no such condition and the plaintiff is not entitled to interest.
CONCLUSION
[21] It is clear that the Remission Order herein was granted by the Governor in Council under s. 115 of the Customs Tariff; it is not a refund granted by the Minister under s. 74(1)(g). The Remission Order was not provoked by an application by the plaintiff but by a recommendation from the appropriate minister. The Remission Order makes no provision for the payment of interest and, absent such a provision, s. 127(2) manifests a legislative intention not to pay interest. The question of law raised by the present motion must be answered in the negative.
[22] Defendant's counsel submits, and I agree, that a negative answer to the question is dispositive of the plaintiff's action and an Order will accordingly go dismissing that action with costs.
ORDER
The question of law stated in the Order of 2 March, 2005 made herein is answered in the negative.
The plaintiff's action is dismissed with costs to be assessed.
"James K. Hugessen"
Ottawa, Ontario
August 3, 2005
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