[1] The proceeding before the Court is a consolidated judicial review application filed pursuant to section 18.1 of the Federal Court Act by Abbott Laboratories Limited, a Canadian company, (as importer) and Abbott Laboratories International, a U.S. Corporation, (as exporter) of the nutritional products Similac and Ensure, which the exporter had certified their origin as the United States entitling these products to preferential tariff treatment in Canada under the North American Free Trade Agreement (NAFTA). The importer is wholly owned by the exporter.

[2] The 96 decisions challenged were made by Canada Customs and Revenue Agency ("CCRA") who redetermined the nutritional products were not entitled to a preferential tariff rate because they did not meet the NAFTA Rules of Origin, and consequently were originating outside the United States or Mexico qualifying only for Most Favoured Nation ("MFN") tariff treatment.

[3] The process followed by the Compliance Verification Officers of the CCRA consisted of the steps described below. The Compliance Verification Officer involved was Ross Le Clair assisted by Gordon Chan. They are both designated by the Minister of National Revenue (the "Minister"), for the purposes of conducting verifications pursuant to section 42.1 of the Customs Act (the "Act") and making redeterminations and further redeterminations of origin and tariff classifications pursuant to section 59 of that Act on the basis of those verifications.

[4] First, Ross Le Clair wrote separate letters on September 16, 1999, to the exporter and the importer informing them CCRA would be undertaking a review of certain goods, namely Similac baby formula. Attached to the letter to the exporter were two NAFTA origin of goods verification questionnaires.

[5] U.S. counsel for the exporter contacted Mr. Le Clair in October 1999. Canadian counsel was appointed in early January 2000. Exchanges ensued. Three sample shipments were selected for review.

[6] On January 28, 2000, Canadian counsel for the exporter forwarded to Mr. Le Clair NAFTA certificates of origin for the goods, product labels listing the ingredients and the completed NAFTA origin verification questionnaire. These materials confirmed the three sampled products exported contained Milei whey. Legal counsel identified an issue concerning the effective date of the new Customs Tariff Act and new Rules of Origin and made representations that all of the non-originating materials, including the Milei whey, underwent a change in tariff classification as a result of production in the United States thus qualifying the Similac product for NAFTA treatment.

[7] Mr. Le Clair then decided to expand the scope of verification. On May 1 and May 9, 2001, he contacted legal counsel for the exporter stating the CCRA wished to verify the importation of all Abbott nutritional drinks which appeared to contain milk ingredients (basically all of the Similac and Ensure products exported to Canada). The exporter was also informed the period of review was from 1 January 1998 to date.

[8] In June 2001, in-house counsel for the importer informed Mr. Le Clair that the law firm of Ogilvy, Renault was now authorized to act on behalf of Abbott in connection with the NAFTA review.

[9] After reviewing the documents provided on Similac Infant formula (normal and advanced) on July 17, 2001, Ross Le Clair wrote to the exporter pursuant to subsection 42.2(1) of the Act to notify it of CCRA's intention to deny preferential tariff treatment for those two products.

[10] Section 42.2(1) of the Act reads:

42.2 (1) On completion of a verification of origin under paragraph 42.1(1)(a), an officer designated under subsection 42.1(1) shall provide the exporter or producer whose goods are subject to the verification of origin with a statement as to whether the goods are eligible, under the Customs Tariff, for the preferential tariff treatment that was claimed.

42.2(2) Basis of statement

(2) A statement referred to in subsection (1) must include any findings of fact or law on which it was based. [emphasis mine)

42.2 (1) Dès l'achèvement de la vérification de l'origine en application de l'alinéa 42.1(1)a), l'agent désigné, en application du paragraphe 42.1(1), fournit à l'exportateur ou au producteur des marchandises en cause une déclaration attestant de l'admissibilité de celles-ci, au titre du Tarif des douanes, au traitement tarifaire préférentiel demandé.

42.2(2) Fondements de la déclaration

(2) La déclaration prévue au paragraphe (1) énonce les faits et les éléments de droit sur lesquels elle est fondée.

[11] Mr. Le Clair, in an affidavit filed in support of the Minister's position in this proceeding, tells us, in fact, he sent the exporter two letters that day. His affidavit states the first letter informed the exporter of CCRA's intention to deny preferential treatment but did not include the specific findings of fact or law supporting that intention. He deposes "later that day when placing the correspondence on the file I realized my error and retyped the letter, adding the missing information. I marked the first version of the letter with the word "VOID" on my file then signed the second version and left it with my assistant for registration and mailing".

[12] The missing paragraph in the first letter but contained in the second one is as follows:

This decision is based on the Rules of Origin as found in Annex 401 to the NAFTA which preclude the use of dairy ingredients classified in Chapter 4 of the harmonized tariff. The whey protein concentrates used in the production of these goods has been determined to be non-territorial for the purposes of the NAFTA agreement. It is also properly classified in HS heading 0404. It thus fails to meet the rules of origin.

[13] The applicants' affiant George Hamilton states neither applicant received Mr. Le Clair's corrected letter.

[14] By letter dated August 7, 2001, Abbott forwarded completed NAFTA origin questionnaires responding to the expanded CCRA investigation, for Similac, Ensure and Nutrisure (the brand name for Ensure since the beginning of 2000).

[15] On November 9, 2001, after a review of the documents so provided, Mr. Le Clair advised the exporter of CCRA's intention to deny NAFTA preferential tariff treatment for the exporter's Ensure nutritional drinks, all flavours. Mr Le Clair said it had been determined the whey protein concentrates from its supplier Milei GMBH were classified as milk protein concentrates in HS classification 0404.90.10, consisting of natural milk constituents and Annex 401 to NAFTA excluded a tariff change from Chapter 4 for non-originating components of goods in HS 2202.90.49.

[16] On February 18, 2002, a meeting was held between Messrs. Le Clair and Chan of CCRA and representatives of the Abbott companies and further communications followed after that meeting.

[17] CCRA made re-determinations of the origin of the goods pursuant to subsection 59(1) of the Act. Commencing on June 28, 2001, Mr. Chan issued one Detailed Adjustment Statement ("DAS") to the importer which is said to be the notice and the rationale required by subsection 59(2) for imposing additional duty because of the change in the originating status of the goods. Thereafter, several DASs were issued by Ross Le Clair and Catherine Knight and one more by Gordon Chan. As noted, this judicial review is in respect to 96 such DASs.

[18] Subsection 59(2) of the Act reads:

(2) An officer who makes a determination under subsection 57.01(1) or 58(1) or a re-determination or further re-determination under subsection (1) shall without delay give notice of the determination, re-determination or further re-determination, including the rationale on which it is made, to the prescribed persons. [emphasis mine]

(2) L'agent qui procède à la décision ou à la détermination en vertu des paragraphes 57.01(1) ou 58(1) respectivement ou à la révision ou au réexamen en vertu du paragraphe (1) donne sans délai avis de ses conclusions, motifs à l'appui, aux personnes visées par règlement.

FURTHER BACKGROUND

(a) The bars to judicial review invoked by the Minister

[19] Counsel for the Minister raises two related bars to this judicial review application. He says judicial review of the DASs is precluded by section 18.5 of the Federal Court Act because the Act prescribes a comprehensive procedure for challenging the DASs culminating in an appeal to the Federal Court of Appeal on questions of law.

[20] Alternatively, counsel for the Minister submits this Court should exercise its discretion to refuse the prerogative relief sought by the applicants because they have an adequate alternative remedy in the statutory procedures prescribed by the Act which counsel says the Abbott companies are actively pursuing before the Commissioner in an appeal launched under section 60 of the Act.

(b) The statutory scheme for review

[21] The statutory scheme in the Act for a review of a section 59 Customs Act redetermination is as follows:

(1) subsection 59(6) of the Act provides a redetermination or a further redetermination made under section 59 "is not subject to be restrained, prohibited, removed, set aside, or otherwise dealt with except to the extent and in the manner provided by subsection 59(1) and sections 60 and 61" [of the Act];

(2) subsection 60(1) of the Act states a person who has received a subsection 59(2) notice may request a redetermination or further redetermination of origin, tariff classification, value for duty or marking but such request may be made only after all of the amounts owing as duties and interest in respect of the goods are paid or security satisfactory to the Minister is given;

(3) subsection 60(4) provides, on receipt of a request under section 60, "the Commissioner shall, without delay, (a) re-determine or further redetermine the origin, tariff classification or value for duty". By subsection 60(5) the Commissioner must, without delay, give notice of decision including the rationale on which the decision is based;

(4) section 62 states a re-determination or further re-determination made under sections 60 "is not subject to be restrained, prohibited, removed, set aside or otherwise dealt with except to the extent and in the manner provided by section 67" [of the Customs Act];

(5) section 67 of the Act stipulates "[A] person aggrieved by a decision of the Commissioner made under section 60 . . . may appeal from the decision to the Canadian International Trade Tribunal" ("CITT") and subsection 67(3) provides on such an appeal the CITT may make" such order, finding or declaration as the nature of the matter may require, and an order, finding or declaration made . . . is not subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with except to the extent and in the manner provided for by section 68".

(6) Section 68 states that any party to an appeal under section 67 may, within 90 days after the date of the decision, appeal to the Federal Court of Appeal on a question of law and under subsection 68(2) that Court "may dispose of an appeal by making such order or finding as the nature of the matter may require or by referring the matter back to the [CITT] for re-hearing".

[22] In their judicial review application, the applicants seek a declaration the 96 decisions are invalid and unlawful and also seek an order quashing or setting aside those DASs.

[23] The applicants advance a number of grounds. There are common grounds of attack to all DASs. First, the applicants say all decisions fail to comply with subsection 59(2) of the Act because none of them contain the rationale on which the redetermination of the origin of the goods for duty purposes was made. Second, the applicants argue the decisions were hastily issued to avoid the prescription period established by subsection 59(1) of the Act. Third, the applicants say the notices were issued without authority in that they were issued on the basis of apparent subdelegation and/or without the slightest investigation. The factual underpinning for this allegation is evidence in the record Mr. Le Clair who had conducted the section 42.2 investigation did not personally issue the DASs but asked other designated officers to do so using his computer ID on the basis of worksheets he had prepared.

[24] I now deal with other alleged defects advanced by the applicants for certain groups of decisions.

[25] In respect to 25 decisions for the product Similac issued under Mr. Le Clair's name between July 11, 2002 and July 16, 2002, the applicants say:

(a) CCRA failed to comply with section 42.2(2) of the Act because no statements of fact and law were provided on the basis the exporter did not receive Mr. Le Clair's corrected letter which contained the missing paragraph in the letter the exporter did receive; and

(b) the July 17, 2001 notice of intent to withdraw preferential treatment was issued before the exporter's questionnaire was due.

[26] In respect to 32 decisions for the product Similac infant formula issued by Catherine Knight on July 11, 2002, the applicants claim:

(a) lack of statements under section 42.2(2);

(b) the July 17, 2001 notice of intent to withdraw was premature because it was made before the exporter's questionnaire was due and received; and

(c) two of the decisions purported to redetermine the tariff classification for Similac and those decisions provided conflicting tariff classification information preventing the applicants from understanding and fully responding to whether the imports comply with the Rules of Origin requirements.

[27] In respect of five decisions for the product Ensure issued under Mr. Le Clair's name on July 11, 2002, applicants complain:

(a) of conflicting tariff information and a purported change to the tariff classification made without notice;

(b) of the mis-description of the imports as Similac when the product was Ensure; and

[28] In respect to ten decisions for the product Ensure by Catherine Knight issued on July 11, 2002, applicants contend:

(a) conflicting tariff classification information and purported change to the tariff classification; and

(b) breach of section 42.2(2) notwithstanding the November 9, 2001 notice.

[29] In respect to ten decisions for Similac issued under Mr. Le Clair's name on July 11, 2002, and on July 22, 2002, applicants complain:

(a) of conflicting tariff information and purported change to the tariff classification;

(b) the decisions mis-described the imports as Similac when the product was Isomil, a product which CCRA has now recognized as being a non intended good for which refunds have already been made;

[30] In respect to eight decisions for the product Isomil issued by Catherine Knight on July 11, 2002, I do not intend to list the grounds for review as CCRA has now acknowledged Isomil was a non intended good for which duty increases have been refunded.

[31] The same can be said of two decisions, one each by Ross Le Clair the other by Catherine Knight, in respect of the product Osmolite. This product was a non intended good and duty paid increases have already been refunded.

[32] Two decisions by Catherine Knight issued on July 11, 2002, in respect of RCF Ross Carbohydrate Free Soy are of the same nature. This product was a non intended good for which refund has been made.

[33] On June 18, 2002, Gordon Chan issued a decision in respect of Similac infant formula and Ensure food supplement. The applicants see the following additional faults with that decision:

(a) the July 17, 2001 notice of intent to withdraw preferential tariff treatment pre-empted the due date of the exporter's questionnaire;

(b) violation of section 42.2(1) of the Act as well as section 42.2.

[34] Finally, with respect to a decision issued by Catherine Knight on July 11, 2002, for Similac Lactose Free the applicants see the following errors:

(a) conflicting tariff classification information and purported change to tariff classification;

(b) lack of inclusion of this product in the list of products subject to the verification of origin audit conducted by CCRA pursuant to section 42 of the Act;

(d) the pre-emptive nature of the July 17, 2001 notice of intent to withdraw when the questionnaire was not due;

(e) violation of subsection 42.2(1) of the Act.

ANALYSIS

[35] I propose to deal with the bars to judicial review raised by the Minister, the first one being the statutory bar in section 18.5 of the Federal Court Act which reads:

18.5 Notwithstanding sections 18 and 18.1, where provision is expressly made by an Act of Parliament for an appeal as such to the Court, to the Supreme Court of Canada, to the Court Martial Appeal Court, to the Tax Court of Canada, to the Governor in Council or to the Treasury Board from a decision or order of a federal board, commission or other tribunal made by or in the course of proceedings before that board, commission or tribunal, that decision or order is not, to the extent that it may be so appealed, subject to review or to be restrained, prohibited, removed, set aside or otherwise dealt with, except in accordance with that Act. [emphasis mine]

18.5 Par dérogation aux articles 18 et 18.1, lorsqu'une loi fédérale prévoit expressément qu'il peut être interjeté appel, devant la Cour fédérale, la Cour suprême du Canada, la Cour d'appel de la cour martiale, la Cour canadienne de l'impôt, le gouverneur en conseil ou le Conseil du Trésor, d'une décision ou d'une ordonnance d'un office fédéral, rendue à tout stade des procédures, cette décision ou cette ordonnance ne peut, dans la mesure où elle est susceptible d'un tel appel, faire l'objet de contrôle, de restriction, de prohibition, d'évocation, d'annulation ni d'aucune autre intervention, sauf en conformité avec cette loi.

[36] Section 18.5 of the Federal Court Act does not have any application to the circumstances of this case. As I see it, the appeal to the Federal Court of Appeal provided for under the Customs Act is from the CITT's decision and not Ross Le Clair's decisions (the "DASs") which are the ones attacked by the applicants in this judicial review proceeding.

[37] Counsel for the Minister recognized there was no direct appeal from Ross Le Clair's decisions to the Federal Court of Appeal but he argued there is a program in place that Parliament devised and has protected by no less than three privative clauses which culminates at the Federal Court of Appeal.

[38] I share counsel for the Minister's view but not on the basis of a section 18.5 Federal Court Act bar. This case may be unique by the presence of three privative clauses in the review structure provided by sections 59 through 68 of the Act. Under those provisions, Ross Le Clair's decisions may be reviewed only through the process of further redetermination by the Commissioner. The Commissioner's redetermination is to be set aside or otherwise dealt with only by the CITT and the CITT's decision may be appealed only on a question of law to the Federal Court of Appeal.

[39] I cannot think how Parliament's intention, by enacting this structure, could have been expressed in clearer terms. Parliament wanted the administrative, quasi-judicial and judicial review system to be followed to the exclusion of any other paths of review or appeal. This structure includes bodies with recognized expertise in the subject matter with the Commissioner and the CITT. Moreover, it is the Federal Court of Appeal and not the Federal Court which supervises the CITT in judicial review matters pursuant to paragraph 28(1)(b) of the Federal Court Act.

[40] As I see it, Parliament's clear intention ousts judicial review by the Federal Court under section 18.1 of the Federal Court Act and this intention also removes the necessity for this Court to test whether the prescribed review route provides for an adequate alternative remedy.

[41] I consider this case to be one of those referred to in Brown and Evans, Review of Administrative Action at paragraph 3.6 where it is said the statutory structure may be expressed in such a way that it is exclusive and any discretion to consider the adequacy of that alternative remedy has been removed by statute. (See, [1972] S.C.R. 821">Pringle v. Fraser, [1972] S.C.R. 821. See also Chief Justice Dickson's remarks at pages 82 to 92 in Canada (Auditor General) v. Canada (Minister, Energy, Mines and Resources), [1989] 2 S.C.R. 49).

[42] Counsel for the applicants argued the section 59(6) privative clause did not apply to the circumstance of his case: there was no redetermination in accordance with this section "because no rationale was given". Parliament, according to him, wanted to avoid doing a massive broad scale review. I see no merit in this argument for reasons expressed later in these reasons and as held by Justice Beetz in Harelkin, infra: it matters not for the purposes of section 59(6) that the DASs are tainted with the errors he alleges. This argument is similar to the argument put in Harelkin, infra, that the alternative adequate remedy doctrine is excluded if a decision is null. That argument was rejected by Justice Beetz.

[43] In any event, the Minister raised a second bar and that is the alternative remedy doctrine. In my view, the Minister is entitled to succeed on that ground also.

[44] It is settled law, even where section 18.5 of the Federal Court Act does not apply, the Court possesses a discretion to refuse a judicial review application where an adequate alternative remedy exists (see, Fast v. Canada (Minister of Citizenship and Immigration), 2001 F.C.A. 368.)

[45] Two Supreme Court of Canada cases have examined the parameters of the adequate, alternative remedy doctrine: [1979] 2 S.C.R. 561">Harelkin v. University of Regina, [1979] 2 S.C.R. 561; and Canadian Pacific Limited v. Matsqui Indian Band, [1995] 1 S.C.R. 3.

[46] The [1979] 2 S.C.R. 561">Harelkin case involved a student in the School of Social Work at the University of Regina who was required by university authorities to abandon his studies.

[47] The question in that case was whether certiorari could be refused because Mr. [1979] 2 S.C.R. 561">Harelkin had not pursued his statutory right of appeal to the University Senate from a decision of a university committee who had reviewed his situation but without providing him with a fair hearing.

[48] The Court found certiorari did not lie because Mr. [1979] 2 S.C.R. 561">Harelkin "had and still has a better alternative remedy in his right of appeal to the senate committee; he ought to have exercised it" per Justice Beetz at page 567.

[49] At page 588 of the reasons, Justice Beetz outlined the factors to be taken into account in determining whether the adequate alternative remedy principle applied in a particular case. He wrote:

In order to evaluate whether appellant's right of appeal to the senate committee constituted an adequate alternative remedy and even a better remedy than a recourse to the courts by way of prerogative writs, several factors should have been taken into consideration among which the procedure on the appeal, the composition of the senate committee, its powers and the manner in which they were probably to be exercised by a body which was not a professional court of appeal and was not bound to act exactly as one nor likely to do so. Other relevant factors include the burden of a previous finding, expeditiousness and costs. [emphasis mine]

[50] Justice Beetz, applying these factors, made the following findings about the scope of Mr. [1979] 2 S.C.R. 561">Harelkin's right of appeal to the University Senate:

1. The University Senate was obliged to hold a hearing at which evidence could be presented and parties represented by counsel;

2. The Senate had the ordinary powers of appellate jurisdiction "including, if the appeal be allowed, the power to set aside the decision of the council committee and render on the merits the decision that the council committee should have rendered or send it back before the council committee for a proper hearing. There is thus no jurisdictional lacuna in the senate committee which could have prevented it from giving full justice to the appellant".

3. The word "appeal" in the university's legislation should be construed in a flexible manner capable of meaning "review", "retrial" or "new trial". Justice Beetz opined one should also expect that, in this context, an appeal is more likely to take a form resembling that of a trial de novo than that of a "pure" appeal.

4. Under this procedure, at page 591, he stated Mr. [1979] 2 S.C.R. 561">Harelkin would not have been confronted with the adverse finding of the council committee and, as a result, "appellant's position before the senate committee, unencumbered by any valid finding of the council committee, would have been similar to his initial position before the Council Committee."

5. The Senate Committee had the necessary expertise to deal with any relevant issue.

[51] Justice Beetz, at page 592, concluded the Senate provided Mr. [1979] 2 S.C.R. 561">Harelkin with an adequate alternative remedy. He added "this remedy was in my opinion a more convenient remedy for appellant as well as for the university in terms of costs and expeditiousness" (page 592). At page 593 he concluded the appeal to the Senate Committee would have been speedier, less expensive and as efficacious.

[52] In Matsqui, supra, the Matsqui Band (and other Bands) had enacted bylaws levying taxes against real property on their reserve lands which provided for the appointment of courts of revision to hear appeals from the assessments, the appointment of an assessment review committee to hear appeals from the decisions of the courts of revision and, finally, in the case of the Matsqui Bands, an appeal on a question of law to the Federal Court, Trial Division from the decisions of the assessment review committee.

[53] CP received a notice of assessment in respect of a strip of land running through the reserve over which CP had a vested right of way from the Crown and had laid railway tracks. CP (and Unitel) commenced judicial review proceedings requesting the assessment be set aside on the ground the Matsqui Band only had authority to tax land which is "in the reserve" arguing the land it held was not reserve land.

[54] Justice Joyal of this Court refused to entertain the judicial review application because, in his view, the appeal procedures established by the Bands was an adequate remedy for resolving CP's challenge.

[55] He was overruled by the Federal Court of Appeal [1994] 2 F.C. 641. That Court held the by-law enacted by the Matsqui Band for an appeal to the Federal Court was ultra vires so section 18.5 of the Federal Court Act was unavailable.

[56] That Court also found Justice Joyal had erred in not finding that the nature of the legal questions involved in CP's challenge, i.e. whether its rights of way lands were within the reserve, were not the kind of questions the appeal tribunals the Matsqui Band set up had jurisdiction to decide.

[57] The Federal Court of Appeal's decision was upheld by the Supreme Court of Canada but for different reasons.

[58] As I understand the four sets of reasons and taking into account where the majority and the minority converged or diverged on several issues, my assessment of the Supreme Court's decision for the purposes of the case before me is as follows.

[59] First, the Supreme Court of Canada found the provision for an appeal to the Federal Court to be valid with this Court's jurisdiction being authorized by section 24 of the Federal Court Act because the Indian Act authorized the making of by-laws relating to assessments.

[60] Second, the Federal Court of Appeal's view the appeal tribunals could not decide jurisdictional limiting questions was not accepted.

[61] I should add Chief Justice Lamer in reviewing [1979] 2 S.C.R. 561">Harelkin and Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), supra, on the factors which go into the equation in determining whether a particular route constitutes an adequate alternative remedy stated as follows: (page 31 of the decision in Matsqui, paragraph 37):

¶ 37 On the basis of the above, I conclude that a variety of factors should be considered by courts in determining whether they should enter into judicial review, or alternatively should require an applicant to proceed through a statutory appeal procedure. These factors include: the convenience of the alternative remedy, the nature of the error, and the nature of the appellate body (i.e., its investigatory, decision-making and remedial capacities). I do not believe that the category of factors should be closed, as it is for courts in particular circumstances to isolate and balance the factors which are relevant. [emphasis mine]

[62] Counsel for the applicants mounted a forceful argument why I should find no adequate alternative remedy in the statutory scheme set out in the Act to challenge the section 59 redeterminations in this case existed and, in particular, why the request to the Commissioner under section 60 of that Act for a further redetermination did not meet the standards set out in [1979] 2 S.C.R. 561">Harelkin and Matsqui, supra.

[63] First, he argues the applicants cannot get the same remedy before the Commissioner as it can in this Court. This Court can find the DASs null and void and, as a result, quash them. The Commissioner, under section 60, can only make a redetermination; he cannot cancel the illegally issued DASs.

[64] The alternative remedy doctrine, in my view, does not require that the remedy be the same but adequate. Counsel for the applicants conceded, as a practical matter, the Commissioner could, if he accepted the applicants' submissions, issue new DASs which would overturn the ones issued by Mr. Le Clair, Catherine Knight and Gordon Chan resulting in any duty levied being refunded with interest. He also conceded the Commissioner could find the Abbott products to be NAFTA goods. In other words, he could find Mr. Le Clair to have been wrong.

[65] Second, counsel for the applicants argued his clients were not provided with any rationale, with any explanation why CCRA found the Abbott products were not entitled to preferential treatment. He argued he does not know the case he has to meet before the Commissioner; he does not know what to plead; what he should argue.

[66] Applicants' counsel took me through a myriad of possibilities why the DASs were or might be wrong:

(1) the tariff classification for Ensure as a milk product is wrong (and therefore the Rule of Origin is not the right one) because Ensure contains no dairy ingredients;

(2) some Abbott products contain American and perhaps New Zealand whey and not only German originating whey;

(3) what CCRA identified as whey may be albumin because of its level of concentration which would affect its classification as a milk based nutritional drink;

(4) what is the proper Rule of Origin for Similac because its tariff classification changed during the relevant period but the Rule of Origin did not. Is CCRA relying on the deeming provision of section 140 and, if so, can it do so and as of what date;

(5) does CCRA believe that isolated milk proteins are equivalent to milk;

(6) CCRA knew that not all of Similac infant food contained milk because it was lactose free. Why did CCRA maintain its classification of Similac lactose-free as a nutritional milk product.

[67] Applicants' counsel argued all of these myriad possibilities were on the table but Abbott does not know which ones played out; Abbott does not know how CCRA came to its conclusion that the Abbott products were non NAFTA produced.

[68] Applicants' counsel concedes that Abbott, before the Commissioner, can put on the table any or all of these possibilities to convince the Commissioner the non NAFTA produced determinations by Mr. Le Clair and others are wrong. However, he argues he should not have to put on the table all of these possibilities. Abbott, he says, is entitled to a tailored appeal before the Commissioner based on the precise grounds for the non NAFTA produced conclusion enabling him to marshal the evidence and present a structured argument.

[69] Counsel for the Minister said all DASs state why the subject goods attract MFN status and not the NAFTA preferential rate. He states that each DAS contained more or less the following statement:

Based on a verification of origin the goods of this entry (Ensure and Similac) are properly classified as indicated above. Most favoured nation tariff applies. Inquiries to Ross Le Clair . . . or Gord Chan.

[70] From this statement, Minister's counsel argues it is apparent why the tariff rate changed from the preferential tariff (usually at 0 tariff rate) to the higher MFN rate occurred. It was because of the verification of origin which found in the Abbott products non originating NAFTA country dairy ingredients. This is clear, he argues, from the statement of fact and law sent to the exporter after the section 42 verification of origin investigations. He also argued confidentiality played a factor in just how far CCRA could go in describing product content and product ingredients in the DASs.

[71] The statement of fact and law dated July 17, 2001, for Similac has already been reproduced in these reasons. The November 9, 2001 statement for Ensure nutritional drinks, all flavours, was as follows:

It has been determined that the Whey Protein Concentrates from your supplier, Milei GMBH is classified as milk protein concentrates in HS classification 0404.90.10 consisting of natural milk constituents. Annex 401 to the NAFTA excludes a tariff change from Chapter 4 for non originating components of goods of HS 2202.90.49.

[72] I agree with counsel for the Minister the Abbott companies and its counsel know exactly why CCRA made the change from NAFTA preferred to MFN; it was because of the dairy content in the Abbott products. Whether the DAS statement is sufficient to constitute a rationale within the meaning of section 59 of the Customs Act does not detract from this fact.

[73] On this basis, I find no merit to the applicants' argument they do not know what to argue before the Commissioner. They have to show, as they had to during the investigation, the goods they exported and imported were NAFTA country of origin goods not disqualified as such because of non-originating NAFTA milk constituents, i.e. the whey protein concentrates they contain or that they contain no such milk constituents or that CCRA selected the wrong Rule of Origin or the wrong tariff classification.

[74] It is true that during the course of the investigation, Abbott's advisors raised a number of possibilities in its effort to persuade CCRA that the NAFTA preferred rate should be maintained as originally claimed by the Abbott exporter in the certificates of origin accompanying the goods when exported. It is obvious those arguments did not carry favour with Mr. Le Clair. As I see it, Abbott is not forced to put all of those arguments before the Commissioner because it does not know why CCRA decided as it did. It is Abbott advancing these arguments. It is Abbott's choice as to how many legal and factual arguments they want to advance to the Commissioner in order to convince him to make a further re-determination that the goods in question qualify for the NAFTA preferred rate.

[75] Third, applicants' counsel argued the Commissioner's re-determination is reached not by way of a de novo reconsideration because he has the onus of showing why Mr. Le Clair went wrong; he points to various CCRA memoranda and forms to show why this is so. He concludes his position is not like the position the Supreme Court of Canada determined Mr. [1979] 2 S.C.R. 561">Harelkin was in, a position "before the senate committee, unencumbered by any valid finding of the council committee, would have been similar to his initial position before the council committee".

[76] I find applicants' submission on this point not convincing. As I see it, what the Commissioner must do is to make a further redetermination. It is clear the Abbott companies are at liberty to put forward whatever evidence (new or old) and to make any arguments legal or factual (new or old), they wish to make to show what they originally claimed their exports to be - NAFTA status goods - is so, a burden which, as I have said, was theirs as a result of the section 42 verification investigation. (See on this point Justice Beetz' reasons at page 591, third paragraph, where he found Mr. [1979] 2 S.C.R. 561">Harelkin would have had the burden.)

[77] In this context, it is not correct to argue the Abbott companies are faced with Ross Le Clair's adverse finding or Ross Le Clair's conclusion.

[78] The proceeding before the Commissioner is de novo in the sense it is a proceeding as if the one which took place before Mr. Le Clair, had not taken place. The Abbott companies are in the same position before the Commissioner as they were before Mr. Le Clair. There is no overhang.

[79] Fourth, applicants' counsel says the DASs are a nullity and he is entitled to judicial review. He points to Justice Beetz' statement in [1979] 2 S.C.R. 561">Harelkin, supra, at page 584:

If there is nothing to appeal from, certiorari should then issue... .

[80] I disagree. In my view, it matters not to the alternative remedy analysis whether the DASs are nullities. It is clear from the analysis Justice Beetz conducted afterwards, concluding at page 587, even if the DASs were nullities, they were appealable to the Commissioner. I paraphrase Justice Beetz' conclusion on this point in [1979] 2 S.C.R. 561">Harelkin, supra, at page 586 into the mould of this case this is so for the simple reason that the Commissioner was given by statute the power to hear and decide upon section 59 re-determinations whether or not such re-determinations are null.

[81] Counsel for the applicants then turned to the Matsqui factors. He argued the appeal route prescribed under the Act was inconvenient to his clients because there were three levels of possible appeals and, in this case, there would be myriads of factual and legal questions necessitating perhaps expert submissions. I make two observations. First, it is Parliament that prescribed the appeal levels and second, the complexity of the procedures will largely be determined by the Abbott companies in their efforts to uphold their original claim the exported products were of NAFTA origin.

[82] The errors claimed are several: no rationale for decision, non compliance with section 42.2, tariff classification changes made without notice or opportunity to make submissions, and the issuance of DASs by improperly briefed designated officers. In my view, and assuming errors were made, such errors do not make the Commissioner's re-determination inadequate.

[83] In Matsqui, supra, the majority of the Court was not impressed with the jurisdictional or hard legal questions argument as a factor in deciding the issue of adequate alternative remedy.

[84] The nature of the de novo procedures either make those errors moot or will provide the applicants ample opportunity to deal with them and seek their reversal.

[85] In terms of remedy, I find the Commissioner can do what the applicants say justice dictates be done, that is, re-determine the exported goods are of NAFTA origin and are entitled to the NAFTA preferential rate.

[86] Applicants rely on the Ontario Court of Appeal's decision in Re Khan and University of Ottawa et al. (1997), 34 O.R. (3d) 535. In my view, Khan, supra, does not assist the applicants. In Khan, Justice Laskin was dealing with a situation where an appeal to the University Senate, unlike [1979] 2 S.C.R. 561">Harelkin, supra, and unlike here, because of statutory mandate in the Customs Act, the Senate Committee did not completely reconsider Ms. Khan's appeal or give her a hearing de novo in that she was confronted with the adverse findings of the Examinations Committee, which were before the Senate Committee. Justice Laskin found the Senate Committee simply considered how the Examinations Committee reached its decision and whether it agreed with that decision such an exercise by the Commissioner would, in my view, not conform with his duties under the Act.

[87] Finally, applicants rely on Justice Hansen's decision in Rolls Wood Group v. The Minister of National Revenue (2001), 199 F.T.R. 64.

[88] That case also does not advance the applicants' position. The challenge in front of Justice Hansen was the authority of a designated officer to issue two DASs. The challenge, in judicial review, was as to the validity of the Minister's designation of the officer who issued the DASs. Justice Hansen properly ruled judicial review lay. That is not the case before me. There is no challenge to Mr. Le Clair's authority as a designated officer. The applicants' challenge is how he or others, through him, exercised that vested authority within jurisdiction.

[89] For all of these reasons the principles of express ouster and adequate alternate remedy apply. These judicial review applications are dismissed with one set of costs.

« François Lemieux »

J U D G E

OTTAWA, ONTARIO

JANUARY 29, 2004

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET: T-1289-02 (Consolidated with T-1129-02; T-1290-02 to T-1298-02)

STYLE OF CAUSE: Abbott Laboratories Limited and others v The Minister of National Revenue

PLACE OF HEARING: Ottawa, Ontario

DATE OF HEARING: June 17, 2003

REASONS FOR : The Honourable Mr. Justice Lemieux

DATED: January 29, 2004

APPEARANCES:

Mr. Simon Potter FOR APPLICANT

Ms. Brenda Swick

Ms. Kerry Knudsen

Mr. J. Sanderson Graham FOR RESPONDENT

Ms. Cynthia Goodwin

SOLICITORS OF RECORD:

Ogilvy Renault FOR APPLICANT

Ottawa, Ontario

Mr. Morris Rosenberg FOR RESPONDENT

Deputy Attorney General of Canada

Ottawa, Ontario

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Abbott Laboratories Ltd. v. Canada (Minister of National Revenue), 2004 FC 140

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2004 FC 140