Heritage Duty Free Shop Inc. v. Canada (Minister of National Revenue), docket T-2338-00

Date: 20001222

Docket: T-2338-00

BETWEEN:

     HERITAGE DUTY FREE SHOP INC.

     Applicant

     - and -

     THE MINISTER OF NATIONAL REVENUE

     Respondent

     REASONS FOR ORDER

LEMIEUX J.:

[1]      Heritage Duty Free Shop Inc. ("Heritage") holds a licence, issued under the Duty Free Shop Regulations (the "Regulations") made pursuant to the Customs Act (the "Act"), a licence which is to expire December 31, 2000. The licence authorizes Heritage to operate a duty free shop at Douglas, British Columbia which it has done so for the past 17 years.

[2]      Heritage seeks two separate and distinct orders from this Court as interim relief pending the determination of its judicial review application dated December 15, 2000:

[1]      As noted, Heritage has operated a licensed duty free shop at Douglas since 1983. The premises from which it operated were built on federal Crown land leased to it. However, this land in 1997 reverted back to the Semiahmoo Indian Band (the "Band") as a result of rulings from this Court and the Federal Court of Appeal with a proviso the ground lease expires December 31, 2000.

[2]      Heritage has been unable to negociate a lease with the Band covering year 2001 and forward and its proposals to lease federal Crown land in the vicinity of the border have not been successful because Canada Customs and Revenue Agency (the "Agency") expressed traffic concerns, parking issues, control of goods problems and a recently announced redevelopment project of the Customs Buildings there.

[3]      Heritage's latest proposal was turned down on November 15, 2000. It consisted of leasing premises approximately three quarters of a mile from the border crossing with duty free purchases delivered to a sterile site on Crown property south of where the duty free shop was located and adjacent to the highway leading to the United States. That proposal was turned down because of the upcoming construction at the border crossing, traffic and safety concerns namely "the site is quite confined, parking is limited and the proposed entrance ... is located in an area already congested with waiting traffic."

[4]      Heritage is no longer operating its duty free shop. It ceased operations and closed to the public December 12, 2000. I was informed the building in which the store operated has been demolished or been removed from the Band's lands.

[5]      What motivates Heritage to seek the interim orders is the following paragraph of an e-mail dated June 27, 2000, sent by Raymond Bédard, the Agency's Duty Free Shop Programme Manager to one of his staff:

[6]      The previous paragraph of Mr. Bédard's e-mail stated "as you are aware ... CCRA issues one licence per site."

Analysis

[7]      The principles governing this application are set out in RJR -- MacDonald Inc. v. Canada (A.G.) [1994], 1 S.C.R. 311. Heritage must convince me of: (1) a serious issue to be tried, one that is not frivolous or vexatious; (2) it would suffer irreparable harm unless the injunction is granted, harm which is not compensable in damages and (3) where the balance of inconvenience lies.

[8]      Heritage's judicial review application attacks the November 15, 2000 decision rejecting "the Applicant's request of its duty free shop licence" including a declaration that the turning down of its crib site proposal and delivery system constitutes a rejection of the renewal application. It invokes irrelevant considerations, failure to consider relevant considerations, fettering of discretion, disregard of legitimate expectations, improper purpose and bad faith.

[9]      At this stage, I cannot say there is no serious question to be tried.

[10]      However, in my view, Heritage is not entitled to the interim issue of a duty free shop licence because it has failed to meet the irreparable harm and balance of convenience tests.

[11]      In my view, if Heritage's judicial review application succeeds, any damages which might flow from the illegal act would be compensable in damages in a quantifiable amount.

[12]      More importantly, however, the balance of inconvenience favours the Minister particularly when the public interest is taken into account. Heritage does not seek the maintenance of the status quo since the Crown's lease of the existing site expires December 31, 2000, and the land reverts back to the Band. Moreover, the existing building is gone. A Court ordered licence would sanction Heritage's operation of the off-premise shop with crib on Crown land. I am not prepared to order the issuance of the licence in the circumstances. Granting the relief sought by Heritage would require me at this stage to override the Agency's public interest concerns in terms of traffic and safety and may thwart redevelopment of the Agency's facilities on Crown land. The merits of those concerns are best left for determination on the judicial review application given the contradictory evidence before me on the point.

[13]      On the other hand, if the licence to be issued through Court order is not tied to Heritage's latest proposal i.e., is not site specific, I am satisfied such an order would compel the Minister to issue a licence contrary to the statutory scheme and Regulations. That scheme contemplates a known site. In other words, a licence is not free standing.

[14]      Counsel for Heritage argued an injunction prohibiting, pending judicial review, the Minister from issuing a duty free shop licence to a third party for the Douglas crossing was appropriate because if one was issued Heritage would never be granted one because of the Agency's one duty free shop per site policy.

[15]      I am not satisfied Heritage has met the irreparable harm test. The evidence it submitted that the Minister was about to issue a new licence to a third party is speculative. Moreover, the Minister has indicated through the affidavit of Raymond Bédard, filed in support of this application, that invitations for tenders for the operation of a duty free shop in the New Year may be issued.

[16]      Such practice, counsel for the Minister, stated would be in accord with section 2 of the Agency's Memorandum concerning duty shop licensing. In the Court's view a call for tenders would add transparency to the process. In addition, counsel for the Minister assured the Court no licence would be issued to a third party involving a proposal similar to the one made by Heritage and turned down by the Agency on November 15, 2000.

Disposition

[17]      For these reasons, the orders sought by Heritage are dismissed with costs without prejudice to Heritage reapplying to this Court.

     "François Lemieux"

     Judge

OTTAWA, Ontario

December 22, 2000