Date: 20070928
Docket: T-2174-05
Citation: 2007 FC 975
Ottawa, Ontario, the 28th day of September 2007
PRESENT:
THE HONOURABLE MADAM JUSTICE TREMBLAY-LAMER
BETWEEN:
JEAN-PIERRE
SAMSON
Plaintiff
and
THE
MINISTER OF NATIONAL REVENUE
Defendant
REASONS FOR JUDGMENT AND
JUDGMENT
[1]
The case
at bar is an appeal by trial de novo filed pursuant to section 135 of
the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.) (the Act), from a notice
of decision issued by the defendant on September 14, 2005, pursuant to section 131
of the Act.
[2]
By that
decision, the defendant found that the plaintiff had committed an offence under
the Act, on the ground that the plaintiff had failed to comply with section 7.1
of the Act in not giving a customs officer true, accurate and complete information
in response to two requests for information.
[3]
Pursuant
to the wording of section 131 of the Act, the Minister decided that the finding
of non-compliance with subsection 109.1(1) of the Act, namely, failure to
comply with section 7.1 of the Act, was validly made.
[4]
That
decision is the subject of the appeal at bar.
Facts admitted by parties
Imports by plaintiff
[5]
On July
15, 2004, a customs officer, in the course of a routine examination of goods,
intercepted a box bearing the notation “Educational Materials” in the Peace
Bridge Brokers warehouse at the Pierre Elliot Trudeau International Airport.
[6]
Examination
of the contents of the box indicated that it was not educational materials, but
rather stamps from various sources, accompanied by an invoice dated July 13,
2004, numbered 147120, in the amount of U.S. $1,265.08, that was made out by
“Kent Research Wholesale Postage Stamp” for “T.P.M. Enr.”.
[7]
Also on
July 15, the officer sent an information request (referred to administratively
as “Y50”) to the importer (the plaintiff in this case) regarding this
importation.
[8]
By means
of that request, the customs officer demanded that the plaintiff declare the
goods imported correctly (by a written declaration) and provide proof of
payment for the goods.
[9]
Through
his broker, the plaintiff then declared that the property had a value of U.S.
$340.58 and that it should be classified under tariff heading 49.0 in the List
of Tariff Provisions in the Schedule to the Customs Tariff (the Tariff),
as “printed books, brochures, leaflets and similar printed matter, whether or
not in single sheets”. The plaintiff also provided an invoice in support of his
declaration for U.S. $340.58.
[10]
Since the
customs officer concluded that the description and value declared by the importer
were not accurate, a second request for information was sent to the plaintiff’s
broker, again giving him an opportunity to correct his declaration.
[11]
At that
time, the plaintiff amended his declaration to indicate that the goods should
be classified under heading 9704 of the Tariff as “postage or revenue stamps,
stamp-postmarks, first-day covers, postal stationery (stamped paper), and the
like, used or unused, other than those of heading 49.07”, a tariff
classification for which the tariff is the same as for tariff heading 49.01,
namely, “free” in both cases.
[12]
At the
same time, the plaintiff responded to the customs officer’s request by
providing the same invoice in the amount of U.S. $340.58.
[13]
Noting
that this declaration was only partly accurate, a third request was sent to the
plaintiff, telling him that the invoice provided did not correspond to the
invoice found in the shipment and asking him to provide a true, accurate and
complete declaration for the goods imported.
[14]
The
plaintiff then made an accurate declaration of the value of the property he
wished to import and notified the customs officer that the value of the stamps
was U.S. $1,265.08, and included a new supporting invoice.
[15]
At that
point, the officer released the shipment since the plaintiff’s declaration was
accurate.
Notice of assessment of penalty against
plaintiff
[16]
The
customs officer ruled that by not making a true, accurate and complete
declaration in response to two requests for information, the plaintiff failed
to comply with section 7.1 of the Act and so committed an offence under the
Act.
[17]
On
September 5, 2004, the officer accordingly issued a notice of assessment of
penalty (in accordance with administrative offence C-348) in the amount of
$2,000 against the plaintiff pursuant to section 109.1 of the Act.
[18]
On
September 15, 2004, the plaintiff sent the defendant a letter in which he asked
that this decision be reviewed.
[19]
On
November 2, 2004, the defendant served on the plaintiff a notice of the reasons
for action pursuant to the provisions of section 130 of the Act.
[20]
On
September 14, 2005, a decision was made pursuant to section 131 of the Act,
finding that the plaintiff had committed an offence under the Act on the ground
that he failed to comply with section 7.1 of the Act in not giving a customs
officer true, accurate and complete information in response to two requests for
information.
[21]
The
relevant provisions are set out in an appendix to these reasons.
Analysis
Did the plaintiff fail to comply with section 7.1 of the Act
in giving a customs officer information that was not true and accurate?
[22]
The
plaintiff argues that he always acted in good faith and never intended to make
a false declaration. In short, it was simply a misunderstanding due to the fact
that a second package had been sent by the U.S. exporter at the same time.
[23]
The
plaintiff claims that he acted with diligence in the matter since he thought he
had provided true and complete information on the package and had absolutely no
intention of acting in any other way.
[24]
The
defendant argues that the defence of due diligence does not apply. In the
defendant’s opinion, the alleged offence is an absolute liability offence. What
is more, even if it were a strict liability offence, which may give rise to a
defence of due diligence, Mr. Samson did not meet his burden of proving due
diligence.
[25]
The appeal
of the Minister’s decision was heard by way of an ordinary action, as provided
for in section 135 of the Act.
[26]
Mr. Samson
was the sole witness for the plaintiff. For his part, the defendant called the
trainee customs officer who intercepted the package. The facts related by her
were for the most part admitted by the parties, so there is no need for the
Court to discuss her testimony further in disposing of the case at bar.
[27]
However,
Mr. Samson’s testimony casts a different light on some of the facts admitted.
It appeared from his testimony, which I found credible, that he acted in good
faith and the Court accepts that he had no intention of making a false
declaration.
[28]
The
plaintiff testified that there were two packages in transit between the
exporter and importer, so that when he asked the exporter to fax him a copy of
the invoice the exporter sent the invoice corresponding to another package,
which was also in the hands of the postal services.
[29]
Regarding
the contents of the package, the plaintiff explained that the information he
had provided was accurate but imprecise as to the nature of the package, which
did not matter since stamps, like educational materials, were not subject to
any particular customs tariff. Moreover, he acted promptly to provide a more
accurate description following the second request for information (a fact
admitted by the defendant).
[30]
As to the
exact value of the goods, it was not until July 29, when he received the second
package from the U.S. importer, that he found that the invoice in it was the
same as the one he had faxed to the customs officer. That same day he asked the
exporter for an explanation. The
latter sent him a second invoice on August 2. Mr. Samson then tried to contact his
broker by telephone, without success. However, he admitted in cross-examination
that he did not leave any telephone message or send any e-mail or fax on that
day. It was not until August 5 that the fax was sent, after the broker had
filed a declaration on August 3, 2004, indicating a value of $430.00 for the
package in question.
[31]
By the
parties’ admission, there is no doubt that the amount declared was not
accurate. On the one hand, the plaintiff argues that he can plead due diligence;
on the other, the defendant submits that this is an absolute liability offence
which does not allow of such a defence.
[32]
In my
opinion, the question of whether the plaintiff can or cannot plead due
diligence does not have to be decided in the case at bar, since even if it can
be pleaded, the plaintiff would have to establish that he took all reasonable
steps to ensure that the information provided was accurate.
[33]
Mr. Samson
knew from July 29, 2004, that he had submitted inaccurate information, since
the invoice in the second package was the same as that which he had sent for
the first package.
[34]
On August
2, after receiving the right invoice, and not succeeding in contacting the
broker, he failed to send him an urgent message or to send an e-mail or fax to
correct the confusion, which a diligent person would have done in the same
situation. Mr. Samson preferred to take his day of leave and wait until August
5 to forward the information, unfortunately after the broker had already sent
the inaccurate information.
[35]
The
burden of due diligence is a heavy one. It is not sufficient to plead
forgetfulness or an error made in good faith. As my colleague Madam Justice
Johanne Gauthier pointed out in Cata International Inc. v. Canada (Minister of National Revenue,
Customs, Excise and Taxation - M.N.R.), 2004 FC 663, at para. 22:
To begin with, it appears that the
defendant misunderstands the nature of the due diligence defence. It will not
suffice to plead forgetfulness or an error made in good faith. A party wishing
to rely on the defence must establish that he or she has taken all reasonable
steps to ensure that the declarations are accurate. This is a difficult burden
to discharge, and so far every time such a defence has been used it has been
unnecessary for the Court to determine whether it applies, because the party
using it was unable to establish due diligence.
[36]
Mr. Samson
was unable to meet the heavy burden imposed on him in putting forward such a
defence, so it is not necessary for this Court to determine whether it applies.
[37]
For these
reasons, the appeal at bar is dismissed without costs.
ORDER
[38]
THE
COURT ORDERS that
the appeal at bar be dismissed without costs.
“Danièle
Tremblay-Lamer”
Certified
true translation
Susan Deichert,
Reviser
Email this Content