Date:
20130530
Docket:
T-883-08
Citation:
2013 FC 581
Toronto, Ontario,
May 30, 2013
PRESENT: Kevin
R. Aalto, Esquire, Prothonotary
BETWEEN:
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ELBERT ABDELSEED
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Plaintiff
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and
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CANADA BORDER
SERVICES AGENCY
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Defendant
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REASONS FOR
JUDGMENT AND JUDGMENT
Introduction
[1]
Late
one night, the Plaintiff, Mr. Abdelseed, arrived in Canada by bus. He was one
of two passengers on the bus. The bus belonged to United Bus Lines (United),
which had a business located in New Jersey. The bus was driven to Canada by a bus driver employed by United.
[2]
Mr.
Abdelseed owns a transportation and limousine service, Park Lane Limousine
Services Inc. (Park Lane) in the Greater Toronto Area. Upon arriving at the
Canadian border, he told the CBSA Officer that he was not bringing anything
into Canada. The driver did not declare any goods either.
[3]
Upon
further investigation, the Customs Officers involved determined after speaking
with the driver that the bus would remain in Canada until the final completion
of a sale of the bus to Park Lane.
[4]
The
Customs Officers then impounded the bus. Mr. Abdelseed was charged a penalty
of $19,425.00 for failing to declare that he was bringing the bus into Canada. However, Mr. Abdelseed did not own the bus, could not insure the bus, could not
drive the bus and could not use the bus.
[5]
Upon
subsequent payment the bus was released. When the transaction for the bus was
finally completed after all paperwork was exchanged and liens removed, the bus
was driven back to the United States by United and then brought into Canada by Park Lane at which time appropriate duties were paid.
[6]
Against
this brief background, the question is whether Mr. Abdelseed was required to
declare the bus upon his arrival at the Canadian border.
Evidence
[7]
As
this was a simplified trial, Mr. Abdelseed’s evidence was given by affidavit.
The Defendant, Canada Border Services Agency (CBSA), brought a motion at the
opening of trial to strike various paragraphs of Mr. Abdelseed’s affidavit on
the ground that they were “opinions, tendentious arguments and legal
conclusions” and that an Exhibit, being a decision of the Ontario Court of
Justice acquitting Mr. Abdelseed of all charges, was inadmissible and
irrelevant. The matters in the motion were left to be dealt with during the
course of evidence and in argument at the conclusion of the case.
[8]
Mr.
Abdelseed was subjected to a vigorous cross-examination by counsel for CBSA.
Having observed Mr. Abdelseed closely during the cross-examination, I found him
to be a frank and straightforward witness who did not vary in his evidence
during the cross-examination. English is not his first language but
nonetheless he was articulate and forthright. I accept Mr. Abdelseed’s
evidence. The following summary of the evidence is taken from both his
affidavit and the cross-examination. Much of the evidence was
non-controversial and where there was controversy with other witnesses I prefer
the evidence of Mr. Abdelseed.
[9]
Mr.
Abdelseed is the principal shareholder of Park Lane. On three prior occasions
he had purchased limousines on behalf of Park Lane in the United States and brought them into Canada. He said that he was familiar with the process involving
the importation of vehicles into Canada and that he had followed all of the
procedures required by the Customs Act, R.S.C. 1985, c.1 (2nd Supp.) and
the CBSA.
[10]
Mr.
Abdelseed was aware from an advertisement that a 2002 Freightliner Limousine
Bus (the Bus) was for sale in Newark, New Jersey. Mr. Abdelseed travelled to Newark on August 29, 2006 to meet with the owners of United who had advertised the sale of
the Bus. Mr. Andrea Scalzo, a mechanic and licensed bus driver in the employ
of Park Lane accompanied Mr. Abdelseed. Prior to travelling to Newark, Mr. Abdelseed had obtained information about the Bus and was hopeful of being able
to purchase it for Park Lane.
[11]
Mr.
Scalzo accompanied Mr. Abdelseed so that he could inspect the Bus and if it was
purchased Mr. Scalzo could drive it back to Canada. Mr. Scalzo conducted a
thorough inspection of the Bus and was satisfied with its condition.
[12]
Mr.
Abdelseed proceeded to make arrangements with United to purchase the Bus on
behalf of Park Lane.
[13]
In
anticipation that the Bus would pass the inspection, Mr. Abdelseed had arranged
to bring with him a bank draft in the amount of $70,000.00 payable to United.
[14]
Unfortunately,
United could not complete a sale of the Bus and transfer the ownership of the
Bus to Park Lane because there was an outstanding lien registered against the
Bus by Daimler Chrysler Financial Services (Daimler Financial) which secured a
loan from Daimler Financial to United. Daimler Financial also had possession
of the actual title documents to the Bus.
[15]
Mr.
Abdelseed was satisfied with the purchase price for the Bus and its condition.
As he could not get the Bus transferred to Park Lane he decided that he would
enter into an escrow arrangement with United pending removal of the lien on the
Bus. The $70,000.00 was to be held in escrow until the transfer of the
ownership of the Bus to Park Lane was complete.
[16]
The
bank draft was provided to Wachovia Bank to be held by them in escrow until
they were notified that Daimler Financial had discharged its lien and the sale was
completed. As part of the transaction Wachovia Bank was instructed to transfer
$41,010.42 to Daimler Financial. Presumably, the transfer would be made only
after confirmation that Daimler Financial would in fact release the Bus. In
turn, United executed an agreement in which it authorized Daimler Financial to
release title to the Bus to Park Lane once Daimler Financial received its
payment. The various documents relating to the Bus transaction were filed as
exhibits.
[17]
The
final piece of the puzzle that needed to be put in place as Mr. Abdelseed
testified was ensuring the Bus would in fact be available to Park Lane once
Daimler Financial removed its lien and the purchase funds were paid. This
concern was solved apparently by an arrangement whereby United agreed to
deliver the Bus to Canada where it would remain until title was transferred.
Once title was transferred to Park Lane it would be returned to the United States and then imported by Park Lane for use.
[18]
Mr.
Abdelseed gave evidence that as Park Lane did not own or have title to the Bus
his driver, Mr. Scalzo could not drive the Bus to Canada nor would it be
covered by Park Lane’s insurance. The Bus continued to belong to United and
they had the responsibility of driving it to Canada and doing so under the
United insurance policy.
[19]
Thus,
United’s driver, Mr. Edward Kelley, drove the Bus to Canada. Mr. Abdelseed and
Mr. Scalzo were the passengers.
[20]
When
the Bus arrived at the Canadian border, Mr. Abdelseed was asked by a CBSA
Officer the purpose of his visit and responded that he had gone to purchase a
motor vehicle. His evidence was that he was not asked any further questions
about the nature of the motor vehicle.
[21]
Mr.
Abdelseed gave evidence that the CBSA Officer located the documents pertaining
to the Bus. He explained to a CBSA Officer that he was not importing the Bus
and that he was not the owner. He gave evidence that he intended to properly
import the Bus if Park Lane was able to complete the sale and thereby obtain
title to the Bus.
[22]
After
the various CBSA Officers interviewed Mr. Abdelseed, the Bus was seized and Mr.
Abdelseed was required to make a payment of $19,425.00 for its release. In
addition, Mr. Abdelseed was charged with various offences under sections 153(a)
and (c) and 159 of the Customs Act. Mr. Abdelseed was acquitted of all
charges in the Ontario Court of Justice. With respect to the penalty, Mr.
Abdelseed appealed, but the penalty was upheld.
[23]
Subsequently,
on September 5, 2006, Daimler Financial released its lien and the title of the
Bus was transferred to Park Lane. Notably, it was only on September 14, 2006
after confirmation of the transfer of title of the Bus to Park Lane that
payment of the seizure amount of $19,425.00 was made.
[24]
Thereafter,
Mr. Abdelseed arranged for the Bus to be imported to Canada with all
appropriate forms.
[25]
Mr.
Abdelseed was emphatic and did not waiver in cross-examination that he in no
way was making any false statements to any CBSA Officer or in any way tried to
deceive any CBSA Officer. I accept his evidence.
Evidence of CBSA
[26]
The
evidence of the CBSA was put in through Samantha Collee, an Officer with CBSA
and Customs Inspector at Queenston Bridge; Scott Turner, at the time a CBSA Officer
at Queenston Bridge; Tracy Gould, a CBSA Officer at Queenston Bridge; and, Nadine
Robinson, a Lawyer assisting counsel for CBSA.
[27]
Much
controversy arose over the evidence offered by CBSA especially as it related to
hearsay which will be addressed further below.
Evidence of
Samantha Collee
[28]
Ms.
Collee’s evidence was to the effect that she was on duty as a CBSA Officer at
the time the Bus entered Canada. She said she interviewed the three occupants
of the Bus and conducted a vehicle search to “confirm compliance with import
obligations”. She said that no one reported the Bus as an “imported good”.
She described the driver, Mr. Kelley as “sweating and nervous”.
[29]
Ms.
Collee then made statements regarding what Mr. Kelley said and things he is
alleged to have said which were told to her by another CBSA Officer. These
statements were objected to as clearly hearsay. CBSA did not call Mr. Kelley
as a witness and indeed filed evidence that he could not be located. There was
a suggestion in the evidence that he might be in jail. However, that also was
hearsay. In any event, this evidence is of no moment.
[30]
During
the trial the Court ruled that evidence of what Mr. Kelley said to Ms. Collee
or any other CBSA Officer was hearsay and could not be saved by the exceptions
to hearsay based on its unreliability [see R. v. Khan [1990] 2 S.C.R. 531].
Those oral reasons for refusing the evidence based on hearsay are hereby
adopted into these reasons for decision. The reasons relating to the
admissibility of this evidence and other evidence was in response to motions by
both parties to strike evidence of the other party.
[31]
The
evidence of Ms. Collee also strayed down the path of conclusions and surmise,
particularly as it related to whether or not the Bus was being imported and the
requirement to pay duties. Again, that evidence was determined to be
inadmissible.
[32]
Ms.
Collee also stated that she located documents in the Bus indicating that Mr.
Abdelseed had purchased the Bus. However, that was a conclusion of law. The
evidence of Mr. Abdelseed was not that he wanted to purchase the Bus but Park Lane. The documents relating to the anticipated purchase were located on the Bus and
described by Ms. Collee. There is no dispute about the documents. The only
dispute is whether Mr. Abdelseed imported the Bus and whether there was an
obligation by Mr. Abdelseed to declare the Bus when he entered Canada.
Evidence of
Scott Turner
[33]
Scott
Turner, now Chief of Operations at Hamilton International Airport, was on duty
as a CBSA Officer when the Bus entered Canada.
[34]
He
gave evidence of his discussions with both Mr. Scalzo and Mr. Abdelseed. As
noted, the Court disallowed as inadmissible the hearsay statements of Mr.
Kelley. Mr. Turner’s evidence also covered an appeal made by Mr. Abdelseed to
the Minister of Public Safety and Emergency Preparedness and included Mr.
Turner’s conclusions of law. Much of this evidence was also held to be
inadmissible. However, the result of the appeal was referred to and the
decision was entered as an exhibit. The Crown conceded the decision was not
binding on the Court as this trial is a hearing de novo.
Evidence of
Tracy Gould
[35]
Tracy
Gould, another CBSA Officer, also gave evidence as she was on duty the night of
August 30, 2006 and described the enforcement operations relating to the
seizure of the Bus. Again, there was much of Ms. Gould’s evidence which was
hearsay as it related to what she understood or was told by Mr. Kelley whether
directly or by colleagues. None of this evidence was admissible for the same
reasons as noted above.
[36]
The
Bus was seized at a Level One which was described in the evidence as the most
lenient and would result in the lowest possible penalty. Although the ultimate
intended use of the Bus was commercial, if the transaction concluded, the
penalty was assessed based on the personal seizure penalty regime at a rate of
25% of the value which resulted in the payment required of $19,425.00 which
includes both penalty and taxes and duties.
Issues
[37]
The
primary issue for determination is whether Mr. Abdelseed was required, pursuant
to the Customs Act, to declare the Bus when he arrived at the Canadian
border. The answer to this issue requires a consideration of section 12 of the
Customs Act; the nature of the transaction engaged in by Mr. Abdelseed
respecting the Bus; the relative rights to the Bus; and, the legal implications
that flow from these considerations.
Discussion
[38]
To
provide the necessary context a review of several sections of the Customs
Act is necessary. Those sections include the following:
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PART II
IMPORTATION
PERSONS
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PARTIE II
IMPORTATION
PRÉSENTATION AU BUREAU
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Presentation of
persons on
arrival in
Canada
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11. (1) Subject to this section,
every person arriving in Canada shall, except in such circumstances and
subject to such conditions as may be prescribed, enter Canada only at a
customs office designated for that purpose that is open for business and
without delay present himself or herself to an officer and answer truthfully
any questions asked by the officer in the performance of his or her duties
under this or any other Act of Parliament.
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11. (1) Sous réserve des autres dispositions du présent article,
ainsi que des circonstances et des conditions prévues par règlement, toute
personne arrivant au Canada ne peut y entrer qu’à un bureau de douane, doté
des attributions prévues à cet effet, qui est ouvert, et doit se présenter
sans délai devant un agent. Elle est tenue de répondre véridiquement aux
questions que lui pose l’agent dans l’exercice des fonctions que lui confère
la présente loi ou une autre loi fédérale.
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Arrivée au
Canada
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REPORT OF GOODS
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DÉCLARATION
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Report
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12. (1) Subject to this section,
all goods that are imported shall, except in such circumstances and subject
to such conditions as may be prescribed, be reported at the nearest customs
office designated for that purpose that is open for business.
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12. (1) Sous réserve des autres dispositions du présent article,
ainsi que des circonstances et des conditions prévues par règlement, toutes
les marchandises importées doivent être déclarées au bureau de douane le plus
proche, doté des attributions prévues à cet effet, qui soit ouvert.
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Déclaration
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Time and manner of report
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(2) Goods shall be reported under subsection (1) at such time and in
such manner as the Governor in Council may prescribe.
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(2) La déclaration visée au paragraphe (1) est à faire selon les
modalités de temps et de forme fixées par le gouverneur en conseil.
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Modalités
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Who reports
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(3) Goods shall be reported under subsection (1)
(a) in the case of goods in the actual possession of a person
arriving in Canada, or that form part of the person’s baggage where the
person and the person’s baggage are being carried on board the same
conveyance, by that person or, in prescribed circumstances, by the person in
charge of the conveyance; (a.1) in the case of goods imported by
courier or as mail, by the person who exported the goods to Canada;
(b) in the case of goods, other than goods referred to in
paragraph (a) or goods imported as mail, on board a conveyance
arriving in Canada, by the person in charge of the conveyance; and
(c) in any other case, by the person on behalf of whom the goods
are imported.
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(3) Le déclarant visé au
paragraphe (1) est, selon le cas :
a) la personne ayant en sa possession effective ou parmi
ses bagages des marchandises se trouvant à bord du moyen de transport par
lequel elle est arrivée au Canada ou, dans les circonstances réglementaires,
le responsable du moyen de transport; a.1) l’exportateur de
marchandises importées au Canada par messager ou comme courrier;
b) le responsable du moyen de transport arrivé au Canada à
bord duquel se trouvent d’autres marchandises que celles visées à l’alinéa a)
ou importées comme courrier;
c) la personne pour le compte de laquelle les marchandises
sont importées.
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Déclarant
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Goods returned to Canada
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(3.1) For greater certainty, for the purposes of the reporting of goods
under subsection (1), the return of goods to Canada after they are taken out
of Canada is an importation of those goods.
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(3.1) Il est entendu que le fait de faire entrer des marchandises au
Canada après leur sortie du Canada est une importation aux fins de la
déclaration de ces marchandises prévue au paragraphe (1).
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Marchandises qui reviennent au Canada
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[39]
The
definition of “import” in section 2 is not very helpful – import means import
into Canada. The Shorter Oxford English Dictionary defines “import” as “that
which is imported or brought in from abroad”. Thus, to import is to bring
something in from abroad - the Bus, for example. Importing is the act of
bringing something into Canada. It is therefore clear that the Bus was
“imported” into Canada.
[40]
Section
12 of the Customs Act requires that “all goods that are imported shall .
. . be reported at the nearest customs office designated for that purpose that
is open for business”. Subsection 3 describes the circumstances under which
the goods shall be reported. Where goods are in the actual possession of a
person “by that person” or “by the person in charge of the conveyance”.
[41]
Where
the goods are imported “in any other case, by the person on behalf of whom the
goods are imported” [subsection 12(3)(c)].
[42]
In
the unique circumstances of this case, the question becomes by whom was the Bus
imported into Canada. This question engages principles of sale of goods and
title and possession of the goods.
[43]
Mr.
Abdelseed argues that he could not import the Bus as he was neither the owner,
the driver, nor was he in charge of the Bus as a conveyance. The Bus was
entirely useless to him and to Park Lane until title was legally transferred to
Park Lane and the Bus properly imported into Canada.
[44]
Mr.
Abdelseed was not forthcoming with the full story surrounding the Bus when he
arrived in Canada. However, there was no evidence that he was deliberately concealing
the documents. They were in relatively plain view in the Bus and were easily
located by the CBSA Officers.
[45]
Mr.
Abdelseed’s case revolves around whether he had ownership of the Bus and
whether it was within his control. On the basis of the evidence I find that
there was no completed transaction for the sale of the Bus to Park Lane as of the
time of its arrival in Canada on August 30, 2006 and that the Bus was in the possession
of and control of United thorough United’s driver, Mr. Kelley.
[46]
Mr.
Abdelseed was never the intended purchaser. It was always to be purchased by Park Lane. All of the documents refer to Park Lane as the ultimate purchaser and the entity
to which title would pass provided the condition of clear title was met.
Ownership of the Bus was contingent upon a future event: viz. release of
the lien by Daimler Financial. It was argued that this was a true condition
precedent and therefore there was no enforceable contract and therefore Mr.
Abdelseed had no responsibility to report the Bus as being imported. Mr.
Abdelseed’s subjective belief was that he did not own the Bus and therefore it
was not his responsibility to report anything about the Bus.
[47]
In
Zhilka v. Turney, [1959] S.C.R. 578, the Supreme Court of Canada held
that a true condition precedent to a contract does not allow either side to
enforce performance. Such obligations which are future, uncertain, and rely
upon the will of a third party prevent a party from suing for its enforcement.
By analogy, Mr. Abdelseed argues that the release of the lien was entirely in
the hands of Daimler Financial and was a future uncertain event. There was
therefore no basis upon which the contract could be performed. Thus, it was a
true condition precedent and neither Mr. Abdelseed nor Park Lane had ownership
of the Bus [see also Dilip Shah v. Jai Kumar Ahuja, 2012 ONSC 1479, at
paras. 33 – 35].
[48]
At
all material times, the Bus belonged to United. It was their driver who drove
it into Canada. It was United’s insurance under which the Bus was covered. It
was United’s driver who was in the care and control of the Bus. It was being
brought to Canada by United for the purpose of giving Mr. Abdelseed comfort
regarding completion of the sale to Park Lane if the lien was released. Thus,
insofar as section 11 of the Customs Act is concerned Mr.
Abdelseed answered truthfully although somewhat artfully that the Bus was not
his and he was not bringing it in. While pushing the limits of the Customs
Act, I am nonetheless satisfied that he was answering within the limits
of the law. He had no intention to deny payment of the appropriate duty that
should be paid if the Bus was properly imported when it would be owned by Park Lane.
[49]
The
issue of whether Mr. Abdelseed had possession of the Bus was argued at length.
Reliance was placed upon Ready John Inc. v. Canada (Department of Public
Works & Government Services), 2004 FCA 222, in which the Federal Court
of Appeal had to determine the question of possession of a certain number of
chemical toilets as part of a procurement contract. On judicial review the
requirement of “possession” of the toilets was an issue. The case revolved
around a judicial review of a decision of a tribunal to award a procurement
contract to a competitor of the applicant.
[50]
The
Court considered both dictionary meanings and legal meanings of possession.
The Court observed:
[42] The Tribunal was on firm ground when
it concluded that a person may be in possession of something, even though they
do not own it. The most pertinent definitions of possession in the New
Shorter Oxford English Dictionary are: "the action or fact of holding
or having something ... in one's control; actual holding ..." and, in law,
"visible power or control over a thing".
[43] The French text of the Specification
was not before the Court. However, a letter on PWGSC letterhead attached to the
notice of proposed procurement which included the Specification, stated: "le
fournisseur retenu droit posséder au minimum 250 toilettes chimiques. . .
" "Posséder" has very similar meanings to "possess".
The English text of the letter, however, differed from paragraph 14.1.1 itself,
in that it used the word, "available", not "possess".
[44] When used in legal contexts in
connection with chattels, the core meaning of possession is the physical control
of a thing and often, but not necessarily, exclusive control. Thus, Black's
Law Dictionary, 7th ed. (St. Paul: West Group, 1999) defines
"possession" as: "The fact of having property in one's
power"; ... "The right under which one may exercise control over
something to the exclusion of all others; the continuing exercise of a claim to
the exclusive use of a material object."
[45] Whether a person is in possession of
property may depend upon the kind of property over which possession is claimed
and on the particular legal context in which the determination must be made.
Thus, while physical control lies at the core of the meaning of possession, a
person who has the practical means of controlling something and preventing
others from interfering with it may have possession of it: see, for example, Morrison
(Committee of) v. Cormier Vegetation Control Ltd. (1996), 32 C.I.T.T. 209
(B.C. C.A.) at 215 (delivery of keys to a car in a parking lot). In some
contexts, a legal right to assume immediate control of something may also be
sufficient for a person to be in possession of it: United States of America
and Republic of France v. Dollfus Meig et Cie. S.A. and Bank of England,
[1952] A.C. 582 at 605; Halsbury's Laws of England, 4th ed., vol. 35
(London: Butterworths, 1980) at para. 1211.
[46] Possession expresses a relationship
between an individual and a particular piece of property, not generic goods of
a given description. Thus, as applied to tangible personal property, it
connotes control, often exclusive of others, or the legal right to assume
control. Whether a person has sufficient control over a particular chattel to
have it "in their possession" for the purpose of a legal rule is a
question of mixed fact and law.
[51]
As
noted, physical control of the goods is a key component of possession. In this
case, while Mr. Abdelseed was an occupant of the Bus he did not have all of the
indicia of possession. He could not use the Bus in any way and United was
free, as owner of the Bus, to move it wherever it wanted. He did not have
physical control of the Bus. Physical control was in the hands of United’s
employee, Mr. Kelley, the driver. Thus, there was no onus or requirement on
Mr. Abdelseed to report the Bus as being imported.
[52]
The
Crown argues that the condition precedent analysis in Zhilka is not
analogous in this case as Mr. Abdelseed had possession of the Bus. However,
his possession was not absolute as it was not him looking to buy the Bus and
the completion of the sale to Park Lane was contingent upon a future uncertain
event entirely in the hands of a third party. While everyone may have believed
that the future event was certain to occur it had not as of the date the Bus
came into Canada.
[53]
As
further support for this approach, it has been held that goods brought to Canada in Ontario are governed by the Sale of Goods Act, R.S.O. 1990, C. s.1, and more
particularly section 18 thereof. That section provides in essence that the
parties’ intention regarding the transfer of property is derived from a consideration
of the terms of the contract [see Therm-O-Comfort Co. v. Minister of
National Revenue, 153 F.T.R. 32, per Tremblay-Lamer, J. at para. 36]. The
intention as gleaned from the contract was that the transfer of the Bus would
not occur until a future date when the lien was fully released and title vested
in Park Lane. This is consistent with principles in section 18 of the Sale of Goods Act.
[54]
The
Crown vociferously argues that Mr. Abdelseed was in breach of ss. 12 (1) and
(3) of the Customs Act and the duty to report imported goods. However,
as I have found that Mr. Abdelseed was neither the owner nor legally in
possession, the duty to report was on the owner of the Bus, United and its
driver Mr. Kelley. Rather than engage in the subterfuge of who owned the Bus,
the simple approach would have been for United through its driver to declare
the Bus and explain why it was being parked in Canada until the transaction was
completed.
[55]
Notably,
all duties relating to the Bus were not only intended to be paid by Mr.
Abdelseed but were in fact paid.
[56]
The
Crown argues that Mr. Abdelseed “lied” to the CBSA Officers. That is not the
case. He responded with a technically legal position that he did not own the
Bus and had no duty to report. The argument that Mr. Abdelseed had “joint”
possession of the Bus also does not pass legal muster. Legally the Bus could
not be driven, insured or otherwise used by Park Lane or Mr. Abdelseed until
title actually passed to Park Lane. Mr. Abdelseed firmly believed that he did
not own the Bus and could not until the lien was released. Thus, United and
its driver should have been the subject of any action by the CBSA Officers.
[57]
Counsel
for CBSA also colourfully argues that to absolve Mr. Abdelseed of any
requirement to report the Bus is to make “cheesecloth” of the legislation.
This is not the case. These facts are unique and the outcome of this case
depends entirely on the facts. The Bus was properly imported when the title
transfer was complete. The legislation required United to declare the Bus not
Mr. Abdelseed. The legislation works as it should.
[58]
Counsel
for CBSA also argued that He v. Canada, [2000] F.C.J. No. 93 supports
CBSA’s position. It is cited for the proposition that whether or not Mr.
Abdelseed thought he was acting in good faith was an irrelevant consideration
and Mr. Abdelseed’s belief that he did not have to report the Bus does not
matter. However, the facts in He are very different from here. In that
case there were invoices for goods imported into Canada which were in error as
invoices were found with higher values. The shipment of goods was seized. The
alleged “innocent mistakes” regarding the values on the invoices were found to
be irrelevant and both the owner of the goods and the importer were to be found
jointly liable. The lack of intention of the importer and owner to avoid taxes
was also found to be irrelevant [see para. 8]. That is a different
circumstance than is the case as Mr. Abdelseed was neither the importer nor the
owner.
[59]
Counsel
for CBSA also relies upon Sarji v. Canada (Minister of National Revenue,
Customs and Excise – M.N.R.) [1999] F.C.J. No. 401. This was an appeal
from a seizure of jewellery. Apparently, the jewellery had been taken on a
trip to the United States but the Sarji’s did not bring it back with them but
Mrs. Sarji had declared it. Mr. Sarji obtained possession of the jewellery when
he was next in the United States and brought it back but he did not declare
it. The jewellery was seized. It was found that the seizure was correct as Mr.
Sarji had an obligation to report the jewellery because it was in his
possession notwithstanding that it had previously been reported. Again, the
facts are entirely different from those in issue in this case. The fact that
Mr. Abdelseed believed he had no requirement to report the Bus is irrelevant.
What is relevant is that on the facts of the case he was not the person in
possession who was bringing the Bus into Canada. It was not his Bus but the
Bus of United, which had the obligation to report it under the Customs Act.
[60]
The
decision of the Federal Court of Appeal in Time Data Recorder International
Ltd. v. Canada (Minister of National Revenue – M.N.R.) is instructive. In
that case the driver of a truck who was importing goods into Canada failed to bring the shipping documents with him. There were discrepancies between
what the driver reported to CBSA Officers and the actual contents of the
truck. A seizure of the goods resulted and criminal charges were laid against
the driver. Based on the acquittal, the driver argued res judicata with
respect to the seizure. The Federal Court of Appeal held that the acquittal
was a criminal offence and the seizure was a civil proceeding and so the
acquittal did not constitute res judicata. There was no due diligence
defence to the seizure. However, the Federal Court of Appeal made the
following observation in relation to section 12 of the Customs Act:
The goods here in question were clearly “on board a
conveyance arriving in Canada.” It was, therefore, the person in charge of
the conveyance, in this instance the truck driver, who, alone, had the duty to
report them. His failure to comply with section 12 was sufficient to
support the Minister’s finding. The decision of the criminal court acquitting
the appellant, whatever be its authority, could not affect that conclusion.
[para. 15 – emphasis added]
[61]
Thus,
the driver of the Bus had an onus to report bringing the Bus into Canada because it was for the benefit of United to complete the transaction if the lien was
released. There is no doubt Mr. Abdelseed had an interest in seeing the
transaction completed and his company may have benefited, but the onus was on
the driver to report.
[62]
In
summary, the question of whether Mr. Abdelseed was required to declare the Bus
must be based on the facts. Merely being a passenger in a bus is
insufficient. The Bus was being brought to Canada by United to provide comfort
to Mr. Abdelseed that in the event all of the documentation necessary to
complete the transaction was available, Park Lane would obtain title. The He
case is a useful statement of the onus in cases such as this. The Honourable
Mr. Justice Yvon Pinard sets out the onus as follows: “In seizure proceedings
such as those at bar, the onus is on the plaintiffs to establish, on a balance
of probabilities, the seizures were unlawful”. On a balance of probabilities,
based on all of the evidence, as against Mr. Abdelseed the seizure was
unlawful.
[63]
Mr.
Abdelseed is therefore entitled to recover the penalties paid plus accrued
interest at the rate referred to in the Federal Courts Rules plus costs
to be assessed at Column III of Tariff B. It is unclear from the evidence if
the amount of $19,425.00 paid by Mr. Abdelseed includes amounts which would
otherwise be properly payable upon the importation of the Bus. The parties shall
calculate the correct amount owing to Mr. Abdelseed.
JUDGMENT
THIS
COURT’S JUDGMENT is that:
1.
The
Plaintiff shall recover the penalties paid resulting from the seizure of the
Bus in the amount of $19,425.00 together with accrued interest thereon.
2.
If
the amount of $19,425.00 includes an amount properly payable on the importation
of the Bus the parties shall calculate the correct amount owing to Mr.
Abdelseed.
3.
The
Plaintiff is entitled to his costs to be assessed at Column III of Tariff B.
4.
If
there are offers to settle which may impact the costs award the parties may
write to the Court concerning the issue of costs.
“Kevin R. Aalto”
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