Arctic Offshore Ltd. v. Her Majesty the Queen as Represented by the Minister of National Revenue,, [1986] 2 CTC 75

Pinard, J.:—This is a motion dated the 8th day of May, 1986 on behalf of the plaintiff for “an Order pursuant to sections 18 and 44 of the Federal Court Act, quashing the seizure of the ship ‘Orion Expeditor" and returning possession of the said ship to the Plaintiff, or, in the alternative, an injunction restraining the Minister of National Revenue, his servants, agents, and employees, from taking any further action pursuant to the seizure of the ship ‘Orion Expeditor" or otherwise attempting to enforce the penalties and duties alleged by Canada Customs, or such other Order as to this Honourable Court may seem just, and with costs to the Plaintiff.""

While the defendants allege that the seizure and forfeiture of the vessel are authorized by the Customs Act R.S.C. 1970, c. C-40 and amendments, the plaintiff denies any violation to the Act and argues that in any case the seizure of its vessel is unreasonable.

By letter dated April 16, 1986, the solicitors for the plaintiff made submissions pursuant to section 161 of the Customs Act. The Deputy Minister of National Revenue for Customs and Excise or such other person as the Minister of National Revenue could have designated had not, as of the date of the hearing in the present case, considered and weighed the circumstances of the case and reported his opinion and recommendation thereon to the Minister as contemplated by section 162 of the Customs Act; furthermore, the Minister of National Revenue had not yet given his decision or referred the matter to court as contemplated by section 163 of the Customs Act.

The plaintiff’s case is premised, essentially, on the grounds that the seizure and/or forfeiture of its vessel violate section 8 of the Canadian Charter of Rights and Freedoms; consequently, the plaintiff invokes subsection 24(1) of the Charter to seek enforcement of its alleged guaranteed rights and freedoms. These sections read:

8. Everyone has the right to be secure against unreasonable search or seizure.

24. (1) Anyone whose rights or freedoms, as guaranteed by this Charter, have been infringed or denied may apply to a court of competent jurisdiction to obtain such remedy as the court considers appropriate and just in the circumstances.

Indeed, the plaintiff makes two main submissions. First, it submits that no duty is payable and that the vessel is not subject to seizure or forfeiture; more specifically, the plaintiff contends that the sections of the Customs Act relied upon by the defendants, namely sections 105, 180, 192, 205 and 231, are irrelevant, that they do not apply and do not authorize seizure or forfeiture of the ship in the present case. But when confronted with section 150 of the Act, the plaintiff argues that this section is repugnant to the Charter because compliance with its provisions would render the seizure and forfeiture of the vessel unreasonable, contrary to section 8 of the Charter. Section 150 of the Customs Act reads:

150. (1) No action, suit or proceeding shall be commenced against the Crown, or against any officer or person employed for the prevention of smuggling, or against any person in possession of goods under the authority of an officer, for the recovery of the thing seized, until a decision has been first given either by the Minister or by a court of competent jurisdiction in relation to the condemnation of the thing seized.

(2) Every such action, suit or proceeding shall be brought within three months after such decision has been given.

Secondly, the plaintiff submits that if indeed the vessel was subject to seizure and forfeiture under the provisions of the Customs Act, such seizure would violate section 8 of the Charter, in that it would constitute “a vast over-reaction to trivial and disputed violations of the Customs Act" and in that it would “cause the Plaintiff and its employees great harm .

In either case, the plaintiff must ultimately rely on the Charter in order to obtain the interlocutory relief it seeks in the present case.

Furthermore, the facts are somewhat sketchy and to a certain extent contradicted. For example, the defendants allege that the plaintiff admitted its responsibility under the Customs Act as appears to be the case in a letter dated November 15, 1985, signed by the president of the plaintiff and filed as Exhibit “A" in support of Donald Brian Peters’ affidavit. On the other hand, the plaintiff’s president, in one paragraph of its own affidavit dated May 22, 1986, seems to deny such an admission by giving a summary explanation that requires deeper scrutiny of all the facts and circumstances in the present case. The issue also revolves around the delicate interpretation of the word “goods" with relation to “vessel" in the Customs Act; indeed, if “vessel" is included in “goods", then a great portion of the plaintiffs argument is defeated, as most of the sections of the Act relied upon by the defendants refer to “goods" and as the plaintiff contends that “vessel" is not included in the definition of “goods" in the Act.

I have concluded that the wisest course to follow here is to refrain from intervening at this time and to allow the difficult and basic question of constitutionality and Charter transgression to be fully considered at the trial of this action, where declaratory relief can be given. As was stated by Lord Diplock in American Cyanamid Co. v. Ethicon Ltd. [1975] A.C. 396 at 407 and 409; [1975] 1 All E.R. 504 at 510 and 511:

It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature consideration.

The court is not justified in embarking upon anything resembling a trial of the action upon conflicting affidavits in order to evaluate the strength of either party’s case. . .

I also share the following view expressed by Linden, J. of the Ontario High Court in Morgentaler et al. v. Ackroyd et al. (1983) 42 O.R. (2d) 659 at 668; 150 D.L.R. (3d) 59 at 67;

In my view, therefore, the balance of convenience normally dictates that those who challenge the constitutional validity of laws must obey those laws pending the court’s decision. If the law is eventually proclaimed unconstitutional, then it need no longer be complied with, but until that time, it must be respected and this court will not enjoin its enforcement. Such a course of action seems to be the best method of ensuring that our society will continue to respect the law at the same time as it is being challenged in an orderly way in the courts. This does not mean, however, that in exceptional circumstances this court is preclued from granting an interim injunction to prevent grave injustice, but that will be rare indeed.

Finally, in cases of this kind, the judge must keep in mind the public interest; thus, I cannot assume that the grant of the interlocutory injunction, while providing great relief to the plaintiff, would not cause any damage to the defendants. As was stated by Pratte, J. of the Federal Court of Appeal, in A/G of Canada et al. v. Fishing Vessel Owners’ Association of B.C. et al. 61 N.R. 128, at p. 130:

When a public authority is prevented from exercising its statutory powers, it can be said, in a case like the present one, that the public interest, of which that authority is the guardian, suffers irreparable harm. . .

For all those reasons, the application will be dismissed. Costs will be in the cause.

Application dismissed.