Pipe and Piling Supplies LTD v. Her Majesty the Queen, [1985] 2 CTC 1

Denault, J:—The plaintiff is claiming reimbursement of the sum of $64,153.61 in additional customs duties which it alleged that it paid needlessly on importing certain goods from the United States. It maintained that the request for payment was made by a commodity specialist instead of a Dominion customs appraiser, and that the request was therefore illegal and invalid.

The defendant filed a conditional appearance and challenged the jurisdiction of the Federal Court — Trial Division to hear this claim, which it said should have been heard in another forum. It maintained that the legislator has provided machinery to determine a tariff classification or estimate the dutiable value of goods, and that the plaintiff's action is designed to short- circuit this process. In its submission, the Court should not hear this application or usurp the appeal provided for to the Deputy Minister. It was further argued that, even if the Court found it had jurisdiction in the area, it should decline to exercise it.

The plaintiff, on the other hand, considered that the remedy provided by the legislator in the Customs Act does not prevent an action being brought in the Federal Court, and that at this stage of the proceedings it should be given an opportunity to present the facts alleged.

It is not easy to determine the exact nature of the remedy sought by the plaintiff. In his submission, counsel preserves this ambiguity by arguing that the remedy was based in turn on sections 17(2) and (1), 18 and 25 of the Federal Court Act, and during argument at the hearing he first maintained that it was an action in damages and then that it was an action for a declaratory judgment. It seems from reading paragraph 11 of his statement of claim and the conclusions that it is exclusively an action for damages. The conclusions of the action provide no basis for the Court examining the matter or granting the relief mentioned in section 18 of the Federal Court Act. Section 25 clearly has no application to the case at bar, in view of the possible appeal to the Federal Court of Appeal, conferred by the Customs Act, as indicated below.

In sections 46, 47 and 48 of the Customs Act, the legislator has specified the procedure for reviewing a tariff classification or the dutiable value of goods imported. Thus, an appeal can be in turn to the Dominion customs appraiser (s 46(1)), the Deputy Minister (s 46(3)), the Tariff Board (s 47(1)) and finally to the Federal Court of Canada, on any question of law. Accordingly, there are several levels of appeal, and at each one the decision is final and peremptory unless it is appealed to the next level. In short, an appeal is optional so far as the decision to exercise the right of appeal is concerned, but peremptory as to the body to which it must be made.

It appears from the record that the plaintiff filed an initial appeal to the Dominion customs appraiser, but according to counsel for the plaintiff it was deliberately decided not to appeal to the Deputy Minister because it was felt that justice would not be obtained in that quarter. The plaintiff waived exercising its rights according to the procedure provided by the legislator in the Customs Act and instead appealed directly to the Federal Court, asking the latter to order that it be repaid the amount of customs duties which it felt it had been unfairly charged. Are these really damages? Manifestly they are not, because they represent a sum of money collected pursuant to the Customs Act. However, even assuming that the general scope of section 17 of the Federal Court Act allowed such an action to be brought, would it be appropriate in the case at bar for the Court to usurp the function of the Deputy Minister and of the Tariff Board in determining the tariff classification or estimating the dutiable value of the goods? Clearly, this is not what the legislator intended, particularly in such a specialized area in which disputes on highly technical matters have to be resolved. The intention was that determining the tariff classification and estimating the dutiable value of goods would be done by specialized bodies, subject to a right of appeal to the Federal Court on a question of law. It is therefore not appropriate to short-circuit the process laid down in the Act, as this Court is not qualified to undertake inter alia the valuation of goods. This concept is explained in the decision of the Supreme Court in The City of Lethbridge v Canadian Western Natural Gas, Light, Heat and Power Co Ltd, [1923] SCR 652, at 659:

. . . the courts, although they may not have been denuded of jurisdiction to entertain such an action as that now before us, should, I think, decline to exercise that jurisdiction, if they possess it, and should relegate the parties to the board which the legislature has constituted to deal with such cases and has clothed with powers adequate to enable it to do full and complete justice in the premises.

The application of the defendant is accordingly allowed with costs.

Application granted.