Date: 20001221
Docket: T-1317-98
BETWEEN:
MARSTAR CANADA INC.
Plaintiff
- and -
HER MAJESTY THE QUEEN
THE MINISTRY OF NATIONAL REVENUE
Defendants
REASONS FOR JUDGMENT
DUBÉ J.:
[1] By this simplified action, the plaintiff ("Marstar"), an import and export company with head office at West Hawkesbury, Ontario, appeals the decision of the Minister of National Revenue ("the Minister") dated March 27, 1998, seizing the imported goods of Marstar with no terms of release.
1. Facts
[2] The goods in question are small accessories from a shipment of trophy military firearm parts and accessories imported into Canada from the Federal Republic of Yugoslavia and unloaded at the port of Halifax in October 30, 1997. The total shipment was in the range of some 14 metric tons of packaged and containerized goods including rifle cleaning kits, replacement parts and various other accessories. The goods seized were a very minor portion of the shipment. They consisted of small tools that had fallen from old canvas bags and were lying at the bottom of several packing crates. The tools are used to clean machine guns and date back to the Second World War.
[3] These cleaning tools were not individually identified but were generally described as "parts and accessories" on the import documents including the Bill of Lading, the suppliers invoice and the packing lists. The canvas bags had been placed in 149 wooden crates stuffed into containers. In the course of shipping or unloading for inspection, a total of 31 small pieces were found at the bottoms of several crates. The whole shipment cleared at customs but the small tools (worth in toto not more than some $200.00) were seized by Customs Officers.
[4] Upon learning of the seizure, John F. St-Amour, President of Marstar, wrote to the Superintendent of Customs Services at Halifax on December 11, 1997, informing him that the seized items were detailed on the packing lists as "canvas tool bags with tools" and also listed on the invoice under the same description. He enclosed photographs of the contents of a typical tool bag and requested respectfully that the seizure be reconsidered and that he be allowed to import these few items in the normal course.
[5] On January 20, 1998, the functionary for the Appeals Branch, Mr. Jean-Marc Dupuis, acknowledged receipt and confirmed that the goods were being seized because they were "not reported" to customs. After further correspondence, the decision was delivered to Marstar that the goods had not been properly declared.
[6] However, in the Case Synopsis included in the production of documents at discovery, Mr. Dupuis wrote that: "In a report received February 20, 1998, the firearms officer explained that the goods are prohibited and are not deactivated". Further on in the synopsis, he concluded that: "In view of the fact that the importation of the seized goods is prohibited, I recommend that they remain forfeit".
[7] In his Statement of Defence, the Minister alleges in paragraph 6 "that the Customs Inspectors opened the crates and found the following goods that were not reported contrary to section 12 of the Customs Act" and in paragraph 7 that the goods are all parts for Heavy Machine Guns "and were not altered to allow them to be considered deactivated. Machine Gun parts are prohibited goods and therefore, pursuant to section 114 of the Customs Tariff Act, they may not be imported into Canada". The Statement of Defence was not amended but, at the hearing of this matter, counsel for the defendants limited the Minister's defence to failure to report.
2. Analysis
[8] Undeniably, Marstar has all the requisite licences and permits to import and export firearms and has been doing so for some 18 years. More specifically, on November 10, 1997, in the usual course of business, Mr. St-Amour notified the Department of External Affairs of the impending importation of these machine guns and parts. The huge shipment was allowed through customs, except for the 31 small cleaning pieces that had fallen to the bottoms of the crates. Clearly, the ground of "prohibited goods" as applied only to these cleaning goods is absurd.
[9] As to the other ground, "failure to report", it seems to me that Customs Officers cannot expect an importer to describe in minute details all the small parts enclosed in canvas bags as parts of a shipment of some 14 metric tons of packaged and containerized goods. They were generally and accurately described on the import documents as parts and accessories for trophy arms. Admittedly, they were not concealed. They are not smuggled pearls and diamonds carefully hidden within the cargo. They are neither prohibited nor unreported goods.
[10] I accept the interpretation of section 135 of the Customs Act1 defined as follows by my brother MacKay J. in ACL Canada Inc. v. Canada (Minister of National Revenue)2:
| Section 135 of the Customs Act does not set out in any detail the requirements or the nature of the appeal that is provided from the decision of the Minister, and those matters were not argued in this appeal. My interpretation of the section is that it provides for trial de novo in the sense that the court is not limited to consideration of evidence that was before the Minister. At the same time, as in the case of appeals from other administrative decisions or decisions of quasi-judicial bodies established by statute this court will not readily vary the decision appealed from unless it is persuaded that the Minister or his agents failed to observe a principle of natural justice or failed to act within his or her statutory discretion, or that the decision is based on an error in law, or is based on a finding of fact that is perverse or capricious or without regard to the evidence before the Minister. |
[11] In the case at bar, the Minister or his agents based their decision on a finding of fact made without regard to the evidence before the Minister. Consequently, this appeal is allowed with costs.
OTTAWA, Ontario
December 21, 2000
Judge
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1 R.S.C. 1985, c. 1 (2nd Supp.) as amended.
2 (1993), unreported, at pp. 12 and 13.
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