Date: 20070516
Docket: T-402-06
Citation: 2007 FC 521
Ottawa, Ontario, May 16, 2007
PRESENT: The Honourable Madam Justice Simpson
BETWEEN:
MACRO
AUTO LEASING INC.
Applicant
and
THE
MINISTER OF TRANSPORT
Respondent
REASONS FOR JUDGMENT AND JUDGMENT
INTRODUCTION
[1]
This
application for judicial review concerns the Respondent’s (Transport Canada’s) decision
of January 25, 2006 to seize a shipping container which held two partially
assembled Superformance cars and related parts (the Container’s Contents) which
Macro Auto Leasing Inc. (the Applicant) was importing from South Africa (the
Seizure). The Seizure in this case was the second seizure and detention of components
of Superformance cars on the basis that they are “vehicles” as that term is
defined in section 2 of the Motor Vehicle Safety Act, R.S.C. 1993, c.16
(the Act).
[2]
The
first seizure was made on April 21, 2005 following an investigation of the
Applicant’s business operations. As a result of that investigation, Transport Canada concluded
that the Applicant was offering to sell its customers complete operational
newly manufactured cars.
[3]
On
July 11, 2005, following the first seizure, Justice Tallock of the
Ontario Superior Court of Justice wrote a six-paragraph endorsement and ordered
the release of the seized items on the basis that their continued detention
would cause the Applicant undue hardship. Although he referred to the seized
items as “various components of a car kit” it is clear that he did not turn his
mind to whether they constituted a “vehicle” under the Act. For this reason, I
have concluded that his decision does not contribute to a resolution of the
issues in this case.
THE EVIDENCE
[4]
The
Applicant’s evidence is found in the affidavit of Leonard Skok of
March 28, 2006 (the Skok Affidavit). Mr. Skok is the President of the
Applicant.
[5]
Transport
Canada relies on
the affidavit of Harry George Baergen sworn on May 26, 2006 (the Baergen
Affidavit). He is a Senior Regulation Enforcement Officer in the Enforcement
Section of the Road Safety and Motor Vehicle Regulation Directorate of
Transport Canada.
[6]
Both
deponents were cross examined on their affidavits.
THE MOTOR VEHICLE SAFETY
ACT
[7]
The
Baergen Affidavit provides an introduction to the Act. It states:
5. Transport’s Road Safety and Motor
Vehicle Regulation Directorate (the “Directorate”), in which I work, was
created in 1969 to ensure the federal government plays a significant leadership
role in dealing with the road safety problem in Canada…
10. To achieve the goal of reducing risk
of death, injury and damage, the Act empowers the Governor in Council to
establish national safety standards for the design and construction of motor
vehicles.
11. These standards, known as the Motor
Vehicle Safety Regulations (the “Regulations”) define minimum performance,
equipment, and prescribed information requirements for all classes of vehicles
failing [sic] under the Act. Such requirements include, inter alia,
lighting performance, braking performance, occupant crash protection, vehicle
controls and displays, flammability of passenger compartment materials, Vehicle
Identification Numbers, as well as many other safety-related aspects of vehicle
design and performance.
12. Schedule III of the Regulations
constitutes the Canada Motor Vehicle Safety Standards (the “CMVSS”). The
standards provide performance and design criteria at the point of manufacture
for vehicle safety systems in order to ensure that only safe vehicles are
manufactured in or imported into Canada.
13. The CMVSS may apply singly to a
vehicle class, or to multiple classes. For instance, CMVSS 115 (Vehicle
Identification Number) is applicable to all classes of vehicles. However,
CMVSS 121 (Air Brake Systems) is applicable only to heavy-duty vehicles, such
as trucks and buses.
14. Many of the CVMSS require testing of
prototypes to certify the entire production as meeting the CVMSS. For example,
CMVSS 301 (Fuel System Integrity) requires a crash test, CMVSS 208 (Occupant
Protection) requires a crash test for airbag deployment, and CMVSS 210 (Seat
Belt Anchorages) requires a pull test for seat belt anchorages.
15. The Act stipulates that in order for
a vehicle to be imported into Canada the vehicle must conform to
the CMVSS…
CAR KITS AND KIT CARS IN
CANADA AND THE U.S.A.
[8]
The
Baergen Affidavit deals with these topics in the following manner:
Car Kits
21. A “car kit” or “starter kit” is a
collection of vehicle parts. Such kits may be imported into Canada by a
person, perhaps a car building hobbyist, for the purposes of merging the kit with
a used donor car, or other donor parts, sourced entirely in Canada, from
sources unrelated to the kit manufacturer, to build his/her own car.
22. A popular example of a car kit
involves the Shelby Cobra. The car building hobbyist may start with the frame
of a 1985 Ford Mustang, sourced from a Canadian wrecking yard. By merging it
with the appropriate car kit which he/she has imported, he/she can create a
home-built replica of a 1966 Shelby Cobra. The importation of
the car kit, subsequently merged with the donor parts, is not subject to the
Act, because no vehicle was imported nor was the vehicle newly manufactured by
a “company” as defined in the Act.
23. Once the car kit is completed by the
hobbyist home-builder, which could take a few weeks or a few years, the car is
registered with the province as a “home built” car, and it is assigned a serial
number by the province after a provincial safety check is carried out. Neither
the car kit, nor the home build car, nor the hobbyist building it falls under
the Act, but instead they fall under the provincial Highway Traffic Act once
the finished car is being used … on the provincial roads.
34. The key distinction for the purpose
of the Act is that an importation of vehicle parts does not have the capability
of being driven or drawn as manufactured by the manufacturer of the car kit,
nor does it have the capability of being certified by the manufacturer because
there are too many parts missing that the car kit manufacturer does not
supply. Therefore, the kit does not fit the definition of “vehicle”, and
thereby the parts do not fall under the Act…
Kit Cars
24. A “kit car”, “turnkey car” or
“replicar”, on the other hand, is a “passenger car” within the broader
definition of “vehicle”. These are complete vehicles often shipped partially
disassembled to facilitate shipping or to facilitate minor finishing operations
once they reach their destination. As a “kit car” or “replicar” is in effect a
motor vehicle, assembled or disassembled, such vehicles are subject to the Act
and must therefore comply with the CMVSS.
25. The primary concern of government
regulators in Canada and the U.S., including Transport, with kit car
manufacturers, is that they do not comply with most U.S. Federal Motor Vehicle
Safety Standards (being the U.S. equivalent of the CMVSS) nor with the CMVSS.
Accordingly, their vehicles are not manufactured to the same safety standards
required of the vehicles produced by all other vehicle manufacturers.
29. Based on my experience, kit car companies
are not interested in complying with Canadian federal safety standards mainly
because this requires engineering expertise. In most cases, the primary focus
of the business is on aesthetic appeal, performance and replication, rather
than engineering. Secondly, because the U.S. loophole already facilitates
access to the large U.S. market, manufacturers may not
wish to incur the engineering costs necessary to meet the CMVSS solely to gain
ready access to the much smaller Canadian market.
[9]
What
Mr. Baergen describes as the “U.S. loophole” is the fact that completely
assembled Kit Cars, minus engines, can be imported into the U.S.A. without
complying with U.S. Federal Motor Vehicle Safety Standards.
Transport Canada’s Practice
[10]
The
Baergen Affidavit states:
31.
By their
very nature, the distinction between a car kit and kit car is not amenable to
any fixed standard. Rather, they are concepts that sit along a spectrum. On
one end is a collection of vehicle parts. On the other is a complete vehicle.
Any given shipment of vehicle parts must be examined closely to determine
whether it constitutes mere parts, to which the Act does not apply, or whether
it may constitute a vehicle pursuant to the Act.
32.
Under the
supervision of this Directorate, a procedure has been adopted for the
processing of importations related to this industry. This procedure involves
decision making on a case by case basis in recognition of the fact that the
nature of the industry and its products do not allow for a “one size fits all”
approach. The procedure, a copy of which is attached hereto as Exhibit “D”,
has as its main features:
(i)
The
importer notifies this Directorate when it seeks to import a vehicle or vehicle
parts;
(ii)
The
importer faxes a list of parts to the Directorate where a detailed analysis is
undertaken to determine whether the collection of parts is a starter kit, some
other miscellaneous collection of parts, or perhaps a kit car to which the Act
applies;
(iii)
If it is a
shipment of parts, a letter is issued to the importer, which letter advises the
importer, inter alia, that:
(a)
A
determination has been made to the effect that the shipment constitutes a car
kit or a collection of parts rather than a “vehicle” under the Act, provided
the shipment represents the importer’s entire shipment;
(b)
It is
illegal to import a non-compliant motor vehicle into Canada, but stand alone replacement parts do
not require certification;
(c)
The
absence of an engine does not disqualify a vehicle from the definition of
“vehicle” under the Act; and
(d)
If, in the
aggregate, the parts come close to constituting a motor vehicle, the letter is
not to be used for shipments beyond the one to which the letter applies.
(iv)
The
letter, a form copy of which is attached hereto as Exhibit “E”, is then used by
the importer to complete the importation of the starter kit of vehicle parts.
[11]
Transport
Canada has issued a
document entitled “Kit Car” Information. It appears as Exhibit T to the Skok
Affidavit. It includes the following statement in which Transport Canada
describes itself as “TC”:
In general, TC focuses on manufacturers
and importers of motor vehicles, and TC also has jurisdiction with individuals
importing kit cars. But TC has no jurisdiction with the home-builders
who are gathering parts from various sources with intentions to build their own
car for their own use. The home-builder can buy parts in the form of a starter
kit (which usually needs a donor car) as long as the home builder is not
importing a disassembled motor vehicle. If the home-builder imports too many
parts, to the point where TC can define it as a motor vehicle, then the home
builder becomes a motor vehicle importer, and falls under TC’s jurisdiction.
THE CONTAINER’S CONTENTS
[12]
Following
the Seizure, the Notice of Detention dated January 25, 2006 described the
contents of the shipping container as follows:
1 container with two (2) cars inside
(assembled). Also included are boxes containing seats, fuel tanks, exhaust
parts, etc. Also keys found for one car. Container ID # MSCU 3815003 1 20 DU
Serial #s – 2390 and 2388
[13]
The
Baergen Affidavit indicates at paragraph 55 that Mr. Baergen inspected the
Container’s Contents and found them in the state described at paragraph 45 of
his affidavit. However, on cross-examination, he acknowledged that the container
had not been thoroughly inspected. For this reason, I have relied on the Skok
Affidavit. It describes the Container’s Contents in the following terms in
paragraphs 4 and 6. They state in part:
4.
When the
imported parts reach port, they are received in a manner such that the body is
attached to the frame of the car kit. The door, hood, and trunk lid are
attached to the body of the car kit. The body of the car kit, including the
attached components, arrives painted. Due to the manner in which the parts
arrive, the parts may be said to resemble a very basic outline of what is
commonly considered to be a motor vehicle. . .
5.
The major
parts or components that are required to provide the frame and body with the
ability to move or be moved, as well as those that are required to convert a
bare “vehicle-looking” frame into a functioning vehicle are listed in Exhibit
“C” to this affidavit. None of these parts are in the container seized by
Transport Canada …
[14]
The
parts listed on Exhibit “C” are listed below. I will describe them as the “Completion
Parts for the Body/Chassis” and the “Completion Parts for the Power Train”.
Completion
Parts for the Body/Chassis
|
Wheels
|
Tires
|
Wheel
Hub Adaptors
|
|
Wheel
Hubs and Retention Nuts or Spinners
|
Steering
Rack and Pinion
|
Lower
Steering Column and Joints
|
|
Front
Spindles
|
Rear
Sway Bar and Link Stabilizer
|
Scuttle
Bracket
|
|
Front
Wheel Hubs
|
Rear
Wheel Hubs
|
Front
Coil Springs
|
|
Rear
Coil Springs
|
Front
Shock Assembly
|
Rear
Shock Assembly
|
|
Left
Rear Side Shaft
|
Right
Rear Side Shaft
|
Left
Side Inner and Outer Constant Velocity Joint
|
|
Right
Side Inner and Outer Constant Velocity Joint
|
Differential
Mount
|
Differential
|
|
Differential
Breather Pipe
|
Front
and Rear Rotors
|
Front
and Rear Wheel Bearings
|
|
Tie
Rods Left Side
|
Tie
Rods Right Side
|
Front
Brake Disc Left and Right Side
|
|
Rear
Brake Disc Left and Right Side
|
Rear
Caliper Brackets
|
Front
Caliper Brackets
|
|
Rear
Brake Calipers
|
Front
Brake Calipers
|
Front
Brake Pads
|
|
Rear
Brake Pads
|
Brake
Line Flex Hoses and Brake Line to Complete Partial Lines
|
Brake
Fluid
|
|
Emergency
Brake Unit plus all fittings
|
Fuel
Tank Hoses and Neck
|
Fuel
Tank Filler Cap
|
|
All
electrical fittings Lights Lamps Indicators and Horn
|
Battery
|
Steering
Column
|
|
Steering
shaft
|
Brake
Master Cylinder
|
Upper
and Lower Control Arms (6)
|
Completion Parts for the
Power Train
|
Engine
|
Transmission
|
Motor
Mounts
|
|
Motor
Mount Pedestals
|
Transmission
Mounts
|
Transmission
Shifter
|
|
Bell Housing
|
Clutch
Assembly
|
Flywheel
|
|
Clutch
Slave Cylinder plus Bracket and Line
|
Drive
Shaft Assembly and Joints
|
Oil
Cooler
|
|
Oil
Lines
|
Radiator
Hoses
|
Speedometer
Cable and Adaptor
|
|
Fuel
Pump
|
Fuel
line Completion Hoses
|
Alternator
|
|
Ignition
Module
|
Water
Pump
|
Header
Tank
|
|
Carburetor
and all Linkages
|
Pulleys
and Belts
|
Distributor
|
|
Power
Leads
|
|
|
[15]
There
is no issue that at the point of importation, the Container’s Contents did not
have engines or wheels and they lacked all the parts described in paragraph 14
above.
[16]
The
Baergen Affidavit states at paragraph 46, that Superformance International (Superformance)
is the company which manufactures and assembles Superformance cars in South Africa. However,
in addition to shipping fully assembled cars (less power trains) Superformance also
distributes cars in two separate shipments. One is the Containter’s Contents
and the second is a package of the parts needed to complete the body/ chassis.
These will be called Assembly Competion Kits. The Skok Affidavit makes it
clear that Superformance cars do not use donor parts. Superformance manufactures
the entire body/chassis. This means that when assembled in Canada, the car’s
body/chassis is made entirely of parts manufactured by Superformance and
shipped in containers and Assembly Completion Kits.
[17]
Superformance’s
own sales literature is found at Exhibit “G” to the Baergen Affidavit. It
shows that Superformance cars are factory manufactured with all new parts in South Africa. For the US market, they
are fully assembled replicars that buyers can fit with their choice of engine
and transmission. The sales’ material also indicates that 99% of the cars are
powered with Ford pushrod V8 engines.
[18]
Superformance
describes itself as the “best equipped replicar manufacturer in the world” with
a modern hi-tech 150,000 sq. ft. factory and more than 400 employees.
THE INVESTIGATION
[19]
The
Skok Affidavit includes the following statements in paragraph 8 and 9:
·
The
Applicant does not assemble the Container’s Contents it imports.
·
The
Applicant does not supply Assembly Completion Kits. The customers must
obtain them from third parties.
·
The
Applicant’s customers are required to locate third parties to supply them with
the power train.
[20]
However,
to support these statements, Mr. Skok quotes certain provisions in a
contract to which the Applicant is not a party. The contract is between Macro
Autosports Inc. (the Dealer) and a prospective customer and is entitled
“Replicar Chassis/Body Kit Purchase Agreement”. At page 4, the following
provisions appear:
…Purchaser acknowledges and agrees that
the acquisition and installation of a Transmission engine, steering system,
suspension system and braking system is the sole responsibility of the
Purchaser…The Purchaser further acknowledges and agrees that the Dealer
expressly refuses to assist the Purchaser in the assembly or installation of
any components or parts purchased by the Purchaser pursuant to this Purchase
Agreement…
[21]
As
well, in section E(4), the contract provides that:
Purchaser agrees to assume full and sole
responsibility for acquiring the steering system, braking system and suspension
system required to cause the Product to be operable… Purchaser acknowledges and
agrees that the Dealer will in no way assist with or facilitate the assembly of
any components or parts, whether or not said components or parts are included
in the Product purchased by the Purchaser pursuant to this Purchase Agreement.
[22]
During
his investigation Mr. Baergen discovered that Macro Autosports is operated
by both Mr. Leonard Skok and his son Mr. Allan Skok. Its
letterhead describes it as “Distributors of Superformance Complete Replicars”.
Its open letter to potential customers which begins “Dear Cobra Enthusiast” and
which is signed by Leonard and Allan Skok includes the following
paragraphs which contradict the statements made in the contract described above:
The Replicars are imported into Canada in parts and components from
our manufacturer in Port Elizabeth SA. Also, a final completion kit consisting
of more components is purchased from the U.S. On your behalf Macro Autosports Inc.
can arrange for the assembly process at a Canadian Superformance Certified
workshop in Concord Ontario. Your
Superformance Replicar can be on the road in a very short period of time,
depending on your specific requirements.
A very important consideration is the
aesthetic correctness of the Replicar. If and when one wants to resell a
replica motor vehicle, those which hold value are the ones that were build as
close as possible to their original look. Also, the Replicars are factory
built, so they are all identical except for engine options.
On your behalf, we can arrange for the
installation of Ford SVO Crate motors, and also specially built motors. The
most highly recommended motors are the 351W, 392 and 460 Ford motors with 5
speed manual transmission or automatic. These recommended engines are built by
racing engine builders, and not by stock production engine rebuilders!
Recommended option pricing herewith.
[my emphasis]
[23]
The
Baergen Affidavit indicates that:
43. At the 2002 Canadian International
Auto Show Mr. Skok advised me that he had a special relationship with the
owners of Superformance so that he was able to purchase and import the vehicles
as car kits even though Superformance only manufactures complete vehicles
without engines and transmissions.
[24]
Further,
the Baergen Affidavit states:
44. During an unannounced visit to
Macro’s offices in April 2003, I observed three Superformance vehicles in the
showroom: two completed “S1 Roadsters” with power train, and one completed
“Cobra” without a power train. The cars were displayed with price lists, which
stated no further assembly was required except the power train. The Cobra was
listed at $57,000 without power train, and $78,000 with power train.
[25]
As
well, the Baergen Affidavit indicates that:
47. …upon the importation of the vehicle
and the peripheral parts, Macro then arranges to sell, directly or indirectly
through a related company a complete vehicle, including owner’s manual and
keys, to a Canadian customer. While the precise method for completing this
transaction may change from time to time, one scenario involves the use of
reciprocal contracts between companies owned and operated by the Skoks.
[26]
The
Baergen Affidavit also discloses that, with regard to Superformance car Serial
Number SPO1643, Macro Autosports supplied the body, wheels and related parts
and Feature Auto Leasing, another company in which Mr. Leonard Skok
was an officer and director supplied the Assembly Completion Kit.
[27]
Finally,
Macro Autosports’ invoice dated May 15, 2003 shows that one 2003
Superformance MK 111, Serial SPO1643 was sold to a Mr. Douglas Johnston
of Winnipeg for
$77,950.00 which is roughly the price Mr. Baergen saw displayed in the
Applicant’s showroom for this vehicle with a power train.
[28]
Based
on this evidence, Transport Canada concluded that:
·
Superformance
body/chassis parts are imported into Canada in two steps – in shipping
containers and in Assembly Completion Kits.
·
In
Canada, the
Applicant and related companies offer assembled Superformance cars for sale
with power trains installed and, once all the Superformance parts have been
received, the Superformance car can be on the road in a very short time.
THE ISSUES
1. Are
the Container’s Contents Vehicles?
[29]
In Bell ExpressVu Ltd.
Partnership v. Rex,
[2002] 2 S.C.R. 559, at paragraph 26, the Supreme Court of Canada endorsed the
following approach to statutory interpretation taken from E.A. Driedger’s, Construction
of Statutes, 2nd ed. (Toronto: Butterworths, 1983) at 87:
Today
there is only one principle or approach, namely, the words of an Act are to be
read in their entire context and in their grammatical and ordinary sense
harmoniously with the scheme of the Act, the object of the Act, and the
intention of Parliament.
[30]
The
Act defines a vehicle as follows in section 2:
|
"vehicle" means any vehicle that is capable
of being driven or drawn on roads by any means other than muscular power
exclusively, but does not include any vehicle designed to run exclusively on
rails.
[my
emphasis]
|
«véhicule » Véhicule automobile, ou
faisant partie d’un attelage automobile, qui peut circuler sur la
route; la présente définition ne vise toutefois pas les véhicules qui
circulent exclusivement sur rail.
[je
souligne]
|
[31]
In R.
v. Hasselwander, [1993] 2 S.C.R. 398, the Supreme Court of Canada dealt
with the definition of a prohibited weapon in subsection 84(1) of the Criminal
Code of Canada, R.S.C. 1985, c. C-46 and the meaning to be given to “capable”
in that context. A prohibited weapon was defined as one “that is capable of
firing bullets in rapid succession”.
[32]
The
weapon at issue was a semi-automatic Mini-Uzi which the respondent tried to
register with the Ontario
Provincial Court
as a restricted weapon. However, the Provincial Court heard expert evidence and concluded that
it was a prohibited weapon for the following reasons:
It
is obvious from the evidence with some minor work on the plate that the
obstruction could be removed, however, I am more influenced by the fact that
the entire trigger mechanism can be quite easily removed and replaced by a
fully automatic trigger mechanism and I am also influenced by the evidence that
the trigger mechanism from the replica weapon could be attached to the weapon
and it would fire in a fully automatic mode. This aspect of the matter makes
control in itself almost impossible as there is no control over the sale of
replica weapons. Constable Soley’s evidence also indicated that alternate
parts were readily available from various sources and notwithstanding the
restricted aspect of some manufacturers parts supplies it does appear that the
adaptability of fully automatic parts to this weapon remains an easy exercise.
[33]
When
the Supreme Court of Canada looked at these facts it adopted a purposive
approach to the interpretation of capable and said at paragraph 31:
In
my view, any uncertainty as to whether the word “capable” means either
“immediately capable” [page 414] or “readily capable”, is resolved as soon as
the word is interpreted in light of the purpose and goals of the prohibited
weapons provisions of the Code. Therefore, there is no need to resort to the
rule of strict construction in this case.
[34]
The
Supreme Court of Canada reviewed dictionary definitions of “capable” and
concluded that it includes potential for conversion. However, the Court noted
that some reasonable restriction on the capability of conversion was required
and concluded that capable meant capable of conversion to an automatic weapon
in a “relatively short period of time with relative ease” (see Hasselwander at para.
39).
[35]
Against
this background, the purpose of the Act and the time and effort required to
convert the Container’s Contents into operational cars must be examined.
[36]
The
Applicant says that it is clear that the Container’s Contents are neither
immediately nor readily capable of being driven. There are no engines and no
wheels in the seized container. On the other hand, Transport Canada says that the Container’s
Contents should be viewed as readily capable of being driven because with the body/chassis
Completion Parts in the Completion Assembly Kit and an engine, operational cars
which the Applicant sells, can be on the road in a short time.
[37]
Transport
Canada also says that the
focus must be on motor vehicle safety. It says that the evidence shows that Superformance
cars are manufactured and assembled in South Africa. For this reason, Transport Canada says they could be
equipped with the engines which Superformance recommends and tested to show
that they meet the CMVSS standards.
[38]
While
I have sympathy for Transport Canada’s position. It is hard to see that safety concerns justify
Transport Canada’s view that the Container’s Contents are vehicles when as a
hobby, a person can buy a car kit, locate donor parts from wrecking yards and
other sources and assemble an operational car without any oversight by
Transport Canada. These homemade
vehicles which are cobbled together with parts from a variety of sources are
legally driven on our roads if they pass provincial safety certification and
registration requirements which are designed to ensure that cars are safe
before they are driven. These requirements also apply to Superformance cars.
[39]
I
cannot conclude that safety considerations justify the very broad approach to
the word “capable” suggested by Transport Canada. It simply cannot be the case that the
Container’s Contents, which lack wheels and an engine, can be said to be
readily capable of being driven when their assembly, even in a short time,
could reasonably be expected to involve several days work by experts using
specialized equipment.
[40]
In
my view, to be readily capable of being driven, a vehicle, when imported, must
have an assembled body/chassis and an installed power train so that with a
minimum of activity, including steps such as the addition of fuel and washer
fluid, the inflation of tires, affixing mirrors and other minor parts removed
or not installed for shipping and adding a battery, the vehicle is immediately
capable of being driven. This conclusion means that Transport Canada
overreached its authority when it took the position that the Container’s
Contents which included two partly assembled chassis/frames with no wheels and
no engines were capable of being driven on a road.
THE STANDARD OF REVIEW
[41]
There
is no dispute that the Container’s Contents were not “immediately” capable of
being driven. The question is whether they were “readily” capable of being
driven and the facts on that point were not in dispute. The Macro Autosports
open letter states that the Container’s Contents with the addition of the parts
in the Assembly Completion Kits and power trains could be assembled into
operational cars in “a very short period of time”.
[42]
The
question before Transport Canada was one of statutory interpretation. In
these circumstances, were the Container’s Contents “vehicles” as that term is
used in section 2 of the Act?
[43]
For
this reason, I have reviewed the decision to seize the Container’s Contents
using the correctness standard.
BIAS
[44]
The
Applicant alleges that Transport Canada has made arrangements with two other
companies (Factory Five Racing (FFR) and MDA) to facilitate their imports but
that it refuses to respond to the Applicant’s request for a meeting to reach a
similar understanding.
[45]
Transport
denies that it has standing agreements involving accepted parts lists with
either FFR or MDA. It says that both companies import car kits and that each
shipment is assessed on the basis of the parts’ list supplied by the company
for each shipment. Transport Canada says, and I accept, that if FFR and MDA are saying they
have agreements with Transport which allow car kit importation, they are
misrepresenting the situation. All they have is the opportunity to use the
shipment approval process available to all parts importers.
FAILURE TO NEGOTIATE
[46]
Transport
Canada has concluded, fairly in
my view, that representatives of the Applicant have misrepresented the full
extent of their ability and willingness to sell complete Superformance cars.
In these circumstances and given that criminal charges were laid, I can find no
basis for criticizing Transport Canada under this heading.
MOOTNESS
[47]
Finally,
I should note that this application for judicial review of the Seizure is moot because
the Container’s Contents were stolen from the Customs’ compound and have not
been recovered. However, because the meaning of “vehicle” presents an ongoing
issue for the Applicant, I agreed to decide this case as it relates to the term
“vehicle” in section 2 of the Act.
JUDGMENT
This Court hereby declares that
the Container’s Contents seized and detained by Transport Canada on
January 25, 2006 were not vehicles under section 2 of the Act and that
Transport Canada therefore had no authority for the Seizure under section 15 of
the Act.
In the circumstances of this
case, each party will bear its own costs.
“Sandra
J. Simpson”
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