Docket: A-351-15
Citation:
2016 FCA 110
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CORAM:
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STRATAS J.A.
WEBB J.A.
GLEASON J.A.
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BETWEEN:
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CONTAINERWEST MANUFACTURING LTD.
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Appellant
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and
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PRESIDENT OF
THE CANADA BORDER SERVICES AGENCY
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Respondent
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REASONS
FOR JUDGMENT
WEBB J.A.
[1]
This is an appeal from the decision of the
Canadian International Trade Tribunal (CITT) dated July 27, 2015 (AP-2014-025).
The CITT dismissed the appeal of ContainerWest Manufacturing Ltd.
(ContainerWest) from the decision of Canada Border Services Agency (CBSA). The
CBSA had determined that the containers purchased by ContainerWest did not
qualify for General Preferential Tariff (GPT) treatment under the Customs Tariff,
S.C. 1997, c.36 and the General Preferential Tariff and Least Developed
Country Rules of Origin Regulations, SOR/2013-165 (GPT Regulations)
because they were not shipped from China to Canada on a through bill of lading.
[2]
For the reasons that follow, I would dismiss
this appeal.
I.
Background
[3]
ContainerWest purchased 1,678 containers of
various sizes (from 6 to 40 feet) from Rich Glory (Hong Kong) Limited. The
containers were made in China. In order to economically ship the containers to
ContainerWest’s facilities in Canada, some of the containers were shipped with
goods of third parties inside them and others were temporarily welded together
with smaller containers nested inside. When the containers were shipped from
China, ContainerWest did not obtain through bills of lading or any other
shipping documents for the containers.
[4]
ContainerWest claimed that the containers
qualified for GPT treatment. However, the CBSA, upon completing compliance
verification, determined that the containers did not qualify for GPT treatment
because the containers were not shipped from China to Canada on a through bill
of lading.
II.
Relevant Provisions of the GPT Regulations
and the Customs Tariff
[5]
Subsection 4(1) of the GPT Regulations
provided, at the relevant time, that:
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4 (1) Goods are entitled to the
General Preferential Tariff only if the goods are shipped directly to Canada,
with or without transhipment, from a beneficiary country.
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4 (1)
Les marchandises ne bénéficient du tarif de préférence général que si elles
sont expédiées directement au Canada, avec ou sans transbordement, à partir
d’un pays bénéficiaire.
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Section 17 of the Customs Tariff
provides that:
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17 (1) For the purposes of this Act,
goods are shipped directly to Canada from another country when the goods are
conveyed to Canada from that other country on a through bill of lading to a
consignee in Canada.
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17 (1)
Pour l’application de la présente loi, les marchandises sont expédiées
directement au Canada à partir d’un autre pays lorsque leur transport
s’effectue sous le couvert d’un connaissement direct dont le destinataire est
au Canada.
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(2) The Governor in Council may, on the recommendation of the
Minister, make regulations deeming goods that were not conveyed to Canada
from another country on a through bill of lading to a consignee in Canada to
have been shipped directly to Canada from that other country, subject to such
conditions as may be set out in the regulations.
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(2) Sur
recommandation du ministre, le gouverneur en conseil peut, par règlement,
assimiler à des marchandises expédiées directement au Canada des marchandises
dont le transport ne s’effectue pas sous le couvert d’un connaissement direct
dont le destinataire est au Canada, et préciser les conditions de l’assimilation.
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III.
Decision of the CITT
[6]
The CITT reviewed the above provisions and
determined that, as a result of the provisions of subsection 17(1) of the Customs
Tariff, GPT treatment would only be available if the containers would have
been shipped from China to Canada on a through bill of lading. The CITT noted
in paragraph 44 of its reasons that:
[t]he mere fact
that parties to an international sales transaction may have different options
and preferences in organizing their affairs does not prevent Parliament from
choosing one of those options—conveyance on a through bill of lading—as a
condition for determining the tariff treatment applicable to imported goods.
[7]
The CITT also indicated in paragraph 65 of its
reasons, that “ContainerWest does not contest that the
goods in issue were not conveyed from China on a through bill of lading”.
[8]
As a result, the CITT did not review the
documentation that ContainerWest had obtained after the containers had been
shipped and dismissed the appeal of ContainerWest.
IV.
Issue
[9]
The issue in this appeal, as stated by
ContainerWest in its Memorandum of Fact and Law, “is
whether the [CITT] erred by reading-in to subsection 4(1) of the GPT
Regulations a strict requirement for a through bill of lading to obtain GPT
treatment”.
V.
Standard of Review
[10]
As a result of the provisions of section 68 of
the Customs Act, R.S.C., 1985, c. 1 (2nd Supp.), appeals to this Court
are restricted to questions of law. Therefore none of the findings of fact made
by the CITT are subject to appeal.
[11]
ContainerWest submitted that the standard of
review should be correctness because the issue involves a question of law and
the CITT is a court of record.
[12]
However, this Court has held that the standard
of review from decisions of the CITT, including decisions related to the Customs
Tariff, is reasonableness (Skechers USA Canada Inc. v. Canada (Border
Services Agency), 2015 FCA 58, 470 N.R. 155, at paragraph 34). ContainerWest
did not submit that this authority is “manifestly
wrong” such that it should no longer be followed: Miller v. Canada
(Attorney General), 2002 FCA 370, 220 DLR (4th) 149. As a
result, Skechers binds us and, therefore, the standard of review is
reasonableness.
VI.
Analysis
[13]
ContainerWest’s main argument in this appeal is
that section 17 of the Customs Tariff should not be interpreted as imposing
a requirement for a through bill of lading in order for the GPT treatment to be
available. ContainerWest submits that imposing a requirement for this
particular shipping document would result in a conflict with the GPT
Regulations and result in unintended consequences.
[14]
ContainerWest noted that subsection 4(1) of the GPT
Regulations provides that GPT treatment will apply if goods are shipped “with or without transhipment”. In ContainerWest’s
Memorandum of Fact and Law it stated that “[t]ranshipment
is the transfer of goods from one mode of transportation to another”.
This definition is consistent with the CBSA Memorandum D11-4-4, Rules of
Origin Respecting the General Preferential Tariff and Least Developed Country Tariff
(9 March 2015), at paragraph 70 and was not contested by the Respondent.
[15]
ContainerWest submitted that a through bill of
lading was only applicable if more than one carrier is used and therefore
requiring a through bill of lading would deny GPT treatment to goods that are
shipped directly from a qualifying country to Canada if only one carrier is
used to transport the goods. ContainerWest alleges that such a requirement
would be inconsistent with the GPT Regulations that provide that GPT
treatment will be available if goods are shipped without transhipment.
[16]
This argument, however, is based on
ContainerWest’s misunderstanding, as reflected in paragraph 21 of its
memorandum of fact and law, that the CITT had accepted its proposed definition
of a “through bill of lading”.
[17]
In paragraph 42 of its reasons, the CITT set out
the definitions of a through bill of lading, as proposed by ContainerWest:
42. In additioin [sic], contrary to
what was argued by ContainerWest, the reference to a through bill of lading does
not in itself show that subsection 17(1) of the Customs Tariff creates a
presumption or an example of direct shipment only, as opposed to a definition
or general requirement. ContainerWest argued that a through bill of lading is a
specific shipping document that is only relevant in particular circumstances,
such as where more than one carrier or mode of transportation is used. It put
forward the following two dictionary definitions, from Black’s Law
Dictionary, 7th ed., and the Dictionary of International Trade, 6th
ed., respectively:
A bill of lading by which a carrier
transports goods to a designated destination, even though the carrier will have
to use a connecting carrier for part of the passage.
A single bill of lading covering
receipt of the cargo at the point of origin for delivery to the ultimate
consignee, using two or more modes of transportation.
(footnote references omitted)
[18]
Although the CITT referred to the two
definitions as proposed by ContainerWest, it did not specifically adopt these
definitions in any part of its reasons. It is, however, implicit in paragraph
44 of its reasons that it did not necessarily accept that a through bill of
lading could not be obtained if there was only one carrier:
44. … Moreover, ContainerWest submitted no
evidence of commercial practice that could show that an importer, particularly
one cognizant of the requirements of the Customs Tariff, could not
obtain a through bill of lading in various factual situations, including those
where there is no transshipment or where a single carrier or mode of
transportation is used….
[19]
I would also note the wording in the Haiti
Deemed Direct Shipment (General Preferential Tariff and Least Developed Country
Tariff) Regulations SOR/2010-58. This Regulation was adopted under subsection
17(2) of the Customs Tariff, which would extend the GPT treatment
to goods that are not shipped from Haiti to Canada on a through bill of lading.
This Regulation provides that:
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1 Goods that are produced in Haiti are
deemed, for the purposes of their entitlement to the General Preferential
Tariff or the Least Developed Country Tariff, to have been shipped directly
to Canada from Haiti on condition that
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1 Aux
fins d’établissement de leur admissibilité au tarif de préférence général ou
au tarif des pays les moins développés, les marchandises produites en Haïti
sont réputées être des marchandises expédiées directement d’Haïti au Canada
si les conditions suivantes sont remplies :
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(a) the goods are imported into Canada and accounted for in
accordance with section 32 of the Customs Act after January 12, 2010;
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a)
elles sont importées au Canada et font l’objet d’une déclaration conformément
à l’article 32 de la Loi sur les douanes après le 12 janvier 2010;
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(b) the goods have been transhipped through a port in the
Dominican Republic and conveyed from that port on a through bill of lading
to a consignee in a specified port in Canada; and
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b)
elles ont été transbordées dans un port de la République dominicaine et transportées
de ce port, sous le couvert d’un connaissement direct, vers un destinataire
dans un port donné au Canada;
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(c) the importer submits to the Minister of Public Safety
and Emergency Preparedness any documentation requested by that Minister
relating to the shipment of the goods.
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c)
l’importateur remet sur demande au ministre de la Sécurité publique et de la
Protection civile tout document relatif à l’expédition des marchandises.
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(emphasis added)
[20]
It would appear that this Regulation could be
interpreted as implying that a “through bill of lading”
could be used if there is only one carrier or mode of transport. This provision
refers to a “through bill of lading” in relation
to the conveyance of the goods from a port in the Dominican Republic to a port
in Canada, which could be completed by one ship, since the Dominican Republic
is located in the Caribbean.
[21]
The expression “through
bill of lading” is also used in the same way in the Mexico Deemed
Direct Shipment (General Preferential Tariff) Regulations, SOR/98-37.
[22]
In any event, the CITT found, in paragraph 10 of
its reasons, that “ContainerWest did not obtain through
bills of lading, or any other shipping documents, for the goods in issue at the
time of their transport from China to Canada.” It was, therefore, not
necessary for the CITT to define “through bill of
lading”. There simply were no shipping documents. Since, as noted above,
appeals to this Court are restricted to only questions of law, this finding of
fact is not subject to review in this appeal.
[23]
With respect to the determination by the CITT
that a “through bill of lading” is required in
order for goods to benefit from the GPT treatment, the CITT completed its
analysis based on the principles of statutory interpretation as set out by the
Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1
S.C.R. 27, 154 D.L.R. (4th) 193. I am not persuaded that the CITT
committed any error in conducting its analysis and in reaching its conclusion.
[24]
As a result, I would dismiss the appeal with
costs.
"Wyman W. Webb"
“I agree.
David Stratas
J.A.”
“I agree.
Mary J.L.
Gleason J.A.”
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