Date: 20180809

Docket: T-523-16

Citation: 2018 FC 820

St. John’s, Newfoundland and Labrador, August 9, 2018

PRESENT:  The Honourable Madam Justice Heneghan

BETWEEN:

GAETANO CRAIG GAGLIANO

Applicant

and

HON. RALPH GOODALE, MINISTER OF PUBLIC SAFETY & EMERGENCY PREPARDNESS, HOUSE OF COMMONS, OTTAWA, ONTARIO

Respondents

JUDGMENT AND REASONS

I.  INTRODUCTION

[1]  Mr. Gagliano (the “Applicant”) seeks judicial review of the decision, dated February 29, 2016, by Mr. Jeffrey Strickland, Senior Program Advisor, (the “Senior Program Advisor”), Appeals Division, of the Recourse Directorate of the Canada Border Services Agency (the “CBSA”). In that decision, the Senior Program Advisor determined, pursuant to section 131 of the Customs Act, R.S.C. 185, c.1 (2^nd Supp.) (the “Act”) had been contravened, and that pursuant to section 133 of the Act, the sum of $7,563.33 paid by the Applicant to recover possession of a diamond ring shall be held as forfeit.

[2]  By Application for Judicial Review dated March 28, 2016, the Applicant seeks the following relief:

1. Request for the ‘Decision’ in the above noted matter, be reversed, and the full amount of the forfeiture returned, for the item “Diamond Ring”

2. This matter, of seizure, be stricken from the record of Gaetano Gagliano.

II.  BACKGROUND

[3]  The following facts are taken from the affidavit of the Applicant, sworn on April 26, 2016, and the affidavit of Tara-Lee Fraser, filed on behalf of the Minister of Public Safety and Emergency Preparedness (the “Respondent” or the “Minister”). Reference to the affidavits includes reference to exhibits attached to those affidavits. The exhibits include notes from CBSA officers and agents, as well as the transcript of the cross-examination of Ms. Fraser.

[4]  The Applicant is a Canadian citizen. He is a frequent traveller and a holder of a Nexus Card.

[5]  On June 25, 2015, the Applicant went to New York City where he made a down payment on a diamond ring. The ring was intended to be an engagement ring.

[6]  Upon his return to Canada, through Pearson International Airport, the Applicant was selected for secondary screening by a Border Service Officer (“BSO”). In the course of that process, he asked about his exemptions for a return trip within 24 hours. The Applicant declared $200.00 on his Customs Declaration card, form E311.

[7]  When questioned about his purchases, the Applicant said that he had bought some jeans, for cash, and that he did not have receipts. He also said that he had commissioned the creation of a diamond engagement ring valued between $19,000.00 and $22,000.00 and that the ring would be ready in 4 to 6 weeks.

[8]  The information provided by the Applicant about his purchases was incorrect. Following a search of his luggage, clothing, including a woman’s skirt, was found with price tags attached, together with receipts of purchase. A “look out” for the ring was placed on his file. The Applicant paid $637.35 to obtain release of the goods, on June 25, 2015.

[9]  The engagement ring eventually crossed the border in the possession of the Applicant’s friend in late August 2015. The ring was not declared and no duty was paid.

[10]  On August 31, 2015, the Applicant again entered Pearson International Airport. He was returning from a trip to Europe. On the return travel, he transited the United States on his way back to Canada. The diamond ring was in his possession when he entered the United States, enroute to Canada.

[11]  The Applicant used the electronic check-in kiosk at the Toronto airport to submit his E311 primary declaration card. He did not declare the ring at this primary checkpoint.

[12]  The Applicant was sent to secondary screening due to the notation that was placed on his file after the enforcement action in June. The diamond ring was discovered in his possession during the secondary screening.

[13]  The ring was seized because it had not been reported pursuant to section 12 of the Act.

[14]  The ring was valued at $25,211.10. The terms of release were assessed as a Level I infraction. The Applicant was assessed 30% of the value of the ring, that is the amount of $7,653.33, in order to recover possession of it.

[15]  On September 13, 2015, the Applicant requested a review of the seizure terms, as well as review of the penalty. He made his request pursuant to subsection 129 (1) of the Act which provides as follows:

[16]  In requesting a review of the seizure terms, the Applicant submitted that he had been forthcoming in dealing with the BSO at Pearson International Airport and he did not attempt to conceal the ring. He also claimed that the BSO assured him that if he were honest about who initially brought the ring into Canada, he would not be penalized.

[17]  On October 6, 2015, Ms. Tracy Bangs, a Senior Appeals Officer, sent the Applicant a “Notice of Reasons”. This was an interim step prior to a final decision on the appeal.

[18]  The letter was signed by Ms. Tracey Bangs, Senior Appeals Officer, Recourse Directorate of the CBSA. Ms. Bangs advised the Applicant that the letter should be regarded as the “written Notice of reasons for Action” as required by section 130 of the Act. Ms. Bangs further said that she was enclosing a copy of the relevant section of the Act Timelines, and conditions”, together with a copy of the Narrative Report regarding the enforcement action.

[19]  In those Reasons, Ms. Bangs said that the Applicant had not listed the ring on his E311 primary declaration card upon arrival at Pearson International Airport. Since the ring was in his possession at that time and was not declared, this failure to report was a contravention of the Act.

[20]  Ms. Bangs further noted that had it not been for the previous enforcement action and the flagging of the Applicant for secondary screening, the ring would not have been declared or discovered.

[21]  The Applicant was given the opportunity to file more supporting documentation prior to a decision being made on his appeal. If no further information was provided, a decision would be made on the basis of the information then on file.

[22]  Further, Ms. Bangs included in her letter a table setting out the three levels of infractions pursuant to section 12 of the Act, as well as the penalties for each level of infraction.

[23]  Subsequently, Ms. Bangs prepared a “Case Synopsis and Recommendation”, dated February 16, 2016. She reviewed the facts and the Applicant’s position. She characterized the matter as a failure to report the importation of goods as required by section 12 of the Act. She observed that the goods could have been seized at level 2 due to the prior enforcement action in June 2015.

[24]  Ms. Bangs recommended that the penalty be maintained at level 1, although a level 2 penalty was “duly warranted”.

[25]  The Applicant did not provide more information or documents in response to the letter of October 6, 2015, and the decision of February 29, 2016 was made on the basis of the information then at hand.

[26]  She also recommended that the sum of $7,563.33 paid by the Applicant to recover possession of the ring “shall be held as forfeit.”

[27]  By letter dated February 29, 2016, the Senior Program Advisor, Appeals Division Records Directorate, sent the Applicant the Ministerial decision on his appeal.

[28]  In that decision, the Senior Program Advisor decided that pursuant to section 131 of the Act, there had been a contravention of the Act “in respect of the goods that were seized”, that is the diamond ring. He further decided that pursuant to section 133 of the Act, the amount of $7,563.33 “shall be held as forfeit”.

[29]  The Senior Program Advisor reviewed the facts as presented by the Applicant, including his intention to declare the ring upon entry into Canada. The Senior Program Advisor noted that in spite of that intention, the Applicant did not declare the “importation of the ring” on his Customs Declaration Card.

[30]  The Senior Program Advisor observed that although given the opportunity to produce evidence that the ring had been lawfully imported on a previous occasion, the Applicant did not present evidence in that regard.

[31]  The Senior Program Advisor also acknowledged the Applicant’s reference to a statement from a CBSA Officer that no penalty would be imposed for importation of the ring but subsequently that Officer changed his mind.

[32]  The Senior Program Advisor said that “as the evidence confirms that the ring was not reported, and would not have been accounted for had you not been referred for a secondary examination, the officer was authorized under section 110 of the [Act] to seize such goods.”

[33]   The Senior Program Officer further commented that the Officer’s decision to seize the ring followed the secondary examination and “did not impact, your decision to not report importation of the ring”.

[34]  The decision of the Senior Program Officer included the following paragraphs:

To appeal the decision made pursuant to section 131, you may file an action in the Federal Court, in accordance with section 135 of the Customs Act. You must file your action within 90 days of the date of mailing this decision.

To appeal the decision made pursuant to section 133, you may appeal this decision by way of an application for judicial review under section 18.1(1) of the Federal Courts Act. An application to the Court must normally be filed within 30 days of the date of the mailing of this decision.

III.  STATUTORY CONTEXT

[35]  The decision under review arises from the undeclared importation of goods into Canada by the Applicant. Certain sections of the Act are relevant, as follows:

[36]  The combined effect of the provisions cited above is to impose an obligation upon a person entering Canada to declare goods sought to be imported; see section 12. The failure to declare goods may lead to seizure of those goods as forfeit; see section 110. Goods that have been seized may be returned upon payment of duty or a lesser amount as directed by the Minister; see subsection 117 (1).

[37]  A person may request review of a seizure by the Minister; see subsection 129 (1). The Minister is authorized to determine if the Act has been contravened; see section 131. If the Minister determines that the Act has been contravened, he or she may determine the penalty. A decision setting a penalty can be judicially reviewed before the Federal Court; see section 133. A decision of the Minister that the Act has been contravened can be appealed, upon the commencement of an action by statement of claim; see section 135.

IV.  SUBMISSIONS

A.  The Applicant’s submissions

[38]  The Applicant is self-represented. In his Memorandum of Fact and Law, he focuses on the issue of contravention of the Act, as addressed in section 131 of the Act. He submits that this finding was unreasonable since he intended to declare the ring, it was not concealed in his luggage and he was assured on August 31, 2015 that if he were honest, no penalty would be imposed.

[39]  The Applicant further argues that the declaration card E311 is intended to capture purchases made on a specific trip and since he had not purchased the ring on his European trip, his entry into Canada following that trip was not the proper time to report the ring.

[40]  Finally, the Applicant submits, relying on subsection 32.2 (1) of the Act, that he believed he had a period of 90 days from the time his friend brought the ring into Canada without declaring it, to correct the error of non-declaration.

[41]  By letter dated April 3, 2018, the Applicant made further submissions. Among other things, he raised the argument of not understanding the scope of judicial review. He also argued that the failure of the Respondent to produce the “primary screening officer” or the “secondary screening officer” for cross-examination was improper and interferes with his ability to establish his Claim for recovery of the penalty that he had paid.

[42]  The Applicant also took issue with what he characterized as the Respondent’s reliance upon the creation of a “pattern of deceit” about his intentions not to declare the ring upon his return from the European trip in September 2015.

[43]  The final arguments set out in the Applicant’s letter of April 3, 2018, read as follows:

●  The Government makes no attempt to respond to the primary fact, which the Ministry apparently relied upon, to deny the Ministerial Decision, which was not having the ring reported on the E311 card (from a different trip). The Ministry fully acknowledges during cross-examination, that the E311 card is intended ONLY for purchases on that specific trip, regarding those specific destinations and pertaining to the specific purchases during that specific time period. The ring, having been purchased on a separate trip, one month earlier, in the United States, was not eligible to be reported on the E311 card returning from Europe.

●  At no point does the Government reconcile their denial of my appeal, based on their stance regarding the E311 card, which they later acknowledge to be incorrect.

●  Finally, it is endlessly frustrating as a private citizen, that the central premise of the Attorney General’s argument, on behalf of the Government, is that despite the multiple unanswered and unchallenged procedural missteps of the Border Patrol Officers in enforcing seizure, they submit that my appeal lacks validity based on a procedural misstep to have requested a Judicial Review. In other words, the Government can make 5 errors in applying legislation, but if a citizen makes a single error in attempting to challenge those 5 errors… then the challenge is defunct and the Government goes unchecked.

B.  ii) The Respondent’s Submissions

[44]  The Respondent submits, in response to the initial Memorandum of Fact and Law filed by the Applicant, that the decision in question, that is the imposition of a penalty pursuant to section 133, can only be challenged by way of judicial review. He argues that the submissions of the Applicant about the interactions with the CBSA personnel are irrelevant.

[45]  Insofar as the Applicant appears to be challenging the finding by the Minister that he, the Applicant, contravened the Act, the Respondent contends that this finding can only be challenged pursuant to section 135, that is by way of an action commenced by a statement of claim. He argues that the Applicant did not do so but rather commenced an application for judicial review relative only to the penalty that was imposed.

[46]  Further, the Respondent submits that the decision, to impose a penalty, is a discretionary decision that is reviewable on the standard of reasonableness, as discussed in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190 at paragraph 47.

[47]  The Respondent acknowledged receipt of a copy of the Applicant’s further submissions and by letter dated April 30, 2018, advised that he would not be filing any submissions in reply.

V.  DISCUSSION AND DISPOSITION

[48]  The first issue to be addressed here is the nature of this proceeding.

[49]  The Applicant filed an application for judicial review on March 30, 2016, seeking reversal of the penalty that he paid to recover possession of the diamond ring that was forfeited on August 31, 2015.

[50]  This means that the Applicant seeks review of the decision made pursuant to section 133 of the Act. His application for judicial review refers to the decision made on February 29, 2016. However, the submissions made by the Applicant suggest that he is also seeking review of the decision to find a contravention of the Act, a decision made pursuant to section 131.

[51]  The Applicant pleads that he was honest about the ring when questioned at the secondary screening and that he relied on the “promise” of the BSO that he would not be penalized if he were honest about the first importation of the ring into Canada by his friend.

[52]  In his further submissions of April 3, 2018, the Applicant argues that he was deprived of the opportunity to cross-examine the primary and secondary screening officers. He argues, again, that he was not required to report the ring on the E311 form since that form required reporting only of goods purchased on the trip that he was making at that time, and the ring had not been purchased on that trip.

[53]  The submissions of the Applicant, as expanded in his letter of April 3, 2018, purport to challenge the finding of the Minister that he had contravened the Act. The statutory scheme does not allow such a challenge to be made by way of a judicial review. Pursuant to section 135 of the Act, that finding can only be challenged by way of an action.

[54]  The statutory scheme of the Act, about the different processes to be followed when challenging a finding of a contravention or a penalty, was reviewed in detail in ACL Canada Inc. v. The Queen in right of Canada et al (1993), 107 D.L.R. (4^th) 736 at pages 755 to 757. I refer to the following passages:

In this case, each of the two decisions of the Minister dated May 6, 1988, contained a decision pursuant to s. 131 that the Act had been contravened, and a decision pursuant to s. 133 that a portion of the amount previously paid by ACLC should be remitted and the balance held as forfeit. Does s. 135, providing an appeal from the decision of the Minister by one who requested a decision under s. 131, preclude appeal of the determination under s. 133, as the defendants here contend? In my opinion, the answer to this question is yes, for the following reasons. In s. 135 Parliament has provided for an appeal in relation to the decision of the Minister made under s. 131, a section which provides for a decision only with respect to the issue of whether there has been a contravention of the Act or the regulations.

…

In my view, Parliament has insulated from appeal the penalty imposed in the event there is found to be a contravention of the Act. That may seem surprising since the penalty will often be the primary concern of the person whose goods are seized under the Act or who is served with a notice and demand for payment under s. 124.

…

This does not mean that the discretion vested in the Minister in relation to penalties is unlimited. The Act and regulations specify maximum penalties, and the determination of a penalty will not be beyond the jurisdiction of the court in terms of remedies for judicial review of administrative decisions, primarily in regard to the duty of fairness. In the result, I am persuaded that, while the court has no jurisdiction under s. 135 to review the penalty imposed where there is an infraction of the Act, it does have jurisdiction, under ss. 18 and 18.1 of the Federal Court Act, R.S.C. 1985, c. F-7, as amended by 1990, c. 8, ss. 4 and 5, to consider whether the discretion to impose penalties, consequent upon a contravention of the Act, has been exercised in accordance with the law.

[55]  Section 129 allows an affected person to seek a decision from the Minister after seizure of goods. The delivery of a decision by the Minister opens up the possibility of further action by the person seeking a decision.

[56]  If the Minister decides, pursuant to section 131 of the Act, that a contravention of the Act has occurred, the concerned person can challenge such finding by commencing an action pursuant to section 135 of the Act.

[57]  When the Minister decides, pursuant to section 131 that a contravention of the Act has occurred, he can determine a penalty pursuant to subsection 133(1) of the Act. That subsection provides as follows;

[58]  In such a case, the remedy available to a concerned person such as the Applicant is to seek judicial review of a decision about penalty, before the Federal Court. That is what the Applicant did.

[59]  The processes set out in the Act for appealing a decision about the finding of a contravention and review of a penalty imposed in respect of a contravention were discussed by Justice Shore in Nguyen v. Canada (The Minister of Public Safety and Emergency Preparedness), 2009 FC 724. I refer to paragraph 1 as follows;

The Applicant, Ms. Thi Ngoc Nguyen, seeks to challenge a decision taken under section 133 of the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.) (“the Act”), whereby the Minister of Public Safety and Emergency Preparedness (“the Minister”) requires payment of a specified amount of money before returning a seized diamond ring.  The Applicant’s arguments are all directed at challenging the decision under section 131 of the Act whereby the Minister found that Ms. Nguyen had contravened s. 12 of the Act by failing to report an alleged importation of a ring. Subsection 131(3) of the Act is a privative clause within the Customs Act that requires decisions made pursuant to s. 131 of the Act be subject to review only as described in s.135(1) of the Act.  Subsection 135(1) of the Act requires that a Minister’s decision made under s.131 of the Act be appealed by way of an action. In other words, a decision made pursuant s. 131 of the Act must be challenged by way of action and not by way of application for judicial review.

[Emphasis in original]

[60]  Further, at paragraph 20, Justice Shore said the following;

No such statutory right of appeal exists with respect to Ministerial decisions taken under s. 133 of the Act. Section 133 of the Act provides that where the Minister finds under s. 131 of the Act that a contravention of the Act has occurred, the Minister may impose a penalty or other applicable remedial action such as the return of goods on receipt of an amount of money. Accordingly, a determination made pursuant s. 133 of the Act may often be dependent on a finding of a contravention of the Act. Nevertheless, the two decisions are separate and distinct, and must be challenged separately. The determination made pursuant to s. 131 of the Act in respect of a contravention of s. 12 of the Act may only be appealed by way of an action to this Court. Meanwhile, a determination made pursuant s. 133 of the Act regarding the release of the goods may be challenged only by way of an application for judicial review in accordance with s. 18.1 of the Federal Courts Act, R.S.C., 1985, c. F-7.

[61]  The Applicant pleads that he intended to declare the ring and that a CBSA Officer had agreed not to impose a penalty. On this basis, he seeks reversal of the monetary penalty.

[62]  According to the decision in Fenn (H.B) and Co. Ltd. v. Minister of National Revenue (Customs and Excise) 53 F.T.R. 7, good intentions do not matter when it is a question of compliance with the statutory obligation to declare the importation of goods.

[63]  The Applicant cannot by way of judicial review, challenge the finding that he had contravened the Act. That remedy is available only by way of an action, that is by issuance of a Statement of Claim within the timelines set out in the Act. The Applicant did not follow that process. The only question before the Court is the decision to impose a penalty, in the amount of $7,563.33, to allow the Applicant to recover possession of the undeclared diamond ring.

[64]  The decision to maintain the penalty is a discretionary decision reviewable on the standard of reasonableness.

[65]  The Act imposes an obligation upon a person entering Canada to declare the acquisition of goods obtained outside the country, either by purchase or as a gift. The Act authorizes the importance of a penalty if a contravention of the Act is established.

[66]  The finding of a contravention cannot be addressed in the present application for judicial review.

[67]  Insofar as the Applicant’s arguments about the use of the E311 form are concerned, in my opinion, these arguments go to whether a contravention of the Act was established. For the reasons given in Nguyen, supra, those arguments cannot be considered and are not relevant to the issue at hand.

[68]  The Applicant could only challenge the finding of a contravention by commencing an action pursuant to section 135 of the Act, that is by issuance of a Statement of Claim, leading to a trial; see the decision in Trites v. Canada (Minister of Public Safety and Emergency Preparedness) (2011), 400 F.T.R. 267.

[69]  The only issue before the Court is whether the Minister’s decision to uphold the penalty of $7,563.33 was reasonable.

[70]  According to the decision in Dunsmuir v. New Brunswick; supra, a discretionary decision of an administrative decision-maker is subject to review on the standard of reasonableness. That standard requires that a decision be justifiable, transparent and intelligible, falling within a range of possible, acceptable outcomes that is defensible on the law and that facts; see Dunsmuir, supra, at para. 47.

[71]  The Applicant here is challenging the reasonableness of the penalty that was imposed by the Senior Program Advisor, that is payment of the sum of $7,653.33, representing 30% of the value of the undeclared diamond ring.

[72]  The penalty was imposed because the Senior Program Advisor decided that the Act had been contravened by the undeclared importation of the diamond ring by the Applicant. He made that decision pursuant to section 131 of the Act and referred to that provision in the decision dated February 29, 2016.

[73]  The Senior Program Advisor then determined, pursuant to section 133 of the Act, that the amount of $7,563.33 “received for the return of the seized Diamond Ring shall be held a forfeit”.

[74]  The Senior Program Advisor proceeded to give reasons for his decision. In my opinion, those reasons meet the standards of intelligibility, justification and transparency having regard to the evidence that was before the Senior Program Advisor. The reasons meet the test in Dunsmuir, supra.

[75]  In the circumstances, there is no basis for judicial intervention and this application for judicial review will be dismissed.

[76]  The Respondent seeks costs.

[77]   A Direction will be issued about a timeline for filing brief submissions on costs.

JUDGMENT in T-523-16

THIS COURT’S JUDGMENT is that: The application for judicial review is dismissed. A Direction will be issued about a timeline for filing brief submissions on costs.

“E. Heneghan”

FEDERAL COURT

SOLICITORS OF RECORD

DOCKET:	T-523-16
STYLE OF CAUSE:	GAETANO CRAIG GAGLIANO v. HON. RALPH GOODALE, MINISTER OF PUBLIC SAFETY & EMERGENCY PREPARDNESS, HOUSE OF COMMONS, OTTAWA, ONTARIO
PLACE OF HEARING:	TORONTO, ONTARIO
DATE OF HEARING:	OCTOBER 23, 2017
Further Submissions:	April 3, 2018; April 30, 2018
JUDGMENT AND REASONS:	HENEGHAN J.
DATED:	august 9, 2018

APPEARANCES:

Mr. Gaetano Craig Gagliano	For The Applicant (SELF-REPRESENTED)
Mr. Derek Edwards	For The Respondent (SELF-REPRESENTED)

SOLICITORS OF RECORD:

Mr. Gaetano Craig Gagliano	For The Applicant (SELF-REPRESENTED)
Attorney General of Canada Toronto, Ontario	For The Respondent