Date: 20030527
Docket: T-1431-01
Citation: 2003 FCT 663
OTTAWA, ONTARIO, THE 27TH DAY OF MAY 2003
PRESENT: THE HONOURABLE MR. JUSTICE LUC MARTINEAU
BETWEEN:
LES ALIMENTS REACH INC.
Applicant
- and -
THE DEPARTMENT OF NATIONAL REVENUE
Customs, Excise and Income Tax
Respondent
REASONS FOR ORDER AND ORDER
[1] This is an application by Les Aliments Reach Inc. (the "applicant") under section 88.2 of the Excise Act, R.S.C. 1985, c. E-14 (the "Act"), for an order declaring that its interest in the vehicle identified hereunder is not affected by the seizure as forfeit carried out by the respondent's employees.
[2] On July 9, 2001, a certain Marwan Charabi and a certain Ahmed Yassen Bager were observed by some members of the Customs and Excise Division of the RCMP in the process of transferring 58 cardboard boxes of varying shapes and colours from a 1998 45-foot trailer, licenced in Ontario, T12-404, bearing serial number 1GRAAV6Z9WB008370, to a Plymouth Voyageur vehicle in the parking lot of a shopping centre.
[3] The aforementioned boxes contained some Egyptian tobacco products that were not stamped as required under the Act.
[4] A maroon International truck, model INTER90S, 1996, licenced in Quebec L239168 and bearing serial number 2HSFHAMROTCO63816 (the "vehicle"), owned by the applicant, was attached to the trailer and was seized as forfeit pursuant to section 88 of the Act.
[5] At the time of the offence, the vehicle was in the custody and possession of Mr. Marwan Charabi.
[6] According to the applicant's allegations, in order to save costs it had loaned the vehicle to Cata International ("Cata"), which is also involved in the food industry, on the basis of a prior friendship between Mr. Lotfi, the chief partner of the applicant, and the father of the Cata officers, Mr. Bishara. In the days preceding the seizure, Cata had loaned the vehicle to the said Marwan Charabi so he could carry out some personal transportation contracts.
[7] The following provisions of the Act are relevant in this case:
| 88. (1) Any of the following things, namely, |
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88. (1) Les articles suivants : |
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| (a) all grain, malt, raw tobacco and other material in stock, |
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| a) les grains, le malt, le tabac brut et les autres matières en magasin;(b) all engines, machinery, utensils, worms, stills, mash-tubs, fermenting-tuns, tobacco presses or knives, |
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b) les machines, mécanismes, ustensiles, serpentins, alambics, cuves-matière, tonneaux à fermentation, presses ou hachoirs à tabac; |
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| (c) all tools or materials suitable for the making of stills, worms, rectifying or similar apparatus, and |
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c) les outils ou matériaux propres à la fabrication d'alambics, de serpentins, de rectificateurs ou d'appareils similaires; |
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| (d) all spirits, malt, beer, tobacco, cigars and other manufactured articles, |
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d) l'eau-de-vie, le malt, la bière, le tabac, les cigares et autres articles fabriqués, |
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| that are at any time found in any place or premises where anything is being done that is subject to excise, and for which a licence is required under this Act, but in respect of which no licence has been issued, shall be seized by any officer having a knowledge thereof and be forfeited to the Crown, and may either be destroyed when and where found or removed to a place for safe-keeping, in the discretion of the seizing officer. |
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qui se trouvent dans un lieu ou établissement où il se poursuit des opérations sujettes à l'accise, et pour lequel une licence est exigée en vertu de la présente loi mais n'a pas été émise, doivent être saisis par un préposé qui en a connaissance et être confisqués au profit de Sa Majesté, et ils peuvent être soit détruits dans l'endroit et au moment où ils sont trouvés, soit transportés en lieu sûr, à la discrétion du préposé qui opère la saisie. |
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| (2) All horses, vehicles, vessels and other appliances that have been or are being used for the purpose of transporting in contravention of this Act or the regulations, or in or on which are found any goods subject to excise, or any materials or apparatus used or to be used in contravention of this Act or the regulations in the production of any goods subject to excise and all such goods, materials or apparatus may likewise be seized as forfeited by the seizing officer and may be dealt with in the manner described in subsection (1).
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(2) Tous les chevaux, véhicules, vaisseaux et autres dispositifs qui, en contravention avec la présente loi ou les règlements, servent ou ont servi au transport de marchandises assujetties à l'accise ou de matières ou appareils employés ou à employer, en contravention avec la présente loi ou les règlements, à la production de quelque article assujetti à l'accise, ou sur ou dans lesquels sont trouvés de tels marchandises, matières ou appareils, peuvent être également saisis, avec ces marchandises, matières ou appareils, comme confisqués par tout préposé et peuvent être traités de la même manière.
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| 88.2 (1) Where a horse, vehicle, vessel or other appliance has been seized as forfeited under this Act, any person, other than the person accused of an offence resulting in the seizure or person in whose possession the horse, vehicle, vessel or other appliance was seized, who claims an interest in the horse, vehicle, vessel or other appliance as owner, mortgagee, or holder of a lien or other like interest may, within thirty days after the seizure, apply to any judge of any superior court of a province or to a judge of the Federal Court for an order declaring the claimant's interest.
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| 88.2 (1) Lorsque des chevaux, véhicules, vaisseaux ou autres dispositifs ont été saisis comme confisqués sous le régime de la présente loi, quiconque (sauf la personne accusée d'une infraction qui a eu pour résultat cette saisie ou la personne en la possession de qui ces chevaux, véhicules, vaisseaux ou autres dispositifs ont été saisis) réclame, à l'égard de ces chevaux, véhicules, vaisseaux ou autres dispositifs, un intérêt à titre de propriétaire, de créancier hypothécaire, de détenteur de gage ou de détenteur d'un intérêt similaire peut, dans les trente jours suivant cette saisie, s'adresser à un juge d'une cour supérieure ou à un juge de la Cour fédérale afin de faire rendre une ordonnance déclarant son intérêt.(2) Where, after such notice to the Minister as the judge referred to in subsection (1) may require, it is made to appear to the satisfaction of the judge |
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(2) Le réclamant a droit à une ordonnance déclarant que son intérêt n'est pas atteint par la saisie si, après la notification au ministre que le juge peut exiger, il est démontré, à la satisfaction de ce juge : |
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| (a) that the claimant is innocent of any complicity in the offence resulting in the seizure or of any collusion with the offender in relation thereto, and |
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a) d'une part, que le réclamant est innocent de toute complicité dans l'infraction qui a eu pour résultat la saisie ou de toute collusion avec le contrevenant en l'espèce; |
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| (b) that the claimant exercised all reasonable care in respect of the person permitted to obtain the possession of the horse, vehicle, vessel or other appliance to satisfy the claimant that it was not likely to be used contrary to this Act or, if a mortgagee or holder of a lien or other like interest, that before becoming the mortgagee or holder of the lien or other interest the claimant exercised such care with respect to the mortgagor or person from whom the lien or interest was acquired, the claimant is entitled to an order that the claimant's interest is not affected by the seizure.
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b) d'autre part, que le réclamant a pris toutes les mesures voulues à l'égard de la personne qui a reçu la permission d'obtenir la possession de ces chevaux, véhicules, vaisseaux ou autres dispositifs, afin de s'assurer que vraisemblablement ils ne seraient pas employés contrairement à la présente loi ou, s'il est un créancier hypothécaire ou un détenteur de gage ou d'un intérêt similaire, qu'il a pris ces mesures à l'égard du débiteur hypothécaire ou du donneur de gage ou d'un intérêt similaire avant de devenir semblable créancier hypothécaire ou détenteur de gage ou d'un intérêt similaire.
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| 240(1) Subject to subsections (2) and (3), every person who sells or offers for sale or has in the person's possession any manufactured tobacco or cigars, whether manufactured in or imported into Canada, not put up in packages and stamped with tobacco stamps or cigar stamps in accordance with this Act and the ministerial regulations, |
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240(1) Sous réserve des paragraphes (2) et (3), quiconque vend, offre en vente ou a en sa possession du tabac fabriqué ou des cigares de tout genre importés ou fabriqués au Canada qui ne sont pas empaquetés et qui ne portent pas l'estampille de tabac ou l'estampille de cigares en conformité avec la présente loi et le règlement ministériel est coupable : |
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| (a) is guilty of an indictable offence and liable to |
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a) soit d'un acte criminel passible : |
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| (i) a fine of not less than the amount determined under subsection (1.1) and not more than the amount determined under subsection (1.2), or |
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(i) soit d'une amende au moins égale au montant déterminé selon le paragraphe (1.1), sans dépasser le montant déterminé selon le paragraphe (1.2), |
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| (ii) both the fine described in subparagraph (i) and imprisonment for a term not exceeding 5 years; or |
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(ii) soit de l'amende visée au sous-alinéa (i) et d'un emprisonnement maximal de cinq ans; |
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| (b) is guilty of an offence punishable on summary conviction and liable to |
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b) soit d'une infraction punissable sur déclaration de culpabilité par procédure sommaire et passible : |
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| (i) a fine of not less than the amount determined under subsection (1.1) and not more than the lesser of_$500,000 and the amount determined under subsection (1.2), or |
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(i) soit d'une amende au moins égale au montant déterminé selon le paragraphe (1.1), sans dépasser le moins élevé de 500 00 $ et du montant déterminé selon le paragraphe (1.2), |
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| (ii) both the fine described in subparagraph (i) and imprisonment for a term not exceeding two years.
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(ii) soit de l'amende visée au sous-alinéa (i) et d'un emprisonnement maximal de deux ans. |
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[8] Section 88.2 of the Act provides that a person claiming an interest in a thing that is seized as forfeit is entitled to an order declaring that the person's interest is not affected by the seizure if it is made to appear, to the satisfaction of the judge, that this person is innocent of any complicity in the offence resulting in the seizure and that the person exercised all reasonable care, in respect of the person permitted to obtain the possession of this thing, to satisfy the claimant that it was not likely to be used contrary to the Act.
[9] The respondent herein acknowledges that the applicant is innocent of any complicity in the offence resulting in the seizure, in this case the possession, in breach of subsection 240(1) of the Act, of Egyptian tobacco products not bearing the stamp required by the Act, and that were seized with the vehicle pursuant to section 88 of the Act.
[10] Consequently, the only question this Court must ask itself is the following: Did the applicant exercise all reasonable care to satisfy itself that the person in whose hands the vehicle was seized was not going to use it for purposes contrary to the Act?
[11] In the case at bar, the applicant has the burden of demonstrating that it inquired and took concrete steps to satisfy itself that the vehicle loaned to Cata would not likely be used contrary to the Act. In the judgment delivered by the Supreme Court of Canada in Deputy Minister of National Revenue v. Industrial Acceptance Corp. Ltd. (1958), 15 D.L.R. (2d) 369, Mr. Justice Fauteux notes, at page 373:
... The condition precedent to the right to obtain the relief is precisely that a positive and specific inquiry as to whether there are reasons to suspect such a likelihood [that the vehicle was not likely to be used contrary to the provisions of the Act], was made and negatived any reason for such suspicions. The fact that such an inquiry might offend the person who is the subject thereof cannot minimize the obligation to make it.
(emphasis added)
[12] Referring to the scope of the test laid down by the Supreme Court, the Federal Court of Appeal states, in El Khoury v. Canada (Department of National Revenue, Customs and Excise), [1996] F.C.J. No. 1339 (C.A.), at paragraph 9:
... nor can [an] individual simply assert that there were no obvious reasons to justify making an inquiry. The fact that the Supreme Court of Canada included the adjective "positive" in its description of the inquiry in question in the passage quoted supra means that a precise and unavoidable duty is imposed on him. Even though the nature, method and scope of the inquiry depends on the circumstances, he may never be completely relieved of that duty.
[13] This is a very "heavy" burden, as Mr. Justice Rouleau of this Court commented in Groleau v. Canada (Deputy Minister of National Revenue, Excise Division - M.N.R.), [1993] F.C.J. No. 403, at paragraph 8. For example, a claimant cannot simply rely on the good opinion he may have of the person to whom he loans his vehicle (see Ken Ware Auto Sales Ltd. v. Canada (Minister of National Revenue - M.N.R.), [1993] F.C.J. No. 1271, at paragraph 8; and Groleau, supra, at paragraph 10).
[14] Now what precisely did the applicant's representative do to discharge himself of this burden?
[15] Nothing, other than to rely entirely on the good reputation of the Cata officers. Because of the friendship he had long maintained with the father of the Cata officers, the applicant's representative did not consider it appropriate to make any inquiry whatsoever. Unfortunately for the applicant, the cases are clear and unanimous: such conduct is not satisfactory. Furthermore, the applicant's representative admitted that he was aware of the fact that, one year prior to the seizure at issue here, Cata had been the object of two seizures carried out by RCMP officers in June and August 2000. In the first case, as in the case at bar, the seizure was in relation to an offence to the Act involving Egyptian tobacco products worth several hundred thousand dollars.
[16] Notwithstanding the knowledge of these previous seizures, the applicant's representative states that he was not worried, since "[translation] what had happened was one year ago... there had not been any official charge... whether it is tobacco or not, we still don't know" (examination out of court on affidavit of Mr. Ehab Lotfi, February 21, 2002, reply to question 39). I will add here that it is surprising, to say the least, that the applicant's representative had no suspicion at that time, nor did he think it appropriate to check, whether the vehicle might be used to transport something other than mere food.
[17] In any event, whether criminal charges were or were not laid does not alter the fact that section 88.2 of the Act requires that the applicant satisfy itself that it has exercised all reasonable care in respect of the person permitted to obtain the possession of the vehicle to satisfy itself that it would not be used contrary to the Act.
[18] Finally, even if in this case Cata has not been previously convicted, I have no hesitation in reaching the same conclusion as in Zlotnick v. Canada, [1991] F.C.J. No. 415, cited in this instance by the respondent, since the apparent lack of concern of the applicant's representative clearly constitutes, in my opinion, a significant departure from the standard of the "reasonable person" or the "due diligence" pleaded by the applicant, who claims that the latter case and the other judgments referred to earlier do not apply to this case.
ORDER
For these reasons, this application is dismissed with costs.
"Luc Martineau"
Judge
Certified true translation
Suzanne Gauthier, C. Tr., LL.L.
FEDERAL COURT OF CANADA
TRIAL DIVISION
SOLICITORS OF RECORD
DOCKET: T-1431-01
STYLE: LES ALIMENTS REACH INC. v. THE DEPARTMENT OF NATIONAL REVENUE Customs, Excise and Income Tax
PLACE OF HEARING: Montréal
DATE OF HEARING: May 21, 2003
REASONS FOR ORDER AND ORDER
DATED: May 27, 2003
APPEARANCES:
Robert Doré FOR THE APPLICANT
Marc Ribiero FOR THE RESPONDENT
SOLICITORS OF RECORD:
Robert Doré FOR THE APPLICANT
Marc Ribiero FOR THE RESPONDENT