Francoeur v. Canada
T-2153-87
Wetston J.
16/5/94
54 pp.
Action for general, punitive damages resulting from defendant's actions in administration, enforcement of Customs Act-Plaintiffs leasing video cassettes from American company for lease to retail franchisees-From February 1983 to April 1984 plaintiffs importing video cassettes based upon declared residual value rather than fair market value (FMV) as result of allegedly incorrect representations by Customs official-8,160 cassettes seized from franchisees-Plaintiffs charged with unlawful importation, falsification of customs documents-Discharged after preliminary inquiry-Claiming business destroyed by defendant's actions and individual plaintiff forced to declare personal bankruptcy-S. 134(2) providing after entry, officer may seize goods "has reasonable grounds to believe are subject to forfeiture"-S. 160 requiring customs officer to "forthwith report the circumstances of the case to the Deputy Minister whenever goods have been seized"-S. 192 providing if any person attempting to defraud revenue by avoiding payment of duty, such goods shall be seized and forfeited-(1) Whether customs officer having discretion to seize video cassettes, and if so, whether exercised in tortious manner-(2) Whether abuse of statutory authority in performance of duties under s. 160-(3) Whether warrantless seizures inconsistent with Charter, s. 8 (right to be secure against unreasonable search and seizure)-Action dismissed-(1) Mens rea essential element of s. 192 offence-Plaintiffs claiming as no intent to defraud Customs, no mens rea-S. 134(2) imposing objective standard of reasonableness-As plaintiffs not establishing either oral or written misrepresentations as to value for duty by Customs official, customs officer justified, on objective basis, after 4-hour meeting with individual plaintiff in belief further investigatory work required-Although s. 192 seizure mandatory, departmental enforcement policies encouraging flexibility in application-Customs officer seizing cassettes only when becoming concerned about losing control over Crown's interest-Properly forming opinion deliberate undervaluation occurring under s. 192-Not acting unlawfully when, in exercise of duties, seized video cassettes-Serious procedural defect in legislation as investigator having authority to impose discretionary penalty-Customs officer having reasonable grounds to believe video cassettes subject to forfeiture and seizures not unlawful-Since seizures lawful, customs officer not committing tort in performance of duties concerning those seizures-(2) In action for abuse of authority, plaintiff must show defendants acting with malice or intent to injure or without authority-Tort of abuse of authority having element of intent-Aware seizures could result in harm to plaintiffs, but not motivated to put plaintiffs out of business or by any other improper motive-Not acting with malice or outside statutory authority-No abuse of authority in relation to seizures-Customs officer having duty to "report forthwith circumstances" to Deputy Minister effective May 7, 1984, date K-5's issued, as constituted detention of goods-Issuance of K-9 notice of seizure commencing review of process within Adjudications Division on behalf of Minister-Adjudications process designed to mitigate harshness of seizure and/or forfeiture actions-Five-month delay in making report to Adjudications not "forthwith" within s. 160-Review process essentially unfair as Customs officer filing two separate reports with Adjudications, neither of which provided to plaintiffs prior to discoveries at trial-Customs officer's report incomplete, somewhat inaccurate-Absent evidence of malice or actions knowingly taken outside of statutory authority, tort of abuse of statutory authority not established-Blending of criminal enforcement duties and imposition of civil penalties by investigating officer illuminating potential flaws in reporting function-Public law remedy may be more appropriate than private law remedy in tort for abuse of authority-While Court may have exercised discretion under s. 163 differently, not basis for imposing liability-While numerous deficiencies in process, not abuse of authority under s. 160-(3) Seizure of forfeited goods without warrant in inland context in non- exigent circumstances not inconsistent with Charter, s. 8-S. 8 protecting individual's reasonable expectation of privacy against intrusion by state-Purpose of s. 192 to achieve compliance with Customs Act- Forfeiture resulting by operation of statute-No reasonable expectation of privacy in seizure of video cassettes forfeited under statute-If no reasonable expectation of privacy, s. 8 not applicable herein-Claim for damages essentially claim for future income loss-Damage assessment should include amount for value of assets and loss of future profits-Reasonable compensation based on loss of business as growing concern that would have expanded to 28 franchises by 1988 if not for defendant's actions set at $734,000-Defendant's conduct not sufficiently extreme to justify award of punitive damages-So long as plaintiffs awarded damages based on tort liability under Crown Liability and Proceedings Act, entitled to prejudgment interest as would have been had judgment been rendered prior to amendments to Federal Court Act, ss. 36, 37 effective February 1, 1992-Interpretation Act, s. 43(c) specifically precluding interference with accrued rights by repeal or amendment of statute-Enactment of Federal Court Act, ss. 36, 37 not divesting plaintiffs of entitlement to prejudgment interest in absence of express language to contrary-As cause of action arising in British Columbia, prejudgment interest to be calculated in accordance with laws applicable there-If Court found liability, order as to prejudgment interest would be awarded from date cause of action arising in 1984-Customs Act, R.S.C. 1970, c. C-40, ss. 2, 36, 134, 160, 161, 162, 163, 192-Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 8-Interpretation Act, R.S.C., 1985, c. I-21, s. 43(c)-Federal Court Act, R.S.C., 1985, c. F-7, ss. 36 (as am. by S.C. 1990, c. 8, s. 9), 37 (as am. idem)-Crown Liability and Proceedings Act, R.S.C., 1985, c. C-50 (as am. by S.C. 1990, c. 8, s. 20), s. 3-Court Order Interest Act, R.S.B.C. 1979, c. 76, s. 1 (as am. by S.B.C. 1982, c. 47, s. 2).