T-37-78
Ian Macaulay Maclennan (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Collier J.—Vancouver, July 26 and
August 30, 1978.
Customs and excise — Canadian resident returning after
several years abroad — Purchase of vessel abroad — Deposit
merely paid on vessel but possession not taken — Statement in
customs declaration that goods were to follow — Vessel
imported, subsequently seized and declared forfeit — Whether
or not plaintiff is liable to duty provided by tariff item
70320-1 — Whether or not vessel is "exempt" from require
ments of that item by regulation 3 of Returning Residents
Regulations (goods imported by former residents on return
after 5 years' residence abroad) — Customs Tariff R.S.C.
1970, c. C-41, Schedule A, Item 70320-1 — Customs Act,
R.S.C. 1970, c. C-40, s. 2(3) — Returning Residents Regula
tions, SOR/71-193, s. 3 — Federal Court Rule 475.
Plaintiff, a Canadian citizen who had lived abroad for a
number of years, bought a motor vessel in the United States
before his return. A deposit had been paid on the vessel, and
plaintiff indicated on his customs declaration that goods were
to follow, for he did not have use or possession of the vessel.
The vessel was later moored in Vancouver. Revenue Canada,
Customs and Excise, informed plaintiff some months later that
the vessel had been seized, and that it or a deposit in lieu
thereof was forfeit. Plaintiff appealed the Minister's decision to
this Court. The issue is whether plaintiff is liable to duty as
provided by tariff item 70320-1 or whether the vessel is
"exempt" from the requirements set forth in that item by
reason of regulation 3 of the Returning Residents Regulations.
Held, the appeal is allowed. There is no requirement that
there must be some period of possession and use, however short,
before the exemption applies. If the legislators had intended
there should be some period, however short, of possession and
use abroad, that requirement could easily have been set forth in
the tariff item or in the Regulations.
QUESTION by way of special case.
COUNSEL:
C. C. Sturrock for plaintiff.
G. C. Carruthers for defendant.
SOLICITORS:
Birnie, Sturrock & Bowden, Vancouver, for
plaintiff.
Deputy Attorney General of Canada for
defendant.
The following are the reasons for judgment
rendered in English by
COLLIER J.: This matter came before me, by
way of special case pursuant to Rule 475, on July
26, 1978. I answered the question put for adjudica
tion in favour of the plaintiff. I said I would later
give written reasons. Those reasons now follow.
The agreed statement of facts is as follows: (I
have not reproduced the exhibits):
1. The Plaintiff is a businessman who resides at #55-2212
Folkestone Way, in the Municipality of West Vancouver, in the
Province of British Columbia.
2. In or about the month of November, 1968 the Plaintiff, who
is a Canadian Citizen, left Canada and at that time ceased to
be a Canadian resident.
3. From November, 1968 until February, 1976 the Plaintiff
resided in various countries abroad. The Plaintiff's last resi
dence, prior to returning to Canada as a resident on February
16, 1976, was the United States of America.
4. In January of 1976 the Plaintiff purchased through Western
Marine of the City of Bellingham, in the State of Washington,
a twenty-four foot Sea Ray motor vessel for a price, including
accessories, of $14,292 in U.S. funds plus a transportation fee
of $650 for a total price of $14,942.
5. Subsequently, and pursuant to the said purchase agreement,
the Plaintiff paid the sum of $1,500 being the deposit referred
to in the said agreement.
6. The said deposit was paid by the Plaintiff purchasing a
cashier's cheque from the Columbine State Bank, in the City of
Denver, in the State of Colorado, in the sum of $1,500 which
sum was wired to the said Western Marine care of the Seattle
First National Bank, Bellingham branch, in the City of Belling-
ham, in the State of Washington, for account number
35046-50.
7. The said cashier's cheque is attached hereto and marked
Exhibit "A".
8. On February 16, 1976 the Plaintiff re-entered Canada as a
returning resident and duly completed at that time a Customs
Declaration on form B/4 in which he declared as "goods to
follow" the aforesaid vessel and accessories and in which he
disclosed all relevant serial numbers.
9. The said Customs Declaration on form B/4 is attached
hereto and marked Exhibit "B".
10. Subsequently the said vessel was delivered from the factory
in the City of Phoenix, in the State of Arizona, to the Seattle
Marina, in the City of Seattle, in the State of Washington,
where it was moored until April 3, 1976. On or about that date
the Plaintiff drove the said vessel to a moorage in the City of
Vancouver, in the Province of British Columbia.
11. By notice on form K30 dated March 8, 1977 the Plaintiff
was advised by Revenue Canada, Customs and Excise, that the
said vessel had been seized on or about January 27, 1977 and
that the said vessel, or a deposit in lieu thereof in the amount of
$10,328.16, was liable to forfeiture. The calculation of the
deposit is set forth on Customs and Excise form B17-1.
12. A copy of the said form K30 and a copy of the said form
B17-1 are attached hereto and marked Exhibits "C" and "D"
respectively.
13. In response to the aforesaid notice of seizure the Plaintiff
within the thirty days so allowed by section 161 of the Customs
Act R.S.C. 1970, c. C-40 as amended ("the Customs Act")
furnished his affidavit in order that the matter might be
referred to the Minister for decision pursuant to section 162 of
the Customs Act.
14. Although the Plaintiff acquired the said vessel prior to his
return to Canada on February 16, 1976 the Plaintiff admits
that he did not have "possession and use" of the said vessel at
least in the physical sense as at that date.
15. Revenue Canada, Customs and Excise advised the Plaintiff
by the form K-29, dated October 18, 1977 that a decision had
been made under the provisions of section 163 of the Customs
Act:
that the goods be released on payment of $10,328.16 to be
forfeited and in default of such release for thirty days that
the goods be forfeited.
16. A copy of the said form K-29 is attached hereto and
marked Exhibit "E".
17. In response to the said aforesaid notice the Plaintiff advised
the Minister by letter dated November 4, 1977 that he would
not accept the aforesaid decision and that he requested that this
matter be referred to Court pursuant to section 165 of the
Customs Act.
18. By letter dated December 23, 1977 the Plaintiff was for
mally advised that the Minister would not refer this matter to
Court and accordingly the appeal herein was filed in this
Honourable Court pursuant to section 150 of the Customs Act.
19. The relevant portion of Customs Tariff Item 70320-1 is as
follows:
Goods (not including alcoholic beverages, cigars, cigarettes and
manufactured tobacco) imported by a member of the
Canadian Forces or an employee of the Canadian Govern
ment, or by a former resident of Canada returning to Canada
to resume residence therein, and acquired by him during an
absence from Canada of not less than one year for personal
or household use and actually owned by him abroad and in
his possession and use for at least six months prior to his
return to Canada
British Preferential Tariff Free
Most-Favoured-Nation Tariff Free
General Tariff Free
The Minister may by regulation exempt any goods or
classes of goods from the six-month ownership, possession
and use requirement set out in this item.
20. Regulation 3 of the Returning Residents Regulations is as
follows:
3. The six-month ownership, possession and use require
ment set out in tariff item 70320-1 of Schedule "A" to the
Customs Tariff shall not apply to:
(a) a bride's trousseau imported by a newly married spouse;
(b) wedding presents imported by the recipients thereof; or
(c) goods imported by former residents of Canada who have
(i) taken up foreign citizenship, or
(ii) resided abroad for at least five years prior to their
return to Canada.
21. The question, in the special case, for adjudication by the
Court, is:
Whether, on the Agreed Statement of Facts filed herein,
the Plaintiff is liable to duty under the Customs Act R.S.C.
1970, c. C-40 as provided by tariff item 70320-1 of the
Customs Tariff or whether the said vessel is "exempt" from
the requirements set forth in that item by reason of Regula
tion 3 of the Returning Residents Regulations made pursu
ant to the said Customs Tariff.
The nub of the dispute between the parties is
whether the plaintiff, in order to come within the
exemption, must have had possession and use of
the vessel, before returning to Canada, for at least
some instant of time.
Counsel for the plaintiff argued that customs
tariff item 70320-1 and regulation 3 are clear and
unambiguous; that regulation 3 clearly waives the
possession and use requirement set out in the tariff
item.
Counsel for the defendant contended one must
look at the scheme of the statutes; he asserted that
scheme was to raise revenue and to protect the
Canadian economy from imports from abroad; if
the plaintiff and others like him are held to be
exempt then this would allow the stock-piling of
goods and bringing them into Canada tariff-free;
on the plaintiff's interpretation, a returning resi
dent would be put in a more favourable position
than a "settlor" (see tariff item 70505-1).
The defendant also relied on subsection 2(3) of
the Customs Act'.
2. ...
(3) All the expressions and provisions of this Act, or of any
law relating to the customs, shall receive such fair and liberal
construction and interpretation as will best ensure the protec-
' R.S.C. 1970, c. C-40.
tion of the revenue and the attainment of the purpose for which
this Act or such law was made, according to its true intent,
meaning and spirit.
Counsel for the defendant referred to the
French version of the relevant statutory provisions
and tariff items. It was the defendant's contention
the English text was unclear, that the French text
was not; that the French version, properly inter
preted, supported the defence position; therefore
the French text must prevail.
To my mind, the English version is quite clear
and the French version has the same meaning.
There is, as I see it, no requirement that there
must be some period of possession and use, how
ever short, before the exemption applies. To give
effect to the defendant's contention is to read into
the tariff item and regulation 3 words which are
not there.
If the legislators had intended there should be
some period, however short, of possession and use
abroad, that requirement could easily have been
set forth in the tariff item or in the Regulations.
The formal pronouncement answered the ques
tion in the special case as follows:
The Plaintiff is not liable to duty under the Customs Act
R.S.C. 1970, c. C-40 as provided by tariff item 70320-1 of the
Customs Tariff. The said vessel is exempt from the require
ments set forth in that item by reason of Regulation 3 of the
Returning Residents Regulations made pursuant to the said
Customs Tariff.
The plaintiff, if he feels so entitled, may apply
for judgment in his favour in the action.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.