Judgments

[1996] 1 F.C. 149

A-467-94

Timothy Joys (Appellant) (Plaintiff)

v.

Minister of National Revenue (Respondent) (Defendant)

Indexed as: Joys v. M.N.R. (C.A.)

Court of Appeal, Marceau, Décary and Robertson JJ.A.—Vancouver, September 20; Ottawa, October 4, 1995.

Customs and excise — Customs Act — Appeal from trial judgment commercial fishing licence integral part of fishing boat seized as forfeit under Customs Act, s. 110(1)(b) — S. 2 defining “conveyance” as “waterborne craft … used to move persons or goods” — Ss. 2, 110(1)(b) encompassing waterborne craft qua conveyance — Vessel means of transportation with or without licence — Licence not integral part of “conveyance” — Value of conveyance established independently.

Fisheries — Appeal from trial judgment commercial fishing licence integral part of vessel for valuation purposes upon forfeiture under Customs Act, s. 110(1)(b) — Pacific Fishery Regulations, 1984, s. 2 stating licence issues to person or in respect of vessel, not to vessel — Person granted licence responsible for compliance with Act, Regulations, precluded from fishing if licence suspended, cancelled — Fisheries Act, Regulations differentiating between vessel, licence in event of violation of Act, Regulations — No property right in licence — Licence Crown property, issued in Minister’s absolute discretion, seized, forfeited, disposed of by Crown — Not integral part of vessel.

Construction of statutes — Customs Act, s. 2 defining “conveyance” as “water-borne craft … used to move persons or goods” — Principle of strict interpretation of penal statutes applicable only if ambiguity — Ambiguity (whether “conveyance” embracing licensed conveyance) not arising from statute — No property right, interest in licence — Commercial fishing licence not integral part of fishing boat.

This was an appeal from the Trial Judge’s decision that a commercial fishing licence was an integral part of the plaintiff’s boat. The licence was issued upon application by the appellant in respect of the vessel. Customs authorities seized the boat as forfeit pursuant to Customs Act, paragraph 110(1)(b) after it was used to import marijuana into Canada. The vessel was valued at $85,000, and the licence at $400,000. The Minister held that the licence was an integral part of the conveyance which had been seized. The Trial Judge held that the licence had been issued to the vessel rather than to the appellant and, as it was attached thereto, it became an “integral part” of the vessel without which the vessel could not legally fish commercially and was properly included in the seizure and forfeiture.

Where the Customs Act has been contravened, subsection 110(1) permits seizure as forfeit of goods or the conveyance that the officer believes on reasonable grounds was made use of in respect of the goods. Subsection 2(1) provides that “`conveyance’ means any … water-borne craft … that is used to move persons or goods”.

The issue was whether a commercial fishing licence is an “integral part” of a fishing boat for the purpose of valuing that boat as a “conveyance” seized and forfeited under the Customs Act.

Held (Marceau J.A. dissenting), the appeal should be allowed.

Per Marceau J.A. (dissenting): There is no ambiguity in the definition of “conveyance”. The boat alone was subject to seizure under section 110. The fishing licence could be seized neither by itself nor with the boat, since the licence was not within the definition provided by section 2.

The question was whether the commercial fishing licence that was in force in respect of the boat, was an inherent feature of the boat that must necessarily go with the boat when seized. If answered in the affirmative, then the boat, which was properly seized, was a “licensed boat” and its value had to be assessed accordingly. The Trial Judge correctly concluded that that question had to be answered affirmatively.

Per Décary J.A.: The licence did not form an integral part of a “conveyance” under the Customs Act, and the value of the conveyance had to be established independently of the licence.

To be valued for the purposes of forfeiture under the Customs Act, a thing must be either one of the things that can be legally seized as forfeit, i.e. the conveyance or the goods, or an integral part of such things. Otherwise, the Crown could obtain through forfeiture a thing, or its value, which it could not have obtained through seizure. The licence was neither goods nor a conveyance. Therefore it could only be assimilated with part of a conveyance. The licence increased the market value of the vessel, but the fact that it had a value of its own, which increased the value of the vessel in respect of which it was issued, did not transform the licence into an integral part of the vessel. It is the nature of the licence, not the value it adds to the vessel, which determines whether it is an integral part of a conveyance.

Paragraph 110(1)(b) and section 2 encompass “water-borne craft” qua “conveyance”. A licence under which a vessel is permitted to undertake certain activities bears no relationship to the vessel as a “conveyance”. The vessel was a means of transportation whether or not it carried the licence.

The Pacific Fishing Regulations, 1984, state that a licence is issued “to a person” or “in respect of a vessel”. No licences are issued to a vessel. A licence is issued to the person who applies for it. That person becomes the “licence holder” and assumes responsibility for compliance with the Fisheries Act and Regulations. When a licence is suspended or cancelled the licence holder is precluded from engaging in the fishing activity. Under the Fisheries Act and Regulations, the vessel may be seized, forfeited and sold; the licence may be suspended, cancelled, not renewed, “surrendered to the Minister” or “rescinded”. Parliament did not intend to have licences, which are the property of the Crown and which are issued in the absolute discretion of the Minister, seized by the Crown and disposed of by the Crown as being an integral part of a vessel.

Per Robertson J.A. (concurring): The rule of strict construction of statutes applies only if attempts at a neutral interpretation suggested by Interpretation Act, section 12 leave reasonable doubt as to the meaning or scope of the text of the statute in question. Section 12 deems all legislation to be remedial and requires all provisions to be interpreted with a view to furthering the purpose of the legislation. There was no ambiguity if (1) “but for” the existence of the licence, the boat could not have been used as a means of conveying drugs, or (2) the licence was not an integral part of the boat. (1) The importation of drugs was not dependent on the existence of a licence. (2) The boat was clearly a conveyance; the licence clearly was not. The ambiguity herein, i.e. whether a conveyance embraces a licensed fishing boat, did not arise from the statute per se, but from our understanding of what is an integral part of a fishing boat. The answer hinged on the legal nature of a commercial fishing licence. There is no property right or interest in a licence. Generally, it remains at the Crown’s discretion to issue, renew, alter, or amend a licence. A boat owner cannot transfer a licence simply by transferring ownership of the boat in respect of which it was issued. Furthermore, a licence can have an existence distinct from that of the boat in respect of which it was issued. A commercial fishing licence is not an integral part of a fishing boat in respect of which that licence has been issued.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canada Shipping Act, R.S.C., 1985, c. S-9, s. 93(1).

Coastal Fisheries Protection Act, R.S.C., 1985, c. C-33, ss. 9, 14, 15.

Criminal Code, R.S.C., 1985, c. C-46.

Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, ss. 2 “Canada”, “conveyance”, 110, 118, 131, 135 (as am. by S.C. 1990, c. 8, s. 49).

Federal Court Rules, C.R.C., c. 663, R. 475, Tariff B (as am. by SOR/95-282, s. 5).

Fisheries Act, R.S.C., 1985, c. F-14, ss. 7, 9 (as am. by R.S.C., 1985 (1st Supp.), c. 1, s. 95), 71, 72, 73, 78.4 (as enacted by S.C. 1991, c. 1, s. 24), 79.1 (as enacted by R.S.C., 1985 (3rd Supp.), c. 31, s. 97; S.C. 1991, c. 1, s. 24).

Interest Rate for Customs Purposes Regulations, SOR/86-1121, s. 3 (as am. by SOR/92-517, s. 1).

Interpretation Act, R.S.C., 1985, c. I-21, s. 12.

Narcotic Control Act, R.S.C., 1985, c. N-1.

Pacific Fishery Regulations, 1984, SOR/84-337, ss. 2 “commercial fishing licence” (as am. by SOR/84-351, s. 1; 85-525, s. 1), 5 (as am. by SOR/84-351, s. 2), 9 (as am. idem), 10 (as am. idem), 24 (as enacted idem, s. 5), 25 (as enacted idem), 26 (as enacted idem), 27 (as enacted idem), 28 (as enacted idem).

Pacific Fishery Regulations, 1993, SOR/93-54.

CASES JUDICIALLY CONSIDERED

APPLIED:

Yellow Cab Ltd. v. Board of Industrial Relations et al., [1980] 2 S.C.R. 761; (1980), 24 A.R. 275; 114 D.L.R. (3d) 427; 14 Alta. L.R. (2d) 39; 80 CLLC 14,066; 33 N.R. 585; Nova, An Alberta Corporation v. Amoco Canada Petroleum Co. Ltd. et al., [1981] 2 S.C.R. 437; (1981), 32 A.R. 613; 128 D.L.R. (3d) 1; [1981] 6 W.W.R. 391; 38 N.R. 381; Nowegijick v. The Queen, [1983] 1 S.C.R. 29; (1983), 144 D.L.R. (3d) 193; [1983] 2 C.N.L.R. 89; [1983] CTC 20; 83 DTC 5041; 46 N.R. 41.

CONSIDERED:

Joys and R. et al (1988), 18 C.E.R. 40; 2 T.C.T. 4082 (F.C.T.D.); CCR Fishing Ltd. v. Canada, [1988] F.C.J. No. 922 (T.D.) (QL); Waryk v. Bank of Montreal (1990), 80 C.B.R. (N.S.) 44 (B.C.S.C.); affd (1991), 85 D.L.R. (4th) 514; 12 C.B.R. (3d) 233; 6 B.C.A.C. 81; 13 W.A.C. 81 (B.C.C.A.).

REFERRED TO:

General Supply Co. of Canada Ltd. v. Deputy Minister of National Revenue et al., [1954] Ex. C.R. 340; Joliffe v. The Queen, [1986] 1 F.C. 511(T.D.); Everett v. Canada (Minister of Fisheries and Oceans) (1994), 169 N.R. 100 (F.C.A.); Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R. 1123; [1990] 4 W.W.R. 481; (1990), 68 Man. R. (2d) 1; 56 C.C.C. (3d) 65; 77 C.R. (3d) 1; 109 N.R. 81; R. v. Hasselwander, [1993] 2 S.C.R. 398; (1993), 20 C.R. (4th) 277; R. v. Goulis (1981), 33 O.R. (2d) 55; 125 D.L.R. (3d) 137; 37 C.B.R. (N.S.) 290; 60 C.C.C. (2d) 347; 20 C.R. (3d) 360 (C.A.); Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1995] 2 F.C. 467(C.A.).

AUTHORS CITED

Côté, Pierre-André. The Interpretation of Legislation in Canada, 2nd ed., Cowansville (Qué.): Éditions Yvon Blais Inc., 1991.

Maxwell, Sir Peter Benson. Maxwell on the Interpretation of Statutes, 12th ed., London: Sweet & Maxwell, 1969.

APPEAL from the trial judgment ((1994), 82 F.T.R. 246) holding that a commercial fishing licence, which was issued in respect of the plaintiff’s boat, and which was seized as forfeit under Customs Act, s. 110(1)(b) was, for valuation purposes, an integral part of the conveyance. Appeal allowed.

COUNSEL:

David F. McEwen and Gordon L. Bisaro for appellant (plaintiff).

Alan D. Louie for respondent (defendant).

SOLICITORS:

Bisaro & Company, Vancouver, for appellant (plaintiff).

Deputy Attorney General of Canada for respondent (defendant).

The following are the reasons for judgment rendered in English by

Marceau J.A. (dissenting): With due respect for the contrary opinion, I am of the view that the learned Trial Judge [(1994), 82 F.T.R. 246 (F.C.T.D.)] properly identified the issue that had to be resolved in the final analysis and made no error in the reasoning he followed to dispose of it. In fact, I do not hesitate to adopt the substance of his reasons for judgment as my own. If I add a few comments, it is to try to highlight the basic propositions that have led me to my conclusion.

It simply does not appear to me, as it did not appear to the Trial Judge, if I understand his reasons correctly, that the real question that arises in this litigation is one of statutory interpretation of the word “conveyance” as used in the Customs Act, R.S.C., 1985 (2nd Supp.), c. 1. Parliament has set out the meaning to be given to the word “conveyance” in section 2 of the Act, in a clear and exhaustive manner and I see no ambiguity in the definition contained therein. There is no doubt in my mind that the boat alone, as a “water-borne craft … used to move persons or goods”, was subject to seizure under section 110 of the Act. Neither is there any doubt in my mind that the category “K” fishing licence that was in force in respect of that boat could not, by itself, be the subject of a seizure. I would as readily reject any suggestion that the seizure of the licence could somehow be linked or added to the seizure of the boat, since the licence obviously does not fall within the definition provided by section 2.

The question, as I see it and as the Trial Judge saw it, is whether, in view of its essential features in law and its very special legal characteristics which distinguish it from a personal attribute, the commercial category “K” fishing licence that was in force in respect of the boat, and which had no separate existence from that of the boat, must be viewed as being an inherent feature of the boat with the result that the licence must necessarily go with the boat when seized. If the question is to be answered in the affirmative, then the boat, which was properly seized, is a “licensed boat” and its value has to be assessed accordingly. In other words, the conveyance that was seized was not merely a floating house, it was a properly licensed commercial fishing vessel and, in giving effect to section 118 of the Act, there would be no reason to value it other than at fair market value based on what it was at the time of seizure, that is to say again, a properly licensed fishing vessel.

In coming to his conclusion that the question had to be answered affirmatively, referring to the opinions expressed by Collier J. in Joys and R. et al (1988), 18 C.E.R. 40 (F.C.T.D.) and Cullen J. in CCR Fishing Ltd. v. Canada, [1988] F.C.J. No. 922 (T.D.) (QL), as well as the analysis of Gow J. of the British Columbia Supreme Court in Waryk v. Bank of Montreal (1990), 80 C.B.R. (N.S.) 44 (upheld on appeal [(1991), 85 D.L.R. (4th) 514 (B.C.C.A.)]), the learned Trial Judge, in my view, did not err.

I would dismiss the appeal with costs.

* * *

The following are the reasons for judgment rendered in English by

Décary J.A.: The issue in this appeal is whether the Crown is authorized to include in the evaluation of a “conveyance” duly seized and forfeited under the relevant provisions of the Customs Act,[1] the value of a commercial fishing licence issued in respect of that vessel pursuant to the Fisheries Act[2] and the Pacific Fishery Regulations, 1984[3] (the Regulations).

The facts

The relevant facts are not contested, the case having proceeded by way of an agreed statement of facts and an agreed formulation of the question to be answered pursuant to Rule 475 of the Federal Court Rules [C.R.C., c. 663]. They are summarized as follows.

The appellant was the owner of the M.V. Lloyd B. Gore, a 127-foot ocean going tug boat which was converted for use as a fishing vessel (the vessel). In 1981, the Department of Fisheries and Oceans (the Department) established a limited entry sablefish fishery off the coast of British Columbia. Only vessel owners that met certain requirements prescribed by regulation qualified for a sablefish licence. As a result of this licensing regime, there were 55 category “K” sablefish licences issued. From 1981 to 1988, a category “K” licence was issued every year to the appellant in respect of the vessel, the licence for the 1988 calendar year (the licence) being issued on April 27, 1988. (A.B., at page 50).

The licence was issued upon application by the appellant. It was “issued in respect of” the vessel, the reported vessel owner being identified in the licence as the appellant. The licence further reads:

This licence confers subject to all the applicable provisions of the Fisheries Act and Regulations made thereunder the authority to fish under the following specific terms and conditions …. (A.B., at p. 50.)

one of the conditions being:

… that fishing for sablefish under authority of this licence may only take place during the following period: from Sept. 04, 1988 … to Sept. 24, 1988 …

The following text appears immediately beneath:

As witness my signature hereunder, I understand that I am obliged, as a condition of this licence, to furnish accurate catch records in such manner and to such persons as the Fisheries Act and regulations may stipulate, and that this licence may be cancelled or suspended by the Minister or a fishery officer for failure so to do, or for a breach of any other condition under which this licence is issued.

This licence is not valid unless signed.

of Licence Holder/Vessel Owner/Operator

On the back of the licence appears the following:

This licence, complete with attached terms and conditions if applicable, must be carried aboard the vessel named in the licence at all times.

This licence may not be transferred from vessel to vessel or from person to person, and is to be returned to the Department of Fisheries and Oceans if any changes to the licence or the vessel for which it is issued are requested.

…

A further condition of this licence is compliance with the Fisheries Act and regulations made thereunder. Any violation of any one of the conditions listed may result in the suspension or cancellation of the licence.

Catch reporting—Terms and Conditions

Notice is given to the holder that as a condition of this licence, a true return for each delivery of fish must be recorded … (A.B., at p. 51.)

On August 17, 1988, the vessel was seized as forfeit by Customs authorities pursuant to paragraph 110(1)(b) of the Customs Act. The appellant had been under surveillance by the Royal Canadian Mounted Police (the RCMP) as it was suspected that he was involved in the trafficking of narcotics. The vessel had been spotted by the U.S. Coastguard upon returning from the South China Sea where it had picked up large quantities of marijuana and was seized by the Canadian authorities after it had entered Canadian waters and taken refuge on the Queen Charlotte Islands close to Vancouver.[4]

On August 19, 1988, the RCMP informed the Department of the seizure of the vessel. Paragraph 2 of the letter reads:

This Vessel is subsequently forfeit to Her Majesty in Right of Canada and as such Mr. JOYS nor anyone else have any right to any licensing relating to this Vessel. (A.B., at p. 31.)

On August 22, 1988, a market value survey of the vessel undertaken on behalf of the RCMP established at $85,000 the “present” market value of the vessel, divided as follows: hull: $50,000, machinery: $15,000, electronics: $20,000. The survey goes on:

In addition to the hull, machinery and electronics, the vessel appears to have a valid “K” (Black cod) Licence. These licences have a tremendous value. The licence [of the Vessel] would appear to be worth from $300 to $400,000, which would bring the total value of the unit to: $385,000 to $485,000. (A.B., at p. 20.)

The survey also mentions that there was “some fishing equipment installed” on the vessel, but it does not attribute any specific value to such equipment.

By letter dated August 26, 1988, the appellant requested the Minister of National Revenue (the Minister) to order the release of the vessel and the licence pursuant to section 131 of the Customs Act. (A.B., at page 32). In that letter, the appellant challenged “any jurisdiction under the Customs Act to seize the fishing licence, which is the subject of this appeal”.

On December 20, 1988, Revenue Canada informed the appellant that it had “been advised that the license forms part of the vessel” and that the appellant could obtain the release of the Vessel “on payment of $485,000.00 pending final decision”. (A.B., at page 34.)

On May 18, 1989, the appellant paid the amount of $485,000 to secure the release of the vessel and licence. The vessel was then returned to the appellant.

Earlier, on March 30, 1989, the appellant had made an application for issue of a 1989 licence in respect of the vessel. On June 29, 1989, the Department issued a 1989 licence in respect of the replacement vessel Viking Sky, which vessel, we were told at the hearing, was operated by the appellant.

On November 2, 1989, the Minister rendered his decision. He decided that there had been a contravention of the Customs Act or the regulations in respect of the conveyance which was seized; that the licence was an integral part of the conveyance which was seized under the Act; and that the amount of $485,000 received for the return of the said conveyance be held as forfeit. (A.B., at pages 56-57.)

The appellant appealed the decision of the Minister to the Trial Division of the Court under section 135 [as am. by S.C. 1990, c. 8, s. 49] of the Customs Act. The Trial Judge was asked the following stated question: “ … in considering the meaning of ‘the value of the conveyance at the time of seizure’ pursuant to s. 118(a)(i) and s. 133(3)(a) of the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.), to determine: 1) whether or not the licence shall be considered in the evaluation of the `conveyance’ as defined by the Customs Act and as held by Revenue Canada, Adjudications Division, to be forfeit … ”. (At page 248.)

The Trial Judge dismissed the action, essentially on the basis that the licence, being issued in respect of the very conveyance seized as opposed to being issued to the owner of the vessel, was “a necessary part of the conveyance, namely the vessel, without which the vessel could not legally fish commercially for sablefish and black cod and as such was properly included in the seizure and forfeiture”. (At page 256.)

Discussing the issue

It seems to me that in order for a thing to be valued for the purpose of forfeiture under the Customs Act, that thing must be either one of the things that can legally be seized as forfeit in the first place, i.e. the conveyance or the goods, or an integral part of such things.[5] To hold otherwise would be to allow the Crown to obtain through forfeiture a thing, or its value, which it could not have obtained through seizure. In the case at bar, the licence which is obviously not a “conveyance” nor “goods” within the meaning of subsections 110(1) and (2) of the Customs Act, can only arguably be assimilated with a part of a conveyance, for the purposes of the seizure provisions of the Act. The licence could probably have been seized under subsection 110(3) as “evidence in respect of the contravention”, but this would be of no help to the respondent because only the conveyance and the goods may be “seized as forfeit”.

After recognizing that the grant of a fishing licence is a privilege and that a fishing licence is an annual licence which does not carry with it a vested right to renewal (at page 252), the Trial Judge nevertheless went on to decide that as the licence was issued to the vessel rather than to the appellant and as it had to be attached to the vessel, it became “part and parcel” or an “integral part” of the vessel. This, in my view, is an error of fact as well as an error of law, as I shall demonstrate shortly. The Trial Judge in effect confused the licence with its physical indicia (certification plates and validation tabs) and based his conclusion on the improper assumption that a licence could be issued to a vessel.

Furthermore, the Trial Judge in effect defines “conveyance” in function of the sum of the aggregate of values it might have if it were sold on the open market qua licensed fishing vessel, and not in terms of the “conveyance” per se to which customs officials are limited to seizing and forfeiting by operation of the Customs Act. This is an incorrect approach. There is no doubt, and it is readily admitted by the appellant, that the licence increases the market value of the vessel. But the fact that a licence has a value of its own, which in turn increases the value of the vessel in respect of which it was issued, does not transform the licence into an integral part of the vessel. By analogy, the fact that a vessel which has been seized has been chartered for years to come will undoubtedly increase the market value of the vessel, and yet no one will suggest that the charter-party found on the vessel at the time of seizure is an integral part of the vessel and may be included in the evaluation of the vessel under the forfeiture provisions of the Customs Act. It is the nature of the licence, not the value it adds to the vessel, which determines whether it can be considered an integral part of a conveyance for the punitive purposes of the Customs Act.

A close examination of the Customs Act and of the Fisheries Act leads inescapably, in my view, to the conclusion that the value of the licence cannot be considered in the evaluation of the vessel seized and forfeited.

The Customs Act

It is trite law, to use the words of P.-A. Côté in The Interpretation of Legislation in Canada,[6] that:

Penal statutes, that is, those creating offences, are strictly construed. If a real difficulty arises in determining their meaning or scope, and general principles of interpretation are unable to clarify the question, the courts are justified in adopting the interpretation favouring the accused.

The Customs Act, to the extent that it provides for seizures, forfeitures, offences and punishment is undoubtedly a penal statute. Furthermore, as a statute authorizing encroachment on rights and freedoms of the individual that are recognized at common law, the Customs Act should be construed restrictively, at least those portions of it with which we are here concerned.[7] While the Court owes no sympathy to the appellant, the Court does owe him justice and should not favour a liberal interpretation when a restrictive one is warranted.

The word “conveyance” (moyen de transport) as defined in section 2 of the Customs Act, “means any … water-borne craft … that is used to move persons or goods”. The word “means” has been chosen by Parliament, over the word “includes”[8] to denote an exhaustive definition.[9] Apposite to the present situation are the words of Ritchie J. in Yellow Cab Ltd. v. Board of Industrial Relations et al.:[10]

It is significant that the Act employs the word “means” in this definition and not the word “includes” and it follows, in my view, that the definition is to be construed as being exhaustive and that in so far as the Board adopted common law principles defining “employer” which were at variance with the language of the section, there was an error in law.[11]

What may be seized, pursuant to paragraph 110(1)(b) of the Customs Act, is the very “conveyance that the officer believes on reasonable grounds was made use of in respect of the goods”. Clearly, what is encompassed by the legislation is a “water-borne craft” qua “conveyance” and in this regard a licence under which a vessel is permitted to undertake certain activities bears no relationship whatsoever to the vessel as a “conveyance”. The fact that the vessel carried the licence should not detract from the fact that the vessel was a means of transportation whether or not it carried the licence. In other words, the licence was by no means necessary to the vessel’s purpose as a means of transportation. This is even more so in the case at bar where the evidence shows that there was no relationship between the use of the vessel which led to its seizure and the licence it was carrying. The vessel was seized at a time (August 17, 1988) when it was not fishing nor purporting to be fishing and when the season contemplated by the licence (from September 4, 1988 to September 24, 1988) had not yet begun. The vessel was therefore a “conveyance” irrespective of the licence and it could be, and indeed was “made use of in respect of the goods” (section 110) at the time of the contravention whether or not a licence had been issued in respect of it.

An examination of comparable legislation[12] reveals that Parliament is fully aware of the distinctions between a “conveyance”, the “goods” that are carried on that conveyance, the equipment that is aboard the conveyance, and the “licence” that may have been issued in respect of the conveyance. In the Customs Act, as we have seen, a distinction is made in section 110 between “goods”, “conveyance” and “evidence”. In the Fisheries Act, a distinction is made between a “fishing vessel, vehicle, fishing gear, implement, appliance, material, container, goods, equipment or fish”, all of which can be seized (section 71), forfeited (section 72) and disposed of (section 73), and a “licence”, which can be suspended or cancelled (section 9, as amended)[13] or simply not renewed (section 7). In the Coastal Fisheries Protection Act,[14] a distinction is made between a “fishing vessel” and “any goods aboard [such] fishing vessel … , including fish, tackle, rigging, apparel, furniture, stores and cargo”, which can be seized (section 9), forfeited (section 14) or disposed of (section 15). In the Canada Shipping Act,[15] subsection 93(1) provides that where a ship has become subject to forfeiture “the court may adjudge the ship with its tackle, apparel and furniture to be forfeited to Her Majesty”.

Clearly, Parliament has established different regimes depending on whether the thing seized was a vessel, its cargo, its equipment or a fishing licence. Parliament has not provided for the seizure, except for evidentiary purposes, and forfeiture of fishing licences, and understandably so since, as I shall explain momentarily, licences being the property of the Crown and issued at the discretion of the Minister, can simply not be disposed of in the same manner as other things legally subject to seizure.

I am comforted in this interpretation by the distinctions made by the surveyor himself between the vessel (hull, machinery, electronics), the fishing equipment and the licence. (A.B., at pages 19-20.)

I therefore conclude that as a licence does not form an integral part of a “conveyance” under the Customs Act, the value of the conveyance must be established independently of that of the licence. To conclude otherwise would be tantamount to saying that what customs officials cannot achieve through seizure (i.e. seize the licence as part of the conveyance), the Minister can through forfeiture of the vessel.

The Fisheries Act and the Pacific Fishery Regulations, 1984

I could end my analysis here, but as the Trial Judge has decided that the licence was part or parcel of the vessel under the Fisheries Act, I will proceed to deal with this issue as well.

A licence, in the very words of subsection 7(1) of the Fisheries Act, is issued by the Minister “in his absolute discretion”. And by the very words of subsection 9(3) of the Pacific Fishery Regulations, 1984, as amended [by SOR/84-351, s. 2], “Commercial fishing licences … issued in respect of a vessel are the property of the Crown”. It is clear law that a fishing licence is a privilege granted by the Minister and in the renewal of which the licence holder has no vested right.[16]

The commercial fishing licence issued in this case, it is said, is issued to the vessel, as opposed to commercial fishing licences which may be issued to a person and which would not be part and parcel of the vessel. This argument is based on the distinction made in the definition of “commercial fishing licence” in section 2 [as am. idem, s. 1; SOR/85-525, s. 1] of the Regulations between (a) licences issued “to a person authorizing that person to engage in a fishery for a named species of fish, using specified gear”, and (b) licences issued “in respect of a commercial fishing vessel, specifying the category of commercial fishing that the vessel is authorized to engage in, the species of fish that may be caught and the gear to be used”. (My emphasis.) This distinction, in my view, is both superficial and wrong.

The Regulations state that a licence is issued “to a person” (à une personne) or “in respect of a … vessel” (pour un bateau) [underlining added]. No licences are issued to a vessel. To equate “in respect of” with “to” is to distort the language as well as the reality. A licence is issued to a person who applies for it (section 5 [as am. by SOR/84-351, s. 2] of the Regulations). That person, in the case of a licence issued in respect of a commercial fishing vessel, is the owner or operator of that vessel and is described in the licence as the “licence holder”. It is that person who assumes with his signature responsibility for compliance with the Fisheries Act and Regulations. If one were to pursue to its limits the logic of the respondent, the presumption established by section 78.4 of the Fisheries Act[17] where a licence has been “issued to the accused” [underlining added] and the power of the Court under paragraph 79.1(b) of the Fisheries Act[18] to “prohibit the person to whom the … licence was issued from applying for any new … licence” [underlining added], could not be invoked against the owner or operator of the vessel since the licence would not have been issued to him but would have been issued to the vessel. Counsel for the respondent had to admit, at the hearing, that such could be the result of the interpretation he was suggesting.

The respondent and the Trial Judge have put great emphasis on the fact that the licence had to be attached to the vessel. This, again, is an erroneous reading of the Regulations. It is not the licence itself which, pursuant to subsection 9(2) [as am. idem] of the Regulations, has to be “affixed” to the vessel, but the validation tabs issued together with the licence (subsection 9(1) [as am. idem]); as regards the licence itself, the only requirement is that it “be carried at all times on board” the vessel (subsection 10(2) [as am. idem]), a requirement which is repeated, as I have noted earlier, on the back of the licence.

The Regulations, and more particularly sections 24 to 28 [as enacted by SOR/85-525, s. 5] which deal with “Suspension and Cancellation of Licences”, have been devised on the understanding that all the licences contemplated by the Regulations are applied for by persons who, upon issuance of the licence, become licence holders and as licence holders assume personally the obligation to comply with the conditions of the licence. The Regulations have been devised, also, on the further understanding that when a licence is suspended or cancelled, the licence holder affected by the suspension or cancellation is precluded from engaging in the fishing activity that was authorized under the licence. In this context to suggest that an unknown, different regime applies where a licence is issued in respect of a vessel is to ignore the wording, the intent and the effect of the Regulations.

The words of Dickson J., as he then was, in Nowegijick v. The Queen,[19] are particularly relevant in this case:

The phrase “in respect of” is probably the widest of any expression intended to convey some connection between two related subject matters.

Under the Fisheries Act and Regulations, the vessel and the licence are by their very nature two different subject-matters which call for a different treatment in the event of a violation of the Act and Regulations. The vessel may be seized, forfeited and sold; the licence may be suspended, cancelled, not renewed, “surrendered to the Minister” or “rescinded” (subsection 9(3) of the Regulations). Clearly and for obvious reasons, Parliament did not intend to have licences which are the property of the Crown and which are issued in the absolute discretion of the Minister seized (otherwise than as evidence) by the Crown, forfeited to the Crown and disposed of by the Crown as being an integral part of a vessel.

Conclusion

Whichever way one turns, there is simply no basis, in law and in fact, for the conclusion that a commercial fishing licence issued in respect of a commercial fishing vessel under the Fisheries Act and Regulations may be considered as part of a “conveyance” for the purposes of seizure, forfeiture and disposition under the Customs Act. Even if there were any ambiguity, and I see none, such ambiguity would have to be resolved in favour of the appellant. It would indeed be a most extraordinary result if the value of a licence issued in respect of a vessel were to be included in the evaluation of the vessel upon forfeiture where the value of a licence issued to an individual operating a similar vessel were not: both licence holders, surely, would be equally to blame for having contravened the Customs Act in using a similar vessel to transport forbidden goods, and yet one’s penalty under the Customs Act would be more than five times that of the other ($485,000 versus $85,000).

Finally, I would like to comment briefly on the decision of Collier J. in Joys and R. et al,[20] which was relied on by Cullen J. in CCR Fishing Ltd. v. Canada[21] and by the Trial Judge in the case at bar. With respect, the conclusion of Collier J. that the licence was “part and parcel” of the conveyance was obiter in the context of a motion for declaratory relief which was dismissed on procedural grounds. The decision in this respect was made cursorily[22] without a thorough analysis of the relevant statutory provisions. The learned Judge was prudent enough to say that “Discovery, under the Rules, and full evidence at trial, may lead the trial judge to a different conclusion than I have come to at this time”. (At page 5 of QL.)

Disposition

I would therefore allow the appeal, reverse the judgment of the Trial Judge and, rendering the judgment that should have been delivered, I would allow plaintiff’s action, declare that the commercial fishing licence issued in respect of the vessel Lloyd B. Gore shall not be considered as part of the vessel for purposes of evaluation under the Customs Act and order the Crown to pay to the appellant $400,000 plus interest prescribed by the Customs Act and Interest Rate for Customs Purposes Regulations [SOR/86-1121, s. 3 (as am. by SOR/92-517, s. 1)] from May 18, 1989, to the date of payment.

I would also order that costs in this Court and in the Trial Division be paid by the respondent to the appellant and that such costs be, as agreed at the hearing by the parties, taxed on the basis of Column III of the new Federal Court Tariff B [as am. by SOR/95-282, s. 5] which came into force on September 1, 1995.

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The following are the reasons for judgment rendered in English by

Robertson J.A. (concurring): Narrowly defined, the question to be answered in this appeal is whether a commercial fishing licence is an “integral part” of a fishing boat for the purpose of valuing that boat as a “conveyance” seized and forfeited under the Customs Act, R.S.C., 1985 (2nd Supp.), c. 1. The boat in question is or was owned by the appellant and was used by him to import 22 tons of marijuana into this country. The boat was valued at $85,000 and the licence at $400,000.

I have had the distinct advantage of reading the reasons for judgment prepared by my colleagues. While I am attracted to the reasoning and result reached by Mr. Justice Marceau, I have arrived at the same conclusion as Mr. Justice Décary, substantially for the reasons he has given. I take this opportunity to focus specifically on the issue of statutory construction and the jurisprudence cited by both the learned Trial Judge and Mr. Justice Marceau.

One of the principal arguments advanced by the appellant was to the effect that penal statutes must be construed strictly. If a penal provision (in this case subsection 2(1) of the Customs Act), is reasonably capable of two interpretations, then the construction most favourable to the “accused” must be adopted. This, in my view, is not an accurate statement of the extant law. The so-called rule of strict construction comes into play only if attempts at a neutral interpretation suggested by section 12 of the Interpretation Act, R.S.C., 1985, c. I-21 leave reasonable doubt as to the meaning or scope of the text of the statute in question. Section 12 deems all legislation to be remedial and requires all provisions to be interpreted with a view to furthering the purpose of the legislation; see Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R. 1123, at page 1160; and R. v. Hasselwander, [1993] 2 S.C.R. 398, at page 413 quoting with approval R. v. Goulis (1981), 33 O.R. (2d) 55 (C.A.), at pages 59-60.

Having regard to the applicable canons of statutory construction, there are two ways in which a commercial fishing licence can be deemed part of the conveyance for purposes of valuation. If it can be said that “but for” the existence of the licence, the boat could not have been used as a means of conveying drugs, or that as a matter of law the licence in question is an “integral part” or “inherent feature” of the boat seized, then no ambiguity exists. Mr. Justice Décary addresses the “but for” approach in his reasons for judgment at page 16. As he notes:

… the evidence shows that there was no relationship between the use of the vessel which led to its seizure and the licence it was carrying. The vessel was seized at a time (August 17, 1988) when it was not fishing nor purporting to be fishing and when the season contemplated by the licence (from September 4, 1988 to September 24, 1988) had not yet begun.

Clearly, the action in question, namely the importation of drugs, was in no way dependent on the existence of the licence, or the relationship between the licence and the fishing boat. Thus, it cannot be said that “but for” the commercial fishing licence the smuggling offence for which the boat was seized would not have been committed.

The second way in which the licence can be deemed part of the conveyance for purposes of valuation is if, as a matter of law, the commercial fishing licence is an integral part of the boat. It is common ground that the fishing boat in question clearly falls within the definition of “conveyance” prescribed by subsection 2(1) of the Customs Act: “conveyance means any vehicle, aircraft or water-borne craft or any other contrivance that is used to move persons or goods” (emphasis added). It is equally clear that a licence is not a conveyance within the meaning ascribed to that term by the Customs Act. What is not clear is whether the notion of a conveyance embraces a licensed conveyance; that is to say a licensed fishing boat. Strictly speaking the ambiguity does not arise from the statute per se but from our understanding of what is, or is not, an integral part of a fishing boat. Mr. Justice Marceau expresses the essence of the underlying issue at page 8:

The question, as I see it and as the Trial Judge saw it, is whether, in view of its essential features in law and its very special legal characteristics which distinguish it from a personal attribute, the commercial category “K” fishing licence that was in force in respect of the boat, and which had no separate existence from that of the boat, must be viewed as being an inherent feature of the boat with the result that the licence must necessarily go with the boat when seized. If the question is to be answered in the affirmative, then the boat, which was properly seized, is a “licensed boat” and its value has to be assessed accordingly.

As I view it, the answer to the above question hinges on the legal nature of a commercial fishing licence as issued under the Fisheries Act, R.S.C., 1985, c. F-14 and the Pacific Fishery Regulations, 1984, SOR/84-337 as amended. As a general observation, it is fair to say that the law surrounding the legal nature of a commercial fishing licence is not fully developed, nor was it fully argued before us on appeal. Nonetheless, there are a few propositions which seem to be well accepted. The reasons of the Trial Judge below offer a convenient summary (at page 252):

Both parties are essentially in agreement regarding the nature of a licence, namely that it is a privilege to do something that would otherwise be illegal, but for the licence. It is also clear that the grant of a fishing licence or privilege vests no interest or property in the grantee. The jurisprudence is also clear that a fishing licence is an annual licence which does not carry with it a vested right to renewal, Joliffe v. Canada, [1986] 1 F.C. 511(TD), and Everett v. Canada (Minister of Fisheries and Oceans) (1994), 169 N.R. 100 (F.C.A.), per Desjardins, J.A.

The Trial Judge’s reasoning is to the effect that as “the licence goes with the registered owner” then it is part and parcel “or an integral part” of the “conveyance”. Mr. Justice Marceau adopts a similar position in stating that the licence in question “had no separate existence from that of the boat”. In my respectful opinion there is no support for this legal proposition. There is no property right or interest in a licence. Generally speaking, it remains always at the discretion of the Crown to issue, renew, alter, or amend a licence; (with respect to the revocation of a licence see Comeau’s Sea Foods Ltd. v. Canada (Minister of Fisheries and Oceans), [1995] 2 F.C. 467(C.A.).) Therefore, there is no legal basis for the suggestion that a boat owner might effect a transfer of a licence simply by transferring ownership of the boat in respect of which it was issued. Furthermore, it appears that a licence can have an existence distinct from that of the boat in respect of which it was issued. In the case at hand the appellant sought and obtained approval to have the licence transferred from the Lloyd George to the Viking Sky (see Appeal Book, at pages 15-16). Admittedly, there are instances in which the Department has agreed to recognize the transfer of a licence where there has been a change in ownership of the boat, a view that has been endorsed by the courts. However, the fact that, in certain circumstances the Minister will recognize such a transfer, does not vest the boat owner with a power of transfer or mean that the licence is an integral aspect of the boat. The two cases cited by the Trial Judge and Mr. Justice Marceau are demonstrative of this reality and worthy of comment.

In CCR Fishing Ltd. v. Canada, [1988] F.C.J. No. 922 (T.D.) (QL), the plaintiff sought a declaration that it was entitled to a commercial fishing licence issued in respect of a boat. The Court clearly indicated at page 2 of its reasons, that such a request amounted to the Court being asked to “usurp the role of the Minister and the Department of Fisheries and Oceans”. The relevant facts are as follows. The plaintiff owned a fishing boat secured by mortgages held by the Bank of Montreal. The boat sank in Vancouver harbour, and the Bank was required to have it removed. The Bank entered into a salvage agreement with Sea West Holdings under which Sea West would raise and remove the boat in exchange for title to it. The Department, in its correspondence with the salvor, indicated that the licence had transferred with the boat, and the salvor could apply for a renewal licence. The salvor was ultimately denied a renewal licence because the boat had deteriorated and did not meet the licensing requirements. CCR contested the transfer of the licence and began the Court action. The Trial Judge determined that the Court should not interfere with the Minister’s exercise of discretion and that the licence had transferred to the new owners of the boat. As I understand it, this conclusion is perfectly in keeping with the Department’s policy of agreeing to the transfer of a licence when a licensed boat is sold by a secured creditor. This becomes more evident in the following case.

In Waryk v. Bank of Montreal (1990), 80 C.B.R. (N.S.) 44 (B.C.S.C.); affd (1991), 85 D.L.R. (4th) 514 (B.C.C.A.) the Bank of Montreal had provided loans to the plaintiff which had been secured by mortgages on his fishing boat. Originally, the parties agreed that the licence would be assigned to the Bank as part of its security. However, once they determined that a commercial fishing licence could not be assigned, the parties agreed that the plaintiff would be precluded from selling, assigning, transferring, or mortgaging the licence without the Bank’s approval. When the plaintiff was forced into bankruptcy, the Bank seized and sold the boat and purported to transfer the licence to the new owner as part of the sale. The plaintiff sought a declaration that the Bank had wrongly petitioned his company into bankruptcy, and compensation for the resultant losses including the loss of the commercial fishing licence. The Trial Judge found that the plaintiff was not wrongly forced into bankruptcy, and, inter alia, that he had no property interest in the commercial fishing licence at issue. It is apparent that the Minister approved the transfer of the licence to the new owner of the boat, as the Trial Judge went on to note the Departmental policy that, as with the sale of a licensed boat, if a mortgagee takes possession of a boat under its security, the Department will allow the licence to remain with the boat upon the change in ownership. This policy reflects the Department’s wish to be equitable in its exercise of discretion, and its view that the Department “should not be a party which assists in enriching fishermen to the detriment of the fishermen’s creditors.” (Minutes of evidence of the policy and practice of the Department of Fisheries and Oceans during May 1983 to May 1985 as quoted in Waryk, supra at page 75.)

In my respectful opinion, these cases do not stand for the proposition that a commercial fishing licence is an integral part of a fishing boat. Rather, they demonstrate the extent to which the Department and the courts are prepared to protect the interests of third parties involved in the financing of the fishing industry. At the end of the day, I have not been persuaded that, as a matter of law or for that matter as a matter of commercial custom within the fishing industry itself, a commercial fishing licence can be or is regarded as an integral part of a fishing boat in respect of which that licence has been issued in the same way, for example, that title to a fixture passes with the ownership of land. Accordingly, I would allow the appeal as proposed by Mr. Justice Décary.

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