Edgar Nader (Plaintiff)
v.
The Queen (Defendant)
Trial Division, Walsh J.—Montreal, June 26;
Ottawa, July 27, 1973.
Customs—Forfeiture of smuggled goods and car carrying
them—Acquittal of accused—Seizure confirmed by Minis-
ter—Jurisdiction of Court—Customs Act, secs. 165, 166(1).
Plaintiff was acquitted of a charge under section 192(3) of
the Customs Act of smuggling or clandestinely introducing
into Canada jewelry worth over $200 but was convicted of
so introducing other property worth less than $200. Plain
tiff's car and the jewelry were seized by the Customs at the
time of the importation and the seizure was subsequently
confirmed by the Minister pursuant to section 163 of the
Customs Act. Plaintiff then brought this action for return of
the car and jewelry.
Held, the action must be dismissed. On the facts the car
and jewelry were properly subject to forfeiture for viola
tions of provisions of the Customs Act even though plaintiff
had not smuggled them.
Held also, the Court was not prevented from examining
into the matter because plaintiff had not contested the
Minister's decision in the manner prescribed by section 165
of the Act but had instead brought this action.
The King v. Bureau [1949] S.C.R. 368, applied.
ACTION.
COUNSEL:
Claude Deneault for plaintiff.
Robert Cousineau for defendant.
SOLICITORS:
C. Deneault, St. Jean, P.Q., for plaintiff.
Deputy Attorney General of Canada for
defendant.
WALSH J.—Plaintiff's action asks for the
return to him of the following articles:
1. a Peugeot 1962 automobile;
2. 170 assorted items of jewelry consisting of
earrings, necklaces, bracelets, cufflinks, med
allions and so forth;
3. 11 watches with leather bracelets;
4. 41 rings;
which were seized from him on December 10,
1971 at the Customs Port at Blackpool, Quebec
together with other items such as a pair of
boots, an overcoat and a record, all of which
were enumerated in the formal customs seizure
bearing No. 21741/2261 dated April 26, 1972
and evaluated by the Minister of National Reve
nue for Customs and Excise at $9,328.51. Alter
natively, if the objects seized cannot be
returned plaintiff asks that defendant be con
demned to pay him the said sum of $9,328.51
with interest from March 24, 1972, the date on
which he formally demanded the return of the
items seized. On December 11, 1971, the day
after the seizure, criminal proceedings were
instituted against him under the provisions of
section 192(3) of the Customs Act, R.S.C. 1970,
c. C-40 which reads as follows:
192. (3) Every one who smuggles or clandestinely
introduces into Canada any goods subject to duty of the
value for duty of two hundred dollars or over is guilty of an
indictable offence and liable on conviction, in addition to
any other penalty to which he is subject for any such
offence, to a penalty not exceeding one thousand dollars and
not less than two hundred dollars, or to imprisonment for a
term not exceeding four years and not less than one year, or
to both fine and imprisonment, and such goods if found shall
be seized and forfeited without power of remission, or if not
found but the value thereof has been ascertained, the person
so offending shall forfeit without power of remission the
value thereof as ascertained.
In due course, by judgment dated March 6,
1972, he was acquitted of the charge of having
smuggled or clandestinely introduced into
Canada the jewelry in question although the
Court did find him guilty of so introducing mer
chandise worth less than $200 consisting of the
pair of boots, the overcoat and the record. It
was as a result of this acquittal that on March
24, 1972 he formally demanded the return of
the car and jewelry so seized. This was followed
by the formal notice of seizure dated April 26,
1972 advising him that the merchandise was
under seizure and giving him 30 days to oppose
same and give his reasons should he so desire,
the whole in accordance with section 161 of the
Act which reads as follows:
161. (1) The Deputy Minister may thereupon notify the
owner or claimant of the thing seized or detained, or his
agent, or the person alleged to have incurred the penalty or
forfeiture, or his agent, of the reasons for the seizure,
detention, penalty, or forfeiture, and call upon him to fur
nish, within thirty days from the date of the notice, such
evidence in the matter as he desires to furnish.
(2) The evidence may be by affidavit or affirmation,
made before any justice of the peace, collector, commission
er for taking affidavits in any court, or notary public.
On May 25, 1972 plaintiff, through his attorney,
officially advised the Minister that he opposed
the decision, giving his reasons for so doing.
Sections 163 and 164 of the Act read as
follows:
163. (1) The Minister may thereupon either give his deci
sion in the matter respecting the seizure, detention, penalty
or forfeiture, and the terms, if any, upon which the thing
seized or detained may be released or the penalty or forfeit
ure remitted, or may refer the matter to the court for
decision.
(2) The Minister may by regulation authorize the Deputy
Minister or such other officer as he may deem expedient to
exercise the powers conferred by this section upon the
Minister.
164. If the owner or claimant of the thing seized or
detained, or the person alleged to have incurred the penalty,
does not, within thirty days after being notified of the
Minister's decision, give him notice in writing that such
decision will not be accepted, the decision is final.
In conformity with section 163 on July 31,
1972, the Minister informed plaintiff that the
effects seized would only be returned to him on
payment of a deposit of $9,328.51 which would
then be confiscated. Plaintiff does not seem to
have complied with the provisions of section
164 and instead of so doing brought the present
proceedings which were produced on December
27, 1972 asking that the decision of the Deputy
Minister of National Revenue of July 31, 1972
be set aside and the merchandise in question be
returned to him.
Plaintiff's principal argument is based on the
fact that since the notice of April 26, 1972
refers to the fact that a charge has been laid of
having infringed the Customs Act by introduc
ing the merchandise into Canada by smuggling
same or clandestinely and that the car was used
for this purpose and goes on to notify him that
if this seizure or these charges are maintained
the merchandise referred to or the money
accepted as a deposit in this connection will
become subject to confiscation, and since he
was acquitted of this charge, it follows that the
car and merchandise in question are no longer
subject to confiscation. It should be noted, how
ever, that the standard printed form which was
used refers to the seizure or the charges in the
alternative, and in any event it is trite law to
state that an acquittal on a criminal charge does
not necessarily imply that the accused cannot be
held liable in civil proceedings arising out of the
same facts.
At this stage it will be convenient to refer to
certain other sections of the Act which I believe
to be pertinent to the decision of the matter. In
section 2(1) the words "seized and forfeited"
are defined as follows:
2. (1) In this Act, or in any other law relating to the
customs,
"seized and forfeited", "liable to forfeiture" or "subject to
forfeiture", or any other expression that might of itself
imply that some act subsequent to the commission of the
offence is necessary to work the forfeiture, shall not be
construed as rendering any such subsequent act neces
sary, but the forfeiture shall accrue at the time and by the
commission of the offence, in respect of which the penal
ty of forfeiture is imposed;
Paragraphs (b) and (c) of section 18 read as
follows:
18. Every person in charge of a vehicle arriving in
Canada, other than a railway carriage, and every person
arriving in Canada on foot or otherwise, shall
(b) before unloading or in any manner disposing thereof,
make a report in writing to the collector or proper officer
at such custom-house or station of all goods in his charge
or custody or in the vehicle and of the fittings, furnishings
and appurtenances of the vehicle and any animals drawing
it and their harness and tackle, and of the quantities and
values of such goods, fittings, furnishings, appurtenances,
harness and tackle; and
(c) then and there truly answer all such questions respect
ing the articles mentioned in paragraph (b) as the collector
or proper officer requires of him and make due entry
thereof as required by law.
Section 180(1) refers back to section 18 and
reads as follows:
180. (1) Where the person in charge or custody of any
article mentioned in paragraph 18(b) has failed to comply
with any of the requirements of section 18, all the articles
mentioned in paragraph (b) of that section in the charge or
custody of such person shall be forfeited and may be seized
and dealt with accordingly.
The seizure of the car is covered in section
183(1) of the Act which reads as follows:
183. (1) All vessels, with the guns, tackle, apparel and
furniture thereof, and all vehicles, harness, tackle, horses
and cattle made use of in the importation or unshipping or
landing or removal or subsequent transportation of any
goods liable to forfeiture under this Act, shall be seized and
forfeited.
Section 205(1) states:
205. (1) If any person, whether the owner or not, without
lawful excuse, the proof of which shall be on the person
accused, has in possession, harbours, keeps, conceals, pur
chases, sells or exchanges any goods unlawfully imported
into Canada, whether such goods are dutiable or not, or
whereon the duties lawfully payable have not been paid,
such goods, if found, shall be seized and forfeited without
power of remission, and, if such goods are not found, the
person so offending shall forfeit the value thereof without
power of remission.
Section 231(1) also deals with forfeiture and
reads as follows:
231. (1) All goods shipped or unshipped, imported or
exported, carried or conveyed, contrary to this Act or to any
regulation, and all goods or vehicles, and all vessels, with
regard to which the requirements of this Act or any regula
tion have not been complied with, or with respect to which
any attempt has been made to violate the provisions of this
Act or any regulation, are liable to forfeiture.
Section 248(2) deals with the burden of proof
and reads as follows:
248. (2) Similarly, in any proceedings instituted against
Her Majesty or any officer for the recovery of any goods
seized or money deposited under this Act or any other such
law, if any such question arises, the burden of proof lies
upon the claimant of the goods seized or money deposited,
and not upon Her Majesty or upon the person representing
Her Majesty.
The evidence disclosed that Mr. Nader, a
Haitian, who has resided in the United States
for twelve years in Brooklyn, works in a parking
lot during the day and sells jewelry on the side
in the evenings and on weekends. His wife
works as a cashier in a New York hospital so
that no one is in their home during the daytime.
He buys his jewelry from various wholesalers
and sells mostly to persons who are referred to
him by other customers. He will then call on
these potential purchasers in the evenings to sell
or deliver jewelry to them. He has no store or
place of business and his stock was not insured
as, although he had made inquiries, it appeared
that the premiums would be prohibitively high.
For safety, he always carried his suitcase of
jewelry with him wherever he went as he was
afraid to leave it alone in his house since there
have been many break-ins and thefts in the area.
Not long before his visit to Canada, according
to his evidence, he found a set of brass knuckles
at the back of his house when he was putting
out the garbage and he put them in his pocket
thinking they might be useful for his protection.
Apparently, it never occurred to him to rent a
bank deposit box to keep his jewelry in and
perhaps this would in any event have been
inconvenient since most of his business was
done in the evenings and on weekends. In any
event, on several previous trips to Canada
which he made about once a year with his wife
and children in the summer in connection with
an annual pilgrimage to Notre Dame du Cap
near Trois-Rivières he had always brought his
suitcase of jewelry with him. He had always
indicated to the customs officer that he had
nothing but his personal effects and had never
been searched nor encountered any trouble
before. On such occasions he stayed with vari
ous friends, other former Haitians who testified
that he had never shown them this jewelry or
made any attempt to sell any of it to them, and
both he and his wife swore that he had never
made any sales in Canada. He did have some
Canadian customers who bought from him in
New York when on visits there. This trip on
December 10, 1971 was the first time he had
come to Canada without his wife and the first
time he had come in winter. A friend of his,
Germain Bruneau, also a Haitian who has lived
in the United States since 1969 and is regularly
employed there, came with him on this trip as
he had never been to Canada before and had
indicated he would like to come along some
time when Nader was coming. Nader stated that
he had been working very hard and was tired
and felt that a long weekend in Montreal with
friends would be restful. Another friend in New
York whose wife and child were living in Mont-
real asked him to bring along some articles for
them which he agreed to do. This consisted of
some clothing for the baby, some baby food, a
record, a child's coat and some boots for the
wife. He had these in the trunk of his car. The
suitcase of jewelry was on the back seat and
this was apparently the only suitcase he had but
he had some clothing and shirts in garment bags,
one suit being hung on a hook inside the rear
door and the others lying folded across the back
seat. His friend Bruneau put his suitcase on the
floor of the car on the passenger's side. He
testified that the folded garment bags on the
back seat did not cover the suitcase of jewelry
but that the suit hanging on the back door might
partially have obstructed the view of it.
It was about 3.30 in the afternoon when they
reached the customs office and at the first stop
after showing their identification they were
asked what was in the car and did they have any
gifts. Nader replied that they had personal
effects only and some commissions by which he
apparently meant the articles he was bringing to
his friend's wife. There is some conflict in evi
dence as to whether he said this at the first stop
or whether he only mentioned the commissions
when the customs officer at the second stop
commenced to examine his car. The customs
officers also insist that the question they asked
which was the customary one was whether he
had anything other than personal clothing.
Nader insists that the term he used was personal
effects and that he considers that the jewelry
was part of his personal effects. In any event
they were then told to proceed to Lane 2 which
is the lane for cars driving through and only
requiring a superficial examination unlike Lane
3 which is for cars of Canadians returning to
Canada with something to declare, which cars
are pulled to one side and examined. In any
event, the customs officer was apparently not
immediately available and after waiting some
five minutes he pulled his car to the side and
went into the Customs House. He got the atten
tion of an officer who came out and as the car
was now in the section where cars are examined
more closely, was asked to open the trunk.
There is some slight conflict in evidence as to
exactly what happened then, with Customs Offi
cer Lavoie indicating that Nader made no men
tion of having any commissions until he ques
tioned him in the office subsequently after the
jewelry was found. Nader claims that before
opening the trunk he took the suitcase in his
hand off the back seat and showed it to the
customs officer after he had looked at the
articles in the trunk. When he was asked to
open it disclosing the jewelry he was then taken
into the office, searched, disclosing the pres
ence of the brass knuckles and some other
jewelry in one of his pockets which he states
was some broken jewelry that a customer had
given him to have repaired and which he kept in
his pocket so as not to mix it in with the jewelry
in the suitcase. The customs officer states that
the suitcase was under the clothes in the plastic
bag in the back seat and not in Nader's hand
and that he had asked him to take it out to
examine it. Nader insists that before opening
the suitcase he had told the customs officer it
contained his personal effects.
The plaintiff, Nader, contends that he was
completely innocent of any intention of smug
gling the jewelry into Canada or of disposing of
it there but was merely carrying it along with
him as was his practice for safe keeping. He
stated that the jewelry prices are higher in the
United States than in Canada and that there
would be no point in attempting to make sales in
Canada in any event and he had never made any
such sales. There is certainly nothing in the
evidence to indicate that he had ever done so in
the past or intended to do so on this occasion,
although his reason for making a trip to Canada
shortly before the Christmas season when jew
elry sales would normally be at their peak,
accompanied by a friend instead of by his wife
as usual when he had never made such a trip at
this season of the year before, hardly seems a
strong one as a three day trip from New York to
Montreal by car in winter would hardly seem to
be the best way of getting a rest. In any event I
find it hard to believe that a businessman who
had been selling jewelry in the New York area
as a part-time occupation for some years and
had at least within the last few years obtained a
proper licence to do so, who kept proper books
and accounting records in connection therewith
and who bought this jewelry, largely of Italian
origin, from wholesalers and importers in New
York, would not be sufficiently conversant with
customs procedures as to believe that he could
legally bring a suitcase containing a substantial
quantity of such jewelry into Canada, free of
duty and without declaring same, even if he had
no intent of selling same in Canada. I also find it
hard to believe that a businessman could consid
er a suitcase of jewelry, constituting his stock-
in-trade, as personal effects. I do not consider
on the evidence before me that the goods were
hidden or concealed in any way in the car and it
may well be that there was an absence of any
mens rea to smuggle the goods into Canada so
that his acquittal on the criminal charge laid
against him under section 192 of the Act
appears to have been quite proper. This does
not mean, however, as plaintiff contends, that
the goods and car were not subject to seizure.
In interpreting the Act one must look at all of
the provisions of it and it is clear that certain
other sections of the Act, such as those cited
above, were infringed by plaintiff. He himself
admits being aware that the goods being brought
into Canada by him for a friend as gifts to the
friend's wife could not be properly imported by
him and he was prepared to pay whatever duty
was necessary on same. He admits that on pre
vious occasions he had done several similar
messages. He certainly failed to make a report
in writing of all the goods in his charge or
custody or in the vehicle as required by section
18(b) of the Act leaving them subject to forfeit
ure under section 181 and the car under section
183(1). He certainly had goods in his possession
unlawfully imported into Canada without lawful
excuse within the meaning of section 205(1).
His reason for bringing the jewelry because of
his fear that it would be stolen if left in his
home, while it may be reasonable justification in
his mind, cannot be construed as lawful excuse
for the illegal importation of same. He certainly
had goods with respect to which an attempt was
made to violate the provisions of the Act thus
rendering them subject to forfeiture under sec
tion 231(1).
Plaintiff's contention that having confined
itself to the terms of section 192(1)(a) of the
Act in its notice of seizure of April 26, 1972,
defendant cannot now avail itself of the other
provisions of the Act was categorically disposed
of in the case of The King v. Bureau [1949]
S.C.R. 368. It is true that in that case the
smuggling was more apparent since the respond
ent, after merely declaring that he had a gun,
was found to have a very large quantity of
cigarettes in the car which he was importing into
Canada at a time when a special permit was
required to import same and had no reasonable
excuse or justification for so doing. It is also
true that in that case the matter was referred to
the Court by the Minister to confirm the con-
testation in accordance with the provisions of
section 176 of the Act as it existed at that time
and that in deciding the case the Court made
reference to section 177 of the Act giving it
wide powers to decide upon the papers and
evidence referred to it and any further evidence
which might be produced and to decide accord
ing to the right of the matter, but these sections
are identical to the present sections 165 and
166(1) of the Act which read as follows:
165. If the owner or claimant of the thing seized or
detained, or the person alleged to have incurred the penalty,
within thirty days after being notified of the Minister's
decision, gives him notice in writing that such decision will
not be accepted, the Minister may refer the matter to the
court.
166. (1) On any reference of any such matter by the
Minister to the court, the court shall hear and consider the
matter upon the papers and evidence referred and upon any
further evidence which, under the direction of the court, the
owner or claimant of the thing seized or detained, or the
person alleged to have incurred the penalty, or the Crown,
produces, and the court shall decide according to the right of
the matter.
The fact that plaintiff, instead of giving the
Minister notice within thirty days that his deci
sion of July 31, 1972 would not be accepted, in
accordance with the procedure set out in section
165, thereby giving the Minister the opportunity
to refer the matter to the Court should he
choose to do so, decided instead merely to bring
direct action against defendant for the return of
the merchandise or payment of the value there
of as fixed by the Minister does not in my view
affect the right of the Court to inquire into the
matter fully under section 166(1) without being
limited to consideration only of the section of
the Act by virtue of which the seizure was
made. Once the matter has been referred to the
Court whether by the Minister or, as in the
present case, by the plaintiff himself, the
Court's right to go into the matter fully should
not be restricted. I do not believe, therefore,
that the Bureau case (supra) can be distin
guished from the present one. In that case, after
referring to the various sections of the Act
which respondent had infringed in addition to
section 217(3) after his acquittal on a charge
made under that section, Chief Justice Rinfret
stated at pages 377-78:
Referring again to subsection (o) of section 2, the words
"seized and forfeited", "liable to forfeiture" or "subject to
forfeiture", or any other expression which might of itself
imply that some act subsequent to the commission of the
offence is necessary to work the forfeiture, shall not be
construed as rendering any such subsequent act necessary,
but the forfeiture shall accrue at the time and by the
commission of the offence, in respect of which the penalty
or forfeiture is imposed. Therefore, in acting as he did, the
respondent made himself liable to the seizure and forfeiture
of the cigarettes and the automobile, even if he had not
subsequently got beyond the Customs Office in possession
of these goods.
We are not concerned, therefore, with the necessity of
inquiring whether what the respondent did really comes
under the definition of "smuggle", because the contraven
tion of the several sections to which I have referred was
sufficient to warrant the seizure of the cigarettes and the
automobile and their forfeiture. By virtue of subsection (o)
of section (2)—"the forfeiture shall accrue at the time and
by the commission of the offence"—there is no necessity of
any subsequent act on the part of the respondent. Such
subsequent act became unnecessary and the forfeiture
accrued, even in the absence of such subsequent act, to wit:
although he did not actually go beyond the Custom Office
with the cigarettes in his possession.
And again at pages 378-79:
Nor, with respect, do I agree with the learned President
([1948] Ex.C.R. 257) that in the Exchequer Court of Canada
the case had to be decided exclusively on the reasons given
by the Minister when he ordered the seizure and forfeiture
of the cigarettes and automobile. Under Section 177, dealing
with the reference by the Minister to the Court, the Court is
directed to hear and consider such matter upon the papers
and evidence referred and upon any further evidence which,
under the direction of the Court, the owner or claimant of
the thing seized or detained, or the person alleged to have
incurred the penalty, or the Crown, produces, "and the court
shall decide according to the right of the matter". In my
opinion, that section authorizes the Exchequer Court to
explore the whole subject matter and the circumstances
referred to it—not to say anything of the fact that, in the
present case, that is precisely what was done in the evidence
submitted to that Court, to which the respondent made no
objection. In the circumstances, it was fully within the
power of the Exchequer Court to declare the seizure and
forfeiture valid upon all the contraventions of the Act which
were allegedly proven in the case.
Justice Kellock had this to say at pages 383-84:
The learned trial judge held that the respondent had not
smuggled the cigarettes into Canada and ordered the release
of the goods and car. He refused to entertain the contention
of the Crown that although the evidence of the offence of
smuggling was not established, nevertheless if the evidence
established an infraction of any other statutory provision,
the Crown could support the seizure under the notice given.
The learned trial judge also held against the contention of
the respondent that because of his acquittal upon the charge
under section 217(3), it was, as between the respondent and
the Crown chose jugée that the cigarettes were not "unlaw-
fully imported" and therefore the seizure could not be
maintained.
Dealing with the last point first, while it might be contend
ed with considerable force that an acquittal under section
217(3) would preclude a subsequent finding that the ciga
rettes had been "smuggled" into Canada within the meaning
of section 203, I think, for reasons to be given, that the
Crown is not thereby precluded from justifying the seizure
under other provisions of the statute.
Justice Estey, in reference to sections 174, 176
and 177 (now sections 163, 165 and 166(1)) has
this to say at page 391:
It is therefore clear that these sections do not direct that
the reference shall be merely a review of the Minister's
reasons nor do they contemplate that if he has based his
decision upon a particular section or provision in the statute
that it must be either affirmed, varied or reversed upon that
same basis. Parliament here provides for a disposition of the
matter referred to the Court upon its merits. It contemplates
in the Exchequer Court a trial de novo "upon any further
evidence which, under the direction of the court" (sec. 177)
either party may produce and in this regard the concluding
words are of particular significance, "and the court shall
decide according to the right of the matter," (sec. 177).
I find, therefore, that on the facts of the
present case, the merchandise in question and
the car in which it was carried were properly
subject to forfeiture. In confirming this decision
the Minister does not appear to have acted
under section 205(1) in which event the goods
in question would be seized "without power of
remission" nor to have availed himself of the
provisions of section 204(2) which reads as
follows:
204. (2) Every one is guilty of an indictable offence and
liable to imprisonment for ten years, who while carrying
offensive weapons is found with any goods liable to seizure
or forfeiture under this Act or any law relating to the
customs, knowing such goods to be so liable.
despite evidence adduced as to the presence of
the brass knuckles found in Nader's pocket.
Instead, he has taken the more moderate posi
tion provided for in section 163(1) of the Act by
setting out in his notice of July 31, 1972 the
terms upon which the merchandise seized or
detained may be released, undertaking to do so
on payment of a deposit of $9,328.51 which he
fixes as the value of the merchandise, which
deposit will then be confiscated. During the
course of plaintiff's evidence he did question
this amount stating that it must be a retail valua
tion since he would not have paid more than
approximately $4,000 for the jewelry seized. I
do not consider that this unsupported evidence,
however, is sufficient to disturb the valuation
fixed by the Minister and, in fact, the provisions
of section 164 state categorically that if notice
is not given in writing to the Minister within
thirty days that his decision will not be accept
ed, the decision becomes final. Plaintiff failed to
do this although he did give the earlier thirty
day notice in answer to the formal notification
of seizure given under section 161. In any
event, the question of the amount to be paid in
order for plaintiff to redeem the merchandise
was not an issue raised before me in the
pleadings.
Plaintiff's action is therefore dismissed, with
costs.
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.