Judgments

Decision Information

Decision Content

T-298-90
Distribution Canada Inc. (Applicant)
v.
Minister of National Revenue (Respondent)
INDEXED AS: DISTRIBUTION CANADA INC. v. M.N.R. (T.D.)
Trial Division, Strayer J.—Vancouver, October 23; Ottawa, November 14, 1990.
Customs and excise — Customs tariff — Application for mandamus compelling Minister to collect duty required to be paid under Tariff s. 4 — Customs officers exercising discre tion re: collection of small amounts of duty — Departmental policy not to collect duty of $1 or less — Applicant (organiza- tion of independent grocers concerned by American competi tion) lacking standing and no judicially enforceable duty — Minister not refusing to enforce Tariff, but exercising discre tion as to how Tariff enforced using limited resources.
Judicial review — Prerogative writs — Mandamus — Application for mandamus compelling Minister to strictly enforce Customs Tariff s. 4 requiring payment of duties on goods entering Canada — Departmental policy not to collect duty of $1 or less — Method of enforcement left to Minister's discretion — Minister not refusing to enforce Tariff as evi denced by existence of collection system — Acquiescence in some failures to pay duty not attracting judicial review unless consideration of totally irrelevant matters, bad faith or improper motives.
Practice — Parties — Standing — Application for man- damus compelling Minister to strictly enforce Customs Tariff s. 4 requiring payment of duty on certain goods upon entering Canada — Applicant (organization of independent grocers) lacking standing as no judicially enforceable duty — Although standing extended as to seeking declarations in non-constitu tional cases, no comparable extension as to mandamus.
This was an application for mandamus to compel the Minis ter of National Revenue to strictly enforce Customs Tariff, section 4 which provides that customs duties shall be collected on certain goods when imported into Canada. Customs officers have not been collecting duty on most groceries purchased by Canadians visiting the United States for less than 24 hours, a period for which there is no legal exemption from payment of customs duties. The applicant, an organization of independent
grocers, says that many of its members are suffering significant revenue losses because of unfair competition from American stores where prices and taxes are lower than those in Canada. The customs officers exercise a discretion as to whether to collect small amounts of duty, and it is departmental policy not to collect duty of $1 or less. Even higher amounts may be waived when other priorities dictate, i.e. when the volume of traffic is such that collection would result in unacceptable delays for travellers and traffic congestion on the American side of the border. The issues were whether the applicant had standing and whether the respondent owed a judicially enforce able duty to the applicant.
Held, the application should be dismissed.
The applicant lacked standing to seek mandamus. Although standing to seek declarations in non-constitutional cases has been extended, there has been no comparable extension of standing in respect of mandamus. Even if a more generous view of standing should be taken, there remains the core need for a judicially enforceable duty.
Sometimes judicially enforceable and non-enforceable duties are distinguished by the party to whom the duty is owed. If a public officer is statutorily obligated to do a particular thing in particular circumstances for the benefit of particular persons, then such persons can seek judicial enforcement of that duty. If the public officer has a discretion as to what he does, how he does it, or to. or for whom he does it, then there is no judicially enforeceable duty to do a particular thing at a particular time or in favour of a particular person: the remedies for non-feas- ance or misfeasance are political, not judicial. Even though Customs Tariff, section 4 provides that duties shall be levied, the respondent has a discretion as to the means of enforcing the law. That section imposes obligations not only on customs collectors, but also on those who bring dutiable goods into Canada. The Minister mast establish some credible collection system, but acquiescence in some failures to pay customs duties does not entitle the Court to intervene.
Mandamus is available in appropriate cases to require enforcement of the law, but case law has distinguished between requiring public officers to enforce the law where there has been a complete failure to do so and telling an officer how to enforce the law. The former is possible; the latter is not. The Minister has not totally refused or failed to carry out any
enforcement of the Customs Tariff. He is actively enforcing the Tariff through collections to the extent it is feasible to do so given the resources allocated by Parliament, and it is within the Minister's discretion to do so. He has considered the impact of different levels of enforcement on American tourist traffic and the impact on American border areas in respect of lineups for entry into Canada. If those considerations had been totally irrelevant to the proper administration of the Act or involved bad faith or improper motives on the part of the Minister or his staff, judicial review might have been appropriate.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
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. 6.
Customs Tariff, R.S.C., 1985, c. C-54, s. 4.
CASES JUDICIALLY CONSIDERED
APPLIED:
Rothmans of Pall Mall Canada Ltd. v. Minister of National Revenue (No. 1), [ 1976] 2 F.C. 500; (1976), 67 D.L.R. (3d) 505; [1976] CTC 339; 10 N.R. 153 (C.A.); Regina v. Comr. of Police of the Metropolis, Ex parte Blackburn (No. 3), [1973] Q.B. 241 (C.A.).
DISTINGUISHED:
Re North Vancouver (District of) et al. and National Harbours Board et al. (1978), 89 D.L.R. (3d) 704; 10 C.E.L.R. 31; 7 M.P.L.R. 151 (F.C.T.D.); Friends of the Oldman River Society v. Canada (Minister of Trans port), [1990] 2 F.C. 18; (1990), 68 D.L.R. (4th) 375 (C.A.).
CONSIDERED:
R. v. Metropolitan Police Comr., Ex parte Blackburn, [1968] 1 All E.R. 763 (C.A.).
REFERRED TO:
Minister of Justice of Canada et al. v. Borowski, [1981] 2 S.C.R. 575; (1981), 130 D.L.R. (3d) 588; [1982] 1 W.W.R. 97; 12 Sask. R. 420; 64 C.C.C. (2d) 97; 24 C.P.C. 62; 24 C.R. (3d) 352; 39 N.R. 331; Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607; (1986), 33 D.L.R. (4th) 321; [1987] 1 W.W.R. 603; 23 Admin. L.R. 197; 17 C.P.C. (2d) 289; 71 N.R. 338.
COUNSEL:
Jack N. Cram for applicant.
Gunnar O. Eggertson for respondent.
SOLICITORS:
Cram & Wicks, Vancouver, for applicant.
Deputy Attorney General of Canada for respondent.
The following are the reasons for order ren dered in English by
STRAYER J.:
Relief Requested
This is an application for the following relief:
A Writ of Mandamus or other relief in the nature thereof to compel the Respondent, MINISTER OF NATIONAL REVENUE, to comply with the provisions of Section 4 of the Customs Tariff, in respect to the collection of the duties prescribed in that act on Canadians returning to Canada with purchases of goods from the United States when they have been out of Canada for a period of less than 24 hours, and to comply with the provi sions of the Customs Act, Export Import Permits Act and the Canada U.S. Free Trade Agreement.
Facts
The applicant, Distribution Canada Inc., is a non-profit organization whose members are independent grocers, involving some 1,300 stores located in five provinces including British Columbia. It bargains on behalf of its members with grocery suppliers in order to make its mem bers more competitive with the larger grocery chains. It also lobbies governments on behalf of its members and handles various legal problems for them. This applicant replaced the original appli cants who were the owners of grocery stores. Due in part to the adverse reaction of customers of those stores resulting from the commencement of this proceeding, the individual grocers were replaced by the present applicant. The Crown agrees that if the original applicants had standing to bring this proceeding then so does Distribution Canada Inc.
The complaint of the applicant is that the Min ister of National Revenue is not strictly enforcing the customs tariff, as he is required in its view to
do by section 4 of the Customs Tariff' That section provides:
4. (I) Subject to this Act and the Customs Act, chapter C-40 of the Revised Statutes of Canada, 1970, there shall be levied, collected and paid on all goods enumerated, or referred to as not enumerated, in Schedule II, when imported into Canada or taken out of warehouse for consumption therein, the several rates of duties of customs, if any, set opposite each item or charged on goods as not enumerated, in the column of the tariff applicable to the goods, subject to the conditions specified in this section and sections 5 to 16.
In particular, it is said that no duty is being collected on the majority of grocery purchases made in the United States by Canadians going to that country for less than twenty-four hours, a period for which there is no legal exemption from payment on dutiable items. Much of the evidence concerned five particularly busy border points in British Columbia, four of which are the busiest in Canada for "small collections" (collections of duty and taxes on non-commercial imports). There was also some evidence suggesting a laxity of enforce ment at certain points on the Ontario-U.S. border as well. The applicant claims that many of its member grocers suffer a significant loss of busi ness because of what they regard as unfair compe tition from U.S. stores near the border where commodity prices and taxes are lower than those in Canada.
The respondent Minister admits that his officers exercise a discretion as to whether they bother to collect small amounts of duty, and that it is the Department's policy not to make any collection where the amount of duty owing is $1 or less. It is common ground that the policy of the Department is correctly set out in a letter of August 3, 1989 from the Minister of National Revenue, the Hon ourable Otto Jelinek, to Mr. Gerry Prins, the President of the applicant. The key paragraph states as follows:
At the outset, I should explain that it is my department's policy that Customs inspectors not refer travellers for duty
R.S.C., 1985, c. C-54.
payment on their goods when the amount owing is $1.00 or less. In addition, higher amounts may be waived when other priori ties dictate. In cases where the volume of traffic results in unacceptable delays, for example, or when interdiction activi ties are under way, it is recognized that Customs inspectors might waive assessments of $2.00, $3.00 and $4.00 or more, depending upon conditions at the time and their ability to efficiently process traffic.
In reply to this Mr. Prins sent a letter to the Minister on October 24, 1989 strongly requesting the Minister to enforce the customs tariff uniform ly. He said, inter alia,:
It is not your mandate which laws to uphold and which not. We would therefore respectfully request that you move immediately to rectify this worsening problem.
A similar request was sent on December 19, 1989. Similarly, letters were sent to the Minister by the solicitors for the applicant on December 27 and December 28, 1989 making a formal demand that the Minister "strictly enforce" the Customs Tariff
. with respect to duties and taxes chargeable to Canadians for goods imported into Canada from the United States when they have not been out of the country long enough to exempt their purchases from such duty.
The other evidence adduced by the parties does not appreciably assist me in dealing with the essen tial legal questions here, apart from showing that there are honest differences of opinion as to wheth er the customs tariff can be strictly enforced and, if so, how. Evidence presented by the applicant, while to a considerable extent anecdotal, includes statistics which it says demonstrates that at five B.C. border points duty is collected from only about twelve percent of vehicles bringing in goods subject to duty. There was also some evidence to suggest that the additional revenues that could be gained from strict enforcement would far exceed the cost of such enforcement. On the other hand, the evidence of the respondent seriously questions the validity of the applicant's statistical analysis. It suggests that in many of the instances cited in the evidence of the applicant of returning Canadians supposedly not being required to pay duty, the goods which they were importing were subject to no duty or to a negligible amount of duty. Further, the respondent's evidence suggests that strict
enforcement would be impossible or would be achieved at the cost of unacceptable lineups, great delays for travellers, and traffic congestion on the American side of the border to which there would soon be strong objection. Such obstructions at the border, it is said, would dismay and discourage U.S. tourists coming to Canada even though they would not be subject to duty, and in extreme cases could be seen to violate the right of every Canadi- an to enter Canada as guaranteed by section 6 of the 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]]. With respect to the cost of strict enforcement, it is suggested in some evidence of the respondent that the costs of such collections could exceed the revenue to be gained. Further, the respondent says that departmental resources, in terms of office and parking facilities and staff, are now stretched to the limit at busy border points. Even if strict enforcement were to yield more revenue, such revenue would not benefit the respondent's Department unless Parliament voted additional funds for customs administration: the Department of National Revenue can only spend such funds as are appropriated to it by Parliament, no matter from where those funds are generated. There is also conflicting evidence as to whether past experi ments with strict enforcement have had the effect of increasing or decreasing the lineups.
Issues
The respondent objects to the issue of man- damus on several grounds. I will deal with only two of these. It is contended that the applicant has no standing to seek mandamus and that there is no duty owed by the respondent to the applicant which is enforceable by the Court.
Conclusions
I believe that the respondent is correct in his submissions and that they are sufficient to defeat the case of the applicant.
A leading authority in this Court is that of Rothmans of Pall Mall Canada Ltd. v. Minister of National Revenue (No. 1). 2 In that case the applicants sought prohibition, mandamus, certio- rari, and an injunction to set aside a policy of the Department of National Revenue of not counting the length of a filter tip in assessing excise tax or customs duty on cigarettes on the basis of their length. The applicants, while not making ciga rettes with such tips themselves, were opposed to their competitors having the advantage of this favourable ruling with respect to the calculation of tax or duty on their products. On behalf of the Federal Court of Appeal, Le Dain J. held:
The decisions of the Supreme Court of Canada in Thorson v. Attorney General of Canada [1975] 1 S.C.R. 138, and McNeil v. Nova Scotia Board of Censors (1975) 5 N.R. 43, were urged upon us as indicating a relaxation of the requirement of locus standi. A careful reading of these decisions shows, in my respectful opinion, that the principal consideration governing them is the importance in a federal state of opportunity to challenge the constitutional validity of statutes. No such con sideration is applicable here. It was suggested that there is a comparable consideration of public policy in broad access to challenge the validity of administrative action, and this view finds some support in the recognition of a judicial discretion to permit a stranger to bring certiorari or prohibition in certain cases. The present case is not one that raises any question of the limits of statutory authority. The most that is raised is a question of administrative interpretation that the authorities are obliged to make in their application of the governing statute. Indeed, the action in this case is not of the kind that is subject to challenge by certiorari or prohibition. There is no decision here determining rights or obligations in an individual case, much less a determination of those of the appellants. See Landreville v. The Queen, [1973] F.C. 1223. There is no duty to act judicially or fairly in a procedural sense. In so far as mandamus is concerned, there is no public duty of any kind that the appellants have a right to enforce. The duty of the respondent officials under section 202 of the Excise Act is one owing to the Crown rather than the appellants. Cf. The Queen v. Lord Commissioners of the Treasury (1871-72) 7 L.R.Q.B. 387. In so far as injunction is concerned, apart from the question of whether it may lie in certain cases against servants of the Crown, there is no interference with the rights of the appellants such as would entitle them to bring it against public
2 [1976] 2 F.C. 500 (C.A.).
authorities. Cowan v. C.B.C. [1966] 2 O.R. 309. 3 [Emphasis added.]
Although since that time there have been further decisions of the Supreme Court of Canada extend ing standing to seek declarations in non-constitu tional cases where the issue was alleged conflict between the statute in question and the Canadian Bill of Rights [R.S.C. 1970, Appendix III]' or alleged failure of a Minister to comply with a federal statutes there has been no comparable extension of standing in respect of mandamus.
There was a tendency in mandamus cases for the issues of standing of the applicant, and the existence of a judicially enforceable duty, to become intermixed. But even if a more generous view of standing should be taken in the light of the widening of that concept in respect of other public law remedies, there still remains the core need for a judicially enforceable duty to be identified. Sometimes the distinction between judicially enforceable and non-enforceable duties is put in terms of the party to whom the duty is owed. It is said that if there is a "duty to the legislature" then it may be judicially enforceable, whereas if there is a "duty to the Crown" it is not enforceable. This is perhaps another way of saying that if a public officer is obliged by statute to do a particular thing in particular circumstances for the benefit of par ticular persons, then such persons can seek judicial enforcement of that duty. If on the other hand the public officer has been left a discretion as to what he does, how he does it, or to or for whom he does it, then there is no judicially enforceable duty to do a particular thing at a particular time or in favour of a particular person: if the officer is responsible to anyone, he is responsible to the political branches of government either directly or indirect ly and the remedies for non-feasance or misfeas ance are political, not judicial. Thus, in the quota tion from the Rothmans case, supra, when it is said that the duty of the respondents there was "one owing to the Crown rather than the appel-
3 Ibid, at pp. 510-511.
° Minister of Justice of Canada et al. v. Borowski, [19811 2
S.C.R. 575.
5 Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R.
607.
lants" it is recognized that the Minister of Nation al Revenue and his officials have a discretion as to the interpretation they give to "cigarettes" which, unless it can be somehow demonstrated to be inconsistent with the statute, cannot be second- guessed by the Court for the benefit of a manufac turer which suffers competitively from that interpretation.
Even though in the present case section 4 of the Customs Tariff requires that "there shall be levied, collected and paid on all goods enumerated
. the several rates of duties of customs" [Under- lining added.] I believe that the respondent has a discretion as to the means of enforcing the law. It will be seen that the obligations imposed by that section are imposed not only on the collectors of customs but also on those who bring dutiable goods into Canada on which, it is said, the appro priate duties "shall be ... paid". No doubt to respond to his obligation under section 4 the Min ister must in good faith establish some credible system of collection but if his system is not "leak- proof" or even if he acquiesces in some failures to pay customs duties, this does not entitle the Court to assume control as to how duties are to be collected.
It is true that mandamus is available in appro priate cases to require enforcement of the law. It appears to me, however, that a distinction has generally been drawn in the jurisprudence between a court requiring a public officer to enforce the law in cases where he has failed completely to do
so, on the one hand, and a court telling a public officer how to enforce the law on the other. The former is possible but the latter is not. I believe the most pertinent mandamus cases cited by the appli cant can be distinguished on this basis. In Re North Vancouver (District of) et al. and National Harbours Board et al. 6 the applicants were one hundred and forty-two residents of Deep Cove (part of Vancouver Harbour) and the adjacent municipality which is the Corporation of the Dis trict of North Vancouver. They had asked the National Harbours Board to enforce the National Harbours Board Act [R.S.C. 1970, c. N-8] and by-laws made thereunder against vessels and houseboats illegally moored in the waters of Deep Cove. In response to demands by the applicants for enforcement, the Board said that it was taking no action pending the recommendation of a commit tee of the Greater Vancouver Regional District which, it will be noted, had no direct jurisdiction or responsibility in respect of the Harbour. In granting mandamus, Collier J. of this Court said:
In my view, the Board has a public duty to administer, manage and control Vancouver harbour in accordance with s. 7 of the Act and By-law A-1. It does not have a discretion as to whether it will, or will not, perform that duty. It must perform it, otherwise the legislation and its scheme become useless. The Board has, for the most part, and within the limits of the statute and by-laws, a discretion as to how it carries out its duty. A Court can compel a body, such as the Board, to carry out its duty. It cannot direct a body, where it has a discretion in respect of mode, as to how it shall carry out the duty.?
Thus the distinction was clearly drawn between requiring the Board to take some enforcement action, which the Court could do, and telling it how it should enforce the law, which the Court could not do.
A rather similar situation existed in Friends of the Oldman River Society v. Canda (Minister of Transport) 8 where the Federal Court of Appeal
6 (1978), 89 D.L.R. (3d) 704 (F.C.T.D.).
7 Ibid, at p. 712.
8 [1990] 2 F.C. 18 (C.A.).
reversed the Trial Judge [ [ 1990] 1 F.C. 248 (T.D.)] and granted certiorari to the applicant [appellant] to quash a decision of the federal Minister of Transport granting permission under the Navigable Waters Protection Act 9 to the prov ince of Alberta to construct a dam on the Oldman River. It also granted mandamus requiring the Minister of Transport to comply with the Environ mental Assessment and Review Process Guide lines Order 10 in deciding whether to give such permission. It may be noted that the Trial Judge expressly assumed, without deciding, that the applicant, an environmental group, had standing to seek mandamus. The Court of Appeal did not expressly address questions concerned with stand ing or the availability of mandamus in such cir cumstances. It is clear, however, that the Court issued mandamus, not to tell the ministers how to carry out an environmental review but to tell them that they must conduct such a review as required by the Guidelines Order which they had failed to do up to that point.
Counsel for the applicant in the present case relied in part on the decision in R. v. Metropolitan Police Comr., Ex parte Blackburn." In this case the applicant, Mr. Blackburn, a concerned citizen, sought mandamus to require the Metropolitan Police Commissioner to enforce the anti-gambling laws. Because of great uncertainty as to the proper interpretation of those laws, the Commissioner had sent a confidential policy directive to senior offi cers of the metropolitan police to the effect that surveillance should not be carried out in gambling clubs without special approval and that such sur veillance was not justified unless there were com plaints of cheating or reason to suppose that a particular club was being frequented by criminals. The result was that big gaming clubs were allowed to carry on without interference by the police. Although this directive was withdrawn before the decision of the Court of Appeal, the Court indicat ed that it would have interfered by appropriate
R.S.C., 1985, c. N-22.
10 SOR/84-467.
" [1968] 1 All E.R. 763 (C.A.).
proceedings had the directive not been withdrawn. In particular, Lord Denning, M.R. suggested that if a chief constable were to issue a directive that there were to be no prosecutions for stealing any goods of less than £100 in value, the Court could countermand such a directive because the chief constable would be failing in his duty to enforce the law. It should be noted that what the Court of Appeal said in this case was obiter dicta because the gambling club surveillance directive had already been withdrawn. Further, all of the judges expressed doubts that the applicant had standing to obtain mandamus and clearly refrained from deciding that issue in his favour. Moreover, in a later decision in the Court of Appeal where Lord Denning, M.R. also presided, Regina v. Comr. of Police of the Metropolis, Ex parte Blackburn (No. 3) 12 the Court of Appeal refused to issue man- damus to the Metropolitan Police Commissioner requiring him to enforce the law against the publi cation and sale of pornographic material. In this case there was also a policy directive that charges should not be laid in respect of the publication and sale of such material except by express direction of the Director of Public Prosecutions. Certain enforcement action was however being taken by the police, in particular the seizure of material thought to be offensive. The seized material was submitted to the Director of Public Prosecutions for review, then either returned to the owner if thought inoffensive, or retained pursuant to a dis claimer to it granted by the owner. Failing such disclaimer, a forfeiture order might be sought in the courts. In refusing in effect to order by man- damus a general policy of prosecutions instead, Lord Denning said:
In Reg. v. Commissioner of Police of the Metropolis, Ex parte Blackburn [1968] 2 Q.B. 118, 136, 138, 148-149, we made it clear that, in the carrying out of their duty of enforcing the law, the police have a discretion with which the courts will not interfere. There might, however, be extreme cases in which he was not carrying out his duty. And then we would. I do not
12 [1973] Q.B. 241 (C.A.).
think this is a case for our interference. In the past the commissioner has done what he could under the existing system and with the available manpower. The new commissioner is doing more. He is increasing the number of the Obscene Publications Squad to 18 and he is reforming it and its adminis tration. No more can reasonably be expected." [Emphasis added.]
Consistently with these decisions, I believe the present case is not one where the Minister of National Revenue has totally refused or failed to carry out any enforcement of the Customs Tariff Instead, it is his policy and practice to enforce that Act through collections to the extent that it is feasible to do so, given the resources made avail able to him by Parliament through the funding of staff and facilities. He has also obviously taken into account the impact of different levels of enforcement on U.S. tourist traffic into Canada and the impact on U.S. border areas in respect of lineups for entry into Canada. The law is clear that, if these considerations were completely irrele vant to the proper administration of the Act or if they involved bad faith or improper motives on the part of the Minister and his Department, they might invite some sort of judicial review. But I can see nothing of the sort in the explanations given by the Minister for his policy of not collecting every possible dollar in duty from those visiting the United States for less than twenty-four hours. The point was well put by Lord Denning, M.R., in somewhat Churchillian prose in the second Black- burn case as follows:
If the people of this country want pornography to be stamped out, the legislature must amend the Obscene Publications Act 1959 so as to make it strike unmistakeably at pornography: and it must define the powers and duties of the police so as to enable them to take effective measures for the purpose. The police, may well say to Parliament: "Give us the tools and we will finish the job." But, without efficient tools, they cannot be expected to stamp it out. Mr. Blackburn has served a useful purpose in drawing the matter to our attention: but I do not think it is a case for mandamus. I would, therefore, dismiss the appeal. ' 4
13 Ibid, at p. 254.
14 Ibid, at p. 254.
I therefore conclude that the Minister is actively enforcing the Customs Tariff and that it is within his discretion as to how this is done. There is nothing to suggest that that discretion is being exercised other than in good faith and for proper motives. The Court cannot direct the Minister by means of mandamus as to how he is to conduct enforcement. In the exercise of his discretion the Minister is responsible to the political branches of government and is not answerable to the applicant or the Court.
The application is therefore dismissed.
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