ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CR-15-90000050-00MO
DATE: 20150915
BETWEEN:
HER MAJESTY THE QUEEN
Respondent
– and –
DUFORE TECHNOLOGY CORPORATION
Applicant
M.J. Sims, for the Crown
F. Ferri, for the Applicant
HEARD: June 30, 2015
RULING
B. P. O’Marra, J.
[1] Dufore Techonology seeks an order pursuant to s. 24(1) of the Charter for the return of property seized by Canada Border Services Agency (CBSA) on October 22 and December 12, 2014. The respondent submits that the matter should be dealt with in the Federal Court.
[2] The applicant filed an affidavit in support of the application stating that the goods were legitimately and properly imported solely for the purpose of resale as a non-drug product.
ANALYSIS THE ISSUE
[3] The central issue is whether the essential nature of the claim relates to an interpretation of the Customs Act of Canada, R.S.C. 1985, c. 1 (2nd Supp.). If it is, should the matter be dealt with in the Superior Court or in the Federal Court?
THE FACTS
[4] On October 22, 2014, the CBSA seized 40 drums of Phenacetin that the applicant attempted to import into Canada. On November 21, 2014, a letter was sent to CBSA notifying them of the applicant’s intention to appeal the decision to detain the goods. By letter dated December 2, 2014, Health Canada considered the information provided by the applicant and maintained its position that Phenacetin meets the definition of a drug under the Food and Drugs Act (FDA). That was contrary to the applicant’s position that the goods detained were not drugs or controlled substances. On December 12, 2014, the CBSA seized three barrels of Lidocaine and three barrels of Benzocaine that the applicant attempted to import into Canada. This application was filed on March 14, 2015.
ANALYSIS
[5] Both the Superior Court and the Federal Court have jurisdiction over a common law action in detinue against the federal crown. A motion judge has the discretion to determine the preferred forum. See R. v. Zolotow, 2008 ONCA 163 at para. 5, Courts of Justice Act, R.S.O. 1990, c. 43, s.106.
[6] The motion judge in Zolotow, [2007] O.J. No. 1882 (S.C.) at paras. 15-19 set out the relevant test for determining whether the Superior Court should exercise its discretion to defer jurisdiction to the Federal Court. The court held that the Superior Court should defer jurisdiction to the Federal Court where a federal statute provides a comprehensive mechanism for review of actions taken pursuant to its provisions:
15 In determining whether or not a court should defer jurisdiction to a tribunal created as part of a comprehensive scheme, the court should consider the essential nature of the claim: Pileggi, supra at para. 46. In this case, the essential nature of the claim is an appeal of a decision under the Customs Act to seize goods.
16 Where a statute provides a comprehensive code for challenging actions under its provisions and the Federal Court is an effective and appropriate forum, the provincial court should decline its jurisdiction to hear the case: In Reza v. Canada, 1994 91 (SCC), [1994] 2 S.C.R. 394 at para. 21, Justice Abella pointed out in her dissent at the Ontario Court of Appeal, 1992 2835 (ON CA), [1992] O.J. No. 2300, adopted subsequently by the Supreme Court, failing to decline to exercise jurisdiction raises concerns over forum-shopping, inconsistency and multiplicity of proceedings. While this principle was established in the context of immigration, it is equally applicable to the customs context. In Neles Controls Ltd. v. Canada, [2002] F.C.J. No. 413 (C.A.), leave to appeal to SCC refused, [2002] S.C.C.A. No. 207, the court considered statutory scheme in place and concluded that the Act occupies the whole field of relief available to importers whose goods are subject to customs duties.
17 Likewise, the Customs Act provides a comprehensive scheme for review of a seizure under the Act. Under section 123, a seizure is final and not subject to review except as provided for by sections 127.1 and 129 of the Act. Similar provisions have been held to be essentially equivalent to a privative clause: Kearns and McMurchy Inc. v. Canada, [2003] F.C.J. No. 1043 (T.D.). Under section 127.1, the Minister can cancel a seizure within 30 days after the seizure. An individual whose goods were seized can request a decision by the Minister within 90 days after the seizure or service of a notice. Section 131(1) makes it mandatory for the Minister to provide reasons for his decision. According to section 131(3) of the Act, that decision is subject to judicial review only to the extent and in the manner provided for by section 135(1). Section 135(1) provides that a person who requested a decision under section 131 has 90 days after being notified of that decision to appeal the decision by way of an action to the Federal Court.
18 Given that there is a comprehensive mechanism in place to which Mr. Zolotow had recourse if he believed his property was improperly seized, and that the Act provides for a partial privative clause to shield the decision of a Minister from review other than by appeal to the Federal Court, it is appropriate for the court to refuse to exercise its jurisdiction in this case.
19 In reaching this conclusion, I have considered two arguments made by Mr. Zolotow that suggest that while there was a review process in place, it is not applicable to his claim. The first argument is that the seizure was made illegally and is therefore not covered by the legislative scheme. The second argument is that there is no evidence establishing that the property was in fact seized under the Act.
[7] The Court of Appeal in Zolotow at paras. 9 and 10 found that the motions judge correctly recognized that:
“the determination of the pivotal issue of jurisdiction of the Customs Act – regardless of whether or not it is held that the Customs Act applies – will involve some examination of the provisions of the Act and related jurisprudence.”
[8] The Court of Appeal went on to indicate that the Federal Court has more experience than the Superior Court in matters relating to the Customs Act and related issues. In the circumstances it was open to the motion judge to exercise his discretion to stay the action on the basis that the Federal Court was the preferred jurisdiction to hear the case.
CONCLUSION
[9] Whether the detention of the goods as a result of Health Canada’s recommendation constitutes a seizure under the Customs Act requires interpretation of the relevant statutory provisions and applicable jurisprudence. The essential nature of the claim by the applicant appears to be an appeal of the decision under the Customs Act to seize the goods. In my view it is preferable that the matter be dealt with in the Federal Court.
RESULT
[10] Since this is an issue of concurrent jurisdiction and not a disposition on the merits, the appropriate order is for a stay of this application.
B.P. O’Marra, J.
Released: September 15, 2015
COURT FILE NO.: CR-15-90000050-00MO
DATE: 20150915
ONTARIO
SUPERIOR COURT OF JUSTICE
HER MAJESTY THE QUEEN
Respondent
– and –
DUFORE TECHNOLOGY CORPORATION
Applicant
RULING
B. P. O’Marra, J.
Released: September 15, 2015