Date: 20040302
Docket: T-1518-03
Citation: 2004 FC 309
Ottawa, Ontario, this 2nd day of March, 2004
PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE
BETWEEN:
THE BRICK WAREHOUSE CORPORATION
Plaintiff
- and -
MINISTER OF NATIONAL REVENUE
Defendant
REASONS FOR ORDER AND ORDER
O'KEEFE J.
[1] This is a motion on behalf of The Brick Warehouse Corporation (the Aplaintiff@), filed November 12, 2003, for:
1. An order amending the statement of claim dated and filed August 20, 2003 as amended as set out in Schedule AA@ attached to the notice of motion.
2. An order extending the time for the Minister of National Revenue (the "defendant") to file an amended statement of defence within 30 days of being served with the amended statement of claim.
3. An order extending the time for the plaintiff to file a reply within 10 days of being served with the amended statement of defence.
4. An order extending the time for the plaintiff and the defendant to file an affidavit of documents within 30 days after the plaintiff has filed and served its reply upon the defendant.
5. In the alternative, if this Honourable Court does not permit the amended statement of claim to be filed, an order extending the time for the plaintiff to file its reply and affidavit of documents.
6. Such further and other relief as counsel may advise and that this Honourable Court may permit.
[2] The Minister of National Revenue issued two separate Administrative Monetary Penalty Assessments ("AMPs") against the plaintiff in May 2003, pursuant to the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.) (the "Act").
[3] The affidavit of Kathleen Rush, an adjudicator with the Canada Customs and Revenue Agency, sets out the facts giving rise to the AMPs at paragraphs 3 to 5:
3. In May of 2003, the Minister issued two separate decisions against the Plaintiff, the Brick Warehouse Corporation;
i. Decision CS-28107/427-619 - this decision was rendered on May 20, 2003 and an amended decision was rendered on May 26, 2003 ("Decision No. 1"). Attached hereto and marked as Exhibit "A" to this my affidavit are copies of the May 20, 2003 and May 26, 2003 decisions collectively referred to as Decision No. 1.
ii. Decision CS-28108/427-624 - this decision was rendered on May 14, 2003 and amended on May 26, 2003 ("Decision No. 2"). Attached hereto and marked as Exhibit "B" to this my affidavit are copies of the May 14, 2003 and May 26, 2003 decisions collectively referred to as Decision No. 2.
4. The facts giving rise to Decision No. 1 are:
i. on October 18, 2002, a driver for Melburn Truck Lines (License #R931186 Ontario) reported to the Customs office of the CCRA at Niagara Falls, Ontario. Cargo Control Number 2395155918 covering transaction number 10082002032159 was presented to Customs. Container number KNLU5111121 consisted of furniture consigned to the Plaintiff (the "Goods"). At 22:36 on October 17, 2002, the Plaintiff's custom agent, Schenker of Canada Ltd. ("Schenker") submitted a 257 RMD-ED1, for the release of the Goods.
ii. it was determined that the Plaintiff, by its duly appointed agent, Schenker, submitted a RMD-ED1, and thereby reported the Goods as arrived, before the Goods arrived via highway mode. Therefore, the Plaintiff was in violation of the authorized timeframes for reporting of goods at a land border and was in violation of section 7.1 of the Customs Act, R.S.C. 1985, c. 1 (2nd Supp.) as amended (the "Act"). As a result, a customs officer of the CCRA assessed a penalty, pursuant to section 109.1 of the Act, and issued the Plaintiff a Notice of Penalty Assessment, AMPs number 619 in the amount of $1,273.40.
iii. on November 6, 2003, the Minister received a request, pursuant to section 129 of the Act, from the Plaintiff for a decision to cancel AMPs number 619. The Plaintiff made further representations to the Minister on January 3, 2003 and March 7, 2003. In response, on May 20, 2003, the Minister rendered Decision No. 1 upholding the AMPs number 619.
iv. on May 26, 2003, the Minister rendered the amended Decision No. 1 wherein the Minister returned $273.40 to the Plaintiff and retained $1,000 as forfeit.
5. Based on my review the file involving Decision No. 2, I verily believe that the facts giving rise to Decision No. 2 are:
i. on October 19, 2002, a Melburn Truck Lines vehicle bearing Ontario licence plate #PP8732 reported to Customs at Niagara Falls, Ontario. The driver presented a cargo control document # 2395155919 for container KNLU5134580 containing goods consigned to the Plaintiff. The entry presented under this cargo control number was released as a 257-EDI on October 16, 2002. As a result, a customs officer of the CCRA assessed a penalty, pursuant to section 109.1 of the Act, and issued the Plaintiff a Notice of Penalty Assessment, AMPs number 624 in the amount of $2,724.50. The amount of AMPs number 624 was assessed on the basis of that the Plaintiff had committed a second infraction.
ii. the Minister also received a request, pursuant to section 129 of the Act, from the Plaintiff for a decision to cancel AMPs number 624. (This request was made separately from the request for a decision of the Minister to cancel AMPs number 619). In response, on May 14, 2003, the Minister rendered Decision No. 2 upholding the AMPs 624; and
iii. on May 26, 2003, the Minister rendered amended Decision No. 2 wherein the Minister returned $724.50 to the Plaintiff and retained $2,000 as forfeit.
[4] As the facts show, there were two separate decisions made by the Minister to impose penalties on the plaintiff. When the plaintiff's solicitor received instructions, the file did not contain the amended decision dated May 26, 2003 on appeal number CS-28107/4276-619, nor did it contain a copy of the decision of the Minister of National Revenue dated May 26, 2003 relating to appeal number CS-28108/4276-624 (Decision No. 2). The file did contain references to two cargo containers being involved in alleged contravention of the Act.
[5] The plaintiff's solicitor believed that Decision No. 1 related to both containers and accordingly, filed an appeal directly related to Decision No. 1. The statement of claim relating to the appeal of Decision No. 1 contained incorrect references to the container number and to the penalty number of Decision No. 2.
[6] After the limitation period contained in section 135 of the Act had expired, plaintiff's counsel discovered that the material relating to Decision No. 2 had not been included in her legal file.
[7] The plaintiff now makes a motion to amend its statement of claim to appeal Decision No. 2 in addition to Decision No. 1.
[8] Issue
Can the relief requested by the plaintiff be granted?
Analysis and Decision
[9] Should the amendments to the statement of claim be permitted pursuant to Rules 75(1), 76, 77 and 201 of the Federal Court Rules, 1998, SOR/98-106?
Rules 75(1), 76, 77 and 201 read:
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75. (1) Subject to subsection (2) and rule 76, the Court may, on motion, at any time, allow a party to amend a document, on such terms as will protect the rights of all parties.
76. With leave of the Court, an amendment may be made
(a) to correct the name of a party, if the Court is satisfied that the mistake sought to be corrected was not such as to cause a reasonable doubt as to the identity of the party, or
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75. (1) Sous réserve du paragraphe (2) et de la règle 76, la Cour peut à tout moment, sur requête, autoriser une partie à modifier un document, aux conditions qui permettent de protéger les droits de toutes les parties.
76. Un document peut être modifié pour l'un des motifs suivants avec l'autorisation de la Cour, sauf lorsqu'il en résulterait un préjudice à une partie qui ne pourrait être réparé au moyen de dépens ou par un ajournement:
a) corriger le nom d'une partie, si la Cour est convaincue qu'il s'agit d'une erreur qui ne jette pas un doute raisonnable sur l'identité de la partie;
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(b) to alter the capacity in which a party is bringing a proceeding, if the party could have commenced the proceeding in its altered capacity at the date of commencement of the proceeding,
unless to do so would result in prejudice to a party that would not be compensable by costs or an adjournment.
77. The Court may allow an amendment under rule 76 notwithstanding the expiration of a relevant period of limitation that had not expired at the date of commencement of the proceeding.
201. An amendment may be made under rule 76 notwithstanding that the effect of the amendment will be to add or substitute a new cause of action, if the new cause of action arises out of substantially the same facts as a cause of action in respect of which the party seeking the amendment has already claimed relief in the action. |
b) changer la qualité en laquelle la partie introduit l'instance, dans le cas où elle aurait pu introduire l'instance en cette nouvelle qualité à la date du début de celle-ci.
77. La Cour peut autoriser une modification en vertu de la règle 76 même si le délai de prescription est expiré, pourvu qu'il ne l'ait pas été à la date du début de l'instance.
201. Il peut être apporté aux termes de la règle 76 une modification qui aura pour effet de remplacer la cause d'action ou d'en ajouter une nouvelle, si la nouvelle cause d'action naît de faits qui sont essentiellement les mêmes que ceux sur lesquels se fonde une cause d'action pour laquelle la partie qui cherche à obtenir la modification a déjà demandé réparation dans l'action. |
[10] Subsection 135(1) of the Customs Act, supra states:
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135. (1) A person who requests a decision of the Minister under section 131 may, within ninety days after being notified of the decision, appeal the decision by way of an action in the Federal Court in which that person is the plaintiff and the Minister is the defendant. |
135. (1) Toute personne qui a demandé que soit rendue une décision en vertu de l'article 131 peut, dans les quatre-vingt-dix jours suivant la communication de cette décision, en appeler par voie d'action devant la Cour fédérale, à titre de demandeur, le ministre étant le défendeur. |
[11] A perusal of the record shows that counsel for the plaintiff only believed that Decision No. 1 was to be appealed, that is the file bearing appeal number CS-28107/4276-619, as counsel was not aware that Decision No. 2 (appeal number CS-28108/4276-624) had been made.
[12] The defendant argues that the plaintiff is improperly attempting to circumvent the limitation period provision of the Act by using the amendment rules to incorporate an "out of time" appeal into an existing statement of claim. In the defendant's view, the Rules of amendment relied on by the plaintiff are not of any assistance because Decision No. 1 and Decision No. 2 did not arise out of the same facts, therefore the motion to amend should be denied. The plaintiff's position is strongest under Rule 201, where the statement of claim could be amended to include the appeal of Decision No. 2 if the new cause of action or appeal arose out of substantially the same facts as the appeal for Decision No. 1. I do not agree that substantially the same facts gave rise to Decisions No. 1 and No. 2. The two decisions were made by two different adjudicators, two distinct and different penalties were imposed, the cargo containers had two different entry dates and two separate appeals were filed at the adjudicative level. As the plaintiff does not meet this requirement of Federal Court Rule 201, the motion to amend the statement of claim to add the appeal of Decision No. 2 is denied.
[13] The plaintiff also sought to amend the statement of claim to correct the facts alleged regarding Decision No. 1. The defendant does not oppose these amendments, which I will allow to be made. The amendments I will allow are as follows (referenced to the amended claim included as pages 6 to 8 of the plaintiff's motion record):
1. In paragraph 1, add the words "as amended dated May 26, 2003, which was received by the Plaintiff on June 6, 2003".
2. In paragraph 2 (a) in line 2 add the words "as amended on May 26, 2003"; in line 3 delete the number "624" and replace with the number "619"; and in line 4 delete the words "under convention C274" and replace with the words "pursuant to section 7.1 of the Customs Act".
3. Add paragraph 4.
4. Add the word "and" in line 2 of paragraph 8.
5. Add paragraph 12.
6. Add the words "and container KNLU5111121" to paragraph 13.
[14] The defendant shall have 20 days after service of the amended statement of claim to file any amended statement of defence.
[15] The plaintiff"s reply, if any, to the amended statement of defence shall be filed within 10 days of the service of the amended statement of defence.
[16] The parties' affidavits of documents shall be served within 30 days after the close of pleadings. The defendant shall have its costs relating to the dismissal of the motion to add the appeal of Decision No. 2 to the statement of claim. The defendant shall also have its costs of filing an amended statement of defence, which I fix at $100.
ORDER
[17] IT IS ORDERED that:
1. The plaintiff's motion to add the appeal of Decision No. 2 to the statement of claim is dismissed.
2. The amendments to the statement of claim to correct the facts relating to the appeal of Decision No. 1 are allowed as noted above in paragraph 13 of these reasons.
3. The time lines for the parties' filing of documents is extended as noted above in paragraphs 14 to 16 of these reasons.
4. The defendant shall have its costs relating to the dismissal of the motion to add the appeal of Decision No. 2 to the statement of claim. The defendant shall also have its costs of amending its statement of defence, which I fix at $100.
"John A. O'Keefe"
J.F.C.
Ottawa, Ontario
March 2, 2004
FEDERAL COURT OF CANADA
TRIAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-1518-03
STYLE OF CAUSE: THE BRICK WAREHOUSE CORPORATION
- and -
MINISTER OF NATIONAL REVENUE
PLACE OF HEARING: Edmonton, Alberta
DATE OF HEARING: Monday, December 15, 2003
REASONS FOR ORDER AND ORDER OF O'KEEFE J.
APPEARANCES:
Paulina Hiebert
FOR PLAINTIFF
Carla Lamash
FOR DEFENDANT
SOLICITORS OF RECORD:
Paulina Hiebert
Edmonton, Alberta
FOR PLAINTIFF
Department of Justice
Edmonton, Alberta
FOR DEFENDANT