Canada: The CBSA (As Administrator Of Laws) Must Follow CITT Decisions (Subject To Limited Exceptions)

Last Updated: November 2 2016
Article by Cyndee Todgham Cherniak

This case is a must-read for all customs and trade lawyers.  This case is a must-read by other administrative lawyers who appear before quasi-judicial tribunals. The general administrative law rules for law enforcers and tribunals have been clarified in simple, understandable terms. May there be greater certainty, greater predictability and finality as a result of this important case.

On October 21, 2016, Justice David Stratas of Canada's Federal Court released a game-changing customs decision/administrative law, which is Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257 (the "Bri-Chem Decision – FCA").  The Federal Court of Appeal has spoken.  The Canada Border Services Agency ("CBSA") is an "administrator" of Canada's border laws.  The Canadian International Trade Tribunal ("CITT") is a a quasi-judicial tribunal that has been granted the powers of a superior court of record.  The CBSA must follow the decisions of the CITT and can no longer ignore decisions it does not agree with (subject to general rules set out below).

I will put money on an appeal of the Bri-Chem Decision-FCA to the Supreme Court of Canada.  As a result, I expect more significant developments in Canada's customs and trade laws regimes to be forthcoming.  But, until then, the Bri-Chem Decision-FCA is a significant decision that will be quoted often by counsel for importers who are the subject of CBSA enforcement actions.  It will also be quoted by lawyers who regularly appear before other tribunals.

Before I discuss the decision itself, I would like to say something about Justice Stratas.  I worked with Justice Stratas at Heenan Blaikie before he was appointed to the bench. He has proved himself to be a great appointment to the Federal Court of Appeal (and I have no cases pending before him now – just to be clear).  He sits on many judicial reviews of CITT decisions (customs and antidumping injury decisions).  His judgments are understandable and one often nods as his decisions are read.  This decision should be taken seriously because it was written by Justice Stratas.  As a result, his Bri-Chem Decision-FCA should be given great weight.

Justice Stratas made the following important points in his decision, which are, for many purposes, general rules to be followed by tribunals and administrators:

Rules for Tribunals

  1. Tribunals and administrators are both public bodies established by legislation. Both wield public power and both must obey all relevant legislation, often the same legislation. They are independent from each other. But they are in a hierarchical relationship. Tribunals pass judgment on the acts of administrators;
  2. While tribunals should try to follow their earlier decisions, they are not bound by them;
  3. It is possible for one tribunal panel to disagree with another and still act reasonably – however, while it is true that later tribunal panels are not bound by the decisions of earlier tribunal panels, it is equally true that later panels should not depart from the decisions of earlier panels unless there is good reason;
  4. As long as an administrator is acting bona fide and in accordance with its legislative mandate, an administrator can assert—where principled and warranted—that an earlier tribunal decision on its facts does not apply in a matter that has different facts.
  5. A tribunal is constrained by any rulings and guidance given by courts that govern the facts and issues in the case;
  6. Parliament—with a view to furthering efficient and sound management over an area of administration—has passed a law empowering a tribunal to decide certain issues efficiently and once and for all;
  7. Certainty, predictability and finality matter;
  8. Allowing tribunal panels to disagree with each other without any limitation tears against the need for a good measure of certainty, predictability and finality.

Rules for Administrators

  1. An administrator whose actions are regulated by a tribunal (like the CBSA whose decisions are regulated by the CITT) must follow tribunal decisions.
  2. Tribunals bind those who are subject to their jurisdiction, including administrators, subject to any later orders by reviewing courts.
  3. Certainty, predictability and finality matter;
  4. In pursuit of its legislative mandate, an administrator can sometimes distinguish an earlier tribunal decision on its facts and act accordingly;
  5. In certain circumstances, the administrator should be allowed to act upon its view of the matter and, when challenged, should be allowed to raise with the tribunal the flaw it sees;
  6. An administrator can act or take a position against an earlier tribunal decision only if it is satisfied it is acting bona fide in accordance with the terms and purposes of its legislative mandate and only if a particular threshold has been crossed. This threshold should be shaped by two sets of clashing principles (1) the principles of certainty, predictability, finality and tribunal pre-eminence and (2) ensuring that potentially meritorious challenges of arguably wrong decisions can go forward.

What Is The Threshold?

Justice Stratas articulates his answer to this important question as follows:

"In an administrative regime like the one before us, the administrator must be able to identify and articulate with good reasons one or more specific elements in the tribunal's earlier decision that, in the administrator's bona fide and informed view, is likely wrong. The flaw must have significance based on all of the circumstances known to the administrator, including the probable impact of the flaw on future cases and the prejudice that will be caused to the administrator's mandate, the parties it regulates, or both.

This is something far removed from an administrator putting essentially the same facts, the same law and the same arguments to a tribunal on the off-chance it might decide differently. Tribunal proceedings are not a game of roulette where a player, having lost, can just hope for better luck and try again.

When the administrator tries to persuade the tribunal that its earlier decision should no longer be followed, the administrator must address at least the matters discussed above, offering submissions that are not simply a rerun. They must go further than just a modest modifying or small supplementing of the earlier submissions. The tribunal may then decide whether its earlier decision remains good law after considering the evidence before it, the terms and purposes of the legislation, and any other legal standards that properly bear on its decision."

Why is the Bri-Chem Decision-FCA important?

The Bri-Chem Decision-FCA is important in respect of matters within the mandate of the CITT AND other administrative/quasi-judicial tribunals at the federal and provincial levels.  This may be a customs case, but it will be cited in matters before other administrative tribunals regarding actions of other administrators.  Customs lawyers can rejoice because customs law will influence other court cases – this is not a common occurrence.

Even before the CITT, the Bri-Chem Decision-FCA will be relevant in antidumping appeal proceedings, government procurement bid challenge proceedings and excise tax proceedings.  The importance of the general rules is applicable beyond customs decisions and the specific facts of the underlying CITT cases discussed therein. I have not even covered the facts underlying the Bri-Chem Decision-FCA because they will only be a footnote in the future.

The CBSA is an administrator of many border laws beyond just the Customs Act, Customs Tariff and Special Import Measures Act.  But, there are many other administrators of laws who must read this decision and follow this decision. Unless and until the Bri-Chem Decision-FCA is appealed to the Supreme Court of Canada or another case that follows the Bri-Chem Decision – FCA is considered by the Supreme Court of Canada, this is precedent.

This Canadian Federal Court of Appeal decision may even have relevance in other jurisdictions.  It is that significant.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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