A recent decision by the Canadian Federal Court of Appeal is being regarded by many experts to be a “game changer” in terms of clearly establishing the principle that as a front-line “administrator” of Canada’s border laws, the Canada Border Services Agency (CBSA) is legally bound to follow decisions of the Canadian International Trade Tribunal (CITT) rather than, as had often been the CBSA’s practice in the past, simply ignoring the precedential value of rulings that it disagrees with.
In Canada (Attorney General) v. Bri-Chem Supply Ltd., 2016 FCA 257, Justice David Stratas of Canada’s Federal Court upheld an earlier decision made by the CITT in three concurrent cases referred to as the “Bri-Chem trilogy” concerning a specific interpretation of the Customs Act dealing with the limitation period for claims of tariff relief under NAFTA that give rise to a refund (this aspect of the decision will be covered in another post).
The issue in question had actually been conclusively determined already in CITT Appeal No. AP-2010-002, Frito-Lay Canada, Inc. v. President of the Canada Border Services Agency, but as the CBSA believed that case hadn’t been correctly decided, it continued to apply the law as it had before the CITT ruled on Frito-Lay and then sought to re-litigate the matter before the Tribunal on virtually the same facts; not against Frito-Lay Canada Inc. (where it had abandoned the appeal process) however, but against Bri-Chem Supply Ltd. The Tribunal found the attempted retrying of the Frito-Lay case to be an abuse of process and further noted that in doing so, the CBSA had engaged in an approach “identical to the course of action” that it pursued in the former matter, a strategy the CITT had derisively characterized at the time as having gratuitously taken the taxpayer on “an administrative ride”.
The gist of the CBSA’s argument in this regard was that decisions of an administrative tribunal like the CITT were specifically limited to the appeals before it and not subject to the constraints of precedent to the same extent as courts. As such, it contended that CITT decisions didn’t bind the CBSA in disputes with other importers that raised the exact same issue. By the same token, it also maintained that an abuse of process in re-litigating an issue couldn’t exist because, in essence, there is no legal precedent to be followed.
Rejecting this argument, Justice Stratas explained that the principle of determining points in litigation according to precedent (stare decisis) operates in a “nuanced” way in the administrative setting: panels are not bound by previous decisions, but in the interests of finality, certainty and predictability, “later panels should not depart from the decisions of earlier panels unless there is good reason.”
According to Justice Stratas, from the point of view of an administrator such as the CBSA, the decisions of those who sit in the higher echelons of the administrative hierarchy should generally be respected, but can be challenged in some circumstances. In this regard, “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.”
“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,” Stratas stated.