The Federal Court of Appeal has ruled that administrative bodies must abide by the decisions of tribunals that regulate them unless certain exceptions apply.
In 2015, the CITT found that the Canada Border Services Agency, which oversees the tariff regime, had committed an abuse of process for failing to apply an earlier decision, Frito-Lay, to three separate instances of importers who found themselves in the same position.
“After the release of Frito-Lay and following the discontinuance of the appeal from it, the CBSA took administrative positions contrary to it without explanation, justification or action of the sort required,” Justice David Stratas wrote in the Federal Court of Appeal decision.
The court upheld the tribunal’s finding of an abuse of process, saying the CBSA failed to argue what might be wrong in the Frito-Lay and effectively re-litigated issues the tribunal had already ruled on in the hope of a different outcome.
“Tribunal proceedings are not a game of roulette where a player, having lost, can just hope for better luck and try again,” Stratas wrote.
He added that administrators must “go further than just a modest modifying or small supplementing of earlier submissions.”
Lawyers say the decision provides a helpful framework that sets out when administrators are required to comply with earlier rulings, and the limited basis upon which those decisions can be revisited.
“It provides a nice road map as to the principles to be applied as to when it’s appropriate for an administrator to attempt to re-litigate the issues before a tribunal that have been previously decided,” says Christopher Wirth, a partner with Keel Cottrelle LLP. Wirth was not involved in the case.
The ruling concerned three CITT decisions the government appealed and the Federal Court of Appeal heard together. The two other decisions were Ever Green Ecological Services Inc. and Southern Pacific Resources Corp.
In all three cases, importers brought goods from the United States into Canada under a tariff treatment called most favoured nation.
The importers later found their tariff classifications were incorrect, filed a correction and notified the CBSA of the change. They needed their goods to be changed from MFN to NAFTA, as they would otherwise have to pay duty.
In all three decisions, the CITT “upheld the ability of importers to correct certain customs declarations in order to obtain more favourable treatment,” rejecting submissions by the CBSA, which argued that the MFN tariff treatment declaration on the goods could be considered correct and, therefore, should not be changed.
In its appeal of the tribunal’s decision, the federal government — acting on behalf of the CBSA — argued that the abuse of process finding is inconsistent with the legal principle that one panel of an administrative tribunal does not bind others.
Stratas, however, said that while tribunals are not bound by earlier decisions, they should try to follow them unless they have good reason not to.
The court laid out two exceptions for when earlier tribunal decisions should not be followed.
The first is whether an administrator can show that the facts of their case are different and that the earlier decision, therefore, would not apply.
The second exception is if an administrator can show that there is a “well-founded, bona fide concern that the earlier decision is flawed and should not be followed.”
Patrizia Giolti, a spokeswoman for the CBSA, said the government is reviewing the decision.
“It would be premature at this point to say whether leave to appeal will be sought from the Supreme Court of Canada,” she said in an email.