Judgments

[1995] 1 F.C. 22

T-2834-93

785072 Ontario Inc. carrying on business as Economy Car and Truck Rental (Applicant)

v.

The Minister of Revenue, Customs & Excise (Respondent)

Indexed as: 785072 Ontario Inc. v. M.N.R., Customs and Excise (T.D.)

Trial Division, Rothstein J.—Toronto, June 1; Ottawa, June 30; Toronto, July 7, 1994.

Customs and excise — Excise Act — Applications to add as applicant owner of vehicle seized pursuant to Excise Act, for declaration of interest of lessee — Economy leasing vehicle from Birchcliff under long-term lease with option to purchase — Excise Act, s. 164 allowing anyone with interest in seized property to apply within 30 days of seizure for order declaring interest — Economy applying for declaration of interest, filing statement of claim seeking return of vehicle within 30 days — Owner not notified of seizure until after expiration of limitation period — Economy’s interest ejusdem generis with interests listed in s. 164(1) — Entitled to have rights determined under s. 164(2) — In special circumstances Courts adding party after expiry of limitation period — Short limitation period, no jurisdiction to extend same, no notice to owner of seizure prior to expiry of limitation period, confiscation of private property without notice or compensation, failure to give notice contrary to normal RCMP practice, special circumstances — No prejudice to respondent if owner added — Reasonable diligence exercised in applying to add owner — Absence of notice in Excise Act, compared to reasonable notice provision in parallel process in Customs Act inexplicable, requiring attention of Parliament.

Practice — Parties — Joinder — Application for order adding as party owner of vehicle upon application for declaration of interest by lessee where vehicle seized for containing contraband alcoholic spirits — Whether owner may be added after 30-day limitation period expired — Review of case law on adding latecomer to already commenced action — Permitted in special circumstances — Whether M.N.R. prejudiced — Extension of limitation period not in itself prejudice — Shortness of limitation period, lack of jurisdiction to extend, lack of requirement for notice to anyone but person from whom vehicle seized, confiscation of property without compensation, failure of RCMP to follow usual practice of sending form letter of notification to registered owner constituting special circumstances — Reasonable diligence in applying to add owner as party.

Bill of Rights — Excise Act, s. 164(1) requiring anyone with interest in seized property to apply within 30 days after seizure for order declaring interest — Very short limitation period, confiscation of private property without compensation, no provision for notice, no provision for extension of limitation period, raising serious question whether contrary to guarantee in Canadian Bill of Rights, s. 2(e) of fair hearing for determination of rights and obligations.

These were applications to add Birchcliff National Leasing Ltd. as an applicant in this action and for an order declaring Economy Car and Truck Rental’s interest as the lawful lessee of the vehicle. Economy leased a 1993 Ford E350 Cab/Chassis from Birchcliff under a long-term lease under which Economy has no right of ownership in the vehicle, but did have an option to purchase the vehicle for a fixed price at the end of the lease. The vehicle, which had been rented to an individual, was seized by the RCMP pursuant to the Excise Act because contraband alcoholic spirits were found therein. Economy was notified of the seizure and the procedures to follow to express an interest in the vehicle. Excise Act, section 69 requires communication only to the person from whom the seizure was made. Section 164 provides that anyone with an interest in seized property may within thirty days after the seizure apply for an order declaring his interest. Some 23 days after the seizure, Economy filed a statement of claim seeking the return of the vehicle and a notice of motion to have its interest as lessee declared. Birchcliff was not notified of the seizure until after the expiration of the limitation period. Shortly thereafter Economy filed the notice of motion to have Birchcliff added as a party.

The issues were whether Economy had an interest in the vehicle and whether Birchcliff may be added as a party even though the 30-day limitation period had expired when Economy filed its notice of motion to add Birchcliff as a party. The respondent submitted that (1) Economy had no interest in the vehicle and was therefore not entitled to assert a claim under section 164; (2) the 30-day limitation period was absolute, thereby precluding the addition of Birchcliff; (3) there was no obligation on the respondent to notify Birchcliff to assert its claim before expiry of the 30-day limitation period.

Held, the applications should be allowed.

Subsection 164(1) recognizes the potential claims of owners, lien-holders, or holders of any like interest. There was no reason to interpret “any like interest” so narrowly as to deprive a person with an equitable interest of an opportunity to make a claim under subsection 164(1). Economy’s interest was ejusdem generis with those interests listed in subsection 164(1) and was a “like interest.” It was entitled to have its rights determined in accordance with subsection 164(2).

In special circumstances courts will allow a statement of claim to be amended to add a party after a limitation period has expired. The special circumstances that cumulatively justified adding Birchcliff as a party were: (1) the limitation period under subsection 164 is only 30 days, with no jurisdiction in the Court to extend it. Limitation periods are normally much longer. (2) Birchcliff had no notice of the seizure prior to expiry of the limitation period. Where a person with an interest in the vehicle has no notice of a seizure, the circumstances are special. (3) Legislation that provides for the confiscation of private property without notice or compensation is unusual, even special. (4) Failure to give notice to Birchcliff would be inconsistent with normal RCMP practice and would constitute special circumstances.

An amendment to add a party will not be permitted when there is prejudice to the opposite party. Extension of the limitation period itself is not prejudice. The prejudice must be something particular to the circumstances, such as the destruction of evidence or the inability to conduct an investigation, which would not have been a problem had the claim been filed in time. There was no evidence of any prejudice to the respondent. Delay in disposing of the vehicle did not constitute prejudice because the Minister could not dispose of it until Economy’s claim had been adjudicated.

The application to have Birchcliff added as a party to the action already commenced by Economy was made within fifteen days of Birchcliff being notified of the seizure. Given the very short limitation period and very technical arguments relating to who may have an interest in the vehicle, there was reasonable diligence in the making of the application to add Birchcliff as a party.

A party may be added to an already commenced action before the claim of the original claimant is adjudicated. The required common element is the event giving rise to the respective causes of action. Both Economy and Birchcliff had claims arising under section 164 out of the same event—the seizure of the vehicle by the RCMP.

Confiscation of private property without notice is not justified by the historical in rem argument, in light of the recognition in section 164 of potential claims by owners or persons with any like interest. On the basis of the special circumstances, Birchcliff should be added as an applicant to these proceedings. Birchcliff’s claim goes back to the date Economy filed its claim.

A statutory provision that establishes a very short limitation period for persons to file claims, failing which their property is confiscated, without making any provision for notice to be given to such persons, when they are not in possession of the property when it was seized, or any opportunity for a judge to extend the limitation period, raises a serious question of whether the statutory provision denies such persons a fair hearing for the determination of their rights contrary to the guarantee in Canadian Bill of Rights, paragraph 2(e).

Seizure and forfeiture under the Customs Act and Excise Act are parallel processes, depending upon which Act the contraband goods are subject to. There was no logical explanation as to why the Excise Act requires that a list of seized property be given only to the person from whom the property was seized, when the Customs Act requires the giving of notice to those who the seizing officer reasonably believes are entitled to make claims in respect of the seized property. The Customs Act, which appears to have regard for the importance of notice in the context of seizure and forfeiture of private property, is responsive to the fundamental requirements of justice while the provisions of the Excise Act are not. The absence of notice provisions in the Excise Act, as compared to the reasonable notice provisions of the Customs Act, is inexplicable and requires the attention of Parliament.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Canadian Bill of Rights, R.S.C., 1985, Appendix III.

Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, ss. 110, 138 (as am. by S.C. 1992, c. 1, s. 62; c. 51, s. 45), 139.

Excise Act, R.S.C., 1985, c. E-14, ss. 69, 164.

CASES JUDICIALLY CONSIDERED

APPLIED:

Basarsky v. Quinlan, [1972] S.C.R. 380; [1972] 1 W.W.R. 303; (1971), 24 D.L.R. (3d) 720; Murphy v. Welsh, [1993] 2 S.C.R. 1069; (1993), 106 D.L.R. (4th) 404; 18 C.P.C. (3d) 137; Porter v. Canada, [1989] 3 F.C. 403; 48 C.C.C. (3d) 252; 40 C.R.R. 263; 26 F.T.R. 69; (1989), 2 T.C.T. 4141; [1989] 1 T.S.T. 2115 (T.D.).

CONSIDERED:

Robert Boudreau v. Minister of National Revenue, Customs and Excise, Que. Sup. Ct., 705-36-000070-936, December 14, 1993, not yet reported; Location des Bois-Francs Inc. v. Minister of National Revenue, Que. Sup. Ct., 415-05-000259-910, February 14, 1992, Walters J., not reported; Vallières v. Attorney General of Canada, Que. Sup. Ct., 760-05-000801-926, October 28, 1993, Boudreault J., not yet reported; Weldon v. Neal (1887), 19 Q.B.D. 394 (C.A.).

REFERRED TO:

2749-5191 Québec Inc. v. Deputy Minister of Revenue, Que. Sup. Ct., 750-05-000333-938, August 5, 1993, not yet reported; Ginette Pilon v. The Queen, Que. Sup. Ct., 500-05-004264-923, April 2, 1992, not yet reported; Pierrette Primeau v. Department of National Revenue, Que. Sup. Ct., 500-05-007316-936, July 17, 1993, not yet reported; Zarowney, Joe v. The Queen, [1956] Ex. C.R. 16; [1956] C.T.C. 1; (1955), 56 DTC 1025; Jefo international ltée c. Canada (Ministre du Revenu national, Douanes et Accise), [1992] R.J.Q. 1258 (Sup. Ct.); Budget Car & Truck Rentals of Ottawa v. Minister of National Revenue (Customs and Excise) (1993), 66 F.T.R. 277 (F.C.T.D.).

AUTHORS CITED

Hogg, Peter. Constitutional Law of Canada, 3rd ed. (Supplemented), Scarborough: Carswell, 1992.

APPLICATIONS to add as an applicant in an action the owner of a vehicle seized pursuant to the Excise Act while in the possession of an individual who had leased it from a car and truck rental business and for an order declaring the interest of the rental company in the vehicle. Applications allowed.

COUNSEL:

S. Jay Passi for applicant.

Gina M. Scarcella for respondent.

Michael R. Kestenberg on behalf of Birchcliff National Leasing Ltd.

SOLICITORS:

Chatarpaul & Associates, North York, Ontario, for applicant.

Deputy Attorney General of Canada for respondent.

The following are the reasons for order rendered in English by

Rothstein J:

The Applications

These are two applications by 785072 Ontario Inc. carrying on business as Economy Car and Truck Rental (Economy) arising out of the seizure under the Excise Act, R.S.C., 1985, c. E-14, as amended, of a 1993 Ford E350 Cab/Chassis (the vehicle) by the Royal Canadian Mounted Police (RCMP). One application seeks an order adding Birchcliff National Leasing Ltd. (Birchcliff) as an applicant in this action. Birchcliff is the registered owner of the vehicle. The other application seeks an order declaring Economy’s interest as the lawful lessee of the vehicle.

The Facts

Birchcliff is in the business of leasing vehicles on a long-term basis. On April 30, 1993, Birchcliff, as lessor, leased the vehicle to Economy. Economy is in the business of renting vehicles to the public. On November 10, 1993, Economy rented the vehicle to Christopher Saunders for a one day period.

On November 11, 1993, the vehicle was not returned and Economy learned that Saunders had been arrested at Cornwall, Ontario. The vehicle had been seized by the RCMP pursuant to the Excise Act, because 1,200 1.75 litre bottles of “contraband” alcoholic spirits worth an estimated $28,800 had been found in the vehicle. The president of Economy contacted the RCMP and he was told that he would be receiving some documentation in the mail respecting the seizure of the vehicle. On November 16, 1993, the RCMP wrote what appears to be a form letter to Economy:

TO WHO IT MAY CONCERN:

1. Please be advised that on 93-11-10 a vehicle registered to your name, as described on the attached form, was seized by our Unit. The vehicle was found containing spirits unlawfully imported into Canada contrary to the Excise Act.

2. Please find enclosed a copy of the Form N-1 (Schedule of Property Seized) listing items seized and explains the procedures to be followed if you wish to express an interest in this vehicle.

3. Also be advised that the license plates for the seized vehicle are being held for 30 days. If you wish to obtain same, please contact this office. If we have not heard from you within 30 days, the license plates will be turned over to M.T.C.

4. Should you require further information in regards to this vehicle, please contact Revenue Canada, Customs & Excise Adjudications at (613) 954-7328.

The vehicle’s registration permit names Birchcliff on the vehicle portion while the plate portion names Economy. The registration form was likely in the vehicle, although there is no evidence directly on this point. However, the RCMP’s letter implies that the RCMP had knowledge of the registration permit because the letter says “a vehicle registered to your name.”

On December 3, 1993, 23 days after the seizure, Economy filed a statement of claim in this Court seeking the return of the vehicle. On the same date, Economy filed its notice of motion to have its interest as lessee of the vehicle declared.

On January 12, 1994, Economy advised Birchcliff of the seizure of the vehicle. On January 27, 1994, Economy filed its notice of motion to have Birchcliff added as a party. This was approximately two and one-half months after the seizure.

Section 164 is the relevant provision of the Excise Act:

164. (1) Whenever any horses, vehicles, vessels or other appliances have been seized as forfeited under this Act, any person, other than the person accused of an offence resulting in the seizure or person in whose possession the horses, vehicles, vessels or other appliances were seized who claims an interest in the horses, vehicles, vessels or other appliances as owner, mortgagee, lien-holder or holder of any like interest may within thirty days after the seizure apply to any judge of any superior court of a province or to a judge of the Federal Court for an order declaring his interest.

(2) Where, after such notice to the Minister as the judge referred to in subsection (1) may require, it is made to appear to the satisfaction of the judge

(a) that the claimant is innocent of any complicity in the offence resulting in the seizure or of any collusion with the offender in relation thereto, and

(b) that the claimant exercised all reasonable care in respect of the person permitted to obtain the possession of the horses, vehicles, vessels or other appliances to satisfy himself that they were not likely to be used contrary to this Act or, if a mortgagee or lien-holder, that before becoming the mortgagee or lien-holder he exercised such care with respect to the mortgagor or lien-giver,

the claimant is entitled to an order that his interest is not affected by the seizure.

The Issues

The issues are whether Economy has an interest in the vehicle and whether Birchcliff may be added as a party to the action already commenced by Economy even though the 30-day limitation period in subsection 164(1) had expired when Economy filed its notice of motion to add Birchcliff as a party. Clearly, the application to add Birchcliff as a party is made because of the respondent’s position that Economy has no interest in the vehicle and that its claim under subsection 164(1) is invalid.

This case has troubled me from the start. The respondent does not assert that Birchcliff or Economy are implicated in the alleged wrongdoing which led to the seizure. However, the respondent says it is entitled to the motor vehicle because:

(1) Economy has no interest in the vehicle and is therefore not entitled to assert a claim under section 164;

(2) While Birchcliff may have an interest, Birchcliff cannot be added as a party after expiry of the 30-day limitation period. The limitation period in subsection 164(1) is absolute and there is no discretion in the Court to extend it to allow Birchcliff to become a party;

(3) There was no obligation on the respondent to notify Birchcliff to assert its claim before expiry of the 30-day limitation period. The only provision for formal communication after seizure in the Excise Act is section 69, requiring communication only to the person from whom the seizure was made. Section 69 states:

69. The collector or any other officer, or any person aiding or assisting him in seizing property as forfeited under this Act, shall mark and number each separate piece, and make a schedule, of all the property seized, with the estimated value thereof, which schedule or list shall be dated and signed by the collector or other officer, and a true copy thereof shall be given to the person from whom the seizure was made, or forwarded to his latest known post office address by registered letter, and another copy, together with the collector’s or other officer’s report relating to the seizure, shall be transmitted without delay to the Minister. [Emphasis added.]

If the respondent is correct, subsection 164(1) of the Excise Act enables the respondent to confiscate an innocent party’s property without notice and without compensation. Without wishing to generalize unduly or escalate the rhetoric unnecessarily, my initial reaction was to think that such interpretation was, in the absence of some good reason, characteristic of totalitarian regimes and not democratic ones. For this reason, I requested counsel to thoroughly canvass the law and make further submissions. I even asked them to consider the effect of section 164 of the Excise Act in light of the Canadian Bill of Rights, S.C. 1960, c. 44, reprinted in R.S.C., 1985, Appendix III. I am indebted to counsel for their submissions and their cooperation, and particularly to counsel for the respondent, who brought to my attention statutory references and case law which were not supportive of her position.

Economy’s Interest

I turn first to the question of Economy’s interest in the vehicle. A number of cases have held that purchasers under conditional sales contracts do not have an interest in property as the term “interest” is used in subsection 164(1) of the Excise Act and sections 138 [as am. by S.C. 1992, c. 1, s. 62; c. 51, s. 45] and 139 of the Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, as amended. Section 138 of the Customs Act contains the same words as those found in subsection 164(1) of the Excise Act: “owner, mortgagee, lien-holder or holder of any like interest.” See, for example, the following unreported decisions: 2749-5191 Quebec Inc. v. Deputy Minister of Revenue (August 5, 1993), Court file: 750-05-000333-938, (Que. Sup. Ct.); Ginette Pilon v. The Queen (April 2, 1992), Court file: 500-05-004264-923, (Que. Sup. Ct.); Pierrette Primeau v. Department of National Revenue (July 17, 1993), court file: 500-05-007316-936, (Que. Sup. Ct.); and Robert Boudreau v. Minister of National Revenue, Customs and Excise (December 14, 1993), Court file: 705-36-000070-936, (Que. Sup. Ct.). In Robert Boudreau v. Minister of National Revenue, Customs and Excise, a conditional purchaser had filed a claim under subsection 164(1) within the statutory 30-day limitation period. However, the conditional purchaser was not the owner of the vehicle when he filed his claim. He assumed outright ownership of the vehicle only after the expiry of the 30-day limitation period. It was held that this was too late and the claim was dismissed. On the other hand, in the unreported decision of Vallières v. Attorney General of Canada, (October 28, 1993), Court file 760-05-000801-926, (Que. Sup. Ct.), Boudreault, J.S.C.Q. found that an instalment purchaser had a “similar interest” which entitled him to rely on subsection 164(1) of the Excise Act.

No cases were cited to me that dealt directly with the lessor-lessee relationship precisely as it is in this case. The respondent points out that under the lease between Birchcliff and Economy, Economy is given no right of ownership in the vehicle. Section 1 of the Terms and Conditions of the Lease Agreement between Birchcliff and Economy provides in part:

Agreement is one of leasing only and the Lessee shall not have or acquire any right, title, or interest in or to the vehicle except the right to use or operate it as provided herein. The lessee is hereby obligated to make the vehicle available for inspection by the lessor within three days of request.

Counsel for Birchcliff refers me to an “Addendum to Open End Lease” which provides that upon payment of a fixed amount of $6,885 at lease termination, plus the cost of a Safety Standard Certificate, Economy may acquire the vehicle. The sum $6,885 appears to be a price which allows Economy, according to the addendum, to “thereby take advantage of any gain that results from an increase in the market value of the vehicle.” It seems, therefore, that the addendum amends section 1 of the Lease Agreement and provides Economy with what I would term an equitable interest in the vehicle in addition to its rights to the vehicle under its long-term lease.

Subsection 164(1) of the Excise Act recognizes the potential claims of owners, mortgagees, lien-holders, or holders of any like interest. I have considerable difficulty understanding why the holder of an equitable interest is not a holder of a like interest to that of an owner, mortgagee or lien-holder. Indeed in the past, an owner who mortgaged his or her property may have, depending upon the jurisdiction where, and the time when, the mortgage was given, transferred legal title to the mortgagee, retaining the right to a reconveyance when the mortgage was paid out. The owner certainly would retain an equitable interest in the property. In my view, it is a very narrow interpretation of the term “any like interest” that would hold that an equitable interest is not ejusdem generis with owner, mortgagee or lien-holder in subsection 164(1). I do not know what the phrase “any like interest” would cover if not a conditional purchaser or a lessee with a right to purchase at a fixed price at the end of a lease.

No argument has been made that satisfactorily explains why a conditional purchaser or lessee with a right to purchase at a fixed price is not a person with “any like interest” or why that phrase should be interpreted so narrowly as to deprive such a person of an opportunity to make a claim under subsection 164(1) of the Excise Act. In my view, Economy’s interest in this case is one that is ejusdem generis with those interests listed in subsection 164(1) and is a “like interest.” Economy therefore has an interest contemplated by subsection 164(1) of the Excise Act and should be entitled to have its rights determined in accordance with subsection 164(2) of the Excise Act.

Birchcliff

I now proceed to address Economy’s application to have Birchcliff added as an applicant.

Birchcliff seeks to be added, after the 30-day limitation period, to an action commenced by Economy within the 30-day limitation period. The respondent’s first objection is that Economy has no interest or that Economy’s claim is invalid and Birchcliff cannot “piggyback” on an invalid claim or a claim not based on an interest recognized under subsection 164(1). I have found Economy to have an interest under subsection 164(1) but I have not decided the validity of its claim, which is to be determined pursuant to the procedure provided under subsection 164(2). In particular, I have not decided, on the merits, whether or not, for example, Economy exercised reasonable care in permitting Saunders to have possession of the vehicle. However, I do not think the validity or invalidity of Economy’s claim, or indeed, whether or not Economy has an interest under subsection 164(1), are relevant considerations for determining whether Birchcliff may be added to the action commenced by Economy. In my view, it is the existence of the original claim, and not its merit, that enables a person to be added as a party to an action. I do not see why a party may not be added to an already commenced action before the claim of the original claimant is adjudicated. Indeed, the addition of parties to an action would normally occur before adjudication of the original claim.[1] As there is an existing action brought by Economy, the respondent’s argument on this point must be rejected.

As to the adding of a latecomer to an already commenced action, the applicant relies on Basarsky v. Quinlan, [1972] S.C.R. 380. In that case, referring to Weldon v. Neal (1887), 19 Q.B.D. 394 (C.A.), an amendment of pleadings to allow a new cause of action to benefit different claimants was allowed by the Supreme Court where special circumstances were shown. Hall J. stated at pages 384-385:

Thus the conclusion must be that the rule of practice in Weldon v. Neal is not absolute, and an amendment of the nature of that sought in the latter case will be allowed where peculiar circumstances exist which warrant the amendment being allowed. The power to allow an amendment after the time limited by a Statute of Limitations will necessarily be infrequently invoked as the circumstances warranting its use will not often occur….

The adjective “peculiar” in the context of Lord Esher M.R.’s judgment and at the date thereof may be equated with “special” in current usage.

In Murphy v. Welsh, [1993] 2 S.C.R. 1069, Major J., at page 1081, reaffirmed that Basarsky v. Quinlan stood for the proposition that:

… in special circumstances the court will allow a statement of claim to be amended to add another party after a limitation period expires. However, the new party’s claim will only go back to the date of the statement of claim.

In my view, Basarsky v. Quinlan, supra, as further explained in Murphy v. Welsh, supra, is directly applicable to the case at bar. Here, we have Economy, after the limitation period has expired, seeking to add Birchcliff to its claim filed prior to the expiry of the limitation period.

Counsel for the respondent says that for a latecomer to be added to an action, the cause of action or interest of the latecomer must be the same as that of the original claimant. In Vallières, supra, Boudreault, J.S.C.Q. rejected the application of the Bank of Nova Scotia, made more than 30 days after the seizure, to intervene in an action already commenced by the instalment purchaser, apparently on the basis that the interest of the Bank of Nova Scotia and the interest of the instalment purchaser were different. There is no indication that Basarsky v. Quinlan was cited in Vallières, supra. In any event, I do not read Basarsky v. Quinlan or Murphy v. Welsh as allowing latecomers to be added only when there is some sort of similarity of interest demonstrated. In my view, the required common element is the event giving rise to the respective causes of action. In Basarsky v. Quinlan, a motor vehicle accident case, the amendment was to assert the rights of different parties under a different statute than the original claim. In Murphy v. Welsh, another motor vehicle accident case, a mother, in her own right, sought to be added to an action by her infant son, and it appears she would have been added except that the infant’s action was commenced after the expiry of the limitation period applying to the mother. In both cases, the claims sought to be made out of time were in respect of the same event that gave rise to the original claim. In the case at bar, both Economy and Birchcliff have claims arising under section 164 of the Excise Act out of the same event—the seizure of the vehicle by the RCMP under the Excise Act. In my opinion, this is sufficient.

There is then the question of whether the respondent will be prejudiced by the addition of Birchcliff to the Economy action. In Weldon v. Neal, supra, it is indicated that an amendment to add a party will not be permitted when there is prejudice to the opposite party. Of course, the opposite party cannot assert the extension of the limitation period itself as prejudice, or the exception to the general rule of practice expressed in Weldon v. Neal could never apply. I think the prejudice referred to in Weldon v. Neal must be something particular to the circumstances, such as the destruction of evidence or an inability to conduct a late investigation, which would not have arisen had the claim been filed in time. In the case at bar, there is no evidence of any prejudice to the respondent. While counsel for the respondent asserts that the Minister will be prejudiced if he is delayed in getting on with the disposition of the seized vehicle, that argument cannot avail as demonstrating prejudice because the Minister could do nothing with the vehicle until Economy’s claim had been adjudicated.

The only question then, is whether there are special circumstances that would justify adding Birchcliff as a party. In my view, there are such special circumstances:

(1) The limitation period under subsection 164(1) is only 30 days, with apparently no jurisdiction in the Court to extend it. Other limitation periods are normally much longer, as in ordinary tort or contract disputes. Where a statutory limitation period is only 30 days, with apparently no jurisdiction in the Court to extend that time, the situation is, in my view, special—perhaps even peculiar.

(2) Birchcliff had no notice of the forfeiture or seizure prior to the expiry of the 30-day limitation period. Section 69 of the Excise Act provides for communication to the person from whom the vehicle was seized, but not for notice of the seizure to any other person who may have an interest in the vehicle. It seems peculiar that the only required formal communication would be to a person who already had de facto notice of the seizure and not to anyone else. Where a person with an interest in the vehicle has no notice of a seizure, the circumstances, I think, are special.

(3) Legislation that provides for the confiscation of private property without notice or compensation is, indeed, unusual. In Porter v. Canada, [1989] 3 F.C. 403 (T.D.), Joyal J. notes, at page 407, that the forfeiture provisions in the Excise Act [R.S.C. 1970, c. E-12] and Customs Act [S.C. 1986, c. 1] have a certain draconian aspect to them. Joyal J. states that the practice of forfeiture “smacks” of a penalty that, in many cases, appears to go far beyond the requirements of punishment and retribution. In that case, Joyal J. elaborates at length on the purpose and nature of forfeiture legislation. Without reiterating his comments in Porter, it is obvious that such legislation is special.

(4) It seems likely that the RCMP had knowledge of the vehicle registration form and therefore Birchcliff’s interest. However, even if they did not, I think judicial notice can be taken that a simple search of motor vehicle registrations in Ontario, which the RCMP must routinely perform, would have disclosed Birchliff’s interest. One way or the other, the RCMP would have knowledge of Birchcliff’s interest. There has been no explanation in the evidence as to why the RCMP did not notify Birchcliff of the seizure, other than perhaps for section 69 of the Excise Act. As I have indicated, this is the unusual provision requiring only that a list of property seized be given to the person from whom the vehicle was seized and who already had de facto notice of the seizure, and not to others who have an interest in the vehicle. The fact that the RCMP sends what appears to be a form letter to persons in whose name a seized vehicle is registered, suggests that the RCMP may, although not expressly required to do so by the statute, follow the reasonable and common sense practice of giving notice to other persons as well as those from whom the vehicle was seized, if it appears that they may have an interest in the vehicle. Failure to give notice to Birchcliff here would be inconsistent with the normal RCMP practice and would constitute special circumstances.

The foregoing factors, in my view, cumulatively amount to special circumstances that would permit application of the rule in Basarsky v. Quinlan, supra.

Were reasonably diligent steps taken to have Birchcliff added as a party after the limitation period expired? The application to have Birchcliff added as a party to the action already commenced by Economy was made within fifteen days of Birchcliff being notified of the seizure. It seems that Birchcliff was notified by Economy when Economy realized that the respondent was taking the position that Economy did not have an interest recognized by subsection 164(1). Counsel for the respondent says that Economy could have notified Birchcliff before the expiry of the 30-day limitation period. However, here we are dealing with a very short limitation period and very technical arguments relating to who may or may not have an interest in the vehicle. I am satisfied that there was reasonable diligence in the making of the application to add Birchcliff as a party.

I am mindful that many cases have held that a claimant who misses the 30-day limitation period has no claim under subsection 164(1) and that the Court is powerless to extend the time (see Zarowney, Joe v. The Queen, [1956] Ex. C.R. 16, at page 21; Jefo international ltée c. Canada (Ministre du Revenu national, Douanes et Accise), [1992] R.J.Q. 1258 (Sup. Ct.), at page 1262 and Budget Car & Truck Rentals of Ottawa v. Minister of National Revenue (Customs and Excise) (1993), 66 F.T.R. 277 (F.C.T.D.), at page 278). However, in Location des Bois-Francs Inc. v. Minister of National Revenue, an unreported decision of Walters, J.C.S., Court file: 415-05-000259-910, dated February 14, 1992, (Que. Sup. Ct.), (referred to but distinguished in Budget Car & Truck Rentals of Ottawa, supra), the claim of a lessor of a motor vehicle was allowed even though the claim was filed more than 30 days after the seizure of the vehicle. Walters J.C.S. refers to “special circumstances” at page 8 of his reasons. The decision does not refer to Basarsky v. Quinlan by name and indeed it appears that the case before Walters J.C.S. was one involving a simple extension of time and not, as here, an application to add a party to an already existing action. Nonetheless, the lack of notice appears to have convinced Walters J.C.S., on equitable grounds, to extend the time in that case.

I have cited Location des Bois-Francs Inc. v. Minister of National Revenue, supra, to indicate that even in an ordinary extension of time case, notwithstanding the words of subsection 164(1), the Court has extended the time on equitable grounds. However, in the case at bar, it is not necessary to approach the issue on the basis of an extension of time as such. This is a case of adding a latecomer to an action commenced within time and falls squarely within the rule in Basarsky v. Quinlan as further explained in Murphy v. Welsh.

Counsel for the respondent argued that a forfeiture and seizure was an action in rem against the vehicle and that the identity of the owner was irrelevant. In her submission, this justified the respondent seizing and disposing of vehicles without notice to the owner or persons with any like interest, if they were not in possession at the time of seizure. However, subsection 164(1) provides that an owner or person with any like interest may seek an order declaring their interest. Subsection 164(2) provides that if a person with an interest in the vehicle can demonstrate that he or she was not implicated in the wrongdoing which led to the seizure and that he or she acted with reasonable care with respect to the person who had possession when the wrongdoing occurred, his or her interest may be declared to be unaffected by the seizure. It is difficult to reconcile the apparent intent of section 164, to enable a person with an interest in the vehicle to assert that person’s interest against the seizure and forfeiture, with the notion that seizure and forfeiture is an action in rem in which the identity of the owner or persons with any like interest in the vehicle is irrelevant. Whatever the antecedents of the forfeiture and seizure provisions of the Excise Act are, the statutory provisions do recognize potential claims by the owner or persons with any like interest. This was recognized by Joyal J. in Porter, supra, at page 412, although it did not have a bearing on the issues before him. I do not see that confiscation of private property without notice is justified by the historical in rem argument, in light of the recognition, in section 164 of the Excise Act, of potential claims by owners or persons with any like interest.

On the basis of the special circumstances in this case and following the rule in Basarsky v. Quinlan as confirmed by Murphy v. Welsh, I would allow Birchcliff to be added as an applicant in these proceedings. In accordance with Murphy v. Welsh, Birchcliff’s claim goes back to the date Economy filed its claim in this Court, which is within 30 days of the seizure having taken place as required by subsection 164(1) of the Excise Act.

Canadian Bill of Rights

In view of these findings, it is not necessary for me to deal with the Canadian Bill of Rights. However, I note that paragraph 2(e) of the Canadian Bill of Rights provides:

2. Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to

…

(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations.

Peter W. Hogg, in Constitutional Law of Canada, 3rd ed. (Supplemented), (Scarborough: Carswell, 1992) writes, at page 32-2:

Those provisions of the Bill that are not duplicated by the Charter are two in number: (1) the Bill’s “due process” clause (s. 1(a)), which extends to the protection of property, and (2) the Bill’s guarantee (s. 2(e)) of a fair hearing for the determination of rights and obligations. Both these provisions go beyond the guarantees in the Charter, and will therefore continue to be operative restraints on federal (but not provincial) activity. [Footnote omitted.]

Without deciding the issue, in my opinion, a statutory provision that establishes a very short limitation period for persons to file claims, failing which their property is confiscated, without making any provision for notice to be given to such persons (when they are not in possession of the property when it was seized) or any opportunity for a judge to extend the limitation period, raises a serious question of whether the statutory provision denies such persons a fair hearing for the determination of their rights.

Comparison of Excise Act and Customs Act

Finally, counsel for the respondent brought to my attention the provisions of the Customs Act, respecting seizure and forfeiture of conveyances in which contraband goods are found. The provisions of the Customs Act require notice to be given to persons who the seizing officer reasonably believes are entitled to make claims for the conveyance. Subsections 110(1) and (4) of the Customs Act provide:

110. (1) An officer may, where he believes on reasonable grounds that this Act or the regulations have been contravened in respect of goods, seize as forfeit

(a) the goods; or

(b) any conveyance that the officer believes on reasonable grounds was made use of in respect of the goods, whether at or after the time of the contravention.

…

(4) An officer who seizes goods or a conveyance as forfeit under subsection (1) or (2) shall take such measures as are reasonable in the circumstances to give notice of the seizure to any person who the officer believes on reasonable grounds is entitled to make an application under section 138 in respect of the goods or conveyance.

Subsection 138(1) of the Customs Act provides:

138. (1) Where anything has been seized as forfeit under this Act, any person, other than the person in whose possession the thing was when seized, who claims an interest therein as owner, mortgagee, lien-holder or holder of any like interest may, within sixty days after such seizure, apply by notice in writing to the court for an order under section 139.

Counsel for the respondent, quite fairly, indicated that seizure and forfeiture under the Customs Act and Excise Act are parallel processes, depending upon whether the contraband goods seized are subject to the Customs Act or the Excise Act. By contrast to the Customs Act, however, as indicated previously, under section 69 of the Excise Act, there is only a requirement on the respondent to give a list of seized property to the person from whom the property was seized.

There does not appear to be any logical explanation as to why the Excise Act only provides for a list of seized property to be given to the person from whom the property was seized, when the requirement under the Customs Act is to give notice to persons who the seizing officer believes, on reasonable grounds, are entitled to make an application in respect of the seized property. Counsel informally suggested that the difference may be due to the fact that the Customs Act had been recently amended and that perhaps the Excise Act reflected the nature of more simplified commercial transactions in the past, i.e. perhaps a person with an interest would be someone in close communication with the person in possession of the vehicle when it was seized. Be that as it may, the wording in the Customs Act, which appears to have regard for the importance of notice in the context of seizure and forfeiture of private property, is, in my view, responsive to the fundamental requirements of justice while the provisions of the Excise Act are not. The absence of notice provisions in the Excise Act, as compared to the reasonable notice provisions of the Customs Act, is inexplicable and, in my opinion, requires the attention of Parliament.

Conclusion

The application of Economy that it be declared to have an interest in the vehicle is allowed. The application of Economy to add Birchcliff as an applicant in the action is also allowed. The matter may now proceed under subsection 164(2) of the Excise Act for determination of whether the respective interests in the vehicle of Economy or Birchcliff are affected by the seizure.

Counsel for Economy shall prepare an order consistent with these reasons and submit it to counsel for Birchcliff and counsel for the respondent for consent as to form and then to the Court within fourteen (14) days of the date of these reasons. Should counsel be unable to agree as to the form of order, any party may apply to the Court and upon hearing counsel for all parties, the Court will issue an order consistent with these reasons.

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