STATUTORY APPEAL OR JUDICIAL REVIEW?
THE DIFFERENCES & WHY THE FORMER MIGHT BE BETTER!
A recent decision by the Federal Court of Appeal (the “FCA”) has put into focus the distinction between a statutory right of appeal - which might be constrained in scope in some instances - and a judicial review application, which may offer an alternative avenue to deal with those constraints.
Of particular interest is the FCA’s discussion in Best Buy Canada Ltd. v. Canada (Border Services Agency) on why, overall, choosing to proceed solely with a statutory right of appeal might be more beneficial to taxpayers and importers.
Background: Statutory Appeal vs. Judicial Review
When faced with an unfavourable decision from a government agency – such as an assessment by the Canada Revenue Agency (the “CRA”) or the Canada Border Services Agency (the “CBSA”) – taxpayers and importers generally have two routes to a remedy, either through a statutory appeal or a judicial review. A statutory appeal allows a court to review and potentially overturn the decision based on errors in law, facts, or both. On the other hand, a judicial review focuses on whether the government followed a fair and reasonable process in reaching its decision. Choosing between these two options is a critical first step in any dispute.
Best Buy Canada Ltd. v. Canada (Border Services Agency)
In this case, Best Buy Canada Ltd. (“Best Buy”) disputed a tariff classification decision from the Canadian International Trade Tribunal (the “CITT”) regarding certain imported wine coolers. The CITT had relied on its previous decision, which had been upheld by the FCA in Danby Products Limited v. Canada (Border Services Agency). To overturn this precedent, Best Buy pursued two simultaneous legal avenues in the FCA: (1) by way of an appeal under subsection 68(1) of the Customs Act, which restricts an appeal to questions of law (the “Statutory Appeal”), and (2) by a judicial review application under subsection 28(1) of the Federal Courts Act (the “Judicial Review”).
On Best Buy’s Statutory Appeal, the FCA dismissed it, holding that the CITT did not commit any legal error. Since the Statutory Appeal was restricted to questions of law, there was no basis to overturn the CITT’s decision.
On Best Buy’s Judicial Review, the FCA first considered whether judicial review is available when a statutory appeal provision limits the grounds on which an appeal can be brought. The FCA concluded that while parties can file a separate judicial review application, that does not necessarily mean they should, especially when only questions of law are at issue. The FCA held that when a statutory appeal allows for legal questions to be raised, any concerns that could be addressed through judicial review can also be dealt with in the appeal itself (see para. 11). The court also concluded that statutory appeals and judicial reviews are the same, as far as administrative law remedies are concerned (see para. 14). Accordingly, the FCA dismissed Best Buy’s Judicial Review.
The first step in fighting any tax or customs assessment is determining what appeal rights ONE actually has.
Experienced counsel is usually required to make that determination
Takeaways
Defending assessments brought by the CRA or the CBSA can be a daunting task! At the outset, one needs to determine whether a statutory right of appeal exists, whether it must be pursued, and whether any legal constraints apply to that right. Equally important is assessing whether judicial review is an option and, if so, whether it is advisable in the circumstances. Experienced counsel is usually required at the outset, to help guide these decisions.
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