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Information in this article is not intended as legal advice.  No warranty exists as to the accuracy of any particular provisions.  Reference should be made to all applicable statutes and caselaw.  You may consult this lawyer or any other for advice.

Copyright K. W. Golish 2000

Legal Stuff

Kenneth W. Golish
380 Ouellette Ave
Suite 302
Windsor, Ontario CANADA
N9A 6X5
Topics in this Issue:
  1. The New Preclearance Act: An Overview
  2. R. v. Dodson: Bail Money, Creditors and the Right of Release

The New Preclearance Act: An Overview

For almost 50 years US customs and immigration personnel have precleared passengers bound for US destinations at Canadian airports.  Although probably an equal number of passengers travel the other way, Canada does not have any such facilities in the United States.

The operation of these preclearance facilities has never had the force of statute.  Clearly however, US customs and immigration have the authority to refuse the preclearance of goods and people and as a matter of law, carriers are not obliged to transfer goods or persons without such preclearance.  Moreover, nothing seems to prevent evidence of an entry refusal from being used later for whatever purpose allowed by US law.  However, US personnel on Canadian soil have never had any special authority to detain individuals or goods, or to exact any kind of forfeiture or penalty on property.  Nor have they had the benefit of any immunity from civil or criminal liability.

The US wanted something more.  What it got was something less after the original proposed preclearance legislation came under the scrutiny of the Canadian Bar Association.  The original bill was less voluntary although some may still regard the final version as not having satisfactorily addressed some of these concerns.  The Senate passed the legislation in 1999, but is not yet proclaimed in force.  In the Monday, April 26, 1999 third reading senate speech on the introduction of Bill S-22: The Preclearance Act, Senator Loisier-Cools described the act as follows:

The Act is a unique piece of legislation which authorizes a limited set of powers to enforce preclearance laws, in designated areas, within the context of Canadian law.  The Act is intended to be as close as possible to the provisions of Canada's existing Customs Act and with Canadian jurisprudence.
Canada will be sovereign in the preclearance areas.  The agreement with the U.S. is entirely reciprocal.  The Charter of Rights and Freedoms, the Canadian Bill of Rights and the Canadian Human Rights Act are intended to protect travellers' rights. There will be no enforcement of U.S. criminal law.  Any actions performed in preclearance areas that are criminal in nature will be dealt with by Canadian authorities.
U.S. officers will only be authorized to administer the civil components of U.S. laws that are directly related to the admission of travellers and the importation of goods to the U.S., while the application of these laws will be subject to Canadian law.  U.S. administered laws will apply to customs, immigration, public health, food inspection and plant and animal health.
Preclearance officers would be able to examine and seize goods, impose monetary penalties and conduct frisk searches.  They would be able to detain passengers, who they believe have contravened the act, for transfer to Canadian authorities.  They would not be allowed to conduct strip searches or more intrusive searches, nor to detain anyone longer than to pass them over to Canadian authorities.
This Bill represents roughly two years of negotiations with the United States Government that was a balancing act of marrying the legal regimes of our two countries.  The Border process involves civil, criminal, and administrative enforcement.  The preclearance scheme is a hybrid which allows the U.S. to enforce civil and administrative matters with Canada enforcing criminal matters. The authority for U.S. officers to carry out civil enforcement of preclearance laws is triggered by a Canadian offence, the false declaration in the Act.
The Committee has acknowledged that this preclearance regime would be fully reciprocal in the United States. Canada will not proceed with enactment of the legislation until an amendment to the 1974 agreement has been signed between the U.S. and Canada which guarantees reciprocity.

The act provides a number of important provisions.  They are as follows:

  1. Civil and Criminal Immunity - s. 36:  Preclearance officers are immune from civil and criminal liability for actions authorized by the act.  No immunity exists otherwise.
  2. Creation of offence triggering provisions of act - s. 33:  The act creates two offences that apply to travellers.  Under s. 33, persons may be prosecuted for making false or deceptive statements to preclearance officers.  It is not clear whether the misrepresentation needs to be material, although a reasonable interpretation would require the misrepresentation to at least cut off a line of inquiry that might lead to something of substance.  The section creates only a summary conviction offence and does not constitute an offence for the purposes of the Criminal Records Act, while the maximum punishment is a fine of $5,000 and not jail.  In the original version of the bill, this was not the case.  Section 34 does create a more serious offence of obstructing a preclearance officer which may be prosecuted by indictment or summary conviction.
  3. Preclearance Areas and Reporting - ss. 7 - 10:  Under s. 8, only persons who are travellers destined for the United States or any person or category of persons designated by regulation may enter a designated preclearance area and every traveller who enters a preclearance area must report to a preclearance officer.  Under s. 10 a traveller has the right, at any stage of the preclearance process, to leave a preclearance area without departing for the United States, unless a preclearance officer informs the traveller that the officer suspects on reasonable grounds that the traveller has committed an offence under section 33 or 34.
  4. Outside Preclearance Areas - s. 11:  The right of a traveller to leave a preclearance area has an anomalous counterpart in the provisions of s. 11.  Under s. 11, outside a preclearance area, a preclearance officer may examine a means of transport that is subject to preclearance, including goods, currency and monetary instruments that are in, or that are to be loaded onto, that means of transport.  At that point, the preclearance officer may request that a traveller or anything examined to be sent to a preclearance area to be dealt with in accordance with the act.  If a traveller refuses to go to a preclearance area, the preclearance officer may request a Canadian officer to take the traveller to the preclearance area, and the Canadian officer is authorized to do so.  It is only logical to assume that--if an individual has a right to leave a preclearance area unless he or she can be detained for an offence under s. 33 or 34--the individual may only be ordered into a preclearance area if an officer suspects on reasonable grounds the traveller has committed such an offence.  However, we cannot be sure that is indeed what Parliament intended.
  5. Passengers to Report and Answer Questions Truthfully - ss. 15 - 16:  Under s. 16 if a traveller chooses to answer any question that is asked by a preclearance officer for preclearance purposes, the traveller must answer truthfully.  If the traveller refuses to answer any question asked for preclearance purposes, the preclearance officer may order the traveller to leave the preclearance area.  The refusal by a traveller to answer any question asked by a preclearance officer does not in and of itself constitute reasonable grounds for the officer to suspect that a search of the traveller is necessary for the purposes of this Act or that an offence has been committed under section 33 or 34.
  6. Search and Detention Powers - ss. 20 - 24:  A preclearance officer may conduct a frisk search when the officer suspects on reasonable grounds that the subject person is--under s. 20--carrying anything dangerous or--under s. 21--carrying anything that would afford evidence of a contravention of section 33.  If a preclearance officer feels a strip search is necessary for these purposes, the officer--under s. 22--may detain the person for examination by a Canadian officer.  A preclearance officer or Canadian officer must--under s. 23--before conducting a search described in section 21 or 22, inform the traveller of their right to be taken before a senior officer and, if the traveller so requests, must take the traveller before that officer.  Finally, a person may be detained by a preclearance officer if the officer believes the person has committed an offence under s. 33 or any other offence punishable by indictment or on summary conviction.
  7. Examination, Detention and Seizure of Goods - ss. 25 - 28:  A preclearance officer may examine any goods submitted for preclearance, including currency.  If the goods examined afford evidence of an offence under Canadian law or an offence under s. 33, they may be detained.  Where goods are contraband or afford evidence of a violation of Canadian law, including s. 33 of the act, they are subject to seizure.  However, in all cases, except a simple violation of s. 33, not involving currency, goods lawfully seized must be transferred to Canadian authorities.  Seized goods are subject to forfeiture or administrative penalties either by the respective authorities.  Under this scheme, illegal drugs or suspected crime proceeds would be subject to seizure by Canadian authorities only.  However, goods intended to be smuggled would be subject to seizure by US authorities.  Currency and monetary instruments appear not to come under the definition of goods and cannot be subject to final seizure by US authorities.  Therefore, currency and monetary instruments, that could be subject to seizure under US law if intended for entry into the United States in contravention of US law cannot be seized by US authorities on Canadian soil.
  8. Preclearance Laws Operate in Preclearance Areas - s. 6:  Of course, Canadian law still applies, including the Charter, etc., but the act specifies a number of preclearance laws that may be administered in these areas:
    1. Agriculture (Title 7 of the U.S. Code)
    2. Aliens and Nationality (Title 8 of the U.S. Code)
    3. Custom Duties (Title 19 of the U.S. Code)
    4. Food and Drugs (Title 21 of the U.S. Code)
    5. Immigration and Nationality Act of 1952, as amended
    6. Public Health and Welfare (Title 42 of the U.S. Code)
    However, where criminal proceedings are instituted in Canada involving a preclearance area occurence, US monetary penalties may not be imposed.
  9. Other Provisions:  Other highlights of the act include provisions for intransit areas, allowing travellers from en route to the United States from outside of Canada to simply pass through one inspection.  As well, the act requires carriers to provide passenger information to preclearance officers.  Regulations to be passed include:
    1. Providing for excluding anything under definition of goods;
    2. Designating persons who may enter preclearance areas;
    3. Prescribing how passenger information may be used;
    4. Prescribing how goods may be detained, seized and forfeited;
    5. Permitting the addition or deletion of any preclearance law.
    Finally, the act is provides it is subject to review, the review to take place after five years.

Through the use of signs in preclearance areas and pamphlets, the government intends to let travellers know about their rights and responsibilities under the new law.  The Canadian government has already provided some particulars of the act through its US - Canada Relations web site.  However, provisions dealing with US penalties and forfeitures, according to the Canadian government's own promotional material, are not clear.  Firstly, it suggests that persons will not have to pay US administrative penalties in Canada.  Even if these are not enforceable in Canada, payment of such penalties may be the only to recover goods that the act allows to be forfeited under US law.  Secondly, the government has not given particulars on how the forfeiture provisions will operate.  By regulation, the government can limit forfeitures, but a reading of the act allows for the interpretation that an individual may have property, regardless of its value, subject to forfeiture the same way it would be at a border point.  Arguably, this may be an acceptable approach in dealing with smugglers.  If so, at least the proper warning of this aspect of the law, must be given.

Preclearance areas are not border points.  Although US customs and immigration personnel have never had any special authority, complaints of illegal treatment have cropped up over the years.  For instance, we have heard about travellers being escorted to instance teller machines in order to pay administrative forfeiture penalties.  As well a traveller would never be under any form of detention and therefore was always depart at will and accept that his or her entry was being refused.  However, frequently such persons might undergo extensive questioning without any warning of their right to leave the location and accept they were being refused entry.  With the new statutory, the sanction of certain penalties apply to the traveller, but coupled with that is a clear obligation on US authorities to obey Canadian law.

To make the passage of this legislation more palatable, the government has pointed to existing US legislation which allows for reciprocal preclearance.  However, as a practical matter, it does not appear Canada has any interest in establishing any such post in the United States.

On the one hand, as Canadians we may be uncomfortable with making persons on Canadian soil to be subject to a foreign law.  On the other hand, the benefit to the traveller may outweigh this perhaps minor annoyance.  And one of the benefits to the Canadian traveller may be the advantage of the inspection taking place in his or home country rather than in a foreign place.  As long as the traveller is given adequate notice of his or her rights and responsibilities and the other principles of natural justice are followed, the act can do harm to Canadian sovereignty.  We will just have to wait and see.

R. v. Dodson: Bail Money, Creditors and the Right of Release

In a split decision the Court of Appeal for Ontario has ruled that persons who actually provide the source of bail money are not directly entitled to its return.  In R. v. Dodson, the appellants, US residents, were released on cash bail, the bail money coming from family and friends.  The appellants were two of five accused charged with break and enter and theft arising from the release of 1500 mink from a farm located in southwest Ontario.  When the accused plead guilty, the trial judge's sentence included an order for the payment of restitution to the mink farm.  The bail money was then ordered forfeited to be applied to the restitution claim.

O'Connor J.A. concurred in by Feldman, J.A., pronounced the opinion of the court.  In a dissenting opinion Laskin JJ.A. gave separate reasons.  In both opinions, the judges agreed--and the Crown conceded--that the sentencing judge had no authority for the forfeiture.  They also turned down a request for the payment of interest and for costs against the Crown.  However, they split on the appellants' request to order the money be returned to the relatives and friends who actually provided the cash, O'Connor J.A. refusing the request.

Apparently, the point of the request was to prevent the civil seizure of funds by the owners of the mink farm.  O'Connor J.A. essentially concluded that as far as the court was concerned, the money belonged to the accused for whose benefit it was posted.  Therefore, the court was not going to get involved in a civil dispute between those parties who might claim to have a right to have the funds seized to satisfy a debt or security.  Considering that others claiming a right to have the money attached were not now before the court, the appeal judges considered it more just to leave the issue to be decided by a civil court. The circumstances would be different if the persons who put up the money were actually sureties because in that case the money would not actually belong to them.  The majority considered the effect their judgment might have on limiting the prospects of accused persons to obtain their release after arrest.  The court however considered their ruling was not a significant impediment to that right because parties who put up bail money can find ways to protect themselves at the outset.  For instance, the person providing the cash can always ask for some form of security, most often in the form of an assignment of the bail money.

Laskin, J.A. saw the case a little differently and was prepared to order the return of the money directly to those who had paid it over.  The agreed statement of facts recited that the funds were deposited from the friends and relatives on the appellants’ assurance to each of them that they would fully comply with all of the conditions of their bail and attend court as required, and on the understanding that the bail funds would be returned to the parties providing the deposit money once the criminal proceedings were completed.  From this Laskin J.A. concluded that money clearly belonged to the friends and relatives and not the accused.  In the ordinary course the money would have been given back to the accused who would have then returned it to the owners.  For Laskin, J.A., the purpose of granting the order requested was to remedy the wrong created by the forfeiture.  He relied on the case of Morris v. Kline (1922), 68 D.L.R. 222, a decision of the Quebec Superior Court, cited in Houlden and Morawetz, Bankruptcy and Insolvency Law of Canada, 3rd ed., (1993) vol. 2, s. J-13.  The case involved an insolvent accused receiving bail money from a third party.  The Quebec court held that the bail was exempt from potential garnishment at the hands of the creditors of the accused.

Finally, Laskin, J.A. felt the issue of availability of bail was of importance to the issue.  Relying on Gary Trotter, Law of Bail in Canada , 2nd Ed. (Carswell, 1999), he says:

In practice, as Mr. Trotter recognizes and as the present case demonstrates, accused persons who are incarcerated will have difficulty raising money for bail without the assistance of family and friends.  Yet, putting bail money provided by family and friends at risk from claims by an accused’s creditors creates an impediment to bail.  I do not find persuasive the suggestion that family and friends can avoid this risk by becoming sureties.  They may not want the responsibilities of a surety or they may be unacceptable to the court.  Nor do I think that their entitlement to bail money that they have provided should turn on whether they have made appropriate security arrangements.

Between the two opinions, deciding which is to be preffered is difficult.  Reasonably people may easily differ on the point.  Moreover, this is not a situation where a hard case is going to make bad law and the circumstances are not likely to recur.  We will remember that the main concern of the appellants was the actual forfeiture.  The other issue on its own might never have been litigated.  The owners of the mink farm, although given notice of the nature of the applications in court, did not seek to participate.  Perhaps then they didn't believe they had a rightful claim to the money furnished by the friends and family of the accused.  Whether one considers the money as actually still belonging to the persons who provided it or considers such persons too have a priority to the money, fairness dictates that the money should be returned to those parties without regard to the interests of the accused's creditors.

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