R. v. Gerbrandt Date:, 2013 BCPC 133

Citation: R. v. Gerbrandt Date: 20130508 2013 BCPC 0133 File No: 86556-1 Registry: Port Coquitlam IN THE PROVINCIAL COURT OF BRITISH COLUMBIA REGINA v. JAMES GERBRANDT ORAL REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE DE COUTO Counsel for the Crown: A. King and A. Ip Appearing on their own behalf: The Accused, J. Gerbrandt Place of Hearing: Port Coquitlam , B.C. Dates of Hearing: October 29, 30, 31, November 1, 2, 26, December 20, 21, 2012;

March 11, 12, 25, 2013 Date of Judgment: May 8, 2013 [ 1 ] THE COURT : The charge was laid in Port Moody and the trial was heard in Port Coquitlam. The matter was put over to today for decision here in New Westminster because this is where I am.

The matter is for decision this afternoon and I am prepared to render my decision. [ 2 ] The accused, James Gerbrandt, was charged jointly with Dale Edward Baron on Count 1 of a two-count Information sworn on April 21st, 2011 in that they, on or between November 3rd, 2009 and May 2nd, 2010, at or near the City of Port Moody, in the Province of British Columbia, did make or participate in, consent to or acquiesce in the making of false or deceptive statements in a statement or answer made orally or in writing pursuant to the Customs Act , R.S.C. 1985, c. 1 (2nd Supp.) or the Regulations thereto to wit: made false statements to the Canada Border Services Agency in regards to the importation into Canada of a vessel named "Patty M", contrary to s. 153 (

a) of the Customs Act thereby committing an offence contrary to s. 160 of the Customs Act . [ 3 ] There was a second count on the Information charging an offence under s. 153 (

c) of the Customs Act , but it only applied to Mr. Baron. [ 4 ] Sometime prior to the commencement of the trial the co-accused, Dale Baron, dealt with the charges by pleading guilty and the trial accordingly proceeded before me on Count 1 against the remaining accused, Mr. Gerbrandt, who was self-represented. [ 5 ] The relevant

section of the Customs Act , s. 153(

a) provides: 153. No person shall (

a) make, or participate in, assent to or acquiesce in the making of, false or deceptive statements in a statement or answer made orally or in writing pursuant to this Act or the regulations.... [ 6 ] The accused is a self-described import agent carrying on business under the name "Adventure North Yachts" and is involved in the business of assisting purchasers of vessels outside Canada by acting as their agent to obtain and prepare the necessary forms and other documents needed to import such vessels into the country, and in the calculation of the duties and taxes payable to Canada Customs. [ 7 ] Mr.

Dale Baron was such a purchaser who engaged the services of Mr. Gerbrandt to help him navigate through the importation process. He bought the "Patty M" a 62-foot Nordhavn motor yacht in California. It was built in Taiwan and shipped to a purchaser in Texas who registered it in the State of California. [ 8 ] After purchasing it, Mr. Baron arranged to have it imported into Canada and on entering Canadian waters reported in to the Canada Border Services Agency (hereinafter referred to from time to time as "CBSA") by way of a telephone reporting centre in Victoria.

He docked it at Reed Point Marina in Port Moody on May 1st, 2010. CBSA agents boarded it at that point to obtain a Customs declaration from the owner, to determine the Customs duties and taxes payable on the yacht, and to arrange for the payment of same. [ 9 ] At the time the agents boarded the vessel, Mr. Gerbrandt was not on the yacht or anywhere close to it. He was outside the Province. [ 10 ] Although Mr.

Baron had paid 1.1 million dollars for the "Patty M", when asked by the agents for the vessel's declared value, he declared it as $615,867 which was just the base value of the vessel without taking into account the numerous other parts and accessories that had been added to it.

It was set out in one of two bills of sale that the accused had arranged to have prepared, the other bill being one for $384,133 which was for accessories added on to the base price. [ 11 ] I will refer to the reasoning given by the accused in arranging to have two bills of sale prepared later in my reasons. [ 12 ] Despite being given several opportunities at the time to declare the full value, Mr. Baron did not take advantage of those opportunities, resulting in the charge against him and the accused under s. 153 (

a) for failing to disclose the full purchase price. [ 13 ] The "Patty M" was detained but later released to Mr. Baron upon payment of the duty and taxes calculated on the undisclosed amount of the purchase price and the penalty imposed for the non-disclosure. Notwithstanding having paid those amounts, he was subsequently charged as noted above together with Mr. Gerbrandt. [ 14 ] The charge against Mr. Gerbrandt was laid following a search of his residence by CBSA agents on September 22nd, 2010 conducted pursuant to a search warrant and the seizure of a large number of files and documents relating to Mr.

Baron's purchase and importation of the vessel and the accused's involvement in the transaction. [ 15 ] While it is not disputed that Mr. Baron only declared the base value of the boat to the Customs agents and not the true value, the Crown's theory is that Mr. Gerbrandt participated in that false declaration by being a party to the making of the false statement, or by counselling Mr. Baron to make such a statement. [ 16 ] The prosecution of the case is based on a portion of an email sent by the accused to Dale Baron, the purchaser of the "Patty M" dated March 26th, 2010 in which he listed the steps for Mr.

Baron to follow upon bringing the vessel into Canada. He opened his instructions with the following statement: "On bringing the boat into Canada, do the following...." [ 17 ] He then listed 14 points. Under point 12 he wrote: 12. They [that is referring to Canada Customs] may ask for the boat documents which you will have on board as well as the bill of

sale. [ 18 ] He then wrote in the next point, number 13: 13. I have attached the bill of sale that you will present if asked. That is what you paid for the boat and the related equipment as it is stated on that bill. [ 19 ] The accused attached the bill of sale that disclosed the vessel was sold for $615,867. [ 20 ] There was no reference in this email to the second bill of sale that had been prepared and which listed the price of the added on parts and accessories to the "Patty M". [ 21 ] Ms.

King on behalf of the Crown has pointed to this email showing the accused's intent in participating in the offence or being a party to the offence under s. 21 of the Criminal Code or counselling the commission of the offence, pursuant to s. 22 of the Criminal Code . [ 22 ] Mr. Gerbrandt on the other hand took the opposite view and maintained that he never intended for Mr. Baron to only produce one bill of sale.

His argument was that he fully expected to have both bills of sale produced to the CBSA agents when declaring the boat with an accompanying explanation for the reason behind the presentation of the two bills of sale and had conducted all of this work with that purpose in mind. [ 23 ] In my view, the determination as to whether those portions of the email of March 26th, 2010 referred to above establishes the commission by Mr. Gerbrandt of an offence pursuant to s. 153 (

a) of the Customs Act requires an examination of the evidence as to the business relationship between the accused and Mr. Baron and the context within which that email was written, rather than considering it in a vacuum in isolation from the rest of the evidence. [ 24 ] This of necessity requires a careful review of the numerous documents produced in this trial. When that is done, it is apparent that much of the case centres on that documentary evidence comprised of exchanges of emails, documents, and other correspondence.

There were over three large binders of documents as well as a number of loose ones that were tendered as exhibits in the course of the trial. A number of those documents were duplicitous adding to the difficulty of following the document trail in these proceedings. [ 25 ] Reference was also made to sections of the Customs Act , Customs Tariff , S.C. 1997, c. 36 and to some of the numerous schedules attached to those statutes that set out the applicable tariffs to listed items that are as far ranging as there are products imported into this country.

I am told that in total there are over 1,000 pages that make up this compendium of legislation. [ 26 ] To complicate matters further, the applicable tariffs also vary from country to country, depending on whether the country is considered a "Most Favoured Nation" or otherwise as determined by various international free trade agreements in place such as the North American Free Trade Agreement otherwise known as NAFTA. [ 27 ] I am further told this area is so complex that Canada Border Services Agency in Ottawa issues memoranda from time to time explaining the various schedules and tariffs thereunder to its agents to assist them in applying the proper tariff to products and in the calculation of the applicable duty. [ 28 ] It is quite understandable that in these circumstances a purchaser of a yacht seeking to import it into the country would look to a broker or agent to assist him to navigate this complex area in obtaining the necessary documents and forms and in filling them out properly to ensure that the appropriate duties and taxes are paid on the purchase. [ 29 ] That is what Mr.

Baron did when he purchased the 62-foot Nordhavn motor yacht, the "Patty M" in California. He contacted Mr. Gerbrandt by telephone and sought his services to arrange for the importation of the "Patty M" into Canada from the United States. That telephone contact was made on December 8th, 2009 during which Mr. Baron provided some basic information as to where he could be contacted, the name and other particulars of the broker who was acting for the seller, and a brief description of the yacht. He also agreed to the fee that Mr. Gerbrandt was going to charge for his services.

The notes relating to this telephone conversation were found among the material seized from Mr. Gerbrandt's residence. [ 30 ] The next day, the accused prepared a retainer agreement and contract dated December 9th, 2009 between Adventure North Yachts as agent, and Dale Baron as the purchaser/importer, which Mr. Baron signed. [ 31 ] In that contract, Mr.

Baron agreed to the following terms: • That he will retain the services of Adventure North Yachts as his agent to prepare and submit to Canada Customs & Revenue the necessary Canadian Customs and duty documents for the importation into Canada of a 62-foot Nordhavn motor yacht that was purchased through Pacific Asian Enterprises; • That in exchange for the payment of $15,000 plus taxes, the agent will on a best efforts basis obtain and complete all necessary forms and documents provided for the importation of the yacht; • That it was to be understood and agreed that all duties, taxes, and expenses associated with the importation will be his sole responsibility; • That the agent has not made any representations concerning any amount of taxes or duty that may be levied on the vessel by Canada Customs or PST or GST agencies; and

• In particular that the agent has not made any representations that the vessel will be allowed into Canada by Canada Customs duty free; • That any and all duties and taxes however assessed by Canada Customs & Revenue or by any other government agency shall be the responsibility of the purchaser/importer; • That the agent's fee will be payable in full regardless of the amount of duties or taxes that might be levied on the importation of the vessel by Canada Customs or GST and PST agencies. [ 32 ] The accused accompanied this agreement with a covering letter to Mr.

Baron under the same date in which he confirmed that he would act on Mr. Baron's behalf in regard to the importation into Canada of the 62-foot Nordhavn yacht and wrote, inter alia : Based on a selling price of 1.1 million dollars plus today's dollar conversation rate, the boat having been built in Taiwan attracting a duty of nine and one-half percent, GST of five percent and PST of seven percent, I have calculated the Canadian dollar cost of the boat landed in Canada.... [ 33 ] He sets out his calculation with a total amount showing as $1,434,889.60 of which the total duty, GST and PST amounted to $164,888.30.

As noted by Mr. Gerbrandt, these were only preliminary figures. [ 34 ] He also wrote that his job was not just to get the boat legally into Canada, but was to also save as much of the duty and taxes as possible. The accused also prepared and enclosed a power of attorney appointing Mr. Gerbrandt as his agent for the purchaser to sign and which was subsequently signed by Mr. Baron. [ 35 ] Once Mr. Gerbrandt was retained, he contacted a Mr. Larry Dieselman of Pacific Asian Enterprises Inc., a Nordhavn dealership located in California and the broker acting for the seller of the "Patty M".

In an email sent on or around December 10th, after thanking Mr. Dieselman for providing him with the "U.S. Assembler Declaration", he further asked for the sale price of the boat when new and the price paid by the first buyer, the sales profit and commission on the first sale, and the sale price and commission on the second sale, on his understanding that Mr.

Baron was the third owner. [ 36 ] In addition, in that email he sought the following information: the value of equipment and its installation costs for items that were added in the United States after the boat was imported into that country such as dinghy, motor, (indiscernible), electronics and the like. [ 37 ] Mr. Dieselman replied in an email dated December 10th, 2009 providing the information. The accused thanked Mr. Dieselman for the information in a follow-up email dated December 15th, 2009 and asked Mr.

Dieselman to prepare two separate bills of sale for "the separate components of this sale" together with the "transfer of title document" and "clearance from U.S. Ship Registry". [ 38 ] In another email of the same date, he asked Mr. Dieselman to prepare two bills of sale, the first for $615,000 U.S. for a 2001 62 Nordhavn yacht and the second one for $485,000 U.S. for commissions and sales consulting and for used electronics and marine equipment. [ 39 ] Mr. Dieselman sent a subsequent email to Mr.

Gerbrandt on December 18th, 2009 in which he listed extra items that were added to the yacht after it was shipped from the factory together with the approximate price of each item. There were some 22 items listed. He concluded the email with the statement, "These items are in addition to the Foreign Assemblers Declaration". [ 40 ] On January 4th, 2010, Mr. Gerbrandt sent an email to Mr. Dieselman with a blank certificate of origin and a blank bill of sale as attachments. He asked Mr.

Dieselman to print the two documents and with respect to the first document requested that he fill in the company name, address and zip code in the space provided and to complete and sign the last three lines on the form. He asked that the rest be left blank stating, "I will code the form to show that the boat originated in Taiwan which is consistent with the rest of the documentation when the boat enters Canada". He asked that the second document be completed as per the instructions he set out in the email with the consideration received to indicate $615,000 and other valuable consideration.

He also asked for copies of the closing documents, the vessel registration certificate for the State of California, and the documentation removing the vessel from the U.S. Registry. [ 41 ] By email dated January 4th, 2010 he reported to Mr. Baron that he had received certain documentation and was working on getting the rest of what he needed and asked Mr. Baron to send him certain documents that the latter had previously received. [ 42 ] On March 4th, 2010, Mr. Gerbrandt sent an email to Mr. Baron attaching a letter he received from a Mr.

Dan Streitch (phonetic), President of Pacific Asian Enterprises, which set out the details of the sale on a single page. It listed the total price of the vessel as U.S. $1,100,000 and the base value of the boat at $615,867 after a deduction of $100,000 paid for commission and deductions which totalled $384,133 for depreciation, the price of the U.S. products installed when it was originally built, and of those products added to the boat in the United States were made. [ 43 ] In the email the accused explained that the letter "sets out the business arrangement and shows the purchase price of the boat itself".

He also attached a copy of two separate bills of sale explaining "The attached bills of sale more accurately reflect the business nature of the transaction and it is necessary to have two separate ones as duty and taxes are assessed differently for the different category of goods". [ 44 ] That email was followed up by a subsequent one from the accused to Mr. Baron dated March 11th, 2010 in which he wrote:

Dale, Further to our conversation and my last email, I have attached some excerpts from the North American Free Trade Agreement between Canada and the U.S. (NAFTA). We are not attempting to do anything illegal in importing this boat into Canada. We are simply trying to apply the NAFTA trade rules to our best advantage so that you will not have to pay any more duty than you are legally required to. The total amount of money you pay as per the letter from Pacific Asian Enterprises (Scan 003) was $1,100,000 but as per that letter only $615,867 was paid for the Asian product manufactured in Taiwan.

That is subject to a 9½ percent duty. The U.S. product as per that letter was $484,133 and as the U.S. is considered a Most Favoured Nation according to NAFTA, there is no duty to be assessed on that amount. We are simply asking for two separate bills of sale to reflect each component of the total sale. On page 2 of the Customs Tariff

schedule attached (Scan 001 and 33) you will see that the U.S.A. is designated as a Most Favoured Nation. On the Customs Tariff

schedule dealing with imported yachts attached (Scan 55) you will see that yacht products "UST" come into Canada duty free but that Taiwan products attracts a 9½ percent duty. The document "Tariff Treatments General" attached (Scan 99) shows that the U.S. is to be designated "UST" on the Customs Tariff Treatment

schedule and therefore is a duty free designation. I have also attached the NAFTA Rules of Origin Regulations (Scan 0004, 0005, 0006, 0007 and 0008) which shows that U.S.A. products manufactured in the U.S. comes into Canada duty free. There is no doubt that the goods, having a value of $484,133 as set out in the Pacific Asian letter (Scan 003) have been produced solely in the U.S. and are therefore entitled to a NAFTA duty free status.

We are not asking you to do anything illegal as I mentioned earlier, but if there is only one bill of sale showing the combined value of both parts of this purchase, then it is entirely possible that Canada Customs will glance at the number, misinterpret the true meaning of this purchase and charge Dale too much in duty. We hope that you are agreeable to completing the two bills of sale which more accurately reflect the values for import into Canada of the various parts of this transaction. [ 45 ] The accused followed up this email with a subsequent one dated March 17th, 2010 in which he advised Mr.

Baron that with those documents his chances of a reduced duty entry went up from 10 percent to 90 percent but added: There is no guarantee of anything at Canada Customs. As I have found in the past, the different officers apply the same rules differently. I am confident now that we will achieve our objective but it is possible that Customs could insist on applying the duty to everything on the basis that it is attached to a foreign boat regardless of the fact that the items are definitely U.S. products. [ 46 ] The next email sent by the accused to Mr.

Baron is the one of March 26th, 2010 referred to earlier which Ms. King has relied on, arguing that it shows the accused's participation in the making of the false declaration by either counselling Mr. Baron to do so or by being a party to it. [ 47 ] In addition to the above, Mr. Gerbrandt prepared various documents including the necessary forms to present to Canada Customs which have been referred to as a Form B3. These documents were found in folders by CBSA agents following the search of Mr. Gerbrandt's residence on September 22nd, 2010.

One of them contained the Form B3 showing the base value of the boat as U.S. $615,867 and the code number indicating the applicable tariff

schedule and a certificate of origin listing the tariff specification number for purposes of establishing the appropriate duty payable as 9.5 percent. Also attached was a completed Canada Customs invoice relating to the boat. [ 48 ] Another file folder contained a second Form B3 that listed the code number and the amount paid for the added U.S. produced marine electronics and gear at $384,133, the certificate of origin listing the country of origin as the U.S., and the tariff classification number for that category of products to show that those items were duty free. [ 49 ] It was Mr.

Gerbrandt's intent that he would be present when the "Patty M" was imported into Canada to assist Mr. Baron in handling the importation process with Canada Customs. This is reflected in his email to Mr.

Baron sent on March 17th, 2010 in which he wrote that he needed to be present when the boat landed stating that after arrival he had three days to complete the Canada Customs import procedure and to pay the necessary duties and taxes and suggested that he bring the boat in sometime after May 5th as he would be out of the country until then. [ 50 ] The accused had testified in his own defence to the effect that his intent throughout was to have two separate bills of sale prepared, one showing the foreign component of the purchase and the other showing the U.S. produced components as those products enjoy Most Favoured Nation status in calculating the duty.

That duty was zero percent thereby reducing the total amount of duties and taxes the purchaser would have to pay. [ 51 ] As noted above, he also insisted that he never intended for Mr. Baron to produce only one bill of sale and that when he did so, it was done without his knowledge and came as an absolute surprise to him. [ 52 ] His position remained unchanged in cross-examination.

When he was made aware by the Crown of an error he made in recording the tariff classification number on the Form B3 for the U.S. produced goods by inserting an extra digit and while it was suggested to him that he had done that intentionally in an attempt to deceive Canada Customs, he denied the suggestion and said it was a mistake. [ 53 ] When it was put to him that the tariff classification number he assigned and recorded on the form for the U.S. made products which he described as "marine electronics and appliances" was nonsensical and that much of those items were not related to marine electronics or appliances, he replied that he did the best he could with the complex, comprehensive and voluminous maze of schedules and their contents and attempted to find the appropriate category for the products although he was aware that the list also changed from time to time.

He denied classifying them intentionally in the way he did to mislead Canada Customs in an attempt to evade the payable duties on them. [ 54 ] While much time was spent on cross-examining the accused on his method of classifying the products under the tariff classification number, it seems to me that whether Canada Customs would accept his classification of those goods in the way he did for purposes of assessing the applicable duty is in my view an administrative function for them to exercise when that information is

presented to them for such assessment. As was pointed out by Mr. Gerbrandt to Mr. Baron in his email of March 17th, 2010: There is no guarantee of anything at Canada Customs. As I have found in the past, the different officers apply the same rules differently.

I am confident now that we will achieve our objective but it is possible that Canada Customs could insist on applying the duty to everything on the basis that it is attached to a foreign boat, regardless of the fact that the items are definitely U.S. products. [ 55 ] However, the issue as to whether the accused had listed the products under the appropriate tariff classification for purposes of determining the applicable duty never became an issue as Mr. Baron failed to disclose that component of the purchase price to the CBSA agents when they boarded the "Patty M" and took Mr.

Baron's declaration of value. [ 56 ] In my view, whether Mr. Gerbrandt properly identified the U.S. product under the appropriate tariff classification number, is somewhat of a red herring in these circumstances as the issue before the Court is to determine whether Mr. Baron's failure to make full disclosure contrary to s. 153 (

a) of the Customs Act was with the participation and involvement of Mr. Gerbrandt. [ 57 ] In support of the Crown's application that the accused was such a participant, Ms. King relied on the following authorities among those she had provided to the Court: R. v. Snell , [2007] B.C.J. No. 1058, 2007 BCPC 146 ; R. v. McDonough , 2012 ONSC 3712 ; and R. v. Forster , [1992] 1 S.C.R. 359 . [ 58 ] Snell ¸ supra , involved the importation into Canada from the States of 33 parrots which the accused and his father paid for.

At the border, both actively engaged in knowingly giving false statements relating to the birds from an initial statement by the accused that they had received them for free to a statement by the father that they had been obtained under a "loan agreement" and had not paid for the parrots. Clearly, those declarations involved the making of false statements and on that basis Snell is distinguishable from the situation facing Mr.

Gerbrandt. [ 59 ] In McDonough , supra , the accused was convicted of making false or deceptive statements in writing contrary to the Customs Act by falsely describing the components of a single motor vehicle as automobile parts. [ 60 ] McDonough was a car dealer who took an order from a Mr. Fidani to import a Caterham CSR 260 sports racing car from a dealer in the United Kingdom as Mr. Fidani was unable to do it on his own as it could only be done through a registered broker and dealer in Ontario. [ 61 ] The accused structured the importation in two separate shipments to arrive at different times.

One was addressed to the purchaser and was declared as "automotive starter assembly kit" while the other was addressed to the accused and reported as "replacement parts". [ 62 ] The trial court found that the accused was not only intimately and intricately involved in the approval process, but had also directed a number of changes to the invoice which included such directions as "change invoice number and date", "change order number", "change order to deliver to codes", "add replacement parts" and "remove parts and chassis number as indicated".

The starter kit came to Canada in one shipment and the accused took the necessary steps to have it released. [ 63 ] The other shipment of replacement parts arrived at a later date and the accused told the CBSA official that it was only parts and was for two cars. It was examined by the officials and the accused was subsequently interviewed by CBSA investigators. At that interview he denied that the parts were related to the importation of the starter kit delivered earlier, and told the agents that the shipment was of parts, mostly for two vehicles.

He further stated that he had a 1985 Caterham and that most of the parts were for that vehicle as he was rebuilding it himself. [ 64 ] The accused appealed his conviction, and in dismissing the appeal, the appeal court stated in para. 16: [16] This was not a case about classification. It was a case about whether Mr. McDonough knowingly made false statements, orally and in writing, to customs officials about these two shipments. [ 65 ] The facts as found by the court clearly showed that the accused made false statements to the officials. As Miller J. noted in para. 25: [25] Mr.

McDonough's position that he never made a false declaration and was complying with the rules as he understood them does not stand with his statement to customs officials that the pieces in the second shipment were meant for his own vehicle. [ 66 ] Thus, in McDonough , supra , the accused was directly involved with the Customs officials in the making of the false declarations himself which is very different from the circumstances involving Mr.

Gerbrandt in the case at bar and is distinguishable on that basis. [ 67 ] Although the Crown submitted that the misclassification of the U.S. produced goods were indicative of Mr. Gerbrandt's scheme to deceive Canada Customs and thus corroborative of his instructions to Mr. Baron as set out in his email of March 26th, 2010 and of his participation or involvement in the offence, I note that in his business dealings with Mr. Dieselman of Pacific Asian Enterprises Inc. and with Mr. Baron and others, he was always open in explaining what he was doing and requesting.

With respect to the U.S. produced products, he explained what he was doing to Mr. Baron in the email of March 11th, 2010 as reproduced above and also attached what he considered to be the relevant portions of the NAFTA and the other applicable tariff schedules and classifications that supported his position. In my view, this is also consistent with his viva voce testimony in explaining his intent in doing so. [ 68 ] As observed by Miller J. in the above case, this is not a case about classification, that is, whether the tariff code the accused

used for the various products were appropriate for purposes of determining the applicable duty as the enquiry by the CBSA officials of Mr.

Baron never advanced to that stage, but rather whether the accused participated in the making of the false statement when the purchaser only declared the base value of the boat and not the cost of all the added-on products. [ 69 ] When the evidence is considered in its entirety, I note that with the exception of the email relied on by the Crown, the accused consistently referred to and insisted on the necessity of obtaining two bills of sale in the manner he had set out for the reasons he provided. It is reflected in the emails and other correspondence to Mr.

Baron and to the selling broker and in so doing in my opinion he made it clear as to the approach he was taking for the purposes stated, that is, in an attempt to minimize the amount of duty and taxes that will be payable by the purchaser, although he did also advise Mr. Baron that there was a degree of risk to it. [ 70 ] As a starting point, in the retainer agreement and contract signed by Mr. Baron and referred to above, he made it clear that all duties and taxes associated with the importation of the boat would be the sole responsibility of Mr.

Baron, that he had not made any representations concerning any amount of taxes or duties that may be levied on the vessel by Canada Customs, and that any and all duties and taxes however assessed by Canada Customs & Revenue would be his responsibility. In a covering letter, he advised that he viewed his responsibility to be to get the boat legally into Canada and in doing so to save as much of the duty and taxes as possible. [ 71 ] In correspondence with Mr.

Dieselman, the seller's broker, he stated that he required two separate bills of sale to distinguish the separate components of the sale, that is, one for the value of the yacht and the other for used electronics and marine equipment which were comprised of the added-on products to the "Patty M". [ 72 ] In a later email to his customer dated March 4th, 2010, the accused attached a letter he had received from the seller's broker which broke down the total selling price of the vessel into the various component parts as he had requested and explained to Mr. Baron that the letter "sets out the business arrangement".

In that email, he also attached a copy of the two separate bills of sale and explained as noted earlier in my reasons, "The attached bills of sale more accurately reflect the business nature of the transaction and it is necessary to have two separate ones as duty and taxes are assessed differently for the different category of goods". [ 73 ] I have also earlier referred to the email sent by Mr. Gerbrandt to Mr.

Baron attaching a copy of excerpts from NAFTA, what he considered were the relevant Customs tariff schedules, as well as the NAFTA Rules of Origin Regulations, in which he explained and described the rationale behind the approach he was taking.

However, as noted previously, in a follow-up email dated March 17th he cautioned that there was no guarantee of anything based on his experience with how the tariff was applied differently by the different Customs officers and that it was possible that Canada Customs would insist on applying the duty to everything on the basis that the parts were attached to a foreign boat regardless of the fact that the items were U.S. products. [ 74 ] It seems to me that the common theme running through all of these exchanges indicates an intent to disclose both components of the sale, that is, the base value of the boat as the foreign component, and the other products as produced in the United States on the basis that they should thus enjoy the application of the Most Favoured Nation status in the determination of the appropriate duty, although there remained the possibility that Canada Customs would not see it that way. [ 75 ] As also noted by Mr.

Gerbrandt, he was getting a flat fee for his services so it did not matter to him what amount Mr. Baron ended up paying in duties and taxes. Why would he in such circumstances try to arrange a process for his client to evade taxes rather than minimize them and in doing so perpetrate an offence? In what way would such a scheme benefit him? What would be his motive for doing so? All it would do as happened in this case would be to put his client at risk and jeopardize his business and reputation.

Why would he go through all the time and effort he expended in obtaining the detailed information of the origin of the products added onto boat if his intent was to ignore it all at the end? It makes no sense never mind any business sense. [ 76 ] It seems to me that Mr. Gerbrandt's actions, considered in their totality, are consistent with his stated purpose as given by him in his viva voce testimony. [ 77 ] Lastly, in an email I have noted above sent by Mr. Gerbrandt to Mr.

Baron dated March 17th, 2010, he wrote that he needed to be present when the boat came in and suggested that it would be best to time the arrival in Vancouver after May 5th when he would be available. It is apparent from this email that the accused wished to be present at the time to assist Mr. Baron with the importation procedure and in explaining the reasoning behind the two bills of sale to the authorities. However, Mr. Baron chose to ignore that request and at the critical moment he decided to proceed on his own without the attendance of assistance of Mr. Gerbrandt. At that moment in time, Mr.

Baron was aware of Mr. Gerbrandt's business plan as set out in the previous correspondence to him, had the various documents with him, and in particular the two bills of sale. It was his choice to produce only one of them to the CBSA officials and not disclose the existence of the other. [ 78 ] Mr. Gerbrandt had no control over what Mr. Baron said or did. Can it be said that in those circumstances the accused knowingly participated in the making of the false statement to Canada Customs by Mr. Baron?

I think not. [ 79 ] Upon a careful consideration of all of the above noted circumstances and the observations I have made, I am not persuaded that the Crown has proven the charge against Mr. Gerbrandt that he participated in the making of a false statement by Mr.

Baron in any of the different ways stated by the Crown beyond a reasonable doubt and accordingly find him not guilty. [SUBMISSIONS AND DISCUSSION RE SEIZED ITEMS] [ 80 ] THE COURT: What I am going to do since the Crown has 30 days to consider whether they are going to appeal my decision or not I am going to order that if there be no appeal in this matter, that all items seized and any copies of items seized be returned to Mr. Gerbrandt forthwith. [ORAL REASONS FOR JUDGMENT CONCLUDED]