Federal Court Decisions

     T-2831-94

BETWEEN:

     CONTINUOUS COLOUR COAT LIMITED

     Appellant

AND:

     DEPUTY MINISTER OF NATIONAL REVENUE

     FOR CUSTOMS AND EXCISE

     Respondent

     REASONS FOR JUDGMENT

JOYAL, J.:

     This appeal, pursuant to section 68 of the Customs Act¹ (the "Act"), is from a decision of the Canadian International Trade Tribunal (the "CITT") confirming the Deputy Minister of National Revenue's tariff classification of the Appellant's goods. The main issue raised in this appeal is whether the CITT erred as a matter of law in upholding the Deputy Minister's decision².

     The goods in question are sheets of plastic, produced in the United States by the Dunmore Corporation of Newtown, Pensylvania, and imported into Canada by the Appellant for use as a coating for its steel and aluminum products. The sheets are made by laminating a film of dyed polyethylene terephthalate (the "PET" layer) together with a polyvinyl chloride plastic backing (the "PVC" layer). The PET layer represents approximately 10 percent of the total weight of the product, while the PVC layer represents over 85 percent. The sheets of plastic are ultimately used in the manufacturing of a broad range of goods requiring brass-plated, gold-plated or silver-plated metal.

     The Deputy Minister ruled on two occasions that the goods were dutiable under tariff item No. 3920.42.00 of Schedule I of the Customs Tariff³ (the "Tariff"), as:

-      Other plates, sheets, film, foil and strip, of plastics, non-cellular and not reinforced, laminated, supported or similarly combined with other materials.

-      Of polymers of vinyl chloride

-      Flexible

     Other relevant provisions of the Tariff are as follows:

1.      Rule 1 of the General Rules for the Interpretation of the Harmonized System:

The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.

2.      Note 4 to Chapter 39 of the Tariff:

For the purpose of this Chapter, except where the context otherwise requires, copolymers (including co-polycondensates, co-polyaddition products and graft polymers) and polymer blends are to be classified in the heading covering polymers of that comonomer which predominates by weight over every other single comonomer, comonomers whose polymers fall in the same heading being regarded as constituting a single comonomer.

If no single comonomer predominates, copolymers or polymer blends as the case may be, are to be classified in the heading which occurs last in numerical order among those which equally merit consideration.

The expression "copolymers" covers all polymers in which no single monomer contributes 95% or more by weight of the total polymer content.

3.      Subheading Note 1 to Chapter 39 of the Tariff:

Within any one heading of this Chapter, copolymers (including polycondensates, co-polyaddition products, block copolymers and graft copolymers) are to be classified in the same subheading as homopolymers of the predominant comonomer and chemically modified polymers of the kind specified in Chapter note 5 are to be classified in the same subheading as the unmodified polymer provided that such polymers or chemically modified polymers are not more specifically covered by any other subheading and that there is no residual subheading named "Other" in the series of subheadings concerned. Polymer blends are to be classified in the same subheading as copolymers (or homopolymers, as the case may be) of the same monomers in the same proportions.

CITT DECISION:

     The CITT upheld the Deputy Minister's decision on appeal, finding direction in the provisions of Note 4 to Chapter 39 of Schedule I to the Tariff, which governs the classification of "copolymers" and "polymer blends". In the Tribunal's view, the Tariff, and more precisely the third paragraph of Note 4, provides a broader definition of the word "copolymer" than the scientific definition relied upon by the expert witness. The Tribunal was of the opinion that the two different polymers comprising the sheets of plastic are considered to contribute to the "total polymeric content" of the goods and consequently, in accordance with direction provided by the third paragraph of Note 4 and Subheading Note 1 of Chapter 39, the goods are to be considered "copolymers" of the polymer which predominates, i.e. polymers of vinyl chloride.

POSITIONS OF THE PARTIES:

     The Appellant disputes the CITT's interpretation of the term "copolymer" found in the third paragraph of Note 4, and submits that such an interpretation constitutes an error of law which stands to be corrected by this Court. The Appellant maintains that the sheets of plastic are composite goods which ought to be classified as such, according to the General Rules of Interpretation applicable to composite goods.

     According to the Respondent, however, the CITT'S decision is based upon a reasonable interpretation of the evidence before it, and the decision should be upheld.

ANALYSIS:

     The principal question that needs to be addressed in the present case concerns the interpretation given by the Tribunal to Note 4 to Chapter 39 of Schedule I of the Tariff in regards to the Appellant's goods.

     Section 68(1) of the Act clearly stipulates that appeals thereunder are restricted to questions of law. Case law is abundant as to what constitutes proper grounds to justify the Court's intervention.⁴ Heald J. adequately summarized the applicable standard of review as follows:

The construction of the Customs Tariff is a question of law but the question as to whether the appellant's product falls within the legal definition set out in the Tariff is a question of fact. Only in cases where, in the view of the Court, the Board has acted, either without evidence or has made a determination that no person properly instructed as to the law and acting judicially could have made, the Court be justified in setting aside the Board's decision because of an error of law.5

     In order for this Court to set aside the final determination of a specialized tribunal, it must find that the assessment of the facts on which the decision is based is unreasonable⁶. The determination as to whether goods fall in a particular tariff item or another is a complex question of fact, and if there is evidence before the Tribunal upon which it could reasonably conclude as it did, this Court may not intervene, even if it might well have reached another conclusion.

     Appellant's counsel submits that the Tribunal erred by considering that a product made of two separate and distinct layers of polymer was a copolymer. The Tribunal came to that conclusion after opting for a broad definition of "copolymer" given by Note 4 and Subheading Note 1 to Chapter 39 of Schedule I, in conjunction with the HS Committee's statement.

     In the interpretation of statutes, words should be given their ordinary and usual meaning; scientific and technical definitions should be eschewed. It is a well-established interpretation rule that legislative provisions cannot be interpreted in isolation and that to find their true meaning, one must consider as a whole the Statute in which they are contained, as well as related provisions.

     When reading the definitions in the Gage Canadian Dictionary of the words "polymer"⁷, "copolymer"⁸ and "polymerize"⁹ one is inclined to conclude that a copolymer is not a polymer until it undergoes polymerization. That narrower definition, confirmed by the scientific testimony, could be designated as a more "scientific approach" as to the qualification of what constitutes a copolymer product. But when the pertinent dispositions are read as whole, Note 4 does provide an inclusive definition of the term "copolymer" which "covers all polymers [..]".

     Admittedly, an interpretation of the provisions in question is not an easy task. Some argument may be advanced that the goods in question might be classified under three or more classifications, each of which would have some semblance of legitimacy or might otherwise be found to be reasonable. This where the role of an appeal court is limited. It must not only decide which of the different classifications apply, but must first of all analyze the tribunal's finding. If that finding makes sense, or is not unreasonable, it is deserving of great respect.

     In this instance, I am not convinced that the Tribunal's interpretation was in anyway unreasonable. Faced with contradictory evidence as to the definition of polymer, the Tribunal opted for the broader interpretation given by the Act, instead of a more restrictive "scientific" one. This conclusion respects the established rules of interpretation and is by no mean less reasonable than the one submitted by the Appellant.

Conclusion

     In conclusion, therefore, and with all due respect to counsel for the Appellant's approach, I should defer to members of the CITT. Their decision is maintained and the Appellant's appeal is dismissed. The parties should bear their own costs.

     L-Marcel Joyal

     __________________________

     J U D G E

O T T A W A (Ontario)

October 27, 1997.

__________________

¹ R.S.C. 1985 (2d Supp.), c.1.

² The wording of section 68(1) of the Customs Act clearly restricts appeals thereunder to questions of law. The Section provides: " Any of the parties to an appeal under section 67, namely, (a) the person who appealed, (b) the Deputy Minister, or (c) any person who entered an appearance in accordance with subsection 67(2), may, with leave of a judge of the Federal Court, within ninety days after the date a decision is made under section 67, appeal therefrom to that Court on any question of law"

³ R.S.C. 1985 (r Supp.), c.41.

⁴ The Deputy Minister of National Revenue for Customs and Excise v. Parke, Davis & Comp. Ltd., [1954] Ex. C.R. 1 at 20; The Deputy Minister of National Revenue for Customs and Excise v. General Supply Company of Canada Ltd., [1954] Ex. C.R. 248 at 251; The Deputy Minister of National Revenue for Customs and Excise v. Ferguson Industries Ltd., [1973] S.C.R. 21 at 25-27; and more recently, Minister of National Revenue (Customs and Excise) v. Callpro Canada Inc. (1994), 85 F.T.R. 209 at 216; Praher Canada Products Ltd. et al. v. Minister of National Revenue (Customs and Excise) (1995), 97 F.T.R. 97 at 98-100

⁵ Cyanamid Canada Inc. v. The Deputy Minister of National Revenue for Customs and Excise (1983), 5 C.E.R. 463 at 466;

⁶ Deputy Minister of National Revenue for Customs and Excise v. Hydro-Québec, [1994] F.C.J. No 963(C.A.), Marceau J. p. 17-18

⁷ Polymer: any of a large number of natural or synthetic, organic or inorganic compounds composed of very large molecules [...] chemically linked together. Appeal Book p. 288

⁸ Copolymer: chemical compound made up of large molecules, formed by the polymerization of two or more different compounds (monomers). A.B. p.289

⁹ Polymerize: 1. to form a polymer;[..] 2. to undergo polymerization. A.B. p.288