Date: 20001129
Docket: A-262-99
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
RICHARDS PACKAGING INC. AND DUOPAC PACKAGING INC.
APPELLANTS
AND:
DEPUTY MINISTER OF NATIONAL REVENUE
RESPONDENT
AND:
EASTMAN CHEMICAL CANADA INC.
RESPONDENT
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
[1] We are called upon in this appeal under section 68 of the Customs Act (Act) R.S.C. 1985, 2nd Supp. as amended to determine whether the Canadian International Trade Tribunal (Tribunal) erred in coming to the conclusion that the goods in issue did not qualify as "moulding compositions" within the meaning of Tariff Code 7902 of the Chemicals and Plastic Duties Reduction or Removal Order (1988)(Order) adopted pursuant to subsection 68(1) of the Act. The goods in issue are polyethylene terephthalate (PET) resin in pellet form used to manufacture plastic bottles.
[2] In support of his arguments, counsel for the appellants submitted that the Tribunal erred in law in finding that the definition of the word "composition" in Supplementary Note 2(a) to Chapter 39 of Schedule I to the Customs Tariff applies to the interpretation of the words "moulding composition" found in the Order.
[3] The words "moulding composition" as used in Tariff Code 7902 and "composition" found in that Supplementary Note read as follows:
| Moulding compositions of the following, including partially formulated moulding compositions: |
| 7902 |
| Saturated polyesters of tariff item No. 3907.99.00 and goods of tariff item No. 3907.40.10, 3907.40.90, 3907.50.00, 3907.60.00 or 3915.90.50 excluding the following: |
| Polyethylene terephthalate, having a titamium dioxide delustrant content between 0.2% and 0.6% Aromatic saturated polyester polyols. |
| Supplementary Notes |
| 2.(a) For the purpose of classification within any one subheading of this Chapter, the expression "composition" means only those polymers, copolymers, polymer blends and chemically modified polymers containing non-polymeric substances such as: |
| (i) initiators, activators and catalysts, to assist in the action or use of the polymeric substances in some intended substances; |
| (ii) colourants; |
| (iii) fillers, reinforcing agents, solvents, fire retardants, plasticizers and similar additives, present in amounts generally more than 1% by weight. |
He contended that we should intervene whether the applicable standard of review of the Tribunal's decision is correctness, patent unreasonableness or reasonableness simpliciter. He argued that this issue decided by the Tribunal was one of pure interpretation and application of the Act and fell to be decided on a standard of legal correctness. In any event, he averred that the Tribunal's finding was so unreasonable as to violate any of the reasonable standards of review.
[4] With respect to the standard of review, the Crown has conceded at the hearing that the applicable standard is that of reasonableness. In any event, we see no reason to depart from the one established by this Court in Minister of National Revenue (Customs and Excise) v. Schrader Automotive Inc. (1999) 240 N.R. 381, at p.382-383, with respect to the Tribunal's decision:
| The Canadian International Trade Tribunal is, clearly, a specialized tribunal. It is even more so when the decision at issue is with respect to the Customs Tariff Act. That Act is a statutory enactment and its interpretation thereby becomes a question of law, hence the right to appeal tariff decisions to this Court on a question of law. Yet, the Customs Tariff, law as it may be, is nonetheless a law of a very technical nature. It is legislation of such a specialized nature and expressed in terms that have so little to do with traditional legislation that for all pratical purposes the Court is being asked to give legal meaning to technical words that are well beyond its customary mandate. Furthermore, there are unique Canadian and international rules of interpretation applicable to the Customs Tariff that bear little resemblance to the traditional canons of statutory construction. Therefore, considerable deference should be accorded to the Tribunal's decisions and litigants who appeal tariff decisions to this Court should be aware that they have a tough hill to climb. |
[5] In a situation analogous to the present one, this standard was subsequently applied by this Court with respect to a decision of the Tribunal which interpreted the meaning of the word "priming" for the purposes of Code 6472 of the schedule to the Customs Duties Reduction or Removal Order, 1988, No.1: see Spalding Canada Inc. v. The Deputy Minister of National Revenue, A-123-98, 23 April 1999.
[6] If despite these decisions, there was still a possible ambiguity on this issue, we believe that it has been dissipated by the decision of Sharlow J.A. in Yves Ponroy Canada v. Canada (Deputy Minister of National Revenue - M.N.R.) [2000] F.J.C. No. 1207 where she wrote:
| [32] The most important factor is the nature of the CITT as an expert tribunal in matters of international trade, imports and import tariffs. That the CITT is an expert tribunal cannot seriously be doubted. It is not simply an adjudicative body. It is also an investigative body, entitled to conduct inquiries, with the assistance of experts it retains, dealing with a broad range of trade matters arising from a complex array of a number of related statutes, some of which incorporate the terms of international agreements to which Canada is a signatory. |
| [37] ... the analysis to be undertaken by the CITT in customs tariff classification decisions appeals must necessarily be influenced by the CITT's special knowledge of import and tariff policy and the related legal regime. It follows, in my view, that it is not appropriate to review such decisions against a standard of correctness, as the Crown has contended. I conclude that the appropriate standard is reasonableness as stated in Schrader. |
[7] Applying the reasonableness simpliciter standard, we are satisfied that the Tribunal's decision that the goods in issue were not "moulding compositions" is reasonable and supported by the evidence. In our view, it was open to the Tribunal to take guidance from Supplementary Note 2(a) in giving a meaning to these words as they are used in Code 7902. The Tribunal was required to give a meaning to technical words used in a technical environment falling within its domain of expertise. It relied largely on expert evidence to do so and considerable deference should be given to its findings.
| [8] The appeal will be dismissed with costs to the respondents. |
"Gilles Létourneau"
J.A.
Montreal, Quebec
November 29, 2000