Date: 20020124
Docket: A-1-01
Neutral citation: 2002 FCA 34
CORAM: STONE J.A.
BETWEEN:
YAMAHA MOTOR CANADA LTD.
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
Heard at Montreal, Quebec, on January 24, 2002.
Judgment delivered from the Bench at Montreal, Quebec, on Thursday, January 24, 2002.
REASONS FOR JUDGMENT OF THE COURT BY: MALONE J.A.
Date: 20020124
Docket: A-1-01
Neutral citation: 2002 FCA 34
CORAM: STONE J.A.
BETWEEN:
YAMAHA MOTOR CANADA LTD.
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench
at Montreal, Quebec, on January 24, 2002.)
ISSUE
[1] This appeal deals with a classification issue under various subheadings of the Schedule to the Customs Tariff, R.S.C. 1985 (3d Supp.), c. 41. The issue is whether the Canadian International Trade Tribunal ("the Tribunal") properly classified seven all-terrain utility vehicle models ("utility ATVs") under subheading No. 8703.21 as "other motor vehicles principally designed for the transport of persons" instead of under subheading No. 8701.90 as "other tractors," as claimed by Yamaha Motor Canada Ltd. ("Yamaha").
FACTS
[2] According to the record, recent developments in the industry have demonstrated the emergence of two types of all-terrain vehicles. First, there is the recreational all-terrain vehicle, which is light in both weight and load-bearing capacity, and is designed for transport over rugged terrain and not for work. Second, utility ATVs, which, as its name suggests, are stronger, heavier, and more durable. Evidence led by Yamaha indicates that utility ATVs typically have shaft drives as opposed to less-powerful chain drives, specially designed high-traction tires, four-wheel drive, towing capacity, trailer hitch, reverse gear and load-bearing suspensions that are stiffer than the suspensions found in recreational all-terrain vehicles. There was also evidence that utility ATVs have appliances such as blades, ploughs and 3-point hitches which are sold separately.
[3] Yamaha argued before the Tribunal that these characteristics demonstrated that the utility ATVs were constructed essentially for use as a tractor, which is to say, for pushing and hauling things, but the Tribunal did not agree. The Tribunal found as follows (reported as [2000] C.I.T.T. No. 106):
...[T]he evidence shows that the goods in issue have many different uses, some of which have nothing to do with pushing or hauling, some of which do. In the Tribunal's opinion, the appellant has failed to show that the goods in issue are "constructed essentially for" pushing or hauling and that they are tractors.
ANALYSIS
[4] The parties agreed that the proper standard of review in CITT classification cases is reasonableness, and that this Court cannot substitute its own interpretation for that of the Tribunal unless the Tribunal's interpretation is found to be unreasonable: Continuous Colour Coat Ltd. v. Canada (Deputy Minister of National Revenue, Customs and Excise - M.N.R.), [2000] F.C.J. No. 610 (FCA); Canada (Deputy Minister of National Revenue, Customs and Excise -M.N.R.) v. Schrader Automotive Inc. (1999) 240 N.R. 381 (FCA) at paras. 3-5; Rollins Machinery Ltd. v. Canada (1999) 247 N.R. 399 (FCA) at para. 3.
[5] In our view, the same analysis and result apply in this case. The Tribunal found on the evidence that the utility ATVs could be used not only as tractors, but also as recreational vehicles. This recreational feature is emphasised in the literature submitted by Yamaha. It is true that the utility ATV's contain design features that enable them to push and haul, functions typically performed by tractors. However, in this case the Tribunal had to classify the utility ATVs based on the legislation and Explanatory Notes entered in evidence. The Explanatory Notes to the Harmonized Commodity Description and Coding System to heading No. 87.01 ("the Explanatory Notes") state as follows:
For the purposes of this heading, tractors means wheeled or track-laying vehicles constructed essentially for hauling or pushing another vehicle, appliance or load. They may contain subsidiary provision for the transport, in connection with the main use of the tractor, of tools, seeds, fertilisers or other goods, or provision for fitting with working tools as a subsidiary function. (Emphasis added).
Clearly, a utility ATV, while capable of performing the function of pushing and hauling, also performs other functions beyond those normally associated with tractors. Because most of the features of utility ATVs are useful, not only for hauling and pushing, but also for other uses, it was not unreasonable for the Tribunal to conclude that they were not constructed "essentially" for hauling and pushing appliances or loads.
[6] In our analysis, the Tribunal's interpretation of the words "constructed essentially" found in the Explanatory Notes was not unreasonable. The Tribunal interpreted these words as meaning "going to the essence" or the raison d'êtreof the vehicle; an interpretation that is reasonable in light of that explanation. The capacity to perform as a tractor does not necessitate the conclusion that the vehicle was constructed essentially for that purpose, especially in the absence of any evidence from the manufacturer. The Tribunal canvassed all the evidence, interpreted the legislation in a manner which makes sense, and reached a decision which was open to it on the evidence.
[7] Finally, counsel submitted that the Tribunal erred in classifying the utility ATV's under Customs Tariff Item 87.03 because the reference in that item to the "transport of persons" did not include vehicles capable of carrying only a driver. In our view, it was not unreasonable for the Tribunal to conclude, in this context, that the word "persons" included the driver, even though elsewhere in the Customs Tariff, Parliament had expressly included the driver when referring to the transport of persons.
DISPOSITION
[8] The appeal will be dismissed with costs.
"B. Malone"
J.A.
FEDERAL COURT OF CANADA
APPEAL DIVISION
Date: 20020124
Docket: A-1-01
BETWEEN:
YAMAHA MOTOR CANADA LTD.
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT OF THE COURT
FEDERAL COURT OF CANADA
APPEAL DIVISION
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-1-01
CORAM: STONE J.A.
EVANS J.A.
MALONE J.A.
STYLE OF CAUSE: YAMAHA MOTOR CANADA LTD.
Appellant
and
THE ATTORNEY GENERAL OF CANADA
Respondent
PLACE OF HEARING: Montreal, Quebec
DATE OF HEARING: January 24, 2002
REASONS FOR JUDGMENT OF THE COURT BY MALONE J.A.
DATED: January 24, 2002
APPEARANCES:
|
Mr. Nicolas Cloutier Mr. François Barette |
FOR THE APPELLANT |
|
Ms. Susanne G. Pereira |
FOR THE RESPONDENT |
SOLICITORS OF RECORD:
|
Davies Ward Phillips & Vineberg LLP Montreal, Quebec |
FOR THE APPELLANT |
|
Morris Rosenberg Deputy Attorney General of Canada Ottawa, Ontario |
FOR THE RESPONDENT |