Date: 1990316
Dockets: 97-242-GST-G; 97-333-GST-G
BETWEEN:
INSTITUT DE CARDIOLOGIE DE MONTRÉAL, HÔPITAL SACRÉ-COEUR,
Appellants,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
Lamarre Proulx, J.T.C.C.
[1] These appeals were heard on common evidence. They relate to the application of section 25 of Part II of Schedule VI of the Excise Tax Act (the “Act”). Schedule VI is entitled “Zero-Rated Supplies”, and Part II thereof is entitled “Medical Devices”. Section 25 reads as follows:
A supply of a medical or surgical prosthesis, or an ileostomy, colostomy or urinary appliance or similar article that is designed to be worn by an individual.
[2] Because reference will also be made to section 26, I shall reproduce it now:
A supply of an article or material, not including a cosmetic, for use by a user of, and necessary for the proper application and maintenance of, a prosthesis, appliance or similar article described in section 25.
[3] The issue is whether oxygenators, cardiotomy reservoirs and systems, arterial, venous and intra-aortic cannulae and other components of the heart-lung machine, which are used to perform certain of a patient’s organ functions while that patient undergoes an open-heart operation, are medical or surgical prostheses within the meaning of section 25, supra.
[4] André Cyr, the chief perfusionist at the Montréal Heart Institute, testified to explain the operation of the oxygenators and reservoirs used in open-heart surgery. He explained the statements made in paragraphs 4, 5 and 6 of the Notice of Appeal, which read as follows:
[TRANSLATION]
(4) . . . surgeons . . . do open-heart operations in order to treat certain heart diseases, or even, in some cases, replace . . . the heart.
(5) During operations of that nature, because the patient’s heart and lungs are not able to function, the appellant uses oxygenators and cardiotomy reservoirs and systems which, during surgery, perform the functions of the lungs¾oxygenating the blood¾and of the heart¾circulating the blood.
(6) The oxygenators and the cardiotomy reservoirs and systems are connected to the patient by arterial, venous and intra-aortic cannulae.
[5] Mr. Cyr explained that these components could be considered to be artificial hearts and lungs because they take over the work of the heart and lungs. The heart stops beating and the lungs stop breathing, however, those organs continue to be slightly irrigated, to prevent them from dying. The components in question are used for heart surgery, such as bypasses, valve replacement, vascular surgery and congenital defect surgery. They can only be used once. They function in place of the organs solely during the surgery. It is impossible to leave the hospital with this type of device.
[6] Counsel for the appellants referred to dictionary definitions for the meaning of the French word “prothèse” (prosthesis), and specifically to the Dictionnaire des termes de médecine, 23rd ed., Paris, Maloine, 1992 . It defines “prothèse” (prosthesis) as follows: [TRANSLATION] “. . . the replacement component or device.” Counsel for the appellants argued that the devices in question in the instant case are used as replacements. He also drew the Court’s attention to the definition of “prothèse cardiaque” (cardiac prosthesis) in the same dictionary, which says: [TRANSLATION] “See: artificial heart”. He argued that the components used during heart operations are considered to be artificial hearts and lungs.
[7] Counsel for the respondent referred to section 25, and more specifically to the last part of that section, which says: “or similar article that is designed to be worn by an individual”. He argued that devices used for heart surgery are not articles designed to be worn by an individual.
[8] He also argued that section 26 refers to a user of a prosthesis, appliance or similar article described in section 25. Counsel for the respondent accordingly submitted that the expression “user of . . . a prosthesis” in section 26 confirms that the expression “medical or surgical prosthesis” in section 25 is to be interpreted as meaning an article that is designed to be worn by an individual.
[9] Counsel for the respondent referred to a number of dictionary definitions, and specifically to the Dictionnaire de médecine Flammarion, which defines “prothèse” (prosthetics/prosthesis) as follows:
[TRANSLATION]
. . . (1) Branch of surgery which involves replacing or remedying, by means of a device, the partial or total absence, whether congenital or acquired, of an organ, limb or function. (2) By extension, refers to the device itself, i.e. any replacement device designed to replace a missing limb or part of a limb, in terms of both its external aspect and its function. . . .
That dictionary defines “prothèse incluse” as corresponding to the English expression “surgical prosthesis”:
[TRANSLATION]
Prosthesis inserted into a tissue, whether for a cosmetic . . . or functional purpose . . . .
[10] Counsel for the appellants argued that the expression “or similar article that is designed to be worn by an individual” does not apply to the terms “medical or surgical prosthesis”, but rather applies only to the specific articles listed in section 25, that is, an ileostomy, colostomy or urinary appliance. Referring to Pierre-André Côté, The Interpretation of Legislation in Canada, 2nd ed., at pages 263 and 267, counsel submitted that the noscitur a sociis and ejusdem generis rules must be applied with care. Of the two, the one involved here is noscitur a sociis, according to which the meaning of a term may be revealed by its association with other terms. Counsel argued that section 25 must be interpreted in the context of Part II of Schedule VI, which is entitled “Medical Devices”, and that the sections of Part II preceding section 25 list artificial eyes, artificial teeth, hearing aids, laryngeal speaking aids, invalid chairs and artificial limbs. Those supplies are prostheses. In this context, the expression “medical or surgical prosthesis” used in section 25 must be given its literal meaning of medical devices, and not be taken to mean the same type of medical devices as the prostheses previously listed.
[11] Counsel for the appellants accordingly submitted that since the devices used during heart surgery are replacement articles they are surgical prostheses, and since, in his submission, section 25 does not require that medical or surgical prostheses be designed to be worn by an individual, those devices are surgical prostheses within the meaning of section 25.
[12] Unfortunately, I do not share this opinion, whether it be based on the ordinary meaning of the word “prosthesis” or on the context in which sections 25 and 26 are found.
[13] On reading the various definitions, one sees that the word “prosthesis” commonly means a component which is added externally or internally for functional or cosmetic purposes, or both, to replace a limb, a part of a limb or an organ that is seriously damaged or has been destroyed. Common sense suggests that this replacement function means for the purposes of daily living activities after surgery, and not solely for the purpose of the surgery, supposing that it is even possible to speak of replacement in that case. The replacement function of a prosthesis implies the notions of time and use. The expression “surgical prosthesis”, according to the dictionary, means a component that is surgically introduced into an individual’s body, whether for a functional or a cosmetic purpose. The replacement or substitution function is no different than that of any other prosthesis, and that concept does not apply to a device used for the purpose of open-heart surgery.
[14] Counsel for the appellants referred to the dictionary definition of “prothèse cardiaque” (cardiac prosthesis), which said: “See: artificial heart”. The definition of “artificial heart” does not support the appellants’ position, If we look at the definition of “coeur artificiel” (artificial heart) in the same dictionary, we see that it is [TRANSLATION] “an implantable device designed to replace a defective heart, either temporarily (while awaiting a transplant) or permanently. Such devices are currently only at the experimental stage.” That definition certainly does not describe the devices in question in the instant case.
[15] The textual context provides no reason for dissociating medical or surgical prostheses from the other articles referred to in section 25, to which the words “or similar article that is designed to be worn by an individual” apply. Neither logic¾including the meaning of the word “prosthesis”¾nor grammatical analysis allows for such dissociation. It was open to Parliament, had it so intended, to include medical and surgical prostheses in a separate category, and assign them the meaning of devices used as replacements during surgery. In addition, based on the textual context, section 26 confirms the interpretation that the words “or similar article that is designed to be worn” apply to medical and surgical prostheses, since section 26 refers to a user of any of the prostheses described in section 25.
[16] The appeals are dismissed with costs.
Signed at Ottawa, Canada, this 16th day of March 1999.
“Louise Lamarre Proulx”
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]