Docket:
A-136-13
Citation:
2014 FCA 3
CORAM:
SHARLOW
J.A.
GAUTHIER
J.A.
STRATAS
J.A.
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BETWEEN:
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PRESIDENT OF THE CANADA BORDER SERVICES AGENCY
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Appellant
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and
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SAF-HOLLAND CANADA LTD.
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Respondent
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REASONS FOR JUDGMENT OF THE COURT
(Delivered from the
Bench at Ottawa, Ontario, on January 8, 2014).
SHARLOW J.A.
[1]
In a decision dated January 18, 2013
(AP-2012-004, [2013] C.I.T.T. No. 7 (QL)), the Canadian International Trade
Tribunal allowed the tariff classification appeal of the respondent SAF-HOLLAND
Canada Ltd. (formerly Holland Hitch of Canada Limited). The Tribunal concluded
that certain models of top plates, or fifth-wheel castings, imported by the
respondent from France were entitled to the duty-free treatment conferred by
Tariff Item No. 9958.00.00 of the Customs Tariff, R.S.C. 1985, c.
I-21.
[2]
Tariff Item No. 9958.00.00 reads as follows:
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Parts,
accessories and articles, excluding tires and tubes, for use in the
manufacture of original equipment parts for passenger automobiles, trucks or
buses, or for use as original equipment in the manufacture of such vehicles
or chassis therefor.
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Parties,
accessoires et articles, à l'exclusion des pneumatiques et chambres à air,
devant servir à la fabrication de parties d'équipement d'origine de véhicules
de tourisme, de camions ou d'autobus, ou devant servir d'équipement d'origine
dans la fabrication de ces véhicules ou de leurs châssis.
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[3]
The Tribunal’s conclusion as to the scope of
Tariff Item No. 9958.00.00 is encapsulated in these words from paragraph 106 of
its reasons:
… “original equipment”
refers to fifth wheels destined for use in original vehicle manufacture, “first
fit” assembly or for aftermarket replacement for trucks originally equipped
with the same fifth-wheel product and covered by vehicle warranty....
[4]
The President of the Canada Border Services
Agency (the Crown) has appealed the Tribunal’s decision to this Court pursuant
to section 68 of the Customs Act, R.S.C. 1985, c. 1 (2nd
Supp.). The position of the Crown is that the phrase “original equipment” in Tariff
Item No. 9958.00.00 should be interpreted to exclude products intended for any
application other than the original manufacture and assembly of trucks, and
specifically should exclude any repair application.
[5]
A decision of the Tribunal with respect to
tariff classification is reviewed on the standard of reasonableness (see, for
example, Standard Products Inc. v. Canada (Border Services Agency), 2010
FCA 27). A decision of the
Tribunal is reasonable if it falls within a range of
possible, acceptable outcomes that are defensible in respect of the facts and
law, and the reasons establish "justification, transparency and
intelligibility within the decision-making process": Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at paragraph 47.
[6]
In this case, the principal argument of the
Crown is that the Tribunal misinterpreted the phrase “original equipment” as
used in Tariff Item No. 9958.00.00 because the Tribunal did not apply the
statutory definition of “original equipment” in the NAFTA Rules of Origin
Regulations, SOR/94-14. That definition reads as follows:
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2. (1) For purposes of these Regulations,
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“original
equipment” means a material that is incorporated into a motor vehicle before
the first transfer of title or consignment of the motor vehicle to a person
who is not a motor vehicle assembler, and that is
(a) a good of a tariff provision
listed in Schedule IV, or
(b) an automotive component assembly,
automotive component, sub-component or listed material;
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2. (1) Les définitions qui suivent s’appliquent au présent
règlement.
[…]
« élément
d’origine » Matière qui est incorporée dans un véhicule automobile avant la
première cession du titre de propriété de celui-ci ou la première
consignation du véhicule à une personne qui n’est pas un monteur de véhicules
automobiles, et qui est :
a) soit un produit d’un poste
tarifaire énuméré à l’annexe IV;
b) soit un montage de composantes d’automobile, une composante
d’automobile, une sous-composante ou une matière répertoriée.
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[7]
In making this argument, the Crown invokes the
rebuttable presumption that the same words within two enactments should bear
the same meaning if the two enactments deal with the same subject matter, or
they form part of a comprehensive legislative scheme (referring to subsection
15(2) of the Interpretation Act, R.S.C. 1985, c. I-21).
[8]
That argument was put to the Tribunal and
rejected for the reasons explained in paragraphs 55 to 75 of the Tribunal’s
reasons. The Tribunal concluded, in essence, that the phrase “original
equipment” may bear one meaning for the purposes of the Regulations
relating to the rules of origin under the North American Free Trade
Agreement and a different meaning in Tariff Item No. 9958.00.00 of the
Customs Tariff. In our view, those reasons are cogent and thorough, and
led the Tribunal to a conclusion that is reasonable.
[9]
We observe also that the Crown has cited no
authority that says or implies that the definitions in the Regulations
are intended to apply for all purposes of the Customs Tariff, or that
they are intended to apply to the determination of the classification of goods
under the Customs Tariff. Nor did the Crown cite any authority that says
or implies that all of Canada’s trading partners are intended to be bound by
regulations expressly stated to relate to the rules of origin under the North
American Free Trade Agreement.
[10]
The Crown also argues that the Tribunal’s
interpretation of the phrase “original equipment” as used in Tariff Item No.
9958.00.00 is inconsistent with the ordinary meaning of that phrase. The
Tribunal was presented with conflicting evidence of the meaning of that phrase,
including evidence of industry usage. The Tribunal considered that evidence as
well as its own jurisprudence. In our view, the Tribunal’s understanding of the
ordinary meaning of the phrase “original equipment” in the context of this case
is reasonable.
[11]
Having carefully considered the written and oral
submissions of the Crown, we have been unable to discern any error on the part
of the Tribunal that warrants the intervention of this Court. For that reason,
the appeal will be dismissed with costs.
“K. Sharlow”
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