Kimberly-Clark Canada Inc. v. R., [1998] 3 CTC 88

Nadon J.:

At the opening of this hearing, I was informed by counsel for Kimberly- Clark Inc. (“Kimberly-Clark”), the plaintiff, that both counsel had agreed to narrow the issues. The parties now seek only a declaration as to whether toilet paper and/or facial tissue are either or both a “cosmetic” or a “health good” according to the definition in the Excise Tax Act, R.S.C. 1985, c. E- 15 (the ETA).

This dispute arises by virtue of the fact that the plaintiff paid federal sales tax on its sales of facial tissue and toilet paper between August 1, 1989 and December 31, 1990 pursuant to subsection 50(1) of the ETA. The plaintiff later concluded that this tax had been paid in error and filed a refund claim with respect to that portion which the plaintiff believed could be reclaimed. The plaintiff based its refund claim on the ground that toilet paper and facial tissue are “cosmetics” and/or “health goods” and are therefore exempt from federal sales tax pursuant to paragraph 50(5)(g), with respect to cosmetics, and paragraph 50(5)(k) with respect to health goods.

The Deputy Minister of National Revenue rejected the plaintiffs refund claim in a Notice of Determination issued September 23, 1993. The plaintiff filed a Notice of Objection to this determination dated December 17, 1993. The Minister of National Revenue confirmed the Notice of Determination on September 19, 1994. The plaintiff has appealed this decision pursuant to section 81.2 of the ETA.

The first issue is whether either toilet paper or facial tissue is a health good. The definition of “health good” is found at subsection 2(1) of the ETA as amended by R.S.C., c. 7 (2nd supp.) and reads:

any material, substance, mixture, compound or preparation, of whatever composition or in whatever form, sold or represented for use in the diagnosis, treatment, mitigation or prevention of a disease, a disorder, an abnormal physical state or the symptoms thereof in human beings or animals or for use in restoring, correcting or modifying organic functions in human beings or animals;

There is no doubt that toilet paper is sold and represented for use in cleaning the body after defecation or urination. The real question is whether this amounts to “treatment, mitigation or prevention of a disease, a disorder, an abnormal physical state or the symptoms thereof...” or “restoring, correcting or modifying an organic function”.

Dr. Richard Zoutman, the Associate Director, Joint Microbiology Service, at Kingston General and Hotel Dieu Hospitals, submitted a report and testified as an expert for the plaintiff. His testimony was that the use of toilet paper helps to prevent the faecal-oral transmission of disease by keeping one’s hands relatively free of faecal matter. Dr. Zoutman’s report, which is to the same effect as his oral testimony, reads in part:

many viral, bacterial and parasitic infections are spread from human feces to other human beings by what is known as the “faecal-oral route.” By this route of transmission individuals contaminate their hands during defacation (sic) or by touching the perianal and rectal area and then spread the offending pathogen on their hands to the environment, inannimate (sic) objects, or to the hands of another individual. Likewise, contaminated hands could be used to prepare food and drink which is ingested by susceptible individual (sic), thereby transmitting disease. This form of disease transmission is well known in medicine to be of fundamental importance in public health and should be seen as self evident.

The use of bathroom tissue to clean the perianal and perirectal area after defecation prevents faecal matter from contaminating the hands. Individuals who do not perform this hygenic (sic) maneuver after defecation will have a build-up of faecal material at the perianal skin area which can result in rapid multiplication and colonization of the skin with disease producing microorganisms (sic) that are irritating to the perianal skin causing itching, resulting in frequent contact of the perianal area and subsequent spread of pathogenic bacteria to the environment, food, and other persons, etc.. In this way, bathroom tissue prevents the spread of disease in our society as evident by its almost universal application in all washrooms. Examples of diseases prevented include Salmonellosis, Shigellosis, Campylobacteriosis and many viral infections of the gastrointestinal tract as well as Giardia, Entamoeba and other parasites.

According to the testimony and the report of Dr. Zoutman, the most that can be said of toilet paper is that it helps to prevent the transmission of bacteria and helps to eliminate a possible source of irritation from the perianal and perirectal area. On this evidence, the question becomes whether preventing transmission is tantamount to disease treatment, mitigation or prevention for the purposes of the ETA, In my mind, it is not.

Toilet paper does not, in any way, attack, defend against or eradicate the microorganisms, viruses or bacteria which may cause disease. The best that can be said is that toilet paper aids in the mitigation of the spread of bacteria by transferring the offending material from one surface to another, away from immediate contact with other parts of the body, such as the hands. The bacteria and microorganisms are not themselves effected by the transfer to the toilet paper. It is actually the disposal of the paper into the toilet, the flushing of the waste into the sewer system and the subsequent chemical treatment thereof which ultimately prevents the spread of bacteria. If the definition of health good were drafted to read “...or the symptoms or transmission thereof...”, then, on this evidence, toilet paper could be included in the definition. Toilet paper therefore has no direct effect on any “disease” which may be contained in faecal matter.

There is likewise nothing in the use of toilet paper which mitigates the symptoms of any disease. The use of toilet paper is not analogous to the taking of aspirin to alleviate a headache which is a symptom of influenza. Toilet paper may be used in dealing with the unpleasant symptoms of “an abnormal physical state” but cleaning up is not tantamount to diagnosis, treatment, mitigation or prevention, which would be required in order for toilet paper to fit within the definition of “health good” in the ETA.

Having concluded that toilet paper does not diagnose, treat, mitigate or prevent anything but transmission of bacteria, I need not address whether toilet paper is a “material, substance, mixture, compound or preparation” despite the scintillating testimony from Mr. Richard Johnson in this regard.

With respect to the question of whether facial tissue can be classified as a health good under the ETA, Dr. Zoutman’s report, which was mirrored in his oral testimony, reads in relevant part at pages 1 and 2:

Facial tissue does prevent disease. This has been shown for common respiratory infections due to common cold viruses which are readily transmissible between persons, both by the contact route (hand to hand transmission) as well as the airborne route, generally by large respiratory droplets. A person so infected with a respiratory virus who coughs, sneezes or otherwise discharges respiratory droplets laden with infectious viral organisms readily transmits virus to other persons with whom they live, work, go to school, attend daycare etc. A facial tissue used to cover the mouth and nose during coughing or sneezing captures the viral laden respiratory droplets and prevents them from being transmitted in the air or from coming into direct contact with the person’s hands. The facial tissue once discarded prevents further transmission. Scientific evidence in the literature by Hayden, Hendley and Gwaltney, (Journal of Infectious Diseases, V. 152, August 1985, p.403-407) demonstrates that facial tissues do prevent the spread of rhinovirus which is the most prevalentetiologic agent of the common cold.

Furthermore, other serious respiratory infections of the lower respiratory tract such as tuberculosis were also prevented by using facial tissue to cover the mouth and nose when one coughs. This is a disease of great public health importance and facial tissues are specifically recommended by the Centers for Disease Control and Prevention of the United States (see attached citations from CDC Guidelines for the prevention of Transmission of Tuberculosis). The above are but 2 examples of a very long list of diseases spread by the respiratory route which I have appended as a table for further consideration. In some cases the diseases are spread by contaminated secretions on the hands and from there to the hands and face of other individuals or through inanimate objects such as a telephone, etc.. Some diseases are spread by droplets in the air and often both mechanisms occur together. In either event, a facial tissue used to contain these secretions is well known to be preventive and an important public health measure. By containing the spread of the disease causing organisms fewer people become infected and the chain of transmission is interrupted. In the case of common upper respiratory tract viruses, huge societal morbidity is prevented and in the case of more serious life-threatening infections such as tuberculosis or whooping cough among many other examples serious morbidity and mortality is prevented.

Facial tissues also mitigate respiratory infections. The abnormal mucous and other respiratory secretions produced during infections, be it by bacteria or other organism, is an abnormal physical and pathological state. The secretions if not expectorated or allowed to drain from the body result in pathological obstruction of airways, sinuses and nasal passages. This is a further complicating feature that can lead to physiologic dysfunction of the respiratory tract and worsening of the infection, or secondary infection with another organism, with a higher rate of complications. Therefore blowing of the nose, drainig (sic) of the nasal sinuses, coughing and expectorating of mucous and sputum is both physiologic and beneficial and well accepted in the practice of medicine. For example, individuals with lower respiratory tract infections of the lungs are encouraged to cough up their secretions and indeed physical therapy is often recommended to enhance movement of secretions. Therefore using a facial tissue to collect the secretions allows the secretions to be removed in an acceptable manner so as to prevent further spread of the diseases mentioned above. In this way, facial tissues do mitigate a pathologic process and abnormal physiologic state. This would be true for most of the viral respiratory and bacterial respiratory infections listed in the appended table.

I fully accept the evidence of Dr. Zoutman on this point: that is to say that blowing the nose, draining the sinuses and expectorating mucous and sputum mitigate the symptoms of an abnormal physical state. However, facial tissue is not necessary to any of these acts. Once again, facial tissue is a convenient receptacle for what is blown out, drained or expectorated. Also, the disposal of the facial tissue means that any bacteria or harmful microorganisms in the facial tissue remain in the facial tissue thereby hindering transmission of the bacteria. But it is the act of blowing, etcetera and the disposal of the product which, firstly, helps mitigate the symptoms of disease and secondly, prevents the spread of disease.

In cross examination Dr. Zoutman was asked whether expectorating into a sink would perform the same function as expectorating into a facial tissue. Dr. Zoutman stated that indeed, any receptacle would be sufficient, as it was truly the expectorating itself which was beneficial. However, Dr. Zoutman added one caveat to his answer: the distance between the receptacle and one’s mouth or nose was important. The closer the receptacle to the orifice of the person, the less of an opportunity for bacteria, germs and microorganisms to be released into the environment. Unfortunately, this does not address the issue at hand. Placing one’s mouth close to the receptacle, be it a sink or a facial tissue, would be to the same effect. On this evidence, it is impossible to conclude that there is anything inherent in facial tissue qua facial tissue which might put it within the realm of the definition of health good in the ETA.

Counsel for Kimberly-Clark referred in argument to paragraphs 13 to 21, 43 and 44 of the “Plaintiff's Summary of Facts not in Dispute” in support of its contention that facial tissue and toilet paper are health goods. It must be said that these agreed facts add nothing to the testimony of Dr. Zoutman.

On the evidence presented, it must also be said that neither facial tissue nor toilet paper modifies an organic function. The use of both products occurs at the completion of the function. The role of both these products is essentially to trap and dispose of waste material. As neither facial tissue nor toilet paper actually alters or effects in any way the function to which it is related, neither product can be included in the definition of health good on this basis.

The next issue which arises in this appeal is whether toilet paper is a cosmetic. The definition of cosmetic is found in subsection 2(1) of the ETA and reads:

goods, whether possessing therapeutic or prophylactic properties or not, commonly or commercially known as toilet articles, preparations or cosmetics, that are intended for use or application for toilet purposes, or for use in connection with the care of the human body, including the hair, nails, eyes, teeth, or any other part or parts thereof, whether for cleansing, deodorizing, beautifying, preserving or restoring, and includes toilet soaps, shaving soaps and shaving creams, skin creams and lotions, shampoos, mouth washes, oral rinses, toothpastes, tooth powders, denture creams and adhesives, antiseptics, bleaches, depilatories, perfumes, scents and similar preparations;

With respect to the definition of “cosmetic” it was the plaintiff’s contention that toilet paper comes within the definition as a “toilet article”. There is no doubt that toilet paper is neither a “preparation” nor a “cosmetic” as these terms are used in the above definition. Thus, it remains only to determine what is meant by “commonly or commercially known as toilet articles”.

Some help is found in the definition itself by the phrase “that are intended for use or application for toilet purposes”. The Shorter Oxford English Dictionary, vol. II (Oxford: Clarendon Press, 1990) defines “toilet” as:

A piece of stuff used as a wrapper for clothes...a towel or cloth thrown over the shoulders during hairdressing...the articles required or used in dressing; the furniture of the toilet-table...the action or process of dressing...

The Gage Canadian Dictionary, (Toronto: Gage Publishing Ltd., 1983) defines “toilet” as:

...the act or process of washing, dressing, and grooming oneself...of or for use in the process of dressing and grooming...

In Whitehall Laboratories Ltd. v. Deputy Minister of National Revenue (Customs & Excise) (1987), 13 C.E.R. 252 (Can. T.B.) the Tariff Board states at 265:

In the definition of “cosmetics” the classification intended by the adjective “toilet” in reference to “articles, preparations or cosmetics” is qualified by its further use to identify and qualify “purposes”, suggesting that some such articles, etc. are not used for toilet purposes and are not intended therefore to fall within the definition of cosmetics. Among possible interpretations, only those toilet articles or cosmetics that are intended for use for toilet purposes are to be considered “cosmetics”. If they are intended to be used for other purposes, they are not to be so considered. This suggests that “cosmetics” means those articles, etc., designed for toilet use that are so used in the French sense of, faire sa toilette which is the series of ablutions and attentions brought to one’s body prior to dressing up for one’s daily occupations. “Toilet purposes” is a distinction intended for such goods only if they are part of one’s daily routine of normal personal physical cleanliness and upkeep.

The jurisprudence has interpreted “cosmetics” as defined prior to 1980 to mean a group of articles and preparations that contribute to good grooming and good hygiene in the ordinary sense of the word.

The Le Nouveau Petit Robert, (Paris: Dictionnaires Le Robert, 1993) defines toilette in the following way:

...d. Fait de s’habiller et de se parer...4. Ensemble des soins de propreté du corps...Linge, serviette, gant de toilette...Papier toilette: papier hygiénique 5. Le fait de nettoyer...

The only real difference between the ETA as it read at the time of the Whitehall Laboratories Ltd. decision and the time with which we are here concerned, is that under the former version if an article was defined as a cosmetic it was taxable. Adopting the above passage from Whitehall Laboratories Ltd. as the appropriate test, toilet paper is an article used in the process of cleaning one’s self. Exhibit 21 submitted by the plaintiff includes a document entitled “Consumer Survey: Usage Diary for Bathroom Tissue” which shows clearly that the main use of toilet paper is wiping after urination and bowel movements. Toilet paper can be defined as a “good..intended for use...in connection with the care of the human body...for cleansing”. The common use of toilet paper is as an “attention brought to one’s body prior to dressing”. It is part of one’s normal, daily routine. As this use is the one for which toilet paper is commonly and commercially known, toilet paper fits within the definition of “cosmetic”.

Neither counsel fully addressed the proper interpretation to be given to the definition of “cosmetic” in light of the list of items included at the end of the definition. Counsel for the Crown merely stated in argument that the list is illustrative even if not conclusive. I have come to the conclusion that the list is in fact illustrative, as it follows on the word “including”. This is not an appropriate case for the application of the ejusdem generis rule of interpretation. The term “toilet article” is not preceded by terms which limit its meaning. If one were to ignore the list, the simple and plain meaning of the terms used in the definition encompass a wide array of articles. There are many disjunctives in the definition. A “cosmetic” can be this or that or the other. The list gives examples of various items which are used in daily grooming - to make it clear that “toilet articles” is indeed to be interpreted in the sense of faire sa toilette and thus the use of the term “cosmetic” in the Excise Tax Act is not to be understood in the familiar sense of eye shadow and mascara, but is instead to be understood as encompassing all toiletries.

With respect to facial tissue, counsel for the plaintiff raised the issue of estoppel. This issue arises for consideration from the following set of circumstances. The issue of whether facial tissues fell within the definition of cosmetics given in the ETA arose in Canadian International Paper Inc. v. Deputy Minister of National Revenue (Customs & Excise) (1986), 12 C.E.R. 112 (Can. T.B.), affd (1988), 17 C.E.R. 3 (Fed. C.A.) (hereinafter Canadian International Paper Inc.) wherein Canadian International Paper Inc. applied to the Tariff Board for a declaration that facial tissues were health products as defined in Schedule III, Part VIII of the ETA as it then read. The definitions at issue in Canadian International Paper Inc. were identical to those under consideration at present except that the definition of health product ended with, “...but not including cosmetics”. The effect of this difference was that if an item was classified as a cosmetic, it was automatically excluded as a health product. The other difference between the statutes is that, at the time of the Canadian International Paper Inc. case, cosmetics were subject to tax and, today, goods which meet the definition of cosmetics are exempt from tax. The relevant portions of the Tariff Board decision appear at 117-118 and read:

The evidence has revealed that the applicant’s intent in offering its product to the consumers is to sell it for use by them as a practical substitute for cloth handkerchiefs in cases of colds or allergies or in the course of normal hygiene and other multi-purpose applications. On the boxes of Royale facial tissues it is mentioned: “Even when you don’t have a cold, three-ply Royale facial tissues are ideal for everyday use all through your home. They’re great for colds, sniffles, or as an everyday handkerchief’. A witness for the applicant recognized that the facial tissues were mainly used as a replacement for the cloth handkerchief and in fact did not serve a different purpose or function. Because of their disposability, as shown by the evidence, the tissues could prevent or reduce the spreading of germs from one person to another. In that sense, they have a prophylactic property which, according to the Concise Oxford Dictionary, (7th ed.), is: tending to prevent disease or other misfortune.

Having carefully analyzed the evidence in regard to both the health provision and the definition of the word cosmetics in the Act, we must come to the conclusion that facial tissues can be described as goods possessing prophylactic properties, commonly known as toilet articles, intended for use in connection with the care of the human body. Consequently they clearly fall within the definition of “cosmetics” in subs. 2(1) of the Act and are excluded form the health product provision.

The test used to determine whether issue estoppel arises in a particular case is found in Angle v. Minister of National Revenue (1974), [1975] 2 S.C.R. 248 (S.C.C.) where Dickson J. at 254, cites Carl-Zeiss-Stiftung v. Rayner & Keeler Ltd. (No. 2) (1966), [1967] 1 A.C. 853 (U.K. H.L.):

...(1) that the same question has been decided; (2) that the judicial decision which is said to create the estoppel was final; and, (3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies....

It is abundantly clear that this case and the Canadian International Paper Inc. case both deal with whether facial tissue is a cosmetic and that the definitions are the same. Nor is there any issue with respect to the finality of the previous decision. The only real point of contention between the parties is whether Kimberly-Clark was a privy to the Canadian International Paper Inc. case.

The Shorter Oxford English Dictionary defines “privy” as:

One who is a partaker or has any part or interest in any action, matter, or thing...

In Germscheid v. Valois (1989), 34 C.P.C. (2d) 267 (Ont. H.C.) at 281 Kurisko L.J.S.C. cites the test for privity from Verlysdonk v. Premier Pe- trenas Construction Co. (1987), 39 D.L.R. (4th) 715 (Ont. Div. Ct.):

Court stated [O.R. at 69] that “[a] privy is a person having a participation in some act so as to be bound thereby.”

In ATL Industries Inc. v. Han Eol Ind. Co. (1995), 36 C.P.C. (3d) 288 (Ont. Gen. Div. [Commercial List]) Farley J. at 314 was guided by the principles of “justness” and “common sense” in determining whether a party was indeed privy to a prior action.

Kimberly-Clark’s claim to privity arises in the following way: Kimberly-Clark had commenced an action to determine whether facial tissue was a health good or cosmetic at the same time as Canadian International Paper Inc. brought their action. Mr. Tom Johnson, the former Chief Financial Officer of Kimberly-Clark testified that, as the Canadian International Paper Inc. case had progressed more quickly than the Kimberly-Clark action, Kimberly-Clark reached an agreement with Canadian International Paper Inc. that Kimberly-Clark would hold off on their separate action and would participate in the Canadian International Paper Inc. case instead. It was the testimony of Mr. Johnson that either himself or his colleague were involved in all of the meetings between Canadian International Paper Inc. and their counsel, Mr. Cranker; that Kimberly-Clark helped to identify possible witnesses and that Canadian International Paper Inc. and Kimberly- Clark had agreed to and in fact had split the expenses incurred in bringing the Canadian International Paper Inc. case to trial. Mr. Johnson testified in cross-examination that the cost sharing arrangement between Kimberly- Clark and Canadian International Paper Inc. had not been disclosed to the Crown.

A letter from Mr. Glenn Cranker of Stikeman, Elliott to Mr. Ciavaglia, counsel for the Crown, dated November 23, 1987, reads:

Further to our discussion on November 6, 1987, enclosed is the Statement of Claim which has been filed in the Federal Court, Trial Division appealing from the Notice of Decision rendered by the Minister of National Revenue on August 26, 1987. As explained in our telephone conversation, this Statement of Claim has been filed to protect Kimberly-Clark’s rights pending a decision by the Federal Court of Appeal in the Canadian International Paper Inc. case....If the Federal Court of Appeal dismisses Canadian International Paper Inc.’s appeal, the Statement of Claim will be withdrawn. Similarly, if Canadian International Paper Inc.’s appeal is ultimately allowed, it is understood that your client would consent to an order in conformity with the decision of the court.

We confirm that if Kimberly-Clark’s Statement of Claim were to be litigated, substantially the same evidence would be introduced as brought before the Tariff Board in Appeal No. 2377. Specifically, the expert witness in the Canadian International Paper Inc. case, Dr. Elliott Dick, acted as a consultant for Kimberly-Clark, and many of his studies referred to facial tissues sold by Kimberly-Clark...As well, advertisements for facial tissues sold by Kimberly- Clark were introduced at the hearings ...Accordingly, the decision of the Federal Court of Appeal in the Canadian International Paper Inc. case should be determinative of the issues in the Kimberly-Clark case.

We would request your written response that this proposal is to your satisfaction

The response from Mr. Ciavaglia is dated November 27, 1987 and reads:

I have forwarded your letter and Statement of Claim to the client department. We do not foresee any problems with responding to the suggestions contained in your letter. However, we will provide you with our formal response after we have received the instructions of the client.

There is no further evidence on this point. Mr. Johnson testified that the statement of claim of Kimberly-Clark was withdrawn following the failure of the Canadian International Paper Inc. appeal because, as Mr. Johnson said, he felt bound to do so. However, on the basis of this evidence, I am unable to conclude that Mr. Ciavaglia and Mr. Cranker had reached a binding agreement. The evidence reveals that Mr. Cranker, on behalf of Kimberly-Clark, had made an offer to be bound by the decision of the Federal Court of Appeal and that Mr. Ciavaglia had agreed in principle and would be securing the acceptance of his client. However, there is no evidence that this acceptance ever materialized. If Mr. Ciavaglia failed to deliver the anticipated acceptance, it was incumbent on Mr. Cranker to take further steps to ensure that the Crown was duly bound. However, nothing indicates that this was done and there is no evidence that any acceptance was given verbally. It was incumbent on counsel for the plaintiff in this case to produce such evidence if it existed. Absent such proof, it is only possible to conclude that the offer was made but not accepted and that no binding agreement had therefore been reached. In the absence of a binding agreement between the Crown and Kimberly-Clark, despite the fact that the statement of claim was in fact withdrawn after the Federal Court of Appeal upheld the Tariff Board’s determination, I cannot find that Kimberly-Clark was a privy to the earlier action. It follows that the Crown is not estopped from arguing in the case at bar that facial tissue is not a cosmetic.

Mr. Richard Johnson who was a senior financial controller and the person in charge of advertising with Kimberly-Clark at the relevant times, gave testimony on the development of facial tissue and toilet paper. Mr. Johnson also described the method of production of these two products. In aid of this absorbing testimony, counsel for the plaintiff submitted a volume of documents which was marked as Exhibit 21, “Documents Relating to Evidence of Richard Johnson”. Tabs 1 to 11 of this exhibit are photocopies of advertisements and boxes of facial tissue. These advertisements reveal that facial tissue originally became popular as a cold cream towel replacement in the bathroom. Magazine ads read:

Actresses, screen stars...they use Kleenex, the sanitary new velvety-soft tissue, to remove their make-up - cold cream and cosmetics...

By 1927, Kleenex had been directly identified in advertising as a replacement for the handkerchief in dealing with the symptoms of colds. A magazine ad appearing in that year reads:

LARGELY on medical advice, thousands now use Kleenex ’Kerchiefs for colds. For thus one discards at once the excretions that spread - that re-infect as well.

Soiled, damp handkerchiefs are bad. They carry possible contagion - re-infection - with you. Remember this when you or your children have a cold.

Damp handkerchiefs, too, tend to chap and irritate the nostrils. Kleenex ’Kerchiefs are dry, fully absorbent and fresh every time you use them. Thus no chapping or skin irritation. You discard like paper. Next cold, try them.

The advertisements and articles submitted by the plaintiff which aver the benefits of using Kleenex as an aid to both applying and removing make-up continue until the end of the 1980’s. It is the plaintiffs position that these advertisements and articles demonstrate how Kleenex was commonly or commercially known. In the absence of compelling evidence to the contrary, I am inclined to agree.

Mr. Ted Glass testified on behalf of the defendant. In preparation for his testimony, Mr. Glass attended at various drug and grocery stores and took photographs of toilet paper and facial tissue in these stores. The purpose of this evidence was to demonstrate that, with minor exceptions, toilet paper and facial tissue are sold in the section with what is commonly known as paper products, i.e. paper towel, toilet paper and facial tissue. The inference which the defendant would like the court to draw is that, due to the common placement of these articles, they are in fact commonly or commercially known as paper products. However, an equally possible inference is that, due to size and shape of these articles, it is more convenient to place them together in this way instead of displaying toilet paper and facial tissue in with items which are much smaller. In the result, although I accepted the testimony of Mr. Glass, despite the objections of counsel for the plaintiff, I do not find it persuasive and therefore give it no weight.

Counsel for the Crown argued that not all toilet articles can be considered cosmetics because it stretches the meaning of “cosmetic” too far. Counsel argued that it is ludicrous to refer to a facial tissue as an item for removing a cosmetic if it is itself a cosmetic. With respect to Counsel, I concede that including the term “cosmetic” along with other terms within the definition of “cosmetic” is a problem which has been played out in this case. However, as I understand it, it is the position of the plaintiff that facial tissue is not, strictly speaking, a cosmetic as that term is commonly understood. Rather, it is the plaintiff’s position that facial tissue is a toilet article as understood in the Whitehall Laboratories Ltd. decision. Although the use of facial tissues for dealing with the symptoms of a cold is not part of one’s normal, daily routine, the use of facial tissue “...in connection with the care of the human body...for cleansing (such as make-up removal)” is sufficient to bring it within the definition of toilet article. Although the “Consumer Survey: Usage Diaries for Facial Tissue” (Tab 13 of Exhibit 21) indicates that the greatest percentage of use of facial tissue is for wiping the nose (of one’s self or another) in 1991, 26% of men and 38% of women used facial tissue for “non-nose care”. On this basis, although such use is not exclusive, it is clear that facial tissue can be described as an article which is “...commonly known as a toilet article...in connection with the care of the human body”.

For these reasons, judgment shall be in favour of the plaintiff. Toilet paper and facial tissue are “cosmetics” under the Excise Tax Act. Accord- ingly, the matter should be sent back to the Minister for a re-determination in light of these reasons. The plaintiff shall have its costs.

Appeal allowed.