Facts:
Medline imported various models of surgical gloves. These items had traditionally been classified under tariff item 4015.11.00 as surgical gloves of vulcanized rubber other than hard rubber. However, Medline applied for duty refunds, arguing that the surgical gloves fell under tariff item 9977.00.00 as articles “for use in” instruments and appliances used in medical, surgical, dental or veterinary sciences.
The Canadian International Trade Tribunal agreed with Medline to classify the surgical gloves under tariff item 9977.00.00 as “for use” in surgical instruments (specifically, scalpels), such that the gloves could benefit from duty-free importation into Canada.
The Attorney General of Canada brought a statutory appeal under s. 68(1) of the Customs Act.1 At the same time, the AG also brought an application for judicial review in the event that the Court concluded that the statutory right of appeal did not apply.
Decision:
Statutory appeal allowed; the tribunal decision was set aside and substituted with a declaration that the gloves are not classifiable under tariff item 9977.00.00; the separate judicial review application was dismissed as unnecessary (per Leblanc J.A., Stratas and Mactavish J.J.A. concurring).
The Court concluded that the matter did properly fit within the statutory right of appeal under the Act.
Section 68(1) of the Act provides a statutory right of appeal to the Federal Court of Appeal only on questions of law. Tariff classification matters normally involve the application of a legal scheme to a set of facts, making them questions of mixed fact and law.
However, the Court explained that the mere fact that a matter raises questions of mixed fact and law is no bar, in and of itself, to a s. 68(1) appeal, as there may be an extricable error of pure law. The Court must examine the “essential character” of the appeal by looking at the specific grounds of appeal set out in the notice of appeal. The Court must ultimately ensure that the appeal in fact raise a question of law, and not questions of fact or of mixed fact and law masquerading as questions of law.
In this case, the AG argued that the Tribunal’s interpretation of the Customs Tariff was contrary to the modern approach to statutory interpretation, ignored the analytical framework set out in the Tribunal’s own jurisprudence, and led to absurd results. As such, the AG claimed that the Tribunal adopted an interpretation that the words of the Customs Tariff cannot bear. The AG’s written arguments focused on statutory interpretation and case law analysis, and did not take issue with the evidence before the Tribunal.
As a result, the Federal Court of Appeal accepted that the appeal raised a “pure question of law” that fell within the ambit of s. 68(1). The Court dismissed the alternative Judicial Review application because it adopted the same arguments and was therefore unnecessary and doomed to fail.
On the merits, the Court concluded that the Tribunal’s interpretation of the Customs Tariff was incorrect in light of its text, context, and purpose. According to the Court, the expression “for use in” can only lead to one result: the gloves at issue are not “for use in” surgical instruments within the meaning of tariff item 9977.00.00.
Commentary:
This decision provides some additional guidance on the interaction between judicial review and statutory appeals, following the Supreme Court’s decision in Yatar v. TD Insurance Meloche Monnex.2
In particular, the Federal Court of Appeal accepts that where a party frames their arguments around pure statutory interpretation, the matter will relate to an extricable question of law and fall within statutory rights of appeal on legal questions only. This will be the case even where the central issue for the party relates to the application of the statutory standard to particular facts, a classic mixed question of fact and law.
Parties can obtain an advantage by having the court classify their matter as a question of law within a statutory right of appeal, as such matters will attract the non-deferential correctness standard under Vavilov.3 Accordingly, parties will be well served to frame their proposed statutory appeal as a pure statutory interpretation question, in line with the Federal Court of Appeal’s decision here.
If there is a concern that a party’s matter might be characterized as a mixed question, they can bring an alternative judicial review application on the exact same grounds, as the AG did in this case. The Federal Court of Appeal did not criticize the AG’s cautious approach in this case; it simply dismissed the judicial review as unnecessary. Thus, the Court did not appear to have any concern with litigants bringing alternative judicial review applications as a backup in case their matter ultimately falls outside the scope of the statutory appeal right.