CUSTOMS AND EXCISE |
Customs Act |
Reebok Canada v. Deputy M.N.R., Customs and Excise
A-642-97
2002 FCA 133, Rothstein J.A.
10/4/02
6 pp.
Appeal from Trial Division decision ([1997] 3 C.T.C. 382) adjourned pending S.C.C. decision in Canada (Deputy Minister of National Revenue) v. Mattel Canada Inc., [2001] 2 S.C.R. 100--Mattel decision dispositive of appeal--Issue whether duty payable on certain imported goods to be calculated by adding royalties paid in respect of goods to price of goods--Application of Customs Act, s. 48(5)(a)(iv)-- Appeal allowed--Here, contract of sale between vendor and purchaser purchase order which did not include condition that royalties be paid--However, another agreement existed between same vendor and purchaser for payment of royalties--In Mattel also, contract of sale of goods and separate contract respecting royalties and licence fees, but vendor under contract of sale and licensor under royalty agreement separate persons--Trial Judge herein found royalty payments did not fall within ambit of Customs Act, s. 48(5)(a)(iv) as royalties not paid as condition of sale--In Mattel, Major J. expressly rejected notions of "true connection", "effective control", "practical", "logical" as arguments by which royalty payments therein could constitute condition of sale for purposes of Customs Act, s. 48(5)(a)(iv) --Later emphasized that when clear and unambiguous statutory provisions can be applied directly to facts, not necessary to resort to analysis of economic realities of transaction--On facts herein, payment of royalties under royalty agreement not condition of sale under purchase order--Accordingly, payment thereof not condition of sale of goods for purposes of s. 48(5)(a)(iv), and royalties not to be added to purchase price for purpose of calculating duty-- Customs Act, R.S.C., 1985 (2nd Supp.), c. 1, s. 48(5)(a)(iv).