Pfizer Company Limited (Appellant)
v.
Deputy Minister of National Revenue for Cus
toms and Excise (Respondent)
Court of Appeal, Jackett C.J., Thurlow J. and
Choquette D.J.—Montreal, November 28, 1972;
Ottawa, January 12, 1973.
Customs and Excise—Evidence—Statutes—Appeal-
Exemption from duty of antibiotic chemical "and its deriva-
tives'—Meaning of "derivatives'—Whether decision on
question of law.
Pursuant to statutory authority the Governor in Council
exempted certain antibiotics, except viz. "tetracycline and
its derivatives" from customs duty for a certain period. The
antibiotics, oxytetracycline and chlortetracycline, are of
similar molecular structure to tetracycline, but neither of
these can in fact be produced from tetracycline. Salts of
oxytetracycline are manufactured by appellant in Canada
but neither of the others is manufactured here. At a hearing
before the Tariff Board testimony of expert witnesses as to
the sense in which the word "derivatives" was used in the
relevant scientific field was inconclusive, and so also were
standard dictionaries, but from an examination of technical
works, the Board concluded that in the field of antibiotics
the word "derivatives" was used in the wider sense and
accordingly held that all three antibiotics were thus within
the exception to the exemption. Appellant appealed to this
Court. The appeal was limited to a question of law.
Held (Choquette DJ. dissenting), the test applied by the
Board in determining the meaning of the word was the
proper test and the Board's determination of the meaning of
the word was a decision on a question of law and therefore
reviewable by this Court.
Per Choquette D.J. dissenting: The word "derivatives" in
the order in council was ambiguous and it should therefore
be interpreted in the sense most favourable to appellant.
APPEAL from the Tariff Board.
COUNSEL:
John Gomery and Jack Miller for appellant.
S. Froomkin for respondent.
SOLICITORS:
Martineau, Walker, Allison, Beaulieu,
Phelan and MacKell, Montreal, for appellant.
Deputy Attorney General of Canada for
respondent.
JACKETT C.J.—This is an appeal from a Dec
laration of the Tariff Board under the Customs
Act, R.S., 1970, c. C-40.
Three chemicals have become important in
the realm of therapeutic drugs in relatively
recent times, namely, oxytetracycline, chlortet-
racycline and tetracycline. The similarity in the
names of these drugs arises from the fact that
their molecular structure is, in each case, based
on four carbon rings. In practice each one is
prepared without using either of the others as a
commencement material. It is possible, accord
ing to the evidence, to use chlortetracycline in
the preparation of tetracycline but neither tetra-
cycline nor oxytetracycline can be used to pre
pare either of the others.
Certain salts of each of these chemicals have
become of importance as therapeutic drugs.
The oxytetracycline drugs are highly competi
tive with the chlortetracycline drugs. The chlor-
tetracycline salts are manufactured in Canada.
Salts of the other drugs are not manufactured in
Canada.
The three drugs and the salts in question are
antibiotics.
In the context of the above facts, the Gover
nor in Council, in pursuance of statutory
authority, passed an order in council exempting
from customs duty antibiotics with certain
exceptions, and one class of exceptions was
"Tetracycline and its derivatives".
The question is whether certain salts of
oxytetracycline fall within the words "Tetracy-
cline and its derivatives" so as to be excluded
from that exemption.
It is common ground that the salts in question
are derivatives of oxytetracycline.
Assuming that the word "derivative" was
used in its ordinary common meaning, in this
context it would seem to me that it means
something that arises or is produced (is derived)
from something else, either directly or indirect
ly. The result of such an interpretation here
would be that the only protection afforded to
the manufacturer in Canada of chlortetracycline
and its salts would be against the importation of
the salts of tetracycline. Not only would there
be no protection against the importation of
oxytetracycline or its salts but there would be
no protection against the importation of chlor-
tetracycline or its salts.
It does seem improbable that it would have
been intended to afford a chlortetracycline
manufacturer protection against tetracycline
and its salts but not against chlortetracycline
itself or its salts. However, if that is the mean
ing of the words used, the language must be
interpreted accordingly no matter how improb
able it may seem that that was what was
intended.
Before the Tariff Board evidence was led as
to the sense in which the word "derived" is
used in the part of the world of science where
these drugs are of concern. In the Board's Dec
laration, there is a summary of this evidence. As
neither party has challenged the accuracy of
that summary, I accept it as correctly represent
ing the effect of that part of the evidence.
The witnesses for the appellant were a chemi
cal engineer and a chemist. They were of the
view that "... the term `derivative' means that
the substance is derived from something else.
You have to have a biochemical or at least a
chemical transformation ... to transform one
substance into its derivative."
One of the respondent's witnesses was a
medicinal-organic chemist. In his view, the
method of preparation was not the factor. The
Board does not, however, appear to have under
stood him as expressing any opinion as to what
the word "derivative" means in this context.
They say that he was of the view that "... if,
by reason of its chemical structure, one com
pound is a derivative of another compound, it is
such a derivative whether it is produced by a
living organism or is produced synthetically",
and that, in his opinion, "there is a distinction to
be made between `derived from' and 'a deriva
tive of': the first indicating a source of produc
tion and the second a matter of close and appro-
priate relationship of chemical structure". The
respondent's second witness was a veterinary
surgeon. To him, a derivative is commonly
known "as a substance of a similar class in
structure". To indicate production from a
source, he preferred "derived from" to "deriva-
tive of" which latter expression according to
him "indicates appropriate similarity of struc
ture, response and use rather than of origin or
source".
The Board apparently took the view that it
could make no finding on the evidence of the
experts as to what the word- "derivative" meant
in the order in council and decided to resolve
"the issue" by an examination of ordinary dic
tionaries and technical dictionaries and writings.
It is of interest to note that many of the
ordinary dictionaries referred to by the Board
give one or more senses of the word "deriva-
tive" in its application to chemical matters. One
such sense is an application in this field of the
ordinary sense of the word and so we find in the
Oxford English Dictionary "...5. Chem. A
compound obtained from another, e.g. by partial
replacement." On the other hand there is anoth
er, and presumably broader, sense that is differ
ently expressed but of which a representative
definition taken from Webster's Third New
International Dictionary is:
4a: a chemical substance that is so related structurally to
another substance as to be theoretically derivable from it
even when not so obtainable in practice ... .
There are also alternatives to this latter sense in
some of the technical dictionaries such as "The
theoretical connection between the molecular
structures of related organic compounds"
(Hackh's), and "In organic chemistry, a com
pound is considered a derivative of that hydro
carbon which contains the same number of
carbon atoms in the same arrangements"
(Stewart).
After their review of the definitions, the
Board concluded that it was clear that "deriva-
tives" in chemistry and allied fields is some
times used with a broader and sometimes with a
narrower meaning, and that "each of these
meanings may be appropriate when used in its
appropriate context".
However, when the Board turned to the
application of the word "derivative" in technical
works in the field of antibiotics, medicine and
veterinary science dealing with the "tetracy-
clines", which word clearly includes all the
three drugs in question and their salts, and the
evidence of the experts from the fields of medi
cine, chemistry and veterinary science, they
concluded that "The broader meaning of
"derivative" appears to be consistent with the
general usage and views in the field of antibiot
ics", and that "to allow only the narrower mean
ing is not".
In the result, the Board found oxytetracycline
to be a derivative of tetracycline within the
words of the order in council.
In legal theory, as I understand the law, the
general rule is that a word in a document such
as a statute or order in council having the effect
of law is to be given its ordinary or popular
meaning according to the context' and that
meaning is a question of law to be determined
by the Court with the aid of dictionaries and
other legitimate aids to construction, 2 but where
it is found that a word has been used in such a
statute or other document in the jargon or ver
nacular of a particular area, part of the com
munity, trade or field of learning, then it is to be
given that meaning' and, in such a case, the
Court may require the evidence of persons with
knowledge of the sense in which the word is so
used in order to determine the meaning, and, in
such a case, its meaning becomes a question of
fact.' It would seem, however, that, where the
Court has sufficient familiarity with the words
to take judicial knowledge, 5 such evidence is not
necessary and the meaning of the word is a
question of law for the Court.
Whether, in any particular case, the meaning
of a word is a question of law or a question of
fact may be of no importance where the Court
that has to deal with the matter has jurisdiction
in relation to questions of law and of fact. This
was the situation before the Tariff Board on this
appeal.
However, in this Court, the matter becomes
one of importance because this Court can
review a decision of the Board on a question of
law but cannot review a decision by it on a
question of fact.
In my view, the Board did not make a finding
of fact on the evidence that the word had a
sense generally accepted in the field of antibiot
ics, medicine and veterinary science which was
wide enough to make oxytetracycline a "deriva-
tive" of tetracycline. They did not expressly
make such a finding as a finding of fact. Fur
thermore, if the matter was being dealt with by
the Board as a question of fact, we are faced
with a situation where a substantial and signifi
cant part of the material relied on was material
that was not placed in evidence at the hearing so
that the appellant would have had an opportuni
ty to answer it . 6 [I think it is highly doubtful that
literature is admissible as evidence on a ques
tion of fact as to usage of a word in a special
domain except by way of the testimony of
experts who testify that such literature is illus
trative of a generally accepted usage of a word
in a sense other than its ordinary meanings.]
What the Board did, in my view, is what any
ordinary court would have had to dp in the
circumstances. In the absence of evidence on
which they could find as a fact that there was
general acceptance in a special domain of a use
of the word in a sense other than its ordinary
senses, they had to decide as a matter of law,
with such assistance as they obtained from the
facts as given in evidence, in what sense the
word was being used in the context of an order
in council dealing with chemicals in the field of
antibiotics.' In doing so they referred to ordi
nary dictionaries as any other court might have
done. They also referred to the general use of
the word in the literature of the subject, which it
was proper for them to do provided that they
were competent adequately to appraise such
usage.'
There is no dqubt in my mind that, having
regard to the context, usage in the field of
antibiotics was the proper test to be applied in
determining the sense in which the word was
used.
I have more doubt about the use of technical
literature by a court consisting of non-technical
persons as an aid to determining that sense.
However, it is to be remembered here that the
Tariff Board is a court specially created inter
alia to interpret the words used in the Customs
Tariff and I am of the view that that Board must
be conceded the right, where it feels competent
to do so, to use the literature of a technical
subject as an aid to finding the sense in which
words are used in connection with the subject.'
Moreover, when the Board has indulged in such
an exercise, while the resulting finding is a
decision on a question of law that this Court has
a duty to review, I am of the view that this
Court should not interfere and substitute its
own view so long as the Board's conclusion is
one that is fairly open having regard to all the
aids to construction available.
In my view, the Board's conclusion on the
question involved here is one that could proper
ly be reached and I am, therefore, of opinion
that the appeal must be dismissed.
* * *
THURLOW J.—The question raised by this
appeal is whether the Tariff Board erred in law
in finding that three products imported by the
appellant and known commercially as:
Terramycin Quaternary Salt TM 200;
Terramycin Hydrochloride Non-Sterile; and
Calcium Di-Terramycin Micronized Non-Ster
ile
fell within the meaning of the expression "tetra-
cycline and its derivatives" in Schedule A of the
Chemicals and Plastics Tariff Reduction Order,
P.C. 1968-2334. This Order in Council was
made under what is now section 12 of the
Customs Tariff which authorized the Governor
in Council to reduce or remove any duty appli
cable under a list of tariff items including inter
alia item number 92944-1, Antibiotics.
The Order in Council exempted from duty
from January 1, 1969 to January 31, 1973 goods
falling within item 92944-1, other than:
Penicillin and its derivatives (not including crude penicillin
and semi-synthetic penicillin); and
Tetracycline and its derivatives.
The error in law alleged by the appellant is
that the Tariff Board interpreted the last men
tioned expression in a technical sense as refer
ring to the single chemical compound known as
tetracycline and all chemical substances
theoretically derivable from it or with an appro
priately close relation of chemical structure or
similarity of numbers of carbon atoms in the
same arrangement, whether, in the present state
of knowledge, such compounds can be prepared
or manufactured from tetracycline or not, rather
than in an ordinary commercial sense embracing
the antibiotic known as tetracycline in the forms
in which it is marketed or produced and such
other antibiotics of the class known as tetracy-
clines as can be prepared or manufactured from
it.
The three products imported by the appellant
are all basically oxytetracycline (the word "ter-
ramycin" being the appellant's brand name for
it) the molecular formula and structure of which
differ from tetracycline only in that a hydroxyl
(OH) group is substituted for a hydrogen (H)
atom at the particular point designated as 5 in
the molecular structures of tetracycline and
oxytetracycline as depicted in Exhibits A-9 and
A-12. Oxytetracycline is not, however, pro-
duced from tetracycline nor is there any known
way of producing it from tetracycline. It is made
by a fermentation process in which a species of
micro-organisms known as streptomyces rimo-
sus is employed and it is then extracted from
the fermentation broth. Oxytetracycline, there
fore, would not fall within the statutory expres
sion as the appellant would have it interpreted.
Indeed the only commercial products to which
the expression would apply at the present time
in the appellant's interpretation are the hydro-
chloride and phosphate salts of tetracycline.
At the hearing before the Tariff Board four
witnesses gave evidence which is summarized in
the Board's declaration. Two of these witnesses
called by the appellant expressed the view that
oxytetracycline was not a "derivative" of tetra-
cycline. The other two, who were called by the
respondent, expressed the contrary view. In the
course of this evidence certain exhibits includ
ing R-1 and R-4 were produced. On the basis of
this evidence the Board concluded that:
From the foregoing summary it is clear that the expertise
of the witnesses learned in this esoteric field is character
ized by conflict rather than by consensus, leading to greater
perplexity than the layman might expect.
To resolve the issue, it is necessary to examine the
relevant lexicography and orismology.
The Board then proceeded to consider the
definitions of "derivative" found in twelve pub
lished dictionaries and glossaries, some of
which had not been referred to in the course of
the hearing, and concluded that there was a
preponderance in the cited works for the broad
er meaning of the word. The Board also cited
and considered nine other works referred to as
"orismology" some of which had been referred
to in the course of the hearing and some not and
concluded that these works confirmed the
broader interpretation. The Board concluded at
page 7 of its declaration:
Beyond any apparent mere preponderance of usage for
the broader meaning, it is clear from the lexicography and
the orismology that "derivative" in chemistry and allied
fields is sometimes used with a broader and sometimes with
a narrower meaning; whatever the predominance of support,
each of these meanings may be appropriate when used in its
appropriate context.
Tariff item 92944 enumerates "antibiotics". Accordingly,
particular importance attaches to the meanings attributed to
the term "derivative" in the literature and evidence which
deal with usage in the field of antibiotics, medicine and
veterinary science. The British Medical Dictionary gives
both the broader and the narrower meanings of derivative
and Taber's Encyclopaedic Medical Dictionary defines Ter-
ramycin as the "proprietary name of the oxy derivative of
tetracycline"; the Grand Larousse Encyclopédique, under
the caption "Pharm.", describes oxytetracycline as a deriva
tive of tetracycline; the witnesses with special knowledge in
the fields of medicinal chemistry and veterinary science
attributed to the word "derivative" its broader meaning and
deemed oxytetracycline to be a derivative of tetracycline;
the American Hospital Formulary Service and Antibiotic
and Chemotherapy by Garrod and O'Grady list the terracy-
clines [sic] together as a group or class of antibiotics similar
in chemical structure and in biological properties and uses.
The broader meaning of "derivative" appears to be consis
tent with the general usage and views in the field of antibiot
ics; to allow only the narrower meaning is not.
Both generally and more particularly in the field most
closely relevant to the item in issue, the preponderance of
support for the broader meaning is such that the Board finds
oxytetracycline to be a derivative of tetracycline.
As it is clear that oxytetracycline is a deriva
tive of tetracycline in what has been referred to
as the broader interpretation of the term
"derivative", the problem raised by the appeal
is whether the Tariff Board correctly interpret
ed the expression "tetracycline and its deriva
tives" in the Order in Council in question by
giving the word "derivatives" therein such
broader interpretation.
As the Board was unable to determine from
the evidence of the witnesses and the exhibits
produced in the course of the hearing the cor
rect meaning of the word "derivatives" in the
expression "tetracycline and its derivatives" it
was, in my opinion, incumbent upon it to deter
mine that meaning as best it could as a matter of
law and (as no finding of fact as to the meaning
of the word was made by the Board on that
evidence) the problem appears to me to be the
same for this Court, that is to say, to resolve as
best it can as a matter of law the meaning of the
expression in order to determine whether the
Board erred in its interpretation. For this pur
pose, in my opinion, it is open to the Court, as it
was also open to the Board, to make use of such
knowledge as it has of the meaning of words, to
consult dictionaries and glossaries and to have
regard to such usage of the word "derivative"
as is to be found in the exhibits in evidence if
not in the other publications referred to by the
Board.
In my view for the reasons that follow the
conclusion of the Board as to the interpretation
of the expression "tetracycline and its deriva
tives" is not erroneous.
Firstly, I agree with the Chief Justice, whose
reasons I have had the opportunity of reading,
that it is improbable that the intention of the
Governor in Council was to protect chlortetra-
cycline manufacture in Canada only from tetra-
cycline and tetracycline salts, when the same
manufacture had to face strong competition
from oxytetracycline and salts thereof which
were not manufactured in Canada. I regard this
as a powerful reason for rejecting the appel
lant's interpretation.
Secondly, it is not disputed that the chemical
known as tetracycline is not a subject of com
merce. The substances that enter into commerce
are the hydrochloride and the phosphate salts of
tetracycline. It would be strange, therefore, if
the expression "tetracycline and its derivatives"
were used to refer only to salts, which would
fall under the word "derivatives", rather than to
refer to them by their own particular names or
as "salts of tetracycline".
Thirdly, I think that the fact that the expres
sion is found (1) in an order entitled "Chemicals
and Plastics Tariff Reduction Order" and (2) in
a long list which uses the chemical names of a
great many substances, is a strong indication
that the expression here in question is to be read
as a person engaged in a chemical business and
having some knowledge of chemical nomencla
ture would read it, though not necessarily as the
most learned chemist might read it.
Fourthly, apart from any assistance obtain
able from dictionaries or glossaries I would
have had no difficulty in concluding not only
that the word "derivatives" is capable of a
broader and different meaning from that sup
ported by the appellant, i.e., substances derived
or capable of being derived from the substance
referred to, but that it has that broader and
different meaning in the expression "tetracy-
cline and its derivatives" in the Order in Council
in question. In the broader or different sense as
I understand it, the word is used to refer con
veniently to chemical substances, the molecular
structures of which include a basic named
chemical structure but in which there is some
substitution of elements or radicals which dif
ferentiate such substances from the particular
substance having the basic molecular structure.
Examples of the usage of the term in this sense
appeared in the patent specification under con
sideration in C. H. Boehringer Sohn v. Bell
Craig Limited [1962] Ex.C.R. 201 in a passage
cited at page 209 as follows:
Processes for the production of morpholine derivatives are
already known, whereby diethanolamines were treated e.g.
by heating the temperatures to 160-180° C with 70% sulphu
ric acid, in order to acquire the morpholine ring closure.
and in the specification under consideration in
Société des Usines Chimiques Rhone-Poulenc et
al v. Gilbert (1967) 35 Fox P.C. 174 in a passage
cited at pages 189 and 190.
Further examples of usage in the same sense
also appear in Exhibit R-1 in the present case in
the expression defining terramycin as:
a proprietary name for the oxy derivative of tetracycline.
and in Exhibit R-4 in the sentence:
Although one of the tetracyclines may be superior to the
other derivatives in specific infections or in individual
patients the close similarity of the chemical, microbiological,
pharmacological, and therapeutic properties of these drugs
permits their discussion as a class.
To my mind the last two references also show
that the term can be and is used by at least some
writers as a term of sufficient precision and
breadth to refer to the whole class of tetracy-
clines, other than tetracycline itself, and not
merely to the salts of tetracycline and such
other substances as may be producible from
tetracycline of which, as far as I am aware,
there are none.
In this sense of the word nothing turns on
whether the substance referred to as a deriva
tive can or can not be made from the substance
of which it is a derivative. Nor is the usage or
application of the word affected by the fact that
the substance can be produced from the deriva
tive, as in the case of tetracycline itself, which
can be produced from chlortetracycline.
Finally, the meaning of the expression, "tetra-
cycline and its derivatives", appears to me to be
elucidated to some extent by reference to
Exhibit R-3 in which the name tetracycline was
proposed for the substance which was subse
quently produced and now bears that name. The
name is derived from tetra, meaning four, and
cycline meaning rings, and of the tetracyclines
then known and contemplated, i.e. chlortetracy-
cline, oxytetracycline and tetracycline, the
simple name tetracycline has been given, as I
understand it, to the member of the group
having the most basic or rudimentary molecular
structure. The names given to the other similar
but different substances of the group, i.e. chlor-
tetracycline and oxytetracycline (there are now
several more), embrace the same name with a
reference to the difference. Tetracycline is thus
the group or family name and in this sense the
other members of the group or family are
regarded as derivatives of the basic substance
which bears the unembellished family name and
are referred to as such. It is not disputed that
the whole family or group would have been
sufficiently referred to by the expression "the
tetracyclines" and, as I see it, the whole family
or group is equally well referred to by the
expression "tetracycline and its derivatives".
As this interpretation is not dependent on any
finding of fact made by the Board and is a
conclusion of law as to the meaning of the word
in its context it is, in my opinion, immaterial
that the Board relied in part on literary materials
not referred to at the hearing before it and there
is no occasion to consider the appellant's sub
mission that in this respect the requirements of
natural justice were not observed in those
proceedings.
I would dismiss the appeal with costs.
CHOQUETTE D.J. (dissenting)—The question
is whether the antibiotics imported by the appel
lant (Terramycin quaternary salt TM 200, Terra-
mycin hydrochloride non-sterile and calcium di-
terramycin micronized non-sterile) which are
derivatives of "oxytetracycline" can also be
classified as derivatives of "Tetracycline" in the
language of the Order in Council P.C. 1968-
2334, 20th December 1968 respecting the reduc
tion of Customs duties on Chemicals and Plas
tics, specially in the words "Tetracycline and its
derivatives".
To solve this question, I would apply the rules
stated in Craies on Statute Law, 6th Ed., in the
following extracts:
(p. 162)
(1) According to their popular sense
There are two rules as to the way in which terms and
expressions are to be construed when used in an Act of
Parliament. The first rule is that general statutes will prima
facie be presumed to use words in their popular sense .. .
(p. 163)
... In other words, as was said by Pollock B. in Grenfell v.
Inland Revenue Commissioners, if a statute contains lan
guage which is capable of being construed in a popular
sense, such "a statute is not to be construed according to the
strict or technical meaning of the language contained in it,
but is to be construed in its popular sense, meaning, of
course, by the words "popular sense" that sense which
people conversant with the subject-matter with which the
statute is dealing would attribute to it." But "if a word in its
popular sense and read in an ordinary way is capable of two
constructions, it is wise to adopt such a construction as is
based on the assumption that Parliament merely intended to
give so much power as was necessary for carrying out the
objects of the Act and not to give any unnecessary powers."
In other words the construction of the words is to be
adapted to the fitness of the matter of the statute.
(p. 164)
(2) Scientific and technical language
The second rule is that if the statute is one passed with
reference to a particular trade, business or transaction,
words are used therein which everybody conversant with
that trade, business or transaction knows and understands to
have a particular meaning in it, then the words are to be
construed as having that particular meaning which may
differ from the ordinary or popular meaning.
It is clear from the record that everybody
conversant with chemicals and tetracycline does
not know and understand the word "derivative"
to have the broad meaning adopted by the Tariff
Board, that is "theoretical derivability, appropri
ately close relation of chemical structure or
similarity of number of carbon atoms in the
same arrangement", instead of the natural, and
also technical meaning of the word "deriva-
tive", that is a compound actually obtained from
another by chemical reaction.
As a matter of fact, the appellant and the
respondent each called "two well-qualified wit
nesses" to give their expert evidence on the
technical issues involved. For the appellant, a
chemical engineer and a chemist say that tetra-
cycline and oxytetracycline are obtained from
different micro-organisms (streptomyces aure-
ofaciens and streptomyces rimosus) and that in
the present state of technology, oxytetracycline
cannot be produced from tetracycline. They say
that "derivative" means that a substance is
derived from something else.
For the respondent, a medicinal-organic
chemist and a veterinary surgeon say that both
products have the same basic structure, that
they differ by having different groups or differ
ent atoms attached to different places, that
"derivative" indicates appropriate similarity of
structure, response and use rather than of origin
and source. They distinguished between
"derivative of" and "derived from".
After summarizing the evidence of these four
witnesses, the Board concludes as follows: "it is
clear that the expertise of the witnesses learned
in this esoteric field is characterized by conflict
rather than by consensus, leading to greater
perplexity than the layman might expect. To
resolve the issue, it is necessary to examine the
relevant lexicography and orismology" (the
underlining is mine; see App. Book, p. 12).
Then, the Board goes on citing dictionaries
and technical literature on the point in issue. It
also quotes the following extract of its own
report on Reference 120—Chemicals, vol. 9, p.
224; "The spokesman for the company (Cyana-
mid of Canada Limited, the intervenant in this
appeal) said:
I would suggest that, because of their similar characteristics,
all the tetracyclines be considered; that is, chlortetracycline,
tetracycline itself, dimethyl chlortetracycline and oxytetra-
cycline" (Transcript, Vol. 79, p. 12706).
The Board then concludes: "Both generally
and more particularly in the field most closely
relevant to the item in issue, the preponderance
of support for the broader meaning is such that
the Board finds oxytetracycline to be a deriva
tive of tetracycline" (A.B. p. 17).
The Board holds therefore that the appellant's
products to be derivatives of tetracycline within
the meaning of the Order in Council.
I respectfully disagree with that conclusion.
First, I would set aside the above extract of
the Board's report stating that the spokesman of
the intervenant company suggested that all tet-
racyclines be considered on account of their
similar characteristics (A.B., p. 14). This sugges
tion affords no evidence. Moreover, the Order
in Council does not specify all the tetracyclines
as suggested.
There remain the dictionaries and literature
on which the Board relies to support its deci
sion. Only well known and authoritative dictio
naries and standard authors are admissible as
guides for the legal interpretation of words or
expressions. As pointed out elsewhere, a great
part of the literature relied upon was not placed
in evidence and cannot therefore be considered.
At all events, the decision shows that not all the
dictionaries and authors cited give to the word
"derivative" the broader meaning stated by
others and adopted by the Board. For instance,
the Oxford Dictionary, Degering's Organic
Chemistry, Flood and West's Dictionary of
Scientific and Technical Words (and others
cited below) tend to give to "derivative" the
more restrictive meaning of a compound actual-
ly obtained from another by chemical reaction;
that others, like Webster's, Funk & Wagnall's
and four others give to the word "derivative"
the broader meaning which includes "theoretical
derivability, appropriately close relation of
chemical structure or similarity of number of
carbon atoms in the same arrangement. (A.B., p.
157).
What is important is not the preponderance of
support referred to by the Board, but the fact
that some well known dictionaries and authors
do not give to "derivative" the broader meaning
that the Board adopted. This being so, it cannot
be said that everybody conversant with the sub
ject of chemicals and antibiotics knows and
understands the word "derivative" to have the
particular meaning given to it by the Board.
(Craies; supra).
The question cannot either be solved by dis
tinguishing between "derivative of" and "de-
rived from". The French version of the Order in
Council uses the word "dérivés" for "deriva-
tives", which means or surely includes "derived
from". The Dictionnaire usuel Quillet et Flam-
marion defines "dérivé" as follows:
[TRANSLATION] ... Chem. Matter produced from other
matter through distillation.
Le petit Robert defines it as follows:
[TRANSLATION] ... Chem. Substance prepared from
another substance, which retains the general structure of
the original.
I find no particular help in the context of the
Order in Council as to the meaning of "Tetracy-
cline" (in the singular) and of its "derivatives".
The document enumerates hundreds of chemi
cals and plastics. It does not do so for a scientif
ic purpose but for a fiscal purpose, that is the
reduction of Customs duties on the products
enumerated, with the exception, inter alia, of
"Tetracycline and its derivatives". The Gover
nor in Council must have had in mind something
concrete rather than theoretical, an actual deriv-
ability rather than a theoretical derivability, the
latter including "appropriately close relation of
chemical structure or similarity of number of
carbon atoms in the same arrangement". This
meaning would lend itself to constant litigation
and could lead to the conclusion that two differ
ent products are the derivative of each other.
Nothing shows that the members of the Board
decided from their personal experience in the
field of chemicals and antibiotics. It appears on
the contrary, from the argument of counsel
before the Board and from the remarks of its
members, that the question was considered as a
serious and debatable one (Official report of
proceedings, pp. 147 to 184 and pp. 184 to 223).
I find particularly true the following remark
from Mr. Elliott: "It is difficult. Sometimes
words mean different things to different people,
even in a technical field" (p. 193).
It is common ground that no known formula
actually permits oxytetracycline to be produced
from tetracycline; in fact, the appellant's prod
ucts were not obtained from tetracycline.
It is true that tetracyclines, in the plural,
means a class or a group of antibiotics which
includes oxytetracycline, chlortetracycline and
tetracycline, but tetracycline in the singular is a
product of its own distinct from the others and
from which oxytetracycline cannot actually be
produced. The intention of using the singular
appears not only from the word as spelled, but
also from the use of "its" in the words "Tetra-
cycline and its derivatives". It is also true that
the singular includes the plural (Interpretation
Act, s. 26(7)) so as to mean two or more units of
the same product, but not to the extent of
changing the meaning of a word.
I would therefore give to the word "deriva-
tives" in the Order in Council P.C. 1968-2334
its natural, logical and etymological meaning,
which is also a technical meaning for that term,
that is "a compound actually obtained from
another by chemical reaction."
Otherwise, the most I could say is that the
word "derivatives" in the Order in Council is
ambiguous and its meaning uncertain. In that
case it should be interpreted in the sense most
favourable to the alleged debtor. There is a
more cogent reason to say so. Being antibiotics,
the appellant's products should be admitted-free
of duties unless they are proven to fall within
the exception of "Tetracycline and its deriva
tives". It is here the respondent who invokes
that exception, an exception to exemption. He
had therefore the onus to demonstrate that the
appellant's products fell within that exception.
Such exception, as all others, must be strictly
interpreted. So I would not give to "derivatives"
the broad and theoretical meaning that the
Board attributed to that word, when it is not
recognized by all those conversant with chemi
cals and antibiotics, but, as already said, I would
give the word its natural meaning.
It pertains to the Governor in Council, not to
the Board, to clarify its text so as to avoid any
ambiguity or uncertainty, or to afford a better
protection for chlortetracycline salts manufac
tured in Canada. As the text stands now, I do
not feel justified to read "Tetracycline and its
derivatives" as meaning "Oxytetracycline,
chlortetracycline and tetracycline and their
derivatives" or as meaning "Tetracyclines (in
the plural) and their derivatives". It would have
been too easy to say so.
However, I appreciate the carefulness with
which the Board's decision has been prepared
and the interest it affords in the field of
theoretical derivability. I have also considered
the strong reasons given by my two colleagues
in support of that decision and it is with the
greatest respect for their opinion that I differ
and come to the conclusion that this appeal
should be allowed with costs and that the appel
lant's products above described are not subject
to duty and are free goods during the period
from January 1, 1969, to January 31, 1973.
1 Grey v. Pearson, (1857) 6 H.L.C. 61.
2 Bowes v. Shand, (1877) L.R. 2 A.C. 455; Great Western
Railway Company v. Carpalla United China Clay Company,
[1909t 1 Ch. 218; Great Western Railway v. Bater, [1922] 2
A.C. 1, per Lord Atkinson at page 12; The Township of
Tisdale v. Hollinger Consolidated Gold Mines, [1933] S.C.R.
321, per Cannon J. at page 322; Edwards v. Bairstow,
[1956] A.0 14, per Viscount Simon at pages 30-32, and
Lord Radcliffe at pages 33-36; The Crow's Nest Pass Coal
Company v. The Queen, [1961] S.C.R. 750.
3 Alexander v. Vanderzee, (1872) L.R. 7 C.P. 530; North
British Railway Company v. Budhill Coal and Sandstone,
[1910] A.C. 116; The Caledonian Railway Company v. The
Glenboig Union Fireclay Company, [1911] A.C. 290; West
ern Minerals Ltd. v. Gaumont, [1953] 1 S.C.R. 345; Jenner
v. Allen West & Co., [1959] 1 W.L.R. 554.
4 Ashforth v. Redford, (1873) L.R. 9 C.P. 20; Attorney-
General for the Isle of Man v. Moore, [1938] 3 All E.R. 263.
5 See Unwin v. Hanson, [1891] 2 Q.B. 115, per Lord
Esher, M.R. at pages 119-20:
Now when we have to consider the construction of words
such as this occurring in Acts of Parliament we must treat
the question thus: If the Act is directed to dealing with
matters affecting everybody generally, the words used
have the meaning attached to them in the common and
ordinary use of language. If the Act is one passed with
reference to a particular trade, business, or transaction,
and words are used which everybody conversant with that
trade, business, or transaction, knows and understands to
have a particular meaning in it, then the words are to be
construed as having that particular meaning, though it
may differ from the common or ordinary meaning of the
words. For instance, the "waist" or the "skin" are well-
known terms as applied to a ship, and nobody would think
of their meaning the waist or the skin of a person when
they are used in an Act of Parliament dealing with ships.
Now dealing with the cutting of trees in the country, is
there not a language which all people in the country
conversant with trees know and understand? It is not a
question of mere forestry, but of what persons generally
living in the country know and understand by the use of a
particular term with respect to the cutting of trees there.
Therefore, dealing with the cutting of trees in the country,
this Act of Parliament uses language which everybody
conversant with the cutting of trees in the country knows
and understands. I think it would be mere pedantry in the
present case not to take notice of the well-known meaning
which persons in the country conversant with the cutting
of trees would attach to the word used in this Act of
Parliament. There was evidence given at the trial of its
well-known meaning, though I think that evidence was
unnecessary. Two words, "lopping" and "topping", which
mean different things, are used in the country with respect
to the cutting of trees. The Act gives directions with
respect to cutting trees near a highway to the person who
has to cut them, and to the magistrates who may order
them to be cut, and uses only one of those words, namely,
"lop". That word is well known in the country to mean
cutting off the branches of a tree; "topping" is the cutting
off its top. I think that the proper way to construe the Act,
under those circumstances, is to say that it was only
intended to give power to cut off the branches.
6 Compare Minister of National Revenue v. Wrights'
Canadian Ropes, Ld., [1947] A.C. 109, per Lord Greene
M.R. at pages 124-25.
▪ Compare Borys v. C.P.R., [1953] A.C. 217, per Lord
Porter at page 226:
In these circumstances their Lordships, with such
assistance as is to be obtained from the facts as given in
evidence, must form their own opinion purely as a
matter of construction as to the meaning which the
word 'petroleum' bears when the substance referred to
is in situ in a container below ground.
$ See Camden (Marquis) v. Inland Revenue Commission
ers, [1914] 1 K.B. 641, per Cozens-Hardy M.R. at pages 647
et seq:
It is for the Court to interpret the statute as best they
can. In so doing the Court may no doubt assist them
selves in the discharge of their duty by any literary help
which they can find, including of course the consulta
tion of standard authors and reference to well-known
and authoritative dictionaries, which refer to the
sources in which the interpretation which they give to
the words of the English language is to be found.
9 Compare Canadian National Railway v. Bell Telephone,
[1939] S.C.R. 308, per Duff C.J.C. at page 317.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.