West Fraser Mills Ltd. v. British Columbia, (2016) 384 B.C.A.C. 306 (CA)

• Judge: Newbury, Tysoe and Groberman, JJ.A.
• Court: Court of Appeal (British Columbia)
• Case Date: March 09, 2016
• Jurisdiction: British Columbia
• Citations: (2016), 384 B.C.A.C. 306 (CA);2016 BCCA 152

West Fraser Mills v. B.C. (2016), 384 B.C.A.C. 306 (CA);

    663 W.A.C. 306

MLB headnote and full text

Temp. Cite: [2016] B.C.A.C. TBEd. AP.027

West Fraser Mills Ltd. (appellant/petitioner) v. Her Majesty the Queen in Right of The Province of British Columbia (respondent/respondent)

(CA42480; 2016 BCCA 152)

Indexed As: West Fraser Mills Ltd. v. British Columbia

British Columbia Court of Appeal

Newbury, Tysoe and Groberman, JJ.A.

April 8, 2016.

Summary:

This appeal concerned the issue of whether electrical cable and hydraulic hose purchased by the appellant constituted "parts" for use on machinery or equipment. If so, they were exempt from taxation under the Social Service Tax Act, R.S.B.C. 1996, c. 431 (the "Act") (repealed by the Provincial Sales Tax Transitional Provisions and Amendments Act, S.B.C. 2013, c. 1, s. 114, effective April 1, 2013). A chambers judge had found that they were not. See [2014] B.C.T.C. Uned. 2335.

The British Columbia Court of Appeal dismissed the appeal. The chambers judge correctly determined that the electrical cable and hydraulic hose were not parts within the meaning of s. 13.10.2 or ss. 13.10.2(1) and 13.10.2(2) of the Act. In the context of machinery and equipment, the grammatical and ordinary meaning of the word "parts" was items in a state ready to become incorporated as an integral or constituent component of the machinery or equipment with no more than relatively minor modifications. The modifications in this case were more extensive and until these modifications were made, the cable and hose were simply materials capable of being made into parts. The court also stated that "the requirements in s. 13.10.2 or ss. 13.10.2(1) and 13.10.2(2) of the [Social Service Tax Act] Regulations are that the part be purchased or leased for use on exempt machinery or equipment or to assemble machinery or equipment that would have been exempt if purchased or leased. There is no requirement that the part must be purchased or leased for use on a particular piece of machinery or equipment or to assemble a particular piece of machinery or equipment."

Sales and Service Taxes - Topic 570.7

Sales tax - Exemptions - Particular clauses - Replacement parts or parts - See paragraphs 1 to 37.

Statutes - Topic 516

Interpretation - General principles - Ordinary meaning of words - See paragraphs 25 and 31.

Statutes - Topic 2603

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Intention from whole of section or statute - See paragraphs 25 and 31.

Words and Phrases

Parts - The British Columbia Court of Appeal discussed the meaning of the word "parts" as found in ss. 13.10.2, 13.10.2(1) and 13.10.2(2) of the Social Service Tax Act Regulations, B.C. Reg. 84/58 - See paragraph 31.

Counsel:

K.L.D. Cook, for the appellant;

S.M.L. Kirkpatrick, for the respondent.

This appeal was heard at Vancouver, B.C., on March 9, 2016, by Newbury, Tysoe and Groberman, JJ.A., of the British Columbia Court of Appeal. Tysoe, J.A., delivered the following decision for the court on April 8, 2016.