T-1142-73
The Queen (Plaintiff)
v.
Monarch Steelcraft Limited (Defendant)
Trial Division, Addy J.—Vancouver, March 8, 9
and 11, 1977.
Excise tax — Whether door frames made and sold by
defendant are "structural building sections" within the mean
ing of s. 26(4) of Excise Tax Act so as to be exempt from tax
— Excise Tax Act, R.S.C. 1970, c. E-13, s. 26(4).
ACTION.
COUNSEL:
S. J. Hardinge, Q.C., and Alan D. Louie for
plaintiff.
George K. Macintosh and R. W. V. Dickerson
for defendant.
SOLICITORS:
Deputy Attorney General of Canada for
plaintiff.
Farris, Vaughan, Wills & Murphy, Vancou-
ver, for defendant.
The following are the reasons for judgment
rendered in English by
ADDY J.: The issue in the present case is a very
narrow one. It turns entirely on whether the words
"structural building sections" as found in section
26(4) of the Excise Tax Act, R.S.C. 1970, c. E-13,
are applicable to certain metal door frames manu
factured and sold by the defendant company in
1971.
The relevant portions of section 26(4) read as
follows:
26. (4) Where a person
(b) manufactures or produces otherwise than at the site of
construction or erection of a building or other structure,
structural building sections for incorporation into such build
ing or structure, in competition with persons who construct
or erect buildings or other structures that incorporate similar
sections not so manufactured or produced,
he shall, for the purposes of this Part, be deemed not to be, in
relation to any such ... building sections, ... so manufactured
or produced by him, the manufacturer or producer thereof.
If the door frames in question are "structural
building sections" within the meaning of section
26(4)(b) then the defendant would be exempt
from the tax claimed, otherwise he would be liable
therefor. The actual amount is not in dispute nor is
the interest which would be payable thereon
should there be liability.
In the context of paragraph (b) above it is clear
that the word "structural" in the expression
"structural building sections" does not bear its
usual general meaning of "pertaining to a struc
ture" as the latter word is used in the same
paragraph in the expression "any . .. building or
structure": it does not merely qualify a component
as forming part of a structure or building but,
much more restrictively, as being one of the com
ponents which inter-connected, ensure that a
building has a certain weight or load-bearing
capacity or which, in other words, contribute sub
stantially to its strength and solidity and permit it
to resist the various forces created by man and
nature to which it might be subjected. Structural
building sections might be contrasted with mere
fixtures or other integral components, systems or
elements which contribute primarily to the proper
use or enjoyment of the building or structure, such
as doors, windows, non weight-bearing walls, insu
lation, or its heating, plumbing and electrical sys
tems or which enhance it aesthetically, such as
plaster walls, wallpaper, finished flooring and
other such decorative additions. This concept of
the word "structural" in the context of that para
graph was not disputed at trial but, on the con
trary, it was confirmed by the expert engineers
called on behalf of both parties who testified that
such was the interpretation given to that word in
the building trade generally as well as in the
engineering profession. Furthermore the meaning
of "structural building sections" becomes clear
beyond any shadow of a doubt when one considers
the French version of those words in the French
text which reads quite simply des éléments por-
teurs. This expression might be literally translated
as "load-bearing elements", the word "structural"
having been completely omitted from the French
version.
The defendant manufactured two types of metal
door frames: one type was designed primarily for
use in dry-wall construction and the other type
designed primarily for use in masonry and plaster
walls. However, it was possible to use the first type
in a masonry construction although it was not
usual to do so as special connections would have to
be provided to anchor the frame to the masonry.
Both types of frame were manufactured from
satin-coated galvanized steel purchased in sheet
form, the thickness being either 14, 16, 18 or 22
gauge, depending on the width of the door opening
and on the estimated amount of traffic or intended
use to be made of the door. The manufacturing
was carried out by what is termed the cold form
process, as no heating was involved. The metal
sheets were cut into strips and then put in a press
to form the elements of the frame. They were then
put through a punch press to punch out the holes
for the lock and hinges. The frames when com
pleted each had a certain total load-bearing
capacity varying roughly between 350 and 1150
pounds depending on the gauge of the metal used
and on the width of the head or door opening.
To constitute a section manufactured for use in
a building or other structure a "structural building
section", not only must the material composing the
section possess a load-bearing capacity, but the
section itself must be designed and manufactured
with the principal object of its being used ultimate
ly as an integral or constitutional element of the
load-bearing system or body of the building, erec
tion or structure. To be load-bearing in this con
text it must necessarily be substantially load-bear
ing to the extent that it is commonly used for that
purpose because all matter, even gaseous matter,
possesses a certain strength or load-bearing capaci
ty as it can withstand certain forces exerted on it.
An ordinary wooden door frame is not a "struc-
tural building section" because the material has
really no substantial load-bearing capacity but
more importantly because it is designed to act
merely as trim and to close the space between the
wall opening and a door and act as a support for
and a means of properly closing the door, which
itself is not a structural part of the building. In the
case at bar however, because of the fact that the
frames manufactured by the defendant possessed a
certain load-bearing capacity and because both
types of frame were capable of being incorporated
in a load-bearing masonry wall during the con
struction of a building, the defendant claims the
exemption under the above quoted portion of
section 26.
The defendant's manager who was for some
seven years its shop foreman testified that he had
several times observed both types of frames being
installed in masonry walls without any other rein
forcement over the head or opening. He also testi
fied that he never noticed any being installed with
additional support over them. Counsel for the
defendant on this evidence invited the Court to
conclude that the frames were customarily used by
the building trade as "structural building sections"
and that this indicated that it was one of the
primary uses for which they were manufactured
and sold.
The manager in his evidence however did not
state whether the walls which he inspected were
load-bearing or support walls or were merely divi
sion or partition walls. He did not state how many
inspections were made by him nor whether any
other similar frames were generally used by the
building industry as structural building sections. It
is to be noted also that the defendant company
never at any time dealt with the building industry.
All of its frames were purchased by an affiliated
company at that time ADKA and now WACO, for
distribution to the building trade. Under those
circumstances there is not much likelihood of the
manager of the defendant being too conversant
with the custom of the building trade generally in
this regard. In any event there was no evidence to
that effect. More importantly the manager testi
fied that he knew of no instance where the load-
bearing capacity of the door frames had ever been
requested of the defendant. It is of course possible
that the load-bearing capacity might have been
requested from the affiliated company which was
distributing the frames, but in any event no evi
dence was adduced by any officer or employee of
the distributing company to that effect. It would
seem to me that, over the period of eight years
during which the witness was either shop foreman
or manager inevitably some inquiry would have
been made of the manufacturer by either some
building contractor, architect or structural engi
neer regarding the specifications covering load-
bearing capabilities of the door frames, and that
any such inquiry would have come to the attention
of the witness.
Two professional engineers with considerable
experience in structural designing and in the
supervision of construction of buildings were called
on behalf of the plaintiff. Both testified that in the
case of masonry walls additional steel support
would always have been specified over the opening
or head of the door frames of the defendant. This
evidence remained uncontradicted by the expert
engineer called on behalf of the defendant. The
latter witness, a university professor, also appar
ently possessed considerable experience as a con
sultant in the design field and in investigating
engineering projects.
In so far as establishing that the door frames
were commonly used by the building trade without
additional support, as part of the structural load-
bearing system of buldings I must conclude that
not only has the defendant failed to satisfy the
onus placed upon it to do so but the plaintiff has
affirmatively established the opposite to be true.
This proposition therefore cannot be advanced by
the defendant to establish the purpose for which
the door frames were manufactured.
As to the purpose of the design, the examination
for discovery of the authorized officer of the
defendant contains the following questions and
answers:
(1) With regard to the dry-wall type frames
(the drawings and specifications of which were
marked Exhibit 3 on discovery and Exhibit 2-1
at trial):
124 Q. It says here, "Fits securely over dry wall after
opening is completed". Does that indicate to you that it isn't
a load bearing frame at all, it says "fits securely over dry
wall after opening is completed".
A. That would be one application of that, again referring to
the mûltiple applications that can be used. The technical
sheet isn't produced for one particular application of this
frame, and there may be a subsequent data sheet, modified a
little bit, to do other particular jobs.
125 Q. The door frames sold between the two dates, July to
September, 1971, are not door frames sold with that feature
of being load bearing to any specific extent?
A. I can't answer that, I have no knowledge.
(OFF THE RECORD DISCUSSION)
MR. MACINTOSH: During the recess, I discussed this with
Mr. Newhouse, and Mr. Newhouse pointed out that discus
sions on weight and weight requirements are requested by
architects and engineers in certain cases, but we don't have
information as to whether or not there were sales based on
the weight bearing capacity of the door in 1971.
(2) With regard to the masonry frames (designs
and specifications marked Exhibit 4 on discov
ery and Exhibit 2-2 at trial):
MR. CARRUTHERS:
126 Q. Presumably you would give the same answer with
respect to the door frames shown in Exhibit 4?
A. Yes, I would have to.
There was also evidence that the masonry frame
was designed so that it could be installed after the
masonry wall had been completed.
Although the frames are capable of being used
as forms to hold the masonry while a wall is being
erected and although they do possess some load-
bearing capacity, it is evident from their design,
from the actual use being made of them and from
their somewhat limited weight-bearing capacity
that they were not designed or manufactured
primarily for the purpose of resisting loads and
that their primary function is not to form part of
the structural components of a building but rather
to fulfil the same function as ordinary wooden
door frames, namely to serve as finish or trim, to
fill in the space and cover any irregularities which
might exist between the wall opening and the door
and to provide a ready means of hanging and
properly closing a door.
I therefore conclude that the defendant has
failed to establish that the door frames fall within
the exemption provided in section 26(4)(b) of the
Excise Tax Act and that liability to pay the tax
must follow.
Judgment will issue with costs against the
defendant in the amount of tax and interest agreed
upon in the statement of facts.
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.