Date: 20010924
Docket: A-385-98
Neutral citation: 2001 FCA 281
CORAM: RICHARD C.J.
ROTHSTEIN J.A.
NOËL J.A.
BETWEEN:
CANADIAN NATIONAL RAILWAY COMPANY
Appellant
and
GORDON MOFFATT,
HER MAJESTY IN RIGHT OF THE
PROVINCE OF NEWFOUNDLAND AND LABRADOR,
CANADIAN TRANSPORTATION AGENCY
Respondent
Heard at Halifax, Nova Scotia, on September 24, 2001.
Judgment delivered from the Bench at Halifax, Nova Scotia, on September 24, 2001.
REASONS FOR JUDGMENT BY: ROTHSTEIN J.A.
Date: 20010924
Docket: A-385-98
Neutral citation: 2001 FCA 281
CORAM: RICHARD C.J.
ROTHSTEIN J.A.
NOËL J.A.
BETWEEN:
CANADIAN NATIONAL RAILWAY COMPANY
Appellant
and
GORDON MOFFATT,
HER MAJESTY IN RIGHT OF THE
PROVINCE OF NEWFOUNDLAND AND LABRADOR,
CANADIAN TRANSPORTATION AGENCY
Respondent
REASONS FOR JUDGMENT
(Delivered from the Bench at Halifax, Nova Scotia,
on Monday, September 24, 2001)
ROTHSTEIN J.A.
[1] This is an appeal from Canadian Transportation Agency Decision LET-R-337-1997 dated December 17, 1997. Although in the appellant's factum a number of issues were raised, counsel advised the Court that it was only necessary to deal with two issues.
1. Is final offer arbitration under the Canada Transportation Act, S.C. 1996 c. 10, involving the carriage of goods by railways, restricted to the rail portion of movements where the total movements involve other modes of transport?
2. Did the final offer made by the shipper in this case comply with paragraph 161(2)(c) of the Canada Transportation Act in that it constituted an undertaking by the shipper to ship the goods to which the arbitration relates?
[2] In respect to the first issue, the appellant submits that paragraph 159(1)(b) restricts final offer arbitration to the rail portion of a movement, even though other modes of transport may be involved. In the present case, the movements are from Toronto or Montreal to St. John's or Cornerbrook in containers. The through movements would involve drayage to a rail siding in Toronto or Montreal, a rail movement to Halifax (although some movements could be to North Sydney), a movement by water to Cornerbrook or St. John's, and drayage once the movement arrived on the island of Newfoundland.
[3] The negotiations between the appellant and the shipper were always on the basis of a through movement from door-to-door. That was the basis upon which the appellant quoted its rate offers. To the extent necessary, the appellant would subcontract with water or highway carriers for those portions of the through movements not covered by rail transportation.
[4] Paragraph 159(1)(b) of the Canada Transportation Act provides in relevant part:
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159. (1) Sections 161 to 169 apply only in respect of matters arising between shippers and carriers that involve
[...]
(b) the carriage of goods by railways to which this Act applies
[...]
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159. (1) Les articles 161 à 169 s'appliquent exclusivement aux différends survenant entre expéditeurs et transporteurs dans les domaines suivants_:
[...]
b) le transport des marchandises par chemin de fer sous le régime de la présente loi
[...]
|
[5] Had it been Parliament's intent to restrict final offer arbitration to the rail portion of a movement involving other modes as well as rail, it would have been a simple matter for Parliament to have used language to that effect. Instead, Parliament used expansive language, i.e. "that involve" and "dans les domaines suivants". The use of these words implies that as long as the carriage of goods by railway forms a part of a movement, final offer arbitration may be invoked with respect to the entire movement. Of course, this may be subject to territorial limitations where goods are transported to or from other countries, but that is not an issue that arises in this case.
[6] The evidence here is that the appellant proposed to charge a through rate from Toronto or Montreal to Newfoundland and subcontract for those portions of the through movement that it itself did not provide. That was the basis upon which the negotiations proceeded and upon which final offers were exchanged. In these circumstances, we see nothing in paragraph 159(1)(b) that would limit access to final offer arbitration to the rail portion of through movements only.
[7] The appellant's argument would lead to a discontinuity between the negotiations between the carrier and the shipper and the final offer arbitration, a result which was not intended. Final offer arbitration is intended as a last resort when a railway company and a shipper are unable to agree on rates or terms and conditions of carriage. Indeed, under paragraphs 161(2)(a) and (b), the final offer of the shipper and the last offer received by the shipper from the carrier are to be submitted to the Agency for reference to final offer arbitration. It would be incongruous for the final offer and last offer to cover a through movement, be referred for final offer arbitration, but then the arbitrator be restricted only to consider the rail portion of the movement.
[8] The Agency, in support of its conclusion that through movements are subject to final offer arbitration, even when a portion of the movements are not by rail, referred to section 120. It is not necessary for this Court to address that section, in view of our conclusion based upon paragraph 159(1)(b).
[9] The second argument of the appellant is that the shipper did not make the undertaking required under paragraph 161(2)(c) to ship the goods to which the arbitration relates. Paragraph 161(2)(c) provides:
|
161(2) A copy of a submission under subsection (1) shall be served on the carrier by the shipper and the submission shall contain
[...]
(c) an undertaking by the shipper to ship the goods to which the arbitration relates in accordance with the decision of the arbitrator;
[...]
|
161(2) Un exemplaire de la demande d'arbitrage est signifié au transporteur par l'expéditeur; la demande contient_:
[...]
c) l'engagement par l'expéditeur d'expédier les marchandises visées par l'arbitrage selon les termes de la décision de l'arbitre;
[...]
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[10] The shipper's offer was:
In accordance with subsection 161(2)(c), I agree, as the shipper, to ship the goods via CN Intermodal, in accordance with the decision of the arbitrator. However, until CN outlines the specific service they plan to provide for late week freight, I am reserving the right to use an alternative carrier one day per week.
[11] The appellant could point to nothing in the evidence that showed that it had outlined to the shipper its planned service for late week freight. In light of the appellant's failure to indicate how it would meet the lake week freight requirements of the shipper, it was not unreasonable for the shipper to reserve the right to use an alternative carrier one day per week. We do not see this as a failure of the shipper to undertake to ship the goods to which the arbitration relates in accordance with the decision of the arbitrator. We are satisfied there has been compliance with paragraph 161(2)(c).
[12] The appeal will be dismissed with costs.
"Marshall Rothstein"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-385-98
STYLE OF CAUSE:CANADIAN NATIONAL RAILWAY COMPANY v.
GORDON MOFFATT ET AL.
PLACE OF HEARING: HALIFAX
DATE OF HEARING: SEPTEMBER 24, 2001
REASONS FOR JUDGMENT BY THE COURT: (RICHARD C.J., ROTHSTEIN,
NOËL J.J.A.)
DELIVERED FROM THE BENCH: ROTHSTEIN J.A.
DATED: SEPTEMBER 24, 2001
APPEARANCES:
BRIAN CRANE AND FOR THE APPELLANT
RONALD LUNAU
L.M. HUART FOR THE APPELLANT
GARY J. CORSANO FOR THE RESPONDENT GORDON MOFFAT
DONALD H. BURRAGE FOR THE RESPONDENT HER MAJESTY IN RIGHT OF THE PROVINCE OF NEWFOUNDLAND AND LABRADOR
RON ASHLEY FOR THE RESPONDENT CANADIAN TRANSPORTATION AGENCY
SOLICITORS OF RECORD:
GOWLING STRATHY HENDERSON LLP FOR THE APPELLANT
OTTAWA, ONTARIO
L.M. HUART FOR THE APPELLANT
MONTREAL, QUEBEC
SAMPSON MCDOUGALL FOR THE RESPONDENT
HALIFAX, NOVA SCOTIA GORDON MOFFATT
KEVIN L. PARSONS FOR THE RESPONDENT HER
MINISTER AND ATTORNEY GENERAL FOR MAJESTY IN RIGHT OF THE
NEWFOUNDLAND AND LABRADOR PROVINCE OF NEWFOUNDLAND AND LABRADOR
RON ASHLEY FOR THE RESPONDENT
HULL, QUEBEC CANADIAN
TRANSPORTATION AGENCY
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