Docket: A-396-15
A-398-15
Citation:
2017 FCA 6
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CORAM:
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NADON J.A.
RENNIE J.A.
GLEASON J.A.
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Docket: A-396-15
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BETWEEN:
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CANADIAN NATIONAL RAILWAY COMPANY
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Appellant
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and
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VITERRA INC.
and CANADIAN TRANSPORTATION AGENCY
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Respondents
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Docket: A-398-15
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AND
BETWEEN:
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CANADIAN
NATIONAL RAILWAY COMPANY
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Appellant
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and
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RICHARDSON
INTERNATIONAL LIMITED and
CANADIAN
TRANSPORTATION AGENCY
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Respondents
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REASONS
FOR JUDGMENT
NADON J.A.
[1]
The Canadian National Railway Company (CN or the
appellant) appeals from preliminary and final decisions made by the Canadian
Transportation Agency (the Agency) on December 18, 2014 and May 20, 2015 wherein
the Agency held, pursuant to sections 113 to 115 of the Canada
Transportation Act, S.C. 1996, c. 10 (CTA), that the appellant had
failed to meet its level of service obligation to the respondents Viterra Inc.
(Viterra) and Richardson International Limited (Richardson) (collectively the respondents)
and accordingly ordered remedial measures.
[2]
For the reasons that follow, I would allow the
appeals.
[3]
The 2013 grain crop was the largest crop in
Canadian history with 75.8 million metric tonnes of grain being harvested.
Unable to fully respond to the resulting surge in demand for freight service by
Canadian grain shippers, CN implemented a car rationing methodology based on
each shipper’s use of CN’s grain transportation services during the
post-harvest peak period of the 2012-2013 crop year and assigned to each
shipper a percentage of its available rail car supply.
[4]
In early October, 2013, CN communicated to
Canadian grain shippers, and in particular to the respondents, the share of
rail car supply that would be assigned to each of them (Percentage Shares).
During the period covered by the respondents’ complaints (i.e. a 39 week period
beginning in October, 2013 for Viterra and a 25 week period beginning in
January, 2014 for Richardson), the number of rail cars CN provided to the respondents
fell short of their Percentage Shares calculated under its rationing methodology.
[5]
In addition to the record grain crop, the
prairies experienced extreme winter conditions during the 2013-2014 winter. As
a result, CN had to adapt its modus operandi to ensure the safe handling
and operation of trains (e.g. operate shorter trains at lower speeds) thus
reducing its grain moving capacity.
[6]
In early May, 2014, following the issuance on May
2, 2014 by the Agency of an interim order in an unrelated proceeding involving
Louis Dreyfus Commodities Canada Ltd. (Letter Decision No. 2014-05-02) (Dreyfus
interim order), CN notified the respondents that it would further reduce their
allocation of rail cars by a certain number of cars every third week for the
duration of the Dreyfus interim order.
[7]
In its proceedings before the Agency, commenced
on April 14, 2014, Dreyfus alleged that CN had breached its level of service
obligation at four of its elevator facilities in Saskatchewan and Alberta during
the 2013-2014 crop year. Dreyfus argued that CN had failed to provide it with
the number of cars to which it was entitled pursuant to a confidential contract
entered into between the parties.
[8]
After issuance of the Agency’s Dreyfus interim
order, both Viterra and Richardson unsuccessfully sought intervener status in
those proceedings. In dismissing Viterra and Richardson’s motion to intervene,
the Agency indicated that if the respondents were not satisfied with the level
of service received from CN, they should file separate level of service
complaints under the CTA.
[9]
On October 3, 2014, the Agency issued its final
decision concerning Dreyfus’ complaint, concluding that that CN had not met its
level of service obligation under sections 113 to 115 of the CTA (Letter
Decision No. 2014-10-03) (Dreyfus final order). More particularly, because the
parties had entered into a confidential contract pursuant to subsection 113(4)
of the CTA, the Agency found that it was not open to it by reason of
subsection 116(2) to conduct an investigation into the reasonableness of the
services offered by CN. Rather, the Agency indicated that it was bound to give
effect to the terms agreed to by the parties. Thus, failure by CN to deliver to
Dreyfus the number of cars which it had agreed to deliver was fatal to its
case.
[10]
CN was granted leave to appeal the Dreyfus final
order to this Court. On September 16, 2016 in Canadian National Railway Company
v. Louis Dreyfus Commodities Canada Ltd. and Canadian Transportation Agency,
2016 FCA 232, [2016] F.C.J. No. 1018 (Louis Dreyfus Commodities), our
Court dismissed CN’s appeal. I will return to this decision later in these
reasons.
[11]
On June 12 and 20, 2014, Richardson and Viterra filed
their respective complaints with the Agency, alleging that CN had not complied
with its level of service obligation under sections 113 to 115 of the CTA.
More particularly, the respondents made the following allegations:
1.
That CN had failed to provide them with their Percentage
Shares over an extended period of time; and
2.
That CN had, in an arbitrary and discriminatory manner,
further reduced the rail cars to which they were entitled in order to satisfy
its obligation arising from the Dreyfus interim order.
[12]
On December 18, 2014, the Agency rendered
preliminary decisions with respect to the level of service complaints made by
Viterra and Richardson. The Agency was of the view that although rationing
could not be relied on routinely to smooth out the seasonality of the demand
for Canadian grain shipping, the record 2013 crop was an extraordinary
circumstance justifying the need for rationing.
[13]
The Agency scrutinized CN’s service provision
using the three-step “Evaluation Approach” that
it had earlier enunciated in its Dreyfus final order (paragraphs 36 to 75) as
its approach to all level of service applications filed pursuant to sections
113 to 115. The Evaluation Approach requires the Agency to consider three
questions: (1) Is the shipper’s request for service reasonable? (2) Did the
railway company fulfill the request? (3) If not, are there reasons to justify
the failure to meet the request? If there are reasons to justify the service
failure, then the railway company has not breached its obligations. If no
reasonable justification is found, the railway company will be in breach and
the evaluation will proceed to remedy.
[14]
In applying this Evaluation Approach to Viterra
and Richardson’s complaints, the Agency found that the respondents’ rail car
entitlements under CN’s rationing methodology constituted reasonable requests. The
Agency underlined the fact that although the rationing methodology was not a
guarantee of a specific number of cars, each shipper was entitled to receive,
in a non-arbitrary and non-discriminatory manner, the number of cars that their
market share represented. Because of the degree of specificity of the Percentage
Shares allocated to each shipper, and because of CN’s failure to advise
shippers of the rationing methodology’s intended flexibility, the Agency
rejected CN’s arguments that the Percentage Shares were only meant to be
guidelines.
[15]
As the respondents’ request for service had not
been met, the Agency proceeded to evaluate possible justifications for the
service failure and found none. Despite the fact that there was no contractual
commitment on CN’s part to abide by the Percentage Shares, the Agency found
that the respondents were entitled to their Percentage Shares as these
constituted benchmarks of a reasonable level of service under sections 113 to
115 of the CTA.
[16]
With respect to the impact of the Dreyfus
interim order, the Agency held that it “cannot
determine the magnitude of the impact of [this Order] without any
substantiating evidence or detailed analysis as to whether CN had allocated
these cars ‘off the top’ of the total car supply and not from individual
shippers’ allocations on a rotating and disproportionate basis…”
(paragraph 112 of the preliminary decision in Viterra and paragraph 107 of the
preliminary decision in Richardson). In the Agency’s view, railway companies were
to be given some flexibility to deal with unexpected situations provided that
such flexibility did not result in a given shipper receiving fewer cars than
its market share over a specified period. The number of cars could be reduced,
but the shortfall had to be fairly redistributed amongst shippers in the
rationing pool.
[17]
This led the Agency to find that “CN arbitrarily decided that [the respondents] would be subject
to a fixed car reduction irrespective of what [their] fair share of the
reduction actually ought to have been under a market share-based rationing
methodology” (paragraph 134 of the preliminary decision in Viterra and
paragraph 129 of the preliminary decision in Richardson) and that this was
sufficient to constitute a breach of CN’s level of service obligation.
[18]
Accordingly, the Agency concluded, pursuant to its
three step Evaluation Approach, that:
1.
The respondents’ demand that their Percentage Shares
be respected was a reasonable service request;
2.
CN had not fulfilled this request; and
3.
CN had not provided reasons justifying the
identified service failure.
Thus the Agency ordered CN to deliver to the
respondents the number of cars representing their market share and to implement
a detailed communication protocol.
[19]
On May 20, 2015, the Agency rendered its final
decisions with respect to the level of service complaints made by Viterra and
Richardson. The Agency reviewed the “show cause”
submissions and fixed the actual cumulative shortfall at a certain number of
rail cars. It ordered CN to repay the shortfall in a specific and detailed
manner.
[20]
On August 10, 2015, upon CN’s motion, leave to
appeal the Agency’s preliminary and final decisions was granted by this Court
in accordance with subsection 41(1) of the CTA.
[21]
The appeal raises the following four questions:
1.
What is the applicable standard of review?
2.
Did the Agency lack jurisdiction to determine
the respondents’ complaints?
3.
Did the Agency exceed its jurisdiction in
deciding the respondents’ complaints?
4.
Did the Agency err in concluding that CN
breached its statutory level of service obligation?
[22]
Although, as will appear shortly from these
reasons, I conclude that I need only address the first and fourth issues to
determine these appeals, it will be useful to set out the parties’ respective
submissions on the four issues as they are helpful in understanding the
Agency’s decisions. They also provide a fuller context to the fourth issue in
regard to which I conclude that the Agency erred in determining that CN
breached its level of service obligation under sections 113 to 115 of the CTA.
[23]
CN submits that the Agency lacked jurisdiction
to determine the respondents’ complaints which were not, in its view, level of
service complaints. As an administrative body, the Agency only has the powers
statutorily delegated to it. The Agency has the power to adjudicate level of
service complaints pursuant to section 116 of the CTA, but it does not
have the power to enforce a rationing methodology developed by a railway
company.
[24]
In addition, CN contends that the Agency
exceeded its jurisdiction by prescribing how all railway companies must design
and implement car rationing. In this respect, CN argues that the Agency
breached its duty of procedural fairness in deciding an issue that was outside
the scope of the pleadings. More particularly, CN takes issue with the Agency
describing how rationing should be conducted (paragraphs 189 to 192 of the
Agency’s preliminary decision in Viterra and paragraphs 184 to 188 of the
Agency’s preliminary decision in Richardson), noting that the respondents had
not challenged its rationing methodology.
[25]
Further, CN asserts that the Agency, whose
powers are complaint specific and not systemic, converted the adjudication of
the complaints into an improper systemic review. In CN’s view, the Agency was
not mandated to “broadly legislate how all railway
companies must move their traffic or conduct their operations”.
[26]
CN also argues that the Agency erred in finding
that CN breached its level of service obligation under the CTA in that
it confused CN’s rationing methodology with its statutory obligation. CN
reiterates its need for flexibility in order to react to unexpected
contingencies and that it should not be bound by strict adherence to a
mathematical formula. According to CN, it was wrong for the Agency to determine
that it had to justify any departure from the rationing methodology which, in
its view, was a mere guideline. In CN’s opinion, the incorrect conclusion that
it breached its statutory obligation was influenced by the Agency’s Evaluation
Approach which it applied in rendering its preliminary decisions. In CN’s view,
this approach places too high of a burden on railway companies.
[27]
Finally, CN submits that the Agency did not have
the power to order specific performance of the rationing methodology or to
order “off the top” car allocations. While it
considers that the former does not fall within the Agency’s statutory powers, CN
affirms that the latter would inevitably result in breaches of CN’s level of
service obligation to other grain shippers.
[28]
The respondents first emphasize that CN failed
to raise the question of the Agency's jurisdiction before the Agency itself.
Consequently, they ask this Court to decline to consider the jurisdictional
arguments made by CN. In any event, the respondents contend that their
complaints fell squarely within the Agency's mandate as they constituted true
level of service complaints even if they were based on a request that CN's
rationing methodology be respected. In their view, the Agency did not enforce
something other than the obligation imposed upon CN by the CTA.
[29]
In answer to CN’s argument that the Agency had exceeded
its jurisdiction by converting the complaints into a systemic review, the respondents
say that the Agency merely enunciated general principles relating to rationing
methodologies. In their view, the Agency provided guidance rather than
mandatory requirements. Further, the respondents say that notwithstanding CN's
suggestion that the rationing methodology was not at issue before the Agency,
there could be no doubt that the rationing methodology was the central focus of
their complaints.
[30]
With respect to the Agency’s Evaluation
Approach, the respondents say, contrary to CN’s submission, that it does not
impose an absolute obligation on railway companies. In their view, the
Evaluation Approach was consistent with previous case law, i.e. that the
service request must be reasonable. Moreover, the respondents emphasize that CN
had received specific notice that the Agency would follow this approach well
before the hearing.
[31]
Finally, turning to the Agency's remedial
jurisdiction, the respondents argue that the Agency's remedial powers under
subsection 116(4) of the CTA are broad and include ordering “off the top” car allocations.
[32]
The Agency submits that it has standing to be
heard on an appeal of its own decisions pursuant to subsection 41(4) of the CTA
and says that it has broad and discretionary powers under the CTA to
make orders where it finds that a railway company does not fulfil its level of
service obligation. It asserts that it developed the Evaluation Approach
according to its mandate so as to refine its approach to matters that come
within its jurisdiction.
[33]
CN’s appeals from the Agency’s preliminary and
final decisions are before this Court pursuant to subsection 41(1) of the CTA
which provides as follows:
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Appeal from Agency
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Appel
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41 (1) An appeal lies from the
Agency to the Federal Court of Appeal on a question of law or a question of
jurisdiction on leave to appeal being obtained from that Court on
application made within one month after the date of the decision, order, rule
or regulation being appealed from, or within any further time that a judge of
that Court under special circumstances allows, and on notice to the parties
and the Agency, and on hearing those of them that appear and desire to be
heard.
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41 (1) Tout acte — décision,
arrêté, règle ou règlement — de l’Office est susceptible d’appel devant la
Cour d’appel fédérale sur une question de droit ou de compétence, avec
l’autorisation de la cour sur demande présentée dans le mois suivant la date
de l’acte ou dans le délai supérieur accordé par un juge de la cour en des
circonstances spéciales, après notification aux parties et à l’Office et
audition de ceux d’entre eux qui comparaissent et désirent être entendus.
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[34]
Although these are statutory appeals, the
applicable standard of review is the one enunciated by the Supreme Court in Dunsmuir
v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190. In effect, in Mouvement
laïque québécois v. Saguenay (City), 2015 SCC 16, [2015] 2 S.C.R. 3, the
Supreme Court held that statutory appeals of decisions of specialized
administrative tribunals were to be reviewed on the basis of administrative law
principles. More particularly, at paragraph 38 of its reasons, the Supreme
Court held as follows:
Where a court reviews a decision of a specialized administrative
tribunal, the standard of review must be determined on the basis of
administrative law principles. This is true regardless of whether the review
is conducted in the context of an application for judicial review or of a
statutory appeal.
[emphasis added]
[35]
While CN did not address the standard of review,
the respondents and the Agency argued that except for the procedural fairness
issue raised by CN, the Agency’s decisions were to be reviewed upon the
reasonableness standard. Indeed, to the extent that a statutory appeal turns on
the interpretation of a tribunal’s home statute, as is the case here, a
standard of reasonableness presumption applies (see Ontario (Energy Board)
v. Ontario Power Generation Inc., 2015 SCC 44, [2015] 3 S.C.R. 147 at
paragraph 73 and Alberta (Information and Privacy Commissioner) v. Alberta
Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654 at paragraph 30).
[36]
Considering that the Agency is a specialized
administrative body with technical expertise, the Supreme Court and this Court
have held that the Agency was entitled to a deferential standard of review for
matters falling within the scope of its expertise and mandate (Council of
Canadians with Disabilities v. VIA Rail Canada Inc., 2007 SCC 15, [2007] 1
S.C.R. 650 at paragraph 100; Canadian National Railway Company v. Richardson
International Limited, 2015 FCA 180, 476 N.R. 83 at paragraphs 25-31; Canadian
National Railway Company v. Canadian Transportation Agency, 2010 FCA 65,
[2011] 3 F.C.R 264 at paragraphs 28-30).
[37]
More particularly, regarding the issue of the
Agency’s characterization of a level of service complaint, this Court held in Canadian
National Railway Company v. Canadian Transportation Agency, 2013 FCA 270,
454 N.R. 125 (at paragraphs 3-5) that the applicable standard of review was that
of reasonableness.
[38]
Given that the questions raised by these appeals
relate to the Agency’s interpretation of its home statute and clearly fall
within the scope of its expertise and given that the parties do not challenge
the existing jurisprudence, it is my view that the applicable standard of
review must be that of reasonableness. Although I agree with the respondents
and the Agency that the correctness standard applies to questions of procedural
fairness (Mission Institution v. Khela, 2014 SCC 24, [2014] 1 S.C.R. 502
at paragraph 79), I need not say anything further on this as it is not
necessary for me to address the procedural fairness argument raised by CN in
order to dispose of the appeal.
[39]
I now turn to the merits of the appeals. Because
of my view that the Agency made a reviewable error in concluding that CN
breached its statutory level of service obligation, I need not address issues 2
and 3 which pertain to the Agency’s jurisdiction.
[40]
I begin by setting out the relevant provisions
of law:
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Accommodation for traffic
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Acheminement du trafic
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113 (1) A
railway company shall, according to its powers, in respect of a railway owned
or operated by it,
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113 (1) Chaque compagnie de chemin de fer,
dans le cadre de ses attributions, relativement au chemin de fer qui lui
appartient ou qu’elle exploite :
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(a) furnish, at the point of origin, at the point of
junction of the railway with another railway, and at all points of stopping
established for that purpose, adequate and suitable accommodation for the
receiving and loading of all traffic offered for carriage on the railway;
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a) fournit,
au point d’origine de son chemin de fer et au point de raccordement avec
d’autres, et à tous les points d’arrêt établis à cette fin, des
installations convenables pour la réception et le chargement des marchandises
à transporter par chemin de fer;
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(b) furnish adequate and suitable accommodation for the
carriage, unloading and delivering of the traffic;
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b)
fournit les installations convenables pour le transport, le déchargement et
la livraison des marchandises;
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(c) without delay, and with due care and diligence,
receive, carry and deliver the traffic;
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c)
reçoit, transporte et livre ces marchandises sans délai et avec le soin et la
diligence voulus;
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(d) furnish and use all proper appliances, accommodation
and means necessary for receiving, loading, carrying, unloading and delivering
the traffic; and
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d)
fournit et utilise tous les appareils, toutes les installations et tous les
moyens nécessaires à la réception, au chargement, au transport, au
déchargement et à la livraison de ces marchandises;
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(e) furnish any other service incidental to transportation
that is customary or usual in connection with the business of a railway
company.
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e)
fournit les autres services normalement liés à l’exploitation d’un service de
transport par une compagnie de chemin de fer.
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…
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[…]
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Confidential contract between company and shipper
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Contrat confidentiel
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(4) A shipper and a railway company may, by means of a
confidential contract or other written agreement, agree on the manner in
which the obligations under this section are to be fulfilled by the company.
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(4) Un expéditeur et une compagnie peuvent s’entendre, par contrat
confidentiel ou autre accord écrit, sur les moyens à prendre par la compagnie
pour s’acquitter de ses obligations.
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Facilities for traffic
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Installations de transport
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114 (1) A railway company shall,
according to its powers, afford to all persons and other companies all
adequate and suitable accommodation for receiving, carrying and delivering
traffic on and from its railway, for the transfer of traffic between its
railway and other railways and for the return of rolling stock.
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114 (1)
Chaque compagnie de chemin de fer doit, dans le cadre de ses attributions,
fournir aux personnes et compagnies les aménagements convenables pour la
réception, le transport et la livraison de marchandises sur son chemin de fer
et en provenance de celui-ci, pour le transfert des marchandises entre son
chemin de fer et d’autres chemins de fer ainsi que pour le renvoi du matériel
roulant.
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…
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[…]
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Adequate and suitable accommodation
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Installations convenables
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115 For the purposes of subsection
113(1) or 114(1), adequate and suitable accommodation includes reasonable
facilities
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115
Pour l’application des paragraphes 113(1) ou 114(1), des installations
convenables comprennent des installations :
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(a) for the junction of private sidings or private spurs
with a railway owned or operated by a company referred to in that subsection;
and
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a) pour
le raccordement de voies latérales ou d’épis privés avec un chemin de fer
possédé ou exploité par une compagnie visée à ces paragraphes;
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(b) for receiving, carrying and delivering traffic on and
from private sidings or private spurs and placing cars and moving them on and
from those private sidings or private spurs.
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b) pour la réception, le transport et la
livraison de marchandises sur des voies latérales ou épis privés, ou en
provenance de ceux-ci, ainsi que le placement de wagons et leur traction dans
un sens ou dans un autre sur ces voies ou épis.
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Complaint and investigation concerning
company’s obligations
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Plaintes et enquêtes
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116 (1) On
receipt of a complaint made by any person that a railway company is not
fulfilling any of its service obligations, the Agency shall
(a) conduct, as expeditiously as
possible, an investigation of the complaint that, in its opinion, is warranted;
and
(b) within one hundred and twenty days after receipt of the
complaint, determine whether the company is fulfilling that obligation.
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116 (1) Sur réception d’une plainte selon
laquelle une compagnie de chemin de fer ne s’acquitte pas de ses obligations
prévues par les articles 113 ou 114, l’Office mène, aussi rapidement que
possible, l’enquête qu’il estime indiquée et décide, dans les cent vingt
jours suivant la réception de la plainte, si la compagnie s’acquitte de ses
obligations.
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Confidential contract binding on Agency
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Contrat confidentiel
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(2) If a
company and a shipper agree, by means of a confidential contract, on the
manner in which service obligations under section 113 are to be fulfilled by
the company, the terms of that agreement are binding on the Agency in
making its determination.
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(2) Dans les cas où une compagnie et un expéditeur conviennent,
par contrat confidentiel, de la manière dont la compagnie s’acquittera de
ses obligations prévues par l’article 113, les clauses du contrat lient l’Office
dans sa décision.
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[41]
With respect to the approach to be taken in
regard to sections 113 to 115 of the CTA, it is not disputed that the
Supreme Court’s decision in A.L. Patchett & Sons Ltd. v. Pacific Great
Eastern Railway, [1959] S.C.R. 271, 17 D.L.R. (2d) 449 (Patchett),
remains the leading authority on the matter. The essence of the Supreme Court’s
decision in Patchett can be found at paragraphs 5, 6, 105 and 111 of
that decision where the three members of the majority wrote as follows:
5. Apart from
statute, undertaking a public carrier service as an economic enterprise by a
private agency is done on the assumption that, with no fault on the agency's
part, normal means will be available to the performance of its duty. That
duty is permeated with reasonableness in all aspects of what is undertaken
except the special responsibility, of historical origin, as an insurer of
goods; and it is that duty which furnishes the background for the general
language of the statute. The qualification of reasonableness is exhibited
in one aspect of the matter of the present complaint, the furnishing of
facilities: a railway, for example, is not bound to furnish cars at all
times sufficient to meet all demands; its financial necessities are of the
first order of concern and play an essential part in its operation, bound up,
as they are, with its obligation to give transportation for reasonable charges.
Individuals have placed their capital at the risk of the operations; they
cannot be compelled to bankrupt themselves by doing more than what they have
embraced within their public profession, a reasonable service. Saving any
express or special statutory obligation, that characteristic extends to the
carrier's entire activity. Under that scope of duty a carrier subject to the
Act is placed (Rand J.).
6. The examples of these extreme
situations furnish guidance for the solution of partial cessations of work
associated with labour controversy. The duty being one of reasonableness how
each situation is to be met depends upon its total circumstances. The carrier
must, in all respects, take reasonable steps to maintain its public function;
and its liability to any person damaged by such a cessation or refusal of
services must be determined by what the railway, in the light of its knowledge
of the facts, as, in other words, they reasonably appear to it, has effectively
done or can effectively do to meet and resolve the situation. In weighing the
relevant considerations, time may be a controlling factor (Rand J.).
…
105. I am in agreement with the views
expressed by Coady and Sheppard JJ.A. in the Court below and by my brother Rand
that the statutory duty imposed upon the respondent is not an absolute duty
but is only a relative one to provide service so far as it is reasonably possible
to do so (Abbot J., citation omitted).
…
111. …It is also my opinion that the
railway's statutory obligation under s. 203(1) (c) is not an absolute
but a relative one, as defined in the reasons of my brother Rand (Judson J.).
[emphasis added]
[42]
In Canadian National Railway v. Northgate
Terminals Ltd., 2010 FCA 147, [2011] 4 F.C.R. 228, Sharlow J.A., writing
for a majority of this Court, sets out her understanding of the Patchett
principle in the following terms at paragraphs 34 and 35 of the reasons:
[34] Patchett
is generally recognized as the leading case on the determination of the
adequacy of the service provided by a railway company. CN argues that Patchett
established three principles of law that were not applied properly, or at all,
by the Agency. CN asserts that the three principles are: (1) a railway company
is not bound to furnish cars at all times sufficient to meet all demands, (2)
the obligation to give transportation is subject to reasonable charges, and (3)
on the duty of a railway company to furnish services there is a correlative
obligation on the customer to furnish reasonable means of access.
[35] Patchett stands for the
general proposition that the duty of a railway company to fulfil its service
obligations is “permeated with reasonableness in all aspects of what is
undertaken” (except in relation to its special responsibility as an insurer
of goods, which is not in issue in this case). As I read Patchett, the
three propositions to which CN refers in its argument are not free-standing
principles of law. They are guidelines that must inform any determination by
the Agency of a service complaint, but they do not necessarily compel a
particular outcome. That is because the determination of a service complaint
requires the Agency to balance the interests of the railway company with those
of the complainant in the context of the particular facts of the case.
[emphasis added]
[43]
Thus, whether a railway company has provided or
failed to provide adequate and suitable accommodation in respect of the traffic
offered to it for carriage will depend on an assessment of all the relevant
circumstances. The measure of that assessment is reasonableness. Consequently,
in conducting the inquiry which paragraph 116(1)(a) of the CTA
requires it to perform, the Agency must make its determination in light of all
of the surrounding circumstances, keeping in mind that the railway company’s
obligations are not absolute.
[44]
I now return to the Agency’s preliminary
decisions of December 18, 2014 as a more detailed review thereof is necessary
to determine the appeals.
[45]
On the basis of its Evaluation Approach, the
Agency started by asking itself whether the respondents’ request for their
Percentage Shares was a reasonable one. First, the Agency agreed “that the 2013-2014 crop year presented a set of
extraordinary circumstances that would justify the temporary need for a
rationing methodology” (paragraph 54 of the preliminary decision in
Viterra and paragraph 55 of the preliminary decision in Richardson).
[46]
Second, the Agency stated that since the
complaints made by the respondents were based exclusively on their car
entitlement under CN’s rationing methodology, it would consider whether the
respondents’ request for their Percentage Shares constituted a reasonable car
request.
[47]
Third, after stating its view regarding the use
of a rationing methodology by a railway company and what criteria such
methodology should meet, the Agency made the point that since the respondents
were not challenging “the validity of CN’s decision to
use a market share-based rationing methodology,” (paragraph 58 of the preliminary
decision in Viterra and paragraph 59 of the preliminary decision in Richardson),
it would determine the merits of the respondents’ complaints by determining
what level of service they were entitled to in light of their Percentage Shares
under CN’s rationing methodology.
[48]
Fourth, the Agency then dealt with CN’s argument
that its rationing methodology was not a binding commitment, but rather a guideline,
i.e. a target that it would attempt to meet. The Agency’s answer to CN’s
argument was that if CN intended its rationing methodology to be merely a
guideline, it ought to have been more specific in its dealings with the
respondents, noting that the Percentage Shares had been expressed “not…in approximates, but with a degree of specificity to the
first decimal place” (paragraph 60 of the preliminary decision in
Viterra and paragraph 61 of the preliminary decision in Richardson).
[49]
Then, after stating that the respondents were
not entitled to a specific number of cars under CN’s rationing methodology, the
Agency held that they were nonetheless entitled to receive their Percentage Shares
as determined by the rationing methodology, adding that “Rationing cannot be applied in an arbitrary or discriminatory
way, with no accountability, and a rationing methodology ceases to be
consistent with statutory railway company level of service obligations if it is
not applied fairly with rigour and consistency” (paragraph 61 of the
preliminary decision in Viterra and paragraph 62 of the preliminary decision in
Richardson).
[50]
As a result, the Agency concluded its analysis
under the first step of its Evaluation Approach by saying that the respondents’
request that CN provide to them their Percentage Shares was a reasonable
request (paragraph 65 of the preliminary decision in Viterra and paragraph 66
of the preliminary decision in Richardson).
[51]
The Agency then proceeded to the second step of
its Evaluation Approach to determine whether CN had provided to the respondents
their Percentage Shares. It found that CN had failed to allocate to the
respondents their Percentage Shares. More particularly, the Agency held that CN
had not fulfilled Richardson’s service request for the period from grain weeks
23 to 47 of the 2013-2014 crop year and that it had not fulfilled Viterra’s
service request for the period from grain weeks 9 to 47 of the 2013-2014 crop
year.
[52]
The Agency then proceeded to the third step of
its Evaluation Approach so as to determine whether CN’s failure to provide the
respondents with their Percentage Shares could be justified.
[53]
In answer to CN’s argument that flexibility was
required during the 2013-2014 crop year in order to deal with difficult
circumstances, the Agency, although recognizing CN’s need for flexibility, held
that CN’s rationing methodology “already integrates a
sufficient degree of flexibility” (paragraph 154 of the preliminary
decision in Viterra and paragraph 149 of the preliminary decision in
Richardson).
[54]
CN argued that it had taken all commercially
reasonable steps to move as much grain as possible during the 2013-2014 crop
year, for example that it had acquired additional hopper cars and high power
locomotives to meet the accrued demand for services, and that it had increased
its human resources. However, the Agency observed that CN’s efforts had been
insufficient to meet the increased demand concluding that “any issues with capacity acquisition have no bearing on a
rationing program based on percentage allocations and do not justify its faulty
implementation” (paragraph 163 of the preliminary decision in Viterra
and paragraph 158 of the preliminary decision in Richardson).
[55]
CN further argued that during the 2013-2014 crop
year that it had transported record levels of grain. The Agency’s response was
that the fact that CN had surpassed its previous records was an irrelevant
consideration which did not justify its service failure. At paragraph 173 of
the preliminary decision in Viterra and paragraph 168 of the preliminary
decision in Richardson, the Agency made the following remarks:
The Agency is of
the opinion that, even assuming that CN faced the supply chain challenges that
it claims, this does not constitute any justification as to why CN did not
provide [the respondents’] share of CN’s Average Total Weekly Car Spots,
however limited that weekly spotting may have been in weeks when CN faced
supply chain challenges.
[56]
Finally, CN argued that fulfilling the
respondents’ requests for their Percentage Shares would have a detrimental
effect on other grain shippers which it served. After making the point that the
service which a rail company owed to shippers at large did not relieve a
railway company from its level of service obligation to a specific individual
shipper, the Agency concluded the third step of its Evaluation Approach by
stating that it could not agree with CN’s argument that its obligations to
other shippers constituted a justification for its failure to deliver the
Percentage Shares to the respondents.
[57]
Then, at paragraphs 185 and 186 of its preliminary
decision in Viterra and paragraphs 180 and 181 of its preliminary decision in
Richardson, the Agency summarized its determinations as follows:
In examining
whether CN breached its level of service obligations to [the respondents] using
its three-step Evaluation Approach, the Agency finds that:
Step 1: With its actual service requirements
constrained by car rationing, [the respondents’] service request to receive
service at a level that met the historical shipping percentage allocation
imposed on it by CN in its car rationing methodology, that is, [redacted]
percent of CN's total available car supply, constitutes a reasonable service
request. This is reinforced by [the respondents’] need for predictable and
reliable service to plan its operations and purchase and sales programs.
Step 2: CN has not fulfilled [the respondents’]
service request for grain weeks [9 to 47 in the case of Viterra and 23 to 47 in
the case of Richardson] of the 2013-2014 crop year. During grain weeks 40 to
47, CN further breached its level of service obligation to [the respondents] by
subjecting [them] to inequitable treatment by reducing the cars available to [them]
by an arbitrary number unrelated to its market share.
Step 3: CN did not establish reasons that
would justify the service failures identified in Step 2.
The Agency therefore finds that CN has
breached its statutory level of service obligations to [the respondents].
[58]
In my respectful view, the Agency’s preliminary
decisions are unreasonable for two reasons. First, the Agency erred in treating
CN’s rationing methodology as if it constituted a confidential contract
pursuant to subsection 113(4) of the CTA. Second, because of its
error regarding the meaning and scope of the rationing methodology, the Agency
did not conduct an investigation into the question of whether or not CN had
failed to provide to the respondents adequate and suitable accommodation for
their traffic.
[59]
The underlying idea behind the Agency’s
preliminary decisions is that CN must be held to the binding commitment which
it made to the respondents when it communicated to them their respective
Percentage Shares. Although, to be fair to the Agency, it does not use the
words “binding commitment”, I can only conclude
from the words used by the Agency to express its findings that it was of the
view that the respondents were entitled to their Percentage Shares under CN’s
rationing methodology because CN’s rationing methodology constituted a binding
commitment to which it was giving effect. In my view, paragraph 62 of the
Viterra preliminary decision and paragraph 63 of the Richardson preliminary
decision leave no doubt on that point:
Having calculated
and communicated a relatively precise allocation standard for [the respondents],
which was derived from historic market share data, CN cannot expect to then be
entitled to compromise the integrity of that standard by viewing it as a mere
guideline or soft obligation and veer from it unilaterally and without proper
notice. CN itself has set the allocation standard that it should have met.
If a railway company unilaterally assumes the role of gatekeeper of the car
supply, as CN did in this case, it must also accept the stewardship
responsibilities that accompany that role.
[60]
What the above paragraph from the preliminary decisions
shows is that the Agency treated CN’s rationing methodology as if it
constituted a confidential contract under subsection 113(4) of the CTA,
i.e. a written agreement pursuant to which the parties have agreed “on the manner in which the obligations under this section
are to be fulfilled by the company”. Consequently, rather than
conducting the inquiry set out at paragraph 116(1)(a) of the CTA,
i.e. an inquiry into whether CN had fulfilled its obligations under sections
113 to 115, the Agency’s investigation amounted to ascertaining CN’s commitment
to the respondents pursuant to its rationing methodology and then giving effect
to the terms of that commitment.
[61]
There are other paragraphs in the Agency’s
preliminary decisions which leave no doubt that it viewed CN’s rationing
methodology as a binding commitment on CN’s part to provide specific Percentage
Shares to the respondents from which no deviation would be tolerated. In that
regard, I have in mind paragraph 163 of the Viterra preliminary decision and paragraph
158 of the Richardson preliminary decision where the Agency dismissed CN’s
argument that it had taken all commercially reasonable steps to move as much
grain as it could during the 2013-2014 crop year. In dismissing CN’s argument,
the Agency made it clear that because CN had decided to put in place a
rationing methodology, it would not make any allowance in favour of CN.
Specifically, the Agency said that “any issues with
capacity acquisition have no bearing on a rationing program based on percentage
allocations and do not justify its faulty implementation”.
[62]
I also have in mind paragraph 173 of the Viterra
preliminary decision and paragraph 168 of the Richardson preliminary decision
where the Agency dismissed CN’s argument that it had transported record levels
of Canadian grain during the 2013-2014 crop year and that it had delivered more
cars to the respondents (Richardson and Viterra, in that order, are the
shippers which received the most cars during the 2013-2014 crop year) than to
any other shipper during the relevant period. The Agency dismissed CN’s
argument because ìt determined that CN’s difficulties in regard to the supply
chain could not justify its failure to provide to the respondents their
Percentage Shares. In other words, the Agency found that CN had bound itself to
provide specific Percentage Shares and the Agency would hold it to that
promise.
[63]
I should also mention paragraph 154 of the
Viterra preliminary decision and paragraph 149 of the Richardson preliminary
decision where the Agency dismissed CN’s argument that it required flexibility,
in particular during crop years such as the 2013-2014 crop year, to make
adjustments to its car supply so as to meet shifting priorities and changing
circumstances. The Agency’s answer to CN’s submission was a simple one, i.e.
that CN’s rationing methodology “already integrates a
sufficient degree of flexibility”. In other words, because CN had
committed itself to provide to the respondents their Percentage Shares, the
Agency determined that it should not be allowed any flexibility in regard to
that commitment.
[64]
There can be no doubt, in my view, that CN’s
rationing methodology does not constitute a confidential contract or other
written agreement pursuant to which the parties have agreed, in the words of
subsection 113(4), “on the manner on which the
obligations under this section are to be fulfilled by the [railway] company”.
It is worth pointing out that neither the respondents nor the Agency advanced
the proposition that CN’s rationing methodology constituted a confidential
contract or that it should be treated as such.
[65]
Where, however, the parties have entered into
such an agreement, the test of reasonableness enunciated in Patchett
will not apply and the investigation which paragraph 116(1)(a) of the CTA
requires the Agency to perform will be restricted by the terms of the written
agreement which shall be binding on the Agency. In such circumstances, a
railway company will be unable to rely on an argument that it could not
reasonably be expected to fulfill the obligations found in the confidential
contract. The parties to such a contract will be held to their bargain by the
Agency. Consequently, if the railway company fails to fulfil its obligations
under the confidential contract, it will be found by the Agency to have
breached its obligations under sections 113 to 115. It is on that basis that
our Court upheld the Agency's decision in Louis Dreyfus Commodities
where, at paragraph 26 of its reasons, the Court said:
The CTA
contemplates that a shipper and a railway company may enter into an agreement
that would set out the manner in which the service obligations of the railway
company may be fulfilled. If the parties have entered into such an
agreement, the service obligations of the railway company will be determined
based on what the railway company agreed to provide, not on whether any
particular order is considered to be reasonable.
[emphasis added]
[66]
As the parties to these proceedings did not
enter into a confidential contract, the Patchett principle of reasonableness
applied to the Agency’s determination as to whether CN had fulfilled its
obligations under sections 113 to 115. In carrying out its investigation
pursuant to paragraph 116(1)(a), the Agency had to determine whether the
number of rail cars provided to the respondents by CN during the weeks at issue
of the 2013-2014 crop year constituted adequate and suitable accommodation in
regard to their traffic. Because of its misunderstanding regarding the meaning
and scope of CN’s rationing methodology, the Agency failed to perform the proper
inquiry.
[67]
The inquiry which, in my respectful view, should
have been conducted by the Agency is the one which it conducted in its Letter Decision
Number 2015-06-18 dated June 18, 2015 (Decision 06-18), in the matter of another
complaint made by Louis Dreyfus Commodities Canada Ltd. (Dreyfus Commodities).
Before examining how the Agency conducted its investigation in that matter, it
is of interest to note that the Agency, at paragraphs 64 to 66 of its Decision
06-18, distinguished its approach in that case with the one that it adopted in
the present matter. The Agency wrote as follows:
[64] For the
2013-2014 crop year, the Agency found in the Decisions dated December 18, 2014
related to Richardson International Limited and Viterra Inc. that, in the
extraordinary circumstances of the 2013-2014 crop year, rationing was
justified. Specifically the Agency stated:
…given the record 2013 crop in
western Canada, an export grain volume that was 50 percent higher than average,
and the relatively short notice given to the rail system to react to the
resulting transient surge in demand, the Agency agrees with CN that the
2013-2014 crop year presented a set of extraordinary circumstances that would
justify the temporary need for a rationing methodology.
[65] However, given the scope of the
level of service applications in those two cases, the Agency was only asked to
determine if CN breached its level of service obligations by not providing the
number of cars in accordance with the rationing methodology it had imposed and
communicated to its customers. CN’s methodology was based on market share,
that is, it provided that the shipper would be allocated a number of cars in
accordance with that shipper’s historical market share of the general
population of hopper cars. Therefore, in those cases, the Agency was able to
use the shipper’s share and compare it with actual service received to
determine if CN had served its customers according to its own car allocation
scheme.
[66] In the present case, the Agency
does not have the same parameters it had in the RIL and Viterra cases. It must
therefore determine if CN had a reasonable justification to meet 83 percent of
LDC’s request, having regard to the particular circumstances under which the
cars were ordered by and delivered to LDC.
[emphasis added]
[68]
As it did in the present matter, the Agency applied
its three step Evaluation Approach in order to make its determination. With
respect to the first step, the Agency concluded that the cars ordered by
Dreyfus Commodities during the complaint period constituted a reasonable
request for service. It then turned to the second step in regard to which it
concluded that CN had not fulfilled Dreyfus Commodities’ request for service
during the complaint period. The Agency then turned to the third step of its
Evaluation Approach to determine whether CN’s failure to meet Dreyfus
Commodities demand for cars was justified.
[69]
The Agency first considered the size of the
2013-2014 crop year, pointing out that it was “significantly
larger than recent years” (paragraph 67 of Decision 06-18). In so
concluding, it took note of the evidence before it that the 2013-2014 crop year
was 50 percent higher than the average crop year.
[70]
Second, the Agency considered that CN had made great
efforts to acquire additional cars to deal with the increased demand, noting
that it had brought into service a considerable number of additional cars. In
other words, CN had increased the number of cars available for allocation
between its customers so as to respond to a dramatic increase in the demand for
its services.
[71]
The Agency then noted that during the 2013-2014
crop year, Dreyfus Commodities had ordered substantially more rail cars than in
the past two crop years. The Agency also considered the fact that a very severe
winter had prevailed on the prairies during the 2013-2014 crop year, noting
that the temperature had been below minus 30 degrees in Winnipeg and Saskatoon for
a period of almost 30 days. The Agency noted that extreme cold weather forces
rail companies to change their operations, including operating at lower speeds
and with shorter train lengths, and increases problems with infrastructure. In
particular, during the 2013-2014 winter those operational constraints “were significantly greater, and lasted significantly longer,
than average” (paragraph 72 of Decision 06-18).
[72]
The Agency also noted that for the 2013-2014 crop
year, CN had implemented a rationing methodology based on each shipper’s
historical use of its grain service during the post-harvest peak period of the 2013-2014
crop year. The Agency also considered the fact that planning had been made
difficult for CN during the 2013-2014 crop year because of the magnitude of the
crop and the difficult weather conditions.
[73]
All of the above considerations led the Agency
to conclude the third step of its Evaluation Approach as follows:
[78] The
Agency finds that, on balance, when considered together, the factors constitute
a reasonable explanation as to why CN provided only 83 percent of the cars
requested by LDC for its Dawson Creek facility during the complaint period.
The crop was of extraordinary size and the winter was exceptionally harsh.
These two factors were outside the railway company’s direct control and were
difficult to predict. The first should have been a boon to both the shipper and
railway company, and might have been managed better except for the weather,
which was a hindrance to both.
[79] For greater clarity, this finding
relates to specific service provided to LDC under the exceptional circumstances
that prevailed during the complaint period.
[74]
Thus, by reason of the factors which it
considered relevant in making its Decision 06-18, the Agency concluded that CN
had not breached its service obligation to Dreyfus Commodities during the complaint
period of the 2013-2014 crop year. The Agency was satisfied, notwithstanding
the fact that CN had only met 83 percent of Dreyfus Commodities’ demand for
cars, that CN had provided, in the circumstances, adequate and suitable accommodation
in respect of Dreyfus Commodities’ traffic. It is clear from the Agency’s
Decision 06-18 that it applied the Patchett principle of reasonableness
in determining whether CN had fulfilled its level of service obligation. More
particularly, on the basis that CN’s obligations were not absolute, it gave
consideration to those factors and circumstances which, in CN’s view, justified
its failure to meet Dreyfus Commodities’ total demand.
[75]
It goes without saying that I do not intend to
make any comments with regard to the merits of the Agency’s determination in
Decision 06-18. However, it is important to point out that in that case, the
Agency was dealing with the same crop year and the same rationing methodology
which are under consideration in these appeals. There can be no doubt that the
Agency’s approach in Decision 06-18 is manifestly different from the approach
that it took in the present matter.
[76]
In my view, the difference in approach can only be
attributed to the fact that in its preliminary decisions regarding Viterra and
Richardson, the Agency treated CN’s rationing methodology as a confidential
contract falling within the ambit of subsection 113(4). The Agency’s
explanation for a different approach is found at paragraphs 65 and 66 of
Decision 06-18 which I have reproduced herein at paragraph 67 of these reasons.
More particularly, the Agency justified its different approach on the basis
that Viterra and Richardson had only sought, through their complaints, an order
compelling CN to deliver to them their respective Percentage Shares. Hence, the
nature of the complaints filed by the respondents dictated the approach which
the Agency would take in determining whether or not CN had breached its service
obligation.
[77]
What the respondents sought from the Agency was,
in my respectful view, akin to an order enforcing CN’s rationing methodology.
With respect, such an order could not be made by the Agency pursuant to its
powers under subsection 116(1) since the Agency’s powers under that subsection
are limited to determining whether a railway has provided adequate and suitable
accommodation. Investigating and determining whether CN had met its targets
under the rationing methodology is not, in my respectful view, within the
powers conferred upon the Agency by subsection 116(1). Neither could the Agency
make such an order under subsection 116(2) as the rationing methodology did not
constitute a confidential contract.
[78]
There is no dispute between the parties that the
set of extraordinary circumstances surrounding the 2013-2014 crop year justified
the need for CN to come up with a rationing methodology. Neither of the
respondents disputed, nor could they in my opinion, CN’s right to devise a
rationing methodology for the 2013-2014 crop year. Although the Agency
considered the respondents’ complaints as level of service complaints, it did
not deal with them on that basis because of the way they were framed by the
respondents. Rather than conducting the investigation required of it under
paragraph 116(1)(a) of the CTA, the Agency gave itself the
mandate to determine whether the respondents’ entitlement under the rationing
methodology represented reasonable car requests. In other words, the Agency
assumed, without so saying, that CN’s rationing methodology and, more
particularly the Percentage Shares allocated to the respondents thereunder,
constituted the level of service obligation owed by CN to the respondents. That
was clearly an error on the part of the Agency.
[79]
Whether the number of cars actually provided by
CN to the respondents during the weeks at issue of the 2013-2014 crop year was
sufficient to satisfy CN’s level of service obligation is the question which
the Agency ought to have addressed. However, as I have already indicated, in
conducting that exercise, the Agency could not assume or take it for granted
that the Percentage Shares resulting from CN’s rationing methodology represented
the level of service obligation owed by CN to the respondents.
[80]
For example, if a railway company adopts a
rationing methodology that turns out to be more generous than its statutory
level of service obligation, shippers would obviously have no incentive to
challenge that methodology. Under that scenario, it would not, however, necessarily
follow that the railway company had breached its statutory obligation if it did
not meet the targets set out in its rationing methodology. This gives rise to
the question of whether the complaints made by the respondents were truly level
of service obligation complaints. I have serious doubts that they were, but
because of the conclusion which I have arrived at in regard to the Agency’s
determination that CN had breached its level of service obligation, I need not
determine that question.
[81]
I wish to add that in enacting its rationing
methodology, CN did not and could not substitute that methodology for the level
of service obligation which it owed to the respondents. The best that can be
said is that, in some circumstances, a rationing methodology may explain or
justify a failure to meet a request for service. However, a rationing
methodology, like the one adopted by CN in the present matter, is not a measure
of the service which must be provided by a railway company. I would further add
that I agree entirely with CN’s assertion, found at paragraphs 41 of its
memoranda of fact and law in Viterra and Richardson that it “was free to alter or withdraw the rationing methodology as
operationally appropriate at any time. Subsections 113 to 115 of the Act do not
impose any specific obligations on a railway company in this respect”.
[82]
Pursuant to sections 113 to 115 of the Act, a
railway company is not obliged to provide to shippers a specific percentage of
rail cars or a specific number of cars. Thus, CN was under no duty to deliver
to the respondents a fixed percentage of cars or a fixed number of cars per
week. Its obligation, pursuant to sections 113 to 115, was to provide to the
respondents “adequate and suitable” accommodation in regard to their traffic.
[83]
Before concluding, I wish to emphasize that in
their applications for redress to the Agency, the respondents did not assert
that CN had failed to meet its level of service obligation under sections 113
to 115. After stating that their allocation of rail cars since the fall of 2013
had “fallen short” of their requirements, the
respondents pointed out that their complaints did not pertain “to the overall inadequacy of CN’s service”, but
rather to the question of whether CN had breached its statutory obligation by
failing to provide to them the Percentage Shares of rail cars to which they
were entitled pursuant to CN’s rationing methodology. As I have already
indicated, the framing of the complaints by the respondents led the Agency
astray in that it failed to address the only question which it could determine
under the CTA, i.e. whether, in all of the circumstances, CN had
breached its duty to provide adequate and suitable accommodation in regard to
the respondents’ traffic.
[84]
It is also important to point out that the
respondents did not assert nor did they attempt to demonstrate that in failing
to provide to them their respective Percentage Shares, CN had failed to meet
its level of service obligation. Nor did the respondents assert that if CN had
delivered these Percentage Shares it would have met its level of service obligation
under the CTA.
[85]
One last remark needs to be made. Because of the
conclusion that I have reached, in regards to the Agency’s determination that
CN had breached its level of service obligation, we need not determine whether
the Agency’s Evaluation Approach is, in the words of CN, “a new and incorrect legal framework for determining level of
service complaints.” That issue will have to wait for another day.
[86]
It is therefore my opinion that in concluding
that CN had breached its level of service obligation by reason of its failure
to provide to the respondents the Percentage Shares allocated to them under
CN’s rationing methodology, the Agency made unreasonable errors of law which
justify intervention on our part. Because the Agency’s preliminary decisions
cannot stand, the Agency’s final decisions must also fall.
[87]
I would therefore allow the appeals with costs,
I would set aside both the Agency’s preliminary and final decisions, and, in
the circumstances, I would send the matter back to the Agency for
reconsideration of the respondents’ applications in light of these reasons.
Finally, I would grant the appellant the cost of its applications for leave to
appeal.
“M. Nadon”
“I agree.
Donald J. Rennie J.A.”
“I agree.
Mary J.L.
Gleason J.A.”
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