Supreme Court of Canada
North-West
Line Elevators Association et al. v. Canadian Pacific Railway and Canadian
National Railway et al., [1959] S.C.R. 239
Date:
1959-01-27
The North-West Line Elevators Association
and United Grain Growers, Limited Appellants;
and
Canadian Pacific Railway Company, Canadian National
Railways and The Canadian Car Demurrage Bureau Respondents.
1958: November
13; 1959: January 27.
Present: Taschereau, Rand, Locke, Cartwright, Fauteux,
Martland and Judson JJ.
ON APPEAL FROM THE BOARD OF TRANSPORT COMMISSIONERS FOR
CANADA.
Railways—Demurrage charges—Whether Board of Transport
Commismissioners has power to refuse to allow demurrage charges—Whether charges
contravene s. 328(6) of the Railway Act, R.S.C. 1952, c. 234.
The Board of Transport Commissioners having approved with
modifications a tariff of demurrage charges on bulk grain consigned for
unloading at public and semi-public terminal elevators at Fort William,
[Page 240]
Port Arthur, Churchill and Pacific Coast ports, the appellants obtained leave to appeal to this Court on
the following questions of law: (1) did the Board err in law in ruling that it
had no power to refuse to allow any demurrage to be charged in respect of cars
of grain? and (2) did the order of the Board contravene s. 328(6) of the Railway
Act?
Held: The appeal should be dismissed; the Board had no
power to refuse to allow any demurrage to be charged, and its order was not in
conflict with s. 328(6) of the Railway Act.
APPEAL from a judgment of the Board of Transport
Commissioners approving a tariff of demurrage
charges. Appeal dismissed.
H. Hansard, Q.C., for North-West Line
Elevators Association, appellant.
G. R. Hunter, Q.C., for
United Grain Growers, Limited, appellant.
H. A. V. Green, Q.C., and K. D. M. Spence,
Q.C., for Canadian Pacific Railway Company, respondent.
J. W. G. Macdougall, Q.C., for Canadian
National Railways, respondent.
The judgment of the Court was delivered by
Rand J.:—This
is an appeal on questions of law from a judgment of the Board of Transport
Commissioners by which the board approved with
modification a tariff of demurrage charges on bulk grain consigned for
unloading at public and semi-public terminal elevators at Fort William, Port
Arthur, Churchill and Pacific coast ports.
The questions are :
1. Did the Board err in law in ruling that it had no power
to refuse to allow any demurrage to be charged in respect of cars of grain?
2. Does the order of the Board contravene s. 328(6) of the
Railway Act?
The considerations presented to us by Mr. Hansard and Mr.
Hunter were in substance these: that the board was wrong in holding that where,
as here, because of the absence of elevator space, it was physically impossible
to unload the grain from the cars, it was without authority to disallow in toto the imposition of the demurrage charges; that it was
wrong in holding that it could not disallow a tariff without substituting
another for it; and finally that the charges violated s. 328(6) of the Railway
Act which
[Page 241]
continues the rates of
grain and flour covered by the provisions of what is known
as the Crow's Nest Pass Agreement of 1897.
The first two of these contentions are simply different
aspects of the same issue and will be dealt with together. The primary function
of the board is regulation. The Act assumes the continuing operations of
dominion railways as in substance they were in 1903 both at common law and
under existing statute law and vests in the board jurisdiction as an
administrative body as well as a court of record to make such orders and
declarations and to give such directions as it may deem proper to compelling
observance by the railways subject to its control of the laws and regulations
applicable to their construction, maintenance and operation. It is not a
managing board nor does it normally initiate action. Reasonableness in all the
circumstances in the public services is its guiding principle. Every such
service is entitled to compensation and no one has as yet suggested the
contrary. The different classes of rates and tolls with all their
sub-classifications have long been differentiated in terms of those services,
and they are indicated in the definition in s. 2(32) :
"toll," or "rate," when used with
reference to a railway, means any toll, rate, charge or allowance charged or
made either by the company, or upon or in respect of a railway owned or
operated by the company, or by any person on behalf or under authority or
consent of the company, in connection with the carriage and transportation of
passengers, or the carriage, shipment, transportation, care, handling or
delivery of goods, or for any service incidental to the business of a carrier;
and includes any toll, rate, charge or allowance so charged or made in
connection with rolling stock, or the use thereof, or any instrumentality or
facility of carriage, shipment or transportation, irrespective of ownership or
of any contract, expressed or implied, with respect to the use thereof; and
includes also any toll, rate, charge or allowance so charged or made for
furnishing passengers with beds or berths upon sleeping cars, or for the
collection, receipt, loading, unloading, stopping over, elevation, ventilation,
refrigerating, icing, heating, switching, ferriage, cartage, storage, care,
handling or delivery of, or in respect of, goods transported, or in transit, or
to be transported; and includes also any toll, rate, charge or allowance so
charged or made for the warehousing of goods, wharfage or demurrage, or the
like, or so charged or made in connection with any one or more of the
above-mentioned objects, separately or conjointly;
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Prior to c. 61 of the Statutes of Canada, 1908, demurrage
charges were not expressly mentioned in that definition which as s. 2(30),
R.S.C. 1906, c. 37, read:
(30) "toll" or "rate" means and includes
any toll, rate or charge made for the carriage of any traffic, or for the
collection, loading, unloading or delivery of goods, or for warehousing or
wharfage, or other services incidental to the business of a carrier;
But within the concluding words they were undoubtedly
embraced. That they had been imposed long before that year is unquestionable.
They were recognized as being in force by the board in its first order on car
service charges made on January 25, 1906. This order, cancelling existing
tariffs, prescribe the free time allowances for loading and unloading freight
and fixed the charges for delay. It is of interest that by Rule 2(c) only 24
hours' free time was allowed for loading grain in those portions of Canada to
which the Manitoba Grain Act, (1900) applied, that is, the province of
Ontario lying west of and including the then district of Port Arthur, the
province of Manitoba and the North-West Territories. It is unnecessary to trace
their original use on railways in North America, but the principle of exaction
for delay in loading and unloading in water transportation has been known and
applied for centuries: Carver, 10th ed., Carriage of Goods
by Sea, p. 901. Its appropriateness to railway carriage can be assumed to have
been recognized and acted upon both in England and in North America certainly
from the middle of the nineteenth century.
Delay in loading or unloading cars of freight violates the
implied understanding when equipment is placed at the disposal of shipper or
consignee that no more than reasonable time shall be taken for either purpose.
The profitable and efficient use of equipment is an important item of the costs
reflected in the freight rates charged and is an essential in good railway
management. That a railway is to supply expensive equipment in order to
furnish, gratis, a storage means for shippers and consignees, reveals, on its
mere statement, its own absurdity.
Under the Act the board has no jurisdiction in effect to
compel a railway to give a service or suffer an economic detriment of such a
nature without appropriate compensation; and although that tribunal may cancel
tariffs of rates
[Page 243]
and tolls, it does so only on the ground that they are
unreasonable, either too high or too low, or are unjustly discriminatory; and
if it does not substitute rates of its own the carrier is entitled to submit
other rates and have them passed upon until the unreasonableness or unjust
discrimination is found to be eliminated.
The Chief Commissioner was therefore right in assuming that
the board had no such power and the suggestion that the board did not consider
the charges shown by the tariff in question to be just and reasonable is
unwarranted.
It is urged that it was wrong to hold the consignee liable
who cannot, because of lack of physical capacity in the elevators, take
delivery. The demurrage charge attaches against the person responsible for the
delay; if the consignee is in the position described, all he need do is to
reject the shipment or forbid the shipper in advance to consign to him. If the
shipper is to blame, the question between him and the consignee is not one in
which the railway is particularly interested. The mere fact that for years the
railways have not collected demurrage on the grain traffic is irrelevant; so
long as there was no unjust discrimination and no suggestion that the omission
produced an unreasonable factor in the total freight rate body, the action by
the railways was unassailable. But that detracted not a whit from their right,
in appropriate circumstances, to impose the charges and enforce their
collection.
Then it is contended that the allowance is in conflict with
s. 328(6). The Crow's Nest Pass Act, c. 5, Statutes of Canada, 1897,
provides a subsidy to the Canadian Pacific Railway on certain conditions. One
was that an agreement between the Dominion government and the company should be
entered into containing, among others, two covenants: first, "that a
reduction shall be made in the general rates and tolls of the Company as now charged"
upon certain classes of merchandise carried westbound from and including Fort
William to all points west on the company's main line or to those points from
any railway in Canada owned or operated on the account of the company and
whether shipped by all rail or by lake and rail. These classes included fruits,
reduced 33 1/3 per cent., coal oil, 20 per cent., cordage and binder twine,
agricultural implements, iron of all kinds,
[Page 244]
wire, window glass, paper for building or roofing, felt for
roofing, paints, oils, livestock, wooden ware and household furniture, the
reduction on which was 10 per cent. The second covenant was that on eastbound
grain and flour,
… there shall be a reduction in the Company's present rates
and tolls on grain and flour from all points on its main line, branches, or
connections, west of Fort William to Fort William and Port Arthur and all
points east, of three cents per one hundred pounds, to take effect in the
following manner:—…; and that no higher rates than such reduced rates or tolls
shall be charged after the dates mentioned on such merchandise from the points
aforesaid;
The purpose behind these two provisions is obvious; it was
to extend to the army of settlers then beginning to people the west under a
policy of broad dimensions a measure of assistance in reducing the
transportation costs of commodities in the nature of necessities to the
settlers and of what was expected to be their primary production.
An examination of this language shows unequivocally that
what were in mind were the rates payable for transportation strictly,
"general rates and tolls", rates which were expressed in terms of
cents "per 100 pounds". These were the normal charges for the
carriage of commodities between points. In the ordinary and uncomplicated case
no other charges arise. They have nothing to do with incidental charges to meet
circumstances not normal for which special terms are provided; they refer to
charges payable when the basic service is furnished along with the correlative
observance of the reasonable requirements laid upon the shippers and
consignees. They do not include demurrage charges; these are not related to the
weight of the commodity; they are concerned with the unreasonable detention of
railway equipment.
The language of s. 328(6) that "rates on grain and
flour shall be governed by the provisions of the Crow's Nest Pass Act"
uses the words in the same sense, the anomalies resulting from any other
interpretation of which are too obvious to be considered. The present definition
of "toll" or "rate" in the Railway Act appears to be
comprehensive enough to extend to charges for every service or accommodation
that can be furnished in respect of freight and passenger carriage. But in
particular applications the scope of either word will depend upon the sense
indicated by the
[Page 245]
context. This is the case whenever we are dealing with broad
and general definitions enumerative of a number of differing applications of
the same word or words.
I would, therefore, answer the questions as follows:
Question No. 1 :
Construing the question to be
limited to the power of banning the imposition by the railways of any demurrage
whatever, regardless of reasonableness or any other considerations, my answer
is, No;
Question No. 2:
No.
I would, therefore, dismiss the appeal with costs.
Appeal dismissed with costs.
Solicitors for North-West Line Elevators
Association, appellant: Common, Howard, Cate, Ogilvy, Bishop,
Cope, Porteous & Hansard, Montreal.
Solicitors for United Grain Growers, Limited, appellant:
Pitblado, Hoskin, Bennest, Drummond-Hay, Pitblado, McEwen,
Alsaker, Hunter & Sweatman, Winnipeg.
Solicitor for Canadian Pacific Railway Company and
The Canadian Car Demurrage Bureau, respondent: K. D. M. Spence, Montreal.
Solicitor for Canadian National Railways and The
Canadian Car Demurrage Bureau, respondents: J.W.G. Macdougall, Moncton.
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