Canadian Pacific Ltd. v. Alberta, [1976] 1 SCR 815

Supreme Court of Canada

Canadian Pacific Ltd. v. Alberta, [1976] 1 S.C.R. 815

Date: 1975-05-20

Canadian Pacific Limited Appellant;

and

The Governments of the Provinces of Alberta, Saskatchewan, Manitoba and Ontario, and the Atlantic Provinces Transportation Commission Respondents;

and

The Government of the Province of British Columbia, the Attorney General of Canada, and the Canadian Transport Commission Intervenants.

Canadian National Railway Company Appellant;

and

The Governments of the Provinces of Alberta, Saskatchewan, Manitoba and Ontario, and the Atlantic Provinces Transportation Commission Respondents;

and

The Government of the Province of British Columbia, the Attorney General of Canada, and the Canadian Transport Commission Intervenants.

1975: April 24, 25; 1975: May 20.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Railways—Canadian Transport Commission—Proposed toll increases—Power of Commission to extend period of notice after effective date—Railway Act, R.S.C. 1970, c. R-2, s. 275(2)(4).

Statutes—Interpretation—Requirement of filing and publication of proposed toll increases for 30 days before becoming effective—Power of Canadian Transport Commission to reduce proposed toll increases and postpone effective date—Power of Canadian Transport Commission to extend period of notice after effective date—Order declared invalid by Court, ultra vires ab

[Page 816]

initio—Railway Act, R.S.C. 1970, c. R-2, s. 275(2) (4)—National Transportation Act, R.S.C. 1970, c. N-17, s. 64(5).

The appellant railway companies filed with the Canadian Transport Commission and published notice of tariff increases, the effective date of which was fixed as January 1, 1975, all in accordance with regulations, orders and directions made by the C.T.C. pursuant to s. 275 of the Railway Act, R.S.C. 1970, c. R-2. Thereafter on December 24, 1974, several of the respondents applied to the Railway Transport Committee of the C.T.C. for an order to suspend or postpone the tolls provided in the tariff increases and to prevent the companies from charging the increased rates. The other respondents intervened in support of the application to suspend the new rates before the Committee which, on December 31, 1974, made an order granting part of the relief sought by the respondents, postponing 50 per cent of the increases until March 1, 1975. The companies appealed to the Federal Court of Appeal contending that the action of the Committee was ultra vires. It was held that the order should be set aside, and this judgment was the subject of the cross-appeals to the Supreme Court, and further that the C.T.C. had power under s. 275(2) to enlarge the minimum thirty day period mentioned therein and that on its order being set aside the C.T.C. could and should consider whether an order as contemplated by s. 275(2) should be made, and this latter part of the judgment, on which the Committee acted, was the subject of the appeals to the Supreme Court.

Held: The appeals should be allowed and the cross-appeals should be dismissed.

On the cross-appeal, while respondents contended that the order postponing the tariff increases to the extent of 50 per cent was made in exercise of the powers given to the C.T.C. by s. 275(2), that section could not be read as empowering the C.T.C. to make the order that it purported to make. The repeal of s. 382 of the former act (the Railway Act, R.S.C. 1952, c. 234) and the adoption of the wording of s. 275(4) of the Railway Act were effected with a view to achieving the purpose stated in s. 3(a) of the National Transportation Act, that regulation of all modes of transport would not

[Page 817]

restrict the ability of any mode of transport to compete freely with any other modes of transport. The C.T.C. did not therefore have any general power to do what it purported to do.

The appeal was also concerned with s. 275(2) and (4), however, even assuming that the C.T.C. had power to extend the thirty-day period required by s. 275(2) and even assuming that such extension could be required after the tariff had been filed, the extension of the period of notice would have to have been made before the effective date, because, otherwise, the tariff would have come into effect upon that date. What the C.T.C. attempted to do was to postpone the effective date i.e. to do indirectly what it had no power to do directly.

The requirement in s. 64(5) of the National Transportation Act, R.S.C. 1970, c. N-17, for the certifying by the Federal Court of Appeal of its opinion to the C.T.C. and for the Commission to make an order in accordance with such opinion does not mean that an order which the Court has declared to be invalid has the same effect as a valid order until it is set aside. Subsection (5) merely provides a procedure for implementing the opinion of the Court in respect of an appeal. To construe otherwise would run counter to the legal doctrine of ultra vires.

Hoffmann-La Roche v. Secretary of State for Trade and Industry, [1974] 2 All E.R. 1128, referred to.

APPEALS and CROSS-APPEALS from a judgment of the Federal Court of Appeal[1] allowing an appeal from the Railway Transport Committee of the Canadian Transport Commission granting an application postponing the effective date of certain proposed freight tariffs. Appeals allowed, cross-appeals dismissed.

C.R. O. Munro, Q.C., and Gordon Miller, Q.C., for the appellant, Canadian Pacific Limited.

John Schiller, for the appellant, Canadian National Railway, Company.

Gordon Blair, Q.C., François Lemieux, and Martin Kay, for the Attorneys General of Alberta, Saskatchewan and Manitoba, respondents.

[Page 818]

D. Burtnick, for the Attorney General of Ontario, respondent.

J.M. Davison, and G.T. Hayes, for the Atlantic Provinces Transport Commission, respondent.

G.W. Ainslie, Q.C., and André Garneau, for the Attorney General of Canada, intervenant.

W.G. Burke-Robertson, Q.C., for the Attorney General of British Columbia, intervenant.

The judgment of the Court was delivered by

MARTLAND J.—On November 22, 1974, the appellants, hereinafter referred to as “the railway companies”, filed and published C.F.A. Tariff No. 1005, which involved substantial tariff increases. The effective date was fixed as January 1, 1975. It is admitted that filing, publication and notice of this tariff had been effected in accordance with regulations, orders or directions made by the Canadian Transport Commission, hereinafter referred to as “the Commission”, pursuant to s. 275 of the Railway Act, R.S.C. 1970, c. R-2, which provides as follows:

275. (1) Every freight tariff and every amendment of a freight tariff shall be filed and published, and notice of the issue thereof and of cancellation of any such tariff or any portion thereof shall be given in accordance with regulations, orders or directions made by the Commission.

(2) Unless otherwise ordered by the Commission, when any freight tariff advances any toll previously authorized to be charged under this Act, the company shall in like manner file and publish such tariff at least thirty days before its effective date.

(3) A freight tariff that reduces any toll previously authorized to be charged under this Act may be acted upon and put into operation immediately on or after the issue of the tariff and before it is filed with the Commission.

(4) Where a freight tariff is filed and notice of issue is given in accordance with this Act and the regulations, orders and directions of the Commission, the tolls therein shall, unless and until they are disallowed by the Commission, be conclusively deemed to be the lawful tolls and shall take effect on the date stated in the tariff as the date on which it is to take effect, and the tariff supersedes any preceding tariff, or any portion thereof,

[Page 819]

in so far as it reduces or advances the tolls therein; and the company shall thereafter, until such tariff expires, or is disallowed by the Commission, or is superseded by a new tariff, charge the tolls as specified therein.

On December 24, 1974, the Governments of the Provinces of Alberta, Saskatchewan and Manitoba, hereinafter referred to as “the respondents”, applied to the Railway Transport Committee of the Commission, hereinafter referred to as “the Committee”, for an order to suspend or postpone the tolls provided in Tariff No. 1005 and to enjoin the railway companies from charging the rates specified in that tariff.

Hearings were held by the Committee on December 30 and 31, 1974. Interventions in support of the application were filed by the Government of the Province of Ontario and by the Atlantic Provinces Transportation Commission.

On December 31, 1974, the Committee made an order granting part of the relief sought by the respondents. Paragraph 1 of the order provided:

1. CFA Tariff No. 1005 and all other relevant tariffs to become effective January 1st, 1975 are to go into effect as aforesaid as to 50 per cent each of the increases in tolls contained therein and the effective date thereof as to the remaining 50 per cent is postponed until March 1st, 1975.

From this order the railway companies, with leave, appealed to the Federal Court of Appeal, hereinafter referred to as “the Court”, contending that the Commission had no power to postpone the operation of a freight tariff duly filed and published under s. 275 of the Railway Act. On the hearing before the Court the Government of the Province of British Columbia and the Attorney General of Canada were intervenants.

The Court unanimously decided that the appeals should be allowed. In the reasons it is stated that s. 275(2), on which the respondents relied as authority to support the order, could not be read “as empowering the Commission to make an order postponing the effective date of the whole or part

[Page 820]

of a tariff which has been regularly filed and published or to set a new date for the coming into effect of the whole or part of such a tariff”. It was held that the order should be set aside. From this judgment the respondents have cross-appealed to this Court.

Three of the judges of the Court, constituting the majority of the Court, went on to hold that the Commission had power, under s. 275(2), to enlarge the minimum thirty-day period mentioned therein, and stated that, upon the order of the Commission being set aside, the Commission could and should consider whether, on the application before it, an order of the kind contemplated by s. 275(2) ought to be made.

Two of the judges of the Court dissented on this issue.

The judgment of the Court was made on January 25, 1975. On February 5, 1975, the Committee made an order setting aside its order of December 31, 1974. The order then went on to provide as follows:

2. The period of notice of filing and publication of Tariff CFA 1005, and all other relevant tariffs, shall be and the same is hereby enlarged from November 22, 1974, being the date of filing, to February 28, 1975, a total of 98 days in all.

It is from the latter part of the judgment of the Court that the railway companies, with leave, have appealed to this Court.

I will deal first with the respondents’ cross-appeal. On this issue I am in agreement with the unanimous decision of the Court. The respondents contended that the order of the Committee, postponing until March 1, 1975, the coming into effect of the tariff increases as to 50 per cent thereof, was made in the exercise of the powers given to it by s. 275(2) of the Railway Act. Dealing with this submission Thurlow J.A. said, for the Court:

I do not think it can be read as empowering the Commission to make an order postponing the effective date of the whole or part of a tariff which has been regularly

[Page 821]

filed and published or to set a new date for the coming into effect of the whole or part of such a tariff.

The Court also said, after considering the relevant provisions of the Railway Act, that the Commission did not have any general power to suspend or postpone the coming into effect of tariffs.

Prior to the enactment of the National Transportation Act, Statutes of Canada 1966-7, c. 69, the Railway Act, R.S.C. 1952, c. 234, did give such powers to the Commission’s predecessor, the Board of Transport Commissioners. Section 328 of that Act provided that:

328. (1) The Board may disallow any tariff or any portion thereof that it considers to be unjust or unreasonable, or contrary to any of the provisions of this Act, and may require the company, within a prescribed time, to substitute a tariff satisfactory to the Board in lieu thereof, or may prescribe other tolls in lieu of the tolls so disallowed.

(2) The Board may designate the date at which any tariff shall come into force, and either on application or of its own motion may, pending investigation or for any reason, postpone the effective date of, or either before or after it comes into effect, suspend any tariff or any portion thereof.

These provisions were repealed by the National Transportation Act and were not re-enacted.

Subsection (4) of s. 275 of the present Railway Act provides that, where a freight tariff is filed and notice of issue is given in accordance with the Act and the regulations, orders and directions of the Commission, the tolls therein shall take effect on the date stated in the tariff as the date on which it is to take effect, and that the tolls shall be conclusively deemed to be the lawful tolls unless and until they are disallowed by the Commission.

Section 333 of the earlier Act, in subs. (3), contained provisions practically identical with s. 275(2) of the present Act, but subs. (5), which is the predecessor of s. 275(4), stated:

[Page 822]

(5) Where a freight tariff is filed and notice of issue is given in accordance with this Act and regulations, orders and directions of the Board, the tolls therein shall, unless and until they are disallowed, suspended, or postponed by the Board, be conclusively deemed to be the lawful tolls and shall take effect on the date stated in the tariff on which it is intended to take effect, and it shall supersede any preceding tariff, or any portion thereof, insofar as it reduces or advances the tolls therein, and the company shall thereafter, until such tariff expires or is disallowed or suspended by the Board or is superseded by a new tariff, charge the tolls as specified therein.

When the present Act was passed, the references to suspension or postponement were omitted from s. 275(4).

In my opinion, the repeal of s. 328 of the old Act and the adoption of the wording of s. 275(4) of the present Act were effected with a view to achieving the purpose stated in s. 3(a) of the National Transportation Act, i.e.:

(a) regulation of all modes of transport will not be of such a nature as to restrict the ability of any mode of transport to compete freely with any other modes of transport;

My conclusion is that the Commission had no power to do what it purported to do by its order of December 31, 1974, namely, to postpone, as to 50 per cent of the increase in tolls, the effective date of the tariff. I would dismiss the cross-appeal.

The appeal, like the cross-appeal, is concerned with the meaning and effect of s. 275(2) and (4). The first submission of the railway companies is that s. 275(2) means that the railway companies have to give at least thirty days’ notice of any advance in tolls unless the Commission exempts them from that requirement. The respondents and the intervenants contend that the words “unless otherwise ordered by the Commission” enable the Commission to increase as well as to decrease the required period of notice. In the view which I take of the facts of this case it is not necessary to determine this issue.

[Page 823]

The railway companies, on November 22, 1974, duly filed and published C.F.A. Tariff No. 1005, effective on January 1, 1975, a date more than thirty days after the filing. Section 275(4) then became operative and provides that the tolls should take effect on the date stated in the tariff. Even assuming that the Commission had power to extend the thirty-day period required by s. 275(2), and even assuming that such extension of time could be required after the tariff had been filed (a point on which I do not need to express an opinion), the extension of the period of notice would have to be made before the effective date, because, otherwise, the tariff would have come into effect upon that date by virtue of s. 275(4).

The Commission did not purport to extend the period of notice prior to January 1, 1975. What it attempted to do was to postpone the effective date, which it had no power to do. An order of the Commission, made after the effective date of the tariff, to extend the notice required to be given by the railway companies when fixing the effective date, cannot be a genuine extension of the period of notice, but would be an attempt by the Commission to do indirectly what it had no power to do directly: i.e., to postpone the effective date of the tariff.

It was submitted by the respondents that the Commission’s order of December 31, 1974, continued to have effect until the Commission itself set aside the order on February 5, 1975, at which same time it made the order which the majority of the Court held that it had power to make. It was contended that, on February 5, the one order was replaced by the other, that there was no hiatus, and, consequently, C.F.A. Tariff No. 1005 never took effect.

This proposition is based upon the provisions of s. 64(5) of the National Transportation Act. Subsection (2) of that section provides for an appeal from the Commission to the Federal Court of Appeal, with leave of that Court, on a question of law or of jurisdiction. Subsection (5) provides:

[Page 824]

(5) On the hearing of any appeal, the Court may draw all such inferences as are not inconsistent with the facts expressly found by the Commission, and are necessary for determining the question of jurisdiction, or law, as the case may be, and shall certify its opinion to the Commission, and the Commission shall make an order in accordance with such opinion.

Because this subsection provides for the certifying of its opinion by the Court to the Commission, and the making of an order by the Commission in accordance with the opinion, it is argued that, in the present case, the order of December 31, 1974, remained in full force and effect until it was set aside by the later order of the Commission. I do not agree with this contention. The portion of the subsection with which we are here concerned does nothing more than to provide a procedure for the implementation of the opinion rendered by the Court in respect of an appeal. In the present case that opinion was that the order of the Commission under appeal was invalid and, for that reason, ought to be set aside. The Commission set it aside. In so doing it set aside an order which the Court had declared to be invalid. There is nothing in the subsection to support the proposition that the invalid order had the same effect as a valid order in the interval of time between its being made and its being set aside. To construe this provision in that way would run counter to the legal doctrine of ultra vires.

Counsel for the Attorney General of Canada, in response to the submission of the railway companies that the order of December 31, 1974, was invalid, and could have no legal effect whatever, relied upon a statement by Lord Diplock in Hoffmann-La Roche v. Secretary of State for Trade and Industry[2], at p. 1153:

Under our legal system, however, the courts as the judicial arm of government do not act on their own initiative. Their jurisdiction to determine that a statutory instrument is ultra vires does not arise until its validity is challenged in proceedings inter partes, either brought by one party to enforce the law declared by the instrument against another party, or brought by a party whose interests are affected by the law so declared sufficiently directly to give him locus standi to initiate proceedings to challenge the validity of the instrument.

[Page 825]

Unless there is such challenge and, if there is, until it has been upheld by a judgment of the court, the validity of the statutory instrument and the legality of acts done pursuant to the law declared by it, are presumed.

It should be noted, however, that this passage is, in the same paragraph, immediately followed by the following statement:

It would, however, be inconsistent with the doctrine of ultra vires as it has been developed in English law as a means of controlling abuse of power by the executive arm of government if the judgment of a court in proceedings properly constituted that a statutory instrument was ultra vires were to have any lesser consequence in law than to render the instrument incapable of ever having had any legal effect on the rights or duties of the parties to the proceedings (cf Ridge v. Baldwin, [1963] 2 All E.R. 66).

In the present case the Court, in proceedings properly constituted, gave its opinion that the Commission order of December 31, 1974, was invalid.

I would allow the appeals. The judgments of the Federal Court of Appeal should be varied by deleting therefrom all that portion thereof subsequent to the words “is invalid and ought to be set aside”. The railway companies, as against the Governments of the Provinces of Alberta, Saskatchewan and Manitoba, should have the costs of the appeals and of the cross-appeals and should have the costs of their appeals to the Federal Court of Appeal. There should be no costs payable by or to the intervenants.

Appeals allowed, cross-appeals dismissed, with costs.

Solicitor for Canadian Pacific Limited: G.P. Miller, Montreal.

Solicitor for Canadian National Railway Company: H.J.G. Pye, Montreal.

Solicitor for the Governments of Saskatchewan and Manitoba: Gordon Blair, Ottawa.

Solicitor for the Government of Alberta: H.M. Kay, Calgary.

Solicitor for the Government of Ontario: D.W. Burtnick, Downsview.

[Page 826]

Solicitor for the Atlantic Provinces Transportation Commission: L.J. Hayes, Halifax.

Solicitor for the Government of British Columbia: W.G. Burke-Robertson, Ottawa.

Solicitor for the Canadian Transport Commission: Jules Fortier, Ottawa.

Solicitor for the Attorney General of Canada: D.S. Thorson, Ottawa.