Date: 20110928
Docket: A-25-11
Citation: 2011 FCA 269
CORAM: NOËL
J.A.
PELLETIER J.A.
DAWSON
J.A.
BETWEEN:
BNSF RAILWAY COMPANY,
CANADIAN NATIONAL
RAILWAY COMPANY and
CANADIAN PACIFIC RAILWAY
COMPANY
Appellants
and
CANADIAN TRANSPORTATION AGENCY,
QUAYSIDE COMMUNITY BOARD,
BRIAN ALLEN and
MATTHEW LAIRD
Respondents
REASONS FOR ORDER
DAWSON J.A.
[1]
The
issue to be determined on this appeal is whether the Canadian Transportation
Agency (Agency) erred in law in determining that it could adjudicate a
complaint concerning noise and vibration arising from operations at the New
Westminster Rail Yard, notwithstanding that the parties had previously entered
into a settlement agreement with respect to the same complaint. The decision of
the Agency is cited as LET-R-152-2010.
[2]
For
the reasons that follow, I would allow the appeal.
Factual Background
[3]
On
July 4, 2008, the Quayside Community Board (Community Board) filed a complaint
with the Agency. The Community Board advised that it represented 2080 strata
units which were directly impacted by the noise and vibration caused by rail
company operations in the New Westminster Rail Yard. The complaint was made
against four rail companies: the BNSF Railway Company, the Canadian National
Railway Company, the Canadian Pacific Railway Company and the Southern Railway
of British Columbia (together the Railway Companies). The Community Board
sought, among other things, an order restricting use of the rail yard to between
the hours of 7 a.m. and 10 p.m.
[4]
The
Canada Transportation Act, S.C. 1996, c. 10 (Act) and the Agency’s
Guidelines for the Resolution of Complaints Concerning Railway Noise and
Vibration (Guidelines) provide that before the Agency can investigate a complaint
regarding railway noise and vibration, it must be satisfied that the
collaborative measures set out in the Guidelines have been exhausted. In the
present case, with the agreement of the parties, the complaint was referred to
mediation. The Guidelines and the statutory regime established by the Act are
discussed below.
[5]
The
mediation proceeded under section 36.1 of the Act with the assistance of two
Agency-appointed mediators. At the conclusion of the mediation session the
parties entered into a confidential settlement agreement dated December 10,
2008. The settlement agreement was signed by two representatives of the
Community Board and by representatives of each rail company and the City of New
Westminster.
The parties, together with the mediators, also signed a Disposition Statement
in which they confirmed that they had “fully resolved the aforementioned
dispute to the satisfaction of all parties.” In this document the parties also
consented to the closing of the Agency’s file concerning the Community Board’s
complaint.
[6]
On
April 13, 2010, the Community Board filed a second complaint with the Agency
against the Railway Companies. After expressing concern that the Railway
Companies had not communicated with the Community Board as they were obliged to
do under the settlement agreement, the second complaint advised that
“[u]nfortunately, this mediated solution has failed.” The Community Board
requested “the specific relief we originally requested in the attached copy of
the original complaint.” No allegation was made that there had been any
material change in facts or circumstances. At this time, the Community Board
did not allege any irreparable breach of the settlement agreement.
[7]
The
Agency provided copies of the second complaint to the Railway Companies and
gave them 30 days to respond to its complaint. The Agency characterized the
complaint to be one that “the mediation process in this complaint has failed.”
[8]
The
Railway Companies responded that there was a valid and binding settlement
agreement in place so that the matter could not be adjudicated by the Agency.
Any disagreement in respect of the implementation of the settlement agreement
could only be referred back to a reconvened mediation session. See: responses
of the Railway Companies at pages 55 to 57, 59, 63-64 and 65-68 of the Appeal
Book.
[9]
The
Community Board replied to the submissions of the Railway Companies in an
e-mail dated June 11, 2010. The Community Board took the position that the
railways had “been unable to or intentionally failed to comply” with the
settlement agreement so that it had been irreparably breached. The Community
Board further contended that the settlement agreement “was never intended as an
enduring document which would prevent the filing of a subsequent complaint”
with the Agency.
[10]
In
response to these communications, the Agency sought and received further
submissions concerning whether it could adjudicate the second complaint.
[11]
The
BNSF Railway Company wrote in its submission:
In summary, it is the position
of BNSF that the Agency does not have jurisdiction to deal with this
noise and vibration complaint, in the circumstances that have occurred.
This complaint was conclusively resolved by the parties on 10 December 2008. In
the result, the complainants are barred, or prevented, from seeking to have the
complaint reactivated and heard by the Agency. Moreover, the Agency is functus
officio, or without jurisdiction, to deal with this complaint.
[12]
This
position was adopted by both the Canadian National Railway Company and the Canadian
Pacific Railway Company. After receiving the submissions of the Community Board
and the reply of the Railway Companies, the Agency rendered the decision now
under appeal.
Applicable Legislation
[13]
The
parties agree that the initial complaint made by the Community Board fell
within section 95.1 of the Act so that the Agency had jurisdiction
to hear and determine the first complaint. Section 95.1 states:
|
95.1 When constructing or operating a
railway, a railway company shall cause only such noise and vibration as is
reasonable, taking into account
(a) its obligations under
sections 113 and 114, if applicable;
(b) its operational
requirements; and
(c) the area where the
construction or operation takes place.
|
95.1 La compagnie de chemin de fer qui
construit ou exploite un chemin de fer doit limiter les vibrations et le
bruit produits à un niveau raisonnable, compte tenu des éléments suivants :
a) les obligations qui lui incombent au
titre des articles 113 et 114, le cas échéant;
b) ses besoins en matière
d’exploitation;
c) le lieu de construction ou
d’exploitation du chemin de fer.
|
[14]
Section
95.2 of the Act authorizes the Agency to create guidelines about how it will
decide noise and vibration complaints and about the collaborative resolution of
such complaints:
|
95.2 (1) The Agency shall issue, and publish
in any manner that it considers appropriate, guidelines with respect to
(a) the elements that the Agency
will use to determine whether a railway company is complying with
section 95.1; and
(b) the collaborative resolution
of noise and vibration complaints relating to the construction or operation
of railways.
(2) The Agency must consult with
interested parties, including municipal governments, before issuing any
guidelines.
(3) The guidelines are not statutory
instruments within the meaning of the Statutory Instruments Act.
|
95.2 (1) L’Office établit — et publie de la
manière qu’il estime indiquée — des lignes directrices:
a) sur les éléments dont il tient compte
pour décider si une compagnie de chemin de fer se conforme à
l’article 95.1;
b) sur des mesures de coopération en
matière de résolution des conflits concernant le bruit ou les vibrations liés
à la construction ou à l’exploitation de chemins de fer.
(2) Avant d’établir des lignes
directrices, l’Office consulte les intéressés, notamment les administrations
municipales.
(3) Les lignes directrices ne sont pas
des textes réglementaires au sens de la Loi sur les textes réglementaires.
|
[15]
Section
95.3 of the Act sets out the process the Agency must follow when it receives a
noise and vibration complaint.
|
95.3(1) On receipt of a complaint made
by any person that a railway company is not complying with section 95.1, the
Agency may order the railway company to undertake any changes in its railway
construction or operation that the Agency considers reasonable to ensure
compliance with that section.
(2) If the Agency has published
guidelines under paragraph 95.2(1)(b), it must first satisfy
itself that the collaborative measures set out in the guidelines have been
exhausted in respect of the noise or vibration complained of before it
conducts any investigation or hearing in respect of the complaint.
[emphasis added]
|
95.3(1) Sur réception d’une plainte
selon laquelle une compagnie de chemin de fer ne se conforme pas à l’article
95.1, l’Office peut ordonner à celle-ci de prendre les mesures qu’il estime
raisonnables pour assurer qu’elle se conforme à cet article.
(2) S’il a publié des lignes
directrices au titre de l’alinéa 95.2(1)b), l’Office ne peut
procéder à l’examen de la plainte que s’il est convaincu que toutes
les mesures de coopération prévues par celles-ci ont été appliquées. [Non
souligné dans l’original.]
|
[16]
As
referenced above, the Agency exercised the authority given in subsection
95.2(1) to enact guidelines concerning noise and vibration complaints. The
following excerpt from the Guidelines re-states the legislated requirement that
before the Agency can proceed with an investigation the parties must exhaust
the collaborative measures developed to deal with noise and vibration
complaints:
Collaborative Resolution of Noise and
Vibration Complaints
The CTA specifies that before the Agency can investigate a
complaint regarding railway noise or vibrations, it must be satisfied that the
collaborative measures set out in these guidelines have been exhausted.
Collaboration allows both complainants and railway companies
to have a say in resolving an issue. A solution in which both parties have had
input is more likely to constitute a long-term solution and is one that can
often be implemented more effectively and efficiently than a decision rendered
through an adjudicative process.
[17]
Section
36.1 of the Act deals with mediation. If the parties request mediation of a
dispute within the Agency’s jurisdiction, the Agency “shall” refer the dispute
for mediation (subsection 36.1(1)). Mediation is to be confidential unless
the parties otherwise agree (subsection 36.1(4).
[18]
Mediation
effectively suspends adjudication of the formal application before the Agency
until the collaborative measures are complete:
|
36.1(6) The mediation has the effect of
(a) staying for the period of
the mediation any proceedings before the Agency in so far as they relate to a
matter that is the subject of the mediation; and
(b) extending the time within
which the Agency may make a decision or determination under this Act with
regard to those proceedings by the period of the mediation.
|
36.1(6) La médiation a pour effet :
a) de suspendre, jusqu’à ce qu’elle
prenne fin, les procédures dans toute affaire dont l’Office est saisi, dans
la mesure où elles touchent les questions faisant l’objet de la médiation;
b) de prolonger, d’une période
équivalant à sa durée, le délai dont dispose l’Office pour rendre en vertu de
la présente loi une décision à l’égard de ces procédures.
|
[19]
A
settlement agreement reached through mediation may be filed with the Agency,
with the result that the agreement is enforceable “as if it were an order of
the Agency” (subsection 36.1(7)). An order of the Agency may be made an
order of the Federal Court or any superior court and “is enforceable in the
same manner as such an order” (subsection 33(1)).
Decision of the Agency
[20]
The
Agency began its analysis by finding that the Community Board was a party to
both the first and second complaints and that the “contents of the two
complaints are virtually identical.” The Agency then framed the issue before it
in the following terms:
It is clear to the Agency that
the two complaints are in fact, the same complaint involving the same parties,
namely, the railway companies and QCB. Therefore the Agency finds that there is
only one complaint before the Agency. The Agency must determine if it has
jurisdiction to adjudicate this complaint.
The Agency did not treat the second
complaint as a complaint that there had been a breach of the settlement
agreement.
[21]
The
Agency went on to make the following findings:
- The mediation
process was complementary to, and not a replacement for, the adjudicative
process.
- Nothing in the Act
suggested that the conclusion of a settlement agreement after mediation
was intended to constitute an order of the Agency. Reliance was placed
upon subsection 36.1(7) of the Act, which provides that filing an
agreement reached as a result of mediation with the Agency makes the
agreement “enforceable as if it were an order of the Agency.”
- Because a filed
mediation agreement is not an order of the Agency, neither the principles
of issue estoppel or functus officio applied.
- The Disposition
Statement is not akin to a consent judgment or order because it was not
signed by a member of the Agency and did not state that it was intended to
constitute an order of the Agency.
- In the absence of a
formal order or judgment of the Agency on consent or otherwise, “there is
no basis upon which to assert that [the Agency] is barred from hearing
this complaint on the basis of issue estoppels, or that the Agency
is functus officio.”
[22]
The
Agency concluded by stating it was satisfied the collaborative measures set out
in the Guidelines had been exhausted so that the formal adjudicative process
could proceed.
Standard of Review
[23]
While
the Agency framed the issue in terms of whether it had jurisdiction to
adjudicate the complaint, properly understood the issue is not a true
jurisdictional question. The parties agreed that the substance of the first
complaint fell within the ambit of section 95.1 of the Act. The question
before the Agency was whether the settlement agreement had the effect of
precluding the Community Board from relitigating a complaint which it had
previously compromised. This required the Agency to consider the legislative
scheme and the terms of the settlement agreement.
[24]
The
Railway Companies argue that the standard of review to be applied is that of correctness.
In their view, the issue before the Agency was a question of general law that
was both of central importance to the legal system as a whole and outside of
the Agency’s specialized area of expertise. The Agency, relying upon the
decision of the Supreme Court of Canada in Council of Canadians with
Disabilities v. VIA Rail Canada Inc., 2007 SCC 15, [2007]
1 S.C.R. 650, responded that the applicable standard of review is
reasonableness.
[25]
In
my view, it is not necessary to determine the applicable standard of review. As
explained below, even on application of the more deferential standard of review
the decision of the Agency must be set aside.
Analysis
[26]
During
oral argument, counsel for the Agency conceded that if the parties had entered
into a final and binding settlement agreement, the Agency would be required to
acknowledge and respect the terms of a final settlement. However, counsel for
the Agency argued that this was not the issue before the Agency in the present
case. The issue before the Agency was whether it had jurisdiction to deal with
the second complaint filed by the Community Board. In counsel’s submission, the
parties did not present the settlement agreement as a final and binding
settlement agreement which could bar adjudication of the second complaint.
[27]
In
my view, counsel for the Agency was correct to concede that the Agency must
respect the terms of any final settlement agreement concluded by the parties to
a complaint before the Agency. This acknowledgment is consistent with the
legislative scheme in which the Agency operates.
[28]
As
described above, the Act authorizes the Agency to publish guidelines with
respect to the collaborative resolution of noise and vibration complaints.
Where such guidelines have been published, the Agency cannot proceed to
investigate or hear a complaint unless it is satisfied that those measures have
been exhausted. Mediation, a form of collaborative resolution provided for in
the Act, has the effect of staying proceedings before the Agency. A settlement
agreement reached through mediation may be filed with the Agency and be
enforced as if it were an order of the Agency.
[29]
Read
as a whole, these provisions reflect Parliament’s intent that the collaborative
and adjudicative procedures are alternate mechanisms for reaching the same
result: the final resolution of a complaint. Both mechanisms result in a
document that can be filed with the Federal Court or a superior court for
enforcement. There is nothing in the legislative scheme to support the Agency’s
conclusion that the successful resolution of a complaint in whole or in part
through collaborative measures does not replace the adjudicative process with
respect to those issues which the parties have finally resolved.
[30]
Where
the parties have finally resolved a complaint in a settlement agreement, the
practical effect of a decision of the Agency to ignore the settlement agreement
and adjudicate issues previously resolved would be to denude the collaborative
measures of any effect. No properly advised litigant would agree to enter
mediation if the litigant understood that the time and resources devoted to
reaching a mediated result would be wasted if the other side later regretted
its bargain and simply decided that the mediated solution was no longer
desirable.
[31]
Turning
to counsel’s submission that in the present case the parties did not present
the settlement agreement as a final and binding agreement that would bar
adjudication of the second complaint, this submission is untenable in light of
the written submissions the parties made to the Agency. As set out at some
length above, the position of the Railway Companies throughout was that the
settlement agreement was a final and binding agreement. The Community Board
joined issue with the Railway Companies on this point, taking the position that
the settlement agreement was not intended to be an “enduring document which
would prevent the filing of a subsequent complaint.”
[32]
The
Agency failed to consider and decide the central issue raised by the parties:
what was the effect of the settlement agreement. Was it a final and binding
settlement which barred the Community Board from litigating issues it had
previously compromised? By failing to decide the central issue raised by the
parties, the Agency’s decision was unreasonable and so should be set aside.
Conclusion and Costs
[33]
For
these reasons, I would allow the appeal, set aside the decision of the Agency
and return the matter to the Agency to determine whether the settlement
agreement was intended to finally resolve the issues raised in the first
complaint. If so, given the finding of the Agency that the two complaints are
“virtually identical,” the Community Board will be precluded from relitigating
those issues before the Agency.
[34]
Subsection
41(4) of the Act entitles the Agency to be heard on the argument of an appeal
from one of its decisions on a question of law or jurisdiction. In the present
case, the submissions of the Agency went beyond the scope of its jurisdiction.
Counsel for the Agency argued the merits of the appeal and asserted the
reasonableness of the Agency’s decision. For that reason, it is appropriate
that costs follow the event. I would order that the Agency pay one set of the
costs of this appeal to the Railway Companies.
“Eleanor R. Dawson”
“I agree
Marc Noël J.A.”
“I agree
J.D. Denis Pelletier J.A.”
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