Date: 20100909
Dockets: A-281-08
A-282-08
A-283-08
A-284-08
A-285-08
A-286-08
Citation: 2010 FCA 225
CORAM: BLAIS
C.J.
NADON
J.A.
SHARLOW
J.A.
Docket: A-281-08
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
PATERSON GRAIN, GOVERNMENT OF THE
PROVINCE OF MANITOBA, JAMES RICHARDSON
INTERNATIONAL LIMITED and
CANADIAN TRANSPORTATION AGENCY
Respondents
Docket: A-282-08
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
CANADIAN WHEAT BOARD, GOVERNMENT
OF THE PROVINCE OF SASKATCHEWAN,
GOVERNMENT OF THE PROVINCE OF
MANITOBA, JAMES RICHARDSON
INTERNATIONAL LIMTED and
CANADIAN TRANSPORTATION AGENCY
Respondents
Docket: A-283-08
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
PARRISH AND HEIMBECKER, LIMITED,
GOVERNMENT OF THE PROVINCE OF
ALBERTA, GOVERNMENT OF THE PROVINCE
OF MANITOBA, JAMES RICHARDSON
INTERNATIONAL LIMTED and
CANADIAN TRANSPORTATION AGENCY
Respondents
Docket: A-284-08
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
PROVIDENCE GRAIN GROUP INC.,
GOVERNMENT OF THE PROVINCE OF
ALBERTA, JAMES RICHARDSON
INTERNATIONAL and
CANADIAN TRANSPORTATION AGENCY
Respondents
Docket: A-285-08
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
NORTH WEST TERMINAL LTD.,
GOVERNMENT OF THE PROVINCE OF
SASKATCHEWAN, JAMES RICHARDSON
INTERNATIONAL LIMITED and
CANADIAN TRANSPORTATION AGENCY
Respondents
Docket: A-286-09
BETWEEN:
CANADIAN NATIONAL RAILWAY CO.
Appellant
and
NORTH EAST TERMINAL LTD.,
GOVERNMENT OF THE PROVINCE OF
SASKATCHEWAN, GOVERNMENT OF THE
PROVINCE OF MANITOBA, JAMES
RICHARDSON INTERNATIONAL LIMITED and
CANADIAN TRANSPORTATION AGENCY
Respondents
REASONS FOR JUDGMENT
NADON J.A.
[1]
On August
27, 2008, my colleague Sexton J.A. made an Order consolidating these six appeals.
He ordered that the appeal in Court file A-281-08 (Patterson Grain) would be
the lead appeal, that the appeals would be heard together, that the Order made
in the lead appeal would apply to the other appeals and that a copy of the
Reasons for Judgment in the lead appeal would be filed in the other appeals as
Reasons therein. Thus, these Reasons shall dispose of all the appeals.
[2]
These are appeals
of the Canadian Transportation Agency’s (the “Agency”) decisions dated January
18, 2008, wherein the Agency held that the Canadian National Railway Company
(the “appellant”) had failed to meet its level of service obligations to the
respondents with respect to services provided during the 2006-2007 crop year.
[3]
The Agency
further held that with respect to the 2007-2008 crop year, the evidence was
insufficient for it to find that the appellant had breached its common carrier
obligations. As a result, the Agency made an Order pursuant to which the
appellant and the respondents were to provide it with service information for
the period of August 2007 to April 2008 (grain weeks nos. 1 to 36 of crop year
2007-2008). The Agency concluded that part of its decision by indicating that
following the receipt of the requested information, it would determine whether
the appellant had failed to provide adequate rail service during crop year
2007-2008.
[4]
For the
reasons that follow, I have concluded that these appeals should be allowed.
THE FACTS
[5]
On
September 5, 2007, the respondents Canadian Wheat Board (“CWB”) and North East
Terminal Ltd. (“NET”) filed complaints with the Agency pursuant to sections 26,
37 and 113 to 116 of the Canada Transportation Act, S.C. 1996, c. 10
(the “Act”). These complaints sought an order requiring the appellant to
fulfill its level of service obligations for the receiving, carrying and
delivery of grain in Western Canada. In its complaint, CWB further requested an
interim order pursuant to subsection 28(2) of the Act, suspending the
appellant’s advance product programs for the 2007-2008 crop year until further
order from the Agency.
[6]
On
September 7, 2007, the respondents Paterson Grain (“PG”), North West Terminal
Ltd. (“NWT”), Parrish and Heimbecker Ltd. (“P&H”) and Providence Grain
Group Inc. (“PGG”) also filed service complaints with the Agency.
[7]
All of the
respondents are members of the “CARS” group of grain shippers (the “CARS
group”). The CARS group was formed after the introduction of certain advance
product offerings by the appellant for the purpose of trading cars among
themselves in order to supplement their car supply.
[8]
The submissions
made by the respondents to the Agency were essentially the same. They alleged
that the appellant had failed and continued to fail to provide adequate and
suitable rail service to them through the supply of general distribution rail
cars. They further submitted that the advance product programs being
implemented by the appellant, at the time of the complaints, discriminated
against them in the distribution of rail cars and hindered their ability to
move their grain efficiently to market, causing damage to their reputation in
the markets which they served.
[9]
On October
3, 2007, the Agency issued its decision LET-R-180-2007, pursuant to which it determined
that, in the interest of efficiency, routine procedural matters pertaining to
all complaints would be dealt with as a group. However, the Agency indicated
that the merits of each complaint would be dealt with separately.
[10]
In order
to properly understand the context in which the complaints were made, it is
important to say a few words about the Agency’s decision 344-R-2007, dated July
6, 2007 (the “GNG decision”). That decision dealt with a complaint filed by
Great Northern Grain Terminal Ltd. (“GNG”), a member of the CARS group, with
regard to the appellant’s service obligations for the receiving, carrying and
delivery of grain to and from the GNG facility at Nampa, Alberta, for crop year 2006-2007. The
respondents herein were among the parties who intervened in the GNG complaint.
Each of the respondents filed an intervention in support of GNG’s complaint.
[11]
In its GNG
decision, the Agency found that the rail car policy adopted by the appellant for
the 2006-2007 crop year resulted in an unsuitable and inadequate level of
service, constituting a breach of its common carrier obligations to GNG. The
Agency directed the appellant to: (i) allow GNG to reserve railway capacity for
a contract period; (ii) not prohibit GNG from trading cars or to restrict it in
the manner in which it did so; (iii) advise GNG of the methodology it was using
in its determination of allocating car supply; and (iv) implement the above
directions by the beginning of the 2007-2008 crop year, commencing on August 1,
2007.
[12]
Between August
2007 and the respondents’ initiation of the complaints at issue in these
appeals, the appellant made a number of significant changes to its advance
grain product programs for the 2007-2008 crop year. The appellant further
modified its advance product programs following the release of the GNG
decision. The appellant maintained that these modifications brought it into
full compliance with the directions issued by the Agency in its GNG decision.
[13]
The
appellant and the CARS group representatives met to discuss service proposals,
but were unable to come to terms. As a result, the respondents filed their complaints
with the Agency.
[14]
On October
3, 2007, the Agency issued its decision LET-R-80-2007, wherein it indicated
that because the parties could not reach an agreement through mediation, the
statutory deadline for disposition of the complaints was extended to January
19, 2008.
[15]
In a
further decision, namely LET-R-185-2007, dated October 19, 2007, the Agency
denied the respondents’ request for an interim order suspending the appellant’s
advance product programs for the 2007-2008 crop year. The Agency concluded that
it could not on the material before it make a finding of irreparable harm which
would have allowed it to suspend the appellant’s advance product programs.
[16]
On October
26, 2007, the appellant filed its answers to the respondents’ complaints, in
which it put forward the following grounds of defence:
(1) The
complaints were premature and unfounded since they were based on a “single week
of allocation”.
(2) The
very basis of the complaints had been rendered moot since it had made
amendments to its advance product programs following the GNG decision.
(3) The
respondents’ inflated car order requests could not be accepted as a true
indication of shipper demand.
(4) It had
fully complied with the GNG decision and the complaints were simply a “second
attempt” by the respondents to obtain relief from the appellant, the Agency
having already refused to give this relief to GNG.
[17]
On
November 5, 2007, the respondents filed their replies to the appellant’s answers.
[18]
On January
18, 2008, the Agency issued its decisions 25-R-2008, 20-R-2008, 23-R-2008, 24-R-2008,
22-R-2008 and 21-R-2008. These are the decisions which the appellant now
appeals before us.
THE AGENCY’S DECISIONS
[19]
In its decisions,
the Agency examined the circumstances of the complaints and considered a
variety of factors, including the programs the appellant had in place for the
transportation of grain during crop year 2006-2007 and the changes implemented
by the appellant for crop year 2007-2008. The Agency acknowledged that the
appellant’s revisions to its advance grain product programs for 2007-2008
reflected an effort to improve service levels.
[20]
The Agency
held that the appellant had failed to meet its level of service obligations to
the respondents for services provided for various periods during the 2006-2007
crop year. The Agency also found that the respondents would suffer substantial
commercial harm if the situation was to continue. As a result, the Agency found
that it could provide a remedy to the respondents. In its view, subsection
116(4)(c) of the Act gave it broad powers to order whatever relief it deemed
necessary if it found that there had been a breach of service obligations.
[21]
With
respect to crop year 2007-2008, the Agency recognized that the appellant had
made efforts to revise its programs to meet the needs of all shippers. Although
the respondents were requesting that the Agency fix these changes by an Order, the
Agency found that there was insufficient information before it with respect to the
service provided for crop year 2007-2008 under the appellant’s revised
programs. Consequently, the Agency held that it was unable “to rule on a final
remedy at this point in time” (paragraph 95 of the Agency’s decision appealed
in Court file A-283-08 (the “PG decision”)).
[22]
Thus, the
Agency made that part of its decision conditional. It ordered the parties to
file service information pertaining to grain weeks numbers 1 through 36 of crop
year 2007-2008, following the receipt of which it would make a final determination
with regard to whether the appellant was in breach of its common carrier
obligations for crop year 2007-2008.
THE ISSUES
[23]
Although a
number of issues are raised in these appeals, I am of the view that we need
only consider three issues to dispose of the appeals:
(i) What is the applicable standard of review?
(ii) Did the Agency err in law or exceed its jurisdiction by
failing or refusing to dismiss the complaints as they relate to the 2007-2008
crop year once it had determined that the evidence was not sufficient for it to
find a breach of the appellant’s common carrier obligations?
(iii) Did the Agency err in law or exceed its jurisdiction
by expanding the scope of the complaints to include a review of service
provided by the appellant for the 2006-2007 crop year?
RELEVANT LEGISLATION
[24]
The
following provisions of the Act are relevant to the determination of these
appeals:
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26.
The Agency may require a person to do or refrain from doing any thing that
the person is or may be required to do or is prohibited from doing under any
Act of Parliament that is administered in whole or in part by the Agency.
27.
(1) On an application made to the Agency, the Agency may grant the whole or
part of the application, or may make any order or grant any further or other
relief that to the Agency seems just and proper.
(2) Where an application is made to the Agency by a shipper in respect of a
transportation rate or service, the Agency may grant the relief sought, in
whole or in part, but in making its decision the Agency must be satisfied,
after considering the circumstances of the particular case, that the
applicant would suffer substantial commercial harm if the relief were not
granted.
28. (1) The Agency
may in any order direct that the order or a portion or provision of it shall
come into force
(a) at a future time,
(b) on the happening
of any contingency, event or condition specified in the order, or
(c) on the
performance, to the satisfaction of the Agency or a person named by it, of
any terms that the Agency may impose on an interested party,
and the Agency may
direct that the whole or any portion of the order shall have force for a
limited time or until the happening of a specified event.
(2) The Agency may,
instead of making an order final in the first instance, make an interim order
and reserve further directions either for an adjourned hearing of the matter
or for further application.
…
113.
(1) A railway company shall, according to its powers, in respect
of a railway owned or operated by it,
(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;
(b) furnish adequate and suitable
accommodation for the carriage, unloading and delivering of the traffic;
(c) without delay, and with due care
and diligence, receive, carry and deliver the traffic;
(d) furnish and use all proper
appliances, accommodation and means necessary for receiving, loading,
carrying, unloading and delivering the traffic; and
(e) furnish any other service
incidental to transportation that is customary or usual in connection with
the business of a railway company.
(2)
Traffic must be taken, carried to and from, and delivered at the points
referred to in paragraph (1)(a) on the payment of
the lawfully payable rate.
(3)
Where a shipper provides rolling stock for the carriage by the railway
company of the shipper’s traffic, the company shall, at the request of the
shipper, establish specific reasonable compensation to the shipper in a
tariff for the provision of the rolling stock.
(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.
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.
(2)
For the purposes of subsection (1), adequate and suitable accommodation includes
reasonable facilities for the receiving, carriage and delivery by the company
(a) at the request of any other
company, of through traffic and, in the case of goods shipped by carload, of
the car with the goods shipped in it, to and from the railway of the other
company, at a through rate; and
(b) at the request of any person
interested in through traffic, of such traffic at through rates.
(3)
Every railway company that has or operates a railway forming part of a
continuous line of railway with or that intersects any other railway, or that
has any terminus, station or wharf near to any terminus, station or wharf of
another railway, shall afford all reasonable facilities for delivering to
that other railway, or for receiving from or carrying by its railway, all the
traffic arriving by that other railway without any unreasonable delay, so
that
(a) no obstruction is offered to the
public desirous of using those railways as a continuous line of
communication; and
(b) all reasonable accommodation, by
means of the railways of those companies, is at all times afforded to the
public for that purpose.
(4)
If a railway company provides facilities for the transportation by rail of
motor vehicles or trailers operated by any company under its control for the
conveyance of goods for hire or reward,
(a) the railway company shall offer
to all companies operating motor vehicles or trailers for the conveyance of
goods for hire or reward similar facilities at the same rates and on the same
terms and conditions as those applicable to the motor vehicles or trailers
operated by the company under its control; and
(b) the Agency may disallow any rate
or tariff that is not in compliance with this subsection and direct the
company to substitute a rate or tariff that complies with this subsection.
…
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.
(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.
(3)
If a shipper and a company agree under subsection 136(4) on the manner in
which the service obligations are to be fulfilled by the local carrier, the
terms of the agreement are binding on the Agency in making its determination.
(4)
If the Agency determines that a company is not fulfilling any of its service
obligations, the Agency may
(a) order that
(i)
specific works be constructed or carried out,
(ii)
property be acquired,
(iii)
cars, motive power or other equipment be allotted, distributed, used or moved
as specified by the Agency, or
(iv) any
specified steps, systems or methods be taken or followed by the company;
(b) specify in the order the maximum
charges that may be made by the company in respect of the matter so ordered;
(c) order the company to fulfil that
obligation in any manner and within any time or during any period that the
Agency deems expedient, having regard to all proper interests, and specify
the particulars of the obligation to be fulfilled;
(d) if the service obligation is in
respect of a grain-dependent branch line listed in Schedule I, order the
company to add to the plan it is required to prepare under subsection 141(1)
an indication that it intends to take steps to discontinue operating the
line; or
(e) if the service obligation is in
respect of a grain-dependent branch line listed in Schedule I, order the
company, on the terms and conditions that the Agency considers appropriate,
to grant to another railway company the right
(i) to run
and operate its trains over and on any portion of the line, and
(ii) in so
far as necessary to provide service to the line, to run and operate its
trains over and on any portion of any other portion of the railway of the
company against which the order is made but not to solicit traffic on that
railway, to take possession of, use or occupy any land belonging to that
company and to use the whole or any portion of that company’s right-of-way,
tracks, terminals, stations or station grounds.
(5)
Every person aggrieved by any neglect or refusal of a company to fulfil its
service obligations has, subject to this Act, an action for the neglect or refusal
against the company.
(6)
Subject to the terms of a confidential contract referred to in subsection
113(4) or a tariff setting out a competitive line rate referred to in
subsection 136(4), a company is not relieved from an action taken under
subsection (5) by any notice, condition or declaration if the damage claimed
in the action arises from any negligence or omission of the company or any of
its employees.
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26. L’Office peut
ordonner à quiconque d’accomplir un acte ou de s’en abstenir lorsque l’accomplissement
ou l’abstention sont prévus par une loi fédérale qu’il est chargé d’appliquer
en tout ou en partie.
27. (1) L’Office
peut acquiescer à tout ou partie d’une demande ou prendre un arrêté, ou, s’il
l’estime indiqué, accorder une réparation supplémentaire ou substitutive.
(2) L’Office
n’acquiesce à tout ou partie de la demande d’un expéditeur relative au prix
ou au service d’un envoi que s’il estime, compte tenu des circonstances, que
celui-ci subirait autrement un préjudice commercial important.
28. (1) L’Office
peut, dans ses arrêtés, prévoir une date déterminée pour leur entrée en
vigueur totale ou partielle ou subordonner celle-ci à la survenance d’un
événement, à la réalisation d’une condition ou à la bonne exécution,
appréciée par lui-même ou son délégué, d’obligations qu’il aura imposées à
l’intéressé; il peut en outre y prévoir une date déterminée pour leur
cessation d’effet totale ou partielle ou subordonner celle-ci à la survenance
d’un événement.
(2) L’Office peut
prendre un arrêté provisoire et se réserver le droit de compléter sa décision
lors d’une audience ultérieure ou d’une nouvelle demande.
…
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 :
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;
b) fournit les
installations convenables pour le transport, le déchargement et la livraison
des marchandises;
c) reçoit, transporte
et livre ces marchandises sans délai et avec le soin et la diligence voulus;
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;
e) fournit les autres
services normalement liés à l’exploitation d’un service de transport par une
compagnie de chemin de fer.
(2) Les marchandises
sont reçues, transportées et livrées aux points visés à l’alinéa (1)a) sur
paiement du prix licitement exigible pour ces services.
Indemnité de matériel
roulant
(3) Dans les cas où
l’expéditeur fournit du matériel roulant pour le transport des marchandises
par la compagnie, celle-ci prévoit dans un tarif, sur demande de
l’expéditeur, une compensation spécifique raisonnable en faveur de celui-ci
pour la fourniture de ce matériel.
Contrat confidentiel
(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.
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.
(2) Pour l’application
du paragraphe (1), les aménagements convenables comprennent des installations
de réception, de transport et de livraison par la compagnie :
a) à la demande d’une
autre compagnie, de trafic d’entier parcours et, dans le cas de marchandises
expédiées par wagons complets, du wagon et de son contenu à destination et en
provenance du chemin de fer de cette autre compagnie, à un tarif d’entier
parcours;
b) à la demande de
tout intéressé au trafic d’entier parcours, de ce trafic à des tarifs
d’entier parcours.
(3) Toute compagnie de
chemin de fer possédant ou exploitant un chemin de fer qui, en se reliant à
un autre chemin de fer,ou en le croisant, fait partie d’un parcours
ininterrompu de chemin de fer, ou qui possède une tête de ligne, une gare ou
un quai à proximité d’une tête de ligne, d’une gare ou d’un quai d’un autre
chemin de fer, doit accorder toutes les installations raisonnables et voulues
pour livrer à cet autre chemin de fer, ou pour en recevoir et expédier par sa
propre voie, tout le trafic venant par cet autre chemin de fer, sans retard
déraisonnable, et elle doit faire en sorte que le public désirant se servir
de ces chemins de fer comme voie ininterrompue de communication n’y trouve
pas d’obstacles à la circulation et puisse ainsi s’en servir en bénéficiant à
tout moment de toutes les installations raisonnables de transport par les
chemins de fer de ces diverses compagnies.
(4) Si elle fournit
des installations de transport par rail de véhicules automobiles ou de
remorques exploités pour le transport de marchandises à titre onéreux par une
compagnie dont elle a le contrôle, la compagnie de chemin de fer doit offrir
à toutes les compagnies qui exploitent des véhicules automobiles ou des
remorques pour le transport de marchandises à titre onéreux des installations
semblables à celles qu’elle fournit pour les véhicules automobiles ou
remorques exploités par la compagnie dont elle a le contrôle, aux mêmes prix
et aux mêmes conditions; l’Office peut rejeter tout prix ou tarif qui n’est
pas conforme au présent paragraphe et ordonner à la compagnie de chemin de
fer d’y substituer un prix ou tarif conforme au présent paragraphe.
…
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.
(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.
(3) Lorsque, en
application du paragraphe 136(4), un expéditeur et une compagnie s’entendent
sur les moyens à prendre par le transporteur local pour s’acquitter de ses
obligations prévues par les articles 113 et 114, les modalités de l’accord
lient l’Office dans sa décision.
(4) L’Office, ayant
décidé qu’une compagnie ne s’acquitte pas de ses obligations prévues par les
articles 113 ou 114, peut :
a) ordonner la prise
de l’une ou l’autre des mesures suivantes :
(i) la
construction ou l’exécution d’ouvrages spécifiques,
(ii)
l’acquisition de biens,
(iii)
l’attribution, la distribution, l’usage ou le déplacement de wagons, de
moteurs ou d’autre matériel selon ses instructions,
(iv) la
prise de mesures ou l’application de systèmes ou de méthodes par la
compagnie;
b) préciser le prix
maximal que la compagnie peut exiger pour mettre en oeuvre les mesures qu’il
impose;
c) ordonner à la
compagnie de remplir ses obligations selon les modalités de forme et de temps
qu’il estime indiquées, eu égard aux intérêts légitimes, et préciser les
détails de l’obligation à respecter;
d) en cas de
manquement à une obligation de service relative à un embranchement tributaire
du transport du grain mentionné à l’annexe I, ordonner à la compagnie
d’ajouter l’embranchement au plan visé au paragraphe 141(1) à titre de ligne
dont elle entend cesser l’exploitation;
e) en cas de
manquement à une obligation de service relative à un embranchement tributaire
du transport du grain mentionné à l’annexe I, ordonner à la compagnie, selon
les modalités qu’il estime indiquées, d’autoriser une autre compagnie :
(i) à faire
circuler et à exploiter ses trains sur toute partie de l’embranchement,
(ii) dans
la mesure nécessaire pour assurer le service sur l’embranchement, à faire
circuler et à exploiter ses trains sur toute autre partie du chemin de fer de
la compagnie, sans toutefois lui permettre d’offrir des services de transport
sur cette partie du chemin de fer, de même qu’à utiliser ou à occuper des terres
lui appartenant, ou à prendre possession de telles terres, ou à utiliser tout
ou partie de l’emprise, des rails, des têtes de lignes, des gares ou des
terrains lui appartenant.
(5) Quiconque souffre
préjudice de la négligence ou du refus d’une compagnie de s’acquitter de ses
obligations prévues par les articles 113 ou 114 possède, sous réserve de la
présente loi, un droit d’action contre la compagnie.
(6) Sous réserve des
stipulations d’un contrat confidentiel visé au paragraphe 113(4) ou d’un tarif
établissant un prix de ligne concurrentiel visé au paragraphe 136(4), une
compagnie n’est pas soustraite à une action intentée en vertu du paragraphe
(5) par un avis, une condition ou une déclaration, si les dommages-intérêts
réclamés sont causés par la négligence ou les omissions de la compagnie ou
d’un de ses employés.
|
ANALYSIS
A. What is the applicable
standard of review$
[25]
I begin
with the applicable standard of review.
[26]
The
appellant submits that the standard of review in this case must be correctness
because the issues in the appeals concern errors of jurisdiction, errors of law
affecting jurisdiction and issues of procedural fairness or natural justice.
[27]
The
respondents submit that the appropriate standard of review applicable to all
the questions other than those relating to breaches of natural justice is
reasonableness, and concede that with respect to those issues, the appropriate
standard is correctness. The respondents submit that determinations of the
Agency with respect to level of service obligations are, at the very least, questions
of mixed fact and law and therefore subject to the reasonableness standard.
[28]
For the
reasons that follow, I conclude that whether the standard be correctness or
reasonableness, the Agency’s decisions cannot stand. More particularly, I
conclude that the appellant’s submissions with respect to issues (ii) and (iii)
are well founded.
B.
Did
the Agency err in law or exceed its jurisdiction b failing or refusing to
dismiss the complaints as they relate to the 2007-208 crop year once it had
determined that the evidence was not sufficient for it to find a breach of the
appellant’s common carrier obligations?
[29]
I now turn
to issue (ii), which requires us to determine whether the Agency could proceed
as it did once it had held that there was insufficient evidence before it to
find that the appellant had breached its common carrier service obligations for
crop year 2007-2008.
[30]
At
paragraphs 95, 96 and 97 of its PG decision, the Agency dealt with crop year
2007-2008 in the following terms:
95. Certainly,
new CN grain products programs have been designed to address some of the
earlier deficiencies which caused the Agency to find a breach in crop year
2006-2007. The Agency is prepared to accept that these new programs, which at least
in design, represent an effort on the part of CN to provide reasonable and
adequate accommodation for the traffic of PG. However, there is insufficient
information before the Agency on the record of service provided for crop year
2007-2008 under these revised programs for the Agency to rule on a final remedy
at this point in time.
96. As
referenced previously, the Agency has broad powers to order a railway company
to fulfill its level of service obligations in an manner deemed expedient. The
Agency also has the authority to issue conditional orders.
97. This
is a conditional ruling whereby the Agency finds that the new tariffs reflect
an effort on the part of CN to address past service shortfall issues.
However, prior to a final determination on this, CN and PG shall file with the
Agency service information, electronically and in hard copy, in the format
prescribed below, for the period of 2007-2008 crop year beginning with grain
week 1 through to and including grain week 36, that is, approximately, the
first week of August 2007 up to and including the first week of April 2008.
[Emphasis
added]
[31]
In my
view, the Agency, in so holding, erred in two ways. First, having found that
the evidence before it was insufficient for it to make a determination with
respect to the question of whether the appellant had breached its level of
service obligations for crop year 2007-2008, the Agency had no option but to
dismiss the complaints.
[32]
I am
unable to understand on what basis the Agency believed that it could keep the
complaints “alive” so as to allow the respondents an additional six months to
provide further evidence which might lead to a finding that there was a breach
of the appellant’s common carrier obligations for crop year 2007-2008. The fact
that the Agency has the power to issue conditional orders is of no help to the
respondents. In my view, what the Agency did does not constitute a conditional
order pursuant to the legislation and, in particular, pursuant to section 28 of
the Act. The plain fact is that the evidence before the Agency was not
sufficient for it to provide the respondents with the remedy which they sought.
Hence, in those circumstances, the only possible conclusion was the dismissal
of the complaints. As the Agency could not find that the appellant had breached
its obligations, it could not provide a remedy to the respondents.
[33]
Second, the
legislation and, in particular section 116 of the Act, does not allow the
Agency, in the face of an incomplete or insufficient evidentiary record, to
simply “extend” a complaint for a period of six month in order to ascertain,
following the receipt of additional information during that period, whether
there is a breach of level of service obligations for the crop year at issue.
In my opinion, the Agency’s decisions, as they pertain to crop year 2007-2008, constitute
unreasonable decisions which require us to intervene.
[34]
To conclude
my analysis with regard to issue (ii), I would make a further point. Both
subsection 29(1) and paragraphs 116(1)(a) and (b) of the Act require the Agency
to determine complaints such as those filed by the respondents herein “as
expeditiously as possible” and “within 120 days after receipt of the
complaint”. Thus, it is clear that Parliament intended that the Agency deal
with complaints as quickly as possible so as to remedy, if necessary, the
situation where a railway company is not fulfilling its service obligations.
Consequently, in that context, the Agency cannot avoid making a determination
as it did in the present matter by, in effect, adjourning the matter for six
months in order to gather additional information.
[35]
At
paragraph 79 of its Memorandum of Fact and Law, the appellant argued that in
“converting a complaint application into a monitoring and evidence-gathering
process, the Agency has exceeded its grant of authority under which it is purporting
to act”. I have no difficulty agreeing with this argument.
C. Did the Agency err
in law or exceed its jurisdiction by expanding the scope of the complaints to
include a review of services provided by the appellant for the 2006-2007 crop
year?
[36]
I now turn
to issue (iii), which requires us to determine whether the Agency could provide
a remedy to the respondents in regard to the 2006-2007 crop year. In my view,
it clearly could not provide such a remedy. The Agency’s decisions, as they
pertain to issue (iii), are also unreasonable and therefore our intervention is
required.
[37]
I begin
this part of my analysis by turning
to the complaints and, more particularly, to that of the respondent PG which
is, in all material respects, identical to the complaints filed by the other
respondents.
[38]
First, the covering
letter sent by PG’s lawyers, dated September 7, 2007, ends with the following
remarks:
Given
CN’s implementation of its advance products program, and the harm that such
implementation will cause to the members of the CARS group, PG has reluctantly
come to the conclusion that it has no alternative but to launch a level of
service complaint to the Agency for redress. Further level of service
complaints are being filed by the other members of the CARS group that shipped
via CN”
[Emphasis
added]
[39]
Attached to the
aforesaid letter is PG’s complaint, which seeks the following determination on
the part of the Agency:
… that Canadian National
Railway Company (“CN”) is failing to fulfill its level of service obligations
for the receiving, carrying and delivering of grain to and from the Canadian
origins and destinations served by CN, from and to which PG’s grain is shipped.
Specifically, PG submits that CN has failed and is continuing to fail to
provide adequate rail service through the supply of general distribution rail
cars to PG. The applicant submits that the advance products programs
currently being unilaterally implemented by CN discriminate against PG in the
distribution of rail cars, causing damage to PG’s reputation in the markets
it serves, and hindering PG’s ability to move the grain efficiently to market.
[Emphasis
added]
[40]
At page 7 of its
complaint, PG sets out as a heading what appears to be the real basis of the
complaint: “CN’s latest proposal does not provide adequate and suitable
accommodation for PG’s traffic”. Further, at page 12, paragraph 18(g) of
PG’s complaint, the following assertion is found:
18. …
g. While
CN delayed the introduction of their programs to permit dialogue with the CARS
group, the dialogue was not meaningful. CN is implementing its programs on the
same shipping week as they did for the last crop year, and without having
developed a plan to satisfy the car supply requirements of the CARS group. CN’s
implementation of its programs at this time has necessitated this application
and our request for interim relief (see the interim relief requested by PG
below).
[Emphasis
added]
[41]
In the same light, at
paragraph 73 of its reply to CN’s answer, PG makes the following point:
73. …
The point is that CN continues to fail to provide PG with adequate and
suitable accommodation for its traffic in general rail car distribution
notwithstanding the changes that CN has made to its advance products programs
for the current crop year.
[42]
A similar assertion
is found at paragraph 29 of PG’s reply to CN’s answer:
29. As
CN was planning on moving ahead with its advance programs and as those programs
in PG’s view were not consistent with the principles set out in the GNG
Decision, PG was forced to file its level of service application and did so
on September 7, 2007.
[Emphasis
added]
[43]
What the above
passages show, in my respectful view, is that PG and the other respondents took
the position that CN had not complied with the Agency’s GNG Decision.
Furthermore, PG’s complaint and those of the other respondents leave no doubt
in my mind that they were complaining about the current situation, i.e. the
services provided to them by the appellant during the early weeks of the
2007-2008 crop year. The complaints are not, in effect, directed at the level
of service provided by the appellant during the 2006-2007 crop year.
[44]
The appellant argues,
and I agree entirely with that argument, that the gravanan of the respondents’
complaints was that the changes made by the appellant to its advance products
programs, following the complaint made by GNG in respect of the 2006-2007 crop
year, were insufficient to provide them with suitable and adequate
accommodation for the 2007-2008 crop year. As the complaints clearly state, it
was the appellant’s implementation of the revised programs which rendered the
complaints necessary.
[45]
It is striking that
the complaints filed by the respondents are almost silent with regard to the
level of service provided by the appellant during the 2006-2007 crop year. Any
mention or reference to the appellant’s service during the previous crop year
appears to be explanatory only, providing history and context to the current
situation of the appellant’s inadequate service. Thus, on the wording of the
complaints, there would appear to be no basis for a finding by the Agency that
the appellant failed to provide adequate services during the 2006-2007 crop
year. However, in fairness to the respondents, they adopted in their complaints
and incorporated by reference the evidence that they had adduced by way of
their interventions in support of GNG’s level of service complaint against the
appellant. It is clear that it is on the basis of that evidence that the Agency
determined that the appellant had breached its statutory service obligations to
the respondents in 2006-2007. At paragraph 41 of its PG decision, the Agency
opined as follows:
[41] The Agency
finds that based on the general distribution cars allocated in the Vancouver corridor for the first
32 grain weeks of crop year 2006-2007, CN is not providing reasonable and
adequate accommodation. Specifically, over this period of time, CN seriously
failed to meet PG’s stated general car allocation needs. The records in this
respect points to a chronic service failure where approximately only 14 percent
of the shippers orders were met. In the absence of any justification by CN that
mitigates this failure, the Agency finds that over this period, CN breached its
statutory obligations to PG.
[46]
The 32-week period
relied on by the Agency for its determination and the allocation percentage
used by it for its finding of breach clearly corresponds with the information
contained in the PG intervention. Similar findings based on evidence adduced
through interventions in the GNG decision were made by the Agency in regard to
the complaints made by the other respondents.
[47]
The appellant took
objection to the Agency’s way of determining that it had breached its level of
service obligations to the respondents during the 2006-2007 crop year. The
thrust of the appellant’s arguments on this point is found at paragraphs 56 to
60 of its Memorandum of Fact and Law:
56. It is
incongruous that a party can extend the potential scope of an application in
this way. CN should be entitled to know which exact weeks in the crop year the
shipper is complaining about, and to which corridors the complaint relates.
Without clarity in that regard, CN cannot properly know the case being made
against it.
57. While the
Agency can properly look at the evidence initially filed by the Complainants in
relation to the GNG Decision (and resubmitted as an Appendix by the
Complainants in the proceeding) in order to give context and flavour to the
within Applications, it is not open for the Agency to consider such submissions
as actual evidence of a service breach, particularly in the absence of
allegations in relation to this period in the Applications. It is fundamental
to the litigation process that a proceeding be decided within the boundaries of
the pleadings. The parties to a legal dispute are entitled to have a resolution
of their differences on the basis of the issues joined in the pleadings. The
scope of an Application is defined by the framework of the Applications
themselves, it is not set out by the evidence that is adduced to support
that Application. The scope of an application is not a moving target or a work
in progress, rather, the scope is set by the content of the pleadings
crystallized as of the date they are filed. The Complainant is limited to what
is alleged in the Application itself, and if the Complainant initiates an
Application a time when it has no case, the claim must necessarily fail. Its
stated case cannot be expanded beyond what was alleged in the Application
simply by the filing of additional “evidence” that may have been filed in
another action.
58. CN was
compelled to respond to the complaints as relating to service received during
the current crop year because the Act (section 116) references prospective
remedial relief from an existing service condition. In this case, the
Applications referenced alleged level of service breaches that resulted from
CN’s implementation of a revised advance products program, for the 2007-2008
crop year, following the Agency’s order in the GNG Decision. This
interpretation accorded with the legislative framework of the Act and the
requirement on a shipper to demonstrate continuing commercial harm in the
future.
59. Put simply, a
shipper should not be permitted, by simply attaching an intervention filed in a
different proceeding, involving a different menu of CN advance product
offerings, in a different crop year, to somehow allege that its Application
includes a complaint about service received more than a year prior during the
first week of the previous crop year. If the Complainants had intended
to expand the scope of their Application in this way (which they are not
legally capable of doing), a much more specific and direct allegation as to
this previous service and the exact length of the complaint period would have
been required.
60. By expanding
the scope of the application and making a determination as to the adequacy of
service received by the Complainants in the 2006-2007 crop year, the Agency
exceeded its jurisdiction and breached the rules of natural justice.
[48]
In my view, there is
considerable merit to these arguments. I am satisfied that the complaints were
not directed at the 2006-2007 crop year. Rather, they allege a failure on the
part of the appellant to provide adequate levels of service to the respondents
for the crop year 2007-2008 and, in particular, that the appellant’s advanced
products programs failed to implement the principles set out in the Agency’s
GNG decision.
[49]
It is
significant in my view that the respondents, who clearly had the opportunity of
filing complaints with the Agency for the 2006-2007 crop year, chose not do so,
preferring instead to intervene in support of GNG’s complaint for that crop
year.
DISPOSITION
[50]
For these reasons, I
would allow the appeals with costs in Court file A-381-08 only, I would quash the
Agency’s decisions and I would return these matters to the Agency with a
direction to dismiss the respondents’ complaints.
“M. Nadon”
“I.
agree.
Pierre
Blais C.J.”
“I
agree.
K.
Sharlow J.A.”
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