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T-2983-74
Union Gas Limited, Minister of Energy for Ontario and the Consumers' Gas Company (Applicants)
v.
TransCanada PipeLines Limited, the National Energy Board, Greater Winnipeg Gas Company, Gaz Metropolitain, Inc., Alberta Gas Trunk Line Company Limited, Pan-Alberta Gas Limited, Saskatchewan Power Corporation, Rio Algom Mines Limited, The Attorney General of Manito- ba and The Attorney General of Quebec (Respondents)
Trial Division, Mahoney J.—Ottawa, August 19, 20 and 21, 1974.
Extraordinary remedies—Motion to quash interim rulings of Board—Certiorari not appropriate— National Energy Board Act, R.S.C. 1970, c. N-6, ss. 20, 44(a)-(d)—Federal Court Act, ss. 18, 28.
The applicants sought orders by way of certiorari to quash two rulings of the National Energy Board during the hearing of an application by the respondent TransCanada PipeLines Limited for a certificate under section 44 of the National Energy Board Act.
Held, dismissing the application, the Board's first ruling, determining the order in which it would receive evidence and permit cross-examination of witnesses, was obviously within its powers. As for the second ruling, limiting the scope of the Board's inquiry under section 44 of the Nation al Energy Board Act, certiorari was not the appropriate remedy to deal with an interim determination such as the one in issue, however appropriate it might be to deal with the decision the Board is required to make. The Board had authority to determine in good faith to narrow the scope of its inquiry; it acted in good faith in making that determina tion; and certiorari was inappropriate in respect of such determination.
In re Anti-Dumping Act and in Danmor Shoe Company Ltd. [1974] 1 F.C. 22, applied. Canadian National Railways v. Canada Steamship Lines, Limited [1945] A.C. 204 and Toronto Newspaper Guild v. Globe Print ing Company [1953] 2 S.C.R. 18, considered.
APPLICATION. COUNSEL:
David W. Scott and George Hunter for applicant Union Gas Limited.
Robin Scott, Q.C., and D. Rogers for appli cant Minister of Energy for Ontario.
R. A. Smith, Q.C., and Jerry H. Farrell for applicant Consumers' Gas Company.
L. H. Pilon for respondent TransCanada PipeLines Limited.
F. H. Lamar, Q.C., and I. Blue for respond ent National Energy Board.
Charles Gonthier, Q.C., and Michael Cud- dihy for respondent Gaz Metropolitain, Inc.
A. Lorne Campbell, Q.C., and M. E. Roth- stein for respondent Greater Winnipeg Gas Company.
G. J. Gorman, Q.C., for respondents Alber- ta Gas Trunk Line Company Limited and Pan-Alberta Gas Ltd.
John Sopinka and R. W. Cosman for respondent Rio Algom Mines Limited.
T. J. Waller for respondent Saskatchewan Power Commission.
J. F. Sherwood for respondent Attorney General of Manitoba.
Robert Dulude, Q.C., and Pierre R. Fortin for respondent Attorney General of Quebec.
SOLICITORS.
Scott & Aylen, Ottawa, for applicant Union Gas Limited.
Legal Dept., Minister of Energy for Ontario and Thompson, Rogers, Toronto, for appli cant Minister of Energy for Ontario.
Smith, Lyons and Associates, Toronto, for applicant The Consumers' Gas Company. Legal Dept., TransCanada PipeLines Lim ited, Toronto, for respondent TransCanada Pipelines Limited.
Legal Dept., National Energy Board, for respondent National Energy Board.
Laing, Weldon and Associates, Montreal, for respondent Gaz Metropolitain, Inc.
Aikins, MacAulay and Thorvaldson, Win- nipeg, for respondent Greater Winnipeg Gas Company.
Honeywell, Wotherspoon, Ottawa, for respondents Alberta Gas Trunk Line Com pany Limited and Pan-Alberta Gas Ltd.
Fasken and Calvin, Toronto, for respondent Rio Algom Mines Limited.
Griffin, Beke and Associates, Regina, for respondent Saskatchewan Power Commis sion.
Legal Dept., Attorney General of Manitoba, Winnipeg, for respondent Attorney General of Manitoba.
Geoffrion & Prud'homme, Montreal, and Dept. of Natural Resources for Quebec for respondent Attorney General of Quebec.
The following were served with the originat ing notice of motion, but were not named as parties and were not represented at the hearing:
Consolidated Natural Gas Limited and Consolidated Pipelines Company.
Northern and Central Gas Corporation, Limited.
Industrial Gas Users Association.
The following are the reasons for judgment delivered in English by
MAHONEY J.: This application for orders by way of certiorari arises as a result of two rulings made by the National Energy Board (hereinafter called "the Board") during the course of its hearing of an application by TransCanada Pipe Lines Limited (hereinafter called "TCPL") for a certificate under section 44 of the National
Energy Board Act' in respect of proposed addi tions to its system.
At the beginning of the hearing on August 7, 1974, the Board directed that the evidence-in- chief of the applicant, TCPL, and the various interveners before it and the cross-examination of witness be conducted in a certain order. This direction, which I shall, for convenience, refer to as "the August 7 ruling" had the effect of permitting proponents of the application to cross-examine the witnesses of other propo nents and, because of the order established, permitting that cross-examination, to take place after the witnesses had been cross-examined by those in opposition. Objection was taken to the ruling and argument was heard following which the Board ruled:
Mr. Rogers, the Board sees no reason to chance [sic] the sequence of appearances. The sequence was chosen. by the Board for the convenience of the Board and bearing in mind our impression at the time as to when the evidence would all be in. As to the cross-examination of witnesses, we feel that that should proceed. You, of course, are free to object, Mr. McOuat is free to object, and all counsel are free to object to any question which you think is self-serving or detrimen
t R.S.C. 1970, c. N-6.
44. The Board may, subject to the approval of the Gover nor in Council, issue a certificate in respect of a pipeline or an international power line if the Board is satisfied that the line is and will be required by the present and future public convenience and necessity, and, in considering an applica tion for a certificate, the Board shall take into account all such matters as to it appear to be relevant, and without limiting the generality of the foregoing, the Board may have regard to the following:
(a) the availability of oil or gas to the pipeline, or power to the international power line, as the case may be;
(b) the existence of markets, actual or potential;
(c) the economic feasibility of the pipeline or internation al power line;
(d) the financial responsibility and financial structure of the applicant, the methods of financing the line and the extent to which Canadians will have an opportunity of participating in the financing, engineering and construc tion of the line; and
(e) any public interest that in the Board's opinion may be affected by the granting or the refusing of the application.
tal to your position. 2
The order sought in respect of the August 7 ruling, in the alternative to an order quashing the proceedings to date, was an order quashing that ruling and directing the Board to treat cer tain interveners, namely Gaz Metropolitain Inc., Greater Winnipeg Gas Company and Pan-Alber- ta Gas Limited as co-applicants with TCPL to the extent necessary to deny to those interven- ers the right to cross-examine TCPL's witnesses and those of each other.
The parties, other than TCPL, were before the Board as a result of determinations made pursuant to section 45 of the Act.' The right of the Board to determine the order in which it will receive evidence and permit cross-examination of witnesses, regardless of how anomalous the result may be when the proceedings are viewed as adversary proceedings, seems so clear to me that I dismissed this aspect of the application from the bench at the conclusion of the hearing. I mention it briefly now only with a view to recording my views.
The other ruling, made August 9 (hereinafter referred to as "the August 9 ruling") was attacked with arguments of considerably more substance. Its effect is said by the applicants herein to have deprived them of the right to cross-examine a witness and to introduce evi- dence-in-chief on a material subject with which TCPL had been permitted to deal in its evi- dence-in-chief. A general background is essen tial to an appreciation of their position.
The application before the Board embraced the proposed construction, before the coming winter, of 15.5 miles of loopline in Saskatche- wan and Manitoba and 43 miles of loopline in
2 Transcript, p. 88. Mr. Rogers was counsel for the Minis ter of Energy for Ontario; Mr. McOuat was counsel for Union Gas Limited.
3 45. Upon an application for a certificate the Board shall consider the objections of any interested person, and the decision of the Board as to whether a person is or is not an interested person for the purpose of this section is conclusive.
Ontario between Toronto and Montreal to pro vide transportation for gas purchased by Great er Winnipeg Gas Company and Gaz Metropolit- ain, Inc., in Alberta for delivery in their respective market areas, namely Winnipeg and Montreal and their environs. The application also embraced an additional 7.8 miles of loop- line in Ontario, apparently having nothing in particular to do with Gaz Metropolitain's requirements, being essentially to secure alter nate facilities in case of main line interruption. The application was unique in so far as TCPL was concerned inasmuch as it was the first time that it proposed to construct facilities to meet the transportation requirements of others. Heretofore, TCPL has purchased gas in Alberta, taken delivery at the Alberta border, transport ed it to the market areas of its various custom ers and sold it to them there. For the first time, it proposed to act only as a carrier. As one result, TCPL, in its application to the Board, did not itself propound present and future public convenience and necessity but stated:
13. Evidence that the additional pipeline facilities are and will be required by the present and future public conveni ence and necessity will be submitted by Gaz Metropolitain, inc. and Greater Winnipeg Gas Company, respectively.
The evidence as to future gas supply included in TCPL's application would appear to have been less than fully supportive of the proposi tion that the new facilities would meet the test of future public necessity if the "future" began anything more than a year or two hence. The witness put forward by TCPL to testify on this aspect of their material was subjected to vigor ous cross-examination by counsel for Pan- Alberta Gas, Consumers' Gas, Union Gas, the Minister of Energy for Ontario, Gaz Metropolit- ain and, finally, the Board. Pan-Alberta is the vendor to Gaz Metropolitain of the gas pro posed to be transported and it is, I think, fair to say that their cross-examination was intended to attack the validity of TCPL's supply projection in that they contend it is understated. As TCPL customers without other suppliers, Union and Consumers', both Ontario distributors, support-
ed by the Ontario Minister, cross-examined from a different point of view. The questioning and the evidence-in-chief dealt not only with TCPL's committed and probable supply but with the entire supply available from Alberta for British Columbia as well as points east.
On August 9 a panel of witnesses was called by Gaz Metropolitain. Included on the panel was the manager of gas supply for Pan-Alberta Gas who had, coincidentally, previously occupied a senior position with Westcoast Transmission Company Limited, TCPL's coun terpart in the movement of gas west of Alberta. His evidence-in-chief was limited to the gas reserves committed to Gaz Metropolitain under the contract between the two companies. On cross-examination counsel for Union Gas entered upon a line of questioning relative to new facilities required in Alberta to service the contract and, after objection, the Board ruled:
THE CHAIRMAN: Mr. McOuat, the Board is of the view that what it is charged with finding here is the public interest and convenience of the facilities applied for, which are facilities to be constructed by TransCanada PipeLines, and we find that the line of questioning upon which you have begun to embark was not of sufficient relevance to warrant us an excursion in there, and did not contribute materially to the finding the Board must make in respect to public conveni ence on TransCanada's facilities.
MR. McOUAT: Thank you. 4
Cross-examination continued and, at page 407 of the transcript, referring to a matter raised by counsel for Pan-Alberta in argument on a motion to adjourn the proceeding presented August 7 on behalf of the Minister of Energy for Ontario, asked whether the witness was aware of "any specific shortfall in British Columbia reserve ability to meet British Columbia markets". Counsel for Pan-Alberta objected immediately. Argument was heard during which it became clear that the scope of
4 Transcript p. 402.
the hearing and not just the relevance or materi- ality of the particular question was in the fore front of the minds of those participating in the argument. For the proponents, counsel for Gaz Metropolitain said, in part:
... this application is an application for a certain very limited facility to transport a quantity of gas ... that is de minimis in relation to the overall supply, and the only real issue before this Board is whether there is a public interest and need to transport this available contracted supply to Montreal at this time. That is the issue. To try and transform this hearing into a hearing on overall Canadian supply and requirements, or overall need of transmission facilities in Canada I think is trying to attribute to it some importance that it just does not have . . . . S
For the opponents, counsel for Union Gas replied, in part:
... what Gaz Metropolitain is asking for here, ... is to approve expansion to enable them to buy a gas supply which may well be required to maintain deliverability on their existing contracts as well as existing contracts of others .... That issue then goes to the capability of Alberta supply to meet all Canadian markets, including Trans- Canada's existing contracts and including any proposed extension or expansion .... If you are going to go to the capability of that Alberta supply, the issue of either [sic] further Canadian demands now being imposed on that supply is entirely relevant. 6
Counsel for the Board, after references to particular sections of the Act, advised:
... the pipeline we are talking about is the particular facili ties being applied for by TransCanada and the only thing that concerns this Board is the supply available to that pipeline, the markets to be served by that pipeline and the economic justification for that pipeline. So I would submit that getting into the question of gas supply is not relevant.
Nm. EDGE: On a point of clarification Mr. Blue, what does your statement, or what relation does that have to the evidence put in by Mr. Larson?
Nilo. BLUE: I was not asked my opinion in reference to Mr. Larson's evidence, Mr. Chairman.
Nit. GIBBS: I think also, Mr. Chairman, that Mr. Larson's evidence went in because nobody objected. When those questions were asked we sat quietly because it seemed it
S Transcript p. 409. 6 Transcript p. 410.
had no relevance . . . . 7
THE CHAIRMAN: ... we will hear any remarks that others wish to make on this point, as we are engaged in discussion about the scope of the hearing, . . . . B
Following conclusion of argument on the point, the hearing was adjourned for noon and, when it resumed the Chairman read the follow ing statement:
Gentlemen, the Board is prepared to rule on Mr. Gibbs' objection on the relevancy of the question of Mr. McOuat put to the witness concerning the witness' knowledge of Westcoast Transmission's gas supply.
In so doing the Board also wishes to deal with the arguments as to the relevancy of the effects of the facilities being applied for on the availability of Alberta natural gas to TransCanada and TransCanada's existing customers in the future.
Before the Board can issue a certificate, it must find that the applied for facilities are and will be required by the present and future public convenience and necessity. In so doing the Board is expressly required to take into consider ation all matters which to it appear to be relevant and in addition it may take into account the matters listed in paragraphs (a) to (d) of Section 44 of the Act.
The question of shortfalls of Westcoast Transmission's supply and its implications on the availability of Alberta gas to TransCanada's customers are not matters which the Board considers relevant in this hearing.
Further, the Board does not, in the circumstances of this application and in view of the amounts of gas involved, attach great weight to the assertion that TransCanada's supply situation may or may not be adequate to serve customers to whom it sells gas.
This is so because in terms of TransCanada's deliverabili- ty problem the total gas to be sold to Gaz Metro and Greater Winnipeg are de minimus and, therefore, the public con- vçnience and necessity does not warrant going into these questions here. The Board feels that the time and trouble it would take to explore these questions in all the ramifications outweighs the probative value such evidence would have to the determination it must make in this application, and the objection to Mr. McOuat's question is therefore allowed.
Transcript pp. 411-2. Mr. Edge is a member of the Board, Mr. Blue its counsel and Mr. Gibbs counsel for Pan-Alberta Gas. Mr. Larson was the TCPL witness previ ously referred to.
8 Transcript p. 414.
Of course, these witnesses may be examined on all aspects of Pan Alberta's ability to meet its contractual commitments to Gaz Metro. Thank you. 9
In addition to ruling the particular question regarding Westcoast Transmission out of order, the Board did, at this "point limit the scope of its inquiry under section 44 of the Act in respect of the application before it to the particular facili ties proposed to be built, to the availability of gas for those facilities, the existence of markets for that gas and the economic viability of those facilities. It declined to receive further evidence or to permit cross-examination of witnesses on the broader subjects of national gas supply or of TCPL's own supply for its present customers. That is what was understood by the parties before it to be the effect of the ruling and I am satisfied that is what was intended notwith standing later protestations to the contrary.
In respect of the August 9th ruling, the appli cants herein seek an order by way of certiorari quashing the proceedings to date or, in the alter native, quashing the ruling and directing the Board to receive evidence relating to the effect of the proposal on future gas supply to its existing customers.
The issue in this case is, except for some of the parties, in no way similar to that considered by my brother Cattanach in The Attorney Gener al of Manitoba v. The National Energy Board. 10 In that matter the issue on which the applicants were successful was whether, in conducting the hearing in the manner it did, the Board had conducted the hearing it was required to con duct by section 20 of the Act. That is not alleged here.
It is desirable here to repeat the essential portions of section 44 of the Act
44. The Board may ... issue a certificate in respect of a pipeline ... if the Board is satisfied that the line is and will be required by the present and future public convenience and necessity, and, in considering an application for a cer-
9 Transcript pp. 423-4.
19 An as yet unreported decision dated August 9, 1974.
Court No. T-2669-74.
tificate, the Board shall take into account all such matters as to it appear to be relevant, and without limiting the general ity of the foregoing, the Board may have regard to ... .
There follow the five paragraphs (a) to (e) that are set out in footnote 1 hereto. The emphasis is mine.
In Canadian National Railways v. Canada Steamship Lines, Limited" the Privy Council considered a provision of The Transport Act, 1938 12 authorizing The Board of Transport Commissioners for Canada to entertain applica tions to approve and to continue or withdraw its approval of agreed charges and to fix charges in certain circumstances.
35. (13) On any application under this section, the Board shall have regard to all considerations which appear to it to be relevant and, in particular, to the effect which the making off the agreed charge or the fixing of a charge is likely to have, or has had, on,—
(a) the net revenue of the carrier; and
(b) the business of any shipper ... .
The emphasis, again, is mine. In dealing with the section their Lordships held, at page 211:
It would be difficult to conceive a wider discretion than is conferred on the board as to the considerations to which it is to have regard ... Not only is it not precluded negatively from having regard to any considerations, but it is enjoined positively to have regard to every consideration which in its opinion is relevant. So long as that discretion is exercised in good faith the decision of the board as to what consider ations are relevant would appear to be unchallengeable.
I cannot say, on the material before me, that the Board's decision to limit the scope of its inquiry during the course of the hearing was made in bad faith. It is a matter of record that, commencing September 3, the Board will hold hearings on the overall gas supply of Canada. It also appears that the gas and the facilities encompassed in the present application involve in the order of one per cent of TCPL's volume and of the value of its system. That is not to say that in changing the scope in mid-stream, the Board is not, in a practical sense, exposing itself
" [1945] A.C. 204. 12 2 Geo. V1, c. 53.
to review by appropriate proceedings in a supe rior court.
The fact that the ruling sought to be quashed is not the decision which the Board is author ized by section 44 to make but rather a ruling as to what it would consider in arriving at its decision under section 44 is crucial. No prece dent for the granting of an order in the nature of certiorari in respect of such a ruling was cited to me. There are, of course, numerous instances, such as the Globe Printing case", where a ruling made during the course of a hearing has been the basis for the quashing of the ultimate deci sion by certiorari.
In view of considerations of time of which all parties are aware, I do not intend to expand on this matter on this occasion; however, I am of the view that the opinion expressed by the Chief Justice in the penultimate and antepenultimate paragraphs of the decision of the Federal Court of Appeal in the recent Danmor Shoe case 14 , with appropriate changes, is as relevant to an application for a writ of certiorari under section 18 of the Federal Court Act 15 as to a section 28 application. Certiorari is not the appropriate remedy to deal with an interim determination such as the one in issue however appropriate it might be to deal with the final decision the Board is required to make under section 44.
Finding that the Board had the ' authority under section 44, during the course of the hear ing, to determine in good faith to narrow the scope of its inquiry, that it did act in good faith in making that determination and that an application for certiorari is inappropriate in respect of such a determination, the application is dismissed. There will be no order as to costs.
13 Toronto Newspaper Guild v. Globe Printing Company [1953] 2 S.C.R. 18.
14 In re the Anti-Dumping Act, etc. [1974] 1 F.C. 22 at pp. 30 and 31.
15 R.S.C. 1970 (2nd Supp.), c. 10.
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