Judgments

Decision Information

Decision Content

A-388-78
Canadian Pacific Limited, Canadian National Railway, Dominion Atlantic Railway, Quebec Central Railway Company and Canadian Car Demurrage Bureau (Appellants)
v.
Canadian Transport Commission and Canadian National Millers Association (Respondents)
Court of Appeal, Pratte, Ryan and Le Dain JJ.— Ottawa, March 1 and 16, 1979.
Railways — Rates — Paragraph 272(2)(b) of the Railway Act sets rates for flour moving over railway lines under federal jurisdiction to an Eastern port for export from any inland point — Whether or not the word rates in para. 272(2)(b) includes demurrage charges — Railway Act, R.S.C. 1970, c. R-2, s. 272(2)(b) — National Transportation Act, R.S.C. 1970, c. N-17, ss. 45, 64(2).
This is an appeal under section 64(2) of the National Trans portation Act from an order made by the Railway Transport Committee of the Canadian Transportation Commission in the exercise of its authority under section 45 of the Act, and requiring appellants to implement a decision of the Committee concerning demurrage charges. The issue is whether or not the word "rates" in paragraph 272(2)(b) of the Railway Act which sets the rates for flour moving over a railway line under federal jurisdiction to an Eastern port for export from any inland point, includes demurrage charges.
Held, (Pratte J. dissenting) the appeal is dismissed. Demur- rage is sufficiently related to the transportation of goods to be part of the rates in respect of the movement of goods within the meaning of section 272. The function of the words "moving" and "movement" in section 272 is to serve as part of the description of the kind of traffic contemplated, and not as indicating the kind of rates contemplated. The cost of detention time, whether free time or time for which demurrage may be charged, must be taken into account by the Commission in performing its functions under sections 276 and 277 and that cost will be reflected in the rates which will be determined by it to be compensatory. Thus the reference in subsection 272(3) to sections 276 and 277 is not a reason for concluding that demurrage is not contemplated by the word "rates". The fact that section 274 uses the word "rate" in its denomination and definition of the first three kinds of freight tariff referred to but does not use the word "rate" in the denomination and definition of special arrangements is not a conclusive circumstance. The definition of "rate" in section 2 is to include charges that may not ordinarily be referred to as rates. The nomenclature used in section 274 cannot be a ground for displacing that definition.
Per Pratte J. dissenting: The word "rates" in paragraph 272(2)(b) of the Railway Act does not include demurrage charges. The words "rates on flour", when one knows that there are special rates applying to that commodity, normally evoke
the idea of those special rates which do not include demurrage charges. Moreover, the phrases "rates on flour moving" and "rates applying ... to the movement of such flour" are obvious ly apt to refer to the normal charges for the transportation of flour, but they do not include in their meaning demurrage charges because those charges cannot be said to be charges "applying ... to the movement" of flour. It was not Parlia ment's intention to subsidize the payment of demurrage charges which are not normally incurred without the fault of the shipper or the consignee.
The North-West Line Elevators Association v. Canadian Pacific Railway Company [1959] S.C.R. 239, distin guished.
APPEAL. COUNSEL:
T. J. Moloney and David W. Flicker for appellants Canadian Pacific Limited, Domin ion Atlantic Railway, Quebec Central Rail way Company and Canadian Car Demurrage Bureau.
H. J. G. Pye, Q.C. for appellant Canadian National Railway.
M. E. Rothstein, Q.C. and J. E. Foran for respondent Canadian National Millers Asso ciation.
No one appearing for respondent Canadian Transport Commission.
SOLICITORS:
Canadian Pacific Law Department, Montreal, for appellants Canadian Pacific Limited, Dominion Atlantic Railway, Quebec Central Railway Company and Canadian Car Demur- rage Bureau.
Canadian National Railway Company Law Department, Montreal, for appellant Canadi- an National Railway.
Aikins, MacAulay & Thorvaldson, Win- nipeg, for respondent Canadian National Millers Association.
Canadian Transport Commission Legal Ser vices, Ottawa, for respondent Canadian Transport Commission.
The following are the reasons for judgment rendered in English by
PRATTE J. (dissenting): I have had the occasion to read the reasons for judgment of my brother Le
Dain. I regret not to be able to share his conclu sion that the word "rates" in paragraph (b) of subsection 272(2) of the Railway Act, R.S.C. 1970, c. R-2, includes demurrage charges; in my view, it does not.
As stated by Rand J. in The North-West Line Elevators Association v. Canadian Pacific Rail way Co.,' demurrage charges "are concerned with the unreasonable detention of railway equipment." The parties have agreed, for the purposes of these proceedings, that demurrage could be defined as:
A charge made by the Railways for the detention of a freight car beyond the free time provided for by the applicable special arrangements tariffs and is intended as an inducement to promptly release the freight car, and alternatively, to compen sate partially the Railways, should the freight car be detained beyond the free time allowance.
Demurrage charges are provided for in "special arrangements tariffs". 2 Those tariffs determine, first, the length of the "free time", which is the time during which a freight car may be detained without charge after it has reached its destination, and, second, the amount per day that will have to be paid to the railway company for the retention of the car beyond the free time. Demurrage rates do not normally vary according to the nature of the goods carried and, in any event, there are no special demurrage rates for flour or grain. By contrast, the rates provided for in "commodity rate tariffs", which represent the normal charges for
I [1959] S.C.R. 239 at 244.
2 Section 274 of the Railway Act enumerates and defines the four kinds of tariffs that railway companies are authorized to issue. Only two of those need retain our attention: the "com- modity rate tariffs" and the "special arrangements tariffs" which are defined as follows in subsections 274(3) and (5):
274... .
(3) A commodity rate is a rate applicable to an article
described or named in the tariff containing the rate.
(5) Special arrangements are charges, allowances, absorp- tions, rules and regulations respecting demurrage, protection, storage, switching, elevation, cartage, loading, unloading, weighing, diversion and all other accessorial or special arrangements that in any way increase or decrease the charges to be paid on any shipment or that increase or decrease the value of the service provided by the company.
the transportation of a commodity between two points, obviously vary with the nature of the com modity. There are special commodity rates for flour and grain which are expressed in terms of cents "per 100 pounds".
Section 272(2)(b) prescribes that "rates on flour moving for export to an Eastern port . .. shall be maintained at the level of rates applying on the 30th day of September 1966 to the movement of such flour to Eastern ports."
In my view, the words "rates on flour", when one knows that there are special rates applying to that commodity, normally evoke the idea of those special rates which do not include demurrage charges. Moreover, the phrases "rates on flour moving" and "rates applying ... to the movement of such flour" are obviously apt to refer to the normal charges for the transportation of flour but they do not, in my view, include in their meaning demurrage charges because those charges cannot be said to be charges "applying ... to the move ment" of flour.
For those reasons, I cannot read section 272(2)(b) as referring to demurrage charges. Two other considerations support that conclusion.
In enacting section 272, Parliament expressed its intention to subsidize the cost of transportation of grain and flour from Central Canada to the Eastern ports. I cannot accept the view that it was also Parliament's intention to subsidize the pay ment of demurrage charges which are not normal ly incurred without the fault of the shipper or the consignee.
Finally, I cannot conceive that the draftsman of sections 271 and 272, which were both enacted at the same time a few years after the decision of the Supreme Court in North-West Line Elevators Association, used the same phrase, "rates on flour moving", with a different meaning in the two sections.
For those reasons, I would allow the appeal.
The following are the reasons for judgment rendered in English by
LE DAIN J.: This is an appeal under section 64(2) of the National Transportation Act, R.S.C. 1970, c. N-17, from Order No. R-26862, dated May 16, 1978, made by the Railway Transport Committee of the Canadian Transport Commis sion in the exercise of its authority under section 45 of the Act, and requiring the appellants to implement a decision of the Committee dated April 21, 1978 as follows:
(1) The Respondents shall implement the Decision by filing amendments to the Canadian Car Demurrage Rules which will restore demurrage charges at other than origin points, on movements of export flour, to the levels effective on September 30, 1966, pursuant to the provisions of Section 272 of the Railway Act.
(2) The Respondents shall revise all demurrage accounts on movements of export flour, submitted to the applicants from September 1, 1969 and subsequently, to reflect the demurrage charges at other than origin points that were in effect on September 30, 1966.
(3) Respondents may file revised subsidy claims after the Committee has determined and published compensatory demurrage rate levels, pursuant to the provisions of Section 272 of the Railway Act.
The issue on the appeal is whether the word "rates" in paragraph (b) of subsection 272(2) of the Railway Act, R.S.C. 1970, c. R-2, includes demurrage charges. Because of the nature of the arguments it is necessary to set out section 272 in full. It reads:
272. (1) In this section
"Eastern port" means any of the ports of Halifax, Saint John, West Saint John and Montreal and any of the ports on the St. Lawrence River to the east of Montreal;
"Eastern rates" means,
(a) in relation to grain, the freight rates applying on the 30th day of November 1960 to the movement of grain in bulk for export from any inland point to an Eastern port, and
(b) in relation to flour, the freight rates applying on the 30th day of September 1966 to the movement of flour for export from any inland point to an Eastern port;
"flour" means flour milled from grain;
"grain" means the commodities referred to in paragraph (6) of
Order No. 121416 of the Board of Transport Commissioners
• for Canada dated the 18th day of July 1966;
"inland point" means,
(a) in relation to grain, any of the railway points along
Georgian Bay, along Lake Huron or along any waterways
directly or indirectly connecting with Lake Huron and not
being farther east than Prescott, but including Prescott, and
(b) in relation to flour, any point in Canada east of the 90th degree of west longitude.
(2) For the purpose of encouraging the continued use of the Eastern ports for the export of grain and flour,
(a) rates for grain moving in bulk for export to any Eastern port from any inland point over any line of a railway company subject to the jurisdiction of Parliament shall be maintained at the level of rates applying on the 30th day of November 1960 to the movement of such grain to Eastern ports; and
(b) rates on flour moving for export to an Eastern port from any inland point over any line of a railway company subject to the jurisdiction of Parliament shall be maintained at the level of rates applying on the 30th day of September 1966 to the movement of such flour to Eastern ports.
(3) The Commission shall from time to time determine in respect of
(a) the movement of grain in bulk for export, and
(b) the movement of flour for export,
by railway to an Eastern port from an inland point a level of rates consistent with sections 276 and 277 and shall cause such rates to be published in the Canada Gazette.
(4) The Governor in Council may, on the recommendation of the Commission, authorize the Minister of Finance to pay out of the Consolidated Revenue Fund to a railway company under the jurisdiction of Parliament that carries at Eastern rates grain moving in bulk for export to an Eastern port from an inland point, or flour moving for export from an inland point to an Eastern port, when the Eastern rates for such grain or flour, as the case may be, are less than the rates determined and published by the Commission under subsection (3), an amount equal to the difference between
(a) the total amount received by the company in respect of that year for the carriage of such grain or flour, and
(b) the total amount that the company would have received in respect of that year had the grain or flour been carried at the rates determined and published by the Commission under subsection (3) instead of at the Eastern rates.
(5) Until such time as the Commission determines and publishes a level of rates under subsection (3),
(a) the railway proportions of rates for the movement of grain in bulk for export from an inland point to an Eastern port that have been filed by a railway company with the Board of Transport Commissioners for Canada in accord ance with paragraph 2 of Order No. 103860 of that Board dated February 23rd, 1961, and that have been approved by that Board shall be deemed to be the rates determined and published by the Commission under subsection (3); and
(b) the rates applying on the 30th day of September 1966 for the movement of flour for export from an inland point to an Eastern port shall be deemed to be the rates determined and published by the Commission under subsection (3).
The proceedings which resulted in the decision and the order of the Committee were initiated by an application brought by Canadian National Millers Association, which, according to the state ment of Agreed facts filed by the parties in the proceedings before the Committee, represents flour millers in Canada who ship flour for export by rail to Eastern ports from inland points. The statement of agreed facts indicates that Canadian Pacific Limited, Canadian National Railway Company, Dominion Atlantic Railway and Quebec Central Railway Company are railway companies subject to the jurisdiction of Parliament which carry flour for export by rail to Eastern ports from inland points on behalf of the members of the Association, and that the Canadian Car Demurrage Bureau acts as an agent of the appel lant railways for the purpose of publishing tariffs respecting demurrage on domestic movements of all commodities and of ensuring that the provisions of all demurrage tariffs are complied with.
The application of the Association to the Com mission was made on February 4, 1970 pursuant to section 33 of the Railway Act, R.S.C. 1952, c. 234, which was replaced by section 45 of the National Transportation Act, and it was based on section 329 of the Railway Act, now section 272. What the application sought is described in the decision of the Railway Transport Committee as follows:
What Applicant has asked for in the present case is a direction from the Railway Transport Committee to Respond ents, requiring revision of applicable tariffs to reduce demur- rage charged on flour moving for export from inland points to Eastern ports (as those terms are defined in Section 272 of the Railway Act) from their present levels to $5.00 per car per day, after applicable free time allowances, $5.00 being the amount of demurrage charged on September 30, 1966. The demurrage charges in question are those which have arisen at destinations, not points of origin.
Upon receipt of the application the Commission, pursuant to section 81(1) of the National Trans portation Act, appointed Mr. Donald J. Murphy, one of its senior counsel, to make an inquiry into and report upon the application. Mr. Murphy heard the parties upon the basis of the statement of agreed facts and reported to the Railway Trans port Committee. After outlining the arguments of the parties in very full detail Mr. Murphy conclud-
ed that the word "rates" in section 272 of the Railway Act did not include demurrage charges, and he accordingly recommended that the applica tion be dismissed. The Committee, after receiving written submissions from the parties in response to Mr. Murphy's report, came to a contrary view.
The Railway Act contains in section 2 a defini tion of "rate" that includes demurrage charges as follows:
2....
"toll" or "rate", when used with reference to a railway,
(a) means any toll, rate, charge or allowance charged or made either by the company, or upon or in respect of a railway owned or operated by the company, or by any person on behalf or under authority or consent of the company, in connection with the carriage and transportation of passen gers, or the carriage, shipment, transportation, care, handling or delivery of goods, or for any service incidental to the business of a carrier; and
(b) includes
(i) any toll, rate, charge or allowance so charged or made in connection with rolling stock, or the use thereof, or any instrumentality or facility of carriage, shipment or trans portation, irrespective of ownership or of any contract, expressed or implied, with respect to the use thereof;
(ii) any toll, rate, charge or allowance so charged or made for furnishing passengers with beds or berths upon sleeping cars, or for the collection, receipt, loading, unloading, stopping over, elevation, ventilation, refrigerating, icing, heating, switching, ferriage, cartage, storage, care, han dling or delivery of, or in respect of, goods transported, or in transit, or to be transported; and
(iii) any toll, rate, charge or allowance so charged or made for the warehousing of goods, wharfage or demurrage, or the like, or so charged or made in connection with any one or more of the above-mentioned objects, separately or conjointly;
The question is why that definition should not be applied to the interpretation of the word "rates" in section 272. It is argued by the appellants that the meaning which should be given to that word, in so far as demurrage is concerned, has been indicat ed by the decision of the Supreme Court of Canada in The North-West Line Elevators Asso ciation v. Canadian Pacific Railway Company [1959] S.C.R. 239, and that it finds further sup port in the context of section 272. The respondents contend that the North-West Line Elevators case
is not applicable, and, further, that the context of section 272 affords no reason for not applying the definition of "rate" in section 2 of the Act. The first view was that preferred by Mr. Murphy; the second is essentially the view taken by the Com mittee. The importance assumed by the North West Line Elevators case in relation to the issues requires that it be considered now.
All are agreed on the general principle of inter pretation that was affirmed by Rand J., who deliv ered the judgment of the Court in that case, when he said at pages 244-245:
The present definition of "toll" or "rate" in the Railway Act appears to be comprehensive enough to extend to charges for every service or accommodation that can be furnished in respect of freight and passenger carriage. But in particular applications the scope of either word will depend upon the sense indicated by the context. This is the case whenever we are dealing with broad and general definitions enumerative of a number of differing applications of the same word or words.
The question is whether what was concluded on the basis of the particular context in that case has any application to the interpretation of the word "rates" in section 272. That case involved as one of its issues whether the word "rates" included demurrage charges but the context of the word which was held to give it a meaning that excluded such charges despite the definition of "toll" or "rate" in section 2(32) of the Railway Act, R.S.C. 1952, c. 234, was that provided by section 328(6) of the Act, which read:
328....
(6) Notwithstanding anything in subsection (5), rates on grain and flour shall, on and from the 27th day of June, 1925, be governed by the provisions of the agreement made pursuant to chapter 5 of the statutes of Canada 1897, but such rates shall apply to all such traffic moving from all points on all lines of railway west of Fort William to Fort William or Port Arthur over all lines now or hereafter constructed by any company subject to the jurisdiction of Parliament.
The agreement referred to in this subsection is what is known as the Crow's Nest Pass Agree ment. It is the provisions of this agreement that provided the context from which Rand J. drew his conclusion as to the meaning of the words "rates on grain and flour" in section 328(6). His analysis
of this question is contained in the following pas sages at pages 243-244 of the judgment:
The Crow's Nest Pass Act, c. 5, Statutes of Canada, 1897, provides a subsidy to the Canadian Pacific Railway on certain conditions. One was that an agreement between the Dominion government and the company should be entered into contain ing, among others, two covenants: first, "that a reduction shall be made in the general rates and tolls of the Company as now charged" upon certain classes of merchandise carried west bound from and including Fort William to all points west on the company's main line or to those points from any railway in Canada owned or operated on the account of the company and whether shipped by all rail or by lake and rail. These classes included fruits, reduced 33 1/3 per cent., coal oil, 20 per cent., cordage and binder twine, agricultural implements, iron of all kinds, wire, window glass, paper for building or roofing, felt for roofing, paints, oils, livestock, wooden ware and household furniture, the reduction on which was 10 per cent. The second covenant was that on eastbound grain and flour,
... there shall be a reduction in the Company's present rates and tolls on grain and flour from all points on its main line, branches, or connections, west of Fort William to Fort William and Port Arthur and all points east, of three cents per one hundred pounds, to take effect in the following manner:—...; and that no higher rates than such reduced rates or tolls shall be charged after the dates mentioned on such merchandise from the points aforesaid;
The purpose behind these two provisions is obvious; it was to extend to the army of settlers then beginning to people the west under a policy of broad dimensions a measure of assistance in reducing the transportation costs of commodities in the nature of necessities to the settlers and of what was expected to be their primary production.
An examination of this language shows unequivocally that what were in mind were the rates payable for transportation strictly, "general rates and tolls", rates which were expressed in terms of cents "per 100 pounds". These were the normal charges for the carriage of commodities between points. In the ordinary and uncomplicated case no other charges arise. They have nothing to do with incidental charges to meet circum stances not normal for which special terms are provided; they refer to charges payable when the basic service is furnished along with the correlative observance of the reasonable require ments laid upon the shippers and consignees. They do not include demurrage charges; these are not related to the weight of the commodity; they are concerned with the unreasonable detention of railway equipment.
The language of s. 328(6) that "rates on grain and flour shall be governed by the provisions of the Crow's Nest Pass Act" uses the words in the same sense, the anomalies resulting from any other interpretation of which are too obvious to be considered.
In 1967, by section 50 of the National Trans portation Act, S.C. 1966-67, c. 69, Parliament
replaced section 328 of the Railway Act by a new section 328, subsection (1) of which corresponded, with altered wording, to the old subsection (6), which was the subject of interpretation in the North-West Line Elevators case. The new section 328 became section 271 of chapter R-2 of the Revised Statutes of 1970. It reads:
271. (1) Rates on grain and flour moving from any point on any line of railway west of Thunder Bay to Thunder Bay, over any line of railway now or hereafter constructed by any com pany that is subject to the jurisdiction of Parliament, shall be governed by the provisions of the agreement made pursuant to chapter 5 of the Statutes of Canada, 1897.
(2) Rates on grain and flour moving from any point on any line of railway west of Thunder Bay to Vancouver or Prince Rupert for export over any line of railway now or hereafter constructed by any company that is subject to the jurisdiction of Parliament shall be governed by the provisions of paragraph 2 of General Order No. 448 of the Board of Railway Commissioners for Canada dated Friday the 26th day of August 1927.
(3) Rates on grain and flour moving for export from any point west of Thunder Bay or Armstrong to Churchill over any line of railway of any company that is subject to the jurisdiction of Parliament shall be maintained at the level of rates applying on the 31st day of December 1966.
(4) Notwithstanding section 3, this section is not limited or in any manner affected by any Act of the Parliament of Canada, or by any agreement made or entered into pursuant thereto, whether general in application or special or relating only to any specific railway or railways.
At the same time and by the same statutory provision in 1967 Parliament enacted a new sec tion 329 of the Railway Act, which became the present section 272.
It is argued from these legislative developments that in enacting sections 328 and 329 together in 1967 with the broadly similar purpose of maintain ing freight rates at certain levels in order to encourage certain public interests, Parliament must have intended that the expression "rates on flour moving" in section 272(2)(b) should be given the same meaning, in so far as demurrage charges are concerned, as was given to the words "rates on grain and flour" in section 328(6) of the Railway Act in the North-West Line Elevators case. This is an attractive proposition but I find myself unable to accede to it. It breaks down, I think, on the fact
that the words construed in that case were not the words "rates on grain or flour" standing alone in a provision for maintaining freight rates at certain levels in the interest of western settlement but rates on grain and flour to be governed by the provisions of the Crow's Nest Pass Agreement. It is perfectly clear, I think, from the reasons of Rand J., which were quoted above, that his conclu sion turned on the particular wording of those provisions as indicating the kind of rates contem plated. The North-West Line Elevators case no doubt indicates the meaning that must be given to the words "rates on grain and flour moving" in subsection 271(1), in so far as demurrage is con cerned, and logically perhaps to the same words in the other subsections of section 271. But the words "rates on flour moving" in section 272(2)(b) are not qualified by any such reference to the provi sions of the Crow's Nest Pass Agreement. There is not the same context, and therefore, no basis, I think for ascribing to Parliament an intention that they should have the same meaning in so far as demurrage charges are concerned as was given to rates on grain or flour governed by the provisions of the Crow's Nest Pass Agreement in the North West Line Elevators case. There is in my opinion a further circumstance which distinguishes that case. In that case the issue was whether the rail way was to receive any compensation at all for demurrage. In section 272 there is provision for financial assistance to compensate the railways for any short-fall in revenues as a result of compliance with section 272(2)(b). The broad similarity of purpose must not obscure the specific differences in the two provisions. The specific purpose of section 272 is not that of section 271; it is, as the opening words of subsection (2) indicate, to encourage the continued use of the Eastern ports for the export of grain and flour. No doubt this purpose has its own peculiar history. Perhaps demurrage has particular significance in connec tion with traffic moving to the Eastern ports. In view of the absence in section 272 of the particular context on which the decision in the North-West Line Elevators was based, as well as other differ ences between the two sections, I do not think we can assume, merely from the existence of that decision, that Parliament intended that the words "rates on flour moving" in section 272(2)(b) should not include demurrage charges.
If the meaning of the word "rates" in section 272 is not determined by the decision in the North-West Line Elevators case it is necessary to consider, on the general principle affirmed in that case, whether the context of the word "rates" in section 272 makes the definition of "rate" in sec tion 2 so as to include demurrage charges inappli cable. I agree with the conclusion of the Railway Transport Committee that there is nothing in the context which obliges us to take such a view. Two main arguments were advanced to support such a view: the first was based on the words "moving" and "movement" in section 272, and the second was based on the requirement in subsection 272(3) that the Commission determine in respect of the movement of flour for export a level of rates "consistent with sections 276 and 277".
The argument based on the words "moving" and "movement" was that these words indicated that what was contemplated were rates for the trans portation of the flour, strictly speaking, and not for the detention of cars beyond the free time allowed for unloading. This argument found favour with Mr. Murphy. The Committee's reasons for reject ing it are reflected in the following passages from its decision:
When flour is to move from an inland point to an Eastern port, it does so, like any other commodity, in a railway car, and in accordance with the terms and conditions of the contract of carriage, which include those contained in the bill of lading. It also does so in accordance with the tariffs in effect on Septem- ber 30, 1966. This means that once loaded, the car will be hauled to destination and will be placed at the point of delivery for unloading. According to the applicable Special Arrange ments tariff and Commodity Rate tariff, demurrage charges will not begin to accrue until after the expiration of 10 days from the date of placement of the car for unloading and the transportation charges include both the hauling and placement of the car and the 10 day period specified for unloading. During that 10 day period the car will not be in motion.
It follows that demurrage cannot accrue except in relation to a road haul from origin to destination, and that the tariffs containing the line haul rates and the tariffs containing the free time rules and the demurrage charges are inextricably linked.
As Respondents' own demurrage Rules themselves demon strate, delay at point of origin beyond the time fixed for the commencement of the transportation service, or road haul, gives rise to liability for demurrage. Were it to be otherwise, at point of origin the absurd situation would exist of a railway company placing a car for loading with no transportation or road haul being contemplated, all of which would be completely contrary to its business purpose. It is equally clear from Respondents' demurrage Rules that the transportation charge (or freight rate) comprises not only the movement of the loaded car from point of origin, but also the prescribed loading time, which commences with placement or constructive placement.
It also follows that the stoppage of the car has nothing to do with the applicability of the demurrage tariff. Since, therefore, Section 272 of the Act must be read with Section 274, the use of the word "movement" does not exclude demurrage from Eastern rates.
I agree with the conclusion of the Committee that demurrage is sufficiently related to the trans portation of goods to be part of the rates in respect of the movement of goods within the meaning of section 272. The function of the words "moving" and "movement" in section 272, in my opinion, is to serve as part of the description of the kind of traffic contemplated, and not as indicating the kind of rates contemplated. I find it particularly persuasive that section 274, to which the Commit tee refers, includes special arrangements tariffs, which provide for demurrage, in the tariffs "for the carriage of goods" as follows:
274. (1) The tariffs of tolls that the company is authorized to issue under this Act for the carriage of goods between points on the railway are
(a) class rate tariffs;
(b) commodity rate tariffs;
(c) competitive rate tariffs; and
(d) special arrangements tariffs.
(2) A class rate is a rate applicable to a class rating to which articles are assigned in the freight classification.
(3) A commodity rate is a rate applicable to an article described or named in the tariff containing the rate.
(4) A competitive rate is a class or commodity rate that is issued to meet competition.
(5) Special arrangements are charges, allowances, absorp- tions, rules and regulations respecting demurrage, protection,
storage, switching, elevation, cartage, loading, unloading, weighing, diversion and all other accessorial or special arrange ments that in any way increase or decrease the charges to be paid on any shipment or that increase or decrease the value of the service provided by the company.
The second argument, as I understood it, was that demurrage could not be the subject of the determination of variable costs and compensatory rates, under sections 276 and 277, and thus could not have been contemplated as being included in the word "rates" in section 272. The Committee rejected this argument as well. It chose to express its reasons by a quotation from Mr. Murphy's summary of the argument before him which I confess I find somewhat cryptic. My understand ing, however, is that the cost of detention time, whether free time or time for which demurrage may be charged, must be taken into account by the Commission in performing its functions under sec tions 276 and 277 and that cost will be reflected in the rates which will be determined by it to be compensatory. Thus the reference in subsection 272(3) to sections 276 and 277 is not a reason for concluding that demurrage is not contemplated by the word "rates". I accept that view.
A further argument was advanced before us to which reference was not made by the Committee. It was based on the fact that section 274 uses the word "rate" in its denomination and definition of the first three kinds of freight tariff referred to but does not use the word "rate" in the denomination and definition of special arrangements. This cir cumstance, although interesting, cannot in my opinion be conclusive. The whole point of the definition of "rate" in section 2 of the Act is that it is to include charges that may not ordinarily be referred to as "rates". The nomenclature employed in section 274 cannot be a ground for displacing this effect of the definition. Further, to attach such an effect to the language used in section 274 would be to exclude special arrangements tariffs from the application of sections 276 and 277. That cannot have been intended.
It was suggested, as a matter of policy, that Parliament could not have intended to provide financial assistance to maintain demurrage rates at
1966 levels since that would be a measure directly opposed to the avowed object of encouraging the continued use of the Eastern ports for the export of grain and flour. I am unable to feel the force of this argument. Inasmuch as detention beyond the free time allowance will in some circumstances be unavoidable and as such will be part of the total cost of shipping flour through the Eastern ports, it may be presumed that it can have a bearing on the decision to resort to such shipment.
For these reasons I am of the opinion that the Commission did not err in law and I would accord ingly dismiss the appeal.
* * *
RYAN J.: I concur.
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