A-122-80
Rudy Kiist and Donald Robertson, on their own
behalf and on behalf of each and every other
holder of a permit book issued by The Canadian
Wheat Board pursuant to the provisions of section
19 of the Canadian Wheat Board Act, R.S.C.
1970, c. C-12 as amended, for the 1977-78 and
1978-79 crop years (Appellants) (Plaintiffs)
v.
Canadian Pacific Railway Company, Canadian
National Railway Company and The Canadian
Wheat Board (Respondents) (Defendants)
Court of Appeal, Urie and Le Dain JJ. and
Maguire D.J.—Saskatoon, November 18 and 19,
1980; Ottawa, April 28, 1981.
Practice — Motion to strike pleadings — Appeal from Trial
Division decision striking out appellants' statement of claim
and dismissing the action — Appellants' claim for damages
based on breach of statutory duty by respondent railways to
furnish adequate accommodation for the transport of grain
Whether this Court has jurisdiction to entertain the action in
damages — Whether this Court has jurisdiction to make a
determination with respect to suitable accommodation
Whether appellants are persons aggrieved — Whether action is
a class action — Whether The Canadian Wheat Board is a
proper party — Railway Act, R.S.C. 1970, c. R-2, ss. 262(1),
(2),(3),(6),(7),(8), 336 — Canadian Wheat Board Act, R.S.C.
1970, c. C-12, ss. 4(4), 5(1), 17, 18, 19, 21(k), 25(1)(a),(b),(c),
26(1),(2),(5), 28(1) — Canada Grain Act, S.C. 1970-71-72, c.
7, s. 97(b) — National Transportation Act, R.S.C. 1970, c.
N-17, ss. 48, 56(3), 58 — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 23 — Canadian Wheat Board Regulations,
C.R.C. 1978, Vol. IV, c. 397, s. 12 — Available Railway Cars
Administration Order, SOR/71-92, s. 3 — Federal Court Rule
1711.
This is an appeal from a judgment of the Trial Division
striking out the statement of claim and dismissing the action in
damages of the appellants against the respondent railways for
alleged breach of the duty created by section 262 of the
Railway Act, to provide adequate accommodation for the
transport of grain. The Trial Division held that the statement of
claim did not disclose a reasonable cause of action and that in
any event the Court was without jurisdiction to entertain the
action. The appellants are grain producers, entitled to deliver
certain amounts of grain to the elevators, as prescribed by
permit books issued by The Canadian Wheat Board. The issues
are as follows: (1) whether jurisdiction with respect to an action
in damages for the failure to comply with section 262 of the
Railway Act has to any extent been "specially assigned" to
another tribunal, i.e. the Canadian Transport Commission by
virtue of section 58 of the National Transportation Act; (2)
whether this Court has jurisdiction to determine whether suit
able accommodation was furnished; (3) whether appellants are
persons aggrieved within the meaning of section 262(7) of the
Railway Act; (4) whether the action is properly constituted as a
class action as provided by Rule 1711; and (5) whether The
Canadian Wheat Board is a necessary and proper party.
Held, the appeal is dismissed. Section 58 of the National
Transportation Act is not sufficiently clear to have the effect of
transferring the jurisdiction to award damages for breach of the
duty created by section 262 of the Railway Act from the courts
to the Commission. Whereas section 262 expressly confers
particular kinds of jurisdiction on the Commission in subsec
tions (3),(6) and (8), it is silent as to where the right of
"action" for damages created by subsection (7) is to be exer
cised. Moreover, a distinction is made in subsection (8) between
"charges", which may be imposed by the Commission, and
"damages" the award of which is not clearly assigned to the
Commission. The question whether there has been a failure to
provide adequate and suitable accommodation is a question of
fact with respect to which the Commission has been assigned
jurisdiction by section 262(3) and on which its decision is made
binding and conclusive by section 56(3) of the National Trans
portation Act. The duty under section 262(1)(a) is a duty owed
to one who offers goods for carriage." Grain is sold and delivered
by individual producers to the Board at primary elevators or
railway cars where ownership of it passes by operation of the
statute to the Board and it becomes mixed with other grain. It
is the Board that makes the necessary arrangements with the
railways for transportation of the grain sold by it. Where there
is no way that the railways can foresee the impact on the
individual producer of a particular failure to provide adequate
accommodation in the carriage of grain for the Board there can
be no basis for a duty to him. The action is not properly
constituted as a class action under Rule 1711. It is clear that
the right of the individual producer would depend on the
particular circumstances of his case, and that there would be
the possibility of different defences based on such circum
stances. Finally, the appellants do not have standing to bring a
derivative action to enforce the rights of the Board. Neither
would the Board have statutory authority, nor could it be
properly compelled by a court, to distribute damages payable to
it to the holders of permit books.
Duthie v. Grand Trunk R. W. Co. (1905) 4 Can. Ry. Cas.
304, applied. Robinson v. Canadian Northern Ry. (1910)
19 Man. L.R. 300; affd. (1910) 43 S.C.R. 387 and [1911]
A.C. 739, applied. The Grand Trunk Railway Co. of
Canada v. McKay (1904) 34 S.C.R. 81, applied. The
Grand Trunk Railway Co. of Canada v. Perrault (1905)
36 S.C.R. 671, applied. Meagher v. Canadian Pacific
Railway Co. (1912) 42 N.B.R. 46, applied. A. L. Patchett
& Sons Ltd. v. Pacific Great Eastern Railway Co. [1959]
S.C.R. 271, discussed. The Bell Telephone Co. of Canada
v. Harding Communications Ltd. [1979] 1 S.C.R. 395,
considered. Canadian National Railway Co. v. Harris
[1946] S.C.R. 352, referred to. Naken v. General Motors
of Canada Ltd. (1979) 92 D.L.R. (3d) 100 (Ont. C.A.),
referred to.
APPEAL.
COUNSEL:
A. E. Golden, Q.C. and D. Starkman for
appellants (plaintiffs).
N. Mullins, Q.C. and T. J. Moloney for re
spondent (defendant) Canadian Pacific Rail
way Company.
L. L. Band and G. Poppe for respondent
(defendant) Canadian National Railway
Company.
H. B. Monk, Q.C. and D. S. Sagoo for re
spondent (defendant) The Canadian Wheat
Board.
SOLICITORS:
Golden, Levinson, Toronto, for appellants
(plaintiffs).
Canadian Pacific Railway Company Law
Department, Montreal, for respondent
(defendant) Canadian Pacific Railway Com
pany.
Canadian National Railway Company Law
Department, Montreal, for respondent
(defendant) Canadian National Railway
Company.
The Canadian Wheat Board Legal Depart
ment, Winnipeg, for respondent (defendant)
The Canadian Wheat Board.
The following are the reasons for judgment
rendered in English by
LE DAIN J.: This is an appeal from a judgment
of the Trial Division [[1980] 2 F.C. 650] striking
out the statement of claim and dismissing the
action in damages of the appellants against the
respondent railways for alleged breach of the duty
created by section 262 of the Railway Act, R.S.C.
1970, c. R-2, to provide adequate accommodation
for the transport of grain during the crop years
1977-1978 and 1978-1979 on the grounds that the
statement of claim does not disclose a reasonable
cause of action and that in any event the Court is
without jurisdiction to entertain the action.
As indicated by the style of cause and paragraph
1 of the statement of claim, the action purports to
be a class action brought by the appellants Kiist
and Robertson on their own behalf and on behalf
of all other producers of wheat and barley who
were holders of permit books issued by The
Canadian Wheat Board pursuant to the Canadian
Wheat Board Act, R.S.C. 1970, c. C-12, and who
were thereby entitled to deliver grain in accord
ance with the provisions of the Act during the crop
years in question. The action claims, as the dam
ages suffered by the class, the loss of revenue and
additional expense caused to the Board by the
alleged failure of the respondent railways to pro
vide adequate accommodation for the carriage of
grain, and it concludes that the damages be paid to
the Board "to be dealt with", or in other words,
distributed to the appellants, "according to the
lawful and appropriate procedures established by
it."
Under the Canadian Wheat Board Act grain in
interprovincial and export trade must be marketed
through the Board: sections 4(4), 5(1) and 33. The
Board acquires ownership of the grain delivered by
producers: sections 5(1) and 25(1)(a). Producers
sell their grain to the Board in accordance with
quotas established by it. A producer is entitled to a
permit book, or delivery permit, from the Board
which authorizes the delivery to the Board of grain
produced on land described in the permit book:
section 19. The precise extent of land from which
particular grain may be delivered is referred to as
"quota acres", and the quantity of grain which
may be delivered is determined by the Board from
time to time in the form of quotas: sections 2(1)
and 21(f). Delivery by producers to the Board at
elevators and railway cars must not exceed that
which is authorized by the permit books and
quotas: sections 17 and 18.
Permit books are issued, quotas are established,
and delivery and payment are made in respect of a
crop year. A crop year is defined by section 2(5) of
the Canada Grain Act, S.C. 1970-71-72, c. 7, as
the period from August 1st in one year to July 31st
in the following year. That definition is made
applicable to the Canadian Wheat Board Act by
section 2(2) thereof.
The provisions of Parts III and IV of the
Canadian Wheat Board Act refer to wheat, but
they are also made applicable to oats and barley
by section 9 of the Canadian Wheat Board Regu
lations, C.R.C. 1978, Vol. IV, c. 397, which was
adopted by the Governor in Council pursuant to
section 35 of the Act.
In payment for the grain sold and delivered to
the Board at an elevator or railway car, the pro
ducer receives from the Board an initial sum,
referred to as a "sum certain": section 25(1)(b).
The Board issues a certificate to the producer
which entitles him to share in the equitable distri
bution of any surplus which is realized by the
Board, after deduction of expenses, from the sale
of grain in a crop year. This certificate is provided
for by section 25(1)(c) as follows:
25. (1) The Board shall undertake the marketing of wheat
produced in the designated area in interprovincial and export
trade and for such purpose shall
(c) issue to a producer, who sells and delivers wheat pro
duced in the designated area to the Board, a certificate
indicating the number of tonnes purchased and delivered and
the grade thereof, which certificates entitle the producer
named therein to share in the equitable distribution of the
surplus, if any, arising from the operations of the Board with
regard to the wheat produced in the designated area sold and
delivered to the Board during the same pool period.
"Pool period" is defined by section 24 of the Act
as meaning a crop year.
The form of certificate prescribed by section 12
of the Canadian Wheat Board Regulations, pursu
ant to section 28 (1) of the Act, and set out in the
Schedule to the Regulations, provides in part as
follows:
Upon surrender, if required by the Board, this Certificate
entitles the Producer named herein to share in the distribution
of the surplus, if any, arising from the operations of the Board
with regard to the wheat, oats or barley referred to herein
produced in the designated area sold and delivered to the Board
during the pool period in which this Certificate was issued,
pursuant to the terms of The Canadian Wheat Board Act.
The determination and distribution of the sur
plus are provided for by section 26 of the Act.
Subsection (1) thereof provides for the deductions
to be made by the Board from the total amount
received by it in payment for grain sold by it
during a pool period. Subsections (2) and (5)
provide for the distribution of the resulting surplus
as follows:
26....
(2) The Board shall, on or after the 1st day of January of the
year commencing after the end of any pool period, distribute
the balance remaining in its account in respect of wheat
produced in the designated area purchased by it from producers
during the pool period, after making the deductions therefrom
provided for in subsection (1), among holders of certificates
issued by the Board pursuant to this Part during the pool
period, by paying upon surrender to it of each such certificate,
unless the Board by order waives such surrender, to the person
named therein, the appropriate sum determined by the Board
as provided in this Act for each tonne of wheat referred to
therein according to grade.
(5) The Board shall, with the approval of the Governor in
Council, determine and fix the amounts to which producers are
entitled per tonne according to grade under certificates issued
pursuant to this Part, it being the true intent and meaning of
this Part that each producer shall receive, in respect of wheat
sold and delivered to the Board during each crop year for the
same grade thereof, the same price basis Thunder Bay or
Vancouver and that each such price shall bear a proper price
relationship to that for each other grade.
Under the applicable legislation and Regula
tions the Board has authority to allocate available
railway cars for the shipment of grain, but not,
apparently, to order the railways to make addi
tional cars available. See section 21(k) of the
Canadian Wheat Board Act, section 97(b) of the
Canada Grain Act, and the Available Railway
Cars Administration Order (P.C. 1971-418,
March 9, 1971, SOR/71-92), section 3 of which
reads:
3. The Canadian Wheat Board shall constitute a transporta
tion committee composed of persons representing the Canadian
Wheat Board, the Canadian Grain Commission, public carriers
and the grain industry to advise the Board in the exercise of its
powers under this Order.
The appellants' action is for breach of statutory
duty or obligation and is based on subsections (1)
and (2) of section 262 of the Railway Act, which
read as follows:
262. (1) The company shall, according to its powers,
(a) furnish, at the place of starting, and at the junction of the
railway with other railways, and at all stopping places estab
lished for such purpose, adequate and suitable accommoda
tion for the receiving and loading of all traffic offered for
carriage upon the railway;
(b) furnish adequate and suitable accommodation for the
carrying, unloading and delivering of all such traffic;
(e) without delay, and with due care and diligence, receive,
carry and deliver all such traffic;
(d) furnish and use all proper appliances, accommodation
and means necessary for receiving, loading, carrying, un
loading and delivering such traffic; and
(e) furnish such other service incidental to transportation as
is customary or usual in connection with the business of a
railway company, as may be ordered by the Commission.
(2) Such adequate and suitable accommodation shall include
reasonable facilities for the junction of private sidings or pri
vate branch railways with any railway belonging to or worked
by the company, and reasonable facilities for receiving, for
warding and delivering traffic upon and from those sidings or
private branch railways, together with the placing of cars and
moving them upon and from such private sidings and private
branch railways.
The appellants allege that in the crop years
1977-1978 and 1978-1979 the respondent railways
failed, in respect of the transportation of grain for
the Board, to perform the statutory duties imposed
on them by section 262, with the result that the
Board suffered loss of revenue and additional
expense, with a consequent reduction in the sur
plus that would otherwise have been available for
equitable distribution. It is alleged that the
respondent railways assured the Board through the
Transportation Committee that they would pro
vide the necessary accommodation for the carriage
of grain for the Board, but that as a result of their
failure to do so in the crop years 1977-1978 and
1978-1979 the Board was obliged to accept cancel
lation of a part of its sales contracts. More particu
larly, the statement of claim alleges that the Board
contracted in the 1977-1978 crop year for the sale
of some 23 million tonnes of grain for export in
reliance on the alleged commitment of the
respondent railways, but because of the failure of
the latter to perform their statutory duty the
Board was obliged to accept cancellation of its
sales contracts to the extent of two million tonnes,
with consequent loss of revenue to the Board for
that crop year of $300,000,000. It is further
alleged that from August 1, 1978, to the date of
the institution of the action, the Board was, for the
same reason, obliged to accept cancellation of sales
contracts to the extent of one million tonnes, with
consequent loss of revenue to the Board of
$150,000,000. There is a claim of $25,000,000 for
loss due to demurrage in the 1977-1978 crop year,
a claim of $100,000,000 for future loss of sales
which will be displaced by renegotiation of con
tracts in the crop years in question, and a claim for
loss of goodwill in international markets. In all the
appellants claim some $690,000,000.
The detailed allegations of failure to comply
with the requirements of section 262 are set out in
paragraph 15 of the statement of claim as follows:
15. At all material times the Defendant railway companies
have been in breach of their aforementioned statutory duty in
that they:
(a) failed to supply sufficient rail cars to carry grain from the
primary elevators to the terminal elevators and, in particular;
(i) failed to maintain available rail cars in a useable state
of repair;
(ii) allowed suitable rail cars to be left unused on sidings;
(iii) gave rail cars for service in other than grain priority in
scheduling repairs;
(iv) held suitable rail cars out of grain service to be used in
the transportation of other bulk commodities in priority to
grain;
(b) failed to invest adequate capital to purchase rail cars and
motive power for the adequate movement of grain;
(c) failed to maintain and replace siding and main and spur
line track and switching and yarding facilities;
(d) diverted cars suitable for the carriage of grain to destina
tions in the United States and then permitted;
(i) foreign railway companies to use the cars without
securing reciprocal cars for use in Canada in replacement;
(ii) the use of Canadian rail cars to ship grain on behalf of
non-Canadian producers and shippers over rail lines in
both Canada and the United States;
(iii) the use of the cars for the railside storage of grain in
the United States;
(e) failed to transport grain from the primary elevators to the
terminal elevators with due diligence and without delay, and
in particular;
(i) failed to allocate sufficient cars in accordance with the
allocations agreed upon in the block shipping system;
(ii) failed to supply sufficient motive power to haul trains
consisting of grain cars on grades, requiring waiting time;
(iii) required grain trains to be of extra length reducing
their ability to use sidings designed for shorter trains and
creating lengthy delays by reason of the requirement that
grain trains await the clearance of other traffic;
(iv) dispatched crews to trains carrying other bulk com
modities in priority to those carrying grain;
(v) provided inadequate switching crews to grain trains in
the terminal yards;
(vi) failed to dispatch trains in such a way that they arrive
at the terminal yards during the entire week to maintain a
continuous flow of grain and expedite the handling
process.
The appellants state in paragraph 5 of the state
ment of claim that the Board is added as a
"defendant without liability" to ensure the effectu
al and complete determination of all the issues.
Paragraphs 17 and 18 of the statement of claim
read as follows:
17. The Canadian Wheat Board, although requested to do so,
has not taken any action against the Defendant Railway com
panies for the recovery of the damages set forth herein.
18. The Canadian Wheat Board is the appropriate recipient of
the damages claimed in this action and the Plaintiffs specifical
ly request that their recovery, exclusive of costs, be paid to The
Canadian Wheat Board to be dealt with according to the lawful
and appropriate procedures established by it.
The appellants base their right of action on
subsection 262(7) which reads as follows:
262....
(7) Every person aggrieved by any neglect or refusal of the
company to comply with the requirements of this section has,
subject to this Act, an action therefor against the company,
from which action the company is not relieved by any notice,
condition or declaration, if the damage arises from any negli
gence or omission of the company or of its servant.
They also invoke section 336 of the Railway Act
as a basis for the right of action. It reads as
follows:
336. Any company that, or any person who, being a director
or officer thereof, or a receiver, trustee, lessee, agent, or
otherwise acting for or employed by such company, does,
causes or permits to be done, any matter, act or thing contrary
to this or the Special Act, or to the orders, regulations or
directions of the Governor in Council, or of the Minister, or of
the Commission, made under this Act, or omits to do any
matter, act or thing, thereby required to be done on the part of
any such company, or person, is, in addition to being liable to
any penalty elsewhere provided, liable to any person injured by
any such act or omission for the full amount of damages
sustained thereby, and such damages are not subject to any
special limitation except as expressly provided for by this or any
other Act.
Following the filing of the statement of claim,
applications were brought under Rule 419 by the
respondent railways and the Board for an order
striking out the statement of claim and dismissing
the action on the grounds that the statement of
claim did not disclose a reasonable cause of action
and the action was not properly constituted as a
class action under Rule 1711. The respondent
Canadian National Railway Company also moved
for the dismissal of the action on the ground that
the Court lacked jurisdiction to entertain the
action. The respondent Canadian Pacific Railway
Company moved in the alternative for a determi
nation under Rule 474 of the following questions
of law: (a) whether the Court had jurisdiction to
entertain the action; and (b) whether the respond
ent Canadian Pacific Railway Company owed a
duty under section 262 of the Railway Act to the
appellants.
The Trial Division directed that the applications
should be dealt with first on the basis of Rule 419
and should be adjourned for the rest until the
disposition of the issues under that Rule. In the
end, however, there was full oral argument after
exchange of written memoranda on the issues
raised by the applications, which led the learned
Trial Judge in his reasons for judgment to make
the following observation [at page 653] on the
manner in which the applications had been dis
posed of:
When the application first came on for hearing in June 1979,
after discussion with counsel, I directed that memoranda of law
be filed and exchanged so that full and comprehensive argu
ment might be made. This was done. In essence, therefore, this
application is equivalent to an application under Rule 474 in
that the "Court has accorded [all the] parties ... an opportu
nity for 'a relatively long ... instead of a short and summary
hearing.'" (Cf. Jamieson v. Carota) ([1977] 2 F.C. 239 at p.
244 per Jackett C.J.)
From this statement the appellants argued that
the Trial Division had applied the wrong test to
the question whether the statement of claim dis
closed a reasonable cause of action by treating it
as a determination under Rule 474 rather than an
issue raised by an application to strike under Rule
419. The test that must be applied to this question
is the one that applies whatever the extent of the
argument—is it plain and obvious that the action
cannot succeed? See Drummond-Jackson v. Brit-
ish Medical Association [1970] 1 W.L.R. 688;
The Queen v. Wilfrid Nadeau Inc. [1973] F.C.
1045. In my opinion it is implicit in the conclusion
of the Trial Division on this question that this was
the test applied. In the result the Trial Division
struck out the statement of claim and dismissed
the action against all defendants after full argu
ment on the issues raised by the applications,
whether on the basis of Rule 419 or Rule 474.
These issues, which are the issues in the appeal,
may be summarized as follows:
(1) Does the Federal Court have jurisdiction to
entertain the action?
(2) Does the statement of claim disclose a
reasonable cause of action?
(3) Is the action properly constituted as a class
action as provided for by Rule 1711?
(4) Is The Canadian Wheat Board a necessary
and proper party?
The jurisdiction of the Federal Court to enter
tain the appellants' action must rest on section 23
of the Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, which is as follows:
23. The Trial Division has concurrent original jurisdiction as
well between subject and subject as otherwise, in all cases in
which a claim for relief is made or a remedy is sought under an
Act of the Parliament of Canada or otherwise in relation to any
matter coming within any following class of subjects, namely
bills of exchange and promissory notes where the Crown is a
party to the proceedings, aeronautics, and works and under
takings connecting a province with any other province or
extending beyond the limits of a province, except to the extent
that jurisdiction has been otherwise specially assigned.
There is, of course, no question that the claim is
sufficiently supported by federal law since it is
founded on the provisions of the Railway Act and
the Canadian Wheat Board Act. The issue is
whether jurisdiction with respect to an action in
damages for the failure to comply with the re
quirements of section 262 of the Railway Act that
is alleged in the statement of claim has to any
extent been "specially assigned" to another tri
bunal. The issue arises, in relation to the particular
allegations of the statement of claim in this case,
because of the jurisdiction that is conferred on the
Canadian Transport Commission by subsection
262(3) of the Railway Act, which reads as follows:
262... .
(3) If in any case such accommodation is not, in the opinion
of the Commission, furnished by the company, the Commission
may order the company to furnish the same within such time or
during such period as the Commission deems expedient, having
regard to all proper interests; or may prohibit or limit the use,
either generally or upon any specified railway or part thereof,
of any engines, locomotives, cars, rolling stock, apparatus,
machinery, or devices, or any class or kind thereof, not
equipped as required by this Act, or by any orders or regula
tions of the Commission made within its jurisdiction under the
provisions of this Act.
Reference must also be made to the jurisdiction
conferred on the Commission by subsections
262(6) and 262(8), which are as follows:
262... .
(6) For the purposes of this section the Commission may
order that specific works be constructed or carried out, or that
property be acquired, or that cars, motive power or other
equipment be allotted, distributed, used or moved as specified
by the Commission, or that any specified steps, systems or
methods be taken or followed by any particular company or
companies, or by railway companies generally, and the Com
mission may in any such order specify the maximum charges
that may be made by the company or companies in respect of
any matter so ordered by the Commission.
(8) The Commission may make regulations, applying gen
erally or to any particular railway or any portion thereof, or
may make an order in any case where it sees fit, imposing
charges for default or delay by any company in furnishing
accommodation, appliances, or means as aforesaid, or in receiv
ing, loading, carrying, unloading or delivering traffic, and may
enforce payment of such charges by companies to any person
injuriously affected by the default or delay; and any amount so
received by any person shall be deducted from the damages
recoverable or recovered by such person for the default or
delay; and the Commission may, by order or regulation, deter
mine what circumstances shall exempt any company from
payment of any such charges.
It is contended by the respondent railways that
the import of these provisions, and particularly
subsection 262(3), is that the determination of the
issues of fact raised by the appellants' statement of
claim, and on which the liability of the respondent
railways depends, has been specially assigned to
the Canadian Transport Commission. It is further
contended, and this was held by the Trial Division,
that jurisdiction to award damages for a failure to
comply with requirements of section 262 has been
specially assigned to the Commission by section 58
of the National Transportation Act, R.S.C. 1970,
c. N-17, which reads as follows:
58. Upon any application made to the Commission, the
Commission may make an order granting the whole or part
only of such application, or may grant such further or other
relief, in addition to or in substitution for that applied for, as to
the Commission may seem just and proper, as fully in all
respects as if such application had been for such partial, other,
or further relief.
Subsection 262(7) of the Railway Act gives an
aggrieved person an "action" for damages for
neglect or refusal to comply with the requirements
of the section. The word "action" connotes a pro
ceeding in the courts. It is to be contrasted with
the use of the words "application" and "com-
plaint" with reference to proceedings before the
Commission under the Railway Act: see section 48
of the National Transportation Act.
In Duthie v. Grand Trunk R. W. Co. (1905) 4
Can. Ry. Cas. 304, Chief Commissioner Killam of
the Board of Railway Commissioners held that the
Board did not have jurisdiction to award damages
for breach of the duty created by section 214 of
The Railway Act, 1903 (S.C. 1903, c. 58), which
was an earlier version, with some differences, of
section 262, and that an action for damages must
be brought in the courts. This view was approved
and applied by the Manitoba Court of Appeal in
Robinson v. Canadian Northern Ry. (1910) 19
Man. L.R. 300 at pages 307 and 314, with ref
erence to the jurisdiction to award damages for
breach of the duty under section 253 of the Act of
1903 to provide reasonable and proper facilities for
the carriage of goods. Although the question of
jurisdiction was not expressly dealt with in the
judgments of the Supreme Court of Canada,
(1910) 43 S.C.R. 387, and the Privy Council,
[1911] A.C. 739, they impliedly affirmed the
jurisdiction of the courts to award damages, at
least where, as in the Robinson case, there had
been a prior finding of fact by the Board of a
failure to provide the facilities required by the Act.
In the face of this long-established view as to the
jurisdiction to award damages for breach of a
statutory duty similar to that created by section
262, I think it would require very clear language
by Parliament to indicate an intention to assign
such jurisdiction to the Commission. Such explicit
language was used, for example, in England in
section 12 of the Railway and Canal Traffic Act,
1888 (51 & 52 Vict., c. 25), where it was provided
that where the Railway Commissioners had juris
diction to hear and determine any matter "they
may, in addition to or in substitution for any other
relief, award to any complaining party who is
aggrieved such damages as they find him to have
sustained". I am unable, with respect, to agree
with the learned Trial Judge, that section 58 of the
National Transportation Act is sufficiently ex
plicit or clear in this respect to have the important
effect of transferring the jurisdiction to award
damages for breach of the duty created by section
262 of the Railway Act from the courts to the
Commission. Whereas section 262 expressly con
fers particular kinds of jurisdiction on the Com
mission in subsections (3),(6) and (8), it is silent
as to where the right of "action" for damages
created by subsection (7) is to be exercised. More-
over, a distinction is made in subsection (8) be
tween "charges", which may be imposed by the
Commission, and "damages", the award of which
is not clearly assigned to the Commission. In my
opinion it is not sufficiently clear from section 58
of the National Transportation Act, which deals in
general terms with relief that may be granted by
the Commission although not requested, that Par
liament intended to modify the attribution of the
jurisdiction to award damages that results by
implication from the terms of section 262 of the
Railway Act. I am, therefore, of the opinion that
the Federal Court has jurisdiction to award dam
ages for breach of the duty created by section 262.
The more difficult question, as I see it, is
whether the Court has jurisdiction to make the
determination called for by the statement of claim
as to whether the respondent railways furnished
adequate and suitable accommodation in the crop
years in question, or whether that determination
should be held, as a result of the terms of section
262, to have been specially assigned to the Com
mission within the meaning of section 23 of the
Federal Court Act.
The allegations of paragraph 15 of the state
ment of claim raise complex questions of fact and
railway regulatory policy for the determination of
which the Commission has been given jurisdiction
by subsections 262(3) and 262(6) of the Railway
Act. Subsection 262(3), in particular, evidences a
legislative intention that it is to be the opinion of
the Commission that determines what constitutes
adequate and suitable accommodation in the cir
cumstances of a particular case. It is my view that
section 262 contemplates that the questions of fact
and policy of the kind raised by paragraph 15 of
the statement of claim will be determined by the
Commission rather than by the courts.
This view and the policy considerations that lie
behind it find support in the judicial dicta in
Canadian and English decisions which have com
mented on the relationship between the respective
jurisdictions, in railway matters, of the regulatory
tribunals and the courts. Three considerations are
reflected in these judicial commentaries: (1) the
general statutory requirement of adequate and
suitable accommodation, or reasonable facilities,
can only be made specific and concrete in particu
lar cases by a determination, as a question of fact,
of what constitutes such accommodation or facili
ties in the particular case; (2) that determination,
because of the various interests and policy consid
erations involved, has been confided by the Legis
lature to the regulatory tribunal; and (3) it is
essential that there not be the possibility of con
flicting determinations on such questions of fact
and policy.
These general considerations are reflected in the
judgments of the Supreme Court of Canada in
The Grand Trunk Railway Company of Canada v.
McKay (1904) 34 S.C.R. 81, and The Grand
Trunk Railway Company of Canada v. Perrault
(1905) 36 S.C.R. 671, particularly in the opinions
of Davies J. in both cases. The Court held that the
particular jurisdictions of the Railway Committee
of the Privy Council and the Board of Railway
Commissioners that were under consideration in
those cases must be regarded as exclusive because
of their very nature and the practical consequences
of any other view. In emphasizing the basis on
which the decision of the regulatory tribunal must
be made, Davies J. said in McKay at page 97:
"The exercise of such important powers and duties
requires the careful consideration of many possible
conflicting interests and the fullest powers to
enable this committee to bring all such interests
before them and determine all necessary facts, are
given by the Act in question", and in Perrault at
page 679 he said to similar effect: "Many consid
erations have to be weighed in reaching a conclu
sion under this section, and some of them relating
to the `public interest' may be quite apart from the
immediate surroundings." With respect to the
necessity of avoiding conflicting determinations,
Sedgewick J. said in McKay at page 92: "Is or can
there be any other body which may override or
differ from such decisions or orders, or give addi
tional, supplementary, or perhaps contradictory
orders?" In Perrault Davies J. said at page 679 on
the same point: "Then consider what an extraordi
nary jumble might and probably would arise if two
courts proceeding on different considerations
reached opposite conclusions."
In the Robinson case, supra, the Board of Rail
way Commissioners had found as a fact that the
railway had failed to provide reasonable and
proper facilities as required by section 253 of the
Act of 1903, and this finding of fact was, by virtue
of section 42(3) of the Act, binding on the courts
and was the determination of liability for purposes
of the subsequent action in damages. In Meagher
v. Canadian Pacific Railway Company (1912) 42
N.B.R. 46, a majority of the New Brunswick
Supreme Court en banc distinguished the Robin-
son case on the ground that the consent order of
the Board in Meagher did not amount to a finding
that there had been a failure to comply with the
requirements of section 284 (adequate and suitable
accommodation) or section 317 (reasonable and
proper facilities) of the Railway Act of 1906
(R.S.C. 1906, c. 37), and that in the absence of
such a finding by the Board the Court could not
award damages for failure to perform the statu
tory obligation. Barker C.J. who delivered the
principal opinion of the majority said at page 81:
I do not wish to be considered as holding that in no case
arising under the Railway Act can an action be maintained
against a company for a violation of its statutory duty without
first having the facts found by the Railway Board. It is quite
possible that there may be many cases where the duty is
imposed by language so exact and explicit in its terms that any
order of the Board could serve no useful or necessary purpose.
In the present case the duty imposed upon the company has
reference to a great variety of conditions and circumstances
involving public as well as private interests. The general lan
guage used for that purpose can only be made specific, so as to
define the duty in any particular case by the Railway Board, a
tribunal created by the Railway Act for the purposes of the
Act. To it, and to it alone, the Legislature has given authority
to deal finally with such matters, and in exercising that author
ity the Board has a discretion in dealing with the respective
rights and requirements of all parties, which is not subject to
any appeal.
This in my opinion aptly characterizes the
nature of the determination, which the Act con-
templates is to be made by the Commission, as to
what in particular circumstances is to be judged to
be adequate and suitable accommodation, having
regard to all the interests and considerations in
volved. The same characterization is reflected in
English decisions respecting the jurisdiction of the
regulatory tribunal to determine as a question of
fact what is to be considered to be reasonable
facilities for the carriage of traffic, as required by
section 2 of The Railway and Canal Traffic Act,
1854 (17 & 18 Vict., c. 31). See, for example,
Perth General Station Committee v. Ross [1897]
A.C. 479 per Lord Watson at page 487; John
Watson, Limited v. Caledonian Railway Company
(1911) 14 Ry. & Can. Tr. Cas. 185 per Lord
Dunedin at page 191; and Spillers & Bakers,
Limited v. Great Western Railway Company
[1911] 1 K.B. 386 per Farwell L.J. at page 401.
There will, of course, be cases, as was observed
by Barker C.J. in Meagher, supra, in which the
courts may assume jurisdiction to determine lia
bility for breach of a duty created by section 262
of the Railway Act without a prior determination
of a question of fact by the regulatory authority.
Such would appear to have been the case in A. L.
Patchett & Sons Ltd. v. Pacific Great Eastern
Railway Company [1959] S.C.R. 271, where the
Supreme Court of Canada assumed jurisdiction
with respect to an action in damages for breach of
the duty created by paragraph 203(1)(c) of the
Railway Act of British Columbia, R.S.B.C. 1948,
c. 285, which is in the same terms as paragraph
262(1)(c) of the federal Act, without a prior deter
mination by the regulatory authority. Section 203
of the provincial Act is more or less a copy of
section 262 of the federal Act, except that the
jurisdiction conferred on the Commission by sec
tion 262 is conferred on the provincial Minister of
Railways by section 203. Locke J., who dissented
in Patchett, made the following reference at page
291 to the absence of a prior determination by the
regulatory authority:
In Robinson v. Canadian Northern Railway ((1909), 19
Man. R. 300), damages were awarded against a railway com
pany for depriving a shipper of reasonable and proper facilities
under the section of the Act of 1903. The judgment against the
railway company was affirmed in this Court ((1910), 43 S.C.R.
387, 11 C.R.C. 304) and in the Judicial Committee ([1911]
A.C. 739, 13 C.R.C. 412, 31 W.L.R. 624). In that case the
facilities of which the Robinson company had been deprived
had been found by the Board of Railway Commissioners to be
reasonable and proper facilities within the meaning of the
section in the Act of 1903.
In the present case, there has been no such finding but the
fact that the siding had been built into the appellant's premises
and leased to it, and traffic received and delivered for some
period of time there, puts it beyond question that the facilities
were such as the appellant was entitled to be afforded under ss.
203 and 222 of the Railway Act, and no question is raised as to
this.
In the Patchett case, the issue was not the right
to have a siding, but the failure of the railway
company, because of picketing during a strike, to
provide the service at the siding which the shipper
claimed to be entitled to under the Act. The
majority held that the duty created by section 203
was not an absolute duty, but a relative one to
provide services so far as it was reasonably possible
to do so, and that the test of reasonableness had
been satisfied. The minority held that the duty was
an absolute one and they would have found the
railway company liable in damages. There was no
question of fact for which the regulatory authority
had been assigned jurisdiction, such as is raised by
the statement of claim in the present case.
The appellants relied particularly, with refer
ence to the question of jurisdiction, on the judg
ment of the Supreme Court of Canada in The Bell
Telephone Company of Canada v. Harding Com
munications Limited [1979] 1 S.C.R. 395. There
the Court held that the Quebec Superior Court, in
proceedings for an injunction, had jurisdiction to
determine the question whether Bell was obliged
by subsection 5(4) of its constituent Act to pre
scribe reasonable requirements for the attachment
of equipment not provided by it, and that this
jurisdiction was not excluded by the Commission's
jurisdiction under subsections (5) and (6) of sec
tion 5 to determine, as a question of fact, the
reasonableness of any such requirements. The
company had not yet prescribed any requirements,
and the Commission had taken the position in
previous decisions that in the absence of such
requirements it did not have jurisdiction to enter
tain a complaint against a refusal by the company
to permit the attachment of equipment other than
Bell equipment. Laskin C.J.C., delivering the judg-
ment of the Court, said that the meaning of sub
section 5(4) of the Act was a question of law on
which the decision of the Commission could not be
final and binding on the courts in the absence of a
special provision to that effect, and that it was one
that the Quebec Superior Court had jurisdiction to
consider in proceedings for an injunction that were
properly before it. He said at page 403:
The conclusion of the Commission is not one that binds the
Courts in the absence of a clear indication that it was for the
Commission alone to determine the meaning of s. 5(4), not only
for its purposes but also in respect of any other proceedings in
which the meaning of s. 5(4) arises. There is no such indication.
Indeed, the Commission is not itself the final authority on
questions of law or jurisdiction arising out of proceedings taken
before it. There is provision in the National Transportation Act
for an appeal to the Federal Court of Appeal, with leave, on
questions of law or of jurisdiction (see s. 64(2), as amended by
R.S.C. 1970 (2nd Supp.), c. 10, item 32), with the possibility of
a further appeal here. It is this Court which would finally settle
any question of law raised by s. 5(4), whether it came through
a Superior Court route or through a route leading from the
Commission's decision.
I conclude, therefore, that the Quebec Superior Court has
jurisdiction to decide whether s. 5(4) imposes a legal obligation
upon Bell when the question arises in the course of judicial
proceedings that are properly taken in that Court. That is this
case.
In my respectful opinion, the decision in the
Harding Communications case is not determina-
tive of the issue of jurisdiction in the present
appeal. While the question that had to be con
sidered there was a question of law on which the
decision of the Commission could not be final and
binding on the courts, the question whether there
has been a failure to provide adequate and suitable
accommodation, as required by section 262, is a
question of fact with respect to which the Commis
sion has been assigned jurisdiction by subsection
262(3) and on which its decision is made binding
and conclusive by subsection 56(3) of the National
Transportation Act.
The statement of claim in the present case sets
forth a comprehensive complaint concerning the
provision, allocation and use of railway cars for the
carriage of grain during two entire crop years. It is
one to which the test of reasonableness laid down
in Patchett could only be properly applied by the
Commission, having regard to the total demand on
the railway system during the period in question.
It is to be noted, with reference to the possibility of
conflicting determinations, that on April 24, 1980,
the Railway Transport Committee of the Commis
sion rendered a decision upon an application dated
February 19, 1979, "pursuant to section 262 of the
Railway Act, R.S.C. 1970, Chap. R-2 for an
investigation by the Railway Transport Committee
to determine whether Canadian National and
Canadian Pacific Limited are fulfilling their obli
gations to provide adequate and suitable accom
modation for the carriage of grain". The Commit
tee referred to the criterion of reasonableness
expressed in Patchett, to various studies being
made of grain transportation and handling, and to
the efforts of the railways, with government assist
ance, to increase capacity. It declined to conduct
the investigation with public hearings that had
been requested. The decision reflects the complex
and elusive nature of the policy judgment that
must be made with respect to the issues raised by
the statement of claim.
For these reasons I am of the opinion that the
determination of whether the respondent railways
furnished adequate and suitable accommodation
for the carriage of grain for the Board during the
crop years 1977-1978 and 1978-1979 has been
specially assigned to the Commission, and that in
the absence of such a determination by the Com
mission the Federal Court is without jurisdiction
to entertain the appellants' claim for damages.
Assuming, however, that I may be wrong in this
conclusion, and that the Court has jurisdiction to
entertain the action, I am further of the opinion,
for the reasons which follow, that the statement of
claim does not disclose a reasonable cause of
action, and that if it does, the action is in any
event not properly constituted as a class action
under Rule 1711.
The issue as to whether the statement of claim
discloses a reasonable cause of action is whether,
assuming the truth of the allegations of fact in the
statement of claim, the appellants are persons
aggrieved within the meaning of subsection 262(7)
of the Railway Act. Since the action is based on
alleged failure to perform the statutory duty to
provide adequate and suitable accommodation the
question is whether the duty is one that was owed
by the respondent railways to the appellants. In
my opinion it was not.
The duty is, as indicated in paragraph
262(1)(a), to furnish adequate and suitable
accommodation "for the receiving and loading of
all traffic offered for carriage upon the railway".
It is, therefore, a duty owed to one who offers
goods for carriage. It is clear from the allegations
of the statement of claim and the applicable provi
sions of the Canadian Wheat Board Act, to which
reference has been made, that the additional or
"excess" grain (to use the expression employed by
the Trial Judge) which the Board could have sold
and would have authorized producers to deliver,
but for the alleged failure of the respondent rail
ways to furnish adequate accommodation, was not,
and could not have been, offered for carriage by
the appellants to the respondent railways. The
allegations of the statement of claim and the provi
sions of the Act make it clear that producers do
not make the necessary arrangements with the
railways for the transportation of grain that is
marketed through the Board. Grain is sold and
delivered by individual producers to the Board at
primary elevators or railway cars where ownership
of it passes by operation of the statute to the Board
and it becomes mixed with other grain. It is the
Board that makes the necessary arrangements with
the railways for transportation of the grain sold by
it. It does so for its own account as owner of the
grain and not as agent of the producers. As alleged
by the statement of claim, the Board participated
in the necessary planning with the railways
through the Transport Committee for the carriage
of grain during the crop years in question and
received a confirmation or commitment from the
railways that they would provide the necessary
capacity to carry the grain sold by the Board.
Paragraph 9 of the statement of claim reads:
9. At all material times The Canadian Wheat Board arranged
with the Defendant railway companies for the carriage of grain
through the device of the Transportation Committee for fore
casting long-range requirements and through a Block Shipping
System for allocating rolling stock and related facilities on a
six-week shipping cycle. The Defendant railway companies
participated in the decisions so made and confirmed their
capacity to carry the grain in question.
It must be remembered, moreover, that the Board
has the authority to allocate available railway cars,
and that it necessarily participated with the rail
ways in the joint decisions as to the disposition of
available rolling stock. The railways do not deal
with individual producers at all in respect of spe
cific quantities of grain sold and delivered by them
to the Board and later carried for the Board by the
railways. The consequence for an individual pro
ducer of a particular failure in the entire system to
provide adequate accommodation could not be
foreseen by the railways.
It has been said on several occasions that the
liability of a railway under the provisions of the
Railway Act is essentially that of a common carri
er: Canadian National Railway Co. v. Harris
[1946] S.C.R. 352 at page 376. While the specific
duty that is found in section 262 to furnish ade
quate and suitable accommodation may be said to
be the creation of statute, it could not have been
contemplated that it should be owed to persons
outside the scope of a common carrier's liability
because they do not have contractual relations
with the carrier and are not the owners of the
goods offered for carriage.
It was conceded by counsel for the appellants
that a person aggrieved within the meaning of
subsection 262(7) must be one to whom the duty
created by the section is owed, but he contended
that because of the statutory scheme of the
Canadian Wheat Board Act, which compels pro
ducers to market through the Board, the individual
producer should be treated as being in the same
relationship to the railways as the Board—that is,
as a shipper and owner of the grain. For the
reasons already indicated, and in particular, the
scale of the Board's marketing operations and its
relations with the railways, that cannot in my
opinion be a tenable view. Where there is no way
that the railways can foresee the impact on the
individual producer of a particular failure to pro
vide adequate accommodation in the carriage of
grain for the Board there can be no basis for a
duty to him.
For these reasons I agree with the conclusion of
the Trial Division that the appellants are not per
sons aggrieved within the meaning of subsection
262(7) of the Railway Act, and that it is, there
fore, plain and obvious that their action could not
succeed.
Even on the assumption, however, that the
individual producer may have a cause of action for
economic loss which may be shown to have result
ed to him from the failure of the railways to
provide adequate accommodation for the carriage
of grain for the Board, the action is not in my
opinion properly constituted as a class action
under Rule 1711, paragraph (1) of which reads as
follows:
Rule 1711. (1) Where numerous persons have the same interest
in any proceeding, the proceeding may be begun, and, unless
the Court otherwise orders, continued, by or against any one or
more of them as representing all or as representing all except
one or more of them.
Judicial decisions, such as Naken v. General
Motors of Canada Ltd. (1979) 92 D.L.R. (3d) 100
(Ont. C.A.), which have considered the essential
requirement for a class action under similar rules,
have indicated that the action, if successful, must
be beneficial to all the members of the class, or as
sometimes put, if the plaintiffs win, all win. In the
present case the appellants claim as the holders of
permit books for the crop years 1977-1978 and
1978-1979. That quality would not by itself neces
sarily entitle the individual producer to a share of
the damages that might be recovered and paid to
the Board for distribution. As indicated above, the
equitable distribution of any surplus earned by the
Board by its sale of grain is distributed not to the
holders of permit books, as such, but to the holders
of certificates showing the grain that has been sold
and delivered to the Board during a crop year. The
surplus payable to the holders of certificates for
the crop years in question has been distributed to
them. Those certificates would not entitle them to
the distribution of any additional surplus which
the Board would have realized from the sale of
additional grain but for the alleged failure of the
respondent railways to provide adequate accom
modation. To establish a right to a share of the
damages payable to the Board the individual pro
ducer would have to show the amount of the
additional quota, if any, to which he would have
been entitled and able to fill of grain of a particu
lar kind and grade. That would depend on the
additional requirements of the Board and the addi
tional grain that the individual producer would
have been able to deliver. It is clear that the right
of the individual producer would depend on the
particular circumstances of his case, and that there
would be the possibility of different defences based
on such circumstances. There is not, therefore, the
basis for a class action.
The appellants have attempted to overcome the
difficulty of establishing the individual right to
damages of each producer by casting their
recourse in the nature of a derivative action and
seeking to have the Board charged with the re
sponsibility for distributing the damages payable
to it. The appellants do not have standing to bring
a derivative action to enforce the rights of the
Board. Neither would the Board have statutory
authority, nor could it be properly compelled by a
court, to distribute damages payable to it to the
holders of permit books in the crop years in ques
tion according to what it judges should be their
individual entitlement. A surplus resulting from
the payment of damages to the Board would not be
subject to distribution pursuant to section 26 of the
Canadian Wheat Board Act or any other provision
of the Act, such as section 30, which also applies
to the distribution of surplus in respect of grain
actually sold and delivered.
For all of these reasons I would dismiss the
appeal with costs.
* * *
URIE J.: I concur.
* * *
MAGUIRE D.J.: I concur.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.