Judgments

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A-687-78
In re the Railway Act and in re the National Transportation Act and in re a decision made on November 17, 1978 and order dated November 22, 1978 of the Review Committee of the Canadian Transport Commission numbered 1978-5 review ing a decision of the Railway Transport Commit tee dated November 24, 1977 and order number R-25960 dated December 14, 1977 (as amended by order number R-26029, R-26226 and R-26836)
Court of Appeal, Pratte and Heald JJ. and Ver- chere D.J.—Vancouver, December 2 and 3; Ottawa, December 21, 1981.
Railways — Order of Review Committee determined that passenger-train service in question was uneconomic but should not be discontinued — Appellant contends that the Canadian Transport Commission does not have jurisdiction to make such a decision on an application under s. 260 of the Railway Act because two Special Acts prescribe that the service shall not be discontinued — Appeal dismissed — National Trans portation Act, R.S.C. 1970, c. N-17, ss. 63, 64(2) — Railway Act, R.S.C. 1970, c. R-2, ss. 3(1)(b), 260.
Appeal by the Province of British Columbia from a decision of the Review Committee of the Canadian Transport Commis sion. Canadian Pacific Limited applied to the Commission under section 260 of the Railway Act to discontinue the passenger-train service between Victoria and Courtenay. The Railway Transport Committee determined that the service was uneconomic and ordered that it be discontinued. The Review Committee, after a new hearing, rescinded the decision of the Railway Transport Committee, and determined that the pas- senger-train service was uneconomic but should not be discon tinued. Paragraph 3(1)(b) of the Railway Act prescribes that the provisions of Special Acts passed by the Parliament of Canada override those of the Railway Act in so far as is necessary to give effect to that prescription. The appellant contends that the Canadian Transport Commission has no jurisdiction to decide an application under section 260 because there are two Special Acts which prescribe that the service shall not be discontinued. A federal statute of 1884 ratified the contract for the construction of the railway, and according to the appellant incorporated the terms of the contract so that the obligation imposed by the contract on the contractors to oper ate the railway continuously must be considered as having been imposed by the statute itself. The appellant also submits that a federal statute passed in 1905 preserved the obligation of the railway company found in the provincial Settlement Act of 1883 to operate the railway "continuously". Allegedly the 1905 Act is the second Special Act. The question is whether the Commission has jurisdiction to decide an application under section 260.
Held, the appeal is dismissed. Pursuant to paragraph 3(1)(b) of the Railway Act, the provisions of the two Special Acts override those of the Railway Act, including section 260, "in so far as is necessary to give effect" to that prescription. To attain that object it would be necessary to deny to the Commission the power to order that the railway service be discontinued. How ever, the decision of the Review Committee is a decision which determines that the passenger-train service is uneconomic but orders that it shall not be discontinued. In order to give effect to the asserted prescription of the Special Acts that the train service be not discontinued, it is not necessary to deny to the Commission the authority conferred on it by section 260 to find that the operation of the passenger-train service is uneconomic since the existence of that power in no way conflicts with the obligation of the railway to continue the operation of its railway. It is not necessary either, in order to give effect to the Special Acts, to deny to the Commission the power to order that the railway service in question shall not be discontinued. That the Commission should have such a power in no way conflicts with the provisions of the Special Acts; on the con trary, the existence of that power would seem to be very useful, if not necessary, to give effect to the prescription in the Special Acts.
APPEAL. COUNSEL:
L. F. Lindholm and P. Pearlman for appellant.
N. D. Mullins, Q.C. for respondent Canadian Pacific Limited.
J. K. Allen for respondent Via Rail Canada Inc.
G. Nadeau, Q.C. for respondent Canadian Transport Commission.
W. B. Scarth, Q.C. for respondent Attorney General of Canada.
SOLICITORS:
Pearlman & Lindholm, Victoria, for appel lant.
Legal Services, Canadian Pacific Limited, Calgary, for respondent Canadian Pacific Limited.
Legal Services, Via Rail Canada Inc., Mon-
treal, for respondent Via Rail Canada Inc.
Legal Services, Canadian Transport Com mission, Hull, for respondent Canadian Transport Commission.
Deputy Attorney General of Canada for
respondent Attorney General of Canada.
The following are the reasons for judgment rendered in English by
PRATTE J.: The Province of British Columbia appeals, pursuant to subsections 64(2) and follow ing of the National Transportation Act, R.S.C. 1970, c. N-17, from a decision of the Review Committee of the Canadian Transport Commis sion on an application made by Canadian Pacific Limited (on behalf of Esquimalt and Nanaimo Railway Company). That decision was made on November 17, 1978, and embodied in a formal order dated November 22, 1978.
The application of Canadian Pacific Limited to the Canadian Transport Commission was made on September 11, 1974, under section 260 of the Railway Act, R.S.C. 1970, c. R-2. It was an application to discontinue the passenger-train ser vice between Victoria and Courtenay on a railway line built and owned by the Esquimalt and Nanai- mo Railway Company and operated by Canadian Pacific Limited pursuant to a long-term lease made on July 1, 1912. The Province of British Columbia contested that application. It appeared before the Railway Transport Committee of the Commission and argued, first, that the Commis sion had no jurisdiction in the matter and, second, that, in any event, the Committee should deter mine that the service in question should not be discontinued. The Committee dismissed the objec tion raised by the Province to its jurisdiction and, by an order dated December 14, 1977, it deter mined that the passenger-train service between Victoria and Courtenay was uneconomic and ordered that it be discontinued. The Province applied to the Commission for a review of that decision pursuant to section 63 of the National Transportation Act. It was the contention of the Province that the Commission had no jurisdiction in the matter and that, in any event, new evidence could be adduced showing that the decision of the Railway Transport Committee was incorrect. On October 30, 1978, the Review Committee dis missed the objection raised to the jurisdiction of the Commission and ordered that a new hearing be held to allow all interested to adduce new evi dence. After that hearing, the Review Committee rescinded the decision of the Railway Transport Committee, determined that the passenger-train
service in question was uneconomic and likely to continue to be uneconomic and ordered that Canadian Pacific Limited (Esquimalt and Nanai- mo Railway Company) should not discontinue the operation of that service. That is the decision that was made on November 17, 1978, from which the Province appeals on the sole ground that the Com mittee exceeded its jurisdiction in making it.
Before considering the attack made by the appellant on the jurisdiction of the Committee, a preliminary question must first be determined.
Counsel for Canadian Pacific Limited argued that the appeal should be dismissed on the ground that it is academic, and directed against the rea sons of the Committee rather than against its decision which was favourable to the appellant. In my view, these two contentions are unfounded. In so far as I can see from the material before us, the decision rendered by the Review Committee is still in existence and nothing has occurred to deprive it of its effect. For that reason, the appeal is not academic. Moreover, the appeal is not directed against the reasons of the Committee since what is challenged by the appellant is the legality of the order actually made by the Committee. Indeed, what the Province is seeking in this appeal is a declaration that the Committee had no jurisdiction either to declare that the passenger-train service between Victoria and Courtenay was uneconomic or to order that it should not be discontinued. There is, however, another preliminary and more serious objection that could be made to this appeal. That objection is that the Province has no direct and immediate interest in challenging the validity of the decision rendered by the Committee since that decision does not affect prejudicially the interests of the Province which favours the con tinuation of the passenger-train service between Victoria and Courtenay. That objection, serious as it is, was certainly considered by the Court when the Province applied for leave to appeal; since the Court then granted that application, it must be assumed that it rejected that objection and con sidered that the appellant, though indirectly affected by the decision of the Committee, was nevertheless sufficiently affected so as to give it
standing as an appellant. I do not think that we should, at this late stage, adopt another view.
A few historical notes are necessary for a proper understanding of the reasons advanced by the Province of British Columbia for challenging the jurisdiction of the Commission in the matter.'
The Colony of British Columbia became part of Canada on July 20, 1871. In the following years, there was considerable tension between the new Province and the Federal Government due to what the Province perceived as the failure of the Gov ernment to live up to its obligations under the terms of the Union to build a railway on Vancou- ver Island. That dispute was settled in 1883 by an arrangement between the two governments con cerned and a group of businessmen, Messrs. Duns- muir et al., who were prepared to arrange for the construction of the railway. Under that arrange ment, the Provincial Government was to grant to the Federal Government a large tract of land on the Island through which the proposed railway was to run; the Provincial Government was also to incorporate a company for the purpose of con structing and operating the railway; as soon as the construction was completed, the Federal Govern ment was to transfer to that company the land acquired from the Provincial Government and, in addition, as a further subsidy, was to pay the company a sum of $750,000. Of the various stat utes and documents that came into existence to carry that arrangement into effect, only three need be mentioned:
(1) a contract, dated August 20, 1883, between the Federal Government and Messrs. Dunsmuir et al. (the contractors) for the construction of the railway. Paragraphs 3 and 9 of that contract provided that the contractors should construct and operate the railway:
3. That the said contractors shall and will well, truly and faithfully lay out, make, build, construct, complete, equip, maintain and work continuously a line of railway of a uniform gauge of four feet eight and a-half inches, from Esquimalt to Nanaimo, in Vancouver Island, British
' Those who are familiar with the decision of the Privy Council in Attorney-General for British Columbia v. Esquimalt and Nanaimo Railway Company [[1950] A.C. 87] will realize that in the brief historical outline that follows I have more or less plagiarized the judgment of the Judicial Committee in that case.
Columbia, the points and approximate route and course being shown on the map hereunto annexed, marked B, and also construct, maintain and work continuously a telegraph line throughout and along the said line of railway, and supply all such telegraphic apparatus as may be required for the proper equipment of such telegraph line, and perform all engineering services, whether in the field or in preparing plans or doing other office work, to the entire satisfaction of the Governor in Council.
9. That the said contractors will, upon and after the completion and equipment of the said line of railway and works appertaining thereto, truly and in good faith keep and maintain the same, and the rolling stock required therefor, in good and efficient working and running order, and shall continuously and in good faith operate the same, and also the said telegraph line and will keep the said telegraph line and appurtenances in good running order.
Paragraph 13 provided that the Federal Govern ment was to grant to the contractors by way of subsidy the sum of $750,000 and the land acquired from the Province;
(2) a statute of the Legislature of British Columbia, assented to on December 19, 1883, 47 Viet., c. 14, known as the Settlement Act. That statute recited the agreement between the Province and the Federal Government for the purpose of settling existing disputes between them and, inter alia, incorporated "The Esquimalt and Nanaimo Railway Company". Sections 8, 9 and 27 of that Act read as follows:
8. For the purpose of facilitating the construction of the Railway between Esquimalt and Nanaimo, it is hereby enacted that such persons, hereinafter called the "compa- ny," as may be named by the Governor-General in Council, with all such other persons and corporations as shall become shareholders in the company, shall be and are hereby con stituted a body corporate and politic by the name of "The Esquimalt and Nanaimo Railway Company."
9. The company, and their agents and servants, shall lay out, construct, equip, maintain, and work a continuous double or single track steel railway of the gauge of the Canadian Pacific Railway, and also a telegraph line, with the proper appurtenances, from a point at or near the harbour of Esquimalt, in British Columbia, to a port or place at or near Nanaimo on the eastern coast of Vancouver Island, with power to extend the main line to Comox and Victoria, and to construct branches to settlements on the east coast, and also to extend the said railway by ferry communications to the mainland of British Columbia, and there to connect or amalgamate with any railway line in operation or course of construction. The company shall also have power and authority to build, own, and operate steam and other vessels in connection with the said railway, on and over the bays, gulfs, and inland waters of British Columbia.
27. The said Esquimalt and Nanaimo Railway Company shall be bound by any contract or agreement for the con struction of the Railway from Esquimalt to Nanaimo which shall be entered into by and between the persons so to be incorporated as aforesaid, and Her Majesty, represented by the Minister of Railways and Canals, and shall be entitled to the full benefit of such contract or agreement, which shall be construed and operate in like manner as if such company had been a party thereto in lieu of such persons, and the document had been duly executed by such company under their corporate seal.
(3) a federal statute [An Act respecting the Vancouver Island Railway, the Esquimalt Graving Dock, and certain Railway Lands of the Province of British Columbia, granted to the Dominion], assented to on April 19, 1884, 47 Vict., c. 6, which recited and approved the agreement between the Federal Government and the Province. That section 2 of that statute ratified in the following terms the contract be tween the Federal Government and Messrs. Dunsmuir et al. for the construction of the railway:
2. The agreement, a copy of which, with specification, is hereto appended as a schedule, for the construction, equip ment, maintenance and working of a continuous line of railway of a uniform gauge of four feet, eight and one-half inches, from Esquimalt to Nanaimo in Vancouver Island, British Columbia, and also for the construction, equipment, maintenance and working of a telegraph line along the line of the said railway, is hereby approved and ratified, and the Governor in Council is authorized to carry out the provisions thereof according to their purport.
The railway was built as contemplated and the Esquimalt and Nanaimo Railway Company received from the Federal Government the subsidy of $750,000 as well as the land acquired from the Provincial Government.
There remains only to be mentioned, before turning to the argument of the appellant, that in 1905 the Federal Parliament passed a statute [An Act respecting the Esquimalt and Nanaimo Rail way Company] declaring the railway of the Esquimalt and Nanaimo Railway Company to be a work for the general advantage of Canada. Sections 1 and 4 of that statute, 4-5 Edw. VII, c. 90, read as follows:
1. The railway of the Esquimalt and Nanaimo Railway Company, hereinafter called "the Company," is declared to be a work for the general advantage of Canada.
4. Nothing in this Act shall prejudicially affect the respective rights and liabilities of the province of British Columbia and of the Company, now existing or which heretofore existed by virtue of the provisions of the Act of the Legislature of the said province, 47 Victoria, chapter 14.
Section 260 of the Railway Act gives jurisdic tion to the Canadian Transport Commission to decide an application to discontinue passenger- train services. However the various provisions of the Railway Act, including section 260, apply to railway companies, which, like the Esquimalt and Nanaimo Railway Company, are subject to the legislative authority of Parliament, only if those provisions do not conflict with the provisions of a Special Act 2 passed by the Parliament of Canada and relating to the same subject-matter. That is what is prescribed by paragraph 3(1)(b) of the Railway Act:
3. (1) Except as in this Act otherwise provided,
(b) where the provisions of this Act and of any Special Act passed by the Parliament of Canada relate to the same subject-matter the provisions of the Special Act shall, in so far as is necessary to give effect to such Special Act, be taken to override the provisions of this Act.
The appellant's contention is that the Canadian Transport Commission has no jurisdiction to decide an application under section 260 of the Railway Act for discontinuance of the passenger- train service on the railway of the Esquimalt and Nanaimo Railway Company because there are two Special Acts passed by the Parliament of Canada which prescribe that this service shall not be dis continued. The first one of the two statutes that, it says, would thus override the provisions of section 260 of the Railway Act is the federal statute of 1884 which ratified the contract for the construc tion of the railway that had been entered into by the Federal Government and Messrs. Dunsmuir et al. The appellant interprets section 2 of that stat ute as giving statutory force to the provisions of
2 Section 2 of the Railway Act contains a definition of Special Act which reads in part as follows:
2.(I)...
"Special Act", when used with reference to a railway, means any Act under which the company has authority to con struct or operate a railway, or that is enacted with special reference to such railway, whether heretofore or hereafter passed ....
the construction contract and, in particular, to clauses 3 and 9 which imposed on the contractors the obligation to "maintain and work continuously a line of railway ... from Esquimalt to Nanaimo" and to "continuously and in good faith operate the same". According to the appellant, the terms of the contract for the construction of the railway are incorporated in the Special Act of 1884 so that the obligation that the contract imposed on the con tractors to operate the railway continuously must be considered as having been imposed by the stat ute itself.
The second Special Act which, according to the appellant, would override the provisions of section 260 in so far as they are applicable to the Esquimalt and Nanaimo Railway Company, is the federal statute of 1905 which declared the railway of that company to be a work for the general advantage of Canada. Section 4 of that Act pro vided that:
Nothing in this Act shall prejudicially affect the respective rights and liabilities of the province of British Columbia and of the Company, now existing or which heretofore existed by virtue of the provisions of the Act of the Legislature of the said province, 47 Victoria, chapter 14.
The Act of the Legislature of British Columbia referred to in this section is the Settlement Act of 1883 which, in its section 27, prescribed that the Esquimalt and Nanaimo Railway Company was to be bound by the contract for the construction of the railway between Messrs. Dunsmuir et al. and the Federal Government in the same manner as if the company had been a party to that contract. According to the appellant, section 27 of the Set tlement Act imposed on the Esquimalt and Nanai- mo Railway Company all the obligations of the contractors under the construction contract and, in particular, the obligation to operate the railway "continuously". Section 4 of the federal Act of 1905 must, always according to the appellant, be interpreted as prescribing that notwithstanding the declaration contained in section 1, all the liabilities of the company by virtue of the Settlement Act, and, among them, the obligation to operate the railway continuously, shall remain intact. The appellant therefore concludes that section 4 of the Act of 1905 is a provision of a Special Act adopted by the Parliament of Canada which prescribes that the railway between Esquimalt and Nanaimo be operated continuously and which, following para-
graph 3(1)(b) of the Railway Act, must override the provisions of section 260 of the Railway Act.
In my view, it is not necessary, in order to dispose of this appeal, to determine whether the appellant's interpretation of the two Special Acts to which I have just referred is the correct one because even if it were, the order which is the subject of this appeal would nevertheless be an order that the Commission had the power to make. Let us assume, for a moment, without so deciding, that the interpretation of the two Special Acts proposed by the appellant must be adopted. According to that interpretation, the two Special Acts prescribe that the railway service between Esquimalt and Nanaimo shall not be discontinued. Pursuant to paragraph 3(1)(b) of the Railway Act, the provisions of the two Special Acts override those of the Railway Act, including section 260, "in so far as is necessary to give effect" to that prescription. Now, in order to attain that object, it would obviously be necessary to deny to the Com mission and its committees the power to order that the railway service between Esquimalt and Nanai- mo be discontinued. However, the decision of the Review Committee which is the subject of this appeal is not an order of that kind; it is a decision which determines that the passenger-train service between Victoria and Courtenay is uneconomic and orders that it shall not be discontinued. In my view, in order to give effect to the asserted pre scription of the Special Acts, that the train service here in question be not discontinued, it is certainly not necessary to deny to the Commission the au thority conferred on it by section 260 to find that the operation of the passenger-train service is uneconomic since the existence of that power in no way conflicts with the obligation of the railway to continue the operation of its railway. It is not necessary either, in order to give effect to the Special Acts, to deny to the Commission the power to order that the railway service in question shall not be discontinued. That the Commission should have such a power in no way conflicts with the provisions of the Special Acts; on the contrary, the existence of that power would seem to be very useful, if not necessary, to give effect to the pre scription contained in the Special Acts.
For these reasons, I am of opinion that the order of the Review Committee was validly made. I would dismiss the appeal.
* * * HEALD J.: I concur.
* * * VERCHERE D.J.: I concur.
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