T-5483-81
Minister of Transport of Quebec, Attorney Gener
al of Quebec, Town of Mont-Laurier, Laurentian
Regional Development Committee, Corporation of
the Village of Parent, Municipal Corporation of
the Town of Senneterre, Laurentian Tourist Asso
ciation (Plaintiffs)
v.
Attorney General of Canada, Minister of Trans
port of Canada, Via Rail Canada Inc., Canadian
Pacific Limited, Canadian National Railway
(Defendants)
Trial Division, Walsh J.—Montreal, November
23; Ottawa, December 18, 1981.
Practice — Motions to strike pleadings — Plaintiffs apply
for a finding that an Order in Council discontinuing passen-
ger-train services is null and invalid, for an injunction requir
ing defendants not to act on the Order in Council, and for a
mandatory injunction requiring the defendants to maintain
existing services — Plaintiffs submit that the Governor Gener
al in Council was required to hear representations from all
interested parties before making such an Order, pursuant to a
duty to act fairly in administrative matters — Plaintiffs also
argue that the Order in Council cannot prevail over a contract
whereby Canadian Pacific Limited agreed to provide certain
passenger and freight services — Whether statements of claim
should be struck out as disclosing no reasonable cause of
action — Statements of claim struck out — National Trans
portation Act, R.S.C. 1970, c. N-17, ss. 45, 47, 48, 64(1) —
Railway Act, R.S.C. 1970, c. R-2, ss. 3(1), 6(1)(c), 7, 260(2),(8)
— Federal Court Rule 419 — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, s. 23.
Plaintiffs apply for a finding that an Order in Council
discontinuing certain passenger-train railway services is null
and invalid, and for the issue of an injunction requiring the
defendants not to act on the Order in Council. The plaintiffs
also seek a mandatory injunction requiring the defendants to
maintain the passenger services actually in existence, and dam
ages. The plaintiffs allege that the Order in Council is an
administrative order and that therefore the Governor General
in Council, pursuant to the duty to act fairly, was required to
hear representations from parties opposed to the proposed
Order, before making such an Order. The plaintiffs also submit
that the Order in Council cannot prevail over a contract
entered into in 1881, whereby Canadian Pacific Railway Com
pany undertook to maintain a sufficient number of trains each
day to transport freight and passengers with necessary fre
quency and speed, "maintaining at least one passenger-train
daily in each direction". The question is whether the statements
of claim should be struck out as disclosing no reasonable cause
of action.
Held, the statements of claim will be struck out. Section
64(1) of the National Transportation Act provides that the
Governor General in Council may either, upon petition of any
person or of his own motion, vary or rescind any order. The
wording of section 64(1) clearly establishes the right of the
Governor General to act on his own motion in connection with
the abolition or reduction in frequency of passenger services on
the lines in question without a prior recommendation to this
effect by the Commission. Even if the Order in Council can be
classified as one of an administrative nature, this would not
give the Court the right to find that the general duty to act
fairly required the Governor General in Council, before making
the present Order, to hear representations from interested
parties or that in acting as he did, the Governor General in
Council failed to observe a condition precedent to the exercise
of the power. The statements of claim do not disclose a
reasonable cause of action based on the jurisdictional attacks
on the validity of the impugned Order in Council. As to the
second issue, the federal law must prevail. Canadian Pacific
Limited is a railway company incorporated by a Special Act as
defined in the Railway Act. Section 3(1) of the Railway Act
provides that the Railway Act shall be construed as incorporate
with the Special Act. Section 6(1)(c) provides that the Act
applies to every railway whether the ownership was acquired or
exercised under the authority of the Parliament of Canada, or
of the legislature of any province. Section 7 provides that where
any railway, authorized by a Special Act of any province, is
declared to be a work for the general advantage of Canada, the
Railway Act applies to such railway to the exclusion of such of
the provisions of the Special Act as are inconsistent with the
Railway Act. Sections 45, 47 and 48 of the National Transpor
tation Act give authority to the Commission to inquire into
complaints by any interested party that a railway company has
violated or committed a breach of an agreement. It is clear that
it is the Commission and the Governor General in Council
which have such supervisory control notwithstanding the
Quebec statute, and that Canadian Pacific Limited must
comply with the impugned Order in Council.
City of Melville v. Attorney General of Canada [1982] 2
F.C. 3, followed. The Attorney General of Canada v. Inuit
Tapirisat of Canada [1980] 2 S.C.R. 735, discussed.
Quebec Railway, Light & Power Co. v. Montcalm Land
Co. [1927] S.C.R. 545, applied. Quebec North Shore
Paper Co. v. Canadian Pacific Ltd. [1977] 2 S.C.R. 1054,
referred to. R. v. Thomas Fuller Construction Co. (1958)
Ltd. [1980] 1 S.C.R. 695, referred to.
MOTIONS.
COUNSEL:
William J. Atkinson and Jean-Yves Bernard
for plaintiffs.
Jacques Ouellet, Q.C. and James Mabbutt
for defendants Attorney General of Canada
and Minister of Transport of Canada.
Michel Huart for defendant Via Rail Canada
Inc.
Christian Wendlandt for defendant Canadian
Pacific Limited.
Raynald Lecavalier for defendant Canadian
National Railway.
Armand Poupart, Q. C. and Charles Ouellet
for Town of Lachute.
SOLICITORS:
Boissonneault, Roy & Poulin, Montreal, for
plaintiffs.
Deputy Attorney General of Canada for
defendants Attorney General of Canada and
Minister of Transport of Canada.
Michel Huart, Montreal, for defendant Via
Rail Canada Inc.
Godbois, Wendlandt, Bennett & Bryer, Mon-
treal, for defendant Canadian Pacific Lim
ited.
Giard, Gagnon, Montreal, for defendant
Canadian National Railway.
Poupart, Thomas, Montreal, for Town of
Lachute.
The following are the reasons for judgment
rendered in English by
WALSH J.: Plaintiffs initiated these proceedings
on November 10, 1981, by a declaration seeking a
finding that Order in Council P.C. 1981-2171
[SOR/81-892] of August 6, 1981, of the Governor
General in Council adopted on the recommenda
tion of the Minister of Transport by virtue of
section 64(1) of the National Transportation Act'
is invalid and null, and the issue of an injunction
requiring Via Rail, C.N., C.P. and the Minister of
Transport of Canada not to act on this Order and
to prohibit them from eliminating or modifying the
passenger-train services referred to in the declara
tion, and the issue of a mandatory injunction
requiring Via Rail, C.N. and C.P. to maintain the
passenger services actually in existence as a result
of Orders of the Canadian Transport Commission
in effect on November 14, 1981, and for damages.
R.S.C. 1970, c. N-17.
This was accompanied on the same day by a
petition for interlocutory injunction returnable
November 16, 1981, requiring the maintenance of
the train services enumerated therein which by
virtue of the Order in Council in question were to
cease operating or to operate on a reduced fre
quency as of November 15, 1981. The trains in
question were as follows:
a) between Montreal—Hervey Junction; Hervey
Junction—Senneterre; Senneterre (La Sarre)—
Cochrane operating in accordance with Order of
the Canadian Transport Commission R-31300 of
August 14, 1980 which restated Orders Nos.
R-28795 and R-28149.
b) between Sainte-Foy—Hervey Junction in
accordance with Orders Nos. R-28149 and
R-28795.
c) between Montreal—Labelle—Mont-Laurier in
accordance with Orders R-29129 and R-29407.
d) between Montreal—Lachute—Montebello—
Ottawa in accordance with Order R-25782.
e) between Sainte-Foy—Chambord in accordance
with Orders R-25988 and R-28150.
f) between Montreal—Hervey Junction—Rivière-
à -Pierre—Chambord—Chicoutimi in accordance
with Orders R-31300 and R-25988.
Subsequently on November 13, 1981, in an
action bearing No. T-5526-81 brought by the City
of Lachute against the same defendants dealing
specifically with the Montreal—Lachute—Mon-
tebello—Ottawa service a declaratory judgment
and mandatory injunction were sought to declare
the said Order in Council P.C. 1981-2171 as null,
invalid and illegal and to require the defendants to
restore the Order of the Canadian Transport Com
mission R-25782 by providing passenger service on
the said line as provided on November 14, 1981.
This was also made presentable on November 16.
By consent of all parties the hearings of the
motions were adjourned to November 23, 1981,
since a similar matter was being heard before
Justice Collier of this Court in Regina, Saskatche-
wan, being Court No. T-5238-81, City of Melville,
Town of Watrous, Transport 2000 Saskatchewan
and the Attorney-General of Saskatchewan, plain
tiffs, and the Attorney General of Canada, Minis
ter of Transport of Canada, Via Rail Canada Inc.,
Canadian Pacific Limited, and Canadian National
Railways, defendants, and it was desirable to await
his judgment on the matter. His judgment and
reasons for judgment were issued on November 11,
1981, on a motion to strike the proceedings pursu
ant to Rule 419(1)(a) of the Rules of this Court,
which motion was granted [supra, page 3].
Similar motions to strike were made in the
present proceedings by the Attorney General of
Canada and the Minister of Transport of Canada,
by Canadian Pacific Limited, by Via Rail Canada
Inc., and motions to strike were also made by the
Attorney General of Canada and the Minister of
Transport of Canada, and Canadian Pacific Lim
ited in the City of Lachute case.
At the opening of the hearings on November 23
similar motions were permitted to be made by
defendant Canadian National Railways. An
application was also produced by the Municipal
Corporation of the Town of Senneterre and the
Laurentian Tourist Association, represented by the
same attorneys representing plaintiffs for permis
sion to be added as plaintiffs and in the injunction
application. For purposes of completing the record
this will be granted, but without costs, and the
style of cause will therefore be amended accord
ingly.
At the conclusion of the hearings permission was
also given to produce further affidavits of various
parties on behalf of plaintiffs in support of the
injunction application, waiving the delay for pro
duction. By agreement the two actions were joined
for hearing.
The principle of comity of judges would by itself
be a persuasive argument for following the judg
ment of Justice Collier in the Saskatchewan case
as, although it is permissible for judges at the
same level to disagree on the same issue, it is not
desirable that this should be done as this merely
creates confusion and uncertainty which reflects
unfavourably on the administration of justice. In
the present case the issue does not arise however as
I have read the reasons for judgment of my broth
er, Collier J. and fully agree with his conclusions
on the facts and law before him. The only way in
which a different conclusion would be reached in
the present actions therefore would be if the facts
were sufficiently different as to distinguish his
judgment, or new issues of law raised which were
not dealt with by him and which might lead to a
different result. The arguments were therefore
limited to this.
It may also be said that there is no need to go
into the evidence supported by plaintiffs' affidavits
that substantial hardship results to passengers and
potential passengers and to industries and busi
nesses in the areas as a result of the cancellation or
diminution of the passenger services in question, or
that problems may be created for plaintiffs in
arranging alternative means of transport, where
such is in fact possible, on short notice. Many
Orders in Council at all levels of government,
regulations and orders of various commissions,
municipal by-laws, and even statutes themselves of
necessity are damaging and harmful to some
people or groups of people while benefiting others
and it is not for that reason alone that they can be
found to be unfair. The authorities issuing them
must balance relative considerations of conve
nience and inconvenience in the decisions they
reach in so doing, taking into consideration social,
economic and political factors, and the courts must
keep aloof from such considerations, and not sub
stitute their view for those of the decision-making
bodies or express any views as to whether the
decisions themselves are fair or not, provided they
are made in conformity with the law and proce
dure required for the making of such decisions. It
is from the purely legal point of view that Justice
Collier reached his decision, with which I agree, as
the arguments submitted do not lead me to reach a
different conclusion.
With respect to the applications for interlocuto
ry injunction it may be said at once that they must
be dismissed as the event sought to be enjoined,
namely the cancellation of some services and oper
ation of others at less frequent intervals had
already taken place when they came on for hearing
and an injunction cannot be issued to prevent
something which has already taken place. This
does not mean that the mandatory injunctions
sought by plaintiffs in their declaration in the
present proceedings and by the City of Lachute in
its action seeking a declaratory judgment were not
still an issue before the Court at the hearing on
November 23, 1981. Moreover in dismissing plain
tiffs' application for an interlocutory injunction
this will be done without costs since no blame for
the delay attaches to plaintiffs. The application
was filed on November 10 but it was not feasible
to arrange a hearing before November 16, nor
desirable to do so in view of the pending proceed
ings on the same issue before Justice Collier in
Saskatchewan, and since by November 16 it was
already too late to stop the Order in Council
complained of from taking effect, the further
adjournment to November 23 caused no prejudice.
It might be mentioned in passing that counsel for
the Attorney General of Canada submitted a
memorandum of fact and law in the Saskatchewan
case contending that there is no act or conduct,
present or future of either the Attorney General of
Canada or the Minister of Transport of Canada
which could be the subject of an injunction, the
Attorney General being sued as representative of
the Crown and the Minister of Transport being a
member of the Privy Council upon whose advice
the Governor General in Council acted in making
the Order in Council P.C. 1981-2171, and now
having no further role to play in the discontinu
ance of the railway service complained of, and that
in any event jurisdiction to make mandatory orders
in respect of the operation of railroads, as opposed
to declarations of rights, is vested by Parliament in
the Canadian Transport Commission and does not
lie with the Courts (Part IV, National Transpor
tation Act and section 23, Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10). It is not neces
sary however, to go into the further substantial
arguments raised in the said memorandum as to
why neither an interlocutory injunction nor a man
datory injunction can issue against the defendants,
the Attorney General of Canada or the Minister of
Transport of Canada, nor to express any conclu
sion as to the validity of any such arguments or of
the arguments to which I have specifically referred
in view of the conclusion which I have reached
that the statements of claim must be struck in any
event against all plaintiffs.
I now turn to the principal issue, namely wheth
er the statements of claim should be struck pursu
ant to Rule 419 as not disclosing a reasonable
cause of action. On this issue plaintiffs raised two
arguments. The first one is a general one to the
effect that Collier J. in the Saskatchewan case, in
applying the Supreme Court case of the The
Attorney General of Canada v. Inuit Tapirisat of
Canada failed to make the distinction that that
case was an Order of a legislative nature, whereas
the present Order is an administrative one. It is
true that in the Inuit case which dealt with the
failure of the Governor General in Council in
dealing with an appeal from an order of the
Canadian Radio—television and Telecommunica
tions Commission fixing telephone rates for Bell
Canada, after receiving an answer from Bell
Canada to the appeal adopted an Order in Council
before receipt of appellant's answer to this submis
sion of Bell Canada, it is stated at page 754:
This is legislative action in its purest form where the subject
matter is the fixing of rates for a public utility such as a
telephone system.
This extract follows the statement however that by
virtue of the provisions of section 64(1) of the
National Transportation Act "the Governor in
Council may 'of his motion' vary or rescind any
rule or order of the Commission". On the same
page the judgment goes on to state:
There are many subscribers to the Bell Canada services all of
whom are and will be no doubt affected to some degree by the
tariff of tolls and charges authorized by the Commission and
reviewed by the Governor in Council. All subscribers should
arguably receive notice before the Governor in Council pro
ceeds with its review. The concluding words of subs. (1) might
be said to support this view where it is provided that:
... any order that the Governor in Council may make with
respect thereto is binding upon the Commission and upon all
parties.
I read these words as saying no more than this: if the nature of
the matter before the Governor in Council under s. 64 concerns
2 [1980] 2 S.C.R. 735.
parties who have been involved in proceedings before the
administrative tribunal whose decision is before the Governor
in Council by virtue of a petition, all such persons, as well as
the tribunal or agency itself, will be bound to give effect to the
order in council issued by the Governor in Council upon a
review of the petition.
Again on pages 754-755 we find the statement:
It was pointed out that in the past the Governor in Council
has proceeded by way of an actual oral hearing in which the
petitioner and the contending parties participated (P.C. 2166
dated 24/10/23; and P.C. 1170 dated 17/6/27). These pro
ceedings do no more than illustrate the change in growth of our
political machinery and indeed the size of the Canadian com
munity. It was apparently possible for the national executive in
those days to conduct its affairs under the Railway Act, supra,
through meetings or hearings in which the parties appeared
before some or all of the Cabinet. The population of the
country was a fraction of that today. The magnitude of govern
ment operations bears no relationship to that carried on at the
federal level at present. No doubt the Governor in Council
could still hold oral hearings if so disposed. Even if a court had
the power and authority to so direct (which I conclude it has
not) it would be a very unwise and impractical judicial princi
ple which would convert past practice into rigid, invariable
administrative procedures. Even in cases mentioned above,
while the order recites it to have been issued on the recommen
dation of the responsible Minister, there is nothing to indicate
that the parties were informed of such a recommendation prior
to the conduct of the hearing. [Underlining mine.]
Justice Estey who rendered the judgment goes on
to state at pages 755-756:
It is my view that the supervisory power of s. 64, like the power
in Davisville, supra, is vested in members of the Cabinet in
order to enable them to respond to the political, economic and
social concerns of the moment. Under s. 64 the Cabinet, as the
executive branch of government, was exercising the power
delegated by Parliament to determine the appropriate tariffs
for the telephone services of Bell Canada. In so doing the
Cabinet, unless otherwise directed in the enabling statute, must
be free to consult all sources which Parliament itself might
consult had it retained this function. This is clearly so in those
instances where the Council acts on its own initiative as it is
authorized and required to do by the same subsection. There is
no indication in subs. (1) that a different interpretation comes
into play upon the exercise of the right of a party to petition the
Governor in Council to exercise this same delegated function or
power. The wording adopted by Parliament in my view makes
this clear. The Governor in Council may act "at any time." He
may vary or rescind any order, decision, rule or regulation "in
his discretion." The guidelines mandated by Parliament in the
case of the CRTC are not repeated expressly or by implication
in s. 64. The function applies to broad, quasi-legislative orders
of the Commission as well as to inter-party decisions. In short,
the discretion of the Governor in Council is complete provided
he observes the jurisdictional boundaries of s. 64(1).
Again at page 756 we find the statement:
Indeed it may be thought by some to be unusual and even
counter-productive in an organized society that a carefully
considered decision by an administrative agency, arrived at
after a full public hearing in which many points of view have
been advanced, should be susceptible of reversal by the Gover
nor in Council. On the other hand, it is apparently the judg
ment of Parliament that this is an area inordinately sensitive to
changing public policies and hence it has been reserved for the
final application of such a policy by the executive branch of
government. Given the interpretation of s. 64(1) which I adopt,
there is no need for the Governor in Council to give reasons for
his decision, to hold any kind of a hearing, or even to acknowl
edge the receipt of a petition. It is not the function of this
Court, however, to decide whether Cabinet appeals are desir
able or not. I have only to decide whether the requirements of s.
64(1) have been satisfied.
The learned Justice Estey at page 758 goes on to
state that the answer is not to be found in continu
ing the search for words that will clearly and
invariably differentiate between judicial and
administrative on the one hand, or administrative
and legislative on the other and concludes that
when the legislature has delegated its function to
one or a tier of agencies (in the present case the
Canadian Transport Commission in the first
instance and the Governor in Council in the
second)
... the Court must fall back upon the basic jurisdictional
supervisory role and in so doing construe the statute to deter
mine whether the Governor in Council has performed its
functions within the boundary of the parliamentary grant and
in accordance with the terms of the parliamentary mandate.
The precise terminology employed by Parliament in s. 64
does not reveal to me any basis for the introduction by implica
tion of the procedural trappings associated with administrative
agencies in other areas to which the principle in Nicholson,
supra, was directed. The roots of that authority do not reach
the area of law with which we are concerned in scanning s.
64(1).
The said section 64(1) reads as follows:
64. (1) The Governor in Council may at any time, in his
discretion, either upon petition of any party, person or company
interested, or of his own motion, and without any petition or
application, vary or rescind any order, decision, rule or regula
tion of the Commission, whether such order or decision is made
inter partes or otherwise, and whether such regulation is gener
al or limited in its scope and application; and any order that the
Governor in Council may make with respect thereto is binding
upon the Commission and upon all parties.
and, as has been pointed out, is extremely broad in
scope.
While the facts in the present case and in the
Inuit case were substantially different in that the
latter dealt with a petition which had actually been
made to the Governor General in Council to set
aside the decision of the Commission establishing
telephone rates, whereas in the present case the
Governor General in Council acted on his own
motion in connection with the abolition or reduc
tion in frequency of passenger services on the lines
in question without a prior recommendation to this
effect by the Commission, the wording of section
64(1) clearly establishes this right. The failure to
refer the issue to the Commission for consideration
by it and a hearing of representations from inter
ested parties, while somewhat unusual, was a deci
sion which the Governor General in Council was
entitled to make. It may well be that the lengthy
delays and political controversy which would result
from such a reference while the railroads in ques
tion continued to lose substantial sums of money
on the continued operation of such lines were
factors in the decision to proceed in this manner.
Moreover the end result would almost certainly
have been the same. If the Canadian Transport
Commission after such hearings had refused to
recommend the abolition or reduction of service on
the lines in question this decision could have been
overruled by the Governor General in Council on
its own motion by application of section 64, while
in the converse case if the Commission had recom
mended that the lines be abolished or service
reduced this decision would not have been inter
fered with on appeal by an interested party. (How-
ever this is purely speculative and whatever the
motive may have been it is not subject to comment
by the Court.)
The Inuit case discussed the duty to act fairly
resulting from the Nicholson case (Nicholson v.
Haldimand-Norfolk Regional Board of Commis
sioners of Police) 3 and Martineau v. Matsqui
Institution Disciplinary Board (No. 2) 4 ; then at
page 750 in the Inuit case the judgment states:
3 [1979] 1 S.C.R. 311.
4 [1980] 1 S.C.R. 602.
... the existence of such a duty no longer depends on classify
ing the power involved as "administrative" or "quasi-judicial",
it is still necessary to examine closely the statutory provision in
question in order to discern whether it makes the decision-mak
er subject to any rules of procedural fairness.
As a question of fact I fail to see the distinction
which counsel for plaintiffs makes between an
order fixing a tariff, which he admits is a legisla
tive order, and an order cancelling or reducing
train service which he contends is administrative,
but in any event it would appear that even if the
Order in Council being attacked can be classified
as one of an administrative nature this would not
give the Court the right to find that the general
duty to act fairly (which can be applied even to an
Order in Council—see Inuit case at page 748
where it is stated:
Let it be said at the outset that the mere fact that a statutory
power is vested in the Governor in Council does not mean that
it is beyond review. If that body has failed to observe a
condition precedent to the exercise of that power, the court can
declare that such purported exercise is a nullity.)
required the Governor General in Council before
making the present Order to hear representations
from interested parties in opposition to the pro
posed Order or that in acting as he did the Gover
nor General in Council failed to observe a condi
tion precedent to the exercise of the power.
In the Saskatchewan case the argument was
raised before Collier J. that the various previous
Orders of the Canadian Transport Commission
which were amended and in fact reversed by the
Order in Council P.C. 1981-2171 of August 6,
1981, which it was sought to set aside, were spent,
having been made some time previously, so that
further hearings should be required by the Com
mission before interference with them by the Gov
ernor General in Council. Collier J. rejected these
arguments stating that C.T.C. Order No. R-26520
adopted and implemented the so-called Final Plan
and then went on to amend various passenger
schedules and provided for Via to operate on the
tracks of C.P. and C.N., and Order No. R-30914
made some alterations to this, but Order No.
R-31300 is as he saw it the pulling together in one
Order of all the passenger-train services existing at
the time of the Order. He rejected the argument
that this Order was not made following an applica
tion by the Railways pursuant to section 260(2) of
the Railway Acts, pointing out that section 48 of
the National Transportation Act gave the Canadi-
an Transport Commission wide powers to pass the
Order on its own motion.
He also rejected the argument that Orders Nos.
R-22125 and R-22346 in January and February
1976 had expired since section 260(8) of the Rail
way Act requires the Canadian Transport Com
mission to review at intervals not exceeding five
years applications for discontinuance if it has
issued an order to the effect that an uneconomic
passenger-train service should not be discontinued.
He states that he sees nothing in the statute which
provides that the orders cannot be varied by the
C.T.C. or by the Cabinet after five years and this
is especially so with respect to the Governor Gen
eral in Council who can vary or rescind such
orders "at any time".
While in connection with the trains involved in
the present proceedings the initial Orders of the
Canadian Transport Commission bore different
numbers from those before Collier J. in the Sas-
katchewan case, Order No. R-31300 is referred to
in Order in Council P.C. 1981-2171 as is the Final
Plan.
I conclude therefore that his judgment cannot
be differed from on the basis of the arguments
made before me, and that the statements of claim
do not disclose a reasonable cause of action based
on the jurisdictional attacks on the validity of the
impugned Order in Council so that based on these
grounds the actions cannot succeed.
There was a second question argued by plaintiffs
in connection with the present motion which, by its
nature, was not before Justice Collier in Saskatch-
ewan. It concerns only one of the rail lines in
question, that from Ottawa—Montebello—
Lachute—Montreal and the issue is raised not
only in plaintiffs' action, but is the sole issue raised
in the action brought by the City of Lachute. By a
5 R.S.C. 1970, c. R-2.
contract entered into on March 4, 1881, between
the Crown in the right of the Province of Quebec
and Canadian Pacific Railway Company the latter
acquired from the Province of Quebec part of the
rail line known as Quebec—Montreal—Ottawa
and Occidental Railway running between Mon-
treal and Aylmer, Quebec, with a branch to the
City of Ottawa and a branch to the City of St.
Jerome in Quebec, together with rolling stock. It is
not necessary to go into the extensive provisions of
the agreement but by clause 16 the railway com
pany undertook to maintain a sufficient number of
trains each day to transport freight and passengers
with necessary frequency and speed "maintaining
at least one passenger train daily in each direc
tion" [translated]. It was specified that the agree
ment would be subject to confirmation by the
Quebec Legislature and this was done by the Act
of 45 Vict., c. 19.
The issue in the present proceedings is not
whether this agreement remains binding on
defendant Canadian Pacific Limited or whether it
would be subject to a claim for damages for the
breach of it, but whether as a matter of law the
Order in Council P.C. 1981-2171 can prevail over
and have the effect of setting aside this contract,
ratified by Quebec law. There is no issue as to the
fact that defendant Canadian Pacific Limited is a
railway company incorporated by a statute falling
within the definition of Special Act as defined in
section 2 of the Railway Act as amended. Section
3(1) of the Railway Act reads as follows:
3. (1) Except as in this Act otherwise provided,
(a) this Act shall be construed as incorporate with the
Special Act, and
(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.
There is no question that the provisions of the
Railway Act apply to said defendant. Section
6(1)(c) thereof reads as follows:
6. (1) The provisions of this Act, without limiting the effect
of section 5, extend and apply to
(c) every railway or portion thereof, whether constructed
under the authority of the Parliament of Canada or not, now
or hereafter owned, controlled, leased, or operated by a
company wholly or partly within the legislative authority of
the Parliament of Canada, or by a company operating a
railway wholly or partly within the legislative authority of
the Parliament of Canada, whether such ownership, control,
or first mentioned operation is acquired or exercised by
purchase, lease, agreement or other means whatsoever, and
whether acquired or exercised under authority of the Parlia
ment of Canada, or of the legislature of any province, or
otherwise howsoever; and every railway or portion thereof,
now or hereafter so owned, controlled, leased or operated
shall be deemed and is hereby declared to be a work for the
general advantage of Canada. [Underlining mine.]
Section 7 reads as follows:
7. Where any railway, the construction or operation of which
is authorized by a Special Act passed by the legislature of any
province, is declared, by any Act of the Parliament of Canada,
to be a work for the general advantage of Canada, this Act
applies to such railway, and to the company constructing or
operating the same, to the exclusion of such of the provisions of
the said Special Act as are inconsistent with this Act, and in
lieu of any general railway Act of the province.
It is clear that the federal law must prevail.
Reference was made to the Supreme Court case
of Quebec Railway, Light & Power Company v.
Montcalm Land Company 6 in which the headnote
read in part:
A street railway company operating within a province, original
ly incorporated by a provincial legislature but whose under
taking was subsequently declared by a Dominion Act to be a
work for the general advantage of Canada, is not subject to
the jurisdiction of a public service commission created by the
province, but the execution of its powers is, by the provisions
of the Railway Act, within the jurisdiction of the Board of
Railway Commissioners for Canada.
The Railway Act of Canada applies in the present case not
withstanding an agreement between the railway appellant and
the city of Quebec providing for the reconciliation of differ
ences between them by way of appeal to the Quebec Public
Service Commission; such a clause cannot be interpreted to
confer authority on the commission to regulate and direct
works and operations which are within the exclusive powers of
the Dominion Parliament.
Although not directly in point it is interesting to
note a decision rendered on May 16, 1980 in
6 [1927] S.C.R. 545.
connection with the referendum bearing No. 500-
02-022805-803 by Chief Justice Alan B. Gold,
Associate Chief Justice Georges Chassé and
Deputy Chief Judge Gaston Rondeau in the case
of Boucher v. Mediacom, which concerned
expenses incurred in connection with the said ref
erendum by the Federal Government. At page 4
the judgment states:
[TRANSLATION] No law has any effect on the rights of the
Crown unless they are expressly included therein (s. 42, Inter
pretation Act, I-16, S.Q. 1978) or at least have been accepted
which is not the case here so that even the Government of
Quebec is not bound by the Referendum Act, S.Q. 1978, C. 6.
A fortiori the Government of Canada is not bound by the
Quebec legislation unless it has accepted it which also is not the
situation.
Following this principle the expenses incurred by the Govern
ment of Canada whether they favour or do not favour "directly
or indirectly ... an option submitted to a referendum" (s. 27 of
c. 6) cannot be controlled expenses.
It is admitted that all the expenses in issue were paid by the
Government of Canada.
In deciding thus we do not find the provisions of section 3 of
chapter 6 ultra vires but we do conclude that they are inopera
tive as against the Government of Canada.
Sections 45, 47 and 48 of the National Trans
portation Act give authority to the Commission to
inquire into complaints by any interested party
that a railway company has violated or committed
a breach of an agreement and the Commission
may even initiate such an inquiry on its motion. I
make no finding as to whether this can now be
done in view of the provisions of the Order in
Council. It is clear that it is the Commission and
the Governor General in Council which have such
supervisory control notwithstanding the Quebec
statute, and that defendant Canadian Pacific Lim
ited must comply with Order in Council P.C.
1981-2171.
A subsidiary question was raised as to whether
this Court has jurisdiction to consider any such
question or whether, since it arises out of contract
it would not be a matter for decision by the
Superior Court of the Province of Quebec if pro
ceedings were brought by the City of Lachute or
by the Attorney General or Minister of Transport
of Quebec. Reference was made to the case of
Quebec North Shore Paper Company v. Canadian
Pacific Limited [1977] 2 S.C.R. 1054, to
McNamara Construction (Western) Limited v.
The Queen [1977] 2 S.C.R. 654 and to The Queen
v. Thomas Fuller Construction Co. (1958) Limited
[1980] 1 S.C.R. 695, but it is unnecessary to go
into these issues of jurisdiction in view of the
finding I have made as to the applicability of the
Railway Act and the National Transportation Act
to defendant Canadian Pacific Limited. It can be
noted however that the railway line in question is a
work and undertaking connecting a province with
any other province or extending beyond the limits
of a province within the meaning of section 23 of
the Federal Court Act.
This argument, affecting this one line does not
therefore justify a finding different from that
reached by Justice Collier in the Saskatchewan
case.
The statements of claim in both actions will
therefore be struck with costs, and the orders will
be endorsed on the various motions in the records.
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.