Judgments

Decision Information

Decision Content

A-786-81
The Jasper Park Chamber of Commerce and Sterndale Holdings Ltd. (Appellants)
v.
Governor General in Council as represented by the Attorney General of Canada, VIA Rail Canada Inc., and Canadian National Railway Company (Respondents)
Court of Appeal, Heald, Le Dain JJ. and Hyde D.J.—Calgary, May 13 and 14; Ottawa, Septem- ber 20, 1982.
Railways — Appeal from judgment of Trial Division strik ing out statement of claim on ground facts alleged therein failed to disclose reasonable cause of action — Statement of claim alleging impugned Order in Council passed under s. 64, National Transportation Act varied orders of Canadian Transportation Commission which had effect of discontinuing certain passenger-train services; that effect of impugned Order in Council was to discontinue passenger trains declared as such by Order R-31300 without VIA and C.N.R. having made application to C.T.C. as required by s. 260, Railway Act; that because requirements of s. 260 were not satisfied Order in Council void and that Order in Council is regulation within meaning of Statutory Instruments Act and because not regis tered with Clerk of Privy Council as required by the Act did not come into force — Whether Governor in Council had jurisdiction under s. 64(1) of National Transportation Act to make order — Whether Trial Judge erred in finding Order in Council in force notwithstanding failure of Governor in Coun cil to comply with s. 5 of Statutory Instruments Act — Based on Inuit Tapirisat case, exercise of Governor in Council's power under s. 64(1) is subject to review by courts if Governor in Council fails to observe condition precedent to exercise of
power Condition precedent involves existence of valid and subsisting order of C.T.C. and requires that order be relevant in that variation deals with same subject-matter — Governor in Council not entitled under s. 64(1) to do, under guise of variation something of entirely different nature — Constrained to deal with same type of order as Commission dealt with Trial Judge did not err in finding Order in Council in force notwithstanding failure of Governor in Council to comply with s. 5 — Based on reasoning in Melville case requirement in s. 5 that regulation be transmitted for registration within 7 days directory not mandatory — As to whether statement of claim discloses reasonable cause of action, claim should be struck only when Court satisfied case beyond doubt — While certain paragraphs of statement of claim without merit, claim for declaration Order in Council invalid and void not beyond
doubt In that at time of hearing respondents had not pleaded to statement of claim and appellants therefore had option under R. 421 to amend pleadings without leave, Court could not conclude action as it relates to that claim could not succeed — Whether judgment has practical effect is irrelevant; no branch of government is above law and if it acts contrary to statute courts entitled to declare so — Appeal allowed — National Transportation Act, R.S.C. 1970, c. N-17, ,s. 64 —
Railway Act, R.S.C. 1970, c. R-2, ss. 260, 261 — Statutory Instruments Act, S.C. 1970-71-72, c. 38, s. 5(1) — Federal Court Rules 419(1 )(a), 421.
Practice — Motion to strike pleadings — Appeal from order of Trial Division striking out statement of claim as not disclosing reasonable cause of action — Appeal allowed — Certain paragraphs without merit but Court unable to con clude claim for declaration as to invalidity of Order in Council cannot succeed — Possibility of amending pleadings without leave under R. 421 — Federal Court Rules 419(1 )(a), 421.
This is an appeal from a judgment of the Trial Division granting the motions of the respondents for an order striking out the appellants' statement of claim and dismissing the action against them. The action is in relation to a number of orders by the Governor in Council which established a passenger-train service for western Canada. The statement of claim alleged that the impugned Order in Council, purportedly passed under the authority of section 64 of the National Transportation Act, varied certain Canadian Transport Commission (C.T.C.) orders which had the effect of discontinuing passenger train services that connected Winnipeg, Saskatoon, Edmonton, Jasper, Kamloops and Vancouver. It further alleged that the effect of the Order in Council was to discontinue passenger- train services which had been declared as such in a previous order without VIA and C.N.R. having made application to the C.T.C. as required by section 260 of the Railway Act and that the Order was therefore invalid and void. Finally it alleged that the Order in Council was a regulation within the meaning of the Statutory Instruments Act and that because it was not registered with the Clerk of the Privy Council as required by section 5 of the Act, it was invalid. The appellants contend that the Trial Judge erred in finding that the Governor in Council had jurisdiction under section 64 of the National Transporta tion Act to pass the impugned order and that he erred in finding that Order valid notwithstanding the failure of the Governor in Council to comply with the provisions of the Statutory Instruments Act.
Held, the appeal is allowed. With regard to the issue of whether the Governor in Council had jurisdiction under subsec tion 64(1) of the National Transportation Act to make the impugned order, two Schedules of that order are relevant: Schedules XV and XVI. The relevant group in Schedule XVI is group 17 which has the effect of amending the passenger-train service connecting Winnipeg, Saskatoon, Edmonton, Jasper, Kamloops and Vancouver as declared by Order R-31300. The Inuit Tapirisat case is authority for the proposition that the exercise of power under subsection 64(1) is subject to review by
the courts if the Governor in Council fails to observe a condi tion precedent to the exercise of that power. This condition precedent involves the existence of a valid and subsisting order of the C.T.C. and the requirement that the order be relevant in that the variation made deals with the same subject-matter as the order it purports to vary. Order R-22346 is not a relevant order for the purposes of the discontinuing order contained in Schedule XV, section 2 because the service which is the subject-matter of Order R-22346 is not the same service as that ordered to be discontinued in that section. The original passen- ger-train service which was declared by Order R-6751 and continued by Order R-22346 was changed by the Final Plan for Western Transcontinental Passenger Train Service as noted in Order R-31300. Because of the change effected by the Final Plan the service ordered to be discontinued was different from the service that the C.T.C. ordered not be discontinued by the C.N.R. in Order R-22346. The Governor in Council is not entitled under subsection 64(1) to do, under the guise of a variation, something of an entirely different nature. Under that subsection Cabinet is constrained to deal with the same type of order as the Commission was dealing with. It does not author ize the Governor in Council to vary any and all Commission orders no matter when they are issued or regardless of their subject-matter.
With regard to section 3 of Schedule XV which purportedly amends Order R-26520; Order R-26520 amended Order R-6751 and is therefore dependant for its validity on the existence of that Order. After Order R-6751 was repealed Order R-26520 could no longer be considered a valid and speaking Order. Based on this when Schedule XV, section 3 was passed the condition precedent was not fulfilled and the section is therefore invalid. There is also a problem of relevance in respect of section 3. Order R-26520 deals with the declara tion or definition of a passenger-train service; not with its discontinuance. However, section 3, while calling itself a "variation" orders discontinuance of certain segments of pass- enger-train service.
However, the Governor in Council did act within his jurisdic tion in respect of Schedule XVI and that schedule, which amends Order R-31300, is valid. The portion of Order R-31300 which the schedule purports to amend by deleting certain segments and decreasing minimum frequency, is that which "declared", within the meaning of subsection 260(1) of the Railway Act, as a passenger-train service, the C.N.R. service from Winnipeg through Saskatoon, Edmonton, Jasper, Kam- loops to Vancouver. The Commission clearly had the power to make that declaration under subsection 260(1) and it was, therefore, a validly speaking Commission order which the Governor in Council was entitled to vary or rescind pursuant to subsection 64(1) of the National Transportation Act. It was also a relevant Order for the purposes of Schedule XVI because it was an Order declaring or defining a passenger-train service and not a discontinuance Order.
The Trial Judge did not err in finding that the Order in Council had come into force notwithstanding the failure of the Governor in Council to comply with section 5 of the Statutory Instruments Act. Based on the reasoning in the Melville case the requirement in section 5 that a regulation be transmitted for registration within 7 days is directory not mandatory.
With regard to the issue of whether the statement of claim discloses a reasonable cause of action; on such a motion all facts pleaded in a statement of claim are deemed to have been proven. The claim should be struck out or the action dismissed only where the Court is satisfied that the case is beyond doubt. Based on the Court's conclusions in relation to the foregoing issues and adopting the criteria applied in the Inuit Tapirisat case, the paragraphs of the statement of claim claiming a declaration that the impugned Order in Council has not come into force and that the plaintiffs are entitled to receive passen ger train service from VIA and C.N.R. as set out in R.T.C. Order R-31300 and claiming an injunction restraining the defendants from discontinuing service affecting Jasper as set out in R.T.C. Order R-31300 are clearly without merit. How ever, the claim for a declaration that the Order in Council is invalid and void is not beyond doubt. Since, at the time of hearing the respondents had not yet pleaded to the statement of claim, pursuant to Rule 421 it is still open to the appellants to amend their pleadings without leave. At this point, therefore, the Court cannot conclude that the action as it relates to the claim in subparagraph a) could not succeed. The argument that the statement of claim should not be allowed to stand because any relief granted under subparagraph a) would not have any practical effect fails. Regardless of whether a judgment has practical effect, no branch of the government is above the law and if it acts contrary to a statute the courts are entitled to declare so: Kelso v. Her Majesty The Queen. Therefore, if the Governor in Council has enacted an Order in Council which is partly or wholly invalid the courts are entitled to make a declaration of invalidity. While a declaration of invalidity might have legal effect but little practical effect in so far as the respondents are concerned, the matter is not beyond doubt and should, therefore, be allowed to proceed. Because the respond ents are not precluded from moving in the Trial Division for an order striking out portions of the statement of claim and the appellants may still amend their claim it would be premature to order that the parts of the claim relating to Schedule XVI of the impugned Order in Council be struck out pursuant to Rule 419(1)(a) on the grounds that part of the order is valid and part is not with the result that only part of the statement of claim raises a triable issue.
CASES JUDICIALLY CONSIDERED
APPLIED:
The Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; Kelso v. Her Majes ty The Queen, [1981] 1 S.C.R. 199.
COUNSEL:
J. E. Redmond, Q.C. and B. Zalmanowitz for appellants.
E. A. Bowie, Q.C. for respondent Attorney General of Canada.
M. E. Rothstein, Q.C. and L. M. Huart for respondent VIA Rail Canada Inc.
Grant H. Nerbas and P. Antymniuk for respondent Canadian National Railway Com pany.
SOLICITORS:
Milner & Steer, Edmonton, for appellants.
Deputy Attorney General of Canada for respondent Attorney General of Canada. Aikins, MacAulay & Thorvaldson, Win- nipeg, for respondent VIA Rail Canada Inc. Canadian National Railways Legal Depart ment, Winnipeg, for respondent Canadian National Railway Company.
The following are the reasons for judgment rendered in English by
HEALD J.: This is an appeal from a judgment of the Trial Division [Federal Court, T-5384-81, judgment dated November 11, 1981] wherein the motions of the respondents for an order pursuant to Rule 419(1)(a) striking out the appellants' statement of claim and dismissing the action against them were granted with costs. As stated by the learned Trial Judge, this case is a parallel case to the action brought by the City of Melville et al. which also sought a declaration that Order in Council P.C. 1981-2171 [SOR/81-892] dated August 6, 1981 (the impugned Order in Council) was invalid and requesting ancillary injunctive relief. This appeal was heard immediately follow ing the appeal in the City of Melville case [1983] 2 F.C. 123.
The basis upon which the learned Trial Judge granted the motions herein was that the facts alleged in the statement of claim failed to disclose a reasonable cause of action. For the purposes of the motions before him, he assumed the facts alleged in the statement of claim to be admitted
and true, a proper approach when considering an application to strike under Rule 419(1)(a).
The statement of claim alleged, inter alia, that the impugned Order in Council, purportedly passed under the authority of section 64 of the National Transportation Act, R.S.C. 1970, c. N-17, varied certain Orders of the Canadian Transport Commission (the C.T.C.) which had the effect of discontinuing certain passenger-train ser vices which connected Winnipeg, Saskatoon, Edmonton, Jasper, Kamloops and Vancouver. The statement of claim went on to allege that the effect of the impugned Order in Council was to discon tinue the passenger-train services declared as such in Order R-31300 without VIA and Canadian National having made an application to the C.T.C. as required by section 260 of the Railway Act, R.S.C. 1970, c. R-2, and that since the require ments of section 260 were not satisfied, the impugned Order in Council is therefore invalid and void.
The statement of claim also alleged (paragraph 14) that the impugned Order in Council: "... is a regulation within the meaning of the Statutory Instruments Act, S.C. 1970-71-72, c. 38, as amended", and "... was not registered with the Clerk of the Privy Council as required by the Statutory Instruments Act and therefore has not come into force."
The appellants base their appeal on two grounds: firstly, that the Trial Judge erred in finding that the Governor General in Council had jurisdiction under section 64 of the National Transportation Act to pass the impugned Order in Council and, secondly, that he erred further in finding that the impugned Order in Council was valid notwithstanding the failure of the Governor General in Council to comply with the provisions of the Statutory Instruments Act.
I propose to deal initially with the submission that Order in Council, P.C. 1981-2171 was passed without jurisdiction thereby rendering it invalid and void.
THE C.T.C. ORDERS
For a proper appreciation of this submission as it was argued before us by counsel for these appel-
lants, it is necessary, in my view, to refer to a number of Orders and a "Final Plan" of the Railway Transport Committee (R.T.C.) of the C.T.C. Those documents, set out in chronological sequence, are as follows:
1. Order R-6751—issued September 19, 1969— That Order, inter alia, declared the Canadian National Railway (C.N.R.) passenger-trains 1, 2, 3 and 4 (otherwise known as the Super-Conti nental) to be a passenger-train service for the purposes of what are now sections 260 and 261 of the Railway Act.
2. Order R-11061—issued February 26, 1971— That Order was made as a result of an applica tion by the respondent C.N.R. to discontinue, inter alla, their Super-Continental trains 1, 2, 3 and 4.' The Committee ordered:
(a) that the Super-Continental service was uneconomic and was likely to continue to be uneconomic; and
(b) that C.N.R. should not discontinue the operation of the Super-Continental trains 1, 2, 3 and 4. The Committee said, in this regard (A.B., Vol. 1, pp. 91-93):
Pending the development of the integrated plan of ration alization of transcontinental passenger services of the main-line railways, we determine that it is in the public interest that the operation of the Super-Continental should not be discontinued.
3. Order R-22346—issued February 26, 1976— That Order was stated to be a reconsideration 'of C.N.R.'s application to discontinue the opera tion of the Super-Continental trains 1, 2, 3 and 4 (Order R-11061) pursuant to the provi sions of subsection 260(8) of the Railway Act. 2 The Committee determined, inter alfa, that the passenger-train service comprising trains 1, 2, 3 and 4 was uneconomic and was likely to contin ue to be uneconomic and ordered, inter alla,
' Trains I and 2 operated between Montreal and Vancouver via Ottawa-Winnipeg-Saskatoon-Edmonton-Jasper, etc. During the winter months trains 3 and 4 operated between Toronto and Capreol where they joined trains 1 and 2. In the summer months, trains 3 and 4 ran between Toronto and Vancouver.
that the C.N.R. should not discontinue opera tion of the said passenger-train service.
4. Final Plan for Western Transcontinental Pas senger Train Service—issued by the R.T.C. in October of 1977
It was said (A.B., Vol. 1, p. 120) that the Final Plan would feature, inter alia:
(i) a daily Montreal/Toronto-Vancouver train running on a C.P. rail track via Thunder Bay, Winnipeg and Calgary with a schedule pat terned on that of the present "Canadian"; and
(ii) a connecting daily Winnipeg-Vancouver train running on a C.N. track via Edmonton, with a schedule basically the same as that of the train via Calgary.
The Final Plan, as issued in October of 1977, was not in the form of a Committee Order. The Committee stated its belief that it would be the responsibility of the respondents VIA and C.N.R. and of the Canadian Pacific Railway (C.P.R.) to implement the Final Plan.
5. Order R-26520—issued March 8, 1978. The preamble of this Order states, inter alia, (A.B., Vol. I, p. 110): "WHEREAS the implementation of the transitional plan and the Final Plan can
2 Subsection 260(8) reads as follows:
260. ...
(8) If the Commission determines that the operation of an uneconomic passenger-train service should not be discon tinued, the Commission shall so order, and thereafter shall reconsider the application for discontinuance at intervals not exceeding five years from the date of the original application or last consideration thereof, as the case may be, for the purpose of determining whether the passenger-train service should be discontinued, and if
(a) the Commission finds that the passenger-train service has, since the last consideration, become an economic passenger-train service, it shall reject the application for discontinuance of the passenger-train service without prejudice to any application that may subsequently be made for the discontinuance of that service; or
(b) the Commission finds that the passenger-train service continues to be an uneconomic service, it shall determine whether the service should be discontinued as provided by subsection (7) or continued as provided by this subsection.
be achieved only by amending parts of Schedules I and II of Order No. R-6751;". The order then purports to make the necessary amendments to Order R-6751 so as to imple ment the Transitional Plan.
6. Order R-28543—issued March 21, 1979. This Order makes certain amendments to Order R-26520 and is described as the modified Tran
sitional Plan.
7. Order R-29468—issued August 15, 1979. This Order makes further amendments in order to implement the Final Plan.
8. Order R-31300—issued August 14, 1980 (A.B., Vol. 2, pp. 144-187). This Order is highly significant to the issue herein being discussed and is the last of the Orders, chronologically, which are relevant to this issue. The preamble to Order R-31300 reads as follows (A.B., Vol. 2, pp. 144-146):
RAILWAY TRANSPORT COMMITTEE
ORDER NO. R-31300
August 14, 1980
IN THE MATTER OF Order No. R-6751 of the Committee dated September 19, 1969, and subsequent Orders pertain ing to frequency and routing of passenger-train services;
IN THE MATTER OF the minimum frequency required over the various segments of routes formerly operated by trains but now operated by means of highway vehicles; and
IN THE MATTER OF responsibility for the provision of passenger-train services since the advent of VIA Rail Canada Inc.
File No. 49468.18
WHEREAS subsection 260(1) of the Railway Act defines a passenger-train service as "such train or trains of a company as are capable of carrying passengers and are declared by an Order of the Commission, for the purposes of this section and Section 261, to comprise a passenger-train service";
WHEREAS subsection 260(2) provides that "if a company desires to discontinue a passenger-train service, the company shall, in accordance with the rules and regulations of the Commission in that regard, file with the Commission an application to discontinue that service";
WHEREAS the Committee deemed it desirable that one Order contain the declarations made in respect of all "passenger-train services" and therefore issued Order No. R-6751 on September 19, 1969;
WHEREAS Order No. R-6751 fixed minimum frequencies for the operation of the passenger-train services and designated
areas within which each railway company was to provide such minimum frequencies;
WHEREAS, since the issuance of Order No. R-6751, many changes have occurred in frequency and routing and many Orders and other directives superceding the said Order have been issued;
WHEREAS it is considered desirable that an explicit state ment be made of the minimum frequency required over the various segments of routes formerly operated by trains but now operated by means of highway vehicles;
WHEREAS the responsibility for most passenger-train ser vices and substituted highway services has been affected by the advent of VIA Rail Canada Inc.;
WHEREAS the Committee's Final Plan for Western Transcontinental Passenger-Train Service issued in October of 1977, its Final Plan for Eastern Transcontinental Passen- ger-Train Service issued in June of 1979, and certain Orders concerning other passenger-train services and substituted highway services issued since October of 1977 have held that the railway companies under the jurisdiction of the Commis sion taking part in the provision of a specific service jointly share the responsibility for providing that service;
NOW THEREFORE the Committee is of the opinion that it is expedient to issue a new Order which will list those trains which comprise "passenger-train services" for the purposes of Sections 260 and 261 of the Railway Act and their minimum frequencies and, furthermore, will list the mini mum frequencies required over the various segments of routes formerly operated by trains but now operated by means of highway vehicles.
In respect of Order R-31300, paragraph 10 of the statement of claim alleges (A.B., Vol. 1, p. 3):
10. The RTC on August 14, 1980 issued order R-31300 which, inter alia, did the following:
a) replaced order R-6751, referred to in paragraph 5, and established routing and frequency of passenger train services;
b) recognized the responsibility of Via to provide passenger train service, and
c) declared that the trains capable of carrying passengers and operating over certain of the route segments listed in the schedules attached as an appendix to Order R-31300 com prised "passenger train services" for the purposes of section 260 and 261 of the Railway Act.
Order R-31300, therefore, created a new and different "passen- ger train service" within the meaning of section 260 of the Railway Act which specifically required a passenger train service connecting the following points at a minimum frequency per week of seven times:
Winnipeg-Saskatoon-Edmonton-Jasper-Kamloops-Vancouver.
ORDER IN COUNCIL P.C. 1981-2171
(The Impugned Order in Council)
The impugned Order in Council reads as follows (A.B., Vol. 2, p. 191):
His Excellency the Governor General in Council, on the recommendation of the Minister of Transport, pursuant to subsection 64(1) of the National Transportation Act, of its own motion hereby varies the Canadian Transport Commission Orders and Decisions referred to in Schedules I to XVII hereto in the manner set out in those schedules.
For the purposes of this appeal, the relevant Schedules to the Order in Council are XV and XVI. Those Schedules read as follows (see A.B., Vol. 2, pp. 206 to 217 inclusive):
SCHEDULE XV
Western Transcontinental Passenger-Train Service Toronto-Barrie Passenger-Train Service
1. Order No. R-22125 of the Railway Transport Committee of the Canadian Transport Commission dated the 29th day of January 1976, is hereby varied as follows:
(1) Section 1 on page 2 of the said Order is revoked and the following substituted therefor:
"I. VIA Rail Canada Inc. and Canadian Pacific Lim ited shall not discontinue operation of the said passenger- train service, with the exception of the passenger-train service between Montréal and Ottawa (via Vankleek Hill) which shall be discontinued effective the 15th day of November 1981."
2. Order No. R-22346 of the Railway Transport Committee of the Canadian Transport Commission dated the 26th day of February 1976, is hereby varied as follows:
(I) Section I on the second page of the said Order is revoked and the following substituted therefor:
"1. VIA Rail Canada Inc. and Canadian National Railways shall not discontinue operation of the said pass- enger-train service, with the exception of the passenger- train service provided by trains 168 and 169 (now trains 146 and 147) between Toronto and Barrie, which shall be discontinued effective the 7th day of September 1982, and the passenger-train service between Winnipeg and Sas- katoon and the passenger-train service between Jasper and Vancouver which shall be discontinued effective the 15th day of November 1981."
3. The "Final Plan for Western Transcontinental Passenger- Train Service" of the Railway Transport Committee of the Canadian Transport Commission dated October 1977 as imple mented by Order No. R-26520 of the Railway Transport Committee dated the 8th day of March 1978 and as amended is hereby varied as follows:
(1) Clauses (i) to (iv) under the heading "The Final Plan" on page I of the said Final Plan are hereby revoked and the following substituted therefor:
"(i) a daily Montréal -Toronto-Vancouver train via Thun der Bay, Winnipeg and Calgary effective the 15th day of November 1981. The present passenger-train service be tween Montréal and Ottawa (via Vankleek Hill) shall be discontinued effective the 15th day of November 1981;
(ii) coach service for the passenger-train services between Ottawa and Sudbury and between Saskatoon and Edmon- ton effective the 15th day of November 1981; and
(iii) full service for passenger-train service between Edmonton and Jasper effective the 15th day of November 1981.
The passenger-train service between Winnipeg and Sas- katoon and passenger-train service between Jasper and Van- couver shall be discontinued effective the 15th day of November 1981."
SCHEDULE XVI
I. Order No. R-31300 dated the 14th day of August 1980, of the Railway Transport Committee of the Canadian Transport Commission is hereby varied as follows:
(1) Groups 6, 7 and 23 of Schedule I of the said Order are revoked effective the 15th day of November 1981.
(2) Groups 1, 3, 5, 16, 17, 22, and 25 of Schedule I of the said Order are revoked and the following groups dated the 15th day of November 1981 substituted therefor effective the 15th day of November 1981.
For the purposes of this appeal the only relevant group set out in said Schedule XVI is group 17 (see A.B., Vol. 2, p. 215). The effect of that purported amendment was to amend the passen- ger-train service connecting Winnipeg-Saskatoon- Edmonton-Jasper-Kamloops-Vancouver (at a min imum frequency of 7 times per week) as declared by Order R-31300 by deleting therefrom the seg ments from Jasper to Vancouver and from Win- nipeg to Saskatoon and by decreasing the mini mum frequency to 3 times per week between Edmonton and Jasper.
As stated in the impugned Order in Council, the respondents rely on the provisions of subsection 64(1) of the National Transportation Act which 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.
Counsel for both the appellants and the respond ents cited the decision of the Supreme Court of Canada in The Attorney General of Canada v. Inuit Tapirisat of Canada et al. 3 as authority for the view that the power vested in the Governor in Council pursuant to said subsection 64(1) is sub ject to review by the Courts if the Governor in Council fails to observe a condition precedent to the exercise of that power. There are, however, as between counsel for the opposing parties, signifi cant differences as to the nature of that condition precedent, when related to the case at bar. It was the submission of counsel for the Attorney General of Canada, both in his factum and in oral argu ment, that the required condition precedent was that there need be merely a valid and subsisting order of the C.T.C. to be varied. Counsel for the appellants, on the other hand, submitted that it is a condition precedent to the exercise of authority under subsection 64(1) that there be in existence, at the time of the passing of the Order in Council, not only a valid and subsisting order of the C.T.C. but a relevant one as well. In the submission of counsel, the requirement of relevance is that the variation made by the Governor in Council must deal with the same subject-matter as the order which it purports to vary. It was his view that an order of discontinuance of passenger-train service cannot be validly made in purported variation of an order which deals, not with any application to discontinue, but with a declaration that certain trains comprise a passenger-train service for the purposes of sections 260 and 261 of the Railway Act. Sections 260 and 261 read as follows:
260. (I) In this section and section 261
"actual loss" means, in relation to a passenger-train service,
(a) the excess, if any, of the costs incurred by the company in carrying passengers by the passenger-train service
over
(b) the revenues of the company attributable to the carrying of passengers by the passenger-train service;
3 [1980] 2 S.C.R. 735.
"passenger-train service" means such a train or trains of a company as are capable of carrying passengers and are declared by an order of the Commission, for the purposes of this section and section 261, to comprise a passenger-train service.
(2) If a company desires to discontinue a passenger-train service, the company shall, in accordance with the rules and regulations of the Commission in that regard, file with the Commission an application to discontinue that service.
(3) Concurrently with the filing of the application to discon tinue the passenger-train service, the company shall also submit to the Commission a statement of the costs and revenues of the company attributable to the carriage of passengers by the service in each of such number of consecutive financial years of the company as the Commission may prescribe (hereinafter in this section referred to as the "prescribed accounting years"), and the Commission shall cause such public notice of the application to be given in the area served by the passenger-train service as the Commission deems reasonable.
(4) If the Commission is satisfied that the application to discontinue the passenger-train service has been filed in accord ance with the rules and regulations of the Commission, the Commission shall, after investigation, and whether or not it has afforded the company an opportunity to make further submis sions, review the statement of costs and revenues referred to in subsection (3) together with all other documents, facts and figures that in its opinion are relevant, and shall determine the actual loss, if any, attributable to the passenger-train service in each of the prescribed accounting years.
(5) If the Commission finds that in its opinion the company, in the operation of the passenger-train service with respect to which an application for discontinuance was made, has incurred actual loss in one or more of the prescribed accounting years including the last year thereof, the Commission shall, after such hearings, if any, as are required in its opinion to enable all persons who wish to do so to present their views on the discontinuance of the passenger-train service, and having regard to all matters that to it appear relevant, determine whether the passenger-train service is uneconomic and is likely to continue to be uneconomic and whether the passenger-train service should be discontinued; but if the Commission finds that in its opinion, the company has incurred no actual loss in the operation of such passenger-train service in the last year of the prescribed accounting years, it shall reject the application without prejudice to any application that may subsequently be made for discontinuance of that service.
(6) In determining whether an uneconomic passenger-train service or parts thereof should be discontinued, the Commission shall consider all matters that in its opinion are relevant to the public interest including, without limiting the generality of the foregoing,
(a) the actual losses that are incurred in the operation of the passenger-train service;
(b) the alternative transportation services, including any highway or highway system serving the principal points served by the passenger-train service, that are available or are likely to be available in the area served by the service;
(c) the probable effect on other passenger-train service or other passenger carriers of the discontinuance of the service, or of parts thereof; and
(d) the probable future passenger transportation needs of the area served by the service.
(7) If the Commission determines that the operation of an uneconomic passenger-train service should be discontinued, the Commission shall by order fix such date or dates for the discontinuance of the operation of the service or parts thereof as to the Commission appears to be in the public interest; but a discontinuance date shall be
(a) not earlier than thirty days from the date of the order; or
(b) not later than one year from the date of the order.
(8) If the Commission determines that the operation of an uneconomic passenger-train service should not be discontinued, the Commission shall so order, and thereafter shall reconsider the application for discontinuance at intervals not exceeding five years from the date of the original application or last consideration thereof, as the case may be, for the purpose of determining whether the passenger-train service should be dis continued, and if
(a) the Commission finds that the passenger-train service has, since the last consideration, become an economic passen- ger-train service, it shall reject the application for discontinu ance of the passenger-train service without prejudice to any application that may subsequently be made for the discon tinuance of that service; or
(b) the Commission finds that the passenger-train service continues to be an uneconomic service, it shall determine whether the service should be discontinued as provided by subsection (7) or continued as provided by this subsection.
(9) The Commission shall cause such public notice of any hearing, finding, determination, order, reconsideration or rejec tion, made or given in respect of the passenger-train service pursuant to subsection (4), (5), (7) or (8), to ge given in the area served by the passenger-train service as the Commission deems reasonable.
261. (1) In this section
"claim period" means, in relation to any uneconomic passen- ger-train service, the period
(a) beginning ninety days after the date the application to discontinue the service has been filed with the Commission in accordance with the rules and regulations of the Commis sion, and
(b) ending on the date fixed by the Commission, or as varied pursuant to section 64 of the National Transportation Act, for the discontinuance of the service or part thereof;
"fiscal period" means the period commencing on the 1st day of April in any year and ending on the 31st day of March in the following year;
"uneconomic service" means a passenger-train service that has been determined to be uneconomic by the Commission under section 260.
(2) When an uneconomic service is being operated within a claim period, the company operating it may file a claim with the Commission for the amount of any actual loss of the company attributable to the service in any financial year of the company within the claim period, or, where only a part of a financial year is within the claim period, in that part thereof within the claim period.
(3) A claim under this section shall be filed with the Com mission not later then three months after the commencement of the fiscal period next following the financial year of the com pany in which the actual loss was incurred.
(4) The Commission shall examine the claim and shall certify the amount of the actual loss, if any, that in its opinion was attributable to the service and the Minister of Finance, on the recommendation of the Commission, may, in respect of the loss, cause to be paid out of the Consolidated Revenue Fund an amount not exceeding eighty per cent of the loss as certified by the Commission.
(5) The Commission may, in respect of any such payment, or the total of all such payments in respect of the actual losses of the company attributable to the passenger-train service in earlier years, cause such public notice of such payment or payments to be given in the area served by the passenger-train service as the Commission deems reasonable.
(6) The Commission may authorize and direct an adjust ment to be made in any payment to a railway company in one fiscal period for or on account of an underpayment or overpay- ment made under this section to that company in an earlier fiscal period.
(7) In determining the amount of any actual loss for the purposes of section 260 or this section, the Commission may include therein or exclude therefrom such items and factors relating to costs and revenues as to the Commission seem proper.
(8) Subsections (2) to (7) do not apply in respect of a passenger-train service accommodating principally persons who commute between points on the railway of the company provid ing the service.
(9) Where, by virtue of subsection (8), a claim cannot be made under this section in respect of an uneconomic service, the Commission shall after an investigation certify the actual loss, if any, that in its opinion is attributable to the service and report thereon to the Governor in Council for such action as he deems necessary or desirable to provide assistance in respect of such loss.
(10) Where pursuant to any action taken by the Governor in Council under this section financial assistance is provided a railway company in any years from moneys appropriated by Parliament therefor, the payment to such company of such assistance shall be deemed for the purposes of section 413 to be a payment under this section.
Relating this requirement of relevance to Schedule XV of the Order in Council, it is to be noted that section 2 thereof purports to amend Order R-22346 by, inter alia, providing for the discontinuance of the C.N.R. passenger-train ser vice between Winnipeg and Saskatoon and be tween Jasper and Vancouver effective November 15, 1981. However, Order R-22346 merely ordered the continuance of the Super-Continental passenger-train service as provided by C.N.R. trains 1, 2, 3 and 4, which had been declared a passenger-train service for the purposes of what are now sections 260 and 261 of the Railway Act (supra) by Order R-6751. Thus, it is submitted, section 2 of Schedule XV is invalid because the passenger-train services therein ordered to be dis continued, were different from and not part of the passenger-train service which comprised the subject-matter of the continuance Order (R-22346).
I find merit in this contention by appellants' counsel. It is clear from the record that the passen- ger-train service, the "Super-Continental", which was declared to be a passenger-train service by Order R-6751 and was ordered to be continued (or to not be discontinued) by Order R-22346 was changed by the "Final Plan" through the introduc tion of a Winnipeg-Vancouver train on C.N.R. track through Saskatoon, Edmonton, Jasper and Kamloops which train connected at Winnipeg with the existing C.P.R. transcontinental service from Montreal and Toronto known and designated as "The Canadian". (See A.B., Vol. 1, p. 120.) It should be noted at this juncture that this change made by the "Final Plan" does not appear in the amendments made to Order R-6751 by Order R-26520 which purported to implement the "Final Plan". Nevertheless, said change appears to be covered by the declaration of passenger-train ser vices in Order R-31300. Accordingly, whether Order R-31300 was a mere "pulling together" or consolidation of changes made in passenger-train services since Order R-6751 was issued, as charac terized by the learned Trial Judge, and as accepted by counsel for the City of Melville in that appeal, or whether, as contended by counsel for these appellants, Order R-31300 created a new passen- ger-train service, the matter of significance, in so far as the validity of section 2 of Schedule XV is concerned, is that because of the change effected
by the Final Plan, the passenger-train services which were ordered to be discontinued were differ ent from the passenger-train service that C.N.R. was ordered not to discontinue by Order R-22346. I agree with counsel for the appellants that the Governor in Council under the authority given to it by subsection 64(1) is not entitled, under the guise of "variation" to do something of an entirely different nature. I agree that the Cabinet is con strained under subsection 64(1), when varying a Commission order, to deal with the same type or kind of order as the Commission was dealing with. I do not agree that subsection 64(1) authorizes the Governor in Council to vary any and all Commis sion orders no matter when they are issued or regardless of their subject-matter. In my view, Order R-22346 is not a relevant Order for the purposes of the discontinuance Order contained in section 2 of Schedule XV because as detailed supra, the passenger-train service which was the subject-matter of Order R-22346 was not the same passenger-train service as that ordered to be dis continued in section 2 of Schedule XV.
Turning now to the question of the validity of section 3 of Schedule XV, that section purports to vary Order R-26520. However, Order R-26520 purported to amend Order R-6751 and as such, is dependant for its validity on that Order. Accord ingly, it is my view that Order R-26520 cannot be considered a valid and speaking Order after the repeal of Order R-6751 (which was accomplished by Order R-31300). From this it necessarily fol lows that at the time section 3 of Schedule XV was passed, Order R-26520 was not a valid and sub sisting Order and if this was the situation, then the necessary condition precedent to the exercise of power under subsection 64(1) was lacking and would of itself, be sufficient to invalidate said section 3 of Schedule XV.
Additionally, it seems to me that the relevance attack on the validity of section 2 of Schedule XV as developed supra, applies with equal force to section 3 as well. Order R-26520 concerns itself with the declaration or definition of a passenger- train service and not with its discontinuance (or continuance) whereas section 3 of Schedule XV by the last paragraph thereof, under the guise of variation, orders discontinuance of the Winnipeg- Saskatoon and Jasper-Vancouver segments of that passenger-train service. Thus, Order R-26520 cannot be said to be a relevant Order for the purposes of the discontinuance Order contained in section 3 of Schedule XV.
I come now to Schedule XVI of the impugned Order in Council. Schedule XVI purports to make significant amendments to Order No. R-31300. As stated supra, Order R-31300 revoked Order R-6751 and declared pursuant to section 260 of the Railway Act, a passenger-train service con necting Winnipeg - Saskatoon - Edmonton - Jas per - Kamloops - Vancouver (at a minimum fre quency of seven times per week). As I said earlier, Schedule XVI of the Order in Council purports to amend that passenger-train service by deleting therefrom the segments from Jasper to Vancouver and from Winnipeg to Saskatoon and by decreas ing the minimum frequency to three times per week between Edmonton and Jasper. The attack made by counsel for the appellants on Schedule XVI was to the effect that the condition precedent necessary for the promulgation of Schedule XVI was the existence of a valid speaking discontinu ance Order by the Commission in respect of those portions of the Winnipeg-Vancouver C.N.R. ser vice sought to be discontinued by Schedule XVI. Turning to Order R-31300, counsel submits that, as alleged in paragraph 10 of the statement of claim, that Order created a "new and different" passenger-train service "within the meaning of section 260 of the Railway Act" than the passen- ger-train service declared to be a passenger-train service under Order R-6751. It is the view of appellants' counsel that the train service created by Order R-31300 did not exist prior to 1978. What existed from and after 1969 (when Order R-6751 declared the Super-Continental C.N.R. trains 1, 2, 3 and 4) until 1978 was a C.N.R. train service from Montreal/Toronto to Vancouver. The
point counsel makes about Order R-31300 is that there is nothing therein which effectively and val idly discontinues the previous C.N.R. Super-Con tinental service. In his submission, subsection 260(1) of the Railway Act gives the Commission power to declare a "passenger-train service" and subsections (2) to (9) of said section 260 provide the code whereby discontinuance may be effected by Commission order. Thus, in his view, since the discontinuance provisions of section 260 were not followed prior to the promulgation of Order R-31300, that Order cannot be said to be a valid speaking discontinuance Order. In his submission, the Governor in Council does not have the right to legislate a discontinuance in circumstances such as this where there has never been a discontinuance order passed by the Commission pursuant to the code for discontinuance as set forth in subsections (2) to (9) of section 260 of the Railway Act.
I have difficulty in accepting the view that because the provisions of subsections 260(2) to (9) of the Railway Act were not adhered to by the Commission prior to the issuance of Order R-31300, that this circumstance operates so as to invalidate Order R-31300 in its entirety. It is likely that the practical effect of Order R-31300 was, inter alia, to discontinue the Super-Continen tal C.N.R. service as discussed supra. However, that Order also "declared", within the meaning of subsection 260(1) of the Railway Act, as a passen- ger-train service, the C.N.R. service from Win- nipeg through Saskatoon, Edmonton, Jasper, Kamloops to Vancouver. That is the portion of Order R-31300 which Schedule XVI purports to amend. Since the Commission clearly had the power to make that declaration under subsection 260(1), it was, in my view, a validly speaking "Commission order" which the Governor in Coun cil was entitled to "vary or rescind" pursuant to subsection 64(1) of the National Transportation Act. It was also a relevant Order for the purposes of Schedule XVI because it was an Order declaring or defining a passenger-train service and not a discontinuance Order. Since a valid, subsist ing and relevant Order existed when the Order in
Council was passed, it is my opinion that the required condition precedent in respect of Schedule XVI was present.
On the basis of a careful review of the Inuit Tapirisat decision (supra), as it applies to the factual situation in this case, I conclude that the only condition precedent necessary for the exercise of authority under subsection 64(1) by the Gover nor in Council was the existence of a valid, subsist ing and relevant order made by the R.T.C. and since, in my view, for the reasons expressed supra, such a valid, subsisting and relevant Order did exist when the Order in Council was passed, the attack on the validity of Schedule XVI of the impugned Order in Council must fail.
To summarize then my conclusions with respect to appellants' submissions that the Governor in Council did not have jurisdiction under subsection 64(1) of the National Transportation Act to make the Order in Council in question, it is my view that the Governor in Council acted within its jurisdic tion in enacting Schedule XVI to the Order in Council but acted without jurisdiction in enacting sections 2 and 3 of Schedule XV thereof.
I propose to now deal with appellants' second ground of appeal, i.e., that the learned Trial Judge was in error in finding that the impugned Order in Council had come into force notwithstanding the failure of the Governor in Council to comply with the provisions of the Statutory Instruments Act, and in particular, section 5 thereof which provides:
5. (I) Every regulation-making authority shall, within seven days after making a regulation or, in the case of a regulation made in the first instance in one only of its official language versions, within seven days after its making in that version, transmit copies of the regulation in both official languages to the Clerk of the Privy Council for registration pursuant to section 6.
The learned Trial Judge held that the provisions of section 5 requiring transmission for registration of a regulation within seven days are directory rather than mandatory. His reasons for so finding are to be found at pages 657-659 of Volume V of the Appeal Book in the Melville case which, in his reasons for judgment in this case were made to apply to this case.
In my view, his conclusion on this issue was correct and I am content to adopt his reasons for so finding as well.
On a motion to strike a statement of claim because it discloses no reasonable cause of action, all the facts pleaded in the statement of claim must be deemed to have been proven. The claim should be struck out or the action dismissed only in plain and obvious cases and where the Court is satisfied that the case is beyond doubt. 4 In this statement of claim, the appellants claim the fol lowing relief (A.B., Vol. 1, p. 5):
WHEREFORE THE PLAINTIFFS CLAIM:
a) A declaration that Order in Council PC 1981-2171 is invalid and void.
b) A declaration that Order in Council PC 1981-2171 has not come into force.
c) A declaration that the Plaintiffs are entitled to receive the passenger train service from Via and CN as set out in RTC Order R-31300.
d) Interim and permanent injunctions restraining the Defend ants Via and CN from discontinuing the passenger train ser vices affecting Jasper set out in RTC Order R-31300.
e) Costs.
On the basis of the conclusions I have reached supra and adopting the criteria applied by Estey J. in Inuit Tapirisat (supra), it seems clear that paragraph 14 and subparagraphs b), c) and d) of the prayer for relief do not disclose a reasonable cause of action. However, in respect of subpara- graph a), it is my view that the case is not beyond doubt at least in so far as portions of Order in Council P.C. 1981-2171 are concerned. Likewise, while paragraphs 12 and 13 of the statement of claim do not allege the invalidity of the Order in Council for the precise reasons expressed herein they do, when taken together allege invalidity of the Order in Council. At the time of the hearing of the appeal the respondents had not pleaded to the statement of claim. Pursuant to Rule 421, the appellants can, without leave, amend the statement of claim at any time before a statement of defence has been filed. Since this course of action is open to the appellants, I cannot conclude at this stage that the action, in so far as it asks for a declaration
4 The Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735, at p. 740, per Estey J.
of invalidity of the impugned Order in Council or portions thereof, could not possibly succeed.
Another possible argument against allowing the statement of claim to stand is that, in view of the conclusions 1 have reached on the other subpara- graphs of the prayer for relief, to allow subpara- graph a) to proceed by itself would be wrong since the relief, if granted following trial, would be devoid of practical effect. A similar argument was advanced before the Supreme Court of Canada in the case of Kelso v. Her Majesty The Queen.' Dickson J. writing the judgment of the Court, dealt with that submission in the following manner:
The final submission of the Crown is that a declaration should not be issued because it cannot have any practical effect. It is argued that the Public Service Commission has the exclusive right and authority to make appointments to the Public Service. Any declaration by the Court could not have the effect of precluding the exercise of such authority by the Commission, thereby depriving the declaration of any possible practical result.
It is quite correct to state that the Court cannot actually appoint Mr. Kelso to the Public Service. The administrative act of appointment must be performed by the Commission. But the Court is entitled to `declare' the respective legal rights of the appellant and the respondent.
The Public Service Commission is not above the law of the land. If it breaches a contract, or acts contrary to statute, the courts are entitled to so declare.
I would adopt that view of the matter as applying equally to the case at bar. If the Governor in Council has enacted an Order in Council which is partially or wholly invalid, it seems to me that the courts are entitled to make a declaration of invalidity.
Nevertheless, addressing the question of the pos sible practical effect of a declaration of invalidity, I would refer initially to Schedule XV and observe that the legal effect of that Schedule is to order the discontinuance of the passenger-train services between Winnipeg and Saskatoon and between Jasper and Vancouver. On the other hand, the legal effect of Schedule XVI is to remove these segments from the declaration in Order R-31300 that certain trains comprise passenger-train ser vices and, consequentially, exempting those seg ments from the provision in section 260 that they may not be discontinued without the Commission's
5 [ 1 98 1 ] I S.C.R. 199, at p. 210.
approval. Thus, the C.N.R. would be free to dis continue those segments without application to the Commission but it is not ordered to do so. The result is, however, that the railway cannot claim for its loss on these services. Accordingly, while there is a difference in the legal effects of Schedules XV and XVI in that Schedule XVI does not order discontinuance, there might well be no practical significance to this distinction since Schedule XVI produces an effect, namely--dis qualification for a claim under section 260—which makes discontinuance a feasible and practical course of action. I have thus concluded that a declaration of invalidity in respect of Schedule XV, while having legal effect might well have little or no practical effect in so far as the respondents are concerned. However, I am far from being persuaded that the declaration of invalidity sought by these appellants could not possibly have some practical effect in so far as they are concerned. In my view, this is a case where it is clearly arguable that if the declaration sought is made, it might possibly produce a practical result. The matter is not beyond doubt and should therefore be allowed to proceed.
The remaining question for determination is whether or not, in view of my conclusion of partial invalidity, and partial validity of the impugned Order in Council, those portions of the statement of claim and prayer for relief relating to Schedule XVI of the Order in Council should be struck out pursuant to Rule 419(1)(a) leaving intact in the statement of claim only those allegations which relate to the cause of action which raises a triable issue.
Since the respondents are not precluded by these reasons or the judgment proposed herein from moving in the Trial Division for an order striking out portions of the statement of claim and since, as observed earlier, it is open to the appellants to amend their claim, it seems to me that no useful purpose would be served by striking portions of the statement of claim at this time. Such action at this juncture by this Court would, in my opinion, be premature.
Accordingly and for all of the above reasons, it is my opinion that the appeal should be allowed and the order of the Trial Division striking out the statement of claim should be set aside, the appel lants to have their costs both here and in the Trial Division.
LE DAIN J.: I agree. HYDE D.J.: I agree.
 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.