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RAILWAYS - Regulation - Supplying cars - Federal - Canadian Transportation Agency

Monday, May 08, 2017 @ 7:46 AM  


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Appeal by the Canadian National Railway Company (CNR) from a decision by the Canadian Transportation Agency in favour of Emerson Milling (Emerson). Emerson requested railcars from CNR for transportation of crops. Under s. 113(1) of the Canada Transportation Act, CNR was required to supply railcars without delay. Under normal practice, the process was uncontroversial. However, CNR was unable to meet Emerson's 2013-2014 request in full due to restrictions on operations caused by cold weather, and the amount of cars requested due to a bumper crop year. Emerson filed a complaint with the Agency. CNR defended the complaint on the basis that Emerson's railcar order was unreasonable, and that CNR acted reasonably given the challenging circumstances. The Agency ruled in Emerson's favour. It ordered CNR to provide the railcars as requested. CNR appealed to the Federal Court of Appeal. A preliminary issue arose as to whether the appeal raised a question of law or jurisdiction.

HELD: Appeal dismissed. A question of jurisdiction for the purpose of an appeal from a ruling under the Canada Transportation Act included issues of procedural fairness, even if such issues were factually suffused. A question of law for the purpose of such an appeal included extricable questions of law or legal principles in respect of questions of mixed fact and law. Here, the essential character of the appeal involved statutory interpretation issues that raised questions of law, the outcome of which were not driven by facts. The Agency's interpretation of s. 113(1) of the Act was reviewable on a standard of reasonableness. The Agency's evaluation approach in considering Emerson's request, CNR's response, and the reasons offered justifying the service failure was reasonable. It was a practical, useable test that captured the essence and detail of s. 113(1). The Agency's application of its evaluation approach drew upon its regulatory experience, industry knowledge, understanding of shipper and customer transactions, and overall expertise. The Agency's decision was reasonable and supported by the evidence that the bumper crop caused a legitimate demand for service that CNR failed to fulfill due to unreasonable delay.

Canadian National Railway Co. v. Emerson Milling Inc., [2017] F.C.J. No. 371, Federal Court of Appeal, J. Gauthier, D.W. Stratas and M.J.L. Gleason JJ.A., April 18, 2017. TLD-May82017001