Canadian Pacific Railway Co. v. Canexus Chemicals Canada LP et al., (2015) 480 N.R. 172 (FCA)

• Judge: Pelletier, Gauthier and Scott, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: May 27, 2015
• Jurisdiction: Canada (Federal)
• Citations: (2015), 480 N.R. 172 (FCA);2015 FCA 283

CPR v. Canexus Chemicals Can. LP (2015), 480 N.R. 172 (FCA)

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[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

Temp. Cite: [2015] N.R. TBEd. DE.021

Canadian Pacific Railway Company (appellant) (respondent on cross-appeal) v. Canexus Chemicals Canada, LP, Olin Canada, ULC doing business as Olin Chlor Alkali Products, ERCO Worldwide, a division of Superior Plus LP, Chemtrade Logistics Inc. and Chemtrade West Limited Partnership (respondents) (appellants on cross-appeal) and Canadian Transportation Agency (respondent) (respondent on cross-appeal) and Agrium and The Canadian Fertilizer Institute (interveners)

(A-81-14; 2015 FCA 283; 2015 CAF 283)

Indexed As: Canadian Pacific Railway Co. v. Canexus Chemicals Canada LP et al.

Federal Court of Appeal

Pelletier, Gauthier and Scott, JJ.A.

December 7, 2015.

Summary:

Shippers of hazardous products asked the Canadian Transportation Agency to rule on the legality and reasonableness of clauses dealing with liability and indemnity issues (Item 54) in a tariff published by the Canadian Pacific Railway Co. (CP). The Agency held that portions of Item 54 were prohibited by s. 137(1) of the Canada Transportation Act, and ordered that CP refrain from applying Item 54 until such time as the tariff was amended. The Agency ruled that it could not disallow Item 54 as unreasonable pursuant to s. 120.1 of the Act, as that provision applied only to "charges and associated terms and conditions". CP appealed. The Shippers cross-appealed.

The Federal Court of Appeal allowed CP's appeal, and dismissed the Shippers' cross-appeal.

Administrative Law - Topic 3202

Judicial review - General - Scope or standard of review - [See both Railways - Topic 1068 ].

Administrative Law - Topic 9050

Boards and tribunals - Jurisdiction of particular boards and tribunals - Canadian Transportation Agency - [See second Railways - Topic 1004 ].

Carriers - Topic 1006

Federal legislation - Canada Transportation Act - Interpretation - [See both Railways - Topic 1004 ].

Carriers - Topic 1062

Federal legislation - Canadian Transportation Agency - Jurisdiction - General - [See second Railways - Topic 1004 ].

Carriers - Topic 1063

Federal legislation - Canadian Transportation Agency - Judicial review (incl. standard of review) - [See both Railways - Topic 1068 ].

Railways - Topic 1004

Regulation - General - Canada Transportation Act - Interpretation - Shippers of hazardous products asked the Canadian Transportation Agency to rule on the legality of clauses dealing with liability and indemnity issues (Item 54) in a tariff published by the Canadian Pacific Railway Co. (CP) - The Shippers argued that Item 54 was prohibited by s. 137(1) of the Canada Transportation Act - The Agency held that portions of Item 54 were prohibited by s. 137(1) - CP appealed from the order requiring it to refrain from applying Item 54 until the offending provisions were removed - The Federal Court of Appeal, in allowing the appeal, concluded that "subsection 137(1) constrains a railway company's ability to limit its liability to a shipper for loss of or damage to, or late delivery of, the shipper's goods. Subsection 137(1) also applies to limitations on the shipper's right to claim over against the railway company for losses suffered by a third party caused, in whole or in part, by the railway company's negligence." - See paragraphs 82 to 101 - When s. 137(1) was applied to the Court's interpretation of Item 54, there was no basis upon which to find that Item 54 contained prohibited limitations of liability - "The conclusion that the broad limitation of liability in the opening words of Item 54 is a prohibited limitation of liability fails, as that broad limitation is subject to exceptions which preserve the railway company's liability to shippers for loss of or damage to the shipper's traffic and for losses caused in whole or in part by its own negligence. The conclusion that the Joint Liability clause is an impermissible limitation of liability fails for the same reason. ... [T]he Joint Liability clause cannot be considered as a waiver of liability by the Shippers. As a result, there is no basis for an order under section 26 prohibiting CP from applying Item 54 until the prohibited limitation had been removed. Simply put, Item 54 does not contain prohibited limitations of liability." - See paragraphs 104 to 130.

Railways - Topic 1004

Regulation - General - Canada Transportation Act - Interpretation - Shippers of hazardous products asked the Canadian Transportation Agency to find that clauses dealing with liability and indemnity issues (Item 54) in Tariff 8 published by the railway company (CP) were unreasonable - The Agency found that it did not have jurisdiction under s. 120.1 to grant the remedy sought, as the obligation to indemnify, defend and hold harmless was not a "charge or an associated term or condition" - The Federal Court of Appeal dismissed the Shippers' cross-appeal - "For regulatory purposes, an amount payable to a third party cannot be a charge since the Agency has no control over such amounts. The term or condition which requires the payment of such an amount is not associated with a charge and therefore is not subject to section 120.1. ... If the Shippers are persuaded that Item 54, even when properly construed, is an oppressive and unreasonable condition, then they have a remedy in final offer arbitration where they can propose, as their final offer, Tariff 8 minus Item 54. While this approach involves certain costs, one surmises that the amounts potentially at stake justify the expense." - See paragraphs 131 to 140.

Railways - Topic 1061.1

Regulation - Canadian Transportation Agency - Jurisdiction - General - [See second Railways - Topic 1004 ].

Railways - Topic 1068

Regulation - Canadian Transportation Agency - Appeals (incl. standard of review) - The Federal Court of Appeal determined the standard of review with respect to the Canadian Transportation Agency's interpretation of s. 137(1) of the Canada Transportation Act (limitations of liability between a railway company and a shipper) - "[T]he presence of concurrent jurisdiction with respect to a given question by both a tribunal and the courts is a significant, if not a decisive factor in favour of the correctness standard with respect to the tribunal's treatment of that question. In this case, the Agency and the Court have concurrent jurisdiction over the interpretation of subsection 137(1) and a limitation of liability provision whose enforceability or lawfulness is challenged. ... It would make no sense to review the Agency's interpretation of subsection 137(1) on a deferential standard on judicial review and then to review the same question on the standard of correctness when it arises in the course of an appeal from a decision of a court. For that reason, the standard of review of the Agency's interpretations of subsection 137(1) is correctness." - See paragraphs 75 to 80.

Railways - Topic 1068

Regulation - Canadian Transportation Agency - Appeals (incl. standard of review) - Shippers of hazardous products asked the Canadian Transportation Agency to rule on the reasonableness of clauses dealing with liability and indemnity issues (Item 54) in the subject tariff - The Agency ruled that it could not disallow Item 54 as unreasonable pursuant to s. 120.1 of the Canada Transportation Act - It found that s. 120.1 applied only to charges and associated terms and conditions for incidental or additional services whose cost had been unbundled from the rate for transporting the goods - The Federal Court of Appeal determined that "the standard of review applicable to the Agency's interpretation of section 120.1 is a straight-forward application of the presumption of reasonableness. None of the factors mentioned in McLean [v. British Columbia Securities Commission (2013) (S.C.C.)] ... are present so as to rebut the presumption. Section 120.1 does not raise a constitutional question or one of general importance to the legal system. Furthermore, its interpretation is not a matter with respect to which both the courts and the Agency have concurrent original jurisdiction." - See paragraph 81.

Railways - Topic 5135

Operation - Carriage of goods - Limitation of liability - [See both Railways - Topic 1004 ].

Railways - Topic 7003

Tariffs, rates and tolls - General - Interpretation - [See both Railways - Topic 1004 ].

Cases Noticed:

Canadian Forest Products Ltd. v. B.C. Rail Ltd. et al. (2005), 214 B.C.A.C. 174; 353 W.A.C. 174; 2005 BCCA 369, refd to. [para. 11].

Boutique Jacob Inc. v. Pantainer Ltd. et al. (2006), 288 F.T.R. 78; 2006 FC 217, revd. on other grounds (2008), 375 N.R. 160; 2008 FCA 85, refd to. [para. 11].

Canadian National Railway Co. v. Harris, [1946] S.C.R. 352, refd to. [para. 11].

Canadian Pacific Ltd. v. National Transportation Agency and CSP Foods Ltd., [1992] 3 F.C. 145; 144 N.R. 235 (C.A.), refd to. [para. 20].

Mitsubishi Heavy Industries Ltd. v. Canadian National Railway Co., [2012] B.C.T.C. Uned. 1415; 2012 BCSC 1415, refd to. [para. 21].

Alberta Teachers' Association v. Information and Privacy Commissioner (Alta.) et al., [2011] 3 S.C.R. 654; 424 N.R. 70; 519 A.R. 1; 539 W.A.C. 1; 2011 SCC 61, refd to. [para. 71].

Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada et al., [2012] 2 S.C.R. 283; 432 N.R. 1; 347 D.L.R.(4th) 235; 2012 SCC 35, refd to. [para. 71].

Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers et al., [2002] 4 F.C. 3; 290 N.R. 131; 2002 FCA 166, refd to. [para. 72].

Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers et al., [2004] 2 S.C.R. 427; 322 N.R. 306; 2004 SCC 45, refd to. [para. 73].

New Brunswick (Board of Management) v. Dunsmuir (2008), 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 74 ].

McLean v. British Columbia Securities Commission, [2013] 3 S.C.R. 895; 452 N.R. 340; 347 B.C.A.C. 1; 593 W.A.C. 1; 2013 SCC 67, refd to. [para. 74].

Canadian Broadcasting Corp. v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. et al. (2015), 479 N.R.1; 2015 SCC 57, refd to. [para. 74].

Canadian National Railway Co. v. Neptune Bulk Terminals (Canada) Ltd., [2006] B.C.T.C. 1073; 2006 BCSC 1073, refd to. [para. 77].

Alstom Canada Inc. et al. v. Canadian National Railway Co., [2008] F.T.R. Uned. A05; 2008 FC 1311, refd to. [para. 77].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 78].

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 53; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 104].

Communities Economic Development Fund v. Canadian Pickles Corp. et al., [1991] 3 S.C.R. 388; 131 N.R. 81; 76 Man.R.(2d) 1; 10 W.A.C. 1, refd to. [para. 104].

Novak et al. v. Bond, [1999] 1 S.C.R. 808; 239 N.R. 134; 122 B.C.A.C. 161; 200 W.A.C. 161, refd to. [para. 104].

Tower et al. v. Minister of National Revenue et al., [2004] 1 F.C.R. 183; 310 N.R. 280; 2003 FCA 307, refd to. [para. 104].

Statutes Noticed:

Canada Transportation Act, S.C. 1996, c. 10, sect. 26 [para. 12]; sect. 117 [para. 5]; sect. 120.1(1), sect. 120.1(7) [para. 12]; sect. 126 [para. 6]; sect. 137 [para. 9].

Canada Transportation Act Regulations (Can.), Railway Traffic and Passenger Tariffs Regulations, SOR/96-338, sect. 2(f) [para. 6].

Canada Transportation Act Regulations (Can.), Railway Traffic Liability Regulations, SOR/91-488, sect. 4, sect. 5(1) [para. 10].

Railway Traffic and Passenger Tariffs Regulations - see Canada Transportation Act Regulations (Can.).

Railway Traffic Liability Regulations - see Canada Transportation Act Regulations (Can.).

Counsel:

Patrick Riley, Enrico Forlini and Cassandra Quach, for the appellant, Canadian Pacific Railway Company, respondent on cross-appeal;

Chris G. Paliare and Michael Fenrick, for the respondents, Canexus Chemicals Canada LP, Olin Canada, ULC doing business as Olin Chlor Alkali Products, ERCO Worldwide, a Division of Superior Plus LP, Chemtrade Logistics Inc. and Chemtrade West Limited Partnership, appellants on cross-appeal;

Valérie Lagacé, for the respondent, Canadian Transportation Agency, respondent on cross-appeal;

P. John Landry and Forrest C. Hume, for the intervener, Agrium;

Ian S. Mackay, for the intervener, Canadian Fertilizer Institute.

Solicitors of Record:

Canadian Pacific Railway Company and Fasken Martineau DuMoulin LLP, Montreal, Quebec, for the appellant, Canadian Pacific Railway Company, respondent on cross-appeal;

Paliare Roland Rosenberg Rothstein LLP, Toronto, Ontario, for the respondents, Canexus Chemicals Canada LP, Olin Canada, ULC doing business as Olin Chlor Alkali Products, ERCO Worldwide, a division of Superior Plus LP, Chemtrade Logistics Inc. and Chemtrade West Limited Partnership;

Canadian Transportation Agency, Gatineau, Quebec, for the respondent, Canadian Transportation Agency, respondent on cross-appeal;

DLA Piper (Canada) LLP, for the intervener, Agrium;

Ian S. Mackay, Ottawa, Ontario, for the intervener, Canadian Fertilizer Institute.

This appeal and cross-appeal were heard at Montreal, Quebec, on May 27, 2015, before Pelletier, Gauthier and Scott, JJ.A., of the Federal Court of Appeal. In reasons written by Pelletier, J.A., the Court delivered the following judgment, dated December 7, 2015.