Judgments

[1993] 1 F.C. 583

A-101-90

A-102-90

A-478-91

A-479-91

A-218-92

McCain Foods Limited (Appellant)

v.

National Transportation Agency and Canadian Pacific Limited (Respondents)

Indexed as: McCain Foods Ltd. v. Canada (National Transportation Agency) (C.A.)

Court of Appeal, Mahoney, Desjardins and Robertson JJ.A.—Fredericton, October 19; Ottawa, November 24, 1992.

Railways — Failure to comply with National Transportation Act, s. 165(1) requiring railway line abandonment orders to be made within six months of receipt of application, not rendering orders invalid — Lease between CP and New Brunswick Railway giving CP wide discretion as to operation of line — Statutory confirmation neither rendering contractual obligations statutory nor lease “Special Act” (as defined in Railway Act, s. 3(1)(b)) as no specific obligation agreed to — Refusal to disclose documents concerning CP’s losses and material of commercially sensitive nature within Agency’s discretion under Railway Act and National Transportation Agency General Rules.

Construction of statutes — National Transportation Act, 1987, s. 165(1) providing National Transportation Agency shall, within six months from receipt of application, order abandonment of operation of line if uneconomic — Orders made outside six-month time frame — Distinction between mandatory statutory provisions, breach of which rendering acts invalid, and directory provisions, breach of which not necessarily leading to invalidity — When provisions relate to public duty, and to hold void acts done in neglect thereof would work serious general inconvenience or injustice to persons who have no control over those entrusted with duty and would not promote main object of Legislature, provisions held directory — Public duty imposed on Agency since must hold hearings to determine whether line uneconomic before abandoned — If Agency’s orders declared void, those under Agency’s jurisdiction, and having no control over process at serious disadvantage since hearing process would start over — No public interest served in so doing.

Transportation — Failure to comply with time frame imposed by National Transportation Act, 1967, s. 165(1) not rendering National Transportation Agency’s orders for abandonment of railway lines invalid — Statutory confirmation of lease not creating statutory obligation where no specific obligations agreed to by parties — Lease not becoming “Special Act” within Railway Act, s. 3(1)(b) — Refusal to disclose commercially sensitive documents within Agency’s discretion.

These were appeals from five orders of the National Transportation Agency authorizing Canadian Pacific to abandon the operation of railway branch lines in New Brunswick. National Transportation Act, 1987 subsection 165(1) provides that, where the Agency determines that a branch line is uneconomic and there is no reasonable probability of its becoming economic in the foreseeable future, it shall, within six months of receipt of the application, order the abandonment of operation of the line. Each of the orders herein was rendered after that six-month time frame. The appellant argued that compliance with the six-month provision was a condition precedent to exercise of the Agency’s jurisdiction since the mandatory time limit was new to the 1987 Act, thus indicating Parliament’s intention that such applications be dealt with expeditiously. Failure to comply with the time limit rendered the Agency’s orders null and void. The appellant also argued that as the lease signed between CP and New Brunswick Railway on July 1, 1890, was ratified by both federal and provincial legislation, CP’s responsibilities as lessee became a statutory obligation which could only be abrogated by legislation. Moreover, the lease would come within the definition of “Special Act” in Railway Act, paragraph 3(1)(b) and the Agency had no choice but to give effect to the “Special Acts” and require the railway to continue the operation of its lines. Finally, the appellant argued that the Agency had breached the rules of natural justice by refusing to order CP to disclose the actual losses in its rail operations, thus frustrating the appellant’s right to cross-examine CP’s witnesses as to the alleged losses.

Held, the appeals should be dismissed.

There is a presumption that “shall” is imperative unless such an interpretation would be utterly inconsistent with the context and would render the sections irrational or meaningless. Anglo-Canadian law, however, recognizes a distinction between statutory provisions that are mandatory, in the sense that failure to comply with them will lead to invalidity of the act, and directory, in the sense that failure to comply will not necessarily lead to such invalidity. When the statutory provisions relate to the performance of a public duty, and to hold null and void acts done in neglect of that duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, the provisions have been held to be merely directory. A public duty is imposed on the Agency since no railway company can abandon the operation of a line without applying to the Agency which must hold hearings to determine whether the line is uneconomic. If the Agency’s orders were declared null and void, those who come under the jurisdiction of the Agency but have no control over its process would be at a serious general disadvantage since the hearing process would have to start anew. No public interest would be served in doing so.

Nothing in the lease or in the legislation established the existence of a contractual obligation between CP and NBR, which would have prevented the Agency from authorizing the abandonment of the line. The lease gave CP a wide discretion to operate the line “so as to secure the largest amount that can be realized therefrom, with a due regard to the service to be rendered to the public”. Statutory confirmation of the lease did not change the situation as no specific obligation had been agreed to by the parties. Although Crown land had been granted in the last century for the railway construction, the documentary evidence did not support the argument that the province was entitled to the operation of a railroad for the duration of the 990-year lease.

The refusal to disclose documents concerning CP’s losses and other material of a commercially sensitive nature was within the Agency’s discretion under Railway Act, section 350 and National Transportation Agency General Rules, sections 11 and 12.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

An Act to amend the Acts relating to the New Brunswick Railway Company, S.C. 1881, c. 42.

An Act to confirm a certain Agreement made by the New Brunswick Railway Company with the Canadian Pacific Railway Company, S.N.B. 1891, c. 14.

An Act to confirm an Indenture made between New Brunswick Railway Company and the Canadian Pacific Railway Company, S.C. 1891, c. 74, Schedule.

An Act to incorporate the New Brunswick Railway Company, S.N.B. 1870, c. 49.

Manitoba Act, 1870, R.S.C. 1970, App. II, No. 8, s. 23.

National Transportation Act, 1987, R.S.C., 1985 (3rd Supp.), c. 28, ss. 65, 65(4), 159, 160, 161, 163, 165.

National Transportation Agency General Rules, SOR/88-23, ss. 11, 12.

Railway Act, R.S.C. 1970, c. R-2, s. 254(4).

Railway Act, R.S.C., 1985, c. R-3, ss. 3(1)(a), 258, 350 (as am. by R.S.C., 1985 (3rd Supp.), c. 28, s. 342).

Unemployment Insurance Regulations, C.R.C., c. 1576.

CASES JUDICIALLY CONSIDERED

APPLIED:

Montreal Street Railway Company v. Normandin, [1917] A.C. 170 (P.C.); Ogilvie Mills Ltd. v. Canada (National Transportation Agency), A-1106-91, Marceau and Décary JJ.A., judgment dated 11/2/92, F.C.A., not yet reported; Reference re Manitoba Language Rights, [1985] 1 S.C.R. 721; (1985), 19 D.L.R. (4th) 1; [1985] 4 W.W.R. 385; 35 Man. R. (2d) 83; 59 N.R. 321.

DISTINGUISHED:

Regional Municipality of Ottawa-Carleton v. Canada Employment and Immigration Commission (1986), 86 CLLC 14,053; 69 N.R. 156 (F.C.A.); Caledonian Railway Co. v. Greenock and Wemyss Bay Railway Company (1874), L.R. 2 S.c. & Div. 347 (H.L.); Manchester Ship Canal Company v. Manchester Racecourse Company, [1900] 2 Ch. 352; affd [1901] 2 Ch. 37 (C.A.).

CONSIDERED:

Order 1978-5 of Review Committee of Canadian Transport Commission, [1982] 2 F.C. 289; (1981), 46 N.R. 412 (C.A.).

APPEALS from National Transportation Agency’s orders authorizing the abandonment of railway branch lines for failure to comply with the time limit imposed by National Transportation Act, 1987, subsection 165(1). Appeals dismissed.

COUNSEL:

Donald M. Gillis, Q.C. and David N. Rogers for appellant.

Louis Gautier for respondent National Transportation Agency.

Forrest C. Hume and Philip A. Huband for respondent Canadian Pacific Limited.

No one appearing for intervenor New Brunswick Railway Company.

No one appearing for intervenor Deputy Attorney General of Canada.

SOLICITORS:

Gilbert, McGloan, Gillis, Saint John, New Brunswick, for appellant.

Legal Services Branch, National Transportation Agency of Canada, Ottawa, for respondent National Transportation Agency.

C.P. Rail Legal Services, Montréal, for respondent Canadian Pacific Limited.

Osler, Hoskin & Harcourt, Ottawa, for intervenor New Brunswick Railway Company.

Deputy Attorney General of Canada, for intervenor Deputy Attorney General of Canada.

The following are the reasons for judgment rendered in English by

Desjardins J.A.: These are five appeals with leave of this Court, pursuant to section 65 of the National Transportation Act, 1987[1] (the Act), from five orders of the National Transportation Agency (the Agency) granting authority to Canadian Pacific Limited (CP) to abandon the operation of four segments of the Shogomoc Subdivision together with the operation of the Tobique Subdivision between Perth Junction and Plaster Rock in the province of New Brunswick.

The first appeal, bearing file number A-101-90, deals with order number 1989-R-90, dated 31 May 1989, which concerns the operation of a segment of the Shogomoc Subdivision from mileage 51.5 to mileage 54.2 between Woodstock and Newbury, and from a point north of Upper Kent (M 88.5) to a point south of Aroostook (M 104.6), a total distance of 18.8 miles.

The second appeal, bearing file number A-102-90, deals with order number 1989-R-91, dated 12 May 1991, which concerns the operation of the Tobique Subdivision between Perth Junction (mileage 0.0) and Plaster Rock (mileage 27.5), a total distance of 27.5 miles.

The third appeal, bearing file number A-478-91, deals with order number 1991-R-10, dated 9 January 1991, which concerns a segment of the Shogomoc Subdivision from Aroostoock (mileage 104.6 to mileage 105.8) and the adjacent segment of the Edmunston Subdivision from mileage 0.0 to mileage 20.4, a total distance of 21.6 miles.

The fourth appeal, bearing file number A-479-91, deals with order number 1991-R-11, dated 9 January 1991, which concerns a segment of the Shogomoc Subdivision from mileage 0.0 to mileage 51.5, a total distance of 51.5 miles.

The fifth appeal, bearing file number A-218-92, deals with order number 1991-R-288, dated 3 June 1991, which concerns the operation of a segment of the Shogomoc Subdivision from mileage 54.2 to mileage 88.5 and the segment of the Gibson Subdivision from mileage 0.0 to mileage 22.0, a total distance of 56.3 miles.

In each of these orders, the abandonment was to be effective on a certain date: in some cases, it was thirty days from the date of the order; in other cases, sixty days from the date of the order; and, in others, it was to be on December 31, 1991.

The parties chose to proceed before us on the two appeals bearing numbers A-218-92 and A-102-90 which together represent the complete range of issues raised in the five appeals. The respondent’s Agency, which is entitled to be heard on the argument,^[2] filed a memorandum of fact and law. At the hearing, it adopted the oral argument of Canadian Pacific Limited. The intervenor, the New Brunswick Railway Company (NBR), filed an intention to participate on April 12, 1990. It chose not to appear nor to make submissions.

In appeal A-218-92, which incorporates appeals A-101-90, A-478-91 and A-479-91, the appellant, which is a worldwide food processing company having established plants in Florenceville and Grand Falls, New Brunswick, objects to the orders for the following reasons, namely:

(1) That the Agency erred as a matter of law or jurisdiction by failing to comply with a condition precedent to the exercise of its jurisdiction, since none of five orders were pronounced within six months after the application for abandonment was received by it, as provided by subsection 165(1) of the Act.

(2) That the Agency erred as a matter of law or jurisdiction since it failed to give proper force and effect to a long-term lease between the respondent CP and the intervenor NBR to operate the branch lines, the said lease being part of the definition of “Special Act” pursuant to paragraph 3(1)(a) of the Railway Act[3]. because of its confirmation by Parliament and the Legislature of New Brunswick.

(3) That the Agency erred as a matter of law or jurisdiction by breaching the rules of natural justice. Specifically, the Agency refused to order CP to disclose the actual losses in its rail operations. It frustrated the appellant’s right to cross-examine CP’s witnesses on matters regarding the alleged losses of CP. And while it readily agreed to the non-disclosure of information given by CP concerning the actual losses incurred by it,[4] it refused such a request when formulated by the appellant.[5]

1

It is not in dispute that each of the orders of the Agency was rendered after the six-month time frame provided in subsection 165(1) of the Act which reads:

165. (1) Where the Agency determines that a branch line or segment thereof is uneconomic and that there is no reasonable probability of its becoming economic in the foreseeable future, the Agency shall, within six months after the application for the abandonment is received by the Agency, order that the operation of the branch line or segment be abandoned. [Emphasis added.]

The appellant’s contention is that such an obligatory time frame is a condition precedent to the exercise of the Agency’s jurisdiction. The time frame period, coupled with the word “shall”, it says, is not to be found in any version previous to the adoption of the Act in 1987. The predecessors to section 165 of the National Transportation Act, 1987, namely subsection 254(4) of the Railway Act, R.S.C. 1970, c. R-2 and section 258 of the Railway Act, R.S.C., 1985, c. R-3, did not contain the requirement that the Agency “shall” make its order within six months of receipt of the application. The intent of Parliament has therefore now been made clear. Parliament, in altering the subsection to include the six-month mandatory provision from receipt of application to disposition, intended that these applications be dealt with expeditiously. In failing to meet such deadline, each and every one of the orders of the Agency are null and void. The appellant in support cites the Reference re Manitoba Language Rights[6] and the case of Regional Municipality of Ottawa-Carleton v. Canada Employment and Immigration Commission.[7]

In Manitoba Language Rights, the Supreme Court of Canada dealt with the word “shall” in the context of section 23 of the Manitoba Act, 1870 [R.S.C. 1970, App. II, No. 8]. It considered first the word in its ordinary grammatical sense. It stated at page 737:

As used in its normal grammatical sense, the word “shall” is presumptively imperative. See Odgers’ Construction of Deeds and Statutes (5th ed. 1967) at p. 377; The Interpretation Act, 1867 (Can.), 31 Vict., c. 1, s. 6(3); Interpretation Act, R.S.C. 1970, c. I-23, s. 28 (“shall is to be construed as imperative”). It is therefore incumbent upon this Court to conclude that Parliament, when it used the word “shall” in s. 23 of the Manitoba Act, 1870 and s. 133 of the Constitution Act, 1867, intended that those sections be construed as mandatory or imperative, in the sense that they must be obeyed, unless such an interpretation of the word “shall” would be utterly inconsistent with the context in which it has been used and would render the sections irrational or meaningless. See, e.g. Re Public Finance Corp. and Edwards Garage Ltd. (1957), 22 W.W.R. 312, p. 317 (Alta. S.C.).

It later said at pages 740-741:

… it has been argued by the Attorney General of Manitoba that, though the words of s. 23 of the Manitoba Act, 1870 and s. 133 of the Constitution Act, 1867 are mandatory in the common grammatical sense, they are only directory in the legal sense and, thus, laws in violation of these provisions will not necessarily be invalid.

…

A distinction between statutory provisions that are mandatory in the sense that failure to comply with them will lead to invalidity of the act in question, and directory, in the sense that failure to comply will not necessarily lead to such invalidity, is one that is found in Anglo-Canadian law. The most commonly cited formulation is Sir Arthur Channell’s in Montreal Street Railway Co. v. Normandin, [1917] A.C. 170 (P.C.), at pp. 174-75:

The question whether provisions in a statute are directory or imperative has very frequently arisen in this country, but it has been said that no general rule can be laid down and that in every case the object of the statute must be looked at … When the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience, or injustice to persons who have no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of the acts done.

Then, at page 741, the Court concluded:

There is no authority in Canada for applying the mandatory/directory doctrine to constitutional provisions. It is our belief that the doctrine should not be applied when the constitutionality of legislation is in issue.

The National Transportation Act, 1987 is of course not a constitutional document. The mandatory/directory doctrine may therefore be considered.

Under the rule in Montreal Street Railway Company v. Normandin,[8] the object of the statute is to be looked at. There is no doubt that a public duty is hereby imposed on the Agency since, under section 159 of the Act, no railway company shall abandon the operation of a line of railway except pursuant to an order of the Agency. Section 160 prescribes that a ninety-day notice be given by a railway company before an application for abandonment is filed. This in turn allows any person who may wish to oppose the abandonment of the operation of the line to file its written statement with the Agency not more than sixty days after the day the notice was given.[9] In addition, the Act sets out the duties of the Agency in cases of opposition. Under section 163, it must review the statement of costs and revenues of the applicant, determine the amount of the actual loss, if any, of the railway company attributable to the branch line in each of the prescribed financial years and make them public. It is only after holding hearings that the Agency can determine whether the branch line is economic or uneconomic and, if it is uneconomic, whether there is a reasonable probability of the branch line becoming economic in the foreseeable future.

The Agency, of course, can never predict the number of parties that will appear before it. In the case at bar, when the public hearing commenced on January 29, 1991, eighteen were registered to appear.[10] I must consider, therefore, under the principles elaborated in Normandin, whether those who come under the jurisdiction of the Agency, but have no control over its process, would be at a serious general disadvantage if the Agency’s orders would be declared null and void. I have no doubt such would be the result since it would, for no clear reason, put the parties in the situation they were in at the beginning of the hearing. I see no benefit in requiring them and the Agency to start anew, and I see no public interest served in doing so.

The case of Regional Municipality of Ottawa-Carleton v. Canada Employment and Immigration Commission is of no assistance to the appellant. There, an application for a premium rate reduction had been filed outside the time limits prescribed by the Unemployment Insurance Regulations [C.R.C., c. 1576]. The Court rejected the argument which attempted to qualify such a requirement as being directory rather than mandatory. It held that such a reading would make the provision meaningless as it would read it out of the legislation altogether. Hugessen J.A. for the Court distinguished the Normandin case by saying:[11]

Where apparently imperative words in a statute, such as the “shall” in issue here, have been interpreted as being only directory it has always, as far as I know, been in situations where the failure to act timely might produce unfortunate consequences, not so much for the actor but for some innocent third party.

He concluded:[12]

I am not aware of any case, and none was cited, where an apparently mandatory time period set for the assertion of a claim by the party claiming has been held to be purely directory.

The Regional Municipality of Ottawa-Carleton case was therefore in a different context.

Applying the test in Normandin, I must therefore dismiss the appellant’s first point.

2

The appellant’s second point is that because of the contractual obligation contained in the lease signed between CP and NBR, on July 1, 1890, the Agency could not order the abandonment of the rail lines by CP. As the lease was ratified and confirmed by a statute of the Parliament of Canada in 1891,[13] as well as by an Act of the Legislature of New Brunswick that same year,[14] the responsibilities of CP, as lessee, would have become a statutory obligation or a liability, which could only be abrogated by an Act of Parliament or the Legislature of New Brunswick or both. Moreover, this lease being ratified and confirmed by both the Parliament of Canada and the Legislature of New Brunswick would come within the definition of “Special Act” as found in paragraph 3(1)(b) of the Railway Act.

An examination of the various transactions agreed to is essential for the appreciation of the appellant’s argument.

In 1870, the Legislature of New Brunswick incorporated the New Brunswick Railway Company (NBR) which was empowered to construct railroads and to sell, assign, transfer or lease them as deemed expedient.[15] By an Act of Parliament assented to March 21, 1881, its work was declared to be for the general advantage of Canada.[16] By the year 1890, NBR had acquired some thirteen rail lines in the province of New Brunswick, which it leased to CP for a term of nine hundred and ninety years. Article I of the lease provides the following:[17]

I

The railroads and properties hereby demised will be used, managed and operated by the lessee in a proper and judicious manner, according the best discretion and judgment of its managers, so as to secure the largest amount that can be realized therefrom, with a due regard to the service to be rendered to the public and to the preservation of said roads and properties in good order and condition for rendering such service efficiently and economically. [Emphasis added.]

Article III of the lease specifies that:

III

The lessee will use and operate the railroads and properties herein demised in accordance with the requirements of the respective Acts of incorporation of the respective companies and of the respective laws of Canada and New Brunswick ….

The lease was set in a schedule to a statute adopted by the Parliament of Canada in 1891 which stated:

1. The indenture made between the New Brunswick Railway Company and the Canadian Pacific Railway Company and dated the first day of July, one thousand eight hundred and ninety, of which a copy is set out in the schedule hereto, is hereby approved of, ratified and confirmed, and declared to be valid and binding on the parties thereto; and each of the companies parties thereto may do whatever is necessary to give effect to the substance and intention of the said indenture. [Emphasis added.]

The Act passed by the Legislature of New Brunswick for its part:

WHEREAS the New Brunswick Railway Company, by their petition, have set forth that on the first day of July last, by an agreement or lease, they leased to the Canadian Pacific Railway Company their line of Railway in this Province, and also the Railways owned by the Saint John and Maine Railway Company and the New Brunswick and Canada Railway Company, heretofore leased by the New Brunswick Railway Company, and that the said lines are operated and run by the Canadian Pacific Railway Company; and to prevent any doubts as to the right of the said Company to make such agreement and lease, have prayed that the same may be confirmed and become valid, and it is expedient to grant the prayer of the said petition;—

Be it therefore enacted by the Lieutenant Governor, Legislative Council, and Assembly, as follows: —

1. The agreement or lease made between the New Brunswick Railway Company and the Canadian Pacific Railway Company, bearing date the first day of July, A.D. 1890, transferring to the latter Company the railway lines of the said New Brunswick Railway Company, the New Brunswick and Canada Railroad Company and the Saint John and Maine Railway Company, is hereby in all respects confirmed and declared to be valid. [Emphasis added.]

I see nothing, either in the lease or in the various legislation, which confirms the position of the appellant that a contractual obligation existed between CP and NBR, which would have prevented the Agency from authorizing the abandonment of the line. The terms of the lease give a wide discretion to CP to operate the line “so as to secure the largest amount that can be realized therefrom, with a due regard to the service to be rendered to the public.” The fact that a statutory confirmation was given to the lease does not change the situation once it is clear that no specific obligation had been agreed to by the parties. To complete its argument on this point, the appellant has claimed, however, that during the period 1860-1890, the province of New Brunswick authorized a grant in fee simple of ten thousand acres of ungranted Crown lands for each mile of railway constructed. The lease contained an option to purchase by CP of one million six hundred and fifty thousand acres of timber lands for $927,600. According to CP witnesses, the option was not taken up and the timber lands are still owned by the NBR.[18] Therefore, says the appellant, in return for its grant of land, the province is entitled to the running of a railroad for the specific amount of time the lease is in operation. Unfortunately, I cannot see that any such obligation has been translated in the documents before us.

The appellant relies on a decision of our Court in Order 1978-5 of Review Committee of Canadian Transport Commission (In re)[19]. which, it argues, deals with the very issue at bar, and on the cases of Caledonian Railway Co. v. Greenock and Wemyss Bay Railway Company[20] and Manchester Ship Canal Company v. Manchester Racecourse Company.[21]

As I read it, the decision in Order 1978-5 of Review Committee of Canadian Transport Commission (In re) does not state, as the appellant contends, that although the Agency has jurisdiction to consider an abandonment application, when there are “Special Acts” applicable, the Agency has no choice but to give effect to the “Special Acts” and require the railway to continue the operation of its lines. In that case, the decision appealed from was one of the Review Committee of the Canadian Transport Commission which had determined that the passenger-train service between Victoria and Courtenay on a railway line built and owned by the Esquimalt and Nanaimo Railway Company and operated by Canadian Pacific Limited pursuant to a long-term lease made on July 1, 1912 was uneconomic and likely to continue to be uneconomic and ordered that Canadian Pacific Limited (Esquimalt and Nanaimo Railway Company) should not discontinue the operation of that service. The appellant made the argument, before the Commission and before our Court, that the Canadian Transport Commission had no jurisdiction to decide an application for discontinuance of the passenger-train service on that line because there were two Special Acts passed by the Parliament of Canada which prescribed that this service was not to be discontinued. That very point, however, was left open by Pratte J.A. as he gave the following reasons in dismissing the appeal:[22]

In my view, it is not necessary, in order to dispose of this appeal, to determine whether the appellant’s interpretation of the two Special Acts to which I have just referred is the correct one because even if it were, the order which is the subject of this appeal would nevertheless be an order that the Commission had the power to make. Let us assume, for a moment, without so deciding, that the interpretation of the two Special Acts proposed by the appellant must be adopted. According to that interpretation, the two Special Acts prescribe that the railway service between Esquimalt and Nanaimo shall not be discontinued. Pursuant to paragraph 3(1)(b) of the Railway Act, the provisions of the two Special Acts override those of the Railway Act, including section 260, “in so far as is necessary to give effect” to that prescription. Now, in order to attain that object, it would obviously be necessary to deny to the Commission and its committees the power to order that the railway service between Esquimalt and Nanaimo be discontinued. However, the decision of the Review Committee which is the subject of this appeal is not an order of that kind; it is a decision which determines that the passenger-train service between Victoria and Courtenay is uneconomic and orders that it shall not be discontinued. In my view, in order to give effect to the asserted prescription of the Special Acts, that the train service here in question be not discontinued, it is certainly not necessary to deny to the Commission the authority conferred on it by section 260 to find that the operation of the passenger-train service is uneconomic, since the existence of that power in no way conflicts with the obligation of the railway to continue the operation of its railway. It is not necessary either, in order to give effect to the Special Acts, to deny to the Commission the power to order that the railway service in question shall not be discontinued. That the Commission should have such a power in no way conflicts with the provisions of the Special Acts; on the contrary, the existence of that power would seem to be very useful, if not necessary, to give effect to the prescription contained in the Special Acts.

In the Caledonian Railway Co. v. Greenock and Wemyss Bay Railway Company,[23] the relevant provisions of the statute provided:

The said agreement shall be, and the same is hereby sanctioned and confirmed, and shall be as valid and obligatory upon the company and the Caledonian Railway Company respectively, as if those companies had been authorized by this Act to enter into the said agreement, and as if the same had been duly executed by them after the passing of this Act.

Commenting on these words, the Lord Chancellor said:[24]

Up to this point, the enactment does no more than give statutory validity to the agreement; but the clause proceeds in these words

And it shall be lawful for the company (that is, the Greenock and Wemyss Bay Railway Company) and the Caledonian Railway Company respectively, and they are hereby required, to implement and fulfil all the provisions and stipulations in the said agreement contained. [Emphasis added.]

It is with regard to this addition that the Lord Chancellor then decided that “every provision and stipulation in that agreement becomes as obligatory and binding on the two companies as if those provisions had been repeated in the form of statutory sections.”[25]

No such terms exist in the legislation presently under review.

In the case of Manchester Ship Canal Company v. Manchester Racecourse Company,[26] the dispute arose with regard to an agreement between two companies concerning a right of first refusal with respect to the sale of a racecourse. The agreement was scheduled to an Act of Parliament which provided that the agreement was “confirmed and declared to be valid and binding upon the parties thereto.” Again, this wording is not dissimilar to that used in either the federal or provincial Act herein.

Mr. Justice Farwell concluded, based on the words of confirmation, that:

… the Act of Parliament confirms the scheduled agreement and declares it to be valid and binding upon the parties, it means what it says and gives it validity.[27]

At pages 361-362 of the Manchester Ship Canal Company case, Mr. Justice Farwell distinguished, however, between such a validating statute and one that requires the parties to fulfill their contractual obligations:

Of course, if the Legislature says to the parties, “Not only do we declare the agreement valid between you, but you shall perform it,” then there is a statutory enactment over and above the agreement validated between the parties .… [Emphasis added.]

Again, this case is different from ours.

I conclude that the legislation simply confirmed a lease between the parties which otherwise might have been unenforceable on the ground, for example, of ultra vires the parties, but that no obligation is to be found in the lease signed by the parties nor in the legislation of either the Parliament of Canada or the Legislature of New Brunswick, which prevented the Agency from deciding the way it did.

3

The third argument submitted by the appellant is to the effect that the Agency breached the rules of natural justice by refusing to order CP to disclose the actual losses of its rail operations.

It is established that, on January 25, 1991, the Agency denied the appellant’s request for such disclosure on the basis that its relevancy to the case before it had not been established. I do not see, however, how a breach of natural justice might have occurred in so doing.

In a recent decision of this Court in Ogilvie Mills Ltd. v. Canada (National Transportation Agency),[28] the Agency had also refused to compel the production of certain documents by the Canadian National Railway Company related to the proposed abandonment of a railway line. Décary J.A., in dismissing the appeal, gave the following reasons:[29]

It is apparent from section 160 and following of the Act, in my view, that those who wish to file a statement of opposition pursuant to section 161 or to participate in a hearing held pursuant to section 164 are not entitled to the disclosure of the documents relevant to the determination of the Agency pursuant to paragraph 163(1)(b).

Moreover, those documents relate to the costs of a railway company and are, for that reason, confidential. It is apparent from section 350 of the Railway Act as well as from subsection 11(11) of the Agency Rules that the Agency may not order the disclosure of such information unless it be of opinion that the disclosure would be in the public interest. Certainly, the Agency cannot form such an opinion when, as here, it does not even know whether the disclosure would serve a useful purpose.

The same reasoning applies with regard to the cross-examination of CP’s witnesses on matters regarding the alleged losses of CP.

With regard to CP’s request for non-disclosure of documents concerning actual losses incurred by CP, which was granted by the Agency, and with regard to the Agency’s refusal of a request formulated by the appellant concerning material of a commercially sensitive nature, both decisions came under the discretion of the Agency under section 350 [as am. by R.S.C., 1985 (3rd Supp.), c. 28, s. 342] of the Railway Act and sections 11 and 12 of its General Rules [National Transportation Agency General Rules, SOR/88-23] and should not be interfered with.

I must therefore dismiss the appellant’s third argument.

In so doing, I would dismiss the appeals A-101-90, A-478-91 and A-479-91.

The appellant’s argument raised in file A-102-90 relates to a letter sent to the Agency on March 20, 1989 advising it that it had been informed of the intention of CP to abandon trackage, the effect of which would be to sever the Fredericton railway bridge used jointly by CN and CP with the result that rail service north of Fredericton would be eliminated.

The Agency, by letter dated May 3, 1989, advised the appellant that the final date for filing interventions was February 3, 1989, with the result that the submission could not be considered in the context of the CP’s application. However, in a letter to the Agency in response to its March 23, 1989 inquiry,[30] CN advised on March 28, 1989:

… that it is unable to give an indication to the Agency at this time of its future plans to abandon the segment of the line between McGiveny and Oromocto, N.B.[31]

The appellant argues that CN made the statement knowing full well that the President and Chief Officer of CN had indicated, on September 10, 1986, that the railway intended to abandon the Oromocto subdivision. It claims that this new and important information, which was within the Agency’s knowledge, should have been either considered by the Agency or that an order should have been made to hold a public hearing. Such failure by the Agency to take into consideration CN’s intention to sever the Fredericton railway bridge amounted to a failure by the Agency to take into account a highly relevant consideration which leads to the conclusion that it failed to exercise its discretion in accordance with proper principles.

It is clear from the record that the Agency considered the allegation made by the appellant that CN intended to apply to abandon operations over the Fredericton railway bridge. It wrote to CN and was informed, as per the extract quoted above, that CN could not advise when a decision concerning the future of the said trackage would be made.

Moreover, even if CN had intended to apply to abandon its operations over the Fredericton railway bridge as alleged, CN could not have done so unilaterally, but would have had to seek approval from the Agency pursuant to subsection 159(1) of the Act. I fail to see that the Agency has breached the rules of fairness and natural justice in acting the way it did.

I would dismiss appeal A-102-90.

Mahoney J.A.: I agree.

Robertson J.A.: I agree.

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