Letter Decision No. 2015-03-12

Redacted version

March 12, 2015

Application by Louis Dreyfus Commodities Canada Ltd. against the Canadian National Railway Company, pursuant to sections 25, 26 and subsections 28(2) and 33(4) of the Canada Transportation Act, S.C. 1996, c. 10, as amended and the request by the Canadian National Railway Company to summarily dismiss the application.

Case number: 
14-05609

INTRODUCTION

[1] On November 3, 2014, Louis Dreyfus Commodities Canada Ltd. (LDC) filed an application with the Canadian Transportation Agency (Agency) pursuant to sections 25, 26 and subsections 28(2) and 33(4) of the Canada Transportation Act, S.C. 1996, C. 10, as amended (CTA), asking the Agency to:

  1. order the Canadian National Railway Company (CN) to refrain from applying the new allocation methodology as defined in CN’s letter to LDC dated August 29, 2014, for the supply of rail cars to six LDC facilities (Glenavon, Aberdeen, Joffre, Lyalta, Rycroft and Dawson Creek) before redacted as a final order, or on an interim basis pending the resolution of the application if it is to be decided after redacted;
  2. redacted, and
  3. enforce its Decision (Louis Dreyfus Commodities Canada Ltd. v. Canadian National Railway), dated October 3, 2014 (Confidential Decision) by:
    1. redacted; and
    2. ordering CN to refrain from applying the new allocation methodology for the supply of rail cars to four facilities (namely Glenavon, Aberdeen, Joffre, and Lyalta)
  4. order confidentiality of information contained in the application;
  5. order costs against CN.

[2] On November 10, 2014, CN filed a request pursuant to sections 27 and 38 of the Canadian Transportation Agency Rules (Dispute Proceedings and Certain Rules Applicable to All Proceedings) (Dispute Adjudication Rules) for an order dismissing LDC’s application in its entirety on the grounds that it does not raise any reasonable issue to be determined and is an abuse of process. CN also requests costs on a solicitor and client basis.

[3] On November 28, 2014, the Agency stayed the pleadings process in LDC’s application pending the consideration of CN’s request.

ISSUE

[4] Should the Agency summarily dismiss LDC’s application in whole or in part?

CONCLUSION

[5] The Agency finds that LDC’s application does not disclose a reasonable cause of action. Accordingly, and for the following reasons, the Agency grants CN’s request and thereby dismisses summarily LDC’s application, without costs.

PRELIMINARY MATTER

Request for confidentiality

[6] LDC requests confidentiality with respect to information contained in its application, including supporting material, which it filed in both a full and redacted version. The claim for confidentiality covers the following:

  • confidential information filed as part of the proceeding in the Confidential Decision;
  • the Confidential Contract;
  • references to commercially-sensitive information that are internal to LDC; and,
  • information that is otherwise unavailable to LDC’s competitors.

[7] CN does not oppose the applicant’s request for confidentiality.

[8] The Agency confirmed the confidentiality of certain information received as part of the proceeding related to the Confidential Decision. This information will remain confidential in the context of this application.

[9] Further, the Agency finds that the Confidential Contract, the references to commercially-sensitive information that are internal to LDC and the information that is otherwise unavailable to LDC’s competitors are relevant to this dispute proceeding and that the specific direct harm likely to result from the disclosure justifies confidentiality.

[10] The Agency confirms the confidentiality of the information as requested by LDC. The unredacted version of the documents will be kept on the Agency’s confidential record. The redacted version of the documents will be placed on the Agency’s public record.

POSITION OF CN

Reasonable issues to be determined

[11] CN submits that LDC’s application ought to be dismissed in a summary fashion as it does not raise any reasonable issue to be determined. CN considers the application to be a thinly veiled pre-emptive level of service complaint, completely devoid of any factual context because LDC is relying upon hypothetical responses to non-existent requests for rail service.

[12] CN points out that in its letter of August 29, 2014 regarding its car allocation policy, CN advised all of its grain shippers that, effective September 14, 2014 the methodology used “to fairly distribute the supply of available hopper cars for the 2014-2015 crop year at times when demand exceeds available supply” would be updated. CN states that the figures used in the letter are merely estimates of the number of cars that LDC may expect to receive in the event that demand exceeds the supply available in any given week. Therefore, the actual number of cars that LDC will receive at each of its facilities on a weekly basis is a future event that has yet to occur.

[13] According to section 26 of the CTA, the Agency has the authority “to require a person to do or refrain from doing anything that the person is or may be required to do or is prohibited from doing” under the CTA. CN notes in regard to LDC’s request for an order for CN to refrain from applying the new allocation methodology, neither the car allocation policies in general, nor the new allocation methodology in particular, are prohibited under the CTA. Therefore, there is no basis for LDC’s claim that the new allocation methodology is, in itself, prohibited.

[14] CN is of the view that LDC is asking the Agency to take the following “leap of faith”:

  • the new allocation methodology will result in CN breaching its level of service obligations to LDC;
  • the CTA prohibits level of service breaches; and,
  • therefore, the Agency should order CN to refrain from applying the new allocation methodology at LDC’s facilities.

[15] CN believes that LDC’s argument rests on a faulty premise given that there has not been any determination that the new allocation methodology will “inevitably” result in CN breaching its level of service obligations. Furthermore, CN states that such a determination could not be made in the context of this proceeding.

[16] CN points to key features of the Confidential Decision: the level of service provisions are remedial, addressed on a case-by-case basis, and application-specific evidence must be brought forward by the parties so that “reasonableness” is a factual question ─ not one that can be answered in the abstract. CN concludes that LDC is asking the Agency to make a level of service determination in an evidentiary vacuum.

[17] As LDC’s application is not a level of service complaint, CN argues that there is no obligation on CN to justify a service failure, especially one that has not occurred. CN asserts that the actual number of cars that LDC may order in the future, and whether the request will be found reasonable, remains to be seen. As a result, it is not possible to determine the actual number of cars that CN will deliver in the future, in response to a request for service sometime in the future.

[18] CN submits that the intent of its August 29, 2014 letter was simply to make the new allocation methodology as transparent as possible, consistent with previous decisions of the Agency. CN acknowledges that the mere fact it has a car allocation policy does not absolve it from meeting its level of service obligations to shippers. However, the mere existence of the new allocation methodology does not amount to a violation of the level of service provisions of the CTA.

[19] CN states that it is not appropriate for the Agency to entertain an application that would amount to a general inquiry into the commercial operation of a railway company. The role of the Agency is not to dictate the way CN must move its traffic or to vet CN’s car allocation policies in the abstract ─ it is to respond to concrete complaints based upon a clear factual foundation, rather than mere assumptions and hypotheticals.

[20] CN argues that as the allegations in the application are both unsupported and incapable of being proven, the application is bound to fail, rather than be struck down on the basis of jurisdictional arguments. Moreover, in its response, LDC has readily conceded that the allegation of a breach of level of service obligation is a legal conclusion, one which LDC has not and cannot support with evidence in the context of this application.

[21] redacted .

[22] redacted .

[23] redacted .

[24] CN submits that, under the guise of enforcement, LDC is now asking the Agency to order a remedy that LDC was never granted in the first instance and is therefore clearly beyond the scope of what is contemplated under subsection 33(4) of the CTA.

[25] CN argues that Canadian courts have emphasized that the interpretation of a court order should not be governed by the subjective views of one of the parties (Yu v. Jordan, 2012 BCCA 367 at para 53), but rather it is for the court to determine the meaning of its order such that additional obligations cannot subsequently be inserted, based merely on the interpretation of one of the parties.

[26] redacted .

[27] To the extent that LDC would like the Agency to establish a prospective level of service obligation applicable to each of its facilities once the relevant facility is no longer subject to the terms of the Confidential Contract, CN states that LDC must follow the procedures established under the CTA for obtaining that remedy and it is inappropriate to ask the Agency to order a remedy it was never granted in the first instance, under the guise of enforcement.

[28] CN further argues there is simply no basis for enforcing the legal principles and policy in the Confidential Decision because a tribunal’s reasons for decision cannot be enforced as though they constitute an order. CN’s new allocation methodology only became effective on September 14, 2014, and was not the subject of the Confidential Decision dated October 3, 2014, nor did the Agency make any findings with respect to a “comparable” car allocation policy in the Confidential Decision.

[29] redacted .

[30] To the extent that LDC simply argues the new allocation methodology will “inevitably” result in CN breaching its level of service obligations to LDC as described by the Agency in the Confidential Decision, CN repeats and relies on its submissions that LDC has not and cannot show that CN’s new allocation methodology in and of itself will result in CN breaching its level of that service obligations to LDC.

Abuse of process

[31] CN submits LDC’s application ought to be dismissed because it is a flagrant abuse of process as it appears to be no more than a pre-emptive level of service complaint masquerading as an enforcement application. In addition, given that LDC has already filed two level of service complaints (one of which was decided on October 3, 2014 and the other still pending before the Agency at this time) for the very same six facilities that are the subject of this application, such a complaint cannot be founded on prospective or theoretical conduct.

[32] CN argues that by bypassing the proper statutory mechanisms under the CTA, this application is an attempt to involve the Agency in the day-to-day operations of CN by implying that the new allocation methodology was the subject of the determination in the Confidential Decision, which is not the case.

[33] CN argues that according to the Agency’s direction in the Decision, its new allocation methodology is intended to be both transparent and equally applicable to all shippers, and by requesting an exemption in advance of the allocation, LDC is seeking preferential treatment from the Agency. redacted .

[34] CN asserts that similar to all other Agency decisions, the Confidential Decision, may be relevant to future issues as a matter of precedent, but it is not a declaration nor a manifestation of current transportation policy as LDC has suggested.

[35] CN further argues that the Agency does not play a role in the development of transportation policy. The Agency’s role is to enforce its statutory mandate which includes the level of service regime, but does not include operational matters such as an allocation methodology relating to CN’s common carrier obligations.

[redacted]

[36] redacted .

[37] redacted .

[38] redacted .

[39] For all the above reasons, CN requests the Agency to summarily dismiss LDC’s application in its entirety.

POSITIONS OF LDC

Reasonable issues to be determined

[40] LDC claims that there is only one question for the Agency to answer with respect to striking out pleadings for failure to disclose a reasonable cause of action in CN’s request to dismiss: whether CN has demonstrated that LDC’s application discloses no reasonable claim, assuming all of the facts LDC has pleaded are true.

[41] LDC argues that CN is unable to meet the stringent standard that applies and has ignored the test the Agency adopted in 360-R-2014">Decision No. 360-R-2014 (Canadian Canola Growers Association v. Canadian National Railway Company and the Canadian Pacific Railway Company) [CCGA Decision] which is the following:

According to the well-known test applicable to a motion to dismiss established by the Supreme Court of Canada, a case will only be struck if it is plain and obvious, assuming the facts pleaded to be true, that the pleadings disclose no reasonable cause of action (R. v. Imperial Tobacco Canada Ltd., [2011] S.C.C. 42 (Imperial Tobacco) Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 2 S.C.R. 263, at para. 15; Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at p. 980). The test sets a very high bar. In that respect, the burden is on the party seeking the pleading to be struck.

[42] LDC argues that its case is entirely distinguishable from the CCGA Decision in that LDC’s application alleges very specific misconduct: CN continues to allocate cars to specific LDC facilities based redacted and will inevitably lead to level of service breaches.

[43] LDC argues that CN has made no submissions regarding the Agency’s jurisdiction to afford LDC relief under section 26 of the CTA and wrongly asserts that LDC’s claim is a level of service complaint, whereby LDC must prove a violation of the level of service provisions of the CTA in order to obtain the relief requested.

[44] LDC’s position is that its application is not a level of service complaint – it is an application for relief under section 26 of the CTA which provides that the Agency “may require a person to refrain from doing anything that is prohibited by the CTA such as breaching sections 113 to 115”. LDC asserts that the language of section 26 is intended to and indeed can only operate prospectively, thus requiring no proof of any prior violation of the CTA.

[45] LDC notes that CN has cited no authority to place such a limitation on the express language of section 26, nor provided any reason why this provision should not be applied in this case in accordance with its explicit terms.

[46] LDC asserts that based on CN’s new allocation methodology, once CN stops serving the Glenavon and Aberdeen facilities under the terms of the Confidential Contract in redacted, LDC will receive far fewer cars than it actually needs. LDC adds that this situation will be further exacerbated once the Confidential Contract ceases to govern the Joffre and Lyalta facilities redacted. Therefore, LDC concludes that CN’s new allocation methodology will necessarily result in the breach of CN’s statutory level of service obligations to LDC, which is conduct prohibited by the CTA and the Agency should intervene to prevent it.

[47] LDC is of the view that it has pled the necessary material facts to support this conclusion and has also provided all of the evidence necessary to prove its claim under section 26.

[48] LDC claims that CN’s new allocation methodology warned that LDC may receive fewer cars than predicted, and CN never indicated that LDC could expect to receive more cars than forecasted during periods of rationing. Therefore, the inescapable conclusion is for every reasonable request for cars that LDC makes above CN’s forecasted car supply, CN will breach its statutory level of service obligation to LDC. In addition, CN failed to provide LDC with any explanation that could possibly justify these inevitable service failures.

[49] LDC asserts that its evidence is not “hypothetical” as characterized by CN. In its reply to its Interim Order request, LDC indicates that it ordered redacted cars in redacted and redacted cars in redacted and CN provided a total of only redacted cars per week to service all six of LDC’s CN-served facilities, while the Rycroft, Dawson Creek, Aberdeen and Glenavon facilities received a total of only redacted cars for all four facilities in each of those weeks.

[50] For redacted, LDC ordered a total of redacted cars to its six CN-served facilities and CN cancelled all but redacted of these orders, and then only confirmed redacted of the car orders it did not cancel - a mere redacted of the cars reasonably requested for that week.

[51] LDC disagrees with CN’s contention that LDC missed certain elements of the Confidential Decision, especially the implication that it addressed the issue of whether the Agency can act to prevent level of service breaches before they occur. With respect to the statement “the level of service provisions are remedial and are addressed on a case-by-case basis”, LDC argues that CN erroneously transposes it into a limitation on the Agency’s distinct powers under section 26 to prevent impending violations under the CTA.

[52] With respect to the statement “parties must bring before the Agency application-specific evidence”, LDC claims that CN is misconstruing the law given that the Agency did not say “parties” but rather “a railway” must bring application-specific evidence to demonstrate it has made efforts to furnish adequate and suitable accommodation to a shipper who is advancing a level of service complaint. In any event, LDC asserts it has, in fact, provided “application-specific” evidence in this regard.

[53] With respect to “reasonableness”, LDC submits its application does not call upon the Agency to determine the reasonableness of any particular service request - since this is not a level of service complaint. However, given CN’s car new allocation policy cannot fulfill reasonable level of service requests (for more than redacted cars to service Glenavon, Aberdeen, Rycroft and Dawson Creek, or for redacted cars to service LDC’s six CN-served facilities), it should be prohibited from applying its policy to LDC’s facilities.

[54] redacted .

[55] redacted .

[56] redacted .

[57] redacted .

Abuse of process

[58] LDC claims that CN fails to set out the legal test required to demonstrate that LDC’s application is an abuse of process ─ i.e., the application is so clearly futile, it has not the slightest chance of succeeding before any adjudicator. In LDC’s view, the application provides compelling, unrefuted evidence that CN’s new allocation methodology will necessarily result in level of service failures.

[59] While LDC submits that it does not contend that the use of “historical allocations” will inexorably result in breaches of CN’s level of service obligations, it does argue that redacted and that CN’s particular policy will necessarily result in such breaches. LDC adds that in the Confidential Decision, the Agency determined that CN breached its level of service obligations by employing a “historical allocation” policy which is once again employed in the current new allocation methodology.

[60] In response to CN’s assertions that a tribunal’s reasons for decision cannot be enforced as though they constitute an order, LDC states that the Agency has not been asked that in LDC’s application. LDC is requesting the Agency to exercise its jurisdiction under subsection 33(4) to enforce the findings of law and policy as applicable to the two parties involved in the dispute leading to the Confidential Decision.

[61] LDC contends that subsection 33(4) distinguishes the Agency’s power to enforce its “decision” from its power to enforce its “orders”. LDC adds that CN has cited no authority to suggest that LDC’s interpretation of subsection 33(4) is incorrect.

[62] LDC does not contend that a valid allocation policy must justify service failures that have yet to occur, but claims CN has not provided any valid excuse that could justify its impending service failures.

[redacted]

[63] redacted .

[64] redacted .

ANALYSIS AND FINDINGS

Test respecting reasonable cause of action

[65] The Agency is of the opinion that CN’s request must be considered in light of subsection 5(1) of the Dispute Adjudication Rules which provides that the Rules “are to be interpreted in a manner that facilitates the most expeditious determination of every dispute proceeding, the optimal use of Agency and party resources and the promotion of justice”.

[66] In the context of dispute proceedings, the Agency strives to ensure the process is fair as well as efficient, so that cases are resolved in a timely fashion with minimal cost or other imposition on either the parties or the Agency. This often involves a balancing of rights and interests. Proportionate approaches are required for different types of cases to ensure efficient and effective use of resources for dispute resolution.

[67] The Agency will apply these principles in its consideration of this matter.

[68] According to the well-known test applicable to a request to dismiss established by the Supreme Court of Canada, a case will only be struck if it is plain and obvious that, assuming the facts pleaded to be true, the pleadings disclose no reasonable cause of action (R. v. Imperial Tobacco Canada Ltd., [2011] S.C.C. 42 (Imperial Tobacco) Odhavji Estate v. Woodhouse, 2003 SCC 69, [2003] 3 S.C.R. 263, at para. 15; Hunt v. Carey Canada Inc., [1990] 2 S.C.R. 959, at p. 980). The test sets a very high bar. In that respect, the burden is on the party seeking the pleading to be struck.

[69] In Imperial Tobacco, the Supreme Court of Canada reviewed the purpose of this test at paragraphs 19, 20 and 22 as follows:

The power to strike out claims that have no reasonable prospect of success is a valuable housekeeping measure essential to effective and fair litigation. It unclutters the proceedings, weeding out the hopeless claims and ensuring that those that have some chance of success go on to trial.

This promotes two goods — efficiency in the conduct of the litigation and correct results. Striking out claims that have no reasonable prospect of success promotes litigation efficiency, reducing time and cost. The litigants can focus on serious claims, without devoting days and sometimes weeks of evidence and argument to claims that are in any event hopeless. The same applies to judges and juries, whose attention is focused where it should be — on claims that have a reasonable chance of success. The efficiency gained by weeding out unmeritorious claims in turn contributes to better justice. The more the evidence and arguments are trained on the real issues, the more likely it is that the trial process will successfully come to grips with the parties’ respective positions on those issues and the merits of the case.

[…]

A motion to strike for failure to disclose a reasonable cause of action proceeds on the basis that the facts pleaded are true, unless they are manifestly incapable of being proven: Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441, at p. 455. No evidence is admissible on such a motion: r. 19(27) of the Supreme Court Rules (now r. 9-5(2) of the Supreme Court Civil Rules). It is incumbent on the claimant to clearly plead the facts upon which it relies in making its claim. A claimant is not entitled to rely on the possibility that new facts may turn up as the case progresses. The claimant may not be in a position to prove the facts pleaded at the time of the motion. It may only hope to be able to prove them. But plead them it must. The facts pleaded are the firm basis upon which the possibility of success of the claim must be evaluated. If they are not pleaded, the exercise cannot be properly conducted.

[70] LDC bears the burden of enunciating in the pleadings the facts upon which LDC relies for each cause of action alleged. In other words, LDC’s legal conclusion that CN failed to meet its statutory obligations must be supported by the necessary factual basis ─ the allegations must be more than bare allegations of wrongdoing. If an applicant adopts a strategy that causes it to fail to meet this burden, its application may be dismissed summarily on a request to dismiss by the opposing party.

[71] There is a distinction between pleadings of fact and pleadings of legal conclusion. This distinction is explained by Justice Conrad, speaking for the majority of the Alberta Court of Appeal in Tottrup v. Alberta (Minister of Environmental Protection), 2000 ABCA 121, at paragraph 11:

[…] it is not the allegation of a duty at law that is critical, but the facts alleged supporting such a duty. For example, a statement of claim alleging only that “A” breached a duty owed to “B” thereby causing damage does not, in my view, disclose a cause of action. Pleadings are allegations of fact and, in my view, where negligence is alleged, that allegation must be supported by facts capable of sustaining a determination that a duty was owed, that an act or omission occurred breaching that duty, and that damages resulted. On a motion to strike it is the allegations of fact that must be examined to determine whether a cause of action exists.

[72] For LDC to succeed in its application, there has to be some link between the allegations and the material facts alleged to support it. In other words, the facts must be capable of demonstrating the alleged breach. The Agency finds that LDC provides no material facts to support the allegations it makes in its application. Rather as explained below, the application is unsupported and hypothetical.

Does LDC’s application disclose a reasonable cause of action?

[73] According to LDC, the basis of its application is the following:

CN has advised LDC that it will allocate cars to certain LDC facilities employing a car allocation policy that is contrary to sections 113 to 115 of the Act, the legal principles and policy established in the Louis Dreyfus Decision [dated October 3, 2014], as well as the Order of the Agency in that Decision. Applying this allocation policy will cause LDC to sustain significant service failures and damages. LDC is therefore entitled to the remedies it seeks under sections 25, 26, and subsection 33(4) of the Act.

[74] The Agency has considered the four matters requested in LDC’S application in order to determine whether CN’s request should be granted.

LDC’s request for the Agency to order CN to refrain from applying the new allocation methodology for the supply of rail cars to six LDC facilities (Glenavon, Aberdeen, Joffre, Lyalta, Rycroft and Dawson Creek)

[75] LDC seeks an order pursuant to section 26 of the CTA requiring CN to refrain from applying the new allocation methodology for the supply of cars to six CN-served LDC facilities because, according to LDC, the new allocation methodology is “violative” of sections 113 to 115 of the CTA.

[76] Section 26 of the CTA states:

The Agency may require a person to do or refrain from doing any thing that the person is or may be required to do or is prohibited from doing under any Act of Parliament that is administered in whole or in part by the Agency.

[77] Consistent with Agency 388-R-2013">Decision No. 388-R-2013, the Agency can only use its power to order CN to refrain from applying its car allocation methodology if the Agency first finds the application of the car allocation methodology to be prohibited under sections 113 to 115 of the CTA. These sections set out the statutory service obligations of federally-regulated railway companies. These provisions establish a standard that must be complied with by a railway company in serving its customers.

[78] Section 116 of the CTA confers upon the Agency the authority to investigate whether that standard is being met, and if not, remedial powers set out in subsection 116(4) may be used.

[79] The merit of a level of service application filed pursuant to section 116 of the CTA can only be assessed in the context of the factual level of service provided by a railway company and the legal representations made with respect to those facts, against the tests applied by the Agency in determining level of service breaches. In considering an application, the Agency assesses the specific facts presented by an applicant concerning the level of service being provided by a railway company. It is only if a railway company is found not to have fulfilled its obligations to a shipper that the Agency will consider the appropriate remedy to be ordered, having regard to the nature of the breach that has been identified.

[80] In light of the above, if section 26 of the CTA were to be used to order remedies designed to address substandard rail level of service, it would render the level of service complaint provision in section 116 of the CTA redundant. Sections 26 and 116 of the CTA are not interchangeable. The Agency is of the opinion that when the CTA makes certain remedies available upon a specific complaint, that complaint mechanism must be followed. Section 26 of the CTA cannot be used to circumvent the complaint process set out in section 116 of the CTA ─ this would be contrary to Parliament’s intent. Therefore, the Agency finds that section 26 does not apply in these circumstances.

[81] The Agency’s finding that section 26 does not apply in these circumstances is sufficient to dispose of this aspect of the application. However, even if section 26 could be used, LDC would still have to prove that section 113 to 115 have been breached. For the reasons set out below, the Agency is also of the opinion that LDC’s allegations of fact, even assuming they are true, are not capable of showing that CN has breached sections 113 to 115 of the CTA.

[82] redacted .

[83] The Agency notes LDC’s allegations that the new allocation methodology will result in LDC receiving only redacted cars and between redacted cars once the Confidential Contract expires. However, it is not sufficient for a party to simply state its conviction that a breach will occur ─ allegations must be set out with supporting material facts to demonstrate that this will eventually occur.

[84] The Agency is of the opinion that LDC’s allegations, as they relate to CN’s car allocation policy, are not linked to any specific car orders ─ rather they are general statements based on potential prospective car order requests. In its application, LDC did not provide any evidence to substantiate the effect the application of CN’s new allocation methodology will have on future car order requests, if any.

[85] At the time of this application, the allegations concerning the number of cars that LDC would have requested and received at each of its facilities on a weekly basis was speculative, and was based on the prospective application of the new car allocation policy. The Agency notes that LDC alleges some service issues at its Joffre facility for redacted, even though LDC recognizes that CN had not applied its new allocation methodology to that facility at that time. This cannot therefore be taken as evidence to show that CN’s new allocation methodology is, in and of itself, “violative” of sections 113 to 115 of the CTA.

[86] The Agency further notes that the letters from LDC’s customer (redacted andredacted) relate to service issues for the 2013-2014 crop year. Both letters were sent to LDC before CN’s new allocation methodology came into effect on September 14, 2014. The Agency finds that these letters are unrelated to the present issue with respect to the prospective impact of the new allocation methodology.

[87] In light of the above, and even with the necessary assumption that LDC’s allegations are true, the Agency is of the opinion that LDC’s application discloses no reasonable cause of action. As such, based on the application as it stands, the Agency must dismiss this matter.

[redacted]

[88] redacted

[89] redacted:

redacted .

[90] redacted .

[91] redacted .

[92] redacted .

[93] redacted .

a) LDC’s request that the Agency make an order enforcing the Confidential Decision by redacted .

[94] The Agency’s authority to enforce its decisions is set out in subsection 33(4) of the CTA, as follows:

(4) The Agency may, before or after one of its decisions or orders is made an order of a court, enforce the decision or order by its own action.

[95] redacted .

[96] redacted:

redacted .

[97] redacted:

redacted .

[98] The Court of Appeal for British Columbia in Yu v. Jordan, 2012 BCCA 367 stated the following, at paragraph 53:

In my view, the interpretation of a court order is not governed by the subjective views of one or more of the parties as to its meaning after the order is made. Rather an order, whether by consent or awarded in an adjudicated disposition, is a decision of the court. As such, it is the court, not the parties, that determines the meaning of its order. In my view, the correct approach to interpreting the provisions of a court order is to examine the pleadings of the action in which it is made, the language of the order itself, and the circumstances in which the order was granted.

[99] As such, the Agency is of the opinion that paragraph 180 of the Confidential Decision is to be read in the context of the Agency’s Order as a whole.

[100] redacted .

[101] redacted .

[102] To accept LDC’s argument would expand the Agency’s Order beyond the intended scope of the Decision. In light of the above, the Agency is of the opinion that there is no reasonable cause of action and based on the application as it stands, the Agency must dismiss this matter.

b) LDC’s request that the Agency enforce the Confidential Decision by ordering CN to refrain from applying the new allocation methodology for the supply of rail cars to four facilities, namely Glenavon, Aberdeen, Joffre and Lyalta

[103] LDC also requests, pursuant to subsection 33(4) that the Agency enforce the Confidential Decision by ordering CN to refrain from applying the new allocation methodology for the supply of rail cars to four facilities (Glenavon, Aberdeen, Joffre and Lyalta).

[104] redacted .

[105] redacted .

[106] redacted .

[107] The Agency is of the opinion that in order for the Agency to enforce the Confidential Decision, there must first be a determination of a breach by CN of the Order made in that Decision. In this case, the alleged breach relates to the hypothetical application of CN’s new car allocation policy by CN. In accordance with the Agency’s three-step approach for determining level of service applications, LDC would need to demonstrate that: (1) it made a reasonable service request and (2) the railway company did not fulfill this request. Only then would CN be required to demonstrate whether there are reasons that could justify the service failure.

[108] Therefore the Agency would expect LDC’s application to present a factual basis, in accordance with the Agency’s approach for determining a level of service application, in support of its allegation that the new allocation policy results in a breach of CN’s level of service obligations.

[109] However, the Agency notes that in LDC’s application of November 3, 2014, no material facts were put forward to substantiate that CN is in real and actual non-compliance with the Confidential Decision as it relates to the car allocation methodology it now uses.

[110] The Agency notes that, in its November 19, 2014 reply to the Interim Order and answer to the request to dismiss, LDC alleged some service issues for redacted. However, LDC recognized that CN had not applied its new allocation methodology to that facility at that time. Therefore there is no relationship between the evidence on service levels and CN’s new allocation policy.

[111] redacted .

[112] In light of the above, and even with an assumption that LDC’s allegations are true, the Agency is of the opinion they disclose no reasonable cause of action. Therefore, based on the application as brought before the Agency, the Agency must dismiss this matter.

CONCLUSION

[113] The Agency finds that LDC’s application discloses no reasonable cause of action. The Agency therefore grants CN’s request and dismisses LDC’s application in its entirety. In light of the foregoing, the Agency finds it is not necessary to address the other grounds raised in CN’s request to dismiss.

COSTS

[114] CN seeks costs in accordance with section 25.1 of the CTA. According to CN, LDC’s application was unnecessary and constitutes an obvious abuse of process, and therefore was a waste of both CN’s and the Agency’s resources.

[115] The Agency’s practice for such requests is to award costs only in special or exceptional circumstances. The Agency finds that this case does not meet those special or exceptional circumstances and therefore dismisses CN’s request with respect to costs.

This is a public redacted version of a confidential decision that issued on March 12, 2015 which cannot be made publicly available.

Member(s)

Sam Barone
William G. McMurray
Date modified: