Letter Decision No. LET-R-291-1999
Application by the Canadian National Railway Company for a determination of the Net Salvage Value - Cudworth Subdivision and the application by seven municipal governments in the province of Saskatchewan for a preliminary ruling that the value of assets acquired under various Rehabilitation Agreements be excluded from net salvage value
The Canadian Transportation Agency (Agency) is in receipt of a request from the applicants in the above-noted proceeding dated November 5, 1999 requesting an adjournment of the proposed hearing of this matter as well as a request to exclude certain evidence filed by the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP).
The Agency has examined this request including the applicants' reply dated November 9, 1999 to the answers of CN and CP which were dated and filed November 8, 1999.
Request for an adjournment
The applicants state that pursuant to Agency Decision No. LET-R-278-1999 dated November 4, 1999, CN and CP have been given the opportunity to present their own expert witness statements, by way of rebuttal to that filed by the applicants. The deadline for the filing of any CN and CP statements is directed to be no later than November 12, 1999.
The applicants state that if CN and CP are to file their witness statements on that date, the applicants will be unfairly prejudiced as they will only have two full days prior to commencement of the hearing to assess this evidence and prepare for cross-examination. This compares to the one week which CN and CP will have further to the filing of the applicants' expert statement on November 8, 1999.
The applicants also argue that they will be prejudiced by being denied the opportunity to reply to the CN and CP evidence which they state is their right, both in law and tradition, as applicants in these proceedings.
Accordingly, if CN and CP intend to file expert evidence, the applicants request an adjournment of these proceedings.
CN states that Agency Decision No. LET-R-278-1999 does not create a process that is either unfair or prejudicial and asks that the Agency dismiss the applicants' motion. According to CN, had this Agency decision not issued, the applicants would have attempted to adduce expert evidence at the hearing without any advance notice which itself would have been unfair and prejudicial.
CN cannot advise whether it intends to adduce expert evidence by way of rebuttal as it has not seen the evidence that the applicants' expert intends to adduce.
CP also opposes the request for an adjournment and cannot advise whether it intends to file rebuttal expert evidence until it has seen and considered the applicants' expert statement. CP states that allowing adjournments to assess evidence and prepare for cross examination is not the Agency's traditional manner for dealing with expert evidence and that there is no provision in the National Transportation Agency General Rules that contemplates a right of reply on the filing of expert evidence.
The Agency has examined these arguments and finds that any expert evidence that may be filed by CN or CP will be by way of reply to that already filed by the applicants' expert. There is no singular requirement in law that a party such as the applicants in these proceedings must file rebuttal expert evidence in advance of an oral hearing. Once the upcoming hearing has commenced the applicants will have a right to present direct evidence as well as rebuttal evidence to address new matters raised by parties adverse in interest. This right extends to expert rebuttal evidence and it is a right which is not impaired in any way by Agency Decision No. LET-R-278-1999.
Further, the Agency notes that the applicants and CN and CP have been aware of this hearing and the questions at issue since August 3, 1999, the date of Agency Decision No. LET-R-209-1999. In light of the length of time to prepare their case and the opportunity to refine it at the hearing, the Agency cannot find that there will be any resulting unfairness to the applicants.
The Agency has already scheduled this hearing at a later than anticipated date in order to accommodate the needs of the applicants. An adjournment now would create undue hardship and financial cost to the numerous hearing participants who have made plans premised upon a November 15, 1999 commencement date.
For all of the above reasons, the applicants' request for a further adjournment is denied.
Exclusion of CN and CP evidence
The applicants also state that the witness statements filed by CN and CP in these proceedings ought to be excluded or amended given the direction in Agency Decision No. LET-R-278-1999.
According to the applicants, CN's statement ought to be entirely excluded as it falls outside of the Agency's Terms of Reference. The applicants state that the evidence describing the scope of CN's grain transportation undertaking, the consequences of inadequate returns, statutory freight rate-setting procedures as well as an overview of CN's privatization are irrelevant to these proceedings.
The applicants also state that portions of CP's witness statement ought to be excluded for the same reasons. In particular, the applicants refer to the evidence relating to the economics of line transfers and short line operations as well as the impact of line transfers on grain transportation costs.
The applicants also request that the Agency order CP to provide full particulars of the evidence it intends to adduce regarding the Uniform Classification of Accounts and to immediately produce any affirmation by the Minister of Transport regarding the federal government's interest in the rehabilitation assets.
In its answer, CN states that its evidence is relevant and falls within the Agency's Terms of Reference. CN also states that as a respondent it had to anticipate the need to rebut the evidence the applicants may choose to present.
CP answers by acknowledging that portions of the evidence identified in its witness statements are outside of the scope of the Terms of Reference, notably that relating to short lines and short line viability. CP states that its evidence will be carefully reviewed to ensure that it falls within the test of relevance as established by the Agency.
The Agency finds that the evidence in the CN and CP witness statements regarding short lines and short line viability, the consequences of present and future inadequate returns to either CN or CP and the privatization of CN are outside of the Terms of Reference and are excluded. The remaining evidence shall be permitted.
Regarding the applicants' request that CP be directed to adduce its evidence relating to the Uniform Classification of Accounts, the Agency finds that the Agency and all hearing participants would benefit from an early filing of this technical evidence. CP shall file this with the Agency and provide copies to the applicants and CN by November 12, 1999.
CP is also directed to produce by that date the affirmation by the Minister of Transport relating to the interest of the federal government in the rehabilitation assets and CP's ownership thereof, as referred to in CP's witness statement. Copies shall also be provided to the applicants and CN by November 12, 1999.