Letter Decision No. LET-W-128-1999

April 30, 1999

A Coasting Trade application filed by Petro-Canada for the "QUEEN OF THE NETHERLANDS"

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Petro-Canada applied to the Minister of National Revenue, pursuant to the Coasting Trade Act, S.C., 1992, c. 31, for a licence to use the "Queen of the Netherlands", a Dutch hopper dredge vessel, to excavate four glory holes for the installation of subsea oil production equipment for the Terra Nova oilfield project, in an area of the Grand Banks, about 350 kilometre east/south east of St. John's , Newfoundland, during the period commencing May 1, 1999 and ending on September 30, 1999.

On February 12, 1999, the matter was referred to the Canadian Transportation Agency (the Agency), and Notice of the Application was given to Canadian operators. They had until February 22, 1999 to respond to the Notice, Petro-Canada had until February 24, 1999 to file comments, and respondents had until February 26, 1999 to reply. As no offer was filed, the Agency issued Decision No. 68-W-1999 on February 25, 1999, in which it determined, pursuant to subsection 8(1) of the Coasting Trade Act, that there was no suitable Canadian ship available to provide the service or perform the activities described in the application.

In a letter to the Agency dated January 22, 1999, Cal Dive Offshore Ltd. of the Cayman Islands (Cal Dive), owner and operator of the Canadian vessel "Sea Sorceress", had requested the opportunity to make submissions with respect to any application that might be filed with respect to a Coasting Trade Licence for the "Queen of the Netherlands". In a letter dated January 26, 1999, Agency staff had assured Cal Dive that it would be notified of any application filed for the "Queen of the Netherlands". Unfortunately, Cal Dive was not notified of the application and was thus never offered the opportunity to file submissions with respect to the application.

In view of the fact that Cal Dive was not notified, the Agency advised Revenue Canada that it was contemplating a review of its Decision No. 68-W-1999 and requested that the issuance of a Coasting Trade Licence be deferred until the Agency disposed of the matter.

On March 30, 1999, in a letter to Cal Dive and Petro-Canada, the Agency requested their respective position on the Agency's power to review its Decision No. 68-W-1999 under section 32 of the Canada Transportation Act, S.C., 1996, c. 10. Cal Dive was also invited to offer the services of a Canadian ship, so that it could be considered in the event that the Agency decided that it would review or reopen Decision No. 68-W-1999. Cal Dive was provided until April 1, 1999, to file its arguments and offer; Petro-Canada was provided until April 7, 1999, to respond to Cal Dive's arguments and to comment on any offer filed; and Cal Dive was provided until April 9, 1999 to reply.

On March 31, 1999, Cal Dive requested an extension of time to file its arguments and an offer. In Decision No. LET-W102-1999 dated April 1, 1999, the Agency granted Cal Dive's request. Cal Dive was provided until April 6, 1999 to file its arguments and an offer. Petro-Canada was provided until April 9, 1999, to respond to Cal Dive's arguments and to comment on any offer filed. Cal Dive then had the opportunity to reply to Petro-Canada, by no later than April 15, 1999.

Cal Dive filed an argument and an offer of the "Sea Sorceress". Petro-Canada filed its comments, wherein it states that the "Sea Sorceress" is not a suitable ship.

In light of the technical nature of the work to be performed, the Agency retained the services of an expert, Pachelle Inc., on April 13, 1999, to advise on the suitability of the "Sea Sorceress" to perform the work.

On April 14, 1999, the Agency requested further information from Cal Dive and Petro-Canada respectively concerning both vessels. The requested information was filed.

On April 19, 1999, Pachelle Inc. filed its report with the Agency. A copy was provided to Cal Dive and Petro-Canada, soliciting their comments, by no later than April 21, 1999.

On April 21, 1999, Petro-Canada filed its comments on the report. On the same date, Cal Dive also filed its comments and added that the time constraints and limitations of the Agency's process did not allow it to get a fair and full hearing on the complex issues raised. Accordingly, rather than accept a decision in this overall context, Cal Dive decided to "protest the process" and withdraw the offer of its vessel "Sea Sorceress".

The Agency notes that Cal Dive was granted the extension of time requested; that the length of time provided for Cal Dive to reply to Petro-Canada's comments was twice as long as that provided for Petro-Canada to comment; and that normally, the same length of time is provided to both parties.

Had Cal Dive not withdrawn its offer, the Agency would have had to consider whether it had the power to reopen the case to cure its own defect.

As a general rule, it is well known that once an administrative tribunal has reached a final ruling in respect of the matter that is before it in accordance with its enabling statute, it cannot revisit the decision because it has changed its mind or made an error within its jurisdiction. This functus officio general rule is meant inter alia to promote the stability of the law and the finality of the adjudicative process. In the past years, however, the case law and the authors suggest that where an administrative tribunal has failed to observe the rules of natural justice, it may set aside its ruling and re-examine the case. In view of Cal Dive's withdrawal, this issue is now moot, and, accordingly, no ruling in this respect is required.

Pursuant to subsection 37(3) of the National Transportation Agency General Rules, SOR/88-23, the Agency takes note of Cal Dive's withdrawal of its offer; consequently Decision No. 68-W-1999 of February 25, 1999 continues to apply, and Revenue Canada has been advised accordingly.

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