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A-679-81
CSP Foods Ltd. and Canbra Foods Ltd. (Appellants)
v.
Canadian Transport Commission, Canadian Pacif ic Limited and Canadian National Railway Com pany (Respondents)
Court of Appeal, Urie, Le Dain JJ. and Lalande D.J.—Winnipeg, March 11; Ottawa, April 28, 1982.
Railways — Appeal pursuant to s. 64(2) of National Trans portation Act against Order No. R-32581 of Canadian Trans port Commission — Order purporting to give effect to Order in Council 1976-894 whereby rates for movement of freight are to be established annually at minimum compensatory levels Order No. R-32581 made less than 12 months after Order No. R-31868 to same effect — Whether Order No. 32581 contrary to Order in Council — Order No. R-32581 invalid — Order in Council legislative in nature — Word "annually" not to be ignored — "Annually" meaning "once a year" — "Year" referring to calendar year — Rates to be established once a year, i.e. once during calendar year — Appeal allowed National Transportation Act, R.S.C. 1970, c. N-17, ss. 3, 64 — Railway Act, R.S.C. 1970, c. R-2, s. 276 — Federal Court Rule 1312.
This is an appeal brought pursuant to subsection 64(2) of the National Transportation Act from Order No. R-32581 of the Railway Transport Committee of the Canadian Transport Commission. The Order purported to give effect to Order in Council 1976-894 which provided that rates for the movement of rapeseed meal and oil be established annually at minimum compensatory levels. Order No. R-32581 was issued less than a year after Order No. R-31868 which prescribed rates for the movement of the freight referred to. The question is whether the issuance of two rate Orders within the same calendar year contravenes Order in Council 1976-894. Appellants argue that the rates must be established once a year and that the year to which the word "annually" applies is the calendar year. Respondents contend that the word "annually" must be read in conjunction with section 276 of the Railway Act and that the rates must be set whenever they become non-compensatory. The Order in Council should thus read as if the words "provid- ed the rates in any annual period continue to be compensatory" were included in it. Respondents also submit that the Commis sion, in establishing, by its Order No. R-31868, rates based on the railways' 1980 variable costs and by its Order No. R-32581, rates based on the railways' 1981 variable cost pro jections, did not contravene the Order in Council.
Held, the appeal is allowed and Order No. R-32581 is invalid. The Order in Council is legislative in nature and is
subject to construction by the courts in the same manner as any other legislative enactment. The presence of the word "annual- ly" is not to be ignored. The Commission is not deprived of its ability to ensure that the freight rates are compensatory. Its inclusion merely prescribes the frequency of the calculation of the minimum compensatory rates. Considering the various dictionary definitions of the word "annually", it can be said that the rates are to be established once a year, in accordance with the Order in Council. And that year, in the absence of provisions in the said Order in Council or in the Railway Act showing that rates should be established during a year com mencing on a date other than January 1, is the calendar year. Respondents' second submission is without merit. Relating rates established by a Commission Order in a given year to variable costs established for another year cannot validate an Order which is otherwise invalid because it is the second such Order made by the Commission in a calendar year.
APPEAL. COUNSEL:
M. E. Rothstein, Q.C. and M. Monnin for appellants.
K. M. Bloodworth for respondent, Canadian Transport Commission.
G. Nerbas and P. Antymniuk for respondent, Canadian National Railway Company.
T. J. Moloney and A. Ludkiewicz for respondent, Canadian Pacific Limited.
SOLICITORS:
Aikins, MacAulay & Thorvaldson, Win- nipeg, for appellants.
K. M. Bloodworth, Hull, for respondent, Canadian Transport Commission.
G. Nerbas, Winnipeg, for respondent, Canadi- an National Railway Company.
T. J. Moloney, Montreal, for respondent, Canadian Pacific Limited.
The following are the reasons for judgment rendered in English by
URIE J.: The appellants, with leave of the Court granted pursuant to subsection 64(2) of the Na tional Transportation Act, R.S.C. 1970, c. N-17, appeal Order No. R-32581 of the Railway Trans port Committee of the Canadian Transport Com mission (hereinafter called "the Commission").
Subsection 64(2)' provides for an appeal on a question of law or a question of jurisdiction.
Order No. R-32581, dated August 27, 1981 was issued purportedly in compliance with Order in Council P.C. 1976-894 dated April 13, 1976. That Order in Council was issued as a result of a petition filed by the appellants herein, or their corporate predecessors, to the Governor in Council pursuant to subsection 64(1) of the National Transportation Act. 2 The petition sought to vary tariffs of tolls filed by the railway companies as directed by Commission Order No. R-16824 dated July 27, 1973 and as approved by Commission Order No. R-17016 dated August 2, 1973.
Order in Council P.C. 1976-894, as recited in Order No. R-32581, reads as follows:
WHEREAS Order-in-Council P.C. 1976-894, dated April 13, 1976, provides for the establishment of rates on rapeseed meal and rapeseed oil, as follows:
"that the following rates or portions of rates for domestic and export movement of rapeseed meal and rapeseed oil from the four rapeseed crushing plants at Altona, Nipawin, Saskatoon and Lethbridge be established annually at minimum compen satory levels:
(i) rates for rapeseed meal and rapeseed oil moving west;
(ii) rates for rapeseed oil moving east; and
64....
(2) An appeal lies from the Commission to the Federal Court of Appeal upon a question of law, or a question of jurisdiction, upon leave therefor being obtained from that Court upon application made within one month after the making of the order, decision, rule or regulation sought to be appealed from or within such further time as a judge of that Court under special circumstances allows, and upon notice to the parties and the Commission, and upon hearing such of them as appear and desire to be heard; and the costs of such application are in the discretion of that Court.
z 64. (1) The Governor in Council may at any time, in his discretion, either upon petition of any party, person or company interested, or of his own motion, and without any petition or application, vary or rescind any order, decision, rule or regula tion of the Commission, whether such order or decision is made inter partes or otherwise, and whether such regulation is gener al or limited in its scope and application; and any order that the Governor in Council may make with respect thereto is binding upon the Commission and upon all parties.
(iii) the portions of rates pertaining to the movement of rapeseed meal east of Thunder Bay or Armstrong, Ontario."
The Railway Transport Committee ("the Com mittee") by Order No. R-23976 dated November 26, 1976 and by subsequent Orders up to and including Order No. R-32581 here under appeal, purported to give effect to the directive contained in the foregoing Order in Council. It should be pointed out that earlier in 1981, namely on Febru- ary 11, the Committee had issued Order No. R-31868 prescribing rates for the movement of rapeseed meal and rapeseed oil.
Order No. R-23976 aforesaid was the subject of an appeal to this Court by the same appellants as those bringing this appeal, wherein it was held, inter alia, that the Order in Council left to the Commission the discretion to determine the "mini- mum compensatory levels" which the public inter est requires. 3
The issues in this appeal differ from those in the earlier one and have been defined by the appel lants in their memorandum of points of argument as follows:
(a) The Railway Transport Committee acted without juris diction or exceeded its jurisdiction in issuing Order R-32581 on August 27, 1981 establishing minimum compensatory rates more than annually contrary to Order in Council P.C. 1976-894 which provides that minimum compensatory rates are to be established annually.
(b) The Railway Transport Committee erred in law in interpreting the term "annually" in Order in Council P.C. 1976-894.
(c) The Railway Transport Committee issued Order R-32581 without allowing the Appellants an opportunity to be heard and thereby denied them natural justice and thus exceeded its jurisdiction.
(d) The Railway Transport Committee failed in its duty to act fairly by issuing Order R-32581 without allowing the Appellants an opportunity to be heard and thus exceeded its jurisdiction.
The respondents do not contest this definition of the issues.
It is convenient to deal with issues (a) and (b) together since both turn on whether or not issuing two rate Orders within a period of slightly over six months of one another, in the same calendar year, contravenes the directive in Order in Council P.C.
3 [1979] 1 F.C. 3.
1976-894 that rates "be established annually at minimum compensatory levels". (Emphasis added.)
The appellants contend that in the context of Order in Council P.C. 1976-894 the use of the word "annually" must mean that the rates to be established at minimum compensatory levels are tc be established once a year. Moreover, they say, when interpreting the word "annually", it is neces sary to define the commencement and termination of the year to which the word applies. In their view, in the absence of words showing intention to the contrary, the year to which the word "annual- ly" applies should be the calendar year.
The respondents say, on the other hand, that the word "annually", as it appears in the Order in Council, must be read in its complete context and in conjunction with section 276 of the Railway Act, R.S.C. 1970, c. R-2 4 . That section deems any freight rate to be compensatory when it exceeds the variable cost of the movement of the traffic concerned as determined by the Commission. Therefore, in the respondents' submission, the statutory imperative is that the rates be compensa tory and that imperative cannot be affected by the inclusion of the word "annually" in the Order in Council. In other words, counsel said, the Order in Council must be subservient to the policy state ments in section 3 of the National Transportation Act as implemented in the Railway Act. In coun sel's view the Order in Council should be read as though the words "provided the rates in any
° 276. (1) Except as otherwise provided by this Act all freight rates shall be compensatory; and the Commission may require the company issuing a freight tariff to furnish to the Commis sion at the time of filing the tariff or at any time, any information required by the Commission to establish that the rates contained in the tariff are compensatory.
(2) A freight rate shall be deemed to be compensatory when it exceeds the variable cost of the movement of the traffic concerned as determined by the Commission.
(3) In determining for the purposes of this section and section 277 the variable cost of any movement of traffic, the Commission shall
(a) have regard to all items and factors prescribed by regulations of the Commission as being relevant in the determination of variable costs; and
(b) compute the costs of capital in all cases by using the costs of capital approved by the Commission as proper for the Canadian Pacific Railway Company.
annual period continue to be compensatory" were included in the Order in Council. This is the only way to reconcile the two instruments, it was said.
I am unable to agree with the respondents' submissions based upon this interpretation of the effect of the Order in Council since effectively it involves deletion of the word "annually" from that Order or, as was suggested, the addition thereto of words of the nature above referred to. In my view, Order in Council P.C. 1976-894 is legislative in nature and is subject to construction by the courts in the same manner as any other legislative enact ment. It is to be read in conjunction with the Railway Act, construed in a manner consistent therewith and giving effect to all of the words in each. The presence of the word "annually" in the Order in Council cannot be ignored and its pres ence does not, in my opinion, deprive the Commis sion of the ability to ensure that the freight rates in issue are compensatory. All that its inclusion does is to prescribe the frequency of the calcula tion or establishment of the minimum compensato ry rates. The question thus becomes one of deter mining when the rates are to be established which, in turn, necessitates the ascertainment of the meaning of the word "annually" in the context in which it is used.
The Oxford English Dictionary, Sixth Edition, 1980, Vol. I, defines "annually" as:
In annual order or succession, yearly, every year, year by year.
Black's Law Dictionary, Fifth Edition, defines the word as:
In annual order or succession; yearly, every year, year by year. At the end of each and every year during a period of time. Imposed once a year, computed by the year. Yearly or once a year but does not in itself signify what time in year.
The word "yearly" is defined in The Shorter Oxford English Dictionary, Third Edition, as:
Every year, once a year, annually.
It can thus be safely said that in so far as the dictionary meaning of "annually" is concerned the minimum compensatory rates must be established
in accordance with the directive provided by the Order in Council once a year so that the respond ents' argument that they must be set whenever the rates become non-compensatory must fail. How ever, nothing in the context of either the Order in Council or of section 276 of the Railway Act prescribes when during the year they must be established or, perhaps more importantly, to what year reference is made. There may be more pos sibilities but four come immediately to mind:
(1) the calendar year;
(2) the year commencing on each anniversary date following the date of the Order in Council, namely, April 13, 1976;
(3) the year commencing on each anniversary date following the date of the first order establishing the rates in accordance with the directive contained in the Order in Council, that is Order No. R-23976 issued November 26, 1976; and
(4) the year commencing on the anniversary date of the next preceding order so establishing the rates, that is, Order No. R-31868, issued on February 11, 1981.
An examination of the record discloses that except in 1976 when the first Order fixing the rates, No. R-23976, was issued on November 26, 1976 by the Commission, the Commission did not issue orders establishing rates in each calendar year or before the anniversary dates of the Order in Council, or of the first Order in the year 1976. On April 3, 1978 it issued the second Order, No. R-26600. The third Order was No. R-31155 and was not issued until July 9, 1980 well over two years following the issuance of the preceding Order No. R-26600. Then followed Orders number R-31868 issued February 11, 1981 and R-32581, the Order in issue in this appeal, issued on August 27, 1981. Plainly the practice of the Commission lends no assistance in determining what "year" was envisaged in the use of the word "annually". By the same token there is nothing in the context of either the Order in Council or of the Railway Act that is in any way persuasive that "annually" refers to any year other than the calen dar year.
On the other hand there is in the record corre spondence written on behalf of the respondent railways from which an inference may be clearly drawn that at least latterly, they envisaged the fixation of rates by the Committee once during each calendar year. In the absence of anything in the Order in Council or the statute which would lead to a conclusion that rates should be estab-
lished during a year commencing on a date other than January 1 in each year, I am of the opinion that it is the calendar year which should be the year during which rates should be established pur suant to the Order in Council. The time at which they should be established in each calendar year is a matter for the Commission which must bear in mind that it should not permit the rates to vary from minimum compensatory levels for periods longer than reasonably necessary to establish changed rates in each year.
In reaching this conclusion I have not over looked the respondents' contention that the record discloses that the Commission by Order No. R-31868 established rates based on the railways' 1980 variable costs while by Order No. R-32581 it established rates based on their 1981 variable cost projections. That, in counsel's submission, demon strated that Order No. R-32581 was not made in contravention of the Order in Council. The short answer to that submission is, it seems to me, that the Order in Council does not direct that variable costs be established annually but, rather, that rates be so established at minimum compensatory levels. Accordingly, relating rates established by a Com mission Order in a given year to variable costs established for another year cannot validate an Order which otherwise would be invalid because it was the second such Order made by the Commis sion in a calendar year. In my opinion, those circumstances do not affect the conclusion to which I have come.
Having reached this conclusion it becomes un necessary for the Court to consider the appeal based on grounds (c) and (d), supra.
The appeal should be, therefore, allowed. Accordingly, it should be certified to the Canadian Transport Commission that in the opinion of the Court, Order No. R-32581 is invalid and ought to be set aside. Having regard to Rule 1312, there ought not to be any costs to any party.
LE DAIN J.: I agree. LALANDE D.J.: I agree.
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