T-2983-74
Union Gas Limited, Minister of Energy for
Ontario and the Consumers' Gas Company
(Applicants)
v.
TransCanada PipeLines Limited, the National
Energy Board, Greater Winnipeg Gas Company,
Gaz Metropolitain, Inc., Alberta Gas Trunk Line
Company Limited, Pan-Alberta Gas Limited,
Saskatchewan Power Corporation, Rio Algom
Mines Limited, The Attorney General of Manito-
ba and The Attorney General of Quebec
(Respondents)
Trial Division, Mahoney J.—Ottawa, August 19,
20 and 21, 1974.
Extraordinary remedies—Motion to quash interim rulings
of Board—Certiorari not appropriate— National Energy
Board Act, R.S.C. 1970, c. N-6, ss. 20, 44(a)-(d)—Federal
Court Act, ss. 18, 28.
The applicants sought orders by way of certiorari to quash
two rulings of the National Energy Board during the hearing
of an application by the respondent TransCanada PipeLines
Limited for a certificate under section 44 of the National
Energy Board Act.
Held, dismissing the application, the Board's first ruling,
determining the order in which it would receive evidence
and permit cross-examination of witnesses, was obviously
within its powers. As for the second ruling, limiting the
scope of the Board's inquiry under section 44 of the Nation
al Energy Board Act, certiorari was not the appropriate
remedy to deal with an interim determination such as the
one in issue, however appropriate it might be to deal with
the decision the Board is required to make. The Board had
authority to determine in good faith to narrow the scope of
its inquiry; it acted in good faith in making that determina
tion; and certiorari was inappropriate in respect of such
determination.
In re Anti-Dumping Act and in Danmor Shoe Company
Ltd. [1974] 1 F.C. 22, applied. Canadian National
Railways v. Canada Steamship Lines, Limited [1945]
A.C. 204 and Toronto Newspaper Guild v. Globe Print
ing Company [1953] 2 S.C.R. 18, considered.
APPLICATION.
COUNSEL:
David W. Scott and George Hunter for
applicant Union Gas Limited.
Robin Scott, Q.C., and D. Rogers for appli
cant Minister of Energy for Ontario.
R. A. Smith, Q.C., and Jerry H. Farrell for
applicant Consumers' Gas Company.
L. H. Pilon for respondent TransCanada
PipeLines Limited.
F. H. Lamar, Q.C., and I. Blue for respond
ent National Energy Board.
Charles Gonthier, Q.C., and Michael Cud-
dihy for respondent Gaz Metropolitain, Inc.
A. Lorne Campbell, Q.C., and M. E. Roth-
stein for respondent Greater Winnipeg Gas
Company.
G. J. Gorman, Q.C., for respondents Alber-
ta Gas Trunk Line Company Limited and
Pan-Alberta Gas Ltd.
John Sopinka and R. W. Cosman for
respondent Rio Algom Mines Limited.
T. J. Waller for respondent Saskatchewan
Power Commission.
J. F. Sherwood for respondent Attorney
General of Manitoba.
Robert Dulude, Q.C., and Pierre R. Fortin
for respondent Attorney General of
Quebec.
SOLICITORS.
Scott & Aylen, Ottawa, for applicant Union
Gas Limited.
Legal Dept., Minister of Energy for Ontario
and Thompson, Rogers, Toronto, for appli
cant Minister of Energy for Ontario.
Smith, Lyons and Associates, Toronto, for
applicant The Consumers' Gas Company.
Legal Dept., TransCanada PipeLines Lim
ited, Toronto, for respondent TransCanada
Pipelines Limited.
Legal Dept., National Energy Board, for
respondent National Energy Board.
Laing, Weldon and Associates, Montreal,
for respondent Gaz Metropolitain, Inc.
Aikins, MacAulay and Thorvaldson, Win-
nipeg, for respondent Greater Winnipeg
Gas Company.
Honeywell, Wotherspoon, Ottawa, for
respondents Alberta Gas Trunk Line Com
pany Limited and Pan-Alberta Gas Ltd.
Fasken and Calvin, Toronto, for respondent
Rio Algom Mines Limited.
Griffin, Beke and Associates, Regina, for
respondent Saskatchewan Power Commis
sion.
Legal Dept., Attorney General of Manitoba,
Winnipeg, for respondent Attorney General
of Manitoba.
Geoffrion & Prud'homme, Montreal, and
Dept. of Natural Resources for Quebec for
respondent Attorney General of Quebec.
The following were served with the originat
ing notice of motion, but were not named as
parties and were not represented at the hearing:
Consolidated Natural Gas Limited and
Consolidated Pipelines Company.
Northern and Central Gas Corporation,
Limited.
Industrial Gas Users Association.
The following are the reasons for judgment
delivered in English by
MAHONEY J.: This application for orders by
way of certiorari arises as a result of two rulings
made by the National Energy Board (hereinafter
called "the Board") during the course of its
hearing of an application by TransCanada Pipe
Lines Limited (hereinafter called "TCPL") for a
certificate under section 44 of the National
Energy Board Act' in respect of proposed addi
tions to its system.
At the beginning of the hearing on August 7,
1974, the Board directed that the evidence-in-
chief of the applicant, TCPL, and the various
interveners before it and the cross-examination
of witness be conducted in a certain order. This
direction, which I shall, for convenience, refer
to as "the August 7 ruling" had the effect of
permitting proponents of the application to
cross-examine the witnesses of other propo
nents and, because of the order established,
permitting that cross-examination, to take place
after the witnesses had been cross-examined by
those in opposition. Objection was taken to the
ruling and argument was heard following which
the Board ruled:
Mr. Rogers, the Board sees no reason to chance [sic] the
sequence of appearances. The sequence was chosen. by the
Board for the convenience of the Board and bearing in mind
our impression at the time as to when the evidence would all
be in. As to the cross-examination of witnesses, we feel that
that should proceed. You, of course, are free to object, Mr.
McOuat is free to object, and all counsel are free to object
to any question which you think is self-serving or detrimen
t R.S.C. 1970, c. N-6.
44. The Board may, subject to the approval of the Gover
nor in Council, issue a certificate in respect of a pipeline or
an international power line if the Board is satisfied that the
line is and will be required by the present and future public
convenience and necessity, and, in considering an applica
tion for a certificate, the Board shall take into account all
such matters as to it appear to be relevant, and without
limiting the generality of the foregoing, the Board may have
regard to the following:
(a) the availability of oil or gas to the pipeline, or power
to the international power line, as the case may be;
(b) the existence of markets, actual or potential;
(c) the economic feasibility of the pipeline or internation
al power line;
(d) the financial responsibility and financial structure of
the applicant, the methods of financing the line and the
extent to which Canadians will have an opportunity of
participating in the financing, engineering and construc
tion of the line; and
(e) any public interest that in the Board's opinion may be
affected by the granting or the refusing of the application.
tal to your position. 2
The order sought in respect of the August 7
ruling, in the alternative to an order quashing
the proceedings to date, was an order quashing
that ruling and directing the Board to treat cer
tain interveners, namely Gaz Metropolitain Inc.,
Greater Winnipeg Gas Company and Pan-Alber-
ta Gas Limited as co-applicants with TCPL to
the extent necessary to deny to those interven-
ers the right to cross-examine TCPL's witnesses
and those of each other.
The parties, other than TCPL, were before
the Board as a result of determinations made
pursuant to section 45 of the Act.' The right of
the Board to determine the order in which it will
receive evidence and permit cross-examination
of witnesses, regardless of how anomalous the
result may be when the proceedings are viewed
as adversary proceedings, seems so clear to me
that I dismissed this aspect of the application
from the bench at the conclusion of the hearing.
I mention it briefly now only with a view to
recording my views.
The other ruling, made August 9 (hereinafter
referred to as "the August 9 ruling") was
attacked with arguments of considerably more
substance. Its effect is said by the applicants
herein to have deprived them of the right to
cross-examine a witness and to introduce evi-
dence-in-chief on a material subject with which
TCPL had been permitted to deal in its evi-
dence-in-chief. A general background is essen
tial to an appreciation of their position.
The application before the Board embraced
the proposed construction, before the coming
winter, of 15.5 miles of loopline in Saskatche-
wan and Manitoba and 43 miles of loopline in
2 Transcript, p. 88. Mr. Rogers was counsel for the Minis
ter of Energy for Ontario; Mr. McOuat was counsel for
Union Gas Limited.
3 45. Upon an application for a certificate the Board shall
consider the objections of any interested person, and the
decision of the Board as to whether a person is or is not an
interested person for the purpose of this section is
conclusive.
Ontario between Toronto and Montreal to pro
vide transportation for gas purchased by Great
er Winnipeg Gas Company and Gaz Metropolit-
ain, Inc., in Alberta for delivery in their
respective market areas, namely Winnipeg and
Montreal and their environs. The application
also embraced an additional 7.8 miles of loop-
line in Ontario, apparently having nothing in
particular to do with Gaz Metropolitain's
requirements, being essentially to secure alter
nate facilities in case of main line interruption.
The application was unique in so far as TCPL
was concerned inasmuch as it was the first time
that it proposed to construct facilities to meet
the transportation requirements of others.
Heretofore, TCPL has purchased gas in Alberta,
taken delivery at the Alberta border, transport
ed it to the market areas of its various custom
ers and sold it to them there. For the first time,
it proposed to act only as a carrier. As one
result, TCPL, in its application to the Board, did
not itself propound present and future public
convenience and necessity but stated:
13. Evidence that the additional pipeline facilities are and
will be required by the present and future public conveni
ence and necessity will be submitted by Gaz Metropolitain,
inc. and Greater Winnipeg Gas Company, respectively.
The evidence as to future gas supply included
in TCPL's application would appear to have
been less than fully supportive of the proposi
tion that the new facilities would meet the test
of future public necessity if the "future" began
anything more than a year or two hence. The
witness put forward by TCPL to testify on this
aspect of their material was subjected to vigor
ous cross-examination by counsel for Pan-
Alberta Gas, Consumers' Gas, Union Gas, the
Minister of Energy for Ontario, Gaz Metropolit-
ain and, finally, the Board. Pan-Alberta is the
vendor to Gaz Metropolitain of the gas pro
posed to be transported and it is, I think, fair to
say that their cross-examination was intended to
attack the validity of TCPL's supply projection
in that they contend it is understated. As TCPL
customers without other suppliers, Union and
Consumers', both Ontario distributors, support-
ed by the Ontario Minister, cross-examined
from a different point of view. The questioning
and the evidence-in-chief dealt not only with
TCPL's committed and probable supply but
with the entire supply available from Alberta for
British Columbia as well as points east.
On August 9 a panel of witnesses was called
by Gaz Metropolitain. Included on the panel
was the manager of gas supply for Pan-Alberta
Gas who had, coincidentally, previously
occupied a senior position with Westcoast
Transmission Company Limited, TCPL's coun
terpart in the movement of gas west of Alberta.
His evidence-in-chief was limited to the gas
reserves committed to Gaz Metropolitain under
the contract between the two companies. On
cross-examination counsel for Union Gas
entered upon a line of questioning relative to
new facilities required in Alberta to service the
contract and, after objection, the Board ruled:
THE CHAIRMAN: Mr. McOuat, the Board is of the view that
what it is charged with finding here is the public interest and
convenience of the facilities applied for, which are facilities
to be constructed by TransCanada PipeLines, and we find
that the line of questioning upon which you have begun to
embark was not of sufficient relevance to warrant us an
excursion in there, and did not contribute materially to the
finding the Board must make in respect to public conveni
ence on TransCanada's facilities.
MR. McOUAT: Thank you. 4
Cross-examination continued and, at page 407
of the transcript, referring to a matter raised by
counsel for Pan-Alberta in argument on a
motion to adjourn the proceeding presented
August 7 on behalf of the Minister of Energy
for Ontario, asked whether the witness was
aware of "any specific shortfall in British
Columbia reserve ability to meet British
Columbia markets". Counsel for Pan-Alberta
objected immediately. Argument was heard
during which it became clear that the scope of
4 Transcript p. 402.
the hearing and not just the relevance or materi-
ality of the particular question was in the fore
front of the minds of those participating in the
argument. For the proponents, counsel for Gaz
Metropolitain said, in part:
... this application is an application for a certain very
limited facility to transport a quantity of gas ... that is de
minimis in relation to the overall supply, and the only real
issue before this Board is whether there is a public interest
and need to transport this available contracted supply to
Montreal at this time. That is the issue. To try and transform
this hearing into a hearing on overall Canadian supply and
requirements, or overall need of transmission facilities in
Canada I think is trying to attribute to it some importance
that it just does not have . . . . S
For the opponents, counsel for Union Gas
replied, in part:
... what Gaz Metropolitain is asking for here, ... is to
approve expansion to enable them to buy a gas supply which
may well be required to maintain deliverability on their
existing contracts as well as existing contracts of
others .... That issue then goes to the capability of Alberta
supply to meet all Canadian markets, including Trans-
Canada's existing contracts and including any proposed
extension or expansion .... If you are going to go to the
capability of that Alberta supply, the issue of either [sic]
further Canadian demands now being imposed on that
supply is entirely relevant. 6
Counsel for the Board, after references to
particular sections of the Act, advised:
... the pipeline we are talking about is the particular facili
ties being applied for by TransCanada and the only thing
that concerns this Board is the supply available to that
pipeline, the markets to be served by that pipeline and the
economic justification for that pipeline. So I would submit
that getting into the question of gas supply is not relevant.
Nm. EDGE: On a point of clarification Mr. Blue, what does
your statement, or what relation does that have to the
evidence put in by Mr. Larson?
Nilo. BLUE: I was not asked my opinion in reference to Mr.
Larson's evidence, Mr. Chairman.
Nit. GIBBS: I think also, Mr. Chairman, that Mr. Larson's
evidence went in because nobody objected. When those
questions were asked we sat quietly because it seemed it
S Transcript p. 409.
6 Transcript p. 410.
had no relevance . . . . 7
THE CHAIRMAN: ... we will hear any remarks that others
wish to make on this point, as we are engaged in discussion
about the scope of the hearing, . . . . B
Following conclusion of argument on the
point, the hearing was adjourned for noon and,
when it resumed the Chairman read the follow
ing statement:
Gentlemen, the Board is prepared to rule on Mr. Gibbs'
objection on the relevancy of the question of Mr. McOuat
put to the witness concerning the witness' knowledge of
Westcoast Transmission's gas supply.
In so doing the Board also wishes to deal with the
arguments as to the relevancy of the effects of the facilities
being applied for on the availability of Alberta natural gas to
TransCanada and TransCanada's existing customers in the
future.
Before the Board can issue a certificate, it must find that
the applied for facilities are and will be required by the
present and future public convenience and necessity. In so
doing the Board is expressly required to take into consider
ation all matters which to it appear to be relevant and in
addition it may take into account the matters listed in
paragraphs (a) to (d) of Section 44 of the Act.
The question of shortfalls of Westcoast Transmission's
supply and its implications on the availability of Alberta gas
to TransCanada's customers are not matters which the
Board considers relevant in this hearing.
Further, the Board does not, in the circumstances of this
application and in view of the amounts of gas involved,
attach great weight to the assertion that TransCanada's
supply situation may or may not be adequate to serve
customers to whom it sells gas.
This is so because in terms of TransCanada's deliverabili-
ty problem the total gas to be sold to Gaz Metro and Greater
Winnipeg are de minimus and, therefore, the public con-
vçnience and necessity does not warrant going into these
questions here. The Board feels that the time and trouble it
would take to explore these questions in all the ramifications
outweighs the probative value such evidence would have to
the determination it must make in this application, and the
objection to Mr. McOuat's question is therefore allowed.
Transcript pp. 411-2. Mr. Edge is a member of the
Board, Mr. Blue its counsel and Mr. Gibbs counsel for
Pan-Alberta Gas. Mr. Larson was the TCPL witness previ
ously referred to.
8 Transcript p. 414.
Of course, these witnesses may be examined on all
aspects of Pan Alberta's ability to meet its contractual
commitments to Gaz Metro. Thank you. 9
In addition to ruling the particular question
regarding Westcoast Transmission out of order,
the Board did, at this "point limit the scope of its
inquiry under section 44 of the Act in respect of
the application before it to the particular facili
ties proposed to be built, to the availability of
gas for those facilities, the existence of markets
for that gas and the economic viability of those
facilities. It declined to receive further evidence
or to permit cross-examination of witnesses on
the broader subjects of national gas supply or of
TCPL's own supply for its present customers.
That is what was understood by the parties
before it to be the effect of the ruling and I am
satisfied that is what was intended notwith
standing later protestations to the contrary.
In respect of the August 9th ruling, the appli
cants herein seek an order by way of certiorari
quashing the proceedings to date or, in the alter
native, quashing the ruling and directing the
Board to receive evidence relating to the effect
of the proposal on future gas supply to its
existing customers.
The issue in this case is, except for some of
the parties, in no way similar to that considered
by my brother Cattanach in The Attorney Gener
al of Manitoba v. The National Energy Board. 10
In that matter the issue on which the applicants
were successful was whether, in conducting the
hearing in the manner it did, the Board had
conducted the hearing it was required to con
duct by section 20 of the Act. That is not
alleged here.
It is desirable here to repeat the essential
portions of section 44 of the Act
44. The Board may ... issue a certificate in respect of a
pipeline ... if the Board is satisfied that the line is and will
be required by the present and future public convenience
and necessity, and, in considering an application for a cer-
9 Transcript pp. 423-4.
19 An as yet unreported decision dated August 9, 1974.
Court No. T-2669-74.
tificate, the Board shall take into account all such matters as
to it appear to be relevant, and without limiting the general
ity of the foregoing, the Board may have regard to ... .
There follow the five paragraphs (a) to (e) that
are set out in footnote 1 hereto. The emphasis is
mine.
In Canadian National Railways v. Canada
Steamship Lines, Limited" the Privy Council
considered a provision of The Transport Act,
1938 12 authorizing The Board of Transport
Commissioners for Canada to entertain applica
tions to approve and to continue or withdraw its
approval of agreed charges and to fix charges in
certain circumstances.
35. (13) On any application under this section, the Board
shall have regard to all considerations which appear to it to
be relevant and, in particular, to the effect which the making
off the agreed charge or the fixing of a charge is likely to
have, or has had, on,—
(a) the net revenue of the carrier; and
(b) the business of any shipper ... .
The emphasis, again, is mine. In dealing with the
section their Lordships held, at page 211:
It would be difficult to conceive a wider discretion than is
conferred on the board as to the considerations to which it is
to have regard ... Not only is it not precluded negatively
from having regard to any considerations, but it is enjoined
positively to have regard to every consideration which in its
opinion is relevant. So long as that discretion is exercised in
good faith the decision of the board as to what consider
ations are relevant would appear to be unchallengeable.
I cannot say, on the material before me, that
the Board's decision to limit the scope of its
inquiry during the course of the hearing was
made in bad faith. It is a matter of record that,
commencing September 3, the Board will hold
hearings on the overall gas supply of Canada. It
also appears that the gas and the facilities
encompassed in the present application involve
in the order of one per cent of TCPL's volume
and of the value of its system. That is not to say
that in changing the scope in mid-stream, the
Board is not, in a practical sense, exposing itself
" [1945] A.C. 204.
12 2 Geo. V1, c. 53.
to review by appropriate proceedings in a supe
rior court.
The fact that the ruling sought to be quashed
is not the decision which the Board is author
ized by section 44 to make but rather a ruling as
to what it would consider in arriving at its
decision under section 44 is crucial. No prece
dent for the granting of an order in the nature of
certiorari in respect of such a ruling was cited to
me. There are, of course, numerous instances,
such as the Globe Printing case", where a ruling
made during the course of a hearing has been
the basis for the quashing of the ultimate deci
sion by certiorari.
In view of considerations of time of which all
parties are aware, I do not intend to expand on
this matter on this occasion; however, I am of
the view that the opinion expressed by the Chief
Justice in the penultimate and antepenultimate
paragraphs of the decision of the Federal Court
of Appeal in the recent Danmor Shoe case 14 ,
with appropriate changes, is as relevant to an
application for a writ of certiorari under section
18 of the Federal Court Act 15 as to a section 28
application. Certiorari is not the appropriate
remedy to deal with an interim determination
such as the one in issue however appropriate it
might be to deal with the final decision the
Board is required to make under section 44.
Finding that the Board had the ' authority
under section 44, during the course of the hear
ing, to determine in good faith to narrow the
scope of its inquiry, that it did act in good faith
in making that determination and that an
application for certiorari is inappropriate in
respect of such a determination, the application
is dismissed. There will be no order as to costs.
13 Toronto Newspaper Guild v. Globe Printing Company
[1953] 2 S.C.R. 18.
14 In re the Anti-Dumping Act, etc. [1974] 1 F.C. 22 at
pp. 30 and 31.
15 R.S.C. 1970 (2nd Supp.), c. 10.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.