A-470-81
In the matter of an application by the Province of
Nova Scotia for an interim ex parte order pursu
ant to section 59 of the National Transportation
Act, R.S.C. 1970, c. N-17, forbidding any coordi
nation of container shipping services until there
has been compliance with section 27 of the Act
and
In the matter of an appeal to the Federal Court of
Appeal pursuant to section 64, subsection (2), of
the National Transportation Act, R.S.C. 1970, c.
N-17
Court of Appeal, Thurlow C.J., Ryan J. and Kerr
D.J.—Ottawa, September 14 and 15, 1981.
Transportation — Appeal from a decision of the Water
Transport Committee dismissing an application for an interim
order forbidding further action on the coordination of contain-
erized freight shipping services — Section 27 provides that the
Commission may disallow the acquisition of a transportation
business — Section 59 empowers the Commission to grant
interim relief by forbidding anything to be done that the
Commission would be empowered to forbid on application,
notice and hearing — Section 23 provides that the Commission
may make such order as it considers proper upon finding that
the acts of the carrier are prejudicial to the public interest —
Whether the Committee erred in holding that it lacked the
jurisdiction to issue the order requested — Appeal dismissed
— National Transportation Act, R.S.C. 1970, c. N-17, as
amended, ss. 21, 23, 27, 59, 64(2) — Interpretation Act, R.S.C.
1970, c. I-23, s. 11.
Appeal from a decision of the Water Transport Committee
dismissing an ex parte application for an interim order forbid
ding anything to be done to further the St. Lawrence River
coordination of containerized freight shipping services. The
Committee held that it did not have the legal power to issue an
interim prohibition order. Section 27 of the National Trans
portation Act provides that the Commission may disallow the
acquisition of a transportation business if such acquisition will
unduly restrict competition or be prejudicial to the public
interest. Section 59 empowers the Commission to grant interim
relief by forbidding anything to be done that the Commission
would be empowered to forbid on application, notice and
hearing. Section 23 provides that the Commission may make
such order that it considers proper upon finding that the acts or
omissions of a carrier are prejudicial to the public interest. The
appellant submits that the word "forbid" in section 59 falls
within the meaning of "disallow" in section 27. It also submits
that the Committee had power under section 23 to make an
order of the kind requested, and thus could make such an order
on an interim basis under section 59. The respondents submit
that section 59 applies only to proceedings before the Commis-
sion in which procedure by application, notice and hearing is
prescribed by the Act. The issue is whether the Committee
erred in holding that it did not have jurisdiction to issue the
order requested.
Held, the appeal is dismissed. Section 59 does not authorize
an interim order in matters arising under section 27. The power
to disallow conferred by section 27 does not include a power to
"forbid" or enjoin. The consequence of disallowance is pre
scribed by subsection 27(4). It is that the acquisition is void.
The power to grant an injunction with respect to it is not
included and if such a power is not included in the power that
may be exercised after the investigation, it is not exercisable on
an interim basis under section 59. What the Committee appears
to have said is not that it had no power under section 59, but
that it had no power to grant the order forbidding the carriers
to do anything to further the proposed service, rather than an
order relating to the acquisition arrangements between the
carriers. There is no reason to doubt the correctness of the
Commission's order. There was nothing in the application
before the Commission to invoke section 23 or to make out a
case for relief under it. In order to exercise on an interim basis
under section 59 powers conferred by section 23, there must be
an application invoking section 23 and establishing, at least
prima facie, a situation to which section 23 might apply. This is
implicit in the wording at the end of section 59 which provides
that no interim order shall be made for any longer time than
the Commission may deem necessary "to enable the matter to
be heard and determined".
APPEAL.
COUNSEL:
G. Evans for the Attorney General of Nova
Scotia.
D. Murphy for the Canadian Transport
Commission.
P. R. O'Brien for Manchester Liners Ltd.
M. P. J. Rusko, Q.C. for Dart Containerline
Canada M.V.
D. W. Flicker for Canadian Pacific Limited.
SOLICITORS:
Department of the Attorney General of Nova
Scotia for the Attorney General of Nova
Scotia.
G. W. Nadeau, Q.C. % Canadian Transport
Commission, Legal Services, Hull, for the
Canadian Transport Commission.
Stikeman, Elliott, Tamaki, Mercier & Robb,
Montreal, for Manchester Liners Ltd.
M. P. J. Rusko, Q.C., Montreal, for Dart
Containerline Canada M.V.
Canadian Pacific Ltd., Legal Services, Mon-
treal, for Canadian Pacific Limited.
The following are the reasons for judgment
delivered orally in English by
THURLOW C.J.: This is an appeal under subsec
tion 64(2) of the National Transportation Act,
R.S.C. 1970, c. N-17, as amended, from a decision
of the Water Transport Committee of the Canadi-
an Transport Commission pronounced on July 31,
1981, which dismissed an ex parte application
brought by the Attorney General of Nova Scotia
requesting the Commission to issue
(1) an interim ex parte order requiring the parties to the
proposed St. Lawrence River containerized freight coordination
service to give notice pursuant to Section 27 of the National
Transportation Act.
and
(2) an order forbidding anything to be done to further the
so-called St. Lawrence River coordination of containerized
freight shipping services until there has been compliance with
Section 27 of the National Transportation Act.
Leave was subsequently granted to the Attorney
General to appeal to this Court on the following
question:
Did the Water Transport Committee err in law and jurisdiction
in holding that there was no warrant or authority in the
National Transportation Act or in any other Act applicable to
Marine Transportation for the issuance by the Committee of an
order forbidding anything to be done to further the St. Law-
rence River containerized freight coordinated service until
there has been compliance with section 27 of the National
Transportation Act?
The application made to the Commission was
supported only by some thirteen paragraphs of
allegations which referred to the direct and sub
stantial interest of the citizens of Nova Scotia in
the provision of containerized freight services
within and through Nova Scotia, to certain pro
ceedings which had already been heard by the
Committee including the Attorney General's pend
ing application for an order requiring Canadian
Pacific Steamships Limited to give notice under
section 27 of the National Transportation Act of
its proposed acquisition of an interest in a joint
coordinated container service undertaking with
Dart Containerline (Canada) Limited and Man-
chester Liners Limited, to be operated from Mon-
treal, commencing in August 1981, and to the
claim of the Province of Nova Scotia that a coordi
nation of the shipping services offered by Dart,
Manchester and CP Steamships would unduly
restrict competition in the provision of container
shipping services and otherwise damage Canada's
intermodal transportation network, thus causing
irreparable harm to the Canadian freight transpor
tation system. The application referred to and
invoked sections 27 and 59 of the Act and asserted
the claim of the Province that:
... the proposed coordination of Dart Containerline (Canada)
Limited, CP Steamships Limited and Manchester Liners Lim
ited, to take place during the month of August, 1981, would
cause serious disruption and damage to the eastern Canadian
freight transportation network and therefore constitutes special
circumstances which require the Canadian Transport Commis
sion to take immediate action to prevent further deterioration
of the freight transportation system serving the Province.
In dismissing the application the Committee,
after referring to the need of an applicant for relief
under section 59 to establish special circum
stances, said:
But there is another requirement in Section 59 which must be
satisfied before the Commission can act. The Order which the
Commission may make ex parte and on an interim basis must
be an Order which it would be empowered on application,
notice and hearing to make. It follows that the power to make
the two Orders requested by the Province must be ascertained.
Were the Committee to find that the transaction as described
by Mr. Romoff amounted to a "proposed acquisition" on the
part of Canadian Pacific, or for that matter Dart or Manches-
ter Liners, and the notice required by Section 27 was not
immediately forthcoming, we think that the Committee could
consider issuing an Order under Section 59. However we can
find no warrant or authority in the National Transportation
Act or any other Act applicable to marine transportation for
the issuance by the Committee of an Order forbidding anything
to be done to further the St. Lawrence River containerized
freight coordination service until there has been compliance
with Section 27 of the National Transportation Act. In other
words, we find that the Water Transport Committee does not
have the legal power to do what the Province is asking.
Consequently that branch of the Application which asks for a
prohibition Order is dismissed for the reasons given.
Sections 59 and 27 provide:
59. The Commission may, if the special circumstances of any
case so require, make an interim ex parte order authorizing,
requiring or forbidding anything to be done that the Commis
sion would be empowered, on application, notice and hearing,
to authorize, require or forbid; but no such interim order shall
be made for any longer time than the Commission may deem
necessary to enable the matter to be heard and determined.
27. (1) A railway company, commodity pipeline company,
company engaged in water transportation, or person operating
a motor vehicle undertaking or an air carrier, to which the
legislative jurisdiction of the Parliament of Canada extends,
that proposes to acquire, directly or indirectly, an interest, by
purchase, lease, merger, consolidation or otherwise, in the
business or undertaking of any person whose principal business
is transportation, whether or not such business or undertaking
is subject to the jurisdiction of Parliament, shall give notice of
the proposed acquisition to the Commission.
(2) The Commission shall give or cause to be given such
public or other notice of any proposed acquisition referred to in
subsection (1) as to it appears to be reasonable in the circum
stances, including notice to the Director of Investigation and
Research under the Combines Investigation Act.
(3) Any person affected by a proposed acquisition referred to
in subsection (1) or any association or other body representing
carriers or transportation undertakings affected by such acqui
sition may, within such time as may be prescribed by the
Commission, object to the Commission against such acquisition
on the grounds that it will unduly restrict competition or
otherwise be prejudicial to the public interest.
(4) Where objection is made pursuant to subsection (3), the
Commission
(a) shall make such investigation, including the holding of
public hearings, as in its opinion is necessary or desirable in
the public interest;
(b) may disallow any such acquisition if in the opinion of the
Commission such acquisition will unduly restrict competition
or otherwise be prejudicial to the public interest;
and any such acquisition, to which objection is made within the
time limited therefor by the Commission that is disallowed by
the Commission, is void.
(5) Nothing in this section shall be construed to authorize
any acquisition of an interest in any other company that is
prohibited by any Act of the Parliament of Canada.
It will be observed that while section 59 empow
ers the Commission to grant interim relief by
"authorizing, requiring or forbidding" anything to
be done that the Commission would be empowered
to authorize, require or forbid on application,
notice and hearing, the expressions of what the
Commission may order do not include the word
"disallow". It will also be observed that in the
procedure set out in section 27 the course open to a
party affected by a proposed acquisition is not one
of initiating an application for disallowance but
one of objecting to the proposed acquisition, after
which there may or may not be a public hearing'.
The argument on the appeal focussed attention
on these features of the statutory provisions. On
behalf of the Attorney General it was submitted
that the statute as a whole represented a statutory
scheme for regulating the transportation industry,
that both section 21 2 of the Act and section 11 of
the Interpretation Act, R.S.C. 1970, c. I-23, 3
required that the sections in question should be
given a broad construction so as to fill out the
regulatory scheme and that the word "forbid" in
section 59 falls within the meaning of "disallow"
in subsection 27(4). The opposing parties main
tained the contrary and further took the position
that section 59 applies only to proceedings before
the Commission in which procedure by applica
tion, notice and hearing is prescribed by the Act.
There are instances under the Act and the Acts
referred to in it in which such procedure is
prescribed.
Notwithstanding the able and comprehensive
argument presented by counsel for the Attorney
General, I am not persuaded that section 59
authorizes an interim order in matters arising
under section 27 or that the power to disallow
conferred by that section includes a power to
"forbid" or enjoin. The consequence of disallow-
ance is prescribed by the subsection. It is that the
acquisition is void. I incline to the view that power
to grant an injunction with respect to it is not
included and if such a power is not included in the
power that may be exercised after the investigation
' See Seafarers International Union of Canada v. Canadian
National Railway Company [1976] 2 F.C. 369.
2 21. It is the duty of the Commission to perform the
functions vested in the Commission by this Act, the Railway
Act, the Aeronautics Act and the Transport Act with the object
of coordinating and harmonizing the operations of all carriers
engaged in transport by railways, water, aircraft, extra-provin
cial motor vehicle transport and commodity pipelines; and the
Commission shall give to this Act, the Railway Act, the
Aeronautics Act and the Transport Act such fair interpretation
as will best attain that object.
3 11. Every enactment shall be deemed remedial, and shall be
given such fair, large and liberal construction and interpreta
tion as best ensures the attainment of its objects.
it is not exercisable on an interim basis under
section 59. I am also inclined to think, though I
need not reach a concluded opinion on it or on the
extent of the meaning of "disallow", that the
procedure open to an objector under section 27 is
not an "application, notice and hearing" procedure
within the meaning of section 59.
As I view the matter there is a narrower ground
on which the question raised by the appeal may be
answered. It appears from the passage I have cited
from the Committee's reasons that the Committee
was not persuaded that it did not have power
under section 59 to grant interim relief in a matter
arising under section 27 and might have granted
such relief if (1) it had concluded that the transac
tion between the three carriers amounted to a
"proposed acquisition" by CP Steamships or the
others and (2) the notice required by section 27
was not immediately forthcoming. What the Com
mittee appears to me to have said in the sentence
that follows is not that it had no power under
section 59, but that it had no power to grant the
order requested by the Attorney General, that is to
say, an order forbidding the carriers to do any
thing to further the proposed service, rather than
an order relating to the acquisition arrangements
between the carriers. In this I see no reason to
doubt the correctness of the Committee's view of
its power.
A further submission was made by counsel for
the Attorney General that the Committee had
power under section 23 to make an order of the
kind requested and consequently could make such
an order on an interim basis under section 59.
Section 23 provides:
23. (1) In this section
"carrier" means any person engaged for hire or reward in
transport, to which the legislative authority of the Parliament
of Canada extends, by railway, water, aircraft, motor vehicle
undertaking or commodity pipeline;
"public interest" includes, without limiting the generality
thereof, the public interest as described in section 3.
(2) Where a person has reason to believe
(a) that any act or omission of a carrier or of any two or
more carriers, or
(b) that the effect of any rate established by a carrier or
carriers pursuant to this Act or the Railway Act after the
19th day of September 1967,
may prejudicially affect the public interest in respect of tolls
for, or conditions of, the carriage of traffic within, into or from
Canada, such person may apply to the Commission for leave to
appeal the act, omission or rate, and the Commission shall, if it
is satisfied that a prima facie case has been made, make such
investigation of the act, omission or rate and the effect thereof,
as in its opinion is warranted.
(3) In conducting an investigation under this section, the
Commission shall have regard to all considerations that appear
to it to be relevant, including, without limiting the generality of
the foregoing,
(a) whether the tolls or conditions specified for the carriage
of traffic under the rate so established are such as to create
(i) an unfair disadvantage beyond any disadvantage that
may be deemed to be inherent in the location or volume of
the traffic, the scale of operation connected therewith or
the type of traffic or service involved, or
(ii) an undue obstacle to the interchange of commodities
between points in Canada or an unreasonable discourage
ment to the development of primary or secondary indus
tries or to export trade in or from any region of Canada or
to the movement of commodities through Canadian ports;
or
(b) whether control by, or the interests of a carrier in,
another form of transportation service, or control of a carrier
by, or the interest in the carrier of, a company or person
engaged in another form of transportation service may be
involved.
(4) If the Commission, after a hearing, finds that the act,
omission or rate in respect of which the appeal is made is
prejudicial to the public interest, the Commission may, not
withstanding the fixing of any rate pursuant to section 278 of
the Railway Act but having regard to sections 276 and 277 of
that Act, make an order requiring the carrier to remove the
prejudicial feature in the relevant tolls or conditions specified
for the carriage of traffic or such other order as in the
circumstances it may consider proper, or it may report thereon
to the Governor in Council for any action that is considered
appropriate.
It was conceded that there was nothing in the
application before the Commission to invoke sec
tion 23 or to make out a case for relief under it.
But it was contended, as I understood the argu
ment, that as a matter of jurisdiction the Commis
sion under section 59 could nevertheless exercise
on an interim basis the powers that would be open
to it to exercise on an application under section 23.
In my opinion in order to exercise on an interim
basis under section 59 powers conferred by section
23, there must be an application invoking section
23 and establishing, at least prima facie, a situa
tion to which section 23 might apply. I think,
moreover, that this is implicit in the wording at the
end of section 59 which provides that no interim
order shall be made for any longer time than the
Commission may deem necessary "to enable the
matter to be heard and determined." This appears
to me to refer, if a power of the kind conferred by
section 23 is to be exercised, to a matter in which
section 23 is invoked by the description of a situa
tion to which section 23 might apply.
Accordingly I am of the opinion that the ques
tion before the Court should be answered in the
negative and that this Court should so certify to
the Canadian Transport Commission.
Having regard to Rule 1312 no costs should be
awarded to any party.
* * *
RYAN J. concurred.
* * *
KERR D.J. concurred.
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.