A-687-78
In re the Railway Act and in re the National
Transportation Act and in re a decision made on
November 17, 1978 and order dated November 22,
1978 of the Review Committee of the Canadian
Transport Commission numbered 1978-5 review
ing a decision of the Railway Transport Commit
tee dated November 24, 1977 and order number
R-25960 dated December 14, 1977 (as amended
by order number R-26029, R-26226 and R-26836)
Court of Appeal, Pratte and Heald JJ. and Ver-
chere D.J.—Vancouver, December 2 and 3;
Ottawa, December 21, 1981.
Railways — Order of Review Committee determined that
passenger-train service in question was uneconomic but should
not be discontinued — Appellant contends that the Canadian
Transport Commission does not have jurisdiction to make
such a decision on an application under s. 260 of the Railway
Act because two Special Acts prescribe that the service shall
not be discontinued — Appeal dismissed — National Trans
portation Act, R.S.C. 1970, c. N-17, ss. 63, 64(2) — Railway
Act, R.S.C. 1970, c. R-2, ss. 3(1)(b), 260.
Appeal by the Province of British Columbia from a decision
of the Review Committee of the Canadian Transport Commis
sion. Canadian Pacific Limited applied to the Commission
under section 260 of the Railway Act to discontinue the
passenger-train service between Victoria and Courtenay. The
Railway Transport Committee determined that the service was
uneconomic and ordered that it be discontinued. The Review
Committee, after a new hearing, rescinded the decision of the
Railway Transport Committee, and determined that the pas-
senger-train service was uneconomic but should not be discon
tinued. Paragraph 3(1)(b) of the Railway Act prescribes that
the provisions of Special Acts passed by the Parliament of
Canada override those of the Railway Act in so far as is
necessary to give effect to that prescription. The appellant
contends that the Canadian Transport Commission has no
jurisdiction to decide an application under section 260 because
there are two Special Acts which prescribe that the service shall
not be discontinued. A federal statute of 1884 ratified the
contract for the construction of the railway, and according to
the appellant incorporated the terms of the contract so that the
obligation imposed by the contract on the contractors to oper
ate the railway continuously must be considered as having been
imposed by the statute itself. The appellant also submits that a
federal statute passed in 1905 preserved the obligation of the
railway company found in the provincial Settlement Act of
1883 to operate the railway "continuously". Allegedly the 1905
Act is the second Special Act. The question is whether the
Commission has jurisdiction to decide an application under
section 260.
Held, the appeal is dismissed. Pursuant to paragraph 3(1)(b)
of the Railway Act, the provisions of the two Special Acts
override those of the Railway Act, including section 260, "in so
far as is necessary to give effect" to that prescription. To attain
that object it would be necessary to deny to the Commission the
power to order that the railway service be discontinued. How
ever, the decision of the Review Committee is a decision which
determines that the passenger-train service is uneconomic but
orders that it shall not be discontinued. In order to give effect
to the asserted prescription of the Special Acts that the train
service be not discontinued, it is not necessary to deny to the
Commission the authority conferred on it by section 260 to find
that the operation of the passenger-train service is uneconomic
since the existence of that power in no way conflicts with the
obligation of the railway to continue the operation of its
railway. It is not necessary either, in order to give effect to the
Special Acts, to deny to the Commission the power to order
that the railway service in question shall not be discontinued.
That the Commission should have such a power in no way
conflicts with the provisions of the Special Acts; on the con
trary, the existence of that power would seem to be very useful,
if not necessary, to give effect to the prescription in the Special
Acts.
APPEAL.
COUNSEL:
L. F. Lindholm and P. Pearlman for
appellant.
N. D. Mullins, Q.C. for respondent Canadian
Pacific Limited.
J. K. Allen for respondent Via Rail Canada
Inc.
G. Nadeau, Q.C. for respondent Canadian
Transport Commission.
W. B. Scarth, Q.C. for respondent Attorney
General of Canada.
SOLICITORS:
Pearlman & Lindholm, Victoria, for appel
lant.
Legal Services, Canadian Pacific Limited,
Calgary, for respondent Canadian Pacific
Limited.
Legal Services, Via Rail Canada Inc., Mon-
treal, for respondent Via Rail Canada Inc.
Legal Services, Canadian Transport Com
mission, Hull, for respondent Canadian
Transport Commission.
Deputy Attorney General of Canada for
respondent Attorney General of Canada.
The following are the reasons for judgment
rendered in English by
PRATTE J.: The Province of British Columbia
appeals, pursuant to subsections 64(2) and follow
ing of the National Transportation Act, R.S.C.
1970, c. N-17, from a decision of the Review
Committee of the Canadian Transport Commis
sion on an application made by Canadian Pacific
Limited (on behalf of Esquimalt and Nanaimo
Railway Company). That decision was made on
November 17, 1978, and embodied in a formal
order dated November 22, 1978.
The application of Canadian Pacific Limited to
the Canadian Transport Commission was made on
September 11, 1974, under section 260 of the
Railway Act, R.S.C. 1970, c. R-2. It was an
application to discontinue the passenger-train ser
vice between Victoria and Courtenay on a railway
line built and owned by the Esquimalt and Nanai-
mo Railway Company and operated by Canadian
Pacific Limited pursuant to a long-term lease
made on July 1, 1912. The Province of British
Columbia contested that application. It appeared
before the Railway Transport Committee of the
Commission and argued, first, that the Commis
sion had no jurisdiction in the matter and, second,
that, in any event, the Committee should deter
mine that the service in question should not be
discontinued. The Committee dismissed the objec
tion raised by the Province to its jurisdiction and,
by an order dated December 14, 1977, it deter
mined that the passenger-train service between
Victoria and Courtenay was uneconomic and
ordered that it be discontinued. The Province
applied to the Commission for a review of that
decision pursuant to section 63 of the National
Transportation Act. It was the contention of the
Province that the Commission had no jurisdiction
in the matter and that, in any event, new evidence
could be adduced showing that the decision of the
Railway Transport Committee was incorrect. On
October 30, 1978, the Review Committee dis
missed the objection raised to the jurisdiction of
the Commission and ordered that a new hearing be
held to allow all interested to adduce new evi
dence. After that hearing, the Review Committee
rescinded the decision of the Railway Transport
Committee, determined that the passenger-train
service in question was uneconomic and likely to
continue to be uneconomic and ordered that
Canadian Pacific Limited (Esquimalt and Nanai-
mo Railway Company) should not discontinue the
operation of that service. That is the decision that
was made on November 17, 1978, from which the
Province appeals on the sole ground that the Com
mittee exceeded its jurisdiction in making it.
Before considering the attack made by the
appellant on the jurisdiction of the Committee, a
preliminary question must first be determined.
Counsel for Canadian Pacific Limited argued
that the appeal should be dismissed on the ground
that it is academic, and directed against the rea
sons of the Committee rather than against its
decision which was favourable to the appellant. In
my view, these two contentions are unfounded. In
so far as I can see from the material before us, the
decision rendered by the Review Committee is still
in existence and nothing has occurred to deprive it
of its effect. For that reason, the appeal is not
academic. Moreover, the appeal is not directed
against the reasons of the Committee since what is
challenged by the appellant is the legality of the
order actually made by the Committee. Indeed,
what the Province is seeking in this appeal is a
declaration that the Committee had no jurisdiction
either to declare that the passenger-train service
between Victoria and Courtenay was uneconomic
or to order that it should not be discontinued.
There is, however, another preliminary and more
serious objection that could be made to this
appeal. That objection is that the Province has no
direct and immediate interest in challenging the
validity of the decision rendered by the Committee
since that decision does not affect prejudicially the
interests of the Province which favours the con
tinuation of the passenger-train service between
Victoria and Courtenay. That objection, serious as
it is, was certainly considered by the Court when
the Province applied for leave to appeal; since the
Court then granted that application, it must be
assumed that it rejected that objection and con
sidered that the appellant, though indirectly
affected by the decision of the Committee, was
nevertheless sufficiently affected so as to give it
standing as an appellant. I do not think that we
should, at this late stage, adopt another view.
A few historical notes are necessary for a proper
understanding of the reasons advanced by the
Province of British Columbia for challenging the
jurisdiction of the Commission in the matter.'
The Colony of British Columbia became part of
Canada on July 20, 1871. In the following years,
there was considerable tension between the new
Province and the Federal Government due to what
the Province perceived as the failure of the Gov
ernment to live up to its obligations under the
terms of the Union to build a railway on Vancou-
ver Island. That dispute was settled in 1883 by an
arrangement between the two governments con
cerned and a group of businessmen, Messrs. Duns-
muir et al., who were prepared to arrange for the
construction of the railway. Under that arrange
ment, the Provincial Government was to grant to
the Federal Government a large tract of land on
the Island through which the proposed railway was
to run; the Provincial Government was also to
incorporate a company for the purpose of con
structing and operating the railway; as soon as the
construction was completed, the Federal Govern
ment was to transfer to that company the land
acquired from the Provincial Government and, in
addition, as a further subsidy, was to pay the
company a sum of $750,000. Of the various stat
utes and documents that came into existence to
carry that arrangement into effect, only three need
be mentioned:
(1) a contract, dated August 20, 1883, between
the Federal Government and Messrs. Dunsmuir
et al. (the contractors) for the construction of
the railway. Paragraphs 3 and 9 of that contract
provided that the contractors should construct
and operate the railway:
3. That the said contractors shall and will well, truly and
faithfully lay out, make, build, construct, complete, equip,
maintain and work continuously a line of railway of a
uniform gauge of four feet eight and a-half inches, from
Esquimalt to Nanaimo, in Vancouver Island, British
' Those who are familiar with the decision of the Privy
Council in Attorney-General for British Columbia v.
Esquimalt and Nanaimo Railway Company [[1950] A.C. 87]
will realize that in the brief historical outline that follows I
have more or less plagiarized the judgment of the Judicial
Committee in that case.
Columbia, the points and approximate route and course
being shown on the map hereunto annexed, marked B, and
also construct, maintain and work continuously a telegraph
line throughout and along the said line of railway, and
supply all such telegraphic apparatus as may be required for
the proper equipment of such telegraph line, and perform all
engineering services, whether in the field or in preparing
plans or doing other office work, to the entire satisfaction of
the Governor in Council.
9. That the said contractors will, upon and after the
completion and equipment of the said line of railway and
works appertaining thereto, truly and in good faith keep and
maintain the same, and the rolling stock required therefor,
in good and efficient working and running order, and shall
continuously and in good faith operate the same, and also
the said telegraph line and will keep the said telegraph line
and appurtenances in good running order.
Paragraph 13 provided that the Federal Govern
ment was to grant to the contractors by way of
subsidy the sum of $750,000 and the land
acquired from the Province;
(2) a statute of the Legislature of British
Columbia, assented to on December 19, 1883,
47 Viet., c. 14, known as the Settlement Act.
That statute recited the agreement between the
Province and the Federal Government for the
purpose of settling existing disputes between
them and, inter alia, incorporated "The
Esquimalt and Nanaimo Railway Company".
Sections 8, 9 and 27 of that Act read as follows:
8. For the purpose of facilitating the construction of the
Railway between Esquimalt and Nanaimo, it is hereby
enacted that such persons, hereinafter called the "compa-
ny," as may be named by the Governor-General in Council,
with all such other persons and corporations as shall become
shareholders in the company, shall be and are hereby con
stituted a body corporate and politic by the name of "The
Esquimalt and Nanaimo Railway Company."
9. The company, and their agents and servants, shall lay
out, construct, equip, maintain, and work a continuous
double or single track steel railway of the gauge of the
Canadian Pacific Railway, and also a telegraph line, with
the proper appurtenances, from a point at or near the
harbour of Esquimalt, in British Columbia, to a port or
place at or near Nanaimo on the eastern coast of Vancouver
Island, with power to extend the main line to Comox and
Victoria, and to construct branches to settlements on the
east coast, and also to extend the said railway by ferry
communications to the mainland of British Columbia, and
there to connect or amalgamate with any railway line in
operation or course of construction. The company shall also
have power and authority to build, own, and operate steam
and other vessels in connection with the said railway, on and
over the bays, gulfs, and inland waters of British Columbia.
27. The said Esquimalt and Nanaimo Railway Company
shall be bound by any contract or agreement for the con
struction of the Railway from Esquimalt to Nanaimo which
shall be entered into by and between the persons so to be
incorporated as aforesaid, and Her Majesty, represented by
the Minister of Railways and Canals, and shall be entitled to
the full benefit of such contract or agreement, which shall be
construed and operate in like manner as if such company
had been a party thereto in lieu of such persons, and the
document had been duly executed by such company under
their corporate seal.
(3) a federal statute [An Act respecting the
Vancouver Island Railway, the Esquimalt
Graving Dock, and certain Railway Lands of
the Province of British Columbia, granted to
the Dominion], assented to on April 19, 1884,
47 Vict., c. 6, which recited and approved the
agreement between the Federal Government and
the Province. That section 2 of that statute
ratified in the following terms the contract be
tween the Federal Government and Messrs.
Dunsmuir et al. for the construction of the
railway:
2. The agreement, a copy of which, with specification, is
hereto appended as a schedule, for the construction, equip
ment, maintenance and working of a continuous line of
railway of a uniform gauge of four feet, eight and one-half
inches, from Esquimalt to Nanaimo in Vancouver Island,
British Columbia, and also for the construction, equipment,
maintenance and working of a telegraph line along the line
of the said railway, is hereby approved and ratified, and the
Governor in Council is authorized to carry out the provisions
thereof according to their purport.
The railway was built as contemplated and the
Esquimalt and Nanaimo Railway Company
received from the Federal Government the subsidy
of $750,000 as well as the land acquired from the
Provincial Government.
There remains only to be mentioned, before
turning to the argument of the appellant, that in
1905 the Federal Parliament passed a statute [An
Act respecting the Esquimalt and Nanaimo Rail
way Company] declaring the railway of the
Esquimalt and Nanaimo Railway Company to be
a work for the general advantage of Canada.
Sections 1 and 4 of that statute, 4-5 Edw. VII, c.
90, read as follows:
1. The railway of the Esquimalt and Nanaimo Railway
Company, hereinafter called "the Company," is declared to be
a work for the general advantage of Canada.
4. Nothing in this Act shall prejudicially affect the respective
rights and liabilities of the province of British Columbia and of
the Company, now existing or which heretofore existed by
virtue of the provisions of the Act of the Legislature of the said
province, 47 Victoria, chapter 14.
Section 260 of the Railway Act gives jurisdic
tion to the Canadian Transport Commission to
decide an application to discontinue passenger-
train services. However the various provisions of
the Railway Act, including section 260, apply to
railway companies, which, like the Esquimalt and
Nanaimo Railway Company, are subject to the
legislative authority of Parliament, only if those
provisions do not conflict with the provisions of a
Special Act 2 passed by the Parliament of Canada
and relating to the same subject-matter. That is
what is prescribed by paragraph 3(1)(b) of the
Railway Act:
3. (1) Except as in this Act otherwise provided,
(b) where the provisions of this Act and of any Special Act
passed by the Parliament of Canada relate to the same
subject-matter the provisions of the Special Act shall, in so
far as is necessary to give effect to such Special Act, be taken
to override the provisions of this Act.
The appellant's contention is that the Canadian
Transport Commission has no jurisdiction to
decide an application under section 260 of the
Railway Act for discontinuance of the passenger-
train service on the railway of the Esquimalt and
Nanaimo Railway Company because there are two
Special Acts passed by the Parliament of Canada
which prescribe that this service shall not be dis
continued. The first one of the two statutes that, it
says, would thus override the provisions of section
260 of the Railway Act is the federal statute of
1884 which ratified the contract for the construc
tion of the railway that had been entered into by
the Federal Government and Messrs. Dunsmuir et
al. The appellant interprets section 2 of that stat
ute as giving statutory force to the provisions of
2 Section 2 of the Railway Act contains a definition of
Special Act which reads in part as follows:
2.(I)...
"Special Act", when used with reference to a railway, means
any Act under which the company has authority to con
struct or operate a railway, or that is enacted with special
reference to such railway, whether heretofore or hereafter
passed ....
the construction contract and, in particular, to
clauses 3 and 9 which imposed on the contractors
the obligation to "maintain and work continuously
a line of railway ... from Esquimalt to Nanaimo"
and to "continuously and in good faith operate the
same". According to the appellant, the terms of
the contract for the construction of the railway are
incorporated in the Special Act of 1884 so that the
obligation that the contract imposed on the con
tractors to operate the railway continuously must
be considered as having been imposed by the stat
ute itself.
The second Special Act which, according to the
appellant, would override the provisions of section
260 in so far as they are applicable to the
Esquimalt and Nanaimo Railway Company, is the
federal statute of 1905 which declared the railway
of that company to be a work for the general
advantage of Canada. Section 4 of that Act pro
vided that:
Nothing in this Act shall prejudicially affect the respective
rights and liabilities of the province of British Columbia and of
the Company, now existing or which heretofore existed by
virtue of the provisions of the Act of the Legislature of the said
province, 47 Victoria, chapter 14.
The Act of the Legislature of British Columbia
referred to in this section is the Settlement Act of
1883 which, in its section 27, prescribed that the
Esquimalt and Nanaimo Railway Company was to
be bound by the contract for the construction of
the railway between Messrs. Dunsmuir et al. and
the Federal Government in the same manner as if
the company had been a party to that contract.
According to the appellant, section 27 of the Set
tlement Act imposed on the Esquimalt and Nanai-
mo Railway Company all the obligations of the
contractors under the construction contract and, in
particular, the obligation to operate the railway
"continuously". Section 4 of the federal Act of
1905 must, always according to the appellant, be
interpreted as prescribing that notwithstanding the
declaration contained in section 1, all the liabilities
of the company by virtue of the Settlement Act,
and, among them, the obligation to operate the
railway continuously, shall remain intact. The
appellant therefore concludes that section 4 of the
Act of 1905 is a provision of a Special Act adopted
by the Parliament of Canada which prescribes that
the railway between Esquimalt and Nanaimo be
operated continuously and which, following para-
graph 3(1)(b) of the Railway Act, must override
the provisions of section 260 of the Railway Act.
In my view, it is not necessary, in order to
dispose of this appeal, to determine whether the
appellant's interpretation of the two Special Acts
to which I have just referred is the correct one
because even if it were, the order which is the
subject of this appeal would nevertheless be an
order that the Commission had the power to make.
Let us assume, for a moment, without so deciding,
that the interpretation of the two Special Acts
proposed by the appellant must be adopted.
According to that interpretation, the two Special
Acts prescribe that the railway service between
Esquimalt and Nanaimo shall not be discontinued.
Pursuant to paragraph 3(1)(b) of the Railway Act,
the provisions of the two Special Acts override
those of the Railway Act, including section 260,
"in so far as is necessary to give effect" to that
prescription. Now, in order to attain that object, it
would obviously be necessary to deny to the Com
mission and its committees the power to order that
the railway service between Esquimalt and Nanai-
mo be discontinued. However, the decision of the
Review Committee which is the subject of this
appeal is not an order of that kind; it is a decision
which determines that the passenger-train service
between Victoria and Courtenay is uneconomic
and orders that it shall not be discontinued. In my
view, in order to give effect to the asserted pre
scription of the Special Acts, that the train service
here in question be not discontinued, it is certainly
not necessary to deny to the Commission the au
thority conferred on it by section 260 to find that
the operation of the passenger-train service is
uneconomic since the existence of that power in no
way conflicts with the obligation of the railway to
continue the operation of its railway. It is not
necessary either, in order to give effect to the
Special Acts, to deny to the Commission the power
to order that the railway service in question shall
not be discontinued. That the Commission should
have such a power in no way conflicts with the
provisions of the Special Acts; on the contrary, the
existence of that power would seem to be very
useful, if not necessary, to give effect to the pre
scription contained in the Special Acts.
For these reasons, I am of opinion that the order
of the Review Committee was validly made. I
would dismiss the appeal.
* * *
HEALD J.: I concur.
* * *
VERCHERE D.J.: I concur.
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.