A-388-78
Canadian Pacific Limited, Canadian National
Railway, Dominion Atlantic Railway, Quebec
Central Railway Company and Canadian Car
Demurrage Bureau (Appellants)
v.
Canadian Transport Commission and Canadian
National Millers Association (Respondents)
Court of Appeal, Pratte, Ryan and Le Dain JJ.—
Ottawa, March 1 and 16, 1979.
Railways — Rates — Paragraph 272(2)(b) of the Railway
Act sets rates for flour moving over railway lines under federal
jurisdiction to an Eastern port for export from any inland
point — Whether or not the word rates in para. 272(2)(b)
includes demurrage charges — Railway Act, R.S.C. 1970, c.
R-2, s. 272(2)(b) — National Transportation Act, R.S.C.
1970, c. N-17, ss. 45, 64(2).
This is an appeal under section 64(2) of the National Trans
portation Act from an order made by the Railway Transport
Committee of the Canadian Transportation Commission in the
exercise of its authority under section 45 of the Act, and
requiring appellants to implement a decision of the Committee
concerning demurrage charges. The issue is whether or not the
word "rates" in paragraph 272(2)(b) of the Railway Act which
sets the rates for flour moving over a railway line under federal
jurisdiction to an Eastern port for export from any inland point,
includes demurrage charges.
Held, (Pratte J. dissenting) the appeal is dismissed. Demur-
rage is sufficiently related to the transportation of goods to be
part of the rates in respect of the movement of goods within the
meaning of section 272. The function of the words "moving"
and "movement" in section 272 is to serve as part of the
description of the kind of traffic contemplated, and not as
indicating the kind of rates contemplated. The cost of detention
time, whether free time or time for which demurrage may be
charged, must be taken into account by the Commission in
performing its functions under sections 276 and 277 and that
cost will be reflected in the rates which will be determined by it
to be compensatory. Thus the reference in subsection 272(3) to
sections 276 and 277 is not a reason for concluding that
demurrage is not contemplated by the word "rates". The fact
that section 274 uses the word "rate" in its denomination and
definition of the first three kinds of freight tariff referred to but
does not use the word "rate" in the denomination and definition
of special arrangements is not a conclusive circumstance. The
definition of "rate" in section 2 is to include charges that may
not ordinarily be referred to as rates. The nomenclature used in
section 274 cannot be a ground for displacing that definition.
Per Pratte J. dissenting: The word "rates" in paragraph
272(2)(b) of the Railway Act does not include demurrage
charges. The words "rates on flour", when one knows that there
are special rates applying to that commodity, normally evoke
the idea of those special rates which do not include demurrage
charges. Moreover, the phrases "rates on flour moving" and
"rates applying ... to the movement of such flour" are obvious
ly apt to refer to the normal charges for the transportation of
flour, but they do not include in their meaning demurrage
charges because those charges cannot be said to be charges
"applying ... to the movement" of flour. It was not Parlia
ment's intention to subsidize the payment of demurrage charges
which are not normally incurred without the fault of the
shipper or the consignee.
The North-West Line Elevators Association v. Canadian
Pacific Railway Company [1959] S.C.R. 239, distin
guished.
APPEAL.
COUNSEL:
T. J. Moloney and David W. Flicker for
appellants Canadian Pacific Limited, Domin
ion Atlantic Railway, Quebec Central Rail
way Company and Canadian Car Demurrage
Bureau.
H. J. G. Pye, Q.C. for appellant Canadian
National Railway.
M. E. Rothstein, Q.C. and J. E. Foran for
respondent Canadian National Millers Asso
ciation.
No one appearing for respondent Canadian
Transport Commission.
SOLICITORS:
Canadian Pacific Law Department, Montreal,
for appellants Canadian Pacific Limited,
Dominion Atlantic Railway, Quebec Central
Railway Company and Canadian Car Demur-
rage Bureau.
Canadian National Railway Company Law
Department, Montreal, for appellant Canadi-
an National Railway.
Aikins, MacAulay & Thorvaldson, Win-
nipeg, for respondent Canadian National
Millers Association.
Canadian Transport Commission Legal Ser
vices, Ottawa, for respondent Canadian
Transport Commission.
The following are the reasons for judgment
rendered in English by
PRATTE J. (dissenting): I have had the occasion
to read the reasons for judgment of my brother Le
Dain. I regret not to be able to share his conclu
sion that the word "rates" in paragraph (b) of
subsection 272(2) of the Railway Act, R.S.C.
1970, c. R-2, includes demurrage charges; in my
view, it does not.
As stated by Rand J. in The North-West Line
Elevators Association v. Canadian Pacific Rail
way Co.,' demurrage charges "are concerned with
the unreasonable detention of railway equipment."
The parties have agreed, for the purposes of these
proceedings, that demurrage could be defined as:
A charge made by the Railways for the detention of a freight
car beyond the free time provided for by the applicable special
arrangements tariffs and is intended as an inducement to
promptly release the freight car, and alternatively, to compen
sate partially the Railways, should the freight car be detained
beyond the free time allowance.
Demurrage charges are provided for in "special
arrangements tariffs". 2 Those tariffs determine,
first, the length of the "free time", which is the
time during which a freight car may be detained
without charge after it has reached its destination,
and, second, the amount per day that will have to
be paid to the railway company for the retention of
the car beyond the free time. Demurrage rates do
not normally vary according to the nature of the
goods carried and, in any event, there are no
special demurrage rates for flour or grain. By
contrast, the rates provided for in "commodity rate
tariffs", which represent the normal charges for
I [1959] S.C.R. 239 at 244.
2 Section 274 of the Railway Act enumerates and defines the
four kinds of tariffs that railway companies are authorized to
issue. Only two of those need retain our attention: the "com-
modity rate tariffs" and the "special arrangements tariffs"
which are defined as follows in subsections 274(3) and (5):
274... .
(3) A commodity rate is a rate applicable to an article
described or named in the tariff containing the rate.
(5) Special arrangements are charges, allowances, absorp-
tions, rules and regulations respecting demurrage, protection,
storage, switching, elevation, cartage, loading, unloading,
weighing, diversion and all other accessorial or special
arrangements that in any way increase or decrease the
charges to be paid on any shipment or that increase or
decrease the value of the service provided by the company.
the transportation of a commodity between two
points, obviously vary with the nature of the com
modity. There are special commodity rates for
flour and grain which are expressed in terms of
cents "per 100 pounds".
Section 272(2)(b) prescribes that "rates on flour
moving for export to an Eastern port . .. shall be
maintained at the level of rates applying on the
30th day of September 1966 to the movement of
such flour to Eastern ports."
In my view, the words "rates on flour", when
one knows that there are special rates applying to
that commodity, normally evoke the idea of those
special rates which do not include demurrage
charges. Moreover, the phrases "rates on flour
moving" and "rates applying ... to the movement
of such flour" are obviously apt to refer to the
normal charges for the transportation of flour but
they do not, in my view, include in their meaning
demurrage charges because those charges cannot
be said to be charges "applying ... to the move
ment" of flour.
For those reasons, I cannot read section
272(2)(b) as referring to demurrage charges. Two
other considerations support that conclusion.
In enacting section 272, Parliament expressed
its intention to subsidize the cost of transportation
of grain and flour from Central Canada to the
Eastern ports. I cannot accept the view that it was
also Parliament's intention to subsidize the pay
ment of demurrage charges which are not normal
ly incurred without the fault of the shipper or the
consignee.
Finally, I cannot conceive that the draftsman of
sections 271 and 272, which were both enacted at
the same time a few years after the decision of the
Supreme Court in North-West Line Elevators
Association, used the same phrase, "rates on flour
moving", with a different meaning in the two
sections.
For those reasons, I would allow the appeal.
The following are the reasons for judgment
rendered in English by
LE DAIN J.: This is an appeal under section
64(2) of the National Transportation Act, R.S.C.
1970, c. N-17, from Order No. R-26862, dated
May 16, 1978, made by the Railway Transport
Committee of the Canadian Transport Commis
sion in the exercise of its authority under
section 45 of the Act, and requiring the appellants
to implement a decision of the Committee dated
April 21, 1978 as follows:
(1) The Respondents shall implement the Decision by filing
amendments to the Canadian Car Demurrage Rules which will
restore demurrage charges at other than origin points, on
movements of export flour, to the levels effective on September
30, 1966, pursuant to the provisions of Section 272 of the
Railway Act.
(2) The Respondents shall revise all demurrage accounts on
movements of export flour, submitted to the applicants from
September 1, 1969 and subsequently, to reflect the demurrage
charges at other than origin points that were in effect on
September 30, 1966.
(3) Respondents may file revised subsidy claims after the
Committee has determined and published compensatory
demurrage rate levels, pursuant to the provisions of Section 272
of the Railway Act.
The issue on the appeal is whether the word
"rates" in paragraph (b) of subsection 272(2) of
the Railway Act, R.S.C. 1970, c. R-2, includes
demurrage charges. Because of the nature of the
arguments it is necessary to set out section 272 in
full. It reads:
272. (1) In this section
"Eastern port" means any of the ports of Halifax, Saint John,
West Saint John and Montreal and any of the ports on the
St. Lawrence River to the east of Montreal;
"Eastern rates" means,
(a) in relation to grain, the freight rates applying on the
30th day of November 1960 to the movement of grain in
bulk for export from any inland point to an Eastern port, and
(b) in relation to flour, the freight rates applying on the 30th
day of September 1966 to the movement of flour for export
from any inland point to an Eastern port;
"flour" means flour milled from grain;
"grain" means the commodities referred to in paragraph (6) of
Order No. 121416 of the Board of Transport Commissioners
• for Canada dated the 18th day of July 1966;
"inland point" means,
(a) in relation to grain, any of the railway points along
Georgian Bay, along Lake Huron or along any waterways
directly or indirectly connecting with Lake Huron and not
being farther east than Prescott, but including Prescott, and
(b) in relation to flour, any point in Canada east of the 90th
degree of west longitude.
(2) For the purpose of encouraging the continued use of the
Eastern ports for the export of grain and flour,
(a) rates for grain moving in bulk for export to any Eastern
port from any inland point over any line of a railway
company subject to the jurisdiction of Parliament shall be
maintained at the level of rates applying on the 30th day of
November 1960 to the movement of such grain to Eastern
ports; and
(b) rates on flour moving for export to an Eastern port from
any inland point over any line of a railway company subject
to the jurisdiction of Parliament shall be maintained at the
level of rates applying on the 30th day of September 1966 to
the movement of such flour to Eastern ports.
(3) The Commission shall from time to time determine in
respect of
(a) the movement of grain in bulk for export, and
(b) the movement of flour for export,
by railway to an Eastern port from an inland point a level of
rates consistent with sections 276 and 277 and shall cause such
rates to be published in the Canada Gazette.
(4) The Governor in Council may, on the recommendation
of the Commission, authorize the Minister of Finance to pay
out of the Consolidated Revenue Fund to a railway company
under the jurisdiction of Parliament that carries at Eastern
rates grain moving in bulk for export to an Eastern port from
an inland point, or flour moving for export from an inland point
to an Eastern port, when the Eastern rates for such grain or
flour, as the case may be, are less than the rates determined
and published by the Commission under subsection (3), an
amount equal to the difference between
(a) the total amount received by the company in respect of
that year for the carriage of such grain or flour, and
(b) the total amount that the company would have received
in respect of that year had the grain or flour been carried at
the rates determined and published by the Commission under
subsection (3) instead of at the Eastern rates.
(5) Until such time as the Commission determines and
publishes a level of rates under subsection (3),
(a) the railway proportions of rates for the movement of
grain in bulk for export from an inland point to an Eastern
port that have been filed by a railway company with the
Board of Transport Commissioners for Canada in accord
ance with paragraph 2 of Order No. 103860 of that Board
dated February 23rd, 1961, and that have been approved by
that Board shall be deemed to be the rates determined and
published by the Commission under subsection (3); and
(b) the rates applying on the 30th day of September 1966
for the movement of flour for export from an inland point to
an Eastern port shall be deemed to be the rates determined
and published by the Commission under subsection (3).
The proceedings which resulted in the decision
and the order of the Committee were initiated by
an application brought by Canadian National
Millers Association, which, according to the state
ment of Agreed facts filed by the parties in the
proceedings before the Committee, represents
flour millers in Canada who ship flour for export
by rail to Eastern ports from inland points. The
statement of agreed facts indicates that Canadian
Pacific Limited, Canadian National Railway
Company, Dominion Atlantic Railway and
Quebec Central Railway Company are railway
companies subject to the jurisdiction of Parliament
which carry flour for export by rail to Eastern
ports from inland points on behalf of the members
of the Association, and that the Canadian Car
Demurrage Bureau acts as an agent of the appel
lant railways for the purpose of publishing tariffs
respecting demurrage on domestic movements of
all commodities and of ensuring that the provisions
of all demurrage tariffs are complied with.
The application of the Association to the Com
mission was made on February 4, 1970 pursuant to
section 33 of the Railway Act, R.S.C. 1952, c.
234, which was replaced by section 45 of the
National Transportation Act, and it was based on
section 329 of the Railway Act, now section 272.
What the application sought is described in the
decision of the Railway Transport Committee as
follows:
What Applicant has asked for in the present case is a
direction from the Railway Transport Committee to Respond
ents, requiring revision of applicable tariffs to reduce demur-
rage charged on flour moving for export from inland points to
Eastern ports (as those terms are defined in Section 272 of the
Railway Act) from their present levels to $5.00 per car per day,
after applicable free time allowances, $5.00 being the amount
of demurrage charged on September 30, 1966. The demurrage
charges in question are those which have arisen at destinations,
not points of origin.
Upon receipt of the application the Commission,
pursuant to section 81(1) of the National Trans
portation Act, appointed Mr. Donald J. Murphy,
one of its senior counsel, to make an inquiry into
and report upon the application. Mr. Murphy
heard the parties upon the basis of the statement
of agreed facts and reported to the Railway Trans
port Committee. After outlining the arguments of
the parties in very full detail Mr. Murphy conclud-
ed that the word "rates" in section 272 of the
Railway Act did not include demurrage charges,
and he accordingly recommended that the applica
tion be dismissed. The Committee, after receiving
written submissions from the parties in response to
Mr. Murphy's report, came to a contrary view.
The Railway Act contains in section 2 a defini
tion of "rate" that includes demurrage charges as
follows:
2....
"toll" or "rate", when used with reference to a railway,
(a) means any toll, rate, charge or allowance charged or
made either by the company, or upon or in respect of a
railway owned or operated by the company, or by any person
on behalf or under authority or consent of the company, in
connection with the carriage and transportation of passen
gers, or the carriage, shipment, transportation, care, handling
or delivery of goods, or for any service incidental to the
business of a carrier; and
(b) includes
(i) any toll, rate, charge or allowance so charged or made
in connection with rolling stock, or the use thereof, or any
instrumentality or facility of carriage, shipment or trans
portation, irrespective of ownership or of any contract,
expressed or implied, with respect to the use thereof;
(ii) any toll, rate, charge or allowance so charged or made
for furnishing passengers with beds or berths upon sleeping
cars, or for the collection, receipt, loading, unloading,
stopping over, elevation, ventilation, refrigerating, icing,
heating, switching, ferriage, cartage, storage, care, han
dling or delivery of, or in respect of, goods transported, or
in transit, or to be transported; and
(iii) any toll, rate, charge or allowance so charged or made
for the warehousing of goods, wharfage or demurrage, or
the like, or so charged or made in connection with any one
or more of the above-mentioned objects, separately or
conjointly;
The question is why that definition should not
be applied to the interpretation of the word "rates"
in section 272. It is argued by the appellants that
the meaning which should be given to that word, in
so far as demurrage is concerned, has been indicat
ed by the decision of the Supreme Court of
Canada in The North-West Line Elevators Asso
ciation v. Canadian Pacific Railway Company
[1959] S.C.R. 239, and that it finds further sup
port in the context of section 272. The respondents
contend that the North-West Line Elevators case
is not applicable, and, further, that the context of
section 272 affords no reason for not applying the
definition of "rate" in section 2 of the Act. The
first view was that preferred by Mr. Murphy; the
second is essentially the view taken by the Com
mittee. The importance assumed by the North
West Line Elevators case in relation to the issues
requires that it be considered now.
All are agreed on the general principle of inter
pretation that was affirmed by Rand J., who deliv
ered the judgment of the Court in that case, when
he said at pages 244-245:
The present definition of "toll" or "rate" in the Railway Act
appears to be comprehensive enough to extend to charges for
every service or accommodation that can be furnished in
respect of freight and passenger carriage. But in particular
applications the scope of either word will depend upon the sense
indicated by the context. This is the case whenever we are
dealing with broad and general definitions enumerative of a
number of differing applications of the same word or words.
The question is whether what was concluded on
the basis of the particular context in that case has
any application to the interpretation of the word
"rates" in section 272. That case involved as one of
its issues whether the word "rates" included
demurrage charges but the context of the word
which was held to give it a meaning that excluded
such charges despite the definition of "toll" or
"rate" in section 2(32) of the Railway Act, R.S.C.
1952, c. 234, was that provided by section 328(6)
of the Act, which read:
328....
(6) Notwithstanding anything in subsection (5), rates on
grain and flour shall, on and from the 27th day of June, 1925,
be governed by the provisions of the agreement made pursuant
to chapter 5 of the statutes of Canada 1897, but such rates
shall apply to all such traffic moving from all points on all lines
of railway west of Fort William to Fort William or Port Arthur
over all lines now or hereafter constructed by any company
subject to the jurisdiction of Parliament.
The agreement referred to in this subsection is
what is known as the Crow's Nest Pass Agree
ment. It is the provisions of this agreement that
provided the context from which Rand J. drew his
conclusion as to the meaning of the words "rates
on grain and flour" in section 328(6). His analysis
of this question is contained in the following pas
sages at pages 243-244 of the judgment:
The Crow's Nest Pass Act, c. 5, Statutes of Canada, 1897,
provides a subsidy to the Canadian Pacific Railway on certain
conditions. One was that an agreement between the Dominion
government and the company should be entered into contain
ing, among others, two covenants: first, "that a reduction shall
be made in the general rates and tolls of the Company as now
charged" upon certain classes of merchandise carried west
bound from and including Fort William to all points west on
the company's main line or to those points from any railway in
Canada owned or operated on the account of the company and
whether shipped by all rail or by lake and rail. These classes
included fruits, reduced 33 1/3 per cent., coal oil, 20 per cent.,
cordage and binder twine, agricultural implements, iron of all
kinds, wire, window glass, paper for building or roofing, felt for
roofing, paints, oils, livestock, wooden ware and household
furniture, the reduction on which was 10 per cent. The second
covenant was that on eastbound grain and flour,
... there shall be a reduction in the Company's present rates
and tolls on grain and flour from all points on its main line,
branches, or connections, west of Fort William to Fort William
and Port Arthur and all points east, of three cents per one
hundred pounds, to take effect in the following manner:—...;
and that no higher rates than such reduced rates or tolls shall
be charged after the dates mentioned on such merchandise
from the points aforesaid;
The purpose behind these two provisions is obvious; it was to
extend to the army of settlers then beginning to people the west
under a policy of broad dimensions a measure of assistance in
reducing the transportation costs of commodities in the nature
of necessities to the settlers and of what was expected to be
their primary production.
An examination of this language shows unequivocally that
what were in mind were the rates payable for transportation
strictly, "general rates and tolls", rates which were expressed in
terms of cents "per 100 pounds". These were the normal
charges for the carriage of commodities between points. In the
ordinary and uncomplicated case no other charges arise. They
have nothing to do with incidental charges to meet circum
stances not normal for which special terms are provided; they
refer to charges payable when the basic service is furnished
along with the correlative observance of the reasonable require
ments laid upon the shippers and consignees. They do not
include demurrage charges; these are not related to the weight
of the commodity; they are concerned with the unreasonable
detention of railway equipment.
The language of s. 328(6) that "rates on grain and flour shall
be governed by the provisions of the Crow's Nest Pass Act"
uses the words in the same sense, the anomalies resulting from
any other interpretation of which are too obvious to be
considered.
In 1967, by section 50 of the National Trans
portation Act, S.C. 1966-67, c. 69, Parliament
replaced section 328 of the Railway Act by a new
section 328, subsection (1) of which corresponded,
with altered wording, to the old subsection (6),
which was the subject of interpretation in the
North-West Line Elevators case. The new section
328 became section 271 of chapter R-2 of the
Revised Statutes of 1970. It reads:
271. (1) Rates on grain and flour moving from any point on
any line of railway west of Thunder Bay to Thunder Bay, over
any line of railway now or hereafter constructed by any com
pany that is subject to the jurisdiction of Parliament, shall be
governed by the provisions of the agreement made pursuant to
chapter 5 of the Statutes of Canada, 1897.
(2) Rates on grain and flour moving from any point on any
line of railway west of Thunder Bay to Vancouver or Prince
Rupert for export over any line of railway now or hereafter
constructed by any company that is subject to the jurisdiction
of Parliament shall be governed by the provisions of
paragraph 2 of General Order No. 448 of the Board of Railway
Commissioners for Canada dated Friday the 26th day of
August 1927.
(3) Rates on grain and flour moving for export from any
point west of Thunder Bay or Armstrong to Churchill over any
line of railway of any company that is subject to the jurisdiction
of Parliament shall be maintained at the level of rates applying
on the 31st day of December 1966.
(4) Notwithstanding section 3, this section is not limited or
in any manner affected by any Act of the Parliament of
Canada, or by any agreement made or entered into pursuant
thereto, whether general in application or special or relating
only to any specific railway or railways.
At the same time and by the same statutory
provision in 1967 Parliament enacted a new sec
tion 329 of the Railway Act, which became the
present section 272.
It is argued from these legislative developments
that in enacting sections 328 and 329 together in
1967 with the broadly similar purpose of maintain
ing freight rates at certain levels in order to
encourage certain public interests, Parliament
must have intended that the expression "rates on
flour moving" in section 272(2)(b) should be given
the same meaning, in so far as demurrage charges
are concerned, as was given to the words "rates on
grain and flour" in section 328(6) of the Railway
Act in the North-West Line Elevators case. This is
an attractive proposition but I find myself unable
to accede to it. It breaks down, I think, on the fact
that the words construed in that case were not the
words "rates on grain or flour" standing alone in a
provision for maintaining freight rates at certain
levels in the interest of western settlement but
rates on grain and flour to be governed by the
provisions of the Crow's Nest Pass Agreement. It
is perfectly clear, I think, from the reasons of
Rand J., which were quoted above, that his conclu
sion turned on the particular wording of those
provisions as indicating the kind of rates contem
plated. The North-West Line Elevators case no
doubt indicates the meaning that must be given to
the words "rates on grain and flour moving" in
subsection 271(1), in so far as demurrage is con
cerned, and logically perhaps to the same words in
the other subsections of section 271. But the words
"rates on flour moving" in section 272(2)(b) are
not qualified by any such reference to the provi
sions of the Crow's Nest Pass Agreement. There is
not the same context, and therefore, no basis, I
think for ascribing to Parliament an intention that
they should have the same meaning in so far as
demurrage charges are concerned as was given to
rates on grain or flour governed by the provisions
of the Crow's Nest Pass Agreement in the North
West Line Elevators case. There is in my opinion a
further circumstance which distinguishes that
case. In that case the issue was whether the rail
way was to receive any compensation at all for
demurrage. In section 272 there is provision for
financial assistance to compensate the railways for
any short-fall in revenues as a result of compliance
with section 272(2)(b). The broad similarity of
purpose must not obscure the specific differences
in the two provisions. The specific purpose of
section 272 is not that of section 271; it is, as the
opening words of subsection (2) indicate, to
encourage the continued use of the Eastern ports
for the export of grain and flour. No doubt this
purpose has its own peculiar history. Perhaps
demurrage has particular significance in connec
tion with traffic moving to the Eastern ports. In
view of the absence in section 272 of the particular
context on which the decision in the North-West
Line Elevators was based, as well as other differ
ences between the two sections, I do not think we
can assume, merely from the existence of that
decision, that Parliament intended that the words
"rates on flour moving" in section 272(2)(b)
should not include demurrage charges.
If the meaning of the word "rates" in section
272 is not determined by the decision in the
North-West Line Elevators case it is necessary to
consider, on the general principle affirmed in that
case, whether the context of the word "rates" in
section 272 makes the definition of "rate" in sec
tion 2 so as to include demurrage charges inappli
cable. I agree with the conclusion of the Railway
Transport Committee that there is nothing in the
context which obliges us to take such a view. Two
main arguments were advanced to support such a
view: the first was based on the words "moving"
and "movement" in section 272, and the second
was based on the requirement in subsection 272(3)
that the Commission determine in respect of the
movement of flour for export a level of rates
"consistent with sections 276 and 277".
The argument based on the words "moving" and
"movement" was that these words indicated that
what was contemplated were rates for the trans
portation of the flour, strictly speaking, and not for
the detention of cars beyond the free time allowed
for unloading. This argument found favour with
Mr. Murphy. The Committee's reasons for reject
ing it are reflected in the following passages from
its decision:
When flour is to move from an inland point to an Eastern
port, it does so, like any other commodity, in a railway car, and
in accordance with the terms and conditions of the contract of
carriage, which include those contained in the bill of lading. It
also does so in accordance with the tariffs in effect on Septem-
ber 30, 1966. This means that once loaded, the car will be
hauled to destination and will be placed at the point of delivery
for unloading. According to the applicable Special Arrange
ments tariff and Commodity Rate tariff, demurrage charges
will not begin to accrue until after the expiration of 10 days
from the date of placement of the car for unloading and the
transportation charges include both the hauling and placement
of the car and the 10 day period specified for unloading. During
that 10 day period the car will not be in motion.
It follows that demurrage cannot accrue except in relation to
a road haul from origin to destination, and that the tariffs
containing the line haul rates and the tariffs containing the free
time rules and the demurrage charges are inextricably linked.
As Respondents' own demurrage Rules themselves demon
strate, delay at point of origin beyond the time fixed for the
commencement of the transportation service, or road haul,
gives rise to liability for demurrage. Were it to be otherwise, at
point of origin the absurd situation would exist of a railway
company placing a car for loading with no transportation or
road haul being contemplated, all of which would be completely
contrary to its business purpose. It is equally clear from
Respondents' demurrage Rules that the transportation charge
(or freight rate) comprises not only the movement of the loaded
car from point of origin, but also the prescribed loading time,
which commences with placement or constructive placement.
It also follows that the stoppage of the car has nothing to do
with the applicability of the demurrage tariff. Since, therefore,
Section 272 of the Act must be read with Section 274, the use
of the word "movement" does not exclude demurrage from
Eastern rates.
I agree with the conclusion of the Committee
that demurrage is sufficiently related to the trans
portation of goods to be part of the rates in respect
of the movement of goods within the meaning of
section 272. The function of the words "moving"
and "movement" in section 272, in my opinion, is
to serve as part of the description of the kind of
traffic contemplated, and not as indicating the
kind of rates contemplated. I find it particularly
persuasive that section 274, to which the Commit
tee refers, includes special arrangements tariffs,
which provide for demurrage, in the tariffs "for
the carriage of goods" as follows:
274. (1) The tariffs of tolls that the company is authorized
to issue under this Act for the carriage of goods between points
on the railway are
(a) class rate tariffs;
(b) commodity rate tariffs;
(c) competitive rate tariffs; and
(d) special arrangements tariffs.
(2) A class rate is a rate applicable to a class rating to which
articles are assigned in the freight classification.
(3) A commodity rate is a rate applicable to an article
described or named in the tariff containing the rate.
(4) A competitive rate is a class or commodity rate that is
issued to meet competition.
(5) Special arrangements are charges, allowances, absorp-
tions, rules and regulations respecting demurrage, protection,
storage, switching, elevation, cartage, loading, unloading,
weighing, diversion and all other accessorial or special arrange
ments that in any way increase or decrease the charges to be
paid on any shipment or that increase or decrease the value of
the service provided by the company.
The second argument, as I understood it, was
that demurrage could not be the subject of the
determination of variable costs and compensatory
rates, under sections 276 and 277, and thus could
not have been contemplated as being included in
the word "rates" in section 272. The Committee
rejected this argument as well. It chose to express
its reasons by a quotation from Mr. Murphy's
summary of the argument before him which I
confess I find somewhat cryptic. My understand
ing, however, is that the cost of detention time,
whether free time or time for which demurrage
may be charged, must be taken into account by the
Commission in performing its functions under sec
tions 276 and 277 and that cost will be reflected in
the rates which will be determined by it to be
compensatory. Thus the reference in subsection
272(3) to sections 276 and 277 is not a reason for
concluding that demurrage is not contemplated by
the word "rates". I accept that view.
A further argument was advanced before us to
which reference was not made by the Committee.
It was based on the fact that section 274 uses the
word "rate" in its denomination and definition of
the first three kinds of freight tariff referred to but
does not use the word "rate" in the denomination
and definition of special arrangements. This cir
cumstance, although interesting, cannot in my
opinion be conclusive. The whole point of the
definition of "rate" in section 2 of the Act is that it
is to include charges that may not ordinarily be
referred to as "rates". The nomenclature employed
in section 274 cannot be a ground for displacing
this effect of the definition. Further, to attach such
an effect to the language used in section 274 would
be to exclude special arrangements tariffs from the
application of sections 276 and 277. That cannot
have been intended.
It was suggested, as a matter of policy, that
Parliament could not have intended to provide
financial assistance to maintain demurrage rates at
1966 levels since that would be a measure directly
opposed to the avowed object of encouraging the
continued use of the Eastern ports for the export of
grain and flour. I am unable to feel the force of
this argument. Inasmuch as detention beyond the
free time allowance will in some circumstances be
unavoidable and as such will be part of the total
cost of shipping flour through the Eastern ports, it
may be presumed that it can have a bearing on the
decision to resort to such shipment.
For these reasons I am of the opinion that the
Commission did not err in law and I would accord
ingly dismiss the appeal.
* * *
RYAN 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.