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Interlocutory Decisions : 2001

2001-01-24

LET-AT-R-35-2001

File No. U3570/00-81

BACKGROUND

By letter dated December 4, 2000, the Council of Canadians with Disabilities (CCD) filed an application with the Canadian Transportation Agency (Agency) seeking a final order pursuant to section 172 of the CTA with respect to rolling stock which it understood VIA Rail Canada Inc. (VIA) was negotiating to purchase from a British supplier. CCD submits that the various features of the rail cars constitute undue obstacles to the mobility of persons with disabilities. CCD indicates that its position is based on what it has learned from groups representing persons with disabilities who attended a demonstration by VIA on November 16, 2000 of the rolling stock being tested by VIA.

CCD requests that an interim order be issued on an urgent basis by the Agency pursuant to subsections 27(1) and 28(2) of the CTA to prevent VIA from entering into any agreement, or taking any further steps to exercise any option it may have possessed, to purchase more of the disputed rolling stock. CCD also requests, as part of the interim order, a prospective award of costs pursuant to section 25.1 of the CTA to inspect the rolling stock in VIA's possession, for legal representation and to receive advice from technical experts.

In its letter dated December 12, 2000, VIA indicates that the purchase of the Nightstock cars from Alstom Transport Ltd. (Alstom) was completed and that the agreement was final on December 1, 2000. Accordingly, VIA submits that there are no grounds for the Agency to act on an urgent basis. VIA also states that should the Agency wish to consider CCD's request for the issuance of an interim order, it must provide VIA with a full opportunity to raise all the issues of fact and law regarding this matter.

In response, CCD states that it intends to proceed with its complaint and is now seeking the following interim order from the Agency:

1. that VIA be directed to take no further steps in furtherance of the purchase of rolling stock from Alstom including entering into contracts for the retrofit of the Nightstock cars;
2. that VIA be directed to advise Alstom that it will not permit the delivery of the rolling stock to be commenced prior to the Agency's final decision in relation to this complaint; and,
3. an order pursuant to section 25.1 of the CTA that CCD receive payment for its legal costs, including the costs of having its representatives view the rolling stock currently in VIA's possession, and to retain the services of such expert evidence as it reasonably requires.

ISSUE

The issue to be addressed is whether the Agency should grant CCD's request for an interim order.

POSITIONS OF THE PARTIES

CCD submits that as long as VIA has not accepted delivery of the Nightstock cars, the contract between VIA and Alstom could be rescinded. In response, VIA submits that its contract with Alstom cannot be rescinded. VIA adds that an injunction would cause it enormous damages. VIA requests that should the Agency proceed further with the injunction issue, except by way of rejection, that an oral hearing be held.

VIA states that the Agency is entitled to inquire into the matter to determine whether there is an undue obstacle. VIA submits however that the Agency cannot take appropriate corrective measures until there is such a determination. VIA therefore submits that the Agency cannot make an interim order pursuant to subsection 28(2) of the CTA until such a finding has been made. VIA is of the view that the purchase and use of the Nightstock trains do not represent an obstacle to the mobility of persons with disabilities because they substantially meet the Code of Practice of Passenger Rail Accessibility and Terms and Conditions of Carriage by Rail of Persons with Disabilities (Rail Code of Practice). VIA concludes that CCD has not demonstrated to the Agency that the Nightstock cars represent an undue obstacle and thus CCD's application should be dismissed.

In addition, VIA submits that CCD has not proven urgency or met any of the tests developed by the Courts for the granting of an injunction by the Agency. VIA also submits that CCD's application is premature as the Nightstock cars have not yet been put into service, nor have they been modified for service.

CCD lists a number of areas in VIA's response where it does not provide support for its submissions or neglects to address certain issues. CCD points out that an interim order under subsection 28(2) of the CTA is a remedy that is temporary and that VIA's interpretation that the Agency must first make an undue obstacle determination before it can make an interim order under subsection 28(2) of the CTA "should not apply to interim orders under the Act".

CCD also submits that the interim order requested should follow the common law and cited the case of American Cyanamid v. Ethicon [1975] AC 396 (HL Eng.). CCD submits that the first step for the Agency in deciding whether to grant an interim order is to consider whether, with respect to its application, there is a serious issue to be tried. CCD concludes that it has satisfied this test through the evidence provided by Eric Boyd, on behalf of the Canadian Paraplegic Association, who had the opportunity to view the Nightstock cars and has provided his concerns to VIA as well as Mr. Fisher, P. Eng. who also provided his opinion on the safety and accessibility of the equipment.

CCD then considers the balance of convenience test as set out in American Cyanamid v. Ethicon and submits that if the Agency does not grant the interim order and CCD is successful with respect to its application before the Agency, the Agency has no "jurisdiction to award damages to CCD and even if it did have jurisdiction there is no financial remedy that would provide adequate compensation to CCD and more importantly the Canadians with disabilities it represents". CCD further submits that there is no evidence before the Agency that an interim order "would cause economic loss or give rise to a cause of damages against the applicant the CCD." CCD submits that the interim order should be granted in order "to preserve the status quo until such time that the Agency can make a final ruling on the merits of this application".

CCD argues, in the alternative, that if the Agency determines that it must make an undue obstacle determination prior to granting an interim order then CCD has demonstrated, through the evidence that it has presented to the Agency, that the Nightstock cars do present an undue obstacle to the mobility of persons with disabilities.

VIA submits that its Nightstock cars comply with the Rail Code of Practice. With respect to the evidence provided by Mr. Fisher in CCD's submission, VIA asserts, through its structural engineer Mr. Herman, that the Nightstock cars "meet all applicable safety standards" and that Mr. Fisher's evidence should be rejected by the Agency. VIA further submits that to be required not to retrofit the Nightstock cars will cause monetary damage to VIA. It submits that CCD has not made a case for an Agency determination of an undue obstacle. In addition, VIA argues that as the Agency has continuing jurisdiction to interpret and apply the CTA "there is no rational reason supportable at law why CCD ought to obtain the interim relief sought herein".

VIA further submits that CCD has not met the injunctive tests of either a prima facie case or a serious issue to be tried as it has not shown that an undue obstacle exists. VIA also submits that CCD has not shown that the refusal of the Agency to grant interim relief would cause CCD irreparable harm. Finally, with respect to the balance of convenience test, VIA submits that the Agency must determine which of the two parties will suffer greater harm if the interim order is granted or denied. VIA lists the factors which it submits demonstrate that the balance of convenience favours denying the request for relief. VIA submits that it will suffer tremendous harm should the Agency grant the application for interim relief while CCD has not demonstrated that it will suffer any harm if it is not granted the relief.

VIA further submits that it has not entered into any agreements for, nor does it have a schedule for the construction, modification or retrofit of the Nightstock cars.

With respect to CCD's request that it be awarded a prospective award of costs pursuant to section 25.1 of the CTA, CCD points out that it is a non-profit organization with limited financial resources. CCD also refers to Agency Decision No. LET-A-251-1997 dated September 8, 1997 where, in a similar request for costs involving another application, the Agency states:

the Agency notes the principle that costs are generally to be compensatory in nature and, as such, are to be awarded at the end of a proceeding. The Agency finds no compelling reasons to depart from this principle in this case.

CCD submits that its case represents the compelling reason for departing from this principle.

CCD states that it has already incurred several thousand dollars of legal costs because of the lack of consultation afforded to it by VIA. Without financial support, CCD submits that it may not be able to provide to the Agency such information as expert testimony and scientific studies. This could result in VIA's successful defence of CCD's application only because of its superior financial resources.

ANALYSIS AND FINDINGS

In making its findings, the Agency has considered all of the evidence submitted by the parties.

VIA has requested that the Agency permit oral argument with respect to CCD's request for interim relief. Although the Agency recognizes that CCD's request for interim relief requires careful legal analysis from both parties, the Agency is of the view that it has given ample opportunity for the parties to make submissions on the issue. The Agency is satisfied that it has sufficient evidence on file to render its decision on CCD's request for relief without having to hold a hearing.

Award of Costs

With respect to CCD's request for an award of costs pursuant to section 25.1 of the CTA, the Agency has carefully reviewed the submissions of CCD and is of the opinion that CCD has not satisfied the Agency that it should depart from the principle stated in Agency Decision No. LET-A-251-1997 dated September 8, 1997 that costs are generally compensatory in nature and are awarded at the end of a proceeding. Although the Agency is not prepared to issue an interim order on costs it will however consider the issue of costs at the conclusion of its investigation into CCD's application.

CCD has requested that the Agency direct VIA to take no further steps in furtherance of the purchase of the Nightstock cars from Alstom, including entering into contracts for the retrofit of the cars and that VIA be directed to advise Alstom that it will not permit delivery of the cars to commence prior to the Agency's final decision on the section 172 application. Subsection 28(2) of the CTA gives the Agency the authority to grant interim relief:

The Agency may, instead of making an order final in the first instance, make an interim order and reserve further directions either for an adjourned hearing of the matter or for further application.

VIA asserts that before the Agency can make an interim order under subsection 28(2) of the CTA, it must first make an undue obstacle determination. The Agency is of the opinion that such a finding need not be made before the Agency can issue an order pursuant to subsection 28(2) of the CTA. This subsection speaks to the making of an interim order to be followed by a final order. The purpose of subsection 28(2) of the CTA is to allow the Agency to issue an order pending the completion of the Agency's final determination of a complaint.

With respect to that part of CCD's application that requests an order from the Agency directing VIA not to take further steps in furtherance of the purchase of the Nightstock cars and its request that VIA be advised not to permit delivery of the cars prior to the Agency's determination of the section 172 complaint, the Agency is of the opinion that CCD has not satisfied the Agency that it should issue an order pursuant to subsection 28(2) of the CTA with respect to that specific relief requested. The Agency recognizes the importance of its mandate to eliminate undue obstacles to the mobility of persons with disabilities and is of the opinion, from its preliminary review of the evidence filed by both parties, that CCD has raised a serious issue to be considered with respect to the accessibility of the Nightstock cars. However, the Agency is of the view that the impact on VIA of having the Agency order the relief requested would cause VIA substantial harm. In reaching this conclusion, the Agency has carefully considered the economic implications of the requested relief order on VIA. On balance, the Agency is of the view that the impact of an interim order on

VIA directing it to take no further steps in the purchase of the Nightstock trains or the delivery of the cars outweighs the impact on persons with disabilities, as presented by CCD, should the Agency not issue the relief requested.

The Agency, pursuant to section 172 of the CTA may inquire into a matter in relation to which a regulation could be made under subsection 170(1) of the CTA in order to determine if there is an undue obstacle to the mobility of persons with disabilities. Upon a determination by the Agency that there is an undue obstacle, the Agency may require that appropriate corrective measures be taken.

The Agency will now continue with its investigation of the complaint filed by CCD that the Nightstock cars constitute an undue obstacle to the mobility of persons with disabilities.

The Agency recognizes that it is VIA's intention to commission these cars into service in December of this year and that there is still work to be done regarding the assembling of some of the cars. Accordingly, the Agency will deal with this application as expeditiously as possible.

However, the Agency considers it reasonable to request that VIA make a commitment to the Agency not to enter into any contracts for the construction, manufacture or retrofit of the Nightstock cars pending a final determination by the Agency on CCD's application.

VIA states in appendix 5 of its submission of January 3, 2001 that fifty-one of the cars have not been "started", although their body shells are finished, painted and are fitted with windows and doors. Twenty-four of the cars have been "started" while sixty-four of the cars are completed.

The fact that some of the Nightstock cars are not fully manufactured provides the Agency with an important and unique opportunity to consider the issue of an undue obstacle at the front end of the process. This also presents an opportunity for VIA to ensure that the equipment that it proposes to put into service meets the legislative requirements of the CTA. Throughout its submissions, VIA has emphasized its commitment to consult with the community of persons with disabilities and has made reference to its obligations under the CTA and the fact that "the Nightstock trains substantially meet the Code".

In fact, the Minister of Transport in a letter dated September 26, 2000 to Marc LeFrançois, Chairman of the Board of VIA stated that:

I would also suggest that you involve the Canadian Transportation Agency so that they can share their expert advice on the interpretation of the provisions of the Code.

VIA asserted that CCD's application is premature and that "the Nightstock cars have not yet been put into service, nor have they been modified for service". In the event that the Agency finds that the Nightstock trains constitute an undue obstacle and orders that corrective measures must be taken, the Agency is of the view that it is a this stage that changes could probably most easily and least expensively be implemented.

Further, VIA appears to contemplate the Agency's early involvement in its process of preparing the Nightstock cars for service. In its letter dated December 12, 2000 VIA states that the "issue of design, construction, scheduling and operation of VIA and its obligations to provide accessible transportation requires extensive and careful analysis. VIA will provide such an analysis on a schedule to be fixed by the CTA but cannot answer the substantial issue in the time required by the CTA".

VIA's submissions indicate that it appears to have no immediate plans to begin work on the Nightstock cars. VIA submits that "it has no schedule, written or otherwise, or entered into any agreement for the construction, modification or retrofitting of its Nightstock cars and that it is "anticipated that 24 Nightstock cars will be commissioned for use by the end of December 2001".

However, despite the absence of plans, VIA alleges, in appendix D of its January 16, 2001 submission, that harm to VIA would result from any Agency direction preventing VIA from entering into retrofit contracts:

To so enjoin VIA from retrofitting the Nightstock trains will improperly delay VIA and prevent it from commissioning the Nightstock cars as quickly as possible. Any delay will cause VIA to lose significant monies on its capital investment without corresponding revenues.

It is not clear to the Agency how a reasonable delay could cause VIA to lose significant monies. VIA has clearly indicated that it has no immediate retrofit or construction plans and that it is willing to provide an analysis on the issue of design, construction, scheduling and operation of VIA on a schedule to be fixed by the Agency.

In light of the above, the Agency is of the opinion that it is reasonable to expect that VIA will not enter into any contracts or commence any work on the Nightstock cars prior to the Agency's final determination of CCD's application.

As discussed above, the Agency is not satisfied that VIA has demonstrated the harm it will suffer should the Agency direct that VIA not retrofit or assemble the Nightstock cars pending the Agency's determination of the section 172 application. However, in light of the fact that there appears to be no immediate plans on the part of VIA to work on the Nightstock cars, there is no apparent need at this point in the proceedings for the immediate issuance of an interim order preventing VIA from entering into contracts for the retrofit of these cars. Nevertheless, the Agency is of the opinion that VIA should be required to advise the Agency well in advance of any plans or schedules it establishes to start to retrofit or construct the Nightstock cars and at that point the Agency may determine that an interim order is necessary particularly if there is an insufficient commitment from VIA to not enter into any contracts.

In continuing its investigation of CCD's application, the Agency is of the view that VIA should be required to file with the Agency and provide a copy to CCD of any and all proposals and plans for the construction or retrofit of the Nightstock cars. The Agency will shortly issue further directions as to how the Agency intends to proceed with its investigation of CCD's application.

The Agency denies CCD's request for the issuance of an interim award of costs pursuant to section 25.1 of the CTA for the reasons stated above.

The Agency denies CCD's request for the issuance of an interim order pursuant to subsection 28(2) of the CTA directing VIA to take no further steps in furtherance of the purchase of the Nightstock cars or directing that VIA be advised not to permit delivery of the cars prior to the Agency's determination of the section 172 application filed by the CCD.

With respect to CCD's request for an interim order preventing VIA from entering into contracts for the retrofit of the Nightstock cars, the Agency is staying the request for relief until it receives further information from VIA.

The Agency requests VIA to submit within five working days from the date of this Decision a commitment with the Agency that it will not to enter into any contracts for the construction, manufacture or retrofit of the Nightstock cars pending a final determination by the Agency on CCD's application.

VIA is required to provide the Agency, with a copy to CCD, of all proposals and plans for the construction or retrofit of the Nightstock cars as soon as they are available. In addition, VIA is to provide the Agency, with a copy to CCD, of its schedule for the assembly, construction and retrofit of the Nightstock cars as soon as they are available.