Date: 20020222
Docket: T-68-00
Neutral citation: 2002 FCT 195
BETWEEN:
WESTSHORE TERMINALS LTD.
Applicant
- and -
VANCOUVER PORT AUTHORITY
Respondent
[1] On January 18, 2000, the applicant, Westshore Terminals Ltd. (the "applicant"), commenced judicial review proceedings in respect of the Vancouver Port Authority's (the "respondent") refusal to, in effect, reduce the applicant's lease payments under a Lease Agreement entered into on March 1, 1982 (the "Lease Agreement"), on the grounds that the lease payments are unfair, unreasonable and discriminatory, pursuant to subsections 49(3) and 50(1) of the Canada Marine Act, S.C. 1998, ch. 10 (the "Act").
[2] In its Notice of Application, the applicant seeks, inter alia, the following remedies:
(a) a declaration that the VPA [Vancouver Port Authority] has failed to meet its statutory obligation to fix new fees under the lease that are fair and reasonable;
(b) a declaration that the VPA has unjustly discriminated between the applicant and others, who are users, or part of a class of users, of the Port of Vancouver, in violation of subsection 50(1) of the Act and in violation of its common law duties and obligations;
(c) a declaration that the VPA has given an undue or unreasonable preference to other users or classes of users of the Port of Vancouver over the applicant, in violation of subsection 50(1) of the Act and in violation of its common law duties and obligations;
(d) a declaration that the VPA has subjected the applicant to an undue or unreasonable disadvantage in relation to other users or classes of users of the Port of Vancouver, in violation of its statutory and common law duties and obligations; and
(e) a writ of mandamus requiring the VPA to adjust the lease rates to levels that are fair and reasonable and that do not unjustly discriminate against the applicant.
[3] By Notice of Motion dated February 16, 2000, the respondent sought an Order striking out the applicant's judicial review application on the grounds, inter alia, that the rates payable by the applicant under the Lease Agreement of March 1, 1982, were not "fees" within the meaning of the Act and, as a result, were not subject to subsections 49(3) and 50(1) of the Act, which prescribe that the "fees" fixed by a port authority must be fair and reasonable, and that the port authority should not discriminate among users or classes of users of the port. The respondent's motion was argued before Prothonotary Hargrave on March 1 and August 9, 2000. On October 13, 2000, the learned prothonotary dismissed the motion and stated at paragraph 7 of his Order by Way of Endorsement:
[7] I have also considered whether the matter ought to be struck out on the argument that rent payments under the lease are not fees within the Canada Marine Act and thus not reviewable. Issues as to the proper interpretation of legislation and serious issues of law ought not to be determined on a summary motion to strike out a pleading and here I would refer to Dumont v. Canada [1990 1 S.C.R. 279 and to Vulcan Equipment Co. v. Coats Co. (19820, 63 C.P.R. (2d) 201, adding the caveat, made in Vulcan, that there may be instances in which an argument is so futile that striking out is warranted, however that is not the situation in the present instance.
[4] On June 1, 2001, the applicant sought leave to file a motion under Rule 107(1)[1] of the Federal Court Rules, 1998. Specifically, the applicant sought leave of this Court so as to obtain answers to a number of questions, prior to the hearing on the merits of its judicial review application. On June 13, 2001, Prothonotary Hargrave gave leave to the applicant and ordered that the following questions be determined:
(i) Are the "Lease Rates" (as defined in the Notice of Application) "fees" within the meaning of the Canadian Marine Act, S.C. 1998 c. 10 (the "Act")?
(ii) Does s. 49 of the Act have any application to the Lease Rates?
(iii) Does s. 50 of the Act have any application to the Lease Rates?
(iv) If the Vancouver Port Authority ("VPA") is found to have a practical monopoly over the supply or provision of access to the Port of Vancouver, does the common law governing "practical monopolies" impose any duties upon the VPA in respect of the Lease Rates?
(v) Does this Court have any jurisdiction to grant Westshore any of the relief requested in the prayer for relief following paragraph 57 of the Notice of Application?
[5] The facts relevant to the determination of the issues can be summarized as follows. In March 1982, the applicant and the National Harbours Board (the "NHB"), the legal predecessor in interest to the respondent, entered into an agreement whereby the applicant leased two shipping berths, located on land (and related foreshore and waterlot) at Roberts Bank.
[6] Roberts Bank is a man-made island in Delta, British Columbia. It is Crown land that forms part of the Port of Vancouver. The applicant constructed and operates thereat a bulk coal loading facility where coal is received, handled, stored and loaded onto vessels.
[7] The respondent is a public authority created by the Act. It is an agent of the Crown, with the power to manage and administer the Crown land in the Port of Vancouver.
[8] The first phase of Roberts Bank, Pod 1, was constructed by the NHB in 1969, at a cost of approximately $5.5 million. The area of Pod 1, consisting of about 54 acres of reclaimed land and 14 acres of foreshore and/or waterlot, was leased to the applicant under the terms of a lease entered into prior to March 1, 1982.
[9] The Lease Agreement, entered into on March 1, 1982 for an initial term of 20 years, terminates on February 28, 2002. The applicant is entitled to two 10-year renewals for the period March 1, 2002 to February 29, 2012, and March 1, 2012 to February 28, 2022. I understand that the applicant has exercised its first 10-year right of renewal to February 29, 2012.
[10] Pursuant to the Lease Agreement, the NHB undertook to spend $48 million to expand Roberts Bank from Pod 1, occupied by the applicant, to four Pods totalling approximately 284 acres. The applicant was to occupy Pods 1 and 2, totalling approximately 130 acres. The NHB's intentions were, at that time, to lease Pods 3 and 4 to another tenant.
[11] The respondent owns and operates Deltaport, a container terminal facility which occupies Pods 3 and 4. Deltaport began operations on Pod 4 in 1993 and on Pod 3 in the year 2000. Since 1993, Terminal Systems Inc. has been operating Deltaport for the respondent under a terminal service agreement that is in effect until December 31, 2003. The applicant submits that although the respondent earns revenue from Roberts Bank and from Deltaport, it has not used any part of that revenue to contribute to the cost recovery for construction of Roberts Bank, which would reduce the rents payable by the applicant under the Lease Agreement.
[12] By reason of its expenditure of $48 million for the expansion of Roberts Bank, the NHB demanded rental rates of the applicant which would produce a return, over the life of the lease, of 16% to 18% on its capital investment. The applicant points out that in setting the rates payable under the lease, the NHB insisted that the cost recovery and return on its investment extend to Pods 3 and 4, which were not to be occupied by the applicant.
[13] The rates payable by the applicant are made up of two components. Firstly, a portion of the rent is calculated according to the tonnage of coal shipped through the applicant's terminal. This is called "participation" rent and is a charge based on a minimum annual tonnage, with a provision for an additional charge on tonnage handled over and above the minimum tonnage. The second component of the rent is the "base" rent. This charge does not fluctuate, as it is an annual land and waterlot rental charge.
[14] It is not disputed that the Lease Agreement and, a fortiori, the rates payable thereunder were freely negotiated by the applicant and the respondent.
[15] The Lease Agreement also provided that the rates were to be increased every three years, at a rate of 30% or the Consumer Price Index, whichever was greater. By 1996, the rate of increase of the base rent and of the minimum annual tonnage charge was reduced to 3% per annum, while the excess tonnage charge continued to increase at a rate of 30% every three years.
[16] The Lease Agreement was amended twice. In 1989, the respondent agreed to forego approximately $25 million in rent so as to subsidize construction by the applicant of a new coal pumper. In 1996, the respondent unilaterally agreed to a reduction in the rate of escalation in lease payments for the period 1996-2002. The respondent also agreed to waive the escalators for the year 1999.
[17] According to the applicant, the lease rates have more than tripled since March 1, 1982 and that, as of the time of the commencement of its judicial review proceedings, it was paying a sum of approximately $14.6 million annually to the respondent. By reason of the annual rate increases, the applicant is now paying to the respondent an annual sum of approximately $16 million.
[18] The respondent is entitled to review and fix the rate payable for the three-year period commencing March 1, 2002, and on every third anniversary date thereafter, until the end of the two renewal terms in 2022.
[19] The rates payable pursuant to the Lease Agreement constitute approximately 20% of the respondent's entire operating revenue. In fact, rents collected by the respondent on all of its leases (approximately 300) constitute almost 50% of the respondent's total revenue.
[20] In support of its assertion that the rates payable under the Lease Agreement are unfair, the applicant submits that although the respondent is entitled to a reasonable rate of return on its investment, the revenues now collected by the respondent are "grossly in excess of what is required to provide the VPA with a fair rate of return on the capital invested to build Roberts Bank". The applicant submits that it has paid, since 1982, a sum in excess of $175 million, which is three times the total capital costs of constructing Roberts Bank and more than six times the capital costs of constructing that portion of the property that the applicant's coal terminal actually occupies. Furthermore, according to the applicant, it has invested over $200 million of its own money for improvements at its coal terminal, including trackage, buildings and coal-loading equipment.
[21] By its judicial review proceedings, the applicant is seeking a non-scheduled review of the rent payable under the Lease Agreement on the grounds that the rent is unfair and unreasonable, and that it discriminates against the applicant. Whether the applicant is correct in its assertion is not an issue which I must decide in the context of this Rule 107(1) motion. My task herein is to provide answers to the five questions in respect of which Prothonotary Hargrave gave leave. However, before proceeding, I should set out those provisions of the Act which are relevant to the determination which I must make:
| 2. (1) The definitions in this subsection apply in this Act. "fees" includes harbour dues, berthage and wharfage, as well as duties, tolls, rates and other charges. 4. It is hereby declared that the objective of this Act is to (c) ensure that marine transportation services are organized to satisfy the needs of users and are available at a reasonable cost to the users; 5. The definitions in this section apply in this Part. "port" means the navigable waters under the jurisdiction of a port authority and the real property that the port authority manages, holds or occupies as set out in the letters patent. "user", in respect of a port, means a person that makes commercial use of, or provides services at, the port. 12. (1) A port authority set out in an item of Part 1 of the schedule is automatically continued or deemed to be incorporated under section 8 on the day on which that item comes into force and the Minister shall issue to it letters patent that set out the information required by subsection 8(2). 12. (3) The rights and obligations of a port authority referred to in subsection (1) that was, immediately before the coming into force of this subsection, a local port corporation established under the Canada Ports Corporation Act are as follows: (c) the management of the federal real property set out in the letters patent, and any rights related to the property, is conferred on the port authority; 44. (1) For the purposes of the Federal Real Property Act, the Minister has the administration of the federal real property of a port in respect of which letters patent have been issued to the port authority, other than federal real property the administration of which is under any other member of the Queen's Privy Council for Canada. 44. (2) The Minister may, in the letters patent, give to a port authority the management of any federal real property that is administered by (a) the Minister under subsection (1); or (b) any other member of the Queen's Privy Council for Canada, if the Minister has the consent of that other member. 44. (3) Where the Minister gives the management of federal real property to a port authority, the Federal Real Property Act, other than sections 12 to 14 and paragraphs 16(1)(a), (g) and (i) and (2)(g), does not apply to that property. 44. (6) A port authority may manage, occupy or hold only the real property set out in its letters patent. 45. (1) Where the Minister has given the management of federal real property to a port authority, the port authority (a) need not pay compensation for the use of that property; (b) may retain and use the revenue received in respect of that property for the purpose of operating the port; (c) shall undertake and defend any legal proceedings with respect to that property; and (d) shall discharge all obligations and liabilities with respect to that property. 45. (2) A civil, criminal or administrative action or proceeding with respect to federal real property that a port authority manages, or any property that it holds, or with respect to any act or omission occurring on the property, shall be taken by or against the port authority and not by or against the Crown. 45. (3) A port authority may, for the purpose of operating the port, lease or license any federal real property that it manages, subject to the limits in the port authority's letters patent on its authority to contract as agent for Her Majesty in right of Canada. The term of the lease or licence may not be more than the maximum term that the letters patent set out for such a lease or licence. 45. (3.1) The port authority may exercise the powers under subsection (3) to the same extent as Her Majesty could exercise those powers and may, instead of Her Majesty, execute and deliver the documents required for that purpose. 45. (4) A lease or licence of federal real property may be effected by any instrument by which real property may be leased or a licence may be granted by a private person in respect of real property under the laws in force in the province in which the property is situated. 46. (1) Subject to subsection 45(3), a port authority may not dispose of any federal real property that it manages but it may (a) without the issuance of supplementary letters patent, grant road allowances or easements, rights of way or licences for utilities, services or access; and (b) to the extent authorized in the letters patent, (i) exchange federal real property for other real property of comparable market value subject to the issuance of supplementary letters patent that describe the other real property as federal real property, and (ii) dispose of fixtures on federal real property. 46. (1.1) The port authority may exercise the powers under paragraph (1)(a) or (b) to the same extent as Her Majesty could exercise those powers and may, instead of Her Majesty, execute and deliver the documents required for that purpose. 46. (2) A port authority may dispose of any real property that it occupies or holds, other than federal real property, subject to the issuance of supplementary letters patent, and, without the issuance of supplementary letters patent, it may grant road allowances or easements, rights of way or licences for utilities, services or access. 46. (3) A grant may be effected by any instrument by which an interest in real property may be granted by a private person under the laws in force in the province in which the federal real property is situated. 48. (1) A port authority shall, within twelve months after the issuance of its letters patent, develop a detailed land-use plan that contains objectives and policies for the physical development of the real property that it manages, holds or occupies and that takes into account relevant social, economic and environmental matters and zoning by-laws that apply to neighbouring lands. 48. (2) The land-use plan may (a) prohibit the use of some or all of the real property for, or except for, certain purposes; (b) prohibit the erecting of structures or works or certain types of structures or works; and (c) subject to any regulations made under section 62, regulate the type of structures or works that may be erected. 48. (3) A land-use plan shall not have the effect of preventing (a) the use of any property existing on the day on which the land-use plan comes into force for the purpose for which it was used on that day, so long as it continues to be used for that purpose; or (b) the erecting or alteration of a structure or work that was authorized before the day on which the land-use plan comes into force if the erecting or alteration is carried out in accordance with the authorization. 48. (4) A port authority shall, at least sixty days before the coming into force of a land-use pan, have notice of the plan published in a major newspaper published or distributed in the place where the port is situated. 48. (5) The notice shall include information as to where a copy of the plan, including any related documents necessary to understand it, may be obtained and an invitation to any interested person to make representations to the port authority with respect to the proposed plan within those sixty days and to attend a public meeting at a specified time and place. 48. (6) After the port authority considers any representations made by interested persons with respect to a proposed plan, it may adopt the plan. 48. (7) The port authority shall have notice of each land-use plan that it adopts, together with notice of the place at which a copy of the plan may be obtained, published in a major newspaper published or distributed in the place where the port is situated. 48. (8) A port authority need not comply with subsections (4) to (7) in respect of a proposed land-use plan that (a) has previously been published pursuant to subsection (4), whether or not it has been changed as a result of representations made pursuant to subsection (5); or (b) makes no substantive change to an existing plan. 48. (9) Land-use plans are not regulations within the meaning of the Statutory Instruments Act. 49. (1) A port authority may fix fees to be paid in respect of (a) ships, vehicles, aircraft and persons coming into or using the port; (b) goods loaded on ships, unloaded from ships or transhipped by water within the limits of the port or moved across the port; and (c) any service provided by the port authority, or any right or privilege conferred by it, in respect of the port. 49. (2) A port authority may fix the interest rate that it charges on overdue fees. 49. (3) The fees fixed by a port authority shall be at a level that permits it to operate on a self-sustaining financial basis and shall be fair and reasonable. 49. (4) The fees and interest rate may be made binding on Her Majesty in right of Canada or a province. 49. (5) The fees fixed under paragraphs (1)(a) and (b) do not apply in respect of a Canadian warship, naval auxiliary ship or other ship under the command of the Canadian Forces, a ship of a visiting force within the meaning of the Visiting Forces Act or any other ship while it is under the command of the Royal Canadian Mounted Police. 49. (6) A fee that is in force in respect of a port on the coming into force of this section continues in force for a period ending on the earlier of the expiration of six months and the date on which it is replaced by a fee fixed under subsection (1). 50. (1) A port authority shall not unjustly discriminate among users or classes of users of the port, give an undue or unreasonable preference to any user or class of user or subject any user or class of user to an undue or unreasonable disadvantage. 50. (2) It is not unjust discrimination and it is not an undue nor an unreasonable preference or disadvantage for a port authority to differentiate among users or classes of users on the basis of the volume or value of goods shipped or on any other basis that is generally commercially accepted. 51. (1) Where a port authority proposes to fix a new fee or revise an existing fee for wharfage, berthage or harbour dues, it shall give notice of the proposal in accordance with this section and no fee shall come into force before the expiration of sixty days after the last of the notices is given. 51. (2) The notice shall (a) set out the particulars of the proposal; (b) specify that a document containing more details about the proposal may be obtained from the port authority on request; and (c) specify that persons interested in making representations in writing to the port authority about the proposal may do so by writing to the address set out in the notice. 51. (3) The port authority shall (a) have the notice published in a major newspaper published or distributed in the place where the port is situated; (b) send, by mail or by electronic means, a copy of the notice to (i) organizations whose members will, in the opinion of the port authority, be affected by the new or revised fee, and (ii) every user and other person who has, at least ten days before, notified the port authority of a desire to receive notices or announcements under this Part; and (c) post an electronic version of the notice in a location that is generally accessible to persons who have access to what is commonly referred to as the Internet. 51. (4) The notice required by this section does not apply to any fees accepted in a contract under section 53. 52. (1) Any interested person may at any time file a complaint with the Agency that there is unjust discrimination in a fee fixed under subsection 49(1), and the Agency shall consider the complaint without delay and report its findings to the port authority, and the port authority shall govern itself accordingly. 52. (2) Section 40 of the Canada Transportation Act applies, with such modifications as the circumstances require, to every report of the Agency made under subsection (1) as if the report were a decision made pursuant to that Act. 53. A port authority may agree, by a contract that the parties may agree to keep confidential, to accept fees in respect of the persons and things set out in paragraphs 49(1)(a) to (c) that are different from the fees fixed under those paragraphs. |
2. (1) Les définitions qui suivent s'appliquent à la présente loi « _droits_ » Toute forme de taxes, droits, péages, contributions ou prix. Sont inclus dans la présente définition les droits d'amarrage, les droits d'accostage et les droits de port. 4. Il est déclaré que l'objectif de la présente loi est de: c) veiller à ce que les services de transport maritime soient organisés de façon à satisfaire les besoins des utilisateurs et leur soient offerts à un coût raisonnable; 5. Les définitions qui suivent s'appliquent à la présente partie. « _port_ » L'ensemble des eaux navigables qui relèvent de la compétence d'une administration portuaire ainsi que les immeubles dont la gestion lui est confiée, qu'elle détient ou qu'elle occupe en conformité avec les lettres patentes. « _utilisateur_ » À l'égard d'un port, personne qui utilise le port à des fins commerciales ou y fournit des services. 12. (1) L'administration portuaire inscrite à un article de la partie 1 de l'annexe est automatiquement prorogée ou réputée constituée en administration portuaire à compter de la date d'entrée en vigueur de cet article comme si elle était constituée sous le régime de l'article 8, le ministre étant tenu de lui délivrer des lettres patentes dont le contenu est conforme au paragraphe 8(2). 12. (3) Les droits et obligations d'une administration portuaire visée au paragraphe (1) qui, à l'entrée en vigueur du présent paragraphe, était une société portuaire locale constituée sous le régime de la Loi sur la Société canadienne des ports sont les suivants: c) la gestion des biens immeubles fédéraux, et des droits s'y rattachant, mentionnés dans les lettres patentes est confiée à l'administration portuaire; 44. (1) Pour l'application de la Loi sur les immeubles fédéraux, le ministre a la gestion des immeubles fédéraux qui se trouvent dans le port qu'une administration portuaire exploite en vertu de ses lettres patentes, à l'exception de ceux dont la gestion est confiée à un autre membre du Conseil privé de la Reine pour le Canada. 44. (2) Le ministre peut, par lettres patentes, confier à l'administration portuaire la gestion d'un immeuble fédéral soit qui est géré par lui au titre du paragraphe (1), soit qui est géré par un membre du Conseil privé de la Reine pour le Canada, s'il a le consentement de ce membre. 44. (3) Lorsque le ministre confie la gestion d'un immeuble fédéral à une administration portuaire, la Loi sur les immeubles fédéraux, à l'exception des articles 12 à 14 et des alinéas 16(1)a), g) et i) et (2)g), ne s'applique plus à cet immeuble. 44. (6) Une administration portuaire ne peut gérer, occuper et détenir que les immeubles qui sont mentionnés dans ses lettres patentes. 45. (1) Lorsque le ministre a confié la gestion d'immeubles fédéraux à l'administration portuaire, celle-ci: a) n'est pas tenue de payer pour leur utilisation; b) peut conserver et utiliser les recettes qu'ils génèrent pour l'exploitation du port; c) est tenue d'intenter les actions en justice qui s'y rapportent et de répondre à celles qui sont intentées contre elle; d) est tenue d'exécuter toutes les obligations qui s'y rattachent. 45. (2) Toute poursuite civile, pénale ou administrative relative à un immeuble fédéral dont la gestion a été confiée à une administration portuaire ou à tout autre bien qu'elle détient -- ou à tout fait qui y survient -- doit être engagée par cette administration portuaire ou contre elle, à l'exclusion de la Couronne. 45. (3) Une administration portuaire peut, pour l'exploitation du port, louer les immeubles fédéraux qu'elle gère ou octroyer des permis à leur égard, sous réserve des limites, précisées dans les lettres patentes, quant à son pouvoir de contracter à titre de mandataire de Sa Majesté du chef du Canada et à la durée maximale de ces baux et permis. 45. (3.1) L'administration portuaire exerce les pouvoirs visés au paragraphe (3) au même titre que Sa Majesté et, à cette fin, peut établir et délivrer, au lieu de Sa Majesté, les documents requis. 45. (4) L'octroi d'un permis ou la location d'un immeuble fédéral peuvent s'effectuer par un acte qui, en vertu des lois de la province de situation de l'immeuble, peut servir à en opérer l'octroi ou la location entre sujets de droit privé. 46. (1) Sous réserve du paragraphe 45(3), une administration portuaire ne peut aliéner les immeubles fédéraux dont la gestion lui est confiée; elle peut toutefois: a) sans que des lettres patentes supplémentaires ne soient délivrées, consentir à leur égard des emprises routières ou des servitudes ou permis pour des droits de passage ou d'accès ou des services publics; b) dans la mesure où ses lettres patentes l'y autorisent: (i) les échanger contre des immeubles de valeur marchande comparable à la condition que des lettres patentes supplémentaires soient délivrées et que celles-ci fassent mention que ces derniers deviennent des immeubles fédéraux, (ii) aliéner les accessoires fixés à demeure sur ces immeubles. 46. (1.1) L'administration portuaire exerce les pouvoirs visés aux alinéas (1)a) et b) au même titre que Sa Majesté et, à cette fin, peut établir et délivrer, au lieu de Sa Majesté, les documents requis. 46. (2) Une administration portuaire peut aliéner les immeubles qu'elle occupe ou détient, exception faite des immeubles fédéraux, si des lettres patentes supplémentaires sont délivrées; elle peut toutefois -- sans que des lettres patentes supplémentaires ne soient délivrées -- consentir à leur égard des emprises routières ou des servitudes ou permis pour des droits de passage ou d'accès ou des services publics. 46. (3) Les concessions peuvent être faites par un acte qui, en vertu des lois de la province de situation de l'immeuble fédéral, peut servir à faire des concessions entre sujets de droit privé. 48. (1) Dans les douze mois suivant la délivrance de leurs lettres patentes, les administrations portuaires sont tenues d'avoir un plan détaillé d'utilisation des sols faisant état des objectifs et politiques établis pour l'aménagement physique des immeubles dont la gestion leur est confiée ou qu'elles occupent ou détiennent, compte tenu des facteurs d'ordre social, économique et environnemental applicables et des règlements de zonage qui s'appliquent aux sols avoisinants. 48. (2) Les plans d'utilisation des sols peuvent: a) interdire l'utilisation de la totalité ou d'une partie des immeubles à certaines fins ou la limiter à certaines fins déterminées; b) interdire la construction de bâtiments ou d'ouvrages ou d'un certain type de bâtiments ou d'ouvrages; c) sous réserve des règlements d'application de l'article 62, réglementer les caractéristiques des bâtiments ou ouvrages qui peuvent être construits. 48. (3) Un plan d'utilisation des sols ne peut avoir pour effet d'empêcher: a) l'utilisation d'un bien immeuble existant, dans la mesure où l'utilisation demeure celle qui en était faite le jour de l'entrée en vigueur du plan; b) la construction ou la modification d'un bâtiment ou d'un ouvrage qui a été autorisée avant cette entrée en vigueur dans la mesure où la construction ou la modification est conforme à l'autorisation. 48. Au moins soixante jours avant la date d'entrée en vigueur du plan d'utilisation des sols, l'administration portuaire est tenue d'en faire publier un avis dans un journal à grand tirage du lieu où est situé le port. 48. (5) L'avis donne le lieu où il est possible de se procurer un exemplaire du projet de plan et des documents connexes nécessaires à sa compréhension complète, et invite les intéressés à faire parvenir leurs observations sur le projet à l'administration avant l'expiration de ce délai de soixante jours et à assister à la réunion publique dont les date, heure et lieu sont également mentionnés dans l'avis. 48. (6) L'administration portuaire peut adopter le projet de plan d'utilisation des sols après avoir pris connaissance des observations qui ont pu lui être présentées. 48. (7) L'administration portuaire est tenue de faire publier dans un journal à grand tirage du lieu où est situé le port un avis de l'adoption de son plan d'utilisation des sols; l'avis donne le lieu où il est possible de se procurer un exemplaire du plan. 48. (8) L'administration portuaire n'a pas à se conformer aux paragraphes (4) à (7) à l'égard du projet de plan d'utilisation des sols qui, selon le cas: a) a déjà fait l'objet d'un avis publié en conformité avec le paragraphe (4), même si le plan a été modifié à la suite d'observations présentées conformément au paragraphe (5); b) n'apporte pas de modification de fond au plan en vigueur. 48. (9) Les plans d'utilisation des sols ne sont pas des règlements au sens de la Loi sur les textes réglementaires. 49. (1) L'administration portuaire peut fixer les droits à payer à l'égard: a) des navires, véhicules, aéronefs et personnes entrant dans le port ou en faisant usage; b) des marchandises soit déchargées de ces navires, chargées à leur bord ou transbordées par eau dans le périmètre portuaire, soit passant par le port; c) des services qu'elle fournit ou des avantages qu'elle accorde, en rapport avec l'exploitation du port. 49. (2) L'administration peut fixer le taux d'intérêt frappant les droits impayés. 49. (3) Les droits que fixe l'administration portuaire doivent lui permettre le financement autonome de ses opérations et également être équitables et raisonnables. 49. (4) Les droits et le taux d'intérêt peuvent être rendus obligatoires pour Sa Majesté du chef du Canada ou d'une province. 49. (5) Les droits prévus aux alinéas (1)a) et b) ne s'appliquent pas aux navires de guerre canadiens, aux navires auxiliaires de la marine, aux navires placés sous le commandement des Forces canadiennes, aux navires de forces étrangères présentes au Canada au sens de la Loi sur les forces étrangères présentes au Canada, ni aux navires placés sous le commandement de la Gendarmerie royale du Canada. 49. (6) Les droits en vigueur à l'égard d'un port à l'entrée en vigueur du présent article demeurent en vigueur pendant une période maximale de six mois sauf s'ils sont remplacés plus tôt. 50. (1) L'administration portuaire est tenue d'éviter la discrimination injustifiée entre les utilisateurs ou catégories d'utilisateurs, ou l'octroi d'un avantage injustifié ou déraisonnable, ou l'imposition d'un désavantage injustifié ou déraisonnable, à un utilisateur ou à une catégorie d'utilisateurs. 50. (2) Ne constitue pas une discrimination injustifiée ou un désavantage injustifié ou déraisonnable la distinction fondée sur le volume ou la valeur des marchandises transportées ou sur toute autre caractéristique généralement admise commercialement. 51. (1) L'administration portuaire donne, conformément au présent article, un préavis des droits d'amarrage, des droits d'accostage ou des droits de port qu'elle se propose de fixer ou de réviser, les droits ne pouvant entrer en vigueur avant l'expiration d'un délai de soixante jours après la dernière de ces publications. 51.(2) Le préavis fait part de tous les renseignements concernant la proposition, indique que des renseignements supplémentaires peuvent être obtenus sur demande auprès de l'administration portuaire et donne aux intéressés l'occasion de présenter leurs observations par écrit en les faisant parvenir à l'adresse y indiquée. 51. (3) Le préavis est publié dans un journal à grand tirage du lieu où est situé le port, envoyé par courrier ou par voie électronique aux organisations dont les membres, de l'avis de l'administration portuaire, seront touchés par les droits -- nouveaux ou révisés -- ainsi qu'à tout utilisateur ou toute personne ayant manifesté auprès de la société, au moins dix jours auparavant, le désir de recevoir les préavis exigés par la présente partie; il est aussi inscrit en un endroit accessible sur le réseau communément appelé Internet. 51. (4) L'obligation de préavis mentionnée au présent article ne s'applique pas aux droits prévus par un contrat conclu en vertu de l'article 53. 52. (1) Tout intéressé peut déposer auprès de l'Office une plainte portant qu'un droit fixé aux termes du paragraphe 49(1) comporte une distinction injustifiée; l'Office examine la plainte sans délai et communique ses conclusions à l'administration portuaire qui est liée par celles-ci. 52. (2) L'article 40 de la Loi sur les transports au Canada s'applique, avec les adaptations nécessaires, aux conclusions de l'Office, comme s'il s'agissait d'une décision rendue en application de cette loi. 53. L'administration portuaire peut par contrat, que les parties peuvent convenir de garder confidentiel, accepter, pour les services visés aux alinéas 49(1)a) à c), des droits différents de ceux qui sont fixés aux termes de ces alinéas. |
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[22] I now turn to questions 1 and 2:
Question #1: Are the "Lease Rates" (as defined in the Notice of Application) "fees" within the meaning of the Canadian Marine Act, S.C. 1998 c. 10 (the "Act")?
Question #2: Does s. 49 of the Act have any application to the Lease Rates?
For the reasons that follow, my answer to both of these questions is no.
[23] I begin, as I must, with the definition of "fees" in subsection 2(1) of the Act. The definition provides that " ‘fees' include harbour dues, berthage and wharfage, as well as duties, tolls, rates and other charges". The French version of the Act defines the word « droits » as follows: "Toute forme de taxes, droits, péages, contributions ou prix. Sont inclus dans la présente définition les droits d'amarrage, les droits d'accostage et les droits de port."
[24] The applicant submits that the word "fees" should be given its plain and ordinary meaning which, it submits, includes lease rates. According to the applicant, the words "and other charges" are broad enough to include rent payments. The applicant further submits that Parliament's intention was to include in the word "fees" all possible sources of revenue available to a port authority, including the lease rates.
[25] The applicant places great reliance on the words "and other charges" in support of its argument that "fees" include the lease rates. However, as the respondent points out, the word "include" is not open-ended. Ejusdem generis, which Black's Law Dictionary, 7th Edition, West Group, 1999, p. 535, defines as "a canon of construction that when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed", is relevant to the interpretation of the word "fees".
[26] It is clear, in my view, that Parliament did not intend to limit "fees" to those items specifically enumerated in the definition. The question then is whether the lease rates can be included in the definition. In my view, they cannot. There is, no doubt, a common feature between the items enumerated in the definition, in that they all constitute charges which are traditionally fixed by a port authority, usually through a tariff or other similar document, for services provided to those who use the port.
[27] For example, wharfage is a charge payable for moving goods across a wharf. As to berthage, it is a charge payable by a ship for the right to tie up alongside a berth. Harbour dues are charges payable for the right to enter a harbour. All of these charges are not, as a general rule, negotiated between the port authority and its users. They are "imposed" by way of a tariff published by the port authority, and the users of the port have no say in the establishment of these charges.
[28] In my view, the rates payable by the applicant under the Lease Agreement have nothing in common with the items enumerated in subsection 2(1) of the Act. Further, unlike the enumerated items, the lease rates payable by the applicant to the respondent were freely negotiated, and not unilaterally imposed by the port authority.
[29] If I were to stop my inquiry here, I would have no hesitation in concluding that "fees" do not include lease rates. I also find support for this view in the French version of the Act. The word "droits", as defined in subsection 2(1), makes it even clearer that lease payments are not included. However, I am bound to examine other relevant sections of the statute in order to determine Parliament's true intention.
[30] Sections 44 to 48 of the Act come under the heading of "Property", while sections 49 to 53 come under the heading of "Fees". Thus, Parliament appears to have made a distinction between a port authority's power to lease property and its power to fix "fees" under paragraphs 49(1)(a), (b) and (c) in regard to the following:
(a) ships, vehicles, aircraft and persons coming into or using the port;
(b) goods loaded on ships, unloaded from ships or transhipped by water within the limits of the port or moved across the port; and
(c) any service provided by the port authority, or any right or privilege conferred by it, in respect of the port.
[31] A port authority's power to manage federal real property derives from the letters patent issued to it by the Minister. Subsection 44(6) of the Act provides that "a port authority may manage, occupy or hold only the real property set out in its letters patent". Paragraph 45(1)(b) provides that the port authority may keep the revenues received in respect of the property under its management and use those revenues to operate the port. Subsection 45(3) allows a port authority to lease any federal real property under its management, but leases are not to exceed the maximum term prescribed in the letters patent.
[32] The Act does not place any restriction on the port authority with respect to the amount of rent which it may collect under the negotiated leases and no evidence was adduced with respect to any restriction which might have been imposed in the letters patent.
[33] Sections 49 to 53 of the Act, on the other hand, do not, in my view, have any bearing on leases entered into by a port authority. Firstly, it is clear upon a reading of subsection 49(1) that the "fees" which are dealt with in those sections are of a completely different nature than the leases which might be entered into by the port authority pursuant to subsection 45(3). Under subsection 49(1), the port authority is given the power to fix "fees" in respect of the matters which are set out therein at pargraphs 49(1)(a) through (c). In respect of those fees which it may have fixed, the port authority may also fix the interest rates on overdue fees.
[34] Subsection 49(3) provides that a port authority must fix fees at a level which will allow it to operate "on a self-sustaining financial basis" and that those fees must be "fair and reasonable". Further, subsection 50(1) provides that a port authority shall not discriminate among its users or classes of users, or give an undue or unreasonable preference to any user or class of users. However, subsection 50(2) makes it clear that differentiation among users or classes of users by reason of the volume or value of goods shipped, or on any other basis "that is commercially acceptable" does not constitute unjust discrimination or undue or unreasonable preference. As to subsection 51(1), it provides that when a port authority intends to fix a new fee or revise an existing fee for wharfage, berthage or harbour dues, notice thereof must be given in accordance with subsections 50(2), (3) and (4), and that the new fee will not come into force before 60 days have expired after the last of the notices is given.
[35] Finally, subsection 52(1) provides that any interested person may file a complaint with the Canadian Transportation Agency on the grounds that a fee fixed by the port authority under subsection 49(1) constitutes unjust discrimination.
[36] In my view, the "fees" which constitute the subject matter of sections 49 to 53 of the Act do not include the lease payments made under the Lease Agreement. Clearly, paragraphs 49(1)(a), (b) and (c) cannot, in any way, be connected to freely-negotiated leases. I agree entirely with Mr. Kirkham, counsel for the respondent, that sections 44 to 48 of the Act, coupled with the letters patent issued by the Minister, constitute a complete code governing a port authority's power with respect to the leasing of federal property in the port under the authority's jurisdiction.
[37] I cannot agree with the applicant's argument that the base rent paid by the applicant to the respondent "falls squarely within the wording of subsections 49(1) and (2) of the Act". In my view, the rent is not being paid in respect of "any right or privilege conferred by [the respondent] in respect of the port [of Vancouver]". Rather, the base rent is being paid by the applicant to the respondent pursuant to the terms and conditions of the Lease Agreement entered into on March 1, 1982. Again, I wish to point out that it is clear that under subsection 49(1), the "fees" are fixed by the port authority. The port authority has no obligation to discuss or negotiate the fees prior to fixing them. Subsection 49(3) requires fairness and reasonableness only in respect of those "fees" fixed by the port authority. Fairness and reasonableness are not required, in my view, either with respect to payments that are negotiated or with respect to lease payments made under freely-negotiated lease agreements.
[38] A considerable portion of its total revenue comes from the leases negotiated by the respondent with respect to federal real property in the Port of Vancouver. I suspect that this is also the case with all of the other port authorities in Canada and, consequently, that information must have been known to Parliament when it enacted the Act. Had it been Parliament's intention to include lease payments in the definition of "fees", I have no doubt whatsoever that Parliament would have expressly stated its intention. In my view, Parliament's silence can only mean that it did not intend to include lease payments in the definition of "fees".
[39] Both sides made arguments concerning section 53 of the Act, which reads as follows:
53. A port authority may agree, by a contract that the parties may agree to keep confidential, to accept fees in respect of the persons and things set out in paragraphs 49(1)(a) to (c) that are different from the fees fixed under those paragraphs.
[40] In my view, section 53 is of no help to the applicant, since it clearly has application only in respect of the fees which the port authority has the power to fix under subsection 49(1). Since I have come to the conclusion that the lease payments are not "fees", I need not further consider section 53.
[41] With respect to the Act's predecessor statutes, the National Harbours Act, 1936, and R.S.C. 1970, and the Canada Ports Corporation Act, R.S.C. 1985, c. C-9, on which the applicant relies for its view of the Act, I agree with the respondent that the former statutes demonstrate that "rents" and "fees" have always been separately regulated. "Fees" for the use of port property were not, under those statutes, rents under leases of land in the port. In my view, a close examination of the predecessor statutes supports the interpretation of the Act which I favour.
[42] For these reasons, I conclude that questions 1 and 2 must be answered in the negative.
[43] I now turn to the third question:
Question #3: Does s. 50 of the Act have any application to the Lease Rates?
[44] Subsections 50(1) and (2) of the Act read as follows:
50. (1) A port authority shall not unjustly discriminate among users or classes of users of the port, give an undue or unreasonable preference to any user or class of user or subject any user or class of user to an undue or unreasonable disadvantage.
50. (2) It is not unjust discrimination and it is not an undue nor an unreasonable preference or disadvantage for a port authority to differentiate among users or classes of users on the basis of the volume or value of goods shipped or on any other basis that is generally commercially accepted.
[45] In my view, the answer to this question is, once again, no.
[46] Firstly, Mr. Carr-Harris, for the applicant, argued that the application of subsection 50(1) was not limited to "fees". I do not agree. Even though the subsection makes no reference to "fees", it can only be interpreted as applying to the subject matter of sections 49 to 53, i.e. the "fees" fixed by the port authority under subsection 49(1).
[47] Subsection 50(1) must be read with subsection 52(1), which provides that an interested person may file a complaint with the Canadian Transportation Agency on the grounds that a fee fixed by a port authority under subsection 49(1) is discriminatory. It is clear that the discrimination in regard to which a person may file a complaint is discrimination in regard to the fees fixed by a port authority under subsection 49(1). The wording of subsection 52(1) confirms my view that subsection 50(1) only applies to "fees" which have been fixed by the port authority.
[48] As I am of the view that the rents payable by the applicant under the Lease Agreement are not "fees", I can only conclude that section 50 does not apply to the lease rates.
[49] Mr. Kirkham argued that applying section 50 to negotiated rental rates would be "impractical". I agree entirely with him that doing so would lead to strange results. At paragraphs 108 to 110 of his Memorandum, Mr. Kirkham makes the following submissions:
108. Also, to apply s. 50 to negotiated rental rates is impractical. Times change. It may be that some particular businesses may fall on hard times and be unable to pay lease rates previously agreed to. A port authority should be free to renegotiate with any tenant if it wishes to do so. If Westshore's argument is correct, then any such negotiation, leading to a lower rate for one tenant, would immediately be discriminatory against all others, and offend s. 50, or would establish a basis to say that other leases, not re-negotiated, had become unfair and unreasonable because of concessions granted to an individual tenant.
109. Similarly a port authority should be free to enter into a new lease at the existing market rate. Given that market rates change, Westshore's argument is that the VPA must refix every rate for every tenant in accordance with the "new" rate. This is completely impractical.
110. Westshore's entire argument under s. 50 is premised upon the proposition that a port authority is a "public practical monopoly" like a utility, and is therefore restricted to a fair rate of return, which cannot vary from customer to customer. The argument under s. 50 closely tracks the common law monopoly argument (Question 4).
[50] It goes without saying that even if impractical, I would not hesitate to apply section 50 to negotiated rental rates if the statute could bear that interpretation. However, as I have made perfectly clear, it is my view that the statute cannot be so interpreted.
[51] I am, therefore, of the view that the third question must be answered by a no.
[52] I now turn to the fourth question:
Question #4: If the Vancouver Port Authority ("VPA") is found to have a practical monopoly over the supply or provision of access to the Port of Vancouver, does the common law governing "practical monopolies" impose any duties upon the VPA in respect of the Lease Rates?
[53] For the purposes of this motion, the parties have assumed that the respondent holds the position of a practical monopoly, as that phrase is defined at common law. Thus, the question which I must answer is whether the common law governing "practical monopolies" imposes any duties upon the respondent in respect of the lease rates.
[54] The common law principle, on which the applicant relies, is as described in Chastain v. British Columbia Hydro and Power Authority (1972), 32 D.L.R. (3d) 443 (B.C.S.C.), where at page 454, the Court stated:
The obligation of a public utility or other body having a practical monopoly on the supply of a particular commodity or service of fundamental importance to the public has long been clear. It is to supply its product to all who seek it for a reasonable price and without unreasonable discrimination between those who are similarly situated or who fall into one class of consumers.
[55] The applicant's argument on this point is found at paragraphs 111 to 114 of its Memorandum of Fact and Law:
111. If, despite the arguments set out above [to the effect that the lease rates are "fees" within the meaning of sections 49 and 50 of the Act], it is determined that the Lease Rates are not "fees" under the Act and, therefore, that they are not covered by the requirement of "fairness and reasonableness" set out in s. 49(3) of the Act; and, if it is further determined that the more general prohibition against unjust discrimination contained in s. 50 of the Act does not apply to the Lease or to any other agreement signed by a port authority in connection with its public duty to manage and administer Crown land in Canada's ports; then, Westshore submits that the common law duties and obligations governing practical monopolies must apply to the VPA. Absent express statutory language to the contrary, Westshore submits that the VPA is required to provide access to port property a nd services to all who seek them for a reasonable price and without unreasonable discrimination between those who are similarly situated or who fall into one class of consumers.
112. The VPA's fee structure is unfair if it generates more revenue than is required to cover its costs and provide a fair return on the value of its land and equipment. Fair tolls vary with the times, and the fact that Westshore contracted to pay higher tolls at an earlier date is not determinative. If the Court finds that the VPA's rate structure is unfair, then Westshore is entitled to a remedy.
113. If there is a distinction between the fees that the VPA charges Westshore and those that it charges to Westshore's closest competitor, Neptune (not to mention other users of port land like TSI), then the VPA would have to show some rational or relevant basis for this discrimination. If it cannot, then Westshore is entitled to a remedy. The VPA is not entitled to contract out of its legal duties.
114. Accordingly, Westshore submits that the common law governing practical monopolies does impose duties upon the VPA in respect of the Lease Rates.
[56] I note, as was pointed out by the respondent, that no court decision has been found where it was held that a lease of real property was subject to the common law monopoly rules. I also note that the contract at issue in Chastain, supra, was a contract of adhesion and that, consequently, the customers of B.C. Hydro had no choice. If they wished to receive electricity, they had to agree to the terms and conditions "imposed" by B.C. Hydro. In the case at bar, the applicant has not asserted that it had no choice. The factual situation herein is entirely different from that which normally prevails when a utility is offering services to those who wish to obtain these services.
[57] The respondent, with respect to the leasing of Crown land in the Port of Vancouver, acts as agent for the Crown. As there is no evidence nor authority suggesting that the Crown is subject to the common law monopoly rules, I must conclude that the respondent, as agent for the Crown, is not subject to the common law monopoly principles, when leasing Crown land.
[58] In any event, I am of the view that if there was a common law obligation imposed on port authorities, then that duty has been codified by the enactment of sections 49 and 50 of the Act. As those sections, in my view, do not apply to payments made under the Lease Agreement, that is the end of the matter.
[59] The answer, therefore, to question 4, is no.
[60] I now turn to the fifth and last question:
Question #5: Does this Court have any jurisdiction to grant Westshore any of the relief requested in the prayer for relief following paragraph 57 of the Notice of Application?
[61] Firstly, I note that for the purposes of the applicant's judicial review application before the Trial Division of this Court, the respondent accepts that it is a federal board or commission within the meaning of section 18.1 of the Federal Court Act. The respondent has indicated that it reserves its right to raise that specific issue on any appeal to the Federal Court of Appeal or to the Supreme Court of Canada.
[62] The applicant submits, and the Federal Court of Appeal has so held, that the Court's power to review governmental conduct is not limited to a "decision or order" of a federal tribunal. The Court's power extends to "any matter in respect of which a remedy may be available under section 18 of the Federal Court Act". Thus, declarations or mandamus are available, even though no specific order or decision is at issue [see. Krause v. Canada, [1999] 2 F.C. 476].
[63] In the present matter, the applicant has commenced judicial review proceedings following the respondent's refusal or failure to modify its base rent and tonnage charge. Specifically, the applicant, as I have already indicated, takes the position that the rates payable under the Lease Agreement are unfair, unreasonable and discriminatory. In challenging the respondent's failure to, in effect, reduce the lease rates, the applicant is relying on sections 49 and 50 of the Act, and is also relying on the common law principles governing the conduct of public utilities and other bodies which have a "practical monopoly" over the supply of a particular commodity or service.
[64] In my view, it cannot be seriously argued that this Court is without jurisdiction to grant the applicant relief in appropriate circumstances. If the lease rates are "fees" within the meaning of the Act, then this Court certainly has the jurisdiction to provide a remedy to the applicant. As to what the appropriate remedy is, I need not decide, nor discuss any further.
[65] I note that in paragraph 133 of its Memorandum of Fact and Law, the respondent takes the position that the issue herein is not a question of jurisdiction, but rather "it is a question of the appropriate relief to be granted by the Court in the exercise of its discretion".
[66] If this Court were to find that the respondent either exceeded its jurisdiction or made a decision based on irrelevant or improper considerations, then a remedy would be provided to the applicant. Again, as I have just indicated, I do not have to decide that issue at the present time.
[67] My answer, therefore, to the question is a qualified yes. This Court does have jurisdiction to grant relief to the applicant, if it is able to satisfy this Court that there are sufficient grounds for this Court to intervene. In that regard, I refer specifically to paragraph 18.1(4) of the Federal Court Act.
[68] For these reasons, an Order will be issued answering the five questions as follows:
Question #1: Are the "Lease Rates" (as defined in the Notice of Application) "fees" within the meaning of the Canadian Marine Act, S.C. 1998 c. 10 (the "Act")? - NO.
Question #2: Does s. 49 of the Act have any application to the Lease Rates? - NO.
Question #3: Does s. 50 of the Act have any application to the Lease Rates? - NO.
Question #4: If the Vancouver Port Authority ("VPA") is found to have a practical monopoly over the supply or provision of access to the Port of Vancouver, does the common law governing "practical monopolies" impose any duties upon the VPA in respect of the Lease Rates? - NO.
Question #5: Does this Court have any jurisdiction to grant Westshore any of the relief requested in the prayer for relief following paragraph 57 of the Notice of Application? - YES, AS QUALIFIED BY THE REASONS FOR ORDER.
[69] I invite the parties to contact me through the Registry, so as to fix a date for arguments on the issue of costs.
Marc Nadon
JUDGE
O T T A W A, Ontario
February 22, 2002
[1] Rule 107(1) reads as follows:
107. (1) The Court may, at any time, order the trial of an issue or that issues in a proceeding be determined separately.