Decision No. 202-R-2005

April 11, 2005

April 11, 2005

APPLICATION by Hydro-Québec TransÉnergie pursuant to subsection 101(3) of the Canada Transportation Act, S.C., 1996, c. 10, for a determination by the Canadian Transportation Agency of the apportionment of the liability for the cost of a utility crossing, consisting of an underground fibre optic cable placed across and along the Montréal, Maine & Atlantic Railway Company right of way at mileage 26.38 of the Saint-Guillaume Subdivision, in the parish of Sainte-Rosalie, in the province of Quebec.

File No. R8050/213-026.38


APPLICATION

[1] On November 2, 2004, Hydro-Québec TransÉnergie (hereinafter Hydro-Québec) filed with the Canadian Transportation Agency (hereinafter the Agency) the application set out in the title.

[2] On December 2, 2004, the Montréal, Maine & Atlantic Railway Company (hereinafter MMA) requested an extension of the deadline to file its answer. In Decision No. LET-R-336-2004 dated December 9, 2004, the Agency granted MMA's request for an extension to file its answer to Hydro-Quebec's application. MMA did not file an answer.

[3] Pursuant to subsection 29(1) of the Canada Transportation Act (hereinafter the CTA), the Agency is required to make its decision no later than 120 days after the application is received unless the parties agree to an extension. In this case, the parties have agreed to an extension of the deadline until April 11, 2005.

POSITION OF HYDRO-QUÉBEC

[4] Hydro-Québec is requesting a utility crossing, consisting of an underground fibre optic cable placed across and along MMA's right of way at mileage 26.38 of the Saint-Guillaume Subdivision, in the parish of Sainte-Rosalie.

[5] In its application, Hydro-Québec states that MMA has already given its consent to the project and that the plans filed by Hydro-Québec were approved on May 5, 2003. Hydro-Québec maintains that although the parties agree on the siting, construction and maintenance of the utility crossing, they disagree on the terms of lease and/or easement, the cost of relocation or altering the facilities, and the termination provisions of the agreement.

[6] Specifically, Hydro-Québec submits that it disagrees with clauses 2, 5 and 9 hereunder, which appear in the draft contract submitted by MMA that provides for poles to be erected and for overhead or underground cables to be laid along or across the tracks, within the railway right of way.

[7] Clause 2 of the contract states as follows:

The Applicant shall pay to the Railway Company, for permission granted, the sum of TWO HUNDRED AND TWENTY-FIVE DOLLARS ($225.00) a year or portion thereof, payable in advance on the first day of APRIL of every year.

In addition to the amounts payable to the Railway Company under this Agreement, the Applicant shall pay all value-added tax, sales tax, goods and services tax or similar tax that may be levied on the said amounts under federal or provincial statute in force now or in future.

[8] Clause 5 of the contract stipulates as follows:

In the event that the Railway Company decides, or is ordered by the National Transportation Agency or any other competent authority, to make changes to its tracks, works or facilities that, in the opinion of its Divisional Manager, would require the moving or alteration of all or part of the said works, or if the moving or alteration of the said works is deemed to be necessary to protect the tracks or other property of the Railway Company, or if the Divisional Manager finds at any time that the said works were not installed or are not maintained in the manner provided in clause 4 of this Agreement, the Applicant shall move or alter the said works at its own cost and risk to the satisfaction of the Railway Company, within the period established by the Divisional Manager; if the Applicant fails to perform this work within the established period, the Railway Company shall have the right to undertake the work and the Applicant shall pay to the Railway Company all costs incurred in the performance of the said work, upon receipt of audited statements of account that set out the total costs plus the standard cost of overhead and labour at that time in effect as determined by the Railway Association of Canada, as well as handling charges at the current rate as determined by the Railway Company; all provisions of this Agreement apply to the said works at the time of and subsequent to their moving or alteration, and they are binding upon the parties.

[9] Clause 9 of the contract stipulates as follows:

This Agreement shall remain in force until it is terminated by either party in the manner hereunder provided.

Either of the parties may terminate this Agreement by notifying the other party in writing of its intention to terminate, at least three (3) months prior to the date set for termination; upon the date set out in the notice of termination, this Agreement and all rights and privileges hereunder conferred shall cease to be in effect.

If the Applicant fails to make any of the payments of the rental fee provided or to comply with the requirements, clauses and conditions provided herein, the Railway Company may immediately terminate this Agreement by notifying the other party in writing.

It is further agreed that notwithstanding the termination of this Agreement as provided herein, the Applicant shall be liable to the Railway Company for all outstanding payments due and for all undertakings made hereunder until the time of termination, as well as for the performance of all obligations imposed by this Agreement, which the Applicant shall complete either by the date of termination or subsequently.

ISSUE

[10] The issue to be addressed is what proportion of the cost of the utility crossing at mileage 26.38 of Saint-Guillaume Subdivision shall be borne by each party.

ANALYSIS AND FINDINGS

[11] In making its findings, the Agency has considered all of the evidence submitted by the parties during the pleadings.

[12] The Agency's mandate with respect to road crossings and utility crossings is set out in sections 100 and 101 of the CTA.

[13] Section 101 of the CTA reads in part as follows:

(1) An agreement, or an amendment to an agreement, relating to the construction, maintenance or apportionment of the costs of a road crossing or a utility crossing may be filed with the Agency.

(...)

(3) If a person is unsuccessful in negotiating an agreement or amendment mentioned in subsection (1), the Agency may, on application, authorize the construction of a suitable road crossing, utility crossing or related work, or specifying who shall maintain the crossing.

(4) Section 16 of the Railway Safety Act applies if a person is unsuccessful in negotiating an agreement relating to the apportionment of the costs of constructing or maintaining the road crossing or utility crossing.

[14] Section 16 of the Railway Safety Act, R.S.C. 1985, c. 32 (4th Supp.) [hereinafter the RSA], to which subsection 101(4) of the CTA refers, provides in part as follows:

(1) The proponent of a railway work, and each beneficiary of the work, may refer the apportionment of liability for the construction, alteration, operational or maintenance costs of the work to the Agency for a determination if they cannot agree on the apportionment and if no recourse is available under Part III of the Canada Transportation Act or the Railway Relocation and Crossing Act. The referral may be made either before or after construction or alteration of the work begins.

(…)

(4) Where a matter is referred to the Agency under subsection (1), the Agency shall, having regard to any grant made under section 12 or 13 in respect of that matter, the relative benefits that each person who has, or who might have, referred the matter stands to gain from the work, and to any other factor that it considers relevant, determine the proportion of the liability for construction, alteration, operational and maintenance costs to be borne by each person, and that liability shall be apportioned accordingly.

[15] The Agency notes that the parties in their pleadings referred to the annual rental fee and the cost of relocation or altering the facilities. These costs are covered under section 101 of the CTA and section 16 of the R.S.A.

[16] The Agency notes that MMA approved Plan No. CN00 40300 002 01 MK1, revised on August 2, 2002 for the laying of a conduit for a fibre optic cable and that the fibre optic cable has already been laid. The Agency further notes that Hydro-Québec and MMA have not reached an agreement on a utility crossing in view of Hydro-Québec's refusal of MMA's proposed terms respecting the lease and/or easement, the cost of relocation or altering the facilities, and the three (3) months' notice for termination of all rights and privileges, as provided in clause 9 of the draft agreement.

[17] With respect to the terms of the lease and/or easement, the Agency finds that there is no evidence that the construction and maintenance of the utility crossing would cause real or appreciable damage to MMA or its property. Without such evidence, the Agency finds that compensation in the form of the payment of fees to MMA is not warranted.

[18] Concerning the cost of relocation or altering the utility crossing facilities, the Agency is of the opinion that in the event of a disagreement between the parties concerning the apportionment of the cost of relocation or altering the facilities, either party may file an application for apportionment of liability for such costs with the Agency pursuant to subsection 101(4) of the CTA or section 16 of the RSA. The Agency is of the opinion that it would be premature at this point to make a decision on disagreements that have not yet been submitted to the Agency.

[19] With respect to the notice required to terminate the agreement, set out in clause 9, it must be pointed out that Agency decisions remain in effect until they are amended or rescinded by the Agency.

CONCLUSION

[20] Based on the above findings, the Agency hereby authorizes the construction of the Hydro-Québec utility crossing at mileage 26.38 of the Saint-Guillaume Subdivision, as shown on Plan No. CN00 40300 002 01 MK1. Moreover, in light of the fact that MMA has not proven, that the utility crossing would cause real or appreciable damage to the railway company or its property, the Agency determines that compensation in the form of an annual rental fee charged by MMA for the utility crossing is not warranted.

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