Decision No. 213-R-2015

INTRODUCTION

[1] The City of Surrey (City) applied to the Canadian Transportation Agency (Agency) for authority to construct and maintain a storm water pipe (storm sewer) and improve a pre-existing drainage ditch (rock-lined ditch), through and within the right-of-way of the BNSF Railway Company (BNSF), in the vicinity of mileage 126.26 of the Westminster Subdivision, in the city of Surrey, in the province of British Columbia.

BACKGROUND

[2] In 1997, due to a steep gradient on BNSFʼs railway lands, described as PID 015-320-154 and PID 013-967-894 (railway lands), the City erected an enclosed storm sewer that extended through the railway lands and discharged into a ditch adjacent to the railway line (pre-existing storm sewer). The pre-existing storm sewer conveyed storm water down the steep slope, thereby reducing natural slope erosion which contributes to natural slope instability.

[3] In 2011, a landslide destroyed the pre-existing storm sewer on the railway lands, which resulted in the alignment, through the railway lands, being no longer suitable.

[4] Following the landslide, and with the verbal consent of BNSF, the City installed a storm sewer and improved the rock-lined ditch, located on, over, through and within the railway lands. Together, the storm sewer and rock-lined ditch constitute the utility crossing that forms the basis of this application.

[5] The storm sewer, located within an existing natural gulley, serves as a storm water outfall for a city catchment area of approximately 3.6 hectares. It discharges storm water into the rock‑lined ditch, which is located parallel to the railway tracks. The storm water then flows through the rock-lined ditch and through a concrete culvert crossing (concrete culvert) under the railway tracks and eventually discharges into Boundary Bay. The rock-lined ditch and concrete culvert also collect and convey surface water from BNSFʼs railway lands into Boundary Bay and are part of BNSF’s drainage system.

[6] BNSF constructed and is maintaining the concrete culvert. The storm sewer is a continuous 300‑millimetre pipe with a total length of approximately 87 metres and approximately 60 metres are on the railway lands.

[7] The City and BNSF agree that the storm sewer and rock-lined ditch constitute a utility crossing as defined in section 100 of the Canada Transportation Act (CTA). However, they have been unable to reach an agreement regarding the construction and maintenance of the utility crossing.

[8] In a letter dated April 1, 2015, Transport Canada states that its review is now complete and it does not have any safety concerns at this time with respect to the construction of the utility crossing, based on the information received.

ISSUES

[9] Should the Agency authorize the utility crossing and, if so, what terms and conditions, if any, should be included?

[10] In light of the fact that the utility crossing is already constructed and that the parties have agreed on the location, design and method of construction, the specific issues to be determined by the Agency are as follows:

• Duration;
• Compensation;
• Construction and maintenance costs;
• Liability; and,
• Notice and flagging.

THE LAW

[11] Subsection 101(3) of the CTA states:

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.

ANALYSIS AND FINDINGS

Agreement of the parties and section 101 of the CTA

Position of the City

[12] The City submits that following the installation of the storm sewer, it undertook an effort to identify potential alternative alignments for a storm water sewer system to replace the storm sewer. While an alternative design and alignment was developed and was acceptable to BNSF, subsequent evidence of bank movement became apparent, making the alternative design and alignment no longer viable as it was determined that it posed significantly more risk of slope failure as compared to the design and alignment of the storm sewer, the rock-lined ditch and the concrete culvert.

[13] According to the City, BNSF and itself agreed on the location, design and method of construction of the storm sewer and rock-lined ditch but have been unable to agree on other terms of the utility crossing agreement.

[14] The City indicates that the construction and maintenance costs of the storm sewer and rock‑lined ditch have been and will continue to be assumed by the City. It is the City’s position that BNSF should continue to be responsible to maintain the concrete culvert.

[15] The City states that it sought to come to an agreement with BNSF for the construction and maintenance of the storm sewer and rock-lined ditch. The City points out that after months of repeated requests, it received a proposed form of agreement from BNSF, but it objects to many of the terms proposed by BNSF.

[16] The City is therefore seeking an order authorizing it to construct and maintain, at its expense, the storm sewer and rock-lined ditch on, over, through and within the railway lands, and such further and other relief that the City may request and that the Agency deems just.

Position of BNSF

[17] BNSF accepts, generally, what the City states in its application, subject to the specific matters set out below.

[18] According to BNSF, the reason for the storm water outfall is that the City has failed to adopt and implement an integrated storm water management plan (ISWMP).

[19] BNSF submits that a party in the role of “person” in subsection 101(3) of the CTA must be a party that or who shows a need, not simply a desire, for an authorization from the Agency, a need premised, at least in part, on showing that other (reasonable) alternatives are not available to that party. BNSF argues that this is reflected by the use of the word “may” in that subsection.

[20] According to BNSF, the City has its own legislative jurisdictions and powers, including the power to levy taxes and raise the funds necessary to develop and construct the requisite storm water management infrastructure that would eliminate the need for this (or any other) storm water outfall system. BNSF contends that the City, for whatever reason, has not done so and has elected to pursue the option available under subsection 101(3) of the CTA, on the basis of expediency. BNSF states that the process established by that subsection is not intended to provide authorizations merely for the asking.

[21] BNSF alleges that such applications should not be granted as a matter of course particularly where, as in this case, the applicant is a Municipality and has a number of alternative options open to it, apart from crossing railway lands.

Reply of the City

[22] The City notes that BNSF has “generally” accepted the City’s application.

[23] The City replies that the area where the storm sewer is located is part of an ISWMP that was commissioned in 2012. Moreover, the City argues that whether that ISWMP has or has not been completed and implemented is irrelevant. The City states that it is really a question of alternatives and, based on its assessment, there is no alternative to the storm sewer.

[24] The City submits that there is a discretion in subsection 101(3) of the CTA for the Agency to authorize the crossing but there is no basis upon which the exercise of that discretion must be limited to crossings that are needed as part of an ISWMP. According to the City, the approval of the crossing should be based on its own merits and whether it is appropriate in the circumstances. The City states that in the case of an unstable elevation in a moist climate, the merits of the crossing speak for themselves.

[25] The City reiterates that the storm water infrastructure at issue is already in place and has been constructed entirely at the expense of the City which intends to repair and maintain it in the future at its own expense.

[26] The City states that it has spent a considerable amount of time working with BNSF to develop the solution that has been put forward. The City submits that the facts clearly establish that there are no alternatives and that the storm sewer is located within an existing natural gulley that, prior to 1994, conveyed water from the surrounding land to Boundary Bay. The City adds that the railway lands run continuously along the base of the catchment area and there are no alternative alignments for storm water to drain to Boundary Bay without crossing railway lands.

Analysis

[27] In light of the parties’ agreement, the Agency finds that this application is in relation to a utility crossing as defined in section 100 of the CTA. The Agency also finds that the location, design and method of construction of the utility crossing have been agreed upon by the parties.

[28] As per subsection 101(3) of the CTA, if the parties are unsuccessful in negotiating an agreement relating to the construction, maintenance or apportionment of the costs of a utility crossing, the Agency may, on application, authorize the construction of a suitable utility crossing.

[29] The Agency notes that in 2011, with the knowledge and consent of BNSF, and on an emergency basis, the City installed the storm sewer and improved the rock-lined ditch. However, both parties acknowledge that, to date, they have been unable to reach an agreement regarding the construction and maintenance of the storm sewer and rock-lined ditch.

[30] Accordingly, the Agency accepts that the parties have been unsuccessful in negotiating an agreement with respect to the proposed crossing.

[31] Furthermore, BNSF argues that section 101 of the CTA is not applicable in this case as there are alternatives that would not involve crossing railway lands, and that no need for the crossing has been demonstrated. The City asserts that it worked with BNSF to develop a solution and that there are no alternatives.

[32] BNSF also questions the Cityʼs application made pursuant to subsection 101(3) of the CTA on the basis that other legislative jurisdiction is available. The Agency is of the opinion that section 101 of the CTA, as worded, does not restrict the application for a utility crossing only to instances where no other legislative jurisdiction is available. Rather, section 101 is accessible to a person, such as the City, who is unsuccessful in negotiating an agreement relating to the construction, maintenance or apportionment of costs of a utility crossing. On application, the Agency may authorize the construction of a suitable crossing.

[33] Therefore, the Agency will determine the issues in dispute between the parties.

Duration

[34] The City seeks a perpetual order, which may only be varied by order of the Agency or by agreement of both parties.

[35] BNSF indicates that it has removed this clause from the draft agreement.

[36] The Agency notes that a decision issued by the Agency authorizing the construction of a utility crossing at a specific location remains in effect until such time as the decision is amended or rescinded by the Agency or its successor.

Compensation

[37] The City argues that BNSF should not be awarded any compensation as the storm sewer and rock-lined ditch have no negative impact on BNSF’s railway operations or right-of-way and, in fact, are a benefit to BNSF.

[38] BNSF did not respond to the Cityʼs submission.

[39] With respect to compensation, the Agency notes that BNSF did not respond to this issue. In Decision No. 93-R-1995, the National Transportation Agency recognized, as stated in Order No. 1989-R-296, that:

[…] where private crossing agreements are entered into with a railway company, provision is often made for the payment by the licensee of compensation to the railway company in the form of annual or documentation fees. However, if the right to cross is established by the exercise of a statutory discretion, the policy of the Agency and its predecessors has been not to provide for compensation where a mere easement is created without any real or appreciable injury or damage to the railway company or its property.

[40] In that same Decision, the National Transportation Agency recognized that often, when utility companies and railway companies enter into individual or master agreements, the railway company is compensated for a crossing of its right-of-way. When the parties negotiate in good faith, agreements can usually be reached to the mutual benefit of both parties; the railway company benefits by receiving compensation for the utility crossing and both parties save substantial time and expenses.

[41] However, when an individual agreement cannot be reached and an application is made to the Agency, the Agencyʼs practice has been to not require any compensation in cases where no damage to the railway company or its land has been demonstrated. The fact that BNSF did not respond to this issue further supports the absence of negative impact on the railway company.

[42] The Agency notes that these principles have been applied consistently by the Agency and its predecessors in rendering decisions concerning compensation for utility crossings. The Agency finds that, as there is nothing in this application that would set it apart from previous applications, there is no reason to deviate from these principles.

[43] Therefore, in applying past principles to the facts of this case, the Agency determines that, as there is no evidence that there will be any real or appreciable damage to BNSFʼs lands as a result of the construction or maintenance of the utility crossing at this location, compensation to BNSF is not warranted.

Construction and maintenance costs

[44] The City indicates that the construction and maintenance costs of the storm sewer and rock‑lined ditch have been and will continue to be assumed by the City. It is the City’s position that BNSF should continue to be responsible to maintain the concrete culvert, which, as pointed out by the City, does not form part of this application.

[45] BNSF states that the Agency usually directs, in part, that it is the proponent of the crossing who pays the costs and expenses arising from or related to the presence, construction, operation or maintenance of the crossing. BNSF submits that there is no reason in the circumstances for BNSF to be out-of-pocket at all as a result of the Cityʼs desire to put in or refurbish an existing crossing.

[46] Therefore, the costs of construction and maintenance of the storm sewer and rock-lined ditch shall be assumed by the City.

[47] As previously noted, the concrete culvert does not form part of the application and, therefore, the Agency makes no determination with respect to this matter.

Liability

[48] The City submits that liability provisions should not be imposed on the City, and if they are, they should be in accordance with previous Agency decisions, but subject to limitations and immunities available to the City under any applicable statute or common law including, but not limited to, section 288 of the Local Government Act, R.S.B.C., 1996, c. 323, as amended (Local Government Act).

[49] Moreover, the City relies on British Columbia v. Vancouver (City), 2005 BCSC 747, Goepel, J., as it seeks to have preserved in its agreement with BNSF the protection that it is afforded by virtue of section 288 of the Local Government Act which provides that a Municipality is not liable in any action based on nuisance, or on the rule in Rylands v. Fletcher (1868), L.R. 3 H.L. 330 if the damages arise, directly or indirectly, out of the breakdown or malfunction of a drainage facility or system.

[50] BNSF asserts that there are no general limitations or immunities available to a Municipality, and it proposes that the same form of indemnity language be imposed on the parties, as in Decision No. 66-R-2011 and Decision No. 151-R-2013.

[51] BNSF argues that the Agency should not make an order to the effect that the City is entitled to “[…] the limitations and immunities available to the City under applicable statutes and common law, including, but not limited to section 288 of the Local Government Act […]” According to BNSF, this is something to be determined by the courts in the future should the need to do so arise; in turn, the Agency should not attempt to prejudge any issue of that nature.

[52] The City replies that section 288 of the Local Government Act does not “interfere with the scope and application” of the CTA. It is simply open to the Agency by virtue of the discretion afforded to it by subsection 101(3) of the CTA to authorize the construction of a suitable utility crossing or related work and specify who shall maintain the crossing without abrogating the protection afforded to the City by section 288 of the Local Government Act.

[53] The Agency is of the opinion that liability for negligent acts by either party at railway crossings ought to be determined by the civil courts in the province in which the crossing is situated. Therefore, the Agency will not impose any terms and conditions with respect to liability.

Notices and flagging

[54] The City submits that flagging would only be needed if maintenance was taking place near the tracks which would, for this crossing, be the exception. The City adds that, in any event, a ten‑day notice should not apply to emergency repairs.

[55] BNSF expects that maintenance work will be scheduled well in advance and, accordingly, it is unclear how the “[…] proposed ten working days [would] be excessive.” BNSF submits that ten days is the period of time needed for it to properly pull flag persons from their existing duties and responsibilities and then deploy them in connection with any proposed maintenance work.

[56] The Agency notes that section 26.1 of the Railway Safety Act, R.S.C., 1985, c. 32 (4^th Supp.) states that: “No person shall, without lawful excuse, enter on land on which a line work is situated.” The Agency is of the opinion that for emergency repairs, the notice required would be undoubtedly short whereas for maintenance work, the City should know well in advance as this type of activity requires some planning and approval. The Agency is also of the opinion that it is reasonable for either party to have prior notice of any work to be performed by the other party that may affect the integrity or safety of their facility and operations. It would appear that the parties do not truly disagree on this issue. Neither do they suggest that a ten-day notice would be excessive for routine maintenance work nor that a shorter notice period would be unreasonable in the event that emergency repairs were required. The Agency will therefore direct the City to notify BNSF, in writing, at least ten days in advance, of any work to be undertaken by the City, except in emergency cases where notice shall be given as soon as possible to BNSF.

CONCLUSION

[57] For the reasons noted above, the Agency, pursuant to subsection 101(3) of the CTA, authorizes the utility crossing, at mileage 126.26 of the New Westminster Subdivision, in the city of Surrey, as shown on As-Built Plan and Profile dated January 2015.

[58] The Agency authorizes the utility crossing subject to the following terms and conditions:

1. The City shall maintain, at its own expense, the storm sewer and rock-lined ditch on, over, through and within the railway lands;
2. No compensation will be paid to BNSF;
3. There shall be no terms and conditions imposed with regards to liability; and,
4. The City shall notify BNSF, in writing, at least ten days in advance, of any work to be undertaken by the City that may affect the integrity or safety of BNSF’s facility and operations, except in emergency cases where notice shall be given as soon as possible to BNSF.

[59] This Decision remains in effect until such time as it is amended or rescinded by the Agency.