Decision No. 233-R-2012

APPLICATION

[1] The Municipality of Chatham-Kent (Chatham-Kent) filed with the Canadian Transportation Agency (Agency) an application for a review of Decision No. LET-R-62-2012.

BACKGROUND

[2] On March 15, 2007, Chatham-Kent applied to the Agency for a determination of the net salvage value (NSV) for a line of railway owned by CSX Transportation Inc. (CSX) on the Sarnia Subdivision, located between mileages 18.3 and 44.5 (the line), in the province of Ontario. On April 24, 2008, CSX also filed an application for a determination of the NSV for the same railway line.

[3] In its Decision No. LET-R-86-2008, the Agency combined the two proceedings.

[4] On October 3, 2011, as part of the submissions it filed into the record of the proceedings, CSX requested that the Agency make an order excluding three parcels of land from the sale to Chatham-Kent and from the NSV determination.

[5] In support of its request, CSX submitted that the three parcels of land were vacant properties that are adjacent to, but do not form part of, the railway corridor and that are not currently used by CSX in its operation of the line. CSX argued that these parcels are not a “railway line” within the meaning of the Canada Transportation Act (CTA).

[6] In its submission of October 14, 2011, Chatham-Kent opposed the request. Chatham-Kent stated that it had accepted CSX’s offer to sell, making a binding contract in law that includes the three parcels referred to by CSX as non-railway line lands. It further submitted that CSX could not unilaterally change the terms of the contract and that Chatham-Kent did not consent to any such amendment. Chatham-Kent indicated that if CSX wanted to exclude these non-railway line lands it should have done so in connection with its original offer to sell, and, as it did not, it cannot now withdraw from its contractual obligations.

[7] On April 4, 2012, the Agency issued Decision No. LET-R-62-2012 (the Decision), granting CSX’s request to exclude the three parcels of land. In its reasons, the Agency accepted CSX’s submission that the three parcels it sought to have excluded are non-railway line lands, and noted that this had not been disputed by Chatham-Kent. The Agency concluded that the three parcels did not form part of the railway line being discontinued. The Agency found that, as a result, it lacked jurisdiction to include them in the statutory transfer of the railway line.

[8] On May 23, 2012, Chatham-Kent filed its application under section 32 of the CTA.

[9] Although no comments were solicited by the Agency, on June 7, 2012, CSX filed a reply to Chatham-Kent’s application.

ISSUE

[10] Has there been a change in the facts or circumstances pertaining to the Decision since it was issued? If so, is this change sufficient to warrant a review, rescission or variance of the Decision?

SUBMISSIONS

[11] Chatham-Kent asks the Agency to review and vary its decision to exclude one of the three parcels of land from the NSV.

[12] Chatham-Kent states that upon receipt of the Decision, it retained the services of Cando Contracting (Cando) to assess the three parcels of land and to provide an opinion “upon the necessity of including or excluding any or all of the 3 parcels from a railway operating view”.

[13] In its written assessment report, Cando notes that the parcel of land it describes as “Lot 3 - Large Lot in Wallaceburg, SW of Duke Street and Murray Street intersection” was previously used as a rail siding and a yard, and that it is currently zoned as M1 Industrial. According to Cando, the location of the lot makes it potentially valuable for possible use as a station and a yard for the operations of a short line railway, including siding for car storage, transloading and team tracks, locomotive shop, office and equipment and material storage area. Cando also states that a property of this size and type will be required in Wallaceburg to be used for a shop and yard for an effective short-line railway operation.

[14] Cando’s conclusion is that Lot 3, or a property very similar to Lot 3, will be required for an effective short line operation. Cando indicates that it is not aware of any other properties in the Wallaceburg area that are as conveniently located and currently zoned for rail use, and that Lot 3 should be secured.

ANALYSIS AND FINDING

[15] Pursuant to section 32 of the CTA, the Agency may review, rescind or vary any decision if, in the opinion of the Agency, since the issuance of the decision, there has been a change in the facts or circumstances pertaining to the decision.

[16] However, the review process contemplated by section 32 of the CTA is not an open-ended authority for the Agency to review its decisions. The Agency’s jurisdiction under this section is limited and only arises if there has been a change in the facts or circumstances pertaining to a particular decision since its issuance. Accordingly, the Agency must first determine whether there has been a change in the facts or circumstances pertaining to the decision, and if so, determine whether such a change is sufficient to warrant a review, rescission or variance of the decision.

[17] In Decision No. 488-C-A-2010, the Agency set out the considerations it takes into account when deciding whether there is a change in the facts and circumstances pertaining to the decision, as follows:

[…] the wording of section 32 must generally be construed to include only facts or circumstances that were not in existence at the time of the original hearing or were undiscoverable by the applicant for review at that time. If a fact was known to the applicant or discoverable through exercise of due diligence at the time of the initial complaint, it cannot constitute a change in facts or circumstances. The text of section 32 expressly refers to new facts and circumstances arising "since the decision.

[18] In that Decision, the Agency clearly stated the principle that a section 32 application could not be used by a party to reargue its case when in receipt of an unfavorable decision:

A section 32 application is not the appropriate vehicle to introduce evidence that was known to or knowable by the applicant during the original application. It is not meant to provide the losing party an opportunity to complete the record or to re-argue a case. For the application to succeed, there must have been a real change in facts or circumstances since the original decision to justify a re-hearing. This must be weighed against the basic legal principle in favour of finality of decisions. This protects the other party, who has a legitimate expectation that a decision, once rendered, is final.

[19] In this case, the record shows that when it asked the Agency to exclude the three parcels of land from the NSV determination, CSX set out the grounds for its request, namely, the parcels are non-railway line because they are vacant properties that are adjacent to, but do not form part of, the railway corridor, and they are not currently used by CSX in its operation of the line. Although the grounds for CSX’s request were known by it, Chatham-Kent did not question the characterization of the parcels of land as non-railway-line. It is only after receiving an unfavorable decision of the Agency, excluding the three parcels of land from the NSV determination for the reason that they are not “railway line”, that Chatham-Kent decided to challenge the characterization of one of the excluded parcels, and hired a consultant for that purpose.

[20] The Agency finds that nothing prevented Chatham-Kent from putting forward the current arguments and evidence, which Chatham-Kent now seeks the Agency to take into consideration, as part of its original reply to CSX’s request for exclusion of the three parcels, which included the parcel at issue in this application. Chatham-Kent could have, with exercise of due diligence, obtained its consultant assessment report in time to include it as part of its October 4, 2011 reply to CSX.

[21] For this reason, the Agency finds that Chatham-Kent is simply seeking to introduce arguments or evidence that Chatham-Kent could have obtained with due diligence and presented as part of its reply to CSX’s request for exclusion of the three parcels of land from the NSV. This is not a change in facts or circumstances that would meet the test under section 32 of the CTA to justify the Agency reviewing and varying the Decision.

[22] Even though the Agency has found that there is no basis for a section 32 review, the Agency considers that even assuming that there was a change in the circumstances, such change would not be sufficient to warrant variance of the decision.

[23] Cando, in its report, only provided its opinion that Lot 3 could potentially be used in relation to the operation of a future short-line railway. Cando did not provide anything to demonstrate that the parcel is currently used in relation to, or necessary for, the railway operations as they are now being carried out. The Agency considers that the mere opinion that a parcel of land could potentially be useful in the future for the operation of a short-line railway does not make such parcel a railway line within the meaning of the CTA.

[24] For these reasons, the Agency finds that Chatham-Kent failed to meet its burden to demonstrate that there has been a change in the facts or circumstances pertaining to the Decision. For this reason, it is not necessary for the Agency to consider or address the arguments raised in CSX’s reply to the review application.

[25] The Agency dismisses Chatham-Kent’s application.