THE COMPETITION TRIBUNAL IN THE MATTER OF the Competition Act, R.S. L985, c. C-34 as amended; IN THE MATTER OF an application by the Commissioner of Competition under section 92 of the Competition Act;
AND IN THE MATTER OF a joint venture between Saskatchewan Wheat Pool Inc. and James Richardson International Limited in respect of port terminal grain handling in the port Vancouver.
BETWEEN: COMPETITION TRIBUNAL THE COMMISSIONER OF COMPETITION tRIBUNAL DE LA CONCURRENCE Applicant F I -AND-&. I SASKATCHEWAN WHEAT POOL INC., ...---... ...... ..-....;.;.;;;,;;;w;:~.=.::~ JAMES RICHARDSON INTERNATIONAL LIMITED ..._...._...,,_.-..;a.--.....c~~.:.:» 362681 CANADA LTD. AND 6362699 CANADA LTD.
Respondents
RESPONSE OF THE COMMISSIONER OF COMPETITION TO THE REQUESTS FOR LEAVE TO INTERVENE FILED BY THE CANADIAN NATIONAL RAILWAY COMPANY AND THI[ CANADIAN PACIFIC RAILWAY COMPANY
I. INTRODUCTlON 1. By materials served upon the Commissioner of Competition (the "Commissioner") on January 3, 2006, the Canadian Pacific Railway Company ("CPR") and on January 6, 2006, the Canadian National Railway Company ("CN") requested leave of the Competition Tribural pursuant to s.9(3) of the Competition Tribunal Act R.S.C. 1985 1 c.1 9 (2 11 d supp.), as amended, to intervene in the within matter. CN also served and filed materials requesting an extension of time for service and filing of its leave application. The Commissioner consented to the request for the extension of time.
2. CN has requested tbat it be allowed to participate in the matter by being permitted: a. to review any discovery transcripts and access any discovery documents of the parties to the application but not direct participation in the discovery process, subject to confidentiality crders;
b. to call viva voce evidence on the following conditions and containing the following information: (1) the names of the witnesses sought to be called; (2) the nature of the evidence to be provided and an explanation as to what issue within the scope of the intervention such evidence would be relevant; (3) a demonstration that such evidence is not repetitive, that the facts to be proven have not been adequately dealt with in the evidence so far; and (4 ) a statement that the respondents have been asked to adduce such evidence a1d had refused;
c. to cross-examine witnesses at the hearing of the application to the extent that it is not repetitive of the cross-examination of the parties to the application;
d. to submit legal arguments at the heating of the application that are non-repetitive in nature and at any pre-hearing motions or pre-hearing conferences; and,
e. to introduce expert evidence which is wi,thin the scope of its intervention in accordance with the procedure set out in the Competition Tribunal Rules, Can. Reg. SORJ94 290, and case management;
Request for Leave to Intervene on Behalf of CN, para. S(a) 3. CN has further reqrnsted that the parties to ilhe proceeding not be allowed to seek documentary or oral discovery of CN.
Request for Leave to Intervene on Behalf of CN, para. S(b)
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4. For its part, CPR h: s asked that it be permitted: a. to review any d scovery transcripts and access any discovery documents of the parties to the applicatic n but not direct participation in the discovery process, subject to confidentiality 1 rders;
b. to call viva voe( evidence on the condition that CPR provide: ( 1) the names of the witnesses sougl t to be called; (2) a will-say statement for each witness, with an explanation as 1) what issue within the scope of the intervention such evidence would be relevant; (3) i demonstration that such evidence is not repetitive, that the facts to be proven have not been adequately dealt with in the evidence so far; and (4) a statement that t te respondents have been asked to adduce such evidence and have refused;
c. to cross-examir e witnesses at the hearing of the application to the extent that it is not repetitive of th{ cross-examination of the parties to the application;
d. to submit legal irguments at the hearing of the application that are non-repetitive in nature and at ar y pre-hearing motions or pre-hearing conferences; and,
e. to introduce ex~ 1ert evidence which is wilthin the scope of this intervention in accordance wit t the procedure set out in the Competition Tribunal Rules, Can. Reg. SOR/94-290, a: 1d case management.
Request for Leave 1 >Intervene on Behalf of CPR, para. S(a) 5. CPR also requests hat the parties to the proceeding not be allowed to seek documentary or oral discovery o ·CPR.
Request for Leave 1 > Intervene on Behalf of CPR, para. S(b)
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II. THE POSITIC N OF THE COMMISSIONER OF COMPETITION 6. The Commissioner does not oppose the intervention requests of CN or CPR as such, but submits that both C \J and CPR should be limited to intervening in this proceeding only with respect to issu :s related to the transportation of grain by rail to the Port of Vancouver and the ~eceipt and unloading of railway cars of grain at the Port of Vancouver.
7. The Commissioner submits therefore, that in the course of their intervention and only with respect to the ssue as framed in the previous paragraph, CN and CPR should be pem1itted to:
a. review any disc wery transcripts and access any discovery documents of the parties to the within appli ::ation subject to confidentiality orders but shall not be allowed to participate in tr :: discovery process;
b. call viva voce e ridence in respect of the issue as framed in the previous paragraph subject to provi ling: (1) the names of the witnesses sought to called; (2) the nature of the evidence to be provided and an explanation as to what issue within the scope of the interventior such evidence would be relevant; (3) a demonstration that such evidence is not ·epetitive and that the facts to be proven have not adequately been dealt with in th: evidence so far; (4) a statement that the respondents have been asked to adduce such ::vidence and have refused; and (5) the Commissioner will have the right of documc ntary discovery and oral discovery on the issues to which the evidence relate ;
c. cross-examme vitnesses at the hearing of the application only in respect of the issue set out in the p1 ::vious paragraph and only to the extent that such cross-examination is not repetitive o 'the cross-examinations of the parties to the application;
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d. introduce expet . evidence only with respect to the issue as framed in the previous paragraph and i l accordance with the procedures set out in the Competition Tribunal Rules and case nanagement decisions; and,
e. submit legal aq uments at the hearing of the application and at any pre-hearing motions or pre- iearing conferences which arc not repetitive in nature.
Ill. INTERVENTJ ON OF CN AND CPR 8. The Tribunal's autl ority for granting leave to intervene is contained in s.9(3) of the Competition Tribw al Act and allows any person, with leave, to intervene in any proceeding before · he Tribunal (other than proceedings under Part VII. l) and to make representations relt vant to those proceedings in respect of any matter that affects the person.
Competition Tribu11 •l Act, R.S.C. 1985, c. C-19 (2 11 d supp.) s.9(3) 9. S.30 of the Compe, 'tion Tribunal Rules allows the Ttibunal to grant the request for leave to intervene, refusE it or grant it on such terms and conditions as are deemed appropriate.
Competitio11 Tribut1 r/ Rules, S.C.R. 194-290 s .. 30 10. In order to be gran1 ~d intervenor status, the Tribunal must be satisfied: a. the person seek ng leave to intervene is directly affected; b. the matter allef ~d to affect the person seeking leave to intervene is legitimately within the scop ~of the Tribunal's consideration or is a matter sufficiently relevant to the Tribunal's 1 iandate;
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c. all representati< ns made by the person sieeking leave to intervene are relevant to an issue specifical y raised in the proceeding; and,
d. the person seek ng leave to intervene brings to the Tribunal a unique or distinct perspective tha will assist the Tribunal in deciding the issues before it.
Canada (Commissit ''er of Competition) v. U11ited Grai11 Growers Ltd., [2002] C.C.T.D. No. 18 (Q L.) at para.12ff.
11. The Commissioner accepts that CN and CPR have both met the four part test as set out in paragraph 10, abov ~, and should be granted leave to intervene. However, the Commissioner also respectfully submits that the scope of matters upon which CN and CPR should be gra lted leave to intervene should not be unfettered and should relate to the areas in which I 10th have a distinct perspective.
12. In accordance with R.27(2)(c) of the Competition Tribunal Rules CN and CPR were required to set out: concise statement of the matter affecting them.
Competition Tribun, '/Rules, supra. 13. In its materials, C:t-. has submitted to the Tribunal that inter alia: a. each year, CN carries millions of tonnes of western Canadian grain to the grain terminal faciliti ~son Vancouver's North Shore for export;
b. importantly, Ci r is the only railway company that directly serves the grain terminal elevators at V ai couver' s North Shore. As a result, in addition to the movement of its own traffic, as 11e sole service provider for Vancouver's North Shore facilities, CN is required to inte change railway cars belonging to other carriers, such as CPR, for ultimate delive1 y to the terminal located on the North Shore. This means that all the traffic, includin ~ grain, that moves via CPR to the North Shore must be interchanged between CN an l CPR at these busy interchanges in the Vancouver area;
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c. this situation is )Xacerbated by the significant increase in total rail volumes handles by CN to Vane< uver's North Shore over the past three years and, in particular, the substantial incn ase in the handling of bulk commodity shipments by CN originating on CPR lines. 1 his increased volume, combined with the finite rail infrastructure available to CN on the North Shore, renders it critically important for CN that the rail-receiving t{ rminals on the North Shore operate at maximum efficiency and capacity at all t mes;
d. a te1minal's fai llre to efficiently receive, handle, unload and release rail cars can have a crippling effe ton CN's operations, not only on the North Shore but extending further to CN's line operations leading into Vancouver as well; and,
e. it is for this rea on that CN is directly impacted by any move that would adversely affect grain thn ughput and system capacity in and out of the Port of Vancouver.
Request for Leave 1 >Intervene on Behalf of CN, para. 2(a)-(f) 14. CN has also submi led that, if granted leave to intervene, it will be able to adduce evidence regarding numerous issues relevant to the Application, including the transportation by nil of grain from prairie origins to port tenninals located in Vancouver, the challenges rela1 ,ng to the movement of grain and other traffic from both CN origins and from other rail vays received in interchange at Vancouver for delivery to port terminal on the No th Shore of Vancouver, and the efficiencies relating to rail operations generally, and to C \J specifically, anticipated to result from the joint venture.
Request for Leave 1 J Intervene on Behalf of CN, para. 2(k)
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15. CPR's submissions on the issue of how it is affected by this matter are similar. It advises inter alia:
a. CPR carries mi lions of tonnes of grain on its railway from country elevators in Western Canad . to the Port Terminal elevators at Vancouver for export to other countries;
b. unlike CN, CPI serves only one of the two major western Canadian ports. While CN serves the port 1 1f Prince Rupert, CPR serves only Vancouver and, at Vancouver, serves only the ~outh Shore. The millions of tonnes of grain that move via CPR to the North Shore mt st be interchanged between CN and CPR at busy and difficult interchanges. C )R, therefore, has a particular and direct interest in ensuring that the transportation c f grain to Vancouver and the receipt of an unloading of its railway cars of grain b) Vancouver grain terminal elevators is as prompt and efficient as is possible;
c. CPR capacity tl rough the mountains to and from the Port of Vancouver is limited and the capacity, dE ;;pite recent significant investments by CPR, is strained. As a result, efficient grain 1 ·ansportation and handling is of great importance to CPR and, given the growing de nands of shippers of all rail freight traffic should be of importance to shippers genen lly; and,
d. failure to achic ·e efficiency improvements, especially in respect of railway operations to a1 d from Vancouver through the Rocky Mountains will further strain CPR railways c perating capacity, at a time when shipper demands for rail transportation t xceed available capacity.
Request for Leave 1 ) Intervene on Behalf of CPR, para. 2 (b )-(e )
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16. With respect to the evidentiary assistance that CPR will be able to provide to the Tribunal, it advise~ that it will be able to adduce evidence regarding numerous issues relevant to the Apr lication, including the transportation by rail of grains from primary grain elevators to, mong other places, port terminals located in Vancouver and the logistics relating tc the allocation and delivery by rail of grain at the Port of Vancouver and elsewhere.
Request for Leave t l Intervene on Behalf of CPR, para. 2(j) 17. Both CN and CPR ntend to support the Respondents in this matter. The Commissioner observes that, whil : the Vancouver Port Authority deposed in its materials that it did not yet know which pa ty it intended to support, it appeared likely from the materials that it would support the · espondents as well.
Request for Leave t >Intervene on Behalf of CN, para. 3 Request for Leave t >I ntervene on Behalf of CPR, para. 3 Request for Leave j , Intervene on Behalf of the Vancouver Port Authority, para. 3
18. The Federal Court if Appeal has made it clear that the specific role of intervenors must be determined as a !unction of fairness and justice and subject to the requirements of s.9(3) of the Comp. titian Tribunal Act and that "the intervenors' representations must be relevant to the proc ~edings in respect of any matter affecting those intervenors".
American Airlines I ,c. v. Canada Competition Tribunal, [1989] 2 F.C.88 at para.32; aff'd [1989] 1S.C.E.236.
19. In Canada (Directl r ofI nvestigation and Research) v. Canadian Pacific ( 1997), 74 C.P.R. (3d) 37 (C.~ .), the Tribunal held that the Port of Montreal met the test for intervenor status bt t restricted the scope of such status to matters "affecting the Port".
Canada (Director o.J lnvestigation and Research) v. Canadian Pacific [19971 C.C.T.D. No. 14 (Q.L.), at p.• 6
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20. The Commissioner )f Competition respectfully submits that, similarly, CN and CPR should be restricted in their intervention to the matters which are before the Tribunal and which directly affec t them as set out in their requests for leave to intervene. For that reason, the Commi: sioner of Competition respectfully requests that such intervention be limited to issues rel ited to the transportation of grain by rail to the Port of Vancouver and the receipt and unk ading of railway cars of grain by the Vancouver Grain Terminal Elevators.
IV. ORDER SOUC ;HT 21. As pointed out in h ~r submissions relating to the Request for Leave to Intervene filed by the Vancouver Pon Authority in the context of the within matter, the Commissioner submits that the Tr Junal should be cognisant of scheduling issues and other complications that crise as intervenors are given status and wide rights relating to their participation. Agai1 , the Commissioner submits that there is no need for CN or CPR to attend at examinati m for discovery nor have they requested such a right. However, the Commissioner sub1 1its that she should have the right to discover both CN and CPR with respect to the evidt: 1ce that they intend to lead in conformity with the decision of Noel J. in Canada (Direct( r a/Investigation and Research) v. Canadian Pacific, supra. As Noel J. pointed out:
Given the centralit: and fundamental nature of the issues on which the Port has been permitted to i ttervene, there would be a strong potential for disruption if the Director was not al owed to discover the Port. The Port as an intervenor is in a different position a id, for the reasons set out above, its entitlement to discovery has not been demo: strated.
Canada (Director o) fllvestigatio11 a11d Research) v. Canadian Pacific, supra, at p.47 22. Subject then to tho e concerns therefore, but only with respect to issues related to the transportation of g1 iin by rail to the port of Vancouver and the receipt and unloading of railway cars of gra 11 at the Port of Vancouver, the Commissioner submits that CN and CPR should be per nittcd to:
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a. review any disc )Very transcripts and access any discovery documents or the parties to the within appl :;ation subject to confidentiality orders but shall not be allowed to participate in n ~discovery process;
b. call viva voce e ridence in respect of the issue as framed in the previous paragraph subject to provi ling: (1) the names of the witnesses sought to called; (2) the nature of the evidence to be provided and an explanation as to what issue within the scope of the interventior such evidence would be relevant; (3) a demonstration that such evidence is not ·epetitive and that the facts to be proven have not adequately been dealt with in th: evidence so far; (4) a statement that the respondents have been asked to adduce such ~vidence and have refused; and (5) the Commissioner will have the right of discovc ry and oral discovery on the issues to which the evidence relates;
c. cross-cxamme vitnesses at the hearing of the application only in respect of the issue set out in the p1 :::vious paragraph and only to the extent that such cross-examination is not repetitive o 'the cross-examinations of the parties to the application;
d. introduce expei t evidence only with respect to the issue as framed in the previous paragraph and · .1 accordance with the procedures set out in the Competition Tribunal Rules and case nanagement decisions; and,
e. submit legal ar. ;uments at the hearing of the application and at any pre-hearing motions ·or pre- 1earing conferences which are not repetitive in nature.
All of which is res1 ectfully submitted this 1i 11 day of January, 2006 /~ ,,. I [~UY) &V\__,l Jonathan Chaplan Andre Brantz Valfaie Chenard Competition Law Division Depaiiment of Justice Place du Portage, Phase I, 22nd Floor
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50 Victoria Street, Gatineau, QCK1AOC9 Fax: (819) 953-9267
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