Court File and Parties

COURT FILE NO.: 55186

DATE: 20180528

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Ronald C. Breen Consulting Inc., In Trust Plaintiff/Moving Party

– and –

Canadian National Railway Company Defendant/Responding Party

COUNSEL:

J. Foreman and G. Graham, for the Plaintiff/Moving Party

D. Royal and S. Hennig, for the Defendant/Responding Party

HEARD: February 26, 2018

REASONS FOR JUDGMENT

LEITCH J.

motion for production and Motion to compel Answers on Cross-Examination

[1] This production motion raises the issue of what amount of production a defendant should be obliged to make once it files a motion for summary judgment.

[2] The plaintiff moves for an order requiring the defendant, Canadian National Railway Company (“CN”), to make what the plaintiff describes as fair and proportionate production of relevant documents in order to permit a just determination of the issues raised on CN’s motion for summary judgment.

[3] The plaintiff also moves for an order compelling answers to questions asked on the cross-examination of the affidavit filed in support of CN’s summary judgment motion.

Background facts

[4] This class action concerns substantial monetary charges by CN against rail cargo shipping companies, including the plaintiff. Fuel surcharge tariffs, CN 7400 and CN 7401, were added on top of a base rate purportedly to recover variable increases in the cost of fuel.

[5] CN 7400 and 7401 were subject to certain amendments and reissuances between October 20, 2000 and January 1, 2007 as follows:

Tariff	Issue Date	Effective Date
7400	Oct. 20, 2000	Oct. 20, 2000
7400-A	Sep. 10, 2002	Oct. 1, 2002
7400-B	Jan. 19, 2004	Feb. 9, 2004
7400-C	Jan. 21, 2005	Feb. 11, 2005
7400-D	Sep. 1, 2005	Sep. 1, 2005
7401	Mar. 1, 2005	Apr. 1, 2005
7401-A	Sep. 21, 2005	Oct. 1, 2005
7401-B	Nov. 17, 2006	Jan. 1, 2007

[6] According to the plaintiff, CN recovered its fuel costs under both the base rate and the fuel surcharge tariffs, which it categorizes as “over-recovery”.

[7] In a notice released to customers dated January 1, 2007, CN indicated that it had made reductions to its fuel surcharge tariffs in order to “address potential over-recovery of incremental fuel costs”.

[8] In a ruling dated January 25, 2007, the Surface Transportation Board (STB) in the United States prohibited rail carriers, including CN from calculating fuel surcharges as a percentage of the base freight rate. Following the STB decision, CN 7400 and CN 7401 were eliminated. The STB declined to make its findings retroactive noting that railroads could not be “faulted for assuming that fuel surcharges calculated as a percentage of the base rate were permissible”. CN implemented a new form of surcharge effective April 26, 2007. That surcharge was entitled CN 7402. CN 7402 was designed to comply with the order of the STB and, specifically, to operate using a different method of calculating fuel expense so as to avoid over-recovery.

[9] The plaintiff commenced this action on August 24, 2007 for “over-recovery”. The plaintiff filed a motion for certification on December 16, 2010. In essence, the allegation is that certain CN fuel surcharge tariffs became a profit centre or a revenue enhancement mechanism rather than a cost-recovery mechanism for specific increased incremental fuel expense. This action seeks to determine the details of any over-recovery by CN and whether the conduct associated with the specific fuel surcharge tariffs at issue was lawful.

[10] CN moved for summary judgment in December 2015. The issues raised by the summary judgment motion will be outlined below.

[11] On these motions, the plaintiff takes issue with the fact that CN has only produced a small number of public documents and two affidavits of Mr. LaBrash, CN’s Director of Financial Planning. One affidavit, sworn March 13, 2015, is in support of CN’s summary judgment motion. The second affidavit, sworn November 30, 2017, is in response to the production motion. Neither affidavit included any exhibits, but the second affidavit contained two tables of data.

[12] This data results from an “internal analysis” conducted by CN using reviews under the tariffs from both Class Member Traffic and non-Class Member Traffic “to test the plaintiff’s allegation that CN ‘over-recovered’, i.e. collected revenues from its FSC [fuel surcharge tariffs] program that exceeded its increased fuel costs”, which confirmed, according to Mr. LaBrash, that CN did not over-recover the fuel costs arising from the increased price of oil that CN faced in respect of its operations.

[13] The plaintiff requests more documentation, which I will describe below. According to the plaintiff, the requested documentation will confirm the amount of revenue earned as a result of CN 7400 and CN 7401 and other charges.

[14] On January 18, 2018, Mr. LaBrash was cross-examined on his second affidavit (sworn November 30, 2017). The plaintiff alleges that he refused to answer a short list of questions that purported to test the evidence on his affidavit. The plaintiff brought a second motion returnable with the production motion seeking an order compelling Mr. LaBrash to provide answers to the unanswered questions from his cross-examination.

The production and answers sought on this motion

[15] The plaintiff submits that it requires production of documents that demonstrate the specific financial results of fuel surcharge tariffs CN 7400 and CN 7401 from their commencement to their termination, including the following:

a) the total fuel costs incurred by CN for all rail freight shipping services for shipments within, to, or from locations in Canada under tariffs CN 7400 and CN 7401, broken down by tariff version on a monthly, quarterly, and annual basis;

b) a breakdown of the percentage of CN’s total fuel costs that is attributable to rail freight shipping services purchased under public freight tariffs for shipments within, to, or from locations in Canada (“Class Member Traffic”), under either CN 7400 and CN 7401, broken down by tariff version on a monthly, quarterly, and annual basis;

c) the total fuel costs incurred by CN in respect of Class Member Traffic, during the operation of tariffs CN 7400 and CN 7401, broken down by tariff version on a monthly, quarterly, and annual basis;

d) the incremental fuel costs incurred by CN above the cost covered through the base rate in respect of the Class Member Traffic during the operation of tariffs CN 7400 and CN 7401, broken down by tariff version on a monthly, quarterly, and annual basis; and

e) the total revenue obtained from Class Member Traffic in relation to fuel expense under tariffs CN 7400 and CN 7401, broken down by tariff version on a monthly, quarterly, and annual basis.

[16] In essence, the issue on this motion is whether CN should be required to provide the plaintiff with production of documents demonstrating the specific financial results of the fuel surcharge tariffs CN 7400 and CN 7401.

[17] The plaintiff also seeks answers to 18 questions that were refused on Mr. LaBrash’s cross-examination. These questions were outlined in Schedule B to the plaintiff’s motion to compel answers to those questions and will be described more fully below.

CN’s summary judgment motion

[18] CN’s motion for summary judgment references Rule 20 and Rule 21.

[19] In its summary judgment motion, CN asserts that the Canada Transportation Act. S.C. 1996, c.10 (the “CTA”) is a complete code in the action. Its position is that the tariffs issued and published under the CTA are deemed to be “lawful rates”. CN points to s. 161 of the CTA, which provides that a shipper dissatisfied with a rate charged or proposed to be charged in a public tariff may submit the matter to the Canadian Transportation Agency for arbitration.

[20] As a result, CN will assert on the summary judgment motion that the plaintiff is not entitled to any relief beyond the procedures and remedies set out in the CTA.

[21] CN also will assert on the summary judgment motion that there is no cause of action under the Competition Act, R.S.C. 1985, c. C-34 in respect of railway tariffs based on the provisions of s. 4(2) of the CTA, which excludes the operation of the Competition Act in respect of the section of the CTA that deals with railway tariffs.

[22] Further, CN will assert that in any event there is no genuine issue that s. 52(1), which is the provision of the Competitive Act on misleading advertising, has been breached and, perhaps more importantly, will assert that any claim for a breach of s. 52 is statute-barred.

[23] In addition, CN will assert that a contravention of the Competition Act cannot ground a cause of action for damages in tort; the pleadings do not disclose a cause of action for tortious interference with economic relations (unlawful means tort); there is no cause of action for the tort of inequitable profit; the breach of contract claim is untenable and, in any event, is statute-barred; and there is no genuine issue respecting the claims for unjust enrichment given that charging the tariffs in accordance with the provisions of the CTA provides a juristic reason for the act complained of.

The relevant rules, statutory authority, and case authority governing the production issue

[24] CN has not yet made any documentary production nor has it filed and served an affidavit of documents. It is not obliged to do so under the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, because the timing of service of an affidavit of documents and production of documents is established by r. 29.1.03(3).

[25] Rule 29.1.03(3) provides that the discovery plan is to include dates for service of each party’s affidavit of documents, amongst other details, including the intended scope of documentary discovery and information respecting the timing of the production of documents.

[26] Rule 29.03(1) provides that the discovery plan is to be agreed to before the earlier of 60 days after the close of pleadings unless the parties otherwise agree and attempting to obtain evidence.

[27] Pleadings are not yet closed. No discovery plan has been agreed upon.

[28] The Rules contemplate motions under r. 20 and r. 21 prior to the close of pleadings and thus prior to any discovery.

[29] In fact, r. 20.05(2) sets out the power of the court to give directions if an order is made to proceed to trial including an order in relation to the delivery of an affidavit of documents.

[30] The plaintiff emphasizes that, pursuant to r. 20.02(3), a party responding to a motion for summary judgment must “set out, in affidavit material or other evidence, specific facts showing that there is a genuine issue requiring a trial”.

[31] The plaintiff’s position is that it cannot respond to CN’s summary judgment motion without the information requested.

[32] The plaintiff relies on the commentary of the Supreme Court of Canada in its seminal decision, Hryniak v. Mauldin, 2014 SCC 7 at paras. 69 and 70 that motions judges are permitted to be “involved early in the life of a motion, in order to control the size of the record, and to remain active in the event the motion does not resolve the entire action” and that

[t]he Rules provide for early judicial involvement, through Rule 1.05, which allows for a motion for directions, to manage the time and cost of the summary judgment motion. This allows a judge to provide directions with regard to the timelines for filing affidavits, the length of cross-examination, and the nature and amount of evidence that will be filed. However, motion judges must also be cautious not to impose administrative measures that add an unnecessary layer of cost [emphasis added].

[33] The plaintiff also references s. 12 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, which confers broad discretion upon the Court to “make any order it considers appropriate” respecting the conduct of a class proceeding to ensure its fair and expeditious determination.

[34] The plaintiff cites to Fehr v. Sunlife Assurance Company of Canada, 2014 ONSC 2183 where Perell J. said at para. 47 that the Supreme Court’s decision in Hyrniak “demands a proportionate procedure that requires fair disclosure but not necessarily full disclosure in the sense of being comprehensive”. The plaintiff also refers to 1870553 Ontario Inc. v. Kiwi Craze Co., 2015 ONSC 1632 where Emery J. said at para. 45 that “responding parties to a motion have full recourse to all means available under the Rules of Civil Procedure to seek relevant documents that would enable them to put their best foot forward on the motion for summary judgment.”

[35] The plaintiff also cites to Fehr and Fairview Donut Inc. v The TDL Group Corp., 2010 ONSC 6688 as cases where the courts have ruled upon whether a full affidavit of documents is required in the case of a summary judgment motion in the class action context. In these cases, the court held that a complete affidavit of documents was not necessary in anticipation of the summary judgment motion for multiple reasons, including that the responding parties to the motion for summary judgment had enough information to respond to the motion for summary judgment. The plaintiff points out that in this case, it is not seeking an affidavit of documents, but, rather, only a specific and limited amount of information that it asserts is needed to respond to the motion for summary judgment.

[36] The plaintiff submits that there is valuable precedent, including in the case of Fairview Donut for the use of management power by a case management judge to oversee the successful implementation of documentary production in the context of a summary judgment motion. For example, the plaintiff notes that in Fairview Donut, Strathy J., as he then was, ordered production of relevant documentary evidence for a motion for summary judgment.

[37] However, a responding party to a summary judgment motion is only entitled to documentation that is relevant to the issues in the summary judgment motion. For example, Perell J. held at para. 54 of Fehr that “where a party moves for summary judgment in a class proceeding, his or her entitlement to disclosure and production may be limited to those documents that are relevant to a determination of the issues raised on the motion for summary judgment provided the imposition of such limitation does not impair the responding party’s ability to defend the motion.”

[38] Therefore, as made clear in both Fehr and Fairview Donut, a responding party is only entitled to that which is relevant to the issues in a summary judgment motion.

The plaintiff’s position

[39] The record filed in support of the defendant’s motion contains only publicly available information, which the plaintiff says is insufficient to allow the plaintiff to properly respond to the motion. The plaintiff alleges it made targeted requests through correspondence with CN’s counsel for specific material, which the plaintiff says it requires to respond to CN’s motion for summary judgment.

[40] The plaintiff submits that the requested information is relevant. The plaintiff says that the data sought is focused on a core question in the case: did the defendant collect fuel surcharge revenues that exceeded any increased fuel costs that the fuel surcharges were purported to recover. The plaintiff asserts that a focused analysis of the data in the defendant’s possession will reveal that the defendant engaged in “over-recovery”, which is what is at issue in the action and the summary judgment motion. The plaintiff asserts that the grounds of summary judgment are “wide-ranging and inherently complex”.

[41] The plaintiff submits that the request for information is fair and proportional relative to the matters in issue. The plaintiff takes the position that the defendant maintains an astounding array of data concerning its customers and traffic, but has made no substantive documentary production; produced selective, incomplete, and misleading affidavit testimony; and has refused to answer questions asked by the plaintiff.

[42] The plaintiff submits that it has designed the production request and the request for unanswered cross-examination questions so that they are modestly framed in proportion to the request for summary judgment. As the plaintiff emphasizes, it has not requested an affidavit of documents, but rather only requested data that is designed to “remove the mystery that [the defendant] relies upon surrounding the ‘over-recovery’ alleged and at issue in the case”, and the production of the specific data will cause CN no hardship.

[43] The plaintiff also cites to Fehr and says that “the respondent to a motion for summary judgment should not be limited to receiving relevant documentation through cross-examination on affidavits filed in the motion.”

[44] The plaintiff responds to CN’s claim that the information requested does not exist by submitting that CN “is quibbling over the internal nomenclature that it uses in the management of its fuel and fuel cost recovery”.

[45] The plaintiff also submits that CN’s position that the information does not exist is betrayed by the record. The plaintiff refers to CN’s admission that it maintains an astonishing collection of data housed within interactive data management systems; that it engaged in “heightened monitoring” of fuel charges; that it had previously adjusted the fuel surcharge program, which the plaintiff submits would require a study and analysis of the program; and that it has a propensity to study and measure every aspect of its business in pursuit of its strategic business plans.

[46] The plaintiff further submits that CN “clearly” must calculate the fuel costs it recovered to comply with the fuel charge program. The plaintiff submits that it would “make no rational sense for [CN] to have neglected to record fuel cost and fuel cost recovery data for the class members…having regard to the fuel surcharge tariff program.”

[47] The plaintiff relies on the same arguments for the motion for answers as it does for the motion for production. The plaintiff submits that the answers to the questions asked during cross-examination of Mr. LaBrash are relevant, because they assist in completing a chronology that impacts legal arguments that will be made by the defendant in its summary judgment motion; pertain to the fundamental provision of particulars surrounding the actual economic results of the fuel surcharge tariffs; and would provide accurate and complete information that was omitted in Mr. LaBrash’s affidavit.

CN’s position

[48] CN emphasizes that there is no obligation for it to produce documents irrelevant to the summary judgment motion and that there is no rule that obligates it to produce documents at this stage of the litigation.

[49] CN further submits that the plaintiff’s reliance on Fehr for the proposition that a respondent should not be limited to receiving documentation through cross-examination on affidavits in the motion for summary judgment is taken out of context, because the court in Fehr made that statement when referring to cases decided under the old summary judgment rule.

[50] CN also submits that Fehr and multiple cases following it have consistently denied attempts by responding parties on motions for summary judgment to seek wide-ranging production of documents irrelevant to the issues raised on those motions. CN notes that in Fehr, Perell J. held that the plaintiffs had no entitlement to better production, because r. 20.05(2)(a) in effect acknowledges that an affidavit of documents is not a prerequisite for a summary judgment motion.

[51] CN’s position is that the production sought by the plaintiff is in no way necessary to the determination of CN’s motion for summary judgment.

[52] CN submits that there is no cause of action to support a claim of “over-recovery” and that the plaintiff’s claims suffer from fatal legal flaws in that they do not disclose a cause of action and are precluded by a statutory scheme, which means that production will be a waste of money, effort, and time. CN submits that the issues on summary judgment are issues of law and can be answered on little to no evidence other than the tariffs themselves. For example, CN submits that it does not matter whether it “over-recovered” if the CTA is a complete legislative code that excludes the remedies sought by the plaintiff or if the plaintiff’s claims are statute-bared.

[53] CN submits that the information it has provided is sufficient production because none of the grounds raised in the summary judgment motion call for a determination of CN’s revenues under the fuel charge tariffs, the fuel costs incurred by CN, or how these amounts compared.

[54] Furthermore, CN also submits that the documents requested by the plaintiff do not exist. CN states that it does not incur fuel costs on an individual shipment basis, but rather incurs fuel costs per locomotive. CN submits that it did not record fuel expense by train, by business unit, by commodity, by locomotive, or by shipment. CN submits that any methodology used to allocate locomotive fuel costs to particular shipments necessarily relies on assumptions, approximations, and trade-offs.

[55] CN submits that the questions that the plaintiff requests be answered are not relevant to issues on the production motion and do not arise from Mr. LaBrash’s affidavit or cross-examination evidence. CN submits that the scope of cross-examination of a deponent for a motion is narrow and that questions must be relevant to the issues on the particular motion, the matters raised in the affidavit by the deponent, or the credibility and reliability of the deponent’s evidence. CN submits that most of the refused questions are attempts to conduct general discovery on the merits of the plaintiff’s action and do not relate to the issues in the Plaintiff’s production motion, the motion for summary judgment, or Mr. LaBrash’s affidavit.

[56] CN requests that the motion for production and answers to questions be dismissed.

Disposition

[57] I have concluded that the plaintiff’s motion should be dismissed for the following reasons.

[58] CN’s motion for summary judgment relies in part on r. 21. Evidence based on the assertion that a pleading does not disclose a cause of action is not admissible on such a motion, and such evidence is only admissible with leave in relation to the determination before trial of a question of law raised by a pleading.

[59] Further, in relation to the portion of the motion reliant on r. 20, I agree with CN’s position that the current summary judgment motion regime and the current discovery provisions of the Rules reflect a policy decision that summary judgments motions will be heard on the record produced by counsel. It must be borne in mind that this motion is for production “outside” what is provided for under the Rules and should be considered only if the production sought is relevant to the issues on the summary judgment motion.

[60] I note also that CN intends to move forward with its summary judgment motion prior to the hearing of the plaintiff’s certification motion, which requires CN to recognize that the disposition of the summary judgment motion will be binding only on the plaintiff.

[61] Having reviewed the summary judgment motion, I have concluded that it is as “narrowly tailored” as CN asserts, that it seeks to dismiss the action on narrow legal grounds, which attacks the elements of each cause of action, and that none of the grounds on which the motion relies depends on or is related to the plaintiff’s allegation of over-recovery.

[62] I agree with CN that the summary judgment motion raises only questions of law: CN will argue that the CTA is a complete code; that the Competition Act is excluded because of the provisions of the CTA; and that in relation to the alleged breach of s. 52(1) of the Competition Act, the language of the tariffs will govern the issue. None of these issues require evidence in relation to an allegation of over-recovery. Put another way, evidence relevant to over-recovery will not assist the plaintiff in responding to these three legal arguments advanced by CN.

[63] In addition, the issue of whether the claims under the Competition Act are statute-barred is a pure question of law, which renders the evidence respecting over-recovery irrelevant.

[64] Similarly, whether the required elements for the unlawful means tort are pled is also a question of law. Whether such a claim is statute-barred, in any event, is also a question of law. Whether there is a cause of action for the tort of inequitable profit is also a question of law.

[65] CN confirms that in relation to its position that there is no genuine issue respecting the claims for unjust enrichment, it intends to confine its argument to its assertion that it had a juristic reason for the act complained of and it is not arguing that there was not an enrichment. Again, this position raises an issue of law.

[66] In relation to the plaintiff’s breach of contract claim, CN drew to my attention that as set out in para. 26 of the Fresh as Amended Statement of Claim, the plaintiff pled that tariffs CN 7400 and 7401 “contain express and implied terms and condition of contractual force which dictated that their purpose and function was to recover only the actual incremental increases in CNR’s fuel costs applicable to Class Members”. In para. 30, the plaintiff alleged that CN breached such express and implied terms and conditions “as the fuel surcharge program was a revenue enhancement measure rather than an incremental cost recovery mechanism”. The plaintiff alleges that Class Members “are therefore entitled to damages equal to the unlawful revenue extracted” by CN during the class period. In relation to this claim, I agree with CN that the issue raised on the summary judgment motion can be argued by referencing the language of the tariffs, and, again, the production sought is not relevant to that issue.

[67] As Mr. LaBrash deposed in para. 47 of his affidavit filed in support of the summary judgment motion, the tariffs CN 7400 and CN 7401 “clearly state the methodology by which they are calculated on their face”.

[68] As noted, the plaintiff strongly takes the position that CN was wrongly denying the existence of the information sought.

[69] The plaintiff points to the following evidence from Mr. LaBrash’s cross-examination summarized in para. 56 of its factum as follows:

[56] On his cross-examination, Mr. LaBrash acknowledged that CN possessed the following data:

a. For every shipment undertaken by CN, a document known as a “waybill” is generated. A waybill includes the particulars of the shipment, the tariff under which the shipment was made, the base rate charged to the shipper, and any fuel surcharge amounts charged to the shipper. CN is able to determine from its waybills which traffic was undertaken under a public tariff with a fuel surcharge, meaning CN can isolate the class members’ traffic.[^1]

b. CN utilizes a data management system known as “DataCity”, which is described by CN as “a single source of management information for strategic decision-making on all aspects of the company’s operations” and, “an internal web-based portal providing access to over 200 reports and key performance indicators based on the previous day’s data from more than 20 transactional systems.”[^2]

c. CN maintains a Corporate Customer Information Database (“CCID”) which is described by CN as “a mainframe systems used to store and manage master data information on customers such as locations, stations, and interchange points.”[^3]

d. CN maintains a system known as its Business Warehouse / Data Warehouse (“BW/DW”) which is described by CN as “the enterprise repository of information for reporting and data analysis” [and] which is “built from transactions recorded within our key operating systems…”[^4]

e. CN maintains a transactional operating system known as Service Reliability Strategy (“SRS”), which is described by CN as “a critical mainframe application… [and which is] the core transportation system managing and recording almost all aspects of rail service delivery. It provides integrated information of transportation assets and services allowing CN to manage both shipment performance and operations efficiency.”[^5]

f. CN has developed a system known as Train Operations Planning and Control (“TOPC”), which is described by CN as “[a] proprietary system that enables management to see in real time every train throughout the network and its trip plan status.”[^6]

g. CN maintains a financial accounting system known as its Revenue Management System (“RMS”), where “SAP [accounting data] is extracted, transformed, and loaded each night into the Data Warehouse for business users to access and utilize.”[^7]

[70] The plaintiff also points to two other public statements by CN summarized in para. 57 and 58 of its factum as follows:

[57] CN has also referred to additional measures it had taken to monitor data relating to potential over-recovery through fuel surcharges. In its first submission to the STB dated April 27, 2006, CN stated that the implementation of tariff 7400 in May 2001 “reflected the reality that fuel costs were becoming a compelling economic issue for our customers and CN to a degree that required heightened monitoring”[^8], but LaBrash didn’t know what was done.

[58] In the January 2007 update to CN’s fuel surcharge tariff 7401, CN said that it was working to “proactively address potential over-recovery of incremental fuel costs”[^9] These statements indicate that CN was watching and studying the issue of over-recovery closely for its own purposes. The plaintiff submits that CN should disclose the results of that monitoring. LaBrash said he knew about this.

[71] The plaintiff insists CN can isolate each class member’s traffic and what they were charged “to the penny” yet that data has not been produced with the result that the data produced does not react to, or provide information as to how, the tariff program operated.

[72] I have taken into account the plaintiff’s vigorous assertion that CN can readily produce data describing the economic impact of the fuel surcharges to the Class Members throughout the class period. In other words, the plaintiff’s position is that an allocation of costs to a particular segment of CN’s customer base is readily available to CN and should be produced to the plaintiff.

[73] In complete contrast to the plaintiff’s position, CN insists that the record is clear that the evidence sought does not exist. In Mr. LaBrash’s affidavit sworn November 30, 2017 in response to this production motion, Mr. LaBrash deposed in para. 4 that “documents relating to CN’s total fuel costs incurred specifically in relation to Class Member Traffic do not exist”; in para. 6 that “there is no simple or universally accepted method for allocating the fuel cost for a locomotive to particular shipments it hauls”; and in para. 8 that “it is very difficult how to estimate how much fuel it [a locomotive] will consume and even more complicated to attempt to assign or allocate a portion of that fuel to each and every one of the rail cars it may handle, some of which may be Class Member Traffic and some of which may not be”. Mr. LaBrash went on to explain the factors impacting the fuel consumed by locomotives.

[74] Mr. LaBrash ultimately concluded at para. 14 that “locomotive fuel costs can only be allocated to particular shipments hauled by that locomotive using an allocation methodology that necessarily involves assumptions, approximations and trade-offs. Any method of allocation will be complex and somewhat arbitrary…”

[75] Mr. LaBrash further stated in para. 15 that “CN is not required to allocate locomotive fuel costs to particular shipments in its reporting to regulators”, and in para. 16, he reiterated that “CN has no documents that attempt to allocate its locomotive fuel costs between Class Member Traffic and other CN Rail freight traffic”.

[76] Mr. LaBrash provided what he described in para. 89 of his affidavit filed in support of the summary judgment motion as “just one example of the highly complex and disaggregated analysis that would need to be undertaken to determine whether a particular shipper’s contribution to CN’s fuel costs resulted in any alleged over-recovery by CN”. This example was in relation to Chinook Global Limited, the original plaintiff who issued the Fresh as Amended Statement of Claim. As Mr. LaBrash described in his affidavit, that corporation paid for 756 shipments over approximately a two and a half year period, the shipments were made on “mixed-freight trains”. This meant that assessing Chinook’s contribution to CN’s actual fuel costs on a particular movement would have to take into account the other shipments on each of the relevant trains and their respective contributions to CN’s fuel costs and that “a detailed assessment of each train that moved Chinook goods would also be required to assess the fuel economy of each shipment, and whether special equipment and procedures would be relevant to the analysis”.

[77] I am satisfied that CN is not in possession of documents that respond to the plaintiff’s request. I characterize what the plaintiff seeks as a request for CN to create data for the plaintiff’s use. The allocations to determine what portion of total fuel costs should be allocated to a particular shipment is not a straightforward exercise and given the legal issues raised on the summary judgment motion, I cannot conclude that CN should be ordered to undertake the analysis and allocation requested by the plaintiff.

[78] I agree with CN’s contention that the cross-examination of Mr. LaBrash has not brought into question Mr. LaBrash’s statement, as previously outlined, that CN’s total fuel costs incurred specifically in relation to Class Member Traffic do not exist.

[79] Finally, I turn to the refusals issue.

[80] I understand that refusal 1 (question 20 has been answered).

[81] With respect to refusals 2 to 4 (questions 24 to 27), it appears to me that there is no basis on which data should be produced after 2007.

[82] Lastly with respect to refusal number 5 (question 72), it is unclear as to the definition of “yield” and, as CN noted, Mr. LaBrash had indicated that CN monitors yields depending on how that is defined.

[83] In relation to refusals 7, 10, and 11 (questions 142, 239, and 289), I agree with CN that Mr. LaBrash’s evidence is responsive to those questions.

[84] Refusals numbered 8, 9, 12, 13, 14, 15, 16, 17, and 18 (questions 178, 182, 301, 352, 377, 380, and 389) all relate to requests for the production of data. These questions relate to the issue of over recovery and were properly refused on the cross-examination on Mr. LaBrash’s affidavits sworn in support of the summary judgment motion and in response to the production motion. Similarly, refusal number 6 (question 79) requesting details of “heightened monitoring” referred to in CN’s submissions to the STB is not relevant to the issues on the summary judgment motion.

[85] As a result of these conclusions, the plaintiff’s motions are dismissed. I trust that counsel can resolve the issue of costs but if necessary counsel may make brief submissions on that issue within 30 days.

“Justice L.C. Leitch”

Justice L. C. Leitch

Released: May 28, 2018

[^1]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 30–39, 113, 169–171, Plaintiff’s Compendium, Tab A, pp. 7-8, 16, 21–22. [^2]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 132, 97–101, citing Exhibit 6 Plaintiff’s Compendium, Tab A and Tab A6, p. 18, 14, 143. [^3]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 129–130, citing Exhibit 6 Plaintiff’s Compendium, Tab A and Tab A6, p. 18, 142. [^4]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 127, citing Exhibit 6 Plaintiff’s Compendium, Tab A and A6, p. 17, 141. [^5]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, Q. 134, citing Exhibit 6 Plaintiff’s Compendium, Tab A and A6, p. 18, 150. [^6]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 98–99, citing Exhibit 6 Plaintiff’s Compendium, Tab A and A6, p. 14, 150. [^7]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 121–122, citing Exhibit 6 Plaintiff’s Compendium, Tab A and A6, p. 16–17, 148. [^8]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 78–79, citing Exhibit 4 Plaintiff’s Compendium, Tab A and A4, p. 12, 96. [^9]: Transcript of Cross-examination of Lon LaBrash dated January 18, 2018, QQ. 384–389 citing Exhibit 9 Plaintiff’s Compendium, Tab A and A6, p. 41, 173.