Lac-Mégantic claimants go after Ottawa, allege Transport Canada was ‘grossly negligent,’ Amendment to class action adds federal regulatory agency to list of defendants

Lac-Megantic victims aim to sue Ottawa for allegedly failing to sanction railway by Andy Blatchford, February 13, 2014, The Canadian Press
The lead lawyer for an existing class-action suit has now expanded the long list of defendants to include the Attorney General of Canada, which delegates regulatory powers to the Canadian Transportation Agency and Transport Canada.

In the document, lead lawyer Daniel Larochelle alleges Transport Canada did not sufficiently sanction the Montreal, Maine & Atlantic Railway, even though the department was aware of the company’s repeated violations, including train drivers allegedly failing to apply a sufficient number of brakes. The motion alleges Transport Canada was “grossly negligent” in its oversight role related to the MMA. … Among the allegations listed in the motion, the plaintiffs accuse the Canadian Transportation Agency of failing to ensure the U.S.-based MMA carried adequate insurance coverage for an accident. A spokeswoman for Transport Minister Lisa Raitt said Thursday it would be inappropriate to comment on the allegations since the case is before the courts.

The class-action was first registered in July and targets numerous defendants, including the MMA, its chairman Ed Burkhardt, train driver Tom Harding and companies allegedly responsible for the crude oil on board the train. The amendment to the suit, presented Wednesday in a Quebec court, was added the same week Ottawa agreed to lift the ceiling on how much cash it will pay toward the decontamination and rebuilding of Lac-Megantic, months of work expected to top $400 million.

The motion, which does not mention a financial sum, seeks damages for loved ones of the dead, for those who were injured and for property and business losses. [Emphasis added]

Lac-Mégantic claimants go after Ottawa, allege Transport Canada was ‘grossly negligent,’ Amendment to class action adds federal regulatory agency to list of defendants by Jan Ravensbergen, February 13, 2014, The Montreal Gazette
Claimants in a class-action case springing from the Lac-Mégantic tragedy last summer are now also targeting Transport Canada — alleging gross negligence in the way the federal rail regulator applied rail-safety rules.

An amendment was filed Wednesday. It broadens a request to Quebec Superior Court initiated last July to authorize a class action on behalf of victims. Among new elements, the filing claims Transport Canada was “grossly negligent in its oversight role” regarding railway operator Montreal, Maine & Atlantic Canada Co. The federal regulator “failed to establish any effective or sustainable oversight approach in the face of MMA Canada’s open non-compliance with its regulations,” the amendment states, calling the rail operator “substandard.”

MMA Canada “had been involved in at least 129 accidents since 2003 in Canada alone, including 14 main track derailments, making it the most unsafe railway operator in North America,” according to the filing. The railway was forbidden, the claimants state, from carrying “any dangerous goods” along the “poorly maintained” track where the derailment of a runaway oil train near the Maine border claimed 47 lives last July 6. Transport Canada “was aware that MMA Canada was not permitted to transport dangerous goods” along that track — “and yet it nonetheless permitted the almost daily transport of the highly combustible and volatile Bakken Shale Liquids on it in contravention of its obligations,” the filing adds. “Had (Transport Canada) carried out its regulatory function adequately, the disastrous train derailment would not have occurred,” it states.

Transport Canada conducted “a series of investigations and interventions” involving MMA Canada from 2004 until spring 2013, the filing states, and on 20 occasions “found (it) to have violated several sections” of the Canadian Railway Operating Rules. On eight occasions, the filing states, infractions “included a failure to correctly apply brakes to stationary trains.” The filing adds that MMA was operating its trains with a lone conductor, “notwithstanding” that the regulator knew trains were transporting “explosive” Bakken Shale liquids and gases.

The fresh allegations have not been proven in court.

The filing brings the number of respondents in the case, individuals as well as corporations, to 52. The formal respondent for Transport Canada is the attorney general of Canada. The filing also states that the Canadian Transportation Agency (CTA) failed to ensure that MMA Canada and related companies were “adequately insured in the event of an accident,” and “failed to conduct an appropriate risk assessment in determining the level of insurance that should have been carried.” The CTA is an independent, quasi-judicial economic regulator covering air, rail and marine transport. Transport Canada was not immediately available for comment. [Emphasis added]

Federal government named in Lac-Mégantic class-action lawsuit, A lawsuit calls Transport Canada ‘grossly negligent’ for doing nothing to improve the safety record of the railway company involved in the deadly Quebec derailment and explosion by Allan Woods, February 13, 2014, Toronto Star
An expanded class-action lawsuit seeking financial compensation for the deadly train crash in Quebec last summer says that the federal government is “grossly negligent” for knowing about, but doing nothing to improve, the poor safety record of the rail carrier.

Police and Transportation Safety Board investigations are ongoing, but the lawsuit claims Transport Canada shares in the blame for the accident because the federal rail authority was well aware of Montreal, Maine & Atlantic’s long history of safety violations, including some that occurred at the same place as the deadly crash.

The rail carrier disputes the notion it had a poor safety record, and the transport minister says the department has made changes to improve rail safety enforcement. The lawsuit, however, describes the company as in “repeated violation” of Canadian railway regulations concerning the conditions in which trains should be left unattended. … “Transport Canada was clearly deficient and grossly negligent in its oversight role as it has failed to establish any effective or sustainable oversight approach in the face of MMA Canada’s open non-compliance with its regulations,” the lawsuit claims. “As a result, TC failed to provide a minimum level of assurance that MMA Canada was operating safely.”

The company has not filed a statement of defence, but MM&A chairman Ed Burkhardt said in an interview Thursday that many of the claims in the lawsuit are “sheer fantasy” — chief among them the allegations about the rail carrier’s safety record. “It’s blatantly untrue . . . It’s not the most unsafe railroad in North America. That’s the figment of some lawyer’s imagination. The railroad had minor derailments, it had minor incidents like every railway on the face of the earth.” The lawsuit cites Transport Canada records that show incidents where brakes were improperly applied to parked trains on at least eight occasions between October 2004 and February 2012, and at least one instance of a runaway train, the lawsuit claims. “Despite being aware of these repeated violations in the time leading up to the train derailment, (Transport Canada) wholly failed to impose any sanctions whatsoever in relation to these incidents,” the lawsuit alleges. Transport Canada did not respond to a request for comment and it is not believed that the federal department has filed a statement of defence in the case.

But Transport Minister Lisa Raitt addressed the company’s safety record in the House of Commons on Thursday saying that MM&A’s non-compliance prompted the government last year to introduce monetary penalties for those companies that don’t follow the rules. “This is exactly why . . . we brought in the ability to administer fines. Before then, it simply did not exist,” she said. Burkhardt, however, disputed that there were chronic breaches of regulations that cover the application of train handbrakes. “There were occasional issues and there are on every railway. Sometimes Transport Canada would bring something to management’s attention where they had the facts wrong and it turned out that the situation was not improper, so this is the normal type of back and forth conversation that takes place between each and every safety regulator wherever you might be.”

The claimants argue that MM&A should have been prevented from carrying highly flammable crude oil from shale gas reserved in North Dakota, particularly on “excepted track” that is known to be damaged and more dangerous and for which slow-speed limits are imposed. Among the findings that have so far been released, the Transportation Safety Board has concluded the chemical composition of the crude oil being carried on that train more closely resembled gasoline, which is classified as a “Group 1.” The load was incorrectly classified as a less volatile “Group 2” hazardous material. The most recent TSB recommendations include requiring a higher standard of tank car to transport flammable liquids.
[Emphasis added]

[Refer also to:

Is Saskatchewan and North Dakota Bakken Oil safe enough? Cenovus Bakken “oil’s flammability classification is the highest there is, level 4 — the same as methane gas and propane”

Liability Through the Exercise of Delegated Authority
TRANSPORT CANADA CIVIL AVIATION (TCCA) INSPECTORS,1 who are employees of the government, carry out the powers, duties and functions of the Minister of Transport. Certain statutory powers, duties and functions are expressly delegated to TCCA inspectors pursuant to subsection 4.3(1) of the Aeronautics Act and are contained in the various schedules of the Ministerial Delegation of Authority Document No. 146797. Other administrative functions are carried out in the Minister’s name without an express delegation.

EXTERNAL DELEGATES,2 who are not employees of the government, also exercise powers, duties or functions on behalf of the Minister of Transport. The acts of external delegates are, like the acts of employees committed within the scope of their employment, the acts of the Minister. The external delegates also receive their authority to exercise powers on behalf of the Minister from a delegation of authority document.


A servant of the Crown who commits a wrong is personally liable in damages at common law to the injured person.3 Historically, the Crown has enjoyed immunity from lawsuits. However, through a series of statutory amendments, claims against the Crown have been permitted for negligence “on any public work,” in respect of negligence generally, and, since 1953, for all torts committed by servants of the Crown. An action for damages may be brought naming both the Crown and the individual servant as defendants.


The liability of the Crown is dealt with in the Crown Liability and Proceedings Act.4

The Act provides that the Crown is liable for damages in respect of two broad categories:

a) a tort committed by a servant of the Crown; and

b) a breach of duty attaching to the ownership, occupation, possession or control of property.5

TCCA inspectors and external delegates need to be concerned only with the first of these categories.

The following definitions will assist in understanding the rights and obligations arising from the Act.


This term symbolizes the powers of government that were once exercised by the King or Queen. It now refers to the government of the state, particularly the executive branch of government, that is, the Prime Minister and the Cabinet Ministers who direct the work of the civil servants.

Crown Servant

TCCA inspectors are “servants of the Crown.” The word “servant” is defined so as to include agents of the Crown, that is, persons who represent and act on behalf of the Crown, in accordance with directions from the Crown, to achieve certain Crown purposes. External delegates are regarded as Crown agents to the extent that they act on behalf of the Crown.


A tort is a civil wrong, a breach of a duty of care that one person owes to another. To say that the Crown is liable in tort “for damages” means that the Crown, if found liable, will have to pay money for the loss or injury caused by the tort. The objective of tort law is compensation, to restore the victim of a breach of duty to the same position that they would have been in had the breach not occurred.

The most important kind of tort is negligence, the failure to exercise reasonable care. Other kinds of torts for which TCCA inspectors and external delegates may be found personally liable include defamation (libel and slander), negligent misstatement, assault, and trespass. This is true despite the fact that they are carrying out governmental duties.


This is defined as a breach of a duty of care that causes loss or injury. An individual or company alleging negligence must prove that there was a duty of care owed, that there was a breach of that duty, and that this breach caused the injury or loss suffered. In determining whether an individual has breached the duty of care, the courts impose an objective test. For example, with respect to TCCA inspectors, The Federal Court of Appeal has stated:

The standard of care required of these Inspectors, like every other individual engaged in activity, is that of a reasonable person in their position. What is required of them is that they perform their duties in a reasonably competent way, to behave as would reasonably competent Inspectors in similar circumstances, no more and no less. In evaluating their conduct, courts will consider custom and practice, any legislative provisions and any other guidelines that are relevant. The risk of harm and its severity will be balanced against the object and the cost of the remedial measures.6

Under the provisions of the Crown Liability and Proceedings Act, referred to above, the Crown may be held vicariously liable for torts committed by TCCA inspectors and external delegates. However, the Crown will be responsible only for those torts committed by TCCA inspectors and delegates acting “in the course of employment”.

In the course of employment

TCCA inspectors and external delegates will be considered to be acting “in the course of employment” when they are discharging duties or doing other acts so closely connected with those duties that they will be regarded as part of the discharge of those duties. The test is whether the activity is reasonably incidental to the performance of their authorized duties or involves so substantial a departure that the TCCA inspectors or external delegates must be regarded as acting in their own right and name and not as a servant of the Crown.7

TCCA inspectors and external delegates who discharges their duties fraudulently or negligently or in some manner that is contrary to the employer’s instructions will still be considered to be acting “in the course of employment” because they are doing their job, albeit improperly. In such a case, the Crown will defend and indemnify the individual with regard to a claim made by a person suffering injury or damages on the basis that the person is entitled to indemnification or compensation by the employer for the wrongful or negligent acts of its TCCA inspector or external delegate.


TCCA inspectors or external delegates who commit a negligent act may be considered to be acting within the course of employment, even if they act outside their normal working hours. If TCCA inspectors or external delegates exercise a delegated authority or otherwise perform tasks that they perform at work, it may be possible to conclude that they were acting in the course of employment even though they were off duty or performed the task outside of their normal working hours. In such circumstances, they may be considered to be acting in the course of their employment unless it could be established that they were acting pursuant to personal malice or through employing a course of conduct that no reasonably prudent TCCA inspector would recommend.

The Crown may be held vicariously liable in respect of such a tort on the basis that the TCCA inspectors or external delegates would be considered to have acted in the course of employment.


Plaintiffs alleging negligence can be expected to sue both the Crown and the servants .

The Crown will indemnify TCCA inspectors and external delegates against personal civil liability incurred by reason of any act or omission within the scope of their employment or duties, and will make no claim against them (for damages that the Crown has had to pay) based on such personal liability, if the TCCA inspector or external delegate acted honestly and without malice. See the Treasury Board document entitled Policy on the Indemnification of and Legal Assistance for Crown Servants.

Counsel will be provided in those cases where TCCA inspectors and external delegates have acted within the scope of their employment.This policy reflects the Crown’s recognition that, as an employer, it should indemnify its servants and protect them from certain financial costs arising from the performance of their duties.

The Attorney General will normally conduct the defence except where there is a conflict of interest between the Crown and the servant or when the servant is charged with an offence.In that event, it may be necessary for the employee to retain private counsel. Depending on the circumstances, the deputy head of a department may approve payment of the legal fees.

TCCA inspectors or external delegates who become aware of a possible or actual claim or proceedings as a result of any alleged act or omission within the scope of their duties or employment, and who desire indemnification, must inform their employer at the earliest reasonable opportunity and, upon request, authorize the Attorney General to defend any action on their behalf.

In reflecting on the rights and obligations flowing from the delegation to perform functions on behalf of the Minister of Transport, TCCA inspectors and external delegates should be reassured that they may confidently carry out their duties secure in the knowledge that they will not suffer reprisal but will be supported when discharging duties of their employment. [Emphasis added]



Designated Flight Test Examiners

Approved Check Pilots

Authorized Persons

Design Approval Representatives

Design Approval Organizations, Approved Engineering Organizations

Airworthiness Inspection Representatives

1 In this pamphlet the term “Transport Canada Civil Aviation (TCCA) inspector” is meant to include all civil aviation inspectors, technical inspectors, engineers and other officers who exercise delegated regulatory responsibilities.

2 See Annex for a list of the principal external delegates.

3 Le Conseil des Ports Nationaux v. Langelier et al [1969] S.C.R. 60 (per Martland, J. at 72)

4 R.S.C., 1985, c. C-50.

5 Ibid., s. 3

6 Swanson v. Canada, [1992] 1 F.C. 408, p. 427 (C.A.).

7 See Crown Diamond Paint Co. Ltd. v. The Queen [1980] 2 F.C. 794 (T.D.); [1983] 1

F.C. 837 (C.A.) for a good discussion of the test.

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