Canadian National Railway Co v Norsk Pacific Steamship Co [1992] 1S.C.R. 1021

Facts: The New Westminster Railway Bridge, which spans the Fraser River between Surrey and New Westminster, was built in 1904. It carries a single railway track. Its sole purpose is to service railway traffic, both passenger and freight, but it incorporates a swing span to permit marine traffic to navigate the waterway. On 28 November 1987, the barge Crown Forest No. 4, while being towed downstream by the tug Jervis Crown in heavy fog, collided with the bridge. The Jervis Crown was owned and operated by the Norsk Pacific Steamship Co and the Norsk Pacific Marine Services Ltd, both hereafter referred to as Norsk. The accident caused extensive damage to the bridge and it was closed for several weeks while repairs were made. The appellants admitted liability for negligence as to the collision itself. While the bridge was closed, the four railway companies that used the bridge had to reroute traffic over another bridge further upstream. Freight was either delayed or not transported at all. The use of the waterway was also interfered with, and cargo was delayed or transported by land. This accident gave rise to a number of legal actions which were consolidated in the judgment of Addy J. The Department of Public Works (‘PWC’), representing The Queen in right of Canada, claimed damages as owner of the bridge against both Norsk and the owners of the barge Crown Forest No. 4 and the tug Westminster Chinook (another tug which was helping the Jervis Crown at the time of the accident). Only the action against Norsk succeeded. Norsk was held liable to PWC for all damages resulting to PWC from the collision. This decision was not appealed. In addition to the action by the owner, three of the four railway companies claimed for economic loss against Norsk and the other defendants. The smallest railway user, Canadian Pacific Ltd (‘CP’), did not participate in the litigation. Before trial there was an agreement that the entitlement of the other two railways, the Burlington Northern Railway and the B.C. Hydro and Power Authority Railway, to recover for pure economic loss would stand or fall on the result of the CN claim. It was therefore only the CN claim that was directly in issue. The trial judge allowed CN’s claim against Norsk and dismissed its claim against the other defendants. Norsk’s appeal was denied in the Court of Appeal. Leave to appeal to this court was granted to Norsk on 15 November 1990.