Court awards $21.6M in lost profit to company behind Dawson Creek grain elevator

DAWSON CREEK, B.C. — A Federal Court judge has awarded a company that owned a Dawson Creek grain elevator $21.6 million in lost profit.

Louis Dreyfus Company (LDC) sued Canadian National Railway (CN) for failure to meet service obligations under the Canada Transportation Act in a dispute over the transportation of grain.

The Canadian Transportation Agency decided in October 2014 that CN failed to meet the obligations owed to LDC, which owned and operated 10 Western Canada grain elevators during the 2013-2014 crop year.

That left the Federal Court to decide what, if any, damages resulted.

LDC claimed $21.64 million in lost profit, USD$3.72 million and $335,978.90 for vessel demurrage, and $3.5 million for harm to its reputation.

According to Transport Canada, demurrage fees are amounts a shipper pays a carrier for the detention of a ship, freight car or other cargo conveyance during loading or unloading beyond the scheduled time of departure.

In his November 25th decision, Justice Alan Diner said he heard testimony from seven witnesses and two experts and submissions from both parties. He awarded the full amount for lost profit, but only US$1.86 million and $167,893.0 for vessel demurrage.

“On the third ground of damages for reputational harm, I find a lack of compelling evidence that LDC suffered any loss due to CN’s service failure,” Diner wrote. “Instead, the systemic issues which occurred during weeks 13-35 of the 2013-2014 crop year, namely between the weeks of October 27th, 2013 and April 5th, 2014 affected the entire industry and were not specific to LDC.”

Diner said the agency dismissed LDC’s complaint about CN service failures at Dawson Creek, due to the size of the crop, CN’s efforts to find additional railcars, a significant increase in LDC railcar orders, harsh winter weather, CN railcar allocation policy and lack of lead time for CN to meet increased demands.

Parrish and Heimbecker acquired grain elevators from LDC in 2019, including the one in Dawson Creek.

“If CN had not breached its level of service obligations and supplied the required railcars, LDC could and would have sold additional grain at rates favourable to it,” according to Diner. “LDC’s consequent losses from its foregone sales are not remote. Indeed, they were reasonably foreseeable.”

Read Diner’s full decision here: