BC's Memorandum of Fact and Law - 19 Feb 2016 - Filed 22 Feb 2016 Searchable

8/19/2019 BC's Memorandum of Fact and Law - 19 Feb 2016 - Filed 22 Feb 2016 Searchable

1/31

Cotut

File

No.

A-293-15

FEDERAL COURT

OF

APPEAL

BET 'EEN;

The

Canadian

Copyright

Licensing

Agency

(Operating

as

Access

Copyright)

Applicant

Her

Majesty

The

Queen

in

Right

of

the Province

of

Alberta,

Her

Majesty

The

Queen

in

Right

of the

Province

ofManitoba,

The

Province

of

New Brunswick,

Her

Majesty

in

Right

of

Newfoundland and

Labrador,

Her

Majesty

The

Queen

in

Right

of

the

Province of

Nova

Scotia,

The

Government of

Nunavut,

Her

Majesty

The

Queen

in

Right

of

the

Province ofPrince

Edward

Island,

Her

Majesty

The

Queen

in

Right

of the

Province of

Saskatchewan,

Government

of

Yukon and

Her

Majesty

The

Queen

in

Right

of

the Province

ofBritish

Columbia

Respondents

MEMORANDUM OF FACT

AND

LA 'F

HKR

MAJESTY

THK OUEKN

IN RIGHT OF

THE

PROVINCE

OF

BRITISH

COLUMBIA

1, This is the

Memorandum

of

Fact

and Law

of

the

Respondent,

Her

Majesty

The

Queen

in

Right

of

the Province

ofBritish

Columbia

( BC' ).

2.

This

proceeding

is

an

application

by

The

Canadian

Copyright

Licensing

Agency

(

Access

Copyright

)

for

judicial

review of the

decision

of the

Copyright

Board

( the

Board

)

dated

May

22,

2015

in

respect

of two

proposed

tariffs ofAccess

Copyright.


2/31

3.

Access

Copyright

is a collective

society

within the

meaning

of section

70.1(a}

of the

Copyright

Act

( the

Act },

On March

31,

2004 Access

Copyright

filed a

proposed

tariff with the

Board

pursuant

to

sections

70.12

and

70.13of the Act with

respect

to royalties that it

proposed

to

collect,

for

the

years

2005

to

2009,

for

the

reprographic

reproduction,

in

Canada,

of

storks

in

its

repertoire

by

employees

of

provincial

and temtorial

governments,

other than

Quebec

{

he First

Tariff

).

This

was

the first

proposed

tariff ofAccess

Copyright

for

that class of

use.

The

First Tariff

was

published

in the

Supplement

to the

Canada

Gazette on

April 24,

2004.

4. Pursuant to section

67.1(5)

of the

Act,

BC

filed a

Statement of

Objections

to the First

Tariff

on

June

17,

2004.

On

March

31,

2009,

not

having

taken

any

further

steps

in

respect

of

the First

Tariff,

Access

Copyright filed

a

second

proposed

tariff

with

the

Board

pursuant

to

sections

70.12

and

70.13

of

the Act with

respect

to

royalties

that

it

proposed

to

collect, for the

years

2010 to

2014,

for

the

reprographic

reproduction,

in

Canada,

ofworks in its

repertoire

by

employees

of

provincial

and

territorial

governments,

other than

Quebec

{

he Second

Tariff

).

The Second Tariff was

published

in

the

Supplement

to

the

Canada

Gazette

on

May 9,

2009.

The

Second Tariff differed from

the First

Tariff in

that

it also

included

the

making

of

digital

copies

as a

class of licensed

copying.

5.

BC

filed

a

Statement of

Objections to

the

Second

Tariff with the Board

on

July

6,

2009.

Paragraph

7

of

BC's

Statement of

Objections

stated

B.C,

objects

to

the tariff

as

a

whole

as

extending

beyond

the

rights

under

section

3 of the

Copyright

Act

which

Access

Copyright

has the

right

to

license.

In

paragraph

9

of

its

Statement

of

Objections,

B.C.

objected

to

the

definition

of

Copy

as

being

overly

broad as

including

activities

beyond

the

rights

administered

by

Access

Copyright.

6.

Paragraph

14

of

BC's

Statement of

Objections

filed

July

6„2009

with

the

Board

stated,

B,C,

objects

to section

5

of

the

proposed

tariff,

'Additional

Limitations

Regarding Digital

Copies',

Notice of

Application

dated

June

22,

2015,

Applicant's Record

(' AR ),

Vol.

1,

Tab

1,

p.

1.

Applicant's

Supplementary

Application

Record

{ SAR ),

Vol.

1,

Tab

H,

p.

878.

SAR,

Vol.

I,

Tab

I,

p.

885.

SAR,

Vol.

1,

Tab

J,

p.

896.


3/31

as

being

unreasonable

and

overly broad,

and

not

taking

into account insubstantial

reproductions and

exempted

activities

under the

Copyright

Act.

'ithout

limiting

the

foregoing,

the

acts

required

under

sub-section

5(d)

are unreasonable and unjustified

having

regard

to

the license

granted

by

the

tariff

and

the

rights

which

Access

Copyright

is

licensing. 'ub-section

5(d)

of

the

Second

Tariff,

as

referred

to at

paragraph

151

of the

Board's

Decision, is

referred

to hereafter as

the

Deletion

Provision .

The Deletion Provision in

paragraph

5(d)

of

the

Second Tariff

states that

where the

Licensee is

no

longer

covered

by

a

tariff

for

the

making

and distribution of

Digital

Copies,

the

Licensee shall

immediately cease

to

use Digital

Copies

of

Published

'orks

in Access

Copyright's

Repertoire,

delete

from

their hard

drives,

servers or

storage

area networks,

and make reasonable

efforts

to

delete from

any

other

device

or

medium

capable

of

storing

Digital

Copies,

those

Digital

Copies

and

upon written

request from

Access

Copyright

shall

certify

that

it

has

done

so.

7,

BC

had

therefore

specifically

raised the

issue

of the

propriety

of

the

Deletion

Provision

and

the

proper

scope

of

the

rights

which

Access

Copyright

was

purporting

to

license

as

early

as

July

6,

2009.

8.

The

governments

of

Alberta,

Saskatchewan, Manitoba,

Yukon, Nunavut, Nova

Scotia,

Prince

Edward

Island,

New Brunswick and

Newfoundland

and

Labrador

elected to

be

jointly

represented.

They

are referred to

collectively herein as

the

Consortium ,

BC

elected to

be

represented

on its

own.

BC

and the Consortium

are,

collectively,

the

Objectors

and the Objectors

and Access

Copyright

are referred

to

herein

as

the

Parties .

9.

On

March

2,

2010,

the Board issued

a

Directive

on Procedure to

govern

the

conduct of

this

proceeding.

The Directive

provided

at

paragraph

5

for

the

filing

of

the

parties'tatements

of

Case

listing

the

parties'itnesses,

their

witness

statements,

expert

reports

and all other

evidence

upon

which the

party

intends

to

rely. In

particular, the

Directive on Procedure

required

in paragraph 5

(iv)

that

the

participants

include all

other evidence

on

which

they

intend to

rely

in

the

Statement

ofCase.

Paragraph

6

provided

for

reply

evidence to

be filed

by

the

collective

society

by

the date

set for that

'AR„Vok

1,

Tab

J,

p.

897.


4/31

purpose,

only

in

response

to

the evidence

filed

by

the

Objectors,

which

does not

include evidence

that

could

have been

filed

with the

case

in

chief.

Paragraph

9

of

the

Directive on Procedure also

provided

restrictions on

the

filing

of

documents

during

the hearing.

10.

In

2010,

Access

Copyright

and the

Objectors

agreed

to conduct

a

study

of

the volume

and

nature

of

published

works

reproduced

by

government

employees

(the

Volume

Study

).

On

December

17,

2010,

the Board

ordered that

a pretest

be

carried out

in order

to

assess the

overall

reliability

of

the Volume

Study.

The

pre-test

took

place

between

May 6,

2011

and

June

20,

2011 and

was

considered

satisfactory to

the

Parties,

11. Access

Copyright,

BC

and the

Consortium

concluded a

Memorandum

of

Understanding

dated February

17,

2011 to

govern

the conduct

of

the

Volume

Study.

The

results

of

the

Volume

Study

would

be

used to

provide

an

estimate

of the annual

volume of compensable

copying

of

published

works

in

the Access Copyright's repertoire

by

employees

of

the provincial

and territorial

governments

to

be

used

in

estimating

the

fair

market value of the

annual

royalty

for the First and

Second

Tariffs.

The Volume

Study

was

conducted in two

phases,

Phase I and Phase

II,

which were

completed

by

December 2011.

12.

The

parties

filed

their

Statements

of

Case

in advance of the

oral

hearing

which was

scheduled

for October

23,

2012.

BC's

Statement of

Case,

filed

August

31,

2009,

contained the witness

statement

of

Victoria Lester„Director

of

BC's

Intellectual

Property

Program.

Appendix

A

to

BC's

Statement of

Case

set

out

BC's

Additional

Changes

to

the

Proposed

Tariff.

In

paragraph

27

of

Appendix

A

to

BC's

Statement

of

Case,

BC

again

argued

against

the

Deletion

Clause as

follows:

Regarding Section

5,

'Additional Limitations

Regarding

Digital

Copies'f

the

Proposed

2010

Tariff,

B.C.

submits

that,

the Licensee

having

been licensed

to

make

digital

copies,

requiring

destruction

of

such

copies

when

a

tariff

has

expired

is

improper

and

unreasonable.

The

provision

SAR,

Vol.

1,

Tab

I,

p.

889.

'AR,

Vol,

1,

Tab

K,

pp.

956-958.

Board Decision,

para.

9,

AR,

Vol,

1,

Tab

4,

p.

3.

Consortium

Respondents'ecord

( CRR ),

Vol.

II,

Tab

B8,

p.

374.

4


5/31

should

therefore be

removed. 'aragraph

36

of

Ms.

Lester's

witness

statement

repeated

that

submission

and in

her

oral

testimony

at the

hearing,

Ms.

Lester

affirmed

the truth of

that

state-

ment.'ccess

Copyright

chose

not

to

cross-examine

Ms.

Lester on

her evidence

concerning

the

impropriety

and

unreasonableness

of

the

Deletion Provision.

13. In

its

May 4,

2012 Statement

of

Case,

Access

Copyright

chose

not

to

rely

on

the results

obtained

in the

jointly

designed

Volume

Study,

which showed

that government

employees

do

relatively

little

photocopying.'nstead,

Access

Copyright

proposed

a

tariff-setting

methodology

that

relied on

a

market

comparable

approach

based

on

royalty

rates

it

had

previously

negotiated

with the

federal

government,

the

governments

ofAlberta,

Saskatchewan and Ontario,

and an

agreement

between

Copibec

(a

related

copyright

collective based in

Quebec)

and the government of

Quebec.'

14.

In

its Statement

of

Case,

Access

Copyright

provided

evidence

of

its

inability

to

license

digital

copying

without the

Deletion Provision.

As

Exhibit

AC-2E

to

its Statement

of

Case,

Access

Copyright

provided

copies

of

its

standard

affiliation agreements

with

its

authors and

publisher

affiliates.

Both

types

of

standard

agreements

expressly

prohibit

Access

Copyright

from

licensing

digital

copying

of

published

works

in the

absence of the

Deletion

Provision.

Access

Copyright's

Standard

Affiliation

Agreements

promise

to

its

affiliates in

Appendix

A that

e

will...

provide

for

the deletion

of

all

digital

files

no

later

than

the termination

of

our

licence.

This

promise

is

made

both

for print-to-digital

uses

(pages

10, 22)

and

digital-to-digital

uses

(pages

11,

23).

It was

apparent

therefore since

the outset of the

proceedings

that

failure to

include

the Deletion Provision

would invalidate the license,

as was later

argued

by

Access

Copyright

in favour of

retaining it,

in

letters

to the Board dated

January

18,

2013

and

April 26,

2013 described

b eow 'R

Vol.

2,

Tab

7,

p,

418.

CRR,

Vol. II,

Tab

B2,

pp.

231-232.

Public

Transcript,

Vol.

8,

p.

1760;

CRR,

Vol.

II,

Tab

F,

p.

504,

Board Decision,

para.

515,

AR,

Vol,

1,

Tab

4,

p.

149.

Statement

of

Case,

Exhibit

AC-1,

SAR,

Vol.

1,

T'ab

M,

p.

982.

Exhibit

AC-2E,

Standard

Affiliation

Agreements,

Appendix A,

s.

3A(i)(ii)

and

s.

3B(i)(ii),

AR„

Vol,

2,

Tab

9,

pp,

455,456, 467,

468.

Exhibit

AC-26,

p,

6,

AR,

Vol.

2,

Tab

12,

p.

603;

Exhibit

AC-28,

p.

9,

AR,

Vol,

2,

Tab

15,

p,

642,

-5-


6/31

15. The

hearing

began

on

October

23,

2012 and lasted

8

days,

including

final

arguments.

The

record

was not

perfected

until

August 28,

2014 as the

Board

required

the Parties

to

provide

further

information and

perform

additional

analysis

and

calculations.

16.

On

October

24,

2012,

the

Board's

counsel delivered a

Tariff

Wording Process

Note

to the

parties

setting

out

the informal

process

that

the Board intended

to

implement

to deal with tariff

wording

and

administrative provisions.'he

parties

other than BC had

not

addressed

issues

with

the Tariff

Wording

in their

Statements ofCase.

Consequently

the

process specifically

directed

Access

Copyright

to

confirm

to the

Board

and

the

Objectors

the

extent to

which the

tariff

wording

and administrative

provisions

of the

original

proposed

statements should be used

in

the certified

tariff.

Access

will inform the

Board

and

the

objectors

of

any

changes

it

wishes

to propose.

Access

will also

explain

why

the Board should

accept

the

proposals

ofAccess on

tariff

wording

and

administrative provisions. It will address the

wording

and administrative issues

already

raised

by

the

objectors,

and

especially

those

raised

in

paragraphs

23 to

33

ofExhibit

BC-1. 's

noted

above,

paragraph

27

of

Appendix

A

to Exhibit

BC-1

dealt

with

BC's

objections

to

the

Deletion

Provision.

The

process

then

provided

for submissions

from

the

Objectors,

and

a

further

response

from Access

Copyright.

Counsel for the Parties were

given

the

opportunity

to

discuss the

process

and timelines,

following

which the

Hoard's

Order

of

November

26,

2012

was

issued. That

Order

of

the

Hoard

set a

schedule

governing

the

exchange

of

information

and

arguments

concerning

the

tariffs'dministrative

provisions.

Pursuant

to

the

Board's

Order of

November

26,

2012

the Parties

exchanged

submis-

sions

in

the

period

January

to

April,

2013.

17. On

January

18,

2013,

Access

Copyright

filed its submissions

concerning

the

tariffs'dminis-

trative

provisions. With

respect

to the Deletion

Provision

it

stated:

Access

Copyright

also notes that

the deletion of

digital

files

following the termination of a licence is

a

condition of

the

grant

of

rights

provided

by

Access

Copyright's affiliates

to

Access

Copyright.

See

AC-2E,

Appendix

A,

3A{i)(ii)

SAR,

Vol.

1,

Tab

24T,

p.

1051.

SAR,

Vol.

1,

Tab

24T,

p.

1051-1052.

AR,

Vol.

2,

Tab

11,

p.

597.


7/31

and

3B(i)(ii)

which

state that

Access

Copyright

will

'provide

for deletion of all

digital

files no later

than

the

termination

of

our

licence'...,

Based on the

grant

of

licence from

its

affiliates,

Access

Copyright

does

not

agree

to the amendment

proposed

by

BC.

18.

The

Objectors

made

their

submissions

arguing

for removal of

the Deletion Provision

on

March

28

and

29,

2013.BC maintained the

objection

to the Deletion

Provision

in

paragraphs

15 and

16

of its

submission on

the basis

that,

The

copyright

owner will

have

been

compensated

for the

making

of the

digital

copy.

The

legitimate

copy

so

made

by

the licensee then has become the

legitimate

physical

property

of

the licensee

just

as

in the

case

of a

paper

copy,

and

there is no

legal

reason

why

the licensee

should be

deprived

of

the

use

or

possession

of the

legitimately

made

copy

after

the

license

has

terminated.

The

continuing

possession

of

the

lawfully made

copy does

not

infringe

any

rights

of

the

copyright

owner

after

termination of

the license....

Further from

a

practical

standpoint

there would be no

way

for

BC

to effectively

monitor deletion of such

digital

copies

to

ensure

compliance

in the event

of

termination/expiry

of the

license.

More

importantly,

there

is the

policy

and

legislative

framework for the retention of records

by

the

BC

government

in the

Document

Disposal

Act

(RSBC 1996,

c.

99)

as described

in

paragraphs

17-22

of

BC's

Reply

legal

brief.

'he

Consortium also

argued

for removal of the

provision

and noted

that,

First,

it

is

a

practical

impossibility

for

government

offices to

track

which digital

files

in

its

possession

were made

pursuant

to a

particular

Access

Copyright

tariff. It

is

therefore

not

possible

for a government

office to

determine which

files

need to

be

deleted once the

proposed

tariff no

longer

applies.

19. Access

Copyright

filed its

reply

to

such submissions

on

April

26,

2013

and

again

stated

as

follows:

Access

Copyright

also

notes that

the

deletion of

digital

files

following

the termination

of

a

licence is

a condition

of the

grant

of

rights provided

by

Access Copyright's affiliates

to

Access

Copyright,

The evidence

that was filed

with the Board

at

the

hearing

on

this

point

is

set

out in the

January

18

Letter,

at

page

6.

Therefore,

based

on the

grant

of licence from its

affiliates, Access

Exhibit

AC-26,

p.

6,

AR,

Vol.

2,

Tab

12,

p.

603.

'xhibit

BC-12,

pp.

3-4,

AR,

Vol.

2,

Tab

14,

pp.

628-629.

Exhibit

Consortium-37,

p.

4,

AR,

Vol.

2,

Tab

13,

p.

616.

-7-


8/31

Copyright

does not

(and

cannot)

agree

to

the

deletion

of

section 5(d). It

was clear on

the

record

by

April 26,

2013 that

the

Objectors

opposed

the

Deletion Provision and

that

removal

of

the Deletion

Provision

would

negate

Access Copyright's

affiliates'rant

of a licence of

digital

rights,

and Access

Copyright had

been

given

at

least

two

opportunities

to

make

written

submissions

on

those

issues.

20.

On December

4,

2012,

the Board issued

two

notices,

The

first,

dated December

3,

2012,

asked the Parties to

make various

calculations,

submissions

on

value,

and

to clarify

certain

statements

made

by

Access in

previous

submissions. The second

notice asked

the

Parties to

4

provide

a

legal

brief to

address

issues

related to

exceptions

to

copyright,

and

to

comment on

the

Board's

statements

regarding

Access'epertoire.

'1,

The

responses

to the

first

notice

were

completed

by

February

1,

2013,

and those to the

second

notice

by

February

22,

2013.The Parties had

completed

making

their

submissions

regarding

administrative

provisions

by

April 26,

2013.

All

were

of the

view

that a

single

tariff could

be

certified

for the entire

2005-2014

period (the

Tariff

).

22. On

March

14,

2013,

the Board

issued

a

notice in which

it

asked the

Parties to

comment

on

calculations made

by

the

Board's

staff

with

respect

to

the

appropriateness

of

using

certain data from

the Volume

Study.

It also

expressed

a

preliminary

view on

the

events

captured

in the

Volume

Study

that should be

used

in the calculation of

a

royalty

rate,

and directed the

Parties

to submit additional

data

relating

to

those

events. Those submissions were

received

by

April 30,

2013.

On

May 6,

2013,

the Board ordered Access

Copyright

and the

Objectors

to

prepare

data samples and to

analyze

the

data from these

samples

with

respect

to

compensability

and

repertoire.

23.

On

May 27,

2013„

he Consortium

wrote to

the Board

informing

it that there

remained

a

discrepancy

of

four

copying events

between

the

sample

prepared by

it

and by

Access,

Subsequently,

Exhibit

AC-28,

p.

9,

AR,

Vol.

2,

Tab

15,

p.

642.

AR,

Vol.

2,

Tab

16,

p.

655,

'R,

Vol.

2,

Tab

18,

p.

696.

AR,

Vol.

2,

Tab

23,p.

868.


9/31

the

Parties filed an

agreement

in

which

they

agreed

that the

sample

consisted

of

291

copying

events.

The analyses

were

completed

by

August

6,

2013.

24.

On May

6,

2014,

the

Board

issued

an

Order

that

set

out

its

preliminary

view

that it

would not

include the

Deletion

Provision set

out

in section

5{d)

of

the

Second

Tariff and directed the

Parties

to

respond

to a

ntnnber

of

questions. Question

4 was

the

effect that

non-inclusion

of

this

condition

would

have

on

the

compensability

of

Digital

Copies,

including

whether Access

Copyright

could

issue

a

licence in

relation

to

the

Digital Copies

made

in

the

events

in the

Study .

25,

The Parties filed

responses

to

the

Board's

Order of

May

6,

2014 on

June

6,

2014.

Regarding

the

effect

that

non-inclusion

of

the Deletion

Provision

would

have

on

the compensability

of

Digital

Copies,

in

the

Objectors'iew,

non-inclusion of

the

Deletion Provision

would

render

the

making

of

digital

copies,

including

those made in the events

in the Volume

Study,

outside of

Access's

licence

and therefore

non-compensable.

26.

In its

June

6,

2014

responding

submission,

Access

Copyright

provided

justification

for the

Deletion Provision. Access

Copyright,

in answer to

Question

4,

reiterated its

January

28,

2013,

submission

that

the Deletion

Provision

was

a

condition of

its

grant

of

rights

from its

authors

and

publisher

affiliates. In answer to

Question

2„Access

Copyright

also

proposed

an amendment to the

provision,

Given the

date

upon

which the tariff would

likely

be

certified

(i,e.

after

December

31,

2014},

Access

Copyright

agreed

that

the Deletion

Provision

(section

5{d)}

in its

entirety

could

be

removed

from

the

tariff

to

be certified.

27.

Access

Copyright

also

advised the

Board,

in

answer to

Question

4,

that

Access

Copyright's

Board ofDirectors had authorized

the

licensing

of

digital

copies

without

the

Deletion Provision

and

that

it

would request

express

permission

from

its publisher

affiliates to

remove

the

Deletion

Provision

from

the

express grants

of

licensing

authority

in the

publisher affiliation

agreements.

In its

AR,

Vol.

1,

Tab

6A,

pp.

214-215.

AR,

Vol.

1,

Tab

6B,

pp,

231 and

242-243.


10/31

response,

Access

Copyright

stated

that

it

has

obtained

permission

from its

Hoard

of

Directors

to

authorize the

licensing

of

Digital Copies

under the

Proposed

Tariffs

without

the condition set

out

in

section

5(d}.

Access

Copyright

will

request

express

permission

from its

affiliates

to

remove this

provision

from

its

licences

and

we

reasonably

expect

that

permission

to

be

forthcoming. 'ccess

Copyright

also

submitted that it can

issue

a licence

in

relation to

the

digital copies

made in the

events

in

the

Volume

Study

even

without the Deletion Provision,

on

the basis

that

the condition is

unlikely

to be

triggered

and

on the

basis

that

it

has

received

approval

from

its

Board ofDirectors to

remove

the provision.

28.

In its June

6,

2014

submission,

the

Consortium's

position

was

that, although

it

would

prefer

that

the

tariff

cover

digital

works,

if

Access

Copyright

was

unable

to license

digital copying without

the

Deletion Provision,

the

copying

of digital

works

should not

be

considered

compensable,

Similarly,

British

Columbia's

submission noted

that

non-inclusion

of

the

Deletion

Provision

would

render

digital

copying

outside

of the

scope

of

Access

Copyright's

licence and therefore

render

digital

copying

non-compensable.

'9,

The Parties were

permitted

to

file

responses

to

each

other's

submissions

by

way

of further

submissions

on

June

13,

2014. In its

response,

regarding

Question

4,

Access

Copyright

stated that it

had

proposed

a

reasonable

compromise

in its June

6,

2014

submission

that

recognizes

there is no

need

to

require

the

deletion of

digital

copies

where

there

is no

further

infringing

use.

30.

In its

response

to Access

Copyright

regarding

the

Board's

fourth

question,

the

Consortium

disputed

Access

Copyright's

attempt,

in

its

June

6,

2014 submission,

to

retroactively build its

repertoire

of

rights,

arguing

that:

It

is fundamentally

unfair

to

build

a

tariff

on

rights

that a

copyright

collective

does

not

have. There is

no

way

for the Board to

certify

a

fair and

equitable

tariff based on

rights

that

do not

yet

exist, Collectives could

simply

propose

tariffs

that

license

anything

and

AR,

Vol.

1,

Tab

6B,

p.

219

—

221.

AR,

Vol.

1,

Tab

6B,

pp.

221-222.

'R,

Vol.

1,

Tab

68,

p.

231 and

242-243.

-10-


11/31

everything they

can think

of,

and

then

go

to

rights-holders

for

permission

afterwards if

they

get

a

favourable

royalty

rate certified

by

the

Board. This is an

unfair

way

to

proceed...

31.

The

Consortium

also

noted

in

its

submission

that

Access

Copyright

had not

filed

any

evidence of

permission

to

license

digital

copying

without

the Deletion

Provision,

that the

time

for

introducing

new

evidence

[was]

long

past , and that

Access

Copyright

could have

proposed

its

purported

'compromise'n

its

April 26,

2013

submission

on

the two

tariffs'dministrative

provi-

sions

when

the

issue

had

first arisen.

34

32. On

July

21,

2014,

the Board issued an Order

setting

out

its

preliminary

conclusion that

26

out

of

the

291

copying

events

identified

in the

Volume

Study were

compensable,

The

preliminary

list

of

compensable

copying

events

excluded

all

digital

copying

events.

The Board

requested

the

parties

to

make a

number

of

mathematical calculations,

which

related

to the total number

of

pages

copied,

per

FTE,

per

annum,

for each

genre

ofwork

during

the

years

covered

by

the First

and Second

Tariffs.

In

its

Order,

the Board

did

not refer

to

any

legal

conclusions it

may

have

reached, request

any

further

legal

submissions from

the

parties,

or raise the

issue

of

the

Deletion Provision.

35

33.

On

August

28,

2014,

Access

Copyright„

in addition to

providing

the mathematical

calcula-

tions

requested

by

the

Board,

filed

a

separate

letter

challenging

a

number of the

Board's

preliminary

conclusions

relating

to

the 26

compensable

copying

events. This

letter also informed the Hoard that a

majority

of the Access

Copyright's publisher

affiliates had

agreed

to

waive

the

Deletion Provision

with retroactive effect to

January

1,

2010,

the start date

of

the Second

Tariff.

34.

On

September

2,

2014,

the

Consortium and British Columbia

jointly

wmte to the

Board

objecting

to

Access

Copyright's

letter

of

August 28,

2014

on the

ground

that

it

went

beyond

the

AR,

Vol.

1,

Tab

68,

p.

249.

AR,

Vol.

1„Tab

6B,

p.

252.

AR,

Vol.

1,

Tab

6B,

pp,

253 and

255.

'R,

Vol.

1,

Tab

6C,

p.

270.

AR,

Vol.

1,

Tab

6D,

p.

273.


12/31

mathematical

calculations

requested

by

the Board in its

Order

of

July

21,

2014.

This

letter

requested

that Access Copyright's submissions

be ruled

procedurally

inadmissible. The

Board

subsequently

provided

Access

Copyright

with an

opportunity

to

respond,

with a further

right

of

reply

by

the

Consortium

and

British Columbia.

35. On

September

11,

2014,

the Board issued a

Ruling

that the representations in Access

Copyright's

letter

of

August

28,

2014,

were inadmissible

for

three reasons.

First,

Access

Copyright's

submissions on this

point

had

not

been

requested

by

the

Board

and were irrelevant to the calculations

sought

by

the Board.

Second, Access

Copyright's

submissions

came almost two

years

after

the

conclusion of

final

oral

arguments. And

third,

the

Applicant's

submissions were

entirely speculative,

The

Board

ruled

...we

dismiss

Access'ttempt

to

adduce new

evidence. The

issue

of

digital copying

was

live

from

the

beginning

of

the

2010-2014

tariff

proceedings.

In

the

sense that

the

evidence

can

be considered

to

be

new,

it is

only

so because Access has

waited

this

long

to seek

waivers

to the

provisions

in

its

agreement

with

affiliates.

Access

began

seeking

these

waivers

only

after

the Board

put

questions

to the

Parties

in relation to

s.5(d)

of the

2010-2014

Proposed

Tariff

in an

attempt

to

change

the

scope

of

its

authority

to

license

digital

uses,

Nothing

prevented

Access

from

doing

so

at

an earlier

stage,

36. The Board

released

its Decision on

May

22,

2015

certifying

a

single

tariff

for the

2005-2014

period.

The

Hoard

rejected

the market

comparable

approach

advocated

by

Access

Copyright

and

instead

applied

the

VTV

(volume times

value)

approach using

the

data from the

Volume

Study.

37.

W'th

respect to

the Deletion

Provision, the

Board

did not include

that

provision

in the

Tariff,

for reasons

that are set out at

length

in its

decision,

The effect of

exclusion

was

explained as

0

follows

at

paragraphs

164

through 167

of

the

Board's

decision:

AR,

Vol.

1,

Tab

6E,

p,

282,

AR,

Vol.

1,

Tab

6E,

p.

285.

AR,

Vol.

1,

Tab

6F„p.

293.

Board

Decision,

para.

156-159,

AR,

Vol.

1,

Tab

4,

pp.

59-60.

-12-


13/31

[164]

As

Access itself

stated,

' the

deletion of

digital

files following the termination

of

a

licence

is a

condition

of

the

grant

of

rights

provided

by

Access

Copyright's

affiliates

to

Access

Copyright. e believe this

to

be a

correct interpretation

of the effect

of

A g re m e t

with

affiliates,

which states

that

Access

may

license

print-to-digital

and

digital-to-digital

copying,

provided

that Access provide[s]

for

the

deletion of all

digital

files

no later than the termination of

our

licence.

[165]

It

is

clear from

this

response

that Access did

not,

at

the

time it filed

the

proposed

tariffs,

and still

does

not,

have the

authorization

from

all

—

or

perhaps

any

—

of

its

affiliates to license

the

making

of

digital copies

without such

a deletion requirement. Whether

the

Board of

Directors

has

authorized Access to do

something

or not

is

not sufficient.

Access'uthority

to

license

the

copying

of

a

work flows

from

a

licence

granted

by the owner

of

copyright;

~here

it

does not

have

such

a licence,

it has no

authority

to

license the

use itself.

Access'oard

of

Directors

cannot

grant

to

Access

rights

which

owners of

copyright

did

not

themselves

grant

to

it.

[166]

This

finding

does not

deprive

the

copyright

holder in the

works

so

copied

of

any

rights

and remedies

she

may

otherwise have.

These events

simply

represent

copying

for

which this

Tariff does not

provide

a licence,

and,

as a

result,

for which Access cannot collect

royalties

under

this

Tariff.

C.

Conclusion

[167]

Since

Access cannot

grant

a licence for the

making

of

digital

copies

without

the

presence

of

the Deletion

Provision, since

the Tariff

cannot

have

the

effect

of

providing

a

licence for uses that Access

itself

cannot

grant,

and since we

have

excluded

paragraph

5(d)

from

the

2010

Proposed Tariff,

the

making

of

digital

copies

is not

an

act that will

be

permitted

under the

Tariff,

and is

thus

not

compensable

for the

purposes

of establishing a

royalty

rate.

'8.

The

Board also excluded

from

compensable

events in

the Volume

Study

five

copying

events

on the

basis

that

they

exceeded

the

copying

limits

permitted

under the

proposed

tariffs. The

five


14/31

events

in

question

were

77,

119, 149,

180

and

234.

At

paragraph

171

and 172 the Hoard

stated

Copying

events where

the

work

copied

was within

Access'epertoire

must be

authorized under

the

Tariff for those

events

to

be compensable.

'here

the Tariff

has

limitations

whereby a

copying

event

in

the

Volume

Study would

not

be

permitted„

that event

is

not

compensable

for

the purposes

of

determining

the

royalty

rate for

this

Tariff.

Such

acts

of

copying

are

not

covered

by

the

Tariff,

and

remain

potential

acts of

copyright

infringement.

[172]To

count such

copying

as

compensable

would

have the

effect

of

making

the

Objectors

pay

for activities that

the

Tariff

does not

authorize.

Therefore, those events

that

would

not

have

been

authorized

by

the

Tariff,

had it

been in

place

at

the

time

when

the

copies

were

made,

are not

compensable

for the

purposes

of

the

Tariff.

39.

As

explained

at

paragraphs

173-176

of

the Board

Decision,

in

relation

to

books,

the

2010

Proposed

Tariff does

not

authorize the

copying

ofmore than 10

per

cent of a

work,

unless such

copying

is of

an entire

chapter

from a

book,

in which case

it does

not authorize

the

copying

of

more

than 20

per

cent of that book. In relation

to

genres

ofworks

not

identified in

paragraph

3(a),

the 2010

Proposed

Tariff does not

authorize the

copying

of

more

than

10

per

cent

of

that

work.

The

five

events

excluded

by

the

Board were

outside those

limits and

so

were

not

authorized

under

the

tariff

and hence

not

compensable,

and could

potentially

be

acts

of

copyright

infringement.

II.POINTS

IN ISSUE

40.

Access

Copyright

has

listed at Part Il of its Memorandum of Fact and Law the seven

points

which

it

considers to

be in

issue

in

this

judicial

review

application,

as

follows:

1. hatis the standard

of

review

to be

applied

with

respect

to

the

challenges

to the

Deci-

sion

advanced

by

Access

Copyright?

AR,

Vol.

1,

Tab

4,

pp.

61-62.

Board

Decision,

Table

2, AR,

Vol.

1,

Tab

4,

p.170.

AR,

Vol.

1,

Tab

4,

p.

63,

AR,

Vol.

1,

Tab

4,

p.

63-64.

-14-


15/31

2.

Did the

Board

exceed its

jurisdiction

by

removing

the

Deletion

Provision, the effect of

which was

removing

the

making

of

digital copies

as a

class of use

under the second

tariff

(2010-2014)'?

3.

as

Access

Copyright

denied

procedural fairness

in

the

manner

in

which

the

issue

of

its

authority

to

license

digital

copying

was

first

raised;

and was Access

Copyright

denied

a

meaningful

opportunity

to

present

its

evidence

responsive to

the

issue

and

have

such

evi-

dence

fully

and

fairly considered

by

the

Board?

4. Was

Access

Copyright

denied

procedural

fairness in

the manner

in which

the Board

ex-

cluded

five

copying

events

on the basis that

they

exceeded the

copying

limits under the pro-

posed

tariffs,

despite

neither the

Respondents

nor

the Board ever

having

raised

the

issue

pri-

or,

during

or

after the

hearing

?

5.

Was the

Board correct

in

concluding

that the issue of

what

constitutes

a

substantial

part

of a

work

may

be determined

solely

on

a quantitative

assessment

of

the

portions

copied

and

without

regard

to

whether

a substantial

part

of the

author's

skill and

judgment

has

been cop-

1ed?

6. asthe

Board

correct in

assessing

fair

dealing

without

regard

to the

recognized

eviden-

tial and

persuasive

burdens

or

misapplying

those burdens

given

the

evidence,

or absence

of

evidence„before it?

7. Was

the Board correct

in

determining

that

fair

dealing

is

to

be

assessed

without

consider-

ing

the

public

interest

in

balancing

the

objectives

of

the

Act;

that fairness

is

to be

assessed

in

an

atomistic

and

isolated

view

of

the fairness

factors;

and

that

the

qualitative nature

of

the

amount

of

the

dealing

and the

aggregate

volume of

copying

are

not

to be

considered

in the

fairness

assessment?

41.

While BC does

not

agree

that the

foregoing

list

accurately

and

precisely

outlines

the

points

in

issue,

it will

respond

to

each

in

turn with

any

required

clarification

of

the

issues.


16/31

III.

SUBMISSIONS

A. Standard of

Review

42. As

directed

by

the

Supreme

Court of Canada in

Canadian Broadcasting

Corp.

v. MDRAC

2003

Inc.,

2015

SCC 57

[ CBC j

at

paragraph

42, every

standard

of review

analysis

requires

identification

of

the

issues under review,

citing

Dunsmuir v. Sew Brunswick,

2008 SCC

9,

[2008j

1

S.C.R.

190

[ Dunsm~ir j

at

paras.

51-64.

43.

BC

will therefore address the

appropriate

standard

of review in

connection with each of the

points

in

issue

in

turn.

In

summary,

BC

submits that

the

standard

of

review

of

the

Board's

Decision

is the

reasonableness standard

in

respect

of issues

2,

5,

6

and 7

above,

and

the

correctness

standard in

respect

of issues 3

and

4,

albeit

applied

in the context

of the

Board's

proceedings.

B.

Board's

Jurisdiction

to

Not Include

the Deletion

Provision

i'1

Standard of

Review

44. At

paragraph

47(a}

of

Access

Copyright's Factum,

Access

Copyright

cites Dunsmuir as

authority

for

the

proposition

that

the

appropriate

standard

of

review

with

respect

to

issues

concern-

ing

the

Board's

jurisdiction to

alter

the

terms attached to

the

classes of use

prescribed

by

Access

Copyright

in

the

proposed

tariff

is the

standard

of correctness.

The

Supreme

Court of Canada in

Dunsmuir did indeed state that

[ajdministrative

bodies

must

also

be

correct in their

determinations

of true

questions

of jurisdiction

or vires... true jurisdictional

questions

arise where the tribunal

must

explicitly

determine whether

its

statutory

grant

of

power

gives

it the

authority

to

decide

a

particular

matter

(paragraph

59).

Subsequent

to Dunsmuir, however,

the

Supreme

Court of

Canada

has

clarified the

concept

of

true

jurisdictional

question

that was raised in

Dunsmuir,

and the

applicable

standard

of review that should attach to such

questions.


17/31

45.

In Canada (Canadian

Human

Rights

Commission)

v.

Canada

(Attorney

General),

2011 SCC

53, [2011j

3 S.C.R.

471,

the

Supreme

Court of

Canada

held that

issues which have

previously

been

considered to be

jurisdictional

should now

be

dealt

with

under

the

standard

of review

analysis

in

order

to

determine whether

a

standard

of

correctness or

of

reasonableness

should

apply, because

the

decision

maker

may

have

expertise

in

the

matter and be in a better

position

than

a court to determine

the

scope

of

its

jurisdiction.

If the

issue

relates

to

the interpretation and

application

of

the

tribunal's

own statute,

is within

its

expertise

and

does not raise

issues of

general

legal

importance„

the tribunal

will

be

entitled to deference and the standard of reasonableness will

generally

apply

and the Tribunal

will be

entitled

to deference

{paragraph

24).

46.

The

Supreme

Court

of

Canada

in

Alberta

(Information

and Privacy

Commissioner)

v.

Alberta

Teachers

'ssociation,

2011 SCC

61,

[2011j

3

S.C.R.

654 went

further and held

at

paragraph

39

that

[tjrue

questions

of

jurisdiction

are

narro~

and will be exceptional.

hen

considering a

decision of

an

administrative tribunal

interpreting

or

applying

its home statute,

it should be

presumed

that the

appropriate

standard

of

review

is reasonableness. As

long

as the

true

question

of

jurisdiction

category

remains,

the

party

seeking

to

invoke

it must be

required

to

demonstrate

why

the court

should not review a

tribunal's

interpretation of its home

statute

on

the deferential

standard of

reasonableness .

47.

The

Supreme

Court

of Canada in McI.ean

v. British

Columbia (Securities

Commission),

2013

SCC

67, [2013j

3

S.C.R,

895

at

paragraphs

19-33

affirmed the

presumption

that the

standard

of

reasonableness

applied

to a decision

marker's

interpretation of

its own

jurisdiction,

but held that the

presumption

was

not carved

in

stone

but

rather

rebuttable. It

is

the appellant's

burden

to

demonstrate

that the standard of correctness

should

apply

because the

issue

at

hand is

one that falls into the

exceptional

categories

warranting

correctness review.

48. Most

recently

in

CBC,

supra,

at

para.

39,

the

Supreme

Court

affirmed that

approach,

citing

Alberta

(Information

and

Privacy

Commissioner) v. Alberta Tea~hers

'ssociation,

supra

at

para.

34

that:

'hile

it

is

possible

to frame

any

interpretation

of

a

tribunal's

home

statute as a

question

of


18/31

whether

the

tribunal

has the

jurisdiction

to

take

a

particular

action,

this

Court

has

rejected

this

definition

of

jurisdiction in

the context of

standard

of review and

emphasized

that

the

category

of

'true

questions

of

jurisdiction',

if

it exists at

all,

is

narro~.

49.

Since

the

Copyright

Board in

this

case

is

interpreting

its

home

statute,

the

Copyright

Act

(in

particular

section

70,15

of the

Copyright

Act in

respect

of its

authority

to

make

alterations

to

the

royalties

and

to

the terms and conditions related thereto

as

the Board considers necessary }, the

presumption

is

that the

appropriate

standard

of review

is

reasonableness. Given

that

Access

Copyright

has not

rebutted that

presumption

by

sho~ing

that this issue

is

one of the

exceptional

instances

of

a

true

question

of

jurisdiction,

the

applicable

standard of review

in

respect

to this issue

should

be reasonableness.

50.

See

also

Neighbouring Rights

Collective

of

Canada v.

Society

of

Composers,

Authors

and

Music

Publishers

of

Canada,

2003 FCA

302,

I'2004]

1

F'CR

303,

at

para

63:

As

for the

purpose

of

subsection

68(3}

itself,

Parliament

presumably

intended

it to

equip

the

Board

with the

powers

necessary

to enable

it

to

implement

its

decisions in an

effective

and

efficient

manner.

Hence,

it

conferred

a

very

wide discretion

on

the

Board

to

certify

royalties, including,

in the

case

of

NRCC

tariffs, the

power

to

take

into account such factors as it

considers

appropriate.

Review

on a standard

of

correctness

would

be

incompatible

with these

purposes.

ii)

Did the Board Have

Jurisdiction to

Not

Include the

Deletion Provision

l

51. Access

Copyright

characterizes

this

issue as whether the Board

had

jurisdiction to

remove

the

Deletion Provision

from

the

proposed

tariff,

The

issue is

not whether

the Board had

jurisdiction

to

remove

digital

copying

as a class of

use

from

the

Tariff„since

that is not what the

Board did. The

Board

concluded

that

the

Deletion Provision

was

not

a

fair

and

reasonable

term

to be

included

in the

Tariff,

and

so

did

not include

it.

The inevitable

result

of that decision

was

that

digital

copying

of

works

for the

period

of the

Tariff

were

not

within

Access Copyright's

repertoire and hence were

not

compensable.

As

clearly

indicated

by

the

Board, digital

copying

is

open

to Access

Copyright

as a


19/31

class

of

use

in future tariffs,

should such

copying

fall

within the

rights

licensed

from

its

affiliates and

reciprocal

collectives,

'5

52.

Thus

in

fulfilling

its mandate with

respect to

the

Tariff,

the

Board

decided

what

were the fair

and

reasonable

terms and

conditions of the

license granted

under the

tariff,

as

is required

of

the

Board under s.

70.15

of

the

Act

and

is

directly

within the

Board's

jurisdiction. In order to

arrive

at

the

appropriate

royalty

rate,

it

was also

necessary

for the Board to

determine which

works

covered

in

the

Volume

Study

were

within

Access

Copyright's

repertoire,

and

were

compensable,

which

again

is

squarely

within the

Board's

jurisdiction.

The

Board concluded

that once

the

fair

and

appropriate

terms of

the

Tariff were

determined, Access

had no digital

copying

within its

repertoire

at

the

relevant

times.

53.

In

fact,

recent

jurisprudence

of this Court specifically

supports

the

position

that the Hoard has

the

power

not

to include

a

term

contained in a

proposed

tariff in

carrying

out

its

mandate

of

certifying

such tariff. In

Society

of

Composers,

Authors and

Music Publishers

of

Canada

v,

Bell

Canada,

2010

FCA

139,

84 C.P.R.

(4th)

157

t Bell

Canada' ],

the issue

considered

by

the Federal

Court of

Appeal

on

judicial

review

was

whether the

Board exceeded its

jurisdiction in

certifying

Tariff

22,

but without including

in it one

of

the

tariff

Items

(the

item

that related

to

Other

Sites

)

that

was

part

of

Tariff

22.

The

Court held that

the Board

did

not

exceed its jurisdiction

by

excluding

from

the certification process

the

Item that related to

Other

Sites

and

stated:

The Board is

invested with

the

power

to

approve

a

proposed

tariff and the

duty

to

certify

it

once

approved,

In

exercising

this

function,

the Board

possesses

the

power

to make

such

al-

terations

to

the

royalties

and

to

the terms and conditions

thereto as

the Board considers

nec-

essary :

see

subsection

68(3)

of the Act.

This is

precisely

what

the Board

did.

(Paragraph 18)

'oard

Decision,

para.

170,

AR,

Vol.

1

Tab

4,

pp.

62-63.

-19-


20/31

In

exercising

its

jurisdiction

to

approve

the

proposed

Tariff

22,

the Board found

it

necessary

to

exclude from the

certification

process

the Item

that

related

to

Other

Sites .

It

provided

abundant,

elaborate and

cogent

reasons for

this

exclusion.

(Paragraph

19)

That the

Board's

obligation

in

considering a

demand for the certification

of a

proposed

tariff

is

to

approve

and

certify

a fair and reasonable tariff

is not

disputed.

This is inherent

in

its

obligations

to balance the

competing

interests of

copyright

holders,

service

providers

and

the

public:

see

Neighbouring

Rights

Collective

of

Canada v.

Society

of

Composers,

Authors

4

Music

Publishers

of

Canada,

supra,

at

paragraph

42.

(Paragraph 25)

It is

true: subsection

68(3)

stipulates

that

the Hoard

shall

certify

the

tariffs

as approved.

However, I

cannot see

how

the

use of

the word

shall

can and

~ould

oblige

the

Boa~d to

certify

a

tariff

that it

cannot

approve

because

of a lack of or

insufficient

evidence

to

meet

the

legal

requirements for

approval.

(Paragraph 28)

Even if

I

assume,

as contended

by

SOCAN,

that

the

'Other

Sites

Item must

be seen

as

a

tar-

iff of its own

and,

therefore, that the

Board

refused

to

certify

that

tariff,

I

would conclude

for

the

reasons

already

stated that the

Board

was

justified

in

refusing

to

certify

it.

Surely„

it was

not

the intention of Parliament that the

Board

certify

an

unapproved

and

unapprovable

tariff.

(Paragraph

29)

54.

The critical

language

of

subsection

68(3)

of

the Act which

was

under

consideration in Bell

Canada is the

same as that under consideration

under s.70.15of the Act: The Board shall

certify

the

tariffs as

approved,

with such

alterations

to

the

royalties

and

to

the

terms

and conditions related

thereto as the Board

considers

necessary, having regard

to

any

objections

to

the tariffs,

55.

The

Board therefore

was

clearly acting

within its

jurisdiction

in not

including

the Deletion

Provision

in the Tariff as

being

unfair

and unreasonable. Access

Copyright

does

not

argue

on this

judicial

review

application

that

the

Board's

decision

that

the

Deletion

Provision

was

unfair and


21/31

unreasonable was incorrect or

unreasonable.

Indeed Access

Copyright

eventually

agreed with

that

conclusion in its own submissions

to

the Board.

Having

come to

that decision, the

Board's

inevitable

conclusion

was

that the

Deletion Provision could not

be included,

and so

digital

copying

ofworks

for

the

period

of

the

Tariff

were

not

within

Access

Copyright's repertoire

and

hence

were

not

compen-

sable.

C. Breach of

the

Duty

of Procedural

Fairness

i)

Standard of Review

56.

This Court has held that the

appropriate

standard

of

review with

respect

to

issues

of

procedural

unfairness

is

the

standard

of

correctness:

Netfiix,

Inc. v.

Society

of

Composers,

Authors

and Music

Publishers

of

Canada, 2015

FCA 289

[ Netj7ix ],

at

paragraph

35,

citing Re:Sound

v.

Fitness

Industry

Council

of

Canada,

2014 FCA

48, paragraph

34

j Fitness

Industry

];

and Ehosa v.

Canada (Minister

of

Citizenship

and

Immigration),

2009 SCC

12,

paragraph

43. However

the Court

in

Netflix,

citing

Fitness

Industry,

stated

Administrative

decision

makers

enjoy

great

latitude in

setting

their

own

procedure, including

aspects

that fall within

the

scope

of

procedural

fairness

such

as whether a

request

for

adjournment

should be

granted,

the extent of disclosure

by

parties,

the

extent

of

cross-examination

that will

be

allowed

and

whether

representations

by

a

lawyer should

be

allowed,

Context

and circumstances will dictate the

breadth of

the

decision-

maker's

discretion on

any

of

these

procedural

issues,

and whether

a

breach of

the

duty

of

fairness

occurred

(Fitness

Industry,

paragraph

37).

57. Two

issues in Fitness

Industry

were

whether the

Copyright

Board

breached

the

duty

of

fairness

by

basing

Tariff 6.8 on

a

ground

that was

not

considered

during

the

hearing

and on evidence

that

Re:

Sound had no opportunity

to

address.

The

Federal

Court

of

Appeal affirmed

that

the

applicable

standard of

review

for issues of

procedural

fairness is correctness.

However, the Court

made

clear that

a reviewing court should

give

considerable

weight

to

decision-makers'iscretion

over

their procedure:


22/31

In

short,

whether

an

agency's

procedural arrangements,

general

or

specific,

comply

with the

duty

of fairness

is for

a

reviewing

court

to

decide

on the correctness standard, but

in

making

that

determination

it must be respectful

of the

agency's choices. It

is thus

appropriate

for

a

reviewing

court

to

give

weight

to

the manner

in

which

an

agency

has sought

to

balance

maximum

participation

on

the one

hand,

and

efficient

and effective

decision-making

on the

other.

In recognition

of

the agency's

expertise,

a

degree

of

deference

to an

administrator's

procedural

choice

may

be

particularly

important

when the procedural

model of the

agency

under review differs

significantly

from the

judicial

model

with

which courts are

most

famil-

iar,

(Paragraph

42).

58. Fitness

relies on

Baker v. Canada

(Minister

of

Citizenship

and

IrnntE'gration),

1999 SCC

699,

[1999j

2 S.C.R.817

[ Baker j,

at

paragraph

27,

where

the

Supreme

Court

included

the

deci-

sion-maker's

procedural

choice and

agency

practice

as factors

that courts must

take

into

account

when determining

the

contents

of the

duty

of

fairness

in

any

context. The

Court

stated

that

important

weight

must be

given

to

the choice of

procedures

made

by

the

agency

itself

and

its

institutional

constraints.

59.

Similarly, the

Supreme

Court in Council

of

Canadians with

Disabilities

v. VIA

Rail

Canada

Inc., 2007

SCC

15,

[2007j

1

S.C.R.

650

stated

at paragraph

231

that:

Considerable deference is owed to

procedural

rulings

made

by

a

tribunal with the authority

to

control its own

process.

The

determination of the

scope

and

content

of a

duty

to act

fairly

is

circumstance-specific,

and

may

well

depend

on

factors

within the expertise

and

knowledge

of

the

tribunal,

including

the nature

of

the

statutory

scheme and the expectations and

practices

of the

Agency's

constituencies.


23/31

ii)

as

there a

Breach of

Procedural Fairness

—

Deletion Provision

60. Access

Copyright

poses

this

question

as to whether

Access

Copyright

was denied

procedural

fairness

in

the manner

in

which the

issue

of

its authority

to

license

digital

copying

was

first raised;

and

was

Access

Copyright

denied

a

meaningful

opportunity

to

present

its evidence

responsive

to the

issue and

have such

evidence

fully

and

fairly

considered

by

the

Board?

61.

Access

Copyright

as

early

as

January

18,

2013 had

clearly

raised the

issue

that it is not

authorized

to licence

any

digital

copying

of its

affiliates'orks

without

the

corresponding

require-

ment

to delete

such

digital

files

upon

termination of

the

licence.

See

paragraphs

14,

17

and

19 above.

On

Access

Copyright's own

admission

therefore, prior

to

Question

4

being

raised,

non-inclusion

of

the

Deletion Provision

would render the

making

of

Digital

Copies,

including

those

made in

the

events

in

the

Volume

Study,

outside

of

Access Copyright's

licence

and

non-compensable. That fact

was raised

by

Access

Copyright

itself as a

reason

why

the

Deletion Provision had to be included,

62.

Moreover the issue

of

the

propriety

of

the

Deletion Clause

had been

alive from

the outset of

the

Second Tariff. BC

specifically

objected

to

it in

its

Statement

of

Objections,

it was raised

in

BC's

Statement

of

Case,

BC's

witness

Victoria Lester provided

evidence

opposing

it at the

hearing,

and

the

Objectors

made

detailed

submissions on

the

objection

in

the course

of

post-hearing

submissions

on the

tariff provisions,

63.

The Board

gave

the

Parties

full

opportunity

to

make

submissions

specifically

on the

propriety

of

including

the Deletion

Provision

and the effect of its

exclusion,

The

Board's

Order ofNovember

26,

2012

set a

schedule

governing

the

exchange

of information and arguments concerning

the

t ai f f s dmin s r aiv e

provisions,

and

pursuant

to

that

Order

the

Parties

exchanged

submissions

in

the

period

January to

April,

2013,

including

submissions

specifically on

the

propriety

of

including

the

Deletion Provision.

As a

result of

those

submissions the Board,

on

May 6,

2014,

issued an

Order that

set out its

preliminary

view

that it

would

not

include

the

Deletion Provision and

directed

the

Parties

to

respond

to

a

number of

questions

including

Question

4,

as to

the

effect that

non-inclusion

of this

-23-


24/31

condition

would

have on

the

compensability

of

Digital

Copies,

including

whether

Access

Copyright

could

issue a licence in

relation

to

the

Digital Copies

made in the

events

in the

Study .

The Parties

made full submissions in

response

on

June

6,

2014 and

made further

reply

submissions

on June

13,

64. The

Board's

Order of

July 21,

2014

listed the

26

copying

events which it

considered

compensable.

In

its

Order,

the Hoard did not

request

any

further

legal

submissions

from

the

parties,

nor

raise the issue of the

Deletion Provision. The Order

simply

directed

the Parties

to make certain

mathematical

calculations. Yet

on

August

28,

2014,

Access

Copyright,

in

addition to

providing

the

mathematical calculations

requested

by

the

Board,

filed a

separate

letter

challenging

the

Board's

preliminary

conclusions

relating to

the 26

compensable

copying

events.

65. The

Objectors

objec

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