Rogers Communications Partnership et al. v. Society of Composers, Authors and Music Publishers of Canada, 2016 FCA 28

• Judge: Ryer, Webb and Near, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: Wednesday December 16, 2015
• Jurisdiction: Canada (Federal)
• Citations: 2016 FCA 28;(2016), 480 N.R. 325 (FCA)

Rogers Com. v. SOCAN (2016), 480 N.R. 325 (FCA)

MLB headnote and full text

Temp. Cite: [2016] N.R. TBEd. FE.004

Rogers Communications Partnership, Telus Communications Company, Bell Mobility Inc. and Quebecor Media Inc. (appellants) v. Society of Composers, Authors and Music Publishers of Canada (a.k.a. SOCAN) (respondent)

(A-141-15; 2016 FCA 28)

Indexed As: Rogers Communications Partnership et al. v. Society of Composers, Authors and Music Publishers of Canada

Federal Court of Appeal

Ryer, Webb and Near, JJ.A.

January 27, 2016.

Summary:

The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively Tariff 24) that required the plaintiffs to pay royalties to the defendant Society of Composers, Authors and Music Publishers of Canada (SOCAN) in respect of ringtones. The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under the Tariffs. The plaintiffs brought a consent motion to determine six legal issues relating to the validity of the Tariffs. They sought an order declaring that Tariff 24 was invalid because the transmission of ringtones to their subscribers did not involve the communication of musical works to the public under s. 3(1)(f) of the Copyright Act. Alternatively, they argued that the Board lacked jurisdiction to certify Tariff 24 in respect of ringtones. Further, the plaintiffs asserted that SOCAN had been unjustly enriched by royalties already paid under the Tariff, and that they were entitled to a tracing order. SOCAN's arguments included that the plaintiffs' claim was precluded by the doctrines of res judicata and estoppel.

The Federal Court, in a decision reported at (2015), 472 F.T.R. 208, reformulated the six questions and answered them as follows: (1) the plaintiffs' claim had not been finally decided against them (i.e., the claim was not res judicata); (2) a 2010 agreement between the plaintiffs and SOCAN did not prevent them from claiming the relief that they sought; (3) the internet transmission of a ringtone file did not constitute the communication of a musical work to the public; (4) the Board had jurisdiction to certify Tariff 24; (5) SOCAN had not been unjustly enriched by its receipt of Tariff 24 royalties; and (6) the plaintiffs were not entitled to a tracing order. The plaintiffs appealed. SOCAN cross-appealed.

The Federal Court of Appeal allowed both the appeal and cross-appeal in part. With respect to question 1, the conditions necessary for applying the doctrine of issue estoppel had not been made out. The trial judge had to determine whether, in the exercise of the judge's discretion, the doctrine should be applied in respect of the plaintiffs' claims. Questions two, five and six were not properly before the judge and should not have been answered because they were not pure questions of law. The cross-appeal from question 3 was dismissed as SOCAN had abandoned its appeal in that regard. With respect to question 4, the Board had jurisdiction to certify Tariff 24.

Administrative Law - Topic 554

Decisions of tribunal - Finality (functus officio) - Power of tribunal to amend or reopen decision - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of two Supreme Court of Canada decisions in 2012 relating to downloads of musical works, the plaintiffs applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On a motion to determine questions of law, SOCAN argued that the plaintiffs' claim had already been finally decided against them, based on the previous decisions of the Board and the Federal Court of Appeal - The motions judge disagreed, holding that the requirement of finality was not met as the Board decisions were "never really final" by virtue of s. 66.52 of the Copyright Act - The Federal Court of Appeal held that the finality criterion was satisfied with respect to the Board's decision to certify Tariff 24 (2003-2005) when the Supreme Court of Canada denied leave to appeal from the Federal Court of Appeal's affirmation of the Board's decision - Alternatively, the motions judge erred in his interpretation of s. 66.52 - Under the doctrine of functus officio, the Board was not permitted to reopen one of its decisions absent a slip or an error that ran counter to the Board's manifest intention in reaching its decision - Neither of these exceptions was relevant here - Section 66.52 did empower the Board to revisit its decision - In concluding that there had been no final decision, the judge determined that the 2012 Supreme Court of Canada decisions constituted a material change in circumstances, the occurrence of which empowered the Board to vary its decision to certify the tariff - The phrase "material change in circumstances since the decision was made" in s. 66.52 did not extend to jurisprudence that arose subsequent to the decision contemplated by that phrase - See paragraphs 69 to 83.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of two Supreme Court of Canada decisions in 2012 relating to downloads of musical works, the plaintiffs applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On a motion to determine questions of law, SOCAN argued that the plaintiffs' claim had already been finally decided against them, based on the previous decisions of the Board and the Federal Court of Appeal - The motions judge disagreed, holding that the requirement of finality was not met as Board decisions were "never really final" by virtue of s. 66.52 of the Copyright Act - The Federal Court of Appeal held that this was a matter of issue estoppel - The validity of Tariff 24 (2003-2005) and the ringtone download issue, upon which such validity was dependent, were finally determined when the Supreme Court of Canada denied leave to appeal from the Federal Court of Appeal's affirmation of the Board's decision to certify Tariff 24 (2003-2005) (the SCC decision) - The motions judge's conclusion that Board decisions were "never really final" did not support the conclusion that the SCC decision was not a final decision - Even if s. 66.52 empowered the Board to overturn its own decisions, that power did not enable the Board to overturn judicial decisions - The finality criterion of issue estoppel was satisfied and the judge erred in finding otherwise - See paragraphs 57 to 68.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of two Supreme Court of Canada decisions in 2012 relating to downloads of musical works, the plaintiffs applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On a motion to determine questions of law, SOCAN argued that the plaintiffs' claim had already been finally decided against them, based on the previous decisions of the Board and the Federal Court of Appeal - The motions judge disagreed, making reference to "previous decisions of the Board" - The Federal Court of Appeal stated that the motions judge's reference to previous Board decisions made it necessary to address the Board's decisions respecting the validity of Tariff 24 (2006-2013) in relation to issue estoppel and the finality issue - No application for judicial review of that decision was made - As such, its finality had to be determined without reference to a decision of a court - Without more, the effluxion of time for the making of a judicial review application rendered the decision final - Accordingly, the judge erred to the extent that he concluded the finality criterion was not met in respect of the Board's certification of Tariff 24 (2006-2013) - See paragraphs 84 to 87.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of two Supreme Court of Canada decisions in 2012 relating to downloads of musical works (Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (ESA) and Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada et al. (Rogers)), the plaintiffs (the corporations) applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On a motion to determine questions of law, SOCAN argued that the plaintiffs' claim had already been finally decided against them - The motions judge disagreed - The plaintiffs appealed - The Federal Court of Appeal stated that "For completeness, I reject the Corporations' argument that the Blackstonian principle must prevail over res judicata in the instant circumstances. They assert that, by virtue of the decisions in ESA and Rogers, SOCAN never had the right to collect royalties under Tariff 24. In my view, this assertion has no merit. ESA and Rogers did not address Tariff 24 (2003-2005) or Tariff 24 (2006-2013). In [Canadian Wireless Telecommunications Assoc. et al. v. Society of Composers, Authors and Music Publishers of Canada], this Court affirmed the validity of Tariff 24 (2003-2005) and the Supreme Court denied leave to appeal that decision. The Board certified Tariff 24 (2006-2013) and no judicial review of that decision was taken by the Corporations, even though they could have done so, on a timely basis, after the decisions in ESA and Rogers were rendered. ... While the reasoning that underpins ESA and Rogers may indicate that the determinations of the Ringtone Download Issue by the Board and this Court are suspect, or even incorrect, the validity of those decisions was not directly in issue before the Supreme Court of Canada in ESA and Rogers. In my view, the Blackstonian principle does not sanction the overturning of decided cases as a consequence of decisions in subsequent cases. ..." - See paragraphs 88 to 90.

Copyright - Topic 3436

Fees, charges or royalties - Determination of - Communication to the public by telecommunication (incl. cell phone ringtones) - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - The plaintiffs sued SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 - On a motion to determine questions of law, the plaintiffs argued that certifying Tariff 24 was beyond the Board's jurisdiction - The motions judge disagreed - The Federal Court of Appeal affirmed the motions judge's conclusion - In effect, the plaintiffs argued that the Board lacked the jurisdiction to certify a tariff if the Board made a mistake in the reasoning that underpinned its certification decision - That argument was misguided - Tariff certification was the Board's responsibility under the Copyright Act - If the Board certified a tariff on a basis that appeared to be erroneous, it was open to an affected party to initiate judicial review proceedings with a view to correcting the alleged error - Here, the Federal Court of Appeal considered complaints respecting the validity of Tariff 24 (2003-2005) and leave to appeal that decision to the Supreme Court of Canada was denied - With respect to Tariff 24 (2006-2013), the plaintiffs declined the opportunity to seek judicial review of the Board's decision - Indeed, pursuant to a 2010 Agreement, the plaintiffs agreed to support the approval of Tariff 24 (2006-2013) - Accordingly, the judge made no error in determining that the Board had jurisdiction to certify Tariff 24 - The court noted that the plaintiffs' Notice of Appeal did not raise this issue, although it was argued in their Memorandum of Fact and Law - The failure to raise this issue in the Notice of Appeal could have been a sufficient basis for the court to have disposed of this aspect of the appeal - However, the court considered the issue because SOCAN took no exception to the issue being raised only in the plaintiffs' Memorandum of Fact and Law - See paragraphs 101 to 106.

Copyright - Topic 5664

Copyright Appeal Board (now Copyright Board) - Jurisdiction - Respecting tariffs - [See Administrative Law - Topic 554 and first, second and fourth Copyright - Topic 3436].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - [See Administrative Law - Topic 554 and first, second, and third Copyright - Topic 3436].

Estoppel - Topic 386

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Issues decided in prior proceedings - The Copyright Board established Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) that required the plaintiffs to pay royalties to SOCAN in respect of ringtones - In light of two Supreme Court of Canada decisions in 2012 relating to downloads of musical works, the plaintiffs applied to the Board to vary its Tariff 24 decisions - The Board declined - The plaintiffs sued SOCAN for the recovery of ringtone royalties - On a motion to determine questions of law, SOCAN argued that the plaintiffs' claim had already been finally decided against them - The motions judge disagreed - The plaintiffs appealed - The Federal Court of Appeal held that the motions judge erred in determining that the criteria for issue estoppel had been met - That did not fully answer the question of whether the plaintiffs should be precluded from pursuing the action by virtue of issue estoppel - After a court had determined the existence of the preconditions to the operation of issue estoppel, it still had to determine whether issue estoppel ought to apply - The parties urged the court to undertake that exercise of discretion - However, this was better done by the trial judge - See paragraphs 91 to 94.

Estoppel - Topic 398

Estoppel by record (res judicata) - Res judicata as a bar to subsequent proceedings - Exceptions - Special circumstances - [See second Estoppel - Topic 386].

Income Tax - Topic 7963

Appeals to tax review board or Tax Court - Preliminary determination of question of law (incl. common questions) - Rule 220(1)(a) of the Federal Court rules provided that "A party may bring a motion before trial to request that the Court determine (a) a question of law that may be relevant to an action; ..." - The Federal Court of Appeal stated that "These authorities make it plain that Rule 220(1)(a) contemplates the determination of only pure questions of law. This limitation is not uniformly applicable to all courts. For example, Rule 58(1) of the Tax Court of Canada Rules (General Procedure) ... enables the Tax Court of Canada to determine preliminary questions of law, fact or mixed fact and law." - See paragraph 45.

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - [See Income Tax - Topic 7963].

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - Rule 220(1)(a) of the Federal Court rules provided that "A party may bring a motion before trial to request that the Court determine (a) a question of law that may be relevant to an action; ..." - The Federal Court of Appeal stated that " ... it is open to this Court to decline to consider the correctness of the Judge's answer to any question that does not properly fall within the purview of Rule 220(1)(a) of the Federal Courts Rules. ... In Thomas Fuller Construction Co. v. Canada [1992, FCA], this Court set aside an order of a judge who determined a preliminary question of law on the basis that the question of law was not properly raised in the pleadings. In my view, this Court's power to set aside a determination of a question of law that is not raised in pleadings is sufficient to enable the Court to set aside a determination of a question that does not constitute a pure question of law." - See paragraph 54.

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - The plaintiffs began an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) - On a motion to determine questions of law, SOCAN argued that the plaintiffs were precluded from denying their obligation to pay ringtone royalties given that they expressly agreed in 2010 to be bound by Tariff 24 until 2013 - The motions judge disagreed - The Federal Court of Appeal held that the motions judge should have declined to answer the question as it was not a pure question of law - The judge undertook a construction of the agreement - Contractual interpretation was a question of mixed fact and law - Additionally, the judge's conclusion was dependent on factual findings - See paragraphs 95 to 98.

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) - On a motion to determine questions of law, the plaintiffs argued that their payments of royalties for ringtone downloads unjustly enriched SOCAN because those payments were not legally required - The motions judge held that there had been no unjust enrichment - The Federal Court of Appeal held that the judge should have declined to determine the issue - In undertaking the analysis, the judge did not simply answer a pure question of law to simplify or shorten the trial - He undertook to decide one of the central issues raised in the action and made both findings of fact and mixed fact and law - The parties were requesting the court to pass judgment upon the judge's factual findings and to make additional fresh factual findings - To do so would be inappropriate in an appeal from an order that was supposed to have determined the answers to preliminary questions of pure law - See paragraphs 107 to 121.

Practice - Topic 5261

Trials - General - Trial of preliminary issues - Issues of law - The plaintiffs brought an action against SOCAN for the recovery of ringtone royalties that should not have been paid under Tariff 24 (2003-2005) and Tariff 24 (2006-2013) (collectively, Tariff 24) - On a motion to determine questions of law, the plaintiffs maintained that, if it failed in its argument on unjust enrichment, then SOCAN should be ordered to identify which of its members received ringtone royalties in order to enable the plaintiffs to recover from them directly - The motions judge held that the plaintiffs were not entitled to an order tracing the distribution of Tariff 24 royalties - The Federal Court of Appeal held that the motions judge should have declined to answer the question - The question could not be characterized as a pure question of law, much less one that could potentially shorten or eliminate a trial - This was at best a question of mixed fact and law - See paragraphs 122 to 125.

Practice - Topic 8800

Appeals - General principles - Duty of appellate court regarding findings of fact - [See fourth Practice - Topic 5261].

Practice - Topic 8800.1

Appeals - General principles - Duty of appellate court regarding findings of mixed law and fact by a trial judge - [See fourth Practice - Topic 5261].

Practice - Topic 8800.2

Appeals - General principles - Duty of appellate court regarding findings of law - [See second and fourth Practice - Topic 5261].

Practice - Topic 8808

Appeals - General principles - Duty of appellate court respecting conclusions or interpretation of trial judge (incl. contractual interpretation) - [See third Practice - Topic 5261].

Practice - Topic 9012

Appeals - Restrictions on argument on appeal - Issues or points not previously raised - [See fourth Copyright - Topic 3436].

Cases Noticed:

Canadian Wireless Telecommunications Assoc. et al. v. Society of Composers, Authors and Music Publishers of Canada (2008), 371 N.R. 272; 2008 FCA 6, refd to. [para. 20].

Bell Canada et al. v. Society of Composers, Authors and Music Publishers of Canada et al. (2010), 409 N.R. 102; 2010 FCA 220, refd to. [para. 29].

Shaw Cablesystems G.P. v. Society of Composers, Authors and Music Publishers of Canada - see Bell Canada et al. v. Society of Composers, Authors and Music Publishers of Canada et al.

Entertainment Software Association et al. v. Society of Composers, Authors and Music Publishers of Canada (2010), 406 N.R. 288; 2010 FCA 221, refd to. [para. 29].

Rogers Communications Inc. et al. v. Society of Composers, Authors and Music Publishers of Canada et al., [2012] 2 S.C.R. 283; 432 N.R. 1; 2012 SCC 35, refd to. [para. 32].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 41].

Berneche et al. v. Canada, [1991] 3 F.C. 383; 133 N.R. 232 (F.C.A.), refd to. [para. 43].

Perera et al. v. Canada, [1998] 3 F.C. 381; 225 N.R. 162 (F.C.A.), refd to. [para. 44].

Bruyere v. Canada (2005), 281 F.T.R. 221; 2005 FC 1371, refd to. [para. 50].

Fuller (Thomas) Construction Co. (1958) Ltd. v. Canada, [1992] 3 F.C. 795; 147 N.R. 313 (F.C.A.), refd to. [para. 54].

McLarty v. Minister of National Revenue (2002), 291 N.R. 396; 2002 FCA 206, refd to. [para. 55].

EnerNorth Industries (Bankrupt), Re (2009), 254 O.A.C. 235; 96 O.R.(3d) 1; 2009 ONCA 536, refd to. [para. 57].

Ernst & Young Inc. v. Central Guaranty Trust Co. (2006), 397 A.R. 225; 384 W.A.C. 225; 2006 ABCA 337, leave to appeal denied (2007), 369 N.R. 61 (S.C.C.), refd to. [para. 57].

Danyluk v. Ainsworth Technologies Inc. et al., [2001] 2 S.C.R. 460; 272 N.R. 1; 149 O.A.C. 1; 2001 SCC 44, refd to. [para. 65].

Chandler v. Alberta Association of Architects, [1989] 2 S.C.R. 848; 99 N.R. 277; 101 A.R. 321; 62 D.L.R.(4th) 577, refd to. [para. 70].

Minister of National Revenue v. Canada Trustco Mortgage Co., [2005] 2 S.C.R. 601; 340 N.R. 1; 2005 SCC 54, refd to. [para. 73].

Adar and Chill v. Canada (Minister of Citizenship and Immigration) (1997), 132 F.T.R. 35 (T.D.), refd to. [para. 74].

Canadian Association of Film Distributors and Exporters v. Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) Inc. et al. (2014), 465 N.R. 117; 378 D.L.R.(4th) 72; 2014 FCA 235, refd to. [para. 78].

Metro Can Construction Ltd. v. Minister of National Revenue (2001), 273 N.R. 273; 2001 FCA 227, refd to. [para. 79].

Ayangma v. Canada (2003), 313 N.R. 312; 2003 FCA 382, refd to. [para. 81].

Yeager v. Canada (Minister of Public Safety and Emergency Preparedness) et al. (2013), 453 N.R. 385; 2013 FCA 258, refd to. [para. 86].

Creston Moly Corp. v. Sattva Capital Corp., [2014] 2 S.C.R. 633; 461 N.R. 335; 358 B.C.A.C. 1; 614 W.A.C. 1; 2014 SCC 53, refd to. [para. 97].

Statutes Noticed:

Copyright Act, R.S.C. 1985, c. C-42, sect. 66.52 [para. 13].

Federal Courts Rules, rule 220(1)(a) [para. 42].

Counsel:

Gerald (Jay) Kerr-Wilson, Peter N. Mantas, Ariel Thomas and Yael Wexler, for the appellants;

D. Lynne Watt and Matthew Estabrooks, for the respondent.

Solicitors of Record:

Fasken Martineau DuMoulin LLP, Ottawa, Ontario, for the appellants;

Gowling Lafleur Henderson LLP, Ottawa, Ontario, for the respondent.

This appeal was heard at Ottawa, Ontario, on December 16, 2015, by Ryer, Webb and Near, JJ.A., of the Federal Court of Appeal. Ryer, J.A., delivered the following reasons for judgment for the court on January 27, 2016.