T-2963-89
CTV Television Network Ltd. (Applicant)
v.
Copyright Board and Performing Rights Organi
zation of Canada Limited, and Composers,
Authors and Publishers Association of Canada
Limited (Respondents)
INDEXED AS: CTV TELEVISION NETWORK LTD. V. CANADA
(COPYRIGHT BOARD) (T.D.)
Trial Division, Cullen J.—Toronto, February 14,
15, 16; Ottawa, April 12, 1990.
Copyright — Application to prohibit Copyright Board from
considering network tariff of royalties for TV performances of
dramatico-musical or musical works — Whether Board
exceeding jurisdiction — Such tariff denied in 1968 S.C.C.
case — Recent statutory amendments cosmetic, not expanding
Board's role — Neither s. 49 nor 50.1 availing respondents.
This was an application for a writ of prohibition to prohibit
the Copyright Board from taking any further proceedings
leading to consideration, adoption or publication of tariff 2.A.2
in connection with commercial television network transmission
pursuant to respondent performing societies' statements of
proposed royalties, on the ground that the Board lacked juris
diction. While individual stations pay royalties based on their
advertising revenues, it was estimated that millions of dollars of
advertising revenues received by the network are not taken into
account for royalty purposes by CTV. In seeking a network
tariff to provide compensation for performances or communica
tion by telecommunications of dramatico-musical or musical
works in which they owned performance rights, the Societies
argued that legislative changes had given an expanded jurisdic
tion to the Copyright Board and that a 1968 Supreme Court of
Canada case no longer supported denial of the proposed tariff.
Held, the application should be granted.
Recent amendments to the Act in relation to the Copyright
Board were cosmetic and would not lead to a different conclu
sion than that in Composers, Authors and Publishers Assoc. of
Canada Limited v. CTV Television Network Limited et al.,
[1968] S.C.R. 676 ("CAPAC'). The amendments merely
streamlined the procedure, increased staff and made the pro
cess more administratively efficient in dealing with an
increased workload.
The Copyright Act established the Board as a regulatory
agency with power only to set rates and Parliamentary inten
tion had not expanded that role. Posen v. Minister of Consumer
and Corporate Affairs Canada, [1980] 2 F.C. 259 (C.A.) is
still good law. The purpose and function of the Copyright
Board is different from bodies such as the Canadian Human
Rights Commission or the Canadian Labour Relations Board
which have statutory power to decide their own jurisdiction.
The respondent societies could not file the proposed tariff
under section 49 of the Act as it does not deal with a perform
ing right. In CAPAC, the Supreme Court of Canada noted that
what was communicated by the CTV Network to its affiliated
stations was not "the musical works" but "a performance of the
works". Inserting the word "telecommunication" into the Act
did not change that decision.
Section 50.1 was not available to the respondent Societies as
existing performing societies are specifically excluded there-
under as not being "licensing bodies". Even if the respondent
societies were licensing bodies within the meaning of section
50.1, they had not met all necessary pre-conditions in the Act
for filing the tariff as they had not attempted to reach a
negotiated settlement regarding royalties as implied by section
50.2.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
An Act to amend the Copyright Act and to amend other
Acts in consequence thereof, S.C. 1988, c. 15.
Canada Human Rights Act, S.C. 1976-77, c. 33.
Canada Labour Code, R.S.C., 1985, c. L-2, ss. 15, 16.
Canada—United States Free Trade Agreement Imple
mentation Act, S.C. 1988, c. 65, ss. 61-65.
Canadian Human Rights Act, R.S.C., 1985, c. H-6, s. 41.
Copyright Act, R.S.C. 1970, c. C-30, ss. 3(1)(f) (as am.
by S.C. 1988, c. 65, s. 62(1)), 3(1.4) (as added idem s.
62(2)), 49 (as am. by S.C. 1988, c. 15, s. 12), 50 (as
am. idem, s. 13), 50.1 (as added idem, s. 14), 50.2 (as
added idem).
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
CASES JUDICIALLY CONSIDERED
FOLLOWED:
Posen v. Minister of Consumer and Corporate Affairs
Canada, [1980] 2 F.C. 259 (C.A.).
CONSIDERED:
Composers, Authors and Publishers Assoc. of Canada
Limited v. CTV, [1968] S.C.R. 676.
REFERRED TO:
Canadian Football League v. Canadian Human Rights
Commission, [1980] 2 F.C. 329 (T.D.).
COUNSEL:
Gordon J. Zimmerman and Gayle Pinheiro
for applicant.
T. Gregory Kane and C. Craig Parks for
respondent Copyright Board.
Y A. George Hynna, C. Paul Spurgeon and
Andrea F. Rush for respondents Performing
Rights Organization of Canada and Compos
ers, Authors and Publishers Association of
Canada Ltd.
SOLICITORS:
Borden & Elliott, Toronto, for applicant.
Stikeman, Elliott, Ottawa, for respondent
Copyright Board.
Gowling, Strathy & Henderson, Ottawa, for
respondents Performing Rights Organization
of Canada and Composers, Authors and Pub
lishers Association of Canada Ltd.
The following are the reasons for order ren
dered in English by
CULLEN J.: This is an application for a writ of
prohibition against the respondent Copyright
Board to prohibit the Copyright Board from
taking any further proceedings which might lead
to the consideration, adoption or publication of
Tariff 2.A.2.
On February 21, 1990 an order was granted by
this Court to stay the Copyright Board from any
consideration or publication of any proposed tariff
for the collection of fees or royalties by the Per
forming Rights Organization of Canada Limited
and Composers, Authors and Publishers Associa
tion of Canada Limited filed pursuant to the provi
sions of section 50 (s. 70) ' of the Copyright Act
[R.S.C. 1970, c. C-30 (as am. by S.C. 1988, c. 15,
ss. 13, 14)] until a final decision of this Court,
' The section numbers appearing in brackets refer to the
numbering sequence used in the proposed amendments, and
were referred to by counsel during the course of the hearing of
the motion.
including the Federal Court of Appeal.
The applicant, CTV Television Network Ltd.
(hereinafter referred to as "cTv") is a privately
owned broadcasting network involved in the de
velopment, distribution, and communication of
entertainment programming to its affiliated sta
tions across Canada. The respondent Copyright
Board (hereinafter referred to as the "Board") is a
regulatory tribunal established pursuant to the
Copyright Act, R.S.C., 1985, c. C.-42 (hereinafter
referred to as the "Act"). The respondents, Per
forming Rights Organization of Canada Limited
("PROCAN") and Composers, Authors and Pub
lishers Association of Canada Limited ("CAPAC")
(CAPAC and PROCAN hereinafter referred to col
lectively as the "Societies") are performing right
societies which own the performance rights to a
wide variety of musical works in Canada. These
two bodies are currently in the process of merging,
and carry on the business of collective administra
tion of performing rights on behalf of composers,
authors, and publishers of musical or dramatico-
musical works.
On September 1, 1989 the Societies filed with
the Board statements of proposed royalties to col
lect compensation for the performance or the com
munication by telecommunication in Canada of
dramatico-musical or musical works in which the
Societies owned the performance rights. Included
in the proposed statements were Tariff 2.A.1
which applied to television stations, and Tariff No.
2.A.2 which applied to commercial television net
works. It is Tariff 2.A.2 which is the cause for
concern in this case.
To best understand the issue at hand, it is
necessary to look at the existing relationship be
tween networks and performing societies. The CTV
network provides programming to affiliated televi
sion broadcasting stations. The programming
which CTV provides to its affiliated stations is
either produced by CTV, acquired from Canadian
and foreign producers, or acquired from their
affiliate stations for distribution throughout the
network. CTV then distributes it to its affiliate
stations using the facilities of telecommunications
carriers (i.e. Bell Canada or Telesat Canada), over
scrambled satellite signals. The receiving stations
communicate the works to the public by telecom
munication via broadcasting transmitters.
The reason that this sequence of transmission is
so important is its relationship to the payment of
royalties for the use of musical works. Individual
stations pay royalties to performing societies cal
culated as a percentage of the gross advertising
revenues of each station. However, a substantial
amount of advertising revenue received by televi
sion networks are not subject to royalties. Michael
Rock, General Manager of CAPAC estimated that
cry's advertising revenues are many millions of
dollars per year, and that much of this revenue is
never taken into account for royalty purposes.
This is in no way a new occurrence. These very
performing societies were denied a similar network
tariff by the Supreme Court of Canada in the case
of Composers, Authors and Publishers Assoc. of
Canada Limited v. CTV (Television Network
Limited et al., [1968] S.C.R. 676 (CAPAC v.
CTV). When recent amendments were made to the
Act, the Societies again applied to fix a tariff to
collect royalties pertaining to networks (the pro
posed Tariff 2.A.2). The Societies asked the Board
to certify its approval of the tariff for network
transmissions. The applicant has challenged this
request, contending that the Copyright Board does
not have jurisdiction under the Act to consider
Tariff 2.A.2.
Upon an application for prohibition, the sole
issue to be determined is whether the inferior
tribunal had the power to do that which it purport
ed to do. By the arguments presented by all the
parties involved, it does not appear to be in dispute
that this Court can issue an order of prohibition, if
the Copyright Board has in fact exceeded its juris
diction. Therefore the Court must determine if this
Board has exceeded its jurisdiction.
The applicant has argued that the Board should
be prohibited from proceeding with any further
proceedings on proposed Tariff 2.A.2. as it has
been granted no power by Parliament under the
Act which would give it the authority to determine
its own jurisdiction. This Board is only empowered
with a broad jurisdiction to establish a fee, rate, or
royalty. When the Board purports to consider any
matter incidental to the performance of that func
tion and outside of the rate fixing function, the
powers of the Board must be construed narrowly
by the courts.
The cases which speak to the jurisdiction of the
Copyright Appeal Board (a predecessor to the
Copyright Board) are most notably CAPAC v.
CTV supra and Posen v. Minister of Consumer
and Corporate Affairs Canada, [1980] 2 F.C. 259
(C.A.). In Posen, supra the Court stated that the
only matter entrusted to the Board under the Act
[R.S.C. 1970, c. C-30] was the establishment of
the quantum of rates to be imposed on users of
copyright works. I quote Heald J. in Posen, supra
who stated at page 261:
In my view, the sole function of the Board is to fix the rates
which the performing rights societies can charge. [Emphasis
added.]
Now in citing these cases, I am well aware of
the respondents' argument that such cases are of
limited use in light of the recent amendments to
the Act. The respondents assert that the jurisdic
tion of the Board is not the same as its predeces
sor, the Copyright Appeal Board. The recent legis
lation of An Act to amend the Copyright Act and
to amend other Acts in consequence thereof, S.C.
1988, c. 15 and of the Canada—United States Free
Trade Agreement Implementation Act, S.C. 1988,
c. 65 [ss. 61-65] have been cited as evidence of a
significantly expanded jurisdiction for the present
Board.
I have conducted a very careful review and
comparison of the amendments made to the Act,
and conclude that any changes to this Act in
relation to the Copyright Board are merely cos
metic. There is nothing in the Act that goes so far
as to expand the Board's jurisdiction. The amend
ments merely streamline the procedure, increase
staff, and make the process more administratively
efficient to deal with an increasingly heavy work
load. The Board itself stated in its 1989 annual
Report that it cannot rule on tariff's legality
(though I recognize that the Board prepared the
Report before the amendments were passed). The
respondent acquiesced that in isolation the changes
may not seem like much, but argued in their
entirety they have the effect of giving the Board a
pro-active role. Unfortunately, the respondents
have not demonstrated anything significant or con
crete in the amendments to prove the jurisdiction
of the Board has been broadened or expanded. I
conclude that there are no substantive changes to
the Act which would lead to a different conclusion
than that reached by the Supreme Court of
Canada in CAPAC v. CTV, supra.
Parliament is presumed to know the law and to
be legislating with regard to the state of the law as
it exists at the time the legislation is adopted. In
drafting the amendments to the Act, Parliament
was in a position to be very well informed on the
subject. If it was Parliament's intention to widen
the Board's jurisdiction, it would have clearly
stated such a change. It is not for this Court to
amend what Parliament has chosen not to do.
It was suggested by the respondent Board that
the Court should decline to consider the appli
cant's request for prohibition, and leave it to the
Board to consider Tariff 2.A.2 as part of its role
under the Act. Then the final decision on the tariff
would be open to review under section 28 of the
Federal Court Act [R.S.C., 1985, c. F-7]. To
support non-intervention by the Court, the
respondents have relied on cases involving bodies
like the Canadian Human Rights Commission and
the Canadian Labour Relations Board. However,
in submitting such cases, the respondents ignore
that the functions and powers granted to each of
these bodies is very, very different. For example,
the Canadian Human Rights Commission is
specifically directed in the Canadian Human
Rights Act [R.S.C., 1985, c. H-6] to look at and
decide its own jurisdiction. Section 41 states:
41. Subject to section 40, the Commission shall deal with
any complaint filed with it unless in respect of that complaint it
appears to the Commission that
(a) the alleged victim of the discriminatory practice to which
the complaint relates ought to exhaust grievance or review
procedures otherwise reasonably available;
(b) the complaint is one that could more appropriately be
dealt with, initially or completely, according to a procedure
provided for under an Act of Parliament other than this Act;
(c) the complaint is beyond the jurisdiction of the
Commission;
(d) the complaint is trivial, frivolous, vexatious or made in
bad faith; or
(e) the complaint is based on acts or omissions the last of
which occurred more than one year, or such longer period of
time as the Commission considers appropriate in the circum
stances, before receipt of the complaint. [Emphasis added.]
At one time the Human Rights Commission had
no express powers of jurisdiction. After the deci
sion in Canadian Football League v. Canadian
Human Rights Commission, [1980] 2 F.C. 329
(T.D.), the Canadian Human Rights Act [S.C.
1976-77, c. 33] was amended to rectify that situa
tion. Similarly, the Canada Labour Code, R.S.C.,
1985, c. L-2, ss. 15 and 16 detail extensively the
powers and duties of the Canada Labour Relations
Board. In the Copyright Act the Board has been
given no equivalent list detailing its powers and
duties. A board is limited to the powers conferred
upon it by statute. The Act is clear that Parlia
ment never intended the Board to adjudicate ques
tions of law, but rather set it up as a regulatory
agency to set rates.
The question of the Board's jurisdiction was
decided in CAPAC v. CTV, supra, and nothing has
changed with regard to the powers granted by
Parliament to suggest the Board's jurisdiction has
been expanded. Therefore this Board lacks juris
diction to determine whether Tariff 2.A.2 is valid.
This brings us to the applicant's request for
prohibition. It is open to this Court to issue a writ
of prohibition against an administrative tribunal to
prevent it from exceeding its jurisdiction. The
applicant may apply for a writ of prohibition
against the Board as soon as the absence of juris-
diction becomes apparent. Here the applicant has
brought this motion as a preemptive strike to
prevent the waste of time and money on a matter
which has already been decided by the Supreme
Court of Canada.
There is no reason to drag the applicant through
the whole process when it can be settled at this
point in time as a clear issue of law before the
Court. Here prohibition will provide a quick and
effective remedy and prevent a costly and lengthy
hearing of many months, followed by a lengthy
and expensive trial procedure, that would ulti
mately come back to the courts on the question of
jurisdiction.
However, in the event that I am incorrect on the
determination of jurisdiction, there are two other
questions to be addressed concerning Tariff 2.A.2.
The first is whether the proposed Tariff 2.A.2. is
the proper subject matter of section 49 [as am. by
S.C. 1988, c. 15, s. 12] (s. 67) of the Act. The
second question is whether the Societies can
attempt to obtain the benefit of section 50 (s. 70)
under the Act.
In response to the first question, an examination
of the amendments to the Act is in order. The
respondents have pointed to changes in paragraph
3(1)(f) [as am. by S.C. 1988, c. 65, s. 62(1)], and
the addition of "jointly and severally liable" in
subsection 3(1.4) [as added by S.C. 1988, c. 65, s.
62(2)] as changes that allow them to fix a royalty
on programming transmission by the network. The
respondent Societies argued that network trans
missions constitute "a single communication to the
public" under "the new" paragraph 3(1)(f), and
combined with the words of subsection 3(1.4)
"transmits by telecommunication" and "communi-
cation to the public" the Act now covers the
communication of the performance of a work by
telecommunication.
When amending the Act, the legislators had the
opportunity, if they so wished, to remedy and
overcome the CAPAC v. CTV, supra, result by
inserting the necessary wording. They chose not to,
and now the respondents are left trying to stretch
the existing words to say that which was not
indicated or intended. Also, in CAPAC v. CTV
supra, the Supreme Court noted that what was
communicated by the CTV Network to its affiliated
stations was not "the musical works" as defined in
the Act, but "a performance of the works". The
respondents have failed to deal with the term
"musical works". Inserting the word "telecom-
munication" into the Act does not change that
decision that network transmissions are not "musi-
cal works" for the purpose of copyright infringe
ment. Therefore, the performing societies cannot
properly file Tariff 2.A.2. under section 49 as it
does not deal with a performing right under the
Act.
In answer to the second question, whether the
Societies may utilize section 50 (s. 70) for their
benefit, I think it is obvious that they cannot.
Under section 50.1 [as added by S.C. 1988, c. 15,
s. 14] (s. 70.1) the party filing a tariff must be a
"licensing body" under the Act. But can the per
forming societies be considered "licensing bodies"?
Section 50.1 (s. 70.1) clearly states that "licensing
body" means "a society, association or corpora
tion, other than a society, association orcorpora-
tion" [underlining added]. Section 50.1 allows for
new collectives to submit for royalties, and the
existing performing societies are specifically
excluded in this section because they have section
49 to cover their collective administration of per
forming rights.
Even if the Societies were to be considered
"licensing bodies", reliance on this section by the
respondent Societies would still fail, because they
have not met all the necessary pre-conditions
enunciated in the Act. An attempt to reach a
negotiated settlement on the royalties is implied by
the Act. Section 50.2 [as added by S.C. 1988, c.
15, s. 14] (s. 70.2) refers to the situation where a
licensing body files the tariff with the Board when
the parties are "unable to agree on the royalties to
be paid". This implies some sort of effort between
the two parties must be made to negotiate an
agreement. In this instance the applicant was
never approached to discuss the subject nor was an
attempt made to negotiate an agreement on the
royalties. Instead this was a unilateral action by
the performing societies.
In light of all the reasons articulated above,
especially in consideration of the absence of juris
diction of the Copyright Board to deal with the
matter, a writ of prohibition shall be granted
against the respondent Copyright Board to prohib
it it from taking any further proceedings on Tariff
2.A.2.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.