OTTAWA-#40282437-V1-Crown Immunity Factum (Searchable PDF)

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COPYRIGHT BOARD

IN THE MATTER of Proposed Royalties (the “Proposed Tariffs”) to be Collectedby the Canadian Copyright Licensing Agency (Access Copyright) for theReprographic Reproduction, in Canada, of Works in its Repertoire for the years2005-2009 and 2010 to 2014 (Provincial and Territorial Governments)

AND IN THE MATTER OF consideration by the Copyright Board of the ProposedTariff pursuant to section 72(2) of the Copyright Act

FACTUMON CROWN IMMUNITY

Date August 30, 2011 Blake, Cassels & Graydon LLPWorld Exchange Plaza45 O’Connor Street, 20th Floor Ottawa, ON K1P 1A4

Nancy K. BrooksRandall J. HofleyPeter W. Hogg, Q.C.

Tel: 613-788-2200Fax: 613-788-2247

Lawyers for Access Copyright



TABLE OF CONTENTS

OVERVIEW....................................................................................................................... 1

PART I – FACTS............................................................................................................... 2

PART II – ISSUES............................................................................................................. 3

PART III – LAW AND ARGUMENT ................................................................................... 3

A Crown Immunity...................................................................................................... 31) The rule of Crown immunity and its codification in the Interpretation Act .... 32) Section 17 of the Interpretation Act applies to the provinces....................... 53) The Territories have no standing to assert Crown immunity ....................... 6

B The principle of Crown immunity is not engaged here............................................. 71) The principle is not engaged because protection of copyright promotes

the Crown’s interests – there is no prejudice to the Crown ......................... 72) The principle is not engaged because of the common-law principle of no

expropriation without just compensation..................................................... 10

C The Crown is bound by necessary (and logical) implication .................................... 111) The purpose of the statute would be wholly frustrated if the Crown was

not bound ................................................................................................... 132) There is a clear intention to bind the Crown................................................ 18

(a) Exemptions under the Act which refer to the Crown....................... 18(i) Exemption from infringement where performing statutory

obligations........................................................................... 19(ii) Exemption from the importation sanction............................. 19(iii) Exemption for Archives Canada.......................................... 20(iv) Exemption for federal and provincial departments and

agencies.............................................................................. 21(b) The Crown considers itself bound by the Act.................................. 21

(i) Cases where the Crown has defended claims of copyrightinfringement ........................................................................ 21

(ii) Government policy demonstrates that the Crown is bound.. 24Canada ............................................................................... 24Consortium members.......................................................... 25

(iii) The Consortium members’ contracts to obtain use of copyrighted works.............................................................. 28

(c) Canada’s international obligations evidence clear intention tobind the Crown............................................................................... 31(i) NAFTA ................................................................................ 31(ii) TRIPS Agreement............................................................... 32(iii) Crown or sovereign immunity .............................................. 33



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D The Benefit / Burden Exception to Crown Immunity Applies.................................... 331) The benefit / burden analysis...................................................................... 33

(a) The relevance of section 12 to the benefit / burden analysis .......... 37(i) The rights and privileges referred to in section 12 ............... 37(ii) The benefits gained by the Crown – and the associated

burdens ............................................................................... 39

2) Benefit / burden exception and the burden of proof .................................... 453) The Statement of Agreed Facts evidences the benefits enjoyed by the

Consortium................................................................................................. 454) The Consortium members’ arguments about purchases of copyright

licences ...................................................................................................... 465) The Consortium members’ arguments about limited waiver........................ 47

PART IV – ORDER REQUESTED..................................................................................... 49



OVERVIEW

1. In this preliminary hearing, certain Objectors in the tariff proceeding1 argue that

under the doctrine of Crown statutory immunity, the Crown in right of the provinces and the

territories are not bound by the Copyright Act (the “Act”).

2. In Canada, copyright is purely a statutory right and the rights and remedies

provided by the Act are exhaustive. Copyright consists of the sole right to exercise – and to

restrain others from exercising – specific statutory rights relating to original literary, dramatic,

musical and artistic works. The Act has a broad public purpose: to encourage the creation and

dissemination of works of art and intellect and, to that end, to confer on authors rights to protect

and receive just reward for these works. Rather than adversely affecting the Crown’s interests,

the Act promotes the Crown’s interest in its own copyright and, more importantly, the

enhancement of social and economic welfare in Canada that results from the creation and

dissemination of works of art and intellect. The enhancement of economic welfare, of course,

ultimately enures to the benefit of the public purse. As the principle of Crown immunity only

applies when the statute, if applied to the Crown, would operate to its prejudice, the principle is

not even engaged in this case.

3. Even if the principle of Crown immunity is engaged, following the test laid down

by the Supreme Court of Canada, the Crown at both the federal and provincial levels is bound

by the Act by necessary and logical implication. According to the Supreme Court of Canada, the

object of the Act is the creation/dissemination of works and the provision of a just reward for those works, promoting said creation/dissemination. If the Crown at both levels were not bound

by the Act, the Crown could exploit authors’ intellectual property with impunity – this is exactly

what the Consortium members intend by saying they are not bound to comply with tariffs

certified in accordance with the collective administration provisions of the Act. If this were the

case, the fundamental purpose of the Act would be frustrated. Moreover, the application of the

governing principles of statutory interpretation reveals a clear Parliamentary intent to bind the

Crown, consistent with the conduct of the provinces and territories themselves with respect to

copyright, and the international obligations regarding copyright that Canada has undertaken.

4. Even if the Act cannot be construed as binding on the Crown, the benefit /

burden exception to Crown immunity applies. Section 12 of the Act provides that the Crown

owns copyright in any work prepared or published by or under the control of Her Majesty.

1The provinces of Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Newfoundland and

Prince Edward Island and the territory of Nunavut are asserting Crown immunity.



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However, that ownership right is a hollow one without the rights and remedies granted under

other sections of the Act. By relying on those rights and remedies, the Crown obtains specific

benefits under the Act. It cannot take those benefits without accepting the corresponding

burdens of respecting the rights and remedies available to others under the Act. In accordance

with the benefit/burden exception, Crown immunity does not apply to the Crown in this matter.

5. It is to be noted that the Northwest Territories has withdrawn as an Objector and

Yukon has told the Board it will not be advancing any Crown immunity argument. That leaves

Nunavut as the only territory making an assertion of Crown immunity. Nunavut has no separate

constitutional status from, and is part of, the federal Crown. Accordingly, Nunavut has no

standing to claim statutory immunity in its own right. Nunavut is bound by the Act just as the

federal Crown is – and concedes itself to be – bound.

6. Access Copyright seeks a declaration that the Crown is bound by the Act and, inparticular, that the provinces and territories will be bound by any tariff certif ied in these

proceedings under Part VII of the Act.

PART I – FACTS

7. In these proceedings (the “Tariff Proceedings”), Access Copyright has filed a

proposed tariff, applicable to all Canadian provinces and territories, save Quebec, for the

reproduction by employees of the governments of the provinces and territories of literary,

dramatic and artistic works included in Access Copyright’s repertoire of works.

8. The provinces of Alberta, Saskatchewan, Manitoba, New Brunswick, Nova

Scotia, Newfoundland and Prince Edward Island, and the territory of Nunavut (the

“Consortium”)2 have raised, as a preliminary issue, the question of whether they are bound by

the provisions of the Act. The essence of the Consortium’s argument is that under the principle

of Crown immunity, the Crown is immune from any and all obligations under the Act, and in

particular is immune from the tariff provisions in Part VII of the Act.

9. The Consortium argues that as a consequence of the application of the principle

of Crown immunity, the Board has no jurisdiction to certify any tariff that binds them, and Access

2 Ontario withdrew as an Objector on March 1, 2011. The Northwest Territories withdrew as an Objector on March 31, 2011. Yukon advised it no longer wished to advance any Crown immunity arguments onApril 21, 2011. British Columbia is not relying on a claim of Crown immunity (and is not taking part in thisapplication).



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Copyright has no right to collect royalties from them under such tariff for the reproduction by

them of any works in Access Copyright’s repertoire.

10. The Copyright Board has agreed to hear the Crown immunity issue as a

preliminary matter. The remaining issues raised in the Tariff Proceedings, including the amount

of the tariff, the volumes at issue, and whether the fair dealing exception applies, will be heard

at the main hearing.

11. Access Copyright and the Consortium members filed with the Board a Statement

of Agreed Facts (“SAF”) on February 28, 2011 setting out certain facts that have been agreed to

by the Consortium members and Access Copyright that are relevant to the Crown immunity

issues. Reference to these agreed facts will be made in this factum where they are relevant to

Access Copyright’s submissions. Appendix “A” hereto includes a summary of facts from the

SAF that are referenced in the factum.

PART II – ISSUES

12. The sole issue to be determined in this preliminary hearing is whether the

Consortium members are bound by the Act, and in particular are bound by the tariff provisions

of Part VII of the Act.

PART III – LAW AND ARGUMENT

A. CROWN IMMUNITY

1) The rule of Crown immunity and its codification in the Interpretation Act

13. At common law, since the 15th century, there has been a rule of statutory

construction that the Crown is not bound by legislation except by express words or necessary

implication. Although a rule of construction, it is often expressed as a “presumption” that the

Crown is not bound by statute – a presumption that is rebuttable by express words or necessary

implication.

Hogg and Monahan, Liability of the Crown (3rd ed., Carswell, 2000)[hereinafter “Liability of the Crown”] at 275-77.

Sullivan, Sullivan on the Construction of Statutes (5th ed.) at 750.

14. It is important to note that although it is often referred to as a “presumption”,

because the rule of Crown immunity is in fact a rule of statutory construction, it is incorrect to

speak of one party or another bearing the “onus” to shift the presumption. No party bears an



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“onus” to establish that a particular statute is applicable to the Crown – rather it is for the tribunal

or court to determine whether, in accordance with the applicable principles of statutory

construction and/or of Crown immunity, the statute in question is binding on the Crown. Here,

neither Access Copyright nor the Consortium bears any onus.

Liability of the Crown, at pp. 275-77.

Law Society of Upper Canada v. Canada (Attorney General), 2008 CanLII1666 (Ont. S.C.) at para. 29: “jurisprudence lends force to the observationin Liability of the Crown [...] that ‘numerous exceptions to the rule of immunity have eaten away so much of it,’ the presumption being only a ruleof construction.”

Black’s Law Dictionary (8th ed., 2nd reprint, Thomson, 2007): “statutoryconstruction”, is the use of “the principles developed by courts for interpreting statutes” (p. 1452); “presumption of law”, is “a legalassumption that a court is required to make if certain facts are establishedand no contradictory evidence is produced.” (p. 1224).

Nova Scotia Power Inc. v. The Queen, 2002 CanLII 906 (TCC) at para. 39:“immunity must be ‘determined by the true interpretation of the statute’:Quebec Liquor Com'n v. Moore, [1924] D.L.R. 901 at p. 910, [1924] S.C.R.540 at p. 551, per Duff, J., that is from the construction of the statute as awhole....”.

15. The common law rule of Crown immunity was set out by Lord du Parcq for the Privy

Council in Province of Bombay v. City of Bombay :

The general principle to be applied in considering whether or not theCrown is bound by general words in a statute is not in doubt. Themaxim of the law in early times was that no statute bound the Crown

unless the Crown was expressly named therein [...] But the rule so laiddown is subject to at least one exception. The Crown may be bound, ashas often been said, "by necessary implication". If, that is to say, it ismanifest from the very terms of the statute, that it was the intention of the legislature that the Crown should be bound, then the result is thesame as if the Crown had been expressly named. [emphasis added]

Province of Bombay v. City of Bombay , [1947] A.C. 58 (P.C.) at 61 [hereinafter “Bombay ”].

16. The common law rule has been codified in all jurisdictions in Canada. Section 17

of the federal Interpretation Act codifies the common law principle that the Crown is not bound

by statute except by express words or necessary implication and is applicable to all federal Acts

of Parliament and any regulations under such Acts:

17. No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty’s rights or prerogatives in any manner, except asmentioned or referred to in the enactment.

Interpretation Act , R.S.C. 1985, c. I-21, s. 2(1).

Liability of the Crown, at 284-285.



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17. A comparable provision is found in the Interpretation Acts of eight of the ten

provinces and all of the territories. The provincial and territorial Interpretation Acts apply to

legislation enacted within their respective jurisdictions, i.e., not to the Act, and therefore are not

relevant to the issues raised in this proceeding. It is noteworthy, however, that the Interpretation

Acts of British Columbia and Prince Edward Island provide that the Crown in right of each of

those provinces is bound by provincial legislation unless the legislation in question specifically

provides otherwise. British Columbia is not relying on a claim of Crown immunity (and is not

taking part in this application); however, Prince Edward Island is advancing the argument that

Crown immunity shields it from the application of a federal statute – the Act – even though its

provincial statutes are deemed to apply to the Crown.

R.S.A. 2000, c. I-8, s. 14; C.C.S.M. c. I-80, s. 49; R.S.N.B. 1973, c. I-13, s. 32[am. 1982, c. 33, s. 9]; R.S.N.L. 1990, c. I-19, s. 12; R.S.N.S. 1989, c. 235, s.14; S.O. 2006, c. 21, s. 71; R.S.Q., c. I-16, s. 42; S.S. 1995, c. I-11.2, s. 14;R.S.N.W.T. 1988, c. I-8, s. 8; R.S.Y. 2002, c. 125, s. 13; RSPEI 1998, c. I-8, s.14; RSBC 1996, c. 238, s. 14.

18. Provisions granting immunity to the Crown “should be given a narrow

construction”. The doctrine of Crown immunity only applies when the statutory provisions, if

applied to the Crown, would operate to its prejudice. The Consortium relies on the Supreme

Court of Canada’s decision in R. v. Eldorado Nuclear Ltd. for the proposition that “the

presumption of Crown immunity applies to all legislation that is capable of adversely affecting

the Crown’s rights or interests or of limiting its freedom to act”. However, this proposition is

overbroad: nowhere in Eldorado Nuclear does the Court make any such statement. In fact, the

Supreme Court of Canada has said:

The presumption of immunity only applies when the statutory provisions,if applied to the Crown, would operate to its prejudice.

Alberta Government Telephones v. Canadian Radio-television and Telecommunications Commission, [1989] 2 SCR 225 at 284 per DicksonC.J. [hereinafter “ Alberta Government Telephones”].

Alberta v. Govert Buys and Whitecourt Transport Ltd., 1989 ABCA 104(CanLII) at para. 46 (Alta. C.A.) (holding that “Interpretation Act provisionsgranting immunity to the Crown should be given a narrow construction”).

2) Section 17 of the Interpretation Act applies to the provinces

19. The Supreme Court of Canada has held that “Her Majesty” in s. 17 of the federal

Interpretation Act embraces the Crown in right of a province as well as the Crown in right of

Canada. It is open to Parliament to bind the provincial Crowns in its competent legislation if it



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chooses to do so. The federal government has constitutional authority over copyright (s. 91(23)

of the Constitution Act ) and therefore it can bind the provinces under the Act.

Alberta Government Telephones, at 274-75.

Her Majesty in right of the Province of Alberta v. Canadian Transport

Commission, [1978] 1 S.C.R. 61 at 72.

3) The Territories have no standing to assert Crown immunity

20. Under the Constitution Act, 1867 , areas of the country not included in the

provinces were left under the jurisdiction of the Parliament of Canada and Her Majesty in right of

Canada. The territories acquire their status solely through federal enactments, specifically the

Yukon Act, Northwest Territories Act and Nunavut Act . At paragraph 11 of its factum, the

Consortium states that the definition of province in s. 35(1) of the Interpretation Act includes

Yukon, Northwest Territories and Nunavut and thus, the rule of Crown immunity in s. 17 of thatstatute applies to all Consortium members. This is not an accurate reading of s. 35(1).

Constitution Act , 1867, s. 146.

21. Section 35(1) of the Interpretation Act sets out the definitions of various terms

applied when interpreting any enactment of Parliament to the effect that, where, in a federal

enactment, the word “province” occurs, it is to be interpreted as including the territories.

However, s. 17 of the Interpretation Act does not make any reference to “provinces”. While the

Supreme Court of Canada in the Alberta Government Telephones case held that s. 17

embraces the Crown in right of a province as well as the Crown in right of Canada, the Court

never refers to the territories in its decision. The word “province”, as used in this judicial

decision, is not subject to the s. 35(1) definition of “province”. Therefore, the assertions made by

the Consortium in paragraph 11 of its factum are irrelevant to the issue of whether the territories

have standing to assert they are immune from the operation of a federal statute pursuant to

s. 17.

Yukon Act , S.C. 2002, c. 7; Northwest Territories Act , R.S.C. 1985, c. N-27;

Nunavut Act, S.C. 1993, c. 28.

22. As the territories have no constitutional status, they come under the authority and

exclusive jurisdiction of the federal government since the Crown in right of Canada includes the

territories. Consequently, the territories will be immune from the operation of the Act only if the

Crown in right of Canada is immune. Because the territories have no constitutional existence on

their own, they are bound to the same position as the federal Crown with respect to Crown



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immunity. They have no standing in their own right to assert they are immune from the operation

of any federal statute, and they are bound by a particular statute unless the Crown in right of

Canada is not bound. As explored more fully in the following sections, the federal Crown is

bound by the Act and has conceded that it is bound by the Act; ergo the territories are also

bound.

Hogg, Constitutional Law of Canada, ¶2.5(b) [hereinafter “Constitutional Law of Canada”].

B. THE PRINCIPLE OF CROWN IMMUNITY IS NOT ENGAGED HERE

1) The principle is not engaged because protection of copyright promotes theCrown’s interests – there is no prejudice to the Crown

23. As noted above, prejudice to the Crown is an essential element of the rule that

the Crown is not bound by a statute. Therefore, if it is accepted that the Act does not operate to

the prejudice of the Crown, but instead accrues to its benefit, then the principle of statutory

Crown immunity will not apply.

24. Canadian copyright law is purely statutory law, which creates rights and

obligations upon the terms and in the circumstances set out in the statute. The Act has a broad

public purpose. By protecting authors’ rights, and allowing for use of copyrighted works by

others, the Act encourages the creation and dissemination of such works to the Canadiansociety at large. Of course, the economic benefits (the generation of societal wealth) that result

from the creation and dissemination of works “of art and intellect” ultimately enure to the benefit

of the public purse.

25. In Apple Computer Inc. v. Mackintosh Computers Ltd ., Reed J. of the Federal

Court (Trial Division) described the purpose of the Act in the following terms:

...the purpose of the Copyright Act is and always has been to grant amonopoly. No distinction is made therein as to the purpose of the

work created – for entertainment, instruction or other purposes. Thelegislation historically, in my view had two purposes: to encouragedisclosure of works for the "advancement of learning", and to protectand reward the intellectual effort of the author (for a limited period of time) in the work.

Apple Computer Inc. v. Mackintosh Computers, [1987] 1 F.C. 173 at para. 96(T.D.).



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26. The Supreme Court of Canada has recognized the society-wide, public-interest

purposes of the Act too, writing:

The Copyright Act is usually presented as a balance betweenpromoting the public interest in the encouragement and disseminationof works of the arts and intellect and obtaining a just reward for the

creator. […]

[T]he intention [of the Act] is to establish both a right that is centeredon the person of the author, this being derived from the civilstructures of the right of ownership, and a definitely dynamic rightcentered on its economic function, which reflects the theoriesunderlying the concept of monopoly.

Théberge v. Galerie d'Art du Petit Champlain Inc., 2002 SCC 34, [2002] 2SCR 336 at paras. 30 and 116 [hereinafter “Théberge”].

27. This public policy purpose is acknowledged by the federal Crown’s own policy

documents. In addition to prohibiting copyright infringement by government institutions (asexplained in detail below at paragraphs 78-79), federal Crown policy encourages the vesting of

copyright ownership rights in contractors of the Crown for the explicit purpose of promoting

economic development. The Treasury Board of Canada’s Policy on Title to Intellectual Property

Arising Under Crown Procurement Contracts3 states that it is the Treasury Board’s policy “to

increase the potential for Commercial Exploitation of Intellectual Property developed by a

Contractor in the course of a Crown Procurement Contract by having the ownership of such

property vest with the Contractor [...].”

28. As for the provinces and territories (and as explained in greater detail in Part

III.C.2.b.ii below), none of them have declared heretofore, by a policy or other notice to

rightsholders, that they are not bound by the Act (e.g., none have directed employees that they

need not obtain permission to copy published works). Moreover, based on the Statement of

Agreed Facts many departments of the provinces and territories have explicit policies

recognizing the need to respect copyright law. For example4:

(a) Manitoba’s Department of Energy, Innovation, and Mines advises that: “It is

impossible to overemphasize the importance of obtaining permission from the

holder of copyright before using illustrations or even lengthy quotations. ‘Giving

credit to the copyright owner or the author does not constitute license to

3 Online at: http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=13697&section =text4 All facts are drawn from the Statement of Agreed Facts (“SAF”) and/or the appendices included therein,including the provincial and Access Copyright appendices (e.g., Manitoba – Appendix 1; and AccessCopyright Appendix 1 (“AC-1”)). The meaning of terms referenced herein is as defined in the SAF. Adetailed summary of the SAF and other relevant facts appears in Appendix A of this factum.

http://www.tbs/

http://www.tbs/

http://www.tbs/



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reproduce material without written permission.’ (Grant, 2003). Although it is legal

to reword information without having to seek copyright permission (but ethical to

credit the source), it is neither ethical nor legal to make a few minor changes to

an illustration in order to avoid obtaining permission.” [emphasis added] (SAF,

Manitoba – Appendix 2).

(b) Nova Scotia’s corporate policy manuals, known as the Management Manuals

recognize the benefit of copyright laws. In particular, the NS Sustainable

Procurement Policy permits alternative procurement "to ensure compatibility with

existing products; to recognize exclusive rights, such as exclusive licenses,

copyright, and patent rights; or to maintain specialized products that must be

maintained by the manufacturer or its representative". (SAF, Nova Scotia –

Appendix 8).

(c) Nunavut’s Court Library, Court Services Division, Department of Justice,

introduced a patron guide in August 2010. This guide addresses the use and

Copying of Published Works and advises patrons that the Library subscribes to

the Fair Copy Principle, which provides that no more than 10% of the total

product can be copied and must be for personal use only. (SAF at para. 123;

Nunavut – Appendix 6).

(d) All of Prince Edward Island’s departments use the “Contract Services,

Conditional Grants and Funding Agreements” template developed and approved

by Treasury Board when contracting with individuals and businesses, which

acknowledges the public benefit of copyright. This template provides that a

contract may result in work product of future value in copyright or other

intellectual property, and that, in such cases, the government will own all

copyright on the project and the contractor agrees to relinquish all such rights to

the project. (SAF, PEI – Appendix 2).

(e) Saskatchewan likewise acknowledges that contracts may result in the creation of valuable copyright property and, in its Terms and Conditions and the

Communications Services Procurement Policy provides that “All materials,

concepts and files developed and produced for the Client, including copyright,

become the property of the Government when paid for.”5

5

SAF: Online at: http://www.gov.sk.ca/executive-council/commservices/suppliers/TermsConditions

http://www.gov.s/

http://www.gov.s/

http://www.gov.s/



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29. Accordingly, rather than adversely affecting the Crown’s interests, the Act

promotes the Crown’s interest. There is no prejudice to the Crown and therefore the principle of

Crown immunity is not engaged in this case.

2) The principle is not engaged because of the common-law principle of no

expropriation without just compensation

30. Under the common law, neither the provincial nor federal government may

expropriate property without just compensation absent a clear, unambiguous legislative intent

expressed through statute to do so. Copyright constitutes an ownership right in works created

by authors of all kinds, be they individuals, corporations or government; a species of property,

albeit incorporeal.

Authorson (Litigation Guardian of) v. Canada (Attorney General), 2003CarswellOnt 2773, 2003 SCC 39 at paras. 52 and 55 [hereinafter

“ Authorson” ]. See also Byron Hills Resources Ltd. v. Alberta (Minister of Sustainable Resource Development), 2009 CarswellAlta 989 (AB QB) atparas. 77 and 79.

31. Section 12 of the Act is not clear but rather ambiguous as to its intention to

expropriate: it could refer to the privileges the Crown holds with respect to copyright (as Access

Copyright submits) or to its privilege to infringe (as the Consortium submits). Neither is s. 17 of

the federal Interpretation Act a clear and unambiguous legislative statement intended to deprive

copyright owners of the property rights. Section 17 merely codifies a principle of statutory

construction regarding the general applicability of Crown immunity.

32. It is not sufficient that either s. 12 of the Act or s. 17 of the Interpretation Act

could, theoretically, be interpreted as consistent with an implicit intent to deprive copyright

holders of their property rights against the government. The Supreme Court of Canada has

clearly stated that an intention to deprive an individual of her property must be specific, express,

and unambiguous: "unless the words of the statute clearly so demand, a statute is not to be

construed so as to take away the property of a subject without compensation." Indeed, where

an author’s licence to copy a work is not required, the Act expressly provides so, i.e.,

exemptions from copyright infringement, such as fair dealing, set out in s. 29 of the Act.

Manitoba Fisheries Ltd. v. R. (1978), [1979] 1 S.C.R. 101 at 118 (citing LordAtkinson in Attorney General v. De Keyser's Royal Hotel Ltd., [1920] A.C.508 (U.K. H.L.) at 542).

See also Authorson at para. 55 (“While the legislature may have theextraordinary power of passing a law to specifically deny compensation toan aggrieved individual with whom it has broken an agreement, clear andexplicit statutory language would be required to extinguish existing rightspreviously conferred on that party.”).



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33. The Consortium cannot cite to any provision of the Act, or indeed of any statute,

that specifically and clearly permits the Crown to disregard the property rights of copyright

holders. Indeed, it is very surprising that the Consortium member governments are claiming that

they may expropriate the intellectual property of its citizens without compensation. Crown

immunity cannot be held to operate so as to deprive copyright owners of their property rights in

the form of copyright.

C. THE CROWN IS BOUND BY NECESSARY (AND LOGICAL) IMPLICATION

34. If the principle of Crown immunity applies in the context of the Act, as discussed

in this section, the Crown is bound by necessary (and logical) implication.

35. The Supreme Court of Canada in Alberta Government Telephones considered

how s.16 of the Interpretation Act (identical to s. 17 of the current version of that Act) should be

interpreted to determine whether a statute bound the Crown and, specifically, the scope of the

words “mentioned or referred to” that appear in s. 16. Chief Justice Dickson, writing for the

majority, noted that as an interpretive provision, “section 16 ought not to be construed as an

overbroad extension of state immunity”. He held that although s. 16 must be given an

interpretation independent from the supplanted common law, nonetheless the qualifications in

Bombay are based on sound principles of statutory interpretation and the words “mentioned or

referred to in s. 16 are capable of encompassing”:

(a) expressly binding words;

(b) a clear intention to bind “which is manifest from the very terms of the statute”;

and

(c) an intention to bind where the purpose of the statute would be wholly frustrated if

the government were not bound.

Alberta Government Telephones, at paras. 131-132.

36. In determining whether it is “manifest from the very terms of the statute” that the

Crown is bound, the Court in Alberta Government Telephones looked for an intention “revealedwhen the provisions are read in the context of other textual provisions, as in Ouellette, supra”. In

the Ouellette case, a 1980 decision of the Supreme Court of Canada, Beetz J. noted that s. 16

did not exclude the rule of statutory interpretation by which various provisions of a statute are to

be interpreted in light of other provisions and “it is possible that Her Majesty be implicitly bound

by legislation if that is the interpretation which the legislation must be given when it is placed in

its context”. As noted in Liability of the Crown, when an exemption clause is combined with



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other indications of an intention to bind the Crown, a logical implication may arise that the

Crown is bound by those provisions from which it has not been exempted.

Alberta Government Telephones, at para. 132.

R. v. Ouellette, [1980] 1 S.C.R. 568 at 574-75.

Liability of the Crown, at 283 and 289-291.

37. The principle of construction of Crown immunity was considered by the High

Court of Australia in Bropho v. Western Australia. After pointing out that "the Crown" signifies

not only the Sovereign but also the executive government, its employees and agents, the Court

stated:

For so long as 'the Crown' encompassed little more than theSovereign, his or her direct representatives and the basic organs of government, there may well have been convincing reasons for an

assumption that a legislative intent that general statutory provisionsshould bind the Crown and those who represent it would be either stated in express terms or made 'manifest from the very terms of thestatute'. The basis of an assumption to that effect lay in a mixture of considerations: regard for the dignity and majesty of the Crown;concern to ensure that any proposed statutory derogation from theauthority of the Crown was made plain in the legislative provisionssubmitted for the royal assent; and, the general proposition that, sincelaws are made by rulers for subjects, a general description of thosebound by a statute is not to be read as including the Crown [...]

Whatever force such considerations may continue to have in relationto legislative provisions which would deprive the Crown 'of any part of [the] ancient prerogative, or of those rights which are ... essential to[the] regal capacity' ... they would seem to have little relevance, atleast in this country, to the question whether a legislative provisionworded in general terms should be read down so that it is inapplicableto the activities of any of the employees of the myriad of governmental commercial and industrial instrumentalities covered bythe shield of the Crown.

Bropho v. Western Australia [1990] HCA 24; (1990) 171 C.L.R. 1 at paras. 14-15 [hereinafter Bropho].

38. The High Court emphasized that what was at issue was a general principle of

statutory construction, not some prerogative power of the Crown to override a statute, or

dispense with compliance. It concluded that rule of construction should be flexible enough to

take account of the nature of the statutory provisions in question and the activities of

government to which they might apply. In adopting this contextual and flexible rule of

construction, the High Court took into account the fact that the Crown today is a very different

entity than it was when the doctrine was established. The Court stated:



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[T]he historical considerations which gave rise to a presumption thatthe legislature would not have intended that a statute bind the Crownare largely inapplicable to conditions in this country where theactivities of the executive government reach into almost all aspects of commercial, industrial and developmental endeavour and where it isa commonplace for governmental commercial, industrial anddevelopmental instrumentalities and their servants and agents, which

are covered by the shield of the Crown either by reason of their character as such or by reason of specific statutory provision to thateffect, to compete and have commercial dealings on the same basisas private enterprise.

Bropho at para. 15.

39. It is submitted that the same considerations should be taken into account in

applying the rule of construction in Canada. A contextual and flexible interpretation must be

applied to determine whether the Crown is bound by necessary (or logical) implication; the

Board (or a court) should take into account the circumstances surrounding the enactment of the

statute in question and any amendments to such statute. If it is manifest from this contextual

interpretation that it was the intention of the legislature that the Crown should be bound, then

the result is the same as if the Crown had been expressly named.

40. Here, it is submitted that a contextual interpretation of the Act reveals a clear

intention to bind the Crown and, for the following reasons, the Crown is bound by necessary

implication:

(a) the purpose of the Act would be wholly frustrated if the Crown were not bound;

(b) the Act by its express terms evidences an intention to bind the Crown;

(c) the Consortium members’ policies and contractual practices evidence their

understanding and acceptance that they are bound by the Act; and

(d) Canada’s international obligations all require the Crown at both levels to accord

protection to copyright of nationals in treaty countries.

1) The purpose of statute would be wholly frustrated if the Crown was not bound

41. In Alberta Government Telephones, Chief Justice Dickson explained that the

term “wholly frustrated” referred to those situations in which allowing the Crown to claim

immunity would produce “an absurdity (as opposed to simply an undesirable result)”. Where

immunity would merely result in an inconvenience, incidental unfairness, inefficiency, or a

regulatory gap, it does not wholly frustrate the law.



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Alberta Government Telephones, at 281.

See also Collège d'arts appliqués & de technologie La Cité collégiale v.Ottawa (City), 1994 CarswellOnt 624 (ON. C.J.), aff’d by 1998 CarswellOnt687 (ON. C.A.) at para. 21 (finding that immunity of Crown college fromprovincial law charging development fees would not wholly frustrate act).

42. However, the courts, as explained below, have taken a purposive, contextual

approach to determining whether a law would be “wholly frustrated”. Accordingly, where

immunity would by its scope or nature intrinsically violate the spirit or efficacy of a law, then the

Crown must be bound. Thus, if “the ‘beneficial purpose’ of the Statute would be wholly frustrated

unless the Crown were bound”, or immunity would result in “absurdity or inherent unfairness”,

then a court will find it wholly frustrates the law.

See e.g. 369413 Alberta Ltd. v. Pocklington, 1998 CarswellAlta 641 (AB.Q.B.)at paras. 61, 63; Bombay , at p.63.

43. For example, in Friends of the Oldman River Society v. Canada (Minister of Transport), the Supreme Court of Canada found that the Province of Alberta was not immune

from the application of the federal Navigable Waters Protection Act . As a preliminary matter, the

Court explained that the question of whether a statute would be “wholly frustrated” “cannot be

made in a vacuum. Accordingly, the relevant ‘context’ should not be too narrowly construed.

Rather the context must include the circumstances which led to the enactment of the statute

and the mischief to which it was directed.”

Friends of the Oldman River Society v. Canada (Minister of Transport), 1992

1 S.C.R. 3 [hereinafter “Oldman”], at 53.

44. The Navigable Waters Protection Act was designed to protect the public right in

navigation by inter alia providing for environmental assessments per applicable regulations.

Alberta was challenging the applicability of the act to its dam-building activities. The Court found

that the purpose of the law would be wholly frustrated if the Crown were not bound, given that

“the provinces are among the bodies that are likely to engage in projects – bridges, for example

– that may interfere with navigation”. Moreover, “[t]he regulation of navigable waters must be

viewed functionally as an integrated whole, and when so viewed it would result in an absurdity if

the Crown in right of a province were left to obstruct navigation with impunity at one point along

a navigational system, while Parliament assiduously worked to preserve its navigability at

another point.”

Oldman, at 59-61.

45. Likewise, in R. v. Greening , the Ontario Court of Justice found that the purpose

of Ontario’s Highway Traffic Act would be wholly frustrated if traffic laws were not held to bind



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the Crown. The Court explained that the traffic laws established uniform standards of conduct

for drivers that both protected an individual driver and other drivers on the road by, in addition to

providing restrictions on individual vehicle speeds, allowed a common set of understanding

about traffic protocol to be shared among users of highways. The court found that “the nature of

the subject sought to be regulated can give rise to an inference that the statute was meant to

bind all relevant actors, and can overcome the presumption of Crown immunity”.

R. v. Greening, 1992 CarswellOnt 57 (ON C.J.) at paras. 93-99, aff’d by 1993CarswellOnt 46 (Ont. C.J. Prov. Div.).

46. The Supreme Court of Canada in CCH Canadian Ltd. v. Law Society of Upper

Canada noted that, in Canada, “copyright is a creature of statute and the rights and remedies

provided by the Act are exhaustive”. The Act prescribes:

(a) what works and other subject matter are protectable by copyright;

Copyright Act , R.S.C., 1985, c. C-42, ss. 2, 2.2(1), 3(1), 14.1.

(b) what the conditions for protection are;

Ibid ., ss. 5, 9(2), 15(2), 18(2), 21(2).

(c) who is entitled to copyright;

Ibid ., ss. 10(2), 13, 14.2(2), 24, 60(1).

(d) how copyright is registered;

Ibid ., ss. 46, 54, 55, 56, 57, 59.

(e) the term of copyright;Ibid ., ss. 6, 6.1, 6.2, 7, 9, 10, 11.1, 12, 14.2, 23, 26(5).

(f) the rights related to each type of work and other subject matter;

Ibid ., ss. 3, 15, 16, 17(2), 18, 19, 21, 26(1) and (7), 76, 81, 83(11).

(g) the exceptions to those rights;

Ibid ., ss. 29 – 33, 45, 80.

(h) rules relating to transfers of such rights;

Ibid., ss. 2.7, 13(4) – (7), 14, 14.1, 14.2(2), 16, 17(1), 25, 26 (6) – (7), 57(3),

60(2), 81(2).

(i) how copyright is infringed;

Ibid ., ss. 27, 27.1, 28.1, 28.2, 32.4 – 33.

(j) how rights are enforced;

Ibid ., ss. 34 – 37, 41 – 44.4, 53, 66.7(2).

(k) the remedies for infringement; and



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Ibid ., ss. 34, 35, 38 – 40, 42 – 44.4, 76, 78, 83(11) – (12), 88.

(l) a scheme for collective administration of rights.

Ibid ., ss. 66, 66.5 – 66.52, 67 – 77, 82 – 84, 86, 88.

CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339 at para. 9.

47. As McKeown notes in his text Fox on Canadian Law of Copyright and Industrial

Design, under the Act “[t]he term copyright is a shorthand reference to the exclusive rights

conferred by the Act on the copyright owner and author. Copyright consists of the sole right to

exercise, and to restrain others from exercising, specific statutory rights relating to the original

literary, dramatic, musical and artistic works”. Given the statute’s all-encompassing nature,

regulating all aspects of copyright ownership and the rights and remedies flowing therefrom,

there is no concept of use of copyright outside the scheme of the Act. Anyone who uses

another’s property in copyright must comply with the provisions of the Act, absent consent of theowner.

McKeown, Fox on Canadian Law of Copyright and Industrial Design, at 1-2.

48. Given the size and prominence of the Crown, and its reach into almost all aspects

of commercial, industrial and developmental endeavour, it is inconceivable – indeed it would be

absurd and inherently unfair – if through the doctrine of Crown immunity the Act were not

binding on the Crown. If this were the case, the intricate bundle of ownership rights and the

concomitant burden on users to respect owners’ rights – the “exhaustive” regime referred to bythe Supreme Court – would be wholly frustrated and the copyright regime established by the

Act, and its intended social and economic benefits, would be irreparably harmed.

49. If Crown immunity is recognized, it will not only create a gap in the regulatory

regime and unfairness, but result in a bifurcated regulatory regime at cross-purposes with itself.

If no enforcement proceedings may be brought against the Crown, then the only possible

restraints on Crown infringement of others’ copyright will be those voluntarily negotiated by

contract. Thus, copyright as applied to the Crown will be a bifurcated regime – the Crown’s own

rights will remain enforceable through the Act but others’ rights will only be enforceable if

provided for by contract. Given the scope of the Crown’s economic activity and interaction with

copyright protected works, this resulting arbitrary and voluntary respect by the Crown of

copyright holders’ rights would surely frustrate the purpose of the Act.

50. This is just the sort of internal incoherence and fundamental unfairness that the

courts refused to permit with respect to navigable waters and highway traffic. Just as in the



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navigable waters case (Oldman), here the provincial Crowns are attempting to impose

downstream impediments to the fluid operation of federal law. Just as in the highway traffic case

(Greening ), the provincial Crowns are attempting to claim an immunity that threatens other

individuals operating under the same regulatory regime and, in fact, the systemic integrity of the

regime itself.

51. The Consortium, at paragraph 25 of its factum, maintains that the Act would not

be wholly frustrated if it did not apply to the Crown, because the Act has primarily been used by

private parties to assert rights among themselves, and that “[a]s the Crown’s rights under the

Act are separate from, and wider than, those provided to private parties, the Act cannot be said

to have been primarily directed towards the Crown”. The Consortium, not surprisingly, cites no

authority for the extraordinary proposition that an Act must be primarily directed to the Crown in

order for a Court to conclude the Crown is bound by necessary implication. There is no such

authority.

52. To demonstrate the absurdity that would result if the Crown in right of Canada

(including the territories) and the provinces were not bound by the Act, one need only consider

this example: if the Crown were not bound, any one of them or all of them could decide to

exploit non-governmental works as part of a revenue raising effort. Any government would be

able to appropriate to itself the rights associated with literary, dramatic, musical or artistic works

or sound recordings or computer software, and exploit and sell them with no regard to the

limitations imposed under the Act. This need not be a commercial endeavour in which theCrown could be said to be ‘benefitting’ from the revenues earned by this exploitation, which

revenues would warrant the burden of payment of license fees (or a tariff). Consider the

situation in which a computer software program is primarily used by government: the author of

this software program would, the Consortium would say, be without any protection or recourse,

indeed his market would be removed by the actions of the Crown. This would turn the Act on its

head, fundamentally undermining Parliament’s social and economic objectives in establishing

the copyright regime embodied in the Act.

2) There is a clear intention to bind the Crown

53. A statute that lacks an express statement that the Crown is bound, may

nonetheless bind the Crown if a contextual interpretation of the statute indicates a clear

intention to bind the Crown.



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54. As explained in s. B.2), above, under the common law, the Crown may not

expropriate copyrighted works for their own use without just compensation. The necessary

implication is that the Act applies to the Crown in order to give it a right to use copyrighted works

of others upon the just terms spelled out in the Act. Moreover, there are a number of other

compelling factors that make it clear that there is an intention to bind the Crown at both levels:

(a) Under the Act, there are numerous exemptions of both levels of the Crown,

which would be unnecessary if the Crown were not otherwise bound. By logical

implication by application of the doctrine expressio unius est exclusio alterius, the

Act is binding on the Crown except in these instances;

(b) The Consortium members’ policies and contractual practices provide clear

evidence of their understanding and acceptance that they are bound by the Act;

and

(c) The adherence by Canada to international obligations that are binding on the

Crown, subsequently enacted into Canada’s domestic law, evidence an intention

that the Crown at both levels is bound.

55. When these factors are taken into account in the contextual interpretation of the

Act, it is clear that the Crown is bound by the Act through necessary implication. These matters

are explored in detail in the following sections.

(a) Exemptions under the Act which refer to the Crown

56. There are a number of provisions under the Act that expressly exempt the

Crown. For example, all departments of both federal and provincial governments are exempted

from certain obligations under the Act when fulfilling their statutory obligations under certain

other statutes; the Crown is exempted from restrictions on importation of works; Archives

Canada is exempted from the operation of the Act; and government and agencies of any order

of government that controls or supervises education or training are exempted from the operation

of the Act. These exemptions evidence a clear intention that the Act, subject to these

exemptions, applies to the Crown; the maxim expressio unius est exclusio alterius directs that

the Act be so interpreted. The exemptions applicable to the Crown are described in the following

sections.



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(i) Exemption from infringement where performing statutory obligations

57. Section 32.1(1) of the Act provides that it will not be an infringement of copyright

for any person to disclose inter alia a record pursuant to the Access to Information Act , or

pursuant to any like Act of the legislature of a province. This section is clearly directed at

employees of government (at both the federal and provincial level) who are carrying out their duties pursuant to access to information statutes. If the Act did not apply to the Crowns in right

of Canada (including the territories) and the provinces, there would be no need for this express

exemption.

Copyright Act , s. 32.1(1).

(ii) Exemption from the importation sanction

58. The importation provisions of the Act were enacted in 1997 (the “Phase II

Amendments”). Section 44 of the Act provides that copies made outside of Canada of any work

in which copyright exists that if made in Canada would infringe copyright shall not be imported

into Canada if the owner of the copyright makes such a request to the Canada Border Services

Agency. Section 44.1 of the Act sets out remedies available on order of the court on application

by the owner or exclusive licensee of copyright in a work in Canada.

Copyright Act , sections 44 and 44.1.

59. Subsection 45(1)(b) of the Act makes it lawful for any person to import copies of

a work for use by any department of the federal and provincial governments. Section 45(1)( b)

states:

45. (1) Notwithstanding anything in this Act, it is lawful for a person

[…]

(b) to import for use by a department of the Government of Canada or a province copies of a work or other subject-matter made with the consent of the owner of the copyright in the countrywhere it was made; [emphasis added]

Copyright Act , s. 45(1)(b).

60. Thus, s. 45(1)(b) provides for another express exemption for use by the Crown in

right of Canada and the provinces of copyrighted works where the use by others would be

subject to a claim of copyright infringement, an exemption that would not be required if the

Crown was not bound by the Act.



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(iii) Exemption for Archives Canada

61. The Phase II Amendments to the Act created an exemption for Archives Canada

from certain infringements of copyright. The Phase II Amendment stated:

30.5 The National Archives of Canada may(a) make a copy of a recording, as defined in section 8 of the National

Archives Act , for the purposes of that section; and

(b) at the time that a broadcasting undertaking, within the meaning of subsection 2(1) of the Broadcasting Act , communicates a work or other subject-matter to the public by telecommunication, make a copyfor archival purposes of the work or other subject-matter that isincluded in that communication.

62. National Archives, as it was known at the time of the Phase II Amendments, was

part of the federal government. The National Archives of Canada Act , which was in force whenthe Phase II Amendments were made in 1997, provided:

3. (1) There is hereby established a branch of the public service of Canada to be known as the National Archives of Canada presidedover by the Minister and under the direction of the National Archivistof Canada.

National Archives of Canada Act , R.S. 1985, c. 1 (3rd. Supp), s. 3.

63. Archives Canada and the Library of Canada were fused by the Library and

Archives Canada Act in 2004. Section 4 of that Act also makes clear that Library and ArchivesCanada is a branch of the Government of Canada:

4. There is hereby established a branch of the federal publicadministration to be known as the Library and Archives of Canadapresided over by the Minister and under the direction of the Librarianand Archivist.

Library and Archives Canada Act , S.C. 2004, c. 11, ss. 4.

64. The exceptions under s. 30.5 of the Act were enlarged when the two

departments were fused. There would be no need for the National Archives, and subsequently

as amended the Library and Archives of Canada, exceptions if the federal Crown was immune

from the Act. Under the doctrine of statutory immunity, there is no distinction made between the

federal Crown and the provincial Crown. As the federal Crown includes the territories, the

Archives Canada and National Library express exception indicates the federal Crown and

territories are bound by the Act, and ergo, is an indication the provincial Crown is also intended



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to be bound by the Act. There is nothing that would distinguish the intention of Parliament as

between the federal and provincial Crowns.

(iv) Exemption for federal and provincial departments and agencies

65. Paragraph (c) of the definition of “educational institutions”, set out in s. 2 of theAct expressly refers to “a department or agency of any order of government […] that controls or

supervises education or training referred to in (a) or (b)”.

66. The exemptions for educational institutions – including departments or agencies

of any order of government that control or supervise education or training – are set out in

sections 29 and 30 of the Act: see, for example, s. 29.4 [no infringement to make manual

reproduction onto dry erase board, etc. or to project an image, reproduce or perform a work in

public on the premises of an educational institution], s. 29.5 [no infringement where live

performance for students]; s. 29.6 [no infringement where a single copy of news program or

news commentary program is made, excluding documentaries]; s. 30 [certain class of

publication in a collection does not constitute infringement in literary works]; and s. 30.3

[educational institution does not infringe copyright in prescribed circumstances].

67. If the Act was not binding on the Crown, there would have been no need to enact

these exceptions for educational institutions that are “a department or agency of any order of

government”. Outside the exceptions under the Act, provincial educational institutions (including

by definition those that are departments or agencies of the provincial Crown) have obligationsunder, and are bound by, the Act.

68. The provisions outlined above are dispositive of Parliament’s intention that the

Crown in right of the provinces and the federal Crown (including the territories) are bound by the

Act.

(b) The Crown considers itself bound by the Act

(i) Cases where the Crown has defended claims of copyright infringement

69. Case law demonstrates that the Crown has historically (and effectively) litigated

copyright claims prosecuted (by or) against the Crown without asserting it cannot be sued for

infringement on the basis of Crown immunity. Moreover, in the rare instances where it or its

agents have sought to invoke Crown immunity in the copyright context, such claims have

universally been defeated.



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70. The Crown has traditionally organized its affairs vis-à-vis third parties on the

principle that it must respect copyright law. Thus, when the Crown has defended against

copyright claims, it has done so based on arguments grounded in contract or copyright law, not

on the basis of Crown immunity:

In Shareline Systems Inc. v. New Brunswick (2000), 11 C.P.C (5th) 38 (N.B.Q.B.), theGovernment of New Brunswick defended a copyright infringement action, and did notplead it was immune from suit under the doctrine of Crown immunity.

In Shewan v. Canada (Attorney General) (1999), 87 C.P.R. (3d) 475 (Ont. S.C.), thegovernments of Canada and Yukon defended a claim of copyright infringement. Thedefence proceeded on the merits, and there was no claim the Crown was immune under the doctrine of Crown immunity.

In Trainor Surveys (1974) Ltd. v. New Brunswick , [1990] 2 F.C. 168 (T.D.), threeprovinces – New Brunswick, Nova Scotia, and Prince Edward Island – were sued for copyright infringement in the Federal Court (Trial Division). The provinces brought amotion to stay the proceedings on the basis that the provincial courts had jurisdiction to

hear the suit, not the Federal Court. The three provinces did not argue they wereimmune from suit for copyright infringement under the doctrine of Crown immunity.

See also Hawley v. Canada (1990), 30 C.P.R. (3d) 534 (F.C.T.D.); Kerr v. R.(1982), 66 C.P.R. (2d) 165 (F.C.T.D.); van der Ohe v. Minister of National Revenue, 1971 CarswellNat 90, [1971] Tax A.B.C. 589 (Can. Tax App. Bd.).

71. Likewise, in organizing its internal, administrative affairs, the Crown has operated

on the presumption that it must respect the copyrights of others. For example, in Ewert v.

Canada (Attorney General), the court considered the denial by Correctional Service of Canada

(“CSC”) of a request by an inmate to have DVD movies played over CCTV within a penitentiary.The CSC’s review assessed, among other things, whether the penitentiary would be in violation

of s. 3 of the Act were it to accede to Mr. Ewert’s request. A procurement contracting specialist

for the regional supply depot of the CSC reviewed the inmate’s request and “[b]ased on her

research and consultations, she concluded the playing of DVD's over Kent's institution closed

circuit television to multiple inmate cells are covered by s. 3 of the Copyright Act .” The

consultant also reported that “National Headquarters is not supportive of this approach mainly

for the policy reasons that prompted CSC to end their previous agreements in 1998 – notably

the high costs involved in maintaining such licences.”

Ewert v. Canada (Attorney General), [2009] F.C.J. No. 1532 at para. 18.

72. Fry v. Canada (Solicitor General) involved a similar case concerning an inmate’s

request for the return of his electronic equipment, which had been confiscated by the warden in

part due to copyright violations resulting from his use of unlicensed software while in a



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government institution. The reviewing court upheld the warden’s decision, which was based on

the stated necessity of the Crown respecting copyright law.

Fry v. Canada (Solicitor General), [1996] F.C.J. 1267(T.D.).

73. The Consortium has cited no decision in which the Crown succeeded in

defending against a copyright infringement claim on the basis of Crown immunity. In fact, in the

only judicial decision involving copyright addressing Crown immunity (Eros-Équipe de recherche

opérationelle en santé Inc. v. Conseillers en gestion & informatique C.G.I. Inc ), the court

rejected the Crown’s claim.

Eros-Équipe de recherche opérationelle en santé Inc. v. Conseillers engestion & informatique C.G.I. Inc., 2004 FC 178 (FC) [hereinafter “Eros”]

74. In the Eros case, the plaintiff sued the defendant Ministry, which was an agent of

the Quebec government, for copyright infringement. The defendant claimed they could not be

sued because Crown immunity was engaged. The plaintiff, however, argued that the defendant

made itself subject to the Act by directly bargaining for benefits with Eros. The plaintiff’s

argument, as summarized by the Court, was as follows:

Eros stated that the MAS [Ministère des Affaires sociales] made itself subject to the provisions of the [Copyright] Act of its own volitionthrough its negotiations with Eros of the contract for assignment of copyright. The MAS derived a benefit from this by obtaining anexclusive licence to the CTMSP [an electronic health care

assessment tool]. It argued that this constituted an implicitacceptance of the benefits of the provisions of the Act. The MAStherefore could not take advantage of the provisions creating andprotecting the rights which were the subject of its licence withoutbeing covered by the system of responsibility for infringement of itscontracting party's copyrights. If the rights resulting from the licencewhich the MAS obtained had been infringed, it would have wanted tosue the infringer: it therefore cannot avoid application of theprovisions on which in the circumstances it would have relied. TheCrown and its agents cannot take advantage of legislative provisionsand then ignore the resulting burdens.

Eros, at para. 62.

75. The Court agreed that the Crown was bound by the provisions of the Act, writing:

In the case at bar, I consider that the MAS made use of theprovisions of the Act. There is a close nexus between the benefitprovided by an exclusive licence, namely the right to use a work tothe exclusion of any other person, and the burden not to infringe therights which the assigning party has chosen not to assign, here theright to electronic application of its work. The MAS and its agents are



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therefore bound by the provisions of the Act and cannot rely onCrown immunity.

Eros, at para. 63.

76. In its factum (at para. 53), the Consortium states that the Federal Court, in Eros,

found that “the Crown is presumptively immune from the Act”. This is not an accurate

description of the Court’s holding on this point. Although Justice Tremblay-Lamer notes (at para.

58 of the reasons) that it is necessary to analyze the provisions of the Act “to determine whether

the Crown can still be made subject to the Act by implication”, she never carries out this

analysis. While rejecting Eros’ contention that the Crown can exercise its rights under s. 12 of

the Act without eliminating its immunity (at para. 60 of the reasons), without any further

discussion about whether the Act by necessary implication binds the Crown, she moves directly

to the issue of whether the Crown has waived Crown immunity, finding that it has. The Court

never reaches any conclusion on whether the Crown was immune from the operation of the Act.

Eros, at para. 58-63.

77. Collectively, this body of case law on copyright and the Crown demonstrates that

the Consortium’s position asserts an unprecedented declaration of immunity that finds no

support in case law.

(ii) Government policy demonstrates that the Crown is bound

Canada

78. Canada’s policies are further evidence that the Crown is intended to be, and

believes itself to be, bound by the Act. Canada is on the record as saying that it is bound by the

Act:

(a) in its Communications Policy, Canada advises institutions of the government of

Canada that they must respect copyright ownership “in compliance with the […]

Copyright Act ”;

(b) in the Procedures for Planning and Producing Publications for Sale, under the

Communications Policy, Canada advises institutions of the Government of

Canada that they must determine whether copyright materials not belonging to

the Crown are embedded in works to be licensed;

(c) the Policy states, “[t]he ownership rights for such third party materials must be

respected and properly secured before the use of such materials can be



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licensed” and “Institutions must comply with the Copyright Act and ensure that

the ownership rights associated with works subject to copyright are fully

respected in all media applications”; and

(d) the Policy also states that permission to reproduce works subject to Crown

copyright will be denied where the intended reproduction would infringe on the

proprietary rights of third parties.

Treasury Board Secretariat Canada, Communications Policy of theGovernment of Canada, located at http:/ /www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12316

Treasury Board Secretariat Canada, Communications Policy of theGovernment of Canada: Procedures, Procedures for Planning andProducing Publications for Sale, http:/ /www.tbs-sct.gc.ca/pubs_pol/sipubs/comm/cpgcp-ppcgc04-eng.asp#Toc137523382

79. Because the territories have no constitutional status separate from the Crown inright of Canada, the policies of the Government of Canada apply to the territories. Accordingly,

the assumption of the federal Crown of its obligations under the Act can be taken to be binding

on the territories.6

Consortium members

80. Interrogatory 21 to the Consortium in this proceeding stated:

Do You have (a) policy(ies) related to the use, Copying, performance,publishing, conversion, adaptation, communication to the public bytelecommunication or licensing of non-government Published Works?

81. According to the Statement of Agreed Facts, the provinces (or departments) of

Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince

Edward Island a l l have policies related to the use, copying, performance, publishing,

conversion, adaptation, communication to the public by telecommunication or licensing of non-

government Published Works. Moreover, many of the policies clearly acknowledge that the

provinces are bound by the Act and they may not infringe others’ rights thereunder. For

6Section 28 of the Communications Policy of the Treasury Board of Canada states that Canadian

institutions (defined to include all entities designated under Schedule I, 1.1, and II of the Financial Administration Act , RSC 1985, c. F-11 (“FAA”)) “must comply with the Copyright Act and ensure that theownership rights associated with works subject to copyright are fully respected....” Covered institutionsinclude, inter alia, the Department of Indian Affairs and Northern Development and the Department of Justice of Canada. Even if the territories are not considered an “institution” covered by the policy, absentlocal legislation enacted by the territories’ respective governments to the contrary, federal Crown policyshould be presumed to apply to them given their constitutional status. See Commissioner of theNorthwest Territories v. Canada, 2001 FCA 220, [2001] 3 FC 641 at para. 21 (describing territories’constitutional status as not distinct from their delegation of powers from the federal government).

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example, in addition to the policies described in paragraph 28 above, Consortium members’

policies include:

(a) Manitoba: Manitoba's internal website, in policy approved and posted since July

2005, directs departments to obtain written permission from the copyright holder

before placing copyrighted content on a departmental website (SAF at para. 52;

Manitoba – Appendix 27). In addition, some departments of Manitoba have

explicit policies requiring that third parties’ copyrights be respected (SAF at para.

53);

(b) New Brunswick: The Department of Education “respects copyright agreements

and Canadian copyright laws” (SAF at para. 67). Also, the Information Services

and Systems branch of the Department of Nature Resources states it is the

policy of the Department of Nature Resources that employees “must comply withfederal and provincial laws, and respect the legal protection provided by

copyright and license to data” (SAF, New Brunswick – Appendix 11);

(c) Newfoundland and Labrador: NL has a policy or policies regarding the use,

copying, performance, publishing, conversion, adaptation, communication to the

public by telecommunication or licensing of some of its works (SAF at para. 73);

(d) Nova Scotia: Several departments acknowledge the province is bound by

copyright law, for example:

(i) The NS Sustainable Procurement Policy permits alternative procurement

"to ensure compatibility with existing products; to recognize exclusive

rights, such as exclusive licenses, copyright, and patent rights; or to

maintain specialized products that must be maintained by the

manufacturer or its representative". The NS Guidelines for the use of the

Internet requires employees to respect intellectual property rights when

obtaining information over the internet, when participating in electronic

discussion groups, when transferring files via file transfer protocol (FTP),

and when uploading and downloading software and information on

Internets [SAF, Nova Scotia Appendix 8];

7 Providing: “Departmental websites that may include content copyrighted by another party, must getwritten permission to do so from the copyright holder. Failure to get permission is a violation of the federalCopyright Act .”



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(ii) the Occupational Health and Safety Division of the Department of Labour

and Workforce Development developed policies and procedures to

minimize conflicts with federal copyright legislation while still maintaining

a proper level of service to clients – in particular, providing “When a

Division member plans to widely distribute copies of copyrighted material,

the member shall obtain a release from the copyright owner before

distribution” [SAF, Nova Scotia - Appendix 9]; and

(iii) Nova Scotia Archives and Records Management has developed a

copyright policy with respect to the institution's archival and library

holdings at the Public Archives—in particular, “to provide for compliance

with the federal Copyright Act (R.S.C. 1985, c. C-42) as amended and its

attendant regulations, with respect to the institution’s archival and library

holdings” [SAF, Nova Scotia - Appendix 10];

(e) Nunavut: The Nunavut Court Library, Court Services Division, Department of

Justice, introduced a patron guide in August 2010. This guide addresses the use

and Copying of Published Works and advises patrons that the Library subscribes

to the Fair Copy Principle (SAF at para. 123; Nunavut – Appendix 6);

(f) Prince Edward Island: The Queens Printer has the following unwritten policy:

“that the front office screens all incoming work requests for copyright protection

symbol and any restrictions on reproduction. If copyright is on the material, we

require the client to seek written permission from the author or agency to

reproduce before we will accept the work request […] digital production staff are

also instructed not to reproduce electronic documents which have copyright

protection.” The manager, Mike Fagan, has verbally communicated the policy to

all staff and his office screens all printing requests and advises clients if copyright

permission is required (SAF, Appendix AC-14, PEI Response to Interrogatory

21); and

(g) Saskatchewan: The Education Department reports that it abides by the Access

Copyright Elementary and Secondary School Tariff, 2005-2009 with respect to

copying (SAF at para. 150).



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82. Interrogatory 23 states:

Do You direct or advise Your FTEs that permission to use, Copy,perform, publish, convert, adapt, communicate to the public bytelecommunication or license Published Works is not required byYou?

83. According to the Statement of Agreed Facts, every member of the Consortium

answered “No” to this interrogatory, i.e., no member advises its employees that permission to

use Published Works is not required.

84. The Consortium members’ policies (described in the Statement of Agreed Facts

and appendices thereto) are a further indication that they respect their obligations under the Act,

and recognize that they are bound by the Act.

(iii) The Consortium members’ contracts to obtain use of copyrighted works

85. It is also significant that each of the Consortium members has entered into

agreements which (1) authorize their employees to copy “published works”; and (2) allow the

use of intellectual property of third parties. In the interrogatories, “published works” refers to

works protected in Canada by copyright. The sheer magnitude and number of these

agreements, in fact, became an issue in the interrogatories stage in this proceeding. When

challenged by Access Copyright that the Consortium members had failed to properly answer

Interrogatory 6 (provide copies of agreements for the use of intellectual property), counsel for

the Consortium, Mr. O’Neill, wrote to the Board on October 25, 2010 and advised as follows:

Notwithstanding the best efforts of the Consortium’s members toprovide such a large volume of information – and despite the Board’sruling of May 18, 2010 [in which it ruled inter alia that all copies of such agreements must be provided] this has proven to be animpossible feat for the Consortium to accomplish. In this regard, weare attaching to this letter an unsolicited email ... received from [...]the Nova Scotia Department of Justice. In the course of his e-mail,[the writer] wrote as follows with respect to Access Copyright’scomplaint in relation to Interrogatory 6:

In our original responses, we tried to provide as muchinformation as we could in response to this question, byindicating as best we could, the software programs that weused and number of licenses. There are approx 1000+software titles that we have identified, and the number of licenses is easily tens of thousands, but could be past100,000. The most comprehensive response was providedby our Chief Information Office (designated at sub-unit G31)including the attachments provided by G31 to IR 6. Thisresponse included a few “master” or enterprise wideagreements.



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Access says it is “entitled” to all of these agreements. Icannot imagine any world where providing 100,000, or eventens of thousands of separate software license agreements isin any way, shape or form reasonable, or proportional to theprobative value of this request.

Letter to the Board from J.A. O’Neill dated October 25, 2010.

86. The Board ordered the interrogatories to be answered and copies of all

agreements to be provided. Mr. O’Neill pointed out in his October 25, 2010 letter that this

involved “tens of thousands, possibly hundreds of thousands, of documents”.

Ibid .

87. Clearly, the Consortium members have entered into a massive number of

agreements, both to obtain authorization for their employees to copy “published works” and

allow the use of intellectual property of third parties. Based on the answers provided, the typesof agreements entered into by the Consortium members include:

(a) Software license agreements;

(b) Media monitoring licenses;

(c) Content aggregation services licenses;

(d) News alert and contact agreements with the Canadian Press;

(e) Photographic and artistic reproduction licenses;

(f) Geographic mapping intellectual property licenses;

(g) Statistics database use agreements;

(h) Legal database use agreements;

(i) Canadian Institute of Chartered Accountants and other professional online

database use agreements;

(j) Online legal publications agreements; and

(k) Trademark licensing.

e.g., Statement of Agreed Facts at paras. 27, 40, 56, 102, 103, 106; PEI Appendix I –Response to Interrogatory 5.

88. Many of these agreements include in their express terms recognition of copyright

owned by the licensor and restrictions on the rights of the province or territory in question to use

that copyrighted material. For example:

(a) New Brunswick: Agreement between Entro Communications and New Brunswick

dated January 12, 2009 providing for assignment to New Brunswick by Entro



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Communication of all rights in artistic work (SAF, New Brunswick – Appendix 1),

and Oracle Licensing Agreement dated May 19, 2009 with Department of Public

Safety providing “Upon Oracle’s acceptance of your order, you have the non-

exclusive, non-assignable, royalty free, perpetual (unless otherwise specified in

the ordering document), limited right to use the programs and receive any

services you ordered solely for your internal business operations. [...] Oracle or

its licensors retain all ownership and intellectual property rights to the programs.

Oracle retains a l l ownership and intellectual property rights to anything

developed and delivered under this agreement resulting from services. You may

make a sufficient number of copies of each program for your licensed use and

one copy of each program media.” (SAF, New Brunswick – Appendix 2);

(b) Nunavut: Licensing agreement between Court Services Division of Department of

Justice and Thomson Carswell available online, providing: “Reproduction in

whole or in part of any Carswell product or service, regardless of publishing

format, is strictly prohibited. Reproduction, storage in a retrieval system, or

transmission in any form or by any means, electronic, mechanical, photocopying,

recording or otherwise, except as specified in the product Licence Agreement,

constitutes copyright infringement without the prior written permission of the

Publisher. Copyright is vigorously protected. Carswell is committed to continuing

its partnership with the professional community in promoting access to Carswell

products.” (SAF, Nunavut – Appendix 6); and

(c) Prince Edward Island: Photostock agreement with Thinkstock available online,

providing “you have one year to download the images available through your

image pack. Once downloaded, images may be used at any time for multiple

projects for all purposes other than those restricted uses outlined in the image

pack license agreement. Images licensed through this image pack agreement

may only be used by up to ten (10) users and may not be shared with others. Up

to 500,000 copies of licensed images may be reproduced, and each image

licensed through this agreement comes with indemnification up to ten thousand

US dollars ($10,000).” (SAF, PEI – Appendix 1).

89. If the Consortium members were not bound by the Act, there would be no need

for them to enter into contracts to acquire the right to use works protected by copyright. Indeed

(as evidenced by the answers to the interrogatories), the fact that Consortium members have

done so extensively with respect to computer software programs, for example, indicates that



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they are bound by – and believe they are bound by – the Act. Otherwise the Consortium

members are wasting public funds associated with the cost of entering into, monitoring

compliance with, and payment under those contracts, contrary to the Consortium members’

fundamental responsibilities to their citizens who provide the funds.

(c) Canada’s international obligations evidence clear intention to bind the Crown

90. As held by the Supreme Court of Canada in SOCAN v. Canadian Assn. of

Internet Providers, “Parliament is presumed not to legislate in breach of a treaty, the comity of

nations and the principles of international law.” Canada has adhered to a number of

international treaties which contain provisions relating to the protections of copyright. These

agreements include NAFTA, the TRIPS Agreement, the Berne Convention and the Rome

Convention. Canada’s obligations under certain of these international instruments have been

codified into domestic l aw through the enactment of the North American Free TradeImplementation Act and the World Trade Agreement Implementation Act. Once a country has

adhered to an international treaty, international law provides that it is no excuse for a state to

plead its internal constitution as an excuse to evade its international obligations. This rule is

codified in Article 46 of the Vienna Convention on the Law of Treaties (in force in Canada

January 27, 1980).

Society of Composers, Authors and Music Publishers of Canada v.Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427 atpara. 150.

Ian Brownlie, Principles of Public International Law (4th ed., 1990) at 35-37.

Vienna Convention on the Law of Treaties, art. 46. See Canada TreatyInformation, website: http:/ /treaty-accord.gc.ca/details.asp?id=104068

91. As noted below, Parliament has authority to bind the provinces to its international

obligations for matters falling within Parliament’s legislative competence as a matter of

constitutional law. The territories themselves are bound as soon as the federal Crown is bound.

(i) NAFTA

92. Chapter 17, Article 1701 of NAFTA sets out the nature and scope of the

obligations of parties to NAFTA with respect to intellectual property, and specifically provides

that each Party is obliged to “provide in its territory to the nationals of another Party adequate

and effective protection and enforcement of intellectual property rights”. Under Article 1701(2),

parties shall give effect to Chapter 17 and to the substantive provisions of the Berne Convention

and to three other intellectual property rights treaties, and they shall make every effort to accede

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to the treaties mentioned if they have not already done so. NAFTA Article 105 expressly obliges

Canada to ensure that the provinces observe all provisions of the trade agreement:

105. The Parties shall ensure all necessary measures are taken inorder to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state

and provincial governments. [emphasis added]

93. Canada incorporated NAFTA into domestic law through the North American Free

Trade Agreement Implementation Act (“NAFTA Implementation Act ”), the stated purpose of

which is to implement NAFTA. Section 3 of the NAFTA Implementation Act directs that the Act

is to be interpreted in a manner consistent with NAFTA. Therefore, a contextual consideration of

the Act must take into account Canada’s obligation under NAFTA to ensure that the provinces

observe the Article 17 provisions of NAFTA affecting intellectual property and specifically the

provisions affecting copyright. As noted earlier, it is open to Parliament to embrace the

provincial Crown in its competent legislation if it chooses to do so. The NAFTA Implementation

Act and the World Trade Organization Implementation Act are therefore both binding on the

provincial Crowns.

Constitutional Law of Canada, s. 10.9(f).

Schneider v. The Queen, [1982] 2 S.C.R. 112, at 135.

Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441, at paras. 89-90.

94. In interpreting domestic legislation, the courts can rely on international treaties to

which Canada has adhered. The Supreme Court of Canada has held that an international treaty

may be considered in statutory interpretation, and this approach has been followed in copyright

cases. Considering the Act in the context of Canada’s international obligations under NAFTA, by

necessary implication the Act is binding on the federal and provincial Crowns.

National Corn Growers Association v. Canada (Canadian Import Tribunal)(1990), 74 D.L.R. (4

th) 449 (S.C.C.); Harvard College v. Canada

(Commissioner of Patents), [2002] 4 S.C.R. 45 at paras. 12 and 13.

Society of Composers, Authors & Music Publishers of Canada v. Canadian

Association of Internet Providers, [2004] 2 S.C.R. 427; CCH Canadian Ltd. v.Law Society of Upper Canada, [2004] 1 S.C.R. 339; and Tele-Direct (Publications) Inc. v. American Business Information Inc. (1997), 76 C.P.R.(3d) 296 (F.C.A.), leave to appeal refused (1998), 228 N.R. 200 (note)(S.C.C.).

(ii) TRIPS Agreement

95. Canada adheres to the Berne Convention and the amendments enacted to it by

the Rome Copyright Convention 1928. The Act (s. 91) provides that the Governor in Council



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shall take such measures as are necessary to secure the adherence of Canada to the Berne

Convention, which requires that copyright subsists in an original work where the author is a

citizen of a Berne Convention treaty country (Article 36, Berne Convention). With respect to

copyright, Part II of the TRIPS Agreement states that parties are required to comply with the

substantive provisions of the Berne Convention for the protection of literary and artistic works.

Moreover, Part III of the TRIPS Agreement (which has been incorporated as article 1715, s. 6 of

Part VI of NAFTA) states that immunity of public officials from enforcement remedies under the

agreement shall be limited: “[m]embers shall only exempt both public authorities and officials

from liability to appropriate remedial measures where actions are taken or intended in good faith

in the course of the administration of that law.” Canada ratified the World Trade Organization

Agreement, and incorporated the TRIPS Agreement into Canada’s domestic law, through

passage of the World Trade Organization Agreement Implementation Act.

TRIPS: Agreement on Trade-Related Aspects of Intellectual PropertyRights; Annex 1C of the Mar rakesh Agreement Establishing the WorldTrade Organization, signed in Marrakesh, Morocco on 15 April 1994.

TRIPS Agreement, Part III, art. 48; NAFTA, Part VI, art. 1715, s.6.

(iii) Crown or sovereign immunity

96. Neither NAFTA nor the World Trade Organization Agreement (containing the

TRIPS Agreement) contains exemption for infringement by governmental bodies, and Canada

has made no reservations in this regard. International treaties to which Canada is a party have

been critically important to the establishment of the existence, content, and extent of domesticcopyright protection. Other parties to these treaties do not provide immunity to their

governments (or heads of state) in respect of copyright infringement. Canada’s obligations

arising under the same agreements cannot be considered to be less extensive than those of the

other parties. Under these agreements, Canada would be expected to provide similar

protection. In entering into its international obligations, and in implementing them into domestic

law, there was a clear intention by Canada that it and the provinces would be bound by

copyright laws.

World Trade Organization Agreement Implementation Act , S.C. 1994, c. 47,s. 4.

D. THE BENEFIT / BURDEN EXCEPTION TO CROWN IMMUNITY APPLIES

1) The benefit / burden analysis

97. Assuming arguendo that Crown immunity is engaged and that the Crown is not

bound by necessary and logical implication, Access Copyright submits that the Crown is bound

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by the Act through the application of the benefit / burden exception to Crown immunity. As is

established by the caselaw, when the Crown invokes a statute to secure the benefit of

provisions that work to its advantage, it is taken to submit to any corresponding burdens. This

exception to Crown immunity – referred to as the benefit/burden exception – has been

explained as follows:

Since the Crown is entitled only to as much benefit as the statuteallows, it must accept whatever conditions or qualifications the statutemay impose. In short, the Crown must take the law as it finds it.

Sullivan, Sullivan on the Construction of Statutes, at 754.

Liability of the Crown (4th. ed.) at 296-298.

98. The leading modern authority on the benefit/burden exception to Crown immunity

is Sparling v Québec , a decision of the Supreme Court of Canada. Sparling established the

following propositions:

(a) the benefit/burden exception may apply even though the benefit and burden have

arisen under different statutes. In R. v. Murray, for example, the benefit arose

under a federal enactment and the burden under provincial legislation: Sparling

at 1025;

(b) the benefit/burden exception may apply even though the Crown has not actively

sought to take advantage of a statutory provision. In the Sparling case, the

provincial Crown had done nothing more than purchase shares of a federally-

incorporated company. This was enough to make it subject to the obligations

imposed on shareholders under the Canada Business Corporations Act: Sparling

at 1025; and

(c) the key consideration in applying the benefit/burden exception is the nexus

between the legislative benefit enjoyed by the Crown and the legislative burdens,

exceptions or qualifications set up against the Crown. There must be a sufficient

connection between the two. The burden must be “attendant” on the benefit or a“precondition” or “ordinary concomitant” of the benefit: Sparling at page 1025,

1027-28.

Sparling v. Québec (Caisse de dépôt & de placement du Québec), [1988] 2S.C.R. 1015 [hereinafter Sparling ].

99. In Sparling , the Caisse de dépôt et placement du Québec had purchased 22 per

cent of the common shares of a corporation incorporated under the Canada Business



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Corporations Act (“CBCA”). The CBCA defined an “insider” to be a shareholder with more than

10 per cent of the common shares and required such a shareholder to file an “insider” report.

The Caisse refused, arguing that the obligation to file an insider report did not bind the Crown,

and since it was an agent of the Crown, it was not bound either.

100. As the CBCA contained no express words or necessary implication that the

Crown was bound, the question before the Court was whether the Caisse, by purchasing the

shares, had taken the benefit of the statute and thereby became bound by the reporting

requirement. The Supreme Court of Canada found it was bound. La Forest J. writing for the

entire Court stated:

It is also true that the Caisse, as agent for the Crown in right of theProvince, is not seeking affirmatively to take advantage of a provisionof a statute or of the common law. It simply purchased shares in acorporation which happened to be governed by a statute, the CanadaBusiness Corporations Act . It brought no action at law and sought noother advantage.

To conclude from this, however, that the Crown is not bound by theobligations attendant upon the rights conferred by the statute requiresthat one presuppose a rather simplistic view of the nature of a shareand its purchase. A share is not an isolated piece of property. It israther, in the well-known phrase, a "bundle" of interrelated rights andliabilities. A share is not an entity independent of the statutoryprovisions that govern its possession and exchange. Thoseprovisions make up its constituent elements. They define the veryrights and liabilities that constitute the share's existence. The Canada

Business Corporations Act defines and governs the rights to vote atshareholders' meetings, to receive dividends, to inspect the booksand records of the company, and to receive a portion of thecorporation's capital upon a winding up of the company, among manyothers. A "share" and thus a "shareholder" are concepts inseparablefrom the comprehensive bundle of rights and liabilities created by theAct. Nothing in the statute, common sense or the common lawindicates that this bundle can be parcelled out piecemeal at the whimof the Crown. It cannot pick and choose between the provisions itlikes and those it does not. To do so would be to permit it to define anentity which is the creature of federal legislation. What the Caisseobtained was an integral whole. [emphasis added.]

Sparling at p. 1025-26.

101. Speaking of the requirement for a nexus between the benefit and the burden in

Sparling , La Forest J. stated:

[…] It is quite correct to conclude that whenever the question of theapplication of the benefit/burden exception arises, the issue is notwhether the benefit and burden arise under the same statute, butwhether there exists a sufficient nexus between the benefit andburden. As McNairn, op. cit ., at p. 11, puts it:



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It is not essential … that the benefit and the restriction upon itoccur in one and the same statute for the notion of crownsubmission to operate. Rather, the crucial question is whether the two elements are sufficiently related so that the benefitmust have been intended to be conditional upon compliancewith the restriction.

Ibid., at 1025.

102. Justice La Forest concluded:

Absent the statutory regime, the idea of a share as an object of commerce is meaningless. The relationship between benefit andrestriction is sufficiently close that the Crown must be determined tohave taken the law as it found it.

Ibid ., at 1026.

103. In a later decision of the Supreme Court of Canada, Alberta Government Telephones v. CRTC , Dickson C.J., writing for the majority, elaborated on the nature of the

nexus between the benefit and the burden. Dickson C.J. held that Alberta Government

Telephones (“AGT”) was not subject to provisions under the Railway Act because there was an

insufficient nexus between the benefits of a general nature enjoyed by AGT and the burdens

sought to be imposed:

AGT has done nothing to attract the broad sweep of the Railway Act analogous to the purchase of a share which has a specific nexus to theCBCA regime. There is no evidence that AGT relies now, or has reliedin the past, on particular benefits of the Railway Act or of CRTCregulation to which interconnection with CNCP is an attendant burden.

[...] a fairly tight (sufficient nexus) test for the benefit/burden exceptionfollows from the strict test for finding a legislative intention to bind theCrown. A broad benefit/burden test would be overly legislative in theface of the current formulation of s. 16. Regretfully perhaps, butindeniably, the statutory Crown immunity doctrine does not lend itself to imaginative exceptions to the doctrine, however much suchexceptions may conform to our intuitive sense of fairness.

Alberta Government Telephones, at 289-291 ( per Dickson C.J.).

104. As can be seen, the Alberta Government Telephones test for finding the

necessary nexus is not as narrow as the Consortium suggests. As long as the nexus between

the benefit taken by the Crown and the burden imposed by the Act is “fairly” tight and

“sufficient”, the benefit / burden exception to Crown immunity will be made out.



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(a) The relevance of section 12 to the benefit-burden analysis

105. The Consortium relies on the Crown copyright provision of the Act, s. 12, to

support two propositions: first, that the reference to “[w]ithout prejudice to any rights and

privileges of the Crown” is meant to preserve Crown immunity; and second, that the benefit to

the Crown granted by s. 12 is not closely enough linked to the burden to support the

benefit/burden exception. However, the Consortium’s analysis is faulty in both respects. As set

out in detail below, the first argument has no merit because, in accordance with principles of

statutory interpretation (and authority, including authority relied on by the Consortium), the

reference in s. 12 to “rights and privileges” pertains only to rights and privileges relating to

Crown copyright – not the principle of Crown immunity. The Consortium’s second argument

focuses on the wrong benefit. Section 12 merely recognizes that the Crown owns copyright in

works prepared or published by or under the direction or control of Her Majesty. However, it is

sections 3, 15, 18 and 21 of the Act that add substance to the ownership granted by s. 12. The

Crown relies on these sections of the Act to protect its ownership rights. By accepting these

benefits under the Act in respect of its own copyright, the Crown becomes subject to the

“burden” of likewise respecting the copyright of other owners under the Act.

(i) The rights and privileges referred to in section 12

106. Section 12 of the Act states:

12. Without prejudice to any rights or privileges of the Crown, where anywork is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright inthe work shall, subject to any agreement with the author, belong to Her Majesty and in that case shall continue for the remainder of the calendar year of the first publication of the work and for a period of fifty yearsfollowing the end of that calendar year.

107. Section 12 of the Act grants to the Crown copyright over works prepared or

published by or under the control or direction of Her Majesty or any government department.

The preamble to s. 12 states that this grant is “[w]ithout prejudice to any rights or privileges of

the Crown”. The Consortium argues that this preamble is referring to the principle of Crownimmunity. For the reasons set out in the following paragraphs, it is submitted that the

Consortium’s argument is without merit and the preamble in fact refers to the Crown’s common

law rights and privileges in respect of copyright.

108. The principle of statutory interpretation adopted by the Supreme Court of Canada

is that:



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Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammaticaland ordinary sense harmoniously with the scheme of the Act, theobject of the Act, and the intention of Parliament.

Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 21.

109. Applying this principle to the interpretation of the preamble to s. 12, it is

submitted that the preamble language is a reference to the common law right and prerogative of

the Crown to copyright, which has been described as rights in acts of Parliament, orders in

council, proclamations and the like. The English Court of Appeal in Millar v. Taylor described the

Crown’s exclusive common law rights in respect of copyright as follows:

It is settled, then, “that the King is owner of the copies of all books or writings which he had the sole right originally to publish; as Acts of Parliament, Orders of Council, Proclamations, the Common-Prayer Book.” These and such like are his own works, as he represents theState.

Millar v. Taylor (1769), 4 Burr. 2303, 98 E.R. 201 at 215 (K.B.).

110. Professor David Vaver (in a paper relied on by the Consortium in its factum)

describes the rights and privileges referred to in s. 12 as those directly related to the Crown’s

historic right to copyright:

What rights or privileges are these? On investigation, this refers to theancient royal prerogative: the Crown's "sole right of printing a

somewhat miscellaneous collection of works, no catalogue of whichappears to be exhaustive." This non-exhaustive catalogue – which inthe 17th century was said to encompass everything written – is saidtoday to include statutes, orders-in-council, proclamations, admiraltycharts, and (some even say) judicial decisions.

Vaver, David. “Copyright and the State in Canada and the United States”,LEXUM , University of Montreal, June 1995. Online:http:/ /www.lexum.com/conf/dac/en/vaver/vaver.html

111. Absent the preamble, s. 12 protects a very narrow range of Crown copyright –

works prepared under the direction or control of the Crown or a government department. The

preamble to s. 12 ensures that the Crown’s other rights and privileges in respect of Crown

copyright are preserved.

112. The multitudinous and varied nature of the Crown’s historical common-law rights

and privileges makes it absurd to infer that s. 12 binds the operation of the Act to the contours of

every one of those rights and privileges, including Crown immunity. A non-exhaustive list of

such rights and privileges would include, among others:

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(a) Crown immunity against injunctions;

(b) Crown immunity from set-off;

(c) Crown immunity from in rem proceedings;

(d) Crown immunity from execution;

(e) Crown immunity from discovery; and

(f) Crown immunity from statutes of limitation.

Liability of the Crown at 31, 46, 47, 51, 65, 71.

113. To conclude that s. 12 invokes all the Crown’s historic rights and privileges would

create a legal dead zone right in the heart of the copyright regime. While many rights and

privileges of the Crown have been reformed through provincial and federal Crown proceedings

acts, it is incongruous to suggest that the effectiveness of the operation of the Act shoulddepend on individual legislative enactments. Otherwise, if a court was hearing an infringement

action, it could not order discovery against the Crown, issue an injunction against the Crown

found to be engaged in unlawful infringement, or execute any judgment for damages or costs

against the Crown.

114. Thus, the reliance by the Consortium on the preamble language to s. 12 is

misplaced: the rights and privileges preserved relate only to copyright. The preamble language

is of no assistance to the Consortium.

(ii) The benefits gained by the Crown – and the associated burdens

115. The Consortium argues that it is not an “attendant burden” to the Crown’s

assertion of copyright under the Act that the Crown respect others’ copyright. However, the

Supreme Court of Canada explained in Alberta Government Telephones that waiver occurs

where the Crown “takes the benefit of a statute divorced from its enumerated restrictions.” It is

just such a divorce of benefit and burden that the Consortium is attempting to effectuate here.

Just as in Sparling , where the Court found that the very act of purchasing a share “is an implicit

acceptance of the benefits of [the CBCA’s] statutory regime”, the assertion of copyright is an

implicit acceptance of the benefits of the Act’s regime. Whether the Crown is participating in the

market by purchasing shares or asserting property rights in copyright, it is seeking to benefit

from a bundle of rights defined by particular statutes. For copyright no less than for corporate

shares, “[t]hese benefits are indissolubly intertwined with the restrictions attendant upon them.”

Alberta Government Telephones, at 289.



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Sparling , at 1026.

116. The Consortium, at paragraph 22 of its factum, argues that because Parliament

dealt with Crown copyright under s. 12 of the Act, there is no link between the rights granted to

the Crown and the general grants of rights “to others” under sections 3, 15, 18 and 21 of the

Act, and therefore “[t]here was no Parliamentary intent to bind the Crown”. This argument is

patently incorrect.

117. Section 12 specifies that if a work has been prepared or published by or under

the direction or control of Her Majesty, the copyright in the work (subject to any agreement with

the author) belongs to Her Majesty. But s. 12 in and of itself does not specify what the right of

ownership confers. Since the Act is a complete and exhaustive code with respect to copyright

(including in relation to Crown rights and privileges relating to copyright), one must look to

sections 3, 15, 18 and 21 (and other sections of the Act) to determine the bundle of rights andremedies that the Crown (and all others who own copyright) obtains as an owner of copyright.

118. For example, s. 3 provides that copyright in relation to work means the sole right

to reproduce the work or any substantial part thereof and establishes that the copyright holder

has the sole right to carry out the acts described in sections 3(1)(a) though (i ). While s. 12 of the

Act establishes where copyright belongs to the Crown, s. 3 of the Act provides the bundle of

rights associated with Crown copyright. The ownership granted to the Crown under s. 12 would

be useless without the bundle of rights pertaining to ownership granted by s. 3. Other sections

of the Act set out an exhaustive code of remedies in respect of copyright. Thus, there is no merit

to the Consortium’s argument that the only benefit granted to the Crown under the Act flows

through s. 12 – if it were not for the rights and remedies granted under other provisions of the

Act, s. 12 would be a hollow and meaningless benefit.

119. Where the Crown creates the works addressed in s. 12, it relies on s. 12 to have

copyright over those works. It is able to assert its ownership rights over copyright only through

the operation of other sections of the Act (sections 3, 15, 18 and 21, for example). It relies on

the Act for a remedy where its copyright is infringed.

120. Here, the Consortium is not relying on the Act for a limited (e.g., defensive)

purpose. It is also using the statute as a sword to “secure positive rights” – the right to assert

copyright, prosecute infringement, and claim damages pursuant to the remedies provided in the

Act. To conclude that the Crown is permitted to do this and not have waived its immunity is

synonymous with concluding that the Act was written by Parliament to allow the Crown to



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acquire a well-regulated and defined set of benefits not available under common law while

avoiding the limitations inherent in the Act.

121. Outside the Act, no one has the right to use works protected by copyright. If the

Crown chooses to use copyrighted works, it must be using them pursuant to the rights granted

under the Act. In so choosing, the Crown must accept the burdens imposed by the Act under

those sections of the Act, i.e., that the right to copyright owned by others is also subject to the

same protections as those granted to the Crown. The nexus between the Crown accepting the

protection provided, for example, by s. 3 of the Act (which is necessary to clothe the ownership

right granted by s. 12) (i.e., the benefit) could not be more closely related to the burden (i.e.,

respecting the rights granted by the same sections to other owners of copyright).

122. The codification and statutory amendment of common-law Crown privileges

significantly varies those privileges. The enforcement scheme for assertion and protection of copyright that exists under the Act did not exist under the same terms at common-law. Thus, no

rights of the Crown (as protected pursuant to s. 17 of the Interpretation Act ) are constrained by

holding the Crown subject to copyright law either when it gains rights under the Act or when it

invokes rights under the Act. As the Supreme Court of Canada explained in Ontario v. Canada

(Board of Transport Commissioners):

The expression "the rights of His Majesty" in this context means, intheir Lordships' view, the accrued rights of His Majesty, and does notcover mere possibilities such as rights which, but for the alterationmade in the general law by the enactment under consideration, mighthave thereafter accrued to His Majesty under some future contract.[emphasis added]

Ontario v. Canada (Board of Transport Commissioners), [1968] S.C.R. 118,at 124.

123. Likewise, in Agriculture Financial Services Corp. v. Redmond , the Alberta Court

of Appeal held that the Crown’s common-law prerogatives with respect to mortgages had been

superseded by statute and that there was a nexus between the benefits of registration of a

mortgage under the Alberta Land Titles Act and the burden imposed on a mortgagee by s. 41(1)

of the Law of Property Act :

[T]he legal history of Alberta makes it clear that the nature of amortgage is now inseparably linked to the statutory conditions thatgovern it. Its origins are from common law and equity, but its modernexistence is essentially statutory. Like the concept of share andshareholder discussed by La Forest J. in Sparling , the present-daymortgage is a bundle of rights, much of which is dictated by statute.



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Agriculture Financial Services Corp. v. Redmond , 1999 CarswellAlta 487, atpara. 88.

124. The Act has worked a similar change with respect to Crown immunity. Both the

Crown and other individuals now have well-defined rights. Even if the Board were to conclude

that when Parliament drafted the Act it intended (under s. 12) to equip the Crown with a shieldwhen the Act is used against it unilaterally (i.e., without any assertion by the Crown of other

rights under the Act), the Board cannot further infer that Parliament intended to both put a sword

in the Crown’s hand and to disarm all other parties.

125. The Supreme Court of Canada’s guidance in Toronto Transportation

Commission v. R. is instructive in this regard. The Court held that “when the Crown brings an

action at common law, it accepts the common law applicable to such a claim […] and its rights

are those arising from that relation under the rules of that law”. Indeed, in Royal Bank v. Black &

White Dev. Ltd., the Alberta Court of Appeal aptly described the law as follows:

It was a fundamental and ancient principle of the common law thatwhen the King came into the common law courts as a litigant, hecame in his capacity of common law person and left his prerogativeguns at the door; with a few possible exceptions such as thosepertaining to estoppel and laches, he was subject to the lawsapplicable between subject and subject.

Toronto Transportation Commission v. R., [1949] S.C.R. 510, at 520-521.

Royal Bank v. Black & White Dev. Ltd., 60 Alta. L.R. (2d) 31 at para. 13 (Alta.C.A.).

126. Indeed, in other cases where the Crown has invoked the benefit of a statute and

then tried to improve its position vis-à-vis third parties also subject to that statute by avoiding the

burden of the statute, the courts have rejected the Crown’s contention that there is not a

sufficient nexus and found waiver. For example, in Hongkong Bank of Canada v. Canada, the

British Columbia Court of Appeal held that when the Crown took the benefit of registration

against land conferred by s. 79 of the Court Order Enforcement Act in order to attain status as a

creditor of equal degree to the other creditors, it could not avoid the burden of rateable

treatment set in sections 103 and 104 of the same act.

Hongkong Bank of Canada v. Canada, 58 D.L.R. (4th) 385 (B.C.C.A.) at para.20.

See also Royal Bank v. Samra, 2010 CarswellAlta 2201 (Alta. Master)(finding Crown waived prerogative of priority of payment by filing andrelying on writ filed with respect to personal property registry — Crown had



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benefit of notifications and claim procedure, and was required to acceptburden of pro rata sharing on same basis as other similar creditors).

127. The Supreme Court of Canada reiterated this principle in Alberta Government

Telephones, where it explained how immunity is best viewed as a shield to protect the Crown’s

rights and not a sword to extort new privileges. The benefit / burden exception prevents the

Crown from using immunity, selectively and indiscriminately, as both a sword and a shield,

striking and parrying at the same time to take more privileges under modern regulatory statutes

than it is entitled to pursuant to its traditional common-law immunities.

128. In that case, Alberta Government Telephones (“AGT”) had entered into

agreements that were required to be subject to the CRTC’s approval. Another

telecommunications company, which was not a party to the agreements (CNCP

Telecommunications), argued that the CRTC had authority under the Railway Act to require

AGT to provide facilities for the interchange of telecommunications traffic between the systemoperated by CNCP and the system operated by AGT. AGT argued that as an agent of the

province of Alberta, it was entitled to assert Crown immunity from the application of the Railway

Act , and therefore it did not fall within the regulatory authority of the CRTC. The Supreme Court

agreed.

129. The Court held that AGT never relied on any benefits under the Railway Act , and

any advantages obtained by AGT under the Railway Act were insufficient to link it to CRTC

jurisdiction under waiver of Crown immunity. The fact situation in AGT bears no resemblance to

the facts before the Board in the present case, and therefore is of no assistance to the

Consortium here. Rather, as explained above, the situation here is analogous to Sparling .

130. In the present case, it is open to the Crown to choose not to use any works of

others that are protected by copyright. However, if it chooses to use such works, because the

Act is an exhaustive compilation of all rights relating to copyright in Canada, the only way the

Crown can obtain a right to use the works of others is under the Act. In the case of a literary

work, if the Crown wishes to use the work, it must comply with any obligations under the statute

associated with such use. Indeed, in the context of the collective administration of copyright, this

is all the more the case.

131. Under Part VII of the Act, Parliament has provided for copyright owners to join

together to provide access to all the works in the “collective’s” repertoire. This provides those

who wish to use these works the option of securing permission from one source – the

collective – under a tariff certified by an independent quasi-judicial tribunal whose mandate is to



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certify a fair and reasonable rate. Once the Crown chooses to rely on this system, by using a

work(s) in the collective’s repertoire without securing a licence from the rightsholder individually,

the Crown cannot obtain the benefit of this system without the burden of paying the tariff (or,

indeed, determining whether in the particular instance Crown immunity is waived).

132. This is entirely consistent with the reasoning of the Supreme Court of Canada in

Sparling , where it explained:

Just as in Murray the Crown was not bound by the prejudicialprovisions of the law until it chose to take advantage of its beneficialaspects, here no right or prerogative of the Crown is affected by theCanada Business Corporations Act standing alone. It was only byseeking the benefits of the statute by purchasing shares that theCaisse chose to bring itself within the purview of the law relating toshareholders.

Sparling, at 1027.

133. Such an approach will not “result in subsuming the Crown under any and every

regulatory scheme that happens to govern a particular state of affairs”. Rather, the waiver only

applies where the Crown invokes a significant benefit under the statute, in this case copying

works absent clearance from the individual copyright owner or determining whether any

immunity claimed has been waived in the circumstances. As the Court explained in Sparling :

Reliance upon a statute may ... be for such a limited purpose that thecrown ought not, as a result, to be taken to have assumed the

attendant burdens. Such is the case when a statute is resorted to for a purely defensive reason, for example to give notice under aregistration scheme of the existence of a crown claim. The use of astatute in this way may be distinguished from active reliance tosecure positive rights, the assumption of the burdens of a statutebeing a possible consequence only of the latter circumstance.

Sparling, at 1028.

2) Benefit / burden exception and the burden of proof

134. In their factum (at paragraphs 90 ff ), the Consortium asserts that Access

Copyright bears the burden to demonstrate on a balance of probabilities that each Consortium

member has waived Crown immunity by virtue of the benefit / burden exception.

135. As a preliminary matter, Access Copyright notes that Nunavut (the only one of

the three territories to assert the Act does not bind it) has no standing to assert Crown immunity

since it is bound to the same position as the federal Crown, which is bound by the Act for the

reasons set out in Part A.3) of this factum.



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136. As is evident from the facts set out in the Statement of Agreed Facts (which are

summarized in Appendix “A” hereto), it is clear that each member of the Consortium has waived

Crown immunity. Accordingly, Access Copyright submits that it has met the burden of proof in

respect of each member of the Consortium.

3) The Statement of Agreed Facts evidences the benefits enjoyed by the Consortium

137. It is clear that the Crown gains a benefit from the protections offered by s. 3 and

other sections of the Act. As evidenced by the facts contained in the Statement of Agreed Facts,

the Consortium members:

(a) assert copyright over government works;

(b) charge fees for use of government works;

(c) license government works;

(d) enforce copyright in government works; and

(e) rely on the remedial provisions of the Act available to all copyright owners.

138. Moreover, as demonstrated by the facts outlined in the Statement of Agreed

Facts, the territories and the Crowns in right of the provinces assert Crown copyright over their

works, and they take the position that they are entitled to both royalties over their works and the

remedies provided under the Act for infringement of their copyright. As outlined in Appendix “A”,

the Consortium members’ answers to interrogatories dealing with the following matters

demonstrate they have taken the benefits under (and that they, heretofore, believed themselves

bound by) the Act:

(a) Interrogatory 8: asserts copyright over government works;

(b) Interrogatory 9: has policies regarding government works;

(c) Interrogatory 10: charges fees for use of government works;

(d) Interrogatory 11: licenses government works;

(e) Interrogatory 13: owns or is licensee of registered and unregistered trademarks;

(f) Interrogatory 14: prohibits or controls the use of Crown registered andunregistered trademarks;

(g) Interrogatory 18: enforces Crown copyright and other intellectual property rights;and

(h) Interrogatory 23: has notices on website that reference the Copyright Act andTrademark Act .



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139. Because the Consortium members have taken the benefits conveyed by sections

of the Act (outside of s. 12) to protect copyright in their own works, they are subject to the

restrictions on their use of copyrighted works of others, in accordance with the benefit/burden

analysis. Assuming arguendo that Crown immunity is even engaged here, the Crown has

waived Crown immunity.

4) The Consortium members’ arguments about purchases of copyright licences

140. As noted earlier in this factum (see paragraphs 85 to 89), every member of the

Consortium has admitted to entering into contracts to acquire the right to use works protected

by copyright. However, they argue that the purchase by the Crown of non-exclusive copyright

licenses from Access Copyright is not a benefit under the Act because the Consortium members

who entered into such licences did not need them to legally copy the works made available

under the licences.

141. Such an argument flies in the face of common sense and the principle that the

Crown should not be spending taxpayer monies unless there is a requirement to do so. Most of

the members of the Consortium have statutes that limit their ability to make expenditures except

in consideration for works, goods, or services obtained by contract or otherwise.

(a) Government Accountability Act , RSA 2000, c G-7, s. 15 (requiring a Minister toprovide “statement of responsibility” which “must include a statement to the effect

that all of the Government’s and the Minister’s policy decisions with materialeconomic or fiscal implications have been considered in the preparation of theministry’s business plan or annual report.”);

(b) Financial Administration Act , 1993, SS 1993, c F-13.4, s. 30 (limiting publicexpenditures to payments for obligations under contract or to payees “eligible for or entitled to the payment”);

(c) Financial Administration Act, CCSM c F55, s. 44 (requiring public expendituresbe limited to goods or services supplied and price be per contract or reasonable);

(d) Financial Administration Act , RSNB 1973, c F-11, ss. 40, 41 (same);

(e) Financial Administration Act , RSNL 1990, c F-8, s. 30 (same);

(f) Financial Administration Act , RSPEI 1988, c F-9, s. 40 (same); and

(g) Financial Administration Act , RSNWT (Nu) 1988, c F-4, s. 44 (requiringaccounting officer to “satisf[y] himself or herself that there is no reason why theexpenditure should not be incurred”).



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142. The implication of the Financial Administration Acts of the Consortium members

is that governments are not entitled to squander public funds by making gratuitous, unnecessary

payments. Governments are only entitled to expend public funds where legally required to do

so. If the Consortium’s position in this respect is taken to its inescapable conclusion, the

Consortium members have been engaged in unnecessary and gratuitous expenditures of public

funds without any legal authorization.

143. The Board should reject the Consortium’s argument for what it is: an ex post

facto attempt to avoid the inescapable conclusion that the Consortium members are – and have

heretofore considered themselves – legally bound to enter into contracts to give them the right

to use copyrighted works belonging to others because the doctrine of Crown immunity does not

apply to the Act or, alternatively, has generally been waived by virtue of the Crown’s

commonplace conduct.

5) The Consortium members’ arguments about limited waiver

144. The Consortium members argue that, even if Crown immunity has been waived

in the past through the purchase of non-exclusive licences from Access Copyright, that waiver

does not apply to present or future copying activity.

145. This is a “straw-man” argument. Assuming arguendo that the principle of Crown

immunity and s. 17 of the Interpretation Act are engaged, Access Copyright does not claim that

the Crown’s immunity is forever waived with respect to copyright infringement. Access Copyrightis merely claiming that just as the Crown cannot purchase a share in a company but avoid the

liabilities attached thereto under corporate law, the Crown cannot seek the benefits of the Act

but avoid the restrictions attendant to the statute.

146. Access Copyright is not claiming that the Crown should be found to have

irrevocably waived its immunity on the basis of having entered into non-exclusive copyright

licenses in the past. It is arguing that the Crown has waived (and continues to waive) its

immunity by accepting the benefits of the statute (i.e., the right to assert copyright and rely upon

the remedial provisions of the Act and the other benefits described above in Part D) in relation

to copyright owned by the Crown.

147. Contrary to the Consortium members’ arguments, there are cases in which the

courts have found that the Crown is categorically precluded from asserting immunity with

respect to a statute when it attempts to obtain a benefit from that statute. There is no principle or

case law supporting the Consortium members’ argument that the benefit-burden exception



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operates only in the case of “as applied” challenges to specific action taken by the Crown. For

example, in Sparling , the Supreme Court of Canada held that the Crown is categorically

prohibited from claiming immunity against statutory liabilities whenever it purchases a corporate

share. Likewise, in Ontario v. Canada (Board of Transport Commissioners), the Supreme Court

of Canada categorically held that “Ontario can no more claim to be exempt in the operation of

the Commuter Service from the application of the general provisions of the Railway Act

respecting tolls than British Columbia could claim to be exempt from the general provisions of

the Customs and Excise Acts in the operation of its Liquor Control Board.” And in Neary v.

Nova Scotia (Attorney General), the Nova Scotia Court of Appeal categorically held that the

Crown could not, in any tortious cause of action where it is a defendant, claim the benefit of s.

10 of Nova Scotia’s Fatal Injuries Act (prohibiting actions one year after a person’s death) but

avoid the burden of s. 3 of the Limitations of Actions Act (allowing the court to disallow the time

limit defence).

Sparling, supra.

Ontario v. Canada (Board of Transport Commissioners), [1968] S.C.R. 118at para. 12.

Neary v. Nova Scotia (Attorney General) (1994), 24 C.P.C. (3d) 265(N.S.S.C.); aff’d (1994), 30 C.P.C. (3d) 1 (N.S.C.A.) at para. 16.



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PART IV – ORDER REQUESTED

148. For the foregoing reasons, Access Copyright seeks a declaration that the Crown

is bound by the Act and, in particular, that the provinces and territories will be bound by any

tariff certified in these proceedings under Part VII of the Act.

ALL OF WHICH IS RESPECTFULLY SUBMITTED

August 30, 2011

NANCY K. BROOKS

RANDALL J. HOFLEY

PETER W. HOGG, Q.C.

Counsel for Access Copyright



SCHEDULE “A”

Cases

1. Law Society of Upper Canada v. Canada (Attorney General), 2008 CanLII 1666 (Ont.S.C.).

2. Nova Scotia Power Inc. v. The Queen, 2002 CanLII 906 (TCC).

3. Province of Bombay v. City of Bombay , [1947] A.C. 58 (P.C.).

4. Alberta Government Telephones v. Canadian Radio-Television and TelecommunicationsCommission, [1989] 2 S.C.R. 225.

5. Alberta v. Govert Buys and Whitecourt Transport Ltd., 1989 ABCA 104 (CanLII) (Alta.C.A.).

6. Her Majesty in Right of the Province of Alberta v. Canadian Transport Commission,

[1978] 1 S.C.R.

7. Apple Computer Inc. v. Mackintosh Computers, [1987] 1 F.C. 173 at 200 (T.D.).

8. Théberge v. Galerie d’Art du Petit Champlain Inc., 2002 SCC 34 (2002) 2 S.C.R. 40.

9. Authorson (Litigation Guardian of) v. Canada (Attorney General), 2003 CarswellOnt2773, 2003 SCC 39.

10. Byron Hills Resources Ltd. v. Alberta (Minister of Sustainable Resource Development),2009 CarswellAlta 989 (Alta. Q.B.).

11. Manitoba Fisheries Ltd. v. R. (1978), [1979] 1 S.C.R.

12. R. v. Ouellette, [1980] 1 S.C.R. 568.

13. Bropho v. Western Australia [1990] HCA 24; (1990) 171 C.L.R. 1.

14. Collège d’arts appliqués & de technologie La Cité collégiale v. Ottawa (City), (1994)CarswellOnt 624 (Ont. C.J.), aff’d by 1998 CarswellOnt 687 (Ont.C.A.).

15. 369413 Alberta Ltd. v. Pocklington, 1998 CarswellAlta 641 (Alta.Q.B.).

16. Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R.3.

17. R. v. Greening , 1992 CarswellOnt 57 (Ont. C.J.).

18. CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339.

19. Shareline Systems Inc. v. New Brunswick (2000), 11 C.P.C. (5th) 38 (N.B.Q.B.).

20. Shewan v. Canada (Attorney General) (1999), 87 C.P.R. (3d) 475 (Ont. S.C.).



2

21. Trainor Surveys (1974) Ltd. v. New Brunswick , [1990] 2 F.C. 168 (T.D.).

22. Hawley v. Canada (1990), 30 C.P.R. (3d) 534 (F.C.T.D.).

23. Kerr v. R. (1982), 66 C.P.R. (2d) 165 (F.C.T.D.).

24. von der Ohe v. Minister of National Revenue, 1971 CarswellNat 90, [1971] Tax A.B.C.589 (Can. Tax App. Bd.).

25. Ewert v. Canada (Attorney General), [2009] F.C.J. No. 1532.

26. Fry v. Canada (Solicitor General), [1996] F.C.J. 1267 (T.D.).

27. Eros-Équipe de recherche opérationelle en santé Inc. v. Conseillers en gestion &informatique C.G.I. Inc., 2004 FC 178.

28. Society of Composers, Authors & Music Publishers of Canada v. Canadian Associationof Internet Providers, [2004] 2 S.C.R. 427.

29. Schneider v. The Queen, [1982] 2 S.C.R. 112.

30. Operation Dismantle v. The Queen, [1985] 1 S.C.R. 441.

31. National Corn Growers Association v. Canada (Canadian Import Tribunal) [1990] 2S.C.R. 1324.

32. Harvard College v. Canada (Commissioner of Patents), [2002] 4 S.C.R. 45.

33. Tele-Direct (Publications) Inc. v. American Business Information Inc. (1997), 76 C.P.R.(3rd) 296 (F.C.A.).

34. Sparling v. Québec (Caisse de dépot & de placement du Québec), [1988] 2 S.C.R. 1015.

35. Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27.

36. Millar v. Taylor (1769), 4 Burr. 2303, 98 E.R. 201 (C.A.).

37. Ontario v. Canada (Board of Transport Commissioners), [1968] S.C.R. 118.

38. Agriculture Financial Services Corp. v. Redmond , 1999 CarswellAlta 487.

39. Toronto Transportation Commission v. R., [1949] S.C.R. 510.

40. Royal Bank v. Black & White Dev. Ltd., [1988] 60 Alta. L.R. (2d) 31 at p. 343 (Alta. C.A.).

41. Hongkong Bank of Canada v. Canada, [1989] 58 D.L.R. (4th) 385 (B.C.C.A.).

42. Royal Bank v. Samra, 2010 CarswellAlta 2201 (Alta. Master).

43. Neary v. Nova Scotia (Attorney General) (1994), 24 C.P.C. (3d) 265 (N.S.S.C.); aff’d(1994), 30 C.P.C. (3d) 1 (N.S.C.A.).



SCHEDULE “B”

Legislation

44. Interpretation Act , R.S.C., c. 1-21, c. 1-21, s. 2(1).

45. Interpretation Act , R.S.A. 2000, c. 1-8, s. 14.Interpretation Act , C.C.S.M. c. I80, s. 49.Interpretation Act , R.S.N.B. 1973, c. 1-13, s. 32 (am. 1982, c. 33, s. 9].Interpretation Act , R.S.N.L. 1990, c. 1-19, s. 12.Interpretation Act , R.S.N.S. 1989, c. 235, s. 14.Legislation Act , 2006, S.O. 2006, c. 21, Sch. F.Interpretation Act , R.S.Q., c. 1-16, s. 42.Interpretation Act , S.S. 1995, c. 1-11.2, s. 14.Interpretation Act , R.S.N.W.T. 1988, c. 1-8, s. 8.Interpretation Act , R.S.Y. 2002, c. 125, s. 13.Interpretation Act , R.S.P.E.I., 1998, c. 1-8, s. 14.

Interpretation Act , R.S.B.C., 1996, c. 238, s. 14.

46. Constitution Act , 1867, section 146.

47. Yukon Act , S.C. 2002, c. 7.Northwest Territories Act , R.S.C. 1985, c. N-27.Nunavut Act , S.C. 1993, c. 28.

48. Copyright Act , R.S.C., c. C-42.

49. National Archives of Canada Act , R.S. 1985, c. 1 (3rd. Supp.), s. 3.

50. Library and Archives Canada Act , S.C. 2004, c. 11, s. 4.

51. World Trade Organization Agreement Implementation Act, S.C. 1994, c. 47, s. 4.

52. North American Free Trade Agreement Implementation Act , S.C. 1993, c. 44, s. 5.

53. Government Accountability Act , R.S.A. 2000, c. G-7.The Financial Administration Act , 1993, S.S. 1993, c. F-13.4, s. 30.Financial Administration Act , C.C.S.M. c. F55, s. 44.Financial Administration Act , R.S.N.B. 1973, c. F-11, ss. 40, 41.Financial Administration Act , R.S.N.L. 1990, c. F-8, s. 30.Financial Administration Act , R.S.P.E.I. 1988, c. F-9, s. 40.Financial Administration Act , R.S.N.W.T. 1988, c. F-4, s. 44.

Policies

54. Treasury Board Secretariat Canada, Communications Policy of the Government of Canada, located at http://www.tbs-sct.gc.ca/pol/doc-eng.aspx?id=12316

55. Treasury Board Secretariat Canada, Communications Policy of the Government of Canada: Procedures, Procedures for Planning and Producing Publications for Sale,

http://www.tbs/

http://www.tbs/

http://www.tbs/



2

http://www.tbs-sct.gc.ca/pubs_pol/sipubs/comm/cpgcp-ppcgc04-eng.asp#_Toc137523382

Treaties

56. Vienna Convention on the Law of Treaties, art. 46. See Canada Treaty

Information, website: http://treaty-accord.gc.ca/details.asp?id=104068

57. TRIPS: Agreement on Trade-Related Aspects of Intellectual Property Rights; Annex 1Cof the Marrakesh Agreement Establishing the World Trade Organization, signed inMarrakesh, Morocco on 15 April 1994.

58. North American Free Trade Agreement , c. 1.

59. North American Free Trade Agreement , c. 17.

Texts

60. Hogg, and Monahan, Liability of the Crown (3rd ed., Carswell, 2000).

61. Sullivan, Sullivan on the Construction of Statutes (5th ed.).

62. Black’s Law Dictionary (8th ed., 2nd reprint, Thomson, 2007).

63. Hogg, Constitutional Law of Canada (5th ed., Carswell 2007).

64. McKeown, Fox on Canadian Law of Copyright and Industrial Design, (3rd ed., 2000).

65. Ian Brownlie, Principles of Public International Law (4th ed., 1990).

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OTTAWA-#40282437-V1-Crown Immunity Factum (Searchable PDF)

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