Date: 20061222
Docket: T-578-05
Citation: 2006 FC 1546
Ottawa, Ontario, December 22nd,
2006
PRESENT: The Honourable
Mr. Justice de Montigny
BETWEEN:
CANADIAN
PRIVATE COPYING COLLECTIVE
Plaintiff
and
Z.E.I. MEDIA PLUS INC.
and ZANIN CD/DVD INC.
and JOSEPH LEMME
Defendants
REASONS FOR JUDGMENT
AND JUDGMENT
[1]
This
is an appeal of Prothonotary Richard Morneau’s order of June 30, 2006, granting
a motion by the Canadian Private Copying Collective (the Collective) for a more
accurate and complete affidavit of documents. The Court also refused the
defendants’ request to bifurcate the proceedings for liability and quantum of
damages, and ordered that the case be specially managed.
[2]
This
motion was brought forward in the context of a statement of claim filed by the Collective,
requesting that the defendants pay private copying levies allegedly owed to the
rightsholders the Collective represents, and also requesting that the
defendants provide the Collective various and detailed statements of account.
[3]
After
having had the benefit of the parties’ oral and written submissions, and on the
basis of the records submitted to the Court, I have come to the conclusion that
the defendants’ appeal must be dismissed. None of the issues raised by the
defendants is vital to the final outcome of the case, and I do not believe the
prothonotary’s order was clearly wrong. The following are my reasons for coming
to that conclusion.
BACKGROUND
1) The Legislative
Scheme
[4]
The
origin, purpose and essential features of the private copying regime are well
documented and have been well delineated and summarized in previous cases, most
notably in Canadian Private Copying Collective v. Canadian
Storage Media Alliance, 2004 FCA 424, [2005] 2 F.C.R. 654; Canadian
Private Copying Collective (CPCC) v. Cano Tech Inc. (2006), 47
C.P.R. (4th) 350 (F.C.) and in Private Copying 2003-2004, [2003] C.B.D.
No. 8, a decision of the Copyright Board of Canada dated December 12, 2003. I
shall therefore examine the history and the legislative provisions setting out
this scheme only to the extent that it is relevant to the resolution of the
issues raised by this appeal. These provisions are reproduced in Annex 1 to
these reasons.
[5]
Until
1998, the unauthorized reproduction of sound recordings, even for private use, constituted
a copyright infringement. This prohibition became increasingly difficult to
enforce, however, with the advent of ever more user-friendly technology for
copying music. Part VIII of the Copyright Act, R.S.C. 1985, c. C-42 (the
Act), which came into force on March 19, 1998, reflects the compromise reached
to address this challenge. From then on, the act of reproducing all or any
substantial part of recorded music onto an audio recording medium for the copier’s private use
would not infringe the copyright in the musical work, the performer’s performance
or the sound recording [subsection 80(1) of the Act]. This is a limited
exception, as it does not apply if the copying is done for the purposes of
selling or renting, distributing, communicating to the public by
telecommunication, or performing in public [subsection 80(2)].
[6]
In
exchange for expropriating the copyright holders’ exclusive rights, Parliament
has provided that manufacturers and importers of blank audio recording media
will be liable to pay a levy on selling those media in Canada [subsection
82(1)]. The Copyright Board determines the rate of the levy through certifying
a Private Copying Tariff, after having considered the proposed tariffs
filed by collective societies representing authors and performers, and the objections
to these proposals (section 83). So far, the Board has certified four Tariffs,
some of which have been extended for more than a year. The product of that levy
will then be redistributed to eligible authors and performers, [subsection
81(1)], through the collecting body designated by the Copyright Board [sections
84 and subsection 83(8)].
[7]
Subsection
82(1) of the Copyright Act also compels manufacturers and importers of
blank audio recording media to keep statements of account of their activities. This
obligation is further complemented and detailed in sections 8 and 9 of the Private
Copying Tariffs, which impose reporting and record-keeping requirements. Section
8 prescribes that manufacturers and importers of blank audio recording media
must provide information with each payment to the collecting body, about the
corporation itself, as well as the number of units of each type of blank audio
recording medium on account of which the payment is made. Subsection 9(1) of
the Tariff requires importers and manufacturers to keep and preserve records for
six years, so the collecting body can readily ascertain the amounts payable and
the information required under the tariff. Pursuant to subsection 9(2), the
collecting body may audit these records any time on reasonable notice to the
manufacturer or importer. The text of these two provisions is also found in
Annex 2 of these reasons.
[8]
One
of the key concepts of this regime is obviously that of an “audio recording
medium”. Section 79 of the Act defines it as a “…recording medium, regardless
of its material form, onto which a sound recording may be reproduced and that
is of a kind ordinarily used by individual consumers for that purpose…” Equally
relevant is the statutory definition of “blank audio recording medium,” which
is defined as: (a) an audio recording medium onto which no sounds have ever
been fixed, and (b) any other prescribed audio recording medium.” I shall come
back to these definitions, as the defendants’ request for bifurcation is
largely predicated on how the definition is interpreted.
[9]
The
Act only lists two exceptions to the scheme in Part VIII. The first is found in
subsection 82(2), which says that Part VIII does not apply to blank audio
recording media exported from Canada. The second exemption from the levy is for
all blank audio recording media sold to persons with a perceptual disability [subsection
86(1)].
[10]
Finally,
section 88 of the Act outlines the collecting body’s possible remedies if a
manufacturer or importer defaults on its levy payments. It can recover levies
in court [subsection 88(1)], and a court can order a defaulting party to pay up
to five times the amount it owes to the collecting body [subsection 88(2)]. In
making such an order, the court must consider whether the defaulting party
acted in good or bad faith, the parties’ conduct before and during the
proceedings, and the need for deterrence [subsection 88(4)]. Moreover, the collecting
body can apply under subsection 88(3) for a court order instructing a
defaulting party to comply with any of its obligations under Part VIII.
2) The Parties
[11]
The
Collective is a non-profit corporation established under Part II of the Canada
Corporations Act, R.S.C. 1970, c. C-32. It is composed of collective
societies that hold private copying remuneration rights on behalf of
rightsholders. It has been mandated by its members to collect and distribute
private copying levies on their behalf, and the Copyright Board has designated it
as the collecting body, pursuant to subsection 83(8) of the Act. Section 84
requires the Collective to distribute the levies to the collective societies it
represents “as soon as practicable after receiving the levies paid to it”.
[12]
As
for the defendants, Z.E.I. Media Plus Inc. (Z.E.I.) is a Quebec wholesaler
and retailer of computer-related products like CD-Rs and CD-RWs. Zanin CD/DVD
Inc. (Zanin) is also a Quebec corporation. It provides duplication and
silk-screening services, and operates in the same premises as Z.E.I. Joseph
Lemme is the sole officer and director of Zanin, and president of Z.E.I. He is
also the sole director, officer and shareholder of Administration Sogelem Inc.,
which is the sole shareholder of Zanin and majority shareholder of Z.E.I.
3) Chronology
of the Dispute
[13]
The
dispute between the Collective and the defendants has been ongoing for many
years, as the record amply shows. In 2001, the Collective audited Z.E.I.’s
records and, as a result of the audit, claimed that Z.E.I. owed $18,848.20 in
levies. For reasons that have not been explained, this letter was never acted
upon and the invoice was never paid.
[14]
At
the Collective’s request, another audit was conducted in 2004. It appears the Collective’s
auditors were not provided with complete information concerning sales of relevant
media, and were denied documents requested like bank statements, cancelled
cheques, deposit books, general ledgers, trial balance and financial statements.
Based on the information available, the Collective’s auditors nevertheless
calculated Z.E.I.’s levy liability for the periods audited at $1,718,102.
[15]
Zanin,
on the other hand, has allegedly never reported its importations and sales of
blank audio recording media. The Collective claims Zanin has not remitted any
levies at all.
[16]
Throughout
these years, Z.E.I. and Zanin have always maintained that their products, which
they call “blank industrial media”, do not fall within the definition of “blank
audio recording medium”, and therefore Z.E.I. and Zanin’s importation and sale
of these media cannot be levied as such. I shall revert to this argument
shortly, but suffice it to say for the moment, that the defendants’ thesis is
essentially that most of the CDs they sell, because of their characteristics
and price, are not ordinarily used by individual consumers but are designed for
the industrial, commercial and institutional worlds.
[17]
After
protracted discussions and negotiations, the Collective filed a statement of
claim on March 31, 2005 against the defendants, for failing to report and pay
private copying levies. Alleging that the defendants unjustifiably failed to
comply with their reporting obligations under the Act, thus preventing the Collective
from establishing the true extent of their liability, the Collective is now
asking the Court to declare that the defendants have failed to report and pay
their private copying levies. It is asking the Court to order the defendants to
pay five times the amount owed in outstanding levies – the maximum amount
allowed under subsection 88(2) of the Act. It is also asking for unpaid
interest, pre-judgment and post-judgment interest, and costs throughout.
Finally, the Collective is asking for an order requiring the defendants to
produce detailed statements of account within thirty days of this decision.
[18]
The
defendants filed a statement of defence on April 27, 2005, but the Collective
objected to it because it contained privileged information from prior
settlement negotiations. After discussions between the parties and with the Collective’s
consent, the defendants filed an amended statement of defence on August 23,
2005.
[19]
The
Collective’s affidavit of documents was served November 18, 2005, with a
supplement served November 22, 2005. The defendants’ affidavit of documents was
served November 18, 2005.
[20]
On
January 25, 2006, the Collective filed a motion to compel service of a complete
and accurate affidavit of documents, pursuant to Rule 223 of the Federal
Courts Rules (the Rules). While not denying that the defendants will not be
subject to pay any levies if the CD-Rs are not considered blank audio recording
media, the Collective argued it could not determine the exact amount of the
defendants’ liability unless it could calculate the number of units of blank
audio recording media which have been imported and sold in Canada by each of
the defendants. For the Collective to be in a position to make that
calculation, it requested, more specifically:
a) all documents relevant to
the importation of blank audio recording media into Canada by each of the
Defendants, such as purchase orders, invoices, shipping documents, customs
documents, correspondence with customs brokers, payment journals, etc. from
December 1999 to the present or prior to December 1999 for blank audio
recording media sold in Canada in or after December 1999;
b) all documents relevant to
the purchase of blank audio recording media in Canada by each of the
Defendants, such as purchase orders, invoices, shipping documents, payments
journals, etc., from December 1999 to the present; and
c) documents relevant to the
sale of blank audio recording media in Canada by each of the Defendants, such
as invoices, purchase orders, shipping documents, inventory lists, sales
journals, etc., from December 1999 to the present.
[21]
Throughout
these proceedings, the defendants have maintained the CD-Rs they have imported
and sold - more specifically, the four brands that were revealed during the
2001 and 2004 audits - are industrial media not ordinarily used by individual
consumers for the purpose of reproducing sound recordings. They have further
maintained that a large portion of their sales of imported industrial media
qualify under the Collective’s zero-rating program. The Collective implemented
this program in response to the claim that private copying levies were unfair
for those not using media to copy music. The program waives the levies from
certain approved manufacturers and importers who sell blank audio recording
media to specific persons or organizations, such as broadcasters, law
enforcement agencies, courts and tribunals, and religious and educational
institutions. To benefit from this program, both purchasers and sellers of
blank audio recording media must have entered into a “Zero-Rating Agreement”
with the Collective.
THE IMPUGNED DECISION
[22]
On
June 30, 2006, Prothonotary Morneau allowed the Collective’s motion and ordered
the defendants to provide a better affidavit of documents. In doing so, the prothonotary
endorsed the specific requirements spelled out in the Collective’s motion with
respect to the documents to be disclosed, which I have reproduced at paragraph
20 of these reasons. He also refused the defendants’ bifurcation request under
rule 107 of the Rules, and ordered the case to be specially managed.
[23]
Prothonotary
Morneau rejected the defendants’ argument that disclosure would intrude too
heavily into their business affairs. Rather, since the Court was rejecting
their bifurcation request, the documents in question were “relevant” under rule
222(2) of the Rules and thus ought to be disclosed. He also rejected the defendants’
claim that Part VIII of the Act has created a regime requiring issues of
quantum and liability to be resolved in separate proceedings. The gist of his
argument on this issue is found at paragraph 28 of his reasons, where he wrote:
Deuxièmement, le texte même du
paragraphe 88(3) indique qu’il est permissive à l’égard de la Société vu
l’emploi de l’expression “peut” et ce même texte prévoit de plus que si la
Société fait appel de façon spécifique à ce paragraphe de la Loi, cet exercice
n’empêche pas tout autre recours possible de la part de la Société. Je ne vois
donc rien dans le texte de la Loi qui empêchait la Société de formuler sa
déclaration tel qu’elle l’a fait.
[24]
Then,
the prothonotary declined to exercise his discretion to order separate proceedings
under rule 107. He followed Illva Saronno S.p.A. v. Privilegiata
Fabbrica Maraschino “Excelsior”, [1999] 1 F.C. 146 [Illva Saronno],
concluding the defendants had not met their burden to prove separate
proceedings would “…result in the just, expeditious and least expensive of the
determination on its merits” (Illva Saronno, at paragraph 14).
[25]
Finally,
he noted that, unlike issues litigated in intellectual property cases, the
issues at stake in this case were so interrelated that the argument to sever
the proceedings on liability and quantum of damages was further weakened.
ISSUES
[26]
This
appeal raises three questions:
1) What
is the appropriate standard of review?
2) Should
Prothonotary Morneau’s decision regarding bifurcation be disturbed?
3) Should Prothonotary Morneau’s
ordering of a more complete and accurate affidavit of documents be disturbed?
ANALYSIS
1) Standard of Review
[27]
The
applicable standard of review for appeals of prothonotaries’ orders launched
pursuant to rule 51 of the Rules was set out by Justice Mark MacGuigan of the
Federal Court of Appeal, in Canada v. Aqua-Gem Investments
Ltd., [1993] 2 F.C. 425 at paragraphs 95-99 [Aqua-Gem]. It was further
clarified by Justice Robert Décary of the same Court in Merck & Co. v.
Apotex Inc. (2003), 30 C.P.R. (4th) 40 at paragraph 18. He reversed the
sequence of Justice MacGuigan’s propositions, but he also made it clear that
the emphasis must be on the subject of the orders, not on their effect. Justice
Décary therefore reformulated the test at paragraph 19, so that it now reads
like this:
Discretionary orders of prothonotaries
ought not be disturbed on appeal to a judge unless:
a) the questions raised in the motion are
vital to the final issue of the case, or
b) the orders are clearly wrong, in the
sense that the exercise of discretion by the prothonotary was based upon a
wrong principle or upon a misapprehension of the facts.
[28]
Justice
Décary went on to stress that the threshold to determine whether an issue is
“vital” is a high one. He relied on the minority reasons of Chief Justice
Julius Isaac in Aqua-Gem, above, who wrote that Parliament’s intention
in creating the office of prothonotary (i.e. to promote the efficient
performance of the work of the Court) would be frustrated if all their decisions
were to be reviewable by a judge. Justice Décary had this to say on this issue
at paragraphs 22 and 23:
The test of “vitality”, if I am allowed
this expression, which was developed in Aqua-Gem, is a stringent one. The
use of the word “vital” is significant.
[…]
One should not, therefore, come too
hastily to the conclusion that a question, however important it might be, is a
vital one. Yet one should remain alert that a vital question not be reviewed de
novo merely because of a natural propensity to defer to prothonotaries in
procedural matters.
[29]
Applying
this standard to Prothonotary Morneau’s decision, I am of the view that neither
of the two issues he decided could be characterized as “vital” to the final
disposition of the case. I have not understood counsel for the defendants
arguing otherwise. Nor could he have done so credibly.
[30]
Considering
first the argument that the proceeding should be bifurcated so as to deal
separately with the issues of liability and quantum, the defendants have not
been able to marshal a single decision in support of that proposition. It may
be that the decision to proceed with all the issues at once instead of dealing
with them seriatim will inconvenience one of the parties, or prove to be
ill-advised in terms of the most expeditious and least expensive determination
of the proceeding on its merits. But this is a far cry from saying that the
order raises a question that is vital to the final issue of the case,
especially bearing in mind that the emphasis must be on the subject of the
orders, not on their effect.
[31]
This
Court and the Federal Court of Appeal have consistently held that a
prothonotary’s decision about whether to bifurcate a proceeding is
discretionary in nature, and should not be disturbed unless it is clearly wrong.
As my colleague Justice Luc Martineau wrote in Merck & Co. v.
Brantford Chemicals Inc. (2004), 35 C.P.R.(4th) 4 at paragraph 2:
A discretionary order of a Prothonotary,
such as a decision regarding whether to bifurcate a proceeding, will not be disturbed
on appeal unless it is clearly wrong, in that it was based upon a wrong legal
principle or upon a palpable and overriding misapprehension of the facts. Absent
such an error, this Court should not interfere with the exercise of a Prothonotary’s
discretion, even where the presiding judge would have decided the matter
differently had he or she heard the matter in the first instance (Canada
v. Aqua-Gem Investments Ltd., [1993] 2 F.C. 425 (F.C.A.) at 463; Visx
Inc. v. Nidek Co. (1996), 72 C.P.R.(3d) 19 (F.C.A.) at 22, 23).
See
also: Fero Holdings Ltd. v. Blok Lok Ltd., 2003 FCT 353
(F.C.).
[32]
I
see no reason to depart from these decisions, particularly since the defendants
have not referred me to any case law recommending such an approach. Nor I have
been able to find any such cases in my own research. Thus, the only question to
ask is whether the prothonotary’s decision not to separate the proceedings was
“clearly wrong”.
[33]
I am
similarly of the view that the prothonotary’s decision to order a more complete
and accurate affidavit of documents is not vital to the final outcome of the
case. In its written submissions, the Collective referred to my earlier
decision in Contour Optik, Inc. v. Viva Canada Inc.
(2005), 45 C.P.R.(4th) 31 [Contour Optik], where I stated at paragraphs
27 and 28:
The Defendants have not contended that
further disclosure of documents can be considered as vital to the final
determination of the case, nor do I think it can be so ruled. However important
such an issue might be, it will be rare indeed that a procedural matter will
amount to a vital issue. As Justice Hugessen recently indicated in Ruman v.
The Queen, [2005] F.C.J. No. 614 (QL), 2005 FC 474, 138 A.C.W.S. (3d) 820,
at para. 7, “it will be a rare case when it can be shown that the denial of
further discovery or further documents will be vital to the final outcome”.
As a result, the Defendants cannot
succeed in their appeal unless they are able to demonstrate that the Management
Prothonotary was clearly wrong in restricting the contents of the further and
better affidavits of documents which the Plaintiffs were ordered to furnish.
[34]
As
mentioned before, what matters is the subject of the order, rather than
its effect. While the outcome of Prothonotary Morneau’s order was different
than in Contour Optik, above, allowing rather than refusing disclosure,
I believe the issue was the same. In both instances, the issue, properly
characterized, was the further disclosure of documents. Accordingly, I am
inclined to think that the rationale underlying that case applies with equal
force here.
[35]
This
argument is further reinforced by an argument of pure logic. If a refusal to
order a better affidavit of documents is not vital to the final determination
of a case, it would seem, a fortiori, that an order to provide a better
affidavit of documents cannot be considered vital to the final determination of
the case. After all, the presiding judge will always have the authority to
discard documents found to be irrelevant.
[36]
As a
result, I shall now turn to the prothonotary’s decisions to determine whether
they are clearly wrong, and not to decide whether I would have come to the same
conclusion. It must constantly be remembered that prothonotaries, if they are
to perform the most useful role they have been assigned by Parliament, must be
given some degree of flexibility in the use of their discretionary powers. So
long as they do not err in law or overlook important facts, their decisions
should stand.
2) Should the
Prothonotary’s Decision Regarding Bifurcation be Disturbed?
[37]
The
defendants claim that the issue of liability must be resolved before a
plaintiff can seek recovery of private copying levies. The record shows that
since the private copying regime has come into force, the defendants’ liability
for importing and selling media in Canada has been the subject of a serious
dispute between the parties - the defendants arguing that the CD-Rs targeted by
the audits are of an industrial nature and thus do not fall within the statutory
definition of “blank audio recording media”. Accordingly, they contend it was
an error to presume they were liable for a certain amount of private copying
levies, and that the Court’s order was premature as it addressed quantum before
resolving liability.
[38]
The
defendants contend that the framework of the Act supports their argument that
liability must be determined separately from damages. This is indeed their main
argument, the gist of which is captured in the following paragraphs of their
factum:
27. The Prothonotary rejected Defendants
representations regarding the framework of the Private Copying Regime stating,
at paragraph 28 of the Reasons for the Order, that the wording of subsection
88(3) of the Copyright Act on compliance orders is merely suggestive. The
Prothonotary, however, failed to properly take into consideration the balance
of section 88 on civil remedies under the Private Copying Regime as well as the
economy of the Private Copying Regime as a whole.
28. Subsection 88(1) of the Copyright Act
with respect to the collection of private copying levies states that Plaintiff
may, in default of payment of the levies due to it, recover them in a court of
a competent jurisdiction.
29. Accordingly, Plaintiff’s right to the
recovery of levies in court is based on the established fact that levies are
due. Pursuant to paragraph 82(1)(a) of the Copyright Act, private copying
levies are only due with respect to the importation into Canada and sale therein of blank audio recording media. Blank
audio recording media is a defined term at 79 of the Copyright Act. All rights
and obligations under the Private Copying Regime flow from the interpretation
and application of this defined term.
30. Insofar that the parties dispute the
application of the definition of blank audio recording media to the media
imported and sold by Defendants, it cannot be said that levies are in fact due
upon which Plaintiff can sue for their recovery following Defendant’s failure
to pay same. An action for recovery of private copying levies due is premature
insofar that there is an outstanding issue of liability.
[39]
I
agree with the defendants that subsection 88(1) of the Act is premised
on the notion that levies are due and ascertainable. Does that mean that if the
payment of levies is disputed by a defendant, the Collective’s only alternative
is to apply to a court of competent jurisdiction to compel the production of
documents, pursuant to subsection 88(3)? I do not think so.
[40]
First
of all, subsection 88(3) clearly leaves open the possibility for the Collective
to seek “any other remedy available”. I note in passing that subsection 88(1)
is similarly worded. As a result, the remedies provided by the Act cannot be
interpreted as being exhaustive and do not preclude the Collective from resorting
to other ways of enforcing the Act. This is precisely how the prothonotary
interpreted these provisions in his reasons, where he wrote:
28. Deuxièmement, le texte
même du paragraphe 88(3) indique qu’il est permissive à l’égard de la Société
vu l’emploi de l’expression « peut » et ce même texte prévoit de plus
que si la Société fait appel de façon spécifique à ce paragraphe de la Loi, cet
exercice n’empêche pas tout autre recours possible de la part de la Société. Je
ne vois donc rien dans le texte de la Loi qui empêchait la Société de formuler
sa déclaration tel qu’elle l’a fait.
29. Dans cet ordre d’idées, il
faut retenir également que la recherche de documents par la Société se base sur
les exigences de la règle 223 dans le cadre d’une action et non pas en fonction
du libellé et de la possibilité que prévoit le paragraphe 88(3) de la Loi.
[41]
Furthermore,
subsection 88(3) is clearly of a residuary nature. It can be resorted to “where
any obligation imposed by this Part is not complied with”. Accordingly, it
appears the Collective can rely on that provision to enforce both the
obligation to keep statements and report, pursuant to paragraph 88(1)(b) of the
Act, and the obligation to pay a levy on blank audio recording media pursuant
to paragraph 88(1)(a). There is certainly nothing in section 88, nor indeed in
the entire framework of Part VIII of the Act, that implicitly mandates a two-step
process.
[42]
If
it were otherwise, and if the defendants’ argument was to be taken to its
natural conclusion, all litigation for the recovery of levies would have to be
bifurcated. This is clearly an untenable proposition. Of course, the defendants
have tried to argue that theirs is a special case, even a kind of “test case”, because
no one has ever determined if the type of CD-Rs they sell are subject to the
private copying regime.
[43]
I am
far from convinced this argument makes much of a difference. If it does, it can
only be as a result of applying the proper test to determine if it is
appropriate to bifurcate the proceeding under rule 107 of the Rules, to which I
shall turn shortly. Moreover, it is far from obvious that the private copying
regime found in Part VIII of the Act can accommodate such a concept as
“industrial media”. While I realize that conflicting views about liability will
be debated later in front of the presiding judge, it is nevertheless worth
referring to what the Federal Court of Appeal had to say about the phrase
“ordinarily used” in the definition of “audio recording medium”.
[44]
In AVS
Technologies Inc. v. Canadian Mechanical Reproduction Rights Agency
(2000), 7 C.P.R. (4th) 68, the Court held that it is not a defence for
importers or manufacturers of blank audio recording media to allege that the
media they sell are not intended for private copying of music. “Ordinarily used”,
the Court said, must be defined by looking at how individual consumers used the
product, rather than looking at the use of the products generally. The fact
that only five per cent of a given type of medium is sold to individual
consumers does not mean that it does not qualify for levies. It may well be
that all those media, including the 95 per cent sold to non-consumers, will be
subject to the levy as long as a non-marginal number of consumers use the
products for private copying in a fashion that is not marginal. Of course, this
does not preclude the Board from reducing the rate of the levy to take into
account to whom they are sold, as it did in that case.
[45]
It
is also worth considering another decision of the Federal Court of Appeal,
reported as Canadian Private Copying Collective v. Canadian
Storage Media Alliance, 2004 FCA 424,
[2005] 2
F.C. 654. Sitting on judicial review of a decision by the Copyright Board which
established the private copying levies for 2003 and 2004, the Court concluded
the Board was right not to take the zero-rating program into account in setting
the levies. The Court wrote, at paragraph 125:
In my view, the Board did not commit any
reviewable error when it held that the zero-rating program is not authorized
under the Act and “illegal” in that limited sense, and that it would no longer
compensate the CPCC for the impact of the program on its revenues because that
would, in effect, provide for an exemption from the scheme, contrary to
Parliament’s intention.
[46]
These
two cases make it clear that the only exemptions from the private copying
regime are those found explicitly in the Act. Adding to the exemptions is
Parliament’s role. At the very least, this undermines the defendants’ argument
that it is premature to address the quantum issue because they are likely not
liable to pay levies on the type of audio recording media they sell.
[47]
In
any event, I have not been convinced for all the reasons outlined above that
the structure of the private copying regime is premised on the assumption that
the defendants’ liability must be assessed prior to determining the amount owed
in unpaid levies. On November 16, 2006, the defendants filed submissions from
the Collective’s counsel as authority for their claim that Part VIII of the Act
itself mandates separate proceedings for liability and quantum. The letter in
question was written by the Collective’s counsel, David Collier, asking the
Copyright Board to direct that individual manufacturers and importers of blank
audio recording media comply with their obligations under the private copying
regime.
[48]
To
argue that Mr. Collier’s letter can support an argument in favour of a separate
regime for liability and quantum is to take the letter completely out of
context. Mr. Collier was merely trying to use section 66 of the Act to convince
the Board it could enforce its Tariff, and that it would be more convenient and
less burdensome than having to apply to the courts. That had nothing to do with
the issue of bifurcation. In any event, even if Mr. Collier’s submissions to
the Board could be interpreted as support for the defendants’ position, it
would certainly not be binding on this Court.
[49]
The
defendants’ subsidiary argument is that the prothonotary erred in his
application of rule 107 of the Rules. They claim that the prothonotary wrongly
focused on the timeliness of their argument, and that it will greatly reduce
the volume of discovery and disclosure of confidential information if the Court
first concludes they are only liable for a portion of the sales of imported
recording media. An examination of the brands sold and of their characteristics
is all that would be required to determine if they are liable, so the
defendants argue, whereas the second issue of quantum would require “a tedious
accounting exercise of sorting through thousands upon thousands of sale
transactions”.
[50]
First
of all, I do not think the prothonotary’s decision rests solely or even mainly
on the issue of delay. While he did observe that the defendants could have
raised the possibility to bifurcate the proceeding earlier, as it puts into
question the very basis of the Collective’s statement of claim, he also applied
the appropriate considerations in ruling upon this request.
[51]
Moreover,
the defendants’ submission that the two issues of liability and quantum can be
neatly distinguished is premised on their previous argument that certain types
of audio recording media are not covered by the private copying regime. I have
already indicated my reservations about this theory.
[52]
Rule
107 of the Rules states the following:
(1) Separate determination of issues –
The Court may, at any time, order the trial of an issue or that issues in a
proceeding be determined separately.
(2) Court may stipulate procedure – In an
order under subsection (1), the Court may give directions regarding the
procedures to be followed, including those applicable to examinations for
discovery and the discovery of documents.
[53]
Prothonotary
Morneau correctly applied the test set out in Illva Saronno, above,
when he ruled that the defendants had failed to satisfy the Court on a balance
of probabilities that bifurcation was not warranted in the present case. He
wrote, more specifically:
[40] En l’espèce, je suis
d’avis que les défenderesses ne se sont pas acquittées de l’obligation qui leur
revenait d’établir selon la prépondérance de preuve que la possibilité
d’effectuer des économies de temps et d’argent et d’apporter une solution juste
à un litige qui tarde à se parfaire est telle qu’est justifiée une dérogation
au principe général qui a prévalu jusqu’ici et qui est à l’effet que toutes les
questions qui se posent dans une instance, ici on parle des questions
d’assujettissement et de quantum, soient examinées ensemble.
[54]
Before
coming to this conclusion, Prothonotary Morneau aptly quoted from Illva Saronno,
above, where Justice John Evans wrote:
[14] Accordingly, on the basis of
previous authority and in light of the changes introduced by the 1998 Rules, I
would formulate the test to be applied under rule 107 as follows. On a motion
under rule 107, the Court may order the postponement of discovery and the
determination of remedial issues until after discovery and trial of the
question of liability, if the Court is satisfied on the balance of
probabilities that in the light of the evidence and all the circumstances of
the case (including the nature of the claim, the conduct of the litigation, the
issues and the remedies sought), severance is more likely than not to result in
the just, expeditious and least expensive determination of the proceeding on
its merits. [Emphasis added]
[55]
As
the prothonotary wrote, severance could possibly lead to even further delays in
this case, with all the attendant consequences for the rightsholders. Furthermore,
this is not the sort of case in which a court could easily separate the issues
of quantum and liability; as the prothonotary wrote, they are intimately
interrelated. As for the documents sought by the Collective, they will very
likely allow both issues of liability and of quantum to be determined. To
conclude as much was certainly within the prothonotary’s discretion – and I do
not believe the way he exercised that discretion was clearly wrong.
3) Should the
Prothonotary’s Order for a More Complete and Accurate Affidavit of Documents be
Disturbed?
[56]
The
defendants submit that many of the documents subject to Prothonotary Morneau’s order
are irrelevant for the purposes of determining the amount of levies owed to the
Collective. They claim that pursuant to section 7 of the Tariffs, the obligation
to pay a levy is only triggered at the point of sale. Accordingly, the only
documents relevant within the meaning of rule 222(2) of the Rules are the
defendants’ sales reports, and possibly their invoices concerning their sale in
Canada of blank audio
recording media they imported. The other types of documents listed in the order,
such as purchase orders, journals, shipping documents and correspondence are
allegedly “peripheral” and, in certain cases, irrelevant, as they would not
establish a sale took place.
[57]
Similarly,
the defendants contend that documents concerning their purchase in Canada of
blank audio recording media [item (b) of the order] are irrelevant, not only
because no levy is due until a sale takes place, but also because defendants’
purchases in Canada are irrelevant as no levy is payable on such media that was
not imported by defendants. As for their importation of blank audio recording
media in Canada [item (a) of the order], the defendants argue that they are not
relevant either as such media must first be sold, and be sold as blank audio
recording media before a levy becomes payable.
[58]
Finally,
the defendants submit they cannot confirm the documents listed in the Court’s
order exist until they go through all their records if ordered to do so. They
claim it was an error to assume all the documents in the order exist. They also
insist that 21 days is not enough time to comply with such an onerous
disclosure order. They argue they need at least 120 days to comply with the
terms of the order if it is upheld on this appeal.
[59]
None
of these arguments convince me that the prothonotary’s decision was clearly
wrong. Rule 222(2) says that a document is relevant “if the party intends to
rely on it or if the document tends to adversely affect the party’s case or to
support another party’s case”. The case law is quite clear that disclosure of
documents is a matter of relevance, not of discretion (see Cooper Industries
Inc. v. Caplan Industries Inc. (1998), 80 C.P.R. (3d) 237 at page
240; Havana House Cigar & Tobacco Merchants Ltd. v. Naeini
(1998), 80 C.P.R. (3d) 132 at pages 141-142 (F.C.), aff’d (1998), 80 C.P.R. (3d)
563).
[60]
In
contrast, the defendants’ submissions seem to imply that what matters is
necessity. Their submissions are founded on the argument that if a document is
not essential for the Collective to prove its case, they are under no
obligation to disclose it. This is simply not the test.
[61]
Nor
can the defendants be left to decide what they will provide in light of their
own interpretation of what is leviable (see Symtron Systems, Inc. v.
I.C.S. International Code Fire Services Inc., 2001 FCT 1226). It is a
judge’s role to determine their liability on its merits, and that determination
cannot be made without a complete informational picture.
[62]
I
agree with the Collective that the documents relating to the purchase in Canada of blank audio
recording media [item (b) in the prothonotary’s order] are relevant to the
issue of whether sales of blank audio recording media are covered by the
Tariffs. Without these documents it will be impossible for the Collective, and
eventually the Court, to verify whether sales of blank audio recording media
which do not have corresponding importation documents were purchased locally.
[63]
The
same can be said of the documents relating to the importation of blank audio
recording media in Canada [item (a) of the
prothonotary’s order]. If these documents are not produced, it will be
impossible to verify whether these media have truly been imported as opposed to
having been bought from a Canadian manufacturer. These documents may very well
tend to adversely affect the Collective’s case instead of hurting the
defendants’. However, the idea behind rule 222 is that all the relevant
information must be on the table so that the parties can best argue their case
and the judge can best assess the respective merits of their arguments.
[64]
In
the same vein, all the documents listed in items (a), (b) and (c) of the prothonotary’s
order (purchase orders, invoices, shipping documents, customs documents,
payment journals, purchase orders, inventory lists, etc…) are also relevant to
provide a full picture and to assess some of the defendants’ submissions. Sales
invoices, in and of themselves, may not be sufficient to determine, for
example, whether the sales were made to zero-rating purchasers, whether the
blank audio recording media were intended for copying music, and whether the
CDs were recordable.
[65]
The Collective
is also correct in arguing that the exchange of correspondence and other documents
may be relevant to establish Mr. Lemme’s personal liability. The production of
these documents may assist the Collective in conducting its discovery and,
ultimately, in establishing its case.
[66]
As
for the arguments that some of the documents to be listed may not even exist,
and that it would be a massive exercise for the defendants to go through all
their records, I cannot but find that these claims are totally preposterous and
disingenuous. Obviously, the affidavit of documents does not have to enumerate
documents that have never existed. It bears repeating, however, that the
defendants have an obligation to keep record of their purchases and sales of
blank audio recording media pursuant to section 9 of the Tariffs. As a matter
of fact, it appears from the affidavit of Michelle Roy McSpurren, a Senior
Collection and Enforcement Officer of the Collective, that the Collective has
obtained copies of dozens of invoices issued by the defendant companies from
customers of the defendant companies. These invoices bear the mention “customer
copy”. It can therefore reasonably be inferred that the defendants have
retained their own copies of these invoices.
[67]
It
is therefore reasonable to conclude that many of the documents omitted from the
defendants’ affidavit of documents exist and are in the defendants’ possession,
power or control. As for the further delay requested by the defendants, I find
that it is purely dilatory. The statement of claim was issued more than 18
months ago, and discovery has yet to begin. The defendants have had ample time
to prepare a complete affidavit of documents.
[68]
For
all of the foregoing reasons, I have come to the conclusion that the prothonotary’s
decision does not rest upon a wrong principle or upon a misapprehension of the
facts. As a result, the defendants’ motion to appeal his order dated June 30,
2006 must be dismissed, with costs payable at all levels.
JUDGMENT
THIS COURT ORDERS that the prothonotary’s
decision does not rest upon a wrong principle or upon a misapprehension of the
facts. As a result, the defendants’ motion to appeal his order dated June 30,
2006 must be dismissed, with costs payable at all levels.
"Yves de
Montigny"
ANNEX 1: Private Copying Provisions
|
79. In this
Part,
“audio
recording medium” means a recording medium, regardless of its material form,
onto which a sound recording may be reproduced and that is of a kind
ordinarily used by individual consumers for that purpose, excluding any
prescribed kind of recording medium;
“blank audio
recording medium” means
(a)
an audio recording medium onto which no sounds have ever been fixed, and
(b)
any other prescribed audio recording medium;
“collecting
body” means the collective society, or other society, association or
corporation, that is designated as the collecting body under subsection
83(8);
“eligible
author” means an author of a musical work, whether created before or after
the coming into force of this Part, that is embodied in a sound recording,
whether made before or after the coming into force of this Part, if copyright
subsists in Canada in that musical work;
“eligible
maker” means a maker of a sound recording that embodies a musical work,
whether the first fixation of the sound recording occurred before or after
the coming into force of this Part, if
(a)
both the following two conditions are met:
(i)
the maker, at the date of that first fixation, if a corporation, had its
headquarters in Canada or, if a natural person, was a Canadian citizen or
permanent resident within the meaning of subsection 2(1) of the Immigration
and Refugee Protection Act, and
(ii)
copyright subsists in Canada in the sound recording, or
(b)
the maker, at the date of that first fixation, if a corporation, had its
headquarters in a country referred to in a statement published under section
85 or, if a natural person, was a citizen, subject or permanent resident of
such a country;
“eligible
performer” means the performer of a performer’s performance of a musical
work, whether it took place before or after the coming into force of this
Part, if the performer’s performance is embodied in a sound recording and
(a)
both the following two conditions are met:
(i)
the performer was, at the date of the first fixation of the sound recording,
a Canadian citizen or permanent resident within the meaning of subsection
2(1) of the Immigration and Refugee Protection Act, and
(ii)
copyright subsists in Canada in the performer’s performance, or
(b)
the performer was, at the date of the first fixation of the sound recording,
a citizen, subject or permanent resident of a country referred to in a
statement published under section 85;
“prescribed”
means prescribed by regulations made under this Part.
Copying for
Private Use
80. (1)
Subject to subsection (2), the act of reproducing all or any substantial part
of
(a)
a musical work embodied in a sound recording,
(b)
a performer’s performance of a musical work embodied in a sound recording, or
(c)
a sound recording in which a musical work, or a performer’s performance of a
musical work, is embodied
onto an audio
recording medium for the private use of the person who makes the copy does
not constitute an infringement of the copyright in the musical work, the
performer’s performance or the sound recording.
(2) Subsection
(1) does not apply if the act described in that subsection is done for the
purpose of doing any of the following in relation to any of the things
referred to in paragraphs (1)(a) to (c):
(a)
selling or renting out, or by way of trade exposing or offering for sale or
rental;
(b)
distributing, whether or not for the purpose of trade;
(c)
communicating to the public by telecommunication; or
(d)
performing, or causing to be performed, in public.
Right of
Remuneration
81. (1)
Subject to and in accordance with this Part, eligible authors, eligible
performers and eligible makers have a right to receive remuneration from
manufacturers and importers of blank audio recording media in respect of the
reproduction for private use of
(a)
a musical work embodied in a sound recording;
(b)
a performer’s performance of a musical work embodied in a sound recording; or
(c)
a sound recording in which a musical work, or a performer’s performance of a
musical work, is embodied.
(2)
Subsections 13(4) to (7) apply, with such modifications as the circumstances
require, in respect of the rights conferred by subsection (1) on eligible
authors, performers and makers.
Levy on
Blank Audio Recording Media
82. (1) Every
person who, for the purpose of trade, manufactures a blank audio recording
medium in Canada or imports a blank audio recording medium into Canada
(a)
is liable, subject to subsection (2) and section 86, to pay a levy to the
collecting body on selling or otherwise disposing of those blank audio
recording media in Canada; and
(b)
shall, in accordance with subsection 83(8), keep statements of account of the
activities referred to in paragraph (a), as well as of exports of those blank
audio recording media, and shall furnish those statements to the collecting
body.
(2) No levy is
payable where it is a term of the sale or other disposition of the blank
audio recording medium that the medium is to be exported from Canada, and it is exported from Canada.
83. (1)
Subject to subsection (14), each collective society may file with the Board a
proposed tariff for the benefit of those eligible authors, eligible
performers and eligible makers who, by assignment, grant of licence,
appointment of the society as their agent or otherwise, authorize it to act
on their behalf for that purpose, but no person other than a collective
society may file any such tariff.
(2) Without
limiting the generality of what may be included in a proposed tariff, the
tariff may include a suggestion as to whom the Board should designate under
paragraph (8)(d) as the collecting body.
(3) Proposed
tariffs must be in both official languages and must be filed on or before the
March 31 immediately before the date when the approved tariffs cease to be
effective.
(4) A
collective society in respect of which no proposed tariff has been certified
pursuant to paragraph (8)(c) shall file its proposed tariff on or before the
March 31 immediately before its proposed effective date.
(5) A proposed
tariff must provide that the levies are to be effective for periods of one or
more calendar years.
(6) As soon as
practicable after the receipt of a proposed tariff filed pursuant to
subsection (1), the Board shall publish it in the Canada Gazette and shall
give notice that, within sixty days after the publication of the tariff, any
person may file written objections to the tariff with the Board.
(7) The Board
shall, as soon as practicable, consider a proposed tariff and any objections
thereto referred to in subsection (6) or raised by the Board, and
(a)
send to the collective society concerned a copy of the objections so as to
permit it to reply; and
(b)
send to the persons who filed the objections a copy of any reply thereto.
(8) On the
conclusion of its consideration of the proposed tariff, the Board shall
(a)
establish, in accordance with subsection (9),
(i)
the manner of determining the levies, and
(ii)
such terms and conditions related to those levies as the Board considers
appropriate, including, without limiting the generality of the foregoing, the
form, content and frequency of the statements of account mentioned in
subsection 82(1), measures for the protection of confidential information
contained in those statements, and the times at which the levies are payable,
(b)
vary the tariff accordingly,
(c)
certify the tariff as the approved tariff, whereupon that tariff becomes for
the purposes of this Part the approved tariff, and
(d)
designate as the collecting body the collective society or other society,
association or corporation that, in the Board’s opinion, will best fulfil the
objects of sections 82, 84 and 86,
but the Board
is not obligated to exercise its power under paragraph (d) if it has
previously done so, and a designation under that paragraph remains in effect
until the Board makes another designation, which it may do at any time
whatsoever, on application.
(9) In
exercising its power under paragraph (8)(a), the Board shall satisfy itself
that the levies are fair and equitable, having regard to any prescribed
criteria.
(10) The Board
shall publish the approved tariffs in the Canada Gazette as soon as
practicable and shall send a copy of each approved tariff, together with the
reasons for the Board’s decision, to the collecting body, to each collective
society that filed a proposed tariff, and to any person who filed an
objection.
(11) An
eligible author, eligible performer or eligible maker who does not authorize
a collective society to file a proposed tariff under subsection (1) is
entitled, in relation to
(a)
a musical work,
(b)
a performer’s performance of a musical work, or
(c)
a sound recording in which a musical work, or a performer’s performance of a
musical work, is embodied,
as the case
may be, to be paid by the collective society that is designated by the Board,
of the Board’s own motion or on application, the remuneration referred to in
section 81 if such remuneration is payable during a period when an approved
tariff that is applicable to that kind of work, performer’s performance or sound
recording is effective, subject to the same conditions as those to which a
person who has so authorized that collective society is subject.
(12) The
entitlement referred to in subsection (11) is the only remedy of the eligible
author, eligible performer or eligible maker referred to in that subsection
in respect of the reproducing of sound recordings for private use.
(13) The Board
may, for the purposes of subsections (11) and (12),
(a)
require a collective society to file with the Board information relating to
payments of moneys received by the society pursuant to section 84 to the
persons who have authorized it to file a tariff under subsection (1); and
(b)
by regulation, establish the periods, which shall not be less than twelve
months, beginning when the applicable approved tariff ceases to be effective,
within which the entitlement referred to in subsection (11) must be
exercised.
(14) Where all
the collective societies that intend to file a proposed tariff authorize a
particular person or body to file a single proposed tariff on their behalf,
that person or body may do so, and in that case this section applies, with
such modifications as the circumstances require, in respect of that proposed
tariff.
Distribution
of Levies Paid
84. As soon as
practicable after receiving the levies paid to it, the collecting body shall
distribute the levies to the collective societies representing eligible
authors, eligible performers and eligible makers, in the proportions fixed by
the Board.
85. (1) Where
the Minister is of the opinion that another country grants or has undertaken
to grant to performers and makers of sound recordings that are Canadian
citizens or permanent residents within the meaning of subsection 2(1) of the
Immigration and Refugee Protection Act or, if corporations, have their
headquarters in Canada, as the case may be, whether by treaty, convention,
agreement or law, benefits substantially equivalent to those conferred by
this Part, the Minister may, by a statement published in the Canada Gazette,
(a)
grant the benefits conferred by this Part to performers or makers of sound
recordings that are citizens, subjects or permanent residents of or, if
corporations, have their headquarters in that country; and
(b)
declare that that country shall, as regards those benefits, be treated as if
it were a country to which this Part extends.
(2) Where the
Minister is of the opinion that another country neither grants nor has
undertaken to grant to performers or makers of sound recordings that are Canadian
citizens or permanent residents within the meaning of subsection 2(1) of the
Immigration and Refugee Protection Act or, if corporations, have their
headquarters in Canada, as the case may be, whether by treaty, convention,
agreement or law, benefits substantially equivalent to those conferred by
this Part, the Minister may, by a statement published in the Canada Gazette,
(a)
grant the benefits conferred by this Part to performers or makers of sound
recordings that are citizens, subjects or permanent residents of or, if
corporations, have their headquarters in that country, as the case may be, to
the extent that that country grants those benefits to performers or makers of
sound recordings that are Canadian citizens or permanent residents within the
meaning of subsection 2(1) of the Immigration and Refugee Protection Act or,
if corporations, have their headquarters in Canada; and
(b)
declare that that country shall, as regards those benefits, be treated as if
it were a country to which this Part extends.
(3) Any
provision of this Act that the Minister specifies in a statement referred to
in subsection (1) or (2)
(a)
applies in respect of performers or makers of sound recordings covered by
that statement, as if they were citizens of or, if corporations, had their
headquarters in Canada; and
(b)
applies in respect of a country covered by that statement, as if that country
were Canada.
(4) Subject to
any exceptions that the Minister may specify in a statement referred to in
subsection (1) or (2), the other provisions of this Act also apply in the way
described in subsection (3).
Exemption
from Levy
86. (1) No
levy is payable under this Part where the manufacturer or importer of a blank
audio recording medium sells or otherwise disposes of it to a society,
association or corporation that represents persons with a perceptual
disability.
(2) Where a
society, association or corporation referred to in subsection (1)
(a)
purchases a blank audio recording medium in Canada
from a person other than the manufacturer or importer, and
(b)
provides the collecting body with proof of that purchase, on or before June
30 in the calendar year following the calendar year in which the purchase was
made,
the collecting
body is liable to pay forthwith to the society, association or corporation an
amount equal to the amount of the levy paid in respect of the blank audio
recording medium purchased.
(3) If
regulations made under paragraph 87(a) provide for the registration of
societies, associations or corporations that represent persons with a
perceptual disability, subsections (1) and (2) shall be read as referring to
societies, associations or corporations that are so registered.
87. The
Governor in Council may make regulations
(a)
respecting the exemptions and refunds provided for in section 86, including,
without limiting the generality of the foregoing,
(i)
regulations respecting procedures governing those exemptions and refunds,
(ii)
regulations respecting applications for those exemptions and refunds, and
(iii)
regulations for the registration of societies, associations or corporations
that represent persons with a perceptual disability;
(b)
prescribing anything that by this Part is to be prescribed; and
(c)
generally for carrying out the purposes and provisions of this Part.
Civil
Remedies
88. (1)
Without prejudice to any other remedies available to it, the collecting body
may, for the period specified in an approved tariff, collect the levies due
to it under the tariff and, in default of their payment, recover them in a
court of competent jurisdiction.
(2) The court
may order a person who fails to pay any levy due under this Part to pay an
amount not exceeding five times the amount of the levy to the collecting
body. The collecting body must distribute the payment in the manner set out
in section 84.
(3) Where any
obligation imposed by this Part is not complied with, the collecting body
may, in addition to any other remedy available, apply to a court of competent
jurisdiction for an order directing compliance with that obligation.
(4) Before
making an order under subsection (2), the court must take into account
(a)
whether the person who failed to pay the levy acted in good faith or bad
faith;
(b)
the conduct of the parties before and during the proceedings; and
(c)
the need to deter persons from failing to pay levies.
|
79.
Les définitions qui suivent s’appliquent à la présente partie.
«
artiste-interprète admissible » Artiste-interprète dont la prestation d’une
oeuvre musicale, qu’elle ait eu lieu avant ou après l’entrée en vigueur de la
présente partie :
a) soit est protégée par le droit
d’auteur au Canada et a été fixée pour la première fois au moyen d’un
enregistrement sonore alors que l’artiste-interprète était un citoyen
canadien ou un résident permanent au sens du paragraphe 2(1) de la Loi sur
l’immigration et la protection des réfugiés;
b) soit a été fixée pour la première
fois au moyen d’un enregistrement sonore alors que l’artiste-interprète était
sujet, citoyen ou résident permanent d’un pays visé par la déclaration
publiée en vertu de l’article 85.
«
auteur admissible » Auteur d’une oeuvre musicale fixée au moyen d’un
enregistrement sonore et protégée par le droit d’auteur au Canada, que
l’oeuvre ou l’enregistrement sonore ait été respectivement créée ou
confectionné avant ou après l’entrée en vigueur de la présente partie.
«
organisme de perception » Société de gestion ou autre société, association ou
personne morale désignée aux termes du paragraphe 83(8).
«
producteur admissible » Le producteur de l’enregistrement sonore d’une oeuvre
musicale, que la première fixation ait eu lieu avant ou après l’entrée en
vigueur de la présente partie :
a) soit si l’enregistrement sonore est
protégé par le droit d’auteur au Canada et qu’à la date de la première
fixation, le producteur était un citoyen canadien ou un résident permanent au
sens du paragraphe 2(1) de la Loi sur l’immigration et la protection des
réfugiés ou, s’il s’agit d’une personne morale, avait son siège social au
Canada;
b) soit si le producteur était, à la
date de la première fixation, sujet, citoyen ou résident permanent d’un pays
visé dans la déclaration publiée en vertu de l’article 85 ou, s’il s’agit
d’une personne morale, avait son siège social dans un tel pays.
«
support audio » Tout support audio habituellement utilisé par les
consommateurs pour reproduire des enregistrements sonores, à l’exception
toutefois de ceux exclus par règlement.
«
support audio vierge » Tout support audio sur lequel aucun son n’a encore été
fixé et tout autre support audio précisé par règlement.
Copie
pour usage privé
80.
(1) Sous réserve du paragraphe (2), ne constitue pas une violation du droit
d’auteur protégeant tant l’enregistrement sonore que l’oeuvre musicale ou la prestation
d’une oeuvre musicale qui le constituent, le fait de reproduire pour usage
privé l’intégralité ou toute partie importante de cet enregistrement sonore,
de cette oeuvre ou de cette prestation sur un support audio.
(2)
Le paragraphe (1) ne s’applique pas à la reproduction de l’intégralité ou de
toute partie importante d’un enregistrement sonore, ou de l’oeuvre musicale
ou de la prestation d’une oeuvre musicale qui le constituent, sur un support
audio pour les usages suivants :
a) vente ou location, ou exposition
commerciale;
b) distribution dans un but commercial
ou non;
c) communication au public par
télécommunication;
d) exécution ou représentation en
public.
Droit
à rémunération
81.
(1) Conformément à la présente partie et sous réserve de ses autres
dispositions, les auteurs, artistes-interprètes et producteurs admissibles
ont droit, pour la copie à usage privé d’enregistrements sonores ou d’oeuvres
musicales ou de prestations d’oeuvres musicales qui les constituent, à une
rémunération versée par le fabricant ou l’importateur de supports audio
vierges.
(2)
Les paragraphes 13(4) à (7) s’appliquent, avec les adaptations nécessaires,
au droit conféré par le paragraphe (1) à l’auteur, à l’artiste-interprète et
au producteur admissibles.
Redevances
82.
(1) Quiconque fabrique au Canada ou y importe des supports audio vierges à
des fins commerciales est tenu :
a) sous réserve du paragraphe (2) et de
l’article 86, de payer à l’organisme de perception une redevance sur la vente
ou toute autre forme d’aliénation de ces supports au Canada;
b) d’établir, conformément au
paragraphe 83(8), des états de compte relatifs aux activités visées à
l’alinéa a) et aux activités d’exportation de ces supports, et de les
communiquer à l’organisme de perception.
(2)
Aucune redevance n’est toutefois payable sur les supports audio vierges
lorsque leur exportation est une condition de vente ou autre forme
d’aliénation et qu’ils sont effectivement exportés.
83.
(1) Sous réserve du paragraphe (14), seules les sociétés de gestion agissant
au nom des auteurs, artistes-interprètes et producteurs admissibles qui les
ont habilitées à cette fin par voie de cession, licence, mandat ou autrement
peuvent déposer auprès de la Commission un projet de tarif des redevances à
percevoir.
(2)
Le projet de tarif peut notamment proposer un organisme de perception en vue
de la désignation prévue à l’alinéa (8)d).
(3)
Il est à déposer, dans les deux langues officielles, au plus tard le 31 mars
précédant la cessation d’effet du tarif homologué.
(4)
Lorsqu’elle n’est pas régie par un tarif homologué au titre de l’alinéa
(8)c), la société de gestion doit déposer son projet de tarif auprès de la
Commission au plus tard le 31 mars précédant la date prévue pour sa prise
d’effet.
(5)
Le projet de tarif prévoit des périodes d’effet d’une ou de plusieurs années
civiles.
(6)
Dès que possible, la Commission le fait publier dans la Gazette du Canada et
donne un avis indiquant que quiconque peut y faire opposition en déposant
auprès d’elle une déclaration en ce sens dans les soixante jours suivant la
publication.
(7)
Elle procède dans les meilleurs délais à l’examen du projet de tarif et, le
cas échéant, des oppositions; elle peut également faire opposition au projet.
Elle communique à la société de gestion en cause copie des oppositions et aux
opposants les réponses éventuelles de celle-ci.
(8)
Au terme de son examen, la Commission :
a) établit conformément au paragraphe
(9) :
(i) la formule tarifaire qui permet de
déterminer les redevances,
(ii) à son appréciation, les modalités
afférentes à celles-ci, notamment en ce qui concerne leurs dates de
versement, la forme, la teneur et la fréquence des états de compte visés au
paragraphe 82(1) et les mesures de protection des renseignements
confidentiels qui y figurent;
b) modifie le projet de tarif en
conséquence;
c) le certifie, celui-ci devenant dès
lors le tarif homologué pour la société de gestion en cause;
d) désigne, à titre d’organisme de
perception, la société de gestion ou autre société, association ou personne
morale la mieux en mesure, à son avis, de s’acquitter des responsabilités ou
fonctions découlant des articles 82, 84 et 86.
La
Commission n’est pas tenue de faire une désignation en vertu de l’alinéa d)
si une telle désignation a déjà été faite. Celle-ci demeure en vigueur
jusqu’à ce que la Commission procède à une nouvelle désignation, ce qu’elle
peut faire sur demande en tout temps.
(9)
Pour l’exercice de l’attribution prévue à l’alinéa (8)a), la Commission doit
s’assurer que les redevances sont justes et équitables compte tenu, le cas
échéant, des critères réglementaires.
(10)
Elle publie dès que possible dans la Gazette du Canada les tarifs homologués;
elle en envoie copie, accompagnée des motifs de sa décision, à l’organisme de
perception, à chaque société de gestion ayant déposé un projet de tarif et à
toutes les personnes ayant déposé une opposition.
(11)
Les auteurs, artistes-interprètes et producteurs admissibles qui ne sont pas
représentés par une société de gestion peuvent, aux mêmes conditions que ceux
qui le sont, réclamer la rémunération visée à l’article 81 auprès de la
société de gestion désignée par la Commission, d’office ou sur demande, si
pendant la période où une telle rémunération est payable, un tarif homologué
s’applique à leur type d’oeuvre musicale, de prestation d’une oeuvre musicale
ou d’enregistrement sonore constitué d’une oeuvre musicale ou d’une
prestation d’une oeuvre musicale, selon le cas.
(12)
Le recours visé au paragraphe (11) est le seul dont disposent les auteurs,
artistes-interprètes et producteurs admissibles en question en ce qui
concerne la reproduction d’enregistrements sonores pour usage privé.
(13)
Pour l’application des paragraphes (11) et (12), la Commission peut :
a) exiger des sociétés de gestion le
dépôt de tout renseignement relatif au versement des redevances qu’elles
reçoivent en vertu de l’article 84 aux personnes visées au paragraphe (1);
b) fixer par règlement des périodes
d’au moins douze mois, commençant à la date de cessation d’effet du tarif
homologué, pendant lesquelles la rémunération visée au paragraphe (11) peut
être réclamée.
(14)
Une personne ou un organisme peut, lorsque toutes les sociétés de gestion
voulant déposer un projet de tarif l’y autorisent, déposer le projet pour le
compte de celles-ci; les dispositions du présent article s’appliquent alors,
avec les adaptations nécessaires, à ce projet de tarif.
Répartition
des redevances
84.
Le plus tôt possible après avoir reçu les redevances, l’organisme de
perception les répartit entre les sociétés de gestion représentant les
auteurs admissibles, les artistes-interprètes admissibles et les producteurs
admissibles selon la proportion fixée par la Commission.
85.
(1) Lorsqu’il est d’avis qu’un autre pays accorde ou s’est engagé à accorder,
par traité, convention, contrat ou loi, aux artistes-interprètes et aux
producteurs d’enregistrements sonores qui sont des citoyens canadiens ou des
résidents permanents au sens du paragraphe 2(1) de la Loi sur l’immigration
et la protection des réfugiés ou, s’il s’agit de personnes morales, ayant
leur siège social au Canada, essentiellement les mêmes avantages que ceux
conférés par la présente partie, le ministre peut, en publiant une
déclaration dans la Gazette du Canada, à la fois :
a) accorder les avantages conférés par
la présente partie aux artistes-interprètes et producteurs d’enregistrements
sonores sujets, citoyens ou résidents permanents de ce pays ou, s’il s’agit
de personnes morales, ayant leur siège social dans ce pays;
b) énoncer que ce pays est traité, à
l’égard de ces avantages, comme s’il était un pays visé par l’application de
la présente partie.
(2)
Lorsqu’il est d’avis qu’un autre pays n’accorde pas ni ne s’est engagé à
accorder, par traité, convention, contrat ou loi, aux artistes-interprètes ou
aux producteurs d’enregistrements sonores qui sont des citoyens canadiens ou
des résidents permanents au sens du paragraphe 2(1) de la Loi sur
l’immigration et la protection des réfugiés ou, s’il s’agit de personnes
morales, ayant leur siège social au Canada, essentiellement les mêmes
avantages que ceux conférés par la présente partie, le ministre peut, en
publiant une déclaration dans la Gazette du Canada, à la fois :
a) accorder les avantages conférés par
la présente partie aux artistes-interprètes ou aux producteurs
d’enregistrements sonores sujets, citoyens ou résidents permanents de ce pays
ou, s’il s’agit de personnes morales, ayant leur siège social dans ce pays,
dans la mesure où ces avantages y sont accordés aux artistes-interprètes ou
aux producteurs d’enregistrements sonores qui sont des citoyens canadiens ou
de tels résidents permanents ou, s’il s’agit de personnes morales, ayant leur
siège social au Canada;
b) énoncer que ce pays est traité, à
l’égard de ces avantages, comme s’il était un pays visé par l’application de
la présente partie.
(3)
Les dispositions de la présente loi que le ministre précise dans la
déclaration s’appliquent:
a) aux artistes-interprètes ou
producteurs d’enregistrements sonores visés par cette déclaration comme s’ils
étaient citoyens du Canada ou, s’il s’agit de personnes morales, avaient leur
siège social au Canada;
b) au pays visé par la déclaration,
comme s’il s’agissait du Canada.
(4)
Les autres dispositions de la présente loi s’appliquent de la manière prévue
au paragraphe (3), sous réserve des exceptions que le ministre peut prévoir
dans la déclaration.
Exemption
86.
(1) La vente ou toute autre forme d’aliénation d’un support audio vierge au
profit d’une société, association ou personne morale qui représente les
personnes ayant une déficience perceptuelle ne donne pas lieu à redevance.
(2)
Toute société, association ou personne morale visée au paragraphe (1) qui
achète au Canada un support audio vierge à une personne autre que le
fabricant ou l’importateur a droit, sur preuve d’achat produite au plus tard
le 30 juin de l’année civile qui suit celle de l’achat, au remboursement sans
délai par l’organisme de perception d’une somme égale au montant de la
redevance payée.
(3)
Si les règlements pris en vertu de l’alinéa 87a) prévoient l’inscription des
sociétés, associations ou personnes morales qui représentent des personnes
ayant une déficience perceptuelle, les paragraphes (1) et (2) ne s’appliquent
qu’aux sociétés, associations ou personnes morales inscrites conformément à
ces règlements.
87.
Le gouverneur en conseil peut, par règlement :
a) régir les exemptions et les
remboursements prévus à l’article 86, notamment en ce qui concerne :
(i) la procédure relative à ces
exemptions ou remboursements,
(ii) les demandes d’exemption ou de
remboursement,
(iii) l’inscription des sociétés,
associations ou personnes morales qui représentent les personnes ayant une
déficience perceptuelle;
b) prendre toute mesure d’ordre
réglementaire prévue par la présente partie;
c) prendre toute autre mesure
d’application de la présente partie.
Recours
civils
88.
(1) L’organisme de perception peut, pour la période mentionnée au tarif
homologué, percevoir les redevances qui y figurent et, indépendamment de tout
autre recours, le cas échéant, en poursuivre le recouvrement en justice.
(2)
En cas de non-paiement des redevances prévues par la présente partie, le
tribunal compétent peut condamner le défaillant à payer à l’organisme de
perception jusqu’au quintuple du montant de ces redevances et ce dernier les
répartit conformément à l’article 84.
(3)
L’organisme de perception peut, en sus de tout autre recours possible,
demander à un tribunal compétent de rendre une ordonnance obligeant une
personne à se conformer aux exigences de la présente partie.
(4)
Lorsqu’il rend une décision relativement au paragraphe (2), le tribunal tient
compte notamment des facteurs suivants :
a) la bonne ou mauvaise foi du
défaillant;
b) le comportement des parties avant
l’instance et au cours de celle-ci;
c) la nécessité de créer un effet
dissuasif en ce qui touche le non-paiement des redevances.
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ANNEX 2 : Private Copying Tariff
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Reporting
Requirements
8. Every
manufacturer or importer shall provide to CPCC the following information with
each payment:
(a) its
name, that is,
(i)the
name of a corporation and a mention of its jurisdiction of incorporation,
(ii)
the name of the proprietor of an individual proprietorship, or
(iii)
the names of the principal officers of all manufacturers or importers,
together with
any trade name (other than the above) under which it carries on business;
(b)
the address of its principal place of business;
(c)
its address, telephone number, telecopier number and e-mail address for the
purposes of notice;
(d)
the number of units of each type of blank audio recording medium on account
of which the payment is being made. The “type of blank audio recording
medium” refers to the type, brand name and recording capacity of the blank
audio recording medium, as well as to any other characteristics according to
which the entity filing the report sells the medium or identifies it in its
inventory;
(e)
the number of each type of blank audio recording medium exported or sold or
otherwise disposed of to a society, association or corporation that
represents persons with a perceptual disability.
Accounts
and Records
9.(1)
Every manufacturer or importer shall keep and preserve for a period of six
years, records from which CPCC can readily ascertain the amounts payable and
the information required under this tariff.
(2)
CPCC may audit these records at any time on reasonable notice and during
normal business hours.
(3)
If an audit discloses that the amounts due to CPCC have been understated by
more that ten per cent in any accounting period or semester, as the case may
be, the manufacturer or importer shall pay the reasonable costs or audit
within 30 days of the demand for such payment.
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Obligations
de rapport
8.
Le fabricant ou l’importateur fournit à la SCPCP avec son versement les
renseignements suivants:
a) son nom, soit,
(i) sa raison sociale et la juridiction
où il est constitué, dans le cas d’une société par actions,
(ii) le nom du propriétaire, dans le
cas d’une société à propriétaire unique,
(iii) les noms des principaux
dirigeants, dans le cas de tout autre fabricant ou importateur,
Ainsi que toute autre dénomination sou
laquelle il fait affaire;
b) l’adresse de sa principale place
d’affaires;
c) ses adresse, numéro de téléphone,
numéro de télécopieur et adresse de courriel aux fins d’avis;
d) le nombre d’unités de chaque type de
support audio vierge faisant l’objet du paiement, étant entendu que la
description du type de support doit indiquer entre autres le type, le nom
commercial, la capacité d’enregistrement du support ainsi que toute autre
caractéristique en fonction de laquelle le support est offert en vente ou
identifié à des fins d’inventaire;
e) le nombre de chaque type de support
audio vierge exportés, vendus ou aliénas au profit d’une société, association
ou personne morale qui représente les personnes ayant une déficience
perceptuelle.
Registres
9. (1) Le fabricant ou
importateur tient et conserve pendant une période de six ans les registres
permettant à la SCPCP de déterminer facilement les montant exigibles et les
renseignements qui doivent être fournis en vertu du présent tarif.
(2) La SCPCP peut vérifier
ces registres à tout moment durant les heures régulières de bureau et
moyennant un préavis raisonnable.
(3) Si la vérification des
registres révèle que les sommes à verser à la SCPCP ont été sous-estimées de
plus de dix pour cent pour toute période comptable ou semestre, le fabricant
ou l’importateur assume les coûts raisonnables de vérification dans les 30
jours suivant la date à laquelle on lui en fait la demande.
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