2013 FCA 64, 2013 FCA 64

A-84-12 2013 FCA 64 National Gallery of Canada ( Applicant ) v. Canadian Artists’ Representation/Le Front des artistes canadiens and Regroupement des artistes en arts visuels du Québec ( Respondents ) and Society for Reproduction Rights of Authors, Composers and publishers in Canada ( Intervener ) Indexed as: National Gallery of Canada v. Canadian Artists’ Representation Federal Court of Appeal, Noël, Pelletier and Trudel JJ.A.—Ottawa, September 5, 2012 and March 4, 2013. Editor’s Note: This decision has been reversed on appeal ( 2014 SCC 42 ).

The reasons for judgment, delivered on June 12, 2014, will be published in the Supreme Court Reports .

Copyright –– Judicial review of decision of Canadian Artists and Producers Professional Relations Tribunal that applicant failing to bargain in good faith when reversing bargaining position, refusing to bargain artists’ minimum fees for right to use existing works with respondents after having done so previously –– Applicant, for several years, negotiating with respondents on artists’ minimum fees for use of existing works but applicant later reversing bargaining position, refusing to continue to bargain such items –– Applicant notifying respondents that respondents’ certificate to bargain collectively limited to services, not extending to copyright matters –– Respondents filing complaint to Tribunal that applicant failing to bargain in good faith –– Tribunal assuming jurisdiction to approve “scale agreement” involving rights assigned by copyright holders to respondents on basis assignments constituting “provision of … services” within meaning of definition of “scale agreement” found in Status of the Artist Act , s. 5 –– Whether applicant’s refusal to negotiate scale agreement pertaining to matters relating to copyright (i.e. artists’ minimum fees respecting use of existing works) could support Tribunal’s finding applicant failing to bargain in good faith –– Per Noël J.A. (Trudel J.A. concurring): Matters relating to copyright, including imposition of minimum fees for use of existing works, not coming within parameters of Act; thus Tribunal having no authority to compel parties to negotiate such matters –– Applicant could not validly agree to scale agreement affecting copyrights –– Therefore, applicant’s refusal to pursue negotiations relating thereto could not be attributed to failure to negotiate in good faith –– Application allowed –– Per Pelletier J.A. (dissenting): Tribunal correctly finding that applicant’s reversal of bargaining position, refusal to continue to bargain minimum fees for use of existing works amounting to failure to bargain in good faith –– Tribunal’s decision, reasoning process justifiable, transparent, intelligible –– Tribunal’s

interpretation of phrase “provision of services” in Act not creating conflict between Act, Copyright Act . This was an application for judicial review of a decision of the Canadian Artists and Producers Professional Relations Tribunal that the applicant failed to bargain in good faith when it reversed its bargaining position and refused to bargain minimum fees for the right to use existing works with the respondents after having done so for many months.

The Status of the Artist Act (Act), which was the relevant Act in this case, provides a framework for the conduct of negotiations between artists’ associations and producers with a view to providing, among other things, compensation for artists. Under the Copyright Act , the rights to exhibit and to reproduce original works of art are protected. The applicant argued that the Tribunal’s decision could not be maintained since it erred in concluding that authorizing the use of existing works falls within the expression “provision of services” as that term is used in the definition of “scale agreement” in the Act .

It also argued that a conflict between the Act and the Copyright Act exists and that copyright matters must be dealt with using the mechanisms provided in the Copyright Act . The Tribunal certified the respondent Canadian Artists Representation/Front des artistes canadiens as the representative organization for Canadian visual artists outside Quebec and the respondent Regroupement des artistes en arts visuels du Québec as the representative organization for visual artists in Quebec. The respondents, after notifying the applicant that they wanted to bargain, advised it that they would negotiate jointly therewith.

The spokesperson for the respondents’ bargaining committee notified the applicant of the items they wished to bargain, which included artists’ fees. For four years, the applicant had agreed to negotiate minimum fees for the use of existing works and had carried on such negotiations despite its reservations. However, at one point, when a new spokesperson was hired, the applicant reversed its bargaining position and refused to continue to bargain those items. The applicant had a law firm prepare an opinion on what its position in the negotiations should be and provided it to the respondents.

Further to this legal opinion, the applicant presented a revised draft scale agreement to the respondents in which all references to the minimum fees for the use of existing works had been removed. After several communications between the parties, the applicant notified the respondents, in particular, that its certificate to bargain collectively was limited to services and could not extend automatically to copyright matters. It was defending its position that the scope of the negotiations was limited by the expression “provision of services” in the statutory definition of “scale agreement” in the Act .

The respondents then filed their complaint to the Tribunal that the applicant had failed to bargain in good faith. The Tribunal assumed jurisdiction to approve a “scale agreement” involving rights assigned by copyright holders to the respondents on the basis that these assignments constituted a “provision of … services” within the meaning of the definition of “scale agreement” found in

section 5 of the Act . It concluded, inter alia , that it would be inconsistent with the Act’s purpose if scale agreements could not contain terms relating to copyright; that the applicant’s failure to negotiate or discuss the inclusion of matters relating to copyright, including binding minimum fees in the scale agreement, created a rigid stance resulting in the failure to conclude an agreement; and that the

applicant had therefore violated

section 32 of the Act by failing to bargain in good faith. The main issue was whether the applicant’s refusal to negotiate a scale agreement pertaining to matters relating to copyright —specifically minimum fees with respect to the use of existing works —could support the Tribunal’s finding that the applicant failed tobargain in good faith. Held (Pelletier J.A. dissenting), the application should be allowed.

Per Noël J.A. (Trudel J.A. concurring): This was the first time that the Tribunal ruled at the negotiation stage on a scale agreementpertaining to pre-existing works, i.e. works that are not the result of a provision of services by an artist for a producer. The respondents’argument that the Act applied in this context despite the obvious conflicts with the Copyright Act was rejected. Where scale agreementspertain to commissioned works (“oeuvres commandées” in French), no copyright is involved since the work does not exist at the time theagreement is signed.

Consequently, the “provision of … services” required to realize the commissioned work and the rights of use thatan artist may assign respecting the contemplated work do not entail any possible conflict with the Copyright Act. Conflicts with theCopyright Act only arise where one seeks to extend scale agreements to works that are created otherwise than in the context of acommission, as the Tribunal did in this case. In extending the application of the Act to works made otherwise than in the context of acommission, the Tribunal distorted the words used by Parliament.

No linguistic gymnastics could justify the assertion that theassignment of a copyright is a “provision of artists’ services”. A copyright is not a “service” under any acceptation. A copyright consists of rights recognized and protected by law owned by an artist inrelation to his or her work (Copyright Act,

section 3). The result is that the assignment of such rights gives rise to a transfer of property.A transfer of property could not be described as a “provision of … services”. There is nothing to which the assignment of a right to use awork can relate unless the assignment is made in the context of a “provision of … services”, which was not the case herein. There wasno rational basis for the Tribunal’s proposition that absent such services … the right to use an existing work is a service that the artistwho holds the copyright may provide to a producer.

The phrase “provision of … services” has a plain meaning which contemplates thecreation of artistic works for specified producers. Paragraph 6(2)(

a) of the Act sets out the scope of application of the part of the Act that was relevant in this case. When read in context, itcan be seen that a “scale agreement” contemplates the imposition of minimum conditions for the provision of such services and forcompensation for the use of the works thereby created, including their public lending. These goals can be attained without giving rise toany conflict with the rights protected by the Copyright Act. The fact that no harmonization provision was enacted was testimony to thefact that no conflict was envisaged.

It could be safely assumed that such measures would be found in the Act or the Copyright Act or bothif the two statutes were intended to deal with copyrights as the Tribunal held. Therefore, matters relating to copyright, including the imposition of minimum fees for the use of existing works, do not come within theparameters of the Act, and thus the Tribunal had no authority to compel the parties to negotiate such matters. The applicant could notvalidly agree to a scale agreement affecting copyrights.

It follows that its refusal to pursue negotiations relating to these matters couldnot be attributed to a failure to negotiate in good faith. Per Pelletier J.A. (dissenting): The Tribunal correctly found that the applicant’s reversal of its bargaining position and its refusal tocontinue to bargain items such as minimum fees for the use of existing works amounted to a failure to bargain in good faith. TheTribunal’s conclusion that the applicant failed to bargain in good faith was reasonable and its decision and reasoning process werejustifiable, transparent and intelligible. Its

interpretation of the phrase “provision of services” included in the definition of the term “scaleagreement” in

section 5 of the Act was reasonable. The fact that copyright is property did not preclude a finding that granting another theright to use that property is a service. The granting of a license is a service provided by the artist, as contemplated by the definition of“scale agreement” in the Act. The setting of fees is not one of the matters which are specifically and exclusively reserved to the artist insection 3 of the Copyright Act and is therefore not a matter referred to in subsection 13(4) thereof. The Tribunal’s

interpretation of theexpression “provision of services” did not create a conflict between the Act and the Copyright Act. STATUTES AND REGULATIONS CITED Act respecting the professional status and conditions of engagement of performing, recording and film artists, R.S.Q., c. S-32.1. Act respecting the professional status of artists in the visual arts, arts and crafts and literature, and their contracts with promoters,R.S.Q., c. S-32.01. Canada Labour Code, R.S.C., 1985, c. L-2, s. 22. Copyright Act, R.S.C., 1985, c. C-42, s. 3, 13(4). Public Service Labour Relations Act, S.C. 2003, c. 22, s. 2, s. 51.

Status of the Artist Act, S.C. 1992, c. 33, ss. 2, 3, 5 “scale agreement”, 6(2)(a), 18, 21, 32, 53(2). CASES CITED CONSIDERED: Public Performance of Sound Recordings (Re) (1999), (CA CB), 3 C.P.R. (4th) 350 (Copyright Bd.); Writers’ Unionof Canada, 1998 CAPPRT 028, 84 C.P.R. (3d) 329; Royal Oak Mines Inc. v. Canada (Labour Relations Board), (SCC), [1996] 1 S.C.R. 369, (1996), 133 D.L.R. (4th) 129; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; R. v. Hydro-Québec, (SCC), [1997] 3 S.C.R. 213, (1997), 151 D.L.R. (4th) 32; Royal Bank of Canada v.

Sparrow Electric Corp., (SCC), [1997] 1 S.C.R. 411, (1997), 193 A.R. 321; Verdun v. Toronto-Dominion Bank, (SCC),[1996] 3 S.C.R. 550, (1996), 139 D.L.R. (4th) 415; Friesen v. Canada, (SCC), [1995] 3 S.C.R. 103, (1995), 127 D.L.R.

(4th) 193; Desputeaux v. Éditions Chouette (1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178; Writers Guild of Canada, R-41-94, May 11,1995, online: <http://www.crt.gouv.qc.ca/fileadmin/documents/ decisions/1995_05_11.pdf>. REFERRED TO: Canadian Artists’ Representation, 2003 CAPPRT 047; Smith v. Alliance Pipeline Ltd., 2011 SCC 7, [2011] 1 S.C.R. 160; Celgene Corp.v. Canada (Attorney General), 2011 SCC 1, [2011] 1 S.C.R. 3; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’Association, 2011 SCC 61, [2011] 3 S.C.R. 654; Rio Tinto Alcan Inc. v.

Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 S.C.R.650; Canada (Attorney General) v. Druken, (FCA), [1989] 2 F.C. 24, (1988), 53 D.L.R. (4th) 29 (C.A.); WinnipegSchool Division No. 1 v. Craton et al., (SCC), [1985] 2 S.C.R. 150, (1985), 21 D.L.R. (4th) 1. AUTHORS CITED Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.

APPLICATION for judicial review of a decision (Canadian Artists’ Representation, 2012 CAPPRT 053) of the Canadian Artists andProducers Professional Relations Tribunal that the applicant failed to bargain in good faith when it reversed its bargaining position andrefused to bargain minimum fees for the right to use existing works with the respondents after having done so previously. Applicationallowed, Pelletier J.A. dissenting. APPEARANCES Guy P. Dancosse and Shawn Connelly for applicant. David Yazbeck and Wassim Garzouzi for respondents. Colette Matteau for intervener.

SOLICITORS OF RECORD Lapointe Rosenstein Marchand Melançon, LLP, Montréal, for applicant. Raven, Cameron, Ballantyne & Yazbeck LLP/s.r.l., Ottawa, for respondents. Matteau Poirier, Montréal, for intervener.

The following are the reasons for judgement rendered in English by [1] Pelletier J.A. (dissenting): The Canadian Artists and Producers Professional Relations Tribunal (the Tribunal) found that theNational Gallery of Canada (the National Gallery) failed to bargain in good faith when it reversed its bargaining position and refused tobargain minimum fees for the right to use existing works with CARFAC/RAAV (see below) after having done so for many months.

Thisdecision, reported as Canadian Artists’ Representation, 2012 CAPPRT 053 (the Tribunal reasons) is the subject of this application forjudicial review. [2] The issue before the Court is whether the Tribunal’s conclusion that the National Gallery bargained in bad faith can bemaintained. The National Gallery says that it cannot because the Tribunal erred in concluding that authorizing the use of existing worksfalls within the expression “provision of … services” as that term is used in the definition of “scale agreement” [section 5] in the Statusof the Artist Act, S.C. 1992, c. 33 (the Act).

The National Gallery also posits a conflict between the Copyright Act, R.S.C., 1985 c. C-42and the Act, and takes the position that copyright matters must be dealt with using the mechanisms provided in the Copyright Act. [3] For the reasons which follow, I am of the view that the definition of “services” is not determinative of this appeal. Whether thedefinition of “scale agreement” compelled it do so or not, the National Gallery agreed to negotiate minimum fees for the use of existingworks and, indeed, carried on such negotiations for four years.

The issue before the Tribunal was whether, in those circumstances, theNational Gallery’s reversal of its bargaining position and its refusal to continue to bargain those items amounted to a failure to bargain ingood faith. The Tribunal found it did. I agree. I would therefore dismiss the application for judicial review with costs. RELEVANT STATUTORY PROVISIONS [4] The balance of these reasons will be easier to follow if one has a grasp of the relevant portions of the Act. The Act begins with arecognition of the contributions of artists to Canadian society and a declaration of the rights of artists: Proclamation2.

The Government of Canada hereby recognizes (

a) the importance of the contribution of artists to the cultural, social, economic and political enrichment of Canada; (

b) the importance to Canadian society of conferring on artists a status that reflects their primary role in developing andenhancing Canada’s artistic and cultural life, and in sustaining Canada’s quality of life; (

c) the role of the artist, in particular to express the diverse nature of the Canadian way of life and the individual andcollective aspirations of Canadians; (

d) that artistic creativity is the engine for the growth and prosperity of dynamic cultural industries in Canada; and (

e) the importance to artists that they be compensated for the use of their works, including the public lending of them.

Policy statement 3. Canada’s policy on the professional status of the artist, as implemented by the Minister of Canadian Heritage, is based on the following rights: (

a) the right of artists and producers to freedom of association and expression; (

b) the right of associations representing artists to be recognized in law and to promote the professional and socio- economic interests of their members; and (

c) the right of artists to have access to advisory forums in which they may express their views on their status and on any other questions concerning them. [My emphasis.] [ 5 ] The Act establishes the Tribunal and grants it the jurisdiction to certify artists’ and producers’ associations whose roles are to negotiate a scale agreement on behalf of those it represents.

A scale agreement is defined as: 5. … “scale agreement” « accord-cadre » “scale agreement” means an agreement in writing between a producer and an artists’ association respecting minimum terms and conditions for the provision of artists’ services and other related matters; [ 6 ] Once a representative organization has given a producer notice to bargain, then: Duty to bargain and not to change terms and conditions 32. Where a notice to begin bargaining has been issued under

section 31, (

a) the artists’ association and the producer shall without delay, but in any case within twenty days after the notice was issued, unless they otherwise agree, (

i) meet, or send authorized representatives to meet, and begin to bargain in good faith, and (ii) make every reasonable effort to enter into a scale agreement; and [ 7 ] The Tribunal has the authority to determine whether an artist’s representative organization has engaged in an unfair practice or has otherwise failed to comply with its obligations under the Act . In deciding those questions, and any other question which may come before it: Criteria for application by Board 18. The Tribunal shall take into account (

a) in deciding any question under this Part, the applicable principles of labour law; [ 8 ] Finally, the Tribunal’s decisions are protected from review: Determination or order — no review by court 21.

(1) Subject to this Part, every determination or order of the Tribunal is final and shall not be questioned or reviewed in any court, except in accordance with the Federal Courts Act on the grounds referred to in paragraph 18.1(4)( a ), (

b) or (

e) of that Act . No review by certiorari , etc.

(2) Except as permitted by subsection (1), no determination, order or proceeding made or carried on, or purporting to be made or carried on, by the Tribunal shall be questioned, reviewed, prohibited or restrained on any ground, including the ground that the Tribunal did not have jurisdiction or exceeded or lost its jurisdiction, or be made the subject of any proceeding in or any process of any court on any such ground, whether by way of injunction, certiorari , prohibition, quo warranto or otherwise. [ 9 ] In

summary, the Act provides a framework, based on the labour relations model, for the conduct of negotiations between artists’ associations and producers with a view to providing, among other things, compensation for artists.

THE FACTS [ 10 ] The Tribunal certified the Canadian Artists’ Representation/Front des artistes canadiens (CARFAC) as the representative organization for Canadian visual artists outside Quebec and Regroupement des artistes en arts visuels du Québec (RAAV) as the representative organization for visual artists in Quebec. [ 11 ] Before proceeding, it is necessary to clarify an expression used in the balance of these reasons.

The National Gallery uses the phrase “copyright-related issues” to refer to matters which can only be dealt with by the copyright holder (such as the granting of licences or assignments of copyright) or by someone authorized in writing by the copyright holder, as required by subsection 13(4) of the Copyright Act . For the sake of consistency, I will use the phrase “copyright-related issues” in the same way. [ 12 ] In early 2003, CARFAC and RAAV (collectively, CARFAC/RAAV) each gave the National Gallery notice to bargain.

Later in that year, CARFAC/RAAV advised the National Gallery that they would negotiate jointly. [ 13 ] Given that the issue is whether the National Gallery failed to negotiate in good faith, I think it is important to set out, in some detail, the course of negotiations between the parties. [ 14 ] The initial meeting between the parties was held on December 1, 2003. On January 5, 2004, Mr. Karl Beveridge, the spokesperson for CARFAC/RAAV’s bargaining committee wrote to his counterpart at the National Gallery, Mr. Daniel Amadei, setting out a list of items which CARFAC/RAAV wished to bargain:

1. Fees (this includes all fees as per the CARFAC fee

schedule including exhibition, reproduction, web/virtual/digital, permanent collection, lectures, etc.) 2. All other payments (installation, meet the press, gallery talks, etc.) 3. Contracts (exhibition, commissions, web, performance, lecture, purchase (excluding sale price), etc.) The letter went on to say: You agreed to confirm in writing that these items are the items that we will be negotiating at the table.

We additionally note that you have already agreed in principle to bargain the items listed above. (Application record, Vol. 15, at page 2836.) [ 15 ] It should be noted at this point that the right to exhibit (applicable to works created after June 7, 1988) and to reproduce original works of art are protected by copyright: see Copyright Act , paragraphs 3(1)(

a) and ( g ). [ 16 ] Mr. Pierre Théberge, the director of the National Gallery, responded to this letter. The relevant portions of his response were: I confirm that Mr. Amadei has the authority to reach a tentative agreement with RAAV and CARFAC on the subjects that are under his authority. It is possible that some items to be discussed may require consultation with his colleagues or myself. Since we do not know the details of your intentions regarding some issues, we are uncertain if other NGC representatives will be involved. We are seeking legal advice, and wish to advise you that Mr.

Amadei may be accompanied by a councillor. I understand that Mr. Amadei stated at your first meeting that although we are ready to discuss all items listed in your letter, it may not be in the NGC’s authority to implement new programs or modify rules and procedure of existing structures. (Application record, Vol. 15, at page 2839.) [ 17 ] This carefully worded response (“Mr. Amadei has the authority to reach a tentative agreement … on subjects that are under his authority”) did not directly address the question raised by Mr. Beveridge. Notwithstanding Mr.

Théberge’s evasiveness, the issue of minimum fees was on the bargaining agenda from the beginning of the talks between the parties until the events giving rise to this application. [ 18 ] This is confirmed by the fact that, on February 3, 2005, Mr. Amadei proposed the following topics for discussion at the meeting scheduled for February 23 and 24, 2005: 1. Contracts (Exhibition, Installation, and Performance) 2. Reproduction fees 3. Permanent Collection 4. Exhibition Fees 5.

Other fees (Application record, Vol. 15, at page 2868.) [ 19 ] The tenor of the negotiations can be seen in two draft scale agreements which are found in the application record, one dated June 1, 2006 (the 2006 Draft) (see application record, Vol. 17, at pages 3234–3244), and the other dated October 20, 2007 (the 2007 Draft) (see application record, Vol. 1, at pages 114–123). A comparison of relevant terms in the two appears in the following table:

The 2006 Draft 8:02 The NGG/CMCP [the National Gallery of Canada/ the Canadian Museum of Contemporary Photography] shall enter into a contract with all artists for the purposes of the activity for which the artist is engaged. The contract shall follow the Contracts attached to this Agreement. 9:00 Minimum Fees 9:01Minimum fees for 2005-2006 as expressed herein shall apply immediately to (dates applicable for each year of agreement). 9:02 (list fee

schedule here or as attachment) 9:03 Any artist engaged under this Agreement shall be free to negotiate remuneration above the minimum fees expressed herein. 12:00 Signing Powers 12:01 A Contract must be signed by the proper signing officers of the NGC/CMCP. After completing the contract, the NGC/CMCP shall sign all three copies of the Contract in ink, and then obtain the signature of the Artist or Artist’s authorized representative on the three copies. The Artist will retain one copy.

The NGG/CMCP shall send one copy to CARFAC/RAAV (as outlined in clause 7:05) and one copy shall remain with the NGC. 29:00 Copyright 29:01 The artist or the legally recognized copyright holder retains copyright in the Artwork. 29:02 All rights not specifically granted to the NGC/CMCP are reserved to the artist or the legally recognized copyright holder. 30:00 Moral Rights 30:01 The Artist retains the Moral Rights in the Artwork. 31:00 Secondary Rights 31:01 The Artist or the legally recognized copyright holder retains secondary copyright in the Artwork.

The 2007 Draft 7:04 When the NGC/CMCP enters into a contract with an artist, NGC/CMCP shall use one of the Relevant Contracts under this Agreement. 8:00 Minimum Fees 8:01 Minimum fees for 2006-2007 as expressed herein shall apply immediately to (dates applicable for each year of agreement). 8:02 (list fee

schedule here or as attachment) 8:03 (rates for additional services) 8:04 Any artist engaged under this Agreement shall be free to negotiate remuneration above the minimum fees expressed herein. 10:00 Signing Powers 10:01 When entering into a Relevant Contract, the NGC/CMCP shall sign all three copies of the Relevant Contract in ink, and then obtain the signature of the Artist or the Artist’s authorized representative on the three copies. The Artist shall be given one executed copy of the Relevant contract.

The NGC/CMCP shall send one copy to CARFAC/RAAV (as outlined in clause 7:09) and one copy shall remain with the NGC. 25:00 Copyright 25:01 The artist or the legally recognized copyright holder retains copyright in the Artwork. 25:02 All rights not specifically granted to the NGC/CMCP are reserved to the artist or the legally recognized copyright holder. 26:00 Moral Rights 26:01 The Artist retains the Moral Rights in the Artwork. 27:00 Secondary Rights 27:01 The Artist or the legally recognized copyright holder retains secondary copyright in the Artwork [ 20 ] In the application record, there are also a number of model contracts which were being negotiated in parallel with the scale agreement.

According to clauses 8:02 and 7:04 respectively of the 2006 and 2007 Draft scale agreements, the model contracts were to be used when an artist contracted with the National Gallery. An example of such a contract is the contract for Public Communication by Telecommunication which appears at Vol. 1, at pages 138–146 of the application record. The following terms of that contract cast some light on the items being negotiated: 2. The Artist, author, first owner and the current owner of the copyright on the works covered by this contract and described in

section 3, provides the user of said works with a nonexclusive and nontransferable license to use them solely as described in

section 4. … 4. Copyright Reproduction rights for digital transfer 4.1 The Artist authorizes the National Gallery, in consideration of the payment of royalties stipulated in

section 6.1 of this contract, to reproduce the works in a digital format for the sole purpose of communicating the work to the public by telecommunication, as described hereafter. Right of communication to the public 4.2 The Artist grants the National Gallery, in consideration of the payment of royalties stipulated in

section 6.2 of this contract, a license for the following public communication of the works (please check) … 5. Moral Rights 5.1 In addition to the caption information of the works following museum standards, the sign “©”, the name of the Artist and the year of creation of the works must be listed legibly and accompany the works that are communicated to the public. This information must appear immediately next to the works or in a

section devoted to credits, it being acknowledged by the National Gallery that failure to list this

information completely and legibly in conjunction with the works is prejudicial to the Artist and shall give rise to monetary compensation. 6.

Remuneration and mode of payment 6.1 The Artist grants the license of reproduction for digital transfer in consideration of the amount of __________________$ for each work transferred, for a total of _______________$, plus any applicable taxes. 6.2 The Artist grants the license for public communication in consideration of the amount of __________________$ for each work communicated to the public, for a total of _________________$, plus any applicable taxes, for the following use(s). 6.3 The National Gallery will pay the Artist according to the following terms: 6.3.1 Date(

s) of payment, installment(s): _____________ 6.3.2 Conditions, if applicable (example, advance) ____________: 6.3.3 Verification of accounting records, frequency envisaged: ___________ 6.3.4 Compound interest of 1% a month (12.66% a year) will be charged on any amount past due. … 8. Ownership of the works It is expressly agreed that this contract in no way transfers ownership of the works to the National Gallery or to anyone else. … 12.

Mediation and Arbitration In case of litigation, the parties agree to use the mediation and arbitration processes prescribed in the CARFAC-RAAV/NGCL-CMCP Collective Agreement signed _______ 2007. [ 21 ] A fair reading of these contractual provisions shows that the parties did negotiate the issue of minimum fees for the use of existing works. They also show that CARFAC/RAAV do not purport to deal with their members’ interests in copyright in any way. In fact, both the draft scale agreements and the model contracts stipulate that the artist’s rights remain the artist’s.

In addition, CARFAC/RAAV do not receive any amounts from producers on behalf of their members by way of royalties or otherwise.

Any licensing of copyright takes place only in the contract between the National Gallery and the artist. [ 22 ] Whatever reservations the National Gallery may have had about the inclusion of minimum fees in a scale agreement, prior to October 2007, the negotiations consistently dealt with them. [ 23 ] The Tribunal, at paragraphs 123 and 128 found that: The parties had an established practice for their bargaining meetings, of exchanging agenda, draft scale agreements and contracts prior to their meetings to allow each party the opportunity to review and make comments prior to their meetings.… … Witnesses testified that the negotiations involved drafting versions, discussing changes, incorporating those changes into a new draft, with a different colour, and then confirming those changes in the next round.

Draft collective agreements dated June 6, 2006 ( Exhibit 31 ) and October 20, 2007 ( Exhibit 15 ) were submitted to the Tribunal, as well as draft contracts to be appended to the collective agreement ( Exhibit 9 ) which all included language related to minimum fees, such as temporary exhibition fees and reproduction fees. [ 24 ] Negotiations continued on this basis as long as Mr. Amadei was the National Gallery’s spokesperson. [ 25 ] In May 2007, the National Gallery advised CARFAC/RAAV that Mr. Amadei had left the institution and that its spokesperson, going forward, would be Mr. Guy Dancosse.

At the relevant time, Mr. Dancosse was a lawyer who practised his profession from the Montréal office of Gowling Lafleur Henderson (Gowlings). [ 26 ] In June 2007, Mr. Dancosse asked a lawyer in his firm to provide a legal opinion for the National Gallery. Referring to an earlier Tribunal decision amending CARFAC’s certification order ( Canadian Artists’ Representation , 2003 CAPPRT 047 (decision No. 047)), Mr.

Dancosse pointed out in his instructions to the lawyer (translation by the Court): The Tribunal appears to draw an important distinction to the effect that while this allows CARFAC to make demands within this widened sphere, this in no way obliges the producer to include such demands in an eventual agreement. In other words, each party to the negotiations remains free to demand, to refuse, or to counter-offer as it wishes and according to what it can live with.

For example, nothing would prevent the Gallery from demanding a clause saying that the author retains copyright and that copyright is not in any way covered or within the scope of a scale agreement with CARFAC. The client has received opinions from three lawyers on this subject, which do not appear to answer its question clearly. It has asked us to provide an opinion which is clearer. (Application record, Vol. 16, at page 3078.)

[27] As I read these instructions, Mr. Dancosse understood that the Tribunal’s position that the scope of negotiations is determined bythe parties, as set out in decision No. 047, meant that the National Gallery could take the position that minimum fee schedules forexisting works were not negotiable. I observe that this position does not depend on the definition of “services”. [28] In July 2007, Gowlings provided the National Gallery with its opinion. Its conclusions may be summarized as follows. Firstly, aunion which is not authorized to do so in writing cannot deal with copyright-related issues.

This is because only the holder of copyrightor a person authorized in writing by the holder can authorize others to do that which

section 3 of the Copyright Act reserves to the holderof the copyright. [29] The author of the opinion relied on the decision of the Copyright Board in Public Performance of Sound Recordings (Re) (1999), (CA CB), 3 C.P.R. (4th) 350, to support her conclusion. In that case, the Copyright Board, in dealing with anapplication for a tariff, decided that a union could not rely upon its constitution or its bargaining mandate in order to exercise the rights ofa collective society, that is, grant licenses on behalf of its members and collect royalties for distribution to its members.

The opinionconcluded from this that the National Gallery could refuse to negotiate copyright-related issues with CARFAC/RAAV if the latter didnot have specific written authorization from their members, which CARFAC/RAAV admitted not having. This conclusion assumes thatCARFAC/RAAV proposed to grant licences with respect to works whose copyright was held by their members and thatCARFAC/RAAV intended to collect royalties on behalf of their members.

Neither of these assumptions were true at the time the opinionwas prepared. [30] The opinion’s second conclusion was that the Act confers on representative organizations the exclusive right to negotiate withrespect to labour relations but not with respect to copyright-related issues. This conclusion was said to flow from the provisions of theCopyright Act dealing with collective societies and the absence of any reference to copyright in the sections of the Act which set out theTribunal’s powers.

The opinion went on to state that previous Tribunal decisions which found that representative organizations cannegotiate copyright matters are not binding on the National Gallery since the Tribunal is not a court of law and its decisions do not bindthe courts. [31] The opinion’s ultimate conclusion was that, on the basis of the reasoning set out above, the National Gallery could “legitimatelyrefuse to discuss with CARFAC and RAVV [sic] with respect to copyright issues”: application record, Vol. 16, at page 3087. [32] Two observations can be made about this opinion.

The first is that it was written as though negotiations between the NationalGallery and CARFAC/RAAV had not yet begun. It did not recognize that, for the past four years, the parties had been engaged innegotiating a

schedule of minimum fees and finalizing model contracts which would be used when individual artists negotiated with theNational Gallery for the use of their works. [33] The second is that the opinion did not recognize that the question of whether the National Gallery could refuse to negotiateminimum fee schedules for existing works going forward, after having negotiated those items for four years, was a labour relationsquestion and not a question of the rights of the parties under the Copyright Act. This flows from paragraph 18(

a) of the Act which directsthe Tribunal to dispose of the questions coming before it by reference to the applicable principles of labour law. [34] Returning to the sequence of events, the National Gallery provided the Gowlings’ opinion to CARFAC/RAAV in July 2007. OnOctober 29–31, 2007, the parties met for the first time following CARFAC/RAAV’s receipt of the opinion. On October 29, the partiesreviewed the last draft of the scale agreement. That draft included minimum fees for the use of existing works and model contracts. OnOctober 30, 2007, the National Gallery invited Mr.

Gilles Daigle (a Gowlings lawyer, but not the author of the Gowlings’ opinion) topresent the Gowlings’ opinion. Mr. Daigle attended the meeting as a copyright specialist. His position was that he had no mandate toresolve the conflict between the parties, nor was he in a position to deviate from the position that the National Gallery was taking withrespect to the negotiation of minimum fee schedules for existing works. [35] Following the discussion with Mr.

Daigle, the National Gallery presented a revised draft scale agreement to CARFAC/RAAV inwhich all references to the minimum fees for the use of existing works had been removed. The services contemplated by the NationalGallery’s draft agreement were limited to exhibition planning and production, including consultation, installation, openings, lectures andtalks, and commission for new works. [36] The following day, Mr.

Beveridge, on behalf of CARFAC/RAAV read a prepared statement indicating that the NationalGallery’s proposal meant that the latter was not prepared to consider CARFAC/RAAV’s position on the inclusion of a minimum feeschedule in a scale agreement. Mr. Dancosse responded by reading the National Gallery’s own written statement which affirmed theNational Gallery’s willingness to consider means by which fee schedules could be negotiated through the current bargaining process. [37] Further communications between the parties ensued.

On January 29, 2008, the National Gallery advised CARFAC/RAAV that“we can discuss binding exhibition rights fee schedules for temporary exhibitions only for artists you specifically represent incompliance with the Copyright Legislation”. The National Gallery added: “In the present state of our laws, your certificate to bargaincollectively is limited to services and cannot automatically extend to copyright matters.

This position is based on legal opinions advisingus so.” On my reading of the record, this is the first indication that the National Gallery was defending its position on the basis that thescope of negotiations was limited by the expression “provision of artists’ services” in the statutory definition of “scale agreement”. [38] On April 22, 2008, CARFAC/RAAV filed their complaint that the National Gallery had failed to bargain in good faith. THE DECISION UNDER REVIEW [39] The Tribunal rendered its decision on February 16, 2012. It began by reviewing the terms of the CARFAC and RAAVcertification orders.

It then reviewed the facts, quoting extensively from the agreed statement of facts filed by the parties. The Tribunalidentified the three issues which it was to decide: 1. Whether the complaint was filed within the six-month period set out in subsection 53(2) of the Act?

2. Whether copyright matters are a proper subject for collective bargaining and inclusion in a scale agreement under the Act ? 3. Whether the National Gallery breached its duty to bargain in good faith pursuant to

section 32 of the Act ? [ 40 ] The Tribunal resolved the issue of timeliness in CARFAC/RAAV’s favour. That issue is not contested before us so nothing more need be said about it.

Whether copyright matters are a proper subject for collective bargaining and inclusion in a scale agreement under the Act ? [ 41 ] The Tribunal then addressed the issue of whether copyright matters were a proper subject for collective bargaining and inclusion in a scale agreement. [ 42 ] This issue arises from the definition of “scale agreement” in the Act which is reproduced below for ease of reference: 5. … “scale agreement” « accord-cadre » “scale agreement” means an agreement in writing between a producer and an artists’ association respecting minimum terms and conditions for the provision of artists’ services and other related matters; [ 43 ] The Tribunal began its analysis by quoting extensively from one of its earlier decisions, Writers’ Union of Canada , 1998 CAPPRT 028 (decision No. 028).

In that matter, the Department of Canadian Heritage (DCH) and the Department of Public Works and Government Services Canada (PWGSC) argued that the certification order in the Writers’ Union’s favour did not give the latter the right to negotiate fees for the use of pre-existing works. DCH and PWGSC made the same argument as is being made in this case. They claimed that copyright is property, not a service.

According to them, the bargaining regime established by the Act applies only to commissioned works; and, fees related to the use of existing works must be dealt with under the collective administration scheme provided in the Copyright Act . [ 44 ] In decision No. 028, the Tribunal rejected these arguments. It found that the Act complemented the regime provided in the Copyright Act by providing artists with an additional mechanism to obtain compensation for their works. The Tribunal put considerable emphasis on the Act’s stated objective of improving the socio-economic status of artists.

Had Parliament intended to withdraw copyright from the scope of bargaining, it could have done so. The Tribunal noted that the Act contains no restriction on the scope of bargaining, which is consistent with the labour law principle that parties to a collective bargaining relationship can bargain any subject matter which they wish to bargain. [ 45 ] In decision No. 028, the Tribunal also dealt with the argument that copyright is property and not a service. It observed that copyright is a “bundle of rights”, including an interest in a particular type of property, the work itself.

The Tribunal rejected the notion that copyright is merely a form of property—a “good”—because creators of artistic works have a fundamental socio-economic right whose exclusion from the scheme created by the Act would be contrary to the objects of the Act. [ 46 ] The Tribunal continued its review of decision No. 028 by noting that under the Copyright Act , artists had two options when dealing with copyright: they could manage it themselves or they could rely on collective societies. In order to take advantage of collective societies, artists have to assign them their rights.

The collective society then manages the artist’s copyright in common with that of all its other members, usually, but not necessarily, through the tariff scheme administered by the Copyright Board. The collective society is responsible for collecting the applicable royalties and distributing them to the artists it represents. [ 47 ] The Act provides artists with a third option: that of negotiating collectively with respect to the minimum terms and conditions upon which the artist will provide their services, and other related matters.

In that context, the Tribunal considered that “the right to use an existing work is a service that the artist who holds the copyright in that work may provide to a producer, and representing artists’ interests in this fundamental socio-economic right is an appropriate activity for a certified artists’ association” (my emphasis): paragraph 61 of decision No. 028, cited above, as quoted in the Tribunal reasons, at paragraph 88. [ 48 ] The Tribunal concluded its lengthy quotation from decision No. 028 by pointing out that under the Act , artists retain control over the copyright in their work and contract directly with producers for the use of their works.

Artists may negotiate for a higher fee than that bargained by their representative organization, but no producer may offer an artist conditions less favourable than those agreed to in the scale agreement.

Artists receive payment directly from the producer and, in the event of a disagreement, they may enforce payment through the arbitration provisions of the scale agreement. [ 49 ] The Tribunal went on to note that it had confirmed this position in decision No. 047 cited above. [ 50 ] After reviewing the evidence, the Tribunal observed that artists’ associations have negotiated nearly 180 scale agreements since they have been certified. It noted that it has become a standard in the cultural sector that copyright matters are negotiated in scale agreements.

According to the Tribunal, it is unusual for a scale agreement between an artists’ association and a producer not to contain stipulations relating to the use of artistic works.

In the Tribunal’s view, it would be inconsistent with the purpose of the Act if scale agreements could not contain terms related to copyright. [ 51 ] The Tribunal then referred to its reasons in decisions No. 028 and No. 047 where it was pointed out that the fact that an artist’s association negotiates minimum fees for copyright licenses did not make the association the artist’s agent for the purpose of granting licenses or assignments of copyright for the artists’ works.

Artists retained the right to license the use of their works unless they had assigned their rights to a collective society, in which case, the producer would deal with the collective society. [ 52 ] The Tribunal concluded this portion of its analysis by stating that it is not up to the Tribunal to decide what parties to a bargaining relationship may bargain. Whether the National Gallery breached its duty to bargain in good faith pursuant to

section 32 of the Act ?

[53] The Tribunal began its discussion of this issue by referring to the arbitral and judicial jurisprudence on the obligation to bargainin good faith. In particular, the Tribunal relied on certain comments of the Supreme Court of Canada in Royal Oak Mines Inc. v.

Canada(Labour Relations Board), (SCC), [1996] 1 S.C.R. 369 (Royal Oak Mines), at paragraph 45: If a party proposes a clause in a collective agreement, or conversely, refuses even to discuss a basic or standard term, that is acceptableand included in other collective agreements in comparable industries throughout the country, it is appropriate for a labour board to findthat the party is not making a “reasonable effort to enter into a collective agreement”. [54] This led the Tribunal to examine the course of negotiations between the parties.

Based on its review, the Tribunal found thatminimum fees schedules and model contracts were discussed and were included in draft scale agreements from the beginning of thenegotiations. The Tribunal also found that, at the first meeting attended by the National Gallery’s new negotiating team following thedeparture of Mr. Amadei, the National Gallery tabled a proposed scale agreement from which all previous references to minimum feeshad been removed.

The Tribunal concluded that the content of the National Gallery’s proposal, the fact that it was presented withoutprior notice and without any reasonable alternatives represented an uncompromising position which the National Gallery should haveknown would be unacceptable to CARFAC/RAAV. [55] The Tribunal also concluded that, notwithstanding the National Gallery’s insistence that the parties were not at an impasse, “thefailure to negotiate or to discuss the inclusion of matters relating to copyright, including binding minimum fees in the scale agreementcreated a rigid stance resulting in the failure to conclude an agreement”: see Tribunal reasons, at paragraph 148. [56] The Tribunal found the National Gallery’s exclusive reliance on the Gowlings’ opinion, to justify its position, was evidence of itsrigid stance. [57] The Tribunal’s final conclusion on the issue of failing to bargain in good faith is found in the following three paragraphs(paragraphs 150–152) of the Tribunal reasons: The Tribunal agrees with CARFAC/RAAV that there was no reasonable expectation that the inclusion of minimum fees for the use ofartistic works in a scale agreement would have been agreed upon by the NGC.

The Tribunal further agrees with CARFAC/RAAV thatthe NGC was impasse bargaining in that there was no realistic possibility that the NGC would change its position concerning theinclusion of matters related to use of artistic works in a scale agreement. The Tribunal agrees with the principles expressed by the Supreme Court of Canada in Royal Oak Mines that putting forward such aproposal and taking a rigid stance which it should be known the other party could never accept must necessarily constitute a breach ofthe duty to bargain in good faith.

The NGC ought to have known that putting forward this revised version of the scale agreement and taking such a rigid stance would beunacceptable to CARFAC/RAAV and this in the Tribunal’s view amounts to a failure to bargain in good faith. [58] The Tribunal therefore made a declaration that the National Gallery had violated

section 32 of the Act by failing to bargain ingood faith. The Tribunal also reaffirmed the principle set out in its decisions No. 028 and No. 047 to the effect that copyright matters areappropriate for collective bargaining “while respecting the rights of the copyright collectives such as SODRAC” [at paragraph 170]. STATEMENT OF ISSUES [59] The National Gallery identified three issues arising from the Tribunal’s decision: 1. Did the Tribunal err in law and exceed its jurisdiction or refuse to exercise its discretion in declaring that copyright could be thesubject matter of a scale agreement under the Act? 2.

Did the Tribunal err in fact and in law in concluding that the National Gallery had not negotiated in good faith? 3. What is the appropriate standard of review for each of these questions? [60] The intervener SODRAC [Society for Reproduction Rights of Authors, Composers and Publishers in Canada] purported to takeno position as between the parties, insisting only that if the Tribunal’s order is maintained, the reservation with respect to the rights ofcollective societies should be maintained. [61] In my view, the first issue is the standard of review.

The next issue to be considered is whether the Tribunal’s finding that theNational Gallery failed to bargain in good faith can be supported on the appropriate standard of review. I believe that this issue should beconsidered first because that is the determination which the National Gallery is challenging. The question of the

interpretation of theexpressions “provision of … services” and “prestations de services” arises only because the National Gallery has raised it as a defence tocomplaint that it has failed to bargain in good faith. ANALYSIS Standard of Review [62] The National Gallery argues that since the

interpretation of “provision of … services” or “prestations de services” raises“[q]uestions regarding the jurisdictional lines between two or more competing specialized tribunals” i.e. the Tribunal and the CopyrightBoard, it should be reviewed on the correctness standard, as provided at paragraph 61 of Dunsmuir v. New Brunswick, 2008 SCC 9,[2008] 1 S.C.R. 190 (Dunsmuir). [63] With respect to the Tribunal’s finding that the National Gallery had failed to bargain in good faith, the latter argues that theTribunal’s errors in the assessment of the evidence make the decision unreasonable.

[ 64 ] In my view, the

interpretation of the phrase “provision of … services” raises no jurisdictional conflict. CARFAC/RAAV do not purport to be collective societies. They do not hold themselves out as granting licences to copyright nor as collecting fees with respect to the use of works in which copyright subsists. The draft scale agreements, as well as the model contracts, all make it clear that the artists alone determine whether a licence is to be granted to a producer.

CARFAC/RAAV simply bargain with producers with a view to ensuring that, if a licence is granted, the producer may not pay less for that licence than the minimum fee set out in the scale agreement, though the artist may bargain for more. [ 65 ] The National Gallery’s position on this issue rests on a mischaracterization of the content of the agreements which its representatives were engaged in negotiating prior to its change in position. [ 66 ] That said, the question remains as to whether the “provision of … services” includes authorizing others to do that which the holder of the copyright has the exclusive right to do. [ 67 ] This is a question of law which must be decided by a tribunal in the course of construing its home statute.

As the Supreme Court indicated in Dunsmuir , cited above, and in a number of cases since ( Smith v. Alliance Pipeline Ltd. , 2011 SCC 7 , [2011] 1 S.C.R. 160, at paragraph 28 , and Celgene Corp. v. Canada (Attorney General) , 2011 SCC 1 , [2011] 1 S.C.R. 3 at paragraph 34 , to name but two), the decision of a tribunal interpreting its home statute will normally be reviewable on the standard of reasonableness. See also the majority reasons in Alberta (Information and Privacy Commissioner) v.

Alberta Teachers’ Association , 2011 SCC 61 , [2011] 3 S.C.R. 654 ( Alberta Teachers’ Association ). [ 68 ] Even without the benefit of this jurisprudence, the standard of review analysis leads to the same conclusion. The Tribunal is a specialized tribunal charged with administering a labour relations scheme governing relations between artists and producers in the federal sphere. The decisions of the Tribunal are protected by a strong privative clause (

section 21 of the Act ) which is substantially the same as the privative clauses found in the Public Service Labour Relations Act , S.C. 2003, c. 22, s. 2 , at

section 51 , and the Canada Labour Code , R.S.C., 1985, c. L-2, at

section 22 . Finally, the decisions of the Tribunal have a strong policy component, given the guiding principles set out in sections 2 and 3 of the Act. All of these factors support the conclusion that the standard of review of the Tribunal’s

interpretation of the phrase “provision of … services” is reasonableness. [ 69 ] As for the finding that the National Gallery failed to bargain in good faith, the application of a legal standard to a set of facts is a question of mixed fact and law. In this case, the Tribunal identified the legal test for bargaining in good faith and applied it to the course of bargaining between the parties. The National Gallery did not identify an extricable question of law, focusing instead on the Tribunal’s weighing of the evidence.

The standard of review of a question of mixed fact and law in this context is reasonableness: see Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council , 2010 SCC 43 , [2010] 2 S.C.R. 650, at paragraph 78 . Is the Tribunal’s decision that the National Gallery failed to bargain in good faith reasonable? [ 70 ] The statutory basis for the obligation to bargain in good faith is found in

section 32 of the Act set out earlier in these reasons. As pointed above, the Act directs the Tribunal to have regard for the applicable principles of labour law. In addressing the question of whether the National Gallery bargained in good faith, the applicable principles of labour law include the jurisprudence which deals with bargaining in good faith. [ 71 ] As the lengthy exposition of the facts shows, the National Gallery engaged in negotiations with CARFAC/RAAV over a period of four years in the course of which minimum fees were always on the table.

Whatever reservations the National Gallery may have had about its obligations, it did, in fact, bargain with respect to minimum fees. This is apparent from the portions of the draft scale agreements reproduced earlier in these reasons as well as the draft model contracts.

This continued until October 30, 2007, when the National Gallery’s new bargaining team presented the Gowlings’ legal opinion and resiled from its earlier positions on minimum fees. [ 72 ] The Tribunal’s critical findings of fact on the issue of bargaining in good faith are found at paragraphs 145–148 of its decision: The evidence presented to the Tribunal however also demonstrates that minimum copyright fees and draft contracts related to the use of artistic works were part of the discussions and included in the draft scale agreements since the beginning of negotiations.

The revised draft scale agreement presented to CARFAC/RAAV on October 30, 2007 removed all the matters related to the use of copyright works which CARFAC/RAAV was mandated by its members to negotiate within the parameters of the Act . The content and the manner in which the NGC presented the revised draft to CARFAC/RAAV without prior notice, without reasonable alternatives, in the Tribunal’s view was an uncompromising position that the NGC should have known would be unacceptable to CARFAC/RAAV.

The Tribunal finds that although the NGC insisted the parties were not at an impasse and there were still issues to be negotiated, the failure to negotiate or to discuss the inclusion of matters related to copyright, including binding minimum fees in the scale agreement created a rigid stance resulting in the failure to conclude an agreement. [ 73 ] The observation that the National Gallery should have known that its position would be unacceptable to CARFAC/RAAV is a reference to the decision of the Supreme Court of Canada in Royal Oak Mines , cited above, in which the issue of bargaining in bad faith was explored.

The Tribunal took particular note of the Supreme Court’s position that “putting forward a proposal, or taking a rigid stance which it should be known the other party could never accept must necessarily constitute a breach of that requirement [to bargain in good faith]”: see Royal Oak Mines , at paragraph 43. In the same decision, the Supreme Court also noted that the conduct of bargaining must be assessed objectively, that is, by reference to the practice in the industry.

This gives weight to the Tribunal’s comments, at paragraph 99 of the Tribunal reasons, that “[i]t has become a standard in the cultural sector that these matters [matters related to copyright and fees] are included in scale agreements.” [ 74 ] The Tribunal saw the National Gallery’s reliance upon the Gowlings’ opinion as evidence of its rigid stance. The Tribunal may have been influenced by the fact that the Gowlings’ opinion was the fourth opinion which the National Gallery had received on this

subject, and that it came from the National Gallery’s chief negotiator’s own firm. The Tribunal’s use of the phrase “rigid stance” is another reference to paragraph 43 of the Supreme Court’s decision in Royal Oak Mines , cited above, where the taking of a rigid stance is found to be incompatible with the obligation to make every reasonable effort to conclude a collective agreement. [ 75 ] The Tribunal’s position, it seems to me, can be summarized as follows. Having agreed to negotiate minimum fees for the use of existing works, the National Gallery could not refuse to continue to do so.

This conclusion flows from the jurisprudence cited by the Tribunal and from its findings of fact. This conclusion does not turn on whether CARFAC/RAAV’s certification orders gave them the right to negotiate minimum fees, or, as a result, whether the National Gallery could be compelled to negotiate minimum fees. Whether it could be compelled to do so or not, the National Gallery agreed to negotiate minimum fees.

Once it agreed to do so, and did so for four years, the National Gallery could not refuse, in good faith, to continue those negotiations for the reasons which it gave. [ 76 ] In light of the Tribunal’s findings of fact, which in my view are not open to challenge on any standard of review, and the jurisprudence on which it relied, the Tribunal’s conclusion that the National Gallery had failed to bargain in good faith was reasonable, as that term has been used in Dunsmuir , cited above, at paragraph 61.

The decision and the Tribunal’s reasoning process are justifiable, transparent (in the sense that there are no unexplained leaps in logic), and intelligible. Furthermore, “the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law”: Dunsmuir , cited above, at paragraph 47.

Is the Tribunal’s conclusion that the National Gallery failed to bargain in good faith based on an error of law? [ 77 ] The error of law alleged by the National Gallery is that matters related to copyright and minimum fees for the use of existing works of art do not comprise “services” as that term is used in the definition of “scale agreement” in the Act and, for that reason, fall outside CARFAC/RAAV’s mandate. For the reasons given above, I do not believe that this issue affects the outcome of the analysis as to whether the National Gallery negotiated in good faith.

However, if negotiations are to resume, the parties may benefit from greater certainty on this issue. [ 78 ] The National Gallery objects to the Tribunal’s conclusion that it failed to bargain in good faith, saying that it is based on an error of law, namely that the definition of “scale agreement” and, in particular, the phrase “provision of … services” or “ prestations de services ” do not include copyright-related issues because copyright is property and not services and therefore, these matters fall outside the scope of a scale agreement.

It follows that the National Gallery cannot be found to have bargained in bad faith for refusing to discuss something which CARFAC/RAAV did not have the authority to bargain. [ 79 ] The National Gallery seeks to bolster this argument by raising questions related to the provisions of the Copyright Act , and an alleged conflict between it and the Act . [ 80 ] The National Gallery’s position on “provision of artists’ services” is based on the performing arts model, where a producer and an association can negotiate a minimum fee for a performance, which is clearly a service.

I acknowledge that the French version of the Act which uses the phrase “ prestations de services ” is consistent with this view of the meaning to be given to the phrase. Contrasting this type of service to that of licensing existing works, the National Gallery argues that since copyright is a form of property, transactions involving copyright are not contracts for the provision of services but rather contracts involving property or goods, or so the argument goes. [ 81 ] There are two interrelated questions here. What is the service and who provides it?

The Tribunal has been clear, decision No. 028, that the artist is the provider of services and that the services include granting others the right to use works in which the artist holds the copyright. Representative associations simply negotiate some of the terms on which those services will be provided.

This is clear from the following passage from decision No. 28 (cited above, at paragraphs 61–62): In the Tribunal’s view, the right to use an existing work is a service that the artist who holds the copyright in that work may provide to a producer, and representing artists’ interests in this fundamental socio-economic right is an appropriate activity for a certified artists’ association.

As an example, the artists’ association may seek to negotiate with a producer provisions regarding the minimum fee to be offered to an artist in the sector for the use of one of his or her works in a new medium or as the basis for an adaptation. Under the Status of the Artist Act regime, artists retain control over the decision whether to accept a commission from a producer or to allow a particular producer to use one of their works.

The artist remains free to negotiate individual contracts above the minimum, but no producer may offer less than the terms set out in the scale agreement to which the producer and the artists’ association have agreed.

For the use of the work, the artist receives, directly from the producer, either the remuneration prescribed by the scale agreement or whatever greater amount the artist has been able to negotiate. [ 82 ] The Tribunal came to this conclusion on the basis of a textual and contextual analysis of the whole of the Act , as reflected in paragraphs 57 and 58 of decision No. 28: In the Tribunal’s view, the Status of the Artist Act was intended to complement and supplement the regime provided in the Copyright Act .

It is intended to do so by providing artists with an additional mechanism to obtain compensation for their work, thereby enhancing and promoting artists’ freedom of choice as to how they will exploit the fruits of their creative talents. The statute must be given an

interpretation that will fulfill Parliament’s intention of improving the socio-economic status of artists in Canada. The Act mandates certified artists’ associations to represent the socio-economic interests of artists. It follows, therefore, that any exclusions from the collective bargaining regime that Parliament has provided to self-employed artists would have to be clearly articulated in the Act . Parliament did not expressly exclude matters related to copyright from the ambit of collective bargaining.

Indeed the Act contains no express limitation on an artists’ associations’ right to bargain with producers about any matters affecting the socio- economic interests of its members. This is consistent with Canadian labour law generally, in which the duty to bargain has been held to encompass any subject matter the parties consent to include in a collective agreement. [ 83 ] There is nothing surprising in the finding that granting a licence to use a work is a service provided by an artist to a producer.

The fact that copyright is property does not preclude a finding that granting another the right to use that property is a service. One need only

think of hotels and car rental agencies as examples of property owners who provide a service by allowing others to use their property. Thus, the granting of a licence is a service provided by the artist, as contemplated by the definition of “scale agreement”. [ 84 ] Nor is there anything unusual about the fact that representative organizations seek to negotiate the minimum fees and conditions upon which their members will provide services, including licenses to use existing works. The definition of “scale agreement” specifically refers to minimum terms and conditions.

Surely, fees are either a term or a condition which an artist may attach to the grant of a licence. The terms of the model contracts quoted above show that fees are indeed one of the terms of the licence granted by the artist. [ 85 ] The fact that a representative organization negotiates minimum fees does not make it the agent of the artist for the purpose of granting licences. In the present case, the terms of the draft scale agreements and the model contracts make it clear that no fees are payable unless an artist grants the National Gallery a licence to use his or her work in a specified way.

The setting of fees is not one of the matters which are specifically and exclusively reserved to the artist in

section 3 of the Copyright Act and is therefore not a matter referred to in subsection 13(4) of that Act . The National Gallery’s argument on this issue is based on a mischaracterization of the very agreements which it negotiated for four years. [ 86 ] All of this leads to the conclusion that the Tribunal’s decision on the

interpretation of “provision of … services” is reasonable. The Tribunal’s reasoning is intelligible, is internally consistent and is within the range of possible outcomes, having regard to the facts and the law. The law, in this context, includes the jurisprudence according to which an expert tribunal interpreting its home statute is entitled to deference: see Alberta Teachers’ Association , cited above, at paragraph 39. The fact that a decision is reasonable does not mean that reasonable people could not come to another conclusion. It simply means that if the Tribunal has chosen one reasonable

interpretation out of a number of equally reasonable

interpretations, its choice is entitled to be respected by the Court. [ 87 ] I conclude by pointing out that the

interpretation given to the expression “provision of … services” by the Tribunal does not create a conflict between the Act and the Copyright Act . The draft scale agreements and the model agreements as well, contemplate that only the artist has the right to grant licences to use his or her work. If the artist has assigned his or her rights to a collective society, then that artist cannot contract with the National Gallery with respect to rights which he or she no longer has. The National Gallery must be able to know which artists it can contract with and which it cannot.

These are practical problems for which there are practical solutions. They are not a reason for depriving the Act its full scope. CONCLUSION [ 88 ] For the reasons set out above, I would dismiss the application for judicial review with costs to the respondent Canadian Artists’ Representation/Front des artistes canadiens and Regroupement des artistes en arts visuels du Québec.

No costs are awarded to or against the intervener Society for Reproduction Rights of Authors, Composers and Publishers in Canada. * * * The following are the reasons for judgment rendered in English by [ 89 ] Noël J.A .: I have read the reasons of my colleague, and with respect, I have reached the opposite conclusion. The issue in this case is whether the National Gallery’s refusal to negotiate a scale agreement pertaining to matters relating to copyright—specifically minimum fees with respect to the use of existing works—can support the Tribunal’s finding that it failed to bargain in good faith.

In my view it cannot as the Tribunal had no authority to compel such negotiations, let alone deal with them. Labour law principles do not alter this limitation. The fact that the National Gallery came to this realization when the parties were well into the bargaining process is of no consequence as jurisdiction cannot be conferred by consent.

The finding by my colleague that the director of the National Gallery acted with “evasiveness” is not one that was made by the Tribunal and I do not believe that his letter alerting CARFAC/RAAV to the fact that some of the issues being negotiated may not be within “the [National Gallery]’s authority” (appeal book, Vol. 15, at page 2839), warrants such a label.

Furthermore, the National Gallery formalized its bargaining position on October 30, 2007—not on January 29, 2008—(Tribunal reasons, at paragraph 146) and based on the Tribunal’s own words, it is the rigid stance taken by the National Gallery from that juncture onwards that “amounts to a failure to bargain in good faith” (Tribunal reasons, at paragraph 152).

BACKGROUND [ 90 ] The Tribunal assumed jurisdiction to approve a “scale agreement” involving rights assigned by copyright holders to CARFAC/RAAV on the basis that these assignments constitute a “provision of … services” within the meaning of the definition of “scale agreement” in

section 5 of the Act . However, the Tribunal made it clear that its decision does not bind collective societies to which such rights have previously been assigned under the Copyright Act (Tribunal reasons, at paragraph 104). [ 91 ] This concession is the only reason why SODRAC, in its capacity of intervener, takes the position that it can live with the decision of the Tribunal (SODRAC’s memorandum, at paragraphs 6, 8, 9, 14, 15, 16, 28, 29 and 82).

However, the comprehensive arguments that it has brought forth make it clear that the decision of the Tribunal, insofar as it remains applicable to copyrights held by unrepresented artists, cannot stand. ANALYSIS AND DECISION [ 92 ] The question that must be answered is the one posed by SODRAC, at paragraph 78 of its memorandum: [translation ] [Can] provisions dealing solely with the use of a work that is not the result of a provision of services [be included] in the scale agreement, [as defined in

section 5 ]? [ 93 ] The question so raised is one of statutory construction. In this respect it is useful to recall that there is only one applicable

principle: “the words of

an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with thescheme of the Act, the object of the Act, and the intention of Parliament” (Elmer Driedger, Construction of Statutes (2nd ed. 1983) atpage 87, as cited in R. v. Hydro-Québec, (SCC), [1997] 3 S.C.R. 213; Royal Bank of Canada v. Sparrow ElectricCorp., (SCC), [1997] 1 S.C.R. 411; Verdun v. Toronto-Dominion Bank, (SCC), [1996] 3 S.C.R. 550;Friesen v. Canada, (SCC), [1995] 3 S.C.R. 103). [94] My colleague has assessed the decision of the Tribunal on this question on a standard of reasonableness.

However, given that theTribunal’s finding of bad faith is premised on the assumption that the matters being negotiated were matters which CARFAC/RAAVwere mandated to negotiate “within the parameters of the Act” (Tribunal reasons, at paragraph 146), it is clear that the Tribunal’s findingof bad faith cannot stand if the National Gallery correctly asserts that these matters were outside these parameters. [95] As SODRAC explains, this is the first time that the Tribunal has ruled at the negotiation stage (as opposed to the certificationstage) on a scale agreement pertaining to pre-existing works,—i.e. works which are not the result of a provision of services by an artistfor a producer—(SODRAC’s memorandum, at paragraph 34).

In asserting that the Act applies in this context, CARFAC/RAAV rely onthe judgment of the Supreme Court in Desputeaux v. Éditions Chouette (1987) inc., 2003 SCC 17, [2003] 1 S.C.R. 178 and the so-called“quasi-constitutional” nature of the Act to argue that it applies despite the obvious conflicts with the Copyright Act which this can entail(CARFAC/RAAV’s memorandum, at paragraph 54): Although Desputeaux arises out of a different context, it still affirms that there is nothing peculiar about the Copyright Act whichinsulates it from the impact of other legislation.

To the contrary, the legislative scheme enacted by Parliament contemplates that suchmatters will be the subject of bargaining in spite of the Copyright Act. [My emphasis.] [96] Neither the Supreme Court in Desputeaux nor the statute at issue in that case, recognize an artist’s association’s right to interferein transactions affecting copyrights held by its members.

However, that decision does highlight the distinction that exists in the world ofartistic creation between agreements pertaining to existing works and those dealing with commissioned works. [97] In Quebec, there are two statutes governing the professional status of artists. The one at issue in Desputeaux was the Actrespecting the professional status of artists in the visual arts, arts and crafts and literature, and their contracts with promoters, R.S.Q.,c. S-32.01 (commonly called “Bill 78”).

The other is the Act respecting the professional status and conditions of engagement ofperforming, recording and film artists, R.S.Q., c. S-32.1 (commonly called “Bill 90”). [98] In Writers Guild of Canada, R-41-94, the Commission de reconnaissance des associations d’artistes et des associations deproducteurs du Québec (the Commission) was asked to define the respective scope of these statutes (Writers Guild of Canada, at pages13‒14): [translation] In the context of Bill 90, producers retain the services of artists, on the basis of their talents, for the purpose of creatingworks with them.

Thus, when a producer retains the services of an artist, there is no work yet in existence, since the work materializesover time as various provisions of services are completed. … In the context of Bill 78, artists create their works on their own initiative; nobody retains their services for this …, this is a purelycommercial relationship, the concept of provision of services being completely absent from Bill 78, in letter and spirit. [Emphasis bySODRAC.] [99] This distinction is equally fundamental in the present case.

Where a scale agreements pertains to commissioned works (“œuvrescommandées”, to use the French phrase), no copyright is involved since the work does not exist at the time the agreement is signed.Consequently, the “provision of … services” required to realize the commissioned work and the rights of use that an artist may assignwith respect to the contemplated work do not entail any possible conflict with the Copyright Act.

I note that the provision of artists’services to produce commissioned works is a common practice in the art world, as is evidenced by Bill 90 and by the Act itself whichapplies to specified producers that “engage one or more artists to provide an artistic production” (paragraph 6(2)(

a) of the Act). [100] Conflicts with the Copyright Act only arise where one seeks to extend scale agreements to works that are created otherwise thanin the context of a commission, as the Tribunal did in this case. [101] CARFAC/RAAV argue that there is no conflict with the Copyright Act, since the Tribunal only intended to impose [translation]“minimum standards” in the form of mandatory royalties (CARFAC/RAAV’s memorandum, at paragraphs 16 and 49). I agree withSODRAC when it says that any mandatory royalty, even a minimum one, is central to copyright (SODRAC’s memorandum, atparagraph 46).

Requiring artists to charge a minimum royalty for the use of their work bares consequences which are as significant asimposing any royalty since it means that the artists concerned cannot ask for less, even if this is the

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