The Supreme Court of Canada established a new category of cases to which the correctness standard of review applies

Administrative law – Decisions reviewed – Copyright Board – Judicial review – Statutory powers – Legislative compliance – Jurisdictional questions – Standard of review – Correctness

Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Assn., [2022] S.C.J. No. 30, 2022 SCC 30, Supreme Court of Canada, July 15, 2022, R. Wagner C.J. and M.J. Moldaver, A. Karakatsanis, S. Côté, R. Brown, M. Rowe, S.L. Martin, N. Kasirer and M. Jamal JJ.

The underlying substantive question at issue was the proper interpretation of the Copyright Act, R.S.C. 1985, c. C-42, s. 2.4(1.1). Specifically, at issue was whether s. 2.4(1.1) required users to pay two royalties to access works online: one royalty when a work is made available, and a second royalty when the work is actually streamed.

The Copyright Board of Canada concluded that the act of making a work available, and the subsequent accessing of the work by a user for streaming, attracted two royalties.

The Federal Court of Appeal quashed the Board’s decision, finding that the Board unreasonably placed too much weight on Canada’s obligations under the WIPO Copyright Treaty. The Court held that the Board ought to have instead focused on the statutory language of the Copyright Act.

The Supreme Court of Canada held that the making available of a stream and a stream by a user are protected as a single performance, attracting one royalty. A work is performed as soon as it is made available for on-demand streaming, at which point a royalty is payable. If a user later experiences this performance by streaming the work, that user is experiencing an already ongoing performance, not starting a new one.

In reaching its decision, the majority of the Supreme Court of Canada held that the standard of review applicable to the Board’s decision is correctness.

Prior to the Court’s decision in Vavilov, the courts applied the correctness standard of review to the Board’s decisions on the scope of rights under the Copyright Act. Because Vavilov overtook prior jurisprudence, the Court needed to reconsider the appropriate standard of review in light of Vavilov.

The majority considered that, in Vavilov, the Court had recognized five categories of cases that attracted a correctness standard of review; those involving “ … legislated standards of review, statutory appeal mechanisms, constitutional questions, general questions of law of central importance to the legal system as a whole, and questions related to the jurisdictional boundaries between two or more administrative bodies … ” (para.  26). The Court further considered that Vavilov left open the possibility that other categories of cases could be recognized as attracting a correctness standard of review “[i]n rare and exceptional circumstances … when applying reasonableness would undermine legislative intention or the rule of law in a manner analogous to the five categories discussed in Vavilov …” (para. 27).

The majority held that a sixth category of cases attracting a correctness standard of review exists; cases in which the legislature has conferred concurrent first instance jurisdiction over a legal issue in a statute to both the courts and an administrative body.

The majority held that applying a correctness standard of review to this category of cases gives effect to legislative intent and promotes the rule of law. By conferring concurrent first instance jurisdiction to courts and administrative bodies, the legislature expressly involves the courts and, accordingly, can be taken to have intended to subject those decisions to appellate standards of review. The application of the correctness standard of review in these circumstances also accords with the rule of law. If reasonableness were applied, the same legal issue could be subject to two different standards of review depending on whether the question arose before the Board or the Court. Allowing for different standards of review could lead to inconsistent statutory interpretations.

This case was digested by Emilie LeDuc, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Emilie LeDuc at eleduc@harpergrey.com.

To stay current with the new case law and emerging legal issues in this area, subscribe here.