is a landmark case of the

Supreme Court of Canada The Supreme Court of Canada (SCC; french: Cour suprême du Canada, CSC) is the Supreme court, highest court in the Court system of Canada, judicial system of Canada. It comprises List of Justices of the Supreme Court of Canada, nine justices, wh ...

on the nature of

bargaining In the social sciences, bargaining or haggling is a type of negotiation in which the buyer and seller of a good or service debate the price or nature of a transaction. If the bargaining produces agreement on terms, the transaction takes plac ...

good faith In human interactions, good faith ( la, bona fides) is a sincere intention to be fair, open, and honest, regardless of the outcome of the interaction. Some Latin phrases have lost their literal meaning over centuries, but that is not the case ...

. It also has an effect on the nature of negotiations for

royalties A royalty payment is a payment made by one party to another that owns a particular asset, for the right to ongoing use of that asset. Royalties are typically agreed upon as a percentage of gross or net revenues derived from the use of an asset o ...

that may be due to artists under Canada's '' Copyright Act''.

Background

Exhibition rights under Canadian copyright law

In 1988, the ''Copyright Act'' was amended to provide for an exhibition right "to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan." Such fees were to be negotiated directly with individual copyright holders or their authorized agents.

''Status of the Artist Act''

In 1992, the

Parliament of Canada The Parliament of Canada (french: Parlement du Canada) is the federal legislature of Canada, seated at Parliament Hill in Ottawa, and is composed of three parts: the King, the Senate, and the House of Commons. By constitutional convention, the ...

passed the ''Status of the Artist Act'' ("''SAA''"), which provided for Canadian artists to be represented by recognized professional associations in negotiating terms of compensation on their behalf with federal "producers" who commission artists' services. Accordingly, Canadian Artists' Representation ("CARFAC") an
''Regroupement des artistes en arts visuels du Québec''
("RAAV") have been recognized with respect to rights relating to visual artists.

The case at hand

In 2003, CARFAC and RAAV commenced negotiations with the National Gallery of Canada ("NGC") in order to establish a scale agreement under the ''SAA''. They sought to include minimum fees for the use of existing works of visual artists. The NGC expressed reservations and stated that they wished to receive legal advice on that issue, but over the next four years proceeded to draft an agreement that included such works. In 2007, the NGC, obtained a legal opinion upon which it relied to state that CARFAC/RAAV did not have the authority to negotiate for such fees, as it did not have written authorization from each artist covered by the agreement. On that basis, the NGC presented a revised draft scale agreement from which all references to existing works were removed. After trying to negotiate further, CARFAC and RAAV filed a complaint with the Canadian Artists and Producers Professional Relations Tribunal that the NGC had breached s. 32 of the ''SAA'' by failing to bargain in good faith.

The tribunal and court below

Canadian Artists and Producers Professional Relations Tribunal

The Tribunal found in favour of CARFAC and RAAV, ruling that: :* previous decisions by the Tribunal had recognized that scale agreements can include minimum fees for the use of existing works, and inclusion of copyright matters has become standard in the cultural sector; :* the ''SAA'' complements and supplements the ''Copyright Act'', and that artists' associations can negotiate scale agreements under the ''SAA'' provided that those agreements do not bind collective societies established under the ''Copyright Act''; :* under ''Royal Oak Mines'', the Supreme Court of Canada stated that if a party proposes a clause in a collective agreement, or conversely, refuses even to discuss a basic or standard term, that is acceptable and included in other collective agreements in comparable industries throughout the country, a labour board may find that the party is not making "every reasonable effort to enter into a collective agreement". :* NGC had violated s. 32 of the ''SAA'' by failing to bargain in good faith; and :* NGC was ordered to comply with the ''SAA'', establish a bargaining schedule with CARFAC/RAAV and provide monthly reports to the Tribunal.

Federal Court of Appeal

In a 2-1 decision, the Tribunal's order was set aside. In the majority ruling Noël JA stated: :* neither the Supreme Court in ''Desputeaux'' nor the ''Copyright Act'' recognize an artist association's right to interfere in transactions affecting copyrights held by its members; :* the Tribunal distorted the words used by Parliament, by asserting that the assignment of a copyright is a "provision of artists' services" under the ''SAA''; and :* in consequence, matters relating to copyright do not fall under the ''SAA'', and the Tribunal had no authority to compel the parties to negotiate such matters, so the NGC could not be said to be failing to negotiate in good faith. In dissent, Pelletier JA argued that granting a producer the right to use an existing work was similar to the service provided by hotels and car rental agencies by allowing others to use their property, and therefore the Tribunal's interpretation of "provision of services" was reasonable. Because scale agreements do not apply to works for which the copyright has been assigned to a collective society, but rather only where the artist alone has the right to grant licences to use his or her work, there was no conflict between the two Acts. Applying ''Royal Oak Mines'', he concluded that an objective assessment supported the Tribunal's finding that the NGC had negotiated in bad faith.

At the Supreme Court

Immediate decision

In a rare move, judgment was given immediately after the hearing. McLachlin CJ declared:

Reasons given

In a unanimous decision,

Rothstein J Marshall Rothstein (born December 25, 1940) is a former Puisne Justice of the Supreme Court of Canada. Early life Born in Winnipeg, Manitoba, to Jewish parents who immigrated from Eastern Europe, he received a Bachelor of Commerce in 1962 and a ...

held that: :* where a tribunal is interpreting its home statute or statutes closely connected to its function, courts must interpret the question of jurisdiction narrowly; :* the Tribunal's conclusion that the "provision of artists' services" includes assigning or licensing a copyright was reasonable, and the two Acts in question do not conflict; and :* the Tribunal's finding of fact that the NGC failed to bargain in good faith was not unreasonable, and, under '' Khosa'', it was not for courts to reweigh the evidence considered by it.

Impact

Following the initial decision, the National Gallery issued a press release, announcing: Before the Supreme Court issued its ruling, concern was expressed as to whether the parties would have fared better if they had continued negotiations, as well as pointing out that a ruling in CARFAC/RAAV's favour would be expensive for the NGC and other galleries across the country. As well, it will also have serious implications for more obscure artists who may want to waive their minimum fee and negotiate freely with the gallery.