Rogers, Telus, Bell and Quebecor Media (the Corporations) started an action seeking to recover certain monies paid pursuant to Tariff 24 in relation to ringtones. SOCAN counterclaimed for certain ringtone royalties. The parties had asked for a preliminary determination of six questions (decision here; summary here). On appeal, both the Corporations' appeal and SOCAN's appeal were allowed in part.
Tariff 24 authorized SOCAN to collect royalties on the download of ringtones on the basis that they constituted communication to the public. The decision to certify the tariff was judicially reviewed, and upheld, eventually the Supreme Court of Canada (SCC) denied leave. A second Tariff was certified when the first one expired. That decision was not judicially reviewed.
In separate proceedings, the Copyright Board certified Tariff 22.A to 22.G, which set the various royalties to be paid when various media containing musical works is downloaded or streamed over the internet or a mobile network. The SCC heard judicial reviews of the decisions to certify these tariffs, and held that downloading video games containing musical works did not constitute a communication, and more generally, musical works are not communicated by telecommunication when they are downloaded. As a result of this decision, SOCAN returned the royalties it had collected from the Corporations under these tariffs.
The Corporations decided that the Supreme Court decisions rendered Tariff 24 without legal foundation and stopped making payments. The Corporations brought an application to vary the Board's Tariff 24 certification, but the Board denied this application, holding that it was properly characterized as an application to rescind the certification decision. The Board concluded its power to vary did not include the power to rescind. The within action followed.
As the preliminary order regarding the questions to be answered was issued pursuant to Rule 220(1)(a), which only authorizes the determination of questions of law, the FCA held that the standard of review is correctness. However, the Court declined to consider the correctness of any of the Trial Judge's answers to questions that did not raise pure questions of law.
In considering the preliminary questions on appeal, the FCA held that even if the Board can overturn its own decisions, it cannot overturn court decisions; thus, the FCA's previous determination relating to Tariff 24 is final and issue estoppelapplies. However whether that issue estoppel bars the present claim should be decided by the trial judge.
The FCA held that the Judge had made no error in determining that the Board had jurisdiction to certify Tariff 24. The FCA further held that the judge should not have determined the questions of unjust enrichment, and whether the Corporations are entitled to a tracing order with respect to the royalties as they are not pure questions of law. They should be determined by the trial judge.