Keatley Surveying Ltd. v. Teranet Inc.

Ontario Superior Court of Justice, Belobaba J.

May 6, 2016

131 O.R. (3d) 703 | 2016 ONSC 1717

Counsel: Luciana Brasil and Garth Myers, for representative plaintiff. Paul Morrison, Barry Sookman, Julie Parla, Shane D'Souza and Paul Davis, for defendant Teranet.

[1] BELOBABA J.: — This long-running copyright dispute between land surveyors and the private sector company that manages the province's electronic land registry system is finally before the court for a decision on the merits. The land surveyors' class action, filed in 2007, was certified on appeal in 2015. [^1] Both sides now move for summary judgment on the common issues.

Background

[2] The background facts were set out in full in the certification decisions of the motion judge, the Divisional Court and the Court of Appeal and will not be repeated here. [^2] The backdrop in brief is this.

[3] The defendant, Teranet, manages Ontario's electronic land registry system. Documents prepared by land surveyors, including drawings, maps, charts and plans ("plans of survey") are registered in the electronic land registry system ("ELRS"). Teranet provides online copies of registered plans of survey to members of the public for a fee prescribed by statute but pays no fees or royalties to the land surveyors who prepared the plans of survey.

[4] The plaintiff, Keatley Surveying, brings this class proceeding on behalf of the approximately 350 land surveyors in private practice in Ontario whose land surveys were scanned and copied into Teranet's digital database and made available online. The plaintiff says by copying and selling their plans of survey online, Teranet is in breach of copyright and is unlawfully appropriating for itself the benefit of the class members' professional land survey work.

Before the ELRS

[5] Before the creation of the electronic land registration system, land surveyors, retained and paid by their client, registered or deposited the completed plan of survey at the land registry office. The government registry office provided copies to members of the public or other surveyors for a fee. When copies were made, no further fees or royalties were paid to the surveyors by the province.

[6] The province's right to make copies of the plans of survey is set out in the applicable property statutes. Section 50(3) of the Registry Act [^3] and s. 165(1) of the Land Titles Act [^4] both provide that all plans of survey submitted for deposit or registration at a land registry office become "the property of the Crown". This does not necessarily mean that the copyright, which is a form or property, [^5] is also being transferred to the Crown. It is well established that the transfer of the ownership or property in a document does not necessarily affect the ownership of the copyright in the document. [^6]

[7] Here, however, other related provisions deal directly with this point. Section 15(4) of the Registry Act specifically requires that registered surveys shall be copied, computerized and distributed to the public for a fee. [^7] A parallel section in the Land Titles Act, s. 165(4)(b), similarly imposes a statutory obligation on the province to make and sell copies of the plans of survey. This section also authorizes the distribution of a computerized copy of the plan to the public for a fee. [^8] The statutory prescription and authorization for copying the plans of survey strongly suggests a legislative intention that "property of the Crown" as used in these statutory provisions includes copyright. [^9]

[8] It is also important to note that in a Regulation passed pursuant to the Registry Act, "[a] plan [of survey] shall . . . not include any notes, words or symbols that indicate that the right to make or distribute copies is in any way restricted". In other words, the plans of survey may be copied and sold to the public and no markings may be added to these documents to indicate otherwise. [^10]

[9] In my view, these statutory provisions make clear that when plans of survey are registered or deposited at the land registry office, the province takes ownership of the property in these works which includes the right to make copies.

[10] It is interesting to note that this is the reality that has always been understood and accepted by the land surveyors. The Association of Ontario Land Surveyors (the "AOLS") has noted routinely in its bulletins that surveyors do not retain copyright in the plans of survey once they are registered or deposited at the land registry office:

Proper subjects of copyright are all plans and reports prepared by a surveyor with the exception of those plans prepared under instructions from the Crown and plans prepared for registration or deposit in a Registry Office. [^11]

[11] In sum, under the paper-based land registration system, land surveyors understood and accepted (even if they had no direct knowledge of the statutory provisions that made this clear) that the province had the right to copy and sell the plans of survey once they were registered or deposited at the land registry office.

[12] So what was it about the ELRS that changed this understanding and acceptance?

The Public-Private Partnership

[13] In 1991, the Ontario government entered into a public-private partnership with Teranet (a private sector company) to undertake the automation and conversion of the paper-based land registration system into an electronic (online) title system. Millions of documents, including plans of survey registered and deposited at the land registry offices, were scanned into a digitized database. The ELRS was finally completed in October 2010.

[14] Teranet provides two online service portals, Teraview and GeoWarehouse, through which licensed users can access the ELRS. Users of these two portals can search and obtain copies of real property records, including plans of survey. Accessing plans of survey through either Teraview or GeoWarehouse requires the payment of statutorily prescribed fees.

[15] Many surveyors were consulted and some actually participated in the development of the ELRS, both individually and through the AOLS. A significant number of surveyors make use of the Teranet portals to obtain plans of survey — 73 of the 350 class members hold active Teraview licences, and 22 surveying firms, including the two largest surveying firms in Ontario, hold active GeoWarehouse licences.

The Class Members' Complaint

[16] Class counsel says that the land surveyors are not opposed to the modernization or even privatization of the province's land registry system. The land surveyors themselves acknowledge that they took a lead role in advocating a fully electronic and remotely accessible system.

[17] The class members' complaint is that a for-profit third party "[has] inserted itself between the government and users of land registration services and reaps substantial profits at the expense of class members".

[18] In other words, the complaint is not about the ELRS per se, but the fact that the province has delegated or out-sourced the operation and management of the online system to a third party for-profit company that is authorized to make and sell copies of the plans of survey for a fee "at the expense of the class members".

[19] But, as I have just noted, the surveyors did not complain about copyright infringement under the paper-based system and, in all likelihood, would not have complained about copyright infringement if the province itself had established and operated the ELRS. It is the public-private partnership genesis of the online system and the "insertion" of a for-profit third party that is the basis of the complaint and the impetus for this class action.

The Province had Every Right to Do what it Did

[20] The province could have financed and established an electronic land registration system on its own. But for various reasons, including no doubt the enormous cost of doing so, the province chose to develop the ELRS by way of a public-private partnership. The significant financial investment made by the private sector partner would obviously be recovered by way of fees charged to the public. [^12]

[21] The out-sourcing of the operation of the ELRS to Teranet under the public-private partnership arrangement was supported by duly enacted legislation [^13] and valid licensing agreements. [^14] The fees that Teranet can charge are all statutorily prescribed. [^15] As noted by the Court of Appeal, "Teranet now manages Ontario's electronic land registry system as a service provider to the government." [^16]

[22] In short, there is nothing legislatively or contractually deficient about the establishment and operation of the ELRS.

[23] I can now turn to the common issues.

The Common Issues

[24] The parties' cross-motions for summary judgment ask that the following certified common issues be answered, ideally in their favour:

(1) Does copyright under the Copyright Act subsist in plans of survey?

(2) Does the copyright in the plans of survey belong to the Province of Ontario pursuant to s. 12 of the Copyright Act as a result of the registration and/or deposit of those plans of survey in the Ontario land registry office?

(3) Does the signed declaration affixed to the plan of survey at the time of registration and/or deposit constitute a signed written assignment of copyright to the Province of Ontario pursuant to s. 13(4) of the Copyright Act?

(4) Are class members deemed to have consented to any or all of the alleged uses by the defendant of plans of survey as a result of the registration and/or deposit of those plans of survey to the Ontario land registry office?

(5) Did the defendant make any or all of the alleged uses of plans of survey? If so, which ones?

(6) If the answers to common issues 2 and 3 are no, do any or all of the alleged uses constitute

(a) uses that by the Copyright Act only the owner of the copyright has the right to do;

(b) uses that are listed in paras. 27(2)(a) to (e) of the Copyright Act and that the defendants knew or should have known infringes copyright;

and, if so, which ones?

(7) Does the defendant have a defence to copyright infringement based on public policy that would justify the defendant making the alleged uses of plans of survey?

[25] I will consider each of the common issues in turn.

Common issue 1

[26] Common issue 1 asks whether copyright under the Copyright Act [^17] subsists in the plans of survey. There is no dispute on this point. The Copyright Act expressly includes "drawings, maps, charts [and] plans" within the definition of an "artistic work" that attracts copyright protection. [^18] Teranet agrees that copyright subsists in the plans of survey.

[27] The answer to common issue 1 is yes.

[28] The more interesting question is who owns the copyright and whether the class members have a claim for infringement under the Copyright Act. [^19]

Common issue 2

[29] Common issue 2 asks whether the copyright in the plans of survey belongs to the Province of Ontario pursuant to s. 12 of the Copyright Act as a result of the registration or deposit of those plans of survey in the land registry office.

[30] Section 12 of the Copyright Act provides as follows:

12. Without prejudice to any rights or privileges of the Crown, where any work is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty and in that case shall continue for the remainder of the calendar year of the first publication of the work and for a period of fifty years following the end of that calendar year. [^20]

[31] Teranet submits that the plans of survey in question were "prepared or published by or under the direction or control" of the province and therefore copyright belongs to the Crown. There are two prongs to the s. 12 provision: "prepared" and "published". I will consider each in turn.

[32] First, "prepared". In my view, plans of survey are not prepared "under the direction or control" of the province. Plans of survey are generally prepared at the request of private clients who have an interest in the land under survey and who contract directly with the surveyor. It is true that the preparation of a plan of survey must conform to certain statutorily prescribed guidelines [^21] but these are guidelines about the form, not the content of the survey. I am unable to conclude that the plans of survey presented for registration or deposit at the land registry office were prepared "under the direction or control" of the province.

[33] I also agree with the plaintiff that Teranet's submission about "preparation" fails for two other reasons: first, it would mean that copyright in all plans of survey, even those that are never registered or deposited, would automatically belong to the Crown upon creation given that their preparation was informed by the same provincial statutes and regulations; and second, if Teranet is correct, it would also mean that lawyers who file pleadings or facta at court registries would lose the copyright in their work simply because they complied with the statutory filing requirements about form or content.

[34] Next, "published". Teranet relies primarily on this second prong.

[35] Section 12 has not been the subject of definitive judicial interpretation. Some legal commentators believe that this provision refers only to copyright in materials produced by the government and simply preserves the pre-statutory Crown prerogative to publish "such government materials as judicial decisions and legislative enactments". [^22] In his text on copyright law, Professor Vaver says that s. 12 provides for the term of copyright in works that are prepared or published by the federal or provincial government "and that are first owned by it". [^23]

[36] Teranet, however, argues that s. 12 should be read literally. After the plans of survey are registered or deposited at the land registry office, they are digitized and then published (that is, made available to the public) [^24] online. And because all of this is done "by or under the direction or control" of the province, it follows, says Teranet, that the copyright belongs to the province. The province in turn has duly licensed Teranet to make and sell the copies. There is thus no infringement.

[37] I am not persuaded by this submission. In my view, if the statutory provisions in the Registry Act and the Land Titles Act (as already discussed) did not exist and all one had was s. 12 of the Copyright Act, this provision by itself would not be enough to acquire copyright. Just because the federal or provincial government publishes or directs the publication of someone else's work (as opposed to governmental material) cannot mean that the government automatically gets the copyright in that work under s. 12 of the Copyright Act.

[38] Fortunately, I do not have to decide this point. Here, as I have already noted, provincial property statutes make clear that the property in the plans of survey, including the copyright, is transferred to the province when the plans of survey are registered or deposited at the land registry office.

[39] Recall that common issue 2 asks whether the copyright in the plans of survey belongs to the province pursuant to s. 12 of the Copyright Act as a result of the registration or deposit of those plans of survey in the land registry office.

[40] The answer has to be yes. As a result of the registration or deposit of the plans of survey in the land registry office, the ownership of the property in this material, including the copyright, is transferred to the province. At that point, the province has "control" of the plans of survey. The plans of survey are then published "by or under the direction or control of Her Majesty". When this happens, according to s. 12 of the Copyright Act, the copyright in these works belongs to the province for the term of years that is prescribed.

[41] In my view, s. 12 of the Copyright Act, primarily a "term of copyright" provision, clarifies Crown copyright but does so "without prejudice to any rights or privileges of the [provincial] Crown". Thus, the provincial "property of the Crown" provisions already discussed, and s. 12 of the federal Copyright Act, can live together and operate concurrently.

[42] In any event, the answer to common issue 2 is yes.

[43] Both sides agree that this is the determinative issue — if the answer to common issue 2 is yes then there is no copyright infringement and that is the end of the class action. [^25]

Common issue 3

[44] Common issue 3 asks whether a signed declaration affixed to plans of survey at the time of their registration or deposit constitutes a signed written assignment of copyright to the province of Ontario pursuant to s. 13(4) of the Copyright Act.

[45] Section 13(4) provides that "the owner of the copyright in any work may assign the right, either wholly or partially, and either generally or subject to limitations . . . but no assignment or grant is valid unless it is in writing signed by the owner of the right in respect of which the assignment or grant is made". [^26]

[46] The signed declaration at issue herein is the "declaration of compliance with all applicable Acts, regulations under them and practice standards" that surveyors are required to provide to their clients upon completion of a "project" (defined to include a plan of survey) in accordance with s. 4 of O. Reg. 216/10. [^27]

[47] Where a "cadastral" survey is prepared (a plan of survey that involves the establishment or reestablishment of boundaries), s. 4(3) of O. Reg. 216/10 requires that the surveyor sign and date a declaration of compliance in form 1 as follows:

I certify that:

This survey and plan are correct and in accordance with the Surveys Act, the Surveyors Act and [any other appropriate act] and the regulations made under them.

The survey was completed on [date]. [^28]

[48] The signed declaration of compliance says nothing about copyright or an assignment of rights. It merely states that a plan of survey is correct and in accordance with statutory requirements.

[49] In short, I agree with the plaintiff that the answer to common issue 3 can only be no.

Common issue 4

[50] Common issue 4 asks whether class members are deemed to have consented to the alleged uses of the plans of survey by Teranet as a result of the registration or deposit of those plans of survey to the Ontario land registry office.

[51] As already discussed, upon deposit or registration of the plans of survey at the land registry office, the applicable provincial legislation makes clear that the copyright in this material belongs to the province. There is therefore no need to inquire into the consent or deemed consent of the surveyors. The province, as the owner of the copyright, can make and distribute copies whether in person or online.

[52] It is not necessary to answer common issue 4.

Common issue 5

[53] Common issue 5 asks whether Teranet made any of the following alleged uses of plans of survey:

• making copies of plans of survey;
• transmitting digital copies of plans of survey to Teranet's data-receiving centre;
• storing digital copies of plans of survey in the Teranet's electronic database;
• adding the digital copies of plans of survey to Teranet's index of documents available through Teraview and/or GeoWarehouse;
• offering the digital copies of plans of survey to customers for a fee; and/or
• allowing Teranet's subscribers and/or members of the public download one of more copies of plans of survey.

[54] The evidence is clear that Teranet made use of the plans of survey in all the ways alleged. The answer to common issue 5 is yes to all of the alleged uses.

Common issue 6

[55] If the answers to common issues 2 and 3 are no, then common issue 6 asks if any of all of the alleged uses constitute an infringement of copyright.

[56] The answer to common issue 2 was yes. Therefore, common issue 6, which generated much debate about the "fair dealing" defence, [^29] cannot be answered.

Common issue 7

[57] Common issue 7 asks whether Teranet has a defence to copyright infringement based on public policy. Here again, given the answer to common issue 2 and the finding that Teranet has not infringed the class members' copyright, no public policy defence is required. Nor is there any value in answering this issue in a vacuum.

[58] There is no need to answer common issue 7.

Disposition

[59] Common issue 1 was not contested. Common issues 3 and 5 were answered in favour of the plaintiff. Common issues 4, 6 and 7 were not answered. However, common issue 2, the determinative issue, was answered in favour of Teranet. Consequently, Teranet's motion for summary judgment is granted and the class action is dismissed.

[60] Teranet is entitled to costs. The representative plaintiff would have asked for $75,000 had the class prevailed. Teranet would have sought $200,000. In my view, a fair and reasonable costs award is probably around $125,000. If the parties cannot agree on the costs award, they may forward brief submissions -- Teranet first and the plaintiff within 14 days thereafter.

[61] I am grateful to counsel on both sides for the quality of the written and oral advocacy.

Defendant's motion granted; action dismissed.

Notes

[^1]: Keatley Surveying Ltd. v. Teranet Inc., [2012] O.J. No. 5984, 2012 ONSC 7120 (S.C.J.), revd (2014), 119 O.R. (3d) 497, [2014] O.J. No. 1450, 2014 ONSC 1677 (Div. Ct.), affd (2015), 125 O.R. (3d) 447, [2015] O.J. No. 1828, 2015 ONCA 248. [^2]: Ibid. [^3]: Registry Act, R.S.O. 1990, c. R.20. [^4]: Land Titles Act, R.S.O. 1990, c. L.5. [^5]: R. v. Stewart (1983), 42 O.R. (2d) 225, [1983] O.J. No. 3071 (C.A.), at paras. 58, 67 and 69: "It is well established that . . . [c]opyright is a form of property analogous to personal property . . . Copyright is a significant property right of substantial importance to modern commercial enterprises. It constitutes property . . . .". See, also, De Montigny v. Cousineau, [1950] S.C.R. 297, [1950] S.C.J. No. 6, 12 C.P.R. 45, at p. 53 C.P.R. [^6]: Massie & Renwick Ltd. v. Underwriters' Survey Bureau Ltd., [1940] S.C.R. 218, [1940] S.C.J. No. 2, at para. 33. Also see Interim Order P-1281, Ontario (Consumer and Commercial Relations) (Re), [1996] O.I.P.C. No. 373, at pp. 10-11 (QL). [^7]: Section 15(4) authorizes a "facsimile" of the plan being made available to the public for a fee. The word "facsimile" is defined in s. 1 as including "a print from microfilm and a printed copy generated by or produced from a computer record" (emphasis added). [^8]: As in the Registry Act, the word "facsimile" is also defined in s. 1 of the Land Titles Act as including "a print from microfilm and a printed copy generated by or produced from a computer record". [^9]: Although headings within legislation may not be referred to for the purposes of statutory interpretation (per s. 70 of the Legislation Act 2006, S.O. 2006, c. 21, Sch. F), it is notable that in amendments that are now in force (Bill 55, An Act to implement Budget measures and to enact and amend various Acts, 1st Sess., 40th Parl. Ontario, 2012 (Royal Assent received), S.O. 2012, c. 8), the legislature clarified the heading preceding s. 165(4)(b), previously entitled "Custody of registered documents". The heading will now read: "Ownership of registered documents". [^10]: Section 9(1)(e) of O. Reg. 43/96. [^11]: AOLS Bulletin, Procedures for Copyrighting Survey Plans and Reports, at 2(a); also see AOLS Bulletin, Clarification Bulletin Re Copyright, at 1: "All plans and reports not entering the registry system should be copyrighted by the member of the Association preparing the same" (emphasis added). [^12]: There was no direct evidence on this point but it is self-evident and thus can be the subject of judicial notice. [^13]: The Land Registration Reform Act, R.S.O. 1990, c. L.4 authorizes the Crown to create an ELRS. The Electronic Land Registration Services Act, 2010, S.O. 2010, c. 1, Sch. 6 confirms the Crown's authority to enter into contracts with a service provider "for the provision of such land registration and related services as may be specified in the agreement" and to grant "a licence to a service provider to access, use, copy, sell and otherwise deal with the land registration and writs data specified in the agreement with the service provider". There is a clear statutory requirement that plans of survey be available electronically: see s. 2 of the Electronic Land Registration Services Act, 2010. Also see art. 8.2(1) of the second amended and restated licence agreement: "Teranet, on behalf of the Ministry, shall facilitate the delivery of the ELR Services in accordance with the Land Registration Statutes and this Agreement". [^14]: Pursuant to Teranet's agreements with the provincial government, the Crown retains all right, title and interest, including, expressly, the intellectual property rights, to the data used in the provision of services. The "data" includes all land registration documents registered and deposited in the LROs. Teranet accesses Crown data to provide electronic land registration services pursuant to an exclusive licence granted to Teranet. The agreements between Teranet and the province make clear that Teranet is a service provider to the province. The fact that the agreements between the province and Teranet expressly disclaim any warranties to the effect that the province owns the copyright in plans of survey does not detract from the analysis herein. Copyright in plans of survey once they are registered or deposited has never been judicially decided — until now. The warranty disclaimers were no doubt added out of an abundance of caution. [^15]: When a user accesses the ELRS and obtains plans of survey, either via Teraview or GeoWarehouse, the user is charged only the "statutory fee" and/or the "mutually agreed fee", both of which are statutorily prescribed. Currently, the fees are authorized by a minister's order dated December 10, 2010, made under the Land Titles Act, pursuant to s. 163.1 of the Land Titles Act and s. 101.1(1) of the Registry Act. See, also, ss. 2(3) and 2(4) of the Electronic Land Registration Services Act, 2010 and the second amended and restated licence agreement, arts. 7.1, 7.4(1) and (2). The current version of the licence agreement provides that, during the exclusive term (to March 31, 2067), "Teranet is entitled to receive and retain all Statutory Fees, Mutually Agreed Fees [and other fees]". Further, s. 2(5) of the Electronic Land Registration Services Act, 2010 specifically provides that "[t]he fees that [Teranet] collects for its own account . . . is revenue belonging to [Teranet] and is not public money . . .". [^16]: Keatley (C.A.), supra, note 1, at para. 11. [^17]: Copyright Act, R.S.C. 1985, c. C-42. [^18]: Copyright Act, s. 2; see, also, Island View Beach Estates Corp. v. J.E. Anderson & Assoc., [2000] B.C.J. No. 1553, 2000 BCSC 1121, at para. 16. [^19]: In particular, ss. 3(1) and 27(2) of the Copyright Act. [^20]: Copyright Act, s. 12. [^21]: See, for example, ss. 8 - 18 of O. Reg. 216/10, enacted under the Surveyors Act, R.S.O. 1990, c. S.29. [^22]: Elizabeth Judge, "Crown Copyright and Copyright Reform in Canada", in Geist, ed., In The Public Interest: The Future of Canadian Copyright Law (2005), at 550-594. [^23]: David Vaver, Copyright Law (Irwin Law Inc., 2000), at 107. [^24]: Massie & Renwick Ltd. v. Underwriters' Survey Bureau Ltd., at pp. 220 and 227 S.C.R.; Infabrics Ltd. v. Jaytex Ltd., [1982] A.C. 1, [1981] 1 All E.R. 1057 (H.L.), at p. 16 A.C. Section 2.2(1) of the Copyright Act also provides: "For the purposes of this Act, publication means (a) in relation to works, (i) making copies of a work available to the public." [^25]: Much of the argument around s. 12 also considered the application of s. 2.2(3) of the Copyright Act and the meaning of "not deemed to be published". I do not have to resolve this debate because this is not a case where the act of publication was "done without the consent of the owner of the copyright". As already noted, the province became the owner of the copyright when the plans of survey were registered or deposited at the land registry office. Therefore, the plans were published with the consent of the owner of the copyright. [^26]: Copyright Act, s. 13(4). [^27]: O. Reg. 216/10 under the Surveyors Act, R.S.O. 1990, c. S.29, s. 4. [^28]: Ibid. [^29]: The fair dealing exception as set out in s. 29 of the Copyright Act provides that "[f]air dealing for the purpose of research [or] private study . . . does not infringe copyright."