DIVISIONAL COURT FILE NO.: 309/20
DATE: 20210618
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
CARRIE EKLUND
Plaintiff (Respondent)
– and –
ACTRA PERFORMERS’ RIGHTS SOCIETY and ACTRA NATIONAL
Defendants (Appellants)
Alexandra Monkhouse and Enbal Singer, counsel for the Respondent
Paul J.J. Cavalluzzo and Elichai Shaffir, counsel for the Appellants
HEARD at Toronto (by videoconference): February 18, 2020
kristjanson j.
[1] Carrie Eklund is an actor and a member of ACTRA. The appellant ACTRA National is a federation of branches and local trade unions representing performers in TV, film, radio, and digital media. In 2014 Ms. Eklund performed in a movie, “The Witch.” Work on that movie was governed by a collective agreement under which the producer recognized ACTRA as the exclusive bargaining agent for performers. Ms. Eklund also signed a contract with the producer under which she agreed to be bound by the terms of the ACTRA collective agreement
[2] Ms. Eklund was paid for her performance and, by the terms of the collective agreement, was also entitled to receive royalties or residuals (or “Use Fee” payments) from the producer for certain uses of the work as defined in the collective agreement. The producer provides lump sum Use Fee payments to ACTRA Performers’ Rights Society (ACTRA PRS), a division of ACTRA. ACTRA PRS then distributes the funds to performers entitled to Use Fees under the collective agreement. Ms. Eklund was issued four Use Fee payments between May 2017 and January 2018.
[3] Ms. Eklund asserts that the movie has generated worldwide revenue of approximately $40 million. She feels she has not been properly compensated. As a result, Ms. Eklund sued ACTRA and ACTRA PRS in Small Claims Court, claiming that they had failed to properly calculate and pay her Use Fees.
The Decision Below
[4] ACTRA and ACTRA PRS brought a motion in Small Claims Court to strike the portions of Ms. Eklund’s claim that the Use Fees were not properly calculated or paid to her, on the grounds that the court lacks jurisdiction over this labour relations dispute. ACTRA argued that the essential nature of the dispute is a workplace dispute arising from the interpretation, application or administration of the collective agreement and the duty of fair representation of the trade union.
[5] Deputy Judge Ashby did not accept this argument, finding that Ms. Eklund did not allege that the union failed to represent her, but rather that “the union in its role as a distributor of funds has improperly calculated the amount due to her.” The Deputy Judge accepted Ms. Eklund’s argument that ACTRA PRS miscalculated compensation based on its own interpretation of the collective agreement “and its own policies,” and that claims about entitlement to a portion of theatrical sales is a question of calculation arising from the “union’s interpretation of the collective agreement and personal contract.”
[6] The Deputy Judge found that this is not a workplace dispute over which the Ontario Labour Relations Board (“OLRB”) or a grievance arbitrator would have exclusive jurisdiction. ACTRA and ACRA PRS appeal from that decision. The appeal is allowed for reasons set out below.
Jurisdiction of the Court
[7] An appeal lies to the Divisional Court from a final order of the Small Claims Court in an action within the specified monetary limit, pursuant to section 31(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43. The refusal to dismiss the action based on lack of jurisdiction is a final order: Hopkins v. Kay, 2014 ONCA 514 at para. 9, Abbott et al. v. Collins et al. (2002), 62 O.R. (3d) 99 (C.A.), 2002 41457 at paras. 5-6. The consequence of the Small Claims Court order is that ACTRA may not dispute the court’s jurisdiction over the action, so the order is final on the question of jurisdiction.
The Issues
[8] This appeal raises three issues:
(1) Did the Deputy Judge err in law in finding that the dispute is not within the exclusive jurisdiction of the OLRB or a grievance arbitrator?
(2) Did the Deputy Judge make a palpable and overriding error of fact, or error of law, in holding that ACTRA miscalculated Ms. Eklund’s Use Fees based on ACTRA or ACTRA PRS policies?
(3) Should fresh evidence about the corporate status of ACTRA PRS be admitted on this appeal?
Standard of Review
[9] Appellate standards of review apply to appeals from the the Small Claims Court. On a pure question of law, the standard of review is correctness. Findings of fact or of mixed fact and law are reviewable only for palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33 at paras. 8 – 10.
Analysis
Issue #1: Exclusive Jurisdiction
[10] The first issue is whether the Deputy Judge erred in failing to find that the dispute is within the exclusive jurisdiction of the OLRB or a labour arbitrator. The Deputy Judge referred to the seminal case of Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 SCR 929, which held that courts lack jurisdiction to hear disputes about union representation and other labour relations matters where “the dispute, in its essential character, arises from the interpretation, application, administration or violation of the collective agreement”: paras. 52 and 54.
[11] The Witch was produced under the terms of a collective agreement which provides workers like Ms. Eklund with a variety of rights and benefits. Article A101 of the collective agreement identifies ACTRA as the “exclusive bargaining agent” of performers with exclusive jurisdiction over English language productions in Canada. In accordance with section 48(1) of the Labour Relations Act, 1995 (“Labour Relations Act”) the collective agreement requires that differences between the parties arising from “the interpretation, application, administration or alleged violation of the agreement” be addressed through grievance arbitration. This is also set out in Article B701 of the collective agreement. By Article A104, ACTRA and the producer associations jointly administer the collective agreement.
[12] Under Article B508 of the collective agreement, Use Fee payments on a production are paid by the producer to ACTRA PRS as a lump sum. Under Article B511, the producer is required to deliver reports on gross revenues to the ACTRA PRS, which reports are to be accompanied by the aggregate Use payments payable to performers and an outline of the method of calculation of payments. Article B511(e) provides that the aggregate Use Fees are to be paid in trust to ACTRA PRS:
Payments shall be made to the ACTRA PRS, a corporation without share capital, in trust for the Performers concerned. The ACTRA PRS shall be entitled to make a claim of interest on payments received after the due date as provided for …which claim shall be enforceable under the terms of this Agreement.
[13] ACTRA PRS is required to distribute Use Fees to individual performers pursuant to the formula set out in Article B512 of the collective agreement. The formula in the collective agreement sets out how Use Fees are allocated to each performer based on “units.” Pursuant to Article B512, ACTRA PRS is required to calculate units by dividing the Performer’s Gross Fee (a term defined in the collective agreement) for the production by the applicable minimum daily fee as set out in the collective agreement.
[14] Article B514 provides a right of audit to ACTRA or the ACTRA PRS. For the purposes of verifying the propriety of payments, ACTRA or ACTRA PRS must be given full access and the right to examine and audit all books, records, accounts, receipts, disbursements, and any other relevant documents related to a production and its distribution.
[15] The court must define the “essential character” of the dispute, which requires a contextual analysis of the underlying facts and the collective agreement. Simply pleading a common law tort is not sufficient to invoke the jurisdiction of the courts. As the Supreme Court states in Weber v. Ontario Hydro, 1995 108 (SCC), [1995] 2 SCR 929, at para. 43:
…the analysis of whether a matter falls within the exclusive arbitration clause must proceed on the basis of the facts surrounding the dispute between the parties, not on the basis of the legal issues which may be framed. The issue is not whether the action, defined legally, is independent of the collective agreement, but rather whether the dispute is one "arising under [the] collective agreement". Where the dispute, regardless of how it may be characterized legally, arises under the collective agreement, then the jurisdiction to resolve it lies exclusively with the labour tribunal and the courts cannot try it.
[16] How a union represents its members in respect of the interpretation, application or administration of a collective agreement falls within the core jurisdiction of the OLRB over duty of fair representation complaints. Section 74 of the Labour Relations Act prohibits a trade union from acting in a manner that is arbitrary, discriminatory, or in bad faith in the representation of its members. The way in which a claim is framed, whether in contract or tort or some other way, is not determinative. Rather, where the claim concerns how a member was represented by a union in respect of her rights under a collective agreement, the courts do not have jurisdiction. Here, the allegations are that ACTRA misinterpreted the collective agreement and failed to properly represent her in matters concerning Use Fee payments owing for her work on The Witch, which was governed by the collective agreement.
[17] ACTRA argues that the factual dispute arises squarely from the terms of the collective agreement. Ms. Eklund seeks damages of $9,930.84 for “breach of contract” relating to the alleged miscalculation of units which determine her entitlement to Use Fee payments; those payments arise under the collective agreement. Use Fee payments are paid by the producer as a lump sum in and distributed by ACTRA PRS pursuant to the Article B512 formula. ACTRA and ACTRA PRS have no discretion to distribute Use Fee payments except as required by the collective agreement.
[18] Ms. Eklund also seeks damages of $11,500 for “breach of contract” relating to alleged improper calculation of Use Fee entitlements arising from box office sales. The collective agreement, however, provides that performers in The Witch are not entitled to Use Fees from box office sales, because in accordance with Article B301 of the collective agreement, the producer elected the option of not paying Use Fees on worldwide theatrical uses. The question of whether Use Fee payments are owing arises from ACTRA’s interpretation of the terms of the collective agreement, as well as that of the producer.
[19] Ms. Eklund argues that this is not a workplace dispute, and so falls outside the jurisdiction of the OLRB. Ms. Eklund states that she is not suing ACTRA and ACTRA PRS in the capacity of a union, but in the capacity of a “payroll provider.” She states that she has no dispute with the producers of The Witch and makes no claim that the producer has not paid enough money. Her claim is with the union for miscalculating her units and Use Fees, which she argues is a factually and legally separate matter.
[20] The duty of fair representation does not encompass all claims by members against unions. Internal trade union disputes, such as qualifications for membership, elections, discipline, union meetings and so on are governed by a union’s constitution, not the Labour Relations Act, and may be resolved through court proceedings. However, Ms. Eklund’s claims are not internal union matters governed by the constitution or formal trade union by-laws and polices. They are issues involving the interpretation, application and administration of the collective agreement.
[21] The only personal contract in the record is the standard form ACTRA Performer Contract for Independent Production. The parties to the contract are Carrie Eklund and the Producer. It sets out additional requirements relating to the production such as transportation and meals. It stipulates the nature of the engagement and specifies the Fee with reference to Article A805 of the collective agreement. It does not, and indeed cannot, establish a regime for Ms. Eklund with respect to Use Fees different from the collective agreement. To the extent that the Deputy Judge relied on the “personal contract” to characterize the dispute as one outside the arbitration/OLRB framework, this was an error of law.
[22] Neither party was able to identify a case directly on point, although I find the cases relied on by ACTRA provide close analogies. ACTRA relied on several cases where unions negotiated settlements of grievances with employers, as labour boards in a variety of jurisdictions have held that the duty of fair representation extends to the union’s conduct in the disbursement of settlement funds. I note that in Rawlins v. UNITE HERE, 2015 39784 (ON LRB), the Board did not find that it had jurisdiction to decide a duty of fair representation complaint, holding instead that: “How settlement money received by a union as a result of one or more grievances ought to be distributed is a decision to be made by that union”, and the Board will not review determinations made by a union regarding how settlement funds were distributed in the absence of properly pleaded allegations that a union acted inappropriately.
[23] In International Association of Machinists and Aerospace Workers, Transportation District 140 v. Air Canada, 2009 CIRB LD 2242 (unreported), the Canadian Industrial Relations Board took jurisdiction over a duty of fair representation complaint about the union’s distribution of funds. The union received monies during Air Canada’s insolvency proceeding, and then established a system for determining eligibility for the payment of those monies to members. The Board found that in the course of the insolvency process the union negotiated collective agreement concessions, the payments were consideration for those concessions made by members of the bargaining unit under their collective agreement, and thus the union’s distribution of those funds was based on the collective agreement. The Board stated that if the collective agreements had not been at the “heart of the matter” the union would not have been involved in the insolvency process at all. Similarly, but for Ms. Eklund’s entitlement to funds under the collective agreement, the union and ACTRA PRS would not have been involved at all.
[24] By contrast, the cases relied on by Ms. Eklund do not relate to the union’s role in dispensing funds relating to collective agreement entitlements, or funds received by unions for settlement of claims relating to collective agreement entitlements.
[25] Issues relating to the collection, calculation, and payment of Use Fees to performers on productions are at the heart of this collective agreement and its interpretation, application and administration. I find that the OLRB has jurisdiction to enquire into and determine whether ACTRA breached its duty of fair representation regarding how Use Fees were calculated and paid to Ms. Eklund pursuant to the terms of the collective agreement, or a labour arbitrator if Ms. Eklund had commenced a grievance. The Deputy Judge erred in law in deciding otherwise.
Issue #2: Policies
[26] The Deputy Judge found that the pleading was an allegation that ACTRA PRS miscalculated Use Fees “on its own interpretation of the method of calculation set out in article B512 of the collective agreement and its own policies.” There was no evidence before the Deputy Judge of other “policies” imposed by ACTRA or ACTRA PRS that would affect how Use Fees are allocated or calculated. The only evidence before the Deputy Judge was a narrative description breaking down the steps of how ACTRA PRS administered the Use Fees based on its interpretation of the collective agreement language.
[27] To the extent that the Deputy Judge held that there were additional “policies” that removed the dispute from the realm of labour relations, this is an error of law in that there was no evidence of ACTRA or ACTRA PRS “policies”, much less policies operating independently or differently from the collective agreement requirements. A finding of fact based on no evidence is an error of law.
[28] In the alternative, I find it to be a palpable and overriding error of fact. In other words, the collection of, entitlement to, and calculation of, Ms. Eklund’s’ Use Fees was entirely a matter of the interpretation, application, or administration of the collective agreement. There were no separate union policies that would or could affect the entitlement by Ms. Eklund to Use Fees to invoke the jurisdiction of the courts, and no evidence of any such policies.
Issue #3: Status of ACTRA PRS
[29] During the course of the hearing, I asked a number of questions about the legal status of ACTRA PRS. The Deputy Judge found that ACTRA PRS was “a division” of ACTRA. I inquired as to whether ACTRA PRS had a separate corporate status. I asked the parties to make written submissions on whether evidence about the legal form of ACTRA PRS should be admitted and what effect, if any, the evidence has on the arguments. In response to my questions, confirmed in writing afterwards, ACTRA’s counsel clarified that ACTRA PRS was a not-for-profit corporation and ACTRA was an unincorporated association.
[30] Ms. Eklund’s counsel sought to make additional submissions based on the corporate status of ACTRA PRS. Ms. Eklund in her supplementary submissions argues that any action against ACTRA PRS is outside the scope of the Labour Relations Act. Additionally, she seeks to argue that the existence of ACTRA PRS as a separate corporate entity dealing with the collection and distribution of compensation for performers confirms that ACTRA plays a separate role from that of representative when the compensation is distributed to performers. In that capacity, she argues, it can be sued in court for any breaches of its payroll function.
[31] ACTRA and ACTRA PRS object to the admission of the additional evidence, since it does not meet the test for fresh evidence and was not before the motion judge. They object as well to the new arguments sought to be advanced based on the corporate status of ACTRA PRS since those arguments were not before the Deputy Judge on the motion.
[32] Having considered the supplementary written submissions of the parties, I do not admit the fresh evidence. This information could have been obtained by reasonable diligence prior to the motion. Indeed, it is clear from Article B511(e) of the collective agreement, which was before the Deputy Judge, that ACTRA PRS is a corporation without share capital. The information could have been obtained by a corporate search and is on the ACTRA website.
[33] In addition, the additional information is not determinative of any issues on the motion. Ms. Eklund’s claim is in contract. She relies on the Supreme Court of Canada's decision in Berry v. Pulley, 2002 SCC 40, [2002] 2 SCR 493, which established that when a member joins a union, a relationship in the nature of a contract arises between the member and the trade union as a legal entity. This is the basis for her claim as against ACTRA. There is no contractual relationship between ACTRA PRS and Ms. Eklund.
[34] Further, ACTRA PRS is a division of ACTRA whether it is incorporated or not. ACTRA PRS and its role are described in the collective agreement, particularly in Articles B508 through B514. All disputes arising in respect of those specific Articles (which include the role of ACTRA PRS) are properly the subject of grievance arbitration by virtue of Article B701:
Any differences between the Parties to this Agreement arising from the interpretation, application, administration, or alleged violation of the provisions of Articles B3 to B6 inclusive, or as otherwise provided for in this Agreement, shall be referred to final and binding arbitration.
[35] Since the role of ACTRA PRS is clearly delineated in the collective agreement and subject to grievances, this internal union arrangement does not confer jurisdiction on the courts over a dispute that otherwise falls within the exclusive jurisdiction of a labour tribunal.
[36] Finally, the arguments Ms. Eklund now seeks to advance are completely new arguments which could have been raised before the Deputy Judge on the motion and cannot now be advanced for the first time on appeal.
Order
[37] The appeal is allowed. An Order is to go striking the following paragraphs from Ms. Eklund's Amended Statement of Claim: 1A, 22 - 26, 1E, 27 – 28 and 51.
[38] The appellants seek costs of $16,811on a partial indemnity basis. The respondent’s partial indemnity costs were $9,220. Rule 57.01(1) of the Rules of Civil Procedure provides that in exercising its discretion under section 131 of the Courts of Justice Act, R.S.O. 1990 c. C.43, to award costs, the court may consider several specified factors. In Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 728, the Court of Appeal, at para. 26, held that the fixing of costs is not simply a mechanical exercise and that, overall, the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant. Reasonableness and proportionality are touchstones in the fixing of costs.
[39] The amount of the respondent’s claim in Small Claims Court was $25,000.00. The union was no doubt inclined to incur significant legal costs on appeal due to the precedential effect of the decision. I must keep in mind, however, that Small Claims Court is an important element of access to justice in our system, and legal fees must still be proportional to the amounts in issue. For these reasons I award the appellants costs in the amount $9,220.00, inclusive, an amount within the contemplation of Ms. Eklund which I find fair and reasonable in the circumstances.
[40] The appellants also request costs of the Small Claims Court proceedings. No costs were awarded at first instance due to divided success on the motion. I note that counsel for the appellants conceded in the hearing that paragraphs 29 and 30 of the Claim are within the jurisdiction of the court, and there was thus divided success at Small Claims Court. No order as to Small Claims Court costs.
Kristjanson J.
Released: June 18, 2021
CITATION: Eklund v. ACTRA Performers’ Rights Society, 2021 ONSC 4400
DIVISIONAL COURT FILE NO.: 309/20
DATE: 20210618
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Kristjanson J.
BETWEEN:
CARRIE EKLUND
Plaintiff (Respondent)
- and -
ACTRA PERFORMERS’ RIGHTS SOCIETY and ACTRA NATIONAL
Defendants (Appellants)
REASONS FOR JUDGMENT
Released: June 18, 2021