COURT FILE NO.: 13-57387

DATE: 2021/08/27

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tanya Woods and 2285675 Ontario Inc., Plaintiffs

AND:

University of Ottawa, Defendant

BEFORE: Regional Senior Justice Calum MacLeod

COUNSEL: D. Kenneth Gibson, G. Boyd Aitken & Phillip Wallner, for the Plaintiffs

Jamie A. Macdonald & Crystal Li, for the Defendant

HEARD: December 4, 7, 8 & 10, 2020, April 6, 7 & 8, 2021 with closing submissions in writing, May 25, 2021

DECISION AND REASONS

Introduction

[1] This action arises from an unusual situation in which an idea conceived by a law student in the 2006 – 2007 academic year became the basis for a multi million-dollar class proceeding.[^1] At the student’s suggestion, the Canadian Internet Policy and Public Interest Clinic (“CIPPIC”) of the University of Ottawa became part of a consortium of lawyers who combined to prosecute the class action. CIPPIC had agreed to compensate the plaintiff.

[2] Although the plaintiff asserts various causes of action against the university, the issue before the court really turns on this agreement. Is it binding, was it reasonable and how much is the plaintiff owed? The matter came to trial during the pandemic on the dates shown above.[^2]

[3] This litigation is entirely incidental to the class proceeding. It does not affect the parties to that proceeding or the other class counsel. It is solely an issue between a former law student and the university. CIPPIC is an unincorporated clinic operated under the aegis of the Common Law Section of the Faculty of Law. So, the parties are the plaintiff, a numbered company to which she has assigned her rights, and the University of Ottawa.

[4] The evidence clearly shows that the right to compensation was reduced to writing and was contingent on an amount awarded to class counsel in the class proceeding. There is nothing unfair, unconscionable or unenforceable about the agreement. Read in context it is not ambiguous. There is no basis to award damages against the university beyond what it had agreed to pay.

[5] The arrangement between the parties was for the plaintiff to receive a guaranteed five percent of the costs awarded by the court to class counsel.[^3] That equates to 50 percent of the $656,793.64 received by CIPPIC from the consortium and now held in trust by the university.

[6] The amount owing to Ms. Woods or to the corporation to which she has assigned her rights is $328,396.82. This is very close to the position taken by the university and a long way from the claim asserted by the plaintiff. My reasons follow.

Background

[7] The context of the dispute is this. In 2006, Tanya Woods was a law student at the University of Ottawa. During the 2006 - 2007 academic year she was in the final year of what was then the LL.B. program. It was her fourth year studying law because she had begun her studies at the London School of Economics and had partially completed legal studies at that institution before transferring back to Canada.

[8] Since credits earned in England do not match exactly with the requirement for a Canadian law degree and to qualify for a degree from the University of Ottawa, she had to complete extended studies. The statement of agreed facts indicates that she was a student at U of O from September 2004 to May of 2007. The extra period of time enrolled in law school allowed some flexibility for independent study. During her studies she interned at CIPPIC and came to know Philippa Lawson; one of the staff lawyers and the Executive Director of the clinic.

[9] Ms. Woods had a particular interest in copyright and intellectual property law. One of her courses in the fall semester of 2006 was a course in Digital Music Law which required completion of a major paper. She had some familiarity with the problem of “orphan works” which referred to works for whom the copyright holder could not be identified. In September of that year, Professor Jeremy DeBeer put Ms. Woods in touch with Mario Bouchard, counsel at the Copyright Board of Canada.

[10] Mr. Bouchard suggested that Ms. Woods write a paper about the “record labels’ pending list”. The pending list was a significant issue in the North American music industry. Music publishing houses in both Canada and the United States had accumulated outstanding liability for royalties to musicians who could not be located or identified (“the unlocatables”) or whose entitlement to royalties was complicated by various factors. Neither the recording companies nor the collectives which were supposed to collect those royalties on behalf of musicians had been able to resolve the problem. It was estimated that the accumulated liability of the Canadian music publishers to the unlocatables was roughly $50 million. Indeed, that figure came out in evidence at a hearing before the Board in September of 2006. The existence of the pending list and the amount of the potential liability were therefore known in the industry and at the Copyright Board.

[11] In December of 2006, Ms. Woods wrote a paper entitled The Unlocatables: Playing Hide and Seek with Royalties in the Canadian Music Industry. The paper was submitted to Professor DeBeer and was of excellent academic quality. It described the pending list and the unlocatables as well as potential solutions including litigation. At the start of the following year, Ms. Woods completed a placement with the Copyright Board and further developed her knowledge of the issue. In the course of her studies, Ms. Woods developed the idea of using a class proceeding to resolve the problem of the pending list.

[12] Designed appropriately, a class proceeding would permit the accumulated liability to be disbursed for the benefit of the unlocatables and by binding the class, would end the obligation of the publishers to the musicians in the class. This was significantly different from the suggestion originally made by Mr. Bouchard to use s. 77 of the [Copyright Act][^4] to clear the pending list. Section 77 provided only a limited statutory remedy in specific situations.

[13] As I will describe in more detail in the next section, in February of 2007, Ms. Woods took her idea for a class proceeding to CIPPIC and encouraged Ms. Lawson to pursue the idea. This led quickly to a series of discussions and to the formation of a consortium between CIPPIC and two law firms.

[14] Besides the initial idea, Ms. Woods conducted further research, was involved in discussions with class counsel, expounded on certain nuances of copyright law and outlined a legal theory for the proposed case. Between February and April of 2007, Ms. Woods prepared and revised a draft statement of claim. There is no doubt whatsoever that awareness of the pending list, the size of the potential liability and the possible utility of a class proceeding to unlock these funds was an idea which would not have occurred independently to any of CIPPIC or the collaborating law firms. And there is no doubt that conceptual work on framing the class proceeding and drafting of pleadings was important preparatory work.

[15] Some but not all of that work was also part of her academic credit but she contributed it to CIPPIC – and to the consortium – for the purpose of assessing and then pursuing a class proceeding. Ms. Woods was not paid for her contribution. It was agreed that she would be compensated when and if the class action proceeded and resulted in court approved counsel compensation.[^5] CIPPIC agreed to pay Ms. Woods a fee out of its share of such compensation. As will be seen, the agreement ultimately reached was for CIPPIC to pay Ms. Woods a guaranteed minimum of five percent of the compensation awarded to class counsel. No one could know at that time what that fee would be, but it was reasonable to assume that if the matter proceeded and the class proceeding was successful, the counsel fee would bear some relationship to the amount recovered for the class.

[16] In June of 2007, Ms. Woods began an articling position with the Copyright Board of Canada and to avoid any conflict of interest, she ceased active involvement with the class proceeding. She was called to the bar in June of 2008. Subsequently she pursued further academic qualifications, earning two master’s degrees. She has worked as a lawyer, but she was not further involved with the class proceeding after her initial contribution.

[17] The class proceeding was launched in September of 2008 and following more than two years of litigation, a settlement was achieved. This led to a consent certification for settlement purposes in May of 2011. The settlement was approved by Justice Strathy (as he then was) at a fairness hearing in November of 2011. At that time the court also approved compensation for class counsel in the amount of $6,250,000 plus taxes and disbursements.[^6]

[18] Under the consortium agreement, CIPPIC was to have received between ten percent and 20 percent of the class counsel compensation. The amount received by CIPPIC was $ $656,793.64 which represented the ten percent minimum guarantee. Ms. Woods has not been paid because she and the university have been unable to agree how much she is owed. CIPPIC takes the position that the agreement between CIPPIC and Ms. Woods required payment of five percent of the class counsel award which is 50 percent of the amount received by the clinic. Ms. Woods argues that she should be entitled to a great deal more and the university should be liable to her in damages.

[19] This action was brought in 2013. The plaintiff argues that she should have been entitled to five percent of the total class award and the agreement is invalid. Alternatively, she sues the university for numerous causes of action including negligence, misrepresentation, unjust enrichment, breach of fiduciary duty, breach of copyright and punitive damages. In closing submissions, counsel for the plaintiff argues for damages of $3.5 million.

Evidence, Findings of Fact and Analysis

Overview

[20] The plaintiff gave evidence, described her background and interest in the area of intellectual property law and in particular the law arising from the increasing transformation to digital music. She then detailed the research she had conducted, the papers and memoranda she had submitted to her professor dealing with this idea and finally the history of her interaction with CIPPIC and Ms. Lawson and Mr. Fewer. She detailed her involvement with class counsel and the exchanges leading up to the signing of the written agreement. The plaintiff did not call any other evidence.

[21] The defendants called Ms. Lawson and Mr. Fewer. There was also an agreed statement of facts.

[22] Remarkably, no one called Mr. Bates or Mr. Foreman, Professor De Beer or Harvey Strosberg. The evidence at trial was therefore limited to the direct evidence of the plaintiff herself and the two lawyers who, at the time, were at CIPPIC. There is also a considerable amount of documentary evidence. The authenticity of the emails and other documents is not in question, but there are limits to what documents can show about the intention or meaning of individuals not called as witnesses. This evidence is admissible to show what the communication from those individuals said at particular points in time. But the court cannot be asked to make findings of fact about the motives of individuals or to speculate as to what evidence they might have given had they been called.

[23] It is perhaps surprising that in 2007, the University of Ottawa did not have a clear policy governing the intellectual property rights of students conducting research for academic credit. It is also remarkable that a staff lawyer at a university legal clinic had the authority to enter into a consortium to pursue a multi-million-dollar class proceeding and to agree to pay a portion of the fee to a student without any formal approvals and with minimal documentation. If there were policies, protocols or approvals in place, they were certainly not drawn to my attention or put in evidence. With the benefit of hindsight, clear policies, crisper contractual language, written releases and independent legal advice might have avoided this dispute.

[24] CIPPIC can be criticized for the informal manner in which it documented these agreements and for less than pristine record keeping. This cannot be the basis for a negligence action, however, because there is no causal connection to any harm or loss. As I will describe, the consortium never attempted to resile from its agreement with CIPPIC and CIPPIC has never sought to resile from its agreement with the plaintiff.

[25] The evidence led at trial does not persuade me that any rights of the plaintiff were breached or that the university was enriched at her expense. The plaintiff has failed to prove that copyrighted material was appropriated or misused, and she cannot show that the lawyers at CIPPIC put the interests of the university before hers. Nothing in the evidence persuades me that the plaintiff was misled or induced to detrimentally surrender her rights. I do not accept the argument that there was a solicitor client relationship between CIPPIC and the plaintiff or that there was an agency relationship. I cannot conclude that the university should be liable for any damages beyond a share of the amount CIPPIC has been paid let alone damages of $3.5 million.

[26] In Canadian contract law, unless there are grounds for invalidating the agreement, there is a presumption that a written contract governs the relationship between the parties. Since the decision of the Supreme Court of Canada in Sattva, it is clear that the court may always look at the surrounding circumstances to understand the contract in its proper context. This allows the decision maker to “read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract” but at the same time not allowing the extrinsic evidence “ to overwhelm the words of that agreement.”[^7]

[27] It is helpful to examine the chronology and the evidence in detail. When the facts are examined carefully, it is quite clear what the agreement was. Despite at least one email which could be interpreted to mean something different if read in isolation, there was never any suggestion that CIPPIC could or would promise to pay the plaintiff a percentage of the overall damage award. All that CIPPIC could do was to promise to pay the plaintiff a share of CIPPIC’s share of the class counsel compensation ultimately approved by the court. The plaintiff knew that CIPPIC’s share of that award might be as little as ten percent and her share might only be five percent. In fact, since there was no guarantee that the class proceeding would be successful, would be certified or that any particular counsel fee would be approved, it was possible there would never be any compensation. In all of the exchanges detailed above, the agreement under discussion is a share of the fees – or fees, disbursements and HST.

[28] Part of the plaintiff’s claim is for breach of copyright. Copyright law in Canada is entirely statutory. An author owns the economic and moral rights in original works involving the exercise of skill and judgment.[^8] It is the particular expression of an idea that is protected and not the idea itself. A useful review of copyright law in the legal context can be found in CCH Canadian Ltd. v. Law Society of Upper Canada.[^9] Clearly there can be copyright in legal writing and memoranda of law (although I am dubious that copyright should attach to draft pleadings[^10]) but as I will discuss, the plaintiff provided her legal work to CIPPIC or to the other class counsel for the specific purpose of assisting them firstly to evaluate the viability of the class proceeding and secondly to develop it and to pursue it. The evidence does not demonstrate any actionable breach of copyright. The plaintiff always knew that her paper and her draft pleadings were to be provided to class counsel and she participated in various meetings where the litigation strategy was discussed.

[29] There were multiple benefits to the plaintiff in making her research papers and other material available for the use of class counsel. As will be seen in the email exchanges, Ms. Woods wanted to see the pending list resolved as a benefit to the industry and a matter of public interest. She wanted CIPPIC to pursue it for that reason and because it might be a benefit to CIPPIC. She also wanted to be part of it as she thought it would further her legal education and assist her to build a reputation. While she spoke about articling and working on the claim as a possibility, that was only discussed as a possibility and was not a term of providing her work to CIPPIC or the consortium. Compensation to the plaintiff was also discussed but it was not the only benefit.

The Unlocatables Paper

[30] Before getting to the class proceeding, it is necessary to discuss the events that took place in the fall of 2006. At that time, Ms. Woods was enrolled in a course on Digital Music Law. This was at a time when Canadian law was just beginning to grapple with the collection of royalties from digital music services. The course allowed Ms. Woods to apply her pre-existing interest in artists rights to the new world of digital music and gave her an opportunity to work with counsel at the Copyright Board of Canada. As described above, the knowledge she gained in this course and her contacts at the Copyright Board led to her interest in the pending list and the unlocatables. It also led her to conceive of the idea of a class proceeding as a vehicle to resolve this issue and to the submission of her paper to Professor DeBeer in December of 2006.

[31] The plaintiff makes much of what she now describes as in improper attempt by her professor to take control of her paper. She testified that Professor DeBeer suggested to her that they co-publish her paper which she took to be a suggestion that he should take partial credit for her work. Of even more concern, he apparently told her he had discussed the paper with Harvey Strosberg, a noted class proceedings lawyer. She testified that she was shocked and concerned about this because it was done without her permission or knowledge. The plaintiff testified that she did not confront Professor DeBeer because she planned on studying with him and with the Copyright Board in the following semester.

[32] I make no finding about the propriety of what was done by Professor De Beer. He is not a defendant in this proceeding, and he was not called as a witness. I have no idea what he would say to these allegations but there may be many explanations for a professor offering to co-publish a paper written by a student. Precisely what he had in mind is unclear because neither he nor the plaintiff pursued the matter.

[33] Similarly, I make no finding about the propriety of showing the paper to Mr. Strosberg. Besides being a pioneering class proceedings lawyer, Mr. Strosberg was a lecturer at the university. There may be various reasons for a professor to show a student’s paper to a colleague but that is not a question I need to determine. I am not persuaded by the evidence led at trial that any duty of confidentiality was imposed on Professor DeBeer. There was no breach of copyright in simply showing the paper to Mr. Strosberg or discussing it in a telephone call and there was no breach of copyright in offering to co-publish. It is not a breach of copyright to read an author’s work or to show it to another person. What gives rise to liability is unauthorised use, plagiarism that allows another author to take credit for the work or other steps that diminish the value of the work in the hands of the rightful owner.

[34] No damages flow from these actions because there is no evidence that the work was copied, or its value diminished in any way. The paper was never co-published by Professor DeBeer and Mr. Strosberg did not launch a class proceeding. Furthermore, the 2006 paper made only a fleeting reference to litigation and is not a template for the use of a class proceeding. It was the following year, after taking the idea of a class proceeding to CIPPIC and indeed, after having the benefit of discussions with Mr. Bates and Mr. Foreman, that Ms. Woods developed a detailed analysis of the manner in which a class proceeding could be used to unlock the pending list.

[35] This December 2006 incident is significant to the narrative, however, because it caused Ms. Woods a great deal of alarm. As she testified, she became very afraid that someone else would launch the class proceeding if she did not do something about it. She understood clearly that an author cannot assert ownership over an idea let alone a cause of action.

[36] There was a real risk that if Mr. Strosberg or anyone else became aware of the issue of the unlocatables, the $50 million sitting on the books of the music industry and the potential for a class proceeding, another lawyer could seize the initiative. The existence of the pending list was public knowledge for those who knew where to look. There is no proprietary interest in how to prosecute a class proceeding. The big important idea developed by Ms. Woods was to marry these two and to use a class proceeding to unlock the liability owed to the unlocatables.

Agreement with CIPPIC

[37] What Ms. Woods did then was to contact David Fewer, a lawyer at CIPPIC to discuss the idea of CIPPIC pursuing a class action to resolve the unlocatables problem. Mr. Fewer had heard of the issue and was aware of initiatives to resolve it through regulatory action in the United States. Following a discussion with Mr. Fewer, Ms. Woods approached the Executive Director, Philippa Lawson. As described earlier, this set in motion a chain of events leading to the consortium agreement and an agreement between CIPPIC and Ms. Woods. The events leading up to those agreements are important and so I will set them out in detail.

[38] On February 1, 2007, Ms. Woods sent a summary of her paper about the pending list and an outline of the proposed class proceeding to Ms. Lawson. It is Ms. Woods’ evidence that she wanted CIPPIC to pursue the class proceeding in the hope that CIPPIC would benefit from the idea. She also hoped to obtain recognition for the work she had done and to be involved in the litigation in some capacity if it proceeded. At the time, Ms. Woods had not secured an articling position. There is nothing in the exchanges to suggest that Ms. Woods expected to become a millionaire or was motivated primarily by the idea of profit.

[39] It is worth quoting the introductory email:

“CONFIDENTIAL

Hi Pippa,

I have come across an issue that I think is worthy of a class action and may be of interest to CIPPIC. I see it as a public interest issue as much as an industry issue that is in need of reconciliation. I also believe that to some extent this is a time sensitive issue as I have reason to believe that another firm may be looking at it.

As the author of the first paper that highlights this issue, and future lawyer for the arts, it is important to me that it is handled by a fair minded, "pro artist", barrister, firm or organization. The subject matter is also highly complex and will require some expertise in the area of copyright and possibly the music industry.

Should this issue be considered "litigation or negotiation worthy" I ask that I be involved in the process as I have been working on this issue for some time now and would like to continue working on its resolution. I am keen to work on it as part of my articling requirements and am willing to discuss flexible remuneration options with you or the appropriate person when the time comes.

Please see the attached file for a description of the issue and possible cause of action. As this is quite a sensitive matter I ask that you let me know who you are sharing this information with and that these individuals understand and agree to keep this information confidential. …”

[40] While the issue was not squarely within the mandate of CIPPIC (which concerns itself with internet law and policy), it was an idea with a public interest component. In addition, fund raising was part of the mandate of the Executive Director. Ms. Lawson knew that there would be a possible financial benefit for class counsel and CIPPIC if a class proceeding could be successfully prosecuted. Ms. Lawson felt that the idea of a class proceeding and CIPPIC’s involvement with it had merit. Ms. Lawson had advised that she had contacts who were class action litigators and could reach out to them to see if the idea was viable.

[41] With the full knowledge of Ms. Woods, Ms. Lawson consulted with Paul Bates, of Bates Barristers and subsequently with Jonathan Foreman at Harrison Pensa. In closing argument, the plaintiff asserts that this was done without the plaintiff’s knowledge or approval. That is not the evidence. Ms. Lawson told Ms. Woods she would contact Paul Bates. She copied her with the email exchange. It was never contemplated that the university or CIPPIC would launch a class proceeding on its own. That would require the involvement of experienced class proceeding counsel and a law firm or law firms willing to take on the potential cost and risks of pursuing the matter. Ms. Woods understood that.

[42] The email to Paul Bates was also dated February 1, 2007 and was copied to Ms. Woods. Again, that email is worth quoting:

“Hi Paul - This is another potential class action for you to consider. My very brief review of the matter suggests that there is merit, and perhaps some urgency, in this one. Please take a look and let me know asap (by tomorrow if possible) if this is something you are interested in.

We have the expertise here at the Faculty/CIPPIC in copyright/music industry to do most of the solicitor-type work, I think, but there may be reason to pull in another firm. Harrison Pensa is an obvious good fit, but you may also want to consider Deeth Williams Wall, where one of our grads, Jason Young, practices copyright law. Jason worked closely with CIPPIC on the BMG v. Doe litigation. If you are interested, perhaps we could chat about who would be best to use on this case.

Both Tanya and CIPPIC would expect to have a role in the case, should it go forward. Tanya has developed expertise on the issue and is keen to exploit that expertise, as the message below indicates. She would like to leverage some kind of articling position out of it, if possible.”

[43] It must be remembered that at this point, in February of 2007 there was no plaintiff. However brilliant the concept may have been, Ms. Woods was not a client seeking to pursue litigation. It was not her cause of action and she was not a member of the class. She was not a plaintiff in the ultimate class proceeding. Neither Ms. Woods nor CIPPIC were musicians to whom royalties were owed. All they had at this point was a concept of how a class proceeding might be used as a vehicle to resolve the problem of the unlocatables.

[44] That same day, Paul Bates responded as follows:

“Pippa/Tanya,

Yes, this sounds very interesting indeed.

Is the claim by copyright holders against CRIA members, or against the fund?

What jurisdiction would the Copyright Board have? The defendants might want to block the case on the basis that the claim (or all claims) should/must go

to the Board - e.g., as to the disposition of the accumulated fund of $50M, and/or other issues, such as the CRI duties to search for entitled parties to be paid the royalties.

Do you have good candidates for plaintiff - songwriters and publishers? What about performers?

Could we discuss this on Friday at 2pm or Monday before 4:30pm?

As to the team composition, it sounds like you have the copyright expertise, and let's discuss how to organize and fund a class action.

Cheers”

[45] In response to this, Ms. Lawson “pulled in” David Fewer who was the other lawyer at CIPPIC identified by Ms. Lawson as a copyright expert. At the same time, Ms. Woods drafted a response to some of the questions posed by Paul Bates. Mr. Bates had correctly identified the potential problem that if there was a remedy available at the Copyright Board, this could be used to defeat a class proceeding. The challenge in making a class proceeding viable was to define the proposed class or classes and the appropriate remedies in such a way that the matter did not fall within the existing jurisdiction of the Copyright Board. One of the criteria for certification of a class proceeding under the Ontario legislation was necessity. The court would have to be persuaded that a class proceeding was the preferable procedure for resolution of the common issues.[^11]

[46] Over the next few weeks there were discussions between Ms. Woods, Ms. Lawson, Mr. Fewer and Paul Bates. Ms. Woods was tasked to draft a statement of claim. She consulted various precedents and sent a draft to David Fewer at CIPPIC on February 14, 2007, asking for feedback so that she “could learn from any errors I may have made”. She had not drafted a statement of claim for a class proceeding previously. Mr. Fewer then sent a draft to Paul Bates who returned it with comments on February 19, 2007 and suggested a phone call to include “Jon Foreman” at Harrison Pensa.

[47] Matters at that time were moving quickly. On February 20, 2007, Ms. Lawson sent an email to Mr. Bates and Mr. Foreman copied to Mr. Fewer and Ms. Woods. She indicated that there was agreement in principle to form a consortium. That email contained the following:

“I understand that we've agreed to move forward as a team, and to come up with a consortium agreement asap. You must have precedents for this (we do not), so I suggest that one of you begin with a proposal.

CIPPIC is obviously looking for some significant recovery here, not just of our time (in proportion to that of others), but also in recognition of our "finding" the case. Tanya would like to be similarly treated.

[48] Ms. Woods had, at that point, not provided her entire paper to Mr. Bates or Mr. Foreman although they were by that time privy to the outline of the litigation, to answers Ms. Woods had provided to questions posed by Mr. Bates and to the rough draft of a statement of claim. She advised Mr. Fewer that she would like to hold off sending the paper until the consortium agreement was in place.

[49] On February 21, 2007, Ms. Lawson sent an email to Mr. Fewer and Ms. Woods advising of a discussion with Mr. Bates. That email read as follows:

“Just talked with Paul; he or HP will send us a draft consortium agreement in the next week or so. They are suggesting a 1/3-1/3-1/3 split, with Tanya as part of the CIPPIC share (in which case we'll have to come up with an agreement with you, Tanya). Alternatively, Tanya could be treated as an outside expert (similar to the way Jeremy would be compensated were he to get involved). I think the 1/3 split makes sense given likely workloads (i.e., I expect them to do a lot more work on this than we do).

If it turns out that one party spends way more time/effort on the case than the others, then we might adjust the split at the end of the day, but the expectation would be that Bates and HP would do roughly the same amount of work on the case, and that CIPPIC/Tanya would help out as needed. The split takes into account the value we bring as initiators of the action, as well as our/Tanya's expertise.

I'll send you the proposed agreement once we have it

Cheers

Pippa”

[50] “Jeremy” was a reference to Professor DeBeer who it was thought might be used as an expert. Over the next few days, Ms. Woods continued to press for a draft consortium agreement, revised the draft statement of claim and continued to express concern about confidentiality. On February 28, 2007, she sent Mr. Fewer the revised claim and suggested that they actively needed to identify a representative plaintiff. She suggested they might approach Bob Dylan as one of the “best-known unaffiliated musicians”.

[51] Having a draft statement of claim and a proposed cause of action without a representative plaintiff or a client is a delicate business. Ordinarily lawyers cannot draft up pleadings and then seek out plaintiffs to pursue that hypothetical litigation. Class proceedings are somewhat different because access to justice frequently requires the use of contingency agreements, third party funding agreements, collaboration between law firms and agreements to indemnify and protect a representative plaintiff. But no one has a monopoly over a cause of action.

[52] No matter how skilled the lawyer or how much work has been expended, a potential plaintiff contacted by the law firm is not obligated to retain that lawyer. This is important because without a client, the discussions about dividing up fees or launching the litigation were only hypothetical. Everyone involved, including Ms. Woods, understood this and also understood there would be no fee unless the class proceeding was successfully pursued, certified and counsel compensation was approved by the court. Ms. Woods may not have had a sophisticated understanding of class proceedings, but she understood those points.

[53] On March 6, 2007, there was a lengthy telephone discussion between Paul Bates, Tanya Woods, David Fewer and Philippa Lawson. Jonathan Foreman was not on the call but had apparently told Mr. Bates to advise Ms. Woods that she should call him in about three months to discuss articling. Ms. Woods took detailed notes of the meeting. There was considerable discussion about locating a plaintiff, the possible time frame for the litigation, how fees worked in class proceedings, how court approval was necessary for counsel compensation, the need to docket time, multipliers and percentages. Also discussed was the fact that, while the court would not ordinarily get involved with how fees were divided amongst counsel, any arrangement to split the fees would have to be disclosed to the judge.

[54] Various options were considered. It is apparent that besides the one-third, one-third, one-third split with “Tanya being part of the CIPPIC share” referred to in Ms. Lawson’s email, Ms. Woods had advocated for a 29 percent, 29 percent, 29 percent, 13 percent agreement. In that model, Ms. Woods would be part of the consortium, her share would be 13 percent and distinct from that of CIPPIC. As set out in an email on March 20, Ms. Woods had a subsequent conversation with Jonathan Foreman and she felt as a result that she would be retained as a “consultant to the consortium” for “13 percent of the fees and disbursements award”.

[55] On March 27, 2007, Mr. Foreman sent an email to Ms. Lawson, Mr. Fewer and Ms. Woods to which he attached a draft consortium agreement. He indicated that he had not “entered percentages into the fee division section because we should discuss it as a group to reach an agreement”. He also asked for collective input into the role of Ms. Woods and how that should be reflected in the agreement because “she is not yet a lawyer for the purposes of our Rules of Conduct” and “it is arguably a breach of the rules to indirectly share a fee with a non-lawyer”.[^12]

[56] In argument, Mr. Gibson submitted that Ms. Lawson was in a solicitor client relationship with Ms. Woods. I will return to this point, but the evidence does not support that conclusion. There is no indication that Ms. Woods thought she was retaining CIPPIC to give her legal advice. Mr. Gibson also argues that Ms. Lawson misled Ms. Woods by advising her that she could not be a party to the consortium agreement. As this correspondence shows, it was Mr. Foreman who expressed misgivings about a fee sharing arrangement with a non lawyer breaching the rules of professional conduct. He asked for input and did not completely reject the idea of contracting directly with Ms. Woods. But the concept of “Tanya coming under CIPPIC’s share” had been on the table from the beginning.

[57] No conclusion can be drawn concerning Mr. Foreman’s willingness to consider alternatives. For one thing, neither Mr. Foreman nor Mr. Bates were called as witnesses so the words must speak for themselves. More importantly, Ms. Lawson did not tell Ms. Woods that she could not legally find a mechanism to contract directly with class counsel. She simply responded that if there was “any doubt” “about Tanya’s ability to participate as a consultant in this case, we can subsume her share within CIPPIC through a sub-contract.” She added that “we just want to make sure that she is fairly compensated at the end of the day for her central role in bringing the case”. This was completely transparent. Ms. Woods was copied with the emails and was present for significant meetings and telephone calls.

[58] Mr. Foreman responded that he had never given a “finder’s fee” but had “recognized an initial contribution through a fee division agreement” which is “what I think all of us contemplate for CIPPIC and for Tanya here.” He also referenced a fee adjustment provision in the draft which “is to give room for adjustment if someone ends up making a contribution to the case which has value disproportionate to the agreed fee division.” The consortium agreement remained a work in progress. All of these emails were copied to Ms. Woods who pointed out on March 27 that she would have written the bar exams by July. That was a reference to exams to be written before articling and not the date for her call to the bar which would come a year later.

[59] In a conference call on March 30, 2007, a point of discussion was the fact that the breakdown under the consortium agreement would depend on the likely division of labour. There was also a note about a “five percent fee to Tanya” and that “Tanya is best to go under CIPPIC”. Following that discussion Ms. Lawson sent an email in which she indicated that Ms. Woods was going to indicate what she is “willing to live with in terms of a percent share of fees at the end of the day”. She went on to state that “HP will propose a new consortium agreement after they’ve had a chance to review more material and make a more informed estimate of actual work breakdown.” “Tanya will be assured a minimum share, which will form part of CIPPC’s share.”

[60] On April 4, 2007, Ms. Woods wrote an email to Ms. Lawson and Mr. Fewer. That email contained the following paragraph:

“I have been thinking of the 5% and as a guaranteed minimum I think that is fine. If this were to be on the basis of merely "finding it". That said, myself and CIPPIC have done more to date on the case so I would anticipate (as a minimum) slightly more than 5% at the end of the day. Which I think is reasonable. As for the point below (re: insolvency), Perhaps HP can draft the contract between CIPPIC and I taking this into account???”

[61] This indicates that Ms. Woods thought she should receive more than five percent but was prepared to live with a five percent minimum guarantee. She seemed to think that Harrison Pensa would be drafting the contract between CIPPIC and Ms. Woods (although that never occurred). The comment about insolvency referred to an interim exchange of emails in which Ms. Woods had asked what would happen if CIPPIC became insolvent. Ms. Lawson had replied that CIPPIC was “(legally speaking) just part of U of O”.

[62] On April 11, 2007, Ms. Lawson wrote to Mr. Foreman and Mr. Bates with a copy to Ms. Woods, Mr. Fewer and another lawyer at Harrison Pensa. The text of that email was as follows:

“Hi Jon and Paul - This is to confirm that Tanya's contribution to the case will be treated as part of CIPPIC's contribution, and that she is fine with a 5% minimum.

As for our estimated contribution to the entire case, I find it extremely difficult to judge at this early stage. We had originally talked about a three-way split going in, recognizing that this could change dramatically depending on how the case develops. Given the uncertainties of the case, I don't think it matters that much what we estimate right now. If you would be more comfortable with a different split going in, let us know.

BTW, I'm away Friday and next week

Thanks

Pippa”

[63] There was then some back and forth between Ms. Lawson and Mr. Foreman. Mr. Foreman wanted to put off finalizing the fee split until they had a little more information about the size of the case and the percentage of the pending list which might be in play. He acknowledged that Ms. Woods would not be a party to the consortium agreement. Ms. Lawson responded on May 9 that she was “OK, then, putting this off until later in June, as long as we can agree now that CIPPIC’s share will be no less than 10% (from which Tanya’s minimum five percent share will come).” Ms. Woods was copied with the email. To that Mr. Foreman responded “please don’t worry. We want CIPPIC to be rewarded here. I agree that it should not have less than 10% as you ask.”. Ms. Lawson considered that sufficient for the time being.

[64] Ms. Woods was privy to all of this and had on more than one occasion spoken directly to both Mr. Bates and Mr. Foreman. It was abundantly clear by April 11 that the form of the consortium agreement was to be a three way agreement between CIPPIC, Bates Barristers and Harrison Pensa. That agreement would provide for a presumptive split of the fees (yet to be determined) but adjustable based on how much work was ultimately done by each party to the agreement. CIPPIC was to be guaranteed a minimum share of ten percent and would pay Ms. Woods a minimum of 50 percent of that share (five percent of the award approved for class counsel). It is also clear from reading the email exchanges that what was under discussion was division of the counsel compensation and never division of the total award to the class.

[65] On the same day, May 9, 2007, Ms. Woods submitted a memo of law detailing why a class proceeding was an appropriate approach to the problem of the unlocatables to Professor DeBeer. This was in fulfillment of her self-directed research project. She asked Mr. Fewer to send a copy of her draft statement of claim to Professor DeBeer. Despite her evidence at trial that she felt Professor DeBeer had tried to take control of her paper in 2006, she was now submitting a detailed memorandum of law and her draft statement of claim to the same professor for academic credit. As the exchange of emails also shows, there had been discussion about retaining Professor DeBeer as an expert to assist with the class proceeding.

[66] There was an incident which upset Ms. Woods later in May. Mr. Fewer was supposed to send a copy of her “SOCAN paper” to Mr. Foreman and Mr. Bates, but instead he sent the memo of law submitted to Professor DeBeer. Ms. Woods asked him to recall it if possible and to send the right one. No harm seems to have come from this, but it is evident that Ms. Woods remained extremely nervous about being squeezed out of the class proceeding. At this point, she was prepared to provide her memo of law to her professor, but seemingly not to Mr. Bates and Mr. Foreman. She was also exploring publication of the SOCAN paper at this time. As noted, her SOCAN paper (her December 2006 paper updated and revised) did not directly discuss the class proceeding.

[67] While she submitted her memo of law on class proceedings and her draft statement of claim to Professor De Beer, Ms. Woods was circumspect about revealing her full involvement in the class proceeding to him and though him to Mr. Bouchard at the Copyright Board. That is because by May of 2007 she had pursued and obtained an articling position at the Copyright Board. She did not want to disclose her financial interest in the class proceeding but was alert to a possible conflict of interest.

[68] On June 24, 2007, she advised Ms. Lawson and Mr. Fewer that she had “disclosed to Jeremy that I am not part of the consortium however I have not disclosed any other information regarding my compensation or any other details of the consortium agreement”. She indicated she would be meeting with Mr. DeBeer to discuss the conflict and confidentiality problem and would also be contacting the Law Society to “get some additional clarity”. Subsequently, on July 5, 2007, she consulted Blair Crew who was another lawyer working for the university at a different legal clinic (University of Ottawa Community Legal Clinic).

[69] On July 9, 2007, Ms. Woods began her articles of clerkship for the Copyright Board. This was a great opportunity to serve as a law clerk for the adjudicators at the copyright board. Ms. Woods described it in her evidence as similar to clerking for the Superior Court. At that time, if not before, she ceased to be actively involved in the class proceeding.

[70] Ms. Woods did not article with any of the lawyers acting as class counsel. Although in argument Mr. Gibson accused CIPPIC of failing to honour a commitment to find articles for Ms. Woods working on the class proceeding, there is no evidence she sought that out or followed up with the suggestion that she contact Mr. Foreman. Furthermore, when she started articling, the consortium agreement was not finalized and the class proceeding had not yet been launched. In any event, she obtained articles at the Copyright Board with the support of Professor DeBeer. She was also obtaining reference letters from Ms. Lawson to pursue further academic study and scholarships. The university appears to have supported her in her professional and academic pursuits.

[71] In July 2007, when Ms. Woods started her articles and sought legal advice about conflict of interest, the consortium agreement had not been finalized nor had the subcontract with Ms. Woods. Ms. Woods was understandably concerned about this. She sought reassurance from Ms. Lawson. On July 17, 2007 she wrote as follows:

“To clarify, it is a guaranteed 5% minimum (which may be negotiably higher) stake in the total amt (so it is 5% of total fees/costs award to all members of consortium vs. 5% of CIPPIC's cut only).

This is what was agreed on because I couldn't be part of the consortium.

If you have questions let me know or please let me know if this is not what you understood.

Thanks again Pippa!

Tanya”

[72] Ms. Lawson responded the same day:

“Yes - that's my understanding too, and I think it was clear enough that we don't need to restate it at this point in time. I expect to finalize the consortium agreement once we file (your part being already finalized).

Do let me know what advice you get from Blair Crew.

Pippa”

[73] I pause again to note the wording – “5% of total fees/costs to all members of the consortium”. This cannot possibly be construed to mean “five percent of whatever damages are ultimately awarded to the class”. The amount that CIPPIC and Ms. Woods had agreed to was a share of the amount ultimately received by CIPPIC that was at least five percent of the total fees or costs awarded to class counsel.

[74] On October 22, 2007, Tina Nanov at Bates Barristers sent a final draft of the consortium agreement to Ms. Lawson. The agreement was to reflect a discussion the previous week and the roles of each consortium member and the terms agreed upon. Ms. Lawson responded that the “agreement is fine with us” adding that CIPPIC’s agreement with “Tanya is as previously agreed: 5% minimum of total, to come out of CIPPIC’s (tentative) 20% share.” The agreement was finalized although CIPPIC was not able to produce a signed copy at the time of the trial. It may only have been confirmed by exchange of emails. As I will come to, it was also amended in November of 2007 to expressly guarantee CIPPIC would get a minimum of ten percent of the legal fees.

[75] Ms. Woods was not copied in the emails of October, but on November 13, 2007, Ms. Lawson sent her a copy of the “confidential and privileged consortium agreement between us and the law firms.” She suggested to Ms. Woods that Ms. Woods use it as a “precedent from which to draft your own agreement with CIPPIC”. The consortium agreement set out the roles of the lawyers and law firms and of CIPPIC and provided for the sharing of fees. The relevant section entitled fee division read as follows:

“4. FEE DIVISION

a) A Retainer Agreement will be implemented with the proposed representative plaintiff on a contingent fee basis.

b) The legal fees generated by the lawsuit are to be divided on a provisional basis as follows:

i. 40% to HP;

ii. 40% to BB; and

iii. 20% to CIPPIC.

BB reserves the right at its sole discretion to make a donation to CIPPIC at the conclusion of this matter.

c) The percentage fee distribution described above is intended to reflect the contribution of resources by each of the parties to the prosecution of the lawsuit. In the event that there is any material deviation between the resources contributed and the percentage fee division described above, the fee division may be modified to reflect the actual contribution of resources by each of the parties.

d) In the event that interim fees and disbursements are received by way of awards of costs, proceeds of individual settlements, or otherwise, such fees should be applied first to reimburse HP for any disbursements incurred in association with experts and then to reimburse consortium members for their disbursements outstanding at the time of such receipt. If there is a balance, such balance shall be divided among HP, BB and CIPPIC pro rata based on their properly docketed time with respect to the subject matter of the Costs Order.

e) HP shall be compensated for the carriage of disbursements in respect of experts by the application of a rate of interest at prime plus 2% per annum. Such compensation for disbursements carried by HP shall be payable before the establishment of any fee for distribution to the parties.

f) It is clearly understood that ultimate payment of any contingent fee is subject to court approval. It follows that the foregoing paragraphs regarding fee distribution and compensation for disbursements must be approved by the Court.

g) In the event of any dispute between the parties regarding fees, such matter will be settled by final and binding arbitration pursuant to the Arbitrations Act of Ontario by an Arbitrator to be agreed upon by the parties, who shall be a retired judge of the Ontario Superior Court or Court of Appeal. Any decisions shall be summarily determined.”

[76] On November 16, 2007, Ms. Woods sent Ms. Lawson a draft agreement modelled somewhat on the consortium agreement. In it she provided that she would docket her time at $150 per hour and track any disbursements (such as photocopying) she incurred. The draft contained the following provisions regarding fees:

“4. FEE DIVISION AND PAYMENT

a) This Agreement acknowledges the existence of a Retainer Agreement between CIPPIC and its collaborators and the representative plaintiff(s) on a contingent fee basis.

b) As such it is agreed that TW will not demand compensation upon completion of her work but will be compensated on a contingent fee basis in the amount of not less than 5% of the legal fees which include pre and post judgment interest and tax that are generated by the lawsuit.

c) It is understood that CIPPIC will ensure the timely receipt of TWs fees and disbursements.

d) TW reserves the right at her sole discretion to make a donation to CIPPIC at the conclusion of this matter.

e) The percentage fee distribution described above is intended to reflect the contribution of resources by TW to CIPPIC, its collaborators and the prosecution of the lawsuit. In the event that there is any material deviation between the resources contributed and the percentage fee described above, the fee may be modified to reflect the actual contribution of resources by TW notwithstanding the agreed minimum fee of 5%.

f) In the event that interim fees and disbursements are received by way of awards of costs, proceeds of individual settlements, or otherwise, upon receipt of such fees to CIPPIC, TW should be reimbursed for the disbursements outstanding at the time of such receipt.

g) In the event that there is a balance, such balance shall be divided among HP, BB and CIPPIC pro rota based on their properly docketed time with respect to the subject matter of the Costs Order. (Pippa how do I find my 5%, if there is a settlement, I still want a minimum of 5% total for settlement fees received.)”

[77] There was a subparagraph h) which was an arbitration provision that neither party has sought to invoke. It was not mandatory. Ms. Lawson drafted a subparagraph g) which read as follows:

“g) In the event that there is a balance, such balance shall be divided among HP, BB and CIPPIC pro rota based on their properly docketed time with respect to the subject matter of

the Costs Order. CIPPIC agrees to provide TW with 5% of the total balance, out of its pro-rota share of the balance.”

[78] There were various other drafts exchanged between Ms. Lawson, Mr. Fewer and Ms. Woods culminating in a final draft prepared by Ms. Woods. During the exchange of emails, Ms. Woods pointed out that the consortium agreement itself did not guarantee a minimum of ten percent to CIPPIC and Ms. Lawson then sought that clarification from the consortium. On December 17, 2007, Ms. Nanov sent another “final draft of the consortium agreement”. She had added a line to paragraph 4 c) to clarify that regardless of circumstances, CIPPIC was to receive no less than ten percent of the amount awarded for counsel compensation. Ms. Woods’ minimum of five percent was to be paid from CIPPIC’s share.

[79] Ultimately Ms. Woods and CIPPIC signed an agreement. Ms. Lawson signed it on behalf of CIPPIC on February 6, 2008 and Ms. Woods signed it on March 17, 2008. It is of note that Ms. Woods obtained a nine-page opinion letter about conflict of interest from Blair Crew on January 3, 2008. As just mentioned, the signed agreement contained almost exactly the same language regarding fee division and payment as the original draft agreement with the addition of the subparagraph g) drafted by Ms. Lawson. Ms. Woods’ compensation was to be “on a contingent fee basis in the amount of not less thon 5% of the legal fees which include pre and post judgment interest and tax that are generated by the lawsuit”.[^13]

[80] Admittedly, the reference to “pre and post judgement interest” is confusing, but when read in the context of the entire agreement and the exchange of emails, it is clear that the parties were always talking about a share of the counsel fees. It was understood that the counsel fees would have to be approved by the court at the end of the class proceedings. It was also understood that those counsel fees might be based on a contingency fee agreement with the representative plaintiff, but CIPPIC never agreed to guarantee Ms. Woods a particular share of the total award. Nor could it because there could never be any guarantee that the court would approve any particular amount of compensation. Recall as well that it was Ms. Woods who pointed out to Ms. Lawson that the consortium agreement (which clearly dealt with fee division) did not guarantee CIPPIC ten percent of the fee – necessary for CIPPIC to guarantee Ms. Woods five percent. Ms. Lawson then obtained the amendment to the consortium agreement. Fee division was always what was being discussed.

Validity of the Agreement

[81] As the history outlined above discloses, this contract was intended to formalize an agreement that had been discussed over a number of months. The essential terms of the agreement had been confirmed in the email exchange of July 17, 2007 if not before, but Ms. Woods had been invited to draft a formal agreement in case Ms. Lawson was no longer with CIPPIC by the time the class proceeding came to a conclusion. That invitation came from Ms. Lawson in November of 2007, after the consortium agreement was finalized. After several drafts were exchanged, it was Ms. Wood’s final draft that was signed by CIPPIC on February 6, 2008 and by Ms. Woods on March 17, 2008.

[82] As already discussed, the written evidence clearly supports the evidence of Ms. Lawson and Mr. Fewer that the contract was an agreement to share a portion of the counsel fees. I accept that evidence and I do not accept Ms. Woods evidence that she believed she was going to share in the $50 million. She would share in it indirectly insofar as the approved counsel compensation might ultimately be based on a contingency fee agreement with the plaintiff. It was apparent that, at best, the plaintiff’s compensation would be a percentage of a percentage if the court approved a fee based on a contingency retainer rather than a multiplier of hourly rates. The written record belies the plaintiff’s evidence of her subjective belief. I therefore reject the plea of non est factum. Read in context, having regard to the discussions and the email exchanges, there is no doubt that the plaintiff had agreed (however reluctantly) to a guarantee of five percent of the counsel fee.

[83] Absent entirely from this leisurely history of contract formation or from any of the communication reduced to writing are any hallmarks of pressure or duress. I reject the suggestion that the contract is invalid on those grounds. There is no evidence that CIPPIC was applying pressure to the plaintiff to sign the agreement. To the contrary, the parties had reached agreement in July of 2007. The written agreement was formalized at CIPPIC’s suggestion, based on Ms. Woods’ drafting in early 2008.

Legal Advice, Agency and Misrepresentation

[84] There is nothing in the documentation which suggests that Ms. Woods believed she was retaining CIPPIC as her legal counsel. To the contrary, when Ms. Woods did need legal advice about potential conflict of interest, she consulted Mr. Crew and obtained a detailed opinion letter. Ms. Woods could equally have consulted counsel about her business relationship with CIPPIC – although perhaps not Mr. Crew since he, like Ms. Lawson, was ultimately employed by the university.

[85] The plaintiff also asserts that the university, through Ms. Lawson or Mr. Fewer, misrepresented the facts or the law. Ms. Woods suggested that it was a misrepresentation that she could not be a party to the consortium agreement. As the emails show, this was an issue raised by Mr. Foreman and whether it would have been possible to include her in the agreement contingent upon her call to the bar or to find another mechanism to contract with her directly does not seem to have been the subject of serious consideration. Certainly, there is no record of legal advice on this point. It was simply determined that it would be simpler for CIPPIC to worry about Ms. Woods. In addition, by the time the consortium agreement was signed, Ms. Woods had accepted the articling position with the Copyright Board and was no longer actively participating in the class proceeding.

[86] Ms. Lawson testified that she never purported to give the plaintiff legal advice. There is no advice from Ms. Lawson that it was not legally possible for Ms. Woods to have a contract with Mr. Foreman and Mr. Bates. It is the case that there is a prohibition in the Rules of Professional Conduct against splitting fees directly or indirectly with a person who is not a lawyer and it was to that Mr. Foreman was referring. CIPPIC simply agreed that they would subsume Ms. Woods share within their share and would sub-contract with her.

[87] Although Mr. Foreman had, at one time apparently, been prepared to discuss a 13 percent share to Ms. Woods, he had also been prepared to consider a 33 percent share to CIPPIC. The ultimate agreement was for between ten percent and 20 percent to CIPPIC with Ms. Woods share to be part of CIPPIC’s share. It bears repeating that neither Mr. Foreman nor Mr. Bates were called as witnesses and no claim is asserted against them. The evidence suggests the lawyers expressed reluctance to contract directly with Ms. Woods in a fee sharing arrangement and this was accepted by CIPPIC and Ms. Woods. The evidence does not support a finding that the only reason for this state of affairs was erroneous advice or a misstatement of the facts or the law.

[88] I reject the submission that Ms. Woods relied on drafting advice from Ms. Lawson or CIPPIC. To the contrary, when Mr. Fewer proposed substantial rewording of the agreement, Ms. Woods largely rejected his changes. Ms. Woods of course was not legally unsophisticated. She had studied law in England and in Canada for at least four years, had conducted advanced legal research, prepared sophisticated academic work, was on the verge of qualifying for the bar and was applying for post-graduate legal studies. She certainly knew how to seek out legal advice and the utility of a legal opinion.

[89] Ms. Lawson also testified that she never agreed to act as agent for Ms. Woods. This may be irrelevant because no agreement was concluded between Ms. Woods and the law firms. The evidence does not support a conclusion that Mr. Bates and Mr. Foreman would have agreed to pay Ms. Woods more than CIPPIC was prepared to pay her if they had contracted with her directly. Certainly, Ms. Lawson made it clear to Mr. Bates and Mr. Foreman that CIPPIC wanted “Tanya” to be fairly compensated, but Ms. Woods was privy to all of those communications and to the negotiations. She also communicated directly with both Mr. Bates and Mr. Foreman.

[90] Ultimately, the plaintiff understood she was not going to have a direct contractual relationship with the law firms but only with CIPPIC and she accepted that reality. The evidence does not support a finding that Ms. Lawson was negotiating for Ms. Woods or acting as her agent or that she somehow betrayed her trust. Ms. Woods was quite capable of putting forward proposals of her own and did so on more than one occasion.

[91] The plaintiff also argues that CIPPIC misrepresented its sophistication and experience in negotiating with class counsel. That is not the evidence. Ms. Lawson testified that she advised Ms. Woods that she had little experience with class proceedings, and it would be necessary to work with experienced class counsel. In fact, as the emails show, she thought it would be necessary to work with more than one counsel. CIPPIC never undertook to negotiate on Ms. Woods’ behalf. Rather, the understanding was that Ms. Lawson would reach out to Paul Bates to see if he thought the proposed class proceeding was worthwhile pursuing. In addition, as I will describe, in my view the ultimate agreement to share the counsel fee in a flexible manner with a guaranteed minimum was reasonable.

Duty of Care & Fiduciary Obligations

[92] Counsel for the plaintiff argues that the university and CIPPIC stood in a fiduciary relationship to Ms. Woods. The law in Canada does not recognize that the relationship between a university and a student is inherently a fiduciary relationship.[^14] It has been accepted that the relationship between a professor and a student is a special relationship which, in appropriate circumstances, gives rise to a heightened duty of care particularly in instances which may threaten a student’s potential career.[^15] It does not follow that the same duty attaches to every relationship between a student and the university. The evidence does not persuade me that Ms. Lawson or Mr. Fewer ever undertook to put Ms. Woods interests above all other interests which would be necessary to a finding that they were fiduciaries.[^16] I have already found that they were neither in an agency relationship nor a solicitor client relationship.

[93] Even if there was a special relationship, however, I would not find that it included the obligation not to pursue the class proceeding unless the plaintiff was getting the best deal possible. I would not conclude on this evidence that CIPPIC had an obligation to dispute with the law firms in the consortium over the proposed share of the counsel fee. No evidence was put before me to suggest that the findings made by Justice Strathy in the class proceeding were erroneous and as I will address momentarily, those findings and the evidence on which they were based indicate that by the time the settlement and of court approval, the amount of time, work and risk assumed by the law firms dwarfed the contribution of CIPPIC.

[94] All contractual relationships in Canada are subject to an inherent organizing duty of good faith performance.[^17] I do not find that CIPPIC at any time acted in bad faith.

[95] CIPPIC had assumed the obligation to assist class counsel in pursuing the class action and to insist on its minimum guaranteed share of the counsel compensation. On the evidence I cannot find that CIPPIC had an independent duty to maximize the return for Ms. Woods. CIPPIC had not undertaken to promote or safeguard Ms. Woods economic or commercial interests beyond the contingent compensation they had agreed to pay. The consortium was always prepared to live up to the agreement with CIPPIC and CIPPIC was always prepared to honour the agreement with Ms. Woods.

Unconscionability & Reasonableness

[96] There is an overriding equitable principle of unconscionability. This applies in a situation where enforcement of the agreement would shock the conscience. One aspect of unconscionability is whether the result is unfair or not, but the doctrine cannot be invoked simply because a party to a contract wishes they had made a better deal. Generally, unfairness is measured not simply by the result but by unfairness in the negotiation process. So unconscionability also encompasses issues such as duress, inequality of bargaining power, and unjust enrichment.[^18] As I have already discussed, there is no basis for concluding that the agreement was the result of duress and while theoretically a university has more bargaining power than a law student, an examination of the evidence does not illustrate any use of unfair bargaining tactics or use of the university’s superior financial resources to overcome the will of the plaintiff.

[97] The university is not unjustly enriched by enforcing the agreement. It was always within the contemplation of the parties that CIPPIC would benefit from the class proceeding. CIPPIC entered into a consortium agreement in which it would be entitled to an adjustable split of the fees starting with a presumptive 20 percent, but to be reflective of the overall contribution of each of the clinic and the two law firms. By the time the class proceeding had been launched, litigated and resolved, CIPPIC’s role had been dwarfed by the time and effort expended by Bates Barristers and Harrison Pensa.

[98] Before issuing a claim, class counsel had to identify and recruit a representative plaintiff. Two completely reworked and amended statements of claim were required. Because the class proceeding appeared to be the solution to a problem the industry recognized, it had been anticipated that the defendants would quickly move to settle the proceeding. That turned out not to be the case. As discussed by Justice Strathy when he ultimately approved the proposed counsel fee, although it was ultimately settled, the matter was hard fought. This is significant because, according to Ms. Lawson, the amount of work done by the law firms, the expense they had to carry and the risk involved, changed materially.

[99] In the consortium agreement, it had been agreed that CIPPIC would be entitled to up to 20% and no less than 10%t of the counsel fee ultimately approved by the court. Ms. Lawson testified that the amount was flexible because it could not be known in advance who would do the most work or how the work would be divided. By the time of the settlement, according to Ms. Lawson, it was apparent that the lion’s share of the work had been done by the law firms. CIPPIC was offered ten percent of the counsel fee and it accepted that amount.

[100] In approving the counsel fee, which had been opposed by certain of the defendant collectives, Justice Strathy had the following to say:

“85 Having supervised the proceeding and having reviewed counsel's time records, it is my view that the assertion that this case was over-lawyered is unfair and erroneous. Class Counsel were a consortium consisting of Bates Barristers, Harrison Pensa and the Canadian Internet Policy and Public Interest Clinic, a legal clinic representing consumers and public interests in intellectual property and other matters. Most of the work was done by Mr. Bates, the more senior of the lawyers (1983 call), and by Mr. Foreman (2002 call). Mr. Foreman spent at least 1,670 hours on the file. Mr. Bates spent about 800 hours. The total time spent on the matter, by all personnel in the Class Counsel consortium, was around 6,000 hours, having a face value of $2.2 million. Although there were various juniors, paralegals and others involved in the file, I have no sense at all that this is a case in which everyone from the most senior partner to the most junior clerk was thrown at the file in order to pump up the fee. Nor do I have the sense, at all, that any of the lawyers involved was engaging in unnecessary or redundant work. On the contrary, my observation is that Class Counsel conducted themselves efficiently throughout.”[^19]

[101] Pursuant to the consortium agreement, class counsel paid ten percent of the award to CIPPIC. The university has received $656,793.64 which it holds in trust pending the result of this proceeding. Clearly CIPPIC will not be unjustly enriched by paying 50 percent of its share of the fee to the plaintiff. It bears repeating that the other class counsel are not parties to this litigation and there is therefore no justiciable allegation that Mr. Bates or Mr. Foreman or their law firms were unjustly enriched at the plaintiff’s expense. Had such an allegation been made, it would have depended on proving that the ultimate fee split was unfair to CIPPIC and hence to the plaintiff.

[102] The plaintiff may be unhappy that CIPPIC did not press more vigorously for a greater share of the fee at the time it was divided, but she is really not in a position to argue that CIPPIC made a contribution to the success of the litigation equivalent to that of the other lawyers. As the evidence discloses, the plaintiff’s own active involvement in the crafting of the class proceeding ceased before the action was launched. According to Ms. Lawson’s evidence and Mr. Fewer’s evidence, apart from some early research assistance, once the litigation got underway, CIPPIC played no active role.

[103] Accepting that the plaintiff’s marriage of the idea of the class proceeding with her knowledge of the pending list was the stroke of genius that made the litigation possible, I agree with the submissions of counsel for the university that the plaintiff is exaggerating the importance of her contribution. Having a brilliant concept for litigation is one thing. Carrying it into action and successfully pursuing it is quite another. The plaintiff deserves great credit for her initiative. Very few law students can say that they developed a concept for a multi-million-dollar class proceeding in law school and solved an intractable problem in the music industry. She can take pride in this. It does not follow that Ms. Woods has somehow been cheated if she receives only five percent of the counsel fee under these circumstances.

[104] In preparation for the eventual approval of counsel fees, class counsel had kept dockets and records and asked CIPPIC to do likewise. Ms. Woods prepared her own dockets which she valued at $150 per hour, more than the typical rate used for law students or law clerks. By her own calculation, she spent 473.32 hours working on the unlocatables action and submitted a pro forma invoice for around $63,000. I note that if all that time was valued at $150 per hour it would have come to roughly $71,000 but of course it was never contemplated that Ms. Woods would be compensated at an hourly rate. The object of the docketing exercise was to persuade the court that a contingency award was reasonable. One way of assessing that is to look at the docketed time and to compare it to the contingency by applying multipliers.

[105] It is true that Mr. Foreman did not include all of Ms. Woods’ time in the dockets he submitted to the court. Mr. Foreman sent a lengthy email to Mr. Fewer on September 6, 2011 in which he explained the approach taken by the courts to approving counsel fees in class actions. He spoke about contingencies and he spoke about how the courts will frequently look at docketed time and at potential multipliers as a way of checking the reasonableness of the fee. He spoke about the need to maximize docketed time, but to be able to defend against criticisms of padding dockets or over lawyering.[^20] With respect to Ms. Woods’ dockets, he had the following to say:

“In the case of CIPPIC, I accepted all of the docketed time and all of the disbursements with the exception of some of Tanya Woods' I wanted to put as much of her time in as I could but if we were audited or called to account for It in any way, we would have significant trouble. Her hours are just excessive and poorly particularized The early work recorded by her clearly reflects her time spent exclusively on an academic assignment. Her late docketed work focuses exclusively on her negotiating with CIPPIC to obtain a piece of any fee and subsequently to her monitoring/protecting her personal investment in the file. There is little/no service to the case or the class in much of that - in fact, her late actions are adverse to the interests of the class. Our credibility on the whole is threatened by her alleged docketed time to the extent that we put it forward. Her full docketed hours times her hourly rate added up to about $63,000. I cut her to $40,000 which I still think is objectively generous but at least I can show a write down to reflect the adverse factors if audited. The result is a summary of docketed time as follows: i) HP - $1.24 million, ii) BB $780 thousand and iii) CIPPIC - $21O thousand. I have largely excluded HP's time invested in the fee approval motion which has been extensive.”

[106] As mentioned, several times, Mr. Foreman was not called as a witness in this proceeding. This email cannot be used as proof that Ms. Woods did anything adverse to the action or the class or that she had docketed time that she ought not to have. I make no such findings. The point is simply this; even had her time been included for the full amount she had submitted, it would have been much less than the time ultimately spent by Mr. Fewer on behalf of CIPPIC and orders of magnitude less than the time spent by Bates Barristers or Harrison Pensa. It is worth noting that five percent of the $2.2 million in docketed time submitted for approval would have been $110,000. On that basis, even if all of her docketed time had been recognized, her share of the value of the work was less than five percent.

[107] Of course, the value of Ms. Woods’ contribution cannot be valued solely by time spent. The triggering contribution of her concept for the class proceeding was the basis for CIPPIC agreeing to guarantee her a share of the fee. It was also the basis for the minimum guarantee to CIPPIC in the consortium agreement. But hours spent and reasonable hourly rates for law students and law clerks and lawyers of different amounts of experience are at least one of the factors usually examined by courts in assessing legal fees. Another factor in assessing legal fees for class counsel is the financial risk and the costs risk borne by class counsel. Ms. Woods bore no risk of either.

[108] In my view, if there was no agreement and Ms. Woods’ contribution had to be valued on a quantum meruit basis, the proposed fee to her would not be unreasonable. Beyond her contribution of the concept, her research papers (for which she also received academic credit), some further research and a crude attempt at drafting a statement of claim, she did no work on the litigation after it was launched, carried no risk and was not further involved in litigation strategy. As counsel for the university points out, the litigation was ultimately prosecuted on the basis of fresh as amended pleadings. The fact that some of the issues identified in Ms. Woods’ memorandum of law or her paper are echoed in the reasons of Justice Strathy do not demonstrate reliance on those documents. Rather, in the context of a memorandum of law, it shows that Ms. Woods had appropriately summarized the legal principles and tests as enunciated in the legislation and the case law. The ultimate litigation strategy, the named defendants and even the representative plaintiff (who had to be changed prior to the final approval) were significantly different from what Ms. Woods had originally proposed.

[109] I conclude that the agreement is not in any way unconscionable. Far from it, I consider it to be reasonable and fair compensation. It is easy to be blinded by the $50 million owed to the musicians on the pending list. That was money owed to the members of the class. Class counsel spent almost three years in litigation and each law firm carried roughly a million dollars in work in progress as well as the disbursements. They indemnified the representative plaintiff. They negotiated the settlement. They prepared the documents for approval of the settlement and argued before the court.[^21] Ms. Woods did none of that.

Additional Counsel Fees

[110] There is one other matter to address. In addition to the counsel fee paid under the contingency retainer and approved (at 15 percent) by Justice Strathy, there was also provision for class counsel to submit further legal bills in relation to the administration of the individual claims. Justice Strathy had this to say:

“In addition, Class Counsel shall be entitled to render invoices to CSI on an hourly rate basis, for any services rendered in the implementation of the settlement. All such invoices shall be approved by me or by the judge case-managing this proceeding in the future.”

[111] There is no suggestion that this work or these hourly rate fees for settlement administration are covered by the consortium agreement. CIPPIC is not involved and is not entitled to any further fee split. A quick examination of the Toronto court file indicates that Justice Belaboba who is now the case management judge, has been called upon to approve modest fees every year or two.

[112] In my view, these additional hourly rate fees for settlement administration are not covered by the plaintiff’s agreement with CIPPIC.

Additional Evidence

[113] Counsel for the plaintiff attempted to file additional evidence along with his written submissions. Primarily these were the financial statements for the university. I indicated I would rule on the admissibility of that evidence when I gave my decision. The fact that the University of Ottawa is a large institution with a multi million-dollar budget and is solvent was not an issue at the trial. This evidence would only have been relevant had I decided this was an appropriate case for punitive damages. It is not. Had I decided to award punitive damages, I would likely have conducted a further hearing to consider what level of damages would have been appropriate to serve the appropriate punitive function.

[114] Punitive damages are exceptional and can be awarded in situations in which the conduct of the defendant is so shocking to the conscience of the court that the usual measure of compensatory damages is insufficient. In contract cases, an award of punitive damages normally requires proof of an independent actionable wrong. At minimum this would require a finding of bad faith.[^22] Under the circumstances, since I make no finding of bad faith and make no award of damages beyond what the contract requires, this evidence is irrelevant and I have neither admitted it nor reviewed it.

Assignment

[115] Counsel for the university raised an issue arising from the assignment of her rights by Ms. Woods to the plaintiff corporation. He questioned whether a corporation could assert all of the rights and damages contained in the statement of claim. Because the only obligation I have found owing is the amount due under the contract, I do not share those concerns. In effect this was a contingent account receivable owing to Ms. Woods in her personal capacity. She can assign that debt to her corporation if she wishes to. Since it appears to be a closely held corporation, presumably she could reassign those rights if she chooses. In that case, any amount owing to Ms. Woods should be paid to her personally or to her corporation at her option.

Conclusion

[116] This is not a case about copyright. It is a case about compensation. The evidence is abundantly clear that the plaintiff provided her papers, research and draft pleading to CIPPIC for the precise purpose of promoting and advancing a class proceeding. When she approached CIPPIC she hoped that her work would be useful in resolving the problem in the recording industry, that she would enhance her education, could work on the class proceeding, that it would benefit CIPPIC and also that she might obtain some compensation.

[117] Ultimately, following considerable discussion, it was agreed that CIPPIC would enter a consortium with two experienced class proceedings law firms. Ms. Woods reached an agreement with CIPPIC under which she was guaranteed a minimum of five percent of the counsel fee ultimately approved by the court if the class proceeding was successful. Her own contribution to the prosecution of the class action ceased in June of 2007, when she began to article for the Copyright Board.

[118] I consider the agreement to be binding and enforceable. For the reasons stated above, Ms. Woods is entitled to 50 percent of the amount paid to the university by the consortium. That amount is $328,396.82 plus accumulated interest if any.

[119] None of the other causes of action asserted against the university have any merit or lead to the conclusion that damages should be awarded in addition to the funds properly owing under the contract. Accordingly, the action is otherwise dismissed.

Costs

[120] I am certain there will be issues concerning the costs of this trial. I encourage the parties to resolve them without the need for further adjudication, but if that is not possible within 30 days then counsel may make arrangements to speak to the matter.

Sealing

[121] During the trial, counsel for the university submitted that certain exhibits should be sealed and they were provisionally segregated from the other exhibits. A sealing order may or may not be appropriate having regard to the open court principle.[^23]

[122] Should counsel for the university wish to make submissions regarding a sealing order he is to advise the court and make arrangements to speak to the matter by September 10, 2021.

Regional Senior Justice C. MacLeod

Date: August 27, 2021

COURT FILE NO.: 13-57387

DATE: 2021/08/27

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Tanya Woods and 2285675 Ontario Inc., Plaintiffs

AND:

University of Ottawa, Defendant

BEFORE: Regional Senior Justice Calum MacLeod

COUNSEL: D. Kenneth Gibson, G. Boyd Aitken & Phillip Wallner, for the Plaintiffs

Jamie A. Macdonald & Crystal Li, for the Defendant

DECISION AND REASONS

Regional Senior Justice Calum MacLeod

Released: August 27, 2021

[^1]: The class proceeding is Northey v. Sony Music Entertainment Canada Inc. et. al., Toronto Court File No. CV-08-360651CP. The action was settled but the file remains active due to ongoing claims administration and periodic court approval. [^2]: Due to the COVID 19 restrictions, the trial took place on the Zoom videoconference platform. There was a delay between the two halves of the trial because the second provincial lockdown resulted in an adjournment request. Closing arguments were made in writing. [^3]: See Baker (Estate) v. Sony BMG Music (Canada) Inc., 2011 ONSC 1805 & 2011 ONSC 7105 (Commercial List) [^4]: Copyright Act, RSC 1985, c. C-42 as amended 2005-12-12 and in force to 2012-11-06 [^5]: I will use the generic term “counsel compensation” to describe the amount of compensation ultimately approved for class counsel in the class proceeding inclusive of disbursements and HST pursuant to s. 32 of the Class Proceedings Act, 1992. [^6]: Baker Estate v. Sony BMG Music (Canada) Inc. et. al., 2011 ONSC 7105 (SCJ) [^7]: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 SCR 633 See paras.47 and 57 and see paras 58 and 59 with regard to objective intent, subjective intent and the parol evidence rule. [^8]: Copyright Act, RSC 1985, c. C-42 as amended [^9]: 2004 SCC 13, [2004] 1 SCR 339 [^10]: See Waldman v. Thomson Reuters Corp, 2012 ONSC 1138, 22 CPC (7th) 33 (SCJ) [^11]: S. 5 (1) (d), Class Proceedings Act, 1992, SO 1992, c. 6 as amended to June 22, 2006 and in force until July 7, 2020. Note that amendments passed in 2020 add criteria to this subsection that to some degree were already reflected in the jurisprudence. See s. 5 (1.1) of the current statute. [^12]: See Rule 2.08 of the Rules of Professional Conduct, Law Society of Upper Canada (as it then was) in force until October 1, 2014. Now Rule 3.6-7, Rules of Professional Conduct, Law Society of Ontario. [^13]: The full text of the signed agreement is appended as Appendix A to these reasons [^14]: See for example Creppin v. University of Ottawa, 2015 ONSC 4449, 128 OR (3d) 50 (SCJ) [^15]: See Bella v. Young, 2006 SCC 3, [2006] 1 SCR 108, 261 DLR (4th) 516 (SCC) [^16]: Elder Advocates of Alberta Society v. Alberta, 2011 SCC 24, [2011] 2 SCR 261, 331 DLR (4th) 257 (SCC) – see paras 27 – 36. [^17]: Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 SCR 494 (SCC) [^18]: See Waddams, The Law of Contracts, 7th Edition, ch. 14, Thomson Reuters 2017 and Fridman, The Law of Contract in Canada, 6th Edition, ch. 9, Carswell 2011 [^19]: 2011 ONSC 7105, supra, at para 85 but it is worth reading paras 40 – 97. [^20]: In fact, this advice was ultimately echoed in the paragraph from Justice Strathy’s reasons excerpted above. [^21]: See the factors in Ford v. Hoffmann-La Roche Ltd., [2005] OJ No. 1117 (Quicklaw) (SCJ) [^22]: Atlantic Lottery Corporation v. Babstock, 2020 SCC 19 [^23]: Sierra Club of Canada v. Canada (Minister of Finance), 2002 SCC 41, [2002] 2 SCR 522 (SCC)