Charest v. Canada, docket T-1184-93

     Date: 19990204

     Docket: T-1184-93

Ottawa, Ontario, the 4^th day of February, 1999

Before: The Honourable Mr. Justice Pinard

BETWEEN:

FLEURETTE CHAREST,

Plaintiff

AND:

THE QUEEN,

- and -

CANADA EMPLOYMENT

AND IMMIGRATION COMMISSION,

Defendants

JUDGMENT

     The plaintiff"s action is dismissed with costs.

Yvon Pinard

J.

Certified true translation

Bernard Olivier

Date: 19990204

     Docket: T-1184-93

BETWEEN:

FLEURETTE CHAREST,

Plaintiff

AND:

THE QUEEN,

- and -

CANADA EMPLOYMENT

AND IMMIGRATION COMMISSION,

Defendants

REASONS FOR JUDGMENT

PINARD J.:

[1]      The plaintiff is seeking a declaratory order that under section 35 of the Unemployment Insurance Act, R.S.C. 1985, c. U-1 (the "Act"), which is applicable to this proceeding, her debt to the Canada Employment and Immigration Commission (the "Commission") is prescribed and, accordingly, she is asking that the ITA-1331-94 certificate issued in this regard be vacated.

[2]      At the trial, the parties filed a document entitled [Translation] List of admissions as to facts, which reads as follows:

[Translation]

For the purpose of abridging the evidence at the hearing, the parties, by their undersigned counsel, make the following admissions as to the facts in this case and agree that the facts as admitted shall serve as evidence at the hearing in regard to these facts. However, it is agreed that the undersigned counsel reserve the right to prove other facts relevant to the issues in the course of the hearing.

1.      On January 10, 1985, the plaintiff filed an initial claim for unemployment insurance benefits, a claim that was effective as of January 6, 1985;

2.      In support of this benefit claim, the plaintiff provided a Record of Employment issued by Studio céramique Gisèle Inc.;

3.      On January 6, 1985, on the basis of the above-mentioned Record of Employment, a benefit period was established in favour of the plaintiff, this period terminating on September 28, 1985;

4.      From January 6, 1985 to September 28, 1985, the plaintiff received a total of $5,212 in unemployment insurance benefits;

5.      In March 1988, an investigation was conducted jointly by the Canada Employment and Immigration Commission (hereinafter referred to as the "Commission") and the Royal Canadian Mounted Police;

6.      On November 8, 1988, the Commission reconsidered the plaintiff"s claim for benefits and retroactively cancelled the benefit period referred to in paragraph 1 of this list of admissions;

7.      This decision of the Commission effectively created an overpayment in the amount of $5,212, notice of which was issued to the plaintiff during the week of November 10, 1988;

8.      On or about December 21, 1988, the plaintiff appealed the Commission"s decision to a board of referees;

9.      In support of her appeal to the board of referees, the plaintiff confined herself to challenging the Commission"s decision on the ground "[translation ] that she had never received any salary when she was drawing benefits"; the reconsideration, as conducted by the Commission, was not challenged;

10.      However, on September 8, 1988, Mr. Luc Charest, a close relative of the plaintiff and her employer at the Studio céramique Gisèle Inc., pleaded guilty to twelve (12) charges laid against him. In this regard, the parties agree to file with the Court a document entitled "[Translation ] Report of special investigation" prepared by Mr. Robert Gagné, an investigator for the Commission in 1990;

11.      Luc Charest pleaded guilty in the Superior Court, Criminal Division to an indictable offence under section 338(1)(a) of the Criminal Code, and more specifically "[translation ] to having, by deceit, falsehood or other fraudulent means, whether or not it was a false pretence, defrauded Canada Employment and Immigration of a sum exceeding one thousand dollars in a claim for benefits on behalf of Fleurette Charest...";

12.      In early 1989, the plaintiff was charged in the Court of Quebec, Criminal and Penal Division, with having knowingly acquiesced in making a false statement in her record of employment in violation of section 121 (now 103) of the Unemployment Insurance Act (hereinafter the "UIA") then in force;

13.      On February 24, 1989, the plaintiff pleaded not guilty to the charge against her;

14.      On February 28, 1990, in the related proceeding, the board of referees dismissed the plaintiff"s appeal on the ground that "[translation ] since she was in the shop on a regular basis, using the employer"s premises, materials and staff during the company"s usual hours; the Board of Referees can only conclude, unanimously, that the claimant was not unemployed within the meaning of the Act and accordingly was not eligible for benefits";

15.      On April 12, 1990, the plaintiff appealed the board of referee"s decision to an umpire, pursuant to section 80 of the UIA;

16.      On June 3, 1991, the Court of Québec, Criminal and Penal Division, ordered a stay of proceedings on the charge against the plaintiff;

17.      The stay of proceedings was ordered by the Court on the basis of section 11(b) of the Canadian Charter of Rights and Freedoms, and thus there was no trial on the merits;

18.      On August 15, 1991, Jerome, C.J., in his capacity as an umpire, dismissed the plaintiff"s appeal under the UIA;

19.      On September 19, 1991, the plaintiff filed an application for judicial review of the decision of Chief Umpire Jerome in the Appeal Division of this Court, pursuant to section 28 of the Federal Court Act;

20.      On June 22, 1992, the plaintiff abandoned her application in the Federal Court of Appeal;

---

21.      On February 9, 1994, a certificate bearing the number ITA-1333-94 [sic]1 was issued by the Federal Court of Canada;

22.      On February 10, 1994, the Commission sent the plaintiff a copy of the certificate accompanied by a letter ordering her to pay it the sum of $15,623.00;

23.      The certificate was filed more than 36 months after the establishment of the overpayment;

[3]      In addition to these written admissions, Ginette Brasseur, the Commission"s regional benefit programs officer, who was responsible for reviewing entitlement to benefits and at the relevant time was responsible for the plaintiff"s file, testified for the defendants. She expressly stated that she had decided, on the basis of the information contained in the plaintiff"s file and the information obtained during the above-mentioned joint investigation by the Commission and the Royal Canadian Mounted Police, that the plaintiff had committed an offence under subsection 33(1) of the Act. In this regard, the witness filed various documents, including the investigation report referred to in paragraph 10 of the above written admissions and a number of statutory declarations by third parties who, in the relevant period, were working for the employer in question. Ms. Brasseur stated that she had reached this conclusion that the plaintiff had knowingly made false or misleading statements even before she notified her that as a result of the review of her file her benefit period was being retroactively cancelled. She explained that her knowledge of the subsequent events had simply confirmed this conclusion and had led to the registration of the certificate in question.

     * * * * * * * * * * * *

[4]      The plaintiff is technically alleging that the right to recovery of the amounts overpaid to her by the Commission is prescribed, owing to the expiration of the 36-month period enacted in subsection 35(4) of the Act.

     * * * * * * * * * * * *

[5]      It is worth reproducing at this point the following applicable provisions of the Act:

Penalty 33. (1) Where the Commission becomes aware of facts that in its opinion establish that a claimant or any person on his behalf has, in relation to a claim for benefit, made a statement or representation that he knew to be false or misleading or, being required under this Act or the regulations to furnish information, furnished any information or made any representation that he knew to be false or misleading, the Commission may impose a penalty on that claimant not greater than an amount equal to three times his weekly rate of benefit.

Pénalité 33. (1) Lorsque la Commission prend connaissance de faits qui, à son avis, démontrent qu'un prestataire ou une personne agissant pour le compte de celui-ci a, relativement à une demande de prestations ou à l'occasion de renseignements exigés par la présente loi ou par les règlements, sciemment fait une déclaration ou une représentation fausse ou trompeuse, elle peut infliger au prestataire une pénalité dont le montant ne dépasse pas le triple de son taux de prestations hebdomadaires.

Idem (2) The penalty provided under subsection (1) shall not be imposed if a prosecution in respect of the false or misleading statement or representation has been initiated against that person.

Idem (2) La pénalité prévue au paragraphe (1) ne peut être infligée si une poursuite a été intentée contre une personne pour la déclaration ou représentation fausse ou trompeuse.

Idem (3) The penalty provided under subsection (1) shall not be imposed after thirty-six months from the date on which the false or misleading statement or representation was made.

Idem (3) La pénalité prévue au paragraphe (1) ne peut être infligée plus de trente-six mois après la date à laquelle a été faite la déclaration ou représentation fausse ou trompeuse.

Liability for overpayments 35. (1) Where a person has received benefit under this Act for any period in respect of which he is disqualified or any benefit to which he is not entitled, he is liable to repay an amount equal to the amount paid by the Commission in respect thereof.

Obligation de rembourser le trop-perçu 35. (1) Lorsqu'une personne a touché des prestations en vertu de la présente loi au titre d'une période pour laquelle elle était exclue du bénéfice des prestations ou a touché des prestations auxquelles elle n'est pas admissible, elle est tenue de rembourser la somme versée par la Commission à cet égard.

Debts to Crown (2) All amounts payable under this section or section 33, 37 or 38 are debts due to Her Majesty and are recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by this Act.

Créances de la Couronne (2) Les sommes payables en vertu du présent article ou des articles 33, 37 ou 38 constituent des créances de Sa Majesté, dont le recouvrement peut être poursuivi à ce titre soit devant la Cour fédérale ou tout autre tribunal compétent, soit selon toute autre modalité prévue par la présente loi.

Recovery (3) Where a benefit becomes payable to any claimant, the amount of any indebtedness described in subsection (1) or (2) may, in the manner prescribed, be deducted and retained out of the benefit payable to him.

Recouvrement par déduction (3) Les sommes dues par un prestataire au titre des créances visées aux paragraphes (1) ou (2) peuvent, selon la manière prescrite, être déduites des prestations qui lui sont éventuellement dues.

Limitation (4) No amount due as a debt to Her Majesty under this section may be recovered after thirty-six months from the date on which the liability arose unless in the opinion of the Commission an offence under subsection 33(1) has been committed in connection therewith in which case no such amount may be recovered after seventy-two months from the date on which the liability arose.

Prescription (4) Le recouvrement des créances visées au présent article se prescrit par trente-six mois à compter de la date où elles ont pris naissance; toutefois, le délai de prescription pour ce recouvrement est porté à soixante-douze mois dans les cas où la Commission estime qu'il a été commis une infraction au paragraphe 33(1).

Reconsideration of claim 43. (1) Notwithstanding section 86 but subject to subsection (6), the Commission may at any time within thirty-six months after benefit has been paid or would have been payable reconsider any claim made in respect thereof and if the Commission decides that a person has received money by way of benefit thereunder for which he was not qualified or to which he was not entitled or has not received money for which he was qualified and to which he was entitled, the Commission shall calculate the amount that was so received or payable, as the case may be, and notify the claimant of its decision.

Nouvel examen de la demande 43. (1) Nonobstant l'article 86 mais sous réserve du paragraphe (6), la Commission peut, dans les trente-six mois qui suivent le moment où des prestations ont été payées ou sont devenues payables, examiner de nouveau toute demande au sujet de ces prestations et, si elle décide qu'une personne a reçu une somme au titre de prestations pour lesquelles elle ne remplissait pas les conditions requises ou au bénéfice desquelles elle n'était pas admissible ou n'a pas reçu la somme d'argent pour laquelle elle remplissait les conditions requises et au bénéfice de laquelle elle était admissible, la Commission calcule la somme payée ou payable, selon le cas, et notifie sa décision au prestataire.

Appeal (2) Any decision made by the Commission pursuant to subsection (1) is subject to appeal under section 79.

Appel (2) Toute décision rendue par la Commission en vertu du paragraphe (1) peut être portée en appel en application de l'article 79.

Amount repayable (3) If the Commission decides that a person has received money by way of benefit for any period in respect of which he was not qualified or money by way of benefit to which he was not entitled, the amount therefor as calculated under subsection (1) is the amount repayable under section 35.

Somme remboursable (3) Si la Commission décide qu'une personne a reçu une somme au titre de prestations auxquelles elle n'avait pas droit ou pour une période durant laquelle elle n'était pas admissible, la somme calculée en vertu du paragraphe (1) est celle qui est remboursable conformément à l'article 35.

(...)

(...)

Extended time for reconsideration of claim under subsection (1) (6) Where, in the opinion of the Commission, a false or misleading statement or representation has been made in connection with a claim, the Commission has seventy-two months within which to reconsider the claim under subsection (1).

Prolongation du délai de réexamen de demande en vertu du par. (1) (6) Lorsque la Commission estime qu'une déclaration ou représentation fausse ou trompeuse a été faite relativement à une demande de prestations, elle dispose d'un délai de soixante-douze mois pour réexaminer la demande en vertu du paragraphe (1).

Certificates 94. (1) An amount payable under Part I that has not been paid or such part of an amount payable under that Part as has not been paid may be certified by the Commission      (a) forthwith, when in the opinion of the Commission the person liable to pay the amount is attempting to avoid payment; and      (b) otherwise, on the expiration of thirty days after the default.	Certificats 94. (1) Une somme ou fraction de somme payable en vertu de la partie I et qui n'a pas été payée peut être certifiée par la Commission :      a) immédiatement, lorsque la Commission est d'avis que la personne qui doit payer cette somme tente d'éluder le paiement de cotisations;      b) sinon, trente jours francs après le défaut de paiement.

(...)

(...)

Offences and Punishment Offence 103. (1) Every person is guilty of an offence punishable on summary conviction who      (a) in relation to any claim for benefit, makes a statement or representation that he knows to be false or misleading;      (b) being required under this Act or the regulations to furnish information, furnishes any information or makes any representation he knows to be false or misleading;      (c) obtains any benefit by false pretences;      (d) makes any claim or declaration that by reason of non-disclosure of facts he knows is false or misleading;      (e) being the payee thereof knowingly negotiates or attempts to negotiate any special warrant for a benefit to which he is not entitled; or      (f) knowingly fails to return any special warrant or the amount thereof or any excess amounts as required by section 36.

Infractions et peines Infraction 103. (1) Commet une infraction punissable sur déclaration de culpabilité par procédure sommaire quiconque, selon le cas :      a) à l'occasion d'une demande de prestations, fait sciemment une déclaration ou représentation fausse ou trompeuse;      b) étant requis en vertu de la présente loi ou des règlements de fournir des renseignements, fait une représentation ou fournit un renseignement qu'il sait être faux ou trompeur;      c) obtient des prestations par de faux semblants;      d) fait une demande ou une déclaration que, en raison de la dissimulation de certains faits, il sait être fausse ou trompeuse;      e) sciemment, négocie ou tente de négocier un mandat spécial établi à son nom pour des prestations au bénéfice desquelles il n'est pas admissible;      f) s'abstient sciemment de renvoyer un mandat spécial ou d'en restituer le montant ou le trop-perçu tel que requis par l'article 36.

Saving (2) No prosecution for an offence under paragraph (1)(a) or (b) shall be instituted if a penalty in respect of that offence has been imposed under subsection 33(1).

Réserve (2) Il ne peut être intenté de poursuite pour une infraction prévue aux alinéas (1)a) ou b) si une pénalité a été infligée pour cette infraction en vertu du paragraphe 33(1).

     * * * * * * * * * * * *

[6]      In an action of this nature, the applicable burden of proof, the civil burden based on the preponderance of probabilities, shifts according to the evidence of the respective parties. Initially, the plaintiff simply has to prove that the defendant Commission commenced its overpayment recovery proceedings more than 36 months after the date on which this account originated. If she succeeds, the Commission must then (1) prove that it commenced its overpayment proceedings on the account in question prior to the expiration of the 72^nd month following the date on which the account originated, (2) that it so acted because it was of the opinion that the plaintiff had committed an offence under subsection 33(1) of the Act and (3) that this opinion, in light of new evidence, is justified. In regard to such justification, proof of the existence of false or incorrect statements may alone suffice in some instances to shift the onus and oblige the plaintiff to explain why she made these incorrect statements.²

[7]      In the case at bar, the admitted facts clearly demonstrate that the Commission had the certificate in question issued, thereby commencing the recovery of its account from the plaintiff, between the 36^th and the 72^nd month following the date on which this account originated. It is equally clear, from these admissions, complemented by the uncontradicted and credible testimony of the officer responsible for reconsidering the plaintiff claimant"s entitlement to the benefits that had been paid to her, that the Commission thought or was of the opinion that she had committed an offence under subsection 33(1) of the Act at the time the certificate in question was issued.

[8]      It need only be determined, therefore, whether the Commission has succeeded in establishing that this opinion is justified in light of both the facts known and proved at trial and the law in force at the relevant time. In this regard, the mere existence of the plaintiff"s false or misleading statements is firmly established. This is clear from the facts admitted in writing, in particular the Commission"s decision, upheld by a board of referees and an umpire, to retroactively cancel the benefit periods in question, which at that time could not be done, given the language of subsection 43(6) of the Act, unless it was the Commission"s opinion, based on facts and law, that the claimant had made one or more false or misleading statements. Indeed, in Attorney General of Canada v. Purcell , [1996] 1 F.C. 644, at page 662, the Federal Court of Appeal stated:

Having regard to the fact that an appeal to the Board is a de novo proceeding, the Board is in a better position to render a decision on the facts than the Commission itself. . . . Except where the statute places the exclusive authority or discretion for making a decision with the Commission or the Minister, the Board is obliged to undertake a de novo review: see Attorney General of Canada v. Findenigg, [[1984] 1 F.C. 65], per Thurlow C.J., at page 71; and Re The Queen and Harbour, [(1986), 26 D.L.R. (4^th) 96], per Marceau J.A., at pages 105-106.

It should suffice, moreover, to note the confession of guilt of Luc Charest, the plaintiff"s employer and a close relative, in relation to the fabrication of the fraudulent record of employment on which the plaintiff based her claim for benefit to the Commission. This particular factual context, in my opinion, gives rise to a presumption that the plaintiff"s false statements were made knowingly. To rebut this presumption, the plaintiff had to explain why she made the false statements in question, which she totally refrained from doing. I must therefore conclude, in the circumstances, that the Commission has adequately justified its opinion that the plaintiff knowingly made the false statements in question, thereby committing an offence under subsection 33(1) of the Act, as provided in subsection 35(4) of the Act.

[9]      I am also of the opinion that the decisions in Courty (May 11, 1987), T-713-87 (F.C.T.D.) and Martel (July 14, 1989), T-2416-87 (F.C.T.D.), cited by the plaintiff, do not support the proposition that a mere failure by the Commission to impose a penalty on the claimant under subsection 33(1) of the Act suffices to bar the extension of the limitation period to 72 months pursuant to subsection 35(4). In those cases, unlike the present situation, insufficient evidence was provided to the Court by the Commission to justify the factual and legal validity of its opinion that false or misleading statements had knowingly been made by some claimants.

[10]      Finally, the plaintiff"s submission that the stay of the proceedings against her by the Court of Quebec, Criminal and Penal Division, renders inadmissible the evidence in this Court tending to demonstrate that she knowingly made the false statements in question must also be rejected on the ground that the judgments of criminal courts are not res judicata in subsequent civil trials. In Time Data Recorder International Ltd. v. The Minister of National Revenue (April 21, 1997), A-518-93, Pratte J.A. of the Federal Court of Appeal stated, at page 7:

     It is also common ground that, as a rule, judgments of criminal courts are not "res judicata" in subsequent civil trials.⁷ There are many reasons for that: first, in most cases, the parties in the criminal and civil trials are not the same; second, very often, the questions to be resolved in both litigations are not identical; finally, the burden of proof is not the same in criminal and civil proceedings.

7See: Fishman v. R.,(1970) Ex.C.R. 784 at 826; Hollington v. Hewthorne & Co. Ltd., (1943) K.B. 587 at 601, (1943) 2 All E.R. 35 (C.A.); Sopinka, Lederman, Bryant, The Law of Evidence in Canada, Butterworths, 1992, p. 1045; Cross on Evidence, 7^th edition, Butterworths, 1990, p. 84.

[11]      For all of these reasons, therefore, the action is dismissed with costs.

Yvon Pinard

J.

OTTAWA, Ontario

February 4, 1999

Certified true translation

Bernard Olivier

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

FILE NO:              T-1184-93

STYLE:              FLEURETTE CHAREST V. THE QUEEN AND THE CANADA EMPLOYMENT AND IMMIGRATION COMMISSION

PLACE OF HEARING:      MONTRÉAL, QUEBEC

DATE OF HEARING:      JANUARY 18, 1999

REASONS FOR JUDGMENT OF PINARD J.

DATED:              FEBRUARY 4, 1999

APPEARANCES:

DIANE RAINVILLE

GILBERT NADON                      FOR THE PLAINTIFF

HÉLÈNE BEAUMONT

MÉLANIE RAYMOND                  FOR THE DEFENDANTS

SOLICITORS OF RECORD:

CAMPEAU, OUELLET, NADON, BARABÉ,

CYR, DE MERCHANT, BERNSTEIN, COUSINEAU

HEAP, PALARDY,

MONTRÉAL, QUEBEC                  FOR THE PLAINTIFF

MORRIS ROSENBERG

DEPUTY ATTORNEY GENERAL

OF CANADA                      FOR THE DEFENDANTS

__________________

¹ This is no doubt a clerical error, as the conclusions of the Amended Statement of Claim refer to number ITA-1331-94.

² See Attorney General of Canada v. Katherine Gates (May 12, 1995), A-600-94 (F.C.A.).