Date: 20070724
Docket: T-1721-06
Citation: 2007
FC 769
Ottawa,
Ontario, July 24, 2007
Present: The
Honourable Mr. Justice Harrington
BETWEEN:
BERNARD
DESROSIERS
Applicant
and
ATTORNEY
GENERAL OF CANADA
Respondent
REASONS FOR ORDER AND ORDER
[1]
For more
than a decade now, Bernard Desrosiers has been disputing the position of
government officials regarding monies he received on account of employment
insurance benefits in 1993, 1994 and 1995. At that time, he was employed
seasonally by Les Cultures de l’Est Inc., a business in which he was a
shareholder. Two adverse decisions were subsequently made against him, and he
was ordered to repay the overpayment, i.e. the employment insurance benefits
paid to him that correspond to the periods for which he claimed this type of
financial assistance while he was working for Les Cultures de l’Est Inc.
.
[2]
In January
1997, following a request by the Employment Insurance Commission for an advance
ruling on the insurability of Mr. Desrosiers’ employment with Les Cultures de
l’Est Inc. from 1993 to 1995, Revenue Canada concluded that his employment at
this company was not insurable, as the Commission had assumed, on the ground
that Mr. Desrosiers directly and indirectly controlled too many shares of Les
Cultures de l’Est Inc. Consequently, the insurability of his employment for the
periods from May 17 to October 30, 1993, May 23 to September 10, 1994, and June
12 to November 4, 1995, was compromised retroactively because the payment of
such financial assistance contravened section 5 of the Employment Insurance
Act.
[3]
As a
result, a month later, the Commission cancelled the three applications for
benefits that had been granted to Mr. Desrosiers for the periods of
insurability during which he had been declared eligible for the employment
insurance program and for which he had received the corresponding benefits.
Second, the Commission ordered him to repay the monies that had been paid to
him in error. However, as of today, Mr. Desrosiers refuses to repay the monies
that are owed.
[4]
Mr.
Desrosiers appealed these two decisions, i.e. Revenue Canada’s and the
Commission’s, but was unsuccessful. However, it is important to point out that
Mr. Desrosiers voluntarily withdrew the notice of appeal of the Revenue Canada
decision that he had filed with the Tax Court of Canada, and accordingly only
the decisions made by the Commission are relevant for purposes of this
proceeding. It also should be noted that the procedure for disputing these
decisions is important and will therefore be discussed later in these reasons.
[5]
Essentially,
after suffering a number of reversals—the Board of Referees dismissed his
appeal of the three decisions on January 24, 2002, then the Umpire dismissed
his appeal of the Board of Referees’ decision on September 17, 2003—Mr.
Desrosiers became liable to pay the sum of $11,223.03 to the state. As a last
resort, Mr. Desrosiers submitted a request to the Commission in October 2003 to
write off the overpayment.
[6]
In other
words, he applied to the Commission in the hope that it would exercise its
discretion and decide to write off the debt. However, that is not what
transpired. In February 2006, the Commission decided that Mr. Desrosiers was
not entitled to a write-off of the amount corresponding to the overpayment, and
accordingly, that he still owed this amount to the Canadian government. In the
context of this application for judicial review, it should be noted that it is
a review of the Commission’s discretionary decision, not its decision on the
merits regarding whether or not Mr. Desrosiers was entitled to receive
employment insurance benefits for the periods in question.
ISSUES
[7]
In this
case, it is simpler to focus first on the issues in such a way that the
relevant facts related to them are grouped together rather than to
chronologically follow the facts in the record, which would lead to a review of
the issues.
[8]
On an
application for judicial review, the first issue, which of course is
fundamental, is to determine the appropriate standard of review for each issue
that has been raised, i.e. correctness, reasonableness simpliciter or
patent unreasonableness.
[9]
Second,
with respect to this proceeding, I must determine whether this application was
filed within the requisite time period. This issue was discussed at the hearing
and was resolved from the bench. Under subsection 18.1(2) of the Federal
Courts Act, a judge may use his or her discretion to allow further time to
the party concerned. Mr. Desrosiers’ request for an extension of time was not
opposed and was granted.
[10]
Third, I
must review the application and interpretation of the Employment Insurance
Act and the related Regulations. Subsection 47(3) of the Act reads as
follows:
|
47(3) No amount due under this section may
be recovered more than 72 months after the day on which the liability arose.
|
47(3) Le recouvrement des créances visées au
présent article se prescrit par soixante-douze mois à compter de la date où
elles ont pris naissance.
|
In this case, Mr. Desrosiers submits that his liability to
repay the overpayment, which he still disputes, was determined over six years
ago and, therefore, the limitation period for recovering the debts has expired,
making the debts uncollectable. Although it was decided more than six years ago
that he was required to pay the entire amount of the overpayment to government
officials, other provisions provide that, in certain circumstances, the
limitation period may be suspended and in those cases, the application of such
a special scheme cannot be disregarded.
[11]
Section 56
of the Employment Insurance Regulations provides that the Commission may
write off an amount payable if the facts of a case meet one of the stated
criteria. What is in dispute here is that Mr. Desrosiers allegedly made a false
or misleading declaration when he applied for employment insurance benefits,
that the debt represented by the overpayment is uncollectable and that
repayment of this amount would result in undue hardship to Mr. Desrosiers. He
maintains that there was a denial of justice with respect to procedural
fairness because he was the only party required to file an affidavit and hence
could not cross-examine the Commission, which had made decisions relating to
this dispute. Furthermore, Mr. Desrosiers alleges that discretion was not
exercised properly in this case, i.e. within the limits of the applicable legal
principles.
APPROPRIATE STANDARD OF REVIEW
[12]
It is not
necessary to set out in detail the general principles regarding this subject
because they are widely applied and because the Supreme Court of Canada has
clearly defined them in a number of decisions, including Dr. Q. v. College
of Physicians and Surgeons of British Columbia, [2003] 1 S.C.R. 226 and Law
Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247.
[13]
With
respect to employment insurance, the respondent refers the Court to a decision
of Madam Justice Tremblay-Lamer in Côté v. Canada (Human Resources
Development), [2001] F.C.J. No. 1273 (QL). In that case, the judge held
that patent unreasonableness is the appropriate standard of review of issues
involving the Commission’s discretion to write off an amount payable. It is
possible that this opinion was later the subject of opposing views. In Canada
(Attorney General) v. Sketchley, 2005 FCA 404, the Federal Court of Appeal
established that each decision by a decision-maker that is the subject of the
same judicial review must, respectively, be considered independently and as a
result, each decision could be reviewed on a different standard. The statutory
provisions here are similar to the principles of fairness under the Income
Tax Act. In Lanno v. Canada (Customs and Revenue Agency), 2005 FCA
153, the Federal Court of Appeal determined that in such circumstances the
appropriate standard of review is reasonableness simpliciter.
[14]
However,
it is not necessary that I determine this issue because after reviewing the
Commission’s decision on the standard of review most favourable to Mr.
Desrosiers, i.e. reasonableness simpliciter, I am of the view that the
intervention of this Court would be inappropriate.
IS THE MINISTER OUT OF TIME TO ACT?
[15]
Under
subsection 47(3) of the Act, no amount due may be recovered more than 72 months
after the day on which the liability arose. However, under subsection 47(4) of
the Act, the limitation period for such amounts due does not run when there is
a pending appeal or other review of the decision establishing the liability. In
other words, the limitation period does not run during appeals brought by a
claimant or by the Commission itself.
[16]
In this
case, the liability arose on February 18, 1997, when the Commission cancelled
Mr. Desrosiers’ three applications for benefits. At that point, he became
the debtor. Subsequently, when he filed a notice of appeal of this decision
with the Board of Referees almost a month later, on March 19, 1997, Mr.
Desrosiers unintentionally set in motion the suspension of the limitation
period for the amount due as provided in the Act. Dissatisfied with the Board
of Referees’ decision of January 24, 2002, Mr. Desrosiers filed a notice of
appeal of that decision with the Umpire; on September 17, 2003, the Umpire once
again dismissed Mr. Desrosiers’ appeal and reaffirmed the validity of the
amount owing.
[17]
Last,
taking into account the appeals brought by Mr. Desrosiers to challenge the
decision that is the basis of the amount in question, the limitation period has
not expired, and the amount due is still valid.
ISSUE OF PROCEDURAL FAIRNESS
[18]
As
mentioned a little earlier in these Reasons, Mr. Desrosiers contends that the
Commission was required to file an affidavit and has not done so. Given the
circumstances of this case, Mr. Desrosiers believes it is not sufficient
that the tribunal record was the only evidence filed under section 317 of the Federal
Courts Rules. Furthermore, he asserts that the only real evidence, apart
from the purely objective evidence, is his own affidavit and since he was not
cross-examined on it, the affidavit should be proof of its contents, i.e. the
statements therein should be accepted as fact.
[19]
From a
purely procedural perspective, an application for judicial review is an
application under sections 300 and following of the Rules. It is not an
application that gives rise to the production of affidavits by the respondent,
thus opening the door to the right to cross-examine the other party on the
basis of the evidence it filed in the record. In this case, it was open to the
respondent to file an affidavit or not. It did not do so and it had a right to
make that decision.
[20]
The
reasons are what they are. If they prove to be inadequate on an application for
judicial review, the decision must be set aside. On the other hand, it would
definitely be too late if the respondent wanted to change his mind now.
Furthermore, it must be noted that, according to the jurisprudence, there is a
presumption that the administrative decision-maker in question based the
decision on all the evidence that was before him or her at the time the
decision was made, even though the decision-maker did not explicitly refer to
each piece of evidence. Quite recently, Mr. Justice Blais reaffirmed this
presumption established by the jurisprudence in an immigration case: Buttar
v. Canada (Citizenship and Immigration), 2006 FC 1281:
[29] I find that I cannot agree with this
claim. Having already established that this legal opinion was one piece of
evidence among others, it would be unreasonable to require that the panel’s
reasons refer to every piece of evidence considered.
[30] Furthermore, the presumption established
by the jurisprudence for many years that the Tribunal considered all the
evidence before it in rendering its decision should apply.
WRITE-OFF
[21]
Section 56
of the Regulations states that the Commission may write off in its discretion a
penalty to be paid or a sum due under certain sections of the Act if one of the
criteria listed therein is met. In other words, the Commission may only
exercise its discretion where the facts of a given case apply to one of the
criteria set out in this section of the Regulations. If one of them is met, the
write-off may be granted.
[22]
In this
case, the Commission found that none of the six criteria had been met and that
therefore it could not exercise its discretion judicially, hence legally.
According to the record, it appears that the first four criteria, such as the
amount owing does not exceed twenty dollars, the debtor is deceased or is a
discharged bankrupt, do not apply.
[23]
Accordingly,
the criteria that are the basis of the dispute in this case are restricted to
what is stated in subparagraph 56(1)(e)(i) and paragraph 56(1)(f)
of the Regulations, which read as follows:
|
56(1)(e)
the overpayment does not arise from an error made by the debtor or as a
result of a false or misleading declaration or representation made by the
debtor, whether the debtor knew it to be false or misleading or not, but
arises from
(i) a retrospective decision or ruling
made under Part IV of the Act, or
56(1)(f) the Commission considers that, having regard to all the
circumstances,
(i) the
penalty or amount, or the interest accrued on it, is uncollectable, or
(ii) the repayment of the penalty or
amount, or the interest accrued on it, would result in undue hardship to the
debtor.
|
56(1)e) le versement excédentaire ne résulte pas d’une erreur du
débiteur ni d’une déclaration fausse ou trompeuse de celui-ci, qu’il ait ou
non su que la déclaration était fausse ou trompeuse, mais découle:
(i) soit d’une décision rétrospective
rendue en vertu de la partie IV de la Loi,
56(1)f) elle
estime, compte tenu des circonstances, que:
(i) soit
la pénalité ou la somme, y compris les intérêts courus, est irrécouvrable,
(ii) soit le remboursement de la
pénalité ou de la somme, y compris les intérêts courus, imposerait au
débiteur un préjudice abusif.
|
[24]
The issue
that arises under subparagraph 56(1)(e)(i) of the Regulations is whether
Mr. Desrosiers made a false and misleading declaration or representation
when he submitted his three applications for employment insurance benefits in
the 1990’s, regardless of the intention behind the act.
[25]
In the
affidavit that Mr. Desrosiers filed in support of this application, he solemnly
states that he did not hold more than 21.8% of the voting shares in Les
Cultures de L’Est Inc. while he was employed there or when he applied for
employment insurance benefits. However not everyone is in agreement on this
point. The demand by government authorities for reimbursement, which requires
Mr. Desrosiers to repay the financial assistance he obtained improperly, is
based on the fact that he held, directly or indirectly, a much greater number
of shares in the company than he had declared and that he did so through a
scheme involving capital stock of various companies while he was employed by
Les Cultures de l’Est Inc. Consequently, Mr. Desrosiers was not eligible for
employment insurance benefits under the Act in force by reason of
non-insurability.
[26]
The
tribunal record highlights Mr. Desrosiers’ activities linked to the business
world, and the analysis of these activities led to the conclusion that he
effectively controlled, through representation relating to the capital stock of
several companies, more than 40% of the voting shares of his then-employer Les
Cultures de l’Est Inc.
[27]
In Mr.
Desrosiers’ opinion, this is meaningless because the Court should consider only
his affidavit when assessing the evidence. His position is that it is the only
real evidence in this case and that the decision that the amounts he received
as employment insurance benefits are considered an overpayment was not based on
any formal analysis. He also submits that, in any event, he did not have the
opportunity to cross-examine the decision-maker on the negative conclusions he
reached.
[28]
It is
inappropriate for Mr. Desrosiers to dispute the issue of the controlling shares
that he may have held in Les Cultures de l’Est Inc. at a specific moment in
time. This issue has already been reviewed on the merits by various
administrative decision-makers, and all the claims relating to it were
dismissed. Again, I reiterate that this is an application for judicial review
whose purpose is to review the Commission’s discretionary decision to deny Mr.
Desrosiers’ request for a write-off.
[29]
In any
event, the Court’s jurisdiction is limited to exercising its role as guardian
of the administrative decision that was rendered. This is a matter of
preserving the integrity of the judicial decision-making process as a function
of the administration of justice.
[30]
If it were
otherwise, the confidence of the public in the justice system that governs it
would be seriously undermined. In short, Mr. Desrosiers’ contention is similar
to an abuse of process under the definition referred to by Madam Justice Arbour
in paragraph 40 of Toronto (City) v. C.U.P.E., local 79, [2003] 3 S.C.R.
77:
The abuse of process which the instant case exemplifies
is the initiation of proceedings in a court of justice for the purpose of
mounting a collateral attack upon a final decision against the intending
plaintiff which has been made by another court of competent jurisdiction in
previous proceedings in which the intending plaintiff had a full opportunity of
contesting the decision in the court by which it was made.
[31]
As for the
issue raised by paragraph 56(1)(f) of the Regulations, the Commission’s
decision that the amount due is collectable and that repayment would not result
in undue hardship to Mr. Desrosiers is reasonable. It should be noted that
Mr. Desrosiers is seasonally employed and has a patrimony that is not without
assets. Furthermore, the Commission stated that the amount owing may be paid in
instalments.
[32]
According
to the factual framework, Mr. Desrosiers is in his fifties, is divorced and is
the principal financial support for his son who is still a student. How many
people find themselves in this situation today? To ask the question is to
answer it. In any event, it was not unreasonable for the Commission to make the
finding it did.
[33]
On a final
note, I would like to point out that writing off a debt is an exceptional
mechanism that is intended for very specific cases, considering that the
amounts in question belong to the common good.
ORDER
THE COURT ORDERS that the application for judicial
review be dismissed with costs.
“Sean Harrington”
Certified
true translation
Mary
Jo Egan, LLB
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