Date: 20080527
Docket: T-1268-07
Citation: 2008 FC 672
Ottawa, Ontario, May 27, 2008
PRESENT: The
Honourable Mr. Justice Blanchard
BETWEEN:
RICHARD
CLAVEAU ET AL1
Applicant
and
ATTORNEY
GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT AND
JUDGMENT
I. Introduction
[1]
This is an
application for judicial review of a decision dated June 15, 2007, by the
Employment Insurance Commission (the Commission), which denied the applicants’
request for a write off submitted on May 23, 2007.
II. Background
[2]
The principal
applicant, Richard Claveau, was employed by the Coopérative Forestière
Laterrière (the Coopérative) from November 24, 1986 to May 9, 2003, when
he was laid off.
[3]
On May 20,
2003, the applicant submitted his initial claim for employment insurance benefits.
A benefit period was established for him beginning May 11, 2003, and benefits
were paid to him for about a year.
[4]
Because
the applicant was experiencing serious financial difficulties and was unable to
file a viable proposal within the six-month deadline, he submitted an
application to continue restructuring under the Companies’ Creditors
Arrangement Act, R.S.C. 1985, c. C-36.
[5]
Pursuant
to the Companies’ Creditors Arrangement Act, Ernst & Young Inc. was
appointed as the monitor on October 23, 2003.
[6]
On April
14, 2004, the monitor sent to the Coopérative’s creditors, including the
applicants, a notice of meeting of creditors, a letter from the president of
the Coopérative, a copy of the proposed plan of compromise or arrangement
(the Plan) along with the monitor’s report (the Report) for the meeting
scheduled for April 23, 2004.
[7]
On April
23, 2004, the creditors-members of the Coopérative voted and approved the Plan,
which was homologated by the Québec Superior Court on April 27, 2004.
[8]
On May 5,
2004, in response to the notice of April 14, 2004, the Commission reminded the
monitor of its obligation to deduct monies payable to the Receiver General
under subsection 46(1) of the Employment Insurance Act, S.C. 1996, c. 23
(the Act). The Commission also asked the monitor to contact it prior to paying any
dividends to the employees.
[9]
On May 13,
2004, the monitor sent to the Commission a notice requesting the creditors to
prove their claims, along with the relevant documentation for submitting a
proof of claim.
[10]
On May 14,
2004, the monitor asked the Commission to relieve it of its responsibilities
under subsection 46(1) of the Act, given that the monitor had to analyze all
these files for the Commission and was uncertain about the exact amounts it
would be paying to each employee. The monitor also informed the Commission of
the following:
(1)
The
Coopérative owed approximately 1.8 million dollars to 439 employees (floating
holidays, unpaid holidays, pay in lieu of notice;
(2)
As of that
date, the monitor had received proofs of claim from 271 employees out of a
possible 439;
(3)
All the
creditors, including the employees, could file a proof of claim at any time up
to July 18, 2004, the deadline for paying the dividend; and
(4)
An
estimate of the dividend had been completed, and it would be paid on or before
July 18, 2004.
[11]
On June 8,
2004, the Commission agreed to the monitor’s request because it could not
provide the amount of the payments due within the time period set out in the
Plan. The Commission also informed the monitor that it would apply section 45,
not subsection 46(1), of the Act to recover the overpayment from the claimants.
[12]
On or
about July 16, 2004, the monitor sent a notice of dividend to the creditors
along with a copy of the letter from the Commission dated June 8, 2004.
[13]
On or
about July 18, 2004, the applicant received a dividend of $2,317.31 from the
monitor as payment in lieu of notice, thus creating an overpayment.
[14]
On July
29, 2004, the Commission informed the Coopérative that it would review its
employees’ claims for employment insurance once the last dividend was paid,
which was expected to be in September 2004.
[15]
On June 7,
2005, the Commission provided the Coopérative with explanations about the
allocation of the first dividend paid by the monitor in July 2004 and indicated
that the calculations were based on the information from the monitor that the
date for the second payment had not yet been set.
[16]
On June
23, 2005, the Commission advised the applicant that it had allocated the
dividend payments that he had received as vacation and pay in lieu of notice. A
notice of overpayment totalling $925 was also sent to the applicant.
[17]
On or
about July 15, 2005,
a representative
appeal was filed with the Board of Referees of the Employment Insurance
Commission.
[18]
On July
16, 2005, the Commission calculated the overpayment.
[19]
On
February 2, 2006, when the case was ready to be heard, a formal request for a
write-off based on section 56 of the Employment Insurance Regulations,
S.O.R./96-332 (the Regulations) was made to the Commission.
[20]
On August
24, 2006, the Board of Referees rendered a decision confirming that the monies
received by the applicant constituted remuneration, and the applicant agreed
with this. However, the Board stated that it was not up to it to decide whether
the Commission had made an error that could warrant a write-off.
[21]
On January
3, 2007, the Federal Court (Claveau v. Canada (Minister of Human Resources
and Skills Development, 2007 FC 3) ruled that the write-off request was
premature because the Umpire had not yet rendered a decision.
[22]
On
April 20, 2007, the Umpire upheld the decision of the Board of Referees and
noted that the applicant could apply to the Federal Court for a determination
as to whether the Commission had exercised its discretion unfairly.
[23]
Once the
Umpire’s decision was rendered, a second request for a write-off based on
subparagraph 56(2)(b)(i) of the Regulations was filed with the
Commission on May 23, 2007.
[24]
On June
15, 2007, the Commission denied the second write-off request on the ground that
there was no error on its part in processing the claims for benefits.
[25]
On July
11, 2007, this application for judicial review of the June 15, 2007 decision
was filed.
III. Impugned
decision
[26]
By letter dated June 15, 2007, the respondent advised
the applicant that it was denying his request for a write-off. The applicant
had submitted that request under subparagraph 56(2)(b)(i) of the
Regulations on the ground that the overpayments were attributable to an error
by the Commission in processing the applications for benefits.
[27]
The respondent based its refusal on the
following factors:
(1)
There was no error on the part of the Commission
in processing the applications for benefits;
(2)
Apart from section 46, section 45 of the Act
applies in accordance with the principle that a claimant cannot receive income
from two sources for the same time period. There was an overpayment against the
claimant because he received benefits covering the same period in which he
received dividends. Normally, the monitor would have withheld the dividends,
and the claimant would not have received those monies if section 46 had been
applied;
(3)
The Commission has discretion to decide whether
to grant or refuse a write-off request, and neither the Board of Referees nor
the Umpire had the jurisdiction or the power to compel the Commission to
exercise its discretion to write off an overpayment.
[28]
The respondent concluded his letter by reminding
the applicant that collection of overpayments is not suspended pending an
application for judicial review in which the Commission’s decision to exercise
its discretion to write off an overpayment is being challenged.
IV. Issue
[29]
The only issue is whether the Commission erred
in denying the write-off request in the exercise of its discretion under
section 56 of the Regulations.
V. Standard
of review
[30]
In Dunsmuir
v. New Brunswick, 2008 SCC 9, the Supreme Court of Canada determined that
there ought to be only two standards of review, correctness and reasonableness.
The Court indicated that the correctness standard should continue to apply to
jurisdictional questions and some other questions of law (see
Dunsmuir at paragraph 50). When applying the correctness standard, a
reviewing court will not show deference to the decision-maker’s reasoning process.
The court will rather undertake its own analysis, which will bring the court to
decide whether it agrees with the determination of the decision-maker.
[31]
The
Supreme Court also stated that in judicial review, the reasonableness of a
decision is
concerned mostly with the existence of justification, transparency and
intelligibility within the decision-making process. Reasonableness is also
concerned with whether the decision falls within a range of possible,
acceptable outcomes that are defensible in respect of the facts and the law (see
Dunsmuir at paragraph 47).
[32]
Guidance
with regard to the questions that will be reviewed on a reasonableness standard
can be found in the existing case law (see Dunsmuir at
paragraph 54). Whether the decision-maker should be given deference depends on
the following factors: the presence of a privative clause, the special
expertise of the decision-maker in a discrete and special administrative
regime, and the nature of the question at issue (see Dunsmuir at
paragraph 55).
[33]
In Allard v. Canada (Attorney General),
2001 FCT 789, [2001] F.C.J. No. 1148 (Lexis), Mr. Justice Lemieux applied the
pragmatic and functional approach to determine the appropriate standard of
review for decisions made by the Commission regarding write-offs. At paragraphs
43 and 44, the learned judge found that the appropriate standard of review on
the merits of the Commission’s decision to write off or not
to write off is reasonableness simpliciter (see also Girard v. Canada
(Attorney General of Canada), 2004 FC 882; [2004] F.C.J. No. 1107 (Lexis)).
[34]
In this case, the Act does not contain a
privative clause, the Commission has a degree of expertise in issues involving
write-offs and the nature of the question is essentially discretionary.
Consequently, in this case, a certain deference is in order.
[35]
For these reasons, I am of
the view that the appropriate standard of review in this case is
reasonableness.
VI. Analysis
[36]
The applicant essentially maintains that the
Commission erred in processing the claim for benefits under subparagraph 56(2)(b)(i)
of the Regulations because it had no right to exempt the monitor from a
mandatory provision of the Act, i.e., subsection 46(1).
[37]
The respondent asserts that the overpayment of
benefits did not arise as a result of an error made by the Commission, given
that it paid the benefits in accordance with the information that it had at the
time. In fact, the overpayment resulted from the review that the Commission was
required to conduct as a result of the monitor paying the dividends after the
Commission had paid the benefits. The respondent notes that under the Plan
homologated by the Québec Superior Court, the Commission had to comply with the
provisions of the Plan. It provided that the monitor had to pay the first
dividend on or before July 18, 2004, and since the amount to be paid by the
monitor could fluctuate until that date, the Commission could not specify the
overpayment for that date. In short, the Commission had no choice but to apply
section 45 of the Act to recover the overpayments.
[38]
Section 56 of the Regulations states that the
Commission may write off in its discretion a penalty or an amount payable 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 (Desrosiers v.
Canada (Attorney General), 2007 FC 769 at paragraph 21). In this case, the
applicants contend that the write-off should have been authorized because the
overpayment is attributable to an error by the Commission, and they rely on
subparagraph 56(2)(b)(i) of the Regulations.
[39]
A careful reading of subparagraph 56(2)(b)(i)
of the Regulations shows that the Commission may write off the overpayment if
there has been a delay or error made by the Commission in
“processing a claim for benefits”. The provision in question
is reproduced below:
|
56. (2) The
portion of an amount owing under section 47 or 65 of the Act in respect of
benefits received more than 12 months before the Commission notifies the
debtor of the overpayment, including the interest accrued on it, may be
written off by the Commission if
…
(b)
the overpayment arises as a result of
(i) a
delay or error made by the Commission in processing a claim for benefits,
[My emphasis.]
…
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56. (2) The
Commission peut défalquer la partie de toute somme due aux termes des
articles 47 ou 65 de la Loi qui se rapporte à des prestations reçues plus de
douze mois avant qu’elle avise le débiteur du versement excédentaire, y
compris les intérêts courus, si les conditions suivantes sont réunies:
[…]
b) le versement excédentaire est attribuable à l’un des facteurs
suivants:
(i) un
retard ou une erreur de la part de the Commission dans le traitement d’une
demande de prestations, [Je souligne.]
[…]
|
The documentary evidence indicates that the principal
applicant was laid off on May 9, 2003, and applied for employment insurance
benefits via the Internet on May 20, 2003. A payment period was
established for him beginning May 11, 2003, and benefits were paid to him for
about a year. However, in his request for a write-off dated May 23, 2007, the
applicant alleged that:
[translation]
… HRSDC could therefore not agree with
the trustee [monitor] that section 46(1) would not apply because it is a
mandatory provision of the Act, and there is no provision in the Act allowing
the Commission to release someone from a mandatory provision. In so doing,
HRSDC committed an error in processing a claim for benefits by permitting payments
to be made in error.
In other words, the applicant alleges that the Commission
made an error in granting the monitor an [translation]
“exemption” from subsection 46(1) of the Act and that this resulted in an
overpayment. I do not accept this argument. The alleged error is not connected
in any way to the applicant’s claim for benefits filed on May 20, 2003. The
documentary evidence indicates that the claim for benefits was received and
duly processed by the Commission for the benefit of the applicant.
Consequently, subparagraph 56(2)(b)(i) of the Regulations does
not apply in this case. Since the applicant was unable to demonstrate that the
facts of his case applied to any of the criteria in subparagraph 56(2)(b)(i)
of the Regulations, i.e., that there was a delay or error made by the
Commission in processing a claim for benefits, I am of the view that the
Commission was unable to exercise its discretion to write off the amounts
claimed by the applicant.
[40]
It should be noted that the applicant’s employer
was facing serious financial difficulties. On April 23, 2004, at the meeting of
the creditors, the Plan was approved and was homologated by the Québec Superior
Court on April 27, 2004. The Plan provided that the monitor was to pay the
first dividend on or before July 18, 2004, whereas the benefits had already
been paid. Given that the amount to be paid by the monitor could fluctuate
until July 18, 2004, the Commission was unable to specify the overpayments for
that date. Accordingly, on May 14, 2004, the monitor asked the Commission to
relieve it of its responsibilities under section 46 of the Act, since the
monitor was uncertain about the exact amounts that it was going to pay to each
employee. The Commission granted this request by letter dated June 8, 2004. I
note that the notice of dividend sent to the creditors, including the
applicant, enclosed the June 8, 2004, letter, as an attachment. This letter
expressly stated that the claimant would be required to pay back any
overpayment. The excerpt in question is reproduced
below:
[translation]
. . . you can
proceed with paying all the monies due to the employees. On the other hand, in
accordance with section 45 of the Employment Insurance Act, we [the Commission]
will allocate the monies that you will pay. The resulting overpayment will
be imputed to the claimant. For your information, this section specifies
that:
. . . the claimant shall pay to the Receiver General as
repayment of an overpayment of benefits an amount equal to the benefits that
would not have been paid if the earnings had been paid or payable at the
time the benefits were paid. [My emphasis.]
Thus, the applicant was informed that although the monitor was
authorized to pay the entire amount to the claimants, the Commission could
require that any overpayment be reimbursed. This approach by the Commission was
consistent with the uncertainty about the exact amounts to be paid to the
claimant. The Commission had no choice but to apply section 45 of the Act to
recover the overpayments once the monitor established the exact amount of the
payment.
[41]
Sections 45 and 46 of the Act refer to two
separate situations and apply to their mutual exclusion, based on the
circumstances (Lauzon v. Canada (Employment and Immigration Commission),
[1998] F.C.J. No. 944 (Lexis) at paragraph 9). In this case, section 45 of the
Act applies, and the claimant received money at government expense. The
Commission is entitled to claim reimbursement of the overpayment under section
45 of the Act.
VII. Conclusion
[42]
Having considered all the evidence and for the
reasons discussed above, I am of the view that by denying the applicant’s
request to write off the overpayment, the respondent did not make an error
warranting the intervention of the Court.
[43]
Since the respondent waived his claim for costs
by letter dated April 25, 2008, the application for judicial review will be
dismissed without costs.
JUDGMENT
THE COURT ORDERS AND ADJUDGES
that
1. The application for judicial review is dismissed
without costs.
“Edmond
P. Blanchard”
Certified
true translation
Mary
Jo Egan, LLB
Appendix
Employment Insurance Act, S.C. 1996, c. 23:
|
45. If a claimant receives benefits for a period
and, under a labour arbitration award or court judgment, or for any other
reason, an employer, a trustee in bankruptcy or any other person subsequently
becomes liable to pay earnings, including damages for wrongful dismissal or
proceeds realized from the property of a bankrupt, to the claimant for the
same period and pays the earnings, the claimant shall pay to the Receiver
General as repayment of an overpayment of benefits an amount equal to the
benefits that would not have been paid if the earnings had been paid or
payable at the time the benefits were paid.
46. (1) If under a labour arbitration award or
court judgment, or for any other reason, an employer, a trustee in bankruptcy
or any other person becomes liable to pay earnings, including damages for
wrongful dismissal or proceeds realized from the property of a bankrupt, to a
claimant for a period and has reason to believe that benefits have been paid
to the claimant for that period, the employer or other person shall ascertain
whether an amount would be repayable under section 45 if the earnings were
paid to the claimant and if so shall deduct the amount from the earnings
payable to the claimant and remit it to the Receiver General as repayment of
an overpayment of benefits.
(2) If a claimant receives benefits for a
period and under a labour arbitration award or court judgment, or for any
other reason, the liability of an employer to pay the claimant earnings,
including damages for wrongful dismissal, for the same period is or was
reduced by the amount of the benefits or by a portion of them, the employer
shall remit the amount or portion to the Receiver General as repayment of an
overpayment of benefits.
|
45. Lorsque le prestataire reçoit des prestations
au titre d’une période et que, soit en application d’une sentence arbitrale
ou d’un jugement d’un tribunal, soit pour toute autre raison, l’employeur ou
une personne autre que l’employeur — notamment un syndic de faillite — se
trouve par la suite tenu de lui verser une rémunération, notamment des
dommages-intérêts pour congédiement abusif ou des montants réalisés provenant
des biens d’un failli, au titre de la même période et lui verse effectivement
la rémunération, ce prestataire est tenu de rembourser au receveur général à
titre de remboursement d’un versement excédentaire de prestations les
prestations qui n’auraient pas été payées si, au moment où elles l’ont été,
la rémunération avait été ou devait être versée.
46. (1) Lorsque, soit en application d’une
sentence arbitrale ou d’un jugement d’un tribunal, soit pour toute autre
raison, un employeur ou une personne autre que l’employeur — notamment un
syndic de faillite — se trouve tenu de verser une rémunération, notamment des
dommages-intérêts pour congédiement abusif ou des montants réalisés provenant
des biens d’un failli, à un prestataire au titre d’une période et a des
motifs de croire que des prestations ont été versées à ce prestataire au
titre de la même période, cet employeur ou cette autre personne doit vérifier
si un remboursement serait dû en vertu de l’article 45, au cas où le
prestataire aurait reçu la rémunération et, dans l’affirmative, il est tenu
de retenir le montant du remboursement sur la rémunération qu’il doit payer
au prestataire et de le verser au receveur général à titre de remboursement
d’un versement excédentaire de prestations.
(2) Lorsque le prestataire a reçu des
prestations au titre d’une période et que, soit en application d’une sentence
arbitrale ou d’un jugement d’un tribunal, soit pour toute autre raison, la
totalité ou une partie de ces prestations est ou a été retenue sur la
rémunération, notamment les dommages-intérêts pour congédiement abusif, qu’un
employeur de cette personne est tenu de lui verser au titre de la même
période, cet employeur est tenu de verser la totalité ou cette partie des
prestations au receveur général à titre de remboursement d’un versement
excédentaire de prestations.
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Employment Insurance Regulations, S.O.R./96-332:
|
56. (1) A penalty owing under
section 38, 39 or 65.1 of the Act or an amount payable under section 43, 45,
46, 46.1 or 65 of the Act, or the interest accrued on the penalty or amount,
may be written off by the Commission if
(a) the total of the penalties and amounts, including the
interest accrued on those penalties and amounts, owing by the debtor to Her
Majesty under any program administered by the Department of Human Resources
Development does not exceed $20, a benefit period is not currently running in
respect of the debtor and the debtor is not currently making regular payments
on a repayment plan;
(b) the debtor is deceased;
(c) the debtor is a discharged bankrupt;
(d) the debtor is an
undischarged bankrupt in respect of whom the final dividend has been paid and
the trustee has been discharged;
(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
(ii) a retrospective decision made under Part I or IV of the Act
in relation to benefits paid under section 25 of the Act; or
(f) the Commission considers that, having regard to all
the circumstances,
(i) (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.
(2) The portion of an amount owing under
section 47 or 65 of the Act in respect of benefits received more than 12
months before the Commission notifies the debtor of the overpayment,
including the interest accrued on it, may be written off by the Commission if
(a) 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; and
(b) the overpayment arises as a result of
(i) a delay or error made by the Commission in processing a
claim for benefits,
(ii) retrospective control procedures or a retrospective review
initiated by the Commission,
(iii) an error made on the record of employment by the employer,
(iv) an incorrect calculation by the employer of the debtor's
insurable earnings or hours of insurable employment, or
(v) an error in insuring the employment or other activity of the
debtor.
|
56. (1) The
Commission peut défalquer une pénalité à payer en application des articles
38, 39 ou 65.1 de la Loi ou une somme due aux termes des articles 43, 45, 46,
46.1 ou 65 de la Loi ou les intérêts courus sur cette pénalité ou cette somme si,
selon le cas:
a) le total des
pénalités et des sommes, y compris les intérêts courus, que le débiteur doit
à Sa Majesté en vertu de tout programme administré par le ministère du
Développement des ressources humaines ne dépasse pas vingt dollars, aucune
période de prestations n’est en cours pour le débiteur, et ce dernier ne
verse pas de paiements réguliers en vertu d’un plan de remboursement;
b) le débiteur
est décédé;
c) le débiteur
est un failli libéré;
d) le débiteur
est un failli non libéré à l’égard duquel le dernier dividend a été payé et
le syndic a été libéré;
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,
(ii) soit d’une
décision rétrospective rendue en vertu des parties I ou IV de la Loi à l’égard des
prestations versées selon l’article 25 de la Loi;
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.
(2) The
Commission peut défalquer la partie de toute somme due aux termes des
articles 47 ou 65 de la Loi qui se rapporte à des prestations reçues plus de douze mois
avant qu’elle avise le débiteur du versement excédentaire, y compris les
intérêts courus, si les conditions suivantes sont réunies:
a) 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;
b) le versement
excédentaire est attribuable à l’un des facteurs suivants:
(i) un retard ou
une erreur de la part de the Commission dans le traitement d’une demande de
prestations,
(ii) des mesures
de contrôle rétrospectives ou un examen rétrospectif entrepris par the
Commission,
(iii) une erreur
dans le relevé d’emploi établi par l’employeur,
(iv) une erreur
dans le calcul, par l’employeur, de la rémunération assurable ou du nombre
d’heures d’emploi assurable du débiteur,
(v) le fait
d’asee assuré par erreur l’emploi ou une autre activité du débiteur.
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