Docket: T-2043-13
Citation:
2014 FC 927
Ottawa, Ontario, September 30, 2014
PRESENT: The Honourable Madam Justice Gagné
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BETWEEN:
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MATTHEW TURNER
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Applicant
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and
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ATTORNEY GENERAL OF CANADA
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Respondent
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JUDGMENT AND REASONS
[1]
This is an application for judicial review of a
decision under section 18.1 of the Federal Courts Act, RSC 1985, c F-7,
dated November 5, 2013, rendered by the Canada Employment Insurance Commission
[Commission] to refuse to write off a $17,659 overpayment made to the
applicant. The Commission reasoned that it could not write off the applicant’s
debt because he had made false or misleading declarations in support of his
Employment Insurance [EI] claim, whether he knew them to be false or misleading
or not, pursuant to subsection 56(2) of the Employment Insurance Regulations,
SOR/96-332 [Regulations].
[2]
For the reasons discussed below, this
application for judicial review will be dismissed.
Background
[3]
The applicant, Matthew Turner, is a self-employed
small business owner, specializing in environmentally friendly ski and
snowboard waxes, operating as a sole proprietorship in Vancouver under the name
BeaverWax. He began developing his company in 2004 outside of his normal work
hours.
[4]
In June 2010, he was laid off from his position
with Sony Music, and so decided to focus on BeaverWax full time.
[5]
On July 13, 2010 the applicant submitted an
online application for EI benefits. He stated that he was self-employed,
working 15 hours or more per week in his self-employment business, and so was
not available for work.
[6]
On or about August 4, 2010, the applicant
confirmed to a Service Canada agent that he would be available and seeking full
time work in the ski and snowboard industry.
[7]
Based on this statement of availability and on
the basis that involvement in his business would be minor in extent, the
applicant’s claim for benefits was allowed.
[8]
On August 16, 2010, the respondent notified the
applicant in writing to declare his net income and the number of hours he spent
in self-employment for each week on his claimant report. The letter stated:
We are writing to inform you that we have
reviewed the information concerning your self-employment and have allowed your
Employment Insurance claim at this time.
You must tell us, however, if the number of
hours that you spend in self-employment increases. These changes could result
in you not being entitled to receive further benefits. If you do not tell us,
you may be overpaid.
Important
Reminder:
Declare your net income and the number of hours
you spend in your self-employment for each of the weeks on your claimant’s
reports.
[9]
The applicant did not declare any work or income
on any of his weekly claimant’s reports. Specifically, on each report, the
applicant declared “No” in response to the question:
Did you work or receive any earnings during the
period of this report? This includes work for which you will be paid later,
unpaid work or self-employment.
[10]
The applicant was paid EI benefits between July
2010 and June 2011.
[11]
Following an investigation in 2012, the
Commission determined that the applicant’s self-employment had not been minor
during the period he received EI benefits. A retroactive disentitlement was
imposed on the basis that the applicant had failed to prove he was unemployed
in accordance with sections 9 and 11 of the Employment Insurance Act, SC
1996, c 23 [Act] and section 30 of the Regulations.
[12]
The applicant appealed the question of
disentitlement to the Board of Referees [Board]. The question before the Board
was “whether or not the claimant is subject to the
imposition of disentitlement pursuant to sections 9 and 11 of the [Act] and
section 30 of the Regulations for failing to prove he was unemployed.”
[13]
The Board found that the applicant worked on a
full time basis on his business. The applicant had $19,455 in self-employment
in 2011. This was not “minor in extent or that he would
not normally rely on this employment as a principal means of livelihood.”
[14]
The Board observed, at pages 7 and 8 of its
decision, that the applicant was:
[F]orthright and totally honest in declaring
his intent to devote his full time and resources to developing self-employment.
The claimant clearly indicated that he was not available for work and still
received benefits.
[15]
While the Board unanimously dismissed the
appeal, it found that the Commission had erred in allowing the claim to begin
with and that the claimant’s self-employment activity was of a minor nature for
part of the period he received benefits. As such, the Board requested that the
Commission mitigate the overpayment:
The Board wishes to draw to the attention of
the Commission that they erred in allowing the claimant to receive benefits
when the claimant clearly articulated at the time of making application for
benefits in his initial reporting that he did not intend to look for work and
was devoting his full time and energies to building up the business. The
Commission did not question his availability when in fact he clearly was not
available for work. The Board requests that the Commission mitigate the
overpayment in light of the fact that the claimant clearly articulated to
them at the time of making application for benefits that he was working full
time in self-employment and should have not been allowed the claim for benefits
as he did not demonstrate his availability for work. The claimant has
clearly shown in his reporting and additional information on Exhibit 17 that
for part of this period the claimants’(sic) self-employment activity was of a
minor nature. [Emphasis added]
[16]
As such, the Board found as fact that section 52
of the Act applied to the claimant, and so the Commission could reconsider his
claim.
[17]
The applicant then requested that the
overpayment be written off under subsection 56(2) of the Regulations on the
basis that the error that resulted in the overpayment was the Commission’s
alone.
[18]
The Commission determined that the overpayment
did not meet the legislative requirements for a write off. By answering “No” on
each of the 25 reports to the question of whether he worked or received
earnings, the Commission determined that the applicant made false declarations,
whether he knew them to be false or misleading or not.
Issues and Standard of Review
[19]
The only issue raised by this application is
whether or not the respondent committed a reviewable error in refusing to write
off the overpayment made to the applicant.
[20]
As for the standard of review, both parties
agree that the issue is subject to the standard of reasonableness (Bernatchez
v Canada (Attorney General), 2013 FC 111 [Bernatchez]; Dunsmuir v
New Brunswick, 2008 SCC 9 at para. 47). The “Court must show
deference to decisions made by the Commission and will intervene only where it
can be shown that the impugned decision does not fall within a range of
possible, acceptable outcomes which are defensible in respect of the facts and
law (Bernatchez at para 22).
Analysis
[21]
The applicant submits that the respondent must
defer to the findings of fact made by the Board. The Board found:
1.
that the applicant was honest and forthright;
2.
that he clearly indicated that he was not
available for work and still received benefits;
3.
that the respondent erred in allowing the
applicant to receive benefits; and
4.
that the respondent did not question the
applicant’s availability when he was clearly not available for work.
[22]
The applicant relies on Campbell v Canada
(Attorney General), 2002 FCT 811 [Campbell], where the Commission
refused to write off an overpayment despite the Board’s finding that the
claimant had made no false or misleading statements. There, the Commission had
found that he did in fact make false or misleading statements. Justice
Tremblay-Lamer held, at paras 19 and 20, that the “Commission
could not disregard the findings of fact made by the Board of Referees on that
point” and so “[b]y failing to take into account
the findings of fact of the Board of Referees, the Commission fettered its
discretion and it cannot be said that it exercised its discretion judicially”.
[23]
The applicant takes the Board’s finding that he
was “honest and forthright” to be synonymous with a finding that he did not
make false or misleading statements.
[24]
As for the respondent, he maintains that the
Commission did in fact exercise its discretion judicially. The Commission’s
discretion to provide a write off only arises if a condition precedent set out
in subsection 56(2) of the Regulations is satisfied. An overpayment may be
written off only if it 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.
This did not occur in the case at bar, and so the Commission could not proceed
with the write off of the overpayment. I agree.
[25]
The applicant’s reliance on Campbell is
misplaced. In that case, the Board expressly found that the claimant had not
made any false or misleading statements. Instead, the factual situation in the
case at bar mirrors that of Mangat v Canada (Attorney General), 2012 FC
1409 [Mangat]. There, the Board had expressly found that the claimant
did not knowingly make a false statement. Nonetheless, it was held that the
reasons for making an error are not to be taken into consideration in reaching
a write off decision.
[26]
As Justice Campbell explained in Mangat,
responding to the same reliance on Campbell made by the
applicant in that case:
[12] […] I dismiss this argument. The
Commission did not make a finding of fact that is contradictory to a finding
made by the Board, it made a finding of relevance; it is irrelevant that the
Board found that the Applicant did not knowingly give inaccurate information in
his application for benefits.
[27]
In the case at bar, the fact that the Board
found that the applicant was forthright and totally honest in declaring his
intent to devote his full time and resources to develop self employment, and
that he first clearly indicated he was not available for work, is irrelevant to
whether the claimant knowingly or unknowingly made false declarations.
[28]
The Board explicitly noted that the claimant had
“declared no hours of work and no income on his
declarations,” that the “claimant was also
instructed to report his self-employment hours on his claim report,” and
that the claimant “was involved on a daily basis from 9-5
and on some occasions additional hours of work.” These statements
support no conclusion other than that the applicant made false or misleading
declarations, whether he knew them to be false or misleading or not.
Conclusion
[29]
While I express sympathy for the applicant’s
position, the Commission was unable to exercise its discretion to write off the
amounts claimed by the applicant. As Justice Campbell explained in Mangat at
para 13: “the clear intention of Parliament was to place
full responsibility on the Applicant for any errors or misrepresentations in
the application for benefits.” As such, section 56 of the Regulations
prevents the Commission from abiding by the Board’s request for mitigation.
[30]
At the hearing the parties informed me that they
agreed that should this application be dismissed, no costs be granted in favour
of the respondent. I believe that to be a fairly decent recommendation.
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