Docket:
A-8-13
Citation: 2013 FCA 251
CORAM:
SHARLOW J.A.
MAINVILLE J.A.
NEAR J.A.
|
BETWEEN:
|
|
JEFFERY ROBY
|
|
Applicant
|
|
And
|
|
ATTORNEY GENERAL OF CANADA
|
|
Respondent
|
REASONS
FOR JUDGMENT
SHARLOW J.A.
[1]
The Employment Insurance Commission concluded that the applicant Jeffery
Roby received benefits under the Employment Insurance Act, S.C. 1996, c.
23, that exceeded his statutory entitlement by $5,426, and that he must
reimburse the Crown for the overpayment. Mr. Roby has consistently taken the
opposite position, but he has been unable to persuade the Commission, a Board
of Referees and an Umpire that he is correct. He now seeks relief from this
Court by way of an application for judicial review of the Umpire’s decision.
For the reasons that follow, I have concluded that Mr. Roby’s application should
succeed.
[2]
In this Court, the Crown conceded that Mr. Roby is entitled to succeed
with respect to $701 of the claimed overpayment because the Commission failed
to respect a statutory deadline. Therefore, Mr. Roby’s application must succeed
at least with respect to that $701. The amount now in issue is $4,725.
Statutory framework
[3]
The following provisions of the Employment Insurance Act are the
foundation of the Crown’s right to require a return or repayment of an amount
paid to a claimant in excess of the claimant’s entitlement:
|
43. A
claimant is liable to repay an amount paid by the Commission to the claimant
as benefits
(a) for any period for which the
claimant is disqualified; or
(b) to
which the claimant is not entitled.
|
43. La
personne qui 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
des prestations auxquelles elle n’est pas admissible est tenue de rembourser
la somme versée par la Commission à cet égard.
|
|
44. A
person who has received or obtained a benefit payment to which the person is
disentitled, or a benefit payment in excess of the amount to which the person
is entitled, shall without delay return the amount, the excess amount or the
special warrant for payment of the amount, as the case may be.
|
44. La
personne qui a reçu ou obtenu, au titre des prestations, un versement auquel
elle n’est pas admissible ou un versement supérieur à celui auquel elle est
admissible, doit immédiatement renvoyer le mandat spécial ou en restituer le
montant ou la partie excédentaire, selon le cas.
|
Facts
[4]
The relevant facts are undisputed and are briefly summarized. Mr. Roby
was a police officer in 2001 when he suffered a work related injury. He applied
for sickness benefits under the Employment Insurance Act. At the same
time, he submitted a “direct deposit application” which instructed the
Commission to deposit his benefits to his bank account at the Canadian Imperial
Bank of Commerce (CIBC).
[5]
Two important events occurred before the Commission formally advised Mr.
Roby that he was entitled to benefits. First, in November of 2002, he made an
assignment for the general benefit of his creditors under the Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B-3. The assignment in bankruptcy included
an assignment of Mr. Roby’s CIBC bank account, which came under the sole
control of the trustee in bankruptcy. Second, in December of 2002, Mr. Roby
instructed the Commission to disregard his direct deposit application because,
in his words, “the CIBC account is no longer valid.”
[6]
By letter dated February 10, 2003, Mr. Roby was informed that his
application for sickness benefits had been approved for the maximum 15 week
period from May 5, 2002 to August 17, 2002.
[7]
Unfortunately, in January of 2003, the Commission had already deposited
sickness benefits totaling $5,426 to Mr. Roby’s CIBC account, contrary to his
direction. On January 21, 2003, the Commission acknowledged to Mr. Roby that
his benefits had been deposited in error to the CIBC account and that the
Commission would accept full responsibility for not forwarding the funds to him.
At that time, the Commission assured Mr. Roby that they would “take care of it
from their end”, and apologized for the inconvenience. The next day, the Commission
sent Mr. Roby a cheque payable to him in the amount of $5,426. Mr. Roby
accepted the cheque and cashed it.
[8]
The record discloses no evidence as to what steps, if any, the
Commission took or tried to take to recover the unauthorized deposits from
CIBC, either through CIBC or through the trustee in bankruptcy.
[9]
In April of 2003, CIBC applied the unauthorized deposits to a debt owed
by Mr. Roby in respect of another account. The record does not disclose why or
on what legal basis that was done, but neither party has suggested that there
are grounds for finding any impropriety on the part of CIBC or the trustee in
bankruptcy with respect to that transaction.
[10]
The Commission subsequently took the position that Mr. Roby had received
his statutory entitlement twice, and sought to recover what they characterized
as an overpayment. It appears that by the date of the hearing of Mr. Roby’s
application in this Court, the Crown had collected some or all of the purported
overpayment.
[11]
As indicated above, Mr. Roby appealed to the Board, challenging the
Commission’s determination that there was an overpayment. A hearing was
convened to consider the appeal and the appeal was dismissed. However, that
decision was set aside by an Umpire because Mr. Roby was not given notice of
the hearing (CUB 78195). A second hearing was convened at which Mr. Roby
testified. In a decision dated January 17, 2012, the Board concluded that Mr.
Roby had received an overpayment. Mr. Roby appealed that decision. His appeal
was dismissed (CUB 80197). Mr. Roby now seeks judicial review of the Umpire’s
decision.
Discussion
[12]
The decision of the Umpire cannot stand. It is based on the Board’s
factual finding, confirmed by the Umpire, that the Commission had deposited Mr.
Roby’s benefits to his CIBC bank account in accordance with Mr. Roby’s
instructions. That factual finding was not reasonably open to the Board or the
Umpire in the face of the uncontradicted evidence that:
(a)
Mr. Roby withdrew his direct deposit application before his entitlement
was determined;
(b)
the Commission did not give effect to Mr. Roby’s withdrawal of the
direct deposition application;
(c)
before issuing the replacement cheque to Mr. Roby, the Commission
acknowledged its error in failing to give effect to the withdrawal and informed
Mr. Roby that they would “take care of things from their end”.
[13]
In these circumstances, Mr. Roby acted reasonably in accepting the
replacement payment offered by the Commission, based on the assurance of the
Commission that they would take responsibility for correcting the erroneous
misdirection of the previous payments.
[14]
Having determined that the Umpire’s decision cannot stand, it is
necessary for this Court to consider whether the issues raised by Mr. Roby
should be resolved by this Court on the available record. As there are no facts
in dispute, I have concluded that the record is sufficient to enable this Court
to reach an appropriate disposition. Given that this matter has been unresolved
for almost 10 years, it would be appropriate to do so.
[15]
It is argued for Mr. Roby that the only reasonable conclusion on the
available evidence is that the misdirected payments were not amounts paid to
Mr. Roby or from which he benefited, and therefore a fundamental condition for
the application of sections 43 and 44 of the Employment Insurance Act was
not met. The Crown argues the contrary, based on two cases, Lanuzo v. Canada (Attorney General), 2005 FCA 324 and CUB 54925 (July 5, 2002). For the following
reasons, I am not persuaded that those cases are dispositive.
[16]
In Lanuzo, a claimant for employment insurance benefits was held to
be required to repay the amount he had received in excess of his statutory
entitlement even though the overpayment was the result of an error on the part
of the Commission. I do not doubt the correctness of that decision, but it is
based on evidence that the claimant actually received the amounts that
comprised the overpayment. In this case, Mr. Roby did not actually receive the
amounts that the Commission misdirected to his CIBC bank account. That is
sufficient to distinguish Lanuzo.
[17]
CUB 54925 is a decision that is closer on its facts to this one, but it
is not identical. The claimant in CUB 54925 initially requested that his
benefits be deposited to his bank account with Canada Trust, and subsequently requested
that his benefits be deposited to his bank account with the Royal Bank. After
the amended request, the Commission mistakenly deposited to the Canada Trust
account a payment representing benefits for a certain two week period. When the
claimant advised the Commission that he had not received a payment relating to
that period, the Commission issued him a replacement payment, and warned him
that he was responsible for advising the Commission if the original payment was
discovered. The payment that was deposited in error to the Canada Trust bank
account was seized by a creditor of the claimant pursuant to a garnishment
order. The Board concluded, and the Umpire agreed, that the claimant benefitted
from the misdirected payment when it was applied, albeit without the claimant’s
consent, to reduce a debt he owed to a third party. On that basis, the claimant
was held to be liable to repay the amount claimed by the Commission as an
overpayment.
[18]
The difference in this case is that at the time the Commission misdirected
the payments in issue to Mr. Roby’s CIBC bank account, Mr. Roby was in
bankruptcy. Significantly, this was his first bankruptcy, with the result that
he was presumptively entitled to an automatic and absolute discharge from all of
his unsecured debts pursuant to section 168.1 of the Bankruptcy and
Insolvency Act (subject to certain exceptions that, on the available
evidence, probably would not have applied to Mr. Roby).
[19]
The Board and the Umpire should have considered whether, given these
circumstances, the misdirected payments actually benefitted Mr. Roby. If they
had considered that question, they would have concluded that on a balance of
probabilities, the debt reduced by the misdirected payments would have ceased
to be a liability of Mr. Roby upon his discharge from bankruptcy. That is
sufficient to distinguish the facts in this case from the facts in CUB 54925
and to support the position of Mr. Roby that the misdirected payments did not
benefit him.
[20]
I acknowledge the possibility that Mr. Roby could in fact have
benefitted from the misdirected payments. For example, the debt in issue might
have been a secured debt which would have been unaffected by the bankruptcy.
One may speculate about other possibilities but I am not prepared to do so, given
the assurances the Commission gave to Mr. Roby in 2003 that they would “take
care of [their mistake] from their end”. In these circumstances, it was
incumbent on the Commission to take at least the steps required to determine
with reasonable certainty what became of the misdirected payments before simply
assuming that they benefitted Mr. Roby.
[21]
The Crown argues that, by virtue of the definition of “total income” in the
Bankruptcy and Insolvency Act, the amounts deposited to Mr. Roby’s CIBC account
were income of Mr. Roby. That submission is coupled with a reference to the
obligation of the trustee in bankruptcy to determine the amount of income the
bankrupt is entitled to retain and the amount he must contribute to the estate.
It is not entirely clear how this submission assists the Crown’s position, but
in any event it is not supported by any evidence as to what, if anything, the
trustee in bankruptcy determined or did in relation to the payments in issue.
That is not surprising, given that there is no evidence that the Commission
made any attempt to investigate those matters.
Conclusion
[22]
The only reasonable conclusion on the evidence is that Mr. Roby did not
benefit from the misdirected payments. Therefore, I would allow the application
for judicial review and set aside the decision of the Umpire. I would refer
this matter back to the office of the Chief Umpire with a direction that Mr.
Roby’s appeal to the Umpire is to be allowed, his appeal to the Board is to be
allowed, and the Commission is to be directed to cease all attempts to collect
the purported overpayment from Mr. Roby, and to reimburse him for any amounts
that have already been collected on account of the purported overpayment.
Costs
[23]
Mr. Roby has also claimed costs in this Court. As the successful party,
he would normally be entitled to costs. However, Mr. Roby represented himself
until a very short time before the hearing in this Court. Normally the costs
awarded to a self-represented litigant are limited to disbursements. However,
that limitation does not apply in this case because the law firm Baker &
McKenzie LLP became Mr. Roby’s solicitor of record shortly before the hearing.
Mr. Tonkovich of that firm appeared at the hearing as counsel for Mr. Roby.
[24]
Baker & McKenzie LLP acted for Mr. Roby pro bono, but that is
not a bar to a costs award in Mr. Roby’s favour. That is well explained by Feldman
J.A., writing for the Ontario Court of Appeal in 1465778 Ontario Inc. v.
1122077 Ontario Ltd. (2006), 216 O.A.C. 339, 82 O.R. (3d) 757, at
paragraphs 34 and 35:
[34] It is
clear from the submissions of the amici representing the views of the
profession, as well as from the developing case law in this area, and I agree,
that in the current costs regime, there should be no prohibition on an award of
costs in favour of pro bono counsel in appropriate cases. Although the
original concept of acting on a pro bono basis meant that the lawyer was
volunteering his or her time with no expectation of any reimbursement, the law
now recognizes that costs awards may serve purposes other than indemnity. To be
clear, it is neither inappropriate, nor does it derogate from the charitable
purpose of volunteerism, for counsel who have agreed to act pro bono to
receive some reimbursement for their services from the losing party in the
litigation.
[35] To the
contrary, allowing pro bono parties to be subject to the ordinary costs
consequences that apply to other parties has two positive consequences: (1) it
ensures that both the non-pro bono party and the pro bono party
know that they are not free to abuse the system without fear of the sanction of
an award of costs; and (2) it promotes access to justice by enabling and
encouraging more lawyers to volunteer to work pro bono in deserving
cases. Because the potential merit of the case will already factor into whether
a lawyer agrees to act pro bono, there is no anticipation that the
potential for costs awards will cause lawyers to agree to act only in cases
where they anticipate a costs award.
[25]
Mr. Tonkovich also drew our attention to paragraph 36 of 1465778 Ontario, which confirms the general principle that costs belong to the party to
whom they are awarded (and, by necessary implication, not to that party’s
solicitor):
[36] Where costs are
awarded in favour of a party, the costs belong to that party. See Mark M.
Orkin, Q.C., The Law of Costs, looseleaf (Aurora: Canada Law Book, 2005)
at §204 and Rules of Civil Procedure,
rule 59.03(6). However,
pro bono counsel may make fee arrangements with their clients that allow
the costs to be paid to the lawyer. This ensures that there will be no windfall
to the client who is not paying for legal services.
[26]
In the Federal Court and in this Court, costs are payable to and by the
parties, and not their solicitors, because of Rule 400(7) of the Federal
Courts Rules, SOR/98-106. However, Rule 400(7) also provides that costs may
be paid to a party’s solicitor in trust.
[27]
At the hearing of Mr. Roby’s application in this Court,
Mr. Tonkovich candidly advised the Court that
there was no agreement between himself and Mr. Roby with respect to any sharing
of a costs award. However, after the hearing and while this matter was under
reserve, Mr. Tonkovich advised the Court by letter that he and Mr. Roby had agreed
that the portion of any costs award expressly allocated to the pro bono
services provided by Baker & McKenzie LLP could be retained by that firm.
[28]
In my view, this is an appropriate case to award costs for the benefit
of pro bono counsel. In exemplary fashion, Mr. Tonkovich untangled a
confusing body of evidence and argument, discerned the most important legal issues,
and effectively presented submissions that were of significant assistance to
the Court in the efficient resolution of this case. However, the amount of the
award must be modest given the applicable tariff, and will necessarily represent
only a fraction of the actual value of the time Mr. Tonkovich must have spent
in preparing for the hearing and presenting argument.
[29]
I would award costs in the amount of $2,500 inclusive of all
disbursements and taxes, payable to Baker & McKenzie LLP in trust, subject
to the following directions. (1) Mr. Roby is to be reimbursed for all disbursements
reasonably and necessarily incurred by him in this matter before Mr. Tonkovich
began to act for him, including court fees and the cost of preparing, serving
and filing documents. (2) Any amount that remains may be retained by Baker
& McKenzie LLP as compensation for their pro bono services. (3) If
any dispute arises as to the amount to which Mr. Roby is entitled, a motion may
be made to this Court for a resolution.
“K.
Sharlow”
“I agree
Robert M. Mainville J.A.”
“I agree
D. G. Near J.A.”
Email this Content