[1] Mr. Girard is appealing the decision by the Honourable Mr. Justice Lemieux confirming the Employment Insurance Commission's refusal to write off the overpayment of $7,236 in employment insurance benefits received by Mr. Girard. In my opinion, there are no grounds to intervene.

[2] Mr. Girard's request for a write-off was made in accordance with section 56 of the Employment Insurance Regulations (SOR/2002-236), which includes the following relevant elements:

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

. . .

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) La 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 :

...

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.

[3] Mr. Girard's request for a write-off is based on the fact that the overpayment that led to this litigation did not result from his own wrongdoing. When he applied for benefits, he honestly disclosed the circumstances of his employment, which led the Commission to establish an incorrect benefit period. It was not until several months later that the Commission realized that Mr.Girard was not entitled to the benefits that had been paid to him.

[4] Mr. Girard appealed the Commission's decision to the Board of Referees, which upheld the Commission's decision, but strongly recommended that the Commission consider the possibility of writing off the entire overpayment. At the Commission's request, Mr. Girard informed it of his financial situation. In light of the information provided, the Commission determined that the repayment of the overpayment would not cause Mr. Girard undue hardship and refused to allow the write-off. In making this determination, the Commission's officer relied only on the financial data provided by Mr. Girard, without taking into consideration the circumstances giving rise to the benefits application and the request to process the application by the Commission.

[5] In disposing of Mr. Girard's application for review, Lemieux J. held that the discretion conferred on the Commission by section 56 of the Regulations is subject to a condition precedent, in this case, that the repayment of the overpayment would cause undue hardship to the debtor. If the Commission is not persuaded that the repayment of the overpayment would result in undue hardship, it cannot address the issue of the write-off. In assessing the hardship that would be suffered by the debtor, the Commission only has to consider the factors relating to the repayment itself. Based on these reasons, Lemieux J. states that:

[26] The factors which the Commission failed to consider, namely the applicant's good faith, the reasons for the overpayment and the Board of Referee's recommendation, are not relevant to the stage of assessing the existence of the condition precedent.

[6] Before us, Mr. Girard's counsel contends that Lemieux J. was wrong and that in deciding whether or not there was undue hardship the Commission was required to consider not only financial factors but also all of the other circumstances leading to the unjustified payment. According to him, the circumstances as a whole qualify the hardship as undue hardship, including the circumstances surrounding the benefit application - not just the difficulties the debtor will have if he is bound to reimburse the overpayment.

[7] I do not agree. On reading the legislative provision, it is clear that the Commission must decide the question of whether "the repayment of the penalty or amount [payable under section 43 . . . or 65 of the Act] would result in undue hardship for the debtor." (Emphasis added). Put that provision in its context. Subsection 56(1) addresses the various circumstances in which the Commission can write off an amount due to Her Majesty. In the case before us, paragraph (f) of subsection 56(1) provides for such discretion in two situations: when the debt is uncollectable or when the repayment of the debt would result in undue hardship. These two possibilities are alternatives. The Commission must first consider whether the debt is collectable. Then, if the Commission considers that the debt is collectable, the issue of prejudice resulting from the repayment must be addressed. Insofar as the Commission must take into account all of the circumstances, these are the circumstances of the repayment and not those of the overpayment and benefit application that it must consider.

[8] In my opinion, the guidelines issued by the Commission for its officers responsible for write-off requests faithfully reflect the legislative intent expressed in paragraph 56(1)(f):

[TRANSLATION]

In fact, the officer will proceed to assess the debtor's family situation, professional situation and financial situation to establish that the repayment would create undue hardship.

[Appeal Book, p. 109]

The officer must consider all of the debtor's circumstances by assessing the hardship suffered by the debtor resulting from the repayment of the overpayment. It is only when this analysis leads to a finding of undue hardship that the issues of good faith, the cause of the overpayment etc. become relevant.

[9] There is nothing surprising about this legislative scheme. The beneficiary received public funds to which he was not entitled. The public interest requires that these funds be repaid except in the cases contemplated by paragraph 56(1)(f) of the Regulations, if the repayment is either impossible, or possible but at a cost deemed to be inordinate. The discretion conferred on the Commission enables it to moderate the severity of the repayment consequences by writing off all or part of the overpayment to the extent it considers necessary. But there is nothing to exempt debtors from a debt owed to Her Majesty as long as they are able to pay their debts.

[10] For these reasons, I would dismiss the appeal but, under the circumstances, without costs.

"J. D. Denis Pelletier"

J.A.

"I concur.

Décary J.A."

"I concur.

Létourneau J.A."

Certified true translation

Kelley A. Harvey, BCL, LLB

FEDERAL COURT OF APPEAL

SOLICITORS OF RECORD

DOCKET: A-365-04

APPEAL FROM A DECISION BY THE FEDERAL COURT DATED JUNE 23, 2004, DOCKET NO. T-535-03

STYLE OF CAUSE: STEVE GIRARD

Appellant

and

ATTORNEY GENERAL

OF CANADA

Respondent

PLACE OF HEARING: Montréal, Quebec

DATE OF HEARING: February 15, 2005

REASONS FOR JUDGMENT: PELLETIER J.A.

CONCURRED IN BY: DÉCARY, LÉTOURNEAU, JJ.A.

DATE OF REASONS: February 16, 2005

APPPEARANCES:

Gilbert Nadon

FOR THE APPELANT

Paul Deschênes

FOR THE RESPONDENT

SOLICITORS OF RECORD:

OUELLET, NADON & ASSOCIÉS

Montréal, Quebec

FOR THE APPELLANT

JOHN H. SIMS, Q.C.

Deputy Attorney General of Canada

Montréal, Quebec

FOR THE RESPONDENT

Date: 20050216

Docket A-365-04

Montréal, Quebec, February 16, 2005

CORAM: DÉCARY J.A.

LÉTOURNEAU J.A.

PELLETIER J.A.

BETWEEN:

STEVE GIRARD

Appellant

and

ATTORNEY GENERAL

OF CANADA

Respondent

JUDGMENT

The appeal is dismissed without costs.

"Robert Décary"

J.A.

Certified true translation

Kelley A. Harvey, BCL, LLB

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Girard v. Canada (Attorney General), 2005 FCA 65

Citations2005 FCA 65

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2005 FCA 65