Date: 20041201
Docket: A-221-04
Citation: 2004 FCA 410
CORAM: LINDEN J.A.
LÉTOURNEAU J.A.
SHARLOW J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
RAM GARG
Respondent
Heard at Vancouver, British Columbia on December 1, 2004.
Judgment delivered from the Bench at Vancouver, British Columbia on December 1, 2004.
REASONS FOR JUDGMENT OF THE COURT BY: LÉTOURNEAU J.A.
Date: 20041201
Docket: A-221-04
Citation: 2004 FCA 410
CORAM: LINDEN J.A.
LÉTOURNEAU J.A.
SHARLOW J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
RAM GARG
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Vancouver, British Columbia on December 1, 2004)
LÉTOURNEAU J.A.
[1] This application for judicial review should be allowed.
[2] The Board of referees (Board) found that the respondent, who operated a tomato greenhouse, received money from self-employment while he was receiving unemployment benefits, that the money received was farming income and that such income constituted earnings under subsection 15(2) of the Unemployment Insurance Regulations (Regulations). Therefore, subsection 35(10) of the Regulations applied and the allocation of the undeclared earnings resulted in an overpayment of benefits.
[3] Pursuant to that subsection, the income of a claimant who is self-employed in farming includes 15% of the claimant's gross income from farming transactions:
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35(2) Subject to the other provisions of this section, the earnings to be taken into account for the purpose of determining whether an interruption of earnings has occurred and the amount to be deducted from benefits payable under section 19 or subsection 21(3) or 22(5) of the Act, and to be taken into account for the purpose of sections 45 and 46 of the Act, are the entire income of a claimant arising out of any employment ...
35(10) For the purposes of subsection (2), "income" includes
...
(b) in the case of a claimant who is self employed in farming, 15 percent of the claimant's gross income from
(i) farming transactions; and
(ii) any farming subsidies the claimant receives under any federal or provincial program.
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35(2) Sous réserve des autres dispositions du présent article, la rémunération qu'il faut prendre en compte pour déterminer s'il y a eu un arrêt de rémunération et fixer le montant à déduire des prestations à payer en vertu de l'article 19 ou des paragraphes 21(3) ou 22(5) de la Loi, ainsi que pour l'application des articles 45 et 46 de la Loi, est le revenu intégral du prestataire provenant de tout emploi ...
35(10) Pour l'application du paragraphe (2), « _revenu_ » vise notamment :
...
b) dans le cas d'un prestataire qui est un travailleur indépendant exerçant un emploi relié aux travaux agricoles, 15 pour cent du revenu brut qu'il tire, à la fois :
(i) d'opérations agricoles,
(ii) de subventions agricoles qu'il reçoit dans le cadre d'un programme fédéral ou provincial.
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Thus 15% of a farmer's gross revenues is considered as earnings for unemployment insurance purposes. The respondent appealed the Board's decision to an Umpire.
[4] It should be noted that both before the Board and the Umpire, there was no dispute as to whether the respondent was involved in farming. The respondent filled out a Farming Questionnaire in which he declared that he was farming tomatoes: see Applicant's Record, page 24. In his income tax returns, he declared his income from the greenhouse as farming income: ibidem, page 88. Indeed, as acknowledged by the Umpire, the respondent's claim and appeals have proceeded throughout on the assumption that the respondent was self-employed in farming: see page 2 of the Umpire's decision.
[5] The adjudication by the Umpire was made on the basis of the documents filed. He confirmed the Board's finding that the respondent was self-employed. However he went on to conclude that the respondent's activities did not constitute farming. The real and only rationale for such conclusion appears at page 2 of the decision, where he commented, in the following terms, on the computation of income pursuant to subparagraph 35(10)(b) of the Regulations:
The rule is arbitrary in that it applies whether the farmer has a net income or, as in Mr. Garg's case, a loss.
[6] There is no doubt that the rule is sometimes harsh and has been criticized for that: see for example Melnychuk, CUB 54387. However as MacKay J., sitting as an umpire said in CUB 30339, the Regulation is clear and it is in the duty of the Umpire to apply the law:
The claimant, understandably, submits that ease of administration should not be a substitute for fairness, particularly in a case such as his own where farming expenses are clearly determinable from his personal expenses on the basis of his records and his operations. Although I have sympathy for the claimant's frustration, the Regulation is clear ... and it is not within the authority of the Umpire to depart from applying the clear text of the law as written.
[7] The Umpire raised on his own the issue of farming which had not been raised by any of the parties at the proceedings. He did so without giving the applicant the opportunity to be heard on the matter and make representations. This behaviour of the Umpire is objectionable on two grounds.
[8] First, it amounts to a breach of procedural fairness within the meaning of subparagraph 18.1(4)(b) of the Federal Courts Act. Second, it ignores the ruling of this Court in Attorney General of Canada v. Badwal, A-95-98/A-96-98, October 30, 1998: an Umpire is not and cannot be seized of an argument unless it has been raised before the Board. This is sufficient to dispose of the present application for judicial review without having to decide whether the respondent's activity amounted to farming.
[9] For these reasons, the application for judicial review will be allowed without costs in the circumstances. The decision of the Umpire will be set aside and the matter referred back to the Chief Umpire, or an Umpire that he designates, for a new determination on the basis that the respondent's appeal from the Board's decision should be dismissed.
(Sgd.) "Gilles Létourneau"
J.A.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-221-04
APPLICATION FOR JUDICIAL REVIEW AGAINST A DECISION OF R.C. STEVENSON, UMPIRE, DATED FEBRUARY 16, 2004
STYLE OF CAUSE: The Attorney General of Canada v. Ram Garg
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: 01 December 2004
REASONS FOR JUDGMENT OF THE COURT: Linden J.A., Létourneau J.A., Sharlow J.A.
DELIVERED FROM THE BENCH BY: Létourneau J.A.
APPEARANCES:
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Mr. Ward Bansley
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FOR THE APPLICANT
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No Appearance
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FOR THE RESPONDENT
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SOLICITORS OF RECORD:
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Morris Rosenberg, Deputy Attorney General of Canada, Ottawa Ontario
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FOR THE APPLICANT
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Mr. Ram Garg (on his own behalf)
Vancouver, BC
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FOR THE RESPONDENT
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