Date: 19980615
Docket: T-2251-97
BETWEEN:
CLAUDE
RANSON MILLARD
Applicant
-
and -
THE
ATTORNEY GENERAL OF CANADA
Respondent
REASONS
FOR ORDER
CAMPBELL J.
[1] This judicial review
concerns whether the Commissioner of the RCMP made a reviewable error in
interpreting the rules relating to certain relocation benefits available to
Corporal Millard as a retiring member of the Force. Cpl. Millard’s precise
complaint is that the Commissioner erred in selecting the deemed purchase date
of his principal residence for the purpose of evaluating the quantum of home
equity assistance compensation. In my view, however, this issue is subsidiary
to the larger question of whether a reviewable error has been made in the
interpretation of the overall scheme of the relocation rules.
[2] In the following words used
by Commissioner J.P.R. Murray, it is clear that his decision to
deny Cpl. Millard’s application for compensation is heavily, if not
exclusively, based on the findings of an External Review Committee:
The record in this matter has been read carefully
including the Findings and Recommendations of the External Review Committee.
Upon careful review of all the material before me, I am in agreement with the
External Review Committee. In effect, the Committee’s position is in agreement
with the Force’s interpretation of section 4.4.4 of the Relocation Directive.
I also agree with the Committee and find that the
acquisition date for the Toronto residence is May 17, 1994. That date being
when Cpl. Millard gave up the section 4.4.4 option and Ms. Baker was recognized
as the member's spouse.
As there was no 10% market decline from May 17, 1994 to
the date that the house was sold, Cpl. Millard does not meet an essential
criteria of HEAP. As such, he is ineligible to recover any price difference.
This decision is taken in isolation of the examples
provided by the Committee; ie. examples of circumstances that in the
Committee’s view could alter their view of the operation of section 4.4.4.
Grievance denied.
[3] Given that the
Commissioner’s decision does not contain any independent critical analysis, I
find that if the recommendation of the External Review Committee is based on an
error of law, so is the decision of the Commissioner.
A. The relocation rules
[4] For the rules to be
properly interpreted, they must be considered together in their entirety. To assist in the analysis which
follows, however, the following extracts, including headings, provide insight
into the overall scheme of the rules and their administration:
Administration Manual VI.2:
1. Relocation
...
K. Disposition and Acquisition of Accommodation
K. 5 Home Equity Assistance (App. VI-2-1,
4.4.10)
K. 5 a. General
1. The purpose of the Home
Equity Assistance Program is to financially compensate a member who is facing a
significant loss on the sale of his/her principal residence.
2. A decline in the general real
estate market of at least 10 percent from the time the member purchased his/her
principal residence until the sale of that residence must occur before
individual circumstances can be considered for reimbursement.
...
6. When the criteria of general
decline in the market have been met along with other criteria in K.5.a.,
reimbursement will be 90 percent of the difference between the purchase price
and the sale price where sale price in the member’s principal residence is
lower than the purchase price.
Example:
Purchase Price $100,000.00
Sale Price $88,000.00
Loss $12,000.00
The member will be reimbursed 90
percent of $12,000, i.e. $10,800.
...
9. As a general rule, the
purchase price is determined by using the amount of money the member actually
expends on the principal residence including down payment and value of home
mortgages, plus:
1.the
actual cost of improvements supported by receipts or statutory declaration, or
2.the
value by cost approach of improvements, to the maximum of the standards and
norms of the community as provided by professional appraisers. See App.
VI-2-1, 4.4.10(i)(ii) and App. “G” Sec. 5.
K. 5. b. Member
1. Ensure you select a principal
residence which you intend to purchase with due consideration of the Home
Buyer’s Guide at App. VI-2-1, App. “G”.
NOTE: Failure to follow these
guidelines and provisions of App. VI-2-1, 4.4.10(c) may result in nonacceptance
of your application for equity assistance at the time of sale.
Administration Manual Appendix VI-2-1:
1. Introduction
1.1 Purpose and Scope
1.1.1 It is the policy of the RCMP that:
(a)in any relocation, the aim
shall be to relocate the member at a minimal cost to the public while
reimbursing the member for all actual and reasonable relocation costs within
the limits of this Directive;
(b)RCMP relocation provisions
will be based upon the needs of the relocated member and relocation policies in
effect in the public and private sectors;
(c)the relocation provisions
which generally apply to moves within Canada shall provide only for the
member's legitimate expenses, without opening the way for personal gain or for
the underwriting of extravagances. Expenses resulting from misinterpretation
or mistakes shall not be a basis for reimbursement;
...
1.4 Definitions
...
Dependent means any person who lives with the member and is
either the member’s spouse, a person for whom the member can claim exemption
under the Income Tax Act, or a member’s unmarried child, step-child,
adopted child or legal ward who cannot be claimed as an income tax deduction
but is in full-time attendance at school. A family member who is permanently
residing with the employee, but who is precluded from qualifying as a dependent
under the Income Tax Act because he/she receives a pension shall also be
considered as a dependent under this policy.
...
Principal residence means a single-family dwelling owned, leased or
rented by the member or dependent residing with the member, which was occupied
continuously at the time of the relocation order, and which is recorded as the
member’s permanent address at division headquarters. Summer residences or
other temporary or seasonal accommodation are excluded. (This definition will
not apply for Sec. 4.4.4 and 4.4.9. In these cases, the residence involved
must conform to the definition at the time the member elects to employ the
particular section.) (The term “leased or rented” is effective 87-01-01.)
Relocation means the authorized geographical transfer of a
member from one place of duty to another; or the authorized geographical
transfer or a newly engaged member from his/her pre-engagement place of
residence to his/her first place of duty upon being sworn into the Force
(excluding training sites).
Relocation Booklet means the information document provided to each
relocating member which serves as a summary of guidelines for planning and
executing a transfer. The booklet itself is without statutory significance, and
in the event of any interpretive conflicts, it will be superseded by this
directive.
Replacement residence means a single-family dwelling
purchased or leased at the new place of duty which will become the member’s
principal residence following the relocation.
...
Spouse means husband or wife.
Spouse, Common-Law means a person of the opposite sex who cohabits with
the member and for whom evidence has been provided, by means of affidavit to
the satisfaction of the Commissioner, that together they have been recognized
as husband and wife and have represented each other as such for a continuous
period of at least one year in the community or communities in which they have
lived. If these conditions have been satisfied, a common-law spouse will be
entitled to the same reimbursement as a spouse under this directive.
...
4. Disposition and Acquisition of Accommodation
4.1 General
4.1.1It is the intention of the RCMP
to support a member in disposing of his/her principal residence at the old post
and to acquire a replacement residence at the new post. Such support is
available on one occasion only per relocation within a two year period from the
date the member/dependents departed from the old post. While disposal of a
principal residence is generally undertaken in connection with a relocation
transfer, reimbursable disposal may also take place either before or after an
authorized transfer provided the provisions of sections 4.4.4 or 4.4.9 are
followed.
(a)Effective 84-02-09, the
two-year period may be waived in exceptional circumstances with the approval of
the Commissioner or his delegate, e.g. employer created impediment.
(b)Members purchasing
property should refer to restrictions outlined in Sec. 4.4.2, 4.4.5, 4.4.6, and
4.410 respecting limited reimbursement on sale of the property.
...
4.2 Rent in Advance of the Move
...
4.3 Lease Liability
...
4.4 Real Estate Broker’s Fees
4.4.1The reimbursement of a real
estate broker’s commission is authorized to enhance a member’s mobility by
facilitating disposal of his/her principal residence. When a member is ordered
to relocate within Canada and sells his/her principal residence at the old
post, and if such commitments are made within two years (except under Sec.
4.4.4 and 4.4.9) from the date the member and/or his/her dependents departed
from the old post, the fee charged by the real estate broker shall be
reimbursed provided that:
(a)Except under sec.4.4.9, at the
time of notification of relocation, the principal residence was occupied by the
member. See Sec. 4.4.4.
(b)The principal residence was on
a lot of a size appropriate to its location;
(c)The fee charged is within the
scale for the multiple listing service (MLS) in the area;
...
4.4.4In cases where the member will
occupy government supplied accommodation at the new post, or where, for
personal reasons, he/she wishes to retain the residence at the old post, it
will not be necessary for the member to have his/her residence continuously
listed for sale. The following procedure may be followed:
(a)The member should obtain the
advice of his/her sending division FSSB and persons qualified in the real
estate field prior to opting for this course of action (See Sec. 4.5.1(a) and
4.6.1(a).
(b)The member shall submit a
memorandum to the sending division FSSO within 90 days of his/her notification
of transfer setting out his/her intent to retain the old post residence. This
90 day limitation may be waived only upon the authority of the Commissioner or
his delegate.
(c)The maximum real estate fee to
be reimbursed at the time of sale of the old post residence will be determined
by the appraised value of the real estate commission rate (MLS) in existence at
the time the member departs on transfer. Should real estate fees increase, the
foregoing will remain the maximum amount reimbursable, but if real estate fees
decrease, the actual fee will be reimbursable.
(d)The member must obtain a
written appraisal of his/her residence and forward a copy to the sending
division FSSB. He may submit a claim for payment of this expense accompanied
by proof of payment.
...
(f)The appraised value of the
house will be determined in the following manner:
...
(g)A member will be eligible to
claim expenses for the disposal and acquisition of residences that occur after
the retained residence is sold or that occur after the member gives up the
option under this Section.
...
(j)Authority to retain the old
post residence under this provision expires upon notice of the
transfer/relocation to the location for which the authority was granted.
...
4.4.9Members may choose to dispose of
a principal residence for reasons other than an authorized relocation transfer
and remain eligible for current disposal expenditures if subsequently
authorized to relocate, provided that:
(a)The Commissioner or delegate
has established that one of the following condition exist:
(i)housing
values are steadily falling at the location;
(ii)it is
an area where there is a limited market; or
(iii)it
is at a location (such as a one-industry town), where “boom and bust” cycles
are likely;
(iv)The
Commissioner or delegate shall determine the Purchase Price for the purpose of
reimbursement under this section in considering:
-Reasonableness
of initial purchase price considering market conditions at that time, along
with recognition of guidelines within the Home Buyer’s Guide. See App. “G”.
-Maintenance
such that value is reasonably retained.
-Reasonableness
of sale price, recognizing current market conditions and RCMP requirement for a
relocation.
...
(j) Reimbursement
(i)A
member who meets the criteria of this section, upon the sale of his/her
principal residence may be reimbursed 90% of the difference between the
purchase price and the sale price as established herein.
(ii)In
exceptional cases of hardship in which the circumstances of the case do not
meet the criteria of this section, the Commissioner may, with the approval of
the Secretary of Treasury Board of Canada, authorize reimbursements appropriate
to the circumstances.
...
4.5 Legal Fees
...
4.6 Other Expenses
4.6.1 (a) (i)If a
member who qualifies for the reimbursement of real estate and legal fees (see
Sec. 4.4.1, 4.4.4, 4.4.9 and 4.5.2) must terminate the mortgage(s) on the sale
of the principal residence at the old place of duty, and is required to pay a
mortgage repayment penalty, that member shall, on presentation of proof of
payment, be reimbursed the amount of the penalty payment not exceeding six
months mortgage interest. Costs related to the termination of a second
mortgage may only be reimbursed if there are no such costs incurred in relation
to a first mortgage.
(ii)Effective
85-11-07, in cases of demonstrated need or exceptional circumstances, the
Commissioner or his delegate may authorize an extension not exceeding six
months for a mortgage repayment penalty.
(iii)Members
who have elected to utilize Sec. 4.4.4 will only be able to claim mortgage
penalty payments up to the amount of penalty which would have applied on their
date of departure from the post where the residence was retained.
(iv)Members
who have elected to use Sec. 4.4.9 will only be able to claim mortgage
repayment penalty up to the amount of penalty which would have applied on the
date of transfer notice from the post where the principal residence was sold.
Administration Manual Appendix VI-2-1 (App. “G”):
Home Equity Assistance
Home Buyer’s Guide
...
3.You should purchase a
home that fits your budget and life style needs. Generally you can not pick
the best time to sell and therefore a home should be chosen that’s readily
resalable. A home appropriately priced and located in the right environment
will generally sell within a reasonable time frame.
The following guidelines are provided:
(a) Selecting a New Community
...
(b) Evaluating a Neighbourhood
...
(c) Choosing Your New Home
You’ve selected your
community, evaluated neighbourhoods and now comes the big decision - choosing
your home. Home selection is personal, but in order to make the best selection
be careful not to let your emotions buy - or not buy a house. Stay objective,
and keep these points in mind:
-SETTING. Does the house fit the neighbourhood in terms of price and style
with the surrounding homes? Does the home look like it belongs on the lot and
in the neighbourhood?
-Decor and furnishings not to your taste can always be changed, but you should
purchase a home to meet your personal needs to the extent possible.
-FUTURE EXPENSES. Is substantial fix-up needed? Look for cosmetic coverups of
serious problems. Avoid purchasing a “handy man’s special” unless that is
really what you want.
B. The factual and
adjudicative history of Cpl. Millard’s application
[5] The history leading up to the decision the Commissioner
ultimately reached is important since it provides the institutional context in
which the decision was made.
[6] The Applicant is a retired RCMP
Corporal. In 1992, Cpl. Millard worked in "E" Division in Victoria,
B.C. where he owned a home and was married. During 1992, Cpl. Millard and Ms.
Millard separated and subsequently divorced on September 17, 1993.
[7] On December 24,
1992, Cpl. Millard was transferred to "O" Division in Newmarket,
Ontario and chose to retain his house in Victoria in accordance with section
4.4.4 of the RCMP Relocation Directive. On January 1, 1993, Cpl. Millard began
cohabiting with Ms. Joyce Baker in Toronto in a residence that had been
purchased by Ms. Baker in 1988 for $2,583,000.00. This is the residence for
which Cpl. Millard made a request for compensation under the HEAP provisions.
[8] On April 21, 1994,
Cpl. Millard advised the RCMP that he was going to make a pre-retirement move.
Cpl. Millard requested information relating to his relocation benefits for such
a move. The Financial Services and Supply Officer, "O" Division (the
"FSSO") responded on April 22, 1994, informing Cpl. Millard that, as
he and Ms. Baker had lived together for more than one year, she qualified as
his spouse for the purpose of the Relocation Directive and that he qualified
for relocation reimbursement with respect to their joint residence in Toronto.
The FSSO also informed him that such reimbursement would only be possible if he
first sold his house in Victoria, B.C. or gave up his option for this residence
under s. 4.4.4 of the Relocation Directive.
[9] On May 17, 1994,
Cpl. Millard gave up his option under s. 4.4.4 with respect to his Victoria
residence and requested further information about his qualification for
reimbursement under HEAP.
[10] On June
13, 1994, the FSSO responded that he had been advised by the Chief Financial
Officer (the "CFO") that, for the purpose of the HEAP reimbursement,
the purchase price of Cpl. Millard's Toronto residence would be the estimated
value of the residence as of the date that Cpl. Millard and Ms. Baker starting
cohabiting together. He also informed Cpl. Millard that he would only be entitled
to reimbursement if there had been a 10% market decline since the time of his
cohabitation. The FSSO requested that Cpl. Millard provide the RCMP with an
opinion letter from a real estate agent with respect to whether a 10% decline
had occurred.
[11] On July
13, 1994, Cpl. Millard sent the RCMP a letter from a real estate broker which
stated that there had been a 23% decline in the Toronto real estate market
between February 1993 to June 1994. Cpl. Millard requested that he be considered
under HEAP.
[12] On August
5, 1994, Ms. Baker sold the Toronto house for $1,350,000.00.
[13] On August
11, 1994, the Acting OIC Financial Management Section requested a legal opinion
on the questions of whether Ms. Baker could be considered Cpl. Millard's spouse
under the RCMP's Relocation Directive, whether property rights differed for
married versus cohabiting partners, and whether the RCMP was obliged to offer
assistance under HEAP given that there was no indication that Cpl. Millard had
contributed to the purchase price of the Toronto home.
[14] On
October 4, 1994, Cpl. Millard requested that he receive reimbursement under
HEAP for $207,000.00. This amount represents 90% of the difference between the
sale price and the appraised value of the house on January 1, 1993, the day
Cpl. Millard began cohabiting with Ms. Baker. The RCMP requested market values
of the house from private appraisal companies.
[15] On October
25, 1994 a Financial Control analyst provided a report to the Acting OIC
Financial Control regarding Cpl. Millard's HEAP application. Contrary to the
information given to Cpl. Millard by the FSSO, this analyst determined that the
time frame for consideration of whether assistance should be provided should
run from May 17, 1994, being the date when Cpl. Millard relinquished his option
on his Victoria home under s.4.4.4, to August 5, 1994, being the date the
Toronto home was sold. Since there was only a negligible market decline during
this time period, it was determined that Cpl. Millard was not entitled to
reimbursement under HEAP.
[16] On
October 28, 1994, the Acting OIC Financial Officer agreed with the Financial
Control analyst's report and informed the FSSO of his decision. The FSSO, in
turn, contrary to his previous advice, informed Cpl. Millard that his HEAP
application had been denied.
[17] Cpl.
Millard commenced a Level I grievance on November 29, 1994. The Level 1
decision is dated October 13, 1995 and was issued by the Director of Finance
and Supply. The decision upheld the position that Cpl. Millard was not
entitled to reimbursement under HEAP.
[18] As a
result, Cpl. Millard commenced a Level II grievance which resulted in the
Commissioner’s decision under review in this application.
C. The interpretation of the rules by the External Review
Committee
[19] In her March 6, 1997
“Findings and Recommendations”, the External Review Committee Chairperson, Ms.
Jennifer Lynch, Q.C., identified the following issues for determination:
i) Should the acquisition date of the Toronto property
be determined in relation to the date that the Grievor [Cpl. Millard] gave up
his Relocation Directive 4.4.4 option on his residence in Victoria?
ii) On what date should Ms. Baker be recognized as the
Grievor’s spouse for the purpose of the Relocation Directive?
iii) If the resolution of the previous two issues is
such that the Grievor would normally qualify for reimbursement under HEAP, do
other general principles of the Relocation Directive nevertheless prevent
reimbursement in this particular type of case?
[20] Respecting the first
issue, the Chairperson made the following findings:
Section 4.4.4 has a potential impact on HEAP through
the determination of the date of purchase of a residence at the new post. In
turn, the determination of the date of purchase is relevant for the purpose of
establishing the time period for measuring market decline: the 10%
market-decline criterion is measured from the date of purchase to the date of
sale.
There are at least two alternative views on how section
4.4.4 should operate in conjunction with determination of the date of purchase
for the purpose of HEAP. The first view is that once an option under section
4.4.4 is relinquished, the fact that the option was held should have no effect
on the deemed purchase date, for the purpose of HEAP, of another property at
the new post. That is, the purchase date would be determined by the otherwise
applicable method and would not be deemed to be the date that the member
gave up his option under section 4.4.4. This is the view supported by the
Grievor. In his opinion, once a section 4.4.4 option on a previous residence is
relinquished, it is deemed never to have been held and has no effect on
reimbursement of expenses with respect to relocation costs of subsequent
residences.
The alternate view is that section 4.4.4 does have a
direct impact on the determination of the date of purchase for the purposes of
HEAP. This is the view supported by the OIC Financial Control and which has
been applied by the Level I adjudicator. Under this view, maintaining a section
4.4.4 option on a residence at a former post has the effect of deeming this
residence to be the member's principal residence. Therefore, the residence at
the new post is not deemed to be acquired for the purpose of Part 4 of the
Directive (4. "Disposition and Acquisition of Accommodation") until
the section 4.4.4 option on the residence at the old post is relinquished.
...
How does the option under section 4.4.4 operate in
conjunction with HEAP? Paragraph 4.4.10(f) indicates that HEAP can apply when a
house retained under section 4.4.4 is sold. More to the point, paragraph
4.4.4(g) indicates that once a residence retained under section 4.4.4 is sold,
or the option is given up for this house, a member will be eligible to claim
expenses associated with the acquisition or disposal of a residence after that
date. It is not disputed that the HEAP expenses are included in the expenses
eligible to be claimed once the section 4.4.4 option expires. The dispute,
rather, relates to the method by which paragraph 4.4.4(g) operates with respect
to the purchase date of the house under the HEAP provisions. None of the
provisions in the Relocation Directive would appear to directly address this
issue.
One must consider the basic purpose of paragraph
4.4.4(g), the central provision in this grievance. It does not appear to be
disputed that this provision, in its effect, provides certain restrictions on
reimbursement of expenses associated with disposal and acquisition of future
residences: only those expenses that occur after the date of sale of the
section 4.4.4 residence, or the date the section 4.4.4 option is given up, can
be reimbursed. What is the purpose of such a provision? In my view, this
provision has the purpose (among other purposes) of preventing section 4.4.4
from being used as a means to subsidize a member's transaction in investment
real estate, other than a single principal residence. If it were not for the
restriction at paragraph 4.4.4(g), a member could use section 4.4.4 as a means
of retaining a residence as an investment at the former post, with the Force
underwriting the transaction costs and any equity loss, while at the same time
the member has been provided Force assistance with the transaction costs of
purchasing a residence at the new post.
...
Paragraph 4.4.4(g) guards against the use of section
4.4.4 as a means of a member having two principal residences, at any one time,
for the purposes of the Directive. The restriction logically may be interpreted
as extending to a restriction against having concurrent HEAP guarantees running
on two residences at the same time.
...
I therefore support the Force's interpretation of the
interaction between section 4.4.4 and the HEAP provisions. The deemed acquisition date of
the Toronto residence should be the first date on which the Grievor had both
given up his section 4.4.4 option on the Victoria residence and was
recognized as Ms. Baker's spouse. The Grievor gave up the section 4.4.4
option on May 17, 1994. While there is a disagreement with respect to the exact
date on which the Grievor was recognized as Ms. Baker's spouse, it is clear
that the Grievor was so recognized prior to the date the section 4.4.4 option
was relinquished. I find, therefore, that May 17, 1994 is the relevant date. As
it is not disputed that there was no 10% market decline between this date and
the date that the house was sold, I find that the Grievor did not meet one of
the basic criteria for HEAP eligibility. [Emphasis added]
[21] After reaching this
conclusion, the Chairperson then said this:
Given my findings, it is not necessary for me to
address the second and third issues identified at the beginning of the analysis
above.
However, she did go on to make “Additional Comments” as follows:
I must express some caution with respect to my support
for the Force’s interpretation of the deemed acquisition date of the new-post
residence under HEAP. Notably, to the extent that the disposition of this
grievance is a precedent for other cases, my support for the Force’s
interpretation should be taken as limited to the general type of factual
circumstances discussed in the present case. It is difficult to anticipate all
possible factual circumstances and it is possible that the strictures of the
Force’s interpretation might not apply to every possible set of events.
Two possible exceptions to the interpretation
immediately come to mind. First, there may be circumstances where a member
retains a residence at the old post, but does not do so under section 4.4.4; i.e.
the residence is not retained on an indefinite basis under 4.4.4, but rather
the residence has been listed for sale, has not yet sold at the time of the
member’s move, and is continuously listed for sale after the move. In these
circumstances, it might not be in accordance with the purpose of the policy to
restrict the deemed acquisition date of the new home to the date that the
old-post residence is sold. While this supplement to the interpretation could
have the result of allowing HEAP guarantees on two residences at the same time,
it might be permissible exception. The exception might be justifiable because
it does not arise in circumstances where a member has specifically invoked an
option to retain a previous residence as a principal residence, but rather
arises where the member has chosen the new residence as the principal residence
and has been temporarily unable to sell the previous residence despite making
all efforts to do so. In these circumstances, it might be a legitimate
interpretation of policy to find that the date of sale of the old-post
residence has no effect on the date that the new-post residence was deemed to
have been acquired as the principal residence.
Another possible exception is a situation where a
residence is retained at the old post under section 4.4.4, another residence is
acquired at the new post, and the residence at the new post has appreciated in
value by the time the old-post residence is sold or the section 4.4.4 option is
relinquished. Assuming further that the new-post residence subsequently
depreciates in value by the time it is sold, such that it becomes potentially
eligible for HEAP, it might be contrary to the purposes of the policy to
interpret the deemed acquisition date of the new-post residence as being the
date the 4.4.4 option expired. Where the new-post residence had a higher value
on the date the 4.4.4 option expired than the actual purchase date, the higher
value perhaps should not be used because using the higher value would have the
effect of allowing members to obtain HEAP reimbursement on amounts greater that
the member’s actual loss; this result could be seen as contrary to the purposes
of the Relocation Directive expressed at section 1.1.1, which refers to “actual
and reasonable relocation costs”. Thus under the possible supplemental
interpretation discussed here, the deemed acquisition date (and value) of the
new-post residence would be the date (and associated value) where the new-post
residence had the lower value, as between the date of purchase and the date the
4.4.4 option expired. While a ‘lower of the two values’ approach might
initially seem unfair to members, upon closer examination it may well be the
interpretation which best respects the purposes of the Relocation Directive as
discussed in this analysis.
There may, of course, be other exceptions in addition
to the two potential supplemental interpretations discussed immediately above.
I wish to emphasize as well that the circumstances discussed above are raised
only as hypothetical examples and I am not stating that I would necessarily
support the supplemental interpretations. I discuss these supplemental
interpretations only as possibilities illustrating the need for caution in
extrapolating the interpretation in the present grievance to other
circumstances. Whether the supplemental interpretations would actually be
supported, and whether there are other possible supplemental interpretations,
are questions I would prefer to leave to possible future deliberations in which
such issues arise and are fully argued.
D. Reviewable error in the External Review Committee’s
recommendation
[22] Since the Chairperson’s
recommendation only determined the first of three issues identified, my
analysis and decision will be similarly confined, with one exception which is
outlined below.
[23] In my opinion, each of
the italicized portions of the Chairperson’s recommendation reflects errors in
the interpretation of the rules, which taken together, constitute an error in
law.
1. Overall scheme of the relocation rules
[24] The idea expressed in
s.1.1.1 of the rules is that members should be provided with reimbursement and
compensation for claims arising from relocation which are considered to be bona
fide. Obviously, an interpretation must be found which works to accomplish
this objective. The interpretation adopted by the Chairperson, by her own
admission in the “Additional Comments” does not work in bona fide cases. These
cases can hardly be classified as “exceptional hardship” under s.4.4.10(j)(ii)
thus qualifying for special relief. Therefore, the Chairperson’s principal
interpretative finding of a relationship between s.4.4.4 and s.4.4.10 is, in my
opinion, fundamentally flawed.
[25] The apparent agreement
between the parties to a relationship between the two sections does not limit
the requirement to decide if this is a correct conclusion. The Chairperson
acted on the agreement without scrutiny, which led her to a conclusion which
she agreed did not fit with the facts of easily predictable cases.
[26] Regarding the overall
scheme of the rules, under s.4 “Disposition and Acquisition of Accommodation”,
s.4.1.1 provides that it is the intention of the RCMP to provide relocation
“support”. There are a number of kinds of support listed:
s.4.2 Rent in Advance of the Move
s.4.3 Lease Liability
s.4.4 Real Estate Broker Fees
s.4.5 Legal Fees
s.4.6 Other Expenses
[27] Section 4.4.4 allows an
old post residence to be retained. Because s.4.4.4(j) alludes to “authority
to retain the old post residence under this provision”, and s.4.4.10(f) speaks
of “residences for which approval has been received under s.4.4.4 and
s.4.4.9”, although it is not specifically stated in the section itself, it
seems that s.4.4.4(a) intends that permission be obtained to retain an old post
residence. This requirement to gain authority and approval apparently arises
as an implicit adjunct of the terms of s.4.4.4(b) which require that a member
who wishes to retain an old post residence must give written notice of an
intention to do so.
[28] The approval requirement
implies that there must be a good reason to retain the residence. For example,
perhaps the member will be relocated back to the place of the retained
residence; s.4.4.4(j) is a specific provision contemplating this situation.
The requirement in s.4.4.4(a) for a member to seek advice before deciding to
retain an old post residence implies that a good Force reason, or a good real
estate market reason, should exist.
[29] Section 4.4.4(c)
stipulates the maximum real estate fee which can be paid on an old post
retained residence being that based on the appraisal process outlined in
s.4.4.4(f). The question is: is that also the type of “expenses” referred to
in s.4.4.4(g)?
[30] Some light is thrown on
the answer to this question by reference to other sections of the relocation
rules which reinforce the topic of s.4.4.4. In this respect, of note are the
opening words of s.4.6.1(a)(i) “if a member who qualifies for the reimbursement
of real estate and legal fees (see Sec. 4.4.1, 4.4.4, 4.4.9 and 4.5.2)...,
and the terms of s.4.4.9 which speak specifically about “current disposal
expenditures” as the issue under s.4.4.
[31] Given the consistent
theme within s.4.4.4, the reinforcing words in the other provisions noted, and
the general lay-out of the rules, I find that the “expenses” referred to in
s.4.4.4(g) are only “broker’s fees”.
[32] A distinct break occurs
in the continuity of the rules between s.4.2 and s.4.6 with the injection of
s.4.4.10, which under its new bold heading addresses yet another category of
support being “Home Equity Assistance”. The purpose of s.4.4.10 is stated in
rules s.4.4.10(a) and K.5(a)(1), and when they are read together, “partial
equity protection” is considered “compensation”. In my opinion, providing this
form of compensation is something different than “the reimbursement of real
estate broker’s commission” as expressed in s.4.4.1.
[33] Thus, while s.4.4.10
admittedly, but inexplicably, found its way into s.4.4, on a literal
interpretation of the terms of the rules I find that the provisions of “Home
Equity Assistance” under s.4.4.10, and the rules relating to retained
residences under s.4.4.4 and specifically s.4.4.4(g), must be read and applied
separately.
[34] By considering the rules
separately, s.4.4.4 is not difficult to interpret. It provides rules
respecting the timing and amount of the payment of broker’s fees that can be
made when a member retains a residence. Similarly, s.4.4.10 has its own self
contained criteria, the principal one of which is that compensation only
applies to a member’s principal residence.
[35] Whether a residence is a
person’s “principal residence” is a question of fact. It is possible that a
member might own more than one residence in a particular location, but the one
that qualifies for HEAP is the one that meets the definition of principal
residence. The recording of a particular residence in division headquarters
serves to clearly identify the residence that the member wishes to be his or
her principal residence.
[36] While it is true that a
member can only have one principal residence at a given point in time, on my
interpretation of the rules, the compensation process applies to a member’s principal
residences over time from which he or she has relocated.
[37] Therefore, in my opinion,
HEAP liability can exist for two residences at any one time. And why not? The
purpose is to financially support a relocating member going through the
relocation process. The member does not collect HEAP as a windfall benefit.
It is compensation provided over and above a loss already suffered. There
might very well be two or more HEAP liabilities outstanding depending on the
rapidity and frequency of a member’s relocation. Regardless, if they are bona
fide, they should all qualify for compensation.
[38] Under the compensation
provisions there are additions to the definition of “principal residence” for
the purposes of obtaining compensation; not only must it be the principal
residence, that is the one that meets the definition, but it must also be one
which the member and/or spouse owned and occupied.
2. Ms. Baker’s qualification as a “spouse”
[39] Apart from the issues
which arise from Cpl. Millard’s retention of the Victoria residence which was a
principal focus of Chairperson Lynch’s recommendation and the Commissioner’s
decision, an issue which was also argued before me is: what effect does Cpl.
Millard’s marriage to Ms. Millard have on Ms. Baker’s potential status as
“spouse common-law”?
[40] HEAP compensation is only
available respecting a principal residence “to which there is a good and
marketable title and which is owned and occupied by the member and/or spouse”.
Clearly, Cpl. Millard at no time owned the Toronto residence, although he did
occupy it with Ms. Baker.
[41] Cpl. Millard’s only
ability to take advantage of the HEAP provision with respect to the Toronto
residence is through Ms. Baker’s ownership and occupancy. Indeed s.4.4.10(f)
allows this to occur if Ms. Baker qualifies as Mr. Millard’s “spouse”. Since
at the times in issue Cpl. Millard and Ms. Baker were not husband and wife,
and, therefore, Ms. Baker could not fit the definition of “spouse” in the
definition section of the relocation provisions, Ms. Baker would have to fit
the definition of “spouse, common-law” in order to qualify.
[42] Given that Cpl. Millard’s
divorce to Ms. Millard became final on September 17, 1993, well after Cpl.
Millard and Ms. Baker began to cohabit, the Respondent argues that Cpl. Millard
cannot have a “spouse” and at the same time be recognized as having a “spouse,
common-law”. Cpl. Millard argues that, with respect to the relocation rules
including the HEAP provisions, it is possible.
[43] The legal concept of
“common law marriages” is set out in the following passage of Dysart J. in Blanchett
v. Hansell [1944] 1 D.L.R. 21 at 25:
The express exclusion of a “common law wife” does not
affect Nellie Blanchett. A common law wife is a woman who is united to a man
by marriage which though informal is such as was recognized as valid by the
common law.
There is some confusion as to what formalities could be
dispensed with without invalidating the marriage. The English view as laid
down in Reg. v. Millis, 10 Cl. & Fin. 534, 8 E.R. 844, is
more rigid than the view generally held in most of the United States and in
Canada. But whatever else the requirements of a “common law marriage” anywhere
were, two essentials had to be present - (1) legal capacity to marry, and (2)
and agreement to marry: Bishop on Marriage Law, 6th ed., pp. 270 et seq.;
19 A. & E. Enc. Of Law, 2nd ed., p. 1193; 38 Corp. Jur., p. 1315. Neither
of these elements was present in this case. John Hansell, having a wife
living, lacked capacity to marry - a fact which was known to Nellie Blanchett
as well as to himself. There is no suggestion, nor reasonable probability, that
in the face of this known incapacity, these parties went through the empty form
of an agreement to marry. Nellie Blanchett is therefore not, on this ground at
any rate, excluded from eligibility to take as beneficiary.
[44] The Respondent’s argument
would benefit by the importation of the concept of common law marriage into
s.4.4.10(f). However, there is absolutely no indication in the rules that this
is the intention. Indeed, the contrary is true. The definition of “spouse,
common-law” stipulates that “if these conditions have been satisfied, a
common law spouse will be entitled to the same reimbursement as a spouse under
this directive.” The conditions referred to are only those set out in the
definition. Thus, none other, including freedom to marry, is a factor to be
considered.
[45] Therefore, I find that
Cpl. Millard’s marriage to Ms. Millard has no effect on Ms. Baker’s potential
status as a “spouse, common-law”.
E. Conclusion
[46] As I have already said,
the Chairperson’s recommendation reflects errors in the interpretation of the
rules, which taken together, constitute an error in law. Because of the
reliance placed on the Chairperson’s recommendations by the Commissioner, I
also find an error of law in his decision.
[47] Accordingly, the
Commissioner’s decision is set aside, and this matter is referred back to him
for determination in accordance with these reasons. I further direct that the
only issues which remain for determination are those unaddressed by Chairperson
Lynch in her recommendations being:
i) On what date should Ms. Baker be recognized as the
Grievor’s spouse for the purpose of the Relocation Directive?
ii) If the Grievor would normally qualify for
reimbursement under HEAP, do other general principles of the Relocation
Directive nevertheless prevent reimbursement in this particular type of case?
Judge
OTTAWA, ONTARIO
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