Date: 20000606
Docket: T-2986-92
MONTRÉAL, QUEBEC, JUNE 6, 2000
BEFORE: RICHARD MORNEAU, PROTHONOTARY
Between:
RÉJEAN PLANTE
Plaintiff
AND
HER MAJESTY THE QUEEN
and
THE EMPLOYMENT AND IMMIGRATION
COMMISSION OF CANADA
Defendants
JUDGMENT
This application by the plaintiff, both its conclusion for a declaration and its conclusions for damages, is dismissed with costs.
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Richard Morneau
Prothonotary
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Certified true translation
Suzanne M. Gauthier, LL.L. Trad. a.
Date: 20000606
Docket: T-2986-92
Between:
RÉJEAN PLANTE
Plaintiff
AND
HER MAJESTY THE QUEEN
and
THE EMPLOYMENT AND IMMIGRATION
COMMISSION OF CANADA
Defendants
REASONS FOR JUDGMENT
RICHARD MORNEAU, PROTHONOTARY
[1] This is an action for a declaratory judgment by which the plaintiff is asking this Court to declare illegal the seizure from third parties carried out by the Employment and Immigration Commission ("the Commission")[1] on the ground that the amount owed to Her Majesty was prescribed at the time of the seizure. As a corollary, the plaintiff is asking the Court to order that the money seized by the Commission be reimbursed.
[2] By his action the plaintiff is also seeking damages based on the harassment he allegedly suffered at the hands of Commission employees and exemplary damages based on an infringement of s. 11(d) of the Canadian Charter of Rights and Freedoms, as well as failure to comply with the presumption of innocence and the acquittal rendered on or about January 21, 1992 by Judge Cyrille Morand of the Court of Quebec, Criminal and Penal Division.
Background
[3] The facts set out below should be noted in order to understand the analysis that follows.
[4] On December 11, 1985 the plaintiff made an initial application for unemployment insurance benefits, as a result of which a benefit period was established for him as of December 15, 1985 and benefits were paid to him from that date.
[5] At the conclusion of an investigation which it initiated on September 30, 1986, and to which we shall have occasion to return, the Commission sent the plaintiff on January 21, 1988 a notice of refusal making the plaintiff ineligible for benefits as of January 12, 1986, on the ground that the plaintiff had not proved he was unemployed within the meaning of ss. 19 and 21 of the Unemployment Insurance Act, S.C. 1970-71-72, c. 48 ("the Act"), since the Commission considered that the plaintiff was operating the business "Service d'Entretien Ménager Multi Inc." for himself and was deemed to be working for a full week, within the meaning of s. 43(1) of the Unemployment Insurance Regulation. On or about the same date the plaintiff received a notice of an overpayment of unemployment insurance benefits in the amount of $11,328.
[6] The plaintiff's reimbursement obligation thus began on January 21, 1988.
[7] It should also be noted that it was at this time (specifically, January 12 and 13, 1988) that the Commission took the decision that a prosecution pursuant to s. 121(1)(a) of the Act should be initiated since it had been able to establish that the plaintiff knowingly made false or misleading statements within the meaning of s. 47(1) when he indicated on his report cards that he had not worked during the periods for which he was claiming benefits. However, the prosecution was not initiated as such until May 1991.
[8] On February 23, 1988 the plaintiff filed an appeal with the board of referees against the Commission's decisions regarding his unemployment and his availability. On March 25, 1988 the board of referees dismissed the plaintiff's appeal. On May 26, 1988 the plaintiff filed an appeal with the umpire. On January 16, 1991 the umpire dismissed the plaintiff's appeal.
[9] On or about May 14, 1991 the Commission filed a fourteen-count information against the plaintiff pursuant to s. 121 of the Act. On or about September 6, 1991 the plaintiff pleaded not guilty to the fourteen counts laid against him.
[10] On or about November 15, 1991 the Commission sent a notice of seizure pursuant to s. 112(4) of the Act. The Commission seized the plaintiff's salary as of December 11, 1991.
[11] On or about January 21, 1992 Judge Cyrille Morand of the Court of Quebec, Criminal and Penal Division, acquitted the plaintiff on the fourteen counts laid against him.
[12] In February 1992 the Commission granted a temporary release of the seizure from third parties. On or about June 19, 1992 the Commission informed the plaintiff that he still owed the amount of the overpayment. In July 1992 the Commission again made a seizure on the plaintiff's salary. A release of the demand to a third party was sent to the plaintiff's employer on November 12, 1993 as the amount of the overpayment had been completely recovered.
Analysis
[13] The relevant provisions of the Act must be set out here.
Sec. 47. (1) Where the Commission becomes aware of facts that in its opinion establish that a claimant or any person on his behalf has, in relation to a claim for benefit, made a statement or representation that he knew to be false or misleading, or, being required under this Act or the regulations to furnish information, furnished any information or made any representation that he knew to be false or misleading, the Commission may impose a penalty upon that claimant not greater than an amount equal to three times his weekly rate of benefit.
Sec. 49. (1) Where a person has received benefit under this Act or the former Act for any period in respect of which he is disqualified or any benefit to which he is not entitled, he is liable to repay an amount equal to the amount paid by the Commission in respect thereof.
(2) All amounts payable under this section or section 47, 51 or 52 are debts due to Her Majesty and are recoverable as such in the Federal Court of Canada or any other court of competent jurisdiction or in any other manner provided by this Act.
(3) Where a benefit becomes payable to any claimant, the amount of any indebtedness described in subsection (1) or (2) may, in the manner prescribed, be deducted and retained out of the benefit payable to him.
(4) No amount due as a debt to Her Majesty under this section may be recovered after thirty-six months from the date on which the liability arose unless in the opinion of the Commission an offence under subsection (1) of section 47 has been committed in connection therewith in which case no such amount may be recovered after seventy-two months from the date on which the liability arose.
Sec. 121. (1) Every person is guilty of an offence punishable on summary conviction who
(1) in relation to any claim for benefit, makes a statement or representation that he knows to be false or misleading . . .
[14] It appears to the Court that the first point at issue is whether the Commission was justified in considering that the plaintiff had committed the offence mentioned in s. 47(1) of the Act, thereby making the prescription deadline seventy-two months as provided in s. 49(4) of the Act.
[15] To resolve this fundamental point, it appears reference should made to this Court's judgment in René Charest v. The Queen (unreported decision of February 4, 1999, per Pinard J., case T-1182-93 - "Charest") where, at p. 8, para. 6, Court states the following:
In an action of this nature, the applicable burden of proof, the civil burden based on the preponderance of probabilities, shifts according to the evidence of the respective parties. Initially, the plaintiff claimant simply has to prove that the defendant Commission commenced its overpayment recovery proceedings more than 36 months after the date on which this account originated. If he succeeds, the Commission must then (1) prove that it commenced its overpayment proceedings on the account in question prior to the expiration of the 72nd month following the date on which the account originated, (2) that it so acted because it was of the opinion that the plaintiff claimant had committed an offence under subsection 33(1) of the Act and (3) that this opinion, in light of new evidence, is justified. In regard to such justification, proof of the existence of false or incorrect statements may alone suffice in some instances to shift the onus and oblige the plaintiff claimant to explain why he made these incorrect statements.1
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1 See Attorney General of Canada v. Katherine Gates (May 12, 1995), A-600-94 (F.C.A.)
[16] Here it is admitted that the recovery proceedings were commenced more than 36 months after the date on which the account originated and completed before the expiry of the 72nd month following that date. The debt in fact rose on January 21, 1988, the seizure dates from November 15, 1991 and the latter was completed on or about November 12, 1993.
[17] This leads us to stage (2) of the Charest test. To do this, we must ask whether the Commission properly considered the question of whether the claimant subjectively knew that the statements he was making, namely that he was not working, were false or misleading (see Moretto v. A.G. of Canada, unreported judgment of the Federal Court of Appeal, March 25, 1998, case A-667-96).
[18] To answer this question and to determine whether this review was proper, reference must be made to Canada v. Gates, [1995] 3 F.C. 17, at 21, in which the Federal Court of Appeal established that the entity responsible for assessing the facts must do more than simply state its conclusion about the claimant's credibility. That entity, here the Commission, must assess the evidence and draw its conclusions on the facts and the claimant's credibility.
[19] I consider that this is what the Commission did in 1988. The Crown called Richard Lévesque, who was employed by the Commission at the time and was responsible in September 1986 for conducting an investigation regarding the plaintiff's eligibility for
benefits. The latter had an interview with the claimant and subsequently took various steps to check what the claimant said. The entire investigation file was entered in evidence.
[20] After reviewing all of this investigation file and the explanations given at the hearing by Mr. Lévesque and one of his colleagues, Yves Landry, on the content of the investigation file at the time, I consider that Mr. Lévesque, and hence the Commission, properly assessed the evidence in the record and validly drew the following conclusions of fact and credibility, contained at pp. 5 and 6 of the investigation report:
[TRANSLATION]
The claimant's credibility is entirely contradicted by these new documents. The claimant's story is not very credible and hence [he] was busy for much more than 15 hours a week as he said.
The principal intent and concern was to promote the company, and the accounting entries prove this, if one looks at them. No document stating that he paid Mr. Herrault before June as Herrault Robert was unemployed and the investigation was done.
. . . . .
In conclusion, despite what he said the claimant formed a company and devoted the necessary time and energy to it in order to make it a success, and succeeded in doing so. It is thus clear that the claimant had no intention but to use the unemployment insurance benefits to finance the first weeks of operation of his business and to provide income. He made statements to us which he could not prove.
I recommend prosecution pursuant to s. 121(1)(a) of the Act.
(Emphasis in original)
[21] We may thus conclude that the Commission properly considered the question of whether the claimant subjectively knew that the statements he made, namely that he was not working, were false or misleading.
[22] As indicated in Charest, supra, the Court must now move on to the third stage of the procedure laid down in that case and determine whether this opinion of the Commission is still justified in light of what was established at the trial. As previously mentioned by Pinard J. in Charest:
In regard to such justification, proof of the existence of false or incorrect statements may alone suffice in some instance to shift the onus and oblige the plaintiff claimant to explain why he made these incorrect statements.
[23] Possibly realizing that this burden had been shifted in his case, the plaintiff testified at the hearing and explained the background to his statements (the falsity of which was objectively established as a consequence of the decisions of the board of referees and the umpire in the matter).
[24] Whether or not the burden of proof was shifted to the plaintiff, the latter hardly increased his credibility by his testimony, so that on a balance of probabilities the Commission at the hearing again justified its opinion that the plaintiff had knowingly made the false statements in question.
[25] Although I cannot conclude that the plaintiff's testimony should be given no credibility, I nevertheless accord it very little credibility since essentially it proved to be quite vague and full of contradictions with past statements.
[26] As examples of the contradictions, I note the fact that the number of hours worked for the business was 15 hours/month according to the plaintiff at the hearing, whereas in the past it was allegedly 15 hours/week or even nil. At the hearing the plaintiff indicated that he borrowed $5,000 from his father-in-law, while at his examination on discovery he denied this fact. In his testimony the plaintiff maintained that the seizure in the case at bar required him to seek and obtain a maintenance contract with the town of Boisbriand. On examination it could be seen that this contract covered a period prior to the date of the seizure. It is thus difficult to argue that the contract was partly caused by the seizure.
[27] At the same time, the testimony provided by the Commission at the hearing and the cross-examinations which followed did not detract from the Commission's opinion formed in 1988.
[28] I certainly cannot subscribe to the plaintiff's argument that the Commission arrived at false conclusions because the plaintiff had, in the investigator Lévesque's opinion, become hostile and the investigator took it upon himself [TRANSLATION] "to settle his hash". The documents entered in evidence in this regard simply show that the plaintiff was rude to the said investigator in the course of the investigation. Apart from the plaintiff's general statements and testimony that the investigator behaved arrogantly toward him, there is nothing in the evidence to show that the investigator had a vengeful approach. In his cross-examination, such a suggestion was not put to him. Further, in his examination and cross-examination none of his statements led me to think that he could have been prompted by such feelings. On the contrary, he said several times that in an investigation such as that undertaken, the claimant is still given an opportunity of justifying himself.
[29] An affirmative answer must accordingly be given to the question stated in paragraph 14 above, namely whether the Commission was justified in considering that the plaintiff had committed the offence mentioned in s. 47(1) of the Act, thus making the prescription deadline 72 months as provided in s. 49(4) of the Act.
[30] The second point at issue has two parts, and involves considering first the possible impact on the Commission of the fact that it did not initiate its criminal prosecution until May 1991. It will then be necessary to consider what effect should be given to the fact that the plaintiff obtained an acquittal in that prosecution.
[31] In my opinion, the plaintiff cannot derive any advantage from either of these two situations.
[32] As to the first situation, the plaintiff argued that, by initiating the prosecution under s. 121 of the Act, the defendants revived the recovery and reimbursement deadlines which were already prescribed.
[33] There is no basis for this argument in fact or in law. It was the Commission's validly formed opinion that the plaintiff had knowingly made false or misleading statements which caused the seventy-two-month prescription period to begin in January 1988. As to the fact that the prosecution was not actually commenced until May 1991, when it had been contemplated in January 1988, it was established in evidence that this delay was essentially due to the appeal proceedings brought by the plaintiff in the interval with reference to his unemployed status. Even if this delay might have an impact in criminal terms, it seems to the Court that so far as the civil and administrative side is concerned it was acceptable.
[34] As to the second situation, the plaintiff argued that because of the fact that he was acquitted on January 21, 1992 of the charges laid against him pursuant to s. 121, this acquittal should have had an effect on the Commission's opinion, namely, if I understand correctly, that in view of the acquittal the Commission should correct its conclusion that the plaintiff had knowingly made false statements.
[35] I do not share this point of view. First, it should be borne in mind that the Commission's opinion was formed in the time prior to the acquittal. Second, the acquittal did not occur at the conclusion of a debate on the merits, but at the very start of the hearing essentially because of the fact that the plaintiff had received no warning in the course of the administrative investigation, a prosecution delay had occurred in the matter and, finally, an original document was missing from the record. The hearing in the criminal proceeding was therefore extremely short. The Commission took time to assess this state of affairs and that is why it maintained its opinion despite the criminal acquittal, which in its view resulted from technical arguments. Finally, as was noted by the Court in Charest, supra, at p. 11, civil proceedings are not bound by criminal ones.
[36] Consequently, the Court certainly cannot conclude that the Commission made unlawful use of a seizure from third parties and it must accordingly repay to the plaintiff the money seized. The declaratory relief sought by the plaintiff will therefore be denied.
[37] However, it remains to assess the claim for damages and for exemplary damages made by the plaintiff in his statement of claim.
[38] In this connection, the plaintiff indicated:
[TRANSLATION]
ORDER the defendants to pay the plaintiff the sum of $5,000 as damages, in view of the harassment by the defendants . . .
ORDER the defendants to pay exemplary damages of $10,000 because of the flagrant infringement of s. 11(d) of the Canadian Charter of Rights and Freedoms and the defendants' disregard of the presumption of innocence and the acquittal rendered by Judge Cyrille Morand . . .
[39] The harassment for which the plaintiff is claiming compensatory damages occurred, the plaintiff said, in the following circumstances. He said that during the summer of 1991 a Commission employee called him repeatedly, constantly asking him how he intended to repay the overpayment. These calls caused him stress and led him to undergo a depression.
[40] The employee responsible for collecting the overpayment in the case at bar testified at the hearing with a register beside her of all the calls made or received in the plaintiff's case. It appeared from the testimony - which was not weakened in cross-examination - that the Commission only called the plaintiff once to make an arrangement for reimbursement of the overpayment and that on that occasion the plaintiff stated quite categorically that he did not intend to repay any of the overpayment: hence the subsequent seizure, which is a recovery procedure provided for by the Act.
[41] If other calls took place between the plaintiff and the Commission on reimbursement of the overpayment, it was the plaintiff himself who initiated those calls.
[42] In view of the preceding circumstances, the Court clearly cannot conclude that a single call by the Commission constitutes harassment which occasioned stress, even depression. The plaintiff could not validly introduce any medical report supporting such medical conditions. Further, it appeared from the plaintiff's testimony that if there was a depression, certain working relations problems at the hospital where he was working at the time could possibly have contributed to the situation.
[43] Consequently, the plaintiff's claim for compensatory damages must be dismissed.
[44] Exactly the same is true of his claim for exemplary damages.
[45] In this regard, for the reasons stated above, there is nothing in the evidence from which the Court can conclude that the defendants sought to defy or made light of the acquittal by Judge Cyrille Morand. The acquittal was rendered for very specific reasons - some might call them "technical". The criminal court did not hear any argument on the merits in which the plaintiff and other witnesses could have been heard, and at the conclusion of which the plaintiff might have been acquitted. In these circumstances, the fact that the Commission maintained its opinion may be seen from a different standpoint.
[46] As to the reference to s. 11(d) of the Charter, this argument may be dismissed simply by noting that the protections which that subsection contains apply to a "person charged with an offence" and at no time whatever in the civil proceeding could the plaintiff be regarded as a person charged with an offence.
[47] For all these reasons, this action by the plaintiff, both as to its conclusion for a declaration and its conclusions for damages will be dismissed, with costs.
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Richard Morneau
Prothonotary
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MONTRÉAL, QUEBEC
June 6, 2000
Certified true translation
Suzanne M. Gauthier, LL.L. Trad. a.
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Federal Court of Canada
Trial Division
Date: 20000606
Docket: T-2986-92
Between:
RÉJEAN PLANTE
Plaintiff
AND
HER MAJESTY THE QUEEN
and
THE EMPLOYMENT AND IMMIGRATION
COMMISSION OF CANADA
Defendants
REASONS FOR JUDGMENT
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FEDERAL COURT OF CANADA
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT No.: T-2986-92
STYLE OF CAUSE: RÉJEAN PLANTE
Plaintiff
AND
HER MAJESTY THE QUEEN
and
THE EMPLOYMENT AND IMMIGRATION
COMMISSION OF CANADA
Defendants
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: May 23 and 24, 2000
REASONS FOR JUDGMENT BY: RICHARD MORNEAU, PROTHONOTARY
DATE OF REASONS FOR JUDGMENT: June 6, 2000
APPEARANCES:
Claudine Barabé for the plaintiff
William de Merchant
Carole Bureau for the defendants
Paul Deschênes
SOLICITORS OF RECORD:
Campeau, Ouellet & Associés for the plaintiff
Montréal, Quebec
Morris Rosenberg for the defendants
Deputy Attorney General of Canada
[1] The Canada Employment and Immigration Commission is now designated the Canada Employment Insurance Commission pursuant to the Department of Human Resources Development Act, S.C. 1996, c. 11 (TR-96-70). See as to this s. 41(2) of the Act, which provides that the new Commission will replace the old as a party in any ongoing legal proceedings on the effective date.
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