Date: 20000615
Docket: T-1227-99
BETWEEN:
BRIAN BENTLEY
Plaintiff
- and -
CANADA EMPLOYMENT INSURANCE COMMISSION
and THE ATTORNEY GENERAL OF CANADA
Defendant
REASONS FOR ORDER
DUBÉ J :
[1] This motion is for the preliminary determination of a question of law under Rule 220 of the Federal Court Rules from the interpretation of the former Unemployment Insurance Act1 ("the Act").
1. The Question of Law
[2] The question of law is as follows:
| "Is the defendant able to collect on the plaintiff's outstanding debt to the defendant arising from the over-payments and penalties described in the Agreed Statement of Fact, on or after January 27, 1999?" |
| If the answer to the above is in the affirmative, is the defendant entitled to make such further collections. |
| (i) By way of set-off, pursuant to section 155 of the Financial Administration Act? |
| (ii) By way of seizure and sale of the plaintiff's goods and chattels or placement of a lien on or sale of his real property? |
2. Agreed Statement of Facts
[3] The relevant facts essential to the determination of the above question are as follows. On January 27, 1993 the defendant ("the Commission") informed the plaintiff that a suspension of benefits had occurred, penalties in the total amount of $18,060.00 were assessed against him and overpayments in the amount of $37,598.00 were owed by him.
[4] Between 1993 and 1998, the amount of $11,946.00 was collected from the plaintiff and on October 19, 1998 the Commission sought payment for the remaining balance of $43,753.88. On December 15, 1998 the Commission filed a certificate of judgment in this Court certifying the debt to that amount, plus $41.00 for the recording fee, for a total amount of $43,753.88. At no time were these assessments, overpayments or penalties contested or appealed by the plaintiff pursuant to the provisions of the Act.
[5] On March 15, 1999 the plaintiff received a notice from the Commission that his income tax refund for the tax year 1998 in the amount of $1,756.33 had been applied against his debt to the Commission pursuant to section 155 of the Financial Administration Act2. Between 1993 and 1998, the amount of $11,946.00 was also collected from the plaintiff by way of voluntary payments made by him as well as by way of income tax set-off pursuant to that same section.
[6] On July 4, 1999 the plaintiff filed a statement of claim alleging that the Commission is precluded from further collecting any sums owing due to the six year limitation period prescribed under subsection 35(4) of the Act. The Commission contests this action and contends that the certificate registered in the Federal Court within the six year limitation period enables the Commission to continue collecting the plaintiff's outstanding debt after the limitation period. That contention is, in a nutshell, the issue to be resolved here.
3. Relevant Provisions of the Act
[7] It is common ground that the former Act and not the present Employment Insurance Act3 governs this matter. The transitional provisions of subsection 159(1) of the present Employment Insurance Act is to the effect that all matters relating to a claim during a benefit period beginning before the repeal of the former Act are to be dealt with under the former Act.
[8] Subsection 33(1) of the Act vests the Commission with the discretionary authority to impose a penalty where it believes that a false or misleading statement was made by the claimant. Subsection 33(4) provides that the Commission must impose this penalty no later than thirty-six months from the date of the false statement. Pursuant to section 43, the Commission also has the authority to reconsider a claim for benefits to determine if there has been an overpayment of money. Pursuant to subsection 43(6) of the Act, the Commission has seventy-two months within which to reconsider the claim where there has been a false or misleading statement. Subsection 43(5) provides that liability for an overpayment arises on the day that the Commission notifies the claimant. In this instance, the date is January 27, 1993.
[9] The relevant recovery procedures are outlined in sections 35 and 94 of the Act. They read as follows:
| |
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| 35. (1) Where a person has received benefit under this Act for a 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.
|
35. (1) Lorsqu'une personne 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 a touché des prestations auxquelles elle n'est pas admissible, elle est tenue de rembourser la somme versée par la Commission à cet égard.
|
| (2) All amounts payable under this section or section 33, 37 or 38 are debts due to Her Majesty and are recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by this Act.
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(2) Les sommes payables en vertu du présent article ou des articles 33, 37 ou 38 constituent des créances de Sa Majesté, dont le recouvrement peut être pursuivi à ce titre soit devant la Cour fédérale ou tout autre tribunal compétent, soit selon toute autre modalité prévue par la présente loi.
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| (4) No amount due as a debt to Her Majesty under this section may be recovered after seventy-two months from the date on which the liability arose.
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(4) Le recouvrement des créances visées au présent article se prescrit par soixante-douze mois à compter de la date où elles ont pris naissance.
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| (5) A limitation period established by subsection (4) does not run during any period when there is pending an appeal or other review of any decision establishing liability for the amount to be recovered.
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(5) Tout appel ou autre voie de recours formé contre la décision qui est à l'origine de la créance à recouvrer interrompt la prescription visée au paragraphe (4).
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| 94. (1) An amount payable under Part I that has not been paid or such part of an amount payable under that Part as has not been paid may be certified by the Commission
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94. (1) Une somme ou fraction de somme payable en vertu de la partie I et qui n'a pas été payée peut être certifiée par la Commission :
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| (a) forthwith, when in the opinion of the Commission the person liable to pay the amount is attempting to avoid payment; and |
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| a) immédiatement, lorsque la Commission est d'avis que la personne qui doit payer cette somme tente d'éluder le paiement de cotisations; |
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| (b) otherwise, on the expiration of thirty days after the default. |
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| b) sinon, trente jours francs après le défaut de paiement. |
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| (2) On production to the Federal Court, a certificate made under this section shall be registered in the Court and when registered has the same force and effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the Court for a debt of the amount specified in the certificate plus interest to the day of payment as provided for in this Act.
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(2) Un certificat établi en vertu du présent article est enregistré à la Cour fédérale sur production à celle-ci et il a dès lors la même force et le même effet et il permet d'intenter les mêmes procédures que s'il s'agissait d'un jugement obtenu devant ce tribunal pour une dette du montant y spécifié majoré des intérêts prévus par la présente loi jusqu'à la date du paiement.
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| (my emphasis)
|
(mon soulignement)
|
[10] Consequently, section 35 provides that a person who has received benefits to which he is not entitled is liable to repay the amounts which are debts due to Her Majesty and are recoverable in the Federal Court and in any other court of competent jurisdiction, or in any other manner provided by this Act. However, no amount due as a debt under this section may be recovered after seventy-two months from the date on which the liability arose (January 27, 1993 in this instance). In the case at bar there was no appeal or other review which would extend the seventy-two months period. However, section 94 provides for the filing of a certificate which has the same force and effect as a Federal Court Judgment and all proceedings may be taken thereon.
4. Analysis
[11] In my view, the words of subsection 35(4) are plain and unambiguous: no debt may be recovered after seventy-two months. Recovery is barred after seventy-two months. In the French version, "le recouvrement se prescrit par soixante-douze mois". It is obvious that recovery is statute-barred and prescribed after seventy-two months. The only exceptions to that statutory prescription is to be found under subsection 35(5) which provides for an extension of time where an appeal or other review is pending, but not where a certificate is filed.
[12] If Parliament intended for an extension of the recovery period by way of section 94, it would have said so. The Act constitutes a complete code establishing penalties, overpayments and the recovery thereof. The Commission has seventy-two months to recover the debt from the day of notification of the debt to the insured person. The seventy-two month prescription period englobes all methods of recovery including the section 94 certificate. Otherwise, subsection 35(4) is meaningless if it can be extended merely by filing a certificate. The complete code has been described as follows by the Federal Court of Appeal in Brière v. Canada (Employment and Immigration Commission)4 at p. 110:
| ...In the Unemployment Insurance Act, 1971, Parliament legislated fully on the right to recover unemployment insurance benefit overpayments and the prescription of resulting debts to the Crown, of which the Commission is an agent.5 The relevant provisions of the Act are a complete code in themselves, and when the Commission relies on them they govern the establishment and recovery of its debts, to the exclusion of the common law rules. |
[13] The Federal Court of Appeal, again with Lacombe J., speaking for the majority, in Canada (Attorney General) v. Laforest6, stated at p. 4 that the subsection 49(3) certificate must be exercised within the time limit specified by the Act:
| Finally, the system created by Parliament in ss 49 and 57 for the recovery of unemployment insurance benefits is an exceptional one, which is a departure from the ordinary law. As such, the sections in question must be strictly construed. They give the Commission exceptional powers, in which it is both judge and jury, to determine its debt itself and recover it not only in the courts but, if necessary, to carry out the recovery itself "in any other manner provided by this Act" (s. 49(2), such as by set-off (s. 49(3)), filing its certificate in the Federal Court, claims on a third party which are a form of garnishment, and so on (s. 112). These exceptional powers must be kept strictly within the limits and requirements specified by the Act, which includes the time limits for exercising them, and they cannot be extended by judicial interpretation or by seeking to determine the alleged intentions of the legislator. |
[14] The legal meaning of the words "recover" or "recovery" can be found in Black's Law Dictionary7:
| Recover. To get or to obtain again, to collect, to get renewed possession of; to win back. To regain, as lost property, territory, appetite, health, courage. In a narrower sense, to be successful in a suit, to collect or obtain amount, to have judgment, to obtain a favourable or final judgment, to obtain in any legal manner in contrast to voluntary payment. [Citations omitted.] |
| Recovery. In its most extensive sense, the restoration or vindication of a right existing in a person, by the formal judgment or decree of a competent court, at his instance and suit, or the obtaining, by such judgment, of some right or property which has been taken or withheld from him. [Citation omitted] This is also called a "true" recovery, to distinguish it from a "feigned" or "common" recovery. |
| The obtaining of a thing by the judgment of a court, as the result of an action brought for that purpose. The amount finally collected, or the amount of judgment. [Citation omitted] |
[15] In Yogis, Canadian Law Dictionary (1983) "recovery" is defined as follows:
| 1. An individual's repossession of something wrongfully taken or detained from him, to which he is otherwise entitled. |
| 2. The result of a judgment of the court that leads to the establishment of a right. The successful party in a suit to obtain a judgment recovers those things that the tribunal believes him to have been deprived of, although recovery does not necessarily mean restoration of the whole. |
[16] A section 94 certificate, being a mechanism for collection, must be available only within the limitation period and cannot continue thereafter. The Commission must collect and/or obtain judgment, and restoration through such judgment within the prescribed period. The purpose of the certificate and the judgment is to open the door for the Commission to reach for very efficient and drastic proceedings of recovery. It has seventy-two months to take those proceedings. After seventy-two months, the door is closed.
[17] It is not for the Court but for Parliament to decide whether or not the deadline of seventy-two months is too long or too short. The strict limitation period is a clear signal to the Commission that it must act within a reasonable delay.
[18] The same reasons apply to collection by way of set-off pursuant to section 155 of the Financial Administration Act or to collection by way of seizure and sale or placement of a lien on plaintiff's property. In my view, all these collection proceedings may only be taken within the limitation period of seventy-two months. It follows that, in answer to the question of law, the defendant is not able to collect on the plaintiff's outstanding debt arising from the overpayments and penalties under the Unemployment Insurance Act on or after January 27, 1999.
[19] Thus, the three prongs of the question of law are answered in the negative. The plaintiff is awarded his costs of this action.
OTTAWA, Ontario
June 15, 2000
Judge
__________________
1 R.S.C. 1985, c. U-1.
2 R.S.C. 1985, c. F-11.
3 S.C. 1996, c. 23.
4 [1989] 3 F.C. 88; 93 N.R. 115, 89 C.L.L.C. 14, 025; 25 F.T.R. 80; 57 D.L.R. (4th) 402 (F.C.A.); varying [1986] F.C.J. No. 558 (F.C.T.D., T-1481-85).
5 Employment and Immigration Reorganization Act, S.C. 1976-77, c. 54, s. 10.
6 [1988] F.C.J. No. 546; 62 D.L.R. (4th) 83 (F.C.A.).
7 5th Edition.
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