Côté v. Canada (Human Resources Development), 2001 FCT 924

                                                                                                                                            Date: 20010820

                                                                                                                                         Docket: T-851-00

Neutral Citation: 2001 FCT 924

BETWEEN:

JEAN-YVES CÔTÉ

Applicant

- and -

HUMAN RESOURCES DEVELOPMENT CANADA

EMPLOYMENT INSURANCE COMMISSION and

CANADA-QUEBEC HUMAN RESOURCE CENTRE

Respondents

REASONS FOR ORDER

TREMBLAY-LAMER J.:

[1]         This is an application for judicial review of a decision dated April 13, 2000 rendered by the Employment Insurance Commission of Canada (the Commission), refusing to write off Mr. Jean-Yves Côté's overpayment of benefit pursuant to its discretionary power under section 56 of the Employment Insurance Regulations, SOR/96-332 (the Regulations).

[2]         On October 2, 1998, the applicant was laid off by his employer, Les entreprises industrielles Westburne Ltée. Following this layoff, he filed an application for unemployment benefit with the Commission on October 14, 1998. Three records of employment were issued by the applicant's employer for the same employment period. Each of these records indicated a different number of hours or insurable earnings, which resulted in the alteration of the benefit rate to which the applicant was entitled.

[3]         The ambiguity resulting from these three records of employment resulted in the issuance of a notice of claim of overpayment, dated July 18, 1999, in the amount of $3,042.00. On August 1, 1999, the applicant disputed the notice of claim of overpayment before the Board of Referees, which on February 2, 2000 decided to return the file to the Commission for it to establish the exact amount of the overpayment, taking into account earnings of $17,674.05. The Board of Referees also strongly recommended, in a unanimous decision, that the Commission write off the overpayment.

[4]         The Commission first examined the possibility of writing off the overpayment under subsection 56(2) of the Regulations and concluded that it could not be done under this clause since the overpayment pertained to benefits received less than 12 months before the applicant had been notified of the excess payment.

[5]         The Commission then examined the recommendation by the Board of Referees in terms of sub-paragraph 56(1)(f)(ii) of the Regulations and decided not to write off the overpayment of benefit since it found, following a review of the file, that the repayment of this sum would not result in undue hardship to the applicant.

[6]         The applicant submits that this decision constitutes an error in law and that it is patently unreasonable and arbitrary and clearly irrational.

[7]         The applicant submits, first, that the Commission misinterpreted subparagraph 56(1)(f)(ii) of the Regulations, which provides that the Commission may write off a sum that is owing if "the repayment of the penalty or amount would result in undue hardship to the debtor", in requiring that he establish that the repayment of the debt would result in more than undue hardship to him.

[8]         According to the applicant, the fact that Parliament chose to change the words "privation injustifiable" to the words "préjudice abusif" clearly indicates that it wanted to alleviate the implications of that subparagraph. He submits therefore that a debtor need not prove that he will be led to undergo serious privations in order to be able to benefit from the write-off of a sum that is owing.

[9]         The respondent, for its part, argues that the change by Parliament from the words "privation injustifiable" used in subparagraph 60(1)(f)(ii) of the Unemployment Insurance Regulations to the words "préjudice abusif" in subparagraph 56(2)(f)(ii) of the Regulations was intended only to reformulate the law and not to reform it. I share that opinion.

[10]       As mentioned by the respondent, paragraph 44(f) of the Interpretation Act provides:

[11]       I do not think the new language of subparagraph 56(1)(f)(ii) of the Regulations differs as to substance from the previous text of subparagraph 60(1)(f)(ii) of the Unemployment Insurance Regulations, in view of the fact that the words "undue hardship" used in the English version have remained the same since 1971. I conclude, therefore, that the Commission correctly interpreted subparagraph 56(1)(f)(ii) of the Regulations.

[12]       The applicant submits, secondly, that the Commission based its decision on an erroneous finding of fact that it made in a perverse and capricious manner and without regard for the material that had been filed in the record.

[13]       He claims that he clearly demonstrated that the repayment of the overpayment of benefit would cause him serious financial difficulties. He submits that he has suffered a significant decline in income in his new job, with significantly greater indebtedness owing to the resulting shortfall. He adds that he can barely cover his financial obligations, as his monthly net income does not even cover his total expenditures.

[14]       The respondent, for its part, argues that the Commission's discretionary decision to refuse to write off the amount owing by the applicant is based on relevant considerations pursuant to the Employment Insurance Act, S.C. 1996, c. 23 (Act), based on the evidence on the record, and that it is not arbitrary, vexatious or capricious.

[15]       Considering the exceptional nature of the write-off of overpayment of benefit, the respondent argues that the words "préjudice abusif" should be analyzed in light of the Commission's duty to manage the public monies of the employment insurance fund.

[16]       The respondent submits that the Commission held it would not exercise its discretion in favour of the applicant since the facts as a whole did not allow it to find that the applicant was unable to repay the overpayment of benefit, either in part payment or through a periodic payment, without imposing an undue hardship on him. More particularly, the Commission took the following facts into account:

(a) the applicant was working and had net monthly income of $1,475.18 per month;

(b) the applicant was a co-owner of his residence, which had a market value of $80,000.00 with a $10,000.00 mortgage, thus leaving an equity of $70,000.00;

(c) the applicant was repaying his other creditors;

(d) some monthly expenses were exaggerated and could be compressed;

(e) the expenses could be shared with his spouse who has employment income (the extent of which the applicant refused to disclose); and

(f) the overpayment lapsed in January 2006.

[17]       First, I would like to explain that in view of the exceptional nature of the write-off, the expert opinion on this matter of the collection officers, and the absence of any right of appeal from a decision refusing the write-off, I am of the opinion that the standard of judicial review is a very high one of patent unreasonableness.

[18]       In the case at bar, I am satisfied that the Commission exercised its discretionary power in a judicial way pursuant to the conditions set out in section 56 of the Regulations.

[19]       The evidence on the record does not support the applicant's contention that he is unable to repay the overpayment even in part without imposing an undue hardship on himself, especially since he can arrange some terms of repayment that reflect his financial capacity to pay.

[20]       In view of the evidence as a whole, I think the Commission was justified in concluding that it should not exercise its discretion in favour of the applicant and that this conclusion is not patently unreasonable.

[21]       The application for judicial review is dismissed.

                 "Danièle Tremblay-Lamer"

                                     J.

OTTAWA, ONTARIO

August 20, 2001.

Certified true translation

Suzanne M. Gauthier, LL.L., Trad. a.

FEDERAL COURT OF CANADA

TRIAL DIVISION

NAMES OF COUNSEL AND SOLICITORS OF RECORD

DOCKET NO:                                                    T-851-00         

STYLE:                                                    JEAN-YVES CÔTÉ v. HUMAN RESOURCES DEVELOPMENT CANADA ET AL.

PLACE OF HEARING:            QUÉBEC

DATE OF HEARING: AUGUST 16, 2001

REASONS FOR ORDER OF MADAM JUSTICE TREMBLAY-LAMER

DATED:                                                                                         AUGUST 20, 2001

APPEARANCES:

NATALIE BUSSIÈRE                                                                               FOR THE APPLICANT

SUZON LÉTOURNEAU                                                                          FOR THE RESPONDENT

SOLICITORS OF RECORD:

RIVEST, SCHMIDT                                                                                                FOR THE APPLICANT

Montréal, Quebec

MORRIS ROSENBERG                                                                           FOR THE RESPONDENT

Deputy Attorney General of Canada