Date: 20121203
Docket:
T-739-11
Citation:
2012 FC 1406
Ottawa, Ontario,
December 3, 2012
PRESENT: The
Honourable Mr. Justice Barnes
BETWEEN:
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MYRNA LARMET
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Applicant
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and
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MINISTER OF HUMAN RESOURCES AND
SKILLS DEVELOPMENT
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Respondent
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REASONS FOR
JUDGMENT AND JUDGMENT
[1]
This
is an application for judicial review by Myrna Larmet challenging the majority
decision of an Old Age Security Review Tribunal (Tribunal) established under section
82 of the Canada Pension Plan, RSC 1985, c C-8. Ms. Larmet contends that
the Tribunal erred by refusing to award her Old Age Security (OAS) benefits that
would have been payable but for a mistake in her application concerning her
date of eligibility. I am told that the amount at issue is approximately
$5,000.00.
Background
[2]
The
material facts are not in dispute. Ms. Larmet applied for OAS benefits in
September 2007, well in advance of her eligibility date. She was mistaken about
when she would qualify. Instead of requesting benefits at the earliest
opportunity (i.e. age 65) she requested that payments commence in January 2009,
one year after her actual date of eligibility. This was an honest error based
on a belief that OAS was not payable before retirement.
[3]
Ms.
Larmet began to receive OAS benefits in early 2009. She did not appreciate her
mistake until she was advised by her accountant that she was entitled to OAS
upon reaching the age of 65 regardless of her employment status. Ms. Larmet and
her accountant asked the Minister to correct her application and to pay OAS
benefits back to her 65th birthday. The Minister refused. Ms. Larmet
appealed to the Tribunal and lost. It is from that decision that this
application is brought. Ms. Larmet argues that the Tribunal majority decision
was made in error and seeks to set it aside in favour of the dissenting
opinion.
The
Tribunal Decision
[4]
The
majority of the Tribunal held that the applicable legislation precluded a claim
to the retroactive recovery of OAS benefits. The Tribunal observed that it has
no inherent equitable jurisdiction and because there is no provision in the Old
Age Security Act, RSC 1985, c O-9 (OAS Act), or regulations that
expressly permits such a retroactive claim after benefits are paid, the
Tribunal dismissed the appeal. In
reaching this decision the Tribunal relied on subsection 5.1 of the OAS Act
and subsection 5(1) of the Old Age Security Regulations, CRC, c 1246 (OAS
Regulations).
Those provisions provide:
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Withdrawal
of application
5.1 (1) An
applicant may withdraw an application for a pension by giving a written
notice of their withdrawal to the Minister at any time before payment of the
pension commences.
Effect of
withdrawal
(2) If
an application for a pension is withdrawn under subsection (1), the withdrawn
application shall not after that time be used for the purpose of determining
the applicant’s eligibility for a pension.
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Retrait de la demande
5.1 (1) Le
demandeur peut retirer la demande de pension en avisant le ministre par écrit
avant le début du paiement de la pension.
Effet du retrait
(2) La demande de pension
ainsi retirée ne peut, par la suite, servir à déterminer l’admissibilité du
demandeur à une pension.
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Approval of an
Application for a Pension
5. (1) Subject to subsection (2), where the Minister
(a) is satisfied
that an applicant is qualified for a pension in accordance with sections 3 to
5 of the Act, and
(b) approves the
application after the last day of the month in which it was received,
the Minister’s approval shall be effective on the latest of
(c) the day on
which the application was received,
(d) the day on
which the applicant became qualified for a pension in accordance with
sections 3 to 5 of the Act, and
(e) the date
specified in writing by the applicant.
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Agrément d´une
demande de pension
5. (1) Sous réserve du paragraphe (2), lorsque le
ministre :
(a) est convaincu qu’un demandeur est admissible à une pension
selon les articles 3 à 5 de la Loi,
(b) agrée la
demande après le dernier jour du mois au cours duquel elle a été reçue,
l’agrément prend effet à celle des dates suivantes qui est
postérieure aux autres :
(c) la date
de réception de la demande,
(d) la date
à laquelle le demandeur est devenu admissible à une pension selon les
articles 3 à 5 de la Loi;
(e) la date
indiquée par écrit par le demandeur.
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The Tribunal’s analysis of these
provisions is set out in the following brief passage:
[27] The Tribunal finds that there was a window
of opportunity that existed between the application date of September 2007 and
December 2008 for the Appellant to change the start date of payments under OASA
subsection 5.1(1); however, the Appellant did not exercise this right. The
Appellant did not exercise this section of the legislation to adjust her start
date for pension receipt as she did not realize until after her pension
commenced that she could have received it earlier.
[5]
Considerably
more attention was paid by the Tribunal to Ms. Larmet’s failure to pay
appropriate attention to the OAS information sheet and the OAS application, or
to seek timely advice that could have alerted her to the problem.
[6]
The
dissenting opinion relied upon by Ms. Larmet contains the following analysis of
the applicable legislation:
[18] It is a basic rule of legal interpretation
that a purposive approach must be utilized when interpreting the legislation
involved. In addition, when there is any uncertainty, that uncertainty should
be resolved in a manner that is most beneficial to the applicant.
[19] Applying these principles, I am of the
view that subsection 5(1) of the regulations is ambiguous. It states that
the Minister’s approval should be effective on the latest date of either when
the application is received, the day on which the applicant qualifies, or the
date specified in writing by the applicant. It does not state that the date
specified in writing by the applicant on her application, and “application
form” is defined in the regulations.
[20] The simple fact of the matter is that in
the instant case, Ms. Larmet should have qualified in February 2008. She
made a good faith mistake, since she was employed, she thought that she would
not qualify until January 2009, and this was her initial request in the
application submitted in October 2007. She subsequently, in March 2009,
discovered her error, and wrote to the Respondent Minister requesting that her
eligibility date be changed to her actual eligibility date. This request was
made in writing, as were the subsequent requests specified in the letter from
Ms. Applebaum and in the statutory declaration.
[21] And while subsection 5.1(2) states that a
withdrawn application cannot be used for the purpose of determining the
applicant’s eligibility, and that an application can only be withdrawn prior to
benefits becoming payable, nowhere in the Act or the Regulations does it state
that the application shall be used to determine the applicant’s eligibility.
The warning set out in Field 10 of the application is not reflected or rooted
in the law.
[22] The fact remains that this is benevolent
legislation, it contemplates having a remedial component, as reflected in
section 32, and the Case File contains a notation dated November 2, 2009, from
the Minister indicating that the Appellant’s application should have been
rejected. I am of the view that if the law does not expressly preclude relief
being granted to Ms. Larmet, then that relief should be extended to her.
Accordingly, I must respectfully dissent from the reasons expressed by the
majority of the Tribunal.
CONCLUSION
[23] I would allow Ms. Larmet’s appeal and
order retroactive payments to February 2008.
Issues
[7]
What
is the appropriate standard of review?
[8]
Did
the Tribunal err in its analysis of the applicable legislation?
Analysis
[9]
While
this application turns on an issue of law it concerns the interpretation of the
Tribunal’s home statute and it must be reviewed on the deferential standard of
reasonableness: see Canadian Human Rights Commission and Mowat v Attorney
General of Canada, 2011 SCC 53 at paras 15-27, [2011] 3 S.C.R. 471 [Canadian
Human Rights Commission]. According to Dunsmuir v New Brunswick , 2008 SCC 9, [2008] 1 SCR
190, “reasonableness”
is:
…a deferential standard animated by the principle
that underlies the development of the two previous standards of reasonableness:
certain questions that come before administrative tribunals do not lend
themselves to one specific, particular result. Instead, they may give rise to a
number of possible, reasonable conclusions. Tribunals have a margin of
appreciation within the range of acceptable and rational solutions. A court
conducting a review for reasonableness inquires into the qualities that make a
decision reasonable, referring both to the process of articulating the reasons
and to outcomes. In judicial review, reasonableness is concerned mostly with
the existence of justification, transparency and intelligibility within the
decision-making process. But it is also concerned with whether the decision
falls within a range of possible, acceptable outcomes which are defensible in
respect of the facts and law. [para 47]
[10]
Although
there may be more than one reasonable legal interpretation open to a
decision-maker, it must still “engage in an interpretive process taking account
of the text, context and purpose of the provisions in issue”: see Canadian
Human Rights Commission, above, at para 64.
[11]
The
majority of the Tribunal interpreted subsection 5.1 of the OAS Act and subsection
5(1) of the OAS Regulations as precluding an applicant’s right to amend
an application to vary the commencement date of OAS benefits. The Tribunal
concluded that the only opportunity to amend an application in this way is to
withdraw the application and to resubmit. But this option is only available
where benefits have not yet been received. In this case Ms. Larmet was in
receipt of benefits when she learned of her mistake and, according to the
Tribunal, she did not then have the right to withdraw or amend her application.
The dissenting Member found that because these statutory provisions do not
expressly preclude a right to amend an application, a statutory ambiguity
arose. In the face of ambiguity a purposive and contextual analysis was
required, leading the dissenting Member to a different conclusion.
[12]
Ms.
Larmet contends that the Tribunal adopted an unduly narrow construction by holding
that subsection 5.1 of the OAS Act and subsection 5(1) of the OAS
Regulations preclude an amendment of the sort she had requested. She says
that she was not seeking to withdraw her application for benefits but only to
amend the date she had initially specified for the commencement of OAS
benefits. She likens her request to any other alteration of her OAS application
(eg. date of birth) which presumably would be permitted even after she was in
receipt of benefits. Like the dissenting Member, Ms. Larmet says that the
legislation does not expressly prohibit an applicant from correcting an error
concerning the “date specified in writing” in her OAS application. Therefore
her claim to relief did not call upon the Tribunal to ignore the “clear
language of Parliament” unlike the situation in Wegener v Attorney General
of Canada, 2011 FC 137 at para 8, [2001] FCJ no 188.
[13]
Ms.
Larmet also distinguishes her situation from that described in Canada v Elser, 2004 FC 1567, [2004] FCJ no1920, where a claim to more than
one year of retroactive OAS benefits was rejected. In that case Justice John
O’Keefe held that a time limited retroactive entitlement was clearly expressed
in the OAS Act and could not be expanded on equitable grounds.
[14]
There
is arguable merit to Ms. Larmet’s criticism of the Tribunal’s majority
decision. If one views the statutory provisions relied upon by the Tribunal in
the context of the full legislative text and in a purposive way the resulting
ambiguity is difficult to ignore. It would have been a simple task to draft a
provision that expressly excluded a claim to retroactive benefits in
circumstances like these. Instead, subsection 8(2) of the OAS Act allows
an applicant to claim up to one year of retroactive benefits where a late
application is made by mistake or otherwise. There is no apparent rationale for
treating Ms. Larmet’s claim to retroactive benefits differently from a late
application on the basis of a similar misunderstanding. Nowhere in the majority
decision is this apparent inconsistency addressed.
[15]
Although
the Tribunal paid considerable attention to Ms. Larmet’s failure to inform
herself, it is perhaps noteworthy that the OAS information sheet fails to
enlighten a reader inasmuch as it confirms an entitlement of up to eleven months
of retroactive benefits without any identified distinctions.
[16]
It
is also of some relevance that the legislative history pertaining to the
provisions relied upon by the Tribunal makes no connection to the payment of
retroactive benefits. Rather, the rationale for the right to withdraw an
application under section 5 of the OAS Act is related to a desire to
minimize the tax effects of OAS benefits arising from the receipt of unexpected
income. Apparently Parliament was concerned that individuals receiving OAS not
be pushed into a higher taxation bracket by virtue of the receipt of those
benefits. Presumably the same concern was the rationale behind subsection 9.1
of the OAS Act which allows a person to suspend the payment of benefits.
One might think that if these provisions were intended to bar retroactive
recovery in some situations, to the prejudice of an otherwise entitled
applicant, some reference to that purpose would have been made. Nowhere in the
majority decision is the legislative history mentioned.
[17]
The
Tribunal was correct that it enjoys no inherent authority to authorize a
benefit that an applicant is not entitled to receive. Notwithstanding this view,
the Tribunal seems to have been preoccupied with Ms. Larmet’s failure to inform
herself about her eligibility date. But if the Tribunal has no equitable
authority to provide a remedy in a situation of an obvious mistake, and if the
legislation does bar a claim to retroactive benefits, Ms. Larmet’s conduct was
irrelevant. The Tribunal’s apparent reliance on this irrelevant evidence
appears to have influenced its decision.
[18]
I
am not satisfied that the majority decision is reasonable having regard to the
Tribunal’s failure to consider the statutory interpretation issue it faced in a
contextual and purposive way. In the result the decision is set aside. Failing
a settlement between the parties the matter is to be re-determined on the
merits by a different panel.
[19]
Neither
party requested costs against the other and no costs are ordered.
JUDGMENT
THIS
COURT’S JUDGMENT is that this application is allowed with the
matter to be
re-determined on the merits by a
different panel.
"R.L.
Barnes"
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