Date:20010131
Docket:A-567-99
CORAM: STRAYER J.A.
ROTHSTEIN J.A.
MALONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
MARY RADIGAN
Respondent
Heard at Toronto, Ontario, Tuesday, January 30, 2001
Judgment Delivered at Toronto, Ontario
on Wednesday, January 31, 2001
| REASONS FOR JUDGMENT BY: STRAYER J.A. |
| CONCURRED IN BY: ROTHSTEIN J.A. |
MALONE J.A.
Date: 20010131
Docket: A-567-99
CORAM: STRAYER J.A.
ROTHSTEIN J.A.
MALONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
MARY RADIGAN
Respondent
REASONS FOR JUDGMENT
STRAYER J.A.
| _. The respondent's contract of employment with the Canadian Imperial Bank of Commerce (the "Bank") terminated on May 8, 1995. She subsequently sued the Bank for wrongful dismissal. A settlement of the action was confirmed by letter of her solicitor to the solicitors for the Bank dated July 14, 1997. It stated the total payment to the respondent to be $37,000.00 composed of the following amounts: |
| - mental distress damages $7,500.00 |
| - job search expenses $1,500.00 |
| - job training expenses $2,500.00 |
| _. In the meantime the respondent had applied for benefits on August 14, 1995, and after her paid sick leave and sickness benefits from the Bank were exhausted she received employment insurance benefits. On August 28, 1997 the Commission after making inquiries advised her in effect that it was treating not only the $11,900 of her settlement representing lost income as earnings from her employment, but also the $1,500 paid her for job search expenses and the $2,500 paid her as job training expenses. Thus it was allocating $15,900 of the settlement payment as earnings for the period October 29, 1995 to June 15, 1996. This resulted in an overpayment of benefits to her. |
| _. The respondent appealed this decision to a Board of Referees. The Board unfortunately , while reciting in a general way the submissions made to it, did not, as it was obliged to do by subsection 114(3) of the Employment Insurance Act, include "a statement of the findings of the board on questions of fact material to the decision". It simply found that the amount of $4,000 designated in the settlement for job search and training should not have been treated as earnings. While it is common ground that the respondent provided no evidence to the Board that this amount was actually spent for the purposes designated in the settlement, the Board obviously concluded from her oral statements to it that the money would be used for such purposes. |
| _. On appeal to the Umpire, the Commission relied heavily on a decision by Martin J. acting as Umpire in Renaud CUB-17899. In that case Martin J. stated that where there has been such a settlement "only such reasonable expenditures actually incurred in .... job searching and relocation can be .... removed from their characterization as earnings". (Emphasis added.) As there was no evidence - not even oral evidence by the claimant - in the present case that any expenses had actually been incurred for job searches or training, the Commission argued that the $4,000 had to be regarded as earnings in accordance with the statement of Martin J. in Renaud. |
| _. The Umpire distinguished this case from the circumstances in Renaud. He stated: |
| On the facts of this case, it is clear that the claimant did not have the funds to incur for job training and search until she had received settlement funds from the Bank. Moreover, I doubt whether the solicitors for the Bank, in settling the appellant's claim, would have offered to pay job search expenses and job training expenses unless they were satisfied by the appellant's solicitors that they were reasonable expenses which the appellant would eventually incur in her search for employment. |
He therefore confirmed the decision of the Board.
| _. On appeal before us, the Commission made arguments similar to those it presented to the Umpire. |
| _. In characterizing settlement amounts as earnings or non-earnings it is important to keep in mind the basic principles. One starts with paragraph 57(2)(a) of the Employment Insurance Regulations which provides that the earnings to be taken into account in determining whether there has been an interruption of earning includes: |
| (a) the entire income of a claimant arising out of any employment. |
| _. It has long been held by this Court that a settlement payment made in respect of an action for wrongful dismissal is "income arising out of .... employment"unless the claimant can demonstrate that due to "special circumstances" some portion of it should be regarded as compensation for some other expense or loss1. |
| _. While the principles enunciated in Renaud were "generally" endorsed by this Court in Dunn, we emphasized there that: |
| ...in each case it is a matter of fact for the Board to determine on the evidence before it as to the various components of the settlement.2 |
Consistently with this I believe that the statement of Martin J. in Renaud, that it is only such reasonable expenses "actually incurred" in e.g. job searching and relocation that can be removed from the category of earnings, is too rigid a formulation of what is the necessary finding of fact by the Board. That finding of fact must be that on the evidence it appears that the money allocated for job searches and training, as in this case, has been used for such purposes or that there is a genuine intention that it will be so used. One can imagine situations where at the time of a Commission ruling or Board appeal the money has for good reasons not yet been spent. One can also imagine situations where documentary evidence might not be available of expenses incurred or to be incurred. The Commission or a board should require that the claimant, on whom the onus rests, provide satisfactory evidence that amounts allocated for these purposes in a settlement have been so spent, or that there is a genuine intent to so spend them, but it is in my view too restrictive to insist, as does the Commission, that in every case there must be clear evidence that such costs have been "actually incurred".
| _. Unsatisfactory as is the formulation of the Board's decision, it did hear the evidence of the claimant and it had the benefit of the Commission's submissions on the law as to the need for it to find "special circumstances" warranting the exclusion of the $4,000 from allocated earnings. In the face of this evidence and representations it found that the $4,000 should be excluded from earnings. The Commission did not satisfy the Umpire, nor did it satisfy us, that the Board erred in fact or law in so finding. |
| _. The application for judicial review of the Umpire's decision should therefore be dismissed. In dismissing it, however, I would not wish it to be assumed that I endorse one of the observations of the Umpire as quoted above. He suggested that the sums totalling $4,000 must be "reasonable" allocations for job searches and training because the Board's solicitors agreed to that allocation in the settlement. While that may well be correct in this case, I do not think that the fact that an ex-employer has agreed to allocating a generous portion of the settlement to non-earnings items should be conclusive or even persuasive. To take that approach is to encourage the parties to a settlement to collaborate in reducing the amount to be allocated to loss of earnings and thus to shift more of the burden of a wrongful dismissal onto the employment insurance fund. |
| _. The application should be dismissed with costs. |
"B. L. Strayer"
J.A.
"I agree
Marshall Rothstein"
"I agree
B. Malone"
FEDERAL COURT OF CANADA
Names of Counsel and Solicitors of Record
| STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA |
Applicant
- and -
MARY RADIGAN
Respondent
DATE OF HEARING: TUESDAY, JANUARY 30, 2001
PLACE OF HEARING: TORONTO, ONTARIO
| REASONS FOR JUDGMENT BY: STRAYER J.A. |
| DATED: WEDNESDAY, JANUARY 31, 2001 |
APPEARANCES: Derek Edwards
Ed Canning
| SOLICITORS OF RECORD: Morris Rosenberg |
| Deputy Attorney General of Canada |
Barristers & Solicitors
Commerce Place
One King Street West
P.O. Box 907
Hamilton, Ontario
L8N 3P6
FEDERAL COURT OF APPEAL
Date: 20010131
Docket: A-567-99
BETWEEN:
| ATTORNEY GENERAL OF CANADA |
Applicant
- and -
MARY RADIGAN
Respondent
__________________
1A.G.C. v. Walford [1979] 1 F.C. 760.
2A.G.C. v. Dunn A-231-95, January 19, 1996.
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