Date: 19980918
Docket: A-874-97
MONTRÉAL, QUEBEC, THIS 18th DAY OF SEPTEMBER 1998
CORAM: THE HONOURABLE MADAME JUSTICE DESJARDINS
THE HONOURABLE MR. JUSTICE DÉCARY
THE HONOURABLE MR. JUSTICE NOËL
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
AND:
MUGUETTE FILIATRAULT
Respondent
J U D G M E N T
The application for judicial review is allowed, the Umpire"s decision is set aside, and the matter is referred back to the Chief Umpire or to an umpire designated by him for redetermination on the basis that the board of referees does not have jurisdiction over writing-off.
Alice Desjardins
J.A.
Certified true translation
Peter Douglas
Date: 19980918
Docket: A-874-97
Coram: DESJARDINS J.A.
DÉCARY J.A.
NOËL J.A.
Between:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
MUGUETTE FILIATRAULT
Respondent
Hearings held at Montréal, Quebec on Tuesday, September 15, 1998
and Friday, September 18, 1998.
Judgment delivered at Montréal, Quebec on Friday, September 18, 1998.
REASONS FOR JUDGMENT OF THE COURT BY: DÉCARY J.A.
Date: 19980918
Docket: A-874-97
Coram: DESJARDINS J.A.
DÉCARY J.A.
NOËL J.A.
Between:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
MUGUETTE FILIATRAULT
Respondent
REASONS FOR JUDGMENT
(Delivered from the bench at Montréal
on Friday, September 18, 1998)
DÉCARY J.A.
[1] On March 3, 1995, after reconsidering the respondent claimant"s case, the Canada Employment and Immigration Commission (as it was then known) (the Commission) made a decision on the determination and allocation of earnings received by the respondent in respect of severance pay and pension. The decision resulted in an overpayment of $14,747. According to the Commission, the overpayment was calculated on March 14, 1995, and the respondent was notified of the amount in question the same day.
[2] On March 30, 1995, counsel for the respondent filed a notice of appeal from the decision. The same day, but in a separate letter, counsel also asked the Commission to write off the amount owing, pursuant to its powers under section 60 of the Unemployment Insurance Regulations (the Regulations). For those who are unfamiliar with it, the power to write off means the power to forgive a debt.
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[3] On April 25, 1995, the Commission filed its observations with the board of referees. It admitted that it had made an error and asked the board of referees to refer the case back to it. In its observations, the Commission added:[TRANSLATION] The Commission chose not to write off the overpayment in question because it is of the view that the claimant must have known that she had received sums of money from her former employer and that she had received benefit cheques at the same time as she was receiving that money. |
|
[Applicant"s record, p. 45]
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[4] On June 8, 1995, the board of referees allowed the appeal in respect of the allocation, in part and, furthermore, rescinded the Commission"s decision not to write off the amount of the overpayment, as follows:[TRANSLATION] In addition, the Members of the board of referees feel that section 69(2) of the Regulations should have allowed the Commission to write off the amount demanded from the appellant, since the mistake out of which the overpayment arose was made by the employer. When the appellant ceased work, the employer notified her that she did not have to report any of her retirement earnings or severance pay. This information was confirmed by the appellant"s union representatives, so at no time did she know the extent of her obligations toward the Commission, especially since she had never before received unemployment insurance. |
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[Applicant"s record, p. 49]
[5] The Commission appealed to an umpire with regard to both decisions of the board of referees. The decision on writing-off is the only issue in dispute before us.
[6] The Umpire dismissed the Commission"s appeal. In his view, the Commission"s decision on writing-off was subject to appeal to the board of referees under section 79 of the Unemployment Insurance Act , R.S.C., 1985, c. U-1, as amended (the Act), the board of referees had the power to intervene in the Commission"s exercise of discretion under section 60 of the Regulations, and the board of referees had acted properly by substituting its decision for the Commission"s. The Commission then turned to this Court by way of an application for judicial review.
[7] At this point, it is worth quoting the text of sections 44 and 79 of the Act and section 60 of the Regulations:
| Unemployment Insurance Act
Regulations
44. The Commission may, with the approval of the Governor in Council, make regulations
. . .
| (i) for the ratification of amounts paid to persons by way of benefit while they are not entitled thereto and for the writing-off of those amounts and any penalties under section 33 and amounts owing under sections 35, 37 and 38 and any costs recovered against those persons; |
. . .
Appeals
79. (1) The claimant or an employer of the claimant may at any time within thirty days after the day on which a decision of the Commission is communicated to him, or within such further time as the Commission may in any particular case for special reasons allow, appeal to the board of referees in the manner prescribed.
. . .
(2) A decision of a board of referees shall be recorded in writing and shall include a statement of the findings of the board on questions of fact material to the decision.
Unemployment Insurance Regulations
Write-off of Benefit Wrongly Paid
60. (1) A penalty owing under section 33 of the Act or an amount owing under section 35, 37 or 38 of the Act may be written off by the Commission if
| (a) the total of the penalties and amounts owing by the debtor does not exceed $5 and benefit period in respect of the debtor is not current; |
| (b) the debtor is deceased; |
| (c) the debtor is a discharged bankrupt; |
| (d) the debtor is an undischarged bankrupt in respect of whom the final dividend has been paid and the trustee has been discharged; |
| (e) the overpayment does not arise from an error made by the debtor or as a result of a false or misleading statement or representation made by the debtor, whether the debtor knew it to be false or misleading or not, but arises from a retroactive application of |
| (i) a decision, ruling or determination made under Part III of the Act, or |
| (ii) a decision made under Part I or Part IV of the Act in relation to benefits paid under section 25 of the Act; or |
| (f) the Commission considers that, having regard to all the circumstances, |
| (i) the penalty or amount is uncollectable, or |
| (ii) the repayment of the penalty or amount would result in undue hardship to the debtor. |
(2) That portion of an amount owing under section 35 of the Act in respect of benefits received more than 12 months before the Commission notifies the debtor of the overpayment may be written off by the Commission if
| (a) the overpayment does not arise from an error made by the debtor or from a false or misleading statement or representation made by the debtor, whether the debtor knew it to be false or misleading or not; and |
| (b) the overpayment arises as a result of |
|
|
| (i) a delay or error made by the Commission in processing a claim for benefit, |
| (ii) retroactive control procedures or a retroactive review initiated by the Commission, |
| (iii) an error made on the record of employment by the employer, |
| (iv) an incorrect calculation by the employer of the debtor's insurable earning or insurable weeks, or |
| (v) an error in insuring the employment or other activity of the debtor. |
|
Loi sur l'assurance-chômage
44. La Commission peut, avec l'approbation du gouverneur en conseil, prendre des règlements:
. . .
| i) pour la validation des sommes versées sous forme de prestations à des personnes n'y étant pas admissibles et pour la défalcation de ces sommes ainsi que de toute pénalité prévue par l'article 33 et de toute somme due en vertu des articles 35, 37 et 38 et de tous frais recouvrés sur ces personnes; |
. . .
Appels
79. (1) Le prestataire ou un employeur du prestataire peut, dans les trente jours de la date où il reçoit communication d'une décision de la Commission, ou dans le délai supplémentaire que la Commission peut accorder pour des raisons spéciales dans un cas particulier, interjeter appel de la manière prescrite devant le conseil arbitral.
. . .
(2) La décision d'un conseil arbitral doit être consignée. Elle comprend un exposé des conclusions du conseil sur les questions de fait essentielles.
|
| Règlements sur l'assurance-chômage
Défalcation de prestations indûment versées
60. (1) la Commission peut défalquer une pénalité payable prévue par l'article 33 de la Loi ou une somme due en vertu des articles 35, 37 ou 38 de la Loi si, selon le cas:
| a) le total des pénalités et des sommes dues par le débiteur ne dépasse pas 5$ et le débiteur n'est pas visé par une période de prestations en cours; |
| b) le débiteur est décédé; |
| c) le débiteur est un failli libéré; |
| d) le débiteur est un failli non libéré à l'égard duquel le dernier dividende a été payé et le syndic a été libéré; |
| e) le versement excédentaire ne résulte pas d'une erreur du débiteur ni d'une déclaration ou d'une représentation fausse ou trompeuse de la part du débiteur, que ce dernier ait su ou non que la déclaration ou la représentation était fausse ou trompeuse, mais découle: |
| (i) d'une décision ou d'un règlement à effet rétroactif rendu en vertu de la partie III de la Loi, |
| (ii) d'une décision à effet rétroactif rendue en vertu des parties I à IV de la Loi relativement à des prestations versées selon l'article 25 de la Loi; |
| f) la Commission estime, compte tenu des circonstances; |
| (i) soit que la pénalité ou la somme est irrécouvrable, |
| (ii) soit que le remboursement de la pénalité ou de la somme imposerait au débiteur un préjudice abusif. |
(2) La Commission peut défalquer la partie de toute somme due aux termes de l'article 35 de la Loi qui se rapporte à des prestations reçues plus de 12 mois avant qu'elle avise le débiteur du versement excédentaire, si les conditions suivantes sont réunies:
| a) le versement excédentaire ne résulte pas d'une erreur du débiteur ni d'une déclaration ou d'une représentation fausse ou trompeuse de la part du débiteur; que ce dernier ait su ou non que la déclaration était fausse ou trompeuse; |
| b) le versement excédentaire résulte de l'une des situations suivantes: |
| (i) un retard ou une erreur de la part de la Commission relativement au traitement d'une demande de prestations, |
| (ii) des mesures de contrôle à effet rétroactif ou un examen à effet rétroactif entrepris par la Commission, |
| (iii) une erreur dans le relevé d'emploi fourni par l'employeur, |
| (iv) le calcul erroné, par l'employeur, de la rémunération assurable du débiteur ou de ses semaines d'emploi assurable, |
| (v) le fait d'avoir assuré par erreur l'emploi ou une autre activité du débiteur. |
|
|
[8] The Commission argues, essentially, that the issue of writing-off was not before the board of referees; only the decision on the allocation of earnings had been appealed to the board of referees. Furthermore, the Commission argues, on the strength of this Court"s decision in Cornish-Hardy v. Board of Referees (Unemployment Insurance Act, 1971) , [1979] 2 F.C. 437 (F.C.A.), aff"d [1980] 1 S.C.R. 1218">[1980] 1 S.C.R. 1218, that a decision of the Commission on writing-off is not a decision in respect of which section 79 confers a right of appeal.
[9] On the first point, we are of the view that the issue of writing-off was before the board of referees. It is true that this issue is separate from the issue of whether an overpayment had occurred, and only arises once it has been determined whether there was an overpayment. However, the circumstances of this case are unusual. The claimant had asked the Commission to write off the overpayment. The Commission chose to inform the claimant that it had refused the write-off when it submitted its observations to the board of referees in the course of the appeal in respect of the existence of an overpayment. To our knowledge, there is no formal "decision" in the record on the request for a write-off that had been recorded in writing and communicated to the claimant. The Commission itself muddied the water by introducing its decision on writing off in the course of the appeal before the board of referees. For all practical purposes, then, this decision was before the board of referees at the Commission"s own request. It was also before the Umpire under the terms of the Commission"s own notice of appeal. It follows that the issue of writing-off was argued by the parties on the basis that it was before the board of referees and then the Umpire.
[10] The second point is more complicated, as it is a matter of interpreting a 1979 decision of this Court that was affirmed by the Supreme Court of Canada. The Umpire decided that this decision, for all practical purposes, had had its day and did not stand up to recent developments in the decisions of this Court with regard to the respective jurisdictions of the Commission and board of referees.
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[11] This is what Mr. Justice Martland, in the Supreme Court of Canada, and Chief Justice Jackett, in this Court, wrote: The submissions made on behalf of the appellant have failed to persuade us that the Federal Court of Appeal erred in law in dismissing her application to that Court. The appeal is dismissed. |
|
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[Cornish-Hardy, supra, para. 8 at p. 1218, Martland J.] |
|
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I have come to the conclusion that section 94 of the Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, does not confer a right of appeal on a person who unsuccessfully seeks a remission under Regulation 175, SOR/71-324, when that regulation is read as a whole with section 58(i) of the Act under which provision it was made. |
|
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Section 94 clearly confers a right of appeal on a "claimant"1 who is aggrieved by a decision of the Commission disposing of a claim for benefit (section 54(1)) or on a reconsideration of such a claim (section 57(1),(2)). It is not necessary to express any view whether section 94 confers on a "claimant" an appeal from any other decision of the Commission. It is sufficient to say that, in my view, section 58(i ) of the Act was not intended to authorize, and Regulation 175 does not provide for, a scheme under which claimants are entitled to have applications for remission considered and disposed of by decisions that are appealable under section 94. |
|
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I am of opinion that the section 28 application should be dismissed. |
|
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1 "Claimant" is defined by section 2 of the Act to mean "a person who applies or has applied for benefit under this Act". |
|
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[Cornish-Hardy, supra, para. 8 at pp. 437-38, Jackett C.J.] |
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[12] The Umpire, in our view, erred with respect to the extent of the changes that have occurred in the case law. It is true that administrative decisions that were not subject to judicial review in 1979 now are. And while the powers of the board of referees in exercising its appeal jurisdiction have been expanded, the increase in those powers cannot operate to increase the jurisdiction itself.
[13] What was said in Cornish-Hardy can still be said today. Writing-off, as section 60 of the Regulations says, refers to the "debtor". The right of appeal, as section 79 of the Act says, is conferred on the "claimant". Writing-off only comes into play when all the issues with respect to the establishment and payment of unemployment insurance benefits have been finally settled. A person who requests that a debt be forgiven does so not as a claimant, but as a debtor. The question to be asked now is whether or not the government, represented by the Commission, will forgive the amount it is owed. There is nothing more to be decided that requires the expertise of the board of referees, whose function is completed by the time the issue of writing-off comes up. That is precisely what was decided in Cornish-Hardy, supra , para. 8, and the reasons of Chief Justice Jackett are all the more topical than when he wrote them, since section 175 of the Regulations (which has since become section 60) used the term "claimant" instead of "debtor" (SOR/71-324). The text of section 60 was amended in 1990, when the word "claimant" was replaced by "debtor" (SOR/90-208), thus, in a way, confirming Chief Justice Jackett"s interpretation of ten years earlier.
[14] The Unemployment Insurance Act, as we have repeatedly said, is perhaps the most complex of federal laws. The Commission"s decisions on a claimant"s eligibility are appealed to the board of referees. The Minister of National Revenue"s decisions on a claimant"s insurability are appealed to the Tax Court of Canada (see Canada (Attorney General) v. D'Astoli (1997), 223 N.R. 368). And now, the Commission"s refusal to write off a debt is subject to judicial review by the Federal Court"Trial Division, in the same way, for example, as the Minister of National Revenue"s refusal to exercise his power under section 220(3.1) of the Income Tax Act to waive or cancel a penalty or interest. The standard of review is not necessarily the same, due to differences in the wording, but the analogy still pertains.
[15] The board of referees, therefore, did not have jurisdiction to decide whether the Commission was justified in refusing the write-off, and the Umpire erred by not overturning the decision of the board of referees in this respect. The debtor should have proceeded by applying for judicial review to the Federal Court"Trial Division, not by appealing to the board of referees.
[16] Since a debtor is entitled to challenge the Commission"s refusal to write off the amount owing by applying for judicial review, it goes without saying that the Commission is under an obligation to record its decision in writing and to communicate it to the person in question. The method used by the Commission in the case at bar"that is, informing the debtor of the decision in the written observations submitted to the board of referees in the course of an appeal relating to a completely different decision"seems inappropriate, to us.
[17] The application for judicial review will be allowed, the Umpire"s decision will be set aside, and the matter will be referred back to the Chief Umpire or to an umpire designated by him for redetermination on the basis that the board of referees does not have jurisdiction over writing-off.
Robert Décary
J.A.
Certified true translation
Peter Douglas
FEDERAL COURT OF CANADA
COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
FILE NUMBER: A-874-97
STYLE OF CAUSE: ATTORNEY GENERAL OF CANADA v. MUGUETTE
FILIATRAULT
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: September 15 and 18, 1998
REASONS FOR JUDGMENT OF THE COURT: (Desjardins, Décary, Noël JJ.A.)
DELIVERED FROM THE BENCH BY: Décary J.A.
APPEARANCES:
Carole Bureau FOR THE APPLICANT
William de Merchant FOR THE RESPONDENT
Claudine Barabé
Carmen Palardy
SOLICITORS OF RECORD:
Morris Rosenberg
Deputy Attorney General of Canada FOR THE APPLICANT
Ottawa, Ontario
Campeau, Ouellet, Nadon, Barabé
et associés
Montréal, Quebec FOR THE RESPONDENT
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