A-708-95
CORAM: MARCEAU J.A.
DÉCARY J.A.
CHEVALIER D.J.
BETWEEN:
ATTORNEY GENERAL OF
CANADA,
Applicant,
-
and -
CHRISTINE
DUNHAM,
Respondent.
REASONS FOR
JUDGMENT
MARCEAU J.A.
There are certainly few
questions concerning the application of the Unemployment Insurance Act
that have given rise to as many decisions by the courts and commentaries by
legal authors, without completely resolving the debate, as the question raised
in the appeal before the Court today. Once again, the issue is the definition
of the respective roles assigned by the Act to the Employment and Immigration
Commission, the board of referees and the umpire in applying the few provisions
in which it assigns to the Commission, which is responsible for administering
the Act, certain powers that it enables it to exercise, in certain
circumstances, if the Commission deems appropriate. The issue, when stated
more precisely and concretely, concerns the conditions on which and the manner
in which the board of referees and the umpire may intervene in the Commission's
exercise of a power that Parliament has left to its discretion. There are not
many such powers, but they are of not inconsiderable effect. They are defined
in sections 24 (approval of job creation project), 25 (approval of work sharing
agreement) and 26 (approval of program of instruction), and in subsections
30(1) (period of disqualification for loss of employment without just cause),
33(1) (penalty for false statement by claimant), 33(2) (penalty for false
statement by employer), 41(10) (exemption from administrative requirement) and
79(1) (extension of time for appeal). This appeal involves the most prominent
of these powers, the one defined in subsection 33(1), and I shall quote the
text of the provision before summarizing the facts:
Where the Commission
becomes aware of facts that in its opinion establish that a claimant or any
person on the claimant's behalf has, in relation to a claim for benefit, made
statements or representations that the claimant knew to be false or misleading
or, being required under this Act or the regulations to furnish information,
furnished information or made statements or representations that the claimant
or person knew to be false or misleading, the Commission may impose on the
claimant a penalty in respect of each false or misleading statement,
representation or piece of information, but the penalty shall not be greater
than an amount equal to three times the claimant's weekly rate of benefit.
*
* *
The respondent was working as a receptionist
and taxi dispatcher when she lost her employment, on April 8, 1991. She made
an initial application for benefits which was approved. She started to receive
benefits a few days later, and continued to receive benefits, at the rate of
$245.00 per week, until the end of the period that had been established for
her. Long afterward, sometime in 1993, the Commission learned by chance,
during an investigation, that the respondent had in fact worked for various
employers for much of the period during which she had been paid benefits. The
discovery was significant: the respondent had never reported these various
jobs, and the earnings she received, in her weekly reports. When she was
questioned by an officer, the respondent could not provide any explanation and
simply said that she did not know what had happened. Obviously, the Commission
had to respond. It determined that the respondent had received $5,145 to which
she was not entitled, for 18 weekly claims supported by false statements.
Since in its opinion the claimant knew that these statements were false, it
claimed a penalty of $3,762.00 from the respondent, representing 18 times the
amount of her weekly benefits, in addition to repayment of the overpayment,
under the authority of subsection 33(1) of the Act, of course.
The board of referees heard an
appeal from the determination made by the Commission, and it was an easy matter
for the respondent's representative to persuade it that there were 17 false
statements rather than 18, which obviously meant that the penalty was reduced
by $245.00. However, the board declined to go any further and even refused to
hear the respondent's testimony. In fact, it was of the opinion that once the
deliberate false statements were found to have been made, the imposition of the
penalties and the determination of the amount of those penalties were a matter
for the Commission alone to decide; the board had no jurisdiction to intervene.
The umpire did not take the same
view of the matter at all, and he proceeded to state his views in a lengthy
decision. In his reasons, the umpire dealt first with the principles, and
disputed the position that the Commission may be seen as having sole jurisdiction
to decide the penalties that it may impose under subsection 33(1). Like any
discretionary power, the Commission's discretion must be exercised in good
faith and having regard to all the relevant factors, and without being
influenced by irrelevant factors, and it is the task of both the board of
referees and the umpire to intervene and give the decision that should have
been given if the Commission's decision was not the one that should have been
given. The umpire then addressed the facts of the case, and found that the
Commission's decision was not in fact the one that should have been given
because the quantum of the penalty seemed to have been determined on the basis
of guidelines that the authorities at the Commission had issued to the officers
responsible for administering the Act, the effect of which was to prevent the
officer in question in this instance from considering all the circumstances of
the case. He therefore set aside the decision of the board of referees in so
far as it affirmed the decision of the Commission in respect of the quantum of
the penalty, and set a figure of $850.00 for the penalty.
It is this decision that the
Attorney General is challenging in the application for judicial review, on the
ground that the umpire exceeded his jurisdiction and erred in law when he made
the decision.
*
* *
Thus, as I indicated in my
introductory remarks, the general question that arises directly and immediately
is whether the board of referees and the umpire had the power to intervene in
respect of a decision made by the Commission in the exercise of a discretion
such as the discretion granted by subsection 33(1) of the Act.
This question, associated as it
is with provisions that are applied on an everyday basis, could not have failed
to arise as soon as the Act came into force. In fact, I would reiterate, it
has been raised on very many occasions, but it has always resurfaced in some
form. The reason for its amazing powers of survival is undoubtedly the fact
that there were conclusions in some of the initial decisions that were unclear,
and there were ambiguous comments in some of the judges' reasons. However, in
some of its recent decisions, particularly the most recent important decision
to date, in Morin v. Attorney General of Canada, 134 D.L.R. (4th) 724
(April 1, 1996), the Court has got back on track and put an end to a number of
these uncertainties and ambiguities. Thus the scope of the question has become
significantly narrower today, circumscribed as it now is by firm principles. I
see no purpose in reviewing the history of the to-ing and fro-ing in the case
law, so often has it been done. What is important, to my mind, is to review
the points that I consider to be settled, based on which it will perhaps be
possible to determine what remains to be sorted out in order to completely
clarify the situation.
1. There has never
really been any doubt that the decisions made by the Commission in the exercise
of its discretionary powers were no longer sheltered from challenge before the
other two decision-making bodies created by the Act: the board of referees and
the umpire. The clear and unreserved terms of the Act make it impossible to
believe otherwise (sections 79, 80, 81). In principle, all decisions of the
Commission are subject to appeal, and all decisions of the board of referees
subject to review. Moreover, by expressly ruling out any right of appeal for
certain specific decisions of the Commission, those made under sections 24, 25
and 26 — undoubtedly because they are in the nature of pure policy — Parliament
left no room for any misgivings on this point.
2. Nor has there ever
really been any doubt that the way to challenge a decision of the Commission
before the board of referees was by way of an appeal resulting in a trial de
novo, while the role of the umpire is to review the decision of the board
of referees. Section 81 does give the umpire, among other possibilities, the
option of giving the decision that the board of referees should have given, but
his or her powers to intervene as defined in section 80 are strictly the powers
of a reviewing body. In another recent decision, Purcell v. Attorney
General of Canada, [1996] 1 F.C. 644, this Court took on the task of
clarifying the nature of these proceedings, and stressed the fact that an
appeal to the board of referees is in the nature of a trial de novo and
that such an appeal is important in terms of the spirit of the Act, as the
pivot on which the system for protecting claimants' rights under the Law turns.
3. There is no reason to
think that the Unemployment Insurance Act is unique and that the powers
it confers on the agency given the task of administering it must be analyzed in
isolation, without regard for the general principles of our legal system. The discretion
given to the Commission is no different from the discretionary powers given to
any other lower tribunal or body of the same sort. We are quite familiar with
the situations in which a tribunal hearing an appeal or review of a
discretionary decision of an authority subject to such review may intervene. A
discretionary decision made on the basis of irrelevant considerations, or
without regard for all of the relevant considerations, must be disapproved and
set aside by the appeal or review tribunal. The Court has repeatedly stated
that discretionary decisions of the Commission do not fall outside that rule.
The decision in Purcell,
to which I referred earlier, does not express the powers of the appeal tribunal
to intervene in the same way. The reason for this is that the case did not
involve the exercise of discretion, properly speaking, but rather the exercise
of the Commission's power to give effect to the "opinion" it may form
as to whether a situation exists. The issue was whether the condition
precedent for a penalty to be imposed under subsection 33(1), the provision in
question therein, was present, i.e. that the Commission be of the opinion that
the claimant knew that the statements were false. However, forming an opinion
is not the same as exercising a discretion. The question of extraneous or
relevant considerations cannot arise in that situation. As the Court said, the
condition precedent for intervention in these cases is simply a finding that
the Commission formed the opinion to which it gave effect based on an
incomplete view, or an inaccurate perception or interpretation, of the facts.
4. The decision in Morin put a definitive
end to the only real debate in the literature and case law since Attorney
General of Canada v. Frank Von Findenigg, [1984] 1 F.C. 65, on the specific
point of whether the power of the board of referees and the umpire to intervene
gave them jurisdiction to exercise the discretion granted to the Commission
themselves. In Morin, the Court took a definitive position. In terms
of the board of referees, it applied the general rule that an appeal tribunal
has the power to exercise the discretion itself that, in its judgment, the
lower tribunal exercised incorrectly. In terms of the umpire, it gave effect
to the provisions of section 81, which formally provides that the umpire may
give the decision that the board of referees should have given, making no
distinction based on the nature of the decision. It is therefore settled today
that the board of referees and the umpire have jurisdiction to exercise the
discretion that the Commission exercised in a judicially incorrect manner.
However, I would recall that in both cases, giving the decision that should
have been given is merely a parallel option to the option of referring
the matter back to the body that was initially empowered to decide it for a new
decision, and that, in my view, the choice to be made between the two options
requires serious thought. The decision should be made by the body that is best
able to make it. In my opinion, this is to some extent what Thurlow J.A. had
in mind in deciding Findenigg, the decision that triggered the whole
misunderstanding because it has been generalized: it must be recalled that the
issue in that case was the Commission's discretion under subsection 41(10) (now
51(10)), which allows it to exempt a claimant or group of claimants from purely
administrative requirements, requirements that are designed strictly for the
purposes of its own administration. I believe that it should have been
realized sooner that while it is only reasonable that we should want to leave
it up to the Commission to make final decisions in the case of the discretion
granted by subsection 41(10), this is certainly not the case for a decision
made under subsection 30(1) or 33(1) which has nothing to do with
administrative expertise, but is a punitive decision that depends on the
subjective responses of the body making the decision, even where there are
instructions deriving from a general policy.
These are the points that I
believe to be settled in terms of determining the respective roles of the three
levels of decision-making authorities that play a role in deciding individual
cases involving the application of the provisions of the Act that grant
discretionary powers. They cover most of the problems, but at least one
problem, which to my mind the particular facts of the instant case now present,
remains. That problem is the following, which I shall state in the form of a
very simple question.
One of the essential conditions
precedent in order that the board of referees may intervene and overturn a
discretionary decision of the Commission is, as we have just seen, that it
appear to the board of referees that the decision was made without regard for a
relevant consideration. Very well. But in making such a finding, is the board
restricted to looking at the facts that were before the Commission or may it
base its decision on the evidence heard by the board itself? The importance of
the question in terms of determining the true, full role of the board of
referees is immediately apparent. My answer is as follows. Given that the
Commission is exercising a purely administrative and not a quasi-judicial
power; given the nature of the proceedings before the board of referees, the
fact that it must hold a hearing de novo and the central role assigned
to its decision; given the limits on the options and methods of verification
open to the Commission's officers, in view of the number and diversity of
individual cases; and given the vulnerability and lack of information on the
part of the people involved in terms of knowing what facts may be relevant, I
have no hesitation in believing that we would not be betraying the intention of
Parliament if we said that the board of referees is not limited to the facts
that were before the Commission. In assessing the manner in which the
discretion was exercised, it may have regard to facts that come to its own
attention. It must find that a relevant consideration was ignored, in that it
is not for the board simply to substitute its discretion for that of the
Commission; it is essentially the Commission's discretion to which Parliament
refers. The board, however, may find such an essential consideration, which
the Commission ignored, in the material brought to its own attention. I do not
believe that this conclusion goes directly against the basic principles in
relation to the exercise of discretionary powers, and it seems to me that it is
much more in harmony with the spirit of the system, which does not assign the
board the role of merely checking what has been done by officers of the
Commission but makes it the central body for protecting the rights of insured
persons, which is necessary if the provisions of the Act are to be administered
soundly. It may be that the option given to the board, of undertaking a fresh
examination of the facts, will give rise to pointless appeals, but the case law
that may then be developed around this point under the supervision of the
umpire should put a rapid end to such appeals.
*
* *
I now come to the decision that
is before the Court. Having already explained my understanding of the
applicable principles, I may keep my comments brief.
I have no reservations about
some of the comments made by the umpire in respect of the jurisdictional
problems involved. He was obviously right to argue that the board of referees
and the umpire may intervene and set aside even a discretionary decision of the
Commission and give the decision that should have been given in the first
place. The decision in Morin confirmed all these principles. However,
I must say, with respect, that I do not agree that the umpire could have found
from the facts of the case that the necessary conditions that would enable him
to intervene and decide as he did were present. We have seen that what the
umpire relied on in finding that he had the power to intervene was the
existence of a Commission policy the effect of which was to prevent the officer
in charge of the case from considering all the circumstances. That policy was
not in issue before him; there was nothing from which it could be believed that
this policy was more restrictive than a number of others designed to guide and
not to compel, the purpose of which is to ensure a degree of consistency in the
decisions made by the multitude of officials who must deal with individual
cases on an everyday basis; these are internal policies that not only are
permitted, but are required for the purposes of the sound administration of
such a vast public agency. Nor is there anything to support a belief that the
policy suggested parameters that are inconsistent with those imposed by the Act
or Regulations. Lastly, and most importantly, there is nothing in the record
from which a single relevant circumstance could be identified that might have
been misapprehended or ignored.
In fact, however, my main
reservations about the decision are of a different nature. As may be seen,
those reservations are based on the final comments I made earlier in stating
the principles. It is the duty of the board of referees, I would suggest, to
intervene if it appears to the board, in the course of its hearing de novo,
that the discretionary decision of the Commission was made without regard for a
relevant consideration, regardless of whether the Commission failed to have
regard to it out of ignorance, and then to refer the matter back to the
Commission or to decide the case itself if it believes it is in a position to
do so properly. Clearly, in the instant case, the board of referees shirked
this duty by refusing even to hear the respondent's testimony. Of course, the
reason why the members of board of referees refused to do so was that they were
not aware of all the aspects of their role, and not that they disregarded the
rules of natural justice; however, the result is that they failed to completely
exercise their jurisdiction. It is on this basis that the decision of the
board of referees should have been disapproved by the umpire and the matter
referred back to the board so that it might exercise its jurisdiction fully,
for which purpose it will obviously have to hear the respondent.
I am therefore of the opinion
that the Court should allow the application by the Attorney General and dismiss
the parallel application by the respondent.[1]
It should set aside the decision a quo and refer the matter back to the
umpire for him to dispose of the appeal to him from the decision of the board
of referees by allowing it in part, on the ground that the board of referees
failed to fully exercise its jurisdiction, and by referring the matter back to
the board of referees for it to hear the respondent and decide the question of
whether the quantum of the penalty was determined by the Commission without
regard for a relevant consideration.
"Louis Marceau"
J.A.
"I concur.
Robert Décary J.A."
"I concur.
François Chevalier D.J."
Certified true translation
C. Delon, LL.L.
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