Date: 20120911
Docket: A-340-11
Citation: 2012 FCA 230
CORAM: SHARLOW
J.A.
PELLETIER J.A.
MAINVILLE
J.A.
BETWEEN:
LINDA BARTLETT
Appellant
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
MAINVILLE J.A.
[1]
This
concerns an appeal from a judgment of the Federal Court dated July 26, 2011,
cited as 2011 FC 934, which dismissed the appellant’s judicial review
application challenging the decision made on July 21, 2010 on behalf of the
Minister of Human Resources and Skills Development with responsibility for
Service Canada (the “Minister”), denying the appellant’s request for an award
of interest or similar compensation on the disability pension benefits provided
to her retroactively pursuant to subsection 66(4) of the Canada Pension Plan,
R.S.C. 1985, c. C-8 (the “CPP”). The Minister held that she lacked the
statutory authority to grant the request.
[2]
For
the reasons set out below, I would allow the appeal and return the matter to
the Minister for a new determination. The Minister has the authority under
subsection 66(4) of the CPP to take the remedial action she considers
appropriate to place the appellant in the position she would have been in under
the CPP but for an administrative error in the administration of that
act. This includes the authority to award interest payments under that
subsection.
The history of the litigation
The eligibility proceedings
[3]
The
appellant first applied for disability benefits under the CPP in
December 1977. She was notified on May 29, 1978 that she did not have
sufficient earnings to meet the minimum qualifying period for such benefits.
The appellant needed to make valid contributions in at least five of the ten
years included in the period between 1969 and 1978. An administrative review of
her earnings and contributions revealed that she only made valid contributions
in 1970, 1975, 1976 and 1977.
[4]
In
October of 2001, for reasons which are not disclosed in the record, the
appellant applied a second time for disability benefits under the CPP.
This was again refused on the ground of her ineligibility for benefits
resulting from insufficient earnings and contributions in the appropriate
periods. She then appealed to the Review Tribunal pursuant to section 82 of the
CPP, which dismissed the appeal on December 27, 2002 on the ground that
she had not made valid contributions under the CPP for a sufficient
number of years. The Review Tribunal, however, noted that “[h]ad there been $65
more in contributions for 1973, Mrs. Bartlett would have met the requisite
levels of contribution required to have had valid contributions for that year”.
It also noted that “[i]t may very well be that Mrs. Bartlett had made
sufficient contributions, but there will need to be some documentary evidence
of this. This may require having to have her income tax return amended once
additional evidence in support of her claim is obtained by her”: Appeal Book at
pp. 51-52.
[5]
As
a result of the Review Tribunal’s decision, the appellant took two parallel
actions. First, she appealed to the Pension Appeals Board; and second, she
provided the Minister with additional information confirming that she
had sufficient valid CPP contributions for 1973. In view of this
information, the Minister conceded that sufficient valid contributions had
indeed been made. As such, a minimum qualifying period had been established for
the appellant. Consequently, upon a review of the medical evidence, the Pension
Appeals Board, in its decision dated June 22, 2004, was satisfied that the
appeal should be allowed and that the appellant be granted a disability pension
in accordance with the terms of the CPP.
The retroactivity
proceedings
[6]
However,
this was not the end of the matter. Although, pursuant to the decision of the
Pension Appeals Board, the Minister approved the appellant’s disability
benefits on August 27, 2004, she did so retroactively to November 2000. This,
in the Minister’s view, was the maximum retroactive payment which could be made
to the appellant: Affidavit of Leah Young sworn September 28, 2010 at para. 12,
reproduced at p. 4 of the Appeal Book.
[7]
Though
the respondent has not identified in its memorandum the statutory basis for
this retroactive benefit payment limit, it can be surmised that it results from
the combined application of paragraph 42(2)(b) of the CPP
defining disability, and section 69 setting out a waiting period for payments
of disability pensions. Paragraph 42(2)(b) provides that “in no case
shall a person…be deemed to have become disabled earlier than fifteen months
before the time of the making of any application in respect of which the
determination is made”, while section 69 provides that “where payment of a
disability pension is approved, the pension is payable for each month
commencing with the fourth month following the month in which the applicant
became disabled”. Consequently, it appears that the Minister determined that
she was bound to limit the retroactive payments to November 2000, since the
appellant’s application for these benefits had been made in October, 2001.
[8]
The
appellant was dissatisfied with this decision since she was expecting
retroactive payments of her disability benefits to 1977, when her disability
first began. In the appellant’s view, the denial of her disability benefits
resulted from an administrative error for which she should not be penalized.
She therefore sought reconsideration of the decision.
[9]
The
reconsideration was denied on November 2, 2004, on the ground that “[i]t is the
onus and responsibility of our clients to provide us with missing information
or documentation and it was not until August 2003, that you advised our office
of missing T4’s for the year 1973”: Appeal Book at p. 63.
[10]
Undeterred,
in October 2005, the appellant sought a review of her file by the Minister
under subsection 66(4) of the CPP. This subsection reads as follows:
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66. (4) Where the Minister is satisfied that, as a result of
erroneous advice or administrative error in the administration of this Act,
any person has been denied
(a) a benefit, or portion thereof,
to which that person would have been entitled under this Act,
(b) a division of unadjusted
pensionable earnings under section 55 or 55.1, or
(c) an assignment of a retirement
pension under section 65.1,
the Minister shall take such remedial action as
the Minister considers appropriate to place the person in the position that
the person would be in under this Act had the erroneous advice not been given
or the administrative error not been made.
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66. (4) Dans le cas où le ministre est convaincu qu’un avis
erroné ou une erreur administrative survenus dans le cadre de l’application
de la présente loi a eu pour résultat que soit refusé à cette personne, selon
le cas :
a) en tout ou
en partie, une prestation à laquelle elle aurait eu droit en vertu de la
présente loi,
b) le partage
des gains non ajustés ouvrant droit à pension en application de l’article 55
ou 55.1,
c) la cession
d’une pension de retraite conformément à l’article 65.1,
le ministre prend les mesures correctives qu’il
estime indiquées pour placer la personne en question dans la situation où
cette dernière se retrouverait sous l’autorité de la présente loi s’il n’y
avait pas eu avis erroné ou erreur administrative.
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[11]
On
January 19, 2006, the Minister denied the appellant’s review under subsection
66(4) on the ground that no administrative error had occurred in the treatment
of the appellant’s file, concluding instead that the onus rested solely on the
appellant to provide evidence of her 1973 earnings. The appellant was also
notified that this denial could not be appealed, but that she could, within 30
days, seek judicial review under section 18.1 of the Federal Courts Act,
R.S.C. 1985, c. F-7.
[12]
The
appellant consequently applied for judicial review before the Federal Court.
Pinard J. granted the application on January 30, 2007 for reasons cited as 2007
FC 89. He found that, in 1978, the appellant had asked the Department concerned
to verify her 1973 contributions with Revenue Canada. Instead, the Department
concerned made a request for confirmation for the year 1972. As noted by Pinard
J. at paragraph 23 of his reasons, “[m]aking a request for the wrong year is an
administrative error.” He further found, at paragraph 24 of his reasons, that
the appellant’s T4 statement of remuneration paid for 1973 had been “in the
system” all these years, but it was not until August 2003 that a proper search
was carried out by officials in order to locate it. Having made a finding of
administrative error within the meaning of subsection 66(4) of the CPP,
Pinard J. sent the matter back to the Minister for reconsideration.
[13]
On
August 28, 2007, after reconsidering the matter in view of the judgment of the
Federal Court, the Minister, acting under subsection 66(4) of the CPP,
recognized the appellant’s entitlement to CPP disability benefits
retroactively to 1978, and issued her payments for the retroactive benefits.
The indexation or
interest proceedings
[14]
The
documentation provided to the appellant by the Minister was far from clear as
to the manner in which the retroactive amounts had been calculated. It became
subsequently apparent that the Minister had provided the amounts which would
have been paid to the appellant in each one of the concerned years from 1978
onward, without any adjustment for the loss of purchasing power of these
amounts resulting from their late payment. Thus, the retroactive payments for
1978 and subsequent years were determined as the amounts which would have been
paid to the appellant in each concerned year, irrespective of the fact that
these amounts, when paid in 2007, had substantially less purchasing power than
had they been initially paid out in a timely fashion.
[15]
The
appellant sought explanations as to the mode of calculation of the retroactive
payments, first telephoning an agent on September 5, 2007 to seek information.
On September 11, 2007, a Payment Service Agent sent her a letter providing
general explanations as to the manner in which the payments had been
calculated. This letter did not, however, address the specific concern of the
appellant relating to the loss of purchasing power of the benefits as a result
of their late payment.
[16]
The
appellant thus wrote to officials at her Regional Office on October 8, 2007,
seeking a new review of her file. The appellant sought an adjustment to the
retroactive payments in order to take into account the loss of purchasing power
resulting from the inflation that occured between the time the benefits should
have been paid to her under the CPP and their late payment in 2007.
[17]
Some
fifteen months later, on February 2, 2009, a Service Canada agent wrote the
appellant to inform her that “in calculating the amount of this payment, your
earnings were adjusted upward to reflect increases in average wages and your
calculated benefit has been escalated each year since 1977 by the Consumer
Price Index to reflect the increases in the cost of living”, adding that “there
is no statutory provision in the CPP to pay interest on CPP payments”: Appeal
Book at p. 92. However, the appellant submits that she did not receive this
letter since it was sent to her old address.
[18]
The
Service Canada agent also wrote to the appellant on October 29, 2009, and again
on February 26, 2010, denying any adjustments to the retroactive CPP disability
benefits provided to her. However, the appellant also submits that she did not
receive these letters since they were also sent to her old address.
[19]
In
April 2010, the appellant asked her Member of Parliament to intervene on her
behalf. This intervention resulted in a letter from Mr. Steven Risseeuw, Acting
Director General Payments and Processing, CPP/OAS, reiterating that the amounts
provided to the appellant had been correctly calculated. The appellant
acknowledges receiving this letter on June 4, 2010: Affidavit of Linda Bartlett
sworn August 31, 2010 at paras. 8 and 10, reproduced at pp. 147-148 of the
Appeal Book.
[20]
On
June 14, 2010, the appellant sent a written request directly to the Minister,
seeking consideration by the Minister of remedial action under subsection 66(4)
of the CPP in the form of interest on the retroactive payments. Mr.
Risseeuw responded to this request on July 21, 2010, in a letter which read as
follows (Appeal Book at pp. 158-159):
On behalf of the Honourable Diane Finley, Minister
of Human Resources and Skills Development with responsibility for Service
Canada. I am writing in response to your letter of June 14, 2010, in which you
requested payment of retroactive cost-of-living increases and interest on your
Canada Pension Plan (CPP) Disability benefit.
As I wrote to you in May 2010, the calculation of
the retroactive payment of your Disability benefit was correct and a payment of
$51,300.22 that you were paid in 2007 already included the cost-of-living
increases from 1978 to 2007. A copy of that letter is enclosed for your
information. Please also find enclosed letters that were sent to you from a
Service Canada Centre in Victoria, which further explains the calculation of
the retroactive payment of your Disability benefit.
With respect to your request for interest on the
retroactive payment of your disability benefit, I must advise you that this is
not possible. Unlike the Income Tax Act, which provides for the charging
of interest on overdue taxes and which pays interest on refunds, the CPP
legislation does not contain such provisions. Our policy is not to charge
interest on overpaid benefits and, in the same way, interest is not paid on
benefits owing.
If you wish to pursue this matter further, you must
apply for judicial review in the Federal Court of Canada. You may write to the
local office in Vancouver at the following mailing address: Federal Court of
Canada, Pacific Centre, PO Box 10065, 701 West Georgia Street, Vancouver, British Columbia, V7Y 1B6. You may also contact that office by calling 1-604-666-3232.
I hope that the above information has clarified the
Department’s position in this matter.
[21]
As
invited to do so by Mr. Risseeuw, the appellant applied on August 19, 2010 for
judicial review before the Federal Court.
The reasons of the Federal Court
judge
[22]
The
Federal Court judge identified three issues: (a) whether the July 21, 2010
letter from Mr. Risseeuw was a “decision” subject to review before the Federal
Court; (b) whether the application was out of time; and (c) whether the
Minister had the authority to award interest pursuant to subsection 66(4) of
the CPP.
[23]
As
to the first issue, the Federal Court judge ruled that the July 21, 2010 letter
was not a new decision and did not constitute a new exercise by the Minister of
the power granted to her under subsection 66(4) of the CPP, but rather a
“courtesy letter”, one in a long series of letters explaining why no additional
payments could be made to the appellant: Reasons at paras. 49 to 52.
[24]
As
a logical consequence of his qualification of the July 21, 2010 letter as a
“courtesy letter”, the Federal Court judge also concluded on the second issue
that the application for judicial review was not brought within the 30 days
provided for in subsection 18(2) of the Federal Courts Act: Reasons at
para. 55. He rather found that the prior February 2, 2009 letter had addressed
the issue of interest payments (Reasons at para. 58), and that consequently,
“[a]t this point [February 2, 2009] the Minister’s position regarding the
quantum of the benefits, the cost-of-living indexing and the payment of
interest had been fully confirmed and set out, yet the application was not
commenced until approximately a year and a half later”: Reasons at para. 59.
[25]
Since
the appellant had not sought an extension of time within which to bring her
application for judicial review, the Federal Court judge thus concluded that
the application had to be dismissed as being out of time.
[26]
The
Federal Court judge nevertheless decided to address the third issue he had
identified, which pertained to the merits of the application, in case he had
erred on the preliminary issues: Reasons at paras. 61, 64 and 65.
[27]
Relying
on the comments of Gauthier J. (as she then was) in Jones v. Canada
(Attorney General), 2010 FC 740, 373 F.T.R. 142 suggesting that this
Court’s prior decisions calling for interest payments under subsection 66(4) of
the CPP were obiter (which decisions are further discussed
below), the Federal Court judge ruled that the Minister’s power under that
subsection was limited to taking appropriate measures in order to place a
person in the position he or she would be “under the Act”. Hence, in the
Federal Court judge’s view, the Minister had no authority to grant any relief
through interest awards, since the CPP itself does not expressly so
provide: Reasons at paras. 66 and 69.
[28]
The
Federal Court judge found support for his conclusion in the Ontario Court of
Appeal decision of Gorecki v. Canada (Attorney General) (2006), 265
D.L.R. (4th) 206, 208 O.A.C. 368, and in the decision of this Court in King
v. Canada (Minister of Human Resources and Social Development), 2009 FCA
105, [2010] 2 F.C.R. 294 (“King”): Reasons at paras. 68, 70 and 71.
The Issues in Appeal
[29]
This
appeal raises two principal issues:
i.
Did
the Federal Court judge err in ruling that the judicial review application was
late?
ii.
In
the affirmative, did the Federal Court judge err in ruling that the Minister
had no remedial authority to award interest to the appellant under subsection
66(4) of the CPP?
Did
the Federal Court judge err in ruling that the judicial review application was late?
[30]
Determining
whether a judicial review application is timely raises both factual and legal
questions. Consequently, the decision of the Federal Court judge on this issue
is to be reviewed in appeal on a standard of palpable and overriding error,
unless an extricable question of law can be identified, in which case that question
of law is to be reviewed on a standard of correctness: Housen v. Nikolaisen,
2002 SCC 33, [2002] 2 S.C.R. 235.
[31]
Though
the Federal Court judge treated the issue of whether the application was late
as a separate issue from the qualification of the July 21, 2010 letter as a
“courtesy letter”, both issues are inextricably intertwined. It was not
disputed that the applicant applied for judicial review within 30 days of the
receipt of that letter. Consequently, if the July 21, 2010 letter signed on
behalf of the Minister by Mr. Risseeuw was a “decision”, the appellant’s
judicial review application was timely.
[32]
The
respondent’s position in this appeal, and before the Federal Court, is that the
30-day period set out in subsection 18(2) of the Federal Courts Act to
initiate a judicial review challenging the decision of the Minister not to
award interest on the retroactive payments runs from August 28, 2007, the date
of the letter sent to the appellant informing her of the amount which would be
paid to her as retroactive benefits. In the respondent’s view, “[t]he
[a]ppellant was provided with all the details regarding the amount of
retroactive benefits she would be paid in the Minister’s letter of August 28,
2007. If she disagreed with those calculations, her recourse was to apply for
judicial review of that decision within thirty days”: Respondent’s memorandum
at para. 49. I disagree.
[33]
In
many instances, determining the starting point of the 30-day period is easy,
such as where the judicial review application concerns a decision of an
adjudicative tribunal which provides dated reasons. In other circumstances,
determining that starting point is more difficult, particularly where, such as
in this case, the “decision” in issue is made by a civil servant acting for the
Minister under a complex and multi-layered administrative decision-making
process.
[34]
In
this case, on August 28, 2007, the appellant received the decision of the
Minister resulting from the judgment of Pinard J. concerning the retroactive
payments of her disability benefits. That decision provided for the payments,
but did not provide for compensation for the delay in payments. However, it was
not apparent from the August 28, 2007 letter what exactly had been included in,
or excluded from, the retroactive payments. The payments explanation statement
attached to that letter simply set out monthly benefit amounts without any
calculation details, nor was it apparent from this schedule whether
compensation for the long delay in receiving the benefits had been included or
not. Moreover, this letter specifically instructed the recipient as follows:
“[i]f you have any questions about this letter, you can contact us at the
address provided below or by calling our toll free number…” (Appeal Book at p.
85). In such circumstances, it was reasonable for the appellant to follow these
instructions and to contact, as she did, the Regional Office of Human Resources
and Social Development Canada in order to obtain clarifications, rather than
initiating a judicial review application.
[35]
The
response she received from a Payment Service Agent on September 11, 2007 set
out general explanations in administrative technical language. In any event,
that explanation did not address the principal concern of the appellant
relating to the loss of purchasing power of her disability benefits as a result
of their late payment. It was therefore reasonable for the appellant to seek,
as she did on October 8, 2007, a new administrative review of her file so that
her specific concern could be addressed.
[36]
A
Service Canada agent sent a response some 15 months later, dated February 2,
2009, informing the appellant that the calculation of the retroactive benefits
was correct, and adding that the CPP did not provide for interest
payments. Since that letter addressed the issue of interest payments, the
Federal Court judge was of the view that the 30-day period for initiating a
judicial review application concerning this issue ran from that date.
[37]
However,
in so finding, the Federal Court judge did not consider the appellant’s
argument that the February 2, 2009 letter and subsequent letters had been
mailed to her old address and, as a result, she did not receive these letters.
[38]
At
the hearing before the Federal Court, the appellant denied receipt of the February
2, 2009 letter and of the subsequent letters: “The letters he’s [counsel for
the respondent] referring to that supposedly I was supposed to have gotten, I
never got. The first I knew of these letters was in – some in the respondent’s
record, and some were sent to me by Diane Finley’s office”: Transcript of the
proceedings held on March 10, 2011, p. 59, lines 1 to 6. The appellant further
explained at the hearing that (a) these letters were sent to the wrong address
and (b) that her affidavit was consistent with her position that these letters
had not been received by her: Transcript of the proceedings held on March 10,
2011, pp. 59 to 61. Though the appellant – who represented herself – submitted
a poorly drafted affidavit, the gist thereof is that she did not receive an
answer to her request dated October 8, 2007 for a review of her file until May
26, 2010, and that answer (reproduced at pp. 96 and 97 of the Appeal Book) did
not address the issue of interest payments: Affidavit of Linda Bartlett, sworn August
31, 2010 at paras. 4 to 9, and letter of February 26, 2010, reproduced at pp.
96, 97 and 147 of the Appeal Book.
[39]
The
Federal Court judge did not explain why he ignored the appellant’s evidence and
arguments concerning the late receipt of the letter. In my view, if the
February 2, 2009 letter was to be held as the starting point for the appellant
to initiate judicial review proceedings, it was then incumbent on the
respondent to show that the letter was indeed received by the appellant, i.e.
that the Minister’s agent effectively communicated the decision to the
appellant: Atlantic Coast Scallop Fishermen’s Assn. v. Canada (Minister of
Fisheries and Oceans) (1995), 189 N.R. 220 (Fed. C.A.). It was not the
burden of the appellant to disprove receipt of the alleged decision; the burden
was rather on the respondent to establish that it was effectively communicated
to the appellant.
[40]
In
normal circumstances, the respondent may discharge this burden by showing that
the letter was mailed to the appellant at the address to which prior
correspondence had been delivered. When a government official sends a letter to
the address to which prior correspondence has been successfully delivered, it
seems logical to assume that the appellant received it. If, however, the
appellant denies receiving it, then the whole of the circumstances should be
examined to determine whether the allegation of non-receipt is credible. If it
is, then that is the end of the matter as far as that letter is concerned. In
this case, it is not apparent from the judgment that this examination was
carried out by the Federal Court judge.
[41]
There
are serious discrepancies in the evidence submitted which raise legitimate
questions as to whether the appellant did, in fact, receive the February 2,
2009 letter and the subsequent letters sent to her old address. First, on
September 8, 2009, the appellant wrote again to the regional office seeking a
response to her request for interest, making no reference therein to the
February 2, 2009 letter, and adding that her “letter dated October 8 of 2007
has not been answered”: Appeal Book at p. 93. Second, in this September 8, 2009
letter, the appellant also set out her new address of correspondence, yet
subsequent letters from Service Canada continued to be sent to her old address:
Appeal Record at pp. 93, 94 and 96. Third, the gist of the appellant’s
affidavit is that she did not receive an answer to her request for interest
payments under subsection 66(4) of the CPP until July 21, 2010: Appeal
Book at pp. 147-148.
[42]
Though
I have formed the opinion, based on the evidence in the record, that the
appellant did not receive the February 2, 2009 letter, I need not rely solely
on this in order to find that the application for judicial review was timely.
Indeed, even if this letter had been delivered to the appellant, in light of
the special and particular circumstances of this case, the Minister
nevertheless issued a decision subject to judicial review on July 21, 2010.
[43]
In
this case, the intervention of the appellant’s MP on her behalf resulted in a
letter (received by the appellant on June 4, 2010) from Mr. Risseeuw
reiterating the correctness of the calculation of the retroactive benefits, but
not specifically addressing the issue of compensation for the late payment or
the issue of interest payments. It was not unreasonable in these circumstances
for the appellant to seek, as she did on June 14, 2010, a specific decision
from the Minister concerning the award of interest under subsection 66(4) of
the CPP.
[44]
This,
moreover, is also how Mr. Risseeuw, writing on behalf of the Minister, appears
to have understood the request of the appellant. In his July 21, 2010 response
to the appellant’s June 14, 2010 request to the Minister,
i.
Mr
Risseeuw first addressed the issue of the calculation of the retroactive
payment of benefits referred to in his prior correspondence, which he again
viewed as “already includ[ing] the cost-of-living increases from 1978 to 2007”.
This, it is useful to note, concerned the cost-of-living adjustment to benefits
provided under the CPP, and not any adjustment to compensate the
appellant for the loss in the purchasing power of the benefits resulting from
their late payment;
ii.
he
then addressed the interest claim as a separate issue, specifically denying
that claim on the ground that the CPP does not provide for interest in
such circumstances;
iii.
he
finally invited the appellant to initiate a judicial review application should
she wish to pursue the matter further.
[45]
In
light of the points addressed therein, the July 21, 2010 letter is a fresh
exercise of the Minister’s discretion addressing directly the claim for
interest payments made by the appellant. This letter specifically denied the
interest payment request and further invited the appellant to initiate judicial
review proceedings if she wished to pursue the matter further. The appellant
responded by initiating such an application within 30 days. Consequently, the
judicial review application challenging this decision was timely.
Did
the Federal Court judge err in ruling that the Minister had no remedial
authority to award interest to the appellant under subsection 66(4) of the CPP?
[46]
Though
initially taking the position that this issue of statutory interpretation
should be reviewed on a standard of reasonableness, the respondent rightly
conceded at the hearing of this appeal that a standard of correctness applied.
Indeed, the interpretation of a statute by a minister responsible for its
implementation is to be reviewed on a standard of correctness unless Parliament
has provided otherwise: Canada (Fisheries and Oceans) v. David Suzuki
Foundation, 2012 FCA 40, 427 N.R. 110, at paras. 65 to 105; Sheldon
Inwentash and Lynn Factor Charitable Foundation v. Canada, 2012 FCA 136,
2012 D.T.C. 5090 at para. 23.
The issue has already
been decided by this Court
[47]
In
Scheuneman v. Canada (Human Resources Development), 2005 FCA 254, 337
N.R. 307 at paras. 48 to 50 (“Scheuneman”), this Court decided that the
authority to award interest is included in the power conferred by subsection
66(4) of the CPP. In reaching this conclusion, the Court in Scheuneman
relied on the decision of Décary J.A. writing for the Court in Whitton v.
Canada (Attorney General), 2002 FCA 46, [2002] 4 F.C. 126 (“Whitton”).
The remedial authorities at issue in Whitton were those set out in
section 32 of the Old Age Security Act, R.S.C. 1985, c. O-9, which are
the same as those found in subsection 66(4) of the CPP, and read as
follows:
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32. Where the
Minister is satisfied that, as a result of erroneous advice or administrative
error in the administration of this Act, any person has been denied a
benefit, or a portion of a benefit, to which that person would have been
entitled under this Act, the Minister shall take such remedial action as the
Minister considers appropriate to place the person in the position that the
person would be in under this Act had the erroneous advice not been given or
the administrative error not been made.
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32. S’il est
convaincu qu’une personne s’est vu refuser tout ou partie d’une prestation à
laquelle elle avait droit par suite d’un avis erroné ou d’une erreur
administrative survenus dans le cadre de la présente loi, le ministre prend
les mesures qu’il juge de nature à replacer l’intéressé dans la situation où
il serait s’il n’y avait pas eu faute de l’administration.
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[48]
Décary J.A.
ruled that section
32 of the Old Age Security Act required the Minister to “reinstate the
pension forthwith and repay the benefits that were suspended, with interest”:
Whitton at para. 37, emphasis added.
[49]
Contrary
to what the respondent submits, the principle set out in Whitton, and
confirmed in Scheuneman, was not questioned by this Court in King.
What was at issue in King was whether a claimant was entitled to assert
a claim to a ministerial remedy under subsection 66(4) of the CPP because
he succeeded in obtaining a decision of the Pension Appeals Board reversing the
initial refusal by the Minister. The Court held that a successful appeal to the
Pension Appeals Board is not, by itself, evidence that the initial denial of
benefits was the result of “erroneous advice” under the meaning of subsection
66(4): King at para. 28.
[50]
The
Court in King also noted that the notion of “erroneous advice” found in
subsection 66(4) of the CPP is of limited scope and only “refers to
advice given by the Department of Human Resources and Skills Development to a
member of the public, and not to any advice which, on occasion, may be given to
the Minister by her officials in the course of deciding whether a pension
should be awarded”: King at para. 31.
[51]
What
must be kept foremost in mind when reviewing subsection 66(4), is that the
remedial powers of the Minister under that provision rest on a different
statutory foundation from those which may result in a reconsideration or appeal
under Division F of Part II of the CPP.
[52]
Subsection
66(4) was first introduced into the CPP in 1986 by An Act to amend
the Canada Pension Plan and the Federal Court Act, 1985, c. 30 (2nd
Supp.). At that time, the provisions of the CPP relating to reconsiderations
and appeals were already in force. Consequently, the legislative intent behind
subsection 66(4) was to provide the Minister with special authorities beyond
those available under a reconsideration or appeal so as to remedy denials of
benefits resulting from erroneous advice or administrative errors in situations
where such errors could not otherwise be adequately remedied under the other
provisions of the CPP.
[53]
The
case at hand is a good example of the distinction between redress through
reconsiderations and appeals and redress through subsection 66(4). Here, the
appellant did receive a favourable decision from the Pension Appeals Board on
June 22, 2004. However, in light of the maximum 15-month retroactivity rule
under paragraph 42(2)(b) of the CPP, combined with the 4-month
waiting period set out under section 69, the appellant, pursuant to that
decision, could not receive retroactive payments beyond November 2000 in
relation to her disability application of October 2001. Indeed,
in light of paragraph 42(2)(b) and section 69, the Pension Appeals Board
has found that it lacks jurisdiction to extend disability benefits beyond the
periods set out in these provisions, even in circumstances where a prior
application may have been wrongly rejected by the Minister: see notably Minister
of Social Development v. Kendall (June 7, 2004) CP 21960; and Whitter v.
Minister of Social Development (May 15, 2006) CP 23649.
[54]
In
this case, faced with this situation where an adequate remedy could not be
provided through the reconsideration and appeal process, the appellant sought,
and eventually obtained, additional retroactive payments back to 1978 through
the operation of subsection 66(4) of the CPP.
[55]
With
respect to potential interest on retroactive payments, we can ask what is the
legal mechanism that would allow for such payments? Indeed, it is worth
answering this question as a distinction exists in the CPP such that
persons obtaining retroactivity redress through reconsiderations and appeals
are not in the same position as those whose available retroactivity redress is
under subsection 66(4). Interest payments cannot be awarded as a remedy on
reconsideration or appeal, because there is no provision for them under the
current legislative scheme. However, in cases such as here, where a person has
been denied a disability pension for some 30-years as a result of a civil
servant’s administrative error, Parliament intended to empower the Minister
under subsection 66(4) to take all appropriate remedial measures required to correct
that error, including, in this case, providing both retroactive payments
related to the period prior to November 2000 and related interest on
those payments.
[56]
What
is important to note is that subsection 66(4) was not adopted in order to
provide interest payments on awards resulting from reconsiderations and
appeals, nor is it a substitute for these administrative processes. That being
said however, subsection 66(4) does nevertheless provide for potential interest
payments in appropriate circumstances where, such as in this case,
reconsideration or appeal cannot otherwise adequately remedy the error.
[57]
I
need not speculate here on the other circumstances which could trigger
subsection 66(4) of the CPP. These are to be reviewed by the Minister on
a case by case basis, taking into account the intent of that legislative
provision. However, once an administrative error has emerged and has been
acknowledged by the Minister under subsection 66(4), the extensive remedial
power of the Minister under that subsection applies, and it includes the
authority, in appropriate circumstances, to compensate the aggrieved person for
the late payment of the benefits which may be awarded under this subsection.
[58]
In this case, it is not disputed that an
administrative error contemplated by subsection 66(4) occurred, and that the
retroactive payments resulting from the Pension Appeals Board decision were
inadequate to fully compensate the appellant for the loss of her disability
benefits. Hence, the Minister could take appropriate measures under subsection
66(4) in order to place the appellant in the position that she would have been
under the CPP had the administrative error not occurred. This
necessarily required the Minister to consider, as she did, whether, in the
particular circumstances, it was appropriate to provide the appellant with
additional retroactive payments. However, it also required the Minister to
consider whether, in the circumstances at hand, it was also appropriate to
compensate the appellant for the late payment of these benefits.
Textual, contextual
and purposive analysis of the meaning of subsection 66(4) of the CPP
[59]
Moreover,
apart from the past jurisprudence of this Court, I would have come to the same
conclusion by interpreting subsection 66(4) of the CPP according to the
modern approach to statutory interpretation, which calls for a textual,
contextual and purposive analysis to find a meaning that is harmonious with the
legislation as a whole: Canada Trustco Mortgage Co. v. Canada, 2005 SCC
54, [2005] 2 S.C.R. 601 at para. 10; see also Rizzo & Rizzo Shoes Ltd.
(Re), [1998] 1 S.C.R. 27 at para. 21, and Bell ExpressVu Limited
Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559 at para. 27. In
addition, pursuant to section 12 of the Interpretation Act, R.S.C. 1985,
c. I-21, subsection 66(4) of the CPP must be deemed remedial and must be
given such fair, large and liberal construction and interpretation as best
ensures the attainment of its objects.
[60]
It
is common knowledge that the value of money decreases with the passage of time:
Bank of America v. Mutual Trust Co., 2002 SCC 43, [2002] 2 S.C.R. 601 at
paras. 21-22. Consequently, it cannot be doubted that the appellant was not
made whole when she received in 2007 the same nominal dollar amount of
disability benefits as she would have received in 1978 and each year
thereafter; indeed, at the very least, the purchasing power of that amount
would have considerably declined in the intervening years. The very purpose of
subsection 66(4) is to allow the Minister to take all equitable remedial
actions which will ensure that a person who has been denied a benefit as a
result of an administrative error is provided with an appropriate remedy. A
textual, contextual and purposive analysis of subsection 66(4) supports the view
that this subsection seeks to remedy losses such as the decline in purchasing
power of benefits paid with great tardiness, as has occurred in this case.
[61]
Had
the remedial action contemplated by subsection 66(4) been limited to the simple
payment of the denied benefits, as the respondent submits, Parliament could
have easily so provided. Rather, the subsection gives the Minister broad and
unfettered authority to take “appropriate” “remedial action” in order to ensure
that the aggrieved person is made whole under the CPP as if “the
administrative error [had] not been made.” Surely this includes remedial action
to compensate for the loss of purchasing power of the benefits resulting from
their late payment in circumstances where the delay resulting from the administrative
error has been extensive.
[62]
This
is a case where a person has been denied a benefit for close to 30-years as the
result of an administrative error. It is difficult to understand how such a
person can be placed in the same position under the CPP as if the error
had not been made if she is not compensated, at the very least, for the loss in
purchasing power of the erroneously withheld benefit payments resulting from
inflation. It is generally appropriate to quantify such compensation in the
same way as interest.
[63]
The
respondent nevertheless submits that this textual, contextual and purposive
interpretation of the subsection should not be followed on the ground that the
subsection does not specifically provide for the payment of interest. The respondent
further submits that in the absence of a specific statutory provision allowing
for the payment of interest, the Minister has no authority to award interest
under subsection 66(4) of the CPP no matter how broadly her remedial
powers are drafted under that subsection.
[64]
I
agree with the respondent that the CPP is a complete code governing the
payment of benefits, and that in the absence of a statutory authority to do so,
the Minister does not have the power to award interest on benefits payable
under the CPP: Gorecki v. Canada (Attorney General), above, at
paras. 5 and 14.
[65]
That
being said, however, the issue in this appeal is not whether the Minister can
award interest in the absence of a statutory authority. Rather, the issue here
is whether subsection 66(4) of the CPP is a statutory authority
empowering the Minister to compensate a person for the late payment of benefits
through interest payments. In my opinion, it is such a statutory authority.
[66]
Subsection
66(4) provides the Minister with a large and unfettered authority to take such
remedial action as she considers appropriate to place the appellant in the
position that she would be under the CPP had the administrative error
committed in her case not been made. This authority is broad enough to allow
the Minister to consider whether, in the circumstances of the appellant,
remedial action to compensate for the late payment of the benefits is
appropriate or not. In exercising her authority under the subsection, the
Minister must act reasonably, but she is nevertheless afforded a large degree
of discretion in determining how the appellant could be placed in the position
she would have been had the error not been committed.
[67]
For
example, the Minister could decide to compensate the appellant for the loss of
purchasing power of the payments resulting from the inflation which ensued from
the time the payments should have been made. Alternatively, the Minister could
decide to apply an interest calculation based on the formula set out in
paragraph 36(2)(b) of the Canada Pension Plan Regulations, C.R.C.
c. 385, or use any other reasonable interest or compensation formula
appropriate in the circumstances.
Conclusions
[68]
For
the reasons set out above, I would allow the appeal and set aside the judgment
of the Federal Court. Giving the judgment which should have been given, I would
allow the judicial review application, quash the decision of July 21, 2010 made
on behalf of the Minister, and order the Minister to determine anew the
appellant’s request for interest in accordance with these reasons. Since no
costs were sought by the appellant, I would make no award as to costs.
"Robert M.
Mainville"
“I
agree.
K.
Sharlow J.A.”
“I
agree.
J.D.
Denis Pelletier J.A.”
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