Date:
20081208
Docket:
A-341-08
Citation:
2008 FCA 388
CORAM: LINDEN J.A.
SHARLOW
J.A.
TRUDEL
J.A.
BETWEEN:
ATTORNEY
GENERAL OF CANADA
Applicant
and
GURJINDER
UPPAL
Respondent
REASONS FOR JUDGMENT OF THE
COURT
(Delivered
from the Bench at Vancouver, British Columbia, on December 8, 2008)
TRUDEL J.A.
[1]
The
Attorney General of Canada (the applicant) has applied for judicial review of a
decision by Umpire R. C. Stevenson (CUB 70476), dated April 25, 2008. Mr.
Uppal, the respondent, did not appear.
[2]
After
losing his employment, the respondent claimed unemployment benefits. His claim
was denied by the Commission. It determined that the respondent had knowingly
made false or representations resulting in an overpayment of over $13,000 and
imposed a penalty of $1,239. This penalty amounted to three times the
claimant’s rate of weekly benefits as permitted by paragraph 38(2)(a) of the Employment
Insurance Act, S.C. 1996, c. 23 (the Act).
[3]
The
respondent's appeal to the Board of Referees was unsuccessful, so he appealed
again to the Umpire raising several issues. The respondent won with respect to
the penalty, which was reduced to $372.
[4]
The
crux of the present Application is the exercise, by the Commission, of its
discretion to impose penalties on claimants who receive or try to receive
benefits by knowingly making misrepresentations.
[5]
Subsection
38(2) of the Act reads:
|
(2) The Commission may set the amount of the penalty for
each act or omission at not more than
(a)
three times the claimant’s rate of weekly benefits;
(b)
if the penalty is imposed under paragraph (1)(c),
(i)
three times the amount of the deduction from the claimant’s benefits under
subsection 19(3), and
(ii)
three times the benefits that would have been paid to the claimant for the
period mentioned in that paragraph if the deduction had not been made under
subsection 19(3) or the claimant had not been disentitled or disqualified from
receiving benefits; or
(c)
three times the maximum rate of weekly benefits in effect when the act or
omission occurred, if no benefit period was established.
|
(2) La pénalité que la Commission peut infliger pour
chaque acte délictueux ne dépasse pas :
a) soit le triple du taux de prestations hebdomadaires du prestataire;
b) soit, si cette pénalité est imposée au titre de l’alinéa (1)c),
le triple :
(i)
du montant dont les prestations sont déduites au titre du paragraphe 19(3),
(ii)
du montant des prestations auxquelles le prestataire aurait eu droit pour la
période en cause, n’eût été la déduction faite au titre du paragraphe 19(3)
ou l’inadmissibilité ou l’exclusion dont il a fait l’objet;
c) soit, lorsque la période de prestations du prestataire n’a pas été
établie, le triple du taux de prestations hebdomadaires maximal en vigueur au
moment de la perpétration de l’acte délictueux.
|
[6]
Before
imposing a penalty on the respondent, the Commission calculated the penalty
amount using its National Policy on False Statements Made Knowingly,
which has been applied to all decisions made on June 1, 2005 and after
(Applicant’s Record, Tab 3). On that basis, and after taking into consideration
the existence of mitigating circumstances, the Commission set the penalty at
40% the of the net overpayment (Umpire's decision, at page 5). It then reduced
it to $1239 to respect the maximum amount allowed under the Act.
[7]
The
Umpire concluded that subsection 38(2) of the Act requires the Commission to
calculate penalties in reference to a claimant's weekly benefit rate. He found
that the Commission “departed from the legislated policy enacted by the
Parliament” when it adopted new guidelines regarding false or misleading
statements made knowingly because “if penalties are to be ‘more commensurate
with the amount of the overpayment” as stated in the new guidelines, rather
than referenced to benefit rates, the policy change should come from
Parliament” (reasons for decision, at page 7).
[8]
Ultimately,
the Umpire concluded that the Board “effectively refused to exercise its
jurisdiction by not considering the effect of the guidelines and “erred in law
in upholding what amounted to the mandatory imposition of a maximum penalty for
a first offence” (ibid. at page 8).
[9]
The
Umpire’s decision presents difficulties in two ways.
[10]
First,
the record is unclear as to whether the validity of the guidelines had been an
issue between the parties. They were obviously not discussed by the Commission
of by the Board. In his reasons, the Umpire introduced the subject in the
following manner:
While the vires
or validity of the Guidelines is not something an Umpire can determine in the
context of a claimant’s appeal it is appropriate to refer to them as their
application or misapplication is relevant to the questions of whether the
Commission acted judiciously in determining a penalty and whether the Board of
Referees erred in its assessment of the judiciousness of the Commission’s
decision.” ibid, at page 7).
[11]
Counsel
does not recall whether the validity of the new guidelines was formally put to
the Umpire and whether the parties were given a chance to properly argue the
point.
[12]
Secondly,
regardless of the guidelines, the Umpire did not put his mind to the
Commission’s decision itself, that is whether all of the relevant factors or
some irrelevant factors had been considered by the Commission. His only
comments were that the mitigation factor, to be meaningful, should have been
applied to the final penalty and the quantum of the penalty was too high for a first
offence.
[13]
It
is trite law that an Umpire cannot interfere with the quantum of a penalty
unless it can be shown that the Commission exercised its discretionary power in
a non-judicial manner or acted in a perverse or capricious manner without
regard to the material before it (Canada v. McLean, [2001] F.C.J. No.
176 (FCA); Canada v. Rumbolt, [2000] F.C.J. No. 1968 (FCA).
[14]
In
concluding as he did, the Umpire substituted his own discretion for that of the
Commission and exceeded his jurisdiction.
[15]
This
error is sufficient to allow the application. The new guidelines shall be
discussed by this Court if and whenever their validity is properly challenged.
[16]
Therefore,
the application for judicial review will be allowed.
[17]
The
decision of the Umpire of April 25, 2008 will be set aside on the issue of the
penalty imposed under subsection 38(2) of the Act and the matter will be
remitted to the Chief Umpire (or his designate) for redetermination in
accordance with these reasons.
"Johanne
Trudel"
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