Date: 20020118
Docket: A-772-00
Neutral citation: 2002 FCA 24
CORAM: STONE J.A.
EVANS J.A.
MALONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
THOMAS MILLER
Respondent
Heard at Ottawa, Ontario, on January 16, 2002.
Judgment delivered at Ottawa, Ontario, on January 18, 2002.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: STONE J.A.
MALONE J.A.
Date: 20020118
Docket: A-772-00
Neutral citation: 2002 FCA 24
CORAM: STONE J.A.
EVANS J.A.
MALONE J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
THOMAS MILLER
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
[1] For several years Thomas Miller has been employed as the golf professional at the Prescott Golf Club. It is seasonal employment and, being unable to find employment during the winter months, he has claimed and received employment insurance benefits for several years. In an attempt to become financially self-sufficient during the off-season, he and another golf professional decided in the Fall of 1997 to establish a golf school which they would run when they were not employed by their clubs.
[2] As a result of a story about the school that appeared in the local newspaper, the Employment Insurance Commission conducted an investigation into whether Mr. Miller was entitled to the benefits that had been paid to him while he had been preparing to operate, and had been operating, the golf school. The Commission decided that Mr. Miller had not been entitled to receive employment insurance benefits from mid-November 1997 until March 1998, and during the corresponding months of the years 1998 and 1999. Second, the Commission imposed on Mr. Miller a penalty of $5,265.00 for making statements in support of his claim for employment insurance benefits that he knew to be false or misleading.
[3] In a unanimous decision dated April 7, 1999, a Board of Referees allowed an appeal by Mr. Miller against these decisions. The Commission appealed the Board's decision to an Umpire, who dismissed it. This is an application for judicial review by the Attorney General of Canada to set aside the decision of the Umpire (CUB 49608), dated October 6, 2000.
[4] At the hearing before the Board the Commission advanced two grounds on which Mr. Miller's business activities had disqualified him from receiving benefits during the relevant winter months of 1997, 1998 and 1999. First, Mr. Miller was disentitled to benefits under section 18 of the Employment Insurance Act, S.C. 1996, c. 23, because he was not available for work. Second, Mr. Miller was disqualified by subsection 30(1) of the Employment Insurance Regulations, SOR/96-332, in that he was engaged in the operation of a business and did not satisfy the criteria set out in subsection 30(3) for determining whether a person was within the exception in subsection 30(2) for those who were operating a business, but only a minor extent. In addition, the Commission sought to uphold its imposition of a penalty under paragraph 38(1)(a) of the Act.
[5] The Board rendered the following decision after hearing oral presentations made on behalf of the parties.
Mr. Miller, the appellant attended the hearing and was represented by Mr. Laushway. No new information was submitted and the hearing was tape recorded. The claimant has been a Golf Professional for 25 years in small communities (Prescott, Picton). His annual employment is for 6 months. For years he has tried to obtain employment in the off-season without success (small community - limited job opportunities, especially for people who will be only available for the winter season.) He has been audited by the Commission in the past but was deemed to be available for work but unable to find employment. In 1997, being unable once more to find employment, he and a friend (also a Golf Pro) decided to try to make their own employment by starting a golf school. Since they could fill in for each other if either got a job the claimant was as available for work as he ever had been in previous years. As a golf pro in a small community he knew everyone in town who might have employment available. This attempt at gainful employment failed both in 1997 and in 1998 in that the school showed no profit. The Board of Referees concluded that these efforts to create employment for himself did not make him any less available for employment than he had been in any previous year. If he had not made this effort he could have continued to qualify for benefits as he had in previous years. He should have reported this attempt to the Commission but the Board of Referees concluded that this was from ignorance of the Employment Insurance Act and not with any attempt to defraud.
[Emphasis added]
[6] On appeal to the Umpire, the Commission did not challenge the Board's finding that Mr. Miller was available for work. Rather, it submitted that the Board had failed to consider whether he was disqualified under section 30 because it had not addressed the six criteria prescribed in subsection 30(3) of the Regulations for determining whether a person was operating a business to a minor extent. On the issue of the penalty, the Commission submitted that Mr. Miller's own explanations of why he had not disclosed to the Commission the fact that he had been operating a business indicated that he had deliberately misrepresented his position.
[7] In his reasons for decision the Umpire set out at some length the submissions made by the parties, including the Commission's arguments based on subsection 30(3) of the Regulations. Nonetheless, the sum total of the Umpire's analysis and conclusions is to be found in the concluding three paragraphs of his decision.
In the case before me, the Board considered and weighed the evidence and arrived at the decision that the claimant was not disqualified from benefits because of his effort to create employment for himself while remaining as available for employment as he had been during the previous years when he had tried in vain to find employment while receiving employment insurance benefits.
To arrive at a different conclusion would be to send a message to all unemployed individuals that no matter how impossible the prospect of employment might be they should not attempt to seek opportunities of creating employment for themselves, while remaining available should an employment opportunity arise.
In this case there is nothing to substantiate, in any way, that the Board of Referees erred in the interpretation or application of the relevant legislation or jurisprudence or in its finding of facts most definitely not in a manner that could be characterized as capricious or without regard for the material before it.
[8] In challenging the Umpire's decision in this application for judicial review, counsel for the Attorney General alleges that the Umpire erred in law in upholding the Board with respect to both the issue of Mr. Miller's disqualification and the penalty imposed on him.
[9] On the issue of disqualification under section 30, counsel argued that the Board's statement of facts and findings indicated that it had focussed solely on whether Mr. Miller was available for work while receiving benefits during the relevant months, and had failed to address the separate issue of whether he was also disqualified because he was operating a business and was not within the exception for those whose engagement in a business is no more than minor.
[10] The grounds of appeal to an Umpire are restricted by section 115 to those on which an application for judicial review may be made to this Court. However, counsel for the Commission conceded that it was nonetheless open to the Umpire to decide whether, if the Board had addressed the subsection 30(3) criteria, it could reasonably have concluded on the evidence before it that Mr. Miller had been engaged in his business to no more than a minor extent. In this regard, it is relevant to note that section 117 of the Act empowers an Umpire to decide any question of fact or law necessary to dispose of an appeal. However, counsel argued, the paragraphs quoted above from the Umpire's decision show that he did not do this.
[11] I accept that it is inappropriate for the Court to make it unduly onerous for Boards of Referees to discharge the duty imposed by subsection 114(3) of the Act to provide a statement of findings of fact material to their decision. Nonetheless, I agree with counsel for the Attorney General that in this case the findings of the Board do not pass muster. The failure of the Board to address expressly the subsection 30(3) criteria suggests that they were not considered. There is some overlap between the facts relevant to determining whether Mr. Miller was not disqualified from receiving benefits because he was operating a business to a minor extent and whether he was available for work. However, while these are separate issues, the Board appears to have collapsed them into the single question of availability.
[12] Hence, the Umpire erred in law when he upheld the decision of the Board on the ground that it had weighed and considered the evidence and arrived at the decision that Mr. Miller was not disqualified by reason of having attempted to create employment for himself, while remaining available for employment. The Umpire did not say that he had reviewed the evidence before the Board and found that it would rationally support the conclusion that, on the basis of the factors to be considered under subsection 30(3), Mr. Miller had operated his business to only a minor extent.
[13] Whether the Umpire erred in inferring from the Board's statement of findings of material fact that the Board had addressed the relevant statutory provisions is a question of law that the Umpire had to decide correctly if his decision is to withstand an application for judicial review to set it aside for error of law.
[14] On the other hand, I am not satisfied that the Board erred in law when it allowed Mr. Miller's appeal against the penalty imposed on him for making statements in support of his claim that he knew were false or misleading. The Commission justified the penalty by alleging that Mr. Miller had answered "No" to the question on the reporting cards, "Did you work in the reporting period?" Hence, in upholding the Board's decision, the Umpire committed no reviewable error, even though he did not expressly address the issue of penalty.
[15] Counsel for the Commission argued that the Board erred in law when it found that Mr. Miller was not liable to a penalty because he had made the statements in ignorance of the Employment Insurance Act and with no attempt to defraud. Section 38 requires only that the claimant made a statement that he knew was false; there is no requirement that it also be made "in an attempt to defraud". Indeed, it is made clear in Canada (Attorney General) v. Gates, [1995] 3 F.C. 17, at pages 23-24 (C.A.), that it is an error of law to interpret the Act as requiring proof that the claimant intended to do something in addition to making a statement in support of a claim which the claimant knew was false or misleading.
[16] In the case at bar it is not altogether clear what the Board meant by the phrase "in an attempt to defraud". It could have been a reference to the fact that Mr. Miller had received no income from his business and therefore had not made the statements in an attempt to receive benefits while he was also in receipt of income from another source. If this is what the Board meant, it erred in law.
[17] As for the Board's statement that it was not justifiable to impose a penalty on Mr. Miller because he had made his claim "from ignorance of the Employment Insurance Act", counsel for the Commission submitted that any confusion that Mr. Miller may have had about the extent to which the Act permitted him to work without losing his benefits was simply irrelevant because the question he had been asked was very simple and non-technical: "Did you work during the reporting period"? The question was not, "Did you work during the reporting period to such an extent that you were disqualified from receiving benefits?"
[18] Nonetheless, in my opinion, despite the apparent simplicity of the question, I can well understand that, given the context in which it is asked, a claimant may well think that he or she is being asked directly about work and eligibility, especially since not all work will disqualify a person from receiving benefits. Hence, it was open to the Board to find as a fact that Mr. Miller thought that he was being asked about whether his work made him ineligible for benefits. I note here that, whether a person is operating a business to a minor extent is a question of fact and that it was for the Board to decide if Mr. Miller was credible when he claimed to be confused about the question that he had been asked.
[19] Consequently, the Board did not err in law when it held that Mr. Miller was not liable to a penalty. The existence of one good ground for setting aside the penalty imposed by the Commission is sufficient to conclude in this case that the Umpire did not err in law when he upheld the Board's decision on the penalty. In order to avoid in the future the kind of confusion from which Mr. Miller was found to have suffered, the Commission may wish to consider amending the wording of the question about work on the reporting card so as to make it quite clear precisely what information is being sought.
[20] I would also note that, before neither the Board nor the Umpire, had the Commission been able to produce in evidence the reporting cards completed by Mr. Miller that contained the statements on which it relied to justify the penalty that it had imposed. Given the seriousness of the imposition of a penalty for lying, the Commission ought not normally to resort to the notes of an interview between a Commission official and the claimant as proof of a false statement made by the claimant in a document that the claimant had given to the Commission.
[21] For these reasons, I would allow the application for judicial review in part, set aside that aspect the Umpire's decision upholding the Board of Referees' decision on the question of entitlement, and return the matter to the Chief Umpire to remit it to a differently constituted Board of Referees to determine if the applicant was disqualified by section 30 of the Regulations from receiving benefits in the months in question.
[22] Since counsel for the applicant did not ask for costs and the respondent was only partially successful, I would make no award of costs.
"John M. Evans"
J.A.
"I agree
A.J. Stone J.A."
"I agree
B. Malone J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-772-00
STYLE OF CAUSE:Attorney General of Canada v. Thomas Miller
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: January 16, 2002
REASONS FOR JUDGMENT : Evans J.A.
CONCURRED IN BY: Stone J.A.
Malone J.A.
DATED: January 18, 2002
APPEARANCES:
Ms. Suzanne Pereira FOR THE APPLICANT
Mr. Eric G. Pietersma FOR THE RESPONDENT
SOLICITORS OF RECORD:
Morris Rosenberg FOR THE APPLICANT
Deputy Attorney General of Canada
Nelligan O'Brien Payne LLP FOR THE RESPONDENT
Ottawa, Ontario
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