Caverly v. Canada (Minister of Human Resources Development), 2002 FCA 92

Date: 20020228

Docket: A-211-01

Neutral citation: 2002 FCA 92

CORAM:        ROTHSTEIN J.A.

SEXTON J.A.

EVANS J.A.

BETWEEN:

                                                                     ROY CAVERLY

                                                                                                                                                       Applicant

                                                                                 and

                         THE MINISTER OF HUMAN RESOURCES DEVELOPMENT

                                                                                                                                                   Respondent

                                           Heard at Toronto, Ontario, on February 28, 2002.

                   Judgment delivered from the Bench at Toronto, Ontario, on February 28, 2002.

REASONS FOR JUDGMENT BY:                                                                              ROTHSTEIN J.A.

Date: 20020228

Docket: A-211-01

Neutral citation: 2002 FCA 92

CORAM:        ROTHSTEIN J.A.

SEXTON J.A.

EVANS J.A.

BETWEEN:

                                                                     ROY CAVERLY

                                                                                                                                                       Applicant

                                                                                 and

                         THE MINISTER OF HUMAN RESOURCES DEVELOPMENT

                                                                                                                                                   Respondent

                                                        REASONS FOR JUDGMENT

                     (Delivered from the Bench at Toronto, Ontario, on February 28, 2002)

ROTHSTEIN J.A.

[1]                 This is an application for judicial review from a decision of an Umpire under the Employment Insurance Act, S.C. 1996, c. 23, upholding a penalty imposed against the applicant by the Board of Referees on the ground that he knowingly failed to disclose all of his earnings for the reporting period in question. The sole issue is whether the Commission satisfied its onus of proving that the applicant knowingly made a false or misleading statement. See McDonald v. Canada (Employment and Immigration Commission) (1991), 81 D.L.R. (4^th) 736, at 741-2 (F.C.A).

[2]                 We were told that this is the first penalty case in which this Court has been faced with an issue arising from the use of the Teledec method of reporting by an employment insurance claimant. Under the Teledec system, employment insurance claimants may make employment insurance reports by telephone.

[3]                 It appears that there was information from the Commission before the Board of Referees detailing the procedure for using the Teledec system. The Board was of the view that the same "five question pattern" is asked on the Teledec system as appears on a reporting card. On that basis, the Board found that the first question on the Teledec system would be "Did you work during the period of this report?", that the applicant answered "no" and that he gave no further explanation.

[4]                 However, neither the reporting card nor the Teledec questions were in evidence before the Board. The evidence in this case shows the answer given by the applicant, that is, that he answered "no" to a question involving "work/wages". However, there is no evidence of the actual question asked of the applicant. Before this Court, the Commission explained that the questions asked on the Teledec system are "similar", but not necessarily the same as those on the reporting card.

[5]                 The applicant's evidence before the Board of Referees was that he did not remember the precise questions asked. He also stated that he did not do anything intentionally wrong.

[6]                 We have difficulty with the inference drawn by the Board of Referees and accepted by the Umpire that the questions asked on the Teledec system were the same as those on the reporting cards. The Commission's own evidence is only that the questions are "similar", not that they are the same. The Commission did not produce the reporting cards or evidence of the actual questions asked.

[7]                 The Commission has the onus of proving the allegation that a claimant knowingly made a false or misleading statement on a balance of probabilities. See McDonald, supra, at page 742. In our opinion, in order to discharge that onus, the Commission must adduce evidence of both the actual questions asked, as well as the answers given.

[8]                 Counsel for the respondent does not say it would have been difficult or impossible to have provided evidence of the questions on the Teledec system at the relevant time to the Board of Referees. Certainly, in cases involving reporting cards, the reporting cards themselves are typically put in evidence before the Board of Referees and the questions and answers are both in evidence. We see no reason why the analogous evidence of questions and answers is not required in a Teledec case.

[9]                 Indeed, the issue is one of fairness. In penalty cases, while the onus is initially on the Commission to prove that a claimant knowingly made a false or misleading statement, once it appears from the evidence that the claimant has wrongly answered a very simple question, the burden shifts to the claimant to provide an explanation for the incorrect answer. See Canada (Attorney General) v. Gates, [1995] 3 F.C. 17, at 22 (C.A.), adopting the comments of Strayer J. (as he then was) acting as Umpire in CUB 22326.

[10]            As a matter of fairness, a claimant must be told the allegedly simple question that he answered wrongly so that he has a reasonable opportunity of providing an explanation, if there is one. There was a suggestion in this Court that the Commission has provided Boards of Referees in Ontario with information as to the content of questions that a claimant is required to answer on the Teledec system. This hardly satisfies the fairness test. The Board of Referees is an independent tribunal separate and apart from the Commission. Information about questions and answers specific to a particular case must be put before the Board of Referees in that case and a claimant must know what simple question it is alleged he wrongly answered, in order that he have a fair opportunity to provide an explanation.

[11]            We are of the respectful view that the Umpire committed a reviewable error because he should have concluded that the Board of Referees based its decision on a material finding of fact without the necessary evidential underpinning. That is, there was no evidence of the actual question or questions about work and wages asked in the Teledec system at the relevant time, concerning which the Commission alleged there was a knowing misrepresentation in the answer given by the applicant.

[12]            The application for judicial review will be allowed, the decision of the Umpire set aside and the matter referred back to the Chief Umpire, or his designate, for redetermination in a manner consistent with these reasons.

                                                                                                                                       "Marshall Rothstein"                      

                                                                                                                                                                  J.A.