Date: 20020607
Docket: T-1375-00
Neutral citation: 2002 FCT 651
BETWEEN:
CLAUDE DUBÉ
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
Introduction
[1] The applicant, Claude Dubé, representing himself, is seeking to have the decision dated April 19, 2000, by the Employment Insurance Commission (the "Commission"), refusing to write off the overpayment of unemployment benefits in the amount of $6,059 owed by the applicant, set aside by means of a judicial review under section 18.1 of the Federal Court Act.
[2] Section 56 (formerly section 60) of the Employment Insurance Regulations, (SOR/96-332) (the "Regulations") made under the Employment Insurance Act (the "Act"), confers on the Commission a discretion to write off. That section reads:
| 56. (1) A penalty owing under section 38, 39 or 65.1 of the Act or an amount owing under section 43, 45, 46, 46.1 or 65 of the Act may be written off by the Commission if (a) the total of the penalties and amounts owing by the debtor does not exceed $5 and a benefit period is not currently running in respect of the debtor; (b) the debtor is deceased; (c) the debtor is a discharged bankrupt; (d) the debtor is an undischarged bankrupt in respect of whom the final dividend has been paid and the trustee has been discharged; (e) the overpayment does not arise from an error made by the debtor or as a result of a false or misleading declaration or representation made by the debtor, whether the debtor knew it to be false or misleading or not, but arises from (i) a retrospective decision or ruling made under Part IV of the Act, or (ii) a retrospective decision made under Part I or IV of the Act in relation to benefits paid under section 25 of the Act; or (f) the Commission considers that, having regard to all the circumstances, (i) the penalty or amount is uncollectable, or (ii) the repayment of the penalty or amount would result in undue hardship to the debtor. 56(2) (2) That portion of an amount owing under section 47 or 65 of the Act in respect of benefits received more than 12 months before the Commission notifies the debtor of the overpayment may be written off by the Commission if (a) the overpayment does not arise from an error made by the debtor or as a result of a false or misleading declaration or representation made by the debtor, whether the debtor knew it to be false or misleading or not; and (b) the overpayment arises as a result of (i) a delay or error made by the Commission in processing a claim for benefits,(ii) retrospective control procedures or a retrospective review initiated by the Commission, (iii) an error made on the record of employment by the employer, (iv) an incorrect calculation by the employer of the debtor's insurable earnings or hours of insurable employment, or (v) an error in insuring the employment or other activity of the debtor
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56. (1) La Commission peut défalquer une pénalité payable en application des articles 38, 39 ou 65.1 de la Loi ou une somme due aux termes des articles 43, 45, 46, 46.1 ou 65 de la Loi si, selon le cas : a) le total des pénalités et des sommes dues par le débiteur ne dépasse pas 5_$ et aucune période de prestations n'est en cours pour celui-ci; b) le débiteur est décédé; c) le débiteur est un failli libéré; d) le débiteur est un failli non libéré à l'égard duquel le dernier dividende a été payé et le syndic a été libéré; e) le versement excédentaire ne résulte pas d'une erreur du débiteur ni d'une déclaration fausse ou trompeuse de celui-ci, qu'il ait ou non su que la déclaration était fausse ou trompeuse, mais découle : (i) soit d'une décision rétrospective rendue en vertu de la partie IV de la Loi, (ii) soit d'une décision rétrospective rendue en vertu des parties I ou IV de la Loi à l'égard des prestations versées selon l'article 25 de la Loi; f) elle estime, compte tenu des circonstances : (i) soit que la pénalité ou la somme est irrécouvrable, (ii) soit que le remboursement de la pénalité ou de la somme imposerait au débiteur un préjudice abusif. 56(2) (2) La Commission peut défalquer la partie de toute somme due aux termes des articles 47 ou 65 de la Loi qui se rapporte à des prestations reçues plus de 12 mois avant qu'elle avise le débiteur du versement excédentaire, si les conditions suivantes sont réunies : a) le versement excédentaire ne résulte pas d'une erreur du débiteur ni d'une déclaration fausse ou trompeuse de celui-ci, qu'il ait ou non su que la déclaration était fausse ou trompeuse; b) le versement excédentaire est attribuable à l'un des facteurs suivants : (i) un retard ou une erreur de la part de la Commission dans le traitement d'une demande de prestations, (ii) des mesures de contrôle rétrospectives ou un examen rétrospectif entrepris par la Commission, (iii) une erreur dans le relevé d'emploi établi par l'employeur, (iv) une erreur dans le calcul, par l'employeur, de la rémunération assurable ou du nombre d'heures d'emploi assurable du débiteur, (v) le fait d'avoir assuré par erreur l'emploi ou une autre activité du débiteur. |
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[3] The decision of the Commission is found in a letter dated April 19, 2000, addressed to Claude Dubé. It reads:
[TRANSLATION] We have examined your file and it was determined that you have the financial means to repay the amount owing to our Department without resulting in undue hardship to you, and the circumstances in your case do not make the amount uncollectable.
Facts
[4] On November 22, 1992, Mr. Dubé filed a claim for benefits indicating that he had stopped working for Spécialités Pièces d'Autos Franmon Inc. ("Franmon Inc.") as a result of a lack of work. He also indicated that he would continue working for Franmon Inc. between half a day and one day per week. The Commission accepted Mr. Dubé's claim, a benefit period was established in his favour, and benefits were subsequently paid to him.
[5] In 1994, under section 43 of the Act, the Commission reexamined the claim for benefits of Mr. Dubé who, on September 16, 1994, told the Commission that he had always worked 40 hours a week for Franmon Inc. and that he should have indicated it on his employment insurance claim. According to his return, he thought that "performed" meant "paid" and added that [TRANSLATION] "this was not done with the intention of defrauding."
[6] On November 19, 1994, the Commission notified Mr. Dubé of the results of its investigation and demanded that he repay the benefits that had been paid out, without however imposing a penalty on him. Mr. Dubé appealed that decision to the Board of Referees.
[7] The Commission asked the Board of Referees to allow the appeal brought by Mr. Dubé because it had discovered that there had in fact been an interruption of earnings during his qualifying period but from Dubé Ventilation Ferblanterie Enr, another employer. The Commission asked the Board to refer the matter back to it for reconsideration.
[8] On November 1, 1995, the Board of Referees rendered the following decision:
[TRANSLATION]
ISSUE
Has the claimant proven that he has had an interruption of earnings from his employer?
HEARING:
At the hearing, the claimant showed that he was of good faith, that he had complied with the recommendations made by the Commission's representatives and that there had been an interruption of earnings.
DECISION:
The Board therefore is of the opinion that the matter should not be referred back to the Commission for reconsideration and unanimously rejects the application.
[9] The Commission appealed to the Umpire but withdrew its appeal on March 17, 1995, stating that it would render a new decision to replace the erroneous one.
[10] Prior to that, on January 20, 1995, the Commission had asked Revenue Canada to determine whether Mr. Dubé's employment with Franmon Inc. was insurable. On
February 6, 1995, Revenue Canada decided that Mr. Dubé's employment was not insurable because it did not satisfy the requirements of paragraph 5(1)(a) of the Act, given that Mr. Dubé and Normand Morin controlled the corporation. On September 22, 1995, the Appeals Division of Revenue Canada confirmed the decision that Mr. Dubé did not hold insurable employment.
[11] On March 7, 1995, the Commission notified Mr. Dubé that his employment with Franmon Inc. did not constitute insurable employment since there was no employer-employee relationship. On the same day, the Commission notified Mr. Dubé that it could not pay him employment insurance in accordance with his claim filed on November 22, 1992. It was that decision that created an overpayment of $6,059. Mr. Dubé appealed to the Board of Referees, which allowed the appeal on August 13, 1997. The decision of the Board of Referees reads, in part, as follows:
[TRANSLATION]
ISSUE:
The issue is whether the claimant has a sufficient number of weeks of insurable employment to establish a benefit period in accordance with sections 6 and 7 of the Employment Insurance Act.
HEARING:
At the hearing, the claimant contested the Commission's decision to present a new decision to the Board of Referees regarding an issue that involved the same benefit period and on which the Board of Referees had already decided favourably-a decision the Commission did not challenge.
. . .
DECISION:
The Commission cannot evade the Act and Regulations and must follow the prescribed procedure for challenging those decisions.
Since it has withdrawn its application for an appeal before the umpire, the twenty-one-day periods following the decision have expired and the Commission must apply the decision made by the Board of Referees.
In light of those facts, the Board of Referees unanimously allows the appeal.
[12] The Commission brought an appeal to the Umpire who, on January 6, 1999, restored the decision of the Commission. Judge Gaston Harvey stated in part:
[TRANSLATION]
The appeal to the Board of Referees was therefore postponed until Revenue Canada gave notice of its decision from which Claude Dubé had appealed. In the interim, Revenue Canada's decision confirmed that the employment with Spécialités Pièces d'autos Franmon inc. was not insurable and dismissed the appeal filed by Claude Dubé. In the circumstances, only six weeks of insurable employment remained, specifically those worked at Dubé Ventilation Ferblantier enr.
Since sections 6 and 7 provide that an employee must have at least ten weeks of insurable employment, he was therefore denied the benefits.
I must therefore conclude that the Commission's decision must be restored and the decision of the Board of Referees set aside.
There were a variety of complications and errors by the Commission in this case. Writing off falls within the Commission's discretion.
ACCORDINGLY, I recommend that the overpayment in this case be written off in whole or in part. [Emphasis added]
[13] Mr. Dubé cites the provisions in subsection 56(2) of the Regulations and argues that the overpayment arose as a result of a delay or error made by the Commission in processing a claim for benefits or of retrospective control procedures or a retrospective review initiated by the Commission.
[14] France Arsenault, an Agent II with the Commission's local office in Sept-Îles, filed two affidavits on behalf of the Commission: the first one dated July 4, 2000, and the second one sworn on September 4, 2000.
[15] In her affidavit of July 4, 2000, she deposed:
[translation]
2. The applicant's file was sent to me after the decision of the Umpire was made, and I examined the possibility of writing off the overpayment under subsection 56(2) of the Regulations . . . .
3. An examination of the applicant's case showed that the overpayment could not be written off under subsection 56(2) of the Regulations ... as a result of false or misleading declarations made by the applicant, which have been noted and are apparent from the applicant's file, the documents therein I am entering jointly as exhibit B as follows . . .
4. I then sent the file to the tax collections section in order that the possibility of writing off the overpayment be examined on the ground that the repayment of the amount would result in undue hardship to the debtor or that the amount would be uncollectable. [Emphasis added]
[16] In her second affidavit, France Arsenault deposed:
[translation]
2. I would like to point out that I have also examined the possibility of writing off the overpayment in accordance with paragraph 56(1)(e) . . .
3. A review of the applicant's file showed that the overpayment could not be written off under paragraph 56(1)(e) of the Regulations . . . as a result of false or misleading declarations made by the applicant that I have noted and that are apparent from the applicant's file, the documents therein have already been entered jointly as exhibit B to my affidavit dated July 4, 2000.
4. As mentioned in my affidavit dated July 4, 2000, I then sent the file to the tax collections section in order that they examine the possibility of writing off the overpayment on the ground that the repayment of the amount would result in undue hardship to the debtor and that the amount would be uncollectable. [Emphasis added]
Analysis
(1) The principles
[17] In Canada (Attorney General) v. Filiatrault (1998), 235 N.R. 274, the Federal Court of Appeal held that it falls to the Trial Division of this Court and not the Board of Referees to determine whether the Commission was right in refusing to write off an overpayment.
[18] In Allard v. Canada (Attorney General), [2001] FCT 789, this Court sets out certain principles with respect to the exercise by the Commission of the discretion to write off that is conferred on it by section 56 of the Regulations. The most relevant principles for the purposes of this case are the following:
1 ° The standard of review on the merits of the Commission's decision to write off or not to write off is reasonableness simpliciter within the meaning given by Mr. Justice Iacobucci in Canada (Director of Investigation and Research, Competition Act) v. Southam Inc.,[1997] 1 S.C.R. 748, who explains, at pages 776-777, as follows:
An unreasonable decision is one that, in the main, is not supported by any reasons that can stand up to a somewhat probing examination. Accordingly, a court reviewing a conclusion on the reasonableness standard must look to see whether any reasons support it. The defect, if there is one, could presumably be in the evidentiary foundation itself or in the logical process by which conclusions are sought to be drawn from it. An example of the former kind of defect would be an assumption that had no basis in the evidence, or that was contrary to the overwhelming weight of the evidence. An example of the latter kind of defect would be a contradiction in the premises or an invalid inference.
2 ° For the purposes of section 56 of the Regulations, it is irrelevant whether the false or misleading representations were made knowingly or with full knowledge. The words "whether the debtor knew it to be false or misleading or not" in paragraph 56(1)(e) and in subsection 56(2) eliminate the intentional, fraudulent or voluntary character of the false representation (See also Canada (Attorney General) v. Pilote (1998), 243 N.R. 2031 F.C.A.).
3 ° The absence of a false or misleading declaration is a condition precedent to the exercise of the Commission's discretionary power under paragraph 56(1)(e) and under subsection 56(2) of the Regulations. In other words, the presence of a false or misleading declaration bars the Commission from exercising its discretionary power under section 56.
(2) Application of the principles and conclusions
[19] The record clearly shows that the benefits received by Mr. Dubé following his claim in November 1992 are the result of a false or misleading declaration made by him. This results from the fact that, in his claim for benefits, Mr. Dubé indicated that there had been a work stoppage, which was inaccurate since he was working full time (often, I might add, without being paid) before, during and after his qualifying period. Mr. Dubé acknowledged this before the Court and I accept that Mr. Dubé had no intention of defrauding the Commission.
[20] He criticizes the Commission harshly for having taken something (the allegation of a false or misleading declaration) from his first case, from which the Commission withdrew before the Umpire, in order to raise it in his second case relating to non-insurable employment. He contends that it was unfair for the Commission to have used that element after withdrawing its appeal to the Umpire and thereby preventing that issue- specifically whether having regard to all of the circumstances, he had in fact acted inappropriately- from being argued at that point.
[21] Furthermore, he criticizes the Commission for failing to consider the recommendation for writing off made by Umpire Harvey.
[22] In my opinion, Mr. Dubé's arguments are without merit.
[23] The Commission's withdrawal of its appeal to the Umpire on March 17, 1995, did not close the issue as to whether Mr. Dubé had made a false or misleading declaration. That aspect of his case became irrelevant when the Commission, before the Board of Referees, asked that it allow Mr. Dubé's appeal since there had been a work stoppage at Dubé Ventilation Ferblanterie Enr. That issue therefore became moot.
[24] In the circumstances, it was not open to the Commission to write off either under paragraph 56(1)(e) or under subsection 56(2).
[25] Even if it were not possible to write off under paragraph 56(1)(e) or under subsection 56(2) of the Regulations, the Commission was required to examine whether the conditions in paragraph 56(1)(f) had been satisfied.
[26] The reason for this is quite simple. Each paragraph of subsection 56(1) of the Regulations is a distinct source or separate element of supply to the Commission's discretionary powers.
[27] In this case, the Commission contemplated that subsection of the Regulations. Furthermore, Mr. Dubé did not argue that the Commission had exercised its discretionary authority improperly in applying paragraph 56(1)(f). In my opinion, the evidence in the record shows that the exercise of that authority by the Commission was reasonable, particularly if we consider the assessment of Mr. Dubé's financial situation.
[28] Madam Justice Tremblay-Lamer drew a similar conclusion in Côté v. Canada (Human Resources Development), [2001] FCT 924, when applying a higher standard of review.
[29] For all of these reasons, this application for judicial review is dismissed without costs.
François Lemieux
J u d g e
Ottawa, Ontario
June 7, 2002
Certified true translation
S. Debbané, LLB
FEDERAL COURT OF CANADA
TRIAL DIVISION
SOLICITORS OF RECORD
DOCKET: T-1375-00
STYLE OF CAUSE: CLAUDE DUBÉ v. EMPLOYMENT INSURANCE COMMISSION
PLACE OF HEARING: SEPT-ÎLES
DATE OF HEARING: MAY 30, 2002
REASONS FOR ORDER AND ORDER BY LEMIEUXJ.
DATE OF REASONS: JUNE 7, 2002
APPEARANCES:
CLAUDE DUBÉ FOR THE APPLICANT
PAUL DESCHÊNES FOR THE RESPONDENT
SOLICITORS OF RECORD:
CLAUDE DUBÉ FOR THE APPLICANT
Port-Cartier, Québec
MORRIS ROSENBERG FOR THE RESPONDENT
Deputy Attorney General of Canada