Date: 20031120
Docket: A-45-03
Citation: 2003 FCA 435
CORAM: STRAYER J.A.
SHARLOW J.A.
MALONE J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
MOHAMMED DEEN
Respondent
Heard at Toronto, Ontario, on November 12, 2003.
Judgment delivered at Toronto, Ontario, on November 20, 2003.
REASONS FOR JUDGMENT BY: MALONE J.A.
CONCURRED IN BY: STRAYER J.A.
SHARLOW J.A.
Date: 20031120
Docket: A-45-03
Citation: 2003 FCA 435
CORAM: STRAYER J.A.
SHARLOW J.A.
MALONE J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
MOHAMMED DEEN
Respondent
REASONS FOR JUDGMENT
Introduction
[1] This application for judicial review concerns the relevant factors to be applied by the Canada Employment Insurance Commission (the Commission) in imposing a penalty under subsection 38(2) of the Employment Insurance Act, S.C. 1996, c.23 (the Act).
[2] That subsection provides for the maximum penalty that can be imposed for knowingly making a false or misleading declaration in the following terms:
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38(2) The Commission may set the amount of the penalty for each act or omission at not more than |
38(2) La pénalité que la Commission peut infliger pour chaque acte délictueux ne dépasse pas_: |
|
(a) three times the claimant's rate of weekly benefits; |
a) soit le triple du taux de prestations hebdomadaires du prestataire; |
|
(b) if the penalty is imposed under paragraph (1)(c) |
b) soit, si cette pénalité est imposée au titre de l'alinéa (1)c), le triple_: |
|
(i) three times the amount of the deduction from the claimant's benefits under subsection 19(3), and |
(i) du montant dont les prestations sont déduites au titre du paragraphe 19(3), |
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(ii) three times the benefits that would have been paid t 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 |
(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) three times the maximum rate of weekly benefits in effect when the act or omission occurred, if no benefit period was established. |
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. |
Issues
[3] Two issues must be resolved. First, what is the scope of the inquiry to be conducted by the Commission in determining the relevant factors to be considered in fixing the penalty in each individual case. Second, what use, if any, can the Commission make of the criminal law principles used by judges in setting fines upon conviction of an offence under the Criminal Code of Canada or other statutes.
Facts
[4] Mr. Deen established a claim for benefits effective February 20, 2000. Thereafter, and while he was receiving benefits, he failed to report earnings from employment. A subsequent Commission investigation revealed that he had worked for three separate employers during parts of the benefit period. According to these three employers his unreported earnings totalled $9,622.00.
[5] Mr. Deen was given an opportunity to explain the discrepancy on the Commission's Request for Clarification of Employment Information form (the Request for Clarification), but no response was forthcoming. The Commission therefore concluded on the available information that he had knowingly made three false or misleading statements and imposed a penalty for each benefit period in the amounts of $2,208.00, $ 1,104.00 and $4,416.00 respectively, for a total of $7,728.00.
[6] The amounts of these penalties were calculated as an amount equal to the overpayment of benefits for the periods of employment in accordance with the Commission's policy for a first offence. As Mr. Deen had failed to provide any explanation, there were no extenuating circumstances for the Commission to consider. As his omission resulted in an overpayment of $7,728.00, the Commission concluded he committed a very serious violation pursuant to section 7.1 of the Act.
[7] The Commission then wrote to Mr. Deen to inform him of their decision as to the penalties being imposed. This form letter referred to his lack of response to the earlier Request for Clarification and invited additional information, indicating that in the event of financial hardship, other arrangements might be possible.
[8] Some two weeks later the respondent wrote to the Commission pleading financial hardship and detailing his personal circumstances. The Commission reviewed the file but declined to alter the penalties.
[9] The respondent then appealed the Commission's decision to a Board of Referees (the Board). The Board unanimously rejected the appeal, finding that the Commission's decision was within the meaning of the Act but recommended to the Commission that based on the claimant's financial circumstances, the penalty be reviewed with a recommendation to reduce.
[10] The Commission then reviewed the Board's recommendation to reduce the penalty. In doing so, the Commission looked at the fact that the claimant stated that he failed to declare his earnings because he had been laid off in February from his full-time job and while he was able to find a temporary job, it was not enough to support his family of five. In light of these factors, the Commission reduced the penalty by 50% to $3,864.
[11] Mr. Deen then appealed the Board's decision to an Umpire.
[12] The Umpire allowed the appeal, explaining his reasoning in a decision referred to as CUB 55881 which reads in part as follows:
There is no mention of what factors, if any, were taken into consideration by the Commission in imposing a substantial penalty on the claimant except that as it was a first incident of improper reporting, the penalty was fixed at 100% of the overpayment...
In regards to who should have the responsibility to inquire in the factors relevant in fixing a penalty, including a claimant"s ability to pay, I believe that it should be the Commission. The Board then has a responsibility, in its role, as mandated by the Federal Court of Appeal, of "protectors of insured persons' rights", to assure that the Commission has properly given regards to all significant factors in exercising its discretion in fixing a penalty. If the Board members are not satisfied that this has been done, the Board should then proceed with its own fact finding in this regard.
...
I would suggest that in fixing the amount of the penalty, guidance might be provided by what is required of judges in fixing fines for convictions under either the Criminal Code or other federal laws... In R v. Savard (1998), 126 C.C.C. (3d) 562 (Q.C.A), Justice LeBel stated:
I cannot satisfy myself that Parliament intended to have fines imposed on people who do not have property or income sources which would allow them to pay them. Before paying fines, the offender must be able to live, and in the appropriate case, provide for those who depend on him. Otherwise, it would be to condemn them to idleness or to have to make money from criminal activities. That cannot be the objective pursued by Parliament.
Echoing Justice LeBel's comments, I believe that in fixing the amount of a penalty of any significance, it is incumbent to the Commission to take into consideration the claimant's means and his ability to pay, along with other factors, such as the amount of money involved, whether it is a first of subsequent infraction and the circumstances in which the false statement was made...
[13] The applicant now alleges that the Umpire erred in law allowing the appeal and in referring the matter back to the Board for redetermination of the penalty.
Analysis
[14] An Umpire's jurisdiction to alter a Board's review of a discretionary decision of the Commission as to the amount of a penalty under subsection 38(2) is limited. As long as the Commission exercises its discretion judicially, that is, takes into account all relevant considerations and ignores irrelevant factors, its decisions are unassailable. (Canada (A.G.) v. Dunham, [1997] 1 F.C. 462 (C.A.)).
[15] In my analysis, there is nothing in section 38 or the scheme of the Act that suggests that there is any responsibility on the Commission to conduct an extensive inquiry on its own initiative as to the relevant factors in the initial fixing of a penalty. The Commission is entitled to test apparent discrepancies by seeking timely information from claimants, and it should and does afford claimants a timely opportunity to present relevant information, including information relevant to the question of penalty. In the absence of a response, the Commission is entitled to make its penalty assessment on the existing record. Thereafter, Commission practice and the Employment Insurance Regulations, SOR/96-332 (the Regulations) provide ample additional opportunities for the claimant to bring forward mitigating factors that would militate against the initial penalty assessment.
[16] In this case, the Umpire found that in fixing the amount of the penalty, the Commission should take guidance from criminal law principles relating to the fixing of fines under the Criminal Code or other federal statutes. This Court has already determined that principles from the criminal law system should not be randomly imported into the administrative guidelines used in the Commission's deliberations lest its discretion to set penalties be fettered (see for example Turcotte v. Canada, [1999] F.C.J. No. 311 (C.A.) at paragraph 5; Canada (A.G.) v. Lai [1998] F.C.J. No. 1016 (C.A.) at paragraph 4).
[17] These authorities were apparently not brought to the attention of the Umpire but are relevant here. The penalties under the employment insurance scheme established by the Act are to be viewed not as sanctions involving a criminal record but as deterrents in support of the voluntary and truthful declarations required from claimants. It may well be that there is an overlap and that some of the factors used in a criminal setting may be relevant if brought to the Commission's attention. The issue of hardship and ability to pay is certainly a factor that the Commission must take into account in fixing or reviewing a penalty, but the onus is on the claimant to put the relevant facts before the Commission. It is not an error of law for the Commission not to consider "ability to pay" as a factor in fixing the penalty if the facts are not placed before it.
[18] In this case, there was evidence in the record before the Umpire that the Commission had already reduced the penalty in response to further information provided about the respondent's financial circumstances. This evidence was apparently overlooked by the Umpire. This is a reviewable error by the Umpire as, on the basis of the existing record, it would be pointless to refer the matter back to the Board for redetermination. This is so because in reviewing all of the evidence including the penalty reduction, the Board could not reasonably find that the Commission had acted in a non-judicial manner in the exercise of its discretion.
[19] The Panel was advised that Mr. Deen may still have recourse to section 56 of the Regulations where the question of undue financial hardship can be further considered by the Commission. I would urge such a review as to the interest that has accrued since July of 2001.
[20] I would allow this application for judicial review, set aside the Umpire's decision in CUB55881 and reinstate the decision of the Board. This would leave in place the Commission's reduced penalty in the amount of $3,864.00. This is not an appropriate case for costs.
"B. Malone"
J.A.
"I agree
B.L. Strayer
J.A."
"I agree
K. Sharlow
J.A."
FEDERAL COURT OF APPEAL
COUNSEL OF RECORD
DOCKET : A-45-03
STYLE OF CAUSE : ATTORNEY GENERAL OF CANADA
Applicant
and
MOHAMMED DEEN
Respondent
LOCATION OF HEARING : TORONTO, ONTARIO
DATE OF HEARING : November 12, 2003
REASONS FOR JUDGMENT : Malone J.A.
CONCURRED BY : Strayer J.A.
Sharlow J.A.
DATE OF REASONS : November 20, 2003
APPEARANCES:
Ms. Sadian Campbell FOR THE APPLICANT
Mr. Mohammed Deen FOR THE RESPONDENT
(self-represented)
COUNSEL OF RECORD:
Morris Rosenberg
Deputy Attorney-General for Canada
Toronto, Ontario FOR THE APPLICANT
Brampton, Ontario FOR THE RESPONDENT
(self-represented)