Date: 20031008
Docket: A-646-02
Citation: 2003 FCA 372
CORAM: RICHARD C.J.
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
JOCELYN DUSSAULT
Respondent
Hearing held at Montréal, Quebec, October 2, 2003.
Judgment delivered at Ottawa, Ontario, October 8, 2003.
REASONS FOR JUDGMENT: LÉTOURNEAU J.A.
CONCURRING: RICHARD C.J.
NOËL J.A.
Date: 20031008
Docket: A-646-02
Citation: 2003 FCA 372
CORAM: RICHARD C.J.
LÉTOURNEAU J.A.
NOËL J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
JOCELYN DUSSAULT
Respondent
REASONS FOR JUDGMENT
LÉTOURNEAU J.A.
Facts and proceedings
[1] By way of an application for judicial review, the Attorney General of Canada attacks a decision of an Umpire who, having rejected the respondent's allegations about breaches of the rules of natural justice, an erroneous interpretation of the concept of income, an inaccurate allocation of this income and a failure of the Board of Referees to give adequate reasons for its decision, nevertheless found that the Canada Employment Insurance Commission (the Commission) could not rely on the 72-month period in subsection 43(6) of the Unemployment Insurance Act, R.S.C. 1985, c. U-1 (the Act) to reconsider the respondent's claim for benefit.
[2] Albeit successful before the Umpire, but duly authorized to do this by an order of Mr. Justice Décary dated January 8, 2003, the respondent is asking, through a procedure analogous to the cross-appeal in appeal proceedings, that the Umpire's decision be set aside on the ground that he erred in law in failing to adopt the aforementioned allegations of the respondent. This proceeding by the respondent is of course ancillary to his request that the proceeding by the Attorney General of Canada be dismissed. It is meaningful only if this Court were to accept the arguments of the Attorney General of Canada on the issue of the Commission's right to reconsider the respondent's claim for benefit.
[3] The facts that gave rise to this litigation go back to the period when the respondent was working as an insurance salesman. When he became unemployed, he obtained a benefit period commencing April 21, 1996.
[4] As a result of an exchange of information between the Commission and the Canada Customs and Revenue Agency, the Commission learned that the respondent had reported self-employed income on his tax return for the 1996 fiscal year.
[5] Checking this information, the Commission found that the respondent did not report certain amounts he had received from renewals of various insurance policies while he was receiving benefits over a period extending from April 21 to November 9, 1996.
[6] The Commission then requested certain information from the respondent. He eventually acquiesced and provided information about his income, salary and commissions for 1996. However, he stated that he could not provide a detailed list indicating the anniversary date of each contract and the amount pertaining thereto.
[7] Since the respondent had not declared any earnings on his claims for benefit, on June 20, 2000, the Commission reconsidered those claims, as it is allowed to do under subsection 43(6) of the Act. It then proceeded to allocate the earnings acknowledged by the respondent pursuant to subsection 58(6) of the Unemployment Insurance Regulations (the Regulations). On July 16 of that year, the Commission sent a notice of overpayment in this regard to the respondent. However, the Commission did not impose any penalty.
[8] Following this reconsideration, the Commission was of the opinion that the respondent had made false or at the very least misleading representations by not reporting the earnings from insurance policy renewals. The respondent had thereby received benefits to which he was not entitled ($8,040).
[9] On July 20, the respondent appealed the Commission's decision to a Board of Referees, which, after hearing the case on August 15, 2000, dismissed his appeal. He then appealed to the Umpire.
Commission's right to reconsider the claim for benefit under subsection 43(6) of the Act
[10] The Umpire clearly overlooked the judgments of this Court in Canada (Attorney General) v. Pilote (1998), 243 N.R. 203 and Canada (Attorney General) v. Langelier, 2002 FCA 157, when he decided, in contradiction to those judgments, that the Commission, to avail itself of the benefit of subsection 43(6), had to establish that a false or misleading representation had been made knowingly or that it was subject to a penalty.
[11] As the Court said in Pilote, in paragraph 2, there is no connection between section 33 of the Act, which requires proof that the false statement was made knowingly, and subsection 43(6), which contains no such requirement.
[12] In Langelier, our colleague Mr. Justice Décary, in paragraph 5, clearly rejects the imposition of any such obligation:
With respect, I consider that the Umpire misdirected himself when he imposed on the Commission a burden pursuant to s. 43(6) of proving [Translation] "that the claimant knowingly made false statements". That is actually the burden imposed by s. 33(1), dealing with penalties. All Parliament requires in s. 43(6) is that "in the opinion of the Commission, a false or misleading statement . . . has been made".... Of course, in order to arrive at this conclusion the Commission must be reasonably satisfied that "a false or misleading statement or representation has been made in connection with a claim".
In other words, the mere existence or presence of a false or misleading statement suffices, to the degree that the Commission is reasonably satisfied of this fact, to trigger the application of subsection 43(6) without the need to find intention in the person making the statement. Its existence is inferred objectively from the facts. In the case at bar, it is unambiguous that the respondent did not report, or concealed, for the period during which he was receiving benefits, the income from work on his own account.
[13] The difference in treatment between section 33 and subsection 43(6) is explained by their respective purposes. Section 33 is intended to punish deviant behaviour and, needless to say, requires proof of such deviance. That some proof is required is indicated by the use of the word "knew". Subsection 43(6), on the other hand, is simply intended to recover the money that should not have been paid and would not have been paid absent the false or misleading statement or, to state it in the positive form with the appropriate antonyms, if the statement had been true or sincere. It may also be used to allow the payment by the Commission of additional benefits or benefits previously denied: Langelier, supra, paragraph 8.
[14] The respondent submits that he should have been informed that the Commission intended to avail itself of subsection 43(6) of the Act. He bases his argument on this passage by Décary J.A., at paragraph 18 of the Langelier decision, supra:
What is more, Revenue Canada's refusal to give statements the same legal effect as that desired by a claimant does not in itself lead to the conclusion that there was a false statement. Similarly, a decision which, as in the case at bar, is based on the absence of any proof of payment does not by itself support a conclusion that no payment was made and that it is false to say that there was a payment. When the Commission exercises a separate power conferred on it by s. 43(6), it has a duty to tell the claimant precisely why, for the particular purposes of the exercise it is undertaking under that subsection, the statement seems false.
[Emphasis added]
[15] I do not disagree with this conclusion by my colleague, which is based on a factual situation quite different from ours. In Langelier, the false statement emanated from an employment record issued by a third party, the employer, an employment record that the claimant had appended to his claim for benefit. In the case at bar, the false or misleading statement originates with the respondent himself.
[16] Furthermore, in Langelier the Commission's conclusion and the Board of Referees conclusion were based solely on a decision of non-insurability of employment made by Revenue Canada without the knowledge of the claimant and without his having been questioned by Revenue Canada. In this case, and I will come back to this later, the decisions were based on the statement of the claimant himself, i.e. the respondent, who was questioned at length on the matter.
[17] Before concluding my remarks on the respondent's submissions, I would add that in the Langelier case the decision was based on an absence of proof of payment. The Court held that an absence of proof of payment is not sufficient to enable one to conclude that it was false to state that there had been payment. In the present case, the alleged falseness is of a quite different order. It pertains to the actual statement of the claimant and, need it be recalled, results from the latter's failure to report some income he was getting.
[18] Finally, it should be noted, Décary J.A. is not advocating that a ritual formula be invoked or that the magic figure 43(6) be brandished whenever this provision is invoked. There is more than one way to inform a claimant of the fact that this provision is being invoked. From the moment when the Commission informs a claimant that he has failed to disclose some amounts that he should have declared, when it tells him it is reconsidering his claims for benefit in order to determine and recover the amount of overpayment, and when a period of more than 36 months has elapsed since the time when benefits were paid, it is obvious that the Commission is claiming the benefit of subsection 43(6) of the Act because the Commission's sole authority under the Act to do this in these conditions is found in this subsection.
[19] I am satisfied that when he appealed the Commission's decision to the Board of Referees, the respondent knew and could not help but know that the Commission was, on the one hand, alleging he had made false or misleading statements and, on the other hand, seeking a reconsideration of the benefits beyond the 36-month period in subsection 43(1). Perhaps he was unaware of the existence of subsection 43(6), but ignorance of the law is not an excuse, still less an excuse that bars the other party from exercising a right conferred by law.
Did the Board of Referees consider whether the respondent's statement was false?
[20] The respondent also submits that the issue of the existence or falsity of his statement was not before the Board of Referees and consequently that the Board did not rule on the issue. Instead, its decision was allegedly in reference to subsection 43(1) only.
[21] The record indicates that the Commission, in its argument before the Board of Referees, cited section 43 as authority for reconsidering the respondent's claim for benefit. In its decision, the Board of Referees, referring to facts demonstrated by the Commission's program integrity officer, states that the claimant had not reported any of the amounts received as a result of insurance policy renewals of all kinds. It also specifically referred to section 43 in finding that the Commission could engage in a reconsideration. In any event, subsection 43(1) refers to subsection (6) since it states that the authority conferred in subsection (1) is exercised subject to subsection (6).
[22] In view of this reference, some facts referred to by the Board of Referees and some allegations by the Commission that the respondent had failed to report net income of $19,636.62, it is hard to see how the existence of the false statement was not before the Board of Referees. Given the conclusion reached by the Board of Referees, it seems clear to me that the Board was convinced that the Commission was reasonably satisfied that some false or misleading statements had been made.
[23] In any event, the question was certainly before the Umpire since in the very first lines of his decision he refers to unreported income and later he finds that there is no proof that the false statements were made knowingly. The respondent's argument that the issue was not before the Board of Referees and that the Board did not rule on it is without foundation. This leads me to the respondent's cross-application.
Respondent's cross-application
(a) Interpretation of notion of income and allocation of this income
[24] I am satisfied that the Umpire did not err in his interpretation and application of paragraph 57(2)(a) and subsection 58(6) of the Regulations.
[25] In this context, the respondent argues that the Board of Referees declined to exercise its jurisdiction when it did not allow the respondent to file documentation specifying the periods in which unreported income had been earned. Had he been able to do so, he says, it would have been apparent that the allocation made by the Commission was erroneous and that consequently the amount of the overpayment was less than what it was claiming from him.
[26] I do not think it is accurate to say that the Board of Referees refused to allow the documents to be filed. At page 174 of the Joint Record, we can see that the six points raised by the respondent, including the point about the allocation of the amounts, were filed "[translation] as a document in a bundle". So the dispute is instead over the interpretation by the Board of Referees of these documents and the respondent's testimony. The issue is not a refusal by the Board of Referees to exercise its jurisdiction but whether that jurisdiction was correctly exercised.
[27] The Commission attempted for more than a year and a half to obtain particulars as to the times when the unreported monies were received by the respondent. He did not cooperate with the investigators and took the position that it was impossible for him to be more specific than to state the total amount of the sums received for 1996. Given the position taken by the respondent and his attitude, the Commission had no alternative but to adopt an approach consistent with the respondent's statement, by allocating the amounts reported as annual income over the 52 weeks of the year in dispute. In that way, some amounts were apportioned outside the benefit period by the Commission, which was to the respondent's advantage.
[28] In his testimony before the Board of Referees, the respondent stated that it was verging on the unrealistic for the Commission to ask him for particulars on the breakdown of the amounts received: see Joint Record, page 145. But in the same breath he testified that some amounts that the Commission had included in the benefit period should not have been. However, it is obvious from the transcript of his testimony that the respondent wanted to exclude these amounts because he was still not considering the commissions received in 1996 as earned income since he had done the work in 1984 and since he had not worked for these sums during his period of unemployment: see Joint Record, at pages 162, 169-70.
[29] With respect, I think there was sufficient evidence before the Board of Referees for it to uphold, in the circumstances, the allocation that the Commission made of the sums received by the respondent. This finding of the Board of Referees, which saw and heard the respondent, rested largely on an issue of credibility. The Umpire was right not to intervene on this point, therefore.
(b) Sufficiency of reasons for decision
[30] I also agree with the Umpire that the decision of the Board of Referees, which is drafted in technical language, fulfilled the requirements of subsection 79(2) of the Act. Its conclusions were preceded by and based on a lengthy discussion of the facts pertaining to the absence of any statement of monies received, the legal characterization of such monies and their allocation under the Act.
(c) Breaches of the rules of natural justice
[31] Finally, I am satisfied, from reading the transcript, that the comments by members of the Board of Referees were intended, on the whole, to assist the respondent, who was representing himself, by explaining to him the Act and the Regulations and the understanding they had of them as decision-makers, so as to enable the respondent to more effectively structure and strengthen his arguments. The Umpire was right to conclude that there was no breach of the rules of natural justice.
[32] For these reasons, the application for judicial review will be allowed with costs, the decision of the Umpire will be set aside and the matter will be returned to the Chief Umpire or to an Umpire designated by him for redetermination on the basis that the Commission may rely on subsection 43(6) of the Act to reconsider claims for benefit made by the respondent and that the respondent's appeal from the decision of the Board of Referees dated August 15, 2000, must be dismissed.
"Gilles Létourneau"
J.A.
"I concur
J. Richard C.J."
"I concur
Marc Noël J.A."
Certified true translation
Suzanne Gauthier, C. Tr., LL.L.
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-646-02
STYLE: THE ATTORNEY GENERAL OF CANADA
v. JOCELYN DUSSAULT
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October 2, 2003
REASONS FOR JUDGMENT: LÉTOURNEAU J.A.
CONCURRING: RICHARD C.J.
NOËL J.A.
DATED: October 8, 2003
APPEARANCES:
Carole Bureau FOR THE APPLICANT
Dominique Guimond
Jean-Guy Ouellet FOR THE RESPONDENT
SOLICITORS OF RECORD:
Morris Rosenberg FOR THE APPLICANT
Deputy Attorney General of Canada
Montréal, Quebec
Ouellet, Nadon & Associés FOR THE RESPONDENT
Montréal, Quebec