Date: 20041019
Docket: A-52-04
Citation: 2004 FCA 351
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
MICHEL GAGNON
Respondent
Hearing held at Montréal, Quebec, October 19, 2004.
Judgment delivered from the bench at Montréal, Quebec, October 19, 2004.
REASONS FOR JUDGMENT OF THE COURT LÉTOURNEAU J.A.
Date: 20041019
Docket: A-52-04
Citation: 2004 FCA 351
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
MICHEL GAGNON
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Montréal, Quebec, October 19, 2004)
LÉTOURNEAU J.A.
[1] We are of the opinion that the umpire erred when he intervened to set aside the decision of the Board of Referees, thereby reducing to $200.00 a 50% penalty ($1,420.00) imposed by the Commission on the claimant for the 10 misrepresentations he had made. The essence of the umpire's decision is found in the two following paragraphs, at page 6 of his decision:
[translation]
I conclude, however, that the Board failed to consider the way in which the Commission exercised its discretion, that is, whether all of the relevant factors or some irrelevant factors had been considered by the Commission in determining the penalty. In this regard, I am of the opinion that the Commission erred by basing its decision on a faulty premise. Absent exceptional circumstances, the Commission could not commence its assessment exercise in the circumstances with a fundamental premise that the penalty should be set at 100% of the value of the misrepresentations.
Considering the social role of the Employment Insurance Act, the Commission must ensure that imposition of a penalty, while fulfilling the objective of punishment and deterrence, reflects the socio-economic reality of the claimant. In this case, the Commission's decision was clearly much more focussed toward applying an internal policy than toward imposing a penalty based on the punishment and deterrence objective, which takes account of the particular circumstances of the claimant in question, and this seems to have been the underlying principle of the Board's decision.
[2] As this Court said in Canada (Attorney General) v. Hudon, [2004] FCA 22, applying Canada (Attorney General) v. Rumbolt, [2000] F.C.J. No. 1968 and Canada (Attorney General) v. Lai, [1998] F.C.J. No. 1016, the umpire unjustly criticized the Commission for referring to its own guidelines on the imposition of penalties, in order to guarantee some consistency nationally and avoid arbitrariness in such matters.
[3] The Digest of Benefit Entitlement Principles, Chapter 18 - False or Misleading Statements, which contains these guidelines, goes to some lengths to tell the employment insurance agents that the penalty amounts, 100%, 200% or 300% of the claimant's weekly benefit, should not be applied mechanically. On the contrary, it is stated that the Commission must exercise its discretion and consider the particular circumstances of each claimant: see Canada (Attorney General) v. Schembri, [2003] FCA 463, at paragraph 10, where this Court quotes the following extract from the Digest:
Finally, it cannot be overemphasized that all extenuating circumstances must be fully documented on the file. This information is essential for providing explanations to the claimant and, especially, for the purposes of an appeal. Although the Commission has the discretion to impose a penalty, it still has to demonstrate that it properly exercised its discretion in light of all relevant considerations.
[4] One may also read this passage, which is relevant to the exercise of the Commission's discretion, at paragraph 18.5.2.1 (Penalty Amounts-Claimants) of this Digest:
Care should be taken not to mechanically apply these percentages. They may be appropriate if no explanation is given for the offence but any mitigating circumstances that are provided by the claimant or that are evident on the file must be taken into consideration. All factors existing before or at the time a penalty is imposed that may affect its appropriateness are relevant to determining its amount. In such circumstances the penalty rate will be lower than the ceilings.
The fixed levels of 100%, 200% and 300% will of course have to be respected for first offences and repeat offences, but where mitigating circumstances are present, agents will not be limited by the amount of the overpayment. Depending on the particular circumstances of each case, the amount of the penalty may be less than the overpayment.
[5] In the case at bar, the Commission had already reduced by 50% the penalty that was normally applicable in such cases to reflect the financial situation of the claimant and some mitigating circumstances. Surprisingly, the Board of Referees allowed the claimant's appeal and reduced the penalty to $200.00 on the ground that the claimant had made these misrepresentations in order to [translation] "improve his quality of life": see page 78 of the Applicant's Record. There was no new fact to warrant the intervention of the Board of Referees, as there must be, and the Board could not substitute its opinion for that of the Commission: see Canada (Attorney General v. Hudon), supra, at paragraphs 2 and 3. Faced with this unwarranted intervention by the Board of Referees, the umpire should have allowed the appeal by the Commission and restored the penalty that it had imposed.
[6] For these reasons, the application for judicial review will be allowed, the decision of the umpire set aside and the matter returned to the Chief Umpire, or the umpire he designates, for redetermination on the basis that the Commission's appeal to the Umpire should be allowed and the penalty imposed by the Commission re-established.
[7] In the circumstances, and since the respondent did not dispute the application for judicial review, the application will be allowed without costs.
"Gilles Létourneau"
J.A.
Certified true translation
Suzanne M. Gauthier, C.Tr., LL.L.
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-52-04
STYLE: THE ATTORNEY GENERAL OF CANADA
Applicant
and
MICHEL GAGNON
Respondent
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: October 19, 2004
REASONS FOR JUDGMENT
OF THE COURT: DÉCARY, LÉTOURNEAU, NADON, JJ.A.
DELIVERED FROM THE
BENCH BY: LÉTOURNEAU J.A.
APPEARANCES:
Pauline Leroux FOR THE APPLICANT
Michel Gagnon FOR HIMSELF (RESPONDENT)
SOLICITORS OF RECORD:
Morris Rosenberg FOR THE APPLICANT
Deputy Attorney General
of Canada
Montréal, Quebec
Michel Gagnon FOR HIMSELF (RESPONDENT)
Montréal-Nord, Quebec
Date: 20041019
Docket: A-52-04
Montréal, Quebec, October 19, 2004
CORAM: DÉCARY J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
MICHEL GAGNON
Respondent
JUDGMENT
The application for judicial review will be allowed, the decision of the umpire set aside and the matter returned to the Chief Umpire, or the umpire he designates, for redetermination on the basis that the Commission's appeal to the Umpire should be allowed and the penalty imposed by the Commission re-established.
Without costs.
"Robert Décary"
J.A.
Certified true translation
Suzanne M. Gauthier, C.Tr., LL.L.