EMPLOYMENT INSURANCE |
Canada (Attorney General) v. Schembri
A-578-02
2003 FCA 463, Evans, Rothstein J.J.A.
4/12/03
16 pp.
Judicial review of Umpire's decision reducing penalty imposed by Canada Employment Insurance Commission (Commission) for knowingly misrepresenting earnings-- Umpire allowed appeal from Board of Referees' (Board) decision exonerating respondent from any penalty because suffering from gambling addiction--Umpire correct in holding Board erred in law in holding financial difficulties exonerated respondent from any penalty for knowingly misrepresenting his income--Application raises both substantive and remedial issue--Substantive issue whether Umpire erred in law when analogized with criminal law-- Counsel for applicant conceded claimant's financial circumstances when penalty assessed relevant to exercise of discretion to impose appropriate penalty--Pursuant to Employment Insurance Act, s. 41, on reconsideration request, claimant may ask Commission to reduce penalty on ground of financial hardship--Employment Insurance Regulations, s. 56(1)(f)(ii) provides third opportunity for claimant to raise financial hardship--Provision expressly empowers Commission to write off penalty because payment would cause hardship--Commission not obliged to initiate own inquiries into person's financial circumstances--First, criminal law principles not to be imported wholesale into exercise of Commission's power to impose administrative penalties--Second, claimants have ample opportunities to request reduction of penalty on ground of financial hardship at various stages of process--However, when claimant raises financial hardship with Commission, it must be considered by decision-maker--In summary, Umpire erred in determining Commission made error in failing to undertake inquiry into whether it would cause undue hardship to require respondent to pay fine--Remedial issue regarding roles of Commission, Board and Umpire in determining appropriate penalty for those having knowingly made misrepresentations in order to obtain benefits--Whether Umpire entitled to reduce penalty imposed by Commission from 75% to 10%--Marceau J.A. in, Canada (Attorney General) v. Dunham, [1997] 1 F.C. 462 (C.A.), clarified legal principles governing roles of Commission, Board and Umpire--Commission's discretion must be exercised in good faith and having regard to all relevant factors--Task of both Board and Umpire to intervene and give decision that should have been given if Commission's decision not one that should have been given-- From these principles derived two propositions: (1) Commission's exercise of discretion not immune from appellate review by Board; (2) Board not at liberty to substitute its view of appropriate penalty for that of Commission, unless Board finds Commission had failed to take into account relevant consideration or presumably, had committed any of other errors in exercise of discretion--In present case, Umpire would only have been warranted in reducing penalty on ground of financial hardship if this factor raised by respondent before either Commission or Board, and they had failed to take it into consideration--No evidence respondent asked Commission to have regard to his inability to pay penalty imposed by Commission--Since Umpire expressed view Commission under positive obligation to inquire into claimant's ability to pay penalty, he must have inferred respondent had not adequately brought financial situation to Commission's attention and requested reduction in penalty--Record lacks evidence respondent submitted to Board financial hardship ground if he had to pay Commission's penalty--Since Board had no power to reduce penalty on basis of material before it, Umpire could not reduce Commission's penalty by virtue of Umpire's power to award remedy Board should have awarded--Judicial review allowed--Per Rothstein J.A. (concurring)--Commission not obliged to initiate inquiry into person's financial circumstan-ces before imposing penalty--Sometimes, obvious financial hardship has been raised--Before Commission, it was not necessary for Commission to use term "financial difficulty" in interview notes or in decision in order to prove that it considered the issue--Before Board, contrary to findings of Evans J.A., respondent did raise issue of financial hardship--Respondent raised financial difficulties before Commission and accordingly, Commission responded by reducing penalty--Although respondent raised issue before Board, matter already considered by Commission in assessing penalty--In absence of legal error, Board may not substitute view of appropriate penalty for that of Commission--No legal error has been shown and no new evidence submitted-- Therefore, Board erred in interfering with Commission's assessment--Umpire correct to allow appeal--However, Umpire erred in reducing 75% penalty to 10%--Judicial review allowed--Employment Insurance Act, S.C. 1996, c. 23, s. 41--Employment Insurance Regulations, SOR/96-332, s. 56(1)(f)(ii).