Federal Court Decision #A-701-96 - THE ATTORNEY GENERAL OF CANADA v. ALLEN, STARK

JUDGMENT OF THE FEDERAL COURT OF APPEAL

Date:
May 7, 1997

Docket:
A-701-96

Umpire's Decision:
CUB 34478

CORAM:

THE CHIEF JUSTICE
STONE J.A.
McDONALD J.A.

IN THE MATTER OF AN Application under
Section 28 of the Federal Court Act

AND IN THE MATTER of a Decision of the Tax Court of Canada
made pursuant to the provisions of the Unemployment Insurance Act

BETWEEN:

THE ATTORNEY GENERAL OF CANADA,

applicant,

- and -

ALLEN STARK,

respondent.

Heard at Halifax, Nova Scotia, on Tuesday, May 6, 1997

REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench, at Halifax, Nova Scotia,
on Wednesday, May 7, 1997)

STONE J.A.:

The applicant seeks the review and setting aside of a decision of an Umpire, who determined on the record before him to reduce the amount of penalty that had been imposed pursuant to subsection 33(1) of the Unemployment Insurance Act (the "Act"), on the ground that the Commission had not taken into consideration that the amount of penalty was greater than the amount of the penalty imposed on the respondent's employer pursuant to subsection 33(2) of the Act, and that payment of the amount imposed would create hardship for the respondent.

The application was heard together with applications for judicial review in Court file Nos. A-695-96, A-696-96, A-697-96, A-698-96, A-699-96, A-700-96, A-702-96, A-703-96, A-704-96 and A-705-96. A copy of these reasons for judgment shall be filed in each of those matters and upon filing shall become reasons for judgment therein.

There is no dispute with respect to the facts out of which the penalty was imposed. Stated briefly, they are that the respondent in this matter, and in the other matters, participated in a fraudulent scheme by which he was able to collect benefits in excess of those to which he was truly entitled. Not being satisfied with the penalty, the respondent appealed to the Board of Referees on the ground that no penalty should have been imposed. The main objective of the appeal, however, was to seek a reduction in the amount of penalty. The appeal was dismissed. In a postscript, the Board of Referees added:

The Board recommends however that given the financial hardship expressed by the claimant that a more lenient penalty should be considered by the Commission.

When the Commission refused to reduce the amount of penalty, the respondent appealed to the Umpire who decided that the penalty had been properly imposed but that it was too severe in that the Commission had not taken into account "mitigating factors" including, particularly, the two referred to at the outset of these reasons.

It appears that the Board of Referees did not itself reduce the amount of penalty because, in the argument as presented, it lacked any authority to do so. The law is now clear from subsequent decisions of this Court that a Board of Referees does possess authority to vary a penalty in exceptional circumstances. (Re Morin v. Canada (Employment and Immigration Commission) (1996), 134 D.L.R. (4th) 724 (F.C.A.); Attorney General of Canada v. Dunham, [1996] F.C.J. No. 1271 (F.C.A.); Mucciarone v. Employment and Immigration Commission of Canada, [1997] F.C.J. No. 89 (F.C.A.).

We are all of the view that this application must succeed. As the Board of Referees did not decide either to reduce the amount of the penalty as imposed or to let that amount stand, there was simply no "decision or order" that could be reviewed by the Umpire as there needed to be for the Umpire to have jurisdiction to intervene under section 80 of the Act. On the other hand, having regard to the jurisprudence already referred to, it is evident that the jurisdiction which the Board of Referees possesses was not exercised. The matter should therefore be returned to the Umpire with the direction that it be remitted to the Board of Referees for determination of whether or not the amount of penalty imposed should be varied or allowed to stand.

The section 28 application will be allowed, the decision of the Umpire set aside and the matter referred back to the Chief Umpire or to an umpire designated by him for remitting back to the Board of Referees for determination of whether the amount of penalty imposed by the Commission should be varied or be allowed to stand.

"A.J. STONE"

J.A.