CUB 50250

IN THE MATTER of an appeal by the
Claimant to an Umpire from a decision by the Board of Referees given
at Edmonton, Alberta, on March 16th, 2000.

DECISION

This appeal was launched by the claimant. The issue involves the allocation of earnings undeclared by the claimant for the employment period of April 30, 1995 to October 14, 1995.

The claimant filed an application for maternity and parental benefits on May 11, 1995 and an initial claim was established effective April 30, 1995.

Because the benefit period of the claimant was established before the coming into force of the Employment Insurance Act the provisions of the Unemployment Insurance Act (U.I. Act) is applicable to the issuing in this appeal. Claimant contends that the Board of Referees erred in law.

The Employment Insurance Commission, through an investigative procedure, became aware of the fact that the claimant filed an income tax return for the taxation year 1995 in which she reported business income.

The claimant's husband is engaged in a farming operation in which the claimant performs some duties. She does chores, keeps the farm books and attends to the payment of the farm expenses. The income reported by the claimant was assigned to her, for the year 1995, through the process income splitting recommended by their accountant for the purpose of minimizing their tax liability. The claimant explained that the benefits she received were not considered at the time because they overlooked any connection between benefits and splitting income.

The Commission gave claimant notice that her claim for benefits was under reconsideration on November 25, 1995. The claimant during her oral presentation challenged the Commission's right to reconsider her claim for benefits because the limitation period of thirty-six months for reconsideration has expired. She made reference to the Employment Insurance Act, subsection 52(l). The corresponding provision in the Unemployment Insurance Act which applies is subsection 43(1) which provides:

"Notwithstanding section 86 but subject to subsection (6), the Commission may at any time within thirty-six months after benefit has been paid or would have been payable reconsider any claim made in respect thereof and if the Commission decides that a person has received money by way of benefit thereunder for which he was not qualified or to which he was not entitled or has not received money for which he was qualified and to which he was entitled, the Commission shall calculate the amount that was so received or payable, as the case may be, and notify the claimant of its decision."

Counsel for the Commission contends that because claimant made a false or misleading statement the Commission may reconsider claimant's claim within a seventy-two month period. The provision upon which the Commission relies is subsection 43(6) which reads as follows:

"(6) Where, in the opinion of the Commission, a false or misleading statement or representation has been made in connection with a claim, the Commission has seventy-two months within which to reconsider the claim under subsection (1)."

The dominant provision dealing with false and misleading statements is section 33 of which ss (1) is relevant to this issue:

"Where the Commission becomes aware of facts that in its opinion establish that a claimant or any person on the claimant's behalf has, in relation to a claim for benefit, made statements or representations that the claimant or person knew to be false or misleading or, being required under this Act or the regulations to furnish information, furnished information or made statements or representations that the claimant or person knew to be false or misleading, the Commission may impose on the claimant a penalty in respect of each false or misleading statement, representation or piece of information, but the penalty shall be not greater than an amount equal to three times the claimant's weekly rate of benefit."

"A penalty provided under subsection (1) or (2) shall not be imposed after thirty-six months from the date on which the false or misleading statement, representation or piece of information was made or furnished."

Subsection 43(1) of 43(6) applies if 43(b) applies then the issue of allocation becomes an issue for resolution.

I have examined the reasons for judgment delivered by Mr. Justice Pinard in Courty v. C.E.I.C. 16 F.T.R. 36 where an issue arose in respect of the time limit for reconsideration of a claim. The corresponding provision of the Act in force in Courty to Unemployment Insurance Act sections 43(1) and 43(6) was numbered 49(4). It states:

"49(4) No amount due as a debt to Her Majesty under this section may be recovered after thirty-six months from the date on which the liability arose unless in the opinion of the Commission an offence under subsection (1) of section 47 has been committed in connection therewith in which case no such amount may be recovered after seventy-two months from the date on which the liability arose."

It will be observed that 49(4) refers specifically to the commission of an offence under subsection (I) of section 47. Without reproducing that provision it suffices to say that it is, with a minor irrelevant exception, the same as subsection 33(1). The offense referred to therein is a false or misleading statement or representation which claimant knew to be false. The words "knew to be false" are not employed in subsection 43(6) of the Unemployment Insurance Act. It simply provides that the seventy-two month limit applies if "a false or misleading statement or representation has been made in connection with a claim -- ".

Despite the change in language, between subsection 49(4) and subsection 43(6) I identify the language in the latter subsection with an offense according to the provisions of subsection 33(1). That is to say there is still an onus, despite the change in wording, to establish that the false or misleading statement was made knowingly. The Commission cannot arbitrarily determine that a false or misleading statement was made without making that allegation supported by a penalty. This would then give the claimant an opportunity to challenge the allegation. As the period of thirty-six months expired from the date of notice of reconsideration a penalty cannot be imposed. I adopt the reasoning of Pinard, J. wherein he said:

"If the respondent was actually of the opinion that an offence mentioned in s. 47(1) had been committed, it should have imposed a penalty on the applicant. In this way the latter would have been given an opportunity to force the Commission to show that the false or misleading statement or representation was made knowingly. In the case at bar no penalty was imposed and as over thirty-six months have elapsed since the alleged statement or representation, such a penalty can no longer be imposed by the respondent."

The case of Martel v. C.E.I C. was reported some two years plus after publication of the decision in the Courty case and Denault, J. referred to the Courty case. His reasoning in favour of a claimant on a similar issue parallels that of Pinard, J. in Courty.

I conclude, therefore, that the limitation period of thirty-six months applies and that the Commission is barred from reconsideration of claimant's claim due to the elapse of time.

It is unfortunate that this issue was not raised for consideration before the Board of Referees. I have given the decision the Board should have given in that event.