Seizing wages

EIC entitled to recover overpayment from former claimant after 36-month deadline

Réjean Plante applied for and received unemployment insurance benefits beginning December 1985. On Sept. 30, 1986, the Employment and Immigration Commission initiated an investigation of Mr. Plante.

As a result of this investigation, the commission sent a notice of refusal on Jan. 21, 1988, to Mr. Plante which made him ineligible for benefits as of Jan. 12, 1986, on the ground that he had not proved he was unemployed within the meaning of the Unemployment Insurance Act. The commission considered that Mr. Plante was operating a business for himself and was deemed to be working for a full week.

At that time Mr. Plante also received a notice of an overpayment of unemployment insurance benefits in the amount of $11,328, with a reimbursement obligation commencing Jan. 21, 1988.

In January 1988 the commission made a decision to initiate a prosecution under the Act since it had been established that Mr. Plante had knowingly made a false or misleading statement when he indicated on his report cards that he had not worked during the periods for which he was claiming benefits, contrary to section 47 of the Act. The prosecution was not initiated until May 1991.

On Feb. 23, 1988, Mr. Plante filed an appeal with the board of referees against the commission’s decision regarding his unemployment and his availability for work. The board of referees dismissed the appeal on March 25, 1988. On May 26, 1988, Mr. Plante filed an appeal with the umpire. The umpire dismissed his appeal on Jan. 16, 1991.

On May 14, 1991, the commission initiated the prosecution to which Mr. Plante pleaded not guilty. On Jan. 21, 1992, Mr. Plante was acquitted of the charges against him.

On Nov. 15, 1991, the commission sent a notice of seizure pursuant to the Act. The commission seized Mr. Plante’s salary as of Dec. 11, 1991. The seizure was temporarily released from February until July 1992 and the overpayment amount had been fully recovered from Mr. Plante’s employer by Nov. 12, 1993.

Mr. Plante brought an action in the Federal Court of Canada for a declaratory judgment, asking the Court to declare illegal the seizure from third parties carried out by the commission and that the money seized by the commission be reimbursed.

The first issue before the Court was whether the seizure occurred within the prescribed time under the Act. The Act provides that in the case of an overpayment, it must be recovered within 36 months from the date on which the liability arose. However, this time is extended to 72 months if the commission is of the opinion that an offence under section 47 of the Act had been committed.

To succeed, the commission must first prove that it commenced its overpayment proceeding prior to the expiration of the 72nd month following the date on which the debt originated. In this case both parties acknowledged that the seizure commenced more than 36 months after the date on which the debt became owing and was completed before the expiration of the 72nd month.

The commission must then establish that it properly considered the question of whether Mr. Plante subjectively knew that the statements he was making, namely that he was not working, were false and misleading.

In answering this question, the commission must assess the evidence and draw its conclusions on the facts and credibility of the claimant, Mr. Plante.

The Court, having heard evidence from the investigator and having reviewed the investigation file, held that the commission properly assessed the evidence in the record and validly concluded that Mr. Plante was not very credible and intended to use the unemployment insurance benefits to finance the first weeks of operation of his business and to provide income. Mr. Plante made statements to the commission which he could not prove and which he knew were false and misleading.

Finally the Court must be satisfied that the opinion of the commission is still justified in light of what was established at trial. Having heard the evidence of Mr. Plante, the Court held that, on a balance of probabilities, the commission had justified its opinion that Mr. Plante had knowingly made the false statements in question. Mr. Plante’s testimony was given very little credibility because it proved to be vague and full of contradictions with past statements.

With the commission having established that the seizure occurred within the prescribed time, the Court then considered the second issue, which was the possible impact on the commission of the fact that it did not initiate criminal prosecution until May 1991 and the subsequent acquittal of Mr. Plante.

The Court held that Mr. Plante could not derive any advantage from these two situations. The commission delayed initiating the prosecution until Mr. Plante had exhausted his appeals, and in any event, the seizure still occurred within the 72-month period prescribed by the Act.

Mr. Plante argued that the acquittal should have the effect of correcting the commission’s opinion that he had knowingly made false statements. The Court did not accept this because the opinion of the commission was formed prior to the acquittal and the acquittal was essentially the result of a technicality.

The Court denied the declaratory relief sought by Mr. Plante.

For more information:

Plante c. R., Federal Trial Division, Docket No. T-2986-92, June 6/01.

Latest stories