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EI - Fraud. Molchan v. Canada (Attorney General)
In Molchan v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal considered an interesting case of acknowledged 'administrative misinformation', here in an EI context where the recipient switched from sickness to regular benefits despite not being able to work yet:(3) False statements
[29] Ms. Molchan also submits that the Appeal Division could not reasonably find that she gave false information when she specifically reported what she was told to report.
[30] The Appeal Division accepted Ms. Molchan’s submission that she was following the advice she received from the Commission’s agents. However, it found that the statements made in the biweekly reports were nonetheless inaccurate (AD Decision at para. 84). The Appeal Division noted that a decision about capability and availability is not a onetime decision binding for the life of the benefit period and added that claimants must prove they are capable of and available for work for every working day in the benefit period (AD Decision at para. 85).
[31] In my view, the Appeal Division’s reasoning is both factually reasonable and consistent with paragraph 18(1)(a) of the EIA and the relevant case law. Although her biweekly reports indicated the contrary, Ms. Molchan admitted that she was not capable of and available for work during the period she collected regular EI benefits.
[32] That said, the Appeal Division nonetheless considered whether it should refrain from applying the Commission’s reconsideration policy given that Ms. Molchan was directed by the Commission to make the false statements (AD Decision at para. 113). Relying on the decision of this Court in Canada (Attorney General) v. Buors, 2002 FCA 372, the Appeal Division held that Ms. Molchan could not rely on the Commission’s misinformation to avoid an overpayment.
[33] While Ms. Molchan may not agree with the Appeal Division’s interpretation of the Commission’s authority to reconsider her claim, she has not persuaded me that the Appeal Division’s findings are unreasonable.
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[35] Nonetheless, Ms. Molchan argues that the Appeal Division misconstrued this Court’s decision in Buors. She also contends that the Appeal Division unreasonably determined that financial hardship and delay were not relevant factors to the Commission’s exercise of discretion to retroactively reconsider the claim. Finally, she is of the view that the Appeal Division unreasonably concluded that her claim should be retroactively reconsidered in all of the circumstances.
[36] Ms. Molchan’s arguments must fail.
[37] First, the Appeal Division reasonably applied this Court’s decision in Buors to find that Ms. Molchan could not rely on the Commission’s misinformation to avoid the application of the Commission’s reconsideration policy.
[38] Ms. Molchan had argued that her situation was distinguishable from the situation in Buors because that case involved a decision about a benefit rate, which rate was set by law and went to the structure of the EIA. The Appeal Division disagreed, finding instead that the decision in Buors was about the allocation of unreported earnings, which did not run contrary to the structure of the EIA, as defined by the Commission. The Appeal Division found that, in both cases, the overpayments had arisen due to misinformation about how to complete the reports. As a result, it felt bound by the direction of this Court in Buors (AD Decision at paras. 119-122).
[39] I find that the Appeal Division’s findings are consistent with this Court’s decision in Buors, which followed the majority decision in Granger v. Canada Employment and Immigration Commission, 1986 CanLII 7610 (FCA), [1986] 3 F.C. 70, 29 D.L.R. (4th) 501 (F.C.A.) (Granger), later upheld by the Supreme Court of Canada in Granger v. Canada (Canada Employment and Immigration Commission), 1989 CanLII 111 (SCC), [1989] 1 S.C.R. 141. This Court held in Granger that "“the Commission and its representatives have no power to amend the law, and … therefore the interpretations which they may give of that law do not themselves have the force of law. … any commitment which [they] may give, whether in good or bad faith, to act in a way other than that prescribed by the law would be absolutely void and contrary to public order”" (Granger at 77). The Appeal Division’s findings are also consistent with this Court’s decision in Paxton v. Canada (Attorney General), 2002 FCA 360 at paragraphs 14-15. The Appeal Division could not ignore this relevant case law.
[40] Second, I am satisfied that the Appeal Division’s treatment of financial hardship and delay was reasonable.
[41] After deciding to substitute its decision for that of the General Division, the Appeal Division examined which factors are relevant to the Commission’s exercise of discretion to reconsider a claim. It began by noting that the EIA is silent on what factors are relevant to the exercise of discretion under section 52 of the EIA, but indicated that another decision of the Appeal Division, M.S. v. Canada Employment Insurance Commission, 2022 SST 933, had previously examined the issue in detail. The Appeal Division observed that in M.S., another member had found that factors that help resolve the tension between claimants’ ability to rely on the finality of decisions and the Commission’s interest in their accuracy are relevant to the exercise of discretion. The member had determined that the factors set out in the Commission’s reconsideration policy address this tension and are therefore relevant. However, it had added that, while the Commission should consider the factors in the policy, it is not necessarily bound to apply them (AD Decision at paras. 43-48).
[42] The Appeal Division agreed with the reasoning in M.S. and applied it to Ms. Molchan’s situation. It added that there may be additional relevant factors aside from those listed in the policy, but specified that relevant factors are those that relate to finality and accuracy (AD Decision at para. 49).
[43] Applying these principles, the Appeal Division agreed with Ms. Molchan that, in exercising its discretion to reconsider the claim, the Commission had overlooked certain factors that the Commission’s reconsideration policy identifies as relevant. Specifically, it noted that the Commission had failed to consider the impact of the Commission’s error on Ms. Molchan as well as the absence of fault on Ms. Molchan’s part. The Appeal Division also found that the Commission had failed to take into account a factor which relates to the finality of the decision, namely that Ms. Molchan’s reliance on the initial mistaken decision had led her not to pursue other possible pandemic-related benefits (AD Decision at paras. 97-100). Likewise, the Appeal Division noted that the Commission had not considered Ms. Molchan’s honesty in dealing with the Commission (AD Decision at para. 103).
[44] However, the Appeal Division disagreed with Ms. Molchan on the relevance of other factors. Ms. Molchan had argued that the Commission’s delay in addressing her entitlement had created a large debt and put her in a difficult financial situation in having to repay it. The Appeal Division found that the argument of delay was not relevant, as the Commission had acted within the statutory period (AD Decision at para. 102). The Appeal Division further found irrelevant that the Commission had not considered Ms. Molchan’s financial hardship. The Appeal Division observed that financial hardship does not go directly to either of the factors of finality or accuracy; rather it is meant to be taken into account in the context of the write-off procedure provided in the legislation, in particular at subparagraph 56(1)(f)(ii) of the Employment Insurance Regulations, S.O.R./96-332 (AD Decision at para. 102). In the end, the Appeal Division concluded that the Commission had not exercised its discretion judicially when it failed to consider all relevant factors (AD Decision at para. 104).
[45] Having reached this conclusion, the Appeal Division then proceeded to give the decision the General Division should have given and considered whether discretion should be exercised to reconsider the claim. After noting several factors arguing against reconsideration, the Appeal Division found that Ms. Molchan’s false statements, albeit made innocently, were pivotal to the Commission’s assessment of her availability for work. Had she accurately declared that she was not capable of work, the Commission could have corrected its initial error and Ms. Molchan would have stopped receiving benefits. Despite noting that the Commission’s reconsideration policy lists false statements as a ground for reconsideration, the Appeal Division nonetheless considered whether the policy should be applied given that Ms. Molchan was directed to make false statements by the Commission. The Appeal Division felt bound by this Court’s decision in Buors and determined that the claim was to be reconsidered, meaning that the overpayment remained. . Puig v. Canada (Attorney General)
In Puig v. Canada (Attorney General) (Fed CA, 2024) the Federal Court of Appeal dismisses a judicial review of "a decision of the Appeal Division of the Social Security Tribunal" regarding EI.
Here the court considers the effect of administrative 'misinformation' on a recipient's eligibility:[38] Regarding Mr. Puig’s third argument, this Court found in Canada (Attorney General) v. Buors, 2002 FCA 372 and in Granger v. Canada Employment and Immigration Commission, 1986 CanLII 7610 (FCA), [1986] 3 F.C. 70, 29 D.L.R. (4th) 501 (F.C.A.) (Granger), later upheld by the Supreme Court of Canada in Granger v. Canada (Canada Employment and Immigration Commission), 1989 CanLII 111 (SCC), [1989] 1 S.C.R. 141, that a claimant cannot rely on misinformation from the Commission or its representatives that is contrary to what is prescribed by law. I dismiss a similar argument in Molchan at paragraphs 37-39. ...
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