The Federal Court of Appeal reinforced that absurd results must be avoided when interpreting legislation

Administrative law – Decisions reviewed – Workers Compensation Boards – Compliance with legislation [Interpretation] – Judicial review – Appeals and leave to appeal – Standard of review – Reasonableness – Workers compensation – Pensions – Eligibility

Canada (Attorney General) v. Burke, [2022] F.C.J. No. 321, 2022 FCA 44, Federal Court of Appeal, March 15, 2022, M.J.L. Gleason, A.L. Mactavish and K.A. Sioban Monaghan JJ.A.

The respondent, Ms. Mariana Burke collected old age security benefits for many years. Contrary to the Old Age Security Act, RSC 1985 c. O-9 (the “Act”), she lived in the United States. She did not disclose this fact.

The Appeal Division of the Social Security Tribunal of Canada (the “SST”) found that the Minister of Employment and Social Development could not revisit the original decision to give Ms. Burke benefits. They could only reassess her entitlement to benefits going forward. She could keep the benefits she had received while living in the US. The Minister sought judicial review of the Appeal Divisions’ decision and asserted that it erred in its interpretation of the relevant legislation.

Ms. Burke became a Canadian citizen in 1991 and resided in Canada from 1986 to 1992 with her husband. Ms. Burke maintained that she continued to be a Canadian resident until 2014; however, the General Division of the SST found that Ms. Burke stopped residing in Canada in 1992 and became a permanent resident of the United States that year. In 1999 Ms. Burke became a naturalized US citizen.

In June 1997, Ms. Burke’s application for old age security spousal allowance was approved, retroactive to July 1996. In her application Ms. Burke stated that she resided in Canada and made no note of her living in the US or that she was a permanent resident there. A partial allowance was approved.

In June 2000, Ms. Burke applied for an old age security pension benefit, stating in her application that she had not been outside of Canada for more than six months in the past five years. The application was approved, and she was granted a partial pension based on her having resided in Canada for 15 years between 1986 and 2001. She also began receiving guaranteed income supplement in July 2001.

In 2013, two old age security forms addressed to Ms. Burke from the Minister were returned as “undeliverable” which caused the Minister to initiate an investigation into Ms. Burke’s residency and entitlement to benefits pursuant to the Old Age Security Regulations, CRC c 1246 (the “Regulations”). The investigation revealed that Ms. Burke had been absent from Canada for long periods and that she had applied in 1996 for US naturalization. Ms. Burke’s benefits were suspended. In October 2015, the Minister determined Ms. Burke had stopped residing in Canada in January 1992 and she was not entitled to any benefits she had received. Ms. Burke was asked to repay the benefits she had improperly received between July 1996 and September 2013 pursuant to the Act.

Ms. Burke requested a reconsideration of the Minister’s decision, which was dismissed. She then appealed the Minister’s decision to the General Division of the SST. The appeal was allowed in part, but the decision was set aside by the Appeal Division of the SST on procedural fairness grounds, and the matter was referred back to the General Division for redetermination.

On redetermination, the General Division found that Ms. Burke did not meet the residency requirements for spousal allowance that she had been receiving as of July 1996. They did find that she had been entitled to receive spousal allowance benefits from July 1996 to July 2001 when her application for old age pension was approved. The General Division found this as there was no express provision in the Act or the Regulations that gave the Minister the authority to reassess an initial eligibility decision. They could reassess Ms. Burke’s eligibility for benefits going forward. Because Ms. Burke had not been eligible for pension benefits as of August 2001, the General Division found the Minister could recover benefits that were paid out from August 2001 to September 2013 when the benefits payments had been suspended.

The Minister granted leave to appeal the General Division’s decision. It is the Appeal Division’s January 15, 2021 decision that dismissed the Minister’s appeal that formed the grounds of the application for judicial review. The Appeal Division found that the General Division erred in law by concluding that the Minister did not have the power to reassess initial eligibility decisions.

The issues in the application for judicial review were the applicable standard of review and whether it was reasonable for the appeal division to find that the Regulations and the Act precluded the Minister from reassessing initial eligibility decisions to approving old age security benefits in order to recover over payments.

The standard of review was found to be reasonableness. Under the legislation, the Appeal Division found that the legislation did not allow a person who is reassessed and then found to be ineligible and never entitled to benefits in the first place to repay all benefits received.

Unlike other benefits-conferring legislation, there is no provision in the Act or Regulations that gives the Minister authority to alter initial eligibility decisions. In order to determine the meaning of the legislation, the Court looked at the purpose of the Act and found that it was to provide income support to senior residents of Canada in recognizing their contributions to Canada. The amount of pension is based upon the number of years the person has resided in Canada.

It was found that the Appeal Division read a temporal limitation into the Minister’s investigatory power that did not appear in the original text of the Act. The Appeal Division had justified its inconsistent interpretation of the legislation on the basis that the old age security scheme was broader than providing benefits solely to people who met the eligibility requirements of residency in Canada.

It was found that an interpretation of the legislation that would allow Ms. Burke to keep benefits she had received when she was not eligible for them produced an absurd result that was contrary to the purpose of the legislation.

Because the matter had been through the General Division and Appeal Division on two separate occasions, it was determined that it would be appropriate for the Court to determine the matter and not remit it to the administrative decision maker. Factors in support of this decision included that the facts were not in dispute, Ms. Burke’s age and health, and the inevitability of the outcome.

The application for judicial review was granted and the decision of the General Division was Granted. Ms. Burke was held to be ineligible to receive benefits under the Act from the time that the benefits were awarded to her on June 2, 1997 up until September 2013, when the payment of benefits was suspended.

It was held that the Appeal Division erred in its statutory interpretation analysis and the decision was not reasonable. The minister’s application for judicial review was granted.

This case was digested by Deanna C. Froese, and first published in the LexisNexis® Harper Grey Administrative Law Netletter and the Harper Grey Administrative Law Newsletter.  If you would like to discuss this case further, please contact Deanna C. Froese at [email protected].

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