Date: 20010227
Docket: T-1013-99
Neutral Citation: 2001 FCT 124
BETWEEN:
DONALD G. VOGAN
Applicant
- and -
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
DAWSON J.
[1] In October of 1996 Donald Vogan, retired from the Royal Canadian Mounted Police ("RCMP") and receiving pension benefits as a result of just over twenty three years of service with the force, was the recipient of a letter bringing unexpected, but good, news from André Charbonneau, Chief, RCMP Pension Section. That letter stated, in part:
| As a result of an audit on your pension file, an error was discovered in the percentage of your reduction as calculated. Originally, a penalty of 10% was applied to your pension, since you did not meet the criteria to receive a full pension. This reduction should have only been 5%. |
| Your pension benefit entitlement has been adjusted to reflect this change. The foregoing adjustment of your pension will result in the monthly amount of your benefit under the RCMPSA to increase from $403.01 to $425.40. This change became effective on August 21, 1974, the first day of pension entitlement. |
| Effective October 1996, your new monthly gross amount will be $395.68 basic plus $1,010.50 indexation, for a total of $1,406.18. These amounts take into consideration your CPP reduction effective September 1, 1994. |
| This adjustment in the amount of your benefit entitlement has resulted in an underpayment of $7,787.44. A cheque in this amount representing your basic and indexation, less applicable tax, for the period of August 21, 1974 to September 30, 1996 is enclosed. |
[2] Mr. Vogan sought interest on the underpayment. When his request for interest was refused, Mr. Vogan sued Her Majesty on April 10, 1997. A defence was filed to the claim on July 14, 1997. The defence admitted the matters contained in Mr. Charbonneau's letter of October 1996, but asserted that there was no entitlement to the payment of interest.
[3] In the meantime, Mr. Vogan filed his income tax return for the 1996 taxation year. The effect of the payment of $7,787.44 was to place Mr. Vogan in a higher tax bracket and to subject him to the Old Age Security clawback provision.
[4] Then, in September of 1997 Mr. Vogan received further correspondence. This letter was from Inspector K.M. Mole, Officer in Charge, RCMP National Compensation Policy Centre. In material part, the letter stated:
| We have just recently learned from Public Works and Government Services Canada (PWGSC) that their previous letter to you - with cheque - dated October 8, 1996, unfortunately, should never have been sent. Their 1996 audit that surfaced what was thought to be an error in the application of pension penalty policy at the time of your retirement has since been determined not to be an error at all. |
| During the 1996 audit, PWGSC personnel were of the understanding that the pension penalty policy applicable in your particular situation was the same as present day policy. A subsequent review has since confirmed that a pension penalty policy change came into being on December 20, 1975, by way of an Act of Parliament, Bill C-52. In view of the fact that you discharged prior to that date, it has been established that these calculations were performed correctly at the time of your discharge. |
| Regrettably, in view of the foregoing, the retroactive cheque you received with your letter of October 8, 1996, as well as the subsequent monthly increases from October 1996 until October 1997, must now be recovered. Therefore, your November 1997 pension cheque will be adjusted to $1,348.06 ($373.29 basic pension plus $974.77 indexation), the correct amount of your entitlement. |
[5] Mr. Vogan now brings this application for judicial review of the Minister's reassessment. Only one issue is raised in the amended notice of application: whether the respondent erred in its assessment of the amount owed to it by Mr. Vogan.
[6] The respondent has filed the affidavit of Superintendent Guy Fortin, the officer now in charge of the National Compensation Policy Centre of the RCMP. His unchallenged evidence is that in total Mr. Vogan received $11,446.40 more than he should have received so that his monthly benefits have now been reduced by $63.59 representing $11,446.40 payable over 180 months.
[7] The respondent relies upon subsections 9.1(1) and (2) of the Royal Canadian Mounted Police Superannuation Regulations, C.R.C., c.1393 ("Superannuation Regulations"), which provide:
| 9.1 (1) Where, under Part I or III of the Act, an amount has been paid in error to a person in respect of an annuity, annual allowance or supplementary benefit, the Minister shall immediately demand payment from that person of that amount. (2) If a person from whom payment of an amount has been demanded pursuant to subsection (1) has not paid the amount within 30 days after the day on which the demand is made, the Minister may deduct the amount from the person's annuity, annual allowance or supplementary benefit, in approximately equal monthly instalments equal to ten per cent of the gross monthly amount of the annuity, annual allowance or supplementary benefit, as the case may be. |
9.1 (1) Dans le cas où un montant a été versé par erreur au titre d'une annuité, d'une allocation annuelle ou d'une prestation supplémentaire aux termes des parties I ou III de la Loi, le ministre somme sans délai la personne qui a reçu ce montant de le rembourser. (2) Si la personne qui a été sommée de rembourser un montant aux termes du paragraphe (1) ne l'a pas acquitté dans les 30 jours suivant la date de la sommation, le ministre peut retenir le montant sur l'annuité, l'allocation annuelle ou la prestation supplémentaire de cette personne par des déductions mensuelles sensiblement égales représentant chacune 10 pour cent du montant brut des mensualités. |
| [8] In response, Mr. Vogan says that he does not dispute the respondent's right of recovery. However, Mr. Vogan asserts that he should only be obliged to pay the amount of the overpayment, less the amount paid on account of the increased income tax and the additional Old Age Security clawback resulting from the ephemeral increase. |
| [9] I accept the submission advanced on behalf of the respondent that Mr. Vogan has not pointed to any evidence which the Minister failed to consider when assessing the amount owing, and that Mr. Vogan has not adduced any evidence to establish that the Minister considered irrelevant information in arriving at his decision. In short, there is no evidence that the assessment of the amount overpaid was in error. |
| [10] Once that amount has been determined, the Superannuation Regulations mandate that such amount be demanded, and empower the Minister to deduct the amount of the overpayment from a recipient's annuity, annual allowance or supplementary benefit. There is therefore no basis at law upon which to set aside the respondent's assessment. |
| [11] Any remedy available to Mr. Vogan must exist in another forum. It may be that some relief is available should Mr. Vogan choose to seek a reassessment of his tax pursuant to subsection 152(4.2) of the Income Tax Act, R.S.C. 1985 (5th Supp.), c.1. Should Mr. Vogan choose so to proceed his request will undoubtedly be given full consideration. |
| [12] In the result, this application for judicial review must be dismissed. |
| [13] The respondent, in all of the circumstances, fairly did not seek costs. |
| "Eleanor R. Dawson" |
| Judge |
| Ottawa, Ontario |
| February 27, 2001 |