Date: 19981201

                                         Docket: A-171-98

MONTRÉAL, QUEBEC, THE 1st DAY OF DECEMBER 1998

CORAM:             THE HONOURABLE MR. JUSTICE PRATTE

                 THE HONOURABLE MADAME JUSTICE DESJARDINS

                 THE HONOURABLE MR. JUSTICE DÉCARY

BETWEEN:      ROBERT DEMERS

     Applicant

     AND

     CANADA EMPLOYMENT INSURANCE COMMISSION

     Respondent

     AND

     ATTORNEY GENERAL OF CANADA

     Third Party

     J U D G M E N T

     The application for judicial review is allowed, the impugned decision is quashed insofar as it affirms the imposition of a penalty on the applicant and the matter is referred back to the Chief Umpire or an umpire designated by him to determine whether the Board of Referees committed an error justifying his or her intervention when it affirmed the Commission"s decision to impose a penalty on the applicant, as a penalty cannot be imposed under subsection 33(1) of the Act unless the claimant has made a representation that the claimant "knew" was false or misleading, which means that no penalty can be imposed on a claimant who made a false representation unless it is determined that in that case the claimant acted in bad faith, or in other words, dishonestly (see the decisions of this Court in Canada v. Gates , [1995] 3 F.C. 17, and Moretto v. Canada (Vancouver, March 24, 1998, A-667-96)).

     Louis Pratte

     J.A.

Certified true translation

M. Iveson

Date: 19981201

Docket: A-171-98

Coram:      THE HONOURABLE MR. JUSTICE PRATTE

         THE HONOURABLE MADAME JUSTICE DESJARDINS

         THE HONOURABLE MR. JUSTICE DÉCARY

Between:      ROBERT DEMERS

     Applicant

     AND:

     CANADA EMPLOYMENT INSURANCE COMMISSION

     Respondent

     AND:

     ATTORNEY GENERAL OF CANADA

     Third Party

Hearing held at Montréal on Tuesday, December 1st, 1998

Judgment delivered at Montréal on Tuesday, December 1st, 1998

REASONS FOR DECISION BY:      THE HONOURABLE MR. JUSTICE PRATTE

Date: 19981201

Docket: A-171-98

CORAM:      THE HONOURABLE MR. JUSTICE PRATTE

     THE HONOURABLE MADAME JUSTICE DESJARDINS

     THE HONOURABLE MR. JUSTICE DÉCARY

BETWEEN:             ROBERT DEMERS

     Applicant

     AND:

     CANADA EMPLOYMENT INSURANCE COMMISSION

     Respondent

     AND

     ATTORNEY GENERAL OF CANADA

     Third Party

     REASONS FOR DECISION

     (Delivered from the bench at Montréal

     on Tuesday, December 1st, 1998)

PRATTE J.A.

[1]      We are all of the view that the impugned decision must be quashed on the ground that the Umpire failed to give an opinion on one of the issues before the Umpire, namely whether the Board of Referees erred when it affirmed the Commission"s decision to impose a penalty of $4,068.00 on the applicant for false and misleading representations.

[2]      In our view, the applicant"s contention that the Umpire should have quashed the Board of Referees" decision because the latter did not really consider the question whether the applicant was entitled to the exception provided in subsection 43(2) of the Regulations, is not sound. Despite the terseness of its decision, we consider that the Board of Referees did give its opinion on this question.

[3]      The application for judicial review will accordingly be allowed, the impugned decision will be quashed insofar as it affirms the imposition of a penalty on the applicant and the matter will be referred back to the Chief Umpire or an umpire designated by him to determine whether the Board of Referees committed an error justifying his or her intervention when it affirmed the decision of the Commission to impose a penalty on the applicant, as a penalty cannot be imposed under section 33(1) of the Act unless the claimant has made a representation that the claimant "knew" was false or misleading, which means that no penalty can be imposed on a claimant who made a false representation unless it is determined that in that case the claimant acted in bad faith, or in other words, dishonestly (see the decisions of this Court in Moretto v. Attorney General of Canada , Vancouver, March 24, 1998 in A-667-96 and in Canada v. Gates, [1995] 3 F.C. 17).

     Louis Pratte

     J.A.

Certified true translation

M. Iveson

     FEDERAL COURT OF APPEAL

Date: 19981201

Docket: A-171-98

Between:      ROBERT DEMERS

     Applicant

         AND

         CANADA EMPLOYMENT

         INSURANCE COMMISSION

        

     Respondent

         AND

         ATTORNEY GENERAL OF CANADA

     Third Party

    

     REASONS FOR DECISION

    

     FEDERAL COURT OF APPEAL

     NAMES OF COUNSEL AND SOLICITORS OF RECORD

COURT FILE NO.:                      A-171-98

STYLE OF CAUSE:                  ROBERT DEMERS

                                             Applicant

                             AND

                             CANADA EMPLOYMENT INSURANCE                              COMMISSION

                                             Respondent

                             AND

                             ATTORNEY GENERAL OF CANADA

     Third Party

PLACE OF HEARING:                  Montréal, Quebec

DATE OF HEARING:                  December 1st, 1998

REASONS FOR DECISION OF THE COURT (THE HONOURABLE MR. JUSTICE PRATTE, THE HONOURABLE MADAME JUSTICE DESJARDINS AND THE HONOURABLE MR. JUSTICE DÉCARY)

DELIVERED FROM THE BENCH BY:          Pratte J.A.

DATED:                         December 1st, 1998

APPEARANCES:          André Drouin                  for the applicant

                 Francisco Couto/             for the respondent

                 S. Létourneau

     - 2 -

SOLICITORS OF RECORD:

         André Drouin                      for the applicant

         LaSalle, Quebec

         Morris Rosenberg                  for the respondent

         Deputy Attorney General of Canada

         Montréal, Quebec