Appeal by recipient of disability support payments from a decision quashing an order of the Ontario Social Benefits Tribunal forgiving recovery of one-half of overpayment.

[2014] O.J. No. 1505

2014 ONCA 240

Ontario Court of Appeal

J.I. Laskin, S.T. Goudge and K.N. Feldman JJ.A.

March 31, 2014

The appellant, a recipient of disability support payments under the Ontario Disability Support Program (“ODSP”), was a disabled senior. He received ODSP income support. Because of an innocent reporting error in relation to his shelter allowance, he received an overpayment of $3,050. The Director of ODSP ordered him to repay the amount in monthly deductions of $35.85.

The appellant appealed the Director’s decision to the Social Benefits Tribunal. The Tribunal found the Director correctly assessed the appellant with an overpayment; however, the Tribunal also found that the appellant “did not understand or intentionally try to deceive the Director because he testified in a credible, honest and forthright manner as to his understanding that he was not required to inform the Director until he actually moved into his [public housing] apartment.” The Tribunal concluded that the discretion to recover an overpayment should be “flexible,” taking into account the circumstances of each case and the purposes of the Act, and that the appellant would experience financial hardship if required to repay the full amount of overpayment. The Tribunal ordered the appellant to repay half of the overpayment, $1,525 at a rate of $10 per month.

The Director appealed the Tribunal’s decision to the Divisional Court as a question of law appealable pursuant to the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25 (the "Act"). The Divisional Court characterized the overpayment as a Crown debt that, in its view, neither the Director nor the Tribunal had any discretion to compromise pursuant to the Act. The Divisional Court allowed the Director’s appeal and set aside the Tribunal’s order on the basis that neither the Director nor the Tribunal has discretion under the Act to limit recovery of the overpayment.

The appellant appealed to the Ontario Court of Appeal. Pursuant to the Act, the Tribunal cannot make a decision that the Director does not have authority to make; therefore, the court first considered whether the Director under the Act has authority to forego recovery of part or all of an overpayment and, if the Director has such authority, whether the Tribunal has the same authority pursuant to the Act. The interpretation of the Director’s authority turned on the statutory language “may” in the phrase “may be recovered” in the context of the scheme and objects of the Act and the legislature’s intent.

The Court held the interpretation of the Act supported a finding that the Director has jurisdiction to forego recovery of part or all of an overpayment. The court held the word “may” confers a statutory discretionary power. Typically, the decision maker can lawfully decide whether to exercise the power or not to exercise the power, in other words, “may” impliedly means “may or may not.” This discretionary language, in the context of the scheme and objects of the Act as social welfare legislation, serving some of the province’s most impoverished and vulnerable residents, requires flexibility in the treatment of overpayments. The court held that the Act does not require that overpayments always be recovered; rather, it requires that they be recovered if circumstances warrant their recovery, for example, recovery should be exercised reasonably taking into account a disabled recipient’s individual circumstances or whether the cost of recovery would exceed the actual recovery. Further, the court held that the discretion to forego recovery of overpayments does not amount to a “write-off” as characterized by the Divisional Court. The term “write-off” is not helpful in this context, as it is an accounting term that does not concern actual recovery of a debt. The issue was not whether the Director has discretion to “write-off” a Crown debt, but whether the Director has discretion not to recover part or all of a Crown debt. The court concluded the Director has discretion over both how to recover overpayments and whether to recover them in part or at all.

With respect to the Tribunal’s jurisdiction, the court held that while the Act does not expressly state that the Tribunal has authority to make any decision the Director could make, it does so implicitly by stating the negative: the Tribunal cannot make a decision the Director does not have authority to make. Further, when a statute provides an appeal from a discretionary decision, the appellant tribunal generally should be able to exercise that discretion unless the statute specifically precludes it from doing so. As the Act does not specifically preclude the Tribunal from exercising the Director’s discretion over overpayments, the Tribunal is also empowered to exercise that discretion.

The Ontario Court of Appeal allowed the appeal and reinstated the Tribunal’s order.