eBULLETIN - July 2012
Contents
See our Case Summaries List or Systemic Recommendations for further information about recent and past CFGB cases.
Highlights
Interim lodgings, meals and miscellaneous
The grievor argued that he had planned his relocation diligently and in accordance with the information provided by the Canadian Forces experts and that he could not have predicted the early arrival of his household goods and effects at destination. The grievor asked to be reimbursed the additional days of interim lodgings, meals and miscellaneous from his Core envelope.
Imposed Restrictions versus Separation Expenses
The grievor claimed that all his requests for imposed restrictions (IR) had been submitted and accepted in good faith. In his view, his IR status was authorized at a time when his personal situation was known to the Canadian Forces and he should not be obliged to reimburse the separation expenses paid to him.
Definition of “Income Property”
The grievor’s residence, at his former place of duty, was deemed to have been an "income property." However, the grievor explained that, from the definition provided to him by the Canadian Forces Integrated Relocation Program representative, "income property" means "property(ies) other than the principal dwelling.” As such, the grievor argued that the recovery of a portion of the real estate and legal fees - that he had been reimbursed and that were associated with the sale of the residence - was unjustified. He requested that the amount that was recovered from him be returned.
Case summaries
Interim lodgings, meals and miscellaneous
Board Findings and Recommendations
In March 2009, the grievor was posted to Belgium with a change of strength (COS) date of 27 July 2009. While preparing to relocate his dependants, household goods and effects (DHG&E), the grievor was informed of some changes to the interim lodgings, meals and miscellaneous (ILM&M) benefits under the Canadian Forces Integrated Relocation Program (CF IRP) 2009. The new policy stated that Canadian Forces (CF) members needed to plan for a door-to-door move and that ILM&M benefits would no longer be reimbursable once the HG&E were available for delivery at the new place of duty unless the circumstances were beyond the CF member’s control.
After consulting numerous Canadian Forces (CF) relocation authorities and experts, the grievor designed a plan for a door-to-door move and set it in motion.
However, two unforeseen events changed the grievor’s plan. First, the Canadian Forces Support Unit Europe negotiated and signed a lease on behalf of the grievor, that ultimately postponed the date of possession of the new accommodation from 27 July 2009 to 1 August 2009. The second, and more significant event was that the grievor’s HG&E arrived at destination at least 10 days earlier than expected, and were therefore available for delivery on 20 July 2009. Since the new accommodation was not available before 1 August 2009 and the grievor planned to arrive at destination on the 25 July 2009, the HG&E were placed in storage. Finally, given that the grievor’s new accommodation was not available until 1 August 2009, the first date available for the delivery of the grievor’s HG&E was 3 August 2009.
In April 2010, the Director Compensation and Benefits Administration (DCBA) denied the grievor’s request to be reimbursed ILM&M from the Core envelope for the period of 20 July to 3 August 2009. The DCBA explained that the grievor’s HG&E were available for delivery at destination as of 20 July 2009, but that the grievor and his dependants only arrived in Belgium on 25 July 2009 and the new accommodation was not available until 3 August 2009. The DCBA further stated that the grievor had been informed that once his HG&E were available for delivery in Belgium, the ILM&M would come from his Personalized envelope since it was his decision to rent accommodation that was not available until after his HG&E arrived in Belgium.
The grievor argued that he had planned his relocation diligently and in accordance with the information provided by the CF experts and that he could not have predicted the early arrival of his HG&E at destination. The grievor asked to be reimbursed the 12 additional days of ILM&M from his Core envelope.
There was no initial authority decision in this case because the grievor refused to approve extension requests.
The Board found that the grievor produced an effective and well-coordinated plan for a door-to-door move as required by Section 2.2 of the CF IRP 2009.
The Board considered the changes to the accommodation availability and found that the grievor had selected accommodation with an appropriate availability date and that the delays in availability were, first, unanticipated and, second, attributable to CF authorities.
Regarding the early delivery of the grievor’s HG&E, the Board found that 16-day transit of the grievor’s HG&E to destination, when the norm was four to six weeks in transit, was rare, unforeseen and beyond the grievor’s ability to control.
The Board noted that even if the grievor had been available on 20 July 2009 when his HG&E was available for delivery, the lack of available accommodation precluded delivery before 3 August 2009. Whether the grievor was at destination on 20 July 2009 or not made no difference in the circumstances; the door-to-door move was already impossible at that point.
The Board found that the circumstances leading to the extra ILM&M in this case were beyond the grievor’s control and that he was entitled to the extra ILM&M from the Core funding envelope.
The Board recommended that the Chief of the Defence Staff uphold the grievance.
Final Authority Decision
Pending.
Imposed Restrictions versus Separation Expenses
Board Findings and Recommendations
In 2011, the grievor was notified that he had to reimburse more than $100,000.00 in separation expenses (SE) that he had received in error since a posting in 2004. However, he was required to repay only the amounts since 2005 because the amounts received prior to that date were prescribed.
In his grievance, the grievor claimed that all his requests for imposed restrictions (IR) had been submitted and accepted in good faith. In his view, his IR status was authorized at a time when his personal situation was known to the Canadian Forces (CF) and he should not be obliged to reimburse the SE paid to him. By way of redress, the grievor asked that his debt be written off.
The Board first pointed out the importance of understanding the difference between IR and SE and explained that IR status had been granted in order to provide CF members some flexibility in managing the disruptions caused by relocating dependants when being deployed. The Board was of the opinion that when IR is authorized, the CF expects that the CF member and his family will eventually be reunited at the new place of duty. The Board added that the decision to authorize IR is discretionary and, contrary to what has been suggested in certain CANFORGENs, IR is not a benefit and does not automatically entitle members to SE.
In the Board’s view, the interpretation and application of SE described in CANFORGEN 080/99 (Imposed Restriction Policy) and CANFORGEN 019/05 (Amendment to Imposed Restriction Policy), were incorrect. In addition to quoting the Compensation and Benefits Instructions (CBI) 209.997 – Separation Expense, those two messages added two situations offering access to an IR, including one in which it would not be in the family’s interest to relocate. Moreover, these same messages drew a direct link between the IR and SE in a way that led many officials, including Career Managers (CM) and CF members, to understand that authorizing IR status automatically made one eligible for SE.
The Board was of the opinion that the grievor’s situation met none of the criteria set forth at paragraph 209.997(5) of the CBI and entitling him to receive payment of SE. In fact, according to the grievor and the information on file, between 2004 and 2007, the grievor was never reunited with his dependants during his postings. The Board therefore concluded that the grievor was never entitled to receive SE, even though IR status was authorized on four occasions.
However, the Board looked at the possibility of the Crown erasing the grievor’s debt so that it would not be recovered. The Board noted that certain federal laws expressly give the Minister authority to remit an overpayment, but that the National Defence Act does not contain such a provision. However, as noted in past cases, the Board was of the opinion that the provisions of section 23 of the Financial Administration Act (FAA) apply to the debts of serving CF members.
The Board conducted a detailed review of the policies and guidelines used by other government agencies to enable them to determine whether a remission order should be drafted and submitted to the Governor in Council (GIC). Specifically, the Board noted that the Canada Revenue Agency (CRA) specifies in its guide that a remission order may be recommended if, among other things, the debt involves extreme hardship or incorrect action or advice on the part of CRA officials. The Board also noted that it took seven years for the CF authorities to realize their mistake. In the circumstances, the Board was convinced that the grievor should not suffer from CF errors in administering and managing the SE and that the burden of this responsibility lies solely and exclusively with the CF.
The Board recommended to the Chief of the Defence Staff (CDS) that the grievance be upheld.
The Board recomended that the CDS order Departmental authorities to prepare a submission (supported by the Minister of National Defence (MDN)) to Treasury Board (TB) requesting the remission of the grievor’s debt under section 23 of the FAA. The Board also recommended that, in the meantime, no recovery actions against the grievor should proceed until a decision has been rendered.
The Board was also of the opinion that, based on previous CFGB cases in which this problem surfaced, it appeared that there was a recurrent problem arising from an improper application of the CBIs and caused by the two CANFORGENs mentioned above, that is that CMs authorized successive IRs “in the best interest of the family”, a criterion absent from CBI 209.997. The Board consequently recommended that the CDS order an audit in order to identify all IR postings authorized by CMs in which SE was paid since implementation of CANFORGEN 019/05, and all CF members who have received SE in error.
The Board recommended that, once the magnitude of the problem was known, the CDS order the preparation of a general remission order by the appropriate CF authorities, for submission to the GIC, with the support of the MDN and TB.
Final Authority Decision
Pending.
Definition of "Income Property"
Board Findings and Recommendations
The grievor was informed that a portion of the real estate and legal fees (RE/LF) he had been reimbursed following the sale of his residence at his former place of duty had to be recovered because the residence in question was deemed to have been an "income property." The grievor had been renting a suite; however, the grievor informed the tenant in October 2007 that soon they will need all the space in the house. The tenant moved out in April 2008 and the house was sold on 14 July 2008, as a result of the grievor being relocated.
In his grievance, the grievor explained that during the initial briefing with the Canadian Forces Integrated Relocation Program (CF IRP) representative, he specifically asked what was meant by "income property"; it was his understanding, based on the response provided, that it meant "property(ies) other than the principal dwelling." The grievor requested that the amount recovered from him be returned.
While the grievor appeared to have accepted the interpretation of the Director Compensation and Benefits Administration (DCBA) that he had sold an income property, the Board was not convinced that it was the case. The Board acknowledged that the grievor's residence was generating income at some point; however, the Board noted that the grievor's situation was slightly different from someone owning buildings commonly referred to as generating income like duplex, triplex, apartment buildings and businesses. As well, the Board reviewed section 45 of the Income Tax Act - Property with more than one use, specifically the Interpretation Bulletin IT-120R6 dated 17 July 2003 which provides that it is the general practice not to apply the deemed disposition, but rather to consider that the entire property retains its nature as a principal residence where all the following conditions are met: a) the income-producing use is ancillary to the main use of the property as a residence, b) there is no structural change to the property, and c) no CCA [capital cost allowance] is claimed on the property. The Board found this guideline to be helpful and was of the view that it helped demonstrate that although a principal residence where a suite is rented can be considered to be an income property, it does not indefinitely make it as such.
The Board also noted that both Royal LePage and the DCBA were of the view that the relocation benefits should be reduced to reflect the percentage of the house the grievor was actually occupying because the house was producing income when the grievor received his posting message. The Board pointed out that section 8.1.06 of the CF IRP, the Treasury Board approved directive on relocation, indicates the assessment and determination of whether a residence is an income-producing property is performed at two specific points: when a residence is sold or when a residence is purchased. There is no indication that the date of the issuance of a posting message is the starting point for that determination.
It was the Board's opinion that the residence ceased to be an income-producing property when the tenant left after the grievor indicated he and his wife intended to make personal use of that space and that the grievor did not attempt to bypass the relevant provision of the CF IRP in order to claim the maximum benefit. The Board concluded that the grievor was entitled to the full reimbursement of his expenses associated with the selling of his residence.
The Board recommended that the Chief of the Defence Staff (CDS) uphold the grievance.
The Board recommended that the CDS direct the appropriate authority to reimburse the totality of the RE/LF associated with the sale of the grievor's residence.
Final Authority Decision
Pending.
Statistics
Category of grievances received since 2010
Data as of June 30, 2012
[Long description of Category of grievances received since 2010 chart]
Findings and Recommendations (F&R) rendered in 2012
54 cases as of June 30, 2012
[Long description of Findings and Recommendations (F&R) rendered in 2012 chart]
Decisions rendered by the CDS
46 received between January 1, 2012 and June 30, 2012
[Long description of Decisions rendered by the CDS chart]
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