Other Canada Pension Plan (CPP)

Reasons and decision

Persons in attendance

Neither the Respondent nor a representative for the Added Party was in attendance.

Decision

The appeal is allowed.

Introduction

[1] This is an appeal of the decision of the General Division of the Social Security Tribunal of Canada (Tribunal) issued on June 2, 2016. The General Division had previously conducted a hearing based on the documentary record and determined that the Appellant had erred in paying a death benefit under the Canada Pension Plan (CPP) to the Added Party, rather than to the Respondent.

[2] Leave to appeal was granted on February 10, 2017, on the grounds that the General Division may have erred in rendering its decision.

Overview

[3] On September 13, 2013, J. W. S. (the deceased contributor) passed away. On October 29, 2013, the Respondent submitted an application for the CPP death benefit for the deceased contributor’s estate. She said that she was the deceased contributor’s spouse and common-law partner, as well as the estate’s executrix, but she also completed a section in the application indicating that there was no will and that she was applying as the estate’s common-law spouse. The Respondent submitted with her application the following documents:

• a copy of the proof-of-death certificate;
• a copy of the funeral services contract;
• an invoice that showed that the Respondent had paid $240.88 in funeral services; and
• a handwritten will, signed and witnessed by the deceased contributor on July 8, 2013.

[4] On November 14, 2013, the Added Party submitted an application for the CPP death benefit for the deceased contributor’s estate. It asserted that it was responsible for the payment of the deceased contributor’s funeral expenses and submitted a copy of the proof-of-death certificate as well as a statement indicating that Department of Community Services, X Region, paid for funeral expenses in the amount of $4,022.56.

[5] The Appellant approved the Added Party’s application and paid it the proceeds of the death benefit.

[6] In a letter dated November 18, 2013, the Respondent was informed that her application for a death benefit had been denied as she did not meet the CPP eligibility. On December 11, 2013, the Respondent requested a reconsideration of the decision to deny her application for the death benefit, but the Appellant affirmed its decision in a letter dated January 28, 2014.

[7] On February 2, 2014, the Respondent submitted a notice of appeal to the General Division. On April 28, 2016, the General Division member presiding over the matter requested submissions from the Appellant on the extent to which it had investigated whether the deceased contributor had a will. The Appellant filed submissions on May 27, 2016, and the General Division issued its decision within the week. It found the Appellant’s submissions contradictory and concluded: “[T]he Minister erred by applying section 64 of the CPP regulations when it should have applied section 71(1) of the regulations,^{Footnote 1} which directs that the death benefit should be paid to the estate.”

[8] On August 31, 2016, the Appellant submitted an application requesting leave to appeal to the Appeal Division, detailing alleged grounds for appeal. In a decision dated February 10, 2017, I granted leave to appeal because I thought there was an arguable case that the General Division erred in disregarding subsection 71(2) of the CPP, which gives the Appellant the discretion to direct the death benefit to someone other than the estate, provided that certain conditions are met. I also invited the parties to provide submissions on whether an additional hearing was required and, if so, in what format. The Appellant filed a letter on March 20, 2017. Neither the Respondent nor the Added Party made any submissions.

[9] In a notice dated March 30, 2017, the Appeal Division scheduled a hearing by teleconference for the following reasons:

• the information in the file, including the need for additional information;
• the requirements under the Social Security Tribunal Regulations to proceed as informally and as quickly as circumstances, fairness and natural justice permit.

The law

Department of Employment and Social Development Act

[10] Subsection 58(2) of the Department of Employment and Social Development Act (DESDA) provides that leave to appeal is refused if the Appeal Division is satisfied that the appeal has no reasonable chance of success.

[11] According to subsection 58(1) of the DESDA, the only grounds of appeal are the following:

1. (a) The General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
2. (b) The General Division erred in law in making its decision, whether or not the error appears on the face of the record; or
3. (c) The General Division based its decision on an erroneous finding of fact made in a perverse or capricious manner or without regard for the material before it.

[12] According to subsection 59(1) of the DESDA, the Appeal Division may dismiss the appeal, give the decision that the General Division should have given, refer the matter back to the General Division for reconsideration in accordance with any directions that the Appeal Division considers appropriate, or confirm, rescind or vary the General Division’s decision in whole or in part.

CPP and associated regulations

[13] Subsection 57(1) of the CPP states that, subject to subsection (1.1), a death benefit is payable to a contributor’s estate as a lump-sum amount equal to: (a) six times the amount of the contributor’s retirement pension, calculated as provided in subsection (2), or (b) ten per cent of the Year’s Maximum Pensionable Earnings for the year in which the contributor died, whichever is the lesser.

[14] Subsection 57(1.1) states that where the contributor’s death occurs after December 31, 1997, the lump sum referred to in subsection (1) shall not exceed $2,500.

[15] Section 71 of the CPP states the following:

1. 71. (1) Where payment of a death benefit is approved, the Minister shall, except as provided in subsections (2) and (3), pay the death benefit to the estate of the contributor.
2. (2) The Minister may direct payment of a death benefit in whole or in part to such person or body as is prescribed where
   1. (a) he is satisfied, after making reasonable inquiries, that there is no estate;
   2. (b) the estate has not applied for the death benefit within the prescribed time interval following the contributor’s death; or
   3. (c) the amount of the death benefit is less than the prescribed amount.

[16] Section 64 of the Canada Pension Plan Regulations (CPP Regulations) states the following:

1. 64. (1) When paragraph 71(2)(a) of the Act applies or when the estate of a deceased contributor has not applied for the death benefit within the interval of 60 days after the contributor’s death, or when the amount of the death benefit is less than two thirds of 10% of the Year’s Maximum Pensionable Earnings for the year in which the contributor died, in the case of a death that occurred before January 1, 1998, or less than $2,387, in the case of a death that occurred after December 31, 1997, a direction under subsection 71(2) of the Act may, subject to subsections (2) and (3), be given for payment of the death benefit
   1. (a) to the individual or institution who has paid or is responsible for the payment of the deceased contributor’s funeral expenses;
   2. (b) in the absence of an individual or institution described in paragraph (a), to the survivor of the deceased contributor; or
   3. (c) in the absence of an individual or institution referred to in paragraph (a) and a survivor referred to in paragraph (b), to the next of kin of the deceased contributor.
2. (2) No amount in excess of the actual funeral expenses shall be paid pursuant to paragraph (l)(a).
3. (3) Where, by virtue of subsection (2), an amount paid pursuant to paragraph (l)(a) is less than the amount of the death benefit, a direction pursuant to subsection (1), in so far as it relates to the remainder of the death benefit, may be given as if in the absence of an individual or institution described in that paragraph.

Issues

[17] The issues before me are as follows:

1. How much deference should the Appeal Division show to decisions of the General Division?
2. Did the General Division err in law by neglecting to apply paragraph 71(2)(c) of the CPP and subsection 64(1) of the CPP Regulations?
3. If the answer to the preceding question is “yes,” then what remedy is appropriate?

Submissions

[18] In its submissions dated May 30, 2016, the Appellant alleges that the General Division erred in finding subsection 71(1) of the CPP—rather than paragraph 71(2)(c) of the CPP and section 64 of the CPP Regulations—applicable to the competing death benefit applications. At paragraph 3 of its decision, the General Division stated that entitlement to the death benefit depends solely on whether an applicant is the executor or executrix of the deceased contributor’s estate. However, the Appellant argues that the question is more complicated than that.

[19] Subsection 71(1) of the CPP contains the general rule that the death benefit is paid to a deceased contributor’s estate, but there are exceptions to this rule, set out in subsection 71(2), which the General Division failed to recognize. Specifically, paragraph 71(2)(c) permits the Appellant to direct payment of a death benefit in whole or in part to such person or body as is prescribed by the CPP Regulations where the amount of the death benefit is less than a specified amount. In the present case, even though the Respondent was executrix of the deceased contributor’s estate, the death benefit was less than the amount listed in subsection 64(1) of the CPP Regulations, which is $2,387. Therefore, the Appellant was within its authority under the same subsection to award payment of the death benefit to the individual or institution that paid for the deceased contributor’s funeral expenses, which in this case was the Added Party.

[20] In its letter of March 20, 2017, the Appellant confirmed that the amount of the death benefit paid to the Added Party was calculated as six times the amount of the retirement pension of the Respondent’s deceased spouse, which resulted in an amount below $2,387.

Analysis

Deference owed to the General Division

[21] Until recently, it was accepted that appeals to the Appeal Division were governed by the standards of review set out by the Supreme Court of Canada in Dunsmuir v. New Brunswick.^{Footnote 2} In matters involving alleged errors of law or a failure to observe principles of natural justice, the applicable standard was held to be correctness, reflecting a lower threshold of deference deemed to be owed to a first-level administrative tribunal. In matters where erroneous findings of fact were alleged, the standard was held to be reasonableness, reflecting a reluctance to interfere with findings of the body tasked with hearing factual evidence.

[22] The Federal Court of Appeal decision Canada (MCI) v. Huruglica^{Footnote 3} has rejected this approach, holding that administrative tribunals should not use standards of review that were designed to be applied by appellate courts. Instead, administrative tribunals must look first to their home statutes for guidance in determining their role.

[23] Although Huruglica deals with a decision that emanated from the Immigration and Refugee Board, it has implications for other administrative tribunals. In this case, the Federal Court of Appeal held that it was inappropriate to import the principles of judicial review, as set out in Dunsmuir, to administrative forums, as the latter may reflect legislative priorities other than the constitutional imperative of preserving the rule of law. “[…] one should not simply assume that what was deemed to be the best policy for appellate courts also applies to specific administrative appeal bodies.”^{Footnote 4}

[24] This premise leads the Court to a determination of the appropriate test that flows entirely from an administrative tribunal’s governing statute:

[…] the determination of the role of a specialized administrative appeal body is purely and essentially a question of statutory interpretation, because the legislator can design any type of multilevel administrative framework to fit any particular context. An exercise of statutory interpretation requires an analysis of the words of the IRPA [Immigration and Refugee Protection Act] and its object […] The textual, contextual and purposive approach mandated by modern statutory interpretation principles provides us with all the necessary tools to determine the legislative intent in respect of the relevant provisions of the IRPA and the role of the RAD [Refugee Appeal Division].

[25] The implication here is that the standards of reasonableness or correctness will not apply unless those words, or their variants, are specifically contained in the founding legislation. Applying this approach to the DESDA, one notes that paragraphs 58(1)(a) and (b) do not qualify errors of law or breaches of natural justice, which suggests that the Appeal Division should afford no deference to the General Division’s interpretations.

[26] The word “unreasonable” is nowhere to be found in paragraph 58(1)(c), which deals with erroneous findings of fact. Instead, the test contains the qualifiers “perverse or capricious” or “without regard for the material before it.” As suggested by Huruglica, those words must be given their own interpretation, but the language suggests that the Appeal Division should intervene when the General Division bases its decision on an error that is clearly egregious or at odds with the record.

Application of CPP paragraph 71(2)(c)

[27] As I noted in my leave to appeal decision, the Respondent cannot be blamed for believing that she was the rightful recipient of the CPP death benefit paid on the deceased contributor’s behalf. She was his common-law spouse and was named executrix in his last will and testament. More importantly, both of the Appellant’s identically worded letters denying her claim (the initial response dated November 18, 2013 and the reconsideration response dated January 28, 2014) offered only a vague and incomplete explanation for its decision—one that would have led any reasonable person to wonder why she was not entitled to the death benefit. Neither letter made any mention of paragraph 71(2)(c) of the CPP or subsection 64(1) of the CPP Regulations, the provisions that formed the basis for the Appellant’s decision to award the death benefit to the Added Party.

[28] That said, I am convinced that the General Division erred in law when it reversed the Appellant’s decision in the Added Party’s favour and directed payment of the death benefit to the deceased contributor’s estate. It is clear from its decision that the General Division believed that he essential question in this appeal was whether the Respondent legitimately represented the deceased contributor’s estate. Having found that she had, the General Division applied subsection 71(1) of the CPP but went no further. In doing so, it disregarded subsection 71(2) of the CPP, which gives the Appellant the discretion to direct the death benefit to someone other than the estate, provided certain conditions are met. One of those conditions is found in paragraph 71(2)(c), which makes an exception for cases where the amount of the death benefit is less than the prescribed amount. Subsection 64(1) of the CPP Regulations specifies the prescribed amount as $2,387 for deaths occurring after December 31, 1997.

[29] In written and oral submissions, the Appellant confirmed that the amount of the death benefit payable was less than the prescribed amount. I accept this. Therefore, subsection 64(1) permits the Appellant to award it to the individual or institution that, in its estimation, actually paid for the deceased contributor’s funeral. The Appellant correctly determined that the Added Party, and not the Respondent, met this criterion, thereby entitling it to the death benefit.

[30] Although the Respondent may find this outcome unfair, the Appeal Division is obliged to follow the letter of the law and can exercise only such jurisdiction as is granted by its enabling statute. Support for this position is found in Canada (MHRD) v. Tucker,^{Footnote 5} among many other cases, which have held that an administrative tribunal is not a court but a statutory ecision-maker and, therefore, not empowered to provide any form of equitable relief.

Conclusion

[31] For the reasons discussed above, the appeal succeeds on the ground that the General Division erred in law.

[32] Section 59 of the DESDA sets out the remedies that the Appeal Division can give on appeal. My review of the record indicates that the General Division would have had no option but to find in the Appellant’s favour had it correctly applied the relevant law. As such, I think it appropriate to give the decision the General Division should have given and to let stand the Appellant’s determination that the Added Party was entitled to the death benefit. I do so in the interests of justice and in finding the most expeditious resolution to this proceeding.