# 2013-006 Pay and Benefits, Accommodation, Military Foreign Service Instruction (MFSI), Overpayment, Recovery of Overpayment/Debt Write-Off

Case Summary

F&R Date: 2013–05–29

During his posting to a city in Europe, the grievor selected a house where the rent was above his rent ceiling entitlement. Before he signed a lease, he sought guidance from the real estate agent and the Canadian Forces Support Unit (Europe) Housing Officer and was told not to include compound fees in the rent ceiling when looking for a house, as compound fees associated with the residence would be reimbursed under his utility allowance. He then signed the lease and applied to the Director Compensation and Benefits Administration (DCBA) for a rent ceiling increase through the Housing Officer who did not refer to compound fees in the submission. Shortly thereafter, a rent ceiling increase was authorized by DCBA.

The grievor was subsequently advised that compound fees must be included in the rent allowance and could not be reimbursed through the utility allowance and that he was only entitled to a rent allowance in the amount of his rent ceiling. He was also informed that since there was no escalator clause in his lease, he had been incorrectly authorized a rent ceiling increase by the DCBA. The Canadian Forces (CF) commenced recovery action, informing the grievor that he had been receiving a rent allowance as well as compensation for his compound fees which, when combined, was higher than his rent ceiling.

The grievor insisted that he was entitled to a retroactive rent ceiling increase for his posting and that the compound fees should have been included as part of his actual monthly rent because he had asked for and received permission to rent a bigger house. The Director General Compensation and Benefits, the Initial Authority (IA), acknowledged that the grievor had received bad advice. However, the IA stated that the grievor had rented a house in excess of his entitlement in both size and rent ceiling, and that the policy did not permit the DCBA to increase his rent ceiling based on an escalation clause. Although she granted the grievor a rent ceiling increase effective the year of his posting based on the inflation rate, she disallowed the escalation clause increases that had been previously granted by the DCBA and denied the grievance.

The Committee observed that the CF and its representatives had provided non-compliant policy advice to the grievor and that his compound fees were administered incorrectly. The Committee was satisfied that the grievor acted in good faith and that, had he been correctly informed that he was not entitled to sign a lease with the terms and conditions of the lease he did sign, he would have continued looking for suitable accommodation and would have avoided the detrimental consequences of recovery he was later faced with. The Committee found that the grievor relied on the advice of CF subject matters experts to his detriment and, as such, was entitled to a retroactive rent ceiling increase for his posting to Europe and that the CF was estopped from recovering the overpayments. The Committee recommended that the grievance be granted and that the grievor's rent ceiling be increased pursuant to the policy such that the rent and compound fees were included in the rent ceiling. The Committee also recommended that in the event the Chief of the Defence Staff disagreed with this recommendation, all recovery action be estopped and all monies recovered to date be reimbursed to the grievor since the overpayments were made through no fault of the CF member.

CDS Decision Summary

CDS Decision Date: 2015–12–11

The CDS partially agreed with the Committee's findings and recommendations. The CDS acknowledged that the grievor was aggrieved but he did not support the Committee's recommendation to grant the grievor a Real Ceiling Increase (RCI) that would cover his rent and compound fees. Also, the CDS did not agree with the Committee's alternative recommendation that all recovery action be estopped. Although the CDS agreed with the Committee that estoppel in public law can only apply in circumstance where there is an exercise of discretion, he found that such discretion did not exist with respect to the recovery of overpayments within the CAF, because QR&O 203.04 imposes a mandatory obligations on CAF members to refund overpayments and on accounting officers to collect them.

The CDS found that under article 10.5.08 of the MFSI, DCBA was not limited to the Statistics Canada yearly inflation rate and did not endorse the explanations given by DCBA and the IA. The CDS was satisfied that, based on the information available at the time, there was sufficient evidence to support a RCI Increase of 19.1% for that city in Europe, which better reflects the real estate market at the time of the grievor's posting, even if it did not completely cover all his expenses.