# 2013-039 Pay and Benefits, Overpayment, Promissory Estoppel, Recovery of Overpayment/Debt Write-Off, Separation Expense (SE)

Case Summary

F&R Date: 2013–07–19

Upon posting, the grievor requested and was granted an imposed restriction status and commenced receipt of separation expense (SE) benefits. When the grievor requested an extension of his imposed restriction status, approximately two years later, the Director Compensation and Benefits Administration reviewed the grievor's status and determined that he was never eligible for SE benefits as his spouse had never resided with him at his place of duty. Recovery action was initiated followed by the submission of this grievance. The grievor argued that he should be excused from repayment as he relied in good faith on the advice of those in positions of trust and responsibility, who did not act with due diligence.

The issue before the Committee was to determine whether the decision to recover the SE benefits was justified and in accordance with the applicable policy.

There is no Initial Authority (IA) decision on file as the IA was unable to render a determination within the applicable time limits and the grievor did not grant an extension.

In this case, the Committee found that the couple did not normally reside together at the grievor's place of duty nor were they living separately for military reasons as required for the purposes of SE benefits in accordance with Compensation and Benefits Instructions article 209.997(2) and 209.80(3). As a result, the grievor was never entitled to the SE benefits that were paid to him.

The Committee considered the grievor's argument that he should not be held responsible for an error made by the Canadian Forces (CF) and examined whether the doctrine of promissory estoppel could serve to obviate the requirement for recovery of the overpayment. The Committee found that although the Crown has the right to recover overpayments of salary or benefits from CF members, as stipulated by subsection 155(3) of the Financial Administration Act (FAA), it did not preclude the application of estoppel. In addition, the Committee was of the opinion that the mere fact that the benefit paid in error is governed by a Treasury Board policy does not preclude the application of estoppel in cases of overpayment and cited case law in support of estoppel being applied where Government actions are challenged.

Finding that the CF made an erroneous representation to the grievor when they authorized payment of SE benefits and considering the grievor relied on this representation to his financial detriment, the Committee concluded that the CF is estopped from recovering overpayment made to the grievor. Given that the Chief of the Defence Staff (CDS) is charged with the control and administration of the CF and the Final Authority in the grievance process, pursuant to sections 18 and 29.11 of the National Defence Act, and given the discretion found in subsection 155(3) of the FAA, the Committee was of the opinion that this remedy was available to the CDS.

The Board recommended that the CDS uphold the grievance.

CDS Decision Summary

CDS Decision Date: 2014–12–09

The CDS agreed with the Committee's recommendation that the grievance be upheld, however, he disagreed with the Committee that the doctrine of promissory estoppel can be applied. The CDS was satisfied that except for the period of his military training, the grievor had a girl-friend with whom he normally resided and who became his common-law spouse/dependant. The CDS found that the grievor's situation merits the exercise of the Minister special powers as per CBI 209.013; thus he deemed that the grievor was eligible for SE during the time in question.