# 2014-111 - Negligent Misrepresentation, Rent Ceiling Increase

Case Summary

F&R Date: 2014–11–26

The grievor grieved a decision to deny him a rent ceiling increase (RCI) for his rental accommodation while on an out of country posting. The grievor argued that he was aware that the monthly rent for the home he chose exceeded the pre-authorized rent ceiling (RC), but claimed there were no other alternatives that met his family's safety and children's education requirements. The grievor submitted that by denying him a RCI, he was unfairly being held accountable for the errors of administrative staff who authorized a higher household size (HHS) and advised him to request a RCI. As redress, the grievor requested an initial RCI to $3,500 USD per month, with yearly increases thereafter.

The Initial Authority (IA) determined that the RC established by the Director Compensation and Benefits Administration (DCBA) was adequate at the time of the grievor's house hunting trip (HHT) and denied the grievor's request for a RCI. In reviewing the grievance, the IA also found that the grievor's monthly rent was above the RC for HHS five. As a result, the IA determined that the grievor's HHS election of five was inappropriately approved. The IA therefore directed that the grievor's RC benefits be recalculated in accordance with HHS four and any overpayment be repaid by the grievor. As a result of the IA decision, the grievor also grieved the recovery action associated with the reversal of the HHS five approval.

The Committee noted that in accordance with Military Foreign Service Instruction (MFSI) 10.5.08(5), if local conditions rendered the rental allowance inadequate, the RC could be increased by an amount authorized by DCBA. The Committee found that, in spite of considerable divergence of opinion, a review conducted by DCBA demonstrated that it was possible for the grievor to find a suitable rental home for his family within the parameters of HHS four and within the RC. Therefore, the denial of the RCI by DCBA was in accordance with applicable regulations and the grievor had not been aggrieved by this decision.

The Committee also agreed with the IA that the grievor did not meet the conditions necessary for approval of a HHS of five, as set out in MFSI paragraph 10.5.05(3), given that his monthly rent was above the RC for HHS five. Pursuant to the MFSI, the grievor was only entitled to benefits and allowances associated with HHS four. The responsible Canadian Armed Forces (CAF) administrative staff erred in approving the grievor's election to increase his HHS to five.

In the Committee's opinion, this erroneous approval amounted to a situation of negligent misrepresentation on the part of the CAF. The Committee found it reasonable to believe that if the grievor had known he would bear the responsibility for the difference in RC between HHS four and HHS five and been confronted with the fact that his RCI request would not be automatically approved, he would have rethought his choice of accommodation and followed a different course of action.

The Committee recommended that the grievor's request for a RCI be denied. The Committee further recommended that the grievance be forwarded to the Director Claims and Civil Litigation, on the basis of negligent misrepresentation, with a recommendation that the grievor be compensated for the recovery action taken against him in relation to the improperly approved HHS five.

CDS Decision Summary

CDS Decision Pending