Legal Review of Overpayment Cases

Topic

Legal Review of Overpayment Cases

Case number

• 2015-228 (F&R date: 2016-02-29)

Description

The Committee found that the military overpayment provisions provide no explicit requirement to evaluate defences or counterclaims to a claim that an overpayment is a debt due the Crown. In the Committee’s view, whenever a Canadian Armed Forces (CAF) member is faced with the recovery of an overpayment, which is essentially a debt due to the Crown, there should be provisions for CAF members to put forth a defence to the claim, or a counterclaim to be considered in quantifying any amount in excess of entitlement. It is simply unfair of the CAF to unilaterally declare that a military member has received a payment in excess of their entitlements and then to initiate recovery action, without giving that CAF member an opportunity to challenge the debt.

Recommendation

The Committee recommended that the Chief of the Defence Staff (CDS) consider an amendment to Military Pay Administrative Instruction 8.1 to add a requirement to seek a legal opinion as to whether an overpayment is a debt due to the Crown in cases where a significant sum is involved; where there is uncertainty concerning the applicable legal principles; or, where a CAF member has made representations challenging the basis for the intended recovery.

The Committee further recommended that the CDS consider whether the definition of claims in the Definition paragraph of Defence Administrative Order and Directive 7004-1 (Claims and Ex Gratia Payments) should be amended to clarify that “claims” includes a claim for loss and recovery of money.