FPSLREB Decisions

[1]      On September 27, 1999, Michael Bolton, a teacher (ED EST 01) at Indian and Northern Affairs Canada (INAC), grieved the employer's decision to recover overpayments on his salary. These overpayments were the result of incorrect calculations by the employer of Mr. Bolton's entitled annual pay increments.

[2]      On May 1, 2000, Chantal Bernier, Assistant Deputy Minister, INAC, wrote to Mr. Bolton that, with regret, she had no choice but to deny his grievance as she could not make a decision contrary to the Budget Implementation Act 1994, which determined the application of the salary increment freeze for the period of June 15, 1994 to June 15, 1996.

[3]      On May 24, 2000, Mr. Bolton's grievance as well as the grievances of 18 of Mr. Bolton's colleagues were referred to adjudication. These grievances all dealt with the same subject matter, the recovery by the employer of salary overpayments. A hearing before then Board Member Jean-Charles Cloutier was held for all these grievances between July 16 and 18, 2001. The grievor, along with two other grievors, gave evidence during two days of hearing. However, on July 18, 2001, the employer brought forward a motion seeking a decision by Board Member Cloutier with respect to two questions. The first question was whether the grievances were referable to adjudication pursuant to section 92 of the Public Service Staff Relations Act (PSSRA); the second question was whether, as a matter of law, estoppel could operate to preclude the employer from recovering overpayments that were made to the grievors in violation of legislation.

[4]      Written submissions were filed on September 27, October 26 and November 16, 2001 by the representatives of the parties, and Mr. Cloutier rendered a decision on March 12, 2002 with respect to the two questions. Mr. Cloutier's decision on the first question was that the grievances could properly be referred to adjudication pursuant to section 92 of the PSSRA. As for the second question, Mr. Cloutier found the process to recover the salary overpayments from the grievors had been done under subsection 155(3) of the Financial Administration Act (FAA) and the authority to recover an overpayment of salary and wages under that section was discretionary. Therefore, there was no clear positive duty on the employer to recover the amount of the overpayment that would bar the application of the doctrine of estoppel: Anderson and Others, 2002 PSSRB 29.

[5]      On April 6, 2002, Ms. Bramwell wrote to the Board to request that these grievances be heard separately as the matters addressed within the grievances are highly personal by their nature. After several letters had been exchanged between the parties, the Board wrote to the representatives on May 17, 2002, informing them that the grievances would be heard separately. However, the employer could present its common evidence at one time with modifications, if required, in respect of each individual grievance. Also, the Board informed the parties that, as Mr. Cloutier had retired in April 2002 and was not available, the Board had decided to proceed de novo on these grievances.

Evidence

[6]      Mr. Bolton has a bachelor's degree in Financial Planning and Business Administration and a Bachelor of Education. He also received training as a special education teacher. After graduating, Mr. Bolton applied as a supply teacher to the Jamieson Elementary School in September of 1994. This school is situated at the Six Nations Reserve and the teachers are employed by INAC. Shortly after the fall term started, Mr. Bolton began teaching at the school on a full-time basis. In October 1994, Mr. Bolton was offered a term position for three months as a teacher with an annual salary level of $31,418 (Exhibit G-1). This term position was extended in November 1994 until the end of June 1995. Mr. Bolton explained that he did not apply to other schools, as he felt the school was a good place to gain experience even if the salary was lower. Mr. Bolton stated that the reason why the teachers were paid at a lower level than teachers at other school boards was that the teachers living on the reserve paid no income tax, but as a non-native this did not benefit him.

[7]      Initially, he planned to stay for a short period of time as a supply teacher at the Jamieson School and later to seek employment in other school boards in a better-paying position. On August 16, 1995, Mr. Bolton was offered a term position at Jamieson Elementary School as a teacher for one year at a salary of $33,097 (Exhibit G-4), recognizing his one year of teaching experience. Mr. Bolton was informed that the Budget Implementation Act 1994 had the effect of freezing the salary increments on pay scales for the period of June 15, 1994 to June 14, 1996. However, the employer told him that this did not apply to him because, at the end of the 1994-95 school year, he had been terminated and, since there was no continuation of employment, his one year of teaching experience could be recognized.

[8]      Mr. Bolton accepted the teaching position at the Jamieson School even if he believed he would have earned more at another school board. He accepted the job because he liked his work at the school and his friends were working there. He testified that: "I knew I was giving up some money, but done so willingly. I knew that in longer term I would move ."

[9]      Mr. Bolton explained that with his background in financial planning, he had set himself financial goals for his working life. His goals were to save money to purchase a house and to be able to retire at age 55. To attain this, besides his pension contribution he was saving money by depositing it into an RRSP and through mutual funds investments. He budgeted carefully and his goal as a general rule was to save 10% of his earnings.

[10]      On February 25, 1998, Mr. Bolton wrote to Ms. Grimsey of INAC (Exhibit G-6) to request a pay scale adjustment, as he had completed his third additional qualification course which, he felt, entitled him to move up a level in the salary grid. On February 26, 1998, Katherine Knott, Acting District Director for INAC, informed him (Exhibit G-7) that, effective September 1, 1997, his salary had been readjusted to level 6, three years of experience, which entitled him to a total salary of $39,914 per annum.

[11]      On June 5, 1998, Mr. Bolton was offered by the employer (Exhibit G-8) an indeterminate position as a teacher with teaching experience of three years at level 6 for an annual salary of $39,914. After he started working for INAC, Mr. Bolton helped his mother to pay her mortgage by giving her, on average, $200 per month. As she was sick and eventually moved out of her house, Mr. Bolton took on the mortgage of $40,000 and he moved into his mother's house; the house value was of $85,000 and starting in December 1998, he paid $625 per month as a mortgage payment and $250 in utilities. He also bought a car and made payments of $290 per month on a car loan.

[12]      In the spring of 1999, Mr. Bolton applied for a teacher's position at a private school in King City. He did not get the position, but was offered a position at Sterling Hall, which is situated north of Toronto. This position was at a salary of $5,000 more than what he was making at that time with INAC. He did not accept the position, as he liked his work at the Jamieson School and the community and he was ready to forgo some amount of money to keep this. Also, his cost of living would have increased if he had accepted the position at Sterling Hall because he would have had to relocate in the Toronto area.

[13]      In the spring of 1999, he was enrolled in a course in a Masters program in education and the employer paid the tuition for this course. Mr. Bolton explained that he enlisted in the Masters program, as a Masters degree was a requirement by many school boards to become a principal, which was his end-of-career goal.

[14]      Mr. Bolton's girlfriend moved in with him in September 1999. She is a physiotherapist earning $48,000 per year and, since she has moved, she is contributing half of the cost of living.

[15]      On September 14, 1999, Mr. Yuile, Director of Human Resources, INAC, wrote to Mr. Bolton (Exhibit G-9) to inform him of the salary overpayment that had occurred and that there were no other options for the employer but to recover this overpayment. He also informed him that in order to prevent further overpayments, the September 1999 increment would not be paid out in order to correct salary anomalies. On September 15, 1999, Mr. Bolton was taken out of his classroom to a room where Mr. Yuile and two other employer representatives met with him. He was told that the total amount that he owed in salary overpayments was about $14,000. He was given a work sheet (Exhibit G-10) which showed for each year what had been his rate of pay, what would have been the correct pay and the amount therefore of overpayment for that year. The overpayment for 1999 was minimal as the correct pay level was applied early in the school year. These amounts were:

[16]      He was given two options to repay: 36 months by payments of $387.43 or 60 monthly payments of $232.46. However, he was told that there could be some flexibility in the repayment schedule. Mr. Bolton testified that Mr. Yuile told him to write down any personal circumstances that could come into play, as there was always a possibility of forgiveness of the debt. Mr. Bolton was devastated after this meeting and he cried.

[17]      Mr. Bolton explained that, as his pay was reduced from $43,932 to $41,730, he had to change his daily spending habits. He did not want to cash in his RRSP because of the tax consequences; therefore, he cashed some money from his investments and paid out his car loan. He reduced his mortgage payments to $550 per month and he stopped investing and continued to make monthly RRSP contributions of $200 to $300 per month.

[18]      Mr. Bolton testified that had he known his real salary, he probably would have looked for another teaching position. He would have kept his old car longer and made smaller monthly payments on his mortgage. However, he explained that he would have taken the mortgage even at the lower salary.

[19]      On September 21, 1999, Mr. Bolton wrote to Mr. Yuile (Exhibit G-12) to ask what would happen with his pension if he stopped working with INAC. He inquired specifically if the employer could then seize his pension or if it could be transferred to his new school board. He also inquired about the process of applying for hardship, as he explained that he had no money to pay for salary overpayments and could not meet his financial obligations.

[20]      In October 1999, he applied for a teaching position in the town of Simcoe, Ontario. Soon afterwards, he was offered a teaching position at a salary of over $46,000 per year. However, he did not accept the position because he felt he had made a commitment to the school and his students; he felt very close to his students, as a teacher in special education. He had worked with them for several years and he felt the school would not be able to fill his position right away. He also believed that INAC would look into the issue of overpayment and the amount he owed would be forgiven.

[21]      On October 13, 1999, Mr. Yuile wrote to Mr. Bolton (Exhibit G-13) to follow up on his meeting of September 15, 1999, and reviewed in his letter the two options for repayment, indicating that if Mr. Bolton found these amounts to cause extreme financial hardship for him, an alternate plan could be established based on his particular financial situation and the amount he could reasonably repay. It was also indicated that if he chose to pay in instalments, the deduction that would take place would be on his gross monthly salary before any other deductions were made. Consequently, this would lessen the deductions, such as employment insurance or Canadian Pension Plan, lessening the impact of the repayment on his net pay.

[22]      On November 9, 1999, Mr. Bolton wrote to the employer to outline his arguments for financial hardship (Exhibit G-15). He explained in his letter that, had he known his correct salary, he would have looked for a job in another school board. He indicated that he would not have entered into this mortgage at the lower salary, as he could not meet this financial obligation. He stated that he would have bought a less expensive car and that he would have to drop out of the Master of Education program, as it could cost him $7,000 over the next two years. He estimated that he could be paid $10,000 more in the nearest school board and he indicated that he would have taken employment there, had he known his true salary.

[23]      On November 25, 1999, Tom Pettie, Senior Human Resources Advisor at INAC, met with Mr. Bolton to discuss the impact of the repayment deductions on his net pay. Mr. Pettie followed up on their meeting and phoned Mr. Bolton on January 25, 2000. They agreed to a repayment of $150 per month and on January 31, 2000, Mr. Pettie wrote to Mr. Bolton to confirm this arrangement (Exhibit G-18). Mr. Pettie pointed out in his letter that it was understood from their discussion that, while Mr. Bolton had agreed to this amount, this did not mean he had agreed that the recovery action should take place. Mr. Pettie concluded by indicating that, if the agreed amount caused Mr. Bolton extreme financial hardship, Mr. Pettie would see if anything could be done to lower this amount. Mr. Pettie testified that the employer wanted the repayment to be as painless as possible and was open to lowering the amount as long as it was reasonable. Mr. Bolton's monthly repayment of $150 resulted in a net deduction of only $41 per paycheque.

[24]      In cross-examination, Mr. Pettie was asked if he understood that under subsection 155(3) of the FAA, the recovery of the overpayment to Mr. Bolton was discretionary and that the debt could have been forgiven. Mr. Pettie explained that he had no authority to forgive the debt; he could just minimize the impact. As far as he knew, the Minister responsible for Treasury Board was the only person who could decide otherwise.

[25]      On March 13, 2000, Mr. Pettie wrote to Mr. Bolton (Exhibit E-2) to answer Mr. Bolton's question about the impact of the transfer of his pension should he leave INAC. Mr. Pettie indicated that federal departments must recover outstanding overpayment amounts from severance pay and any superannuation contributions that may be available.

[26]      In the spring of 2000, Mr. Bolton applied to the Waterloo Regional District School Board. He was offered a position, which paid $10,000 more than his position at Jamieson. He decided to accept it when he saw that his argument of hardship was not succeeding in having INAC forgive the overpayment recovery.

[27]      When Mr. Bolton accepted the position at the Waterloo School Board, he asked for leave without pay with INAC and this has been his status since September 2000. He has not resigned, but he has no intention of returning to employment with INAC. Until he went on leave without pay, $150 per month was taken off his gross monthly salary and he was able to make a total repayment of $1,050 for that period. Mr. Bolton estimates that next year his salary should be $67,000. He has been contributing to his RRSP since September 2000 for an amount of $600 per month with a lump sum payment at the end of the year. He made a $10,000 contribution to his RRSP in 2001 and has now accumulated approximately $35,000.

[28]      He intends to pursue his Master in Education when the issue of overpayment recovery will have been decided. In the event his grievance is not successful, his intention is that the overpayment be repaid from the transfer value of his pension. Mr. Bolton explained that he has five years of pensionable service with INAC, the value of this being $25,000. As he owes about $13,000 to the employer, only $12,000 remaining would be transferred over to the teachers' pension. Mr. Bolton estimated that this would mean that his retirement age would now be 57 years old. However, Mr. Bolton testified that he understood that he could pay back this overpayment from other sources and therefore not affect the transfer value of his pension.

Arguments

For the Grievor

[29]      Ms. Bramwell reviewed case law on estoppel submitting that, from these cases, the following requirement arose to demonstrate the existence of detrimental reliance in situations of overpayment.

1. There must be an overpayment of salary or other compensation. This overpayment must have the effect of misleading the employee into a bona fide belief in entitlement to a mistaken salary level.
2. The employee must rely on the salary to his detriment, such that he experiences what can be characterized as a material change in circumstances.
3. Mere spending of the money is not sufficient to show a detriment. There must be a commitment made or a project undertaken in reliance on the mistaken salary, which is not reversible due to the contractual nature of the commitment or the passage of time.
4. Two further considerations arise from obiter dicta in several of the cases. There appears to be some duty on the employee to attempt to mitigate the consequences of the employer's error, but this does not appear to extend so far as to require the employee to accept a reduced standard of living (see Molbak). Similarly, there appears to be a duty on the employer to discover and correct the error as soon as possible.

[30]      Ms. Bramwell further submitted that as INAC admitted that the overpayment was its error and always confirmed the erroneous level of salary, the issue to be determined is whether Mr. Bolton relied on the overpayment to his detriment or, alternatively, whether the overpayment resulted in a material change of circumstances which is now irrevocable.

[31]      Ms. Bramwell stated that it was Mr. Bolton's plan to leave INAC at this stage of his career and as such his current increased salary should not be offset against the overpayment. It is clear from Mr. Bolton's testimony that he would not have accepted employment with INAC for the 1995-96 school year and those that followed had he known what his true salary was. He would have pursued employment with another employer at a higher-paying salary and would have either achieved or exceeded the savings he made at the erroneous salary with the Department.

[32]      Ms. Bramwell submitted that if INAC is allowed to proceed with the recovery of the overpayment, Mr. Bolton intends to repay this amount by reducing the transfer value of his federal government pension. The consequence for Mr. Bolton will be that he will retire from teaching two or three years later than he had planned. This detriment greatly exceeds a requirement to merely repay money spent on consumable items.

[33]      Ms. Bramwell argued that INAC could properly require Mr. Bolton to repay the overpayment salary if he had spent it on consumable items such as a car, trips or clothes. It was not the case with Mr. Bolton, who made careful plans laid in the form of an RRSP, a pension, a mortgage and a carefully budgeted way of life. If that groundwork is now pulled out from under him, there is no way for him to rebuild it. It would be inequitable to allow Mr. Bolton to suffer such a great detriment as a result of an error by his former employer.

[34]      Mr. Bolton's ability to mitigate the consequence of the Department's error is limited. Ms. Bramwell submitted alternatively that the five years Mr. Bolton was employed at INAC at his overpaid salary have materially changed his circumstances in a way that is impossible to correct or recapture. She explained that there is no way for Mr. Bolton to recapture the lost gap in growth even if he would increase his earnings by $14,000 and invest it immediately.

[35]      In support of her arguments, Ms. Bramwell relied on the following: Ménard v. Canada, [1992] 3 F.C. 521; Arnold and Others (Board files 166-2-17505, 17506, 17508 to 17511, 17513 and 17514); Molbak (Board file 166-2-26472); Canada (Attorney General) v. Molbak, [1996] F.C.J. No. 892 (Q.L.); Re Ottawa Board of Education and Federation of Women Teachers (1986), 25 L.A.C. (3d) 146.

For the Employer

[36]      Mr. Gaudet submitted that the employer has a statutory right to recover the overpayment by virtue of section 155 of the FAA. However, the grievor can avoid recovery of the overpayment if he establishes that the elements of estoppel by representation are present in this case.

[37]      Mr. Gaudet further submitted that there is no evidence that the grievor relied to his detriment on a salary miscalculation by materially changing his financial circumstances. Mr. Gaudet argued that the grievor was fully able to meet all of his financial commitments during the period he began repaying the debt from February to September 2000. He paid off his car loan; he continued making his mortgage payments; he continued helping his mother financially and he continued making contributions to his RRSP. Indeed, he has continued to make contributions to his RRSP throughout the period he has known about the overpayment and the current value of his RRSP is $35,000, $10,000 of which he contributed in 2001. As well, in 2000, the year he began repaying the overpayment, he contributed $5,000 to his RRSP.

[38]      Mr. Gaudet stated that there is no evidence that the grievor will be unable to achieve his objective of retiring at age 55. He is only 32 years old and has 23 years until retiring at age 55 to contribute to his RRSP and his pension. He expects to earn $67,000 per year in September 2003, significantly more than the average salary he calculated in 1994 he needed in order to retire at age 55.

[39]      Mr. Gaudet also stated that the evidence did not support the grievor's assertion that he would have left INAC to earn a higher salary at another school board had he known of the overpayment. Salary was clearly not the most important consideration to the grievor when he began his career, as he only applied to INAC.

[40]      In the spring of 1999, he was offered a position in a private school, which paid $5,000 more than his then salary, and which he did not accept because he "liked working at Six Nations". Finally, soon after finding out about the overpayment and what his true salary was, Mr. Bolton turned down, in October 1999, a position that was offered to him in a school in Simcoe. Mr. Gaudet disputed the reasons given by Mr. Bolton, stating that the more likely reason that Mr. Bolton did not accept this position was that he did not want INAC to recover the overpayment from his pension if he left INAC to go to teach at another school board. In fact, the evidence demonstrates that INAC made every attempt to accommodate the grievor by reducing the impact that recovery of the overpayment would have on him. The elements of an estoppel not being established on the evidence in this case, the grievance should be dismissed.

[41]      In support of his arguments, Mr. Gaudet relied on the following: Ménard vs. Canada, [1992] 3 F.C. 521 at 529; Scotsburn Co-operative Services Ltd. vs. WT Goodwin Ltd., [1985] 1 S.C.R. 54 at 66; School District No. 39 (Vancouver) and I.U.O.E., Loc. 963 (2000), 92 L.A.C. (4th) 182; Element (Board file 166-2-27688).

Reasons for Decision

[42]      In Rural Municipality of Storthoaks v. Mobil Oil Canada Ltd. (1975), 55 D.L.R. (3d) 1, the Supreme Court of Canada found that money paid to another under a mistake of fact is recoverable unless estoppel is established or if the party who was mistakenly paid had materially changed its circumstances as a result of the payment.

[43]      These are Ms. Bramwell's two main arguments. I will answer them by dealing first with estoppel and then the material change of position.

Estoppel

[44]      As the Federal Court found in Canada v. Molback, (supra) an adjudicator has jurisdiction under paragraph 92(1)(a) of the PSSRA to hear a grievance and apply the principle of estoppel when an employee is grieving the decision by the employer to collect an overpayment in salary.

[45]      Estoppel is a rule of evidence based on equity. Lord Denning defined estoppel in Combe v. Combe, [1951] 2.K.B. 215 (C.A) at p. 220 in the following terms:

. where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualifications which he himself has introduced.

[46]      It is not in dispute that the employer made errors in calculating Mr. Bolton's salary for several years. Therefore, to determine if estoppel applies to this grievance it must be established that Mr. Bolton detrimentally relied upon this misrepresentation of his salary.

[47]      Ms. Bramwell submitted that the detrimental reliance of the grievor was twofold. First, that he would not have accepted employment with INAC in 1995-96 or following years had he known his true salary. Secondly, if INAC is allowed to proceed with the recovery of the overpayment, Mr. Bolton will retire from teaching two or three years later then he had planned.

[48]      Mr. Gaudet submitted that the evidence does not support the grievor's assertion that he would have left INAC to earn a higher salary at another school board had he known of the overpayment. He had several offers of teaching positions with a higher salary and he declined these offers. Mr. Gaudet further submitted that the grievor's assertion that he will be unable to retire at age 55 if he has to repay is based on nothing more than mere conjecture. The grievor was fully able to meet all of his financial commitments during the period he began repaying the debt from February to September 2000 and, since he has known about the overpayment, the grievor has had ample opportunity to arrange his financial affairs in order to repay the outstanding debt and still meet his goal of retiring at age 55.

[49]      I cannot come to the conclusion, as submitted by the grievor, that he would have refused a position at INAC in 1995 had he known that his true salary was $1,679 less than what he was paid at the time. From the evidence it is clear that there were other reasons in Mr. Bolton's mind for accepting a position and staying at the Jamieson School. He testified that when he initially accepted a position at the school, he knew that the position paid less than similar positions in other school boards. He explained that he accepted that it paid less money, as he knew that in the longer term he would move to a better-paying teaching position at another school.

[50]      Mr. Bolton also knew that as a result of the Budget Implementation Act of 1994 he was not credited for a second year of teaching experience in 1995 and 1996. Had he chosen at that time to find employment in another school board, that year of experience would have been credited but he accepted willingly to forgo this increment. Mr. Bolton was offered a teaching position in the spring of 1999 in a private school north of Toronto with a salary increase of $5,000. He rejected the offer. There were clearly factors other than financial ones that came into play. He explained at the hearing that there would have been relocation expenses and that he liked working at Jamieson School. Similarly, when the employer informed him of the overpayment on his salary, Mr. Bolton was offered a teaching position in Simcoe which paid over $5,000 more. He refused this offer again, as other factors, such as his commitment to his students, weighed on his decision. I therefore cannot conclude that had Mr. Bolton known his correct pay in 1996, 1997 and 1998, he would not have accepted the offer of employment at INAC.

[51]      Ms. Bramwell stated in her arguments that one of the requirements to demonstrate the existence of detrimental reliance in the situation of overpayment was a commitment made or a project undertaken in reliance on the mistaken salary that is not reversible due to the contractual nature of the commitment or the passage of time. She submitted that, as Mr. Bolton testified, he had a plan to retire at age 55 and that because of the overpayment of the employer on his salary, he would now have to work two or three additional years. However, Mr. Bolton also testified that he understood that he could borrow money to repay the employer to avoid any impact on his pension transfer. Mr. Bolton is understandably upset at having to repay such a large sum. However, with his financial planning background, I am sure that he will eventually accept that it is in his interest to repay the amount still owing and therefore have no impact on the transfer value of his pension. He would therefore be eligible for pension at age 55, as he had initially planned.

[52]      Mr. Bolton chose to stop repaying the employer once he left the employment of INAC for the higher-paying job at the Waterloo Regional District School Board. He testified that he planned to save 10% of his salary at the beginning of his career. When he started at the Waterloo School Board he was earning $54,000 a year and he expects to earn $67,000 in 2003-2004. Since leaving employment at INAC, he has been able to save considerably more than 10% in RRSP contributions alone. He could have saved 10% of his salary as he had planned and still repay a considerable part of the sum due to the employer.

[53]      In effect, what the grievor is asking me to do is to put him in a more favourable position than if he had stayed employed at INAC and the recovery of the overpayment had been made out of the deductions to his salary. This would be unfair and unjust as the requirements to establish the existence of estoppel have not been made out.

[54]      I have reviewed carefully the evidence before me to find if there was any other evidence of detrimental reliance by the grievor. He stated that he would have kept his old car longer had he known his real salary. Old cars eventually need to be repaired and at some point the purchase of a new car makes more sense than having an old one repaired. The monthly payment of $290 was reasonable and the purchase of a new car in these circumstances does not constitute evidence of detrimental reliance.

[55]      Mr. Bolton testified that he would have entered into the mortgage even at a lower salary. Until he went on leave without pay, he was able to make a repayment of $150 per month and he continued to contribute to his RRSP by monthly contributions. He was able to meet all his financial obligations; the changes he made were cashing some of his investments to pay out his car loan, reducing his mortgage payment and he stopped investing money. There was no evidence given by the grievor that these changes were to his detriment. Given the volatility of the financial market since that date, it might be that cashing in on some of his investments has been beneficial to Mr. Bolton. Furthermore, he must have saved some interest cost on his car loan. However, no evidence was given one way or the other on this matter. The onus is on the grievor to establish that estoppel applies here and he failed in this as I am not satisfied on the evidence that Mr. Bolton detrimentally relied on the miscalculated salary.

Material Change of Position

[56]      Ms. Bramwell submitted alternatively that Mr. Bolton materially changed his position on the basis of the higher pay. In Re Municipality of Storthoaks (supra) at page 11, Justice Maitland of the Supreme Court of Canada reviewed the evidence to establish if the municipality had materially changed its circumstances as a result of the payment. He concluded that it did not as there was "no evidence of any special projects undertaken or special financial commitments made because of the receipt of these payments", nor had it "altered its position in any way because these moneys were received."

[57]      Likewise, in the instant case, I did not find any such evidence. The reasons that I explained in my findings on the issue of estoppel, apply here as well. Mr. Bolton's plan to retire at age 55 is not really put in jeopardy by the recovery of the overpayments. He testified that he would have taken the mortgage even at the lower salary. There is no evidence that Mr. Bolton in any way changed his position because of the overpayment.

[58]      For all these reasons, the grievance is denied.

[59]      Any of us would be quite upset in a similar situation to that faced by Mr. Bolton for having to repay such a substantial sum to our employer. I believe the employer's representatives understood this and, accordingly were very flexible as they came to an agreement with Mr. Bolton that he would repay his debt to the employer by monthly instalments of $150 over a period of seven years. As he would not be charged any interest for such a long period, this would significantly lighten the financial burden of repayment for Mr. Bolton. I suggest that the parties discuss whether some accommodation could still be made in the schedule of repayment of the overpayments by Mr. Bolton.

Guy Giguère,
Deputy Chairperson

OTTAWA, June 3, 2003.