Executive Summary: Key Legal and Evidentiary Issues

• At issue was whether the Canada Revenue Agency's Second Review decision finding the applicant ineligible for the CERB was reasonable.
• Eligibility turned on the $1,000 income limit, which required the reviewer to determine when the applicant's commission income was earned and to which benefit period it belonged.
• Evidentiary dispute centred on whether annotated bank statements and a Royal LePage Realty tax worksheet sufficed to show the timing of income, given the absence of closing contracts.
• The reviewer's failure to address that documentation rendered the reasons unintelligible and the decision unreasonable.
• Procedural fairness was raised by the applicant but left undecided, as the reasonableness finding disposed of the application.
• Remedy and costs were determined, with the matter remitted for redetermination by a different official.

Facts of the case

Aly Khan Pira, a real estate agent who represented himself, applied for and received the Canada Emergency Recovery Benefit (CERB) for five periods in 2020. Although he sold some properties during that time, he said his business had been reduced by COVID-19. The CRA found him ineligible for the periods claimed because he had not provided closing contracts for some of his sales, which left the Second Reviewer unable to determine how to allocate the income he earned. Pira sought judicial review of that decision, arguing it was both unreasonable and procedurally unfair.

Conditions of eligibility at issue

This is a benefits-eligibility matter, so the relevant terms are the CERB eligibility conditions rather than a private contract. The key condition was that a claimant could not earn more than $1,000 during a benefit period, which made it essential to know how much income the applicant earned and when. During a phone call with Pira and his accountant, the Second Reviewer made clear that he needed contracts showing when the various real estate deals closed so the income could be attributed to the correct periods. The reviewer indicated that other documents could be provided, but that "if [the Second Reviewer] could not clearly see when his income was earned then [the Second Reviewer] would deny."

The court's reasoning and analysis

Pira raised privacy concerns about disclosing client information but submitted several documents, including some real estate agreements, his Royal LePage Realty tax worksheet, and bank statements annotated by his accountant showing deposits of commission from various sales. The Second Reviewer nonetheless found him ineligible on the basis of insufficient documents, reasoning that without contracts showing when the deals closed, it was not possible to determine how to allocate the earnings. Justice Pentney held this reasoning to be flawed. The reviewer's notes, which formed part of the decision, never mentioned or discussed the tax worksheet or the annotated bank records. While Pira had not produced the actual contracts of sale, the annotated bank statements clearly showed which deposit corresponded to which transaction — including each transaction the reviewer had flagged as lacking documentation — and the tax worksheet recorded earning dates that aligned with the deposits within a few days. Because the reasons were silent on this essential evidence, the decision was unintelligible: there was no way to tell whether the documents had been found insufficient, doubted for authenticity, or simply overlooked. The Court also addressed an argument raised at the hearing that the reviewer may have been concerned about whether Pira's working hours had actually been reduced during the benefit period, but observed that this concern, too, appeared nowhere in the notes and was never put to Pira, denying him any chance to respond with evidence of the impact of COVID-19 on his business. Where a claimant supplies alternative documents conveying the same information that was requested, the Court held it was incumbent on the reviewer to explain why those documents were inadequate.

Ruling and outcome

The Court granted the application for judicial review, quashing the Second Review decision and remitting the matter for redetermination by a different official, and amended the style of cause to name the Attorney General of Canada as Respondent. The applicant, Aly Khan Pira, was the successful party. As for any monetary relief, none was ordered: the Court expressly awarded no costs, and the judgment granted no damages or other sum, the only relief being the quashing of the eligibility decision and its reconsideration.