December 1, 1993
25.4.95
The grievor sought payment of a claim for interest on a bridging loan.
The grievor, a career foreign service employee purchased a principal residence and claimed associated fees in accordance with FSD 16.05(a) in May 1987. The employee was assigned abroad and rented the principal residence for a period of one year commencing September 1, 1991, to coincide with the agreed term of duty outside Canada. Shortly thereafter, the employee returned to Canada due to the operational requirements of the department.
In order to re-occupy the principal residence, the employee offered the tenant financial compensation to vacate, for which there are provisions in the Foreign Service Directives to be reimbursed. The tenant refused to vacate the property and it was put up for sale on September 17, 1991, and eventually sold on September 1, 1992.
The employee made an offer to purchase a new residence and applied for and obtained an advance to finance the interest on a bridging loan as per FSD 16.15. The employee took possession of the new property on November 15, 1991.
On September 1, 1992, the previous residence was sold and the employee claimed and was reimbursed the associated legal and real estate fees as per FSD 16.05(a). However, the department denied the employee's claim for the interest on the bridging loan as it was determined that no entitlement existed. The employee was required to reimburse the amount of the advance which the department says was issued in error.
The bargaining agent contended that section 16.01 of the Foreign Service Directive provides for the application of the directive to career foreign service employees, with the exception of sections 16.02, 16.03 and 16.04. Therefore, all other sections of the FSD stand on their own unless otherwise specified.
The department took the position that a bridging loan is only permissible under the provisions of FSD 16.05(a) when it is used to link the two entitlements of the sale of one principal residence and the purchase of one principal residence.
The Executive Committee noted that the Foreign Service Directives Committee came to an impasse. The Executive Committee could come to no agreement.