Date: 19980818
Docket: 97-1300-UI
BETWEEN:
DENISE LABRECQUE,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Tardif, J.T.C.C.
[1] This appeal was heard at Percé, Quebec, on August
6, 1998.
[2] It is from a determination dated May 2, 1997, according to
which the appellant’s employment with boat owner
Ludger Després during the period from April 28 to
July 20, 1996, was excepted from insurable employment because she
was not dealing with him at arm’s length.
[3] The appellant and Ludger Després, in his capacity
as payer, testified in support of the appeal. At the commencement
of the hearing, a number of the allegations made in support of
the determination were admitted, those in the following
subparagraphs in particular:
[TRANSLATION]
(a) the payer had been a lobster fisherman since 1990;
(b) he had only one customer, Crustacés de Malbaie
Inc.;
(c) the payer caught 14,000 pounds of lobster in 1996;
(d) the payer’s gross fishing income and net fishing
income in 1996 were $55,620 and $241, respectively;
(e) the payer is the appellant’s husband;
(f) in addition to taking part in the fishing himself, he
required the services of the appellant and a fisherman’s
helper;
(g) the appellant’s alleged duties included going out to
sea seven days a week, putting rubber bands around the
lobsters’ claws, transporting the catch to the
customer’s premises, getting bait, going to get gasoline
and washing the boat's windows;
. . .
(i) during the period at issue, the payer was accompanied by
his fisherman’s helper when he went out to sea;
. . .
(k) the fisherman’s helper was paid $650;
(l) the fisherman’s helper began receiving that amount
regularly as soon as the season began;
(m) during the period at issue, the appellant received
advances of $300 a week on her wages;
(n) at the end of the period at issue, the appellant’s
wages were adjusted to $700 a week;
(o) at the end of the period at issue, the appellant was given
a cheque for $4,349.03 as a pay adjustment;
(p) the cheque was deposited in the payer’s savings
account;
(q) the appellant allegedly worked 70 hours a week;
(r) the appellant and the payer are not dealing with each
other at arm’s length within the meaning of the Income
Tax Act . . . .
[4] Only subparagraphs 13(h), (j) and (s) were denied. They
read as follows:
[TRANSLATION]
(h) in practice, this type of fishing is normally done by two
people;
. . .
(j) in previous years, the payer was accompanied by only one
person when he went out to sea;
. . .
(s) if the appellant had been dealing with the payer at
arm’s length, she would not have been hired to do work such
as this.
[5] The evidence, which consisted of the testimony of the
appellant and the payer, showed that the fishing process and
method changed considerably starting in 1996. The payer had been
using the “loose” fishing method, but in 1996 he
began using the “line” or “sling”
process. The witnesses explained that instead of having
individual lobster traps that had to be hauled up one by one and
each of which required a buoy, the “line” process
made use of a rope to attach seven or eight traps together with a
single line, and one buoy was placed at each end to mark the
location of the row of lobster traps.
[6] According to the captain, when the traps were hauled up,
at least two employees were needed on deck to take the lobsters
out of the traps and check whether bait had to be put in the
traps or repositioned.
[7] He also explained that this method was by far the most
common, since only one fisherman out of 17 or 18 in the
Percé area used the “loose” fishing process
involving isolated, individual traps.
[8] Ludger Després further explained that the new
process was more productive because the traps were more stable on
the sea floor. With the “line” process, the entire
line grouping together several lobster traps was heavier and
therefore less likely to move as a result of winds or currents.
He also explained and, above all, fully justified the difference
between the $700 paid to the appellant and the $650 paid to the
fisherman’s helper. His explanation was that the
fisherman’s helper finished his work as soon as they got
back to the wharf, whereas the appellant was responsible for
delivering the lobster catch to the plant, getting herring to be
used as bait for the next day's lobster fishing and buying
gasoline; she also washed the boat on arriving with the bait and
gasoline for the next day’s fishing.
[9] Mr. Després also explained that his spouse had
agreed to be paid by means of advances with an adjustment at the
end based on the quantity and market price of the lobster
delivered during the fishing season. According to the boat owner,
this payment method was popular with and very common among
fishermen’s helpers.
[10] He said that the appellant’s wages were within the
norm and also took account of the quality of the work done by the
appellant, whom he described as a very productive employee.
[11] There is absolutely nothing in the evidence that might
justify my rejecting all or any part of the testimony given by
the two witnesses. They both testified well and I consider both
of them credible. The appellant never tried to avoid questions
and answered openly and spontaneously.
[12] Although it may seem unacceptable or implausible that
someone would deposit his or her pay in his or her spouse’s
account, this is still a very common practice and one that, in my
view, is not determinative; what is determinative is whether or
not fair wages are paid for the work done. The way in which wages
are used or disposed of may be relevant or may be a factor in
completing evidence, but it is certainly not determinative in
itself, since all individuals are perfectly free to dispose of
the money they earn through their work.
[13] The evidence also showed that this Court has previously
considered the appellant’s work in a judgment rendered by
the Honourable Deputy Judge Cuddihy on August 23, 1996 (file No.
96-184(UI)).
[14] At the time of that judgment, Ludger Després was
using the “loose” lobster fishing process, that is,
with individual traps. The evidence clearly showed that the
change in the process used occurred during the 1996 season.
[15] On the strength of that judgment affirming his
determination, the respondent clearly dealt with this case in a
very perfunctory manner, according no credibility to the
interested parties as regards their presentation of new facts.
Assuming that lobster fishing involved the work of two people,
the respondent quickly concluded that the facts were either
inaccurate or fabricated and that the need for workers had been
exaggerated.
[16] I believe that this was a serious error with regard to a
fundamental aspect of the case; what is more, the issue involved
was entirely determinative, since the number of fisherman’s
helpers had a crucial impact on the assessment of the nature of
the work done. Since the respondent started from the premise that
lobster fishing can be done by two people, everything else became
distorted, especially since the respondent was already biased
against the appellant because of this Court's earlier
decision, on which he placed great emphasis. Moreover, the
respondent clearly assessed the appellant’s work based on
facts that were inconsistent with reality. As a result, his
analysis became vitiated and distorted and necessarily led to a
conclusion that was totally inappropriate and unreasonable.
[17] Thus, not only do I consider the issue of the number of
fisherman’s helpers determinative, but it also appears that
all of the other information in the case was misinterpreted or
shaped by a clear bias against the appellant. The appellant was
entitled to have the respondent exercise his discretion neutrally
and objectively, confining himself to all the facts in the single
period at issue that was concerned in the assessment.
[18] The discretion was exercised in a tendentious, biased
way, and this Court accordingly claims the right to assess the
evidence from the standpoint of a trial de novo.
[19] The respondent chose not to call any witnesses, which
means that the only material to be considered is the evidence
consisting of the testimony of the appellant and her spouse, who,
as I said, are entirely credible. The respondent admitted the
content of a number of paragraphs in the notice of appeal, some
of which I view as very relevant in determining whether there was
a genuine contract of service between the appellant and the
payer. I am referring, inter alia, to the following
paragraphs:
[TRANSLATION]
3. Ludger Després, hereinafter referred to as
“the payer”, is the appellant’s husband;
4. The payer is a professional lobster fisherman who sells his
catch to Crustacés de Malbaie Inc.;
5. The appellant has been working for the payer for many
years;
7. During the period at issue, the appellant was paid $700 a
week;
11. The lobster purchaser, Crustacés de Malbaie,
advanced part of the appellant’s wages during the season,
as is a common practice in the fishing industry;
[20] In the circumstances, all the elements required for a
genuine contract of service to exist are present; moreover, the
evidence as a whole makes it possible to conclude that the
criteria set out in paragraph 3(2)(c), namely the
remuneration paid, the terms and conditions, the duration and the
nature and importance of the work performed, fully support the
existence of a genuine contract of service. The parties would
have entered into a substantially similar contract of employment
if they had been dealing with each other at arm’s
length.
[21] Accordingly, there was a genuine contract of service. For
all these reasons, the appeal is allowed and the
respondent’s determination is reversed, since the
appellant’s employment during the period from April 28 to
July 20, 1996, constituted a contract of service within
the meaning of the Unemployment Insurance Act.
Signed at Ottawa, Canada, this 18th day of August 1998.
“Alain Tardif”
J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 2nd day of March
1999.
Stephen Balogh, Revisor
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