Voyer v. M.N.R., docket 97-1767-UI

Date: 19980611

Docket: 97-1767-UI

BETWEEN:

DIANE VOYER,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

SERVICES SANITAIRES GRÉGOIRE LAVOIE INC.,

Intervener.

Reasons for Judgment

Prévost, D.J.T.C.C.

[1] This appeal was heard at Matane, Quebec on May 15, 1998.

[2] It is from a decision by the Minister of National Revenue ("the Minister") dated September 26, 1997 that the appellant's employment with the intervener from May 30, 1993 to May 7, 1994, May 29, 1994 to May 6, 1995, May 28, 1995 to March 2, 1996 and April 1, 1996 to April 4, 1997 was not insurable because it was employment in which the employee and employer were not dealing with each other at arm's length.

[3] Paragraph 5 of the Reply to the Notice of Appeal reads as follows:

[TRANSLATION]

5. In arriving at his decision the respondent Minister of National Revenue relied inter alia on the following facts:

(a) the payer operates a business selling and renting household garbage containers; until December 1993 he also collected household garbage; (A)

(b) Grégoire Lavoie, the appellant's husband since 1974, is the payer's sole shareholder; (A)

(c) the payer's office is located in the couple's home; (A)

(d) the containers were delivered by Grégoire Lavoie until 1995 and thereafter by Nadine Lavoie, the couple's daughter; (A)

(e) Nadine Lavoie also helps with the bookkeeping; (A)

(f) the appellant made up quarterly GST and QST returns, prepared and signed cheques, made entries in the (computerized) accounts, looked after collecting bills and from time to time helped with the delivery of containers; (A)

(g) the appellant had no fixed work schedule: she worked in the evening and during the day on bill collection; (D)

(h) the appellant was paid a gross salary of $640 a week, based on 40 hours' work a week; (A)

(i) the appellant was usually paid for one week a month; (A)

(j) during her unpaid weeks the appellant continued to render certain services to the payer; (D)

(k) during the payer's much busier months, from May to October, the appellant received no more pay than in the rest of the year; (D)

(l) the appellant's alleged work periods do not coincide with the periods of activity of the business or with the periods actually worked by the appellant; (D) and

(m) the appellant's weekly salary was too high for the duties she had to perform . . . . (D)

[4] The Reply to the Notice of Intervention is to the same effect.

[5] In the preceding extract from the Reply to the Notice of Appeal the Court has indicated, in parentheses after each subparagraph, the comments made by the appellant and the intervener's agent, Grégoire Lavoie, at the start of the hearing:

(A) = admitted

(D) = denied

Evidence of the appellant and the intervener

According to the appellant:

[6] As regards subparagraph (g) above, at the start of the week her husband gave her his instructions and he then checked her work every day.

[7] She worked from 8:00 a.m. to 8:00 p.m. and also did what her husband was unable to do.

[8] The telephone kept her busy: she handled whatever she could and took messages for the remainder.

[9] As to subparagraph (j), it is true she answered the telephone as there was only one line for the house and the office, but all she did was to take messages when her husband was not there.

[10] She picked up the mail when it was convenient for her to do so and made deposits and made up certain cheques, but nothing more.

[11] In those periods, she did not handle bids or the correspondence and general office work.

[12] As to subparagraph (k), it is true that she did not receive more pay from May to October than in the rest of the year, but her work was the same during that period.

[13] As regards subparagraph (l), her work did not have to coincide with the intervener's busy periods.

[14] She was always paid for the weeks in which she worked.

[15] As to subparagraph (m), her husband offered her work at this salary and she accepted: moreover, it is the usual salary for the work she did.

According to Grégoire Lavoie:

[16] As regards subparagraph (g), he gave his the appellant specific instructions at the start of the week and she reported her activities to him every day.

[17] She was at his disposal from 8:00 a.m. to 8:00 p.m. and had to do what he told her.

[18] To collect bills, she had to work in the evening in order to reach customers who were out during the day.

[19] As to subparagraph (j), at those times she made out Mr. Lavoie's paycheques and perhaps one or more other cheques when [TRANSLATION] "time was short"; she also made deposits and answered the telephone, which rang in the house, but only to take messages when Mr. Lavoie was out.

[20] As to subparagraph (k), when the intervener was busier the appellant did not have more office work to do.

[21] When she had little office work to do, Mr. Lavoie sent her to make deliveries.

[22] As regards subparagraph (l), in the weeks in which she was paid she handled billing, bill collection and general office work.

[23] The appellant was always paid for the weeks in which she worked.

[24] When she was not on the payroll her main function was making out Mr. Lavoie's paycheque every week.

[25] It was quite often possible for deposits to be made only in the weeks she was paid.

[26] As to subparagraph (m), it was Mr. Lavoie's chartered accountant who suggested the gross weekly salary of $640 to him and he readily accepted the suggestion, especially as his sister-in-law was working in accounting elsewhere and that was what she was being paid.

[27] The appellant was reliable, she [TRANSLATION] "went to pick up money" from customers and [TRANSLATION] "collection" is as important as it is difficult.

[28] Mr. Lavoie [TRANSLATION] "set up" another business and his wife also worked one week a month for it at the same weekly salary, with the result that she was now paid for two weeks a month, which reduced her unemployment insurance or employment insurance benefits accordingly.

[29] The respondent called no witnesses.

Argument

According to Grégoire Lavoie, on behalf of both the appellant and the intervener:

[30] If the appellant had not been there the intervener would have had to hire someone else to do her work.

[31] The intervener did not accumulate work for the appellant, except that it might occasionally wait till she was back at work to cash one or more cheques.

According to counsel for the respondent:

[32] In Attorney General of Canada v. Jencan Ltd. (A-599-96) the Chief Justice of the Federal Court wrote the following for the Court of Appeal, at p. 14:

This provision gives the Minister the discretionary authority to deem "related persons" to be at arm's length for the purposes of the UI Act where the Minister is of the view that the related persons would have entered into a substantially similar contract of service if they had been at arm's length. In this case, the applicant submits that the Deputy Tax Court Judge erred in reversing the Minister's discretionary determination that the Worker and the respondent should not be deemed to be at arm's length for the purposes of the UI Act.

He added the following at p. 18:

The Tax Court is justified in interfering with the Minister's determination under subparagraph 3(2)(c)(ii) - by proceeding to review the merits of the Minister's determination - where it is established that the Minister: (i) acted in bad faith or for an improper purpose or motive; (ii) failed to take into account all of the relevant circumstances, as expressly required by paragraph 3(2)(c)(ii); or (iii) took into account an irrelevant factor.

[33] As in Jencan, the Court is justified in intervening only within these limits and the evidence submitted by the appellant and the intervener does not provide a basis for such intervention.

Analysis

[34] The respondent called no witnesses and the Lavoies testified quite honestly. They appeared to the Court to be honest people who were very anxious to tell the truth and the Court fully believed them.

[35] The Minister did not act in bad faith or for an improper purpose or motive.

[36] It remains to be decided whether he took all the relevant circumstances into account or took an irrelevant factor into account.

[37] The Minister considered that the appellant had no fixed work schedule, whereas the uncontradicted evidence is that she worked from 8:00 a.m. to 8:00 p.m. on a basis of 40 hours a week, following her husband's instructions, and he checked her work every day.

[38] It was natural for her to work in the evening to collect the bills.

[39] There is no rule against working only one week a month when that is enough to handle the secretarial work of a business.

[40] The appellant did little or no work in her unpaid weeks and essentially provided only minor services, which is not unusual for spouses when a business is operated out of their home.

[41] The Court is satisfied with the evidence that the appellant's work was more or less the same from May to October as in the rest of the year, when in addition she was making deliveries.

[42] It is also satisfied with the evidence that the appellant was paid for the weeks during which she actually worked.

[43] Grégoire Lavoie's testimony established that the appellant's salary was reasonable and that the respondent took an irrelevant factor into account in subparagraph (m) above.

[44] The fact that the appellant was hired by another business controlled by Grégoire Lavoie shows that he hires her when he needs her, not in order to obtain benefits for her.

[45] There is insufficient evidence in the instant case to support the Minister's decision.

[46] The Minister's decision was accordingly made contrary to the Act and the evidence is that there is a basis for intervening.

[47] The appeal is accordingly allowed and the subject decision reversed.

Signed at Laval, Quebec, June 11, 1998.

"A. Prévost"

D.J.T.C.C.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 19th day of November 1998

Stephen Balogh, Revisor