Leseru v. M.N.R., docket 97-271-UI

Date: 19980504

Docket: 97-271-UI

BETWEEN:

LIVIU ION LESSURU,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Somers D.J.T.C.C.

[1] This appeal was heard at Montréal, Quebec on March 30, 1998.

[2] The appellant appealed from a determination by the Minister of National Revenue ("the Minister") ruling that his employment with the payer, 9001 0406 Québec Inc., operating Cara Pizza, during the period at issue, namely from June 5, 1994 to August 18, 1995, was not insurable on the ground that there was no employer-employee relationship between himself and the payer during the period at issue.

[3] Section 3(1) of the Unemployment Insurance Act reads in part as follows:

3. (1) Insurable employment is employment that is not included in excepted employment and is

(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;

. . .

[4] The burden of proof is on the appellant. He must show on a balance of probabilities that the Minister's decision was wrong in fact and in law. Each case stands on its own merits.

[5] In making his determination, the Minister relied on the following facts, which the appellant admitted or denied:

[TRANSLATION]

(a) The appellant is a citizen of Romania. (admitted)

(b) The appellant is subject to the immigration legislation requiring an alien to obtain a work permit in order to work in Canada. (admitted)

(c) The appellant worked for the payer from March 28, 1994 to August 13, 1995. (admitted)

(d) The appellant obtained a work permit in Canada valid from February 4 to June 4, 1994 and subsequently obtained a second permit valid from September 26, 1995 to September 25, 1996. (admitted)

(e) During the period from June 5, 1994 to September 25, 1995 the appellant had no valid work permit. (admitted)

(f) During the period at issue the appellant was working in Canada without a work permit. (admitted)

(g) There was no contract of service between the appellant and the payer during the period at issue. (denied)

[6] The Minister relied inter alia on ss. 3(1)(a) and 61(3) of the Unemployment Insurance Act and on s. 18 of the Immigration Act as well as on arts. 9 and 1385 et seq. of the Civil Code of Québec.

[7] The appellant admitted all the facts alleged in paragraph 5 of the Reply to the Notice of Appeal, except for subparagraph (g). The appellant stated that he arrived in Canada in September 1992, after obtaining a work permit for that year. Knowing he had to obtain an annual work permit he applied for one in June 1994, but did not get it. He got work permits for the periods alleged in subparagraph (d) of the Reply to the Notice of Appeal. The appellant has been a Canadian resident since October 1996; however, that fact is of no relevance in this case.

[8] The respondent argued that the purpose of the employment contract with the payer during the period at issue was that the appellant did not have the capacity to enter into such a contract. The respondent relied inter alia on s. 18 of the Immigration Act.

[9] Section 18 of that Act reads as follows:

18. (1) Subject to subsections 19(1) to (2.2), no person, other than a Canadian citizen or permanent resident, shall engage or continue in employment in Canada without a valid and subsisting employment authorization.

(2) No person who is in possession of a valid and subsisting employment authorization shall continue in employment in Canada unless he complies with each of the terms and conditions specified in the authorization.

[10] Since the appellant performed services for the payer in the province of Quebec it is the provisions of the Civil Code of Québec which must be applied in order for a contract to be valid. The relevant provisions of the former Code for the period in question, which must be applied, are as follows:

Art. 13. No one can by private agreement, validly contravene the laws of public order and good morals.

Art. 14. Prohibitive laws import nullity, although such nullity be not therein expressed.

Art. 984. There are four requisites to the validity of a contract:

Parties legally capable of contracting;

Their consent legally given;

Something which forms the object of the contract;

A lawful cause or consideration.

Art. 985. All persons are capable of contracting, except those whose incapacity is expressly declared by law.

Art. 989. A contract without a consideration, or with an unlawful consideration has no effect; but it is not the less valid though the consideration be not expressed or be incorrectly expressed in the writing which is evidence of the contract.

Art. 990. The consideration is unlawful when it is prohibited by law, or is contrary to good morals or public order.

Art. 1062. The object of an obligation must be something possible and not forbidden by law or good morals.

[11] In Abdoulaye Kante and M.N.R. (95-1153(UI)), Judge Pierre Archambault of this Court said the following:

Whether in the old or the new Code, one of the essential conditions for the validity of a contract is the existence of a purpose that is not prohibited by law or contrary to public order. The old and new Codes recognize that a contract having an unlawful consideration or the purpose of which is prohibited by law or contrary to public order is null and of no effect (arts. 989 old Code and 1413 new Code).

[12] In Kathleen Still and M.N.R., [1997] F.C.J. No. 1622, a judgment dated November 24, 1997, the Federal Court of Appeal said the following at paragraph 39:

A contract which is either expressly or impliedly prohibited by statute is normally considered void ab initio. That is to say, prima facie neither party is entitled to seek the court's aid. This is so even if the party seeking relief acted in good faith. Ignorance of the law is no excuse. A court should not be quick to imply a prohibition and must not do so if the statutory prohibition goes to the performance of a contract as opposed to its formation. If the prohibition relates to the terms of performance then an innocent party to the contract may be entitled to enforce the contract.

[13] Having regard that judgment, the Federal Court of Appeal is not prepared to accept that the contract is void ab initio in all the circumstances. The Court raised the question of the contracting party's good faith. It added that while a contract which has an illegal consideration or whose object is prohibited by law or is contrary to public order is null or void, the consequences of such nullity must be considered.

[14] In that judgment the Federal Court of Appeal gave examples of the operation of the good faith question. In the instant case the appellant knew that he had to obtain a work permit annually. As the appellant had already obtained a work permit, he should have been able to foresee the consequences of not having one.

[15] For these reasons, the appeal is dismissed and the determination by the Minister is affirmed.

Signed at Ottawa, Canada, May 4, 1998.

J.F. Somers

D.J.T.C.C.

Case law consulted

David Pena, Owner of Entretien Amedav Enr. and M.N.R. and America Allendes, 94-14(UI), the Honourable Deputy Judge G. Charron, Tax Court of Canada.

Kathleen Still and M.N.R., [1997] F.C.A. No. 1622, the Honourable Mr. Justice J.T. Robertson, Federal Court of Appeal.

Abdoulaye Kante and M.N.R., 95-1153(UI), the Honourable Judge P. Archambault, Tax Court of Canada.

[OFFICIAL ENGLISH TRANSLATION]

Translation certified true on this 14th day of December 1998.

Kathryn Barnard, Revisor