Stanley v. M.N.R., docket 95-1612-UI

Date: 19970123

Docket: 95-1612-UI

BETWEEN:

WILLIAM ROBERT STANLEY,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

Reasons for Judgment

Margeson, J.T.C.C.

[1] This is an appeal from the determination of the Minister that the Appellant had no earnings on which unemployment insurance premiums were payable, while he was selling to Carr’s Lobster Pound Ltd., (the buyer) during the periods from May 28, 1990 to October 29, 1990 and from August 3, 1991 to August 31, 1991, within the meaning of the Unemployment Insurance Act (the Act) pursuant to the Unemployment Insurance Regulations, Part V, Fishermen’s Regulations (the Fishermen’s Regulations).

[2] James Russell Gallant testified that he knew that the Appellant and had given him a hand with oysters, cohogs and mussels. “I gave him a hand placing them in his car from his house”. This had occurred three to four times in the Fall of 1990-1991.

[3] The products were contained in four-peck boxes with handles. They were heavy but the witness could load them himself. He loaded five to six boxes of oysters. He would go up to West River and pick them up for the Appellant. He also picked up cohogs at West River. Then he said that he was not sure.

[4] He also mentioned Governor’s Island and said that he went to Nine Mile Creek for oysters in his station wagon. He accompanied the Appellant to Carr’s Lobster Pound at Stanley Bridge. This was possibly 1989, 1990, 1991 or 1992. He took them (the products) there to sell but the witness did not see any money change hands. This witness helped unload the product to the ground and then the workers at Carr’s Lobster Pound took them into the pound. They never discussed the transaction and the Appellant did not say how much he received for them. He saw no documentation but did see “Billy coming out with a slip”.

[5] In cross-examination he admitted that he had never fished with the Appellant, nor gathered clams with him. He did not know if the Appellant gathered clams.

[6] Florian Bryan testified that he had formerly worked with Fisheries and Oceans Canada as an enforcement officer, a field officer and as a statistics coordinator. He had met the Appellant and had checked him about twice yearly since the 1970s. He also saw him as part of a crew on a lobster boat, had seen him on the flats gathering cohogs and on a bar clam harvester near Governor’s Island.

[7] The Appellant always had a valid licence for the Spring Lobster Fishery and he never found him doing anything illegal.

[8] He said that all “buyers” must provide a true return to the Department of Fisheries and Oceans, (DFO). They are given “purchase slip books” by the DFO. Carr’s Lobster Pound used them regularly.

[9] Exhibit A-1 was placed into evidence by consent. This consisted of 17 unnumbered pages of documents. These were identified as “a type of fish slips provided to the buyers by the DFO”. In general they contained spaces for insertion of the name of the fisherman, the buyer, the date landed, the quantity and type of product landed, the net price and the total value of the product.

[10] This witness was referred to slip number C216203 and said that it was unusual since it was a lobster fishery slip for lobsters sold by the Appellant but that the Appellant did not have a license to sell lobsters. Such a slip could be completed by the weigh master or the office. The white copy goes to the fisherman, the second copy goes to the plant for the DFO and copies three and four go to the buyer. The yellow copies placed into evidence were normally given to the DFO.

[11] He said that slip C216183 showed the fisherman as the Appellant but that he had no lobster vessel. He referred to three further slips in Exhibit A-1 showing the name of the Appellant for sales to Carr’s Lobster Pound and said that they were completed properly. These slips were for the sale of cohogs.

[12] In cross-examination he said that he did not keep statistics on individual fishermen. The DFO relied upon the buyer to record the correct information on the “landing slips”. He admitted that the DFO does not account for every slip but each year the DFO meets with the buyers and tells them that if there is an error in a slip it should be voided and returned to the DFO.

[13] He could not say if the slips in Exhibit A-1 were those issued to the Appellant. He could not vouch for the accuracy of the slips nor could he say who filled them out.

[14] In re-direct he said that he had no reason to disbelieve the information contained in the slips.

[15] Christine Painter had been the bookkeeper for Carr’s Lobster Pound during the period relevant to this appeal. She had the day-to-day contact with the fish suppliers and had access to the company’s books.

[16] She said that a Mr. Lou Stevenson came to her office in July or August to get the company books and she later learned that there was an investigation going on.

[17] She described how a typical transaction took place at Carr’s Lobster Pound. Oysters were dropped off in boxes, they were tagged for identification, crated, the crate card was brought to her and a cheque was written for the product. She did not monitor the cash payments.

[18] Her indication was that Mr. Stevenson threatened her with jail and would not answer any of her questions.

[19] There were records pertaining to the Appellant but she could not identify him in Court. She said that Mr. Stevenson would only accept cancelled cheques as evidence of payment to the fishermen and he said that the Records of Employment (ROEs) issued to the fishermen were incorrect. She changed the ROEs to satisfy Mr. Stevenson.

[20] She said that she knew that cash was paid to the fishermen. Thirty percent of purchases were paid in cash and seventy percent were paid by cheque.

[21] She did not agree 100% that the original ROEs issued were incorrect. She said that there were some changes but not to any extent. She believed that everything was fine with the records. She was under pressure from Mr. Stevenson. She made a statement, reduced to writing, which was accepted into evidence as Exhibit R-2.

[22] This document contained statements to the effect that the ROEs issued did not wholly relate to cheque amounts and drop dates. Further, the statement indicated that the fisherman could come in and ask that the product be held until the fisherman had enough for a stamp. They insisted that she hold the product and she did, otherwise the product would be sold to other buyers.

[23] Counsel for the Appellant asked for the right to cross-examine his own witness on the grounds that she had made a contrary written statement to what she was saying in Court. The Court refused the motion, not being satisfied that the ground work for such a ruling had been made by counsel for the Appellant.

[24] Counsel for the Appellant made a motion for a mistrial. This was refused as being groundless and without merit.

[25] The witness said, “I would have to say that the first ROEs issued were the correct ones”.

[26] In cross-examination the witness said that she did not keep a cash ledger. Her father handled all the cash payments and no records were kept of them.

[27] She could not say if any cheques were made out to the Appellant in 1990. She identified Exhibit R-1, a landing slip in the name of Lloyd MacDougall showing $640.00 being allotted to the Appellant on June 5, 1990. She said that she took the captain’s word on that. (Lloyd MacDougall)

[28] She said that the DFO slips were filled out accurately but admitted that she gave a statement indicating that they had not been. She identified a statutory declaration made by herself on November 29 and it was not made before Mr. Stevenson.

[29] She admitted that the information given in some of the DFO slips was false.

[30] She did not remember giving a statement that Mr. Stanley delivered no product in 1991 and had no insurable earnings. Then she said that it was not correct and it was only said because Mr. Stevenson wanted it that way. She did admit that the DFO slips were filled out to reflect what the fishermen wanted as well as some ROEs.

[31] In re-direct she said that she believed that Mr. Stanley’s records were “pretty straightforward”.

[32] The Appellant testified that he is now a retired fisherman. He said, “I fished and sold the goods.” He started in the late 70’s selling lobsters, oysters, cohogs and bar clams. During the period in question he fished at Hillsborough, Mount Stewart, Nine Mile Creek and Pamel. He needed 10 stamps. He sold to Carr’s Lobster Pound.

[33] He had someone give him a hand taking the product out of the back porch. Russell Gallant took some product to Carr’s Lobster Pound. He took it inside. If someone was there he was paid. If no one was there he got paid the next week.

[34] He said that he fished for oysters and cohogs himself and lobsters with Lloyd MacDougall.

[35] In 1990 and 1991 he made eight deliveries to Carr’s Lobster Pound. He had 13 to 14 stamps in 1990 and did not know how many he had in 1991, perhaps one or more extra. He looked at the slips at home.

[36] He was familiar with the landing slips contained in Exhibit A-1 and they represented deliveries made by him in 1990 and 1991. Four of these were made in 1991 and the remainder in 1990.

[37] With respect to slip number J216207 in Exhibit A-1, he said that he received the $734.20 in cash. Then he said that he received equal amounts in cash and by cheque.

[38] With respect to slip number J216059 he said:

“As far as I remember I received the $649.60 in cash”.

He received the amount of $620.55 shown in slip number J216209 in cash, he received the amount of $674.47 as shown in slip J216060.

[39] He was referred to slip number T149356 where the words, “43 pecks of oysters” were struck out and the number and words “645 pounds” were inserted. He did not know who made the changes. He said:

“As far as I know, it was struck out when I got it.”

He did not know why the words “hand pick” were written in.

[40] With respect to slip number T198401 showing payments of $637.50 he said that he received that payment by cheque for oysters delivered although that information was recorded on a lobster slip. Likewise, he said that he received $660.00 as per slip number T198403 on September 15, 1990 by way of cheque for oysters delivered.

[41] He was referred to slip number T198402 which purported to represent a payment of $645.00 for oysters delivered on September 8, 1990, which referred to the same cheque no. 9593 on slip number T198403, dated September 15, 1990. His explanation was that he received payment for three orders in one cheque.

[42] With regard to slip number T149269 where there were changes to the slip in red ink, he could not explain the changes. Then he said that there were no cohogs delivered at that time and that he received the $643.00 in cash.

[43] He could not explain the changes made on the slip in green ink. He said that the slips were sent to him by the DFO and that the white-out on the slips was on them at that time.

[44] He was referred to slip number T149825 and said that he could not say what the payment was for but said, “I would say oysters”. He did not strike out the figures and was paid $644.00 in cash.

[45] With respect to slip number T198463 he could not explain the alterations made to the figures and information contained therein. He said that he received $640.00 as his share of the product referred to in slip number T149915 through Lloyd MacDougall Jr.

[46] Slip number C216239 was a slip from MacCormock’s Seafood for $325.00 and slip number C216156 was a slip from the same payor for 248 pounds of lobsters which did not show a value. The Appellant could not explain the information written in green ink and said that the slip was filled out differently.

[47] Slip number C216183 showed no value for the lobsters but the Appellant said that the white copy that he had did show the value.

[48] Again in slip number C216203 he could not explain the writing in green ink and again no value was assigned to the product.

[49] The Appellant said that he did not put pressure on anyone to “give him stamps”. He went to Carr’s to obtain a good price and he took lobsters there.

[50] He could not figure out why this was questioned. He was never questioned in 1989 or earlier years, now he is asked to pay back $48,000.

[51] He had not dealt with Carr’s Lobster Pound before the periods in question but did nothing differently before. He was questioned by Lou Stevenson in 1993 and 1994. He went to his office and believed that he was going in about a job. He signed nothing. He did not believe that he had done anything wrong.

[52] In cross-examination he said that he had kept his landing slips, the white copies. He did not know if his lawyer had them or if he had them. He saw them a few days ago or a few weeks ago. He believed that the slips contained in Exhibit A-1 were copies of all the slips he had received in 1990 and 1991. He said that he received 50% of his remuneration in cash and 50% by cheque.

[53] It was suggested to him that he received only one cheque in 1994 and he said that he did not remember. He was shown Exhibit R-3, which he identified. It was received into evidence over the objection of counsel for the Appellant, there being no valid objection to its admission.

[54] The Appellant said that the company cashed this cheque for him for $1,942.50. He claimed that it was late on Saturday of 1990 and the bank was closed. This cheque was also endorsed by Christine Paynter. It was pointed out to the Appellant that the date of September 18, 1990 was a Monday. He said, “I guess it was.” Then he said, “I don’t remember. I remember getting paid.”

[55] The Appellant was shown Exhibit R-1 which purported to be a DFO slip number T149907. This slip was contained in Exhibit A-1 and showed the Appellant as having received $640.00 and Russell Gallant as having received $640.00. Neither received a percentage of the cash. The witness said that he did not know what percentage he received.

[56] It was suggested to him that Russell Gallant had said that he had never fished with the Appellant. The Appellant said that Mr. Gallant was wrong and that he meant that he had never fished cohogs and clams with him.

[57] He was shown slip number T149915 which purported to allot him the same amount of $640.00. He said that the $640.00 represented his percentage. It was pointed out to him that the quantity of product was different in the two slips although the amount of his allotment was the same. He was asked if the $640.00 represented the amount needed to obtain the maximum stamps. He said that he did not know but that he was entitled to a stamp for every week for which he received a slip. This was also the case in 1991.

[58] He said, “I have my own records at home, not here. I am going by this record here (Exhibit A-1). I think that I got another cheque. I don’t know if it was in 1990 or 1991.”

[59] He did not have with him the letter from Lou Stevenson but he directed him to come in for an interview. It was in April 1993 or 1994.

Argument of the Appellant

[60] Counsel argued that the Appellant’s actions were all “above board”. This whole process has been a distress to him.

[61] There was no investigation until 1993 or 1994. The Department acted retroactively to the periods in issue. These actions were “unfair” and “malicious”. This was unfair to fishermen. Mr. Stanley has produced receipts. These have not been questioned. They must stand and they speak for themselves.

[62] It would be speculative on the part of the Court to find that they were not proper.

[63] In 1990 and 1991, the Appellant acted in the same manner as he acted in other years. Carr’s Lobster Pound problems are not those of the Appellant. He pressured no one.

[64] The appeal should be allowed and the Minister’s determination should be reversed.

Argument of the Respondent

[65] Counsel for the Respondent argued that the Minister did not change the rules during the years in question. The employment, if in issue, needs to be “retroactive”.

[66] In the year 1993 an investigation commenced for prior years. There was nothing abnormal about that.

[67] Carr’s Lobster Pound had problems. The books and records that they kept were not proper but fishermen should keep their own records. A fisherman is not an employee. The Appellant should have kept his records and brought them here today but he says that they are at home.

[68] In evidence, the Appellant could not say if he had all of his slips. He said that he had more than enough insurable weeks in 1990 and 1991 and not the weeks that he claimed.

[69] The assumptions contained in the Reply were not rebutted. It was his duty to establish when his sales were made, to whom and for how much.

[70] Christine Paynter said that some fishermen save up their weeks and claim a stamp.

[71] Books and records are important. Carr’s Lobster Pound kept no records of cash. Christine Paynter’s evidence was not acceptable. Her evidence was contrary to statements that she had given which were supportive of the position taken by the Minister that the DFO slips were unreliable.

[72] Christine Paynter said that she was under duress and yet she contacted a lawyer the very first day that she was contacted by Mr. Stevenson and her father (the owner of the Payor) told her to cooperate with the investigator.

[73] She admitted that she had said that Mr. Stanley, the Appellant, had no insurable earnings in 1990 and 1991. These statements should be accepted by the Court.

[74] At the end of the day there is no acceptable evidence that the Minister can use for establishing the insurable weeks under Regulation 80 of the Fishermen’s Regulations.

[75] The records of Carr’s Lobster Pound were not produced. The records produced here were unreliable.

[76] The Minister is at the mercy of the fishermen and the buyers. We have to go to the records of the buyer to support the Appellant’s position, as shown by the DFO slips and no such records were produced. The Minister has exercised his discretion under Regulation 80. It is insufficient for the Appellant to say, “I fished and I am entitled to benefits”.

[77] The appeal should be dismissed and the Minister’s determination confirmed.

Rebuttal

[78] Counsel for the Appellant, in rebuttal, argued that Mr. Lou Stevenson was not called to explain the accusations of pressure applied to the witnesses or as to what the documents represent.

[79] Mr. Stanley said, “I did have insurable earnings from 1990 to 1991”. Ms. Paynter did a flip-flop. The Appellant produced slips in evidence in support of his position.

[80] The slips show eight weeks in 1989 and 1991.

[81] The appeal should be allowed.

Analysis and Decision

[82] It is trite to say that the burden of proof in this case rests with the Appellant. That burden of proof is not met merely by the Appellant testifying under oath that he had insurable earnings.

[83] Counsel for the Appellant argued that the actions of the Appellant were above board and that it was unfair to a fisherman to question his insurable earnings retroactively.

[84] It is obvious that the question as to whether or not earnings are insurable must be raised after the period of the alleged earnings has passed and the fisherman has applied for benefits. This is the process that is always followed.

[85] The Court does not find that it was unusual for the question to be raised in 1993 and 1994 with respect to the earnings in the years 1990 and 1991. It could reasonably take that length of time or longer for an issue to arise as to whether or not the workers earnings were insurable whether or not he had received benefits before the issue arose. The issue must be determined immaterial of whether or not the worker may have to repay a small amount or a very significant amount in the event that his earnings are found to have been uninsurable.

[86] Counsel for the Appellant, in argument, took the tact, either unwittingly or by design, or due to the lack of corroborative evidence on behalf of the Appellant, that the Court could not reasonably come to any other conclusion, except that this was “insurable employment”. Indeed, he said that to find otherwise would be “mere speculation on behalf of the Court”. His position was that the Appellant produced slips to prove his case and that these slips were not questioned.

[87] These arguments, to say the least, are unrealistic in light of the Minister’s position in the Reply that the Appellant had no insurable earnings during the periods in question. In light of the evidence of Christine Paynter, when looked at “in toto”, including the allegations that she made in Exhibit R-2 as to what was going on between Carr’s Lobster Pound and the fishermen who sold to Carr’s Lobster Pound.

[88] This position was unrealistic in light of the unreliability of the ROEs and the DFO slips allegedly issued by Carr’s Lobster Pound and in light of the failure of the Appellant or his counsel to bring forth the Appellant’s own records to substantiate the general statement that he had the requisite insurable earnings even though the Appellant told this Court that either he or his counsel had the records in their possession.

[89] This position is made even more tenuous in light of the questions raised about the accuracy of the records produced by the Appellant which were apparently supplied by DFO and which contained numerous changes to the information contained therein which the Appellant could not explain or comment upon. Some of these changes were very material and relevant to the issues before this Court.

[90] The Court concludes that Christine Paynter did say at one time that the Appellant had no insurable earnings in 1991 and her indication in Court that she did not recall saying it was no more than an attempt to appease the Appellant. Further, her indication that she said it because Lou Stevenson insisted upon it, is not believable.

[91] In light of this evidence and the presumptions contained in the Reply, it was incumbent upon the Appellant to adduce evidence to corroborate his statement that he had the insurable earnings in question, but he did not do so.

[92] Counsel for the Appellant attempted to cross-examine his own witness under the provisions of the Canada Evidence Act, section 9(2) but the Court decided that this was not proper as the proper ground work for this procedure had not been established.[1] In any event, all that such a cross-examination would have accomplished would have been to further diminish the weight that the Court could attach to the evidence of Christine Paynter given in support of the Appellant’s case, so that at best if her evidence was disregarded completely, there would still not have been any corroboration of the Appellant’s testimony.

[93] The evidence of the other witnesses called on behalf of the Appellant confirmed nothing more than the fact that the Appellant was a fisherman and had made some deliveries to Carr’s Lobster Pound. In some respect their evidence, when looked at in the light of the information contained in Exhibits A-1, R-1 and R-3, was contradictory of the evidence given by the Appellant or at least demanded a satisfactory explanation of the contradictions, which explanations were not forthcoming.

[94] In cross-examination of the Appellant it was obvious that he was at best mistaken or at worse misleading with respect to his memory of the facts relating to Exhibit R-3. Likewise, his evidence was contradictory to that of James Russell Gallant who said that he never fished with the Appellant. He indicated that he did fish with Mr. MacDougall and that he dug soft-shell clams but not with Mr. Stanley. Further, he said that he did not know if Mr. Stanley gathered clams. He assumed that he sold them but he never said how much he received or whose money it was.

[95] The Appellant’s attempted explanation of that contradiction was not convincing.

[96] There was no acceptable evidence of the alleged cash payments which formed part of the remuneration upon which the number of insurable weeks depends.

[97] The failure of the Appellant to supply the records that he or his counsel had in their possession leads the Court to one of two conclusions. The records were not in the possession of either the Appellant or his counsel, in which case the Court was misled or the records would have disclosed information contrary to the Appellant’s position and consequently the Court will have to draw such an unfavourable inference against the Appellant because he did not produce such records.

[98] The Court concludes that the Appellant has failed in his burden of establishing that he had the insurable weeks in issue in this case.

[99] The appeal is dismissed and the Minister’s determination is confirmed.

Commentary

[100] This Court would be remiss in its duty if it did not comment upon the inappropriate conduct and aggressive behaviour of counsel for the Appellant during this proceeding.

[101] This case was heard under the informal procedure and in accordance with the Tax Court of Canada Rules, Unemployment Insurance, bearing in mind the provisions of Rule 27.

[102] This case was likely to involve many similar facts as would be disclosed in fifteen other cases in which counsel and the Appellants or their agents had agreed to proceed in such a way as to allow the evidence of some witnesses to be given only once to apply to each appeal, subject to the right of each counsel, agent or Appellant to examine the witness separately and be entitled to re-direct, with the right of counsel for the Respondent to cross-examine the witness for each appeal. The same rule would apply to witnesses to be called for the Respondent. It was contemplated that some witnesses might be called out of order.

[103] Counsel for the Appellant, William Robert Stanley, decided that he wanted to have his case heard separately. The Court consented to his request.

[104] It became necessary to determine whether the case of William Robert Stanley would proceed first or be preceded by the other fifteen cases.

[105] The Court heard the representations of all counsel on this point and in its wisdom decided to proceed with the case at bar. Counsel for the Appellant took issue with this decision and indicated to the Court that he did not wish to have his case act as the “guinea pig” but if it did, the case would be long and difficult. Such indications to this Court bordered on the contemptuous.

[106] The Court ordered the case to proceed. Counsel for the Appellant indicated that if the Court proceeded to hear this case he would move that it not hear the other cases, one of which he was involved in.

[107] The Court decided that it could hear all cases.

[108] Throughout the trial counsel for the Appellant was very argumentative with the Court, did not willingly accept its rulings and made several motions for mistrial which this Court found were completely without merit.

[109] On several occasions the Court had to insist upon counsel proceeding with the evidence instead of questioning the Court’s rulings.

[110] At one point counsel for the Appellant “demanded” to see the Court’s file, at least by innuendo suggesting that this file contained correspondence between the Respondent and the Court to which he was not privy. Such a position at the very least questioned the neutrality and integrity of the Court.

[111] This Court finds that the conduct of counsel for the Appellant was unacceptable and unbecoming to a solicitor of the Supreme Court of Prince Edward Island and an embarrassment to this Court.

[112] Unless appropriate redress is made by counsel for the Appellant this Court will consider an Order that he be prohibited from appearing before the Tax Court of Canada in the future.

[113] A copy of these Reasons for Judgment will go forward to the Secretary of the Law Society of Prince Edward Island for its consideration.

Signed at Ottawa, Canada, this 23rd day of January 1998.

"T.E. Margeson"

J.T.C.C.

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