Citation: 2010 TCC 266
Date: 20100519
Docket: 2009-941(EI)
BETWEEN:
JULIE PERRY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
SILVERTON RESORT LTD.,
Intervenor.
REASONS FOR JUDGMENT
Rowe, D.J.
[1] The Appellant appealed from a decision by
the Minister of National Revenue (the “Minister”) – dated January 29, 2009 – wherein
the Minister determined that her employment with Silverton Resort Ltd. (“Silverton”)
from January 1, 2008 to May 31, 2008, was not insurable employment pursuant to
paragraph 5(2)(i) of the Employment Insurance Act (the “Act”).
The Minister, after considering all of the terms and conditions of said
employment, was not satisfied the contract of employment between the Appellant
and Silverton would have been substantially similar if they had been dealing
with each other at arm’s length.
[2] Julie Perry (“Perry”) testified she resides
in Silverton, British Columbia – a small municipality
on the shore of Slocan Lake,
north of Castlegar. Greg Horton (“Horton”) is her father and he is President of
Silverton and appeared as its agent in the within appeal. Perry is the Manager
of an 8-unit resort business comprised of a 3-bedroom waterfront chalet, 4 loft-cabins,
and a 3-bedroom house. At full occupancy, the resort can accommodate between 30
and 35 guests and the business rents canoes and kayaks and there is a
playground for children. Perry started managing the resort in 2004 when the
property and business were purchased by the Horton Family Trust (“Horton Trust”).
For 15 years, Perry lived full-time in a house near the resort and for many
years worked as a teacher in the local school. As a result, she was very
familiar with the resort and after the acquisition by Silverton, renovations
were undertaken to the buildings. Perry stated she wears “many hats” and
performs office and administrative work including maintaining the website,
responding to e-mail, and dealing with a variety of matters pertaining to
reservations. As Manager, she supervises a housekeeping staff of two or three
persons and is responsible for maintenance of the lawn and gardens. She hauls
the recyclable material to a depot. During the relevant period, she performed
these duties and also travelled to Nelson every few weeks to obtain supplies, a
trip that occupied an entire day. Perry stated her main responsibility then –
and now – is to take care of the guests. At the resort, she often worked long
hours and was on call at all times to deal with those guests who wanted to
check out early or to check in late. Perry stated the season runs from the long
weekend in May to the end of October and that 87% – rather than 93% as assumed
by the Minister – of annual revenue is generated during that period. However, Slocan Lake does not freeze in winter and guests – including
families – use the facility as a retreat and some participate in cross-country
skiing. The high season rates – $205 to $350 per night, depending on the cabin –
come into effect at the first of June. Low season rates are $155. Perry stated
her salary – $30,000 per year – has remained the same since 2004 and it is paid
in monthly instalments of $2,500. As required, Perry obtained the services of
cleaning staff and when necessary contacted trades people to provide their
particular services. Perry had signing authority on the Silverton bank account
and signed her own pay cheque. Perry stated that during the low season, guests
do not stay as long and the cost of heating the cabins is high. She had to
shovel snow by hand to clean the parking spots and walkways. The canoes and
kayaks remain on the beach but the kayaks are covered and the life jackets,
paddles, et cetera are stored inside a shed. Perry stated that during the
typical May-to-October season, she started work from 10 a.m. and dealt with the
cleaning staff and handled guest check-outs and check-ins, including some for
those who had not made reservations. Typically, guests arrived during the
afternoon and into evening but at 9 p.m. Perry stopped working and walked two
kilometers to her residence. Perry’s daughter was born on November 26, 2007 and
during the winter months – until the end of February, 2008 – she performed most
of her work at home but took the child to the resort when necessary. Perry’s
duties included preparation of the monthly returns for Goods and Services Tax (“GST”)
and a monthly report which was submitted to the Silverton accountant. Perry
also prepared the appropriate return and submitted the amount collected for
room tax to the British Columbia Provincial Treasurer and – to comply with the
requirements of the legislation – was required to file a report even though no
tax had been collected during a particular period. She paid all the bills
pertaining to the operation of the resort and responded to e-mails and other inquiries
related to the business of Silverton and worked on the website. At least twice
a week, she inspected the cabins to ensure the electric heat was functioning
and that there was no problem with the running water in the cabins. She
inspected the electrical breakers, checked the building to see if there had
been any damage caused by vandals and set mouse traps. She did not record her
hours of work and was free to set her own schedule. Perry stated that she
issued a pay cheque to herself each month, although not always on the same date
but any slight delay was not related to any cash flow problem on the part of
Silverton. Perry acknowledged she had received a $5,000 bonus in 2007 and
believed it was based on Silverton’s increased business income that year. From
2004 to 2007, Silverton recorded Perry’s remuneration as Management Fees and
Perry reported that revenue as business income when filing her income tax returns.
During that period, she also earned income by working as a substitute teacher
in the local kindergarten-to-Grade 12 school. Perry stated the corporate
accountant advised that she should be an employee of Silverton and that the
usual source deductions for Employment Insurance (EI), Canada Pension Plan
(CPP) and income tax should be taken from her pay cheques. In accord with that
advice, and as assumed by the Minister at paragraph 5(w) of the Reply to the
Notice of Appeal (“Reply”), source deductions were taken from her May, 2008,
pay cheque and were applied – retroactively – to January 1. Perry stated she
left her employment with Silverton on May 31, 2008 because it became too
onerous to work and to care for her infant daughter who was 7 months old. Perry
realized that even though she could work for Silverton and care for the child
while providing most of her services from home, it was difficult to accomplish
that when required to attend at the resort facility on a regular basis in
preparation for – and during – the forthcoming busy season. In anticipation of
her departure, Angelina Simpson (“Simpson”) – was hired in April and started
working for Silverton on May 1. Simpson was a local resident and was familiar
with the resort and its operation. Perry stated she worked with Simpson in May
and showed her how to operate the resort business and during that period
continued to take care of the lawns and gardens and to obtain supplies. Simpson
lived in one of the cabins at the resort and her base salary was $1,500 per
month in addition to the supplied accommodation. However, prior to the cabin
being ready for her occupancy, Simpson lived for a few weeks in a private home
across the street and Silverton paid the rent. Simpson was also paid $12 per
hour for housekeeping and payment was based on time sheets which she submitted.
Perry stated that when she performed those housekeeping duties, she had not
recorded her time since she had considered that work as part of her overall
responsibility for which she received a monthly salary. Simpson did not operate
the ride-on mower and did not have a vehicle for travel to Nelson to purchase
supplies. After May 31, Perry continued to make trips to Nelson to obtain
supplies for Silverton, although Simpson – sometimes – was able to get a ride
to Nelson and make the necessary purchases herself. Perry stated that when attending
at wholesale suppliers and other stores in Nelson, she also purchased items for
her own household. Perry continued to sign and issue pay cheques – every two
weeks – for Simpson and any others who provided their services to the resort.
On occasion, Perry and her daughter visited the resort since there is a nice
beach and it was a pleasant spot to spend time with a child. Perry stated she
is not a Director or Officer of the Appellant. Perry estimated that after May
31, 2008, she spent about 15 to 20 minutes a day helping out at the resort
facility and made 4 buying trips to Nelson. Simpson dealt with all the e-mails
and voicemails pertaining to reservations and the resort website did not
require any revisions. Perry stated she returned to work at the resort on
January 1, 2009, on the same terms and conditions as had been in effect since
2004, including the relevant period.
[3] Perry was cross-examined by counsel for the
Respondent. When the resort was purchased by Trust in 2004 as an investment and
Perry was asked to manage the property, she reduced her substitute teaching to
once a week during the summer season but taught on more days during the winter.
She did not teach during the relevant period. In previous years she worked 10
hours a day, 7 days a week during the high season and from 20 to 25 hours a
week during the off-season but the “shoulder season” of April, May and June
required more hours. Perry estimated that if her salary had been paid according
to an hourly rate, it would have varied from $10 to $30 per hour depending on
the season. She stated she was satisfied with the salary and working conditions
as they were suitable to her needs and the annual remuneration paid on a
monthly basis enabled her to have only one job which permitted her to earn
additional income from substitute teaching. Perry acknowledged she was “pretty
much her own boss” but talked to her parents about certain matters such as the
decor of the cabins. Perry stated she worked at home – mostly – in January and
February, 2008, but spent more time at the resort in March, April and May while
preparing for the forthcoming tourist season. Perry’s husband was capable of
attending to emergent situations at the resort and had done maintenance work
previously for which he was remunerated on a per-job basis. During a meeting
with the Silverton accountant in early February, Perry was advised she should
be on the payroll as an employee. Perry stated she had not intended to apply
for EI benefits based on parental leave but – by early April – realized it was
becoming too difficult to care for her child and to manage the resort and to
continue would require the services of someone to assist with child care. Perry
stated the Minister’s assumptions that she was “free to set her own schedule and
come and go as she pleased” and to “take as much time off as she wanted” – as
stated at paragraphs 5(p) and 5(q), respectively of the Reply – were applicable
only to the months of January and February when the bulk of the work could be
performed at home. Silverton paid for the utilities in her residence. With
respect to the assumption – at paragraph 5(ee) that she and Simpson “received
remuneration under different terms”, Perry stated the remuneration was
comparable when one included the value of the accommodation and utilities and
the disparity in duties since Simpson did not have to handle the recycling nor
did she do the lawn maintenance or gardening. Perry stated that even though
Simpson was asked to stay at the resort during the winter, she decided to leave
at the end of October. As a result, the resort was closed until Perry resumed
her duties in January, 2009.
[4] Perry closed her case.
[5] Gregory Horton testified he has been a
Chartered Accountant since 1965 but instead of carrying on a professional practice
has worked in a real estate development business in Calgary.
In November, 2004, Horton Trust purchased 100% of the shares in Silverton.
Horton, his wife and his brother-in-law are the trustees and Perry is one of 4
contingent beneficiaries but none of them is able to control the trust and any
benefits flowing therefrom are at the discretion of the trustees. Horton stated
that when Perry undertook management of the resort business, she was
remunerated in the form of a management fee which eliminated the need for a
payroll account. The trustees decided – and Perry agreed – that the annual fee
of $30,000 was reasonable. Horton stated an examination of the financial
records of the resort when it was operated by a couple who were partial owners,
indicated they were able to draw out amounts ranging from $28,000 to $38,000
annually as remuneration for their efforts. Horton received a letter – Exhibit
I-1 – dated February 13, 2008 – from the Silverton accountant advising that as
a consequence of an audit of Perry’s income tax return, the Minister had
assessed Silverton for CPP contributions and that Canada Revenue Agency’s (“CRA”)
position was that a T4 should have been issued and CPP contributions deducted.
The accountant advised Horton that Silverton should discontinue paying Perry a
management fee and – instead – treat Perry as an employee by establishing a
regular payroll account. Horton stated he disagreed with the Minister’s
position that there was a significant disparity in the remuneration paid to Perry
and to Simpson and set forth his reasons in a letter – Exhibit I-2 – dated
October 16, 2008 which he directed to Chief of Appeals in Surrey. In said letter, Horton stated the value of the
accommodation provided to Simpson was $800 per month or $9,600 per year and the
resort business paid the cost of utilities which was approximately $100 per
month or $1,200 per year. Simpson’s base salary was $1,500 per month and Horton
estimated she could earn approximately $700 per month by providing housekeeping
and cleaning services for which she was compensated at the rate of $12 per
hour. Horton stated he based that estimate on information received from Perry
who was aware of the amount of work required, taking into account that during
the low season the cleaning work would generate only $250 per month for
Simpson. Horton stated he thought Perry was an officer of Silverton because she
had signed certain documents required to be submitted or filed by that
corporation. With respect to reservations at the resort, Perry collected a 50% deposit
of the anticipated bill, 3 months prior to the arrival date. Horton stated the
bonus of $5,000 paid to Perry in 2007 was justified because the resort’s annual
revenue had increased by $29,000 when compared with previous years.
[6] Horton was cross-examined by counsel.
Horton agreed that Perry made the day-to-day decisions relating to the business
of the resort but the trustees of Horton Trust made the major decisions
pertaining to matters such as renovation, construction, and otherwise retained
control over the operation. Horton stated the trustees had based Perry’s annual
remuneration on a calculation which took into account the attribution of salary
– by way of draw – received by the previous managers who were part owners and
the fact they lived in the house. Horton stated the nature of the asset
required someone to manage the resort on an annual basis with the understanding
that this person would work more hours during the busy season. Horton did not
know the resort had been closed during November and December, 2008 but Perry
would have known the state of affairs since she lived nearby. Horton believed
Perry was an officer of Silverton since she had signed certain annual returns
but is not aware of her precise title or whether she held any specific
office.
[7] Horton – as agent for the Intervenor –
closed its case.
[8] Perry submitted the work performed by her
during the relevant period was similar to what would have been done by a
non-related person. In her view of the evidence, the compensation paid to
Simpson was comparable when considering the various components thereof and
taking into account that Simpson had less duties to perform. Otherwise, both
she and Simpson had flexible hours and the same ability to take time off provided
that the daily demands of the resort business had been satisfied. Perry
acknowledged that she had been providing her services from November, 2004 to
December 31, 2007 in exchange for an annual management fee but that status had
been revised on the advice of the Silverton accountant based on requirements
imposed by an auditor from CRA.
[9] Horton submitted that the evidence
supported the view that Perry was an employee who provided her services in an
ordinary manner considering the nature of the business which, although seasonal
in nature, required continuous attention to many details including inspection
and care of the physical assets.
[10] Counsel for the Respondent submitted that
the parties were related in accordance with the relevant provision – subparagraph
251 (b) (iii) – of the Income Tax Act since her father – Horton –
was a member of the related group that controlled Silverton. Counsel submitted
the Minister properly acted as the gatekeeper and reviewed all relevant factors
including the composition and amount of the remuneration paid to Simpson who
took over management duties from Perry. In counsel’s view of the evidence, the
Appellant had not demonstrated that the Minister had ignored any relevant
matters or had considered any extraneous information and that the Minister
would not be surprised by any of the evidence adduced pertaining to the overall
circumstances of the working relationship. Counsel submitted that – taken as a
whole – the assumptions of the Minister were valid and there had been no
misapprehension of the circumstances prior to issuing the decision. The
Minister had considered that a non-related person would not have had as much
flexibility in many respects but on the other hand probably would not have been
willing to be on call 24 hours a day, 7 days a week. The Minister accepted the
work performed by Perry was important, especially during the high season. However,
the services provided during the slow periods were less significant and the
circumstances in respect of the total work done were consistent with those in
effect from November, 2004 to December 31, 2007 when Silverton remunerated
Perry on the basis of a fixed amount per year. Counsel pointed out it was not
until May, 2008 that Silverton acknowledged Perry was an employee and made
certain source deductions retroactive to January 1. Counsel submitted the
evidence adduced by the Appellant and by the Intervenor did not permit the
Court to intervene and that the decision of the Minister ought to be confirmed.
Even if that intervention occurred, Counsel submitted there were no material
new facts disclosed and an independent examination of the relevant indicia
ought to result in a confirmation of the Minister’s decision.
[11] The relevant provisions of the Act
are paragraphs 5(1)(a) and 5(2)(i) and subsection 5(3) which read
as follows:
5. (1) Subject to subsection (2),
insurable employment 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;
…
(2) Insurable employment does not
include
…
(i) employment if the employer and employee are not
dealing with each other at arm's length.
(3) For the purposes of paragraph
(2)(i),
(a) the question of whether persons are not dealing
with each other at arm's length shall be determined in accordance with the Income
Tax Act; and
(b) if the employer is, within the meaning of that Act,
related to the employee, they are deemed to deal with each other at arm's
length if the Minister of National Revenue is satisfied that, having regard to
all the circumstances of the employment, including the remuneration paid, the
terms and conditions, the duration and the nature and importance of the work
performed, it is reasonable to conclude that they would have entered into a
substantially similar contract of employment if they had been dealing with each
other at arm's length.
[12] In Quigley Electric Ltd. v. Canada (Minister of National
Revenue – M.N.R.), [2003] F.C.J. No. 1789; 2003 FCA 461 (F.C.A.), the Federal Court of Appeal heard an
application for judicial review of a decision issued by a judge of the Tax
Court of Canada confirming the decision of the Minister that the Appellant’s
employment with a related employer was not insurable. Malone J.A., writing for
the Court - at paragraph 7 and following – stated:
7 A legal error of law is also
said to have been committed when the Judge failed to apply the legal test
outlined by this Court in Légaré v. Canada (Minister of National Revenue) (1999) 246
N.R. 176 (F.C.A.) and Perusse v. Canada (2000) 261
N.R. 150 (F.C.A.). That test is whether, considering all of the
evidence, the Minister's decision was reasonable.
8 Specifically, it is argued
that the Judge circumscribed the scope of his review function when, after
finding that the Minister clearly did not have all the facts before him he
stated:
... That is not to say that on reviewing
new information, I am then precluded from finding that the Minister
did not have, after all, sufficient information to exercise his mandate
as he did without my interference. This would simply mean that I have
found that the new factors not considered were not relevant.
9 According to the applicant,
the proper question was not whether the Minister had sufficient information to
make a decision, notwithstanding the evidence of Mrs. Quigley; rather the
question was whether, considering all the evidence, the Minister's decision
still seemed reasonable. Instead, the applicant asserts that the Judge carried
out an irrelevant examination of whether Mrs. Quigley was a
"principal" or a "subordinate" of Quigley Electric Ltd.
10 In my analysis, the Judge
correctly followed the approach advanced by this Court in Canada (A.G.) v.
Jencan Ltd. [1998] 1
F.C. 187 (C.A.), namely, that the Minister's exercise of discretion
under paragraph 5(3)(b) can only be interfered with if she acted in bad faith,
failed to take into account all relevant circumstances or took into account an
irrelevant factor.
11 Bad faith on the part of the
Minister is not an issue in this case.
12 While
the reasons for decision are lengthy, it is clear that the Judge was analysing
the oral evidence of Jean Quigley in conjunction with paragraph 5(3)(b);
namely, whether having regard to all of the circumstances of the employment
including the remuneration paid, the terms and conditions, the duration and the
nature and importance of the work performed, it is reasonable to conclude that
they would have entered into a substantially similar contract of employment if
they had been dealing with each other at arm's length. After reviewing other
authorities in the Tax Court, the Judge rejected any suggestion that Mrs.
Quigley could be termed a principal of Quigley Electric Ltd. and in turn
dismissed her examples of special treatment within the company as arising from
her personal relationship with the controlling shareholder and not to her
employment contract.
13 He
concluded by indicating that the factors considered by the Minister, as set out
earlier in his reasons, were the relevant factors for his consideration. That,
in the context of this case, can only mean that the Minister's decision was
reasonable considering all of the evidence. I can discern no legal error in
this analysis or conclusion.
14 I would dismiss the
application for judicial review with costs.
[13] The
assumptions in the Reply that were challenged in whole or in part by the
Appellant and the Intervenor were:
…
h)
the Resort does about 93% of its business
between May to October each year;
i)
prior to 2008 the Resort did not have any
employees as all workers, including the cleaning and maintenance workers were
hired as contractors;
…
q)
the Appellant took as much time off as she
wanted;
r)
the Appellant worked from her own home on most
occasions;
…
z)
Angelina was required to provide her services at
the Resorts (sic) location only and could not work from her home;
…
ee) the Appellant and Angelina received remuneration under
different terms.
[14] In the within appeal, the evidence of the Appellant
was that only 87% – not 93% – of the annual revenue of the resort was produced
between May to October each year. With respect to the regularity of pay, the Appellant
testified that she wrote herself a pay cheque each month but not always on the
same day within a month. However, any delay was not due to any Silverton cash
flow problem. Perry stated that she could take time off but only when the necessary
work was done and that – often – free time was dictated by the arrival and
departure of guests. As for working at home on most occasions during the
relevant period, Perry stated that situation prevailed from January to the
middle of March but subsequently preparation for the upcoming season required
more attendance at the facility itself. Perry was at the resort on April 1 to
train the replacement manager – Simpson – and continued to work there until the
end of May. The evidence adduced by the Appellant and the Intervenor was that
Simpson lived in a cabin on the resort property so there was no need for her to
perform her work from any other location. With regard to the Minister’s
position that Perry and Simpson received remuneration under different terms,
the Appellant’s response was that when the value of the accommodation was
factored into the analysis together with the $12 per hour payment for
housekeeping – based on time sheets – the difference was not significant.
[15] It is apparent the Minister was aware that
the employment of the Appellant was based on an annual salary of $30,000, paid
in 12 equal payments of $2,500. Simpson was paid a base salary of $1,500 per
month and was required to record her time and to submit time sheets for housekeeping work.
Although there was an estimate of the revenue that could be produced from that
activity – as referred to in Horton’s letter – Exhibit I-2 – to the Chief of
Appeals, there was no evidence to corroborate the amount paid to Simpson under
that category. The Appellant testified that when she performed the housekeeping
duties, remuneration for that service was incorporated in her annual salary and
there was no need to quantify the time spent. The Minister took into account
that the Appellant performed services – without remuneration – for the resort
which included signing pay cheques for Simpson and for casual workers. That is
not disputed by the Appellant. The evidence disclosed that Perry travelled to
Nelson on at least 4 occasions to purchase supplies for the resort and made
purchases for her own home at the same time. Each trip occupied one full day.
After taking parental leave on May 31, Perry estimated she assisted Simpson
between 15 and 20 minutes a day by performing some required task at the resort.
Over the course of the next 5 months until Simpson left at the end of October
and the resort was closed, that amounted to between 40 and 50 hours of volunteer
work. In addition to issuing pay cheques to Simpson and other workers and
paying the accounts of trades people and suppliers – as required – Perry
prepared and submitted the GST returns and the provincial turns on a monthly
basis. There is no concrete evidence that her signing authority for Silverton
was based on holding any specific title or office as opposed to being among her
many duties as Manager. The Minister took into account that the Appellant’s
hours were not recorded and that she was able to arrange her hours around her
pregnancy and – after giving birth – could work at home or at the resort
according to the needs of her newborn daughter. She was free to come and go as
she pleased and the majority of the work performed during the relevant period
was from her nearby home.
[16] In the case of Forget v. Canada
(Minister of National Revenue – M.N.R.), [2003] T.C.J. No. 575; 2003
TCC 733, Campbell, J. found that the Appellant waited to
receive her pay until the company could afford to pay and had done so only
because she was the spouse of her employer.
[17] In Samson v. Canada (Minister of
National Revenue – M.N.R.), [2005] T.C.J. No. 290; 2005 TCC 383, Little, J.
dealt with an appeal wherein the Appellant had made 135 bank deposits and
prepared and signed a total of 623 cheques during a period she was not on the
payor’s payroll and had signed a number of invoices. In Justice Little’s view,
that work was clear evidence that person who was at arm’s length with the payor
would not have performed activities of that “magnitude and nature” and
concluded the Minister was correct in deciding the employment of that Appellant
was not insurable.
[18] The work performed by the Appellant in the
within appeal following the termination of her employment was not to the same
extent as in Samson and – unlike the situation in Forget – any
slight, occasional delay in writing herself a pay cheque was not based on any
lack of ability to pay on the part of Silverton.
[19] In the case of Birkland v. Canada
(Minister of National Revenue – M.N.R.), [2005] T.C.J. No. 195; 2005 TCC
291, Bowie, J. provided a summary of the state of the jurisprudence and
commented as follows at the end of paragraph 4 of his Judgment:
4. … This Court's role, as I understand
it now, following these decisions, is to conduct a trial at which
both parties may adduce evidence as to the terms upon which the
Appellant was employed, evidence as to the terms upon which persons at arm's
length doing similar work were employed by the same employer, and
evidence relevant to the conditions of employment prevailing in the
industry for the same kind of work at the same time and place. Of course,
there may also be evidence as to the relationship between the Appellant
and the employer. In the light of all that evidence, and the judge's
view of the credibility of the witnesses, this Court must then assess whether
the Minister, if he had had the benefit of all that evidence, could
reasonably have failed to conclude that the employer and a person acting
at arm's length would have entered into a substantially similar
contract of employment. That, as I understand it, is the degree of judicial
deference that Parliament's use of the expression "... if the Minister of
National Revenue is satisfied ..." in paragraph 5(3)(b) accords to
the Minister's opinion.
[20] In the case of Glacier Raft Co. Ltd. v. Canada
(Minister of National Revenue – M.N.R.), 2003 TCC 559; [2003] T.C.J.
No. 450, Bowie, J. heard the appeal by Glacier Raft and three workers
from a decision by the Minister that the workers – who were children of the
payor’s owner – were not at arm’s length and therefore not engaged in insurable
employment. At paragraphs 8 and 9 of his Judgment, Bowie,
J. stated:
8 All
three individual Appellants agreed with their father that they would be paid a
salary of $7,000 for the season, with some amount to be paid during the summer,
and the balance at the end. In fact they were all paid $5,000 by a cheque dated
August 9, 2000, and the balance of $2,000 by a second cheque at the end of the
season. There is no evidence to suggest that this method of payment, rather
than regular paycheques on a weekly or monthly basis, is usual in the industry.
I accept that there were advantages to Glacier, and also to the
three individual Appellants, in the arrangement they made. Glacier,
by not having to pay the workers until late in the season, was able to conserve
what was probably scarce working capital. Anne and Elizabeth were able to avoid
the risk of a poor summer in which their total earnings might have been much
less than $7,000. Conceivably, Bridget, too, might have been laid off, or had
her hours curtailed, if the volume of business was less than expected. I have
not overlooked the fact that the individual Appellants all said that they would
have been willing to work for another company on exactly the same terms as they
had with Glacier. The question for the Minister, however, was
whether Glacier and an arm's length person would likely have
entered into a contract in essentially the same terms. The Minister was not
satisfied that they would have, and on the evidence before me, I cannot say
that she was wrong in that. The appeals must be dismissed.
9 I
should make it clear that although I am bound to dismiss the appeals, I was
impressed with all the witnesses, and in particular with Anne Duquette, as she
now is, Elizabeth Murphy, and James Murphy. I have no doubt that Anne and Elizabeth
worked as hard as, and probably harder than, the other guides. Nor do I doubt
that Mr. Murphy relied heavily on their experience, not only when he bought the
company in 1995, but thereafter as well. This is certainly not a case of
employment of convenience being created for the benefit of members of the
family so that they could take unfair advantage of the employment insurance
system. Nevertheless, the terms of the Act are reasonably clear, and
when related parties enter into employment contracts they must be scrupulous to
see that the terms do not differ from those on which the employer employs other
workers, or on which the workers could find work with other employers, if they
wish the employment to be insurable under the Act.
[21] If I had the jurisdiction to decide the
within appeal de novo, the result could have been different but to vary
the decision of the Minister in this instance would be to substitute my own
judgment. After having considered all the evidence, the decision of the
Minister is still reasonable. Certain facts were considered by the Minister and
a subsequent analysis was undertaken of the relevant indicia as required by the
legislation. During this process, no unreasonable inferences were drawn in the
course of arriving at the assumptions upon which the decision was based. Those
assumptions were not invalidated by the evidence adduced on behalf of the
Appellant and they remain substantially intact in every material sense.
[22] The decision of the Minister is confirmed.
[23] The appeal is hereby dismissed.
Signed at Sidney, British Columbia
this 19th day of May 2010.
“D. W. Rowe”
Email this Content