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Citation: 2005TCC133
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Date: 20050318
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Dockets: 2003-4433(EI)
2003-4434(EI)
2003-4438(EI)
2003-4441(EI)
2003-4442(EI)
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BETWEEN:
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2530-8552 QUÉBEC INC.,
ISABELLE PÉPIN,
PASCAL MILETTE,
DIANE DELISLE,
MICHELINE FRASER,
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Appellants,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] These are appeals in the cases 2530-8552 Québec Inc. (2003-4433(EI)), Isabelle Pépin (2003-4434(EI)), Pascal Milette (2003-4438(EI)), Diane Delisle (2003-4441(EI)) and Micheline Fraser (2003-4442(EI)), to which the majority of the facts are common. Case 2530-8552 Québec Inc. encompasses all the others, because the appeal was introduced by the Payor, which issued all the records of employment at the beginning of the determinations involving the insurability of the employment performed by all the individual appellants.
[2] The parties agreed to present common evidence for all cases.
[3] Corporate Appellant 2530-8552 Québec Inc. issued the records of employment for the various periods at issue to all the individual appellants.
[4] On November 26, 2002, the corporate Appellant requested that the Respondent rule on the issue of whether Isabelle Pépin, from May 10 to November 26, 1999, Pascal Milette, from September 27 to December 17, 1999, Diane Delisle, from November 26, 2001, to May 31, 2002, and Micheline Fraser, from June 16 to September 26, 1997, from June 15, 1998, to May 7, 1999, and from January 10 to December 23, 2000, performed insurable employment when they were in the employment of the company.
[5] By letters dated September 26, 2003, the Minister of National Revenue ("Minister") informed corporate appellant 2530-8552 Québec Inc., and Appellants Diane Delisle, Micheline Fraser, Pascal Milette and Isabelle Pépin, of his decisions according to which none of the Appellants held insurable employment.
[6] They all filed a Notice of Appeal to contest the determination by claiming that the work they performed was subject to a genuine contract of service.
[7] To establish and support his determinations in the cases of Isabelle Pépin, Pascal Milette, Diane Delisle and Micheline Fraser, the Minister made the following various assumptions of fact:
Case 2530-8552 Québec Inc. (2003-4433(EI)):
(a) The Appellant was incorporated on September 24, 1987; (admitted)
(b) Serge Pépin is the Appelant's only shareholder; (admitted)
(c) The Appellant conducted business under the name Général Surplus enr.; (admitted)
(d) The Appellant operated an equipment and machinery repair and sales business; it also offered warranty service after the sale for companies such as Wal-Mart, Canadian Tire and Sears; (admitted)
(e) The Appellant's annual sales were $575,510 as of September 30, 1999, and $513,661 as of September 30, 2000; (admitted)
(f) In 1992, the Appellant was located in the Grand-Mère area; (admitted)
(g) In October and November [and December] 1998 the Appellant moved to a new location that was adjacent to the former site; (admitted)
(h) The Appellant suspended its business operations over the 1998 holiday period until January 11, 1999, to move to the adjacent location; (admitted)
(i) From October 18, 1999, to November 16, 1999, the Appellant had a warehouse built in St-Tite; (denied)
DIANE DÉLISLE
(j) Diane Délisle was hired as an accounting clerk; (denied)
(k) Diane Délisle argued that her duties consisted of handling the invoicing, filing and faxing invoices, signing delivery slips, supervising other employees when Serge Pépin was absent and handling the manual accounting when the Appellant's accounting system became automated in June 1998; (denied)
(l) Micheline Fraser declared to a representative for the Appellant that she trained Diane Délisle from August 28, 2001, to November 25, 2001, when it was not until November 26, 2001, that Diane Délisle was entered on the payroll; (denied)
(m) On August 27, 2002, Diane Délisle declared to a representative for the Respondent that she was unaware of who did the ordering, considering that Serge Pépin did not want an employee going through the invoices when she claims to have done the invoicing; (denied)
(n) On July 31, 2003, Diane Délisle declared to a representative for the Respondent that her duties were not computer-related when the Appellant's accounting system was automated; (admitted)
(o) For the period from November 26, 2001, to May 31, 2002, Diane Délisle was on the payroll for 24 weeks of pay of $332,50 with 35 working hours per week and for 2 weeks of $380 of 40 hours; (admitted)
(p) On June 17, 2002, the Appellant issued to Diane Délisle a record of employment indicating November 26, 2001, as the first day of work and May 31, 2002, as the last day of work, and which indicated 920 insurable hours and $8,740 as insurable earnings; (admitted)
(q) On May 13, 2002, Diane Délisle stopped working for the Appellant; (denied)
(r) Diane Délisle continued to be on the Appellant's payroll without performing any services for the Appellant; (denied)
(s) The record of employment of Diane Délisle was not accurate where the hours and period are concerned; (denied)
(t) The period during which Diane Délisle allegedly worked does not correspond with the period during which she actually worked; (denied)
(u) The Appellant and Diane Délisle worked out an arrangement in order to make Diane Délisle eligible for unemployment insurance benefits; (denied)
MICHELINE FRASER
(v) Micheline Fraser was hired as an accoutning clerk; (denied)
(w) The duties of Micheline Fraser consisted of keeping the accounting books, doing the invoicing, reconciling bank statements, doing the payroll and making deposits; (denied)
(x) During the periods at issue, while working for the Appellant, Micheline Fraser did the accounting for the following businesses: Racibec, JSD Marine Inc., Rose Laframboise, Services RL and Maçonnerie Grand-Mère; (denied)
(y) Micheline Fraser did not have a fixed schedule and worked at her convenience; (denied)
(z) On February 20, 2002, Serge Pépin declared to a representative for the Respondent that Micheline Fraser knew her job and did not require supervision; (denied)
(aa) For the period from June 16, 1997, to September 27, 1997, Micheline Fraser was on the payroll for 4 weeks of pay of $280 with 35 hours of work per week; (admitted)
(bb) For the period from October 13, 1997, to December 20, 1997, she was on the payroll for 5 weeks of pay of $280 with 35 hours of work per week; (admitted)
(cc) On July 14, 1997, the Appellant issued a cheque for $20,000 made out to Micheline Fraser; (admitted)
(dd) On July 17, 2003, Serge Pépin declared to a representative for the Respondent that he was incapable of justifying the merit of the payment; (denied)
(ee) The Appellant issued cheques to the mother of Micheline Fraser, Jeannine Fraser, which were endorsed by Micheline Fraser; (admitted)
(ff) From January 1 to June 27, 1998, Micheline Fraser was on the payroll for 14 non-consecutive weeks of pay of $280 with 35 hours of work; (admitted)
(gg) From July 5 to December 26, 1998, Micheline Fraser was on the payroll for consecutive weeks of pay of $280 with 35 hours per week; (admitted)
(hh) From January 1, 1999, to May 7, 1999, Micheline Fraser was on the payroll for consecutive weeks of pay of $297.50 35 with 35 hours per week; she was then on the payroll for the weeks of October 2 and 30 and the weeks of December 17, 18, 25 and 31; (admitted)
(ii) From January 10, 2000, to March 25, 2000, Micheline Fraser was on the payroll 3 weeks per month for weeks of pay of $297.50 with 35 hours per week; (denied)
(jj) From March 26, 2000, to December 23, 2000, Micheline Fraser was on the payroll 3 weeks per month for consecutive weeks of pay of $297.50 with 35 hours per week; (admitted)
(kk) On October 21, 1997, the Appellant issued to Micheline Fraser a record of employment indicating June 6, 1997, as the first day of work, and September 26, 1997, as the last day of work and which indicated 175 insurable hours and $1,400.00 as insurable earnings; (admitted)
(ll) On May 21, 1999, the Appellant issued to Micheline Fraser a record of employment indicating June 15, 1998, as the first day of work and May 7, 1999, as the last day of work and which indicated 1610 insurable hours and $13,195.00 as insurable earnings; (admitted)
(mm)On January 4, 2001, the Appellant issued to Micheline Fraser a record of employment indicating January 10, 2000, as the first day of work and December 23, 2000, as the last day of work and which indicated 1645 insurable hours and $13,982.50 as insurable earnings; (admitted)
(nn) Following and between the periods at issue, Micheline Fraser continued to perform services each week for the Appellant without being on the payroll; (denied)
(oo) The records of employment of Micheline Fraser are not accurate where the hours and periods are concerned; (denied)
(pp) The periods during which Micheline Fraser allegedly worked do not correspond with the periods during which she actually worked; (denied)
(qq) The Appellant and Micheline Fraser worked out an arrangement in order to make Diane Délisle eligible for unemployment iinsurance benefits while continuing to perform services for the Appellant; (denied)
OTHER RELEVANT FACTS FOR MICHELINE FRASER
(rr) In January 1997, Serge Pépin, the Appellant's sole shareholder, left his wife; (admitted)
(ss) Since January 1998, Micheline Fraser has been Serge Pépin's common-law spouse; (denied)
PASCAL MILETTE
(TT) The Appellant and Pascal Milette are related persons within the meaning of the Income Tax Act because:
(I) Serge Pépin is the Appellant's sole shareholder. (admitted)
(II) Serge Pépin is Isabelle Pépin's father. (admitted)
(III) Pascal Milette is Isabelle Pépin's husband. (admitted)
(IV) Pascal Milette is connected by marriage [husband] to Serge Pépin, his father-in-law, who controlled the Appellant. (admitted)
(uu) During the period at issue, Pascal Milette claims having been hired as a painter and day labourer; (admitted)
(vv) During the period at issue, Pascal Milette claims that his duties consisted of painting the Appellant's new location, setting up the shelving, assisting with the move and arranging supplies when the move was completed; (denied)
(ww) Pascal Milette was on the payroll for the period from September 27 to December 17, 1999; (admitted)
(xx) Pascal Milette was on the payroll for 12 consecutive weeks of 40 hours; (admitted)
(yy) Pascal Milette was on the payroll and earned $340.00 each week; (admitted)
(zz) On January 3, 2000, the Appellant issued to Pascal Milette a record of employment indicating September 27, 1999, as the first day of work and December 17, 1999, as the last day of work and which indicated 480 insurable hours and $4,080.00 as insurable earnings; (admitted)
OTHER RELEVANT FACTS FOR PASCAL MILETTE
(aaa) On August 28, 2002, Serge Pépin declared to a representative for the Respondent that Pascal Milette did not assist with the company's move when he previously declared that Pascal Milette helped place heavy machinery in the showroom during the move; (denied)
(bbb) Prior to the period at issue, Pascal Milette painted, for 2 weeks in fall 1998, the Appellant's new location; (admitted)
(ccc) During the period at issue, Pascal Milette did not perform services for the Appellant; (denied)
(ddd) The Appellant and Pascal Milette worked out an arrangement in order to make Pascal Milette eligible for unemployment insurance benefits. (denied)
ISABELLE PÉPIN
(EEE) The Appellant and Isabelle Pépin are related persons within the meaning of the Income Tax Act because:
(I) Serge Pépin is the Appellant's sole shareholder. (admitted)
(II) Serge Pépin is Isabelle Pépin's father. (admitted)
(iii) Isabelle Pépin is connected by blood relationship to Serge Pépin who controlled the Appellant. (admitted)
(fff) During the period at issue, Isabelle Pépin claims having been hired as a day labourer and that her duties consisted of cleaning the shelves and arranging supplies when in reality she did not work during that period; (denied)
(ggg) On March 11, 2002, Isabelle Pépin declared to a representative for the Respondent that she worked from Monday to Friday between 8 a.m. and 5 p.m; (admitted)
(hhh) During the period at issue, Isabelle Pépin claims that her duties consisted of cleaning the shelves and arranging supplies when in relaity she did not work during that period; (denied)
(iii) On July 31, 2003, Isabelle Pépin declared to a representative for the Respondent that she regularly brought her two children aged 4 and 1 with her to work on the Appellant's premises; (admitted)
(jjj) Isabelle Pépin was on the payroll for the period from May 9 to November 27, 1999; (admitted)
(kkk) Isabelle Pépin was on the payroll for 29 consecutive weeks of 35 hours; (admitted)
(lll) Isabelle Pépin was on the payroll and earned $297.50 each week; (admitted)
(mmm) On December 2, 1999, the Appellant issued to Isabelle Pépin a record of employment indicating May 10, 1999, as the first day of work and November 26, 1999, as th last day of work and which indicated 1015 insurable hours and $8,627.50 as insurable earnings; (admitted)
(nnn) Isabelle Pépin's record of employment is inaccurate. (denied)
OTHER FACTS RELEVANT TO ISABELLE PÉPIN
(ooo) On August 28, 2002, Serge Pépin declared to a representative for the Respondent that Isabelle had been hired because of the move and that she was laid off because the move had been completed; (denied)
(ppp) On March 11, 2002, Isabelle Pépin declared to a representative for the Respondent that she did not exactly recall the period during which she worked for the Appellant but that it was during the moving period; (denied)
(qqq) The move of supplies was completed in February 1999; (admitted)
(rrr) During the period at issue, Isabelle Pépin did not perform services for the Appellant; (denied)
(sss) The Appellant and Isabelle Pépin worked out an arrangement in order to make Isabelle Pépin eligible for unemployment insurance benefits. (denied)
[8] The Appellant admitted paragraphs a, b, c, d, e, f, g, h, n, o, p, aa, bb, cc, ee, ff, gg, hh, jj, kk, ll, mm, rr, (TT) (I), (II), (III) and (IV), uu, ww, xx, yy, zz, bbb, EEE (I), (II) and (iii), ggg, iii, jjj, kkk, lll, mmm and qqq.
[9] However, many facts were denied; they are the facts mentioned in paragraphs i, j, k, l, m, q, r, s, t, u, v, w, x, y, z, dd, ii, nn, oo, pp, qq, ss, vv, aaa, ccc, ddd, fff, hhh, nnn, ooo, ppp, rrr and sss.
[10] Considering that each individual filed a Notice of Appeal, the Respondent listed a Reply to the Notice of Appeal for each individual's case setting out the reasons in support of the determination concerning it.
[11] Considering that many facts were admitted, the facts admitted should be reproduced for each of the cases.
[12] At the beginning of the hearing, all the facts were examined and counsel for the Appellants indicated to the Court the facts denied, the facts ignored and, finally, the facts admitted, hence the references in parentheses at the end of each of the facts outlined below.
Case of Isabelle Pépin (2003-4434(EI))
5. [...]
(A) The Payor was incorporated on September 24, 1987. (admitted)
(B) Serge Pépin is the Payor's sole shareholder. (admitted)
(C) Serge Pépin is the Appellant's father. (admitted)
(D) The Appellant is connected by blood relationship to Serge Pépin who controlled the Payor. (admitted)
6. [...]
(a) The Payor conducted business under the name Général Surplus enr.;
(admitted)
(b) The Payor operated an equipment and machinery repair and sales business; it also offered warranty service after the sale for companies such as Wal-Mart, Canadian Tire and Sears; (admitted)
(c) The Payor's annual sales were $575,510 as of September 30, 1999, and $513,661 as of September 30, 2000; (admitted)
(d) In 1992, the Payor was located in the Grand-Mère area; (admitted)
(e) In October and November [and December] 1998 the Payor moved to a new location that was adjacent to the former site; (admitted)
(f) The Payor suspended its business operations over the 1998 holiday period until January 11, 1999, to move to the adjacent location; (admitted)
(g) From October 18, 1999, to November 16, 1999, the Payor had a warehouse built in St-Tite; (denied)
(h) During the period at issue, the Appellant claims having been hired as a day labourer and that her duties consisted of cleaning the shelves and arranging supplies when in reality she did not work during that period; (denied)
(i) On March 11, 2002, the Appellant declared to a representative for the Respondent that she worked from Monday to Friday between 8 a.m. and 5 p.m; (admitted)
(j) On July 31, 2003, the Appellant declared to a representative for the Respondent that she regularly brought her two children aged 4 and 1 with her to work on the Appellant's premises; (denied)
(k) The Appellant was on the payroll for the period from May 9 to November 27, 1999; (admitted)
(l) The Appellant was on the payroll for 29 consecutive weeks of 35 hours; (admitted)
(m) The Appellant was on the payroll and earned $297.50 each week; (admitted)
(n) On December 2, 1999, the Payor issued to Isabelle Pépin a record of employment indicating May 10, 1999, as the first day of work and November 26, 1999, as th last day of work and which indicated 1015 insurable hours and $8,627.50 as insurable earnings; (admitted)
(o) The Appellant's record of employment is inaccurate. (denied)
7. [...]
(a) On August 28, 2002, Serge Pépin declared to a representative for the Respondent that the Appellant had been hired because of the move and that she was laid off because the move had been completed; (denied)
(b) On March 11, 2002, the Appellant declared to a representative for the Respondent that she did not exactly recall the period during which she worked for the Payor but that it was during the moving period; (denied)
(c) The move of supplies was completed in February 1999; (admitted)
(d) During the period at issue, the Appellant did not perform services for the Payor; (denied)
(e) The Payor and the Appellant worked out an arrangement in order to make the Appellant eligible for unemployment insurance benefits. (denied)
Case of Pascal Milette (2003-4438(EI))
5. [...]
(A) The Payor was incorporated on September 24, 1987. (admitted)
(B) Serge Pépin is the Payor's sole shareholder. (admitted)
(C) Serge Pépin is Isabelle Pépin's father. (admitted)
(D) The Appellant is Isabelle Pépin's husband. (admitted)
(E) The Appellant is connected by marriage [husband] to Serve Pépin, to Serge Pépin, his father-in-law, who controlled the Payor.
(admitted)
6. [...]
(a) The Payor conducted business under the name Général Surplus enr.; (admitted)
(b) The Payor operated an equipment and machinery repair and sales business; it also offered warranty service after the sale for companies such as Wal-Mart, Canadian Tire and Sears; (admitted)
(c) The Payor's annual sales were $575,510 as of September 30, 1999, and $513,661 as of September 30, 2000; (admitted)
(e) In 1992, the Payor was located in the Grand-Mère area; (admitted)
(e) In October and November [and December] 1998 the Payor moved to a new location that was adjacent to the former site; (admitted)
(f) The Payor suspended its business operations over the 1998 holiday period until January 11, 1999, to move to the adjacent location; (admitted)
(g) From October 18, 1999, to November 16, 1999, the Payor had a warehouse built in St-Tite; (denied)
(h) During the period at issue, the Appellant claims having been hired as a day labourer; (admitted)
(i) During the period at issue, the Appellant claims that his duties consisted of painting the Payor's new location, setting up the shelving, assisting with the move and arranging supplies when the move was completed; (denied)
(j) The Appellant was on the payroll for the period from September 27 to December 17, 1999; (admitted)
(k) The Appellant was on the payroll for 12 consecutive weeks of 40 hours; (admitted)
(l) The Appellant was on the payroll for 12 consecutive weeks of 40 hours; (admitted)
(m) On January 3, 2000, the Payor issued to the Appellant a record of employment indicating September 27, 1999, as the first day of work and December 17, 1999, as the last day of work and which indicated 480 insurable hours and $4,080.00 as insurable earnings; (admitted)
7. [...]
(a) On August 28, 2002, Serge Pépin declared to a representative for the Respondent that the Appellant did not assist with the company's move when he previously declared that the Appellant helped place heavy machinery in the showroom during the move; (denied)
(b) Prior to the period at issue, the Appellant painted, for 2 weeks in fall 1998, the Payor's new location; (admitted)
(c) During the period at issue, the Appellant did not perform services for the Payor; (denied)
(d) The Payor and the Appellant worked out an arrangement in order to make the Appellant eligible for unemployment insurance benefits. (denied)
Case of Diane Delisle (2003-4441(EI))
5. [...]
(a) The Payor was incorporated on September 24, 1987. (admitted)
(b) Serge Pépin is the Payor's sole shareholder. (admitted)
(c) The Payor conducted business under the name Général Surplus enr.; (admitted)
(d) The Payor operated an equipment and machinery repair and sales business; it also offered warranty service after the sale for companies such as Wal-Mart, Canadian Tire and Sears; (admitted)
(e) The Payor's annual sales were $575,510 as of September 30, 1999, and $513,661 as of September 30, 2000; (admitted)
(f) In 1992, the Payor was located in the Grand-Mère area; (admitted)
(g) In October, November and December 1998, the Payor moved to a new location that was adjacent to the former site; (admitted)
(h) The Payor suspended its business operations over the 1998 holiday period until January 11, 1999, to move to the adjacent location; (admitted)
(i) From October 18, 1999, to November 16, 1999, the Payor had a warehouse built in St-Tite; (denied)
(j) The Appellant was hired as an accounting clerk; (denied)
(k) The Appellant argued that her duties consisted of handling the invoicing, filing and faxing invoices, signing delivery slips, supervising other employees when Serge Pépin was absent and handling the manual accounting when the Payor's accounting system became automated in June 1998; (denied)
(l) Micheline Fraser declared to a representative for the Respondent that she trained the Appellant from August 28, 2001, to November 25, 2001, when it was not until November 26, 2001, that Diane Délisle was entered on the payroll; (denied)
(m) On August 27, 2002, the Appellant declared to a representative for the Respondent that she was unaware of who did the ordering, considering that Serge Pépin did not want an employee going through the invoices when she claims to have done the invoicing; (denied)
(n) On July 31, 2003, the Appellant declared to a representative for the Respondent that her duties were not computer-related when the Payor's accounting system was automated; (admitted)
(o) For the period from November 26, 2001, to May 31, 2002, the Appellant was on the payroll for 24 weeks of pay of $332,50 with 35 working hours per week and for 2 weeks of $380 of 40 hours; (admitted)
(p) On June 17, 2002, the Payor issued to the Appellant a record of employment indicating November 26, 2001, as the first day of work and May 31, 2002, as the last day of work, and which indicated 920 insurable hours and $8,740 as insurable earnings; (admitted)
(q) On May 13, 2002, the Appellant stopped working for the Payor; (denied)
(r) The Appellant continued to be on the Payor's payroll without performing any services for the Payor; (denied)
(s) The Appellant's record of employment was not accurate where the hours and period are concerned; (denied)
(t) The period during which the Appellant allegedly worked does not correspond with the period during which she actually worked; (denied)
(u) The Payor and the Appellant worked out an arrangement in order to make the Appellant eligible for unemployment iinsurance benefits; (denied)
Case of Micheline Fraser (2003-4442(EI))
5. [...]
(a) The Payor was incorporated on September 24, 1987. (admitted)
(b) Serge Pépin is the Payor's sole shareholder. (admitted)
(c) The Payor conducted business under the name Général Surplus enr.; (admitted)
(d) The Payor operated an equipment and machinery repair and sales business; it also offered warranty service after the sale for companies such as Wal-Mart, Canadian Tire and Sears; (admitted)
(e) The Payor's annual sales were $575,510 as of September 30, 1999, and $513,661 as of September 30, 2000; (admitted)
(f) In 1992, the Payor was located in the Grand-Mère area; (admitted)
(g) In October and November [and December 1998], the Payor moved to a new location that was adjacent to the former site; (admitted)
(h) The Payor suspended its business operations over the 1998 holiday period until January 11, 1999, to move to the adjacent location; (admitted)
(i) From October 18, 1999, to November 16, 1999, the Payor had a warehouse built in St-Tite; (denied)
(j) The Appellant was hired as an accoutning clerk; (denied)
(k) The Appellant's duties consisted of keeping the accounting books, doing the invoicing, reconciling bank statements, doing the paroll and making deposits; (denied)
(l) During the periods at issue, while working for the Payor, the Appellant did the accounting for the following businesses: Racibec, JSD Marine Inc., Rose Laframboise, Services RL and Maçonnerie Grand-Mère; (denied)
(m) The Appellant did not have a fixed schedule and worked at her convenience; (denied)
(n) On February 20, 2002, Serge Pépin declared to a representative for the Respondent that the Appellant knew her job and did not require supervision; (denied)
(o) For the period from June 16, 1997, to September 27, 1997, the Appellant was on the payroll for 4 week of pay of $280 with 35 hours of work per week; (admitted)
(p) For the period from October 13, 1997, to December 20, 1997, the Appellant was on the payroll for 5 weeks of pay of $280 with 35 hours of work per week; (admitted)
(q) On July 14, 1997, the Payor issued a cheque for $20,000 made out to the Appellant; (admitted)
(r) On July 17, 2003, Serge Pépin declared to a representative for the Respondent that he was incapable of justifying the merit of the payment; (denied)
(s) The Payor issued cheques to the Appellant's mother, Jeannine Fraser, which were endorsed by the Appellant; (admitted)
(t) From January 1 to June 27, 1998, the Appellant was on the payroll for 14 non-consecutive weeks of pay of $280 with 35 hours of work; (admitted)
(u) From July 5 to December 26, 1998, the Appellant was on the payroll for consecutive weeks of pay of $280 with 35 hours per week; (admitted)
(v) From January 1, 1999, to May 7, 1999, the Appellant was on the payroll for consecutive weeks of pay of $297.50 35 with 35 hours per week; she was then on the payroll for the weeks of October 2 and 30 and the weeks of December 17, 18, 25 and 31; (admitted)
(w) From January 10, 2000, to March 25, 2000, the Appellant was on the payroll 3 weeks per month for weeks of pay of $297.50 with 35 hours per week; (admitted)
(x) From March 26, 2000, to December 23, 2000, the Appellant was on the payroll 3 weeks per month for consecutive weeks of pay of $297.50 with 35 hours per week; (admitted)
(y) On October 21, 1997, the Payor issued to the Appellant a record of employment indicating June 6, 1997, as the first day of work, and September 26, 1997, as the last day of work and which indicated 175 insurable hours and $1,400.00 as insurable earnings; (admitted)
(z) On May 21, 1999, the Payor issued to the Appellant a record of employment indicating June 15, 1998, as the first day of work and May 7, 1999, as the last day of work and which indicated 1610 insurable hours and $13,195.00 as insurable earnings; (admitted)
(aa) On January 4, 2001, the Payor issued to the Appellant a record of employment indicating January 10, 2000, as the first day of work and December 23, 2000, as the last day of work and which indicated 1645 insurable hours and $13,982.50 as insurable earnings; (admitted)
(bb) Following and between the periods at issue, the Appellant continued to perform services each week for the Payor without being on the payroll; (denied)
(cc) The Appellant's records of employment are not accurate where the hours and periods are concerned; (denied)
(dd) The periods during which the Appellant allegedly worked do not correspond with the periods during which she actually worked; (denied)
(ee) The Payor and the Appellant worked out an arrangement in order to make the Appellant eligible for unemployment iinsurance benefits while continuing to perform services for the Payor; (denied)
6. OTHER RELEVANT FACTS
(a) In January 1997, Serge Pépin, the Payor's sole shareholder, left his wife; (admitted)
(b) Since January 1998, the Appellant has been Serge Pépin's common-law spouse; (denied)
[13] Serge Pépin, sole shareholder of the corporate Appellant which conducted business under the name Général Surplus enr., testified at length.
[14] He explained and described the company of which he was the sole shareholder by referring, in his testimony, to each of the persons, that is, Micheline Fraser, Diane Delisle, Pascal Milette and, finally, Isabelle Pépin, who performed work of which the insurability is at issue.
[15] According to Serge Pépin, Micheline Fraser was not his common-law spouse when she started working for the company. She became so at an unspecified date.
[16] Isabelle Pépin is his daughter and Pascal Milette is Isabelle Pépin's husband. As for Diane Delisle, she was in no way related to Serge Pépin; she was therefore a third party where he and his business were concerned.
[17] Serge Pépin explained that his ex-wife worked for the company he ran until the family situation deteriorated to the point where there was a definitive breakup which was also sanctioned by divorce.
[18] His ex-wife, Lise Pépin, had had major responsibilities in the company; she had worked there continuously and uninterruptedly since the company's inception.
[19] According to Serge Pépin's testimiony, his ex-wife was neither disciplined nor methodical in performing her work; moreover, she was not knowledgeable enough in administration and accounting to be autonomous.
[20] Therefore, the company had to, frequently and continually, resort to the services of one Céline Boisvert for the accounting, particularly for fiscal year-ends.
[21] In substance, Serge Pépin described the whole context and the circumstances and reasons that led him to hiring the various persons mentioned earlier, that is to say all the workers, Isabelle Pépin, Pascal Milette, Diane Delisle and Micheline Fraser whose work insurability for the periods at issue are the subject of the appeals.
[22] He explained why the Appellants were hired by the compnay he ran and controlled alone.
[23] The company was highly specialized; generally, it had in stock replacement parts for mechanical or electrical equipment which, often, is no longer manufactured thus making the equipment rarely available and highly sought after.
[24] Consequently, the corporate Appellant often conducted business with clients outside Quebec. Besides this speciality it was greatly renowned for, the company had various contracts with large companies such as Wal-Mart, Canadian Tire, and many others, to ensure service after sales for various machines and mechanical and electrical equipment. Furthermore, the company also had its own equipment stock it sold.
[25] A significant part of the business was conducted over the telephone. The business had three different lines and each one also had a 1-800 number, which is equivalent to six lines. Many operations, ranging from reception to reshipping, were necessary.
[26] Office work was heavy in that the invoicing, transportation and delivery required many hours of work. Often, clients were Anglophone.
[27] Since Serge Pépin did not express himself fluently in English, he had to resort to employees in order to take the numerous calls in English which were highly important from the standpoint of business volume.
Case of Micheline Fraser
[28] Serge Pépin explained that he met Micheline Fraser when she was working at a neighbouring company; knowing that she had experience and expertise in accounting and administration, he asked her, he said, to work for his company, which was in great need of her knowledge and expertise.
[29] He described Micheline Fraser's work as similar or comparable to the work his ex-wife performed over the years, adding, however, insisting heavily on this fact, that Ms. Fraser was more competent, more disciplined, more organized; consequently, according to him, Micheline Fraser's work was more complete, satisfactory and efficient.
[30] He indicated that in the beginning there was essentially an employer-employee relationship between them. After his ex-wife left following their breakup, he allegedly rented a room in his residence to Micheline Fraser. At the time, the relationship was supposedly strictly business.
[31] Later, at an unspecified time, they became common-law spouses. They shared cohabitation expenses.
[32] Serge Pépin also explained that Micheline Fraser chose to go back to school full-time and she therefore had to quit her job to devote herself full-time to her studies. This absence resulting from her going back to school was covered by the hiring of Diane Delisle.
[33] He also submitted that the quality of Micheline Fraser's work, her efficiency and very high competence were such that her presence at the company was no longer required continuously. Explanations concerning the start and end dates of the periods of work, however, remained very vague and inaccurate apart from the last period for which the reason of the end of the work was the return to school.
Case of Diane Delisle
[34] Serge Pépin stated that he met Diane Delisle when she came to seek employment after having learned from Micheline Fraser, whom she knew, that she was going back to school full-time. He therefore hired her, shortly after having obtained her resumé, for the period indicated on the record of employment, from November 26, 2001, to May 31, 2002, and she was hired to replace Micheline Fraser.
[35] As far as the job is concerned, she replaced Micheline Fraser, who went back to school full-time, but she did not, it seems, have all the skills and knowledge possessed by Micheline Fraser, who allegedly continued, on an ad hoc basis, to perform services for the compnay to make sure everything went smoothly.
Case of Pascal Milette
[36] Pascal Milette was the husband of Isabelle Pépin, Serge Pépin's daughter. Holding a "certificate of qualifications" as a painter, he was also very skilled in construction and renovation. Serge Pépin hired him for the period from September 27, 1999, to December 17, 1999.
[37] The reason he was hired was to entrust a reliable person, which he was, with the responsibility of acting as a supervisor on the site where important construction work was being done following the purchase of a building in St-Tite to be used as a warehouse.
[38] Having entrusted the contract to a third company and not being able to constantly be on the premises because he was held up at the business's location in Grand-Mère, Serge Pépin, as he stated, entrusted Pascal Milette with the responsibility of supervising the work and making sure that everything went as he wanted, considering that the latter had all the skills required for the job.
[39] Not only did he give Pascal Milette the responsibility of monitoring and supervising the work, he also asked him to carry out work that would make it possible to use the premises as a warehouse.
[40] Therefore, Pascal Milette allegedly made shelves for stock. He also had to paint and install various items he transported from the Grand-Mère location to St-Tite using the company pickup truck.
[41] When the work was completed, his services were no longer required and therefore the end date of his period of work was December 17, 1999.
Case of Isabelle Pépin
[42] Isabelle Pépin, Pascal Milette's wife, was Serge Pépin's daughter. Considering that the location of Serge Pépin's business which was conducted under the name Général Surplus enr. was sold, the company had to move all its equipment and inventory in a smaller, contiguous location, which also belonged to him.
[43] Pressured by the purchaser to leave the premises, Serge Pépin organized and scheduled the move for the holiday period. Since he had to proceed very quickly, the stock was placed in boxes that were simply transported and strewn all over the floor of the new location contiguous to the former.
[44] After having to operate in a disorderly and chaotic environment for a few months, Serge Pépin decided to hire his daughter, who had no experience in this line of work, so that she empty the boxes and place their content on shelves while labelling the items to ensure a computer-based filing system.
[45] Mother of two young children, Isabelle Pépin often went to work with her two children, who played on the premises without this being a problem, even if the environment could have proved dangerous owing to the type of parts, items and equipment of the building.
[46] Serge Pépin's account and explanations appeared to be coherent and plausible.
[47] Each person whose work was described by Serge Pépin and who is also appealing the decision concerning the insurability of the work performed testified at the hearing.
[48] During the examinations conducted by thier counsel, the Appellants Isabelle Pépin, Pascal Milette, Diane Delisle and Micheline Fraser essentially provided explanations to generally confirm the facts presented by Serge Pépin in his testimony.
[49] During the cross-examinations, the Court noticed that the Respondent obviously had information that was not at all consistent with the explanations provided in response to the questions of the Appellants' counsel, who had clearly prepared his cases very well.
[50] The cross-examinations of the witnesses revealed many inconsistencies and made it possible to better understand certain facts established by the Minister in support of the determinations. To reconcile the discrepancies and clarify the ambiguities, certain explanations were provided.
[51] The evidence submitted by the Appellants was followed by the Respondent's evidence; the persons who participated in the investigation from which the determinations ensued therefore testified.
[52] At first, it was indicated that the Respondent essentially wanted to investigate the insurability of the work of the Appelant, Micheline Fraser. However, from the beginning of the investigation, Denyse Prévost found many significant anomalies. The numerous and important irregularities prompted her to conduct a more exhaustive and thorough investigation and analysis which led her to examine the cases of all the Appellants.
[53] Ms. Prévost made the following findings:
· Micheline Fraser performed accounting work for several companies; she did not declare the income she received on the forms allowing her to receive EI benefits she regularly obtained owing to her employment with Général Surplus.
· She vehemently denied all these facts until she was shown the inescapable evidence; she then acknowlegded the facts uncovered by the investigation and attempted to explain the reason for her change of heart.
· Ms. Fraser, a very intelligent person, participated in a training and information session on EI rights and obligations; despite the information session, she stated that she verified with the EI office and was informed that she was not obliged to declare earnings that were less than 25% of the amount of EI benefits she received.
· On numerous occasions, Micheline Fraser received amounts greater than the 25%, without declaring them.
· Micheline Fraser did not declare in her annual income some one-time earnings she received for accounting work she performed for various companies.
· She used up all her EI benefits before reappearing on the payroll.
· She cashed many paycheques of which she was not the payee of which some were her son's, her mother's and Diane Delisle's.
· Although she claimed that she was not Serge Pépin's common-law spouse at first, she herself declared that she was a common-law spouse when she submitted an application to a financial institution.
[54] The numerous findings of irregularities gave rise to a climate of high suspicion and distrust of the Général Surplus enr. case; at that point, the Respondent decided to invest time and resources to conduct an in-depth verification and analysis of the entire Général Surplus enr. case.
[55] The more the investigation unfolded, the more the suspicions proved well-founded and the more irregularities were uncovered, particularly when cross-references were made based on certain information taken from documents submitted, such as the payroll.
[56] Having become suspicious and distrustful for the reasons mentioned earlier, Ms. Prévost took the initiative to join forces with a colleague specializing in major fraud cases.
[57] She explained having carried out colossal work to shed light on the situation based on the documents that were submitted to her pell-mell in twenty or so boxes. She therefore gathered extensive information. She also made many cross-references based on salary cheques and the payroll.
[58] The tables prepared based on the various documents analyzed revealed troubling facts such as the fact that cheques were payable to Micheline Fraser's mother or son but were endorsed by Ms. Fraser when she was no longer on the payroll.
[59] The table filed as Exhibit I-9 prepared by Denise Prévost, revealed the following:
[Translation]
- . . . Lise Désilets-Pépin was entered on the payroll book between February 1997 and July 1998 when she no longer worked, as it appears from the testimonies of Mr. Lépine, Ms. Isabelle Pépin and Ms. Vaugeois.
- . . . Following Micheline Fraser's lay-off in May 1999, Isabelle Pépin was hired during this same period and at Micheline Fraser's same salary.
- . . . Serge Pépin did not pay himself a salary when Pascal Milette was hired in 1999.
- . . . In 2000, Jeannine Fraser was entered on the payroll for four weeks, including one week where Micheline Fraser did not receive any wages. During that same year, . . . Yann Roberge was entered on the payroll for one week, when his mother, Micheline Fraser, did not work.
- In 2001, Jeannine Fraser was entered on the payroll for four weeks during which Micheline Fraser did not work. In addition, Yann Roberge was entered on the payroll for four weeks during which his mother did not appear on the payroll.
[60] Considering the coincidences with respect to the dates, it would have been very interesting and certainly relevant to have the payees of the cheques endorsed and cashed by Micheline Fraser testify; the various findings create a presumption that Micheline Fraser was the real payee of the amounts indicated on the cheques; it could have been an indirect way of receiving pay as well as EI benefits. One thing is for certain, the situation warranted more explicit and above all more credible explanations than those submitted.
[61] Since she was deeply involved in the administration and management of Serge Pépin's company, having become his common-law spouse, the Court found it odd, indeed even improbable, that Micheline Fraser was not aware of the work her son had performed for the company when, according to the books, the latter allegedly work and received wages.
[62] I would like to note that the company did not employ thousands of persons. It was a very small business where everyone knew or should have known what the others did.
[63] As for Lucie Vaugeois, insurability officer, she learned from the ex-wife, Lise Pépin, that she worked for the company since its inception. According to Lise Pépin, Général Surplus enr. required the continued presence of a person to perform office administration work.
[64] Ms. Vaugeois therefore concluded, based on Serge Pépin's ex-wife's statement, that Micheline Fraser had performed work, in a much more steady, constant and continuous manner than claimed by the latter and her common-law spouse, Serge Pépin.
[65] The exclusion of Micheline Fraser's work from insurable employment therefore ensued from the particular contractual relationship that existed between her and her common-law spouse, Serge Pépin.
[66] According to the Respondent, Micheline Fraser took avantage of benefits and working conditions that were greatly influenced and determined by her status of Serge Pépin's common-law spouse to the point where there was a real arrangement between the two which allowed her to take maximum advantage of EI benefits.
[67] Serge Pépin and Micheline Fraser noted that Lise Pépin did not have the skills required to be in charge of all the accounting and that, prior to Micheline Fraser's arrival, the company had to therefore call on one Céline Boisvert. However, the examination of all the cheques did not make it possible to discover any cheques payable to the latter. Serge Pépin also submitted that his romantic relationship with Micheline Fraser began much later than claimed by the Respondent. The explanations provided with respect to the start of the spousal relationship were not very convincing. The Court believes that Micheline Fraser's coming into the picture was not foreign to Serge Pépin's and his wife's breakup, considering that the start of the spousal relationship has been clearly established by the Respondent.
[68] In the case of Isabelle Pépin, investigators obtained vague, ambiguous, and even completely hare-brained responses from her, to the point where she could not even date her period of employment.
[69] Isabelle Pépin allegedly could not recall whether it was spring or winter. Her job description was vague and very ambiguous. She would allegedly bring her two children to work. How often? For how long? The Court never really found out.
[70] After refusing to provide the name of her child care provider, she allegedly agreed to do so. After providing vague, general and very confusing explanations as to the nature of her work during the period at issue, at the hearing, she gave a description of her work by providing details as precise as a clock. The child care provider did not testify.
[71] To explain and justify certain facts that were completely irreconcilable with certain explanations provided in interviews conducted during the investigation of her case, she simply stated that she also performed work at another time and that she might have got the two periods mixed up during interviews with the investigators.
[72] According to her, during the other period, she performed volunteer and not paid work at the time of the move that took place over the holiday period. The same explanation had the advantage of throwing the ball in the opponent's court and of giving the impression that those responsible for analyzing her case got the two periods, one paid and the other unpaid, mixed up or confused.
[73] Her husband, Pascal Milette, also an Appellant, adopted the same approach when the facts related by him at the hearing became somewhat vague as to the nature of the work he performed, but also, and above all, as to the place and time the work was allegedly performed.
[74] There were so many discrepancies between the Appellant's testimony and that of the individuals who conducted the investigation that one could have thought they were different cases.
[75] The case of the Appellant Diane Delisle is different in that she and the company from which she received a record of employment were dealing with each other at arm's length.
[76] Certain facts discredited the version of the facts presented by Ms. Delisle; I am referring specifically to the following elements: the fact that Serge Pépin's common-law spouse, Micheline Fraser, also cashed some of the cheques; the description of the activities that took place during the holiday season; the confusion as to the congés and the week during which she did not work; and, finally, the duration of her work, which was long enough for her to become eligible for EI benefits.
[77] All these elements could explain the Respondent's finding. However, I also noted that, from the beginning of the investigation, it was practically assumed that Diane Delisle lied systematically. Her version was essentially deemed a web of lies.
[78] The case of Diane Delisle was prejudiced by deep suspicions about the truth of her allegations; although their suspicions may have been somewhat legitimate considering the numerous discrepancies, she had the right to an objective consideration of the facts.
[79] I noted that the person who reviewed her case in a way assumed, after finding certain inconsistencies in the explanations provided, that Diane Delisle lied from start to finish.
[80] The manner in which auditors and investigators responsible for the cases dealt with Diane Delisle's case showed a marked prejudice against her; in fact, after finding some contradictions, that could however be explained by the time elapsed, they quickly concluded that Mr. Delisle was lying to them. Moreover, certain comments and the tone of the language used allowed me to note that the explanations provided were quickly dismissed out of hand, claiming that they were complete fabrications.
[81] However, a number of factors were in favour of Ms. Delisle. I am referring to the fact that the investigators responsible for the case themselves learned during their investigation that the company was in genuine need of the continued presence of an office employee.
[82] They gathered and accepted this information, which was provided by Serge Pépin's ex-wife, who worked full-time for the company since its inception until her breakup with Serge Pépin, when the Appellant Micheline Fraser came into the picture. Diane Delisle's period of employment corresponded to the period during which Micheline Fraser went back to school full-time. Diane Delisle did indeed work. She and the employer were dealing with each other at arm's length.
[83] As for the other cases, the numerous coincidences relating to certain records of employment and the suspicions about the real recipient of some cheques are more than enough to conclude, based on the preponderance of evidence, that the company Général Surplus enr. had a very accommodating conscience where the issuance of certain records of employment were concerned. It is not an exaggeration to conclude that an entire system was put in place to exploit to the maximum the EI program.
[84] Not only did the number of hours indicated on certain records of employment coincide with the number of hours required to be eligible for benefits, but what is more is that the amounts indicated on the records of employment was possibly to the advantage of someone other than the person to whom the cheques were made out. If the beneficiaries of some of these dubious cheques had testified, the Court could have perhaps drawn a different conclusion. Often, Serge Pépin's common-law spouse, who, during the period in question, did not receive wages but received EI benefits, was the one who cashed the cheques in question.
[85] According to the preponderance of evidence, some records of employment were essentially falsified records of employment that were to the advantage of two persons. The persons to whom the records of employment were issued benefitted from them in that they enabled those persons to be eligible for benefits, while the amounts indicated on the records of employment were to the advantage of Mr. Pépin and his partner, Micheline Fraser.
[86] Who to believe? The investigators had nothing to gain by making anything up. As for the Appellants, they gave serious thought in preparing their testimony; they tried to provide explanations for the numerous discrepancies between the version they gave before the Court and that provided to the investigators.
[87] The numerous discrepancies between the versions, however, raised an important question. How is it that the Appellants' statements were so imprecise and confusing during the investigation and that their testimony before the Court, recorded many months later, was so clear and precise?
[88] I do not believe the versions provided at the hearing; they were too simple; if things were so simple, there was no reason why the versions should be so ambiguous and confusing during the conversations with Mrs. Prévost and Mrs. Vaugeois; nothing justified such discrepancies between the versions.
[89] It is important to note that the investigations took place soon after the events at issue, which should have helped one's memory. To explain the inconsistencies, it was mentioned that they were subjected to intimidation and that was the reason their versions did not correspond.
[90] As for the intimidation and threats, I believe this ground is completely unfounded and in that respect, I fully agree with the Respondent's assessment set out in the written argument as follows:
[Translation]
- In the Appellants' written argument, some of them claim having received threats or having been subjected to pressure from HRDC investigators and/or Canada Revenue Agency officers (the Agency).
- However, as it appears from the Appellants' testimony, no statutory declaration filed in evidence was taken without the free and voluntary consent of the participants.
- All the Appellants who signed a statutory declaration confirmed their version when they were contacted by the Agency's officers. None of them reported to the Agency's officers that they were subjected to undue pressure prior to signing their statutory declaration.
[91] Moreover, the interpretation of certain facts by the analysts was confirmed by objective information such as an abundance of documentary evidence. For their part, the Appellants essentially provided uncorroborated oral explanantions. Although corroboration is not essential, it is of considerable importance when a person provides various versions concerning the same issue.
[92] The numerous elements available brought to light during the investigations and analyses make it possible to conclude that, when managing his company, Serge Pépin, sole shareholder of the business operating as Général Surplus enr., was not very scrupulous in keeping payroll records and that he was clearly very accommodating.
[93] He was not very scrupulous in issuing records of employment, especially where his close ones were concerned. The evidence revealed that the records of employment of convenience were to his advantage in that his common-law spouse indirectly received wages that she could not receive otherwise because she received EI benefits.
[94] The investigation conducted by the respondent made it possible to learn, what the investigators also recognized, that the company Général Surplus enr. really needed an employee responsible for clerical work, the reception of clients, taking telephone calls, etc. This finding emerged from the Respondent's evidence in that the version obtained from Serge Pépin's ex-wife, whom the investigators met with, revealed that the company needed someone on a continuous basis.
[95] However, the evidence also established that Micheline Fraser was enrolled inregistered nursing courses and took these courses on a full-time basis. There was an objective explanation for the presence of an employee such as Diane Delisle.
[96] Moreover, that presence and the continuous need for an employee who had some knowledge of accounting and clerical skills were established by the Respondent in assessing the work performed by Micheline Fraser.
[97] It is also likely that the new orientation of the Appellant Micheline Fraser, who began her courses to obtain a registered nursing diploma, took up all her time to the point where she was no longer available to work for her common-law spouse's company except on a one-time only basis.
[98] Finally, during her testimony, the Appellant Diane Delisle provided very explicit details and gave similar and consistent explanations.
[99] The burden of proof on her was not beyond a reasonable doubt; rather, she had to demonstrate, based on the preponderance of evidence, that her submissions were well-founded. Although there are still doubts about the truth of certain elements at the end of the trial, I will give her the benefit of the doubt.
[100] After some hesition, I find that her appeal is justified because the preponderance of evidence is that the work at issue was performed under a contract of service. Consequently, the appeal is allowed in that the work performed, and described in the record of employment as being performed from November 26, 2001, to May 31, 2002, is deemed insurable.
[101] As for the other cases, certain facts appear to be a particularly determining factor in rulings on appeals whose outcome rests primarily on the credibility of key stakeholders.
[102] I am referring specifically to the folowing elements:
· numerous hesitations;
· selective memory;
· precision of a clock as to certain explanations favourable to their position and multiple omissions when possible responses discredited their contention;
· numerous implausible explanations; for example: Micheline Fraser's hiring was justified by her knowledge of English; it is difficult to reconcile this explanation with the fact that there were a great number of Anglophone clients and that they conducted business mainly over the telephone when Micheline Fraser was very often absent;
· the absence of certain persons whose testimony would have proved very useful;
· numerous contradictions and implausibilities.
· During their counsel's examinations, the Appellants testified in a consistent and precise manner, which was not the case during the cross-examinations.
· The version of the facts gathered by the investigators differed completely from that submitted to the Court by the Appellants on many important aspects, including the nature of the work performed and when the work was performed.
· The absence of logic in the explanations; I am referring specifically to the period of employment of Isabelle Pépin and Pascal Milette and to the fact that Micheline Fraser rendered, according to Serge Pépin, essential services; although she was an indispensable employee, she was regularly laid off.
[103] During her testimony, Micheline Fraser explained in a detailed manner the work she claimed to have performed. Her version was simple, leaving little room for misunderstandings. Her version of the facts was however discredited by the testimony of the various stakeholders who conducted the investigation which led to the determination. Although deemed an indispensable and essential employee, she did not work on a continuous basis.
[104] When Isabelle Pépin's employment was terminated, many boxes of supplies were still lying around anyhow but that did not lead to any re-employment to carry out and complete the work that was described as super important, absolutely necessary and urgent. When the record of employment attesting to the termination of employment was issued, a number of boxes were still there and based on the evidence, they are probably still there.
[105] Why was this work defined as more important than the management and accounting work, because, during the alleged period of employment of the Appellant Isabelle Pépin, no one at the company was responsible for the large volume of work which, at one time, was performed by Serge Pépin's ex-wife, Lise Pépin, was later performed by the Appellant Micheline Fraser, and at another time, during which the latter was no longer available, was performed by the Appellant Diane Delisle? That was a very important aspect; in spite of that, no plausible explanation was provided.
[106] Like his wife, Isabelle Pépin, the Appellant Pascal Milette provided simple and consistent explanations at the hearing, whereas everything was vague and confusing during the investigation.
[107] The work performed by Pascal Milette involved the development of a warehouse that was just a few kilometres from the business. It allegedly supervised the work performed by a third company. Not available to do so himself, Mr. Pépin allegedly hired him to supervise work entrusted to a contractor from the region for him on the job site.
[108] At the same time as he was supervising, he transported items and placed them in the new warehouse; he also painted, designed and made shelves that were later to be used to store various stock items, and finally, arranged the stock on the shelves. The documentary evidence as to the dates on which the work was performed by the contractor raises many questions as to the relevance of Pascal Milette's work.
[109] During the investigation of which he was the subject, the Appellant Pascal Milette provided a version of the facts that was completely different from that submitted to the Court. To ensure that everything he said was plausible and credible, the Appellant Pascal Milette argued that he did in fact work for Général Surplus enr., which was owned by Mr. Pépin, his wife's father, but that it was volunteer work to help out the business, which was the same explanation given by his wife, Isabelle Pépin.
[110] This explanation eliminated the inconsistencies and confusion noted by the investigators and facilitated the submission of a new and consistent version that could not be the subject of controversy in that the facts were neither verified nor verifiable.
[111] It would have been useful, essential even, to have the third party, the contractor who carried out the development work of the new warehouse, confirm and corroborate his submissions.
[112] Since they knew the new version of the facts they submittted to the Court would undoubtedly cause a stir, considering the version and explanations provided earlier, it became imperative that the Appellants be able to consolidate their new version through the intervention of independent and credible witnesses, even more so since the burden of proof rested with them.
[113] The many contradictions noted by those responsible for reviewing the cases, the many findings derived from the documentary evidence, such as the payroll and periods of employment, as well as the fundamental differences between certain initial explanations and those provided later completely discredit the evidence of the Appellants Micheline Fraser, Pascal Milette, Isabelle Pépin and the company 2530-8552 Québec Inc.
[114] For example, Micheline Fraser first claimed that she did not work; when presented with the cheques made payable to her by another employer, she admitted that she did in fact work, claiming however that it was a special and isolated case in the past and that her memory may have served her wrong, that she misunderstood the question, etc.
[115] When presented with a number of cheques issued by a number of companys, she acknowledged that they corresponded to work she carried out, adding that after verifying with authorities, she obtained information according to which she did not have to declare the amounts.
[116] However, the evidence showed that Ms. Fraser participated in an information session during which these elements were explained clearly and at length. Very intelligent, a good communicator and disciplined, not only did she receive amounts greater than the 25% limit, but she also failed to declare such earnings in her annual income.
[117] The evidence revealed a great number of elements that were useful and determining factors in assessing the quality and credibility of the Appellants' testimonies.
[118] The Appellants' evidence does not stand up to that submitted by the Respondent, who did not have the burden of proof.
[119] In substance, the Minister accepted enough relevant facts to justify the findings in the cases of Micheline Fraser, Isabelle Pépin and Pascal Milette; those facts were a determining factor in justifying the complete reasonableness of the conclusions reached.
[120] The investigation certainly brought to light many new facts; however, I am of the opinion that the new facts submitted by the Appellants were a pure fabrication; they are of no value seeing as they are not at all credible.
[121] The determinations in the cases of Micheline Fraser, Isabelle Pépin and Pascal Milette derived from a somewhat aggressive analysis and assessment, which, though understandable in view of the Appellants' attitudes, is certainly not acceptable.
[122] Even if I had arrived at the conclusion that the investigation and analysis from which the determinations were derived were unacceptable owing to an approach that was possibly debatable, I would have had nevertheless to render a finding of non-insurability for two reasons.
[123] First, there is no doubt that the contracts of employment, if there were any, were greatly influenced by the de jure non-arm's length relationship in the cases of Isabelle Pépin and Pascal Milette and by the de facto non-arm's length relationship in the case of Micheline Fraser.
[124] Second, the preponderance of evidence is that the records of employment giving rise to the determinations were issued following an arrangement entered into with the corporate Appellant, represented by Serge Pépin. Clearly, the records of employment had nothing to do with the work that may have been performed.
[125] For all these reasons, the appeals of Isabelle Pépin (2003-4434(EI)), Pascal Milette (2003-4438(EI)) and Micheline Fraser (2003-4442(EI)) are dismissed.
Signed at Ottawa, Canada, this 18th day of March 2005.
Tardif J.
Translation certified true
on this 17th day of August 2005.
Daniela Possamai, Translator
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