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Citation: 2005TCC254
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Date: 20050414
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Docket: 2003-3931(EI)
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BETWEEN:
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ALBERT BISEAU,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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REASONS FOR JUDGMENT
Angers, J.
[1] This is an appeal from a decision
of the Minister of National Revenue ("Minister")
that the appellant was not employed in insurable employment with
D.L. Logging Express Ltée ("payor")
during the period from October 22, 2001, to January 26,
2002 ("period") because he was not engaged under
a contract of service within the meaning of the Employment
Insurance Act ("Act").
[2] The facts that are not in dispute
are that the payor's business consists of buying, selling and
trucking logs to different mills in the Tracadie area. At all
relevant times, the appellant was a landowner who was cutting
logs on his land and who had the ability to sell the wood to
buyers other than to the payor. The payor agreed to purchase from
the appellant wood that was already cut, hauled to the road and
ready for transport to the mill. For the period in question, the
payor issued to the appellant a record of employment reporting
14 weeks of employment with earnings of $650 per week for
60 hours of work each week.
[3] It is the Minister's position that
the earnings reported on the appellant's record of employment
were actually for the purchase of his wood. The selling price was
$7,801 according to the scale bills and, therefore, below the
reported earnings of $9,100 indicated on the record of
employment. According to the Minister, the appellant did not
receive all the earnings reported. In addition, the Minister
submits that the payor did not supervise the appellant, had no
control over the amount of wood cut and sold by the appellant,
and did not know the number of hours worked or who was actually
cutting the wood that he purchased from the appellant.
[4] The appellant denies all of the
above and suggests that there were two agreements between the
payor and the appellant. One was for the sale of the
appellant's wood to the payor and the other was a contract of
employment to have the appellant operate a "treeporter"
on behalf of the payor. The wages paid to the appellant by the
payor were for actual work performed and not consideration for
the purchase of the appellant's wood, disguised and paid for
in wages as submitted by the Minister.
[5] The appellant produced an
agreement dated October 18, 2001, that he made with the
payor. The agreement is written in French and reads as
follows:
Par cette entente le propriétaire Albert Biseau
accorde à D.L. Logging Express le droit de coupe sur le
terrain PID # 20609830 pour une période de
3 ans. Et par le fait même le propriétaire
s'engage à travailler pour D.L. Logging Express pour
faire la coupe aux mêmes conditions que les autres
bûcherons. ...
[6] The agreement is signed by both
the payor and the appellant. Under the agreement, the payor is
given a licence to cut wood on the appellant's land for three
years and the appellant undertakes to work for D.L. Logging to
cut wood under the same terms as other wood cutters. It is that
agreement that forms the basis of what transpired during the
period in question. The facts showed that the land identified by
the PID number in the agreement is not owned by the appellant. It
refers to a one-acre lot in a subdivision owned by one
Gaétan Chiasson.
[7] The appellant testified that he
worked for the payor during the period in question as operator of
a wood transporter called a "treeporter". He went to
the payor to seek this job. He did some cutting but was mainly
operating the treeporter as much as two to three weeks in a row.
Depending on the weather, he would work five to six days a week,
even after dark. He received his pay every Friday. He paid no
expenses in relation to the "treeporter" and didn't
know who owned it. He worked in the Tracadie, New Brunswick,
area and never operated the "treeporter" on his land,
located on Miscou Island. When cutting wood, he used his own
chain saw and paid the expenses. The payor told the appellant
where to work and the two had contact two to three times a week.
He had to stop at the end of the period because there was too
much snow. The number of weeks the appellant worked was the
minimum required for him to qualify for unemployment
benefits.
[8] During the same period in
question, the appellant had wood cut on his own land. He hired
two woodcutters who both cut 75 cords of wood that he sold
to the payor. He had it hauled since he had no equipment to do it
himself. The appellant denied that the agreement he had with the
payor was to sell his wood at $25 a cord for pulpwood, $30 a cord
for studwood and $15 a cord to haul it to the roadside.
[9] The appellant did not cash his
paycheques every week. He sometimes waited two weeks and even
longer since the bank was closed when he was not working. His
wife would sometimes cash his cheques at the bank or at a
convenience store between Tracadie and Miscou and not always at
the same store.
[10] When confronted with the fact that all
the cheques except one had been cashed at the same convenience
store, the appellant said he had other cheques during that
period. In fact, he had cheques all year round and his answer was
in relation to all of these cheques. When told that some of his
cheques were cashed 15 weeks after receiving them, he
answered that he only cashed them when he needed money.
[11] The appellant in fact received
15 paycheques for a 14-week period. Except for one, they
were all cashed at the same convenience store. His first
paycheque is dated Oct. 27, 2001. It was endorsed by the
appellant but deposited in the convenience store account on
February 4, 2002, 15 weeks after being issued. All the
other paycheques, as per Exhibit R-3, were deposited
two to 15 weeks after the date of issuance. Three were
deposited under 10 weeks and all the others were deposited
between 10 to 15 weeks after issuance.
[12] Daniel Losier is the owner of D.L.
Logging Express Inc. He was interviewed by a Human Resources
Canada agent on March 27, 2003, and signed a written
statement in which he could not explain why the PID number on the
agreement was incorrect. In the same statement, he explains that
the appellant was cutting wood on his land and that the only
profit the payor was making was for hauling the wood it bought
from the appellant; that he was not paid for issuing a record of
employment to the appellant; that the payor was hauling the wood
purchased from the appellant and was charging $23 to $24 a cord;
that the mill would make a cheque payable to the payor for the
wood they bought; and that the payor would deduct the cost of
hauling the wood and the $650 gross salary that the appellant had
asked for and would pay the appellant the remaining amount of
money.
[13] Mr. Losier further explained to
the agent that the value of the wood purchased was $25 a cord for
pulp, $30 a cord for studwood and $15 a cord to have it hauled to
the roadside. Scale bills were provided to the agents for the
period from October 23 to December 15, 2001, showing
the purchases the payor made from the appellant: 68.51 cords
of pulp at $25; 118.67 cords of studwood at $30; and hauling
at $15 a cord for a total of $7,801.10.
[14] In his testimony, Mr. Losier said
that the appellant was cutting wood on his own land during the
period in question. At first, he could not remember what the
arrangements were but later confirmed the above prices per cord
depending on the type of wood (pulp or studwood) purchased. He
could not explain why the record of employment indicated $9,100
in income and the scale bills showed $7,801.10 in sales. He
confirmed that the appellant had worked 14 weeks for the
payor in 2003 and that the number of weeks, although identical to
2002, was merely a coincidence.
[15] Based on the scale bills, the total
quantity of wood purchased by the payor from the appellant was
180.20 cords. The wood yielded a price of $18,825 from the
mills. Deducting the cost of hauling the wood at $23 a cord and
the amount of $7,801.10 paid to the appellant leaves a balance of
approximately $6,800. When asked where the money went, Mr. Losier
answered: "to the payor". When confronted with his
statement, he said it went to the appellant. If such is the case,
the appellant was therefore being paid more than $25 or $30 a
cord. At that point, Mr. Losier could not remember how this
surplus was paid to the appellant.
[16] It is only in his
cross-examination by counsel for the appellant that
Mr. Losier clearly testified that not only had the appellant
agreed to sell wood to the payor, but that he had also worked for
the payor as operator of a "treeporter". He hired the
appellant, paid him $650 per week and did not log his hours. The
appellant apparently worked in the Tracadie area during the
period and never on his own land. When asked why that information
was never conveyed to the Human Resources agent, he answered that
the question was never asked and that he thought the
investigation had to do with the wood cutting on the
appellant's land. According to Mr. Losier, there is no
link between the salary paid to the appellant and the wood he
purchased from him.
[17] Mr. Losier testified that he may
have told the appellant to cash his paycheques at the convenience
store because it allowed him more time to make his own deposit
since his account is not immediately debited. He had no
explanation for the 15 cheques issued and could not explain
why a weekly paycheque was issued on December 21 and another
on December 22.
[18] The appellant bears the onus of proving
on a balance of probabilities that the minister's
determination that the appellant was not employed with the payor
in insurable employment during the period in question is
unfounded and that there was insurable employment within the
meaning of paragraph 5(1)(a) of the Act.
[19] It is very difficult, if not
impossible, to make sense out of the appellant's version of
the facts. It is also difficult to understand why
Exhibit A-1, the contract, is written in French since
the appellant testified that he was not very familiar with the
language. It is also questionable that such a contract would
identify the wrong property on which a licence to cut timber is
granted. What is even more questionable is why was it necessary
that a licence to cut timber on the appellant's land be given
to the payor, whose business consists of buying, selling and
trucking logs to different mills? Why was it necessary that a
licence to cut timber be given at the same time as an undertaking
by the appellant to work for the payor as a woodcutter? The
appellant testified that he hired two persons to cut wood on his
land during the period in question when, just prior to the
period, he had granted the payor a licence to cut. Why does the
contract refer to a contract of employment as a wood cutter if
the work performed by the appellant was as operator of a
"treeporter"? If he was hired as the operator of a
"treeporter", why does the record of employment
(Exhibit R-2) indicate that the appellant was hired as
a labourer?
[20] Mr. Losier gave evidence that the
appellant had worked at one point on his own land but the
appellant said he had always worked on the
"treeporter". Why was a licence to cut timber or wood
given to the payor when the evidence of both the payor and the
appellant is that there were two agreements - one to hire the
appellant and the other to purchase wood from the appellant?
[21] Mr. Losier was very evasive in too
many of his responses to what I consider to be simple questions.
He could not explain why 15 instead of 14 cheques had been
issued, nor could he explain why the appellant was given two
cheques two days in a row when he testified that the appellant
was paid on a weekly basis. The appellant said he did not cash
his cheques at the same convenience store and that his wife
sometimes cashed them. Yet, they were all cashed at the same
convenience store, except one, and none was endorsed by his wife.
His explanation that he was referring to cheques he received
throughout the year instead of during the period in question
lacks credibility, since he said that he cashed his paycheques
well after receiving them because it was only then that he needed
money.
[22] The fact that a period of employment is
similar to the number of weeks required to be eligible for
unemployment benefits is not in itself sufficient to conclude
that it is not a valid contract of employment. It raises
questions though that, when coupled with evidence such as
evidence in this case, it may easily be concluded that there is
no contract of service between the appellant and the payor but
rather a business transaction artificially arranged in order that
the appellant qualify for unemployment insurance benefits.
[23] I find the evidence of both the
appellant and the payor to be unreliable, to say the least. In my
view, the facts as presented are definitely more consistent with
the position taken by the Minister.
[24] The appeal is dismissed.
Signed at Montreal, Quebec, this 14th day of April
2005.
Angers, J.
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