Citation: 2005TCC628
Date: 20051004
Docket: 2005-580(EI)
BETWEEN:
3588718 CANADA INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
DARREN DUBROVSKY,
GARY DUBROVSKY,
FAYGIE DUBROVSKY,
Intervenors.
[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Savoie D.J.
[1] This appeal was
heard at Montréal, Quebec, on June 29,
2005.
[2] On December 30,
2003, the Appellant asked the Minister of National Revenue (the
"Minister") to rule on whether Earl, Darren, Gary and Faygie
Dubrovsky, the workers, performed insurable employment when working for the
Appellant from January 1 to October 8, 2003, the period in question.
[3] On November 5,
2004, the Minister informed the Appellant that his decision was that the
workers Darren, Faygie and Gary held insurable employment during the period in question.
The Minister also decided that Earl did not hold insurable employment during
the period in question.
[4] This is an appeal of the
Minister's decision regarding the employment of Darren, Faygie and Gary.
[5] The Minister relied
on the following presumptions of fact when rendering his decision:
[translation]
(a) the Appellant was incorporated on June 3, 1999; (admitted)
(b) the Appellant operated a jewellery factory; (admitted)
(c) the Appellant usually hired around 20 full-time employees and
between 30 to 36 employees during peak periods; (admitted)
(d) Darren, Gary and Faygie Dubrovsky worked for the Appellant;
(admitted)
(e) the workers worked in the Appellant's place of business or on
the road; (denied)
(f) the workers worked all year for the Appellant; (admitted)
(g) the workers earned a set weekly salary; (admitted)
(h) the workers were paid by check every two weeks; (admitted)
(i) the workers incurred no expenses when carrying out their
duties; (denied)
(j) the workers did not have any financial risk in carrying out
their duties for the Appellant; (denied)
(k) all the material and equipment used by the workers belonged to
the Appellant; (denied)
(l) the workers' duties were an integral part of the Appellant's
activities (admitted)
DARREN DUBROVSKY
(m) Darren Dubrovsky had been employed by the Appellant since 1999;
(admitted)
(n) Darren Dubrovsky was the director of the sales and finance
service; (denied)
(o) Darren Dubrovsky's duties were to take care of marketing,
supplier relations, and various financial responsibilities; (admitted with
specifications)
(p) Darren Dubrovsky worked between 40 and 70 hours per week;
(denied)
(q) Darren Dubrovsky had a car supplied by the Appellant;
(admitted)
(r) in 2003, Darren Dubrovsky was paid $59,300; (admitted)
(s) Darren Dubrovsky was paid by check every two weeks; (admitted)
(t) Darren Dubrovsky regularly provided the Appellant with written
and oral reports; (denied)
FAYGIE DUBROVSKY
(u) Faygie Dubrovsky had been employed by the Appellant since 1999;
(admitted)
(v) Faygie Dubrovsky was responsible for the Appellant's accounting
service; (denied)
(w) Faygie Dubrovsky's duties were to direct and supervise three
accounting clerks; (admitted with specifications)
(x) Faygie Dubrovsky worked between 20 and 55 hours per week;
(denied)
(y) in 2003, Faygie Dubrovsky was paid $36,456; (admitted)
(z) Faygie Dubrovsky was paid by check every two weeks; (admitted)
(aa) Faygie Dubrovsky regularly provided the Appellant with written
and oral reports; (denied)
GARY DUBROVSKY
(bb) Gary Dubrovsky had been employed by the Appellant since 1999;
(admitted)
(cc) Gary Dubrovsky was the director of operations; (denied)
(dd) Gary Dubrovsky's duties were to manage the Appellant's
production operations and human resources; (admitted)
(ee) Gary Dubrovsky worked between 40 and 70 hours per week; (denied)
(ff) Gary Dubrovsky had a car provided by the Appellant; (admitted)
(gg) in 2003, Gary Dubrovsky was paid $59,084; (admitted)
(hh) Gary Dubrovsky was paid by check every two weeks; (admitted)
(ii) Gary Dubrovsky regularly provided the Appellant with written
and oral reports; (denied)
[6] The Appellant and
each of the workers are related persons within the meaning of the Income Tax
Act because:
[translation]
(a) the Appellant's shareholders with voting shares were:
Eldubro Holdings Inc. 33.3% of the
shares
Dubro Holdings Inc. 33.3%
of the shares
TN Princess Holdings Inc. 33.3%
of the shares
(admitted)
(b) the sole shareholder of Eldubro Holdings Inc is Darren
Dubrovsky,
the sole shareholder of Dubro Holdings Inc is Earl Dubrovsky,
the sole shareholder of TN Holdings Inc is Gary Dubrovsky;
(admitted with specifications)
(c) Earl Dubrovsky is the father of Darren and Gary Dubrovsky,
Faygie is the spouse of Earl Dubrovsky and the mother of Darren and Gary
Dubrovsky; (admitted)
(d) Darren and Gary Dubrovsky are part of a related group that
controlled the Appellant; (admitted)
(e) Faygie Dubrovsky is related to a member of the group that
controlled the Appellant. (admitted)
[7] The Minister also
determined that the Appellant was deemed to have an arm's length relationship
with each of the workers regarding their employment because he was convinced
that it was reasonable to conclude that the Appellant and each of the workers
would have concluded a substantially similar contract of employment if they had
been dealing at arm's length, considering the following:
[translation]
(a) the Appellant had an active corporate life; (ignored)
(b) the Appellant's board of directors met regularly to discuss,
plan and revise the Appellant's operations; (denied)
(c) Earl Dubrovsky worked as a consultant for the Appellant 20
hours per week and he fully participated in the decisions of the Appellant's
board of directors; (denied)
(d) according to the Institut de la statistique du Québec, the
salary of procurement professionals varied between $46,907 and $62,203 and
that of a financial management professional between $47,013 and $62,334;
(ignored)
(e) according to Human Resources Canada statistics for the Montréal region, the salary for a financial director
varied between $32,750 and $82,250, that of a purchasing director varied
between $30,250 and $74,750, that of a finance clerk varied between $22,500 and
$53,250; (ignored)
(f) the workers' salaries were reasonable considering the salaries
in the industry and each one's years of seniority; (denied)
(g) the workers had permanent jobs with a company that operated all
year and their duties were directly related to the Appellant's activities
(admitted)
(h) each worker's employment period corresponded to the Appellant's
activities; (admitted)
(i) the conditions, duration, nature and importance of the work of
each of the workers were reasonable. (denied)
[8] The evidence showed
that the three workers started their employment with the Appellant in 1999.
Darren Dubrovsky, when accepting this job for the Appellant, experienced a drop
in salary of around $25,000.00 per year. The same happened to his brother,
Gary Dubrovsky. As for Faygie Dubrovsky, she started in 1999 with a $36,000.00
salary, which she herself adjusted to $52,000.00 per year in January 2005. The
evidence showed that Faygie Dubrovsky received a job offer through the
Appellant's accountant for a fixed salary of between $70,000.00 and
$80,000.00 per year, which she turned down. However, the conditions of
this job were not revealed. All the workers accepted a reduced salary because
they chose to spend more time with their families, operate their own company,
enjoy more freedom and have no boss.
[9] The evidence
established that Darren and Gary Dubrovsky were both shareholders and
signatories of the Appellant. Both provided funds to the Appellant through
their lines of credit, for which the Appellant pays the interest. Darren
Dubrovsky is the Appellant's president, Gary Dubrovsky is its vice
president and Faygie Dubrovsky is its auditor and accountant.
[10] The three workers
held management positions for the Appellant. Their work schedule is completely
open to their discretion. They each have the freedom to come and go; they go to
work and take time off as they please. Their work is not supervised in any way.
The evidence showed that their work schedule was set according to their
family's needs. Each determined their salary, the number of days of leave and
their vacation periods, which were sometimes very long. None of the workers is
required to provide reports or account for their activities to the Appellant.
[11] It was established
that the working hours of Darren and Gary Dubrovsky could vary between 0 and 80
hours per week, while Faygie Dubrovsky's varied between 8 and 35 hours per
week. When asked at the hearing why they accepted working for the Appellant for
a salary that was lower than what they earned on the job market, they stated,
unanimously, that they chose a better quality life, an improved family life,
the possibility of investing their time and energy working for a company they
would eventually own. This is why, according to Darren and Gary Dubrovsky in
particular, they agreed to be on call 24 hours a day, seven days a week, when
they were not on vacation abroad and they agreed to take care of emergencies on
their days off, as well as the Appellant's other needs or to replace each other
during each others' vacations.
[12] Each of the workers
has an office at home, equipped at their expense, where they carry out many
duties for the Appellant. Each of the workers has an expense account to use as
they please.
[13] The issue in
question is whether the workers held insurable employment for the purposes of
the Employment Insurance Act (the "Act"). The relevant
provision is paragraph 5(1)(a) of the Act, which states:
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;
[Emphasis added]
[14] This provision
contains the definition of an insurable contract. It is one held under a
contract of service, namely an employment contract. However, the Act does not
define such a contract. In the case at bar, there is no written contract, but
at the hearing, testimony was given as to the parties' intention, which became
clear during the period in question. Upon analysis of the facts presented at
the hearing, the Court will be able to establish the type of contract to which
the parties are tied.
[15] The contract of
service is a civil law concept found in the Civil Code of Quebec. It is
therefore under the relevant provisions of the Civil Code that the nature of
this contract will be determined.
[16] In the publication,
"Contrat de travail: Pourquoi Wiebe Door Services Ltd. ne
s'applique pas au Québec et par quoi on doit le remplacer?" [Contract of employment:
Why Wiebe Door Services Ltd. does not apply in Quebec and with what should it be
replaced?] to be published during the fourth quarter of 2005 by the Fiscal and
Financial Planning Association (APFF) and the Department of Justice in the Second
Collection of Studies in Tax Law in the Harmonization of Federal
Legislation with Quebec Civil Law and Canadian Bijuralism collection, Justice
Pierre Archambault of this Court explains the steps courts are to take for any
period of employment post May 30, 2001, since the coming into force of section
8.1 of the Interpretation Act, R.S.C. 1985, c. I-21, amended,
when faced with a case such as the one at bar. This is what the legislator
stated:
Property and
Civil Rights
8.1 Both the
common law and the civil law are equally authoritative and recognized
sources of the law of property and civil rights in Canada and, unless
otherwise provided by law, if in interpreting an enactment it is
necessary to refer to a province's rules, principles or concepts forming
part of the law of property and civil rights, reference must be
made to the rules, principles and concepts in force in the province
at the time the enactment is being applied.
[Emphasis added]
[18] The relevant provisions
of the Civil Code of Quebec should be reproduced to help determine
whether there is a contract of employment in Quebec to distinguish it from a contract
of enterprise:
Contract of
employment
2085 A contract
of employment is a contract by which a person, the employee, undertakes for
a limited period to do work for remuneration, according to the instructions and
under the direction or control of another person, the employer.
2086 A
contract of employment is for a fixed term or an indeterminate term.
Contract of
enterprise or for services
2098 A
contract of enterprise or for services is a contract by which a
person, the contractor or the provider of services, as the case may be,
undertakes to carry out physical or intellectual work for another person, the
client or to provide a service, for a price which the client binds
himself to pay.
2099 The
contractor or the provider of services is free to choose the
means of performing the contract and no relationship of subordination
exists between the contractor or the provider of services and the client in
respect of such performance.
[Emphasis
added]
[19] The provisions of the Civil
Code of Quebec reproduced above establish three essential conditions for a
contract of employment to exist: (1) provision in the form of work provided by the
worker; (2) remuneration for this work by the employer, and (3) the
relationship of subordination. The significant distinction between a contract
for services and a contract of employment is this relationship of
subordination, meaning the employer has a power of direction or control over
the worker.
[20] Scholars have
considered the concept of "power of direction or control" and its
flip side, the relationship of subordination. In Le droit du travail du Québec, 5th ed. (Cowansville: Les
Éditions Yvon Blais Inc., 2003), author Robert P. Gagnon states:
[translation]
(c) Subordination
90 – A distinguishing factor – The
most significant characteristic of an employment contract is the employee's
subordination to the person for whom he or she works. This is the
element that distinguishes a contract of employment from other onerous
contracts in which work is performed for the benefit of another for a
price, e.g. a contract of enterprise or for services governed by
articles 2098 et seq. C.C.Q. Thus, while article 2099 C.C.Q provides
that the contractor or provider of services remains "free to choose the
means of performing the contract" and that "no relationship
of subordination exists between the contractor or the provider of services and
the client in respect of such performance," it is a characteristic of an
employment contract, subject to its terms, that the employee personally
perform the agreed upon work under the direction of the employer and within
the framework established by the employer.
. . .
92 – Concept – Historically, the civil
law initially developed a "strict" or "classical" concept
of legal subordination that was used for the purpose of applying the
principle that a master is civilly liable for damage caused by his servant in
the performance of his duties (article 1054 C.C.L.C.; article 1463 C.C.Q.).
This classical legal subordination was characterized by the employer's
direct control over the employee's performance of the work, in terms of the
work and the way it was performed. This concept was gradually relaxed,
giving rise to the concept of legal subordination in the broad sense.
The reason for this is that the diversification and specialization of
occupations and work methods often made it unrealistic for an employer to be
able to dictate or even directly supervise the performance of the work.
Consequently, subordination came to include the ability of the person
who became recognized as the employer to determine the work to be performed,
and to control and monitor the performance. Viewed from the reverse
perspective, an employee is a person who agrees to integrate into the operational
structure of a business so that the business can benefit from the employee's
work. In practice, one looks for a certain number of indicia of the
ability to control (and these indicia can vary depending on the context):
mandatory presence at a workplace; a somewhat regular assignment of work; the
imposition of rules of conduct or behaviour; an obligation to provide activity
reports; control over the quantity or quality of the services, etc. The fact
that a person works at home does not mean that he or she cannot be integrated
into a business in this way.
[21] It must be noted that
the characteristic of a contract of employment is not the fact that the
direction or control was effectively performed by the employer, but the fact
that the employer had the power to do so. This is what the Federal Court of
Appeal found in Gallant v. M.N.R., [1986] F.C.J. No. 330.
[22] This Court, which
has the duty to determine the type of contract in Quebec to which the parties were tied,
must consider and follow the approach advocated by Archambault J. of this
Court, in the above-mentioned publication. He addressed this issue again in Vaillancourt
v. Canada (Minister of National
Revenue - M.N.R.), [2004] T.C.J. No. 685, where he stated:
[15] In my
opinion, the rules governing a contract of employment in Quebec law are not the
same as those in common law, and as a result, it is not appropriate to apply
common law decisions such as Wiebe Door Services Ltd. v. M.N.R., [1986]
3 F.C 553 (F.C.A.) and 671122 Ontario Ltd. v. Sagaz Industries Canada Inc.,
[2001] 2 S.C.R. 983, 2001 SCC 59 [For a thorough discussion of the reasons
justifying this conclusion, see the Wiebe Door article mentioned above].
In Quebec, a court has no other choice but to
decide whether of a relationship of subordination exists or not to decide
whether a contract is a contract of employment or a contract for service.
[16] The
approach to take is the one adopted by, among others, Létourneau J. of the
Federal Court of Appeal [see also Sauvé v. Canada, [1995] F.C.J. No. 1378
(Q.L.), Lagacé v. Canada, [1994] F.C.J. No. 885 (Q.L.) (F.C.A.),
confirming the Tax Court of Canada decision, [1991] T.C.J. No. 945 (Q.L.) and Charbonneau
v. Canada, [1996] F.C.J. No. 1337 (Q.L.). It must be noted, however, that
the Federal Court of Appeal, in D & J Driveway and Charbonneau
did not explicitly dismiss application of Wiebe Door], who, in D & J Driveway Inc. v.
Canada, (2003), 322 N.R. 381, 2003 FCA 453, found that there was no
contract of employment by using the provisions of the Civil Code as
a basis and, in particular, by noting the absence of a relationship of
subordination, a relationship that "is the essential feature of the
contract of employment" [Para.
16 of the decision].
[23] In this case, was
there a relationship of subordination between the workers and the Appellant
that would allow us to conclude that there was a contract of employment? In
carrying out the mandate of determining the presence or absence of a
relationship of subordination, many indicia can be considered. The case law has
developed a series of indicia that will be useful in this exercise, including
the following:
(1) mandatory
presence at a workplace;
(2) compliance
with the work schedule;
(3) control
over employee's vacations;
(4) submission
of activity reports;
(5) control
over quantity and quality of work;
(6) imposition
of methods for performing the work;
(7) power
to sanction employee's performance;
(8) source
deductions;
(9) benefits;
(10) employee
status on income tax returns; and
(11) exclusivity
of services to employer.
[24] However, a word of
caution is necessary: the analysis cannot stop merely because certain indicia
support a finding that a relationship of subordination exists. The exercise,
which is based on the distinction drawn in the Civil Code of Quebec, is
to determine the overall relationship between the parties. Thus, one must
establish the extent to which the indicia pointing to a relationship of
subordination predominate over the other indicia.
[25] In his analysis, the
Minister relied mainly on the "two hats" theory to find that the
workers, as the Appellant's shareholders, had the power of control over them
within the meaning of the Federal Court judgment Gallant, supra.
[26] Tardif, J. of this
Court, in Roxboro Excavation Inc. v. Canada (M.N.R.), [1999] T.C.J. No.
32, in circumstances similar to those in the case in question, concluded that
the workers were subject to a relationship of subordination with regard to the
Appellant. These are a few relevant paragraphs from this judgment:
[27] The evidence
showed that each of the Théorêt brothers had authority and independence and
even had carte blanche in performing the work for which he was responsible. The
evidence also showed that decisions were made informally, collegially and by
consensus.
[28] Was there a
relationship of subordination between the interveners and the company in and as
regards the performance of the work they did within the scope of their
respective roles? I believe that the company, which oversaw the work done by
the Théorêt brothers, had the full right and power to influence that work. The
fact that the company did not exercise that power to control and that those who
performed the work did not think they were subject to such a power or feel they
were subordinate in performing their work does not have the effect of
eliminating, reducing or limiting the power to influence their work.
[29] Admittedly,
certain rather vague facts, such as the delay in paying the two young Théorêt
brothers their salaries, suggest that there was special treatment because of
the family situation. However, I do not consider this sufficient to disqualify
the persons in question. They were being generously co-operative because of
their interest as shareholders.
[30] I do not
think that it is objectively reasonable to require a total, absolute separation
between the responsibilities that result from shareholder status and those that
result from worker status. The wearing of both hats normally--and this is
perfectly legitimate--creates greater tolerance and flexibility in the
relations arising out of the two roles. However, combining the two roles
produces effects that are often contrary to the requirements of a genuine
contract of service.
[31] In the case
at bar, the fact that authority did not seem to be exercisable against the
Théorêt brothers and that decisions concerning the company were made by
consensus and collegially does not mean that the company was deprived of its
authority over the work done by the interveners. The evidence did not show that
the company had waived its power to influence their work or that its right to
do so was reduced, limited or revoked.
[27] It must be noted that
this decision was appealed, and was confirmed by the Federal Court of Appeal [2000]
F.C.J. No. 799.
[28] This court is bound by Roxboro,
supra, and many others that do not need to be listed, which lead me to
conclude that in this case, the indicia shown by the evidence established the
relationship of subordination, the required element for any contract of
employment.
[29] It was found that the
workers and the Appellant were tied by a contract of employment; it must now be
determined whether their employment is excluded under subsection 5(2) of the
Act since they are related persons within the meaning of the Income Tax Act,
from the description in paragraph 6 of the Response to the Notice of Appeal.
[30] These are the relevant
provisions of the Act on this subject:
5.(2) Insurable
employment does not include:
(i) employment if the employer and
employee are not dealing with each other at arm's length.
5.(3) For the
purposes of paragraph (2)(i) :
(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.
[31] At the hearing, the
Appellant claimed that even if a genuine contract for services or contract of
employment existed between the workers and the Appellant, a contract of
employment similar to those of Faygie Dubrovsky, Darren Dubrovsky and Gary
Dubrovsky would not have been entered into by the Appellant and the workers if
they had been dealing with each other at arm's length.
[32] The Appellant presented
evidence with many elements in its favour. Some of these were ignored by the
Minister and many were not granted the importance they warranted.
[33] The following is a list
the Appellant qualified as "non-exhaustive" and which it presented at
the hearing:
[translation]
1.The three workers
determined their own salaries;
2.The three
workers' salaries are not related to the work performed for the Appellant;
3.The three
workers' salaries were the same from the beginning of the Appellant's
activities in 1999 when all the employees were entitled to periodic salary
increases;
4.The three workers
could change their salaries if they wanted and could do so based on their
personal financial needs or any other reason they felt was appropriate;
5.All the
Appellant's employees were entitled to bonuses during the period in question,
but the three workers did not grant themselves any;
6.The salaries the
three workers received during the period in question were lower than what they
would have received for similar work elsewhere in their industry;
7.The salaries the
three workers received during the period in question were lower than what would
have been offered to a person with an arm's length relationship with the
Appellant to carry out any one of the three work descriptions;
8.The three workers
set their own working hours and did not have any work schedule to follow,
contrary to the Appellant's other workers;
9.The three workers
set their own work descriptions and could delegate some portions when they felt
it was appropriate, contrary to the Appellant's other workers;
10. The three workers are not supervised in
any way in carrying out their duties, contrary to the Appellant's other
workers;
11. The three workers' hours of work are
not monitored or accounted for, contrary to the Appellant's other workers;
12. The three workers do not have any
reports to submit to anyone with the Appellant and are independent when
carrying out their duties;
13. The three workers could vary their
working hours as they wished and could take time off work for personal reasons
at any time, regardless of the Appellant's needs, since in those cases, they
could leave responsibility of the company's operations with the employees who
were there;
14. The three workers receive their full salary
in case of absences, extended or not, for illness, contrary to the Appellant's
other employees;
15. The three workers determined the
frequency and duration of their vacations themselves, contrary to the
Appellant's other employees;
16. When the company closed during the
summer (two weeks) or during the holiday season (two weeks) during the period
in question, on occasion, Darren, Gary or Faygie Dubrovsky decided to go
work anyway without any additional pay;
17. Darren and Gary Dubrovsky both provided
loans to the Appellant, something a person with an arm's length relationship
with the Appellant would not likely have done;
18. Darren and Gary Dubrovsky personally
guaranteed the Appellant's line of credit, something a person with an arm's
length relationship with the Appellant would not likely have done;
19. Darren and Gary Dubrovsky could
sometimes work up to six or seven days a week, or from 0 to 15 hours per week,
and this was left to their personal discretion;
20. Darren and Gary Dubrovsky took time off
work on many occasions, for periods of one to many days, during the period in
question, to practise a hobby or attend to family obligations; a privilege that
would definitely not have been granted to a person not related to the company;
21. Darren and Gary Dubrovsky could submit
expense accounts to the Appellant with conditions left entirely to their
discretion, which would certainly not have been possible for an employee with
an arm's length relationship to the Payer;
22. During the period in question, Faygie
Dubrovsky could decide to carry out her work from her residence when she wanted
to, or she could decide to work 3, 4 or 5 days a week;
23. As supervisor and director of
personnel, Faygie Dubrovsky could have gotten twice the salary in a comparable
company and actually refused such a job offer, given by the Appellant's
external accountant;
24. No one with an arm's length
relationship to the company would have had the same responsibilities or the
same freedom to act as the three workers in question.
[34] Faced with this
exercise, the Court is guided in its duty by the instruction stated by Marceau
J. in the Federal Court of Appeal decision Légaré v. Canada (Minister of
National Revenue – M.N.R.), [1999] F.C.J. No. 878, as follows:
The
Act requires the Minister to make a determination based on his own conviction
drawn from a review of the file. The wording used introduces a form
of subjective element, and while this has been called a discretionary power of
the Minister, this characterization should not obscure the fact that the exercise
of this power must clearly be completely and exclusively based on an objective
appreciation of known or inferred facts. And the Minister's
determination is subject to review. In fact, the Act confers the
power of review on the Tax Court of Canada on the basis of what is discovered
in an inquiry carried out in the presence of all interested
parties. The Court is not mandated to make the same kind of
determination as the Minister and thus cannot purely and simply substitute its
assessment for that of the Minister: that falls under the Minister's so-called
discretionary power. However, the Court must verify whether the
facts inferred or relied on by the Minister are real and were correctly
assessed having regard to the context in which they occurred, and after doing
so, it must decide whether the conclusion with which the Minister was
"satisfied" still seems reasonable.
[35] The rule prescribed by
the Federal Court of Appeal in Légaré, supra, and a review of the
facts in this case lead me to find that the facts inferred or relied on by the
Minister were not correctly assessed, considering the context in which they
occurred, and the conclusion with which the Minister was "satisfied"
no longer seems reasonable.
[36] The Court must
therefore find that the Appellant and the workers would not have entered into a
substantially similar contract of employment had they been dealing with each
other at arm's length.
[37] As a result, the appeal
is allowed and the decision rendered by the Minister is vacated.
Signed at Grand-Barachois,
New Brunswick, this 4th day of October 2005.
"S.J.
Savoie"
Translation certified true
on this 24th day
of October 2005
Elizabeth Tan,
Translator
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