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Citation: 2004TCC627
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Date: 20040922
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Docket: 2003-536(EI)
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BETWEEN:
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JEAN-CHARLES COCKS,
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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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and
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CAROLE SIMARD,
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Intervenor.
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[OFFICIAL ENGLISH TRANSLATION]
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REASONS FOR JUDGMENT
Tardif, J.
[1] This is an appeal from a decision
dated November 19, 2002. The decision involves the periods
from: August 3, 1996 to December 5, 1997, October 12, 1998 to
June 12, 1999, April 3 to December 30, 2000, and October 29, 2001
to June 1, 2002. The issue is whether the Appellant's
employment was insurable employment when he was working for and
on behalf of Carole Simard (the "Payer"), who was at that time
doing business under the name of Locations et Services
C. S.
[2] The burden of proof is on the
Appellant. The evidence consisted of the testimony of the
Appellant and the Intervenor.
[3] The Appellant's testimony must be
analysed in light of the fact that the bulk of the assumptions of
fact taken for granted were accepted. The admissions
involved the following assumptions of fact:
a) the Payer
ran a business, registered on April 28, 1995, which provided a
number of services under the company name of "Locations et
Services C.S.";
b) the Payer
offered services such as truck washing, building stripping, pool
and buoy cleaning and painting, and concrete slab unfreezing on
construction worksites;
c) the Payer
is the sole proprietor of the business;
d) the Payer's
reported annual gross business income between 1996 and 2001
varied between $73,438 and $130,765;
e) the Payer's
income from truck washing is regular and year-round; the washing
services are provided on Saturdays and Sundays;
f) the
Payer's largest income in the past few years is from a contract
with Fisheries and Oceans Canada; this contract involves cleaning
buoys in the St. Lawrence River;
g) the Payer
cleans the buoys primarily in the fall, starting in October or
November and finishing on December 15 or 20; there are about 300
buoys to be cleaned;
h) the Payer
also carries out stripping and painting work for Fisheries and
Oceans Canada on the radio range towers used for the beaconage of
the St. Lawrence sea approach;
i) the
Payer carries out the work on the range towers primarily in the
spring or summer;
j) the
Appellant, the Payer's husband, ran a business similar to the
Payer's business between 1990 and 1996 before declaring personal
bankruptcy in 1997;
k) the Payer
purchased the assets of the former business from her husband with
a view to starting up her business in 1995;
l) the
Payer's assets include an Econoline pick-up truck, a 100-foot
ladder truck, a trailer, two or three pressure machines, her
personal automobile and the family home (in her name);
[...]
n) the
Appellant works on bids and negotiates the rates and agreements
with customers;
[...]
p) the
Appellant's work schedule varies, but he claims that when he is
on the Payer's payroll, he usually works between 40 and 42 hours
a week;
q) when there
are no contracts, the truck washing service is the only service
the Payer provides and the Appellant is hired to work
part-time on Saturdays and Sundays;
[...]
t)
during each of the years at issue, the Appellant received minimal
remuneration (for part-time work) or no remuneration during
certain weeks when the Payer was earning business income;
u) in 2001,
the Appellant was not on the Payer's payroll for 10 months while
[...] the business was involved in carrying out its normal
activities;
v) the reason
indicated on each of the Appellant's Records of Employment is
shortage of work, which does not coincide with the Payer's
periods of activity;
w) the Appellant's
periods of employment do not coincide with the actual periods of
the Payer's business activity;
The Appellant said that he has no knowledge of the following
assumptions of fact:
m) the Appellant has
a great deal of experience with the type of contracts the Payer
obtains and generally works on all the Payer's contracts;
[...]
o) the
Appellant carries out some of the firm's daily activities; he
physically works on all the contracts and hires and dismisses the
staff required for each contract;
The following assumptions of fact were denied:
r) the
Payer does not keep track of the Appellant's hours of work;
s) when the
Appellant was a full-time employee on the Payer's payroll, he
received a fixed weekly salary that varied as follows: $420 in
1998 and 1999; $480, $600 and $900 in 2000; $420 in
2001 and 2002;
[...]
x) the
Appellant's employment is essential to the smooth running of the
Payer's business; the business would not succeed without the
Appellant.
[4] Before assigning his property, the
Appellant owned the same business his wife purchased after he
declared bankruptcy. The Appellant testified that he was
the foreman because he had extensive experience in the field in
which the business was involved when he owned the same
business.
[5] Given the scope and significance
of his responsibilities in the business, one would expect the
Appellant to have a constant and continuous presence in the
business; he did not and was laid off for long periods of
time.
[6] The Appellant explained that the
owner of the business, his wife, the Intervenor, had used
employees who earned less than he did.
[7] The Appellant explained that he
did not deposit certain paycheques right away because he did not
need money since his wife was looking after most of his living
expenses.
[8] The Appellant explained that he
did not work during certain periods when the business was
carrying out activities because after his bankruptcy, he adopted
a new life philosophy and he had decided to take it a little
easier since he had had to work so many hours during certain
periods of his life.
[9] The Appellant's testimony was
hardly convincing, especially since a number of explanations were
confusing, insufficient and totally incomplete. He often
dodged questions by saying that he had no knowledge because his
wife owned the business. Other explanations were simply not
credible or improbable. I am referring in particular to the long
periods of time when the Appellant said he did not
work.
[10] The testimony of his wife, the
Intervenor, in this case showed that she had neither the ability,
the authority nor the expertise required to substantiate and
confirm the Appellant's version. Since he had already been
the sole proprietor of the business transferred to his wife after
he declared bankruptcy, it would have been important for the
Appellant and the Intervenor to take nothing for granted given
their very special circumstances resulting from the role
reversal, that is, when the boss becomes the employee and the
employee becomes the boss.
[11] The Appellant had the qualifications,
knowledge and experience required to run the
business. He also clearly had the necessary authority
and had a strong influence on his wife, to the extent where it is
no exaggeration to conclude that he was the business' guiding
spirit.
[12] The salary fluctuations, the periods of
employment, the reasons given to explain the beginning and end of
the periods at issue, and the total lack of consistency between
the income of the business and the periods of employment are all
factors that lead one to conclude that the Appellant acted as if
it were his own business, as it had been in the past.
[13] The Appellant in fact ran his own
business. It is possible that his wife became the actual
owner and not simply a nominee. However, it was clear to me
that she did not make any decisions; the Appellant was the only
decision-maker, particularly when the time came to decide when
his period of employment ended and when he would return to
work.
[14] Mr. Denis Hamel did impeccable
investigative work on behalf of the Respondent. Among other
things, he gathered the data and prepared tables based upon which
clear conclusions were drawn as to the merits of the
determination.
[15] For example, certain information in the
exhibits should be reproduced in the case at hand. Firstly,
in his statutory declaration dated June 27, 2002, the Appellant
made the following statement (Exhibit I-1):
[TRANSLATION]
[...] I cannot tell you whether she had employees in the past,
probably not, because she only had to manage her business at that
point. [...] I must explain based on my passbook that two
weeks' pay was last deposited on February 11, 2002, two more
weeks' pay on February 13, 2002, another two weeks' pay on
February 20, 2002 and between February 20 and the last deposits
on June 4, 2002, my wife did not deposit any salary in my account
because there was enough money in the account and she was waiting
for other money to come in before depositing all my other
cheques. I agreed because I want the company to survive and it is
my only source of income and the only work that I know well.
I can afford to agree not to receive my salary because
my wife is paying the household bills and living expenses and
since I do not have a car I take the company car (which she
allows me to do). I cannot demand my cheque every week because my
wife's company might go under and that is not to my
advantage. One day, all my payments will be up to date, but
I agree to receiving my cheques later. I would need my
salary if it were another employer because I would have expenses
[...] I earn $420 a week, but in 2000 I earned $900 a week
because there were government contracts and my accountant had
agreed that I could earn that amount. My salary decreased because
the business would not have continued to survive; business is
good when there are government contracts. [...]
(My emphasis.)
The following information is in Exhibit I-2:
[...]
Employee/employer information
RAPID, CORTAX and GST systems
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C and/or DD.3
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1996
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1997
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1998
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1999
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2000
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2001
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Name
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Jean-
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Charles
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Cock's
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237817663
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46 yrs
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T4/T4A income
E-I benefits
Gross rental
Gross bus
RRSP inc
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9,600
10,000
26,249
8,147
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22,600
11,911
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6,957
16,741
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8,830
7,165
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25,557
1,686
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3,780
12,704
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Name
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Carole
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Simard
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238259667
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48 yrs
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T4/T4A income
E-I benefits
Gross bus
Net bus
Cap gain
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90,009
17,616
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91,876
4,945
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82,407
(1,028)
31,187
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73,438
1,489
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130,765
1,491
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116,197
38,351
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DD.2
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Name of the ER no
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Carole
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Simard
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BN
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898349055
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No of empl
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10
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17
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7
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23
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12
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GST
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End of Q
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Sales
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Appellant's status
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30-9-98
31-12-98
31-3-99
30-6-99
30-9-99
31-12-99
31-3-00
30-6-00
30-9-00
31-12-00
31-3-01
30-6-01
30-9-01
31-12-01
31-3-02
30-6-02
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11,823
12,435
21,267
17,376
17,082
17,713
26,250
26,632
58,657
19,227
27,053
56,134
15,096
17,913
24,838
0
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Unemployed
Employed
Employed
Employed
Unemployed
Unemployed
Unemployed
Employed
Employed
Employed
Unemployed
Unemployed
Unemployed
Employed
Employed
Employed
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[...]
Business assets based on the general ledger as
at August 31, 2002 (Tab R)
- Automotive equipment: $13,002.50
Accumulated depreciation:
$3,606
- Equipment: $4,500
Accumulated depreciation:
$3,034
- Machinery: $1,218.03
Accumulated depreciation:
$363
Appellant's paycheques for 2002, starting on
January 17, 2002 (Tab S)
- The Appellant's paycheques for
January 2002 were deposited on June 4, 2002.
- The February 2002 cheques were
deposited on July 3, 2002.
- The March 2002 cheques were
deposited on July 11, 2002.
- The March 2002 cheques were
deposited on July 11, 2002.
- The subsequent cheques up to June 6,
2002, were deposited on August 16, 2002, but mostly on August 28,
2002.
[16] The burden of proof was on the
Appellant. The Respondent fleshed out the case by providing
irrefutable evidence. The way for the Appellant to
discharge the burden of proof was not by providing vague,
confusing, incomplete and even improbable bare assertions
regarding fundamental aspects.
[17] The Appellant was indisputably the
guiding spirit behind the business. He administered, managed and
oversaw the business exactly as if he were the owner. Not
only did he have special status, he was beyond a shadow of a
doubt the person who decided when his periods of employment began
and ended, and clearly orchestrated and planned these periods in
order to qualify for employment insurance benefits.
[18] This is a case where the Appellant had
such freedom and independence that he arranged everything in the
firm's payroll to suit himself and this was clearly to ensure
that he qualified for employment insurance.
[19] Not only did the evidence provided by
the Appellant and the Intervenor not shed light on new
information or facts not discovered during the investigation, it
instead confirmed the soundness of the decision made further to
the Respondent's impeccable and judicious investigation and
analysis.
[20] For these reasons, the appeal is
dismissed.
Signed at Ottawa, Canada, this 22nd day of
September 2004.
Tardif, J.
Translation certified true
on this 5th day of January 2005.
Wendy Blagdon, Translator
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