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Citation: 2003TCC924
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Date: 20040211
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Docket: 2003-1761(EI)
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BETWEEN:
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CLAIRE F. GUEST,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent,
and
ROGER SKIDMORE,
Intervenor.
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____________________________________________________________________
REASONS FOR JUDGMENT
Beaubier,
J.
[1] This
appeal was heard at Nanaimo, British Columbia on November 26, 2003.
The Appellant was the only witness.
[2] The
matters in dispute are set out in paragraphs 5 to 12 inclusive of the Reply to
the Notice of Appeal. They read:
5. On November 22, 2002 the
Minister of National Revenue (the "Minister") issued two rulings
determining that the Appellant was not employed in insurable employment
pursuant to the fishing regulations during the periods from April 22, 1999 to
June 30, 1999 and May 1, 2002 to July 5, 2002 (the "Periods").
6. The Appellant appealed
the rulings by letters dated December 7, 2002.
7. In response to the
Appellant's appeal of the rulings under section 91 of the Employment
Insurance Act, S.C. 1996 c.23 (the "Act"), the Respondent
determined that the Appellant was not employed in insurable employment during
the Periods.
8. In determining that the
Appellant was not employed in insurable employment during the Periods, the
Respondent relied on the following assumptions of fact:
a) the Appellant
is the common-law spouse of Roger Skidmore ("Skidmore");
b) Skidmore owns
a fishing vessel and a commercial prawn fish license;
c) the Appellant
has worked aboard Skidmore's fishing vessel since 1987;
d) the Appellant
and Skidmore have reported the income from Skidmore's fishing business on a
50/50 basis in their tax returns since at least 1997;
e) the Appellant
shared the costs of all fuel, bait, nets, and any and all other costs
associated with prawn fishing;
f) the
Appellant worked 7 days per week during the Periods;
g) the Appellant
was not providing services pursuant to a contract of service;
h) the Appellant
was a self employed person involved in the fishing industry;
i) Skidmore
issued the Appellant a record of employment for the 2002 taxation year showing
insurable earnings of $46,589.43 based on prawn sales to the general public;
j) Skidmore
issued the Appellant a record of employment for the 1999 taxation year showing
insurable earnings of $31,003.50 based on prawn sales to the general public;
k) the prawns
caught and sold by the Appellant and Skidmore to the general public during the
Periods, were sold from the government wharf in Comox, B.C, from their home,
and were delivered personally to customers;
l) the
Appellant and Skidmore did not issue receipts recording the sale of prawns;
m) the sale of
prawns to the public was generally in amounts of one or two pounds at a time;
and
n) the proceeds
from the sale of prawns to the public does not qualify as insurable earnings.
B. ISSUES TO BE
DECIDED
9. The issue is whether the
Appellant was employed in insurable employment during the Periods.
C. STATUTORY
PROVISIONS RELIED ON
10. He relies on paragraph
5(1)(a) and subsection 2(1) of the Act, and subsection 1(1), sections 2
and 5 of the Employment Insurance (Fishing) Regulations.
D. GROUNDS RELIED
ON AND RELIEF SOUGHT
11. He respectfully submits
that the Appellant was not employed in insurable employment with Skidmore
during the Period as she was not engaged under a contract of service within the
meaning of paragraph 5(1)(a) of the Act.
12. He further submits that
the earnings paid to the Appellant are not insurable earnings based on the
interpretation and definitions as set out in section 1 of the Employment
Insurance (Fishing) Regulations.
[3] Assumptions
8 b), c), d), f), i), j), k) and m) were not refuted by the evidence.
[4] With
respect to the remaining assumptions:
8 a)
The Appellant and Skidmore are and were
legally married at all material times.
8 e)
The evidence is that Skidmore paid for
the nets; the remainder of this assumption was not refuted.
8 g)
During the periods in question, in 1999
the Appellant and Skidmore's incomes were divided between them almost 50 per
cent to each from fishing; in 2002, due to sales of prawns to the public,
Skidmore's income was about $15,000 and the Appellant's income was about
$40,000.
8 h)
The Appellant is deaf. She was a lawyer
until her deafness forced her to join her husband in the fishing business. She
testified that on the boat she acted as skipper, fished, operated the
navigation equipment, did the logs, sorted the catch and "tailed" the
catch for freezing.
8 i)
Represents the Respondent's position in
this appeal. The Appellant admitted that since she began fishing her income has
gone back into Skidmore's boat, but there is no evidence as to whether this was
by loan or by gift. The title to the boat and fishing equipment is Skidmore's.
Her entitlement is her rights as a wife; unless that is exercised in a
matrimonial action, the legal title is and remains Skidmore's.
8 l)
This refers to the Appellant's and
Skidmore's sale of prawns to the public from the Department of Transport's
wharf in Comox, British Columbia. If asked for receipts, they gave a receipt,
otherwise, they did not issue receipts. The Appellant recorded sales, but due
to her hearing problem, she seldom sold to the public; rather she did all the
behind the counter work for sale to the public and Skidmore and their daughter
conducted the actual sales.
8 n)
Depends on the interpretation of the Employment
Insurance (Fishing) Regulations), sections 1, 2 and 3(1), (2) and (3). They
read:
1. (1) The
definitions in this subsection apply in these Regulations.
"Act" means the Employment
Insurance Act.
"buyer" means a person
who buys a catch for the purpose of reselling it, either in the form in which
it was caught or after processing, and not for the purpose of using it as food,
feed or bait.
"catch" means any natural
product or by-product of the sea, or of any other body of water, caught or
taken by a crew and includes fresh fish, cured fish, Irish moss, kelp and
whales, but does not include fish scales or seals, and
(a) where
only a portion of a catch is delivered to a buyer, means the portion delivered;
and
(b) where
more than one catch or portion of a catch is delivered to a buyer at one time,
means the catches or portions that are delivered.
"crew" means a group of
fishers who generally engage in making a catch together or who have actually
engaged in making a catch together and, in the case of a single fisher,
"crew" or "member of a crew", as the case may be, means
that single fisher.
"cured fish" means the
following fish and fish products:
(a) salted groundfish,
smoked herring, pickled mackerel, pickled turbot, pickled herring, pickled and
salted alewives, pickled trout and other pickled fish products; and
(b) cod oil and cod livers.
"employer" means a person
included by section 3 as the employer of a fisher.
"fisher" means a
self-employed person engaged in fishing and includes a person engaged, other
than under a contract of service or for their own or another person's sport,
(a) in making a
catch;
(b) in any work incidental
to making or handling a catch, whether the work consists of loading, unloading,
transporting or curing the catch made by the crew of which the person is a
member, or of preparing, repairing, dismantling or laying-up the fishing vessel
or fishing gear used by that crew in making or handling the catch, where the
person engaged in any such incidental work is also engaged in making the catch;
or
(c) in the construction of a
fishing vessel for their own use or for the use of a crew of which the person
is a member in making a catch.
"fishing gear" means any
specialized equipment, other than hand tools or clothing, used by a crew
exclusively in making a catch.
"fresh fish" means fish
that is not cured fish.
"major attachment
claimant" means a claimant who qualifies to receive benefits and has $3,760*
or more of insurable earnings from employment as a fisher in their qualifying
period.
"minimum wage", in
respect of the earnings of a fisher from the catch of a crew, means the minimum
wage in effect in the province where the fisher resides on January 1 of the
year in which the catch is sold.
"minor attachment
claimant" means a claimant who qualifies to receive benefits and has less
than $3,760* of insurable earnings from employment as a fisher in their
qualifying period.
(* SOR 2001-74, section
1 changed the amounts to $3,760 from $4,200. S.C. 2001, c. 5, s. 14 deemed the
change to have come in force on December 31, 2000.
(2) An employer
who is engaged in work incidental to a catch that is generally performed on
shore shall not, at any time, be regarded as a member of the crew that made the
catch.
2. A person who is a fisher
shall be included as an insured person and, subject to these Regulations, the
Act and any regulations made under the Act apply to that person with such
modifications as the circumstances require.
3. (1) For the
purposes of the Act and any regulations made under the Act, the employer of a
fisher shall be any person included as such by this section.
(2) Where a catch
is delivered in Canada to a buyer or to a buyer's agent by a member of the crew
that made the catch, the buyer shall be considered to be the employer of all
fishers who are members of that crew and who share in the proceeds from the
sale of the catch.
(3) Where a catch
is delivered by a member of the crew that made the catch to a person who is not
considered by virtue of subsection (2) to be the employer and the gross returns
from the sale of the catch are paid to the head fisher of the crew, or if there
is no head fisher, to the agent for selling the catch of the crew,
(a) in the case of a head
fisher, the head fisher shall be considered to be the employer for all the
other fishers who are members of the crew; and
(b) in the case of an agent,
(i) if the agent is a
member of the crew, the agent shall be considered to be the employer of all the
other fishers who are members of the crew, and
(ii) if the agent is not a
member of the crew, the agent shall be considered to be the employer of all the
fishers who are members of the crew.
(4) Where there is a common agent acting at
the same time for both the crew and a buyer, that agent shall
(a) if the agent is a member of the crew, be
considered to be the employer of all the other fishers who are members of the
crew; and
(b) if the agent is not a member of
the crew, be considered to be the employer of all the fishers who are members
of the crew.
(5) An agent referred to in
subsection (4) has the right to recover from the buyer the employer’s premiums
paid by the agent.
[5] The
parties have raised two issues in this appeal:
1. Is the Appellant an entrepreneur and not an employee?
2. Are sales to the
general public, from the wharf in Comox, sales of the "catch" to a
"buyer" with particular attention to subsection 3(3) of the
Regulations?
[6] By
the definitions, in section 1 a "fisher" is a person engaged in,
working incidental to, or working constructing a vessel used in making a
"catch". A "catch" is, in this case, fish or prawns sold to
a "buyer". A "buyer" is not a consumer, rather a
"buyer" is a retailer or wholesaler who sells what he purchased from
the "fisher" to others.
[7] The
Appellant admitted that, while some of the 10 or 20 pound sales of prawns from
the wharf may be suspect, the sales of prawns from the wharf were to consumers,
usually in 1 or 2 pound amounts.
[8] The
Appellant argued for a generous interpretation of these sections and pointed
out possible working anomalies arising from their wording as described in
paragraph [6] hereof. But the wording is clear and the Court adopts paragraph
[6] as the meaning of the sections. For these reasons, the Appellant is not a
"fisher" and Mr. Skidmore is not a "fisher" with respect to
the sale of prawns from the wharf in Comox, despite the fact that they
organized their affairs based upon oral instructions which they received from
Employment Insurance personnel.
[9] There
is not enough evidence before the Court for the Court to determine if the
Appellant was otherwise employed by Skidmore in a normal employer – employee
relationship. Thus, the concepts contained in assumptions 8 d), e), g) and n)
which, raised together, indicate a non-employee or joint venture relationship
were not refuted.
[10] The issues are determined in favour of the Respondent.
[11] For these reasons, the appeal is dismissed.
Signed at
Kelowna, British Columbia, this 11th day of February, 2004.
Beaubier,
J.
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