[OFFICIAL ENGLISH TRANSLATION]
|
Citation: 2003TCC875
|
|
Date: 20031209
|
|
Docket: 2001-3321(EI)
|
|
BETWEEN:
|
|
9089-4114 QUÉBEC INC.,
|
|
Appellant,
|
|
And
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent,
|
|
And
|
|
MANON LABERGE,
|
|
Intervenor,
|
|
|
|
AND
|
|
|
|
Docket: 2001-3322(EI)
|
|
CARL TREMBLAY,
|
|
Appellant,
|
|
And
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent,
|
|
And
|
|
MANON LABERGE,
|
|
Intervenor,
|
|
|
|
AND
|
|
|
|
Docket: 2001-3324(EI)
|
|
MANON LABERGE,
|
|
Appellant,
|
|
And
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent,
|
|
And
|
|
CARL TREMBLAY OPÉRANT
RÉNO-CONCEPT C.T.,
|
|
Intervenor,
|
|
|
|
AND
|
|
Docket: 2001-3325(EI)
|
|
MANON LABERGE,
|
|
Appellant,
|
|
And
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent,
|
|
And
|
|
9089-4114 QUÉBEC INC.,
|
|
Intervenor.
|
REASONS FOR JUDGMENT
Deputy Judge Savoie
[1] These appeals were heard on common
evidence based on the main dockets 2001-3324(EI) and
2001-3325(EI).
[2] These appeals concern the
insurability of the employment of the Appellant,
Manon Laberge, with Carl Tremblay and 9089-4114
Québec Inc., the "Payers" during the periods at issue,
that is, from May 24 to November 19, 1999, and from May 22 to
November 10, 2000, respectively.
[3] On August 23, 2001, the Minister
of National Revenue (the "Minister") informed the Appellant of
the decisions rendered to the effect that after reviewing the
terms and conditions of employment, these employments were not
insurable employment during the periods at issue because it is
reasonable to conclude that the Appellant and the Payer would not
have entered into a substantially similar contract of employment
if they had been dealing with each other at arm's length.
[4] The Minister based the decision on
the following presumptions of fact set out in paragraph 5 of the
Reply to the Notice of Appeal in docket 2001-3324(EI):
(a) the Payer ran a
residential, commercial and industrial construction firm;
(accepted)
(b) the name of the
firm was "Réno-Concept C.T. "; (accepted)
(c) the Payer was
the sole proprietor of the firm; (accepted)
(d) the Appellant
was Carl Tremblay's common-law spouse; (accepted)
(e) the Payer was a
full-time employee of the Chicoutimi school board; (denied)
(f) the Payer
refused on several occasions to provide documents required for
the Respondent's investigation; (denied)
(g) the Payer's
office was located in his residence, which he shared with the
Appellant; (denied)
(h) the Payer did
not have a separate telephone line for the business and used his
residential telephone line; (denied)
(i) the
Appellant was the firm's secretary-receptionist; (denied)
(j) the
Appellant's duties consisted in doing the firm's accounting,
answering the telephone, writing letters and running errands;
(accepted)
(k) the Appellant's
work schedule varied and was not monitored; (denied)
(l) the
Appellant was on the payroll as receiving a fixed weekly salary
of $480 regardless of the number of hours actually worked;
(denied)
(m) no proof of the
Appellant receiving the salary was provided; (denied)
(n) due to the
Payer's refusal to provide the requested documents, the
Respondent was unable to rationalize the Appellant's salary based
on the Payer's activities and the quantity and volume of the
Appellant's duties; (denied)
(o) the Appellant
provided the Payer with services before and after the period at
issue; (denied)
(p) the period
allegedly worked by the Appellant is not the same as the period
during which she actually worked; (denied)
(q) the Payer and
the Appellant entered into an arrangement with a view to ensuring
the Appellant qualified for employment insurance benefits and
continued to work for the Payer. (denied)
[5] The presumptions of fact set out
in paragraph 5 of the Reply to the Notice of Appeal in docket
2001-3325(EI) are the same as the foregoing.
[6] The evidence provided by the
Appellant did not prove that the Minister's presumptions in
paragraphs (e), (g), (i), (l), (o) and (p) are false.
[7] Further, it was shown that the
residential telephone line was also used for business
purposes. The Appellant's and the Payers' cellular
telephones were also used for business purposes.
[8] It was shown that the Appellant's
work schedule was flexible and varied depending on the Appellant,
provided that her duties were carried out.
[9] The presumption in paragraph (m)
was true as of the date of the Reply to the Notice of Appeal,
that is, as of November 13, 2001.
[10] In connection with the Minister's
presumption in paragraphs (f) and (n), which describe the impact
of this refusal, the Appellant put forward a motion to reopen the
matter with a view to enabling the Appellant to provide proof to
refute the content of paragraph (f).
[11] This unusual motion was granted by the
Court after the parties' arguments were heard.
[12] It was made clear at the outset when
the matter was reopened that the parties could not provide
evidence or arguments that exceeded the parameters of the
presumption of fact set out by the Minister in paragraph 5(f) of
the Reply to the Notice of Appeal which reads as follows:
[translation] the Payer refused on several occasions to provide
documents required for the Respondent's investigation.
[13] The documentation provided by the
Payers' counsel, Me Masson, consisted of a letter he
and the Canada Customs and Revenue Agency (CCRA) exchanged
between May 28 and August 24, 2001.
[14] In her letter of May 28, 2001, to
Me Masson, Lyne Courcy, CCRA appeals officer, asked
the Payers to provide certain documents, including income and
expenditure records, bank statements and financial statements for
Réno-Concept C.T. and 9089-4114 Québec Inc. for
1999 and 2000.
[15] When counsel for the Payers received
this letter, he questioned the relevance of the requested
documents. For her part, Ms Courcy warned the Appellant,
who she said refused to provide the requested documentation, and
informed the Payers' counsel that the Minister could render
decisions that did not take the scope of the requested documents
into account because they had not been provided. However,
counsel for the Payers claims that he never refused to provide
the documents and the wording of his letters confirms this to the
point where one might perhaps wonder if he did not betray his
intention when he wrote the following on June 6, 2001:
[translation] We do not refuse, but your few arguments show us
that there is no reason to do so at present; and in his letter of
June 12, 2001: [translation] However, the questions you asked
during our telephone conversations concerning the documents that
you would like to obtain have no bearing on or relevance to the
said questions. In her letter of June 18, 2001, Ms Courcy
wrote that [translation] regardless of whether an officer of the
Minister acts in a quasi-judicial role or in an inspection role,
it is up to him or her to determine the best way to ascertain the
truth in accordance with the standards of what is reasonable.
[16] On June 21, 2001, Me Masson
faxed Ms Courcy a letter in which he asked her to provide a
reference to support this claim and a definition for the concept
of "standards of what is reasonable".
[17] In her response, the Minister's counsel
provided Me Masson with this Court's reasons for
judgment in Berthiaume v. Canada (Minister of National Revenue
- M.N.R.), [1998] T.C.J. No. 1067.
[18] At first glance, it would seem that the
Payers' counsel received a complete, proper and reasonable
response to all the questions he asked the Minister's
counsel. Every time he was given more time, he was told
that if he continued to refuse, the Minister could render a
decision without taking the documents requested and not provided
into account.
[19] It must therefore be determined
whether, under all the circumstances of the case at hand, the
Minister, through the appeals officer, exceeded the Minister's
authority, acted arbitrarily and not within the meaning of
subsection 88(5) of the Employment Insurance Act. The
Minister's discretionary authority is described in subsection
88(5) as follows:
Notwithstanding any other provision of this Act, but subject to
subsection (6), the Minister may for any purpose relating to the
administration or enforcement of this Part, by notice served
personally or by confirmed delivery service, require that any
person provide, within such reasonable time as is stated in the
notice,
(a) any information or additional information,
including any information return or supplementary return; or
(b) any document.
[20] Madam Justice Lamarre Proulx
of this Court explained the application and scope of this
subsection in the afore-mentioned Berthiaume decision.
[21] It is interesting to note that the
Court does not deem the Minister's discretionary authority,
through the appeals officer, to be subject to the Appellant's
will. The following are the Justice's words in paragraph
32:
[...]The Minister's appeals officer must render a
decision after forming an opinion on the case. His is a
quasi-judicial role. However, regardless of whether an officer of
the Minister acts in a quasi-judicial role or in an inspection
role, it is up to him to determine the best way to ascertain the
truth in accordance with the standards of what is reasonable. It
seems clear to me that a meeting or at least a telephone
conversation with the appellants was necessary to enable him to
assess the grounds of appeal and to allow the appellants to be
heard. Indeed, appellants do not always find a telephone
conversation sufficient to fully express their point of view.
However, this method may be acceptable for purposes of
efficiency. But there is definitely no obligation for the appeals
officer to proceed by means of a written questionnaire if he
deems that this is not how he will best shed light on a case. In
my opinion, in view of his lack of cooperation, the appellant
cannot complain that there was no investigation. In any case, I
find that the Minister had sufficient information to be able to
render his decision.
[22] An analysis of these facts shows that
the Appellant's position is not in keeping with the principle
established in Berthiaume (supra).
[23] This Court must therefore conclude in
connection with the foregoing that the Appellant did not prove
that paragraph 5(f) of the Reply to the Notice of Appeal was
false.
[24] The Appellant was paid $480 a week
regardless of the number of hours she worked. She was paid
$12 an hour like the installers. According to the
Minister, her salary is not justifiable. Further, it was
established that based on the financial statements,
Réno-Concept C.T. was running a deficit during the fiscal
years in which the periods at issue occurred.
[25] It was further established at the
hearing that the Appellant started working for the Payers six
weeks after the other employees and stopped before them.
She also worked for the Payers before and after the periods at
issue.
[26] Based on the Appellant's proof, she
continued to carry out certain duties during her benefit period,
such as preparing the employees' pay cheques which took her at
most five minutes on the computer. There is nothing,
however, in the evidence about what happened to her other duties,
such as contacts with clients, site visits, errands, office work
and duties involving the Payers' 100 suppliers, in short, the
many duties the Appellant cited to argue that her work is
essential to the Payers' firm, even if the firm's activities
decrease during certain periods.
[27] The Payers have a foreman on the
worksite, but Carl Tremblay, the Payers' sole shareholder,
maintains that the Appellant must be present because the foreman
on the worksite cannot leave. The Payers' most active
period is between May and November. This was confirmed by
the Appellant and Carl Tremblay. However, in 1998 and 1999, the
Appellant worked from October to January. The Appellant
simply explained that her services were required because there
were winter contracts.
[28] The analysis of the evidence shows that
sometimes the explanation provided by the Appellant raises other
questions and it becomes confusing. In other words, the
Appellant's answer to a specific question seems satisfactory at
first glance, but when the evidence is analyzed in its entirety,
its credibility becomes questionable.
[29] The Appellant cited Théberge
v. Canada (Minister of National Revenue - M.N.R.), [2002]
F.C.J. No 464, to argue that the work the Appellant performed
outside the periods at issue, since it is minimal, cannot justify
the conclusion that her employment is excepted from insurable
employment.
[30] In Théberge
(supra), the Federal Court of Appeal examined a case
similar to the case at hand and had the following
characteristics:
a) the dates
when the active season started and ended varied over the
years;
b) the
applicant worked the minimum number of weeks required and drew
the maximum benefits from the unemployment insurance scheme. That
is common in seasonal employment, however, and is not explained
by the non-arm's length dealing;
c) that the
applicant expected to take over the farm, is typical of family
businesses and explains perhaps why a father would hire his son
rather than a stranger, but does not in any way show that the
terms and conditions of employment are more favourable;
d) with
respect to the bookkeeping, the evidence showed that it required
"between half an hour and one hour per month". That is
an insignificant amount of work for the purposes of this
proceeding.
e) "to help
out" their father. That was "pretty much what
everybody" did; it was "pretty much" how things
worked "on every farm"
[31] I think it goes without saying, and the
evidence bears this out, that in the case of a family business
involved in seasonal pursuits, the family members are not usually
paid to perform the little work that has to be done outside the
active period.
[32] A claimant is not required to be
completely inactive during his or her benefit period. The
foregoing constitutes some of the facts retained by the Court of
Appeal, which, in the final analysis, overturned the trial court
judge's decision to uphold the Minister's decision that the
worker's employment was excepted from insurable employment.
[33] In response to this argument, the
Minister's counsel maintained that the Théberge
decision is an individual case and does not apply to the case at
hand. The Minister's counsel referred to 2759-4605
Québec Inc. v. Canada (Minister of National Revenue -
M.N.R.)[2002] T.C.J. No 566 and cited the following
written by Justice Somers:
[Translation] The Appellant's counsel refers the Court to the
Carol Théberge v. Canada decision [...], in
which the Federal Court of Appeal ruled that the fact that the
son of a farmer worked without pay on the family farm while he
was receiving unemployment insurance benefits could not affect
the insurability of his employment because it was a family
business involved in seasonal pursuits.
This jurisprudence is a particular case and should not apply
to the case at hand. The Appellant corporation was run
year-round and had a particular vocation.
[34] The Appellant was asking the Court to
overturn the Minister's decision. It is therefore appropriate to
examine the circumstances under which this Court can intervene
and grant the Appellant's request.
[35] In Canada (Attorney General) v.
Jencan Ltd., [1998] 1 F.C. 187 (C.A.), the Federal Court of
Appeal established the parameters for this by stating the
following in paragraph 31:
The decision of this Court in Tignish [...]
requires that the Tax Court undertake a two-stage inquiry when
hearing an appeal from a determination by the Minister under
subparagraph 3(2)(c)(ii). At the first stage, the Tax Court must
confine the analysis to a determination of the legality of the
Minister's decision. If, and only if, the Tax Court finds
that one of the grounds for interference are established can it
then consider the merits of the Minister's decision. As will
be more fully developed below, it is by restricting the threshold
inquiry that the Minister is granted judicial deference by the
Tax Court when his discretionary determinations under
subparagraph 3(2)(c)(ii) are reviewed on appeal. [...]
[36] Chief Justice Isaac continued his
analysis by stating the following in paragraph 33:
[...] Because it is a decision made pursuant to a
discretionary power, as opposed to a quasi-judicial decision, it
follows that the Tax Court must show judicial deference to the
Minister's determination when he exercises that power. Thus,
when Décary J.A. stated in Ferme Émile, supra, that
such an appeal to the Tax Court "more closely resembles an
application for judicial review", he merely intended, in my
respectful view, to emphasize that judicial deference must be
accorded to a determination by the Minister under this provision
unless and until the Tax Court finds that the Minister has
exercised his discretion in a manner contrary to law.
[37] The Federal Court of Appeal summarized
the authority of this Court as follows in paragraphs 36 and 37 in
Jencan (supra):
Thus, by limiting the first stage of the Tax Court's
inquiry to a review of the legality of ministerial determinations
under subparagraph 3(2)(c)(ii), this Court has merely applied
accepted judicial principles in order to strike the proper
balance between the claimant's statutory right to have a
determination by the Minister reviewed and the need for judicial
deference in recognition of the fact that Parliament has
entrusted a discretionary authority under this provision to the
Minister.
On the basis of the foregoing, the Deputy Tax Court Judge was
justified in interfering with the Minister's determination
under subparagraph 3(2)(c)(ii) only if it was established that
the Minister exercised his discretion in a manner that was
contrary to law. And, as I already said, there are specific
grounds for interference implied by the requirement to exercise a
discretion judicially. The Tax Court is justified in interfering
with the Minister's determination under subparagraph
3(2)(c)(ii)-by proceeding to review the merits of the
Minister's determination-where it is established that the
Minister: (i) acted in bad faith or for an improper purpose or
motive; (ii) failed to take into account all of the relevant
circumstances, as expressly required by paragraph 3(2)(c)(ii); or
(iii) took into account an irrelevant factor.
[38] As demonstrated above, the authority of
this Court are established as specified in the Jencan
(supra) decision, where it was ruled that this Court is
justified in interfering with the Minister's decision pursuant to
subparagraph 3(2)(c)(ii) of the Unemployment Insurance
Act, now subparagraph 5(3)(b) of the Employment
Insurance Act, by reviewing the merits of the Minister's
decision where it is established in the particular case that the
Minister: (i) acted in bad faith or for an improper purpose; (ii)
failed to take into account all of the relevant circumstances as
expressly required by subparagraph 3(2)(c)(ii); and, (iii)
took into account an irrelevant factor.
[39] The burden of proof was on the
Appellant to prove that these specific grounds for interference
existed and the Appellant did not do so. Chief Justice
Isaac ruled in paragraph 42 of the Jencan decision:
[...] Thus, while the Tax Court must exhibit judicial
deference with respect to a determination by the Minister under
subparagraph 3(2)(c)(ii)-by restricting the threshold inquiry to
a review of the legality of the Minister's determination-this
judicial deference does not extend to the Minister's findings
of fact. To say that the Deputy Tax Court Judge is not limited to
the facts as relied upon by the Minister in making his
determination is not to betray the intention of Parliament in
vesting a discretionary power in the Minister. [See Note 26
below] In assessing the manner in which the Minister has
exercised his statutory discretion, the Tax Court may have regard
to the facts that have come to its attention during the hearing
of the appeal. As Desjardins J.A. stated in Tignish:
[...] the court is entitled to examine the facts which are
shown by evidence to have been before the Minister when he
reached his conclusion so as to determine if these facts are
proven. But, if there is sufficient material to support the
Minister's conclusion, the court is not at liberty to
overrule it merely because it would have come to a different
conclusion.
[40] In the opinion of this Court, the
Appellant did not prove the grounds for interference as required
pursuant to the principle established in Jencan
(supra). Under the circumstances, this Court must conclude
that the grounds for interference were not demonstrated by the
Appellant. Consequently, the appeals are dismissed and the
Minister's decisions upheld.
Signed at Grand-Barachois, New Brunswick, the 9th
day of December 2003.
Savoie, D.J.
Certified true translation
Colette Beaulne
Email this Content