Legal v. M.N.R., docket 98-954-UI

Date: 20000108

Dockets: 98-954-UI; 98-979-UI

BETWEEN:

RUTH LEGAL, MARCEL ALMEY,

Appellants,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

Reasons for Judgment

Rowe, D.J.T.C.C.

[1] On June 4, 1998 the Minister of National Revenue (the "Minister") decided that the employment of Ruth Legal (the "worker") was not insurable during the periods from May 11, 1992 to October 10, 1992; June 14, 1993 to October 30, 1993; September 1, 1994 to October 29, 1994; and October 1, 1996 to November 30, 1996 on the basis she and Marcel Almey (the "payor") were not dealing with each other at arm's length within the meaning of subparagraph 3(2)(c)(i) of the Unemployment Insurance Act and paragraphs 5(2)(i) and 5(3)(a) of the Employment Insurance Act and therefore she was engaged in excepted employment.

[2] A notice of the above decision was also sent to Marcel Almey in his capacity as employer of the appellant, Ruth Legal. Marcel Almey and Ruth Legal each filed a separate appeal from the decision of the Minister and counsel for the Respondent, counsel for Ruth Legal and Mr. Almey, representing himself, agreed the evidence taken would apply to both appeals.

[3] The position of the Minister is that during the relevant periods, although the worker and payor were not related persons within the meaning of paragraph 251(1)(a) of the Income Tax Act - as it applies to the Unemployment Insurance Act and the Employment Insurance Act - the parties - as a matter of fact - did not deal with each other at arm's length.

[4] Counsel for the appellant Ruth Legal agreed the following assumptions of fact contained in paragraph 3 of the Reply to the Notice of Appeal were correct:

"(a) the Payor operates a mixed farming business raising livestock and growing crops;

(e) the Payor has approximately 100 head of cattle;

(f) both the Payor and the Worker stated that the Worker was hired on a seasonal basis to provide services as a farm labourer;

(k) during the period from May, 1997 to December 1997, the Worker provided services to the Payor on an exchange basis, with the Worker providing farm labour and housekeeping to the Payor in exchange for room and board;

(l) the Worker has resided at the premises of the Payor continuously since 1975, including during the time period in each year when she was not providing any services to the Payor as a labourer;

(r) according to the Worker, the salary received by her was $700.00 per month in 1976, $800.00 per month for 1988 and 1989 and $1,000.00 per month in 1991 and subsequent years;

(s) both the Payor and the Worker stated that the salary was paid in cash;

(v) the worker did not receive any vacation pay or paid vacation;

(w) the Payor hired no other workers during the period from 1976 to 1996, including during the 1990 and 1995 years when the Worker did not provide any services to the Payor;

(x) neither the Payor or the Worker kept track of the hours worked by the Worker;

(cc) commencing in the 1992 year, the Worker also commenced to work on a part-time basis as a private home care worker;

(ee) the Payor allowed the Worker to work away from the farm in order to carry out the duties as a private home care worker and to work around these hours;"

[5] The appellant, Ruth Legal, testified she is employed as a Nurse's Aide and resides in Glensboro, Manitoba. She was born in Winnipeg and grew up on a farm near the city. After completing Grade 8, she moved to Winnipeg, married and had children. Upon seeking entrance into an upgrading program, she was advised her educational level had been assessed at Grade 6. In 1975, her marriage broke up and she moved out of her former matrimonial home with her three children aged, 10, 9, and 7. She knew Marcel Almey and approached him with the idea that he needed help to run his farm and she and her children needed a place to live. Initially, she worked only for room and board for herself and the children. In 1976 - in the month of June - as a result of discussions between herself and Almey, she began receiving a wage in return for working. Her duties involved cultivating, fixing fences, helping out with the cattle, hauling grain and baling hay. Almey assigned tasks and set hours of work in accordance with the demands of the farming operation and the weather. Almey and Legal had decided she would receive a monthly wage of $700.00. At the time, she considered that to be a fair wage and she and the children lived in the upstairs portion of the farm house owned by Almey. She paid Almey rent in the sum of $100.00 per month. Her duties did not include cooking for Almey nor performing any household or personal care duties such as doing laundry or running errands. Almey was her landlord and her employer and that was the nature of the relationship. In accordance with an arrangement that suited both of them, Almey paid her wages in cash at the end of every month and, in return, she paid him cash for the rent. Her only other source of income was family allowance and a total of $25.00 per month in maintenance from her estranged spouse. The appellant, Ruth Legal used a scribbler to write down her starting date for work each year and would also record the amount of pay received and the deductions from those amounts. She was not able to produce the scribblers at trial but was certain they have been packed away somewhere. The deductions from her pay were for unemployment insurance and Canada Pension Plan premiums and income tax. She was aware these deductions were necessary because she had been employed in Winnipeg. She contacted Revenue Canada and received a booklet with tables and schedules allowing her to figure out the exact amount of deductions to be taken off her pay and sent in by Almey in his role as her employer. Almey cannot read or write and she undertook the task of using a toll-free number to obtain assistance in ensuring the calculations done by her were correct. Almey preferred to make up one receipt per year acknowledging payment of rent by Legal and these were filed as Exhibit A-1 covering the period 1988 through 1999. Almey had his own receipt book which was used solely for the rent payments. The only time she did not pay rent on a regular monthly basis was during a period in 1997 when she was short of funds and worked on the farm in exchange for rent. Filed as Exhibit A-2, were receipts for wages received by Ruth Legal during periods in the years 1992 through 1996. Each year when she was laid off due to lack of work on the farm, a Record of Employment was prepared and Almey would sign it. During those years, Ruth Legal made a written record of starting times of her work and other relevant details. She did all the bookkeeping associated with her payroll (Exhibit A-3). It did not take much time as the calculations were more or less the same for long periods. She also completed and submitted the GST forms for Almey. As the years went on, she learned how to drive a tractor and a car. In 1993, she worked two or three weeks in June and then again in October. The reason for working less on the farm was that she began working as a home care provider on the basis of one or two days a week and continued in that occupation until 1998. In June, 1993, Almey paid her wages based on one-half a month. At other times in various years, she worked on the farm and also doing home care. Almey continued to pay her full wages because she would work on the farm from 7:00 a.m. to 9:00 a.m. and then leave to perform her home care duties. She would return to the farm at 4:30 p.m., change clothes and work on the farm until dark. During 1999, she worked from September to October 29th helping with the harvest and with the cattle. In 1997, Almey had reduced the size of his farm once again and he did not require as much help as in the beginning of their working relationship. Throughout the long period she worked for Almey, she stated he assigned her work on a day-to-day basis and also checked up on her to see if it was satisfactory. She never had any share of the assets or profits of the farm. Her children referred to Mr. Almey by his first name - Marcel - at his request. She knows of other farm labourers in the area who live in the main farm house of their employer. In her view, due to her lack of education it was necessary to find work as a farm labourer or in the field of private home care. She is now attending classes at Misericoridia Hospital in Winnipeg with the intent of obtaining qualifications which would permit her to work in private homes, hospitals or care facilities. In response to the assumption contained at paragraph 3(l) of the Reply, she stated that was basically correct except she worked less in 1994 and 1996 but basically provided services as a labourer to Almey and lived at his farmhouse since 1975. As to the Minister's assumption (paragraph 3(n)) that "neither the worker or the Payor were able to indicate exactly how much rent, if any, was actually paid by the Worker to the Payor" Legal stated she paid the sum of $100.00 per month rent between 1976 and 1988 - after which she paid $150.00 per month until 1991 - and then $200.00 per month at the end of 1997. She always paid this rent except for a few months in 1997 when she exchanged work for rent. The Minister assumed (paragraph 3(t)) that she would have worked for only room and board if there had been a poor crop and Almey could not afford to pay her. Legal states this is not true and the matter never arose as he always paid her the wages due for her work. She agreed she received the sum of $1,674.34 - after deductions - from Almey during the 1996 calendar year and agreed she did not receive any vacation pay. She had made inquiries in the local area and discovered farm-hands were not paid any holiday pay. The Minister - at paragraph 3(y) - assumed the periods of employment of the worker did not coincide with the normally anticipated busy times on a farm requiring the services of a farm labourer. Legal responded by pointing out Almey often did custom work such as combining and baling for other farmers in the area and would leave her to do the work on his farm. Also, there was always about 100 head of cattle on the farm. She stated it was never her intention to schedule work only to be able to qualify for unemployment insurance benefits. She worked only 2-3 days a week as a private home care worker and not 3-5 days as assumed by the Minister (paragraph 3(dd)). Legal explained that - as of 1992 - the children had left home. She and Almey still maintained the relationship of landlord-tenant and employer-employee. She found the home care work to be rewarding as she was often treated like a family member and was invited to birthday parties and other gatherings. In her words, "we kind of adopted each other." Her relationship with Almey was not as close although she does consider him to be a good friend. Many years ago, she was interviewed by some government officials about her job and her entitlement to unemployment insurance benefits but she never had any other question raised about her working relationship with Almey until after November 30, 1996 when she no longer worked for him.

[6] In cross-examination, Legal stated that, after 24 years, she and Almey still live in the same house. Since the end of 1991, there have been no children living with her. Upstairs, there are four bedrooms and she still lives there while Almey occupies the downstairs. During the last couple of years, he would invite her to share breakfast with him if he had made porridge. From 1992 onwards, they bought groceries together as a matter of convenience since the grocery store was located 20 miles from the farm and he would allow her to use one of his vehicles on condition she purchase the fuel and make necessary repairs. During the winter months, she would go with her daughter to bingo games or visit the casino in Regina just to get away from the farm for a while. Almey went with her to a couple of bingo games but did not enjoy himself and they did not attend any other social events or gatherings together. Her layoff periods would commence when the work was done for that particular year and the spring work usually began in May or June depending on the weather and the types of crop seeded. The harvest usually took place in September and later on and Almey would do custom work. Almey had an accountant prepare his income tax returns but she completed the 1996 Record of Employment for him to sign. She also received a Record of Employment - Exhibit R-1 - pertaining to her work as a home care attendant. On October 9, 1996, the lady she had been caring for was placed into a nursing home - after having been on a waiting list for a long time - and Legal's employment was ended as a result. At that point, she had only worked 16 weeks. About October 1, 1996, she started helping Almey with finishing off the combining, cultivating and helping with the cattle for a period of 8 weeks. After the work ended, she completed the application, sent it in and received her insurance benefits. Prior to 1996, she had received her benefits in due course and she never had any reason to be concerned with the specific number of weeks of employment needed to qualify for benefits because that number seemed to change from year to year. The Record of Employment -Exhibit R-2 - covered the period October 1 to November 30, 1996. According to the Record of Employment - Exhibit R-3 - she worked 28 weeks in 1995 - as a home care attendant - for Doreen McMillan. In 1994 - according to Records of Employment – Exhibits R-4 and R-5 - she worked 14 weeks for Doreen McMillan and 8 and 2/3 weeks for Almey. In 1993, according to the Records of Employment - Exhibits R-6 and R- 7 - she worked 13 weeks for McMillan and 12 weeks for Almey. In 1992, she worked about 12 weeks for McMillan and 22 weeks for Almey - Exhibits R-8 and R-9. Legal stated Revenue Canada would send out a booklet each year to Almey concerning deductions and other information. She received a letter from Revenue Canada - Exhibit R-10 - and provided information as requested. In 1998, she changed her mail delivery to Glenboro instead of a postal box number in Baldur, Manitoba belonging to Almey that they had previously shared. She applied for a postal box in Glenboro but is on a waiting list. In applying for benefits in 1995 - Exhibit R-11 - she filled out the box number in Baldur. Since 1976 or 1977, the officials in the administration of unemployment insurance premiums and benefits have known she resided in the house of Marcel Almey. Ruth Legal explained there was another home care worker attending to Mrs. McMillan and she would take over when that other person took time off or was otherwise not available. She recalled some person - presumably an investigator - from Revenue Canada attending at the Almey farm with some documents in his hand. As to the timing of providing receipts to Revenue Canada, Legal stated she is not certain when that was done whether at the time or later on. Most definitely, she denies preparing receipts following the visit of the investigator. For example, the notations and entries on Exhibit A-3 - were made by her month-to-month and not later. She always retained her time records with her income tax returns and the investigator did not ask her about her method of keeping track of pay or calculations of deductions. Counsel for Ruth Legal provided copies of receipts for rent by letter dated May 13, 1998 - Exhibit R-12 - together with a statement in the form of a hand-written letter - signed - but not prepared by Almey or by Legal - setting forth details of their rental agreement which had been in effect since 1978. This document was only a photocopy and the quality was poor due to the fact as a result of the ink having "bled" through the lined paper over the years. The rental agreement had been drawn up in 1978 at the request of Revenue Canada officials who had indicated they preferred such an agreement over the previous verbal arrangement between the parties commencing in 1975. The written agreement was then put away in a steel box for safekeeping. Legal indicated the original agreement was with her in Court and she could produce it for inspection. Legal vociferously denied having had that document prepared only after the visit from the investigator from Revenue Canada at the farm on April 15, 1997.

[7] In re-examination, Legal produced the original rental agreement and it was filed as Exhibit A-4. The agreement was entered into at the suggestion of the officials examining her entitlement to unemployment insurance benefits - in 1978 - mainly surrounding her ability to perform the farm work. Once that was cleared up, Legal stated there was never another problem in receiving insurance benefits. She explained that - since 1997 - she and Almey eat more meals together but during the periods covered by the appeal she cannot ever recall shopping with him for groceries. The procedure they followed was that he would give her a list of items he needed and she would make the purchases and be reimbursed by him. Prior to 1992, she would request permission to use Almey's 1/2 ton truck each time she needed it but later on he bought a car and she used it to drive to her home care work. She worked as much as possible as a home care attendant and often asked for more hours but others had priority. She was paid at an hourly rate of $6.00.

[8] Marcel Almey testified he is a farmer residing at Baldur, Manitoba. He left school at age 14 having completed only Grade 4 due to being able to attend school only part of the year because of severe winter weather. He worked as a carpenter's helper and was able to take over the family farm at the end of the 1960's. His mother tongue is Flemish and, although he learned English in school, he was never able to read or write properly in the language. In 1973, Almey's father died and Almey hired someone to help out on the farm. He met Ruth Legal through friends and she told him she needed a job and a place to live. He hired Ruth Legal to work on his farm. This enabled him to have the time to do custom work and earn sufficient money to purchase another tractor. In 1975, he had to show her how to do much of the work. In 1976, and thereafter, she had learned how to operate the tractor, baler and other machinery. She would use the older tractor for cultivation while he used the new one for custom work. On occasion, he made her re-work some spots she had missed because she was his employee and she was working for him. He never intended that she do the laundry or cook and clean and he has always done those tasks for himself and his father. He decided what work was to be done and the time it should be started as some years the farming operations were later than others. He hired her by the month and did not want the bother of keeping track of hours. He was satisfied with the arrangement as she knew what chores had to be done around the farm and he even became used to having children around the place. He mainly used cash because he did not know how to write cheques. Sometimes, other people filled out a cheque and he would sign it. He and Ruth Legal agreed upon the salary she would be paid. In the early 90's, he reduced grain production and increased the size of his cattle herd. The work changed to take this into account and it required more baling and repairing of fences. On occasion, he thought about hiring someone without children to work for him but he would then realize that Legal knew the work and carried it out very well. As to the assumption of the Minister at paragraph 3(y) of the Reply, he disagreed that the periods of her employment did not coincide with the periods of time when it would be expected the duties of a farm labourer would be required to be performed. Instead, Almey stated he hired her when there was work to be done. When the opportunity arose for her to work as a home care attendant, he gladly allowed her to do that work as it was lighter and "good for her". However, she was still able to carry out her duties on the farm in a satisfactory manner when not occupied at her other job. The Minister - at paragraph 3(z) - assumed that it was not reasonable for Almey to hire Legal given the size of his farming operation. Almey explained he had small farm equipment and it would take him one week to carry out an operation that a farmer with big machinery could do in one day. In addition, he did custom cultivating work which brought in $65.00 an hour and custom baling at $6.00 per round bale. The Minister - at paragraph 3(aa) - assumed there was no correlation between the periods of hiring and the amount of work to be done. Almey explained the hay baling is done in June and July. In August, the straw is baled and that continues through September and into October, especially in the case of flax which was the last crop to be done in order for it to be sold to processing plants. While he was performing this work, Ruth Legal would be looking after his farm. At paragraph 3(bb), the Minister suggested Legal had worked for Almey at various times without receiving any payment therefor. Almey stated the only services she provided when not actually on his payroll was to check on the animals for him and to keep an eye on the corrals and fences. She would not feed the cattle during those times. In 1992, he seeded part of the land to hay and this reduced the amount of help required. From the beginning - in 1975 - Ruth Legal was hired on strictly as a farm-hand on the basis of their relationship being "strictly business" and there has been no romantic involvement between the two of them in all those years. In 1997, she was short of funds to pay rent and he let her stay on in the house. He always paid her wages and it was never dependent on whether or not he had good crop, as assumed by the Minister (paragraph 3(t)). He paid her at the end of every month. Currently, Ruth Legal still lives in his house while attending school to receive certification as a home care attendant. During 1997 and 1998, she helped out around the yard. Overall, she was a good employee and the working arrangement was always satisfactory.

[9] In cross-examination, Almey stated he and Legal - now - were good friends and had developed that friendship from 1992 onwards. Initially, he hired her as a "bit of a favour for his friends" but he adjusted to her and her children being around the farm. He did not recall her being laid off from her home care work in 1996. He does not specifically recall hiring her as at October 1, 1996 but only hired her if there was work to be done. As an example, he purchased additional cattle and he had to do more baling. On another occasion, he and his nephew exchanged some services but when Legal was not available to do certain types of work he merely worked harder himself and never hired anyone else to replace her. In 1997, his gross farm income was $73,000 without any hired help. In 1992, his gross farm income was $48,000 and - in 1993 - it was $79,000. However, Almey stated the income is affected by the price of cattle and grain and does not relate to the actual time or effort expended within a given year. Ruth Legal looked after all the paperwork relating to her employment with him because he cannot read or write and has to depend on others to be honest with him. He stated he finds it harder and harder to deal in cash as things are so expensive and he has to carry a large amount of money around with him to the point where it is becoming impractical. He cannot recall the visit of any Revenue Canada investigator to the farm in April of 1997. However, in his view all receipts are in order and when he paid wages to her she would sign a receipt. His usual practice was to attend at the bank and cash a cheque he had received from the sale of grain or cattle. He would sell grain throughout the year because he needed to have some cash every month to take care of bills. Rarely, he may have been late in paying Legal's wages but by the end of the month he would pay her what he owed her and she would - in turn - pay him the rent. He was never concerned with the actual hours of work because they both knew what had to be done and he paid her a monthly salary to perform those services. Provided the work was done properly, then he could be flexible and allow her to work at the home care job. In all the years he has been farming, 1999 was the one involving the least effort due to the weather-related problems preventing him from following usual practice.

[10] Marcel Almey did not call any witnesses in respect of his particular appeal.

[11] Counsel for the appellant submitted the evidence clearly revealed Legal and Almey had struck a reasonable bargain in light of their own particular circumstances. The farm - located 120 miles south-west of Winnipeg - is not like the traditional marketplace and the Minister had no personal contact with the parties and, as a consequence, many of the assumptions upon which the Minister had relied were proven to have been wrong.

[12] Counsel for the respondent agreed the parties were not related within the meaning of the Income Tax Act and therefore the deeming provision does not come into play. Rather, the Minister made a finding of fact that - during the relevant periods - the parties were not dealing with each other at arm's length. Counsel pointed to the 1995 year when Legal had worked 22 weeks in her home care job and was not hired on - at all - by Marcel Almey. Counsel submitted the evidence supported a finding that the periods of employment varied in order to match up with the weeks of employment needed overall to qualify for benefits and Ruth Legal was aware of the requirements before benefits would be paid to her. Further, Counsel submits the evidence supports the allegation that the various receipts were created after the fact and cannot be relied upon especially in light of the fact no other employee was ever hired by Almey before, during, or after the periods of employment at issue in the within appeals. Counsel conceded some periods of employment could be severed from others leading to a different result depending on the circumstances applicable to a specific time frame.

[13] The relevant provision of the Unemployment Insurance Act is paragraph 3(2)(c). The same provision appears at paragraph 5(3)(b) of the Employment Insurance Act. Since Ruth Legal - the worker - is not related to Marcel Almey - the payor - the Minister does not undertake the analysis required by subparagraph 3(2)(c)(ii) of the Unemployment Insurance Act. The effect of this is that the Minister does not have the benefit of being accorded the judicial discretion attaching to the performance of his duty under that provision. Under that specific head, the Minister would be acting quasi-judicially and, in so doing, becomes subject to the test set out in the jurisprudence (See Tignish Auto Parts Inc. v. M.N.R., 185 N.R. 73, Ferme Émile Richard et Fils Inc. v. M.N.R., 178 N.R. 361 and Her Majesty the Queen and Bayside Drive-in Ltd., (1997) 218 N.R. 150). Those decisions and many others have confirmed that the intervention by the Tax Court must be circumscribed in accordance with the analysis required to be undertaken. In the within appeal(s) I am not required to conclude whether or not there was - overall - enough evidence to justify the Minister having come to the conclusion arrived at despite making errors in the process. Here, it is a matter of an appeal - on the basis of what has been referred to a de novo - as though it were an appeal pursuant to paragraphs 3(1)(a) or 5(1)(a), respectively of the Unemployment Insurance Act and the Employment Insurance Act where the issue would be whether or not there was any contract of service resulting in a true employment relationship with the payor. In paragraph 7 of the Reply, the Minister pleaded the worker was not engaged in insurable employment during the periods in question because the employment constituted an exchange of work or services within the meaning of both Acts. In paragraph 8 of the Reply, the Minister pleaded the worker was not in insurable employment because she was not engaged pursuant to a contract of service within the relevant provisions of both Acts. Since the Minister's ability to take the shot-gun approach - both at the time of decision and subsequently in the pleadings - when denying insurability to a citizen, has received judicial approval binding on me I will make no further comment.

[14] There were a substantial number of assumptions made by the Minister which were clearly disproved by the evidence of Ruth Legal and/or Marcel Almey. It is obvious the Minister considered the long-standing living arrangement of the parties and concluded their relationship was more than employer-employee. As a consequence, the thrust of the Minister's assumptions is that - if she worked at all - she did so only to qualify for unemployment insurance benefits on an exchange basis and was never actually paid any wages. However, Ruth Legal never provided any housekeeping services to Almey and she resided in the house for 24 years including periods when she was not Almey's employee. The Minister denied Legal had ever paid any amounts for room and board to Almey. The payment was not for board as she did all her own cooking but it was for rent of the upstairs portion of the house. Only in 1997 - after the relevant periods in issue - did she ever not pay any rent and that was because she was attending school and was short of money. The evidence does not support the conclusion of the Minister that Legal's salary was - in any way - dependent on the extent of the crop or otherwise linked to the financial position of Almey. There is a good and valid and reasonable reason for the use of cash by Almey and for Legal to have done the bookkeeping and preparation of the requisite forms required for remittances of premiums and tax and GST. In my view, Ruth Legal is to be commended for relying on the services of a toll-free line and otherwise obtaining assistance from Revenue Canada in order to comply with the complexities of the law relating to employers and employees. She only had an education level of Grade 6 and knew she had to struggle to do the bookkeeping and entries in a careful and proper manner. Ruth Legal - after 1992 - did not work as a home care worker 3-5 days a week. She worked 2 or 3 days a week on the basis she would be called in to work when the more regular and senior - in terms of service - attendants were not available. She would not know - in advance - the extent of the work in a given period and it would also depend on whether the person moved into a care facility. It was reasonable for Almey to permit her to work as a home care worker and also to do the necessary work on the farm. The Minister was not aware of the extent of Almey's custom-farming operation which took him away from his own farm where he could earn 9 or 10 times as much per hour as he was paying Legal. The Minister was not aware of the capacity of the farm equipment used by Almey when assuming it was not reasonable for him to hire any help considering the size of the farm. The parties had a working relationship that endured over 20 years and they still have a friendship which has matured over nearly 25 years. It is not necessary for people to recall exactly why someone was hired to do a specific task within a particular time period, especially on a farm when the seasons run into each other and many activities are weather dependent. It is not for the Minister to inquire as to why someone was not hired at a particular time if the evidence is that all hiring was tied to a specific need depending on time and circumstances. Similarly, rather than hiring an outsider there is nothing preventing an employer from waiting for the return of his usual employee by working harder in the interim or obtaining a helping hand from a friend or relative on a personal non-monetary basis. Other times, some work can be left to accumulate until the usual employee is again able to attend and perform certain tasks. The farming operations of the payor had evolved over the years as had the working activities of Ruth Legal. They were able to arrange their schedules in order to accommodate one another and the needs of the farming operation. In cases of this type, much depends on the credibility of the witnesses and the overall context of the testimony. I accept the evidence of both appellants and the effect of all of the evidence is that it disproves sufficient of the assumptions of the Minister so as to destroy the basis upon which the decision was made. I find it offensive for the Minister to have suggested the appellants manufactured evidence in the form of receipts or that the agreement - Exhibit A-4 - was drafted only after the visit of the Revenue Canada investigator on April 15, 1997. Ruth Legal advised Counsel for the respondent she had the original document in Court and offered to produce it but she was not asked to do so until her own Counsel had it entered as an exhibit during the course of her re-examination. It does not take a professional document examiner to conclude - under the circumstances revealed by the testimony of Ruth Legal - that the rental agreement was prepared many years prior to 1997, in fact, probably about 1978 after Legal had been required to provide certain explanations of her living situation to officials within the unemployment insurance benefit administration involved in investigating her claim. I also must take into account the extent of the maturation of the relationship subsequent to 1992 and it is possible to conclude on the evidence that the very last period of employment between October 1 and November 30, 1996 was based on Almey's desire to provide Legal with additional employment once she had been laid off as a health care worker. Almey did not specifically recall the event and did not remember the nature of the work done at that time except to state he was not in the habit of hiring her unless there was work to be done. However, the evidence of Legal is that he was combining, doing fall cultivating and that she also helped him with the cattle. One must remember Legal was earning $6.00 an hour as a health care worker. It would not be unreasonable - while the weather was still good - for her to seek additional work on the farm in order to supplement her income. Almey was the employer and it is his decision whether or not to do any hiring. Unlike specifically sanctioned provincial or municipal make-work schemes, there was no need for Almey to obtain prior approval from any government official. Again, where there is an allegation of sham or bad faith or manufacturing of supporting documentation put forth by, or on behalf of, the Minister in the course of denying insurability, the proof had better be there or no notice will be taken of such an attack and certainly not when solid evidence rebuts any such allegations or implications. During the relevant periods, the evidence demonstrates the work was done, as and when required, and the worker was paid for her services which were performed under circumstances consistent with an arm's length relationship.

[15] Both appeals are allowed and the decision in each instance is varied to find as follows:

- the appellant, Ruth Legal was in insurable employment with Marcel Almey - the payor - during the periods from May 11, 1992 to October 10, 1992; June 14, 1993 to October 30, 1993; September 1, 1994 to October 29, 1994 and October 1, 1996 to November 30, 1996.

Signed at Edmonton, Alberta, this 8th day of February 2000.

"D.W. Rowe"

D.J.T.C.C.