REASONS
FOR JUDGMENT
Sommerfeldt J.
I. Introduction
[1]
These Reasons pertain to the Appeal by the
Appellant in respect of a reassessment (the “Reassessment”)
issued to him by the Canada Revenue Agency (the “CRA”),
on behalf of the Minister of National Revenue (the “Minister”),
in respect of the 2011 taxation year. The Reassessment, which was embodied in a
Notice of Reassessment dated December 3, 2012, included in the computation
of the Appellant’s unreported employment income the amount of $5,759, allegedly
paid to him by D+H Limited Partnership (“D+H”).
As well, pursuant to subsection 163(1) of the Income Tax Act, a penalty in respect of that
unreported employment income was assessed.
[2]
Although it was not clear from the pleadings, as
the hearing progressed, it became apparent that the Appellant was alleging
that he had been the victim of identity theft. As will be discussed below, a
similar allegation had been raised, and refuted, in previous proceedings
in this Court.
Although the Appellant did not provide any convincing evidence at the
hearing of this Appeal that he had been the victim of identity
theft, based on the evidence that was adduced, a possibility was
raised that perhaps the Appellant’s brother, Albert Hayfron-Benjamin, had used
the Appellant’s name and Social Insurance Number (“SIN”) to obtain employment.
This possibility will be discussed further below.
II. Background
A. Pleadings
[3]
The Appellant’s exceptionally brief Notice of
Appeal did not set out any details concerning the factual circumstances that
provided the context for the Reassessment, nor did the Notice of Appeal
identify the issue in question or the basis on which the Appeal was brought.
However, it appears that the Appellant attached to his Notice of Appeal a copy
of the Notice of Confirmation sent to him by the CRA on December 2, 2013. The
third and fourth paragraphs of the Notice of Confirmation read as follows:
The basis of your
objection is that you did not work for D & H Partnership [sic] in
2011 thus the $5,759.00 of employment income added to your tax return is incorrect.
You also dispute the federal omission penalty of $576.00 and arrears interest
charged of $77.00.
A review of the
facts and documents submitted indicates that based on information received from
D & H Partnership [sic], you did work for them from July 6, 2009 to
March 1, 2011. Therefore, the employment income reported on the T4 from D &
H Partnership [sic] has to be included as employment income, according
to section 5 of the Income Tax Act.
[4]
The 2011 T4 slip (Statement of Remuneration
Paid) in respect of the unreported income was issued in the name of the
Appellant by D+H. The original T4 slip was not produced; rather, the Respondent
produced a reproduction (Tab 6 in Exhibit R‑1), which was based on information
contained in the original T4 slip. The reproduction does not show the
employee’s complete address; rather, only a postal code is shown. The postal code
shown on the reproduced T4 slip is J8X 1A7, which corresponds to an address in
Gatineau, Quebec, which will be discussed below.
B. Subpoena
[5]
In a letter faxed to the Court on October 29,
2014, the Appellant advised that he had been trying unsuccessfully to obtain
information from D+H about his 2011 T4 slip and the bank deposits in respect of
the employment income referred to in that T4 slip. He requested that the Court
prepare and serve a subpoena on D+H. The Court provided the Appellant with a
subpoena and advised him that it was his responsibility, not the Court’s, to
serve the subpoena.
[6]
Apparently, the Appellant encountered some
difficulty in obtaining from D+H the documents that he was seeking. Accordingly, on September 24,
2015 he filed a Notice of Motion for an Order to compel D+H to produce his
employment records and direct-deposit information. On October 8, 2015 counsel
for the Respondent sent a letter to the Court, stating that the appropriate way
for the Appellant to obtain the desired documents from D+H was by way of a
subpoena. On October 9, 2015 the Court issued an Order allowing the motion and
directing the Appellant to serve a subpoena on D+H to obtain the desired
documents. D+H subsequently provided documentation to the Appellant in a zip
file, which he could not open. Cognizant of the Appellant’s continued
difficulty, and desirous to ensure that a representative of D+H would be
available at the trial, which was heard in Halifax, counsel for the Respondent
served a subpoena on Anna Di Pardo, who is the payroll manager in the finance
department of D+H. As Ms. Di Pardo lives and works in or near Toronto,
arrangements were made for her to provide her testimony by videoconference.
[7]
As Ms. Di Pardo was testifying by
videoconference from Toronto, it was decided that she should be the first
witness at the hearing. As well, given that counsel for the Respondent had sent
the subpoena to Ms. Di Pardo, it was decided that the direct examination of Ms.
Di Pardo would be conducted by counsel for the Respondent.
C. Employment
Particulars
[8]
In her testimony, Ms. Di Pardo stated that D+H’s
business is cheque printing and technologies software. In 2009, D+H purchased
Resolve Corporation (“Resolve”), which carried
on a similar business. Although there was no detailed evidence in this regard,
it appears that sometime in or after 2009 Resolve became part of D+H. In 2009
and 2010 it was Resolve that issued T4 slips to the Appellant, whereas in
2011 it was D+H that issued a T4 slip to him. Depending on the context, some of
the references in these Reasons to D+H should be read as including a reference
to Resolve, as well.
[9]
Ms. Di Pardo stated that, in preparation for her
testimony, she reviewed the payroll file of an employee identified as Jonathan Hayfron-Benjamin. She had the paper version of
that file with her when she testified. Ms. Di Pardo explained that,
according to the documents in the payroll file, Jonathan Hayfron‑Benjamin
began to work for Resolve on July 6, 2009. During her testimony, Ms. Di Pardo
identified and explained the commencement-of-employment documents that are in
Mr. Hayfron-Benjamin’s payroll file. Those documents include:
a)
a letter of employment dated June 30, 2009,
which was written on the letterhead of Resolve and which was addressed to:
Jonathan
Hayfron‑Benjamin
##-#
Henri Gauthier, Apt #
Gatineau,
Quebec
J8X 1A7
(Tab
10 in Exhibit R-1);
b)
the first four pages of a five-page Employee
Agreement between Resolve and Jonathan Hayfron-Benjamin (Tab 11 in Exhibit
R-1);
c)
a set of rules dated July 6, 2009, pertaining to
cell phones, drinks, attendance and punctuality, and dress code (Tab 12 in
Exhibit R-1);
d)
a Security Card Agreement dated July 6, 2009
(Tab 13 in Exhibit R‑1);
e)
a Confidential Information and Property Rights
Agreement dated July 6, 2009 (Tab 14 in Exhibit R-1);
f)
an Employee Conduct Agreement dated July 6, 2009
(Tab 15 in Exhibit R‑1);
g)
a Swipe Card Agreement dated July 6, 2009
(Tab 16 in Exhibit R-1);
h)
a federal and a provincial Personal Tax Credits
Return (Tabs 17 and 18 in Exhibit R-1); and
i)
a direct-deposit banking document (the “Direct-Deposit Document”) (Tab 19 in Exhibit R-1).
(In these
Reasons, I will refer to the documents listed above as the “Employment Documents”).
D. Signatures
on Certain Employment Documents
[10]
All of the Employment Documents, other than the
Direct-Deposit Document, refer to an employee whose name is shown as “Jonathan Hayfron-Benjamin” and who, in some of those
documents, including the Direct-Deposit Document, is identified by employee file
number ######.
Many of the Employment Documents were signed by the employee; however, the
signatures on the various documents are not precisely the same. Although the
signatures appear as though they could have been written by the same
individual, they do not appear to be identical. The employee signatures on the
letter of employment (Tab 10 in Exhibit R-1), the set of rules (Tab 12 in
Exhibit R-1), the Security Card Agreement (Tab 13 in Exhibit R-1) and the
Confidential Information and Property Rights Agreement (Tab 14 in Exhibit R-1) each
appear to be the letters “JAHB” partially encircled by an oval-shaped line, generally
extending from the “B” and going up, above and around some or all of the four
letters. The curious feature of this version of the signatures is the inclusion
of the letter “A” in the signature, as that does not appear to be one of the
Appellant’s initials. The signatures on the Employee Conduct Agreement (Tab 15
in Exhibit R-1) and the Swipe Card Agreement (Tab 16 in Exhibit R-1) each appear
to be the letters “JHB” encircled by an oval-shaped line, in both cases
extending from the “B” and going up, above and around all three letters.
However, the “J”s do not appear to be the same. There was no handwriting
expert who testified at the trial; therefore, it is purely speculative as to
whether the documents were signed by the same person and whether the person who
signed those documents was actually the Appellant.
[11]
The Personal Tax Credits Returns (Tabs 17 and 18
in Exhibit R-1) are not signed. In fact, the prescribed forms for those two
Returns do not require them to be signed. The signature on the Direct-Deposit
Document will be discussed below.
E. Initials
on Employee Agreement
[12]
The Employee Agreement (the first four
pages of which are behind Tab 11 in Exhibit R-1) is a curiosity. It is a
standard-form contract, with page notations in the lower left-hand corner of
each page, indicating that a particular page is page 1 of 5, page 2 of 5,
and so on. The copy that was produced by Ms. Di Pardo contains only
pages 1 through 4. She indicated that page 5 (which was not produced) contains
the signatures of the parties. She had no definitive explanation as to why page
5 was not provided to the Court. In the lower right‑hand corner of pages
1 through 4 there is a short line above which the employee is to insert his or
her initials. The initials at the bottom of pages 2, 3 and 4 appear to be “JHB”. However, the style of the initials on those
three pages varies from page to page. In particular, the “J” on each of those three pages is distinctly
different from the “J” on the other two pages.
The initials at the bottom of page 1 appear to be a “J”
somewhat similar to (but not exactly the same as) the “J”
at the bottom of page 3, followed by a space, followed by the initials “AHB”. As noted above, no handwriting expert testified at the
trial; therefore, I am not in a position to draw any conclusions from the
initials. Nevertheless, it strikes me as peculiar that the initials on the four
pages seem to vary from page to page. However, nothing may turn on this
observation, as it is certainly permissible and not uncommon for the same
individual to write his or her initials in more than one way.
F. Personal Tax Credits Returns
[13]
Ms. Di Pardo identified a 2009 Personal Tax
Credits Return (Form TD1) (Tab 17 in Exhibit R-1) for an employee named
Jonathan Hayfron-Benjamin, whose address was shown as ##-# henri-Gauthier [sic]
and whose SIN was shown as ###-###-###.
A somewhat similar document, being a 2009 Ontario Personal Tax Credits Return
(Form TD1ON) (Tab 18 in Exhibit R-1), was also identified by Ms. Di Pardo.
The latter document also showed a birthdate of XXX ##, 19##. In cross-examination, the
Appellant admitted that the SIN shown on the two Personal Tax Credits Returns
is his SIN.
G. Direct-Deposit
Document
[14]
Ms. Di Pardo identified a document (defined
above as the “Direct-Deposit Document”) (Tab 19
in Exhibit R-1), which was entitled “Pre-Authorized Payment Service Notice of
Change of Bank Account”, and which was used to authorize the direct deposit of
employment income earned by the employee whose employee file number was ######, which, according to
Ms. Di Pardo, was the employee file number issued by D+H to
Jonathan Hayfron-Benjamin. Such income was to be deposited in a branch of
the Bank of Nova Scotia located near Carleton University in Ottawa, Ontario. The
Direct-Deposit Document authorized the payments to be deposited to account
number ############.
The Direct-Deposit Document, in one place, described the account holder’s name
as “Mr A Hayfron‑Benjamin” and, in another place, described the name of the
customer as “Albert Hayfron‑Benjamin”.
[15]
The address of the bank’s customer (i.e., Albert
Hayfron-Benjamin), as set out in handwriting on the Direct-Deposit Document, is
##-# henri-Gauthier,
which is the same address as that shown in the letter of employment and the two
Personal Tax Credits Returns. It is not clear whether the customer’s handwritten
postal code is J8X 1A7 or J8X 7A7. Nevertheless, it appears that, in the
Employment Documents, the same address was used for both Jonathan
Hayfron-Benjamin and Albert Hayfron-Benjamin.
[16]
The Direct-Deposit Document, in the space below
the address of the customer, contains a signature line, under which there is an
asterisk in front of the word “signature”. A
footnote designated by the asterisk states, “This
Authorization must be signed in accordance with the signing authority required
to operate the bank account.” This suggests that it is the customer of the bank
who is to sign the document. Some (but not all) of the elements of the
customer signature at the bottom of the Direct-Deposit Document appear to be slightly
similar to (but not the same as) the employee signature on the Employee Conduct
Agreement (Tab 15 in Exhibit R-1) and the Swipe Card Agreement (Tab 16 in
Exhibit R-1). However, it is not clear whether the first letter of the
signature on the Direct-Deposit Document is an “A”,
a “J” or some other letter. As there was no expert
handwriting evidence, I am not putting any weight on the signature on the
Direct-Deposit Document, other than to note that it is not clear who signed
this document.
[17]
In direct examination, Ms. Di Pardo stated that
D+H did not have a requirement for an employee to have his or her paycheque deposited
into a bank account in his or her own name. Rather, she stated that an employee
could direct that his or her paycheque be deposited into a bank account of his
or her choice. However, there was no suggestion by Ms. Di Pardo in her
testimony or by counsel for the Respondent in his direct examination of Ms. Di
Pardo or in his cross-examination of the Appellant that Jonathan Hayfron-Benjamin
directed that his remuneration be deposited into Albert Hayfron-Benjamin’s bank
account.
H. Signatures
on T1 Adjustment Requests
[18]
The Appellant used the CRA’s Telefile feature to
file his 2009, 2010 and 2011 income tax returns. He testified that each year he
encountered difficulty in filing his returns because he had multiple employers
and the feature did not allow him to enter multiple T4 slips. Therefore, for
each year, sometime after telefiling his return, he completed and sent to CRA a
T1 Adjustment Request (each, an “Adjustment Request”), in which he provided
particulars of the additional income and related deductions that had not been
included on the telefiled returns. Each Adjustment Request was dated and signed
by the Appellant. The signatures on the three Adjustment Requests (Tabs 1, 3
and 5 in Exhibit R-1) appear to be the initials “JHB” tightly encircled by an
oval-shaped line, which is generally not as elongated as the oval-shaped line
in the signatures on the Employment Documents discussed above. As well, the
signatures on the three Adjustment Requests have a few more lines back and
forth across the three initials than do the signatures on the Employment
Documents. As there was no handwriting evidence adduced at the hearing, I have
not drawn any conclusions from my consideration of the signatures on the
Adjustment Requests.
I. Identification
of Employee
[19]
When cross-examined, Ms. Di Pardo testified that
she had never met Jonathan Hayfron-Benjamin, nor had she seen any
photographs of the person by that name who was employed by D+H. Accordingly,
Ms. Di Pardo could not confirm that the Jonathan Hayfron‑Benjamin who is
the Appellant in this Appeal is the Jonathan Hayfron-Benjamin who was
employed by D+H. She also indicated that the only information that
she had in respect of this matter was what she could see in D+H’s
payroll records in respect of Jonathan Hayfron‑Benjamin.
J. Work
Hours and Location
[20]
Ms. Di Pardo was unable to provide specific
details as to the precise times on each day when Mr. Hayfron-Benjamin worked,
although she noted that his agreement required him to work 37.5 hours per week.
She said that some of D+H’s employees worked at premises under the control of D+H,
while others worked at their homes. She indicated that she did not think that
Mr. Hayfron‑Benjamin worked at his home. Ms. Di Pardo also explained
that security cards were provided to employees, including Mr. Hayfron-Benjamin,
so that they could access the building where D+H’s premises were located; this
factor may support the proposition that Mr. Hayfron‑Benjamin worked
at Resolve’s or D+H’s premises in Ottawa,
and not at his home. The Swipe Card Agreement (Tab 16 in Exhibit R-1) indicates
that Resolve had a time and attendance system, which was used to keep track of
the hours worked each week by employees, as part of Resolve’s automated payroll
procedures. The Swipe Card Agreement reminded employees to swipe in and out
each day to avoid errors in their compensation. This factor also supports the
proposition that Mr. Hayfron‑Benjamin worked at Resolve’s or D+H’s
premises in Ottawa, and not at his home.
K. Appellant’s
Residence
[21]
After Ms. Di Pardo had concluded her testimony, the
Appellant testified. During his testimony, the Appellant stated that he has
lived in Halifax since 2007 and that, from then until the date of the hearing,
he had held various full-time and part‑time jobs and had also attended a
post-secondary institution, all in Halifax or Dartmouth. He testified that he
has never lived at ##-# Henri Gauthier, Gatineau, Quebec and that he has not lived in
Ottawa since 2007, although he stated that he had lived in the Ottawa area
(including Orleans and Hull) for a number of years before moving to Halifax in
2007.
III. analysis
A. Appellant’s
Explanation
[22]
The Appellant was adamant that he has never
worked for Resolve or for D+H.
[23]
The Appellant could not provide a specific
explanation as to how D+H came to issue a T4 slip to him for 2011, other than
to suggest that he was the victim of identity theft. The Appellant stated that
in 2003 he lost his SIN card. He reported the
loss to Service Canada and to the RCMP. After an investigation, Service Canada
informed the Appellant that it had not found any evidence of his SIN having
been used fraudulently. To the best of the Appellant’s knowledge, the RCMP did
not lay charges against anyone concerning any misuse of his SIN.
[24]
I encountered some difficulty in grappling with
this issue, as the same position had been taken by the Appellant in a previous
proceeding;
however, in that proceeding Boyle J found the Appellant not to be a credible
witness. Furthermore, although it appears that the Appellant’s SIN may have
been used by someone other than him to obtain employment, he has not gone back
to Service Canada to ask it to look into this matter further.
B. Signatures
[25]
During the direct examination and the
cross-examination of the Appellant, neither counsel asked him if he could identify
the Employment Documents or if he had signed any of them. In response to a
question by me, after he had been examined by both counsel, the Appellant
stated that the signature at the bottom of the second page of the employment
letter was not his signature. In retrospect, perhaps I should have taken the
Appellant through the remaining Employment Documents to ask him if he had signed
or initialed those documents. However, not wanting to intervene excessively in
the questioning of the Appellant,
I refrained from doing so.
[26]
I then referred the Appellant to the Adjustment
Request for 2009 (Tab 1 in Exhibit R-1). The Appellant confirmed that he had filled
out that form and that the signature at the bottom of the form is his
signature. I did not ask him about the signatures on the Adjustment Requests
for 2010 and 2011.
C. Relationship
Between Jonathan and Albert
[27]
It was near the conclusion of the hearing before
I learned that Jonathan Hayfron-Benjamin and Albert Hayfron-Benjamin are
brothers. It would have been helpful to me if counsel, either in direct
examination or cross‑examination, had asked the Appellant whether he (i.e.,
the Appellant) had any knowledge of Albert Hayfron-Benjamin, who is the
customer named in the Direct-Deposit Document.
When I put that question to the Appellant, he merely stated that he knows Albert
Hayfron-Benjamin. When I asked the Appellant who Albert is, the Appellant indicated
only that Albert is a relative. It then required two more questions from me
before I was finally told that Albert is the Appellant’s brother. It was
disappointing that this information came out only after several questions from
me, and that it was not provided by the Appellant during his
examination-in-chief. I was left with the impression that perhaps I was not
being told the complete story.
[28]
After I had asked a few questions of the
Appellant, I provided counsel for the Appellant and counsel for the Respondent an
opportunity to ask additional questions of the Appellant, to the extent that
such questions pertained to answers given by the Appellant in response to my
questions. Counsel for the Respondent asked the Appellant whether his brother, Albert,
was legally entitled to work in Canada in 2011. I found the Appellant’s answers
to be somewhat evasive, although that may have been merely because the
Appellant did not know the answer to the question, which is what he ultimately
stated. In response to a follow-up question by counsel for the Respondent, the
Appellant stated that he did not provide his SIN to Albert for purposes of
employment.
D. No
Pleading or Oral Evidence Concerning Redirection of Remuneration
[29]
During his testimony, the Appellant was not
asked, in either direct examination or cross-examination, whether he had
authorized any remuneration payable by Resolve or D+H to be deposited into the
account at the Bank of Nova Scotia referenced in the Direct-Deposit Document.
It would have been helpful to me if such a question had been put to the
Appellant by counsel.
However, perhaps that is a non-issue, given that, in paragraph 12 of the Reply,
the Deputy Attorney General of Canada, on behalf of the Respondent, stated that
he is relying on subsections 5(1) and 163(1) of the ITA. Hence, the
Deputy Attorney General of Canada is not relying on subsection 56(2) of the ITA.
As well, as stated in subparagraphs 10(f), (g) and (h) of the Reply, the Minister
assumed the following facts:
(f) The Appellant was paid by D+H on a bi-weekly basis, via
direct bank deposit;
(g) During the 2011 tax year, the Appellant received
employment income of $5,759 from D+H;
(h) When
filing his T1 return and making his T1 adjustment request for the 2011 tax
year, the Appellant failed to include the employment income in the amount of
$5,759 received from D+H.
Notably, the Minister
assumed that the Appellant was paid by D+H and that the Appellant received
employment income in the amount of $5,759 from D+H. The Minister did not assume
that the Appellant directed D+H to pay such employment income to Albert
Hayfron-Benjamin, nor did the Minister assume that D+H paid the employment
income in the amount of $5,759 to Albert Hayfron-Benjamin with the concurrence
of the Appellant. Thus, I do not think that the Respondent has laid the groundwork
for the application of subsection 56(2) of the ITA.
Furthermore, the
Appellant’s name does not appear on the Direct-Deposit Document. The only thing
that might possibly connect the Direct-Deposit Document to the Appellant is the
employee number assigned by Resolve to the individual who was employed under
the name of Jonathan Hayfron-Benjamin. As indicated above, the Direct-Deposit
Document, on its face, appears to require the signature of the bank’s customer
(presumably the account holder), and not the signature of the employee.
Therefore, there is no indication that Jonathan Hayfron-Benjamin signed this
document. The signature may well be that of Albert Hayfron-Benjamin.
E. Credibility
[30]
I have reservations about relying on the
Appellant’s testimony, given that he was not found to be a credible witness in
his previous appearance in this Court,
and given that I found some of his answers in the hearing before me to have
been less than forthright and others to have been evasive.
[31]
I have greater confidence in relying on the
documentary evidence that was provided. Some of the documents, as summarized
below, indicate that the Appellant has resided in the Halifax-Dartmouth region
since 2007:
a)
A two-page document, which is behind Tab 6 in
Exhibit A-1, and which contains a series of seven small rectangular boxes,
numbered page 3 of 9 through page 9 of 9, each of which is entitled “Individual
Identification Mailing Address,” and all of which appear to be part of a
computerized historical record of the Appellant’s mailing addresses, shows that
the Appellant had various mailing addresses in Ontario from April 15, 2004 to
June 11, 2007 and that he had several mailing addresses in Halifax or Dartmouth
from June 12, 2007 to October 23, 2009, which is the most recent date shown on
the document. The document behind Tab 6 in Exhibit A-1 does not include pages 1
and 2, which presumably would have covered periods after October 23, 2009. This
document does not show the Appellant’s mailing address in 2011, let alone where
he was residing in 2011, but it is consistent with his testimony that he moved
from the Ottawa area to Halifax in 2007.
b)
A letter dated May 27, 2013 (behind Tab 1 in
Exhibit A-1) from Melanie Neville, a Human Resources Associate with Aditya
Birla Minacs (“Minacs”) in Dartmouth, Nova
Scotia, states that the Appellant was then a full-time employee and that he had
been employed with that organization since August 4, 2009. The letter also
provides an address for the Appellant, which is the same as the most recent
address shown on the Individual Identification Mailing Address document behind
Tab 6 in Exhibit A-1. Ms. Neville did not appear at the hearing to confirm the
contents of her letter. I acknowledge that the contents of her letter
constitute hearsay evidence; however, as this hearing was conducted pursuant to
the Informal Procedure, this Court is not bound by any legal or technical rules
of evidence in conducting a hearing.
Furthermore, the fact that the same address is shown for the Appellant in Ms.
Neville’s letter and in the most recent Individual Identification Mailing
Address document provides an element of corroboration and reliability.
c)
A letter dated July 25, 2012 (Tab 2 in Exhibit
A-1) from Debra Shea, Administrative Assistant at the Institute of Technology
Campus of Nova Scotia Community College, states that the Appellant graduated
with a diploma from that institution on July 18, 2012. This letter too is
hearsay; however, the comments made above in respect of Ms. Neville’s
letter, in the context of subsection 18.15(3) of the TCCA, are also applicable
here.
d)
The CRA reproductions (Tab 2 in Exhibit R-1) of
the 2009 T4 slips (Statements of Remuneration Paid) issued to the Appellant by
Teletech Canada Inc. (“Teletech”), Convergys New
Brunswick, Inc. (“Convergys”) and Minacs and the
2009 T4A slip (Statement of Pension, Retirement, Annuity, and Other Income)
issued to the Appellant by Compagnie d’Assurance Standard Life du Canada all
show the Appellant’s postal code as being B3K 2Z5, which is the postal code
corresponding to his address in Halifax. The CRA reproduction of the 2009 T4
slip issued in the name of Jonathan Hayfron-Benjamin by Resolve shows a
postal code of J8X 1A7, which is the postal code for the address in
Gatineau which appears on the letter of employment and on the two Personal Tax
Credits Returns, and which may be the postal code for the address of Albert Hayfron-Benjamin,
as set out on the Direct-Deposit Document. Curiously, the CRA reproductions of
the 2009 T4 slip and the 2009 T4A slip issued in the name of
Jonathan Hayfron‑Benjamin by J2 Global Canada Inc. (“J2”) show a postal code of J8X 1A8, which is similar
to, but not the same as, the postal code of the above-mentioned address in
Gatineau. The T4 slips issued by TeleTech, Convergys and Minacs show the
province of employment as being Nova Scotia, whereas the T4 slips issued by
Resolve and J2 show the province of employment as being Ontario.
e)
The CRA reproductions (Tab 4 in Exhibit R-1) of
the 2010 T4 slips issued to the Appellant by Convergys and Minacs show the
Appellant’s postal code as being B3K 2Z5, which is the postal code
corresponding to his address in Halifax. The CRA reproductions of the 2010 T4
slips issued to the Appellant by the Government of Canada show a postal code of
B3K 5X5, which is an unidentified postal code for an address that appears to be
in or near Halifax. The T4 slips issued by Convergys and Minacs show the
province of employment as being Nova Scotia. For 2010 two T4 slips were issued
to the Appellant by the Government of Canada; one T4 slip shows the province of
employment as being Nova Scotia and the other shows the province of employment
as being Ontario, notwithstanding that both T4 slips show the postal code as
being B3K 5X5, which, as mentioned above, appears to relate to an address in or
near Halifax.
As well, Resolve issued a T4 slip in the name of Jonathan Hayfron-Benjamin for
2010. CRA’s reproduction of that T4 slip shows a postal code of J8X 1A7, which seems
to correspond to Albert Hayfron-Benjamin’s address in Gatineau. The Resolve T4
slip shows the province of employment as being Ontario.
f)
The CRA’s reproduction (Tab 6 in Exhibit R-1) of
the T4 slip issued in the name of Jonathan Hayfron-Benjamin by D+H for
2011 shows the province of employment as being Ontario and the postal code
of the employee as being J8X 1A7, which seems to correspond to Albert Hayfron-Benjamin’s
address in Gatineau, Quebec.
g)
The CRA’s reproduction of the Appellant’s 2010
Income Tax Return Information-Regular (Tab 8 in Exhibit A-1) shows the
Appellant’s address as being 5-2515 Brunswick Street, Halifax, Nova Scotia, B3K
2Z5. This return was assessed on May 2, 2011, so the return was presumably
filed sometime between January 1, 2011 and May 1, 2011.
My purpose in
referring to the documents mentioned above is to show that, with the
exception of the T4 slips issued by Resolve, D+H and J2, as well as one of
the two T4 slips issued by the Government of Canada for 2010, the above-mentioned
documents indicate that the Appellant had an address in or near Halifax
from June 12, 2007 to May 2, 2011 and a place of employment in Nova Scotia
during the same approximate period of time. This is significant because Ms. Di
Pardo stated that, based on Jonathan Hayfron-Benjamin’s letter of employment,
he was not a work-from-home employee. It would follow that the individual
employed under that name was working at D+H’s premises in Ottawa, and not from
his home.
[32]
I found the testimony of Ms. Di Pardo to be
forthright, credible and reliable. Of particular significance to this Appeal
was her statement that D+H paid the employment remuneration in question into
the bank account of Albert Hayfron-Benjamin, as that was the account referenced
in the Direct-Deposit Document.
F. Resolution
[33]
Based on the evidence of Ms. Di Pardo
and the Direct-Deposit Document, it is clear that the remuneration paid by D+H for
2011 was deposited into a bank account belonging to Albert Hayfron-Benjamin and
not to the Appellant. Furthermore, there is no allegation, pleading or conclusive
evidence that Jonathan Hayfron-Benjamin directed D+H to pay remuneration ostensibly
earned by him to Albert Hayfron-Benjamin.
[34]
As I reviewed the signatures at the bottom of
each of the signed Employment Documents, it seems to my untrained non-expert
eye that the signatures are not all the same. As well, comparing the signatures
on the Employment Documents with the signatures on the Adjustment Requests, it
seems, again to my untrained non-expert eye, that some of the signatures on the
Employment Documents have some similarity to, but are not the same as, the
signatures on the Adjustment Requests. This suggests to me that it is plausible
that someone who was misusing the Appellant’s SIN may have forged his signature
on the Employment Documents. It would have been helpful to me if there had been
expert handwriting evidence in this regard. Given that there was no such
evidence and given that it is not my place to make a finding of forgery in the
absence of such evidence, I do not base my decision on the apparent discrepancies
in the signatures.
[35]
Having considered the oral evidence,
particularly that of Ms. Di Pardo, and having reviewed the documentary
evidence, particularly the Direct-Deposit Document, I am satisfied on a balance
of probabilities that the Appellant did not receive the remuneration in the
amount of $5,759.66 paid by D+H in 2011. As the concept of “receipt by the employee to be taxed” is a fundamental principle of the taxation of
employment income,
and as there is no allegation, pleading, assumption or conclusive evidence that the Appellant directed
D+H to pay any remuneration to Albert Hayfron-Benjamin or that the Appellant
concurred with such a payment,
I have concluded that the remuneration in the amount of $5,759.66 is not to be
included in computing the Appellant’s income for his 2011 taxation year.
[36]
In reviewing the T4 slip (Tab 6 in Exhibit R-1)
issued by D+H in the name of Jonathan Hayfron-Benjamin for 2011, I note that
income tax in the amount of $619.66, employee’s Canada Pension Plan contributions
in the amount of $245.11 and employee’s Employment Insurance premiums in the
amount of $102.39 were withheld by D+H from the remuneration. Accordingly,
notwithstanding the conclusion that I have reached, I am satisfied that income
tax and other source deductions have been withheld from the remuneration in
question and presumably remitted to the CRA on behalf of the Receiver General
for Canada.
[37]
By reason of subsection 163(3) of the ITA,
the burden of establishing the facts justifying the assessment of the penalty
in the amount of $576.00 assessed under subsection 163(1) of the ITA is
on the Minister. As I have found that the Appellant did not receive the
remuneration in the amount of $5,759.66 paid by D+H in 2011, it follows that he
did not fail to report that amount on his income tax return for 2011. Thus, the
Minister has not established the facts necessary to justify the assessment of
the penalty.
IV. conclusion
[38]
For the reasons set out above, this Appeal is
allowed and the Reassessment is referred back to the Minister for
reconsideration and reassessment on the basis that the remuneration in the
amount of $5,759.66 paid by D+H in respect of the period January 1, 2011 to
March 1, 2011 is not to be included in computing the Appellant’s income, and
the penalty in the amount of $576.00 under subsection 163(1) of the ITA
is to be cancelled.
[39]
Given that I found the Appellant to have been less
than forthright in some of his answers and to have been evasive in other
answers, I am not inclined to award costs in respect of this matter.
Signed at Ottawa, Canada,
this 10th day of June 2016.
“Don R. Sommerfeldt”
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