Citation: 2015 TCC 67
Date:
20150318
Dockets: 2008-1525(EI)
2008-1526(EI)
BETWEEN:
DAVE
VAILLANCOURT,
9158-3658
QUÉBEC INC.,
Appellants,
and
THE
MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Bédard, D.J.
[1]
These are appeals heard on
common evidence.
[2]
On December 31, 2007,
9158-3658 Québec inc. (the appellant company or the payer) asked the respondent
to decide whether Dave and Roger Vaillancourt (the workers) had held insurable
employment from December 26, 2005, to June 2, 2006, and also, in the
case of Roger Vaillancourt, from July 2, 2006 to April 14, 2007,
while they were employed by it. In letters dated February 18, 2008, the Minister of National
Revenue (the Minister) informed the appellant company and the workers of his
decisions that the appellants did not hold insurable employment. The appellant company is appealing from a decision
regarding Roger Vaillancourt and Dave Vaillancourt, and Dave
Vaillancourt is appealing from the decision regarding him.
[3]
In making his decisions, the
Minister determined that the workers did not hold employment under a contract
of service relying on the following assumptions of fact:
[Translation]
(a) The payer was incorporated on July 5, 2005;
(b) At the time of incorporation, the payer’s
shareholders were
- Fernand Lebeau, majority shareholder, and
- Isabelle Gervais, 2nd shareholder;
(c) On May 1, 2006, Fernand Lebeau handed in
his resignation as director, president and secretary of the payer;
(d) On May 1, 2006, Isabelle Gervais became the
sole shareholder of the payer;
(e) Based on the registraire des entreprises,
the payer’s business was in the sale and transformation of raw lumber;
(f) According to the version given to the
decision-making officer, the payer purchased lumber from the United States and
resold it;
(g) According to the version of the appellant and
Isabelle Gervais, the payer specialized in purchasing, selling and installing
hardwood flooring;
(h) The payer did not manufacture or transform
lumber;
(i) The payer’s place of business was an office
at 686 Gagné Road in Saint-Justin;
(j) All of the payer’s documents were, however,
at Isabelle Gervais’s residence in Trois-Rivières;
(k) In his claim for benefits dated June 16,
2006, the appellant mentioned that he was not related to the payer’s
shareholders, while Isabelle Gervais has been his common‑law spouse for
several years;
(l) Since January 10, 2001, the appellant had operated
Les Équipements L.V. inc., with his father Roger as an equal shareholder;
(m) Les Équipements L.V. inc. manufactured wood
panels for furniture manufacturing industries under the name Boiserie
Vaillancourt;
(n) Les Équipements L.V. inc. declared bankruptcy
on April 18, 2006;
(o) During the periods at issue, the
appellant claims that he sold wood for the payer;
(p) The appellant claims that he received his
instructions from the payer’s clients by telephone or by internet;
(q) The appellant had no work schedule to
follow; he did not remember his hours of work;
(r) The payer had no telephone number at its
place of business, but the appellant had a cell phone at which he could be
reached at all times.
(s) The appellant could give prices by
telephone to clients or he could go to the client to make a bid.
(t) The appellant did not have to be directed
in his work because he had experience;
(u) The appellant could not specify the salary
that he earned from working for the payer;
(v) A document from the payer (calendar for
2006) indicates that the appellant allegedly received a net salary of $565.69
from the payer from January 2006 to June 2, 2006;
(w) Documents confirm that the appellant worked
full time, 40 hours per week, for Les Équipements L.V. inc. between October
2005 and the end of March 2006 (that is, within the periods at issue);
(x) A document from Les Équipements L.V. inc.
shows that the appellant received a gross salary of $1,000 per week for 40
hours of work from October 2005 to April 1, 2006;
(y) No documents were submitted by the payer or
the appellant that could confirm the appellant’s presence at work;
(z) Neither the appellant nor the payer could
produce the paycheques allegedly given to the appellant;
(aa) On June 14, 2006, Fernand Lebeau signed the
Record of Employment issued by the payer for the appellant, for the period from
December 26, 2005 to June 2, 2006, while he had resigned as director,
president and secretary of the payer and he was no longer a shareholder of the
payer since May 1, 2006;
(bb) The Record of Employment issued by the
payer for the appellant does not reflect reality with regard to the period of
work, to the hours actually worked and to the remuneration allegedly paid to
the appellant;
(cc) On October 19, 2007, the Nouvelliste newspaper
published an article uncovering the payer’s real activities taking place inside
the office located at 686 Gagné Road in Saint-Justin;
(dd) The payer’s activities in that office were
illegal, and when the police searched the premises, the appellant was inside;
(ee) The relationship between the appellant and
the payer was not an employee‑employer relationship;
(ff) There was an arrangement between the
parties whose only purpose was to enable the appellant to become eligible for
employment insurance benefits.
[4]
Only Roger Vaillancourt
testified in support of the appellants’ argument.
[5]
It should be stated right
away that Roger Vaillancourt discontinued his appeal before the evidence was
closed after admitting that he had not held insurable employment within the
meaning of the Employment Insurance Act (the Act). It should also be mentioned that the appellant
company discontinued its appeal in respect of Roger Vaillancourt at the same
time. Roger
Vaillancourt testified that he was the actual shareholder, officer and director
of the appellant company during all of the periods at issue. Roger Vaillancourt also explained that
Fernand Lebeau and Isabelle Gervais were only nominees, which enabled him
to conceal from third parties that he was the real owner of the appellant company’s
shares. In sum, the evidence showed
that this entire pretence had been created by Roger Vaillancourt in order to avoid,
among other things, recovery actions by the bankers of Les Équipements L.V.
inc. (L.V.), whose loans he had guaranteed.
[6]
Assessing Roger Vaillancourt’s
credibility played a major role in my decision since he was the only witness in
support of the appellants’ argument and given the almost non-existent
documentary and objective evidence with respect to Dave Vaillancourt’s
real prestation of work. I
must say that I attributed little probative value to Roger Vaillancourt’s
testimony for the following reasons:
(i)
How do I believe a person
who admitted that he had created with others a pretence in order to avoid,
among other things, recovery actions by the bankers of L.V. whose loans he had
guaranteed?
(ii)
The fact that Roger
Vaillancourt and his son Dave were convicted by the Court of Québec of having
committed criminal acts (see Exhibit I‑6) on the company appellant’s
premises only confirmed my doubts regarding Roger Vaillancourt’s probity and
credibility.
[7]
Roger Vaillancourt’s
testimony regarding his son Dave’s prestation of work was at the very least
evasive, imprecise, ambiguous, equivocal and laboured. His testimony told us nothing about the exact nature of his
son Dave’s supposed prestation of work. It was
certainly not with that kind of testimony that Roger Vaillancourt could
hope to satisfy me that his son Dave had really worked 40 hours per week
from October 2005 to April 1, 2006. I
would add that his testimony seems even more implausible to me since the
evidence showed that Dave Vaillancourt also worked full time for L.V.
during the period at issue. I note that the
courts are not bound to believe witnesses, even in the absence of evidence to
the contrary. Indeed, their testimony may be implausible as a result of exposed
circumstances or based on common sense.
[8]
In this case, Dave
Vaillancourt could have testified in support of his argument. Other witnesses, for example, employees,
suppliers or clients of the appellant company, could have corroborated Roger
Vaillancourt’s testimony regarding his son Dave’s prestation of work. This
was not done. I conclude that that evidence would not
have been favourable to Dave Vaillancourt.
[9]
My review of the evidence
leads me to find that it is more likely than not that Dave Vaillancourt
did not provide the prestation of work he alleges, and thus that the parties
had organized a scheme with the sole purpose of enabling Dave Vaillancourt
to become eligible for employment insurance benefits.
[10]
For these reasons, the appeals are dismissed.
Signed at Ottawa, Canada,
this 18th day of March 2015.
“Paul Bédard”
Translation certified true
On this 19th day of May 2015
Margarita
Gorbounova, Translator
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