A-688-96
QUÉBEC, QUEBEC, THIS 30th DAY OF APRIL 1997
CORAM: THE HONOURABLE MR. JUSTICE HUGESSEN
THE HONOURABLE MR. JUSTICE DÉCARY
THE HONOURABLE DEPUTY JUSTICE CHEVALIER
BETWEEN: JOCELYNE JOMPHE,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
J U D G M E N T
The application is dismissed.
James K. Hugessen
J.A.
Certified true translation
C. Delon, LL.L.
A-688-96
CORAM: THE HONOURABLE MR. JUSTICE HUGESSEN
THE HONOURABLE MR. JUSTICE DÉCARY
THE HONOURABLE DEPUTY JUSTICE CHEVALIER
BETWEEN: JOCELYNE JOMPHE,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
A-689-96
BETWEEN: 2856-4706 QUÉBEC INC.,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
Hearing held at Québec, Quebec, on Wednesday, April 30, 1997.
Judgment delivered from the bench on April 30, 1997.
REASONS FOR JUDGMENT OF THE COURT BY: HUGESSEN J.A.
A-688-96
CORAM: THE HONOURABLE MR. JUSTICE HUGESSEN
THE HONOURABLE MR. JUSTICE DÉCARY
THE HONOURABLE DEPUTY JUSTICE CHEVALIER
BETWEEN: JOCELYNE JOMPHE,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
A-689-96
BETWEEN: 2856-4706 QUÉBEC INC.,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Québec
on April 30, 1997)
HUGESSEN J.A.
The applicant Jocelyne Jomphe applied to the Minister for a determination that her employment with the other applicant, 2856-4706 Québec Inc., a company controlled by her husband, was nonetheless insurable under paragraph 3(2)(c) of the Act:
| (c) subject to paragraph (d), employment where the employer and employee are not dealing with each other at arm's length and, for the purposes of this paragraph, |
|
| (i) the question of whether persons are not dealing with each other at arm's length shall be determined in accordance with the provisions of the Income Tax Act, and |
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| (ii) where the employer is, within the meaning of that Act, related to the employee, they shall be deemed to deal with each other at arm's length if the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm's length; ... |
|
[Respondent's record, p. 65]
This provision contains an exception to the rule: the person seeking to have the exception applied to him or her has to persuade the Minister that his or her assertions are correct. If the person is not satisfied with the Minister's decision, he or she may appeal to the Tax Court of Canada.
In both of these cases, the Minister stated that he was not satisfied and the Tax Court of Canada affirmed his decision. While we have some doubt as to the soundness of the reasons stated by the judge, nonetheless he had no evidence before him from which he could have concluded that the Minister exercised his discretion improperly, specifically in determining that the salary paid to the employee was not reasonable. In fact, Ms. Jomphe's husband, the only shareholder of the company, flatly refused even to try to justify the salary paid; moreover, the applicant cannot rely, as evidence that the salary was reasonable, on the judgment in another case involving another employer and another employee.
The applications for judicial review will be dismissed.
James K. Hugessen
J.A.
Certified true translation
C. Delon, LL.L.
Federal Court of Canada
Court file No. A-688-96
between:
JOCELYNE JOMPHE,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT OF THE COURT
Federal Court of Canada
Court file No. A-689-96
between:
2856-4706 QUÉBEC INC.,
Applicant,
- AND -
MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT OF THE COURT
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO: A-688-96
STYLE OF CAUSE: JOCELYNE JOMPHE,
Applicant,
- and -
MINISTER OF NATIONAL REVENUE,
Respondent.
PLACE OF HEARING: Québec
REASONS FOR JUDGMENT
OF THE COURT BY: The Honourable Mr. Justice Hugessen
The Honourable Mr. Justice Décary
The Honourable Deputy Justice Chevalier
DATED: April 30, 1997
APPEARANCES:
Pierre St-Onge For the applicant
Paul Plourde For the respondent
SOLICITORS OF RECORD:
ST-ONGE & ROY
440 Avenue Bruchu
Suite 201
Sept-Îles, Quebec
G4R 2W8 For the applicant
DEPARTMENT OF JUSTICE CANADA
222 Queen St.
Room 1118
Ottawa, Ontario
K1A 0H8 For the respondent
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO: A-689-96
STYLE OF CAUSE: 2856-4706 QUÉBEC INC.,
Applicant,
- and -
MINISTER OF NATIONAL REVENUE,
Respondent.
PLACE OF HEARING: Québec
REASONS FOR JUDGMENT
OF THE COURT BY: The Honourable Mr. Justice Hugessen
The Honourable Mr. Justice Décary
The Honourable Deputy Justice Chevalier
DATED: April 30, 1997
APPEARANCES:
Pierre St-Onge For the applicant
Paul Plourde For the respondent
SOLICITORS OF RECORD:
ST-ONGE & ROY
440 Avenue Bruchu
Suite 201
Sept-Îles, Quebec
G4R 2W8 For the applicant
DEPARTMENT OF JUSTICE CANADA
222 Queen St.
Room 1118
Ottawa, Ontario
K1A 0H8 For the respondent
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