Citation: 2009 TCC 520
Date: 20091016
Docket: 2007-4985(EI)
2007-4986(CPP)
BETWEEN:
RIMON GENDI,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Paris J.
[1] The Appellant is
appealing from decisions of the Minister of National Revenue that the Appellant
was not employed by ABC Profiles Inc. (“ABC”) in insurable or pensionable
employment within the meaning of paragraph 5(1)(a) of the Employment
Insurance Act and subsection 6(1) of the Canada Pension Plan during
the period September 1, 2006 to February 15, 2007.
[2] The assumptions
relied upon by the Minister in making the decisions are set out in paragraph 5
of the Reply to the Notice of Appeal in each case. Those assumptions are
identical in both cases and read as follows:
a) ABC Profiles Inc. incorporated on or about January 16,
2003;
b) during the Period ABC Profiles
manufactured and distributed specialized steel roofing and siding materials;
c) ABC Profiles purchased a software
program, Simply Accounting, to computerize its business records;
d) the Appellant provides computer
training under the businesses name R.W.C.
Computer School;
e) the Appellant was contracted by ABC
Profiles to provide training in respect of computer accounting software that
ABC Profiles purchased;
f) the Appellant invoiced ABC Profiles on
or about January 27, 2006 for 15 hours of training for a total amount of $450;
g) the Appellant provided computer
training to Billy DeVries at the offices of ABC Profiles from on or about January
2006 to May 2006;
h) the Appellant in providing the computer
training to ABC Profiles, provided a computer chair, a 5-foot round conference
table, a back-up flash hard drive, a cordless telephone and miscellaneous
office supplies;
i) during the Period, ABC Profiles did
not enter into a contract of employment with the Appellant;
j) during the Period, ABC Profiles did
not instruct, direct or supervise the Appellant;
k) the Appellant received $4,500 from ABC
Profiles in or about December 2006 as payment for a sale of roofing material
made to a customer of ABC Profiles;
1) the Appellant received $1,400 from ABC
Profiles as reimbursement for supplies the Appellant purchased for ABC
Profiles;
m) the Appellant incurred vehicle expenses
during the Period he provided training to ABC Profiles;
n) during the Period, the Appellant
incurred vehicle expenses for which he was not reimbursed by ABC Profiles;
o) ABC Profiles did not withhold any deductions
on account of employment insurance or Canada pension plan or taxes from the payments made to the Appellant;
p) during the Period, the Appellant did
not perform duties for ABC Profiles to earn a salary or wages;
q) the Appellant did not file a complaint for
unpaid wages with the British Columbia Labour Standards Bureau;
r) the Appellant ordered a Record of Employment
(“ROE”) from Human Resources Skills Development Canada under ABC Profiles’ business account number;
s) the Appellant completed the ROE for the
Period to indicate that he had insurance hours of 1140 and insurable earnings
of $17,500;
t) the ROE was presented by the Appellant
to Elly DeVries for signature; and
u) although Elly De Vries’s signature is
on the ROE, Elly DeVries signed the ROE in error.
[3] The issue in these
appeals centers around the assumptions contained in subparagraphs 5(i) and 5(p)
above, which set out that the Appellant did not enter into a contract of
employment with ABC and did not perform any duties for ABC to earn a salary or
wages. The Appellant maintains that he was hired as a fulltime employee of ABC
on August 1, 2006 and was employed by the company until February 15, 2007.
He says that he was paid a salary of $4,500 per month regardless of the hours
worked.
[4] The onus is on the Appellant
to show that the facts assumed by the Minister in coming to the decisions in the
appeals were incorrect, and in particular, those in subparagraphs 5(i) and (p)
of the Replies, to which I have referred above.
[5] It is not disputed by the
parties that the Appellant provided training to Ms. DeVries in early 2006
on how to use certain accounting software, and that the Appellant did so as an
independent contractor. What is disputed is what took place after that
training was completed. The Appellant maintains that he was hired as a
full-time employee by ABC to perform a number of tasks, including accounting
and office work, pickups and deliveries, meeting with creditors, clients,
suppliers and government agencies, working on ABC’s production line and
monitoring roofers installing ABC’s roofing materials at job sites.
[6] On the evidence
that was presented at the hearing, I am not satisfied that the Appellant has
shown that he was hired as and worked as an employee of ABC, or that the record
of employment he relied on was accurate and intentionally signed by Ms.
DeVries.
[7] A number of
inconsistencies and implausibilities in the Appellant’s testimony and in the
documents he has presented at various points to Human Resources Development
Canada and the Canada Revenue Agency lead me to find that the Appellant was not
a credible witness. Firstly, the Appellant’s evidence that his rate of pay was
$4,500 per month contradicts his statement to the Human Resources Development
Canada investigator in the file, Ms. Banwait, that his salary at ABC was
between $3,500 and $4,000 per month. It also contradicted the information he
provided on his application for employment insurance benefits that his salary
was $ 3,500 per month. He also admitted that he had filled out part of the
record of employment, including the amount of his insurable earnings, which he
showed as $17,500. Ms. Banwait testified that the Appellant told her that the
$17,500 amount was based on a salary of $ 3,500 per month. On the other hand,
in a claim for unpaid wages from ABC which the Appellant filed with the British
Columbia Employment Standards Branch, he stated that his monthly salary was
$4,500.
[8] The Appellant
relied on certain documents purporting to be payroll records kept by ABC to
show he was paid a salary. However, these were not authenticated by anyone from
ABC. Neither Mr. nor Ms. DeVries testified at the hearing. Apparently, they
have moved back to Holland. The purported payroll records appear to show that salary was deposited
to the Appellant’s bank account, but the Appellant did not bring any of his own
bank records to substantiate this. The Appellant also failed to produce any
records to support his statements that he received additional payments in cash
and by means of payments made by ABC to his credit card. Furthermore, the
figures shown on the purported payroll records do not correspond with any of the
amounts the Appellant said he was paid.
[9] To further confuse
matters, the purported payroll records for ABC show wages and salaries of
$2,433.60 per month paid to the Appellant for each of three months, and
$3,071.12 for one month, as well as a payment of salary to Mr. Devries of $9,540.00
while the income tax return filed by ABC for the year ended December 31, 2006
shows the company paid total salaries of only $8,437 in 2006.
[10] The Appellant did
produce two cancelled cheques from ABC, one for $4,500, dated December 18, 2006
and a second, dated March 8, 2007 for $1,400.
[11] A handwritten note on
the December 18 cheque stated it was for payroll. However, another of the
purported payroll records of ABC referred to a paycheque for $3,345.12 being issued
to the Appellant on December 15, 2006 and showing gross pay of $3,500. The Appellant
said that Ms. DeVries probably only recorded part of the $4,500 he was paid in
order to avoid paying tax on all of it. This explanation makes little sense, as
it is the Appellant who would have had to pay income tax on the payment rather
than ABC. I also note that the same purported payroll cheque records show that the
Appellant’s year-to-date gross pay up to December 15, 2006 was $3,500. In any
event, as I have already noted, it is not clear who prepared these records
[12] The March 8 cheque bore
the notation “last payment to Rimon Gendi Visa and Mastercard.” The Appellant
said that this was a reimbursement of amounts he had charged to his credit
cards on behalf of ABC.
[13] In the complaint he
filed with the Employment Standards Branch, the Appellant indicated that ABC
owed him wages of $35,254.99. This amount is greater than the total that he
would have if, as he alleges, his salary was $4,500 per month and he worked
from August 1, 2006 to February 15, 2007. This would also tend to suggest that
the Appellant, for the purposes of the complaint at least, was taking the
position that he was not paid at all by ABC.
[14] The information
provided by the Appellant regarding the date of his alleged employment was also
inconsistent. At the hearing, he said that he became a fulltime employee of ABC
on August 1, 2006. This was what he told Ms. Banwait as well. However, on
his application for employment insurance benefits, he said that his first day
worked was September 1, 2006. At the hearing he stated that Ms. DeVries put on
the record of employment that his first day worked was September 1, 2006 so
that the company would not have to pay employee source deductions for the
Appellant for the month of August. He said that he therefore felt obliged to
use that date on his application for benefits in order to be consistent with
the record of employment. However, in cross‑examination, the Appellant
contradicted himself, admitting that he filled out the portion of the record of
employment that included the first day worked. A further contradiction appears on
the application for benefits, where the Appellant indicated that at the time of
filling out the application, he had not yet received the record of employment
from ABC.
[15] The Appellant also relied
on three statements of account relating to ABC's source deductions to show that
ABC had made remittances of income tax, employment insurance premiums and
Canada Pension Plan contributions for him but these forms were filled out by
the Appellant, as were the references to the month in relation to which the
payments were supposedly made. It is difficult to tell whether the payments
that were made matched the amounts written on the form, and it is not possible
to determine who made the payments or whether those payments were made in
relation to the Appellant’s alleged employment. There was evidence in an
affidavit that the Appellant gave to the Employment Standards Branch investigator
that he paid the source deduction amounts himself. The Appellant at the hearing
of these appeals said that he did not pay these source deductions but paid
other source deductions for himself because ABC did not have the money, but no other
receipts showing such payments were produced by him.
[16] The Appellant’s
testimony concerning his departure from ABC also conflicts with the information
he provided earlier to Human Resources Development Canada. At the hearing he
said that he was fired because he had threatened to reveal that the company had
received GST refunds to which it was not entitled. On the questionnaire filled
out by the Appellant for Ms. Banwait concerning his alleged employment
with ABC, he stated that he was laid off due to a shortage of work. The
Appellant also said that he ordered the blank record of employment from the CRA
on behalf of ABC on February 6, 2007, which was nine days before he was
supposedly fired. It appears incongruent to me that the Appellant would have
known to order a record of employment in advance of being fired.
[17] Another unexplained
discrepancy in what the Appellant told the Canada Revenue Agency rulings
officer, Ms. Sausa-Gaufredo, relates to whether there was a written contract of
employment between himself and ABC. In a questionnaire she had him fill out
concerning his claim, he said that he had worked for ABC under a written
contract but that his copy of the contract had been removed from his briefcase
by the “owner on or before he was laid off”. Later, however, the Appellant provided
her with his purported employment contract with ABC, a document signed only by
him.
[18] The Appellant did
not call any witness to corroborate his claim that he was a full-time employee
of ABC for over six months during which time he said he personally dealt with
ABC’s clients, suppliers, creditors and contractors. I infer that the evidence
of such persons would have not been favourable to the Appellant.
[19] In light of the many
inconsistencies and contradictions in the Appellant’s evidence, and in the
absence of any other evidence supporting his allegation that he was employed by
ABC, I find that he has not met the onus upon him to show that the assumptions
relied upon by the Minister are incorrect. The Appellant has not shown that he
was engaged and worked as an employee of ABC during the period in issue, and
the appeals must therefore be dismissed.
Signed at Ottawa, Canada, this 16th
day of October, 2009.
“Brent Paris”
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