Citation: 2008 TCC 574
Date: 20081024
Docket: 2007-4694(EI)
BETWEEN:
MARIELLE ARSENEAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
[1]
The Appellant has
appealed from the decision by the Minister of National Revenue ("the
Minister") under the Employment Insurance Act ("the Act").
The Minister determined that Marielle Arseneau ("the Worker") did not
hold insurable employment while she worked for Paul W. Chevarie ("the Payor"),
finding that her employment was excluded because she and the Payor would not
have entered into a similar contract of employment if they had been dealing
with each other at arm's length. The relevant work periods were as follows:
(i)
from April 28 to July 26, 2003;
(ii)
from April 19 to July 17, 2004;
(iii)
from May 9 to August 6, 2005;
(iv)
from May 1 to July 29, 2006.
[2]
In reaching his
decision, the Minister relied on the following assumptions of fact, set out in
paragraphs 5 and 6 of the Reply to the Notice of Appeal:
[TRANSLATION]
5. The Appellant and the Payor
are related persons within the meaning of the Income Tax Act
because: (admitted)
(a) the Payor was the sole owner of a fishing vessel
known as the "Paul Olivier"; (admitted)
(b) the Payor held a fishing licence and operated a
fishing business; (admitted)
(c) the Appellant was the Payor's common-law spouse;
(admitted)
(d) the Appellant was related to a person who
controlled the Payor's business; (admitted)
6. The Minister determined that the Appellant and
the Payor were not dealing with each other at arm's length in the context of
this employment. The Minister was satisfied that it was reasonable to conclude
that the Appellant and the Payor would not have entered into a substantially similar
contract of employment if they had been dealing with each other at arm's
length, in light of the following circumstances:
(a)
the Payor operated a 35‑foot fishing
vessel known as the "Paul Olivier"; (admitted)
(b)
the Payor held a licence to fish for herring,
mackerel and lobster; (admitted)
(c)
until 2003, the buyer of the Payor's
catches was Norpro Ltée; since 2004, the buyer has been Homard Des Îles
Renaud; (admitted)
(d)
the buyer of the Payor's catches prepared the Payor's
payroll; (admitted)
(e)
the Payor was active year‑round: fishing
began in April with herring (three or four weeks), followed by
lobster (approximately nine weeks) and ending with another species of
herring (from three weeks to three months) in addition to
alternative mackerel fishing; (denied)
(f)
the Payor hired two fisher's helpers: the Appellant,
who worked only on land; and Paul J. Chevarie, who accompanied the Payor
aboard the vessel; (admitted)
(g)
the Appellant was the Payor's common-law spouse
until July 2007; (admitted)
(h)
the Appellant was not financially involved in
the Payor's business in any way; (admitted)
(i)
when the Appellant was put on the Payor's
payroll, her main duties were: (denied as written)
- to go to the cold storage room in order to prepare bait,
- to keep fishing statistics,
- to sweep the vessel when it docked each day and to
wash it thoroughly on Sunday,
- to prepare the Payor's meals and to wash his clothing;
(j)
as well, the Appellant filed the Payor's
documents that he gave to his accountant at the end of the year; (admitted)
(k)
although the Payor did not record the Appellant's
hours of work, the Appellant estimates that she worked 60 hours per week,
on average; (denied)
(l)
the Appellant received fixed remuneration
of $500 per week when she was put on the Payor's payroll
in 2003; her pay increased to $600 per week starting
in 2004; (admitted)
(m) the Appellant was paid by direct deposit every two weeks; (admitted)
(n)
when the Appellant was taken off the Payor's
payroll, usually in July, she continued to render services to the Payor;
(denied)
(o)
outside the periods in issue, the Appellant
rendered the following services to the Payor: (denied)
- she cleaned the herring and mackerel catches brought in by the Payor,
- she painted the buoys,
- at the end of the season, she cleaned the vessel
thoroughly and stored the fishing nets;
(p)
the Appellant rendered services to the Payor
until late in the autumn; (denied)
(q)
the Payor no longer paid the Appellant but
banked her hours in order to pay her at the beginning of the following season,
so that she was on the payroll for the required 12 or 13 weeks; (denied)
(r)
the Payor could not afford to pay wages to the Appellant
during all the weeks during which she rendered services to the Payor; (denied)
(s)
since April 2007, the Appellant has
worked full‑time for Madelimer; the Payor has not hired anyone else to
replace the Appellant and to carry out her duties; (denied)
(t)
all of the light duties assigned to the Appellant,
who did not work aboard the vessel, do not justify the 62 hours, on
average, for which the Payor paid her; (denied)
(u)
the Appellant rendered many services to the Payor
outside the periods in issue, which an "outsider" would not have
agreed to do. (denied)
Testimony of the Payor
[3]
The Payor testified
that:
(i)
the Worker had been his
common-law spouse from 1990 until July 13, 2007;
(ii)
from his union with the
Worker, a son was born on April 11, 1992;
(iii)
the lobster fishing
season extended over a nine‑week period, usually beginning in early May;
(iv)
during the lobster
fishing season, the Worker worked eight hours per day,
seven days per week, on average;
(v)
during the lobster
fishing season, the Worker's duties each day (except Sunday) consisted in:
1.
travelling by car from
the town of Fatima (where the Payor and the Worker lived) to Cap‑aux‑Meules
(the home port of the Payor's fishing vessel), and driving the Payor's truck
back to Fatima. The Payor explained that the Worker spent one hour
per day, on average, performing this task;
2.
preparing the bait for
lobster fishing. The Payor explained what this duty consisted in: the Worker took
nine bins containing 300 pounds of bait (herring and mackerel) from
the Payor's cold storage room and brought them to the Payor's shed. She cut
each piece of bait in two and placed the pieces into six bins, which
she placed in the Payor's truck. She then cleaned the nine bins, the tools
(tables and knives) and the floor of the shed. The Payor explained that this duty
required approximately 3 hours of work per day;
3.
driving the Payor's
truck back to the home port of the Payor's fishing vessel
around 6:00 p.m., when the vessel returned to port. The Payor
explained that, after dropping off the six bins containing the bait, the Worker
cleaned the vessel and then returned by car to Fatima. The Payor testified that
these duties required from one hour and 45 minutes to two hours of
work per day;
4.
preparing
fishing statistics and filing invoices. The Payor explained that the Worker
spent approximately 90 minutes per week performing these tasks;
5.
preparing the meals
that the Payor brought aboard his fishing vessel. It should be noted that the Payor
did not specify the length of time that the Worker spent carrying out this
duty;
6.
washing the Payor's
clothing. The Payor explained that the Worker spent from one to
three hours per week carrying out this duty;
7.
running errands such as
occasionally purchasing plaice, which was also used as bait for lobster
fishing. It should be noted that the Payor did not specify the length of time
that the Worker spent performing this task;
(vi)
every Sunday during the
lobster fishing season, the Worker thoroughly cleaned the vessel (which
required approximately two hours of work) and prepared the bait for
Monday's fishing;
(vii)
immediately after the
end of the lobster fishing season, the Worker painted the 118 buoys and
repaired the 300 lobster traps belonging to the Payor. The Payor explained
that the Worker spent from seven to 10 days (at eight hours
per day) carrying out these duties;
(viii)
the Worker rendered few
services to the Payor outside the relevant periods. The Payor explained that
the services rendered by the Worker outside the relevant periods required
approximately 10 hours of work by her;
(ix)
during the lobster
fishing season, the Payor left his home at about 2:00 a.m. (except on
Sunday) to go fishing, and usually returned at about 6:00 p.m., which
represents approximately 16 hours of work per day;
(x)
in 2007 and 2008,
the duties carried out by the Worker during the previous years (which, I note,
required approximately 60 hours of work per week) were carried out by
the Payor (at 40 hours per week) and by his 15‑year‑old
son (at 20 hours per week). Thus, during the 2007 and
2008 lobster fishing season, the Payor allegedly worked approximately
136 hours per week, that is, more than 19 hours per day.
Testimony of the Worker
[4]
Essentially, the Worker
testified to the same effect as the Payor.
Documentary evidence
[5]
As well, the evidence
has established that the document describing the Worker's duties
(Exhibit I‑1) sent by Gaétan Cousineau (an employee of Mouvement
Action Chômage, whose services the Worker retained at the outset to represent
her in the instant case) to Lyne Courcy (an employee of the Canada Customs and
Revenue Agency) was prepared jointly by the Payor and the Worker and typed by
the Worker. It should be noted that this document was signed by the Payor and
the Worker. Given the importance of this document in reaching my decision, I
consider it helpful to reproduce it in its entirety:
[TRANSLATION]
Below you will find the duties carried out as a fisher's helper on
land.
- Preparing the statistics on the lobster catches; preparing the
invoices for the accountant and taking them to the accountant's office; reading
all the Fisheries and Oceans reports and highlighting the important points
(two and one‑half hours per day = 15 hours
per week).
- Telephoning and travelling to the cold storage room in order to
pick up the bait for the following day; cutting the bait and placing it in the
bins for Paul to place in other bins to take aboard the vessel
(three hours per day = 18 hours per week).
- When the vessel arrived, doing light cleaning (sweeping, washing
the windows) (one hour per day); on Sunday, doing a thorough cleaning
(four hours per day) (= 10 hours per week).
- Preparing lunches (baking); purchasing groceries for the vessel;
washing fishing clothing (two and one‑half hours per day =
15 hours per week).
- Washing the interior of the truck once a week in order to
remove the fish odour, and then washing the exterior in order to remove the
salt (four hours per week).
BANKED TIME WORKED FOR FISHING
- At the end of the fishing season, painting and numbering the buoys
(one and one‑half weeks = 90 hours).
- In the spring, preparing the vessel; scraping the paint; cleaning
the interior, while Paul looked after the mechanical maintenance (two 40‑hour
weeks).
- In the autumn after the fishing season, cleaning and preparing for
winter; picking up the electronic equipment with Paul (one 60‑hour week).
- After the end of the fishing season, helping Paul pick up the
lines and buoys; picking up and straightening them all out (one 60‑hour
week). I do not do any work with the lobster traps; they are too heavy for me.
Please note that I did not work aboard the vessel because of the
numerous hours I was required to work on land, and also because our son Paul
did not want me to in case something happened to us aboard the vessel.
Hours worked per week: 62.
Hours banked for the following season: 290.
[6]
This document, which, I
reiterate, was prepared and signed by the Worker and the Payor, clearly
indicates that outside the relevant periods during each year in issue, the Worker
worked for 290 hours without being paid. I note that the Payor and the Worker
testified that the Worker rendered few services outside the relevant periods;
their testimony explaining this contradiction was simply incomprehensible. In
fact, the Payor and the Worker wanted me to believe that they had made a
mistake in indicating in the document that the Worker worked for 290 hours
outside each of the relevant periods during each of the years in issue. Their
testimony explaining this contradiction was simply not very credible. I
emphasize that, with regard to the duties carried out by the Worker during the relevant
periods as well and the hours required to do so, the document and the testimony
of the Worker and the Payor are rather different.
[7]
In addition, I note
that the Worker's testimony and her statutory declaration, adduced in evidence
as Exhibit A‑1, are rather different in the description of the duties
she carried out, particularly with regard to preparing, handling and
transporting the bait. This fact only added to my doubts about the duties
carried out by the Worker during the relevant periods and particularly about
the number of hours (60 hours per week) she allegedly spent doing so.
[8]
I note that the Respondent
determined that this employment was not insurable under paragraph 5(2)(i)
and subsection 5(3) of the Act, because he was satisfied that
it was not reasonable to conclude, in light of all the circumstances, that the
Worker and the Payor would have entered into a substantially similar contract
of employment if they had been dealing with each other at arm's length.
[9]
On a number of
occasions, the Federal Court of Appeal has delineated the role entrusted by
the Act to a judge of the Tax Court of Canada. This role does not
allow the judge to substitute his or her assessment for that of the Minister;
rather, this person must "verify whether the facts inferred or relied on
by the Minister are real and were correctly assessed having regard to the
context in which they occurred, and after doing so, ... must decide whether the
conclusion with which the Minister was 'satisfied' still seems reasonable".
[10]
In other words, before
deciding whether the Minister's conclusion still seems reasonable to me, I
must, in light of the evidence available to me, verify whether the Minister's conclusions
are well‑founded, according to the factors set out in
paragraph 5(3)(b) of the Act. At issue, then, is
whether the Payor and the Worker would have entered into a substantially similar
contract of employment if they had been dealing with each other at arm's
length.
[11]
In the instant case,
the onus was on the Worker to establish, on a balance of probabilities, that
the facts inferred or relied on by the Minister were not real or were
incorrectly assessed having regard to the context in which they occurred.
Essentially, in the instant case, the Worker needed to satisfy me that:
(i)
all the duties assigned to her justified the
62 hours of work, on average, for which the Payor paid her;
(ii)
she did not render services (at 290 hours
per year) outside the relevant periods.
[12]
The Worker simply has
not discharged the onus resting on her. Her evidence was based on her testimony
and that of the Payor, to which I attribute little probative force in view of the
distortions and the contradictions between these persons' testimony and their
declarations forming part of the documentary evidence, particularly with regard
to the duties carried out by the Worker during the relevant periods, the number
of hours spent carrying out those duties and, lastly, the services rendered
outside the relevant periods.
[13]
In light of the
evidence available to me, after considering the factors set out in
paragraph 5(3)(b) of the Act, and after verifying
whether the Minister's conclusions are well‑founded, I find the
conclusions with which the Minister was satisfied to be reasonable.
[14]
For these reasons, the
appeal is dismissed.
Signed at
Ottawa, Canada, this 24th day of October 2008.
"Paul Bédard"
Translation certified true
on this 5th day of December 2008.
Brian McCordick, Translator
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