Citation: 2008TCC85
Date: 20080207
Docket: 2007-2624(EI)
BETWEEN:
HERMEL BERTHELOT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Lamarre J.
[1] The issue in the
case at bar is whether the Appellant was employed in insurable employment with 9097‑5665 Québec Inc./Services de Personnel
Mainlist ("the Payor") from May 22 to
July 20, 2001. The Minister of National Revenue
("the Minister") is of the opinion that she was not so employed.
He relies on the following facts set out in paragraph 5 of the Reply to
the Notice of Appeal ("the Reply") and reproduced below:
[TRANSLATION]
(a) This file is part of a major investigation
of several businesses, including the Payor, by HRSDC.
(b) During the investigation, it was found
that several companies were quickly changing names, e.g., Construction Ja‑No
Inc., Drakkar Construction Inc., 9080‑5839 Québec Inc./Renwords, 9085‑7186
Québec Inc./CINCO and 9097‑5665 Québec Inc./Services de Personnels
Mainlist (the Payor).
(c) Immediately after any of these businesses
closed, they were reopened under another business name with brothers, spouses
or other relatives as nominees.
(d) The businesses closed and moved when the
creditors became too insistent, the workers demanded T4 slips or Records of
Employment, or the federal or provincial government asked for information about
operations.
(e) All these businesses operated as placement
agencies in the construction field, even though their CIDREQ records stated
that they were construction, renovation, electrical, business management,
labour management/supply or human resource management businesses.
(f) The Payor in this matter, which
incorporated on November 9, 2000, operated a labour management and supply business; the president,
director and majority shareholder was Michel Brousseau.
(g) Mr. Brousseau registered using an
address on Monselet Street, but
according to his own statement, he never did business at that address and his
real address was at 9071 Pie IX Boulevard, Unit 6A, where he leased premises under the Payor's name.
(h) The Payor operated as a labour supply
business, primarily in the construction field.
(i) The Payor recruited clients/employers as
well as workers that it supplied to them.
(j) There was a contract and/or agreement
between the client/employer and the Payor, but there was no contract between
the Appellant and the Payor.
(k) The workers had to report their hours
worked to the Payor by telephone.
(l) Invoices were prepared and sent to the
Payor's clients/employers, which then paid the Payor.
(m) The following people were on the Payor's
leased premises: a receptionist; Michel Brousseau, the President; Jessy
Grenier, the person in charge of prospecting and pay; and Rival Cyr, the
person in charge of recruiting workers.
(n) Michel Brousseau was a nominee for the Payor.
The true owner and manager of the business was Alain Couture.
(o) In his first statement to an employment
insurance officer, the Appellant claimed that he worked for the Payor as a
[TRANSLATION] "messenger".
(p) The Appellant claims that he had to bring
nails, tools and other things to the construction workers; he was, he said, an
errands person.
(q) In the second version, which he gave to
the investigations officer, he said that he went out to the sites to hand workers
their wages.
(r) Among other things, the Appellant claimed
that he worked for the Payor from Monday to Friday and that he was paid a wage
of $16-$17 per hour.
(s) The people who worked on the Payor's
premises confirmed that the Payor had no messenger or errands person and that Michel Brousseau
looked after the distribution of wages.
(t) The Payor business closed its doors in
June 2001 at the latest, yet the Appellant submitted a Record of
Employment (ROE) signed by Michel Brousseau on July 27, 2001,
indicating that the last day worked was July 20, 2001.
(u) In the summer of 2001, the Appellant
made an EI benefit renewal claim in which he submitted two ROEs, including one
signed by Mr. Brousseau, the Payor's representative.
(v) The Appellant needed the ROE from the
Payor in order to enable him to qualify for EI benefits.
(w) The facts show that the ROE submitted by
the Appellant was an ROE of convenience issued by the Payor solely to enable
the Appellant to qualify for EI benefits.
[2] In summary, the
Minister determined that the ROE issued by the Payor was one of convenience.
The evidence discloses that the Appellant worked nights (from 10 p.m.
to 5 a.m., five days per week) from mid‑January 2001 to
July 18, 2001, for a business called Services d'entretien Dupont. The Appellant
quit his job with that business on one week's notice. The Appellant
testified that he knew that this resignation, recorded on the ROE from that
business, would not entitle him to employment insurance.
[3] According to the
Appellant, at the same time as he did this job, he worked for the Payor during
the daytime from May 22 to July 20, 2001. He said that he was hired to make
deliveries to construction sites, deliver wages to employees and invoices to
clients, and make bank deposits for certain employees. It is precisely this job
that the Minister questions.
[4] Counsel for the
Respondent successfully pointed out certain contradictions in the evidence that
cause me as well to doubt the veracity of this employment.
[5] First of all, the
Appellant began by saying that he applied for employment with the Payor by
passing by its office, and was hired by the receptionist to do the work
described above. This is already questionable because the premises are not
visible from the street, and the Appellant no longer knew what floor the
business was on, and was unsure of the address. He said that he sometimes handed
people wages in cash, and therefore sometimes walked around carrying amounts up
to $4,000. Yet he was hired without further formality within a few days of
applying for his employment, having provided no references. Later in his
testimony, he said that Daniel Methot, whom he had known for a long time,
had recommended that he apply for a job. Mr. Methot was allegedly also the
person with whom he negotiated his salary.
[6] It is not a very
credible starting point to suggest that a person was hired without any checks
and then entrusted with rather significant sums of money, which, moreover,
constituted the pay of other employees.
[7] The Respondent
called Line Simoneau, the major investigations officer at the Department
of Human Resources (HRD), as witness. During her investigation, she noticed
that the Payor was one of a series of businesses that advertised themselves as
personnel agencies and had been investigated for issuing false ROEs. In fact,
Alain Couture, the instigator of all these businesses, was convicted on
related criminal charges.
[8] Ms. Simoneau stated
that Daniel Methot, with whom the Appellant acknowledged having
negotiated, managed the operations of the business operating under the Payor's
name (Mainlist). During her investigation, she met Mr. Methot and others
involved in all of Mr. Couture's businesses. Based on her investigation,
no one was hired as an errands person. Very few people were responsible for
handing the various employees their pay and handling cash amounts. The
Appellant was not one of them. Moreover, based on her investigation, no one was
paid by direct deposit into a bank account. This contradicts the testimony
given by the Appellant, who said that such direct deposits were among his
duties. In addition, the investigation revealed that the Payor shut down no
later than the end of June 2001. The ROE states that the Appellant's last
day worked was July 20, 2001, This is another contradiction in the evidence, which was
not explained by the Appellant.
[9] I agree with the
Respondent that that the evidence, on a balance of probabilities, points to something
else, namely that this job with the Payor was fictitious. An initial finding
can be made that the Appellant deposited paycheques for the entire period in
issue (though the Appellant did say that some of these cheques
bounced). This suggests that he may have been remunerated by the Payor.
[10] However, the
Appellant's evidence falls apart on the question of what work he actually did.
In order for employment to be insurable, there must, in addition to
remuneration, be work under a contract of service (paragraph 5(1)(a) of
the Employment Insurance Act). But the contradictions identified in the
evidence raise serious doubts as to whether the Appellant actually rendered
services to the Payor. The Appellant was unable to satisfy me or show that
the allegations of fact in the Reply, on which the Minister relied when he determined
that there was not genuine employment, were unfounded. As Justice Garon (as he
then was) held in Duquette et al. v. The Queen, 93 DTC 833, [1993] T.C.J. No. 757
(QL), ". . . the Minister may rely on statements by
third parties and on the report of a commission of inquiry and take for granted
that what it advances is true. The onus is on the Appellant to demolish those
presumptions." (See the reference in Vézina v. Canada, [2001] T.C.J. No. 564
(QL), at paragraph 16.)
[11] In fact, the Federal
Court of Appeal has confirmed that our Court is justified, under a broadened
discretion conferred by subsection 18.15(4) of the Tax Court of
Canada Act, in admitting hearsay evidence if it is relevant and reliable (see Selmeci v. Canada,
[2002] F.C.J. No. 1086 (QL), at paragraph 8). In the
instant case, the allegations in the Reply were sufficiently clear and the
Appellant had the onus of showing that these allegations were erroneous. He did
not discharge this onus, and his testimony alone had several weaknesses.
[12] In my opinion, the
Appellant has not shown on a balance of probabilities that he held genuine
employment with the Payor during the period in issue.
[13] The appeal is
dismissed and the Minister's decision is confirmed.
Signed at Ottawa, Canada, this 7th day of February 2008.
"Lucie Lamarre"
Translation
certified true
on this 2nd day of
April 2008.
Brian McCordick,
Translator
Email this Content