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Citation: 2004TCC596
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Date: 20040902
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Docket: 2002-4714(EI)
2002-4715(CPP)
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BETWEEN:
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JASVIR BHULLAR,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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Docket: 2003-208(CPP)
2003-209(EI)
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AND BETWEEN:
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KULDEEP S. BAHNIWAL
o/a SUN VALLEY ORCHARD,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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Docket: 2002-4716(EI)
2002-4717(CPP)
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AND BETWEEN:
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ASSA SINGH BHULLAR,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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Docket: 2003-215(CPP)
2003-216(EI)
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AND BETWEEN:
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NAVJOT BAHNIWAL,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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Docket: 2003-206(EI)
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AND BETWEEN:
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KULDEEP S. BAHNIWAL
o/a SUN VALLEY ORCHARD,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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Docket: 2003-214(EI)
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AND BETWEEN:
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NAVJOT BAHNIWAL,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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REASONS FOR JUDGMENT
Mogan J.
[1] Six appeals under the
Employment Insurance Act ("EI Act") and
four related appeals under the Canada Pension Plan
("CPP") were heard over a two-day period
at Kelowna, British Columbia in January 2004. One counsel,
Richard D. Covell, represented all Appellants; and one counsel,
Shawna Cruz, represented the Minister of National Revenue
("MNR"), the Respondent in all cases. As will appear
from the description below, the appeals were grouped around three
basic issues.
[2] Two of the Appellants are Jasvir
Bhullar and her husband Assa Singh Bhullar. The other two
appellants are Kuldeep Bahniwal and his daughter,
Navjot Bahniwal. Because certain family names are the same,
for convenience I shall refer to the wife and husband as
"Jasvir" and "Assa", respectively. And I
shall refer to the father and daughter as "Kuldeep" and
"Navjot", respectively. The first issue is whether
Jasvir was employed by Kuldeep in insurable employment during the
period July 15 to October 25, 2001. The Court File Numbers
involved in the first issue are 2002-4714(EI) and 2002-4715(CPP)
in which Jasvir is the Appellant and 2003-208(CPP) and
2003-209(EI) in which Kuldeep operating as Sun Valley Orchard is
the Appellant.
[3] The second issue is whether Navjot
was employed by Assa in insurable employment during the period
July 1 to October 20, 2001. The Court File Numbers involved in
the second issue are 2002-4716(EI) and 2002-4717(CPP) in which
Assa is the Appellant; and 2003-215(CPP) and 2003-216(EI) in
which Navjot is the Appellant.
[4] The third issue is whether Navjot
was employed in insurable employment by Kuldeep during the period
March 4 to June 30, 2001 accepting the fact that they do not deal
with each other at arm's length. The Court File Numbers
involved in the third issue are 2003-206(EI) in which Kuldeep
operating as Sun Valley Orchard is the Appellant and 2003-214(EI)
in which Navjot is the Appellant. At the hearing, evidence was
presented on the first and second issues together because of the
Respondent's claim that there was an "exchange of work
or services" within the meaning of the EI Act.
Evidence was then presented on the third issue separately.
Because I have concluded that there was no "exchange of work
or services", I shall consider the first issue alone. I will
then consider the second and third issues together because Navjot
is the principal Appellant in both.
First Issue
- Was Jasvir employed
by Kuldeep during
the period July 15 to October 25, 2001?
[5] Jasvir claims that she was
employed by Kuldeep during the period in question and Kuldeep
makes the same claim. The MNR denies that there was such
employment and further states that, if Jasvir was employed by
Kuldeep, then her employment was part of an exchange of services
between Kuldeep and Assa respecting the services of Jasvir and
Navjot. In the pleadings, the Respondent relies on the assumed
fact that Assa and Kuldeep were close friends in 2001.
[6] Kuldeep was the first witness to
testify. He was born in the Punjab area of India in 1959 and came
to Canada in 1981 at the age of 22. He went directly to the
Okanagan Valley as a farm labourer in 1981 and became a citizen
of Canada in 1985. He has operated an orchard since 1991 either
as a tenant or as an owner. He started on leased land but
purchased 10.2 acres in 1993. He operates under the name
"Sun Valley Orchard" and his principal crops are
cherries, apricots, apples and vegetables. The busiest working
time is March to October. In March, he and his helpers prune and
clean up around his 800 trees, and they plant vegetables. In May,
June and July, they thin the apple trees to produce better
apples.
[7] In 2001, Kuldeep purchased an
additional 12 acres and so he was farming 22 acres from and after
2001. His land is near Oliver, a small community on B.C. Highway
97 about 40 kilometres south of Penticton. His father also has a
10.2-acre orchard near Oliver. Kuldeep stated that he actually
lives in the town of Oliver, about a five-minute drive from his
orchard. Jasvir and Assa live in Penticton but Assa's orchard
is at Kaleden, about five kilometres south of Penticton and 35
kilometres north of Oliver. Jasvir testified and explained that
she travelled south from Penticton to Oliver to work at
Kuldeep's orchard. She said that she worked for Kuldeep each
year from 1993 to 2001.
[8] Assa was born in India in 1963 and
came to Canada in 1990 when he was 27. He married Jasvir in 1992,
the year she came to Canada. They both worked for Kuldeep in 1993
but, in 1994, Assa leased 25 acres of land to farm himself and
did not work for Kuldeep after 1993. Jasvir and Assa have two
children born in 1993 and 1995. Assa's mother looks after the
children while Jasvir works. Jasvir stated in evidence that Assa
leases his land from "white people" and, if he lost his
lease, he would have to find other work but she had regular
income each year from 1993 to 2001 working for Kuldeep.
[9] There are a number of documents
which support Jasvir's claim that she was employed by Kuldeep
over a period of years. Exhibit A-2 is a T4 slip issued by
Sun Valley Farm to Jasvir showing that she earned $6,296 in 1993.
Exhibit A-3 is a T4 slip issued by Sun Valley Orchard to
Jasvir showing that she earned $1,173 in 1994. Exhibit A-4 is a
Record of Employment ("ROE") issued by Sun Valley
Orchards to Jasvir showing that she worked 13 weeks in 1995 and
earned $7,731. Exhibit A-5 is an ROE issued by Sun Valley
Orchards to Jasvir showing that she worked 16 weeks in 1996 and
earned $9,639. Exhibit A-6 is an ROE issued by Sun Valley
Orchards to Jasvir showing that she worked from July 15 to
October 25, 2001 and earned $7,170. And finally, Exhibit R-2 is a
timesheet for Jasvir for 2001 showing her hours worked, gross
earnings and source deductions. Her gross earnings ($7,170) in
Exhibit R-2 is consistent with the amount shown in Exhibit A-6.
Her net earnings ($6,731.56) in Exhibit R-2 is consistent with
the total of the cheques and cash receipts listed in paragraph 11
below.
[10] Jasvir claims that she worked for
Kuldeep's father in June 2001 before she went to work for
Kuldeep himself. Exhibit A-1 is an informal power of attorney
dated May 14, 2001 granted by Surain Bahniwal (father of Kuldeep)
to Kuldeep with respect to the operation of Surain's farm.
Exhibit A-7 is a photocopy of two receipts dated June 15 and July
1, 2001, respectively, signed by Jasvir acknowledging cash ($400
and $914.08) received from Surain, and indicating that Jasvir was
seeking employment in June 2001. Exhibit A-16 is a handwritten
record of Jasvir's hours at Surain's farm in June 2001.
The hours and total amount of wages ($1,314.08) in Exhibit A-16
are consistent with the total cash received in Exhibit A-7.
[11] Exhibits A-8 to A-13 are either cheques
or cash receipts (as indicated in the table below) showing six
occasions when Jasvir received money from Kuldeep in the period
July to November 2001.
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A-8
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Cash receipt
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July 29
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$1,300.00
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A-9
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Cash receipt
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August 31
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1,318.76
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A-10
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Cheque
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September 30
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1,980.47
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A-11
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Cheque
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October 24
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1,200.00
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A-12
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Cash receipt
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October 25
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500.00
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A-13
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Cheque
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November 20
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432.33
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Two of the cheques (A-10 and A-11) were cashed on November 8,
2001 and the third cheque (A-13) was cashed on November 23, 2001.
Kuldeep explained that whether he sells his fruits and vegetables
to wholesalers or the Co-op, they pay him on a delayed basis. As
a consequence, he sometimes has to ask his workers to defer
cashing his cheques until he has been paid by the wholesalers or
Co-op. This is what happened in the case of Exhibits A-10 and
A-11. Kuldeep was asked about Exhibit A-13 (cheque dated November
20) and stated that it must have been some kind of catch-up
payment because it was issued almost four weeks after
Jasvir's last day at work (October 25) and it was for a
precise amount ($432.33) unlike Exhibits A-11 and A-12.
[12] Jasvir did not work for Kuldeep in 2002
or 2003 but she did work for Surain Bahniwal (Kuldeep's
father) from September 8 to October 12, 2002. Exhibit A-14 is a
handwritten record of Jasvir's hours from September 8 to
October 12 in Kuldeep's writing as administrator (see Exhibit
A-1) of his father's farm. Exhibit A-15 is an ROE issued by
Surain Bahniwal to Jasvir for the period September/October 2002
but apparently signed by Kuldeep as administrator.
[13] In paragraphs 9 and 11 above, a number
of documentary exhibits are described which support Jasvir's
claim that she worked for Kuldeep during the period July 15 to
October 25, 2001. Those documents demonstrate a pattern of Jasvir
working for Kuldeep over a period of years from 1993 to 1996 and
in 2001. Jasvir stated under oath (through a Court translator)
that she also worked for Kuldeep in the years 1997 to 2000; that
she was laid off each year at the end of the farm season (usually
October); and that in all years 1993 to 2000 she claimed and was
granted unemployment benefits under the UI/EI system. I accept
her oral testimony because it is consistent with the
documents.
[14] The Respondent denied that Jasvir
worked for Kuldeep in 2001 and, alternatively, stated that if she
did so work, there was an exchange of services with respect to
Jasvir and Navjot. The Respondent assumed that Kuldeep and Assa
were close friends. Both Kuldeep and Assa testified that they
knew each other but were not close friends. They maintain that
they are part of a large community of 300 to 400 Punjab families
who operate orchards in the Penticton/Kaleden/Oliver area of the
Okanagan Valley. I accept their evidence on this point and find
that Jasvir was employed by Kuldeep in insurable employment
during the period July 15 to October 25, 2001. The appeals of
Jasvir and Kuldeep are allowed for the period July 15 to October
25, 2001.
Second
Issue
- Was Navjot employed
by Assa during
the period July 1 to October 20, 2001?
Third
Issue
- Was Navjot engaged in
insurable
employment by Kuldeep during
the period March 4 to June 30, 2001?
[15] As the principal Appellant in the
second and third issues, Navjot claims that she was employed by
her father (Kuldeep) from March 4 to June 30, 2001; and that she
was employed by Assa from July 1 to October 20, 2001. With
respect to the earlier period (March to June 2001), the
Respondent claims that Navjot was not employed by Kuldeep and, if
she was so employed, then her employment by Kuldeep was excluded
by paragraph 5(2)(i) of the EI Act because, as
father and daughter, they did not deal with each other at
arm's length. With respect to the later period (July to
October 2001), the Respondent claims that Navjot was not employed
by Assa and, if she was so employed, then her employment
constituted an exchange of services within the meaning of
paragraph 5(2)(g) of the EI Act. The relevant
provisions of the EI Act are as follows:
5(1) Subject to subsection (2),
insurable employment is
(a)
employment in Canada by one or more employers, under any express
or implied contract of service or apprenticeship, written or
oral, whether the earnings of the employed person are received
from the employer or some other person and whether the earnings
are calculated by time or by the piece, or partly by time and
partly by the piece, or otherwise;
(b)
...
5(2) Insurable employment does
not include
(a) ...
(g)
employment that constitutes an exchange of work or services;
(h)
...
(i)
employment if the employer and employee are not dealing with each
other at arm's length.
5(3) For the purposes of
paragraph (2)(i),
(a) the
question of whether persons are not dealing with each other at
arm's length shall be determined in accordance with the
Income Tax Act; and
(b) if the
employer is, within the meaning of that Act, related to the
employee, they are 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.
[16] Navjot's evidence is that she
worked in her father's orchard from March 4 to June 30, 2001
while she was finishing Grade 12 high school at Oliver. Her work
was orchard labour, raking up around the trees and pulling weeds.
She worked after school and on weekends at a rate of $10 per
hour. She concluded that orchard labour was hard work and so she
called Assa to see if she could work in the fruit stand at his
farm near Kaleden. Assa agreed to hire Navjot. She started to
work in the fruit stand on July 1, 2001 and continued until late
October. I will consider Navjot's two work periods in
chronological order.
[17] There is no doubt that Kuldeep and
Navjot, as father and daughter, do not deal with each other at
arm's length. Accordingly, Navjot's employment
by Kuldeep starts off as excluded from insurable employment
under paragraph 5(2)(i) of the EI Act. In
order to consider the non-arm's length question, I will leave
aside the Respondent's alternative claims (i) that Navjot did
not work the 540 hours shown on the ROE issued to her by Kuldeep;
and (ii) that Navjot and Kuldeep entered into an arrangement to
qualify for EI benefits to which she would otherwise not be
entitled. See paragraphs 5(j), (q) and (r) in the
Respondent's Reply in Court File 2003-214(EI).
[18] Navjot's claim with respect to the
period March 4 to June 30, 2001 was heard as the second phase of
the hearing with its own exhibits. In this sense, both Kuldeep
and Navjot testified twice. Kuldeep entered as Exhibits A-1, A-2,
A-3 and A-4 his handwritten record of Navjot's hours worked
each day from March 4 to June 30. According to those exhibits,
she worked about two or three hours each school day and about
eight or nine hours on weekends. He stated that he recorded her
hours day-by-day as she worked and that Exhibits A-1 to A-4 were
contemporary records. He also stated that Navjot was laid off on
June 30 because he had no more work but he then hired Jasvir on
July 15 who worked right through to October 25.
[19] Exhibit A-5 is an ROE issued by Kuldeep
to Navjot showing 540 hours worked from March 4 to June 30.
Kuldeep signed the ROE on November 3, 2001. He stated that he
delayed issuing the ROE because he might have called her back to
work. Exhibit A-6 is a cheque from Kuldeep to Navjot dated
October 24, 2001 in the amount of $4,941.80. Navjot stated
that she did not want to be paid on a regular basis like each
month or every two weeks because she wanted only one big payment.
She could not explain why the cheque was issued on October 24 as
opposed to a date closer to June 30 when she last worked
for her father.
[20] Brian Lundgren testified as a witness
for the Respondent. He investigates EI claims for Human Resources
Development Canada ("HRDC"). He stated that
Navjot's claim was brought to his attention because she was a
first-time claimant for EI benefits and she had worked for her
father. From Mr. Lundgren's experience (four years)
investigating EI claims in the Okanagan Valley, he concluded that
most owners of 10-acre farms did not hire workers in March, April
or May but waited until June, July and later months when there
were crops to be harvested. He interviewed Kuldeep, Navjot, Assa
and Jasvir. When Mr. Lundgren interviewed Kuldeep in
December 2001, he was given a copy of Exhibit R-1, the daily
timesheet for Navjot, but he was not given the backup pages which
became Exhibits A-1 to A-4 in these cases. He concluded that
there were issues of fact for Revenue Canada to resolve.
[21] Navjot's only payment for wages
from Kuldeep was the cheque for $4,941.80 issued on October 24,
2001. Confining myself to the non-arm's length question under
paragraphs 5(2)(i) and 5(3)(b), I conclude
that an arm's length employee would not wait and would not be
expected to wait three months plus 24 days for wages which
were earned over the four-month period from March to June.
[22] Having regard to all the circumstances
of Navjot's claimed employment by Kuldeep in the period March
to June 2001, and in particular the long delay in the payment of
wages, it is not reasonable to conclude that an arm's length
employee would have entered into a substantially similar contract
of employment. There is not sufficient evidence to persuade me
that the Minister exercised his/her discretion under paragraph
5(3)(b) in a manner contrary to law with respect to the
claimed employment of Navjot by Kuldeep from March 4 to
June 30, 2001. The appeals of Navjot and Kuldeep are
dismissed for the period March 4 to June 30, 2001.
[23] Navjot's second claim is that she
was employed by Assa from July 1 to October 20, 2001. Her
evidence is that, after working for her father, she concluded
that orchard labour was hard work and, when the school year
ended, she looked for easier work at Assa's fruit stand at
his farm. She claims that she worked for Assa for three months
and 20 days from July 1 to October 20, 2001. Assa testified in
support of Navjot's claim.
[24] The Appellants (Navjot and Assa)
entered certain documents in support of her claim. Exhibit A-18
is an ROE issued by Assa to Navjot showing her first day worked
and last day worked (July 1 and October 20); and showing her
total earnings at $10,020. Exhibit A-19 is a summary in
Assa's handwriting showing the number of hours Navjot worked
on a weekly basis. Exhibits A-18 and A-19 do not show the hours
worked each day. In ordinary circumstances, the employer records
the hours worked each day. Navjot stated that she did not keep
track of her hours. I would contrast Exhibit A-19 with Exhibits
A-14 and A-16 on which Kuldeep recorded the hours which Jasvir
worked each day at Surain Bahniwal's farm in
September/October 2002 and in June 2001, respectively. Also,
Exhibit R-2 is Kuldeep's payroll record showing the
hours which Jasvir worked each day from July 15 to October 25,
2001. Why could Assa not produce a daily timesheet (like Exhibit
R-2) for Navjot when her entitlement to EI benefits was
challenged in the winter of 2001/2002? Exhibit R-6 (Navjot's
Questionnaire) was dated May 9, 2002 proving that she had already
been denied or challenged with respect to her EI benefits.
[25] Assa stated that in 2001 he was farming
40 acres at Kaleden which he had under lease. Also in 2001, Assa
had four or five workers who helped him farm the 40 acres and
each was paid $10 per hour. He would have needed a daily
timesheet like Exhibit R-2 for each worker to record the hours
worked each day, the total hours for a particular pay period
(probably weekly), the gross earnings, the source deductions (if
any) and the net amount payable to each worker. An employer will
ordinarily retain those daily timesheets - a basic payroll record
- for at least a year, first, to support the T4 Revenue Canada
slips which are issued to all employees at the end of the year,
and second, to prove the amount entered as "wages" in
the statement of earnings for the farm operation.
[26] Assa's personal appeals in this
Court (Court Files 2002-4716(EI) and 2002-4717(CPP)) are in
support of Navjot's personal appeals (Court Files
2003-215(CPP) and 2003-216(EI)) in which she claims that
she was employed by Assa in 2001 and is therefore entitled to
unemployment benefits after being laid off on October 20, 2001.
Assa was a significant witness in the hearing of these appeals.
His failure to produce daily timesheets for Navjot causes me to
question whether Navjot ever worked for Assa in 2001.
[27] There are many aspects of Navjot's
second claim (i.e. that she was employed by Assa from July to
October 2001) which do not have a true ring. I will describe
a few of those aspects.
(a) Although I do not attach
much weight to Exhibit A-19 (a one-page summary of Navjot's
hours worked on a weekly basis), that exhibit indicates that she
(age 19) worked about 10 hours every single day from July 1 to
August 4 and from August 19 to September 22. Most young people
would want at least one or two recreational days in a five-week
period.
(b) She gave up orchard labour at her
father's farm at Oliver in order to do easier work (the fruit
stand) at Assa's farm at Kaleden about 35 kilometres north of
Oliver. Navjot did not have her own car and so her parents
(usually her mother) drove her to work at Assa's fruit stand
and picked her up after work. Some members of Navjot's family
would have to travel about 140 kilometres each day just to
deliver her to work at Kaleden and to bring her home. If Exhibit
A-19 is believable (and I doubt that it is), Navjot's family
drove more than 4,500 kilometres in her first five weeks of work
(July 1 to August 4) just to take her to work and bring her
home.
(c) Exhibit R-7 was introduced through
Navjot showing that she enrolled in a special course at Oliver
Secondary School to upgrade her Grade 12 English. The course
started September 4, 2001 and ended January 28, 2002. In the
odd-number weeks, her lessons were each day from 8:35 a.m. to
9:55 a.m. In the even-number weeks, her lessons were each day
from 10:05 a.m. to 11:35 a.m. According to Exhibit A-19, Navjot
worked 69 hours, 71 hours and 70 hours in the weeks ending
September 8, 15 and 22, respectively. When asked how she could
work about 10 hours each day at Kaleden and go to school in
Oliver each morning Monday to Friday, Navjot stated that, in the
two odd-number weeks (ending September 8 and 22) when her lesson
ended at 9:55 a.m., her mother would drive her up to Kaleden
after school and pick her up about 10 hours later. And in the one
even-number week (ending September 15) when her lessons were
mid-morning starting at 10:05 a.m., her mother would take
her up to Kaleden before school; bring her back to Oliver for her
lesson; take her back to Kaleden for the rest of the day; and
then bring her home in the evening. Navjot's explanation is
simply not believable. Her mother would be making multiple trips
to Kaleden in the week September 8 to 15. Also, no one explained
how Assa operated the fruit stand when Navjot was at school.
(d) If working the fruit stand was
easier work than orchard labour, why did Navjot earn the same
wage as Assa's other workers? At first blush, the amount
$10,020 (see Exhibit A-18) seems like a relatively high labour
overhead to operate a fruit stand by the side of a highway from
July 1 to October 20, 2001.
(e) Exhibit A-23 proves that the
two cheques which Assa issued to Navjot (see Exhibit A-20) were
cashed on November 13 and November 21, but there is no
documentary evidence to prove who cashed the cheques; in whose
account were the cheques deposited; and whether there were any
payments out of the account soon after the deposits. There are no
documents to prove when Assa remitted the source deductions for
Navjot.
(f) Exhibit R-4 and the oral
testimony of John Sladen (a commercial bee keeper appearing under
subpoena) prove that when Mr. Sladen delivered honey to
Assa's fruit stand ("Red Haven") on July 3, 2001,
the receipt for the honey was signed by Assa's wife Jasvir.
According to Exhibit A-19 (a questionable document), Navjot
worked 10 hours at the fruit stand on July 3, 2001. Also,
Assa had testified that he needed Navjot to work at the fruit
stand because Jasvir did not speak good English.
[28] Having regard to all the surrounding
circumstances, Navjot's claim that she was employed by Assa
from July 1 to October 20, 2001 is not credible and, in
particular, is not supported by any genuine objective documents.
To the extent that Assa and Kuldeep testified in support of
Navjot's claim, I do not believe them. At the commencement of
the hearing, Respondent's counsel moved to exclude the
Appellants as witnesses until they had testified. Appellants'
counsel objected insisting upon their right, as litigants, to
remain in Court. I upheld the objection of Appellants'
counsel but expressed the caution that the weight to be attached
to the evidence of subsequent witnesses may be affected by their
continued presence in Court through the proceedings. All of the
Appellants remained in Court throughout.
[29] Navjot was the last Appellant to
testify. She was 21 years old at the time of the hearing and
speaks excellent English. She had heard the testimony of Assa and
her father, Kuldeep. She knew what she had to say in order to be
consistent with their prior testimony and she said it. I
concluded that she was not a believable witness. The appeals of
Navjot and Assa are dismissed for the period July 1 to October
20, 2001.
Signed at Ottawa, Canada, this 2nd day of September, 2004.
Mogan J.
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