[OFFICIAL ENGLISH
TRANSLATION]
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Citation: 2003TCC682
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Date: 200301113
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Docket: 2003-210(EI)
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BETWEEN:
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NOËLLA POIRIER,
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Appellant,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent,
and
SYLVAIN DERASPE,
Intervenor.
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REASONS FOR
JUDGMENT
Paris, J.
[1] This
is an appeal of a determination by the Minister of National Revenue (the
"Minister") dated November 29, 2002, that the Appellant's employment
from April 30 to June 2, 2001, with Sylvain F. Deraspe (the "Payor")
was not insurable under the Employment Insurance Act (the "Act")
because it was excluded under paragraph 5(2)(i). In accordance with
subsection 5(3) of the Act, the Minister found that the Appellant and
the Payor would not have entered into a substantially similar contract of
employment if they had been dealing at arm's length.
[2] The
facts relied upon by the Minister in reaching that decision are set out in
paragraph 10 of the Reply to the Notice of Appeal filed by the Respondent,
which are as follows:
[TRANSLATION]
(a) the payor was
working as a fisherman's helper on the boat of his father;
(b) in 2001, the
payor took part in the lobster fishing season, which ran from April 30 to July
14;
(c) the payor
went fishing six days a week—he would leave home on Sunday evening and would
return only the following Saturday evening;
(d) the payor was
the spouse of Jeanne D'Arc Poirier;
(e) Jeanne D'Arc
Poirier is the appellant's sister;
(f) during the
period at issue, Jeanne D'Arc Poirier was pregnant and had to stay in bed
because of gestational diabetes;
(g) the appellant
was hired as a nanny for her sister's and the payor's three children;
(h) the appellant's
tasks consisted of taking care of the children, doing the housework, washing
the clothes and preparing meals;
(i) the
appellant did not have a fixed schedule and worked seven days a week;
(j) the
appellant received a fixed salary of $280 a week;
(k) the appellant
was given room and board;
(l) the
appellant's sister gave birth to a fourth child on June 12, 2001;
(m) on or about
June 14, 2001, the appellant's sister came back home;
(n) according to
the appellant, it took her sister about three weeks to recover from her
pregnancy;
(o) on April 16,
2002, in his statement signed at Human Resources Development Canada
(hereinafter HRDC), the payor said that he had stopped paying the appellant on
June 2 because he did not have the means to pay her;
(p) on April 10,
2002, in her statement signed at HRDC, the appellant stated that she had worked
for her sister from the end of April to mid-July 2001;
(q) the appellant
stayed at the payor's house until September 2001, without paying for room and
board;
(r) on July 17,
2001, the payor gave the appellant a record of employment, which indicated the
following: April 30, 2001, as the first day of work and June 2, 2001, as the
last day of work; 175 insurable working hours; and total insurable earnings of
$1,400;
(s) the appellant
continued to render services to the payor after the period at issue, without
declared earnings, while receiving employment insurance benefits at the same
time;
(t) the
appellant's record of employment does not reflect reality with respect to the
hours and weeks the appellant actually worked;
(u) the period
that the appellant purportedly worked is not consistent with the period actualy
worked.
[3] The
Appellant, the Payor and the Payor's wife (the Appellant's sister) gave evidence
on behalf of the Appellant, and Mr. Jean-Claude Favron, an investigator with
the Canadian Customs and Revenue Agency (CCRA), was called on behalf of the
Respondent.
[4] The
evidence showed that the assumptions set out in subparagraphs 10(a), (b), (d),
(e), (f), (g), (h), (j), (k), (l), (m), (p) and (r) were true. The fact that
the Appellant worked for her brother-in-law between April 30 and June 2 and was
paid for her services is not in dispute. What was also accepted is that the
Appellant performed the work for the Payor under a contract of service.
[5] For
the most part, the assumptions that were disputed revolve around whether the
Appellant continued to work full time for her brother‑in‑law after
June 2 until July 14 without being paid for those services. On this point, the
Appellant testified that when she was hired by her brother-in-law, she had been
told that she would be working for only five weeks because that was all he
could afford and this would cover the period of time until his wife's expected
due date.
[6] When
the five weeks were over, Mr. Deraspe told her she was laid off. She was
however allowed to continue living at her sister's and brother-in-law's home
because she was unable to find other accommodations. She testified that, at the
time, her brother Michel was also living at the house and that her brother Leo
arrived around the beginning of June. When she stopped working as a housekeeper
for her brother-in-law, Michel took on some of the household tasks and her
sisters who lived nearby performed others. Also, Sylvain Deraspe was at home
more often after June 2, partly because of his wife's difficulties with her
pregnancy and also because his work in the lobster fishery was less intense
after May. The Appellant said that after June 2, she did far less housework
than when she was working, although she did help out with dishes and laundry.
She also acknowledged looking after the new baby at night a few times a week.
[7] The
Appellant was also questioned at length regarding her living arrangements at
her sister's and brother-in-law's and regarding the payment of room and board
during that period. The Appellant's own testimony on this point was rather
vague.
[8] Jeanne
D'Arc Poirier, the Appellant's sister, testified that her husband arranged to
hire her sister (the Appellant) to take care of her children and do the
housework during the last five weeks of her pregnancy. Although the couple's
financial situation was tight, they were able to set aside enough money to hire
the Appellant for five weeks, from the start of the lobster fishing season
until her due date. She needed assistance because she was suffering from
gestational diabetes and was required to spend a lot of time resting. She knew
she would need help while her husband was away fishing. The Appellant worked
until June 2 as agreed but stopped working thereafter because Ms. Poirier and
her husband could not afford to pay her after that period. Other family members
came to assist Ms. Poirier with the housework both before and after the
birth of her child.
[9] At
that time, the Appellant and her brother Michel were staying with the couple at
the house and he helped out by looking after the older children. The
Appellant’s and Ms. Poirier's sisters also came over to help and, some time
later, another brother came to stay. At this time, Sylvain Deraspe also came
home more often from fishing. Ms. Poirier said the Appellant also helped out
after June 2 but to a far lesser extent than before that date.
[10] The evidence of Jeanne D’Arc Poirier was largely confirmed by her
husband. In particular, he stated that family members helped out from June 2
until he finished fishing in July and that, after June 2, he was able to be
home more often to help his wife.
[11] I find both Jeanne D'Arc Poirier and Sylvain Deraspe to be credible
witnesses. Their testimony was clear, consistent and forthright and was not
contradicted in cross-examination.
[12] The issue in this case is whether the Minister made any error in the
exercise of his discretion pursuant to subsection 5(3) of the Act. His
finding was based largely on the assumption that the Appellant continued to
work for the Payor after June 2 until July 14 without receiving any pay. This
in turn was based on an answer the Appellant gave in an interview with Mr.
Favron that she worked for the Payor for the entire fishing season (from the
end of April until mid-July) and took care of household tasks during that
period.
[13] With respect to the Appellant’s statement to Mr. Favron (referred to
in subparagraph 10(p) of the Reply), it appears to me that the Appellant was
not being precise as to the dates she worked. In her evidence before this
Court, the Appellant was often confused about dates and unable to recall with
any certainty specific events. Another example of the Appellant’s confusion
regarding dates can be found in the notes of the same interview, which show a
clear error regarding the year in which the Appellant worked for a different
employer (Dixie Lee). Overall, I give little weight to the Appellant’s
testimony except to the extent that it is corroborated by Sylvain Deraspe and
Jeanne D’Arc Poirier.
[14] I note that, at the time of the interview, Mr. Favron did not raise
with the
Appellant the discrepancy between the Appellant’s record of employment and
her statement nor did he ask her to explain it then. The interview with the
Appellant was held almost one year after she worked for the Payor, and it
covered three different contracts of employment for three different employers.
I also note that there is no evidence that, during his interview with Mr.
Favron, the Payor stated that the Appellant had worked after June 2.
[15] Having regard to all of the evidence, I am satisfied that the
Appellant did not continue to work for the Payor after June 2 to the full
extent that she had before that date. I find that the tasks that she did carry
out were minor in nature and that she was not directed to do these tasks by the
Payor. In this respect, I accept the evidence of the Payor and his wife. Each
of them stated that the tasks that had been carried out by the Appellant until
June 2 were largely taken over by other family members after that date. Any
work done by the Appellant after June 2 was done to help out a family member,
in much the same way as in Théberge v. M.N.R., [2002] F.C.J. No.
464 (F.C.A.), and should not have been considered by the Minister in his
assessment of the conditions of the Appellant’s employment with the Payor.
[16] The Minister's error on this point went to the heart of the exercise
of his discretion and, therefore, I find that the
Minister did not exercise his discretion in accordance with the law.
[17] As such, I am required to proceed to the
second stage of the inquiry, which consists of a review of the evidence to
determine if a substantially similar contract of employment would have been
entered into between the Appellant and the Payor had they been dealing at arm's
length.
[18] The Payor testified that the Appellant’s pay
was determined after he called the Provincial Labour Standards Branch to find
out what rate of pay was required for a housekeeper. This evidence was not
challenged on cross-examination. He also stated that, had the Appellant been
unavailable for the job, he would have hired someone else and that he and his
spouse had hired a housekeeper in previous years. The evidence also indicates
that the Appellant’s hours of work and the duration of the contract were
reasonable in light of the Payor's needs. In short, I find that the terms and
conditions of the Appellant’s work for the Payor were not affected by the
non-arm’s length relationship of the parties.
[19] For all these reasons, I am satisfied that the Appellant and the Payor
would have entered into a substantially similar contract of employment had they
been dealing at arm's length.
[20] The appeal is therefore allowed.
Signed at Ottawa, Canada, this 13th day of
November 2003.
Judge
Paris
Translation
certified true
on this 21st day of
November 2003.
Sophie Debbané,
Revisor
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