|
Citation: 2003TCC133
|
|
Date: 20030331
|
|
Docket: 2001-4236(EI)
|
|
|
|
BETWEEN:
|
|
|
|
BUANDERIE BEAUDOIN INC.,
|
|
Appellant,
|
|
and
|
|
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent.
|
REASONS FOR JUDGMENT
Tardif,
J.T.C.C.
[1] This
appeal is from an October 10, 2001 decision by the respondent that the
work performed by Sylvie Daneau for Buanderie Beaudoin inc., the appellant
company, during the period from June 1, 2000 to
May 29, 2001 constituted insurable employment.
[2] The
assumptions of fact on which the decision was based were the following:
(a) the appellant
company was incorporated on November 11, 1999;
(b) the
shareholders in the appellant company are Michel Beaudoin and Fiducie Michel
Beaudoin, holding 100 Class D voting shares and 10 Class A
voting shares respectively;
(c) the appellant
company operates a business specializing in the industrial and commercial
laundering of sheets and towels for motels, restaurants and garages;
(d) the
business's annual sales figures amount to approximately $550,000;
(e) the
business's hours of operation are from 8:00 a.m. to 5:30 p.m., Monday
to Friday;
(f) in addition
to Michel Beaudoin and the worker, during the period at issue the business had
11 employees, three of whom were travelling representatives;
(g) the
business's customers are located mainly in the municipalities of Victoriaville,
Drummondville and Sherbrooke;
(h) Michel
Beaudoin is the worker's spouse;
(i) Beaudoin
invested $100,000 of his own money in the business and financed the rest
by means of a loan in the amount of $300,000;
(j) the worker's
main duties were to do all appellant company's bookkeeping, including follow-up
on accounts payable and receivable, invoicing by computer, remittance of
provincial and federal taxes, and payment of suppliers;
(k) in addition,
in her spouse's absence the worker looked after the routine management of the
business;
(l) on average,
Michel Beaudoin spent 75 per cent of his time travelling for the
purposes of customer service;
(m) during the
period at issue, the worker worked 40 hours per week;
(n) the worker
was paid $500 per week.
[3] Ms Daneau,
representing the appellant company, admitted the truth of paragraphs (a), (c)
to (h), and (k) to (n).
[4] After the oath was
administered to Ms Daneau, I explained to her that she had the burden of
proof, adding that in order to discharge that onus she had to adduce material
evidence establishing that during the period at issue she enjoyed conditions of
employment largely shaped by the non-arm's length relationship between herself
and her spouse, who controlled the business.
[5] In other words, she
had to establish that the work done for the appellant company was performed
much differently from the way in which it would have been performed by a third
party.
·
Were
her wages higher, or lower, than those that should have been paid to a third
party performing the same work?
·
Did
she enjoy, or was she deprived of, conditions of employment or advantages to
which a third party would not have had access?
·
Were
the terms and conditions governing the performance of the work comparable, or
not, to those that would have existed if the work had been performed by a third
party?
[6] The only
representations by Ms Daneau were to the effect that, under her marital
regime (partnership of acquests), she was a joint investor in the appellant
company and therefore had a chance of profit and a assumed risk of loss
depending on the business's success or lack of success.
[7] I then reminded
Ms Daneau that the evidence should focus on the terms and conditions
governing the performance of her work for the appellant company, so that
comparisons could be drawn with work performed by a theoretical third party
hired to assume the same responsibilities.
[8] Although the issue
of investment could certainly have affected the employment contract, simply
investing or being wholly or partly responsible for the financing was not in
itself material in excluding the work from insurable employment.
[9] I told
Ms Daneau that those aspects were secondary unless her financial
participation directly affected the employment contract between herself and the
appellant company.
[10] Depending on the
terms and conditions governing the performance of the work, even holding shares
in a company does not exclude work from insurable employment. In this case,
Ms Daneau was not a shareholder and her financial involvement resulted
from her matrimonial regime and status. Furthermore, her status did nothing to
change the situation, since Parliament itself has expressly provided that any
work performed by a person whose spouse controls the entity for which the work
is performed is excluded from insurable employment.
[11] Not only did
Ms Daneau not elaborate on this nonetheless basic point, but she also
spontaneously admitted that a third party would have performed the same work in
the same way and under the same conditions of employment, thus confirming that
the decision being appealed from was justified.
[12] Since I believed
that Ms Daneau had not understood the repercussions of her admissions, I
once again explained to her, using examples, what she had to establish in order
to show that her appeal was justified.
[13] Ms Daneau then
simply added that she had no special representations to make and that her only
concern was to point out that she had invested in the business and therefore
accepted all the future consequences, both favourable and unfavourable, of her
investment. As far as the day-to-day work was concerned, it had been and was
performed as any other person the appellant company might have hired would have
performed it.
[14] In order for this
appeal to have succeeded, the evidence would have had to establish that the
work performed during the period at issue was done differently and under
special conditions of employment: did the worker enjoy advantages, or was she
subjected to disadvantages, in performing her work?
[15] Not only was such
evidence not adduced, but Ms Daneau also stated that she assumed her
responsibilities practically as any other person the appellant company might
have assigned would have performed it.
[16] Ms Daneau's statements
that her status had no effect on the way in which she performed her work, and
that she enjoyed no special advantages and was subjected to no disadvantages,
confirm that the decision being appealed from was justified. In order for this
appeal to have succeeded, the evidence would have had to establish that the
worker's employment contract was in no way comparable or similar to that of a
person dealing with the employer at arm's length.
[17] In the absence of
such evidence, I must confirm that the decision being appealed from was
justified and dismiss the appeal.
Signed at Ottawa,
Canada, this 31st day of March 2003.
J.T.C.C.
Email this Content