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Citation:2003TCC496
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Date: 20030722
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Docket: 2002-4316(EI)
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BETWEEN:
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SWARN SINGH BOPARAI,
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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
MacLatchy,
D.J.
[1] This
appeal was heard at Toronto, Ontario, on June 19, 2003.
[2] The
Appellant appealed a ruling to the Minister of National Revenue (the
"Minister") for the determination of the question of whether or not
he was employed in insurable employment while engaged by Navi Auto Services
& Sales Ltd., the Payer, during the period in question, from July 28, 2001
to May 24, 2002, within the meaning of the Employment Insurance Act (the
"EI Act").
[3] By
letter dated August 30, 2002, the Minister informed the Appellant and the Payer
that it had been determined that the Appellant was not employed in insurable
employment during the period in question for the reason that he and the Payer
were not dealing with each other at arm's length pursuant to
paragraph 5(2)(i) of the EI Act.
[4] The
Minister exercised his discretion under paragraph 5(2)(i) of the EI
Act and decided that the contract of employment would not be deemed to be
at arm's length.
[5] Certain
relevant facts were agreed to by the parties, as follows:
(a) Sukhwinder Singh
is the sole shareholder of the Payer that operates an auto repair and service;
(b) the Appellant is
the natural brother of the sole shareholder of the Payer;
(c) the Appellant was
hired as an auto mechanic helper as he was an unlicensed mechanic although he
had some auto repair experience;
(d) the Appellant
worked with his brother, the same hours, at the Payer's place of business;
(e) the Appellant
worked at a rate of $600 per week for his first week of employment and
thereafter at the rate of $450 per week for approximately 40 hours per week;
all rates of pay having been set by the Payer;
(f) the Appellant was
paid in cash on most occasions except for 5 cheque payments;
(g) there were no
records of hours worked, receipts received for monies paid to the Appellant and
none of the documentation submitted supported the evidence given.
[6] It
was accepted that as the sole owner of the Payer, Sukhwinder Singh and the
Appellant are brothers and clearly related pursuant to the provisions of the Income
Tax Act. The EI Act provides that if the parties are related, they
are deemed to deal with each other at arm's length if the Minister 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.
[7] Evidence
was presented on behalf of the Appellant through the examination of the sole
shareholder of the Payer. His evidence was less than precise and in most
instances during cross-examination the witness was unsure why his testimony
often did not agree with filings made previously by him with various agencies.
The record of employment indicating commencement date of employment differed
from his evidence given in chief. The rate of pay of the Appellant for the
period he was stated to have worked, did not agree with the record of
employment. In all instances where his testimony differed from the record of employment
or T4 slips, he blamed his accountant or his memory.
[8] The
Payer set the rate of pay that the Appellant was to receive with no
consultation with the latter. The hours were set by the Payer but not recorded
and loose evidence was given that if there were extra hours worked by the
Appellant, then he was paid extra notwithstanding that there was no evidence
presented to support any such payments.
[9] The
Appellant was apparently terminated for lack of work. The Appellant stated that
he would not work part time for the Payer notwithstanding the fact that he
could not get other employment and had no other source of income.
[10] It is the Appellant's responsibility to present to this Court evidence
to support his appeal in an effort to convince this Court that the decision
made by the Minister was incorrect. No such evidence was forthcoming.
[11] In an attempt to give the Appellant benefits under the EI Act,
the Minister exercised his discretion as provided in said Act but was
not satisfied that the conditions stipulated in subsection 5(3) had been met
and that the Appellant and the Payer would not be deemed to be dealing at arm's
length. The circumstances of the employment were vague at best. No records of
hours of employment or records of payments of wages paid were available or in
fact made. The method of payment in cash was most unusual and the rate of
remuneration was set by the Payer as it saw fit. There were no terms and
conditions of the employment presented to this Court. The employment lasted
until the Payer felt he wanted to terminate the Appellant although there did
not appear to be any significant reason why termination was warranted.
[12] The Appellant indicated that after termination he looked for some
employment but was more concerned with taking a course to become a truck driver
and with constructing a basement apartment in his home as a further source of
revenue. Part-time employment was apparently available with the Payer but the
Appellant was not prepared to be paid less than he had received previously from
the Payer even though he would have no income whatsoever.
[13] It appeared clear to this Court that based on the evidence produced by
the Appellant, the Minister could come to no other conclusion than that the
parties were not dealing with each other at arm's length.
[14] The appeal is dismissed and the decision of the Minister is hereby
confirmed.
Signed at Toronto, Ontario, this 22nd day of
July 2003.
MacLatchy,
D.J.
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