[OFFICIAL ENGLISH TRANSLATION]
Date: 20010821
Docket: 2000-3084(EI)
BETWEEN:
PIERRE VÉZINA,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard at
Montréal, Quebec, on May 29, 2001.
[2] In a letter dated May 16, 2000,
the Minister of National Revenue (the "Minister")
informed the appellant of his decision according to which his
alleged employment with 2641-8160 Québec Inc., the payer,
for the period from September 6, 1991, to February 14, 1992, was
not insurable because it did not meet the requirements of a
contract of service.
[3] Subparagraph 5(1) of the
Employment Insurance Act reads in part 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;
...
[4] The burden of proof is on the
appellant. He has to show on the balance of evidence that the
Minister's decision is unfounded in fact and in law. Each
case stands on its own merits.
[5] In making his decision, the
Minister relied on the following facts, which the appellant
admitted, denied or had no knowledge of:
[TRANSLATION]
(a) The payer
carried on a home renovation business from 1990 to 1992.
(admitted)
(b) Pierre
Chaîné was the sole shareholder of the payer. (no
knowledge)
(c) On September 30,
1992, Pierre Chaîné declared personal bankruptcy;
the payer did not declare bankruptcy but has been inactive since
that date. (no knowledge)
(d) The payer
carried on its business in the Shawinigan and Grand-Mère
area. (no knowledge)
(e) The appellant
claims that he worked for the payer during the period at issue,
although in fact he rendered no services to the payer.
(denied)
(f) The
appellant claims that he worked for the payer through Robert
Dion, a project manager for a Longueuil home renovation firm,
which allegedly did business with the payer in 1991 and 1992,
whereas the payer conducted its business in the Mauricie region.
(denied)
(g) The appellant
claims that he only did renovations whereas Mr.
Chaîné claims that the appellant devoted between 75%
and 80% of his time to seeking contracts for the payer.
(denied)
(h) All the
documents concerning Mr. Chaîné's personal
bankruptcy and the payer's company were destroyed by the trustee
in bankruptcy. (no knowledge)
(i) The
appellant no longer remembers any details concerning the work
that he allegedly did for the payer during the periods at issue.
(denied)
(j) The
appellant does not remember any client, any place where he worked
or any particular event concerning his alleged work for the payer
during the period at issue. (denied)
(k) The appellant
claims that he was paid in cash during this period, whereas he
reported no employment income on his 1992 tax return.
(denied)
[6] The appellant was the only one who
testified in support of his claims.
[7] The appellant asserted that Robert
Dion asked him whether he wanted to work in home renovation.
Robert Dion allegedly told him that he was the manager of Pierre
Chaîné, the sole shareholder of the payer.
[8] The appellant said that he had
experience in renovating private residences. He said he worked on
Montréal's South Shore for a year or a year and a half,
between 37 and 42 hours a week, and received a weekly salary of
$700, paid in cash every Friday or Saturday.
[9] The appellant filed in evidence a
record of employment (Exhibit A-1), indicating that the period of
employment was from September 6, 1991, to February 14, 1992. The
record of employment was signed by Pierre Chaîné.
This document states the name of Pierre Dumont as a
reference. The appellant admits that he completed his 1991 tax
return and received a T4 for that year.
[10] He asserted that he was informed by
Jean-Claude Roy, an appeals officer with the Canada Customs and
Revenue Agency, that there had been fraud in the payer's
operations.
[11] On cross-examination, he stated that he
did not remember the names of the clients or the places where he
supposedly worked during the period at issue. He admitted that he
was a self-employed worker prior to the period at issue.
[12] The appellant admitted the contents of
Exhibit I-1, a decision of the board of referees dated November
22, 1999, reconsidering its decision dated August 24, 1999. In
the board of referees' decision, it was noted that the
Commission found that the T4 [TRANSLATION] "was falsified since
Revenue Canada states ... that for the 1991 taxation year,
this employer issued only two T4s neither of which was for
Pierre Vézina .... Moreover, Revenue Canada states
... that the company that issued the record of employment
had reported no income or activity since March 1991..."
[13] The evidence consists of the testimony
of Laval Rhainds, a former investigator with Human Resources
Development Canada, concerning the claims for
unemployment/employment insurance benefits, and testimony
of Jean-Claude Roy, the appeals officer.
[14] In his investigation, Laval Rhainds
obtained statements from three people who claimed unemployment
insurance benefits in 1992 and 1993. The Minister wanted to
produce in evidence the statements obtained from these three
people in April 1997, but counsel for the appellant objected to
their being produced, stating that it was hearsay. The Court took
these objections under reserve.
[15] Counsel for the Minister claimed that
the statements could be introduced in evidence, since the
Minister is required to put before the Court the facts on which
he based his decision. Counsel for the Minister relied on the
decision of the Honourable Judge Garon (as he then was) of this
Court in Duquette et al. v. The Queen, 93 DTC 846. In that
case, Judge Garon referred to the decision in Johnston v.
M.N.R., 3 DTC 1182, in which former Chief Justice Cardin of
this Court allowed hearsay evidence.
[16] Judge Garon, relying on the
Johnston decision, supra, expressed himself as
follows:
I see no merit in this objection of the Appellant. This
judgment clearly indicates that 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.
[17] In light of this case law, I overrule
the appellant's objection and therefore allow these statements to
be filed in evidence. Counsel objected to filing the records of
employment of the three persons and the report
of Jean-Claude Roy, the appeals officer. These
objections are overruled for the reasons cited above.
[18] These three persons admitted that the
records of employment were false and that they had never worked
for 2540-4864 Québec Inc. or 2440-8627 Québec
Inc. in 1991, 1992 and 1993. In two of the three records of
employment, the name of Pierre Dumont is indicated as the person
to contact for more information. These individuals allegedly paid
amounts of $2,000 and $3,000 to obtain the false records of
employment.
[19] Jean-Claude Roy, the appeals officer,
stated that he had had telephone conversations with Pierre
Chaîné on January 10 and 25, 2000, and that he had
met with him on February 2, 2000.
[20] Pierre Chaîné allegedly
told him that he was the sole shareholder of 2641-8160
Québec Inc., that the company had been in operation from
1990 to 1992 and that he had two to three employees. He allegedly
told him that Pierre Vézina was one of his employees
and that his duties primarily consisted of seeking contracts and,
occasionally, doing some renovation work. Between 75% and 80% of
Pierre Vézina's work consisted of finding contracts.
[21] At the meeting of February 2, 2000,
Pierre Chaîné allegedly told Jean-Claude Roy that
Robert Dion, Michel Dumont and Pierre Vézina were
people involved in home renovation in the Longueuil area. The
activities of Pierre Chaîné, his wife and his son
were limited to the Shawinigan and Grand-Mère area during
the period at issue. He said he was put in contact with Robert
Dion, Michel Dumont and Pierre Vézina through the
accountant, Pierre Dumont, the brother of Michel Dumont.
[22] Pierre Chaîné stated that
the group of workers from Longueuil managed their projects by
themselves, invoiced their clients and paid their own salaries in
cash.
[23] Pierre Chaîné stated that
he was "tricked" by the Longueuil group and by Pierre Dumont. The
debts left by the Longueuil group allegedly caused the bankruptcy
of Pierre Chaîné's business.
[24] In his report after his meeting with
Pierre Chaîné (Exhibit I-3),
Jean-Claude Roy wrote the following:
[TRANSLATION]
· He [Pierre
Chaîné] has no personal knowledge of any of the work
supposedly done by the Longueuil group.
· There is no
evidence of the work allegedly performed by the Longueuil
group.
· There was
no advertising in the newspapers or otherwise.
· Pierre
Chaîné completely relied on the Longueuil group to
manage and carry out the work.
· No client
of the Longueuil group apparently contacted Pierre
Chaîné.
· The
Longueuil group apparently provided their own invoice forms (and
not the invoices of Pierre Chaîné's business).
Pierre Chaîné was the only one to have a stamp to
identify the invoices with the name of his business.
· The
Longueuil group apparently provided its own tools and
vehicles.
· Pierre
Chaîné's firm was supposed to enter into a
partnership with the Longueuil group after the trial period, but
this did not happen.
·
Pierre Chaîné exercised no control over the
Longueuil group.
· It was at
Pierre Dumont's request that Pierre Chaîné signed
the records of employment for the Longueuil group members.
[25] At a meeting with Pierre Vézina
and his lawyer on March 14, 2000, Jean-Claude Roy obtained some
information from the appellant.
[26] The appellant told Mr. Roy that he had
always been the sole shareholder of 147432 Canada Inc. and that
this was a management company. He no longer remembered the kind
of activity carried on by that company or the number of hours
that he devoted to it in 1991 and 1992.
[27] He admitted that he had previously
worked in construction as a self-employed worker. Pierre
Vézina confirmed that the period at issue, namely, from
September 6, 1991, to February 14, 1992, was accurate.
[28] The appellant stated that he was hired
and laid off by Robert Dion, Pierre Chaîné's
manager. He admitted that he did not have a competency card for
the construction trades.
[29] The appellant apparently received a
fixed salary every week and was paid in cash by Robert Dion. He
had no evidence of the remuneration he said he received.
[30] He did not remember any of the clients
or places where he supposedly worked during the period at issue.
He did not remember any anecdotes or special events relating to
the work. He was told verbally about the work to be done. He did
not remember the other workers involved in the work. He thought
that the accountant, Pierre Dumont, that is, Michel Dumont's
brother, might have worked. He apparently worked alone or with
another worker depending on the kind of work to be done.
[31] According to the employers' service of
the Ottawa Technology Centre, there was no registration for the
T4 slips that had apparently been produced in 1991 by 2641-8160
Québec Inc. There were three T4 slips registered for 1992
concerning two individuals (Exhibit I-3):
(1) P. Chaîné (original),
earnings of $9,750
(2) P. Chaîné (amended),
earnings of $9,750
(3) F. Desaulniers (original),
earnings of $2,765.
[32] On January 28, 2000, Pierre Dumont
apparently told the investigator that he had filed T4 slips for
the payer's 1991 and 1992 taxation years and that he had mailed
the whole thing to Revenue Canada, and this contradicts the
information received from the employers' service of the Ottawa
Technology Centre.
[33] On February 3, 2000, Pierre Dumont
stated that (Exhibit I-3):
[TRANSLATION]
-
he had no document concerning Pierre Chaîné's
corporation;
-
he was the one who introduced the Longueuil group to
Pierre Chaîné;
-
he had prepared the financial statements and tax returns for
Pierre Chaîné's company;
-
it was Robert Dion who managed the payer's paperwork and money
for the Longueuil sector;
-
he did not know whether the Longueuil group invoiced under the
name of 2641-8160 Québec Inc. or under their own name.
[34] On February 22, 2000, Pierre Dumont
told the investigator that he could not confirm that the revenues
from the Longueuil group were incorporated into the revenues from
Pierre Chaîné's company.
[35] The investigator, Jean-Claude Roy, said
he received the following information from Robert Dion (Exhibit
I-3):
[TRANSLATION]
Robert Dion told me the following over the telephone on
February 1, 2000:
-
he was the site manager for Pierre Chaîné;
-
the activity was home renovations; the job sites were small;
there were 3 or 4 contracts a week;
-
there were subcontractors and employees to do the work;
-
he knew Pierre Vézina but had not worked with him; he did
not remember much about his work;
-
he did not remember the other workers;
-
he did not remember any particular event occurring during the
period at issue;
-
it was Pierre Chaîné who found the contracts, who
told him where to go and what to do.
At a meeting in the office on February 28, 2000, Robert Dion
told me the following:
-
before the period at issue, he had worked for himself on the
South Shore;
-
during the period at issue, Pierre Chaîné came in
very rarely and relied on him and the clients called him directly
(N.B.: on 2/1/200 [sic], he said that Pierre
Chaîné found the contracts, told him where to go and
what to do);
-
Robert Dion invoiced the clients orally; there were no invoices;
it was he who collected the amounts from the clients; the clients
paid only in cash (no cheques);
-
salaries were all paid in cash;
-
Robert Dion gave the orders to Pierre Vézina for the work
to be done (however, Robert Dion did not know why Pierre
Vézina apparently finished one week after him).
[36] In view of the assumptions of fact
alleged by the Minister, the onus was on the appellant to rebut
those assumptions.
[37] The appellant did not provide any
evidence that he had rendered services to the payer during the
period at issue. He did not remember any clients or the places
where he had rendered any services. He did not remember any
anecdote that he could link with the period at issue.
[38] Pierre Chaîné and Robert
Dion have no recollection of the clients or the places where
services might have been rendered.
[39] Pierre Chaîné stated that
the appellant looked for contracts (75% to 80% of his work) and
was paid a percentage depending on the contracts obtained,
whereas the appellant said that he received $700 per week doing
labour; the record of employment produced in evidence as Exhibit
A-1 indicates "labourer". The appellant has no competency
card to justify this salary.
[40] The appellant told the investigator
that he had been hired and laid off by Robert Dion, whereas
Robert Dion ended his employment one week before the appellant
did. The appellant received orders from Robert Dion but Robert
Dion did not work during the last week.
[41] According to Robert Dion, no invoices
were issued to the alleged clients, and they had all paid in cash
and had never paid by cheque, which is unlikely.
[42] Considering all of the circumstances of
the instant case, namely, the inconsistencies in the information
obtained by the investigator from the people questioned in
meetings in January and February 2000, there could not be a
genuine contract of service. The statements to the investigator
by those people and the appellant in particular were not
contradicted.
[43] The appellant based his appeal solely
on the testimony he gave to the Court. Merely making assertions
is insufficient in the circumstances to establish that there was
a contract of service between him and the payer.
[44] The appeal is dismissed.
Signed at Ottawa, Canada, this 21st day of August 2001.
D.J.T.C.C.
Translation certified true
on this 13th day of March 2003.
Sophie Debbané, Revisor
Case Law Consulted
Elia v. Canada (Minister of National Revenue - M.N.R.),
[1998] F.C.J. No 316
Andrée Carpentier and M.N.R. and Les
Cimentiers R.G. Inc., 94-1387(UI)
Duquette et al. v. The Queen, 93 DTC 841
Paolo Violi v. M.N.R., 77-731 (Tax Review Board)
Patrie c. Canada (ministre du Revenu national -
M.R.N.), [1995] A.C.I. no 1589
Audet c. Canada (ministre du Revenu national - M.R.N.),
[1998] A.C.I. no 913
Hervé St-Amand and M.N.R., 92-972(UI)
Robert Dion and M.N.R., 97-2056(UI)
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