Date: 19971103
Docket: 96-1675-UI
BETWEEN:
CHANTAL LEBRUN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
LES ENTREPRISES DE PÊCHE ERIC-CINDY INC.,
Intervener.
Reasons for Judgment
Cuddihy, D.J.T.C.C.
[1] This appeal was heard at Sept-Îles, Quebec on
October 2, 1997.
I - Appeal
[2] The appellant is appealing a decision of the Minister of
National Revenue ("the Minister") dated June 11,
1996, according to which the employment held during the periods
at issue, from April 9 to July 7, 1990, April 7 to
June 15, 1991, April 23 to June 27, 1992,
April 20 to July 3, 1993, April 17 to
July 16, 1994 and April 16 to July 22, 1995, with
the payer Steve Noël and Les Entreprises de Pêche
Eric-Cindy Inc. (hereinafter referred to as
"Eric-Cindy"), was not insurable within the
meaning of the Unemployment Insurance Act ("the
Act"), since during those periods the appellant and the
payer were not bound by a contract of service within the meaning
of s. 3(1)(a) of the Act.
II - Summary of facts
[3] The respondent set out the facts on which he based his
decision in his Reply to the Notice of Appeal. Paragraph 6
of his Reply reads as follows:
[TRANSLATION]
(a) Steve Noël, the appellant's de facto spouse, was
owner and master of a 45-foot fishing boat used for crab
fishing.
(b) Steve Noël operated an independent fishing
business until March 1993.
(c) In 1990 and 1991 Mr. Noël sold his crabs to the
buyer "Les Fruits de Mer Côte-Nord Inc."
(hereinafter referred to as
"Côte-Nord").
(d) In 1992 Mr. Noël sold his crabs to the buyer
Poséidon Inc.
(e) In March 1993 Mr. Noël decided to create a
corporation known as "Les Entreprises de Pêche
Eric-Cindy Inc." (hereinafter referred to as
"Eric-Cindy").
(f) Eric-Cindy's shareholders were:
- Steve Noël, with 61 percent of the shares
- The appellant, with 39 percent of the shares
(g) Steve Noël then transferred his fishing business
to the Eric-Cindy corporation.
(h) In 1993 Eric-Cindy sold its crabs to the buyer
Poséidon Inc.
(i) In 1994 and 1995 Eric-Cindy sold its crabs to the
buyer Côte-Nord.
(j) Throughout the years at issue the appellant alleges she
rendered services to Steve Noël (in 1990, 1991 and
1992) and Eric-Cindy (in 1993, 1994 and 1995).
(k) Throughout the years at issue it was the crab buyer who
prepared the appellant's paycheques and issued her records of
employment.
(l) During the periods at issue Mr. Noël or
Eric-Cindy generally hired three fishermen in addition to
the master during the fishing season, and also allegedly hired
the appellant.
(m) The appellant allegedly had to be available to receive a
call from the master of the vessel, who told her the time he
would arrive at the wharf; she had to inform the company which
officially weighed the crab catch and be present at the
weighing.
(n) The appellant alleges she also cleaned up the boat a bit
and ran various errands for Steve Noël or for
Eric-Cindy (groceries and visiting the accountant).
(o) The appellant had no work schedule to meet and it was
impossible for her to quantify her alleged work.
(p) The appellant was home most of the time while waiting for
her spouse's call and alleges she worked 40 hours a week
for the employer.
(q) The appellant received a fixed salary varying between $380
and $745 a week during the periods at issue; she was paid by the
crab buyer.
(r) The appellant's alleged duties did not amount to very
much and Steve Noël or Eric-Cindy did not control
either her alleged working hours or the quantity of her alleged
work.
(s) During the years at issue the appellant allegedly worked
only the minimum number of weeks (between 10 and 14) necessary to
qualify for unemployment insurance benefits.
(t) During the periods at issue no true express or implied
contract of service or apprenticeship, written or oral, existed
between the appellant and her employer, Steve Noël or
Eric-Cindy.
[4] Through her counsel the appellant admitted the facts
alleged in subparagraphs (a) to (e), (g) to (i), (k) and
(q). The facts alleged in subparagraph (f) were admitted
with explanations. The facts alleged in subparagraphs (j)
and (l) to (p) were denied as written with explanations to be
given at the hearing. The facts alleged in subparagraphs (r)
to (t) were denied.
[5] III - Law and analysis
(i) Unemployment Insurance Act definitions
"employment"
"employment" means the act of employing or the state
of being employed . . . .
"insurable employment"
3. (1) Insurable employment is employment that is not included
in excepted employment and 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
. . . .
[6] The burden of proof is on the appellant.
[7] In Sylvie Desroches v. M.N.R.
(A-1470-92), the Federal Court of Appeal discussed
the function of a Tax Court of Canada judge, and I
quote:
However, in the final analysis, as this Court held in
Attorney General of Canada v. Jacques Doucet, it is the
Minister's determination which is at issue, namely that the
employment was not insurable because the applicant and the payer
were not bound by a contract of service. The function of the Tax
Court of Canada judge extended to considering the record and the
evidence in its entirety. Accordingly Marceau J.A., speaking
for the Court, said the following in Doucet:
The judge had the power and duty to consider any point of fact
or law that had to be decided in order for him to rule on the
validity of that determination. This is assumed by s. 70(2)
of the Act and s. 71(1) of the Act so provides immediately
afterwards. . .
The trial judge could go as far as deciding that there was no
contract between the parties.
[8] If there is any doubt in the interpretation it must be
resolved in favour of the taxpayer, and there is nothing to
prevent a taxpayer benefiting from social legislation if the
requirements of the Act are observed. In Attorney General of
Canada v. Ludger Rousselle, a judgment of
October 31, 1990 (124 N.R. 339), Hugessen J.A.
said the following at 340-341:
I do not think it is an exaggeration to say, in light of these
facts, that if the respondents did hold employment this was
clearly "convenience" employment, the sole purpose of
which was to enable them to qualify for unemployment insurance
benefits. These circumstances certainly do not necessarily
prevent the employment from being insurable, but they imposed on
the Tax Court of Canada a duty to look at the contracts in
question with particular care; it is apparent that the
motivation of the respondents was the desire to take advantage of
the provisions of social legislation rather than to participate
in the ordinary operation of the economic forces of the market
place. [Emphasis added.]
[9] The tests which must be analysed have been restated by the
Federal Court of Appeal. In Attorney General of Canada v.
Normand Charbonneau, a judgment of September 20, 1996
(A-831-95), Décary J.A. said the
following, at p. 2 in particular:
The tests laid down by this Court in Wiebe Door Services
Ltd. v. M.N.R.[1] — on the one hand, the degree of
control, the ownership of the tools of work, the chance of profit
and risk of loss, and on the other, integration — are
not the ingredients of a magic formula. They are guidelines which
it will generally be useful to consider, but not to the point of
jeopardizing the ultimate objective of the exercise, which is to
determine the overall relationship between the parties. The issue
is always, once it has been determined that there is a genuine
contract, whether there is a relationship of subordination
between the parties such that there is a contract of employment
(art. 2085 of the Civil Code of Québec) or,
whether there is not, rather, such a degree of autonomy that
there is a contract of enterprise or for services (art. 2098
of the Code). In other words, we must not pay so much attention
to the trees that we lose sight of the forest — a
particularly apt image in this case. The parts must give way to
the whole.
[10] Each case is sui generis. The appellant had to
establish on a balance of probabilities that the Minister's
decision was wrong. Sections 70(2) and 71(1) of the
Unemployment Insurance Act give the Tax Court of Canada
broad remedial powers. These powers enable the Court to resolve
any dispute of a factual nature and to reverse, affirm or vary
the Minister’s determination.[2]
[11] Further, the Act provides insurance for true employment.
That is what Judge Dussault of this Court stated in
Sylvie Desroches v. Minister of National Revenue, a
decision of November 9, 1994 (92-277(UI)), at
p. 5 in particular:
As Judge Lamarre Proulx of this Court emphasized in
Gauthier, “The object of the Act is to ensure true
employment”[3]. It seems to me important on this point to examine the
circumstances as a whole, including the work performed and the
remuneration agreed upon for the purposes of determining whether
there is a true contract of service between the parties. I will
add that the onus is on the appellant to show on a balance of
probabilities that such a contract exists where it is disputed by
the respondent.[4]
[12] The appellant, her spouse Steve Noël,
Eddy Boulay and Martial Lévesque, the
investigating officer, testified at the hearing of the
appeal.
[13] Throughout the years at issue the appellant allegedly
rendered services to Steve Noël (in 1990, 1991 and
1992) and Eric-Cindy (in 1993, 1994 and 1995).
[14] Throughout the years at issue it was the crab buyer who
prepared the appellant's paycheques and issued her records of
employment (Exhibit I-12).
[15] On the records of employment the appellant's
occupation was identified as secretary in 1990, clerk in 1991,
1992, 1993 and 1995 and labourer in 1994.
[16] The appellant's duties and salary were described in
Steve Noël's statement of February 23, 1995
(Exhibit I-2) as follows:
[TRANSLATION]
Chantal Lebrun's function is to run errands, come to
the wharf to check the res-mar [sic] weighing, then
listen to the VHS [sic] radio and, most importantly, be
available at all times in case I need anything. From 1990 to 1994
I increased her salary, that is, the salary of
Chantal Lebrun, from $380 to $745 because she had better
unemployment as a result, and also because I had the means to pay
her.
[17] In a second statement supplied to the respondent
(Exhibit I-3) on September 19, 1995
Steve Noël explained the change in the appellant's
salary as follows:
[TRANSLATION]
In this year, 1995, my spouse Chantal Lebrun also worked
for me and as a result of information I received from the
unemployment investigator in the winter of 1995 I decided to
reduce Chantal Lebrun's salary from $745 to $500 a week
so as to meet the insurability criteria of Revenue Canada,
Taxation.
[18] The appellant described her duties in the statement she
gave to a representative of the respondent on February 23,
1995 (Exhibit I-16). I quote certain passages:
[TRANSLATION]
I have worked for Steve Noël since 1990. I do not
fish. I work as a clerk, namely checking unloading, cleaning the
boat, running errands at the master's request when there are
breakdowns or parts to pick up in Sept-Îles or
elsewhere, and telephoning Resmar to tell them the time the boat
is returning. This has been the case every year since 1990. I am
paid a fixed salary. I have two children, a girl aged eight and a
boy aged 12. When I am away it is my mother
(Angéla Lebrun) who looks after them. My work is
generally done at home since I have to be there when Steve calls.
I have not done any paperwork since 1990. . . .
In 1990, 1992 and 1993 the crew consisted of
Steve Noël, Julien Bisson, Eddy Boulay and
myself. The fishermen are paid a percentage and I am paid a fixed
salary.
In 1991 the crew members were Steve Noël,
Julien Bisson, Eddy Boulay,
Gisèle Lapierre, Darcy Noël and me.
Gisèle tried fishing but was seasick. . . .
In 1994 the crew members were Steve, Eddy Boulay,
Julien Bisson, Steve's brother
Jean-Yves Noël, and myself. I do not know why he
hired an additional person. When we were unable to get all our
unemployment stamps Steve arranged to have us do a big job like
painting the boat inside and outside. The boat is made of
fibreglass, 45 feet long, and it is not the entire crew
. . . it depends on each person's weeks. In my case
also, when I do not have all of them I paint, wire pots and so
on. . . .
For about two years — I do not know the exact
date — it has not been Eric-Cindy but Les
Entreprises Eric-Cindy, and from that point on I became a
shareholder with 39 percent of the shares and
Steve Noël had 61 percent; that is also when I
became Steve Noël's de facto spouse. I therefore
have powers to sign and do business at the Caisse.
I had a salary increase of $120/week between the 90 and 91
seasons because I was paying my mother to look after my
children. . . . In 1992 I had an increase of $50/week
and in 1993 and 1994 I was at $745/week because I had discussed
this with Steve; as I had shares I paid myself this salary.
I work about 40 hours a week as I have to be available at
the house for calls. The fishing is solely for crab and this has
been the case since 1990. . . .
[19] At the hearing Steve Noël explained that the
appellant was hired as a clerk, prepared food for the crew, had
to be at home to take calls from the boat in emergencies, had to
go to the wharf for the weighing of the catches, had to wash the
dishes and do the cleaning after each trip, had to clean the
boat's hold every weekend, had to take documents to the
accountant if necessary, had to telephone the fuel supplier for
an appointment at the wharf to refuel, had to drive one of the
fisherman's helpers home several kilometres from the wharf
after work, had to go to Sept-Îles once a week and
had to pay the bills and shop for groceries each week.
[20] In cross-examination Steve Noël said that he
adjusted the appellant's salary because [TRANSLATION]
"the fishermen's salaries increased". He stated
that in 1993 and 1994 the appellant received a salary increase
[TRANSLATION] "because she had been on the job for several
years, income from fishing was good and everyone benefited".
He also stated that the appellant's salary had been
determined [TRANSLATION] "in accordance with our
circumstances". In short, he stated that the appellant
worked [TRANSLATION] "as many hours as a fisherman's
helper, or more, and they work nearly 12 hours a
day".
[21] The appellant explained her duties. Briefly, she said
that she was generally at the wharf from noon to 3:00 p.m.,
had to go to the accountant's at the end of the month, went
to Sept-Îles once or twice a week, prepared food for
the fishermen, drove the fisherman's helper Eddy Boulay
home after his day's fishing, cleaned the boat every day,
cleaned and disinfected the hold of the boat once a week,
arranged an appointment with the fuel supplier to refuel the
boat, bought groceries, she went to the bank once a week and went
to the Le Marin shop once a week.
[22] The respondent assessed the appellant's duties and
salary based on the statements made by the persons concerned. At
the hearing the appellant added that her duties included
preparing the fishermen's meals, driving one of the
fisherman's helpers home, arranging fuel deliveries and
running other errands.
[23] With these additional facts, was it proven on a balance
of probabilities that an insurable contract of service
existed?
[24] The salary must be determined based on with the services
rendered. It must also generally correspond to what is paid for
comparable duties in the marketplace.
[25] The appellant's duties were related primarily to the
boat’s activities. It can be seen from the documents from
Fisheries and Oceans Canada (Exhibits I-4 to
I-12) in particular that the boat made 25 trips in
1992, 31 in 1993, 44 in 1994 and 41 in 1995. According to the
record of employment (Exhibit I-12) and a claim for
benefit by the appellant (Exhibit I-17), she worked
six days a week for a total of 40 to 50 hours and did so for
all the consecutive weeks indicated in the record of employment
(Exhibit I-12). According to these documents the
appellant performed her duties for 78 days in 1990,
60 days in 1991 and 1992, 66 days in 1993, 78 days
in 1994 and 84 days in 1995. However, if the boat did
41 trips in 1995 was the appellant's presence necessary
on the other 43 days when fishing did not take place? If the
fishermen and the boat did not go out, there would not seem to
have been any need to prepare meals, listen to the radio, arrange
refuelling appointments, weigh the catch or drive the
fisherman's helper home. That would be true for all the years
from 1990 to 1995. Though we did not have the information on
trips for 1990 and 1991 the appellant did not show for those two
years that the boat went to sea every day. Further, for 1991
Steve Noël worked from April 13 to May 5,
after which he was in hospital for 10 days and convalesced
at home for a month, or until the season was over. Did he take
calls at home? How many fishing trips were made in 1990 and 1991?
This was not shown by the appellant, but the average proven for
the other years would support a conclusion that fishing did not
take place six days a week in 1990 or 1991.
[26] Quantifying a person's work is always a difficult and
delicate matter. It is necessary to consider the kind of
employment, the tools used, the environment in which the work is
done, the volume of business, the description of duties, the
number of employees and so on: in short, an attempt must be made
to estimate the volume of work required so as to determine the
time necessary to do it in relation to the salary paid.
[27] The estimated volume of work done by the appellant does
not support a conclusion that she could have spent 40 to
50 hours or more on it in a six-day week.
[28] Nor was the salary determined in accordance with
comparable duties in the marketplace. In his statement to the
insurer (the respondent), Steve Noël mentioned that he
increased the appellant's salary so that she would have
better unemployment. In court he gave another explanation that
seemed to indicate he also wanted the appellant to share in the
profits in good years. He did not really justify the differences
in salary from one year to another.
[29] The Minister was right to conclude that a genuine,
insurable contract of service did not exist.
IV - Decision
[30] The appeal is dismissed and the Minister's decision
affirmed.
"S. Cuddihy"
D.J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 13th day of August
1998.
Stephen Balogh, Revisor
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