[1] The applicant quit her job at Classic Cars on November 17, 1995. She informed her employer that she was leaving in order to go to work in her husband's business. She applied for employment insurance benefits on November 27, 1995 and collected 42 weeks of benefits. In her application she affirmed that she was not self-employed.

[2] In fact the applicant had on November 9, 1995, while still working at Classic Cars, applied for incorporation of a company, Laserseal Insulating Glass Ltd., of which she was the sole director and officer. She was associated in this business with her husband.

[3] The Commission ruled on February 2, 1998 that she was not entitled to the benefits received because she had during the benefit period been self-employed in the business. It also imposed penalties for 26 false statements on this subject, including the answers on 24 reports cards that she was not working.

[4] The applicant appealed these decisions to a Board of Referees and she appeared before the Board. The Board dismissed her appeal. It held that there was evidence that the applicant was involved in running the business of Laserseal Insulating Glass Ltd. It also rejected the assertion that her involvement was so minor as to bring the self-employment within the exception under subsection 43(2) of the Regulations, that is,"that a person would not normally follow it as a principal means of livelihood". The Board also confirmed the penalties for 26 false statements.

[5] The applicant then appealed to an Umpire. According to her affidavits filed in this Court, the applicant's counsel sought to put before the Umpire evidence as to the minor nature of her involvement in the business and as to the job searches she had made during the benefit period, as well as evidence that the Board had refused to admit evidence of a job search and had thereby denied her for natural justice.

[6] According to the applicant's affidavit (and there was no evidence or record to the contrary)the Umpire refused to receive further evidence. In his decision he subsequently noted that there was no evidence before him that the applicant had tried to submit to the Board evidence of her job search during the qualifying period. He also found that there was circumstantial evidence before the Board to support the conclusions it had reached and he dismissed the appeal.

[7] The applicant seeks judicial review in this Court to set aside the Umpire's decision because of his refusal to receive further evidence with respect to:

(1) the minor nature of the involvement of the applicant in her husband's business;

(2) the reason why the corporation was operated in her name; and

(3) the allegation of the applicant that she had sought to put evidence before the Board with respect to her job search, and that the Board refused to allow her to do so thus denying her natural justice.

[8] We are all of the view that the Umpire was correct to refuse admission of new evidence on the merits, as described in items(1) and (2) above. Section 86 of the then Unemployment Insurance Act only allowed him to receive evidence of "new facts." This evidence could not constitute "new facts". It existed prior to the Board of Referees hearing and should have been presented at that time.

[9] We are, however, of the view that the Umpire erred in refusing to receive her evidence that the Board of Referees had refused to allow the applicant to put in evidence before it of her job search. Her affidavits, on which there has been cross-examination, affirm that there was such a refusal by the Board and there is no evidence before us to refute that assertion. Evidence of a job search during the applicant's benefit period would have been at least tangentially relevant to the issue of whether her involvement with the business was only minor. A board is normally obliged to hear such evidence, and its apparent refusal to do so here, if unexplained, could be found by an Umpire to be a denial of natural justice. The Umpire while properly refusing to hear new evidence on the merits was obliged to consider evidence as to the fairness of the Board hearing. This constituted "new facts" as it could not have been available before the Board hearing.

[10] We will therefore set aside the decision of the Umpire and refer the matter to the Chief Umpire for reference to an Umpire to hold a new hearing, including the consideration of any evidence that may be offered on the manner of conduct of the Board hearing in question. The applicant is entitled to costs.

"B.L. Strayer"

J.A.

FEDERAL COURT OF CANADA

Names of Counsel and Solicitors of Record

DOCKET: A-20-00

STYLE OF CAUSE: SANTA VELEZ

Applicant

- and -

ATTORNEY GENERAL OF CANADA

Respondent

DATES OF HEARING: TUESDAY, NOVEMBER 6, 2001

PLACE OF HEARING: TORONTO, ONTARIO

REASONS FOR JUDGMENT

OF THE COURT BY: STRAYER J.A.

Delivered from the Bench at Toronto, Ontario on Tuesday, November 6, 2001.

APPEARANCES BY: Mr. David W. Cass

For the Applicant

Ms. Janice Rodgers

For the Respondent

SOLICITORS OF RECORD: JESIN, WATSON & McCREARY

Barristers & Solicitors

805-5255 Yonge Street

Toronto, Ontario

M2N 6P4

For the Applicant

Morris Rosenberg

Deputy Attorney General of Canada

For the Respondent

FEDERAL COURT OF APPEAL

Date: 20011106

Docket: A-20-00

BETWEEN:

SANTA VELEZ

Applicant

- and -

ATTORNEY GENERAL OF CANADA

Respondent

REASONS FOR JUDGMENT

OF THE COURT

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Velez v. Canada (Attorney General), 2001 FCA 343

Citations2001 FCA 343

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2001 FCA 343