Date: 20030121
Docket: A-425-01
Neutral citation: 2003 FCA 27
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
HERVEY BOUCHARD
Plaintiff
and
THE ATTORNEY GENERAL OF CANADA
Defendant
Hearing held at Québec, Quebec on January 21, 2003.
Judgment from the bench at Québec, Quebec on January 21, 2003.
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
Date: 20030121
Docket: A-425-01
Neutral citation: 2003 FCA 27
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
NADON J.A.
BETWEEN:
HERVEY BOUCHARD
Plaintiff
and
THE ATTORNEY GENERAL OF CANADA
Defendant
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Québec, Quebec
on January 21, 2003.)
LÉTOURNEAU J.A.
[1] By judicial review the plaintiff is asking the Court to quash a decision by a deputy judge of the Tax Court of Canada on June 15, 2001 and to rule that the employment which he held for the periods at issue, from September 25 to December 22, 1995, January 8 to December 20, 1996 and January 6 to 7, 1997, was insurable. As can be seen from the dates, the periods at issue were partly covered by the old Unemployment Insurance Act, R.S.C. 1985, c. U-1, and the new Employment Insurance Act, S.C. 1996, c. 23, as amended. As the provisions at issue under the two statutes are for all practical purposes the same, we will use the word "Act" to refer to either one indiscriminately.
[2] The relevant provisions of the Act read:
Unemployment Insurance Act, ss. 3(2)(d) and 70(2)
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3. (2) Excepted employment is
. . . . .
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3. (2) Les emplois exclus sont les suivants :
. . . . .
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(d) the employment of a person by a corporation if the person controls more than forty per cent of the voting shares of that corporation;
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d) tout emploi d'une personne au service d'une personne morale si cette personne contrôle plus de quarante pour cent des actions avec droit de vote de cette personne morale;
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70. (2) On an appeal under this section, the Tax Court of Canada may reverse, affirm or vary the determination, may vacate, confirm or vary the assessment or may refer the matter back to the Minister for reconsideration and reassessment, and shall thereupon in writing notify the parties to the appeal of its decision and the reasons therefor.
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70. (2) Sur appel interjeté en vertu du présent article, la Cour canadienne de l'impôt peut infirmer, confirmer ou modifier le règlement de la question, peut annuler, confirmer ou modifier l'évaluation ou peut renvoyer l'affaire au ministre pour qu'il l'étudie de nouveau et fasse une nouvelle évaluation; dès lors, elle est tenue de notifier par écrit sa décision et ses motifs aux parties à l'appel.
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Employment Insurance Act, ss. 5(2)(b) and 103(3)(d) in the English version and 103(3)(b) in the French version
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5. (2) Insurable employment does not include
. . . . .
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5. (2) N'est pas un emploi assurable :
. . . . .
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(b) the employment of a person by a corporation if the person controls more than 40% of the voting shares of the corporation;
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b) l'emploi d'une personne au service d'une personne morale si cette personne contrôle plus de quarante pour cent des actions avec droit de vote de cette personne morale;
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103. (3) On an appeal, the Tax Court of Canada
(a) may vacate, confirm or vary a decision on an appeal under section 91 or an assessment that is the subject of an appeal under section 92;
(b) in the case of an appeal under section 92, may refer the matter back to the Minister for reconsideration and reassessment;
(c) shall notify in writing the parties to the appeal of its decision; and
(d) give reasons for its decision but, except where the Court deems it advisable in a particular case to give reasons in writing, the reasons given by it need not be in writing.
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103. (3) Sur appel interjeté en vertu du présent article, la Cour canadienne de l'impôt peut annuler, confirmer ou modifier la décision rendue au titre de l'article 91 ou 92 ou, s'il s'agit d'une décision rendue au titre de l'article 92, renvoyer l'affaire au ministre pour qu'il l'étudie de nouveau et rende une nouvelle décision; la Cour :
a) notifie aux parties à l'appel sa décision par écrit;
b) motive sa décision, mais elle ne le fait par écrit que si elle l'estime opportun.
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[3] We consider that the application for judicial review should be allowed on the ground that the Tax Court of Canada deputy judge failed to give reasons for his decision as required by the Act.
[4] It is discouraging to see that, despite this Court's judgments in Aubé v. Attorney General of Canada, A-761-97, May 26, 1998, Dion v. Minister of National Revenue, A-627-97, April 29, 1998, Gagnon v. Minister of National Revenue, A-625-97, April 29, 1998, and Potvin-Gagnon v. Minister of National Revenue, A-626-97, April 29, 1998, to name only a few, we are still obliged four years later to intervene and reverse a decision for this reason, at the expense of the plaintiff and taxpayers who must bear the costs of the instant appeal and of a new hearing, which itself may be followed by another appeal. In all the cases mentioned, the difficulty results from decisions given by deputy judges. Although the Court felt it had eradicated the problem in 1998, it has clearly resurfaced like the weed which, though pulled up, eventually grows back, and has the ability to spread very quickly if appropriate steps are not taken. It is all the more discouraging as this is a representative case and several other cases are awaiting resolution.
[5] In the case at bar the decision only related the facts and the procedural events, indicated the periods at issue when it was alleged that the plaintiff was employed by a corporation in which he held more than 40% of the voting shares, cited the relevant provisions of the Act on the control of a corporation by an employee and concluded that the employment was not insurable, with no attempt to analyse the evidence and without even a reference to any of the evidence in the record.
[6] Although it was admitted by the plaintiff (see para. 3 of the plaintiff's memorandum of fact and law) that he held 100% of the shares in the corporation Les Entreprises Forestières Hervey Bouchard Inc. for the period from August 1995 to January 1997, he vigorously disputed the allegation that he was employed by that corporation. His argument and the oral and documentary evidence he submitted in support of it was that he was working for the company Uniforêt Scierie Péribonka. The deputy judge's two-page decision contained no reference to this evidence and did not determine who the plaintiff's employer was. That was the crux of the whole case.
[7] In her effort to support the deputy judge's decision counsel for the defendant referred the Court in her memorandum of fact and law to para. 8 of the decision, which reads:
[TRANSLATION]
The issue concerns only the periods worked by the employee from September 25, 1995 to January 7, 1997, when his situation legally was that of an employee of a corporation in which he held more than 40 % of the voting shares.
She submitted that it was apparent from this passage that the judge had concluded the plaintiff was employed by Les Entreprises Hervey Bouchard Inc. With respect, we cannot share that view.
[8] This paragraph, to which the defendant referred the Court, was part of the narrative of facts, as was para. 3 of the decision, which is worth reproducing:
[TRANSLATION]
On September 8, 1998 Hervey Bouchard, the employee, asked the respondent to rule on whether he had held insurable employment for the periods from September 25 to December 22, 1995, January 8 to December 20, 1996, January 6 to March 7, 1997, May 19 to December 19, 1997 and January 5 to February 27, 1998, when he worked for Uniforêt Scierie Pate Inc., the payer, within the meaning of the Employment Insurance Act.
(My emphasis)
Should we also infer from this paragraph that the deputy judge actually concluded that the plaintiff was working for Uniforêt Scierie Pâte Inc. in Péribonka?
[9] Further, even admitting for the sake of argument that para. 8 of the decision, by a liberal, not to say generous, interpretation, could be read in the sense submitted by counsel for the defendant, namely that the plaintiff was an employee of Les Entreprises Hervey Bouchard Inc., one unavoidable fact remains: this is a conclusion without reasons on a point that was disputed by the plaintiff, when the documentary and oral evidence was contradictory and gave rise to differing interpretations by the parties. As this Court said in Dion, supra, at para. 4:
However, the decision of the Tax Court of Canada is silent on this evidence, which is central to the case, and it was to be expected, at least where the more important evidence is concerned, that it would be appropriately addressed in the Judge's reasons considering his duty under the Act to give reasons for his decision.
[10] At the hearing counsel for the defendant relied on a brief judgment rendered by this Court orally in March 2001, and gave us a copy of it: Trillium Labels Inc. v. Canada (Minister of National Revenue - M.N.R.), [2001] F.C.J. No. 353. That case clearly must be distinguished and does not have the meaning the defendant sought to give it.
[11] In fact, the Court did not consider nor rule on the duty to provide reasons imposed by the Act in matters of employment insurability. It did not refer to the Act's peremptory provisions and this Court's consistent line of authority on the point.
[12] In his argument counsel for the plaintiff instead asked the Court if the matter could be referred back to the Tax Court of Canada for re-hearing. Counsel for the defendant insisted that we should determine the substantive point. However, the issue raises questions of credibility and we only have extracts from the transcript of testimony. It would not be proper for this Court, in the circumstances and in view of the importance of the matter, to make an initial determination based on assessment of evidence, when this is the responsibility of the Tax Court of Canada judge. Needless to say, that is precisely what the judge is there to do. Further, in addition to the fact that we do not have all the evidence which was before the deputy judge, proceeding to render judgment could prejudice one or other of the parties by depriving that party of the right to apply for judicial review.
[13] For these reasons, the application for judicial review will be allowed with costs, the decision of the deputy judge reversed and the matter referred back to the Chief Judge of the Tax Court of Canada, or to a judge appointed by him, other than the instant deputy judge, for re-hearing.
[14] As the question at issue here is the same as that raised in case A-426-01, Les Entreprises Forestières Hervey Bouchard Inc. v. The Attorney General of Canada, and since the two cases were the subject of common proof and hearing in the Tax Court of Canada, a copy of these reasons will be filed in case A-426-01 in support of the judgment rendered in the said case.
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Gilles Létourneau
J.A.
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Certified true translation
Suzanne M. Gauthier, C. Tr., LL.L.
FEDERAL COURT OF CANADA
APPEAL DIVISION
SOLICITORS OF RECORD
FILE: A-425-01
STYLE OF CAUSE: HERVEY BOUCHARD v. THE ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: QUÉBEC, QUEBEC
DATE OF HEARING: January 21, 2003
CORAM: DESJARDINS J.A.
LÉTOURNEAU J.A.
NADON J.A.
REASONS FOR JUDGMENT OF THE COURT: LÉTOURNEAU J.A.
DATE OF REASONS: January 21, 2003
APPEARANCES:
Claude Leblanc FOR THE PLAINTIFF
Nathalie Lessard FOR THE DEFENDANT
SOLICITORS OF RECORD:
Morency, Philion, Leblanc FOR THE PLAINTIFF
Québec, Quebec
Department of Justice FOR THE DEFENDANT
Montréal, Quebec
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