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A loan will not be considered to be made at a reasonable rate of interest where a shareholder borrows money at interest and loans that money to a corporation of which he is a shareholder, or to its subsidiary controlled corporation (subsidiary), at a lesser rate of interest than that at which the shareholder borrows the money. ...

In consideration of their providing the Guarantees, the Corporation is hereby authorized to provide the following assurances to the Guarantors: (a) The Corporation shall agree to pay all of the costs of the Guarantors in connection with their entering into the Guarantees; (b) The Corporation shall agree to indemnify and save the Guarantors harmless from any claim, liability or loss arising in respect of the Guarantees, from time to time, including, without limiting the generality of the foregoing, any claims, liabilities or losses arising as a result of the Guarantors having to honour their obligations under the Guarantee; and (c) in the event that any of the Guarantors are required to pay any amount in respect of the Guarantees, then to the extent of such payment, the Corporation acknowledges and agrees that the Guarantors will be entitled to an assignment of the Loan as if the Guarantors had been original parties thereto, and for the purposes of this provision, any amounts owing by the Corporation to the Guarantors, and unpaid, including amounts owing by the Corporation to the Guarantors under paragraph (a) or (b) above, shall be considered payments made by the Guarantors. [5] The Appellant’s contention is that by operation of this indemnity provision CLGI became indebted to him for the amount which he was required to pay to the bank under his guarantee, and also for all the incidental costs arising out of the sale of the family home and the purchase of a replacement. [6] The sale price of the Appellant’s house was $633,000.00. ...

Tong must be considered. 16. The Appellant submits that on examination of the whole of the relationship, Mr. ...

., supra, the Federal Court of Appeal laid out certain matters which should be considered by this Court when hearing these appeals. ...

"designated shareholder" of a corporation at any time means a taxpayer who at that time (a) is or is related to (i) a specified shareholder of the corporation, or (ii) a person who would be a specified shareholder of the corporation if, in applying the definition "specified shareholder" in subsection 248(1) of the Act, a person who has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to or to acquire shares of the capital stock of a corporation were deemed to own those shares, and one of the main reasons for the existence of the right may reasonably be considered to be that the person not be regarded as a specified shareholder of the corporation, unless the aggregate of amounts, each of which is the cost amount of any share of the capital stock of the corporation or any other corporation that is related thereto that the taxpayer owns or is deemed to own for the purposes of the definition "specified shareholder" is less than $25,000, (b) is or is related to a member of a partnership that controls the corporation, (c) is or is related to a beneficiary under a trust that controls the corporation, (d) is or is related to an employee of the corporation or a corporation related thereto, where any group of employees of the corporation or of the corporation related thereto, as the case may be, controls the corporation, except where the group of employees includes a person or a related group that controls the corporation, or (e) does not deal at arm's length with the corporation. [23] In subsection 248(1) of the Act, a specified shareholder is defined as: "specified shareholder" of a corporation in a taxation year means a taxpayer who owns, directly or indirectly, at any time in the year, not less than 10% of the issued shares of any class of the capital stock of the corporation or of any other corporation that is related to the corporation and for the purposes of this definition, (a) a taxpayer shall be deemed to own each share of the capital stock of a corporation owned at that time by a person with whom he does not deal at arm's length,... ...

He did not consider all of the factors he should have considered, nor did he assess the context fully. ...

Analysis [77] The appellant received her shares in the intervener for nothing, and an unrelated employee certainly would not have received such a gift. [78] Subparagraph (d) cited above was denied as written, but there is no evidence that the appellant did not become the vice-president of the company on December 2, 1993. [79] The burden of proof, need it be pointed out, was on the appellant and the intervener. [80] The appellant could sign the payer’s cheques, and another secretarial employee certainly would not have been able to do so. [81] The appellant obviously worked for the payer, but the Minister, in the exercise of his discretion, found that her employment was not insurable. [82] She denied subparagraph (g) as written, but the evidence adduced in this case shows that allegation to be true. [83] She also denied subparagraph (h), and it is true that Sandra Coulombe also worked at little at the payer’s office; it is also true that the appellant had to abide by a work schedule, but that is not all that must be considered to dispose of this case. [84] Mario Gilbert did say that the appellant used the payer’s car, inter alia for personal purposes. [85] It is clear that the appellant continued to work for the payer even after she was laid off the first time; her explanation that she worked five hours a week yet even had to be replaced occasionally does not stand up to serious scrutiny, especially since her husband handled the secretarial work at the payer’s office by himself during the other 30 hours. [86] An unrelated person would certainly not have worked there without being paid; the same is true for the period from January 1 to June 30, 1995, when she worked full time in return only for the repayment of what she had invested. [87] The appellant did not pay for her shares, and an unrelated person would normally have had to do so. [88] In these circumstances, it is not reasonable to conclude that the appellant’s contract of employment would have been substantially similar if she had been dealing with the payer at arm’s length. [89] There is no doubt that Johanne Gravel helped the intervener when it was starting out and that she “trained” the appellant, but that is not what the Court has to decide to dispose of this case. [90] The appellant’s previous activities are interesting, but they do not really provide grounds for interference by the Court. [91] She invested in the payer, which an unrelated employee certainly would not have done. [92] There are ups and downs in every industry. [93] The appellant could use the payer’s car for personal purposes, and an unrelated employee certainly would not have been able to do this. [94] It is true that layoffs can help get a business back on its feet, but an employee so dismissed cannot receive unemployment insurance benefits and at the same time still work without pay, especially when the business’s income is increasing. [95] The situation in the case at bar can be explained only by the non-arm’s-length relationship. [96] The good faith of the witnesses has not been challenged in any way, but the Court must rule within the framework of the Act. [97] In unemployment insurance matters, each case is sui generis. [98] In Caron, supra, the spouse did not transfer shares, advance funds to the business or guarantee a mortgage on her husband’s home in order to bail out the business; nor did she work full-time simply to recover the advances she had made to the payer. [99] Jencan, supra, clearly shows that the Court should not interfere and should show judicial deference, since the Minister’s decision was perfectly legal. [100] There is no evidence that the respondent acted in bad faith or for an improper purpose or motive. ...

[28] All things considered, I conclude that it is more likely that the deposits in Mr. ...

Tenured Musician A core musician who has been under contract with the Association for two complete and consecutive seasons and has been offered and has accepted his/her third contract. 3.1 The Association recognizes the Local as the exclusive bargaining agent for all musicians contracted by the Association except the Music Director for the purpose of bargaining with respect to minimum remuneration, hours, and other terms and conditions of performance, except that the Concertmaster shall have the right to negotiate his/her own fee. 3.2 The Local recognizes the right of the Association to manage its affairs and to direct the services of its contracted musicians in all matters pertaining to the operation of the Association, provided that the Association shall not act in a manner inconsistent with the terms of this Master Agreement. 4.4 International and Local Work Dues totalling 2% of each musicians weekly fee shall be deducted by the Association from each pay cheque and forwarded to the Local monthly. 6.1 Every provision of this Master Agreement shall be considered to be incorporated into each Performance Agreement, provided that, (a) the Performance Agreement does not establish a rate of compensation for service less than this Master Agreement, and (b) conditions of employment of a non-monetary nature which are different from those in this Master Agreement are not less favourable to the musician. 7.1 The Music Director or Conductor appointed by the Association shall be in charge of all rehearsals and performances, consistent with the terms of this Master Agreement, and shall have the authority to regulate all musical matters. ...

., the president and shareholder of which is Claudette Ruest, the appellant herein; (e)         during the period at issue, Marcel Thiffault used just one bank account for all the activities of the appellant, for the activities of the three companies referred to in subparagraph (d), and also for the payment of his personal expenses; (f)          the accountant prepared the appellant's quarterly returns on the basis of the cheques issued, but without having the purchase and sales invoices in his possession; (g)         moreover, since the accountant did not have in hand the contracts of sale, the rental agreements or the invoices, income was reported on the basis of the deposits and adjusted at the end of the year when those documents were provided to him; (h)         the income also had to be adjusted at the end of the year to take account of amounts that had not been deposited in the account, and it then had to be broken down for each registrant and each activity on the basis of the information provided by Marcel Thiffault; (i)          thus, the amounts collected as residential rents could not be traced in the deposits, and the respondent was unable to confirm that the income reported for the residential rentals was indeed from those rentals or from the laundry rooms made available to tenants; (j)          it can be seen from the foregoing that the appellant's accounting was deficient, since the books of account were inadequate in some cases and non-existent in others, that the income was not all reported, that some invoices needed in order to justify the ITCs claimed were missing, that the ITCs were claimed without taking account of which registrant the invoices had been issued to and that ITCs were claimed for non-taxable activities or were claimed twice; (k)         the entries made in the appellant's general ledger were therefore not consistent with the purchase and sales invoices; (l)          the respondent estimated the annual income from the laundry rooms operated at 2145 St-Joseph and 476 St-Jean as follows:-            she began by establishing electricity and natural gas consumption for each laundry room, taking account of the fact that, according to the findings made on site, the main light was switched off when the laundry rooms were not open, with only a few fluorescent lights remaining on, the fan was not running 24 hours a day but rather 4 hours a day on 182 days of the year and the heating period was also 182 days a year;-            based on that consumption and the number of kilowatts needed to operate the washers and dryers, she calculated in hours per day the amount of time a washer and a dryer were used;-            she then estimated the income from the laundry rooms by taking account of the number of washers and dryers in each and of the price set by the appellant for users;-            finally, she established the annual income from the laundry rooms based on the washers being used between 0.9638 and 1.7024 hours a day and the dryers between.3077 and 1.1635 hours a day, depending on the year and the laundry room concerned;-            the income from the laundry rooms was thus determined to be the following: 1991 1992 1993 1994 TOTAL Reported income 12,027 17,523     783- 0- 30,333 Adjusted income 20,508 31,052 38,581 29,946 120,087 a breakdown of the income and of the GST to be remitted by reporting period being contained in Schedule B appended to this Reply; (m)        the respondent considered that the activities involving the sale of used motor vehicles were not commercial activities within the meaning of section 123 of the Excise Tax Act (hereinafter the "E.T.A. ...