Biseau v. M.N.R.

Biseau v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2005-04-14 Neutral citation 2005 TCC 254 File numbers 2003-3931(EI) Judges and Taxing Officers François M. Angers Subjects Employment Insurance Act Decision Content Docket: 2003-3931(EI) BETWEEN: ALBERT BISEAU, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on March 21, 2005, at Bathurst, New Brunswick Before: The Honourable Justice François Angers Appearances: Counsel for the Appellant: Basile Chiasson Counsel for the Respondent: Stéphanie Côté ____________________________________________________________________ JUDGMENT The appeal is dismissed and the decision of the Minister of National Revenue is confirmed, in accordance with the attached Reasons for Judgment. Signed at Montreal, Quebec, this 14th day of April 2005. "François Angers" Angers, J. Citation: 2005TCC254 Date: 20050414 Docket: 2003-3931(EI) BETWEEN: ALBERT BISEAU, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Angers, J. [1] This is an appeal from a decision of the Minister of National Revenue ("Minister") that the appellant was not employed in insurable employment with D.L. Logging Express Ltée ("payor") during the period from October 22, 2001, to January 26, 2002 ("period") because he was not engaged under a contract of service within the meaning of the Employment Insurance Act ("Act"). [2] The facts that are not in dispute are that the payor's business consists of buying, selling and trucking logs to different mills in the Tracadie area. At all relevant times, the appellant was a landowner who was cutting logs on his land and who had the ability to sell the wood to buyers other than to the payor. The payor agreed to purchase from the appellant wood that was already cut, hauled to the road and ready for transport to the mill. For the period in question, the payor issued to the appellant a record of employment reporting 14 weeks of employment with earnings of $650 per week for 60 hours of work each week. [3] It is the Minister's position that the earnings reported on the appellant's record of employment were actually for the purchase of his wood. The selling price was $7,801 according to the scale bills and, therefore, below the reported earnings of $9,100 indicated on the record of employment. According to the Minister, the appellant did not receive all the earnings reported. In addition, the Minister submits that the payor did not supervise the appellant, had no control over the amount of wood cut and sold by the appellant, and did not know the number of hours worked or who was actually cutting the wood that he purchased from the appellant. [4] The appellant denies all of the above and suggests that there were two agreements between the payor and the appellant. One was for the sale of the appellant's wood to the payor and the other was a contract of employment to have the appellant operate a "treeporter" on behalf of the payor. The wages paid to the appellant by the payor were for actual work performed and not consideration for the purchase of the appellant's wood, disguised and paid for in wages as submitted by the Minister. [5] The appellant produced an agreement dated October 18, 2001, that he made with the payor. The agreement is written in French and reads as follows: Par cette entente le propriétaire Albert Biseau accorde à D.L. Logging Express le droit de coupe sur le terrain PID # 20609830 pour une période de 3 ans. Et par le fait même le propriétaire s'engage à travailler pour D.L. Logging Express pour faire la coupe aux mêmes conditions que les autres bûcherons. ... [6] The agreement is signed by both the payor and the appellant. Under the agreement, the payor is given a licence to cut wood on the appellant's land for three years and the appellant undertakes to work for D.L. Logging to cut wood under the same terms as other wood cutters. It is that agreement that forms the basis of what transpired during the period in question. The facts showed that the land identified by the PID number in the agreement is not owned by the appellant. It refers to a one-acre lot in a subdivision owned by one Gaétan Chiasson. [7] The appellant testified that he worked for the payor during the period in question as operator of a wood transporter called a "treeporter". He went to the payor to seek this job. He did some cutting but was mainly operating the treeporter as much as two to three weeks in a row. Depending on the weather, he would work five to six days a week, even after dark. He received his pay every Friday. He paid no expenses in relation to the "treeporter" and didn't know who owned it. He worked in the Tracadie, New Brunswick, area and never operated the "treeporter" on his land, located on Miscou Island. When cutting wood, he used his own chain saw and paid the expenses. The payor told the appellant where to work and the two had contact two to three times a week. He had to stop at the end of the period because there was too much snow. The number of weeks the appellant worked was the minimum required for him to qualify for unemployment benefits. [8] During the same period in question, the appellant had wood cut on his own land. He hired two woodcutters who both cut 75 cords of wood that he sold to the payor. He had it hauled since he had no equipment to do it himself. The appellant denied that the agreement he had with the payor was to sell his wood at $25 a cord for pulpwood, $30 a cord for studwood and $15 a cord to haul it to the roadside. [9] The appellant did not cash his paycheques every week. He sometimes waited two weeks and even longer since the bank was closed when he was not working. His wife would sometimes cash his cheques at the bank or at a convenience store between Tracadie and Miscou and not always at the same store. [10] When confronted with the fact that all the cheques except one had been cashed at the same convenience store, the appellant said he had other cheques during that period. In fact, he had cheques all year round and his answer was in relation to all of these cheques. When told that some of his cheques were cashed 15 weeks after receiving them, he answered that he only cashed them when he needed money. [11] The appellant in fact received 15 paycheques for a 14-week period. Except for one, they were all cashed at the same convenience store. His first paycheque is dated Oct. 27, 2001. It was endorsed by the appellant but deposited in the convenience store account on February 4, 2002, 15 weeks after being issued. All the other paycheques, as per Exhibit R-3, were deposited two to 15 weeks after the date of issuance. Three were deposited under 10 weeks and all the others were deposited between 10 to 15 weeks after issuance. [12] Daniel Losier is the owner of D.L. Logging Express Inc. He was interviewed by a Human Resources Canada agent on March 27, 2003, and signed a written statement in which he could not explain why the PID number on the agreement was incorrect. In the same statement, he explains that the appellant was cutting wood on his land and that the only profit the payor was making was for hauling the wood it bought from the appellant; that he was not paid for issuing a record of employment to the appellant; that the payor was hauling the wood purchased from the appellant and was charging $23 to $24 a cord; that the mill would make a cheque payable to the payor for the wood they bought; and that the payor would deduct the cost of hauling the wood and the $650 gross salary that the appellant had asked for and would pay the appellant the remaining amount of money. [13] Mr. Losier further explained to the agent that the value of the wood purchased was $25 a cord for pulp, $30 a cord for studwood and $15 a cord to have it hauled to the roadside. Scale bills were provided to the agents for the period from October 23 to December 15, 2001, showing the purchases the payor made from the appellant: 68.51 cords of pulp at $25; 118.67 cords of studwood at $30; and hauling at $15 a cord for a total of $7,801.10. [14] In his testimony, Mr. Losier said that the appellant was cutting wood on his own land during the period in question. At first, he could not remember what the arrangements were but later confirmed the above prices per cord depending on the type of wood (pulp or studwood) purchased. He could not explain why the record of employment indicated $9,100 in income and the scale bills showed $7,801.10 in sales. He confirmed that the appellant had worked 14 weeks for the payor in 2003 and that the number of weeks, although identical to 2002, was merely a coincidence. [15] Based on the scale bills, the total quantity of wood purchased by the payor from the appellant was 180.20 cords. The wood yielded a price of $18,825 from the mills. Deducting the cost of hauling the wood at $23 a cord and the amount of $7,801.10 paid to the appellant leaves a balance of approximately $6,800. When asked where the money went, Mr. Losier answered: "to the payor". When confronted with his statement, he said it went to the appellant. If such is the case, the appellant was therefore being paid more than $25 or $30 a cord. At that point, Mr. Losier could not remember how this surplus was paid to the appellant. [16] It is only in his cross-examination by counsel for the appellant that Mr. Losier clearly testified that not only had the appellant agreed to sell wood to the payor, but that he had also worked for the payor as operator of a "treeporter". He hired the appellant, paid him $650 per week and did not log his hours. The appellant apparently worked in the Tracadie area during the period and never on his own land. When asked why that information was never conveyed to the Human Resources agent, he answered that the question was never asked and that he thought the investigation had to do with the wood cutting on the appellant's land. According to Mr. Losier, there is no link between the salary paid to the appellant and the wood he purchased from him. [17] Mr. Losier testified that he may have told the appellant to cash his paycheques at the convenience store because it allowed him more time to make his own deposit since his account is not immediately debited. He had no explanation for the 15 cheques issued and could not explain why a weekly paycheque was issued on December 21 and another on December 22. [18] The appellant bears the onus of proving on a balance of probabilities that the minister's determination that the appellant was not employed with the payor in insurable employment during the period in question is unfounded and that there was insurable employment within the meaning of paragraph 5(1)(a) of the Act. [19] It is very difficult, if not impossible, to make sense out of the appellant's version of the facts. It is also difficult to understand why Exhibit A-1, the contract, is written in French since the appellant testified that he was not very familiar with the language. It is also questionable that such a contract would identify the wrong property on which a licence to cut timber is granted. What is even more questionable is why was it necessary that a licence to cut timber on the appellant's land be given to the payor, whose business consists of buying, selling and trucking logs to different mills? Why was it necessary that a licence to cut timber be given at the same time as an undertaking by the appellant to work for the payor as a woodcutter? The appellant testified that he hired two persons to cut wood on his land during the period in question when, just prior to the period, he had granted the payor a licence to cut. Why does the contract refer to a contract of employment as a wood cutter if the work performed by the appellant was as operator of a "treeporter"? If he was hired as the operator of a "treeporter", why does the record of employment (Exhibit R-2) indicate that the appellant was hired as a labourer? [20] Mr. Losier gave evidence that the appellant had worked at one point on his own land but the appellant said he had always worked on the "treeporter". Why was a licence to cut timber or wood given to the payor when the evidence of both the payor and the appellant is that there were two agreements - one to hire the appellant and the other to purchase wood from the appellant? [21] Mr. Losier was very evasive in too many of his responses to what I consider to be simple questions. He could not explain why 15 instead of 14 cheques had been issued, nor could he explain why the appellant was given two cheques two days in a row when he testified that the appellant was paid on a weekly basis. The appellant said he did not cash his cheques at the same convenience store and that his wife sometimes cashed them. Yet, they were all cashed at the same convenience store, except one, and none was endorsed by his wife. His explanation that he was referring to cheques he received throughout the year instead of during the period in question lacks credibility, since he said that he cashed his paycheques well after receiving them because it was only then that he needed money. [22] The fact that a period of employment is similar to the number of weeks required to be eligible for unemployment benefits is not in itself sufficient to conclude that it is not a valid contract of employment. It raises questions though that, when coupled with evidence such as evidence in this case, it may easily be concluded that there is no contract of service between the appellant and the payor but rather a business transaction artificially arranged in order that the appellant qualify for unemployment insurance benefits. [23] I find the evidence of both the appellant and the payor to be unreliable, to say the least. In my view, the facts as presented are definitely more consistent with the position taken by the Minister. [24] The appeal is dismissed. Signed at Montreal, Quebec, this 14th day of April 2005. "François Angers" Angers, J. CITATION: 2005CCI254 COURT FILE NO.: 2003-3931(EI) STYLE OF CAUSE: Albert Biseau and the Minister of National Revenue PLACE OF HEARING: Bathurst, New Brunswick DATE OF HEARING: March 21, 2005 REASONS FOR JUDGMENT BY: The Hon. Justice François Angers DATE OF JUDGMENT: April 14, 2005 APPEARANCES: Counsel for the Appellant: Basile Chiasson Counsel for the Respondent: Stéphanie Côté COUNSEL OF RECORD: For the Appellant: Name: Basile Chiasson Firm: Chiasson & Roy Bathurst, New Brunswick For the Respondent: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Canada