Aguilera c. M.R.N.

Aguilera c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2003-12-16 Neutral citation 2003 TCC 930 File numbers 2002-4908(EI) Judges and Taxing Officers Louise Lamarre Proulx Subjects Employment Insurance Act Decision Content [OFFICIAL ENGLISH TRANSLATION] Docket: 2002-4908(EI) BETWEEN: JUAN ARTURO PACHECO AGUILERA, Appellant, And THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on November 26, 2003, at Montréal, Quebec Before: The Honourable Judge Louise Lamarre Proulx Appearances: Counsel for the Appellant: Robert Péloquin Counsel for the Respondent: Mélanie Bélec ____________________________________________________________________ JUDGMENT The appeal from the decision of the Minister of National Revenue made pursuant to the Employment Insurance Act is allowed and the decision is reversed, in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 16th day of December, 2003. "Louise Lamarre Proulx" Lamarre Proulx, J. Certified true translation Manon Boucher [OFFICIAL ENGLISH TRANSLATION] Reference: 2003TCC930 Date: 20031216 Docket: 2002-4908(EI) BETWEEN: JUAN ARTURO PACHECO AGUILERA, Appellant, And THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Lamarre Proulx J. [1] This appeal concerns part of the assessment made by the Minister of National Revenue (the "Minister") on May 31, 2002, against a company, 9103-1195 Québec Inc. (the "company"). The amount contested concerns the amount of the Appellant's employment income. [2] On July 18, 2002, the Payor asked the respondent to reconsider the assessment of May 31, 2002. In her letter of October 7, 2002, the Minister informed the company of her decision to confirm the assessment because the Workers, including the Appellant, held insurable employment, in accordance with paragraph 6(g) of the Employment Insurance Regulations. [3] Another letter of October 7, 2002, informed the Appellant that the employment insurance assessment of $2,498.50 had been confirmed in his case because he was an employee of this company. It is this decision of October 7, 2002, that is being appealed. [4] The facts on which the Minister relied to make her assessment against the Appellant are described in paragraph 8 of the Reply to the Notice of Appeal (the "Reply"): (a) During the years in question, the Payor operated an employment agency. (b) During the years in question, the Payor hired Workers who provided services to his clients under the control and direction of these same clients. (c) During the years in question, the Payor directly paid the Workers whom he hired. (d) In 2001, more specifically in February and March, the Appellant worked for the Payor. (e) In 2001, the Appellant received from the Payor the sum of $2,498.50. [5] Counsel for the Appellant admitted on the Appellant's behalf paragraphs 8 (a) to 8 (c). In the case of paragraphs 8(d) and 8(e), he admitted that the Appellant had worked two weeks for the company in February 2001 and had been paid $1,080. [6] The Appellant testified. He explained that he had in fact worked for the company as a night security guard for a business that was a client of the company. He was paid by cheque. He believed that he had received two or three cheques totalling $1,080. [7] Marc Casavant, an officer of the Canada Customs and Revenue Agency (the "CCRA"), testified. He explained that on February 14, 2002, he visited the company to check the payroll records. He asked the accountant to prepare a statement of the expenditures made by the company, including the pays received by the Workers. This statement was filed as Exhibit I-1. [8] The officer made the assessments based on this statement. He admitted that he did not see the cheques. According to Exhibit I-1, dated February 28, 2001, three cheques were issued to the Appellant in the amounts of $570, $522.50 and $570 respectively. On March 9 and March 15, 2001, two cheques were issued to the Appellant, one for $522.50 and the other for $313.50. [9] Luis Raoul Jimenez Serrano also testified at the request of counsel for the Respondent. He and another person were the shareholders of the company. He confirmed that the Appellant worked in security for a business by the name of "Mégabloc" from 7:00 p.m. until 7:00 a.m. He worked three consecutive days, followed by two days of rest, then four consecutive days of work. He was paid $9 an hour. [10] The witness offered to produce a time sheet concerning the Appellant prepared by the client business. Counsel declined the offer, probably for two reasons: first, because the witness was not the person who prepared the document and, second, because Mr. Casavant did not take this document into consideration in preparing the Appellant's statement of employment income. The witness explained that three cheques were issued on the same date because of a certain technical problem. [11] Counsel for the Appellant pointed out that the cheques were not produced and that the amount of money that the appellant received was not therefore clear. [12] Counsel for the Respondent argued that the Appellant received from the Payor the amount shown in paragraph 8(e), as per the figures established by the company's accountant and contained in Exhibit I-1. Counsel noted that the Appellant's credibility was seriously undermined by his Notice of Appeal. The Notice of Appeal, dated December 19, 2002, stated categorically that the Appellant had not worked for the company in 2001 and 2002 and that he never held a job in Canada. The Notice of Appeal stated that the Appellant applied for jobs through a number of personnel agencies, including the company, and that if amounts were paid in the Appellant's name, this meant that the company used personal and private information on the Appellant to pay another individual by appropriating the Appellant's identity. The Notice of Appeal concluded by stating that the Appellant was the victim of the company's unlawful conduct. Conclusion [13] There is no doubt that the Appellant's version of the facts changed significantly. At the hearing, he admitted that he worked for two weeks in February, for which he was paid $1,080. [14] However, I must bear in mind that the Department's officer did not see the pay cheques. Moreover, he did not take into account the client business's time sheets. I must also bear in mind that the Payor's explanation for the issuing of three pay cheques on the same date was not very clear. [15] Assessing a taxpayer additional income can have serious economic consequences and the Court must be very certain before acting. I am certain that the Appellant was paid the amount he indicated that he was paid for the work he did. Based on the evidence presented, I am not sure that he was paid more than the amount he admitted that he was paid for the work he did. [16] The appeal is therefore allowed on this basis. Signed at Ottawa, Canada, this 16th day of December, 2003. "Louise Lamarre Proulx" Lamarre Proulx, J. Certified true translation Manon Boucher