Date: 19980528
Docket: A-561-97
CORAM: MARCEAU J.A.
DESJARDINS J.A.
LÉTOURNEAU J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
SOCIÉTÉ FINANCIÈRE GRENCO INC.
Respondent
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the bench at Québec, Quebec
on Thursday, May 28, 1998)
MARCEAU J.A.
[1] This is an application by the Attorney General of Canada for judicial review of a decision of a Deputy Judge of the Tax Court of Canada. The issue before the Judge was whether the Minister of National Revenue, in making a determination on an application under section 61 of the Unemployment Insurance Act, was right in declaring that the functions taken on by four of the five shareholders in the company for the benefit and furtherance of the company had been carried out under a contract of insurable employment under the Act. To everyone"s surprise, the Judge felt compelled to conclude from the lengthy evidence before him that two of the shareholders were employed in insurable employment but the other two were not. The evidence on which such a dichotomy might be based is not apparent on the face of the reasons for judgment, as all the shareholders were apparently in comparable situations. Nor do we understand the judge"s analysis in finding, first, that this was employment within the meaning of paragraph 3(1)(a ),1 and that in two of the cases it should be excepted under subparagraph 3(2)(c)(ii).2 The consequences for the respondent and the four shareholders who were personally involved are too serious for the issue to be decided without more thorough consideration.
[2] The Attorney General of Canada"s application sought review of only that part of the decision which affected the two excepted shareholders, which is understandable since the Minister"s finding with respect to the other part was upheld. However, counsel for the applicant readily conceded that the whole decision must be reviewed and that such a review is impossible given the present state of the file.
[3] We are of the view that the application must accordingly be allowed, the decision quashed in its entirety and the matter referred back to the Tax Court of Canada to be reconsidered by a different judge, after a fresh hearing if the parties request it or if the judge selected thinks it appropriate to hold one.
Louis Marceau
J.A.
Certified true translation
Peter Douglas
Date: 19980528
Docket: A-561-97
CORAM: MARCEAU J.A.
DESJARDINS J.A.
LÉTOURNEAU J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
SOCIÉTÉ FINANCIÈRE GRENCO INC.
Respondent
Hearing held at Québec, Quebec on Thursday, May 28, 1998.
Judgment delivered from the bench on Thursday, May 28, 1998.
REASONS FOR JUDGMENT OF THE COURT
DELIVERED BY: MARCEAU J.A.
FEDERAL COURT OF APPEAL
Date: 19980528
Docket: A-561-97
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
- and -
SOCIÉTÉ FINANCIÈRE GRENCO INC.
Respondent
REASONS FOR JUDGMENT
OF THE COURT
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
COURT FILE NO.: A-561-97
STYLE OF CAUSE: Attorney General of Canada v. Société
Financière Grenco Inc.
PLACE OF HEARING: Québec, Quebec
DATE OF HEARING: May 28, 1998
REASONS FOR JUDGMENT OF THE COURT: (Marceau, Desjardins, Létourneau, JJ.A.)
DELIVERED FROM THE BENCH BY: Marceau J.A.
APPEARANCES:
Sylvie Gadoury for the applicant
Ghislain Dionne
Christian Paradis for the respondent
SOLICITORS OF RECORD:
George Thomson
Deputy Attorney General of Canada for the applicant
Ottawa, Ontario
Paradis, Dionne
Thetford Mines, Quebec for the respondent
__________________1 This paragraph reads as follows:
3. (1) Insurable employment is employment that is not included in excepted employment and is ( a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;
2 Which reads as follows:
3. (2) Excepted employment is . . . ( c) subject to paragraph (d), employment where the employer and employee are not dealing with each other at arm"s length and, for the purposes of this paragraph, . . . (ii) where the employer is, within the meaning of that Act, related to the employee, they shall be deemed to deal with each other at arm"s length if the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm"s length;