Tax Court of Canada Judgments

Date: 19990211

Docket: 97-1426-UI

BETWEEN:

JANETTE LORD,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

C.D. LORD & SON LTD.,

Intervenor.

Reasons for judgment

Bowie, J.T.C.C.

[1] This appeal came on before me at St. John, New Brunswick on February 8 and 9, 1999. It arises in this way. The Appellant, Janette Lord, worked for C.D. Lord & Son Ltd. (the company). All the shares of that company are owned by her husband, Cecil Lord, and he is its only director. At about the end of 1996, Janette Lord was laid off from her work there, and in early 1997 she made an application for benefits under the Employment Insurance Act[1](the Act). That application was refused, and she took an appeal to the Minister of National Revenue (the Minister) pursuant to section 91 of the Act. That section reads as follows:

91 An appeal to the Minister from a ruling may be made by the Commission at any time and by any other person concerned within 90 days after the person is notified of the ruling.

[2] Following that, the Appellant received in the mail a letter which is dated July 4, 1997 and addressed to her at her address in St. Stephen, New Brunswick. The operative part of that letter is the first and second paragraphs, which I shall read in their entirety:

Dear Mrs. Lord:

...

This letter concerns your request for a determination on the insurability, for unemployment insurance purposes, of your employment with C.D. Lord & Son Ltd. from August 19, 1996 to November 22, 1996.

It has been decided that this employment was not insurable for the following reasons: You are related by marriage to the person who controls the corporation and in accordance with the Income Tax Act is, therefore, a related person to the payor as defined in paragraph 251(2)(b)(iii) and as related persons, are deemed not to be dealing at arm's length as per paragraph 251(1)(a). Further, having regard to all the circumstances of the employment, the Minister of National Revenue has concluded that you would not have entered into a substantially similar contract of employment if you had been dealing with each other at arm's length.

...

That letter goes on to advise her of her right to appeal to this Court. She adopted that advice, and appealed to this Court by a Notice of Appeal dated August 7, 1997. C.D. Lord & Son Ltd. has joined as an intervenor, in support of her appeal. Subsection 103(1) of the Act reads as follows:

103(1) The Commission or a person affected by the decision of an appeal to the Minister under section 91 or 92 may appeal from the decision to the Tax Court of Canada in accordance with the Tax Court of Canada Act and the applicable rules of court made thereunder within 90 days after the decision is communicated to the Commission or the person, or within such longer time as the Court allows on application made to it within 90 days after the expiration of those 90 days.

The powers of the Court in such an appeal are described in subsection 103(3), which reads in part:

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;

...

The Minister's letter of July 4, 1997 seems to suffer from some confusion as to whether this proceeding is being conducted under the Unemployment Insurance Act[2] as it used to be, or the Employment Insurance Act, as it now is but it seems clear to me that it should be, and it is, under the new Act which came into force in mid-1996.

[3] The function of this Court on such an appeal is a two-stage one. That has been settled by the Federal Court of Appeal in Tignish Auto Parts Inc. v. M.N.R.,[3] Ferme Emile Richard et Fils Inc. v. M.N.R.[4] and Her Majesty the Queen v. Bayshore Drive-in Limited.[5] In all those cases, which arise under the Unemployment Insurance Act, the Court of Appeal held that this Court must proceed in two stages on appeals from the Minister, where the issue is the exercise of the Minister's discretion under what is now paragraph 5(3)(b) of the Employment Insurance Act.[6] Section 5 of the Act describes what is, and what is not, insurable employment under the Act, and paragraph 5(2)(i) provides that insurable employment does not include:

employment if the employer and employee are not dealing with each other at arm's length.

Subsection 5(3) then goes on to provide that the Income Tax Act provisions will govern the question of arm's length. There is no dispute in this case, nor could there be any, that the payor and the payee do not deal with each other at arm's length. Under paragraph 5(3)(b), however, there is provision by which there can be relief from the strictures of paragraph 5(2)(i).

[4] Paragraph 5(3)(b) reads as follows:

if the employer is, within the meaning of that Act, related to the employee, they are 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 of the importance of the work performed, it is reasonable to conclude they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm's length.

In the cases I mentioned a moment ago, the Federal Court of Appeal has said quite clearly that the function of this Court is to proceed in two stages, where this discretion of the Minister is involved. The first stage consists of an examination of the decision of the Minister to see whether it has been made lawfully or unlawfully. If it has been made according to law, then that is the end of the matter, and the Minister's decision stands. If on examination, it appears that the Minister's decision has not been made according to law, then this Court embarks upon a second stage which is an examination of the record, and the hearing of evidence, in what has been described as a de novo determination of the question raised by paragraph 5(3)(b), and it falls to this Court to make the discretionary decision which that paragraph assigns to the Minister.

[5] I digress to note that there seems to be some doubt arising out of the decision of the Court of Appeal in Bayshore Drive-in as to whether this Court's function is limited simply to an examination of the paper record, or goes beyond that to receiving evidence. The invariable practice since the decision in Tignish Auto Parts has been, I believe, to do both. Clearly, if I had to decide this matter on the scant paper record forwarded to the Court by the Minister, it would be quite impossible to do justice to the Appellant, because that record consists of nothing more than a form called "application for determination of a question regarding insurable employment" and the letter by way of appeal sent by the Appellant, Janette Lord, on March 12, 1997 to the Chief of Appeals, presumably at Revenue Canada, requesting an appeal, and copies of the three letters sent on July 4, 1997, one to the Appellant, one to the Intervenor, and one to Human Resources Development Canada, all purporting to convey the Minister's decision on the appeal to him.

[6] This is a trial Court, and, in my view, it is entirely appropriate that an Appellant in the situation of Ms. Lord before this Court, if the Minister's decision is found not to have been made according to law, should be entitled to present her case with respect to the question whether, if she and her employer were dealing at arm's length, they might reasonably have entered into a substantially similar contract of employment.

[7] At the outset of the hearing before me, Counsel for the Minister, very properly, brought to my attention the following facts. The "decision" which appeared to be embodied in the letter of July 4, 1997, from which I quoted a few moments ago, was not in fact made by the person who appears to have signed it. The letter has at the bottom of it a signature block which reads:

"Chief, Appeals Division

for Minister of National Revenue"

and above that signature block has been applied a rubber stamped signature of one B.G. Gillis. I am advised that B.G. Gillis did not have anything to do with the making of this decision, and the decision was in fact made by a team leader who works under the supervision of B.G. Gillis in the Appeals Division of the Minister's department, Revenue Canada. I am further advised that that team leader did not have any proper delegated authority to exercise the Minister's discretion, and thereby render the decision.

[8] A matter essentially identical to this, although it appears to have arisen under the Unemployment Insurance Act, as opposed to the Employment Insurance Act, was before my colleague, Deputy Judge Porter, some time ago, and he rendered Reasons for Judgment on January 14, 1999, in which he made a very thorough and careful analysis of the relevant statutory provisions, and of the substantial body of case law on the subject of delegated authority to make decisions. He found that a decision made under facts indistinguishable from those before me was not made according to law, in the absence of a proper delegation of the authority to make the decision to the person who made it. His decision is well-summed up in paragraph 56, where he said:

In conclusion, I find that J. Barned had no authority in law to make the purported determination, the subject matter of the present appeal. He was not an officer holding the position of chief of appeals in the district office of the Department of National Revenue. He was certainly not one of the other officials designated by the regulations to make a decision under section 61 of the U. I. Act.

[9] From Counsel's statement to me at the outset, I take it that this case is indistinguishable from that of Bancheri v. Minister of National Revenue. I entirely agree with what Judge Porter said in paragraph 56, and there is nothing that I could usefully add to his reasoning.

[10] It is with some reluctance, however, and not without a good deal of thought, that I have come to the conclusion that I am not in agreement with Judge Porter's disposition of the matter, which is embodied in paragraphs 59, 60 and 61 of his Reasons for Judgment, and in the formal Order signed by him on January 14, 1999. I say this with the greatest of respect to Judge Porter, and I say it with some reluctance, because I believe in the comity of judges within the same court, and the comity of courts. Our system of jurisprudence requires, so far as it is possible, that there be consistency and predictability in judicial decision-making. Nevertheless, as I said, I have reluctantly concluded that I should make a different disposition of the matter before me than did Judge Porter of the matter before him.

[11] I turn to the three concluding paragraphs of Judge Porter's reasons where he says the following:

I have now to consider what affect (sic) my conclusions have upon the purported determination from which the Appellant has brought this appeal. I am urged by counsel for the Minister in such case to hold that determination is null and void and does not exist, in which case there is nothing from which to appeal. The agent for the Appellant refers to the cost of the two-day hearing and the hardship which would fall upon the Appellant if she had to go through another appeal through no fault of her own.

Judge Porter goes on to say that he is sympathetic to that point of view, but that he must decide the matter as a question of law and that in his view, the Minister's position is the correct one. He continues:

I liken it to the situation dealt with by Pratte J. in the Ramawad case (above) where after holding that the Special Inquiry Officer did not have the delegated authority to make the decision which he did make, he said:

'the decision ... is not and cannot be considered as a decision of the Minister; it is therefore invalid.'

Judge Porter goes on to say: "thus, everything which flowed from it was a nullity". He then concluded that the same was applicable to the case before him, and at paragraph 60 said:

That is so in this case also. I hold that the purported determination, which is the subject of this appeal, was invalid. Thus, it is not a decision of the Minister and is of no effect. There is therefore nothing from which to appeal and the parties are back to square one.

As there is no valid determination, it is not appropriate to make any reversal, affirmation or variation of a determination under subsection 70(2) of the U. I. Act.

He then signed the formal Order, which reads as follows:

The purported decision of the Minister is quashed in accordance with the attached Reasons for Judgment.

[12] In my considered view, the decision in this case, and in the case before Judge Porter, because they cannot be distinguished, should not be considered a nullity from which no valid appeal can be taken. It is, without question, a decision illegally arrived at, and subject, in my view, to the remedial power of this Court found in sections 103, 104 and 105 of the Employment Insurance Act. I reach that conclusion for a number of reasons.

[13] First, the context in which this legislation is found, and in which the decision-making takes place, is our system of government, rooted as it is in Ministerial responsibility for what is done by departmental officers responsible to a Minister who, in turn, is responsible to the House of Commons. Acts done by officials of government departments, legal or illegal, are the acts, as a matter of constitutional law, of the Minister, not of course personally, but in his capacity as Minister. When decisions are made, lawfully or unlawfully, by persons employed in the Minister's department, the Minister must take responsibility for them, and indeed, over the course of history, there are Ministers who have resigned as a direct result of that responsibility.

[14] The decision in question here is one which was made by a departmental official in the course of the normal operations of the Minister's department. I understand that it is quite clear that the person who made the decision in this case is a person employed in the Appeals Division, whose normal duties involve reviewing matters of this kind. The letter of July 4, 1997 arises only out of him or her having in this case, and perhaps in others, overstepped the bounds of strict legal authority delegated by the Minister to that official and that authority has to be construed strictly, in order to maintain control over the exercise of discretion granted by Parliament to Ministers.

[15] Nevertheless, it is an act of the department for which the Minister is responsible, and, in my view, as a matter of constitutional law, it is a decision of the Minister. In contrast, if the Minister's gardener were to purport to make this decision, and were to write to the Appellant saying that he had decided to dismiss her appeal under the Employment Insurance Act, that, of course, would not be a decision, but would indeed be a nullity, because the Minister's gardener has no business dealing with such matters. But in this case, the decision emanates from that section of the Minister's department which is responsible for dealing with such matters.

[16] For most of this century, the Courts, and academic writers as well, have struggled with the words "void" and "voidable", and the concepts that they conjure up. In Durayappah v. Fernando,[7]Lord Upjohn, giving the unanimous advice of the Privy Council, said at page 353:

... Their Lordships deprecate the use of the word void in distinction to the word voidable in the field of law with which their Lordships are concerned because, as Lord Evershed pointed out in Ridge v. Baldwin, quoting from Sir Frederick Pollock, the words void and voidable are imprecise and apt to mislead. These words have well-understood meanings when dealing with questions of proprietary or contractual rights. It is better, in the field where the subject matter of the discussion is whether some order which has been made or whether some step in some litigation or a quasi-litigation is effective or not, to employ the verbal distinction between whether it is truly a "nullity", that is to all intents and purposes, of which any person having a legitimate interest in the matter can take advantage or whether it is "voidable" only at the instance of the party affected.

[17] There is, in my view, an important distinction between void ab initio at the instance of the person affected, which I believe to be this case, versus a decision which never existed at all, such as the example I gave a moment ago. I note that in Newfoundland Telephone Company Limited v. Commissioners of Public Utilities,[8]the Supreme Court of Canada had before it a situation in which it determined that, as a result of bias on the part of one of the members of the Board dealing with the rights of the telephone company, the Board made a decision which could not be permitted to stand. The Supreme Court found that decision to be void. The Court's conclusion is at page 645, where Mr. Justice Cory, delivering the unanimous reasons of the Court, said that the damage created by the apprehension of bias cannot be remedied, and he goes on to say that any subsequent order resulting from the hearing is void.

[18] The Supreme Court's decision in Ramawad v. Minister of Manpower and Immigration,[9] to which Judge Porter referred, and which seems to have been instrumental in leading him to his conclusion that no valid appeal was before him, is a case which arose out of the making of a deportation order by a special inquiry officer under the Immigration Act. Under that Act, the person before the special inquiry officer had a right to apply for a work permit, and the Minister had a discretionary power to give him one, under certain circumstances. The Court held that the special inquiry officer did not have delegated authority to exercise the Minister's discretion, and that when he purported to do so, that was not a disposition of what the Court found to be an application for the Minister's discretion. What the Court also found was that the special inquiry officer was bound at that point to adjourn the hearing, so that the Minister, or somebody with proper delegated authority, could deal with the application for a work permit. The special inquiry officer did not adjourn, as he was bound to do, but went ahead and completed the inquiry, and made a deportation order. The Court's conclusion was that the special inquiry officer, when he failed to adjourn, had lost jurisdiction. He was bound to adjourn, and he did not do so, and the Order that he subsequently made was not a valid order.

[19] It is not necessary, I think, to conclude from that case that the order of the special inquiry officer was a nullity. Indeed, there was a sufficient "order" there that it was subject to review by the Federal Court of Appeal, whose power to review the order and set it aside derived entirely from the provisions of section 28 of the Federal Court Act, whereby that Court was given power to review and set aside decisions and orders of federal boards, commissions and other tribunals. The matter went to the Federal Court of Appeal, which did not set the order aside, but nevertheless, it was an appeal from the decision of that Court which gave jurisdiction to the Supreme Court of Canada, which did set the order aside. The Supreme Court was, in making its order, exercising the power that should have been exercised by the Court below.

[20] I conclude, therefore, from Ramawad that lack of jurisdiction does not lead to a nullity, at least to the extent that a decision made after the loss of jurisdiction can be reviewed and set aside. In my view, it is unnecessary, artificial and against authority, to conclude that the decision is a nullity, and not a decision within the meaning of that word as it is used in section 103 of the Employment Insurance Act.

[21] When cases come to this Court involving the exercise of the discretion that is in issue here, and the circumstances of the making of the Minister's decision lead to the conclusion that there has been a want of natural justice, the result is that the Minister's decision is found to be unlawful and cannot stand, but there nevertheless is a sufficient decision to support an appeal to this Court under section 103. I see no reason to make any distinction between that case, the case of Ramawad, where the decision-maker lost jurisdiction before he arrived at a conclusion, and the present case, where a person working in the Appeals Division of Revenue Canada, in doing his job, steps in good faith (because there is no suggestion that it is otherwise) beyond the limit of the powers delegated to him, and makes a decision which is unlawful.

[22] Certainly, the Appellant in this case, when she received the letter appearing to be signed by Mr. Gillis, on July 4, 1997, could not have thought that it was anything other than a decision of the Minister. She may well have questioned whether it was a valid decision, she may well have questioned whether it was a correct decision, but, like anybody else reading it, she would recognize it for what, in my view, it was, which is an exercise, or at least a purported exercise, of the Minister's power to decide. In my view, it would make no sense to reach the conclusion that this Court could remedy a case in which an applicant trying to get unemployment insurance did not get a fair hearing on the question of arm's length, or one in which the person exercising the Minister's validly delegated authority, for some reason, lost jurisdiction in the middle of the proceedings, but not a case such as this, where the person who, in good faith, doing his job, made the decision, but did not have a proper delegation of authority. Certainly, I find nothing in Mr. Justice Pratte's reasons in Ramawad, nor in those of Mr. Justice Cory in Newfoundland Telephone, that drives me to that conclusion.

[23] I am reinforced in this view when I consider the matter simply as a matter of interpretation of the statute, specifically the phrase that appears in subsection 103(1) of the Act which provides that Ms. Lord "may appeal from the decision to the Tax Court", I must consider what the word "decision" in that phrase means. In New Brunswick Electric Power Commission v. Maritime Electric Company Limited and National Energy Board,[10] the Federal Court of Appeal was asked to stay an order of a tribunal while that order was subject to the process of judicial review before the Court. The Federal Court Act, at that time, contained no specific words authorizing the Court to stay such decisions, pending its review. The Federal Court of Appeal, faced with a situation in which its jurisdiction could not be effectively exercised because the decision that was under review would become moot before the review process had run its course, found as a matter of statutory interpretation, that it did have an implied authority under the statute to grant a stay, where that was required for the effective disposition of an application before it.

[24] I find myself in a not identical, but similar, situation. The scheme of the Employment Insurance Act is to put relief in the hands of people who find themselves temporarily out of work, by way of replacement of their wages. It necessarily involves a mechanism to settle disputes as to entitlement between the person unemployed on one hand, and the government on the other.

[25] Section 103 is an integral and important part of that mechanism, and in my view, parliament should be taken to have intended that it work efficiently. There is a well-known presumption in the interpretation of statutes against that interpretation which will cause great inconvenience, if there is another possible interpretation. In this case, and I note that Judge Porter was of a similar view, considerable inconvenience will flow if I conclude that I am unable to deal with this matter, and that it must go back to the Minister to decide over again properly, with the prospect that the Minister, should he be reluctant to do that, would have to be forced by proceedings in the Federal Court, either for a declaratory judgment, or for an order in the nature of mandamus, to exercise his jurisdiction, all subject to the matter coming back some day to this Court under section 103. That to my mind would work great inconvenience, and would not assist, but would greatly thwart, the efficient administration of the Act, and the achievement of its purposes.

[26] I prefer an interpretation of the word "decision" in subsection 103(1) which would embrace all decisions made by the Minister, whether they are made lawfully or unlawfully, and when unlawfully made, whether that unlawfulness stems from an error in natural justice, or from loss of jurisdiction during the proceedings, or, as here, from an exercise of the Minister's jurisdiction by the wrong officer of his department.

[27] For these reasons, the word "decision" in my view, includes the document that was sent to the Appellant with the stamped signature of Mr. Gillis on it, no matter what latent deficiencies lay behind the face of that letter. I take the view that there is before me a proper appeal.

[28] I want to stress that in reaching this conclusion, and I have said this before, I intend no disrespect to Deputy Judge Porter. I think it is evident from the last page of his reasons that the proper arguments were not advanced before him. I think if they had been, he would likely have reached the same conclusion that I have.

[29] I was asked by counsel for the Minister at the opening of the hearing to adjourn the matter, because of the facts that she put before me. I declined to do so, and I find that there is a valid appeal before me. It follows that the first stage of the proceedings establishes that there is an invalid order. I proceeded then to hear evidence from the Appellant, and from Mr. Lord, so that I might exercise my discretion pursuant to paragraph 5(3)(b), as the Court of Appeal has said I should.

[30] Considering, then, the second stage of the matter, the facts are that Cecil Lord started his garage business in St. Stephen, New Brunswick in 1981, in what was then quite a small way. He has expanded it over the years. In 1985, he incorporated it, and since then he has been the sole shareholder, the sole director, and the only person who makes decisions for the business. In 1988, he hired the Appellant who then was Janette Hankins. She was not at that time married to Mr. Lord. She had, however, studied bookkeeping at a community college in St. Andrews, and she was qualified to do the office work that he needed to have done. His business was not then a very large one, and it is still not a very large one, but like all businesses, it receives paper, and it needs to generate paper of its own. It is required by government to file tax returns of at least two sorts; it needs to file fuel returns with the provincial government; and Mr. Lord said quite candidly that none of this was the type of work that he could do, nor I think was he particularly interested in doing it. He therefore hired somebody to do it for him.

[31] By 1996, his business had grown to the point where he had several trucks on the road. He had two full-time drivers, and sometimes as many as four others; he has two mechanics working in his garage, principally to repair his own vehicles, and also, I understand, doing some other repair work as well. He himself spends most of the time out generating business away from the location of his garage, which is adjacent to his home.

[32] He has created an office in his home, a photograph of which was made an exhibit. It is not unlike many other home offices. In the home, it has some separation from the normal living area. It has a computer, which is used entirely for the business, a fax machine, a photocopier and a telephone, all of which are used entirely for the business.

[33] The evidence, and it was scarcely challenged, was that the Appellant when she is working for her husband, because the work is sporadic, and I shall come back to that in a moment, starts at about 8:30 a.m., and she works a full day. Her duties involve bookkeeping, banking, answering the telephone, taking messages on the telephone for her husband, and presumably for some of the others as well, preparing H.S.T. returns, fuel returns for the provincial government, keeping records with respect to the maintenance of vehicles, which I believe is mandated by the provincial government, and she also spends a good deal of time doing errands of various kinds, the most time-consuming and the most important of which are to pick up parts needed to repair the vehicles. Those parts may have to be obtained from as far away as Hartland and, frequently, getting parts would take her to St. John, Fredericton and other places an hour or more away from St. Stephen.

[34] I am satisfied on the evidence that when the Appellant is working at her husband's business, she is doing a full day's work. She is paid $300 per week for it. The evidence was that from time to time Mr. Lord has to hire others to perform this function, when the Appellant is working elsewhere, and when he does, that is what he pays them. That evidence was given by him, it was not cross-examined on, and it satisfies me that Mrs. Lord's remuneration is at what might be called the market rate.

[35] Counsel for the Minister submitted that I should at least view with some suspicion the sporadic nature of the Appellant's employment at her husband's business, and I have certainly not overlooked it. Exhibit A-1 is a pay sheet for the period of employment that was in question in this appeal. It shows that she worked two weeks in the month of August 1996, one week in the month of September 1996, one week in the month of October 1996 and four weeks in the month of November 1996. As I understand the oral evidence, this is not an uncommon pattern of employment, and I suspect that it may have had some influence on the Minister's employee's decision-making, but that is not a matter I need to decide in view of the other frailties in that process.

[36] Mr. Lord's business, as I said, is not a large one. I am satisfied by his evidence, and Mrs. Lord's evidence, that it does not require a full-time bookkeeper, 52 weeks of the year. For one thing, the business is virtually at a stand-still for three months in the spring when there are restrictions on weights that may be hauled over the highways. Mr. Lord's trucks haul logs and wood chips, and his evidence was that in order for that to be an efficient revenue-producing process, he has to be able to haul 100% and not 80%, as he is restricted to in those months. So the hauling operation is at a stand-still for a quarter of the year. It is also at a stand-still for one month in the fall, when the pulp mill is shut down. It also is a business which, even when it is operating with all the trucks and both mechanics busy, probably does not need full-time, five days a week, four weeks a month, a bookkeeper.

[37] Mrs. Lord has other employment with a customs broker in the town of St. Stephen where she does similar work, also on a sporadic basis. As I understand the evidence, she is on call there, and is used by that business to replace its regular employees when, for some reason, one of them is unable to work, or during peak times. She knows that business, and she is able to go there and fill in for them easily. When she receives a call requesting her to do so, she discusses that with her husband, and they consider whether the needs of his business are such that she cannot leave it, or whether they are such that she can go and work for the customs broker, and allow work to pile up in her husband's office to be done at a later date.

[38] I do not find this to be a circumstance which precludes the working relationship being one that might be entered into between Mr. Lord and another bookkeeper. It is certainly one of the circumstances of the employment, but I am satisfied that, given the economic context in which Mr. Lord operates his business, it is a perfectly sensible arrangement for him to have, whether with his wife, or with an arm's length bookkeeper.

[39] The other factor that I am bound to consider is the terms and conditions of employment apart from the one I have just dealt with, and they appear to be the same as one would expect to find in terms of hours, in terms of the duties to be performed, in terms of the working circumstances. The only difference is that the office is in what has been since they were married in 1991, the home of Mr. and Mrs. Lord. When someone else is working in the office in her place, she is not working in her own home, but at Mrs. Lord's home. This is an inevitable result of this being a home-office, and I do not consider that it is necessarily unique to a husband and wife working relationship.

[40] The importance of the work performed is also a factor that I have to consider. I am satisfied by the evidence that the work Mrs. Lord does is extremely important. There are at least three, maybe four, types of government reports which must be completed and filled out, and if they are not, Mr. Lord's business will have serious problems with more than one government department. His trucks will not operate without the parts that Mrs. Lord's retrieves for him. The phone must be answered, faxes must be sent, records must be put on the computer, and Mr. Lord is unable to do any of those things. He does, when it is necessary, go and get parts himself I believe, but I doubt he could do that on a regular basis, and it would be a waste of his particular talents. Having considered all of the factors enumerated in paragraph 5(3)(b) of the Act, I am of the view that it is reasonable to conclude, and I do conclude, that Mr. Lord would have entered into a substantially similar contract of employment with someone with whom he is at arm's length, and indeed that he has done so from time to time. The result, therefore, is that the appeal will be allowed, and the Minister's decision will be varied. It will be varied in this way: I find that during the period in question, between August 19, 1996 and November 22, 1996, the Appellant, when working for C.D. Lord & Son Ltd., was engaged in insurable employment. I have no power to award costs.

Signed at Ottawa, Canada, this 11th day of February, 1999.

"E.A. Bowie"

J.T.C.C.

---