Date: 19971124
Docket: 96-1621-UI
BETWEEN:
HECTOR ST-LAURENT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Prévost, D.J.T.C.C.
[1] This appeal was heard at Rimouski, Quebec on October 27, 1997.
[2] The appeal is from a decision of the Minister of National Revenue ("the Minister") dated August 1, 1996 that the appellant's employment with 92481 Canada Ltée, the owner of Bon-Bois Enr. ("the payer"), from August 2 to October 29, 1993, August 1 to October 28, 1994 and August 7 to November 10, 1995 was not insurable because it was not held under a contract of service.
[3] Paragraph 5 of the Reply the Notice of Appeal reads as follows:
[TRANSLATION]
5. In arriving at his decision the respondent Minister of National Revenue relied inter alia on the following facts.
(a) Since July 12, 1989 the payer has operated a business specializing in the cutting and sale of firewood. (A)
(b) The payer buys full-length wood and cuts it before selling it at retail as firewood. (ASA)
(c) Réal St-Laurent, the appellant's brother, was the sole shareholder of the payer beginning in June 1979 and the company was inoperative after 1984. (A)
(d) In 1989 Réal St-Laurent allegedly transferred his shares to the members of his family because the appellant wanted to carry on his personal woodcutting business by incorporating. (CD)
(e) The appellant has operated his business for six or seven years under the trade name "Bon Bois Enr."; it was decided on June 30, 1989, at a meeting of the alleged shareholders of the payer, to begin the payer's activities on July 12, 1989 under the trade name "Bon Bois Enr.", which personally registered in the appellant's name. (CD)
(f) When the payer's activities resumed, the alleged shareholders were:
- Jean-Pierre St-Laurent, the appellant's son, with 26 percent of the shares;
- the appellant, with 25 percent of the shares;
- Réal St-Laurent, the appellant's brother, with 10 percent of the shares;
- Nicole Ouellet, the appellant's sister-in-law, with 15 percent of the shares;
- Réjeanne Lavoie, the appellant's de facto spouse, with 14 percent of the shares;
- Guylaine St-Laurent, the appellant's daughter, with 10 percent of the shares.
* The payer allegedly issued 100 shares with a par value of $10 each; the appellant was the only shareholder who paid for his shares. (D)
(g) During the years at issue the payer allegedly engaged in the following activities:
in 1993 it bought wood from the "Bégin & Bégin" sawmill and sold wood cut in 1992;
in 1994 it cut wood on the appellant's private land and sold wood cut in 1993;
in 1995 it bought wood from the "Bégin & Bégin" sawmill, cut wood on the appellant's private land and sold wood cut in 1994. (CD)
(h) The appellant is the only shareholder who worked throughout the periods at issue, namely 13 weeks in 1993, 13 weeks in 1994 and 14 weeks in 1995. (DAD)
(i) The only other shareholder who occasionally helped the appellant during these periods was Réal St-Laurent; he allegedly worked six weeks in 1993, six weeks in 1994 and nine weeks in 1995. (D)
(j) The appellant made all the decisions about the payer's operations; he decided when operations would begin and end, determined where and when he would buy and cut wood, decided on hiring and firing and was responsible for deliveries. (D)
(k) The appellant alone ran all the risks involved in operating the payer; he alone guaranteed the payer's $25,000 credit line and personally stood surety for two $6,500 loans obtained by the payer. (D)
(l) In 1989, when the payer's activities resumed with its alleged shareholders, the appellant transferred a skidder he owned personally to the payer's name: the payer was supposed to reimburse the appellant for the payments he had already made to purchase it, but to date nothing has been done. (D)
(m) During the periods at issue the appellant allegedly received a fixed weekly salary of $546 in 1993, $396 in 1994 and $442 in 1995. (DAD)
(n) None of the payer's alleged shareholders exercised any control over the appellant's work. (CD)
(o) The appellant rendered services outside the periods at issue. (D)
[4] In the preceding extract from the Reply to the Notice of Appeal the Court has indicated, in parentheses after each subparagraph, the comments made by counsel for the appellant at the start of the hearing.
(A) = admitted
(ASA) = admitted subject to amplification
(CD) = categorically denied
(DAD) = denied as drafted
(D) = denied
Appellant's evidence
According to his testimony
[5] He had been in the firewood business in the past before buying two hotels, which he operated for some time.
[6] During the recession, he had to declare bankruptcy and then went back to the woods.
[7] His brothers had a business whitewashing farm buildings and cutting wood but they did not run it as he would have liked and it was not doing well.
[8] The payer was then used, as a timber permit for over 10 cords of wood will not be issued to someone without a company.
[9] The appellant's brother Réal had in any case not used [TRANSLATION] "his" company for some years and it was he who continued to operate it.
[10] This also cost less than [TRANSLATION] "starting up" a new company.
[11] His brother Réal then transferred his shares in the payer and in return he received 10 percent of the shares in the reorganized company.
[12] The appellant had big plans at the time and even wanted to enter the merchantable timber market: accordingly, he had the trade name "Bon Bois Enr.", which he held personally (Exhibit I-1), transferred to the payer (Exhibit I-2).
[13] However, the timber concessions were redistributed and the payer lost its timber rights completely.
[14] The firewood business lasts for a short period each year, from July to late November, about 12 to 15 weeks a year: marketing is not easy as there is considerable competition, and the result is that the payer was left with surpluses each year.
[15] With all the businesses he had operated, the appellant made a solid contribution to the company.
[16] During the years at issue the payer hired two or three employees in addition to the appellant and his brother Réal.
[17] Little money is available to firewood businesses, which always have to get by on their own.
[18] The appellant's de facto spouse, Réjeanne Lavoie, answered the telephone and took firewood orders, but she was not on the payroll and was not paid; the same telephone number was used for the payer and for their home.
[19] His sister-in-law Nicole Ouellet, his brother Réal's wife, kept the books [TRANSLATION] "till they were sent to the accountant", but she was not paid either.
[20] The appellant's son Jean-Pierre, a civil engineering technician, had experience in administration and wanted to get ahead: he had worked with him in the woods in the past.
[21] When the appellant returned to this line of work techniques had changed but he continued using the old methods, namely the skidder and power saw.
[22] His daughter Guylaine also works for the payer but she is not paid either: she keeps the minute book.
[23] There is much more work to be done than money to be made in the firewood business.
[24] If the payer does well some day [TRANSLATION] "all the volunteers who worked for it can be paid".
[25] The appellant's brother Réal works mainly on sawing: last year he was able to [TRANSLATION] "do" 12 weeks' work but this year he [TRANSLATION] "did" less: he works only when the appellant needs him.
[26] The appellant mostly makes deliveries.
[27] There are meetings of the payer's shareholders but the appellant, his son Jean-Pierre and Nicole make most of the decisions, keeping Réal informed.
[28] Although subparagraph (g) above was categorically denied by counsel for the appellant, its final paragraph is true.
[29] Though subparagraph (k) was denied, it is quite true that the manager of the local Caisse populaire was the appellant's friend and had got him to secure the payer's $25,000 credit line by means of a hypothec on his cottage; it is also quite possible that he personally stood surety with that institution for two loans of $6,500 each obtained by the payer.
[30] As regards subparagraph (l), the skidder was paid for in part by the payer and in part by the appellant: when it was purchased the appellant had made a down payment of several thousand dollars.
[31] So far as subparagraph (m) is concerned, it is true the appellant could have been given a larger salary but the payer could not have absorbed it and in any case his physical condition did not allow him to do more.
[32] In that business people want their firewood mostly on Saturdays and work has to be organized accordingly in order to give them good service.
[33] The appellant's father died when he was only 15 and he has experienced very hard times: nowadays [TRANSLATION] "everyone is spoilt". He has always been honest, has paid his premiums and is entitled to his unemployment insurance benefits.
[34] He had to cancel an insurance policy and withdraw his RRSPs in order to survive, and so did his spouse.
[35] He worked at least 15 weeks in 1996 and 15 to 17 weeks in 1997.
[36] The appellant registered Bon Bois Enr. on April 25, 1988 and transferred it to the payer on August 18, 1989; its head office is in his home.
[37] His son Jean-Pierre worked outside the home and his wife did as well: consequently customers rarely called their home.
[38] Documents relating to the payer were kept at the appellant's home but there were also times when some were [TRANSLATION] "being processed" by Nicole Ouellet.
[39] The appellant was indeed the only one who paid for his shares in the payer.
[40] It can be seen from the payer's financial statements (Exhibit I-3) that for the year ending July 31, 1995, 100 shares had been issued but only 25 shares worth $10 had been paid for, and 75 shares worth $10 were still outstanding. The balance could easily have been eliminated at a meeting in view of the many services rendered, but the corporate papers were not complete as the payer did not have the means to retain real professionals to keep its books.
[41] The appellant stood surety for the payer by means of a notarized hypothecary security (Exhibit I-4); he did this because the [TRANSLATION] "others" did not have enough equity to do so and because it was absolutely necessary to buy wood in order to resell it.
[42] At one point four of the brothers in his family were in the hotel industry but they all had to close down in the same year due to the major recession.
[43] On February 15, 1995 the appellant again had to stand surety for the payer (Exhibit I-5) for up to $6,500 in order to purchase a truck, again at the request of the Caisse populaire's manager, who again wanted value as security from him.
[44] In order to receive unemployment insurance benefits during the periods when he was laid off the appellant had to have complete work periods, but outside the periods at issue he would occasionally make deliveries and answer the telephone throughout the year even though he was not paid for doing so: he might thus work for the payer free of charge for several hours a month.
[45] The appellant has not been reimbursed by the payer for the payments he made on the skidder after it was purchased; the power saws he used while working for the payer were his personal property.
[46] Profits are small in the firewood business: although a cord should be sold for $55 it often had to be given away at $45 because of the intense competition in the business.
[47] The appellant did own timber lots but when his wood was cut the profits went to the payer and he received no compensation.
[48] The only reason it was he who chose the employees to be hired was that he had extensive experience in the business.
[49] The appellant signed a statutory declaration (Exhibit I-6) on October 20, 1995. It states (p. 1): [TRANSLATION] "In 1994 I cut wood on my private land in St-Guy and sold wood from 1993. In 1995 I purchased wood from the Bégin & Bégin sawmill, cut wood on my private land in St-Guy and sold wood from 1994". It further states (p. 2): [TRANSLATION] "I controlled when the employees began work and told them what to do at work . . . I supervised the running of the business".
[50] However, he discussed the running of the business with his son Jean-Pierre, who was its president.
[51] When shown a number of bills sent to him or to the payer (Exhibit I-7) the appellant acknowledged that the first dated from July 31, 1994, the next eight from November 1994 and the ninth from December 7, 1994, which were outside the periods at issue: he explained that the reason he bought gasoline was to make deliveries, which he did without pay.
[52] When he was then shown a series of deposits made by the payer (Exhibit I-8), he acknowledged that on September 9, 1993 it had deposited a cheque from him in the amount of $3,000: he explained he had to invest this amount because the credit line of the business [TRANSLATION] "had not come through".
[53] A possible explanation for the slip dated September 3, 1993, which indicates the deposit of a $1,800 cheque with the notation "Hector St-Laurent", was that a customer had made a cheque out to the appellant instead of the payer and that he had then endorsed it to the payer for deposit.
[54] On his unemployment insurance benefit application (Exhibit I-9) in respect of the first period at issue, the appellant answered [TRANSLATION] "No" to question 41, which read [TRANSLATION] "Were you related to one or more of your employers by blood, marriage (including common-law) or adoption?", and his reason for doing so was that the question was ambiguous as a person cannot be related to a company. However, he did not ask for information before answering and could not really say this was a good answer.
[55] On his application for such benefits (Exhibit I-10) in respect of the last period at issue he answered that he had no business dealings with his employer, while on the application for the preceding period (Exhibit I-9) he answered this question in the affirmative.
[56] The payer's other employees who worked sawing timber also supplied their own power saws.
[57] The appellant's salary was generally set one or two weeks before operations began and did not vary for the remainder of the season.
[58] In 1993 and 1994, 20 percent of the wood used by the payer belonged to the appellant, while in 1995 the proportion was 40 percent.
[59] The land owned by the payer is 206 feet across and 900 feet deep.
According to Jean-Pierre St-Laurent
[60] He is president of the payer.
[61] The reason he took an interest in this along with the others was that they had plans to obtain timber permits but the statutes and regulations were amended and their plans could not be carried out: they initially even intended to get into the lumber market.
[62] Mr. St-Laurent had problems where he worked and also wanted to make his employment secure in this way: recently, they even discussed a sugarbush project.
[63] He handles administration, technical decisions and work to be done on equipment.
[64] The board of directors meets twice a year, once before work begins and another time near the end thereof; other decisions are made by telephone calls and brief meetings.
[65] The directors decide when work will start but the decision depends on natural more than human factors as the weather is so changeable.
[66] Equipment purchases of course [TRANSLATION] "come" as required.
[67] Mr. St-Laurent did not have to stand surety for the payer as the Caisse populaire decided who should do so and it was of course always the most solvent person who got stuck with this.
[68] Nicole Ouellet generally prepared the payer's cheques but Mr. St-Laurent signed them most of the time.
[69] The annual general meeting takes place in November of each year.
[70] It is possible that the payer has not yet repaid Mr. St-Laurent's father in full for the payments he personally made on the purchase of the skidder.
[71] The turnover of the business is $25,000 to $28,000 annually and there are not really any profits: the Bégin & Bégin sawmill is the principal supplier of wood to the payer.
[72] Mr. St-Laurent did not pay for his shares in cash but through his participation in work for the business.
[73] He signed a statutory declaration (Exhibit I-11) on December 19, 1995.
[74] Though the declaration states (p. 1) that [TRANSLATION] "the business consists of buying timber in lengths . . . from various suppliers", Bégin & Bégin is now the main supplier.
[75] Though it also states (p. 1) that [TRANSLATION] "the workplace of the business is located . . . on his father Hector's private land", this is a mistake as the land is in fact owned by the payer company.
[76] The declaration also states (p. 2) that [TRANSLATION] "it is my father . . . who looks after running the business . . . . My father handles the hiring of employees and the period of work . . . . Hector St-Laurent looks after most things . . . . I sign the records of employment and my father fills them out . . . ."
[77] Mr. St-Laurent's father did not give the skidder to the payer, as the payer has made payments to the financial institution which initially financed it.
[78] However, Mr. St-Laurent does not recall the balance his father owed the institution when he transferred the piece of equipment to the company.
According to Nicole Ouellet
[79] She is secretary of and holds 15 percent of the shares in the payer; she obtained them free of charge on the condition that she spend three or four hours a month keeping the books, which she has done.
[80] She [TRANSLATION] "does" the payrolls, the appellant makes up the cheques and she [TRANSLATION] "does" the records of employment.
[81] At this stage of the hearing counsel for the appellant filed the following exhibits by consent:
A-1: the payer's payrolls for the years at issue which show the salaries mentioned in subparagraph (m) above;
A-2: the payer's share certificates, which correspond to the names given in subparagraph (f) above;
A-3: the payer's certificate of incorporation; and
A-4: a bundle of resolutions of the payer, including one dated June 30, 1989 to the effect that the part of the payment for the skidder made by the appellant would be reimbursed only when the company could do so.
According to the appellant in additional evidence
[82] He did think at the outset that he had stood surety for only $25,000, but after seeing Exhibit I-5 he realized he had then stood surety for another amount of $6,500.
[83] In fact if he remembered correctly he had quite likely also stood surety for an additional amount of $6,500.
Argument of counsel for the appellant
[84] The appellant will soon be 65 years old.
[85] The reason for the corporate structure is that a company was needed to obtain timber permits for over 10 cords.
[86] Even the Quebec government hires casual workers in the summer, and others in the winter, so as to qualify them for unemployment insurance benefits.
[87] The payer's corporate organization is far from perfect and if it were perfect the hearing would not really have been necessary.
[88] Moreover, if everything were perfect this might be said to be intentional.
[89] The appellant might be the prime mover in the payer but he has always acted in good faith: he alone has the specific skills to act as general manager and there is nothing to prevent such an officer being entitled to unemployment insurance benefits.
[90] The payer is not a sham company: it has financial statements and holds shareholders’ and directors’ meetings, and its share certificate register is properly kept.
[91] The reason the appellant had to stand surety for the payer was that the Caisse populaire required him to do so; it was not as a gift that the company was cutting wood on his land without paying him for it, as this had to be done to renew the forest.
[92] The appellant contributed to creating jobs and all the payer's employees did not [TRANSLATION] "do" the minimum number of weeks to qualify for unemployment insurance benefits.
[93] After the periods at issue his client ceased paying unemployment insurance premiums although he continued to do the same work as before.
[94] In his Reply to the Notice of Appeal the respondent used the words [TRANSLATION] "alleged" or "allegedly" when the facts reported by his client did not suit his case.
[95] The appellant is not an alleged shareholder: he is a real shareholder.
[96] Shares may be purchased while providing services to a company.
[97] Nothing was deliberately done to qualify the appellant for benefits and in any case he had earned them.
Argument of counsel for the respondent
[98] The respondent never alleged that the payer was a sham company, but it was in fact entirely and exclusively controlled by the appellant.
[99] Moreover, the appellant had registered his trade name before transferring it to the payer.
[100] According to the financial statements, $750 is still owed on the payer's shares.
[101] Section 25 of the Canada Business Corporations Act reads as follows:
25. (1) [Issue of shares] Subject to the articles, the by-laws and any unanimous shareholder agreement and to section 28, shares may be issued at such times and to such persons and for such consideration as the directors may determine.
(2) [Shares non-assessable] Shares issued by a corporation are non-assessable and the holders are not liable to the corporation or to its creditors in respect thereof.
(3) [Consideration] A share shall not be issued until the consideration for the share is fully paid in money or in property or past services that are not less in value than the fair equivalent of the money that the corporation would have received if the share had been issued for money.
(4) [Consideration other than money] In determining whether property or past services are the fair equivalent of a money consideration, the directors may take into account reasonable charges and expenses of organization and reorganization and payments for property and past services reasonably expected to benefit the corporation.
(5) [Definition of "property"] For the purposes of this section, "property" does not include a promissory note or a promise to pay.
Section 25(3) was not observed: it is true that a resolution could have been passed to regularize it but this was not done.
[102] In In The Matter of Javelin International Limitée: Michel Robert, requérant, v. Suzanne Hillier, intimée, et Frederick H. Sparling and Melvin v. Zwaig, mis en cause, [1988] R.J.Q. 1846, Mr. Justice John H. Gomery of the Superior Court wrote (at p. 1853): "The issuance of the shares for an inadequate consideration made them a nullity, and the certificates in Respondent's possession are worthless pieces of paper".
[103] There is no evidence that the appellant was reimbursed by the payer for the initial payment made on the skidder.
[104] The sureties provided by the appellant in support of the payer for $25,000, $6,500 and $6,500, were substantial and he was the only person to provide them.
[105] It is clear from the invoices (Exhibit I-7) that the appellant did work free of charge outside the periods at issue: he received telephone calls and made deliveries of firewood throughout the year.
[106] He provided wood to the payer free of charge and this was a big gift.
[107] It is true that when the respondent doubted the information given by the appellant he used the words [TRANSLATION] "allegedly" or "alleged", but there is nothing wrong in that.
[108] The word [TRANSLATION] "alleged" was used in subparagraph (f) above because even in 1995 the shares of the other shareholders had not been paid for yet.
[109] In subparagraph (j) the appellant admitted at the hearing that it was he who hired and fired staff; moreover, in his statutory declaration (Exhibit I-11) Jean-Pierre St-Laurent said that it was the appellant who looked after running the business.
[110] It is clear that the payer could not have existed without the appellant, and in making a decision the facts must be looked at as a whole.
[111] In Carmelo Scalia v. M.N.R. (A-222-93), Marceau J.A. wrote for the Federal Court of Appeal (at p. 2):
On analysing the evidence, however, we find that the applicant had such ascendancy over the company, its activities and the decisions of its board of directors, which was composed of himself, his nephew and his sister-in-law, that there could not have been the independent relationship between himself and the company that is necessary to the creation of a true subordinate relationship.
According to counsel for the appellant in reply
[112] It is unclear whether there was a sale of shares by Réal St-Laurent to the other shareholders or an issue of new shares by the treasury when the payer was reorganized.
[113] A general manager may have control over employees, and in addition there were meetings of the board of directors.
Analysis
[114] The evidence, and it should be added that the burden of proof was on the appellant, does not show clearly in what way Réal St-Laurent transferred his shares to the other shareholders, but in deciding the instant case the Court will simply accept that on paper the appellant had 25 percent of the shares.
[115] It is clear that the appellant wished to continue his business as a corporation but with the same trade name, and that the other shareholders did not pay for their shares.
[116] Although subparagraph (h) was denied as drafted, it seems clear that it sets out what happened.
[117] Subparagraph (i) was denied, but there was no evidence to the contrary.
[118] Subparagraph (j) was also denied, but the evidence as a whole was that what it says is true.
[119] Subparagraph (k) was denied, but the appellant readily admitted it at the hearing.
[120] As regards subparagraph (l), no evidence was presented that the appellant was reimbursed for the payments he had made on the skidder; moreover it is clear from the aforementioned resolution that the repayment would be made only when the company could do so.
[121] Subparagraph (m) was denied, but the payrolls confirm what it says.
[122] Subparagraph (n) was also denied, but no evidence was presented that the other shareholders had any control whatever over the appellant's work.
[123] Although subparagraph (o) was denied there is ample evidence that the appellant rendered services to the payer outside the periods at issue.
[124] It is unfortunate that the appellant and his brothers did not succeed in the hotel business, but that is of course not what the Court has to decide in reaching its conclusion in the instant case.
[125] The objectives of the appellant and his family at the outset are not really relevant, as the Court must look at the actual operation as a whole to determine whether the employment was insurable.
[126] It is apparent that the firewood business is not conducted year-round and, on the uncontradicted evidence, there is considerable competition in this business in which little money is available and there is little profit to be made.
[127] The appellant appeared to the Court to be a good person who has made a contribution to society by, among other things, creating employment, but that is not what must be determined in deciding the instant case either.
[128] The work of Réjeanne Lavoie, Nicole Ouellet, Guylaine St-Laurent, Jean-Pierre St-Laurent and Réal St-Laurent is not at issue and there is no need to discuss it further.
[129] There were undoubtedly meetings of the payer's shareholders and directors, but as in Scalia the appellant had such ascendancy that there could not have been between himself and the company the independent relationship that is necessary to the creation of a true subordinate relationship.
[130] The sureties provided to the payer by the appellant alone also show that he was really in control.
[131] This is also demonstrated by the circumstances of the transfer of the skidder.
[132] In these circumstances, the appellant's salary is irrelevant to the outcome of the instant case.
[133] The fact that premiums have been paid does not automatically entail an entitlement to collect unemployment insurance benefits, as there is no such entitlement unless the employment was insurable, which it was not in the instant case.
[134] The appellant's employment after the periods at issue is irrelevant to the judgment in the instant case.
[135] The work done by the appellant for the payer without charge outside the periods at issue shows that his employment was not held under a true contract of service.
[136] He gave his wood to the payer and though it may not have been worth much it was still a gift.
[137] Jean-Pierre St-Laurent cannot really be running the business as he does not even know how much it still owes his father for the transfer of the skidder.
[138] The invoices (Exhibit I-7) clearly show that the appellant worked for the payer year-round.
[139] Nor would a true employee have advanced $3,000 to his or her employer while waiting for its credit line to be approved.
[140] The appellant's explanation of the deposit of September 3, 1993 in the amount of $1,800 was not clear, and it hardly needs repeating that it was he who had the burden of proof.
[141] The appellant was quite right not to think that his answer to question 41 in Exhibit I-9 was appropriate.
[142] His answers to another question in Exhibits I-9 and I-10 show how little respect he had for the Unemployment Insurance Act.
[143] It is natural for employees to supply their power saws in the woods and no conclusion can be drawn from that.
[144] The fact that the payer owns a 206-foot by 900-foot lot clearly does not by itself make the appellant's employment insurable.
[145] The possibility that the payer might run a sugarbush has not actually materialized yet and, moreover, it did not become a reality during the periods at issue.
[146] Jean-Pierre St-Laurent's testimony shows that he knows little or nothing about the payer's activities even though on paper he is its president.
[147] It is true that the appellant is getting older, but that is true of everyone.
[148] If the appellant had not used a corporate structure he would certainly not even have had a chance of qualifying for unemployment insurance benefits.
[149] While casual employment is indeed possible, casual employees are entitled to benefits only if their employment is really insurable, which is not true of the employment in the instant case.
[150] It is true that the payer has a corporate structure, but that does not make the employment in question insurable.
[151] The appellant's good faith is not in doubt and the payer is not a sham company.
[152] The weeks worked by the payer's other employees are irrelevant to the outcome of the instant case.
[153] After the periods at issue the appellant realized he was not eligible for unemployment insurance benefits and accordingly stopped paying premiums.
[154] The situation of the payer's other shareholders is not regular as, contrary to s. 25, quoted above, of the Canada Business Corporations Act and the judgment in Javelin, they did not pay for their shares before they were issued.
[155] There is nothing wrong with the respondent using the words [TRANSLATION] "alleged" or "allegedly" when he doubted the information supplied to him by the appellant.
[156] The appeal must therefore be dismissed and the subject decision affirmed.
"A. Prévost"
D.J.T.C.C.
[OFFICIAL ENGLISH TRANSLATION]
Translation certified true on this 5th day of October 1998.
Stephen Balogh, Revisor