[OFFICIAL ENGLISH TRANSLATION]
2000-588(EI)
BETWEEN:
CONRAD L'ESPÉRANCE,
O/A CONRAD L'ESPÉRANCE ET FILS ENR.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on January 31, 2001, at Montréal, Quebec, by
the Honourable Deputy Judge J.F. Somers
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Annick Provencher
JUDGMENT
The appeal is dismissed and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 27th day of February 2001.
|
"J.F. Somers" |
D.J.T.C.C.
Translation certified true
on this 17th day of October 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20010227
Docket: 2000-588(EI)
BETWEEN:
CONRAD L'ESPÉRANCE,
O/A CONRAD L'ESPÉRANCE ET FILS ENR.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard at Montreal, Quebec, on January 31, 2001.
[2] The Appellant has appealed the decision of the Minister of National Revenue (the "Minister") deciding that the employment of Martin L'Espérance, the worker, with Conrad L'Espérance operating as Conrad L'Espérance et Fils Enr., the payer, for the period from April 15, 1997, to January 15, 1999, was not insurable employment because there was no employment relationship between the worker and the payer during the period under appeal.
[3] Subparagraph 5(1) of the Employment Insurance Act reads in part as follows:
5. (1) Subject to subsection (2), insurable employment 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;
...
[4] The burden of proof is on the appellant. He has to show on a balance of evidence that the Minister's decision is unfounded in fact and in law. Each case stands on its own merits.
[5] In making his decision, the Minister relied on the following facts, which were either admitted or denied:
[TRANSLATION]
(a) The payer registered a declaration of registration of general partnership on April 15, 1997, indicating that [TRANSLATION] "Conrad L'Espérance and Martin L'Espérance are two partners of the business." (admitted)
(b) The names of the two partners are recorded under the [TRANSLATION] "owners' equity" for "Conrad L'Espérance et Fils S.E.N.C.". (admitted)
(c) The two partners did not sign a written agreement between them. (denied)
(d) The payer's business offered jointing services. (admitted)
(e) Conrad L'Espérance was a contractor and held a competency card, whereas the worker, Conrad's son, did not have a competency card and entered into a partnership with his father in order to obtain his competency card. (admitted)
(f) The worker worked as a jointer with his father during the period at issue. (admitted)
(g) The worker drew between $12 and $16 an hour from the business for the hours allegedly worked. (admitted)
(h) During the period at issue, the two partners accumulated their hours and recorded them under the worker's name to enable him to obtain his competency card more quickly. (denied)
(i) The worker operated his own business during the period at issue. (denied)
[6] The only witnesses in this case were Conrad L'Espérance and his spouse. The worker Martin L'Espérance was not present at Court.
[7] The evidence showed that the payer had registered a declaration of registration of general partnership on April 15, 1997, indicating that: [TRANSLATION] "Conrad L'Espérance and Martin L'Espérance are two partners of the business." That declaration was filed in Court as Exhibit A-1. The two partners' names are recorded under the [TRANSLATION] "owners' equity" for "Conrad L'Espérance et Fils S.E.N.C."
[8] The two partners did not sign a written agreement between them. According to Conrad L'Espérance, he assigned one percent of the interest in the partnership in order to meet the requirements of the Commission de construction du Québec. That arrangement made it possible for the worker Martin L'Espérance to obtain his competency card as a jointer. The worker ultimately obtained his competency card.
[9] During the period at issue, the son worked 30 hours a week and received an hourly salary of $14 in 1998 and $16 in 1999. He was paid by cheque.
[10] Conrad L'Espérance and his spouse were the only persons to sign the cheques. Conrad L'Espérance asserted that his son did not participate in the partnership's profits and losses. The son did not contribute financially to the partnership's operations. The accounting report for 1998 refers to the nature of the activities as follows: [TRANSLATION] "Conrad L'Espérance et Fils S.E.N.C. operates a jointing business. The business is not incorporated and the owners are Conrad L'Espérance and Martin L'Espérance."
[11] The point for determination is whether the worker is a partner with his father Conrad L'Espérance under the Employment Insurance Act. The declaration of registration adduced in evidence, the balance sheet prepared by the accountant and Conrad L'Espérance's testimony confirm that Martin L'Espérance is a member of the partnership.
[12] In Parent v. Canada (Minister of National Revenue - M.N.R.), [1999] T.C.J. No. 83, February 3, 1999, Judge Archambault of this Court reviewed the case law and the Act with respect to the decisive aspects and legal responsibilities of a partner in a business.
[13] Articles 2200, 2201, 2202 and 2203 of the Civil code of Québecare relevant for the purposes of this case and read as follows:
2200. A contribution consisting in knowledge or activities is owed continuously so long as the partner who undertook to make such a contribution is a member of the partnership; the partner is liable to the partnership for any profit he realizes from the contribution.
2201. Participation in the profits of a partnership entails the obligation to share in the losses.
2202. The share of each partner in the assets, profits and losses is equal if it is not fixed in the contract.
...
2203. Any stipulation whereby a partner is excluded from participation in the profits is without effect.
...
[14] At page 6 of the decision in Parent (supra), Judge Archambault says the following:
[26] The fact that Mr. Parent did not participate in the partnership's decisions does not necessarily mean that he was not a partner. Article 2216 of the C.C.Q. ... provides that every partner is entitled to participate in collective decisions and may not be prevented from exercising that right by the contract of partnership. There is nothing in the evidence to show that François Parent could not participate in the partnership's decisions. The fact that he did not does not necessarily mean that he was not entitled to do so. A distinction must be drawn between the right to participate in decisions and the failure to exercise that right. Moreover, a partner may delegate management of the partnership to one of the other partners....
[15] In Carpentier v. Canada (Minister of National Revenue - M.N.R.), [1996] T.C.J. No. 502 (95-1684(UI)), Judge Lamarre states as follows:
[19] In view of the features associated with a contract of partnership both under the C.C.L.C. and under the C.C.Q. and the tests used by the courts to determine whether a contract of service exists, it seems clear to me that a partner cannot be an employee in his own partnership. Since as partner he participates in the decision-making of the partnership in pursuit of the common goal of the partnership and shares in profits and losses, he is automatically in control and therefore cannot at the same time act as a subordinate to himself, even if there are several partners.
[16] According to the case law that was adduced, it should be concluded that the worker in this case was operating his own business with his father. Even though his financial interest was minimal, he was a participating partner within the meaning of the Act. In Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553, the worker rendered services within his own business and not under a contract of service.
[17] The appeal is dismissed.
Signed at Ottawa, Canada, this 27th day of February 2001.
|
"J.F. Somers" |
D.J.T.C.C.
Translation certified true
on this 17th day of October 2003.
Sophie Debbané, Revisor