EMPLOYMENT INSURANCE |
M.N.R. v. Vardy Villa Ltd.
A-142-01
2002 FCA 287, Linden J.A.
17/7/02
6 pp.
Application for judicial review of Deputy Tax Court Judge's decision lacked jurisdiction to decide case on basis of absence of arm's length relationship between corporate and individual respondents (five consolidated applications) which might have led to decision employment not insurable according to Employment Insurance Act, s. 3(2)(c)(i)-- Application allowed--Judge below erred in extending reach of Candor Enterprises Ltd. v. Canada (Minister of National Revenue--M.N.R.) (2000), 264 N.R. 149 (F.C.A.) which dealt only with cases under s. 3(2)(c)(ii), not with any case under s. 3(2)(c)(i)--S. 3(2)(c)(i) not requiring, as does s. 3(2)(c)(ii), Minister be satisfied about certain facts in order to decide whether contract of employment would be substantially similar if they had been dealing at arm's length--Whereas s. 3(2)(c)(ii) involving two-step procedure (decision employee, employer related; discretionary decision whether contract of employment substantially similar if dealing at arm's length), no two-step procedure under s. 3(2)(c)(i)--Where employer, employee not dealing at arm's length within meaning of Income Tax Act, employment "excepted"; no need for Minister to exercise discretion, express satisfaction about factual matters set out in s. 3(2)(c)(ii), unless parties related--Decisions under s. 3(2)(c)(i) subject to de novo review by Tax Court, consequently, issue may be raised for first time as alternative ground in reply to notice of appeal--Appeal under s. 70 challenges Minister's determination, not reasons therefor: Canada v. Schnurer Estate, [1997] 2 F.C. 545 (C.A.); Canada (Attorney General) (1993), 172 N.R. 374 (F.C.A)--Here, Minister's determination merely that employment not insurable--While reason initially given that no contract of service, nothing preventing Minister from adding alternative ground of no arm's length in reply to notice of appeal--Tax Court therefore had jurisdiction to consider s. 3(2)(c)(i), even though not raised until reply to notice of appeal filed in Tax Court--No unfairness in this, as applicant had time to prepare pleadings in response, evidence, legal arguments to counter new allegation--Employment Insurance Act, S.C. 1996, c. 23, s. 3(2)(c)(i),(ii), 70--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1.