Canada v. Bayside Drive-In Ltd.
A-626-96
Isaac C.J.
25/7/97
13 pp.
Applications for judicial review of Tax Court decision allowing repondents' appeals from MNR's determinations individual respondents not engaged in insurable employment with Bayside Drive-In Ltd. (payor) during relevant periods-Payor operating fast-food restaurant on seasonal basis in Nova Scotia-Family-owned and family-run business, outstanding shares owned equally by husband, wife, son-Wife and son appealing-Son worked 40 hours per week, wife, 48 hours per week-Tax Court Judge held entitled to conduct appeals as trials de novo as Minister had failed to give sufficient weight to facts before him: work performed by respondents and their contributions to payor's success-Having determined reasonable to conclude on balance of probabilities respondents and payor would have entered into substantially similar contracts of employment if had been dealing at arm's length, Tax Court Judge concluded Minister erred in failing to exercise discretion under Unemployment Insurance Act., s. 3(2)(c) to deem respondents at arm's length for purposes of Act, and allowed appeals-Applications allowed-When hearing appeal from determination by Minister under Act, s. 3(2)(c), Tax Court required to undertake two-stage inquiry-Threshold stage requiring Tax Court ensure Minister has exercised discretion in lawful manner (whether Minister acted in bad faith or for improper purpose or motive, whether Minister failed to take into account all of relevant circumstances, whether Minister took into account irrelevant factor)-View that failure by Minister to give sufficient importance to specific facts ground for reversible error not supported by this Court's case law, and wrong in principle-Tax Court Judge in effect overruled Minister's discretionary determination without first having concluded determination made in manner contrary to law-In doing so, usurped discretionary authority entrusted to Minister by Parliament-If Tax Court Judge satisfied Minister exercised discretion in manner contrary to law, Tax Court in de novo situtation in sense must undertake independent review of evidence on basis of record already before it-Proceedings in Tax Court cannot be transformed into trial or appeal de novo in formal sense of term-While Tax Court's review of evidence at second stage of inquiry de novo, appeal itself is not, and cannot be transformed into, trial de novo-Tax Court not entitled to treat proceedings as trial de novo simply because it would have come to different conclusion on merits had it decided issue at first instance -Unemployment Insurance Act, R.S.C., 1985, c. U-1, s. 3(2)(c).