Tax Court of Canada Judgments

[OFFICIAL ENGLISH TRANSLATION]

Docket: 2003-2154(EI)

BETWEEN:

CHARLOTTE GROLEAU,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent.

____________________________________________________________________

Appeal heard on March 24, 2004, at Montréal, Quebec

Before: The Honourable Deputy Judge Savoie
Appearances:
For the Appellant:	The Appellant herself
Counsel for the Respondent:	Antonia Paraherakis

____________________________________________________________________

JUDGMENT

          The appeal is dismissed, and the Minister's decision is confirmed in accordance with the attached Reasons for Judgment.

Signed at Grand-Barachois, New Brunswick, this 28^th day of June 2004.

"S.J. Savoie"

Savoie D.J.

Certified true translation

Colette Dupuis-Beaulne

[OFFICIAL ENGLISH TRANSLATION]

Reference: 2004TCC436

Date: 20040628

Docket: 2003-2154(EI)

BETWEEN:

CHARLOTTE GROLEAU,

Appellant,

And

THE MINISTER OF NATIONAL REVENUE,

Respondent.

REASONS FOR JUDGMENT

Savoie D.J.

[1]      This appeal was heard at Montréal, Quebec, on March 24, 2004.

[2]      This is an appeal in respect of the insurability of the sum of $10,000 paid to the Appellant at the time she was hired by Corporation de Tissus Classique, the Payor, as an incentive to return to work.

[3]      On March 21, 2003, the Minister of National Revenue (the "Minister") informed the Appellant of his decision whereby the sum of $10,000 was included in her insurable earnings for the following reason:

[Translation]

[...] You were employed by Corporation de Tissus Classique/Classic Fabrics Corp., and, with respect to this employment, any amount you received and from which you benefited, which was paid by your employer, is included in your insurable earnings, as set out in subsection 2(1) of the Insurable Earnings and Collection of Premiums Regulations.

[4]      In making his decision, the Minister relied on the following presumptions of fact:

a)          The Payor operates a business through which it imports fabrics for clothing manufacturers. (admitted)

b)          Prior to the period at issue, the Appellant had worked in similar businesses for 20 years. (admitted with additional details)

c)          Following the death of her spouse, the Appellant stopped working, but the Payor wanted to obtain her services. (admitted)

d)          The Payor offered a bonus of $10,000 at the time of hiring as an incentive to return to work. (admitted)

e)          The Appellant's main duties consisted of assisting the Payor's manager, performing office work, and dealing with the Payor's clients. (admitted with additional details)

f)           During the period at issue, the Appellant rendered services to the Payor under a contract of service, for three days or 25 hours per week. (admitted)

g)          The Appellant received from the Payor, at the beginning of her employment in 2001, a sum of $10,000 in one payment. (admitted with additional details)

h)          The Appellant described the sum received from the Payor as a "welcome bonus." (admitted)

i)           In 2001, the Appellant received insurable remuneration from the Payor totalling $30,712, including the $10,000. (admitted with additional details)

[5]      In her testimony during this appeal hearing, the Appellant stated that one of the businesses she had worked at for 20 years belonged to the Payor. In addition to the duties she performed for the Payor, as acknowledged by the Minister, she also assisted the controller, Mark Tobin. She specified that she received a net amount of only $6,829.25 from the $10,000 paid to her by the employer in 2001; she wanted to specify that her insurable earnings for 2001 was not $30,712, but $20,678.83 as specified in the payroll record filed as Exhibit A-2.

[6]      The Court's only duty is to determine whether the sum of $10,000 received by the Appellant in 2001 is an insurable amount.

[7]      Parliament has provided a way to resolve this issue. It has prescribed the following at paragraph 2(1)(a) of the Insurable Earnings and Collection of Premiums Regulations(the "Regulations"):

2. (1) For the purposes of the definition "insurable earnings" in subsection 2(1) of the Act and for the purposes of these Regulations, the total amount of earnings that an insured person has from insurable employment is

(a) the total of all amounts, whether wholly or partly pecuniary, received or enjoyed by the insured person that are paid to the person by the person's employer in respect of that employment,

[8]      The issue here is the interpretation of the expression "in respect of"[1] in the wording of this paragraph.

[9]      According to the Oxford Canadian Dictionary, "in respect of" means:

1.          as concerns;

2.          with reference to.

[10]     The Appellant maintained that the $10,000 was not insurable because it was a "welcome bonus," not a salary.

[11]     To further define the issue, it must be determined whether the scope of the expression is broad enough to include or incorporate the sum paid to the Appellant "in respect of that employment."

[12]     It is my opinion that the definition given in the Oxford[2] supports the conclusion that the Minister correctly interpreted the meaning and scope of this expression.

[13]     The Appellant had the burden of proving the falsity of the Minister's presumptions and his erroneous interpretation of paragraph 2(1)(a) of the Regulations on which he relied.

[14]     The evidence presented by the Appellant did not demonstrate that the Minister had interpreted the meaning and scope of the expression incorrectly. It was the responsibility of the Appellant to demonstrate that, on the balance of probabilities, the Minister's decision was not well-founded. She did not do so.

[15]     The Appellant also maintained that, upon her request, the Canada Customs and Revenue Agency provided her with an opinion in which it said that the $10,000 was not insurable. Counsel for the Minister responded to this argument by saying that, where the Appellant received this information from the Agency, the information was wrong, and, consequently, it is not binding on the Minister or this Court. Counsel relied on Kennedy v. Canada, [2001] T.C.J. 486, in which Bowie J. of this Court expressed the following:

Finally, the Appellant advanced an argument to the effect that the annuity payments received by her are said by the guide to qualify her for the pension credit. It was not made clear to me whether the guide in question was one issued by the Minister of National Revenue or by some private service. Nor was it clear to me how that guide (which is in extract Exhibit A-4) would lead one to the conclusion that the Appellant suggested it had led her to. Putting this argument at its highest, I am prepared to assume that the Minister's officials in fact advised the Appellant through this document, that her pension income entitled her to the credit that she claims. Such advice, if given, would have been patently wrong, but erroneous advice whether it comes from officials of the Minister, the Minister himself, or some private source, simply cannot change the law as written by Parliament and raise an entitlement to tax credits which in reality is not found in the words of the Act. See: M.N.R. v. Inland Industries Limited, [[1974] S.C.R. 514, pages 523 and 524 (72 D.T.C. 6013, page 6017)].

[16]     The Appellant did not discharge the burden of proof upon her, nor did she succeed in demonstrating the appropriateness of an intervention by this Court.

[17]     Accordingly, this Court must conclude that the sum of $10,000 received by the Appellant and paid by the Payor was a part of her insurable earnings for 2001. Therefore, the Appellant received insurable earnings totalling $30,712, including the $10,000 bonus, from the Payor in 2001.

[18]     For these reasons, the appeal is dismissed, and the decision of the Minister is confirmed.

Signed at Grand-Barachois, New Brunswick, this 28^th day of June 2004.

"S.J. Savoie"

Savoie D.J.

Certified true translation

Colette Dupuis-Beaulne

REFERENCE:

2004TCC436

COURT FILE NUMBER:

2003-2154(EI)

STYLE OF CAUSE:

Charlotte Groleau and M.N.R.

PLACE OF HEARING:

Montréal, Quebec

DATE OF HEARING:

March 24, 2004

REASONS FOR JUDGMENT BY:

The Honourable S.J. Savoie, Deputy Judge

DATE OF JUDGMENT:

June 28, 2004

APPEARANCES:

For the Appellant:

The Appellant herself

For the Respondent:

Antonia Paraherakis

COUNSEL OF RECORD:

For the Appellant:

Name:

Firm:

For the Respondent:

Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada

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