FETTERING OF DISCRETION

No practical end served by setting aside Minister’s decision

This was appeal from Federal Court’s decision upholding Minister of National Revenue’s decision. Appellants used common financial representative to make tax filings. For 2000 to 2003 taxation years appellant’s representatives’ were of opinion that they did not need to file T1135 forms, contrary to wording of s. 233.3(3) of Income Tax Act (Can.). Canadian Revenue Agency (“CRA”) alerted appellants to fact that they had not filed forms. Appellants filed forms late and explained misunderstanding. Appellants’ representatives requested relief under s. 220(3.1) of Act against penalty and interest assessed against appellants for late filing of forms. CRA denied request, finding that appellants did not fall within one of three specific situations set out in information circular. Appellants applied for relief to Minister, who reduced interest for six months due to CRA’s delay in replying. Appellants applied for judicial review. Federal Court found that Minister had not fettered discretion and that decision was reasonable. Appeal dismissed. Standard of review of Minister’s decision was reasonableness. Decision that was product of fettering of discretion was unreasonable. In circumstances, Minister did not draw upon law that was source of authority, s. 220(3.1) of Act, but fettered discretion by having regard to only three specific scenarios set out in information circular. Minister’s reasons as set out in decision letter evidenced that Minister restricted consideration to three scenarios in information circular. Record shed no light on grounds for Minister’s decision and decision letter must speak for itself. As Minister did not draw upon law that was source of authority and drew only on information circular, decision was unreasonable. However, there would be no practical end served by setting aside Minister’s decision. Appellants’ excuses and justifications for delay in filing forms and grounds offered in support of relief had no merit. Granting relief under s. 220(3.1) would be unreasonable exercise of discretion.

Stemijon Investments Ltd. v. Canada (Attorney General) (Oct. 26, 2011, F.C.A., Noel, Trudel and Stratas JJ.A., File No. A-376-10; A374-10; A375-10; A-377-10; A-378-10; A-382-10) Decision at 193 A.C.W.S. (3d) 1016 was affirmed. 209 A.C.W.S. (3d) 721 (30 pp.).

CERTIFICATION

Security personnel essential to ensuring detention of peoplein facility

Company was large security company that provided security personnel to clients on contract. Most of the jobs held by company’s employees were governed by provincial legislation. Some jobs held by company employees such as those working in airport security were governed by federal legislation. Company obtained contract to provide security personnel to immigration detention centre. Union sought certification to represent company’s security personnel at detention centre. Conseil canadien des relations industrielles dismissed application for certification since it ruled that it did not have jurisdiction to hear application since these employees fell under provincial jurisdiction. Review panel at Conseil upheld decision. Union brought application for judicial review. Application allowed. Standard of review was correctness. There was no question that detention centre itself was under federal jurisdiction. Issue was whether job of security personnel had essential or fundamental link to operation of federal facility. Security personnel were essential to ensuring detention of people in the facility in accordance with federal law. Detention would not be possible without services of security personnel. Conseil committed error by concluding that their work was non-essential simply due to fact that detainees were mostly non-violent. Fact that contract was of specified duration did not change essential nature of work.

Syndicat des Agents de Securite Garda, Section CPI-CSN v. Corp. de Securite Garda Canada (Nov. 4, 2011, F.C.A., Noel, Trudel and Mainville JJ.A., File No. A-471-10) Reasons in French. 208 A.C.W.S. (3d) 849 (40 pp.).

PUBLIC SERVICE

Arbitration Board decision not founded on medical evidence

Applicant appealed from decision rendered by Arbitration Board affirming that employee’s conduct was involuntary. Applicant affirmed that absences were not justified on medical grounds and that employee was warned several times of possible consequences of persistent absenteeism. Arbitration Board concluded that absences were justified on grounds of major depression. Appeal allowed. Court affirmed that despite depression, doctor ordered return to work four days after diagnosis. Arbitration Board decision was not founded on medical evidence and should be reversed.

Canada (Procureur general) v. Bergeron (Oct. 17, 2011, F.C.A., Blais C.J., Pelletier and Mainville JJ.A., File No. A-440-10) Reasons in French. 208 A.C.W.S (3d) 725 (10 pp.).

ESTOPPEL

No grounds for relieving appellants from consequences of choice

Minister issued reassessments against appellants totalling $702,646 in net tax and penalties. Basis of reassessments was that appellant improperly claimed input tax credits for specified period. Appellants were convicted of fraud in criminal proceeding concerning claims for input tax credits. Input tax credits found to be fraudulently claimed fell within period covered by reassessments. Tax Court concluded issue estoppel applied to bar appellants from relitigating. Tax Court concluded it would not exercise discretion in favour of allowing appellants to relitigate. Appeal was dismissed. There were not grounds on which conclusions could be set aside. Tax Court’s refusal to relitigate was amply supported by considerations. Appellant chose during sentencing phase of criminal proceedings not to seriously contest quantum of tax said to have been evaded and appellants were represented by counsel then. There were no grounds for relieving appellants from consequences of choice. There was no ground to interfere with conclusion circumstances favouring relitigation did not outweigh important public policy issues.

Dundurn Street Loffts Inc. v. Canada (Oct. 18, 2011, F.C.A., Evans, Layden-Stevenson and Stratas JJ.A., File No. A-420-10) 208 A.C.W.S. (3d) 326 (10 pp

EMPLOYMENT RELATIONSHIP

Legal tests to be applied to determine employment status were not considered

This was appeal and cross-appeal from judge’s decision varying assessments. Appellant engaged truck drivers to provide services to client. Respondent determined that 96 truck drivers engaged by appellant in 2002, 2003 and 2004 were employees. Respondent assessed appellant for premiums payable under Employment Insurance Act (Can.), and contributions payable under Canada Pension Plan. Appellant appealed. Judge divided workers into two groups. One group was made up of 43 drivers who had signed agreement with appellant and other group was 53 drivers for whom there was no evidence of written agreement. Judge concluded that 53 drivers were employees of appellant but other 43 drivers were not. Appeal allowed; cross-appeal dismissed. Judge did not err in considering two groups of drivers separately. Judge appeared to have considered that any driver who had signed one of 43 agreements was incorporated drivers but that finding was based on misapprehension of facts. Of 43 drivers who signed agreements only 2 were incorporated drivers. As result of judge’s approach to 43 drivers who had signed agreements, legal tests to be applied to determine whether they were employees were not considered. Agreement signed by drivers contained clauses that suggested common intention that driver would be engaged as person carrying on own business but other factors must be considered. Appellant did not supervise drivers. Drivers did not provide own trucks or equipment or bear any costs of operating trucks. Contracts provided right to driver to substitute another driver at own cost but there was no evidence that any driver exercised right. Drivers did not bear any financial risk related to any investment in trucks or equipment. Drivers did not bear any responsibility for investing in anything that was required to fulfill contractual obligations or for managing work. Drivers did not negotiate rates of pay. Factors, on balance, weighed in favour of conclusion that drivers who signed agreements with appellant were employees, in contradiction to intention clauses. With respect to remaining 53 workers who did not sign agreements, judge’s conclusion that drivers were not self-employed was reasonable. Judge did not make error of law or palpable or overriding error of fact.

TBT Personnel Services Inc. v. Canada (Sep. 22, 2011, F.C.A., Sharlow, Pelletier and Stratas JJ.A., File No. A-388-10) 207 A.C.W.S. (3d) 477 (19 pp.).

STAY OF PROCEEDINGS

Application judge failed to consider prejudice caused to alleged contemnor

Both appellant and respondent sought same relief, namely that stay imposed by application judge be set aside and that matter be returned to him for decision based on record before him. While judge has inherent jurisdiction to control process before him, and inherent jurisdiction to adjourn or stay proceeding, that discretion must be exercised judicially, with regard to potential prejudice caused by adjournment or stay. Here, application judge failed to consider prejudice caused to alleged contemnor, which was entitled to prompt resolution of allegations against it, based on evidence parties chose to put before court. Appeal was allowed. Stay imposed by application judge was set aside and matter ordered returned to him for decision on basis of record before him.

Bremsak v. P.I.P.S.C. (Sep. 20, 2011, F.C.A., Dawson, Pelletier and Noel JJ.A., File No. A-160-11) 207 A.C.W.S. (3d) 262 (4 pp.).