CUB 17055A
JUDGMENT OF THE FEDERAL COURT OF APPEAL
Date:
19931008
Docket:
A-1085-92
Umpire's Decision:
CUB 17055A
CORAM :
MacGUIGAN J.A.
DESJARDINS J.A.
LÉTOURNEAU J.A.
BETWEEN :
THE ATTORNEY GENERAL OF CANADA,
applicant,
-and-
JOYCE MAGEE,
respondent.
Heard at Vancouver, British Columbia, on Friday, October 8, 1993.
REASONS FOR JUDGMENT
(Delivered from the Bench at Vancouver,
Friday, October 8, 1993)
MacGUIGAN J.A.:
This application, based on ss. 18.1 and 28 of the Federal Court Act, R.S.C. 1985, c. F-7 as amended, seeks the vacating of a decision by Reed J., sitting as an Umpire, whereby she allowed an appeal by the respondent from a decision of a Board of Referees.
The respondent, while receiving unemployment insurance benefits, took the initiative of opening a small business (a knit shop). In consequence, the Unemployment Insurance Commission claimed for an overpayment of benefits received of approximately $7000.
The Board of Referees concluded that the respondent was not unemployed under s. 43 of the Regulations, which reads as follows:
43.(1) Subject to subsections (2) and (3), where a claimant is
(a) self-employed or engaged in the operation of a business on his own account or in partnership or a co-adventure,
(2) Where a claimant is employed as described in subsection (1) and the employment is so minor in extent that a person would not normally follow it as a principal means of livelihood, he shall, in respect of that employment, not be regarded as working a full working week.
S. 43(2) has been interpreted by the Schwenk case (CUB 5454) to require that a Board of Referees must take into account six factors, which are set out below, in the quotation from the Board of Referees.
The Umpire held that the Board of Referees had not "appreciated the full context of the law which it was being asked to apply", (Application Record, 77) i.e., that it had fallen into error of law. In the decisive paragraph of her reasons, she wrote (Application Record, 75-6):
I am not convinced that the Board fully appreciated the jurisprudence applicable to the claimant's situation. While the factors listed in Schwenk are clearly to be considered, the jurisprudence is equally clear that no one factor is determinative. Thus, the Board was not required to conclude that because the claimant spent a considerable period of time in her retail store and because she had invested a significant amount of money in it that that enterprise was not so minor in extent that would a person not normally follow it as a principal means of livelihood. The Board is entitled to consider all the factors together, as well as others which may be relevant, in order to characterize the nature of the claimant's activity. It was certainly open to the Board in this case to find that that activity was so minor in extent that one would not follow it as a principal means of livelihood.
I am persuaded that the learned Umpire correctly identified an error of law in the decision of the Board, which will appear from the Board's reasons for decision, as set out by the Umpire with her underlining (Application Record, 75):
The following facts emerge:
a) Time spent in employment in claimant's own business: claimant stated she was in her store from 10 - 5 or approximately 7 hours per day Monday to Saturday. During this time she was actively looking for employment: letters, phone, etc.
b) Capital and resources invested: The claimant stated she received a mortgage and ultimately invested $13,000 to $14,000 in the business.
c) Financial success or failure: The business did not make enough money to pay claimant a wage.
d) Continuity: The claimant is selling out at a loss.
e) Nature of Employment: The claimant was a secretary - bookkeeper - manager.
f) Availability: Claimant kept a job search list; answered ads by telephone, checked the Unemployment Insurance Job Board and was available for fulltime work as she had arrangements made for her replacement at the store. She found part time work at a rest home (Exhibit #8 and Exhibit #3 - 5.6).
The Board decided that according to (a) and (b) and according to the claimant's own admission she had full intentions of making the business her principal means of livelidhood [sic]. The Board recognized that the Act makes no provisions for a claimant who, because he is engaged in starting a business makes himself available for employment while he is on Unemployment Insurance but continuing to work at establishing the business. The Board therefore had to conclude that the claimant was engaged in a business on her own account which was not so minor in extent that she was not following it as a principal means of livelihood.
The Board had to conclude therefore, that the claimant was not unemployed despite the fact that she was available for other employment, made no money from the business, and is now forced to terminate the business.
The Board regrets that the appeal must be dismissed.
(underlining added)
Counsel for the applicant admitted in argument that, if the Board thought that the law required it to find that anyone who tried to start a business while receiving unemployment insurance benefits was by that fact alone ineligible for benefits, that would be going well beyond the law. In my opinion, that is exactly what the Board appeared to believe when it stated that "the Act makes no provision for a claimant who, because he is engaged in starting a business, makes himself available for employment while he is on Unemployment Insurance but continuing to work at establishing the business."
The correct perspective, I believe, is one of proportionality rather than of absoluteness. Obviously, at some point a person starting a business while on benefits may, in terms of the six criteria, became so involved with the operation of the business that this business employment can no longer be described as "so minor in extent" that she "would not normally follow it as a principal means of livelihood." Such a point might even occur at the beginning of such a business involvement, but only if so found as a matter of fact. In the case at bar, the Board seems to have believed that the law removed its discretion to weigh the facts. In other words, the Board fettered its discretion by its interpretation of the law.
The application must therefore be dismissed.
(Mark R. MacGuigan)
J.A.
"I concur
Alice Desjardins, J.A."
REASONS FOR JUDGMENT
LÉTOURNEAU, J.A.:
I believe this application should be granted and the decision of Reed J., sitting as an Umpire, dated June 4, 1992, be vacated.
The Umpire granted the respondent's appeal on the basis that the Board, in determining under s. 43 of the Unemployment Insurance Act whether the respondent was self-employed and whether such employment was so minor in extent that a person would not normally follow it as a principal means of livelihood, failed to properly apply the six factors to be taken into consideration under Regulation 43(2). The Umpire came to the conclusion that the Board, in basing its decision on two factors (time spent in the respondent's own business and capital and resources invested), failed to understand that no one factor is determinative and therefore to fully appreciate the law applicable to this matter.
With respect, I disagree with the learned Umpire. It is clear that the Board appreciated all the factors: it stated all the relevant facts in relation to each one of them. After having done so, it came to the conclusion that there were two factors that were most determinative, and certainly more determinative than the others, when coupled with the respondent's admission that she had full intention of making her business her principal means of livelihood. These two determinative factors, in the mind of the Board, were the fact that the respondent worked six days a week from 10:00 a.m. to 5:00 p.m. and that she had invested $13,000 to $14,000 in the business. While no one factor is determinative, the Board came to the conclusion that these two factors with the respondent's own admission led only to one inescapable conclusion: the respondent was self-employed and her employment was not so minor in extent that she would not normally follow it as a principal means of livelihood.
In my view, the learned Umpire took too miscroscopic a view of the Board's decision. While no one factor is determinative, it is certainly proper for the Board to state which ones it found determinative. Had the Board said nothing, its decision could have been attacked for its failure to state what in the end it found to be determinative. I believed the learned Umpire misunderstood what the Board had done and, as a result, erroneously concluded that the Board had misapplied the law.
Furthermore, the learned Umpire seemed to believe that the Board had come to the wrong conclusion in its appreciation of the facts of the case. At page 5 of her decision, she wrote: "It was certainly open to the Board in this case to find that that activity was so minor in extent that one would not follow it as a principal means of livelihood". Maybe the Board could have so found, maybe not. However, that was not for her to decide. Her own personal views on the matter seemed to have coloured her approach and induced her to review the Board's decision.
To sum up, I believe the Board committed no error of law in rendering its decision and, therefore, that the learned Umpire had no valid reasons to allow the respondent's appeal as there was no grounds of appeal under s. 80 of the Act.
"Gilles Létourneau"
J.A.