"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 ...

he shall be regarded as working a full working week.

(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."  

These Regulations have been interpreted many times in the jurisprudence and I need only refer to CUB 9433, Reed, J. where her words are approved for example by Muldoon, J. in CUB 12835, Barnabe. They read as follows:

"It is not sufficient merely to find that a claimant was employed in an employment in which he controls his own working hours. The Board must also determine whether the employment was "so minor in extent that a person would not follow it as a principal means of livelihood". If the employment was of this nature (that is to say his business was minor in extent), the claimant is not disqualified from being unemployed and is still entitled to benefits."  

In this case, it is conceded he was working a full working week as interpreted in the legislation; in other words, he set his own working hours. Of that, there is no doubt, and the Board did look at the question of whether it was "minor in extent". The jurisprudence about minor in extent is still set out and followed from CUB 5454, Schwenk, in which Mr. Justice Dubé set out six criteria. There is important jurisprudence to the effect that it is not necessary to consider all these factors. Strayer, J. in CUB 21531, Carol Sabiston, Appeal #1, stated:

"It is not necessary to consider all these factors if they are not considered particularly useful or relevant." 

Marceau, J.A. for the Court of Appeal in the Attorney-General of Canada vs. Jouan, A-366-94, added a new wrinkle when he stated that if the claimant has spent a substantial amount of time on the job in a new employment that that would suffice. He said at page 6:

"It is my conviction however that the most important and most relevant and only basic factor to be taken into account has to be in all cases the true time spent ... Whatever be the status of the other factors (be it the capital invested or the success of the enterprise or the certainty of the business, continuity of the business) they can never be relevant on their own. The conclusion in a particular case depends directly and necessarily on the time spent. Since it is necessary to repeat it, we are dealing here strictly with the notion of a "full working week". In the case of a claimant who spends on a regular basis 50 hours per week in the affairs of his own business, there is no way that he can invoke the exception of 43(2). This claimant must necessarily be considered as falling under the general presumption of subsection 43(1)(a) and be regarded as working a full working week." 

In the case that Mr. Justice Marceau was writing on, the claimant was working 50 hours a week and he did not rightly have to consider other factors.

However, where time is only one of the factors which should be considered because he is not working that substantially, the Court of Appeal has said in two other cases, Veillet, A-58-94, and McGee, 162 NR 236, it is still important to apply criteria of Schwenk and I so do.

I believe this is a case in which all six factors of Dubé, J. should be considered and I take them in seriatim and Mr. Sczikora's comments on same.

(1) Time spent

The Board of Referees said that the claimant spent 20 hours per week for business solicitation and 5 hours for job search. Claimant's counsel admits arithmetically this should be 25 hours a week for solicitation and 5 hours for job search. This amounts to 5 hours a day from Monday to Friday and if not substantial is considerable. Mr. Sczikora cites some examples of where the Board has misconstrued the facts.

(2) Capital Resources

The Board took the depreciated figure of $33,000.00 involving used equipment. Mr. Sczikorapointed out that Exhibit 8-31. which is a balance sheet of the company as of October 30, 1992, shows the shareholder's loan from the claimant in the amount of $35,569.64, and a shareholder's loan from one "Joe" in the amount of $14,180.22 for a total of almost $50,000.00. It was explained to me by the claimant at this hearing that this was purely a bookkeeping entry, that it was only put in the books so that he might obtain a loan from the bank. What it does show is that the claimant was practically putting everything he had into this business and that he had the intention at the time of making this a successful, permanent operation. What it does show is that the Board of Referees' explanation is shallow and misleading.

(3) The financial success or failure of the enterprise

The Board of Referees said the following:

"The financial success or failure of the enterprise was limited -- there was minimal remuneration extracted and the business, correct financial assessment can only be stated as progressing with limited improvement. It appears to be nothing more than holding its own." 

Mr. Sczikora said the short answer is that any new company starts off in a small way with only slight profits and it is nothing more or less than to be expected that it is holding its own at the outset. 

(4) The continuity of the business

The Board states:

" It is questionable if the business can continue." 

Mr. Sczikora said that the point is that it was still continuing at the time the Board heard the case. Mr. Sczikora also says the fact that the business was continuing at the time of the Board of Referees, hearing indicated that it was the intention of the claimant to make it his primary activity.

(5) The nature of the operation

Mr. Sczikora again criticized the Board of Referees on this point and said that it completely misunderstood the intention of the nature of employment. The question should have been asked "Is this the kind of endeavour the claimant is normally engaged in?" What one should do is to look what he did before and to look for similarities. Mr. Rodrigues was a supervisor at Nationwide Housekeeping Systems; it was in short the same business. And as Mr. Sczikora said "It was exactly what he was doing prior to that." 

(6) Willingness of the claimant to accept or seek other employment

The Board of Referees seemed to take the claimant's word that he repeatedly stated that he was willing to accept employment as being the requisite job search. Mr. Sczikora quite properly said "There must be concrete evidence before the Board of a job search. "He indicates in Exhibit 8-5 that over the space of almost one year that he made 5 attempts to obtain a job. I note that all the efforts were directed to maintenance companies, which is of course the same kind of work as he was doing, so that they could be deemed to be, I would think, legitimate job searches. But, should the Board have considered this to be an adequate job search. The evidence is uncontradicted that he spent 25 hours a week on his job with White Glove and that he spent 5 hours a week for job searches. He says that he spent 250 hours between November 17, 1991 and November 7, 1992 for job searches, but yet only produces 5 concrete efforts in the whole year. Mr. Sczikora says that this is not an adequate job search and that the Board of Referees erred simply saying that he was available to work on his say-so, and had inadequate evidence on a job search. Mr. Sczikora summed it up by saying that the Board of Referees in its totality made egregious errors in interpreting the evidence and that the appeal should be allowed on this ground alone.

Mr. Sczikora also stated that on the matter of the false and misleading statements, the Board made an error in law and that it held that the burden of proof on the Commission was as that set out in CUB 12232 as being beyond a reasonable doubt. The legislation has held for years that the burden is not on reasonable doubt but on balance of probabilities (see McDonald, Federal Court of Appeal A-897-90).

The evidence discloses that an initial claim for benefits was effective on November 17, 1991, that the claimant had registered a business by the name of White Glove Maintenance Systems on June 11, 1992, but the Commission found out on March 8, 1993 that the claimant stated he registered his business in September 1990. The business didn't start until December 1992. The claimant indicated at an interview on March 8, 1993 that he had registered his company with partner Joe Gonsalves who presumably was the Joe mentioned in the financial statements as being a "shareholder loan - Joe $14,180.22". In Exhibit 6-1, the claimant admitted that he earned through contracts and extra services which were provided over and above the contract agreements the sum of approximately $78,000.00 in service revenue for the fiscal year ending November 1992. I can only conclude, therefore, that when the claimant said that that business began in December 1992 he really meant December 1991. This is confirmed by an examination of his financial records found in Exhibits 6 and 8. As Mr. Sczikora says, it shows a substantial financial enterprise.

Mr. Jones for the claimant said that the name White Glove was registered in September 1991 but was only incorporated on October 15, 1992. In other words, that it did not operate as a corporation until October 15, 1992. The records all show that he carried on business as White Glove Maintenance in 1991 and in 1992. The incorporation undoubtedly was for legal and accounting purposes.

Mr. Jones made a spirited defence of Mr. Rodrigues and the fact that he obviously made a credible impression on the Board of Referees, part of their judgment which I have related in these reasons. He pointed out that the claimant indicated that he was "available" in every report card, but as Mr. Sczikora said that was how every claimant may report his availability.

I indicated during argument to Mr. Jones that I am disturbed by two items in Mr. Rodrigues, testimony. The first is the matter of the activity which resulted in a build up of his enterprise. Secondly, I am concerned with his job search. I think the financial records, Exhibits 6 and 8, speak for themselves and show that this was a substantial operation. I think further that his job search was so sparse because he was spending his time building up his enterprise. It is highly commendable that a claimant would begin a business and build it into a success. On that I applaud him. But the question is this: can it be justified under the Unemployment Insurance Act? Marceau, J.A. in Jouan put it admirably when he stated at page 6: