Judgments

[1997] 2 F.C. 545

A-315-96

Her Majesty the Queen (Applicant)

v.

Hazel Schnurer, Executrix of the Estate of Joseph Schnurer (Respondent)

Indexed as: Canada v. Schnurer Estate (C.A.)

Court of Appeal, Isaac C.J., Pratte and Stone JJ.A. —Calgary, January 20; Ottawa, February 3, 1997.

Administrative law — Judicial review — Tax Court decision on matter of insurable employment under Unemployment Insurance Act appropriate for judicial review even though preliminary question of law not disposing of respondent’s main appeal under Act.

Unemployment insurance — Application for judicial review of Tax Court decision ordering Minister to reconsider position insurable employment not occupied as based on two allegedly mutually exclusive grounds: Act, s. 3(1)(a) and (2)(c) — Judge below erred in law in so concluding — Meaning of “employment” examined — Reliance on Act, s. 3(1)(a) and (2)(c) not depending on mutually exclusive findings of fact.

The determination of the Minister of National Revenue that the respondent’s now deceased husband had not been engaged in insurable employment within the meaning of the Unemployment Insurance Act was appealed to the Tax Court of Canada pursuant to section 70 of the Act. The Deputy Tax Court Judge raised a preliminary question of law and held that, on appeal from a determination, the Minister could not proceed on the basis that the determination relied upon both paragraphs 3(1)(a) and (2)(c) because, in essence, such a determination would have required mutually exclusive findings of fact: that there was a contract of employment for the purposes of 3(2)(c), and that there was none for the purposes of 3(1)(a). The Deputy Tax Court Judge ordered that the appeal be rescheduled, and directed the Minister to decide which of the two grounds would be relied upon. This was an application for judicial review of that decision.

Held, the application should be allowed.

Although it was a decision on a preliminary question of law and, as such, did not dispose of the respondent’s main appeal under the Unemployment Insurance Act, this case was an appropriate one for judicial review. Where a decision is finally determinative of the substantive rights of a party, the Court may entertain an application for judicial review in respect of that decision even though it may not be the ultimate decision of the tribunal. Sections 18, 18.1 to 18.5 and 28 of the current Federal Court Act confirm the view expressed in later Federal Court of Appeal cases that the judicial review jurisdiction of the Court extends beyond a review of the ultimate decision of a federal board, commission, or other tribunal. While not finally disposing of the respondent’s main appeal under the Act, the impugned decision would deprive the applicant of the ability to make arguments in the alternative when the main appeal is heard. It therefore effectively disposes of one of the two substantive grounds advanced in support of the Minister’s determination. Because either one of these grounds could be determinative of the main appeal, it was appropriate at this stage to hear the application for judicial review.

The Deputy Tax Court Judge erred in law in concluding that the applicant could not rely on both paragraphs 3(1)(a) and 3(2)(c) in responding to the appeal from the Minister’s determination. It is well established that in a section 70 appeal, the Tax Court must focus on the validity of the Minister’s determination, and not on the validity of the Minister’s specific reasons, or the provisions of the Act relied upon, for that determination. On appeal, the Deputy Tax Court Judge is obliged to review the validity of the Minister’s determination based on all the submissions of the parties. The Minister’s determination rests upon assumed facts which, if not disproved, might lead the Tax Court, on appeal, to conclude, taking into account the different standards of review which apply to the alternative grounds, that the employment was not insurable either because Mr. Schnurer was not an employee under a contract of service (3(1)(a)) or because the contract was not between parties dealing at arm’s length (3(2)(c)).

Moreover, the assumption of the Deputy Tax Court Judge, that the word “employment” in paragraph 3(2)(c) necessarily means employment under a contract of service, was overly restrictive and did not accord with the overall purpose and intent of the Unemployment Insurance Act. The Act was designed to create an unemployment insurance regime which recognizes that the line between contracts of service and contracts for service is very often blurred.

Once employment is defined in its broader sense, it can be seen that the Minister’s reliance upon paragraphs 3(1)(a) and 3(2)(c), in the alternative, did not depend upon mutually exclusive findings of fact. In this kind of case, the Tax Court must approach the analysis in two steps. First, was there an express or implied contract of service? If not, the employment is not insurable unless it falls within one of the provisions of subsection 4(1) or regulation enacted pursuant to subsection 4(2). Secondly, if it is employment under a contract of service or if it is otherwise insurable under section 4, is it “excepted employment” within the meaning of subsection 3(2)?

The applicant argued that the Deputy Tax Court Judge improperly refused to exercise his jurisdiction under section 70 of the Act when he declined to hear and decide the appeal on its merits, and instead ruled that the applicant was not allowed to make submissions on both of the Minister’s grounds. If was further argued that subsection 70(2) required the Judge to either vacate, confirm or vary the determination, and did not permit the Tax Court to refer a matter back to the Minister for redetermination. These jurisdictional arguments had much force but, in view of the conclusion as to an error of law, they did not have to be dealt with.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Federal Court Act, R.S.C., 1985, c. F-7, ss. 18 (as am. by S.C. 1990, c. 8, s. 4), 18.1 (as enacted idem, s. 5), 18.2 (as enacted idem), 18.3 (as enacted idem), 18.4 (as enacted idem), 18.5 (as enacted idem), 28(1) (as am. idem, s. 8), (2).

Unemployment Insurance Act, R.S.C., 1985, c. U-1, ss. 2(1) “employment”, 3(1)(a ) “insurable employment”, (2)(c ) (as am. by S.C. 1990, c. 40, s. 2), 4 (as am. idem, s. 3), 61 (as am. idem, s. 37; 1993, c. 24, s. 152), 70 (as am. by R.S.C., 1985 (4th Supp.), c. 51, s. 23; S.C. 1993, c. 27, s. 228).

CASES JUDICIALLY CONSIDERED

APPLIED:

VIA Rail Canada Inc. v. Butterill, [1982] 2 F.C. 830 (1981), 130 D.L.R. (3d) 289; 3 C.H.R.R. D/1043; 40 N.R. 91 (C.A.); Armadale Communications Ltd. v. Adjudicator (Immigration Act), [1991] 3 F.C. 242 (1991), 83 D.L.R. (4th) 440; 14 Imm. L.R. (2d) 13; 127 N.R. 342 (C.A.); Brennan v. The Queen, [1984] 2 F.C. 799 (1985), 85 CLLC 17,006; 57 N.R. 116 (C.A.); Mahabir v. Canada (Minister of Employment and Immigration), [1992] 1 F.C. 133 (1991), 85 D.L.R. (4th) 110; 15 Imm. L.R. (2d) 303; 137 N.R. 377 (C.A.); Anti-dumping Act (In re) and in re Danmor Shoe Co. Ltd., [1974] 1 F.C. 22 (1974), 1 N.R. 422 (C.A.) (as to relevant policy considerations at play in judicial review jurisdiction under the Federal Court Act); Barrette v. Canada (Minister of National Revenue—M.N.R.), [1994] A.C.F. No. 499 (C.A.) (QL); Canada (Attorney General) v. Doucet (1993), 172 N.R. 374 (F.C.A.); Martin Service Station Ltd. v. Minister of National Revenue, [1977] 2 S.C.R. 996; (1976), 67 D.L.R. (3d) 294; 76 CLLC 14,022; 9 N.R. 257; Can. (A.G.) v. Skyline Cabs (1982) Ltd., [1986] 5 W.W.R. 16; (1986), 45 Alta. L.R. (2d) 296; 11 C.C.E.L. 292; 86 CLLC 14,047; 70 N.R. 210 (F.C.A.); Maynard v. Canada (Minister of National Revenue), 92-252 (UI), Margeson J.T.C.C., judgment dated 30/10/92, T.C.C., not reported; Vammen v. Canada (Minister of National Revenue—M.N.R.), [1994] T.C.J. No. 827 (QL); Minister of National Revenue v. Visan, [1983] 1 F.C. 820 (1983), 144 D.L.R. (3d) 310; 83 CLLC 14,024; 46 N.R. 494 (C.A.).

DISTINGUISHED:

Szczecka v. Canada (Minister of Employment and Immigration) (1993), 116 D.L.R. (4th) 333; 25 Imm. L.R. (2d) 70; 170 N.R. 58 (F.C.A.).

CONSIDERED:

National Indian Brotherhood v. Juneau (No. 2), [1971] F.C. 73 (C.A.); Ferrow v. Minister of Employment and Immigration, [1983] 1 F.C. 679 (1983), 144 D.L.R. (3d) 364; [1983] 3 W.W.R. 289; 46 N.R. 299 (C.A.).

REFERRED TO:

Tignish Auto Parts Inc. v. Minister of National Revenue (1994), 25 Admin. L.R. (2d) 1; 185 N.R. 73 (F.C.A.); Attorney General of Canada (The) v. Cylien, [1973] F.C. 1166; (1973), 43 D.L.R. (3d) 590 (C.A.); British Columbia Packers Limited v. Canada Labour Relations Board, [1973] F.C. 1194 (C.A.); Anti-dumping Act (In re) and in re Danmor Shoe Co. Ltd., [1974] 1 F.C. 22 (1974), 1 N.R. 422 (C.A.).

APPLICATION for judicial review of a decision of a Deputy Judge of the Tax Court of Canada (Schnurer v. Canada (Minister of National Revenue —M.N.R.), [1996] T.C.J. No. 291 (QL)) that, on appeal of a determination that the respondent’s late husband had not been engaged in insurable employment, the Minister could not proceed on the basis that the determination relied upon both paragraphs 3(1)(a) and 3(2)(c) of the Unemployment Insurance Act because, in essence, such a determination would require mutually exclusive findings of fact. Application allowed.

COUNSEL:

H. C. Turner for applicant.

No one appearing for respondent.

SOLICITORS:

Deputy Attorney General of Canada for applicant.

Macleod Dixon, Calgary, for respondent.

The following are the reasons for judgment rendered in English by

Isaac C.J.: This is an application for judicial review pursuant to subsection 28(1) of the Federal Court Act[1] of a decision of a Deputy Judge of the Tax Court of Canada, pronounced on 20 March 1996 [[1996] T.C.J. No. 291 (QL)]. The decision relates to an appeal from a determination of the Minister of National Revenue (the Minister) that the respondent’s now deceased husband, Joseph Schnurer, was not engaged in “insurable employment” within the meaning of the Unemployment Insurance Act.[2]

FACTS

By letter dated 22 July 1994, an insurance agent of Human Resources Development Canada informed Kurves by Design Inc., the payor corporation, that its employment of Joseph Schnurer was not insurable under the Unemployment Insurance Act. On 10 August 1994, Kurves by Design Inc. filed a CPT 101 form, requesting, in accordance with section 61 [as am. by S.C. 1990, c. 40, s. 37; 1993, c. 24, s. 152] of the Act, that the Minister determine whether Mr. Schnurer was engaged in insurable employment during the periods: 1 June to 30 October, 1992; 25 May to 31 October, 1993; and 1 January to 8 March, 1994.

By letters dated 4 November 1994, the Minister notified Kurves by Design Inc. and Mr. Schnurer that the latter’s employment was not insurable. The Minister gave two reasons for this determination. Firstly, the Minister stated that Mr. Schnurer and Kurves by Design Inc. had not been dealing with each other at arm’s length. The Minister was not satisfied that a substantially similar contract of employment would have been entered into had they been dealing with each other at arm’s length. Therefore, Mr. Schnurer’s employment was “excepted employment” within the meaning of paragraph 3(2)(c) [as am. by S.C. 1990, c. 40, s. 2] of the Unemployment Insurance Act. Secondly, the definition of “insurable employment” in paragraph 3(1)(a) requires that employment be under an express or implied contract of service. The Minister further determined that Mr. Schnurer was not employed pursuant to a contract of service and was therefore not an insurable employee of Kurves by Design Inc. Paragraphs 3(1)(a) and 3(2)(c) of the Act read:

3. (1) Insurable employment is employment that is not included in excepted employment and is

(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by piece, or partly by time and partly by piece, or otherwise;

…

(2) Excepted employment is

…

(c) subject to paragraph (d), employment where the employer and employee are not dealing with each other at arm’s length and, for the purposes of this paragraph,

(i) the question of whether persons are not dealing with each other at arm’s length shall be determined in accordance with the provisions of the Income Tax Act, and

(ii) where the employer is, within the meaning of that Act, related to the employee, they shall be deemed to deal with each other at arm’s length if the Minister of National Revenue is satisfied that, having regard to all the circumstances of the employment, including the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed, it is reasonable to conclude that they would have entered into a substantially similar contract of employment if they had been dealing with each other at arm’s length;

By notice of appeal filed on 27 January 1995, Mr. Schnurer appealed the Minister’s determination to the Tax Court of Canada pursuant to section 70 [as am. by R.S.C., 1985 (4th Supp.), c. 51, s. 23, S.C. 1993, c. 27, s. 228] of the Act. The appeal came on for hearing before the Deputy Tax Court Judge on 1 November 1995. Prior to hearing any evidence with respect to the appeal, the Deputy Tax Court Judge raised a preliminary question of law as to whether the Minister could rely upon both paragraph 3(1)(a) and paragraph 3(2)(c) of the Act for his (now her) determination.

DECISION OF THE TAX COURT

The Deputy Tax Court Judge held that, on an appeal from a determination, the Minister cannot proceed on the basis that the determination relies upon both paragraphs 3(1)(a) and 3(2)(c) because, in essence, such a determination would require mutually exclusive findings of fact. According to the Deputy Tax Court Judge, in order for the Minister to even consider whether or not Mr. Schnurer’s employment was “excepted employment” within the meaning of paragraph 3(2)(c), the Minister must have (or ought to have) concluded that Mr. Schnurer had been employed pursuant to a contract of service. Therefore, the Minister’s second ground for concluding that Mr. Schnurer’s employment was not insurable—that he had not been employed under a contract of service—did not make sense in conjunction with the Minister’s first ground that Mr. Schnurer’s employment was excepted under paragraph 3(2)(c). In my view, the dispositive reasons of the Deputy Tax Court Judge are best summarized by reference to the following passage from his reasons for decision:

… I conclude that the Minister, on an appeal from a determination, cannot proceed on the basis that decisions based upon both paragraphs 3(1)(a) and 3(2)(c) can be included in the same determination of the question put to him. The reason for so deciding is that in order for the Minister to have come to the conclusion the appellant was in excepted employment by reason of not having been satisfied in accordance with subparagraph 3(2)(c)(ii), the Minister clearly had to find, for the purposes of his analysis, that there was a contract of employment in existence between the appellant and Kurves By Design Inc. I find that as a matter of law he must have found or ought to have found that a contract of service existed so that it resulted in employment which carried with it certain indicia that he examined and then compared to another employment relationship as he perceived it would exist between unrelated persons. Having done so, or recognizing that he ought to have done so, it is not possible, in law, for him then to proceed and find there was no insurable employment because there was no contract of service between the appellant and his employer.[3]

The Deputy Tax Court Judge ordered that the appeal be re-scheduled, and directed the Minister to reconsider her position and, prior to the taking of any evidence, advise the respondent and the Court which one of the two reasons contained in the determination of 4 November 1994 would be relied upon. The applicant then brought this application for judicial review of the decision of the Deputy Tax Court Judge.

ANALYSIS

There is an issue in this case as to whether or not the impugned decision is an appropriate one for judicial review since it is a decision on a preliminary question of law and, as such, it did not dispose of the respondent’s main appeal under the Unemployment Insurance Act.

Prior to the 1990 amendments,[4] section 28 of the Federal Court Act specified that applications for judicial review could be sought in respect of a “decision or order” of a federal administrative tribunal. In National Indian Brotherhood v. Juneau (No.2),[5] Jackett C.J. of this Court interpreted these words to mean the ultimate decision of the tribunal, and not the many decisions or orders that a tribunal may make during the process leading up to the ultimate disposition of a matter. He stated:

I do not pretend to have formulated any view as to what the words “decision or order” mean in the context of s. 28(1), but it does seem to me that what is meant is the ultimate decision or order taken or made by the tribunal under its statute and not the myriad of incidental orders or decisions that must be made in the process of getting to the ultimate disposition of a matter.[6]

In Ferrow v. Minister of Employment and Immigration, this Court recognized that Jackett C.J.’s interpretation of “decision or order” had become the law.[7] Later authorities, however, departed from this relatively narrow reading of the Court’s jurisdiction under section 28. See, for example, VIA Rail Canada Inc. v. Butterill;[8] Armadale Communications Ltd. v. Adjudicator (Immigration Act);[9] and Brennan v. The Queen.[10] In these cases, this Court was of the view that, where a decision is finally determinative of the substantive rights of a party, the Court may entertain an application for judicial review in respect of that decision even though it may not be the ultimate decision of the tribunal. In Mahabir v. Canada (Minister of Employment and Immigration),[11] Mahoney J.A. explained the Court’s judicial review jurisdiction as follows:

A decision is reviewable under section 28 not only, as held by the earlier jurisprudence, if it is the decision the tribunal has been mandated by Parliament to make, but also if it is a final decision that disposes of a substantive question before the tribunal.

The words “decision or order” are no longer specified in subsection 28(1) of the Federal Court Act. Paragraph 28(1)(l) states simply that this Court “has jurisdiction to hear and determine applications for judicial review made in respect of … (l ) the Tax Court of Canada”. The language used in section 18.1 [as enacted by S.C. 1990, c. 8, s. 5], which applies to this Court by virtue of subsection 28(2), is similarly broad. Subsection 18.1(1) states that “An application for judicial review may be made by the Attorney General of Canada or by anyone directly affected by the matter in respect of which relief is sought.” In my view, sections 18 [as am. idem , s. 4], 18.1 to 18.5 [ss. 18.2-18.5, as enacted idem, s. 5], and 28 of the current Federal Court Act confirm the view expressed in these later authorities that the judicial review jurisdiction of the Court extends beyond a review of the ultimate decision of a federal board, commission, or other tribunal.

Notwithstanding the broad wording of these provisions, however, this Court must exercise its discretionary jurisdiction to entertain judicial review applications strictly in accordance with the object of sections 18 and 28 of the Federal Court Act. Applications for judicial review should not be allowed to frustrate and delay federal tribunals in the proper exercise of their statutory jurisdiction. Although rendered prior to the 1990 amendments, the following statement by Jackett C.J. in Anti-dumping Act (In re) and in re Danmor Shoe Co. Ltd.,[12] and reaffirmed by MacGuigan J.A. in Brennan v. The Queen,[13] provides an accurate summary of the relevant policy considerations at play.

In my view, the object of sections 18 and 28 of the Federal Court Act is to provide a speedy and effective judicial supervision of the work of federal boards, commissions and other tribunals with a minimum of interference with the work of those tribunals. Applying section 11 of the Interpretation Act, with that object in mind, to the question raised by these section 28 applications, it must be recognized that the lack of a right to have the Court review the position taken by a tribunal as to its jurisdiction or as to some procedural matter, at an early stage in a hearing, may well result, in some cases, in expensive hearings being abortive. On the other hand, a right, vested in a party who is reluctant to have the tribunal finish its job, to have the Court review separately each position taken, or ruling made, by a tribunal in the course of a long hearing would, in effect, be a right vested in such a party to frustrate the work of the tribunal.

It was these policy considerations which led this Court, in Szczecka v. Canada (Minister of Employment and Immigration),[14] to conclude that, absent special circumstances, there should not be any appeal or immediate judicial review of an interlocutory decision under section 28. The Szczecka decision was based upon section 28 as currently enacted.

In my view, however, it is appropriate for this Court to hear an application for judicial review of the decision of the Deputy Tax Court Judge in this case. While it did not finally dispose of the respondent’s main appeal under the Unemployment Insurance Act, the impugned decision would deprive the applicant of the ability to make arguments in the alternative when the main appeal is heard. It therefore effectively disposes of one of the two substantive grounds advanced in support of the Minister’s determination. Because either one of these grounds could be determinative of the main appeal, I am of the view that it is appropriate at this stage to hear the application for judicial review.

The applicant alleges that the Deputy Tax Court Judge made a number of errors in his decision. Firstly, that the Deputy Tax Court Judge improperly refused to exercise his jurisdiction under section 70 of the Act when he declined to hear and decide the appeal on its merits, and instead ruled that the applicant was not allowed to make submissions on both of the Minister’s grounds for the determination that Mr. Schnurer’s employment was not insurable. Secondly, on an appeal from a determination by the Minister, subsection 70(2) requires that the Deputy Tax Court Judge either vacate, confirm or vary the determination. In Tignish Auto Parts Inc. v. Minister of National Revenue,[15] this Court recently confirmed that subsection 70(2) does not permit the Tax Court to refer a matter back to the Minister for redetermination. The applicant contends, therefore, that the Deputy Tax Court Judge exceeded his statutory jurisdiction in this case by, in effect, issuing a declaration that the Minister’s determination was defective and directing that the Minister reconsider the matter and return to Court with a position which could rely upon paragraph 3(1)(a) or paragraph 3(2)(c), but not both. Finally, the applicant contends that the Deputy Tax Court Judge erred in law in concluding that the applicant cannot rely upon both paragraphs 3(1)(a) and 3(2)(c) in responding to an appeal from the Minister’s determination.

The applicant’s contentions with respect to the circumscribed jurisdiction of the Deputy Tax Court Judge in a section 70 appeal have much force. However, in view of my conclusion on the issue of an error of law, I do not find it necessary to deal with the jurisdictional arguments in order to dispose of this appeal.

In my respectful opinion, the Deputy Tax Court Judge erred in law in concluding that the applicant could not rely upon both paragraphs 3(1)(a) and 3(2)(c) in responding to the appeal from the Minister’s determination. The authorities in this Court clearly establish that in a section 70 appeal, the Tax Court must focus on the validity of the Minister’s determination, and not on the validity of the Minister’s specific reasons, or the subsections of the Unemployment Insurance Act relied upon, for that determination. As stated by Desjardins J.A. in Barrette v. Canada (Minister of National Revenue—M.N.R.), “What is important is the conclusion arrived at by the Minister, not the sections of the Act on which he relied.”[16] Similarly, in Canada (Attorney General) v. Doucet, Marceau J.A. stated the following:

It is the Minister’s determination which was at issue before the judge, and that determination was strictly that the employment was not insurable. The judge had the power and duty to consider any point of fact or law that had to be decided in order for him to rule on the validity of that determination. This is assumed by s. 70(2) of the Act … and s. 71(1) of the Act … so provides immediately afterwards, and this is also the effect of the rules of judicial review and appeal, which require that the gist of a judgment, which is all that is directly at issue, should not be confused with the reasons given in support of it.[17]

On appeal, the Deputy Tax Court Judge is obliged to review the validity of the Minister’s determination based upon all of the submissions of the parties. The Minister’s determination rests upon the assumed facts as outlined in the applicant’s reply to the notice of appeal. These facts, if not disproved, might lead the Tax Court, on appeal, to conclude that Mr. Schnurer’s employment was not insurable either because Mr. Schnurer was not an employee under a contract of service (paragraph 3(1)(a)) or because the nature of Mr. Schnurer’s relationship with the payor corporation, although a contract of service, was such that it was not substantially similar to a contract between parties dealing at arm’s length and therefore should remain “excepted employment” (paragraph 3(2)(c)). The determination by the Deputy Tax Court Judge on the preliminary question of law, however, would preclude the Tax Court from deciding all of the points of fact and law necessary to assess the validity of the Minister’s determination when the section 70 appeal is heard. For these reasons, I am respectfully of the view that the Deputy Tax Court Judge erred in law in finding that the applicant could not defend the Minister’s determination on the basis of these two alternative grounds.

In reaching this conclusion, I am not unmindful of the fact that, because of this Court’s decision in Tignish, supra, the two grounds advanced by the Minister in this case must be assessed according to different standards of review. In Tignish, supra, this Court held that, where an employer and employee are not at arm’s length, the Minister’s determination under subparagraph 3(2)(c)(ii) that they would not have entered into a similar contract of service had they been at arm’s length, is a discretionary determination subject to a high standard of review on appeal to the Tax Court. In essence, if the Minister has given sufficient weight to all of the relevant factors related to the employment relationship, the Tax Court is not at liberty to overrule the Minister’s decision under subparagraph 3(2)(c)(ii) merely because it would have come to a different conclusion. The Minister’s decision under paragraph 3(1)(a), on the other hand, is quasi-judicial and therefore subject to de novo review by the Tax Court. The different standards of review which apply to these sections, however, do not in any way preclude the applicant from advancing both as grounds, in the alternative, in support of the Minister’s determination. Faced with this class of case, the task of the Tax Court is to review all of the evidence and consider all of the submissions of the parties in order to assess the validity of the Minister’s determination, taking into account the different standards of review which apply to the alternative grounds.

Moreover, in my respectful view, the assumption of the Deputy Tax Court Judge that the word “employment” in paragraph 3(2)(c) necessarily means employment under a contract of service is overly restrictive, and does not accord with the overall purpose and intent of the Unemployment Insurance Act. I note that the definition of “employment” in subsection 2(1) of the Act is not restricted to contracts of service, but rather broadly states that it is “the act of employing or the state of being employed.” In my view, the Act, as reflected in sections 3 and 4 [as am. by S.C. 1990, c. 40, s. 3], is designed to create an unemployment insurance regime in which some employment in the nature of contracts of service is excluded from insurable employment, and other employment is included in insurable employment even though it is not under contracts of service. The Act, in other words, is designed to create an unemployment insurance regime which recognizes that the line between contracts of service and contracts for service is very often blurred. As stated by Beetz J. in Martin Service Station Ltd. v. Minister of National Revenue,[18] and quoted with approval by MacGuigan J.A. in Can. (A.G.) v. Skyline Cabs (1982) Ltd.,[19] “Whether they be self-employed or employed under a contract of service, taxi drivers and bus drivers for instance are exposed to the risk of being deprived of work. This risk is, in my opinion, an insurable one.”

Once “employment” is defined in its broader sense, it can be seen that the Minister’s reliance upon paragraphs 3(1)(a) and 3(2)(c), in the alternative, does not depend on mutually exclusive findings of fact. When faced with this class of case, the Tax Court must approach the analysis in two steps. Firstly, was there an express or implied contract of service? If not, the employment is not insurable unless it falls within one of the provisions of subsection 4(1) or a regulation enacted pursuant to subsection 4(2). Secondly, if it is employment under a contract of service or if it is otherwise insurable under section 4, is it “excepted employment” within the meaning of subsection 3(2)? See, for example, Margeson J.T.C.C.’s decision in Maynard v. Canada (Minister of National Revenue)[20] and Lamarre J.T.C.C.’s decision in Vammen v. Canada (Minister of National Revenue—M.N.R.)[21]. This Court applied the same two-step approach in Minister of National Revenue v. Visan,[22] except that the order of the inquiry was inverted. But, the analytical approach that I have used does not in my respectful view yield a result which is different from that which would have been reached using the approach outlined in Visan.

DISPOSITION

For these reasons, I conclude that the Deputy Tax Court Judge erred in law in concluding that the applicant could not rely upon both paragraphs 3(1)(a) and 3(2)(c) of the Unemployment Insurance Act to defend, on appeal to the Tax Court, the Minister’s determination that Mr. Schnurer’s employment was not insurable. Therefore, I would allow the application for judicial review, and refer the matter back to another judge of the Tax Court for a hearing on the basis of the pleadings as originally filed.

Pratte J.A.: I agree.

Stone J.A.: I agree.

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