Ben Raedarc Holdings Ltd. v. R., 98 DTC 1218, [1998] 1 CTC 2774 (TCC)

Margeson T.C.J.:

It was agreed at the outset that these matters would be heard on common evidence.

An order for exclusion of witnesses was granted pursuant to request.

Facts

Mr. Tom Martell was an Insurance Broker and had been so employed since 1985. He was self-employed selling group benefits packages. He referred to Larry Blower, the chartered accountant for the Appellants, certain insurance policies with respect to the “definition” of a “full-time employee” under these policies. At Tab-2 of Exhibit A-l a “full-time employee” might include a person who worked 20 hours each week. It used the phrase “regularly employed full-time for at least 20 hours each week”.

The witness referred to this policy as a “normal policy including the standard definition of ‘full-time employee’ as referred to above.”

He said that he had sold approximately one hundred of these policies in Victoria alone and the definition was commonly recognized.

Tab 3 of Exhibit A-l contained a Policy Definitions page for Policy No. 84024. The significant portion of this page used the terms “full-time, fullpay basis and working on a part-time basis.” The policy did not cover anyone working on a part-time basis or anyone working less than 20 hours per week.

Tab 4 contained an excerpt from a Sun Life policy which used the term “All permanent full-time Employees who are scheduled to work at least 20 hours a week...”.

The witness said that the definition was accepted as such. He indicated that there are a few policies that require 25 hours a week for a person to be considered a “full-time employee” but the majority of them require only 20 hours a week.

In cross-examination he indicated that he did not provide any policies for coverage of any of the janitors employed by the Appellant, Town Properties Ltd., hereinafter referred to as "the employer”.

Michael Stone had been a lease negotiator for 15 years, had been involved in real estate work before that and now is the manager of a real estate company. He is the president and a director of the employer as well as a shareholder, thereof.

The employer owns property at 423-1207 Douglas Street in Victoria of about 40,000 square feet for commercial purposes.

The employer operates The Royal Trust Building, so-called, composed of six stories with Royal Trust occupying 27,000 square feet, the third and fourth floors occupied by lawyers, a penthouse which is presently unoccupied and other minor tenants.

The building was purchased by “the employer” from Royal Trust and is managed by Equitex, a small real estate management company. This company manages the building on a day-to-day basis, collects rents, manages the accounts and is presently supervising restoration of the building.

This witness identified the Property Management Agreement at Tab 1 of Exhibit A-1, which was admitted into evidence, subject to relevance. Before the execution of this document there was no written agreement, although the terms of the previous oral agreement were essentially the same. This witness oversees what Equitex does with the assistance of Bud Dobie and Dick Lawson.

The witness indicated that the employer has six employees on the janitorial staff. The “lead hand” has been Jessie Campbell since 1965. She manages the six employees. She reports to Dick Lawson. The janitors work four hours a day, Monday to Friday, inclusive.

He said that six people were necessary on the janitorial staff because each one was responsible for a floor for security and safety reasons. This enables the workers to finish up by 10:00 o’clock at night to enable them to catch the bus. It is not desired that the employees work late.

He described the hours worked as a “fairly standard shift”.

He said that he has not had the occasion to discuss employees with Mr. Lawson except for one time when a person was fired. He would want to be consulted about a “firing”.

There was no dental or health plan in existence for coverage of the employees.

In cross-examination he said that he was overseeing the work of Equitex during the relevant years for about 120 days a year. He worked one to two nights at a time. Presently he is doing related work in Courtney and Duncan, British Columbia. Equitex manages the building in question here as an “arm’s length company”.

He agreed that the employer has no other employees except the janitorial staff in question here. Equitex performs minor maintenance for the employer. Both Messrs. Lawson and Dobie are employees of Equitex.

Any repairs under $1,000 would be done by Equitex without discussing it with the employer, over that value it had to be discussed between them.

The witnesses’ father and uncle come to Victoria once a month to oversee the activities of the employer.

The income statements of the employer for 1992 and 1993 were introduced as Exhibits R-l and R-2.

This witness became involved with the employer on a progressive basis since 1990. His father and uncle were aging and losing interest in its operation.

He indicated that Equitex manages the building on a daily basis, arranges to have leases drawn up and discusses the terms with him but Equitex does the direct negotiations for the leases.

Advertising is done by both Equitex and the employer. Equitex has placed adds in his own name. Both the witness and Brad Dobie interview tenants. The witness said that he was very well aware of what was going on in the building.

He confirmed that Equitex does the payroll for the employer and issues the paycheques. Further, Equitex has conducted property tax appeals on the employer’s behalf.

He admitted that Dick Lawson was the one who supervised the cleaning and janitorial staff. He said that there are records showing the hours of work of the employees during the years in question.

He identified Exhibit R-5 as a list of employees for 1992 and 1993 showing the hours worked by each. He said that the summary of the timesheets was at Tab 5 of Exhibit A-1. He said, “I presume it is correct.”

He said that the records should show that there were six full-time employees during the period in question. He would have to rely upon the timesheets.

He presumed that the employees were covered by Workers’ Compensation but was not sure. They received vacation pay but they were covered by no other insurance. He did not know if they received sick leave. They had a coffee break each day which they took together.

Dick Lawson was a retired property manager. He served as the manager of Equitex for 10 years. As earlier indicated, he said that Equitex managed the employer’s building, arranged repairs, liaised between tenants and owners and leased office space. It was in charge of the care of the building and of the comfort and security of its tenants.

He was asked to describe the relationship between the employer and Equitex and he said that Equitex acted for the owners.

The six janitors in question were used exclusively for The Royal Bank building. Michael Stone was a representative of the owners who liaised with Equitex. They met with him once a year and spoke on the telephone if necessary, discussing new tenancies, rents, invoicing, break and enters into the building, fire and flooding. There were also meetings between Bud Dobie of Equitex and Mr. Stone.

This witness was familiar with the supervisor of the janitorial staff but not with the other janitors. He would not deal with them unless there was a problem.

He was familiar with the summary of hours found at Tab 5 of Exhibit A- 1. It was prepared by the bookkeeper for Equitex and Jessie Campbell. He said that it was factual.

He confirmed that the janitorial staff worked from 6 to 10, Monday to Friday and also said that these shifts were fairly common for security and practical reasons. The whole cleaning took 24 person-hours. The workers were finished at a reasonable hour.

If a firing took place the matter was handed over to the bookkeeper.

He identified Exhibits R-2 to R-5.

In cross-examination he said that monthly statements are sent out and if there are problems the owner would contact them, otherwise they concluded that they were satisfied.

He said that Exhibit R-3, the summary of hours was prepared by their bookkeeper but he may have discussed it with him. He had no reason to doubt its accuracy.

Exhibit R-5, the T4 Summary for 1992 was in the name of the employer and it was prepared by the bookkeeper-accountant for Equitex.

He said that Exhibit R-4 included all remuneration paid to all employees of Equitex for 1991 including the janitorial staff in question. This summary was in the name of Equitex as the employer. Likewise, the name Equitex appeared on the T4s as the employer for 1991. The employer number was that of Equitex. In 1992 and 1993 the employer number was that of Town Properties Ltd. and the name Equitex Management also appeared on the forms.

Jessie Campbell was the supervisor of the janitorial staff in question. She worked in The Royal Trust building for 32 years. She said that she was in charge of the staff and also was responsible for the cleaning of one floor. She listed her earlier employer as The Royal Trust and her present employer as Town Properties Ltd. and said that now she receives a cheque from Equitex.

She said that the timesheet records at Tab 5 are in her handwriting. She normally keeps the records of time.

The only benefits the janitorial staff enjoyed were three weeks annual vacation, statutory holidays and a coffee break daily. The usual deductions were made for unemployment insurance, Canada pension plan and income tax.

In cross-examination she confirmed that she worked four hours a day at a rate of $9.00 per hour. The others were paid $7.50 per hour. She calculated that her annual salary was about $8,000.

She believed that all of the employees were covered by Workers’ Compensation.

She prepared the timesheets at the end of each month and gave them to Equitex. She merely totalled the hours at the end of the month.

Argument of the Appellants

In argument, counsel for the Appellants said that the main issue was whether there were four full-time employees of the employer.

There is ambiguity as to what constitutes a “full-time employee” under paragraph 125(7)(e) and subsection 248(1) of the Act. In this case the ques- tion is whether or not four hours per day as opposed to eight is sufficient to render a worker, a “full-time employee”.

Since there is no adequate definition of “full-time employee” it is a question of fact.

Counsel argued that the Minister in his Reply to Notice of Appeal admitted that the workers were “employees” of Town Properties Ltd. and cannot now say that they were not.

Three witnesses said that the workers were employees of Town Properties Ltd. Jessie Campbell said that the employer was always the owner of the building. The only evidence to the contrary is found in the T4s and T4 Summaries. This was a mistake that was corrected in the 1993 and 1994 taxation years.

The assessor was satisfied that the workers were employed by Town Properties Ltd. That should be conclusive when considered together with the other evidence.

The evidence also showed that the workers all worked four hours per day in spite of the information contained in Exhibit R-5, the Summary of Remuneration Paid.

Jessie Campbell was the only one who really knew and she said that there were always six employees and they worked four hours per day.

The Interpretation Bulletins do not dictate what constitutes a “full-time employee”. That is determined by “the general practice in a particular activity”.

Counsel said that the case of R. v. Hughes & Co. Holdings Ltd., (1994), 94 D.T.C. 6511 (Fed. T.D.), is the only case that deals with the term “part- time employee”.

It was his position that that case found that the worker was not a full- time employee of the Appellant because he dedicated the majority of his time to his legal business.

Counsel took the position that a “part-time employee” is usually one who does not work the same number of hours as the other workers. One should look at the interpretation of part-time worker or full-time worker from the point of view of how many hours the person worked in relation to the other workers rather than how many hours the person worked. This interpretation is in accordance with the definition found in the Dictionary of Canadian Law, Dukelow & Nuse, Carswell, referred to in R. v. Hughes, supra, at page 6517.

Counsel found some comfort for this interpretation in Wakelyn v. Minister of National Revenue, (1970), 71 D.T.C. 35 (Can. Tax App. Bd.) at p.38 although that case dealt with a medical expense deduction under subparagraph 27(l)(c)(iv) of the Act.

The workers in the case at bar were given vacation pay. The witnesses described their hours of work as “standard”.

Argument of the Respondent

Counsel argued that the real focus of this case is whether or not a person can be a full-time employee by working four hours a day, but a second issue is whether or not the workers were employees of Town Properties Ltd., on the evidence, in spite of the pleadings. She referred to Continental Bank Leasing Corp. v. R., (1993), 93 D.T.C. 298 (T.C.C.) in support of her position. She agreed that the Minister must assume the burden on that point but has met that burden, relying upon the T4s and the T4 Summaries as providing the necessary evidence in that regard.

Counsel took the position that Jessie Campbell was not an expert as to what constituted an employer. Equitex had all the contacts with the employee. This is an indication that the workers were employees of Equitex and not of Town Properties Ltd.

The T4s and T4 Summaries were all prepared by Equitex. Mr. Lawson on behalf of Equitex had everything to do with supervising Jessie Campbell and the other workers.

In accordance with R. v. Hughes, supra, more than five means six. Exhibit R-3 appears to indicate that there were not more than five employees during 1992 and 1993. This statement refers to the regular permanent staff as at December 31, 1993 while the year-end of the Appellant was March 31 according to Exhibits R-1 and R-2. Therefore, there was no evidence as to the number of “full-time employees” during 1990 except for the evidence of Jessie Campbell who said that the number of employees was the same all along.

Insofar as the definition of “full-time employee” is concerned, there is no definition in the Act or in any other relevant Statute.

Counsel also referred to R. v. Hughes, supra. The Canada Labour Code, c. L-2 section 169(l)(a) deals with the term “standard hours of work being not in excess of 8 hours a day and 40 hours per week”.

Counsel also referred to the Employment Standards Act, Revised Statutes Chapter 113 and noted that section 3 makes it applicable to all employ ees, not excluded by regulation, irregardless of the number of hours worked.

Section 34 entitles an employee to a minimum of four hours at the regular wage once he or she starts work. It also deals with maximum hours of work and the entitlement of the employee to overtime pay after working eight hours per day and 40 hours per week.

Counsel also referred to the definition of “full-time” and “part-time” in Webster’s Third New International Dictionary, which discusses the term in relation to the amount of time considered to be the normal or standard amount of time for a given period or that considered customary or standard.

Counsel argued that the Court must consider the purpose of the legislation and the tests of judicial interpretation as set out in Québec (Communauté urbaine) c. Notre-Dame de Bonsecours (Corp.), (1994), 95 D.T.C. 5017 (Eng.) (S.C.C.) as well as the definition of “full-time” and “part-time” in the Dictionary of Canadian Law, Second Edition, which in turn referred to the particular statutes where the terms were used.

Counsel referred to the technical notes to the Act in support of her position that the legislators could not have intended to give to a company like the Appellants here, who employed the workers for such a small number of hours per week, the benefits created by paragraph 125(7)(e) of the Act.

The purpose of the legislation was to give the benefit to small businesses, who were carrying on an active business and not deriving their income from an investment business, as the Appellants were doing here. This should assist the Court in interpreting what the legislators meant by the term “full-time” employee.

The Court should follow the teleological approach here and interpret the section strictly in light of the purpose of the section.

Here we are characterizing “active business income” as requiring more than five full-time employees. It must have contemplated more than the activity of more than five people for four hours a day only.

The appeal should be dismissed.

Rebuttal

Counsel said that in order for the Respondent to rely upon Continental Bank Leasing Corp., supra, it must establish new facts to establish on the balance of probabilities that they were not employees of the employer. This was not done.

When interpreting Notre-Dame de Bon Secours (Corp.), supra, there must be more than a predetermined presumption that the man in the street would recognize that you must work more than five hours per day to be a “full-time” employee. See Simpson v. Toronto Factory Properties Ltd., (1974), 4 O.R. (2d) 357 (Ont. H.C.) , where the Court equivocated “full- time” to employment on a “continuous basis”.

In the case at bar there was evidence from the insurance policies that was consistent with such an interpretation.

Where there is an ambiguity, as here, it should be resolved in favour of the appellants.

The appeal should be allowed, with costs.

Analysis and Decision

The issue in these cases is whether or not the employer Town Properties Ltd., during its relevant taxation years, ending March 31, 1991, March 31, 1992 and March 31, 1993 was an “active business” under paragraph 125(7)(a) of the Act.

If it were a specified investment business under paragraph 125(7)(e) of the Act, it would not be an “active business” and would not be entitled to claim the small business deduction under section 125 of the Act to which the Appellants claim that it was entitled.

The decision turns, more restrictively, on a finding, as to whether or not the employer employed in the business, throughout the years, more than five full-time employees, [the underlining is mine]

To be successful here the Appellants must satisfy the Court, on a balance of probabilities, that the workers on the janitorial staff were (1) the employees of Town Properties Ltd., “the employer”; (2) that the employees were “full-time employees” and (3) that there were more than five full-time employees.

It is obvious from the presumptions of fact contained in the Reply that the Minister at the time of the assessment proceeded on the basis that the workers in question were employees of Town Properties Ltd. However, at the time of the trial the Respondent took the position that there is still an issue as to whether that was the case, as to whether the workers were employees of Equitex.

Counsel relied upon the evidence presented in Court for that argument, upon Exhibits R-4, R-5, R-6 but more particularly upon Exhibit R-4, for the 1991 taxation year.

Both counsel were in agreement, and the Court finds, that the Respondent is entitled to raise the issue as to the real employer at the time of trial, in spite of the fact that such a position was inconsistent with the assumptions contained in the Reply.

However, in accordance with the decision in Continental Bank Leasing Corp., supra, the Respondent must assume the onus of proving these facts.

There is contradictory evidence in that regard. Exhibit R-4, if considered by itself might indicate that the real employer in 1991 was Equitex. The employer number was also that of Equitex.

Exhibits R-5 and R-6 for the years 1992 and 1993 contained the description Town Properties Ltd. - Equitex Management under the heading: Name of Employer. The employer’s number was that of Town Properties Ltd.

However, there was more evidence given on the matter by the witnesses. A fair interpretation of the evidence of Tom Martell, Michael Stone, clause 3(c) of the Property Management Agreement between Town Properties Ltd. and Equitex (this Agreement was dated the 30th day of November 1994 but the witnesses testified that the same terms were contained in the oral agreement in effect during the years in question), Dick Lawson and Jessie Campbell make it clear that they considered the employer to be Town Properties Ltd. and not Equitex.

The Court concludes from their evidence that they believed that it was a bookkeeping error that gave rise to the name of Equitex being inserted as the employer.

In spite of the argument of counsel for the Respondent that Jessie Campbell was not an expert as to who was the employer, that the T4s and T4 Summaries were prepared by Equitex and that most of the contact with the employees was by Equitex, the Court is satisfied that Equitex was acting only as an agent in the management of the property. That is quite clear from the Property Management Agreement and is consistent with the viva voce evidence.

The Respondent has not met the burden of establishing that the real employer here was not Town Properties Ltd.

The first question is answered favourably to the Appellant’s position. With respect to question number 2, there is no definition of “full-time employee” under subparagraph 125(7)(e)(i) of the Act. Neither is there any decision of any Court which defines this term with any certainty.

In order to determine what is intended by that term under the relevant legislation the Court has to have recourse to the dictionary meaning as set out in the references cited by both counsel, the use of the word in other statutes and the meaning ascribed to it, the meaning referred to in the various insurance plans contained in Exhibit A-1 and the evidence given in Court as to the generally accepted understanding of the term in the janitorial and cleaning business in the Victoria area.

No single consideration will allow the Court to arrive at the answer because the meaning ascribed to the term in another statute does not mean that the legislators intended to adopt that meaning under the Act unless they specifically said so. Likewise the Court cannot adopt holus bolus the evidence of any one witness or group of witnesses as to what the term means under the Act nor can it ascribe to it the definition set out in a number of insurance policies.

Webster’s Third New International Dictionary describes “full-time” as:

The amount of time considered the normal or standard amount for working during a given period (as a day, week or month).

The Oxford English Dictionary, Second Edition, Volume VI defines “full-time” as:

The total number of hours normally allotted to daily or weekly work, etc.

The Oxford English Dictionary defines “part-time” as:

Employed, occurring, lasting, etc. for part of the time or for less than the customary time.

The Dictionary of Canadian Law, Second Edition, refers to:

Full-time basis. In relation to an employee of a particular class, means engaged to work, throughout the year, all or substantially all of the normally scheduled hours of work established for persons in that class of employees. Pension Benefits Standards Act, R.S.C. 1985 (2d Supp.), c.32, s.2.

Full-time employee. An employee whose regular work week exceeds thirty hours. Inflation Restraint Act, 1982, S.O. 1982, c.55, s.4.

Full-time employment. Employment requiring continuous service in an officer position, where the employee is normally required to work the minimum number of hours prescribed by the person having authority to establish the hours of such employment.

From such references the Court considers that in the absence of a clear definition in the Act, in terms of the minimal number of hours that must be worked to qualify one as a “full-time employee” under the relevant sections, it must consider in the circumstances of this case what were the normally scheduled hours of work established for janitors in the Vancouver area during the periods in question and whether or not the workers here worked all or substantially all of those hours. What was considered to be the normal or standard amount of time for janitors to work during the years in question? Did the workers in question work less than the customary time?

What were the minimum number of hours prescribed by the person who had authority to establish the hours of employment?

in the case at bar there was evidence led by the Appellants, from persons who were very knowledgeable in the field as to what hours a janitorial staff were normally required to work in the Victoria area and they gave reasons for establishing such hours which reasons were not unreasonable and were not challenged.

Further, no evidence was introduced by the Respondent, nor did it come out in the cross-examination, that the evidence given by the witnesses called by the Appellants was unreliable, inaccurate or not according to standards established in the Victoria area.

The Court is satisfied that some of the workers in question were full- time employees of the Appellant, Town Properties Ltd. during the relevant years.

In so deciding, the Court has considered the argument raised by counsel for the Respondent that having due regard to the ratio decendi in Corporation Notre-Dame de Bon-Secours, supra, as well as Symes v. R., (1993), 94 D.T.C. 6001 [1993] 4 S.C.R. 695 (S.C.C.)and the technical notes to the Income Tax Act and Regulations, 8th Edition, referable to section 125 of the Act, that the workers here do not qualify.

However, nothing in those notes or cases assist the Court here in deciding what the legislators meant by the term “full-time employee” in the absence of further specifications.

The tenure of the notes indicate that the intention of the legislators was to give some relief to small businesses and small family types of businesses, but such an intention does not detract from the fact that no minimum number of hours were referred to nor is there anything in the notes to indicate that the legislators did not intend that such relief might accord to a business like that of the Appellants, given the facts that have been established here.

This business was a substantial one, in terms of income and expenses. It operated a real estate business and employed a substantial number of employees as well as utilizing the services of agents.

The Court finds that some of the employees were “full-time employees” given the established facts here. Such employees were those who worked all or substantially all of four hours per day, five days a week, throughout the years in question, in accordance with the Court’s finding as to what constituted a “full-time employee”, as indicated above.

One would think that it would be a relatively easy task,providing records were kept properly, of proving that there were more than five full-time employees during the years in question. However, in this case there are some difficulties for the Appellants in light of the evidence adduced.

The evidence in that regard is somewhat confusing and contradictory.

If the Court were to accept holus bolus the evidence of the witnesses called on behalf of the Appellant, it would have to find that there were more than five “full-time employees” throughout the year in question.

Michael Stone said that there were six full-time employees on the janitorial staff and that they were managed by Jessie Campbell. He said that there were six because each one took a floor for security and safety purposes. But he was obviously of the belief that at least six persons worked four hours per day, five days per week throughout the year.

He believed that Exhibit R-3 and Exhibit A-l, Tab 5 would show that there were more than six full-time employees during the years in question but he did not examine these documents closely and he did not point out the basis for such a conclusion. He had to rely on the timesheets.

Dick Lawson said that there were six full-time employees on the janitorial staff during the years in question.

The timesheets were prepared by Jessie Campbell and the bookkeeping by Equitex. It is obvious that he accepted them as factual and accurate.

He said that the employees worked from 6 to 10, five days per week and that it took 24 person hours to do the cleaning each week. He did not keep the records himself and obviously he could not confirm from his own knowledge that there were six full-time employees there throughout the years in question.

With respect to Exhibit R-3 he could only say that he may have seen it. It was prepared by the bookkeeper for Equitex and he may have discussed it with him. “He had no reason to question its accuracy”.

Jessie Campbell was the author of the timesheets at Exhibit A-l, Tab 5. Her evidence was that there are normally five full-time employees plus herself. She said that there are always six in total.

Her timesheets were prepared at the end of each month or totalled. She said, “that is all that I do”, obviously referring to her method of recording the hours.

The years in question are the taxation years of Town Properties Ltd. ending March 31, 1991, March 31, 1992 and March 31, 1993.

Apart from the general evidence of the witnesses that there were always six full-time employees, the only other evidence was provided at Exhibit A- 1, Tab 5 Exhibit R-3 and Exhibit R-4.

From Exhibit R-3 the Court concludes that the reference to 1992 and 1993 were the fiscal years of Town Properties Ltd. but it contains conflicting information. At the top of the document are written the words “six individuals, five days per week, four hours per day”.

However, when one looks at the list of workers for 1992 there are only four employees who have the full twelve months of employment and one other has eleven months of work. For the year 1993 there were only four. Only these persons could reasonably be considered by the Court as having worked “substantially all of the regular hours” so as to possibly include Colleen Carpenter as a full-time employee in 1992. Various other workers were there only for portions of the year not approaching the required number of months.

However, R. v. Hughes, supra, is in support of the proposition that subparagraph 125(7)(e)(i) of the Act requires that to avoid “specified investment business status”, a taxpayer must have “more than five full-time employees”. This clearly means at least six full-time employees.

Jessie Campbell said that she was a full-time employee and she said that her salary was around $8,000 per year. She received $9.00 per hour while the rest received $7.50 per hour. Her T4 for 1991 showed that she earned $8,588.03 gross. Therefore, she must have worked 954.22 hours that year which was in excess of four hours per day, five days per week for the 12 month which would have amounted to approximately 832 hours.

Likewise, Maria Achadinha worked 944 hours, Kelly Vanderveen 930 hours and Rita Chaves 920 hours. These calculations were based upon their 1991 earnings.

Angelina Nanni worked 602 hours.

There was no T4 in 1991 for O.P. Chaves.

Sandra Zimmer worked 39 hours, Shirline Wall worked 283 hours and T. Scholefield worked 888 hours.

The above statistics would appear to indicate that only five of these people worked more than the normal hours for a year which would have been 832 hours.

Further these calculations are not in accordance with the timesheets which show 1006 hours for Jessie Campbell, 926 for Maria Achadinha, 1034 hours for Kelly Vanderveen; 986 hours for Rita Chaves; 344 hours for Angelina Nanni; 40 hours for Sandra Zimmer; 388 for Shirlanne Wall and 348 hours for Theresa Scholefield.

Those were the principle workers during the year 1991 at least and the records are at odds with the T4 Supplementaries which leads the Court to conclude that one or the other is inaccurate and no attempt was made during the trial to clear up these apparent discrepancies.

If one looks at the record of hours kept by Jessie Campbell for 1991, at least during the months of January, February, March, May, September and possibly October, there were less than six full-time employees working for the Appellant in accordance with the definition set out above.

According to the same records in 1992, in the months of May, June, July, August, September and October, there would have been less than six full-time employees, using the same definition of full-time employee.

Again in 1993 in the month of January, possibly February, April and September there would not appear to have been more than five full-time employees.

Again no effort was made at the time of the presentation of the evidence nor in argument at the time of the trial to show otherwise.

In addition to that, the time records found in Exhibit A-l, Tab 5 contain part pages which appear to be duplicates, contain notes that have not been explained, nor was any attempt made to explain them, changing the number of hours recorded, which might very well reflect the fact that Jessie Campbell only recorded these periodically and possibly from memory.

At one place in the notes is a notation, “what’s happening” followed by a list of names that are scratched out and that in turn is followed by a notation, “what’s happening”.

There was no explanation afforded at the time of trial for any of these notes. There was no attempt to explain the notes regarding vacations and whether those numbers should be factored into the total hours of work for the employee on vacation.

As indicated by counsel for the Respondent, the year ending March 31, 1991, would have included the months of April 1, 1990 to March 31, 1991 and no records were tendered for any portion of 1990.

The Court finds that it is unable to rely upon the accuracy of the records tendered in support of the Appellants’ position and finds further that what records were tendered are inconclusive of the Appellants’ position, are contradictory of the viva voce evidence and in some instances, as indicated above, support the position taken by the Respondent.

The Court finds that the Appellants have failed to meet the burden of establishing that during the relevant taxation years, Town Properties Ltd. had more than five full-time employees in accordance with the definition above referred to. It was not entitled to claim the small business deduction to which it had argued that it was entitled.

The appeals are dismissed, with costs, and the assessments are confirmed.

Appeal dismissed.