Citation: 2012 TCC 1
Date: 20120109
Dockets: 2011-689(CPP),
2011-2491(EI)
BETWEEN:
PRIORITY ONE JANITORIAL SERVICES INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Bédard J.
[1]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things, Canada
Pension Plan contributions in the amount of $3,928.37 for 2006, in respect of
Ansar Bacchus (hereinafter “Ansar”), Connie Bacchus (hereinafter “Connie”),
Denise McLeod (hereinafter “Denise”), Kary McLeod (hereinafter “Kary”), Manuel
Mora (hereinafter “Mora”) and Jacquelin Pierre‑Antoine (hereinafter
“Pierre-Antoine”).
[2]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things, Canada
Pension Plan contributions in the amount of $871.48 for 2007, in respect of
Kalsoom Gillani (hereinafter “Gillani”), Raiz Khan (hereinafter “Khan”), Mora,
Pierre-Antoine and Abdul Hakim Yfate (hereinafter “Yfate”).
[3]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things, Canada
Pension Plan contributions in the amount of $1,237.50 for 2007, in respect of
Ansar.
[4]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things, Canada
Pension Plan contributions in the amount of $300.96 for 2008, in respect of
Pierre-Antoine.
[5]
By Notice of Assessment
dated June 5, 2009 the Appellant was assessed for, among other things, Canada
Pension Plan contributions in the amount of $33.24 for 2009, in respect of
Pierre-Antoine.
[6]
By letter received
March 19, 2010, the Appellant appealed to the Minister for a reconsideration of
the assessments for 2006, 2007, 2008 and 2009.
[7]
In response to the
appeal, the Minister confirmed the assessments for 2006, 2007, 2008 and 2009 as
Ansar, Connie, Denise, Kary, Mora, Pierre-Antoine, Khan, Gillani and Yfate
(collectively hereinafter “the Workers”) were employed under a contract of
service with the Appellant.
[8]
The facts on which the
Minister relied in thus confirming the assessments in the CPP case
(2011-689(CPP)) are set out in paragraph 9 of the Reply to the Notice of Appeal
as follows:
(a)
the Appellant was in the business of cleaning
commercial properties; (admitted)
(b)
the Appellant obtained the clients (hereinafter
“the Client”); (denied)
(c)
the share structure of the Appellant, in January
2006, was as follows:
Ansar 25%
Connie 25%
Kary 25%
Denise 25% (admitted)
(d)
the share structure of the Appellant changed in
mid 2006 to:
Ansar 50%
Connie 50% (admitted)
(e)
the Workers were hired as labourers and their
duties included cleaning, mopping, sweeping, dusting, wiping, vacuuming and
garbage collection; (denied)
(f)
the Workers did not enter in a written contract
with the Appellant; (admitted)
(g)
the Workers performed their services at the
Client’s premises; (admitted)
(h)
the Workers were hired on a continuous basis; (denied)
(i)
the Appellant paid the Workers on a monthly
basis; (denied)
(j)
the Appellant determined the Workers’ wage
rates; (denied)
(k)
the Workers did not bid for work; (admitted)
(l)
the Workers did not invoice the Appellant; (admitted)
(m)
the Appellant set the Workers’ hours of work; (denied)
(n)
the Workers worked during the “off hours” of the
Client’s business; (admitted)
(o)
the Workers worked whatever hours were required
to complete the work; (admitted)
(p)
the Appellant retained the right to control the
Workers; (denied)
(q)
the Appellant trained the Workers; (admitted)
(r)
the Workers did not have specific licenses,
certifications or designations relating to the job; (admitted)
(s)
the Appellant instructed the Workers on the work
to be done and the duties to be performed; (admitted)
(t)
the Appellant reviewed the Workers’ work; (denied)
(u)
some of the Workers worked in groups; (admitted)
(v)
the Appellant, through it’s agreement with the
Client, established the Workers’ priorities and deadlines; (admitted)
(w)
the Workers represented the Appellant while
performing their services; (admitted)
(x)
the Workers could not hire their own helpers or
replace themselves; (denied)
(y)
the Client provided all of the tools and
equipment required; (admitted)
(z)
the Workers did not provide any tools or
equipment; (denied)
(aa)
the Client provided all of the supplies required;
(admitted)
(bb)
the Workers did not incur any expenses in the
performance of their duties; (admitted)
(cc)
the Workers did not provide their own liability
insurance; (admitted)
(dd)
the Workers did not incur any capital costs of a
business; (admitted)
(ee)
the Workers did not have a chance of profit or a
risk of loss; (admitted)
(ff)
the Workers did not present themselves as their
own business presence; (denied)
(gg)
the service performed by the Workers was for the
benefit of the Appellant; (denied)
(hh)
the Workers did not work for others while
performing services for the Appellant; (denied)
(ii)
some Workers considered themselves to be
employees while performing services for the Appellant; (denied)
(jj)
the Workers were not in business for themselves
while performing services for the Appellant; (denied)
(kk)
the Appellant withheld and remitted payroll
deductions for part of the 2006 year; (denied)
(ll)
the Appellant’s income tax return included the
following expenses: (denied)
|
|
2006
|
2007
|
|
Salaries and wages
|
$16,754
|
$17,584
|
|
Management salaries
|
$44,000
|
$16,000
|
(mm)
wages paid by the Appellant to the Workers, for
the period January 1, 2006 to January 31, 2009, were as follows: (denied)
|
|
2006
|
2007
|
2008
|
2009
|
|
Ansar
|
$4,250
|
16,000
|
|
|
|
Connie
|
$4,250
|
|
|
|
|
Denise
|
$17,750
|
|
|
|
|
Kary
|
$17,750
|
|
|
|
|
Mora
|
$4,500
|
$2,837
|
|
|
|
Pierre-Antoine
|
$12,246
|
$6,839
|
$6,540
|
$627
|
|
Khan
|
|
$458
|
|
|
|
Gillani
|
|
$4,380
|
|
|
|
Yfate
|
|
$787
|
|
|
[9]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things,
employment insurance premiums in the amount of $619.34 for 2007, in respect of
Michael Dagnew (hereinafter “Dagnew”), Gillani, Khan, Gibran Khan (hereinafter
“Gibran”), Mora, Pierre‑Antoine and Yfate.
[10]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things,
employment insurance premiums in the amount of $279.91 for 2008 in respect of
Pierre-Antoine and Ashley Vaughan (hereinafter “Vaughan”).
[11]
By Notice of Assessment
dated June 5, 2009, the Appellant was assessed for, among other things,
employment insurance premiums in the amount of $34.51 for 2009 in respect of
Pierre-Antoine and Vaughan.
[12]
By letter received
March 19, 2010, the Appellant appealed to the Minister for a reconsideration of
the assessments for 2007, 2008 and 2009.
[13]
In response to the
appeal, the Minister confirmed the assessments for 2007, 2008 and 2009 as
Dagnew, Gillani, Khan, Gibran, Mora, Pierre‑Antoine, Vaughan and Yfate
(collectively hereinafter “the Workers”) were employed under a contract of
service with the Appellant.
[14]
The facts on which the
Minister relied in thus confirming the assessments for 2007, 2008 and 2009 are
set out in paragraph 7 of the Reply to the Notice of Appeal as follows:
(a)
the Appellant was in the business of cleaning
commercial properties; (admitted)
(b)
the Appellant obtained the clients (hereinafter
“the Client”); (denied)
(c)
the share structure of the Appellant, in January
2006, was as follows:
Ansar Bacchus 25%
Connie Bacchus 25%
Kary McLeod 25%
Denise McLeod 25% (admitted)
(d)
the share structure of the Appellant changed in
mid 2006 to:
Ansar Bacchus 50%
Connie Bacchus 50% (admitted)
(e)
the Workers were hired as labourers and their
duties included cleaning, mopping, sweeping, dusting, wiping, vacuuming and
garbage collection; (denied)
(f)
the workers did not enter in a written contract
with the Appellant; (admitted)
(g)
the Workers performed their services at the
Client’s premises; (admitted)
(h)
the Workers were hired on a continuous basis; (denied)
(i)
the Appellant paid the Workers on a monthly
basis; (denied)
(j)
the Appellant determined the Workers’ wage
rates; (denied)
(k)
the Workers did not bid for work; (admitted)
(l)
the Workers did not invoice the Appellant; (admitted)
(m)
the Appellant set the Workers’ hours of work; (denied)
(n)
the Workers worked during the “off hours” of the
Client’s business; (admitted)
(o)
the Workers worked whatever hours were required
to complete the work; (admitted)
(p)
the Appellant retained the right to control the
Workers; (denied)
(q)
the Appellant trained the Workers; (admitted)
(r)
the Workers did not have specific licenses,
certifications or designations relating to the job; (admitted)
(s)
the Appellant instructed the Workers on the work
to be done and the duties to be performed; (admitted)
(t)
the Appellant reviewed the Workers’ work; (denied)
(u)
some of the Workers worked in groups; (admitted)
(v)
the Appellant, through it’s agreement with the
Client, established the Workers’ priorities and deadlines; (admitted)
(w)
the Workers represented the Appellant while
performing their services; (admitted)
(x)
the Workers could not hire their own helpers or
replace themselves; (denied)
(y)
the Client provided all of the tools and
equipment required; (admitted)
(z)
the Workers did not provide any tools or
equipment; (denied)
(aa)
the Client provided all of the supplies required;
(admitted)
(bb)
the Workers did not incur any expenses in the
performance of their duties; (denied)
(cc)
the Workers did not provide their own liability
insurance; (admitted)
(dd)
the Workers did not incur any capital costs of a
business; (admitted)
(ee)
the Workers did not have a chance of profit or a
risk of loss; (admitted)
(ff)
the Workers did not present themselves as their
own business presence; (denied)
(gg)
the service performed by the Workers was for the
benefit of the Appellant; (denied)
(hh)
the Workers did not work for others while
performing services for the Appellant; (denied)
(ii)
some Workers considered themselves to be
employees while performing services for the Appellant; (denied)
(jj)
the Workers were not in business for themselves
while performing services for the Appellant; (denied)
(kk)
the Appellant withheld and remitted payroll
deductions for part of the 2006 year; (denied)
(ll)
the Appellant’s income tax return included the
following expenses: (denied)
|
|
2006
|
2007
|
|
Salaries and wages
|
$16,754
|
$17,584
|
|
Management salaries
|
$44,000
|
$16,000
|
Item (mm) continues on the
next page.
(mm)
wages paid by the Appellant to the Workers, for
the period January 1, 2006 to January 31, 2009, were as follows: (denied)
|
|
2007
|
2008
|
2009
|
|
Dagnew
|
$225
|
|
|
|
Gibran
|
$277
|
|
|
|
Mora
|
$2,837
|
|
|
|
Pierre-Antoine
|
$6,839
|
$6,540
|
$627
|
|
Khan
|
$458
|
|
|
|
Gillani
|
$4,380
|
|
|
|
Vaughan
|
|
$200
|
$203
|
|
Yfate
|
$787
|
|
|
[15]
The Appellant carried
on, inter alia, a business of cleaning commercial properties. The
Appellant hired the Workers to clean the commercial properties of its clients.
[16]
The Appellant’s
position is that the Workers were not employed under a contract of service. In
other words, the Appellant contends that the Workers were independent
contractors.
[17]
Ansar and Pierre-Antoine
were the only two witnesses.
[18]
Each case in which the question of whether a person
is an employee or an independent contractor arises must be dealt with on its
own facts. Each of the four components (control, ownership of tools, chance of
profit and risk of loss) of the composite test enunciated in Wiebe Door
Services Ltd. v. M.N.R., 87 DTC 5025, and 671122 Ontario Ltd.
v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983, must be assigned
its appropriate weight in the circumstances of the case. Moreover, the
intention of the parties to the contract has, in recent decisions of the
Federal Court of Appeal, become a factor whose weight seems to vary from case
to case (Royal Winnipeg Ballet v. M.N.R., 2006 FCA 87; Wolf
v. Canada, [2002] 4 F.C. 396; City Water International Inc. v.
Canada, 2006 FCA 350; National Capital Outaouais Ski Team v. M.N.R.,
2008 FCA 132).
[19]
In assessing the evidence provided by the Appellant, the Court must
comment on the failure to call as witnesses certain persons who could have
confirmed Ansar’s statements. In Huneault v. Canada, [1998] T.C.J. No.
103 (QL), 98 DTC 1488 (Fr.), my colleague, Lamarre J., referred, at paragraph
25, QL (page 1491 OTC), to remarks made by Sopinka and Lederman in The Law
of Evidence in Civil Cases, which were cited by Judge Sarchuk of this Court
in Enns v. M.N.R., 87 DTC 208, at page 210:
In The Law of Evidence in Civil Cases, by Sopinka
and Lederman, the authors comment on the effect of failure to call a witness
and I quote:
In Blatch v.
Archer, (1774), 1 Cowp. 63, at p. 65, Lord Mansfield stated:
"It
is certainly a maxim that all evidence is to be weighed according to the proof
which it was in the power of one side to have produced, and in the power of the
other to have contradicted."
The application
of this maxim has led to a well-recognized rule that the failure of a party or
a witness to give evidence, which it was in the power of the party or witness
to give and by which the facts might have been elucidated, justifies the court
in drawing the inference that the evidence of the party or witness would have
been unfavourable to the party to whom the failure was attributed.
In the case
of a plaintiff who has the evidentiary burden of establishing an issue, the
effect of such an inference may be that the evidence led will be insufficient
to discharge the burden.(Lévesque
et al. v. Comeau et al. [1970] S.C.R. 1010, (1971), 16 D.L.R. (3d) 425)
(emphasis added)
[20]
In the instant case,
before analyzing the relevant facts, it is useful to make certain general
comments on the credibility of Ansar, who, I would point out, was the only
person to testify in support of the Appellant’s appeal. I emphasize that the
Appellant actually filed only the letters (Exhibit A-1) of three workers
stating that they were independent contractors when they worked for the
Appellant, to which letters I did not give much weight since those workers were
not called as witnesses by the Appellant. In my view, it would be hazardous to give
Ansar’s testimony any credence without any conclusive corroborative evidence in
the form of documentation or of testimony by credible witnesses.
[21]
Ansar’s answers were
generally vague, imprecise and ambiguous. All too often, in cross-examination,
he was unable to provide any explanation of the Appellant’s operations; he
constantly repeated that he was a “moron” and that only the accountant and Kary
- who, I note again, did not come and testify - were able to give valid
explanations regarding, among other things, the reason for the Appellant’s
stopping the withholding and remitting of payroll deductions in 2006. I infer
that these testimonies would have been unfavourable to the appellant. Not only
were the Appellant’s answers generally vague and imprecise, but they were
contradicted on certain points. For example, he testified that the legal
relationship the Workers entered into with the Appellant was discussed when they
were hired by the Appellant. Pierre-Antoine, on the other hand, testified that
the legal relationship he entered into with the Appellant was never discussed.
For these reasons, I attached little probative value to Ansar’s testimony where
it was not corroborated by sound documentary evidence or by the testimony of
credible witnesses.
[22]
We also learnt the
following from Pierre-Antoine’s testimony, which seemed credible :
(i)
He was paid a fixed
amount to clean for one of the Appellant’s clients.
(ii)
He did not negotiate
his rate of pay.
(iii)
He did not provide any
tools or equipment.
(iv)
He did not incur any
expenses in the performance of his duties.
(v)
He had the right to set
his hours of work as long as he worked during the off hours of the client’s
business.
(vi) He hired his wife on one occasion to
replace him.
[23]
Starting with the issue
of intention, what evidence do I have of the Appellant’s and the Workers’
intention with regard to the legal relationship they entered into. Firstly, it
should be pointed out that there is no written agreement to which I can refer.
Secondly, the Appellant stated that its intent in engaging the Workers was that
the Workers would be subcontractors. The Appellant’s evidence in this regard
was based on Ansar’s testimony, which I decided was not very credible, and on documentary
evidence (Exhibit A-1, 3 letters of Workers stating that they were independent
contractors when they worked for the Appellant) to which I did not give much
weight since those workers were not called as witnesses by the Appellant. On
the other hand, I had a credible witness who testified that the legal
relationship he entered into with the Appellant was not even discussed when he
was hired by the Appellant. This witness also testified that he did not really
understand the meaning of self-employment when he first verbally entered into
the contract with the Appellant. I cannot infer from the evidence that the
Appellant and the Workers shared a common understanding that the Workers were
to be self‑employed and not employees. Where the intention of the parties
cannot be ascertained, it is quite proper, indeed necessary, to look at all the
facts to see what legal relationship they reflect. In that regard, the four
components of the composite test enunciated in Wiebe Door Services Ltd. are
relevant and helpful in ascertaining the intent of the parties to the contract
and the legal nature of the contract.
[24]
My analysis of the Wiebe
Door Services Ltd. factors is set out hereunder.
[25]
The opportunity for
profit. The evidence
revealed that the Workers did not negotiate their rate of pay. The Workers were
paid a fixed amount to clean the Appellant’s clients’ premises. For example,
Pierre-Antoine was paid $700 a month to clean 3 times a week the premises of a
client of the Appellant. Since the Appellant's clients provided the equipment
and material needed to clean their premises, the only opportunity for the
Worker to increase their income would have been for them to subcontract their duties
to other workers at a lower rate. The evidence did not reveal that the Workers
were allowed to do so or that they had in fact done so. This favours the
conclusion that the Workers were employees.
[26]
The degree of
responsibility for investment and management borne by the Workers. The
Workers had no such responsibility. This favours the conclusion that the
Workers were employees.
[27]
The degree of
financial risk taken on by the Workers. The Workers bore no financial risks
related to any investment in equipment or tools, or with regard to the cost of
operating the business. The Workers did not obtain their own liability insurance.
This favours the conclusion that the Workers were employees.
[28]
Whether the Workers
provided their own materials and equipment. In my view, this factor is neutral. Neither the
Workers nor the Appellant were required to provide the equipment and the
materials needed to clean for the Appellant’s clients. The Appellant’s clients
provided all the materials and equipment needed to clean their premises.
[29]
The level of control
the Appellant had over the Workers’ activities. The evidence revealed that the Appellant did not
directly supervise the work of the Workers. Considering the nature of the employment,
little supervision would have been needed, whether the Workers were employees
or self-employed. For this reason, I consider this factor to be neutral.
[30]
Whether the Workers
hired helpers. Pierre-Antoine
testified that the Appellant gave him the right to substitute another worker
for himself at his own cost. That is consistent with the Workers being
self-employed. However, there is no evidence that any Workers exercised this
right (with the exception that Pierre‑Antoine was replaced once by his
wife), which suggest that this factor should be given little weight.
[31]
On balance, the Wiebe
Door Services Ltd. factors favour the conclusion that the Workers were
employees.
[32]
For the foregoing reasons,
the appeals are dismissed.
Signed at Ottawa, Canada, this 9th
day of January 2012.
"Paul Bédard"
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