Dockets: 2011-431(EI)
2011-432(CPP)
BETWEEN:
CANADIAN BIO PELLET INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
CHRISTOPHER MAYCOCK,
Intervener.
____________________________________________________________________
Appeal heard on August 19, 2011 at Hamilton, Ontario
By: The Honourable Justice Judith Woods
Appearances:
|
Agent for
the Appellant:
|
Stan
Stasko
|
|
Counsel for the Respondent:
|
Annie Paré
|
|
For the
Intervener:
|
The Intervener himself
|
____________________________________________________________________
JUDGMENT
The appeal, with respect to decisions of the Minister of
National Revenue under the Employment Insurance Act and the Canada
Pension Plan that Christopher Maycock was engaged in insurable and
pensionable employment with the appellant from May 15, 2009 to March 1, 2010,
is dismissed and the decisions are confirmed. Each party shall bear their own costs.
Signed at Ottawa, Ontario this 26th day of August 2011.
“J. M. Woods”
Citation: 2011 TCC 406
Date: 20110826
Dockets: 2011-431(EI)
2011-432(CPP)
BETWEEN:
CANADIAN BIO PELLET INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
CHRISTOPHER MAYCOCK,
Intervenor.
REASONS FOR JUDGMENT
Woods J.
[1]
Christopher Maycock
sought rulings from the Minister of National Revenue under the Employment
Insurance Act and the Canada Pension Plan as to whether he was
engaged as an employee with Canadian Bio Pellet Inc. (CBP) during the period
from May 15, 2009 to March 1, 2010.
[2]
The Minister concluded
that Mr. Maycock was an employee. CBP has appealed the rulings and Mr. Maycock
intervenes.
[3]
The essential question
is whether Mr. Maycock was in business for himself when he worked for CBP.
There is not a bright line test. One looks to factors such as control, tools,
and profit and loss. One also looks to see if there was a common intent and
whether the relationship was consistent with this.
[4]
I will refer to key
individuals in these reasons by their first names (Chris, Stan and Dan). I mean
no disrespect by this; it is to avoid confusion since two of the individuals have
the same last name.
Discussion
[5]
Stan and Dan Stasko are
brothers who have a vision of developing a business of manufacturing and
selling wood pellets. CBP was incorporated for this purpose. Extensive work was
done to make the business a reality but project financing has been a stumbling
block and has not yet been arranged.
[6]
As CBP was developing a
business plan in 2008, it needed someone with manufacturing experience to help
with the plan and to eventually be in charge of the plant. Chris was a friend
of Dan’s and could fill this requirement.
[7]
Chris helped CBP out
for about six months without remuneration, partly because he was receiving
employment insurance benefits during a portion of this period. Chris then
started receiving remuneration as of May 15, 2009. The lack of financing made
it impossible to pay full remuneration and Chris accepted $5,000 per month on
an interim basis. Chris eventually found out that source deductions had not
been made and he terminated the relationship as of March 1, 2010.
[8]
Around the time that
Chris started receiving remuneration, CBP negotiated an employment contract
with him and CBP presented a formal written agreement.
[9]
There are two issues
with respect to this agreement, whether it was ever formally accepted by Chris
and whether it was intended to be in force before financing was obtained.
[10]
As for whether the
agreement was formally accepted by Chris, I accept Chris’ testimony that it
was. Stan testified on cross-examination that he was not aware that a signed
contract was returned to CBP. Based on the evidence as a whole, I have
concluded that the contract was formally accepted by Chris. I would note in
particular that a signed contract was entered into evidence.
[11]
CBP also submits that the
contract was not intended to be in force until financing was in place. The only
support for this is Stan’s testimony, which is self-interested. The written
contract, on the other hand, strongly suggests that the contract was intended
to be in force regardless of whether financing was received. The contract did
contain conditions, but financing was not one of them. Further, the evidence as
a whole suggests that the contract was not conditional on financing. I do not
accept Stan’s testimony to the contrary.
[12]
CBP submits that Chris
should have known that the employment contract was not in force because he
accepted reduced remuneration which, because it was a flat monthly amount of
$5,000, suggests that source deductions were not made.
[13]
I do not agree with
this submission. If CBP had intended that Chris not be an employee, it is
likely that Stan or Dan would have communicated this explicitly to Chris. This
was not done.
[14]
I find that CBP and
Chris had a common intent that the relationship was an employment relationship.
[15]
It remains to be considered
whether the conduct of the parties was consistent with this intent. Based on
the evidence before me, I find that it was.
[16]
The ability of CBP to
control the manner in which Chris’ work was done is a key factor in determining
the nature of this relationship. The fact that the parties signed an employment
contract suggests that they expected that CBP would have control. The contract
also supports this by providing that Chris was to report to Dan. Based on the
evidence as a whole, I find that the parties conducted themselves in accordance
with the expectation that CBP could control. It appears that Dan gave Chris
significant freedom, but that CBP always maintained the ability to dictate to Chris.
I would also note that Stan was the only witness for CBP. Dan would have been in
a better position to testify as to a lack of control.
[17]
The other factors
usually considered, ownership of tools, chance of profit and risk of loss, are
not as important in this case and they appear to be neutral.
[18]
The conclusion that I
have reached is that Christopher Maycock was engaged by CBP as an employee
during the relevant period.
[19]
The appeal will be
dismissed. Each party shall bear their own costs.
Signed at Ottawa,
Ontario this 26th day of August 2011.
“J. M. Woods”
CITATION: 2011 TCC 406
COURT FILE NOS.: 2011-431(EI)
2011-432(CPP)
STYLE OF CAUSE: CANADIAN BIO PELLET INC. and THE MINISTER OF NATIONAL REVENUE
and CHRISTOPHER MAYCOCK
PLACE OF HEARING: Hamilton,
Ontario
DATE OF HEARING: August 19, 2011
REASONS FOR JUDGMENT BY: Hon.
J.M. Woods
DATE OF JUDGMENT: August 26, 2011
APPEARANCES:
|
Agent for the
Appellant:
|
Stan Stasko
|
|
Counsel for the
Respondent:
|
Annie Paré
|
|
For the
Intervener:
|
The Intervener himself
|
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm:
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa, Ontario
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