Citation: 2007TCC511
Date: 20070913
Docket: 2006-1569(EI)
2006-1571(CPP)
BETWEEN:
GUY PRESTON DBA GLADIATOR TRANSPORT SS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
DEREK W. BURGESS,
Intervenor.
REASONS FOR JUDGMENT
(Delivered
orally from the Bench at
Kelowna, British Columbia on February 6, 2007)
Beaubier, J.
[1] These appeals were heard together on common
evidence at Kelowna, British Columbia on February 6, 2007. The
Appellant and the Intervenor were the only witnesses.
[2] The particulars in dispute are outlined in
paragraphs 12 to 14, inclusive, of the Reply to Notice of Appeal number
2006-1571(CPP). They read:
12. By letter dated March 10, 2006, the
Minister decided that the Appellant employed Burgess under a contract of
service from September 10, 2004 to May 13, 2005 (the “Period”) within the
meaning of paragraph 6(1)(a) of the Plan.
13. In making his decision the Minister relied
on the assumptions of fact as follows:
a) the Appellant transferred title to a truck
tractor and trailer to Bronco Transportation Systems Inc. (“Bronco”);
b) Bronco was in the business of ground
transportation of goods and merchandise utilizing tractors and trailers;
c) the Appellant and Bronco entered into a
lease arrangement wherein Bronco utilized the Appellant’s tractor/trailer unit
in Bronco’s transportation business;
d) Bronco provided the dispatch and
administration services and paid the Appellant a percentage of the revenue for
each trip of the Appellant’s leased tractor/trailer;
e) Bronco’s name appeared on the
tractor/trailer;
f) the Appellant, under the lease
arrangement with Bronco, was required to reimburse Bronco for the
tractor/trailer insurance coverage;
g) the Appellant advertised for a truck
driver;
h) Burgess responded to the Appellant’s
advertisement and was hired by the Appellant to drive the leased
tractor/trailer;
i) the Appellant assigned Burgess to Bronco
to drive the tractor/trailer;
j) Burgess was required to follow Bronco’s
policies, procedures and dispatch orders;
k) Burgess was not permitted to have
passengers in the tractor/trailer;
l) Burgess’ hours and days of work were
determined by the Bronco dispatcher;
m) Burgess worked exclusively for the
Appellant during the Period;
n) the Appellant was responsible for the gas,
repairs, general maintenance, and toll charges for the tractor/trailer it
leased to Bronco;
o) Burgess was liable for traffic violations
incurred during the time he drove the tractor/trailer;
p) Burgess made no investment in the tractor/trailer;
q) Burgess provided steel-toed boots, a small
set of tools, maps, a cellular phone, pens and paper;
r) Burgess could not subcontract the driving
of the tractor/trailer to another driver;
s) the Appellant paid Burgess between 25% and
30% of the tractor/trailer profits;
t) Burgess did not have the potential for
profit;
u) Burgess was required to consult with the
Appellant in the event of any issues between Burgess and Bronco;
v) Burgess did not charge Goods and Services
Tax (“GST”) to the Appellant; and
w) Burgess did not have a business presence
while driving the tractor/trailer.
B. THE ISSUE TO BE DECIDED
14. The issue is whether the Appellant employed
Burgess in pensionable employment during the Period.
[3] Assumptions 13(a) to (h), inclusive, (j),
(k) and (l); (n) to (r), inclusive and (v) are correct. Respecting them, as to:
(d) Bronco also got all the hauling contracts
from, and billed and collected from its customers and then paid the parties;
(h) the Intervenor was interviewed by the
Appellant but was hired by Bronco after its interview, tests and document
requirements were met;
(i) the Appellant merely referred the Intervenor
to Bronco which, on the evidence, was the only hauler that the Appellant leased
his tractors and trailers to (he had two and, later three);
(k) Burgess did put passengers in the tractor, one
of whom (McPherson) also drove at times;
(l) Bronco and Burgess determined when Burgess would
work;
(n) Burgess testified that he only drove the
Appellant’s tractor, but he told the Appellant he also drove for others – the
Appellant is believed because Burgess admitted that he was down graded as a
driver by Bronco for refusing trips;
(q) Burgess also provided gloves, small tools,
lights and tapes; and
(r) Burgess had McPherson driving for him at
times.
[4] Respecting the remaining assumptions, the
Court finds:
(s) The Appellant and the Intervenor and Bronco
divided the customer’s payments to Bronco 70%, 75% – 30%, 25% of 85%; and 15%
to Bronco;
(t) Burgess controlled the possible profits to
the Appellant and Burgess or the risk of loss to them by his willingness to
take trips, his travel time on trips; and his demeanor towards Bronco and its
customers. He admitted that Bronco was unhappy with his services and began to
“starve” him “out”, so that he could not profit from his trips. As a result,
neither could the Appellant;
(u) Burgess was not required to consult with the
Appellant if there was an issue with Bronco and dealt with Bronco directly;
(w) Burgess had a business presence and passed
himself off to third parties as being in business for himself, as owning the
Appellant’s tractor/trailer and as planning to sell it – he also had business
cards calling himself “Nexxt Transportation Group LP”, which he gave to third
parties and used for repairs to the tractor in February and May, 2005.
[5] This Court does not believe Burgess and
where his testimony conflicts with Preston’s, Preston
is believed. Burgess’ record through the Period is that he drove or not when he
chose; he allowed McPherson to drive which was illegal and jeopardized Bronco
and Preston; he created problems with Bronco; and he falsely used the “Nexxt
Transportation Group LP” which was a fiction, was not a registered partnership,
and falsely portrayed his business status to third parties for what he
considered to be his benefit.
[6] Using the criteria set out in Wiebe Door Services Ltd.
v. M.N.R. [1986] 3 F.C. 553 the Court finds:
1. Control – The actual operating control of the use of the
tractor/trailer and Burgess’ services was with Burgess. His hiring was by
Bronco and it gave work out based on Burgess’ performance. The Appellant had no
control over Burgess or his work.
2. Ownership of Tools – In fact, there
were two contracts with Bronco: The Appellant’s for the property, the tractor/trailer;
and Burgess’ for his personal services and his own small tools as an operator.
3. and 4. Chance of Profit, Risk of Loss –
Burgess controlled his chance of profit/risk of loss and he also controlled the
Appellant’s. Both had these chances, but they were entirely dependent on
Burgess’ relationship with Bronco and his services to Bronco and its customers
and his willingness and ability as a driver.
5. Integration – There was no true
integration. Bronco did or did not award loads. Burgess did or did not drive.
Preston’s tractor/trailer was or was not used by either of them.
[7] Burgess signed a contract with the
Appellant to be an independent contractor. That was their deal and Burgess
conducted himself independently of both Preston
and Bronco. He was not only in it for himself, he was in business for himself
on any basis that he chose from time to time.
[8] The appeals are allowed. The Appellant is
awarded such costs and disbursements as are permitted by the Employment
Insurance Act.
Signed at Calgary, Alberta this 13th day
of September, 2007.
Beaubier,
D.J.
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