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Citation: 2008 TCC 331
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Date: 20080711
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Dockets: 2006-2748(CPP)
2006-2809(CPP)
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BETWEEN:
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LOGITEK TECHNOLOGY LTD.,
MATEEN ZUBAIRI,
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Appellants,
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and
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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REASONS FOR JUDGMENT
Weisman
D.J.
[1] These two appeals are from determinations by the Minister of
National Revenue (the “Minister”) that the Appellant, Mateen Zubairi
(“Zubairi”) was in pensionable employment within the meaning of the Canada
Pension Plan
(the “Plan”), from October 1, 2003 to January 4, 2006, while engaged by
the Appellant Logitek Technology Ltd. (“Logitek”). The appeals were heard
together on common evidence on consent.
[2] Paragraph 6.(1)(a) of the Plan defines pensionable
employment as:
(a) employment in Canada that is not excepted employment;
[3] This matter is complicated by the fact that the Appellants were not
dealing with each other at arm’s length during the period under review, since
Logitek’s shares are wholly owned by Zubairi’s sister and brother-in-law. For
this reason, Zubairi was in excluded employment within the meaning of paragraph
5.(2)(i) of the Employment Insurance Act
(the “Act”), and the Minister has not exercised his discretion under
paragraph 5.(3)(b) of the Act to deem otherwise.
[4] It remains to be determined if Zubairi was in pensionable employment
as the Minister asserts, or if he was an independent contractor, as he
maintains. The latter was clearly the common intention of the parties as they
executed an agreement to this effect in September 2003. It has often been held,
however, that such agreements are not determinative of the relationship between
the parties, which is a matter of law.
This is because the legal relationship between a payer and a worker can affect
the rights of third parties. In Sagaz the Court says at paragraph 36:
…The distinction between an employee and
an independent contractor applies not only in vicarious liability, but also to
the application of various forms of employment legislation, the availability of
an action for wrongful dismissal, the assessment of business and income taxes,
the priority taken upon an employer's insolvency and the application of
contractual rights.
[5] In order to resolve this question, which has been variously
characterized as “fundamental”;
“central”;
and “key”,
the total relationship of the parties
and the combined force of the whole scheme of operations must be
considered. To this end, the evidence in this matter is to be subjected to the
four-in-one test laid down as guidelines
by Lord Wright in Montreal City and adopted by MacGuigan, J.A. in Wiebe
Door. The four guidelines are the payer’s control over the worker; whether
the worker or the payer owns the tools required to fulfil the worker’s
function; and the worker’s chance of profit, and risk of loss in his or her
dealings with the payer.
[6] Logitek develops technical software that helps solve various
business problems such as supply chain management. This involves, inter alia,
the expedited issuance of electronic purchase orders and shipment receipts,
resulting in the user having to stock and finance fewer items of inventory.
[7] Zubairi, a certified general accountant, began his working
relationship with Logitek on October 1, 2003, when the company was insolvent
and needed assistance in reorganizing itself and making accommodations with its
bankers and other creditors. He was designated on the corporate website as its chief
financial officer, and was assured a retainer of $7,000 per month. This
remuneration was commensurate with that of the company’s prior chief financial officer,
who was originally employed to oversee the abortive transformation of Logitek
from a private company, into a public one. Zubairi’s retainer was arrived at by
multiplying his commitment to Logitek of 10 hour per week, by his average
billing rate of $175 per hour. In addition to this monthly stipend, he was
also entitled to a $1,000 per month “car allowance” which actually
reimbursed him for expenses incurred on Logitek’s behalf, including
entertaining the bank’s representatives. In September 2005, this allowance was
discontinued and replaced by a $2,800 per month increase in his retainer,
ensuring him a total annual income from Logitek of $117,000.
[8] So far as his duties were concerned, Zubairi’s evidence in this
regard can best be described as vague, as it was in a number of relevant areas
of inquiry. He first testified that he provided “financial consultation and
advisory services” for the now‑viable company, and was not really its
chief financial officer, his website description as such being a bank
requirement. The same website also claims that he is in charge of the financial
management and accounting functions of the company, even though it has an
internal bookkeeper and an external accountant. In his testimony, Zubairi could
identify only three specific areas of responsibility: he acts as Logitek’s
consultant, forecasts its revenue, and deals with its bankers.
[9] This matter is further complicated by the fact that Zubairi was
carrying on a business on his own account during the period under review. As a
certified general accountant, he maintains an office of his own in Mississauga and has clients other than
Logitek. He charges them from $150 to $200 per hour for his services. His
office is in the same rented premises as a boutique owned by him as sole
proprietor, which carries on the business of importing and selling religious
artefacts under the name “Amira Enterprises”. The question raised by this
scenario is whether a person who is an independent contractor for one purpose,
is therefore the same for all purposes; or whether one can be carrying on
business on his own account in some working relationships, and at the same
time, be an employee in others. In my opinion, the latter view prevails.
Zubairi could well be in the employ of Logitek, while supplementing his income
in his free time by means of the retail store and his accounting practice.
[10] Turning to the four-in-one test articulated in
Montreal City and in Wiebe Door, I find
it necessary to first review the authorities to date to see just how “control”
is judicially defined, before applying the facts of this case to the control
criterion. Specifically, questions arise as to whether the requisite control is
de facto, de jure, or both; whether there are special rules
applicable where highly skilled or professional workers are concerned; whether
the same definition governs cases under both the common law and the Civil Code
of Québec; and whether it applies equally to cases of vicarious liability and
employment law.
[11] The starting point of our quest has to be the
following finding of Baron Bramwell in Regina v. Walker
(“Walker”): “A principal has the right to direct what the agent has to
do; but a master has not only that right, but also the right to say how it is
to be done”. Control was further defined by Dixon, J. in Humberstone v. Northern Timber Mills
as follows:
The question is not whether in practice the work was
in fact done subject to a direction and control exercised by an actual
supervisor or whether an actual supervision was possible but whether ultimate
authority over the man, in the performance of his work resided in the employer
so that he was subject to the latter’s order and directions.
[12] The same conclusion was reached in Ready
Mixed. MacKenna, J., after a thorough review of the jurisprudence, says:
Control includes the power of deciding the thing to be
done, the way in which it shall be done, the means to be employed in doing it,
the time when, and the place where it shall be done. All these aspects of
control must be considered in deciding whether the right exists in a sufficient
degree to make one party the master and the other his servant. The right need
not be unrestricted. What matters is lawful authority to command, so far as
there is scope for it.
All three cases conclude
that a master’s de jure control over the worker is a necessary condition
of a contract of service. Walker and Ready Mixed also hold that the
master must have the power to direct not only what the worker does, but how he
does it.
[13] In Market Investigations Ltd. v. Minister
of Social Security
(“Market Investigations”), Cooke, J. illustrates a weakness inherent in
the test articulated in Walker and Ready Mixed. He cites the example of
a certified master of a ship who may be employed under what is clearly a
contract of service, and yet the ship’s owners have no de facto control
over how he navigates his vessel. The Court recognizes that:
when one is dealing with a professional
man, or one with some particular skill and experience, there can be no question
of an employer telling him how to do the work; therefore the absence of control
and direction in that sense can be of little, if any, use as a test.
[14] Hôpital Notre-Dame de L’Espérance and Théoret v. Laurent et al. (“Hôpital), was a vicarious
liability case under the Civil Code of Québec involving a doctor. The Supreme
Court finds that “the essential criterion of employer-employee relations is the
right to give orders and instructions to the employee regarding the manner in
which to carry out his work”. It thereby recognizes that de jure control
is necessary, but reverts to the Walker and Ready Mixed
position that employers must have the right to tell their employees not only
what to do, but how to do it. The Court makes no reference to the distinction
drawn in Market Investigations between professional persons and those in
standard employment, even though the case before it concerned a physician.
[15] Gallant v. M.N.R.., another Civil Code case, similarly holds that de jure,
rather than de facto control is a necessary condition of a contract of
service; and like Hôpital, does not differentiate between highly skilled
and professional workers and those that are not so qualified, and are therefore
in standard employment. In fact, we are not advised of the worker’s level of
expertise. The Court says:
…the first ground is based on the mistaken idea that
there cannot be a contract of service unless the employer actually exercises close
control over the way the employee does his work. The distinguishing feature of
a contract of service is not the control actually exercised by the employer
over his employee but the power the employer has to control the way the
employee performs his duties.
[16] One month later, the Federal Court of Appeal decided
Wiebe Door. MacGuigan, J.A., per curiam, recognizes that the test
as formulated in Hôpital “…has broken down completely in relation
to highly skilled and professional workers, who possess skills far beyond the
ability of their employers to direct”. The Court quotes Lord Wright’s
conclusion in Montreal City “In the more complex conditions of
modern industry, more complicated tests have often to be applied”. It
accordingly adopts his four-in-one test of control, ownership of tools, chance
of profit, and risk of loss, in the search for the total relationship of the
parties.
[17] In Hennick v. M.N.R.,
the Court had to deal with an insubordinate piano teacher who was described as
a free spirit that had carried out her work without respect or consideration for
the structure created by the Royal Conservatory of Music. Accordingly, it was
not possible to exercise de facto control over her. The Court notes that
since the worker was a professional person, she could not be told how to
perform her function. She had, however, failed to fulfil the minimum teaching
requirement in the collective agreement between the parties, which clearly
constituted control. Desjardins, J.A. says: “Besides, what is relevant is not
so much the actual exercise of a control as the right to exercise a control”.
[18] In Silverside Computer Systems Inc. v. M.N.R.
at issue was whether a highly skilled computer technician, who was placed by
the Appellant placement agency with its client Pitney Bowes, was in insurable
employment under the Act and pensionable employment under the Plan.
This required a determination of whether he was subject to terms and conditions
that constituted a contract of service or were analogous thereto. This, in
turn, involved ascertaining if the worker was under the direction and control
of the client. The Appellant argued that the trial judge erred in not
construing the word “control” to mean the right to give orders and instructions
to the employee regarding the manner in which the work is to be carried out.
The Court of Appeal rejects this argument saying: “We are not persuaded that
any reviewable error was committed by the Tax Court Judge”.
[19] From these three cases, I conclude that for those
in standard employment, control usually requires that the employer have the
right or power to direct what the worker will do, and the manner in which, or
how it shall be done. In the case of highly skilled or professional workers,
however, the necessary control is established if the employer has the right to
tell the worker what to do, even though he cannot tell him or her how to do it.
[20] The Supreme Court of Canada next addressed the
control issue in Sagaz. This was a case in which Landow, the sole
shareholder of American Independent Marketing Inc. (“AIM”), bribed Summers, the
head of Canadian Tire Corporation’s automotive division, to purchase its
imitation sheepskin seat covers from Sagaz. If AIM was Sagaz’s
agent, Sagaz would be vicariously liable for Landow’s tortious conduct,
but not if it was an independent contractor, carrying on business on its own
account.
[21] Major, J. per curiam, reviews inter
alia the various judicial findings in Walker, Hôpital; Montreal City, Market Investigations, and Wiebe Door. After finding
that Landow and AIM had a chance of profit and a risk of loss in their dealings
with Sagaz since they worked strictly on commission, he then concludes
at paragraph 55:
Central to this inquiry is the extent of control that
Sagaz had over AIM. While Sagaz directed the prices, terms and other conditions
that AIM was to negotiate on Sagaz’s behalf, AIM was ultimately in control of
providing assistance to Sagaz in retaining the goodwill of Canadian Tire.
Again, AIM decided how much time to devote to Sagaz and how much time to devote
to its services for other supply companies. Although Sagaz controlled what was
done, AIM controlled how it was done. This indicates that Landow was not
controlled by Sagaz.
[22] This case accordingly indicates that the
four-in-one test for distinguishing an employee from an independent contractor
is equally applicable in cases of vicarious liability as it is in employment
law. Unfortunately, the Court does not articulate whether it considered Landow
a highly skilled or professional person, or one in standard employment. Its
finding that control requires that the payer dictate both what was to be done,
and how it was to be done, therefore offers little guidance. Further, the
language used by the Court imply only that de facto
control over the worker is sufficient, but does not address the legal
significance of de jure control.
[23] Wolf affords
the first contemporary opportunity to learn from the Federal Court of Appeal whether
“control” bears the same definition at common law as it does under the Civil
Code of Québec. The worker involved was a highly specialized aeronautical
engineer. Desjardins, J.A. says at paragraph 43:
…a contractor or a provider of services,
according to articles 2098 and 2099 of the Civil Code of Québec, undertakes to
carry out physical or intellectual work for another person, or to provide a
service to him, for an agreed price. The contractor or the provider of service
is free to choose the means of performing the contract and no relationship of
subordination exists between the contracting parties in respect of such
performance.
[24] She then cites the case of Curley v.
Latreille
where it was noted that the rule is identical on this point to the common law.
She concludes that the distinction between a contract of employment and a
contract for services under the Civil Code of Québec can be examined in light
of the tests developed through the years both in the civil and in the common
law.
[25] As to the difference between de facto
and de jure control, and standard vs. highly skilled employment,
Desjardins, J.A. says at paragraph 74 of Wolf:
… if the worker has complete control over the
performance of his work once it has been assigned to him, this factor might
qualify the worker as an independent contractor. On the other hand, if the
employer controls in fact the performance of the work or has the power of
controlling the way the employee performs his duties (Gallant v. Canada
(Department of National Revenue, [1986] F.C.J. No. 330 (Fed, C.A.) (QL),
the worker will be considered an employee.
[26] Having accordingly found that either de facto or de jure
control will suffice, she then recognizes that the
distinction between what duties are done and the way they are done is difficult
to apply in the case of highly skilled or expert workers, whose expertise
exceeds that of the employer. She provides as examples the pilot who is
generally an employee although no one tells him how he should fly his airplane,
and the doctor working in a clinic who may be an employee although he is master
of his professional practice.
[27] Decary, J.A., concurring in the result, joins
those judges who have held that the necessary control is de jure, saying
at paragraph 112:
…what fundamentally distinguishes a contract of
services from a contract of employment is the absence in the former of a “relationship
of subordination” between the provider of services and the client (Article 2099
C.C.Q.) and the presence in the latter of the right of the employer to “direct
and control” the employee.
[28] The worker in Wolf was a highly skilled
and specialized aeronautical engineer as aforesaid, who could not therefore be
told how to perform his function. He was also a risk-taker who chose higher
remuneration, the ability to deduct allowable expenses for income tax purposes,
and freedom of mobility, over job security, and employee-type benefits. He was
therefore found to be an independent contractor.
[29] That the Civil Code concept of a relationship
of subordination has been firmly incorporated into the common law is evidenced
by the case of City Water International Inc. v. M.N.R.,
where at paragraph 18 Malone, J.A. cites D & J Driveway, as
authority for the following proposition: “A contract of employment requires the
existence of a relationship of subordination between the employer and the
employee. The concept of control is the key determinant used to characterize
that relationship”.
[30] On the other hand, a judicial finding of a
relationship of subordination alone is not enough to establish a worker as an
employee. In Combined Insurance Co. of America v. M.N.R.,
a case under the Civil Code of Quebec, the Federal Court of Appeal reverses a
Tax Court Judge who, relying on article 2099 of the Code, found that once the
degree of control exercised by the Appellant was such that a relationship of
subordination existed between the Respondent and the Appellant, that was
determinative of the existence of a contract of service, and there was no need,
apart from the test of control, to adopt the tests established in Wiebe Door
and Sagaz.
[31] In The Royal Winnipeg Ballet, Sharlow,
J.A. at paragraph 50, confirms that: “It is generally accepted that, under the
Code, the key distinction lies with the element of subordination or control,
but in the jurisprudence, the distinction is also examined in light of the
tests now found in Wiebe Door and Sagaz”. As to control over the
dancers in the company, she reasons as follows at paragraph 66:
… It seems to me that while the degree of control exercised by the
RWB over the work of the dancers is extensive, it is no more than is needed to
stage a series of ballets over a well planned season of performances. If the RWB
were to stage a ballet using guest artists in all principal roles, the RWB's
control over the guest artists would be the same as if each role were performed
by a dancer engaged for the season. If it is accepted (as it must be), that a
guest artist may accept a role with the RWB without becoming its employee, then
the element of control must be consistent with the guest artist being an
independent contractor. Therefore, the elements of control in this case cannot
reasonably be considered to be inconsistent with the parties' understanding
that the dancers were independent contractors.
[32] These observations may be confined to these specific fact situation
before the Court, for in National Capital Outaouais Ski Team v. M.N.R., (“National
Capital”) which involved a skier by the name of Belanger, the Court
says at paragraph 14: “In addition, the notion of control in the RWB
case had a different tinge. It was ‘needed to stage a series of ballets over a
well planned season of performances’ …In other words the control aimed at orchestrating
a choreographic performance. This is not the case with Mr. Belanger.”
[33] Precision Gutters Ltd. v. M.N.R. (“Precision”) involved workers who installed eavestroughing
(gutters) and were therefore not highly skilled or professional persons. The
Federal Court of Appeal, at paragraph 15, simply describes the control test as
follows: “the degree or absence of control exercised by the employer”.
Unfortunately, the Court does not specify whether the control involved is de
facto or de jure, nor does it delve into the distinction between
what is to be done, and the manner in which it is to be done. It merely says at
paragraph 22:
The Tax Court Judge concluded on the
evidence that the control test favoured characterizing the installers as
independent contractors. The respondent does not appear to question this
finding and I see no basis for disagreeing with the conclusion of the Tax Court
Judge.
[34] From this survey of the jurisprudence we can conclude
that either de jure or de facto control over the worker is a
condition of a contract of service. As well, the examples of the captain of a
ship at sea and the airborne pilot who are beyond the control of their masters,
but who are nonetheless clearly employees, shows that there is now a definite
distinction between standard, and non‑standard highly skilled or
professional employment. In the former, the employer has the right to tell the
worker both what to do and how, or the manner in which, the work is to be done.
In the latter, it suffices if the payer has the right to dictate what shall be
done. It is also clear that the test for control is the same under the common
law as it is under the Civil Code of Québec; that the “relationship of
subordination” concept is a useful import from the civil law in discerning what
is or is not a contract of service; and that the tests developed in the context
of vicarious liability situations are equally applicable to cases involving
employment law, even though the underlying policy considerations involved are
quite different.
[35] Applying the above principles to the fact
situation before me, and adverting first to the issue of control, according to
Mr. Latiq Qureshi, Logitek’s President, there was no control or direction
either over Zubairi’s work, or the specific timings of his visits to the
corporate offices. Unlike Logitek’s employees, Zubairi could come and go as he
pleased, and his hours of work were in no way integrated into or co-ordinated
with Logitek’s operations.
[36] I am mindful that many barristers and
solicitors have retainer arrangements with clients whereby they are regularly
paid periodic amounts to handle all their clients’ legal matters in general, yet
nevertheless maintain their status as independent contractors. In this case,
however, Zubairi was provided by Logitek with an office and computer, and a
cellular phone in addition to his own dedicated telephone line. He was also
afforded the same health benefit plan as the company’s employees, at the same
cost, and his professional development courses were paid for by Logitek.
Moreover, his prominent position on the corporate website describes him as a
key component of the company’s management team, thereby holding him out as an
integrated employee. All this is indicative of a degree of co-ordination into
Logitek’s business which is consistent with a contract of service.
[37] Given his specialized expertise, the evidence
suggests that he was expected to perform his services for the company
personally. In fact, he testified that he did so. This is of some importance,
for in Ready Mixed MacKenna, J. quotes Professor Atiyah on
vicarious liability as follows: “The servant must be obliged to provide his own
work and skill. Freedom to do a job either by one’s own hands or by another’s
is inconsistent with a contract of service, though a limited or occasional
power of delegation may not be:”. In addition, there was no evidence that Zubairi
had the right to refuse to undertake whatever assignments Logitek gave him. This puts him
in a relationship of subordination with Logitek which is also characteristic of
a contract of employment.
[38] Further, while the evidence indicates that
Logitek exerted little or no de facto control over Zubairi’s comings and
goings, I am not satisfied that Logitek did not have de jure control over
them, given his $117,000 retainer and his integration into the company’s
culture. It simply chose not to exercise it. Finally, in my view, it was
sufficient to establish the requisite control that the company had the right to
tell him, as a professional person, what to do, although not the manner in
which it was to be done. I conclude that the control factor tends to indicate
that Zubairi was an employee of Logitek’s during the period under review.
[39] Ownership of tools is relevant because it relates to control. McKenna,
J., in Ready Mixed, at pages 444-445, quotes subsection 220(2) of
the American Restatement, Agency 2nd as follows:
…if the worker is using
his employer’s tools or instrumentalities, especially if they are of
substantial value, it is normally understood that he will follow the directions
of the owner in their use, and this indicates that the owner is a master. This
fact is, however, only of evidential value.
In the matter
before me, Zubairi was provided with an office, a computer containing all
Logitek’s financial information, a cellular phone and a land line as aforesaid.
He claimed that he periodically had to take the company’s books home and work
on them using his own computer and related equipment, but was vague as to the
necessity for this. The ownership of tools factor accordingly also indicates
that he was an employee.
[40] On the other hand, he did have a chance of
profit in his dealings with Logitek. His normal billing rate was $150 to $200
per hour, a figure he presumably set because it would cover his fixed and
variable business expenses, and produce a profit. The Logitek retainer of
$117,000 per annum assured him a highly profitable $280 per hour, given his 40
hour per month commitment. The chance of profit factor accordingly indicates
that Zubairi was an independent contractor.
[41] Conversely, with the company reimbursing him
for all expenditures on its behalf, Zubairi had no risk of loss in his
arrangement with Logitek. He claimed to be “responsible” if he gave the company
bad advice, but was vague about the financial ramifications of this
eventuality. When asked if he could not insure himself against such liability,
he maintained, incredibly, that he could not afford the annual premium of $850.
The risk of loss factor also leads to the conclusion that Zubairi was employed
under a contract of service with Logitek during the period under review.
[42] While the common intention of the parties that
Zubairi be an independent contractor in their working relationship is not
determinative of its legal nature as aforesaid, Desjardins, J. in The Royal
Winnipeg Ballet offers the following guidance as to its relevance at
paragraph 81:
…what the Tax Court judge should have done was to take
note of the uncontradicted evidence of the parties’ common understanding that
the dancers should be independent contractors and then consider, based on the Wiebe
Door factors, whether that intention was fulfilled.
In the matter before me it clearly was not, since three of the four Wiebe
Door guidelines indicate that Zubairi was an employee of Logitek.
[43] As stated earlier, in
order to resolve the issue before the Court, I am to consider the entire
relationship of the parties. In Precision at paragraph 14, it was held
that integration is not one of the Wiebe Door four-in-one tests, but is
a wholly separate test. Following Market Investigations and Wiebe Door,
the Federal Court of Appeal at paragraph 30, directs the trial judge to address
the question: “… is the person who has engaged himself to perform the services
performing them as a person in business for his own account”. This involves
consideration of whether Zubairi integrated his function into Logitek’s
business, or if he integrated Logitek’s needs into his business.
[44] When asked how much of
his annual income was derived from Logitek, and how much from his other clients
and his store, Zubairi claimed to have no breakdown, which seems unusual for an
accountant. His T1 General Income Tax Return for 2005 was more enlightening. It
showed total gross professional fees of $92,000 at a time when he was receiving
$95,200 from Logitek alone. He attempted to account for the shortfall by
explaining that his revenues were treated on a cash, rather than an accrual
basis, and that there could well have been work in progress at the end of the
fiscal year that made up for the difference. Be that as it may, it is obvious
that his revenues apart from those received from Logitek, form an insignificant
part of his income. It is therefore clear that Zubairi integrated his function
into Logitek’s business. From this, I conclude that Zubairi devoted his spare
time as an independent contractor in his accounting practice and retail store,
while being employed under a contract of service with Logitek.
[45] Further, even though
Zubairi had a full-time store manager (whom he also considered an independent
contractor), in 2005 his children received $20,000 from the retail store as
independent contractors performing unspecified services which contributed to a
business loss of some $36,000. At the same time his wife received a further
$20,000 from his accounting practice also as an independent contractor, for
services whose description was again, vague. I conclude that the private
practice and store were convenient vehicles designed to provide his family
members with a source of income, and to make available the resultant “loss” as
a deduction from the income taxes otherwise payable on the remuneration
garnered from Logitek.
[46] In these matters, the
burden is upon the Appellants to demolish the assumptions set out in the
Minister’s reply to their notices of appeal.
The facts assumed by the Minister must be presumed to be true until the
contrary is shown.
The only assumption successfully challenged by the Appellants was 7(k) which
alleges: “Prior to the Appellant being hired, the same duties were performed by
a full-time Chief Financial Officer”. As aforesaid, the prior chief financial
officer was hired to convert Logitek into a publicly traded company, whereas
Zubairi’s role was to supervise its reorganization upon its insolvency. The
remaining facts which were not demolished are sufficient in law to support the
Minister’s determinations.
[47] The function of a Tax
Court of Canada judge hearing an appeal from the Minister’s decision is to
verify the existence and accuracy of the alleged facts and the assessment of
them by the Minister or his officials, and after doing so, to decide in light
of that whether the Minister’s decision still seems to be objectively
reasonable.
In exercising this function the judge must accord the Minister a certain
measure of deference, as to the initial assessment, and cannot simply
substitute his own opinion for that of the Minister unless there are new facts
or evidence that the known facts were misunderstood or wrongly assessed.
[48] I note that these directions
were originally articulated by the Federal Court of Appeal in Légaré and
Pérusse which were both cases in which the Minister was called upon to
exercise his discretion under paragraph 5(3)(b) of the Act. Livreur
Plus establishes that these instructions are equally applicable to all
judicial distinctions between independent contractors and those who are in insurable
employment under the Act, and pensionable employment under the Plan.
Again, while both Légaré and Pérusse were heard under the Civil
Code of Québec, Valente v M.N.R.
directs that the rules formulated therein be equally applied to cases heard
under the common law.
[49] In the result, the Appellants
have failed to discharge the onus of demolishing the assumptions set out in the
Minister’s replies to their notices of appeal; there is no evidence that there
are new facts or that the known facts were misunderstood or wrongly assessed by
the Minister whose determinations I therefore find to be objectively reasonable.
[50] Both appeals are
dismissed and the decisions of the Minister are confirmed.
Signed at Toronto, Ontario, this 11th
day of July 2008.
Weisman
D.J.
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