Citation: 2008TCC118
Date: 20080222
Docket: 2006-321(EI)
2006-322(CPP)
BETWEEN:
KEVIN MERCIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
DALE JEWETT o/a WHITE LINE FEVER BAND,
Intervenor.
REASONS FOR JUDGMENT
Bowie
J.
[1] These appeals concern the nature of the working
relationship between the appellant and the intervenor. During the period
between January 1 and February 24, 2005, the appellant played guitar in
the White Line Fever Band (the Band). The intervenor, Dale Jewett, is the
leader of the Band and the vocalist. The appellant had played with the Band for
some 18 years, but it was with respect to that specific eight-week period that
the Canada Customs and Revenue Agency ruled under subsections 90(3) of the Employment
Insurance Act (the Act) and 26.1(3) of the Canada Pension Plan (the
Plan) that Mr. Mercier was engaged in insurable and pensionable
employment by Dale Jewett. Mr. Jewett appealed that decision to the
Minister under section 91 of the Act and section 27 of the Plan.
The Minister allowed his appeals and ruled that Mr. Mercier was engaged under a
contract for services, and so his employment was neither insurable nor
pensionable. I heard Mr. Mercier’s appeal from that ruling at Thunder Bay.
Mr. Mercier and Mr. Jewett both gave evidence. Mr. Mercier also called
Charles Arnaud to give evidence.
[2] I put little weight
on Mr. Arnaud’s evidence. He testified that he recommended the appellant to Mr.
Jewett, and that at the time their association began he was present and heard
Mr. Jewett say to Mr. Mercier that if he played for the Band he could not play
for anyone else. The balance of his evidence was largely irrelevant to the
issues that I have to decide. It was clear, however, that Mr. Arnaud was
determined to assist the appellant in his case, and would give any evidence
that he thought would be helpful to that end. I do not find that his evidence
sheds much light on the nature of the business relationship.
[3] It appears from the
appellant’s evidence that a difference of opinion as to the nature of the
relationship between him and Mr. Jewett arose early on. Among the exhibits at
trial is a document that appears to be signed by both the appellant and the
intervenor on June 1, 1990. It simply states that any person playing in the
Dale Jewett Band is self employed, and that Mr. Jewett has no responsibility to
pay benefits such as “Canada Pension, UIC, Income Tax, Compensation or any
other benefits”. Mr. Mercier testified that this document was a forgery; Mr.
Jewett maintains that it is genuine. Given that it is dated almost 15 years
prior to the relevant time period, I am not inclined to give it any weight,
genuine or not. A number of receipts were entered in evidence with various
notations on them. Some are dated closer to the relevant time period than
others. All are suspect in that the notations, to the extent that they could be
interpreted to bear on the nature of the relationship, tend to have been put
there by one party or the other for their own purposes. In my view, this is a
case that should be decided on the basis of the oral evidence given by Mr.
Mercier and Mr. Jewett at the hearing.
[4] The Band consists of
four members. It plays country and country-rock music, generally on short term
engagements throughout Canada. Mr. Jewett is the leader of the Band, and the
vocalist. Mr. Mercier is one of three sidemen who accompany him. Occasionally,
a sideman will leave and be replaced by someone else. Mr. Mercier left the Band
at one time and returned to it later. There is no written contract among any of
the members of the Band, other than the document from 1990 that I have referred
to, which could hardly be described as a contract at all.
[5] Some facts are
reasonably clear. Mr. Jewett is the leader of the Band in every sense. He
arranges the Band’s engagements, through an entertainment agency. He agrees for
the Band on the amount that they will be paid for each engagement. To the
extent that there is any negotiation to be done with the hotels, clubs and
other venues where they play, he is the one who does that negotiation. A flat
rate for the whole Band is agreed on for the whole period of the engagement.
[6] Mr. Jewett lives in
Kakabeka Falls, near Thunder
Bay, Ontario. Mr. Mercier lives in
a house there that he rents from Mr. Jewett. The other Band members presumably
live nearby. Transportation to the venues of their engagements is for them to
arrange, and the invariable method of travel is in a van owned by Mr. Jewett. A
trailer carries their instruments and equipment. Mr. Mercier, as is common
in the music business, owns and maintains his instruments. Mr. Jewett owns the
amplifying equipment that they use.
[7] Usually the Band
plays in hotels, and the hotel supplies two guest rooms for the duration of the
engagement, which the four Band members share. Sometimes they have to pay for a
room while traveling, before their engagement begins. In that case there seem
to be no fixed rules; sometimes Mr. Jewett pays for a room for them all, and
sometimes they simply sleep in the van. Generally, they all pay for their own
meals while they are away from home, but Mr. Jewett sometimes buys meals for
the others, and Mr. Mercier has on occasion bought a meal for Mr. Jewett.
[8] As with most aspects
of the relationship, the evidence as to remuneration is vague. Exhibits A-2 and
A-3 are bundles of receipts identified by Mr. Mercier, but they all relate to
periods years before that to which the ruling applies, and so are of little
help. For each engagement, the client pays the agreed fee to Mr. Jewett,
generally by one cheque. He usually paid Mr. Mercier $300.00 per week, or a
proportionate amount for engagements of more or less than one week. As Mr. Jewett
explained it, typically he would have $800.00 for himself, out of which he paid
the traveling expenses, and possibly some other expenses as well, and there
would be remaining $1,000.00 for the other three members. Usually one of them
got $400.00 and the other two each got $300.00. As Mr. Jewett put it, he would
leave the other three to settle the distribution of it among themselves. As
there was a limited amount of money, if they could not agree on the
distribution then there would be no Band, and no income for any of them.
[9] Such records as there
are suggest that Mr. Mercier was always paid a round number as his share of the
proceeds. If the engagement was a lucrative one then he would be paid somewhat
more than usual, and the amount also varied depending on the length of the
engagement. He never received either vacation pay or a paid vacation, nor any
other employment benefits. No deductions were ever taken from his share for
income tax, employment insurance, or Canada Pension Plan, and he never received
a T4 form for his earnings, although he had received one while playing with a
different band in the time between leaving Mr. Jewett’s Band and returning to
it.
[10] Under the contract
with the hotel or other venue where they played, the hotel specified the type
of music that the Band was to play, the hours, and the length of sets and
breaks. Within these parameters, Mr. Jewett would select specific songs. The
Band practiced (and this included working on additions to their repertoire) on
their own time, usually between engagements, at the trailer Mr. Jewett lives in
at Kakabeka Falls. Between
engagements there was no money coming in, and none of the Band members received
any income at all.
[11] The principle to be
applied in deciding whether the contract between the parties is a contract of
service, thus giving rise to insurable and pensionable employment, has recently
been restated by the Supreme Court of Canada in the Sagaz case. At paragraphs 46 to
48, it is put this way by Major J. for a unanimous Court:
46 In my opinion, there is no one conclusive test which can be
universally applied to determine whether a person is an employee or an
independent contractor. Lord Denning stated in Stevenson Jordan, supra,
that it may be impossible to give a precise definition of the distinction (p.
111) and, similarly, Fleming observed that “no single test seems to yield an
invariably clear and acceptable answer to the many variables of ever changing
employment relations . . .” (p. 416). Further, I agree with MacGuigan
J.A. in Wiebe Door, at p. 563, citing Atiyah, supra, at p.
38, that what must always occur is a search for the total relationship of the
parties:
[I]t is exceedingly doubtful whether the search for a formula in the
nature of a single test for identifying a contract of service any longer serves
a useful purpose.... The most that can profitably be done is to examine
all the possible factors which have been referred to in these cases as bearing
on the nature of the relationship between the parties concerned. Clearly
not all of these factors will be relevant in all cases, or have the same weight
in all cases. Equally clearly no magic formula can be propounded for
determining which factors should, in any given case, be treated as the
determining ones.
47 Although there is no universal test to determine whether a
person is an employee or an independent contractor, I agree with MacGuigan J.A.
that a persuasive approach to the issue is that taken by Cooke J. in Market
Investigations, supra. The central question is whether the
person who has been engaged to perform the services is performing them as a
person in business on his own account. In making this determination, the
level of control the employer has over the worker’s activities will always be a
factor. However, other factors to consider include whether the worker
provides his or her own equipment, whether the worker hires his or her own
helpers, the degree of financial risk taken by the worker, the degree of
responsibility for investment and management held by the worker, and the
worker’s opportunity for profit in the performance of his or her tasks.
48 It bears repeating that the above factors constitute a
non-exhaustive list, and there is no set formula as to their application.
The relative weight of each will depend on the particular facts and
circumstances of the case.
[12] The facts of this
case do not point to a relationship of master and servant, although
superficially one might think that. I was impressed by Mr. Jewett’s evidence as
to the degree to which decisions affecting the Band and its members were made
consensually, and I conclude that the Band is run far more as a joint
enterprise of its four members than as an entity controlled by Mr. Jewett. He
said that when a new musician joined the Band it was with the concurrence of
all. Similarly, there was a certain amount of money to be distributed, and all
agreed as to that distribution. The members all practiced their repertoire
together on their own time. They were all, including Mr. Jewett, subject to the
control of the clients as to the nature and timing of their performances. Mr.
Jewett was no doubt the leader, but there is a distinction between a leader and
a controller. He entered into the contracts and looked after such business
matters as there were to be attended to, but he did it for the common benefit
of the Band members.
[13] Mr. Jewett owned the
vehicle and the amplifying equipment used by the Band. The other members of the
Band owned their instruments. There was nothing in the evidence about the
relative values of these, but certainly all members of the Band had some
capital invested in the enterprise. I do not think that this is a factor that
points unequivocally in either direction.
[14] Similarly, the
opportunity for profit and the risk of loss are not, I think, significant
factors in this case. The evidence left me with the impression that the Band
operates at not much more than a subsistence level. There was no evidence as to
the number of weeks in a year that the Band could expect to work, or of the
amount of the expenses that Mr. Jewett had to cover from his $800.00 per week.
No doubt he was the one who stood to lose if the money was insufficient to meet
expenses, and he might profit from a job where the travel expenses were less
than usual. However, the evidence does support the view that there were ad
hoc adjustments to the amounts paid to the sidemen, particularly if they
got a more than their usual fee. This factor does not weigh greatly in either
direction.
[15] In the context of
this case, Cooke J.’s question becomes this: is this Mr. Jewett’s
enterprise in which the sidemen are employed as servants, or is it the
enterprise of all the members of the Band in which they stand to share success
or failure? In my view, it is the latter. Mr. Jewett did not argue that the Band
was a partnership, but I find that the evidence describes something more in the
nature of a joint enterprise of all the members of the Band than a
proprietorship owned and operated by Mr. Jewett.
It is not necessary for me to make a specific finding as to the nature
of the Band as a business entity, however. The question I have to decide is
much narrower than that – it is simply whether there was a contract of service
between Mr. Mercier and Mr. Jewett during the period in question. For the
foregoing reasons, I find that there was not. These appeals will therefore be
dismissed.
Signed at Ottawa, Canada, this 22nd day of February,
2008.
“E.A. Bowie”
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