Date:
20010827
Dockets:
2001-775-CPP,
2001-784-EI
BETWEEN:
NANCY
GRANT,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent,
AND
2001-776(EI)
2001-777(CPP)
RALF
REGIER,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent,
AND
2001-779(CPP)
2001-780(EI)
JAMES
DONALD,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent,
AND
2001-786(EI)
2001-787(CPP)
651366
ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Reasons
for Judgment
MacLatchy, D.J.T.C.C.
[1]
These appeals were heard on July 11, 2001 in St. Catharines,
Ontario on common evidence on consent of all the
parties.
[2]
The Appellants appealed a ruling of the Minister of National
Revenue (the "Minister") for the determination of the
question whether or not Nancy Grant (Nancy), Ralf Regier (Ralf)
and James Donald (James) (the Workers) were employed in insurable
and pensionable employment, while engaged by the Appellant 651366
Ontario Inc., o/a CBN (the Company) for the period from January
1, 1999 to June 22, 2000, within the meaning of the Employment
Insurance Act (the "Act") and the Canada
Pension Plan (the "Plan").
[3]
By letter dated November 30, 2000, the Minister informed the
Appellants that it had been determined that Nancy, Ralf and
James' engagement with the Company during the period in
question was insurable and pensionable employment for the reason
that they were employed by the Company under a contract of
service within the meaning of paragraph 5(1)(a) of the
Act and paragraph 6(1)(a) of the
Plan.
[4]
The basic facts on each appeal were agreed by the parties to be
as recited in paragraph 6 of each Reply to the Notice of Appeal
indicating the facts relied on by the Minister.
[5]
The Company is a general contractor doing commercial renovations
under contracts it had negotiated with its clients. The only
employees of the Company are Richard Cassidy, the President and
sole shareholder and his spouse, Theresa Cassidy. All of the
three Workers named were considered by the Company as independent
contractors.
[6]
In making his decision, the Minister relied on the following
facts in file number 2001-784(EI):
(a)
the Payor is a general contractor who does commercial
renovations;
(b)
Richard Cassidy is the sole shareholder of the Payor;
(c)
the Appellant is Richard Cassidy's sister-in-law;
(d)
the Payor only employs Richard Cassidy and his spouse
Theresa Cassidy, and all other workers are considered
self-employed;
(e)
the Appellant was hired by the Payor to do typing, filing,
bookkeeping and receptionist work;
(f)
the Appellant performed her duties on the Payor's
premises;
(g)
work assignments were assigned to the Appellant by the
Payor;
(h)
the Appellant performed the services personally for the
Payor;
(i)
although the Appellant's hours were somewhat flexible, she
normally worked daily from 9:00 a.m. to 4:00 p.m., which were the
Payor's regular office hours;
(j)
the Appellant was paid by the Payor at the rate of $12.50 per
hour;
(k)
the working premises, the furnishings, the equipment, the
materials and the supplies were provided by the Payor;
(l)
the Appellant did not incur any expenses in the performance of
her duties apart from providing her transportation to and from
the Payor's business premises.
[7]
Ralf performed as a job estimator and designer who submitted his
written estimate of the cost of certain construction renovations
as estimated from a plan submitted to him by the Company. The
Company would incorporate this estimate in a final contract to be
entered with by the Company and its client. Ralf had a long
association with the Company and was highly respected. Ralf
submitted an invoice to the Company for the hours involved in the
preparation of his estimate and charged Goods and Services Tax
(GST). If the project required Ralf to travel or spend time out
of town, the Company would reimburse him for those costs. This
appeared to be usual in the industry. An hourly rate had been
negotiated between Ralf and the Company. Ralf worked the hours
necessary to prepare his estimates having regard to the
expectations of the Company and its client. Ralf had the
expertise and experience needed by the Company and operated out
of both his own home and the office of the Company. Ralf worked
very little for others as the Company provided him with all the
work he could handle but both the Company and Ralf agreed that he
could work for others so long as it was not with clients of the
company without its permission.
[8]
The Company and Ralf agreed that they would work together for as
long as each wished.
[9]
Nancy is Richard Cassidy's sister-in-law, but it was
determined by the Minister that their relationship was at
arm's length. Nancy had extremely flexible hours and came and
went as her needs allowed. When Nancy attended at the office of
the Company she was experienced enough to know what matters
needed her attention; whether it be typing contracts, answering
the telephones, filing, bookkeeping or general office routines.
An hourly rate of remuneration was negotiated between Nancy and
the Company. Nancy would keep track of her hours expended on
Company business and bill the Company by invoice from time to
time. There were no set hours for her engagement by the Company.
She does not charge GST as her income is not sufficient to
warrant the need for a GST registration.
[10] James is a
glazier by trade but performs in a supervisory capacity for the
Company attending on job sites to ensure the construction
complies with the contract as entered into between the Company
and its clients. An hourly remuneration rate was negotiated
between the Company and himself. James would invoice the Company
for the hours expended on Company business as determined by the
particular construction project and the needs of the client.
James has been associated with the Company for many years and is
an experienced workman who requires no supervision or instruction
of any kind. When he invoices the Company for hours expended on
its business he charges and remits GST as required.
[11] The
question before this Court is whether the employment arrangement
between the Workers and the Company was pursuant to a contract of
service or a contract for services. If it was pursuant to a
contract of service then the Workers' employment was both
insurable and pensionable as they would be considered employees
of the Company. If it was pursuant to a contract for services
then the Workers would be considered to be subcontractors of the
Company and their work would not be subject to the requirements
of either the Act or the Plan.
[12] Guidance
to determine what the relationship was between the Workers and
the Company has been clearly given by the Federal Court of Appeal
in the Wiebe Door Services Ltd. v. M.N.R. decision, 87 DTC
5025. That Court endorsed the tests recommended by Lord Wright in
Montreal v. Montreal Locomotive Works Ltd. et al., [1947]
1 D.L.R. 161, of (1) control, (2) ownership of tools, (3) chance
of profit and risk of loss and (4) integration of the work
performed into the business of the Appellant. It is considered
not as single tests to add up, to arrive at the decision for or
against the type of relationship existing, but as a
four-in-one test to examine the whole of the various
elements, which constitute the relationship between the parties.
It is what Lord Wright calls, "the combined force of the
whole scheme of operations", which must be ultimately
considered to determine that relationship.
[13] In these
circumstances, the evidence given will be examined under the
various tests recommended.
Control
[14] Did the
Company exert the type of control over the Workers that would
indicate an employee/employer relationship? The evidence of the
principal owner of the Company was that he, at no time,
controlled the work of the Workers. They operated on their own
initiative, kept track of their own hours of work and worked when
they chose, subject to the requirements of any particular
project. None of the Workers were supervised as each had
experience enabling them to perform their particular function.
There was no reporting requirement but contact was made only as
dictated by the particular project to note progress and to ensure
that the work completed met the standards as set out in each
particular contract. It was a "standard" in the
business that should any of the workers be required to perform
their function away from the area where the Company is located,
then they are reimbursed for travel and accommodation expended on
such business. Each Worker gave evidence that they could have
worked for others at the same time so long as it did not harm the
relationship existing between the Workers and the
Company.
[15] On the
evidence adduced, there appeared to be little, if any, control
that would support an employer/employee relationship.
Ownership of tools
[16] In most
circumstances, the few tools used by the Workers belonged to the
Company. This is especially true for the work performed by Nancy.
Her work was performed in the offices of the Company using its
tools such as computer, ledgers, etc. Both Ralf and James used
their own tools to perform their function on the job unless the
work required a particular piece of equipment they did not
usually need to perform their job. If the Company had such
equipment then it would be used; otherwise, it would be rented by
the Company for the particular job. Ralf had a particular type of
calculating machine that he owned and used to perform his
function.
[17] Very
little evidence was adduced that would indicate that the
ownership of tools supported an employment
relationship.
Chance
of profit and risk of loss
[18] The
overall profit for the Company was derived from how well it
performed under its contract. In a like fashion, it could lose
income if it badly estimated when it entered into each contract.
It did not affect the Workers. They were limited to their hourly
income and would increase their income only by expending more
time at their work. If they made an error in their performance of
their work they would repair the damage or error at their own
expense.
[19] This test
is inconclusive but leans toward a relationship of
employer/employee.
Integration
[20] This is a
difficult heading, in modern society, to determine whether the
workers' contribution is an integral part of the
Company's business. Neither one exists without the other. The
Company requires workers with certain skills for its operation.
The Workers have these skills and contract with the Company to
use those skills to further the ends of the Company. Whose
business is it? The Company has a contract to be completed, which
it cannot perform without the help of the workers, yet these
workers are not able to work without having some project
presented to them on which they can perform their skills. This
test is inconclusive in these circumstances.
[21] The Court
is required to apply the above tests to the circumstances in each
instance in an attempt to determine the type of relationship that
existed between the Company and the Workers, but this is not an
absolute test. The Courts have ruled that not only should these
tests be used but also the whole scheme of the relationship must
be examined as evidenced by the facts presented. It is also
settled law that the parties cannot, by agreement, decide the
character of their relationship. They may choose to call it an
independent relationship but it is only by an examination of the
surrounding circumstances in light of the tests in
Wiebe Door that the true nature of their relationship
can be determined. The fact that the parties believed and
operated as independent of each other is just one more factor for
this Court to take into consideration when reaching its
conclusion. The legislation involved does not enable the parties
to opt out of its provisions by their own decisions.
[22] This Court
has reached the conclusion that on examination of the whole of
the relationship existing between the Company and the Workers,
their relationship was one of contractual independence and not
one of master and his servant. The Workers were subcontractors of
the Company and their work was neither insurable nor
pensionable.
[23] The
appeals are allowed and the decisions of the Minister are varied
accordingly.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.COURT
FILE
NO.:
2001-775(CPP)
STYLE OF
CAUSE:
Nancy Grant and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-776(EI)
STYLE OF
CAUSE:
Ralf Regier and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-777(CPP)
STYLE OF
CAUSE:
Ralf Regier and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-779(CPP)
STYLE OF
CAUSE:
James Donald and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-780(EI)
STYLE OF
CAUSE:
James Donald and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-784(EI)
STYLE OF
CAUSE:
Nancy Grant and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-786(EI)
STYLE OF
CAUSE:
651366 Ontario Inc. o/a CBN and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
2001-787(CPP)
STYLE OF
CAUSE:
651366 Ontario Inc. o/a CBN and M.N.R.
PLACE OF
HEARING:
St. Catharines, Ontario
DATE OF
HEARING:
July 11, 2001
REASONS FOR
JUDGMENT BY: The Honourable Deputy
Judge
W.E.
MacLatchy
DATE OF
JUDGMENT:
August 27, 2001
APPEARANCES:
For the
Appellant:
Eugene W. Trasewick (Agent)
Counsel for
the
Respondent:
Pierre-Paul Trottier
COUNSEL OF
RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-775(CPP)
BETWEEN:
NANCY
GRANT,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-779(CPP) and 2001-780(EI)), Nancy Grant
(2001-784(EI)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-776(EI)
BETWEEN:
RALF
REGIER,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
2001-777(CPP)), James Donald (2001-779(CPP) and
2001-780(EI)), Nancy Grant (2001-775(CPP) and
2001-784(EI)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-777(CPP)
BETWEEN:
RALF
REGIER,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI)), James Donald (2001-779(CPP) and
2001-780(EI)), Nancy Grant (2001-775(CPP) and
2001-784(EI)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-779(CPP)
BETWEEN:
JAMES
DONALD,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-780(EI)), Nancy Grant (2001-775(CPP) and
2001-784(EI)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-780(EI)
BETWEEN:
JAMES
DONALD,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-779(CPP)), Nancy Grant (2001-775(CPP) and
2001-784(EI)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-784(EI)
BETWEEN:
NANCY
GRANT,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-779(CPP) and 2001-780(EI)), Nancy Grant
(2001-775(CPP)), 651366 Ontario Inc. o/a CBN
(2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St.
Catharines, Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-786(EI)
BETWEEN:
651366
ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-779(CPP) and 2001-780(EI)), Nancy Grant
(2001-784(EI) and 2001-775(CPP)), 651366 Ontario Inc. o/a
CBN (2001-787(CPP)), on July 11, 2001 at St. Catharines,
Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
2001-787(CPP)
BETWEEN:
651366
ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER
OF NATIONAL REVENUE,
Respondent.
Appeal heard
on common evidence with the appeals of Ralf Regier
(2001-776(EI) and 2001-777(CPP)), James Donald
(2001-779(CPP) and 2001-780(EI)), Nancy Grant
(2001-784(EI) and 2001-775(CPP)), 651366 Ontario Inc. o/a
CBN (2001-786(EI)), on July 11, 2001 at St. Catharines,
Ontario, by
the
Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for
the
Appellant:
Eugene W. Trasewick
Counsel for
the
Respondent:
Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied
in accordance with the attached Reasons for Judgment.
Signed at
Toronto, Ontario, this 27th day of August 2001.
D.J.T.C.C.
Email this Content