Date: 20010219
Docket: 2000-2975-EI
BETWEEN:
KELLY WHIFFIN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
A & P DELIVERY, A DIVISION OF MITLIN ENTERPRISES LTD.,
Intervenor.
Reasons for Judgment
Rowe, D.J.T.C.C.
[1]
The appellant appealed from a decision of the Minister of
National Revenue (the "Minister") dated June 5, 2000
wherein the Minister decided the working relationship between the
appellant and the intervenor, A & P Delivery, a Division of
Mitlin Enterprises Ltd. (Mitlin) operating as A & P Delivery
(APD) from August 2, 1998 to August 3, 1999 did not constitute
insurable employment within the meaning of the Employment
Insurance Act (the "Act") because there was
no employer-employee relationship pursuant to a contract of
service.
[2]
Kelly Whiffin testified he resides in Abbotsford, British
Columbia and, prior to entering into a working relationship with
APD, had been a warehouseman, a shipper and receiver and had
driven a delivery truck but always on the basis of being an
employee. On December 7, 1997, he answered an advertisement
placed by Rick Clark of Rick Clark Trucking. Clark owned two
trucks used to make deliveries for APD but had decided to work
full time in the APD dispatch office and needed a driver for one
of the trucks. On January 5, 1998 Whiffin began driving
Clark's truck pursuant to an agreement whereby Whiffin would
receive 75% of the amount Clark received from APD which - in turn
- was an amount equal to 75% of the gross receipts collected by
APD as represented by the waybills pertaining to the completed
deliveries. Clark was functioning as the APD dispatcher and would
assign the deliveries to the various trucks. Whiffin was handling
between 5 and 10 deliveries per day, consisting of general
merchandise hauled on a one-ton flatbed or on a larger 5-ton
unit. The deliveries were either collect or pre-paid and
APD calculated the cost of the delivery. While working for Clark,
Whiffin stated he had to be at the APD office at 7:30 a.m. and
was required to contact the dispatcher to see whether there was a
pick-up which he could accommodate on the way to the APD premises
in New Westminster. Then, he would wait in his truck - in the
general area of operations - until called by the dispatcher to
carry out a delivery. On March 1, 1998 the arrangement with Clark
came to an end. Whiffin stated he had earned only $900.00 since
January 5, 1998 and Peter Vandenbroek - whom he regarded as being
the effective owner of APD - paid him the sum of $300.00 - on two
occasions - to assist him because his relationship with Clark was
not producing sufficient revenue. Clark left his position as
dispatcher for APD and also took his two trucks with him. Whiffin
stated he was approached by Peter Vandenbroek who wanted him to
continue working as a driver at APD. Vandenbroek told him there
was a former APD driver - Santokh (Sam) Sian -
who had a truck for sale and they went to inspect the unit at a
Husky Station on Marine Drive at some point during the last week
of February, 1998. At that time, Whiffin stated there was no
discussion with Sian other than concerning the state of repair
and other details relating to the truck. Whiffin said he was told
by Vandenbroek that Sian would not accept any amount less than
$10,000.00 for the truck and it could be purchased on the basis
Whiffin would make 20 payments of $500.00 per month. Whiffin
stated he had no part in the subsequent arrangement whereby the
truck was purchased from Sian pursuant to a written contract -
Exhibit A-1 - dated March 2, 1998. Whiffin - as far as he can
recollect - signed a document of some sort upon which there was
only his signature and that of Peter Vandenbroek and did not
include the name or signature of Santokh Sian. As for the
agreement - Exhibit A-1 - Whiffin noted his name is misspelled -
as Whiffen - and the wrong model number was used for the
particular Ford truck purchased from Sian. In Whiffin's
recollection, the document he signed required him to make 20
payments - each in the sum of $500.00 to APD - since it later
registered the truck at the Motor Vehicle Branch. Whiffin stated
he had no further dealings with Sian. APD insured the vehicle and
informed him the amount of the premium which would be deducted
from his earnings in the same manner as the monthly sum of
$500.00 pertaining to the truck purchase. Whiffin was required to
pay the costs of fuel and maintenance for the truck. He was
charged for the two-way radio owned by APD - plus an
air-time fee - and the amount owing was deducted from his
earnings which were based on 75% of gross revenue generated from
the deliveries according to the calculation of the delivery
charge - by APD - as stated on the waybill. In the course of
discussions concerning the working arrangement with APD, Whiffin
stated Peter Vandenbroek had indicated the truck should produce
between $1,500.00-$2,000.00 revenue every two weeks and had
worked out some numbers on a piece of paper. On March 3, 1998,
the 1989 Ford truck was registered - Exhibit A-2 - and insured in
the name of Mitlin Enterprises Ltd. The appellant was present in
the insurance agent's office at the time and he was listed as
the principal operator of the truck. Whiffin stated he carried on
in the same manner as when he had been driving one of the trucks
owned by Rick Clark. Whiffin took the vehicle home each night and
stated he understood the truck was not to be used for any purpose
other than to make the deliveries as dispatched by APD. He had to
be in his vehicle between 7:00 a.m. and 7:30 a.m. and reported to
a location on Annacis Island or to any other location as
instructed by the dispatcher. At the end of the working day -
usually between 2:00 p.m. and 4:00 p.m. - the dispatcher would
advise there were no further deliveries to be made and Whiffin
would head home. There were between 10 and 12 other drivers
working at APD and Whiffin stated he knew of two others who were
working under the same conditions as those existing between
himself and APD. His understanding was that he was not free to
refuse a delivery but did so on one occasion a few weeks before
he ceased working at APD because he was on his way home when the
dispatcher called. Earlier, he had complained to the dispatcher
about twice a week about having to accept some of the assigned
deliveries. He stated he received the response, "Why
don't you just do it or give the truck back?", and his
final refusal to make a delivery led to the dispatcher swearing
at him. During the time he worked at APD, Whiffin did not take
any holidays or vacation time but was away from work a total of 7
days due to illness. His understanding of the arrangement with
APD was that he was not allowed to work for any other companies
during the weekend. He was informed by Vandenbroek that there was
no one working dispatch for APD during the weekends.
Whiffin's earnings from making deliveries assigned by the APD
dispatcher amounted to between $700.00 and $850.00 every two
weeks after all expenses had been deducted - including the truck
payment in the sum of $500.00 - and he had never requested any
additional work other than that assigned between Monday and
Friday. In order to take a day off, the dispatcher had to be
notified and the absence was marked down on a calendar in the
office but he had never been refused permission to miss work for
a day. On a slow day, he would sit and wait - with three or four
other drivers - for a dispatch and he never discussed with anyone
the possibility of using the truck for any purpose other than
making deliveries for APD. He had understood from Peter
Vandenbroek that once all the payments had been made on the truck
it would be transferred into his name, at which point he was free
to take it anywhere. While he operated the truck at APD, it
carried signage on the doors - measuring 16 inches by 6 inches -
stating: A & P Delivery, a Division of Mitlin
Enterprises Ltd. It was not mandatory to wear a uniform when
making deliveries but they could be purchased from the APD
office. Turning to the Reply to Notice of Appeal and the
assumptions set forth in paragraph 6 thereof, Whiffin stated he
was aware of two other individuals who had entered into a similar
arrangement as the one he had with APD whereby the company owned
the trucks and the workers were only drivers. While the division
of gross revenue flowing from the deliveries was 75%-25% in his
favour at the outset, Whiffin stated it was reduced to 70%-30% in
May, 1999 and there had been no notification to him or any
discussion with the drivers concerning that event and he noticed
it only when he received a statement setting forth his revenue
and expenses. He did not agree the purchase of the truck had
merely been arranged by APD - as set forth in paragraph 6(e) - in
that he considered he had purchased the truck directly from APD.
The customers were all obtained by APD and he disagreed with the
statement - set out at paragraph 6(f) - that he had the right to
refuse deliveries as a matter of course. He agreed APD collected
all the money from the customers, retained 25% - later 30% - of
the gross amount and paid the balance to him, less any charges
such as insurance, Workers' Compensation Board (WCB)
contributions, loan payments of $500.00 per month to Sian and
certain other expenses related to the operation of the truck
within the APD business system. Whiffin's understanding was
that he had to drive the truck personally, except during a
holiday and only if that substitution had been arranged in
advance with APD. He denied the assumption - at paragraph 6(p) -
was correct in stating APD did not have a preferred call on his
services and that he was free to perform services for other
companies at the same time. He also believed he was under the
control of APD and had no ability to increase his profit. In his
view, APD required the vehicles to make the necessary deliveries
and the one-ton flatdeck operated by him was suitable for hauling
crates, pipes, and general freight, and there were
four other units capable of carrying the same type of load.
Whiffin referred to photocopies of cheques - Exhibit A-3 -
received from APD and stated he had not received any accounting
of funds until May, 1999 and had always assumed the amount of
each cheque paid to him had accurately represented the sum owing
to him. In July, 1999, Peter Vandenbroek mentioned to him that
the truck payments - to Sian - had fallen into arrears by a
"couple of months" and this had come as a surprise
because amounts representing the $500.00 payments had been
deducted from his earnings. Whiffin explained he went to visit
Sian on August 2, 1999 to inquire into the situation and was told
that APD was four months in arrears on the truck payments and no
money had been received on that account since May, 1999. On
August 3, 1999, Whiffin had a bronchial infection and called in
sick. That night, at about 6:30 p.m., Angela Vandenbroek - wife
of Peter Vandenbroek - telephoned him at home and told him the
relationship was not working out and APD wanted their truck back.
Whiffin stated he asked her, "Am I fired?" and received
the response, "Yes". Whiffin requested he be allowed to
speak to Peter and was told by Angela that Peter was "too
irate to speak to you now" because of the fact Whiffin had
"gone behind his back" in speaking to Sian about the
truck payment problem. On August 4, 1999, the appellant stated he
requested his Record of Employment from Angela Vandenbroek but
she informed him she did not know anything about such a document.
At the same time, Whiffin said he discussed with Angela the
matter of some holdback pay he had coming to him and was informed
that money would be paid to him once the truck had been returned.
On August 6, 1999, he returned the truck to Vandenbroek's
house and received his final cheque in the sum of $2,148.61
together with a statement of accounting - Exhibit A-4. Then, he
went to the Employment Standards Branch (ESB) and filed a claim
against APD seeking holiday pay and compensation for all the
payments he had made on the truck and also for the costs of fuel,
repairs and maintenance as well as an amount for severance pay.
He also applied for employment insurance benefits which were
denied. Following his complaint to the ESB, an official at ESB
forwarded him a document, described thereon as a Transfer/Tax
Form - Exhibit A-5 - which had been used to
transfer the Ford truck from the registered owner - Mitlin
Enterprises Ltd. - to the purchaser, Peter John for the sum of
$2,500.00. Whiffin had calculated that during the time he drove
the truck at APD, he made payments in the sum of $6,800.00 by way
of deduction from his earnings. He stated - again - that he never
felt as though he had any freedom regarding the vehicle as he
considered he had always been told by APD management or
dispatchers where to go, what to do and - finally - had been
instructed by Angela Vandenbroek to return the truck.
[3]
In cross-examination, Kelly Whiffin agreed Rick Clark had been an
owner/operator while his trucks were working for APD and that
when he drove one of Clark's trucks it was in the capacity of
employee. He explained the dispatcher assigned deliveries to the
vehicle most suited to the job. On occasion, some customers
requested a specific driver and over the course of several
deliveries a rapport could be developed. His usual method of
operation was to wait in his truck near the point of his last
delivery which could be anywhere in the Lower Mainland. Then,
another dispatch would be received and he would proceed to
complete the next delivery. The waybills were turned in to the
APD office every second day and prior to doing that he would
examine the weights recorded on the slips. There was a standard
minimum fee of $37.50 for a delivery but APD set rates for
deliveries after considering the weight and size of the item as
well as the distance travelled in the course of delivery. He
stated he was often requested to make a delivery for the minimum
charge and he always believed he could not refuse such an
assignment. As for APD uniforms, he purchased three - two for him
and one for his wife - and they were paid for by way of deduction
from his gross revenue. Peter Vandenbroek provided the
self-adhering signs which were affixed to the truck. As far as
Whiffin was aware, two other drivers - Brian Kufler and Neil
Morgan - had similar working arrangements with APD. He agreed he
had been experiencing financial difficulties during the time he
worked driving truck for Rick Clark and acknowledged that Peter
Vandenbroek had given him the sum of $600.00 to supplement his
income. At that time, his credit rating would not have permitted
him to obtain a loan from a bank or other financial institution
in order to purchase the Ford truck from Sian. Mitlin - the
parent company of APD - provided Sian with post-dated cheques,
each in the sum of $500.00 and Whiffin agreed that pursuant to
the terms of the purchase agreement - Exhibit A-1 - he is named
as the purchaser of the Ford truck. However, he went on to state
that, although his own signature appears thereon, he had not
signed that particular typed document and considers it to be a
forgery since he is adamant about the manner in which his family
name is spelled and would not have signed any agreement in which
his name had been spelled incorrectly, as Whiffen. Counsel for
the respondent handed Whiffin a document - Exhibit R-1 - and he
agreed it was the original of Exhibit A-1 and that his signature
appeared thereon but he maintained that when he signed a document
concerning the Ford truck it did not have any typing on it. In
December, 1998, he was in a motor vehicle accident while driving
the Ford truck home from work. He filed an insurance claim with
Insurance Corporation of British Columbia (ICBC) seeking
compensation for repairs to the vehicle as well as an amount for
pain and suffering. He stated he filed the claim with ICBC
because he had been operating the truck at the time of the
collision and he asked Peter Vandenbroek to provide a letter to
ICBC setting forth the amount he had earned from driving the
truck for APD in order to confirm that he had lost revenue as a
result of the accident. When the settlement was received from
ICBC - in the sum of $5,000.00 - Whiffin agreed he did not direct
any of that amount towards paying off the balance owing on the
truck. Throughout his working relationship with APD, Whiffin paid
for all repairs to the truck and carried out his own maintenance,
wherever possible, and was responsible for all fuel and insurance
costs. He agreed he was the only one who had keys to the vehicle.
He lived one hour away from the APD centre of operations and he
drove the truck back and forth each working day. Since it used
propane as fuel, the vehicle was relatively cost-efficient. At
one point, Whiffin stated another driver confided in him that
Peter Vandenbroek had told him that Whiffin was not free to take
the truck and find work elsewhere until the balance owing on it
had been fully paid. Other times - when business was slow and the
drivers were "whining" - the appellant stated Peter
Vandenbroek would respond in a similar fashion. Whiffin never had
a substitute driver operate the Ford truck but would have needed
one in the event he had taken a holiday. On May 9, 1999, a
meeting was held with the drivers in a pub in Surrey and Peter
Vandenbroek stated the holdback period had to be increased by an
additional two weeks but there was no discussion at that time
concerning the change in the division of gross revenue from the
existing 75%-25% split to a new formula based on 70% to the
driver and 30% to APD. He understood APD was experiencing some
financial problems and required additional time in order to meet
the payroll and that was the reason behind increasing the
holdback. During the three-day period the truck was out of
service, there was no revenue generated. Whiffin agreed that -
from time to time - the sum of $500.00 representing the truck
payment to Sian - would not be deducted from his gross earnings
because he had requested Vandenbroek to " hold off " or
to "go easy on me" during a month in which the truck
revenue was less than he needed for his personal commitments,
such as house rent which had fallen into arrears. The accounting
details - in the form of adding machine tape - attached to
Exhibit A-4 - had been affixed to the wall in the office in the
Vandenbroek residence and also in the APD working space on
Annacis Island. Whiffin stated the only reason he went to talk to
Sian about arrears in the truck payments was to discover the
reason they had not been made. In terms of the manner in which he
reported his income flowing from the truck in connection with his
arrangement with APD, Whiffin responded by explaining he had not
filed any income tax returns for the 1997, 1998 and 1999 taxation
years. During that period, he agreed no income tax had been
deducted from his gross revenue at APD nor had he ever paid any
employment insurance premiums.
[4]
In cross-examination by Peter Vandenbroek - agent for the
intervenor - the appellant, when it was suggested to him that the
purchase contract - Exhibit A-1 - had been signed at an office
used to carry on APD business, stated he could not recall that
event. He agreed he and his wife had been friends - in the
context of a working relationship - with the Vandenbroeks and had
been over to the Vandenbroek home for dinner. Even though the
arrangement concerning the truck and the required payments had
been subject to a written agreement, Whiffin stated he regarded
the entire transaction as a "handshake deal" because
the revenue of a driver was subject to fluctuation. He recalled a
problem had arisen at the business premise of an important
customer of APD which resulted in a request being made to APD
that he not be dispatched there again but he was still able to do
some deliveries to that location by dropping them off at the rear
of the building rather than following the usual procedure of
taking the packages to the front office. Although the Ford truck
had been used by the Whiffins to visit his father, Whiffin stated
he always thought it was "an A & P truck" so he did
not consider it to be generally available for personal use even
though he had his own signs made up for display on the unit.
[5]
In re-examination by his counsel, Whiffin could not recall
whether or not the sum of $600.00 given to him by Peter
Vandenbroek had been deducted at a later date from his earnings
but thought that was possible. The person who signed as a witness
to the contract - Exhibit A-1 - was a worker at Westlund
Industries - the site of Peter Vandenbroek's employment - and
Whiffin denied he had ever taken that document to Sian in order
to obtain his signature thereon. As for the sum of $5,000.00
received from ICBC, Whiffin indicated some of that amount was
attributable to lost income because - following the accident - he
could not do heavy lifting or drive as many hours and he
estimated he had lost approximately $500.00 every two weeks as a
result. Regarding the duties of the dispatcher, Whiffin agreed a
specific request by a customer for his services would be
accommodated whenever possible but he understood the dispatcher
made the final decision regarding who would be assigned a
particular trip.
[6]
Angela Whiffin testified she has been married to the appellant
for 12 years and they are the parents of one child. Following a
seven-year separation, they reconciled in March, 1999 and resumed
cohabitation. At about that time, she had answered a telephone
call from a woman requesting to speak with Kelly Whiffin who -
after identifying herself as Angela Vandenbroek - went on to
describe herself as being "his boss". Angela Whiffin
stated she would pick up the appellant's pay cheque every two
weeks and on one occasion went with Angela Vandenbroek to a
neighbourhood pub and during the course of discussion,
Vandenbroek had inquired about the possibility of the Whiffins
being able to obtain a loan in order to pay off the balance owing
on the truck. At that time, Angela Whiffin stated
Angela Vandenbroek had tears in her eyes because the
appellant's earnings were so small and she told Whiffin it
made her feel bad when writing such small cheques to an
"employee". On August 3, 1999, Kelly Whiffin was at
home - sick - when Angela Vandenbroek telephoned and talked
to him. She overheard Kelly say "So, Peter is irate, is he
"followed by him asking, "So, you are firing me?"
Then, Angela Whiffin stated Kelly hung up the telephone and said,
"They are firing me for going behind his (Peter's)
back" which she understood to refer to the conversation
Kelly had held with Sian about the arrears on the truck
payments.
[7]
In cross-examination by counsel for the respondent, Angela
Whiffin explained that during their seven-year separation they
had actually been living under the same roof but she and her son
had lived upstairs while Kelly and his mother had occupied the
lower level of the house. After having received some student
loans, she had been attending school but an injury in 1997 -
followed by some surgery in 1998 - forced her to drop out so that
- in 1999 - the appellant's earnings were the sole source of
family income. In August, 1999, their family was having some
financial problems and the rent was in arrears by one month. She
believed Kelly was told by Angela Vandenbroek that he would
receive his final "wages" when he returned the truck.
She stated she had only been a guest at the Vandenbroeks'
home on one occasion but they had spoken on the phone now and
then.
[8]
In cross-examination by Peter Vandenbroek - agent for the
intervenor - Angela Whiffin stated she did not recollect having
brought Angela Vandenbroek a bottle of wine or asking her to
provide details of Kelly's whereabouts during the day.
Whiffin explained that a woman, who worked at a business that was
a major customer of APD, had been phoning Kelly at home and
sending him flowers. Angela Whiffin stated she went to the office
of that customer and had a conversation with the woman's boss
during which she requested that his employee be instructed - by
him - to discontinue her romantic pursuit of Kelly. As a
consequence of her visit, the person to whom she had spoken about
her problem then telephoned Peter Vandenbroek and requested APD
no longer assign Kelly Whiffin to any deliveries to that
business premises. Following that, Angela Whiffin stated she
went to one of the two business sites utilized by APD where she
confronted Kelly and an argument ensued. Angela Vandenbroek
intervened by attempting to assure her that Kelly was probably
innocent of any involvement with this particular female. Angela
Whiffin stated she doubted that Kelly's ensuing inability to
attend at the business premise of a major APD customer would have
had any affect on his income.
[9]
Peter Vandenbroek testified he is self-employed and resides in
Surrey, British Columbia. In 1986, he began working as a driver
for Westlund Industrial Supplies Ltd. (Westlund) in New
Westminster. Later, he purchased his own truck and obtained a
motor carrier license which he used in the course of a
partnership enterprise. When his partner bought him out,
Vandenbroek retained the license. Mitlin Enterprises Ltd.
(Mitlin) was incorporated in 1993 and the shares were held
equally by him and his wife, Angela Vandenbroek. She handled the
necessary bookwork and administration but was not generally
involved in the dispatching of trucks. Peter Vandenbroek stated
he continued to work at Westlund - as an employee - in his
capacity as a shipper and his employer was satisfied with that
arrangement. The APD drivers would attend at the Westlund yard or
hang out in a coffee shop in the midst of the industrial area.
Some of the drivers left their trucks in that vicinity overnight
and used another vehicle to drive back and forth to work.
Approximately 40% of the total volume of APD deliveries
originated from Westlund. Rick Clark was an owner/operator who
owned two trucks and he had placed an advertisement in a
newspaper seeking a driver for one vehicle. When Clark
interviewed and then hired Kelly Whiffin, APD requested to see
Whiffin's driver abstract for insurance purposes. At that
time - in January, 1998 - APD had nine trucks available to make
deliveries and it became obvious that a dispatcher was needed.
Rick Clark - on behalf of APD - leased some space and set up an
office. Later, Clark left and took his two trucks with him.
During the time the appellant had been working - as a driver -
for Clark, Vandenbroek stated he and Kelly had become friends and
he was aware that Sian - a former owner/operator at APD -
had purchased a gas station and had a truck for sale at the price
of $10,000.00. In Vandenbroek's opinion, that amount was
excessive but Sian would agree to sell the truck to the appellant
only if Peter Vandenbroek and/or Mitlin guaranteed the payments
which were scheduled to be paid at the rate of $500.00 per month.
Mitlin paid the sum of $750.00 to register the truck and a
further sum of $400.00 to equip the vehicle with decent tires.
Vandenbroek explained that in the delivery business there is no
guarantee of revenue and the drivers had to "hustle" in
order to generate income. The rate sheet had to be provided to
the Motor Carrier Commission. Drivers were entitled to mark down
time spent waiting at a delivery site and this was charged out at
the rate of $32.00 per hour and then factored into the invoice
sent to the customer. Most owner/operators were well aware of the
need to set aside some money to cover the slow periods but the
appellant had financial troubles. Initially, Sian was given 10
post-dated APD cheques, each in the sum of $500.00. The premium
to insure the Ford truck - for delivery work at APD - was in the
sum of $168.01 per month. By April, 1998, the appellant began
asking for some relief from the deductions taken from his gross
earnings and as time went on he got further behind including
amounts owing as a result of purchasing three jackets with
the APD logo. The two-week holdback period was based - in part -
on the need to have some money retained by APD as security in the
event a driver left and took some property belonging to a
customer but was also required because customers did not pay
their accounts to APD for 30 days. A meeting was held in May,
1999, and the holdback period was increased to four weeks. The
drivers present at the meeting were not happy with this change
but understood it was necessary in the same sense as raising the
APD share of gross revenue - from 25% to 30% - flowing from
delivery fees. Vandenbroek stated he saw this change in the
revenue-sharing structure as an interim measure which he thought
had been related to the hiring of a dispatcher. He spoke to each
driver individually or in groups of three and later a letter of
explanation was placed inside the envelope containing the cheque
for net earnings during that pay period. In 2000, the division of
revenue - for most owner/operators - reverted to the previous
75%-25% split but some are paid a different percentage. After the
problem at the site of a major customer - arising from the visit
of Angela Whiffin - Peter Vandenbroek stated he attempted to send
Kelly to the rear of that customer's premises but the ruse
was discovered and another call was received by him from a person
in management at that business informing him that APD was not to
assign Kelly Whiffin to any deliveries at their premises. The
normal customer base of APD was in the New Westminster area but
the appellant had indicated he thought he could locate some work
in the Abbotsford area as they both understood it was costing him
a lot of money to drive back and forth - in the Ford truck - each
working day. After the initial supply of post-dated cheques to
Sian had been cashed, the payments to Sian were behind about one
month but Vandenbroek stated he spoke to Sian and informed him
the arrears would be paid. Vandenbroek spoke to the appellant
about whether or not a loan could be obtained for the purpose of
reducing the amount of the monthly payments on the truck and
Whiffin responded by stating he would use the proceeds of his
insurance settlement from ICBC to pay off the balance. As a
result, Vandenbroek - for two or three months - did not continue
to deduct the full amount of the $500.00 payment from
Whiffin's gross revenue. In Vandenbroek's opinion, the
Ford truck was worth between $7,500.00 and $8,000.00 at the time
of purchase. The original purchase agreement - Exhibit R-1 - had
been drafted by Sian who later produced it to him. On March 2,
1998, the document was signed by Kelly Whiffin at the Westlund
business premises and the person signing as a witness was
Brian Cuthbert. Vandenbroek signed the agreement as a
"Co-Signor". Then, the appellant took the document to
Sian to have it signed and later Vandenbroek discovered a
photocopy of that agreement. On August 4, 1999, the appellant
attended at the APD office and requested a better accounting and
a statement pertaining to his earnings and deductions. The same
day, Sian telephoned Vandenbroek and said, "Pete, this guy
you helped out is down here telling me you are ripping him
off". He admits he was upset by this message and was still
feeling that way when he went home. Later, he attempted to talk
to Kelly but when he telephoned the Whiffin residence neither the
appellant's wife nor his mother would pass on any message to
him. Vandenbroek stated he had to dispose of the Ford truck -
still parked in his driveway - and he placed an advertisement in
a Buy and Sell publication in which he stated an asking price of
$5,000.00. No offers in that range were received and he became
uneasy about the reaction of his neighbours to this one-ton truck
- with an 8 foot by 14 foot flat deck - being parked in a
residential area. About a week later, he accepted the sum of
$2,500.00 for the truck and signed the transfer form in favour of
the purchaser. The money from the sale was paid to Sian.
Vandenbroek stated APD had between 8 and 12 trucks available to
handle deliveries and Mitlin owned a 1996 5-ton truck - with a
20-foot deck and equipped with a crane - that was used in
delivering construction material. Brian Cuthbert owned his
own pickup truck which he used for deliveries but also drove the
Mitlin unit and was compensated on the basis of 45% of the
revenue generated. That large truck was the only vehicle not
owned by the drivers. There were no written contracts in place
and the owner/operators were a tightly-knit group attempting to
grow the business along with the Vandenbroeks. There was no
discipline meted out, no one was ever fired and the drivers could
leave at any time. Whiffin was the only person who had keys to
the Ford truck driven by him and Vandenbroek said it was never
regarded - or referred to - as being an APD or Mitlin truck. As
far as he was concerned, the purchase agreement was between the
appellant and Sian except he was involved as a sort of guarantor
to ensure the payments were deducted from Whiffin's earnings
and then remitted to Sian. There was never an issue arising in
relation to any repossession of the truck by Sian as there was
only about $2,500.00 remaining due on the balance. Vandenbroek
left his employment at Westlund in August, 1999 but while he was
working there and operating the APD business, he regarded APD as
a broker involved in finding work for the drivers who operated
independently. In his opinion, he and his wife had no control
over these individuals nor did they have any authority to mete
out discipline. In the event drivers did not perform the work,
then another courier/delivery company would be telephoned and
hired to make the required delivery in order to satisfy the needs
of an APD customer.
[10] In
cross-examination by counsel for the appellant, Peter Vandenbroek
agreed another dispatcher had been hired to replace Rick Clark
when he left APD in March, 1998 and in the interim one or more of
the drivers or Angela Vandenbroek had probably carried out that
function. The meeting regarding the reduction in the drivers'
share of the revenue did not occur until May, 1999 and
Vandenbroek agreed the change was made to generate more revenue
for APD but was not related - as he had earlier stated - to the
hiring of a dispatcher. He stated the Motor Carrier Commission
requires a driver's abstract for any person driving a vehicle
under Mitlin's authority and this would also apply to any
substitute driver. He agreed Mitlin was the legal registered
owner of the Ford truck but always regarded it as being available
to the appellant to use in any manner he saw fit. Vandenbroek
stated that, while Santokh Sian, the previous owner of that
vehicle was a good friend, discussions between Sian and the
appellant took place at the Westlund premises and Vandenbroek
denied ever attending at the service station - owned by Sian -
for that purpose. When the agreement - Exhibit R-1 - was signed,
Vandenbroek reiterated Sian was not present. Later, the
provincial sales tax (PST) had to be paid on the transfer of the
vehicle and it had to be licensed and insured in order that the
appellant could begin using it in the course of the delivery
business. The normal procedure was for a driver to complete the
waybills by entering the weight of the item, distance travelled,
waiting time - if relevant - and Vandenbroek would then calculate
the amount to be billed to the customer. All drivers had rate
sheets to hand out to customers. While Angela Vandenbroek was
involved in the business from time to time she did not ever give
any direction to any drivers and was mainly occupied with
handling bookkeeping for the business from an office in their own
home. Turning again to the details surrounding the execution of
the purchase agreement - Exhibit R-1 - Vandenbroek stated the
document was signed in a fabrication shop at the rear of the
Westlund premises. Whiffin had picked up the document - necessary
to transfer ownership of the vehicle - and it had been completed
and signed by Sian prior to Vandenbroek signing it at the
Westlund premises. Following that procedure, he and Whiffin
attended at the ICBC agent to register, license and insure the
Ford truck. The purchase price of the unit - $10,000.00 - was not
of any concern to Vandenbroek as Whiffin had negotiated the deal
with Sian and could have purchased it - or not - as he saw fit.
There was no discussion held about what would occur if the
appellant could not make the payments but until the balance owing
to Sian was paid in full, Vandenbroek stated it was good business
sense for the truck to remain registered in the name of Mitlin.
When the appellant was involved in the motor vehicle accident,
ICBC required confirmation of his loss of revenue in order to
adjudicate his claim. After speaking to an insurance adjuster on
the telephone, Vandenbroek sent a letter - Exhibit A-6 - setting
forth details of the appellant's earnings in previous months
as compared with the revenue generated by three other one-ton
trucks which he referred to therein as "our three one-ton
trucks". He stated he had not meant to imply Mitlin was the
owner of those vehicles merely that they were of the same sort as
the one operated by the appellant and were generating more
revenue than Whiffin during the same period. Vandenbroek stated
he had never been aware of any dispute or problem between the APD
dispatcher and the appellant and there was no authority in that
person to make any comment concerning the repossession of the
Ford truck. He agreed he was annoyed when the appellant had
confided in Sian that he was being "ripped off" and he
wanted Angela Vandenbroek to telephone Whiffin at home as he was
too angry at the moment to discuss the matter with the appellant.
He thought Whiffin would come over to the Vandenbroek residence
and discuss the incident but when the appellant did come to their
house on August 6, 1999, it was for the purpose of dropping off
the Ford truck. Based on information available from their in-home
office, Angela Vandenbroek drew up an accounting of money owed to
the appellant and prepared a cheque in that amount which was
given to him at that time. Peter Vandenbroek stated he attempted
to contact the appellant following that event because he had paid
a total of $6,800.00 towards the purchase of that vehicle but was
never able to speak to him. There was still a balance owing on
the truck which had to be paid and it was necessary - in the
absence of any communication from the appellant - to take steps
to sell the vehicle and to pay out the monies to Sian in order to
extinguish the debt.
[11] Counsel
for the respondent chose not to cross-examine.
[12] Angela
Vandenbroek testified she lives in Surrey, British Columbia, is
married to Peter Vandenbroek and owns 50% of the shares in
Mitlin. During the relevant period, she worked three days a week
for Crane Supplies and two days a week at the APD office. On one
occasion, the appellant came into the office and inquired about
the truck payments. She later obtained the relevant information
after consulting records in their office at home. She undertook
certain calculations which she set forth on two sheets, filed
together as Exhibit Int.-1. She recalled the day Peter came home
- very upset - shaking his head and relating the information
about Kelly Whiffin having "badmouthed" him in making
accusations to Sian that Peter had "ripped him off".
Peter did not want to speak with the appellant at that time so
she agreed to telephone him and when he answered, she asked him,
"What the hell happened today?" Kelly responded by
remarking that working at APD was a "dead-end
job" and that he was being ripped off and wanted the money
owing to him. He stated he would come over to the
Vandenbroeks' home to "sort out the mess". The next
day - in the middle of the afternoon - in her driveway - she saw
the appellant inside the Ford truck and his wife - Angela Whiffin
- behind him in a car. The appellant informed her he was there to
collect his money as he had back rent to pay and needed the funds
immediately. Angela Vandenbroek stated she went inside the house
into the APD office area, calculated the sums indicated on the
adding machine tapes, and wrote him out a cheque. She had
attempted to contact Peter at the Westlund office but he was not
available. Once the calculation had been completed, she gave the
sheet and the cheque to the appellant and he handed over the keys
to the Ford truck and then left. Angela Vandenbroek recalled
meeting with Angela Whiffin and having a discussion about the
Whiffin's financial problems and remembers mentioning that
she felt bad when a driver would receive a cheque for a small
amount of money.
[13] In
cross-examination by counsel for the appellant, Angela
Vandenbroek estimated the document - Exhibit A-4 - had probably
been prepared by her about two weeks prior to the accounting
sheets comprising Exhibit Int.-1. She agreed she handed the
appellant a grey folder containing several documents of which
Exhibit A-4 is a copy. She is President of Mitlin and
occasionally wrote cheques on the corporate account because Peter
had a full-time job and sometimes his arthritis would flare up
and cause difficulties for him. She utilized accounting software
and entered amounts from the waybills and Peter also did some
bookkeeping. The appellant had requested an accounting from her
about four days before the "blow-up" resulting in
the termination of the working relationship. She had been at the
meeting in the pub at Surrey when the drivers and Peter had
discussed the matter of increasing the time period on the pay
holdback as well as the issue of reducing the percentage of
revenue paid to the drivers by 5% on the basis there had to be
more organization of the business and additional time and effort
spent to increase the volume of deliveries. She cannot recall
whether the appellant was present at the meeting. She denied ever
having referred to herself - when speaking on the phone to Angela
Whiffin - or otherwise, as being the appellant's
"boss" and, while it is possible she referred to
writing an "employee" a pay cheque, she does not recall
ever using that term within the context of her conversation with
the appellant's wife. The meeting with Angela Whiffin also
involved discussing whether it would be possible for the Whiffins
to obtain a loan to pay off some of their debts. On August 5,
1999 when she telephoned the appellant's home she was
surprised when he answered and she was aware he was upset but
assured him he was not being fired. APD maintained a running
tally of revenue earned and, when the appellant informed her he
wanted to be paid the balance due to him, she responded by
telling him the money would be available when he came over to the
office at the Vandenbroek residence. On August 6, 1999 the
appellant came to the house and she was surprised when he turned
over the keys to the Ford truck, leaving it in the driveway. The
appellant stated he wanted to go to his bank and when
Angela Vandenbroek told Angela Whiffin she was welcome to
come over and visit any time she chose, Angela Whiffin replied,
"you guys have already wasted enough of our time." One
week later the truck was sold.
[14] In
cross-examination by counsel for the respondent, Angela
Vandenbroek stated she did not deduct amounts owing by the
appellant - to APD - from the holdback cheque and had never fired
him nor would it ever enter her mind to attempt to do so as she
had never been authorized to deal with the formation or
termination of relationships between APD and the drivers.
[15] Chris
Leigh testified he resides in Surrey, British Columbia and for
the past 8 years has been the owner/operator of a truck that is
used within the context of the APD delivery business owned by
Mitlin. He operates a 5-ton crane truck and - while he encourages
customers to use his services - he relies on APD to provide the
dispatch service and to carry out the related administration and
record keeping. He recalled having spoke to Kelly Whiffin on many
occasions about the circumstances and details relating to
becoming an owner/operator of a vehicle in the context of the
delivery service as dispatched and administered by APD. Leigh
stated he has never regarded himself as an employee of Mitlin. In
his view, the delivery industry is unique and he regards APD as
an entity that works for him in the sense of providing a service
that he needs and - in return - he pays them a certain percentage
of the gross revenue produced by him and his truck. The business
is known for its fluctuations in revenue and, while the rates are
fairly consistent between companies, it is still a competitive
business.
[16] In
cross-examination by counsel for the appellant, Chris Leigh
stated he had purchased his truck 5 years earlier from Mitlin and
- while an amount based on 30% of revenue was common within the
industry - he paid 25% of his gross earnings to APD. When the
revenue sharing arrangement had been modified in May, 1999, Leigh
stated all the drivers had been informed of the situation and
understood the business was in the process of growing.
Originally, Leigh had handled the dispatching from his own truck
and he did not think any driver disagreed with paying an
increased percentage to APD. Each driver was free to leave and -
later - the former revenue split of 75%-25% was restored. During
the course of several discussions between Leigh and Kelly
Whiffin, the appellant had inquired about the costs of operating
a truck, the implications of GST and other related matters. Leigh
had encouraged him to become an owner/operator and was aware of
Whiffin's financial problems and that Peter Vandenbroek had
helped him out by paying him some money during the time he was
working as a driver for Rick Clark.
[17] In
cross-examination by counsel for the respondent, Chris Leigh
stated he had to report in to the dispatcher at APD if he wanted
to make any money. He refused trips if they were not appropriate
for his truck or were otherwise not profitable. On occasion, he
has suffered a loss with respect to certain loads carried and he
attempts to increase his income by talking to potential customers
and leaving them with a rate sheet and business card. He has had
repair costs on his truck in amounts as high as $7,000.00 and he
uses the large unit - capable of carrying up to 14,000 pounds -
on weekends to transport hot tubs. His truck also has an attached
crane with a 5,000 pound capacity and most of his client base
involves moving pipe, crates, bundles and a variety of other
larger items. Mitlin/APD has never had any concern about his
other income generating activities which - in any event - are not
the subject of any revenue sharing arrangement.
[18] Counsel
for the appellant pointed out that, although the evidence
disclosed the appellant's working relationship with APD
commenced in early March, 1998 and terminated on August 3, 1999,
the period covered in the Minister's decision was from August
2, 1998 to August 3, 1999. Counsel submitted there were different
versions of events which created an issue arising from the
credibility of witnesses but suggested that if the evidence
adduced by the appellant was accepted, then it would require a
finding that Kelly Whiffin had been employed by the intervenor -
Mitlin - pursuant to a contract of service in accordance with the
tests set forth in the relevant jurisprudence.
[19] Counsel
for the respondent submitted the appellant had made choices
throughout the course of the working relationship and that it was
apparent Whiffin had been the beneficial owner of the Ford truck
and was using it in the course of the delivery business to
generate revenue. Counsel's view of the evidence was that -
on balance - the various versions of events put forward by the
appellant should not be accepted as he was motivated to create a
scenario in which he could be seen as an employee during the
relevant period so as to entitle him to employment insurance
benefits and other entitlements which he was pursuing through the
labour standards mechanism established by the provincial
government. Counsel submitted that upon the Court finding the
facts, the decision of the Minister would be seen as correct in
holding that the appellant had not been employed - by the
intervenor - pursuant to a contract of service.
[20] In
Wiebe Door Services Ltd. v. M.N.R., [1986] 2 C.T.C. 200,
the Federal Court of Appeal approved subjecting the evidence to
the following tests, with the admonition that the tests be
regarded as a four-in-one test with emphasis on the combined
force of the whole scheme of operations. The tests are:
1. The Control Test
2. Ownership of Tools
3. Chance of Profit and Risk of Loss
4. The integration test
[21] Prior to
embarking on the required analysis, I want to point out that it
will be necessary to comment on the different versions of events
put forward by different witnesses as it will entail preferring
the testimony of one or more witnesses over that of others. Only
after choosing a version that is more probably correct than
another - for stated reasons - can I then proceed to use the
facts - as found - within the context of applying them to one or
more of the above-named tests.
Control:
[22] The
circumstances relevant to the issue of control - as related by
the appellant - are much different from the situation disclosed
by the testimony of Peter Vandenbroek, Angela Vandenbroek
and Chris Leigh. The appellant - a repetitive whiner - by his own
admission - attempted to create - as opposed to recalling - an
atmosphere in the workplace in which he was constantly told what
to do and where to go. There were at least two different
dispatchers during the relevant period and the suggestion that
one of them would have been sufficiently privy to the details of
the purchase and subsequent financing of the Ford truck so as to
take it upon himself to issue a so-called ultimatum that Whiffin
comply with the terms of the particular afternoon dispatch or
return the truck is not worthy of belief. It is apparent from the
evidence of Chris Leigh that he had spoken - on many occasions -
to the appellant concerning the business of owning and operating
a truck within the structure utilized by APD in conjunction with
the other eight or nine drivers. When a matter arose in the
course of some domestic discord between the appellant and his
wife, which created an inability to attend at the premises of an
important customer of APD, Peter Vandenbroek attempted to work
around the problem by suggesting Whiffin drive to the rear of the
premises for purposes of making the deliveries. It was not
Vandenbroek who had declared Whiffin persona non grata but
rather the manager of the major client of APD who had sided with
Angela Whiffin in implementing the ban so as to reduce the
opportunity for personal interaction between Kelly Whiffin and a
female member of the office staff who was having trouble
understanding the full meaning of Angela Whiffin's edict to
cease and desist in the pursuit of her fellow. The appellant
admitted he used the Ford truck to visit his father and the
inference he was otherwise forbidden to use the vehicle on
weekends to generate revenue is one which I am not prepared to
draw. There was no requirement that he attend at any particular
place at a certain time but in order to generate revenue he had
to be available to undertake certain deliveries. He decided to
use the truck as a personal vehicle and drove it back and forth
from his residence each working day. There was no reliable
evidence upon which to base any finding that he was ever subject
to any discipline or was in danger of being "fired". In
the event he wanted to leave early, there were other drivers to
handle the dispatched calls and two other trucks were capable of
hauling the same type of load as his own Ford. When he planned to
be absent for a day, he merely notified the dispatcher and it was
noted on a calendar in the APD office. The appellant agreed it
was never referred to as a "day off". On a slow day, if
he was sitting in his truck waiting for a call, there were three
or four other drivers doing the same thing and nothing was
preventing any one of them from leaving for the day, except they
were probably motivated to remain in the area so as to be
available to handle a delivery if one were to be dispatched later
in the afternoon. The method or routes taken in the course of
undertaking the deliveries were not subject to instruction,
supervision or monitoring. With regard to this particular test,
the evidence supports the view the appellant was providing
services in the context of being an independent contractor.
Tools:
[23] The main
tool needed to perform the job was the Ford truck which the
appellant purchased and began paying for at the rate of $500.00
per month, except during the months when he requested the
deduction not be taken from his gross revenue because he was
short of funds to meet his personal and family needs. The truck
was registered and insured in the name of Mitlin but it was
merely a bare trustee for the appellant and he clearly had the
full beneficial ownership. He entered into the contract with the
vendor - Santokh Sian - and the fact Peter Vandenbroek agreed to
be the co-signor - in the sense of ensuring the payments were
made to Sian - is not synonymous with ownership on the part of
Mitlin. Whiffin also rented a two-way radio from APD and paid for
the use of air time. Whatever other tools, equipment and
materials were necessary to handle the deliveries appropriate to
that type of truck were owned by Whiffin and he was able to make
the necessary decisions with respect to repair, maintenance and
purchase of accessories. There was a removable sign affixed to
the Ford truck identifying it as being operated pursuant to the
authority issued to Mitlin by the Motor Carrier Commission but
there was nothing preventing the appellant from affixing his own
sign in order to notify others that he was the actual owner of
the vehicle. Initially, Vandenbroek arranged for the licensing
and placement of adequate insurance coverage and he also
disbursed the sum of $400.00 to equip the truck with proper tires
and these amounts were later re-paid - for the most part - by
means of deductions from Whiffin's gross earnings flowing
from the deliveries. The case of Singh v. McRae (1971), 21
D.L.R. (3d) 634 stands for the proposition that the owner is the
person who has the dominion and control over the motor vehicle -
not necessarily the registered owner - within the meaning of
subsection 70(1) of the Motor Vehicle Act of British
Columbia imposing vicarious liability. Stroud's Judicial
Dictionary, 2nd ed., Vol. 2, p. 1387 contains the following
relevant definition:
"The owner or proprietor of a property is the person in
whom (with his or her consent) it is for the time being
beneficially vested and who has the occupation and control or the
usufruct of it."
[24] The only
way in which the appellant would be able to re-write history in
order to suit his revisionist view of events was to categorize
the purchase of the truck as a circumstance not of his choosing
and one fraught with elements of misrepresentation, deceit,
forgery and fraud. Initially, Kelly Whiffin stated in his
testimony that the copy of the purchase agreement - Exhibit A-1 -
was not the document he had signed because it was typed - as
opposed to being hand-written - and it has misspelled his family
name, something to which he - understandably - was consistently
adamant about being written correctly. He also disagreed with the
description of the model designation - Ford 450 - of the subject
vehicle. Then, in cross-examination, counsel for the respondent
produced a document - Exhibit R-1 - which was the original of
Exhibit A-1 - previously labelled a forgery by Whiffin. He agreed
the signature appearing on the original purchase agreement -
Exhibit R-1 - was his but, notwithstanding that admission,
continued to maintain his signature had not been placed - by him
- on that particular document because he cannot recall there ever
having been any text in the form of typing on the document he had
signed for the purchase of the truck. He also denied having taken
the purchase agreement to the vendor - Sian - to be signed so
that the truck could then be registered, licensed and insured
prior to it being used - by him - in the delivery business. Where
the evidence of the appellant conflicts with the evidence of
Peter Vandenbroek on the issue of the initial contact with
Sian, subsequent negotiations, manner of execution of the
agreement and related events, I prefer the testimony of
Vandenbroek and reject the evidence of the appellant on the basis
it is highly improbable, self-serving, inconsistent and probably
completely untrue. As a result of the above findings of fact, the
application of this test favours the status of independent
contractor.
Chance of profit and risk of loss:
[25] It is
apparent there was the opportunity to increase revenue by
handling the deliveries - as dispatched - and by seeking other
customers within the operating area serviced by APD and out in
Abbotsford where the appellant lived. A nonchalant attitude,
diminished appreciation of a reasonable work ethic or outright
whining to the dispatcher is probably not conducive to increased
production of revenue. Whether deserved or not, banishment from
the premises of a major customer of APD - a place where he had
previously made sufficient deliveries to have attracted the
attention of a female office employee - did not assist in the
production of revenue from that source as he was entitled to 75%
- and later - 70% of the gross revenue flowing from each
delivery. The appellant used the truck as a personal vehicle to
drive back and forth to his home in Abbotsford and did not
attempt to use it to generate other revenue. When he was injured
in the motor vehicle accident, the sum of $5,000.00 paid as
damages for repair of the vehicle, loss of income and some
undetermined amount for pain and suffering was paid directly to
the appellant on the basis he had lost revenue as an
owner/operator of his truck when compared with that of others
working at APD during the same period. The appellant did not
dispute that he was responsible for all expenses associated with
the operation of the truck. A perusal of Exhibit A-4 - accounting
sheets - indicates that while the appellant had the sum of
$500.00 deducted from his earnings in June, 1999 and - on July 1,
1999 and July 30, 1999 - the further amounts of $500.00 and
$250.00, respectively, representing truck payments to Sian. The
Appellant had previously been in arrears - overall - in an
accounting sense as between himself and APD as a consequence of
APD having paid insurance premiums on the vehicle together with
other miscellaneous items that were his responsibility. Sian had
not received any truck payments in June or July of 1999 but in
the past had received payments in the sum of $1,000.00 when there
had been the need for a catch-up, probably due to those months
when the appellant had requested Peter Vandenbroek "go easy
on him" and not deduct the full amount of the truck payment,
insurance premium or other expenses from his entitlement because
he needed the money to pay household bills. Between March 1, 1998
and December 1, 1998, Vandenbroek - on behalf of Mitlin -
provided Sian with 10 post-dated cheques each in the sum of
$500.00 for a total of $5,000.00. During that same period, the
appellant had a total of $3,800.00 deducted from his share of the
gross delivery revenue in a series of amounts ranging from
$250.00 to $300.00 and $500.00 as shown on the accounting sheet -
Exhibit A-4. The sum of $168.00 was deducted each month for the
insurance premium on the truck but the total premium paid by APD
appears to have been in the sum of $3,326.48 while the appellant
paid - by way of deduction from revenue - only the amount of
$1,512.00 leaving a shortfall in that category. The payment - to
Sian - of proceeds from the sale of the abandoned truck -
$2,500.00 - extinguished the debt owing on the balance of the
purchase price for which the appellant had direct liability as
the named purchaser in the agreement. Taking into account the
relevant factors, the evidence favours a finding the appellant
was providing services in his capacity as an independent
contractor.
Integration:
[26] At p. 206
of his judgment in Wiebe, supra, MacGuigan, J.A.
stated:
"Of course, the organization test of Lord Denning and
others produces entirely acceptable results when properly
applied, that is, when the question of organization or
integration is approached from the persona of the
"employee" and not from that of the
"employer," because it is always too easy from the
superior perspective of the larger enterprise to assume that
every contributing cause is so arranged purely for the
convenience of the larger entity. We must keep in mind that it
was with respect to the business of the employee that Lord Wright
addressed the question "Whose business is it?"
Perhaps the best synthesis found in the authorities is that of
Cooke, J. in Market Investigations, Ltd. v. Minister of Social
Security, [1968] 3 All. E.R. 732 at 738-39:
The observations of Lord Wright, of Denning L.J., and of the
judges of the Supreme Court in the U.S.A. suggest that the
fundamental test to be applied is this: "Is the person who
has engaged himself to perform these services performing them as
a person in business on his own account?" If the answer to
that question is "yes", then the contract is a contract
for services. If the answer is "no" then the contract
is a contract of service. No exhaustive list has been compiled
and perhaps no exhaustive list can be compiled of considerations
which are relevant in determining that question, nor can strict
rules be laid down as to the relative weight which the various
considerations should carry in particular cases. The most that
can be said is that control will no doubt always have to be
considered, although it can no longer be regarded as the sole
determining factor; and that factors, which may be of importance,
are such matters as whether the man performing the services
provides his own equipment, whether he hires his own helpers,
what degree of financial risk be taken, what degree of
responsibility for investment and management he has, and whether
and how far he has an opportunity of profiting from sound
management in the performance of his task. The application of the
general test may be easier in a case where the person who engages
himself to perform the services does so in the course of an
already established business of his own; but this factor is not
decisive, and a person who engages himself to perform services
for another may well be an independent contractor even though he
has not entered into the contract in the course of an existing
business carried on by him.
There is no escape for the trial judge, when
confronted with such a problem, from carefully weighing all of
the relevant factors, as outlined by Cooke, J."
[27] There is
no question that the intake process, administration and business
structure was that of APD - as a division of Mitlin - and the
customers dealt with APD on that basis. However, the evidence
supports the view within the courier/delivery industry that the
common procedure is to provide for a division of the revenue
flowing from the total amount generated by the final delivery of
the package to its intended recipient. Further, there is an
appreciation that certain components of service - within the
context of total transaction - have been provided by different
individuals and/or entities and these participants are entitled
to a share of the revenue but must also bear some costs
associated with the production of that income. In the within
appeal, the appellant provided - or arranged to obtain - the
vehicle and communication equipment needed to generate income. He
had a degree of financial risk and responsibility for managing
his expenditures against the amount of revenue being produced. He
most definitely had every opportunity to profit from appropriate
and prudent management of his business in the same way as the
other drivers - generally - or Chris Leigh - specifically - whose
testimony provided a view of the working life of an
owner/operator within the courier/delivery industry. The
appellant - again - attempted to portray himself as an innocent,
never having been other than an employee in his previous working
life as a shipper and receiver, warehouseman and driver, but the
evidence of Chris Leigh was that he spoke to Whiffin on several
occasions in which many aspects of truck ownership and operation
within the APD structure had been canvassed. One must keep in
mind, the appellant did not just stumble into the APD office one
day - seeking directions - and end up a virtual hostage forced to
drive a truck for the next 18 months. For more than two months in
1998, he had driven a truck for Rick Clark - an
owner/operator with APD - and when Clark left with his trucks,
Whiffin proceeded to fully investigate the opportunity provided
by Peter Vandenbroek and - in so doing - understood the
chances for increased revenue and the pitfalls associated with
becoming an owner/operator in a business arrangement with APD. He
was dissatisfied with the small amount of money he had been able
to earn while working for Clark. In my recent decision in the
case of Flash Courier Services Inc. v. Canada (M.N.R.),
[2000] T.C.J. No. 235, I considered the situation involving an
owner/operator of a truck used in the courier business. Therein,
I considered other cases based on similar fact situations such as
Mayne Nickless Transport Inc. v. Canada (M.N.R.), [1999]
T.C.J. No. 132, a decision of Porter, D.J.T.C.C. released
February 26, 1999 in which the drivers were held to be
independent contractors. In Flash Courier, supra,
concerning the matter of integration, I commented - at page 16 -
as follows:
"In the within appeals, the facts surrounding the working
relationship of the invervenor support the view he was in the
transportation business and functioned as a courier by means of
operating his own vehicle which had certain specifications and
attributes which permitted him to increase his revenue. Flash was
the larger entity that dealt directly with the customer in order
to receive the calls, issue the subsequent billing and fulfil all
other administrative requirements. The intervenor and Flash
together with the other 50-70 drivers and/or 10-15 bicycle
couriers performed the tasks required of them in order to
generate revenue which was then divided in accordance with an
agreed-upon formula as stated in their individual contracts.
There is nothing preventing wheels within a larger mechanism from
being legitimate stand-alone entities even though in order to
function profitably they must mesh with the greater machine. In
any sophisticated economy that will be the norm. Near total
dependence on one client may be - at times - foolhardy but it
will not, without more, transform someone into an employee of the
one writing the cheques in return for services."
[28] It is
worth repeating at this point that a significant portion of the
within appeal turns on findings of credibility which is not
usually the case in these matters. Where the evidence of the
appellant and/or his wife Angela Whiffin is in conflict
concerning details surrounding the telephone conversation on the
evening of August 5, 1999 and subsequent discussions
revolving around the accounting and turning over of the keys to
the truck parked in the Vandenbroek driveway, I prefer the
version of events as related in the testimony of Angela
Vandenbroek. The entire thrust of the appellant's case was to
portray himself as an employee so that he could take advantage of
employment insurance benefits and whatever else might flow from
that status if he could sell that proposition to the appropriate
tribunals involved in making decisions pursuant to provincial
labour legislation. In the within appeal, there was no written
contract between APD and the appellant or between APD and any of
the owner/operators but they all regarded themselves as
independent contractors. The statement by the appellant that he
was one of three persons operating trucks supposedly owned
by Mitlin is not borne out by the rest of the evidence. His
evidence that he requested a Record of Employment from Angela
Vandenbroek is not believable as it was only later when he
realized certain indicia had to be present if he were to be
successful in the process of establishing - initially in
pursuance of his claim before the labour tribunal - that he had
been an employee of APD. His testimony concerning the significant
factors of control, ownership of tools, matters affecting his
remuneration and his role within the overall business structure
and operations of the APD delivery business was - for the most
part - not credible.
[29] It is
trite that parties cannot merely slap a label onto their working
relationship and have it stick when it does not accord with the
actual nuts and bolts of their daily activities within that work
environment. In the case of Razzouk v. Canada (M.N.R.),
[1996] T.C.J. No. 160 Archambault T.C.J. heard the appeal of the
owner of a body shop who had hired an apprentice who agreed to
operate as an independent contractor and pay his own taxes. At p.
2 of his judgment Judge Archambault stated:
"It is very clear in law that the nature of a contract
cannot be determined only by reference to the label used by the
parties. The nature of the contract has to be determined on the
basis of the true nature of the relationship existing between the
parties. In other words, a determination must be made by taking
into account the true substance of the relationship and not on
its form."
[30] Taking
into account all of the evidence with a view of the overall
scheme of operations and in applying the relevant jurisprudence
to the specific findings of fact, I conclude the decision of the
Minister was correct and the appellant has not demonstrated that
he was engaged in insurable employment with the intervenor during
the relevant period.
[31] The
appeal is hereby dismissed.
Signed at Sidney, British Columbia, this 19th day of February
2001.
"D.W. Rowe"
D.J.T.C.C.
COURT FILE
NO.:
2000-2975(EI)
STYLE OF
CAUSE:
Kelly Whiffin and M.N.R. and A & P
Delivery, a Division of Mitlin
Enterprises Ltd.
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
December 5, 2000
REASONS FOR JUDGMENT
BY:
the Honourable Deputy Judge D.W. Rowe
DATE OF
JUDGMENT:
February 19, 2001
APPEARANCES:
Counsel for the
Appellant:
Christopher D.R. Maddock
Counsel for the
Respondent:
Kristy Foreman Gear
Agent for the
Intervenor:
Peter Vandenbroek
COUNSEL OF RECORD:
For the
Appellant:
Name:
Christopher D.R. Maddock
Firm:
Abbotsford Community Legal Services
Abbotsford, British Columbia
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
For the Intervenor:
2000-2975(EI)
BETWEEN:
KELLY WHIFFIN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
A & P DELIVERY, A DIVISION OF
MITLIN ENTERPRISES LTD.,
Intervenor.
Appeal heard on December 5, 2000, at Vancouver,
British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
Counsel for the
Appellant:
Christopher D.R. Maddock
Counsel for the Respondent: Kristy
Foreman Gear
Agent for the
Intervenor:
Peter Vandenbroek
JUDGMENT
The
appeal is dismissed and the decision of the Minister is confirmed
in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 19th day of February
2001.
D.J.T.C.C.
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