Date: 20010205
Dockets: 97-1418-UI,
97-1420-UI, 97-1421-UI, 97-1422-UI,
96-2493-UI, 97-33-UI,
97-34-UI, 97-263-UI
BETWEEN:
VARDY VILLA LIMITED,
ROY GOOBIE,
VIOLET L. DIAMOND,
JOSEPH DIAMOND, DAVID KEOUGH,
Appellants,
and
THE MINISTER OF
NATIONAL REVENUE,
Respondent.
Reasonsfor
Judgment
CAIN, D.J.T.C.C.
[1]
The above Corporate Appellant (the "Payor") and the
personal Appellants (the "Workers") appealed the
decisions of the Respondent that the engagement of the parties
during specific periods (the "periods in question") was
not insurable employment in accordance with the Unemployment
Insurance Act (the "Act"). The Respondent in
all cases notified the Appellants in writing that the reason for
his decision was that there was no contract of service between
the Payor and each respective Worker and therefore no
employer/employee relationship.
[2]
The appeals were heard at Gander, Newfoundland/Labrador on
July 13, 2000. The parties agreed that the appeals should be
heard at the same time, the evidence adduced to be applied to
each respective appeal as the context required and that there was
no necessity of creating more than one record.
[3]
The periods in question for each of the personal Appellants are
as follows:
1.
Roy Goobie - August 14, 1995 to November 17,
1995.
2.
David Keough - April 3, 1995 to June 23, 1995 and September
4, 1995 to June 21, 1996.
3.
Violet L. Diamond - April 3, 1995 to June 23, 1995 and
September 4, 1995 to June 21, 1996.
4.
Joseph Diamond - April 3, 1995 to June 23, 1995 and
September 4, 1995 to June 21, 1996.
5.
The Court notes that in describing the period in question of
Worker Roy Goobie, the Respondent did not include the period
of November 20, 1995 to June 12, 1996. The Respondent did include
that period in his Reply in respect to the Worker's
non-arm's length relationship with the Payor. The Worker
admitted that fact.
[4]
The Respondent based his determinations on the following
assumptions in respect to the Workers:
JOSEPH AND
VIOLET L. DIAMOND
"(a)
the Appellant was a
corporation duly incorporated under the laws of the Province of
Newfoundland on September 21, 1987;
(b)
at all relevant times the Appellant's issued shares were
owned by Dennis Vardy and his spouse, Amy Vardy;
(c)
the Appellant engaged the Worker to drive students from the
Newfoundland communities of Jamestown, Portland, Brooklyn and
Lethbridge to and from the Musgravetown High School and
Elementary Schools;
(d)
during the period in question the Worker drove the same routes
which took 1 hour in the morning and 1 hour in the afternoon for
a total of 2 hours work, 5 days a week;
(e)
the Worker was paid $50 per week from January 1, 1995 to
March 31, 1995 and then $260 per week from April 30, 1995 to
June 23, 1995;
(f)
the Worker was paid $50 per week from September 4, 1995 to March
29, 1996 and then $250 per week from April 1, 1996 to June
21,1996;
(g)
the Worker was paid the same weekly amount even if the bus did
not operate due to inclement weather;
(h)
the Worker did not perform any additional or different duties in
the periods where he was paid $260 or $250 per week than he did
in the periods where he was paid $50 per week;
(i)
the Worker was not supervised when carrying out his
duties;
(j)
the Worker was free to substitute his personal services with that
of another driver without first obtaining permission from the
Appellant;
(k)
the Worker received his full pay even when he did not drive the
school bus every day during the week;
(l)
the Appellant was
only interested in the completion of the service, not in how it
was done or who performed the tasks;
(m)
the Worker took the school bus home each day and was responsible
for seeing that maintenance was done to the bus as
needed;
(n)
there was no contract of service between the Worker and the
Appellant."
[5]
In the alternative, he based his determinations on the following
assumptions:
"(a)
while performing
services for the Appellant, the Worker was in receipt of
unemployment insurance benefits from January 1, 1995 to January
28, 1995 and from September 4, 1995 to March 29, 1996;
(b)
while in receipt of
unemployment insurance benefits the Worker's pay was
reduced to $50 per week;
(c)
the Worker's
duties remained the same whether he was paid $50 per week or $250
per week;
(d)
as per the ...
Schedule "A", the Appellant engaged other workers
under schemes similar to the Worker's employment
arrangement in 1995 and 1996;
(e)
the Worker's
rate of pay when employed full time was excessive;
(f)
the Worker's
employment with the Appellant was an artificial arrangement
designed to take advantage of the unemployment insurance benefits
system;
(g)
the Worker benefited
from the arrangement by receiving unemployment insurance benefits
while working for the Appellant and receiving a weekly pay of $50
to top up his income;
(h)
the Appellant
benefited from this arrangement by having its wage costs
subsidized by unemployment insurance benefits which enabled the
Appellant to pay lower weekly wages to the Worker of $50 for the
same services that cost the Appellant $250 per week during the
period in question;
(i)
the Appellant was
factually not dealing with the Worker at arm's
length."
DAVID
KEOUGH
"(a)
the Appellant was a
corporation duly incorporated under the laws of the Province of
Newfoundland on September 21, 1987;
(b)
at all relevant times the Appellant's issued shares were
owned by Dennis Vardy and his spouse, Amy Vardy;
(c)
the Appellant engaged the Worker to drive students from the
Newfoundland communities of Catalina and Little Catalina to and
from the Catalina Elementary School;
(d)
during the period in question the Worker drove the same routes
which took 25 minutes in the morning, 25 minutes at lunch time
and 25 minutes in the afternoon for a total of 1 hour and
15 minutes, 5 days a week;
(e)
the Worker was paid $60 per week with no vacation pay from
January 1, 1995 to March 31, 1995 and then $300 per week plus $12
vacation pay from April 2, 1995 to June 22, 1995;
(f)
the Worker was paid $60 per week with no vacation pay from
September 4, 1995 to March 29, 1996 and then $300 plus $12
vacation pay per week from April 1, 1996 to June 21,
1996;
(g)
the Worker was paid the same weekly amount even if the bus did
not operate due to inclement weather;
(h)
the Worker did not perform any additional or different duties in
the periods where he was paid $300 per week than he did in the
periods where he was paid $60 per week;
(i)
the Worker was not supervised when carrying out his
duties;
(j)
the Worker was free to substitute his personal services with that
of another driver without first obtaining permission from the
Appellant;
(k)
the Worker received his full pay even when he personally did not
drive the school bus every day during the week;
(l)
the Appellant was
only interested in the completion of the service, not in how it
was done or who performed the tasks;
(m)
the Worker took the school bus home each day and was responsible
for seeing that maintenance was done to the bus as
needed;
(n)
there was no contract of service between the Worker and the
Appellant."
[6]
In the alternative, he based his determination on the following
assumptions:
"(a)
while performing
services for the Appellant, the Worker was in receipt of
unemployment insurance benefits from January 1, 1995 to January
28, 1995 and from September 4, 1995 to May 15, 1996;
(b)
while in receipt of
unemployment insurance benefits the Appellant's pay was
reduced to $60 per week to perform the same services;
(c)
as per the ...
Schedule "A", the Appellant engaged other workers
under schemes similar to the Worker's employment
arrangement in 1995 and 1996;
(d)
the Worker's
rate of pay when employed full time was excessive;
(e)
the Worker's
employment with the Appellant was an artificial arrangement
designed to take advantage of the unemployment insurance benefits
system;
(f)
the Worker benefited
from the arrangement by receiving unemployment insurance benefits
while working for the Appellant and receiving a weekly pay of $60
to top us his income;
(g)
the Appellant
benefited from this arrangement by having its wage costs
subsidized by unemployment insurance benefits which enabled the
Appellant to pay lower weekly wages to the Worker of $60 for the
same services that cost the Appellant $312 per week during the
period in question;
(h)
the Appellant was
factually not dealing with the Worker at arm's
length."
ROY
GOOBIE
"(a)
the Appellant was a
corporation duly incorporated under the laws of the Province of
Newfoundland on September 21, 1987;
(b)
at all relevant times the Appellant's issued shares were
owned by Dennis Vardy and his spouse, Amy Vardy;
(c)
the Appellant engaged the Worker to drive students from the
Newfoundland communities of Jamestown, Portland, Brooklyn and
Lethbridge to and from the Musgravetown High School and
Elementary Schools;
(d)
during the period in question the Worker drove the same routes
which took 40 minutes in the morning and 35 minutes in the
afternoon for a total of 1 hour and 15 minutes work, 5 days a
week;
(e)
the Worker was paid $400 per week plus 4% vacation pay from
August 14, 1995 to November 17, 1995 and then $65 per week
without vacation pay from November 20, 1995 to June 28,
1996;
(f)
the Worker was paid $400 per week plus 4% vacation pay from
September 2, 1996 to October 11,1996;
(g)
the Worker was paid the same weekly amount even if the bus did
not operate due to inclement weather;
(h)
the Worker did not perform any additional or different duties in
the periods where he was paid $400 per week plus vacation pay
than he did in the periods where he was paid $65 per
week;
(i)
the Worker was not supervised when carrying out his
duties;
(j)
the Worker was free to substitute his personal services with that
of another driver without first obtaining permission from the
Appellant;
(k)
the Worker received his full pay even when he did not drive the
school bus every day during the week;
(l)
the Appellant was
only interested in the completion of the service, not in how it
was done or who performed the tasks;
(m)
the Worker took the school bus home each day and was responsible
for seeing that maintenance was done to the bus as
needed;
(n)
there was no contract of service between the Appellant and the
Worker."
[7]
In the alternative, he based his determination on the following
assumptions:
"(a)
the Worker was in
receipt of unemployment insurance benefits from December 25, 1994
to August 5, 1995 and when his claim expired he was put on the
Appellant's payroll full time as of August 14, 1995 at
full pay;
(b)
while performing
services for the Appellant, the Worker was in receipt of
unemployment insurance benefits from November 20, 1995 to June
12, 1996;
(c)
while in receipt of
unemployment insurance benefits the Appellant's pay was
reduced to $65 per week to perform the same duties;
(d)
as per the ...
Schedule "A", the Appellant engaged other workers
under schemes similar to the Worker's employment
arrangement in 1995 and 1996;
(e)
the Worker's
rate of pay when employed full time was excessive;
(f)
the Worker's
employment with the Appellant was an artificial arrangement
designed to take advantage of the unemployment insurance benefit
system;
(g)
the Worker benefited
from the arrangement by receiving unemployment insurance benefits
while working for the Appellant and receiving a weekly pay of $65
to top up his income;
(h)
the Appellant
benefited from this arrangement by having its wage costs
subsidized by unemployment insurance benefits which enabled the
Appellant to pay lower weekly wages to the Worker of $65 for the
same services that cost the Appellant $400 per week during the
period in question;
(i)
the Worker was factually not dealing with the Appellant at
arm's length."
[8]
Schedule "A", mentioned in the alternative assumptions,
is the same for appeals of the Payor and each of the Workers and
is as follows:
Schedule "A"
Employee No. 1
On the Payor's payroll for:
14 weeks at $50.00/week from January 1, 1995 to March 31,
1995;
12 weeks at $260.00/week from April 3, 1995 to June 23,
1995;
30 weeks at $50.00/week from September 4, 1995 to March 29,
1996;
12 weeks at $250.00/week from April 1, 1996 to June 28,
1996;
6 weeks at $100/week from September 2, 1996 to October 11,
1996.
Employee No. 2
On the Payor's payroll for:
13 weeks at $50.00/week from January 1, 1995 to March 31,
1995;
12 weeks at $250.00/week from April 3, 1995 to June 23,
1995;
30 weeks at $50.00/week from September 4, 1995 to March 29,
1996;
12 weeks at $250.00/week from April 1, 1996 to June 28,
1996;
6 weeks at $100/week from September 2, 1996 to October 11,
1996.
Employee No. 3
On the Payor's payroll for:
18 weeks at $75.00/week from September 2, 1995 to January 5,
1996;
24 weeks at $325.00/week from January 8, 1996 to June 21,
1996;
6 weeks at $250/week from September 2, 1996 to October 11,
1996.
Employee No. 4
On the Payor's payroll for:
14 weeks at $400.00/week from August 14, 1995 to November 17,
1995;
30 weeks at $65.00/week from November 20, 1995 to June 21,
1996;
6 weeks at $400/week from September 2, 1996 to October 11,
1996.
Employee No. 6
On the Payor's payroll for:
8 weeks at $60.00/week from January 1, 1995 to February 23,
1995;
17 weeks at $260.00/week from February 27, 1995 to June 23,
1995;
2 weeks at $40.00/week from September 4, 1995 to September 15,
1995;
27 weeks at $50.00/week from September 18, 1995 to March 29,
1996;;
12 weeks at $250/week from April 1, 1996 to June 21,
1996;
6 weeks at $100/week from September 30, 1996 to October 11,
1996.
Employee No. 7
On the Payor's payroll for:
12 weeks at $400.00/week from September 4 to November 24,
1995;
25 weeks at $50.00/week from November 27, 1995 to May 26,
1996.
[9]
The Workers Joseph and Violet L. Diamond admitted assumptions
(a), (b), (d) to (g) inclusive, (k) and (m) first above set out
under their names and assumptions (a) and (b) of the alleged
alternate determinations, but denied all other assumptions
hereinabove set out.
[10]
The Worker Keough admitted assumptions (a), (b), (d) to (g)
inclusive, (k) and (m) first above set out under his name and
assumptions (a) and (b) of the alleged alternate determination,
but denied all other assumptions hereinabove set out.
[11]
The Worker Goobie admitted assumptions (a), (b), (d) to (g)
inclusive, (k) and (m) first above set out under his name and
assumptions (a) and (b) of the alleged alternate determination,
but denied all other assumptions hereinabove set out.
PRELIMINARY
QUESTION
[12]
At the close of the case, the Court reserved judgment. The Court
was satisfied that the evidence supported contracts of service in
respect to each of the Workers and proceeded to consider the
alternate ground set out in the several Replies to the
Appellants' Notices of Appeal. Although the language used in
the several Replies is slightly different, the following excerpt
from Vardy Villa Limited and the Minister of National
Revenue (97-1420(UI)) is representative of the alternate
ground that appears in all Replies and reads as
follows:
"He submits, in the
alternative, that the Worker was not engaged by the Appellant in
insurable employment within the meaning of the Act
for the period in question as the said employment was excepted
employment within the meaning of paragraph 3(2)(c) of the
Act as in accordance with paragraph 251(1)(b) of
the Income Tax Act the Appellant and the Worker
were factually not dealing with each other at arm's
length."
[13]
In the case of Tupper v. M.R.N. (1999-2889(EI)) in which I
delivered judgment on February 11, 2000, the Minister based his
determination on the fact that no contract of service existed
between the Payor and the Worker. As in this case, the Minister
in his Reply attempted to support his determination on the
alternate ground of factual non-arm's length relationship. I
ruled that the Minister could not argue the alternate ground as
there was no such determination from which an appeal could be
brought.
[14]
Since I was not aware of this deficiency in this case at the
close of the trial, I invited counsel to make submissions to be
filed by November 30, 2000. Final briefs were received towards
the middle of December.
SUBMISSIONS
ON PRELIMINARY QUESTION
[15]
The Appellants basically agreed with my position that no such
determination was before the Court and relied on Tupper
(supra).
[16]
The Respondent submitted that the Court was required to review
all of the evidence adduced and determine if the employment in
issue was insurable and not concern itself with the reasons the
Respondent made his determination. He further submitted that in
any event a ruling was made by his Department in respect to the
employment of the Workers Keough and Goobie by the Payor, that it
was not insurable since the parties were not dealing factually
with each other at arm's length.
[17]
The Respondent further submitted that if the Court found that
there was a contract of service, it must then consider whether
the relationship created was one of arm's length.
[18]
The Court file indicates that the Respondent's Department did
make a ruling in respect of Roy Goobie on April 22, 1996 and in
respect of David Keough on April 16, 1996 that the
employment of both Workers was not insurable since they were not
dealing with the Payor at arm's length. Notice of this ruling
was sent to each of them and they were invited if dissatisfied
with the ruling to make an Application for a Determination of a
Question Regarding Insurable Employment. Both Workers filed
applications.
[19]
On November 18 and 20, 1996, some seven months later, both
Roy Goobie and David Keough received a response to their
application in the form of the Respondent's determination the
second paragraph of which read as follows:
"It has been decided
that this employment was not insurable for the following reason:
1) A contract of service did not exist under an
employer-employee relationship."
[20]
A fair and liberal interpretation of the relevant sections of the
Act must be that a ruling is a preliminary finding
designed to inform prospective applicants for benefits whether
their employment may qualify them for such benefits or not. If
dissatisfied with the ruling, they are invited to make
application for a determination that by the legislation
definitively and finally determines the status of their
employment.
[21]
The Respondent referred to a list of authorities in
support.
[22]
The first in chronological order was Canada (A.G.) v.
Doucet (1995) 172 N.R. 374 (F.C.A.). It would appear
from the report of that case, the Minister made a determination
that the engagement of the applicant was not insurable employment
and his stated reason was that the employment was excepted. The
Tax Court of Canada found that the employment was not excepted
and without further investigation set aside the Minister's
determination and found that the applicant's employment was
insurable.
[23]
The Minister appealed and submitted that even if the Tax Court
was correct and found that the employment was not excepted it
could not then conclude that the employment was insurable without
further investigation. In other words, finding the employment was
not excepted was not a finding that it was insurable. The Judge
of the Tax Court should have found the employment insurable and
given reasons in support of that finding.
[24]
The Federal Court of Appeal after reviewing all of the evidence
held that the employment was in fact excepted and reversed the
Judgment of the Tax Court. Marceau, J.A. who wrote the
judgement for the majority then said at
pages 379-380:
"I would add, although
it is not necessary to dispose of the action, that the second
ground of objection raised bv the applicant, one of law, also
appears to me to be valid The applicant is right to say that the
judge could not, based solely on the conclusion that the
employment was not excepted, at once aver that the employment was
insurable. In his written pleadings the Minister had indicated
that in any case, excepted or not, the employment on the basis of
which the respondent was claiming benefits was not one which
corresponded to the definition of s. 3(1)(a) of the
Act, in short that it was not an employment resulting from
a contract of service. The judge could not refuse to consider
this allegation on the ground that it was not mentioned by the
Minister in his initial reply to the Respondent telling him that
his employment with Exolab Inc. was not insurable. It is the
Minister's determination which was at issue before the judge,
and that determination was strictly that the employment was not
insurable. The judge had the power and duty to consider any point
of fact or law that had to be decided in order for him to rule on
the validity of that determination. This is assumed by
s. 70(2) of the Act [...] and s. 71(1) of the
Act [...] so provides immediately afterwards, and this is
also the effect of the rules of judicial review and appeal, which
require that the gist of a judgment, which is all that is
directly at issue, should not be confused with the reasons given
in support of it."
[25]
Subsection 70(2) of the Act reads as follows:
"On an appeal under
this section, the Tax Court of Canada may reverse, affirm or vary
the determination, may vacate, confirm or vary the assessment or
may refer the matter back to the Minister for reconsideration and
reassessment, and shall thereupon in writing notify the parties
to the appeal of its decision and the reasons
therefore."
[26]
Subsection 71(1) of the Act reads as follows:
"The Minister and the
Tax court of Canada have authority to decide any question of fact
or law necessary to be decided in determining any question or
reconsidering any assessment required to be determined or
reconsidered under section 61 or 70 and to decide whether a
person may be or is affected thereby, and, except as provided in
this Act, the decision of the Minister, or the decision of the
Tax Court of Canada, as the case may be, is final and binding for
all purposes of this Act."
[27]
I have reviewed the reasons in Doucet (supra) but
do not agree that the ratio in that case stands for the
proposition that the Respondent suggests. The Court is not saying
that the reasons are not important but that the Court must make a
determination that the employment is either insurable or not
insurable. Making a finding that the employment is not excepted
does not achieve that result. The fact that the employment is not
excepted does not mean that it is insurable within the provisions
of the Act. The Court said that the Tax Court was required
to continue its consideration and make a determination whether
the employment was insurable or not. It is that decision which
was followed in the other authorities referred to by the
Respondent, namely, Canada v. Schnurer Estate (C.A.),
[1997] 2 F.C. 545 and Barrette c. Canada (ministre du Revenu
national - M.R.N.) (C.A.F.), [1994] A.C.F. No. 499, no
d'appel A-187-93 both decisions of the Federal Court of
Appeal.
[28]
In Candor Enterprises Limited and the Minister of National
Revenue Docket: A-636-98 a judgment delivered at Ottawa on
December 15, 2000, the issue before the Federal Court of Appeal
was whether two periods of employment by Candor of a Mr. Pentz,
the husband of the sole shareholder of Candor, was
insurable.
[29]
In respect to the first period of employment, April 29, 1996 to
December 17, 1996, the Minister determined that the parties
were not dealing at arm's length and therefore the employment
was excepted. In the alternative he determined that the
employment was not insurable as there was no contract of service
and therefore no employer/employee relationship.
[30]
In respect to the second period January 6, 1995 to January 6,
1996, the Minister determined that the employment was not
insurable because there was no contract of service between the
company and the husband and therefore no employer/employee
relationship.
[31]
On appeal the Tax Court found that there was no employer/employee
relationship during each period of employment as there was no
contract of service and dismissed the appeal. The Federal Court
of Appeal confirmed the Tax Court judgment and dismissed the
appeal.
[32]
During the appeal before the Federal Court of Appeal, a number of
issues were argued with respect to subparagraph
3(2)(c)(ii) of the Act. Sharlow, J.A. who delivered
the judgment for the majority said at page 13 of the original
judgment:
"[32]
The existence of a contract of service does not determine the
insurability of employment in every case. Where the employee and
the employer are "related" to each other within the
meaning of the Income Tax Act, R.S.C. 1985, c.1, (5th supp), a
further question arises under subparagraph 3(2)(c)(ii)
..."
[33]
Continuing he said:
"[33]
There is no doubt that in this case Mr. Pentz and Candor were
"related" during the periods in question because he was
the spouse of Candor's sole shareholder. Therefore, if the
Minister had concluded that there was a contract of service, the
Minister was required to consider subparagraph 3(2(c)(ii). Or, if
the Minister had determined that there was no contract of
service, he could have determined in the alternative that if
there was a contract of service, by virtue of subparagraph
3(2)(c)(ii), the employment was "excepted employment":
M.N.R. v. Schnurer Estate, [1997] 2 F.C. 545, (1997), 208
N.R. 339 (F.C.A.).
[34]
This excerpt confirms my understanding of Doucet
(supra).
[35]
Sharlow, J.A. continued:
"[34]
In fact, the Minister's letter dated August 1, 1996 indicates
that the Minister made these alternative determinations with
respect to the period between January 6, 1995 to
January 6, 1996. However, the Minister's letter dated
May 5, 1997, which relates to the period between April 29 to
December 17, 1996, says nothing about subparagraph 3(2)(c)(ii).
For that period, subparagraph 3(2)(c)(ii) is raised for the first
time in the Minister's pleadings filed in the Tax Court in
response to the notices of appeal.
[36]
After canvassing the law as it relates to the duty and
responsibility of the Tax Court in considering an appeal where
the section is applicable and in particular the two most recent
cases of Légaré v. Canada (Minister of National
Revenue - M.N.R. [1999] 246 N.R. 176 (F.C.A.) and
Pérusse v. Canada (Minister of National Revenue -
M.N.R.), [2000] F.C.J. No. 310 (F.C.A.) which in my view
expands the duty and responsibility of the Tax Court as set out
in Tignish Auto Parts Inc. v. Canada (Minister of National
Revenue - M.N.R.), [1994] 185 N.R. 73 (F.C.A.) and
Canada (Attorney General) and Jencan Ltd. (C.A.), (1997)
215 N.R. 352.
[37]
Sharlow J.A. continued:
"[38] Regardless of
the characterization of the Minister's determination under
subparagraph 3(2)(c)(ii) or the approach to be taken by the Tax
Court in an appeal of such a determination, it seems clear that
the question of the application of subparagraph 3(2)(c)(ii)
is not properly before the Tax Court, unless the question posed
in that provision is first determined by the Minister. That
suggests, in my view, that the Minister should not raise
subparagraph 3(2)(c)(ii) for the first time in the pleadings
filed in response to an appeal to the Tax Court, because there
will have been no determination by the Minister from which an
appeal can be brought.
[39]
It would follow in this case, if the Tax Court Judge had found
that there was a contract of service, he should have allowed the
appeal with respect to the period April 29, 1996 to
December 17, 1996, because for that period there was no
Ministerial determination under subparagraph 3(2)(c)(ii) for him
to consider. As there was a Ministerial determination under
subparagraph 3(2)(c)(ii) for the earlier period, January 6,
1995 to January 6, 1996, the Tax Court Judge would have been
obliged to consider the appeal from the decision if he had found
that there was a contract of service.
[38]
The second authority advanced by the Respondent was M.N.R. v.
Schnurer Estate, (supra). In Schnurer, the
Minister had determined that there was no insurable employment
because there was no contract of service. In the alternative he
determined that the employment of the husband was excepted
because the parties were related and no arm's length
relationship existed.
[39]
The Tax Court found that because the grounds on which the
determination was made were mutually exclusive, the Minister must
have concluded that there was in fact a contract of service. The
Federal Court of Appeal applied Doucet (supra) and
found that the Tax Court could not find that a contract of
service was implied and had a duty to find as a fact that there
was a contract of service and then find whether the employment
supported by that contract was insurable. The Court referred the
matter back to the Tax Court to be tried by a different
judge.
[40]
Having found that there was a contract of service, I am now in a
position to consider whether the employment is insurable, there
being no other determination before me to consider.
FACTS
[41]
The Payor contracted with the Government of Newfoundland/Labrador
to convey children to schools by bus.
[42]
It hired bus drivers at various times and at various rates of
pay, specified the routes they were to follow and provided them
with buses. All of the Workers were employed during the periods
in question on the same basis in that at some time during those
periods, they worked for twelve consecutive weeks as
full-time employees at a full-time wage rate. At all
other times during those periods they were in receipt of
unemployment insurance benefits and continued to work but at a
rate of pay within that permitted by the Act for people
working and drawing benefits at the same time.
[43]
The rates of pay of the Workers differed. However all, with the
exception of Worker Goobie, were placed on full-time
employment during the months of April, May and June of the
periods in question and laid off for the summer. They were
rehired in September through the following April as part time
while in receipt of unemployment insurance benefits.
[44]
Worker Goobie was hired full time during the period August to
November because of special skills which he possessed, was then
hired par time until June while in receipt of unemployment
benefits and then presumably would have been rehired the
following August.
DECISION
[45]
All of the Workers testified and described their duties. Based on
that evidence it was clear to me that during both their full-time
and part-time work they were employed under contract of service.
They were bus drivers, were given routes to run and buses to
drive by the Payor and were under the control of the Payor as
much as they could possibly be.
[46]
In making this finding, I concluded as follows:
1.
In respect to the appeal of Vardy Villa Limited, Joseph and
Violet L. Diamond, their evidence demolished assumptions (i), (l)
and (n), that assumption (c) was only denied because the
routes were inaccurately described and that assumption (j) was
irrelevant. Assumption (h) may have been relevant if the Court
was considering a subparagraph 3(2)(c) issue but is
irrelevant in considering a 3(1)(a) issue since the only
thing that changed was the amount of the fixed periodic wage. The
pre-arranged working hours and specific directions of the
work to be done were still features of the employment.
2.
In respect to the appeal of Vardy Villa Limited and
Roy Goobie, their evidence demolished assumptions (i), (l),
(m) and (n), that assumption (c) was only denied because the
routes were inaccurately described and assumption (j) was
irrelevant. Assumption (h) is also irrelevant for the same reason
expressed in 1. above.
3.
In respect to the appeal of Vardy Villa Limited and
David Keough, their evidence demolished assumptions (i), (l)
and (n), that assumption (c) was only denied because the routes
were inaccurately described and assumption (j) was irrelevant.
Assumption (h) is also irrelevant for the same reason expressed
in 1. and 2. above.
[47]
In all of the above findings, the Payor and the Workers
established a prima facie case and the Respondent led no
evidence contra.
[48]
Had I had the jurisdiction to consider the alleged alternate
determination, I would have found that the employment was not
insurable as the Payor and the Workers were not in factual
arm's length relationships.
[49]
The Court finds that the Workers employment during the periods in
question was insurable, grants the appeals and vacates the
Respondents' determinations.
Signed at Rothesay, New Brunswick, this 5th
day of February 2001.
"M.F. Cain"
D.J.T.C.C.
COURT FILE
NO.:
97-1418(UI), 97-1420(UI), 97-1421(UI) and
97-1422(UI)
STYLE OF
CAUSE:
Vardy Villa Limited and M.N.R.
PLACE OF
HEARING:
Gander, Newfoundland
DATE OF
HEARING:
July 13, 2000
REASONS FOR JUDGMENT
BY: The Honourable Deputy Judge M.F.
Cain
DATE OF
JUDGMENT:
February 5, 2001
APPEARANCES:
Counsel for the Appellant: Greg K.
Pittman
Counsel for the
Respondent:
Caitlin Ward
COUNSEL OF RECORD:
For the
Appellant:
Name:
Greg K. Pittman
Firm:
Mills, Hussey & Pittman
Clarenville, Newfoundland
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE
NO.:
96-2493(UI)
STYLE OF
CAUSE:
Roy Goobie and M.N.R.
PLACE OF
HEARING:
Gander, Newfoundland
DATE OF
HEARING:
July 13, 2000
REASONS FOR JUDGMENT
BY: The Honourable Deputy Judge M.F.
Cain
DATE OF
JUDGMENT:
February 5, 2001
APPEARANCES:
Counsel for the Appellant: Greg K.
Pittman
Counsel for the
Respondent:
Caitlin Ward
COUNSEL OF RECORD:
For the
Appellant:
Name:
Greg K. Pittman
Firm:
Mills, Hussey & Pittman
Clarenville, Newfoundland
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE
NO.:
97-33(UI)
STYLE OF
CAUSE:
Violet L. Diamond and M.N.R.
PLACE OF
HEARING:
Gander, Newfoundland
DATE OF
HEARING:
July 13, 2000
REASONS FOR JUDGMENT
BY: The Honourable Deputy Judge M.F.
Cain
DATE OF
JUDGMENT:
February 5, 2001
APPEARANCES:
Counsel for the Appellant: Greg K.
Pittman
Counsel for the
Respondent:
Caitlin Ward
COUNSEL OF RECORD:
For the
Appellant:
Name:
Greg K. Pittman
Firm:
Mills, Hussey & Pittman
Clarenville, Newfoundland
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
97-34(UI)
STYLE OF
CAUSE:
Joseph Diamond and M.N.R.
PLACE OF
HEARING:
Gander, Newfoundland
DATE OF
HEARING:
July 13, 2000
REASONS FOR JUDGMENT
BY: The Honourable Deputy Judge M.F.
Cain
DATE OF
JUDGMENT:
February 5, 2001
APPEARANCES:
Counsel for the Appellant: Greg K.
Pittman
Counsel for the
Respondent:
Caitlin Ward
COUNSEL OF RECORD:
For the
Appellant:
Name:
Greg K. Pittman
Firm:
Mills, Hussey & Pittman
Clarenville, Newfoundland
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE
NO.:
97-263(UI)
STYLE OF
CAUSE:
David Keough and M.N.R.
PLACE OF
HEARING:
Gander, Newfoundland
DATE OF
HEARING:
July 13, 2000
REASONS FOR JUDGMENT
BY: The Honourable Deputy Judge M.F.
Cain
DATE OF
JUDGMENT:
February 5, 2001
APPEARANCES:
Counsel for the Appellant: Greg K.
Pittman
Counsel for the
Respondent:
Caitlin Ward
COUNSEL OF RECORD:
For the
Appellant:
Name:
Greg K. Pittman
Firm:
Mills, Hussey & Pittman
Clarenville, Newfoundland
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
97-1418(UI)
97-1420(UI)
97-1421(UI)
97-1422(UI)
BETWEEN:
VARDY VILLA LIMITED,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeals heard on common evidence with the
appeals of Roy Goobie (96-2493(UI)), Violet L.
Diamond (97-33(UI)), Joseph Diamond (97-34(UI))
and David Keough (97-263(UI)), on July 13, 2000, at
Gander, Newfoundland, by
the Honourable Deputy Judge M.F.
Cain
Appearances
Counsel for the
Appellant:
Greg K. Pittman
Counsel for the
Respondent:
Caitlin Ward
JUDGMENT
The appeals are allowed and the decisions of the Minister are
vacated in accordance with the attached Reasons for
Judgment.
Signed at Rothesay, New
Brunswick, this 5th day of February 2001.
D.J.T.C.C.
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