97-414(UI)
BETWEEN:
MANGIT K. MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of
Adar Mangat (97-426(UI)) on November 6, 1997, at
Vancouver, British Columbia, by
the Honourable Judge Gordon Teskey
Appearances
Counsel for the
Appellant:
Tim Clarke
Counsel for the
Respondent:
Elizabeth Junkin
JUDGMENT
IT IS
ORDERED AND ADJUDGED that the appeal be dismissed and the
assessments confirmed in accordance with the attached Reasons for
Judgment.
Signed at Ottawa, Canada, this 25th day of November 1997.
J.T.C.C.
97-426(UI)
BETWEEN:
ADAR MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of
Mangit K. Mangat (97-414(UI)) on November 6, 1997,
at Vancouver, British Columbia, by
the Honourable Judge Gordon Teskey
Appearances
Counsel for the
Appellant:
Tim Clarke
Counsel for the
Respondent:
Elizabeth Junkin
JUDGMENT
IT IS
ORDERED AND ADJUDGED that the appeal be dismissed and the
assessments confirmed in accordance with the attached Reasons for
Judgment.
Signed at Ottawa, Canada, this 25th day of November 1997.
J.T.C.C.
Date:19971125
Docket: 97-414(UI)
BETWEEN:
MANGIT K. MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
97-426(UI)
ADAR MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
TESKEY, J.T.C.C.
[1] Both Appellants herein appeal
assessments under the Unemployment Insurance Act (the
"Act"). Both appeals were heard on common
evidence.
Issue
[2] The only issue before me is
whether the Appellants are employees within the terms of the
Act and the regulation thereto. There is no dispute as to
the amount of the assessments herein, only as to the liability
thereof.
Facts
[3] Mangit K. Mangat is the wife of
Adar Mangat ("Adar"), she knows nothing and totally
relies upon her husband who looks after the whole taxi business
and her accountant to prepare her income tax return. Her
testimony cannot be accepted.
[4] For the purposes of these reasons,
I will treat the two Appellants as one entity. The assessments
are for unemployment premiums not collected and paid during the
years 1993, 1994 and 1995.
[5] The Appellants in each of these
years owned motor vehicles. During these three years, either one
or both had arrangements with White Rock Surrey Taxi Ltd.
("White Rock") and Surdell Kennedy Taxi Ltd.
("Surdell") (the "Companies").
[6] Adar and Parangit Dhaliwal
("Dhaliwal"), the present President of Surdell gave
conflicting testimony in part. Where there is a conflict, I
accept the testimony of Dhaliwal.
[7] The Appellants held shares in
White Rock and Surdell. In White Rock, each share allowed the
holder thereof the use of one taxi licence for a motor vehicle.
White Rock held some 35 taxi licences.
[8] In Surdell, one share allowed the
holder thereof to own one half of a motor vehicle, if the other
half owner of that motor vehicle held a share, then that motor
vehicle was entitled to a taxi licence. If a shareholder held two
shares, then that shareholder's motor vehicle would become a
licensed taxi. Surdell's licence allowed it to have 50
taxis.
[9] Both White Rock and Surdell
operated and functioned the same way. Both held taxi cab licences
and operated dispatching services, advertised their taxi services
both in the yellow and white pages of their respective telephone
books. Both owned the communication equipment, the taxi fare
meters and the top lights.
[10] The Appellants both paid to White Rock
and Surdell a monthly fee for their dispatching services and also
paid their prorated share of all advertising.
[11] In 1993 and 1994, both Appellants
arranged for their own insurance on their taxis. In 1995, fleet
insurance was purchased through the companies. Both Appellants
were responsible for all maintenance and upkeep of their vehicle
as well as the meters and radios.
[12] Both Appellants leased their vehicles
to drivers that had to have the approval of the companies.
The approval by the companies was only as to whether a proposed
driver was properly licensed.
[13] The drivers had to return the vehicle
at the end of each shift to the company offices full of fuel.
[14] Both Appellants filed their T1 income
tax returns with a statement of business activities showing gross
income and expenses such as fees, motor vehicle expenses,
accounting and dispatch fees.
[15] The Appellants arranged directly their
own deal with their drivers.
Analysis
[16] I am satisfied that the Appellants
herein are in the same position as 715341 Ontario Ltd. The
Federal Court of Appeal in 715341 Ontario Ltd. v. The Minister
of National Revenue, [1993] F.C.J. No. 1064 (Q.L.)
A-469-92when dealing with a factual situation for all
intents and purposes identical to the facts herein, held that the
owners of the taxi cabs were employers, pursuant to paragraph
12(1)(e) of the Unemployment Insurance Regulations.
Leave to appeal this decision to the Supreme Court of Canada was
refused.
[17] The Appellants herein are in the
business of owning and maintaining taxi cabs which they lease to
taxi drivers. Included with the vehicle rental is the services of
White Rock or Surdell. The taxi drivers get a complete package
from the Appellants when they lease a taxi cab from
them.
[18] I do not accept the Appellants'
argument that the Appellants were not the persons to be assessed
the premiums, interests and penalties.
[19] Paragraph 17.1 of the Unemployment
Insurance (collection of premiums) Regulations reads:
17.(1) The owner, proprietor or operator of a business
or public authority that employs a person in employment described
in paragraph 12(e) of the Unemployment Insurance
Regulations shall, for the purposes of maintaining records,
calculating insurable earnings and paying premiums under the
Act and these Regulations, be deemed to be the
employer of every such person whose employment is included in
insurable employment by virtue of that paragraph.
[20] Mr. Justice Mahoney of the Federal
Court Trial Division, sitting as an umpire under the Act
in circumstances similar to this case, held that the owner of the
motor vehicle was the proper person to be assessed in the
decision of John Witwicki v. The Minister of National
Revenue, released July 31, 1974.
[21] The Appellants were in business.
They purchased shares in White Rock and Surdell which was
necessary to obtain the use of a licence to affix to their
vehicles. They also agreed to pay a monthly fee to these
companies to provide dispatch services and obtain the benefit of
its advertising. White Rock and Surdell were the necessary
entities to allow persons owning a small number of cars to get
into the taxi business. They can be described as a co-operative
holding taxi cab licences.
[22] By buying shares in these companies,
the Appellants were able to convert an ordinary motor vehicle
into a taxi cab and by paying the monthly charges, the lessees of
their cabs had access to dispatch services and the benefit of
group advertising and a group fleet image. It was this whole
package the drivers leased from the Appellants.
[23] The fact that the drivers collected the
cash fares and turned over the visa charges to White Rock or
Surdell, as they had the contract with Visa, Master Card, etc.
was just another part of the services that these companies
provided to the Appellants which was passed on to the
drivers. The Unemployment Insurance Act gives the
employer the right to deduct from wages the employees'
portion of the unemployment insurance premiums. The fact
that the money is going in the opposite direction is
immaterial. The Appellants argue that White Rock and
Surdell should have been assessed. If this argument was valid,
both these companies would be in the same position. The
drivers collected the money, turned over the lease amounts to
either the companies and/or the Appellants. The Appellants
herein are the employers, pursuant to Regulations 17(1) and
12(e), who had a duty to collect from the drivers their
portion of the unemployment insurance premiums. This
obligation is easily enforced.
[24] The appeals are dismissed.
J.T.C.C.
Ottawa, Canada,
November 25, 1997.
COURT FILE
NO.:
97-414(UI)
STYLE OF
CAUSE:
Mangit K. Mangat and M.N.R.
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
November 6, 1997
REASONS FOR JUDGMENT
BY:
the Honourable Judge G. Teskey
DATE OF
JUDGMENT:
November 25, 1997
APPEARANCES:
Counsel for the
Appellant:
Tim Clarke
Counsel for the
Respondent:
Elizabeth Junkin
COUNSEL OF RECORD:
For the Appellant:
Name:
Tim Clarke
Firm:
Bull, Housser, Tupper
Surrey, British Columbia
For the
Respondent:
George Thomson
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE
NO.:
97-426(UI)
STYLE OF
CAUSE:
Adar Mangat and M.N.R.
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
November 6, 1997
REASONS FOR JUDGMENT
BY:
the Honourable Judge G. Teskey
DATE OF
JUDGMENT:
November 25, 1997
APPEARANCES:
Counsel for the
Appellant:
Tim Clarke
Counsel for the
Respondent:
Elizabeth Junkin
COUNSEL OF RECORD:
For the Appellant:
Name:
Tim Clarke
Firm:
Bull, Housser, Tupper
Surrey, British Columbia
For the
Respondent:
George Thomson
Deputy Attorney General of Canada
Ottawa, Canada
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