John T. Bart v. Minister of National Revenue, [1991] 1 CTC 2632, 91 DTC 884

Brulé, T.C.J.:—This is an appeal by the taxpayer from the Minister's reassessments with respect to the 1985 and 1986 taxation years whereby certain remuneration was treated as being received by the appellant in 1985 and not in 1986. In addition the Minister imposed a late filing penalty and arrears interest.

Facts

In May 1985 the appellant's services were retained by the University of Cape Town in South Africa to conduct a five-week course in July and August for the Graduate School of Business. A flat fee of $13,200(U.S.) was paid upon the conclusion of the contract.

The appellant is a tenured professor of business at the University of Windsor and has for a number of years carried on a consulting business conducting studies, lecturing and advising various clients on matters within his field of expertise.

Upon receiving the fee from South Africa the appellant deducted various expenses in connection with the trip and reported the balance for income tax purposes as income of the consulting business known as Windsor Management Programs. This business had a year end in January, hence the net income from South Africa was reported in the 1986 taxation year. The Minister reassessed on the basis that the total income of $13,200(U.S.) or $17,787(Can.) was a part of the appellant's 1985 income. The net amount was removed from the 1986 taxation year.

The basis of the reassessment was that the contract of employment was with the appellant personally and not with his consulting business.

The sole issue in the appeal is whether the contract was one of service or for service.

Appellant's Position

Counsel referred to five cases as follows:

Wiebe Door Services Ltd. v. M.N.R., [1986] 2 C.T.C. 200; 87 D.T.C. 5025

Bernice Bradford v. M.N.R., [1988] 2 C.T.C. 2359; 88 D.T.C. 1661

Joseph Floro v. M.N.R., [1988] 2 C.T.C. 2319; 88 D.T.C.1675

H. Lionel Rosen v. The Queen, [1976] C.T.C. 462; 76 D.T.C. 6274

Joseph Marotta, M.D. v. The Queen, [1986] 1 C.T.C. 393; 86 D.T.C. 6192

In this particular case there are four essential tests:

(1) Control—The Rosen and Marotta cases, supra, defined this and it was alleged that the appellant in this case was not subject to control as defined.

(2) Integration—The Wiebe Door decision, supra points out that in a contract of service work is done as an integral part of the operation, and such was not the case with Dr. Bart.

(3) Economic Reality—The appellant had to pay his own expenses, which could vary in amount, and as such he was not in a position to measure his gain before completing the contract.

(4) Specific Result Test—Here the university wanted something definite and paid a flat fee to the appellant to get this.

Upon considering all of the above counsel maintained that the appellant was an independent contractor and the appeal should be allowed.

Minister's Position

In addition to the Wiebe Door, Rosen and Marotta decisions, supra, reference was made to:

Moose Jaw Kinsmen Flying Fins Inc. v. M.N.R., [1988] 2 C.T.C. 2377; 88 D.T.C. 6099

Paul Hecht v. M.N.R., [1980] C.T.C. 2513; 80 D.T.C. 1438

Henry L. Molot v. M.N.R., [1977] C.T.C. 2170; 77 D.T.C. 111

Dr. William Emet Blatz v. M.N.R. (1951), 5 Tax A.B.C. 133; 51 D.T.C. 382

Jean Thibault v. M.N.R., [1983] C.T.C. 2211; 83 D.T.C. 182

It was pointed out that all of the above help in the determination that the appellant was operating under a contract of service and accordingly the appeal should be dismissed.

Analysis

The Wiebe Door case, supra, points out that there is a four in one test, not separate tests, and one must look at all the facts.

The first consideration here is that the letter of appointment of the appellant from the University of Cape Town was to the appellant personally at the university (Exhibit A-2) and not to Windsor Management Programs as was illustrated in a separate engagement. (Exhibit A-1)

While Wiebe Door, supra was described in the Moose Jaw Kinsmen Flying Fins Inc. case, supra as being the definitive authority on this issue the latter case decided by the Federal Court of Appeal said that the most cogent evidence was the employment contract. In the letter submitted as Exhibit A-2, Dr. Bart is described as a“ "Visiting Lecturer” for a definite period, to teach a definite subject to a definite group for a definite fee.

The Rosen case, supra, held that the appellant lecturer at various institution was in no different a position than an employee engaged for the purpose of delivering lectures.

In Marotta, supra, the Court in referring to control of the appellant said at page 399 (D.T.C. 6196):

The business in which he was principally engaged was the university’s and not his own and the work done was fully integrated within the teaching system or organization of the university. Finally, the work was not defined by or limited to a specified task or specific objective in any contractual sense.

The other cases of Hecht, Molot, Blatz, and Thibault, supra, involved teaching other than on a full-time basis. In each case, all of which resembled the present appeal, a claim for expenses was dismissed.

Alter applying the tests in Wiebe Door to the present facts the weight of evidence shows that the appellant's relationship with the University of Cape Town was that of an employee and not that of an independent contractor. Had the contract been with the consulting business of the appellant perhaps a different result may have followed.

Under the present circumstances the appeal is dismissed.

Appeal dismissed.