Mogan,
T.C.C.J.
(orally):—This
is
an
appeal
in
respect
of
the
1990
taxation
year
and
the
appellant
has
elected
the
informal
procedure.
The
issue
involves
certain
amounts
received
by
the
appellant
in
1990
in
connection
with
her
employment
at
a
place
called
Rocky
Mountain
Bed
and
Breakfast
in
the
town
of
Banff,
in
the
Province
of
Alberta.
The
issue
also
involves
certain
amounts
which
were
not
received
in
cash
by
the
appellant
but
were
the
value
of
board
and
lodging
which
she
enjoyed
by
reason
of
the
employment,
in
company
with
her
partner.
The
background
to
this
appeal
starts
in
May
of
1990
when
the
appellant,
in
company
with
her
boyfriend
Tony
Heidrich,
went
to
Banff.
They
took
up
residence
at
the
Rocky
Mountain
Bed
and
Breakfast
in
the
latter
part
of
May
1990,
and
they
lived
there
in
a
self-contained
suite
paying
rent
at
the
rate
of
$360
per
month
until
the
end
of
October
1990.
It
is
important
to
give
a
brief
description
of
the
premises
in
which
they
lived.
Apparently,
the
Rocky
Mountain
Bed
and
Breakfast
is
a
three-storey
building
or
a
house
in
which
there
is
operated
a
conventional
bed
and
breakfast.
It
must
be
of
some
considerable
size
because
the
appellant
says
they
could
accommodate
as
many
as
forty
guests.
She
said
there
was
some
accommodation
in
the
main
floor;
I
believe
it
was
eight
single
rooms
on
the
second
floor;
a
suite
on
the
third
floor,
and
then
attached
to
this
building
were
certain
other
suites
which
had
access
from
the
outside.
I
do
not
know
whether
they
were
basement
or
ground
level,
but
they
were
apparently
not
accessed
through
the
main
door.
They
were
what
I
would
call
peripheral
suites,
and
it
was
one
of
these
that
she
and
Tony
Heidrich
occupied
from
May
to
October
at
the
rate
of
$360
per
month.
She
described
it
as
a
self-contained
suite
with
a
bathroom,
kitchenette,
living
room
and
bedroom,
or
perhaps
the
living
room
and
bedroom
were
combined;
but
in
any
event
it
was
the
kind
of
suite
where
they
could
go
out
and
lock
the
door
and
leave
their
belongings
there,
confident
that
no
one
else
would
have
access
to
it.
Sometime
toward
the
end
of
October,
they
met
with
Mr.
Roland
Link
who
was
the
owner
of
the
bed
and
breakfast.
The
occasion
of
the
meeting
was
that
the
couple
who
had
managed
it
in
the
preceding
months
were
leaving.
The
appellant
was
offered
the
opportunity
of
managing
the
bed
and
breakfast
commencing
in
November.
It
is
not
clear
whether
Tony
was
part
of
the
offer
ut
subsequent
events
indicate
that
Mr.
Link
regarded
her
as
the
only
employee.
Accepting
the
management
brought
about
a
significant
change
in
their
living
accommodation.
They
had
to
give
up
the
suite
they
had
been
living
in,
and
they
moved
into
or
occupied
two
rooms
on
the
second
floor
of
the
main
dwelling,
one
of
which
they
used
as
a
bedroom
and
the
second
one
was
mainly
a
storage
room.
The
appellant
stated
that
in
the
new
arrangement
there
was
a
significant
lack
of
privacy
because
they
had
to
share
the
kitchen
with
other
guests
of
the
bed
and
breakfast;
and
they
had
to
share
the
bathroom
with
other
guests.
They
were
on
call
24
hours
a
day
because
guests
could
arrive
in
the
middle
of
the
night.
They
were
required
to
assist
the
guests.
In
particular,
she
mentioned
that
they
could
have
guests
from
overseas
who
were
not
familiar
with
the
phone
system.
They
would
have
to
show
them
how
to
use
the
telephone.
Considering
the
accommodation
alone,
there
is
no
question
that
they
lost
a
real
element
of
privacy
in
taking
on
this
employment
because
they
had
to
be
available
to
receive
new
guests
and
to
provide
services
to
guests
who
were
already
installed
at
the
bed
and
breakfast.
They
were
paid
cash
remuneration
of
$1,609
for
November
and
December
1990.
The
appellant's
counsel
stated
that
the
amount
was
not
in
dispute
but
he
argues
that
the
allocation
of
that
amount
is
in
dispute
because
all
of
it
has
been
assessed
in
the
hands
of
the
appellant.
Also,
an
amount
in
respect
of
board
and
lodging
has
been
assessed
in
her
hands
as
an
employee
benefit
at
the
rate
of
$700
per
month
for
November
and
December.
The
$1,400
for
board
and
lodging
plus
the
$1,609
which
was
the
cash
compensation
received
make
a
total
of
$3,009.
That
is
the
total
amount
which
the
Minister
added
to
the
appellant's
reported
income
for
1990.
She
has
objected
and
it
is
the
subject
of
this
appeal.
The
allocation
of
the
$1,609
is
in
issue.
Also,
the
value
of
the
board
and
lodging
is
in
issue.
The
appellant’s
counsel
argues
that
the
value
of
$700
per
month
for
the
appellant
and
Tony
is
excessive
and
some
lower
amount
would
be
more
appropriate.
The
appellant
described
the
duties
which
they
were
obliged
to
perform
at
the
premises.
They
are
the
kind
of
duties
one
might
expect
from
persons
managing
a
bed
and
breakfast
facility.
They
prepared
breakfast
each
morning
for
the
guests;
breakfast
was
served
between
the
hours
of
7:30
and
10:00.
As
soon
as
the
guests
left,
they
changed
all
the
sheets
in
the
various
bedrooms;
they
swept
the
floors;
cleaned
the
washrooms;
and
did
the
laundry
consisting
primarily
of
sheets
and
towels.
The
appellant
said
that
when
she
and
Tony
took
on
this
assignment,
they
had
an
informal
agreement
that
they
would
split
the
income
50/50
because
they
looked
on
the
duties
as
being
performed
50/50
although
she
had
already
obtained
some
outside
employment.
She
worked
in
a
movie
theatre
in
Banff
as
a
ticket
seller
sometimes
on
a
Sunday
afternoon
and
other
times
in
the
early
evening.
She
would
work
only
brief
periods
selling
tickets
just
before
the
movie
began,
but
she
did
have
that
outside
employment.
She
also
had
a
job
with
a
travel
agency.
According
to
one
of
the
exhibits,
the
appellant
is
qualified
with
a
diploma
to
work
as
a
travel
agent.
There
was
entered
as
Exhibit
A-5
a
letter
from
Gloria
Folden
certifying
that
the
appellant
worked
certain
hours
at
a
travel
agency
in
Banff
and,
specifically,
the
hours
she
worked
from
November
4
to
December
29,
1990
were
140
hours
according
to
this
letter.
That
period
covers
exactly
seven
weeks.
Therefore,
she
was
working
at
the
travel
agency
an
average
of
20
hours
per
week,
according
to
my
calculations.
In
any
event,
the
appellant
states
that
with
these
two
outside
jobs
which
brought
in
some
income
she
had
to
be
away
from
the
bed
and
breakfast
for
certain
hours
each
week.
This
meant
that
Tony
performed
more
than
50
per
cent
of
the
duties
in
connection
with
the
bed
and
breakfast,
and
so
they
changed
their
arrangement.
Although
they
started
out
50/50,
she
said
at
some
point
they
changed
their
arrangement
to
two-thirds/one-third,
and
she
kept
only
one-third
of
the
cash
compensation
paid
by
the
owner
and
two-thirds
went
to
Tony.
Tony
may
have
received
two-thirds
of
the
cash
compensation
from
the
bed
and
breakfast
at
some
time
when
they
were
there
but
that
evidence,
standing
alone,
is
not
conclusive
with
respect
to
any
issue
in
this
appeal.
The
appellant
had
these
two
outside
jobs
at
the
movie
theatre
and
travel
agency.
Also,
Mr.
Link
(the
owner
of
the
bed
and
breakfast)
appears
to
have
regarded
only
the
appellant
as
his
employee
because
all
the
cheques
from
Rocky
Mountain
Bed
and
Breakfast
for
salary
were
made
payable
to
her.
She
would
either
cash
them
and
give
a
portion
of
the
proceeds
to
Tony
or
she
might
have
deposited
them
in
their
joint
account.
Her
evidence
was
that
in
the
town
of
Banff
she
had
her
own
bank
account,
and
she
and
Tony
had
a
joint
account.
It
appears
that
the
appellant
already
had
the
two
outside
jobs
when
she
took
on
the
bed
and
breakfast
for
Mr.
Link
on
November
1,
1990
because
Exhibit
A-5
lists
the
hours
she
worked
at
the
travel
agency
from
October
7,
1990
to
January
12,
1991,
and
her
1990
income
tax
return
reports
$890
from
the
Banff
Cinema
Partnership
as
income
earned
in
1990.
The
amounts
which
she
paid
to
Tony
in
1990
may
have
been
a
domestic
recognition
of
the
fact
that
he
was
assisting
her
in
at
least
one
of
her
three
jobs
or
she
may
have
been
providing
some
spending
money
for
her
mate.
There
was
no
evidence
that
Tony
was
employed
anywhere
in
1990
or
that
he
did
any
work
other
than
helping
at
the
bed
and
breakfast.
Tony
may
have
been
a
"kept
man”.
He
did
not
testify
in
this
appeal
and
the
appellant
stated
that
he
went
abroad
immediately
after
they
left
Banff
in
August
1991.
When
the
appellant
left
the
bed
and
breakfast
in
the
summer
of
1991,
she
claimed
unemployment
insurance.
There
was
put
to
her
in
cross-examination
her
own
application
for
unemployment
insurance
benefits
(Exhibit
R-1).
The
application
was
dated
August
15,
1991.
In
that
application,
she
names
Rocky
Mountain
Bed
and
Breakfast
under
question
17
as
the
"Business
name
and
mailing
address
of
your
last
employer”.
I
assume
that
her
jobs
at
the
cinema
and
travel
agency
had
ended
before
her
job
at
the
bed
and
breakfast
or
she
might
have
listed
more
than
one
last
employer.
Therefore,
it
appears
that
she
ended
up
working
only
at
Rocky
Mountain
Bed
and
Breakfast
after
the
other
two
part-time
jobs
ended.
There
was
no
evidence
as
to
whether
she
continued
to
pay
Tony
two-thirds
of
the
cash
compensation
from
the
bed
and
breakfast
after
she
gave
up
the
other
two
outside
jobs.
Certain
other
questions
in
Exhibit
R-1
were
answered
as
follows:
Question
20:
What
was
your
job
there?
Manager
—
cook,
clean,
register,
banking,
laundry,
etc.
(l
assume"banking"
was
the
deposit
of
proceeds
from
renting
the
rooms
to
the
various
guests.)
Question
26:
What
were
your
normal
earnings
before
deductions?
(that
is
your
gross
earnings)
$1,800
per
month.
Question
27:
How
many
hours
and
days
did
you
normally
work
each
week?
Eight
to
12
hours,
and
five
days
a
week.
Question
37
[read]
“Are
you
attaching
a
record
of
employment
for
each
employer
for
whom
you
worked
in
the
last
52
weeks?"
She
ticked
the"
Yes"
box
but
it
stated
beside
the
"No"
box,
“If
no,
complete
question
38.”
She
completed
question
38
giving
the
name,
address
and
telephone
number
of
employers
for
missing
records.
That
is
filled
in
as
“Rocky
Mountain
Bed
and
Breakfast”
and
she
showed
herself
working
there
from
November
1,
1990
to
the
14th
of
August,
1991,
indicating
that
she
filed
this
application
the
day
after
her
employment
there
ended.
Under
uestion
40,
“Give
reasons
for
missing
records
of
employment
and
efforts
made
to
obtain
them”,
she
stated
“
Contract
work,
not
insurable".
Her
counsel
argued
that
that
was
an
honest
statement
and
that
she
probably
regarded
the
work
as
not
insurable
because
there
were
no
source
deductions
withheld
by
the
owner
of
the
bed
and
breakfast.
When
the
cash
compensation
was
paid,
he
did
not
withhold
any
amounts
in
respect
of
unemployment
insurance
premiums,
and
probably
other
amounts
like
Canada
Pension
Plan
or
income
tax.
Counsel
for
the
respondent
in
argument
relied
on
the
appellant's
answer
to
question
26
because,
when
she
was
asked:
“What
were
your
normal
earnings?"
and
she
answered
“$1,800
per
month”
she
did
not
take
into
account
any
allocation
to
Tony.
She
simply
recorded
the
total
earnings
as
hers.
By
the
time
she
ended
her
employment
at
the
bed
and
breakfast
in
the
summer
of
1991,
the
aggregate
of
cash
paid
plus
the
value
of
board
and
lodging
may
have
been
in
the
range
of
$1,800
a
month.
But
the
main
point
that
counsel
made
is
that
when
the
appellant
applied
for
unemployment
insurance
benefits,
she
gave
no
indication
that
her
earnings
from
the
bed
and
breakfast
were
in
any
way
shared
with
Tony.
It
appears
now
from
the
evidence
that
when
the
appellant
claimed
unemployment
insurance
benefits,
someone
from
the
unemployment
insurance
office
went
back
and
did
an
audit
of
Rocky
Mountain
Bed
and
Breakfast,
and
determined
that
these
amounts
had
been
paid
without
any
source
deductions.
Exhibit
A-6
is
a
letter
from
Mr.
Link
to
the
appellant.
Although
this
letter
was
entered
under
objection
from
the
respondent
on
the
basis
that
it
was
hearsay,
the
appellant
went
out
of
her
way
to
identify
the
letter
as
coming
from
Mr.
Link,
a
person
she
knew
well
as
her
employer.
She
recognized
and
identified
the
signature
and
the
handwriting
as
his.
I
regard
the
letter
as
important
in
this
proceeding
and
more
detrimental
to
the
appellant
although
it
does
go
both
ways.
Because
of
its
importance,
the
letter
is
set
out
in
its
entirety.
It
is
dated
February
21,
1992
and
the
reference
to
"Jane"
is
to
Jane
Hutch,
the
preceding
manager
of
the
bed
and
breakfast.
Dear
Brenda:
Hope
this
finds
you
well.
Jane
dropped
by
and
we
had
a
nice
visit
—
caught
up
on
the
news.
While
you
and
Tony
were
working
here,
I
thought
you
were
aware
of
the
implications
of
working
as
private
contractors
with
no
deductions.
Most
people
would
rather
work
this
way
if
possible
—
I
know
I
would
rather.
At
any
rate
—
as
you
probably
now
know—
no
deductions
—
no
benefits
(such
as
UIC).
I
tried
to
indicate
this
to
you
over
the
phone
when
you
called.
You
filed
for
UIC
anywa
—
I
was
audited
—
you
got
your
T4
slips
and
now
this
record
of
employment,
and
you
now
owe
me
the
employees
contributions
indicated
on
your
T4
slips.
That
totals
$772.37.
Thank
you
for
taking
care
of
this.
Roland
The
appellant
put
this
letter
in
to
emphasize
the
comments
at
the
beginning
of
the
second
paragraph
where
the
author
says:
While
you
and
Tony
were
working
here,
I
thought
you
were
aware
of
the
implications
of
working
as
private
contractors
with
no
deductions.
I
accept
counsel's
submissions
that
the
clear
implication
from
those
words
is
that
he,
the
employer,
is
looking
at
the
two
of
them,
“you
and
Tony”
as
private
contractors,
the
two
of
them
together.
The
letter
indicates
that
Mr.
Link
new
that
the
two
of
them
were
doing
duties
in
and
around
his
bed
and
breakfast,
but
it
is
the
last
part
of
the
letter
which
I
find
goes
against
the
appellant:
I
tried
to
indicate
this
to
you
over
the
phone
when
you
called.
You
filed
for
UIC
anyway
—
I
was
audited
—
you
got
your
T4
slips,
and
now
this
record
of
employment,
and
you
now
owe
me
the
employees
contributions
indicated
on
your
T4
slips.
That
totals
$772.37.
Thank
you
for
taking
care
of
this.
The
appellant
did
not
attempt
to
contradict
these
last
statements
of
Mr.
Link.
She
claimed
unemployment
insurance.
She
needed
a
record
of
employment
to
get
the
benefits.
Mr.
Link's
language
in
the
last
part
of
the
letter
leads
me
to
conclude
that
he
regarded
the
appellant
as
the
only
employee.
He
used
phrases
like”
our
T4
slips”,
"you
now
owe
me"
and
thank
you
for
taking
care
of
this”.
He
did
not
say
"you
and
Tony”.
He
looked
only
to
her
to
reimburse
him
for
the
employee's
contributions
to
unemployment
insurance
premiums.
There
is
no
apostrophe
before
or
after
the
"s"
in"
employees"
to
indicate
whether
he
was
thinking
of
one
or
two
persons
but
his
other
language
indicates
that
he
was
thinking
only
of
her.
Also,
she
did
the
banking
to
deposit
the
amounts
collected
from
the
guests
at
the
bed
and
breakfast
because
that
was
one
of
the
duties
she
put
down
in
her
application
(Exhibit
R-1).
The
inference
I
draw
from
Mr.
Link’s
letter
is
supported
by
the
words
the
appellant
herself
used
in
her
notice
of
objection
for
1990
(Exhibit
R-5).
Again,
because
of
the
importance
which
I
place
on
this
document
in
the
appellant's
own
words,
I
shall
set
it
out
in
its
entirety.
Her
notice
of
objection
is
dated
July
31,
1992,
long
after
the
events
of
her
employment
in
Banff
and
long
after
she
had
received
the
T4.
She
knew
what
the
implications
were
and
she
stated:
I
was
employed
with
the
Rocky
Mountain
Bed
and
Breakfast
for
the
months
of
November
and
December,
1990.
I
was
not
paid
$3,009
and
strongly
disagree
with
the
assessment
of
$1,400
for
housing,
board
and
lodging.
As
part
of
my
duties
for
employment,
I
was
required
to
live
on
the
premises
as
my
work
involved
24-hour
per
day
attention.
The
provision
of
food
was
not
included
in
the
salary
agreed
upon,
and
I
purchased
my
own
food
at
my
own
expense
without
reimbursement.
There
was
a
lack
of
privacy
due
to
24-hour
per
day
attention
that
was
required.
There
was
continuous
imprompt
[sic],
sporadic
calls
and
drop-in
accommodation
seekers.
I
have
no
private
kitchen
or
private
bathroom.
I
had
to
attend
to
guest's
requests
at
any
hour
of
the
day
or
night
and
my
private
quarters
were
often
used
by
guests
of
the
owner
of
the
Rocky
Mountain
Bed
and
Breakfast
on
my
days
off.
My
area
did
not
have
a
separate
entrance
and
could
not
be
locked.
In
addition,
out
of
the
salary
that
I
was
paid,
only
one-half
was
paid
to
me.
I
was
employed
on
a
full-time
basis
with
another
individual
and
the
salary
we
were
paid
was
a
total
salary
for
both
of
us.
I
generally
received
half
of
this
salary
each
month.
The
thrust
of
this
statement
is
that
she
was
employed
there;
the
duties
were
hers;
and
her
only
reference
to
sharing
is
at
the
end
where
she
said:
.
.
.the
salary
we
were
paid
was
a
total
salary
for
both
of
us.
I
generally
received
half
of
this
salary
each
month.
That
last
statement
is
in
conflict
with
the
evidence
she
gave
in
Court
when
she
said
that,
after
they
had
determined
that
her
outside
duties
took
more
of
her
time,
Tony
received
two-thirds
and
she
got
one-third.
In
a
case
like
this,
when
there
is
a
conflict
in
evidence
between
what
the
appellant
has
stated
in
writing
at
an
earlier
time
and
what
she
said
in
the
witness
box,
I
am
inclined
to
put
more
emphasis
on
the
written
word
than
the
spoken
word,
particularly
when
the
spoken
word
is
so
self-serving.
It
is
very
self-serving
to
the
appellant
to
come
into
Court
and
start
to
push
all
this
income
away
from
her
and
say:
"It
is
not
mine;
most
of
it
belonged
to
Tony”.
This
last
statement
in
Exhibit
R-5
where
she
said
that
she
received
half
of
the
salary
each
month
is
a
direct
contradiction
of
her
testimony
in
Court
that
she
split
it
most
of
the
time
two-thirds/one-third.
Also,
her
answer
to
question
26
in
her
application
(Exhibit
R-1)
for
unemployment
insurance
benefits
is
a
direct
contradiction
of
her
testimony
in
Court.
If
the
appellant's
testimony
in
Court
was
true,
then
she
was
at
least
reckless
and
perhaps
untruthful
in
her
statements
when
applying
for
unemployment
insurance
benefits
and
claiming
that
she
received
$1,800
per
month.
But
if
her
statement
in
Court
was
not
true,
then
she
was
careful
and
truthful
when
applying
for
benefits.
I
am
asked
to
believe
the
self-serving
statement
in
Court
which
repudiates
the
written
statement
in
the
application.
I
am
not
inclined
to
do
that.
The
appellant
was
careless
in
reporting
her
income.
In
the
year
under
appeal,
she
omitted
about
$4,000
of
income
when
reporting
approximately
$11,000.
She
missed
$4,000
from
All
World
Travel
when
she
filed
her
return
and
picked
it
up
only
when
she
received
the
T4.
And
of
course
she
missed
totally
her
share
of
the
income
from
the
bed
and
breakfast.
If
I
were
to
give
her
the
maximum
benefit
of
doubt
(and
I
am
not
prepared
to
do
so),
she
would
have
received
in
cash
from
the
bed
and
breakfast
at
least
$533
(being
one-third
of
the
$1,600).
On
her
own
testimony,
however,
she
received
more
than
that
because
she
and
Tony
started
out
splitting
the
cash
received
50/50,
and
it
was
only
later
that
the
split
was
changed
to
two-thirds/one-third.
Therefore,
she
totally
omitted
the
cash
compensation
from
her
full-time
work
in
November
and
December
at
the
bed
and
breakfast.
From
the
statements
in
her
notice
of
objection,
she
regarded
herself
as
a
twenty-four
hour
per
day
employee
of
the
bed
and
breakfast.
Her
omission
of
that
income,
however
small,
is
inexcusable
for
1990.
She
knew
from
the
way
she
phrased
the
notice
of
objection
that
she
was
a
full-time
employee
of
the
bed
and
breakfast.
On
the
whole
question
of
splitting
with
Tony
the
cash
earnings
from
the
bed
and
breakfast,
I
find
against
the
appellant.
Mr.
Link
looked
only
on
her
as
his
employee.
To
the
extent
that
Tony
helped
out
at
the
bed
and
breakfast,
he
did
so
as
the
boyfriend
of
the
appellant
and
not
as
an
employee
of
Mr.
Link.
If
Tony
had
no
regular
or
part-time
employment
(and
there
is
no
evidence
that
he
did),
then
helping
out
at
the
bed
and
breakfast
was
the
least
he
could
do
for
the
woman
with
three
jobs
(bed
and
breakfast,
travel
agency
and
cinema)
who
was
keeping
him.
Tony's
assistance
at
the
bed
and
breakfast
was
a
domestic
matter
between
the
appellant
and
himself.
This
conclusion
is
supported
by
the
appellant's
own
statements
in
her
application
for
unemployment
insurance
benefits
(Exhibit
R-1)
and
in
her
notice
of
objection
(Exhibit
R-5).
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