Charles L Braive v. Minister of National Revenue, [1981] CTC 2790, 81 DTC 748

Guy Tremblay:—This case was heard in Montreal, Quebec, on March 12 and 13, 1980. Following the written submissions, the case was taken under advisement on November 7, 1980.

1. The Point at Issue

The issue is whether the appellant, a production manager, sound editor or assistant director in film production, for the taxation years 1974, 1975 and 1976 was self-employed and therefore could claim the following expenses:

1974 — $3,884.00

1975 — $3,648.64

1976 — $3,716.11

The respondent’s contention is that the appellant was an employee who had been employed on a casual basis by several firms involved in the motion picture production and therefore could be allowed no deductions.

2. The Burden of Proof

2.01 The burden is on the appellant to show that the respondent’s assessments are incorrect. This burden of proof results especially for several judicial decisions, including the judgment delivered by the Supreme Court of Canada in Johnston v MNR, [1948] CTC 195; 3 DTC 1182.

2.02 In the same judgment, the court stated that the assumptions of fact on which the respondent based the assessments or the reassessment are also deemed to be correct until the appellant gives evidence to the contrary.

In the present case, subparagraphs (a) to (I) of paragraph 6 of the reply to notice of appeal detailed these assumptions of fact. They read as follows:

6. In re-assessing the Appellant in respect of his 1974, 1975 and 1976 taxation years, the Respondent relied inter alia, upon the following assumptions of fact:

(a) During the relevant taxation years, the Appellant had been employed on a

casual basis by several firms involved in the motion picture production:

1974

Westminster Films

SDA Productions

The Group Productions Ltd.

International Cinemedia Centre Ltd.

Sebert Prod. Ltd.

Sultan Films Ltd.

1975

Falby Blum Toronto

Onyx Films Ltd.

Cinevideo Inc.

Canadian Broadcasting Corp.

Concordia University

The Group Prod. Ltd.

Westminster Films Ltd.

1976

Fairmount Films Ltd.

Canadian Broadcasting Corp.

The Group Prod. Ltd.

The 25th Frame Ltd.

Projex Films Ltd.

Projections Inc.

(b) The Appellant worked for the said firms on specific film projections either as production manager, sound editor or assistant-director;

(c) The Appellant performed the functions of his work under the direct supervision of the firms mentioned above and under the direct control of the producer and film director in charge of each of the specific film projects;

(d) The majority of the above-mentioned firms prepared and remitted to the Appellant T-4 and T4A slips for the purpose of the drawing up by the latter of his income tax returns;

(e) The majority of the above-mentioned firms provided the Appellant with the technical material necessary for the performance of his functions;

(f) Furthermore, the premises for the performance of the said functions were provided by the firms mentioned above;

(g) The Appellant was paid by the said firms on a flat rate basis;

(h) The Appellant was not entitled to the profits arising out of the marketing of the films produced neither was he bearing responsibilities for the losses eventually incurred;

(i) The Appellant was not entitled to, neither did he acquire any right, title or interest of any nature with regard to property rights or copyrights in the films produced;

(j) The Appellant was required to perform personally the functions of his employments

and could not delegate to third parties the execution of the work;

(k) The Appellant was required to be at his employers’ disposal during the time scheduled for the performance of the work;

(l) The firms mentioned above had preferred calls upon the Appellant’s time and efforts when the contracts of employment were standing.

3. The Facts

3.01 The appellant, who was born in 1949, describes his work as “free lance” following the items “name of present employer”, in his 1976 income tax return.

3.02 In his testimony, he describes his function as “free lance production manager, assistant manager and sound editor”. He described at length the functions of a production manager and assistant director and their responsibilities to the producer and to the director:

When I am engaged as a production manager, I am required to coordinate, facilitate, oversee in the preparation of the production unit, all the off-set logistics — the set being where you are shooting and off-set for everything else — the day-to- day production decisions, the locations — both for the preparation of the shooting and the actual shooting itself — the budget and the personnel.

Usually the first thing I do when I am engaged as a production manager is to prepare a budget. This can be a very long and complicated procedure, especially if it is for a large feature film and the sums of money are large too. The budget on a feature film might be revised many times before you arrive at a final budget. My main responsibility as a production manager is to bring the film in on budget.

I also oversee the preliminary research and survey of all the shooting locations, the business arrangements for those locations. We have a standard contract form that we use for these locations, but the negotiations and the obligations are usually different for each place, and as a production manager — me — is the person who negotiates those contracts. My main concern, of course, is to stick to my budget because in my budget I have allocated money for each location that I have to follow.

I hire and contract all production personnel and technicians. This includes the camera crews, the sound crews, the electricians, drivers, wardrobe crews. I negotiate and sign all these contracts myself on behalf of the production company.

I oversee the preparation of the production and as it relates to the needs of the different departments. There are usually about ten (10) or twelve (12) departments on a feature film. These can include production, direction, camera, lighting, sound, wardrobe, makeup, publicity editing, accounting and the art department.

The production manager manages the business affairs of all these departments. Even if it is, say, a commercial which takes one day to shoot, this is like a feature film in microcosm, you have a camera crew, and a sound crew, etcetera, etcetera.

The production manager coordinates arrangements for the transportation and the housing of the cast, the crew and the staff, all the time attempting to respect the budget that I have drawn up for those.

The production manager authorizes overtime for the casting crew; prepares the weekly cost report, in conjunction with the production accountant, that goes to the producer. These are very important as they tell you how well you are achieving your goal of respecting your budget.

The production manager has tools that he uses. I use a telephone; I use a car; I use my budget forms and my equipment catalogues; and most of all I use my intelligence and my experience.

When you are looking for a location that is supposed to be an authentic nineteen thirty-seven (1937) barber’s shop, or I am looking for someone — a choreographer

— to choreograph a Charleston routine, I’ve got to be sharp because I have to know where to find those things right at the tips of my fingers. There are always several other freelance production managers who probably do know and I’m in competition with them because they could be hired for the job too.

I have always worked as a professional freelance production servicer, specialist. I never worked on staff at any production company that I worked for. In fact in the years in question, I refused an offer of staff employment at one of the firms I freelanced for.

The freelance world is a very competitive market. In Montreal there are maybe ten (10) to fifteen (15) or more professionals who work as a production manager, and at least the same amount who work as an assistant director. In Toronto and Vancouver there are many more of each.

The Canadian film industry is a very small industry. We speak with Toronto every second day, every day very often. If someone does not do a good job and is fired on a film, the film world is so small you hear about it right away. That man’s reputation is seriously damaged and he may not work for quite a while.

I compete in this market with these other freelancers for everything I do. The choice of which film I do is always my own personal choice, though. I am never obliged to accept any work. There may be a dichotomy, but I will explain.

A producer will announce his projects a long time before they actually start. The producer will announce maybe four (4), five (5) feature-film projects because he needs to acquire distribution deals, and financing deals and stuff like that. Now, maybe only one (1) or two (2) of these projects will ever actually start shooting and maybe none. I have worked on films that went through weeks of preparation, and actors were brought into town, wardrobe fittings were done and the pictures never even started shooting. They fell through just before they were going to start.

So you never really know until you start shooting which film you are going to do. So what you have to do is: you have to hustle every project that you hear of, you have to constantly attempt to be the person requested, the person demanded by the producer, because you never really know what’s going to happen; right? Even with the contract, sometimes a film may not happen. You know, you may have a contract and it may fall through at the last minute.

In the years in question, nineteen seventy-four (1974), seventy-five (75) and seventy-six (76), the Canadian film industry was much smaller, and we are experiencing a boom now. In the years in question it was much smaller and it was hard to get work. You really had to chase everything that you heard of.

Now, the assistant director. When I work as an assistant director I do the administrative and production functions as the producer’s representative. I’m the on-the- set expeditor who is responsible for maintaining coordination among crew categories and actors in order to maintain the pace required to shoot the film on schedule.

It is impossible to shoot a dramatic film without an assistant director. The industry slang for a production manager is P.M., and the industry slang for assistant director is A.D., so you might hear us talking about that.

Every form of dramatic film making, from commercials to theatrical films, television features, documentary dramas, documentaries, dramatic shorts, has to have an assistant director. Wherever there are actors involved you need an assistant director because an assistant director is intimately involved with the actors. It is standard practice. That’s everywhere in the world, every film industry.

I told you already that the production manager produces and manages the films. Well, the A.D., the assistant director is the chief administrator of the film. Film production is the classic case of money and time. The production manager’s main responsibility, his main worry is money, the budget; and the assistant director’s main responsibility is time, the schedule.

Among my other responsibilities are administrating and organizing every aspect of the day-to-day shooting, communicating the wishes and needs of the director to every department of the production, and conversely, communicating the needs of the production to the director, informing every department of the production, what the A.D. needs to shoot, what I need to shoot the scenes as they are scripted and on schedule.

My responsibility to the producer as the production manager is to shoot the film on schedule without excessive overtime. My responsibility to the director is to ensure that every element he needs to create his vision is provided for in the right place and at the right time and to establish and to maintain the atmosphere that allows the director to be creative. How I do this is entirely my own choice.

There are three (3) stages of film production. The first stage is called pre- production, that is the preparation. This usually takes as long as the actual shooting of the film.

The actual shooting of the film is called production. It can take anywhere from one (1) day for a commercial to eight (8) to ten (10) weeks for a feature film. Then you have post-production, which is the editing and the music and all that sort of stuff.

The production manager works on pre-production, production and post-production. The assistant director works on pre-production and production. (SN 5 to 11 inclusively)

3.03 The appellant also described, in more detail, the work done by an assistant director when he has a film script:

The first thing that an assistant director does when he has a film script, he does what is called a breakdown. A film is not shot in sequence, Your Honour. A film may start in this courtroom and then may proceed to a restaurant in the story and then finish in this courtroom.But when the production company would come to shoot the movie, they would shoot the starting scene and the ending scene at the same time so you would come here only once, you see.

So a film is shot totally out of sequence and it is in the editing that all the pieces are put together. So it is the assistant director who decides where all these pieces are, how they fit together and how they should be there when you want to shoot the movie. It’s totally my decisions.

I take that script and I do what is called a breakdown. This is what a breakdown looks like, and this is the breakdown for that scene that I showed you. You will read in that breakdown . . .

If you read this, Your Honour, you will see that there are many things that I request In that breakdown that are not written anywhere in that film script. I will say: blast shield for a camera; because there are explosions and I know from my experience that I need protection to protect the camera crews from the explosions. It is a scene that is supposed to be in World War I.

I sit down with that script and each scene I put down on a breakdown page, I extract all the actors, the props, the wardrobe, the continuity of the actors — where he changes clothes and where he wears the same clothes. This is something that I know out of my own experience that I do; right?

Once that breakdown is completed, I take this breakdown and put it on what we call a production board, which I would like to show you too. This is a production board. Each scene . . .

Each scene as you can see is described by place and by actor and stuff like that.

Now, what I do with that — that’s one of the assistant director’s main tools — is I move each scene around and I put together days of shooting and eventually weeks of shooting. What I do on each day is my choice. I decide.

The producer may ask me: How long will it take to shoot this movie? And I tell him. I do breakdown and then I do a board and then I tell him: This movie will take you eight (8) weeks; this movie will take you nine (9) weeks. Out of my own experience and my own intuition I know how long it takes to shoot a certain sequence, if the sequence is a page, two pages, three pages, etcetera.

This is like a primitive computer more or less, but all the computing Is going on in my head. There are programmes in America where this thing is done by computer. We don’t use them yet.

Now, this represents one day. Three scenes this day, one scene that day, carrying over on another scene, three scenes here, three, six or seven scenes here, this is in my own mind and I know how much I can shoot and how much I should do in one day.

I will tell the producer: This movie will take you ten (10) weeks to shoot. The producer may then tell me: I’ve only got enough funds to shoot for nine (9) weeks. What do I do? Well, I go back to it again. I try and reschedule and I see if there Is any way creatively that I can put two days together, scenes together, to shoot it in nine (9) weeks. I may be successfull, I may not. It may be I can only do it in nine and a half (9 /2) weeks, and I tell the producer: The best I can do is to tell you it's going to take nine and a half (9 /2) weeks to shoot.

Usually what happens then is he cuts the script. The scene that are too long he will take them out and forget about them. But that’s not always the case. Some times a producer will try to raise more money, may try to compromise something, etcetera, etcetera. There are many solutions to that type of problem.

Now, everybody in the film has to know what they are doing every day. And a film crew may be anywhere from . . . a commercial may be twenty (20) people, to a feature film it may be sixty (60), seventy (70), or eighty (80), ninety (90) people on a film crew. Everyone has to know what you are doing every day. The prop men have to know in order to have the right props there; I have to know in order to have the right actors there, the right extras; the special effects’ men in order to have their equipment; the wardrobe people in order to have the wardrobe, etcetera, etcetera, etcetera. (SN 12 to 16)

3.04 The appellant also explained that the assistant director is even the mediator with stars:

The assistant director is quite often the mediator with stars. We work with a lot of stars now, even in that time. Stars can be very sensitive people. They have their own demands and peculiarities and stuff like that.

For instance, at that period of time in nineteen seventy-six (1976), I worked on a picture called Angela, and the star was Sophia Loren. And she was very nice but she would not shoot after 4:30. She was forty-two (42) years old, she didn’t want people to photograph close-ups of her because she felt old. She told me in pre- production: You can’t shoot a close-up of me after four-thirty. So I knew this every day. It’s my job to tell the director all day long: Do Sophia’s close-ups now, she’s leaving at four-thirty and we won’t get a close-up of her. The director may not like that, and in fact, he didn’t like it, and quite often he didn’t want to do that and we had to leave her close-ups till the next morning.

If Miss Loren would get upset with the director or with the cameramen, I would be the person who would mediate it. If she was upset with the makeup girl, for instance, I would be the person to go to the makeup girl and straighten out the makeup girl, because I want my stars, my actors to be happy for the director to allow him to work. (SN 29 and 30)

3.05 In the years involved, the appellant worked for the following different firms described in Exhibit R-1 pages 1, 2 and 3 with the following appropriate information.

CHARLES L. BRAIVE

	Liste des contrats
Année 1976
Nom	Montant	Feuillets	cote
Paramount Films Ltd.	$6,097.63	T-4	J
	“Employment contract
Canadian Broadcasting Corp.	$4,110.34	T-4	Vide
	$525.95		Cote H
The Group Prod. Ltd.	$239.20	Aucun	Vide
		feuillet	cote B
The 25th Frame Ltd.	$724.50	Aucun	N/A
		feuillet
Projex Films Ltd.	$880.00	Aucun	N/A
		feuillet
Projections Inc.	$360.24	Aucun	N/A
		feuillet
Année 1975
Nom	Montant	Feuillets	Cote
Falby Blum Toronto	$1,092.00	T-4	N/A
	Aucune réponse
	déménagé
Onyx Films Ltd.	$312.00	T-4	F
	“Production manager”

Cinevideo Inc.	$3,281.20	T-4	G
	2nd Assistant
	Director: aurait
	été régi par une
	convention collective,
	selon employeur
Canadian Broadcasting Corp.	$4,110.00 (T-4)	T-4	H
	$27.50 (T-4A)	T-4A
	contrat écrit:
	decision d’un
	juge-arbitre
Concordia University	$50.00	T-4A	I
	Lettre en date du
The Group Prod. Ltd.	$639.60	T-4A	Vide
			cote B
Westminster Films Ltd.	$700.00	Aucun	N/A
		feuillet
Année 1974
Nom	Montant	Feuillets	Cote
Westminster Films	$1,250.00	T-4	N/A
	aucune réponse
	déménagé
SDA Productions	$352.38	T-4A	A
	Lettre en date du
	10 janvier 1978
The Group Productions Ltd.	$395.20	T-4A	B
	$1,785.00	T-4A
	—Lettre en date du
	17 novembre 1977:
	“Mr. Braive is a
	supplier who invoiced
	us not an employee.”
	—Conversation
	téléphonique Mlle
	Helene Gagnon, sec.
	Assistant producteur
International	$1,575.00	T-4A	C
Cinemedia Centre Ltd.	—“Freelance film
	editor” (3 mai 1979)
	—“Invoice contract”
	(17 novembre 1977)
Sebert Prod. Ltd.	$946.60	Aucun	D
		feuillet
Sultan Films Ltd.	$1,275.00	Aucun	E
	Lettre en date du	feuillet
	3 janvier 1978

3.06 The appellant filed two contracts (Exhibit A-3) he made with the International Cinemedia Center Ltd. in 1974. The contracts are pre-printed documents which the parties fill in and sign.

In the first one, one can read “Cinemedia desires to retain the services of the Contractor as production manager for the film entitled ‘Snow Geese’ for a period from June 10 to June 21”.

In the other one, it says “Cinemedia desires to retain the services of the contractor to complete the sound editing of eight (8) filmstrips; this is to include the selection and placing of music and effects, placing of commentary and final mix. The work to be completed by March 1”.

3.07 In the latter case, the appellant’s remuneration provided was “$100.00 Per filmstrip for a total of $800.00 for the work”.

The payments are:

A. $50.00 per filmstrip upon completion of the placing of the commentary and the selection of the music and effects.

B. $50.00 per filmstrip upon completion of the final mix.

In the former case, the payments are to be made “upon submission of an invoice upon completion of the work”.

3.08 Paragraphs 3 to 8 of the said contract read as follows:

3. Cinemedia shall pay such reasonable travelling and living expenses necessary for the fulfilment of the assignment as Cinemedia deems reasonable and which have the authorization of Cinemedia.

4. Cinemedia may, at its discretion, advance to the Contractor amounts in respect to travelling and living expenses for which the Contracor shall fully account to Cinemedia and any amount thereof in excess of the amounts payable by Cinemedia to the Contractor under Section 3 shall be recovered out of any moneys payable by Cinemedia to the Contractor, or may be otherwise recovered by Cinemedia from the Contractor.

IT IS MUTUALLY AGREED BETWEEN THE PARTIES HERETO, that:

5. Cinemedia shall not be liable for any damage to the person or property of the Contractor arising out of his employment under this contract.

6. In the event the assignment covered by this contract is curtailed, postponed or cancelled, this contract may be terminated at once by Cinemedia, in which case payment to the Contractor shall be based upon the value of work done as of the date of termination, such amount to be mutually agreed upon by the Contractor and Cinemedia.

7. Payment of the sum or sums of money provided in Clause 2 above shall vest in Cinemedia or in its clients or assignees in perpetuity all unrestricted world rights in all materials made pursuant to this contract for the purposes of motion pictures and/or publications stage presentations, radio broadcasts, television, videotapes or any other medium or purpose.

8. The Contractor guarantees that he will hereafter not produce or be involved in the production for himself or for any film producer or distributor, any film, television show, or videotape, so similar in nature to the picture, named herein that it would appear, to be based upon the treatment or script or any part of the picture mentioned above.

3.09 Another contract made in November 1975 was filed as Exhibit A-4. It was signed with Cinevideo Inc. The services of the appellant were retained as “assistant’réalisateur” for $65 per day “sur la période du 4 novembre 75 au 20 décembre 75”.

This agreement written in French contains the same clauses as those cited above from Exhibit A-3.

3.10 As Exhibits A-1 and A-2, the appellant filed several invoices sent to production firms and statement cheques received from them. Those documents speak about “services”, “professional services” or “freelance services”.

Ordinarily, the appellant received the total amount without deduction. In one case, however, among the Exhibits A-1 and A-2 the deductions concerning income tax, unemployment insurance, etc. were made.

3.11 Dr Don Haldane, president, director and producer of Westminster Films testified that during the years 1974 and 1975 he engaged the appellant in his capacity of production manager and assistant director:

Q. In that capacity and at that time, what did you consider his status to be? I’m referring to the question of employee versus a self-employed person.

A. Definitely a self-employed person. I might mention that from the point of view of Westminster Films, we have about six (6) people on staff — secretaries, receptionists, office managers, a couple of producers — and everybody else is freelance. In other words, we only hire the people for the term of the production and then we let them go. It is on a contract basis.

Q. By the word “freelance”, what specifically do you mean?

A. They are only hired, contracted for a specific job, and they are available for other jobs with other companies. But we search out or perhaps hire them as a result of previous knowledge, of their abilities and capabilities. (SN 59)

3.12 Concerning the control of the production managers and the assistant directors, Mr Haldane also testified:

Q. Now, at the time when you engaged Mr. Braive, what kind of control was he subject to?

A. Well, say, if I were producing the show, he would naturally report to me what he had been doing, just as in any other profession. There has got to be someone who is the boss, and the others, no matter what their responsibility, no matter how important their responsibility, they still are responsible to a person at the top. And in that sense . . . in other words, he had a lot of freedom within his own job but he still did report to me, or I should say production managers do generally, you know

Q. Would you say, as opposed to reporting, you were actually controlling his activities? Were you indicating what he should do? Was he taking your orders?

A. Oh no, no. I mean, as a professional craftsman in that area, he did his job. He only reported to me to make me aware of the progress he was making, but within that category of being a production manager he did his own job and had his own freedom to operate as he would as a production manager.

I hope I’m making myself clear. (SN 61)

Now, in the matter of the proprietary rights of the film, or the rights of the film produced, did Mr. Braive acquire any rights on these films once it was finished and produced?

A. No. (SN 71)

Mr Haldane also testified that in the case of a film being a flop, the investors would support the loss, but not the appellant as production manager, etc.

He testified that reciprocally if a film was a success, the investors would earn the profits. It would be possible but not probable for the production manager or the assistant director to receive a “piece of the action”. (SN 73, 74 and 75)

On that point, an agreement signed on October 25, 1976, between the appellant and Parimont Films Inc. (Exhibit R-1, page 9) has this clause:

Credits: The producer will, wherever possible, give a credit to the technicians, depending on the sponsor producer understanding.

3.13 Mr Robert William Duckworth, a chartered accountant, who has been “in the film business for eighteen (18) years as a production accountant, controller, vice-president of finance . . .” testified as follows:

Q. In that capacity, based on your experience, how would you classify the status of production managers and assistant directors?

A. Well, in my experience, production managers and assistant directors have always been what we considered in the field as self-employed freelance personnel.

Q. How many films have you yourself worked on?

A. Series and films, probably in the neighbourhood of a hundred and twenty (120), a hundred and thirty (130).

Q. Were there any exceptions in any of those films with your status as you know it?

A. Yes, there were. There are times I guess in any business where someone is contracted as a full-time permanent staff member who would possibly be a production manager or a first assistant director. But he would be hired on that basis. He would be offered a contract for an indefinite period of time as opposed to most films where it is understood at the beginning that he is hired or engaged — they are interchangeable words — at the beginning of the production and at the end of the production he will be finished; terminated. And most people in the business tend to prefer to be that way. They don’t wish to be staff members.

Q. Is there any particular reason for that?

A. Well, because most people like the variety of the job, the challenges, the opportunity to work with other people as opposed to being stuck in one position where you are working nine to five. (SN 89 and 90)

3.14 Mr Robert Barclay is a film director and president of the Directors’ Guild of Canada. He gave explanations about that organization:

The Directors’ Guild of Canada is an organization primarily of freelancers. Initially it was directors and it expanded about thirteen years ago when the assistant directors joined the Directors’ Guild. The assistant directors and the production managers have been members of the Guild for thirteen years. And about seven years ago the art directors asked to join the Guild and we now have quite a group of art directors.

Q. Now, as the head of the Guild and as a director yourself, what status would you, in your experience, say that these people hold or feel that they hold?

A. By status do you mean .. .

Q. Employee or self-employed people.

A. There’s no question that they think of themselves as being freelancers, and what’s more, we had a series of meetings in Toronto with the Directors’ Guild of America and a similar organization in England. And I only wish that they could be here at the moment because throughout the world it’s generally held that people doing this kind of job are freelancers. And certainly in the feature-film industry, there is no question of it, they are freelancers.

And this is true in all other countries in the world with the possible exception of the iron-curtain countries where in effect the artist is treated like the sports figure as a member of the army or whatever. You might consider that staff, I don’t know. (SN 98 and 100)

3.15 According to Mr Barclay, the producer of a film in theory has the authority from the investors to fire the director, the assistant director, the production manager and the art director.

In reality, however, it is not so easy because he then has to pay them. He cited the case of a director in a film who was paid $700,000 on a budget of $6,000,000:

Just one question to summarize the relationship between the producer and the other people.

Q. Can we say that the producer hires and hence can fire the director, the assistant director, the producing manager, the art director and the assistant manager? There is no assistant manager . . .

A. No, assistant director.

Q. Assistant director?

A. Yes.

Q. And a producer has this authority from the investors? Can we say that?

A. Yes.

Q. We can say that. And when the problem comes from the producer, the director and the assistant director, they have nothing to say?

A. Well, I just gave you an illustration of how the director, the assistant director and so on, coped with a producer that the actor found impossible to be compatible with. They certainly do. As professionals the producer would be very unwise to pay the amounts of money he pays to these different people and not take the benefit of their advice. As the producer he would be paying money for advice that he then doesn't use. I mean, it doesn’t make sense.

Q. When he fires or he has to fire those persons, he has to pay them?

A. In the case of the director, most directors in feature films now have contracts whereby if for any reason they are fired. Other than, you know, whatever some of the reasons are that you can be fired for, like moral behaviour that’s unbecoming, or whatever . . . but if a producer fires that director, generally speaking, all the money that he is to be paid . . . and in the case of this film in Vancouver the director is being paid $700,000 to make one movie. So this is a considerable portion of a $6,000,000 budget. To fire that person and to pay him all the money before he has done the job doesn’t make a lot of sense economically or any other way. (SN 116 and 117)

3.16 Mr Donald Buchsbaum, assistant director and production manager, who had been in the film industry for 20 years, testified in the same sense as Mr Barclay, Mr Duckworth and the appellant, concerning the functions and the status of the production manager, assistant director, etc.

3.17 Mr Buchsbaum also explained that it is possible for the producer to be hired and the production manager to be kept:

When the producer engages or contracts a production manager or a director or whatever, he has to engage those people with the permission, if you will, of the completion guarantor and the distributor, who are the people in place to protect investors’ money. And I’ll get to your answer in a moment, because I’m just trying to continue . . .

When these people come to .. . and in fact the completion guarantor has on his staff production managers, as I am on the staff of a completion guarantor company. I, as the production manager, survey and analyze the production manager’s work on another picture. Therefore, in fact, the production manager and the assistant director, if a picture is going wrong, can indeed inform the completion guarantor, who may, because of his contractual arrangements with the production company, fire the producer and keep the production manager on because the production manager has in his administrative role, and as a person responsible to the budget, informed the completion guarantor. And the producer then may be fired. Thusly, there may arise a situation indeed where the production manager, in consultation with the assistant director and the director, may find themselves firing the producer. (SN 120 and 121)

and

Q. Am I correct to say that production manager and assistant manager acquire no proprietary rights in the films produced?

A. In a classic sense the answer is no . . . (SN 138)

3.18 The appellant explained in cross-examination that:

. . . I have provided production services for companies whose head office was in Toronto, whose main business was in Toronto and who had no Montreal office whatsoever. While I worked for these companies, while I provided services for these companies, my office, in my home that I had to pay expenses on was temporarily where the production was based from. Out of my office I hired cars, I hired crew people, I made deals for camera equipment, etcetera, etcetera, etcetera, etcetera. It is not in the contracts anywhere, you will not see it written anywhere, but it is expected, it is understood in our business that that is the way we work. (SN 161 and 162)

The appellant continued:

Wherever I work, for whichever production company I work, I normally — unless in the cases I have mentioned, and I can cite them for each year — normally the company will provide me with an office at their place of business, whatever. But that does not mean . . . I still have my office at my home that I work in, and in fact even though this says this in the C.B.C. contract, I did in fact work where I was staying in Toronto, worked as directly applicable to the production of the film .. . telephoning actors . . . if I’m at their office till six or seven o’clock at night, and I haven’t been able to phone an actor, when I leave I’m still responsible for phoning that actor, no matter where I am. I keep phoning to him from restaurants, I keep phoning him when I go to eat, and I’ll phone him from a bar, whatever. Until I speak to that actor I must continue phoning him. And even when I go home I must continue trying to get in touch with this man. (SN 162 and 163)

3.19 The employees were not paid by the appellant. The latter, however, explained that sometimes when films were flops, he might suffer damage to his reputation:

Q. We mentioned the case that if the film is a flop you may suffer some credit, you may lose a bit of credit, but monetarily speaking it is rather the investors and producer who will suffer the loss; am I correct on this point?

A. There are two things you should understand here. First of all is, as I was trying to explain yesterday, when you are trying to find work, when you are hustling work, I may be interested in a project that I may accept to work on, and in so doing, and quite often it happens, I turn down other projects. I say no, I turn down another film to do one film.

Then I start on that movie and it either gets stopped before it starts shooting, it gets cancelled, it never starts shooting sometimes. What happens then? I can’t go back and take the other film that I have turned down because it’s too late. They may already be shooting by then. So I have suffered a loss.

I could conceivably . . . maybe a third film could come along and say: We need you, we would like you, let’s discuss this, etcetera, but in the meantime I may have already, and it has happened, turned down work on other films to accept work on a film that subsequently may never even start. (SN 163 and 164)

3.20 The quantum of expenses of $3,884 in 1974, $3,648.64 in 1975 and $3,716.11 in 1976 are not in dispute.

4. Law — Cases of Law — Analysis

4.01 Law

The main sections of the Income Tax Act involved in the present case are section 9, paragraph 18(1 )(a) and section 248 (definitions of words “Business” and “Employment”). They read as follows:

9 (1) Subject to this Part, a taxpayer’s income for a taxation year from a business or property is his profit therefrom for the year.

(2) Subject to section 31, a taxpayer’s loss for a taxation year from a business or property is the amount of his loss, if any, for the taxation year from that source computed by applying the provisions of this Act respecting computation of income from that source mutât is mutandis.

(3) In this Act, “income from a property” does not include any capital gain from the disposition of that property and “loss from a property” does not include any capital loss from the disposition of that property.

18 (1) In computing the income of a taxpayer from a business or property no deduction shall be made in respect of

(a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property;

248 (1) In this Act,

“business” includes a profession, calling, trade, manufacture or undertaking of any kind whatever and includes an adventure or concern in the nature of trade but does not include an office or employment;

“employment” means the position of an individual in the service of some other person (including Her Majesty or a foreign state or sovereign) and “servant” or “employee” means a person holding such a position;

4.02 Cases of Law

The counsel for both parties referred the Board to the following cases and articles or books of doctrine:

Doctrine:

1. La Responsabilité Civile Délictuelle, Jean-Louis Baudoin, Les Presses de l'Université de Montréal, Montréal 1973;

2. Traité pratique de la responsabilité civile délictuelle, André Nadeau et Richard Nadeau, Wilson & Lafleur Limitée, Montréal, 1971;

Jurisprudence:

3. Dr W H Alexander v MNR, [1969] CTC 715; 70 DTC 6006;

4. Balfour v Bell Telephone Co of Canada, [1915] 34 OLR 149;

5. F J Blackwell v MNR, [1949] Ex CR 391;

6. La cité de Sherbrooke v J W Roy Limitée, [1966] BR 239;

7. The City of St John v Donald, [1926] SCR 371;

8. D F Compton v MNR, 39 Tax ABC 139; 65 DTC 578;

9. Curley v Latreille, [1920] 60 SCR 131;

10. Davies v Braithwaite, 18 TC 198;

11. Gould v Minister of National Insurance, [1951] 1 All ER 368;

12. Wolfgang Hauser v MNR, [1978] CTC 2728; 78 DTC 1532;

13. Hill-Clarke-Francis Ltd v Northland Groceries (Quebec) Ltd, [1941] SCR 437;

14. G Isaac v MNR, [1970] Tax ABC 405; 70 DTC 1285;

15. Johnson v Clark & Son, [1912] OWN 202;

16. Charles A Latimer v MNR, [1977] CTC 2128; 77 DTC 84;

17. Lemay Construction Ltée v Dame Poirier, [1965] BR 565;

18. Donald B MacDonald v MNR, [1974] CTC 2204; 74 DTC 1161;

19. Montreal v Montreal Locomotive Works, [1947] 1 DLR 161;

20. No 122 v MNR, 9 Tax ABC 202; 53 DTC 399;

21. No 361 v MNR, 16 Tax ABC 34; 56 DTC 478;

22. Performing Right Society, Limited v Mitchell and Booker (Palais de Danse), Limited, [1924] 1 KB 762;

23. Quebec Asbestos Corporation v Couture, [1929] Ex CR 166;

24. Ready Mixed Concrete (South East) Ltd v Minister of Pensions, [1968] 1 All ER 433;

25. H Lionel Rosen v HMQ, [1976] CTC 462; 76 DTC 6274;

26. Re: V O Phillips Sons Limited, [1923] OWN 321;

27. Stevenson, Jordan and Harrison Ltd v MacDonald & Evans, (1952) 1 TLR 101;

28. McPherson v MNR, NR-91, March 24, 1976, page 8;

Digests:

29. The Canadian Encyclopedic Digest (Ontario), 3rd Edition, Vol 20, Carswell:

30. Halsbury’s Laws of England, 3rd Edition, Vol 25, Butterworths.

4.03 Analysis

4.03.1 The point in dispute is whether the appellant was an employee during the years involved or whether he was self-employed and therefore entitled to deductions for various business expenses (para 3.20).

The Income Tax Act does not give guides or measures determining when one is an employee or when one is self-employed.

Those guides, however, are expressed by doctrine and by numerous judgments in civil law, in common law and tax law. In fact, in all of these fields, the guides are all the same.

In each case, however, it is a question of facts. One guide can have more importance in one case and less in another, and where another guide, because of the facts, can be more significant to assess the reality of the situation.

4.03.2 In their written submissions, the counsel for both parties referred to some of the cases and to the doctrine as it appears from the list in paragraph 4.02.

The guides to which the courts mostly referred are (some of them are part or facet of another one):

(1) Right to control;

(2) Right to dismiss;

(3) 3 The nature of the task;

(4) 4 The freedom of action given;

(5) The magnitude of the contract amount;

(6) The manner in which it is to be paid;

(7) Ownership of tools;

(8) 8 Chances of profit;

(9) 9 Risks of loss; and

(10) Integration to payer’s business.

4.03.3 Some passages by the authorities cited by the learned counsel for both parties are as follows:

(1) Halsbury’s Laws of England, 447 states:

. in general the relationship imports the existence of power in the employer not only to direct what work the servant is to do, but also the manner in which the work is to be done.

(2) Halsbury’s Laws of England, 448 states:

Whether or not a particular contract is a contract of service is a question of fact, depending upon the terms of the engagement, the method of remuneration, and

the power of controlling and dismissing the worker, although none of these factors is by itself conclusive.

(3) Halsbury’s Laws of England, 452 states:

contract for work and labour or a contract for services, the employer is entitled to direct what work is to be done, but not to control the manner of doing it . . .

(4) The Canadian Encyclopedic Digest (Ontario), 90-25 states:

To distinguish between an independent contractor and a servant, the test which is generally applied is whether or not the employer retains the power, not only of directing what work is to be done, but also of controlling the manner of doing the work.

(5) The Canadian Encyclopedic Digest (Ontario), 90-25 states:

An independent contractor is one who undertakes to produce a given result, but so that in the actual execution of the work he is not under the order or control of the person for whom he does it, and may use his own discretion in things not specified beforehand.

(6) McCardie, J in Performing Right Society, Limited v Mitchell and Booker (Palais de Danse), Limited, [1924] 1 KB 762 at 767:

The nature of the task undertaken, the freedom of action given, the magnitude of the contract amount, the manner in which it is to be paid, the powers of dismissal and the circumstances under which payment of the reward may be withheld, all these bear on the solution of the question.

(7) In the same judgment, McCardie, J cited this passage at 765-766 with approval of The Canadian Encyclopedic Digest (Ontario) at 90-28:

. .. the question whether a man be a servant or an independent contractor is often a mixed question of fact and law. If, however, the relationship rests upon a written document only, the question is primarily one of law. The contract is to be construed in the light of the relevant circumstances.

(8) McCardie, J proceeds to discuss the criteria indicated by the authorities for determining whether the relationship of the employed to the employer is that of independent contractor or of servant, and then says that:

The final test, if there be a final test, and certainly the test to be generally applied, lies in the nature and degree of the detailed control over the person alleged to be the servant. This circumstance is, of course, only one of several, but it is usually of vital importance.

(9) Jean-Louis Baudoin in La Responsabilité Civile Délictuelle, 232, no 348, describes the distinction between a contract of enterprise and lease of service as:

Différence avec le louage de services — La louage d’industrie au contrat d’entreprise présente des differences notables avec le louage de services. L’entrepreneur en effet exécute le travail confié a ses risques, de la manière dont il l’entend, en général avec ses propres instruments. Son contrat l’oblige à fournir un résultat précis, dans un certain délai, et répondant à certaines normes de qualité convenues entre les parties. L’entrepreneur reste maître de l’exécution du travail, même si le co contractant en raison de l'intérêt qu’il porte au succès de l’entreprise conserve un droit de surveillance générale.

L’indépendance de l’entrepreneur est de prime abord incompatible avec le caractère spécifique du pouvoir de surveillance, de contrôle et de direction exigé par la jurisprudence pour reconnaître une relation préposé-commettant.

(10) Again, Mr Baudoin at 226, no 337 says:

Dans l’état actuel de la jurisprudence, la spécificité du contrôle est indispensable ‘a l’existence même de la relation de preposition. Il existe une différence entre veiller à ce que la tâche fixée soit remplie et surveiller son exécution en la dirigeant. Le simple droit de regard ne suffit pas à l’établissement du lien de préposition, s’il ne se double pas d’un pouvoir de donner des ordres, des instructions ou des directives précises sur la manière dont le préposé doit exécuter sa tâche. C’est d’ailleurs principalement sur ce critère que la jurisprudence s’est fondée pour refuser de voir une relation de préposition dans le contrat d’entreprise.

(11) The Supreme Court in 1929 decided Quebec Asbestos Corp v Couture, [1929] SCR 166, which judgment in Nadeau’s words:

. . . distingue le contrat de louage de travail du contrat d’entreprise par le caractère de subordination de l’employé. Couture avait entrepris de fournir la quantité de minerai requise pour alimenter l’usine, étant entendu qu’il employait à cette fin plusieurs hommes de son choix, au salaire fixé par lui mais ne defant pas dépasser ceux de l’usine. En outre, Couture payait ses hommes et, pour l'exécution de son contrat, n’avait d’instructions à recevoir du contremaître de la compagnie qu’en ce qui concernait les endroits où il devait miner les parois de la carrière, à l’aide des outils et de la dynamite fournis par la compagnie. Sa rémunération était fixée à tant du waggonet de minerai. M. le juge Rinfret vit dans le contrat de Couture tous “les principaux caractères distinctifs du contrat d’entreprise: le mode adopté pour sa rémunération; le droit de choisir les hommes qu’il employait, de fixer leur salaire, de les diriger et de les renvoyer; la responsabilité en dommages comme conséquence de son défaut d’alimenter l’usine; surtout l’absence d’un lien de subordination entre Couture et la compagnie et son indépendance dans la méthode de travail”. Il ajoute que “Couture exécutait son travail d’un façon indépendante, en dehors de la direction et du contrôle de la compagnie et celle-ci devait seulement en vérifier la bonne exécution lors de son achèvement”.

(12) In Lemay Construction Ltée v Dame Poirier, [1965] BR 565 and La Cité de Sherbrooke v J W Roy Limitée, [1966] BR 239, both involving the death of workmen, Rivard, J stated at 568-569 and 242-244 respectively:

Le contrat de louage de services se distingue nettement du contrat d’entreprise.

Savatier formule la règle:

“Le commettant est celui qui ‘a le droit de donner au préposé des ordres et des instructions”. C’est dans ce lien d’autorité, pour le commettant, de subordination, pour le préposé, que réside le trait distinctif de l’un et de l’autre.”

Le même auteur précise:

“L’entrepreneur est encore l’homme qui emploie ses propres instruments et fournit la matière première, tandis que le préposé locateur de services se sert plutôt des instruments du patron, dont il ouvre la matière. Toutefois, le fait d’user de certains instruments relativement peu importants lui appartenant

n’empêcherait pas un ouvrier d’être considéré comme préposé si, par ailleurs, des signes de dépendance certaine l’unissent au patron”.

(13) La Cour suprême du Canada, dans Quebec Asbestos Corporation v Couture, référé plus haut a stipulé aux 169 et 170:

Le contrat de louage d’ouvrage se distingue du contrat d’entreprise surtout par le caractère de subordination qu’il attribue à l’employé. Même payés à la tâche, les ouvriers peuvent être “des locateurs de services, s’ils sont subordonnés à un patron; mais au contraire les ouvriers sont des entrepreneurs, s’ils ne sont pas soumis a cette subordination”.

(14) Jackett, P (as he then was) of the Exchequer Court considered the Situation of a radiologist under contract with a hospital and held in Alexander v MNR, [1969] CTC 715; 70 DTC 6006, that the doctor was not an employee. At 724 [6011] Jackett, P stated:

It seems evident that what is an appropriate approach to solving the problem in one type of case is frequently not a helpful approach in another type. On the one hand, a contract of service is a contract under which one party, the servant or employee, agrees, for either a period of time or indefinitely, and either full time or part time, to work for the other party, the master or the employer. On the other hand, a contract for services is a contract under which the one party agrees that certain specified work will be done for the other. A contract of service does not normally envisage the accomplishment of a specified amount of work but does normally contemplate the servant putting his personal services at the disposal of the master during some period of time. A contract for services does normally envisage the accomplishment of a specified job or task and normally does not require that the contractor do anything personally.

(15) In Isaac v MNR, [1970] Tax ABC 405; 70 DTC 1285, J O Weldon, in holding that the appellant, a registered nurse, was self-employed and not employed by the hospital, quoted Ormerod, J in Gould v Minister of National Insurance, [1951] 1 All ER 368:

. . . the question in this and similar cases must turn on the particular facts of each particular case, and the authority of other cases, and particularly of cases based on different statutes, is of very little assistance. It is easy in some cases to say that the contract is a contract of service (i.e. an employment contract) and in others that it is a contract for services, but between the two extremes there is a large number of cases where the line is much more difficult to draw. Although the authority of cases based on different statutes may be of very little assistance in deciding any particular case, it is possible to extract from these authorities a common principle on which the decisions are founded. It is clear that the real question is one of the degree of control exercised by the person employing the artist, and this, as I see it, means not only the amount of control but the nature of that control and the direction in which it is exercised. In Short v. Henderson, Ltd, (1946), 115 L.J.P.C. 41, a case in the House of Lords under the Workmen’s Compensation Acts, Lord Thankerton (115 L.J.P.C. 47) recapitulates with approval the four “indicia” of a contract of service derived by the Lord Justice Clerk from the authorities referred to by him. These are:

(a) the master’s power of selection of his servant;

(b) the payment of wages or other remuneration;

(c) the master’s right to control the method of doing the work; and

(d) d) the master’s right of suspension or dismissal.

He goes on to say that the particular requirement of a contract of service is the right of the master in some reasonable sense to control the method of doing the work, and that this factor of superintendence and control has frequently been treated as critical and decisive of the legal quality of the relationship.

Mr Weldon continued:

On the basis of the above-quoted statement of law dealing with the relationship of master and servant, the real question herein is one of the degree of control exercised by C.F.H. Halifax over the appellant as a registered nurse in her 1966 taxation year, and that means not only the amount of control but the nature of that control and the direction in which it was exercised.

(16) In Latimer v MNR, [1977] CTC 2128; 77 DTC 84, D E Taylor stated, referring to a chartered accountant who accepted an engagement to provide financial management services to a single corporation, at 2135 [89]:

The Board has read with considerable interest the two Pension Appeals Board cases, Comet Realties Ltd. and Mann and Martel (supra), which dealt more specifically with entitlement under applicable pension legislation; but it has been unable to conclude that such a test as to whether the appellant’s function was “part and parcel of the operation” (Comet Realties Ltd.) or “an integral part of the appellant’s business” (Mann and Martel) has much application in the instant case when they are contrasted with “a severable accessory”. It is doubtful if the learned judge intended that this test should supersede anything which might be established to exist from an examination of the criteria covering a more direct master/servant relationship.

Turning to the criteria, other than “control”, enumerated by the learned judges of the Privy Council in the appeal of Montreal v. Montreal Locomotive Works Ltd., it should be recognized that although they may have more application in a commercial or industrial situation, to the degree the appellant’s professional skills could be regarded as “tools”, he was in possession of these; according to the evidence of both the appellant and Mr. Jarmain, there appeared to be a need to fill a full-time position in the role commenced in 1970 by the appellant, and if one accepts that the prospect of a full-time position at a good salary made the arrangement look profitable to the appellant, then there was “a chance of profit”; turning to the “risk of loss” factor, the Board could conclude without difficulty that there was indeed some “risk of loss”, the appellant having terminated any other engagements he had ceased to pursue any other prospects and, shortly thereafter, moved with his family to London from Toronto. Indeed, had the circumstances turned out to be less than acceptable, there was a serious risk of loss. Without trying to examine in depth the meaning to be attributed to these particular criteria given by Lord Wright, the Board could not find justification within these criteria alone for ruling against the appellant’s case. In my opinion the case does come down to the issue

— common and prominent in the argument of both counsel — of control, or the master/servant relationship.

(17) Mr Chairman Lucien Cardin in Wolfgang Hauser v MNR, [1978] CTC 2728; 78 DIC 1532, listed four tests “which the courts have evolved”:

1. The Control Test.

2. The Integration Test.

3. The Economic Reality Test.

4. The Specific Result Test.

(18) In Orton v MNR, NR 9 — April 25, 1974, 5 and 6, Cattanach, J made the following comment concerning the professional employee:

The nature and degree of control over a person alleged to be an employee is one test of several to be considered but it is a test of vital importance. In the instance of a professional employee it follows that detailed control as to the manner in which work shall be done is minimal but the material consideration is that the right of control exists even though it need not be exercised.

(19) In McPherson v MNR, NR 91 — March 24, 1976, 8, Cattanach, J commented with some more details on this idea. Having spoken of the “control test”, he went on to say:

. . . It has been pointed out that this test is not universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done. Many examples occur where very special skills are required such as the master of a ship and in the learned professions, medicine, law and the clergy. The counsel for the Minister in this appeal is a qualified barrister and solicitor. He is an employee of the Department of Justice. At the trial his employer cannot order him how he will conduct that trial. That is done at his own discretion as exigencies arise. He is on his own.

Accordingly the test of the employer requiring an employee to order the manner in which the work is to be done assumes lesser importance in the case of highly qualified professional employees. These employees are hired by reason of their qualifications. In practice therefore such persons are rarely given instructions how to do the work but that does not preclude a finding that the person is employed under a contract of service. Detailed control over a professional employee as to the manner in which work is done is necessarily minimal but the material consideration is that the right of control exists even though it is sometimes impossible to exercise and is rarely needed to be exercised.

(20) It is frequently referred to study, La responsabilité civile délictuelle (Montreal, PUM 1973, 227, no 338), Professor Jean-Louis Baudoin expressed his view as follows:

Dans la situation actuelle de la jurisprudence il convient d’être prudent et de ne pas nécessairement conclure à l’inexistence d’une relation préposé — commettant entre l’hôpital et le personnel médical, en se basant sur le seul fait de l’indépendance professionnelle de ce dernier. La qualité de professionnel n’est pas, selon nous, obligatoirement incompatible avec celle de préposé. Le médecin, travaillant en milieu hospitalier, est un expert quant à l’exercice de son art et de sa technique. Rien ne s’oppose pourtant à ce qu’un expert ou un technicien dont les services ont été retenus, qui est rémunéré par le locataire de service, mis à la disposition des tiers et qui utilise dans ses fonctions les locaux et instruments fournis par le locataire, ne puisse engager la responsabilité de ce dernier. N’est-il pas suffisant dans un tel cas que l’hôpital ait, de par la présence du médecin engagé par lui, assumé contractuellement le risque général de l’activitfé professionnelle de ce dernier à l’égard des clients?

4.03.4 Analysis of evidence

As did Dubinsky, D J of the Federal Court of Canada in the Bay Street Racquet Club v MNR: “It goes without saying that in reaching my decision, I chose not to accept the designation of the appellant as an ‘independent contractor’ as was suggested . . .” by the witnesses Don Haldane, R W Duckworth, Robert Barclay and D Buchsbaum. It is not by saying that somebody is an “independent contractor” that this person becomes an “independent contractor”. The decision will be based on objective tests, criteria or guidelines.

4.403.5 If one analyzes the criteria and compares them with the facts given by the evidence, one finds that the solution of the point in dispute is not crystal clear. Some criteria are in favour of the appellant’s thesis and some in favour of the respondent’s thesis.

4.03.6 The material tools (camera, etc) used was evidently not owned by the appellant. However, I agree with Mr D E Taylor in the Latimer v MNR, case (para 4.03.3.16 that: “professional skills could be regarded as ‘tools’”. In the present case, the major tools used by the appellant are his experience, his intelligence and his organizational ability.

The criterion of ownership, however, is only one among many and not the main one.

4.03.7 Concerning the criteria “risks of loss” and the opportunity to profit, it is clear from the evidence that the investors risk losing money and have the opportunity to profit. The production manager or the assistant director, etc in no way risks losing money, nor the opportunity to profit. The possibility of making a profit or getting a “piece of the action” depends only on the will of the investors (para 3.12).

4.03.8 The appellant was not obliged to pay the employees remuneration. The appellant himself recognized this fact (para 3.19).

4.03.9 Concerning the work to be done, sometimes it is for the accomplishment of a specified amount of work as “to complete the sound editing of eight filmstrips, . . . $100 per film strip” (Exhibit A-3 — Agreement with International Cinemedia Centre Ltd). This seems more in the nature of a contract for services (para 4.03.3.14). Sometimes it is for a period of time, paid per day or per week (Exhibit A-4 — Agreement with Cinévidéo Inc), this seems more in the nature of a contract of services (para 4.03.3.14).

However, the work to be done would appear to be quite complicated judging by the nature of the contract.

The production manager prepares the budget; oversees the preliminary research; surveys all the shooting locations and negotiates these contracts; hires and contracts all production personnel and technicians; oversees the preparation of the production; manages the business affairs of all the departments, (10 or 12): lighting, sound, wardrobe, makeup, publicity, editing, etc; coordinates arrangements for the transportation and the housing of the cast, the crew, etc; authorizes the overtime for the casting crew; prepares the weekly cost report in conjunction with the production accountant. His main worry is money, the budget.

The assistant director maintains coordination among crew categories and actors in order to make the best use of the time allotted for shooting the film on schedule. He is the chief adminsitrator of the film. His main responsibility is shooting the film within the scheduled time.

The Board thinks, that in a case of this nature, the main measures to be considered must be the nature and the complexity of the task, and the freedom of action given, i.e. “the nature and degree of the detailed control over the person alleged to be the servant” as said McCardie, J quoted above (para 4.03.3.8), saying it can be considered as a “final test, if there be a final test”.

On this aspect, the Board thinks that with the given evidence, it is a fair and an objective conclusion to say that the appellant is a self-employed person.

5. Conclusion

The appeal is allowed and the matter is referred back to the respondent for reassessment in accordance with the above reasons for judgment.

Appeal allowed.