Date: 19980616
Dockets: 97-52-UI; 97-78-CPP
BETWEEN:
RAYMOND STERN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Lamarre, J.T.C.C.
[1] These are appeals against determinations by the Minister
of National Revenue ("Minister") of a question under
section 61 of the Unemployment Insurance Act
("Act") and under section 27 of the Canada
Pension Plan ("Plan"). These determinations
were to the effect that Mr. George Inniss, while employed by
the appellant for the period from November 15, 1992 to November
20, 1995, held insurable employment pursuant to paragraph
3(1)(a) of the Act and pensionable employment
pursuant to paragraph 6(1)(a) of the Plan.
[2] In making his determinations, the Minister relied on the
assumptions of fact set out in paragraph 4 of the Reply to the
Notice of Appeal, as follows:
(a) the Appellant is involved in rental properties;
(b) the rental properties in question are located at 91 James
Street and 519 Gilmour Street in Ottawa;
(c) the employee was hired by the Appellant to perform
janitorial and maintenance services at the properties mentioned
in paragraph (b) above;
(d) the employee's duties included collecting the rent
from tenants, distributing mail and to show the property to
potential tenants;
(e) the employee lived and performed the services on the
Appellant's properties;
(f) the employee had a sign on his door indicating the office
hours were between 9:00 a.m. and 6:00 p.m.;
(g) in 1993, the employee was paid $100.00 per month in cash
by the Appellant and the employee was also provided with rent
free accommodations by the Appellant, valued at $450.00 per
month;
(h) just prior to leaving his employment with the Appellant,
the employee was paid $600.00 per month in cash and in addition
was provided with rent free accommodations valued at $550.00 per
month;
(i) although no moneys were paid by the employee to the
Appellant for the employee's apartment, the Appellant
required the employee to give him a receipt for rent purportedly
paid by the employee to the Appellant;
(j) the employee's rate of pay was determined by the
Appellant;
(k) in addition to performing the duties indicated in
paragraphs (c) and (d) above, the employee also performed other
repairs or performed services at other properties owned by the
Appellant;
(l) the employee was paid additional remuneration by the
Appellant, for the additional work performed by the employee,
indicated in paragraph (k) above;
(m) the services had to be performed personally by the
employee and any substitute worker would have to meet with the
Appellant's approval;
(n) the employee's hours were controlled by the
Appellant;
(o) the employee was supervised by the Appellant who visited
the premises on a frequent basis;
(p) the employee was required to report to the Appellant on a
regular basis;
(q) all of the equipment and supplies required to perform the
services were provided to the employee by the Appellant;
(r) the employee did not incur any expenses in the performance
of his duties for the Appellant;
(s) the Appellant had priority on the employee's time for
specified hours and days;
(t) the employee could not realise a profit or a loss as a
result of performing the services for the Appellant;
(u) the employee performed services to the Appellant on a
continuous and recurring basis;
(v) the employee was an integral part of the Appellant's
operation since the Appellant was in the business of renting
rooms and apartments, and the employee provided janitorial,
maintenance and repair services to the Appellant's
buildings;
(w) the employee did not represent, advertise or promote
himself as a self-employed individual;
(x) the employee was employed by the Appellant pursuant to a
contract of service.
[3] The agent for the appellant admitted only subparagraphs
4(a), (b) and (f) above. He denied all the other allegations. He
called the appellant as a witness and Mr. George Inniss was
called to testify by counsel for the respondent. The testimony of
the two witnesses diverged on practically all aspects of the
agreement that was reached between them.
[4] The appellant testified that Mr. Inniss was hired as a
rental agent to collect rents and to interview prospective new
tenants so as to keep the twenty-three units building
fully-rented every month. According to Mr. Inniss, he was hired
as a building superintendent after that position was advertised
in the newspaper in November 1992 by the appellant.
[5] According to the appellant, Mr. Inniss had introduced
himself as a self-employed janitor. Mr. Inniss testified
that he had never occupied a position as a superintendent before.
He had previously been employed by the Jewish Community Centre as
a handyman to do maintenance work from 3:00 p.m. to 11:00 p.m.,
six days per week.
[6] According to the appellant, it was Mr. Inniss’s
responsibility to arrange interviews and to decide whether people
interviewed should become tenants in the building. The appellant
would simply be informed afterwards that the units had been
rented. Mr. Inniss said that it was the appellant who put the ads
in the newspapers in order to find new tenants and that the
appellant always had the final word on the choice of tenants.
[7] The appellant said that Mr. Inniss was required to be
present the last two days of the month to collect the rents but,
apart from some routine cleaning work he had to do during the
month, his presence was not required on a full time basis. The
appellant expected Mr. Inniss to clean the hallways and the
common bathrooms shared by the tenants in order to keep them
tidy, but not always on a daily basis. As for the tenants’
mail, he advised Mr. Inniss that it was either to be left in the
lobby for them to pick up or to be put under their doors.
[8] Mr. Inniss testified that his duties were mainly to look
after the building (cleaning, minor repairs, watering the plants,
delivering mail, snow shovelling in winter) and to collect the
rents and find new tenants. He also dealt with minor problems
that came up among tenants or between tenants and the landlord.
He said that tenants usually came to him on the average of two or
three times per week and that he would refer them to the
appellant for important matters. Although the tenants expected
him to be there from 9:00 a.m. to 6:00 p.m. (as there was a sign
on his apartment door indicating that such were his hours), he
encouraged them to come by in the morning since he did his
routine jobs at that time. He said that he generally worked
between 7:00 a.m. and noon every day for a total of approximately
60 hours per month at this job. If the appellant wanted to meet
him in the afternoon, Mr. Inniss would arrange to be
available.
[9] As for the terms of payment, the appellant said that he
had an ad hoc arrangement with Mr. Inniss. He said that if
the building was fully-rented, he would give Mr. Inniss his full
rental fee. When Mr. Inniss started, he was receiving $200 per
month and this rental fee grew to $600 per month. The appellant
testified that if the building was not fully-rented, he would not
have given Mr. Inniss the full rental fee. On the other hand, it
could happen that one unit was rented to two tenants. In such a
case, Mr. Inniss would be granted a bonus. The appellant
conceded, however, that the building was fully rented more or
less all the time and that Mr. Inniss in fact was paid his full
fee. That fee was paid in cash, at the request of Mr. Inniss,
twice a month. The appellant said he did not have the receipts
with him for the extra commission that was allegedly paid to Mr.
Inniss.
[10] If the appellant asked Mr. Inniss to do some extra odd
jobs, he would pay him $10 per hour or, most of the time, they
would agree on a certain fee. The appellant brought some receipts
for a variety of work thus performed by Mr. Inniss (cleaning
windows, painting and repairs). One of these receipts was for
payment for the referral of one tenant to another building.
[11] The appellant also provided Mr. Inniss with rent-free
accommodation. The appellant said that he was not paying for the
telephone or for the paperwork. He said that it was not a
requirement that Mr. Inniss live in the building but recognized
that it was convenient that he do so. He acknowledged that the
superintendents of all three of the rental properties he owned
were living in. According to Mr. Inniss, it was understood from
the beginning that it was a live-in position. His remuneration
was $600 per month plus $525 per month representing the value of
the rent for his furnished apartment. He said that the appellant
was responsible for telephone service and cable television. Mr.
Inniss corroborated the fact that he had received referral fees
from the appellant, however, he said that this had happened only
about 10 times in three years.
[12] With regard to the tools, the appellant testified that he
provided the cleaning supplies as well as a few pieces of
equipment which he kept in a garage in one of his buildings which
Mr. Inniss could use. He also said that Mr. Inniss had an
extensive set of tools and owned his own snow-clearing and yard
equipment. In fact, the appellant said, Mr. Inniss was working
for other people, either doing yard work in summer or
snow-clearing in winter, or taking on electrical contracts.
[13] Mr. Inniss denied that he owned any equipment. He was
using the appellant’s equipment. He said that he never
advertised his services for snow shovelling or other types of
labour. He said that during the period in issue, he also worked
for the Ottawa School of Ballet as a handyman, where he did
maintenance until 1994. After that, he worked evenings for a
restaurant. He said that these other jobs did not interfere with
his employment with the appellant. He also said that it happened
once that he was approached by a neighbour to shovel her
driveway. He, however, refused that job, stating that he did not
want to do it on the appellant’s time.
[14] Mr. Inniss had 10 days' holidays per year. The
appellant said that Mr. Inniss was responsible for finding
someone to replace him for those days. Mr. Inniss said that it
was on the suggestion of the appellant that he asked a tenant to
replace him and that he first obtained the approval of the
appellant.
[15] A letter signed by the appellant but undated was filed in
evidence as Exhibit R-1. The appellant testified that he prepared
that letter in 1994 at the request of Mr. Inniss who had an
opportunity to provide janitorial services for another building.
This letter reads as follows:
To whom it may concern
George Inniss has been employed by me, Raymond Stern, since
November, 1992 in the capacity of residential building
superintendent.
During this time George has been very reliable, honest and
responsible when carrying out his duties such as rent collection,
tenant supervision and general repairs and maintenance.
[16] In November 1995, the relationship between the appellant
and Mr. Inniss began to deteriorate. According to the appellant,
it became more and more difficult to reach Mr. Inniss who had
allegedly ceased doing any work for the appellant. Mr. Inniss
ejected the appellant from his apartment and obtained a summons
of charge against the appellant on November 11, 1995 under the
Provincial Offences Act, accusing him of trespassing,
pursuant to the Landlord and Tenant Act (Exhibit A-2). The
appellant stated that he was acquitted of the charge.
[17] The appellant responded by sending to Mr. Inniss a letter
dated November 15, 1995 (Exhibit R-2) which reads as
follows:
Dear Mr. Inniss:
RE: Your Employment as Superintendent
This is to confirm arrangements for your employment to cease
as of Friday, November 24, by which time you will have peaceably
left the premises with your possessions.
You will be paid in full up to end of the month.
Please sign the bottom of this letter as your acknowledgement
of these arrangements.
Yours very truly,
[18] The appellant then sent a notice to the tenants informing
them that George Inniss was no longer the superintendent of
the building (91 James Street) and informed them to cease paying
rent to Mr. Inniss (Exhibit R-3).
[19] The appellant testified that he offered Mr. Inniss $300
to leave since he refused to go. He then took legal action to get
him out of the building.
[20] Later, the appellant was made aware of a T-4 slip that
had been issued to Mr. Inniss for 1995 showing an employment
income of $10,377 while working for the appellant and source
deductions for CPP and UI contributions. The appellant who had
not issued any T-4 slip, was very surprised. He was told by the
Ontario Ministry of Labour that the T-4 slip was generated to
activate unemployment insurance payments to Mr. Inniss.
[21] Mr. Inniss testified that he had asked the appellant
several times if deductions at source had been taken from his
income and the appellant allegedly answered that it was not
important as nobody would know. Mr. Inniss said that he kept $200
each month in a separate bank account in order to pay his
contributions when he left his job with the appellant. Indeed,
after being fired, Mr. Inniss went to Revenue Canada with all the
information. He said that he did not make application for
unemployment insurance benefits following the termination of
employment with the appellant.
Analysis
[22] The question I must consider is whether, during the
period in issue, Mr. Inniss was employed by the appellant under a
contract of service pursuant to paragraph 3(1)(a) of
the Act and subsection 2(1) and paragraph 6(1)(a)
of the Plan. To make this determination, the tests adopted
in Wiebe Door Services Ltd. v. M.N.R.,[1] namely control,
ownership of tools, chance of profit and risk of loss as well as
integration or organization, i.e. whether the appellant worked
for his own business or for the payor, must be analyzed in order
to define the total relationship between the parties.
[23] Given the divergence in the testimony of the witnesses,
the appeals come down to the question of credibility. As the
evidence showed some features of a contract of service and some
of a contract for service, I must decide the present case on the
whole of the evidence presented to me and give more weight to the
testimony which I believe is more probable.
[24] So far as the control exercised by the appellant over the
work done by Mr. Inniss is concerned, though it was not
exercised regularly, it seems to me that the appellant did, to
some extent, have a right of control over the appellant's
work.[2] While the
appellant testified that he did not meet regularly with Mr.
Inniss, he did admit, that he was on-site at least twice per
month to pay Mr. Inniss: once at the end of the month when he
collected the rents and again in the middle of the month when he
took the opportunity to check whether the building was clean and
everything going well. The appellant also said in speaking of the
rental process that he did supervise it. He expected Mr. Inniss
to report to him on the renting of the rooms or he would himself
contact Mr. Inniss to check on this. As to Mr. Inniss’s
testimony, it clearly implied that the appellant exercised
control over his work. If there were any problems with tenants,
Mr. Inniss would definitely report to the appellant. Before
renting to a tenant, Mr. Inniss would obtain the appellant's
approval. Similarly with his replacement, Mr. Inniss would select
a few people and he could not assign his duties to anyone without
the prior approval of the appellant. To this extent, if Mr.
Inniss's version is true, he would meet the requirement of
having been hired under a contract of service (see
Dr. William H. Alexander v. Minister of National
Revenue, 70 DTC 6006 (Ex. Ct.)).
[25] As for the work schedule, although the appellant
testified that Mr. Inniss had no scheduled hours, he still
acknowledged that Mr. Inniss had daily duties to perform
(cleaning, mail and repairs, etc.). Mr. Inniss said that although
the tenants expected him to be available from 9:00 a.m. to 6:00
p.m., he performed his work from 7:00 a.m. to noon. He also said
that he did not accept other work that would interfere with his
work for the appellant. On the other hand, Mr. Inniss had some
latitude and he did not really have to account for the number of
hours he worked and for what he did during those hours. However,
if the appellant requested that he be there, Mr. Inniss had
to be available.
[26] As for remuneration, although the appellant said that Mr.
Inniss was paid in accordance with the number of units rented, he
admitted that Mr. Inniss was regularly paid a fixed amount (twice
per month) during the entire period he worked for him, which
amount was in addition to the rent-free apartment. It seems that
only a few times did it happen that Mr. Inniss received extra
remuneration for referring tenants to other buildings owned by
the appellant. On the other hand, both Mr. Inniss and the
appellant testified that if some extra work needed to be done
they would agree on a certain price. Furthermore, Mr. Inniss was
not paid during his holidays as he had to be replaced by someone
else who was paid in his place.
[27] With regard to equipment, the appellant provided all
supplies required to do the job. There were contradictions as to
the equipment owned by Mr. Inniss but I am satisfied that Mr.
Inniss was not required to use his own tools to perform his work
for the appellant.
[28] With regard to the chance of profit and risk of loss, I
do not find that I should attribute much weight to the chance of
profit. Mr. Inniss received a fixed salary and was provided with
a rent-free apartment. I do not find that the extra work done and
the few referral fees he received during the whole period are of
such importance that Mr. Inniss can be considered to have been
acting as an independent contractor on that basis. In addition, I
find that the evidence did not reveal that Mr. Inniss had any
risk of loss. When the appellant wanted to fire Mr. Inniss, he
had to pay him his full fee to the end of that month and he had
to go to court to force Mr. Inniss to leave the premises.
[29] As to the integration of Mr. Inniss's activities into
the appellant's business, it is possible to see at first
glance, combined features of a contract of service and a contract
for service, especially if I take into account the various
contradictions in the testimony of the witnesses. However, I find
that the appellant used Mr. Inniss's services not for a very
specific contract but rather for general duties to be performed
by him. In the words of the appellant, as set out in the letter
filed as Exhibit R-1, Mr. Inniss was acting in the capacity
of residential building superintendent. In the same letter, the
appellant defined Mr. Inniss’s duties to be
“rent collection, tenant supervision and general repairs
and maintenance”. In this sense, the appellant was not
acting as a person operating a business for himself, but as an
employee of the appellant. A residential building superintendent
is generally expected to be there on a full time basis. The fact
that Mr. Inniss was also working elsewhere during the period in
issue does not, in my view, change the nature of the contractual
relationship which existed with the appellant. Indeed, Mr. Inniss
had his other jobs during evening hours while he was required to
be available for the appellant from 9:00 a.m. to 6:00 p.m.
[30] Taking all of these various features into account, I am
of the view that the appellant has not established, on a balance
of probabilities, that Mr. Inniss was not employed under a
contract of service during the period in issue and accordingly,
Mr. Inniss’s employment was insurable under the
Act and pensionable under the Plan.
[31] The appeals are therefore dismissed and the
Minister's determination is affirmed.
Signed at Ottawa, Canada, this 16th day of June 1998.
"Lucie Lamarre"
J.T.C.C.
Email this Content