Citation: 2007TCC595
Date: 20071025
Docket: 2006-2831(EI)
BETWEEN:
LIVAIN COMEAU,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
OFFICIAL ENGLISH TRANSLATION
REASONS FOR JUDGMENT
Angers J.
[1] This is an appeal
from a decision of the Minister of National Revenue (the "Minister") dated
July 18, 2006, according to which employment held by the appellant with his son
Stéphane Comeau from May 30 to September 3, 2005, was not insurable
because it was not held under a contract of service within the meaning of
paragraph 5(1)(a) of the Employment Insurance Act
(the "Act"). In the alternative, the Minister submits that even if this
was a contract of service, the appellant still did not hold insurable
employment within the meaning of paragraphs 5(2)(i) and 5(3)(b)
of the Act because the appellant and his son were not dealing at arm's length;
having regard to all the circumstances, it was reasonable for the Minister to determine
that the appellant and his son would not have entered into a substantially similar
contract of employment if they had been dealing at arm's length.
[2] Stéphane Comeau operated a business under
the name of "JLR Hunting". Its main activity was to offer the
services of a guide for bear and moose hunting. He has been operating this
business since March 16,
2005. The appellant admitted
almost all assumptions of fact on which the Minister relied in rendering his
decision, except for the assumption that his son (the "payer") did
not pay any rental fees to the appellant for the use of the appellant's camp by
his business, and the assumption that the payer allegedly saved approximately
$10,000 in accommodation costs after the appellant allowed him to use his camp
to lodge his hunters during the 2005 hunting season.
[3] Only the appellant
testified. He has hunted since the age of 16 and has held a guide permit since
2001. This permit is required to guide non-residents who come to New Brunswick to hunt. Although he is
from a family of hunters, he acknowledges that his son Stéphane only hunts
occasionally because he does not enjoy it. Stéphane held full-time employment
in a lending institution, Wells Fargo Financial, during the period in question.
[4] Before becoming a hunting guide, the
appellant was a new and used car dealer from 1997 to 2002–2003. He operated an
automobile export business which employed five to six employees. He set the
work schedule for his employees, and his spouse mainly took care of office
tasks and the computer system. In 2004, he worked as a hunting guide for
Jacques Roy, the former owner of JLR Hunting.
[5] According to the appellant's testimony, his
son purchased JLR Hunting in early 2005. This was essentially a take-over of
Jacques Roy's activities by Stéphane Comeau, as no monetary consideration was
paid. Clients, most of whom are American, are solicited by Internet. Clients
give a deposit, and time is allotted to them based on the bear hunting season.
In 2005, the bear hunting season was divided into three periods, namely, from
April 18 to June 25, from September 12 to 24 (strictly for bow
hunting) and from October 1 to November 5.
[6] Therefore, the
appellant was hired as a hunting guide. For the 2005 season, the payer also
hired his uncle, the appellant's brother, as a guide as well as hiring a cook.
Accordingly, the appellant's tasks consisted in guiding hunters, doing taxidermy, building permanent
platforms, installing temporary platforms, preparing bait for bears and
preparing hunting areas. He was paid an hourly rate of $16 for 47 hours of
work per week. He received a cheque every week. The other workers were paid the
same hourly rate as the appellant. However, the appellant did not receive
vacation pay or paid holidays. It is also admitted that the appellant did not
have the right to hire other workers and that the payer had the right to
supervise the appellant's daily tasks and activities, although the appellant
worked without being supervised. There were no means of communication at the
hunting camp. The appellant saw the payer in the morning or in the evening, as
he did not always sleep at the camp.
[7] The appellant's
spouse took care of the payer's accounting. She personally applied for a grant on
the payer's behalf to help him pay the salaries of his employees.
[8] The appellant began
to work for the payer only at the end of the month of May, for health reasons.
The payer did not hire extra help during the appellant's absence, and his work
was performed by the other workers. They were laid off on July 23, 2005,
while the appellant continued to work until September 3.
[9] According to the
appellant, the work of a guide is not easy. A truck is required to perform this
work, and he purchased one in 2004 at a price of $10,350 in order to work for
Jacques Roy. He therefore used it during the period in question. The truck
maintenance fees were not reimbursed to him, but the payer paid for gasoline
using a credit or debit card. Work would begin a few weeks before the beginning
of the hunting season to identify hunting areas and to get the bears used to
coming to take the bait. The appellant obtained bait in various restaurants and
would prepare it. The appellant paid for his $5 guide permit himself and
supplied all the tools required to perform his work.
[10] During the 2005 hunting season and the
period in question, the appellant made his hunting camp available to the payer
so he could lodge his clients. This camp was located on land leased from the
Crown. He acquired it in the fall of 2004, but ownership was transferred to him
only once the purchase price had been completely paid. This explains why the
rental fees for the land in 2005 were billed to the former owner but paid by
the appellant. It is admitted that the appellant had purchased the camp for his
own personal use, and in the fall of 2005 and spring of 2005, he made
renovations costing approximately $10,000.
[11] A lease concluded
between the payer and the appellant, dated April 1, 2005, was submitted in
evidence. This was a five-year lease under the terms of which the first year
was free, with a rent of $3,000 a year thereafter. The lease excluded the cost
of firewood, stove oil and diesel for the generator. According to the
appellant, the payer paid these expenses in 2005. The camp could not be used after
2005, because it was not in compliance with commercial requirements and the
Canada Select program. Although
the respondent had previously asked the appellant to disclose his evidence, it
was only at the hearing that this lease was mentioned for the first time.
[12] Thirteen non-resident bear hunting permits
were issued to the payer in 2005, seven of which were issued on May 23 and
six of which were issued on May 29, 2005. According to the black bear registration
reports filed by the payer with the New Brunswick Department of Natural
Resources and Energy, 12 black bears were killed from May 23 to
June 2, 2005. There are no other reports or permits in the payer's name in
2005.
[13] The only known version
of events given by the payer followed a telephone conversation between him and the
respondent's investigator. The payer allegedly told the investigator that the
appellant had been hired to work as a guide and promote the business during the
season, and that it was the payer who took care of the business after the
hunting season was over.
[14] The appeals officer
filed in evidence the deed of sale of the appellant's camp and testified that
his investigation showed that it cost the owner of JLR approximately $10,000 to
lodge his clients in 2004. Thus, the payer saved this amount in rental fees in
2005.
[15] The first issue is to
determine whether there was a contract of service between the payer and the
appellant from May 30 to September 3, 2005. In Wiebe Door Services Ltd v. Minister of National
Revenue [1986] 3 F.C. 553,
the Federal Court of Appeal gave some useful tests for answering this question.
In 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001]
2 S.C.R. 983, the Supreme Court of Canada endorsed these tests criteria
and summed up the state of the law as follows at paragraphs 47 and 48:
47 Although there is no universal test to determine whether a person is an
employee or an independent contractor, I agree with MacGuigan J.A. that a
persuasive approach to the issue is that taken by Cooke J. in Market
Investigations, supra. The central question is whether the
person who has been engaged to perform the services is performing them as a
person in business on his own account. In making this determination, the
level of control the employer has over the worker’s activities will always be a
factor. However, other factors to consider include whether the worker
provides his or her own equipment, whether the worker hires his or her own
helpers, the degree of financial risk taken by the worker, the degree of
responsibility for investment and management held by the worker, and the
worker’s opportunity for profit in the performance of his or her tasks.
48 It bears repeating that the above factors constitute a non-exhaustive
list, and there is no set formula as to their application. The relative
weight of each will depend on the particular facts and circumstances of the
case.
[16] In Charbonneau v. Canada [1996] F.C.J. No. 1337 (Q.L.), Marceau J.A.
noted that the factors in question are reference points which are generally useful
to consider, but not to the point of jeopardizing the ultimate goal of the
exercise, which is to determine the overall relationship between the parties.
[17] In a recent
judgment, the Federal Court of Appeal once again explained the legal principles
which govern the issue of insurability of employment. In Livreur Plus Inc.
v. Canada, [2004] F.C.J. No. 267, Létourneau J.A. summarized these
principles as follows at paragraphs 18 and 19 of his judgment:
In these circumstances, the tests mentioned in Wiebe
Door Services Ltd. v. M.N.R., 87 D.T.C. 5025, namely the degree of control,
ownership of the work tools, the chance of profit and risk of loss, and finally
integration, are only points of reference: Charbonneau v. Canada (Minister of National Revenue - M.N.R.) (1996), 207 N.R. 299, paragraph 3. Where a real
contract exists, the Court must determine whether there is between the parties
a relationship of subordination which is characteristic of a contract of
employment, or whether there is instead a degree of independence which
indicates a contract of enterprise: ibid.
Having said that, in terms of control the Court should not
confuse control over the result or quality of the work with control over its
performance by the worker responsible for doing it: Vulcain Alarme Inc. v.
The Minister of National Revenue, A-376-98, May 11, 1999, paragraph 10,
(F.C.A.); D&J Driveway Inc. v. The Minister of National Revenue, supra,
at paragraph 9. As our colleague Décary J.A. said in Charbonneau v.
Canada (Minister of National Revenue - M.N.R.), supra, followed in Jaillet
v. Canada (Minister of National Revenue - M.N.R.), 2002 FCA 394, "It
is indeed rare for a person to give out work and not to ensure that the work is
performed in accordance with his or her requirements and at the locations
agreed upon. Monitoring the result must not be confused with controlling the
worker".
[18] That being said, the facts in this case show that
the appellant's services were required as a guide and that he had to promote
the business, that is to say, to find clients. There is no doubt that he was
the one who had the knowledge and skills required to operate the business and
act as a guide. His experience as a businessman allowed him to ensure proper
management, and his experience as a hunter and guide allowed him to give good customer
service. His talents were used to serve the clients, not the payer. In my
opinion, in such circumstances, it was very difficult for the payer to ensure
that the service complied with the applicable legislation and standards. Not
only was the payer not present where the services were rendered, but it was also
impossible for him to contact the appellant during the day. Even if the
appellant could contact the payer in the evening, it was highly improbable that
the payer could give any instructions, as he had no knowledge of guiding or of
the clients' needs.
[19] The appellant testified that to be able to act as a
guide, he needed a truck, and he purchased one for the price of $10,350. The
only expense paid by the payer was gasoline, which the appellant purchased with
the payer's credit or debit card. The fact that the reimbursement of other
expenses by the payer was minimal is an important detail. This is a situation
which does not support the argument that there was a contract of service,
especially when the travelling distances to the hunting camp are considered, as
well as collection of the bait before the hunting season.
[20] Transportation of clients to the hunting camp
involved risks which only the appellant seems to have assumed in this case.
Therefore, the appellant had a risk of loss. I should note that the payer did
not testify in this case. It would have been interesting to learn about the
operation of his business, for example, who purchased food for the clients and ammunition
for the guides, whether the guides used their own firearms and who paid the
invoices.
[21] As far as integration is concerned, there is no
doubt that the appellant's work was necessary for the proper operation of the
payer's business. In fact, on the basis of all the evidence, I conclude that,
in this case, the payer's business could not have operated without the
appellant. At first sight, it seems that such a conclusion is consistent with a
contract of service, but in my opinion, it is consistent with the conclusion
that the business in question really belongs to the appellant and only appears
to belong to the payer. The appellant used his knowledge, truck, hunting camp,
guide permit and his experience, while the payer rarely went hunting or even in
the woods and worked on a full-time basis for a finance company.
[22] In this case, there are insufficient indicators of
supervision by the payer in terms of instructions given to the appellant or of
performance and control of the quantity or quality of the work performed.
[23] In my opinion, the evidence submitted is
insufficient to allow me to conclude on a balance of probabilities that there
was a contract of service between the appellant and the payer in this case.
[24] Having reached this conclusion, I do not need to
deal with the alternative question. However, if I had reached a different
conclusion, suffice it to say that in this case, according to the law, the
evidence overall allows me to conclude that the decision of the Minister
appears to me to be reasonable, that is to say, that the appellant and the
payer would not have entered into a substantially similar contract of employment
if they had been dealing at arm's length.
[25] The appeal is dismissed.
Signed at Ottawa, Canada, this 25th day of October 2007.
"François Angers"
Translation
certified true
on this 1st day
of February 2008
Michael Palles,
Reviser
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