Citation: 2008 TCC 419
Date: 20080812
Docket: 2008-310(EI)
BETWEEN:
9113-7307 QUÉBEC INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1]
This is an appeal
concerning the insurability of work done by Chantale Martel for 9113-7304
Québec Inc. ("the Corporation") from September 27, 2006, to
April 30, 2007.
[2]
The Appellant is the Corporation.
It was represented by André Parent.
[3]
After taking an oath,
Mr. Parent acknowledged the truth of several assumptions of fact on which
the Minister had relied in determining that the employment was insurable and
which are set out in the Reply to the Notice of Appeal:
[TRANSLATION]
(a) The
Appellant was incorporated on February 20, 2002.
(b) The Appellant specializes in building
inspection, generally for pre-purchase, estimates and damage assessments (fire,
water, vandalism, etc.).
(c) The Appellant operates its business year-round.
(d) During the period in
issue, the Appellant's equal shareholders were André Parent and his son Pascal
Parent.
(e) The Appellant employed five people, including the
two shareholders.
(f) The Appellant's sales varied from $350,000 to
$400,000 per year.
(g) The Appellant was open Monday to Friday from
8:30 a.m. to 4 p.m.; however, the inspectors and appraisers could work on evenings
and weekends.
. . .
(i) The Worker began working for the Appellant on
September 27, 2006, as a building inspector.
. . .
(k) Generally, the Worker inspected houses for
people who were considering a purchase. She checked most components of the
house, took photographs, and was then required to write an inspection report.
(l) The Worker always did her inspections with André
Parent, who was also a building inspector (and/or Pascal).
(m) The Worker generally met Mr. Parent at a meeting
point, or went to his house and travelled with him to see the client.
. . .
(o) The Worker did not work evenings and weekends
because she had three children at home.
. . .
(q) The Worker received 25% of the total amount
billed to the client; she generally received $100 for each inspection carried
out.
(r) She was remunerated by cheque issued weekly by
the Appellant, after she submitted her invoices to the Appellant.
[4]
Mr. Parent testified in
a direct, spontaneous and forthright manner. He did not in any way attempt to
dodge the questions or hide certain facts. He explained the facts surrounding
Ms. Martel's hiring, and the contact that resulted from an advertisement that
the business had published with a view to recruiting someone.
[5]
Ms. Martel, who had recently
graduated from studies in the field of appraisal, reported to the Corporation's
office. She had no experience. The business saw the opportunity to train
someone who might be able to round out the team made up of Mr. Parent and his
son.
[6]
Mr. Parent described
Ms. Martel in a very respectful manner, stating, among other things, that she
did her work meticulously. He also said that she had no experience and that she
lacked the reflexes that can only be developed with experience in the field. In
addition, he explained that she owned a few small tools for her work, but that
the ladder, stepladder, computer, office and transportation were supplied by
the Corporation.
[7]
Ms. Martel usually
worked three days a week due to her family obligations, and she went with Mr.
Parent or his son on her visits. When she was at the sites, she observed,
listened, and took notes and photographs.
[8]
She then prepared the
reports using the computer and software supplied by the Corporation. Mr. Parent
explained that she took roughly four hours to prepare reports, which was double
the time that a more experienced person would take. He also explained how the Corporation
determined that it would pay her $100 per report.
[9]
According to Mr.
Parent, municipalities or regional county municipalities often hire young
graduates as municipal inspectors. They are generally paid a salary of $14 or
$15 per hour. Mr. Parent explained that a report generally required a visit that
averaged an hour and a half in duration, plus one-half hour to get to the
premises and four hours to draft the report. This adds up to roughly six hours,
which accounts for the amount of $100 per report, or $16.66 per hour.
[10]
Mr. Parent explained
that Ms. Martel was in no way autonomous; she was generally introduced as an
intern. He explained that in order for a person to become competent and obtain
certification from the professional association, the person must have written 400
to 500 reports.
[11]
Only certified
inspectors can work on their own in this field, notably because it would
otherwise be impossible to get professional liability insurance.
[12]
According to Mr. Parent's
testimony, the Corporation that he and his son headed clearly believed that the
way in which they remunerated Ms. Martel caused her to be self-employed.
However, several details disclosed by the evidence establish very clearly that
the relationship between Ms. Martel and the business was a true contract
of service.
[13]
I find, among other
things, that Ms. Martel did not have the skill, experience, or professional status
as a certified inspector in order to work on her own or simply go into business
on her own in the field of building inspection. She needed the benefit of
very close supervision. Indeed, Mr. Parent explained that
Ms. Martel never went to the premises alone; she was always accompanied by
Mr. Parent or his son.
[14]
Mr. Parent
explained several times that Ms. Martel was an intern or trainee. In other
words, he was enabling her to learn this very specialized trade so that she
could round out the team of inspectors in the future.
[15]
Although this situation
is sufficient in itself to warrant a finding that a contract of service existed,
the finding is confirmed by other evidence. Specifically, Ms. Martel
signed no minutes, took no part in billing, had no clients of her own, was not
at all involved in file follow-up, did not bear the costs of transportation to
her work sites, and, lastly, had no expectation of profit or risk of loss.
Moreover, the main tools apparently belonged to the business.
[16]
In fact, only two
factors might have favoured a finding that Ms. Martel did her work as an
independent contractor. The lump-sum amount of $100 per file was explained very
reasonably, leaving no doubt as to the reasonableness of the compensation,
which essentially corresponded to the hours worked. The evidence also
disclosed that Ms. Martel had a great deal of freedom in the performance
of the work for which she was paid.
[17]
In this regard, Mr. Parent
explained that, in view of her family responsibilities, it was mutually agreed
from the outset that she would enjoy considerable freedom. Thus, when she
wanted, she notified the secretary that she would be unable to work a certain
day, and Mr. Parent and his son accepted this limited availability.
[18]
For all these reasons,
the decision that the work done by Chantale Martel for the Appellant from
September 27, 2006, to April 30, 2007, was insurable
employment within the meaning of the Act is confirmed.
Signed at Ottawa,
Canada, this 12th day of August 2008.
"Alain Tardif"
Translation
certified true
on
this 22nd day of September 2008.
Susan
Deichert, Reviser
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