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Citation: 2007TCC38
Date: 20070118
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Dockets: 2006-1970(EI)
2006-1969(CPP)
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BETWEEN:
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S.W. UNDERHILL TRUCKING LIMITED,
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Appellant,
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And
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THE MINISTER OF NATIONAL REVENUE,
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Respondent.
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ORAL REASONS FOR JUDGMENT
(Delivered from the Bench on January 11, 2007
at Fredericton, New Brunswick)
Campbell J
[1] Let the record show that I am delivering oral reasons in the matter
of S. W. Underhill Trucking Ltd. There were two appeals, EI and CPP,
both of which were heard together yesterday.
[2] The Appellant was assessed for failure to remit Employment Insurance
premiums and Canada Pension Plan contributions, together with interest and
penalties, in respect to two workers, John Lever and Albert Wingfield, for the
period January 1, 2003 through to December 31, 2004.
[3] Although the Appellant was represented by legal counsel, Mr. Peter
Hyslop, only Alton Shaw, the accountant to the Appellant corporation, was
called to give evidence.
[4] He testified that he acted in the capacity of comptroller to the
Appellant, completing the banking, paying the accounts payable, signing cheques
and generally keeping the corporate records.
[5] The evidence that was presented focused on only one of the two
workers, Albert Wingfield. Mr. Wingfield had been involved in a work
relationship with the Appellant for a number of years, but in the fall of 2004,
this changed when the Appellant was requested to put Mr. Wingfield on the
corporate payroll with employee deductions to be made.
[6] As I understand Mr. Shaw’s evidence, the Appellant entered into
agreements with companies such as Day & Ross to provide equipment,
including the trucks, together with the services of the drivers.
[7] The workers here were the truck drivers. Mr. Wingfield submitted his
miles to the Appellant and was paid on a per mile basis. Mr. Wingfield died in
November of 2004.
[8] Other than this very scant evidence, I was not provided with any
concrete factual information which would have assisted me in deciding the very
issue which is at the heart of these appeals.
[9] The issue is simply whether the workers, and in particular Mr. Wingfield,
were employees or independent contractors.
[10] In this Court, the Minister is permitted to
make Assumptions of Fact and an Appellant has the onus or burden of proof of
overcoming or demolishing those assumptions. The proper approach by the Appellant’s
counsel would have been the introduction of evidence to counter those
assumptions for which the corporation did not agree.
[11] In doing so, the four-in-one test factors
established in the well known case of Wiebe Door Services Ltd. v. M.N.R., [1986]
3 F.C. 553, that is control, tools, profit and risk, should have been addressed
by introducing evidence in respect to these factors.
[12] If a review of these relevant factors, in
light of the evidence, provides no clear result, then a review of the parties’
intention must be considered by the Court and therefore evidence respecting
intention may have assisted.
[13] If the Appellant had presented sufficient
evidence to overcome the Minister’s Assumptions of Fact, then I may have been
persuaded that the Minister’s finding was incorrect and that the workers were
in fact independent contractors and not employees throughout the period, with
the result that the Appellant would no longer be liable to pay any of the
assessed contributions, penalties or interest.
[14] Instead, as I see it, the Appellant’s counsel
came to play a hockey game but was equipped with a baseball bat. Although I
provided Mr. Hyslop with ample opportunity to have a brief adjournment to get
Mr. Underhill to court to give evidence, he did not see the need to have him
here.
[15] It was Mr. Underhill who could have provided
me with the very details surrounding the terms and conditions of employment
essential to making conclusions on this very issue. And even if Mr. Shaw could
have provided some of this information, counsel never attempted to elicit these
very facts from the accountant.
[16] In addition, Mr. Lever, the second worker who
is still living, may have provided insight into this work relationship.
[17] If I understand legal counsel’s approach, he
seemed to be arguing that the Appellant corporation has suffered unfairly
because, although CRA had acknowledged that Mr. Wingfield was
self-employed for a number of years prior to the assessment, because of CRA’s
delays, the Appellant is left in a position of no recourse against the deceased
Mr. Wingfield for his share of these employee deductions. He stated that
the Appellant could still deal with Mr. Lever’s portion as he was still living.
[18] As counsel phrased it, he requested that this
Court apply, in his term, “old fashion justice”. First of all, this Court is
not a Court of Equity. But that aside, counsel has completely missed the mark
by conceding the issue himself when in his submissions and throughout the
hearing, he stated that the Appellant did in fact acknowledge that Mr.
Wingfield was an employee in this period and that the Appellant corporation
would be responsible for the employer portion of these deductions.
[19] I believe therefore that counsel was
requesting me to absolve the Appellant from the employee portion of those
deductions because CRA delayed in assessing the Appellant until after Mr.
Wingfield died.
[20] This misses the whole point and leaves my
hands completely tied. I expect counsel that come before me to have at the very
least a modicum of knowledge of the rules that pertain to this type of hearing.
[21] Not having Mr. Underhill testify to the terms
and conditions of the work relationship and not addressing the Assumptions of Fact
contained in the Reply were startling and distressing choices which counsel
made, and in doing so, those omissions resulted in a gap in the evidence that
could have been supplemented and addressed.
[22] By conceding that the worker was an employee,
the very issue that was before me was effectively resolved for the Court at the
outset.
[23] The most unsettling observation, Mr. Hyslop,
which I have is that if Mr. Underhill had come before me on behalf of his
company, but unrepresented by legal counsel, there was a very good chance that
I may have been able to come to the conclusion that the workers were in fact
independent contractors and not employees throughout this period in question,
thereby effectively eliminating the Appellant’s responsibility to pay any of
the amounts assessed against it by the Minister.
[24] It is most unfortunate that these appeals were
handled in the manner they were, and unfortunately for this Appellant, I must
dismiss both appeals.
Signed at Ottawa, Canada, this 18th
day of January 2007.
Campbell J.
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