|
Citation No. 2005TCC123
Date: 20050218
|
|
Dockets: 2003-3789(EI)
2003-4162(EI)
2004-493(EI)
2003-4520(EI)
|
|
BETWEEN:
|
|
ROBERT FITZGERALD, WALTER PRESHYON,
RAYMOND FRICKER AND ELDON SAMPSON,
|
|
Appellants,
|
|
and
|
|
|
|
THE MINISTER OF NATIONAL REVENUE,
|
|
Respondent.
|
REASONS FOR JUDGMENT
(Delivered orally from the Bench at
Sydney, Nova Scotia on December 9, 2004)
Margeson J.
[1] The matters before the Court at
this time for decision are Robert Fitzgerald v. Minister of
National Revenue, 2003-3789(EI), Walter Preshyon,
2003-4162(EI), and Raymond Fricker, 2004-493(EI).
[2] The periods during which they were
alleged to have been engaged in insurable employment are set out
in the Replies, and those are the periods with which the Court is
dealing.
[3] The Court has come to the
conclusion, not reluctantly so, either, because it is quite
obvious what the facts in this case dictate, that these appeals
must be dismissed.
[4] There are two basis for dismissing
these appeals. One, there were no contracts of service in
existence between the parties. If there were contracts of service
then they were contracts of convenience, which were entered into
for the sole purpose of taking advantage of the provisions of the
Employment Insurance Act and such contracts of
service are not envisaged by the Employment Insurance
Act.
[5] First of all, the factual
situation as disclosed by the evidence, was the classic case as
set out in Wiebe Door Services Ltd. v.
M.N.R.[1] That
was the classic case of independent contractor versus contract of
service.
[6] This type of work did not lend
itself to a contract of service. For there to be a contract of
service there has to be supervision. There has to be control. In
this particular case and in cases where the issue is between
contract for and contract of services, supervision or control is
oftentimes the dominating or determining factor.
[7] As Wiebe Door supra
says, one should not look at the factors in a mathematical way
and add them up and say three of the factors are present and one
is not and therefore there is a contract of service. One has to
look at all of the factors as a four-in-one test. The weight
given to one factor may be greater than the weight given to
another factor in any one case. I use that approach here rather
than the fourfold test.
[8] As counsel for the Respondent
suggested, there was little or no supervision of these workers.
They made it quite clear that they received little or no
supervision. They never intended to be supervised. Even the last
witness, Mr. Fricker, who was not even an experienced
woodcutter (except that he cut his own wood) said that he
received little or no supervision and was subject to little or no
control by the purported employer.
[9] In his case he rented the saw from
the payor and also bought the gas and oil from her. Basically the
payor said, here's a plot of land upon which are located or
situate some trees. You go and cut them down and pile them up
neatly and clear away the brush. Later on we'll come and pick
them up and sell them and we'll pay you so much a cord. That's
all that it was. There was no other supervision for him or the
others who were experienced woodcutters and who obviously needed
even less supervision than he did.
[10] The Appellants indicated that the payor
visited the site on a number of occasions to insure that they
were not leaving pieces of wood, branches and limbs all over the
place so as to insure that the site was neat, that the wood was
piled up and that they could identify it. Apart from that, the
Court is satisfied that the payor never showed up at the sites.
It was impossible to determine from the evidence how many times
she showed up at the worksite, but they were few and far
between.
[11] The Court asked Walter Preshyon in
particular about the matter of supervision and he indicated that
he was an experienced woodcutter and that he didn't need any
supervision. He didn't need control. Further, the payor was not
an experienced woodcutter. She was a business person and knew
very little about woodcutting or piling of the wood. She was
basically a buyer of wood.
[12] The Court is satisfied that there was
no supervision and no one intended there to be any. That is very
important in this case. It is the most important factor here. Any
semblance of supervision that there might have been was not
supervision as envisaged by Wiebe Door, supra.
[13] It is quite clear that the Appellants
worked when they wanted to. It is impossible to determine with
certainty when they worked because the records are quite
unbelievable and inconsistent. There is no evidence whatsoever to
corroborate the accuracy of the Appellants' testimony. Each
one testified before the Court that the records of employment
were complete and accurate insofar as they were concerned but
those statements were not corroborated or explained by any
records of their own or any other records that might justify
their testifying as they did.
[14] After hearing the evidence of Beverley
Campbell, the Court is satisfied that the records are not
accurate or complete. In spite of the evidence of the Appellants
as to when they cut the wood, as to when they started it and when
they finished, the Court is unable to determine when they
worked.
[15] Further, there is no doubt that they
chose their own hours of work. They chose what days they worked
and they chose when they worked during those days when they chose
to work. The payor had no input into those matters.
[16] From any reasonable interpretation of
the direct evidence, and any reasonable presumptions that the
Court is entitled to draw from the evidence, the Court must
conclude that sometimes they would stop in the middle of the day
and they would stop when they felt like it.
[17] Some of them said that they worked
right through the rain at times and sometimes almost from
daylight to dark. However, the Court finds that to have been
rather unlikely.
[18] In any event the work that they decided
to do was work of convenience. They worked when they wanted to
but the Court is unable to determine just how long they actually
worked.
[19] With respect to tools of the trade, in
every case except in the case of Mr. Fricker, everybody
owned their own tools. They owned their own saws. They owned
theirs own chains. They owned their own files. They supplied
their own gas. They supplied every other piece of equipment that
they needed.
[20] In Mr. Fricker's case, the payor took
the cost off of his pay before he received the balance. All of
the other workers had to supply their own, even though they might
have bought them from the payor.
[21] In essence, all of the Appellants were
working for themselves. They were working on their own. They were
working under contracts for services like the tradesmen in
Wiebe Door, supra.
[22] Further, they were paid not by the hour
or week but by the cord. This is also consistent with a contract
for services (although not determinative of one).
[23] In their evidence, the Appellants
always referred to the hours that they worked but it was obvious
to them that the hours didn't make any difference whatsoever. The
only significance of that factor was with respect to the
Employment Insurance Regulations, which calculate their benefits
on the basis of hours rather than on the basis of how much money
they earned. That did not affect the situation here because no
one kept track of the hours.
[24] One witness said that he did have a
record, but unfortunately, he didn't have it with him and,
consequently, he was unable to corroborate the information
contained in the Record of Employment.
[25] The factors of risk of loss and chance
of profit speak in favour of a contract for services rather than
a contract of service because the Appellants made it quite clear
that they could work as long as they wanted to, they could stop
when they wanted to, they were paid twenty-five to thirty dollars
($25 - $30) per cord, so if they cut 50 cords they would make a
certain amount of money and if they cut 60 cords a day, they
would make more. The decision was theirs and the hours were
obviously determined by the number of hours they decided to work
and not by the payor. If they worked less they were paid less and
that was a risk of loss.
[26] It is obvious that the amount of money
that was earned by each worker was not determined by the hours
that they worked but by the skill of the cutters and the
conditions of work, such as the stand of timber and the presence
or absence of underbrush or other impediments in the work
place.
[27] With respect to risk of loss, the
Appellants shared a real risk of loss because if they didn't
handle their saws properly, did not keep them sharp, used too
much oil, too many files or too much gasoline, then the amount of
money they earned would be severely reduced. This factor favours
a contract for services.
[28] The Court is satisfied that when you
ask the question, whose business was this, the answer has to be,
that of the workers. The business was all about cutting wood and
piling it. The work of the payor was buying wood and selling it.
The workers had nothing to do with that. The work of the
Appellants was not integrated into the work of the payor.
[29] The terms and conditions are of some
importance. Here, the workers came and went as they pleased.
There were no set hours for them. They could have worked from
daylight to dark. There was no supervision or control. All of
these factors favour the finding of a contract for services.
[30] Further, if the Court had been able to
conclude that there was a contract of service, the
Appellants' duty was to establish how many hours they worked.
On the basis of the evidence before the Court, which can be
believed, this cannot be done. The number of hours of work cannot
be ascertained and the period of work cannot be ascertained.
[31] When the Appellants were asked pungent,
searching questions about their hours of work, their answers were
evasive, inconclusive, inconsistent and were inconsistent with
other evidence given.
[32] When Ms. Campbell went on the stand and
gave the evidence that she did, the Court was satisfied beyond
any doubt that these records that had been presented by the
workers were completely incapable of belief and the Court is
satisfied that they are not factual.
[33] On the contract of service argument,
the Court is more than satisfied that there were no contracts of
service. These were obviously contracts for services.
[34] On the second argument, the Court is
satisfied on that as well that if there was employment, it this
was employment of convenience.
[35] This is the type of employment that
Justice Tardif was talking about in Laverdiere v.
Canada(Minister of National Revenue), [1999] T.C.J.
No. 124.
[36] The facts in the case at bar are
similar to the factual situation in this case. At page 7,
Tardif J. said:
"Instead, it was brought out at the hearing that the records
of employment issued on the basis of the payroll records were
shaped by a variety of considerations such as unemployment
insurance benefits, compensation for the remoteness and isolation
of the driving school in St-Pamphile and also incentive bonuses
taking into account responsibility for the office. The payroll
record did not reflect the mathematical precision that ought to
result from basically adding up the hours actually worked at the
agreed hourly wage."
[37] The same can be said of the situation
in the case at bar.
[38] The Records of Employment were created
so as to enable the workers to obtain "the best possible
stamp".
[39] Tardif J. said at paragraph 50:
"This is the case with any agreement or arrangement whose
purpose and object is to spread out or accumulate the
remuneration owed or that will be owed so as to take advantage of
the Act'sprovisions. There can be no contract of service where
there is any planning or agreement that disguises or distorts the
facts concerning remuneration in order to derive the greatest
possible benefit from the Act."
[40] Further, at paragraph 51 he said:
"The Act insures only genuine contracts of service; a contract
of employment in which remuneration is not based on the period
during which work was performed cannot be defined as a genuine
contract of service. ..."
[41] That is the problem in the case at bar.
When was the work performed? For how long? The ROEs say one
thing, but the evidence clearly indicated something else.
[42] That is not a genuine contract of
service. It is an agreement or arrangement that is inconsistent
with the existence of a genuine contract of service such that it
includes elements foreign to contractual reality required by the
Act.
[43] It has been pointed out that the payor
was not here. However, the Court is satisfied that the payor is
not here because she was sick. The Court will not draw any
unfavourable inference against the parties because the payor was
not here.
[44] Had the payor been here she might have
been able to shed some light on the records, but in light of what
Ms. Campbell said, the Court does not think that her evidence
would have changed the result.
[45] With respect to credibility, the Court
finds that the evidence of the workers was inconsistent. It was
incomplete. They didn't seem to know anything about the factual
situation, when they started working or when they stopped
working.
[46] They merely looked at the Records of
Employment and said that they were correct. In most cases their
evidence was not forthright and the Court and counsel for the
Respondent had to pull every answer out of them or there would
have been very little to go on.
[47] That is not the type of evidence which
lends itself to a finding of credibility. When there is any issue
about credibility, the Court certainly accepts the evidence of
the other witnesses where their evidence contracted the evidence
of the Appellants or brought their evidence into conflict or into
disrepute.
[48] There was no correlation between the
information set out in the ROEs and the other records which were
available to the investigator. Based upon the evidence she gave
in Court and the evidence which came out in the statement, the
Court is not satisfied that the Appellants have proven that the
information contained in the ROEs was correct.
[49] It is true that Mr. Preshyon did not
sign the statement. He said that he did not want to sign it but
he did initial it. After hearing the evidence this morning that
was given by Dino Sophocleous, the Court is satisfied that
he gave Mr. Preshyon every opportunity to read the
statement. The Court is satisfied that what was said in the
statement was what the witness said and what he said in Court was
not correct.
[50] Contrary to what Mr. Preshyon said
in court, the Court is satisfied that Mr. Sophocleous did
not try to change around what the Appellant had to say and the
Court is satisfied that the statement makes it quite clear that
what was going on was work of convenience.
[51] What the workers were doing was piling
up wood over a longer period of time in order to claim that they
cut the wood over a shorter period of time so that when you took
the total number of days over which they were working they would
have received a higher stamp. That was the whole purpose of it.
It's quite obvious what it was.
[52] This is similar to what Tardif J. was
talking about in Laverdiere, supra. This is what is called
"banking of hours." In this particular case, it was banking of
wood in order to release it at the most convenient time so as to
obtain the higher stamp since the amount of wood was used to
calculate the insurable time.
[53] Ms. Campbell had the opportunity of
examining not only the ROEs but also the records of Stora (the
buyer), the records of the payor and income tax records.
[54] A further problem with respect to
Mr. Preshyon was that he was not in perfect health. As a
matter of fact, he was drawing Canada Pension Plan benefits.
How could he draw Canada Pension Plan benefits if he wasn't
disabled? He was feigning his illness so he could obtain CPP
benefits or he was drawing CPP benefits and working under a great
deal of pain. One finds that difficult to accept. Otherwise he
didn't do the cutting at all. Somebody else did the cutting and
merely put the information down on his Record of Employment.
Those are the only alternatives.
[55] He tried to say on the witness stand
that he didn't draw CPP for 12 months, but it's quite obvious
that he did. The records make it quite clear. There's no way a
person would forget that. The only reason you would forget would
be because you don't want to remember it.
[56] And so, again, that raises into
question the credibility of Mr. Preshyon, apart from the
unfavourable conclusion the Court has already drawn about the
nature of his testimony.
[57] At the end of the day, then, for all of
these reasons, the Court is satisfied that the Appellants have
not met the burden upon them of establishing that this was
insurable employment. The appeals are dismissed and the
Minister's decisions are confirmed.
Margeson J.
Email this Content