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Citation: 2004TCCI367
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Date: 20040514
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Docket: 2003-2412(EI)
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BETWEEN:
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CAMIL OUELLET,
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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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[OFFICIAL ENGLISH TRANSLATION]
REASONS FOR JUDGMENT
Tardif J.
[1] This
is an appeal of a decision dated April 15, 2003. The decision held
that the Appellant's work during the period from June 23 to
September 28, 2002, for Société 9104-5658 Québec Inc., was not
insurable because there was not a genuine contract of service.
[2] To
explain and justify the decision under appeal, the Respondent relied upon the
following assumptions of fact:
[TRANSLATION]
(a) The Payor,
established on May 18, 2001, specializes in the purchase and sale of
small fruits;
(b) The Payor's sole
shareholder is Daniel Racine;
(c) The Payor's
activities are seasonal and take place from summer to fall;
(d) The Payor
primarily buys blueberries on the north shore of the St. Lawrence River
and sells them to Montréal retailers;
(e) The Appellant was
hired by the Payor under a verbal agreement;
(f) The Appellant's
duties included buying blueberries from blueberry growers or independent
pickers, checking their quality, weighing and pouring them into wood baskets
and then storing them in his garage;
(g) An equal amount
of blueberries was bought from both blueberry growers and independent pickers;
(h) Blueberry pickers
came to the Appellant's home and he organized his own work schedule;
(i) The Appellant
was responsible for the cost of the advertising identifying him to blueberry
pickers as the buyer;
(j) There was no
specific agreement between the Payor and the blueberry sellers;
(k) The Payor set the
price of the blueberries purchased by the Appellant;
(l) The Appellant
assumed a loss of income when he had to resell, at a lower price, lower quality
blueberries that the Payor had turned down;
(m) The Appellant, who
used his garage as a warehouse, had to pay for the purchase of a ceiling fan;
(n) The Appellant
used an office in his personal residence in order to compile his purchases;
(o) The Appellant had
taken out public liability insurance;
(p) The Payor did not
exercise any control over the Appellant's work. He came to the Appellant's home
every two days in order to collect the blueberries and to return empty
baskets at the same time;
(q) The harvest began
during the first week of August and ended on September 28, 2002;
(r) From June 23
to the beginning of August 2002, the Appellant only repaired some broken
baskets supplied by the Payor and put together cardboard boxes containing small
berries;
(s) The Appellant was
responsible for hiring staff to replace him when he was absent;
(t) During the period
at issue, he occasionally used the services of his daughter;
(u) The Appellant
received a weekly gross pay of $700, which was paid in cash to him every
two weeks.
[3] Several
facts that had been denied were proven to be true; I refer specifically to
paragraphs (a), (b), (h), (m), (n), (o), (q) and (t). The facts admitted
are those in paragraphs (c), (d), (e), (f), (i), (j), (k) and (u).
[4] During
his testimony, the Appellant minimized the importance of several of the
assumptions of fact. Specifically, he admitted having spent money on
advertising, but he added that this was a very minimal amount.
[5] He
admits that he experienced losses following the purchase of low-quality
blueberries, but he added that there were only a few baskets weighing 14½ pounds
each.
[6] He
admitted having paid for the fan, adding that he installed it himself and that
he spent approximately $35 to buy it.
[7] The
same minimization occurred for the painting and use of his garage, the use of
an office in his home, the cost of telephone calls – which according to the
Appellant were rare – and for the use of the safe which he owned at the
beginning of the period at issue.
[8] He
acknowledged that he had taken out an insurance policy at the beginning of the
2000s when he had tried the blueberry business. The premiums for this coverage
were not large, so he decided to renew the contract each year, which is why the
policy was still in effect during the period at issue.
[9] His
daughter helped him, essentially on an occasional basis, when he had to go to
the bank to get the cash he needed for his operations.
[10] With respect to the work carried out prior to the blueberry harvest at
the end of July or the beginning of August, things were very different; he
therefore stated that the Respondent had minimized the amount of work.
According to the Appellant, he had in fact performed very significant work,
repairing and preparing a great many containers that were to be filled with
blueberries.
[11] From the beginning of the 1990s, the Appellant operated his own carpet
cleaning business, and a "Rambo" brand vacuum cleaner retail,
maintenance and repair business. He indicated that he had totally stopped the
commercial activities of his business during the period at issue, from
June 23 to September 28, 2002.
[12] The Appellant was available at his home very early in the morning
until late every day, especially during the busy season of the blueberry
harvest, from the beginning of July to the end of September, when pickers came
to sell their product to him.
[13] Depending upon the size of the daily purchase, Mr. Racine,
described by the Appellant as his employer, came to take possession of the
berries; he most often gave him the money in cash, so that he could continue
purchasing blueberries.
[14] The Appellant indicated that he was responsible for the accounts; in other
words, if the accounts did not balance, he had to assume the loss.
[15] Since there were surprising facts, at least in some respects, for
someone who did not consider himself an employee or a worker, it would have
been very important to have the Payor testify in order to obtain a more
complete and substantive version of the facts, so that the court could have
more complete and more transparent evidence.
[16] Although the Court accepted the version of the facts submitted by the
Appellant as entirely true, several elements pointed to a conclusion that the
Appellant was operating his own business during the period at issue.
[17] The amounts invested in advertising, equipment purchase (painting and
fan), long distance calls, electricity and use of the space (garage, safe and
office) were not significant expenses, but they were nonetheless elements that
are not part of a contract of service.
[18] Although the tools used already belonged to the Appellant prior to the
beginning of the period at issue, this had no effect on the nature of the work.
[19] Although the losses were not substantial, the Appellant referred to
three baskets of 14½ pounds each; however, he admitted that he was
responsible for unclean or poor quality blueberries. He also indicated that if
the cash did not balance, he was responsible. There is reason to assume that he
was responsible for the consequences of theft of the cash, or a loss of
inventory, in whole or in part, due to spoilage, fire, theft, or other
incident.
[20] The test of whether a given job was carried out under a contract for
services or a contract of service does not necessarily require that there be
factual situations supporting one or the other of the possibilities. It is
sufficient to be able to answer hypothetical questions raised by the presence
or absence of distinguishing criteria.
[21] For example, if an individual must cover advertising costs, own the
work tools and assume all risk related to the activities at issue, the chance
that there is a contract for services is very high, even if no money has been
spent and there have been no losses.
[22] The same principle applies to control; the Federal Court of Appeal has
often recalled that the existence of a contract of service does not require
evidence of actual control, but rather evidence for the existence of power of
control. In other words, the control does not need to be or have been
exercised. It is sufficient for the right of control to exist for there to be a
contract of service.
[23] The sample principle exists with respect to the "chance of profit
and risks of loss" criteria. It is not essential to provide evidence of
substantial profit or loss to qualify a job. It is sufficient to check or
analyze whether the individual who performed the work at issue did or did not
have the chance of profit or risks of loss when performing the work.
[24] Some explanations and various facts reported by the Appellant raised
very real doubts as to truthfulness, therefore it would have been desirable to
have more complete evidence.
[25] I am referring specifically to the absence of the Payor, Racine, the
fact that remuneration was paid in cash, the fact that the work at issue
corresponded to the exact number hours required to qualify for employment
insurance and, finally, the fact that the remuneration was such that it enabled
the Appellant to qualify for the maximum amount of employment insurance
benefits. The Appellant also maintained that he totally interrupted the
activities of the business he had been operating since the beginning of the
1990s, which is more than surprising.
[26] Since the 1990s, the Appellant had been operating a carpet washing and
cleaning business, while selling, servicing and repairing "Rambo"
brand equipment. How can we imagine a person suspending all activities for
three months in order to devote oneself to another job?
[27] In 2000, he had tried his luck in the blueberry business. In 2003, he
returned to this activity, but as a contractor who sold his product to several
buyers. In 2002, he claims to have been simply an employee working under the
orders and guidance of a certain Mr. Racine in exchange for a weekly gross
salary of $700. These facts should have been the subject of more complete
evidence.
[28] The burden of proof was on the Appellant. His testimony was ambiguous
with respect to certain elements that were nonetheless very important for a
full analysis. However, he did raise several elements that strongly supported
the conclusion that the work was performed as part of his own business.
[29] In support of this conclusion, I recall that the Appellant was
responsible for the risks of loss, and that he owned several of the work tools,
the most significant being his garage, his fan, his telephone and his office.
Finally, both before and after the period at issue, he operated his own
business.
[30] With respect to the presence or absence of actual control, it would
have been useful, and in fact essential, for the person claiming to have this
right, a certain Mr. Racine, to appear before the court to demonstrate
that fact.
[31] The Appellant stated that he has been paid in cash. He allegedly
received wages that enabled him to collect the maximum amount of benefits. The
alleged period of insurable work corresponded to the exact number of hours needed
to qualify for employment insurance benefits. Finally, the individual who would
have been able to provide fundamentally important clarification with respect to
the presence or absence of any type of power of control, the alleged Payor, did
not testify.
[32] These are the facts which, together, largely support the decision
which resulted from the Respondent's analysis of the file, that is, that the
Appellant's work was not under a contract of service but as a contractor. Since
the Appellant did not meet the burden of proof upon him by presenting deficient
and incomplete evidence, his appeal must be dismissed.
Signed at
Ottawa, Canada, this 14th day of May 2004.
Tardif J.
on this 10th day
of September 2004.
Shulamit Day, Translator
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