Date: 20010221
Docket: 1999-4677-IT-I
BETWEEN:
FRANCE CHAMPEAU,
Appellant,
et
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the bench on January 23, 2001
at Montreal, Québec and revised at Ottawa, Ontario on
February 21, 2001)
Lamarre Proulx, T.C.J.
[1]
These are appeals from reassessments made by the Minister of
National Revenue (the "Minister") for the taxation
years 1994 and 1995.
[2]
These assessments were made on the assumptions of fact described
at paragraph 26 of the Reply to the Notice of Appeal as
follows:
a)
the Appellant was a co-ordinator for the marketing division for
Virtual Prototype Inc. (hereinafter "the
employer");
b)
the Appellant mentioned to our auditor that she was at first,
hired as an employee of Virtual Prototype Inc. in 1993;
c)
the functions and the remuneration of the Appellant remained the
same throughout her employment with the employer;
d)
the Appellant was working on day to day operations;
e)
the Appellant was working under the supervision of the
employer;
f)
the Appellant was working full time for the employer;
g)
the Appellant's duties have always been the same from the
beginning of her employment for the employer;
h)
the Appellant always had an office at the employer's place of
business and she worked there;
i)
the Appellant has never been employed by any other employer while
she was working for the employer;
j)
the Appellant has always been paid the same amount
bi-monthly by the employer at the same time as the other
employees;
k)
the Appellant was reimbursed all employment expenses by the
employer;
l)
the Appellant had to complete a form to be reimbursed for her
expenses;
m)
the rate of the Appellant's wages has always been the same
from the beginning of her employment for the employer;
n)
during the audit, the representative of the employer had no
explanation regarding any modification in the Appellant's
status;
o)
during the audit, the representative of the employer admitted
that the Appellant was an employee of the employer;
p)
the working conditions of the Appellant were similar to the other
employees's working conditions with the employer;
q)
based on the preceding sub-paragraphs, the Minister
reasssessed the Appellant, among other things, as follows for the
1994 and 1995 taxation years;
Description
1994
1995
Employment
earnings
$51,516 $66,318
Net business
income
($39,723)
($36,316)
Gross business income
($56,508)
($52,062)
r)
In the employer's file, there was an audit relatively to the
deductions at the source which originated from information
received by Revenue Québec;
s)
Danielle Houle, auditor for Revenue Canada, conducted the audit
and rendered a decision based on the facts collected through the
audit that she did;
t)
While conducting her audit, Danielle Houle asked the Insurability
Department of Revenue Canada an opinion as to the employment
status of certain employees of the employer including the
Appellant;
u)
Ginette Paquette, agent de Participation RPC/A-C was assigned the
file;
v)
On July 4th, 1996, Ginette Paquette sent a letter to the
Appellant asking her to contact Revenue Canada as soon as
possible because of the fact that Ginette Paquette had not been
able to reach the Appellant by phone relatively to her employment
for the employer;
w)
Ginette Paquette received no representations whatsoever from the
Appellant or from a representative of the Appellant and she could
not therefore render an opinion as to the employment status of
the Appellant;
x)
Danielle Houle then assessed the company based on the information
that she had on file which she collected during her audit;
y)
On July 8th, 1997, Paul Leduc of Revenue Canada completed a T133
from (Indices fiscaux ou renseignements concernant un projet)
relatively to the Appellant stating that following an audit of
the employer, Danielle Houle, auditor for Revenue Canada
established that the Appellant's status should be changed to
that of employee and thus the expenses for 1993, 1994 and 1995
should be refused;
z)
Following that document, Karim Benahra, auditor for Revenue
Canada, was assigned the Appellant's file to conduct an
audit;
aa)
On March 4th, 1998, Karim Benahra sent a letter to the Appellant
with the proposed changes. He mentioned in the letter that the
new assessments were delayed until March 26th, 1998 and that
the Appellant could contact him if there were any questions;
bb) On
March 11th and 17th, Karim Benahra spoke to the Appellant's
representative. Nothing was said about the conditions of
employment;
cc)
On May 6th 1998, Karim Benahra sent a letter to the Appellant
stating that the audit was completed. That letter also contained
the proposed changes and a mention that the file would not be
transferred to the Montreal Revenue Canada Office;
dd) The
assessment under appeal for the 1994 taxation year was issued on
May 21st, 1998;
ee)
The Appellant filed a Notice of Objection dated August 10th,
1998, relatively to the assessment of May 21st, 1998;
ff)
The Objection was handled by Alain Solliec, Appeals Agent for
Revenue Canada;
gg)
Representations by the Appellant's representative,
Richard Venor, C.A., were done for the Appellant's file
and Claire Champeau's file;
hh) The
Appellant's representative refused to discuss the conditions
of employment of the Appellant with Alain Solliec;
ii)
The study of the Appellant's file was thus based on the
information in the file;
jj)
On July 14th, 1999, Alain Solliec called the representative. The
latter stated he would send representations;
kk)
On July 16th, 1999, a letter was sent by the representative to
Alain Solliec which state opinions as to the actions of Revenue
Canada;
ll)
On August 19th, 1999, Alain Solliec met with the representative
of the Appellant and of France Champeau. No representations were
made relatively to the working conditions of both the Appellant
and Claire Champeau.
mm) The Notice
of Confirmation was issued on August 31st, 1999.
[3]
At the hearing, the Appellant's representative informed the
Court that the Appellant's only grounds for appealing were
that the principles of natural justice had been contravened
regarding the administration of the Employment Insurance
Act. He also informed the Court that the Appellant was not
present because she worked and resided in Scottsdale, Arizona and
her presence was not needed in view of the grounds of appeal. He
had not either requested the presence of an employer's
representative. He stated that the Appellant had been entitled to
file a notice of objection and to appeal under the Income Tax
Act. His concern was the application of the principles of
natural justice regarding the application of the Employment
Insurance Act.
[4]
Counsel for the Respondent made a motion that the case be
dismissed for failure to bring forward the proper evidence. The
motion was granted. Principles of natural justice regarding the
administration of the Employment Insurance Act may be
relevant regarding a decision on the insurability of employment
made under that act. They are not relevant to an appeal from an
assessment under the Income Tax Act. Whether a person is
an employee or self-employed is a matter of fact and law.
It is essential that evidence regarding the working conditions of
the worker be adduced at the time of hearing. As there were no
reasonable explanations for the failure to adduce the proper
evidence and there was no intent to adduce such evidence, the
appeals must be dismissed.
Signed at Ottawa, Canada, this 21st day of February 2001.
"Louise Lamarre Proulx"
J.T.C.C.
COURT FILE
NO.:
1999-4677(IT)I
STYLE OF
CAUSE:
France Champeau and The Queen
PLACE OF
HEARING:
Montreal, Québec
DATE OF
HEARING:
January 23, 2001
REASONS FOR JUDGMENT
BY:
The Hon. Judge Louise Lamarre Proulx
DATE OF
JUDGMENT:
February 21, 2001
APPEARANCES:
Agent for the
Appellant:
Richard Venor
Counsel for the
Respondent:
Pascale O'Bomsawin
COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-4677(IT)I
BETWEEN:
FRANCE CHAMPEAU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on January 23, 2001 and
judgment delivered orally
from the bench on the same day at Montreal,
Québec, by
the Honourable Judge Louise Lamarre Proulx
Appearances
Agent for the
Appellant:
Richard Venor
Counsel for the
Respondent:
Pascale O'Bomsawin
JUDGMENT
The
appeals from the assessments made under the Income Tax Act
for the 1994 and 1995 taxation years are dismissed.
Signed at Ottawa, Canada, this 30th day of January, 2001.
J.T.C.C.
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