[OFFICIAL ENGLISH TRANSLATION]
Date: 20010628
Docket: 1999-3494(EI)
BETWEEN
ROD JAZRA OP. CHECK-MATE INVESTIGATIONS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
YVAN GAUTHIER,
Intervenor,
AND
1999-3495(EI)
SHERRILL NOVOSAD OP. SPOCK R.D. INTERNATIONAL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
YVAN GAUTHIER,
Intervenor,
AND
1999-3496(EI)
SHERRILL NOVOSAD OP. SHERIFF & MARSHALL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
YVAN GAUTHIER,
Intervenor,
AND
2000-890(EI)
SHERRILL NOVOSAD OP. SHERIFF & MARSHALL,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
2000-891(EI)
ROD JAZRA O/S CHECK-MATE INVESTIGATIONS,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Charron, D.J.T.C.C.
[1] These appeals were heard on common
evidence at Montréal, Quebec, on April 17, 2001, to
determine whether Yvan Gauthier (the worker) held insurable
employment from August 1 to December 31, 1998, when he
was in the service of Rod Jazra and Sherrill Novosad,
doing business respectively under the styles and trade names
Check-Mate Investigations, Sheriff & Marshall and Spock R.D.
International.
[2] Sherrill Novosad requests a
reconsideration of the notice of assessment of employment
insurance issued for 1998 on May 27, 1999, concerning the
following workers: Guiseppe Fragola, Chantale Dion,
Danny Viens, Raymond Habel, Michel Smith,
Yvan Gauthier and Andréa Szokoll (the workers),
when they were all working for Sherriff & Marshall and
Check-Mate Investigations (within the meaning of the
Employment Insurance Act).
[3] By letter dated July 5, 1999,
the respondent informed the appellant Rod Jazra that the
employment was insurable from July 14 to December 1 on
the ground that there was an employer-employee relationship
between Yvan Gauthier and him during the period from
October 26 to December 21, 1998.
[4] By letter dated July 6, 1999,
the respondent informed the appellant Sherrill Novosad that
the employment was insurable from July 14 to
December 1, 1998, because it met the requirements of a
contract of service between Yvan Gauthier and
Sherrill Novosad, doing business under the trade name Spock
R.D. International.
[5] By letter dated July 6, 1999,
the respondent informed the appellant that the employment was
insurable on the ground that there was an employer-employee
relationship between Sherrill Novosad and him from
October 19 to 21, 1998.
[6] By letter dated July 26,
1999, the appellant Sherrill Novosad asked the respondent to
reconsider the notice of assessment of employment insurance
issued for 1998 on May 27, 1999, concerning the workers
Guiseppe Fragola, Chantale Dion, Danny Viens,
Raymond Habel, Michel Smith, Yvan Gauthier and
Andréa Szokoll.
[7] On December 2, 1999, the
respondent replied that he was confirming his notice of
assessment of employment insurance for the workers mentioned
above because those employments met the requirements of a
contract of service from January 1 to December 31,
1998.
Statement of Facts
[8] The facts on which the respondent
relied in making his decisions are stated in paragraphs 21,
5, 5, 9 and 7 of the Replies to the Notices of Appeal as
follows:
Rod Jazra (1999-3494(EI))
[TRANSLATION]
(a) The appellant
had operated an investigation agency under the trade name
"Check-Mate Investigations" since 1991. (admitted)
(b) The worker held
a security or investigation officer's permit issued by the
Ministère de la Sécurité publique of the
Government of Quebec. (admitted)
(c) The worker
rendered services, on call, to the appellant as an investigator
doing shadowing work. (admitted)
(d) The worker:
- went to the site of the investigation;
- informed the appellant that he had just arrived on the
site;
- entered the time of arrival in his report and noted everything
he saw;
- occasionally filmed the individual under investigation using a
video camera; and
- obtained the appellant's permission to leave the site.
(denied)
(e) The appellant
contacted the worker from time to time at the site of the
investigation. (admitted)
(f) At the end
of the investigation, the worker handed his report and the video
cassette to the appellant. (admitted)
(g) The worker used
his automobile and paid most of the automobile expenses.
(admitted)
(h) The appellant
occasionally added one or two hours of work to the worker's
remuneration to reimburse him for gasoline. (denied)
(i) The worker
used his video camera, but the cost of the cassettes was
reimbursed by the appellant. (admitted)
(j) The
cellular telephone belonged to the appellant and he paid its
costs. (admitted)
(k) The worker also
installed an alarm system at the payer's new premises and
assisted in the payer's relocation. (admitted)
(l) The worker
was paid $11 an hour, by cheque, by the appellant. (admitted)
Sherrill Novosad (1999-3495(EI))
[TRANSLATION]
(a) In 1998, the
worker took steps to obtain an investigator's permit.
(denied)
(b) Rod Jazra
(hereinafter the employer), who operated "Check-Mate
Investigations", completed an application form on behalf of
the worker, who obtained his investigator's permit on
July 14, 1998. (denied)
(c) The worker was
then able to act as an investigator solely for an investigation
or security agency. (denied)
(d) The employer was
the sole proprietor of "Check-Mate
Investigations", acting as an investigation or private
detective agency. (denied)
(e) The employer
hired the worker under an oral agreement and assigned him a
marital shadowing job and a case in which he was to film an
individual for the CSST. (denied)
(f) The worker
was on call; he had to complete a form provided by the employer
and enter the place where he went and the time spent at each
place and note everything he had seen. (denied)
(g) All the clients
whom the worker went to see were clients of the employer.
(denied)
(h) The employer
supplied a cellular telephone to the worker, who used his
automobile, a portion of the expenses of which was reimbursed by
the employer. (denied)
(i) The
employer compiled the reports submitted by the worker every week
and remunerated him on the basis of the number of hours worked.
(denied)
(j) The
employer held a liability insurance policy covering the
worker's work. (denied)
(k) The worker was
paid $11 an hour by cheque each week. (denied)
(l) The worker
worked for the employer a number of times and observed that his
pay cheques came from three different businesses: (denied)
The employer ("Check-Mate Investigations");
The appellant doing business under the trade name "Sheriff
& Marshall" (related case);
The appellant doing business under the trade name "Spock
R.D. International" (subject of the instant appeal).
(m) The appellant was the
employer's spouse.
(n) The three
businesses were connected to the field of investigation, private
detective and credit agencies. (denied)
(o) The worker
rendered services to the employer and was remunerated by the
appellant for work performed as an investigator between
July 14 and December 1, 1998. (denied)
(p) During the
period in issue, the worker received a total of $2,595 from the
appellant for work performed for the employer. (denied)
Sherrill Novosad (1999-3496(EI))
[TRANSLATION]
(a) In 1998, the
worker took steps to obtain an investigator's permit.
(denied)
(b) Rod Jazra
(hereinafter the employer), who operated "Check-Mate
Investigations", completed an application form on behalf of
the worker, who obtained his investigator's permit on
July 14, 1998. (denied)
(c) The worker was
then able to act as an investigator solely for an investigation
or security agency. (denied)
(d) The employer was
the sole proprietor of "Check-Mate
Investigations", acting as an investigation or private
detective agency. (denied)
(e) The employer
hired the worker under an oral agreement and assigned him a
marital shadowing job and a case in which he was to film an
individual for the CSST. (denied)
(f) The worker
was on call; he had to complete a form provided by the employer
and enter the place where he went and the time spent at each
place and note everything he had seen. (denied)
(g) All the clients
whom the worker went to see were clients of the employer.
(denied)
(h) The employer
supplied a cellular telephone to the worker, who used his
automobile, a portion of the expenses of which was reimbursed by
the employer. (denied)
(i) The
employer compiled the reports submitted by the worker every week
and remunerated him on the basis of the number of hours worked.
(denied)
(j) . . .
(k) The worker was
paid $11 an hour by cheque each week. (denied)
(l) The worker
worked for the employer a number of times and observed that his
pay cheques came from three different businesses: (denied)
The employer ("Check-Mate Investigations");
The appellant doing business under the trade name "Sheriff
& Marshall" (subject of the instant appeal);
The appellant doing business under the trade name "Spock
R.D. International" (related case).
(m) The appellant was the
employer's spouse. (denied)
(n) The three
businesses were connected to the field of investigation, private
detective and credit agencies. (denied)
(o) The worker
rendered services to the employer and was remunerated by the
appellant for work performed as an investigator on
October 19, 20 and 21, 1998. (denied)
(p) The worker
received a cheque for $313.50 from the appellant for that work,
whereas the appellant claims that he relocated her business and
received $487.52 for the work. (denied)
Sherrill Novosad (2000-890(EI))
[TRANSLATION]
(a) Prior to the
period in issue, the appellant operated a dog rental service
under the trade name "Sherriff & Marshall".
(admitted)
(b) The
appellant's business was inoperative during the first eight
or nine months of 1998 but changed purpose and started again in
September 1998 as a tracing business (investigation), mainly
outside the country. (admitted)
(c) The appellant
was sole proprietor of the business and her spouse,
Rod Jazra, acted as director and sole employee of the new
business. (admitted)
(d) Furthermore,
Rod Jazra was sole proprietor of a detective agency offering
spying, shadowing, investigation and tracing services which he
operated under the trade name "Check-Mate
Investigations". (admitted)
(e) Mr. Jazra
held the mandatory permit, issued by the Attorney General, to
operate an investigation or security agency. (admitted)
(f) During the
period in issue, the payer hired the workers as investigators
working on call and part time. (denied)
(g) During the
period in issue, the workers rendered services to Rod Jazra
under a contract of service and were remunerated by the
appellant's business. (admitted)
(h) The appellant
was required to withhold and pay employment insurance premiums on
the remuneration she paid to the workers concerned by the
assessment dated May 27, 1999. (denied)
Rod Jazra (2000-891(EI))
[TRANSLATION]
(a) The appellant
operates a detective agency and offers spying, shadowing,
investigation and tracing services. (admitted)
(b) The appellant
was sole proprietor of the business he operated under the trade
name "Check-Mate Investigations". (admitted)
(c) The appellant
held the mandatory permit, issued by the Attorney General, to
operate an investigation or security agency. (admitted)
(d) During the
periods in issue, the appellant hired the workers as
investigators working on call and part time. (admitted)
(e) To work for the
appellant, each investigator had to obtain an investigator's
permit from the Sûreté du Québec allowing
them to work solely for the appellant. (denied)
(f) The
investigator could not work as a self-employed investigator
because he then had to pay a $10,000 bond to obtain an agency
operating permit (like the appellant). (admitted in part)
(g) The workers had
to investigate for the clients of the appellant, who gave them
every instruction and directive concerning the investigation to
be conducted. (admitted)
(h) As part of the
work, the workers had to provide their automobile, cellular
telephone, pager and video camera without compensation from the
appellant. (admitted)
(i) The
workers went to the place designated by the appellant and had to
report, stating the hours worked, on the surveillance done for
the appellant's client. (admitted)
(j) The
workers were paid an hourly wage determined with the appellant
and based on the hours actually worked. (admitted)
(k) During the
periods in issue, the workers were paid by cheque drawn on the
appellant's account; at certain other times, the workers were
paid by cheque drawn on the account of Sherill Novosad, the
appellant's spouse, operating a business under the trade name
"Sheriff & Marshal". (admitted)
(l) Although
they were almost always on the road, the workers communicated
with the appellant several times a day to follow up on their
shadowing and obtain new instructions. (admitted)
(m) The investigator could
not be held liable for professional misconduct in the context of
his work; the appellant held mandatory liability insurance for
this purpose. (denied)
(n) When a worker
ceased to work for the appellant, he had to hand his permit to
the appellant. (denied)
[9] The appellants admitted the truth
of the facts alleged in the subparagraphs of the above paragraphs
reproduced from the Replies to the Notices of Appeal concerned,
except those they denied, as indicated in parentheses at the end
of each subparagraph.
Rod Jazra's Testimony
[10] Mr. Jazra has been a private
detective under the Act respecting detective or security
agencies since 1990. He has employed workers and
investigators who are employees when they work for an agency or
self-employed workers. An investigator must supply his own car,
camera, pager and binoculars. He has never had any full-time
employees. All his workers are on call and are entitled to work
for other employers. Sheriff & Marshall International and
Spock R.D. International are not in any way investigation
agencies. Only Check-Mate is an investigation agency
(Exhibit A-1). Sheriff & Marshall International
handles only international assignments and belongs to
Sherrill Novosad, the spouse of the witness. As to Spock
R.D. International, it is not an investigation agency either. The
two entities are administered by Rod Jazra for
Sherrill Novosad. Jazra occasionally used the cheques of the
two businesses when he was short of funds in his business,
Check-Mate Investigations. No Check-Mate employee ever
worked for Sheriff & Marshall International or for Spock R.D.
International. Yvan Gauthier worked for Check-Mate as
a self-employed worker. He also worked for Sears as a carrier.
The wages he received from those businesses were mistakenly
accounted for in Check-Mate's computer.
[11] Jazra admitted that he had operated an
investigation agency under the trade name Check-Mate
Investigations since 1991. Gauthier held a security or
investigations officer's permit issued by the
Ministère de la Sécurité publique du
Québec. The worker rendered services to the appellant, on
call, as an investigator shadowing. Jazra occasionally contacted
Gauthier at the site of the investigation. At the end of the
investigation, Gauthier submitted his report and the video
cassette to Jazra. Gauthier used his car and paid most of the
automobile expenses; Jazra sometimes added one or two hours of
work to Gauthier's remuneration to pay for gas. Gauthier used
his video camera and Jazra's cellular phone, but the cost of
the cassettes was reimbursed by the appellant. Gauthier installed
an alarm system on the payer's premises and helped him
relocate. Gauthier received $11 a hour paid by cheque. In docket
1999-3495(EI), at paragraph 7, the respondent states
that the worker held insurable employment with the employer,
Rod Jazra, while being remunerated by the appellant, since,
during that period, the employer and the worker were bound by a
contract of service within the meaning of
paragraph 5(1)(a) of the Employment Insurance
Act.
[12] At the origin of the Minister's
decision in this case is Sherrill Novosad's application
for a ruling on the insurability of Gauthier, whereas in docket
1999-3494(EI), at subparagraphs 21(a), (c), (e) to (g)
and (i) to (l) of the Reply to the Notice of Appeal, Jazra admits
that Gauthier was employed by him at Check-Mate. Gauthier
was paid by three companies: Jazra's company and
Ms. Novosad's two companies.
Yvan Gauthier's Testimony
[13] This individual is a truck driver and
works for Jazra as an investigator. Jazra completed an
application form for a permit and handed it to Gauthier to enable
him to obtain a permit from the Sûreté du
Québec. He is now an investigator registered with the
Sûreté in the name of Check-Mate, whose badge he
wears. When he receives a call from Jazra, Gauthier goes to the
offices of Check-Mate to receive his mandate. Gauthier telephones
Jazra for advice as problems arise. He may not leave an
assignment without requesting permission in advance. He must
complete a time sheet on arrival and departure in order to
determine his pay cheque. He must record the distances of car
trips taken to obtain compensation¾in time, not in
money¾for gasoline consumption. At the end of a shadowing
assignment, the worker must submit a handwritten report. Gauthier
never worked for other investigation businesses; he was paid by
cheque issued by Check-Mate, sometimes by Sheriff & Marshall
and at times by Spock International. The cheques were always
signed by Jazra. Gauthier owned a camera, but not the cellular
telephone he used, which belonged to Jazra or Check-Mate.
The worker had to pay the cost of his own telephone calls and
could be reimbursed for those he made for the payer. In addition,
he had to pay for the first video cassette used; subsequent
cassettes were supplied by the payer. Gauthier was paid by the
hour; according to his pay cheque, he worked for Spock and
Sheriff & Marshall and Check-Mate and Jazra. Jazra alone
knows which it was.
Analysis of the Facts in Relation to the Law
[14] It must now be determined whether the
workers' activities' are included in the notion of
insurable employment, that is to say whether there was a contract
of service.
[15] The case law has stated four essential
tests for establishing a contract of service. The decisive case
in the matter is City of Montreal v. Montreal Locomotive Works
Ltd., [1947] 1 D.L.R. 161. The tests are as follows:
(1) control, (2) ownership of the tools,
(3) chance of profit and (4) risk of loss. The Federal
Court of Appeal added the degree of integration in Wiebe Door
Services Ltd. v. M.N.R., [1986] 3 F.C. 553, but
this enumeration is not exhaustive.
[16] The burden of proof is on the
appellants. In docket 1999-3495(EI), the appellant
Sherrill Novosad denied all the subparagraphs of
paragraph 5 of the Reply to the Notice of Appeal. Being
absent at the time of the appeal, she designated Rod Jazra
to represent her. Mr. Jazra testified that none of his
employees had ever worked for Sheriff & Marshall or for Spock
International, thus for Sherrill Novosad. Yvan Gauthier
was an employee of Check-Mate and had self-employed status.
Rod Jazra therefore did not discharge his obligation to
refute Sherrill Novosad's evidence
(1999-3495(EI)). In docket 1999-3494(EI),
Yvan Gauthier worked for Rod Jazra as an investigator
with Check-Mate. Upon receiving a call from Jazra, he went to the
offices of Check-Mate to receive his mandate for the day. He
would stay in contact with Jazra throughout the entire day. He
could not leave his post without Jazra's permission. He
completed a time sheet on a daily basis and was paid by
Check-Mate, at times by Sheriff-Marshall and sometimes by Spock
International. The cheques were signed by Jazra. Gauthier did not
know for whom he worked. Only Jazra knew. Gauthier worked for
Check-Mate under Jazra's control. Most of his tools belonged
to him. Thus, since the appellant admitted all the subparagraphs
of paragraph 21 of the Reply to the Notice of Appeal in
docket 1999-3494(EI), except subparagraphs (d) and
(b), there is no doubt that Gauthier and the payer were governed
by a contract of service and that the appellant did not succeed
in refuting the evidence.
[17] In docket 1999-3496(EI), the
appellant is Sherrill Novosad and she denied all the
subparagraphs of paragraph 5 of the Reply to the Notice of
Appeal through her agent, Rod Jazra, who thus failed to
prove the case in 1999-3496(EI) as well.
[18] In dockets 2000-890(EI) and
2000-891(EI), the appellants failed to have a number of
witnesses heard and the respondent had to render his decisions on
the evidence before him. In such a case, what attitude must the
Court adopt regarding the gaps in the evidence?
[19] The testimonies of Rod Jazra and
Yvan Gauthier contain numerous hesitations and are full of
obvious contradictions. I conclude from this that they did not
testify in good faith and are not credible. They failed to
mention important facts that were essential in revealing the
whole truth.
[20] Accordingly, the appeals are dismissed
and the decisions of the Minister are confirmed.
Signed at Ottawa, Canada, this 28th day of June 2001.
D.J.T.C.C.
Translation certified true
on this 20th day of January 2003.
Sophie Debbané, Revisor
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