Action Autruche Inc. v. M.N.R., docket 1999-286-EI

Date: 20001114

Docket: 1999-286-EI

BETWEEN :

ACTION AUTRUCHE INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

NATHALIE DAHLSTEDT,

Intervenor.

Reasons for Judgment

Charron, D.J.T.C.C.

[1]      This appeal was heard at Montréal, Quebec, on September 18, 2000, to determine whether the worker, Nathalie Dahlstedt, held insurable employment within the meaning of the Employment Insurance Act from September 8 to October 17, 1997, when she worked for the appellant, Action Autruche Inc.

[2]      By letter dated September 8, 1998, the respondent informed the appellant that the employment in question was insurable because there was an employer-employee relationship between it and the worker during the period at issue.

Facts

[3]      The facts on which the respondent relied in making his decision are set out as follows in paragraph 5 of the Reply to the Notice of Appeal:

[TRANSLATION]

(a)         The appellant, which was incorporated on April 26, 1995, operated an ostrich breeding business. (admitted)

(b)         Alain Poudrette and Gilles Lachance were the appellant's shareholders. (admitted)

(c)         The worker had previously provided services to the appellant as an employee up to September 5, 1997. (admitted)

(d)         The appellant and the worker signed an agreement on September 22, 1997. (admitted)

(e)         The worker was responsible for the incubation and hatching of ostrich eggs. (denied)

(f)          The worker provided her services on the appellant's farm. (admitted)

(g)         Alain Poudrette, a shareholder, was present on the appellant's farm when the worker provided services. (admitted)

(h)         The worker updated computer data for the appellant. (admitted)

(i)          The worker gave the appellant a weekly report on the incubation and hatching of the eggs. (admitted)

(j)          The worker was paid $10 an hour by the appellant. (denied)

(k)         The appellant was required under the agreement to provide services to the appellant at its request. (admitted)

[4]      The appellant admitted the truth of all the facts alleged in the various subparagraphs of paragraph 5 of the Reply to the Notice of Appeal except those it denied, as indicated in parentheses at the end of each subparagraph.

Testimony of Alain Poudrette

[5]      Alain Poudrette is an engineer. He and Gilles Lachance are the only two shareholders in the appellant, which they incorporated on April 26, 1995, for the purpose of breeding ostriches. Nathalie Dahlstedt provided professional services to the appellant on its farm until September 5, 1997. The appellant and the worker signed a contract of service to the same end on September 22, 1997. The worker's duties related to the incubation and hatching of ostrich eggs. The worker provided her services under Mr. Poudrette's supervision. She updated the computer data and gave them to the appellant along with a weekly report on the incubation and hatching of the eggs. The worker provided her services on the appellant's farm as an employee.

[6]      Nathalie Dahlstedt began working for the appellant on November 29, 1995, and stopped working for it on January 23, 1996. Her work was as a consultant for the appellant. Gilles Lachance, the appellant's vice-president, advised the worker that she was being laid off because the company no longer had the money to pay her. Given the straitened circumstances in which she temporarily found herself, Mr. Poudrette rehired her for a few weeks at $10.00 an hour. She reported on the progress of the breeding as such, how many eggs had hatched, how many chicks had died, how many had made it to the age of 10 days and how many had survived over the long term. She also sold eggs and ostriches. When she had to travel, she used her own car and the appellant paid her $0.27 a kilometre; her meals were paid for when she went off the farm. Before the period at issue, she was paid every week, about $480 per cheque. Even during the period at issue, the worker continued to submit reports on the number of chicks born and the number that died young.

Testimony of Nathalie Dahlstedt

[7]      The worker, a biologist, worked for the appellant from September 8 to October 17, 1997. Her work as a consultant involved farm management from the time the animals were received until they were sold, through all the stages of ostrich breeding. Her work schedule was from 9:00 a.m. to 5:00 p.m., often later, and even on weekends. That schedule was set by Mr. Poudrette. One of the two shareholders was always on site to supervise. The worker's weekly salary was based on the annual salary granted to her from the outset. She had signed with the payer a contract of service that prohibited her from working for other employers.

Analysis of the facts in relation to the law

[8]      It must now be determined whether the worker's activities fall within the concept of insurable employment, that is, whether or not there was a contract of employment.

[9]      The courts have established four essential tests for identifying a contract of employment. The leading case in this area 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. In Wiebe Door Services Ltd. v. M.N.R., [1986] 3 F.C. 553, the Federal Court of Appeal added to those the degree of integration. This list is not exhaustive, however.

[10]     The evidence showed that the worker performed her duties under Alain Poudrette's supervision. When she worked on the payer's farm from September 8 to October 17, 1997, her hours were from 9:00 a.m. to 5:00 p.m. or later. She was paid $10.00 an hour, or $480.00 a week. She was sometimes supervised by Gilles Lachance, who gave her instructions. The contract of employment was acknowledged in a contract under private writing dated September 22, 1997.

[11]     The payer owned the business and paid its employees by the hour. It alone could make profits or incur losses from the operation of its business. No evidence was adduced as to the ownership of the tools.

[12]     The evidence contains many contradictions. The appeal is accordingly dismissed and the respondent's decision confirmed.

Signed at Ottawa, Canada, this 14th day of November 2000.

"G. Charron"

D.J.T.C.C.

Translation certified true

on this 27th day of December 2001.

Erich Klein, Revisor

[OFFICIAL ENGLISH TRANSLATION]

1999-286(EI)

BETWEEN:

ACTION AUTRUCHE INC.,

Appellant,

and

THE MINISTER OF NATIONAL REVENUE,

Respondent,

and

NATHALIE DAHLSTEDT,

Intervenor.

Appeal heard on September 18, 2000, at Montréal, Quebec, by

the Honourable Deputy Judge G. Charron

Appearances

Agent for the Appellant:             Alain Poudrette

Counsel for the Respondent:     Ninette Singoye

For the Intervenor:                     The Intervenor herself

JUDGMENT

          The appeal is dismissed and the Minister's decision confirmed in accordance with the attached Reasons for Judgment.

Signed at Ottawa, Canada, this 14th day of November 2000.

"G. Charron"

D.J.T.C.C.

Translation certified true

on this 27th day of December 2001.

Erich Klein, Revisor

[OFFICIAL ENGLISH TRANSLATION]