A G Zawadowski, Md v. Minister of National Revenue, [1982] CTC 2573, [1982] DTC 1583

M J Bonner [Orally]:—This is an appeal from the assessment of income tax for the 1979 taxation year.

In his return of income for the year the appellant claimed to deduct, in computing of income from employment, the sum of $1,325.52 as automobile expenses. His claim rested on paragraphs 8(1 )(h) and (j) of the Income Tax Act.

The only issue in this appeal is whether the appellant, who, in the course of his internship during the first six months of the taxation year, and in the course of his residency during the last six months of the taxation year, worked at several different hospitals in London, Ontario, did so in a succession of employment by those hospitals or in one continuous employment.

The assessment was founded on the assumption that the appellant was employed, in effect, successively by several hospitals. the appellant contended there was only one employer, St Joseph’s Hospital, and that while serving that employer, initially as an interne and subsequently as resident, he was required to carry on the duties of his employment in different places, namely, at the various other hospitals scattered about London, Ontario.

The appellant at all relevant times was enrolled in a program of postgraduate studies conducted by the Faculty of Medicine of the University of Western Ontario. It is plain from the evidence both of the appellant and of Dr Lloyd, a witness called by the respondent, that the program in which the appellant was enrolled is run either jointly the the University and the various hospitals, or at least co-operatively by them. It is also plain that doctors engaged in the training of internes and residents enrolled in the program may and do serve simultaneously as members of the medical staff of the various hospitals and as members of the university faculty. Some serve on joint hospital-university committees apparently created to facilitate the carrying out of the practical academic aims of the postgraduate program.

It is, in my view, unnecessary for present purposes to set forth all the complexities of the relationship between the University and the hospitals. It is sufficient to note that the relationship explains why, (a) the appellant was selected by the University and not St Joseph’s Hospital for employment as interne and subsequently, resident; (b) St Joseph’s Hospital was content to employ and pay the appellant throughout the taxation year in question, even though the greatest part of the appellant’s time was spent attached to teams working in hospitals other than St Joseph’s, which hospitals were operated by legal entities separate from the body which operated St Joseph’s; (c) a doctor on St Joseph’s staff and occupying an office in St Joseph’s Hospital building prepared the schedule of hospitals and teams at which the appellant successively worked.

St Joseph’s was, in relation to the appellant’s service, not, in my view, a simple paymaster for a group of employer hospitals. It, in fact, hired him, even though he was selected by the University, and it paid him throughout the relevant period. It is undoubtedly true that when the appellant served at hospitals other than St Joseph’s, his work was monitored by doctors on the staff of those other hospitals. Those doctors had the right to control, not only what work was done by the appellant, but how the work was to be done. It was monitored in order to ascertain whether it met standards for the successful completion of the postgraduate program in which the appellant was enrolled.

As to control, the presence or absence of the right to control how work is done is relevant in cases in which a distinction has to be drawn between the contract of service and a contract for services.

The question here is not whether there was a contract of service. Rather, it is who was the employer?

Again, I reiterate, St Joseph’s, alone, hired the appellant, and it, alone, under Exhibits “A-1”, “A-2” and “A-6”, had the right to fire the appellant. There is no basis in the evidence for a finding that any contract of employment existed save those between the appellant and St Joseph’s formed as a result of the issuance by that hospital to the appellant the letters of appointment, Exhibits “A-1” and “A-2”, and formed as well by the collective agreement incorporated by reference.

The evidence, in my view, points to a conclusion that St Joseph’s was the appellant’s employer and that it loaned the appellant’s services to the other hospitals at which the appellant worked and was required by St Joseph’s to work. St Joseph’s was undoubtedly content to loan the appellant’s services to the other hospitals because, as suggested by Dr Lloyd, (a) the position occupied by the appellant was one funded by the Ministry of Health for purposes of advanced medical education, and (b) the hospital desired to have the status of a teaching hospital.

Although there was no evidence on the point, I infer that under the program St Joseph’s may well have secured the services of internes and residents hired and paid by other hospitals.

Thus, on the evidence, I conclude that the appellant was, in 1979, ordinarily required to carry on the duties of his employment in different places, within the meaning of subparagraph 8(1 )(h)(i) of the Income Tax Act. That being the result on the only issue litigated, the appeal will be allowed and the assessment referred back to the respondent for reconsideration and reassessment on the basis that the appellant is entitled to the deduction claimed.

Appeal allowed.