Donald M Ladd v. Minister of National Revenue, [1978] CTC 3071, [1978] DTC 1775

Delmer E Taylor:—These are appeals against income tax assessments in which the Minister of National Revenue increased the re- ported taxable income of the appellant by amounts of $6,604.90 and $18,699.82 respectively for the years 1973 and 1974, which amounts had been treated by the appellant as non-resident income. If he is held to be taxable as a resident, the appellant claimed he should be treated as an. independent contractor and not an employee, and accordingly be eligible for allowable expense deductions. The respondent relied, inter alia, upon sections 2, 3, subsection 9(1), paragraphs 18(1)(a), 18(1)(h), subsection 248(1), paragraph 250(1)(d) and subsection 250(3) of the Income Tax Act, SC 1970-71-72, c 63, as amended and section 3400 of the Income Tax Regulations, as amended.

Facts

The appellant was employed by the Vancouver School Board and, together with his family, was domiciled at 3170 Lonsdale Ave in North Vancouver, BC, until August 23, 1973. He accepted an assignment in Nigeria, in which country he lived with his family until returning to Canada in July 1975. He retained his home in North Vancouver and is now domiciled there, and re-employed by the Vancouver School Board. On his 1973 income tax return, the appellant declared as taxable his earnings from the Vancouver School Board and other income, until the date of his departure from Canada. The amount which is in dispute for 1973 was received from the Central Pay Division of the Government of Canada. For 1974 none of his income was treated by him as taxable in Canada, and this income included a similar amount of $18,336 from the Central Pay Division. The appellant gave specific, undocumented but undisputed, testimony that the financing for the programme in Nigeria came by way of a long-term, low-interest rate loan from Canada to Nigeria, through the Canadian International Development Agency (C/DA).

Contentions

The Notice of Appeal respecting this matter, filed for the taxpayer by David Ingram’s CEN-TA Service, states: “subsection 250(2) takes precedence over subsection 250(1). If not, should be treated as independent contractor and allowed expenses against income such as Car, pension fund, etc.’

In the Reply to Notice of Appeal, the respondent asserted that:

—during the 1973 and 1974 taxation years the appellant performed services in a country other than Canada under a prescribed international development assistance programme of the Government of Canada and that he was resident in Canada in the three- month period preceding the day on which such services commenced. Accordingly, the appellant is deemed to have been resident in Canada throughout the 1973 and 1974 taxation years pursuant to paragraph 250(1 )(d);

—in the alternative, . . . the appellant was ordinarily resident throughout his 1973 and 1974 taxation years within the meaning of subsection 250(3);

—further, the appellant received income from an office or employment and . . . has not incurred any expenses or outlays for the purpose of earning this income.

Evidence

While giving evidence the appellant identified the following exhibits which his agent filed on his behalf:

A-1: Province of BC receipt for $200.48 from D M Ladd dated Dec 3/73.

A-2: En liasse—3 Province of BC receipts for $200.48 each dated Nov

1/73, Oct 5/73 and Jan 22/74.

A-3: En liasse—2 NR4 Supplementary of Appellant for taxation year 1974.

A-4: BC Teacher’s Credit Union debit advice dated Feb 1/74 re: nonresident

tax withheld.

A-5: Letter from BC Superannuation Branch to D M Ladd dated Apr 10/75

with 8 receipts from Prov of BC.

A-6: Directive re: Voting Rights—Federal Election to CIDA Technical

Assistance Personnel.

A-7: Insurance Policy for Ford Capri car by Sun Insurance Office (Nigeria)

Limited issued to D M Ladd, dated Jan 16/74.

A-8: Bill of Sale for Ford Capri by Owoniboys Technical Service Ltd to

D M Ladd dated Oct 29/73.

A-9: Pro-Forma Rental charges for 1973-74-75 and on reverse side is

appellant’s own calculations.

A-10: Statement of Disbursements of rental monies for year 1974 for appellant’s

property, by Mitten Realty Ltd.

A-11 : Statement by Craft Welders to Mitten Insurance Agencies for work

performed on appellant’s property, dated Nov 10/73.

A-12: Interpretation Bulletin IT-221 dated May 26/75 and letter from Revenue

Canada—Taxation to M D Ladd dated Dec 13/76,

Under cross-examination, the witness also identified the following exhibits which were submitted by counsel for the respondent:

R-1: Copy of letter from CIDA to D M Ladd dated June 27/73.

R-2: Agreement between CIDA and D M Ladd undated.

Mr Ladd provided the Board with a general description of his work in Nigeria, his reasons for accepting the assignment, and referred to his intention to quit Canada at the time and remain overseas. He acted as a technical advisor on educational matters, he received no pay from Nigeria, and would have remained (and probably have accepted a second assignment) if the project arrangements had been renewed between the two countries. He had taken a leave of absence from the Vancouver School Board, continued to make his superannuation payments directly to the Province of British Columbia, rented his house while he was away, and during some of the time period (August 1973 to July 1975) received family allowance cheques. The significance of exhibits A-7 and A-8, according to the appellant, was that they demonstrated and supported his verbal evidence that he had incurred substantial expenses which would not normally be paid by an employee but rather by an individual contracting out his services.

Argument

The following is from the transcript of the hearing:

THE CHAIRMAN: Let me see if we can agree to proceed this way. I would appreciate Mr Ingram’s comment (and I make no pre-judgment on it), on why section 250(2) does two things—first of all it takes precedence (his term) over 250(1) and secondly, how it serves the interest of his client.

MR INGRAM: All right.

THE CHAIRMAN: And again Ms Williamson, in order to deal with these matters in some kind of order, I’d have Mr Ingram deal with that issue first and then make his comments with regard to the independent contractor status and if you would do the same thing in that order, perhaps we could relate to it a bit more easily.

MR INGRAM: Well Sir, first of all I’d refer to or appeal to the fact that Mr Ladd did seem to do everything that was expected or accepted in Bulletin 221. I refer to the Jack Gold case, [1977] CTC 616; 77 DTC 5430, where His Honour Judge Addy turned down Mr Gold’s appeal based on departmental policy. I realize that Bulletins are only departmental policy but if we look at section 115 of the Act, a non-resident person’s taxable income earned in Canada is the amount of his income for the year. If we continue on we find that the income that he earned is only relative—sorry I’m on the wrong one, it’s section 114 which reads:

Where an individual was resident in Canada during part of a taxation year, and during some other part of the year was not resident in Canada, was not employed in Canada and was not carrying on business in Canada, for the purpose of this Part his taxable income for the taxation year is the aggregate of

(a) his income for the period or periods in the year during which he was resident in Canada, was employed in Canada or was carrying on business in Canada, computed as though such period or periods were the whole taxation year and as though any disposition of property deemed by subsection 48(1) to have been made by virtue of the taxpayers having ceased to be resident in Canada were made in such period or periods, and

(b) the amount that would be his taxable income earned in Canada for the year if at no time in the year he had been resident in Canada, computed as though the portion of the year that is not in the period or periods referred to in paragraph (a) were the whole taxation year,

minus the aggregate of such of the deductions from income permitted for the purpose of computing taxable income as may reasonably be considered wholly applicable to the period or periods referred to in paragraph (a) . . .

What I would maintain here is that Mr Ladd was an independent contractor, there is no doubt in my opinion that he was an independent contractor. The fact that he had tax deducted at source and that this tax was deducted by contract is not really that important. If we turn to the Interpretation Bulletins again, and the Interpretation Bulletins are here for our guidance, bulletin number IT-106, paragraph 6. It says that:

An officer or employee of a Crown Corporation or agency who was required to perform the duties of his office or employment outside Canada for an extended period of time should carefully consider his tax position, he should ask the corporation or agency for advice as to whèther or not he is an officer or servant of Canada or of a Province, and as to whether or not he would be taxable as a resident of Canada, under subsection 250(1) when serving abroad. It should be borne in mind that a person claiming to be a non-resident for income tax purposes may be require to substantiate his claim. An officer or employee of a Crown corporation intending to make such a claim by reason of the fact that he is not an officer or servant of Canada or a Province should ask the corporation or agency to provide him with suitable evidence to that effect.

Now of course, CIDA is not going to provide anybody with evidence to that effect. In fact, they’re going to spend most of the time trying to tie anybody under their auspices to their coat strings. Unfortunately I left one book behind which is a recent case in Ontario of an Eaton salesman. where the store refused completely to acknowledge his expenses or need for expenses—he was a commission salesman in the rug department—this case was acceptable to the Tax Review Board because of the fact that if the salesman hadn’t gone out and carried rugs with him, and this sort of thing or samples to the houses, he wouldn’t have kept his job. That was very clear.

Now in the case of Mr Ladd, if he didn't sign that contract as it were he would not have got his contract. to go abroad, but the point is that the Bulletin does recognize the fact that people can be in government positions even and still not be a resident of Canada. I maintain, that Mr Ladd is in fact a self-employed individual, he was a contractor as it says in the contract and the fact that tax was deducted was meaningless, as far as our Act is concerned. Tax deducted is only a withholding tax and everybody that fills in their tax return at any time during the year fills it in expecting or hoping for a refund, and most people do get a refund. Regarding the matter of the house, Mr Ladd did everything that was necessary. He gave up control of the house; he gave it to a real estate agent; he hoped for and by his testimony, said that he has a full pension and the forty-year rule was in effect at the time that he left the country; and he did qualify for the forty-year rule at the time that he left the country. Unfortunately as you know, there are many forms of changing legislation. The Regulation 3400 that is quoted in the government appeal very clearly, if I may turn to it and quote again, and as I said l’ve gone back to the 1969 Regulations as well. Regulation 3400 says,

For the purpose of paragraph 250(1)(d) of the Act (which is the basis of the tax office taxing Mr Ladd), each of the international development assistance programs of the Canadian International Development Agency that is financed by funds, other than special loan assistance funds, . . .

Now there is no doubt that the project (that of Mr Ladd) was a loan, a negotiated loan by the Canadian Government and it was a soft loan. It didn't get paid back tomorrow and even the next day, but it would be paid back with principal and interest of 3%, the interest not to start for several years. This was very definitely part of Sinclair Stevens’ debate in the House of Commons where the big thing was—are we giving this money away? The reply of the Minister who was Donald McDonald at the time was “no, we are not, it is very definitely a loan’. Now I would also note that the International Development Assistance Program is Part XXXIV or Regulation 3400—it has an amendment and this was revoked and replaced by .PC 1974-1803. (I don’t know what PC stands for, perhaps you can enlighten me). But it was effective for 1974 and subsequent taxation years. It formerly read as follows and referred to the Commonwealth Plan Program and the Commonwealth Assistance Program and this Regulation has changed over the years. At one time it referred to the Caribbean countries, the Colombo Plan, the developing African nations, it’s narrowed its scope down all the way. When this Regulation was originally passed (and it was originally CIDA 139(3)(ca) of the old Act), it was a situation or at a time when Canada was giving away an awful lot of money. We are no longer giving money away, I would maintain that you could have somebody go over there at one time under a gift, and at another time it was under a loan program and now it no longer applies.

I have with me for Your Honour’s edification the only case that I could find in the entire last 50 years and that is the case of Pau/ E Petersen v MNR, [1969] Tax ABC 682; 69 DTC 503. It was held by the Tax Review Board (sic) in 1969 and it does refer to 139(3)(ca) which is the identical part of 250(1)(b) and in that case the applicant lost his case but the applicant was clearly in a situation where the Canadian Government was giving the money away. It was absolutely being given, paid for by Canada, the man was over there for that purpose and that purpose alone, with every intention of returning to the country. I maintain that Mr Ladd is not in that position. He was actively looking for work and perhaps spending part of his life out of the country; his children are all grown up and he was looking for something to do in another part of the world which his past and present performance has proven.

The problem that we do have (and again it’s section 250(2)), I maintain that it does take precedence over 250(1 )(d) because 250(1 )(d) is inoperative in this particular case. Now if 250(2) applies that means that the 1973 tax return would have to be amended slightly. If we amend it slightly to take into account the income because he is now of taxable income status, that would result in a larger deduction because his income is higher than it is lower then the money that he expended in earning this income becomes the deduction, and for my purpose I would be willing to leave it as filed— there’s no point in going back and Mr Ladd has agreed to that. We‘re not worried about going back and reopening that. For the purposes of 1974, I believe that sections 114 and 115 are completely operative and Mr Ladd owes no tax to the Canadian Government. It was a withholding tax, held with a small interest payment that he would have received from the Credit Union and the Bank.

Counsel for the respondent introduced the Minister’s assertions by Stating:

The Minister’s position is that during the taxation years in question (1973 and 1974), the appellant throughout the entirety of both of those years was a resident of Canada, thereby subject to paying income tax. The Ministry relies on section 250(1)(d) and, subsidiarily, on subsection (c) of that same section. Alternatively, the Minister relies on the application of section 250(3) and the principles developed in the case law for determining whether a person is resident in Canada. The Minister’s position with respect to Mr Ingram’s second point is that the appellant was an employee of the Government of Canada and therefore could claim only such deductions as are specifically allowed by the statute to an employee.

In the Minister’s submission, it does not matter whether he participated in the programme as an employee or as an independent contractor for purposes of deciding that he is deemed to be resident under that section 250(1 )(d)).

Counsel referred to and relied upon section 3400 of the Income Tax Regulations, The Queen v K F Reeder, [1975] CTC 256; 75 DTC 5160; H Lionel Rosen v Her Majesty The Queen, [1976] CTC 462; 76 DTC 6274; and William R Morton v MNR, [1976] CTC 2463; 76 DTC 1275.

Findings

For reference purposes, the Board reproduces the relevant subsections of the Income Tax Act (250(1), (2) and (3)), and Part XXXIV of the Regulations covering section 3400, to indicate how it read applicable separately to the 1973 and 1974 taxation years:

250. Extended meaning of resident. (1) For the purposes of this Act, a person shall, subject to subsection (2), be deemed to have been resident in Canada throughout a taxation year if

(a) he sojourned in Canada in the year for a period of, or periods the aggregate of which is, 183 days or more,

(b) he was, at any time in the year, a member of the Canadian Forces,

(c) he was, at any time in the year,

(i) an ambassador, minister, high commissioner, officer or servant of Canada, or

(ii) an agent-general, officer or servant of a province,

and he was resident in Canada immediately prior to appointment or employment by Canada or the province or received representation allowances in respect of the year,

(d) he performed services, at any time in the year, in a country other than Canada under a prescribed international development assistance program of the Government of Canada and he was resident in Canada at any time in the 3 months’ period preceding the day on which such services commenced,

(e) he was resident in Canada in any previous year and was, at any time in the year, the spouse of a person described in paragraph (b), (c) or (d) living with that person, or

(f) he was, at any time in the year, a child described in paragraph 109(1)(d) of a person described by paragraph (b), (c) or (d).

(2) Idem. Where at any time in a taxation year a person described by paragraph (1)(b), (c) or (d) ceases to be a person so described, he shall be deemed to have been resident in Canada during the part of the year preceding that time and his spouse and child who by virtue of paragraph (1)(e) or (f) would, but for this subsection, be deemed to have been resident in Canada throughout the year, shall be deemed to have been resident in Canada during that part of the year.

(3) Ordinarily resident. In this Act, a reference to a person resident in Canada includes a person who was at the relevant time ordinarily resident in Canada.

PART XXXIV

International Development Assistance

3400. For the purpose of paragraph 250(1 )(d) of the Act, each of the international development assistance programs of the Canadian International Development Agency that is financed out of the Special Account •established by External Affairs Vote 33d, Appropriation Act No 2, 1965, as amended, is hereby prescribed as an international development assistance program of the Government of Canada.

(Part XXXIV was revokes and replaced by PC 1974-1803, effective for the 1974 and subsequent taxation years. Part XXXIV formerly read as follows:

3400. For the purpose of paragraph (ca) of subsection (3) of section

139 (subsection 250(1)) of the Act, the

(a) Colombo Plan Program,

(b) Commonwealth Caribbean Assistance Program,

(c) Special Commonwealth Africa Program, and

(d) French-speaking African States Program,

that are financed by funds, other than special loan assistance funds, appropriated by Parliament for eocnomic, technical or educational assistance to countries, including all capital or works projects, feasibility studies, survey projects and technical or educational assistance projects within the scope of any of the above programs, are hereby prescribed as international development assistance programs of the Government of Canada.)

Part XXXIV was added by PC 1966-1169, SOR/66-276.

As I follow the argument of the agent for the appellant, it is that Ladd is not covered as a resident by paragraph 250(1 )(d) because he did not work under a prescribed development assistance programme; and if it can be shown that he is not a servant of Canada (paragraph

(c) of the same section), then automatically he becomes a non-resident, and his appeal should be allowed. In addition, since he would not be a servant, he would be an independent contractor and permitted appropriate expense deductions. Without disposing of the matter at issue, I would point out that both positions are highly superficial. Resident status for this appellant is not simply. the result of being caught by any of the provisions of section 250. He could be a resident while not fitting specifically within any of these clauses—his vestigial attachment and involvement in Canada, as evidenced by the facts, being such that for income tax purposes he would be bound to Canada no matter what his income production status—whether as employee or independent contractor, either with the Government of Canada, or with any other contracting party.

However, it does appear to me that Mr Ingram placed considerable emphasis on the “soft loan” aspect of the funding for the CIDA programme, and I can only conclude that this aspect of the issue bears upon the change in Regulation 3400 from the year 1973 to the year 1974—the 1974 Regulation was virtually all-encompassing, while that for 1973 contained the exclusion “other than special loan assistance funds”. The only evidence available to the Board on this point was provided by the appellant in sworn testimony, to the best of his ability and knowledge, without rebuttal by the Minister. That evidence could well place the financing for the programme within the definition of “special loan assistance”. I would hold therefore that the appellant for the year 1973 would not fall within the provisions of paragraph 250(1 )(d) for purposes of determining residency.

Turning to the question of whether the same exclusion should be permitted for the year 1974, the Board in my view has no option— the parameters were changed and that phrase no longer inhibits the application of Regulation 3400 to the appellant’s case. It cannot be said that this is retroactive, since the year 1973 is not affected, but it is clear that one intent of the Regulation, passed by the Privy Council of the Government of Canada, was to close the door on such possible exclusion. Therefore, for purposes of interpretation of paragraph 250(1)(d) of the Act, for the year 1974 the appellant would be declared a resident, and his appeal would fail for that taxation year.

The Board must now examine whether or not any clause in subsection 250(1) (other than paragraph (d)) would serve to deem the appellant a resident for the year 1973. In my view, it is clear that paragraphs (a) and (b) of that section do not apply, but should the provision in paragraph (c) suit this case, then this appeal would fail (as far as “resident” status is concerned). To so fail it would be necessary to decide that the appellant was a “servant” of Canada. The only documented information available to the Board on this particular point is contained in the two exhibits R-1 and R-2, in which exhibits the appellant is referred to as the “expert”. Exhibit R-1 is reproduced in its entirety, as are portions of R-2 which the Board considers significant.

Exhibit R-1:

Canadian International

Development Agency

June 27, 1973

Your file

3-4423-6

Our file

Mr Donald M Ladd

3170 Lonsdale Avenue

North Vancouver, BC

Dear Mr Ladd,

The accompanying contract which is forwarded for your signature, if you agree to its terms, is drawn up to reflect current CIDA administrative policy ‘in which experts under direct contract receive fixed fee and allowances ‘for its duration.

CIDA proposes therefore to pay you a fee computed at the rate of $18,336 per annum, and a corresponding overseas allowance (income tax free) at the rate of $6,288 per annum, in accordance with Articles Il, III and IV of your contract.

Should you be offered and accept a further period of service with CIDA as an extension to the attached contract, the fee to be paid for such an extension would be subject to negotiation.

It should be noted that neither the Handbook for Experts which is currently provided to experts for their information nor any other document issued by CIDA, except an amendment to the actual contract, alter the terms of the signed contract.

We trust that you will find this offer of your services acceptable and that we will shortly receive the signed copies of your contract of which one will be returned to you after signature for CIDA.

Yours very truly, a

(Sgd)

T M Pallas

Program Manager

Commonwealth Africa Division

cc - Canadian High Commission, Lagos-

Encl

122 Bank Street

Ottawa, Canada

K1A 0G4

CIDA 294B (5-73)

. .

Exhibit R-2:

These Articles of Agreement . . .

Her Majesty the Queen in right of Canada (referred to in the documents forming the present Agreement as “Her Majesty”) represented by the Secretary of State for External Affairs, acting through the President of the Canadian International Development Agency or his authorized: representative (referred to in the documents forming the present Agreement as “the President”) . . .

Whereas Her Majesty intends to provide certain technical, educational and related services to Nigeria.

ARTICLE I SCOPE OF WORK

The Expert shall, in a careful and professional manner, perform the following duties and services:

1. To serve as Canadian Team Leader at the Kwara State College of Technology, lllorin, Nigeria.

2. To serve as Curriculum and Equipment Specialist for the Departments of Environmental, Electrical and Mechanical Technology at the College in which capacity he will be required to supervise and participate in the preparation of student entrance standards, course outlines and the preparation of lists of equipment required by the College in light of the accepted curricula.

3. Carry out such other related duties as may be requested by appropriate Nigerian authorities.

ARTICLE V ANNUAL LEAVE

The Expert will be entitled to vacation leave at the rate of forty work days per year of service. Furthermore, any and all leave entitlements shall be dealt with and disposed of on an annual basis unless otherwise authorized in writing by the President.

ARTICLE VII INCOME TAX AND CANADA PENSION PLAN

It is understood by Her Majesty and agreed by the Expert that income tax deductions against the fees of the Expert will be made at the source. The Expert hereby authorizes the Department of National Revenue to communicate with the President on income tax matters relating to payments under the present Agreement.

It is understood by Her Majesty and agreed by the Expert that the Expert, as an independent contractor, shall be responsible for all or any necessary contributions to the Canada Pension Plan.

ARTICLE X ASSIGNMENT

The Expert shall not assign, transfer, pledge or make other disposition of the present Agreement or of any part of the work under the present Agreement, except with the prior written consent of the President.

ARTICLE XII CONFLICT OF INTEREST

Other than the duties and services in Article I, the Expert shall not engage directly or indirectly, in his own name or as an agent or as a servant or as an employee, in any political, business, professional or occupational activity in the Host Country. The Expert shall not make loans to or invest in any business activity in the Host Country.

ARTICLE XVII TERMINATION

The President may, by notice in writing, terminate this Agreement for any breach of or non-compliance with the terms and conditions. of the present Agreement by the Expert, in which event all obligations of Her Majesty shall cease as of the date of such notice or as may otherwise be specified by the President.

The agent for the appellant has emphasized that the agreement is ambiguous and possibly contradictory. Reference to “contract”, “direct contract”, “fee and allowances” (Exhibit R-1), and “independent contractor” (Exhibit R-2) would do little to dissuade an applicant for the position from believing that he was indeed an independent contractor and not an employee (servant). The requirement that the expert be responsible for any and all necessary contributions to the Canada Pension. Plan would certainly tend to reinforce that view. However, CIDA also requires authorization to communicate with the Department of National Revenue and to make tax deductions at the source, and earlier in the agreement specifies the annual leave provisions for the expert, both situations indicative of an employer-employee relationship.

A “master-servant” relationship is founded on control by one party of the functions of the other party. However, the fact that direct, intimate control is not immediately evident or is not exercised does not necessarily make the relationship that of an independent contractor. For that relationship to obtain, it would require evidence that control over service and performance did not and could not exist under the contractual arrangement. I find no evidence to support that conclusion in this agreement, and indeed there is ample indication that CIDA determined the functional parameters and also the personal and sociological parameters within which the appellant was to perform his services. The claim of “independent contractor status” in this appeal might well founder on the rock of control alone. However, the matter of “control”, as discussed in Henry L Molot v MNR, [1977] CTC 2170; 77 DTC 111, need not be the only factor to consider. In Molot (supra), at 2182 and 119 respectively, the following is noted:

Reference should also be made to one other judgment cited» by both counsel and which I have always found particularly interesting. This is the case of Dr W H Alexander v MNR, [1969] CTC 715; 70 DTC 6006, in which a distinction is made in deciding that a “contract for service” existed rather than a “contract of service” in that the appellant had an undertaking “to provide coverage” as opposed to “do such work himself”. In the said judgment, the following observations were made at 725 and 6012 respectively:

“On the other hand, there is this central obligation in the contract for the appellant to provide “coverage” for the professional radiological work of the Hospital whether or not he is able to do it personally and regardless of the volume that it may attain. This obligation clearly contemplates a situation where the appellant would have to hire one or more other radiologists not merely for some emergency or temporary period but on a permanent basis. I find here not only a “freedom” but an obligation on the appellant, in certain possible circumstances, to have work under the contract done by somebody other than himself. In Ready Mixed Concrete (South East), Ltd v Minister of Pensions and National Insurance, [1968] All ER 433, MacKenna, J said at 440:

The servant must be obliged to provide his own work and skill. Freedom to do a job either by one’s own hands, or by another’s is inconsistent with a contract of service, though a limited or occasional power of delegation may not be . . .”

Although I am unable to find cases in which this apparent distinction has been expanded or clarified, it implies to me that a “contract of services” might well be a contract of individual services whereas a “contract for services” might be the assumption only of an obligation to see that a certain agreed upon task was completed, but not necessarily to do it personally.

In my view, Article X of Exhibit R-2 (“The Expert shall not assign, transfer, pledge or make other disposition of the present Agreement or of any part of the work under the present Agreement, except with the prior written consent of the President.’’) determines that the agreement represents a contract of individual services and not merely the assumption of ‘an obligation. On this point alone I would be prepared to conclude that the apellant was indeed a servant of Her Majesty The Queen in right of Canada. The appellant is therefore specifically included within the framework of paragraph 250(1)(c), and there is no requirement for the Board to examine further the domestic and personal arrangements of the appellant in Canada during the years in question to determine if these, quite separately, would support the same conclusion—that he did not alter or terminate his status as a resident of Canada during the assignment in Nigeria. It might be pointed out, towever, that a preliminary review of that evidence in the instant case shows it to be generally consistent with the findings of fact upon which the earlier cases cited by counsel for the respondent were decided against the appellants.

Accordingly, although it can be concluded, as described earlier in this judgment, that the appellant might sustain his claim of non-resident status’’ for the year 1973 (but not for 1974) under paragraph 250(1 )(d), he fails to hold this ground for either year when faced with the provisions of paragraph 250(1)(c). The appellant is to be considered a resident of Canada for income tax purposes for the years 1973 and 1974 and is entitled to expense deductions only as an employee, not as an independent contractor.

Decision

The appeal is dismissed.

Appeal dismissed.