Date: 20010827
Dockets: 2001-775-CPP,
2001-784-EI
BETWEEN:
NANCY GRANT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
2001-776(EI)
2001-777(CPP)
RALF REGIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
2001-779(CPP)
2001-780(EI)
JAMES DONALD,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
2001-786(EI)
2001-787(CPP)
651366 ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
MacLatchy, D.J.T.C.C.
[1] These appeals were heard on July 11, 2001 in St. Catharines, Ontario on common evidence on consent of all the parties.
[2] The Appellants appealed a ruling of the Minister of National Revenue (the "Minister") for the determination of the question whether or not Nancy Grant (Nancy), Ralf Regier (Ralf) and James Donald (James) (the Workers) were employed in insurable and pensionable employment, while engaged by the Appellant 651366 Ontario Inc., o/a CBN (the Company) for the period from January 1, 1999 to June 22, 2000, within the meaning of the Employment Insurance Act (the "Act") and the Canada Pension Plan (the "Plan").
[3] By letter dated November 30, 2000, the Minister informed the Appellants that it had been determined that Nancy, Ralf and James' engagement with the Company during the period in question was insurable and pensionable employment for the reason that they were employed by the Company under a contract of service within the meaning of paragraph 5(1)(a) of the Act and paragraph 6(1)(a) of the Plan.
[4] The basic facts on each appeal were agreed by the parties to be as recited in paragraph 6 of each Reply to the Notice of Appeal indicating the facts relied on by the Minister.
[5] The Company is a general contractor doing commercial renovations under contracts it had negotiated with its clients. The only employees of the Company are Richard Cassidy, the President and sole shareholder and his spouse, Theresa Cassidy. All of the three Workers named were considered by the Company as independent contractors.
[6] In making his decision, the Minister relied on the following facts in file number 2001-784(EI):
(a) the Payor is a general contractor who does commercial renovations;
(b) Richard Cassidy is the sole shareholder of the Payor;
(c) the Appellant is Richard Cassidy's sister-in-law;
(d) the Payor only employs Richard Cassidy and his spouse Theresa Cassidy, and all other workers are considered self-employed;
(e) the Appellant was hired by the Payor to do typing, filing, bookkeeping and receptionist work;
(f) the Appellant performed her duties on the Payor's premises;
(g) work assignments were assigned to the Appellant by the Payor;
(h) the Appellant performed the services personally for the Payor;
(i) although the Appellant's hours were somewhat flexible, she normally worked daily from 9:00 a.m. to 4:00 p.m., which were the Payor's regular office hours;
(j) the Appellant was paid by the Payor at the rate of $12.50 per hour;
(k) the working premises, the furnishings, the equipment, the materials and the supplies were provided by the Payor;
(l) the Appellant did not incur any expenses in the performance of her duties apart from providing her transportation to and from the Payor's business premises.
[7] Ralf performed as a job estimator and designer who submitted his written estimate of the cost of certain construction renovations as estimated from a plan submitted to him by the Company. The Company would incorporate this estimate in a final contract to be entered with by the Company and its client. Ralf had a long association with the Company and was highly respected. Ralf submitted an invoice to the Company for the hours involved in the preparation of his estimate and charged Goods and Services Tax (GST). If the project required Ralf to travel or spend time out of town, the Company would reimburse him for those costs. This appeared to be usual in the industry. An hourly rate had been negotiated between Ralf and the Company. Ralf worked the hours necessary to prepare his estimates having regard to the expectations of the Company and its client. Ralf had the expertise and experience needed by the Company and operated out of both his own home and the office of the Company. Ralf worked very little for others as the Company provided him with all the work he could handle but both the Company and Ralf agreed that he could work for others so long as it was not with clients of the company without its permission.
[8] The Company and Ralf agreed that they would work together for as long as each wished.
[9] Nancy is Richard Cassidy's sister-in-law, but it was determined by the Minister that their relationship was at arm's length. Nancy had extremely flexible hours and came and went as her needs allowed. When Nancy attended at the office of the Company she was experienced enough to know what matters needed her attention; whether it be typing contracts, answering the telephones, filing, bookkeeping or general office routines. An hourly rate of remuneration was negotiated between Nancy and the Company. Nancy would keep track of her hours expended on Company business and bill the Company by invoice from time to time. There were no set hours for her engagement by the Company. She does not charge GST as her income is not sufficient to warrant the need for a GST registration.
[10] James is a glazier by trade but performs in a supervisory capacity for the Company attending on job sites to ensure the construction complies with the contract as entered into between the Company and its clients. An hourly remuneration rate was negotiated between the Company and himself. James would invoice the Company for the hours expended on Company business as determined by the particular construction project and the needs of the client. James has been associated with the Company for many years and is an experienced workman who requires no supervision or instruction of any kind. When he invoices the Company for hours expended on its business he charges and remits GST as required.
[11] The question before this Court is whether the employment arrangement between the Workers and the Company was pursuant to a contract of service or a contract for services. If it was pursuant to a contract of service then the Workers' employment was both insurable and pensionable as they would be considered employees of the Company. If it was pursuant to a contract for services then the Workers would be considered to be subcontractors of the Company and their work would not be subject to the requirements of either the Act or the Plan.
[12] Guidance to determine what the relationship was between the Workers and the Company has been clearly given by the Federal Court of Appeal in the Wiebe Door Services Ltd. v. M.N.R. decision, 87 DTC 5025. That Court endorsed the tests recommended by Lord Wright in Montreal v. Montreal Locomotive Works Ltd. et al., [1947] 1 D.L.R. 161, of (1) control, (2) ownership of tools, (3) chance of profit and risk of loss and (4) integration of the work performed into the business of the Appellant. It is considered not as single tests to add up, to arrive at the decision for or against the type of relationship existing, but as a four-in-one test to examine the whole of the various elements, which constitute the relationship between the parties. It is what Lord Wright calls, "the combined force of the whole scheme of operations", which must be ultimately considered to determine that relationship.
[13] In these circumstances, the evidence given will be examined under the various tests recommended.
Control
[14] Did the Company exert the type of control over the Workers that would indicate an employee/employer relationship? The evidence of the principal owner of the Company was that he, at no time, controlled the work of the Workers. They operated on their own initiative, kept track of their own hours of work and worked when they chose, subject to the requirements of any particular project. None of the Workers were supervised as each had experience enabling them to perform their particular function. There was no reporting requirement but contact was made only as dictated by the particular project to note progress and to ensure that the work completed met the standards as set out in each particular contract. It was a "standard" in the business that should any of the workers be required to perform their function away from the area where the Company is located, then they are reimbursed for travel and accommodation expended on such business. Each Worker gave evidence that they could have worked for others at the same time so long as it did not harm the relationship existing between the Workers and the Company.
[15] On the evidence adduced, there appeared to be little, if any, control that would support an employer/employee relationship.
Ownership of tools
[16] In most circumstances, the few tools used by the Workers belonged to the Company. This is especially true for the work performed by Nancy. Her work was performed in the offices of the Company using its tools such as computer, ledgers, etc. Both Ralf and James used their own tools to perform their function on the job unless the work required a particular piece of equipment they did not usually need to perform their job. If the Company had such equipment then it would be used; otherwise, it would be rented by the Company for the particular job. Ralf had a particular type of calculating machine that he owned and used to perform his function.
[17] Very little evidence was adduced that would indicate that the ownership of tools supported an employment relationship.
Chance of profit and risk of loss
[18] The overall profit for the Company was derived from how well it performed under its contract. In a like fashion, it could lose income if it badly estimated when it entered into each contract. It did not affect the Workers. They were limited to their hourly income and would increase their income only by expending more time at their work. If they made an error in their performance of their work they would repair the damage or error at their own expense.
[19] This test is inconclusive but leans toward a relationship of employer/employee.
Integration
[20] This is a difficult heading, in modern society, to determine whether the workers' contribution is an integral part of the Company's business. Neither one exists without the other. The Company requires workers with certain skills for its operation. The Workers have these skills and contract with the Company to use those skills to further the ends of the Company. Whose business is it? The Company has a contract to be completed, which it cannot perform without the help of the workers, yet these workers are not able to work without having some project presented to them on which they can perform their skills. This test is inconclusive in these circumstances.
[21] The Court is required to apply the above tests to the circumstances in each instance in an attempt to determine the type of relationship that existed between the Company and the Workers, but this is not an absolute test. The Courts have ruled that not only should these tests be used but also the whole scheme of the relationship must be examined as evidenced by the facts presented. It is also settled law that the parties cannot, by agreement, decide the character of their relationship. They may choose to call it an independent relationship but it is only by an examination of the surrounding circumstances in light of the tests in Wiebe Door that the true nature of their relationship can be determined. The fact that the parties believed and operated as independent of each other is just one more factor for this Court to take into consideration when reaching its conclusion. The legislation involved does not enable the parties to opt out of its provisions by their own decisions.
[22] This Court has reached the conclusion that on examination of the whole of the relationship existing between the Company and the Workers, their relationship was one of contractual independence and not one of master and his servant. The Workers were subcontractors of the Company and their work was neither insurable nor pensionable.
[23] The appeals are allowed and the decisions of the Minister are varied accordingly.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.COURT FILE NO.: 2001-775(CPP)
STYLE OF CAUSE: Nancy Grant and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-776(EI)
STYLE OF CAUSE: Ralf Regier and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-777(CPP)
STYLE OF CAUSE: Ralf Regier and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-779(CPP)
STYLE OF CAUSE: James Donald and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-780(EI)
STYLE OF CAUSE: James Donald and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-784(EI)
STYLE OF CAUSE: Nancy Grant and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-786(EI)
STYLE OF CAUSE: 651366 Ontario Inc. o/a CBN and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 2001-787(CPP)
STYLE OF CAUSE: 651366 Ontario Inc. o/a CBN and M.N.R.
PLACE OF HEARING: St. Catharines, Ontario
DATE OF HEARING: July 11, 2001
REASONS FOR JUDGMENT BY: The Honourable Deputy Judge
W.E. MacLatchy
DATE OF JUDGMENT: August 27, 2001
APPEARANCES:
For the Appellant: Eugene W. Trasewick (Agent)
Counsel for the Respondent: Pierre-Paul Trottier
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
2001-775(CPP)
BETWEEN:
NANCY GRANT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-784(EI)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-776(EI)
BETWEEN:
RALF REGIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier 2001-777(CPP)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-775(CPP) and 2001-784(EI)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-777(CPP)
BETWEEN:
RALF REGIER,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-775(CPP) and 2001-784(EI)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-779(CPP)
BETWEEN:
JAMES DONALD,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-780(EI)), Nancy Grant (2001-775(CPP) and 2001-784(EI)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-780(EI)
BETWEEN:
JAMES DONALD,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-779(CPP)), Nancy Grant (2001-775(CPP) and 2001-784(EI)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-784(EI)
BETWEEN:
NANCY GRANT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-775(CPP)), 651366 Ontario Inc. o/a CBN (2001-786(EI) and 2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-786(EI)
BETWEEN:
651366 ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-784(EI) and 2001-775(CPP)), 651366 Ontario Inc. o/a CBN (2001-787(CPP)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.
2001-787(CPP)
BETWEEN:
651366 ONTARIO INC. O/A CBN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeals of Ralf Regier (2001-776(EI) and 2001-777(CPP)), James Donald (2001-779(CPP) and 2001-780(EI)), Nancy Grant (2001-784(EI) and 2001-775(CPP)), 651366 Ontario Inc. o/a CBN (2001-786(EI)), on July 11, 2001 at St. Catharines, Ontario, by
the Honourable Deputy Judge W.E. MacLatchy
Appearances
Agent for the Appellant: Eugene W. Trasewick
Counsel for the Respondent: Pierre-Paul Trottier
JUDGMENT
The appeal is allowed and the decision of the Minister is varied in accordance with the attached Reasons for Judgment.
Signed at Toronto, Ontario, this 27th day of August 2001.
|
"W.E. MacLatchy" |
D.J.T.C.C.