Date: 19990525
Docket: 98-1063-UI, 98-169-CPP
BETWEEN:
CAMION HOLDINGS INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
ROWE, D.J.T.C.C.
[1] On June 17, 1998, the Minister of National Revenue (the "Minister") decided the employment of Brian Adams (the worker) was insurable during the period from January 1, 1996 to October 28, 1997 on the basis the worker was employed under a contract of service and was, therefore, an employee of Camion Holdings Inc. (the "payor") pursuant to paragraphs 5(1)(a) of the Employment Insurance Act and 3(1)(a) of the Unemployment Insurance Act.
[2] On June 17, 1998, the Minister decided the employment of Brian Adams was pensionable employment pursuant to paragraph 6(1)(a) of the Canada Pension Plan during the period from January 1, 1996 to October 28, 1997 on the basis he was employed under a contract of service and was, therefore, an employee of the payor. The appellant filed an appeal - 98-169(CPP) - from this decision and the parties agreed the result in the within appeal would apply to it.
[3] The appellant filed a book of exhibits, tabbed 1-7, inclusive, as Exhibit A-1 and unless otherwise stated, a reference to a tab number will relate to Exhibit A-1.
[4] Hazel Wiens testified she is the Manager of Camion Holdings Inc. (Camion) as well as being President and sole shareholder. The business of Camion - operating from Dalmeny, Saskatchewan - is owning trucks and equipment that it leases out to Tri-Line Expressways Ltd. (Tri-Line), a transport company. Camion was incorporated in 1986 and owns 10 trucks. During the period before August 1, 1995, Camion hired drivers for these trucks and also controlled dispatching of the trucks to pick up and deliver freight. Subsequent to January 1, 1998, Camion hired drivers and had them on the payroll as employees. However, during the period under appeal, Camion operated on the basis that its drivers, while operating Camion trucks leased to Tri-Line, were independent contractors pursuant to a sub-contract. Ms. Wiens stated Camion locates drivers for its trucks by advertising through agencies, placing notices at truck stops or by word-of-mouth referrals from Tri-Line. She stated Tri-Line requires drivers to have a clean abstract, no criminal record, several years driving experience including operating with particular types of trailers. In her opinion, Tri-Line was very strict, accepted only 1 out of 10 applicants and sometimes rejected persons Camion would have hired. In the event a qualified driver cannot be located to operate a Camion tractor unit to haul loads for Tri-Line, then it will be forced to sit idle. Tri-Line carried the insurance on Camion trucks and required drivers with clean abstracts, good driving experience and lack of criminal record in order to enter into the United States. On occasion, Tri-Line has refused to permit a particular driver to operate a truck while carrying out Camion's obligations under the contract. Ms. Wiens referred to a document entitled Incident Report - Tab 3 - issued by Tri-Line relating to the worker, Brian Adams, concerning the failure of Adams to inform Tri-Line he had received two speeding tickets. The notation on the document indicated Adams had been issued a "verbal warning only and was reminded of company policies", was informed future incidents would be dealt with by the Terminal Manager and had been advised the infraction would be posted in his file for future reference. Ms. Wiens stated, later on, Tri-Line advised it would not dispatch a Camion truck if Adams were the driver and, in response, Camion moved Adams to another company and used his services there as a spare driver. Since Camion did not perform any licensing or reference checks in relation to applicants for a driving job, Tri-Line undertook those tasks and, on one occasion, discovered a driver - using an Alberta operator's license - had committed various infractions in Saskatchewan which had been recorded on his Saskatchewan operator's license. Tri-Line offered a two-day training course but drivers paid their own expenses incidental to attending. Each Camion driver was responsible for looking after the equipment, loading and off-loading, if required, and checking for tie-downs and proper tarping of loads. There was no dress requirement while operating a Camion truck for Tri-Line. The drivers had to have a Class 1 license, clean abstract, deck experience, pass a medical examination carried out by physicians retained by Tri-Line, be qualified to carry dangerous goods and were required to participate in a drug and alcohol compliance program involving random testing paid for by Tri-Line. The relationship between Camion and Tri-Line was established by contract and, thereafter, Tri-Line dispatched a driver directly to take a load to a particular destination. A driver had the right to refuse a load and in this event Tri-line hired another truck to make that trip. There are 12 Tri-Line terminals in Canada and the United States and a driver will contact a terminal to see if a load is available to be hauled to a destination. A driver will also contact a terminal in order to advise he was going to be out-of-service for a certain period and would be unavailable to have a load assigned to him. Camion could contact a driver by requesting a Tri-Line terminal communicate with a particular truck through the Tri-Line satellite communications system. It was the responsibility of a driver to complete the log and Tri-Line would not re-assign a driver to haul a load unless he was within the limits prescribed by the applicable law in that particular jurisdiction. A driver of a Camion truck hauling loads dispatched by Tri-Line might not be in contact with the Camion office for a month. There were no set working hours for the drivers. Referring specifically to the worker, Brian Adams, Ms. Wiens stated that after December 1, 1997, as a result of Tri-Line refusing to allow Adams to continue hauling loads dispatched by Tri-Line, Camion paid wages to Adams and he continued to operate the same truck hauling goods for another company which had entered into a lease with Camion. She referred to the contract dated March 4, 1996 between Brian Adams and Camion - Tab 2 - in which Adams agreed to be an independent contractor while operating a Camion truck. Pursuant to a separate contract between Camion and Tri-Line, Ms. Wiens stated although Tri-Line obtained the necessary licenses for the trucks, Camion ultimately paid the cost. The Camion trucks had to have a safety inspection each month and Camion paid the fee for that service together with the cost of vehicle insurance. Any costs relating to obtaining and maintaining operator's licenses were borne by the individual drivers. Tri-Line, by the 20th of the month following delivery of the service, issued a statement to Camion - an example of which is at Tab 4 - relating to a truck operated by Brian Adams. The document entitled Contract Revenue Report - with attached print-outs - was prepared by Tri-Line and set forth a myriad of details concerning the activity of that particular truck during the reporting period including the miles covered and referred to the split in gross revenue between Tri-Line and Camion. Ms. Wiens explained the driver - Brian Adams - was then paid by Camion in accordance with a sliding scale and certain deductions, such as union dues - which had been paid initially by Tri-Line - and cash advances obtained by Adams using Tri-Line's checking system would also be subtracted from his final payment. At Tab 5, is an example of a payment statement. Camion used a bonus system which was composed of a combination of factors including payment per mile driven and additional compensation in recognition of efficient fuel consumption, proper maintenance and accident-free driving in the sense of not incurring any property damage attributable to driver error. In the example provided at Tab 4, the drivers - a husband and wife team - obtained 95% overall of a possible bonus payment which was based on 1% of the gross revenue of the truck being driven by them. On the fifteenth day of each month, Camion deposited the sum of $800.00 into a driver's bank account which he could then access using a transaction card. Different types of loads earned varying revenues and, in her view, a driver could earn up to 20% more per month by choosing particular loads, by loading and unloading his own truck and managing time efficiently by utilizing daylight hours to haul over-dimension loads or calling ahead to the appropriate Tri-Line Terminal to arrange for another load, thereby eliminating downtime. At Tab 6 - a statement issued by Camion to Larry and Connie Miles - indicated a bonus of $264.00 had been paid to them as a result of having hauled - pursuant to a dispatch from Tri-Line - a rush load which earned Camion a $400.00 bonus. Camion, in its discretion, passed on two-thirds of that amount to the Miles. Camion paid for licensing, fuel, maintenance, vehicle insurance and all other operating expenses of the truck while the drivers had to pay their own meals, lodging, union dues, group insurance and any loss or damage to loads if due to their error or omission together with any amounts due arising from any personal driving infractions. The drivers provided their own bedding, coolers, television sets, microwave ovens, calculators, briefcases, overalls, safety hat with vest, and hand tools. Tri-Line paid, initially, for Workers Compensation Board coverage for the Camion drivers but was re-paid by deducting the payment from Camion's gross revenue for a certain period. Tri-Line also advanced drivers a maximum of $50.00 per day through an internal checking system but any monies so advanced were then deducted by Tri-Line from the share of revenue flowing to Camion and Camion - in turn - deducted such amounts from payment to the drivers. Camion had entered into a contract dated August 29, 1995 with Tri-Line - Tab 1 - in which Camion agreed to haul cargo, exclusively, for Tri-Line. Since Tri-Line had a labour contract with a union, Camion - at paragraph 11 of the contract with Tri-Line - agreed it would ensure all of its drivers would become - and remain - members of the union (or unions) which would be parties to a collective agreement with Tri-Line. Camion also had to agree to bear the cost of group insurance for the drivers and it then deducted the amount of the premiums from a driver's revenue when payment was made in accordance with the monthly statement. At Tab 2 - the contract between Camion and Brian Adams - Schedule A - there was reference to payment of revenue earned, performance bonuses and method of payment. Under the latter category, Adams agreed Camion would hold back 20% of the revenue otherwise payable to him which would be placed into an interest-bearing account - with interest accruing to his benefit - and the monies would not be released until Adams had prepared all necessary tax returns for the relevant fiscal year. Even then, the amount held back would be released in the form of payment to Revenue Canada to satisfy tax liabilities of Adams and only after deducting any amounts due to Camion for various reasons - arising under the contract - would any remaining funds be returned to Adams. Ms. Wiens stated this particular clause had been requested by a driver earlier on and, thereafter, Camion decided to incorporate it into all subsequent contracts with drivers. The drivers had the right to hire properly qualified drivers to operate the truck for them - paragraph 6.02 of the contract - Tab 2 - and bore risk arising from potential damage to cargo as stated in paragraph 7.01. The drivers would be offered a route by Tri-Line to a particular destination but were free to chose their own. Camion had entered into 10 separate contracts with drivers, each of whom operated one truck owned by Camion.
[5] In cross-examination, Ms. Wiens stated that while the decision issued by the Minister specifically related to Brian Adams, the working relationship between Camion and the other drivers was basically the same. Adams is no longer employed by Camion. Ms. Wiens identified a contract - Exhibit R-1 - between Camion and Tri-Line which covered operation of the truck driven by Brian Adams and the description of that particular unit is set forth in Schedule A to the said contract. Camion would not enter into a contract with a particular driver unless and until Tri-Line had advised that the individual was acceptable to haul loads dispatched by Tri-Line. On occasion, Camion agreed to put a driver behind the wheel of one of its trucks, even though that person was not known to Camion management, on the basis Tri-Line had approved that individual as a qualified driver. Tri-Line did not care who operated a particular unit provided the driver was properly qualified and approved in accordance with Tri-Line standards and company policy. At paragraph 6 of the contract, Camion had agreed its servants, agents or employees would abide by and be subject to all rules and regulations of Tri-Line. Ms. Wiens agreed there was no separate contract between Brian Adams and Tri-Line. At paragraph 10, Camion agreed it would make reports to Tri-Line on such matters as Tri-Line might request from time to time. Although mentioned in her evidence during examination-in-chief, Ms. Wiens - in response to a question from counsel for the respondent - re-iterated Camion had promised Tri-Line each Camion driver would become a member of the appropriate union, as required by any collective agreement in place, but she did not know details of any dealings or agreements between Tri-Line and any bargaining unit. At paragraph 16, Camion agreed to bear the premium cost of a health and welfare plan covering a Camion employee who would be operating the truck listed in Schedule A. Ms. Wiens conceded there was no clause in the contract between Camion and Tri-Line which seemed to ever contemplate any Camion driver having any status other than employee, servant or agent. Referring to the specific contract with Brian Adams - Tab 2 - Ms. Wiens stated it was an agreement whereby Adams agreed to manage a specific piece of equipment, that is, the truck driven by him. At paragraph 1:00(b), Adams had agreed to make his services available to Camion, as required, within two hours after receiving notice to that effect, but Ms. Wiens stated, in practice, this clause was not utilized because Tri-Line dispatched the drivers. In her opinion, the other clauses in the contract were followed, as written. In 1995, Camion made the decision to forego dealing directly with its customers and this led to leasing out company trucks to Tri-Line. She agreed Camion had the ultimate responsibility in deciding who would - or could - drive company trucks. Many drivers, including Brian Adams, had worked for Camion prior to 1995 and had done so with the status of employee. As such, drivers had been issued T4 slips and the appropriate deductions had been made from their pay. Even during this period, Camion still leased trucks to another entity - IDW Trucking Ltd. - of which she was a director and her husband was the major shareholder. Trucks formerly owned by that corporation were then sold to Camion. In the 1996 financial statement of Camion, there is reference to the sum of $369,000 having been paid out in salaries but Ms. Wiens stated this is incorrectly labelled and the amount was actually the total of payments made to sub-contractors. At paragraph 5.00 of the agreement at Tab 2, the contractor (Adams) was to employ one driver to operate the specific tractor-unit and the other contracts contained the same provision but Larry and Connie Miles requested Camion deposit funds - owing to the driver - into a joint account and Camion agreed to do so. Ms. Wiens identified various contract revenue reports - Exhibit R-2 - relating to Brian Adams as well as payment records - Exhibit R-3 - covering the period commencing in January, 1996 and continuing through December, 1997. Ms. Wiens stated the holdback clause in the agreements with the drivers requiring the 20% holdback for income tax liabilities was part of the contract and if someone wanted to drive a truck for Camion he or she accepted that clause. The mechanism by which drivers obtained money to pay tolls and other small payments or for personal use was part of the money system set up by Tri-Line. On occasion, drivers would obtain loans and these would be deducted from the amount owing to the driver at the end of the month. In the event there was a negative balance, in the sense the driver ended up owing Camion money, then that would be carried forward to the next month. Drivers were reimbursed for any tolls, fees, fares, etc. paid by them during their trips. All Camion trucks (tractors) carried Tri-Line insignia and the trailers were provided by Tri-Line. Adams did not drive for any company other than Camion but, under his contract with Camion, could have done so during the relevant period.
[6] Counsel for the appellant agreed Tri-Line was not the employer of the worker, Adams, but neither was Camion. Instead, Adams was a truck driver in business on his own account having a chance of profit and risk of loss in accordance with the terms of his contract. Camion had no control over the generation of revenue and Tri-Line paid additional money for certain loads under varying conditions and a substitute driver could have been hired by Adams to operate the truck provided this person was qualified in accordance with Tri-Line standards. The evidence, in counsel's submission, pointed to an absence of control being exercised by Camion and the agreement with the driver could not be terminated except upon giving 30 days written notice.
[7] Counsel for the respondent submitted the business was clearly that of Camion who had chosen to enter into a contract with Tri-Line and to have given it the right to exercise certain control over Camion drivers. There was no significant opportunity for profit or risk of loss and on balance it was apparent the worker - Adams - was an employee pursuant to a contract of service and the decision of the respondent was correct.
[8] In Wiebe Door Services Ltd. v. M.N.R., 87 DTC 5025, the Federal Court of Appeal approved subjecting the evidence to the following tests, with the admonition that the tests be regarded as a four-in-one test with emphasis on the combined force of the whole scheme of operations. The tests are:
1. The Control Test
2. Ownership of Tools
3. Chance of Profit or Risk of Loss
4. The Integration Test
[9] In the within appeal, Camion - pursuant to the contract with Tri-Line - agreed Camion servants, agents or employees would abide by and be subject to all rules and regulations of Tri-Line. Similarly, Camion also agreed Tri-Line would have the right to dispatch certain loads and deal directly with Camion drivers regarding various aspects of the cargo-hauling business. In the specific instance of Brian Adams, Camion, at the request of Tri-Line exercising its perceived right under the contract with Camion, insisted Adams no longer operate the Camion truck while hauling under the auspices of Tri-Line. Camion took Adams off the Tri-Line runs and - using the same truck - assigned him to haul loads as dispatched by another freight carrier. If an employer loans out an employee to another person or entity or - in fancier terms - pursuant to a secondment, permits the worker to perform services for another and agrees day-to-day management of that person can be undertaken by the recipient of the service, that, without a whole lot more, does not mean the employer is still not exercising control. In the within appeal, Camion agreed with Tri-Line that Camion employees would belong to a union and would be covered by Worker's Compensation Board legislation. The dues and premiums relating to these matters were later paid for by Adams and the other drivers when Camion issued payment for services and the amounts were shown as deductions on the statement. Apart from the reasonable assumption that union membership - with health and welfare benefits flowing therefrom - and coverage by provincial compensation legislation is applicable to an employee as opposed to an independent contractor, it would be an odd working relationship to see one entity forcing another to obtain certain insurance coverage or to join specific organizations which merely provided a benefit to the worker rather than being an integral part of getting the job done.
[10] With regard to ownership of tools, the truck was owned by Camion. The other small items that may have been owned by some drivers - perhaps, also by Brian Adams - were largely for the personal comfort and convenience of the drivers while on the road for long periods of time and were not reasonably connected to the production of revenue which was derived by driving the Camion truck from point A to point B with a load hauled on - or in - a trailer owned by Tri-Line.
[11] The evidence of Ms. Wiens indicated there was an opportunity for a driver to have some impact on revenue earned in the sense a different high-paying load could be hauled by accepting a particular dispatch from a Tri-Line terminal or by using efficient time-management techniques but the difference, in reality, would be very slight overall. There was nothing in the evidence to substantiate the statement by Ms. Wiens that a driver could influence revenue up to 20% of the total. Furthermore, the payment of bonuses was, to a large extent, dependent on the exercise of discretion by Camion management according to certain criteria unilaterally set by the company from time to time. A perusal of the payment record for Brian Adams - Exhibit R-3- covering the period from January, 1996 through December, 1997 does not reveal even one payment of any type of bonus or extra revenue-sharing due to Adams having increased the revenue stream from Tri-Line by having exercised his right to accept higher-paying loads. Notwithstanding certain clauses in the contract between Camion and Adams - Tab 2 - purporting to deal with the issue of risk, Camion carried full insurance and there was no real impediment to the security of the income generated by the driver who was paid according to the number of miles travelled and revenue produced. Further, in paragraph 19 of the contract between Camion and Tri-Line - Tab 1 - Camion gave Tri-Line the right to settle claims from third parties up to a maximum of $2,500 without the consent of Camion and any amount paid would be deducted from Camion's share of the revenue produced. It would be a peculiar proposition - in law - if Camion were to proceed to deduct that same amount from a driver's revenue when that individual was not privy to the contract with Tri-Line.
[12] As for the integration test, in the case of David T. McDonald Co. Ltd. v. M.N.R., 92 DTC 1917, Mogan, T.C.C.J. was considering whether an individual was an employee of a corporation or if his relationship was that of an independent contractor. At page 1922, the Honourable Judge Mogan stated:
"In Wiebe Door, MacGuigan, J. cited with approval at page 5030 the Market Investigations case in which the question is asked: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" To answer that question, one must consider whether the person has the capacity to engage in the particular business on his own account. If he has experience, knowledge and goodwill in the business, it is easier to conclude that he has the capacity to engage in the business on his own account and that he is not simply an incorporated employee. This is particularly true when the person has no prior employment connection with the party who benefits from his services. But if he has no experience, knowledge or goodwill in the business and offers only personal skills not related to the business, it is more difficult to conclude that he has the capacity to engage in the business on his own account; and it would probably be more reasonable to regard him as an employee of the party who benefits from his services."
[13] In the within appeal, Brian Adams worked for Camion, prior to 1995, on the basis of being an employee, subject to the usual payroll deductions, and there was little or no change in his function when he provided the same services to Camion under the contract. There had been no prior business relationship between Adams and Tri-Line, a party also benefiting from his services, and the licensing, business relationship and overall structure belonged to Camion and it was Camion's contractual relationship with Tri-Line which permitted revenue to be produced. Adams' function was to drive the truck. To hold that he was somehow an entrepreneur engaged in managing a piece of equipment - a tractor unit - licensed and owned by Camion, hauling a trailer owned by Tri-Line, carrying loads dispatched by Tri-Line, and being paid by Camion at a rate based on mileage covered with the expectation, perhaps, of receiving a bonus dependent on Camion discretion, would run contrary to the weight of the jurisprudence which requires that, for this test, there be some relevant and significant indicia of entrepreneurial status. The evidence does not disclose Brian Adams' working relationship with Camion to exhibit, on his part, any characteristics of a truly distinct existence in structure or function ordinarily attributable to an independent contractor. The requirement that 20% of revenue be held back from Adams and the other drivers, in order to satisfy income tax liabilities, indicates Camion was not sure of the purported status of independent contractor it was trying to establish by contract with the drivers and wanted to have some money on hand in the event a determination - at some future date - of the drivers' status, as employees, might create a problem because Camion had not made the deductions for income tax required to be made by an employer pursuant to the Income Tax Act. There was an obvious lack of bargaining power in the hands of the drivers who had to abide by that clause in a contract or forego driving a Camion truck. One test of a working relationship is how one or other - or both - of the parties hold themselves out to a third party directly or indirectly involved in the overall scheme of the revenue-producing activity. It is obvious Tri-Line, under its contract with Camion, had no reason to anticipate the Camion drivers would be working in any capacity, whatsoever, other than as employees of Camion and the consistent wording of the relevant contract bears that out. Certainly, Tri-Line was not bargaining with Camion on the basis the obligations arising out of the contract would be fulfilled by Camion entering into a series of contracts with various drivers on the basis of them being sub-contractors. Instead, Camion agreed its obligations would be fulfilled by people who were subject to its direction and control by virtue of being employees, servants or agents.
[14] What the parties thought their relationship was will not change the facts. In the case of The Minister of National Revenue v. Emily Standing, 147 N.R. 238, Stone J.A. at pp. 239-240 stated:
"There is no foundation in the case law for the proposition that such a relationship may exist merely because the parties choose to describe it to be so regardless of the surrounding circumstances when weighed in the light of the Wiebe Door test."
[15] In the case of F.G. Lister Transportation Inc. v. M.N.R., 96-2163(UI), unreported, dated June 23, 1998, I dealt with the case of long-haul truck drivers and found they were employees working pursuant to a contract of service. Because most of these cases can turn on an apparent slight difference in facts, in the Lister decision, at paragraph 13, I commented as follows:
"I now find myself in the position of being required to point out the differences in the facts in the within appeal and those in two other decisions issued by me in which I held the drivers were independent contractors. In the case of Lee (c.o.b. D & A Transport) v. M.N.R. [1995] T.C.J. No. 426 I held the driver of a long-haul transport truck to have been an independent contractor. In that case, the driver had registered his business for purposes of the Goods and Services Tax, maintained a business bank account and had filed income tax returns on the basis of being self-employed. In Lee, the appellant had earlier been an employee of the payor and had agreed to alter the working relationship and there was clear evidence he could have hired another driver to work for him on long-hauls thereby generating a profit. As well, in Lee, it came down to choosing between two versions of circumstances surrounding a working relationship and the choice did not favour the worker. I also held the tools of the trade were the personal skills of the driver as a qualified person capable of hauling a loaded trailer over long distances. That finding was in the context of the driver operating a business under the trade name, Rick's Driving Services, having a bank account under that name and otherwise doing business with third parties on that basis. Income tax returns had been filed on the basis the worker was a self-employed person.
In another decision of mine, Metro Towing Ltd. v. M.N.R. [1991] T.C.J. No. 717, I found a tow-truck driver to have been an independent contractor. In that case, while there was a high degree of control over the worker, he had leased the vehicle and all of the equipment needed to carry out his task and bore all of the costs, including insurance, relating thereto. That driver also had a substantial risk of loss arising from the operation of that vehicle in the event he was not able to generate sufficient gross revenues which fluctuated on a monthly basis, as did, to a lesser extent, his costs of operation. In that case, like Lee, supra, the worker had earlier been on the regular payroll and had decided to enter into a new arrangement whereby he was the lessor of a truck and certain equipment and would be entitled to receive 30% of gross towing revenue arising from jobs which were dispatched by Metro Towing Ltd. The evidence in the Metro Towing Ltd. appeal disclosed that other tow-truck drivers operated through a limited company or a partnership arrangement.
In the case of Summit Gourmet Foods Inc. v. M.N.R. 97-470(UI), a decision of The Honourable Judge Mogan, T.C.C., dated November 24, 1997, Judge Mogan considered the status of a person - Freeman Walters, the intervenor - who drove a truck for the appellant, a corporation carrying on business as a supplier to pizza restaurants. Judge Mogan held the driver to have been an employee engaged in insurable employment and, at page 5 and following, stated:
"On control, I regard that test as marginally favouring employment and not independent contractor even though counsel for the Appellant stressed that Freeman was not told the way to do his work. I accept that. On the other hand, he was assigned trips; he could arrange the order of delivery and the date but they had to be delivered within a week, and he had to call in to the Appellant's office each morning. This was brought out in Freeman's testimony. He said: "Every person operating a truck has to report in, and I specifically did. I had to call in every morning to say where I was going so that they would know where I would be that day, and whether there were additional orders that had come in from customers which I might have to fill out of the extra product I was carrying". There was an opportunity for the Appellant to call evidence in reply to contradict that bald statement by Freeman but it failed to do so. On a common sense basis, I believe the statement.
Eric described a freezer truck which Freeman used costing between $70,000 and $80,000. When a company sends a person out in its truck of that value, it wants to know not only where the truck is day-by-day but also, when there are established customers to be serviced, it wants to know in a timely manner whether the customers are being serviced because they are the lifeline of a business. I cannot believe that a person in Freeman's position would not be required to report in daily on where he went and what he had serviced and whether there were fresh orders.
The fact that Freeman could arrange the order in which he would service these customers, or that he could arrange the time when he started on a trip does give him some freedom from control but, on balance, I would say that although he was not under the hand of the Appellant, they knew on a daily basis where he was, what he was doing and what customers he had serviced. Therefore, on the test of control, I find that there is more of an indication of the type of control one finds in employment than the simple direction which is given to an independent contractor.
With regard to the test of ownership of tools, it is very strongly in favour of employment and not an independent contractor. The only relevant tools for this kind of work were the truck and the dolly, both of which were owned by the Appellant. Counsel for the Appellant brought to my attention a similar case in Saskatchewan, where Mr. Justice Kyle of the Court of Queen's Bench said:
...To draw a parallel between the ownership of tools in the case of a tradesman and the hotel and equipment therein in a case such as this appears to be stretching the logic of the Montreal Locomotive case beyond reason.
I would agree with that statement. I think that an $80,000 truck was never in the minds of those learned Judges half a century ago who laid down these early tests and talked about ownership of tools. In my view, they were talking about tradesmen's tools like a carpenter's hammer and saw. The fact is, however, that in a more sophisticated society, this truck was the only vehicle through which the service was performed. The driver's licence that was held by Freeman was a pre-qualification to his engagement with the Appellant; and he could not be engaged if he did not have a driver's licence. I do not regard his driver's licence as a tool. I look at the only thing that Freeman used to perform the services and it was a very expensive and sophisticated piece of equipment. Therefore, the test of ownership of tools favours employment.
On the chance of profit and risk of loss, I find that also favours employment because there was virtually no risk of loss. There was a chance of compensation because all Freeman had to do was complete the round trip and he would receive the amount that had been settled between himself and the Appellant in Exhibit A-1. Compensation in this context is not profit. Counsel for the Appellant argued that it was possible for Freeman to incur a loss because, on the surplus product that he carried, he could say: "I will buy some of that and resell it for profit on my own". If he had committed to that kind of arrangement, he could buy the product at the point of departure on the trip; let us say 10 cases of completed pizza, and take a chance on selling them either on this trip, and make money by the trading in pizza product. That opportunity may have been available to him, but I draw the inference that the extra product was not there just for the trading and commercial activities of the driver. It was also there as backup product for the needs of established customers who might, in the course of the trip, decide that they needed more than the order destined for them at the time of departure of the truck."
[16] The foregoing observations and reference to the Summit Gourmet Foods, supra, case are relevant to the within appeal.
[17] The appellant has not demonstrated the decision of the Minister to have been incorrect and, therefore, it is confirmed. As a result, this appeal is dismissed. In accordance with the mechanism agreed to by the parties at the outset, appeal 98-169(CPP) is also dismissed.
Signed at Sidney, British Columbia, this 28th day of May l999.
"D.W. Rowe"
D.J.T.C.C.
COURT FILE NO.: 98-1063(UI)
STYLE OF CAUSE: Camion Holdings Inc. v. M.N.R.
PLACE OF HEARING: Saskatoon, Saskatchewan
DATE OF HEARING: March 5, 1999
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: May 28, l999
APPEARANCES:
Counsel for the Appellant: Kerry M. O'Shea
Counsel for the Respondent: Elaine Lee
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, CanadaCOURT FILE NO.: 98-169(CPP)
STYLE OF CAUSE: Camion Holdings Inc. v. M.N.R.
PLACE OF HEARING: Saskatoon, Saskatchewan
DATE OF HEARING: March 5, 1999
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: May 29, 1999
APPEARANCES:
Counsel for the Appellant: Kerry M. O'Shea
Counsel for the Respondent: Elaine Lee
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
98-1063(UI)
BETWEEN:
CAMION HOLDINGS INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Camion Holdings Inc. (98-169(CPP)), on March 5, 1999, at Saskatoon, Saskatchewan, by
the Honourable Deputy Judge D.W. Rowe
Appearances
Counsel for the Appellant: Kerry M. O'Shea
Counsel for the Respondent: Elaine Lee
JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 28th day of May l999.
|
"D.W. Rowe" |
D.J.T.C.C.
98-169(CPP)
BETWEEN:
CAMION HOLDINGS INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Camion Holdings Inc. (98-1063(UI)), on March 5, 1999, at Saskatoon, Saskatchewan, by
the Honourable Deputy Judge D.W. Rowe
Appearances
Counsel for the Appellant: Kerry M. O'Shea
Counsel for the Respondent: Elaine Lee
JUDGMENT
The appeal is dismissed and the decision of the Minister is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 28th day of May l999.
|
"D.W. Rowe" |
D.J.T.C.C.