Date: 20000310
Docket: 1999-147-EI, 1999-149-CPP
BETWEEN:
GASTOWN ACTORS' STUDIO LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
Docket: 1999-3301-EI
TRISH ALLEN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
Docket: 1999-274-EI, 1999-275-CPP
PETER HANLON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
AND
Docket: 1999-362-EI, 1999-363-CPP
SUSAN ASTLEY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
Docket: 1999-3300-EI
BART ANDERSON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Reasons for Judgment
Rowe, D.J.T.C.C.
[1] On October 7, 1998 the Minister of National Revenue (the "Minister") confirmed an assessment dated February 17, 1998 in which the Minister assessed Gastown Actors' Studio (Gastown) with respect to employment insurance premiums in the amount of $12,890.61 for the 1997 taxation year payable by Gastown pursuant to the Employment Insurance Act in connection with the services performed for Gastown by certain individuals listed in Schedule A to the Reply to Notice of Appeal in respect of whose remuneration Gastown failed to make remittances to the Receiver General, as required. Gastown appealed from this assessment.
[2] On October 7, 1998 the Minister assessed Gastown with respect to Canada Pension Plan contributions in the amount of $9,190.86 for the 1997 taxation year payable pursuant to the Canada Pension Plan in connection with the services performed by the individuals listed in Schedule A to the Reply to Notice of Appeal in respect of whose remuneration Gastown failed to make remittances to the Receiver General, as required. Gastown appealed from this assessment - 1999-149(CPP) - and Counsel agreed this appeal would follow the result of the within appeal.
[3] Trish Allen, appearing on her own behalf, appealed - 1999-3301(EI) - from the decision of the Minister dated October 7, 1998, on the basis that she was not an employee but was a self-employed individual providing certain services to Gastown from time to time. At the conclusion of the evidence in the Gastown appeal, she requested the evidence apply to her appeal and agreed she would be bound by the result.
[4] Peter Hanlon, appearing on his own behalf, appealed - 1999-274(EI) - from the decision of the Minister dated October 7, 1998, on the basis he was employed under a contract for services and was not an employee of Gastown. At the conclusion of the evidence in the Gastown appeal, he requested the evidence apply to his appeal and agreed he would be bound by the result. As well, he appealed - 1999-275(CPP) - from the decision of the Minister dated October 7, 1998 issued pursuant to the Canada Pension Plan and agreed the result in the employment insurance appeal would apply to said appeal.
[5] Susan Astley, appearing on her own behalf, appealed - 1999-362(EI) - from the decision of the Minister dated October 7, 1998, on the basis she was self-employed during the period she provided services to Gastown and also appealed - 1999-363(CPP) - from the decision of the Minister issued pursuant to the Canada Pension Plan. At the conclusion of the evidence in the Gastown appeal, she requested the evidence apply to her appeal and agreed she would be bound by the result. Further, she agreed that result would apply to her Canada Pension Plan appeal.
[6] Bart Anderson, appearing on his own behalf, appealed - 1999-3300(EI) - from the decision of the Minister dated October 7, 1998, on the basis he was a self-employed teacher, actor and acting coach and was not providing services to Gastown in any capacity other than as an independent contractor. At the conclusion of the evidence in the Gastown appeal, he requested the evidence apply to his appeal and agreed he would be bound by the result.
[7] Counsel for Gastown conceded that Jessica Brown and Sue Brown - workers named in the assessment - were engaged in insurable employment pursuant to a contract of service throughout the 1997 taxation year. In addition, Counsel for Gastown conceded that Peter Hanlon was in insurable employment during the relevant period when he was working as a full-time Acting Director at Gastown during the months of January, February, March, April, September, October, November and December, 1997 and that he earned a total of $4,000.00 from such employment based on a salary of $500.00 per month. However, from Gastown's standpoint all the remaining individuals were independent contractors.
[8] After having heard some evidence in the within appeal, Counsel for the Respondent conceded that Jaap Teer - named in the assessment - was not engaged in insurable employment with Gastown during the relevant period and should be excluded from the assessment.
[9] Andrea MacDonald testified she is the Executive-Administrator of Gastown Actors' Studio in Vancouver and that she has worked there since 1992. Gastown is an acting school offering three programs: a part-time study on a month-to-month basis operating 12 months a year, an independent study program over an 8-month period and a full-time program over the course of two years - divided into 5 blocks of instruction a year - each lasting two months. From the standpoint of an instructor, there is no substantial difference, as a particular class may be composed of students from one or more programs. Gastown offers a variety of classes relating to the craft of acting. In 1997, the instructors engaged in teaching the full-time program were the only ones who entered into written contracts with Gastown and the same procedure had been followed in 1995 and 1996. However, MacDonald could not locate those contracts. The instructors in the part-time program did not enter into written contracts with Gastown. Gastown and the instructors agreed that if an instructor had an audition on short notice they could find a substitute to teach the class and pay that person directly for that service. In the event an instructor landed an acting job which would occupy a longer period of time, it was understood that he or she would accept the job and a substitute would be found to teach the remainder of that particular course. The instructors were paid on an hourly basis and the remuneration varied in accordance with qualifications, training and experience. The number of hours involved in teaching a particular class was - sometimes - dependent on enrolment. A full class - composed of 10 students - takes longer to teach and will occupy 32 hours of an instructor's time during one month. A class of 7 students will require only 25 hours of instruction during the same period. A minimum of 6 students was required to make up a class. The instructors were paid on the 15th and 30th of each month and were not paid any benefits or for preparation time. Certain instructors - Bart Anderson, Jessica Van Der Veen, Trish Allen and Silver Brobst - charged GST to Gastown when submitting invoices relating to their instruction time. MacDonald stated all instructors had the option to re-schedule a class provided space was available. All of the instructors were working actors and were acquainted with each other. As a result, the requirement for a substitute to teach a class was frequent because someone would get an acting job for a day or a week and would be unavailable to teach the assigned class. On occasion, students sign up for a class on the basis it will be taught by a specific instructor. Gastown encouraged the instructors to find work as actors and to obtain additional experience as a result. In 1999, Gastown had some cash flow problems and was usually two months behind in paying the instructors so that it currently owes them a total of $20,000.
[10] MacDonald explained the policy of Gastown - in the event a student withdrew from a particular class - was to reduce, proportionately, the amount paid to the instructor even though the student had paid in advance. On occasion, there would be insufficient enrolment and a proposed class would be cancelled upon giving two working days notice to an instructor. MacDonald referred to a printout of 97 classes on a month-to-month basis (Exhibit A-1). Originally, 126 classes had been slated but 29 were cancelled due to low enrolment. The frequency and time of the classes vary widely and about 20 classes are scheduled in a month for the part-time students while the full-time students will study approximately 30 hours a week. In the event a teaching contract for a particular instructor is not renewed, that person is not paid any severance pay. Various instructors also taught private classes - sometimes to students from a class they were teaching - and even if the instruction occurred in a room or space on the Gastown premises, Gastown was not involved - at all - in any dealings between the instructor and student. There were occasions when someone would call Gastown and inquire about obtaining private instruction and the caller would be instructed to contact an instructor directly to make the necessary arrangements. Gastown did not give any instructions to the instructors as to the method or manner of teaching as each one was qualified within a particular discipline and utilized individual techniques. All instructors used their own textbooks and teaching materials, including some props. The class times were set by the instructors within the framework of the part-time study program. There was no office space provided to the instructors. In referring to Schedule A of the Reply to the Notice of Appeal of Gastown, MacDonald stated that - with the exception of Jaap Teer - all of the named individuals had hired substitutes to teach for them - on occasion - during 1997. Peter Hanlon worked as Program Director for 8 months during 1997 and was paid a salary of $500.00 per month. Those instructors involved in teaching dance or voice used their own equipment and music and some used their own video machines. The individual - Todd Waite - would only teach during a two or three month period. In the event an instructor found work as an actor - partway through a class - and a substitute could not be found, the class would be cancelled and refunds issued to the students. On other occasions, it would be the students who found acting work and they would drop out of class so that there were insufficient students to meet the minimum class size and it would be cancelled without any compensation being paid to the instructor.
[11] In cross-examination, MacDonald stated the substitutes had to be qualified teachers and this requirement did not present a problem as the instructors were acquainted with each other's capabilities. On occasion, an instructor would refuse to teach a class with more than 12 students but the usual minimum class size of six could, on a case-by-case basis, be reduced to five if MacDonald approved it. The refund policy of Gastown studio was in accordance with the provincial government regulations pertaining to the type of instruction offered and it depended on the extent of the total course taken prior to the student seeking to withdraw. In the event Gastown was entitled to retain a portion of the tuition paid, that amount, or any part thereof, was not passed on to the relevant instructor. Gastown - during 1997 - had three full-time employees carrying out administrative duties but has since been increased to five. Of the list of workers contained in Schedule A to the Reply, the following persons taught in both the part-time and full-time program: Trish Allen, Bart Anderson, Silver Brobst, Tim Hine, Andrew Johnston, Andrew McIlroy, and Andrew Olewine. The individuals involved in teaching only in the full-time program were: Sue Astley, Sarah Ford, Peter Hanlon, Marlise McCormick and Jeffrey Renn. Those persons who instructed only in the part-time program were: Jo Bates, Sarah Ford, Bill MacDonald, David Palffy, Jessica Van Der Veen and Todd Waite. Andrea MacDonald stated Gastown was sometimes approached by an instructor to see if a particular course would be of interest to the studio. The curriculum for the full-time students was set by Gastown and a program would set out persons named as members of the Faculty but that changed every two months. MacDonald identified a full-time program guide - Exhibit R-1 - and a publication concerning the full-time acting program for 1998-99 - Exhibit R-2. MacDonald stated the hourly rate for instructors varied in accordance with the individual's experience both as a teacher and an actor. She identified a form of contract - Exhibit R-3 - prepared by Peter Hanlon, that had been used in 1996 and/or 1997. Gastown did not suffer any penalty - in relation to paying compensation to an instructor - if a class was cancelled prior to its commencement date. In 1997, the full-time program was restricted to 20 students. Gastown staff processed student loan applications and set tuition fees and terms of payment and undertook collection of the fees. Gastown did not own much equipment and used Peter Hanlon's personal inventory but it did have a prop room and owned the lighting and sound equipment, desks, chairs, couch and tables. The courses offered to students were set at different levels as some may have studied elsewhere and did not want to repeat an entry-level course. Gastown was established by Mel Austin-Tuck and is a private institution offering particular instruction but it does not attempt to emulate a degree-granting institution. The instructors comprising the Faculty of Gastown and many of their former students have found success within the industry. A government appointed commission receives an annual copy of Gastown's program and brochures. The students enrolled in the full-time program receive a certificate upon successfully concluding the course of study.
[12] Jessica Van Der Veen testified she resides in Vancouver and is an actor and teacher. She has been an instructor at Gastown for the past 10 years and also taught there in 1997 in the capacity - in her view - of an independent contractor working pursuant to a verbal contract. She decided what courses she would be interested in teaching and then determined the content and manner of instruction. In 1994, she gave birth to a child and had to rearrange her teaching schedule in order to accord with child care needs. Van Der Veen stated she brought props and texts to class and has purchased materials, as required, without ever seeking reimbursement from Gastown. As an example, she produced a cancelled cheque dated December 18, 1995 - Exhibit A-2 - relating to the purchase of a couch to be used in the studio while teaching courses. She charged Gastown an hourly rate of $40.00 plus GST. Her rate is somewhat higher than other instructors and, on occasion, she will hire substitute teachers and pay them at a lower rate than she charged to Gastown. Her classes are capped at a maximum of 12 students with 6 as the minimum. A smaller class leads to reduced instructional time. Van Der Veen promotes herself - as a teacher - within the acting community and places advertisements in appropriate publications. There have been occasions in which she wrote out a course description, presented it to Gastown and obtained permission to teach that subject matter provided a sufficient number of students chose to enrol. She was not paid for any preparation time and when she was unable to teach for 11 weeks as a result of taking time off as maternity leave, she did not qualify for any unemployment insurance benefits. Otherwise, the only reason she would not be present to teach a class would be due to demands of working - as an actor - on television, film or stage or attending an audition for a role. In the rare event illness preventing her from fulfilling a teaching obligation, she would hire and pay a substitute. She would be paid by Gastown as though she had taught that particular session herself and the substitute would submit an invoice to her, usually based on a rate of $30.00 per hour. She referred to copies of cheques - Exhibit A-3 - she had paid to substitute teachers in 1995, 1996 and 1999. In 1993, she went to Europe for 7 weeks and there was no guarantee of ongoing work as a teacher at Gastown following her return. Upon a class being cancelled due to insufficient enrolment, she received only two or three days notice. In 1997, only two out of 24 classes were cancelled. She has been at Gastown for a long time and her classes are usually subscribed fully with a lower dropout rate than usual. As to her working relationship with Gastown, she stated "there is a certain amount of precariousness in my life which I can trade off so I can leave on a moment's notice to take an acting job". The Gastown studio owes her money for teaching - possibly as much as $4,700.00 - and she regards the outstanding account as a business debt owed to her and she would expect to be paid in the same manner as other unsecured creditors. There were times when she paid a substitute for teaching a class and then had to wait for two months or more to be paid by Gastown for that same class. She taught classes and did private coaching for auditions from her own home and also at the Gastown studio. These private sessions did not involve Gastown and she charged a fee directly to the student. The attitude taken by Gastown management was that it enhances the reputation of the school if a student lands a good acting job.
[13] In cross-examination, Van Der Veen stated Gastown had never refused to accept any of her proposals for teaching a class and had not required her to pay for props or materials used in the course of teaching. From the standpoint of earning revenue, she stated the best scenario is to act in film or television which will pay between $750.00 and $1,000.00 a day for speaking parts. She also had earned money teaching a course for the public health authority. Gastown undertook the responsibility for advertising the courses, registering the students, collecting tuition and processing student loans, if required. The teaching was carried out on Gastown premises and the furniture was - mainly - owned by Gastown and she had access to a photocopier.
[14] Peter Hanlon testified he resides in North Vancouver and is an actor and acting teacher. He has been an instructor at Gastown since 1992. In 1997 - as conceded earlier by Counsel for Gastown - he agrees he was an employee of Gastown for a total of 8 months - at a salary of $500 per month - while fulfilling the position of Program Director. Otherwise, he saw himself as an independent contractor. He owned certain editing equipment - valued at $1,700.00 - and Gastown used it without compensating him. He also hired substitutes to teach his class when he was unable to do so by reason of having obtained a part in TV or film. These absences from teaching occurred three or four times a year and could last one day or as much as 12. Once, he notified Gastown that he would not be available to teach for a period of two to three months. Gastown currently owes him about $4,500.00 and he has already paid substitute instructors for teaching some of the classes which are included in his outstanding invoice to Gastown. He also teaches students privately without any involvement by Gastown.
[15] In cross-examination, Hanlon stated Gastown did not require him to purchase materials or supply equipment. He was aware the curriculum had been presented to the regulatory body established by provincial legislation. As an example of the method used by the instructors to obtain substitutes, Andrew McIlroy - at the beginning of a block of classes - left Vancouver for a job in a film being made in Europe and merely hired a substitute to teach the balance of the course.
[16] Bart Anderson testified he is an actor, acting instructor and private coach residing in Vancouver. He started teaching at Gastown in 1993 and - in 1997 - taught both part-time and full-time students. Throughout, he always regarded himself as an independent contractor. When necessary, he hired substitute teachers so he could attend auditions or obtain work in TV or film or if he had been unable to attend due to illness. He negotiated an hourly rate with the substitute teachers and paid them directly while billing Gastown for the class at his hourly rate together with GST. He has both made a profit and sustained a loss in the course of hiring substitute instructors. In 1997, he informed Gastown he would not be available because he was taking time off to write, produce and perform in a one-man show. He charged students for private coaching and identified copies of certain receipts - Exhibit A-4 - pertaining to his fees.
[17] In cross-examination, Anderson agreed he had been listed in the Gastown published program as a member of the Faculty. He stated it was understood by the instructors, the students and the management of Gastown that there would be substitutes hired from time to time to teach classes because the primary loyalty of an instructor was to advance his or her career by accepting acting work.
[18] Patricia (Trish) Allen testified she lives in Vancouver and is an actor, voice teacher, director and instructor at Gastown since mid-1997. She teaches classes composed of both part-time and full-time students and always proceeded on the basis she was an independent contractor. When hiring substitutes, she was able to pay them exactly what she was billing Gastown except she included GST in her accounts to the studio. Gastown now owes her an amount between $2,700.00 and $3,000.00. While teaching at Gastown, she hired an assistant to help her in the course of directing a show and paid him for those services (Exhibit A-5).
[19] In cross-examination, Trish Allen agreed Gastown had not required her to hire an assistant.
[20] Counsel for Gastown began his submissions by referring to the integration test, suggesting that it needs updating in the context of the modern workplace and that it must be applied from the viewpoint of the instructors. In terms of control over the teachers, he submitted Gastown exercised very little control over method or content and the teachers were under no obligation to teach a particular course and were able to set a maximum number of students per class. As for ownership of tools, instructors provided some of their own equipment and costumes and lighting equipment was provided by Gastown. Counsel pointed out there were certain elements of risk of loss and chance of profit arising from the unfettered right to hire substitutes - for whom pay might be at a lesser or greater rate - and that the policy regarding substitution was uppermost in the minds of both parties prior to proceeding to provide teaching services, especially by recognizing the worker's needs for career advancement had priority over the demands of Gastown. In addition, several instructors taught private lessons or earned money by coaching even though they used the facilities of Gastown without paying any compensation therefor.
[21] Counsel for the respondent submitted the integration test was alive and well and did not require any adjustment. Clearly, in Counsel's view of the evidence, the business was the business of Gastown. The instructors did not carry on business on their own account because without Gastown and its organization structure and administrative capability, there would not have been compliance with the Private Post-Secondary Education Commission of British Columbia - a regulatory body - that approves curriculum, issues certification and sets the rules for rebates and refunds to students. Gastown also processed student loan applications and eligibility for study was determined by the Ministry of Advanced Education. The students paid tuition fees to Gastown in accordance with the established schedule. While control was slight, it was consistent with the nature of the industry and Gastown would encounter difficulty in attracting quality instructors if it were to be hard-nosed about the requirement for classes to be taught personally by the instructors without substitution. Counsel further submitted the majority of the tools were provided by Gastown and the chance of profit or risk of loss was not present in any significant manner in the sense there was a spirit of entrepreneurship flowing from the relationship between Gastown and the instructors.
[22] The assumptions of fact relied on by the Minister were set out in paragraph 5, subparagraphs (a) to (o), inclusive, as follows:
"(a) the Appellant operates an acting school (the "School");
(b) the Appellant engaged the Workers, who are all professional actors, to teach its students;
(c) the School offers both full-time and part-time courses;
(d) the Workers generally have an area of specialty which they teach, e.g., voice training;
(e) the Workers are paid an hourly rate for their services, usually based on the Worker's experience and the number of students in the class;
(f) the Workers are not provided with any benefits by the Appellant;
(g) the Workers are not trained by the Appellant;
(h) the Appellant does the advertising and obtains the students;
(i) the services are performed at the School and the Workers are not charged for using the Appellant's premises;
(j) the Appellant has the right to control the manner in which the classes are taught;
(k) the students are customers of the Appellant's business;
(l) the Workers had no chance of profit nor did they have a risk of loss in performing the services;
(m) the services provided by the Workers were an integral part of the Appellant's business;
(n) in 1997, the Workers were employed by the Appellant in insurable employment under a contract of service; and
(o) the Appellant failed to deduct from the remuneration paid to the Workers any amounts with respect to premiums under the Act and also failed to remit to the Receiver General any amounts in respect of either the employee or the employer premiums, as required, and is liable for the unremitted amounts, together with penalty and interest thereon."
[23] The evidence of the witnesses did not establish significant variation with those facts assumed by the Minister, except for the assumption contained at subparagraph 5(n) where the Minister concluded the workers were employed by Gastown in insurable employment under a contract of service. They do not agree and maintain they were independent contractors. If that position is correct, as a matter of law, then it is reasonable to conclude that the result should apply to all of the named individuals in the assessment except for the concessions noted earlier.
[24] In Wiebe Door Services Ltd. v. M.N.R. [1986] 2 C.T.C. 200, 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
Control:
[25] Counsel for the Minister conceded the control over the workers was slight but attributed the lack of supervision to the nature of the industry. Certainly, the more benign and flexible the employer, the more difficult it is to utilize this indicia as a test especially when dealing with professionals who have a specialized area of expertise. The instructors had a high degree of freedom of choice in matters such as class size, scheduling, re-scheduling and composition of the subject matter and the method by which it was taught. In my view, the most significant aspect of the working relationship between the instructors and Gastown was that Gastown accepted the fact the teachers were all working actors who were willing and able to accept an acting role on a moment's notice and to leave behind their teaching obligation for an extended period of time, if necessary, to advance their career. In addition, Gastown was aware the teachers offered private instruction to various individuals including some who were students in their class or otherwise enrolled at Gastown. Prior to providing any teaching services to Gastown, it was clear the instructors were free to hire qualified substitutes, as required, and that they would be responsible for paying that person. Perhaps it was the personality of the instructors - in the context of the life of working actors - but it is highly unusual for an employer to be relegated to second place in the event a better "gig" presents itself on short notice. The arrangement between the instructors and Gastown was the result of a recognition - between equals - that this particular method of ensuring the classes would be taught - by someone - was satisfactory and in the best interest of all parties involved, even the students. The curriculum was established by Gastown but - again - there was a high degree of input by the instructors. On balance, this test favours a status of independent contractor.
Tools:
[26] While there was no requirement instructors provide props or equipment, the evidence is that some did so within the context of carrying out their duties as teachers and they were not reimbursed for these expenditures. The textbooks and other materials were provided by the instructors while the lighting and sound equipment and majority of props were owned by Gastown. Peter Hanlon loaned some of his personal equipment to Gastown and did not charge any fee for that service. The space within the studio and the furniture was the property of Gastown. One must be wary of putting too much weight on the provision of a physical plant in instances like this because an independent management consultant or computer expert will nearly always use the hard assets of a business or institution in order to perform services which - otherwise - would fall squarely within the context of a contract for services. The bulk of what was necessary for the job to be done properly was for the teacher to apply his or her talent to the task of instruction and to rely on the textbooks and materials appropriate to that end. With regard to this test, it is neutral and does not assist greatly in the determination of status.
Chance of Profit or Risk of Loss:
[27] The evidence established that Jessica Van Der Veen was able to make a profit when required to hire a substitute teacher because she billed Gastown at a higher hourly rate than charged by her replacement. Trish Allen paid her substitute exactly what she had received except she paid it before receiving payment from Gastown and she is currently owed a substantial sum of money. Bart Anderson has experienced a loss on occasion when hiring replacements but he has also earned a profit. The instructors who testified saw themselves as independent contractors within the framework of operating a business that involved acting, teaching, directing and/or coaching not only at a private level but also at Gastown while teaching the classes which formed the subject matter of their arrangement. They were not paid by Gastown for preparation time but were permitted to generate private revenue from teaching and, on occasion, to use Gastown premises - without payment - for that purpose. In return, they provided certain materials and props without seeking reimbursement from Gastown. The instructors who gave evidence before me indicated they included GST when billing Gastown for their services. There was also a small element of risk present in that an instructor had to weigh the probable revenue to be gained from an acting job against the cost of hiring a replacement. On the other hand, if an opportunity to act for a day or so in a TV or film production was declined, that might impact later on the individual's ability to generate income - both as an actor and a teacher - since Gastown paid an hourly rate for instruction based on a combination of factors including the extent of teaching and acting experience forming the overall qualifications of that person. While the chance of profit or risk of loss was relatively small, the evidence discloses that it did exist for Jessica Van Der Veen because she was paid a higher hourly rate than other instructors. For the other teachers the evidence did not disclose it would not produce - overall - a profit or a loss. The payment for teaching was at a negotiated hourly rate and if cancellation of a class reduced revenue it was no different than any hourly worker not being required to come to work for a particular period. On balance, although slight, this aspect of the test favours the status of employee.
Integration:
[28] This is probably the most difficult test to apply. Certainly, without teachers - as a group - Gastown cannot offer courses of instruction in accordance with the curriculum advertised to interested parties. From the standpoint of the individual workers, the method employed by Gastown to permit the instructors to locate and pay other qualified persons - without the knowledge or input of Gastown management - created a constant source of instruction which could be delivered to the students by means of the co-operative organism with its interchangeable components. While the instructors could carry out private instruction - often on Gastown premises - and be paid for their efforts, when they were teaching students enrolled in the actor's studio, it is difficult to see them as carrying on business on their own account when the establishment in which they worked was the creation of Gastown and functioned as a recognized post-secondary educational institution in accordance with provincial legislation. It was a school of instruction recognized by various levels of government and was permitted to issue a Certificate upon successful completion of a course of full-time study. The students were eligible to obtain student loans through the appropriate mechanism. Without Gastown and its premises, the instructors could have generated revenue from private teaching and coaching and from acting or in the course of providing other services to the film and television industry. The arrangement between Gastown and the instructors was mutually beneficial and Counsel for Gastown urged me to find that it was in the nature of a joint venture. However, Gastown had the administrative infrastructure, established the curriculum, owned the premises, and had carried out an advertising program which led to students being enrolled in their institution. All administrative aspects relating to setting of tuition, collection of fees and issuing appropriate refunds in accordance with government regulations were carried out by Gastown. Once the students had been assembled ready to study in a variety of different classes, the missing component of instructional capability was then provided by the group of instructors as it existed from time to time. In the case of Widdows, o/a Golden Ears Entertainment and M.N.R., unreported, - 98-486(UI) - I was dealing with an appeal involving a music school - combined with a retail store - and the appellant there had regarded his music teachers as independent contractors. At p. 8 - paragraph 14 - of the judgment I commented:
"In terms of integration, there is no doubt the business being carried on was the business of the appellant operating as a sole proprietor. When a student or a parent of a child wanted music lessons, all arrangements to that end were made with the appellant or his school administrator. The hostility surrounding the termination of the working relationship of the appellant and the worker which had endured for more than 7 years was due largely to the apprehension of the worker that the appellant was attempting to take with her certain students as though they were her students and not individuals who were bound by contract to his business operating as Golden Ears Music School. The teaching of lessons was carried out within the same premises as the retail store and the selling of instruments and music supplies constituted the overall business of the appellant and he integrated these revenue-producing components into the total structure. It would be completely illogical to regard the teaching of a student by the worker under the circumstances revealed by the evidence as the furtherance of Ferrari's own business in a school bearing the name of the appellant's sole proprietorship in premises leased by him in a commercial centre when all financial aspects of the teacher-student relationship were conducted directly with the appellant. There was a lot more to the music instruction business than what transpired in a studio during a half-hour session although it is clear the instruction was an integral part of the revenue-producing component of the business which relied on charging fees to students. The school administrator was not engaged to merely co-ordinate activities of a dozen independent contractors who were retained to provide music lessons each within the context of a separately owned business. Again, one must look at the overall nature of the business organization operated by the appellant and the interplay between that operation and the services provided by the worker."
[29] In the case of Puri and Hesketh v. M.N.R., unreported, - 96-2519(UI) and 96-2520(UI) - I considered the status of two figure skating coaches who were providing services to the Campbell River Skating Club. I held there was a substantial degree of control exercised by the Club and that the tools were mainly provided by the coaches. In addition, I found there to be no real opportunity for profit or risk of loss except as it arose from cancellation of a class that could not be re-scheduled. Dealing with the matter of integration, at p. 7 - paragraph 13 - I noted:
"In terms of integration, it is clear the Club - a non-profit Society - was incorporated for purposes in connection with the sport of skating. The programs taught by the appellants were the product of organization by the Club and, as canvassed earlier in these Reasons within the context of the indicia of control, could be held only because the Club had booked the necessary ice-time and had organized the various programs and administered them in a manner so as to obtain sufficient participants in a particular program. Only then was it feasible for each appellant to be assigned coaching duties in accordance with the details set out in Schedule "A" - Exhibit A-2. Both appellants stated it was vital to their success as a skating coach to have access to students through the Club. Due to the CFSA stricture against advertising or solicitation, participation as a coach within the context of programs sponsored by the Club was, almost, the only way they could develop a client base. The teaching of students privately, without any connection to the Club, occurred only after the requirements pursuant to the contract with the Club had been fulfilled. While each appellant was in the business of providing private lessons or coaching advice to assist skaters entering a competition or participating in an ice carnival or other special event, the organization and administration of the group skating programs in the arena was totally within the purview of the Club."
[30] At page 206 of his judgment in Wiebe, supra, MacGuigan, J.A. stated:
"Of course, the organization test of Lord Denning and others produces entirely acceptable results when properly applied, that is, when the question of organization or integration is approached from the persona of the "employee" and not from that of the "employer," because it is always too easy from the superior perspective of the larger enterprise to assume that every contributing cause is so arranged purely for the convenience of the larger entity. We must keep in mind that it was with respect to the business of the employee that Lord Wright addressed the question "Whose business is it?"
Perhaps the best synthesis found in the authorities is that of Cooke, J. in Market Investigations, Ltd. v. Minister of Social Security, [1968] 3 All. E.R. 732 at 738-39:
The observations of Lord Wright, of Denning L.J., and of the judges of the Supreme Court in the U.S.A. suggest that the fundamental test to be applied is this: "Is the person who has engaged himself to perform these services performing them as a person in business on his own account?" If the answer to that question is "yes", then the contract is a contract for services. If the answer is "no" then the contract is a contract of service. No exhaustive list has been compiled and perhaps no exhaustive list can be compiled of considerations which are relevant in determining that question, nor can strict rules be laid down as to the relative weight which the various considerations should carry in particular cases. The most that can be said is that control will no doubt always have to be considered, although it can no longer be regarded as the sole determining factor; and that factors, which may be of importance, are such matters as whether the man performing the services provides his own equipment, whether he hires his own helpers, what degree of financial risk be taken, what degree of responsibility for investment and management he has, and whether and how far he has an opportunity of profiting from sound management in the performance of his task. The application of the general test may be easier in a case where the person who engages himself to perform the services does so in the course of an already established business of his own; but this factor is not decisive, and a person who engages himself to perform services for another may well be an independent contractor even though he has not entered into the contract in the course of an existing business carried on by him.
There is no escape for the trial judge, when confronted with such a problem, from carefully weighing all of the relevant factors, as outlined by Cooke, J."
[31] In the case of Big Pond Publishing and Production Ltd. v. M.N.R., unreported, - 96-1865(UI) - Porter, D.J.T.C.C. held that musicians working as part of the band for well-known Canadian entertainer Rita MacNeil were independent contractors. He found that from the standpoint of an individual musician they were not integrated into the business of MacNeil because they had opportunities to avail themselves of other sources of income. Further, Judge Porter found the contracts between the payor and the musicians to have been retainers - or stand-by fees - which served to keep them available when needed and away from potential competition. In addition, the musicians provided their own tools in the form of musical instruments and amplifiers. Judge Porter found there was little chance of profit or risk of loss and while there was some control over what music they played - and when - they were at liberty to perform in accordance with their own professional standards and to work for other entities and to earn revenue from writing or performing.
[32] Gastown and the instructors had been dealing with each other - some for a considerable period of time - on the basis the instructors were independent contractors. I draw the inference that the instructors who testified before me were filing their income tax returns on the basis of being self-employed individuals. Certainly, the Minister had regarded them as carrying on a business when accepting a registration for GST under the Excise Tax Act and the necessary returns made in compliance with this legislation. The Minister is not bound in any way by those events but it indicates the workers were providing services - from their standpoint - as part of their overall business, albeit one substantially different in form than the usual enterprises making up the mosaic of the modern workplace. It does not make it any easier when people earn revenue through a mixture of income-producing activities. A person may have several part-time jobs and be an employee in all of them. On the other hand, an individual may have one full-time job, one part-time job and also carry on a sideline business on his or her own account. While on an acting job, an instructor would be paid in accordance with a fee schedule established by the actor's guild. Later that week, the instructor might earn revenue by tutoring a student privately, offering techniques to be used during an audition to improve the chances of obtaining a role. Woven into that fabric of creative activity would be some teaching at Gastown - on one or more days - in accordance with the contract entered into with the management of Gastown. Although not signed by any of the individual appellants, the contract - Exhibit R-3 - merely confirmed that an instructor was accepting a teaching period for a specified period - or block - and recognized that the job "in no way constitutes a permanent full-time position with the Gastown Actors' Studio Ltd.". Apparently, the instructors in the full-time program had signed this document while the others had provided services pursuant to a verbal contract based on the same general understanding.
[33] 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 p. 239 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."
[34] It is regrettable that people cannot determine their own status under circumstances where there has been no duress or improper conduct and the parties have conducted themselves in a straightforward manner in the course of an efficient and satisfying working relationship over a considerable period of time. However, as a matter of public policy there is no provision for people to exempt themselves from the application of the Employment Insurance Act or the Canada Pension Plan, even though the legislation is better suited to meet the needs of a post-war traditional workplace that has almost totally disappeared - except in the public sector - rather than the rapidly emerging modern hummingbird economy in which workers undertake a variety of revenue-producing activities often with very short life spans, producing sporadic, limited sources of revenue. The instructors and Gastown had an excellent working relationship and they do not regard the intervention by the Minister as an ameliorating factor.
[35] In Wiebe, supra, at p. 205 of his judgment, MacGuigan J.A. stated:
"I interpret Lord Wright's test not as the fourfold one it has often been described but rather as a four-in-one test, with emphasis always retained on what Lord Wright, supra, calls "the combined force of the whole scheme of operations", even while the usefulness of the four subordinate criteria is acknowledged."
[36] Having regard to the evidence I conclude that the instructors were employed under a contract of service and, as a result, were engaged in insurable and pensionable employment during the relevant period covered by the assessment. However, the assessments issued pursuant to the Employment Insurance Act and the Canada Pension Plan require variation to exclude Jaap Teer. The evidence demonstrated - and Counsel for the respondent conceded - that Jaap Teer was an independent contractor providing piano lessons - mainly to his own students - and that he merely rented some space from Gastown which he paid for by teaching two students from the school, pursuant to an exchange arrangement.
[37] The appeal of the corporate appellant, Gastown, is allowed and the assessment is referred back to the Minister for reconsideration and reassessment on the basis that Jaap Teer was not employed in insurable employment with Gastown during the relevant period. Otherwise, the assessment will remain, as issued.
[38] The appeals of the individual appellants pursuant to the Employment Insurance Act and/or the Canada Pension Plan are hereby dismissed.
Signed at Sidney, British Columbia, this 10th day of March 2000.
"D.W. Rowe"
D.J.T.C.C.
COURT FILE NO.: 1999-147(EI)
STYLE OF CAUSE: Gastown Actors' Studio Ltd. and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
Counsel for the Appellant: Dave Graham
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name: Dave Graham
Firm: Koffman Birnie & Kalef
Vancouver, British Columbia
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-149(CPP)
STYLE OF CAUSE: Gastown Actors' Studio Ltd. and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
Counsel for the Appellant: Dave Graham
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name: Dave Graham
Firm: Koffman Birnie & Kalef
Vancouver, British Columbia
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-3301(EI)
STYLE OF CAUSE: Trish Allen and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-274(EI)
STYLE OF CAUSE: Peter Hanlon and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-275(CPP)
STYLE OF CAUSE: Peter Hanlon and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-362(EI)
STYLE OF CAUSE: Susan Astley and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-363(CPP)
STYLE OF CAUSE: Susan Astley and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 1999-3300(EI)
STYLE OF CAUSE: Bart Anderson and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: January 13, 2000
REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe
DATE OF JUDGMENT: March 10, 2000
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-147(EI)
BETWEEN:
GASTOWN ACTORS' STUDIO LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)), Susan Astley (1999-362(EI) and 1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
Counsel for the Appellant: Dave Graham
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-149(CPP)
BETWEEN:
GASTOWN ACTORS' STUDIO LTD.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)), Susan Astley (1999-362(EI) and 1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
Counsel for the Appellant: Dave Graham
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is allowed and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-3301(EI)
BETWEEN:
TRISH ALLEN,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)), Susan Astley (1999-362(EI) and 1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-274(EI)
BETWEEN:
PETER HANLON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-275(CPP)), Susan Astley (1999-362(EI) and 1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-275(CPP)
BETWEEN:
PETER HANLON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI)), Susan Astley (1999-362(EI) and 1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-362(EI)
BETWEEN:
SUSAN ASTLEY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)), Susan Astley (1999-363(CPP)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-363(CPP)
BETWEEN:
SUSAN ASTLEY,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)), Susan Astley (1999-362(EI)) and Bart Anderson (1999-3300(EI)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.
1999-3300(EI)
BETWEEN:
BART ANDERSON,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard with the appeals of Gastown Actors' Studio Ltd. (1999-147(EI) and 1999-149(CPP)), Trish Allen (1999-3301(EI)), Peter Hanlon (1999-274(EI) and 1999-275(CPP)) and Susan Astley (1999-362(EI) and 1999-363(CPP)) on January 13, 2000, at Vancouver, British Columbia, by
the Honourable Deputy Judge D.W. Rowe
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Eric Douglas
JUDGMENT
The appeal is dismissed and the assessment is confirmed in accordance with the attached Reasons for Judgment.
Signed at Sidney, British Columbia, this 10th day of March 2000.
|
"D.W. Rowe" |
D.J.T.C.C.