Scott v. M.N.R

Scott v. M.N.R Court (s) Database Tax Court of Canada Judgments Date 2003-03-21 Neutral citation 2003 TCC 120 File numbers 2002-2354(EI) Judges and Taxing Officers Dwayne W. Rowe Subjects Employment Insurance Act Decision Content Docket: 2002-2354(EI) BETWEEN: GORDON LAWRENCE SCOTT, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. ____________________________________________________________________ Appeal heard on common evidence with the appeal of Gordon Lawrence Scott (2002-2356(CPP)) on February 6 and 7, 2003 at Victoria, British Columbia Before: The Honourable Judge D.W. Rowe Appearances: For the Appellant: The Appellant himself Counsel for the Respondent: Victor Caux ____________________________________________________________________ JUDGMENT The appeal is dismissed and the assessments of the Minister are confirmed in accordance with the attached Reasons for Judgment. Signed at Sidney, British Columbia, this 21st day of March 2003. "D.W. Rowe" D.J.T.C.C. Citation: 2003TCC120 Date: 20030321 Docket: 2002-2354(EI) BETWEEN: GORDON LAWRENCE SCOTT, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. REASONS FOR JUDGMENT Rowe, D.J.T.C.C. [1] The appellant appeals from two separate decisions - both dated March 28, 2002 - wherein the Minister of National Revenue (the "Minister") confirmed earlier assessments dated October 3, 2001 issued in respect of Canada Pension Plan (CPP) contributions and Employment Insurance (EI) premiums relating to certain named workers - listed in appendix "A" to said decisions - on the basis those workers had been employed by Gordon Lawrence Scott under a contract of service pursuant to the relevant provisions of the Employment Insurance Act (the "Act") and the Canada Pension Plan (the "Plan"), respectively. The appellant filed a separate appeal - 2002-2356(CPP) - from the decision issued pursuant to the Plan. The appellant - appearing on his own behalf - and counsel for the respondent agreed the two appeals could be heard together. [2] Gordon Lawrence Scott (Scott) testified he resides in Victoria, British Columbia, and is sole proprietor of a business which he operates on Vancouver Island and the Lower Mainland. He has been in business for 30 years and during that time has sold a variety of products using different trade names. During the relevant period, he hired people to sell products such as cellular telephones and accessories and home security alarms. In 1998 and 1999, Scott had a contract with Rogers AT & T (Rogers) and with Price Alarms Ltd. (Price) to sell their products. Scott stated his business operated in different ways; one method was to have several workers travelling door-to-door attempting to sell a product while other sales strategies involved using a kiosk inside a mall or staffing a booth at a trade show or other public event. The concept of the mall kiosk was successful and Scott expanded his operations in mall locations by leasing enclosed retail space in order to establish a store in which cellular phones and accessories and home security packages could be sold. Depending on the location of the retail outlet, different names were used for the business operation but all of them were owned and operated by the appellant in his capacity as a sole proprietor. As a result of the methods by which he had chosen to operate over the course of 30 years, Scott stated it had never been necessary to fire anyone because workers soon discovered either they were not suited to a sales occupation or were dissatisfied with the amount earned from straight commission. Throughout that period, he had always utilized kiosks at home shows in conjunction with a program of outside sales in order to expose various products to the public. No workers had ever been entitled to any benefits usually associated with employment nor were they guaranteed any minimum pay. Scott stated that no worker had ever complained about the status of independent contractor and was surprised to receive - on March 28, 2002 - confirmation of assessments issued by the Minister - on October 3, 2001 - because he had earlier received a letter - Exhibit A-1 - dated September 28, 2001 - issued to "Gordon Lawrence Scott, Operating West Shore Cellular" wherein the Minister cancelled previous assessments raised in that name. Scott stated he had operated one sales location under that name. In terms of day-to-day operations, Scott stated he did not exercise control or supervision over his workers. The mall locations were staffed with two full-time workers and one part-time worker and they managed their own schedules. In the store space in the mall, Rogers' products were displayed and interested persons could also purchase a home security program offered by Price. The cellular telephones (cell phones) were either handed out - free - as part of the overall service contract or were sold for a token amount, depending on the type of phone selected and the nature of the cell phone service being provided over a particular period, whether one, two or three years. The stores inside the malls also sold headsets, car jacks, phone carrying cases and related accessories which Scott obtained from various suppliers on a consignment basis. The commission paid by Rogers and/or Price to the appellant was based on the value of the contract entered into by the customer but Scott retained all proceeds from sales of phone accessories. With respect to Price, the appellant merely sold a contract for an alarm service and all other interaction with the customer - such as installation and subsequent billing - was handled by Price. Scott described his participation in the transactions involving Rogers and Price as merely "pushing paper" in order to facilitate the contract between those firms and the customer. During the relevant period, Scott operated 5 stores and - at each location - three or four workers provided their services. He contacted workers by telephone and did not operate his business by using any conventional organizational structure or hierarchy. Scott stated he entered into arrangements with mall managers to obtain retail space in which to sell contracts for alarm and/or cell phone service and phone accessories. Initially, he was able to rent on a month-to-month basis. The retail space was equipped with a desk, related furniture and leased telephones connected to a line which also served a direct payment apparatus (Interac) supplied by the bank. On other occasions, Scott obtained space from trade show or exhibition managers in order to demonstrate the products being offered for sale. Scott stated the workers purchased their own cell phones so they could demonstrate the product and also communicate with fellow workers. They used their own vehicles for door-to-door sales and for marketing in other locations or for travelling to meetings and events where potential cell phone customers were likely to attend. Scott and Rogers split - 50-50 - the costs associated with participating in home shows. With regard to the manner by which revenue was generated, Scott stated he received a commission from Rogers and/or Price in respect of sales concluded during a particular period. Scott then paid a 50% share of that overall sum to workers who had sold specific items and cell service contracts. The workers were paid - by cheque - issued monthly on the third week of the following month in order to allow for cancellations and chargebacks. Scott stated that workers had some leeway in setting prices for cell phones in the sense they could reduce the initial cost or include some accessories in order to make the deal more attractive to the potential buyer. Any merchandise used in that promotional sense was paid for - at cost - by the salesperson. The commission structure applicable to Scott and his workers required a customer - pursuant to the contract for provision of cell phone service - to pay the monthly service fee for a minimum of 6 months. Any defaults occurring within that time frame were charged back to Scott and - through him - to the salesperson who had sold that particular contract. Scott stated he attempted to obtain at least $50 for each cell phone and service contract and split - 50-50 - any commission with the salesperson, the amount of which would be increased if a service contract had been sold for a longer period. During the relevant period, some phones were provided to customers - without charge - if a service contract was signed for one or two years. Later, it was usual for customers to pay for their phones because the product had become technologically advanced and more expensive. Scott stated Rogers undertook the necessary credit checks with respect to potential customers but some workers still lost money because of a later default by the user within a 6-month period. Approximately 12% of all sales were subject to cancellation, default or revisions to commission payable; these variations were calculated by Rogers and, in accordance therewith, the appropriate sum was deducted from the amount owing to Scott who - in turn - provided detailed accounting information - received from Rogers - to salespersons affected thereby and made the appropriate deduction from the relevant commission cheques. Scott stated his business did not depend on any worker nor was his enterprise the sole source of income for many salespersons. Rogers provided the necessary training to workers and paid all related costs. Other training was provided by representatives of various cell phone manufacturers and any expense was borne by those entities. The training involved only a few hours and was mainly devoted to learning methods of explaining usage of new phones to a potential customer who was confronted with the fact his or her relatively new phone was now old and obsolete. In Scott's view, the workers wanted to own new cell phones in order to remain current with leading-edge technology and to use them for purposes of demonstration and instruction in the course of attempting to make a sale. The cost of an advertising program was shared equally between Rogers and Scott and Rogers and/or Price provided promotional and advertising material to workers at no cost. During 1998 and 1999, the major part of Scott's revenue was derived from the sale of cell phones and Rogers' service contracts but - earlier - the sale of Price alarms for homes and small businesses had been a significant part of his business. [3] In cross-examination by counsel for the respondent, Scott was referred to a decision letter - Exhibit R-1 - dated March 28, 2002 - to which a sheet was attached listing names of workers during the relevant period. Scott stated he had operated his business from 5 locations in Victoria, Duncan and Nanaimo; some were located in malls and others were in storefront premises. Scott stated the workers staffed various locations particularly if another worker was ill or otherwise unable to attend. In addition, they organized their own work schedules and posted them in the workplace. None of the workers had any contract with Rogers and any bonuses for achieving a certain volume of sales were paid - by Rogers - to Scott. Depending on the nature of the payment from Rogers, the amount was either split 50-50 with the salesperson or - on occasion - Scott paid the entire sum to the worker. A term of any lease for space in a mall required the store to be staffed according to a particular schedule. In 2001, workers in a Nanaimo mall walked out and Scott replaced them the following day in order to keep the retail space open for business. He used advertisements in newspapers to solicit interest in his business operation and preferred to enter into a working relationship with persons who had previous sales experience even though - in his view - one did not need "a lot of skill to stand in a mall and give away a free phone". He agreed some product knowledge was required and a worker had to possess the skills required to complete the sale contract and any related documentation. Workers had the right to sell used phones - owned by them - without sharing any profit with Scott even though the transaction occurred within space leased by him. Rogers provided each salesperson with 700 minutes of free air time per month but - first - the worker had to purchase a cell phone - at cost - and pay the licensing fee, Goods and Services Tax (GST) and had to accept responsibility for any subsequent long distance charges billed to that account. In the event a customer defaulted on a service contract within the 6-month minimum period, a worker's commission could be reduced to zero. All workers received the same commission - approximately $75 - for each phone and contract sold. Scott stated that no worker had ever requested a greater share of the commission flowing from Rogers nor had anyone questioned the pay period, method of payment or the chargebacks - sometimes referred to as clawbacks - made in accordance with the reconciliation statement - provided by Rogers - which identified specific customers by stating the assigned telephone number. Within 5 days of receiving a commission cheque from Rogers, Scott paid each worker his or her 50% share of specific service contracts and/or additional product sold. No worker ever charged Scott any GST in connection with provision of services since none earned in excess of $30,000 per year and was not required to register as a supplier. Scott did not issue any T4A slips to workers but maintained a record of payments by retaining cancelled cheques which he provided to Canada Customs and Revenue Agency (CCRA) together with a list of all workers during the relevant period. Payment to workers was based on monthly invoices issued to him in which each salesperson had set forth details of sales activity during the month including any goods provided without charge to a customer. Approximately 90% of all sales were transacted through the Interac system. Scott stated that none of the sales locations had any designated manager and a worker in charge of preparing a work schedule could not insist that someone adhere to it. The workers in the Nanaimo stores handled banking requirements and Satnam Dhillon operated the store in Duncan. Scott identified a letter - Exhibit R-2 - directed to Glen Foster, a GST auditor at Revenue Canada - in which he identified certain individuals as having been his ex-partners at some point in 1999. Named in the letter were Matt Powell and Derek Langdon as ex-partners in various business locations known as West Shore Cellular, Lance Bedard at Duncan Cellular, Mark Coté at Nanaimo Cellular and Mike Fabbro at Nanaimo Cellular South. Those named individuals had been partners of Scott on the basis each would split - 50-50 - any funds remaining after deducting expenses associated with the operation of the particular retail space and the amount of commissions paid to workers. Scott was referred to a business card - Exhibit R-3 - which he described as typical of the sort of Point of Sale material provided to workers by a cell service provider. Scott was shown another business card - Exhibit R-4 - whereon Derek Langdon was described as Manager of West Shore Cellular. Scott explained that Langdon had been a part owner of that operation towards the end of 1999 but had been an ordinary salesperson prior to that. Scott stated he had no objection to any worker using a title or description of the service being provided because he had always considered these persons to be operating their own business. A sheet entitled Independent Sales Contract Agreement - Exhibit R-5 - had been developed by Scott - in 2000 - in contemplation of transferring his business to a corporation but that document had never been used in 1998 or 1999 since the majority of workers provided services pursuant to an oral agreement throughout the relevant period. Although Scott had once entered into an agreement with a worker wherein he agreed to pay $1,500 per month as a minimum remuneration, that had occurred subsequent to 1999 and - in the years at issue in the within appeals - no worker had ever been guaranteed any amount of remuneration in return for providing services. [4] Evan Ross testified he is a manager of a Rogers retail store in Victoria. In June, 1999, he entered into a working relationship with Scott and began organizing his own sales - activities including door-to-door selling - and participating in home shows and trade events. He also worked in the space - leased by Scott - at the mall and he and other workers adhered to a schedule in order to conform with requirements established by mall management. While carrying on his sales activity, Ross stated he was not supervised and could take breaks whenever he chose. He stated he accepted that he was required to pay his own expenses and had to sell product in order to earn revenue. He worked out of the West Shore Cellular retail space located within the Canwest Mall at Langdon, a municipality within the Greater Victoria area. At the mall, workers arranged their own schedules and Ross stated he was free to make sales at any location. Rogers supplied pamphlets but Ross purchased supplies such as pens, a cell phone, and paid for the licensing fee, GST and any subsequent long distance calls. On occasion - following his own instincts - he would merely give a cell phone to a customer with the expectation that this person would refer others to him, affording an opportunity to sell several phones together with service contracts. Ross stated he preferred to deal directly with his own customers in relation to any matters arising from a sale but was always willing to assist other customers in the course of their inquiries. [5] In cross-examination, Ross stated he worked with Scott from June, 1999 to August, 2001. Currently, he works at a corporate Rogers store which is staffed by employees of Radio Shack. He had known Scott for several years and was aware - at the time of hiring - that he would be working as an independent contractor on commission without any guaranteed remuneration and would not have any source deductions taken from his cheques. He did not register for GST since his annual earnings were less than $30,000 and did not take out any business licence for selling phones and accessories. Earlier, he had worked - in a managerial capacity - in the food industry. Each month, he completed a list of sales including details pertaining to activation dates, price plans, the number of the cellular phone as well as descriptions of any accessories provided free of charge to a customer in order to close a sale. Ross received 50% of any commission paid to Scott - by Rogers - arising from one of his sales. He had never requested an increase in commission structure and had suffered the effect of clawbacks from time to time as a result of default by a customer but that amount had never been greater than the initial commission earned on the sale. The computer in the mall retail space generated an invoice which could be used to bill the appellant for a worker's 50% share of commissions due. Rogers provided training and instruction relating to technical information, sales techniques and the method of explaining prices of various service plans available to a buyer. Phone accessories were on consignment and Ross did not pay Scott for any rent or other overhead expenses. He stated that any structured schedule of working hours at the mall store arose out of the agreement between Scott and mall management whereby certain opening and closing times had to be observed. In terms of his overall sales, Ross estimated that 60% were made inside the mall store with the balance occurring elsewhere, including trade shows. He was provided with business cards and received 700 minutes free air time per month from Rogers and purchased - at cost - one cell phone per year. Throughout his working relationship, he did not report to Scott but two individuals - Matt Powell and Derek Langdon - had also worked at the West Shore Cellular location and he understood Langdon had been Scott's business partner. Now and then - as a common courtesy - Ross stated he had needed to find someone to cover his scheduled shift. There were only 3 or 4 workers and the store was open until 9:00 p.m. for only two days per week but was also open on Sunday. Ross stated that if one of his customers attended at the store in order to talk to him and he was not there, another worker would provide his cell phone number so contact could be made. Ross paid for his Chamber of Commerce (Chamber) membership and in order to participate at home shows or other similar events would pay rent of $25 or $50 and obtain space for a table on which he could offer his product for sale. A gathering of business people - trade mixers - was organized by the Chamber and Ross paid any related fee. On occasion, Ross worked in a Rogers booth at a show or exhibition and paid all expenses but - usually - attempted to find another phone salesperson to join in the venture and share the cost. Sometimes, commissions from sales were not sufficient to cover the expenses but it was still an efficient method by which to promote the product and to sell accessories which were also on display. Revenue from sales of phone accessories was divided equally with Scott but Ross was wholly responsible for any loss of product due to theft or damage. [6] Christopher Balanko testified he is a sales associate and had been an employee of Radio Shack at various times over a period of 3 or 4 years. At Radio Shack, he had reported to supervisors and worked in accordance with a structure. Balanko stated he heard about Scott's business, contacted him, and entered into an arrangement to sell phones and accessories on the basis of straight commission. At Radio Shack, the price of each product had been fixed and entered into the computer. Because he was familiar with the cell phone business, Balanko stated he began selling the product and purchased his own cell phone and leased a car. On occasion, he sold a phone at a loss in order to obtain other leads even though it sometimes took up to one year for this tactic to bear fruit. During the relevant period, if a customer signed a service contract for one year, a phone was either provided free or at a maximum cost of $50. However, if the customer defaulted on the contract and did not return the phone, there was a chargeback against other earned commissions. Balanko worked at a Douglas Street storefront outlet in Victoria and also at the outlets inside Canwest and Tillicum malls. At the same time, Balanko had a business - Chris Computer Sales & Service - which he considered to be comprised of a computer component which he operated together with his own cell phone sales business as a sole proprietorship. [7] In cross-examination, Balanko stated he had operated a sideline computer business while working as an employee at Radio Shack. He estimated that his sales in retail outlets - during the relevant period - amounted to between 50% and 60% of his total sales whereas at an earlier point in his selling career approximately 90% of all sales were made without reference to an established retail space. At one point, he requested a commission split greater than 50% but Scott refused. Balanko maintained his own records of sales - as did Scott - and, if a disagreement arose, they could refer to their own documents in order to resolve the matter. Rogers conducted seminars and supplied all necessary paperwork but Balanko paid for his own office supplies and a cell phone for which he paid the sum of $250. While working with Matt Powell and/or Derek Langdon, Balanko stated he did not regard either of them as managers and when working alone at the Douglas Street store would sometimes decide to close the store early. This option was not available to workers in the mall stores since mall management had to be satisfied the store was open in accordance with lease requirements. Any customer warranty was provided by the manufacturer of the cell phone but Balanko stated he considered customers who dealt with him to be his own clients. He had purchased some special phone cases which he sold to his customers and then retained the entire proceeds. [8] In re-examination by Scott, Balanko agreed he had been provided with details of any chargebacks due to customer default - including telephone numbers of former customers - and would contact people in an attempt to persuade them to continue with the service and avoid suffering consequences of a specific chargeback against future commission income. [9] Jason Little testified he is a sales associate and when he entered into a working relationship with Scott was aware there were no sales territories or fixed hours of work. He worked at the Douglas Street Store and at West Shore Cellular, Tillicum and at a small space inside a Costco outlet. He also travelled to Washington state on a selling trip and paid his own expenses. He stated he had not been supervised by Scott and made his own decision to sell phones at the Luxton Rodeo. On occasion, he sold a phone at a loss and had suffered clawbacks to commissions. He worked with Scott between January 26, 1997 and December, 1998 and again beginning January, 2000. [10] In cross-examination, Little stated he heard about Scott's business operation and it had attracted his interest because he had recently completed a retail sales course offered by the provincial government. Throughout, he was satisfied with the 50-50 commission split and was provided with details of commission clawback provided by Rogers to Scott. He was aware of the cost of a particular phone and would sometimes reduce the price by $20 in order to finalize a sale. He reported income - on his tax returns - as a self-employed individual. In his experience, approximately 35%-40% of his sales took place outside the retail outlets and he paid for his own business forms, pens, pencils and vehicle costs. He purchased a Nokia phone - at a cost of $299 - and bought a new one every 6 months in order to be familiar with the latest technology. Even though he regarded customers as his own, while working in any of the stores he was willing to assist - without remuneration - anyone who requested assistance. [11] Satnam Dhillon testified he began working for the appellant - in 1998 - at a retail store in Duncan, B.C. and was aware he would be self-employed while selling cell phones in that location or elsewhere including within the Indo-Canadian community in Greater Vancouver. At the Duncan store, Dhillon stated he took breaks when he chose and travelled to Vancouver in order to deliver phones he had sold to customers residing in that area. He had provided phones to people free of charge in an effort to obtain valuable leads and paid for his own cell phones. He considered that he was free to generate other income and, with only two people working in the small Duncan store, found the hours were somewhat flexible because it was not located in a mall. [12] In cross-examination, Dhillon stated he had known Scott since 1996. Earlier, Dhillon had worked part time in a retail clothing store but had not registered any business name while selling cell phones under his arrangement with Scott. He had not required prior approval from Scott to reduce the price of a phone and, if it was sold at a loss of $30, that deficit was shared equally by Scott. Dhillon stated he regarded the Duncan store as his own office even though he had no investment in that physical establishment. However, he purchased his own supplies and the most expensive - $600 to $800 - cell phones in order to have the latest product. Training was provided - by Rogers - at no cost and manufacturers would also hold seminars to showcase a new product. Dhillon stated he had no recollection of having told a CCRA interviewer that he had been Manager of the Duncan outlet. He agreed he had not sold cell phone service offered by any competitor of Rogers. He estimated that 70% of sales took place inside the store but other sales were made by faxing promotional material to potential buyers within the Indo-Canadian community. He was able to earn approximately $50 per contract and, if he had to travel to Vancouver to deliver phones, would stay with relatives in order to reduce the cost of the trip. Since ongoing revenue from a specific cell service contract could range upwards of $200 per month, it was sometimes a good sales strategy to reduce the initial price on the phone. If a customer was satisfied with a cheaper phone and was willing to sign a two-year contract, the equipment could be provided free. Dhillon stated he offered to beat the price offered by any cell phone competitor and had sold a cell phone to a taxi driver - at a reduced cost - with the expectation that other drivers would be interested in acquiring a similar product. [13] Aimee Quaife was called to the stand by counsel for the respondent. She is a student at Camosun College and - in June, 1998 - started work at Nanaimo Cellular and Alarms (Nanaimo Cellular) located in the Woodgrove Centre mall. Initially, her job description was Sales Associate but - later - was designated as Supervisor and then Assistant Manager. The store managers were - initially - Mark Coté (Coté) and Gilbert Weekes. The work schedule was prepared by the managers or - later - by Quaife and/or Kathy Peters and was posted in the back of the store. Workers were expected to attend at work in accordance with the schedule. Quaife was referred to Appendix A - attached to the letter - Exhibit R-1 - and identified several persons listed thereon as her co-workers during the relevant period. Quaife stated Monica Armour had arrived at the store during the 1998 Christmas season and worked at a table set up at the other side of the mall in an effort to generate additional business. Mary Coté - wife of Mark Coté - worked at handling paperwork. Kevin Hesketh worked inside the store and also at the table location. Kathryn Kashmere worked in the store and was also a Supervisor. David Krypak worked for a short time in the Nanaimo store but was fired by Coté because of his habit of sleeping in and not showing up for work as scheduled. Lawrence Lavalle worked inside the store but the working relationship was terminated by Coté because Lavalle was promoting Amway products to customers while also attempting to sell them cell phones and related products. Quaife stated Niki MacGregor, Terri McNaughton, Colleen Minifie, Rebekah Norton, Gilbert Weekes, Darcie Yarrow and Jill Walsh worked inside the Nanaimo store. In 1999, others worked inside the store who had not been there during 1998, including Christi-Lee Chemko, Lindsey Doolittle, Nicholas Karpinksy, Guy Landry, Branden Shortt, Dean Simpson and Lucinda Thomson. During 1999, Quaife stated she was responsible for scheduling the workers and sales were recorded on a calendar on a wall at the rear of the premises. Scott would call the store - on a daily basis - to inquire about sales. A dress code was in place requiring workers to wear appropriate clothing which was defined as not including jeans. Quaife was also responsible for customer service and wrote up service reports in respect of problem phones and shipped them to Victoria for examination and repair. Towards the end of her working relationship with Scott, she handled payroll, merchandising, pricing, cleaning and anything else required to maintain a smooth business operation. At the end of the day, cash and/or cheques were placed in an envelope and handed to Coté who would - presumably - make the appropriate deposit. Once or twice, Quaife made the deposit at the bank and the debit machine was closed off each night. Business cards were provided to her together with all supplies required to function within the store. While working at the store, she received - without charge - a total of 4 or 5 cell phones from Coté. Since remuneration was based on commission, she spoke to Coté about participating in a trade show in Nanaimo in order to generate more sales. He agreed to this proposal and all related costs were paid for by Nanaimo Cellular. Coté also paid membership dues for Quaife and Kashmere to join a Nanaimo business organization for women. Quaife stated she and Kathryn Kashmere decided to attempt to sell phones in the Port Hardy area - at the northern tip of Vancouver Island - and Coté obtained a 4-day business licence for them and also paid for hotel costs, gas and food. Quaife stated she had never considered that she was in business for herself and was under the impression she could not work for other employers while at Nanaimo Cellular. When she was hired - following an interview by Coté and Scott - the term "independent contractor" was not used even though she knew payment for her services would be based strictly from commission on sales. In the beginning, she received her pay cheque - signed by Coté - from Nanaimo Cellular but - later - Scott issued pay cheques to the workers. Sheets were provided in order to record sales and she considered this procedure to be typical within the cell phone industry because there many details must be recorded when selling a cell phone and service contract. After becoming Assistant Manager, she was paid the sum of $500 per month in addition to whatever amount resulted from her 50% commission derived from sales. Earlier, a worker could obtain an advance in pay - under $500 - on the 5th of each month and would receive a pay cheque on the 20th but the advances were cancelled by Scott. The training received at the Coast Bastion Hotel - in Victoria - was provided without charge by Rogers. Scott and/or Coté paid for the cost of hotel rooms and meals for Quaife and a co-worker. While working in the store, Quaife stated she could not have hired someone else to perform her job and was not free to take a break unless someone was able to take charge. Details of clawbacks from commissions were contained in sheets faxed by Scott. On occasion, she understood it was possible to suffer a loss from such a clawback because it was based on the whole amount of the contract whereas the commission was based on a 50-50 split. The price of phones depended on the type of service contract chosen by a customer. If the contract would generate a minimum of $50 per month over the life of the contract, then the phone could be provided without charge. However, if the service produced only $20 per month, then the cost of the phone - to the customer - would be $100. After becoming Assistant Manager, Quaife stated she had learned enough about the business to reduce the price - on occasion - and still make a profit. Any salesperson could exercise his/her own discretion to reduce the cost of a phone in order to close a sale provided there was still a profit being made overall. Quaife stated she was informed that the store was never to be left unattended as that omission could expose Scott to a fine - up to a maximum of $5,000 - that could be levied by mall management. Once, Niki MacGregor, although not scheduled for work that day, had to hurry to open the store because the designated employee was ill. Quaife stated the workers were well aware that if the store was not open for business, someone would lose his or her job. [14] In cross-examination by Scott, Aimee Quaife stated she understood - at the beginning - that Coté was a part owner of the store but she had also considered him to be Manager of Nanaimo Cellular. In 1999, she accepted the position of Assistant Manager and was paid $500 per month. She had not been required to pay for any personal cell phones, licensing fees, taxes, or any accompanying service contract because 750 free minutes were initially provided by Rogers, later increased to 1,500 minutes. Any product given away to customers was recorded and the cost was divided equally between herself and Nanaimo Cellular. She agreed the dress code was based on the concept workers should wear professional attire suitable for the purpose and that it was not particularly strict. She also agreed that some workers left on their own accord and sought employment elsewhere. [15] In response to questions from the Court, Quaife described the retail space as occupying three or four hundred square feet, equipped with two desks, a till, debit machine and computer. There was a back office used by the Manager and a storeroom where phones were kept together with various accessories. There were hooks for displaying product on slatboard together with several display cases. Salespersons could earn a 50% commission for selling headsets, car phone chargers and similar items. [16] Kathryn Peters - formerly Kashmere - testified she worked for Scott from June, 1998 to June, 1999 at the store located in Woodgrove Centre in Nanaimo. She had responded to a newspaper advertisement and was interviewed by Coté prior to being hired as a sales representative on the basis of straight commission. Later, she worked as an Assistant Manager and was responsible for opening and closing the store, shipping and receiving and cleaning the premises. Later, she and Aimee Quaife prepared the schedule for all workers in the store. Each night, the volume of daily sales was reported either to Coté or Scott. Peters prepared the payroll and also some cash deposits which were taken to the bank by Coté. In relation to her selling activity, Peters stated she was provided with all necessary tools and materials including contracts for Rogers service and was provided with a free cell phone. She received the sum of $500 per month for her managerial duties in addition to the 50% commission on profit from sales. She also prepared a list of all sales - with names of the workers responsible for specific sales - and Coté prepared pay cheques based on that information. Peters stated she considered her services had to be provided personally and, when working with Quaife, one of them always ensured the store was staffed. She recalled Lavalle being terminated - by Coté - because of his Amway selling activity and that three or four other workers had left for various reasons. [17] In cross-examination by the appellant, Kathryn Peters stated she had been told that Coté was a partner of Scott in addition to being Manager of the store. She agreed the work schedule could be changed, if required, and stated she took instructions from the Manager because she only saw Scott once per month. Peters stated that when she spoke with an auditor from CCRA - on February 15, 2002 - she informed him that she had always been a commission salesperson and not an independent contractor. [18] Russell Lyon testified he is an auditor employed by CCRA. Following a lead received from a GST auditor, he performed an employment compliance audit with respect to the business operated by the appellant. Although Scott had reported a large wage expense, there was no corresponding employer payroll account established with CCRA. Lyon contacted Scott and obtained a list of workers for the relevant period and copies of cancelled cheques. At that time, Scott advised that all workers were categorized as outside workers, selling on their own without supervision. Some of the workers on the list were not identified by a social insurance number (SIN) and Lyon attempted to locate several individuals by searching the telephone directory. In total, Scott provided 7 or 8 boxes of unsorted material, including unopened mail, but did not provide any General Ledger or other books of account. Scott did not issue any T4A's and Lyon concluded the appellant's enterprise encompassed 5 stores of which 4 were supervised by an individual designated as a Manager. The workers did not incur any expenses in relation to operation of any retail space where most of the sales occurred. Lyon stated he spoke to a total of 8 workers on the list and travelled to Nanaimo in order to interview Quaife, MacGregor and Coté. He also spoke to Dhillon - at the Duncan store - and had a conversation with Mike Fabbro whom he understood to have been a partner of Scott in the Harbour Park location. As a result, Lyon did not consider Fabbro as an employee for the purposes of the compliance audit. In the course of his investigation, Lyon stated he formed an opinion whether certain persons were working inside the retail stores or generating sales outside of that structure and relying on their own initiative. Lyon stated he spoke to Dhillon who described himself as the store Manager. In the course of their conversation, Dhillon stated all sales were produced inside the store and that he did not consider himself to be providing services to Scott as an independent contractor. After considering the material gathered, Lyon stated he arrived at the conclusion that the in-store workers were employees of Scott. Many of the workers of the list were young and mobile and there were no addresses provided. None of the workers had registered for GST and none had taken out a business licence or registered a trade name. Lyon stated that - at one point - Scott's partner - at West Shore Cellular - had phoned CCRA in order to open a payroll account but Scott later contacted CCRA and advised that all workers were self-employed and there was no need to establish such an account. Lyon stated Scott had advised him the industry standard - relating to sales of cell phones and service - was that salespersons were regarded as independent contractors. As a result of receiving this information, Lyon contacted other cell service providers in kiosks at malls and discovered they were all treated as employees whereas outside sales representatives were considered to be independent contractors. As the audit progressed, Lyon stated he informed Scott that it appeared as though all workers inside the various retail outlets should be classified as employees. Total sales within the Scott business structure exceeded $1 million per year and were increasing. [19] In cross-examination by the appellant, Russell Lyon stated he had sold cell phones and air time and had operated a video business - in a partnership - when he was 18. He had experience in leasing equipment, attending exhibitions and gatherings, and had leased space in a mall in Nanaimo but had been evicted by mall management for failing to abide by terms relating to the need to observe mandatory opening and closing hours. Lyon stated Scott had identified the amounts paid to workers as "wages" when filing his Profit and Loss Statement together with his tax return. Lyon stated he did not group all workers together - as suggested by Scott - but had taken care not to include - as employees for purposes of his audit report - any persons who were partners of Scott or those salespersons who generated revenue exclusively from outside sales rather than by working inside the retail outlets. Lyon stated he spoke to Derek Langdon, Guy Landry and Nicholas Karpinsky. In speaking with various workers, Lyon stated he formed the impression they had all considered it was extremely difficult to earn a living if required to rely solely on outside sales. Lyon stated that during his conversation with Dhillon, he had not mentioned any sales activity in the Vancouver area and had clearly expressed the opinion that almost all sales took place inside the store. Lyon stated that only the in-store workers were included in the assessment. [20] Jeffrey Derrick stated he is a Senior Appeals Officer and has been employed by CCRA for the past 21 years. The first assessments were cancelled because they were issued to the appellant, operating as West Coast Cellular. At that stage, Scott was represented by counsel who advised that Scott operated his business as a sole proprietor. As a result, new assessments were issued, as explained in the letter - Exhibit A-1 - sent to Scott on September 28, 2001 in which those new assessments were confirmed. Derrick stated he ascertained that no T4A's had been issued and proceeded to send out questionnaires to 20 workers. He received 13 responses and spoke to 11 or 12 workers of whom 4 or 5 indicated they were self-employed. Some workers had been issued business cards on which they were described as holding managerial positions. No worker ever mentioned selling any product for Price, the home alarm company. All workers reported they were paid 50% of the profit on each sale of phones, service and/or accessories. Derrick ascertained that no worker was expected to pay rent or any share of the expense associated with leasing space or any equipment and no worker was registered for GST, although some workers had reported income on the basis of being self-employed. Some indicated they had the ability to come and go as they pleased. Derrick stated that Scott's position - from the beginning - had been that all workers - approximately 30 - had been self-employed whether working inside a retail outlet owned by him or outside in accordance with their own methods. [21] In cross-examination, Jeffrey Derrick agreed Christopher Balanko had informed him that a substantial amount of outside sales had been made but had not provided any further details. [22] The appellant submitted the assessments were flawed because the Minister had not properly taken into account that the business methods employed were standard within the cell phone industry and the workers had provided their services within the context of their own business in which they earned revenue solely on the basis of commission on sales. He conceded the evidence had disclosed the operation of Nanaimo Cellular to have been somewhat different than the other stores in the Victoria area. The appellant pointed out there was a risk of loss in regard to commission income as a result of clawbacks and the requirement that salespeople pay their own expenses when making outside sales. In addition, the appellant submitted that Coté had been a partner at some point in the relevant period and should be excluded from the assessments on that basis together with Powell, Langdon, Bedard who had also been partners or co-venturers sharing profit from certain retail locations in the Victoria region. [23] Counsel for the respondent advised that Mike Fabbro had not been included in the assessment on the basis CCRA officials had been satisfied he was not an employee because certain leasing documents had been examined which enabled the conclusion to be drawn that he was engaged in a form of partnership with Scott. Counsel submitted the assessments issued by the Minister should be confirmed because the evidence disclosed the workers were not carrying on business on their own account. Instead, they worked inside retail stores owned by the appellant and were not required to supply and tools, equipment or to make any substantial investment. Examining the evidence overall, counsel submitted the workers were retail clerks and/or commission salespersons working pursuant to a contract of service with Scott. [24] The Supreme Court of Canada - in a recent decision - 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] S.C.C. 59; 274 N.R. 366 - (Sagaz) dealt with a case of vicarious liability and in the course of examining a variety of relevant issues, the Court was also required to consider what constitutes an independent contractor. The judgment of the Court was delivered by Major, J. who reviewed the development of the jurisprudence in the context of the significance of the difference between an employee and an independent contractor as it affected the issue of vicarious liability. After referring to the reasons of MacGuigan, J.A. in Wiebe Door Services Ltd. v. M.N.R., [1986] 2 C.T.C. 200 and the reference therein to the organization test of Lord Denning - and to the synthesis of Cooke, J. in Market Investigations, Ltd. v. Minister of Social Security, [1968] 3 All E.R. 732 - Major, J. at paragraphs 45 to 48, inclusive, of his judgment stated: Finally, there is a test that has emerged that relates to the enterprise itself. Flannigan, ... ("Enterprise control: The servant-independent contractor distinction" (1987), 37 U.T.L.J. 25, at p. 29) sets out the "enterprise test" at p. 30 which provides that the employer should be vicariously liable because (1) he controls the activities of the worker; (2) he is in a position to reduce the risk of loss; (3) he benefits from the activities of the worker; (4) the true cost of a product or service ought to be borne by the enterprise offering it. According to Flannigan, each justification deals with regulating the risk-taking of the employer and, as such, control is always the critical element because the ability to control the enterprise is what enables the employer to take risks. An "enterprise risk test" also emerged in La Forest J.'s dissent on cross-appeal in London Drugs where he stated at p. 339 that "[v]icarious liability has the broader function of transferring to the enterprise itself the risks created by the activity performed by its agents". In my opinion, there is no one conclusive test which can be universally applied to determine whether a person is an employee or an independent contractor. Lord Denning stated in Stevenson Jordan, ... ([1952] 1 The Times L.R. 101) that it may be impossible to give a precise definition of the distinction (p. 111) and, similarly, Fleming observed that "no single test seems to yield an invariably clear and acceptable answer to the many variables of ever changing employment relations..." (p. 416) Further, I agree with MacGuigan J.A. in Wiebe Door, at p. 563, citing Atiyah, ...(Vicarious Liability in the Law of Torts. London: Butterworths, 1967) at p. 38, that what must always occur is a search for the total relationship of the parties: [I]t is exceedingly doubtful whether the search for a formula in the nature of a single test for identifying a contract of service any longer serves a useful purpose... The most that can profitably be done is to examine all the possible factors which have been referred to in these cases as bearing on the nature of the relationship between the parties concerned. Clearly not all of these factors will be relevant in all cases, or have the same weight in all cases. Equally clearly no magic formula can be propounded for determining which factors should, in any given case, be treated as the determining ones. Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuigan J.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations, supra. The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks. It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application. The relative weight of each will depend on the particular facts and circumstances of the case. [25] I will examine the facts in relation to the indicia set forth in the judgment of Major J. in Sagaz. Level of control [26] The appellant conceded the evidence had disclosed the Nanaimo store had been operated in a different manner than the retail outlets located in the Greater Victoria area. Although the evidence is unclear whether Coté was a partner of Scott during the relevant period, there is no doubt that he was acting as Manager of Nanaimo Cellular located in Woodgrove Centre. The testimony of Quaife and Peters demonstrated the nature of the business structure and the policies that had been instituted to carry out the task of selling cell phones, accessories, and service contracts. There was a work schedule prepared - initially - by Coté and workers were expected to conform with those posted shifts. Later, Quaife and Peters each received the sum of $500 per month - in addition to earned commission income - in order to act as Assistant Managers and to perform a variety of duties - including preparation of payroll - and the lists used to calculate commissions owed to workers and otherwise to ensure the efficient operation of the store. The evidence reveals that other workers at Nanaimo Cellular also followed directions provided by Coté or his designate and were supervised to some degree in carrying out their sales duties within the retail premise. A worker had been fired - by Coté - as a result of repeated late attendance at work. Another had been discharged because of a perceived conflict arising from attempts to sell Amway to customers who - presumably - had attended at the store to inquire about obtaining a cell phone. The workers had to perform the services personally and were treated as ordinary retail clerks in the same manner as those employed within other stores at the mall except for the method of remuneration which - for salespersons not performing any managerial duties - was wholly based on commission. [27] The workers in the Victoria area, even though working in the mall locations, appeared to have greater flexibility in terms of arranging their own schedules. Testimony provided by Ross, Little and Balanko indicated they made sales both inside and outside the retail premises established by the appellant and each of them had undertaken specific initiatives on their own accord with a view to selling and/or promoting the product. Participation in home or trade shows or travel in and out of the Greater Victoria area for the purpose of selling cell phones and service appeared to be at the discretion of these workers. However, the retail space within the various malls had to be staffed at all times in order to satisfy leasing requirements and the workers were permitted to operate on the basis of consensus with regard to creating a work schedule provided the store was open, as required. The Douglas Street premise was not subject to the same strict hours of operation and could be closed early if business did not warrant staying open on a particular day. Satnam Dhillon testified he worked on the basis that he was - like Ross, Little and Balanko - an independent contractor and operated his own business at the Duncan store This characterization is at odds with the statements provided to Russell Lyon - the CCRA auditor - during the course of an interview during which Dhillon identified himself as Manager of a two-person operation and had offered the opinion that he was not an independent contractor. According to Lyon, Dhillon stated that all cell phone sales were made inside the store. It is probable that the sales activity on the Lower Mainland described by Dhillon in the course of his testimony occurred outside the time frame relevant to the within appeals or - through a revelation offered by the gift of hindsight - he decided to revamp his original opinion concerning the nature of his working relationship with Scott. Provision of equipment and/or helpers [28] First, concerning the workers at the Nanaimo store, Quaife and Peters both testified they were each provided with cell phones - free - together with adequate monthly air time by Rogers. They did not pay for any related licensing fee or GST and all furniture, supplies and equipment required to carry on duties within the store were provided by - or through - Scott within the context of his overall business structure. The evidence established the workers were required to perform their duties personally and were not required to provide any additional tools or equipment or personnel in order to ensure ongoing sales activity within the store. [29] The workers located in the Victoria area - and Dhillon in Duncan - purchased their own cell phones - at cost - but paid a licensing fee and GST and incurred certain additional expenses in connection with sales activity although not in respect of in-store sales. Various estimates were provided by Ross, Little and Balanko as to attribution of sales inside and outside the retail outlets but it is clear the majority of sales occurred inside the retail premises. These workers chose to use their privately-owned vehicles in the course of attempting to sell the product but there were no particular tools or equipment required other than some minor amounts of office supplies. The inside sales were accomplished solely by using all of the equipment, furniture, display, cash registers, debit machines, telephones and lines, promotional material, paperwork and related material provided by Scott in the course of creating a retail outlet. Ross incurred some expenses in order to participate at a trade show, exhibition or other gathering but shared the cost with another worker. Rogers provided the paperwork and promotional material and revenue from sales of phone accessories taken from a particular store was split 50-50 with Scott. Degree of financial risk and responsibility for investment and management [30] On the evidence, the workers in the Nanaimo store had no financial risk or responsibility to contribute capital to the business operation. Any management activity carried out by Quaife and/or Peters was remunerated at the rate of $500 per month and was not dependent on any percentage of overall profit or sales volume. There is no evidence upon which to conclude that any worker in that store was required to purchase any cell phone or to invest any sum in order to produce revenue. Certainly, no worker was required to assume any risk in relation to the cost of establishing and maintaining that retail premise including the monthly lease payments and associated costs, telephone lines, furniture and related equipment. Any penalty levied by mall management for non-compliance with leasing requirements would be borne solely by Scott. [31] Satnam Dhillon - in Duncan - and the workers in the Victoria area did not have any degree of financial risk arising from the operation of the retail stores. None were signatories to any lease nor were they at risk in terms of the equipment or goods offered for sale within those stores. Scott had obtained the accessories on a consignment basis and was primarily responsible for payment. The only management required on their part was to ensure - among themselves - that the various stores were open for business, as required. Since they were all remunerated solely by commission, it is reasonable to expect the workers would take steps to organize their own work schedule. According to Exhibit R-2 - a letter sent by Scott to Glen Foster at Revenue Canada, various individuals were named as ex-partners who - in 1999 - had "power of attorney over income and expenses". Obviously, these individuals were responsible for management at the premises described as West Shore Cellular, Duncan Cellular, Nanaimo Cellular and Nanaimo Cellular South. [32] There was the issue of chargebacks against commissions which affected all workers. Basically, a commission was paid on the sale of a phone and service contract with the proviso that all conditions subsequent had to be fulfilled, including the requirement that a customer had to maintain regular payments for a 6-month period. In the event of default, the commission previously deemed to have been earned was then reversed and the appropriate amount was deducted from future commission payments. There was some confusion arising from the evidence but I conclude that no worker could ever lose more than the amount of the commission originally paid. All profit resulting from sales was divided equally between Scott and the specific worker responsible for the sale. Similarly, a chargeback could subsequently be made - by Rogers - to Scott in accordance with details provided on a sheet prepared by Rogers staff. Using that information, Scott then deducted the amount - previously paid to a worker on that now-defaulted contract - on the basis it had since become ineligible for inclusion in the category of earned commission. The evidence also established that each contract - theoretically - could lead to a full loss of commission but over the course of 100 sales it would be doubtful that any significant loss of commission would occur and - in any event - was never in an amount greater than the original commission. Quaife and Peters thought they had been charged the entire amount of commission chargeback but it is more likely they misread the information contained on the list forwarded by Scott and were only subject to a loss of their original commission based on a 50-50 profit split with Scott. Opportunity for profit in the performance of tasks [33] All workers - wherever located - were paid a commission which was calculated on the basis of an equal division - with Scott - of profit flowing from the sale of a particular unit, service contract or accessory, whether made inside or outside one of the retail stores. There is some indication one or more of the workers could sell used phones or accessories on their own without reference to Scott but that did not constitute a significant portion of their sales. There was an opportunity for increased commission if a worker could sell a phone at full price to a customer without having to offer a discount - or free accessories - in order to close a sale. Since the credit approval for potential users was solely at the discretion of Rogers, the workers had no opportunity to minimize the risk of future clawbacks against commission by refusing to submit offers by customers. Workers engaged in outside sales could pay attention to costs associated with generation of sales revenue and could regulate their own behaviour in that regard. Sales made inside the store were subject to a small range for greater profit but did not have any related expenses that had to be borne by the workers. [34] In the case of Ivanov v.Canada (Minister of National Revenue - M.N.R.), [2000] T.C.J. No. 236, I found the worker to have been an independent contractor while engaged in selling long distance services by calling on people in their houses and apartments. In that situation, there had been an agreement signed purporting to characterize Ivanov as an independent contractor. At paragraphs 19 - and following - I commented, as follows: 19. Taking to heart the advice to look at the entire forest, I turn again to the issue of integration as part of the four-in-one test used in the context of the overall scheme of operations. Looking at it from the perspective of the appellant, he was - like salesmen for the last hundred years - out in the territory on a "smile and a shoeshine" earning what he could on a commission basis and bearing his own expenses. He could leave the sales area when he chose and could arrive when he wanted to begin another day of selling. Meanwhile, Bartel was a promotions business handling a variety of products which it sold at different locations using different sales strategies, including consignment to salespersons. In the event the appellant did not produce sales over an extended period of time, there would not be much point in him using up a sales territory that could be more productive in the hands of another salesperson. Under the circumstances of the appellant's working relationship with Bartel, he was merely an accessory to it and had not been integrated into the Bartel organization. The appellant obviously felt the same way as when he decided to leave he merely notified David Siradze of his intent and then quit, never to return. One would not expect someone fulfilling a function integral to an employer to behave in that manner. 20. As for the effect to be given to the agreement - Exhibit A-1 - it is clear what the parties thought their relationship was will not change the facts. In the case of Minister of National Revenue v. Emily Standing, 147 N.R. 238, Stone, J.A. at pages 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... 21. It is, however, important to examine whether the parties, during the course of their relationship, acted in a manner consistent with their agreement or whether the document purporting to set out certain mutual contractual obligations was - on an objective analysis - at odds with the observed conduct of the parties and/or merely an instrument to apply a patina of entrepreneurship to an obvious employment situation. In the within appeal, the appellant's retroactive interpretation of how he must have acted - and the reasons for such conduct - during the short time he was there is not borne out by other evidence. His behaviour was not that of someone who - at the time - believed he was an employee subject to review, discipline or control in any meaningful sense. 22. Taking into account all of the evidence, I find the appellant was not engaged in insurable employment with Bartel pursuant to a contract of service during the period disclosed by the evidence to have been March 16 to May 25, 1998. Taking into account this variation, the decision of the Minister is otherwise correct. [35] In the case of Frontier Business Centre Ltd. v. Canada (Minister of National Revenue - M.N.R.), [1998] T.C.J. No. 388 - a judgment of the Honourable Judge Bowman, as he then was, Tax Court of Canada, dated May 20, 1998, two salesmen were found to have been working as independent contractors while selling new and used farm equipment. Judge Bowman found they had no fixed hours, worked out of their homes and were not required to meet any sales quotas or even to sell anything. In fact, they were discouraged from attending at the payor's office since he wanted to make the sale himself and not have to pay a commission. They paid all their own expenses - initially - and then received reimbursement only in accordance with the commission split - 30% of the net profit - once a sale had been completed. They were free to hire other people, for which they paid, and chose what sales would be attempted. A significant difference between those facts and the situation in the within appeals is that those salesmen were able to choose the price they would charge for the equipment and had full discretion as to the amount they would allow on a trade-in which would directly impact on their share of the net profit. Judge Bowman found there was no control over their income-generating activity nor were there any assigned territories. In addition, he held they were not integrated into the organization even though their services - overall - had an effect on the profit of Frontier Business Centre Ltd. [36] In the case of Randy Fatt v. Canada (Minister of National Revenue - M.N.R.), [2001] T.C.J. No. 239, I considered the matter of a worker who was engaged in selling pay phone installations to businesses. The worker worked on his own, sent in contracts to the telephone service provider and was remunerated on that basis. In that situation, the worker was an experienced salesman and had chosen to provide his services pursuant to an agreement that permitted him to function as an entrepreneur carrying on business on his own account. As in the within appeals, there was a subsequent desire to ignore the conduct of the parties subsequent to the agreement and to simply seek a revision of the working status based on nothing more than a desire that the Court now classify him as an employee who - all along - had truly been providing his services pursuant to a contract of service. [37] In the case of Lazowksi v. Canada (Minister of National Revenue - M.N.R.), [2002] T.C.J. No. 517, I dealt with the case of an individual who had been working as a fundraiser for the Western Canada Wilderness Committee. Partway through paragraph 18, I commented: ... I find there was very little control exercised by Thiessen with respect to the sales activities of the appellant and it was usually reactive in the sense of responding to a specific issue rather than proactive in a wider, ongoing sense. The appellant's contact with the WCWC office was primarily for the purpose of obtaining additional literature - to assist in making sales - or to deliver the ledger sheets - every two weeks - in order that he could be paid on the basis of his recorded sales. The appellant - an experienced salesperson - was motivated to operate in accordance with his own style. He chose to begin canvassing earlier in the day than other canvassers and used his own vehicle to arrive at a specific location within a designated area. The fundraising activities of WCWC comprised only a portion of its overall activities in pursuit of its goal of advancing the cause for protection of the environment. Within the sphere of fundraising, some funds were solicited door-to-door together with sales of memberships. Other memberships were sold through the Vancouver Head Office or the Winnipeg office and revenue was raised through sales of product at two retail outlets as well as from grants from government, corporations, private foundations and members of the public. Even the door-to-door aspect of the fundraising was subject to different treatment. Thiessen campaigned on his own in his capacity as Campaign Director and a private company had been engaged to carry out some canvassing of certain areas of metropolitan Winnipeg in addition to the services provided by the appellant and the team of 4-8 other canvassers that was driven to and from their assigned areas by a WCWC representative. Within the overall picture, the appellant played his part by providing a canvassing service - on his own - in the manner he deemed appropriate and earned income based solely on his own efforts. [38] After reflecting on the relevant facts in the within appeals and turning to the applicable jurisprudence, I must deal with the central question - as set forth at paragraph 47 of the judgment of Major J. in Sagaz, supra - and that is to decide "whether the person who has been engaged to perform the services is performing them as a person in business on his own account". [39] Bearing in mind that one is to consider this issue from the standpoint of the worker, the caveat still applies that the perspective of the worker must be analzyed on an objective basis. At this point, Dhillon wants to be seen as an independent contractor during the relevant period. Ross, Little and Balanko also consider themselves to be entrepreneurs engaged in selling a specialized product within a rapidly-changing industry. There is little or no evidence relating to other workers named in Appendix A to the decision letter - Exhibit R-1 - confirming earlier assessments issued for 1998 and 1999. There is no evidence upon which I could find that any worker in Nanaimo considered themselves to have been other than employees - of the appellant - as managed and supervised by Coté. There is some indication Coté may have been a partner of Scott - at some point - but there is insufficient evidence upon which to determine whether that special relationship had come to an end prior to 1999. Without specific information in that regard, it is difficult to exclude Coté from the assessments as it is equally probable that he had the status of employee with full discretion to operate Nanaimo Cellular. Overall, the evidence does not permit me to find that there were two separate businesses operating, one by Scott and another by workers providing services - mainly - inside a retail location and/or selling phones elsewhere. The retail premises had been leased and fully equipped by Scott. The merchandise offered for sale had been provided by Scott who had a contract with Rogers. The workers did not have any capacity to sell a phone or a service contract - with Rogers - except through the business structure established by Scott. The locations were chosen and named by Scott and some stores had an individual who functioned as a manager and/or partner at various times during 1998 and 1999. Mike Fabbro was apparently named on the lease for the premises at Nanaimo Cellular South - and was excluded from the assessments issued to Scott together with those salespersons who had been engaged - exclusively - in outside sales. The appellant provided no details to support his contention that Powell, Langdon, Bedard and Coté should also be regarded as partners except for the ambiguous statement contained in his letter filed as Exhibit R-2. With respect to others who wished to be seen as independent contractors, unless the facts support that determination, parties cannot assign themselves a status within a working relationship and expect to bind the Minister. [40] There are many salespersons - deriving remuneration strictly based on commission for sales - who are still employees. Moreover, it is not unusual for these persons to pay all expenses associated with sales activity if that is a condition of their employment. In such case, there are provisions of the Income Tax Act pursuant to which expenses associated with the generation of sales revenue may be deducted from income. Flexibility in work schedules or the ability to have input into the establishment of said schedule or working part time or being paid wholly or partly by commission or by the piece does not - without more - transform an employee into an independent contractor. [41] The appellant has the onus of establishing on a balance of probabilities that the assessments issued by the Minister should be vacated or varied. The appellant could not offer any evidence with regard to many of the named workers and had little personal contact - perhaps once per month - with his stores in Nanaimo. Instead, he relied on Coté and Fabbro to manage those retail outlets and must be bound by their conduct as it pertained to relationships with workers inside those stores. Overall, there is insufficient evidence to permit me to arrive at any conclusion other than to confirm the decisions of the Minister - dated March 28, 2002 - confirming earlier assessments issued pursuant to the Act and the Plan. [42] Both appeals are hereby dismissed. Signed at Sidney, British Columbia, this 21st day of March 2003. "D.W. Rowe" D.J.T.C.C. CITATION: 2003TCC120 COURT FILE NO.: 2002-2354(EI) and 2002-2356(CPP) STYLE OF CAUSE: Gordon Lawrence Scott and M.N.R. PLACE OF HEARING: Victoria, British Columbia DATE OF HEARING: February 6 and 7, 2003 REASONS FOR JUDGMENT BY: The Honourable Deputy Judge D.W. Rowe DATE OF JUDGMENT: March 21, 2003 APPEARANCES: Counsel for the Appellant: The Appellant himself Counsel for the Respondent: Victor Caux COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada