Bérubé v. M.N.R.

Bérubé v. M.N.R. Court (s) Database Tax Court of Canada Judgments Date 2005-05-11 Neutral citation 2005 TCC 304 File numbers 2004-2613(EI) Judges and Taxing Officers Alain Tardif Subjects Employment Insurance Act Decision Content Dockets: 2004-2613(EI) 2004-2614(EI) BETWEEN: JACQUES BÉRUBÉ, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeals heard on March 17, 2005, at Québec, Quebec. Before: The Honourable Judge Alain Tardif Appearances: Counsel for the Appellant: Jérôme Carrier Counsel for the Respondent: Michel Lamarre ____________________________________________________________________ JUDGMENT The appeals heard under subsection 103(1) of the Employment Insurance Act are dismissed, in that the work performed by the Appellant during the periods from January 28 to May 24, 2002, August 12 to September 13, 2002, and January 13 to March 28, 2003 was performed under genuine contracts of service and the decisions of the Minister of National Revenue are confirmed, in accordance with the attached Reasons for Judgment. Signed at Ottawa, Canada, this 11th day of May 2005. "Alain Tardif" Tardif J. Translation certified true on this 28th day of March, 2006 Garth McLeod, Translator Citation: 2005TCC304 Date: 20050511 Dockets: 2004-2613(EI) and 2004-2614(EI) BETWEEN: JACQUES BÉRUBÉ, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent. [OFFICIAL ENGLISH TRANSLATION] REASONS FOR JUDGMENT Tardif J. [1] The parties have agreed that common evidence be presented for both cases. [2] In the first case, the work at issue was performed for the corporation Les Éditions Dubout Duquai Inc., from January 28 to May 24, 2002, and from August 12 to September 13, 2002. [3] In the second case, the work at issue was performed for the corporation Les Productions Prise XIII, from January 13 to March 28, 2003. [4] In making his decision in docket no. 2004-2613(EI) the Minister of National Revenue (the "Minister") based himself on the following assumptions of facts: (a) the Payor is a non-profit corporation, founded in Rimouski in 1983, specializing in the publishing and distribution of cultural products; (admitted) (b) during the periods at issue, the Board of the Payor was made up of communications professionals, namely: - the Appellant, President, specialist in the visual arts and Editor; - Pierre Landry, Vice-president, writer and Editor; - Bertin April, Secretary, teacher in Rimouski; - Roy Hubler, Treasurer, Assistant Producer and Editor-in-Chief; (admitted) (c) no permanent employees worked for the Payor;(admitted) (d) in 2001, the Payor moved its head office to 801 des Sables in Rimouski, which is the residence of the Appellant; (admitted) (e) in April 2002, the Appellant submitted an application for a grant in his own name to the Conseil des Arts et Lettres du Québec to write and produce a documentary on a symposium which was to take place during the summer in the municipality of Carleton; (admitted) (f) at the end of July 2002, the Appellant received, personally, a grant of $10,000 from the Conseil des Arts et Lettres du Québec; (admitted) (g) the Appellant began writing the screen play for the documentary at the end of January 2002, the shooting lasted two weeks in August 2002 and there was a week of pre-screening during the week of September 9 to 13, 2002; (admitted) (h) during the first period at issue, the Appellant was hired as a researcher and screen writer and during the second period at issue, he shot the documentary. (admitted) (i) the documentary was entitled H20 Ma Terre. (admitted) (j) the documentary is a 52-minute film focussing on the symposium of artists present at Carleton in August 2002; (admitted) (k) during the period from January 28 to May 24, 2002, the Appellant was hired as a researcher and screen writer to develop a one-hour video documentary on the symposium on artistic creation which was to take place in Carleton in August 2002; (admitted) (l) the work of the Appellant involved communicating with the artistic director of the symposium in order to obtain information about the creation projects proposed by the participating artists, determine which projects and which artists would be the most interesting to follow while shooting the film, to write a screen play and establish a shooting plan on the basis of which the funding required to produce and write a one-hour documentary could be obtained; (admitted) (m) the Board of the Payor had decided in advance that the Appellant was to work for 6 x 35-hour weeks for a set remuneration of $720 a week; (admitted) (n) the Appellant mentioned to the CPP/EI coverage officer that he had in fact worked between 40 and 45 hours a week during these 6 weeks; (denied) (o) the Appellant worked at home and had no work schedule to comply with; (denied) (p) he was free to allocate his time as he wished and, during this period, had a specific mandate to write and develop a script; (denied) (q) during this period, the Payor paid the Appellant for 5 consecutive weeks, from January 23 to February 22, 2002, and during the week ending May 24, 2002; (admitted) (r) the filming occurred from August 11 to 24, 2002, and the Appellant was involved as a producer; (admitted) (s) during the week of September 9 to 13, 2002, the Appellant proceeded with the pre-screening of the film; (admitted) (t) during these 3 weeks, the Appellant received remuneration of $720 weekly; (admitted) (u) the shooting costs totalled $10,010 and were paid out of the $10,000 scholarship obtained by the Appellant; (denied) (v) on June 28, 2002, the Payor issued a Record of Employment to the Appellant which showed January 28, 2002 as the first day of work and May 24, 2002 as the last day of work, 210 insurable hours and $4,492.80 as total insurable earnings; (admitted) (w) on July 3, 2003, the Payor issued a Record of Employment to the Appellant which showed August 12, 2002 as the first day of work and September 13, 2002 as the last day of work, 105 insurable hours and $2,246.40 as total insurable earnings; (admitted) (x) the Records of Employment are not consistent with regard to the periods worked or the hours actually worked for the Appellant; (denied) (y) in his statutory declaration signed on August 6, 2003, the Appellant indicated that, from September 16 to 27, 2002, he had continued to perform services by indexing the film; (denied) (z) between the two periods at issue and after the last period at issue, the Appellant provided services to the Payor without remuneration; (denied) (aa) the Appellant performed services for the Payor based on deadlines that had to be met; what was important for the Payor was the result; (denied) (bb) the Appellant was the guiding spirit of the documentary produced by the Payor; (denied) (cc) the relative importance of the Appellant viz-a-viz the Payor is such that a relationship of independence necessary to the creation of a genuine relationship of subordination between the parties could not exist. (denied) [5] In reaching his decision in case no. 2004-2614(EI) the Minister based his decision on the following assumptions of fact: (a) in April 2002, the Appellant applied for a grant in his own name to the Conseil des Arts de Lettres du Québec (CALQ) to direct and produce a documentary on a symposium which was to take place during the summer in the municipality of Carleton; (admitted) (b) at the end of July 2002, the Appellant received, personally, a grant of $10,000 from the CALQ; (admitted) (c) the writing of the script for the documentary by the Appellant began at the end of January 2002, the shooting lasted 2 weeks in August 2002 and there was a week of pre-screening during the week of September 9 to 13, 2002; (admitted) (d) the documentary was entitled H20 Ma Terre; (admitted) (e) the documentary is a 52-minute film;(admitted) (f) the Payor is a private for-profit film production corporation; (admitted) (g) on May 1, 2002, a writing contract worth $5,200 was signed between the Appellant and the Payor; (admitted) (h) during the period at issue, the Appellant was concerned primarily with assembling and editing the documentary; (admitted) (i) the Appellant worked on the premises of the Paraloeil corporation, editing and assembling the documentary; (admitted) (j) the Appellant used the digital editing equipment belonging to Paraloeil between December 8 and December 20, 2002; (admitted) (k) the Appellant had a key which afforded him access to Paraloeil's premises at any time; (admitted) (l) the Appellant asked the Payor that he be treated as a salaried employee; (denied) (m) according to the Payor, the Appellant would have done the same work in the same way if he had been hired for a fixed amount; (denied) (n) on July 13, 2003, the Payor issued a Record of Employment to the Appellant, which showed January 13, 2003 as his first day of work, March 28, 2003 as his last day of work and 385 hours of insurable employment and $8,236.80 as total insurable earnings; (admitted) (o) the Record of Employment is not consistent with reality in respect of the period actually worked, nor of the hours actually worked by the Appellant; (denied) (p) the Appellant was paid on the basis of 35 hours a week, whereas the Appellant did much more, and also worked outside the period at issue; (denied) (q) the Appellant undertook the assembly of the documentary with no limitations on the time worked; (denied) (r) the Appellant was the guiding spirit in the production of the documentary; (denied) (s) the Payor was interested only in the end result of the work of the Appellant; (denied) [6] The Appellant acknowledged as correct the following numerous assumptions of fact. In case no. 2004-2613(EI), paragraphs (a) to (m), (q) to (t) and (v) and (w) are admitted; he denies paragraphs (n), (o), (p), (u), (x), (y), (z), (aa), (bb) and (cc). In file no. 2004-2614(EI), he admits paragraphs (a) to (k) and (n), and he denies paragraphs (l) and (m) as well as (o) to (s). [7] The Appellant described the work that he had performed for both corporations. He stated repeatedly that he had never acted or worked as an self-employed worker or contractor. He maintained that at all times, in the context of the work he did for corporations for which he was paid, he had always been subject to the control of his employers and to their authority. He stated that he did not have carte blanche in carrying out his work. He had to work within restrictive guidelines and parameters; he was required to report regularly to his employers or to one of their representatives. With regard to the work performed for Productions Prise XIII, he also asserted that he did not have the skills and expertise to perform this work on his own. According to his testimony, he needed an organizational structure and technical support. [8] Two directors of Les Éditions Dubout Duquai Inc. appeared to confirm the testimony of the Appellant in respect of the first case. This was a corporation established in 1983, the aim of which was to develop cultural activities in the Gaspé region. [9] The corporation had, over the years, in fact been associated with a variety of initiatives, including in particular the creation of the "Mouton noir" newspaper. [10] Several examples were cited to explain what the relationship of subordination consisted of. The examples involved meetings or telephone calls, the purpose of which was to review the progress of the work. [11] Pierre Landry, one of the directors of the corporation, stated for his part that he spoke regularly with the Appellant to make sure that the work was progressing in accordance with the project schedule and with expectations. [12] With regard to the second period of work at issue, the Appellant explained the nature and extent of the work and described the various facts surrounding the performance of his work. He referred to the various players involved on whom he depended and to whom he was required to report. It would have been very helpful had these persons also appeared to explain the nature of the relationship that the Appellant had with Productions Prise XIII. [13] This was an entirely different type of work, which was described most satisfactorily in paragraphs 5 ff of the reply to the Notice of Appeal. [14] For his part, the Respondent relied essentially on two arguments. The first of these had to do with the fact that the Appellant had given or advanced the sum of $1,100 to the non-profit corporation which subsequently became his employer. [15] The second argument had to do with the fact that the Appellant had himself approached the Conseil des arts et lettres du Québec, which offered grants; in this regard, the Appellant asserted that he did this not by choice, but because this was an unavoidable obligation, since only individuals could submit applications for this type of grant. [16] The numerous comments, observations and suggestions of the Respondent regarding these two aspects of the case showed that these were undoubtedly central to the two determinations. [17] These two elements were determining factors for the Minister in his two determinations with respect to the nature of the work carried out by the Appellant on behalf of the corporations which issued the two Records of Employment. [18] If the evidence had shown a direct link between the contribution of the Appellant to the corporation of which he was a director and the creation of his job, I would have better understood the surprise of the Respondent. The evidence, nonetheless, did not support the existence of such a link. [19] Although these two elements of proof per se might give rise to a suspicion, it was certainly not sufficient, let alone determinant, to constitute the bases for the determination. [20] The Appellant was a member of a non-profit corporation. This involved a role similar to that of a shareholder of a venture capital corporation. The evidence submitted does not allow us to conclude that the sole aim of the contribution of the Appellant to Les Éditions Dubout Duquai Inc. was to create a job for himself. Here again, even if such evidence had been submitted, that would not allow us to conclude automatically that the work was not carried out under a contract of service. The non-profit corporation, Les Éditions Dubout Duquai Inc., had existed for many years. It had been associated with numerous projects related to its basic purpose. At a given point, the directors decided to carry out a project. [20] Why should the employment of the Appellant have been deemed to be excluded employment? Because the Appellant had contributed financially to the the project? This might have been the case, had the aim of the project been to make the Appellant eligible for Employment Insurance benefits. No such evidence emerges from the file. Why should the corporation then have removed the Appellant from the project if he had the necessary skills to participate. [21] In order to launch the project, the three directors, including the Appellant, decided to contribute $1,100 each. The project took shape and the services of the Appellant were retained to carry it out. If anything abnormal, irregular or unacceptable occurred, no evidence thereof has been produced. [22] The two cases are related. [23] The Appellant had no power and no authority of any kind to apply for and receive a grant. He had to submit to a provincial agency a project that had obtained in advance the assurance of cooperation from Productions Prise XIII. He personally took the initiative, given that only individuals could submit a grant application. [24] Given the various obstacles and the numerous players involved, it is not surprising to find a number of inconsistencies with regard to management. The determination and commitment of the Appellant who, I would reiterate, was a third party in relation to the entities in the case, cannot be prejudicial to him with regard to the work performed in the context of what the Appellant has described as a contract of service. [25] Undoubtedly, the evidence provided by the Appellant could have been more explicit. The explanations submitted nonetheless seemed to me acceptable, having regard to the numerous details supplied with respect to the way in which the work was performed. [26] To confirm the validity of the determinations that lie at the root of these two appeals, I should reject the testimony on the grounds that the explanations were far-fetched, implausible or quite simply mendacious. The evidence has not allowed me to draw such conclusions; on the contrary, the Appellant testified coherently and his explanations and descriptions were reasonable, I would say entirely plausible. I thus had no reason to exclude all or even part of his testimony, which is the keystone of the burden of proof that was upon him. [27] Admittedly, certain elements were such as to tend towards a conclusion that the Appellant had acted as a self-employed independent contractor in both cases. These facts would have had to demonstrate a freedom of action very different from that described by the Appellant and the absence of any relationship of subordination. [28] On the other hand, the documentary evidence regarding the management of the file and the administration of the budget which arose out of the grant support the explanations of the Appellant to the effect that he had to submit reports with respect to his work, which was subject to monitoring at regular intervals. He explained, moreover, that he had neither the expertise nor the skills to carry out, in particular, the work performed for Productions Prise XIII. [29] In both cases, the Respondent maintained that the work performed by the Appellant did not meet the requirements of a contract of service within the meaning of paragraph 5(1)(a) of the Employment Insurance Act. Some facets could undoubtedly be interpreted as elements of a contract for service, given the flexibility and the apparent freedom of action enjoyed by the Appellant. [30] I do not believe, however, that the Appellant had the freedom of action of a self-employed worker. He was subject to his employer's power of control. This was established, furthermore, by the evidence in the case, where the Payor was Les Éditions Dubout Duquai Inc. The evidence also indicates preponderantly that the Appellant had no risk of loss or chance of profit in either of these files. [31] For these reasons, I conclude that the work performed by the Appellant during the periods from January 28 to May 24, 2002, from August 12 to September 13, 2002, and from January 13 to March 28, 2003 was performed under genuine contracts of service. Signed at Ottawa, Canada, this 11th day of May, 2005. "Alain Tardif" Tardif J. Translation certified true on this 28th day of March, 2006 Garth McLeod, Translator CITATION: 2005TCC304 DOCKET NO.: 2004-2613(EI) and 2004-2614(EI) STYLE OF CAUSE: Jacques Bérubé and M.N.R. PLACE OF HEARING: Québec, Quebec DATE OF HEARING: March 17, 2005 REASONS FOR JUDGMENT: The Honourable Judge Alain Tardif DATE OF JUDGMENT: May 11, 2005 APPEARANCES: Counsel for the Appellant: Jérôme Carrier Counsel for the Respondent: Michel Lamarre SOLICITOR OF RECORD: For: Name: Jérôme Carrier Firm: Lawyer, Lévis, Quebec For the Respondent: John H. Sims, Q.C. Deputy Attorney General of Canada Ottawa, Ontario