Goulet c. M.R.N.

Goulet c. M.R.N. Court (s) Database Tax Court of Canada Judgments Date 2004-12-21 Neutral citation 2004 TCC 822 File numbers 2003-3244(EI) Judges and Taxing Officers Sylvio J. Savoie Subjects Employment Insurance Act Decision Content Docket: 2003-3244(EI) BETWEEN: JEAN-FRANÇOIS GOULET, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent, and LYNE DAUPHINAIS, Intervener. [OFFICIAL ENGLISH TRANSLATION] ____________________________________________________________________ Appeal heard on November 22, 2004 at Montreal, Quebec Before: The Honourable Justice S.J. Savoie, Deputy Judge Appearances: For the Appellant: The Appellant himself Counsel for the Respondent: Stéphanie Côté For the Intervener: The Intervener herself _______________________________________________________________ JUDGMENT The appeal is allowed, and the decision by the Minister is amended in accordance with the attached Reasons for Judgment. Signed at Grand-Barachois, New Brunswick, this 21st day of December 2004. "S.J. Savoie" Savoie D.J. Translation certified true on this 29th day of March 2005. Colette Dupuis-Beaulne, Translator Citation: 2004TCC822 Date: 20041221 Docket: 2003-3244(EI) BETWEEN: JEAN-FRANÇOIS GOULET, Appellant, and THE MINISTER OF NATIONAL REVENUE, Respondent, and LYNE DAUPHINAIS, Intervener. [OFFICIAL ENGLISH TRANSLATION] REASONS FOR JUDGMENT Deputy Judge Savoie [1] This appeal was heard at Montreal, Quebec on November 22, 2004. [2] This is an appeal regarding the insurability of the employment of Mélanie Demers for the period from January 1 to March 31, 2001; of Sandrine Abaziou for the period from March 28 to September 30, 2001; of Muriel Dejean for the period from January 1, 2001, to November 25, 2002; and of Lyne Dauphinais for the period from September 1, 2001, to November 25, 2002 (the Workers), while in the service of the Appellant, within the meaning of the Employment Insurance Act ( the "Act"). [3] On June 17, 2003, the Minister of National Revenue (the "Minister") informed the Appellant of his decision whereby the Workers held insurable employment given that an employer-employee relationship existed between the Appellant and the Workers. [4] In rendering his decision, the Minister relied on the following assumptions of fact contained in paragraphs 14 and 15 of the Reply to the Notice of Appeal, which were admitted or denied by the Appellant, or concerning which the Appellant had no knowledge: 14.a) the Appellant is a lawyer; (admitted) b) the Appellant ran a law firm on Cartier Boulevard at Ville de Laval; (admitted) c) the Appellant did not work with representatives of the Respondent before the hearing; (denied as written) d) the Workers were hired by the Appellant as secretaries; (admitted) e) the Workers' duties consisted of managing communications, tracking files, preparing legal documents, and providing administrative services; (denied as written) f) the Workers worked in the offices of the Appellant; (denied as written) g) the Workers had to follow the work schedule set by the Appellant; (denied) h) the Appellant assigned tasks to be completed to the Workers; (admitted) i) the Appellant assigned priority tasks and deadlines to the Workers; (admitted) j) the Workers had to adhere to the standards set by the Appellant for the quality, volume, and time for completion of the work; (denied as written) k) the Workers had to submit written and oral reports regularly to the Appellant; (no knowledge) l) the Workers, except for Sandrine Abaziou, had an hourly wage of $12 to $15 per hour; (no knowledge) m) the Worker Sandrine Abaziou was remunerated $100 per day for a work schedule of 8:30 AM to 5:00 PM; partial days were remunerated on a pro rata basis; (denied as written) n) the Appellant asked the Workers to submit bills for their remuneration; (admitted) o) the Appellant provided the Workers with premises, equipment, and furniture; (denied) p) the clients were the clients of the Appellant; (denied as written) q) the Appellant billed his clients and not the Workers; (admitted) r) the Workers were not at risk for financial loss in their duties for the Appellant; (no knowledge) s) the Workers' duties were fully integrated into the Appellant's operations. (admitted) 15. The Worker Muriel Dejean and the Appellant are related persons within the meaning of the Income Tax Act because: a) the Appellant is the spouse of Muriel Dejean. (admitted) [5] The Workers Lyne Dauphinais, Sandrine Abaziou, and Mélanie Demers testified, as well as the Appellant. The Worker Muriel Dejean did not appear at the hearing. [6] All three Workers completed tasks for the Appellant, but their working conditions were not all the same. In addition, after the parties submitted their evidence, the Appellant, in his oral submissions, conceded that he accepted the Minister's decision whereby the employment of Mélanie Demers, one of the three Workers, was insurable during the period in question, from January 1 to March 31, 2001. Lyne Dauphinais [7] The Worker Lyne Dauphinais denied that she looked after communications with clients, that she took messages, and that she managed the Appellant's schedule. In her testimony at the hearing, she stated that she carried out her work from home, though she did occasionally work at the Appellant's office. She estimated that she performed 70% of her duties from home. When the Appellant needed her services, he called her at home to assign tasks that she was free to accept or refuse. To carry out her duties, she used her own equipment in her office at home: her computer, her fax machine, her telephone and her legal-size paper, all at her own expense. When she worked at the Appellant's office, which the Appellant shared with other lawyers, she used an office and equipment provided by the Appellant. She occasionally wrote letters and performed other secretarial tasks, such as an appearance in a new case and communicating with the clerk in an urgent case. [8] The evidence revealed that the Worker had clients other than the Appellant to whom she provided similar services. When her work was done, she billed the Appellant. [9] The Worker stated that the Appellant sometimes paid her less than the amount on the bill, at a rate that he decided on, saying that the work completed was not worth the billed amount. She billed the Appellant at an hourly rate of $15. She specified that she was paid by the hour and according to the task assigned, provided that it was completed to the Appellant's satisfaction. The Appellant began telling her that the work completed was not worth the number of hours billed, so she accepted the amount set by the Appellant. It even occurred that she did not receive any payment for her work, because the Appellant redid the work himself. She added that when she had worked full-time, she had always been paid her salary unconditionally. [10] The Appellant never paid the Worker for the expenses involved in her work, nor did he give her any compensation for travelling. It was proven at the hearing that the Appellant never set a fixed schedule for the Worker or supervised her or her work. [11] The Worker confirmed that she had never told the insurability officer that she had a fixed work schedule. She added that she had never had to redo her work because she had been a legal secretary since 1989 and knew her field very well. The Worker has two children: a five-year-old who stays at home with her, and a six-year-old who goes to school. Sandrine Abaziou [12] This Worker carried out her duties for the Appellant from her office at home, where her computer was set up. She confirmed that she made her own work schedule. She sometimes went to the Appellant's office to get work. She gave the Appellant bills for work completed. Sometimes the Appellant paid her less than the billed amount, because he thought that the bills were too high. She confirmed that she was self-employed by choice. She is a Commerce student and carried out some duties for the Appellant from home (about 60%) and some at the Appellant's office (about 40%), where equipment was provided and expenses were paid by the Appellant. Occasionally, at the request of the Appellant, she had to make corrections to her work. [13] The Worker worked for the Appellant for a period of three months, mostly from her home. She confirmed that she could accept or refuse offers for work. She gave the Appellant bills for work completed. She had set her rate at $8.50 per hour, but she elaborated that she was also paid per task. The Appellant provided some models to follow in the preparation of documents and she also purchased, at her own expense, a forms manual for work purposes. [14] To assign tasks to the Worker, the Appellant called her and she came to his office, where he set the deadlines. The Worker never billed the Appellant for expenses arising from use of her computer. The evidence shows that the Worker could have offered her services to other clients. However, she denied that her work schedule was set by the Appellant. She was paid at a rate of $12 or $12.50 per hour, or $100 per day; she usually worked from 8:30 AM to 5:00 PM. Partial days were remunerated on a pro rata basis. Muriel Dejean [15] This Worker did not attend the hearing. She is the ex-spouse of the Appellant. At the hearing, the Appellant testified that his ex-spouse, a mother of two children, worked during the period in question, when she could, if not when she wanted to, because she was never in the office. "She was completely free," he said. According to his testimony, he had no control over her. He added that she did not have any secretarial training and that he would not have given her the same working conditions if she had not been his spouse. [16] The Appellant admitted that the Workers were hired as secretaries, except for Muriel Dejean, his ex-spouse. With regard to the employment of the latter, he wanted to elaborate that he had hired her to help out a little, among other things, to run errands. He added that if she had not been his spouse, she would never have gotten the same working conditions. In addition, according to the Appellant, the Worker was never in the office, being completely free, and he did not exert any control over her; she was a mother of two children and she worked when she could. [17] In his appeals reports (exhibits I-2 to I-5), the appeals officer reproduced the information that he had received from the Workers. For the most part, the information contained in the reports is the same, with a few exceptions. For example, in Lyne Dauphinais's report, the appeals officer specified that Ms. Dauphinais worked 15 to 20 hours per week. In addition, he specified that Sandrine Abaziou was also responsible for doing research, and that she used her own personal computer for that purpose. It is also noted that the Appellant did not provide any training for Muriel Dejean. [18] The Counsel for the Minister maintains that the version of the facts as given by the Workers has changed since the decision was made on the insurability of their employment. The Workers themselves indicated that the report of their statements to the investigators is inaccurate. According to them, the investigators did not express their questions clearly and did not report their statements exactly. [19] It is relevant to consider why the duties of the Workers were all described in the same way by the appeals officer, painted with the same brush, without nuance or distinction, while, as emphasized by the Appellant, "the subcontractors all worked in different ways." [20] As has been noted, the evidence submitted at the hearing proved the falsity of the Minister's assumptions as stated in paragraphs e), f), g), j), k), l), m), o), and r). [21] It has been shown that the circumstances surrounding the hiring of the Workers confirm an agreement between the Appellant and each of the Workers under which the Workers did not become employees as defined in the Act, which recognizes a relationship of subordination between employer and employee. [22] Furthermore, the facts submitted at the hearing and analyzed using the tests set out in Wiebe Door Services Ltd. v. M.R.N., [1986] 3 F.C. 553, lead to the conclusion that there existed between the parties a degree of autonomy that characterizes a contract for services. [23] In Charbonneau v. Canada(Minister of National Revenue - M.N.R.) (1996), 207 N.R. 299, the Federal Court of Appeal ruled that the tests set out in Wiebe Door, supra, be used only as points of reference. It should also be noted that the facts, in this case, apply the principle established in Vulcain Alarme Inc. v. The Minister of National Revenue (A-376-98, F.C.A.), according to which, in terms of control, control over the result or quality of the work should not be confused with control over its performance by the Worker responsible for doing it. [24] Abundant and preponderant evidence has shown that the Workers had ownership of the tools that they used in carrying out the majority of their duties for the Appellant, and that they used their own offices in their personal residences as well as the necessary equipment, at their own expense. The duties that they performed for the Appellant from his office were, according to the evidence, minimal. [25] The Workers stated that the Appellant often paid them less than their billed amount, based on his appraisal of their work. This situation does not arise when the parties have an employee-employer relationship where the employee receives his/her salary, as agreed on, even if the employer is not completely satisfied. In addition, in the present case, the Workers sometimes found themselves in a situation where they had a risk of loss. [26] Analysis of the evidence under the integration test, envisioned from the point of view of the Workers, could tilt the balance one way or the other. It is true that the Workers worked for the Appellant's business, but under an agreement that considered them to be self-employed. The Appellant and the Workers all described the relationship as such, and the facts support the conclusion in this case. [27] The Appellant maintains that the employment of the Worker Muriel Dejean, his ex-spouse, is not insurable. He is relying on the letter that he received from Francine Saucier, Coverage Officer for the Canada Customs and Revenue Agency, on December 2, 2002 (exhibit A-2), informing him that Muriel Dejean's employment was not insurable "given that there is a non-arm's-length relationship between yourself and Muriel Dejean," even though the appeals officer states the opposite in his report. [28] Regardless, in the cases of Muriel Dejean, Sandrine Abaziou, and Lyne Dauphinais, the Appellant succeeded in proving that the Minister's assumptions are false. [29] Furthermore, the evidence submitted by the Appellant concerning the working conditions of his ex-spouse was not disputed at the hearing. This evidence leads to the conclusion that substantially similar working conditions would not have existed between the Appellant and the Worker if the parties had been dealing with each other at arm's length. [30] Following analysis, this Court must conclude the following: 1. The Worker Mélanie Demers, for the period from January 1 to March 31, 2001, held insurable employment under the Act. Therefore the decision made by the Minister with regard to this Worker, given the Appellant's acquiescence at the hearing, is confirmed and the appeal is dismissed in this respect. 2. The Workers Lyne Dauphinais, for the period from September 1, 2001, to November 25, 2002, and Sandrine Abaziou, for the period from March 28 to September 30, 2001, did not hold insurable employment under the Act. Therefore the Minister's decision with regard to these two Workers is vacated and the appeal is allowed in this respect. 3. The Worker Muriel Dejean, for the period from January 1, 2001, to November 25, 2002, did not hold insurable employment. Therefore the decision made by the Minister is vacated and the appeal is allowed in this respect. Signed at Grand-Barachois, New Brunswick, this 21st day of December 2004. " S.J. Savoie " Savoie D.J. Translation certified true on this 29th day of March 2005. Colette Dupuis-Beaulne, Translator CITATION: 2004TCC822 COURT FILE NUMBER: 2003-3244(EI) STYLE OF CAUSE: Jean-François Goulet and M.N.R. and Lyne Dauphinais PLACE OF HEARING: Montreal, Quebec DATE OF HEARING: November 22, 2004 REASONS FOR JUDGMENT BY: The Honourable Justice S.J. Savoie, Deputy Judge DATE OF JUDGMENT: December 21, 2004 APPEARANCES: For the Appellant: The Appellant himself For the Respondent: Stéphanie Côté For the Intervener: The Intervener herself COUNSEL OF RECORD: For the Appellant: Name: Firm: For the Respondent: Morris Rosenberg Deputy Attorney General of Canada Ottawa, Canada For the Intervener: