Le Livreur Plus Inc. v. Canada (Minister of National Revenue)

Le Livreur Plus Inc. v. Canada (Minister of National Revenue) Court (s) Database Federal Court of Appeal Decisions Date 2004-02-13 Neutral citation 2004 FCA 68 File numbers A-663-02 Notes Digest Decision Content Date: 20040213 Docket: A-663-02 Citation: 2004 FCA 68 CORAM: DESJARDINS J.A. LÉTOURNEAU J.A. NADON J.A. BETWEEN: LE LIVREUR PLUS INC., 1600 Boulevard Curé-Labelle, Suite 210, Chomedey, Laval, Quebec H7V 2W2 Applicant and THE MINISTER OF NATIONAL REVENUE, 305 Boulevard René-Lévesque Ouest, Montréal, Quebec H2Z 1A6 Respondent and GEORGES LAGANIÈRE, 1029 30e avenue, Fabreville, Laval, Quebec H7R 4T9 Respondent Hearing held at Montréal, Quebec, on January 14, 2004. Judgment rendered at Ottawa, Ontario, on February 13, 2004. REASONS FOR JUDGMENT: LÉTOURNEAU J.A. CONCURRED IN BY: DESJARDINS J.A. NADON J.A. Date: 20040213 Docket: A-663-02 Citation: 2004 FCA 68 CORAM: DESJARDINS J.A. LÉTOURNEAU J.A. NADON J.A. BETWEEN: LE LIVREUR PLUS INC., 1600 Boulevard Curé-Labelle, Suite 210, Chomedey, Laval, Quebec H7V 2W2 Applicant and THE MINISTER OF NATIONAL REVENUE, 305 Boulevard René-Lévesque Ouest, Montréal, Quebec H2Z 1A6 Respondent and GEORGES LAGANIÈRE, 1029 30e avenue, Fabreville, Laval, Quebec H7R 4T9 Respondent REASONS FOR JUDGMENT LÉTOURNEAU J.A. [1] Was the employment of Patrick Duhaime and Georges Laganière insurable employment within the meaning of paragraph 5(1)(a) of the Employment Insurance Act, S.C. 1996, c. 23 (the Act)? In my humble opinion, the Tax Court of Canada deputy judge (the judge) wrongly answered this question in the affirmative. The decision may be located by the following reference: Livreur Plus Inc. v. Canada (Minister of National Revenue - M.N.R.), [2002] T.C.J. No. 579. [2] The Court has before it an application for judicial review in cases A-663-02 and A-664-02 to review this decision by the judge. After analysing the impugned decision, the record and the legal principles applicable in such matters, I have come to the conclusion, first, that the judge did not undertake an analysis of the facts in terms of the applicable rules of law, as he had a duty to do. He simply recited them and briefly concluded that the employment was insurable employment. This appears from paragraph 27 of his decision, which contains the gist of his conclusion and his justification for arriving at it: The facts stated above support the conclusion that the appellant controlled the work of these men and that it provided them with the work tools, with the exception of their own vehicles, which they used for their deliveries. All three of them received a weekly salary. In the performance of their work, they had no chance of making a profit and did not risk any loss. As for their work, it was totally related to or integrated into the appellant's business. This was followed by a statement of the law and approval of a decision by his Court regarding pizza delivery drivers, without any analysis of several other decisions relevant to the point at issue: Immeubles Jean Lacaille Inc. (Dan's Pizzeria) v. Canada (Minister of National Revenue - M.N.R.), [2000] T.C.J. No. 799. [3] In other words, although most, or at least several, of the relevant facts noted by the judge are apparently neutral and may support a conclusion of a contract of enterprise just as much as a contract of employment, the judge gave none of these facts the legal meaning required by the Act as interpreted by the courts. [4] Unfortunately, this is not the first time we have run into this problem with deputy judges of the Tax Court of Canada. We have expressed our criticism more than once. The time has come either to review their training or to assign the work they do to permanent judges of that Court. The point at issue is important in terms of the consequences for the parties, and the situation that exists is both costly and unfair. It is costly when this Court has to order a rehearing because of inadequate or non-existent justification for the decision, despite the duty to provide such justification imposed by Parliament, which has been ignored or misunderstood; and it is unfair when this Court must itself exercise first instance jurisdiction rather than that of review, thereby depriving one or other party of its right to review. [5] Second, I believe that the judge also misunderstood the law regarding the meaning and scope of the tests developed for distinguishing a contract of employment from a contract of enterprise, and hence insurable employment from that which is not insurable. [6] However, before examining these tests and the understanding of them by the judge and proceeding to characterize the facts at issue in light of the tests, I must list certain of the general facts and those alleged by the Minister in support of his decision. Discussion of the most specific facts will be undertaken in the context of analysing the contractual relationship between the parties. Facts [7] The applicant offers and provides a home delivery service for medication. It has concluded a contract of enterprise with several pharmacies to deliver the latter's products. To meet its obligations, it uses the services of some 20 to 30 delivery persons, with whom it has signed subcontracts. These delivery persons, including Messrs. Duhaime and Laganière, have no quarters at the applicant's premises. They do not have to go there in order to do their work, which involves collecting medicine from pharmacies, the applicant's customers, on a specific schedule which the applicant has undertaken to observe. [8] I set out below, as they stand, the three contracts which govern, first, relations between the pharmacies and the applicant, and second, between the applicant and its delivery persons: [TRANSLATION] SERVICE CONTRACT FOR DELIVERY OF PHARMACEUTICAL PRODUCTS BETWEEN LE LIVREUR PLUS INC. 1600 CURE LABELLE (S) 301 E CHOMEDEY LAVAL H7V 2W2 Party of the first part AND _PH_JEAN COUTU___________ _802_DECARIE_ET_2137_MARCEL LAURIN _H4L-3L9___________H4R-1K4 TL: 747-3521_________745-3003 Party of the second part This contract shall have No.: _632-01__604-01_ The party of the second part shall be identified under registration No.: __632-684______ and the person authorized to sign this contract on behalf of the party of the second part is _MR__EMAD__GABRA______________. It is agreed that: 1- The party of the first part undertakes to deliver pharmaceutical products of the party of the second part on the following conditions, from Monday to Friday at the scheduled hours of (632) 11-2-5-7 hrs (604) 10-1-4-6.30 hrs SATURDAY (632) 11-3.30 hrs (604) 12 hrs. 2- The word "delivery" means the place the branch has asked it to deliver an order or pick one up (a "labo" product, a prescription or an inter-br.). If there is an error in the address, the "delivery" will be billed automatically. A customer who gives a prescription on receipt of the delivery will be regarded as a single delivery. 3- Deliveries of over 4 km (driving) from the branch will be subject to an additional charge of $1.00 per 2 km segment. We ask you to give them before the last pick-up scheduled at your branch in order to provide our customers with better service. 4- There will be reduced service on legal holidays, with the last scheduled pick-up deleted (Easter Monday, Thanksgiving Day, Victoria Day, St-Jean Baptiste Day, Canada Day, Labour Day). 5- There will be no service on Christmas and on New Year's Day. Service on the day before those holidays will be as for a legal holiday. Service on the day following the holidays will resume at the second pick-up scheduled at your branch. 6- The service will be billed for as follows: A- $_20.00_____a week for the service B- plus $_2.50_____per delivery C- a minimum of _150_____will be required per week D- plus extras (km. if applicable) E- bills will be sent fortnightly (PAYABLE IN 2 WEEKS) ═ ═ ═ ═ ═ ═ ═ ═ ═ ═ ═ The service will take effect as of November __2___, _98___for a period of 52 weeks and will be renewable within ten days before the end of the term. * * * * * * * * * * * * * * * * * * * * CONTRACT FOR SUBCONTRACTOR BETWEEN: Le Livreur Plus Inc. 1600 Cure Labelle (s) 301 e Chomedey, Laval H7V 2W2 AND: PATRICK DUHAIME S. Ass. 267-366-235 1640 ST-GERMAIN p. cond D 5007-210869-03 MONTRÉAL Tel.: 597-0688 SUBCONTRACTOR It is agreed that the aforesaid subcontractor shall be responsible for making home deliveries of pharmaceutical products for pharmacies in the area assigned, Appendix A, on behalf of Le Livreur Plus Inc. He/she shall be responsible for the product and the money collected and account for the same at the assigned pharmacies on the same day. The subcontractor shall provide his/her car and be responsible for his/her expenses (gas, car repairs, meals). The subcontractor exempts Le Livreur Plus Inc. from any government deductions on payment for his/her subcontracting services and undertakes to make his/her own returns to the Governments of Quebec and Canada. A subcontractor who does not observe the weekly service contract (Monday to Friday) shall have his/her contract voided without notice: he/she shall be prohibited from competition for home delivery of pharmaceutical products to pharmacies. CLAUSE REGARDING NON-COMPETITION FOR CUSTOMERS OF LE LIVREUR PLUS INC. Cancellation of contract: the aforesaid subcontractor undertakes not to solicit or make deliveries or delivery service agreements directly or indirectly in the pharmaceutical field for a period of 24 months (2 years), subject to a penalty of $100.00 a day from the day of breach. This contract shall be valid as soon as he/she makes subcontract deliveries with Le Livreur Plus Inc. APPENDIX A From: Le Livreur Plus Inc. To: PATRICK DUHAIME Customers to be covered from Monday to Friday for home delivery. 632-634-636 With cooperative service between subcontractors for deliveries outside the area. If he/she cannot provide service he/she must arrange a replacement by a person authorized by Le Livreur Plus Inc. and be responsible for paying the replacement. NOTE: It is possible there will be customers added in the area and they will be part of this appendix. The delivery person undertakes to wear the label or uniform of Le Livreur plus Inc. and to be sober, clean and polite with customers. If for good reason the delivery person cannot agree with his/her customer he/she shall inform the office so as to have an agreed area. If there is any disagreement or any other reason between the Le Livreur Plus Inc. customer and the subcontractor and the latter no longer wishes to have the delivery service, the contract shall be void, but he/she shall observe the non-competition clause. The subcontractor shall be available from 10:00 a.m. to 9:00 p.m. and the minimum amount for a five-day week shall be $350.00 or on commission $1.50 per delivery plus $1.00 for each hour of service rendered during the five-day period. There shall be a two-week trial period from Already done to confirm the permanence of this contract; to cancel a contract notice of two weeks is required and the non-competition clause shall still be in effect. * * * * * * * * * * * * * * * * * * * * SUBCONTRACTOR CONTRACT BETWEEN: Le Livreur Plus Inc. 1600 Cure Labelle (s) 301 e Chomedey Laval H7V 2W2 AND: GEORGES LAGANIÈRE S.A.N. 1029 30e Ave Perm.Con. L 2564-240551-03 FABREVILLE Tel.: 450-962-3274 SUBCONTRACTOR It is agreed that the subcontractor (Georges Laganière) shall be responsible for making home deliveries of pharmaceutical products for pharmacies in the assigned areas . . . On behalf of Le Livreur Plus Inc., he shall be responsible for the product and money he collected and shall account for the same at the assigned pharmacies on the same day. The subcontractor shall provide his car and be solely responsible for all his expenses and disbursements connected with performance of the delivery contracts and, without limiting the generality of the foregoing, and in particular, gasoline, repairs, insurance, registration and maintenance of his automobile, meals, day-care costs . . . The aforesaid subcontractor acknowledges he is not an employee of Le Livreur Plus Inc., and so acknowledges he is not entitled to any right or benefit granted to employees pursuant to any federal, provincial, municipal or other legislation, and without limiting the generality of the foregoing, and in particular, he shall not be entitled to any vacation pay, paid holidays, retirement plan and pension of Le livreur Plus Inc., the Régie des Rentes du Québec, any insurance plan of any kind of Le Livreur Plus Inc., employment insurance benefits, industrial accident benefits or obligation to deduct for such benefits from his income. He undertakes to make his own returns to the Governments of Quebec and of Canada as a subcontractor. He may take whatever vacation he wishes provided he arranges for a replacement himself to be done while subcontracting. If there are one or more holidays in the week not worked, the minimum amount shall be reduced in proportion to the days worked. In the case of a subcontractor who cannot comply with the weekly service contract (Monday to Friday), the contract shall become void without notice, but the said contractor shall remain bound by the non-competition clause, as described hereinafter, for home delivery of pharmaceutical products at pharmacies. Non-competition clause: this clause shall be valid for the subcontractor and his replacements. In the event this contract ends, regardless of the reason, the aforesaid subcontractor undertakes not to solicit or to make deliveries or delivery service agreements directly or indirectly in the pharmaceutical field for a period of 24 months (2 years) from the end of the said contract in the Island of Montréal and City of Laval, subject to a penalty of $100.00 a day . . . This contract cancels any contract made with Le Livreur Plus Inc. prior to this date. The parties have read and understood this document and had an opportunity to consult independent legal counsel. [My emphasis.] APPENDIX A From: Le Livreur Plus Inc. To: GEORGES LAGANIÈRE Customers to be covered from Monday to Friday for home delivery. 101-104-110-124-610 With cooperative service between subcontractors for deliveries outside the area. If he cannot provide service he must arrange a replacement by a person authorized by Le Livreur Plus Inc. and be responsible for paying his replacement. NOTE: It is possible there will be customers added in the area and they will be part of this appendix. The delivery person undertakes to be sober, clean and polite with customers. If for good reason the delivery person cannot agree with his customer he shall inform the office so as to have an agreement. If there is any disagreement or any other reason between the Le Livreur Plus Inc. customer and the subcontractor and the latter no longer wishes to have the delivery service, the contract shall be void, but he shall observe the non-competition clause. The minimum amount for the five-day week is $412.00 or a commission of $1.76 per delivery for customers mentioned above. There shall be a two-week test period from Already done to confirm the permanence of this contract for 12 months, renewable ten days before the end. To cancel this contract notice of two weeks is required and the non-competition clause shall still be in effect. [9] Needless to say, certain of the obligations undertaken by the workers are the counterpart of those assumed by the applicant to its customers. I will return to this point below. Presumptions alleged by Minister [10] In case A-663-03, regarding Mr. Laganière, the Minister relied on the following facts in support of his decision: [TRANSLATION] (a) The appellant operates a specialized business providing home delivery of pharmaceutical products. (b) Deliveries are made seven days a week. (c) The appellant hires about 20 delivery persons, whom it regards as subcontractors. (d) The worker has worked for the appellant as a delivery person since October 1990. (e) From 1990 to April 2, 2001, the worker provided services to the appellant under a verbal agreement; on April 2, 2001, the worker and the appellant signed a contract of employment. (f) The worker had to work in an area set by the appellant. (g) The worker had to go and pick up orders at each pharmacy to which he was assigned at specific times established between the appellant and the pharmacy. (h) The customers were those of the appellant, and were billed by the appellant. (i) The worker had to submit an invoice to the appellant indicating the number of deliveries made and the value of products delivered. (j) The worker used his automobile and had to defray all the related expenses. (k) The appellant provided the worker with a two-way radio for a minimum amount. (l) According to the written contract, the worker received $1.76 per delivery made, with minimum guaranteed earnings of $412 a week, for five days' work. (m) The written contract of employment between the parties included a non-competition clause and held the worker responsible for the product and the money he collected. The record did not disclose which of these were admitted or denied by the applicant. Reference has to be made to the testimony. [11] Among the facts relied on in connection with Mr. Duhaime, the list of which appears below, the applicant admitted the presumptions set out in paragraphs (b) to (e), (g), (i), (k), (l) and (n). It denied those contained in paragraphs (f), (h), (j), (o) and (p), adding particulars in paragraphs (a) and (m): [TRANSLATION] (a) The appellant operates a specialized business providing home delivery of medication. (Particulars added) (b) The business has been operated since 1989. (Admitted) (c) Marcel Larose is the appellant's sole shareholder. (Admitted) (d) France Larose is the appellant's principal manager. (Admitted) (e) Deliveries are made seven days a week. (Admitted) (f) During the period at issue the business had 15 customers in Montréal and 4 in Laval. (Denied) (g) During the period at issue the worker acted as a delivery person for the appellant. (Admitted) (h) In addition to the worker, the appellant had some 20 delivery persons. (Denied) (i) The worker distributed the medications of three different pharmacies. (Admitted) (j) The worker's usual working hours were 10:00 a.m. to 7:00 p.m., Monday to Friday. (Denied) (k) The worker sometimes provided services on weekends. (Admitted) (l) The worker's pay amounted to $1.76 per delivery with a guaranteed minimum of $350 a week. (Admitted) (m) The appellant provided the worker with a transmitter radio for his vehicle. (Particulars added) (n) The worker provided his own vehicle and was responsible for all operating and maintenance costs. (Admitted) (o) In performing his work, the worker had to put a sticker bearing the appellant's name on his vehicle. (Denied) (p) When the worker had to be away from work, the appellant found him a replacement to provide the service and paid him directly. (Denied) Function of judge hearing appeal from Minister's decision [12] As already mentioned, the Minister assumed in support of his decision the existence of a number of facts obtained by inquiry from workers and the business he considered to be the employer. Those facts are taken as proven. It is for the person objecting to the Minister's decision to refute them. [13] The function of a Tax Court of Canada judge hearing an appeal from the Minister's decision is to verify the existence and accuracy of those facts and the assessment of them by the Minister or his officials, and after doing so, to decide in light of that whether the Minister's decision still seems to be reasonable: Légaré v. Canada (Minister of National Revenue - M.N.R.), [1999] F.C.J. No. 878; Pérusse v. Canada (Minister of National Revenue - M.N.R.), [2000] F.C.J. No. 310; Massignani v. Canada (Minister of National Revenue - M.N.R.), 2003 FCA 172; Bélanger v. Canada (Minister of National Revenue - M.N.R.), 2003 FCA 455. In fact, certain material facts relied on by the Minister may be refuted, or the view taken of them may not stand up to judicial review, so that because of their importance the apparent reasonableness of the Minister's decision will be completely destroyed or seriously undermined. [14] In exercising this function the judge must accord the Minister a certain measure of deference, as to the initial assessment, and cannot simply substitute his own opinion for that of the Minister unless there are new facts or evidence that the known facts were misunderstood or wrongly assessed: Pérusse v. Canada (Minister of National Revenue - M.N.R.), supra, paragraph 15. [15] The judge must make a legal analysis of the facts alleged by the Minister to determine whether they support the conclusion drawn by the latter from them. By this I mean that he must indicate how and why these facts establish, or tend to establish, the existence of a contract of employment rather than a contract of enterprise between the parties. Analysis of judge's decision 1. Applicable legal rules [16] I do not think there is any need to restate some of the legal rules which apply to the question of insurability of employment. A decision on that question involves a decision on the nature of the contractual relationship between the parties. [17] What the parties stipulate as to the nature of their contractual relations is not necessarily conclusive, and the Court may arrive at a different conclusion based on the evidence before it: D & J Driveway Inc. v. The Minister of National Revenue, 2003 FCA 453. However, if there is no unambiguous evidence to the contrary, the Court should duly take the parties' stated intention into account: Mayne Nickless Transport Inc. v. The Minister of National Revenue, 97-1416-UI, February 26, 1999 (T.C.C.). Essentially, the question is as to the true nature of the relations between the parties. Thus, their sincerely expressed intention is still an important point to consider in determining the actual overall relationship the parties have had between themselves in a constantly changing working world: see Wolf v. Canada, [2002] 4 F.C. 396 (F.C.A.); Attorney General of Canada v. Les Productions Bibi et Zoé Inc., 2004 FCA 54. [18] In these circumstances, the tests mentioned in Wiebe Door Services Ltd. v. M.N.R., 87 D.T.C. 5025, namely the degree of control, ownership of the work tools, the chance of profit and risk of loss, and finally integration, are only points of reference: Charbonneau v. Canada (Minister of National Revenue - M.N.R.) (1996), 207 N.R. 299, paragraph 3. Where a real contract exists, the Court must determine whether there is between the parties a relationship of subordination which is characteristic of a contract of employment, or whether there is instead a degree of independence which indicates a contract of enterprise: ibid. [19] Having said that, in terms of control the Court should not confuse control over the result or quality of the work with control over its performance by the worker responsible for doing it: Vulcain Alarme Inc. v. The Minister of National Revenue, A-376-98, May 11, 1999, paragraph 10, (F.C.A.); D & J Driveway Inc. v. The Minister of National Revenue, supra, at paragraph 9. As our colleague Décary J.A. said in Charbonneau v. Canada (Minister of National Revenue - M.N.R.), supra, followed in Jaillet v. Canada (Minister of National Revenue - M.N.R.), 2002 FCA 394, "It is indeed rare for a person to give out work and not to ensure that the work is performed in accordance with his or her requirements and at the locations agreed upon. Monitoring the result must not be confused with controlling the worker". [20] I agree with the applicant's arguments. A subcontractor is not a person who is free from all restraint, working as he likes, doing as he pleases, without the slightest concern for his fellow contractors and third parties. He is not a dilettante with a cavalier, or even disrespectful, whimsical or irresponsible, attitude. He works within a defined framework but does so independently and outside of the business of the general contractor. The subcontract often assumes a rigid stance dictated by the general contractor's obligations: a person has to take it or leave it. However, its nature is not thereby altered, and the general contractor does not lose his right of monitoring the results and the quality of the work, since he is wholly and solely responsible to his customers. [21] Finally, determining the value of the remuneration, defining the purpose sought or making payment for work by cheque or otherwise does not amount to controlling work, since these features exist both in a contract of enterprise and in a contract of employment: Canada (Attorney General) v. Rousselle et al. (1990), 124 N.R. 339 (F.C.A.). 2. Application of these principles to facts of case at bar (a) Intent [22] The contracts concluded between the applicant and the various pharmacies, and those signed between the applicant and the two delivery persons in question, clearly indicated that the parties intended to be governed by a relationship of the contractor/subcontractor type. No one at any time suggested that the various pharmacies who had their medication delivered to their customers by the applicant were the latter's employers, that a contract of employment existed between these parties, and hence insurable employment. [23] As regards the intent of the parties, as expressed in writing, I admit I have some difficulty understanding the reasons why the terms and responsibilities particular to a contract of enterprise, which are contained in the three contracts under review, could indicate independent performance in the applicant's contract and be transformed into a relationship of subordination in the contracts of the two delivery persons. It could only be so if the contract designated as a subcontract between the applicant and its two delivery persons is not really a contract of that kind because of what the parties actually did. This leads me to consider, first, the question of control which the applicant actually exercised over the two delivery persons. (b) Control [24] Counsel for the respondent mentioned a number of facts in support of her argument that the applicant exercised such control over its two workers that the only conclusion could be that a relationship of subordination existed between the parties. To begin with, she strongly emphasized the fact that the delivery persons were subject to obligatory hours of availability, each worked in a defined territory and they could not alter the work schedule without the applicant's authorization. [25] With respect, I do not think that these three first points are conclusive in determining the nature of the overall relationship between the parties or suffice to change the nature of what they stated in the contract. The reason is quite simple. Under its contract of enterprise, the applicant assumed specific obligations of time and space toward its customers, the pharmacies. As appears from the contract governing their relations, specific times and places for collecting and delivering medication were agreed on between the applicant and the pharmacies. These obligations are contained in part in the subcontract with the delivery persons. The specific nature of the duties and availability to carry them out are not the characteristic features of a contract of employment. A contractor who hires the services of subcontractors to perform all or part of the duties it has undertaken to perform for its customers in accordance with a schedule will identify and define what they have to do and ensure that they are available to do it: Charbonneau v. Canada (Minister of National Revenue - M.N.R.), supra; Vulcain Alarme Inc. v. The Minister of National Revenue, supra, at paragraph 4. Otherwise, on this basis, one would have to conclude that the applicant itself was an employee of the pharmacies, since it had to be available to serve them at the agreed times and on the agreed schedule. [26] The respondent submitted that there was also evidence of control exercised by the applicant over its delivery persons, first, in the obligation they had to file delivery reports. To that should be added the fact that the applicant checked with the pharmacies to ensure that the goods were indeed collected and delivered as agreed and to their satisfaction. [27] These two aspects relied on by the respondent are only evidence of control by the applicant of the result, a result for which it was responsible to its customers. It was established that the delivery reports were required for billing the applicant's customers so it could be paid, and by the applicant for paying its delivery persons, some of whom were paid by the volume of deliveries: see the contracts between the applicant and the pharmacies and the contracts between the applicant and the two delivery persons; see also the testimony in the record by the applicant in case A-664-02, pages 77, 85 to 87, 97 to 98, 108, 120 to 121, 151 to 152 and 157. Billing is still necessary in a contract of enterprise; and the creation of a procedure and system for billing does not as such indicate the existence of a relationship of subordination: see Vulcain Alarme Inc. v. The Minister of National Revenue, supra, at paragraphs 4 to 6. [28] Finally, the respondent saw a relationship of subordination in the fact that the applicant had control over the prices charged the pharmacies for deliveries, was responsible for handling complaints and exercised control over the choice of persons who could act as replacements for the delivery persons in the event of absence or inability to act. [29] It appears to the Court to be quite natural that the applicant would be responsible for negotiating delivery prices with the pharmacies and for handling complaints, since it is the applicant which contracted with the pharmacies and was responsible for the service to its customers. This Court came to this conclusion in Vulcain Alarme Inc. v. The Minister of National Revenue, supra. At paragraph 16 of that decision, it wrote: They were customers of the plaintiff who were being served by an independent contractor. It is quite natural that they would complain to the plaintiff of the quality of its product or the after sale service offered. [30] As to replacing a delivery person, it appeared from the subcontract that the duty of locating a replacement and paying him belonged to the delivery person himself. Moreover, the evidence was that Mr. Duhaime arranged to be replaced by a person he recruited himself through an advertisement in a newspaper: see Normand Grenier's testimony and the advertisement at pages 50, 137 and 138 of the applicant's record. The evidence also indicated that in such circumstances the applicant required that it be informed of the replacement's name so it could contact the latter if necessary and send him or her the messages received. However, it did not intervene in the selection of the replacement: see the testimony of Mr. Larose at pages 64, 65, 113 and 114 of the applicant's record. I see this clause of the subcontract and the evidence on this point as being rather a sign of independence than of a relationship of subordination: see Attorney General of Canada v. Les Productions Bibi et Zoé Inc., supra. (c) Ownership of work tools [31] According to the evidence in the record, three work tools were required for the performance of the work: an automobile, a radio transmitter with a telephone line and a pager. The radio enabled delivery persons to contact each other and the pharmacies they were serving. The pager facilitated contact with the delivery persons. [32] The radio transmitter and pager were provided to the delivery persons by the applicant at a rental charge of $5 weekly, but they were reimbursed this amount less tax at the end of the year if the equipment was kept in good working order. However, the delivery persons were responsible for the cost of the equipment if it was lost or stolen: see the testimony of Mr. Larose at page 126 of the applicant's record and of Réal Morin, a delivery person, at page 132. These two work tools belonged to the applicant. However, I do not think this is sufficient to give rise to the relationship of subordination required for the existence of a contract of employment between the parties in the case at bar. [33] The most important, most significant and most costly work tool was still the automobile. There was no dispute that this work tool was the property of the delivery persons. Overall, I think that in the case at bar the test of ownership of the work tools supports the intention stated by the parties that they were subject to a contract of enterprise. (d) Chance of profit and risk of loss [34] This analytical test clearly favours the applicant. I feel that the Minister misunderstood the impact that should be given to the fact that under their contracts the delivery persons enjoyed a minimum guaranteed income. This clause in the subcontract only corresponded to the contract concluded between the applicant and the pharmacies, which guaranteed the applicant a minimum number of deliveries weekly. The guarantee given to the applicant enabled it to make the contracts for delivery persons more attractive, as they had to invest in an automobile in order to perform the contract. That investment also carried with it the risk of loss. [35] On the question of profit and loss, the evidence was that the delivery persons' income rose or fell from one week to the next depending on the number of deliveries and exchanges the delivery persons could make between themselves. They were not entitled to paid leave, so that their income was affected if they decided to take a rest period. In such a case they had to find as subcontractors a replacement whom they would pay: see Mr. Laganière's contract. The fact that they could undertake subcontracting themselves is also a sign of a contract of enterprise. [36] The contracts and testimony established that the delivery persons were responsible for expenses associated with the use of their automobiles, namely depreciation, repairs, gasoline, insurance, registration, maintenance and so on. They thus incurred all the risks of loss and fluctuation in their income, especially in the event of an accident: Vulcain Alarme Inc. v. The Minister of National Revenue, supra, at paragraph 19. Moreover, in Canada (Attorney General) v. Rousselle et al., supra, this Court regarded as a significant element of risk consistent with a contract of enterprise, not a contract of employment, the cost of repairing a skidder assumed by the workers: see also 942259 Ontario Inc. v. The Minister of National Revenue, 97-890-UI, March 16, 1999 (T.C.C.); Mayne Nickless Transport Inc. v. The Minister of National Revenue, supra. [37] Finally, the delivery persons were personally responsible for loss of the medication they were delivering, the money they received from customers of pharmacies, and as already mentioned the communication equipment supplied by the applicant. Here again, they were exposed to a risk of loss. (e) Degree of integration [38] The degree of integration of workers into a business has to be assessed from the standpoint of the workers, not that of the business: 671122 Ontario Ltd. v. Sagaz Industries, [2001] 2 S.C.R. 983, at 1003. Doing so from the standpoint of the business nearly always leads unavoidably to the conclusion that the workers' activities were organized and programmed to suit the principal and overriding activity of the business. In other words, the workers' activities will always appear to be integrated into the business. [39] The question that has to be asked is as to who owns the business. The judge did indeed ask this question at paragraph 29 of his decision, but he never answered it and did not undertake any analysis of the point. [40] Part of the business operated by the applicant, that involving its relationship with the delivery persons, is in fact a business managing delivery services. Messrs. Duhaime and Laganière, for their part, each operate a business transporting or delivering the product. The former manages delivery services, the latter provides the said services by delivering the products. The delivery persons are free to accept or refuse offers of services made by the applicant. They are not bound by an exclusive service clause. The evidence in fact was that one of the delivery persons also delivered pizzas: see the testimony of Mr. Larose, applicant's record, page 69. [41] The delivery persons had no offices or premises at the applicant's location. They did not have to go to the applicant's location to do their delivery work: ibid., page 81. Together with the right to refuse or decline offers of services, these are factors which this Court has regarded as indicating a contract of enterprise or for services rather than one of employment: seeD & J Driveway Inc. v. The Minister of National Revenue, supra, paragraph 11. Conclusion [42] The respondent and the applicant both drew the Court's attention to additional facts disclosed by the evidence in support of their arguments. It is not necessary for me to discuss these, as for the most part they only add to the analysis already done. [43] If he had undertaken the analysis of the facts alleged and proven, I believe that the judge could not have done other than conclude that the assessment of the facts by the Minister or his officials was mistaken, that the Minister's decision was not supported by the evidence, and accordingly that it was unreasonable. [44] In view of the reasons stated and the analysis undertaken, I would allow the applications for judicial review in cases A-663-02 and A-664-02. I would set aside the decisions by the deputy judge of the Tax Court of Canada in each of these cases and I would refer the matter back to the Chief Judge of that Court or to a judge appointed by him to be again decided on the assumption that the appeals by Messrs. Duhaime and Laganière should be allowed, the Minister's decision reversed and the employment of these two gentlemen regarded as uninsurable employment. [45] I would award the applicant costs in both cases, but only one set of costs for the hearing of the two cases. A copy of these reasons will be filed in case A-664-02 in support of the judgment to be rendered. "Gilles Létourneau" J.A. "I concur. Alice Desjardins J.A." "I concur. M. Nadon J.A." Certified true translation Suzanne M. Gauthier, C Tr, LLL FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-663-02 STYLE OF CAUSE: LE LIVREUR PLUS INC. v. THE MINISTER OF NATIONAL REVENUE and GEORGES LAGANIÈRE PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: January 14, 2004 REASONS FOR JUDGMENT: LÉTOURNEAU J.A. CONCURRED IN BY: DESJARDINS J.A. NADON J.A. DATE OF REASONS: February 13, 2004 APPEARANCES: Robert Thibault FOR THE APPLICANT Nathalie Labbé FOR THE RESPONDENTS SOLICITORS OF RECORD: Robert Thibault FOR THE APPLICANT Laval, Quebec Morris Rosenberg FOR THE RESPONDENTS Deputy Attorney General of Canada Montréal, Quebec FEDERAL COURT OF APPEAL SOLICITORS OF RECORD DOCKET: A-664-02 STYLE OF CAUSE: LE LIVREUR PLUS INC. v. THE MINISTER OF NATIONAL REVENUE and PATRICK DUHAIME PLACE OF HEARING: Montréal, Quebec DATE OF HEARING: January 14, 2004 REASONS FOR JUDGMENT: LÉTOURNEAU J.A. CONCURRED IN BY: DESJARDINS J.A. NADON J.A. DATE OF REASONS: February 13, 2004 APPEARANCES: Robert Thibault FOR THE APPLICANT Nathalie Labbé FOR THE RESPONDENTS SOLICITORS OF RECORD: Robert Thibault FOR THE APPLICANT Laval, Quebec Morris Rosenberg FOR THE RESPONDENTS Deputy Attorney General of Canada Montréal, Quebec