INCOME TAX

Rebates received by appellant were shareholder benefits and were taxable

Appellant worked for company belonging to his father. Appellant and his brothers were sole directors and shareholders of company. During taxation years at issue company purchased life insurance for father of appellant as well as for appellant and his three brothers. Appellant received cheque by insurance company in 2000 for amount of $15,000 representing insurance rebate. Appellant did not claim amount of $15,000 on his income tax return. Appellant also received cheques from insurance company in 2002 for amounts of $8,430 and $34,630. Minister reassessed appellant and added to appellant’s income for 2000 and 2002 taxation year’s amounts of $15,000 and $43,060, respectively. Minister also assessed penalties in amounts of $1,816 and $4,972 for 2000 and 2002 taxation years. Appellant appealed. Appeal dismissed. Rebates received by appellant were shareholder benefits and were taxable. Rebates were too important to be considered a gift. There was gross negligence on part of appellant and penalties were justified in the circumstances.

Lapalme v. Canada (Aug. 25, 2011, T.C.C., Favreau J., File No. 2008-4008(IT)G) Reasons in French. 206 A.C.W.S. (3d) 628 (22 pp.).

EMPLOYMENT RELATIONSHIP

Legal tests to be applied to determine employment status were not considered

This was appeal and cross-appeal from judge’s decision varying assessments. Appellant engaged truck drivers to provide services to client. Respondent determined that 96 truck drivers engaged by appellant in 2002, 2003 and 2004 were employees. Respondent assessed appellant for premiums payable under Employment Insurance Act (Can.), and contributions payable under Canada Pension Plan. Appellant appealed. Judge divided workers into two groups. One group was made up of 43 drivers who had signed agreement with appellant and other group was 53 drivers for whom there was no evidence of written agreement. Judge concluded that 53 drivers were employees of appellant but other 43 drivers were not. Appeal allowed; cross-appeal dismissed. Judge did not err in considering two groups of drivers separately. Judge appeared to have considered that any driver who had signed one of 43 agreements was incorporated drivers but that finding was based on misapprehension of facts. Of 43 drivers who signed agreements only 2 were incorporated drivers. As result of judge’s approach to 43 drivers who had signed agreements, legal tests to be applied to determine whether they were employees were not considered. Agreement signed by drivers contained clauses that suggested common intention that driver would be engaged as person carrying on own business but other factors must be considered. Appellant did not supervise drivers. Drivers did not provide own trucks or equipment or bear any costs of operating trucks. Contracts provided right to driver to substitute another driver at own cost but there was no evidence that any driver exercised right. Drivers did not bear any financial risk related to any investment in trucks or equipment. Drivers did not bear any responsibility for investing in anything that was required to fulfill contractual obligations or for managing work. Drivers did not negotiate rates of pay. Factors, on balance, weighed in favour of conclusion that drivers who signed agreements with appellant were employees, in contradiction to intention clauses. With respect to remaining 53 workers who did not sign agreements, judge’s conclusion that drivers were not self-employed was reasonable. Judge did not make error of law or palpable or overriding error of fact.

TBT Personnel Services Inc. v. Canada (Sep. 22, 2011, F.C.A., Sharlow, Pelletier and Stratas JJ.A., File No. A-388-10) 207 A.C.W.S. (3d) 477 (19 pp.).

RIGHT TO COUNSEL

Police failed to fulfil duty to provide reasonable opportunity for accused to consult counsel of choice

Application to exclude evidence. Motorist observed accused swerving into lanes without signaling, causing motorist to change lanes to avoid a collision. Motorist phoned police. Accused ignored officer’s police lights and siren for almost a kilometer while officer mouthed and signaled to him to pull over. Once stopped, officer observed extreme odour of alcohol emanating from vehicle and that accused’s eyes were red and bloodshot. Accused was arrested for impaired driving. At station, officer phoned lawyer of accused’s choice and left message. Officer then phoned duty counsel. Accused repeatedly and forcefully asked to speak to his own lawyer. Duty counsel phoned back and accused spoke to duty counsel. Another call was placed to accused’s lawyer of choice. Accused provided sample of his breath 10 minutes later. Application granted. Accused’s rights under ss. 8 and 9 of Canadian Charter of Rights and Freedoms were not infringed. Officer had reasonable and probable grounds for arresting accused, based on extreme smell of alcohol in accused’s car when she opened door alone. Accused’s right to counsel of choice under Charter s. 10(b) was infringed. Police failed to fulfill their duty to provide reasonable opportunity for accused to consult counsel of his choice. Sarcastic and dismissive comments by officer undermined reasonable efforts. Accused’s right to instruct counsel was infringed when officer would not wait past approximately 10 minutes that had elapsed since second call to accused’s lawyer and in insisting that accused provide breath sample without providing reasonable explanation as to why he would not wait. To admit test results would bring administration of justice into disrepute.

R. v. Samatar (Oct. 7, 2011, Ont. S.C.J., Knazan J.) 97 W.C.B. (2d) 443 (17 pp.).

APPEAL

Nature of contract confirmed appellant was autonomous

Appellant sought revision of Minister’s decision that dismissed application for employment insurance. Minister affirmed that appellant was not employee for concerned corporation and worked as autonomous throughout his contract. Appellant claimed that employee status was not mentioned in job offer letter but was discussed personally with representatives of corporation. Appellant affirmed that activities were supervised and that corporation exercised control over him. Appeal not allowed. Absence of fixed working hours, control over appellant’s work and great flexibility to perform activity confirmed appellant’s status of self-employed. Court underscored that nature of contract, establishing prospective gains and losses, confirmed that appellant was autonomous.

Watzke v. M.N.R. (July 15, 2011, T.C.C., Miller J., File No. 2010-2371(EI); 2010-2372(CPP)) Reasons in French. 205 A.C.W.S. (3d) 980 (8 pp.).

STAY OF PROCEEDINGS

Application judge failed to consider prejudice caused to alleged contemnor

Both appellant and respondent sought same relief, namely that stay imposed by application judge be set aside and that matter be returned to him for decision based on record before him. While judge has inherent jurisdiction to control process before him, and inherent jurisdiction to adjourn or stay proceeding, that discretion must be exercised judicially, with regard to potential prejudice caused by adjournment or stay. Here, application judge failed to consider prejudice caused to alleged contemnor, which was entitled to prompt resolution of allegations against it, based on evidence parties chose to put before court. Appeal was allowed. Stay imposed by application judge was set aside and matter ordered returned to him for decision on basis of record before him.

Bremsak v. P.I.P.S.C. (Sep. 20, 2011, F.C.A., Dawson, Pelletier and Noel JJ.A., File No. A-160-11) 207 A.C.W.S. (3d) 262 (4 pp.).