[OFFICIAL ENGLISH TRANSLATION]
2001-835(EI)
BETWEEN:
BINGO POINTE-AUX-TREMBLES INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on November 9, 2001, at Montréal, Quebec, by
the Honourable Deputy Judge J. F. Somers
Appearances
Counsel for the Appellant: Jasmin Picard
For the Respondent: Nancy Dagenais (Student-at-Law)
JUDGMENT
The appeal is allowed and the assessment is vacated in accordance with the attached Reasons for Judgement.
Signed at Ottawa, Canada, this 22nd day of November 2001.
|
"J. F. Somers" |
D.J.T.C.C.
Translation certified true
on this 3rd day of March 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20011122
Docket: 2001-835(EI)
BETWEEN:
BINGO POINTE-AUX-TREMBLES INC.,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
Somers, D.J.T.C.C.
[1] This appeal was heard at Montréal, Quebec, on November 9, 2001.
[2] By letter dated November 24, 2000, the Minister of National Revenue (the "Minister") informed the appellant of his decision that the assessment of January 7, 2000, for 1998 was varied and that the unpaid employment insurance premiums were reduced to $2,934.47.
[3] The Minister contends that the workers held insurable employment with the appellant within the meaning of the Employment Insurance Act (the "Act") in 1998 since the appellant and the workers were bound by a contract of service within the meaning of paragraph 5(1)(a) of the Act.
[4] Paragraph 5(1)(a) of the Act reads as follows:
5(1) Subject to subsection (2), insurable employment is
(a) employment in Canada by one or more employers, under any express or implied contract of service or apprenticeship, written or oral, whether the earnings of the employed person are received from the employer or some other person and whether the earnings are calculated by time or by the piece, or partly by time and partly by the piece, or otherwise;
...
[5] The burden of proof is on the appellant. It has to show on the balance of evidence that the Minister's decision is unfounded in fact and in law. Each case stands on its own merits.
[6] In rendering his decision, the Minister relied on the following assumptions of fact:
[TRANSLATION]
(a) the appellant was incorporated on October 28, 1996; (admitted)
(b) the shareholders of the appellant are Jean-François Clément and Pierre Bougie; (admitted)
(c) during the period in issue, the business operated a bingo hall and a snack bar on Sherbrooke Street in Pointe-aux-Trembles; (admitted)
(d) the appellant organized bingo games for non-profit organizations; (denied)
(e) the workers' duties were to sell bingo cards, call out the numbers and check the winners' cards; (admitted)
(f) while on duty, the workers who sold the bingo cards had to wear a sweater identifying them as the appellant's employees; (denied)
(g) the workers' work schedules were determined by the appellant; (denied)
(h) the workers were controlled and supervised by the appellant; (denied)
(i) during the period in issue, the workers were paid cash by the appellant's representative at the end of each evening; (denied)
(j) during the period in issue, the appellant made no source deductions for the workers in respect of employment insurance premiums or paid such premiums to the respondent. (admitted)
[7] Pierre Bougie, one of the appellant's shareholders, testified that the appellant was incorporated on October 28, 1996, and that Jean-François Clément and he were its shareholders.
[8] During the period in issue, the appellant operated a bingo hall and snack bar located on Sherbrooke Street in Pointe-aux-Trembles; the appellant in fact had a number of halls.
[9] This witness testified that the appellant purchased equipment and accessories for a snack bar in Pointe-aux-Trembles. With those assets, the appellant leased the premises and equipment to non-profit organizations.
[10] A sample sublease contract for the bingo games¾with regard to the premises located at 11980 Sherbrooke East, Montréal, Quebec¾was filed as Exhibit A-2. Again according to this witness, the appellant signed 10 leases in 1998.
[11] Paragraph 1.01 of the sublease reads as follows:
[TRANSLATION]
BINGO P.A.T. hereby leases to the LESSEE the premises located at 11980 Sherbrooke East in the City of Montreal, Province of Quebec.
[12] The appellant also leased equipment.
[13] Paragraph 3.01 of the said contract reads as follows:
[TRANSLATION]
The LESSOR hereby also leases to the LESSEE the following equipment:
. Furniture (tables, chairs)
. Office equipment
. Bingo equipment storage
. Premises (organizations' offices)
. Bingo equipment: boards, camera, television sets, screens, drawing machine, checker, etc.
. Equipment: general sound system, mini-system, internal communications
. General insurance
. Sécur Inc. deposit system and safe
. Telephones
. Maintenance and maintenance supplies (container, bags, etc.)
. Alarm linked to police station
[14] According to that contract, the lessee (the organization) had to produce its licence from the Régie des alcools, des courses et des jeux. The lessee undertook to comply with and operate its licence in accordance with all laws, regulations and rules imposed by the competent authorities respecting the holding of bingo events and, in particular, by the Régie des alcools, des courses et des jeux.
[15] The workers' duties were to sell bingo cards, call out the numbers and check the winners' cards. Pierre Bougie testified that the organization sold the bingo cards, called out the numbers and checked the winners' cards. The workers were paid by the organization. The list of organizations was filed as Exhibit I-1 and the list of workers as Exhibit A-4.
[16] The Act respecting lotteries and its rules impose obligations on bingo licence holders.
[17] Section 58 of the rules of that Act appearing in the October 8, 1997, edition of the Gazette officielle du Québec (Exhibit A-1) (129th year, no. 42) reads as follows:
A holder of an in-hall bingo licence is responsible for setting up and operating a bingo and, where his licence authorizes it, for selling instant-win tickets.
[18] Section 61 reads as follows:
The net revenues derived from a bingo event set up and operated under an in-hall bingo licence shall be established by deducting from the amount of the total sales of bingo paper the value of the prizes offered, the cost of hall services, the cost of bingo paper and the cost of the salaries of the personnel directly involved in the setting up and operation of the bingo, as well as the cost of the bingo equipment if they are paid by the holder of the bingo licence.
[19] According to Pierre Bougie, the organization operated the event in the evening under a bingo licence. That organization had to comply with the rules established under the Act respecting lotteries.
[20] According to the sublease contract (Exhibit A-2), the rent was determined as follows:
[TRANSLATION]
4.01 This contract to sublease the premises and equipment leased is made in consideration of a maximum weekly rent of FOURTEEN PERCENT (14%) of total sales, taxes included, to a maximum of $1,000.00 per event, taxes included, for the rental of the premises and equipment, as prescribed by section 62 of the R.A.C.J.
The weekly rent is determined accurately in accordance with a tariff schedule expressed in percentage of sales.
[21] According to this witness, the appellant's employees who operated the snack bar were identified by means of a sweater bearing the inscription "Bingo Pointe-aux-Trembles".
[22] The appellant gave the organizations different sweaters with the inscription "Bingo Pointe-aux-Trembles". Benoit Bougie, an employee of the appellant, testified that the appellant supplied a sweater to the organizations' employees in 1999 only, not in 1998.
[23] According to Pierre Bougie, the appellant made available to the organizations a manager who was paid by them.
[24] That manager managed the hall and ensured that the event operated smoothly. The organization determined the schedules. The manager found a salesman from the list provided by the organization to replace the person who was unable to report on any particular evening.
[25] Benoît Bougie stated that the appellant did not have the authority to dismiss a salesman or a host.
[26] Pierre Bougie and Benoît Bougie gave approximately the same testimony.
[27] Elaine Ruet, administrative director with 900-227 Québec Inc., did the appellant's accounting in 1998. She said there was no pay for the sellers and hosts who conducted the bingo games.
[28] Michelle Douville, whose name appears on the list of workers (Exhibit A-4), stated that she had been hired by the organization in 1998 and that her work had consisted in selling bingo cards.
[29] She declared that the manager, André Mercier, gave her her work schedule and that she spoke with him if there was a problem. She also said that the manager had found her a replacement when she was absent and added that the organization's representative and the manager managed the event.
[30] The evidence showed that the workers whose names appeared on the list of workers were employees within the meaning of the Act. The point for determination is who was the employer.
[31] The Minister alleges that the appellant was the employer, whereas the appellant's witnesses asserted that it was the organization at each event.
[32] While the evidence of the parties could have been more complete, the Court will rule on the facts as stated.
[33] The burden of proof was on the appellant. The facts on which the Minister based his decision must be considered true until proven false by the appellant.
[34] The appellant's witnesses were credible. There is no reason to doubt the truth of the facts. The testimony of the appellant's main witnesses, Pierre and Benoît Bougie, were more or less the same.
[35] Those two witnesses testified that André Mercier, manager and employee of the appellant, was placed at the organizations' disposal in order to ensure that the event ran well. According to Benoît Bougie, the manager did not have the authority to dismiss the workers and did not determine their schedule. The manager could assist by finding a replacement for a worker who was absent. It cannot be concluded from this fact that, by doing the organization a service, the appellant had control over the workers. The manager was only the appellant's representative, was at the organizations' service and was the one who had to ensure that the event ran smoothly.
[36] Elaine Ruet, who did the accounting, asserted that there was no pay for the sales people or hosts.
[37] Michelle Douville, the Minister's only witness, said that she had worked as a bingo card seller and that she had been hired by the organization. She said that she spoke to the appellant's manager if there was a problem, but it cannot be concluded from her explanation that the manager had control over the quality of that seller's work.
[38] In 1998, the appellant did not supply sweaters to the workers.
[39] The organization leased the room and the equipment from the appellant. The rental price was determined by a percentage less expenses.
[40] The organization holding the bingo licence, which conducted and administered the event in rented commercial premises must not in any way make the lessor responsible.
[41] Section 58 of the rules made under the Act respecting lotteries stipulates: "A holder of an in-hall bingo licence is responsible for setting up and operating a bingo and, where his licence authorizes it, for selling instant-win tickets."
[42] If the organization operates the bingo, it is normal for the sellers and administrators to be hired by it.
[43] Section 61 of those same rules determines the net income derived from a bingo event set up and operated under a bingo licence by deducting expenses including the salaries of the personnel directly involved in the setting up and operation of the bingo.
[44] The licence holder operates the bingo event. Workers must be hired for the operation of that event. This fact was corroborated by the Minister's witness, Michelle Douville, who stated that she had been hired by the organization.
[45] It was shown on the balance of evidence that the organization operating the bingo event was the workers' actual employer.
[46] Having regard to all the circumstances, the appellant and the workers were not bound by a contract of service within the meaning of paragraph 5(1)(a) of the Act.
[47] The appeal is allowed and the Minister's assessment is vacated.
Signed at Ottawa, Canada, this 22nd day of November 2001.
|
"J. F. Somers" |
D.J.T.C.C.
Translation certified true
on this 3rd day of March 2003.
Sophie Debbané, Revisor