97-414(UI)
BETWEEN:
MANGIT K. MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Adar Mangat (97-426(UI)) on November 6, 1997, at Vancouver, British Columbia, by
the Honourable Judge Gordon Teskey
Appearances
Counsel for the Appellant: Tim Clarke
Counsel for the Respondent: Elizabeth Junkin
JUDGMENT
IT IS ORDERED AND ADJUDGED that the appeal be dismissed and the assessments confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 25th day of November 1997.
|
"Gordon Teskey" |
J.T.C.C.
97-426(UI)
BETWEEN:
ADAR MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
Appeal heard on common evidence with the appeal of Mangit K. Mangat (97-414(UI)) on November 6, 1997, at Vancouver, British Columbia, by
the Honourable Judge Gordon Teskey
Appearances
Counsel for the Appellant: Tim Clarke
Counsel for the Respondent: Elizabeth Junkin
JUDGMENT
IT IS ORDERED AND ADJUDGED that the appeal be dismissed and the assessments confirmed in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada, this 25th day of November 1997.
|
"Gordon Teskey" |
J.T.C.C.
Date:19971125
Docket: 97-414(UI)
BETWEEN:
MANGIT K. MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
AND
97-426(UI)
ADAR MANGAT,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent.
REASONS FOR JUDGMENT
TESKEY, J.T.C.C.
[1] Both Appellants herein appeal assessments under the Unemployment Insurance Act (the "Act"). Both appeals were heard on common evidence.
Issue
[2] The only issue before me is whether the Appellants are employees within the terms of the Act and the regulation thereto. There is no dispute as to the amount of the assessments herein, only as to the liability thereof.
Facts
[3] Mangit K. Mangat is the wife of Adar Mangat ("Adar"), she knows nothing and totally relies upon her husband who looks after the whole taxi business and her accountant to prepare her income tax return. Her testimony cannot be accepted.
[4] For the purposes of these reasons, I will treat the two Appellants as one entity. The assessments are for unemployment premiums not collected and paid during the years 1993, 1994 and 1995.
[5] The Appellants in each of these years owned motor vehicles. During these three years, either one or both had arrangements with White Rock Surrey Taxi Ltd. ("White Rock") and Surdell Kennedy Taxi Ltd. ("Surdell") (the "Companies").
[6] Adar and Parangit Dhaliwal ("Dhaliwal"), the present President of Surdell gave conflicting testimony in part. Where there is a conflict, I accept the testimony of Dhaliwal.
[7] The Appellants held shares in White Rock and Surdell. In White Rock, each share allowed the holder thereof the use of one taxi licence for a motor vehicle. White Rock held some 35 taxi licences.
[8] In Surdell, one share allowed the holder thereof to own one half of a motor vehicle, if the other half owner of that motor vehicle held a share, then that motor vehicle was entitled to a taxi licence. If a shareholder held two shares, then that shareholder's motor vehicle would become a licensed taxi. Surdell's licence allowed it to have 50 taxis.
[9] Both White Rock and Surdell operated and functioned the same way. Both held taxi cab licences and operated dispatching services, advertised their taxi services both in the yellow and white pages of their respective telephone books. Both owned the communication equipment, the taxi fare meters and the top lights.
[10] The Appellants both paid to White Rock and Surdell a monthly fee for their dispatching services and also paid their prorated share of all advertising.
[11] In 1993 and 1994, both Appellants arranged for their own insurance on their taxis. In 1995, fleet insurance was purchased through the companies. Both Appellants were responsible for all maintenance and upkeep of their vehicle as well as the meters and radios.
[12] Both Appellants leased their vehicles to drivers that had to have the approval of the companies. The approval by the companies was only as to whether a proposed driver was properly licensed.
[13] The drivers had to return the vehicle at the end of each shift to the company offices full of fuel.
[14] Both Appellants filed their T1 income tax returns with a statement of business activities showing gross income and expenses such as fees, motor vehicle expenses, accounting and dispatch fees.
[15] The Appellants arranged directly their own deal with their drivers.
Analysis
[16] I am satisfied that the Appellants herein are in the same position as 715341 Ontario Ltd. The Federal Court of Appeal in 715341 Ontario Ltd. v. The Minister of National Revenue, [1993] F.C.J. No. 1064 (Q.L.) A-469-92when dealing with a factual situation for all intents and purposes identical to the facts herein, held that the owners of the taxi cabs were employers, pursuant to paragraph 12(1)(e) of the Unemployment Insurance Regulations. Leave to appeal this decision to the Supreme Court of Canada was refused.
[17] The Appellants herein are in the business of owning and maintaining taxi cabs which they lease to taxi drivers. Included with the vehicle rental is the services of White Rock or Surdell. The taxi drivers get a complete package from the Appellants when they lease a taxi cab from them.
[18] I do not accept the Appellants' argument that the Appellants were not the persons to be assessed the premiums, interests and penalties.
[19] Paragraph 17.1 of the Unemployment Insurance (collection of premiums) Regulations reads:
17.(1) The owner, proprietor or operator of a business or public authority that employs a person in employment described in paragraph 12(e) of the Unemployment Insurance Regulations shall, for the purposes of maintaining records, calculating insurable earnings and paying premiums under the Act and these Regulations, be deemed to be the employer of every such person whose employment is included in insurable employment by virtue of that paragraph.
[20] Mr. Justice Mahoney of the Federal Court Trial Division, sitting as an umpire under the Act in circumstances similar to this case, held that the owner of the motor vehicle was the proper person to be assessed in the decision of John Witwicki v. The Minister of National Revenue, released July 31, 1974.
[21] The Appellants were in business. They purchased shares in White Rock and Surdell which was necessary to obtain the use of a licence to affix to their vehicles. They also agreed to pay a monthly fee to these companies to provide dispatch services and obtain the benefit of its advertising. White Rock and Surdell were the necessary entities to allow persons owning a small number of cars to get into the taxi business. They can be described as a co-operative holding taxi cab licences.
[22] By buying shares in these companies, the Appellants were able to convert an ordinary motor vehicle into a taxi cab and by paying the monthly charges, the lessees of their cabs had access to dispatch services and the benefit of group advertising and a group fleet image. It was this whole package the drivers leased from the Appellants.
[23] The fact that the drivers collected the cash fares and turned over the visa charges to White Rock or Surdell, as they had the contract with Visa, Master Card, etc. was just another part of the services that these companies provided to the Appellants which was passed on to the drivers. The Unemployment Insurance Act gives the employer the right to deduct from wages the employees' portion of the unemployment insurance premiums. The fact that the money is going in the opposite direction is immaterial. The Appellants argue that White Rock and Surdell should have been assessed. If this argument was valid, both these companies would be in the same position. The drivers collected the money, turned over the lease amounts to either the companies and/or the Appellants. The Appellants herein are the employers, pursuant to Regulations 17(1) and 12(e), who had a duty to collect from the drivers their portion of the unemployment insurance premiums. This obligation is easily enforced.
[24] The appeals are dismissed.
|
"Gordon Teskey" |
J.T.C.C.
Ottawa, Canada,
November 25, 1997.
COURT FILE NO.: 97-414(UI)
STYLE OF CAUSE: Mangit K. Mangat and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: November 6, 1997
REASONS FOR JUDGMENT BY: the Honourable Judge G. Teskey
DATE OF JUDGMENT: November 25, 1997
APPEARANCES:
Counsel for the Appellant: Tim Clarke
Counsel for the Respondent: Elizabeth Junkin
COUNSEL OF RECORD:
For the Appellant:
Name: Tim Clarke
Firm: Bull, Housser, Tupper
Surrey, British Columbia
For the Respondent: George Thomson
Deputy Attorney General of Canada
Ottawa, Canada
COURT FILE NO.: 97-426(UI)
STYLE OF CAUSE: Adar Mangat and M.N.R.
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: November 6, 1997
REASONS FOR JUDGMENT BY: the Honourable Judge G. Teskey
DATE OF JUDGMENT: November 25, 1997
APPEARANCES:
Counsel for the Appellant: Tim Clarke
Counsel for the Respondent: Elizabeth Junkin
COUNSEL OF RECORD:
For the Appellant:
Name: Tim Clarke
Firm: Bull, Housser, Tupper
Surrey, British Columbia
For the Respondent: George Thomson
Deputy Attorney General of Canada
Ottawa, Canada