Date: 20010221
Docket: 1999-4677-IT-I
BETWEEN:
FRANCE CHAMPEAU,
Appellant,
et
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
(Delivered orally from the bench on January 23, 2001 at Montreal, Québec and revised at Ottawa, Ontario on February 21, 2001)
Lamarre Proulx, T.C.J.
[1] These are appeals from reassessments made by the Minister of National Revenue (the "Minister") for the taxation years 1994 and 1995.
[2] These assessments were made on the assumptions of fact described at paragraph 26 of the Reply to the Notice of Appeal as follows:
a) the Appellant was a co-ordinator for the marketing division for Virtual Prototype Inc. (hereinafter "the employer");
b) the Appellant mentioned to our auditor that she was at first, hired as an employee of Virtual Prototype Inc. in 1993;
c) the functions and the remuneration of the Appellant remained the same throughout her employment with the employer;
d) the Appellant was working on day to day operations;
e) the Appellant was working under the supervision of the employer;
f) the Appellant was working full time for the employer;
g) the Appellant's duties have always been the same from the beginning of her employment for the employer;
h) the Appellant always had an office at the employer's place of business and she worked there;
i) the Appellant has never been employed by any other employer while she was working for the employer;
j) the Appellant has always been paid the same amount bi-monthly by the employer at the same time as the other employees;
k) the Appellant was reimbursed all employment expenses by the employer;
l) the Appellant had to complete a form to be reimbursed for her expenses;
m) the rate of the Appellant's wages has always been the same from the beginning of her employment for the employer;
n) during the audit, the representative of the employer had no explanation regarding any modification in the Appellant's status;
o) during the audit, the representative of the employer admitted that the Appellant was an employee of the employer;
p) the working conditions of the Appellant were similar to the other employees's working conditions with the employer;
q) based on the preceding sub-paragraphs, the Minister reasssessed the Appellant, among other things, as follows for the 1994 and 1995 taxation years;
Description 1994 1995
Employment earnings $51,516 $66,318
Net business income ($39,723) ($36,316)
Gross business income ($56,508) ($52,062)
r) In the employer's file, there was an audit relatively to the deductions at the source which originated from information received by Revenue Québec;
s) Danielle Houle, auditor for Revenue Canada, conducted the audit and rendered a decision based on the facts collected through the audit that she did;
t) While conducting her audit, Danielle Houle asked the Insurability Department of Revenue Canada an opinion as to the employment status of certain employees of the employer including the Appellant;
u) Ginette Paquette, agent de Participation RPC/A-C was assigned the file;
v) On July 4th, 1996, Ginette Paquette sent a letter to the Appellant asking her to contact Revenue Canada as soon as possible because of the fact that Ginette Paquette had not been able to reach the Appellant by phone relatively to her employment for the employer;
w) Ginette Paquette received no representations whatsoever from the Appellant or from a representative of the Appellant and she could not therefore render an opinion as to the employment status of the Appellant;
x) Danielle Houle then assessed the company based on the information that she had on file which she collected during her audit;
y) On July 8th, 1997, Paul Leduc of Revenue Canada completed a T133 from (Indices fiscaux ou renseignements concernant un projet) relatively to the Appellant stating that following an audit of the employer, Danielle Houle, auditor for Revenue Canada established that the Appellant's status should be changed to that of employee and thus the expenses for 1993, 1994 and 1995 should be refused;
z) Following that document, Karim Benahra, auditor for Revenue Canada, was assigned the Appellant's file to conduct an audit;
aa) On March 4th, 1998, Karim Benahra sent a letter to the Appellant with the proposed changes. He mentioned in the letter that the new assessments were delayed until March 26th, 1998 and that the Appellant could contact him if there were any questions;
bb) On March 11th and 17th, Karim Benahra spoke to the Appellant's representative. Nothing was said about the conditions of employment;
cc) On May 6th 1998, Karim Benahra sent a letter to the Appellant stating that the audit was completed. That letter also contained the proposed changes and a mention that the file would not be transferred to the Montreal Revenue Canada Office;
dd) The assessment under appeal for the 1994 taxation year was issued on May 21st, 1998;
ee) The Appellant filed a Notice of Objection dated August 10th, 1998, relatively to the assessment of May 21st, 1998;
ff) The Objection was handled by Alain Solliec, Appeals Agent for Revenue Canada;
gg) Representations by the Appellant's representative, Richard Venor, C.A., were done for the Appellant's file and Claire Champeau's file;
hh) The Appellant's representative refused to discuss the conditions of employment of the Appellant with Alain Solliec;
ii) The study of the Appellant's file was thus based on the information in the file;
jj) On July 14th, 1999, Alain Solliec called the representative. The latter stated he would send representations;
kk) On July 16th, 1999, a letter was sent by the representative to Alain Solliec which state opinions as to the actions of Revenue Canada;
ll) On August 19th, 1999, Alain Solliec met with the representative of the Appellant and of France Champeau. No representations were made relatively to the working conditions of both the Appellant and Claire Champeau.
mm) The Notice of Confirmation was issued on August 31st, 1999.
[3] At the hearing, the Appellant's representative informed the Court that the Appellant's only grounds for appealing were that the principles of natural justice had been contravened regarding the administration of the Employment Insurance Act. He also informed the Court that the Appellant was not present because she worked and resided in Scottsdale, Arizona and her presence was not needed in view of the grounds of appeal. He had not either requested the presence of an employer's representative. He stated that the Appellant had been entitled to file a notice of objection and to appeal under the Income Tax Act. His concern was the application of the principles of natural justice regarding the application of the Employment Insurance Act.
[4] Counsel for the Respondent made a motion that the case be dismissed for failure to bring forward the proper evidence. The motion was granted. Principles of natural justice regarding the administration of the Employment Insurance Act may be relevant regarding a decision on the insurability of employment made under that act. They are not relevant to an appeal from an assessment under the Income Tax Act. Whether a person is an employee or self-employed is a matter of fact and law. It is essential that evidence regarding the working conditions of the worker be adduced at the time of hearing. As there were no reasonable explanations for the failure to adduce the proper evidence and there was no intent to adduce such evidence, the appeals must be dismissed.
Signed at Ottawa, Canada, this 21st day of February 2001.
"Louise Lamarre Proulx"
J.T.C.C.
COURT FILE NO.: 1999-4677(IT)I
STYLE OF CAUSE: France Champeau and The Queen
PLACE OF HEARING: Montreal, Québec
DATE OF HEARING: January 23, 2001
REASONS FOR JUDGMENT BY: The Hon. Judge Louise Lamarre Proulx
DATE OF JUDGMENT: February 21, 2001
APPEARANCES:
Agent for the Appellant: Richard Venor
Counsel for the Respondent: Pascale O'Bomsawin
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
1999-4677(IT)I
BETWEEN:
FRANCE CHAMPEAU,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on January 23, 2001 and judgment delivered orally
from the bench on the same day at Montreal, Québec, by
the Honourable Judge Louise Lamarre Proulx
Appearances
Agent for the Appellant: Richard Venor
Counsel for the Respondent: Pascale O'Bomsawin
JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1994 and 1995 taxation years are dismissed.
Signed at Ottawa, Canada, this 30th day of January, 2001.
|
"Louise Lamarre Proulx" |
J.T.C.C.