Inge Roecker OP Asir Studio v. M.N.R.

Inge Roecker OP Asir Studio v. M.N.R.
Court (s) Database
Tax Court of Canada Judgments
Date
2010-05-04
Neutral citation
2010 TCC 230
File numbers
2009-2667(EI)
Judges and Taxing Officers
Dwayne W. Rowe
Subjects
Employment Insurance Act
Decision Content
Dockets: 2009-2667(EI)
2009-2668(CPP)
BETWEEN:
INGE ROECKER OP ASIR STUDIO,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
SENGSACK TSOI
Intervenor.
____________________________________________________________________
Appeals heard on common evidence on March 19, 2010
at Vancouver, British Columbia
Before: The Honourable D.W. Rowe, Deputy Judge
Appearances:
Counsel for the Appellant:
Michael W. Hunter, Q.C.
Counsel for the Respondent:
Amandeep K. Sandhu
For the Intervenor:
The Intervenor himself
____________________________________________________________________
JUDGMENT
In accordance with the attached Reasons for Judgment, both appeals are allowed and the decisions of the Minister of National Revenue – both dated July 28, 2008 – are hereby varied to find that:
- Sengsack Tsoi was not engaged in either insurable or pensionable employment with Inge Roecker Op. Asir Studio from January 1, 2007 to February 1, 2008.
Signed at Sidney, British Columbia this 4th day of May 2010.
“D. W. Rowe”
Rowe D.J.
Citation: 2010 TCC 230
Date: 20100504
Dockets: 2009-2667(EI)
2009-2668(CPP)
BETWEEN:
INGE ROECKER OP ASIR STUDIO,
Appellant,
and
THE MINISTER OF NATIONAL REVENUE,
Respondent,
and
SENGSACK TSOI,
Intervenor.
REASONS FOR JUDGMENT
Rowe, D.J.
[1] The Appellant - Inge Roecker - (“Roecker”) appealed from two decisions issued by the Minister of National Revenue (the “Minister”) on May 21, 2009 wherein the Minister decided Sengsack Tsoi was employed under a contract of service during the period from January 1, 2007 to February 1, 2008 and that said employment constituted both employable and pensionable employment pursuant to the relevant provisions of the Employment Insurance Act (“EIA”) and the Canada Pension Plan (the “Plan”), respectively. Counsel for the Appellant and counsel for the Respondent and the Intervenor - appearing on his own behalf - agreed both appeals could be heard together.
[2] Counsel for the Appellant - with the consent of counsel for the Respondent and also of the Intervenor, filed a Brief of Documents – tabs 1 to 21, inclusive – as Exhibit A-1. Unless otherwise specified, reference hereafter to any document(s) at a particular tab will indicate their location within said exhibit.
[3] Inge Roecker testified she is an architect and has been a Professor in the School of Architecture at the University of British Columbia (“UBC”) since 2003. The academic term is from September to May and once a student attains a Master of Architecture (“MArch”) degree, he or she must spend 3 years working in the profession and then obtain a passing grade on an examination to be eligible for registration with the Architectural Institute of British Columbia (“AIBC”). Roecker stated that this period between graduation and registration with that professional association is often spent in research and she was pleased to create opportunities for some students. Roecker is not currently registered with AIBC but is registered with the governing professional body in Germany where – during the annual academic hiatus – she carries on an architectural practice under the name Asir architekten (“Architekten”) and designs buildings with the assistance of partners and consultants in an office located in Stuttgart. In Vancouver, Roecker also carried on a business – Asir Studio – as a sole proprietorship which provided architectural and interior design services, including research relating to design, and design consultation on urban planning, and drafting. In 2003, Sengsack Tsoi (“Tsoi”) – pronounced Choy – was a student at UBC in the 3-year Master program. He had a Bachelor of Landscape Architecture (“BLA”) which met the criteria of an undergraduate degree required as a condition of enrolment. During Tsoi’s course of study at UBC, he worked in Roecker’s office in Stuttgart. Roecker was referred to tab 1, a document titled: Invoice for Services – dated December 18, 2006 – which was submitted to UBC by Tsoi in the amount of $3,000 relating to services rendered by him from November 15 to December 15, 2006 in relation to a project – Hampton Grant – which was funded by UBC for the creation of a three-dimensional (“3-D”) visualization tool as a system for recording, storing, analyzing and managing building information pertaining to the area known as Chinatown in Vancouver. This community-based website would allow users to submit interactive inquiries regarding the historical data and to display it in 3-D. Roecker stated she persuaded UBC to allocate the sum of $28,000 to the Hampton Grant. A consultant with computer 3-D expertise was retained for the project and Tsoi was engaged to conduct certain research. Roecker stated UBC inquired whether Tsoi’s invoice – tab 1 - was appropriate and after receiving her approval, paid Tsoi. Roecker stated that her proprietorship – Asir Studio – did not have any connection with the Hampton Grant project. As a professor, Roecker had an office at UBC but Asir Studio did not have any office space except in Roecker’s residence and Tsoi worked from that workplace using his personal laptop as a primary tool. Another invoice – tab 2 – in the sum of $3,000 – was submitted to UBC by Tsoi on February 7, 2007, for services rendered on the Hampton Grant project for the period from January 7 to February 7, 2007 and was paid by UBC. On March 11, 2007 – Tsoi submitted an invoice – tab 3 – to UBC – in the sum of $2,017.22 – composed of a flat rate charge of $1,500 in respect of “deliverables” and for disbursements in the sum of $517.22 for printing, film developing and scanning and book resources. A further invoice – tab 4 – dated June 11, 2007 – in the sum of $2,000 - was sent by Tsoi to UBC for services rendered on the Hampton Grant project from May 1, 2007 to June 11, 2007. These invoices – tabs 3 and 4 – were paid by UBC. In each of the invoices submitted by Tsoi to UBC, the amount billed was inserted under the heading: Contract Type: Flat Rate. Roecker was referred to an invoice – tab 5 – dated April 30, 2007 – in the sum of $3,000 – submitted by Tsoi to Asir Studio for “additional services” rendered on the Hampton Chinatown project during the period April 1 to April 31, (sic) 2007. Roecker stated the Hampton Grant funds had been exhausted at that point and knowing that UBC would not pay any further invoices, decided to pay Tsoi for his work during that period. She stated that although she could not receive reimbursement from UBC, that it was not unusual for a professor to use personal funds to continue with a research project as – usually – it was very difficult to obtain an extension of funding. Roecker was referred to an invoice – tab 6 – dated May 30, 2007 – submitted by Tsoi to Asir Studio seeking payment of a “Contract Amount” in the sum of $1,500 for services rendered in relation to the preparation of an AIBC portfolio binder for architectural registration designed to enable foreign-trained architects to obtain AIBC registration. Roecker identified this work as personal since there is a requirement that a professor publish work within his or her discipline, and paid the amount requested. Roecker stated she also paid Tsoi the amount billed – $3,000 – in an invoice dated June 30, 2007 – tab 7 – for services described therein as “Additions and modifications to the Asir studio website and Asir studio drawings and photos for publication”, performed between June 1 and June 30. Roecker stated the Asir Studio computer was a Macintosh so the work was performed by Tsoi on his laptop. The invoice – tab 8 – dated July 30, 2007 – was directed by Tsoi to Architekten at an address in Stuttgart and requested payment in the sum of 3,003 euro. The amount due was stated under the heading: Contract Type: Flat Rate and was comprised of the sum of 2,103 euro for services rendered from July 1 to July 30, 2007 in connection with a 3-D site models and perspectives on two projects, a factory and a parkade and 900 euro for expenses. Roecker stated the expenses probably related to Tsoi’s purchase of his Vancouver-to-Stuttgart airline ticket and pointed to the entry – identified by a check mark – in her bank statement – page 4 of tab 8 – indicating payment of 3,003 euro was made through her German business account on July 30, 2007. A further invoice – tab 9 – dated September 14, 2007 – was submitted by Tsoi to Asir Studio in Vancouver for the period from September 1 to September 15, 2007. The invoice requested payment in the sum of $1,500 CAD pertaining to a Grant Writing Workshop and to Hotel Beijing Preliminary Research. Roecker stated she paid Tsoi to attend that seminar where he could receive instruction on how to apply for funding on certain research projects, particularly a Centre for Urban and Regional Affairs (“CURA”) grant. A portion of that invoice pertained to preliminary work on the Beijing project. An invoice – dated September 1, 2007 and in the sum of $3,000 – tab 10 – was submitted by Tsoi to Asir Studio and pertained to services rendered from August 1 to August 27, 2007 relating to research and background material for a Social Sciences and Humanities Research Council of Canada (“SSHRC”) – pronounced Shirk – grant. Roecker stated the SSHRC grant was obtained through UBC and those funds went into the UBC research account and the invoice, although directed to: Inge Roecker, University of British Columbia - was paid by UBC. Her only connection with said grant was in her role as a Professor of Architecture. Roecker stated the invoice – tab 11 – dated September 1, 2007 – in the sum of $600 – was directed by Tsoi to Roecker – personally – at her home address and pertained to certain services provided between August 28 and August 31, 2007, including video editing and setting up projecting equipment and preparing files for presentation. Roecker stated the video project as described in the invoice under: Details, was to facilitate her teaching and was not funded by UBC nor did it have any connection to Asir Studio. Roecker stated the invoice – tab 12 – in the sum of $2,000 and dated September 30, 2007 – for services rendered by Tsoi from September 17 to September 30, 2007, related to a submission for SSHRC’s CURA grant. The invoice was directed to her personally and she paid it since it had no connection with either UBC or Asir Studio. The invoice – tab 13 – for $4,000 in total and dated December 31, 2007 – pertained to services – $3,000 – rendered on the Hotel Beijing Project between November 1 and November 30, 2007 and expenses in the sum of $1,000. Roecker stated this invoice should have been submitted to her business – Architekten – in Stuttgart – but she paid Tsoi and obtained reimbursement from that unincorporated Germany entity. The work performed by Tsoi had no connection with Asir Studio, Vancouver. The invoice – tab 14 – in the sum of $3,000 – also dated December 31, 2007 – pertained to services performed from December 10 to December 30, 2007 on the Hotel Beijing project. Roecker stated she paid this invoice personally and obtained reimbursement from her business in Germany. Roecker stated she received an invoice – tab 15 – from Tsoi – dated April 10, 2008 – directed to: Inge Roecker, Principal Asir studio, which sought payment in the sum of $1,704.65 for Goods and Services Tax (“GST”) at the rate of 6% based on the total supply of consulting services in the total sum of $28,400.85 during 2007. At the bottom of the invoice, Tsoi included his GST registration number and a business number issued by Canada Revenue Agency (“CRA”) and – just above the salutation and signature – added the phrase, “Your business is appreciated.” Roecker stated she received another invoice – tab 16 – dated April 10, 2008 wherein Tsoi requested payment of the sum of $150 attributable to the applicable GST – 5% – on the total amount of $3,000 billed by him for services rendered between January 1 and January 30, 2008. Roecker identified an invoice – tab 17 – dated April 4, 2008 wherein Tsoi purported to bill her for various items. The invoice is reproduced in Appendix A.
[4] Roecker stated there had been no amount charged for GST on any previous invoice submitted by Tsoi and that there had been no agreement to pay any so-called late charges. She sought some advice from her Chartered Accountant and declined to pay those invoices – tabs 15, 16 and 17 – and did not understand why Tsoi purported to bill her for $2,915, including $165 for GST – based on 55 hours work – performed for an entity described as Living lab. (hereinafter referred to as Living lab without the “.”) nor did she understand why Tsoi billed a total of $2,650 – including $150 GST – for alleged additional work done on the Hotel Beijing project since there had never been any agreement in that respect as she understood that all work performed by Tsoi in that regard had been billed earlier and paid in full. Roecker stated she had not agreed to pay a 4% “Administration Fee” included by Tsoi in his April 4, 2008 invoice.
[5] Roecker was cross-examined by counsel for the Respondent. Roecker stated she has a business licence from the City of Vancouver to carry on the business of Asir Studio. She stated that with respect to the research grants, even though the work performed by Tsoi was in accordance with UBC guidelines, he had no other connection with the university. He had graduated from the School of Architecture in 2006 and was no longer a student. Roecker described the office at her residence as suitable for carrying out small projects and it was equipped with a computer and appropriate design software. Currently, Asir Studio operates from an office in Vancouver. Roecker stated she did not actively market Asir Studio but obtained some work through various contacts. Business cards were designed by Tsoi in the names of: Living lab and Asir architeckten – Exhibit R-1 – by Tsoi at Roecker’s request. Roecker stated the business entity Living lab had no connection with Asir Studio and believed the business card had been created for a specific purpose or event. Architekten had a website and a printout – Exhibit R-2 – which listed certain members of Staff (“Mitarbeiter”) – including Tsoi – whose picture appeared on the page together with his e-mail address at Asir Studio in Vancouver. Roecker stated that following Tsoi’s graduation in 2006, she requested him to accompany her to an exhibition in Berlin. In Vancouver, she assigned certain work to him and Asir Studio had a business relationship with other architects. There was no office staff and another recent graduate worked in the office in her residence and both she and Tsoi had a key. Tsoi used his laptop and was retained to perform specific tasks and was not required to perform any office duties such as cleaning or filing or to perform other duties not directly connected with his own work. Roecker stated the UBC Hampton Grant had a limit on the billable hourly rate – which she cannot recall – but the allotted funds were exhausted when Tsoi submitted an invoice – tab 5 – in the sum of $3,000 for additional work done in April, 2007. As a result, she paid Tsoi with her own funds. With respect to other projects, she adopted the policy of paying his invoices before she had been paid by the user/client as – sometimes – she had to wait up to 6 months for payment. Roecker stated that when Tsoi provided his services, she made an initial estimate of the time required to perform a specific task or to achieve a particular result but the total amount of remuneration to be paid was fixed and clearly stated. Regarding the invoice – tab 8 – Tsoi worked in Roecker’s Stuttgart office for a month-and-a-half and was provided with accommodation. Tsoi – who is fluent in Mandarin – travelled to Beijing with one of Roecker’s German business associates and met with clients there. Roecker stated Tsoi was expected to perform his services personally throughout the course of their working relationship but – after the fact – discovered he had hired other people – on occasion – to help him meet a deadline. Roecker stated the first reference to GST was contained in Tsoi’s invoice – tab 15 – dated April 10, 2008 – and that was followed by other invoices which also included GST. Counsel referred Roecker to a worksheet – Exhibit R-3 –apparently prepared from a German-language template – which appeared to contain certain details about work performed on various projects. Roecker stated she was not familiar with that document nor with the description of work and noted the lack of any entry in the column – Kontrolle – which would normally indicate someone involved in Architekten had approved those billable items. Roecker stated Tsoi was not a partner in any of her business ventures during the relevant period but may have become a partner in the Living lab project. Roecker stated she retained the right to Tsoi’s entire work product but he was permitted to include it in his portfolio for personal marketing purposes. Roecker denied having paid Tsoi 3 weeks – or any – vacation pay and cannot recall any bonus of $100 or any other amount. Roecker was referred to a greeting card – Exhibit R-4 – expressing best wishes for the holiday season and the New Year which was printed in English, German and Mandarin. It included the names of Roecker, 3 associates from Stuttgart and Tsoi, and contained contact information for both Asir Studio and Architekten. Roecker stated the card was sent to people with whom she had business dealings throughout the year. In her view, it was important for young architects to receive public acknowledgment for having worked on a project and she adhered to this concept as a matter of policy. Roecker had a partner in the Living lab project but was a sole proprietor of Asir Studio. She stated Tsoi never requested that she issue him a T4 slip.
[6] Roecker was cross-examined by the Intervenor, Tsoi. Roecker acknowledged that as a professor, she is aware of the abilities of her students and when opportunities arise from time to time for work that is more interesting, she seeks out students or recent graduates with special expertise. When contracted to perform specific tasks, workers can utilize any work product provided credit is attributed to all participants.
[7] Counsel advised the Appellant’s case was closed.
[8] Sengsack Tsoi was called to the stand by counsel for the Respondent. Tsoi stated he is a designer living in Vancouver. He has a BLA degree and received his Master’s degree in architecture in January, 2006. Although he is currently employed by an architect, he is not a member of BCIA nor is he seeking such registration. Tsoi stated that while a student in the Master program, he worked for Roecker at her Stuttgart office for 3 months during the summer of 2005. Following graduation in 2006, he went to Ontario but in February or March received a call from Roecker to do some work in connection with an exhibition in Berlin. He accepted – verbally – and performed most of the required work at Roecker’s in-home Asir Studio office. Tsoi stated that after the exhibition, Roecker asked him to work on a full-time basis on projects in Vancouver through the auspices of either Asir Studio or UBC or Roecker’s German office. Tsoi’s understanding of the arrangement was that he would be paid the sum of $2,500 per month – later increased to $3,000 – and that he would work 5 days a week from 9 a.m. to 5 p.m. to earn the relevant base amount. He stated that he often worked many extra hours. Tsoi acknowledged there was no discussion with Roecker about his working status but there were references to his “career”, and to “opportunity” and to “growth” in the context of being included in Roecker’s future projects. Roecker assigned him specific tasks to perform in relation to a particular project. Tsoi stated he did not pay attention to his status during the working relationship, although he thought he was “probably an employee” and that the concept of an independent contractor did not “cross my mind.” Tsoi created a website detailing his academic work performed while studying at UBC. At Roecker’s request, he designed the business cards – Exhibit R-1 – and understood that all entities – Asir Studio, Architekten and Living lab were operated by Roecker but for different purposes. In his opinion, Asir Studio and Living lab were the same business. Tsoi stated he drafted an invoice – tab 8 – in euro because Roecker requested it. All other invoices were billed in Canadian dollars. Tsoi stated there was substantial overlap in the application of his efforts and even when in Germany, had performed services in relation to Vancouver projects. During the relevant period, Tsoi stated he performed a variety of duties for Roecker including answering the office telephone and responding to matters relating to the business of Asir Studio. He had a key to Roecker’s house and arrived at work between 9:00 and 9:30 in the morning. He did not have a permanent residence until September, 2007 and either lived with friends or stayed in a room in Roecker’s residence. With respect to tools and equipment, Tsoi stated the Stuttgart office was well-equipped and the Asir Studio workspace had a desk, chair, two printers, computer, and wireless Internet access but he used his laptop which he had owned while a student at UBC. At one point, the laptop needed extensive repairs and Roecker paid approximately $1,000 to fix it because she needed to retrieve stored data. During the interim, Tsoi used the Asir Studio computer. Tsoi stated he usually met with Roecker nearly every Tuesday to discuss the week and received a list of tasks created by her that he was to perform. The Hotel Beijing project was larger in scope and required more meetings with periodic reviews of his work. Tsoi stated the intellectual concept belonged to Roecker. Tsoi stated he was kept busy by Roecker even when not devoting his time and efforts to a specific project. With respect to the Chinatown project funded by the Hampton Grant, Tsoi acknowledged that his invoices – tabs 1-4, inclusive – were paid by UBC and that the university issued him a T4 slip indicating the usual source deductions had been made. With respect to that particular funding, Tsoi stated that a person with 3-D expertise had to be hired at a price which reduced the amount remaining to be paid to himself and Katya, another worker. Tsoi stated he knew those grant funds were used up when he submitted an invoice – tab 5 – to Asir Studio for work done during April, 2007. Throughout the relevant period, Tsoi stated he submitted invoices to whatever entity Roecker requested and provided therein details of work done and amounts owing – including expenses – if applicable. Tsoi stated he did not work for two weeks at one point but still received payment of $3,000 for that month and received the sum of $100 from Roecker together with a Christmas card. Tsoi stated he registered for GST purposes after obtaining advice because his accounting/tax consultant advised that he appeared to have been a self-employed consultant while providing his services to Roecker’s businesses. On the other hand, since he had been reimbursed for his expenses – even though some repayments of small amounts for office supplies were not shown on some invoices – the consultant also expressed the opinion that he may have been an employee. Tsoi stated he decided to send further invoices – tabs 15, 16, 17 – to Roecker in which he charged GST on the amount requested for services rendered previously. When he did not receive payment from Roecker nor any response whatsoever, he decided to seek clarification of his working status and requested a ruling which he received – tab 18 – on July 28, 2008 – informing him that he was an employee of “Inge Roecker op. Asir Studio for the period from January 1, 2007 to February 1, 2008” and that he was engaged in both insurable and pensionable employment. Subsequent to said ruling, Tsoi stated he requested Roecker provide him with a T4 slip but she refused on the basis he was not her employee. Tsoi stated he had no investment in any of the businesses carried on by Roecker and could earn additional revenue only through negotiation with Roecker depending on the project or task.
[9] Tsoi was cross-examined by counsel for the Appellant. Counsel referred Tsoi to the invoice – tab 17 – wherein he billed – inter alia – Asir Studio for additional work performed during 2007. Tsoi agreed that – in 2008 – when submitting invoices to Roecker, he considered he was doing so as an independent contractor/consultant and that Roecker probably accepted this characterization. However, subsequent to receiving written materials from CRA and examining the various criteria discussed therein, he decided to obtain a ruling. On further reflection, Tsoi stated he considered he had been an employee during the relevant period but did not know what Roecker thought at that time about this working status. Tsoi stated he is 32 years old and has had summer jobs where he was an employee where he worked regular hours, was paid every two weeks, and had usual source deductions from his pay cheques. In those jobs, he completed time sheets and submitted them to his employer and payment was based on the information contained therein. Tsoi agreed he had never received a conventional pay cheque from Roecker and no deductions were ever taken for Employment Insurance (EI), Canada Pension Plan (CPP) and income tax. Roecker paid his invoices using an Internet payment transaction service. Tsoi stated he understood the different aspects of Roecker’s activities and when in Germany had worked on the Performa and Eppingen projects and billed for his services – tab 8 – in euro and that payment was made to his Vancouver bank account. Tsoi re-iterated that he also did some work on these projects while in Vancouver and had submitted the invoice in euro at Roecker’s request. Tsoi stated he had been advised by his tax consultant to bill Roecker for “4% late fees” for consulting services provided between June 1 and September 31, (sic) – 2007, as well as an “administration fee” of 4% – based on a total billing of $28,400.85 for 2007 – because his adviser warned him CRA could be demanding payment – from him – of approximately $8,000 in income tax for the 2007 taxation year.
[10] Counsel for the Respondent closed the Minister’s case.
[11] Tsoi – in his capacity as Intervenor – did not adduce any evidence.
[12] Counsel for the Appellant pointed out the relevant period was from January 1, 2007 to February 1, 2008 and that in issuing the decision confirming the earlier ruling, the Minister specifically named the Appellant in her capacity as operator of Asir Studio which is located in Vancouver. As a result, any reference to an office in Germany – paragraph 6(f) of the Reply to the Notice of Appeal (“Reply”) – is irrelevant as that pertains to a separate business entity of Roecker through which she carries on an architectural practice that is distinct and apart from Asir Studio. In addition, any inclusion of the money earned by Tsoi which was paid to him directly by UBC in connection with the project known as the Hampton Grant cannot form any part of Tsoi’s alleged insurable and pensionable earnings while providing various services to Roecker. Counsel submitted it is important to examine the working relationship during the entire period – not just the relevant period as issued in these appeals. Tsoi – as a young, well-educated professional – was well aware of the distinction between receiving a pay cheque in the course of ordinary employment – with the usual source deductions – and providing professional services where invoices were submitted from time to time while working on a project that was limited not only by scope and time but also by the amount of money devoted to it. Counsel submitted that recent jurisprudence supported the view that a highly-skilled worker performing services without supervision in the context of a chosen work environment – where a series of short-term engagements were normal – had been considered as an independent contractor and not an employee. Tsoi – as a recent graduate from the Master’s program in architecture – fit into this category while providing his services to various entities on a flat-rate contract basis, for a limited time and often within a clearly-stated limit on remuneration. Counsel’s view of the evidence was that if Tsoi had been asked – at any point during the relevant period – to characterize his working status, he would have stated that he was an independent contractor and that this response would not only have been consistent with the intentions of the parties throughout the working relationship but supported by an objective examination of their actions within the context of relevant indicia applicable to the determination of working status. Counsel referred to the content of the various invoices submitted by Tsoi which consistently referred to his services having been rendered under the category, “Contract Type” and acknowledged the funding limit of a particular project or task by using the words, “Flat Rate”. The rate per contract varied according to several factors and none of the invoices linked the amount billed to any specific number of hours devoted to enumerated tasks. Counsel pointed out it was Tsoi – alone – who created and submitted the various invoices during the relevant period, even those sent to Roecker which sought payment for GST – on the basis of his registration as a supplier – and also for alleged additional services and items such as late fees and administration charges that were not due and owing and had never been agreed to by Roecker. On an objective basis, counsel submitted that a document – such as the invoice at tab 17 – would not have been sent to any employer by someone who sincerely believed that he or she was an employee. Counsel submitted the evidence had demonstrated Tsoi was not an employee of Roecker – operating as Asir Studio – nor in any other capacity during the relevant period.
[13] Counsel for the Respondent conceded Tsoi was not an employee of Roecker during the period covered by the Chinatown project funded by UBC and identified as the Hampton Grant. However, that concession did not extend to the payment of the invoice – tab 5 – which was paid by Roecker to Tsoi after the funding from UBC had ended. Counsel referred to jurisprudence which warned against accepting contractual labelling and that there were instances where young professionals – apparently operating with considerable latitude in many respects – were held to be employees due to the nature of control and the absence of risk and the lack of opportunity for profit. Counsel submitted the facts in the within appeals did not support a finding that there was any mutual intention by the parties – at any point during the relevant period – that Tsoi’s services would be delivered as an independent contractor. With respect to the invoiced amounts not being linked to any specific number of hours billed at a particular rate, counsel suggested it was reasonable to infer from the evidence that Tsoi worked a 40-hour week – more or less – and that his regular payments throughout 2007 were similar to a monthly salary. Counsel submitted it was reasonable for Tsoi not to have made any distinction between the Appellant as the proprietor/operator of Asir Studio in Vancouver and as a registered architect practising in Germany through Architekten or as an individual involved in a project known as Living lab. Counsel submitted the decisions of the Minister should be confirmed.
[14] Tsoi – as Intervenor – submitted that gaps in invoicing during the relevant period were explained by his testimony that there were periods when he performed work for Roecker which was not billed to any particular file or project.
[15] In several recent cases including Wolf v. The Queen, 2002 DTC 6853, The Royal Winnipeg Ballet v. The Minister of National Revenue – M.N.R., 2006 DTC 6323, Vida Wellness Corp. (c.o.b. Vida Wellness Spa) v. Canada (Minister of National Revenue - M.N.R.), [2006] T.C.J. No. 570 and City Water International Inc. v. Canada (Minister of National Revenue – M.N.R.), [2006] F.C.J. No. 1653, there was a clearly‑expressed mutual intent of the parties that the person providing the services would be doing so as an independent contractor and not as an employee. In other cases, there is a dispute about whether one of the parties agreed at the outset – or thereafter during the course of the working relationship – to provide services in the context of a particular status. In the within appeals, neither party addressed that issue and they forged a working relationship from March 2006 to December 31, 2007 or – according to the Respondent – until January 31, 2008. I will defer further discussion of the issue of intent and consider the various factors as required by the relevant jurisprudence.
[16] The Supreme Court of Canada in 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., [2001] 2 S.C.R. 983 – (“Sagaz”) dealt with a case of vicarious liability and in the course of examining a variety of relevant issues, the Court was also required to consider what constitutes an independent contractor. The Judgment of the Court was delivered by Major, J. who reviewed the development of the jurisprudence in the context of the significance of the difference between an employee and an independent contractor as it affected the issue of vicarious liability. After referring to the reasons of MacGuigan, J.A. in Wiebe Door Services Ltd. v. Canada (Minister of National Revenue - M.N.R.), [1986] 2 C.T.C. 200 and the reference therein to the organization test of Lord Denning - and to the synthesis of Cooke, J. in Market Investigations Ltd. v. Minister of Social Security, [1968] 3 All E.R. 732 - Major, J. at paragraphs 47 and 48 of his Judgment stated:
47 Although there is no universal test to determine whether a person is an employee or an independent contractor, I agree with MacGuigan J.A. that a persuasive approach to the issue is that taken by Cooke J. in Market Investigations, supra. The central question is whether the person who has been engaged to perform the services is performing them as a person in business on his own account. In making this determination, the level of control the employer has over the worker's activities will always be a factor. However, other factors to consider include whether the worker provides his or her own equipment, whether the worker hires his or her own helpers, the degree of financial risk taken by the worker, the degree of responsibility for investment and management held by the worker, and the worker's opportunity for profit in the performance of his or her tasks.
48 It bears repeating that the above factors constitute a non-exhaustive list, and there is no set formula as to their application. The relative weight of each will depend on the particular facts and circumstances of the case.
I will examine the facts in the within appeals in relation to the indicia set forth in the Judgment of Major, J. in Sagaz.
Level of Control:
[17] The Minister assumed – at paragraph 6(g) of the Reply - that Tsoi was a student of Roecker during the relevant period. That is not correct. Tsoi graduated with a MArch degree in January, 2006. She was no longer his professor but developed a working relationship with him that was consistent with being a mentor, a colleague, a co-venturer and an experienced professional in the discipline of architecture. Tsoi worked from an office in Roecker’s home and could come and go as he pleased. There is no credible evidence upon which to base a finding that Tsoi had any office duties such as “phone work” or “office clean up”, although if he was working in the Asir Studio office, it is reasonable to assume he answered the telephone instead of letting it ring. There is no evidence that the work performed by Tsoi required any licenses to work on his own as assumed by the Minister - at paragraph 6(q) – and Roecker was not a member of AIBC nor is there any evidence to suggest the work performed by Tsoi at any point during his relationship with Roecker and her various businesses required any such licenses except perhaps a business license if required by the City of Vancouver. Roecker – in her role as Professor of Architecture – played a role in obtaining the Hampton Grant for the Chinatown project and Tsoi submitted 4 invoices – tabs 1-4, inclusive – to UBC and was paid by that institution. It is apparent the Minister assumed Tsoi was under the control and supervision of Roecker for purposes of the Chinatown project when her role was limited to assuring UBC that Tsoi’s invoices qualified for payment in accordance with the guidelines of the Hampton Grant. Another graduate student worked on that project and an expert in 3-D digital models was retained. Tsoi’s last invoice – tab 4 – directed to UBC and dated June 11, 2007 – pertained to the period from May 1 to June 11, 2007. Subsequently, when enabled by a grant from SSHRC, Tsoi provided further services pertaining to the Chinatown project from August 1 to August 27, 2007 and submitted an invoice – tab 10 – to Roecker at UBC and the amount of $3,000 was paid by the University from its research account.
[18] In May, 2007, Tsoi billed Roecker for services rendered in the preparation of a portfolio binder concerning AIBC registration for foreign-trained students. Tsoi was an individual with particular knowledge in that area and had participated in the Master program at UBC. There is no evidence to support the Minister’s assumption that – in this respect – Roecker provided any “training and guidance”. (See paragraph 6(w) of the Reply.)
[19] In June, 2007, Tsoi performed work in respect of the Asir Studio website and for some drawings and photos for publication. Since Roecker in her capacity as sole proprietor of Asir Studio was paying for that work, she approved it – as anyone would – prior to payment. Tsoi could enter the workspace in Roecker’s home as he chose and other than Tsoi’s recollection of his usual work pattern when involved in a project, there is no basis for the Minister to have assumed – at paragraph 6(v) – that Roecker “determined the Worker’s hours and days of work.”
[20] In July, Tsoi was in Stuttgart working in an office shared by Roecker and her associates and billed for his services in creating a 3-D site model and rendering perspectives for a factory and a parkade. There is no evidence upon which to base a finding that he was subject to any direct supervision or control or that he was required to report at any particular time. Tsoi performed work pertaining to the Hotel Beijing project and traveled to Beijing with one of Roecker’s German associates to meet directly with the clients. He performed other services on this project and there is no suggestion that he received supervision from Roecker except that – as an architect registered in Germany – she would bear ultimate responsibility for his work. Tsoi purchased supplies as needed and billed for them later. There is no evidence to suggest he required any prior approval.
[21] The advice provided by a former professor and experienced professional within the same discipline who pays for services rendered to a former student may seem to an outsider as though it constitutes orders or commands within the context of a master-servant relationship. However, Tsoi was a professional providing services within the overall design industry and could perform all tasks that did not require registration with AIBC.
Provision of equipment and/or helpers:
[22] Roecker testified that