Loving Care v. R. – FCA: Appellate court will not reverse an inference of fact reasonably supported by the evidence

Bill Innes on Current Tax Cases

http://decisions.fca-caf.gc.ca/fca-caf/decisions/en/item/108546/index.do New Window

Loving Home Care Services Ltd. v. Canada (National Revenue)
(March 11, 2015 – 2015 FCA 68, Pelletier, Webb (Author), Boivin JJA).

Précis: This decision is in EI and CPP appeals from a decision of the Tax Court that held workers were employees. Six worker agreements were put in evidence. There was conflicting evidence as to when the agreements were signed and the schedules added to them. Justice Boyle concluded that a schedule to one of the six agreements was likely the one in force during the relevant periods. On that basis, in part, he concluded that the workers were employees. The taxpayer appealed against his finding with respect to the schedule in effect during the periods. The Court of Appeal concluded that this was an inference of fact, thus the test of “palpable and overriding error” applied. Where the inference was reasonably supported by the evidence the Court of Appeal would not step in to weigh the evidence to substitute another inference. The appeal was dismissed with costs.

Decision: This is a decision on EI and CPP appeals. Justice Boyle in the Tax Court found that the six workers in question were employees during the relevant periods. The employer appealed:

[3] Loving Home Care does not submit that the Tax Court Judge applied the wrong legal test but rather argues that the Tax Court Judge erred in making certain findings of fact. In particular Loving Home Care submits that the Tax Court Judge should not have concluded that the schedule that was attached to the unsigned agreement submitted for one worker (Ms. Burt) was applicable to all of the workers. The schedule that was attached to the forms of agreement for the other workers did not include all of the provisions that were included in the schedule attached to the unsigned agreement for Ms. Burt.

The employer introduced six agreements into evidence, one for each worker. Each agreement had a schedule attached. The schedule for one worker, Ms. Burt, who no longer worked for the employer, was slightly different from the others. Justice Boyle expressed concern about the evidence dealing with the six agreements:

[6] The Tax Court Judge expressed his concerns with respect to the agreements in paragraph 15 of his reasons:

15 The dating of the agreements, whether signed or unsigned, is not clear or complete and remains questionable. The Court’s concerns with the dating of the agreements in evidence was fully discussed by the Court with Appellant’s counsel during the hearing. The pre-printed fill in the blank agreement forms bear a date of 2010. At least one suggested it was completed before that date. Some schedules’ dates do not align with the dates of the agreements they are appended to. Workers did not all recall when they signed this agreement relative to when they started working for Loving Home Care. Workers could not all provide clear or satisfactory answers on the dating, signing and renewing of these agreements. One worker had to change her clear and unequivocal answer to this question when challenged in cross-examination. The agreements appear to have been “renewed” at the request of Loving Home Care in 2012, except for that of the Intervenor, Ms. Burt who had ceased working with Loving Home Care by that time. The Rulings process in respect of the status of these workers arose in 2012.

He drew a factual inference that the schedule to the Burt agreement was operative at the relevant times:

[7] The inference, which is the issue in this appeal, is drawn by the Tax Court Judge in paragraph 16 of his reasons:

16 The notable and significant difference between Ms. Burt’s agreement and the “renewed” agreements of 2012 is that the provisions described above in vii) and viii) dealing with scheduling non-work, family and vacation days, and the daily reporting to Loving Home Care via the detailed log book, are not present in the 2012 schedules. Considering all of the evidence relating to these agreements and their renewals, including my concerns below regarding witness credibility, and considering the apparent spacing gap in the 2012 renewal schedules, the Appellant has certainly not been able to satisfy the Court on a balance of probabilities with satisfactory credible evidence that the agreements as tendered to the Court were those in place in governing the relevant period. I find that such agreements were not generally signed by Loving Home Care and its workers prior to the commencement of work, were not necessarily completed or signed when they said they were or at all, and in the cases of these workers covered by the Rulings in issue, all included the same scheduled provisions as Ms. Burt’s during the relevant periods in question.
(emphasis added)

[8] As a result of this inference the following additional conditions were found to be in all of the agreements with the workers in question:
  • The duties and the responsibilities are described by the Contractor where they can be changed based on the job description.
  • Any holidays and family events, the Contractor requires a minimum of two weeks notice in writing.
  • The Subcontractor is responsible to update the Contractor with the patient’s day to day events using the log book; including health status, household management, and other relevant information.
That inference in turn led, in part, to his conclusion that the workers were employees.  The employer argued that Justice Boyle made a palpable and overriding error in concluding that the terms of the Burt agreement applied to all of the workers.

The Court of Appeal rejected this argument:

[11] The onus in this case was on Loving Home Care to establish, on a balance of probabilities, the applicable terms and conditions for each worker. Failing to introduce sufficient evidence to do so does not mean that Loving Home Care should be successful. Because the evidence was sparse and inconsistent in relation to the agreements and what terms and conditions were included in each agreement, the Tax Court Judge drew the inference referred to above. I am not persuaded that the Tax Court Judge committed any error in doing so as this inference is reasonably supported by the evidence. It is not the role of this Court to reweigh the evidence and substitute another inference.

As a result the appeal was dismissed with costs.