CITATION: Conde v. National Sign Manufacturers, 2013 ONSC 229

DIVISIONAL COURT FILE NO.: 373/11

DATE: 2013/01/10

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

BETWEEN:

Leonel Conde; Royal New Signs & Graphics Ltd.

Plaintiffs/Appellants

– and –

National Sign Manufacturers Ltd; National Sign Fabricators Limited; Imperial Sign (Finance) Ltd.; 452830 Ontario Limited

Defendants/Respondents

Leonel Conde, on his own behalf and on behalf of Royal New Signs

Albert Elbaz, for National Sign Manufacturers Ltd. and Imperial Sign (Finance) Ltd.

HEARD: January 7, 2013

Herman J.

[1] Leonel Conde and Royal New Signs & Graphics Ltd. (collectively referred to as “Mr. Conde”) appeal from the judgment of Deputy Judge Laura Ntoukas, dated July 5, 2011, which dismissed Mr. Conde’s claim for damages arising from constructive dismissal.

[2] Mr. Conde also brought a motion to introduce fresh evidence.

[3] By order dated December 10, 2012, Mr. Conde was granted leave to act on behalf of Royal New Signs, and Mr. Albert Elbaz was granted leave to act on behalf of National Sign Manufacturers Ltd. and Imperial Sign (Finance) Ltd. (collectively referred to as “National Sign”). The claim against the other two defendants had previously been abandoned.

[4] Mr. Elbaz said that he did not receive any of the motion or appeal materials, although Mr. Conde provided an affidavit of service, indicating that the materials were served by mail. Mr. Elbaz did not file any responding materials. However, Mr. Elbaz did not want the matter adjourned. He was content to proceed without having received the materials in advance or having had the opportunity to file responding materials. The motion and the hearing of the appeal therefore proceeded, with an opportunity given to Mr. Elbaz to review the materials.

Motion to introduce fresh evidence

[5] Mr. Conde brought a motion to introduce a significant amount of evidence, including bank statements, photographs and invoices. In his submission, this evidence would establish that Mr. Elbaz had made false claims and statements at the trial.

[6] I dismissed Mr. Conde’s motion on the basis that he did not establish that this evidence could not have been presented at the time of the trial.

The claim and the defence

[7] Mr. Conde seeks damages from the defendants of $25,000 on the basis of constructive dismissal. He says that he was an employee of the defendants. He further says that he was constructively dismissed by the defendants without just cause when they denied him his annual salary raise in December 2008 and reduced his hours of employment in September 2009.

[8] The defendants plead that Mr. Conde was a sub-contractor, not an employee.

Reasons for judgment

[9] In oral reasons, delivered on July 5, 2011, the trial judge dismissed Mr. Conde’s claim on the basis that he was an independent contractor. She considered the possibility that Mr. Conde was a dependent contractor, but concluded that he was not.

[10] In reaching this conclusion, she relied on the factors set out in the decision of McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916, [2009] O.J. No. 5489 (C.A.): whether or not there was exclusive service provided by the individual to the principal; whether there was control of the individual by the principal; whether the individual had an investment or interest in the “tools” relating to the service; whether the individual undertook any business risk or had an expectation of profit as distinguished from a fixed commission; and whether the individual was part of the principal’s business organization.

[11] The trial judge noted that the evidence of Mr. Conde and Mr. Elbaz was contradictory on certain key aspects. She found as follows:

Where the evidence conflicts, except [I accept] the evidence given on behalf [of] the defendants as being more credible, the evidence for the defence was reasonable and consistent with the totality of the evidence given and in particular the evidence of [the] plaintiff with respect to certain key aspects on advertising and with respect to a [the] number of his own clients, was not reasonable or consistent.

[12] In concluding that Mr. Conde was an independent contractor, the trial judge noted the following: although Mr. Conde occupied a portion of National Sign’s premises, it was done for convenience; there was a locked entrance to Mr. Conde’s portion of the premises; Mr. Elbaz told Mr. Conde that they were not in a position to hire him as an employee; the parties agreed that Mr. Conde could set his own days and hours of work, giving priority to his own private clients; Mr. Conde had an extensive list of clients or potential clients; Mr. Conde admitted that approximately 40 per cent of his gross earnings in 2008 were from his own clients; Mr. Conde’s work was a small portion of National Sign’s business; Mr. Conde had his own corporation; Mr. Conde filed income tax and GST returns as an independent contractor; Mr. Conde advertised his business, had his own business cards, letter head and telephone number; and Mr. Conde bought his own supplies, did his own invoicing, hired his own sub-contractors and owned his own tools.

[13] Given the totality of this evidence, the trial judge concluded that, on the balance of probabilities, Mr. Conde was not a dependent contractor, but was an independent contractor.

[14] In view of this conclusion, it was unnecessary to deal with the remaining issues.

Grounds for appeal

[15] In his Notice of Appeal and his factum, Mr. Conde sets out numerous grounds of appeal and issues. These grounds can essentially be reduced to two: the trial judge erred when she found Mr. Elbaz’s testimony was more credible; and she erred in failing to find that Mr. Conde was a dependant contractor, in view of the evidence that Mr. Elbaz had full control over Mr. Conde’s work.

Credibility

[16] The trial judge is in the best position to make determinations of credibility. As such, considerable deference is owed to the trial judge’s decision in this regard.

[17] Mr. Conde submits, however, that it is clear from the record that Mr. Elbaz did not tell the truth. In particular, he submits that Mr. Elbaz’s testimony was internally inconsistent and inconsistent with other evidence.

[18] I do not agree with Mr. Conde’s characterization. I have reviewed the transcript of the trial and reviewed the instances pointed out by Mr. Conde.

[19] In some cases, Mr. Elbaz’s testimony was not materially different from Mr. Conde’s. For example, Mr. Conde submits that Mr. Elbaz did not tell the truth with respect to whether he had a locked door and a separate entrance. However, both Mr. Conde and Mr. Elbaz testified that Mr. Elbaz gave Mr. Conde a key for his office so he could lock the door. Mr. Conde said this happened in 2003; Mr. Elbaz could not recall the date.

[20] Similarly, both Mr. Conde and Mr. Elbaz testified that there were two doors in Mr. Conde’s office. One of these doors led into National Sign’s premises and another one was a separate entrance. Mr. Conde stated that the second door was always blocked and he never used it. Mr. Elbaz did not testify as to Mr. Conde’s use of the separate entrance.

[21] Mr. Conde also contends that Mr. Elbaz’s testimony was internally inconsistent when, at one point in his testimony, he said he had several employees, whereas at another point, he said he had only one. However, Mr. Elbaz’s reference to one employee was in answer to a question about how many sign manufacturers he had. He said that only one of the sign manufacturers was a full-time employee. He did not say that this person was National Sign’s only employee.

[22] Other instances that Mr. Conde pointed to as clear examples of Mr. Elbaz not telling the true are instances in which the trial judge preferred Mr. Elbaz’s version because, in her opinion, he was more credible. A key example of this is the testimony with respect to how often Mr. Conde was absent from the office during regular working hours doing work for other clients. Mr. Conde’s evidence was that it rarely happened. Mr. Elbaz said there were some weeks when Mr. Conde had a big project he was doing for another client, that he did not come to work at all.

[23] The one point upon which there is arguably an issue relates to how much Mr. Conde earned from National Sign in 2008 and how much he earned from other clients. Both the questions and answers on this issue were very confusing. At one point, Mr. Conde estimated that he earned around $707 a week on average or $36,000 a year from the work he did for National Sign. Other amounts were, however, mentioned. Given this confusion, I do not take Mr. Elbaz’s statement that Mr. Conde earned $30,000 from National Sign in one year as an indicator of Mr. Elbaz’s credibility.

[24] In my opinion, the examples given by Mr. Conde do not establish that Mr. Elbaz’s testimony was clearly false or internally inconsistent. Rather, the trial judge preferred Mr. Elbaz’s version to Mr. Conde’s because, in her opinion, Mr. Elbaz’s evidence was reasonable and consistent with the totality of the evidence, while Mr. Conde’s evidence was not reasonable or consistent with respect to certain key aspects.

Control

[25] Mr. Conde’s other main argument is that the trial judge erred when she concluded that Mr. Elbaz did not have control over Mr. Conde.

[26] In support of his position, he pointed to several excerpts in the transcript. In particular, he pointed to portions of Mr. Elbaz’s testimony in which he stated: he would present Mr. Conde with a “whack of work orders”; the work orders would have detailed instructions on them; Mr. Elbaz would tell Mr. Conde the order of importance of the orders; if a client told Mr. Elbaz that a sign Mr. Conde was working on was not needed, he would let Mr. Conde know not to work on the sign any more; and Mr. Elbaz was the “go-between” between the client and the company.

[27] The fact that Mr. Elbaz gave detailed instructions to Mr. Conde as to what was required for each work order does not, in my opinion, lead to the conclusion that Mr. Conde was a dependent contractor. In cross-examination, Mr. Conde admitted that he did work for his own clients on the premises. While it was beneficial to National Sign for Mr. Conde to be present and available during work hours, if Mr. Conde needed to do work for another client and be absent from the office, he could do so.

[28] In considering the evidence as a whole, I cannot conclude that the trial judge erred with respect to this factor. Furthermore, whether the individual is subject to the control of the principal is only one of the factors to be considered in determining the status of the relationship.

Conclusion

[29] The trial judge applied the proper legal test to the facts as she found them. While Mr. Conde disagrees with the trial judge’s factual findings, there was, in my opinion, ample evidence to support both her findings and her conclusion.

[30] The determination of whether an individual is an independent or a dependent contractor involves the balancing of several factors. As noted by MacPherson J.A. in McKee at para. 38, the analysis is “best left to the trier of fact, who is closest to the facts of the case and has the best handle on the true nature of the work relationship”. Deference is owed to the trial judge, unless the facts could not support her conclusion.

[31] To the extent that Mr. Conde’s version of events was different from Mr. Elbaz’s, the trial judge preferred Mr. Elbaz’s version. She found Mr. Elbaz’s evidence to be more reasonable and consistent. The trial judge’s finding with respect to credibility is entitled to substantial deference. Upon reviewing the transcript of the trial, I could not find a basis for overturning that finding.

[32] The one point upon which there might be some doubt is the trial judge’s statement that about 40% of Mr. Conde’s earnings in 2008 were from his own clients. This figure was based on Mr. Conde’s own admission in cross-examination. The evidence on the proportion of Mr. Conde’s attributable to his work for National Sign was confusing. If one takes the evidence that is most favourable to Mr. Conde, the proportion of the work he performed for other clients in that year would be closer to 30%. This figure would not, in my opinion, alter the determination that Mr. Conde was an independent contractor given that 30% still represents a substantial portion of Mr. Conde’s income and the trial judge relied on numerous other findings and factors to reach her conclusion.

[33] The appeal is therefore dismissed.

[34] Mr. Elbaz left it to the court to determine costs, in the event the appeal was dismissed. He did not file any responding materials. I am not aware of any costs he incurred, other than his appearance at court for the hearing of the appeal. In the circumstances, no costs are awarded.

Herman J.

Released: January 10, 2013

CITATION: Conde v. National Sign Manufacturers, 2013 ONSC 229

DIVISIONAL COURT FILE NO.: 373/11

DATE: 2013/01/10

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

B E T W E E N:

Leonel Conde; Royal New Signs & Graphics Ltd.

Plaintiffs/Appellants

– and –

National Sign Manufacturers Ltd; National Sign Fabricators Limited; Imperial Sign (Finance) Ltd.; 452830 Ontario Limited

Defendants/Respondents

REASONS FOR JUDGMENT

Herman J.

Released: January 10, 2013