Court of Appeal for Ontario

Date: September 8, 2017 Docket: C62760

Judges: Strathy C.J.O., van Rensburg and Trotter JJ.A.

Between

Julie R. Daniel Plaintiff (Appellant)

and

Miller, Canfield, Paddock and Stone, LLP Defendant (Respondent)

Counsel

Robert G. Matlack, for the appellant

Myron W. Shulgan and Nicole Marcus, for the respondent

Heard: September 5, 2017

On appeal from the judgment of Justice Peter B. Hockin of the Superior Court of Justice, dated September 16, 2016, with reasons reported at 2016 ONSC 5712.

Reasons for Decision

[1] The appellant's core submission is that in finding that she was a partner in the respondent law firm, rather than an employee, the trial judge gave insufficient consideration to the fact that her work was controlled by the partner whose clients she served and that she was dependent on the firm for her work. In so doing, she says, the trial judge failed to apply the test set out by the Supreme Court of Canada in McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39, [2014] 2 S.C.R. 108.

[2] We do not accept this submission. McCormick, to which the trial judge adverted, dealt with the issue of whether a mandatory retirement provision in a law firm's partnership agreement offended the Human Rights Code, R.S.B.C. 1996, c. 210. The control and dependency test was applied to determine whether a particular workplace relationship placed a person in a position of vulnerability for the purpose of the Code.

[3] McCormick does not establish control and dependency as an all-purpose test to determine whether a person is a partner or an employee. Here, the trial judge correctly concluded that one must examine all the surrounding circumstances, the substance of the relationship, the behaviour of the parties and the intention of the parties, to determine whether a partnership exists: see Backman v. Canada, 2001 SCC 10, [2001] 1 S.C.R. 367. In Backman, Iacobucci and Bastarache JJ., writing for the court, stated at para. 26:

Whether a partnership has been established in a particular case will depend on an analysis and weighing of the relevant factors in the context of all the surrounding circumstances. That the alleged partnership must be considered in the totality of the circumstances prevents the mechanical application of a checklist or a test with more precisely defined parameters.

[4] In finding that the appellant was a partner in the firm, the trial judge made findings of fact which were available to him on the evidence. He found that the appellant:

• conducted herself as a partner, was treated as a partner and was held out to clients, the Law Society and Canada Revenue Agency as a partner;

• received a draw, without source deductions of income tax or employment insurance, and filed her tax returns as a partner;

• made contributions to a capital account, which were recorded in the financial statements, and was at risk that her capital contributions could be lost;

• received enhanced benefits and insurance, which were available only to partners in the firm;

• attended partners' meetings at which decisions were made, participated in the management of the firm and, contrary to her evidence, was entitled to vote on decisions made at partners' meetings;

• had access to confidential information, which was only available to partners, about the business and financial affairs of the firm;

• signed firm cheques and opinions on behalf of the firm;

• shared in the profits of the firm through a bonus dependent on the profit of the firm; and

• had "built up a not insignificant practice of her own."

[5] In coming to these conclusions, the trial judge accepted the evidence of two other members of the firm, whose circumstances were similar to the appellant's, who testified that they conducted themselves as partners in the firm and were treated as such.

[6] The trial judge applied the relevant legal principles to his findings of fact and concluded that a partnership relationship existed in the context of the factual matrix in the case. This was a conclusion of mixed fact and law and the appellant has demonstrated no palpable and overriding error.

[7] We therefore dismiss the appeal, with costs to the respondent in the amount of $25,000, inclusive of disbursements and all applicable taxes.

"G.R. Strathy C.J.O."

"K. van Rensburg J.A."

"G.T. Trotter J.A."