Court File and Parties

CITATION: Canada Suites Ltd. v. Lefor, 2026 ONSC 1591

DIVISIONAL COURT FILE NO.: 157/25

DATE: 20260320

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: CANADA SUITES LTD., Appellant/Defendant

AND:

MARK LEFOR, Respondent/Plaintiff

BEFORE: Matheson J.

COUNSEL: Lincoln Anthony De Freitas II, for Appellant

Teilen Celentano, for the Respondent

HEARD at Toronto: March 18, 2026, by videoconference

Endorsement

[1] Canada Suites Ltd. appeals from the decision of Deputy Judge McNeely of the Small Claims Court dated February 11, 2025, granting the respondent Mark Lefor’s claim against it (the Decision). The Deputy Judge awarded judgment of $25,436.34, plus interest, and, in a decision dated February 24, 2025, costs.

[2] The appellant is a short-term rental business, managing furnished rental properties for guests. The respondent worked for the appellant for about seven years, eventually having the title of General Manager. After his termination without cause and without notice, the respondent sued for damages, claiming reasonable notice and other relief as an employee or as a dependent contractor. The Deputy Judge found that the respondent was not an employee but was a dependent contractor and was awarded damages for reasonable notice.

[3] On this appeal, the appellant submits that the Deputy Judge erred as follows:

(i) in applying the legal test for a dependent contractor;

(ii) in failing to consider material evidence relevant to the above classification issue;

(iii) in misinterpreting the contractual terms governing the relationship; and,

(iv) in using an unfair process.

[4] The appellate standard of review applies to this appeal. As set out in Housen v. Nikolaisen, 2002 SCC 33, the standard of review is correctness for questions of law, palpable and overriding error for questions of fact and palpable and overriding error for questions of mixed fact and law except that extricable questions of law are reviewed for correctness. Further, the process must be fair.

[5] Beginning with procedural fairness, the appellant submits that the Deputy Judge erred in making the factual findings based upon invoices and other documents, without T2125 forms. The appellant submits that it did not have a chance to contest the breakdown of income and that the Deputy Judge did not engage with certain testimony about the respondent’s compensation.

[6] I am not persuaded that there was procedural unfairness. The respondent produced the documents that he was going to rely on in advance of the trial, in accordance with the Small Claim Court Rules. The appellant could have sought the T2125s before trial and did not do so. Nor did the appellant’s then counsel seek those records at the opening of the trial although he mentioned them. With respect to an opportunity to contest the respondent’s evidence, the respondent produced other documentation regarding his sources of income. He testified and was cross-examined at trial. This is unlike Terra Scapes Landscape Construction Inc. v. Ashtaryeh, 2022 ONSC 4178, in which the Deputy Judge did not permit cross-examination.

[7] Moving to the main issue, there is no question about the test for a dependent contractor. The appellant relies on McKee v. Reid’s Heritage Homes Ltd., 2009 ONCA 916, at paras. 24-30, and Keenan v. Canac Kitchens Ltd., 2016 ONCA 79, at paras. 16-30. The Deputy Judge cited the more recent decision of the Court of Appeal in Thurston v. Ontario (Children’s Lawyer), 2019 ONCA 640, which applies both McKee and Keenan, at paras. 25-30.

[8] In Thurston, the Court of Appeal discussed the decisions in McKee and Keenan at some length, describing them as the primary guidance from the Court of Appeal on the issue of distinguishing dependent and independent contractors. The Deputy Judge did not err by relying on Thurston for the test.

[9] The appellant’s grounds relate to the application of the test to the evidence and therefore require that the appellant show palpable and overriding error.

[10] As set out in Thurston, at para. 23, citing McGee, at para. 30, “dependent contractor status is a non-employment relationship in which there is ‘a certain minimum economic dependency, which may be demonstrated by complete or near-complete exclusivity’. ‘Minimum economic dependency’ is a vaguely worded standard, and its application yields outcomes that are highly context-specific: McKee, at para. 38. It follows that a judge’s decision as to the nature of a working relationship is generally entitled to deference”.

[11] The appellant relies on the need to show complete or near-complete exclusivity. The appellant disputes the Deputy Judge’s treatment of exclusivity in part due to the absence of T2125 documents. There is no issue that the onus was on the respondent at trial. The appellant submits that the Deputy Judge’s findings on exclusivity could not be made without those documents. I disagree.

[12] The Deputy Judge had ample evidence upon which to base the findings regarding exclusivity. The respondent put forward documentary evidence about his income for the more than three years leading up to his termination. His QuickBooks summary showed income from four sources: the appellant, a related company, a family business and one other source. His income from the appellant alone was more than 90% of the total income. The respondent also testified about his work, including evidence cited by the Deputy Judge that he typically worked more than forty hours a week, and was always on call, which excluded the opportunity to work for others. Further, Ms. Reznik, who owned and operated the appellant, testified that she would trust the respondent 100%.

[13] The appellant has not shown a palpable and overriding error in the finding that the respondent’s work was exclusive or near-exclusive so as to justify finding that he was a dependent contractor.

[14] Lastly, the appellant raises new issues on this appeal regarding the impact of the COVID-19 Pandemic and whether the relationship was a series of fixed term relationships, not an ongoing relationship as found by the Deputy Judge. The respondent objects. I am not persuaded to consider these new issues on this appeal.

[15] This appeal is therefore dismissed, with costs to the respondent in the agreed upon amount of $6,000, all inclusive.

Matheson J.

Date: March 20, 2026