A CPA (Mr. Gross) was the sole shareholder of two corporations (635 and 307), each of which was a partner in a Richter professional partnership or a Richter management services partnership. A partnership contract between all the Richter partnerships and their direct partners and indirect individual partners required those individuals to devote their services exclusively to Richter affairs.
Mr. Gross also was the controlling shareholder of a corporation (9149), which agreed (in the “9149 Agreement”) with 635 and 307 that it would fulfill their obligations under the partnership contract to provide services by providing the full-time services of Mr. Gross in fulfilment of such obligations.
Mr. Gross, who did not have a written agreement with 9149 for the provision of his services, had taken the position that he provided his services as a self-employed worker. Revenue Quebec treated him as an employee of 9149, and assessed 9149 for its failure to make source deductions and Mr. Gross to deny expenses deducted from his income.
In confirming the finding of the Court of Quebec that Mr. Gross was an employee of 9149, Lavallée JCA found that, notwithstanding Mr. Gross’ control of 9149, 9149’s relationship with him was one of subordination and control, given the above contractual arrangements, whose effect included that he was bound to 9149 to provide his services to the two clients of 9149 (635 and 307).