A recent decision by the Tax Court of Canada affirms the notion that individuals can act as both employees and independent contractors to the same company.

In the case, Criterion Capital Corp., a company of Vancouver entrepreneur Doug Mason, appealed a tax ruling from the early 1990s.

The issue was whether Criterion was a personal service business, that would not be entitled to the small business deduction and limited deductible expenses, or an independent contractor to his company Clearly Canadian Beverage Corp. Mason argued that he was both an employee and an independent contractor to the company.

Mason was the sole shareholder and sole director and an employee of Criterion in the years in question. He was also a shareholder, a director and held the position of President and CEO at Clearly Canadian.

Criterion had one other employee and was run from an office in Mason’s home. The firm had another office at Waterfront Capital Corp. — one of Criterion’s clients — and an office in the premises of Clearly Canadian. Besides Clearly Canadian, Criterion had several other clients.

The court accepted Mason’s arguments, and gave several reasons for its decision. Among them: Criterion had several other clients; it had two other employees; Mason’s work through Criterion, was more than the work expected of a president and director; it had multiple offices; and other tests point to it as an independent contractor.

” Criterion was not, in the years in question, a personal services business and the appeals are allowed, with costs,” said the decision.