Akhtarkhavari v. Griffith

2020 BCSC 926 Akhtarkhavari v. Griffith

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: Akhtarkhavari v. Griffith, 2020 BCSC 926 Date: 20200619 Docket: M141330 Registry: Vancouver Between: Vargha Akhtarkhavari Plaintiff And Gilchrist Griffith and Wilson Gilliland Craig Defendants - and - Docket: M167491 Registry: Vancouver Between: Vargha Akhtarkhavari Plaintiff And Michael John Milliard Defendant Before: The Honourable Madam Justice E. McDonald Supplemental Reasons for Judgment Counsel for the Plaintiff: G.J. Collette Counsel for the Defendants: K.P. Serné, J.E. Fergusson Place and Date of Trial: Vancouver, B.C. November 18-21, 25-29, 2019, December 2, 4-5, 2019 Place and Date of Judgment: Vancouver, B.C. June 19, 2020 [1] As contemplated in my reasons for judgment dated May 13, 2020, indexed at 2020 BCSC 740 (the "Trial Reasons"), the parties have now advised that they wish to obtain a tax gross-up calculation from an economist related to the cost of future care award. In the event the parties are unable to reach an agreement as to the amount of the tax gross-up once it is calculated by an economist, they have leave to apply for further directions. [2] However, before the parties can obtain assistance with the tax gross-up calculation, they have requested clarification of the loss of future income earning capacity award in the Trial Reasons. Counsel for the plaintiff points out that the award of future loss of income earning capacity ought not to have been expressed as a net amount after reduction for income tax: Lines v. W & D Logging Co. Ltd., 2009 BCCA 106 at para.

152. Counsel for the plaintiff seeks a clarification and potentially a correction to state the award for future loss of income earning capacity as a gross amount. [3] In response, defence counsel takes the position that despite using the word "net" to describe the award of future loss of earning capacity in the Trial Reasons, it is not necessarily clear that tax was deducted from the loss of future earning capacity award. In the defendants' view, I may have been referring to the plaintiff's income net of business expenses, rather than net of income tax. However, the defendants agree that clarification of this issue would be appropriate. [4] Counsel for the plaintiff is correct in that the award for future loss of income earning capacity is stated as a net amount after deducting for income tax. As set out in paragraph 177 of the Trial Reasons, I arrived at what I described as the "net" amount of future loss of income earning capacity of $34,000 per year. In paragraph 178, I applied the actuarial multiplier of $16,072 to that amount to arrive at a total net amount of $546,448. [5] As I explained in the Trial Reasons, I accepted the opinion of the defendants' expert witness, Mr. Szekely, concerning the appropriate multiplier to apply in the circumstances of this case. Although not stated explicitly in the Trial Reasons, I also accepted that the tax rate applicable to the plaintiff

was 42%. That was the tax rate applied by Mr. Szekely and also by the plaintiff's expert witness, Mr. Matthews. [6] The $34,000 per annum amount set out in paragraph 177 of the Trial Reasons was net of income tax, assuming a tax rate of 42%. The award for future loss of income, when expressed as a gross amount, and accepting an applicable tax rate of 42%, is $58,500 per year and this is the gross amount that should have been stated in paragraph 177 of the Trial Reasons: Spencer v. Hussey, 2020 BCSC 631 at para. 55. [7] Therefore, after applying the actuarial multiplier to age 65, the total award for future loss of income earning capacity is $940,212, not the $546,448 net amount as stated in paragraphs 178 and 197 of the Trial Reasons.[1] [8] Should the parties require any further clarification or direction with respect to calculation of future loss of income earning capacity, they have leave to apply. "E. McDonald J." [1] Calculated as: $58,500/1,000 x $16,072 = $940,212.