In assessing the income loss of a business owner, will “written off” personal expenses be considered? Taxable income alone won’t usually tell the full story of the financial benefit of the business.
In a BC Supreme Court decision released this week (Grise v. Jones, 2017 BCSC 1337), the plaintiff was a fellow who didn’t finish high school and who relied upon physically demanding jobs to earn income. He worked as a drywaller for the 20 years leading up to the collision. He was 50 years old when he was injured in the collision, and in the five years between the collision and the trial, he had been unable to work except some light duties in construction working for his cousin.
Mr. Justice Leask accepted that the plaintiff’s earnings in the three years leading up to the collision were as follows:
Year Business Income Taxable Income
2009 $35,674.00 $24,336.39
2010 $26,714.74 $19,961.17
2011 $38,753.28 $28,848.82
In assessing his income loss for the five years that had passed between the date of the collision and the date of trial, Mr. Justice Leask considered ICBC’s argument that the plaintiff failed to mitigate his losses. ICBC’s lawyer argued that he should be penalized for his failure to find work after completing a vocational assistance program. In rejecting ICBC’s arguments, and weighing all the evidence, Mr. Justice Leask awarded for the full amount of the claim after accounting for business expenses that were actually personal expenses (writing off vehicle expenses – 50% of which were indeed personal expenses):
 The parties agree that in the five years between the first accident and the commencement of trial, the plaintiff had only one relatively brief period of employment during which he earned $7,700. The plaintiff submits that his annual income in that period would have been $35,000 and that his total income for that period would have been $173,950. Subtracting his actual income of $7,700, the plaintiff claims $166,250.
 Counsel for the defendants submits that the plaintiff’s average gross income after deduction of business expenses for the years 2009 through 2011 was $24,382. Therefore, his gross wage loss would be $121,910. Generously, only deducting $7,000 for his earnings, the defendants’ position is that the plaintiff’s gross past wage loss is approximately $115,000.
 Defendants’ counsel, however, makes a further submission that the plaintiff’s failure to find other employment after discharge from the CBI Vocational Assistance Program amounts to a failure to mitigate which counsel submits should result in a 20% reduction in the claim from $115,000 to $92,000.
 I am not in agreement with either party’s position on this head of damages. I disagree with the plaintiff’s wage figures because they fail to take into account business expenses. I disagree with the defendants’ wage figure because they don’t allow for either cost of living changes or the economist’s add back of 50% of vehicle expenses to represent personal gain from vehicle use for travel to and from work. The economist, after converting the income to its equivalent in 2017 dollars and adding back 50% of vehicle expenses, calculates the average for 2009-2011 to be $31,115. For a five year period, this produces a total of $155,575. After subtracting the $7,700 the plaintiff earned in 2016, it leaves a claim of $147,875. I was unpersuaded by the defendants’ failure to mitigate argument so that my award for this head of damages is $147,875.