Carfra Lawton LLP | Victoria BC

Plaintiff receives 100% of loss to family business due to injury

Salame v. Sutherland 2016 BCSC 1610 provides new guidance on the proper calculation of past loss of capacity to earn income when dealing with an injured plaintiff who works in a family business.

Previous judgments calculated, in circumstances involving a husband-wife business, the loss of income earning capacity from having one spouse injured as 50% of whatever business loss was incurred. For example, if a family business suffered a loss of $10,000 in earnings, the wage loss of the injured spouse would be $5,000.

Salame indicates this approach is incorrect when dealing with a family business. In circumstances such as these, all money earned by both partners goes into a “family pot” of money. Therefore, the real loss to the injured spouse is 100% of the business loss, not just 50%.

In Salame, the loss was mitigated by the hiring of a replacement employee. The defendant sought to pay only 50% of the value of that replacement worker, but the court determined the pecuniary loss in that regard was the full 100% of the worker’s salary.

In summary, the plaintiff will likely get 100% of the loss caused to a family business by the plaintiff’s injury.

Case law summary by Matthew Wehrung