Standards & Examples

INTRODUCTION

This is not a compendium of damages, but rather it illustrates my standard approaches to some common issues. In my work, trying not to be reminded of what I said another time induces consistency. Besides keeping the technicalities consistent from report to report, I like to keep them outside the body of the report, so it can focus on the facts. Thus, to the extent that they fit the evidence in the case, I use these standard approaches and explain them in appendices and endnotes.

PERSONAL INJURY, WRONGFUL DEATH — PAST AND FUTURE LOSSES

My general expertise and approach were accepted in, among others, Mckenzie v Van-Kam Freightways Ltd, 1990 BCSC 561 and Sutherland v Hansen, 1990 BCSC 255 (CanLII),. In the first asbestos case, Hunt v Atlas Turner Inc, T &N plc, et al, 1990 BCSC 434 (CanLII), Mr Justice Thackray concluded that I was expert on the length of life but not its value.

Contingency & present-value factors

Appendix A, Contingency & present-value factors, describes the translation of future amounts to their contingency- or survival-adjusted present values. Besides the discount, survival, and labour-market contingency factors, it explains my typical multiplier-and-contingency schedule.

	app a.pdf (right click icon to save, or click to view)

Its main points:

Attachment to and success at education correlates with attachment to and success at working, and the higher earnings often available with higher qualifications reinforce the preference to work rather than not to work. Thus higher qualification levels usually bring more favourable contingencies.

For someone established in the labour force, the participation rate is adjusted to remove from comparison those otherwise-comparable persons who never entered the labour force or have already left it. If indicated, the part-time rate can be similarly adjusted to address the changes in a typical working life. Not to make this adjustment for someone so established and working today results in applying a percentage chance that she or he will never work a day in future.

Working life — My future-loss reports usually include the person’s typical working life or retirement age, which depends upon gender, age, and the participation contingency. Average or typical retirement usually occurs before the nominal retirement age, typically the 67th birthday, indicated by the participation contingency; a footnote explains the effective retirement age.

An appropriate discount rate and the survival contingency apply to all future amounts or losses, including domestic capacity (employment within the household) and future care outlays; those depend on just discount and survival. While the labour-market contingencies depend on the plaintiff’s education and track record, the actuarial or no-contingency multiplier can serve when the contingencies can be addressed otherwise — or to get a quick magnitude estimate.

The attached schedule shows the actuarial earnings multipliers and the care-cost multipliers at typical ages from 20 to 100.

	mults inc & cc.pdf (right click icon to save, or click to view)

Domestic capacity or household work:

Since Fobel v Dean, impairment of future domestic capacity, or the ability to do unpaid household work, has been a distinct head of general pecuniary damages. I first presented an opinion on this in Coggin v Broman, 1993 BCSC 2452 (CanLII); while the principle was accepted and an award granted, my estimate failed because it presumed a lifetime of lost capacity for a matter that would resolve within a year. The “Cases” tab, which discusses this, also notes that Boucher v Doiron 2000 NBCA 18 (CanLII), (2000), 230 NBR (2d) 247 recognized past loss as well.

Without specific facts, statistics have to stand in here, too: as the basis of a plausible range, I usually cite Statistics Canada’s recent Overview of the Time Use of Canadians 2005, Statistics Canada, General Social Survey, Catalogue n° 12F0080XIE [Ottawa: Minister of Industry, 2006]. A person’s work and family circumstances might suggest more or less than the average.
For a woman’s preaccident potential, the Overview indicates that women (including those who reported no such survey-period activity) work 3.3 hours at domestic activities other than childcare, including 0.9 hour at cooking and washing up, 1.0 hour at housekeeping, 0.9 hour shopping for goods and services, 0.4 hour at other household work, and 0.1 hour at maintenance and repair.

For a man’s preaccident potential, the Overview reports that, averaged over a period of time, men (including those who reported no domestic work) tended to work 2.0 hours per day around or supporting the home — 0.4 hours per day cooking and washing up, 0.3 hours per day cleaning, 0.3 hours per day maintaining and repairing, 0.4 hours per day doing other housework, and 0.6 hours per day shopping for goods and services.

The hours lost per week or per year depend on the facts of the case. For the hourly rate or cost, unless the facts indicate otherwise, I assume $24 per hour. That follows from the earnings of workers in the statistical category of visiting homemakers, housekeepers, and related occupations, tabulated in the 2006 Census, adjusted for the subsequent wage-level change, the overheads that the client pays above the worker’s wage, and typical HST.

Since the average figures include women or men who did not provide services as well as those who did, no contingencies beyond survival apply. The effects of annual survival probabilities and the discount rate, both of which reduce the survival-adjusted present value of later years, suffice to discount one’s domestic work in later years and so obviate any arbitrary age cutoff; the concluding table of examples shows such an age cutoff.

The future annual loss is discounted. While I present the results of doing so at the 2½% and 3½% rates, I assume that the 2½% rate probably applies, for the following endnoted reasons. The two rates differ, as noted above and in Appendix A, §A.1, by a typical 1% annual growth in productivity or real wages.

Domestic-capacity discount — As Appendix A, §A.1 explains, both prescribed rates — the 2½% and the 3½% per year — allow for the time value of money and for effects of future price-level increases, but the 2½% for employment earnings and household consumption supported by it also allows 1% per year for real-wage or productivity growth. The 2½% rate commonly used for employment income differs from the 3½% basic rate used for purchases, ie, by a typical 1% annual average increase in labour productivity or real wages [§A.1].

For these reasons, the 2½% rate probably applies to domestic capacity:

• Unpaid household work is valuable work, whether done by the injured or deceased person or a hired replacement.
• Because it competes with employment or self-employment work for a person’s time and energy, its economic or opportunity cost will tend to rise with increases in the wage level.
• The person performing the work usually enjoys the benefit of the productivity increase, and domestic capacity reflects the person’s own work.
• Household productivity appears to have increased at least as fast as the sluggish real earnings in paid employment or self-employment: real or inflation-adjusted earnings in British Columbia fell in 13 of the last 29 years, rose in 16, and has risen at an average annual rate of just 0.1% over the period. [Figures from BC Stats, Earnings and Employment Trends, various issues, Table 1.1]
• Using the 2½% rate appears consistent with the reasons for judgment in Dewhurst Estate v Schmidtke [1995 BCJ n° 2401, DRS 96–00990, Prince George Registry n° 29087 at p 15] and in Boechler v Edwards et al [2004 BCSC 301 (5 March 2004), ¶ 32 ~ ¶ 35].
• The person performing the service usually enjoys the productivity increase, as noted. Thus for purchased services, unlike those contemplated in domestic capacity, any productivity gains will tend to accrue to the service-providers to raise their incomes in line with the general wage level, which is consistent with applying the 3½% rate to purchased services as well as purchased goods

For those reasons, the summary table [Table A] shows the results using the 2½% rate. Any schedules or tables that calculate domestic-capacity effects, as noted, also show the results of the 3½% rate.

I first considered lost or interrupted domestic capacity in “The evaluation of power system reliability,” [Annals of Regional Science, December 1968].

Expected earnings — statistics versus actual track record

For someone’s expected earnings, one prefers her or his own track record, or failing that a defined salary scale like a nurse’s or teacher’s, or a salary survey like an accountant’s or actuary’s. Failing those, I use the Census tabulations of earnings by the indicated occupational class or education level, adjusted to the current level.

Here are some typical clients’ earnings in 2011, from the 2006 Census in BC, special tabulation, raised to the mid-2011 wage level.

	inc & noc.pdf (right click icon to save, or click to view)

Females v males

Over their working lives, women tend to earn less than men. This persistence in current conditions seems to result mainly from women’s typical family responsibilities. Since Tucker v Asleson, however, a young woman might be evaluated as a man — with a man’s opportunities and typical earnings. (In that case, the then Mr Justice Finch deducted two-thirds contingencies.) Gender parity can fit the facts of many cases, because female students predominate in such faculties as commerce, law, and medicine and because in fields with defined salary structures, women tend to earn at least as much as men. If so, women’s greater survival probabilities give them a greater contingency-adjusted present value or earning capacity than men.

In my first direct evidence in the Supreme Court of British Columbia, in May 1989, I estimated the earning capacity of a recent female UBC Sciences graduate with male contingencies and earnings. I typically assume male earnings and contingencies for a young woman whose marks, courses chosen, or work record supports the assumption of male opportunities, or I might present female and male results. A young woman with a more obviously non-masculine track record — say avoiding maths, sciences, and grade 12 English or history — usually gets the related female contingencies and earnings.

My May 1996 Trial Lawyers seminar on infant income loss (in the “TLABC seminars” tab) showed that at the time, a male high-school dropout tended to have a higher lifetime earning capacity than a female university graduate (partly because he worked in the earlier years while she studied, but despite a woman’s longer life expectancy); this reflected labourers’ opportunities at the time in resource industries and construction. In my remarks that day, I said that I hoped female circumstances wouldn’t apply to my daughter, who was receiving her honours BA that weekend. So far, her earnings (now with a PhD) appear at least to have matched her male academic colleagues’.

Income-tax grossups

Plaintiffs invest a portion of their awards to meet their future needs. They will meet those needs by withdrawing principal and accumulated investment income from the funds, exhausting the funds over their lifetime or other funded period. High returns in the early years are banked to build up the fund to meet later needs. The awards that yield the invested funds are estimated assuming that the investments will yield the standard 3½% per year after adjusting for inflation. Taxes on the fund’s investment earnings erode it, as does taxation of the inflation component of the rate of return. My Appendix B, Income-tax grossups, discusses this.

	app b taxgr 10.pdf (right click icon to save, or click to view)

§I of the appendix explains the need for an income-tax grossup allowance, namely that future losses are discounted at the standard rate of return on investment, and that taxing that return would reduce the actual return by removing part of the income needed over the person’s lifetime. That would exhaust the fund prematurely.
To put it another way, the award is a present value that discounts future needs or losses by the time value of money, which equals standard rate of return on investment after allowing for price inflation. A higher rate of return means a lower present value because you need to invest less today for it to grow to the future amount; a lower rate of return means a higher present value.

Having, say, $1,000 a year from today requires investing $943 today at 6% (= 1000 / 1.06), $966 at 3½% (= 1000 / 1.035), and $980 at 2% (= 1000 / 1.02). If you expect $1,000 at 3½% but taxes reduce that yield to 2%, you get only $986 (= 966 X 1.02). Especially over a lifetime, that shortfall would leave needs and losses unmet.
The grossup allowance added to today’s award is the amount needed to offset that shortfall. In this one-year example, that is the $14 shortfall of the actual $986 from the expected $1,000 ($1,000 = ($966 + $14) X 1.02). The calculation over a lifetime is more complex, but the principle remains: add just enough at the outset to realize the award’s expected annual payments even after taxes.

Appendix B §I also describes the applicability of a grossup allowance, namely to protect invested amounts that replace or compensate for future pecuniary losses that would not have been taxed — future care, domestic capacity, or survivors’ support, as well as future earning capacity of a plaintiff under 21 until she or he reaches that age.
Lost domestic capacity reflects nonmarket domestic work that would have earned no wages and attracted no income taxes. Lost support is reckoned after the deceased or divorced spouse’s income taxes and personal consumption. A dependant’s loss of support arises from her parents’ expected after-tax income. All those balances require income-tax protection. A plaintiff’s foregone employment capacity, however, represents the loss of her or his future earnings, on which she or he would have incurred income taxes, so it does not warrant income-tax protection.

Since without the accident the person would have earned the unprotected income and paid taxes on it at her or his basic tax-rate brackets and tax credits, the returns on the unprotected, wage-replacement fund occupy those lower brackets and apply the basic credits. Earnings on the protected funds occupy the higher brackets and take only their medical-expense or disability credits.
A prudent plaintiff, or one with professional investment management, would tend to make his or her income-replacement fund last a lifetime, adjusting annual draws to allow for any residual employment or pension income. That means that the income-replacement returns will never completely vacate the lower brackets, at least not until an adequate pension begins. The estimated allowance, for a given initial fund or funds and other income, is the least amount that leaves a minimal positive balance at the end of the protected period or the person’s lifetime.

§II of the appendix notes the effect of inflation, namely that the nominal-dollar return is taxed, rather than the real or inflation-adjusted 3½% rate of return. It reviews the inflation data since the 1920s to estimate an expected rate approaching 2½% per year (1.060 / 1.035 = 1.024). That makes the typical rate of return 6% per year.

The tax rate depends on the type of investment income, with both dividends and capital gains taxed more lightly than interest, and the grossup allowance reflects the overall or average tax rate. Plaintiff counsel sometimes suggests that the unsophisticated client can handle only fixed-interest assets — following West v Cotton ¶30. Earning only fully-taxed interest would increase the allowance required (the after-tax yield is lower than for dividends or capital gains), but it doesn’t work because only equities tend to return as much as the required 3½% per year in the long run. Investing in equities often requires professional investment management (except for the sophisticated or the fairly old or otherwise short-lived), though, and investment-management fees attract their own grossup allowance [see below].

Appendix B §III reviews the data for actual rates of return, after stripping out inflation, since the mid-1920s. This shows that the mix of assets does not equal the mix of incomes. Equities so far outperform fixed-interest assets over a period of years that, even with the majority of funds invested in fixed-income securities, equities tend to create about two-thirds of the income. Only equities, as noted, tend to achieve at least the expected 3½% per year after stripping out inflation. T-bills and other short-term debt tend to earn much less. So do bonds, especially after recognizing that the capital gains from holding them as inflation and interest rates have plunged since the 1980s — such gains contributed much of bond returns — are unlikely to recur.

The overall or average tax rate also depends on the split between dividends and capital gains. For a reasonable selection of equity issues, in which the most senior pay dividends, equity returns will tend to divide fairly evenly between dividends and capital gains. Thus investment income tends to divide fairly evenly among the three types, interest, dividends, and capital gains. Naturally I can assume such other income proportions as ½ interest, ¼ dividends, and ¼ capital gains, especially for a relatively short period or remaining lifespan.

I can find the allowance for specific amounts or for a range.

Investment-management fees

Plaintiffs invest a portion of their awards to meet their future needs; they will meet those needs by withdrawing principal and accumulated investment income, exhausting the fund over their lifetime (or other funded period).
In the longer term, attaining the standard 3½% per year after inflation requires investment in equities, not just safer, fixed-interest assets [see “Income-tax grossups” above or Appendix B §B.3(i)]. Some plaintiffs can manage their own funds and equity holdings, perhaps with an annual advice allowance as part of their future care. Other plaintiffs and their funds will require full, continuous investment-management services, including custody of the fund, accounting, and discretionary responsibility for making and carrying out investment decisions. Perhaps they or their family can manage themselves now but will require professional assistance in future.

The point of professional management is not to earn superior returns but to conserve their funds so as to meet their needs by realizing the standard, real 3½% per year assumed in damage awards. Real means after or adjusted for price-level inflation.
The need for any such grossup allowance arises because the management fees reduce the investment income below the rate of return that discounts future needs; awards presume that the funds invested to meet the plaintiff’s future needs will earn interest or other investment income until withdrawn — making the present value of her or his future needs or losses less than the total of the eventual amounts. Investment-management fees on the principal and income of the invested funds, like income taxes on the investment income, will reduce the actual net returns below those presumed and so tend to erode the funds before they have met her or his needs.

Because managed funds tend to earn more than the standard, inflation-adjusted 3½%, however, the grossup allowance for investment management may be discounted. In Bystedt v Hay, 2007 BCCA 84, the Court of Appeal discounted the management-fee grossup by 40% on this account [§19].

If the plaintiff’s invested funds will require professional management, the entire future or invested proceeds will require protection against investment-management fees, while most income-replacement awards do not warrant protection against income taxes, as the preceding section noted.

A typical fund custodian and manager, TD Canada Trust, would charge an initial ½% of the invested principal to set up the account, a minimum of $1,000 and a maximum of $8,000. Then annually it would charge the greater of $8,000 or 0.8% on the principal. These fees are exempt from HST and deducted from taxable income for income taxes. This applies to all future awards.

I discussed this in my presentation to the Trial Lawyers in February 2008.

	Grossups & Part 7 Document.pdf (right click icon to save, or click to view)

Low income

My practice is to recognize that at some fairly low level, the favourable opportunities would just offset the negative contingencies. No contingencies, apply, ie, to such modest incomes. That level will tend to reach $29,900 per year or $14.35 per hour in mid-2011, as in this endnote:

Opportunities and contingencies — The potential income level and the applicable contingencies are related. Consider two extreme points.

Low — Continuing a salary of zero, which can’t be further reduced, would face only favourable opportunities.
High— Continuing an income of, say, a million dollars based on commissions from one year’s sales of options or other derivatives on pools of subprime mortgages would face large negative contingencies.

This is consistent with majority in Pickering & Pickering v Deacon, which held that no negative contingencies need apply, on balance, to an annual income of $15,000 in 1984 [Lambert, J.A., 58 BCLR 161–63, 1984].

British Columbia Earnings and Employment Trends reports that the average wage has nearly doubled (up some 90%) since then. It rose from $426 per week in 1984 to $825 in 2010, and it has been rising at an annual rate of 3% [Victoria: Ministry of Government Services, October 2010]. At that rate, average weekly earnings will approach $850 in mid-2011. That increase from 1984’s wage level suggests that the negative contingencies need not apply to earnings under some $29,900 per year in 2011, or $14.35 per hour for full-time work.

An anomaly can result if a person’s expected earnings exceed the no-contingency level by too little to offset the contingencies. Where the earnings evidence supports it, in such a case I assume the no-contingency level.

Low-income sample

The attached sample report shows such a case. While it differs from most future-loss cases in assuming earnings within this low-income exclusion from labour-market contingencies, it shows my typical outline and approach.

	app a.pdf (right click icon to save, or click to view)

	sample report.pdf (right click icon to save, or click to view)

	sample scheds.pdf (right click icon to save, or click to view)

A man’s loss of financial marriage benefits

A woman losing the ability to marry or form an equivalent relationship, or suffering the loss of one, suffers a recognized loss. Since a woman typically earns less than her husband, her standard of living benefits from sharing a household and pooling incomes with him.

A man losing the ability to marry or form an equivalent relationship, or suffering the loss of one, might also suffer a recognized financial loss even if he earned more than the spouse. Because of the deadweight cost of a separate household, the husband’s standard of living can also benefit from marriage — two can live more cheaply together than alone, even if not so cheaply as one. A man usually benefits from a wife’s household services as well. If, eg, some negligent act triggers a divorce, he has incurred the deadweight household cost and also lost his share of the services (women tend to do more household work).

I first addressed the deadweight cost in 1989, in Mckenzie v Van-Kam Freightways Ltd. As discussed in the Cases section, this principle was acknowledged but the loss was offset against the savings the couple realized in having no costly children.

Multiplier reports

Multipliers, or the survival-adjusted present value per $1,000 per year of future earnings or earnings loss or care outlays, translate the future amounts to their present-day values. As noted above, every report involving future losses includes the applicable multipliers and examples of using them to evaluate various future losses.

For a quick analysis, especially while the future losses remain uncertain, I can supply a multiplier report. A basic one differs from my usual report in just reporting the multipliers’ calculation and illustrating their use. That omits any assumed facts except date of birth and normal life expectancy — and any opinion — but it still incorporates the Rule 11 disclosures.

	mult report.pdf (right click icon to save, or click to view)

Part 7 benefits

The value of a stream of any ICBC Part 7 benefits is its survival-adjusted present value, not the nominal lump sum. The long-term inflation rate of nearly 2½% per year makes the effective discount rate, not the prescribed real 3½%, but the effective 6% on any future benefits that are not indexed or otherwise adjusted for inflation. My TLABC presentation February 2008 discussed the evaluation of these benefits.

	Grossups & Part 7 Document.pdf (right click icon to save, or click to view)

Partial disability

For a case in which someone’s capital asset of earning capacity has been impaired but the actual effects cannot be predicted accurately, Brown v Golaiy allowed a year’s typical earnings. I use a special tabulation of Statistics Canada’s Participation and Activity Limitation Survey [PALS] to approximate the change in the likelihood that the person will be employed and the reduction in earnings if employed. The figures classify subjects by gender and level of education — the statistical factors that determine labour-market contingencies and typical earnings — and by severity of disability. They can also be classified into broad education and age brackets.

	tlabc disability pals.pdf (right click icon to save, or click to view)

This approach was accepted in Mahe v Boulianne (2008 ABQB 680), Ralston v Rose (2003 BCSC 647), and Messmer (Guardian of) v Daley (1991 BCSC 1170). My paper in the TLABC December 2009 “Chronic Pain” seminar discussed this.
Here are three typical results:

Female secondary graduates with mild-to-moderate disability show typical employment and earnings effects: less likely to be employed, tending to earn less if they are employed. Male university graduates are fairly likely to continue working despite injury, but they tend to earn less than otherwise. In the case of men like Joe the welder, with a partial trades or other postsecondary qualification, the higher-paid ones tend to return to work (perhaps because they can earn more than disability benefits), and many retrain; thus these figures show an increase in expected earnings of 0.3%.

Past earnings loss

Lost past earnings are special damages that are estimated after the income taxes and Employment Insurance [EI] premiums that would have been paid on the income. EI premiums, like the plaintiff’s contributions to the Canada Pension Plan [CPP], are a credit against taxable income, though the CPP contributions are not deducted from the loss. As a practical matter, the rates, brackets, and credits of the prior year apply, as in this note:

Taxes and EI contributions deducted — Because the tax rates and brackets for a year are not known until after that year’s federal and provincial budgets, §95 and §98 of the Insurance (Vehicle) Act specify estimating each year’s taxes and EI contributions under the terms of the prior year (2004 under 2003 terms, etc). Since income taxes and EI contribution rates have been steadily reduced over the last several years, this somewhat overestimates the actual deductions and so, unavoidably, tends to understate the specified loss at the rate of each year’s tax cuts.

Court order interest is added to this loss. While I don’t usually compute this, given the amounts and timing of the several receipts and payments, I can.

Pensions as employment income

An employer’s contribution to an employee’s pension is part of the compensation that can be affected by personal injury or similar event. The employer’s pension contribution can often be treated as part of annual earnings, like the employer’s contribution to an insurance plan. Other cases warrant analyzing the pension and estimating its expected and lost value net of the employee’s contributions; this is discussed in “Value of a pension” below.

Self-employed or business owners

The owner-manager of an incorporated business can usually direct any earnings to the business or to his or her personal account as management wages; this usually calls for ‘piercing the corporate veil’ by integrating the two — and any other affected businesses or ventures. Estimated income loss typically equals the change in revenue less the associated variable costs; that requires distinguishing fixed costs (which do not vary systematically with revenue) from variable costs (which do). Any personal or household expenses paid from the business are added back.

Statistics versus specific facts

One prefers specific facts about a person but selects and uses statistics for typical, broadly similar persons or firms in the absence of such specific information on such matters as the chances of living and working in future years, or future earnings if healthy and employed but without a sustainable track record.

Structured settlement

A structured settlement for future losses is a guaranteed, tax-free annuity that provides full investment custody and management— no risk, no tax, no management fees, no grossups — on the structured amount. If the annuity company failed, the industry fund would backstop it. The Court orders the structure (usually with plaintiff agreement), and the agreed funds are transferred directly from the paying insurance company to the insurance company that provide the annuity. The terms, which are fixed for life, can include annual increases, say “graded” at 2% or 3% per year, basic increases or decreases at various life stages, and periodic lump-sum payouts. I can help analyze the terms.

Survivors’ losses

In a family-compensation case, the survivors’ support losses depend not only upon the earnings of the deceased after contingencies and taxes but also on how household expenditures divide. The benefit of sharing a household is that a member enjoys a higher level of support or standard of living than she or he could afford just from her or his own income. Not only do lower-income members share in the higher incomes of other members, but also all members benefit from sharing such common assets and outlays as the home (as in marriage benefits, above). Someone losing non-earning, non-supporting dependants to an accident suffers no pecuniary loss, but inducing a divorce imposes at least the deadweight cost of a second household [see…

My Appendix B, Household sharing, analyzes Statistics Canada’s Survey of Household Spending into personal or divisible outlays, which the partners would have divided among themselves and any children, and common or indivisible outlays, which each could consume or enjoy without materially affecting the others.

	app b hh exps.pdf (right click icon to save, or click to view)

This analysis suggests that, for a wide range of household sizes and incomes, common expenditures approximately equal divisible expenditures —one-half each — thus:

Personal or divisible outlays include food, clothing, health care, personal care, and education, plus half of transportation, recreation, reading materials, miscellany, and gifts. These make up about half of total after-tax income, and they tend to divide equally among the household members. In a household with two parents and two children, eg, each member would benefit from one quarter of the divisible half of after-tax income.

Common or indivisible outlays include housing, utilities, maintenance, and other household operation, furnishings and equipment, and the balance of transportation, recreation, reading materials, miscellany, insurance, pension contributions, and gifts. These approximate the other, common half of total after-tax income. To avoid double-counting, the common half is assigned to the surviving spouse, though it could also be divided among the surviving spouse and the children living in the home.

This broad-based set of statistics best represents a family’s expenditure or support pattern over their lifetime, absent specific indications otherwise. Absent specific information, I also assume that it best approximates the division or sharing of household services.

Trusteeship or committeeship fees — The Public Guardian and Trustee of British Columbia

The Public Guardian and Trustee (PGT) is authorized to hold funds in trust for a child (until the age of 19). This may be under a will, a trust agreement, or a court order; a child may also be entitled to money as compensation for injuries from an insurance policy or from monies left to them by a family member. The Trustee may also act for adults as Committee of Estate, Committee of Person, Power of Attorney, Representative, Litigation Guardian and Pension Trustee; for the majority of adult clients, the PGT is Committee of Estate under the Patients Property Act.

Money paid to the PGT in trust for the person is invested and administered on the person’s behalf.

The cost of committeeship by the Public Guardian and Trustee, like the cost of investment management, would deplete the fund invested to cover future costs or losses and so requires a grossup allowance. If the PGT manages her invested funds, it would charge a one-time capital charge of 5% to set up the account on receipt, 5% against each year’s income, and 0.4% of the principal each year, and 5% of the year’s investment earnings. GST applies to those fees, and unlike the fees of commercial investment managers, they are not tax-deductible for income taxes.

This warrants a committeeship-fee grossup, which under Lines v W & D Logging Co Ltd [2009 BCCA 106] ¶122 supplants any investment-management allowance.