Claimant’s believability at trial harmed by his non-disclosure to CRA of his tips as a server

Mr. McLatchie, a 46-year-old server, continued to suffer from chronic pain & a psychological reaction 5 years after his MVA. He claimed that his injuries limit his work ability.

At trial, he admitted that he had received tax credits & health benefits from governments by under-reporting his income to the CRA.

 

Mr. Justice Masuhara found that Mr. McLatchie hadn’t reported his tip income on his tax return. He estimated that Mr. McLatchie’s actual income was three or four times what he reported.

 

As a result of his under-reporting, Mr. McLatchie received benefits such as:

  • the child tax credit,
  • Pharmacare,
  • taxpayer-funded money that paid for truck driving lessons &
  • EI payments.

 

Mr. Justice Masuhara found that the claimant’s under-reporting of his income affected the reliability of his evidence relating to the effect of his injuries on:

  • his work capacity,
  •  his future plans &
  • the financial damages he claimed.

 

At trial, Mr M’s lawyer argued for an award of $175,000-$250,000 for loss of future earnings capacity. ICBC’s lawyer argued for an award of $150,000-$160,000.

The Judge agreed with ICBC’s lawyer and awarded Mr M $160,000 for his loss of future earnings

 

The judge would most likely have awarded Mr M greater compensation if his truthfulness had not been undermined by his tax evasion. 

 

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