The respondent was injured in a motor vehicle accident and awarded damages.
The trial judge reduced the management fee award by 50 percent to account for a predicted increased return from investment counselling, and deducted the respondent's legal fees and house purchase from the amount used to calculate management fees and tax gross-up.
The Court of Appeal reversed these deductions.
The Supreme Court of Canada dismissed the appeal, holding that the statutory discount rate is mandatory and cannot be circumvented by reducing management fees.
Furthermore, damages are assessed as a lump sum, and how a plaintiff chooses to spend the award (e.g., on a house or legal fees) is irrelevant to the calculation of management fees and tax gross-up.
