In Brink v Xos Services (Canada), Inc., 2025 BCSC 658 (CanLII) Justice Hughes had a situation where the parties agreed on the settlement number
( $441,667.00 USD ) but the defence offer was based on ” less statutory deductions” and the plaintiff accepted the offer on the condition that it be on the basis that it be treated as non employment income.
In Canadian terms this would be asking that the settlement funds be treated as ” general damages” which apparently attracts no taxation.
This is why the Judge ruled that there no settlement :
“However, the tax treatment of the settlement payment was a condition of fundamental importance to both parties. As an employee, the plaintiff was typically taxed at a rate of around 32% which, if applicable to the settlement funds, would result in a tax deduction of up to $143,300. The plaintiff sought the full settlement amount with no source deductions. The defendants offered to pay the settlement amount less applicable deductions, to avoid any negative tax implications for them. This is a significant gap that cannot be overlooked or resolved by resorting to common sense or common practice, as was discussed in Fieguth.”
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