'Reprehensible' lawsuit was attempt to get former owners to pay for home renovations, B.C. judge rules

Penticton provincial court is seen in this undated photo from the B.C. provincial court website. (provincialcourt.bc.ca)

A B.C. provincial court judge didn't mince words in dismissing a homeowner's lawsuit alleging that the previous owners had fraudulently misrepresented latent electrical defects in the home.

In a decision issued in Penticton provincial court earlier this month and posted online this week, Judge Shannon Keyes called the conduct of claimant John Archer "reprehensible" and concluded that he and fellow claimant Douglas Bertz had taken their claim to trial "with no reasonable basis for success."

LAWSUIT CLAIMED ELECTRICAL DEFECTS

The claim centred around several alleged defects in the property, the most significant of which was electrical wiring that had been installed in 2005.

Keyes' decision does not indicate when the claimants purchased the home, but refers multiple times to the previous owners living there for 18 years.

Archer and Bertz claimed that an electrical permit from 2005 described "kitchen and ensuite renovations," but that their electrician had found new wiring in other parts of the home.

They asked the judge to infer that the previous owners had this work outside the kitchen and ensuite done without permits. They also asked the judge to rule that the previous owners had knowingly misrepresented the home as being free of unpermitted electrical work on their property disclosure statement (PDS) when selling.

Archer and Bertz also claimed that the "kitchen hood fan was not vented to the outside, there was no exhaust fan in the ensuite bathroom, one of the smoke alarms did not work and the exterior electrical outlets protruded from the siding," and sought $35,000 in damages from the defendants, though they reduced this ask to $21,000 at the start of the trial.

BUYERS MADE OFFER WITHOUT SUBJECTS

In their defence, previous owners Jeremy and Marilyn Eden maintained that they had the proper permits for the work and that their PDS was true.

Moreover, regardless of whether the statement was true, they argued that the claimants did not rely on the representations in the PDS when deciding to buy the home, which they purchased "without subjects" and for $50,000 more than the asking price.

"The claimants were so determined to purchase the house that they paid no attention to any of the readily observable items they now complain about; they chose not to retain a home inspector; and presented a 'without subjects' offer to purchase significantly in excess of the asking price," Keyes wrote in the decision, summarizing the defendants' argument.

After reviewing the evidence, the judge concluded that the defendants' PDS was true. The contractor that did the work got a permit, and the former homeowners were not aware of any unpermitted work when they sold the house, according to Keyes.

Further, the judge noted that Archer and Bertz chose not to hire a home inspector, a decision she inferred was made because Archer was "a sophisticated purchaser and renovator of residential property."

"Having chosen not to retain the services of a qualified home inspector, the claimants cannot then complain about failing to observe defects that anyone, including a qualified home inspector, would have observed," Keyes wrote.

CLAIMANTS PLANNED 'EXTENSIVE RENOVATIONS'

Similarly, the judge found no evidence that the alleged latent defects in the home's wiring were serious enough to render the house dangerous or uninhabitable.

"It had remained occupied for 18 years while it was occupied by the defendants and for several months while occupied by the claimants without showing any signs of electrical hazards," Keyes wrote.

"Further, the claimants continued to occupy it while it was being repaired – Mr. Archer testified that he and his partner and friend only moved out for a week during drywall repairs – because he is allergic to drywall dust, not because the electrical system rendered the house uninhabitable."

The judge noted that Archer testified that he and Bertz planned to make "extensive renovations" to the home, but that those renovation plans did not start until after the work to remedy the alleged defects had been completed.

However, the claimants' electrician told the court he believed he had been hired to work on a home renovation project, and that he knew from the start that the owners intended to renovate.

Keyes wrote that she found it "highly unlikely" that Archer and Bertz conducted remedial electrical work on the home – including removing and replacing drywall and painting it, as submitted invoices showed – "only to tear out walls and windows and then have to do drywall repairs and paint all over again in the same year."

"I find the invoices submitted, if they pertained to this house at all, were in connection with renovations the claimants chose to do," the judge wrote. "I accept the submission made on behalf of the defendants that the claimants brought this lawsuit simply to have someone else pay for their renovations."

PENALTY FOR 'REPREHENSIBLE BEHAVIOUR'

Keyes dismissed the lawsuit and awarded court costs to the defendants. She also imposed a $4,000 penalty on the claimants for pursuing their case through trial despite having no reasonable basis for success.

"The claim had no merit whatsoever," the judge wrote.

"The claimants sought damages in their claim of $35,000, which also appears to have had no foundation whatsoever. Mr. Archer announced that he was pursuing only $21,000 on the first day of trial. Thus, not only did the claim have no reasonable basis for success, it was also grossly exaggerated. Mr. Archer alleged fraud when there was no evidence whatsoever of any fraud. He alleged dishonesty when there was none – except perhaps his own. This is reprehensible behaviour."