Renovator loses lawsuit against B.C. homeowners who refused to pay double the estimate
B.C. Supreme Court judge rules it was renovator — not the homeowners — who had breached the contract
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A B.C. Supreme Court judge has sided with a Campbell River couple who had to defend themselves against a breach-of-contract lawsuit from a renovator they fired after the company doubled the estimate for a small home renovation.
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Element Restorations sued Michaela and Alvin Arruda after the couple balked when the estimated $35,350 bill for a 120-square-foot addition to their house doubled to $70,000, according to a judgment by Justice Robin Baird.
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The Arrudas put their faith and trust in the contractor, he wrote. “In my view, the plaintiff let them down badly and thereby caused them a good deal of undeserved stress and aggravation.”
The couple had paid about $21,000 as an initial down payment and was told a month into the renovation that the work so far had cost an additional $33,000, with still $12,000 more needed to complete it.
The couple said, at that point, the job was 71 per cent over budget and they still hadn’t received anything in writing to explain why.
They wrote the builder to express alarm about the “drastic overshot on the initial quote.”
“We feel like you’ve pulled the wool over our eyes on this job,” wrote Michaela in her email.
The company’s owner became involved to “solve a clear and acknowledged case of significant under budgeting,” wrote Baird.
Almost six weeks after the job was started, the couple received an itemized accounting of expenses from the owner, almost $55,000, with an estimated $12,600 needed to finish the job, he said.
The owner did offer to waive the company’s 20 per cent labour costs and charge the couple almost $50,000 for the work that had been done so far without completing the final estimated $12,600 in work, according to the judgment.
The Arrudas terminated the contract without further payment and hired another contractor to complete the job for about $9,000, it said.
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The company sued for breach of contract. The Arrudas countersued for the amount they paid the second contractor but, at the four-day March trial, said they were only seeking a dismissal of the company’s lawsuit.
Baird found the company’s evidence about earlier price increases didn’t show justification for increased costs. The bill of $70,000, before the $12,000-plus to finish the job, is “not a reasonable margin of error in budgeting,” he said.
The company breached the contract by under-quoting the cost and failing to keep costs to within the estimate or notify the homeowners of budget changes, Baird said.
He dismissed the lawsuit, so the couple ending up paying the down payment, plus the extra costs to the second contractor, “which was slightly less than the $35,350 quoted.”
“In my view, in all the circumstances, this is the best outcome that the plaintiff is reasonably entitled to expect,” Baird concluded.
