Executive Summary: Key Legal and Evidentiary Issues

• Central dispute concerns whether the plaintiff builder or the defendant homeowners terminated the construction contract on June 15, 2022

• Court found the plaintiff repudiated the contract when Mr. Gamble told defendants his crew had quit and he was backing them

• Defendants' statement "No, you are outta here" constituted acceptance of the plaintiff's repudiation, not termination of the contract

• Conflicting affidavit evidence between Mr. Gamble, crew members, and defendants regarding the events leading to contract termination

• Application of well-settled repudiation law requiring unequivocal intention not to perform and clear acceptance by the innocent party

• Third-party claim against the designer dismissed as moot following the plaintiff's failed action

Background and contractual relationship

Chase Gamble Homes Inc. entered into a written contract with Darcy Allen Kehler and Krystal Ritchie on February 9, 2022, following the issuance of a building permit in November 2021. The agreement required the plaintiff to provide overall project management and supervision for the construction of a stand-alone garage on the defendants' property. In exchange, the defendants agreed to pay a $10,000 project management fee in four equal instalments plus all invoices for sub-trade costs within two weeks of receipt.

The emergence of construction concerns

Construction progressed until June 14, 2022, when after the roof trusses were partially installed, the defendants noticed that the roofline on the garage did not match the roofline on their residence. The defendants had ordered the roof trusses from a supplier and signed off on images of the trusses before they were built. The defendants also expressed concerns about the limited storage space in the garage attic and that no drop-down stairs had been built into the attic. These concerns prompted a meeting between Chase Gamble, the principal of the plaintiff, and the defendants on the morning of June 15, 2022.

The critical meeting and its aftermath

During the meeting at the defendants' house, Mr. Gamble described the parties' choices. He said that he could choose to quit the job, or an option was to continue the job as is, without changes. He explained that while the trusses could be removed and new trusses built with the pitch matching the house, this option was likely to cause much delay and much additional expense; the defendants did not perceive it, as presented, as being a realistic choice. Despite their unhappiness, the defendants felt they had little choice but to stay the course and told Mr. Gamble they would have him continue as is. Because the plaintiff was to continue with the job, they raised issues they had with the plaintiff crew's work ethic. Mr. Gamble left the defendants at the house and went to where the garage was situated on the property to speak to the crew. After conferring with his crew, Mr. Gamble told the defendants that the crew had quit and he was backing them; he also assured them that he would find them a replacement contractor who could finish the job. The court accepted the evidence of the crew members that they did not tell Mr. Gamble they were quitting. When Mr. Gamble indicated that his crew should get back on the roof so he could try to resolve the situation, the defendant Ritchie said "No, you are outta here." That same day, Mr. Gamble sent an email attaching his "final invoice."

The court's analysis of repudiation

Justice Thompson applied the legal framework for contract repudiation as summarized in 0731431 B.C. Ltd. v. Panorama Parkview Homes Ltd., 2021 BCSC 607, which requires demonstrating that one party evinced an unequivocal intention not to be bound by the terms of the agreement, and that the innocent party had accepted and communicated an acceptance of the repudiation to the party in breach. The court found that when Mr. Gamble told the defendants that his crew was quitting and that he was backing them, in the context of having presented as one "solution" the quitting of the job by the plaintiff, this was a repudiation of the contract by an unequivocal refusal to continue with the most essential obligation: building the garage. Ms. Ritchie's statement was a clear expression of the defendants' acceptance of the plaintiff's repudiation of the contract.

Ruling and outcome

The Supreme Court of British Columbia dismissed the plaintiff's action. The court found that Chase Gamble Homes Inc. repudiated the contract, which the defendants accepted, and the plaintiff is therefore disentitled to pursue its contractual claim for $18,245. The court ordered that if the claim of lien is still registered against the defendants' property, it shall be discharged. The defendants' counterclaim and the third-party proceeding against Tim Maertz doing business as TM Building Designs were dismissed as moot. Costs may be spoken to; no specific monetary amount was awarded or determined in the judgment.