A South Okanagan couple have been left the hook to pay $400,000 after they had a custom house built for them but didn't bother to draw up a written agreement.

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A South Okanagan couple have been left the hook to pay $400,000 after they had a custom house built for them but didn't bother to draw up a written agreement.

According to an Oct. 7 Supreme Court of BC decision, the two parties fell out when the contractor issued a final invoice of $304,000, and the couple didn't pay up.

"This case illustrates the difficulties that can arise when parties enter into an oral contract without reducing any part of the contract to writing," BC Supreme Court Justice Christopher Greenwood said in the decision.

The case involves former Naramata fire chief Tony Dias Trovao who with his wife Jodi Nicolle Trovao hired Solaris Custom Homes to build them a house.

The decision said Tony Trovao was friends with Solaris Custom Homes owner Ross Manning because Manning had coached his son’s soccer team.

In 2018 the two men would meet for coffee or at the Naramata firehall and they began discussing Manning's company building a house for the Trovaos.

In 2019 work started on the 2,000-square-foot property in Naramata but no written contract was ever drawn up.

The decision said the two parties had an oral contract that the Trovaos' would pay all the construction costs and labour plus a 12% fee and tax.

Manning said a written contract would ordinarily be the first step, but the Trovaos' were slow to make decisions on things and eager for work to get started, and nothing was ever put in writing.

As construction got underway, Solaris Custom Homes began sending the couple invoices at certain stages and the couple paid them immediately.

An invoice was issued for almost $400,000 and the couple paid $310,000 the next day but then things started to break down.

"By that stage, the cost of the project was already over $600,000 and the house was not complete. The Trovaos were upset," the decision read.

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The fourth and final invoice for $280,000 was issued in April 2020 and has yet to be paid.

The Trovaos' argued that they were not obliged to pay any amount beyond the agreed-upon budget.

A month later, Solaris put a lien on the property and eventually sued the couple for the outstanding bill of around $300,000.

The Trovaos argued they had an oral contract which included a total budget for the project and the builder had exceeded it.

Solaris Custom Homes argued the oral contract didn't include any final budget.

The 31-page decision gave a lengthy play-by-play of multiple conversations the couple had with the contractor over the course of the construction.

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The Trovaos' argued they set a $250 to $300 per square foot price and discussed it 30 or 40 times with the builder.

The Justice didn't buy it.

"Had such conversations occurred with anything close to the regularity he described, I would have expected it to generate further discussions that the parties could recall, or some reference to the specific budget amounts in writing," the Justice said.

During one of the many conversations the the company said if the couple did not have the money, they should have stopped the construction.

"Mr. Trovao responded that it was Solaris who ran the show and they should have advised him to stop," the decision read.

One of the conversations was confrontational and surreptitiously recorded by the Trovao's.

Justice Greenwood parsed through the evidence given from both sides to decide whether the parties' oral contract did in fact have a budget cap.

"There was very little evidence of anything that Mr. Manning said that would lead a reasonable person to conclude that he agreed to a budget as a term of the contract," the Justice said. "If the total cost of the project was centrally important to the Trovaos, it is reasonable to expect that they would have insisted on receiving a firm estimate from Solaris before proceeding. I can find no evidence that that took place."

The Justice said just because the Trovaos were "cost-conscious" and that was discussed with the builder that wasn't the same as having a contract with a budget cap.

"In my view, (Solaris Custom Homes) incurred significant costs to complete the project, and it would be unjust to effectively force Solaris to carry those costs based on a budget that was never agreed to," the Justice said.

Ultimately, Justice Greenwood ruled no budget cap existed in their verbal contract and ordered the Trovaos' to pay the builder, and former friend, $310,000 to cover the final invoice plus $86,000 in interest.

The couple have 90 days to pay or the property will be sold. They're also on the hook for legal costs.

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