Former homeowners devastated by ruling on liability for flood damages

Lawyer says municipalities ‘on notice’ by judgment that finds Happy Valley-Goose Bay partly responsible

Daniel MacEachern
Published on August 9, 2014

The former owners of a house in Happy Valley-Goose Bay are “devastated” they’ve been found liable for flood damage done to the house after they moved.

“I would rather let it rot than sell something that there was something wrong (with). We’re honest people,” said Loni Patey on Friday, a day after The Telegram reported she and husband Keon Patey were found 80 per cent responsible for more than $20,000 in flood damages done to a home they built and then sold to Gwen House and Jeffrey Harding.

The judge found the Town of Happy Valley-Goose Bay liable for the other 20 per cent of damages because the town didn’t properly inspect the house as it was being built, and that the house’s foundation wall wasn’t, as is required by town regulations, built at least four feet above the finished road.

“This construction failure created a bowl of the building lot with the house and garage built in the bottom of that bowl. Flooding was a foreseeable and likely outcome,” Judge John Joy ruled in a decision issued July 31, following a three-day trial in December 2012.

Apart from the financial obligation, the Pateys are worried about the ruling’s effect on their reputations.

“It’s very painful. This is our name,” said Loni. “We would never have sold the house knowing something was wrong. We would never have done that.”

The Pateys said they relied on the town and the expertise of the contractors they hired to build a house that met all applicable regulations. They planned to live in the house permanently, said Loni, but after two years had to move to the island — they asked their current location not be publicized — to be nearer to relatives.

“We had aging parents on the island that needed us, and we moved out for them, to be able to be near them,” said Loni. “We didn’t build and sell to make money. That wasn’t the original intention. … It was to be our home,” Keon added.

The ruling from Joy found no negligence or misrepresentation on the Pateys’ part — and House and Harding didn’t allege any — which makes the Pateys wonder why they’re now being blamed.

“I don’t understand why the ruling went 80 per cent. If we didn’t do anything fraudulent, why are we being held accountable for 80 per cent?” said Keon.

The Pateys aren’t sure yet whether they’ll appeal, but plan to get legal counsel.

“We’re exploring our options,” said Keon.

But the ruling has broader implications for municipalities and the province, says the lawyer for Harding and House.

Jim Bennett — also MHA for St. Barbe — said the ruling puts municipal governments “on notice,” but noted many small towns don’t have the resources for full-time building inspectors. And it’s not just building regulations, said Bennett — vital needs like electrical inspections and water monitoring can’t have any gaps. In this case, lack of proper inspection resulted in $20,204.42 in flooding damages, he said, but a gap in other areas could have far worse consequences.

“What if you’d had a fire because there’s an electrical inspection deficiency and something wasn’t caught?” he said. “It could have been something more serious. I think, overall, we need to be very wary of changing times and tightening regulations and increasing levels of responsibility.”

Bennett noted the Walkerton tragedy of 2000, when seven people died in an E. coli outbreak that an inquiry determined should have been prevented by the Ontario town’s water-supply managers and with proper funding from the provincial government.

If municipalities in Newfoundland and Labrador don’t have the resources to properly make sure regulations are enforced, said Bennett, the provincial government needs to address the problem.

“Provincial governments can delegate authority. They can’t necessarily delegate responsibility, by saying, ‘Well, now it’s the town’s fault, the town must do it,’” said Bennett.

Twitter: @TelegramDaniel