Apr 01, 2002

Nude Beach - Disclosure or Not: Latent or Patent Defect?; Limitation Act - 30 Year Limitation Period: Right to Sue Municipality Lost #346


By Gerry Neely

Full disclosure and view property take on entirely different meanings when a nude beach is involved. Some buyers might think a nude beach next to their lakefront property is an asset - e.g., "For sale - a lakefront rancher in dilapidated condition, but next to a nude beach." However, a buyer who put up a $100,000 deposit thought differently. He repudiated before closing when he discovered that he would be sharing his beach with people lacking discernable ID and visible means of support.

Five days after his conditional offer had been accepted, he removed the only condition, which concerned a house inspection. A few hours after the contract became unconditional, the buyer learned of the nudity problems from a neighbour and stopped payment on his cheque. The owners sued for the deposit. The buyer's only defense was that the owners, through their agents, had a duty to disclose the nude beach and the subsequent overflow onto the beach in front of the property.

If this is a defect, is it latent or patent? The parties agreed that it was not a patent defect. Even in the sunny Okanagan, few people are likely to sunbathe on a Kelowna beach in November, when the offer was made. All latent defect cases presented by the owner dealt with damage to a building or property. The buyer's counsel was unable to produce evidence of the impact that a parade of nude bodies has on the value of adjoining properties.

Welcoming or rejecting nudity is the result of the exercise of a personal preference; it cannot be measured by a standard and therefore is not a defect. The judge also noted that the buyer had five days to talk to the neighbour who readily disclosed this problem after the condition was removed. VIVA CAVEAT EMPTOR. The buyer was ordered to pay the deposit and two years' court-ordered interest on $100,000.

This must have been an entertaining case to hear and argue for everyone but the buyer. No one found it necessary to raise the question of the uncertainty of the definition of a nude beach. With the brevity of today's swimsuits (about which I make no complaint, butt would their theme song be a "Thong to Remember"?), where could one find an objective standard to apply?1

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The Limitation Act provides reasonable protection against stale claims by requiring the person intending to sue to do so within the times set forth in the Act for the type of wrong upon which the claim is based. Thirty years is the maximum period set by the Act for an action for damages for a negligent act or omission committed in the processes leading to the construction of a house.

The buyer of a home, for which West Vancouver had issued an occupancy permit in May, 1963, saw cracks in the foundation at the time of purchase in 1987. In 1991 she noticed the floor was uneven. She did nothing until 1999, when a mud slide in her backyard led her to retain a geotechnical engineer who discovered that the house was built on improper fill containing logs. The soil supporting the foundation moved into the gaps created by the decomposing logs.

The owner sued the municipality for failing to properly inspect the house during construction. The first issue to be decided was whether her claim was out of time. Her success depended upon establishing that her right to sue arose later than November 21, 1963. The owner argued that her right to sue could not arise until the consequences of the improper fill became apparent when the cracks appeared in the foundation. That argument failed because the first owner would have had the right to sue the day after taking possession if the owner had discovered the defect, because he had received damaged property. He would not have had to wait until the cracks became evident.

The owner's second argument was that a new right to sue occurred when she bought the property. That would mean an extension of the 30 year period each time the property changed owners. This argument was rejected because it was contrary to the intent of the Act.

The owner lost her right to sue through her failure to act promptly when she noticed the signs of settling. 2

 1.Summach v. Allen et al., S.C.B.C., Kelowna Registry, Reasons for Judgment, January 24, 2002.
 2.Arnstrong v. Dist. of West Vancouver, S.C.B.C., Vancouver Registry, Reasons for Judgment, January 29, 2002.

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