The Supreme Court of British Columbia has tossed out a suit over a “reverse mortgage”, saying that courts may be used to protect people from being taken advantage of, but not from making bad deals.

The case involved a “reverse mortgage” granted in 1994 by a Kelowna, B.C. couple to Colonia Life Insurance Co., a predecessor of the firm which was the defendant in the case, The Empire Life Insurance Co.

The couple claimed that the reverse mortgage was an unconscionable transaction, representations made by agents were deceptive, and agents of Colonia made negligent or fraudulent misrepresentations. Empire denied the allegations.

On November 30, the court found in Empire’s favour. In a written decision the jugde said “In my opinion, a reverse mortgage is not inherently unconscionable. It is an appropriate transaction for a relatively narrow group of people,” the court said, noting that the plaintiffs may not have fallen into this group. He chided the couple for not investigating other sources of funds. “This was their decision, and it was not unconscionable for [the agent] to leave it up to [them] to decide whether a reverse mortgage was appropriate for them.”

“The Courts are not empowered to relieve a man of the burden of a contract he has made under no pressure and with his eyes open, merely because his contract is an act of folly,” the judge continued.

The judge noted that the couple did enter into the transaction under no pressure and with their eyes open, and they also had the benefit of independent legal advice.