Pickersgill v Tsoukalas

In Pickersgill v Tsoukalas, the appellants, Mr Pickersgill and Ms Harvey, appealed against a judgment in favour of the respondent, Mr Tsoukalas, in a building dispute. The appellants had developed land, sub-dividing it into two parcels, one of which they sold as part of a house and land package, while retaining the other for themselves. Mr Tsoukalas was engaged by the appellants to build homes on both parcels. A written fixed price contract was executed for the construction of the appellants' home, but Mr Tsoukalas alleged that this contract was a sham, and that the true agreement was an oral "cost plus" contract. The trial judge found that the written contract was indeed a sham but rejected the claim of an oral "cost plus" agreement. The appellants contested the judge's findings, arguing that the judge erred in finding the fixed price contract a sham and in not finding an oral "cost plus" agreement, and that the award on a quantum meruit was inappropriate.

The court held that the appeal should be dismissed, but the notice of cross-contention was upheld. The court found that Mr Pickersgill was acting as an agent for Ms Harvey in contract negotiations, and therefore, the finding that the fixed price contract was a sham was not erroneous. The court held that the judge should have found that the parties had an oral "cost plus" building agreement. The award on a quantum meruit was not appropriate, but Mr Tsoukalas was entitled to the same awards as damages.

The court found that the appellants had not presented any evidence to support the existence of a fixed price contract. The judge had rejected the appellants' evidence concerning several material matters, and the court found no error in this respect. The court found that there was sufficient evidence to support a cost plus agreement, including the parties' discussions and dealings before 4 September 2002, and the plaintiff's conduct in entering into a contract with Mr Price to build his house for $115,000 without obtaining final specifications or quotations from tradespeople. The court found that the judge's conclusion that the parties had not agreed on a cost plus basis was surprising and seemingly inconsistent with the finding that the September document was a sham. The court found that the judge's rejection of the appellants' claim of a fixed price contract and the respondent's claim of a cost plus agreement meant that the parties had gone ahead with the project without having settled on an agreement at all, which the court found unlikely.

The court found that the judge's conclusion that the parties had not agreed on a cost plus basis was influenced by the absence of express evidence showing when and where an agreement to that effect was reached. The court found that the judge looked for evidence of a "meeting of the minds" but thought it lacking. The court found that the judge's conclusion was inconsistent with the evidence and the finding that the September document was a sham. The court found that the parties had gone ahead with the project without having settled on an agreement at all, which the court found unlikely.

In conclusion, the court held that the appeal should be dismissed, but the notice of cross-contention was upheld. The court found that the judge should have found that the parties had an oral "cost plus" building agreement. The award on a quantum meruit was not appropriate, but Mr Tsoukalas was entitled to the same awards as damages. The court found that the appellants had not presented any evidence to support the existence of a fixed price contract, and the judge's conclusion that the parties had not agreed on a cost plus basis was inconsistent with the evidence and the finding that the September document was a sham. The court found that the parties had gone ahead with the project without having settled on an agreement at all, which the court found unlikely.