Stokolosa v Weeks Peacock Quality Homes

STOKOLOSA V WEEKS PEACOCK QUALITY HOMES PTY LTD [2000] SASC 266

Supreme Court of SA – 11 August 2000

FACTS

Stokolosas’ reached an agreement with Pinnington (an employee of Weeks Peacock) to build a house on the Stokolosas’ land to designs prepared by Pinnington.

Pinnington told Stokolosa that he had obtained the approval of Weeks Peacock to build the house for the agreed price of $115,000. Stokolosas’ therefore signed a building contract for the house and made two advance payments. Pinnington kept one advance payment for himself.

Rowland from Weeks Peacock later told the Stokolosas that there had been no contract as Pinnington was acting without authority to enter into a contract and that the house could only be built for a price of $125,000.

Stokolosas accepted the repudiation of the contract made by Weeks Peacock and had another builder build a similar house.

ISSUES

1. Was the act of Pinnington within the scope of an agent acting with apparent or ostensible authority?
2. Would the contract entered by Pinnington be binding on Weeks Peacock notwithstanding the allegation of fraud?
3. Should the court award damages for loss of expectation despite the Stokolosas having mitigated the damage?

FINDINGS