Executive Summary: Key Legal and Evidentiary Issues

• Disputed whether the November 29, 2023 Pre-Sale Agreement (PSA) for the sale of Ziegler Homes Ltd. was a binding contract or merely an unenforceable “agreement to agree” lacking essential terms.
• Central question over entitlement to a $50,000 “security deposit” once the contemplated business sale did not proceed, and whether the deposit was refundable or non-refundable in law.
• Competing positions on the effect of Article 8 of the PSA, including its reference to a refund where a “legal purchase of the business [became] impossible due to insufficient contractual terms.”
• Evidence on alleged prior oral agreements, promissory estoppel and rectification was weighed and ultimately rejected as a basis to treat the PSA or any oral dealings as a complete, enforceable sale contract.
• Factual findings turned heavily on credibility assessments, with the court preferring the evidence of Mr. and Mrs. Pick over that of Mr. and Mrs. Ziegler where they conflicted, especially regarding the purpose and drafting of the PSA and the nature of the deposit.
• The doctrine of unjust enrichment was applied as an alternative route to recovery, leading to an order that the $50,000 be repaid, but without interest and with costs left to later written submissions.

Factual background and the parties’ business relationship

This case arises from an attempted purchase of Ziegler Homes Ltd., a residential construction company in Bridgewater, Nova Scotia, by German immigrants Matthias and Carmen Pick from the long-time owner, Juergen Ziegler. Mr. Ziegler, a mechanical engineer and master electrician who immigrated to Canada in 1994, had built a successful local real estate and construction business with the help of his wife, Eva, operating the construction side through Ziegler Homes Ltd. By 2022, he was contemplating retirement and looking for a successor to take over the business. The Picks, who ran a home renovation business in Germany (Matthias as tradesman/carpenter and Carmen as office administrator), had long wanted to immigrate to Canada. In May 2022, through a Nova Scotia immigration consultant, they learned of a potential opportunity with Mr. Ziegler in Bridgewater. They visited in June 2022 to assess the area and the business opportunity, then returned to Germany, where they later sold their business and property to pursue immigration. Mr. Ziegler initially discussed hiring Matthias as a carpenter but emphasized that he was looking for a successor and wanted $300,000 for the company, with $100,000 upfront at the time of transfer and the balance in instalments. The parties recognized that immigration steps were a precondition to any business transfer: Ziegler Homes first needed a Nova Scotia Immigration Program designation so that it could employ the Picks, and the Picks needed work and study permits before they could lawfully work in Canada. Those processes took time. The Picks ultimately arrived in Bridgewater with their children on October 14, 2023, even before final permit approval, to be ready to work as soon as they were authorized. Work and study permits for the family were approved and issued by November 10, 2023, and Matthias and Carmen began working for Ziegler Homes as employees on November 20 and 23, 2023, respectively, with Matthias as project manager and Carmen as office administrator. Permanent residence was only later confirmed on June 7, 2024, leaving the family’s long-term right to remain in Canada uncertain at the time of the key agreement.

The pre-sale agreement and the $50,000 security deposit

On November 29, 2023, Matthias and “Juergen Ziegler (Ziegler Homes Ltd.)” signed a document titled “Pre-Sale Agreement” or PSA, which became the focal point of the dispute. The PSA had been drafted without legal advice. According to the court’s findings, Eva Ziegler provided handwritten or basic German terms to Carmen, who scanned them and used ChatGPT to generate a letter of intent to purchase in German and then translated it into English. The resulting English PSA was signed by Matthias and Juergen without any substantive legal review or amendment. The PSA described the “Sale Subject” as the business known as “Ziegler Homes,” including inventory, vehicles, logos, company name, website, email address, and the assumption of existing employees. It set a purchase price of CAD $100,000 “plus an Advisory Fee” and contemplated a security deposit and future advisory payments. Specifically, Clause 6 provided that the seller would receive CAD $50,000 as a security deposit in instalments, with the remaining CAD $50,000 due on the “official takeover date.” Clause 7 stated that, following the business acquisition, the buyer would pay an “Advisory Fee” monthly for three years, but it did not specify the amount. Clause 13 referenced “attachments” (lists of inventory, office spaces, tools, machinery, vehicles and non-material assets) that were to form an “integral part” of the agreement—yet none were attached or provided by the date of signing. Another clause stated that the buyer would not assume obligations arising before the official takeover of the company, but without clearly defining what obligations or whose obligations (Mr. Ziegler personally or the corporation’s). A critical provision was the final sentence of Article 8, which read: “Should a legal purchase of the business become impossible due to insufficient contractual terms, the Buyer is entitled to a full refund of the deposit amount of CAD $50,000.” The court found that this clause, although clumsily worded and the product of machine translation, was intended to address what should happen to the deposit if the parties ultimately could not agree on sufficient terms to complete a legal business purchase. The deposit was paid in two instalments: $14,400 on December 1, 2023, and $35,600 on July 3, 2024, for a total of $50,000. The second instalment was made only after Mr. Ziegler insisted on receiving the remainder. According to the Picks, the deposit was meant to secure an exclusive opportunity to buy Ziegler Homes if, after gaining experience inside the business and receiving financial information, they decided the purchase made sense. They saw the PSA as a “letter of intention” or pre-sale understanding rather than a final, binding sale contract.

The parties’ evolving negotiations and breakdown of the deal

Throughout 2023 and 2024, negotiations about a potential purchase continued while the Picks were working for Ziegler Homes. The court emphasized that, at the time the PSA was signed, the Picks had just started employment, had not yet seen financial statements, had no asset schedules, and did not know the true financial condition, liabilities, or value of the company. In practical terms, they lacked the information necessary to make a fully informed decision about price and risk. Only in May 2024 did they receive financial statements for the fiscal year ending August 31, 2023, and additional financial documents were not provided until July 23, 2024, after the full $50,000 deposit had been paid. A basic list of “items not and included in sale” did not come until September 4, 2024. In the meantime, there were also material changes in Ziegler Homes’ staffing and operations compared to what the Picks had seen or discussed in 2022: key employees left, support staff were not replaced, and the business focus shifted away from custom builds toward speculative projects. This raised concerns for the Picks about whether the business they were being asked to buy was the same business they had initially considered, and whether the original $300,000 figure still made commercial sense. While the PSA nominally set the purchase price at $100,000 plus an Advisory Fee, all parties also acknowledged verbally that the full economic package was $300,000, with $100,000 up front and a further $200,000 embedded in the Advisory Fee spread over three years. The Advisory Fee remained unquantified in the PSA but was later explained by the respondents as the $200,000 component. The court found that this omission, combined with the absence of details about Mr. Ziegler’s advisory obligations (duration, time commitment, nature of services, what would happen on his death, and whether non-performance could justify withholding payment), left a large part of the purported price structure uncertain. In September 2024, with the parties still unable to settle the essential terms of a final sale contract, Mr. Ziegler, through his counsel, presented a formal Asset Purchase Agreement (APA) for signature. Unlike the PSA, the APA did not refer back to the PSA and treated the $50,000 as a “down payment” rather than a security deposit. It also introduced an “entire agreement” clause and omitted certain protective terms, including the non-competition clause and the specific refund language from Article 8. The APA was never executed. On September 27, 2024, Mr. Pick informed Mr. Ziegler that he would not proceed with the purchase of Ziegler Homes, and he resigned from his employment shortly thereafter. He demanded the return of the $50,000 deposit, but Mr. Ziegler refused, taking the position that the deposit was non-refundable except in narrow circumstances that did not apply.

Procedural history and competing pleadings

Mr. Pick commenced proceedings by filing a Notice of Application in Chambers on November 20, 2024, later reformulated by a Notice of Application in Court on February 20, 2025, seeking an order for the return of the $50,000 deposit “for an asset purchase of property of the Respondent.” The matter proceeded under the Nova Scotia Civil Procedure Rules as an Application in Court, essentially a trial on affidavits with cross-examination. In his pleadings and evidence, Mr. Pick argued that the PSA lacked essential terms and functioned only as an “Agreement to Agree,” setting out bare framework concepts rather than a complete, enforceable contract. He emphasized the missing attachments, the unquantified Advisory Fee, the absence of a fixed closing or takeover date, and the lack of any binding agreement on key issues such as the full purchase price structure, asset lists, and allocation of obligations. He also relied on Article 8 as an express basis for a refund of the deposit once it became clear that a legal purchase was impossible because the parties could not agree on sufficient contractual terms. In the alternative, he pleaded unjust enrichment, asserting that there was no juristic reason for Mr. Ziegler to retain the deposit if no binding sale contract existed. The respondents, Juergen Ziegler and Ziegler Homes Ltd., took the opposite view. They claimed that by late summer 2022 the parties had already reached an oral agreement on essential terms, including that a $50,000 non-refundable security deposit would be paid and that Mr. Ziegler would be contractually obligated to sell the business to the Picks. They said the PSA simply reflected and reiterated those essential terms and was itself a binding contract of sale that went beyond mere bare terms. They also argued that the Advisory Fee was understood to represent the remaining $200,000 payable over three years, and that its omission in numeric form was an inadvertent drafting slip that could be corrected by rectification. In addition, they claimed promissory estoppel, alleging that Mr. Pick’s words and conduct demonstrated an intention to be bound by the PSA, and that they relied to their detriment on his commitment to proceed with the purchase. As a further fallback, they contended that, even if the PSA were not enforceable, there was still a binding oral agreement under which the deposit was non-refundable unless Mr. Pick died before taking ownership or the purchase genuinely became “impossible.” They denied any unjust enrichment.

Credibility findings and the court’s treatment of oral agreements and estoppel

The court undertook a detailed credibility assessment, weighing the affidavits and cross-examination of Mr. and Mrs. Ziegler and Mr. and Mrs. Pick. While the judge found the Zieglers generally credible, he expressly preferred the evidence of the Picks where their versions diverged, particularly on the purpose and nature of the PSA and the understanding about the security deposit. The court regarded the language barriers and the fact that the Picks were relatively new immigrants with weaker English skills as relevant context, contrasting that with the Zieglers’ decades of Canadian business experience. The judge concluded that the respondents had not proved any binding and enforceable oral agreement pre-dating or supplementing the PSA that settled all essential terms or that clearly fixed the deposit as non-refundable. The evidence did not support the contention that, in 2022 or by November 2023, the Picks had already committed themselves, in a legally binding sense, to purchase the company on the asserted $300,000 package. Rather, the court found it highly unlikely that they would have agreed to be irrevocably bound before they had immigration security, meaningful work experience inside the company, or access to financial and asset information. On the promissory estoppel claim, the court accepted the orthodox test—that there must be an unambiguous representation as to future conduct meant to be relied on, actual reliance, and resulting prejudice if the representor is allowed to resile. It held that Mr. Pick did not make any such unambiguous promise that he would definitely purchase the business, nor did he intend his words or conduct to be relied on as a binding commitment. The court was also not satisfied that any real detriment had been established for Mr. Ziegler in reliance on an alleged promise that the sale would certainly close. The later attempt to introduce a lawyer-drafted APA that effectively sidelined the PSA and omitted important protections further undermined the argument that the PSA represented a complete, binding sale agreement that Mr. Pick was estopped from denying.

Why the pre-sale agreement was an unenforceable agreement to agree

The central analytical step was the court’s conclusion that the PSA was not a valid and enforceable contract of sale, but rather an unenforceable “agreement to agree.” Applying leading Canadian contract authorities—such as United Gulf Developments Ltd. v. Iskandar, Bawitko Investments Ltd. v. Kernels Popcorn Ltd., and the doctrinal analysis in Geoff Hall’s Canadian Contractual Interpretation Law—the judge emphasized that a binding contract requires agreement on all essential terms with sufficient certainty. A mere framework that leaves essential matters to be settled later is not enforceable, even if businesspeople sometimes proceed practically on incomplete understandings. In this case, the nature of the transaction—a transfer of a going residential construction business with assets, liabilities, employees and a complex pricing structure—meant that a number of terms were clearly essential. The PSA left too many of those terms either missing or unacceptably vague. Among the most significant deficiencies were the absence of a specific closing or “official takeover” date and the lack of any clear mechanism to determine it. The PSA referenced that the sale “should be completed” by approximately December 2024 and allowed for an earlier transfer after the buyer had permanent residence for a certain period, but these phrases were too loose to fix a closing date or to allocate risk properly over time, particularly when business conditions and the composition of assets and liabilities could change significantly. That uncertainty was exacerbated by the Picks’ immigration status at the time and the fact that they had work permits but not yet permanent residence, making long-term commitment inherently contingent. The price structure itself was also insufficiently defined. The written PSA spoke of a $100,000 purchase price plus an Advisory Fee, while both sides understood the “real” deal to be $300,000, including $200,000 to be delivered through advisory payments over three years. Yet the Advisory Fee field in the PSA was left blank and there were no terms spelling out what services Mr. Ziegler had to provide, how many hours or in what capacity he would advise the company, whether he had to be available on-site or remotely, or what would happen if he died or became unable to perform. The court considered it untenable to leave two-thirds of the economic consideration in such an undefined state. The missing attachments were another fatal flaw. The PSA explicitly stated that detailed lists of inventory, office space, tools, machinery, vehicles and non-material assets formed an integral part of the agreement, but no such lists existed when the PSA was signed. Nor had Mr. Pick been given any alternative reliable asset and liability descriptions at that time. The court concluded that, as of November 29, 2023, he simply did not know what he was buying. Taking these elements together, the judge held that the PSA did not “settle everything that is necessary to be settled” and that the parties’ real intention was to defer binding obligations until a future, more formal agreement—such as the later, unexecuted APA—could be negotiated and signed. As a result, the PSA was treated as an unenforceable agreement to agree rather than a completed contract.

Rejection of rectification and use of Article 8 as a refund clause

The respondents attempted to save the PSA by invoking rectification, arguing that any missing or unclear terms could be filled in to reflect the parties’ supposed common intention, particularly as to the Advisory Fee being $200,000 over three years. The court rejected this. Drawing on recent Supreme Court of Canada jurisprudence such as Canada (Attorney General) v. Fairmont Hotels Inc. and Canada (Attorney General) v. Collins Family Trust, the judge stressed that rectification is limited to cases where an antecedent, definite agreement exists and the written document merely mis-records that agreement. It cannot be used to create or complete a contract where the essential terms were never actually settled. In this case, the court found no prior definite, fully specified agreement that the PSA was meant to record; instead, the PSA itself embodied the incomplete, evolving understanding. Accordingly, rectification was not available to turn the PSA into a complete and enforceable sale contract. In interpreting Article 8, the court looked past the literal English text to the surrounding circumstances, including that the parties negotiated in German, relied on ChatGPT to draft and translate the document, and intended the PSA to function as a form of protection while the Zieglers travelled overseas. The judge concluded that the phrase “should a legal purchase of the business become impossible due to insufficient contractual terms” was meant to capture the scenario where the parties, after efforts to negotiate, could not reach a complete, lawful contract. In that event, the clause provided that the buyer would be “entitled to a full refund” of the deposit. When read in context with the parties’ understanding that many material points would be negotiated later and the fact that they did not, in the end, agree on a final APA, Article 8 supported the conclusion that the deposit should be returned when no full agreement materialized.

Application of unjust enrichment and final outcome

Although the court found that Article 8, properly understood, supported refunding the deposit, it also addressed Mr. Pick’s alternative claim in unjust enrichment. Applying the modern three-part test (enrichment, corresponding deprivation, and absence of juristic reason), the judge held that Mr. Ziegler had been enriched by receiving $50,000 from Mr. Pick, that Mr. Pick had suffered a corresponding deprivation, and that there was no valid juridical basis—no binding contract, no gift, and no other legal obligation—for Mr. Ziegler to keep the money once the sale did not proceed. The respondents failed to establish any residual reason grounded in the parties’ reasonable expectations or public policy that would justify retention of the deposit. On the evidence the court accepted, both sides understood that the deposit was tied to the prospect of a future, completed agreement, and was not intended to be a non-refundable windfall for the seller if negotiations broke down because essential terms could not be agreed. In the result, the court ordered that the $50,000 deposit be returned to Mr. Pick. The judge explicitly declined to award interest because he was not satisfied that the evidentiary and jurisprudential basis for interest had been made out. As to costs, the decision did not fix an amount; instead, it invited written submissions from the parties on costs within specified time frames, meaning the actual costs figure (if any) would be determined in a subsequent ruling. Overall, the successful party was the applicant, Matthias Johannes Pick, who obtained an order requiring the respondents to repay the $50,000 deposit. No interest was awarded, and the total amount of any costs in his favour could not yet be determined on the face of this decision because costs were left for later submissions and a further decision.