Hopkins v Daou
[2025] VCC 964
•11 July 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-22-02886
| SASHA HOPKINS | Plaintiff |
| v | |
| DANIELLE DAOU and | First Defendant |
| FREDMAN PROPERTY GROUP PTY LTD (ACN 632 165 970) | Second Defendant |
| and JOEL TIMOTHY LLOYD FREDMAN | Third Defendant |
---
JUDGE: | Her Honour Judge Brimer | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 3, 4, 7 October, 13 November 2024 | |
DATE OF JUDGMENT: | 11 July 2025 | |
CASE MAY BE CITED AS: | Hopkins v Daou & Ors | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 964 | |
REASONS FOR JUDGMENT
---
Subject:CONTRACTS; TRADE AND COMMERCE
Catchwords: INNOCENT MISREPRESENTATION – where real estate agent published floor plan of property in online advertisement and sent a text message to a purchaser stating information about the internal size of the property – where information about internal size was incorrect – whether real estate agent was merely passing on information supplied by the vendor – agent not a mere conduit of vendor because vendor did not supply the information for agent to pass on – representation not authorised by vendor but made within scope of apparent or ostensible authority – purchaser did not rely on representations – representations not made to induce purchaser and not material
NEGLIGENT MISREPRESENTATION – whether vendor owed prospective purchasers of the property direct duty of care to avoid reasonably foreseeable harm – no duty of care arises as mere reasonable foreseeability not sufficient
MISLEADING OR DECEPTIVE CONDUCT – where purchaser was an experienced property investor – whether information about the internal size of the property in the online advertisement and the text message capable of leading a reasonable person in the position of the purchaser into error – effect of disclaimer in online advertisement – agent engaged in misleading or deceptive conduct by the online advertisement because dominant message was false and not qualified by disclaimer – text message not misleading or deceptive conduct – vendor did not engage in misleading or deceptive conduct – vendor not a person involved in contravention by agent – purchaser’s claimed loss or damage not caused because of contravention
BREACH OF CONTRACT – where purchaser continued to perform contract after having knowledge of circumstances giving rise to alternative inconsistent set of rights – purchaser affirmed contract and did not elect to rescind – vendor’s termination of contract valid – vendor entitled to deposit and damages
Legislation Cited: Competition and Consumer Act 2010 (Cth); Property Law Act 1958 (Vic)
Cases Cited:Allianz Australia Insurance Limited v Delor Vue Apartments CTS 3988 [2022] HCA 38; ACCC v Dukemaster Pty Ltd [2009] ATPR 42-290; Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112; Ashdown v Kirk [1999] 2 Qd R 1; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2011] FCA 1254; Butcher v Harkins [2001] NSWSC 15; Butcher v Lachlan Elder Realty Pty Ltd [2002] NSWCA 237; Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; CJD Equipment v A & C Constructions [2009] NSWSC 1362; Clark v Clark (1882) 8 VLR (E) 303; Clark v Macourt (2013) 253 CLR 1; Coastal Estates Pty Ltd v Melvende [1965] VR 433; Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; Dalton v Lawson Hill Estate Pty Ltd [2005] FCAFC 169; Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (1992) 38 FCR 471; Ebadeh-Ahvazi v Namrood [2017] NSWSC 399; Esanda Finance Corp Ltd v Peat Marwick Hungerfords (Reg) (1997) 188 CLR 241; Franich v Swannell (1993) 10 WAR 459; Gardam v Geo Wills & Co (1998) 82 ALR 415; Gould v Vaggelas (1985) 157 CLR 215; Hanave Pty Ltd v LFOT Pty Ltd [1999] ATPR 41-687; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83; Henville v Walker (2001) 206 CLR 459; Hera Project Pty Ltd v Bisognin [No 3] [2017] VSC 268; Hyder v McGrath Sales Pty Ltd [2018] NSWCA 223; Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40; Mindshare Communications Ltd v Orleans Investments Pty Ltd [2007] NSWSC 1352; Mullens v Miller (1882) 22 Ch D 194; Norris v Sibberas [1990] VR 161; O’Brien v Smolonogov (1983) 53 ALR 107; Overbrooke Estates Ltd v Glencombe Properties Ltd [1974] 3 All ER 511; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; Presser v Caldwell Estates Pty Ltd [1971] 2 NSWLR 471; Productivity Partners Pty Ltd v ACCC (2024) 98 ALJR 1021; Re Ku-ring-gai Co-Operative Building Society (No 12) Ltd (1978) 22 ALR 621; Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 68 ALR 77; Robinson v Harman (1848) 1 Ex 850; Smith v Chadwick (1883-1884) 9 AC 187; Smith v Land and House Property Corp (1884) 28 Ch D 7; Williams v Pisano [2015] NSWCA 177; Wardley Australia Ltd v Western Australia (1992) 175 CLR 514; Xu v Lindsay Bennelong Developments Pty Limited [2020] NSWSC 1692; Yorke v Lucas (1985) 158 CLR 661
Judgment: For the Defendants
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Twidale | NOH Legal |
| For the First Defendant | Mr A R Morrison | Ward & Co. Legal Consultants |
| For the Second and Third Defendants | Mr D J Briggs | Kennedys |
Table of Contents
Introduction
Summary of claims and defences
Summary of conclusions
Background
Issues for determination
A. The Representations
Issue 1: Did the Agent Parties make the Representations?
Credit of Ms Daou and Mr Daou
Credit of Mr Fredman
Issue 2: Did the Agent Parties make the Representations under or within the scope of their actual or apparent authority from Daou as principal?
B. Misrepresentation at common law (claim against Daou only)
B.1 Innocent misrepresentation
Issue 3: If the answers to questions 1 and 2 are yes, were the Representations false and untrue?
Issue 4: Did Hopkins rely on the Representations by entering into the Contract of Sale?
Credit of Mr Hopkins
Issue 5: Did Hopkins affirm the Contract of Sale? If so, when?
Issue 6: Did Hopkins rescind the Contract of Sale for innocent misrepresentation in equity? If so, when? What are the consequences?
B.2 Negligent misstatement
Issue 7: At the time the Representations were made, did Daou owe prospective purchasers of the Property, including Hopkins, a duty of care to avoid reasonably foreseeable harm? If so, what was the scope of that duty?
Issue 8: Did Daou make the Representations, by authorising the making of the Representations, negligently so as to breach the duty of care?
Issue 9: Did Hopkins rely on the Representations by entering into the Contract of Sale?
Issue 10: What loss caused by the breach, has Hopkins suffered?
C. Claims under the ACL
C.1 Liability of Agent Parties
Misleading or deceptive conduct
Issue 11: If the answer to question 1 is yes, did the Agent Parties make the Representations in trade or commerce?
Issue 12: Were the Representations misleading or deceptive, or likely to mislead or deceive?
Issue 13: Did either of the Agent Parties contravene s 18(1) of the ACL?
False or misleading representations about sale etc. of land
Issue 14: Were the Representations false or misleading in contravention of ss 30(1)(e) or 30(1)(g) of the ACL?
C.2 Liability of Daou (principal liability)
Issue 15: If the answers to questions 1 and 2 are yes, did Daou make the Representations by authorising the making of the Representations, in trade or commerce?
Issue 16: Were the Representations misleading or deceptive, or likely to mislead or deceive?
C.3 Liability of Daou (accessorial liability)
Issue 18: If the Agent Parties contravened s 18(1) of the ACL, was Daou a person involved in the Agent Parties’ contravention?
C.4 Remedies
Issue 19: Did Hopkins rely on the Representations by entering into the Contract of Sale?
Issue 20: Has Hopkins suffered loss within the meaning of s 236(1) of the ACL by reason of any contravention of the ACL?
Issue 21: Is the Contract of Sale void pursuant to ss 237(1) and 243 of the ACL?
D. Mistake
Issue 22: Is Hopkins entitled to restitution on the grounds alleged in the 2FASOC at [28]-[31]?
E. Relief against forfeiture
Issue 23: Is Hopkins entitled to relief against forfeiture of the Deposit on the grounds alleged in the 2FASOC at [32]?
F. Equitable lien
Issue 24: Is Hopkins entitled to an equitable lien over the Funds in Court on the grounds alleged in the 2FASOC at [33]-[46], and, if so, is he entitled to the Funds in Court?
G. Proportionate liability
Issue 25: Should there be an apportionment pursuant to s 24AH of the Wrongs Act 1958 (Vic) or s 87CB of the Competition and Consumer Act 2010 (Cth)?
H. Contribution
Issue 26: If Hopkins is entitled to recover any sum, are the defendants entitled to contribution vis-à-vis each other?
I. Daou’s counterclaim
Issue 27: Is Daou entitled to the Deposit?
Issue 28: Is Daou entitled to damages for breach of the Contract of Sale? If so, how much?
Issue 29: Is Daou entitled to the Funds in Court?
Conclusion and orders
HER HONOUR:
Introduction
1On 31 March 2022, the plaintiff, Sasha Hopkins signed a contract of sale (the Contract) for the purchase of a property on Fifth Street, Black Rock (the Property). On 3 April 2022, the Contract was countersigned by the first defendant, the vendor, Danielle Daou. Settlement was due to take place on 20 July 2022. Mr Hopkins paid the first tranche of the deposit on 21 April 2022 and the second tranche on 31 May 2022. Mr Hopkins did not settle the purchase of the Property.
2Mr Hopkins commenced proceedings on 26 July 2022, claiming that he was misled by Ms Daou and by the second and third defendants, the vendor’s real estate agent, Joel Fredman of Fredman Property Group Pty Ltd (together, the Agent Parties), by the making of the following representations:
(a) that there was an external heated spa (the spa representation), made in the text of an online advertisement uploaded to realestate.com.au in or about October 2021; and
(b) that the internal size of the dwelling was approximately 76 squares (the measurement representation), made:
(i)by a notation, “INTERNAL SIZE: APPROX. 76 SQUARES” (the notation) on the floor plan included as part of the online advertisement (the floor plan); and
(ii)in a text message sent by Mr Fredman to Mr Hopkins on 19 March 2022: “Internal is approx. 76 squares including garage. External 986 sqm approx…” (the 19 March 2022 text message)
(the representations).
3Mr Hopkins claims he was misled because there was no heated external spa and the internal size of the Property was not approximately 76 squares, rather it was 56 squares.
Summary of claims and defences
4The essence of Mr Hopkins’ claims against Ms Daou is as follows:
(a) Whilst the Agent Parties made the representations, Ms Daou authorised the making of the representations or they were made within the scope of the Agent Parties’ apparent authority.
(b) The representations were false and untrue and Mr Hopkins relied on them when he entered into the Contract. After Mr Hopkins discovered the true internal size of the dwelling on the Property and that there was no external heated spa, Mr Hopkins rescinded the Contract. Ms Daou is liable to Mr Hopkins to return the deposit paid.
(c) Further, Ms Daou owed Mr Hopkins a duty of care, which she breached by authorising the making of the representations.
(d) Ms Daou engaged in misleading or deceptive conduct, or alternatively, she was a person involved in the Agent Parties’ contravention of the Australian Consumer Law (ACL).[1]
[1] Competition & Consumer Act 2010 (Cth), Schedule 2 (ACL).
5Mr Hopkins claims that the Agent Parties, by making the representations, engaged in misleading or deceptive conduct which caused him loss and damage.
6Ms Daou denies that the spa representation was made. She did not authorise the making of the measurement representation. Even if made, the measurement representation was not relevantly false or untrue. Even if the representations were false and untrue, they were immaterial to Mr Hopkins. Mr Hopkins did not rely on the representations when entering into the Contract. Even if he did, he affirmed the Contract. Ms Daou denies she owed Mr Hopkins the alleged duty of care, or if she did, that she breached any alleged duty of care. The claim under the ACL for misleading or deceptive conduct is misconceived: even if Ms Daou authorised the making of the representations, any relevant conduct of Ms Daou was not in trade or commerce, and Mr Hopkins did not rely on the representations, nor has he suffered loss or damage.
7The Agent Parties deny the representations were made, or if made, that they themselves made the representations. The Agent Parties were acting as a mere conduit of the vendor, Ms Daou. They did no more than to pass on to prospective purchasers information provided to them by Ms Daou (the mere conduit defence). Even if the Agent Parties made the representations, they were not false or untrue. The Agent Parties did not engage in misleading or deceptive conduct in contravention of the ACL. Even if they did, Mr Hopkins did not rely on the representations when entering into the Contract. He has suffered no loss.
8Ms Daou counterclaims against Mr Hopkins for breach of the Contract, seeking the deposit and damages for loss suffered as a result of Mr Hopkins’ breach.
Summary of conclusions
9For the reasons set out below, I find for the Defendants.
10In summary, I have found that the spa representation was not made. The Agent Parties made the measurement representation by the notation on the floor plan and in the 19 March 2022 text message. The Agent Parties were not acting as mere conduits of Ms Daou. I am however satisfied that the measurement representation was made within the scope of the Agent Parties’ ostensible authority.
11Whilst I am satisfied that the measurement representation was false and untrue, I am not satisfied that it was made to induce Mr Hopkins to enter into the Contract. I am not satisfied that Mr Hopkins relied on the representations when entering into the Contract. I am satisfied that Mr Hopkins, once aware of the falsity of the measurement representation, affirmed the Contract.
12Had it been necessary to determine, I would not have been satisfied that Ms Daou owed Mr Hopkins a duty of care as claimed, nor that if a duty of care was owed, Ms Daou breached it.
13I am satisfied that in making the measurement representation by the notation on the floor plan, the Agent Parties engaged in conduct that was misleading or deceptive. I am not satisfied the Agent Parties’ conduct in making the measurement representation by the 19 March 2022 text message was misleading or deceptive. Had it been necessary to determine, I would not have found that Ms Daou engaged in misleading or deceptive conduct. Even if Ms Daou authorised the making of the measurement representation, she would not have engaged in conduct in trade or commerce. I am not satisfied that Ms Daou was a person involved in the Agent Parties’ contravention, such that she could be held liable as an accessory. Further, I am not satisfied, that Mr Hopkins suffered any loss or damage by reason of the making of the measurement representation by the notation on the floor plan.
14I find for the plaintiff by counterclaim. I am satisfied Ms Daou validly terminated the Contract.
Background
15On 15 January 2016, Ms Daou purchased the Property. Jamiel Daou, Ms Daou’s husband, was a builder. The Property was renovated through Mr Daou’s building company, J Build Developments Pty Ltd (J Build), and upon completion at the end of 2018, was the Daous’ family home.
16At the end of 2019, Mr Daou and Ms Daou separated. They agreed to sell the Property. Ms Daou contacted Mr Fredman to organise a time to meet to discuss selling the property.
17On 3 August 2021 at 6.10pm, some days before the meeting, Mr Fredman sent a text message to Ms Daou:
“Hi Danielle, look forward to seeing you next week.
May I ask how many bedrooms, internal size etc?
Best. Joel Fredman”
18At 6.17pm, Ms Daou texted Mr Daou:
“…The realestate agent wants to know how many squares fifth st is? Do you know?”
19Mr Daou replied:
“Fifth st is approx. 76 sqs with the garage”
20Ms Daou then sent a text to Mr Fredman:
“Hi Joel, likewise.
There are 5 bedrooms and approximately 76 Sqrs including the garage.
Regards
Danielle”
(the 3 August 2021 text message)
21On 17 August 2021, Mr Fredman met with the Daous at the Property, to discuss the sale, including price expectations for the Property (the 17 August 2021 meeting). Whether they discussed the size of the Property is disputed and dealt with below in Issue 1.
22On 18 August 2021 at 10.00am, Mr Daou emailed Mr Fredman, attaching a copy of the architectural plans for the renovation (the Plans).
23That evening at 8.27pm, Ms Daou emailed Mr Fredman:
“…Please note that the master bathroom layout is not the same as the plans Jamie sent you this morning.
I will send you some images of the house shortly.”
24The following day, 19 August 2021, the Daous and Mr Fredman executed the exclusive sale authority (ESA) appointing Fredman Property Group as their agent to sell the Property. The ESA was ultimately extended to 18 March 2022.
25Mr Fredman arranged for a floor plan drawer to attend the Property and prepare a floor plan.
26On 23 September 2021 at 5.41pm, Mr Fredman emailed Ms Daou and Mr Daou with a draft floor plan for their perusal and feedback. Mr Daou replied to Mr Fredman’s email, marking up some amendments to the draft floor plan in red.
27On 24 September 2021 at 6.55am, Mr Fredman sent an email to Mr Daou with a clean version of the floor plan, incorporating Mr Daou’s amendments:
“Updated – is this ok?”
28There is no issue between the parties that the Daous approved that version of the floor plan.
29On 8 October 2021 at 2.26pm, Mr Fredman sent an email to Ms Daou and Mr Daou seeking their approval of the advertising copy which included the following words:
“…Externally, an outdoor shower, gas heated lap pool/spa with silk water filtration and an outdoor automated cinema complement the expansive outdoor entertainer’s area designed specifically to host many family and friends…” (emphasis added)
30There is no issue that Ms Daou approved the draft advertising copy.
31In or around October 2021, Mr Fredman posted an online advertisement on his agency’s website and on in respect of the sale of the Property (online advertisement). The online advertisement contained the draft text in Mr Fredman’s email of 8 October 2021 at 2.26pm. It also included the floor plan with the notation:
32On 7 December 2021, Mr Fredman and Mr Daou exchanged text messages regarding potential ways to re-design and increase closet space in the master bedroom. Mr Daou sent screen shots of proposed concept design for “His and Her” master bedroom wardrobe plans with handwritten amendments in red pen.
33In or around February 2022, Mr Hopkins made an enquiry about the Property through realestate.com.au. Mr Hopkins is an experienced property investor who was living in Burgess Street, Beaumaris (Beaumaris home) and looking to purchase a larger family home.
34On 22 February 2022 at 4.53pm, Mr Fredman emailed Ms Daou (copying in Mr Daou) informing them of marketing upgrades on realestate.com.au increasing exposure of the Property.
35On 28 February 2022 at 7.08pm, after an exchange of emails about the asking price, Mr Hopkins emailed Mr Fredman:
“…When can I get through the property?
I’ve bought somewhere else but not 100% happy. The reno works I want to do will take too long and I’m still not sure of the costs - the industry is horrible at the moment.
Therefore I’m considering selling to buy exactly what I want as a completed product. Went through one on Central Ave today.
What is the sellers priority? Is it price or settlement length?
I will need to sell some great quality property to settle but certainly wouldn’t need 12 months.
Let me know when I can get through.”
36On 4 March 2022, Mr Hopkins inspected the Property with his partner.
37On the same day, following the inspection, Mr Hopkins sent a text message to Mr Fredman indicating he would make an offer:
Mr Hopkins:
“Without hiring a building inspector and going hard on the due diligence list with defects, l'd offer $5m unconditional and 5 months settlement” (the first offer)
Mr Fredman:
“I've had $5m rejected thrice, sorry to say.” …
38The next day, 5 March 2022 at 1.50pm, Mr Fredman and Mr Hopkins exchanged further text messages:
Mr Fredman:
“Hi Sasha,
I have a verbal of $5.1m from the repeat family today, solicitor is just checking over the documents”
[Mr Fredman sent screen shots of proposed concept design for “His and Her” master bedroom wardrobe plans with handwritten amendments in red pen.]
Mr Hopkins:
“11am confirmed on Monday”
“See you then”
39Later, Mr Hopkins sent some further text messages to Mr Fredman:
“Can you please print [the screen shots] and bring Monday?...”
“Robe proposals are ok.. please print and bring for me Monday if you could.”
40On 7 March 2022, Mr Hopkins conducted a second inspection of the Property with his son.
41Later that day, at 11.18am, Mr Fredman and Ms Daou exchanged text messages about the inspection and proposed alterations to the master bedroom robes:
Ms Daou:
“Thank you. Did it go well?”
Mr Fredman:
“Think so. Sasha likes it, would want to change master robes and add a bar downstairs. Will come back to me with a potential offer by middle of the week, he says...”
42The following day, 8 March 2022 at 6.02pm, Mr Hopkins enquired of Mr Fredman where other buyers were at. Mr Fredman told Mr Hopkins to put his best offer forward. In response, at 7.43pm, Mr Hopkins sent a detailed email to Mr Fredman including a list of items to be included and paid for by Ms Daou with offer terms (the 8 March 2022 offer):
“Hi Joel,
Thank you for your assistance thus far on the property. As a whole, it’s an outstanding home that ticks many personal boxes. However, there are several deal breakers of note - especially if paying this type of money for a dream home property. It needs to be perfect.
Please note that Fifth Street is a luxury, not a necessity. I am perfectly content in my current home. However, if I can make the jump work I will do it, no emotions involved. After all, I didn't plan on selling my current residence less than one month after moving in - yet sometimes things happen.
I also want to note that it is far more likely to become a buyers’ market throughout the course of this year with pull backs beginning to appear in the high end markets and lifestyle locations already. Especially if the global economy worsens with fears of a crash, there will be many great opportunities in the future. Question, is it 2 or 3 level (excluding any basement)?
List of items to be included (and paid for) with offer and terms following below:
1. Wardrobe alteration to master as per plans completed by seller including ensuite reconfiguration and make good. Leave current robe as is. No built in robe where bed currently is as per plans. Wardrobe design to be approved by buyer – imagery/inspiration to be provided by buyer
2. Downstairs wine rack to become wine display with glass and use adjoining cupboard space as bar display and reconfiguration. Bar design to be approved by buyer - imagery/inspiration to be provided by buyer. Capped at $4,000
3. Guest bed robe to be modified to include hanging space
4. Pool fence modification to run parallel to pool maximising lawn open space
5. Additional tiling to pool adjoining grass edge to accommodate enough space for sun baking chairs and a future day bed – additional 1.5m of tiling with modified pool fence as per point 4 above
6. Removal of hanging shelving in garage that imposes on ceiling height where main storage section is to allow for gym equipment
7. Joinery/modification provided to the front room with fire place to set up as study office/similar capped at $4,000
8. 5 pieces of artwork and 5 pieces of furniture included – mutually agreed by both parties
9. 5-6 new plants that match the entrance tall plants in the front garden bed – purchased and planted by owner – same or similar species – that won’t block the narrow path for servicing equipment
10. Extremely thorough commercial clean to outdoor bbq kitchen area, under bench cupboards, fridges, bbq, garage, etc. ensuring all electrical items and gas items are fully operational around bbq area
11. TV joinery allowance of $4,000 - design to be approved by buyer
Offer and terms:
·4 month settlement or earlier with 1 month optional extension if required at no extra cost at buyers discretion if buyers residence settles earlier/later as per next term;
·Conditional 21 days upon achieving 2x unconditional contracts on properties currently selling (Beaumaris, Byron Bay – nearly sold, offers received so this may only be Beaumaris)
·2.5% deposit at unconditional, 2.5% 60 days from unconditional date – total 5% deposit – deposit can be released to vendor to cover proposed works however an interest will need to be registered over the property if so
·List of above items to be completed by settlement
·Building and pest
·$5.1m
·*note purchase will be in a company
·Clause 31.4 in contract – this will need to increase to accommodate the above works to $150,000
·We would also request these items noted in the contract to be included
·
Whilst I appreciate there are a few things noted on the list above, they are my requirements should I purchase this property. If you have any further queries regarding, let me know.
Thank you,
Sasha”
43On 9 March 2022 at 1.09pm, Mr Fredman emailed Mr Hopkins:
“Hi Sasha,
Thanks so much again for your interest.
I’ve had a long conversation with her for you, and have tried to convey your offer as positively as possible.
At this point in time, the owner is happy to make some necessary changes to the house to accommodate the buyer’s requests, however the offer price would need to be into the higher end of the price range of $5.2 - $5.5m.”
44At 3.13pm, Mr Hopkins replied to Mr Fredman’s email:
“Hi Joel,
Please specify exactly what ‘some changes’ means?
And are all of my terms and conditions met otherwise?”
45The following day, 10 March 2022 at 8.47am, Mr Fredman emailed Mr Hopkins:
“Good morning Sasha,
Physical changes to the house, such as the master robe and bar setup, they would be happy to build into an agreement at the right price. $5.1m is too low to cater for these inclusions, unfortunately.
I’ll leave with you to mull over.”
46At 9.03am, Mr Hopkins replied to Mr Fredman’s email:
“Joel,
There’s no point discussing anything further without having confirmation of the other items in my offer and terms such as my sales, settlement, deposit etc.
You have given me extremely minimal feedback to mull over as per your words therefore nothing will progress without these answers.”
47On 14 March 2022 at 9.14am, Mr Hopkins sent a text message to Mr Fredman:
“Checking in to see what the latest is Joel? Any progress? I didn’t hear back to my email with specifics? I’m obviously still interested however there is a small gap at the moment which I need more detail on. Give us a call if easier. Sash”
48On 16 March 2022 at 10.22am, Mr Fredman sent an email to Mr Hopkins:
“Hi Sasha,
This is the latest update from the vendors:
“Please thank Sasha again for his offer.
We would consider any offer in writing within the advertised range of $5.2 to $5.5 million.
Terms.
10% Deposit.
Unconditional and not subject to finance.
6 months settlement would suit us.
Any renovations to the property to be completed by the purchaser, at his expense and after settlement.
Keep well mate.
Regards
Jamie and Danielle”
Sasha, I suggest presenting me with your best and final, unconditional offer, which is as clean as you can make it.”
49At 1.37pm, Mr Hopkins replied to Mr Fredman’s email, setting out a two-option offer, expressed as being his final offers (the 16 March 2022 offer):
“Hi Joel,
As per our conversation now, there are two options:
1.$5m
a. Unconditional contract although I will need to get a building and pest done which can happen quickly
b. 4 month settlement or earlier with 1 month optional extension if required at no extra cost at buyers discretion if buyers residence settles earlier/later as per next term;
c. 2.5% deposit, further 2.5% deposit 60 days from unconditional date (I’m still trying to sell multiple properties)
d. Purchased through company
e. Clause 31.4 in contract – this will need to increase to $25k
2.Is my original offer being:
List of items to be included (and paid for) with offer and terms following below (price increased from $5.1m to $5.12m:
1. Wardrobe alteration to master as per plans completed by seller including ensuite reconfiguration and make good. Leave current robe as is. No built in robe where bed currently is as per plans. Wardrobe design to be approved by buyer – imagery/inspiration to be provided by buyer and signed off to accept any liability thereafter.
2. Downstairs wine rack to become wine display with glass and use adjoining cupboard space as bar display and reconfiguration. Bar design to be approved by buyer - imagery/inspiration to be provided by buyer. Capped at $4,000 and signed off to accept any liability thereafter.
3. Guest bed robe to be modified to include hanging space
4. Pool fence modification to run parallel to pool maximising lawn open space
5. Additional tiling to pool adjoining grass edge to accommodate enough space for sun baking chairs and a future day bed – additional 1.5m of tiling with modified pool fence as per point 4 above
6. Removal of hanging shelving in garage that imposes on ceiling height where main storage section is to allow for gym equipment
7. Joinery/modification provided to the front room with fire place to set up as study office/similar capped at $4,000 and signed off to accept any liability thereafter.
8. 5 pieces of artwork and 5 pieces of furniture included – mutually agreed by both parties
9. 5-6 new plants that match the entrance tall plants in the front garden bed – purchased and planted by owner – same or similar species – that won’t block the narrow path for servicing equipment
10. Extremely thorough commercial clean to outdoor bbq kitchen area, under bench cupboards, fridges, bbq, garage, etc. ensuring all electrical items and gas items are fully operational around bbq area
11. TV joinery allowance of $4,000 - design to be approved by buyer and signed off to accept any liability thereafter.
Offers and terms:
· 4 month settlement or earlier with 1 month optional extension if required at no extra cost at buyers discretion if buyers residence settles earlier/later as per next term;
· Conditional 21 days upon achieving 2x unconditional contracts on properties currently selling (Beaumaris, Byron Bay – nearly sold, offers received so this may only be Beaumaris)
· 2.5% deposit at unconditional, 2.5% 60 days from unconditional date – total 5% deposit – deposit can be released to vendor to cover proposed works however an interest will need to be registered over the property if so
· List of above items to be completed by settlement
· Building and pest
· $5.1m
· *note purchase will be in a company
· Clause 31.4 in contract – this will need to increase to accommodate the above works to $150,000
· We would also request these items noted in the contract to be included
·
Each day I enjoy living at my current residence which is closer to the beach and a lovely part of Beaumaris. The harder this gets, the more it is a sign for me to stay here. Of course if Bert sells my home for a high price then I’ll likely accept and reassess if I rent or buy.
These are my final offers – I have spent enough time on this now.
Thanks”
50At 4.42pm, Mr Hopkins sent another email to Mr Fredman:
“Is [sic] strongly suggest you have a firm chat with them around expectations.
A bird in the hand is worth two in the bush. The feeling of it being done and dusted must be worth $100k to them and to conclude their matters.
I’m out though after my offer.”
51At 4.59pm, Mr Fredman replied to Mr Hopkins’ email:
“Appreciate that, Sasha. And has been discussed on numerous occasions.
Be in touch. Will do my best”
52On 18 March 2022 at 11.36am, Mr Daou emailed Mr Fredman:
“Dear Joel
Danielle and I would accept the following.
Sale Price $5,000.000.00
a. Unconditional contract.
b. Building and pest inspection conducted within 7 days, or this clause is struck out.
c. Settlement date to be on or before October 14th, 2022.
d. 2.5% deposit, further 2.5% deposit 60 days from unconditional date, further 5% deposit payable 90 days from unconditional date. Total deposit 10% payable within 90days.
e. Clause 31.4 in contract to remain unchanged.
Thanks Joel again for your assistance.”
53At 1.09pm, Mr Fredman emailed Mr Hopkins:
“Hey mate.
Please see below from vendors. Again, I’m stoked that they’ve accepted $5m…
Please provide context in a kind manner on why you can’t provide the extra 5% deposit (other affairs etc) and reiterate how committed you are to the purchase…also, your reasoning behind the $15k for damages clause, based on previous experience…”
54At 2.17pm, Mr Hopkins replied to Mr Fredman’s email:
“Hi Joel,
Firstly thanks for your efforts towards creating a win-win scenario for this property.
To talk to your points below:
· Deposit amount and structure
oThis property is already $1m over my budget however I am selling other property to make it work as you are aware. I am taking a HUGE risk in offering an unconditional contract WITHOUT selling my home – hopefully this demonstrates maximum commitment to this purchase
oI was originally only going to offer 2.5% deposit (not the extra 2.5%) however I knew that it would likely cause an issue so I have put pressure on myself to sell my other property ASAP to accommodate this extra amount. Thankfully, after dropping the price on one of my Byron properties, I have had it sold yesterday
oRegarding a further 5% deposit, this is simply not possible. I have significant obligations and requirements upcoming over the next 6 months that is taking up all of my cashflow including my own separation. I have also had extensive delays in projects completing due to construction and covid delays which has impacted cashflow. 2.5% + 2.5% is my best and max
· Clause 31
oAs for the clause, I can drop to $15k. the reason why $5k isn’t enough stems from being burnt on a recent purchase. The property was supposed to be in the condition I bought it was however that is based on interpretation. So if there is an issue and there is conflict, the only way to resolve it is legally and that will cost $15k at a minimum. So moving forward, this clause is something I look closely at on any purchase
· Settlement
oI understand timing of settlement is challenging without me having sold my home and knowing the settlement date on that
o7 months really is far too long though as its likely the purchaser of my home will be 60-90 days therefore I would need this settlement to line up with that
oI put 4 months with the option to settle earlier simply because I do not know what the settlement date will be and needed flexibility on my own home
oGiven that the seller is looking to rent and wont have a hard fixed date like I will for selling and buying Fifth St, I really need to ensure that it lines up with my dates (unknown I know). I believe that 60-90 days+ from now would be more than sufficient to allow for this
Joel, a lot of time and effort has been invested by all 3 parties. Given that we are extremely close, I am taking my family through tomorrow morning (mum and partner from interstate) and I really want to walk through the home with this now finalised. Please pass on my commitment and feedback above to the sellers and lets conclude this today. I had a lot of open homes from the new listings online lined up for tomorrow so I can cancel them...”
55At 8.00pm, Mr Fredman sent the following text message to Mr Hopkins:
“Hi Sasha,
Nearly there…but, they require:
- Settlement of 120 days
- General Condition 31.4 $ amount to remain at $5,000.00
In all honesty, I've never had this GC adjusted in all my years of real estate, so hopefully you can appreciate this.”
“Actually, they will do the 90-days or later by mutual agreement now”
“Hopefully we now have a deal mate?
Call me if you need to”
56On 19 March 2022 at 6.14am, Mr Hopkins and Mr Fredman exchanged text messages:
Mr Hopkins:
“Seems as if we’re about there. Chat this morning”
“At the house”
“Seems it’s just that clause”
Mr Fredman:
“Morning. Yep, they’ve pretty much met all of your needs here…”
57Later that day, Mr Hopkins conducted a third inspection of the Property with his family.
58At 10.28am, Mr Hopkins and Mr Fredman exchanged further text messages:
Mr Hopkins:
“Big ticks all round”
Mr Fredman:
“…Could you please fill out relevant contract pages (plus vendor statement), sign / date and email to me?
Then I’ll get them to Docusign?”
Mr Hopkins:
“Please send the contract again asap so I can send to my solicitor to review asap”
“Also your trust account for $5k deposit…”
Mr Fredman:
“…I’ve emailed you with the contract”
59At 3.02pm, Mr Hopkins and Mr Fredman exchanged further text messages:
Mr Hopkins:
“What’s the internal and external size of the home mate?”
“And can they recommend or refer a trade that would be capable of doing the robe?”
Mr Fredman:
“Internal is approx. 76 squares including garage. External 986 sqm approx.
I’m sure they can recommend someone.”
Mr Hopkins:
“Do you have an area schedule or can you get it? I want to know internal living areas and external living areas. Understand block is 986”
Mr Fredman:
“Don’t have anything at the moment but I’m sure we can find some info”
“Who’s name am I putting on the contract please?”
“Sasha Hopkins and / or nominee?”
Mr Hopkins:
“I’If [sic] you could request this info that would be much appreciated”
60At 8.07pm, Mr Hopkins sent a text message to Mr Fredman confirming payment of $5,000 to Fredman PG Sales Trust Account.
61On 20 March 2022 at 6.38am, Mr Hopkins sent a text message to Mr Fredman:
“Setting expectations, it will take a few days for the review by solicitor, then sign, then b&p a week odd. However deposit is paid so that should show I’m the real deal”
62At 9.23am, Mr Fredman and Mr Hopkins exchanged further text messages:
Mr Fredman:
“Ok”
“I thought you were going to sign last night, probably should’ve told me this earlier mate”
Mr Hopkins:
“No I said I won’t sign until the lawyer gives me the all clear in our phone conversation yesterday which you acknowledged.
Standard process”
“What’s the point of having a solicitor review if I sign without advice?”
Mr Fredman:
“Most purchasers have docs reviewed prior to agreeing to the deal”
“To avoid back and forth on any items”
“But that’s ok. I’d suggest getting her to review as soon as possible”
63On 21 March 2022 at 11.11am, Mr Hopkins and Mr Fredman exchanged text messages:
Mr Hopkins:
“Just spoke with Irene, told her it’s urgent. She’s under the pump though so will take a few days.
There’s a few things though reviewing the cos again that I’m not overly happy with such as not including the outdoor table that’s there and part of the fixed built in bench, the bbq area there is ice and fridge that the cos apparently doesn’t include. This isn’t really cool and it gives the impression that it’s all built in abs fixed – like the fridges inside.
I’m also unclear as to what part of the tv cabinet is actually included? Is it the wall unit included?”
64At 4.11pm, Mr Fredman and Mr Hopkins exchanged further text messages:
Mr Fredman:
“Hi Sasha,
The vendors lawyers would like the contract to be signed by tomorrow please.”
Mr Hopkins:
“As per our discussion today and texts yesterday, Irene is on it but is busy. It’s highly unlikely she will have it completed tomorrow.
I’ve been extremely transparent with this every step of the way and I won’t be pressured to go against my process and ticking legal boxes when spending $5mil on a house. If my lawyer has questions, they will need to be addressed. This is standard.
If there is an issue, call me. Otherwise it will be done as soon as possible.”
65On 31 March 2022, Mr Hopkins executed the Contract.
66On 3 April 2022, Ms Daou executed the Contract. On 7 April 2022, Mr Hopkins conducted a fourth inspection of the Property. Trueline Inspections also inspected the Property on this date and subsequently prepared a property inspection report and a timber pest report.
67The property inspection report, amongst other things:
(a) identified a safety hazard in the pool area and recommended “that a pool/spa safety inspection be completed with new legislation and safety standards being introduced”; and
(b) identified a major defect in the subfloor due to rising damp.
68Following the inspection, Mr Hopkins and Mr Fredman exchanged text messages:
Mr Hopkins:
“Conclusion is below average for major and minor defects which is surprisingly disappointing”
[Mr Hopkins sent a screenshot of the online advertisement text, circling the words “Externally, an outdoor shower, in-ground trampoline, gas heated lap pool/spa with silk water filtration…”]
“Where is the spa? What is silk water filtration?”
Mr Fredman:
“I'm no pool expert, but it's the type of filter utilised”
“I'm waiting further instruction re: defect, fyi. Both vendors discussing”
Mr Hopkins:
“K”
69On 8 April 2022 at 10.32am, Mr Hopkins emailed Mr Fredman:
“I’m yet to go over it and call the inspector which I’ll do later today. There may need to be some contract amending”
70At 11.14am, Mr Fredman emailed the Daous and their conveyancer, Julianna Harvey from We Care Conveyancing regarding the inspection reports:
“…I have since received the report from the professional building and pest inspection firm, who conducted their inspection yesterday morning – please see attached.
It appears that they’ve found a major defect in the sub-floor, which you’ll find detail plus photos on within the report.
Sasha has called me advising that he still intends to purchase the property, however it would now be subject to rectifying this sub-floor issue prior to settlement.”
71From 8 to 17 April 2022, Mr Daou arranged for plumbing works to be undertaken at the Property to rectify the defects.
72On 19 April 2022, Mr Hopkins conducted a fifth inspection to inspect the drainage works conducted at the Property. After the inspection, Mr Hopkins requested silicone works be carried out to the outside of a window. An acknowledgment that this defect was to be rectified by the vendor was included as a special condition in the Contract.
73On 21 April 2022, Mr Hopkins caused the first half of the deposit to be paid.
74On 28 April 2022 at 5.54am, Mr Hopkins emailed Mr Fredman:
“…Hope all is well. I can’t believe how quickly the market has turned for the worse. I hope the sellers know that they just scraped through.
That aside, below is a list I’d like to get feedback/info on please:
1. Please send fully executed contract
2. Please send deposit receipt
3. Please send fully plans with area schedule
4. Please ask if there is any furniture they do not wish to retain Inc artwork/leave behind
5. Is it possible to go through next Thursday or Friday to measure up a few things so I can order things like outdoor furniture, other furniture and rugs, the downstairs guest robe so I can get the hanging section made while I wait for settlement, the bar, front room study set up etc. just things like that. There are huge delays on all furniture at present and I want to have it all ready when i move in. I will have my Mum down from interstate again and I’d like to have her there to help. Max an hour
6. The big pot and plant in the front courtyard - is that staying?
7. Will I get a full walk through by the owners of how to use all the security systems such as electronic gates and buzzers, cameras, any home automation, the sonos set up etc? This is something I’d greatly appreciate as I didn’t get this when I moved in where I am which has been a real pain and I haven’t been able to still use the setup here…
I think that’s it for now however I may think of something else.
Please let me know asap as there’s a bit for me to prepare and action…”
75On 3 May 2022 at 4.42pm, Mr Fredman emailed the Daous, seeking copies of plans for the Property:
“Hi Guys,
Sorry to bother you with this, but would you mind sending me the full house plans and area schedules (whatever you can find), as purchaser has requested such info.
Thanks in advance.”
76At 4.59pm, Mr Daou sent a copy of the Plans for the Property to Mr Fredman.
77On 7 May 2022 at 9.22am, Mr Hopkins emailed Mr Fredman, seeking a copy of the full plans with area schedule.
78At 9.23am, Mr Fredman sent a copy of the Plans to Mr Hopkins.
79At 12.41pm, Mr Hopkins sent a text message to Mr Fredman:
“Joel,
You have told me the house is 76 squares of living. It is 46 squares as per the plans. This is a major major issue. I bought the house because of those sizes. I have asked for the dimensions for months.
It's in writing in texts. This is misrepresentation and l'll be seeking legal advice.
You can call me if you desire but I'm not happy.”
80Later that same day at 9.45pm, Mr Hopkins sent an email to Mr Daou:
“Hi Jamie,
Good to have Fifth St wrapped up and looking forward to moving in. Did you ever consider a basement or rooftop? Would it be possible to achieve those things in the future so you think?
Also can you recommend a cabinet maker/similar to amend the downstairs guest robe for hanging space and also enhancing the bar and wine area for more of a display?
On another note, are you building in byron yet? And do you only build your own plans?
I’d be curious to understand your design process, costs etc for potential future projects. What are your current build cost averages at the moment per square metre or square? Given that construction costs have gone up so much? Trying to get an understanding of what it would cost then key to build something like Fifth St elsewhere.
Also are you building in Sorrento and Portsea? I’ve got 2 sites there about to build 2 homes on each block so thought I’d ask. Also one in Byron.
Anyway, your quality and design is great so well done.
Cheers”
81On 8 May 2022 at 9.09am, Mr Hopkins sent an email to himself with a screenshot of his SMS exchange with Mr Fredman regarding the spa and silk water filtration system.
82On 9 May 2022, Mr Hopkins attended the Property to conduct a sixth inspection.
83At 2.14pm, Mr Hopkins’ conveyancer, Ms Giannakis of First Class Legal, sent an email to Mr Fredman:
“… We have been provided with a copy of the Architectural Plans – copy attached.
Can you please advise if this is the final version of the Plans.
We note that some of the measurements in the Architectural Plans and the floorplan of the property on the realestate.com.au (attached) do not match. For example, on the floorplan on realestate.com.au it states that the two (2) bedrooms upstairs are 3.9 x 4.6 but the Architectural Plans state that the measurement is 4.0 x 4.0 (page 7 of the PDF).
Can you please advise if there are further updated Architectural Plans.” (emphasis in original)
84At 2.37pm, Mr Fredman sent an email to the Daous:
“Hi Guys,
Are you sure this is the final version of the house plans?
Master bedroom setup, study is different to the existing, if you could please provide up-to-date version?”
85At 4.05pm, Mr Daou replied to Mr Hopkins’ email of 7 May 2022 at 9.45pm:
“Thank you and appreciated. Fifth st is a beautiful home, I hope you and your family enjoy. We never considered basement or rooftop nor explored.”
86On 11 May 2022 at 10.13am, Mr Fredman sent an email to Ms Giannakis, with a copy of “final” architectural plans for the Property.
87At 10.51am, Ms Giannakis replied to Mr Fredman:
“Unfortunately these still do not match up with the measurements of the floorplan which was advertised.
Is there a way we can (well Sasha) can arrange for someone to attend the property to have the rooms/property measured.
The property was advertised as being approx. 76sq but the Architectural Plans indicate that is it approx. 56sq which is quite a difference.”
88On 12 May 2022 at 9.21am, Mr Daou had a discussion with Mr Fredman about Mr Hopkins’ inquiry as to the size of the Property. Shortly after, at 9.32am, Mr Daou made a file note of the conversation (the 12 May 2022 file note).
89Between 12 May 2022 and 27 May 2022, Mr Hopkins, Mr Fredman, Anna Weatherlake (Mr Fredman’s assistant), and Ms Daou had discussions by email in relation to Mr Hopkins purchasing furniture and art from Ms Daou.
90On 31 May 2022, Mr Hopkins caused $125,000, being the second part of the deposit, to be paid. The payment was made by Happiness Lives Here Pty Ltd, a company Mr Hopkins’ mother was the sole director of at the time.
91On the same day, Justice Beach made asset preservation orders (Asset Preservation Order) in a Federal Court of Australia proceeding commenced by the Australian Securities and Investment Commission (ASIC) against Mr Hopkins and other parties (Federal Court proceeding), effective until 3 June 2022.
92On 1 June 2022, Ms Weatherlake and Mr Hopkins exchanged emails, confirming that the outstanding balance of the deposit had been received and arranging a time for the inspection of silicone works conducted at the Property.
93On 3 June 2022, Justice Beach made orders in the Federal Court proceeding extending the Asset Preservation Order to 6 June 2022. The orders also recorded undertakings given by Mr Hopkins to the Federal Court of Australia, including:
“…[Mr Hopkins] will not procure, solicit or receive, by himself, his servants, agents, employees or any company of which he is an officer or member, any funds for the purpose of or in connection with any business operated by the defendants or any company associated with the defendants, including for the purpose of property development…”
94On 7 June 2022, Justice Beach made orders in the Federal Court proceeding varying and extending the Asset Preservation Order until further order. Relevantly, Mr Hopkins provided additional undertakings to the Federal Court of Australia further to the Asset Preservation Order of 3 June 2022, including:
B. The Court further notes that the second defendant has, by its counsel, given an undertaking to the Court that it will notify the plaintiff if the second defendant proposes to pay or incur more than $40,000 in any month pursuant to paragraph 5(b) below, with such notice to be given at least 2 clear business days prior to the payment or incurring of any expense in excess of that amount.
C. The Court further notes that Sasha Hopkins SMSF Pty Ltd has, by its counsel, given an undertaking to the Court not to convert or deal with any cryptocurrency held by that company, without the consent of the plaintiff or leave of the Court…
95On 8 June 2022, ASIC published a media release in relation to the Federal Court proceeding.
96On 23 June 2022, Mr Hopkins sold his Beaumaris home for $3.125m.
97On 5 July 2022 at 6.27pm, Mr Hopkins’ solicitor, Omar El-Hissi of NOH Legal, sent an email to the Daous’ conveyancer, We Care Conveyancing, alleging misrepresentation as to the size of the dwelling on the Property.
Issues for determination
98The parties’ agreed list of issues for determination is attached to these reasons as Annexure A.
A. The Representations
Issue 1: Did the Agent Parties make the Representations?[2]
[2] The parties agreed that the mere conduit defence is appropriately dealt with under Issue 1. As the
question whether Ms Daou authorised the making of the representations is relevant to the assessment of the mere conduit defence, Mr Hopkins’ submissions on this question are addressed in this context.
Plaintiff’s submissions
99Mr Twidale, on behalf of Mr Hopkins contended that the Agent Parties made the representations in writing in the copy of the online advertisement on realestate.com.au (the spa representation) and by the notation on the floor plan and in the 19 March 2022 text message (the measurement representation).[3]
[3]A reference was made to the existence of a brochure in the course of Mr Twidale’s oral opening submissions. The matters was not raised again until a brochure was called for in the course of Mr Daou’s cross-examination some 6 days later. No brochure was produced. A brochure was not part of the pleaded case and no application was made by Mr Hopkins to amend the pleadings to rely on any brochure.
100The Daous authorised the making of the spa representation. They approved the copy of the online advertisement.
101Ms Daou authorised the making of the measurement representation at the 17 August 2021 meeting or thereafter.[4] The Court should conclude that Mr Fredman sought and obtained approval to include the notation on the online advertisement:
(a) Mr Fredman gave evidence that at the 17 August 2021 meeting, “[t]he number 76 was restated in conversation”;
(b) Mr Fredman needed that information to produce the floor plan and to produce a statement with a range of valuations to give to the vendor;
(c) Mr Fredman gave evidence that he “left the meeting feeling confident in the size.” His reference to “the size” must have been to the internal size of the dwelling because he was cross-examined about the internal size, and not the external size, and the only issue in that exchange was the internal size;
(d) There was no written communication between Mr Fredman and the Daous discussing that topic again. This suggests that it had been agreed and discussed and approved at that meeting;
(e) Although Mr Fredman conceded he could not be as precise as to the clarification, the conduct of the parties thereafter demonstrates that “they had gone to the degree of detail, which was 76 squares approx., and that was ultimately put on the [floor plan].”
[4] The parties recorded in the agreed joint chronology that the date of the meeting was 17 August 2021.
102Despite Mr Fredman accepting responsibility for having failed to provide the floor plan with the notation to the Daous for approval, Mr Twidale submitted that Mr Fredman would not make such a fundamental mistake. The Court ought to infer that he obtained approval for the inclusion of the notation on the floor plan at the 17 August 2021 meeting:
(a) Mr Fredman sought approval about everything possible including the photographs on the online advertisement;
(b) Clauses 9 and 13(1) of the Professional Conduct Rules make it more likely than not that Mr Fredman did seek and obtained approval at the 17 August 2021 meeting because those obligations imposed upon him positive steps to check them.
103Had approval not been given at the 17 August 2021 meeting, one would have expected the Daous to correct the notation on the floor plan. The Court ought to reject Mr Daou’s evidence that he did not look at the online advertisement. It is not possible that the Daous sold their home without looking at the online plan until after it was sold. This is particularly so as Mr Fredman paid more money to have the sale listed higher in the list of online search results in order to re-engage or re-enliven the audience.
104Had approval not been given at the meeting, one would have expected Ms Daou’s denial of having given approval to have been recorded in Mr Daou’s file note of 12 May 2022. Having come to know on 7 May 2022 that the online advertisement contained the notation, one would have expected Mr Daou to have recorded in his file note that they never approved 76 squares.
105Mr Daou’s evidence that he was horrified when he looked at the online advertisement on 4 July 2022 and saw the notation on the floor plan ought to be rejected. Mr Daou was aware of Mr Hopkins’ text message to Mr Fredman on 7 May 2022 and the issue of the wrong size. Mr Daou’s knowledge is a “triggering event” from which one would have expected him to say, “[H]ow dare you, Mr Fredman, put that on that online plan. I never approved that.” Mr Daou did not say that because the Daous had approved it in the 17 August 2021 meeting.
106The measurement representation was not withdrawn and remained on the online advertisement because the Daous approved it to remain there. It was not corrected by them because Mr Fredman was told to include those words. The Court ought to find that the Daous considered the text on the Online Advertisement and were satisfied with its contents. They were satisfied because that was what the vendor wanted to portray in the plan.
107Having submitted that Ms Daou authorised the making of the representations, Mr Twidale contended in response to the mere conduit defence that the Agent Parties were not acting as a “mere conduit” of the vendor, because:
(a) Mr Fredman did not make it clear when he made the representations that he was not the source of the information and that he disclaimed belief of its truth or falsity; and
(b) the Agent Parties adopted the measurement representation and made alterations to it by inserting the word “internal” and removing the reference to “including garage.”
First defendant’s submissions
108In relation to the spa representation, Mr Morrison submitted that nothing in the reference to the “pool/spa” in the online advertisement implied that the spa was separate from the pool. Even if it did, the representation was not sufficiently material. Its presence or absence could be easily verified upon a visual inspection.[5]
[5]Materiality is a relevant consideration in assessing whether a representation has been made at all: Clark v Clark (1882) 8 VLR (E) 303 at 327-8; Smith v Chadwick (1883-1884) 9 AC 187 at 190, 196, 200; Smith v Land and House Property Corp (1884) 28 Ch D 7 at 13, 14.
109In relation to the measurement representation, the notation on the floor plan was not a representation that the area stated was true. The reference to 76 squares was heavily caveated. Immediately below the relevant statement as to the size of the dwelling was a disclaimer:
“Every care has been taken to verify the accuracy of details in this brochure. All measurements are approximate and prospective purchasers are requested to take such action as is necessary to satisfy themselves of any pertinent matters.” (the disclaimer)
110The only relevant representation that was made was that contained in the 19 March 2022 text message. The 19 March 2022 text message represents the high watermark of Mr Hopkins’ case.
Second and third defendants’ submissions
111Mr Briggs, on behalf of the Agent Parties submitted that the Agent Parties did not make the representations as alleged.
112The spa representation is not a representation that there was a pool and a spa but rather is consistent with there being a pool or spa.
113In relation to the measurement representation, whilst it is uncontroversial that Mr Fredman published the online advertisement and sent the 19 March 2022 text message, neither the notation on the floor plan nor the 19 March 2022 text message communicated that the internal size of the dwelling on the Property was, in fact, approximately 76 squares. Rather, it was no more than a representation that the agent had been informed that those were the internal measurements of the home.
114The Agent Parties did no more than to pass on information provided to them by another without adopting it or endorsing it, consistent with cases in which the courts have held the agent to be a mere conduit. A person, such as an agent, who passes on information from another without adopting or endorsing it, is not involved in making the representation and does not engage in misleading or deceptive conduct.[6]
[6]The question whether the Agent Parties made the representation is dealt with in Issue 1. The question whether conduct of the Agent Parties was misleading or deceptive is dealt with in Issue 12.
115Mr Fredman relied on information provided to him by the vendors during calls and emails:
(a) The vendors approved the text of the online advertisement; and
(b) The measurement of the home was information that Mr Fredman obtained from the vendor and passed on.
116There is no case advanced that anyone thought anything other than Mr Fredman was passing on information given to him by the vendor. Mr Hopkins demonstrated that he understood that Mr Fredman, as a real estate agent, was conveying information and offers between him and the vendor.
Legal principles
117The circumstances in which an agent is considered a “mere conduit” of the vendor, were considered by French J in Gardam v Geo Wills & Co:
“The innocent carriage of a false representation from one person to another in circumstances where the carrier is and is seen to be a mere conduit, does not involve him in making that representation. Nobody would expect that the postman who bears a misleading message in a postal article has any concern about its content or is in any sense adopting it. The same is true of the messenger boy or courier service…”[7] (emphasis added)
[7] (1998) 82 ALR 415 (Gardam) at 427.
118In Butcher v Lachlan Elder Realty Pty Limited,[8] a suburban real estate agent produced a brochure which reproduced an inaccurate survey diagram of land. The agent provided the brochure to two interested persons. They purchased the property and later discovered the inaccuracy. The purchasers brought a claim against the agent for misleading or deceptive conduct. In concluding that the agent did not engage in conduct towards the purchasers which was misleading, the majority stated:
“Whatever representation the vendor made to the purchasers by authorising the agent to issue the brochure, it was not made by the agent to the purchasers. The agent did not more than communicate what the vendor was representing, without adopting it or endorsing it. The conclusion flows from the nature of the parties, the character of the transaction contemplated, and the contents of the brochure itself.”[9] (emphasis added)
[8] (2004) 218 CLR 592 (Butcher).
[9] Butcher, at [40] (per Gleeson CJ, Hayne and Heydon JJ).
119In Hyder v McGrath Sales Pty Ltd,[10] the purchaser made a claim for misleading or deceptive conduct in relation to alleged pre-contractual misrepresentations concerning the availability of parking at the property, as the real estate agents made statements to prospective purchasers to the effect that there was private parking on a particular strip of land. Both agents gave evidence at trial that a draft copy of all the marketing material for the property was sent to the vendor for approval before being published.[11] On appeal by the purchaser against the vendor’s real estate agent, the Court held that:
“Reasonable purchasers in the position of the Hyders would have taken from their inspection of the property, the relevant marketing material and their oral communications with McGrath that the information that it provided in respect of parking was obtained from the vendor and that McGrath was not guaranteeing its accuracy. They would have understood that McGrath was merely passing on information from the vendor regarding parking on the strip. As a result I conclude that McGrath did not engage in misleading or deceptive conduct...”[12] (emphasis added)
[10] [2018] NSWCA 223 (Hyder).
[11] Hyder, at [38] (Macfarlan JA).
[12] Hyder, at [75].
120In Dalton v Lawson Hill Estate Pty Ltd,[13] the purchaser of a vineyard brought a claim against the vendors and the agent for misleading or deceptive conduct. The purchaser claimed that the agent incorrectly represented that the property contained 20 acres of fruiting vines, including in a brochure. There was no issue that the information came to the agent from the vendors.[14] The agent sent the draft brochure to the vendors containing a statement “presently there are 22 acres of vines”. One of the vendors altered the number to “20” and returned the brochure to the agent.[15] As against the agent, the purchaser claimed, “when the time to exchange contracts arrived, the position of the Agent was ‘one of corroboration… on the basis that [the Agent] told me it was 20 acres’.”[16] In that context, the Court held:
“ …Where a person purports to do no more than pass on information supplied by another, in circumstances that make it apparent that the person is not the source of the information and that the person expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on, for what it is worth, does not involve conduct that is misleading or deceptive.”[17] (citation omitted)
[13] [2005] FCAFC 169 (Dalton).
[14] Dalton at [77].
[15] Dalton at [104].
[16] Dalton at [77].
[17] Dalton at [82], referring to Yorke v Lucas at 666.
121The Court further found that the communications between the vendors and the agent demonstrated that some care was taken by the agent to obtain confirmation from the vendors that the statements in the relevant brochure were accurate.[18]
[18] Dalton at [84].
Conclusion and analysis
The spa representation
122I am not satisfied that the spa representation was made. The reference to a “pool/spa” in the online advertisement copy was not a representation that there was, in fact, an external heated spa:
(a) Considered in its entirety, the online advertisement makes it plain there is no outdoor heated spa. The floor plan shows only a pool. The photographs contained in the online advertisement show only a pool.
(b) The use of a slash (“/”) is consistent with a generic reference to a pool or a spa as illustrated in the report of the building inspector engaged by Mr Hopkins to prepare a building report:
“It is highly recommended that a pool/spa safety inspection be completed with new legislation and safety standards being introduced. Please note that this inspection does not cover pool fencing and other pool fittings and fixtures. It is highly advised that you contact your local council and conduct a pool safety audit.”
(c) Mr Hopkins agreed in cross-examination that the use of a slash is commonly used to mean “or” and that it would not be safe to assume that the words meant there was a pool and a spa.
123Even if the spa representation was made, it was immaterial. It was clear from the photographs in the online advertisement and the floor plan that there was no external heated spa. Its presence or absence could be easily verified upon inspection. These matters are further addressed in Issue 4.
The measurement representation
124By the notation on the floor plan and the 19 March 2022 text message, the Agent Parties made a statement of fact that the internal size of the dwelling was approximately 76 squares and thereby made the measurement representation.[19]
[19]As I have found that the spa representation was not made, it is unnecessary to address it further. Had I found it was made I would have found that the Agent Parties did not make it because Ms Daou approved the copy with the reference to “pool/spa”. In those circumstances, I would have found that the Agent Parties were acting as a mere conduit of Ms Daou. However, as already found, the online advertisement did not represent that there was an external heated spa.
125For the reasons set out below, the Agent Parties were not a mere conduit of the vendor. They were not merely relaying information supplied by Ms Daou. On the facts of this case, Ms Daou did not “supply” the information to Mr Fredman for him to pass on.[20]
[20] Butcher at [40] (Gleeson CJ, Hayne & Heydon JJ).
Notation on the floor plan
126The circumstances in which the notation on the floor plan was made do not permit a finding that Ms Daou provided Mr Fredman with the information for inclusion on the floor plan, authorised Mr Fredman to issue the floor plan with the notation or approved the insertion of the notation on the floor plan. These circumstances are distinguishable from those in Butcher, in which the vendor authorised the agent to issue the brochure containing the representation, and this was the basis for the finding that the agent did no more than to communicate what the vendor was representing.[21]
[21]See Butcher at [40] (Gleeson CJ, Hayne & Heydon JJ): “Whatever representation the vendor made to the purchasers by authorising the agent to issue the brochure, it was not made by the agent to the purchasers. The agent did no more than communicate what the vendor was representing, without adopting it or endorsing it.” (emphasis added)
127In the present case, Mr Fredman:
(a) arranged for the floor plan to be drawn by a person from Visual Effect. At that time, the notation was not included on the floor plan;
(b) sent versions of the floor plan to Ms Daou for approval and Ms Daou approved those versions (without the notation);
(c) amended[22] the floor plan by adding the notation;
(d) did not seek instructions to amend the floor plan by adding the notation; and
(e) did not send the amended floor plan with the notation to Ms Daou for approval.
[22] By instructing the floor plan drawer to amend.
128Whilst Mr Fredman sent previous versions of the floor plan to the Daous for approval, he gave evidence that he thought they forgot to send amended version with the notation to the Daous. Mr Fredman accepted that was his mistake. His evidence is consistent with Mr Daou’s and Ms Daou’s evidence that at no time did they approve or authorise the floor plan with the notation.
129There is no basis upon which to reject Mr Fredman’s clear evidence against interest that he failed to send the Daous the floor plan with the notation. His knowledge of his obligations does not make it more likely that he did seek the vendor’s approval, despite his clear evidence and that of Ms Daou and Mr Daou, to the contrary.
130Neither the 3 August 2021 text message nor what occurred at the 17 August 2021 meeting constituted approval by Ms Daou (or Mr Daou) of the making of the measurement representation:
(a) I am not satisfied that the representation made by Ms Daou by her 3 August 2021 text message was that the internal size of the dwelling was approximately 76 squares. Rather, the evidence supports an inference that Mr Fredman assumed that the reference to 76 squares in Ms Daou’s 3 August 2021 text message was a reference to the internal size of the dwelling:
(i)The question Mr Fredman asked of Ms Daou was ambiguous. It did not confine the answer sought to the internal size of the dwelling having regard to the use of “etc”.
(ii)Neither Ms Daou’s text message to Mr Daou, nor his response, refer to the internal size of the dwelling.
(iii)Ms Daou’s response to Mr Fredman similarly makes no reference to the internal size of the dwelling rather, a general statement that “[t]here are 5 bedrooms and approximately 76 Sqrs including the garage.”
(b) The ambiguity in Mr Fredman’s query is underscored by the following:
(i)According to Ms Daou, when she received Mr Fredman’s 3 August 2021 text message, she thought Mr Fredman was talking about the whole house, internal and external because of the “etc”. This was because there is an “outdoor kitchen, which is quite a large outdoor kitchen in the alfresco… it was all the… external or built up areas around the pool… the surface area of the garage.”
(ii)Mr Daou understood the question in Ms Daou’s text message on 3 August 2021 to be as to the overall size of the home, including internal and external spaces. According to Mr Daou, as a builder, one always calculates the cost to construct a property based on internal areas and external areas. That was roughly 76 squares.
(c) Taken at its highest, Mr Fredman’s evidence does not support a finding that at the 17 August 2021 meeting, Ms Daou clarified or the Daous stated that the internal size of the dwelling was approximately 76 squares:
(i)To Mr Fredman’s recollection, there was another mention of the house size from Ms Daou. Mr Fredman said that the number 76 was restated in conversation, but “[he didn’t] know if it was so much as a clarification, it was the size”. Mr Fredman recalled Ms Daou “mentioning 76 squares in some way.” It was very hard for Mr Fredman to remember exactly what they talked about in the meeting, but he left the meeting “feeling confident in the size.” However, his evidence begs the question, the ‘size of what?’
(ii)Mr Fredman conceded in cross-examination that any reference to 76 squares could have been a reference to the internal and external built form, consistent with Ms Daou’s evidence. His recollection did not descend to that level of detail.
(iii)After being further pressed in cross-examination, the highest Mr Fredman’s evidence got was that he recalled “a comment in the way of, ‘It’s very hard to find 76 squares.’”
(d) Having regard to Mr Fredman’s evidence of the 17 August 2021 meeting, it is not open to find that Ms Daou (or Mr Daou) approved “in advance”, at that meeting (or at any time), Mr Fredman making the measurement representation on any future occasion:
(i)There is no basis on the evidence for a finding that Mr Fredman was told at that meeting to use words on a publication of some sort, 76 squares including the notation on the floor plan published months after the meeting, as contended for by Mr Twidale.
(ii)This is supported by the fact that versions of the floor plan absent the notation were sent to and approved by Ms Daou and Mr Daou, supporting an inference that Mr Fredman understood approval ought to be sought before publishing information about the Property, albeit he did not do so on that occasion.
(e) A finding that any reference to 76 squares was not “clarified” at the 17 August 2021 meeting is consistent with the context of the meeting, about which both Mr Fredman and Ms Daou gave evidence:
(i)The Daous were interviewing Mr Fredman at the 17 August 2021 meeting. They were still deciding whether to use him or not. As Mr Fredman was not yet engaged by the Daous as their agent, there would have been no cause to focus on the internal size of the dwelling (as distinct from the built area) or to clarify the reference to 76 squares in Ms Daou’s 3 August 2021 text message in case at some time in the future, they may need to produce marketing material with a reference to the internal size of the dwelling.
(ii)According to Mr Fredman, they had preliminary discussions around the Property and what it offered. It would be after that stage they would request more information. They did not go through all the finer details at that juncture.
(iii)According to Mr Fredman, the main reason for going there was to meet the Daous and talk to them about the sale process, rather than “to suss out the size of the house.” To value the house, Mr Fredman would look more at the land size rather than the internal size.
(f) The absence of evidence of any further communication between the Daous and Mr Fredman about the internal size of the dwelling on the Property is consistent with Mr Fredman’s evidence that he simply failed to revert to Ms Daou for instructions at the time he caused the notation to be made on the floor plan. It does not support an inference that the internal size had been agreed, discussed and approved at a meeting before he was retained.
131I do not accept Mr Twidale’s submission that one would have expected the Daous to correct the notation on the online advertisement had the Daous not given approval. Whilst ordinarily, one might expect a vendor to be interested to look at the online advertisement of their home, given the context and purpose of the sale of the Property, I accept Mr Daou’s and Ms Daou’s evidence that they did not notice the notation on the floor plan in the online advertisement:
(a) The sale was part of a marital separation and part of the financial binding agreement. The Daous were in dispute over their assets. Ms Daou tried to keep the Property but could not afford to. Mr Daou could not agree to Ms Daou keeping the Property.
(b) It is in that context that Ms Daou looked at the photographs of the house itself, but did not read the text of the online advertisement or look again at the floor plan. Having already signed off on the floor plan (without the notation), it is readily understandable that she would have noticed the floor plan but not looked at it.
(c) Mr Daou accepted the proposition put to him in cross-examination that he never went to look at the online advertisement to see what he paid for: “Why would I look at my own house?”
19 March 2022 text message
132In relation to the 19 March 2022 text message, no challenge was made to Mr Daou’s and Ms Daou’s evidence that Mr Fredman did not discuss the contents of the text message with them before he sent it, nor did they see a copy of the text message before it was sent.
133In the circumstances, there is no basis to make a finding that Ms Daou approved of or authorised the contents of the text message, or that she supplied Mr Fredman with the relevant information to be passed on by the 19 March 2022 text message.
Credit of Ms Daou and Mr Daou
Plaintiff’s submissions
134Mr Twidale submitted that Ms Daou’s and Mr Daou’s evidence should be accepted with caution. In summary:
(a) No reasonable vendor would disregard the contents of their realestate.com.au listing either at the time it was published or after further money had been paid to increase its listing profile;
(b) Ms Daou appeared to be willing to extend the truth when it suited her:
(i)She gave evidence about being in financial stress at the time she purchased the Property, an assertion which was contradicted by the contents of her NAB application loan made at the time; and
(ii)She claimed she did not know the difference between a director and shareholder despite having a commerce degree, being a shareholder and a director of companies, and understanding the concept of trust property;
(c) Ms Daou’s evidence was inconsistent with the way in which her case was opened. Mr Morrison opened that Ms Daou had a clarifying conversation with Mr Fredman in which she made it clear that she was referring to the entire built area. However, her evidence was that she did not have a clarifying conversation with Mr Fredman before the Contract was signed. It is not open for Ms Daou to contend that the clarification occurred only after Mr Hopkins raised the issues concerning the size of the Property; and
See also Hanave Pty Ltd v LFOT Pty Ltd [1999] ATPR 41-687 at 72,793 [51], where Kiefel J stated, “Courts ought to be, and no doubt are, cautious in accepting mere assertions of reliance as essentially self-serving, and will usually attempt to assess that prospect by reference to objective criteria. This will be so particularly where the misrepresentation is not necessarily likely to be recalled as having had a strong impact.”
281Having regard to my findings above, it is unnecessary to determine this issue. Had I needed to determine the issue, I would not have made an order for damages and compensation or a declaration that the Contract is void ab initio on the facts as found.
D. Mistake
Issue 22: Is Hopkins entitled to restitution on the grounds alleged in the 2FASOC at [28]-[31]?
282Paragraphs [28]-[31] of the 2FASOC plead that Mr Hopkins was induced to adopt a mistake of fact as to the size of the dwelling with the effect that “the First Defendant must make restitution to the Plaintiff.”[95]
[95] Mr Hopkins has not alleged a unilateral mistake as to a fundamental term.
283In his written submissions in reply, Mr Twidale stated in answer to the Issue 22 question, “Yes, it is formally submitted he is.” The issue was not otherwise addressed in closing written or oral submissions.
284In any case, having regard to the findings made above, the answer is no.
E. Relief against forfeiture
Issue 23: Is Hopkins entitled to relief against forfeiture of the Deposit on the grounds alleged in the 2FASOC at [32]? [96]
[96]2FASOC at [32] seeks relief against forfeiture in equity or pursuant to s 49 of the Property Law Act 1958 (Vic).
285No. There is no evidence that the deposit is excessive or unconscionable in amount.[97] There is also no basis on which to consider that Mr Hopkins has established “exceptional circumstances” in order to enliven the discretion under s 49(2) of the Property Law Act 1958 (Vic).[98]
[97]Ashdown v Kirk [1999] 2 Qd R 1 at 8; Luu v Sovereign Developments Pty Ltd [2006] NSWCA 40 at [26]-[27].
[98] This issue was not addressed in either written or oral submissions made on behalf of Mr Hopkins.
F. Equitable lien
Issue 24: Is Hopkins entitled to an equitable lien over the Funds in Court on the grounds alleged in the 2FASOC at [33]-[46], and, if so, is he entitled to the Funds in Court?
286No. Mr Twidale accepted that this issue falls away if the Court is with or against either party.
G. Proportionate liability
Issue 25: Should there be an apportionment pursuant to s 24AH of the Wrongs Act 1958 (Vic) or s 87CB of the Competition and Consumer Act 2010 (Cth)?
287Having regard to my findings above, it is unnecessary to determine this issue.
H. Contribution
Issue 26: If Hopkins is entitled to recover any sum, are the defendants entitled to contribution vis-à-vis each other?
288Having regard to my findings above, it is unnecessary to determine this issue.
I. Daou’s counterclaim
Issue 27: Is Daou entitled to the Deposit?
289Yes. Ms Daou validly terminated the Contract on 4 August 2022 when the timeframe for Mr Hopkins to comply with Daou’s Notice of Default and Rescission expired.
Issue 28: Is Daou entitled to damages for breach of the Contract of Sale? If so, how much?
290Pursuant to General Condition 32 of the Contract, a party who breaches the contract must pay to the other party on demand compensation for any reasonably foreseeable loss to the other party resulting from the breach and any interest due under the contract as a result of the breach.
291Where a party sustains loss by reason of a breach of contract, they are, so far as money can do so, to be placed in the same situation, with respect to damages, as if the contract had been performed.[99] The object is to place Ms Daou in the position which she would have been occupied had Mr Hopkins performed the obligation breached.
[99]Robinson v Harman (1848) 1 Ex 850 at 855 per Parke B, as approved in Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64 and Clark v Macourt (2013) 253 CLR 1.
292I find that Ms Daou is entitled to:
(a) Shortfall on the re-sale of Property in the sum of $120,000.00;
(b) Costs of re-advertising in the sum of $5,073.00;
(c) Real estate agent’s commission in the sum of $48,800.00;
(d) Costs of conveyancing in the sum of $3,174.20; and
(e) Costs associated with maintaining, preserving, and operating the property between 4 August 2022 and 29 November 2022 in the sum of $5,974.60.
293The amounts allowed in respect of the costs of maintaining, preserving, and operating the Property between 4 August 2022 and 29 November 2022, are identified in Annexure B attached to these reasons and are loss resulting from the breach.
294In respect of the claimed interest on borrowings between 4 August 2022 and 29 November 2022, Mr Morrison submitted that although Ms Daou is entitled to penalty interest on the delayed receipt of the balance of the purchase price under the Contract, she is not claiming that interest. She has capped her claim at $92,492.93, which Mr Morrison submitted is actual loss suffered by way of interest accrued on borrowings across various bank accounts between 4 August 2022 and 29 November 2022 to which the settlement funds would have been applied.
295Mr Hopkins does not dispute that Ms Daou is entitled to $42,468.23 being interest incurred by her after 4 August 2022. Mr Twidale submitted, however, that $0 should be allowed for accounts not held in the name of Ms Daou or in the name of J Build Developments Pty Ltd, where interest accrued was not limited to the Property and Ms Daou was unable to say how it might be related to the Property.
296Further submissions are required before this issue can be determined
Issue 29: Is Daou entitled to the Funds in Court?
297Yes.
Conclusion and orders
298There be judgment for the Defendants.
299There be judgment for the Plaintiff by counterclaim, on the counterclaim.
300The sum of damages to be awarded is to be determined after further submissions.
301Subject to any matters that the parties bring to my attention on the question of costs, I propose to order that the Plaintiff pay the Defendants’ costs of the proceeding on the standard basis, in default of agreement.
302I invite the parties to provide updated interest calculations up to the date of this judgment and brief submissions as to the appropriate basis for the calculations.
303I will invite the parties to prepare draft orders to give effect to these reasons after resolution of the outstanding issues.
- - -
Certificate
I certify that these [303] paragraphs are a true copy of the judgment of her Honour Judge Brimer delivered on 11 July 2025.
Dated: 11 July 2025
Sue Ye
Associate to her Honour Judge Brimer
ANNEXURE A – STATEMENT OF ISSUES
IN THE COUNTY COURT OF VICTORIA
AT MELBOURNE
COMMERCIAL DIVISION
GENERAL LIST
No. CI-22-02886
BETWEEN:
| SASHA HOPKINS | Plaintiff |
| v | |
| DANIELLE DAOU | First Defendant |
| FREDMAN PROPERTY GROUP PTY LTD (ACN 632 165 970) | Second Defendant |
| JOEL TIMOTHY LLOYD FREDMAN | Third Defendant |
SECOND FURTHER UPDATED STATEMENT OF ISSUES
Defined terms
1D2FAD means Daou’s defence to the 2FASOC
2&3DFAD means the Agent Parties’ defence to the 2FASOC
ACL means the Australian Consumer Law
Agent Parties means the second and third defendants
Contract of Sale means the contract of sale dated 31 March 2022 pleaded in the 2FASOC at [5]
Daou means the first defendant
Deposit means the $250,000 deposit paid by Hopkins under the Contract of Sale
2FASOC means Hopkins’ Second Further Amended Statement of Claim
Funds in Court means the sum of $276,438.36 paid into Court in proceeding CI-22-04064
Hopkins means the plaintiff
Property means the land at 16 Fifth St, Black Rock
Reply to 2&3DFAD means the Plaintiff’s Amended Reply to the Agent Parties’ defence to the 2FASOC
Representations means the representations pleaded in the 2FASOC at [8]
A.The Representations
Did the Agent Parties make the Representations?[100]
[100] 2FASOC at [8]; 1D2FAD at [8]; 2&3DFAD at [8], [8(c)], [17(c)].
Did the Agent Parties make the Representations under or within the scope of their actual or apparent authority from Daou as principal?[101]
[101] 2FASOC at [9], [17]; 1D2FAD at [9], [17]; 2&3DFAD at [10], [17].
B.Misrepresentation at common law (claim against Daou only)
B.1Innocent misrepresentation
If the answers to questions 1 and 2 are yes, were the Representations false and untrue?[102]
[102] 2FASOC at [8], [10]; 1D2FAD at [8], [10]; 2&3DFAD at [8], [10].
Did Hopkins rely on the Representations by entering into the Contract of Sale?[103]
[103] 2FASOC at [8], [10], [13], [14]; 1D2FAD at [8], [10], [13], [14]; 2&3DFAD at [8], [10], [13], [14].
Did Hopkins affirm the Contract of Sale?[104] If so, when?
[104] 1D2FAD at [14].
Did Hopkins rescind the Contract of Sale for innocent misrepresentation in equity? If so, when? What are the consequences?
B.2Negligent misstatement
At the time the Representations were made, did Daou owe prospective purchasers of the Property, including Hopkins, a duty of care to avoid reasonably foreseeable harm?[105] If so, what was the scope of that duty?
[105] 2FASOC at [9A], [12]; 1D2FAD at [9A], [12]; 2&3DFAD at [12].
If the answers to questions 1 and 2 are yes, did Daou make the Representations by authorising the making of the Representations negligently so as to breach the duty of care?[106]
[106] 2FASOC at [11]; 1D2FAD at [11].
Did Hopkins rely on the Representations by entering into the Contract of Sale?[107]
[107] 2FASOC at [8], [10], [13], [14]; 1D2FAD at [8], [10], [13], [14]; 2&3DFAD at [8], [10], [13], [14].
What loss caused by the breach, has Hopkins suffered?[108]
[108] 2FASOC at [16]; 1D2FAD at [16]; 2&3DFAD at [16].
C.Claims under the ACL
C.1Liability of Agent Parties
Misleading and deceptive conduct
If the answer to question 1 is yes, did the Agent Parties make the Representations in trade or commerce?[109]
[109] 2FASOC at [17]; 1D2FAD at [17]; 2&3DFAD at [17].
Were the Representations misleading or deceptive, or likely to mislead or deceive?[110]
[110] 2FASOC at [20]; 1D2FAD at [20]; 2&3DFAD at [20]. See also question 3 above.
Did either of the Agent Parties contravene s 18(1) of the ACL?[111]
[111] 2FASOC at [21]; 1D2FAD at [21]; 2&3DFAD at [21], [22].
False or misleading representations about sale etc. of land
Were the Representations false or misleading in contravention of ss 30(1)(e) or 30(1)(g) of the ACL?[112]
[112] 2FASOC at [21]; 1D2FAD at [21]; 2&3DFAD at [21], [22].
C.2Liability of Daou (principal liability)
If the answers to questions 1 and 2 are yes, did Daou make the Representations by authorising the making of the Representations, in trade or commerce?[113]
[113] 2FASOC at [17]; 1D2FAD at [17]; 2&3DFAD at [17].
Were the Representations misleading or deceptive, or likely to mislead or deceive?[114]
[114] 2FASOC at [20]; 1D2FAD at [20]; 2&3DFAD at [20]. See also question 3 above.
Did Daou contravene s 18(1) of the ACL?[115]
[115] 2FASOC at [22]; 1D2FAD at [22]; 2&3DFAD at [22].
C.3Liability of Daou (accessorial liability)
If the Agent Parties contravened s 18(1) of the ACL, was Daou a person involved in the Agent Parties’ contravention?[116]
[116] 2FASOC at [22A]; 1D2FAD at [22A].
C.4 Remedies
Did Hopkins rely on the Representations by entering into the Contract of Sale?[117]
[117] 2FASOC at [19]; 1D2FAD at [19]; 2&3DFAD at [19]. See also question 4 above.
Has Hopkins suffered loss within the meaning of s 236(1) of the ACL by reason of any contravention of the ACL?[118]
[118] 2FASOC at [16], [23]; 1D2FAD at [16], [23]; 2&3DFAD at [16], [23].
Is the Contract of Sale void pursuant to ss 237(1) and 243 of the ACL?[119]
[119] 2FASOC at [24]; 1D2FAD at [24]; 2&3DFAD at [24], [24A], [24B].
D.Mistake
Is Hopkins entitled to restitution on the grounds alleged in the 2FASOC at [28]-[31]?[120]
[120] 2FASOC at [28]-[31]; 1D2FAD at [28]-[31]; 2&3DFAD at [28]-[31].
E.Relief against forfeiture
Is Hopkins entitled to relief against forfeiture of the Deposit on the grounds alleged in the 2FASOC at [32]?[121]
[121] 2FASOC at [32]; 1D2FAD at [32]; 2&3DFAD at [32].
F.Equitable lien
Is Hopkins entitled to an equitable lien over the Funds in Court on the grounds alleged in the 2FASOC at [33]-[46], and, if so, is he entitled to the Funds in Court?[122]
[122] 2FASOC at [33]-[46]; 1D2FAD at [33]-[46].
G.Proportionate liability
Should there be an apportionment pursuant to s 24AH of the Wrongs Act 1958 (Vic) or s 87CB of the Competition and Consumer Act 2010 (Cth)?[123]
[123] 1D2FAD at [47]-[52]; 2&3DFAD at [47]-[50].
H.Contribution
If Hopkins is entitled to recover any sum, are the defendants entitled to contribution vis-à-vis each other?
Daou’s counterclaim
Is Daou entitled to the Deposit?
Is Daou entitled to damages for breach of the Contract of Sale? If so, how much?
Is Daou entitled to the Funds in Court?
Dated:14 November 2024
ANNEXURE B – DAMAGES TABLE
HOPKINS v DAOU & ORS – County Court Proceeding No. CI-22-02886
| Vendor’s claim | Purchaser’s allowance and response | Vendor reply | Court allowance | |||
| Shortfall on re-sale of Property | $120,000 | Allow $120,000 | $120,000.00 | |||
| Costs of re-adverting | $5,073 | Allow $5,073 | $5,073.00 | |||
| Real Estate commission | $48,800 | Allow $48,800 | $48,800.00 | |||
| Cost of conveyancing | $6,348.40 | Allow $3,174.20. Court has no evidence as to how much of the correspondence concerned the resale of the property and how much concerned the other properties (eg, Hampton Street) or the removal of caveat proceeding. The latter is importantly particularly given the Court made costs orders in favour of the purchaser.[124] Allow 50% of discounted amount, being $3,174.20, | Conceded | $3,174.20 | ||
| Interest on borrowings between 4 August 2022 and 29 November 2022: | $92,492.93 | Allow $42,468.23, being interest incurred by the vendor after 4 August 2022. See Annexure, attached. $0 should be permitted for accounts not held in the name of the vendor. Jamie Daou’s evidence[125] about the balance of the accounts that was in his and/or J Build Developments Pty Ltd name was that the interest accrued was not limited to the Property and that it extended to other jobs. He was not able to say how much of it was confined to the Property and the Court should not be required to guess. | Daou is entitled to penalty interest on the delayed receipt of the balance of the purchase price: Palasty v Parlby [2007] NSWCA 345; 13 BPR 25,311 at [29]-[62]. 4 August 2022 to 29 November 2022, being 118 days, at 10% per annum, on principal of $4.75m = $153,561.41. Nevertheless, her particulars of loss cap her claim at $92,492.93. That amount should be allowed as inherently reasonable. The law is not concerned with whether the interest was accrued in an account in her name or whether the holding costs were incurred by another on her behalf: Jones v Stroud District Council [1988] 1 All ER 5 at 14. | To be determined following submissions. | ||
| Costs associated with maintaining, preserving, and operating the Property between 4 August 2022 and 29 November 2022: | $0.00 | |||||
| Sub-item | $0.00 | |||||
| Insurance (Youi) | CB 1864[126] | $1,284.36 | Allow $191.09. Insurance period is 15/11/2022 to 15/11/2023 at a cost $4,650. Cost per day is $12.73, so allow 15 days of insurance (ie, to settlement date), which equates to $191.09. $1,284.36 reflects more than 15 days of insurance. | Conceded | $191.09 | |
| Council Rates (Bayside City Council) | FSCB 221 | $1,260.75 | $0. Vendor admitted she would have incurred this expense irrespective of whether purchaser settled on time.[127] | Conceded | $0.00 | |
| South East Water | CB 1826 | $655.10 | $0. Invoice is for a period of May to August 2022. Vendor admitted she could not identify what parts were incurred prior to 4 August 2022.[128] | Allow $71.64. The average daily cost on water bill is $5.97 and the issue date is 16 August 2022. 12 days between 4 and 16 August 2022 at $5.97 (average daily rate in the invoice ) = $71.64 | $71.64 | |
| South East Water | CB 1866 | $429.50 | Allow $429.50 | $429.50 | ||
| Simply Energy (Electricity) | CB 1863 | $240.35 | Allow $240.35 | $240.35 | ||
| Simply Energy (Electricity) | CB 1888- 1890[129] | $96.57 | Allow $96.57 | $96.57 | ||
| Simply Energy (Electricity) | CB 1872[130] | $101.63 | Allow $101.63 | $101.63 | ||
| Simply Energy (Electricity) | CB 1852[131] | $240.90 | Allow $240.90 | $240.90 | ||
| Simply Energy (Gas) | CB 1897[132] | $50.52 | $0 Unknown billing period. CB 1836 covers 12 July 2022 to 12 September 2022. CB 1863 covers 13 September 2022 to 11 November 2022 | Settlement under the subsequent contract took place on 29 November 2022. The invoice referred to is noted as the final invoice for account 19691861 for the period 12 November to when the account was closed. This is evident in the a clearer version of the invoice at CB 1899. | $0.00 | |
| Simply Energy (Gas) | CB 1898[133] | $557.51 | $0 Unknown billing period. CB 1836 covers 12 July 2022 to 12 September 2022. CB 1863 covers 13 September 2022 to 11 November 2022 | This is an electricity bill rather than a gas bill for account 29796392. The invoice at CB 1852 is said to be for the period 10 September to 9 October 2022. This invoice is for the period commencing 10 October 2022 until the account was closed after settlement on 29 November 2022. | $557.51 | |
| Simply Energy (Gas) | CB 1863 | $309.09 | Allow $309.09. This covers 13 September 2022 to 11 November 2022. | $309.09 | ||
| Simply Energy (Gas) | CB 1836 | $320.35 | Allow $277. This invoice covers 12 July 2022 to 12 September 2022. Vendor has not confined usage to that after 20 July 2022. When invoice is divided by 60 days, usage equates to $5.34 per day, so subtract $42.71 (8 days usage) from $320.35. | Allow $283.02. Average daily cost on invoice is $6.91. Settlement was to occur on 20 July 2024 – actual charged is $5.34. 20 July to 12 September 2022 is 53 days @ $5.34 = $283,02. | $283.02 | |
| Internet (for CCTV and Security System) | CB 1867[134] | $440.00 | Allow $235.22, which is amount of the Telstra invoice. | The invoice is only illustrative of monthly plan charges at $110,00 per month. Account would have been closed end of July but for failed settlement which meant that the first defendant had to pay for an extra 4 more before closing the account after settlement of the subsequent contract at the end of November 2022 (August, September, October and November) $110.00 * 4 = $440.00. | $235.22 | |
| Pool Maintenance (Dennis Pool Solutions) | CB 1860[135] | $312.40 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | No basis for the submission. The particulars of the invoice clearly show or state that it was maintenance of pool for the month of October 2022 whereas settlement under the subsequent contract was to only occur at the end of November 2022. No maintenance for November 2022 has not been claimed (despite it being incurred). Had the plaintiff settled on 20 July 2022, the first defendant would not have incurred these costs. | $312.40 | |
| Pool Fencing Inspection (Melbourne Pool Fence Safety Inspections) | CB 1870[136] | $330.00 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | No basis to contend that this is a capital expenditure. The Trueline Report recommended a pool inspection, the costs of which has not been claimed. A further inspection had to be undertaken in respect of the subsequent contract which is a cost incurred by reason of the plaintiff’s failure to settle. There are further costs associated with the resale of the property. | $330.00 | |
| S&B Stainless Pty Ltd | CB 1866[137] | $628.10 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser | These costs would not have been incurred or necessary had settlement occurred under the contract with the plaintiff occurred and there is no evidence that these costs were reimbursed by the subsequent purchaser. These therefore constitute costs incurred by the first defendant in the resale of the property. | $0.00 | |
| Locksmith | N/A | $429.00 | $0. No evidence as to why lock smith required, and why this expense was caused by purchaser’s failure to settle on time. Further, this is a capital expenditure which was reimbursed by subsequent purchaser. | These costs would not have been incurred or necessary had settlement occurred under the contract with the plaintiff occurred and there is no evidence that these costs were reimbursed by the subsequent purchaser. These therefore constitute costs incurred by the first defendant in the resale of the property. | $0.00 | |
| G&SC Pty Ltd | CB 1871 | $478.50 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | These are further costs associated with the resale of the property | $0.00 | |
| Spot On Bins | CB 1436 | $450.00 | $0. No evidence as to why skip bins required, and why this expense was caused by purchaser’s failure to settle on time. This is demonstrated from date of invoice being 26 April 2022. The need for a skip bin could not have been caused by any act or alleged breach by the purchaser. If it was used to discard of the vendor’s unwanted property, that is a cost caused solely by the vendor. | The first defendant had to hire or rent a skip bin in order to dispose of building debris and waste associated the works undertaken by her or on her behalf to rectify the defects in the Trueline Report (both minor and major) as required by the plaintiff. | $0.00 | |
| Spot On Bins | FSCB 218 | $1,560.00 | $0. No evidence as to why skip bins required, and why this expense was caused by purchaser’s failure to settle on time. This is demonstrated from date of invoice being 13 July 2022. The need for a skip bin could not have been caused by any act or alleged breach by the purchaser. If it was used to discard of the vendor’s unwanted property, that is a cost caused solely by the vendor. | The first defendant had to hire or rent a skip bin in order to dispose of building debris and waste associated the works undertaken by her or on her behalf to rectify the defects in the Trueline Report (both minor and major) as required by the plaintiff. | $0.00 | |
| Leak Detector[138] | CB 1627[139] | $350.00 | $0. This capital expenditure was incurred on 8 June 2022 and would have been incurred by vendor irrespective of whether purchaser settled by 20 July 2022. | Conceded | $0.00 | |
| AAA Concord Painting & Decorating Pty Ltd | CB 1702[140] | $1,650.00 | $0. This capital expenditure was incurred on 5 July 2022 and would have been incurred by vendor irrespective of whether purchaser settled by 20 July 2022. | This was to prepare the house for settlement and to address the items in the Trueline Report as required by Hopkins (Defect 3.01 – cracking). | $0.00 | |
| Hi-Shine Windows | CB 1896[141] | $550.00 | $0. This capital expenditure was incurred on 16 December 2021, and prior to the Agreement. It would have been incurred by vendor irrespective of whether purchaser settled by 20 July 2022. | Conceded | $0.00 | |
| Hi-Shine Windows | CB 1731[142] | $715.00 | $0. This capital expenditure was incurred on 17 July 2022. It would have been incurred by vendor irrespective of whether purchaser settled by 20 July 2022. | This was to prepare the house for settlement on 20 July 2022. | $0.00 | |
| Tristan Irvine Gardening | CB 1835[143] | $60.00 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | This is for mowing of the lawn on 22 August 2022 after the plaintiff failed to settle on 20 July 2022 and before the subsequent contract was entered into. It is therefore a maintenance cost that would not have otherwise been incurred. | $60.00 | |
| Tristan Irvine Gardening | CB 1732[144] | $340.00 | $0. This capital expenditure was incurred on 18 July 2022. It would have been incurred by vendor irrespective of whether purchaser settled by 20 July 2022. | Allow $150.00 The first defendant submits that the second charge on 16 July 2022 was incurred to prepare the house for settlement and is therefore claimable. | $0.00 | |
| Tristan Irvine Gardening | CB 1868[145] | $230.00 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | These are costs associated with the maintenance and resale of the property. | $230.00 | |
| Jim’s Cleaning | N/A | $600.00 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | These are costs associated with the maintenance of the property after 20 July 2022. | $0.00 | |
| Easy Peasy Removals | CB 1811 | $2,285.68 | $0. Vendor would have incurred removalist costs irrespective of whether purchaser settled on time. | The submission by the plaintiff is Incorrect. This invoice is for the first defendant having to move her furniture and items in storage back to the property following the plaintiff’s failure to settle on 20 July 2022. | $2,285.68 | |
| Moves | CB 1729 | $2,100.00 | $0. Invoice is for $1050, not $2,100. Vendor would have incurred removalist costs irrespective of whether purchaser settled on time | Costs associated with her removal from the property to allow for vacant possession on settlement. Costs wasted and form damage as they were incurred unnecessarily. | $0.00 | |
| Fortknox Storage | CB 1728 | $886.00 | $0. Vendor made choice to store goods in storage. Not related to failure to settle on time. This is demonstrated by the fact that rental includes period prior to 20 July 2022. | Costs associated with her removal from the property to allow for vacant possession on settlement. Costs wasted and form damage as they were incurred unnecessarily. | $0.00 | |
| Jim’s Cleaning | N/A | $200.00 | $0. This is a capital expenditure which was reimbursed by subsequent purchaser. | These are costs associated with the maintenance of the property. | $0.00 | |
[124] Order 5, 19 October 2022.
[125] T389-390.
[126] Vendor’s schedule refers to CB 1865.
[127] T 380.
[128] T 380.
[129] Vendor’s schedule refers to CB 1889.
[130] Vendor’s schedule refers to CB 1873.
[131] Vendor’s schedule refers to CB 1853.
[132] Vendor’s schedule refers to CB 1898.
[133] Vendor’s schedule refers to CB 1899.
[134] Vendor’s schedule refers to CB 1868.
[135] Vendor’s schedule refers to CB 1861.
[136] Vendor’s schedule refers to CB 1810.
[137] Vendor’s schedule refers to CB 1867.
[138] Contrast this with CB 1859, in which vendor originally sought to recover $600 for an invoice concerning 4a Hilton Street, Beaumaris.
[139] Vendor’s schedule refers to CB 1628.
[140] Vendor’s schedule refers to CB 1703.
[141] Vendor’s schedule refers to CB 1987.
[142] Vendor’s schedule refers to CB 1732.
[143] Vendor’s schedule refers to CB 1836.
[144] Vendor’s schedule refers to CB 1733.
[145] Vendor’s schedule refers to CB 1869.