Hopkins v Daou & Ors [2025] VCC 964

[2025] VCC 964

County Court of Victoria|2025-07-11

View original source

General information, not legal advice.

At a glance

Source facts

Court

County Court of Victoria

Decision date

2025-07-11

Source

Original judgment source is linked above.

Judgment (644 paragraphs)

[1]

For the reasons set out below, I find for the Defendants.
In 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.
Whilst 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.
Had 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.
I 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.
I find for the plaintiff by counterclaim. I am satisfied Ms Daou validly terminated the Contract.

[70]

Deposit amount and structure
- This 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
- I 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
- Regarding 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
- As 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
- I understand timing of settlement is challenging without me having sold my home and knowing the settlement date on that
- 7 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
- I 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
- Given 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

[161]

Had 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.
Had 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.
Mr 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.
The 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.
Having 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:

[187]

(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.

[194]

I consider Ms Daou endeavoured to do her best to recollect accurately despite some apparent inaccuracies and lengthy answers. These events occurred some time ago and during the Daous' separation and divorce. Ms Daou's and Mr Daou's evidence was that Ms Daou was scared he was going to do something with J Build, and that she was worried about their assets, about maintenance and about the children, which is why she wanted to become a director of J Build.
I am not persuaded that the discrepancy between the way Ms Daou's case was opened and her evidence that she did not discuss the 3 August 2021 text message with Mr Fredman until after the Daous were alerted to the issue raised by Mr Hopkins, adversely impacts Ms Daou's credibility. Her evidence is supported by the absence of any reference to the internal measurement of the home on the floor plans sent to her by Mr Fredman and approved by her. The absence of any reference to 76 squares in the advertising copy sent to Ms Daou for approval, supports the likelihood that the internal size of the dwelling was not discussed until after the issue was raised by Mr Hopkins, as there would have been no cause to.
I am not persuaded that Ms Daou's evidence that "in [her] naivety [she] thought that being a shareholder was also being a director" was disingenuous. When pressed during cross-examination about her "naivety" in the context of her having been a director, shareholder, or secretary of other companies, Ms Daou stated that Mr Daou "did everything back in the day" and "looked after [their] affairs". Ms Daou's evidence that she "didn't really know the aspects of setting up trusts and companies and what that entailed" and she "actually [didn't] know how that all worked" is underscored by her answer that "I've been a director of a trust" when asked if she had ever been a director, shareholder, or secretary of other companies.
I do not consider that the absence of a reference in Mr Daou's file note of 12 May 2022 to Ms Daou not having approved the notation, is "fatal" to Ms Daou's defence, nor do I consider that it supports the contention that Ms Daou knew that the notation had been included in the online advertisement, contrary to her evidence:

[289]

(a) Between 31 May and 7 June 2022, the Federal Court of Australia made the Asset Preservation Order on application by ASIC against Mr Hopkins and his corporate entities. The Asset Preservation Order amongst other things, restrained Mr Hopkins from:

(i) selling, charging, mortgaging, or otherwise dealing with, disposing of and/or diminishing the value of all or any of his property (or causing or permitting such);

(ii) incurring liabilities including liabilities incurred either directly or indirectly, through the use of a credit card, a credit facility, a drawdown facility or a re-draw facility; and

(iii) withdrawing, transferring or otherwise disposing of any monies available in any account with any bank, building society, cryptocurrency exchange or other financial institution, in which he or his entities had a legal or equitable interest (other than for certain permitted expenses).

(b) Mr Hopkins undertook to the Federal Court of Australia that he would not procure, solicit or receive, by himself, his servants, agents, employees or any company of which he was an officer or member, any funds for the purpose of or in connection with any business operated by the defendants (which included Mr Hopkins) or any company associated with the defendants, including for the purpose of property development.

(c) I accept Mr Morrison's submission that Mr Hopkins could not sensibly contend that the properties which were sold in the lead up to settlement were not his, so that the proceeds of their sale were not caught by the Asset Preservation Order, while simultaneously saying that he had full power without consulting anyone, without any restriction under trust deeds to use the proceeds of those sales entirely for his own purpose, to buy his own property.

(d) As at 1 June 2022, Mr Hopkins was still seeking finance from Wingspan Capital for the purchase of the Property.

(e) Although Mr Hopkins had nominated Happiness Lives Here Pty Ltd (a company of which his mother was the sole director, secretary and shareholder) as the purchaser, Mr Hopkins understood that ASIC was initiating proceedings against him and some of his corporate entities, that it was a matter to be taken very seriously and had the potential seriously to disrupt one of his businesses. Mr Hopkins maintained, however that that business was not his only business, and that he had other assets.

(f) At the very least, these events must have given Mr Hopkins cause to be concerned about his decision to purchase the Property for $5 million. On Mr Hopkins' own account, at the time, it was "a whirlwind", which took place in the following context:

(i) Mr Hopkins felt the market had taken a turn for the worst before he sold the Beaumaris home;

(ii) On 23 June 2022, Mr Hopkins sold his Beaumaris home for $175,000 less than he had paid for it;

(iii) He considered he had sold his Beaumaris home at $500,000 undervalue because he needed the funds to settle on the purchase of the Property.

[389]

Mr Morrison contended that Ms Daou did not make the Representations by authorising the making of the representations in trade or commerce. It is an accepted proposition that private sales of land are not typically acts in trade or commerce, in absence of other special features.[79]
Neither the sale of the Property nor its build were in trade or commerce. Ms Daou and Mr Daou purchased the Property with the intention of renovating it for it to be their family home, and would otherwise have continued to live there had they not divorced. The renovation work was done by J Build, but from Ms Daou's perspective, it was not done as a business endeavour as it was the family home. Ms Daou's professional life "was confined mainly to home duties", though she provided some assistance to Mr Daou's business. Any business character with Mr Daou's business does not cause the sale to be one in trade or commerce.
Mr Morrison referred to the decisions of Hera Project Pty Ltd v Bisognin [No 3],[80] Ebadeh-Ahvazi v Namrood,[81] and Williams v Pisano,[82] in which the sales of those residential properties had some aspects of "commercial flavour", but the Court ultimately held that the relevant conduct was not in the course of trade or commerce. The present facts are similar to those of Williams and Ebadeh-Ahyazi. In Ebadeh-Ahyazi, there were a lot stronger facts in support of a commercial flavour to the transaction than there are in the present case. Comparing the present facts to those in Williams, there is "an even more tenuous link" and there are insufficient facts to impose a commercial flavour on any representations that were made.
Mr Morrison contended that any argument that an agent's "commercial flavour" flows up the chain to the vendor vicariously such that the vendor could be held liable for the agent's misleading and deceptive conduct as a principal, would be incorrect. The vendor must be in trade or commerce independently; they do not "inherit their agent's commercial flavour."

[399]

(a) The fact that the Property was advertised and promoted (via the Agent Parties) prior to its sale, does not, of itself, mean that conduct engaged in in connection with the sale of the Property, is conduct in trade or commerce.[88] In any event, there is nothing inherently commercial about Ms Daou, as the owner of the Property, engaging in conduct to advertise and promote the sale of her residential home.

(b) The fact of Ms Daou retaining the Agent Parties in connection with the sale of the Property, does not, of itself, make the conduct of Ms Daou in trade or commerce, simply because the making of the Representations by the Agent Parties' was conduct in trade or commerce.[89] Regardless of the engagement by Ms Daou of the Agent Parties, the sale of the Property remains the sale of her own home and not done in a business context. The business of the Agent Parties and the business character of the Agent Parties' conduct is not imputed to Ms Daou.

(c) There is nothing inherently commercial about an owner of a residential home obtaining building permits and planning permits for the purposes of undertaking renovation works at their home.

(d) Although it was accepted that J Build was listed on the building permit, the renovation works were not undertaken as part of J Build's business:[90]

(i) While J Build facilitated the renovation works at the Property, Mr Daou "did a lot of personal work [himself] on weekends";

(ii) I accept Mr Morrison's submission that the renovation works were not conducted in accordance with J Build's usual business model. Mr Daou gave evidence that J Build "designed and built bespoke one-off homes" and his business model was to "build for a customer" rather than to build and sell spec homes;

(iii) There was a building contract, but the purpose of that was for the Daous to be able to obtain homeowner's warranty insurance and a building permit;

(iv) There was no construction finance by J Build, rather the renovation works were funded by Mr Daou and Ms Daou personally. Although there was a business overdraft account in the name of J Build, this account "was primarily for [the Property] but [they] did use it for maybe some other jobs but primarily that overdraft account was taken about because [they]... needed some funds to assist with the build." In any event, at the time of the sale of the Property, there was an outstanding loan on the Property in the name of Mr Daou and Ms Daou.

(e) To the extent that Ms Daou was involved with J Build, she did not have an active role in the business:

(i) Ms Daou was not registered for GST between 2016 to 2018, nor was there any evidence to suggest that she was ever an employee of J Build;

(ii) I accept Ms Daou's evidence that her involvement in the business was "random" and "not a full-time position"; she would "help behind the scenes" in terms of sourcing products and materials or would sometimes help clients with interior styling on a job-to-job basis;

(iii) Ms Daou's limited involvement in J Build is underscored by her evidence about her limited knowledge on "the ins and outs of the business". Her "helping out with finishes and fixtures" can be contrasted with the more commercial, business-oriented role of Mr Daou, whose domain involved, amongst other things, build costs.

(f) Ms Daou's appointment as a director and secretary of J Build does not support a conclusion that she was actively involved in J Build's business:

(i) Her appointment occurred after the purchase of the Property, after the period of renovation works, and in the context of her separation from Mr Daou. I accept Mr Daou's evidence that Ms Daou was appointed a director after numerous requests by her, because "[s]he was very fearful" and worried about assets, maintenance and the children. In that context, Ms Daou was concerned about her welfare and financial situation, and how to support her children when on her own.

(ii) It was not alleged nor was any evidence given that Ms Daou had a greater involvement or took on increased responsibilities with J Build, following her appointment as its director and secretary;

(g) The pleaded allegation that Ms Daou purchased the Property with a view to undertaking the project for gain and profit was contrary to the evidence.

Hopkins v Daou & Ors [2025] VCC 964

At a glance

Court

Decision date

Source

Judgment (644 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (22)