Baxter Global Investments Pty Ltd (ACN 159 246 670) v Marco

The plaintiffs, Baxter Global Investments Pty Ltd, sought relief against the first defendant, Marco, and others for their alleged breaches of fiduciary duties in connection with investments made in a private placement program. The dispute centred on whether an express trust had been created over the principal funds invested, and if so, whether the defendants had breached their fiduciary duties by engaging in unauthorised transactions. The matter was heard in the Federal Court of Australia.

The primary legal issues the court had to resolve were whether an express trust had indeed been established over the principal funds, and if so, whether the defendants had breached their fiduciary duties. A secondary issue was the appropriate remedy to be awarded if a breach of fiduciary duty was established. The court had to consider the terms of the investment agreement, the nature of the transactions undertaken, and the defendants' conduct in light of the fiduciary obligations owed to the plaintiffs.

In delivering judgment, the court found that an express trust was indeed created over the principal funds, as evidenced by the terms of the investment agreement and the plaintiffs' intention to restrict the use of their funds to specific arbitrage transactions. The court held that the defendants had breached their fiduciary duties by engaging in unauthorised transactions that deviated from the agreed-upon investment strategy. However, the court limited the damages awarded to the agreed rate of return described in the investment agreement, as it found that this reflected the losses suffered by the plaintiffs due to the defendants' breaches.

The court ordered that the first defendant, Marco, pay the plaintiffs damages in the amount of $10,000,000, representing the agreed rate of return. The court also ordered that the first defendant pay the plaintiffs' costs of the proceeding on an indemnity basis.