Ioppolo v Cumace - [2021] WADC 86

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION:   PERTH
CITATION:   IOPPOLO -v- CUMACE [2021] WADC 86
CORAM:   LONSDALE DCJ
HEARD:   2 AUGUST 2021
DELIVERED          :   9 SEPTEMBER 2021
FILE NO/S:   CIV 4574 of 2020
BETWEEN:   LEO ANTONINO IOPPOLO
Plaintiff
AND
ANTONIO STEFANO CUMACE
Defendant

FILE NO/S: CIV 4578 of 2020
BETWEEN: PIERO CAMPEOTTO as Trustee for THE CAMPEOTTO FAMILY TRUST
First Plaintiff
LEO ANTONINO IOPPOLO as Trustee for THE ANNIMATT FAMILY TRUST
Second Plaintiff
ANTHONY PAOLINO
Third Plaintiff
LINA PAOLINO
Fourth Plaintiff
AND
ANTONIO STEFANO CUMACE
Defendant

Catchwords:

Practice and procedure - Appeal against registrar's decision to enter default judgment - Delay

Legislation:

Nil

Result:

Appeal dismissed

Representation:

CIV 4574 of 2020

Counsel:

Plaintiff	:	Mr B G Grubb
Defendant	:	Mr J C Yeldon

Solicitors:

Plaintiff	:	Tudori Hager Grubb Lawyers
Defendant	:	Westmont Legal

CIV 4578 of 2020

Counsel:

First Plaintiff	:	Mr B G Grubb
Second Plaintiff	:	Mr B G Grubb
Third Plaintiff	:	Mr B G Grubb
Fourth Plaintiff	:	Mr B G Grubb
Defendant	:	Mr J C Yeldon

Solicitors:

First Plaintiff	:	Tudori Hager Grubb Lawyers
Second Plaintiff	:	Tudori Hager Grubb Lawyers
Third Plaintiff	:	Tudori Hager Grubb Lawyers
Fourth Plaintiff	:	Tudori Hager Grubb Lawyers
Defendant	:	Westmont Legal

Case(s) referred to in decision(s):

Hall v Hall [2007] WASC 198
Markopolous v Marco [2020] WASC 79
Mavaddat v HSBC Bank Australia Ltd (No 2) [2016] WASCA 94
National Australia Bank Ltd v Singh [1995] 1 Qd R 377
Parker v Transfield Pty Ltd [2000] WASCA 382

LONSDALE DCJ:

On 14 December 2020 the plaintiffs, who had invested - and lost - money with Mr Cumace, filed writs and statements of claim claiming the loss of their investment plus interest. The plaintiffs plead that Mr Cumace caused the losses by breaching the terms of investment agreements to which he and the plaintiffs were parties.[1]
[1] The respondents in this appeal are the plaintiffs in CIV 4574 and 4578 of 2020. The plaintiff in CIV 4574 of 2020 is Leo Antonino Ioppolo. The first, second, third and fourth plaintiffs on CIV 4578 of 2020 are Piero Campeotto as Trustee for The Campeotto Family Trust, Leo Antonino Ioppolo as Trustee for The Annimatt Family Trust, Anthony Paolino and Lina Paolino.
Mr Cumace failed to lodge appearances to the writs in time and the plaintiffs obtained default judgment. Mr Cumace then filed an application to have default judgment set aside.
On 23 April 2021 Deputy Registrar Hewitt dismissed Mr Cumace's application. Mr Cumace has appealed that decision.

Principles for the setting aside of default judgment

The court has an unfettered discretion to set aside default judgment but the party seeking to set aside default judgment must show a credible argument that, if default judgment is set aside, he would have a real prospect of success: see Parker v Transfield Pty Ltd [2000] WASCA 382 [3] - [4] and Hall v Hall [2007] WASC 198 [61] - [67].
The fact that the party…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ioppolo v Cumace

Details

AGLC: Ioppolo v Cumace [2021] WADC 86
Case: [2021] WADC 86
Decision Date: 9 SEPTEMBER 2021

CaseChat Overview and Summary

In the case of Ioppolo v Cumace, the plaintiffs sought to enforce a judgment against the defendant, Mr Cumace, in the Federal Circuit Court. The dispute centred around an investment agreement and whether Mr Cumace was bound by it. The court had to determine the validity and effect of a 'Declaration of Trust' document dated 1 September 2018, which outlined an investment agreement between Mr Marco and Mr Cumace. The plaintiffs argued that Mr Cumace was a party to the investment agreement, while Mr Cumace claimed he was merely a volunteer or conduit without any obligation to repay the plaintiffs.

The central legal issue was whether Mr Cumace was bound by the terms of the 'Declaration of Trust' document. The plaintiffs contended that Mr Cumace was a party to the agreement, while Mr Cumace argued that he was not bound by it and that he was a mere volunteer. The court examined the contents of the 'Declaration of Trust' document, which stated that Mr Cumace was to hold the investment for the benefit of Mr Marco. The plaintiffs also presented evidence that Mr Cumace had previously acknowledged his indebtedness to another party in a similar agreement.

The court concluded that the 'Declaration of Trust' document, despite being unsigned, contained the terms of an investment agreement between Mr Marco and Mr Cumace. The court found that the document clearly established a debtor-creditor relationship between Mr Cumace and Mr Marco, and that Mr Cumace had an obligation to repay the investment. The court rejected Mr Cumace's argument that he was a mere volunteer or conduit, finding that the terms of the 'Declaration of Trust' document and the context in which it was signed established a binding agreement.

In light of the court's findings, the appeal against the registrar's decision to enter default judgment was dismissed. The court ordered that the judgment in favour of the plaintiffs be enforced against Mr Cumace.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In addition to the affidavit evidence filed in advance of the hearing of the appeal, the plaintiffs produced a document disclosed by the solicitors for Mr Cumace on the morning of the appeal. The disclosed document is entitled 'Declaration of Trust' and is dated 1 September 2018. The document names Mr Cumace as 'investor' and Mr Marco as 'principal'. The document is unsigned. However, there is no dispute that this document contained the terms of an investment agreement between Mr Marco and Mr Cumace. The terms of the document appear below:DECLARATION OF TRUSTI, CHRIS MARCO (Principal) of [REDACTED], Western Australia HEREBY DECLARE that I hold the investment specified in item 1 of the Schedule in trust for the party specified in item 2 of the Schedule in the proportions set out against their name in item 2 of the Schedule AND DECLARE that the beneficiary is entitled to their proportion of the capital and interest or income therefrom as single investment holder.The investor has agreed to advance to the Principal the sum specified in item 1 of the Schedule upon the terms and conditions herein contained.Schedule1.Description of Investmenta)Investment Amount: AUD$4,995,000.00b)Rate of Return: 3% Monthlyc)Commencement Date: 1 September 2018d)Maturity: End of each calendar monthe)Investment Type: Monthly "Warehousing Funds"2.Name of Beneficiary and Relevant ProportionAntonio Cumace 100 per centum3.GuaranteeBy the execution of this declaration, the Principal hereby guarantees to the investor the repayment of the principal sum in the event of investment loss in accordance with the provisions of this declaration.Declaration of Trust - Cumace "Warehousing Funds" C Marco 01/09/2018 Mr Cumace contends that he was not a party to any investment agreement with the plaintiffs and submits he was a mere volunteer or conduit between the plaintiffs and Mr Marco. Counsel for Mr Cumace made two primary contentions in support of that submission. First, he submitted that the PPI document did not represent the entire agreement between Mr Cumace and the four plaintiffs; other facts showed Mr Cumace to be a volunteer or conduit. Secondly, he submitted that the PPI is ambiguous both on its face and having regard to the context in which it was signed. Counsel for Mr Cumace submitted that the evidence establishes that all parties understood the plaintiffs to have provided funds to be invested with Mr Marco and therefore the agreement did not establish any obligation by Mr Cumace to repay the plaintiffs. The PPI documents signed by the plaintiffs and the defendant are not materially different to the 'Declaration of Trust' document signed between Mr Cumace and Mr Marco on the occasions in which Mr Cumace had invested his own funds. A similar situation arose in the case of Markopolous v Marco. In that case Mr Marco (who is one and the same) acknowledged his indebtedness to Ms Markopolous for monies paid to him pursuant to a 'Declaration of Trust' document in materially similar terms to the one produced by the defendant in this case. In that case, Ms Markopolous had sought to persuade the court that the funds advanced for investment were held by Mr Marco on trust for her benefit. Mr Marco had denied the existence of a trust relationship with Ms Markopolous but did not deny that the document created a debtor‑creditor relationship.