JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: MARKOPOULUS -v- MARCO [2020] WASC 79
CORAM: TOTTLE J
HEARD: 19 & 27 FEBRUARY 2020
DELIVERED : 12 MARCH 2020
FILE NO/S: CIV 1431 of 2019
BETWEEN: PATRICIA MAREE MARKOPOULUS
First Plaintiff
TONPOSE PTY LTD (ACN 008 850 057) as trustee for MARKS AUTO SUPERANNUATION FUND
Second Plaintiff
ANN-MAREE LOCKETT formerly known as ANN‑MAREE WILLIAMS
Third Plaintiff
BRADLEY DAVID RUNDIN WILLIAMS
Fourth Plaintiff
AND
CHRIS MARCO
Defendant
Catchwords:
Trusts - Creation of express trust - Intention to create trust - Where intention manifest on words of written agreement - Where trustee claims subjective misunderstanding of the word 'trust' - Whether trustee's subjective understanding relevant to question of intention - Where decision in Byrnes v Kendle applies
Trusts - Creation of express trust - Intention to create trust - Investment schemes - Where beneficiaries' moneys held on same terms as other members of investment scheme - Where beneficiaries did not enter into written agreement with trustee - Where intention to be inferred from entry into agreement to invest on 'same terms' - where other investors invested on terms of express trust manifested in written agreement - Express trust established
Trusts - Breach of trust - Taking of accounts - Where judgment given determining extent of trustee’s liability - Whether utility in ordering account - Where nature and extent of trustee’s dealing with trust funds remains unknown at time of judgment - Where wilful default on the part of trustee - Account ordered
Practice and procedure - Summary judgment - Where claim for debt admitted - Summary judgment granted
Practice and procedure - Summary judgment - Where defendant denies existence of trustee relationship - Whether defendant raises triable issues - Whether defendant raises arguable defences - Where existence of express trust disputed on basis of subjective understanding - Where defence raised contrary to established principles - Where issues raised incapable of affecting outcome even if tried
Legislation:
Rules of the Supreme Court 1971 (WA), O 14 r 1, O 14 r 2
Result:
Summary judgment ordered for the plaintiffs
Category: B
Representation:
Counsel:
| First Plaintiff | : | Mr P G Donovan |
| Second Plaintiff | : | Mr P G Donovan |
| Third Plaintiff | : | Mr P G Donovan |
| Fourth Plaintiff | : | Mr P G Donovan |
| Defendant | : | Ms K Sierakowski |
Solicitors:
| First Plaintiff | : | MDS Legal |
| Second Plaintiff | : | MDS Legal |
| Third Plaintiff | : | MDS Legal |
| Fourth Plaintiff | : | MDS Legal |
| Defendant | : | MGM O'Connor Lawyers |
Case(s) referred to in decision(s):
Agar v Hyde [2000] HCA 41; (2000) 201 CLR 552
Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd [2000] HCA 25; (2000) 202 CLR 588
Australian Securities and Investments Commission v Idylic Solutions Ltd [2009] NSWSC 1306
Batistatos v Roads & Traffic Authority of NSW [2006] HCA 27; (2006) 226 CLR 256
Byrnes v Kendle [2009] SASC 385
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- AGLC
- Markopoulus v Marco [2020] WASC 79
- Case
- [2020] WASC 79
- Decision Date
CaseChat Overview and Summary
The legal issues focused on the interpretation of the Declaration of Trust executed in 2012 and its applicability to subsequent reinvestment of funds by Mrs. Markopoulus in 2013. The court examined the principles established in Byrnes v Kendle, which emphasize the objective manifestation of the intention to create a trust, rather than the subjective understanding of the parties. Mr. Marco argued that his subjective misunderstanding of the term 'trust' should be considered, but the court held that this was irrelevant to the objective intention of the parties as expressed in the written agreement.
The court found that the Declaration of Trust was a clear and unequivocal expression of an intention to create a trust, evidenced by the explicit terms and conditions set forth in the document. It further held that the subsequent reinvestment by Mrs. Markopoulus on the same terms as the original agreement also manifested an intention to create a trust, despite the absence of a new written agreement. The court ruled that Mr. Marco had breached his fiduciary duties by misappropriating the trust funds, and ordered an account to be taken to ascertain the extent of the breach.
In summary, the court granted summary judgment on the claim for debt, as Mr. Marco had admitted to owing the amount claimed. The court also held that Mr. Marco's defences, based on a subjective misunderstanding of the term 'trust' and the absence of a new written agreement, were without merit and did not raise any triable issues. The court ordered Mr. Marco to provide an account of his dealings with the trust funds and to compensate Mrs. Markopoulus for the losses incurred as a result of his breach of trust.
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 2012 Mr Markopoulus suffered a catastrophic brain injury. From that point on Mr Marco dealt with Mrs Markopoulus. Mr Marco deposed that whilst Mr Markopoulus had said that he, Mr Markopoulus, did not need documentation in relation to the investments, he, Mr Marco, wanted to document the agreement with Mrs Markopoulus as he was documenting 'most other investment matters as the business was growing'. Mr Marco deposed that he met Mrs Markopoulus and provided her with a copy of a document entitled Declaration of Trust being a document in the form prepared on his behalf by his solicitor. The document related to an investment by Tonpose and its material parts were as follows:DECLARATION OF TRUSTI, CHRIS MARCO (Principal) of Suite 30, Broadway Fair, 88 Broadway, Nedlands, 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 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$3,519,991b) Investment Return: AUD$422,398c) Investment Term: Twelve (12) monthsd) Investment Type: Interest-Bearinge) Payment Schedule: Refer Addendum A2.Name of Beneficiary and Relevant Proportion Marks Autos Superannuation Fund 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. Clauses 4 - 8 of the Declaration of Trust concerned the payment of stamp duty and costs, fees, re-investment, early exit and 'the serious illness and death of the Principal'. It is unnecessary to reproduce the text of these provisions: in summary: the 'Investor' was responsible for the costs of preparing the Declaration of Trust and any stamp duty; the Principal agreed 'to annul' any fees; the Principal agreed to offer the opportunity to re-invest should the opportunity to do so arise; there was no provision for 'early exit'; and if the Principal died or became seriously ill, the Investor should contact the Principal's office whereupon 'the specified terms of this declaration will be carried out in full'. The declaration was dated 20 August 2012 and was signed by Mr Marco and by Mrs Markopoulus. Addendum 'A' comprised two typewritten lines recording that $211,199 would be paid on 11 March 2013 and 23 September 2013. Under each typewritten line there appears in handwriting a list of payments, in each case receipted by a signature, made over the periods between August 2012 and March 2013 and between March 2013 and September 2013. The aggregate of the payments in each list was $211,199. Mr Marco's evidence was to the effect that in 2013 Mrs Markopoulus spoke to him and told him that she wanted to reinvest MASF's funds with him on the same terms as those set out in the Declaration of Trust executed by Mr Marco and Mrs Markopoulus in 2012. Mr Marco deposed that he made notations on the 2012 Declaration of Trust and asked Mrs Markopoulus to sign the annotated version of the 2012 Declaration of Trust.