Marina St Vincent operator diverted nearly $601,000 to associated companies, District Court judge finds
A marina operator diverted nearly $601,000 of fees to prop up related businesses and failed to keep the marina in safe condition, a judge has ruled.
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A marina operator diverted nearly $601,000 of berth fees to prop up related businesses and failed to keep the marina in safe condition in breach of its head lease, a court has found.
District Court Judge Patrick O’Sullivan also described Marina St Vincent’s Stephen Lindsay Gordon Marks as an untruthful witness during a hearing into allegations he and his company misappropriated marina funds.
Seventy five berth owners at the Wirrina Cove marina sued his company New Wave Aerospace over alleged misuse of more than $1 million in berth fees.
Their case centred on allegations that money they had paid towards repairs and maintenance of the marina had instead been diverted to other companies related to Mr Marks.
They had sought orders that NWA had breached the leases for failing to spending their money on essential repairs, should pay back excess charges and pay unspecified damages.
Marks, who admitted during a trial last May that he had no experience running a marina, denied suggestions that he had misappropriated berth owners’ fees for his own gain.
On Friday, Judge O’Sullivan said it was “clear” that NWA, of which Mr Marks is sole director, was using the marina’s funds to support related entities which “have nothing to do with the marina”.
“Some of those companies, ie Incospec Pty Ltd and Krause Motors, received significant amounts totalling at least $233,069.04 and $151,094.55 respectively …” he said.
“The payment of outgoings does not represent a pool of money which the defendant is able to use for purposes not associated with marina outgoings as it wishes.
“Self-evidently, had the defendant not transferred out of its accounts net payments in the sum of nearly $601,000 over the four financial years in question, then those funds would have been available to carry out essential maintenance on the marina.”
Krause Motors and Incospec Pty Ltd were placed into liquidation and Judge O’Sullivan said, money advanced to these two companies by the defendant will not be repaid.
He found that NWA had not compiled with its obligations under the head lease to “maintain the premises in good, sound, safe and serviceable operating repair and condition”.
Judge O’Sullivan had “gained the impression” during trial that Mr Marks was “content with the low standard of financial record keeping” and the businessman was “not a witness of truth”.
Judge O’Sullivan also found NWA had overcharged management fees.
He will hear further submissions on February 28 and March 3 before before making final orders.
NWA leases the marina from the State Government, and subsequently subleases the berths to boaties who pay an annual outgoing fee based on the length of their berths.
Mr Marks is fighting a separate decision by the government to terminate his head lease over his company’s failure to pay a dredging bill.