Marina St Vincent operator Stephen Marks denies claims he robbed berth owners to prop up failing business empire

Stephen Marks is the embattled operator of an Adelaide marina — and he’s accused of transferring nearly $800,000 of berth owners’ money to prop up his other failing businesses, a court has heard.

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Publican, seafood wholesaler, smallgoods retailer, bottleshop operator, builder and car salesman — Stephen Lindsay Gordon Marks has had a wildly varied business career.

The 56-year-old has owned and operated the Union Hotel on Waymouth Street, Krause Motors at Medindie, the Yankalilla Hotel, the Wellington Hotel bottleshop, building company New Wave Construction and has a of dozens of property trusts within his auspices.

But its his operation of his most recent business acquisition — the Marina St Vincent at Wirrina Cove — that has put Mr Marks’ conduct of his business empire under the spotlight.

A group of 73 disgruntled berth owners have sued Mr Marks’ company New Wave Aerospace alleging that it has breached terms of its lease and misappropriated $1.25 million of their berth fees for his own purposes.

A District Court trial heard this month that the company, of which Mr Marks is sole director and shareholder, failed to carry out repairs and maintenance and landscaping as required and had transferred $785,041 of berth owner funds to prop up other companies.

It was also alleged that berthowners were charged for costs of Mr Marks’ hovercraft.

The berthowners are seeking an order that New Wave Aerospace breached the terms of the lease, should pay back excess charges and pay unspecified damages.

Marina St Vincent director Stephen Mark is accused of using berth owners funds to prop up failing businesses. Picture: Tait Schmaal

Mr Marks, who represented himself at trial, was forced under cross-examination to defend the company’s conduct — rejecting suggestions he had siphoned money into a “black hole”.

He also accused berthowners of conducting a smear campaign against him with the ultimate aim to take over control of his business.

“The court has heard numerous accusations from the plaintiffs and counsel that money is disappearing into a black hole; that black hole is the marina,” he told the court.

“I’ve never deceived anyone or taken any money that was not due and payable for the expenses. From day one of taking over business with the vision of improving the whole area.”

Mr Marks, who told the court he had no experience running a marina, bought business and all debt under a deal with administrators of previous operator ICA (South Australia) in September 2014.

The $22.5 million marina includes 210 berths of which 140 are presently privately leased and another 30 quarantined for the public.

New Wave Aerospace leases the marina from the State Government, and subsequently subleases the berths to boaties who pay an annual outgoing based on the length of their berths.

Under the terms of the lease berthowners are charged at the beginning of each financial year estimated marina expenses.

But the plaintiffs argue that New Wave Aerospace — which the court heard was among 22 companies Mr Marks had a directorship — had failed to properly account for what happened to their money, in breach of the lease, or used their money for ulterior purposes.

Trevor Gadd, pictured outside the District Court with wife Sally Wiadrowski, said the marina is an “embarrassment”. Picture: Tait Schmaal.

They also accused Mr Marks of invoicing an associated company New Wave Construction to undertake repairs in what was not an arms-length arrangement and with no evidence any repairs were done.

The court also heard Mr Marks had paid himself a marina management fee of $472,500 between 2014 and 2018 and well in excess of what plaintiffs allege he should have been paid.

Head plaintiff Trevor Wesley Gadd, a retired podiatrist who bought a berth in 1997, told the court that the marina was an “embarrassment” to the sailing community.

“It’s been getting slowly worse clearly because of just ageing from day one … in the last five years it’s really gone backwards there seems to be absolutely no maintenance whatsoever that we can determine,” he said.

“Apart from the individual cleat that somebody badgers management to come and fix … I cannot find any maintenance at all and I’ve no idea what the maintenance schedule looks like.”

Stephen Marks' hovercraft at Marina St Vincent

Mr Gadd’s barrister Alex Lazarevich told the court that despite berth owners being charged $740,000 for maintenance and repairs, the marina remained in a state of “disrepair”.

He cited oral and written evidence from building inspector Fred Centofanti and former Hindmarsh Island marina owner Andrew Chapman who estimated the cost to bring the marina up to standard would cost between $270,000 and $300,000.

Problems included cracked and rusting concrete, twisted marina fingers, broken timber, and uneven walkways.

Mr Lazarevich noted Mr Centofanti and Mr Chapman’s estimates were “significantly less than what has been charged by the defendant to date”.

“This issue of repairs and maintenance is one of the main reasons why we are in court today because they have been charged such significant amounts through a related entity yet they see the marina in such a state of complete disrepair,” he said.

Mr Marks said “not at all” when Mr Lazarevich asked if the lack of maintenance since May 2017 was in retaliation for berth owners launching legal action.

“If moneys are not there you can’t do maintenance,” Mr Marks said. “Are you suggesting the marina manager should just walk away and forget the marina, forget the asset they purchased?”

President of Marina Industries Association of Australia and former Hindmarsh Island marina operator Andrew Chapman.

He acknowledged that he was obliged to maintain the marina in good state under the terms of the head lease but he also pointed the finger at berthowners who he said owed more than $400,000 in unpaid fees.

“If we had those moneys we wouldn’t be sitting here today,” he said. “At the moment I’m loaning money from everywhere just to pay wages and keep the administration office open.”

Mr Lazarevich outlined multiple transfers totalling $785,041 from the Marina St Vincent’s account to those of other Marks businesses including corrosion engineering firm Incospec, building firm New Wave Constructions and car dealership Krause Motors.

Mr Marks’ related businesses transferred $84,043 back to the marina account, according to a summary of the marina’s accounts, covering November 2014 to February 2018, and submitted to the court.

Incospec was placed in voluntary administration in 2016 and Mr Marks sold Krause Motors to employees in 2018.

Mr Marks denied the sale was to offset a claim for unpaid wages.

Mr Lazarevich put to Mr Marks during cross-examination that marina berth owners money had been used to prop up Incospec and pay wages of his related companies.

“It’s all about robbing Peter to pay Paul and I’ve done the same thing from Incospec, New Wave Constructions, North Adelaide Property Trust, all the other trusts pay wages in the marina as well,” Mr Marks said.

Stephen Marks pictured in 2004 behind the bar of the Union Hotel on Waymouth Street, of which he was licencee.

But Mr Lazarevich asked “what do you say to the suggestion you were robbing the underlessees to pay your other businesses?”

To which Mr Marks said: “That’s an assumption. Robbing Peter to pay Paul is merely a phrase used to say that you’re borrowing money from loan accounts to pay other loan accounts, that money will come back.”

He told the court that money had been borrowed from Incospec and Krause Motors to buy the marina business.

But Mr Lazarevich said the accounts did not show any record of debt owed by Marina St Vincent to those companies.

The court heard that Mr Marks has been the subject of bankruptcy proceedings, and that his two previous lawyers representing him in the marina case had quit because he hadn’t paid them.

Mr Marks was also grilled over his failure to dredge the marina within 12 months of taken over the lease, as was required under the terms of the head lease with the government.

Barrister Alex Lazarevich asked Mr Marks’ lack of maintenance spending was “retaliation’ for the legal action.

The court heard that berthowners had been paying money into a sinking fund that was supposed to be used for dredging work but that no separate account had been created, in what the plaintiffs said was a breach of the lease.

The State Government is now to spend $500,000 dredging the marina with works expected to begin this month.

Mr Marks has in closing submissions said his company “steadfastly believes” all costs associated with running the marina was “well within commercial expectations”.

“The under-lessor has done its best to comply with its obligations under the lease,” he said.

Judge Patrick O’Sullivan has adjourned a judgment pending findings of a forensic examination by independent arbitrator Hugh McPharlin of Mr Marks’ company accounts.

The matter returns to court on May 29.