Bakir v Doueihi & Ors

[111] The respondents submit that there is no obligation to hold the monies received in trust. The evidence suggests that commissions payable could be offset by the service provider for claw-backs etc. Whether or not the commissions payable at the time of making the order, are subject to a trust obligation depends on the intention of the parties. As Gibbs ACJ held in Australasian Conference Association Ltd v Mainline Constructions Pty Ltd:101

"Where money is advanced by A to B, with a mutual intention that it should not become part of the assets of B, but should be used exclusively for a specific purpose, there will be implied (at least in the absence of a contrary intention) a stipulation that if the purpose fails the money will be repaid, and the arrangement will give rise to a relationship of a fiduciary character, or trust."

In this case the question is one of a trust created in favour of a third party.102

[112] The relevant intention is inferred from the language used by the parties, the nature of the transaction and from the circumstances attending the relationship between the parties.103

101 (1973) 141 CLR 335 at 353 when explaining Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567; see Jessup v Queensland Housing Commission [2001] QCA 312, CA No 409 of 2001, 10

102 See Carreras Rothmans Ltd v Freeman Mathews Treasure Ltd [1985] Ch 207.

103 Associated Alloys v ACN 001 452 106 P/L (supra) at [34].

[113] In this case, the undertaking given in paragraph 6, made it clear that in the event that the service providers did not pay to the applicant one half of the income from airtime commissions payable on contracts to 13 July 2001, then those moneys were to be paid into a trust account. Those moneys are impressed with a trust obligation.

[114] More difficulty arises, however, with regard to the commissions earned by use of the dealer code numbers of the second to fourth respondents. The applicant would use certain specified dealer codes of the second to fourth respondents for a period of

30 days for which she would be entitled to receive the commissions. The commissions would be paid by the service providers to the second to fourth respondents. It was arguably the intention of the parties that that money should not become part of the assets of the respondents but be paid to the applicant. Although an agreement to keep funds separate is strongly indicative of a trust, indeed it has been called the "hallmark duty of a trustee",104 a failure to do so does not necessarily negative a trustee obligation arising. As the High Court held in Associated Alloys v ACN 001 452 106 P/L:105

" ... it is no objection to the effective creation of a trust that the property to be subjected to it is identified to be a proportion of the proceeds received by the Buyer; a proportion referable to moneys from time to time due and owing but unpaid by the Buyer to the Seller."

[115] In such a case, and in this case, the trustee (the relevant respondent) is bound to apply that sum by accounting to or at the direction of the beneficiary (the applicant).

[116] The respondents further submit that they have in any event paid what was owing under this order. They submit that the only amount which is identified as having been received by the second respondent in respect of such commissions or airtime commissions is the sum of $28,042.00 (after allowance for claw-backs).106 An error was, they submit, made in calculating that amount because of the inclusion of the sum of $2,690.00 for the period 20 to 27 July 2001 in respect of the Mermaid Beach store. That amount does not otherwise appear in Exhibit JRMF12. They also argue that $3,546.00 of that amount107 appears to have arisen before the order came into operation. Subtracting that amount gives a balance of $21,806.04. By letter dated 30 August 2001, the solicitors for the respondents directed that

$27,551.04 was to be paid to the applicant in reduction of the amount owing by the respondents to the applicant.108 By directing payment on 30 August 2001, the respondents discharged, it is submitted, any obligation as to payment which was then outstanding under paragraph 6(h) of the order and did so by the end of the month in which payments were received.

[117] The respondents further submit that these charges should fail because, on 30 July

2001, before there was any suggestion of a breach of the order, the parties made a written agreement about the payments required to be made under paragraph 6(h) of

104 Puma Australia Pty Ltd v Sportman's Australia Ltd [No 2] [1994] 2 Qd R 159 at 162.

105 [2000] HCA 25 at [30].

107 This was the amount tendered to Mr Shneider by Mr Ellaz and Mr Hassam on behalf of the respondents.

the order.109 However, the agreement made between them was only a mechanism for giving effect to the order made in paragraph 6(h). It was certainly not in substitution for it. It did not interfere with the terms of the order. The contempt charge, properly, recites a breach of the order rather than the agreement entered into between the parties.110

[118] However, there is nevertheless the same flaw in these charges as there was in the charge relating to the breach of the order of Moynihan J. As the respondents submit, the orders on which these charges rely are money orders and so must be enforced under Chapter 19 by the issue of an enforcement warrant.

[119] For the reasons given, there is no case to answer with regard to:

(1) paragraphs 1(b), and 2, 3 and 4 with regard to the breach alleged in paragraph 1(b);

(2) paragraphs 5(d), (e), and 6, 7 and 8 with regard to the breaches alleged in paragraphs 5(d) and (e);

(3) paragraphs 9(a), 10, 11 and 12 (with regard to the third, fifth and sixth respondents);

(5) paragraphs 21(a), 22, 23 and 24 (with regard to the fourth and fifth respondents);

(7) paragraph 29 (with regard to paragraph 1(b), 5(d) and (e));

(8) paragraph 30 (with regard to the allegation in paragraph 9(a) against the third, fifth and sixth respondents);

(9) paragraphs 31, 32, 33, 34, 36, 37, 38 and 39 of the application.

[120] It follows that there is a case to answer on:

(1) paragraphs 1(a), and 2, 3, and 4 with regard to the breach alleged in paragraph 1(a);

(2) paragraphs 5(a), (b), (c), and 6, 7 and 8 with regard to the breaches alleged in paragraphs 5(a), (b) and (c);

(3) paragraphs 9(a), 10, 11 and 12 (with regard to the second and fourth respondents);

109 Affidavit of S Shneider filed 29 August 2001, paragraph 6, Exhibit SS1.

(5) paragraphs 21(a) and 22, 23 and 24 (with regard to the second respondents).

(6) The allegations in paragraphs 29 and 30 will be restricted to breaches for which there is a case to answer.