Marco Maximilian Elser v Andrea Mandel-Mantello & Ors

An express trust may arise notwithstanding that the legal title remains with a company and the trust is imperfectly documented. The court may determine the beneficial ownership by evaluating contemporaneous documents, inherent probabilities and subsequent conduct. A beneficiary’s delay does not itself establish laches; relief is barred only where the delay and resulting circumstances make it inequitable to grant it. A resignation disclaimer directed to claims arising from office does not ordinarily waive independent rights under an existing trust. A trustee who has generated profits is not entitled to an equitable allowance where the beneficiary seeks a declaration of ownership rather than an account.

The claimant and the first defendant had been equal shareholders in Advicorp plc. Advicorp acquired and held shares in an Italian business, Advihair SRL. The claimant alleged that, following regulatory advice, Advicorp agreed to hold the shares on trust for him and the first defendant in equal proportions. The first defendant contended that the beneficial interest had instead been transferred to his wholly owned company and that the claimant had either surrendered his interest or was barred by laches.

The court considered the parties’ evidence, contemporaneous accounts and correspondence, later dealings with the business, the claimant’s 2016 resignation letter, delay, and the first defendant’s claim for an equitable allowance for his work and risk-taking.

1. Beneficial ownership. The claimant retained a 50 per cent beneficial interest in Advihair. The court found that, in response to the regulatory advice, the parties agreed in late 2012 that Advicorp would hold the shares as nominee for Managest and subject to a trust for the claimant as to 50 per cent. The absence of signed documentation did not prevent the court from finding an express trust. The contemporaneous documents were incomplete and partly inaccurate, while later correspondence and conduct strongly supported the claimant’s case.
2. Construction of the disclaimer. The claimant’s 2016 resignation letter did not waive his beneficial interest. A beneficiary has rights under a trust, rather than a claim or right of action for compensation, unless and until there is a breach of trust. Objectively construed, the disclaimer concerned claims arising from the termination of the claimant’s office or employment and did not extend to independent trust rights.
3. Laches. Section 21 of the Limitation Act 1980 imposed no limitation period on the beneficiary’s proprietary claim, but laches remained available. The relevant inquiry was equitable and required consideration of the length of delay, the conduct during the interval, and whether granting relief would be unjust. The claimant’s delay after his 2016 request for transfer did not make relief inequitable. The first defendant had not clearly denied the trust, and the alleged management burden, risk, lost remuneration and lost opportunity to sell were not shown to result from the delay.
4. Equitable allowance. No allowance was payable for the first defendant’s work, skill or risk-taking. The claimant sought a declaration of pre-existing beneficial ownership, not an account of profits. There was therefore no accounting context in which an allowance was required to prevent unjust enrichment.
5. The claimant succeeded on the ownership issue and the defences based on the resignation letter, laches and equitable allowance failed. The court expected the parties to agree the claimant’s fair share of the price paid for the additional shares acquired in 2024, failing which further findings or directions would be given.