Class action win for TWE and Leighton

TREASURY Wine Estates and Leighton Holdings have won a partial victory against Melbourne lawyer Mark Elliott.

TREASURY Wine Estates and Leighton Holdings have won a partial victory against Melbourne lawyer Mark Elliott, with the Supreme Court of Victoria ruling he can no longer represent himself in class actions brought against the companies.

Mr Elliott in 2013 launched class actions against TWE, Leighton and resources group WorleyParsons, alleging they had failed to disclose material information to the market that had later resulted in sharp falls in their share prices.

Mr Elliott’s private company, Melbourne City Investments, only had about $700 worth of shares in each company, but the lawsuits sought damages on behalf of all shareholders in each of the companies.

TWE and Leighton claimed that the lawsuits had been lodged with the aim of generating legal fees for Mr Elliott, who would be able to claim a portion of any damages settlement, rather than seeking compensation for MCI.

In a decision handed down yesterday, judge Anne Ferguson agreed that it was “probable that the reason for MCI’s existence is to launch proceedings, such as the present proceedings, to enable its sole director and shareholder to earn legal fees from acting as the solicitor for MCI”.

“Whilst Mr Elliott is acting on a ‘no win, no fee’ basis, it is common knowledge that most litigation settles before judgment and that this is treated as a ‘win’, such that the lawyers’ fees are paid,” Judge Ferguson wrote in her decision.

Justice Ferguson declared Mr Elliott could no longer act for MCI while it was the lead plaintiff in the class action, and that the case could not continue as a class action on behalf of all shareholders while MCI and Mr Elliott “act in tandem as plaintiff and solicitor”. But the judge declined to throw the case out of court as an “abuse of process” as had been alleged by TWE and Leighton.

Mr Elliott will now need to recruit additional shareholders to represent, or find another lawyer to take on the cases.