AUS: Treasury Wine Estates lawsuit an ‘abuse of process’

Dec 22, 2014

(TheAustralian) - MELBOURNE solicitor Mark Elliott has vowed to press on with a class action against Treasury Wine Estates despite being told by Victoria’s highest court that the lawsuit is “a clear abuse of process”.

By a two to one majority, the Court of Appeal yesterday ordered that the lawsuit be stayed permanently. Until July, Mr Elliott was both the solicitor and, through his company Melbourne City Investments (MCI), the lead plaintiff.

In addition to the Treasury case, Mr Elliott has used the same model to bring shareholder class action suits against Leighton Holdings, Downer EDI and Worley Parsons.

Justices Geoffrey Nettle and Chris Maxwell said MCI’s sole purpose was to create a cause of action “to create an income-­generating vehicle for its solicitor”, which it did by buying a small parcel of Treasury shares.

“The processes of the court do not exist — and are not to be used — merely to enable income to be generated for solicitors,” the judges said.

They stressed the importance of maintaining public confidence in the fairness of court processes.

“In this case, there is a palpable unfairness in a defendant being brought to court for the predominant purpose of enriching the plaintiff’s solicitor, and the community’s confidence would undoubtedly be shaken if that were held to be a legitimate purpose for bringing proceedings.”

In his dissent, Justice Emilios Kyrou said that because MCI could not get its legal costs paid by Treasury without winning the case for all the other class members, there was nothing improper about the lawsuit. Speaking from Los Angeles, Mr Elliott said he would study the judgment and consider an appeal to the High Court — to which Justice Nettle has been appointed.


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