Early 2014 saw a number of representative actions commenced by Melbourne City Investments Pty Limited (MCI) against, among others, Treasury Wine Estates Limited (TWE), Leighton Holdings Limited, Downer EDI and Worley Parsons Limited (Worley).
MCI’s action against TWE was commenced in November 2013. On 2 July 2014, Bentham IMF Limited announced that it had funded the commencement of proceedings against TWE for a closed class.
MCI’s claims are unusual in that MCI is controlled by Mr Mark Elliott who is also the solicitor for MCI in each of the claims. MCI had acquired small shareholdings in a number of listed entities and uses these shareholdings to validate the various class actions which have been commenced by MCI.
Attempts were made in the various class actions to restrain Mr Elliott from acting, given his allegedly compromised position. In the proceedings between MCI and TWE and between MCI and Leighton, Mr Elliott was prevented from continuing to act for MCI while the proceedings remained grouped proceedings with MCI as the representative plaintiff. The court’s decision arose from concerns that Mr Elliott was not in a position to give independent and detached advice to MCI. However, it is understood that TWE has lodged an appeal against the court's finding that MCI's claim was not an abuse of process.
In the proceedings between MCI and Worley, Worley questioned whether MCI had standing to bring the claim against it as MCI purchased shares before the alleged non-disclosure occurred. The court found that, in the circumstances, MCI did not have standing to pursue the claims against Worley. It is likely that Mr Elliott will simply adjust his business model in the Leighton and TWE proceedings. It is unclear what steps he will take to overcome the effect of the court’s ruling in the Worley claim. These cases also point to the important role which the applicant’s lawyers play in protecting the interests of class members.
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