It’s hard to imagine a world where lawyers don’t act to uphold justice... but a recent case in Victoria might have just touched on the Lionel Hutz perception of the profession.
In 2012, Mark Elliot, a solicitor in Victoria, created a company called Melbourne City Investments (MCI), of which he was the sole director and shareholder. Mr Elliot incorporated MCI so that it could:
- purchase tiny amounts of shares in public listed companies like Treasury Wine Estates Ltd; and
- bring class actions against those companies for breaches of the Corporations Act on behalf of itself and all other shareholders.
And here’s the clincher. The class actions would then allow Mr Elliot to act as the lawyer for MCI and, when the proceedings concluded, get a favourable costs order for his fees. MCI's own claim against Treasury was worth only $700.
Effectively the whole process undertaken by Mr Elliot was to create a revenue stream from his legal services. Quite the entrepreneur you could say.
When the matter was first brought before the court, Treasury said that the proceedings were an abuse of process and tried to send the matter to its legal doom. The Judge said nope, because despite Mr Elliot wanting all of the fees, MCI’s purpose was still to obtain damages which would naturally lead to an award for costs and that was totes legit.
But! Treasury appealed and the Court of Appeal found that MCI’s claim was indeed an abuse of process because MCI had no interest in actually recovering the damages of $700; MCI’s sole purpose was to create a vessel that would encourage Treasury to pay Mr Elliot’s fees.
Looks like Mr Elliot’s business model might not be so profitable after all. MCI has sought special leave to appeal to the High Court so it isn't quite over yet. In our opinion, it’s kind of hard not to agree with the Court of Appeal on this one.