Lawyer Alex Elliott was complicit in a plan by his late father to mislead the court and group members in the Banksia class action, to conceal conflicts of interest and to profit from the case at the expense of debenture holders, a judge has been told.
An amended revised list of issues provided to the Victoria Supreme Court by contradictor Peter Jopling QC last month details the alleged role of Elliott in Mark Elliott’s fraudulent scheme to maximise the fees pocketed by the legal team in the class action.
Elliott, who works as a lawyer with Elliott Legal and is a solicitor for Banksia funder Australian Funding Partners Limited, is alleged to have acted for the applicant in the class action from early 2016 under an arrangement in which the nominal law firm “effectively sub-contracted” its duties.
His role as “de facto instructing solicitor” was inappropriate, Jopling says in the 208-page court document, because of his family’s “substantial financial interest” in the case.
The court ruled in November 2014 that Mark Elliott and senior counsel Norman O’Bryan should not act for the class action because of their interest in AFPL. Mark Elliott, who died in February, was the managing director of AFPL. O’Bryan’s wife, Sue Noy, had $500,000 in shares in the funder.
In response to that ruling the court was later told that O’Bryan’s wife had disposed of her shares and that Mark Elliott had engaged Portfolio Law to represent the class.
“From about March 2016, Alex Elliott became involved in the conduct of the [Banksia] proceeding in his professional capacity as a solicitor and employee or agent of Elliott Legal and as an employee or agent for AFPL, as was Mark Elliott, despite the court having ruled that Mark Elliott could no longer act as solicitor on the record in the circumstances of his financial interest in the litigation, and despite [applicant Laurence] Bolitho having filed a notice of change of solicitor,” Jopling says.
“Thereafter, Alex Elliott was included in emails as if he was another solicitor acting on the matter.”
The contradictor, who has successfully sought discovery from Elliott detailing his financial interests in AFPL and his father’s other companies, said Elliott must have been aware of the court’s ruling on the inherent conflict of his father’s dual roles as funder and solicitor on record for the case.
Elliott owed overarching obligations to the court in his capacity as an in-house solicitor for AFPL, as a solicitor acting for Bolitho and group members and as an agent of AFPL, Jopling said.
Last week, Elliott lost his appeal seeking to disqualify Justice John Dixon from hearing claims that he breached his overarching obligations in the Banksia case. A trial has already heard that AFPL, O’Bryan and junior barrister Michael Symons breached their overarching obligations and their paramount duty to the court in seeking to come away with more than $17 million from a $64 million settlement in the class action.
Both O’Bryan and Symons, who were earlier joined to the proceedings, abandoned their defences mid-trial, and have agreed to accept any findings and penalties Justice Dixon makes, including the removal of their names from the legal practitioners roll. AFPL has abandoned its bid for a commission and most of its costs.
Elliott, who was joined to the case last month, is alleged to have been a participant in the class action email account by which third parties were led to believe they were corresponding with Portfolio Law. He was allegedly involved in procuring evidence from cost consultant Peter Trimbos to support the fee claims advanced by AFPL at the time of the settlement with the Trust Co, and was involved in working up the ‘Banksia expenses’ spreadsheet by which the funder “pre-determined” the fees that O’Bryan, Symons and Portfolio Law were to charge.
Jopling alleges Elliott drafted the script for Portfolio Law’s Anthony Zita to follow in communicating with group members about the settlement, which said Banksia debenture holders could be “reassured” that the legal costs in the case were fair and reasonable and that AFPL’s commission of $12.8 million was “just and equitable”.
Elliott was allegedly involved in discussions about the objections to the settlement by two group members and the response to group member Wendy Botsman’s appeal, including the strategy to try to deter her from pursuing the challenge.
He was also responsible, on instructions from his father, for drawing cheques to Symons and Zita dated August 1, 2018 and placing them in envelopes marked “Do not open until you talk to [Mark Elliott]” so that O’Bryan could tell the appeals court that Symons and Zita — who were to be present in court — had been paid. Symons and Zita were instructed not to cash the cheques until the following January, and did not do so until then, the court was told.
The drawing of the cheques followed an email from OBryan to Mark Elliott, in which the silk said “I think it is vitally important that AFP[L] pays [Symons] & [Portfolio Law] in respect of the accounts that Trimbos has opined on, so that I can confirm to the court when asked (which I now think highly probable) that they have been paid. If I am asked on 19/6, I will need to be able to answer yes very quickly, since [Symons] & [Zita] will be in court.”
“Having regard to Mr O’Bryan’s remarks in his 10 June 2018 email, Alex Elliott must have known that the purpose of drawing those cheques was to further the deception created by the third Trimbos report and to lead the Court of Appeal into error in relation to that matter and AFPL’s funding risk and entitlement to the commission,” Jopling says.
Closing submissions in the trial have been pushed back to hear the case against Elliott and Trimbos, who was also joined to the proceedings.
AFPL is represented by Samuel Horgan QC and Christopher Tran, instructed by Arnold Bloch Leibler. Banksia’s special purpose receivers John Lindholm and Peter McCluskey of KPMG are represented by Robert Dick SC and Jonathon Redwood SC, instructed by Maddocks. Contradictor Peter Jopling QC and Jennifer Collins are instructed by Corrs Chambers Westgarth. Norman O’Bryan is represented by David Batt QC and Mark Costello, instructed by MinterEllison. Michael Symons is represented by Robert Craig SC and Christopher Hibbard, instructed by Obst Legal. Portfolio Law & Anthony Zita are represented by Christian Juebner and Georgia Berlic, instructed by Colin Biggers & Paisley.
The class action is Laurence John Bolitho v Banksia Securities Limited (receivers and managers appointed) (in liquidation) & Ors.