Baskerville v Skene - [2023] QSC 31

SUPREME COURT OF QUEENSLAND

CITATION:

Baskerville v Skene [2023] QSC 31

PARTIES:

CHRISTOPHER JOHN BASKERVILLE IN HIS CAPACITY AS LIQUIDATOR OF GOLDSKY ASSET MANAGEMENT PTY LTD ACN 611 171 870 (IN LIQUIDATION)

(first plaintiff)

& others

v
MATTHEW PETER SKENE

(first defendant)

& others

FILE NO/S:

BS 6402 of 2021

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

24 February 2023

DELIVERED AT:

Brisbane

HEARING DATE:

2 February 2023

JUDGE:

Freeburn J

ORDER:

Application dismissed

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES – PLEADINGS – SUMMARY JUDGEMENT – STRIKING OUT – STATEMENT OF CLAIM – where an application is brought for summary judgement or, in the alternative, to strike out the claim and statement of claim – whether the pleading is so flawed and embarrassing that the respondent cannot respond to the claim against them

COUNSEL:

D Savage KC and L Copley
(plaintiffs/respondents)

JW Peden, KC and SC Russell
(defendants/applicants)

SOLICITORS:

Thynne + Macartney for the plaintiffs/respondents

Mills Oakley for the First to Fifth Defendants/Applicants

By an amended application filed on 9 November 2022 the First to Fourth Defendants apply for summary judgment pursuant to rule 293 of the Uniform Civil Procedure Rules 1999 (UCPR). Alternatively, those defendants apply to strike out the statement of claim pursuant to rule 171 of the UCPR. The Fifth Defendant makes a similar application. For convenience I will refer to those five defendants as the applicants.
A timetable leading to the hearing of the applications was ordered by the Chief Justice on 3 November 2022. The timetable provided for the amendment of the applications, the filing and service of affidavits and the exchange of outlines of submissions. Both parties filed material that complied with that order.

Factual Background

The applicants’ submissions set out the factual background. None of that background appears to be contentious. Below is a summary of what has happened – largely paraphrased from the applicant’s submissions.
Throughout approximately 2017 and 2018, Mr Ken Grace solicited investments from members of the public through various investment vehicles associated with the brand name, “Goldsky”. Those vehicles included three companies – Goldsky Asset Management Pty Ltd, Goldsky Investments Pty Ltd and Goldsky Global Access Fund Pty Ltd (the Goldsky Corporate Entities) – and at least one managed fund, the Goldsky Global Access Fund (the Fund).[1] Some of the factual background to the actual operation of the Goldsky Corporate Entities can be found in ASIC v Goldsky Global Access Fund Pty Ltd [2019] QSC 114 (Flanagan J).
[1]The parties used the expressions ‘the scheme’ and ‘the Fund’ interchangeably.
The background to the appointment of Mr Baskerville as the liquidator of the Goldsky Corporate Entities and the Fund is as follows.
On 29 October 2018, the Australian Securities and Investments Commission (ASIC) filed an originating application commencing Supreme Court proceeding number 11736/18. By that application, ASIC sought the appointment of receivers as well as declarations…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Baskerville v Skene

Details

AGLC: Baskerville v Skene [2023] QSC 31
Case: [2023] QSC 31
Decision Date: 24 February 2023

CaseChat Overview and Summary

The case of Baskerville v Skene involved a legal dispute under the Uniform Civil Procedure Rules in Queensland, focusing on whether the respondent's statement of claim was so fundamentally flawed that it should be struck out. The applicant sought summary judgment or, in the alternative, the striking out of the claim and statement of claim due to perceived deficiencies. The central legal issue was whether the respondent's pleading was so fundamentally flawed and embarrassing that it prevented a proper response to the claim.

The court examined the respondent's statement of claim to determine if it contained any viable cause of action. The reasoning involved assessing whether the respondent's pleading, despite its flaws, could be amended to meet the necessary legal standards. The court held that the respondent's statement of claim, while not perfect, did not reach the threshold of being so fundamentally flawed that it could not be amended to address the deficiencies. Therefore, the application for summary judgment and the alternative application to strike out the claim were dismissed.

The court's decision was grounded in the principle that a pleading should not be dismissed unless it is entirely devoid of any merit or capable of being remedied through amendment. In this instance, the court found that the respondent's pleading could be amended to potentially state a valid cause of action, thus falling short of the criteria for striking out. Consequently, the court dismissed the application, allowing the respondent the opportunity to amend the statement of claim to address the identified deficiencies.

Orders

Orders of the court

Application dismissed

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The only basis for the applicants’ argument is the following passage from the reasons of Gilmour J (with whom Spender J agreed) in National Australia Bank Ltd v Norman:[20] “Section 601EE allows managed investment schemes to be wound up where a person operates a scheme in contravention of s 601D(5). Section 601ED(5) prohibits a person from operating a managed investment scheme that is required to be registered, unless the scheme is so registered. Section 601ED(5), accordingly, envisages that the unregistered managed investment scheme is of a kind which ought to have been, and could in fact have been, registered. In my opinion, a scheme involving, even in part, misappropriation as one of its features, is not a scheme of a kind which is capable of registration by the Australian Securities and Investments Commission under s 601EB of the Act.Whilst in the colloquial sense it may be regarded as a scheme, it is not a statutory scheme within the meaning of s 9 of the Act and, it follows, cannot be subject to a winding up order of the court under s 601EE or otherwise.Any scheme involving a programme or plan for the misappropriation of investors’ funds could not involve contributions being pooled or used in a common enterprise to produce financial benefits ‘for the people … who hold interests in the scheme’, as required by the second limb of the definition of ‘managed investment scheme’.As senior counsel for NAB put it, investors in a supposed scheme could not be taken to have intended to contribute money as consideration to acquire rights to benefits produced by a scheme in which they would be defrauded.” [emphasis added][20](2009) 180 FCR 243. In that case, however, the contest was whether there was a scheme at all. It is necessary to mention some of the facts:(a)A number of investors deposited funds with an accountant, Mr McFarlane, for investment by him. (b)He deposited those funds into a trust account;(c)However, instead of complying with each individual’s instructions as to how their funds were invested, he misappropriated the funds for his own use.[21] [21]These facts are taken from the headnote, but see also paragraphs [23], [44], (Graham J) and [105]-109] (Gilmour J). And so, the threshold question for the Full Court of the Federal Court was whether those facts were sufficient to meet the definition of ‘managed investment scheme’ in s 9 of the Act. The court found that there was insufficient evidence of the pooling of contributions to meet the definition. As Gilmour J said, the mere fact that the contributions were placed into one bank account by one person, with the intention that they be used according to individual arrangements reached with each contributor, did not constitute pooling or a common enterprise as required in the definition.[22] [22](2009) 180 FCR 243 at [153]. That demonstrates that the Full Court was concerned with a question of fact as to whether this particular conduct of the depositors and Mr McFarlane met the definition of ‘managed investment scheme’. Thus, when Gilmour J said that a scheme involving misappropriation was not of a kind that was capable of registration, His Honour was saying that the misappropriation feature was another factor that took those particular facts outside the s 9 definition of ‘managed investment scheme’. His Honour was not saying that a pooled investment of funds that otherwise fell within the definition was, by an act of misappropriation, disqualified from qualifying as a ‘managed investment scheme’. In each case there is a question of fact as to whether the circumstances fall within the definition. It is inappropriate, in my view, to pull one factual consideration from a collection of facts in another case and to treat that fact as a disqualifying criteria for all future cases.

CITATION:	Baskerville v Skene [2023] QSC 31
PARTIES:	CHRISTOPHER JOHN BASKERVILLE IN HIS CAPACITY AS LIQUIDATOR OF GOLDSKY ASSET MANAGEMENT PTY LTD ACN 611 171 870 (IN LIQUIDATION) (first plaintiff) & others v MATTHEW PETER SKENE (first defendant) & others
FILE NO/S:	BS 6402 of 2021
DIVISION:	Trial Division
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court of Queensland
DELIVERED ON:	24 February 2023
DELIVERED AT:	Brisbane
HEARING DATE:	2 February 2023
JUDGE:	Freeburn J
ORDER:	Application dismissed
CATCHWORDS:	PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES – PLEADINGS – SUMMARY JUDGEMENT – STRIKING OUT – STATEMENT OF CLAIM – where an application is brought for summary judgement or, in the alternative, to strike out the claim and statement of claim – whether the pleading is so flawed and embarrassing that the respondent cannot respond to the claim against them
COUNSEL:	D Savage KC and L Copley (plaintiffs/respondents) JW Peden, KC and SC Russell (defendants/applicants)
SOLICITORS:	Thynne + Macartney for the plaintiffs/respondents Mills Oakley for the First to Fifth Defendants/Applicants