Citystart Pty Ltd v Deputy Commissioner of Taxation for the Commonwealth of Australia - [2006] WASC 35

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CITYSTART PTY LTD -v- DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA [2006] WASC 35

CORAM: MASTER NEWNES

HEARD: 1 DECEMBER 2005

DELIVERED : 8 MARCH 2006

FILE NO/S: COR 179 of 2005

BETWEEN: CITYSTART PTY LTD (ACN 094 181 656)
Plaintiff
AND
DEPUTY COMMISSIONER OF TAXATION FOR THE COMMONWEALTH OF AUSTRALIA
Defendant

Catchwords:

Corporations - Application to set aside statutory demand - Letter addressed to registered office of debtor - Placed in debtor's post office box for collection - Whether deeming provision for postal service applies - What is date of service - Turns on own facts

Legislation:

Acts Interpretation Act 1901 (Cth), s 29(1)

Australian Postal Corporation (Performance Standards) Regulations 1998 (Cth), reg 6(2)
Corporations Act 2001 (Cth), s 5C(1), s 109X, s 459E, s 459G

Rules of the Supreme Court 1971 (WA), O 37 r 6(2)

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr R G S Harrison
Defendant: Mr L A Tsaknis

Solicitors:

Plaintiff: Tottle Partners
Defendant: Deputy Commissioner of Taxation

Case(s) referred to in judgment(s):

A‑Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 13 ACLC 896
Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59
Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1,663
Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Deputy Commissioner of Taxation (NSW) v Gruber (1998) 43 NSWLR 271
Deputy Commissioner of Taxation (NSW) v Taylor [1983] 2 NSWLR 139
Deputy Commissioner of Taxation v Coco [2003] QSC 119
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Kemp v Wanklyn [1894] 1 QB 583
Mibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290
Westpoint Management Pty Ltd v Goakes [2002] WASCA 317

Case(s) also cited:

Genesis Management Services Pty Ltd v Soniclean Pty Ltd [2005] SASC 224
Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409

MASTER NEWNES: This is an application by the plaintiff to set aside a statutory demand issued by the defendant. The matter which was argued before me was whether the application was made within 21 days after the demand was served, as required by s 459G of the Corporations Act 2001 (Cth) ("the Act"). If that issue is determined against the applicant that is the end of the matter: David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265. If, on the other hand, the application was made within time the next issue is whether there is a genuine dispute as to the plaintiff's indebtedness to the defendant. The parties agreed that that issue should be left until it had been determined whether the application was within time.
The question of whether this application was within time depends upon the date upon which service of the statutory demand was, or is deemed to have been, effected on the plaintiff. The application was made on 15 July 2005. It was made within time only if service of the statutory demand was effected on or after 24 June 2005.
The relevant circumstances were as follows. On 21 June 2005 an officer of the defendant prepared a statutory demand together with an accompanying affidavit, pursuant to s 459E of the Act. The statutory demand required the plaintiff to pay the sum of $252,216.10 to the defendant within 21 days after service of the demand. The statutory demand and affidavit were posted in a letterbox in Francis Street, Northbridge at 4.40 pm on 21 June 2005. The envelope in which they were contained was addressed to the plaintiff at its registered office at 201 Sevenoakes Street, Cannington.
The defendant says that in the ordinary course of mail the statutory demand and affidavit would have been delivered to the plaintiff at that address on 22 June 2005. That is based on the Australia Post Delivery Standards, which indicate that a letter posted in Northbridge would reach an address in Cannington in one day.
The plaintiff says that, in fact, it did not receive the demand until 24 June 2005. Mr Joseph Tilli, a director of the plaintiff, says that the plaintiff has a post office box located at the Cannington Post Office, into which all mail addressed to the plaintiff is placed and from which it is collected by a representative of the plaintiff on a daily basis. Mr Tilli says the mail in the box was collected on the morning of 24 June 2005 and that mail was opened by him on 25 June 2005, being the first available time he had to open the mail. It included the statutory demand and accompanying affidavit.
How a letter addressed to the plaintiff's street address came to be placed in the plaintiff's post office box, rather than delivered to its street address, was not explained on this application by any admissible evidence.
In an affidavit filed in support of this application, Mr Tilli says he has been working at the plaintiff's offices at 201 Sevenoakes Street, Cannington for 20 years and that deliveries of mail to the Cannington Post Office over that period have been "intermittent at best and have taken three and four days for mail to arrive at Cannington from destinations in the metropolitan area". Mr Tilli says that on a number of occasions over the last 10 years he has looked at the details of post marks on letters which have been sent to the plaintiff, and other companies associated with it, and from that has been aware that mail received by the plaintiff and those companies has taken up to three or four days to be received. Mr Tilli said he had collected all the mail in the plaintiff's post office box each day after 21 June 2005 and that the letter from the defendant was collected from the post office box on the morning of 24 June 2005.
It was submitted on behalf of the plaintiff that the date of service of the demand was the date of its receipt by the plaintiff on 24 June 2005, when it was collected from the post office box. On that basis, the application to set aside the demand was made within 21 days of service.
Although the point was not expressly made, I understood the submission to be based on the proposition that, in the circumstances, the deeming provision of the Acts Interpretation Act had no application and the date of service was therefore the date upon which the statutory demand actually came into the hands of the plaintiff.
The Act does not set down a prescribed method of service of a statutory demand. Section 109X of the Act relevantly provides:
"(1)For the purposes of any law, a document may be served on a company by:
(a)leaving it at, or posting it to, the company's registered office; …"
Section 5C(1) of the Act provides that the Acts Interpretation Act1901 (Cth) applies to the Act. Section 29(1) of the Acts Interpretation Act provides that, unless the contrary intention appears, service of a document will be deemed to be effected by properly addressing, prepaying and posting the document as a letter and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post.
It was submitted on behalf of the defendant that the demand would have been received in the ordinary course of post on the next business day after posting, that is, on 22 June 2005, and the fact that there may be special arrangements between the plaintiff and Australia Post which results in the delivery date being later than that is irrelevant for the purposes of calculating the date of service of the demand.
It was argued that it is now well settled that evidence of non‑receipt does not constitute proof of non‑delivery. Counsel referred to Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96 ‑ 97; Deputy Commissioner of Taxation (NSW) v Gruber (1998) 43 NSWLR 271 at 277; Deputy Commissioner of Taxation (NSW) v Taylor [1983] 2 NSWLR 139 at 143 and Deputy Commissioner of Taxation v Coco [2003] QSC 119.
It was submitted that the "ordinary course of post" is not concerned with particular idiosyncrasies or special arrangements relating to a particular addressee; it is concerned with the general delivery practices of the postal service as determined by the postal service, for which practices the Post Office Regulations determine when mail "shall, as a general rule, be delivered": Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8; Kemp v Wanklyn [1894] 1 QB 583. Regulation 6(2) of the Australian Postal Corporation (Performance Standards) Regulations 1998 (Cth) establishes that the ordinary course of delivery to Cannington from the Perth metropolitan area is the next business day. That is also supported by the Delivery Standards published by Australia Post, a copy of which was put in evidence.
Counsel argued that the term "ordinary course of post" for the purposes of the Acts Interpretation Act relates to the ordinary course of post as it affects the person to whom the letter is addressed. Particular arrangements between the addressee and the postal authorities as to a particular method of delivery, such as diverting mail addressed to a street address to a post office box, does not affect the application of the presumption as to the date upon which mail is delivered in the ordinary course of post.
It was submitted that, accordingly, the arrangement by which the letter addressed to the street address of the plaintiff was placed in its post office box at the Cannington Post Office is irrelevant to the calculation of the date of service. The date of delivery is the time at which the demand would have been delivered to the plaintiff had it not been for the methodology for delivery adopted by the plaintiff.
It was further submitted that there is, in any event, no evidence of the practices of the post office from which it can be inferred that it is more probable than not that the statutory demand was placed in the plaintiff's post office box on 24 June 2005. The evidence of Mr Tilli simply establishes that it was placed in the post office box at some time after he collected the mail from the box on the morning of 23 June 2005. It follows that the Court cannot be satisfied that an essential condition of the right to set aside the statutory demand has been established.
I have referred above to the relevant provisions in relation to service of a statutory demand. On the evidence, the envelope containing the statutory demand was not delivered by Australia Post to the registered office of the plaintiff, but instead to the plaintiff's post office box at the Cannington Post Office. The questions then are whether the defendant can rely on the deeming provision in s 29(1) of the Acts Interpretation Act to establish service on the plaintiff and the date upon which service was effected for the purposes of the Act.
I do not consider that the fact that the letter in this case was not delivered by Australia Post to the plaintiff's street address, but was placed in the plaintiff's post office box for collection by the plaintiff, establishes that delivery was not effected until the letter was actually received by the plaintiff and that the deeming provision has no application.
In Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1,663, a statutory demand was posted by registered post addressed to the applicant's registered office. The occupier of the registered office, a firm not otherwise associated with the applicant, had an arrangement with the post office under which mail addressed to a number of corporations, including the applicant, which had their registered office at the firm's office, was to be placed in a post office box at the post office for collection by a member of the firm's staff. The envelope containing the statutory demand was placed in the firm's post office box but there was no evidence that it was collected and taken back to the firm's offices; that is, to the registered address of the applicant. The envelope was not returned to the respondent by the post office as undelivered. In issue in the proceeding was whether the deeming provision, then contained in s 109Y of the Corporations Law, applied and, if it did, whether the applicant had satisfied the Court that service had not been effected. The applicant contended that the arrangement by which the letter addressed to its registered office was placed in the firm's post office box for collection, rather than delivered by the post office to the registered office, established that delivery had not occurred.
In the event, Owen J found that the deeming provision did apply and the applicant had failed to satisfy the Court that service had not been effected. Owen J held (at 1,668) that the term "ordinary course of post", for the purposes of the deeming provision, ought to include a methodological (as well as a temporal) application. It should relate to the ordinary course of post as it affects the company to whom the letter was addressed. His Honour observed that if that were not so it would be unwise for any person wishing to deal with a company to effect service by post because the person would never know whether some arrangement had intervened that would inevitably prevent reliance on the deeming provision. The legislature would not have intended service by post to be limited in this way.
More specifically, Owen J said (at 1,670 ‑ 1,671) it could not be the case that an arrangement for the collection of mail from the post office, rather than delivery by the post office to the registered address, necessarily took it outside "the ordinary course of post". His Honour noted that a contrary conclusion would mean that service could never be effected by post where mail is collected from the post office rather than delivered by the post office. His Honour said:
"In my opinion such a result would run counter to the legislative intent which underlies s 109Y of the Law. This question of legislative intent was referred to by Roden J [in Thomas v Johnson (1979-80 ANZ ConvR 159]. In this context, s 170(1)(c) of the Conveyancing Act 1919 (NSW) (in the form in which it appeared at the time when the case was decided) was similar to s 109Y(b). In Thomas (supra) Roden J said at 162:
'Basically, the legislative provision is designed to assist and to protect the owner of the notice who uses the registered post and who commits his notice to that post a sufficient time before the last day for service, given the nature of the postal services available.'
I believe that the same can be said of the deeming provisions in s 109Y. In this case the respondent creditor has done everything in its power to effect service in accordance with the law. I do not accept that the legislature would have intended that the company could, by its own act (an act of which the creditor could not have notice) put itself outside the deeming effect of the statutory provision. To hold that the deeming provision applies does not work an injustice. As was said in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 81, the deeming provision does not prevail in the face of proof of non‑delivery. Of course, if the deeming provision operates, the onus is on the company to satisfy the court that service was not effected in the circumstances of a particular case. In this case the applicant company failed to prove its case on that issue."
It is, I think, also established that in ascertaining the time at which a letter is deemed to have been delivered in the ordinary course of post, regard is not to be paid to the idiosyncrasies of the particular addressee so as to fix a time at which service was effected that is different from the time at which service would have been effected under the general practice operating in the area.
In Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8, an option agreement required notice of exercise of the option to be given by 11 March 1972. The agreement permitted service of notice by post. Clause 19(a) provided that notice was deemed to be given by post "at the time when such an envelope would in the ordinary course of post be delivered." The grantee posted a notice before 5 pm on Friday 10 March 1972 which was not delivered until Monday 13 March 1972. The recipient's offices, and the building where those offices were located, were closed on Saturday, a fact known to the postmen concerned who did not therefore attempt to deliver the envelope in the course of their normal delivery rounds on Saturday but retained it until the delivery round on Monday. Stephen J said (at 14 ‑ 15):
"When cl 19(a) refers to 'the ordinary course of post' it is not, I think, concerned with the particular idiosyncrasies of a particular addressee but rather with the general delivery practices of the postal service. It does not concern itself with particular circumstances of an addressee which may, if known to the postman on his round, deter him from attempting to effect delivery to a particular addressee; for instance the fact that the postman is aware in advance that that addressee's premises will be closed so that he will be unable to effect delivery of a registered letter in accordance with appropriate regulations. As was said by Lord Esher MR in Kemp v Wanklyn [1894] 1 QB 583, at 585, in dealing with the meaning of 'in the ordinary course of post':
'The Post Office is the authority which, under its statutory powers, determines the ordinary course of the post - that is to say, how the letters shall be carried, and at what time they shall, as a general rule, be delivered within any particular district to the persons taken as a body who reside in that district. It appears to me that all the objector has to do under s 100 is to look at the Post Office regulations, and to see whether a letter posted at the place, from which he proposed to send the notice, would, according to the ordinary course of post, be delivered to any person resident within the district to which he is posting the notice, as to whom there is no exceptional mode of delivering letters, on or before August 20. He is not bound to inquire whether within the district there may be some people who, by some special arrangement with the post office officials there, made either with or without the authority of the Post Office, have their letters delivered in an exceptional manner. Such a special arrangement would be, not the ordinary, but an extraordinary, course of post.' "
In the present case there was no evidence that it was the general delivery practice of Australia Post, as opposed to the practice in relation to deliveries to the plaintiff, to place mail addressed to a street address in a post office box, where the addressee has a post office box. There was, in addition, no evidence to suggest that the defendant knew the plaintiff had a post office box or that it was, or should have been, aware of any practice of Australia Post to divert mail addressed to the plaintiff's street address to its post office box. The fact that mail addressed to the plaintiff's street address was diverted to its post office box was, of course, known to the plaintiff. There was no evidence that the plaintiff could not have required Australia Post to deliver mail addressed to its street address to that street address.
As I have said, there was no admissible evidence as to how it came about that mail addressed to the plaintiff's registered office was diverted to its post office box. There was, however, hearsay evidence in an affidavit of Mr Tilli in which he related conversations with the Welshpool Delivery Manager (the "Manager") of Australia Post at the Welshpool Delivery Centre in Cannington. Mr Tilli says the Manager told him that the diversion of the plaintiff's mail to its post office box was done at the initiative of Australia Post, not by reason of any request of the plaintiff. Mr Tilli says he was told by the Manager that because the mail is diverted it takes at least a "couple of days" longer than ordinary deliveries, but the Manager said she could not be any more definite than that. Annexed to Mr Tilli's affidavit is a letter from the Manager to Mr Tilli. In that letter the Manager says that delivery times to the post office box for mail addressed to a street address would depend on the timing of the delivery shuttle and the arrangements at the Cannington Post Office, but "as a guide, customers are advised that street addressed mail diverted to a [post office] Box does not have the same guaranteed next day delivery standard."

The defendant objected to the admissibility of that evidence on the ground that it was hearsay. It was submitted that hearsay evidence was inadmissible on this application, it being a final, not an interlocutory, application so that O 37 r 6(2), which permits evidence of information and belief in an interlocutory application, does not apply. I found that it was inadmissible: Westpoint Management Pty Ltd v Goakes [2002] WASCA 317 per Templeman J at [8]. See also Asian Century Holdings Inc v Fleuris Pty Ltd [2000] WASCA 59, in which it was held, albeit on the issue of whether leave to appeal was as of right or only by leave, that an order setting aside a statutory demand was a final, not an interlocutory, order. But cfMibor Investments Pty Ltd v Commonwealth Bank of Australia [1994] 2 VR 290 and see A‑Pak Plastics Pty Ltd v Merhone Pty Ltd (1995) 13 ACLC 896 per Sheller JA at 899.
I should also say that, in any event, I regard the hearsay evidence as unsatisfactory. It is notable that Mr Tilli did not depose to the circumstances in which the plaintiff's mail came to be diverted to the post office box. In particular, he did not give evidence that the plaintiff did not cause, or elect to enter into, the arrangement by which its mail was diverted. Nor did anyone else on behalf of the plaintiff give such evidence. No reason is suggested as to why such evidence could not have been adduced. It is also not apparent why direct evidence of the relevant employee of Australia Post could not have been adduced, rather than hearsay evidence given by Mr Tilli.
Moreover, even on the hearsay evidence it is not clear that, where a person has a post office box, such diversion originates with, and is simply the invariable practice of, Australia Post, or even of the Cannington Post Office, rather than a facility of which holders of post office boxes can choose whether or not to avail themselves, so that, if chosen, the mail is thereafter automatically diverted by Australia Post to the post office box. No evidence was sought to be led to explain the process by which mail came to be diverted to the post office box. The fact that, according to the Manager, Australia Post customers are advised that street addressed mail diverted to a post office box does not have the same guaranteed next day delivery standard, might tend to suggest that diversion is not automatic or invariable.
Accordingly, even on the basis of the hearsay evidence, I do not consider it can be said that the diversion of the plaintiff's mail to its post office box was in accordance with the general delivery practices of Australia Post, rather than a special arrangement.
In my view, therefore, the deeming provision in s 29(1) of the Acts Interpretation Act applies, although the statutory demand was in fact delivered, not to the registered office of the plaintiff, but to its post office box. When delivery would have been effected in the "ordinary course of post" is to be determined by when the demand would have been delivered if no special arrangements had existed in respect of mail addressed to the plaintiff; that is, if the letter had not been diverted to its post office box. The date of delivery does not depend upon special arrangements that exist in relation to the delivery of mail to the plaintiff.
Whether the position would be different if the arrangements in question reflected the general delivery practice of Australia Post where an addressee has a post office box or, even if they did not, where the arrangements were known to the defendant, does not arise in this case as on the evidence neither of those circumstances were the case.
I am satisfied on the evidence that in the ordinary course of post the demand would have been delivered on 22 June 2005 and that is therefore the date of service for the purposes of s 459G.
It follows, in my view, that the application to set aside the statutory demand was out of time and must be dismissed.