Colton Road Civil Services Pty Ltd v Norvast Pty Ltd

[2009] NTSC 71

Colton Road Civil Services Pty Ltd v Norvast Pty Ltd [2009] NTSC 71

PARTIES:	COLTON ROAD CIVIL SERVICES PTY LTD
v
NORVAST PTY LTD
TITLE OF COURT:	SUPREME COURT OF THE NORTHERN TERRITORY
JURISDICTION:	SUPREME COURT OF THE TERRITORY EXERCISING TERRITORY JURISDICTION
FILE NO:	149/09 (20934591)
DELIVERED:	17 December 2009
HEARING DATES:	19 and 30 November 2009
JUDGMENT OF:	MASTER LUPPINO
CATCHWORDS:

Corporations – Application to set aside a statutory Demand –
Interstate service of the demand by post – Mail to the street address
diverted to post office box - When service effected in that event –

Meaning of ‘to the person to whom it is addressed’.

Spencer Constructions Pty Ltd v G & M Aldridge Pty Ltd (1997) 24
ACSR 353.
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184
CLR 265.
Scope Data Systems Pty Ltd v David Goman (2007) 210 FLR 161.
Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Pty Ltd

(2005) 188 FLR 373.

Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd
[2006] NSWCA 259.
Corporations Act s459G.
Service and Execution of Process Act (Cth) s11(11).
Acts Interpretation Act (Cth) s 29(1).

REPRESENTATION:

Counsel:

Plaintiff:	Mr Alderman
Defendant:	Mr Peters

Solicitors:

Plaintiff:	Robert Welfare & Associates
Defendant:	Bradley Solicitors

Judgment category classification: B

Judgment ID Number:	LUP0905
Number of pages:	11

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA

AT DARWIN

Colton Road Civil Services Pty Ltd v Norvast Pty Ltd [2009] NTSC 71

No 149/09 (20934591)

BETWEEN:

COLTON ROAD CIVIL SERVICES

PTY LTD

Plaintiff

AND:

NORVAST PTY LTD

Defendant

CORAM: MASTER LUPPINO

REASONS FOR DECISION

(Delivered 17 December 2009)

1. This is an application pursuant to section 459G(1) of the Corporations

   Act (“the Act”) to set aside a creditor’s statutory demand issued by the

   Defendant.

2. The statutory demand was served on the Plaintiff by post by the

solicitors for the Defendant from Townsville, Queensland. The demand
was addressed to the Plaintiff’s registered office in Nhulunbuy. The
demand did not specify a local jurisdiction address for service but that
deficiency does not render it invalid (Spencer Constructions Pty Ltd v G

& M Aldridge Pty Ltd).[1]

1. The only contentious issue is whether the application to set aside was

made within the time fixed by section 459G(2) of the Act. Time is
critical given that it is established law that once a statutory demand is

served the company has 21 days from the date of service to make an

application to set the demand aside and that time cannot be extended

(David Grant & Co Pty Ltd v Westpac Banking Corporation).[2]

1. The application to set aside the statutory demand was filed on

   13 October 2009. The current application can only be within time if

   service of the statutory demand was effected no earlier than

   22 September 2009.

2. The evidence of the Defendant before me consists firstly of the affidavit

   of Kassandra Wilder sworn 14 October 2009 which establishes that the statutory demand was served by posting it on 15 September 2009 from Townsville addressed to J C Smith & Associates NT Pty Ltd, Shop 6B

   Captain Cook Shopping Centre, Nhulunbuy, NT. It is common ground

   that the offices of J C Smith & Associates referred to above is, and was

   at all relevant times, the registered office of the Plaintiff.

3. Secondly the affidavit of Brian Smith sworn 19 October 2009 which

asserts that a letter posted at Townsville, Queensland and addressed to
Nhulunbuy in the Northern Territory would normally be delivered

within four business days in the ordinary course of the post.

1. The Plaintiff’s evidence is that the statutory demand was not received at

   the Plaintiff’s registered office until 22 September 2009. This was

   deposed to in the affidavits of Mark Evans sworn 16 and 18 November

   2009. Owing to the lack of specifics in those affidavits, the Defendant

required Mr Evans to be called for cross examination. That occurred on
30 November 2009. His evidence, in point form is as follows:

• He is an accountant employed by J C Smith & Associates in

Nhulunbuy and acts for the Plaintiff.

• Normally his wife collects the mail for the firm on a daily basis

but she was overseas at the relevant times.

• The mail deliveries to Nhulunbuy are not regular and variations

in mail deliveries occur from time to time.

• There are no mail deliveries by Australia Post in Nhulunbuy and

all mail must be collected from the Nhulunbuy Post Office.

• Due to his work commitments and that he was alone in the office

on the days in question, he and his wife worked out in advance the

best dates to collect the office mail in lieu of a daily collection.

• He diarised the dates so determined. Extracts of his diary were

put in evidence as Exhibit P1.

• The mail at Nhulunbuy Post Office is usually sorted after 10 am

each day and hence when his wife collected the mail she would

usually do so after 10 am on each day.

• Notwithstanding that, on the dates that he collected the mail, he

did so some time between 8.15 am and 8.45 am due to his work

commitments. Accordingly the mail he collected would likely

have been the mail placed in the firm’s post office box after

approximately 10.00 am on Monday 21 September 2009.

• He collected the mail on 11, 16, 18, 22 and 25 September 2009.

• By reference to his diary, he confirmed that he collected the mail

on 22 September 2009. He recalled that he collected the statutory demand on that occasion. He had reason to specifically recall the

document given that it related to a David Bullard (a person

connected to the Defendant) and his client as he had been working on that clients’ matters that day.
•	His office does not keep any records of incoming or outgoing mail.
•	The mail receipting procedures of his office are that it is

separated into mail from the Australian Taxation Office and otherwise, the mail that is not from the Australian Taxation Office is then distributed to the appropriate person. On the days

in question, he was the only person in the office.

1. The combination of the foregoing evidence reveals then that the

statutory demand was collected on Tuesday 22 September 2009
sometime before 10.00 am on that date. That was before the mail was
sorted on that date and therefore it was likely to have been delivered to

the post office box on the preceding business day i.e., Monday 21

September 2009. Although it was put to Mr Evans that it could have

even been there waiting collection on Friday 18 September 2009, this
runs counter to the affidavit evidence of Brian Smith. From that
evidence it would appear that the earliest that the statutory demand

would have been available for collection was after 10.00 am on Monday 21 September 2009. Therefore, that means that the delivery of the item

by Australia Post was effected within the timeframe deposed to by Brian

Smith, notwithstanding the evidence of Mr Evans that there were

variations in mail deliveries.

1. Although Mr Evans’ evidence was challenged in cross examination and

   there were suggestions made that his dates were in error, his evidence

   comes together neatly given the staff absences at his workplace in the

relevant period, his diary records and that he had good reason to recall
the specific item. He made concessions where appropriate. Importantly

he conceded that the statutory demand may have been at his post office

box on Monday 21 September 2009. That is obviously so on the
evidence. He also conceded that the statutory demand may have been at

his post office box on Friday 18 September 2009 something which,

unknown to him, could not have been the case given the evidence of
Brian Smith. Although he effectively conceded nothing in real terms,

his willingness to make that concession was nonetheless to his credit

overall.

1. I thought Mr Evans was credible and I accept his evidence. On that

   basis I find that the statutory demand was collected from his firm’s post

   office box on Tuesday 22 September 2009. I also find that the statutory demand was available for collection from the post office box after 10 am

   on Monday 21 September 2009.

2. As service of the statutory demand can be effected by post and in the

case of interstate service by post, the parties agree that section 11(11) of
the Service and Execution of Process Act (Cth) (“SEPA”) applies to

determine the time of service. That provides that the document is

presumed to have been served on the fourth day after the day it was

posted absent evidence that raises real doubts that the document “was

delivered by post to the person to whom it was addressed within four days

after the day it was posted” (emphasis added).

1. Having accepted the evidence of Mr Evans, I believe real doubt exists in

   the terms of that subsection. Although the evidence reveals that the

   statutory demand was placed in the firm’s post office box after 10.00 am on 21 September 2009 and was available for collection after that time, it was not actually collected until 22 September 2009.

2. I was referred to Scope Data Systems Pty Ltd v David Goman[3] (“Scope

   Data”). That case concerned similar circumstances to the current case.

   It likewise involved the time of service of a statutory demand. Likewise

   in that case the company’s registered office was the accounting firm of

   the company. In that case the accounting firm had an arrangement with

   Australia Post whereby in lieu of mail being delivered to its premises, all

   of that firm’s mail was redirected to a post office box. As in the current

   case, there was a time difference between when the demand was actually

   received at the registered office and when the demand would have been delivered to the company’s registered office had it been delivered to the

   stipulated street address in the ordinary course post i.e., without the

   diversion to the post office box. Relevantly in that case, the company

   had no part to play in the diversion of mail and was unaware of it.

3. That case did not involve service of the demand across jurisdictions and

consequently section 11(11) of SEPA did not apply. The legislation
which did apply in that case was the Acts Interpretation Act (Cth)
section 29(1). That provides that in the case of service of a document by
post, service is deemed to be effected “unless the contrary is proved … at

the time at which the letter would be delivered in the ordinary course of
post”.

[15]   Although there are differences in wording between section 11(11) of

SEPA and section 29(1) of the Acts Interpretation Act (Cth), the

operation of each is similar. Both involve rebuttable presumptions.

Although one refers to a specific time period and the other has a general

and variable time period, the principles applicable are similar after

making due allowance for the different wording where that is material. Consequently, the principles which can be extracted from cases dealing

with one Act can apply equally to the other Act.

[16]   In Scope Data, White J examined the numerous authorities and

concluded that delivery to the post office box could not be equated with

delivery to the company’s registered office. He held that delivery only

occurred when it was actually collected and taken to the company’s

registered office.

1. White J noted with approval the decision, both at first instance and on

   appeal, in Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Pty

   Ltd[4] (“Derma Pharmaceuticals”). There the Full Court of the Supreme

   Court of South Australia, approved the ruling of Burley J at first

   instance that the placing of the statutory demand in a post office box

excluded the operation of the deeming provision in section 29(1) of the
Acts Interpretation Act.

1. White J also distinguished the decision in Falgat Constructions Pty Ltd v

   Equity Australia Corporation Pty Ltd[5] on the basis that it applied only to

   cases where it was the company itself which diverted mail addressed to

   its registered office. In coming to his overall conclusion White J said

   that a person relying on service by post assumes the risk of delayed or

   failed delivery in the event of a situation of diversion to a post office

   box.

2. In the same circumstances and applying the same principles, such a

   conclusion is more appropriate in the current case as here, not only was

   the Plaintiff not a party to the diversion, it was effectively compulsory

   given the absence of mail deliveries in Nhulunbuy.

3. The deeming provision in section 11(11) of SEPA applicable in this case

   does not contain any reference to the delivery in the ordinary course of

   post. All that is required is that a real doubt is raised that delivery

occurred within four days after the day it was posted. Section 11(11) of
SEPA stipulates that delivery must be “to the person to whom it was

addressed”. In the current case, delivery must refer to mean when the

mail is collected from the post office box, not when it was placed there
by the mail service. In the current case, if the accounting firm for some

reason did not collect its mail for an extended period of time, the mere fact of proof of delivery of an item of mail to that post office box could

not be proof of service as it is not then delivered “to the person to whom
it is addressed”, which is the pre-condition to the operation of the

presumption in section 11(11) of SEPA. In my view the reference to

delivery “to the person to whom it is addressed” refers not just to the

name or identity of the addressee, but means the person so named and at
the stipulated address.

1. Mr Peters for the Defendant argued that time limits in applications to

   set aside a statutory demand being critical, it followed that an

   interpretation which could potentially leave the determination of the

   date of service of the demand uncertain for an extended period should

not be preferred. No authority to support that proposition was put
forward. Despite that, there may be some scope for such an argument in

an appropriate case but the current case is not such an appropriate case.

The delay attributable to the diversion in the current case is less than

one day and then only due to out of the ordinary circumstances at the

Plaintiff’s accounting firm at the relevant time. Absent those

circumstances, the statutory demand would have been collected on the

same day that it was delivered to that firm’s post office box. By

contrast, in Derma Pharmaceuticals, no adverse comment was made

regarding a difference of up to nine days between delivery to the
registered office via the post office box and the delivery which would
have occurred had physical delivery by the postal service occurred.

1. If I am wrong in my interpretation of the words “to the person to whom

it is addressed” in s 29(1) then nonetheless, on my findings, there is a
real doubt that delivery occurred within four days within the meaning of
section 11(11) of SEPA and once that doubt has been raised, per Scope
Data, proof of actual delivery is required. Having accepted the evidence

of Mark Evans, actual delivery did not occur until 22 September 2009.

1. On either basis, service of the statutory demand was effected on

   22 September 2009 and consequently the application to set aside the

   demand is within time.

2. As there is no dispute as to whether a genuine dispute exists, a

   concession quite properly made on my reading of the affidavit material,

   there will be an order that the statutory demand will be set aside.

3. I will hear the parties as to costs and any consequential orders.

_________________

[1] (1997) 24 ACSR 353.

[2] (1995) 184 CLR 265.

[3] (2007) 210 FLR 161.

[4] (2005) 188 FLR 373.

[5] [2006] NSWCA 259.