David v Cohen
[2019] FCCA 70
•18 January 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DAVID & ANOR v COHEN | [2019] FCCA 70 |
| Catchwords: BANKRUPTCY – Service of bankruptcy notice – meaning of “last known address” – whether last-known address is address communicated by debtor to creditor or to world at large – meaning of “in absence of proof to the contrary” in reg16.01(1). |
| Legislation: Bankruptcy Regulations 1996 (Cth), reg.16.01 Corporations Act 2001 (Cth), ss.205D, 1274B |
| Cases cited: Civic Video Pty Limited v Warburton (2013) 216 FCR 61 [2013] FCA 934 Drake v Stanton [1999] FCA 1635 |
| First Applicant: | SUZY DAVID |
| Second Applicant | FRED DAVID |
| Respondent: | ROBIN COHEN |
| File Number: | SYG 1651 of 2018 |
| Judgment of: | Judge Baird |
| Hearing date: | 18 October 2018 |
| Date of Last Submission: | 18 October 2018 |
| Delivered at: | Sydney |
| Delivered on: | 18 January 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr N Kirby |
| Solicitors for the Applicant: | Mr F David, David Legal |
| Counsel for the Respondent: | Mr R Notley |
| Solicitors for the Respondent: | Mr G Hadchiti, Paramonte Legal |
ORDERS
THE COURT ORDERS THAT:
The Respondent’s application in a case filed on 17 August 2018 (notice stating grounds of opposition to creditor’s petition) is dismissed;
The Respondent pay the Applicants’ costs of the application in a case filed on 17 August 2018;
A sequestration order be made against the estate of Mr Robin Cohen;
The Applicants give a copy of this order to the Official Receiver in compliance with s.52(1A) of the Bankruptcy Act 1966 (Cth);
The Applicants’ costs, including reserved costs, be taxed and paid from the estate of Mr Robin Cohen in accordance with the Bankruptcy Act 1966 (Cth).
THE COURT NOTES THAT:
A.The date of the act of bankruptcy is 9 June 2018.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1651 of 2018
| SUZY DAVID |
First Applicant
| FRED DAVID |
Second Applicant
And
| ROBIN COHEN |
Respondent
REASONS FOR JUDGMENT
Introduction
This proceeding concerns a creditor’s petition, dated and filed 13 June 2018, pursuant to which the applicants, Ms Suzy David and Mr Fred David trading as David Legal, seek a sequestration order under s.43 of the Bankruptcy Act 1966 (Cth) against the estate of Mr Robin Cohen. David Legal contend that the debtor, Mr Cohen, owes them the amount of $211,085.89, being a judgment debt obtained on 22 August 2017 in the District Court of New South Wales.
The act of bankruptcy relied upon by David Legal is Mr Cohen’s failure to comply on or before 9 June 2018 with the bankruptcy notice served on 19 May 2018, or to satisfy the Court of the existence of a counterclaim, set-off or cross demand in a sum equal to or more than the sum claimed in the bankruptcy notice.
Mr Cohen does not dispute his liability for the judgment debt, nor the fact that he has not paid any part of the debt. Mr Cohen, however, challenges the validity of the bankruptcy notice on the ground that it was not served in accordance with reg.16.01(1)(c) of the Bankruptcy Regulations 1996 (Cth) by leaving it at the last known address of Mr Cohen. By notice dated 17 August 2018 stating grounds of opposition to the creditor’s petition, Mr Cohen opposed the creditor’s petition on the ground that he “was not served with the purported bankruptcy notice as alleged by the Applicant”.
Act of service of bankruptcy notice sought to be relied on
The act of service of the bankruptcy notice relied on by David Legal is that on 19 May 2018, at 1.40pm, a process server left the bankruptcy notice (comprising the form of bankruptcy notice issued 30 April 2018 and attaching the judgment debt relied upon), under cover letter from David Legal dated 15 May 2015, in a sealed envelope addressed to Mr Cohen at 142 Bossley Road, Bossley Park, New South Wales, 2176 (Bossley Park address). The process server served the documents by personally placing them in the sealed envelope addressed to Mr Cohen and affixing the envelope to the front door of the Bossley Park address.
Mr Cohen disputes that the Bossley Park address is his last known address within the meaning of reg.16.01(1)(c) of the Bankruptcy Regulations. It is not disputed that Mr Cohen was not in Australia on 19 May 2018.
Bankruptcy Regulations – last known address of the person
Reg.16.01(1)(c) and reg.16.01(2)(b) provide:
(1)Unless the contrary intention appears, where a document is required or permitted by the Act or these Regulations to be given or sent to, or served on, a person (other than a person mentioned in regulation 16.02), the document may be: …
(c)left, in an envelope or similar packaging marked with the person’s name, at the last known address of the person: …
(2)A document given or sent to, or served on, a person in accordance with subregulation (1) is taken, in the absence of proof to the contrary, to have been received by, or served on, the person; …
(b)in the case of service in accordance with paragraph (1)(c), (d) or (e) – when the document is left, delivered or transmitted, as the case requires. (Emphasis added)
The issues for determination in this Court are thus whether that service to the Bossley Park address constitutes valid service of the bankruptcy notice on Mr Cohen at his “last known address” in accordance with reg.16.01(1)(c) in the absence of proof to the contrary within the meaning of reg.16.01(2)(b), or whether Mr Cohen has proved to the contrary.
Some background facts
The applicants (whom I refer to as David Legal) are partners in the legal practice known as David Legal. On 31 July 2012 Mr Cohen retained David Legal to act for him in relation to a dispute concerning the sale by him of shares in the company Office Deals Pty Limited to a third party, Jizhu Diao. That dispute was heard in the Supreme Court of New South Wales and determined against Mr Cohen by Lindsay J: Diao v Cohen [2016] NSWSC 96.
On 7 April 2017 David Legal filed an application for an assessment of their legal professional costs against Mr Cohen in the sum of $216,085.89, including GST. On 5 July 2017, the costs assessor issued a certificate of determination of costs together with reasons for determination. On its face, it identified the cross-respondent in the dispute as Mr Cohen, and his address as the Bossley Park address. The certificate of determination of costs required Mr Cohen to pay David Legal the sum of $211,085.89. The certificate of determination of costs together with reasons was posted to Mr Cohen at the Bossley Park address.
David Legal filed in the District Court the certificate of determination of costs issued by the costs assessor, and stamped by the manager costs assessment on 20 July 2017. As I have said at [1] above, on 22 August 2017, the District Court of New South Wales at Sydney entered a judgment/order in the claim amount of $211,085.89.
Meanwhile, on 18 August 2017, Mr Cohen filed in the Supreme Court of New South Wales an application for review of determination(s) of the costs assessor (review application). In anticipation of the Court filing, by letter dated 16 August 2017 to David Legal, Mr Cohen’s solicitor, Mr George Hadchiti of Paramonte Legal, enclosed a copy of Mr Cohen's application for review. On the review application document Mr Cohen's address was stated to be the Bossley Park address. The 4 grounds of review were non‑service, that Mr Cohen did not receive certain correspondence, that he did not reside at the Bossley Park address, and denial of procedural fairness. Ground 3 of the review application was that “The Review [A]pplicant does not reside at [the Bossley Park address]”.
In support of the review application Mr Cohen relied on an affidavit sworn 5 September 2017 (September 2017 affidavit) in which he deposed that he was not served with the application for assessment of costs. In the prefatory wording of the September 2017 affidavit identifying the affiant, “Robin Cohen” is named as the affiant, the address is identified as “4252 Room B Building No. 25F, Dong Hu Garden No. 8 District, HuiZhou City, 516008, Guangdong Province, China” (China address) and the nominated occupation as “Self Employed”. I return to this affidavit below.
On 25 September 2017, David Legal received in the post the review application and the September 2017 affidavit of Mr Cohen sworn in support of the review application.
The review panel affirmed the costs assessor's decision, rejecting the grounds of review, and issued a statement of reasons for the review determination dated 28 November 2017. The review panel accepted that Mr Cohen was served with the itemised bill of costs and application for assessment of costs at the Bossley Park address in February 2017 on the basis of a statutory declaration of process server Mark Slater dated 1 March 2017. In accepting that Mr Cohen was served, the review panel observed: The wife acknowledging that it was the residence of the review Applicant.
Mr Slater attested to the following exchanges when effecting service of the bill of costs and application for assessment on the wife of the review applicant (Mr Cohen) at the Bossley Park address: “At the time of service I asked the person so served, “Does Robin Cohen?” to which she replied “Yes he live here””, and “At the time of service the person so served said “Ok … I’m his wife”.” Mr Slater’s statutory declaration was tendered in evidence before me, and I received it subject to a ruling pursuant to s.136 of the Evidence Act 1995 (Cth) that Mr Slater’s report of the wife’s acknowledgment on service was not admitted as truth of the facts of Mr Cohen’s relationship or residency.
Subsequently, the panel issued a certificate of determination of review dated 21 March 2018.
On 30 April 2018, on the application of David Legal, the Official Receiver issued bankruptcy notice BN223497 attaching the District Court judgment/order made or given and entered 22 August 2017.
Mr Cohen has instigated 2 legal proceedings in which he has sued Mr David personally, and in his capacity as a partner of the firm, David Legal:
(a)proceeding commenced on 29 December 2017 filed in the District Court at Parramatta, with verifying affidavit made by Mr Cohen on 5 September 2017 (Parramatta proceeding); and
(b)proceeding commenced on 16 April 2018 in the District Court at Sydney, commenced by summons filed in the appeal (costs assessment) list, and seeking leave to appeal the decisions of the cost assessor and the review panel (Sydney proceeding).
The Parramatta proceeding is concerned in substance with claimed loans that Mr Cohen, and a second plaintiff, Krono Holdings Limited (asserted to be a corporation registered in Hong Kong), alleged they made in the period 2012 to 2013 to Mr David and a Mr Joseph Zaia mostly pursuant to alleged oral requests made in person or by telephone. The plaintiffs seek orders for payment to them from Mr David of approximately A$237,000, US$95,000 and HK$5000, and for payment to them from Mr Zaia of approximately A$330,000 and US$228,500.
In the Sydney proceeding the proposed grounds of appeal are that the review panel made an error of law by failing to take into account the September 2017 affidavit.
These 2 proceedings are relevant insofar as Mr Cohen claims that they show that his last known address is not the Bossley Park address, and that David Legal was aware of this since at least 25 September 2017 (see above at [13]).
Correspondence between the parties about service of the bankruptcy notice
By letter dated 26 March 2018, David Legal asked Paramonte Legal (Mr Hadchiti) whether it was in a position to accept service on Mr Cohen's behalf in respect of bankruptcy proceedings that David Legal intended commencing forthwith. Mr David wrote:
We note that your client does not reside in Australia and, as we understand it, based on the matters deposed to in his affidavit dated 5 September 2017 [the September 2017 affidavit], is estranged from his family.
In the absence of acceptance of service, David Legal indicated their intention to make an application for substituted service upon Paramonte Legal’s office, and Mr Cohen’s solicitor, Mr Hadchiti.
By letter dated 4 April 2018, Mr Hadchiti informed David Legal that Paramonte Legal did not have instructions to accept service.
By letter dated 17 May 2018, David Legal informed Paramonte Legal that they had instigated bankruptcy proceedings, and based on references to the China address in documents such as the statement of claim in the Parramatta proceeding, the summons for leave in the Sydney proceeding, and the September 2017 affidavit, that they had arranged for a Federal Express (FedEx) courier to serve Mr Cohen with the bankruptcy notice at the China address. The letter continued:
We have been informed by FedEx that there is no such address as [the China address]. Enclosed herewith is a copy of the tracking record provided by FedEx which shows "incorrect address".
Noting that Mr Hadchiti, as solicitor on the record on behalf of Mr Cohen in respect of at least two other unrelated matters, would have Mr Cohen’s current contact details, David Legal requested Mr Hadchiti provide details of an address for service in Australia for Mr Cohen, an address for service in China for Mr Cohen, and an email address for Mr Cohen. There is no evidence any response was provided to that letter.
According to an affidavit sworn by a solicitor in Paramonte Legal's office and read in this proceeding, as at 31 May 2018 the firm was instructed not to accept service of the bankruptcy notice on Mr Cohen’s behalf.
Service of the bankruptcy notice
Attempted service of the bankruptcy notice on the China address
As David Legal informed Paramonte Legal, on 2 May 2018, Mr David arranged for the bankruptcy notice to be couriered by FedEx to Mr Cohen at the China address. David Legal prepared a letter serving the bankruptcy notice on Mr Cohen and provided it to FedEx for service upon Mr Cohen at the China address. The letter enclosed by way of service the bankruptcy notice and the District Court judgment/order, and stated on its face "served by FedEx". The letter on its face is clearly addressed to Mr Cohen at the China address.
Service by FedEx was unsuccessful. The tracking record provided by FedEx shows that the letter was couriered from Fairfield, Sydney on 2 May 2018, that it arrived at the FedEx Destination Facility at Huizhou, China on 3 May 2018, and was then placed on FedEx's vehicle for delivery in Huizhou at "14:44" the same day, but that there was a delivery exception between "17:00 and 17:10" for the stated reason "incorrect address". The tracking record does not specifically state on its face the China address. It does identify the local FedEx facility as “Huizhou, China”, and the general area within which the “incorrect address” was located at Huizhou, China (if the China address had been a physically locatable address) at both 17:00 and 17:10 hours on 3 May 2018. According to the tracking record, the letter/package was received back at the local FedEx facility in Huizhou at "22:09" on Thursday, 3 May 2018.
Service of the bankruptcy notice on the Bossley Park address
On 15 May 2018, David Legal instructed process servers to attend to service upon Mr Cohen at the Bossley Park address. In the cover email the process server was advised:
We advise that Mr Cohen is currently overseas and will not be at the Bossley Park address. We understand that his family currently reside in the said address.
David Legal instructed the process server to leave the attached documents at the doorstep of the Bossley Park address should the occupiers of the property not accept service of them. The attached documents comprised letter from David Legal dated 15 May 2018, stating on its face Mr Cohen's name, the Bossley Park address, and delivery "by process server", and enclosed by way of service the bankruptcy notice and attached judgment/order. As I have said above at [4], on 19 May 2018, at 1.40 pm, the process server personally placed the letter, bankruptcy notice and judgment in a sealed envelope addressed to Mr Cohen, and affixed the envelope to the front door of the Bossley Park address.
The creditor's petition was lodged on 13 June 2018, relying on the act of bankruptcy I have referred to at [2] above. There is now no issue with service of the creditor’s petition, which was effected on 20 June 2018.
Proceeding before me
On 19 July 2018, the matter first came before me on an application by David Legal for substituted service of documents required to be served in accordance with r.4.05 of the Federal Circuit Court (Bankruptcy) Rules 2016. On return of that application Mr Cohen’s solicitors, Paramonte Legal, consented to orders and accepted service. Mr Wiggins, solicitor, appeared for Mr Cohen, and Mr Maroya of counsel appeared for David Legal. By consent, I made orders as follows:
1. GRANTS leave to the First and Second Applicants, pursuant to sub-s.309(2) of the Bankruptcy Act 1966 (Cth) to serve the documents required to be served in accordance with r.4.05 of the Federal Circuit Court (Bankruptcy) Rules 2016, together with a copy of these orders (the Documents) upon the Respondent, being a person outside the jurisdiction of the Commonwealth of Australia.
2. ORDERS that the Documents (excluding a copy of these orders) be served upon the Respondent by way of further substituted service by scanning and sending by email to “George Hadchiti” at [email protected].
3. DIRECTS that the proceedings be listed for further directions on Monday, 6 August 2018 in the Registrar’s bankruptcy list.
4. DISMISSES the Applicant’s Interim Application filed on 12 July 2018.
Mr Cohen subsequently filed a notice stating grounds of opposition to the creditor's petition. Pursuant to orders made 14 September 2018 the matter came before me for hearing on 18 October 2018 on the express understanding of counsel for David Legal and the Court that the notice of opposition grounds were as stated in the document filed 17 August 2018, and that the evidence was that filed as at 14 September 2018.
Evidence as to Mr Cohen’s last known address
Review application and the September 2017 affidavit
On its face the application for review stated that the review applicant’s (Mr Cohen’s) address was the Bossley Park address, although, as I have noted (see above at [11]), ground 3 of the review was that Mr Cohen does not reside at that address. The review application was signed by Mr Cohen’s lawyer, who continues to be his lawyer in this proceeding.
In the September 2017 affidavit relied upon in support of the review application, after the prefatory identification of Mr Cohen, the China address and Mr Cohen’s nominated occupation (see above at [12]), Mr Cohen deposed in part as follows:
2. I currently reside in China on a fulltime basis and have been since 22 April 2015.
3. The address of [the Bossley Park address] is my former matrimonial address. My son Joshua and my ex-wife Vony still reside at Bossley Park.
4. I have not resided at that address since leaving Australia on about 22 April 2015.
Mr Cohen annexed to the September 2017 affidavit some photocopied pages of an Australian passport in his name which showed passport control entry and exit stamps from China evidencing 16 entries into China and 17 exits from China for the period 22 September 2015 to 30 August 2017. He did not annex a complete copy of his passport.
The Parramatta proceeding and Mr Cohen’s verifying affidavit
On 20 March 2018 Mr David received by email a copy of the statement of claim filed in the Parramatta proceeding (filed 29 December 2017) which included Mr Cohen's affidavit verifying the claim (sworn on 5 September 2017): see above at [18]. In the verifying affidavit the China address was set out in the prefatory identifying details of the affiant. The party details set out in the claim, however, specified Mr Cohen’s address as care of his current solicitors at Parramatta. Mr David says that the Parramatta proceeding was brought to his attention by a third party to the proceeding who was served with a subpoena to produce documents.
The Sydney proceeding and the evidence of Mr Cohen’s address
Mr Cohen's solicitor, Mr Hadchiti, swore an affidavit in the Sydney proceeding on 2 July 2018 deposing that he made an administrative error and oversight in stating Mr Cohen's address incorrectly in the review application. Mr Hadchiti stated that when preparing the review application he inserted Mr Cohen's address as set out in the costs assessment application (the Bossley Park address) instead of “turning my mind to the client's actual current address”. Mr Hadchiti did not state what that “…client's actual current address” was, nor how long it had been Mr Cohen’s actual current address.
The party details in the summons initiating the Sydney proceeding state that Mr Cohen's address is the China address. The summons was served on David Legal by express post under cover of letter from Paramonte Legal dated 17 April 2018.
Consideration of Mr Cohen’s September 2017 affidavits
In seeking to provide proof that his last known address is not the Bossley Park address Mr Cohen relies on his two affidavits sworn 5 September 2017, both of which set out the China address in their prefatory identifying wording: the September 2017 affidavit in support of the review application (see above at [12] and [35]), and his affidavit verifying the statement of claim in the Parramatta proceeding (see above at [18] and [37]), as well as the party details set out in the Sydney proceeding and his lawyer’s explanation of administrative error.
I note, however, that whilst both of Mr Cohen’s affidavits sworn 5 September 2017 set out the China address in the affiant’s details, in neither affidavit does Mr Cohen attest as to what relationship (if any) he has with the China address, that is, whether it is a residential address, a business address, or some other address pursuant to which he can be contacted, or otherwise, nor does he positively attest to any relationship with any other address than the Bossley Park address. In the September 2017 affidavit Mr Cohen states that the Bossley Park address is his “former matrimonial address”, and that he has “not resided at that address since leaving Australia on or about 22 April 2015”. The verifying affidavit does no more than verify the claim, as required. Mr Cohen’s lawyer says no more than what his instructions provide.
Mr Cohen’s August 2018 affidavit
Mr Cohen also relies on an affidavit sworn by him on 18 August 2018 in this proceeding, witnessed at Huizhou City, China. The affidavit is in the following terms (the text in [3] in square brackets was admitted subject to weight, and [8] was received as submission only. Mr Kirby subsequently submitted that [9] was simply legal submission and should be accorded little weight. I agree.):
I, Robin Cohen of No 4252 Room B Building No 25F, Dong Hu Garden No 8 District, Hui Zhou City, 516008, Guangdong Province, China, make oath and say:
1. I am the Respondent in these proceedings.
2. I currently reside in China on a fulltime basis and have been since 22 April 2015.
3. The address of 142 Bossley Road, Bossley Park NSW 2176 ('Bossley Park') is my [former] matrimonial address. My son Joshua and [estranged] Vony still reside at Bossley Park.
4. I have not resided at that address since leaving Australia on or about 22 April 2015.
5. The last time I was in Australia was between on or about 31 August 2017 to 6 September 2017. I have not returned to Australia since 6 September 2017.
6. Annexed hereto and marked 'A' is a copy of my passport and all relevant pages showing my exit and entry into China.
7. Annexed hereto and marked 'B' is a copy of an Affidavit which I swore on 5 September 2017 in the Supreme Court Costs Assessment Review proceedings against the Applicant.
8. The Applicant has been aware through my affidavit sworn on 5 September 2017 that I did not reside at 142 Bossley Road, Bossley Park NSW 2176.
9. I have never been served with the alleged Bankruptcy Notice as alleged by the Applicant.
Only a few pages of Mr Cohen’s Australian passport were annexed to the September 2017 affidavit (see above at [36]). They establish no more than the facts of Mr Cohen’s entries into and exits from China in the period September 2015 to August 2017. Those same pages were also annexed to his affidavit sworn on 18 August 2018. Mr Cohen did not take the opportunity to update the evidence of his travel movements.
A copy of the international movement records held by the Department of Home Affairs in relation to Mr Cohen for the period 1 January 2015 to 13 September 2018 reveals that in that period Mr Cohen entered Australia 7 times, the first arriving on 25 January 2015, and the most recent arriving on 31 August 2017, and that he last departed Australia on 9 September 2017. The movement records do not show any subsequent re-entries into Australia by Mr Cohen. As at 27 September 2018 Mr Cohen has not returned to Australia. He remains an Australian citizen.
ASIC records
In asserting that service of the bankruptcy notice has been effected at the last known address of Mr Cohen by service at the Bossley Park address, David Legal rely on Mr Cohen’s familial relationships with that address – as the residence of his son and “Vony” – as attested to in Mr Cohen’s affidavits, on the decision of the review panel and Mr Slater’s statutory declaration as to service (see at [15] above), on land title and property sales records (see immediately below), and on FedEx’s unsuccessful attempt to serve Mr Cohen at the China address and the FedEx tracking record evidencing that the China address is an “incorrect address” (see above at [27] and [28]).
Land title search records of the Bossley Park property current as at 27 July 2018 record that “Vony Jovita Yalda-Kisso” is the registered proprietor of the property, and has been the holder of the title since at least 5 December 2012. The property sales information provider RP Data Pty Ltd’s records current as at 20 August 2018 show that Mr Cohen is the phone contact for the property.
David Legal also rely on an Australian Securities and Investment Commission (ASIC) personal name extract extracted as at 10 July 2018. That extract identifies that Mr Cohen is a current director of 3 companies, a secretary of 2 of those companies, and a shareholder of 1 of them. In each role his address is stated in the ASIC records to be the Bossley Park address. Those companies are Buy Direct Deals Pty Limited, Retail Borders Pty Limited, and Wearnes International Holdings Pty Limited.
Principles governing the validity of a bankruptcy notice
Following the introduction of reg.16.01 of the Bankruptcy Regulations, it is no longer a requirement that bankruptcy notices be served personally unless an order for substituted service is made. Relevantly, reg.16.01(1)(c) provides that service may be effected by leaving the bankruptcy notice (including the judgment/order) in an envelope or similar packaging marked with the person’s name at the last known address of the person: see above at [6]. Reg.16.01(2) deems receipt or service by the acts permitted by reg.16.01(1) “in the absence of proof to the contrary”.
The meaning of the phrase “last known address” for the purposes of reg.16.01(1)(c) has been considered in a number of cases. Judge Altobelli in this Court summarised the principles in Macquarie Leasing Pty Limited v Culleton [2014] FCCA 1714 at [18] as follows (cases and citations omitted):
(a)it does not matter whether the debtor actually resides at the particular address or not;
(b)the expression “last known address” does not expressly refer to the debtor’s residence or place of abode;
(c)the expression refers to the address that has been made known by the debtor to the world at large at the time closest to the date in question;
(d)a business address can be a debtor’s last known address;
(e)a debtor’s last known address may be the address with which he had such a degree of connection with the premises that they may properly be described as his last known address;
(f)a debtor cannot have two or more last known addresses within the meaning of the regulations;
(g)the last known address does not necessarily have to be a residential address, but may be a business address, including a business address which is not occupied by the debtor personally pursuant to some legal or equitable entitlement;
(h)the regulation is to be construed in light of the fact that the purpose of the rule is that Court process should be brought to the person’s attention;
(i)the question of what address has been made known by the debtor is to be determined objectively on all the facts of the case. In some instances it may be information that has been supplied to the world at large. In others it may be the most recent address supplied to the creditor;
(j)ordinarily, a creditor is under an obligation to take steps to ascertain the debtor’s most recent address as made known by him or her in readily accessible public records.
See also Civic Video Pty Limited v Warburton (2013) 216 FCR 61 [2013] FCA 934, especially at [74]–[78]; and Skalkos v T&S Recoveries Pty Limited [2004] FCAFC 321; (2004) 141 FCR 107 at [32]–[37].
The principles discussed in Macquarie Leasing, Civic Video and Skalkos establish that the last known address must be a real address. The word “left” in the phrase “left, delivered or transmitted” in sub‑reg.16.01(2)(b) refers back to the phrase “left…at the last known address” in sub‑reg.16.01(1)(c). By reference to the context apparent in reg.16.01(1)(c) the address must be a place at which it is physically possible to leave a tangible object in the form of an envelope or similar packaging marked with the person’s name. That place will not necessarily be where the debtor actually resides.
Consideration
Mr Notley, appearing for Mr Cohen, invites this Court to find that at least as at 25 September 2017, when the firm was served with the review application and the September 2017 affidavit, David Legal was aware that the Bossley Park address was not Mr Cohen's last known address, and that in his August 2018 affidavit Mr Cohen has attested to not being served with the bankruptcy notice. Thus Mr Notley says that there is proof to the contrary to David Legal’s claim that the Bossley Park address is Mr Cohen’s last known address: reg.16.01(2)(b) operates to displace the presumption in reg.16.01(1)(c), and the bankruptcy notice has not been served as required.
Mr Cohen’s connection with the Bossley Park address
Mr Cohen’s sworn evidence establishes that the Bossley Park address:
(a)is the address at which Mr Cohen resided until about 22 April 2015;
(b)is Mr Cohen’s “former” matrimonial address;
(c)is where Mr Cohen’s son, Joshua, “still” reside(s), and I infer, has resided since before 22 April 2015;
(d)is where Mr Cohen’s variously described “ex-wife” and “estranged” wife Vony resides, and I infer, has resided since before April 2015.
In the September 2017 affidavit Mr Cohen describes “Vony” as his “ex‑wife”. In his 18 August 2018 affidavit Mr Cohen refers to her as “estranged”. These are self-reports from Mr Cohen, and I do not give them great weight. The statement that Mr Cohen lived at the Bossley Park address made by the female claiming to Mr Cohen’s wife on accepting service of the bill of costs and application for assessment from Mr Slater in February 2017 (see above at [15] and [36]) is in a similar category (and is subject to my ruling under s.136, Evidence Act 1995). There is no objective evidence before me on which I can be satisfied as to the current status of “Vony” and Mr Cohen’s relationship. The evidence is silent on whether or not the residents of the Bossley Park address communicate with Mr Cohen.
Mr Cohen has not returned to Australia since (he says) 6 September 2017, noting that the Department’s international movement records reveal that he last departed from Australia on 9 September 2017. According to Mr Cohen’s August 2018 affidavit, the annexed copy pages of his passport showing his exit and entry into China record that he last left China on 30 August 2017. There is no subsequent entry stamp into China in evidence.
Mr Cohen’s affidavit evidence is that he does not currently reside at the Bossley Park address, and did not do so at the time of the disputed service of the bankruptcy notice. So much may be accepted. The authorities make clear, however, that the last known address of a person is not to be equated with current residency.
Mr Cohen has a connection with the Bossley Park address. It is where his son has resided, and continues to reside. It is his “former” marital address, and it is where his “ex-wife” or “estranged” Vony has resided, and continues to reside. Although the title to the property is in her name, Mr Cohen remains the current phone contact for the property.
The ASIC records as at July 2018 publicly state that as a director/secretary of several companies, Mr Cohen’s address is the Bossley Park address. Section 205D of the Corporations Act 2001 (Cth) provides that the address of officers to be maintained on the ASIC register must be the person’s usual residential address (unless the person is entitled to have an alternative address substituted, in circumstances not relevant to the present). Pursuant to s.1274B of that Act Mr Cohen’s address on the ASIC records is prima facie “evidence of the matters stated in so much of the writing as sets out what purports to be information obtained by ASIC” and thus that the Bossley Park address is presumed to be his usual residential address. For Mr Cohen to rebut the presumption in s.1274B(2), he would have to accept that he has put himself and his companies in breach of s.205D by not providing his actual residential address to ASIC.
Whilst the extract of the ASIC records postdates the service of the bankruptcy notice by nearly 2 months, from Mr Cohen’s evidence that he resided at the Bossley Park address until April 2015 it is reasonable to infer, and I conclude, that the ASIC records are a continuing public statement by Mr Cohen of his address for the purpose of public communication with him as at 19 May 2018, and as at the time closest to that date.
Mr Cohen’s connection with the China address
The only documents in which another address to the Bossley Park address is specified are in documents prepared for legal proceedings to which Mr David or David Legal are another party. The first time that the China address is referred to is in Mr Cohen’s affidavits sworn 5 September 2017, some 8 months before the claimed service.
Mr Cohen’s August 2018 affidavit is carefully worded. I observe that it was affirmed at a point later in time than the printout of the ASIC records. At [2], he deposes that he currently resides in China on a full‑time basis, and have been [sic] since 22 April 2015. However, the pages of his passport, on his evidence, being “all relevant pages showing my exit and entry into China”, contain no stamp indicating any entry into China subsequent to his exit from China on 30 August 2017. Thus, it does not necessarily follow from his “fulltime” residency claim that he has been present in China at all times since April 2015. On the other hand, the jurat indicates that the affidavit was witnessed by a person at Huizhou City, China, and the prefatory wording identifying the affiant is that Mr Cohen is stated to be “of” the China address. Whilst the affidavit is not sworn in accordance with the Oaths Act 1990 (NSW), no point was taken before me when I drew the parties’ attention to that matter.
I am troubled, however, by the lack of clear statement by Mr Cohen under oath of his travel movements, and his location(s) since at least August 2017. Mr Cohen does not say in any of his affidavits what the China address is (business, residential, postal collection centre, or otherwise), or what role it plays in his life, or even if it be a physical location. There is nothing in the evidence relied on by Mr Cohen to give content to the bald statement of his “fulltime” residency in China.
FedEx unsuccessfully attempted to locate the China address in order to deliver the bankruptcy notice to Mr Cohen at that address (see above at [27] and [28]). From Mr David’s evidence, and the FedEx tracking record it is reasonable to infer, and I accept, that the address Mr David gave to FedEx was the China address, and that FedEx could not locate that purported address because it was an “incorrect address”. There are a number of reasons why the address might be “incorrect”.
Mr Cohen’s counsel, Mr Notley, submits that the FedEx tracking record does not disprove that the China address is Mr Cohen’s last known address. Mr Notley submits that the following evidence should lead the Court to find that Mr Cohen’s last known address is the China address (and not the Bossley Park address):
(a)the China address is stated on 3 affidavits of Mr Cohen;
(b)the China address is stated by Mr Cohen’s solicitor, Mr George Hadchiti, as Mr Cohen’s address on the statement of claim and verifying affidavit in the Parramatta proceeding, and on the summons in the Sydney proceeding;
(c)the identification of the review applicant’s (Mr Cohen’s) address as the Bossley Park address in the review application filed in the Supreme Court was an oversight due to an administrative error by Mr Hadchiti, and was incorrect.
None of the matters Mr Notley points to do rise any higher than Mr Cohen’s statement in the prefatory words in his August 2018 affidavit to be “of” the China address, and statements made by Mr Cohen’s solicitor under instructions. Against these claims the FedEx tracking record shows that the China address was not able to be located by a courier company in the business of delivering packages to physically locatable places.
Mr Cohen, whom I would expect to have knowledge of the China address, and to be able to provide a reasonable explanation why FedEx could not or did not deliver the package, or was mistaken in not locating the China address, has chosen not to put on any evidence to explain the matter, or to provide any documentary substantiation of the location of the China address, and his relationship to it as or near in time to 19 May 2018. The evidence of his August 2018 affidavit rises no higher than a repetition of his claim made in September 2017 to be “of” the China address. The evidence that the China address is “incorrect” stands uncontradicted. It is reasonable to infer that the China address is not a physical location, if it exists at all.
As Tamberlin J pointed out in Drake v Stanton [1999] FCA 1635 at [5], cited with approval and followed by Jacobson J in Civic Video Pty at [80], that Mr Cohen has established that he has not been in Australia since about 9 September 2017, and says that he does not reside at the Bossley Park address “does not matter” because the relevant expression is “the last known address of the person”. That is not the same thing as “where the person resides”.
Having regard to my conclusion that for the purposes of reg.16.01(c) the last known address must be a physical place at which a tangible package or letter may be physically left, based on the ASIC public records that Mr Cohen has publicly claimed his usual residential address as the Bossley Park address as at 10 July 2018, that Mr Cohen admits to the Bossley Park address being his residence up until 2015, that Mr Cohen’s son and wife (be she “estranged” or “ex”) continue to reside at the Bossley Park address, and that Mr Cohen remains the contact person with a number for the property, I conclude that Mr Cohen has such a connection with the Bossley Park address that the last known address of Mr Cohen as at 19 May 2018 is the Bossley Park address.
Proof to the contrary
In Skalkos the Full Court of the Federal Court was concerned with reg.16.01(1)(a), which permits a document (relevantly a bankruptcy notice) to be served if sent by post, or by a courier service, to a person at [their] last known address. The Court at [16] observed that reg.16.01(2) is concerned to provide a date certain from which periods of time commence to run. Referring to and considering Fancourt v Mercantile Credits Limited (1983) 154 CLR 87 and a line of English authorities there discussed by the High Court, and subsequent authorities, the Court in Skalkos considered and rejected a construction that sub-regulation (2) only enabled a person to whom a document has been sent in accordance with reg.16.01(1)(a) to prove that it was delivered on a date other than that which it would have been delivered in the due course of post.
In Fancourt the High Court considered s.39(1) of the Acts Interpretation Act 1954 (Qld), which deemed giving, sending, serving or delivery by properly addressing, prepaying and posting a document to be effected at the time when the document would be delivered in the ordinary course of the post “unless the contrary is proved”. There the relevant notices were not returned undelivered and there was no other circumstance which suggested that they did not reach their destination. After reviewing a line of English cases, at 96-97 the High Court said:
… The consequence is that where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service … it is unnecessary to pursue these [English] decisions here save to remark that they are all cases in which delivery was disproved …
and continued:
As the present case shows, delivery may be different from receipt by the intended recipient and, provided that delivery is not disproved, the fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time at which it would have taken place in the ordinary course of the post. There is here no evidence of non-delivery.
In Skalkos, the Full Court concluded at [25]-[26]:
[25] It is not necessary in the present case, any more than it was in Fancourt, to decide whether the Rossi [English] line of cases should be followed. If, on the proper construction of regulation 16.01(2) the words “proved to the contrary” permit proof that the document was not delivered, there is no such proof in the present case. It is clear from Fancourt that proof of non-receipt as opposed to non-delivery is not permitted. If, on the other hand, those words only permit proof that the document was delivered on a date other than that on which it would have been delivered in the due course of post, there is no such proof.
[26] Thus, on either view of regulation 16.01(2), the primary judge correctly said there was no point in the appellant filing an affidavit of non-receipt.
Mr Notley for Mr Cohen submits that the last known address is merely a presumption that may be overcome by proof to the contrary, and that in the present case there is proof to the contrary: Mr Cohen’s statements as to his residency in China, the references to the China address in Mr Cohen’s affidavits, that the Bossley Park address is his former matrimonial home, and that Mr Cohen deposes that he has not been served with the bankruptcy notice.
Mr Kirby for David Legal submits that the phrase “absence of proof to the contrary” in reg.16.01(2) relates to the concept of service in reg.16.01(1), that is, that the document has been left at the last known address. Regulation 16.01(2) should be read as contrary to the matters specified in reg.16.01(1), and to do otherwise would do great violence to the legislative intent.
The legislative intent, I accept, is that considered by Jacobson J in Civic Video at [70], namely, that the phrase “last known address” is to be construed in the light of the purpose that the Court process should be brought to the person’s attention. Since the purpose of the rule is that the bankruptcy notice should be brought to the debtor’s attention, ordinarily the creditor is under an obligation to take steps to ascertain the debtor’s most recent address as made known by him or her in readily accessible public records; it would be wrong to confine the expression, in all instances, to the last address made known to the creditor: see Civic Video at [77]-[78].
I accept that what the Full Court said in Skalkos to which I refer above is obiter, and that the High Court in Fancourt was concerned with proof of delivery and the contrary proof of non-delivery. In my view, reg.16.01 exists to facilitate the establishment of a specific date by which time to pay a debt identified in a bankruptcy notice commences to run. Sub-regulation 16.01(1) sets out a number of ways in which a document may be delivered or communicated, only one of which (subparagraph (1)(d)) requires that the debtor personally receives the document.
Sub-regulation 16.01(2)(b) specifically uses the word “when”, indicating a temporal element. It refers to the document being “left at”, which event enlivens the deemed receipt. The sub-paragraph does not require that the document be acknowledged as received by the debtor, nor that the document be understood by the debtor. Rather, “is taken to have been received by, or served on … when … left at” refers to the consequence of the act of leaving, delivering or transmitting the thing (document) by the actor, the end point of which is the conclusion of the act of leaving, delivering or transmitting the article at a place, on a date.
The matter is to be determined objectively inter alia, see Civic Video at [76]. As the cases reviewed by the Full Court in Skalkos at [20]-[22] (see particularly at [22]) suggest, statements by the debtor that they have not received the document “would have to be very carefully construed, and the mere claim of non-receipt would be likely to be insufficient”.
In the present case, delivery to the Bossley Park address has been established. In his August 2018 affidavit Mr Cohen does not attest that he did not receive the bankruptcy notice (or that it was not brought to his attention), rather, he says that he was not served with the notice (see at [42] above), a subtle difference, and a statement that I read as a legal submission. I do not accept that submission as proof of non-delivery to the Bossley Park address, nor as establishing that the bankruptcy notice was not brought to Mr Cohen’s attention.
I have accepted that Mr Cohen has a real and continuing connection with the Bossley Park address (see above at [53]-[59]). Although Mr Cohen attests that he does not reside at the Bossley Park address, his public statements in ASIC records stand as notice to the world that the Bossley Park address continues to be his usual residential address up to 10 July 2018.
I do not accept that the characterisation of Mr Cohen as having an “address” as the China address by the address identification in his 3 affidavits constitutes proof to the contrary. In light of the fact that FedEx’s attempt to deliver a package to the China address was unsuccessful because the address was an “incorrect” address, and given that Mr Cohen has not given any explanation why that failure to locate the China address should not be accepted, I am not persuaded that Mr Cohen’s claims to be “of” the China address in affidavits filed in proceedings in which Mr David or David Legal is another party “prove to the contrary”. In my view they do not.
I am persuaded that the Bossley Park address is Mr Cohen’s last-known address for the purposes of service of the bankruptcy notice under reg.16.01(1), and that Mr Cohen has not evidenced proof to the contrary.
It follows that I have concluded that Mr Cohen was served with the bankruptcy notice on 19 May 2018 in accordance with reg.16.01(1)(c) and that there is an absence of proof to the contrary within the meaning of reg.16.01(2)(b). It follows that I will make the sequestration order.
Conclusion
The ground of opposition is not made out. I am satisfied that David Legal has otherwise complied with the requirements entitling the applicants to a sequestration order. Specifically:
(1) there has been a qualifying act of bankruptcy, namely Mr Cohen’s failure to comply with the bankruptcy notice on or before 9 June 2018;
(2) the evidence of service of the bankruptcy notice given by Mr Veitch in his affidavit sworn 24 May 2018 is accepted, and not challenged otherwise than by the ground which I have already addressed;
(3) the creditor’s petition dated and filed 13 June 2018 was presented and served on 20 July 2018, and no issue is taken by the debtor with any aspect of that petition;
(4) the relevant facts contained in the creditor’s petition have been verified by the unchallenged evidence of Mr Fred David in his affidavit sworn 17 October 2018;
(5) service of the creditor’s petition and related documentation, including the consent to act by the trustee have been verified by the affidavits of Mr David sworn 20 August 2018 (16 paragraphs) at [11] and [12];
(6)a consent to act by the trustee has been filed under s.156A of the Bankruptcy Act, and I note there is no challenge to the consent to act as trustee; and
(7) the affidavits of final search deposing as to the final debt were sworn on 17 October 2018, the date before the hearing and are unchallenged.
In the circumstances, I am satisfied that a sequestration order should be made and that costs should follow the event. I will make orders accordingly.
I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of Judge Baird
Associate:
Date: 18 January 2019
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