In the matter of Healthy Industries Pty Ltd

[2018] NSWSC 1172

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	In the matter of Healthy Industries Pty Ltd [2018] NSWSC 1172
Hearing dates:	23 July 2018
Date of orders:	31 July 2018
Decision date:	31 July 2018
Jurisdiction:	Equity
Before:	Ward CJ in Eq
Decision:	1. The separate question as to whether the plaintiff’s application under s 459G to set aside the statutory demand issued by the defendant was served within time should be answered “no”. 2. Costs of the determination of the separate question are the defendant’s costs in the cause. 3. List the matter for further directions before Black J at 10 am on 6 August 2018.
Catchwords:	CORPORATIONS – application under s 459G of the Corporations Act 2001 (Cth) to set aside creditor’s statutory demand – where company alleges non-receipt of statutory demand – separate question as to whether application to set aside statutory demand was served within the requisite 21 day period
Legislation Cited:	Acts Interpretation Act 1901 (Cth), s 29 Civil Procedure Act 2005 (NSW), s 56 Corporations Act 2001 (Cth), ss 5F, 109X, 459G Evidence Act 1995 (NSW), s 160 Justice Legislation Amendment Act 2018 (NSW) Strata Schemes Management Act 2015 (NSW), s 8
Cases Cited:	David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43 Deputy Commissioner of Taxation v Meredith [2007 ] NSWCA 354; (2007) 229 FLR 243 Dwyer v Canon Australia Pty Ltd [2007] SASC 100 Gabriel Hotels Pty Ltd v Corlita Pty Ltd [2010] NSWSC 826 Graywinter Properties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452; (1996) 21 ACSR 581 In the matter of Complete Investing Services Pty Ltd (in liq) [2018] NSWSC 1003 In the matter of Leasing Holdings Pty Ltd (formerly Charlie Lovett Pty Ltd) [2015] NSWSC 771 Mann v Goldstein [1968] 1 WLR 1091 Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216 Partners of Piper Alderman v Sharjade Pty Ltd [2011] NSWSC 6 Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 Re Ege Foods Australia Pty Ltd [2014] NSWSC 983 Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill (2007) 70 NSWLR 176; [2007] NSWSC 278 Sydney Constructions & Developments Pty Ltd v Reynolds Private Wealth Pty Ltd [2016] NSWSC 1104 Treadtel International Pty Ltd v Cocco [2016] NSWCA 360 Workers Compensation Nominal Insurer v Lozito-Strada Pty Ltd [2013] FCA 625
Category:	Procedural and other rulings
Parties:	Healthy Industries Pty Ltd (Plaintiff) The Owners - Strata Plan No 58208 (Defendant)
Representation:	Counsel: RW Killalea (Plaintiff) DF Elliott (Defendant)   Solicitors: Kazi & Associates (Plaintiff) Gillis Delaney Lawyers (Defendant)
File Number(s):	2018/00078069
Publication restriction:	Nil

Judgment

1. HER HONOUR: In this matter on 9 July 2018 Black J ordered that there be determined as a separate question a dispute as to whether the plaintiff’s application under s 459G of the Corporations Act2001 (Cth) to set aside a statutory demand issued by the defendant was served within the requisite 21 day period. The defendant maintains that the statutory demand was served on 12 February 2018; that the 21 day period expired on 5 March 2018; and hence that the Originating Process filed by the plaintiff on 9 March 2018 is out of time and should be dismissed with costs. The plaintiff argues that the evidence before me is sufficient to raise a doubt as to the date of “receipt” of the statutory demand so as to displace the statutory presumption of service on that date under s 160 of the Evidence Act 1995 (NSW). (I note that the plaintiff has raised a separate issue as to jurisdiction but accepted that this was not the subject of the separate question for determination and did not seek to press that issue on the hearing before me.)

Background

2. The defendant (The Owners – Strata Plan No 58208, to which I will refer as The Owners Corp) is, as its name indicates, an owners’ corporation. It issued a statutory demand on 6 February 2018 addressed to the plaintiff corporation (Healthy Industries Pty Limited, to which I will refer as the Company), claiming the amount of $58,314.44. The claimed debt comprised a judgment debt of $48,399.32 (following consent judgment entered in respect of certain Local Court proceedings) and outstanding levies and other fees payable in respect of the relevant strata plan.

3. Ms Sonitha Naicker, a personal assistant employed by Gillis Delaney Lawyers, the firm of solicitors acting for The Owners Corp, has given evidence on affidavit as to the steps taken by her in relation to the posting of the statutory demand to the registered address of the Company at the relevant time. She was not required for cross-examination.

4. In her affidavit sworn 11 April 2018, Ms Naicker deposes that on 6 February 2018 she placed a copy of the statutory demand, to which was attached an accompanying affidavit, “in an envelope bearing postage of $1.00” addressed to the registered office of the Company and that she sealed and posted the envelope in a post box on the corner of Castlereagh and Park Streets, Sydney (see at [2]). Annexed to her affidavit is a copy of the material that she deposes she posted under cover of a letter dated 6 February 2018. Together with the covering letter, that material comprises five A4 sized pieces of paper. It is accepted that the address shown on the letter and statutory demand was the correct address of the registered office of the Company at that time.

5. In a further affidavit sworn 18 July 2018, referring to the affidavit evidence of the directors of the Company filed in these proceedings (in which reference was made to a handwritten envelope received at the premises but the contents of which were unknown – see further below), Ms Naicker deposes that she did not handwrite the addressee on the envelope; rather, she folded the letter and placed it in an envelope “so it would read through the window” (see at [2]). Ms Naicker deposes that the envelope to which she referred in her earlier affidavit was a standard firm envelope. Annexed to her second affidavit is a standard firm envelope which she deposes is “identical to the envelope that was sent by ordinary pre-paid post” to the Company on 6 February 2018. The envelope attached to Ms Naicker’s affidavit has a clear window at the front and, at the top right hand of the envelope, it bears the imprint “POSTAGE PAID AUSTRALIA”. (At the left hand corner is the printed name and address of the firm.)

6. By affidavit sworn 18 July 2018, the solicitor with the conduct of the matter for The Owners Corp, Mr Michael Hayter, who signed the statutory demand and accompanying letter, deposes to the systems in place at his firm for the collection and distribution of mail (see [3]-[4]) and to certain enquiries he has made on the basis of which he deposes that none of he, Ms Naicker, Ms Kellie Van Munster (the solicitor who witnessed the affidavit accompanying the statutory demand) or the firm’s receptionist (Ms Shannon Peters) had received by return the envelope or documents referred to in Ms Naicker’s 11 April 2018 affidavit; and that there are no such returned documents on the files held by the firm (see [6]). Mr Hayter also annexes an extract from the website of Australia Post which sets out the regular delivery timetable within Australia of letters sent in terms of business days after posting. On the basis of that information, the regular delivery timetable within Australia between metropolitan areas of capital cities (here, the Sydney CBD) and country locations (here, Coledale, where the Company’s registered office at the relevant time was located) in the same state would be within three to four business days.

7. The directors of the Company (Mr Sergio Pineiro and his partner, Ms Melanie Kennett) have filed affidavits, each affirmed on 16 July 2018, in which they depose that they first saw a copy of the cover letter to the statutory demand on (or, in Ms Kennett’s case, about) 8 March 2018 ([3] of their respective affidavits). They depose to the fact that the registered address of the Company is their home address ([8] of their respective affidavits); that at the foot of the driveway to the house is a letterbox ([5] of their respective affidavits); and that when their three school aged children get off the bus after school they compete to collect the mail from the mailbox and bring it up to the house ([6] of their respective affidavits).

8. The directors both depose to having “partied” with Mr Pineiro’s cousins at the house on 4 March 2018 and to Ms Kennett having found a large envelope with Mr Pineiro’s name on it in pencil under the door that morning (which they were not later able to find when cleaning up the party mess and the contents of which they do not know) (see [8]-[13] of their respective affidavits). Ms Kennett also deposes to a conversation with a neighbour “in the next day or so”, in which the neighbour, when asked if he or she had dropped over some mail, said words to the effect “[we] have had some of your mail put aside and one of the boys might have brought it round” (see [14]).

9. On 8 March 2018, following the forwarding to Gillis Delaney by email of a copy of a notice of motion filed online by the Company seeking, among other things, the re-opening of the Local Court proceedings and the setting aside of the judgment entered against the Company in those proceedings, Gillis Delaney forwarded to Mr Pineiro by email a copy of the statutory demand (said to have been served upon the registered office of the Company “by ordinary prepaid post” by letter dated 6 February 2018).

10. The Company then filed its Originating Process in these proceedings on 9 March 2018 seeking to set aside the statutory demand; in support of which two affidavits of Mr Pineiro have been filed (on 12 March 2018 and 29 March 2018, respectively).

Plaintiff’s submissions

11. The Company has raised various matters by way of its contention that there is doubt as to whether service of the statutory demand was properly effected on 12 February 2018.

12. First, in written submissions it argues that the Court cannot be satisfied that the envelope was addressed correctly. It is not clear to me precisely the basis on which that submission is made. There is (as I noted earlier) no dispute that the address shown on the covering letter and on the statutory demand itself is the correct address of the registered office of the Company. It may be that this relates to the evidence of the directors as to the (now unable to be located) handwritten envelope found under the door of the premises on the morning of 4 March 2018 but, if so, such a submission cannot be sustained in light of the unchallenged evidence of Ms Naicker as to how the letter was addressed.

13. In oral submissions, after inspection of the original of the affidavits sworn by Ms Naicker, there was a submission made that the address block on the letter was set too far to the left to permit the address to be seen through the window of the standard firm envelope (a conclusion apparently drawn by the Company’s solicitor from lining the letter up against the envelope – not by folding the copy documents and placing them in the envelope). It was noted that Ms Naicker did not depose, in terms, that the address was visible when the envelope was sealed (nor, as it was suggested could have been done, had a photograph been taken of the envelope containing the documents as at the time it was posted).

14. Second, the Company argues that there is an inconsistency that emerges from the two affidavits sworn by Ms Naicker, namely as to whether a $1.00 postage stamp was affixed to the envelope or whether the envelope was “pre-paid”.

15. As to the former, it is submitted that there is a doubt as to whether the proper amount of postage was affixed to the letter. The Australia Post website extract referred to above, which sets out the postage for regular delivery of a “small letter” as $1.00, contains a definition of small letter by size, thickness and weight (no larger than 130mm x 240mm; no thicker than 5mm; and no heavier than 250g). It was suggested that, depending on how the documents placed in the envelope were folded, the envelope might have been thicker than 5mm, in which case postage of $1.00 would not have been sufficient. (See T 12.9-43, where the Company’s solicitor suggested that “If it’s a slim envelope and you’ve got a full page, it’s often the case that you fold three times. It’s not just a half fold, it can easily be, to fit in a given envelope, be three times and three times with two bends, one going one way and one the other, fattens the document. They don’t just fall flat as if they’ve been ironed. So it may be that the document folded did exceed 5 mill in which case, if we take the postage to be a dollar, it's not enough”.)

16. As to the latter, after the luncheon adjournment an application was made for leave for the Company in effect to re-open its case and to adduce evidence orally from Mr Pineiro as to a conversation he had had over the lunch hour with someone at the NSW Parliament House post office as to the administrative procedures for franking and postage of items in a pre-paid envelope.

17. In essence, as I understand it, the Company wished to adduce evidence of a conversation to the effect that pre-paid postal items cannot properly be placed in a mailbox but must first be presented to a post office to be “put through” an account that the sender has (i.e., for franking) (see T 16.3-10; T 18.41-44). When I commented on the apparent hearsay nature of the proposed evidence, an application was then made for the hearing of the separate question to be adjourned in order for there to be evidence adduced from someone from Australia Post as to what happens when postage paid envelopes are mailed through the postal system (see T 19.20-32).

18. The Owners Corp objected to the grant of leave to adduce further evidence on the basis that Black J had made an order for the filing of evidence in relation to the hearing before me and had ordered (see order 2 of the orders made on 9 July 2018) that no further evidence after that date could be relied upon without leave.

Ruling on application for leave to adduce further evidence

19. I was not prepared to accede to the application for leave to adduce hearsay evidence of the kind foreshadowed or to adjourn part-heard to permit evidence to be adduced from someone at Australia Post as to the processes there applicable to “postage paid” mail. There was no satisfactory explanation as to why evidence of that kind could not have been served within the timetable set by Black J (it simply being asserted that it had been a very short time frame within which to respond to the defendant’s evidence – see T 19.21 – and that no “research” had been done on that point which had only just been ascertained over the lunch break – see T 15.11); and there had been no challenge to the affidavit evidence of Ms Naicker in order to give her an opportunity to answer the postulated inconsistency as between her first and second affidavits. (The Owners Corp does not concede any such inconsistency, on the basis that it says something with a $1 stamp on it is pre-paid.)

20. It can readily be surmised that, had such leave been granted, The Owners Corp in turn may have sought leave to adduce evidence in response (perhaps by way of further evidence as to the particular postage arrangements in place at Gillis Delaney for the postage of pre-paid envelopes or further evidence as to the steps Ms Naicker took in relation to the item in question).

21. The submission for the Company that leave should be granted because this issue was “critical” (see T 19.23; 19.32) assumes, in effect, that the further evidence would establish the existence of the doubt said to be raised on the material already before the Court. I accept that failure to file an application to set aside a statutory demand within 21 days is a jurisdictional impediment to such an application (to use the language in GraywinterProperties Pty Ltd v Gas & Fuel Corporation Superannuation Fund [1996] FCA 822; (1996) 70 FCR 452; (1996) 21 ACSR 581, on which emphasis was placed in oral argument by the Company – see T 20.13-33 – though the so-called Graywinter principle itself relates to a different issue) but that does not of itself warrant an adjournment of the present application in order to permit the Company to adduce evidence that could have been obtained by reasonable diligence in the preparation of the matter for hearing in compliance with the timetable set by Black J.

22. There is no doubt that non-compliance with a statutory demand can give rise to draconian consequences (in particular, the presumption of insolvency) as can failure to bring an application to set it aside within the requisite time (in terms of an application for the winding up of the Company and the notification of such an application to ASIC) (as the Company here emphasised). The solicitor for the Company referred to Treadtel International Pty Ltd v Cocco [2016] NSWCA 360 in this regard – see T 15.37-47. However, the Company had its opportunity to make whatever enquiries it wished to make as to the issues on the present application well before the luncheon adjournment during the course of the hearing of the separate question.

23. I note in this regard that in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43, Gummow J (with whom Brennan CJ, Dawson, Gaudron and McHugh JJ agreed) emphasised (at 278) that s 459G is an “integral part of the particular scheme established by Pt 5.4”, having said earlier (at 270) in relation to Pt 5.4 as a whole that:

The provisions … constitute a legislative scheme for quick resolution of the issue of solvency and the determination of whether the company should be wound up without the interposition of disputes about debts, unless they are raised promptly.

24. The draconian consequences of failure to apply within time to set aside a statutory demand must thus be balanced against the recognition that the legislative scheme is one for the quick resolution of issues of solvency as well as the statutory mandate for the just, quick and cheap resolution of the real issues in dispute (see s 56 of the Civil Procedure Act 2005 (NSW)). Having regard to the above, I was not prepared to grant the application for an adjournment.

Other submissions by the Company

25. Apart from the submissions made by the Company as to there being a relevant doubt in relation to the evidence as to the posting of the statutory demand, the Company also made submissions to the effect that it is sufficient (to displace the statutory presumption of service of the statutory demand at the registered office) for doubt to be raised as to the question of “receipt” of the statutory demand at the registered address of the Company in Coledale – relying on the evidence of the directors in that regard. I consider those submissions in due course below.

26. Finally, I note that the Company’s written submissions extended to the argument that, by operation of s 5F of the Corporations Act and s 8(2) of the Strata Schemes Management Act 2015 (NSW), the Corporations Act does not apply to The Owners Corp. The Company referred to Treadtel International Pty Ltd v Cocco above (at [57] per Barrett AJA, with whom Gleeson and Leeming JJA agreed), where reference was made to the statement of Ungoed-Thomas J in Mann v Goldstein [1968] 1 WLR 1091 at 1098-9 to the effect that to invoke the winding up jurisdiction after it is clear that the debt is disputed on substantial grounds would be an abuse of process. As adverted to above, those submissions were not argued before me and no ruling was sought in relation thereto. Accordingly, I do not propose further to consider (or here to set out) those submissions.

Defendant’s submissions

27. The Owners Corp maintains that the critical issue on the present application is whether the evidence served by the Company is sufficient to raise a doubt about the presumption as to the date of receipt at the registered office of the statutory demand under s 160 of the Evidence Act. It is submitted that the evidence from Mr Pineiro and Ms Kennett to the effect that they had not seen a letter or envelope marked as being from Gillis Delaney before 8 March 2018 cannot, of itself, create a doubt for the purposes of s 160 of the Evidence Act.

27. The Owners Corp submits that the evidence of Ms Naicker establishes that the formal requirements for proof of service by post of the statutory demand have been met (referring to her evidence that it was sent “by ordinary pre-paid post” addressed to the Company’s registered office on 6 February 2018 and to the evidence of Mr Hayter that the documents were not received back at the offices of Gillis Delaney as returned to sender). Hence it is submitted for The Owners Corp that there is a presumption that the statutory demand was served on the fourth working day after it was posted.

28. (Pausing here, s 160(1) of the New South Wales Evidence Act was amended, with effect from 2 July 2018, by the Justice Legislation Amendment Act 2018 (NSW), replacing the word “fourth” with the word “seventh”. That amendment took effect, by proclamation, on 2 July 2018. This matter was heard on 23 July 2018. I note that I did not hear any argument on whether the amended or the unamended provision ought to be applied to the resolution of this separate question. However, as the outcome of the separate question is the same (whether the presumption applied is that the document was received four, or seven, working days after having been posted), I do not consider this question further, and, as outlined later in these reasons, I have made alternative findings on this point.)

29. The Owners Corp notes that the authorities draw a clear distinction between non-delivery and non-receipt of an item sent by post, referring to In the matter of Leasing Holdings Pty Ltd (formerly Charlie Lovett Pty Ltd) [2015] NSWSC 771, where Black J said at [32]:

…Service by post upon a company may be established where a letter is properly addressed, pre-paid, posted as a letter and sent to the Company’s registered office, for the purposes of s 29(1) of the Acts Interpretation Act, and the fact of non-receipt does not displace deemed delivery of the document, if delivery is not disproved: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 96: Dwyer v Canon Australia Pty Ltd above; Deputy Commissioner of Taxation v Contract Synergies Administration Pty Ltd [2011] FCA 743 at [7|, [10]. In this case, as in Deputy Commissioner of Taxation v Contract Synergies Administration Pty Ltd above, there is no evidence that the Demand was returned by Australia Post as undelivered. The evidence of the Company's accountant, Mr Pisani, that he personally did not receive the Demand until a later date, to which I refer below, does not prove non-delivery to the accounting firm that was the Company’s registered office. [my emphasis]

31. Reference is made by The Owners Corp to the statement of the relevant principles articulated in Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd [2018] FCA 466 by McKerracher J (at [2]):

On the basis of the authorities referred to below, the relevant principles in relation to delivery of a winding up notice by ordinary post are these:

(a)   proof of non-receipt by the recipient does not prove non-delivery: Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 (at 96-97); Re Rustic Homes Pty Ltd (1988) 49 SASR 41 (at 44); Dwyer v Canon Australia Pty Ltd [2007] SASC 100 per Debelle J (at [8]-[9|); and Deputy Commissioner of Taxation v Contract Synergies Administration Pty Ltd [2011] FCA 743 per Jacobson J (at [5]-[18]);

(b) the permissive or facilitative service provisions under s 109X(1)(a) of the Corporations Act will suffice to establish proper service in ordinary circumstances, but this provision is also to be read, in an appropriate case, against the provisions in s 29 of the Acts Interpretation Act 1901 (Cth) and s 160 of the Evidence Act 1995 (Cth), which do, in essence, recognise the possibility that delivery may not have been effected by ordinary prepaid post. Section 29 of the Acts Interpretation Act and s 160 of the Evidence Act respectively and relevantly provide:

…

See also Deputy Commissioner of Taxation v Starpicket Pty Ltd (2012) 212 FCR 578 per Greenwood J (at |62]-|74]);

(c)   proof of non-receipt at a place, as distinct from non-receipt by a person, is likely to prove non-delivery at that place: Scope Data Systems Pty Ltd v Goman (2007) 70 NSWLR 176 per White J (at [49]); and

(d)   while mere denial of non-receipt [scil receipt] by the addressee would scarcely, if ever, suffice to prove ‘non-delivery’, evidence of non-receipt at a place by an appropriate occupant, depending on the cogency of the evidence, may be sufficient to create a doubt for the purposes of s 160 of the Evidence Act. While such evidence needs to be sufficient to create a ‘doubt’, it does not need to be proof to the civil standard of fact finding at trial as to actual non-delivery. A ‘doubt’ ought not to be assimilated with proof or demonstration: Deputy Commissioner of Taxation v Manta’s on the Beach Pty Ltd (2012) 88 ATR 193 per Logan J (at [12]).

32. The Owners Corp refers to Deputy Commissioner of Taxation v Meredith [2007 ] NSWCA 354; (2007) 229 FLR 243, where Basten JA at [76] noted that a provision corresponding to s 109X of the Corporations Act imposed responsibility on the intended recipient for ensuring that the document does not go astray after delivery to the postal address.

33. Reference is made to Partners of Piper Alderman v Sharjade Pty Ltd [2011] NSWSC 6, where a director of the debtor company gave evidence that the statutory demand was never received. The evidence disclosed that the mailbox of the registered office of the company was a unit number for a block of apartments at Cremorne Point and the mailbox for the unit was adjacent to the public walkway in front of the home unit building. There was no evidence about the size of the box, what might cause it to overflow, and whether it had a lock on it. There, Barrett J stated (at [18]):

… A company’s registered office must be at some defined and readily accessible place consisting of, or being within, a building. The specification of the address of the registered office must be such as to accommodate the possibility recognised in s 109X(1)(a) of the Corporations Act that documents will be served by posting them to the registered office. Implicit in the statutory scheme, therefore, is an expectation that there will be in place at the registered office a system for the safe and secure reception of documents delivered by post.

34. At [19]-[20], his Honour said:

In the present case, the defendant company saw fit to locate its registered office at premises served by a mail box located outside the confines of the registered office itself and outside the confines of the relevant building. The mail box formed part of a collection of boxes apparently accessible to anyone passing by. This calls to mind yet again the observation of Davies AJA in Macrae v St Margaret’s Hospital [1999] NSWCA 381; (1999) 19 NSWCCR 1 that “anything might happen to business letters put into a letter box at the gate of the hospital”.

The present defendant chose as its registered office premises with mail delivery facilities prompting the like observation – that anything might happen to documents put into a letter box situated on the public walkway in front of the residential unit building and providing access to that building from the street.

35. The Owners Corp submits that the same may be said in the present case: namely, that the Company chose the mail delivery facilities of its registered office to be a letterbox situated on a public road in front of residential premises. The Owners Corp notes that there is no evidence before the Court about the size of the mailbox; what might cause it to overflow; and whether it had a lock on it.

36. It is submitted that in the absence of evidence that the letterbox was locked, it should be inferred that it had no lock and could be opened by anyone who decided to open it (as in Piper Alderman above at [11]). Pausing here, I would draw such an inference here, particularly having regard to the lack of any evidence that the school-aged children, while competing to collect the mail, did so while equipped with keys to unlock the letterbox.

37. The Owners Corp submits that the evidence served by the Company confirms that there was no system in place to ensure that documents once deposited into the letterbox did not go astray after they were delivered. It is noted that, on the evidence of the directors, the collection and distribution of documents served by post on the Company was left to the directors’ school aged children competing with each other and that the evidence does not address what the children did with the documents once brought to the house. It is also submitted that the fact that the directors allowed the collection of postal articles from the Company’s mailbox to be a game demonstrates that little care and attention was taken to ensure the safe and secure reception of documents delivered by post.

38. As to the large envelope (on which the addressee was handwritten), which the directors depose was found under the door on 8 March 2018 and later could not be found, The Owners Corp says (and I agree) that this cannot have been the envelope posted by Ms Naicker which contained the statutory demand (having regard to her evidence to which I have already referred).

39. It is submitted that the Company has failed to adduce any cogent evidence which would cause the presumption under s 160 of the Evidence Act to be displaced.

Determination

40. Section 109X(1)(a) of the Corporations Act provides that a document may be served on a company by leaving it at, or posting it to, the company’s registered office.

41. Section 29 of the Acts Interpretation Act 1901 (Cth) provides:

29    Meaning of service by post

(1)   Where an Act authorises or requires any document to be served by post, whether the expression “serve” or the expression “give” or “send” or any other expression is used, then the service shall 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.

(2) This section does not affect the operation of section 160 of the Evidence Act 1995.

42. Section 160 of the Evidence Act provides:

160    Postal articles

(1)   It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the seventh working day after having been posted.

…

(3)   In this section:

“working day” means a day that is not:

(a)    a Saturday or a Sunday, or

(b)    a public holiday or a bank holiday in the place to which the postal article was addressed.

(As already adverted to, prior to 2 July 2018, s 160(1) contained the word “fourth” in place of the word “seventh”.)

43. In Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216, Brereton J stated (at [12]) that proof of service by post requires, at least, proof that: the envelope bore the correct name and address; the envelope contained the relevant document to be served; the envelope bore the correct cost of postage; and the envelope was placed in the post. (See also Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 at [22]-[24] per Barrett J (as his Honour then was); Dwyer v Canon Australia Pty Ltd [2007] SASC 100 at [6] per Debelle J.)

44. In the present case, the evidence of Ms Naicker establishes that the statutory demand and accompanying affidavit were placed in an envelope of the standard kind used by the firm (i.e., an envelope with a window at the front through which some of the contents of the envelope would be visible and bearing the Postage Paid Australia imprint on the top right corner) and that the letter bore the correct name and address.

45. Ms Naicker’s evidence was that the letter was placed in the envelope “so it [the address] would read through the window”. Ms Naicker was not required for cross-examination and hence was not challenged as to that last aspect of her evidence. In my opinion the natural reading of that statement is that the letter was folded and placed in the envelope so that the address was visible through the window on the envelope. The submission that the address block was offset in such a manner as to have the result that the address was not visible through the window is mere speculation based on a comparison of the envelope attached to Ms Naicker’s letter as lined up with a photocopy of the covering letter (not the actual letter). It is inherently implausible that a firm of solicitors would use standard envelopes of this kind if the address as typed in standard form correspondence would not be visible through the window of the envelope when the correspondence was placed in the envelope. There is nothing to suggest that the letter that Ms Naicker says she folded and placed in the envelope was not typed or printed in accordance with standard firm practice. Moreover, the fact that the envelope (with its contents) was not returned to sender supports the conclusion that the details of the addressee were visible through the envelope at the time. I am not persuaded that the plaintiff’s submissions raise doubt or undermine the evidence that the envelope was correctly addressed.

46. Ms Naicker’s evidence as to the contents of the envelope and that the envelope was sealed and placed in the mailbox on the corner of the Sydney CBD streets she identified establishes that the envelope containing the statutory demand and accompanying affidavit was posted on 6 February 2018.

47. As The Owners Corp notes, in Gabriel Hotels Pty Ltd v Corlita Pty Ltd [2010] NSWSC 826, White J, as his Honour then was, (at [7]) relied upon statements made by Australia Post on a letterbox and in a brochure that a postal article posted before 6 pm would be delivered to interstate metropolitan areas by the second business day. However, in Scope Data Systems Pty Ltd v Goman as Representative of the Partnership BDO Nelson Parkhill (2007) 70 NSWLR 176; [2007] NSWSC 278, his Honour referred to an Australia Post timetable setting out expected delivery times as “a statement of aspiration” only, in the absence of evidence of how frequently there was adherence to such a timetable (see at [21]).

48. As in Scope Data Systems (see [21]), there was no evidence before me from an employee of Australia Post as to the ordinary course of post. However, in the absence of evidence on that point, the presumption in s 160 of the Evidence Act applies.

49. As to whether the evidence establishes that the correct amount of postage was paid (whether by the affixing of a postage stamp or by the franking of the envelope), neither of the issues raised by the Company persuades me against finding that the envelope bore the correct amount of postage.

50. First, the suggestion that the contents of the envelope may have been folded in such a way as to make the envelope too bulky to meet the definition of a small letter is implausible. The contents of the envelope amounted to no more than five A4 pages. It strains common sense to contemplate that Ms Naicker did anything other than efficiently to fold the letter and place it into the envelope; and if the Company seriously wanted to cast doubt on this it should have been put to Ms Naicker. A simple exercise in folding paper would surely suggest that in order to create a bulky envelope it would be necessary to have multiple folds – which on no view of things would be the sensible way to place five pages into an envelope of the size of that attached to the second of Ms Naicker’s affidavits.

51. Second, the suggestion (to which the further evidence sought to be adduced was said to go) that the letter could not have properly been placed in the mailbox (and, the implicit suggestion that the letter might therefore have been rejected by Australia Post – and simply not delivered) is also implausible. The perceived inconsistency between the two affidavits seems to me to be more apparent than real. It assumes that “pre-paid post” means something other than a letter to which a postage stamp has been affixed (which must involve a pre-payment in the sense of the purchase of the stamp). Even if use of a standard envelope bearing a Postage Paid imprint is inconsistent with use of a postage stamp (which seems to me not to be self-evident since presumably one could place a stamp over the postage paid imprint), the argument sought to be run by the Company assumes that franking of such an envelope could only be effected through a post office (as opposed, say, to the use of a franking machine in-house to avoid the inconvenience of going to the post office). The precise mechanism by which the envelope came to be described by Ms Naicker as bearing $1.00 postage (by stamp or by franking) was not explained in her affidavits but nor was the issue challenged by cross-examination.

52. Ms Naicker’s evidence that the envelope bore postage of $1.00 is consistent both with a $1.00 postage stamp having been affixed to the envelope and with the envelope having been franked by some means before it was placed in the mailbox. What is not consistent with Ms Naicker’s evidence is the suggestion (mere speculation in my opinion) that an unfranked “postage paid” envelope was placed by Ms Naicker into the mailbox.

53. In those circumstances, I see no reason not to accept Ms Naicker’s evidence that the envelope as placed into the mailbox bore $1.00 postage. The perceived inconsistency in the manner in which the postage is described is not sufficient in my opinion to raise doubt as to Ms Naicker’s evidence that $1.00 postage was paid in respect of the envelope (and hence does not raise doubt as to the presumption under s 160 of the Evidence Act). Again, the evidence that the envelope was not “returned to sender” is supportive (though of course not determinative) of that conclusion.

54. Accordingly, I am satisfied that the statutory demand was properly addressed, prepaid and posted within the meaning of s 29 of the Acts Interpretation Act.

55. I turn next then to the argument that the evidence given in the plaintiff’s case that the statutory demand was never received by the occupants of the address specified in the statutory demand is sufficient to displace the presumption under s 160 of the Evidence Act, that is, to raise a doubt as to receipt.

56. The interaction between the statutory presumptions in s 29 of the Acts Interpretation Act and s 160 of the Evidence Act was considered by White J in Scope Data Systems Pty Ltd v David Goman above, following which it is accepted that s 160 applies to the service of a statutory demand (Sydney Constructions & Developments Pty Ltd v Reynolds Private Wealth Pty Ltd [2016] NSWSC 1104 at [7] (Barrett AJA); Workers Compensation Nominal Insurer v Lozito-Strada Pty Ltd [2013] FCA 625 at [6] (Jacobson J); Re Ege Foods Australia Pty Ltd [2014] NSWSC 983 at [15] (Brereton J); In the matter of Complete Investing Services Pty Ltd (in liq) [2018| NSWSC 1003 at [24] (Gleeson JA)).

57. In Scope Data Systems Pty Ltd v Goman, White J said (at [38]):

In my view, the position is as follows. If the evidence establishes the time at which the article is delivered to the postal address, then that is the time at which service is taken to be effected. If the evidence does not establish the time at which delivery was effected, then, unless the contrary is proved, delivery is deemed to have been effected in the ordinary course of post. What that is is a question of fact to be proved by evidence. In the absence of evidence on the topic, and in the absence of any presumption, there will be no proof that the article was delivered at a particular time. If it is established that the article was not delivered in the ordinary course of post, but the evidence does not establish when it was delivered, then again there will be no evidence as to the time of delivery. In either case, s 160 of the Commonwealth Evidence Act (applicable to federal courts), or s 160 of the New South Wales Evidence Act (applicable to New South Wales courts), affords a presumption as to when the article is to be taken to have been delivered. The presumption may assist in proving when delivery was made in the ordinary course of post. If the evidence shows that the article was not delivered in the ordinary course of post, the presumption may assist in proof of when the document was delivered.

58. In the passage in Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd set out above, it was noted that “while mere denial of non-receipt [scil receipt] by the addressee would scarcely, if ever, suffice …, evidence of non-receipt at a place by an appropriate occupant, depending on the cogency of the evidence, may be sufficient to create a doubt for the purposes of s 160 of the Evidence Act”.

59. I accept The Owners Corp’s submission that, in light of the evidence regarding the letterbox which was maintained at the plaintiff’s registered office in the present case, evidence that the occupants of that address never received an item does not suffice to create a doubt that the item was delivered to that address.

60. In In the matter of Complete Investing Services Pty Ltd (in liq) above, Gleeson JA, in circumstances not dissimilar from the present case, held that evidence of non-receipt at the company’s registered office by the occupants of the home at that address was not sufficient to create a doubt for the purposes of s 160 of the Evidence Act. At [32], his Honour said:

The critical issue in this case (which was not in issue in Partners of Piper Alderman v Sharjade Pty Ltd) is whether the evidence is sufficient to raise a “doubt” about the presumption as to the time of receipt of the letter under s 160 of the Evidence Act. In my view, the evidence of non-receipt at the Company's registered office by the occupants of the home at that address, relevantly, Mr and Mrs McMillan, is not sufficient to create a doubt for the purposes of s 160 of the Evidence Act. The matters leading to this conclusion are:

1.   the location of the letterbox on a public road in the country;

2.   the absence of evidence of the size of the letterbox, what might cause it to overflow and whether it had a lock on it; and,

3.   the evidence of Mrs McMillan of there being regular issues in the past with receipt of mail at her residential address.

61. At least the first two of those matters is equally applicable in the present case (as also, given Ms Kennett’s conversation with the unidentified neighbour, may be the third of those matters).

62. I also note the similar remarks of Black J in In the matter of Leasing Holdings Pty Ltd (at [32]) (set out at [30] above) (where evidence had been given by an accountant, who occupied the premises, that he never received the statutory demand).

63. I am not persuaded in the present case that the evidence raises a doubt as to the receipt of the statutory demand at the address specified therein (as opposed to receipt by the directors of the envelope at that address). Therefore (in the absence, as explained above, of evidence as to the ordinary course of post), the presumption in s 160 operates, and leads me to find that the statutory demand posted on 6 February 2018 was served at the registered office on 15 February 2018, seven working days later. (If the unamended provision (as it stood prior to 2 July 2018) were to be applied, I would instead find that the statutory demand was served at the registered office on 12 February 2018, four working days later. As explained below, however, this would not change the outcome of the separate question.)

64. The Originating Process to set aside the demand was served on 9 March 2018, outside the specified 21 day period (which expired on 8 March 2018, or – on the alternative finding to which I have just adverted – on 5 March 2018). Thus the separate question for determination (as to whether the Company’s application under s 459G of the Corporations Act was served within the time specified in s 459G) must be answered in the negative.

65. There is no power under other provisions of the Corporations Act to extend the time limit in s 459G(2) (see David Grant & Co Pty Ltd v Westpac Banking Corporation, to which I have referred above).

66. Therefore, subject to the argument (not yet heard) by the Company as to the applicability of the relevant provision(s) of the Corporations Act to a strata plan, there is no jurisdiction to hear the Company’s application to set aside the statutory demand issued by The Owners Corp. As that further jurisdictional argument was not the subject of the referral to me, the appropriate course at this stage is to refer the matter back to Black J for further directions.

67. Accordingly, I order as follows:

1. The separate question as to whether the plaintiff’s application under s 459G to set aside the statutory demand issued by the defendant was served within time should be answered “no”.

2. Costs of the determination of the separate question are the defendant’s costs in the cause.

3. List the matter for further directions before Black J at 10 am on 6 August 2018.

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Amendments

03 August 2018 - Uploaded new judgment.