Roderick Group Pty Ltd (in liq), in the matter of Vlahos v Vlahos
[2024] FedCFamC2G 1439
•23 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Roderick Group Pty Ltd (in liq), in the matter of Vlahos v Vlahos [2024] FedCFamC2G 1439
File number: MLG 2433 of 2021 Judgment of: JUDGE SYMONS Date of judgment: 23 December 2024 Catchwords: BANKRUPTCY – creditor’s petition – challenge to service of bankruptcy notice – where applicant creditor relies on statutory deeming provisions contained in ss 28A(1)(a)(ii) and 29(1) of the Acts Interpretation Act 1901 (Cth) – where envelope containing bankruptcy notice recorded the incorrect postcode but the correct street and suburb – where the incorrect postcode had been recorded by the respondent on documents filed in court proceedings - whether bankruptcy notice sent to the address of the place of residence of the person last known to the person serving the document – whether envelope containing the bankruptcy notice “properly addressed” – whether applicant able to establish service independently of the deeming provisions – no proof of service – creditor’s petition dismissed – sequestration order set aside Legislation: Acts Interpretation Act 1901 (Cth), ss 28A, 29
Australian Postal Corporation Act 1989 (Cth), s 32
Bankruptcy Act 1966 (Cth), ss 40, 43, 52
Bankruptcy Regulations 1996 (Cth), reg 16.01Bankruptcy Regulations 2021 (Cth), reg 102
Corporations Act 2001 (Cth), ss 109X, 142
Conveyancing Act 1919 (Nsw), s 170
Cases cited: CLGC Pty Ltd v Zhang [2022] FedCFamC2G 152
Civic Video Pty Ltd v Warburton (2013) 216 FCR 61; [2013] FCA 934
Deputy Commissioner of Taxation v ABW Design & Construction Pty Ltd (2012) 203 FCR 70; [2012] FCA 346
Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd (2010) 190 FCR 1; [2010] FCA 1223
Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd [2018] FCA 466
Dwyer v Canon Australia Pty Ltd (2007) 247 LSJS 438; [2007] SASC 100
Fancourt & Another v Mercantile Credits Ltd (1983) 154 CLR 87; [1983] HCA 25
Healy v Deputy Commissioner of Taxation (2015) 320 ALR 371; [2015] WASCA 44
In the matter of AXF Group Pty Ltd [2019] VSC 671
In the matter of VO Group Australia Pty Ltd [2023] NSWSC 852
Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216
Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126
Perpetual Ltd v Treloar [2009] NSWSC 386
Robson v Body Corporate for Sanderling at Kings Beach CTS 2942 & Anor (2021) 286 FCR 494; [2021] FCAFC 143
Skalkos v T & S Recoveries Pty Ltd (2004) 213 ALR 311; [2004] FCAFC 321
SZKGF v Minister for Immigration and Citizenship [2008] FCAFC 84
SZLBR v Minister for Immigration and Citizenship [2008] FCAFC 85
Division: Division 2 General Federal Law Number of paragraphs: 129 Date of last submissions: 4 October 2023 Date of hearing: 2 September 2022 Place: Melbourne Counsel for the Applicant: Ms N Tyson Solicitor for the Applicant: Thomson Geer Respondent: The Respondent represented himself ORDERS
MLG 2433 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF DAVID WILLIAM VLAHOS)
BETWEEN: RODERICK GROUP PTY LTD (IN LIQUIDATION) ACN 127 974 761
Applicant
AND: DAVID WILIAM VHLAHOS
Respondent
ORDER MADE BY:
JUDGE SYMONS
DATE OF ORDER:
23 DECEMBER 2024
THE COURT ORDERS THAT:
1.The creditor’s petition is dismissed.
2.The sequestration order made on 7 April 2022 is set aside.
3.The costs order made on 7 April 2022 is set aside.
4.On or before 4.00 pm on 3 February 2025, the Trustee in Bankruptcy, Robert Scott Woods, file and serve submissions, not exceeding five pages, and any affidavit on which he seeks to rely as to consequential issues.
5.On or before 4.00 pm on 24 February 2025, the Applicant and the Respondent file and serve submissions, not exceeding five pages, and any affidavit on which they seek to rely as to consequential issues.
THE COURT NOTES THAT:
A.In the absence of any application by a party, or the Trustee, for an oral hearing, consequential issues will be determined on the papers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS:
INTRODUCTION
This is an application for review of a sequestration and related costs order made by a Registrar of this Court on 7 April 2022, against the estate of David William Vlahos. Mr Vlahos’ case is confined essentially to a single issue. He argues that the creditor’s petition ought to be set aside on the basis that he did not commit an act of bankruptcy because he was not served with the relevant bankruptcy notice as required by the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and the Bankruptcy Regulations 2021 (Cth) (Bankruptcy Regulations). The basis for this contention is that the address to which the bankruptcy notice was sent via pre-paid post was incorrect because it used the postcode 3205 (the postcode for South Melbourne, Victoria) instead of the postcode 3207, being the postcode for Port Melbourne, Victoria.
The applicant creditor opposes the application for review and submits that there was then and remains now, a proper basis for a sequestration order to be made against Mr Vlahos. In the context of the specific argument made in this case, the applicant’s position is that Mr Vlahos was properly served, for the purpose of the Regulations, with a bankruptcy notice when it was sent to him via pre-paid post to “the address of the place of residence or business of the person last known to the person serving the document”. In other words, although the applicant concedes that the postcode for South Melbourne, rather than Port Melbourne, was identified on the pre-paid envelope enclosing the bankruptcy notice, this did not invalidate the service because the address used on the envelope was taken from and identical to the address for service identified by Mr Vlahos in a document filed by him in related proceedings in the Victorian Court of Appeal. The document relied on was dated 7 May 2021.
BACKGROUND
On 18 August 2021, upon the request of the applicant, the Official Receiver issued bankruptcy notice BN 253948 (bankruptcy notice) to Mr Vlahos. The bankruptcy notice was based on orders made by the Court of Appeal on 28 July 2021 which, among other things, required Mr Vlahos to pay the applicant the amount of $1,259,353.59.
Also on 18 August 2021, the applicant took steps which it contends constituted service of the bankruptcy notice on Mr Vlahos.
On 27 September 2021, the applicant filed a creditor’s petition in this Court. The creditor’s petition identified the act of bankruptcy as the failure of Mr Vlahos to comply on or before 15 September 2021 with the requirements of a bankruptcy notice served on him on 18 August 2021.
The hearing of the creditor’s petition took place on 24 March 2022 and 7 April 2022 before a Registrar. On this second date, the Registrar made a sequestration order.
On 12 April 2022, Mr Vlahos filed an application seeking review of the Registrar’s exercise of power and an order that the creditor’s petition be dismissed. In his grounds of application filed on 1 June 2022, Mr Vlahos foreshadowed that he would oppose the creditor’s petition on three grounds, including that he disputed liability for the judgment debt. However, when the matter came before me, the challenge was confined to the issue of service.
On 2 June 2022, the parties appeared before me for a directions hearing at which orders were made for the filing of material on the review and the review was listed for hearing on 2 September 2022. On 8 August 2022, I made further procedural orders and an order dismissing an application in a proceeding filed by Mr Vlahos on 25 May 2022 which, among other things, sought orders that the applicant produce to him records of investigation services relating to Mr Vlahos’ whereabouts or address for service.
THE REVIEW
On 2 September 2022 the matter came before me for hearing of the review application. On this date, the applicant was represented by Ms Tyson of counsel and Mr Vlahos represented himself.
The court book prepared for the hearing was lengthy, reflecting the fact that a review, being in the nature of a hearing de novo, requires the prosecution (or re-prosecution) by the applicant creditor of its petition. Many of the documents were directed therefore at establishing proof of the matters identified in s 52(1) of the Bankruptcy Act.
Material relied upon by the parties
As far as the central issue of service of the bankruptcy notice was concerned, the applicant relied on the following material:
·Affidavit of Levon Malyan affirmed 17 September 2021 (first Malyan affidavit);
·Affidavit of Neil Hannan sworn 10 November 2021;
·Affidavit of Betty Chen affirmed 10 March 2022 (first Chen affidavit;
·Affidavit of Betty Chen affirmed 16 March 2022 (second Chen affidavit);
·Affidavit of Levon Malyan sworn 30 June 2022 (second Malyan affidavit);
·Affidavit of Gabrielle Martino affirmed 30 June 2022 (Martino affidavit);
·Affidavit of David Quin sworn 30 June 2022 (Quin affidavit);
·Summary of contentions in response filed on 1 July 2022.
Mr Vlahos relied on the following material:
·Affidavit of David Vlahos dated 18 January 2022 (first Vlahos affidavit);
·Affidavit of Thi Lieu Hoang dated 22 February 2022;
·Affidavit of David Vlahos dated 22 February 2022 (second Vlahos affidavit);
·Affidavit of David Vlahos dated 29 March 2022 (third Vlahos affidavit);
·Affidavit of David Vlahos dated 11 April 2022 (fourth Vlahos affidavit);
·Affidavit of David Vlahos dated 25 May 2022 (fifth Vlahos affidavit);
·Outline of submissions filed on 14 June 2022.
The applicant made a small number of objections to some of the affidavits relied upon by Mr Vlahos which were largely upheld.[1]
[1] Paragraphs 1,10, 18 (part) of the first Vlahos affidavit; paragraphs 2 (part), 3 (part), 11, 12 (part), 13 (part) of the second Vlahos affidavit; paragraph 1 of the fourth Vlahos affidavit.
There was also some limited cross-examination by Mr Vlahos of Mr Hannan and Ms Chen. I will identify the evidence where it becomes relevant to the arguments of the parties.
Legislative framework
There was consensus that the central question for determination on the review directed attention to regulation 102 of the Bankruptcy Regulations which, at the relevant time (being 18 August 2021), read:
Service of documents
(1) Unless the contrary intention appears, if a document is required or permitted by the Act or this instrument to be given or sent to, or served on, a person (other than the Inspector-General, the Official Receiver or the Official Trustee), the document may be:
(a)sent by a courier service to the person at the address of the person last known to the person serving the document; or
(b)left, in an envelope or similar packaging marked with the person’s name and any relevant document exchange number, at a document exchange where the person maintains a document exchange facility.
Note: See also section 28A of the Acts Interpretation Act 1901.
(2) In the absence of proof to the contrary, the document is taken to have been received by, or served on, the person when the document would, in the due course of business practice, be delivered to that address or document exchange.
Section 28A of the Acts Interpretation Act 1901 (Cth) (AI Act), which is referred to in a note to regulation 102 provides, relevantly:
Service of documents
(1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression “serve”, “give” or “send” or any other expression is used, then the document may be served:
(a)on a natural person:
(i) by delivering it to the person personally; or
(ii) by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document;
…
Section 29 of the AI Act provides:
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.
I note, for completeness, that the effect of this last provision is to apply a presumption that a postal article sent by prepaid post addressed to a person at a specified address in Australia will be received at that address on the seventh working day after having been posted. This explains why the act of bankruptcy relied upon by the applicant was the failure of Mr Vlahos to comply with the bankruptcy notice within a period of 28 days from the date on which the bankruptcy notice was said to have been posted.
The applicant submitted that although the methods of service regulated under the (new) Bankruptcy Regulations did not include service by post (compared with the now repealed 1996 regulations), the inclusion of “the Note” had the effect of importing a two-part test that would determine whether a bankruptcy notice had been properly served by post.
The applicant described the test as follows:
(a)the bankruptcy notice must be sent by prepaid post to the address of the place of residence or business of the person (here, Mr Vlahos) last known to the person serving the document (here, the applicant creditor) at that time (section 28A), with service by post effected by properly addressing, prepaying and posting the document as a letter (section 29); and
(b)service is then deemed to be effected at the time at which the letter would be delivered in the ordinary course of post, unless the contrary is proven (section 29).
The applicant acknowledged that it had the onus of establishing the matters identified in the first stage of the test. If it succeeded in this endeavour, then the onus would shift to Mr Vlahos to prove that the letter had not been delivered.
I did not understand Mr Vlahos to challenge the applicant’s construction of these provisions or what they required the respective parties to prove. The construction flows logically from the plain meaning of the words used in the Bankruptcy Regulations and, by incorporation, ss 28A and 29 of the AI Act. It is also consistent with what the Western Australian Court of Appeal said about the construction of s 29 of the AI Act in Healy v Deputy Commissioner of Taxation (2015) 320 ALR 371 at [65]. I adopt the two-stage test as the framework against which the issue of service is to be determined.
The applicant’s submissions
The applicant submitted that it was able to discharge its onus in the following ways.
First, as to non-contentious matters, the applicant had placed evidence before the Court that the bankruptcy notice was addressed, prepaid and posted as a letter.
This evidence was contained primarily in the first Malyan affidavit, in which Mr Malyan deposed to having, on 18 August 2021, placed a letter from Thomson Geer, solicitors for the applicant in this proceeding, along with the bankruptcy notice and the orders made by the Supreme Court and the Victorian Court of Appeal, in an ordinary prepaid post envelope addressed to Mr Vlahos at the address 200 Dow Street, Port Melbourne, Victoria. Mr Malyan annexed to his affidavit a copy of the documents as well as a copy of an envelope that was addressed in the manner described and with the postcode 3205.[2] The envelope was clearly marked on the top left-hand corner with the name of the law firm and the words “If undelivered please return to: GPO Box 375, Melbourne VIC 3001”.
[2] Exhibit LM-1 to the first Malyan affidavit.
Second, as to the contentious issue at the heart of the proceeding, the applicant submitted that it devolved to a simple proposition: namely, whether by using the postcode 3205 (instead of 3207) on the prepaid envelope, the bankruptcy notice was validly sent to the address of the place of residence of Mr Vlahos last known to the applicant creditor.
The applicant submitted that there were principally four reasons why the Court should find that it was.
First, the address to which the bankruptcy notice was sent was that given by Mr Vlahos to the applicant in a document filed by him in the related Court of Appeal proceeding which resulted in the judgment debt. The document was an amended written case that was dated and filed on 6 May 2021.[3] The document was prepared by Mr Vlahos and the address was recorded as 200 Dow St Port Melbourne 3205. The applicant noted that Mr Vlahos had identified this same street address (including postcode) on two other occasions; a list of authorities dated 29 June 2020[4] and an amended written case dated 10 July 2020.[5]
[3] Exhibit DCQ-1 to the Quin affidavit.
[4] Exhibit BC-3 to the first Chen affidavit.
[5] Exhibit BC-4 to the first Chen affidavit.
There was also evidence from Mr Vlahos that 200 Dow Street, Port Melbourne was his home address (or “place of residence”).[6]
[6] First Vlahos affidavit at [9].
The applicant acknowledged that in a Form 64C document filed on its behalf by its legal representative (also in the Court of Appeal proceeding) on 7 May 2020, the address of Mr Vlahos had been recorded to include the postcode 3207.[7] However, the applicant submitted that the fact this address had been identified did not alter the character of the address (and postcode) appearing on the amended written case filed by Mr Vlahos, as the address of the place of residence of Mr Vlahos last known to the applicant creditor.
[7] Attachment D to the affidavit of David Vlahos dated 25 May 2022.
To begin with, the document filed by the applicant had been filed almost one year prior to the amended written case filed by Mr Vlahos. Most importantly this reflected the position that the address was provided by Mr Vlahos himself, and the applicant had deliberately used the address provided by him rather than simply obtaining the address independently. In this regard, Mr Hannan, who is a partner with the law firm Thomson Geer, gave evidence in cross-examination that he had instructed lawyer Ms Chen to use the address which was recorded in the most recent documents filed in the Court of Appeal on the assumption that this would be correct given that multiple documents had been filed in the proceeding.
The applicant submitted that when regard was had to the history of cases concerning the now repealed regulation 16.01(1)(a) of the Bankruptcy Regulations, it was apparent that there were many examples by which a court had accepted that an address provided by the debtor satisfied the requirement for service to that person’s last-known address.
The applicant’s counsel directed the Court’s attention to Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321, a decision of a Full Court of the Federal Court in which the evidence was that the debtor was not at the relevant time living in his usual residence and the debtor’s solicitor and the debtor himself, had identified the registered address of an associated company as the debtor’s address for service in proceedings in the High Court and in the Supreme Court of New South Wales. The Full Court found that service of the bankruptcy notice had been validly effected and said (at [36]):
On the material it is clear that the appellant was not at the relevant time living at the Vaucluse address, though that was his usual dwelling house or residence; that his current residential address was not known to the respondent; that in various contexts he had given the Alexandria address as his address for service; and that the best prospect of getting a document to him was by sending it to that address.
The applicant submitted that the point of the service provisions was that a creditor need not be troubled by going beyond or behind a document that had been recently filed by a debtor for the purpose of making enquiries as to the last known address of that person. The applicant submitted that to suggest otherwise would create extraordinary consequences. By way of example, it was contended that a creditor ought not be required to go behind a recently notified address for the purpose of ascertaining whether it was innocently but incorrectly given, or falsely provided in circumstances where a creditor was already encumbered with onerous obligations in relation to service.
The applicant submitted that Civic Video Pty Ltd v Warburton [2013] FCA 934, a decision relied upon by Mr Vlahos, could be distinguished for the reason that the address used by the creditor to effect service, albeit given by the debtor, had been provided some seven years before service of the bankruptcy notice. The Federal Court found that in those circumstances, the creditor was under an obligation to take steps to ascertain the debtor’s most recent address as made known by him in readily accessible public records, being, in that case, a change of address form filed with ASIC.
As to the second point identified by the applicant, it was submitted that use by the creditor of an address notified by the debtor would best accord with the purpose of a provision such as s 28A of the AI Act.
In this context, the applicant referred to CLGC Pty Ltd v Zhang[2022] FedCFamC2G 152 as an example of a decision that had considered s 28A (as compared to regulation 16.01 of the Bankruptcy Regulations 1996 (Cth)) and had embraced a definition of “address” as one “not restricted to a place of residence or business. It is the place at which a person may be reached”.[8]
[8] Zhang at [20].
The applicant submitted that the best means of achieving this purpose would be to use information provided by the debtor himself. In this case, the information was given in very important Court of Appeal proceedings that involved a significant sum of money.
The applicant submitted (this being its third constructional point) that for the Court to find that an address which contained an incorrect postcode or an address plus an incorrect postcode was not an address within the meaning of s 28A of the AI Act would be inconsistent with the flexible way in which the courts had considered this provision, as well as the similarly worded regulation 16.01.
The applicant submitted that the facts of Zhang – service had been validly effected by sending the bankruptcy notice to a post office box, suburb, postcode and name of the correctional centre – exemplified this flexible approach.
The applicant acknowledged that the word “address” is not defined in the Bankruptcy Act, the Bankruptcy Regulations or the AI Act. However, one of the definitions of address (as a noun) in the Oxford English Dictionary is “the particulars or the place where a person lives or an organisation is situated, typically consisting of a number, street name, the name of a town or district, and often a postal code; these particulars considered as a location where a person or organization can be reached”.[9] The Oxford English Dictionary defines “postcode” as “a group of letters or numbers, or both, added to a postal address to facilitate the sorting and delivery of mail. Later also; the area designated by such a code”.
[9] Definition 6(a) of address (noun), Oxford English Dictionary.
The applicant submitted that when such definitions of “address” and “postcode” were considered together, it was apparent that an “address” may be considered as a postal address, either with or without a postcode, and need not contain a postcode at all. This was said to be also consistent with the bankruptcy notice, which adopted the form required by regulation 9 that made separate provision (in a box) for “address” and “postcode”.
The fourth point advanced by the applicant was that the Court could take further comfort in finding that 200 Dow Street, Port Melbourne, with or without the postcode 3205, was an “address” within the meaning of s 28A(1)(a) of the AI Act because the mail had not been returned to sender.
In support of this argument, the applicant relied on the evidence contained in the second Malyan affidavit at [8]-[12] which states:
8. During the period before and from 18 August 2021 to 14 March 2022, the Melbourne office of Thomson Geer was located at Level 39, Rialto South Tower, 525 Collins Street, Melbourne. On 15 March 2022, the firm’s physical office changed to Level 23 of the same building.
9. Since 13 March 2018 my responsibilities at Thomson Geer have included managing the mail that is sent to and received by the Melbourne office of Thomson Geer, including mail received at the GPO Box. During that time:
(a)the physical office of Thomson Geer in Melbourne (whether at Level 23 or Level 29 of 525 Collins Street) has contained a mail room or mail office area;
(b)I have worked in that mail room and my desk is physically located in the mail room;
(c)I was the only person working in the mail room;
(d)mail sent from the Melbourne office of Thomson Geer is generally sent in a firm envelope contained the GPO Box noted on the Envelope
(e)any mail received at the physical office of Thornson Geer is delivered to the mail room, sorted and delivered to the partner, solicitor or employee of Thornson Geer that the mail is addressed to. Alternatively, if the mail does not state who it is addressed to, if I know which partner or solicitor is managing the matter, I will deliver it to them. it not I will check internal records of the firm to find out who it should be delivered to. in each case I then deliver the mail to that person;
(f)Mailplus, a company engaged by Thornson Geer, check the GPO Box each day to collect any mail in the GPO Box. The mail collected from the GPO Box is then given directly to me each morning and treated in the same way as mail received at the physical office, as described in paragraph 9(e) above. This includes any mail received in the GPO Box (or physical office) as "returned to sender" mail. By this I refer to mail that has been returned by Australia Post (because it is undeliverable and marked "returned to sender".
10. During the period 18 August 2021 to today, Mailplus checked the GPO Box every day in accordance with the practice described in paragraph 9(f). During that time period, the Envelope containing the Documents (and/or the Documents themselves) have not been given to me by Mailplus as mail received in the GPO Box as returned to sender.
11. Nor have I received in the mail room at Thornson Geer any other mail addressed to David William Vlahos at 200 Dow Street Port Melbourne VIC 3205 as returned to sender from 18 August 2021 to today.
12. Further, as I posted the Envelope containing the Documents, I knew who was managing this matter and, if the Envelope contained the Documents had been returned to sender, I would have immediately delivered the Envelope to the relevant Partner or Solicitor.
The applicant also noted that Ms Chen, a solicitor employed by Thomson Geer, had given unchallenged evidence that she was the solicitor with the care and conduct of this matter on behalf of the applicant and that she had not received any mail marked “return to sender” addressed to Mr Vlahos at 200 Dow Street, Port Melbourne 3205.[10]
[10] First Chen affidavit at [9].
The applicant submitted that the combined effect of this evidence was that Thomson Geer had a system in place for the management of mail (incoming and outgoing) of which Mr Malyan had oversight and that in circumstances where the bankruptcy notice had been sent in an envelope that was clearly marked with a return address, the Court should conclude that it had not been returned to sender and the reason this had not occurred was because it had been successfully delivered to 200 Dow Street, Port Melbourne.
The applicant submitted that it was not incumbent on it to successfully establish the foregoing matters as it had the benefit of the deeming provisions in ss 28A(1)(a) and 29 of the AI Act. However, it submitted that the Court could have regard to the fact of the envelope not having been returned as part of the analysis as to whether the address recorded on the envelope was one at which Mr Vlahos was able to be reached.
It was also said to be contextually relevant to the applicant’s case that it had produced unchallenged evidence that although there are two Dow Streets in the Port Phillip municipality - one in Port Melbourne and one in South Melbourne - there is only one 200 Dow Street in that geographic area, being 200 Dow Street, Port Melbourne.[11]
[11] Martino affidavit at [6]-[10].
The applicant also produced a copy of Terms and Conditions published by Australia Post on its website which included the following conditions relating to the treatment of undeliverable articles.[12]
[12] Exhibit GEM3 to the Martino affidavit.
24 Undeliverable articles
24.1Unless otherwise agreed between Australia Post and the customer, an article may be deemed undeliverable if:
24.1.1in the reasonable opinion of Australia Post it does not bear an address sufficient for delivery; and
24.1.2it is endorsed, or is otherwise known to Australia Post, that the addressee is unknown or does not receive articles at the address on the article; or
24.1.3there are no receptacles or facilities for receipt of the article or the receptacle or facilities provided are, in the reasonable opinion of Australia Post, inadequate.
…
26 Method of dealing with unclaimed etc. articles
26.1Subject to clauses 26.3 and 28, where an article is unclaimed, refused by, or undeliverable to, its addressee, the article shall:
26.1.1 if it has a return address be delivered to that address;
Mr Vlahos’ submissions
Mr Vlahos made submissions that were directed at both limbs of the test described at [20] above.
As far as the first limb was concerned, Mr Vlahos submitted that the act of posting the bankruptcy notice to an address which did not exist (by virtue of the attribution of the incorrect postcode) meant that the bankruptcy notice had been incorrectly addressed and had not been served in accordance with regulation 102 of the Regulations (as read with s 28A of the AI Act). Mr Vlahos submitted that he had no relationship to the address deliberately, but erroneously, chosen by the applicant to effect service.
In his written submissions filed on 14 June 2022, Mr Vlahos challenged the contention that the address used by the applicant was capable of being characterised as his “last known address” for the purpose of the Bankruptcy Regulations. In aid of this argument, he submitted (at [29]-[31]) that:
29. The meaning of the phrase “last known address” for the purposes of the regulations has been considered in a number of cases. Summarised principles can be found in Macquarie Leasing Pty Limited v Culleton [2014] FCCA 1714 at [18]:
a) it does not matter whether the debtor actually resides at the particular address or not: Drake v Stanton [1999] FCA 1635 at [5] per Tamberlin J; Napiat Pty ltd v Salfinger; In the Matter of Salfinger (No 7) [2011] FCA 1322 at [64] per Foster J.
b) the expression “last known address” does not expressly refer to the debtor’s residence or place of abode: Drake v Stanton at [5]; Napiat v Salfinger at [64].
c) The expression refers to the address that has been made known by the debtor to the (creditor) or world at large at the time closest to the date in question: Drake v Stanton at [8]; Napiat v Salfinger at [64]; Skalkos v Recoveries Limited (2004) 141 FCR 107; Magafas v Carantinos (2008) 222 FLR 185 at [15] per Raphael FM.
d) A business address can be a debtor’s last known address: Skalkos at [36].
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: Drake v Stanton; Skalkos at [37].
f) A debtor cannot have two or more last known addresses within the meaning of the regulations: Napiat v Salfinger at [67].
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: Napiat v Salfinger at [67].
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: Civic Video Pty Ltd v Warburton [2013] FCA 934 at [70] citing Robertson v Banham & Co [1997] 1 WLR 446, which was itself referred to in Skalkos at [32].
i) The question of what address has been made known by the debtor is to be determined objectively on all of 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: Civic Video v Warburton at [76].
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: Civic Video v Warburton at [78].
30. 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].
31. The principles discussed in Macquarie Leasing, Civic Video and Skalkos establish that the last known address must be a real address. By reference to the context apparent in the regulations the address must be a place at which it is physically possible to deliver or leave a tangible object in the form of a properly addressed envelope or similar packaging marked with the person’s name.
Mr Vlahos placed particular emphasis on the purpose of the service rule, being to bring the bankruptcy notice to the attention of the debtor. Mr Vlahos submitted that it followed from this purpose that ordinarily the creditor wishing to effect service would be obliged to take steps to ascertain the debtor’s most recent address as made known to him or her in readily accessible public records and it would be wrong to confine the inquiry, in all cases, to the last address made known to the creditor. Mr Vlahos submitted that this approach was consistent with the statements recorded at [77]-[78] in Civic Video.
Mr Vlahos suggested that in his case, a search of the ASIC register would have disclosed to the applicant that he could be reached at 200 Dow Street, Port Melbourne 3207 (emphasis added). In support of this submission, Mr Vlahos produced, as an attachment to his written submissions, an ASIC company extract for Atlantas Corporation Pty Ltd which identified Mr Vlahos as a current director and recorded his address in the manner just described. Mr Vlahos also submitted it to be a matter of significance that the applicant itself was in possession of the “correct” address for service, this being a reference to the Form 64C document filed on the applicant's behalf in the Court of Appeal proceeding on 7 May 2020.
As far as the second limb of the test was concerned, Mr Vlahos deposed to the following circumstances that he submitted were together capable of proving that the bankruptcy notice had not been “delivered to” or “left at” the address used for service.
In the first Vlahos affidavit, Mr Vlahos described that he had been admitted to hospital in Kew on 16 August 2021 to undergo knee replacement surgery. He informed Mr Hanna on 18 August 2021 that he was in hospital and recovering from surgery. Due to post-surgery complications, Mr Vlahos was not released from hospital until 27 August 2012.
On 31 August 2021, Mr Vlahos was re-admitted to hospital. He was discharged on 2 September 2021.
When he returned home, he was confined to a hospital bed for the following weeks. During this time, Mr Vlahos was fully dependent on others for assistance.
During this period of confinement at home, as well as when he was in hospital, others, including family members, friends and neighbours were collecting Mr Vlahos’ mail.
Mr Vlahos also read and relied on the affidavit of Thi Lieu Hoang dated 22 February 2022. In her affidavit, Ms Hoang deposed that she was residing “during the relevant time” at 198 Dow Street Port Melbourne which she described as a dwelling semi-attached to 200 Dow Street Port Melbourne.
It was Ms Hoang’s evidence that during the relevant time, she was working from home at 198 Dow Street and home schooling her children. She deposed that her local “Postie” was known to her and to her family. On occasion, Ms Hoang accepted hand delivery of mail for both 198 and 200 Dow Street Port Melbourne. On occasion, so did her children. During the relevant time, Ms Hoang cannot recall receiving mail from Thomson Geer or being handed mail from Thomson Geer by her children.
Mr Vlahos also sought to put before the Court a series of documents that were attached to a set of submissions dated 10 August 2022. The documents were described by Mr Vlahos as “Australia Post Update for General Enquiry – 49488047” consisting of a series of emails exchanged between Mr Vlahos and the email address [email protected] on the dates 6 July 2022 and 11 July 2022 and “Australia Post Letter Products and Services Guide”. The applicant objected to the receipt of this evidence on several grounds, including because Mr Vlahos had not produced the entire series of emails and/or inquiries exchanged with the Australia post email address. Mr Vlahos was given the opportunity to do so but informed the Court following the hearing that the information was not available.
Despite the objections made by the applicant it seemed to me that the best approach was to receive the evidence but to consider its significance having regard to submissions made by the applicant, which I will shortly identify.
Mr Vlahos relied on the emails as explaining what happens to letters if they are incorrectly addressed by postcode. He referred to an email sent on 6 July 2022 at 11.34 am in which the author wrote: “If the parcel is incorrectly addressed by the postcode, it may cause a delay and the parcel will be returned to sender”. Mr Vlahos also referred to a second email sent on 6 July 2022 at 2.33 pm in which the author wrote:
“..
David, letters are sorted by our machines in high speed. The machines have scanners to scan the address so, if the suburb is correct and the post code is not, it will pass on as returned to sender automatically. This also happens if the suburb is incorrect and the post code is correct.
However, if you are sending packages with incorrect suburb or post code, these are also sorted by machines, and if the address cannot be confirmed the machine will expel it so one of the staff will need to check the details. Depending on the facility and volume within the facility to be processed, they will either correct the error if its only a post code issue and forward it on, or returned to sender…”
Mr Vlahos also invited the Court to take account of an email sent on 11 July 2022 at 11.44 am in which the author wrote: “To answer your question; if we’re unable to determine which of the addresses it should be delivered to (due to either no such address or two addresses with similar information), it will be initiated as a return to sender”.
As far as the Australia Post Letter Products and Services Guide was concerned, Mr Vlahos directed the Court’s attention to the section of the document identified as L9.1.2 and which identified the postcode as a mandatory component of a “correct address”.
The applicant’s response to the material relied upon by Mr Vlahos
The applicant submitted that ultimately the material from Australia Post did not assist Mr Vlahos. This principally reflected the submission that the question of what would constitute an address for the purpose of this proceeding did not turn on a definition or expressions of opinion as to what would constitute a “postal address” and was a matter for the Court to decide, rather than Australia Post. Furthermore, the responses provided by internal employees of Australia Post were not uniform as to the process adopted but in any case suggested that there was the capacity within the organisation to correct errors relating to postcodes and to the extent that it was suggested that a letter or parcel would be returned to sender if incorrectly addressed, the evidence before the Court from the applicant was that the envelope containing the bankruptcy notice was not returned. As far as the Australia Post Letter Products and Services Guide was concerned, the applicant repeated the submission that Australia Post was not the arbiter of the question before the Court.
The applicant submitted that the affidavit evidence upon which Mr Vlahos relied did not allow him to prove that the bankruptcy notice was not delivered, as compared to it not having been received. The applicant noted that in Healy at [133], Newnes JA had said the following about this distinction and the type of evidence that might allow an inference to be drawn that a postal item had not been delivered:
Counsel for the appellant argued that evidence of non-receipt was nevertheless relevant to establishing non-delivery and was sufficient in this case to establish an arguable case of non-delivery. I do not accept that. While evidence that a document was not received by a person may be relevant to establishing non-delivery to a particular place and, taken together with evidence of other relevant circumstances, may permit a proper inference of non-delivery to be drawn, the difficulty for the appellant is that the evidence in this case did not go beyond evidence that the DPN was not received by the appellant. There was no evidence capable of proving that it was not delivered to his address. There was, for instance, no evidence as to who was occupying the premises at the address at the relevant time or as to what happened to mail after it was delivered to the address, including whether there was any system or routine for collecting the mail and who had access to it.
The applicant submitted that on Mr Vlahos’ account of having been hospitalised, there was still a period of time when he was at his house within the 21 days available for compliance under the bankruptcy notice. Further, as far as Mr Vlahos relied on the evidence of Ms Hoang, it was to the effect that although some mail addressed to 200 Dow Street, Port Melbourne had come to her next door, she did not recall receiving mail from Thomson Geer. The evidence did not establish that the envelope containing the bankruptcy notice had been delivered elsewhere then its intended destination.
As far as the evidence of other people having collected Mr Vlahos’ mail for him, these people had not been identified and it was not known whether they had collected anything and what they did with it. There was no evidence as to any instructions given by Mr Vlahos to these people about the importance of any legal mail that might be received. The applicant contended that Mr Vlahos was unable to clear the relatively high threshold that applied in circumstances where the mail had not been returned to sender; this being one of the points identified in Fancourt & Another v Mercantile Credits Ltd (1983) 154 CLR 87, 99.
Submissions made following the hearing – VO Group Australia
On 12 September 2023 and when judgment in this matter was reserved, the applicant notified chambers that there had been a decision of the New South Wales Supreme Court – In the matter of VO Group Australia Pty Ltd [2023] NSWSC 852 – that might have some bearing on this case given it considered the relevance of an incorrect postcode on an envelope serving a statutory demand. I invited the parties to file brief written submissions addressing the decision.
In its written submissions filed on 20 September 2023 the applicant fairly and accurately summarised the background and reasoning of VO Group as follows:[13]
5. VO Group concerned an application to set aside a statutory demand. A question before the Court was whether the statutory demand had been served at the registered office of the debtor company (VO Group), and if so, on what date. The creditor (Watpac) relied upon two affidavits as to service. Those affidavits referred to a company search of VO Group showing its registered office to be an address in Arthur Street North Sydney with the postcode 2000 (this apparently having been stated in two affidavits). The affidavit evidence also deposed to an envelope containing the statutory demand being sent to that address (also with the postcode 2000). As noted by the Court, it was common ground that the postcode 2000 was that of the central business district in Sydney whereas the postcode of North Sydney was 2060.
6. Justice Black of the NSW Supreme Court noted that the creditor relied upon s 109X of the Corporations Act and on provisions dealing with the deeming of the time of service where service is effected by post. His Honour also noted at [17] that service by post under s 29(1) of the AIA required that the document was, amongst other things, ‘properly addressed’.
7. At [18] Justice Black referred to the requirement that, in order for the presumption in s 109X of the Corporations Act to apply, the envelope in which the statutory demand was enclosed must be properly addressed”. He then stated:
Here, unfortunately for Watpac, it cannot establish that matter, because Mr Hall, possibly by error, has twice identified by his affidavit evidence that the envelope was posted to a street address in North Sydney in an envelope showing the postcode for the Sydney central business district. I do not consider that I can disregard Mr Hall’s evidence of that matter. That has the consequence, consistent with the result in similar circumstances in Deputy Commissioner of Taxation v ABW Design & Construction Pty Ltd (2012) 203 FCR 70; 291 ALR 127; [2012] FCA 346, that the matters necessary to give rise to the application of s 109X of the Act are not established, and the presumption of service that comes from service at the registered office under that section is not available. No question of time of that service arises.
8. An argument that service of the statutory demand was otherwise effected (informally), failed.
[13] Applicant’s further submissions at [5]-[8].
Against this background, the applicant’s submissions contained an acknowledgement that a statutory declaration has in common with a bankruptcy notice that a failure to comply within the time for compliance means that the Court must presume the company is insolvent for the purpose of any application to wind up that is made within three months thereafter. Both a bankruptcy notice, and a statutory demand must be “served”.
However, the applicant emphasised the different service provisions for each document. In the case of a statutory declaration this could be served by post on the company’s registered office under s 109X(1)(a) of the Corporations Act 2001 (Cth) (Corporations Act) and s 29 of the AI Act with it being a requirement under s 142 of the Corporations Act that a company have a registered office to which communications and notices may be addressed. On the other hand, as has been extensively discussed, a bankruptcy notice may be served by leaving it at, or sending it by pre-paid post to, the address of the “place of residence or business of the person last known to the person serving the document”.
The applicant submitted that VO Group should be understood as confirming that to the extent that a company’s registered office contains a postcode, then enclosing the statutory demand within an envelope that either fails to contain that postcode or contains a different postcode would not comprise effective service by post. This was said to be clear both from the language of s 109X of the Corporations Act and Deputy Commissioner of Taxation v ABW Design & Construction Pty Ltd (2012) 203 FCR 70, which was referred to in the reasoning of Black J at [18].
The applicant submitted however that VO Group left unanswered the question as to what would be the consequence for service if the company had included an incorrect postcode as part of its registered office address (as notified to ASIC), assuming that such an error was possible. The applicant submitted that because Black J did not expressly state whether the registered office of the company in that proceeding contained a correct or incorrect postcode and because his Honour relied upon ABW, this suggested that the decision operated on a scenario in which the registered office of VO Group contained a correct postcode. This analysis reflected the contention that a central issue in ABW was that the postcode of the relevant company had been obscured on the addressing envelope in circumstances where that postcode was included within the address of its registered office. Shortly after the filing of these submissions, the applicant’s solicitors provided to the Court a current and historical ASIC search of VO Group Australia Pty Ltd which records that the postcode for North Sydney was correctly recorded.[14]
[14] I have marked the company search as Exhibit A1.
Here instead, where the address used for service, including the postcode, was that which had been last notified by Mr Vlahos, the applicant submitted that the facts and findings in VO Group were clearly distinguishable from the present.
The applicant submitted that two further points could be made by reference to ABW; the first, that an “address” may, but need not, include a postcode (ABW at [31]) and second, that a finding that no practical injustice had accrued to Mr Vlahos might be available if the Court was to conclude that the envelope containing the bankruptcy notice was received (where it was not returned to sender) (ABW at [30], referring to SZKGF v Minister for Immigration and Citizenship [2008] FCAFC 84 at [11]).
In his written submissions filed on 3 October 2023, Mr Vlahos submitted that the decisions in VO Group and ABW made clear that the presumption of effective service by post under s 109X of the Corporations Act was not available for a parcel that had been incorrectly addressed.
Mr Vlahos referred to Dwyer v Canon Australia Pty Ltd [2007] SASC 100 at [6]-[9] and Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 at [22] as supporting this proposition.
Mr Vlahos submitted that in circumstances where a postcode had been applied to the envelope containing the bankruptcy notice, it was a moot point that Logan J in ABW had suggested that a post code was not an essential part of an address. He submitted that a further complicating circumstance in this case was that there is a Dow Street in postcode 3205 but 200 Dow Street in postcode 3205 does not exist.
Mr Vlahos submitted that given the strict legal rules that apply to bankruptcy notices, where the envelope had not been properly addressed nor left at the address used for service, the applicant could not obtain the benefit of the presumption of effective service.
CONSIDERATION
Did the applicant creditor send the bankruptcy notice by prepaid post to the address of the place of residence or business of Mr Vlahos last known to the applicant creditor?
The evidence before the Court satisfies me that on 18 April 2021, the applicant creditor sent the bankruptcy notice by prepaid post to an address identified as 200 Dow Street, Port Melbourne, 3205. One of the questions that I am required to determine is whether that address, which I will refer to as “the service address”, conformed to the statutory description of “the address of the place of residence or business of the person last known to the person serving the document”.
I am satisfied that it did.
A common thread of the cases relied upon by both parties is that the address used for service of a bankruptcy notice is an address at which the intended recipient can be reached. It makes eminent sense that the person best placed to make an assessment as to the identify of this address is the intended recipient; in the context of bankruptcy proceedings, the debtor.
How this address is communicated will of course vary from case to case. In some situations, it will not be expressly or intentionally communicated by the debtor and the creditor will be required to act with varying degrees of resourcefulness to identify the last known address of the debtor. This might occur, as was suggested by Mr Vlahos, through a search maintained by ASIC or some other public record, to which obligations of currency and accuracy are generally understood to apply.
However, in other cases, this being one such example, the debtor will communicate his or her last known address directly to the creditor in circumstances that entitle the creditor to rely on that address, as communicated, to satisfy the last known address requirement under s 28A of the AI Act.
The circumstances in which Mr Vlahos communicated the service address to the applicant involved:
·Identification of the service address in the tram tracks of a document filed in a proceeding to which the applicant was a party. Although it was not formally identified as an address for service in the Court of Appeal proceeding, it can be reasonably inferred that Mr Vlahos identified this address because he considered it the address to which information related to a proceeding with significant consequences for him would come to his attention, including information sent by the applicant;
·Identification of the service address by Mr Vlahos on two earlier occasions in the same proceeding;
·Identification of the service address at a time proximate to the date on which the bankruptcy notice was placed in a prepaid envelope for posting. The service address was identified by Mr Vlahos on 6 May 2021 and the prepaid enveloped was posted on 18 August 2021. The service address satisfied the requirement, in the context of the parties’ ongoing relationship as participants in the Court of Appeal litigation, of being the most recent address as made known by Mr Vlahos. In saying this, I acknowledge however that the analysis might be different depending on the identity of the creditor and its dealings with the debtor.
As I set out earlier, part of Mr Vlahos’ challenge to the validity of service relied on the proposition that the service address could not satisfy s 28A(1)(a)(ii) of the AI Act because it was “incorrect” and because it was an address in respect of which he had no relationship. Dealing with the second of these points first, it seems to me that the relationship between the service address and Mr Vlahos is established by reason of the fact that it was Mr Vlahos himself who identified the service address in the documents that he filed in the Court of Appeal proceeding. In that sense, and for the reasons I have already given, Mr Vlahos assigned to the service address the character of an address at which he could be reached, notwithstanding it contained an incorrect postcode.
Did the applicant creditor properly address, prepay and post the document (being the bankruptcy notice) as a letter so as to obtain the benefit of the deeming provision contained in s 29 of the AI Act?
However, that is not the end of the matter. Mr Vlahos is quite right that the service address contained an inaccuracy insofar as it assigned the postcode of South Melbourne to the suburb of Port Melbourne. The question that falls for consideration is whether in circumstances where the service address (including this inaccuracy) was faithfully transposed by the applicant to the prepaid envelope containing the bankruptcy notice, the applicant was able to satisfy the requirement for the document to be properly addressed.
I consider that it was not able to do so.
Section 29(1) of the AI Act has two limbs – the “deemed service limb” and the “presumed time of service limb”. To enliven the presumption of service under the deemed service limb, the serving party must prove the following matters, either by direct evidence or inference from the evidence:
(a)the envelope bore the correct name and address;
(b)the envelope enclosed the relevant document to be served;
(c)the correct cost of postage was used to send the envelope; and
(d)the envelope was placed in the post.[15]
[15] See Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216 [12] (Brereton J); Pearlburst Pty Ltd v Summers Resort Group Pty Ltd; Landmark Leisure Group Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 [22] (Barrett J); Deputy Commissioner of Taxation v Clear Blue Developments Pty Ltd [2010] FCA 1223 [25] (Logan J)]
The applicant contends it has enlivened the statutory presumption of service under s 29(1) of the AI Act. In this regard, it relies on Mr Malyan’s evidence to establish each of the elements of that provision. While there was no reference in Mr Malyan’s evidence as to the use of or the correct cost of postage, I infer (and it was not a matter challenged by Mr Vlahos) that the use by Mr Malyan of the descriptor “prepaid” in connection with the envelope that this element is satisfied. I am also satisfied that the evidence of Mr Malyan establishes that the envelope enclosed the bankruptcy notice and was placed in a post box located outside the front of 525 Collins Street, Melbourne.
As far as the first element is concerned, I am satisfied that the envelope containing the bankruptcy notice bore the correct name of the intended recipient, being the respondent, Mr Vlahos. However, it does not follow necessarily from the fact that there was uniformity as between the address on the envelope and the service address (as earlier defined) that the address was “correct” for the purposes of the statutory deeming provision.
While the concept of a last known address being one directed at a place at which an individual may be reached is not rigidly defined and admits of flexible responses, the question of whether a document has been properly addressed is concerned with the machinery of the delivery process adopted and whether what is done by way of identifying the address conforms with the requirements that attach to the mode of delivery chosen. It is only in those circumstances that a person (the sender) will obtain the benefit of the deeming provision which once engaged is difficult to displace. Where the mode of delivery is service by post, it is not inapt to describe this as being a requirement to record a “postal address”.
The applicant submits that decisions such as ABW establish that a postcode is not an essential ingredient of an “address”, although the obscuring of a postcode was in that case fatal because it meant the address did not accord with that recorded on the ASIC register for the corporate debtor.
However, as the learned author of Assaf’s Winding Up In Insolvency observes “[T]here is some debate in the case law as to precisely what constitutes a proper address for the purposes of s 29(1) and specifically whether a postcode forms part of the address”.[16] One thing that is apparent, is that the cases in which a postcode was found not to constitute part of an address operated on statutory service provisions that were framed in terms that did not contain a requirement that a document be “properly addressed”.
[16] ‘Section 29(1) of the Acts Interpretation Act’ in Farid Assaf, Assaf’s winding up in insolvency (LexisNexis, 3rd ed, 2021). The divergence of opinion was also recognised by Logan J in ABW at [30].
In particular, the decisions of SZKGF and SZLBR v Minister for Immigration and Citizenship [2008] FCAFC 85 both considered the meaning of “address” in the context of a provision of the Migration Act 1958 (Cth) that required service of a document by prepaid post to “the last address for service provided to the Tribunal” or the “last residential or business address provided to the Tribunal”. The decision of Perpetual Ltd v Treloar [2009] NSWSC 386 was concerned with s 170 of the Conveyancing Act 1919 (NSW) which provided that a notice would be sufficiently served if left at or sent by post to the last known residential or business address in or out of New South Wales of the person to be served. These cases, it seems to me, are capable of being distinguished.
While I accept that Australia Post is not the arbiter of the question posed by s 28A of the AI Act, the position is different with respect to the questions posed by s 29 of the AI Act.
As I noted earlier, the applicant produced a copy of the then applicable Australia Post Terms and Conditions (AP Terms and Conditions). The AP Terms and Conditions are made under s 32(1)(b) of the Australian Postal Corporation Act 1989 (Cth) and said to apply as from 1 July 2001 to the postal and related services to which they refer.
Clause 1.1 of the AP Terms and Conditions provides that: “Unless Australia Post and a customer have a separate written agreement on terms and conditions for any service, these Australia Post Terms and Conditions set out the rights and obligations between Australia Post and the customer”.
Clause 1.2 provides: “In consideration of Australia Post agreeing to provide postal and/or related services to the customer, the customer agrees to comply with these Australia Post Terms and Conditions”.
Clause 7 sets out “Customer obligations”. At clause 7.2 it provides: “The customer must comply with the correct addressing standards specified in Appendix 1”.
Clause 7.5 states: “Where the customer fails to comply with this clause, Australia Post may in its absolute discretion refuse to provide the service”.
Appendix 1 to the AP Terms and Conditions[17] deals first with what are described as “Address components”. The appendix records that: “The address on any postal article must be left justified and contain the components shown in the table”. The table is organised with three columns, “Address component”, “Position and format” and “Comments”. The table contains the following entry:
[17] Australia Post, Appendix 1 – Correct Addressing Standards (Australia Post, 2021) cellpadding="0" cellspacing="0">
Address component
Position and format
Comments
The postcode.
The third and last component of the last address line.
It must not contain punctuation or underlining.
Mandatory.
For hand-addressed responses, the postcode should be in the Postcode Squares.
Further down in the appendix document, under the heading, “The postcode”, appears the following:
…in machine-printed addresses
In machine-printed addresses, the postcode must appear as the last item in the last line of the address, located only one or two spaces after the State or Territory abbreviation. Ignore Postcode Squares on the envelope.
…in hand-written addresses on Small Letters
Use the Postcode Squares pre-printed on the envelope in hand-written addresses. Do not use the Postcode Squares for a letter to an overseas address.
I note that this information, and the designation of a postcode as a mandatory component of an address, is consistent with the information contained in the Australia Post Letter Products and Services Guide, to which Mr Vlahos made reference in his submissions.
The result is that as far as the applicant, as consumer, contracted with Australia Post to provide postal services, it was obliged to address the envelope containing the bankruptcy notice with a postcode. This step was necessary to ensure that the envelope had been “properly addressed”. Beyond that however, I consider that the applicant was also obliged to record a postcode that corresponded with the suburb identified in the envelope before it could take advantage of the deemed service provision in s 29(1) of the AI Act.
The word “properly” is defined in the Macquarie online dictionary to mean, relevantly, as an adverb, 1. in a proper manner; 2. correctly; 3. appropriately; 5. accurately. These meanings import a need for some precision in the task to be performed.
The applicant submits that it would be productive of extraordinary results if a creditor wishing to serve a bankruptcy notice was required to go behind the last known address provided by the debtor to determine its currency and accuracy and I largely accept this submission. However, the question of whether once seized of the last known address, a creditor is relieved of checking its accuracy for the purpose of using it in connection with the postal service it has chosen as the means by which to effect service, is a different matter.
Here, it would have been a straightforward step for the applicant to check, prior to posting the bankruptcy notice, that the postcode recorded for the street address and suburb for Mr Vlahos was accurate.
The result is that the applicant is not entitled to rely on the deemed service provisions in s 29(1) of the AI Act as the bankruptcy notice was not properly addressed to Mr Vlahos
The applicant invited the Court to record a positive finding that the bankruptcy notice had been received by Mr Vlahos in circumstances where it had not been “returned to sender”. The argument being that, despite the failure to include the correct postcode for Port Melbourne on the addressing envelope, there was no practical injustice to Mr Vlahos. However, I am not satisfied that such a finding is available.
While evidence that an item of post has not been returned to sender might in some cases permit an inference that the item was received by, or at least delivered to, its intended recipient, there are factors in this case that make such an inference unreliable.
First, there is the evidence about the service address. While in some cases, a mistake as to postcode might be easily remediated, in circumstances where the postcode applied was for an adjoining suburb within the same municipality and which also contained a Dow Street, (although not a 200 Dow Street), it is readily conceivable that the application of the incorrect postcode would create delivery outcomes beyond the binary options identified by the applicant, namely, (i) delivered to Mr Vlahos; or (ii) returned to sender.
Second, and relatedly, the evidence before the Court relating to the classification of “undeliverable articles” and their treatment, is equivocal. The AP Terms and Conditions provide that an article may be deemed undeliverable based on the “reasonable opinion” of Australia Post that it does not bear an address sufficient for delivery. In those circumstances, the article would be returned to sender. However, the evidence relied upon by both the applicant and Mr Vlahos that involved exchanges with Australia Post representatives indicate that in some cases, the problem with the address will be corrected by a postal worker and efforts will be made to deliver the mail to the addressee.[18].
[18] See correspondence referred to at [64]-[65] and the exchange between Ms Chen and an Australia Post representative dated 15 March 2022 referred in the second Chen affidavit at [2] and Exhibit BC-7
There is a further problem that flows from this uncertainty. In circumstances where the applicant is not able to avail itself of the statutory presumption as to time of service of the bankruptcy notice, the question of when the notice was in fact served remains extant.
The applicant led no evidence on this point and given the uncertain nature of the evidence as to the way Australia Post might deal with an item of post that contained an incorrect postcode, there is no finding or inference that properly could be drawn as to when this might have occurred.
Of course, this is critical in relation to a document that requires a recipient to act within 21 days of the date of service (deemed or actual) of the bankruptcy notice or otherwise be taken to have engaged in an act of bankruptcy which then sets in motion a process that can lead to grave consequences.
The applicant referred in its supplementary submissions to evidence that Mr Hannan, the applicant’s solicitor, had sent the bankruptcy notice to an email address used by Mr Vlahos to communicate with Mr Hannan, on 20 August 2021. However, in circumstances where the applicant did not suggest that the sending of this email would engage the statutory presumption of service and in the absence of evidence that Mr Vlahos in fact received this email either at all or within the critical timeframe for compliance with the bankruptcy notice, I am not satisfied that it alters my conclusion that the applicant has not proved - either through reliance on the statutory deeming provision or by direct proof – that it served the bankruptcy notice on Mr Vlahos.
I wish to record that had I found that the applicant could rely on the statutory presumption of effective service I would not have been satisfied that Mr Vlahos had discharged his onus of identifying proof to the contrary.
In this regard, I accept the submission of the applicant that the evidence produced by Mr Vlahos was incomplete and did not sufficiently address the measures and/or systems in place for the receipt of mail at his place of residence. I recognise that the type of evidence that Mr Vlahos might have been expected to produce would be of a different character to that produced in respect of a commercial enterprise and/or mailroom. However, even in the residential context, it was scarce in detail as to who was responsible for checking the mail at any point in time across the relevant period, what instructions they had been provided with regarding the collection (and retention) of any mail, when they attended the property, and what (if anything) they had observed in the period for which they assumed responsibility for deliveries. Mr Vlahos’ evidence boiled down essentially to a denial of non-receipt of the bankruptcy notice which evidence “would scarcely if ever, suffice to prove ‘non-delivery’”.[19]
[19] Deputy Commissioner of Taxation v Josway Hospitality Pty Ltd [2018] FCA 466 at [2] (McKerracher J).
I further accept the submission of the applicant that the evidence that the envelope had not been returned to sender is relevant to the evaluation of the cogency of Mr Vlahos’ effort to prove non-delivery. As Sifris J (as his Honour then was) observed in In the matter ofAXF Group Pty Ltd [2019] VSC 671 at [84] in the context of a statutory demand, “the absence of a notice from Australia Post marking the Demands as undeliverable is a significant indication as to whether or not delivery had occurred”.
What orders should be made?
Proof of service of the bankruptcy notice is a necessary ingredient of proof that the respondent debtor has committed an act of bankruptcy. In the absence of proof that the applicant creditor “served … a bankruptcy notice” under s 40(1)(g) of the Bankruptcy Act, it follows that the applicant creditor will not be able to prove that “the debtor has committed an act of bankruptcy” under s 43(1)(a) of the Act by a failure to comply with the notice and the Court’s bankruptcy jurisdiction will not be enlivened.
Here, I have found that the applicant has not proved service of the bankruptcy notice. It follows that the creditor’s petition must be dismissed.
I will make an order setting aside the sequestration order as an appropriate consequential order: Robson v Body Corporate for Sanderling at Kings Beach CTS 2942 & Anor (2021) 286 FCR 494; [2021] FCAFC 143, [3] (Allsop CJ); (Markovic and Derrington JJ agreeing).
Although the trustee in bankruptcy, Robert Scott Woods (Trustee), did not take an active part in the review proceeding, by an email to this Court dated 9 September 2022, his solicitor notified the Court that: “if the respondent is successful in his application to set aside the sequestration order, then the Trustee’s costs remuneration up to the date of the Trustee being put on notice of this application and the costs of the Trustee occasioned by this application be paid by the respondent”. Given that Mr Vlahos (the respondent) has been successful, the Trustee should be given an opportunity to formalise any application that he wishes to make.
The Court will hear the parties as to consequential issues including as to the remuneration of the Trustee, costs and expenses reasonably incurred in the administration and costs of the application. There may be other consequential issues. The Court notes the comprehensive consideration of consequential orders in Robson, particularly in the reasons of Colvin J: see, [254]–[258].
I will make procedural orders that the parties file and serve written submissions and any affidavit as to consequential issues. As it may be of assistance to the applicant and Mr Vlahos if the Trustee filed his submissions and any affidavit before the parties respond, I have made orders accordingly. The parties may approach chambers if they agree that another process is more efficient. I propose that consequential issues will be determined on the papers but if any party seeks a hearing as to consequential issues the Court will list the matter for a further oral hearing.
I certify that the preceding one hundred and twenty-nine (129) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons. Associate:
Dated: 23 December 2024
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