FRANLORI PTY LTD -v- FONTERRA BRANDS (AUSTRALIA) PTY LTD [2009] WASC 365 (7 December 2009)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : FRANLORI PTY LTD -v- FONTERRA BRANDS (AUSTRALIA) PTY LTD [2009] WASC 365

FONTERRA BRANDS (AUSTRALIA) PTY LTD (ACN 095 181 669)

Corporations law - Application to set aside statutory demand - Date of service of demand - Whether demand served and if so on what date

Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1663

Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth) [2006] WASC 35; (2006) 24 ACLC 354

Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259

Ketrim Pty Ltd v AS & L Pty Ltd [2004] NSWSC 1046; (2004) 214 ALR 206

Scope Data Systems Pty Ltd v Goman as representative of the partnership BDO Nelson Parkhill [2007] NSWSC 278; (2007) 70 NSWLR 176

1 MASTER SANDERSON: This is the plaintiff's application to set aside a statutory demand. The plaintiff says that there is a genuine dispute as to the debt the subject of the demand, and that it has an offsetting claim greater than the amount of the demand. Before dealing with the merits of the application, it is necessary to determine whether the application was brought within time. It is common ground that the application to set aside the demand was filed on 28 May 2009. That being so, the application is only competent if the demand was served on or after 7 May 2009. It is the plaintiff's case that the demand was served on 7 May 2009. The defendant says the demand was served prior to 7 May 2009. To resolve this issue it is necessary to carefully examine the evidence filed by the parties.

2 It is convenient first to deal with the evidence of the defendant. The defendant relies on four affidavits in opposition to the application. There is an affidavit of Tom Mutavdzija sworn 26 June 2009, two affidavits of Ben Franzi, the first sworn 26 June 2009, the second sworn 10 August 2009 and an affidavit of Richard Brian Kostera sworn 23 July 2009.

3 Mr Mutavdzija is a legal practitioner and principal of the firm of solicitors representing the defendant. He says that on 23 April 2009 at approximately 10.30 am under cover of a letter dated 23 April 2009, he posted to the registered office of the plaintiff a statutory demand together with a supporting affidavit. He says that the registered office of the plaintiff and the address to which he posted the letter and accompanying documents was care of Versaci's at Unit 26, 70 Roberts Street, Osborne Park, WA 6017. He says that the letter was posted at a post box situated at the corner of Main Road and Bolton Street, Eltham, Victoria.

4 Mr Mutavdzija's evidence is unchallenged. It can be accepted then that the demand was posted on 23 April 2009. It is also accepted that it was posted to the plaintiff's proper registered address. Again the evidence was unchallenged and that is very important. In serving the demand by post, the defendant was relying upon s 109X(1)(a) of the Corporations Act 2001 (Cth). The plaintiff accepted that pursuant to s 109X service by post was permissible.

5 Having established when the letter was posted and that service by post was proper, it is necessary to determine when the letter was received. The defendant relies on s 29(1) of the Acts Interpretation Act 1901 (Cth). Relevantly it provides:

[S]ervice 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.

6 The question then is when would this letter have been delivered 'in the ordinary course of post'. Mr Franzi was, when he swore his affidavit on 26 June 2009, the manager of the Network Customer Requirements Unit of Australia Post. He was responsible for monitoring the service performance of mail posted and delivered in Western Australia. He says, from his knowledge of general delivery practices of the postal service of Australia Post, if a letter was posted from Eltham, Victoria at 10.30 am on 23 April 2009 and addressed to Versaci's in Osborne Park, Western Australia, the letter would normally have been received by Versaci's on or before 28 April 2009. In fact, Mr Franzi says that ordinarily the receipt date would be 27 April 2009. However, that day was a gazetted public holiday in Western Australia (Anzac Day). So in the ordinary course of post delivery would have been made to Versaci's on or before 28 April 2009.

7 That is the evidence upon which the defendant relies. The plaintiff accepts that based upon the evidence and s 29(1) there is a presumption that the letter was served on 28 April 2009. But the plaintiff says that the presumption is rebuttable: see Ketrim Pty Ltd v AS & L Pty Ltd [2004] NSWSC 1046; (2004) 214 ALR 206 [13]. It is the plaintiff's position that the evidence it leads has rebutted the presumption.

8 For the purposes of this application the plaintiff relies upon eight affidavits. Four of those affidavits are sworn by Giuseppe Versaci - the first on 10 June 2009, two identical affidavits sworn 6 July 2009 and a final affidavit sworn 31 July 2009. The plaintiff also relies upon an affidavit of Monica Isabela Manta sworn 6 July 2009, an affidavit of Patricia Angela Pellizzari sworn 6 July 2009, an affidavit of Grant Pritchett sworn 31 July 2009 and an affidavit of Frenk Anton Radaic sworn 28 May 2009.

9 In his first affidavit Mr Versaci says that on 7 May 2009 he received the letter from the defendant's solicitors enclosing the statutory demand and supporting affidavit. He says that he noted that the letter had been sent by ordinary, not registered post. The affidavit does not go into any detail about the circumstances in which the letter and the accompanying documents were received.

10 As I indicated above, the defendant's solicitors posted the letter and the accompanying documents to the plaintiff's registered office which ASIC's records show to be care of Versaci's, Unit 26, 70 Roberts Street, Osborne Park. In fact, on or about 28 April 2009 Mr Versaci relocated his office to Unit 5, 16 Sundercombe Street, Osborne Park. The two offices are approximately two kilometres apart by road but are in the same suburb. As I understand Mr Versaci's evidence, his firm, Versaci's, has a post office box at the local post office. Mail addressed to Mr Versaci's firm is not in fact delivered to that physical address. Rather, it is held in the post box and collected by one of Mr Versaci's staff. According to Mr Versaci, this arrangement has been in place for many years. The relocation of the office had no impact on mail delivery. Mail was still held at the Osborne Park Business Centre at 8 Collingwood Street, Osborne Park as it had been in the past.

11 Ms Manta is an accounts assistant who has been employed by Versaci's for approximately six years. It is one of her duties to pick up the mail sent to Versaci's. She says in her affidavit that every business day between 9.00 am and 9.15 am she attends the post office to pick up the mail. She then goes back to the office and hands the mail to the office receptionist, Ms Pellizzari. The only exception to this rule is on Wednesdays. Ms Pellizzari does not work on Wednesdays and Ms Manta opens the mail. She says that she has, over the years, seen three or four statutory demands with supporting affidavits and she knows what they look like. She is aware that they are very important. She says that the last time she opened mail on a Wednesday which contained a statutory demand was probably two years ago. She confirms that in the last two weeks of April and the first two weeks of May 2009 she attended work and collected the mail on every business day and opened the mail every Wednesday.

12 Ms Pellizzari confirms that she is the receptionist for Versaci's and that she works each week day excluding Wednesdays. She says that in the last two weeks of April and the first two weeks of May 2009 she attended the office on all work days except the Anzac Day public holiday. She confirms the procedure outlined by Ms Manta. She does not recall opening or seeing a letter from the defendant's solicitors dated 23 April 2009 enclosing the statutory demand. However, it is not her practice to read the mail. She gives the mail to Mr Versaci to deal with.

13 Mr Versaci confirms that on Thursday, 7 May 2009 Ms Pellizzari gave him mail which included the letter from the defendant's solicitors with the accompanying statutory demand and supporting affidavit. He confirms the practice of Ms Manta and Ms Pellizzari in relation to the mail and says that he is satisfied it was picked up from the post office box on 7 May 2009.

14 Mr Pritchett is the postal manager for Australia Post at the Osborne Park Business Centre. He is responsible for the supervision of the delivery of mail articles received by the Business Centre to post office boxes at the Business Centre and to street addresses in suburbs including Osborne Park. Mr Pritchett says that the Business Centre receives its mail in three instalments - the first being at or around midnight and the last being at or around 5.00 am in the morning. He says that it is the business practice of Australia Post to attempt to have delivery of all post office box items completed by 8.00 am. He says that it is very rare for post office box delivery to occur after 9.00 am.

15 So the plaintiff's position can be summarised in this way. Mail addressed to Versaci's street address is in fact delivered to Versaci's post office box at the Osborne Park Business Centre. There is a procedure in place for dealing with the mail. Each day Ms Manta clears the box. On each day, save Wednesday, she gives the mail directly to Ms Pellizzari. Ms Pellizzari opens the mail and gives it to Mr Versaci. On Wednesday, when Ms Pellizzari is not in the office, Ms Manta opens the mail and gives it to Mr Versaci if it appears to be important. Ms Manta did not see a statutory demand in the mail on 6 May 2009. When she opened the mail on that date, if there had have been a statutory demand in the correspondence, she would have recognised it and passed it immediately to Mr Versaci. Mr Versaci says that he received the statutory demand from Ms Pellizzari on 7 May 2009. On the plaintiff's case, then, the evidence establishes that the statutory demand was received by Mr Versaci on 7 May 2009. The presumption in favour of the defendant, so the plaintiff says, has been rebutted and the application to set aside the demand was made within time.

16 Appearing as annexure FAR1 to the affidavit of Mr Radaic is an ASIC search of the plaintiff. The registered office is shown as Unit 26, 70 Roberts Street, Osborne Park, WA 6017. This search was undertaken on 13 May 2009. There can be no question but that this was the registered office of the plaintiff at all relevant times.

17 There is one matter which I should mention which was referred to in both the oral and written submissions. It is clear on the authorities that delivery to a post office box is not delivery to the registered office of the company. Delivery occurs when the mail containing the demand is picked up and taken to the address which is the registered office of the company.

18 Given the way the plaintiff ran its case, there is no issue about where service might properly be regarded as being effected. It is the plaintiff's case that the statutory demand and accompanying affidavit were actually received at Mr Versaci's office. The evidence of Mr Pritchett is presumably directed at establishing just that. The question, then, is whether the evidence led by the plaintiff is sufficient to rebut the presumption in favour of the defendant that the statutory demand was served on 28 April 2009.

19 In my view, the evidence led by the plaintiff as to when the statutory demand was actually received by Mr Versaci must be accepted. There is no reason to doubt any of the evidence led on behalf of the plaintiff. No application was made to cross-examine Mr Versaci. There is nothing inherently improbable in the evidence led. It is true that it is difficult to understand where this letter might have been between 28 April when it should have been delivered and 7 May when it actually appears to have been received. Be that as it may, I am satisfied that the plaintiff's evidence ought be accepted.

20 The difficulty of course is that even accepting that evidence the documents were never served on the plaintiff's registered office. The plaintiff's registered office was Unit 26, 70 Roberts Street, Osborne Park. Assuming the documents were delivered to Versaci's post office box on 28 April 2009 and were collected by Ms Manta, they were delivered to Versaci's office at Unit 5, 16 Sundercombe Street, Osborne Park on that date. They were never served on the registered office. In his submissions, counsel for the plaintiff assumed that service on Versaci's at the Sundercombe Street address through the agency of Ms Manta was service at the registered office. But that is not correct. It was service at the office of Versaci's but that was not the address of the plaintiff shown in the ASIC records.

21 The question then is whether or not the evidence rebuts the presumption as to service in the defendant's favour. Logic suggests that it does not. If there was no actual service on the plaintiff's registered office then reliance should be placed on the deeming provision. After all, that provision is clearly directed at circumstances where delivery did not take place.

22 During the course of argument a myriad of authorities were cited. It is sufficient, I think, if I refer to only three of these authorities. The first is the decision of Owen J in Bellway Corporation Ltd v Ausdrill Ltd (1995) 13 ACLC 1663. The relevant facts (taken from the head note) can be summarised as follows. A creditor posted a statutory demand by registered post addressed to the company's registered office. The occupier of the registered office had an arrangement with the post office under which the occupier's staff collected mail from the post office rather than having it delivered. The company claimed that it had never received the demand. The occupier's records did not record receipt of the demand. The company argued that the arrangement between the occupier of the registered office and the post office negatived the deemed delivery 'in the ordinary course of post' in s 109Y (the equivalent of the present s 109X).

There is evidence that satisfies me of the following:

(a) the document concerned was addressed properly to the applicant company at its registered office;

(b) it was posted by pre-paid post;

(c) it was collected from the postbox allocated to the occupier of the premises used by the applicant as its registered office; and

(d) in the ordinary course of business operated by the occupier of the registered office, the person collecting mail from the postbox would take it back to the registered office and had it to the applicant's secretary.

I am satisfied that service has been properly effected within the meaning of the deeming provision. Just what happened to the document and why it did not actually come to the notice of the principal of the firm or the principal's secretary (if there is admissible evidence of that) or the officers of the applicant company, I am not able to say. Once there is evidence from which I can draw the proper inference that there was delivery at the registered office, the non-receipt, actual or otherwise, of the document by the officers of the company is of lesser significance. I think it is more probable than not that this document was delivered to the registered office and as I have indicated that, it seems to me, is sufficient to constitute good service (1668).

24 There are material differences between the fact situation in the Bellway case and the facts here. But what is common in the two decisions is that the evidence led by the plaintiff in both cases was to the effect that the statutory demand had not been received at the registered office. That seems to me to be the ratio of the Bellway decision and it is the crucial factor in this case.

25 The second case of importance is the decision of Master Newnes (as his Honour then was) in Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth) [2006] WASC 35; (2006) 24 ACLC 354. The facts in this case (once again taken from the head note) were as follows. The Deputy Commissioner (or his agent) posted a statutory demand and affidavit in support in a letter box in Francis Street, Northbridge at 4.40 pm on 21 June 2005 to Citystart at its registered office at 201 Sevenoakes Street, Cannington. The Commissioner believed that in the ordinary course of business and based on Australia Post delivery standards, the demand and the affidavit would have been delivered to Citystart at that address on 22 June 2005. If that were the case then Citystart's application was out of time.

26 Citystart claimed that it did not receive the demand until 24 June 2005. Mr Tilli, one of its directors, said Citystart had a post office box at Cannington Post Office and that all mail addressed to Citystart was placed in that box. A representative of Citystart would collect the mail on a daily basis. Mr Tilli claimed that the mail box was cleared on 24 June 2005 and the mail from that day (which included the demand) was not opened until the morning of 25 June 2005. Mr Tilli claimed that he had worked at Citystart's offices on Sevenoakes Street for over 20 years and during that time mail deliveries were intermittent and it had taken three or four days for mail to arrive at Cannington from destinations in the metropolitan area. No admissible evidence was provided as to how a letter addressed to Citystart's street address would ultimately end up in its post office box. Citystart claimed that the date of service of the demand was 24 June 2005, that being the date on which it received the demand and that the application to set aside the demand was therefore within time.

27 Master Newnes referred to the judgment of Owen J in the Bellway case and a number of other authorities. He concluded:

In my view, therefore, the deeming provision in s 21(1) of the Acts Interpretation Act applies, although the statutory demand was in fact delivered, not to the registered office of the plaintiff, but to its post office box. When delivery would have been effected in the 'ordinary course of post' is to be determined by when the demand would have been delivered if no special arrangements had existed in respect of the mail addressed to the plaintiff; that is, if the letter had not been diverted to its post office box. The date of delivery does not depend upon special arrangements that exist in relation to the delivery of mail to the plaintiff (360).

28 This case has similarities with the Citystart decision. It might well be said that in this case there were 'special arrangements'. Those arrangements were the delivery of mail to a post office box and collection from the post office box and delivery to an office other than the plaintiff's registered office. In my view, the similarities between the two cases are such as to warrant following the Citystart decision.

29 It is true that the Citystart decision has been subjected to some criticism. In Scope Data Systems Pty Ltd v Goman as representative of the partnership BDO Nelson Parkhill [2007] NSWSC 278; (2007) 70 NSWLR 176 White J was dealing with the following fact situation. A statutory demand was served on the plaintiff by ordinary prepaid post on 25 September 2006 to the plaintiff's registered office at Suite 2, 35 East Esplanade, Manly, NSW. The address was the address of Tattam & Co, accountants for the plaintiff. Tattam & Co had a post office box at Manly Post Office, being PO Box 935, Manly. By arrangement between that firm and the Manly Post Office all mail addressed to Suite 2, 35 East Esplanade, Manly was placed in PO Box 935. Mr Tattam of Tattam & Co collected the letter addressed to the plaintiff on the morning of Tuesday, 3 October 2006. He took the letter back to the office of the accountants which was the plaintiff's registered office. The accountants then posted the document to the plaintiff.

30 White J found that there was no evidence of any employee of Australia Post as to when a document posted in the central business district of Sydney would, in the ordinary course of post, be delivered to a post office at the Manly Post Office. His Honour then concluded that the presumption did not apply. His Honour went on to say:

In my view, the position is as follows. If the evidence establishes the time at which the article was 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 a 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 Evidence Act (Cth) (applicable to federal courts) or s 160 of the Evidence Act (NSW) (applicable to New South Wales courts), affords a presumption as to when the article is 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 [38].

31 His Honour then went on to consider the decision in Citystart. His Honour referred to the fact that the learned master had referred to the Bellway decision and said:

For the reasons I have given, Bellway Corporation v Ausdrill Ltd does not decide that in such circumstances, the demand is taken to be served when it reaches the post office box, nor that the presumption of delivery in the ordinary course of post cannot be rebutted.

...

In Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth), and in this case, the question was, and is, whether proof that the demand was diverted to the post office box, and proof of the time of collection, rebuts the presumption that the demand was served at the time it would have been served had it been delivered in the ordinary course of post to the registered office.

Neither Bellway Corporation v Ausdrill Ltd nor Bowman v Durham Holdings Pty Ltd supports the conclusion reached in Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth). I respectfully do not agree with the reasoning in that case [88] - [90].

32 In my view, nothing in the criticism directed by White J at the Citystart decision, whatever its merits in relation to the fact situation being considered by White J, undermines the point I have drawn above. Here it is not the delivery to the post office box which is at issue. In this case the special arrangements are the delivery to an office other than the registered office. That being so, in my view the statement of Master Newnes holds good.

33 Finally, there is the decision of the New South Wales Court of Appeal in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259. The facts in that case were as follows. At all material times Falgat's registered office was 12 Withers Street, Chiswick, a house which up to August 2004 was the home of the Gattellaro family, the persons concerned in Falgat. In August 2004, the Gattellaro family left that home to reside at Kellyville, but the home was maintained as the place of business and registered office of Falgat until December 2004. The address, 12 Withers Street, Chiswick was shown as Falgat's address on all relevant documents. The case itself concerned service under the Building and Construction Industry Security of Payment Act 1999 (NSW). The Chiswick address was shown on the construction contract and a payment claim. When the family left in August 2004 they caused mail to Falgat to be redirected to PO Box 708, Kellyville, NSW 2155. The creditor was not told that this had been done.

34 The payment schedule was posted on 22 October 2004 by express post from Edgecliffe 2027 to Falgat's address at Chiswick. Express post guaranteed delivery next day in respect of certain postcodes of which Chiswick was one. This postage was redirected to Kellyville and scanned as having been received at Baulkham Hills Distribution Centre at 4.54 am on 27 October 2007. This payment schedule was collected by a member of the Gattellaro family on 28 October 2004. The box had been checked on 27 October 2004, but the evidence does not disclose at what time it was checked. The judge at first instance was not satisfied that the payment schedule was not placed in the box on 27 October 2004. It was submitted for Falgat that proof that the notice was not received until 28 October 2004 displaced the presumption in s 29 of the Acts Interpretation Act. Hunt AJA dealt with this matter in a refreshingly straightforward manner. His Honour said:

The service of a document on a company is effected by posting it to the company's registered office: Corporations Act 2001, s 109X(1)(a). If the company does not change its registered address, but chooses to redirect its mail to another address, then, in my respectful opinion, s 109X continues to operate to constitute the posting of the document to that registered office as service on the company, notwithstanding the company's order redirecting its mail [66].

35 It is worth repeating again, at the risk of being pedantic, that all the evidence of the plaintiff in this case establishes is that the statutory demand was never delivered to the plaintiff's registered office. It is true that the evidence establishes the date upon which the demand came to the attention of Mr Versaci, but that is not to the point. There is no evidence which rebuts the presumption. That being so, the presumption must apply and delivery is deemed effected on 28 April 2009. In the circumstances, then, the plaintiff's application ought be dismissed. I will hear the parties as to the form of orders and as to costs.