REASONS FOR JUDGMENT
1 This is a reference from the registrar's corporations list today and an appropriate reference at that. The matter for decision arises in the context of an application for the winding up of Clear Blue Developments Pty Ltd (Clear Blue Developments) by a Deputy Commission of Taxation (Deputy Commissioner).
2 On the matter being called on for hearing before a registrar this morning, there was no appearance by, or on behalf of, the defendant corporation. There was, though, apart from an appearance on behalf of the Deputy Commissioner, an appearance by a solicitor, Mr Morgan, of Forbes Dowling Lawyers on behalf of a supporting creditor, Holcim (Australia) Pty Ltd (Holcim).
3 On behalf of Holcim, Mr Morgan, as he did before me, announced that he appeared to support the Deputy Commissioner's application for the winding up of Clear Blue Developments. In so doing, and quite properly, he drew to the registrar's attention a body of authority to which I will, shortly, make reference, touching upon the question of whether service of the statutory demand, alleged non-compliance with which forms the basis of the winding up application, had been proved. I shall detail the proof relied upon by the Deputy Commissioner, shortly. It suffices to say, for the moment, that the form of proof offered was one which, to the registrar's knowledge, was a common form of proof. That being so, the registrar formed the view that it was appropriate to refer the winding up application to a judge for hearing.
4 As I have already indicated, the Deputy Commissioner relies upon non-compliance with a statutory demand to give rise to the presumption for which the Corporations Act provides as to the inability of the company to pay its debts. Much turns, therefore, upon whether the Deputy Commissioner has proved service of a statutory demand, the requirements of which have not been complied with. Section 109X of the Corporations Act 2001 (Cth) (Corporations Act) provides, materially:
Section 109X(1), service:
For the purposes of any law, a document may be served on a company by:
(a) … posting it to, the company's registered office.
Section 109X(6), service in a different way:
This section does not affect:
(a) any other provision of this Act, or any provision of another law, that permits; or
(b) the power of a court to authorize;
a document to be served in a different way.
5 The means by which the Deputy Commissioner chose to serve the statutory demand on Clear Blue Developments was by post. The statutory demand concerned was in form 509H. It was addressed to Clear Blue Developments of Douglas, Gibb & Lewis Financial Solutions, 71 Victoria Street, Mackay, Queensland 4740. It was dated 1 July 2010 and signed by a Deputy Commissioner of Taxation (Mr P.M. Duffus).
6 The demand is for payment of a running balance account deficit debt as at 1 July in the total amount of $116,196.90. The debt is said in the demand to be comprised of amounts due under the "BAS provisions" as defined in subs 995-1 of the Income Tax Assessment Act 1997 (Cth). It is not necessary further to detail the composition of the debt. It suffices to note that a debt of that kind is one which is owed to the Commonwealth and payable to the Commissioner of Taxation.
7 In support of the application for winding up the proof offered of the service by post of the statutory demand comes from an affidavit sworn by Ms VL Hammerton, who is an officer employed in the Townsville office of the Australian Taxation Office. She deposes, materially, that she posted the statutory demand which I have described "together with an affidavit accompanying statutory demand by prepaid post to the registered office of the company at Douglas, Gibb & Lewis Financial Solutions, 71 Victoria Street, Mackay, Queensland 4740". She uses the word "posting" to describe what evidently is an action she took personally. Her statement that the statutory demand and affidavit accompanying it were sent to the registered office is, of course, no evidence itself that the address concerned was the registered office of the company. There is, though, other evidence before me which establishes that fact.
8 The question then is whether it has been proved by that evidence the serving of the statutory demand and supporting affidavit concerned? It was on that subject that Mr Morgan provided the registrar and, in turn, me with the benefit of reference to a line of cases in State Supreme Courts exercising federal jurisdiction under the Corporations Act. The subject does not appear to have been one dealt with by a judge of this Court or, for that matter, at intermediate appellate level in any State Supreme Court.
9 A convenient starting point for the line of authorities is Grant Thornton Pty Ltd v Green Global Technologies Limited [2009] QSC 262. That was an application in the Supreme Court of Queensland before Daubney J by Grant Thornton Queensland for the winding up of Green Global Technologies. A controversy arose before his Honour as to whether proof of service of the statutory demand by post had been evidenced. The affidavit concerned was in these terms:
I did, on the 13th of March 2009, cause a letter dated 13 March 2009, enclosing the Creditor's Statutory Demand for Payment of Debt dated 12 March 2009 and an Affidavit of Debt … to be forwarded by prepaid post, pursuant to the provisions of the Corporations Act 2001 (Cth), to the registered office of GREEN GLOBAL TECHNOLOGIES.
10 His Honour at page 7 stated:
The question then is whether the affidavit, and in particular, the statement to which I have just referred is sufficient evidence of proof of posting to enable the applicant to invoke the benefit of deemed service pursuant to section 109X of the Corporations Act. The short answer, it seems to me, is that it is not.
In that regard the judgment of Barrett J in Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126 is instructive. In that case the affidavit of service of the statutory demand was by the solicitor for the applicant. His Honour extracts the relevant part of that affidavit of service at [18] in his judgment.
The affidavit of service in that case exhibited copies of letters and other documents which were exhibited to the affidavit and included specifically a deposition that one of the exhibited documents was a "Letter that I caused to be sent by prepaid ordinary post to the plaintiff at its registered office on 15 August 2007 which enclosed the original of the document, a true copy of which appears as Annex B to this affidavit".
At [22]-[24] of his judgment, Barrett J referred to a number of previous authorities which had considered the proof necessary and adequate to prove service by post and said:
Section 109X(1)(a) of the Corporations Act says that a document may be served on a company by "posting it to the company's registered office". Proof of service of a document on a company by "posting it to the company's registered office" involves proof of the several elements identified by Debelle, J in Dwyer v Canon Australia Pty Ltd [2007] SASC 100 (at [6]):
In order to be able to establish service by post upon a company it is therefore necessary to prove that the letter was:
• Properly addressed;
• Pre-paid;
• Posted as a letter and;
• Sent to the registered office of the company.
Service by post will not be established unless each of those facts has been proved.
[23] To like effect our observations of Brereton J, in Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWC 1216 at [12] concerning service by post:
Proof of service by post requires, at least:
• Proof that the envelope bore the correct name and address;
• Proof that the envelope contained the relevant document to be served;
• Proof that the envelope bore the correct cost of postage and;
• Proof that the envelope was placed in the post.
[24] In the present case, there is no direct evidence about what appeared on the face of the envelope; there is only evidence of what appeared on the letter of 15 August 2007. Indeed, there is no direct evidence of the existence of any envelope in that, while it is said in Mr Bailey's affidavit that the letter was sent by prepaid post, there is no explicit statement that the letter (and the Annex "B" documents said to have been enclosed with it) were put into any envelope. There is no evidence of the amount or value of any stamp of franking affixed to any such envelope, and there is no direct evidence that anyone lodged any stamped or franked envelope (and contents) at any post office or in any post box.
Having made those observations, his Honour found that with the evidence in that state before him he could not find that the statutory demand was, as contemplated by s 109X(1)(a), posted to the company's registered office.
I am left in a similar state so far as the evidence of service by post in this matter is concerned. I have already referred to the only deposition relied on to prove service of the statutory demand by post. There is no evidence before me of any of the processes within the applicant's solicitor's office which could give me any proper basis for concluding that posting of the documents in question in an envelope addressed to the registered office of the respondent company actually occurred. Accordingly, I find that the applicant has not proved service of the statutory demand by post.
11 The other authorities to which I was referred were each decided in August this year. They are, in date order, Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869 (Barrett J), Smirski v Macander [2010] NSWSC 929 (Hallen AsJ) and Renegade Rigging Pty Ltd v Hanlon Nominees Pty Ltd [2010] VSC 385 (Ferguson J). It suffices to note of these three cases that no different approach to that evident in Green Global in respect of what is entailed for the purpose of proving service by post for the purposes of s 109X of the Corporations Act is evident. In Brown, having referred, inter alia, to Green Global, Barrett J at [13] put the matter pithily this way:
In order to prove service by post, it is necessary that the evidence of one or more witnesses establish a number of core and indispensable matters: that the document said to have been served by the posting of it to a given address was placed inside an envelope; that the envelope had that address written or typed on its face; that a postage stamp or franking of the necessary amount was affixed to the envelope; and that the envelope so addressed and stamped or franked was physically deposited in the post either at a post office or by being dropped into a post box for the reception of mail articles.
12 Renegade Rigging, unlike the other authorities to which I have referred, offers the additional benefit of observations in relation to s 160 of, (in that case), the Evidence Act 2008 (Vic) (Evidence Act (Vic)) which is in the uniform form and, thus, in like terms to s 160 of the Evidence Act 1995 (Cth) (Evidence Act (Cth)). The Evidence Act (Cth), applies to a proceeding in this Court.
13 Having noted that s 160 of the Evidence Act (Vic) was in the same terms as s 160 of the Evidence Act (Cth), Ferguson J drew attention to a judgment of White J in the New South Wales Supreme Court as to an interaction between s 29 of the Acts Interpretation Act 1901 (Cth) (Acts Interpretation Act) and s 160 of the Evidence Act 1995 (NSW). The latter is also in the uniform form and, thus, in the same terms as both the Evidence Act (Cth) and the Evidence Act (Vic) section. The upshot of the observations made by White J in Scope Data Systems Pty Ltd v Goman (2007) 70 NSWLR 176 was that s 160 in the uniform Evidence Act form applied:
…as a means of proving when a document is taken to have been delivered in the ordinary course of post, or, if it is established that the document was not delivered in the ordinary course of post, when it is taken to be delivered.
14 White J also made the following observation in respect of the interaction between s 29(1) of the Acts Interpretation Act and s 160 of the Evidence Acts holding:
[38] In my view, the position is as follows. If the evidence establishes the time at which the article is delivered to the postal address, then that is the time at which service is taken to be effected. If the evidence does not establish the time at which delivery was effected, then, unless the contrary is proved, delivery is deemed to have been effected in the ordinary course of post. What that is is a question of fact to be proved by evidence. In the absence of evidence on the topic, and in the absence of any presumption, there will be no proof that the article was delivered at a particular time. If it is established that the article was not delivered in the ordinary course of post, but the evidence does not establish when it was delivered, then again there will be no evidence as to the time of delivery. In either case, s 160 of the 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 to be taken to have been delivered. The presumption may assist in proving when delivery was made in the ordinary course of post. If the evidence shows that the article was not delivered in the ordinary course of post, the presumption may assist in proof of when the document was delivered.
15 Ferguson J at [21] agreed with White J's reasoning in Scope Data Systems as, with respect, do I.
16 There was an acceptance before his Honour in Renegade Rigging that proof of the posting of the statutory demand and supporting affidavit required proof that the envelope:
(a) bore the correct name and address;
(b) contained the relevant document to be served;
(c) bore the correct cost of postage; and
(d) was placed in the post.
17 A Deputy Commissioner of Taxation is a person who falls within the definition of "Commonwealth agency" for the purposes of the Evidence Act (Cth) in that a Deputy Commissioner is a person holding office or exercising power under or because of a law of the Commonwealth: see the definition in Pt 1 of the Dictionary and s 3 of the Evidence Act (Cth). That being so, and in relation to a statutory demand made by a Deputy Commissioner of Taxation, s 163 of the Evidence Act (Cth) is also pertinent. Section 163(1) provides:
(1) A letter from a Commonwealth agency addressed to a person at a specified address is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) to have been sent by prepaid post to that address on the fifth business day after the date (if any) that, because of its placement on the letter or otherwise, purports to be the date on which the letter was prepared.
18 Letter is defined by s 163(2) in very broad terms to mean:
…any form of written communication that is directed to a particular person or address…
19 The definition further contains my inclusion, a number of particular references as to what constitutes a "letter" as defined. Those particular references do not, in my opinion, derogate from the general opening words of the definition. Those words in their generality, in my opinion, are quite capable of and do apply to a statutory demand in form 509H. Such a demand, though formal in terms of its wording, is nonetheless a form of written communication that is directed to a particular person, ie, a corporation, at a particular address.
20 Section 183 of the Evidence Act (Cth) provides that if a question arises about the application of the provision of this Act in relation to a document or thing the court may:
(a) examine the document or thing; and
(b) draw any reasonable inferences from it, as well as from other matters from which inferences may properly be drawn.
21 On the face of the statutory demand concerned, it is in terms of s 163(1) a letter as defined from a person holding office under a law of the Commonwealth (ie, the Deputy Commissioner), addressed to a person (ie, addressed to Clear Blue Developments), at a specified address (ie, that given in the statutory demand). That being so, and in the absence of evidence sufficient to raise a doubt, a statutory presumption would, in my opinion, arise as to the document having been sent by prepaid post to the address specified in the statutory demand on the fifth business day after the date borne on the demand. That date, 1 July 2010, on the face purports, in my opinion (and in terms of s 163(1) and having regard to the inferences one may draw under s 183) to be the date upon which the statutory demand was prepared.
22 Here though (as Mr Morgan has highlighted and perhaps even ironically) there is evidence before me which creates a doubt as to a presumption which would otherwise follow in terms of the statutory demand having been sent by prepaid post. That evidence is evidence of Ms Hammerton to which I have referred. She deposes that she posted it on 1 July 2010, ie, the date of the demand. That raises then a doubt that it was posted on the fifth business day after 1 July. That being so, it is unnecessary to consider further the operation of s 163 and, in particular, the question as to whether the affidavit accompanying the statutory demand would also fall within the definition of "letter" in s 163(2).
23 The result then is that one is cast back to the line of authority to which I have referred as to what is entailed in proof of service by post for the purposes of s 109X of the Corporations Act. Those authorities are, in a sense, distinguishable at a factual level in that each, in one way or another, was a case where the evidence as to proof of service often was that of a person causing the demand and accompanying affidavit to be posted or in some other way; not personally posting the letter containing the demand and accompanying affidavit, but rather, placing those documents in what might be termed an outgoing mail tray. That does not derogate from the principle as to what was regarded in those cases as necessary for proof of service.
24 Those cases though do not, with respect, address the question of whether inferences may be drawn, but rather focus upon an absence of direct evidence. That, with respect, seems to me not wholly to embrace what may constitute proof. I have already made reference to s 183 of the Evidence Act (Cth) in relation to inferences. The common law position is, with respect, neatly summarised by Spigelman CJ in Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at [84] to [88] inclusive. The Chief Justice there states:
84 It is often difficult to distinguish between permissible inference and conjecture. Characterisation of a reasoning process as one or the other occurs on a continuum in which there is no bright line division. Nevertheless, the distinction exists.
85 Lord Macmillan in Jones v Great Western Railway Company (1931) 144 LT 194, in the context of stating that a possibility that a negligent act caused injury was not enough, said at 202:
"The dividing line between conjecture and inference is often a very difficult one to draw. A conjecture may be plausible but is of no legal value, for its essence is that it is a mere guess. An inference in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have the validity of legal proof. The attribution of an occurrence to a cause is, I take it, always a matter of inference."
86 After referring to this passage, Sir Frederick Jordan in Carr v Baker (1936) 36 SR(NSW) 301 at 306 said:
"The existence of a fact may be inferred from other facts when those facts make it reasonably probable that it exists; if they go no further than to show that it is possible that it may exist, then its existence does not go beyond mere conjecture. Conjecture may range from the barely possible to the quite possible."
87 As Lord Wright put it in a frequently cited passage in Caswell v Powell Duffryn Associated Collieries Limited (1940) AC 152 at 169-170:
"Inference must be carefully distinguished from conjecture or speculation. There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish. In some case the other facts can be inferred with as much practical certainty, as if they had been actually observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture.
88 The test is whether, on the basis of the primary facts, it is reasonable to draw the inference. (See eg Layton v Vines (1952) 85 CLR 352 at 358).
25 Here, then, the facts which are proved by the evidence of Ms Hammerton are these:
(a) she is an officer employed in the Australian Taxation Office;
(b) in that capacity, she personally posted on 1 July 2010 the statutory demand together with the accompanying affidavit;
(c) she did this by what she terms "prepaid post"; and
(d) what was posted by that means was posted to the address which I have already given.
26 The expression "prepaid post", which Ms Hammerton uses, has a factual element as well as a legal element. By that I mean that that expression appears in s 160(1) of the Evidence Act (Cth). The factual element though is that, as a Commonwealth officer in an official capacity, she prepaid the post for the statutory demand and the accompanying affidavit to be sent to the address concerned. Further, at a factual level, she has posted those articles by what she describes as prepaid post.
27 A number of inferences, in my opinion, arise from the evidence which she has given.
28 Firstly, and inferentially, the statutory demand and accompanying affidavit were not just put by her as bare documents into a postal receptacle. Rather, at a factual level, her use of that expression "prepaid post" necessarily, in my opinion, carries the inference that those particular documents (ie, the statutory demand and accompanying affidavit) were housed in an envelope of some sort.
29 One does not, in my respectful opinion, leave one's common sense or experience of worldly life outside a courtroom when coming to exercise the judicial power of the Commonwealth. When I look at the proved facts of Ms Hammerton's affidavit, the inference I draw is that when she has used the expression "prepaid post", she is referring to putting the documents concerned into an envelope and prepaying postage.
30 There is then a question as to whether she has prepaid sufficient postage? I have no evidence before me that the documents concerned were returned due to insufficient postage. I should expect, having regard to the obligations that are owed to a court by the Commissioner and those representing him, that, had such an event occurred, that would have been evidenced.
31 Be that as it may, the question I ask myself, for it truly seems to be the only missing matter in terms of direct evidence or inference, is whether sufficient postage was applied. I have already referred to the capacity in which Ms Hammerton acted when she personally posted these articles. It seems to me inherently unlikely that anything less that the required postage was applied to what she caused to be posted.
32 I ask myself, having regard to the authorities concerning inferences so conveniently drawn together by Spigelman CJ, whether that is conjecture about possibility or an inference. As the cases cited by his Honour highlight, there is a continuum in that regard. In that continuum, and having regard to the facts which are evident in the affidavit, it seems to me that the inference is open that the exercise of posting a statutory demand and accompanying affidavit in respect of a large amount owed to the Commonwealth and payable to the Commissioner was unlikely to be attended by some sort of expediency as far as saving on postage was concerned. My opinion is that in the continuum between conjecture and permissible inference there is a permissible inference there that prepaid post was indeed the applicable postage.
33 Expediency is not, of course, a basis for drawing an inference. It is a serious step, under the Corporations Act, to make a statutory demand and the presumption of non-compliance in turn places a company in jeopardy of being wound up. I have taken that into account in considering whether I should draw the inference which I have described.
34 The result, therefore, is that assuming the correctness of the line of authority with which I have been taken, there is, in this case, evidence which goes to prove that the statutory demand was served by post.
35 All of the other proofs that are necessary for the making of a winding up order are present in the material read on behalf of the Commissioner. That being so, the orders which I make are:
1. Clear Blue Developments Pty Ltd ACN 118 175 287 be wound up in insolvency under the provisions of the Corporations Act 2001.
2. Gregory Michael Maloney, an official liquidator, be appointed liquidator of the company.
36 In respect of costs:
1. I reserve the question of costs in respect of the plaintiff as well as the supporting creditor.
2. I shall give judgment in respect of costs at 9.30 on Wednesday, 10 November.
3. I direct that the Deputy Commissioner's submissions as to costs be filed by close of business on 8 November 2010.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.