Deputy Commissioner of Taxation v Trio Site Services Pty Ltd, in the matter of Trio Site Services Pty Ltd

THE EVIDENCE RELATING TO NON-DELIVERY 6 The evidence relating to non-delivery of the statutory demand is found in an affidavit of Ashley Peter Vane, a director of the defendant, sworn 24 April 2007, and an affidavit of Kathleen Mannile sworn 3 May 2007. 7 According to a Company Search in evidence, the defendant has two directors, but the other one, Grant Cooper, has not been referred to in the affidavits. I therefore treat him as having had no role to play in the present matter. 8 Mr Vane's evidence is to the following effect. The defendant did not receive the statutory demand. Unit 3, 16 Accolade Avenue, Morisset, NSW 2264 ("Unit 3") is the defendant's principal place of business as well as its registered office. Unit 3 is an industrial unit located in a complex of industrial units. There is no mail box relating to Unit 3. However, the defendant maintains a Post Office box at the Morisset Post Office, namely PO Box 590, Morisset NSW 2264 ("Box 590"). 9 According to Mr Vane, the defendant has maintained Box 590 since before February 2006. An annexure to Mr Vane's affidavit shows that Box 590 was "issued" on 22 February 2006 and that the defendant paid $60.00 for Box 590 on 31 March 2006, but the plaintiff did not suggest that I should not accept Mr Vane's evidence that the defendant had maintained Post Office Box 590 as its Post Office box from before February 2006 down to the present time. 10 In Mr Vane's experience, all mail addressed to Unit 3 is delivered by Australia Post to Box 590. 11 The defendant employs Ms Mannile as an administrative assistant, and has done so since 25 February 2006. Since the commencement of her employment, part of her duties has been to collect mail from Box 590, deliver it to the defendant's office and distribute it to the appropriate officer of the defendant. Mr Vane states that it is the defendant's policy that "any official documents relating to the company" are handed by Ms Mannile to him. Ms Mannile works on Tuesday, Wednesdays and Thursdays only, and on the days when she does not work, the mail is not collected. 12 Mr Vane states that Ms Mannile has not been absent from work on any of her work days between 28 November 2006 and the date of his affidavit. He annexes to his affidavit a copy of her work record from 28 November 2006 to 19 April 2007. This shows only that on 20 and 21 December 2006 and on certain dates in 2007 she was paid for certain holidays and sick leave. I do not see the relevance of this evidence. I accept that Ms Mannile was at work on Tuesday 28, Wednesday 29 and Thursday 30 November 2006, and on Tuesday 5, Wednesday 6 and Thursday 7 December 2006, and, if it matters, on Tuesdays, Wednesdays and Thursdays down to 20 December 2006. 13 Mr Vane states that the first time he saw the statutory demand and accompanying affidavit was when he received the originating process to which they were respectively Annexures A and B. He received the originating process on 22 February 2007. It was posted to the defendant at Unit 3, and was brought to his attention by Ms Mannile in accordance with the practice described above. 14 Ms Mannile's affidavit comprises two paragraphs. She states that she is the secretary of the defendant, that she is the only person who collects the mail, and that "all official documents relating to the company are handed directly to Mr Vane". I take this to mean that she hands such documents to Mr Vane without the intervention of any intermediary.

LEGISLATION 15 Section 459C of the Corporations Act provides, relevantly, that on an application to wind up a company in insolvency, the Court must presume that a company is insolvent if, during the period of three months ending on the day when the application was made, the company failed (as defined by s 459F) to comply with a statutory demand. Section 459E provides, relevantly, that a person may "serve" on a company a statutory demand which must require the company to comply with the demand "within 21 days after the demand is served on the company". Section 459F provides, relevantly, that the period for compliance is 21 days after the demand is "served". 16 The importance of the notion of "service" in these provisions is obvious. The statutory demand must be served on the company, and the 21 day period for compliance is calculated from the time of service of the demand on the company. If we do not know that the statutory demand was served on, or at least by, some date, we cannot know that the 21 day period has expired without compliance and that the presumption as to insolvency has been enlivened. 17 Section 142(1) of the Corporations Act provides that a company must have a registered office in the jurisdiction and that communications and notices to the company may be addressed to its registered office. Section 109X of the Corporations Act provides, relevantly, that "[f]or the purposes of any law, a document may be served on a company by: (a) leaving it at, or posting it to, the company's registered office". The effect of this grammatically irregular provision is clear: for the purposes of ss 459E and 459F, a statutory demand may be served by nothing more than being posted to the company's registered office - posting it to that registered office is service. 18 Section 160(1) of the Evidence Act 1995 (Cth) ("the Evidence Act") provides: It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted. In so far as this provision applies, it would raise a presumption that the statutory demand in the present case was received at Unit 3 on Monday 4 December 2006. 19 Section 5C of the Corporations Act provides, relevantly, that the Acts Interpretation Act 1901 (Cth) ("the Acts Interpretation Act") applies to the Corporations Act. Section 29 of the Acts Interpretation Act provides: 29 Meaning of service by post (1) Where an Act authorizes 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 unless the contrary intention appears 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. 20 Within subs (1) of s 29 there are two limbs: the deemed service limb and the presumed time of service limb. Subsection (2) signifies that s 160 of the Evidence Act prevails over s 29(1) of the Acts Interpretation Act to the extent of any inconsistency between their respective operations. There has been no attempt to show when the statutory demand would be delivered either to Box 590 or to Unit 3 "in the ordinary course of post".

FINDINGS 21 No deponent was cross examined. 22 I find that: (1) On 28 November 2006, Ms Taylor posted the statutory demand to the defendant's registered office, Unit 3; (2) Ms Taylor had no reason to think that the statutory demand would not be delivered to Unit 3 in the ordinary course of post; (3) Pursuant to an arrangement express or implied between the defendant and the Post Office, mail addressed to the defendant at Unit 3 is not delivered there but is deposited into the defendant's Post Office Box 590, Morisset; (4) Mr Vane did not receive the statutory demand; (5) The defendant's business practice is that Ms Mannile collects the mail from Box 590 on her working days, Tuesdays, Wednesdays and Thursdays, takes the mail to Unit 3, and opens it and distributes it to the relevant persons, in the case of "all official documents relating to the company", directly to Mr Vane; (6) In view of (4) above, Ms Mannile did not hand the statutory demand to Mr Vane.

CONSIDERATION 23 In Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 ("Fancourt"), there was a question whether an owner of goods "served" notice on the hirers of them as required by s 13 of the Hire Purchase Act 1959 (Qld). The High Court had to consider s 42(1)(c) of that Act, which was a provision similar to s 109X of the Corporations Act, and s 39(1) of the Acts Interpretation Acts 1956 to 1962 (Qld) as it then was, whichwas similar to s 29(1) of the Acts Interpretation Act. The Court held (at 96-97) that the second limb of the Acts Interpretation Act provision is not enlivened where there is proof of non-delivery. The consequence, their Honours said, is that notwithstanding that service by post is permitted and the requirements for service by post are complied with, where it is necessary to establish service at a particular time, proof of non-delivery is as effective as proof of non-service. In other words, by reason of the expression "unless the contrary is proved", the company can, by proving that "delivery" did not occur, overcome the effect of the deemed service provision entirely. Their Honours observed (at 97): "It may be thought that there is an anomaly in such a result". 24 Their Honours considered, however, that "delivery may be different from receipt by the intended recipient", and that, provided delivery is not disproved (such as by return of the postal article to the sender undelivered), the mere fact of non-receipt does not displace the result that delivery is deemed to have been effected at the time at which it would have taken place in the ordinary course of the post (at 97). In Fancourt itself, their Honours noted, there was no evidence of non-delivery, and it followed that service was deemed to have taken place at the time when the relevant letter or packet would have been delivered in the due course of the post. 25 The defendant submits that non-delivery is proved in the present case, apparently because: there is no receptacle for postal articles at Unit 3; there is an arrangement between the defendant and the Post Office for the diversion of mail addressed to Unit 3 to Box 590; if delivery to Box 590 had taken place, the only person who collected the mail from that box, Ms Mannile, would have collected the envelope containing the statutory demand and taken it to Unit 3; and she would there have handed the statutory demand to Mr Vane who, at the same time, would have "received" it. 26 Section 109X of the Corporations Act, and the first limb of s 29(1) of the Acts Interpretation Act are to the effect that by duly posting a statutory demand to a company's registered office, the sender, without more, "serves" it on the company. The first limb of s 29(1) has that effect because a "contrary intention" does not appear in s 109X or elsewhere and because that limb does not affect the operation of s 160(1) of the Evidence Act as it does not touch on the presumption as to time of receipt, which is the sole subject matter of s 160(1). 27 Commonly, as in the present case, the sender has no knowledge of the physical circumstances at the registered office or of any special arrangement between the company and the Post Office for the diversion of the company's mail to a Post Office box. There are strong policy reasons why any risk arising from the fact that there is no letter box or other facility for receipt of mail at the registered office or from such an arrangement should lie with the company. It is the company that chooses not to have such a facility, or to have as its registered office premises to which it is not practicable for mail to be delivered, or simply to make an arrangement with the Post Office for mail addressed to the company's registered office not to be delivered to that office but to be deposited in its Post Office box instead. 28 Section 109X of the Act and the first limb of s 29(1) of the Acts Interpretation Act reflect these policy considerations. 29 The fact remains, however, that s 160(1) of the Evidence Act (likewise the second limb of s 29(1) of the Acts Interpretation Act) allows for the possibility of the company displacing the presumption as to time of receipt (and s 29(1)'s deemed time of service provision). The plaintiff did not adduce evidence directed to proving the time of service, but relied on the statutory presumption. I suggest that in this respect the plaintiff is in the same position as that of nearly all persons who wish to serve documents on a company by posting them to its registered office. 30 The defendant did not raise any point as to whether the time of service in this case is that provided for in s 160(1) of the Evidence Act or in the second limb of s 29(1) of the Acts Interpretation Act. In fact, subs (2) of s 29 of the Acts Interpretation Act has the effect that it is the "fourth working day" period specified in s 160(1) of the Evidence Act that applies, because, by reason of subs (2), s 29 is not permitted to affect the operation of s 160 of the Evidence Act. In any event, the defendant's submission is simply that the plaintiff is not in a position to rely on either statutory provision as to time because, on the evidence, the statutory demand was not delivered to Unit 3 at all. 31 In my view, the defendant has not adduced "evidence sufficient to raise doubt about the presumption" in terms of s 160(1) of the Evidence Act (or, a fortiori, "proved" the contrary of the deemed time of service provision of the Acts Interpretation Act). 32 I do not know why Mr Vane did not receive the statutory demand. There are three possibilities as to where it went astray: between posting by Ms Taylor and arrival at Box 590; between collection from Box 590 and arrival at Unit 3; or within Unit 3. The defendant's evidence does not persuade me that the first or second possibility is more probable than the third, or that the evidence is sufficient to raise doubt about whether the third explanation is the right one. 33 I need not discuss what the legal position would have been if the second possibility had been proved to have occurred, for example, if it had been proved that Ms Mannile had collected the envelope containing the statutory demand from Box 590 and lost it before she reached Unit 3. 34 It is certainly possible, if not probable, that Ms Mannile collected the envelope containing the statutory demand when she cleared Box 590 on Wednesday 29 or Thursday 30 November 2006, or on the Tuesday, Wednesday or Thursday of the following week, and took it to Unit 3 in accordance with the business practice established by the evidence, but that subsequently something went awry within Unit 3 resulting in Mr Vane's not receiving the statutory demand. The envelope containing the statutory demand may have been mislaid by Ms Mannile within the office and inadvertently discarded as rubbish. It is not as if the defendant put into evidence daily incoming mail records demonstrating that the statutory demand did not reach Unit 3. Nor is there evidence that the envelope containing the statutory demand was returned by the Post Office to the plaintiff (it was not suggested that the plaintiff must fail for not having led express evidence of non-return of the envelope). Mr Vane and Ms Mannile can go no further than to depose to a business practice, and, in the case of Mr Vane, to the fact that he personally did not receive the statutory demand. 35 In my opinion, it does not displace or raise doubt about the presumption as to the time of receipt found in s 160(1) of the Evidence Act to prove that an employee of the company, rather than Australia Post, was the means by which a postal article was transported from the Post Office to the company's registered office. A similar observation would apply, mutatis mutandis, to the deemed time of service provision found in the second limb of s 29(1) of the Acts Interpretation Act. 36 Counsel for the parties referred me to several authorities on the statutory provisions to which I have referred, in factual contexts in which mail addressed to a company's registered office was deposited in its Post Office box rather than delivered by post to the registered office. These "diversion arrangement" cases were recently comprehensively reviewed by White J in the Supreme Court of New South Wales in Scope Data Systems Pty Ltd v David Goman as Representative of the partnership BDO Nelson Parkhill [2007] NSWSC 278. 37 In view of my conclusion that the evidence is not sufficient, in the light of the evidence of Ms Mannile's practice of collecting the mail from Box 590 and taking it to Unit 3, to raise doubt about the presumption under s 160(1) of the Evidence Act that the statutory demand was received at Unit 3 on Monday 4 December 2006, I need not discuss the question whether, and if so in what circumstances, an arrangement for the diversion by the Post Office of mail addressed to a company's registered office to a Post Office box can be relied on by a company to overcome the statutory presumption as to time of receipt contained in s 160(1) of the Evidence Act and the deemed time of service provision contained in the second limb of s 29(1) of the Acts Interpretation Act. 38 Before I conclude, I make the following observations concerning the state of evidence in this case. As noted earlier, no witness on either side was cross examined. The defendant did not dispute that the statutory demand was posted to Unit 3 as Ms Taylor deposed, but I would have expected the plaintiff to adduce more precise evidence than was led here of posting. I am left to infer on the basis of Ms Taylor's unchallenged affidavit evidence that she remembered on 15 January 2007 (when she made her affidavit) having attended a Post Office on November 28 2006 and posted the statutory demand there in an envelope addressed to Unit 3. Were there no business records of this posting? None were put in evidence. 39 Where, as here, delivery is put in issue, a plaintiff should adduce detailed evidence of the facts relied upon to prove posting. The evidence should include express evidence that the document was not returned to the sender undelivered. 40 The defendant's evidence was also slender but this may be excusable. In a small business, a record of incoming mail may be maintained. If not, the company simply suffers the disadvantage when a case such as the present one arises of not being able to prove a negative. Nonetheless, the present defendant's evidence might also, with benefit, have been more detailed. At least, the evidence should have addressed the question of the recording of mail collected from the Post Office and received at Unit 3, the opening and distribution of the mail at Unit 3, the number of staff there to whom mail was distributed, and Ms Mannile's state of recollection or lack of recollection of relevant events.

CONCLUSION 41 The statutory demand was served. The presumed date of service is Monday 4 December 2006. The statutory demand was not complied with within a period of 21 days after that date. The defendant is presumed to be insolvent. 42 The plaintiff has complied with all formal requirements. I would exercise my discretion to order that the company be wound up and that a liquidator be appointed. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Solicitor for the Plaintiff: Australian Taxation Office, Legal Services Branch