Service
2The plaintiff, reliant on the evidence of its solicitor Mr Shacklady, says that the originating process was served at the defendant's address for service nominated in the creditor's statutory demand, namely the offices of Messrs Milne Berry Berger & Freedman (MBBF), Solicitors, at 254 Elizabeth Street, Sydney, between 17.05 and 17.10 on 7 June 2012. The defendant, reliant on the evidence of its (former) solicitor, Mr Berger, says that it was not served on that occasion. It is common ground that if it was not served then, it was not served within time, as the 21-day period expired on 8 June 2012.
3Mr Shacklady's evidence was initially to the effect that he thought he took four copies of the originating process (and supporting affidavit) to the Registry at about 15.30 on 7 June, filed them (copy 1 being retained in the Court file) and returned to Mr Loxton's chambers. Counsel reminded him of the imperative to serve the originating process that day. Either then, or possibly at some later stage before mid-July, he gave one sealed copy to Counsel (copy 2). He retained copies 3 and 4, and with them proceeded to the office of MBBF, with which he was familiar, and left a sealed copy with a female receptionist aged between 20 and 30 with medium length hair; he did not obtain her name.
4Later, on 12 June, he forwarded by facsimile to Access Lawyers, who had commenced to act for the defendant with effect from 4 June 2012, a facsimile of copy 3. The original of the facsimile bore a seal and signature, which enables it to be distinguished from each of the other copies 1, 2 and 4 - whether original or photocopy cannot be ascertained - so that he must still have had it in his possession, and could not therefore have served copy 3 on MBBF.
5In the course of his cross-examination, it appeared from examination of the Court file that on 13 July, Mr Shacklady annexed the remaining originally sealed copy from his file (copy 4) to an affidavit of service, which is now in the court file. So he could not have served copy 4 on MBBF. He swore another affidavit of service on 14 July, annexing to it another originally sealed copy (copy 2), which he said he retrieved from counsel for that purpose. In this way, it appeared that all four sealed copies were accounted for: copy 1 is now in the court file as the filed process; copy 2 was originally given to counsel, then annexed to the 14 July affidavit of service; copy 3 must have been retained by Mr Shacklady or served on the second defendant, as a facsimile was served on Access Lawyers and the original is not annexed to any affidavit of service; and, copy 4 is annexed to the 13 July affidavit of service. This would leave no room for an originally sealed copy to have been served on MBBF, as Mr Shacklady claims - unless he made a photocopy of it in Counsel's chambers prior to service (which, given that he says that he asked the Court to seal three copies in addition to the filed original seems unlikely); or that contrary to his own evidence he obtained more than four copies - which on reflection is quite possible, since there were two defendants to be served, a matter apparently overlooked in his original evidence.
6Mr Berger's evidence was to the effect that there was no record of receipt of the process in the firm's "deliveries" record maintained at its reception; that the firm's systems should have resulted in any such documents upon being served being brought to his attention; that upon inquiry no-one in the office - in particular the two relieving receptionists who could conceivably have met Mr Shacklady's description, but due to their habitual departure times were unlikely to have still been in the office at that time - recalled receiving the documents (but they did not swear affidavits, the evidence being hearsay of Mr Berger); and that the regular receptionist was a male, Mr Croft, who did swear an affidavit to the effect that he did not recall receiving them. However, Mr Berger could not exclude the possibility that service had taken place as deposed to by Mr Shacklady and that there had been some breakdown of the firms' systems.
7Mr Berger's evidence was persuasive, and no reason to doubt it, so far as it went, appeared. However, he was not able to - and did not - testify that the process had not been served; only that it had not come to his notice and that in accordance with the firm's processes it should have come to his attention had it been served. In that regard, it must be noted that some deviation from the firm's systems could have been accounted for by the circumstance that the defendant had changed solicitors on or about 4 June 2012, of which change MBBF were given notice on 4 June, although they remained the address for service specified in the Creditor's Statutory Demand. The evidence does not reveal when the file was transferred or what became of it. There is no evidence as to whether there is or ever was a sealed copy of the originating process in the defendant's solicitors' file.
8Other than the accounting for the copies to which I have referred, Mr Shacklady's evidence was also plausible and believable - in particular his reference to having been reminded by counsel to serve it that afternoon, which renders it rather unlikely that he would have overlooked doing so. While it was challenged, it was not directly contradicted by Mr Berger. It was not put that he might have been mistaken as to place or date - the defendant's case was that his evidence was intentionally false.
9That was the state of the evidence following the conclusion of the original hearing on 13 September 2012. The apparent accounting for the four sealed copies had emerged during cross-examination, largely through questions from the bench prompted by what appeared from an examination of the evidence and the Court file, and the parties were afforded an opportunity to make additional written submissions in that respect.
10The plaintiff took advantage of that opportunity not by making further submissions but by seeking leave to rely on two additional affidavits of Mr Shacklady, made after a further examination of his file, the effect of which was that he in fact obtained a total of six sealed copies, as follows: (1) filed with the Court; (2) annexed to affidavit of service of 14 July; (3) facsimile served on Access Law on 12 June, original not accounted for; (4) annexed to affidavit of service of 14 July; (5) retained on Mr Shacklady's file; and (6) served on second defendant. Reproductions of the various copies, all of which have identifiable differences so as to establish that they are copies of different originals, confirm the accuracy of this evidence and that his previous recollection that he thought he obtained four sealed copies was incorrect. This is all the more likely once it is appreciated that he would have needed copies for service on the second defendant and (as he understood it) the related affidavit of service, which his earlier evidence overlooked. I therefore accept that he obtained six sealed copies, which are accounted for as set out earlier in this paragraph. That leaves the original of sealed copy 3, a facsimile of a photocopy of which was sent to the defendant's new solicitors, Access Law, on 12 June, unaccounted for.
11Mr Shacklady added that after returning to Counsel's chambers and before serving the process, he left chambers to have a photocopy made (at Printer's Devil in Elizabeth Street, near King Street, as the photocopier in counsel's chambers was not operating) of the sealed copy that he intended to serve at MBBF, and then returned to Counsel's chambers before proceeding to serve the process at MBBF. He said that the copy faxed to Access Law on 12 June was the photocopy of the sealed copy that he served on MBBF, which was copy 3.
12Given the way in which the issue had arisen on 13 September, on 22 October 2012, I granted leave to the plaintiff to adduce Mr Shacklady's further affidavit evidence, subject to further cross-examination, and for that purpose there was a further hearing on 5 November 2012, when Mr Shacklady was, unsurprisingly, further cross-examined closely as to the inconsistencies in his various versions.
13The evidence and cases presented allow only two explanations of the established facts. The explanation proposed by the defendant is essentially that having issued the process and obtained six sealed copies on 7 June, when the last day for service was 8 June, Mr Shacklady (i) on 7 June, overlooked effecting service on MBBF; (ii) on or prior to 12 June obtained a photocopy of sealed copy 3 (presumably still having the original) and transmitted it by fax to Access Law; (iii) on about 18 June, it having been asserted that the process had not been served in time, falsely represented to Access Law that he had served it on MBBF; (iv) on 13 and 14 July, swore two false affidavits of service; and, (v) at some stage, presumably after 12 June, coincidentally lost (or deliberately disposed of) the original of sealed copy 3. The alternative explanation proposed by the plaintiff is that having issued the process and obtained six sealed copies on 7 June, (1) Mr Shacklady obtained a photocopy of sealed copy 3; (2) he then served sealed copy 3 at MBBF, where a person other than the usual receptionist was present in or came to reception, it being after 5:00pm, and received it; (3) for some reason - perhaps that it was received by a non-regular receptionist out-of-hours - it was not recorded in the delivery register (which is in any event a fairly sparse record, and I would not on that account be prepared to infer from the absence of any record in it that an item had not been received); (4) for some reason - again perhaps associated with its being received by someone other than the regular receptionist, and perhaps also associated with the firm having ceased to act for the defendant - the process did not come to Mr Berger's or Mr Rupell's attention; (5) on 12 June, when he transmitted the photocopy of copy 3 to Access Law, its original was not in his possession, because it had already been served on MBBF; and (6) his response on or about 18 June to the effect that the process had been served on 7 June represented his true and accurate recollection of a very recent event.
14Mr Phillips, for the defendant, submitted that while the evidence to the effect that there were six sealed copies could be accepted, the further evidence concerning the making of the additional photocopy at Printer's Devil was fanciful, and that unless it was accepted, Mr Shacklady could not have had a photocopy of copy 3 to fax to Mr Mitchell at Access Law. The progressive evolution of Mr Shacklady's evidence, and the associated inconsistencies, mean that his evidence is not without its difficulties. The evidence about Printer's Devil involved a substantial elaboration of Mr Shacklady's earlier evidence, and demands close scrutiny, even suspicion. This is all the more so when aspects of it were capable of corroboration by counsel who appeared for the plaintiff and did not give evidence; but in the way in which this issue arose I think the failure to adduce such evidence (which would have necessitated counsel withdrawing at a late stage of the case) can be regarded as explicable. It is also true that there was no need to obtain any such copy (as not only are copies no longer required for affidavits of service, but when they were required a sealed copy, not a photocopy was required, and there were in any event sufficient sealed copies for that purpose); but it is possible that Mr Shacklady laboured under some misapprehension in this respect, although the fact that ultimately he did not use such photocopy for the purpose of the affidavit of service makes this perhaps the least satisfactory aspect of his evidence. It is also perhaps surprising that he would have taken the time to return to counsel's chambers (at 235 Macquarie Street) rather than proceeding down Elizabeth Street to effect service after obtaining the photocopy, given that he said that his client Mr Houlton (who it emerged in further cross-examination, for the first time, was present in chambers) was allegedly pressing the urgency of effecting service, and 5:00pm was rapidly approaching.
15On the other hand, the evidence establishes that what was transmitted by facsimile to Access Law on 12 June was a photocopy of sealed copy 3. It follows that at some time prior to sending the facsimile on 12 June, Mr Shacklady must have obtained a photocopy of sealed copy 3. The original of sealed copy 3 is not accounted for - unless it was delivered to MBBF as Mr Shacklady says it was. It would seem unlikely that Mr Shacklady still held sealed copy 3 on 12 June - if he did, why would he not have transmitted the original sealed copy, rather than a photocopy of it? It would also seem many times against the odds that he would by chance transmit a photocopy of the only sealed copy of which a photocopy was apparently made, yet the only one the original of which cannot now be accounted for. Thus it is consistent with what is known of the distribution of the six sealed copies that one had been served on MBBF, and a photocopy of it made before that occurred, although I am acutely conscious that "consistent with" does not by any means amount to "probative of".
16A conclusion as to whether more probably than not the process was served as Mr Shacklady asserts requires more than consideration of whether it is more probable than not that there was some failure of the systems in MBBF's office; it requires consideration of the whole of the relevant evidence, which crucially includes Mr Shacklady's sworn direct evidence that he served the originating process, against Mr Berger's sworn testimony, more or less to the effect that it is improbable (but not impossible) that it was so served. In a sense, it involves weighing two hypotheses, each objectively improbable, to ascertain which of them is the less improbable explanation of the known facts. But it is not without significance in this context that there is not a direct conflict - while Mr Berger's evidence might support an inference that service was not effected, a conclusion that service was effected would not involve rejection of his testimony, which was to the effect that it is improbable - but not impossible - that service was effected as alleged.
17No doubt it is relatively improbable (according to the firm's usual practices) that a female receptionist was on duty at MBBF at the relevant time (after 5:00pm); and that the firm's systems failed to bring process served to the attention of the responsible solicitor. But it is not impossible, and it is not impossible that someone else in the office responded, after ordinary business hours, to a call at the front desk. It is on the other hand also relatively improbable that a solicitor would overlook the imperative of prompt service of a s 459G application, yet would assert very soon afterwards (on or about 18 June) that he had served it within time, and then proceed to swear two false affidavits of service.
18Although Mr Phillips invoked Mr Berger's letter of 20 June 2012, disputing service, I do not think this adds anything to Mr Berger's sworn evidence. The earlier oral assertion on 14 June 2012 to the same effect by Mr Rupell, who had had carriage of the matter at MBBF - as evidenced by the letter from Access Law to MBBF of 19 June 2012 - does add something, because its source was perhaps the person most likely at MBBF to be or become aware of receipt of the process. However, this is not a case in which early disputation of service strengthens the inference that might be available from Mr Berger's evidence, as the relevant effect of the evidence of Mr Berger (and, indirectly, that of Mr Rupell) is not affected by the accuracy of their recollections; the question is whether it should be inferred, from the established circumstance that the process did not come to their attention, that it was not served at MBBF as Mr Shacklady asserts. Mr Phillips also says that Mr Shacklady's evidence is uncorroborated; but one would not expect it to be corroborated in the ordinary course; solicitors serving process do not customarily take corroborating witnesses with them. However, unlike the evidence of early denial, the early assertion of timely service on the part of Mr Shacklady - evidenced by the letter from Access Law to MBBF of 19 June 2012 - does, if in a small way, corroborate his version, which does depend on recollection.
19Ultimately, the crucial factors are first, that there is direct testimonial evidence that Mr Shacklady served the process on 7 June, as against only indirect evidence to support an inference that he did not, which admits of the possibility that he might have done so; secondly, that the plaintiff's theory is consistent with, and the less improbable explanation of, the established facts - including in particular the transmission of a photocopy of sealed copy 3 to Access Law on 12 June, and the absence of an explanation for the whereabouts of its original unless it was served on MBBF.
20I therefore find, on the probabilities, that the originating process and supporting affidavit were served on the defendant at MBBF on 7 June 2012, within time.