(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 hand 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."
77 Owen J did not say that a letter addressed to the company's registered office which was diverted to the post office box of the occupier of those premises was served by being delivered to the post office box. Nor did his Honour say that the presumption of delivery in the ordinary course of post could not be rebutted if the mail was diverted. His Honour gave to the Acts Interpretation Act a "methodological application" by determining what was the ordinary course of post as it affected the company where the mail was diverted to a post office box, by presuming the mail to have been delivered to the company's registered office by the combined actions of Australia Post in delivering the mail to the box, and of the occupier which collected the mail. Owen J concluded that the presumption of delivery in the ordinary course of post applied where it could be inferred that delivery had been effected to the company's registered office by the person who collected the mail from the post box. His Honour held that it was delivery to the registered office which constituted good service. His Honour did not have to determine when the document was delivered. However, it would be consistent with his Honour's concluding remarks in the passage quoted, that this would have been when the document was collected from the post office box and taken to the registered office.
78 Owen J's reasoning in Bellway Corporation v Ausdrill Ltd was endorsed by Young J in Deputy Commissioner of Taxation v Barroleg Pty Ltd at 171. There, a statutory demand was posted on 18 June 1997 to the defendant's registered office. By an arrangement made by the defendant with Australia Post, the mail was placed in a post office box. The company's evidence was to the effect that the demand was delivered personally to the company's office and was received on 23 June 1997, and was not collected from the box (at 168). However, Young J accepted that the letter had been sent by post. The letter was sent by prepaid express post. His Honour said there were only two skimpy pieces of evidence, amounting only to a scintilla of evidence, as to when, in the ordinary course of post, the letter would have been delivered (at 169, 171). The first of these was that the express post envelope was stamped "Guaranteed Next Day Delivery". However, the guarantee was not that the letter would be delivered the next day, but only that if the letter was not delivered the next day, the sender would receive another express post envelope free. The second piece of evidence was that a letter posted in the Jannali area by another creditor to the company's registered office was received the next day. His Honour concluded that he was not prepared to hold, on the balance of probabilities, that the notice was received before the company said it was received, namely on 23 June 1997. It followed that the period for compliance with the demand had not expired when the plaintiff filed its application to wind up the defendant. (In the end, this did not matter, as the plaintiff proved insolvency in any event.) However, on the point material to the present case, his Honour's finding (at 171) was that:
" … the authorities clearly show that it is up to the person who relies on a provision such as s 109Y(b) to show, on the balance of probabilities, that on the facts the ordinary course of post means that the document concerned was deemed to be delivered on or by a certain day. In the instant case, apart from the two skimpy pieces of evidence to which I have already referred, there has been no attempt to establish the question of fact at all. Under the old tests, there would be a scintilla of evidence, but as a question of fact I am not prepared to hold on that evidence, on the balance of probabilities, that the notice was received at a time before the company says it was received, namely 11.30 am on 23 June 1997. "
79 That is, Young J accepted that the demand had been posted, but held that the scintilla of evidence suggesting next day delivery in the ordinary course of post was rebutted by the company's evidence that the demand was not received until 23 June 1997.
80 In Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd [2004] SASC 70 Burley J said (at [12]):
" … Delivery to the post office box by employees of Australia Post does not constitute delivery of the mail article to the registered office of the plaintiff. When considered as a matter of law, the question becomes: does delivery to a post office box retained by the addressee, whose street address constitutes the registered office of the company, constitute as a matter of law delivery to the registered office as contemplated by s 109X(1)(a) of the Corporations Act ? In my view, on the proper construction of s 109X(1)(a), delivery to a post office box is not contemplated by the provision. It provides for the posting of a document to the registered office of the company. This, in my view, means physical delivery to the actual registered office."
81 It was submitted by counsel for the defendant that this reasoning was inconsistent with Bellway Corporation Ltd v Ausdrill Ltd and should not be followed. I do not agree. The reasoning in both cases is consistent.
82 The appeal from Burley J's decision was dismissed (Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd (2005) 188 FLR 373). In Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd, a statutory demand was posted to the company's registered office, which was an office of the company's accountant. It was not delivered to the accountant's office by Australia Post, but was placed in the firm's post office box on 14 October. Sometime between 14 and 23 October 2003, it was taken back to the office. From there it was posted to the company which received it at its business address on 24 October 2003, (at [18]-[19]). The application to set aside the statutory demand was filed and served on 13 November 2003. If the statutory demand was served at any time between 14 and 22 October 2003 the application was out of time. If the demand was served on 23 or 24 October 2003, it was within time.
83 Besanko J, with whom Duggan and White JJ agreed, did not find that the demand had been served on 14 October 2003 when it was delivered to the post office box. Nor did their Honours hold that the document must be presumed to have been delivered to the company's registered office in the ordinary course of post, notwithstanding there was proof it had not been. In other words, their Honours did not proceed on either of the bases favoured in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd. Rather, Besanko J concluded that it was at least as likely as not that the statutory demand was collected from the post box and taken back to the accountant's office (which was the company's registered office) before 23 October 2003, as it was that it was taken to that office on 23 October 2003. Therefore, the company had not established that its application to set aside the demand was made within time (at [26]-[28]).
84 Besanko J did raise the possibility (at [23]) that Bellway Corporation Ltd v Ausdrill Ltd and Deputy Commissioner of Taxation v Barroleg Pty Ltd might support an argument that the fact that Australia Post directed the envelope to the post office box did not constitute proof to the contrary in terms of s 29(1) or the Acts Interpretation Act. Counsel had not referred to the relevant authorities. His Honour therefore did not further consider this question, nor those authorities. For the reasons I have given, neither Bellway Corporation Ltd v Ausdrill Ltd nor Deputy Commissioner of Taxation v Barroleg Pty Ltd supports the proposition that proof that mail was diverted to a post office box does not constitute proof that the mail was not delivered as it would have been had it been delivered in the ordinary course of post directly to the street address. Bellway Corporation Ltd v Ausdrill Ltd established that such evidence does not displace the presumption that the mail was nonetheless delivered to the street address in the ordinary course of post by the indirect route of the post office box. In Deputy Commissioner of Taxation v Barroleg Pty Ltd, evidence of when the document was received displaced the presumption of delivery in the ordinary course of post.
85 In Polstar Pty Ltd v Agnew [2007] NSWSC 114, the envelope enclosing the statutory demand was addressed to the company at a post office box. Barrett J held that s 109X of the Corporations Act did not impliedly exclude the operation of s 28A of the Acts Interpretation Act (at [15]). The latter provision permits service of a document on a body corporate by sending it by prepaid post to the head office, a registered office, or a principal place of office of the body corporate. However, his Honour held that in both the Corporations Act and the Acts Interpretation Act, an "office" connotes a physical location in the nature of premises, such as a building or part of a building (at [18]). His Honour concluded that a post office box could not be a company's "office" (at [19]). I agree.
86 In my view, delivery to the post office box cannot be equated with delivery to the company's registered office. I respectfully differ from the contrary view expressed by Hodgson JA in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd at [56]). I respectfully consider that his Honour's view is inconsistent with the authorities. It does not appear that the Court of Appeal was referred to the relevant authorities.
87 I was referred to Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth) (2006) 24 ACLC 354. There, a statutory demand addressed to a company's registered office was diverted to a post office box pursuant to an arrangement which the company had with Australia Post that all mail addressed to the plaintiff would be collected from the post office box. In the ordinary course of post, the mail would have been delivered to the company at its registered office on 22 June 2005. There was evidence that the document was collected from the post office on 24 June 2005. Newnes M held (at [19]) that the fact that the letter was not delivered by Australia Post to the company's street address, but was placed in its post office box for collection, did not mean that delivery was not effected until the letter was actually received by the company. Newnes M also said (at [31]):
"[31] In my view, … the deeming provision in s 29(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 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."
88 In reaching this conclusion, the learned Master relied on Bellway Corporation v Ausdrill Ltd, and Bowman v Durham Holdings Pty Ltd (1973) 131 CLR 8. For the reasons I have given, Bellway Corporation v Ausdrill Ltd does not decide that in such circumstances, the demand is taken to have been served when it reaches the post office box, nor that the presumption of delivery in the ordinary course of post cannot be rebutted. Bowman v Durham Holdings Pty Ltd was a different case. There, a contract permitted service of a notice exercising an option to purchase by post, and provided that notice was deemed to be given at the time when it would have been delivered in the ordinary course of post. However, in my respectful view, that raises a quite different issue. In Bowman v Durham Holdings Pty Ltd, there was no question of the rebuttal of the presumption of delivery in the ordinary course of post.
89 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 had been delivered in the ordinary course of post to the registered office.
90 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. I respectfully do not agree with the reasoning in that case.
Can the Presumption of Delivery in the Ordinary Course of Post be Rebutted?
91 In Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259, the majority of the Court of Appeal held (at [1], [67]) that whilst a company served under s 109X of the Corporations Act is entitled to prove that the document arrived at its registered office at a different time from that if it had been delivered in the ordinary course of post, it does not do so:
" … by proving that [the document] arrived at the address to which it had diverted its mail at a different time from that on which the document would have been delivered to its registered office in the ordinary course of post. " (Emphasis added).
92 It is unfortunate that their Honours were apparently not referred to, and did not refer to, the relevant authorities, including that of the present Chief Judge in Equity, which are inconsistent with this conclusion. However, that is beside the point.
93 This passage forms part of the ratio decidendi of the Court's decision and is binding on me. The Court of Appeal held that the payment schedule in that case was "provided" to the claimant within time because it had been served within time, and service constituted "provision". One of the ways in which it was held that the schedule had been served was by being posted to the claimant's registered office. The view of Handley JA and Hunt AJA that it was not open to the claimant to dispute that the schedule had been delivered in the ordinary course of post because it had diverted its mail to a post office box, was a necessary part of their Honours' reasoning that the claimant had been served in time by the schedule having been posted to it at its registered office. It is irrelevant that this was not an issue the Court needed to decide because the claimant had been unquestionably served in other ways. The point was decided (Jacobs v London County Council [1950] AC 361 at 369).
94 Because Handley JA and Hunt AJA gave no reasons for the conclusion in the last sentence of paragraph [67] in Falgat Constructions, it should not be construed more widely than the terms in which it is expressed. That is to say, their Honours' conclusion applies to a case where it is the company being served which diverted its mail. I do not consider that their Honours' conclusion applies where it is not the company which diverts mail addressed to its registered office, but the firm occupying that office which does so.
95 It may be that their Honours had in mind that a company which diverts its mail would be estopped from relying on the exception to s 29(1) of the Acts Interpretation Act permitting proof to the contrary. If that is the underlying reasoning, it may have no application where the company had no part to play in the decision to divert mail addressed to the registered office to a post office box. Nor do abstract notions of fairness suggest that a company, which was not a party to such a decision, should be prevented from saying that a document was not delivered to its registered office when in fact it was not. A person who relies on the post as a means of service takes the risk that the document will not be delivered in the ordinary course of post, or that delivery in the ordinary course of post will take longer if the mail goes through a post office box than if it is delivered directly to the street address.
96 There was no evidence that the plaintiff was a party to the arrangements made by Tattam & Co with Australia Post to divert mail addressed to its office to the post office box. The plaintiff is entitled to prove that the statutory demand was not served by being delivered by Australia Post to its registered office in the ordinary course of post. It is entitled to prove when the demand was delivered to its registered office. This is consistent with the decision of the Full Court of the Supreme Court of South Australia in Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd (2005) 188 FLR 373.
Conclusions on Service
97 In my view, justice requires that the plaintiff be permitted to withdraw the concession originally made. That concession was on a question of law. Mr Tattam was not cross-examined. There was no challenge to his evidence that he collected the letter from the post office box on 3 October 2006. That evidence was relevant to the other issues, so it could not be said, and was not said, that he would have been cross-examined had the concession not been made.
98 For these reasons, I conclude that service was not effected until the statutory demand was taken by Mr Tattam to the offices of Tattam & Co, which was the registered office of the plaintiff, after being collected from the post office box. That did not happen until 3 October 2006. Accordingly, the application was made within time.
Offsetting Claim
99 The statutory demand claimed a debt arising from an order for costs made by Campbell J in winding-up proceedings brought by the defendant against the plaintiff arising from the plaintiff's failure to satisfy a statutory demand (Goman v Scope Data Systems Pty Ltd [2004] NSWSC 314). That statutory demand in turn arose from a costs order made on 29 July 2002 in Local Court proceedings between the parties. On 29 July 2002, Dillon LCM ordered that the present plaintiff pay the present defendant's costs of those proceedings on a party/party basis in the sum agreed or assessed. His Honour also ordered that the present defendant pay the present plaintiff's costs of a subpoena and of an associated notice of motion in relation to the subpoena.
100 The plaintiff's offsetting claim relates to the latter costs order. On 24 October 2006, the plaintiff served a copy of an Application for Assessment of Party/Party Costs on the defendant or his solicitors. The defendant's counsel said there was an issue as to whether the application had been properly served, but that is irrelevant to the present question. The plaintiff claimed an amount of $15,590.50 plus the cost of the filing fee on the application of $155.90 (being a total of $15,746.40) pursuant to the costs order in its favour.
101 It was not suggested that the plaintiff is out of time in making that application.
102 During the course of the hearing, the plaintiff's counsel indicated that a sum totalling $1,980 for counsel's fees would not be pressed, reducing the plaintiff's offsetting claim to $13,766.40.
103 Accompanying the application was a Statement of Costs containing 261 separate items, of which 242 are said to give rise to the offsetting claim. In the application, the plaintiff's solicitor contends that the plaintiff's total costs of the local court proceedings came to $39,869.37. A narrative justification was given to explain how $15,746.40 was said to be attributable to costs incurred in relation to the subpoena and an associated notice of motion filed by the present plaintiff in relation to the subpoena. Amongst other things, it appears that the plaintiff issued a subpoena for documents of the defendant including diary notes and time sheets which were said to be relevant to the present defendant's claim against it. It is claimed that it was not until two days before the hearing that it emerged that the documents in question had been lost or destroyed and in the meantime, substantial costs had been incurred. The reasons for judgment of Dillon LCM included a finding that the present defendant and its representatives could have saved much time and costs if they had proffered an explanation for the non-production of the material subpoenaed, but instead, they made the present plaintiff fight every inch of the way for it.
104 The costs claimed in the Statement of Costs have been calculated at hourly rates of $250 per hour for a solicitor, $120 per hour for para-legal assistance and $80 per hour for clerical work.
105 The question is whether the claim in the application for assessment of costs of $13,766.40 is a genuine claim that the plaintiff has against the defendant. In Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743, Palmer J said (at [18]):
"18 In my opinion, a genuine offsetting claim for the purposes of CA s.459H(1) and (2) means a claim on a cause of action advanced in good faith, for an amount claimed in good faith. 'Good faith' means arguable on the basis of facts asserted with sufficient particularity to enable the Court to determine that the claim is not fanciful. In a claim for unliquidated damages for economic loss, the Court will not be able to determine whether the amount claimed is claimed in good faith unless the plaintiff adduces some evidence to show the basis upon which the loss is said to arise and how that loss is calculated. If such evidence is entirely lacking, the Court cannot find that there is a genuine offsetting claim for the purposes of s.459H(1) and (2)."
106 In Elm Financial Services Pty Ltd v McDougall [2004] NSWSC 560, Barrett J said (at [19]):
"19 Despite this clear need, according to the terms of the legislation, to quantify an offsetting claim in money terms, it is not necessary that the party seeking to have the statutory demand set aside should particularise the amount of the claim to the last dollar and cent. There may be various ways of approaching the issue of assessment at this early stage. It is sufficient that there be, on the evidence, a plausible and coherent basis for asserting a claim to a sum which, despite elements of uncertainty, can be seen to be, in any event, greater than the amount of the debt the subject of the statutory demand. Of course, the narrower the margin between the alleged debt and the plaintiff's estimate or initial quantification, the greater will be the need for particularity in assessing the amount of the offsetting claim."
107 In the present case, the offsetting claim is calculated with precision. The question for the costs assessor will be whether it was reasonable for the plaintiff's solicitors to have carried out the work to which the claimed costs relate, and whether the amounts claimed are fair and reasonable (Legal Profession Act 1987 (NSW), s 208F).
108 It was submitted for the defendant that it was clear that the costs claimed were not fair and reasonable because, it was said, it was clear that the costs claimed were claimed on a solicitor and client basis, rather than on a party and party basis.
109 I do not know that this is clear. But even if that be the case, it does not necessarily follow that the amounts claimed are not fair and reasonable.
110 The question on the present application is not whether costs are likely to be allowed at the amounts claimed, or the extent to which the costs might be reduced on assessment. The question is whether the claim in the application for the assessment of costs is genuine. That is not a high hurdle. In my view, the claim is genuine.
Conclusion
111 For these reasons, I am of the view that the plaintiff's application was filed and served within the time prescribed by s 459G of the Corporations Act. The plaintiff did not press its claim that there was a genuine dispute as to the sum of $20,467.56 or interest thereon. The defendant did not dispute that there was a genuine dispute about the amount claimed of $2,935.63 together with interest. Accordingly, the "admitted total" within the meaning of s 459H(2) is $21,926.08. I have found that the plaintiff has an offsetting claim of $13,766.40.
112 Accordingly, pursuant to s 459H(4), I order that the statutory demand dated 25 September 2006 be varied by substituting for the sum of $24,895.73, the amount of $8,159.68.
113 I order that the demand have effect, as so varied, as from the date the demand was served on the plaintiff, namely, 3 October 2006.
114 I order that the period for compliance with the demand be extended to 14 days after the date of these orders.
115 Exhibits may be returned after 28 days.
116 I will hear the parties on costs.