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[2007] NSWSC 278
Supreme Court of NSW
2007-04-18
White J
Original judgment source is linked above.
Reported Decision : 210 FLR 161 (2007) 25 ACLC 721
CITATION : Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill [2007] NSWSC 278 This decision has been amended. Please see the end of the judgment for a list of the amendments.
JURISDICTION : Equity Division Corporations List
DECISION : See paragraphs 112-115 of judgment.
CATCHWORDS : CORPORATIONS - Statutory demand - Service of documents - Application to set aside or vary statutory demand on grounds of offsetting claim by post - Whether application to set aside made within 21 days of service of statutory demand - Service of statutory demand under s 109X (CTH) Corporations Act - Where mail addressed to registered office diverted to post office box - Where evidence rebuts presumption in s 29 of (CTH) Acts Interpretation Act that statutory demand served in the ordinary course of post - Applicability of s160 of the (NSW) Evidence Act - Section 160 of the (NSW) Evidence Act not displaced by s 109X of (CTH) Corporations Act and s 29 of the Acts Interpretation Act (Cth) - No presumption that statutory demand received in post office box on fourth working day after posting where that was not the specified address - Whether receipt in post office box effective as service at registered office - Whether possible to rebut presumption of delivery in ordinary course of post if mail diverted to post office box - Held demand not served until taken to registered office after being collected from box - Plaintiff's application to set aside statutory demand filed and served within time prescribed by s 459G (CTH) Corporations Act - Offsetting claim genuine. - (CTH) Corporations Act, ss 109X, 459G, 459H. - (CTH) Acts Interpretation Act, s 29. - (NSW) Evidence Act, s 160.
Corporations Act 2001 (Cth) Acts Interpretation Act 1901 (Cth) Evidence Act 1995 (Cth) LEGISLATION CITED : Evidence Act 1995 (NSW) Australian Postal Corporation (Performance Standards) Regulation 1998 (Cth) Judiciary Act 1903 (Cth) Building Construction Industry Security of Payment Act 1999 (NSW) Legal Profession Act 1987 (NSW)
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 Bayeh v Commissioner of Taxation (1999) 100 FCR 138 Deputy Commissioner of Taxation v Barroleg Pty Ltd (1997) 25 ACSR 167 Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd (2005) 188 FLR 373 Howship Holdings Pty Ltd v Leslie (No 2) (1996) 41 NSWLR 542 Lane Cove Council v Geebung Polo Club Pty Ltd (2002) 41 ACSR 15 Perpetual Nominees Pty Ltd v Masri Apartments Pty Ltd (2004) 183 FLR 142; 49 ACSR 714; 22 ACLC 971 CASES CITED : Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 Odgers, Uniform Evidence Law, 6th ed, (2004) Sydney, Lawbook Co Renouf v Renouf (1987) 93 FLR 256; 12 Fam LR 43 Re S and the Adoption Act [2005] NSWSC 1346 Bellway Corporation Limited v Ausdrill Ltd (1995) 13 ACLC 1,663 Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd [2004] SASC 70 Polstar Pty Ltd v Agnew [2007] NSWSC 114 Citystart Pty Ltd v Deputy Commissioner of Taxation (Cth) (2006) 24 ACLC 354 Jacobs v London County Council [1950] AC 361 Goman v Scope Data Systems Pty Ltd [2004] NSWSC 314 Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743 Elm Financial Services Pty Ltd v McDougall [2004] NSWSC 560
Scope Data Systems Pty Ltd PARTIES : v David Goman as Representative of the Partnership BDO Nelson Parkhill
COUNSEL : Plaintiff: M Orlov Defendant: J T Johnson
SOLICITORS : Plaintiff: Kent Attorneys Defendant: Sally Nash & Co
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST
5425/06 Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill JUDGMENT 1 HIS HONOUR: This is an application pursuant to s 459G of the Corporations Act 2001 (Cth) to set aside a statutory demand. The statutory demand is dated 25 September 2006. It states that "the company owes David Goman as representative of the partnership BDO Nelson Parkhill … the amount of $24,895.73, being the amount of the debt described in the Schedule." 2 The schedule described the debt as follows: " Description of the debt Amount of the debt Date of Judgment: 5 December 2005 in the sum of $20,467.56 4 August 2006 in the sum of $2,935.63 Court of Judgment: Local Court, Downing Centre Judgment debt entered in the Local Court Downing Centre on 5 December 2005 pursuant to Supreme Court Costs assessment proceedings 91171 of 2005 assessed on 21 November 2005 and reviewed but which assessment was confirmed on 21 August 2006 by the Review Board $20,467.56 interest from 6 December 2005 until 20 September 2006 (289 days) at 9% p.a. $ 1,458.52 Judgment debt entered in the Local Court Downing Centre on 4 August 2006 pursuant to Supreme Court Costs review proceedings 91518 of 2003 $ 2,935.63 interest from 5 August 2006 to 20 September 2006 (47 days) at 9% p.a. $ 34.02 TOTAL $24,895.73 DATED: 25 September 2006 " 3 Initially the application raised four issues. They were as follows:
[38] When s29(2) of the Acts Interpretation Act of the Commonwealth refers to "the Evidence Act 1995", it is, clearly enough, referring to the Commonwealth Act with that short title, rather than the Act of the Parliament of New South Wales having the same short title, both of which contain a s160(1) in the terms set out above. If a reference to the State Act had been intended, s29(2) would, as contemplated by s40(1)(c), have made reference to the State of New South Wales.
[39] In the present proceedings, there is no room for the operation of the Evidence Act 1995 (Cth). That Act is expressed by its own s4(1) to apply "in relation to all proceedings in a federal court or an ACT court". The expressions "federal court" and "ACT court" are, as one would expect, defined in the Act's dictionary in terms which do not encompass the Supreme Court of New South Wales. It follows that s160 of the Commonwealth Evidence Act has no bearing on the interpretation of s109X of the Commonwealth Corporations Act in this case. The reference to s160 in s29(2) of the Acts Interpretation Act may, for present purposes, be disregarded, with the result that s29(1) operates without qualification.
[40] Nor is s160(1) of the Evidence Act of this State relevant to the interpretation of s109X of the Commonwealth Corporations Act. Section 160(1) of the New South Wales Act does no more than to state a rule of evidence to be applied in proceedings in a "NSW court", that is, this court or any other court created by the Parliament of New South Wales: see s3 and s4 and the dictionary's definition of "NSW court". The content of a rule of evidence the State Act requires this court to apply does not seem to me to have any bearing upon the interpretation of a substantive provision of a Commonwealth statute, such as s109X of the Corporations Act, where there exists, in the form of s29 of the Acts Interpretation Act, an express directive in Commonwealth law relevant to such interpretation.
[41] Under the statutory scheme now based on the Corporations Act 2001 (Cth) rather than the Corporations Laws of the States and Territories, there is no longer any need to resort to the kind of analysis undertaken by Young J in relation to a similar issue in Howship Holdings Pty Ltd v Leslie (above). That analysis depended, to a large extent, on questions about implied repeal of one enactment by a later enactment. No such question arises here, the Corporations Act 2001 having been enacted after both s29 of the Acts Interpretation Act and s160 of the Evidence Act. There is also the point that s109Y of the Corporations Law, interaction of which with s109X played a central role in Howship Holdings , has no counterpart in the Corporations Act 2001, even though s109X is retained and re-enacted. Section 29(1) of the Acts Interpretation Act fixes the time of service by post [42] The correct approach, it seems to me, is to apply s29(1) of the Acts Interpretation Act in a case of this kind, rather than s160 of the Evidence Act of either the Commonwealth or the State. Section 29(1) is expressed to apply in every instance where "an Act" (which, having regard to s38(1), means a Commonwealth Act and thus includes the Corporations Act 2001) "authorises or requires any document to be served by post". Because of its s109X, the Corporations Act 2001 is unquestionably such an Act and the specification in s29(1) accordingly operates. For reasons already canvassed, both Evidence Acts must be regarded as irrelevant to the inquiry. " 33 Barrett J was clearly correct in saying that subs 29(2) of the Acts Interpretation Act refers to s 160 of the Commonwealth Evidence Act, and not to the New South Wales Evidence Act. The Commonwealth Evidence Act does not apply to proceedings in the State courts. That is not to say that the New South Wales Evidence Act does not apply to proceedings under the Corporations Act. Section 79 of the Judiciary Act 1903 (Cth) provides: " 79 State or Territory laws to govern where applicable The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. " 34 Unless the Corporations Act or the Commonwealth Acts Interpretation Act makes "other provision", s 160 of the New South Wales Evidence Act (being a law relating to evidence), is applicable 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 to be taken to have been delivered. It will be necessary to consider his Honour's statement that s 160 has no bearing on "the interpretation of a substantive provision of a Commonwealth statute such as s 109X of the Corporations Act". 35 The third decision relied on is Perpetual Nominees Pty Ltd v Masri Apartments Pty Ltd (2004) 183 FLR 142; 49 ACSR 714; 22 ACLC 971. Austin J said (at [10]-[13]):
"[10] The application of s 29(1) is affected by s 29(2), which says that the section 'does not affect the operation of s 160 of the Evidence Act 1995 '. The reference to the Evidence Act 1995 is a reference to the Evidence Act of the Commonwealth, not the Evidence Act of New South Wales: Acts Interpretation Act , s 38(1) and (3). But the Evidence Act of the Commonwealth, according to its own terms, has no application to a proceeding in this court: Evidence Act 1995 (Cth), s 4(1); the extended application to Australian courts, found in s 5, does not encompass s 160.
[11] Therefore so far as this court is concerned, s 29(1) is applicable because of s 5C of the Corporations Act , and the court's proceeding is also governed by s 160 of the Evidence Act of New South Wales, which is in terms identical to s 160 of the Evidence Act of the Commonwealth. The provisions applicable in this court are inconsistent with one another. Section 29(1) says that service is effected when the letter is delivered in the ordinary course of post, while s 160 says that a postal article sent by pre-paid post addressed to a person at a specified address in Australia was received at that address on the fourth working day after having been posted.
[12] It seems to me that the court should follow and apply s 29(1) of the Acts Interpretation Act , in conjunction with ss 5C and 109X of the Corporations Act , which are Commonwealth provisions that prevail over inconsistent state legislation under s 109 of the Constitution of the Commonwealth. Additionally, those provisions apply specifically to the service of a document such as a statutory demand, whereas s 160 of the Evidence Act of New South Wales is a more general provision creating a presumption as to time of receipt of a postal article.
[13] There is some general support for my conclusion that s 29(1) rather than s 160 is the applicable provision in this case. In Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542, 133 FLR 303, Young J held that service of a summons seeking an order to set aside a statutory demand under s 459G of the Corporations Law (being, at that time, State law) was governed by particular provisions of the Corporations Law equivalent to s 29(1), rather than by the more general provisions of s 160 of the Evidence Act ." 36 I accept that there is a strong current of authority against the application of s 160 of the New South Wales Evidence Act. Indeed, there is a recent decision of the Court of Appeal on the subject which might support the plaintiff's argument (Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 at [55]). Neither counsel referred to this decision. 37 If the plaintiff's argument is correct, namely that s 160 of the New South Wales Evidence Act cannot be applicable, the consequences are remarkable. Subsection 29(1) of the Acts Interpretation Act is not inconsistent with s 160 of the Commonwealth Evidence Act. That is clear from subs 29(2) of the Acts Interpretation Act, which provides that s 29 does not affect the operation of s 160 of the Commonwealth Evidence Act. It follows that if this application were being heard in the Federal Court, and s 160 of the Commonwealth Evidence Act applied, the plaintiff's argument that s 160 cannot be applicable would fail. But, so the argument goes, because the proceeding is brought in the New South Wales Supreme Court, the plaintiff must succeed on this point, even though the New South Wales Evidence Act is in the same terms as the Commonwealth Act and is applicable to the proceedings by virtue of s 79 of the Judiciary Act. So remarkable is that outcome that it warrants a closer examination of the reasoning in the authorities upon which the plaintiff relies. 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 Commonwealth Evidence Act (applicable to federal courts), or s 160 of the New South Wales Evidence Act (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. 39 In Odgers, Uniform Evidence Law, 6th ed, (2004) Sydney, Lawbook Co (at [1.4.2140] the learned author says of s 160: " This provision creates a presumption (which operates in the absence of evidence sufficient to raise a doubt about the matter) which makes it unnecessary to adduce evidence about the date of receipt of mail, or about 'the ordinary course of post'. " 40 I agree with that observation. Section 29(1) of the Acts Interpretation Act and s 160 of the Evidence Act are capable of an harmonious operation. So much is clear from subs 29(2) of the Acts Interpretation Act which provides that subs 29(1) does not affect the operation of s 160. 41 In Howship Holdings Pty Ltd v Leslie, Young J said that s 160 of the Evidence Act was inconsistent with s 109Y of the Corporations Law because a different standard applied to the evidence needed to rebut the presumptions created by each section. However, that does not create any inconsistency. Although the provisions apply in the same area, namely, determining when an article is taken to have been delivered by post, they have a complementary sphere of operation. If the time of delivery is proved as a matter fact, or if the expected time of delivery in the ordinary course of post is proved as a matter of fact, then there is no scope for the operation of the presumption in s 160. If not, the presumption in s 160 applies, unless there is sufficient evidence to cast doubt upon that presumption. 42 In Lane Cove Council v Geebung Polo Club Pty Ltd, Barrett J said (at [40]) that the content of s 160 of the New South Wales Evidence Act had no bearing "upon the interpretation of a substantive provision of a Commonwealth statute, such as s 109X of the Corporations Act, where there exists, in the form of s 29 of the Acts Interpretation Act, an express directive in Commonwealth law relevant to such interpretation." 43 I accept that s 160 has no relevant bearing upon the interpretation of s 109X of the Corporations Act, or s 29 of the Acts Interpretation Act. That is to say, it does not affect the meaning to be given to those sections. Rather, it affects the application of those sections, by providing a rebuttable presumption as to when a posted article is taken to have been received at the place to which it was addressed. In other words, it facilitates proof of the matters for which those provisions provide. 44 Barrett J's observations concerning s 160 of the Evidence Act were not necessary for the decision. The issue in Lane Cove County Council v Geebung Polo Club Pty Ltd was whether there was proof of non-delivery. His Honour recorded (at [50]) that: "S ince payment in response to the statutory demand was never forthcoming, there is no need to decide precisely when the ordinary course of post would have resulted in delivery. " 45 For the same reasons, I am unable to accept the conclusion of Austin J in Perpetual Nominees Ltd v Masri Apartments Pty Ltd at [11]-[13] that s 160 of the New South Wales Evidence Act is inconsistent with the Commonwealth legislation and that the latter prevails pursuant to s 109 of the Constitution. His Honour said (at [11]): " Section 29(1) says that service is effected when the letter is delivered in the ordinary course of post, while s 160 says that a postal article sent by prepaid post addressed to a person at a specified address in Australia was received at that address on the fourth working day after having been posted. " 46 Section 160 does not so provide. It provides a rebuttable presumption to that effect, just as s 29(1) of the Acts Interpretation Act provides a rebuttable presumption that a letter is delivered in the ordinary course of post. The distinction is important when the issue is whether the provisions are inconsistent. One effect of s 160 is to facilitate the proof of what constitutes delivery in the ordinary course of post. 47 His Honour observed (at [12]) that s 109X of the Corporations Act deals specifically with the service of a document such as a statutory demand, whereas s 160 of the Evidence Act has a more general application creating a presumption as to the time of receipt of a postal article. However, a statutory demand sent by post is a "postal article" within the meaning of s 160. 48 This question was not considered on appeal (Masri Apartments Pty Ltd (In Liq) v Perpetual Nominees Ltd (2004) 214 ALR 338; 52 ACSR 136; 23 ACLC 165). 49 The plaintiff also argued that there was a difference between receipt of a postal article to which s 160 refers and delivery of a postal article to which s 29 refers. Clearly, there is a difference between the delivery of a postal article to a place and its receipt by a person. It is this distinction to which the High Court refers in Fancourt v Mercantile Credits Ltd. However, there is no distinction between delivery of an article to a specified address, that is, to a place, and its receipt at that address. 50 Because Austin J had held in Perpetual Nominees Ltd v Masri Apartments Pty Ltd that s 5C of the Corporations Act (which provides that the Acts Interpretation Act applies to the interpretation of the Corporations Act), s 29(1) of the Acts Interpretation Act, and s 109X of the Corporations Act were inconsistent with and prevailed over s 160 of the New South Wales Evidence Act, I directed service of notices on the Attorneys-General pursuant to s 78B of the Judiciary Act. No Attorney-General sought to intervene or to remove the cause. 51 The issue in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd was whether a payment schedule under s 14 of the Building Construction Industry Security of Payment Act 1999 (NSW) was "provided by" the respondent to the claimant within ten days after the payment claim was served. To be within time, the payment schedule had to be provided to the claimant on or before 27 October 2004. The payment schedule was left at the claimant company's registered office on 22 October 2004. That was effective service under s 109X(1)(a) of the Corporations Act. Because that place was also the claimant's ordinary place of business, it was also effective service pursuant to s 31(1)(b) of the Building Construction Industry Security of Payment Act. It was held that this constituted the "provision" of the payment schedule within the meaning of s 14(4) of the Building Construction Industry Security of Payment Act. 52 Another copy of the payment schedule was posted by express post with guaranteed next day delivery from Edgecliff to the company's registered office at a house address in Chiswick. The claimant had arranged for mail addressed to that address to be redirected to a post office box. The payment schedule was collected by the claimant on 28 October 2004. The trial judge was not satisfied that it was placed in the box on 28 October, rather than on 27 October 2004 (at [32]). 53 Section 31 of the Building Construction Industry Security of Payment Act provides: "31 Service of notices (1) Any notice that by or under this Act is authorised or required to be served on a person may be served on the person: (a) by delivering it to the person personally, or (b) by lodging it during normal office hours at the person's ordinary place of business, or (c) by sending it by post or facsimile addressed to the person's ordinary place of business, or (d) in such other manner as may be prescribed by the regulations for the purposes of this section, or (e) in such other manner as may be provided under the construction contract concerned. (2) Service of a notice that is sent to a person's ordinary place of business, as referred to in subsection (1) (c), is taken to have been effected when the notice is received at that place. (3) The provisions of this section are in addition to, and do not limit or exclude, the provisions of any other law with respect to the service of notices. " 54 The construction contract provided that notices and other documents would be deemed to have been given, received or served on the earliest date of (relevantly) actual receipt or three days after posting. 55 Service was effected both by the document being left at the claimant's registered office and ordinary place of business, and by its having been deemed to have been served three days after posting. It was also argued that service was effected by posting to the claimant's registered office pursuant to s 109X of the Corporations Act. 56 The principal matter argued appears to have been whether a payment schedule was "provided" within the meaning of s 14(4) of that Act, or "received" for the purposes of ss 17(2)(b), 17(3)(b) and 21 of that Act where, although it had been served at a place, it had not been received by a person on behalf of the claimant (at [48]-[50]). The claimant also argued that proof that the schedule was not received until 28 October 2004 displaced the presumption of s 29 of the Acts Interpretation Act (at [50]). Hodgson JA said: 55 In the case of postage, s 29 of the Acts Interpretation Act gives a rebuttable presumption; and if there is evidence establishing what actually happened, in my opinion the time service is effected would be when the document actually arrives at the registered office to which it is addressed. If the post has been diverted so as to preclude delivery to that office, then the time service is effected would be no later than when the document actually arrives at the address to which it was diverted. (I say 'no later than', because, as pointed out by Hunt AJA, it is strongly arguable that proof of later arrival at an address to which the post has been diverted does not displace the rebuttable presumption.) In either case, I do not think detection by any person on behalf of the company would be necessary. In my opinion, this result would not be affected by State legislation, such as s 160 of the Evidence Act 1995.
56 For those reasons, in my opinion, irrespective of fine questions of construction arising under the Act itself, the payment schedule was provided to Falgat at 4.22pm on 22 October 2004 when it was placed under the door at Falgat's registered office, this being during normal office hours. It also would have been provided no later than 27 October 2005 if the copy posted to Falgat was placed in Falgat's box at Kellyville post office on that day; and Falgat did not discharge its onus of proving it was not placed in the box on that day.
… 60 One relevant factor in approaching this question is that it seems to me highly unlikely that it was the intention of the legislature that provision of a payment schedule only occurs if the document actually comes into the hands of some person on behalf of the claimant. …
61 The use of the word 'provide' rather than the word 'serve' does carry a suggestion that a different meaning is intended, and that accordingly s 31 does not apply in the case of the word 'provide'. Against this, however, I do not think the legislature would have (1) used a problematic word like 'provide' with the intention that it have a different meaning from 'serve', (2) given useful instructions as to how service may be effected, yet (3) given no instructions whatsoever as to how provision may be effected. When this consideration is combined with the consideration raised in the previous paragraph, in my opinion this justifies the conclusion, reached by the primary judge in this case, that 'provide' does not mean anything different from 'serve', and that s 31 applies to 'provision' as well as to 'service'.
62 There remains the question of whether the time at which service or provision has taken effect is also the time at which a document is received, for the purposes of s 17(3)(b) (and see also s 17(2)(b) and s 21). I note that the word 'receive' is also used in s 31(2), but used in the context of 'received at that place'. In my opinion, mail delivered to a registered office or place of business is received at that place when it is put into the mail box of that registered office or place of business, without the necessity of anyone actually seeing it.
63 In my opinion, the word 'receive' in s 17(3)(c) does not necessarily require that the document come to the notice of a person authorised to deal with the document on behalf of the claimant. In general, in my opinion, it would be satisfied once the document has arrived at the claimant's registered office or place of business and is there during normal office hours. There may be circumstances in which service or provision has been effected within s 109X of the Corporations Act or s 31 of the Act, but the document has not been received, but I find it difficult to identify any such circumstances." 57 Hunt AJA said: 65 I agree with the orders proposed by Hodgson JA, and with his reasons except in relation to two matters referred to in pars [55] and [56] of his judgment, but which nevertheless do not affect the orders he has proposed.
66 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.
67 That document is deemed to have been served on the company at the time when it would have been delivered to that address in the ordinary course of post, unless the contrary is proved by the company: Acts Interpretation Act 1901, s 29. The company is entitled to prove that the document arrived at its registered office at a different time from that if the document had been delivered to that address in the ordinary course of post. However, it does not do so, again in my respectful opinion, by proving that it 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.
68 Section 31 of the Building and Construction Industry Security of Payment Act 1999 permits service of a document on a person by sending it by post to that person's ordinary place of business. In the present case, the evidence is that the appellant continued to use its registered office as its ordinary place of business notwithstanding the diversion of its mail to another address. I therefore do not regard it as even arguable that the time the document arrived at the address to which the mail had been diverted was the time of service on the appellant.
69 It follows also that I do not agree with the last sentence of par [56]." 58 Handley JA agreed with Hunt AJA, and subject thereto, with Hodgson JA. 59 I will deal in more detail later in these reasons with the views expressed as to the effect of mail being diverted to a post office box. 60 Of present concern is Hodgson JA's conclusion (at [55]) that " … this result would not be affected by State legislation such as s 160 of the Evidence Act 1995". In paragraph [55], Hodgson JA postulates two effects of the mail being diverted. The first is that where mail is diverted so as to preclude delivery to the registered office, service may be taken to be effected when it reaches the place to which it was diverted, i.e. the post office box. The second possibility is that the presumption under s 29 of the Acts Interpretation Act that the mail is delivered to the company's registered office in the ordinary course of post is not rebutted if the mail is diverted. Hodgson JA then said (clearly correctly, if I may respectfully say so), that in either case "detection by any person on behalf of the company", i.e. receipt by someone on behalf of the company, is unnecessary. It was "this result", i.e. the result that receipt by a person on behalf of the company was unnecessary, which was unaffected by s 160 of the Evidence Act. 61 Such a finding has no implication for the resolution of this case. 62 However, Hodgson JA might have meant that s 160 of the New South Wales Evidence Act had no application to the question of whether the claimant had discharged the onus which lay on it under ss 14 and 15 of the Building Construction Industry Security of Payment Act to prove that the document was not provided to the claimant by being placed in the post office box on or before 27 October 2004. In paragraph [56], his Honour held that the claimant had not discharged that onus. If his Honour meant that s 160 could have no relevance to that question, I would agree, not because s 160 was incapable of application because it was State legislation, but because in its terms it does not apply where delivery is made otherwise than to the address specified on the envelope to which it is posted. 63 If Hodgson JA meant that s 160 of the New South Wales Evidence Act could have no application to the question whether the claimant had discharged the onus of proving that the document was not delivered to the post office box before 27 October because it is State legislation and the time of service is solely governed by Commonwealth law, that was no part of the ratio decidendi of the Court's decision. Handley JA and Hunt AJA did not accept that it was open to the claimant to displace the presumption of delivery in the ordinary course of post, by evidence that the document arrived at the address to which it had diverted its mail at a time which was different from when it would have arrived at its registered office in the ordinary course of post. Hodgson JA's reasons on this point were not part of the Court of Appeal's decision. 64 In Falgat Constructions, s 160 was irrelevant to proving when the document would have arrived in the ordinary course of post if delivered to the claimant's registered office because the evidence established that this was the next day. If Hodgson JA is to be taken as saying that the section cannot apply in accordance with its terms to prove when service in the ordinary course of post pursuant to s 109X of the Corporations Act and s 29 of the Acts Interpretation Act occurs, or to prove of the time of service where it is proved that delivery was not made in the ordinary course of post, then I do not understand Handley JA and Hunt AJA to have concurred in that view. 65 With great respect to those of a different view, I consider that the proposition that s 160 of the New South Wales Evidence Act is displaced by s 109X of the Corporations Act and s 29(1) of the Acts Interpretation Act is clearly wrong. Does s 160 of the Evidence Act Apply? 66 Mr Orlov for the plaintiff submitted that there was evidence "sufficient to raise doubt about the presumption". 67 The evidence relied on was said to be sufficient to raise a doubt as to whether the statutory demand had been delivered to the post office box on the fourth working day after having been posted. If this were the relevant question, I would not agree. 68 Neither party called evidence from any employee of Australia Post. The plaintiff relied upon evidence of Mr Tattam that the mail addressed to him was available for collection before 9.00am each working day. He also said that, other than for a short period prior to Christmas, all mail was placed into the box once daily. That evidence was given without objection, although it is not apparent what knowledge Mr Tattam could have about the times at which employees at the Manly post office placed mail received at the post office into the post boxes. Be that as it may, this evidence falls well short of saying that mail available for collection from 9.00am on any working day is usually placed in the post box on the morning of that day. It is equally consistent with Mr Tattam's evidence that the mail available for collection from 9.00am on any working day is placed in the post box on the previous day, or the previous working day. 69 The plaintiff also tendered an Australia Post pamphlet and application form for the opening of post office boxes. The pamphlet was dated May 2005. The pamphlet included the statement "We deliver mail to your post office box as it's sorted each morning, so you can collect you (sic) mail first thing every day." However, this statement is not evidence that mail delivered to a post office is only sorted, and placed in a post office box after sorting, in the morning. In this case, even if I assume that the post office was closed between 30 September and 2 October 2006 (about which there was no evidence), the evidence is equally consistent with the statutory demand having been received after 9.00am or 10.00am on Friday 29 September 2006 and placed in the post office box on that day, as it is with its having been placed in the post office box on the morning of 3 October 2006. 70 If s 160 creates a presumption as to the time of delivery to the post office box, I do not think the evidence is sufficient to raise a doubt that the letter sent on 25 September by prepaid post was received in the post box on the fourth working day after it was posted, that is, on 29 September. The fact that the letter enclosing the statutory demand was not available for collection at about 9.00 or 10.00am on 29 September is not sufficient to raise a doubt that it was placed in the post box at some time on that day. 71 However, I do not think that s 160 creates a presumption as to the time a letter addressed to a street address is delivered to a post office box, if the letter is diverted. The presumption under s 160 is that a postal article addressed to a person at a specified address was received at that address after four working days. The presumption that the letter was received at the company's registered office on 29 September 2006 was clearly rebutted. Section 160 does not create a presumption that it was delivered to the post office box on that day. 72 Accordingly, although not for the reasons advanced by the plaintiff, I accept there is no evidence or presumption as to when, in the ordinary course of post, the statutory demand would have been delivered to the post office box. It is equally possible that it was delivered to the post office box on 3 October 2006 or before that date. If the time of service to the post office box is the relevant time then, consistently with Derma Pharmaceuticals Pty Ltd v HSBC Bank Australia Ltd (2005) 188 FLR 373, the plaintiff would have failed to show that its application is within time. That is not how the matter was argued. As I accept the plaintiff's further (albeit belated) argument that the relevant time is not the time of delivery to the post office box, but the time the statutory demand was taken to the plaintiff's registered office, it is not necessary to relist the matter for further submissions on the question of onus. Was Service Effected when the Statutory Demand was Delivered to the Post Office Box? 73 I infer that the letter was taken to the company's registered office after it was collected from the post office box. Even if I were to assume that in the ordinary course of post, the letter addressed to the street address of the company's registered office would have been delivered within one or two business days of 25 September 2006, the presumption that the letter was so delivered was rebutted. The evidence establishes that the letter was not taken to the company's registered office until 3 October 2006. 74 Counsel for the defendants submitted that: " … the ordinary course of post was interfered with by the private arrangement between Geoffrey Tattam and Australia Post and this extended delivery arrangement should not be used by the plaintiff to overturn the usual postal delivery regime of Australia Post.
It is submitted that in circumstances where, without any other apparent disclosure, an arrangement is put in place by the occupier of a registered address for service of documents that mail be directed to a post office box and that person does not clear mail other than in the morning, it is not open to a party to say that any letters received and deposited to the post office box later in the day have not been 'delivered' for the purpose of establishing service within the terms of s 109X of the Corporations Act 2001 and s 29 of the Acts Interpretation Act 1901." 75 Initially, counsel for the plaintiff accepted the correctness of these submissions, but later sought to withdraw that concession. 76 In Bellway Corporation Limited v Ausdrill Ltd (1995) 13 ACLC 1,663, a statutory demand was posted by certified mail addressed to the company's registered office. That was the place of business of another firm which permitted its premises to be used as the registered office of the applicant company. By an arrangement between the occupier of the premises and Australia Post, mail addressed to companies, including the applicant company, at the street address, was placed in a post office box kept by the occupier. The statutory demand was collected by an employee of the occupier and, in accordance with the usual practice of the firm, would have been taken back to the registered office. The principal of the firm deposed to not having received the document. The company contended that it had not been served at all. Owen J said (at 1,668): "The arrangement (quite properly) entered into between the occupier and the post office means that in the normal course of business a letter properly addressed and posted by pre-paid post to the applicant at its registered office would not usually be taken by an employee or contractor of Australia Post and physically deposited by that person at the registered office. That is not something of which a person in the position of the respondent creditor could or would have notice. It seems to me therefore that the term 'ordinary course of post', for the purposes of the deeming provision, ought to include a methodological (as well as a temporal) application. It should relate to the ordinary course of post as it affects the company to whom the letter was addressed. If this were not so it would be unwise for any person wishing to deal with a company to effect service by post because the person would never know whether some arrangement had intervened that would inevitably prevent reliance on the deeming provision. I accept that this would only arise where the company puts the question of service in issue. However, I do not believe that the legislature would have intended service by post to be limited in this way. There is evidence that satisfies me of the following:
(a) the document concerned was addressed properly to the applicant company at its registered office;
(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.
21/06/2007 - Para 75. 'counsel for the defendant' replaced by 'counsel for the plaintiff' Para 95 Line 6 'not' inserted after 'when in fact it was' - Paragraph(s) 75, 95
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Scope Data Systems Pty Ltd
David Goman as Representative of the Partnership BDO Nelson Parkhill
[2004] SASC 70
(1995) 184 CLR 265
(1983) 154 CLR 87
(1999) 100 FCR 138
(2005) 188 FLR 373
(1996) 41 NSWLR 542
(2004) 183 FLR 142
(1987) 93 FLR 256
(2004) 214 ALR 338
(1973) 131 CLR 8