Shire Lind Developments (NSW) Pty Ltd v Lords Property Group Pty Ltd, in the matter of Shire Lind Developments

Federal Court of Australia|2020-03-18|Before: Gleeson J

The applicant's interlocutory process dated 3 March 2020 be dismissed.
The applicant pay the respondent's costs of the interlocutory process. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GLEESON J: 1 The applicant (Shire Lind) seeks a review of the decision of Registrar Segal made on 26 February 2020 dismissing its application to set aside a creditor's statutory demand (statutory demand) for $1,511,244.06 from the respondent (Lords), dated 7 January 2020 and made pursuant to s 459E of the Corporations Act 2001 (Cth) (Act). By s 459G of the Act, a company may apply to the Court for an order setting aside a statutory demand served on the company, but such an application may only be made within 21 days after the demand is so served. 2 Shire Lind's application was made on 30 January 2020. 3 By s 35A(6) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), the Court may "review an exercise of power by a Registrar pursuant to [s 35A] and may make such order or orders as it thinks fit with respect to the matter with respect to which the power was exercised". The Court's function, in reviewing a Registrar's decision under s 35A(6) of the Act, is to conduct a hearing de novo, at which the Court is required to rehear the case and decide the facts for itself: Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2) [2013] FCA 699 at [6]. 4 The review application raises a single question: whether the statutory demand was served on the applicant on 8 January 2020. If the statutory demand was served on that day, then the application to set it aside was made out of time by one day, and the application for review must be dismissed.

Background facts 5 On 11 December 2019, Lords obtained a default judgment against Shire Lind in the Supreme Court of New South Wales, in the sum of $1,511,244.06 plus costs. 6 On 7 January 2020, Lords' solicitor, Mr Mournehis, prepared the statutory demand and sent it by post under cover of a letter addressed to Shire Lind's registered office at Suite 2, Level 13, 815 Pacific Highway, Chatswood (Suite 2 or registered office). The envelope in which the statutory demand was sent was addressed to Shire Lind's registered office. 7 The evidence was that Suite 2 comprises an area of Level 13, 815 Pacific Highway, Chatswood leased by Quantum Real Estate Pty Ltd. In the lease, the premises are described as Level 13, Suite 13.02. Shire Lind is a member of a group of companies called Quantum Group. Suite 2 is the business premises of the Quantum Group and the registered office of most of the Quantum Group companies. 8 On Level 13, the building's lift opens onto a lobby area which does not form part of Suite 2. As at 8 January 2020, the lobby area contained a desk facing the lift (lobby desk). The lobby desk looks like a reception desk, in that a computer screen is sitting on the desk facing away from the lobby and there appear to be two chairs behind the desk facing towards the lift, but the evidence is that the desk was not used as a reception. Instead, there were two signs on the lobby desk, each next to a buzzer. One sign says "Welcome to QUANTUM GROUP. Please press button for service" (Quantum Group sign). The other sign says "Welcome to Carrera Should reception be unattended please ring the bell". 9 Carrera is the name of a business that occupies another portion of Level 13. 10 The main entrance to Suite 2 is through a glass sliding door. In order to obtain entrance to Suite 2, a person must press the buzzer on the lobby desk adjacent to the Quantum Group sign. If a person presses this buzzer, there is a ringing sound inside Suite 2 which any person within Suite 2 can hear. 11 A search of the Australia Post website for the tracking number of the envelope in which the statutory demand was posted discloses the following: 63412002137094 Delivered Most recent update Delivered CHATSWOOD NSW Wed 8 Jan 11:47 am 12 Shire Lind adduced the following relevant evidence from six employees of Quantum Group: (1) Aaron Lim, a graphic designer, was at work at Suite 2 on 8 January 2020 from about 8:20 am to about 2 pm. There were six persons working at Suite 2 while he was there that day. On 8 January 2020, Mr Lim did not take delivery of, or otherwise see, a yellow Express Post envelope of the kind in which the statutory demand was posted. Nor did he hear the buzzer referred to above. Mr Lim also says: [I]t was not my job at the Quantum Group to look for any mail which might be left somewhere in: (a) the Level 13 Lift Exit area where you exit the front main Level 13 Lift; or (b) out the back where the Rear Level 13 Lift Exit is. (2) Stephen Taylor, Chief Financial Officer of Quantum Group, was at work at Suite 2 on 8 January 2020 from about 7:30 am to about 6:30 pm. His evidence was to the same effect as Mr Lim's set out above. (3) Nancy Li, Finance Manager and Jiayue Li, Accounts Assistant, were both at work at Suite 2 on 8 January 2020 from about 8:30 am to about 5:30 pm. Their evidence was to the same effect as Mr Lim's set out above. (4) Chloe Bui Yen Lo, Tax Accountant, was at work at Suite 2 on 8 January 2020 from about 8:30 am to about 5:40 pm, although she left the office for lunch. Her evidence was to the same effect as Mr Lim's set out above. (5) Somayeh Sara, another Accounts Assistant, was at work at Suite 2 on 8 January 2020 from about 8:15 am to about 5:30 pm, although she also left the office for lunch. Her evidence was to the same effect as Mr Lim's set out above. 13 The six Quantum Group employees also gave evidence of observing mail in areas on Level 13 beyond Suite 2, in the period December 2019 to mid-January 2020. 14 Mr Gribble, the sole director of Shire Lind, was on holidays overseas on 8 January 2020. He returned to work at Suite 2 on 20 January 2020. Mr Gribble's evidence was that he first became aware of the statutory demand when he received an email from Lords' solicitor on 14 January 2020. 15 Mr Gribble gave the following evidence in his 25 February 2020 affidavit: As the sole director of Shire Lind, I never saw or received the original Lords/Shire Lind Statutory Demand which, I understand, Lords contends was served on Shire Lind at its registered office on 8 January 2020. 16 However, the evidence included a letter from Shire Lind, apparently signed by Mr Gribble and sent from his email address to Mr Hallasso on 4 February 2020 at 2:17 pm, which states relevantly: In relation to the alleged breach of the 21-day response period for a Statutory Demand. As your office served the demand via post, although your office produced the document on the 7 January 2020, the document was not received in this office until the 8 January 2020 making the 8 January 2020 the date of service. 17 As to the circumstances in which this letter was created and sent, Mr Gribble signed a statement dated 26 February 2020 (annexed to his 3 March 2020 affidavit) which states, relevantly: 18. The Application for an adjournment on the 4/2/2020 letter (see annexure F) contained an error of position with a further email later that day at 5:11pm to the respondent's lawyers matter is real and the issue is to determine was whether the express post enveloped with the statutory demand delivered to the registered office of Shire Lind. [sic] … 24. The 4th February 2020 letter was written by a junior clerk and who accepted without question the assertions of the Solicitor for the Defendant made in their letter dated 14th January 2020. The signature on the letter dated 4th [February] 2020 was an electronic one and thus incapable of verifying the statements made in the letter. I will submit evidence to this effect. 25. I corrected that statement later that day in a separate email to Nicholas Hallasso at 5:11 PM and that "I am sure that as I was not present", as was overseas at that time. 18 The 26 February 2020 statement annexes a statement signed by Baraa Hamdy, law clerk, which states relevantly: 1. I confirm that I typed the letter dated 4th February 2020. Attached in the Affidavit of Nicholas Halasso as Annexure "K". ... 4. I relied on the date of service supplied by the Defendant in the Without Prejudice Offer Letter dated 14th February 2020, due to the fact that I was not in the office on the 8th of January 2020. 5. The Letter of 4 February 2020 was used as a means of illustrating the calculation of the 21 days and not an admission that the document was delivered on 8 January. 6. I inserted the electronic signature of Peter Gribble onto the letter. I created a PDF version of the letter and instructed Peter to send the letter to Nicholas Halasso. 7. Upon reading Nicholas Halasso's response at 2:54 PM I realised my error in the statement made in paragraph 6 of the letter dated 4th February 2020. 8. After explaining this position to Peter Gribble, he clarified the position again with Nicholas Halasso later that day, in an email sent at 5:11 PM, confirming that neither he nor any staff in the office could ascertain the actual date the Statutory Demand was delivered to the office. 19 In an email sent from Mr Gribble's email address to Mr Hallasso on 4 February 2020 at 5:11 pm, Mr Gribble wrote: In relation to receipt of the statement of demand [sic] I am unsure of the actual date as I was not present and the person who purportedly received it is also not in the office and returns late next week. 20 In his 3 March 2020 affidavit, Mr Gribble also included the following evidence concerning the delivery of the statutory demand: (1) An affidavit sworn by Mr Gribble on 30 January 2020 in which Mr Gribble said, relevantly: "On the 7th of January 2020 the Plaintiff received a statutory demand for the amount of $1,511,244.06 …". (2) A statement signed by Mr Gribble and dated 19 February 2020, addressed to the Supreme Court of New South Wales which includes the following: 5. I have no idea what day the packet arrived at the registered office of Shire Lind as I was not in the country at the date of delivery and we prepared our application during January … … 7. Also, our reception is a shared reception on Level 13 and any postage it left on the main table as dropped off by the postman so the actual date or arrival in our office is somewhat problematic [sic] … … 25. The notice served was delivered to a joint reception area … (3) A statement signed by Mr Gribble and dated 26 February 2020, addressed to Registrar Segal, which includes the following: The Australian Postman do not deliver mail to the applicant's registered office but placed it somewhere on level 13, in the open area outside of the registered office or a vacant desk on that level [sic] (4) The following relevant sworn statements: 49. I was very concerned and distressed that the Registrar would not grant an adjournment … when Shire Lind: … (b) wanted to file and serve more affidavits in relation to the issue of service. I believed that Shire Lind could prove the yellow Express Post envelope, which contained the Lord/Shire Lind Statutory Demand … was not served at Shire Lind's registered office … Instead, the postman had left the Lord/Shire Lind Express Post Envelope somewhere either in the area of the Level 13 Lift Exit or the Level 13 Desk or out at the back outside the Shire Lind Registered Office … … 51. I understood from what the Registrar said that the Registrar was focusing on the issue of the confirmation of delivery of the Lord/Shire Express Post Envelope on Wednesday, 11 January 2020 [sic] at 11:40 am somewhere on Level 13 outside the Shire Lind Registered Office as delivery to and service upon Shire Lind. 52. I was concerned that the Registrar was not addressing … the facts and issues raised in the Shire Lind 25 February 2020 Affidavits and in My 26 February 2020 Statement, which were trying to say that the Lord/Shire Express Post Envelope was left by the postman somewhere on Level 13 at 11.40 am on 8 January 2020, but was not delivered into and not served upon the Shire Lind Registered Office on 8 January 2020.

Case law 21 In Re Shaolin Temple Foundation (Australia) Ltd [2016] NSWSC 804, Black J recognised that Australia Post's tracking records are not determinative. In that case, his Honour was not persuaded that delivery was established by the tracking record, where there was evidence both of the checking of the mailbox without the statutory demand being received and specific evidence by the person who had collected the mail on a certain date of having collected the mail including the statutory demand on that date. Black J accepted that evidence, on an assessment of the witness's credibility, and found that her evidence plainly displaced the inference that would otherwise have followed the tracking record. 22 In Re Dyldam Developments Pty Ltd [2019] NSWSC 1518, Black J concluded that the tracking record and the probabilities established by the evidence left no real room for doubt that delivery had occurred on the date specified on the tracking record. In reaching this conclusion, his Honour noted the following matters (at [13] and [14]): … I reach that conclusion because the tracking record makes clear that delivery took place at Parramatta early on 9 July 2019, at 9:50am; there is no alternative candidate for a delivery location in Parramatta on that date other than Dyldam's registered office; it is apparent that the documents did reach Dyldam's registered office; there is no evidence from any staff of Dyldam's mailroom, or its accounts staff, as to how they treated the documents upon delivery, and the possibility that the document was held by a receptionist or member of the accounts staff from delivery until it was provided to Mr Koura is not sought to be displaced; and the evidence of Mr Koura goes no further than to show when he, as distinct from Dyldam, received the relevant documents. I would have reached that result without relying upon any presumption that may arise from Dyldam's failure to lead evidence that would be within its control. However, as Mr Krochmalik points out, the Court may more readily reach that result where Dyldam's evidence is silent in significant respects. There is no evidence, for example, as to whether it maintains a record of delivery of items, or at least of significant items such as creditor's statutory demands, in the form of a mail book or some form of receipt stamp. There is no evidence led by any member of the mailroom or accounts staff as to the process adopted for dealing with such documents, when they are received, and no evidence of any particular person who dealt with this creditor's statutory demand when it was received. It is unclear, of course, whether statutory demands are, for Dyldam, a matter of routine or a matter out of the ordinary, but if they are out of the ordinary, then a member of the accounts staff may more readily recall how he or she dealt with one on a particular occasion. In any event, evidence of the steps taken in the mailroom or by the receptionist to deal with the Demand is plainly evidence which was in Dyldam's control, as is evidence of any system adopted by it to record the delivery of documents, and no such evidence is led. I infer that such evidence would not assist in displacing the inferences that can otherwise be drawn from the tracking receipt and evidence of delivery to Dyldam's registered office address: Gerard Cassegrain & Co Pty Ltd v Cassegrain [2013] NSWCA 453; (2013) 87 NSWLR 284 at [26], applying principles deriving from Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63 at 65; [1774] EngR 2; 98 ER 969 at 970.

Consideration 23 There are some obvious and significant anomalies in the evidence. Firstly, Mr Gribble's 4 February 2020 email at 5:11 pm indicates a belief held by Mr Gribble that a particular person had "purportedly received" the statutory demand. However, the evidence does not identify the basis for this belief. The email suggests that there is a person, known to Mr Gribble, who was the recipient of the statutory demand but there is no evidence from such a person. 24 Secondly, Mr Gribble has twice asserted that the statutory demand was in fact left on Level 13, 815 Pacific Highway, Chatswood: in his 19 February 2020 statement and in his 3 March 2020 affidavit as set out above. These assertions support an inference that the statutory demand was delivered to Level 13, 815 Pacific Highway, Chatswood and was subsequently found by someone known to Mr Gribble on Level 13, but outside Suite 2. 25 Thirdly, Shire Lind's evidence does not purport to prove that Shire Lind never received the statutory demand. The highest evidence on this issue is Mr Gribble's evidence that he "never saw or received the original Lords/Shire Lind Statutory Demand". To the contrary, Mr Gribble's 19 February 2020 statement implies that Shire Lind did receive the statutory demand by the words "I have no idea what day the packet arrived at the registered office of Shire Lind". Further, in his 30 January 2020 affidavit, Mr Gribble gave sworn evidence that Shire Lind received the statutory demand on 7 January 2020. As Flick J noted in Buggy v Reinisch [2010] FCA 917 at [69], "the requirement that an oath or affirmation be administered … is (in part) a solemn reminder to any witness of the serious obligation imposed to give a truthful account". The same applies to an oath or affirmation made when swearing an affidavit. Mr Gribble did not attempt to explain how he came to give this sworn evidence if, as he subsequently asserted, he had "no idea" when the statutory demand arrived. 26 Fourthly, neither of Mr Gribble's 25 February 2020 and 3 March 2020 affidavits addresses the circumstances in which the 4 February 2020 letter, admitting receipt of the statutory demand by Shire Lind on 8 February 2020, was created and sent. The 26 February 2020 statement does not address whether Mr Gribble reviewed the letter before it was sent, or authorised the affixing of his electronic signature. Nor does the unverified statement of a law clerk who apparently drafted the letter. Mr Gribble annexed this unverified statement to his 26 February 2020 statement which is, in turn, annexed to his 3 March 2020 affidavit. 27 Fifthly, in his 26 February 2020 statement, Mr Gribble states Shire Lind's intention "to submit evidence from the 7 people present in the office on the eighth, ninth and tenth of January 2020 in all people in relation did they collect mail addressed to Shire Lind on the eighth or did they hear the buzzer on the eighth [sic]". The reference to seven people is consistent with the 25 February 2020 affidavit of Nancy Li (annexed to Mr Gribble's 3 March 2020 affidavit) which states that during the week 6 to 10 January 2020 "[t]here were only seven employees of the Quantum Group working in the Quantum Group Office" . 28 The evidence does not explain the discrepancy between this evidence and the evidence now given to the effect that there were six staff working in Suite 2 on 8 January 2020. 29 Taking into account these matters, and all of the evidence, I find that the statutory demand was delivered to Level 13, 815 Pacific Highway, Chatswood on 8 January 2020. Further, the evidence supports an inference, which I draw, that the statutory demand was received in Suite 2 by an unidentified person, who probably collected it from outside Suite 2. 30 As to the date of receipt, the 4 February 2020 letter from Shire Lind states that the statutory demand was received in Suite 2 on 8 January 2020. Mr Gribble's evidence does not include a statement that he now believes the letter to be false or incorrect in making this statement. In the absence of such evidence or any other evidence that the letter was incorrect, I find that the statutory demand was received in Suite 2 on 8 January 2020 and service was thereby effected on Shire Lind at its registered office on 8 January 2020.

Conclusion 31 The Registrar correctly dismissed Shire Lind's originating process because the Court lacks jurisdiction to hear Shire Lind's application, the time for filing of the application having expired on 29 January 2020. 32 Accordingly, the application for review of the Registrar's decision must be dismissed. 33 Costs should follow the event. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

Corporations Act 2001(Cth)ss 459E, 459G

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