Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Soong v Deputy Commissioner of Taxation [2011] NSWCA 26 Hearing dates: 25 November 2010 Decision date: 25 February 2011 Before: Allsop P at 1; Giles JA at 2; Hodgson JA at 3; Tobias JA at 8; Gzell J at 9 Decision: Appeal allowed Set aside the judgment and orders of Schmidt AJ made on 5 August 2009 and in lieu thereof enter judgment for the Appellant on the Respondent's statement of claim filed on 28 July 2008 Order the Respondent to pay the Appellant's costs of the hearing before Schmidt AJ Order the Respondent to pay the Appellant's costs of the appeal [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: TAXATION - Income Tax - Income Tax Assessment Act 1936 (Cth), s 22AOE - notice - service by post - service effected upon delivery - Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354 not followed. STATUTORY INTERPRETATION - Acts Interpretation Act 1901 (Cth), s 29 - meaning of service by post. Legislation Cited: Acts Interpretation Act 1901 (Cth) s 13, s 28A, s 29 Evidence Act 1995 (Cth) s 163(1) Income Tax Assessment Act 1936 (Cth) s 222AOC, s 222AOF, s 222AOG, s 222AOE, s 222ANA, s 222APE Income Tax Assessment Act 1997 (Cth), s 950-100 Taxation Administration Act 1953 s 269-50 Cases Cited: Banovec v Deputy Commissioner Taxation [2009] NSWCA 146 Chamberlain v R [1983] FCA 78; (1983) 72 FLR 1 Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 Deputy Commissioner of Taxation v Ikin & Anor [2006] NSWSC 86; (2006) 61 ATR 706 Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354; (2007) 245 ALR 150; (2007) 229 FLR 243 Deputy Commissioner of Taxation v Trio Site Services Pty Ltd [2007] FCA 776 Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370 Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504 Miller v Deputy Commissioner of Taxation (1997) 26 ACSR 533 Robertson v Deputy Commissioner of Taxation [2010] NSWCA 58; (2010) 239 FLR 29 Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; (2004) 141 FCR 107 SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2; (2006) 150 FCR 214 Category: Principal judgment Parties: Desley SOONG (appellant) DEPUTY COMMISSIONER OF TAXATION (respondent) Representation: Counsel: S D ROBB QC/ S J FREE (appellant) Dr M PERRY QC/ S FODA (respondent) Solicitors: Diamond Conway (appellant) Australian Government Solicitor (respondent) File Number(s): 2009/298453 Decision under appeal Jurisdiction: 9111 Citation: Deputy Commissioner of Taxation v Soong [2009] NSWSC 495 Date of Decision: 2009-06-10 00:00:00 Before: Schmidt AJ File Number(s): SC 13826/08 HEADNOTE Facts The appellant, Desley Soong, was a director of three companies that made PAYG deductions from the salaries and wages of their employees. The companies failed to remit the withholdings to the respondent, Deputy Commissioner of Taxation. In those circumstances, Ms Soong was liable to pay to the Commissioner by way of penalty an amount equal to the non-remitted withholdings under s 222AOC of the Income Tax Assessment Act 1936 (Cth) (the Act). Under s 222AOG of the Act, before the Commissioner could recover a penalty, a notice had to be given to the director who had 14 days within which to take one of a number of steps. One step available to the director, pursuant to notice provision s 222AOE, was placing the company under administration. On 29 November 2007, notices were sent by post to Ms Soong at her home address. The notices were delivered on 30 November 2007 and received by Ms Soong on 1 December 2007. On 14 December 2007, an administrator was appointed to the three companies. The primary judge followed the majority decision of the NSWCA in Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354. Her Honour concluded Ms Soong remained liable for the penalties because the 14-day period ran from the date of sending by post. Issues Issues arising on appeal were: (1) Whether the 14-day period ran from the date of delivery of the notices or from the date of sending by post. (2) Is Meredith distinguishable? (3) Should Meredith be followed? HELD (appeal allowed with costs) As to (1) ( per Gzell J, Allsop P, Giles, Hodgson, Tobias JJA agreeing ) The 14-day period ran from the date of delivery of the notices. Section 222AOF of the Act provided that one way the Commissioner may 'give' a s 222AOE notice is by sending by post. These words invoke s 29 of the Acts Interpretation Act 1901 (Cth), which specifies the conduct that will constitute postal service in the absence of a contrary intention, and determines the date of that service unless the contrary is proved. Under s 29, service is deemed to have been effected at the time at which the document would be delivered in the ordinary course of post [49]. As to (2) ( per Gzell J, Allsop P, Giles, Hodgson, Tobias JJA agreeing ) Meredith is authority for the proposition that a notice is given for the purposes of s 222AOE if the address of the director is obtained from ASIC records, when notice is sent by post. If followed, proof of delivery of the notice is irrelevant [40]. The appellant failed to establish that Meredith is distinguishable from the present circumstances. As to (3) ( per Gzell J, Allsop P, Giles, Hodgson, Tobias JJA agreeing ) Meredith should not be followed. The court entertained a strong conviction as to the incorrectness of the decision in Meredith and held it was 'clearly' wrong [4, 57]: Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86, Gett v Tabet [2009] NSWCA 76. With the greatest respect, Meredith should have found that s 222AOF was subject to the first limb of s 29 unless a contrary intention was established. In the absence of proof to the contrary, the second limb of s 29 was invoked such that service of the notice was deemed to have been effected at the time of delivery in the ordinary course of the post [56]. Judgment 1ALLSOP P: With the utmost respect to the majority in Meredith , I agree with the conclusion and reasons of Gzell J that Meredith is plainly wrong in point of reasoning and should not be followed. I agree that the question in Fancourt and Skalkos need not be decided. It is also unnecessary to choose between the views of Gzell J and Hodgson JA as to Miller . I otherwise agree with Gzell J as to the reasons for allowing the appeal. I agree with the orders proposed by Gzell J. 2GILES JA: For the reasons given by Gzell J, I agree with the orders his Honour proposes. 3HODGSON JA: I agree with Gzell J that the appeal should be allowed with costs, and subject to what I say below, I agree substantially with his reasons. 4In my opinion, the ratio decidendi in Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354; (2007) 245 ALR 150 was that the Commissioner will satisfy the pre-condition to entitlement to recover the penalty in question if a notice is sent to the directors' address as found in ASIC's records, because the Income Tax Assessment Act 1936 (Cth) did relevantly disclose an intention contrary to s 29 of the Acts Interpretation Act 1901 (Cth). On that basis, I agree with Gzell J that Meredith was "clearly wrong", substantially for the reasons he gives. 5However, this does not necessarily mean that the actual result in Meredith was wrong. Although proof of the time of delivery will displace the deemed time of delivery provided by s 29(1), this does not necessarily mean that proof of non-delivery will displace the deeming that service was effected. That question was explicitly left open in Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 at 96-97, and in Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; (2004) 141 FCR 107 at [16] - [25]. Giles JA, in dissent in Meredith at [20], simply noted that the Deputy Commissioner accepted that proof to the contrary in s 29(1) extended to proof that the notice was not delivered at all, so that there was no occasion to question this position. 6It might be said that it would be strange if proof that a notice was delivered a year after posting would have the effect that service was not effected until a year after posting, but proof that it was not delivered at all would have the effect that service was effected at the time when the notice would have been delivered in the ordinary course of post. However, such a result is not necessarily unreasonable. It might be considered reasonable to place the risk of slow delivery on the giver of the notice, but the risk of complete failure of delivery on the recipient. In any event, as in Fancourt and Skalkos , I prefer to leave this question open. 7As regards the decision in Miller v Deputy Commissioner of Taxation (1997) 26 ACSR 533, Dr Perry QC for the Deputy Commissioner submitted that it was not in conflict with Meredith because in Miller the notice was said to have been "sent by pre-paid post to the appellant", but it was not said or shown that it was sent to the address obtained from ASIC documents. In my opinion, where there was no suggestion in Miller that the address to which the notice was sent was not that disclosed in ASIC records, or that it made any relevant difference whether s 28A of the Acts Interpretation Act or s 222AOF of the Income Tax Assessment Act was being relied on, Miller should be considered as in conflict with Meredith . There was in my opinion no relevant difference in the particular statutory provision of the Income Tax Assessment Act considered in Miller from that considered in Meredith . Accordingly, if I were wrong in thinking that Meredith was clearly wrong, I would reach the same result by holding that the decision in Miller was preferable to that in Meredith . 8TOBIAS JA: I agree with the orders proposed by Gzell J and, subject to one matter, with his reasons. In particular, I agree that the majority judgment in Meredith was clearly wrong and that it should not be followed. I find it unnecessary to choose between his Honour's remarks with respect to Miller and those of Hodgson JA. 9GZELL J: By way of introduction, the appellant, Desley Soong, was a director of three companies that made PAYG deductions from the salaries and wages of their employees. The companies failed to remit the withholdings to the respondent, Deputy Commissioner of Taxation. In those circumstances Ms Soong was liable to pay to the Commissioner by way of penalty an amount equal to the non-remitted withholdings under the Income Tax Assessment Act 1936 (Cth), s 222AOC. 10Before the Commissioner could recover such a penalty, a notice had to be given to the director who had 14 days within which to take one of a number of steps. If one of the steps was taken in time, the penalty was remitted under s 222AOG. 11The notice provision was s 222AOE which was in the following terms: "The Commissioner is not entitled to recover from a person a penalty payable under this Subdivision until the end of 14 days after the Commissioner gives to the person a notice that: (a) sets out details of the unpaid amount of the liability referred to in subsection 222AOC(1), (1A) or (2) (whichever relates to the penalty); and (b) states that the person is liable to pay to the Commissioner, by way of penalty, an amount equal to that unpaid amount, but that the penalty will be remitted if, at the end of 14 days after the notice is given: (i) the liability has been discharged; or (ii) an agreement relating to the liability is in force under section 222ALA; or (iii) the company is under administration within the meaning of the Corporations Act 2001 ; or (iv) the company is being wound up." 12On 29 November 2007 notices were sent by post to Ms Soong at her home address. She received the notices on 1 December 2007. It was common ground that the notices were delivered to Ms Soong's home address on 30 November 2007. On 14 December 2007 an administrator was appointed to the three companies. 13If the 14-day period ran from the date of delivery, the penalties were automatically remitted. If the period ran from the date of sending by post, Ms Soong remained liable for the penalties. 14Schmidt AJ followed the majority decision of this court in Deputy Commissioner of Taxation v Meredith [2007] NSWCA 354; (2007) 229 FLR 243 and concluded that Ms Soong remained liable for the penalties because the 14-day period ran from the date of sending by post. Appellant's submissions 15Wide ranging submissions were presented on behalf of Ms Soong to support her contention that the 14-day period ran from the date of delivery of the notices to Ms Soong and that Meredith was either distinguishable or wrongly decided. In light of this last contention a Bench of five judges sat. 16The giving of the notice to which s 222AOE refers was expanded in s 222AOF(1). It was in the following terms: "If it appears from ASIC documents that a person is, or has been within the last 7 days a director of the company, the Commissioner may give the person a notice under section 222AOE by leaving it at, or sending it by post to, an address that appears from such documents to be, or to have been within the last 7 days, the person's place of residence or business. Note: Sections 28A and 29 of the Acts Interpretation Act 1901 are also relevant to giving a notice under section 222AOE." 17It was submitted that when it came to sending by post, the giving of the notice occurred when it was delivered to the address in the ASIC records. Ms Soong's home address was in the ASIC records. 18It was submitted that the ordinary meaning of "give" was to deliver freely, to bestow, to hand over, and in the case of the giving of a notice under s 222AOE this ordinary meaning required postage and delivery. It was submitted there was nothing in the context of s 222AOE or s 222AOF or in the statutory scheme that required a different meaning. The object of Division 9 is stated in s 222ANA(1): "The purpose of this Division is to ensure that a company either meets its obligations under Division 8 of this Act, or under Subdivision 16-B in Schedule 1 to the Taxation Administration Act 1953 , or goes promptly into voluntary administration under Part 5.3A of the Corporations Act 2001 or into liquidation." 19The purpose of the s 222AOE notice is to give a director a final warning of the severe consequences that will follow if an appropriate step is not taken within 14 days. It was submitted that it should be presumed that the legislature intended the notice provisions to operate fairly and equally. 20If a notice was given upon posting it would necessarily follow that the recipient had less time to act than would a person at whose address the notice was left because it may be inferred that Australia Post does not make deliveries on the date of postage. 21It was submitted that a director would not know when the notice was posted and could not ascertain the date from which the 14 days ran. 22It was submitted that Ms Soong's construction of s 222AOF was supported by the requirement in s 222AOE that the notice state that the penalty would be remitted at the end of 14 days after the notice was given if one or other of the specified steps was taken. An ordinary person would not think that the notice had been given when it was posted. 23It was submitted that Ms Soong's construction of s 222AOE and s 222AOF was reinforced by consideration of the Acts Interpretation Act 1901 (Cth), s 29 which was as follows: "Meaning of service by post (1)Where an Act authorizes or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of the post. (2)This section does not affect the operation of section 160 of the Evidence Act 1995 ." 24In the present case the date of delivery was proved so that the second presumption in the section had no operation. It was submitted, however, that interaction of s 29(1) with s 222AOF had a bearing on the construction of s 222AOE and s 222AOF because of the note to the latter provision. 25It was submitted that Ms Soong's construction of s 222AOE and s 222AOF was consistent with authorities that had drawn a distinction between delivery and receipt. Reference was made to Fancourt v Mercantile Credits Ltd [1983] HCA 25; (1983) 154 CLR 87 at 96-97. The High Court said the fact of non-receipt did not displace the result that proof of delivery was deemed to have been effected at the time at which it would have taken place in the ordinary course of the post under a provision similar to s 29. The court preferred this approach to a line of English authority that suggested that proof of non-delivery was as effective as proof of non-service. The court referred to that approach as an anomaly but found it unnecessary to decide the issue. 26In Skalkos v T & S Recoveries Pty Ltd [2004] FCAFC 321; (2004) 141 FCR 107 at 116 a Full Court of the Federal Court took the same approach. It was not necessary to determine the anomaly question. 27Likewise in this case it is unnecessary to determine the issue whether proof of non-delivery defeats the presumptions in s 29. Here delivery was proved. Respondent's submissions 28The Deputy Commissioner's submissions may be succinctly put: the word "give" in s 222AOE is given full meaning in s 222AOF which constitutes a simple and certain means of serving the notice when reliance is placed upon ASIC records that are regarded as essentially reliable. The note to s 222AOF refers merely to alternative methods of service and the decision of the majority in Meredith was correct. 29Section 28A provided for service when ASIC records were not utilised. It was in the following terms: "Service of documents (1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression "serve", "give" or "send" or any other expression is used, then, unless the contrary intention appears, the document may be served: (a)on a natural person: (i)by delivering it to the person personally; or (ii)by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or (b)on a body corporate - by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate. (2) Nothing in subsection (1): (a) affects the operation of any other law of the Commonwealth, or any law of a State or Territory, that authorizes the service of a document otherwise than as provided in that subsection; or (b) affects the power of a court to authorize service of a document otherwise than as provided in that subsection." Meredith 30Meredith was also a case of failure to remit PAYG withholdings to the Commissioner. It was not disputed that a notice under s 222AOE was posted to Ms Meredith at her address shown in ASIC records. Ms Meredith's defence was that she had not received the notice. But during the course of the hearing in the District Court it was accepted that the defence could succeed, if at all, only on the basis that Ms Meredith proved non-delivery of the notice. She adduced evidence that her household's practice was to collect and deal with mail and she knew of the importance of a s 222AOE notice. She submitted that from that evidence and the evidence of non-receipt, non-delivery of the notice should be found. The trial judge accepted that submission. A majority of this court allowed the Commissioner's appeal. 31Basten JA with whom Ipp JA agreed noted that the Commissioner contended that the notice had been sent in accordance with s 222AOE by posting it to the address of Ms Meredith given in a current ASIC record and evidence of non-delivery was irrelevant. His Honour noted that Ms Meredith resisted that conclusion by reliance upon s 29. 32Having noted that a contrary intention for the purpose of s 29 may arise without direct reference to that provision his Honour noted what was said by the High Court in Deputy Commissioner of Taxation v Woodhams [2000] HCA 10; (2000) 199 CLR 370 at 384 [34] as to the guidance given by s 222ANA to the statutory purpose of a s 222AOE notice: "The primary source of guidance as to the statutory purpose of the notice before action required by s 222AOE is to be found in s 222ANA. Division 9 seeks to achieve the object that either the deducted amounts are remitted or paid to the Commissioner or the company is promptly taken out of the control of the directors and dealt with under the insolvency laws." 33His Honour concluded that service of a s 222AOE notice was complete upon it being sent by post to the director's address found in ASIC records. At 167 [75] - [76] his Honour said: "Following that line of reasoning, it may be noted that the role played by s 222AOE in the broad scheme of Pt 6, Div 9 of Assessment Act, is to allow a director an opportunity to have a penalty remitted, either by discharging the liability, entering into an agreement with the commissioner or commencing winding-up of the company. It is clear that the allowance of only 14 days notice in which to take such steps is intended to impose a tight timetable with the real possibility of inflicting hardship on a director: see Deputy Commissioner of Taxation v Saunig (2002) 55 NSWLR 722; 43 ACSR 387; [2002] NSWCA 390 at [29] (Heydon JA, Sheller JA and Gzell J agreeing). Nevertheless, s 222AOF reveals a clear intention that the commissioner will satisfy the precondition to the entitlement to recover the penalty if a notice is sent by post to the director's address as found in ASIC records. The risk of the notice going astray in the post has been treated as tolerable, in order to effect the policy underlying the scheme. The greater risk may be seen to lie in failure to ensure that ASIC records are up to date, but in that case the responsibility must be borne by the director and not by the commissioner. The fact that the precondition may be satisfied merely by posting a notice to the required address, takes service a step further away from ensuring receipt by the individual recipient, than does s 29. Nevertheless, s 29 was not concerned with receipt as such, but only delivery to the nominated address. Thus the potential hardship identified by the opponent as resulting from reliance upon s 222AOF without permitting a role for s 29 may prove too much to the extent it depended upon absence of receipt. Section 29 in effect imposes on the intended recipient responsibility for ensuring that the document does not go astray after delivery to the postal address. A provision such as s 222AOF also places the risk of loss within the postal system on the intended recipient. That risk may be extremely low, but it is not non-existent; the potential for unfairness arises because the intended recipient has no control over the postal service. Nevertheless, the intended result is clearly expressed and must be given effect." 34At 170 [86] his Honour held that it was sufficient to dispose of the appeal in Meredith to conclude that the statutory precondition to recovery under s 222AOE was satisfied by sending the notice by post to the relevant address. 35Giles JA dissented. His Honour was of the view that no contrary intention existed to exclude the operation of s 29. At 156 [23] - [25] his Honour said: "I go first to s 222AOF(1). Its terms attract s 29(1). Where it speaks of giving a penalty notice by sending by post, the sending by post being the means of giving the penalty notice, that is authorising a document to be served by post; the duality of giving by sending is within the use of "any other expression" to signify serving by post. Two consequences follow. First, unless the contrary intention appears the service is deemed to be effected by properly addressing prepaying and posting the penalty notice as a letter. Second, unless the contrary is proved service is deemed to have been effected at the time at which the letter would be delivered in the ordinary course of post. I do not think a contrary intention appears whereby the first consequence is excluded. Section 222AOF(1) refers to sending by post, but does not state what amounts to sending other than that the address to which the penalty notice is sent is an address appearing from ASIC documents. The reference in s 29(1) to "properly addressing" remains apt - if the letter bears that address, it is properly addressed. Prepaying and posting as a letter are consistent with sending by post, indeed probably are no more than would otherwise have been understood. The second consequence is not to be excluded by a contrary intention, but by contrary proof; s 222AOF(1) does not state when the giving by sending by post is effective, and consistently with it s 29(1) can state that the service is deemed to have been effected at the time at which the letter would be delivered in the ordinary of course of post unless the contrary is proved." Is Meredith distinguishable? 36True it is that Meredith was not concerned with the date of expiration of the 14 days in s 222AOE. 37An emphasis was placed upon what was said by Basten JA at 170 [86]: "In the present case, no issue arises in relation to the date on which notice was given. Section 163 of the Evidence Act clearly envisages that the date on which a letter is "sent", as opposed to the date on which it was "received" - see s 160 - may be critical. In this case s 163 would have had no application because there was clear evidence as to the date on which it was sent. It is not necessary to consider how the Evidence Act may assist a person who is required to do things within a particular time based on a contemporaneous assessment of the period available. It is sufficient to dispose of the present appeal to conclude that the statutory precondition to recovery under s 222AOE was satisfied by sending the notice by post to the relevant address. There was no challenge to the evidence adduced by the commissioner that it was so sent." 38That passage must be read in context. His Honour had earlier concluded, as indicated above, that a notice is given for the purpose of s 222AOE, if recourse is had to ASIC records, merely by posting the notice to the address. The giving of notice being complete on posting and there being clear evidence of the date of posting, 170 [86] is to be understood in terms of his Honour saying that no issue arose in relation to the date of postage. 39This reading of his Honour's judgment is enforced by his reference to the Evidence Act 1995 (Cth), s 163(1) which, in the absence of evidence of the date of postage, raises a presumption as to when that occurred. S 163(1) was in the following terms: "A letter from a Commonwealth agency addressed to a person at a specified address is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) to have been sent by prepaid post to that address on the fifth business day after the date (if any) that, because of its placement on the letter or otherwise, purports to be the date on which the letter was prepared. 40It is not the case that Meredith did not intend to deal with the situation of proved delivery of a s 222AOE notice nor is the reasoning in Meredith limited to non-delivery with the majority evincing an intention not to deal with a situation of proved delivery of a notice. In particular, the reasoning in Meredith applies even where delivery is proved. It is authority for the proposition that a notice is given for the purposes of s 222AOE, if the address of the director is obtained from ASIC records, when the notice is sent by post to that address. 41His Honour's reasoning that the sending by post of a s 222AOE notice to an address in ASIC records was necessary and sufficient to constitute the giving of the notice constituted the ratio of his decision as a rule of law expressly or impliedly treated by him as a necessary step in reaching his conclusion. 42It follows that in his Honour's judgment, proof of delivery of a s 222AOE notice to the address in the ASIC records is irrelevant and his Honour's conclusion would dictate that in this appeal proof of the delivery of the notices to Ms Soong's address on 30 November 2007 was irrelevant. 43In my view Ms Soong has failed to establish that Meredith is distinguishable from the instant circumstances. Should Meredith be followed? 44The circumstances in which an intermediate appellate court will depart from an earlier decision were comprehensively analyzed by this court in Gett v Tabet [2009] NSWCA 76; (2009) 254 ALR 504. At 563 [283] the court pointed to the use of the expressions "plainly" or "clearly" wrong in decisions of the Federal Court. At 565 - 566 [294] - [295] this court identified attributes of a ruling that answered these descriptions: " The phrases "plainly wrong" or "clearly wrong" can be understood to focus on at least one or more of the following attributes of a ruling: (a) the fact of error is immediately (in the sense mentioned in [283] above) apparent from reading the relevant judgment; (b) the strong conviction of the later court that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred (compare Chamberlain and Clutha ), and (c) the nature of the error that can be demonstrated with a degree of clarity by the application of correct legal analysis. In our view, the first possibility is liable to be highly subjective and should not be required, where the other two possibilities are satisfied. The existence of (b) and (c) is a precondition to the exercise of the power to depart from earlier authority." 45The reference to Chamberlain v R [1983] FCA 78; (1983) 72 FLR 1 at 8 - 9 [5] was to the statement of Bowen CJ and Forster J that the court, while not bound by previous decisions, would normally follow an earlier decision unless convinced that it was wrong. Reference to Clutha Developments Pty Ltd v Barry (1989) 18 NSWLR 86 at 99 - 100 was to the view expressed by Gleeson CJ that it was generally accepted that before it was appropriate for an appellate court to overrule one of its own earlier decisions, it must entertain a strong conviction as to the incorrectness of the earlier decision. 46In Gett at 564 [286] the court referred to the need for restraint in departing from previous decisions (see also SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2; (2006) 150 FCR 214). 47While Basten JA in Meredith determined that the note to s 222AOF formed part of the 1936 Assessment Act , he did not consider whether and to what effect it applied to that section. 48At 168 [79] his Honour pointed out that while notes do not form part of an Act as a general rule (s 13(3) of the Acts Interpretation Act ) the Income Tax Assessment Act 1997 (Cth), s 950-100 provides that notes and examples that follow provisions of that Act form part of "this Act" and the Dictionary to the 1997 Assessment Act includes the 1936 Assessment Act in the definition of "this Act". His Honour said, however, that the note did not purport to qualify or affect the operation of s 222AOF: it referred to a further means of giving notice under s 222AOE. 49But as Giles JA pointed out in his dissenting judgment in Meredith at 157 [30], s 29 is a general provision that fleshes out an entitlement to serve by post in any Act, however described. The provision contains two conditions described by Lindgren J in Deputy Commissioner of Taxation v Trio Site Services Pty Ltd [2007] FCA 776 as two limbs. The first limb specifies the conduct that will constitute postal service in the absence of a contrary intention. The second limb will determine the date of that service unless the contrary is proved. The provision applies whenever there is an Act that authorizes or requires a document to be served by post. Section 222AOF is such a provision. It provides that one way in which the Commissioner may "give" a s 222AOE notice is by "sending it by post". Those words invoke s 29 because they fall within the descriptions of authorization to which the section applies. It refers to "serve", "give", "send" or "any other expression." As Giles JA pointed out at 156 [23] the duality of giving by sending is within the ambit of "any other expression." 50I respectfully adopt the reasoning of Giles JA in Meredith on this issue. In my view it was necessary for Basten JA to analyze the application of s 29 on the entitlement to serve by post in s 222AOF and his Honour failed to do so. 51In fleshing out what constitutes service by post, s 29 requires proper addressing, prepaying and posting of the document as a letter. This is conduct not spelt out in s 222AOF. It is not to the point that the bald reference to sending by post in s 222AOF might be construed as an effective sending by post which would require addressing, prepaying and posting the document as a letter. The absence of these specifications from s 222AOF highlights the work to be done by s 29. 52Not only is service deemed to be effected by the conduct specified in the first limb of s 29 in the absence of a contrary intention, but also the second limb is enlivened in the absence of a contrary intention and, unless the contrary is proved, service is deemed to have been effected at the time at which the document would be delivered in the ordinary course of post. That is to say, in the absence of a contrary intention, service by post is effected upon delivery and not upon posting. 53In my view, s 29 was engaged and his Honour's finding that the note to s 222AOF merely referred to a further means of giving notice under s 222AOE can only stand, with respect, if a contrary intention is established against the application of the first limb of s 29 to s 222AOF. 54The submission that s 222AOF picked up the word "given" in s 222AOE and was thereby established as a self-contained means by which a s 222AOE notice may be given, exclusive of the operation of s 29, cannot stand. Section 29 also picks up the word "give." 55Nor, in my view, does the entitlement to use ASIC documents in s 222AOF give rise to a contrary intention for the purpose of s 29. If s 222AOF was to be exclusive of s 29 one would not expect a note stating that s 29 was also relevant to the giving of a s 222AOE notice. 56In my view, Basten JA should have found that s 222AOF, like any provision of an Act authorizing service by post, was subject to the first limb of s 29 unless a contrary intention was established. His Honour should have found that no contrary intention was established and service was deemed to be effected on Ms Meredith, in terms of s 29, on the unchallenged evidence of posting in accordance with the first limb. His Honour should have found that, in the absence of such contrary intention, the second limb was also invoked and service of the s 222AOE notices was deemed to have been effected at the time of delivery in the ordinary course of the post unless the contrary was proved. 57This analysis is in stark contrast to the ratio of the majority judgment in Meredith . It leads me to the strong conviction that Meredith was erroneous and does not merely involve a choice of an approach that was open but is no longer preferred. On the application of what I regard as the correct legal analysis of the relevant statutory provisions, the nature of the error in the majority judgment in Meredith is demonstrated with the necessary degree of clarity to mandate that it not be followed. 58Discussion took place as to whether Meredith was per incuriam because two earlier decisions were apparently not referred to the court. 59Miller v Deputy Commissioner of Taxation (1997) 26 ACSR 533 was concerned with the penalty imposed upon a director of a company for failing to pay an estimate of the company's liability to pay amounts equal to deductions made by the company from payments made to its employees. Section 222APE required a notice to be given to the director before recovery proceedings were instituted. The provision was similar to s 222AOE. Mason P with whom Beazley JA agreed said at 541 that the appellant submitted that the penalty notice was not "given" when posted, but only when it was received. His Honour agreed, computed the earliest date of delivery and the appeal was allowed because recovery proceedings were commenced less than 14 days later. Priestley JA also agreed but added a short opinion of his own on a different aspect. 60The Deputy Commissioner would argue that this decision was wrong if service was effected in terms of s 222AOF. Section 222APE(2) provided that s 222AOF applies to a notice under s 222APE in the same way as to a notice under s 222AOE. But there was nothing in Miller that indicated that s 222AOF was the basis of the service and it was submitted that service might have been effected under s 28A. However, the Deputy Commissioner's submission that s 29 applied to s 28A but did not apply to s 222AOF leads to a rather odd result. 61The other decision was Deputy Commissioner of Taxation v Ikin & Anor [2006] NSWSC 86; (2006) 61 ATR 706 a decision of McClellan CJ at CL. His Honour had to determine whether a s 222AOE notice was delivered on the day it would have been received in the ordinary course of the post or on the next day on which the evidence was that it was delivered. His Honour accepted the evidence with the consequence that the respondents had put the company into administration within the 14 days specified in s 222AOE. 62But the decision is not directly contrary to that in Meredith because the parties accepted that the date of service of the notices would be that determined by the application of s 29. 63For these reasons I prefer to base my judgment on not following Meredith rather than a choice between it and Miller or Ikin or both. 64It was submitted that Meredith had been followed in Banovec v Deputy Commissioner Taxation [2009] NSWCA 146 and in Robertson v Deputy Commissioner of Taxation [2010] NSWCA 58; (2010) 239 FLR 29. 65In Banovec an officer of the Commissioner gave affidavit evidence that a s 222AOE notice was posted by prepaid post, addressed to the appellant at the address shown in ASIC records. The appellant gave evidence that he did not receive the notice. He had moved to a new address and ASIC was not advised until after the notice was posted. The only question was whether the trial judge was entitled to find that the officer had posted the notice as she suffered a nervous breakdown after lengthy cross-examination and refused to return for further cross-examination. Handley AJA, with whom Tobias and Macfarlan JJA agreed, did say that this court held in Meredith that a notice under s 222AOE posted to a person in accordance with s 222AOF was given to that person on the day it was posted. 66But the result would have been the same had s 29 been considered because the second limb was not material. There was no evidence that the appellant had taken any of the steps in s 222AOE. The only question was whether the evidence of posting could be relied upon. 67In Robertson at 31 - 32 [10] Gzell J, with whom Allsop P and Handley AJA agreed, said that this court had decided that the Commissioner will satisfy the precondition to entitlement to recover a penalty by the act of posting a notice to such address of a director as is found in ASIC records citing Meredith . 68But in that case postal service was not effected in terms of s 222AOF. The sole question for determination was whether the notice that was sent by prepaid post by an officer of the Commissioner was sent to the address of the place of residence of Ms Robertson last known to the Commissioner for the purpose of s 28A. The court held that the source of information upon which the address of the place of residence of the person to be served last known to the person serving the document in s 28A was not restricted to information in the records of the person serving the document or to information provided to that person by the person to be served. A refusal to follow the majority judgment in Meredith would make no difference to the decision in Robertson . 69In any event Banovec and Robertson cannot give greater weight to Meredith than it possesses. 70The result in the present case is that since delivery on 30 November 2007 was proved that was the date upon which the s 222AOE notices were given and Ms Soong placed the companies under administration within the 14 days required by s 222AOE. 71In my view the appeal should be allowed with costs and Meredith should not be followed. 72The orders I propose are as follows: * Appeal allowed * Set aside the judgment and orders of Schmidt AJ made on 5 August 2009 and in lieu thereof enter judgment for the Appellant on the Respondent's statement of claim filed on 28 July 2008 * Order the Respondent to pay the Appellant's costs of the hearing before Schmidt AJ * Order the Respondent to pay the Appellant's costs of the appeal Postscript 73By way of postscript, Division 9 has now become Division 269 in Schedule 1 to the Taxation Administration Act 1953. Section 222AOE has now become s 269 -25. Under a heading " When notice is given " s 269-25(4) states: "Despite section 29 of the Acts Interpretation Act 1901, a notice under subsection (1) is taken to be given at the time the Commissioner leaves or posts it. Note 1: Section 28A of the Acts Interpretation Act 1901 may be relevant to giving a notice under subsection (1). Note 2: Section 269-50 of this Act is also relevant to giving a notice under subsection (1)." 74Section 269-50 is the replacement for s 222AOF. It provides: "The Commissioner may give you a notice under section 269-25 by leaving it at, or posting it to, an address that appears, from information held by the Australian Securities and Investments Commission, to be, or to have been within the last 7 days, your place of residence or business." 75The Explanatory Memorandum which accompanied the Bill effecting these changes contains the following paragraphs 2.78 - 2.80: "The rewrite has been drafted taking account of a number of court decisions on the application of Division 9. Where appropriate, the outcome of those decisions has been reflected in the rewrite. For example, the Meredith case concerned when the Commissioner has given a director penalty notice. The court decided that section 29 of the Acts Interpretation Act 1901 did not apply, so that a notice was given when it is posted (rather than when it is received ). That result was the intended result under the current law but, to remove any possibility of a future misunderstanding, the rewrite clearly excludes the operation of section 29 of the Acts Interpretation Act 1901. This has not resulted in a policy change as it simply reflected the current state of the law as set out in the Meredith decision." 76It is, of course, a matter for the Legislature as to whether, as a consequence of a decision of this court not to follow the majority judgment in Meredith, that decision should be reflected in any amendments to the statutory provisions referred to in the preceding paragraphs of this postscript. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 March 2011