I'm sorry, but I just can't take that sentence as unequivocal proof - it is still open to interpretation, as evidenced by your response...I don't think we can take supplied to be interchangeable with received at all...

I think the pertinent question is why, if a buyer is entitled to a refund simply because they don't receive an item purchased online, they don't actually have a way to guarantee they get one if the seller can prove postage?

Would that not make PayPal's buyer protection clauses illegal, both by not taking the funds back from the seller or providing a discretionary payment? 

In other countries, the law is quite clear - the seller is responsible until the buyer receives it, and PayPal's policies in those countries fully reflect that. If that's the case in Austalia, why don't the Australian policies reflect that?

I know you have said that PayPal made a concession for Australia due to the high cost of postage here, but I personally don't see how or why PayPal would care in the slightest what the cost of registered post was or is. You also said, when C&S was first introduced, that you wouldn't be surprised now that there is a cost-effective alternative to registered, if PayPal made it so that proof of delivery was required.... The only change PayPal made to their policies after C&S was introduced was to add the clause that buyers may not receive a refund if the seller can prove postage (whereas before, they would effectively provide a discretionary payment).