I will agree to disagree on the interpretation of paypals policy, as they also set out under eligibility that there is also a requirement to prove that item was sent to address elected by buyer on checkout in addition to proof of post. Postcode receipt can not demonstrate it was sent to a particular address in a suburb.  The balance of probability can be easily disproved.

In any case, Paypal has to abide by the law - the SoG Act is one of the many pieces of legislation that governs trading in our states, and that indicates that:  

(2) Unless otherwise authorised by the buyer, the seller must make such contract with the carrier on behalf of the buyer as may be reasonable, having regard to the nature of the goods and the other circumstances of the case. If the seller omit so to do, and the goods are lost or damaged in course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to the buyer, or may hold the seller responsible in damages.