As the social distancing laws remain in effect, it is no surprise that Australians are online shopping like it’s Christmas or Black Friday. But with this increase in online purchases, comes an increase in pressure for Australia Post to maintain its delivery times.

Australia Post has announced they are grappling with the logistics of delivering 2 million parcels each day and delays for deliveries are a reality due to significant disruption caused by COVID-19.

Due to the uncertainty as to the timeframes for these delays there are a few legal implications that you need to be aware of if you have a business, are part of an owners corporation or have any agreements with time sensitive obligations.

Notice to creditors for the first and second Voluntary Administration Meeting

Insolvency practitioners will need to be acutely aware of the notice compliance requirements. For a voluntary administration meeting a notice must be issued no more than 5 business days prior. In ordinary circumstances, it normally takes 3-4 business days for Australia Post to process and deliver your letters locally. Currently we could be looking at a scenario such as the below which would significantly affect the timeliness of delivery:

  • On day 1, you put your letters in the post-box
  • However, on day 4-5 the letters may have been processed and ready to send but not able to be delivered due to delays.
  • Remember, weekends or public holidays cause further delays. It is also important to note that the Express Post guarantee has been suspended further limiting the available options for quick delivery of mail.

It is important to start issuing notices as soon as possible (maybe a few days earlier than usual). These time frames may also relate to a Liquidator calling meetings of creditors.

Notice for all other meetings

Directors meetings, owner’s corporation meetings and other regulator meetings such as Annual General Meetings may also be affected by the postman’s delay. Ensure you provide ample notice time to avoid complaints from members that they did not receive notice of such meetings within a reasonable timeframe.

Notices of default under agreements

The same rules will apply when issuing a notice of default under a commercial agreement. The agreement may specify a specific timeline in which a default is required to be remedied (i.e. failing to make a payment on time must be remedied within 30 days) you will need to allocate extra days for the notice of default to be received by the recipient.

We note that if you were considering issuing a letter of demand or statutory demand for a breaching party failing to make payment under an agreement, there are revised timeframes for when a person can be bankrupted, or a company wound up. See our previous article that outlines these legislative changes.

New amendments to the Corporations Act for company meetings

This week the Federal Government provided certainty to companies and boards about how they can meet their obligations over the next six months.

Under the changes, company boards will be able to:

  • provide notice of annual general meetings to shareholders using email;
  • achieve a quorum with shareholders attending online; and
  • hold annual general meetings online.

Meetings must continue to provide shareholders with a reasonable opportunity to participate. As a result, shareholders will be able to put questions to board members online and vote online.

Based on the new legislation, notices may now be sent via email as well as by post. We note that any notices sent by email should be accompanied by a read receipt so that the recipient can confirm safe delivery. Remember that when any notice is sent specifying a timeframe for attendance or compliance, you must allow additional days for the person on the other end to receive the notice to avoid shareholder disputes or complaints from creditors for missing their opportunity to attend a meeting.

Changes to the legislation will be in effect for 6 months from 6 May 2020. Be mindful that after these times, the usual delivery methods will apply.

 

For more infromation, please contact:

Chloe Taylor | Lawyer

E: Chloe.Taylor@madgwicks.com.au

T: +61 3 9242 4765

About the Author

Chloe Taylor

Lawyer
Possessing corporate advisory and commercial disputes experience, Chloe is a pragmatic and concise communicator who obtains successful legal outcomes with a commercial approach. Chloe has experience in commercial litigation, commercial debt recovery, insolvency and commercial advice and business solutions. Working regularly with small and medium-sized enterprises, family businesses and liquidators, Chloe is goal oriented and […]

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