One of the ongoing developments to our in-house software is a better way to send reports and notices (particularly involving notices of meetings) to creditors. Where we have email addresses nominated by creditors for that purpose, we will be able to press a button and send a report in PDF format immediately to all these creditors, getting the report into their hands a day before the physical postal service could do so, and at less cost to the file.
One of the important factors to consider when issuing reports with notices of meetings and dividends is the notice period and the ‘giving’ of notice – the period between giving or ‘sending’ the notice and the event under the notice. The Corporations Act is pretty strict with notice periods.
So one may think that emailing a notice would affect service quicker, but it turns out one would be wrong!
The Corporations Act (at section 600G) allows for the electronic service of notices. This provision is mirrored in the Regulations:
5.6.11A (2) If the recipient nominates an electronic address by which the recipient may be notified of the notice or document, the notifier may give or send the notice or document to the recipient by sending it to that electronic address.
This allows us to send notices by email when creditors have nominated an email address – so far so good.
It is when you start calculating notice periods and when the notice is deemed ‘sent’ that the legislation becomes interesting.
By sending a notice by pre-paid post, it is deemed ‘sent’ and notice period starts the day it is posted. This is set out in regulation 5.6.12(2) as “The notice must be given to a person: .. (b) by sending it to the person by prepaid post”. It is ‘sent’ or ‘given’ when posted and, thanks to section 105 of the Corporations Act, the day of sending or posting is the first day of the notice period. Posting a notice on a particular business day means that day is the first day of the notice period.
105 “Without limiting subsection 36(1) of the Acts Interpretation Act 1901, in calculating how many days a particular day, act or event is before or after another day, act or event, the first-mentioned day, or the day of the first-mentioned act or event, is to be counted …”
However, if you issue the notice by email, section 600G and Regulation 5.6.11A deemed that the day of sending (emailing) is not the day you sent it, it is the next business day. Emailing a notice on a particular day means that the next business day is the first day of the notice period.
5.6.11A (5) A notice or document sent to an electronic address, or by other electronic means, is taken to be given or sent on the business day after it is sent.
So if I want to send you notice today, I can send it by pre-paid post and you should receive it tomorrow (if you are lucky), but it has been ‘sent’ to you today and the notice period has started.
But if I want to send notice to you tomorrow, I email it to you today so you receive it today into your electronic mail box 24 hours before it is officially “sent” and the notice period will not start until tomorrow.
One method has the notice period starting 24 hours before you receive notice and one has it starting 24 hours after you receive notice – neither when you actually receive it.
But the receiving of the notice is not the important factor under the Act, it is just a convenience factor – and makes a good story. It is the giving or sending of the notice that is important.
What difference between these methods would cause a need for the different ‘sending’ dates? In the postal system you have to go to your physical mail box (at your front fence or at your local post office) to get your mail. In the electronic system you have to go to your electronic Inbox (which is on most phones and tablets these days) to get you emails. I would have thought that accessing your electronic mailbox would be quicker than accessing your physical one.
I believe that the service of notices should be affected when the notice is given or sent regardless of the method of delivery. Emailing a notice just happens to get the notice to the recipient quicker – and that is our aim.