In December 1889 the Torquay Improvement Association requested an extension of postal services from Mt. Duneed to Spring Creek and in 1891 a petition was put in for a local post office. James Follett was given the responsibility of the loose bag postal delivery. The bag was left at the Palace Hotel where residents would deposit and collect their mail.

On 20 August 1894, Torquay’s loose mail bag service was abolished and a non-official post office established resulting in mail service six days a week. The Post Office remained at the hotel until 1897 when Alfred Payne was appointed postmaster and mail service was transferred to his General Store in Gilbert Street. This store also served as the local booking office for Cobb and Co., the company who officially carried the mail across the nation since 1863.