Federal Court of Australia

Dixon (Administrator), in the matter of Demolition Co Pty Ltd (Administrator Appointed) [2026] FCA 222

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 439A(6) of the Corporations Act 2001 (Cth), the period within which the first plaintiff must convene the second meeting of creditors of the second plaintiff under s 439A is extended to midnight on 23 March 2026.

2.    Pursuant to s 447A(1) of the Act, Part 5.3A is to operate in relation to the second plaintiff such that, notwithstanding s 439A(2), the second meeting required under s 439A may be convened at any time before, or within, five business days after the end of the convening period as extended by order 1 above, provided that the first plaintiff gives notice of the meeting in accordance with rule 75-225(1) and rule 75-15 of the Insolvency Practice Rules (Corporations) 2016 (Cth).

3.    By 5.00pm on 10 March 2026, the plaintiffs provide a sealed copy of this order to:

(a)    the Australian Securities and Investments Commission;

(b)    all creditors of the second plaintiff.

4.    Liberty be granted to any person who can demonstrate sufficient interest to discharge or modify these orders on the giving of three business days’ written notice to the plaintiffs and the Court.

5.    The first plaintiff’s costs of the application be costs in the administration of the second plaintiff.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

NESKOVCIN J:

1    The first plaintiff was appointed voluntary administrator of the second plaintiff, Demolition Co Pty Ltd (Administrator Appointed), on 6 February 2026.

2    By originating process dated on 4 March 2026, the administrator applied to extend the convening period for the second meeting of creditors of Demolition Co by 10 business days, until midnight on 23 March 2026, pursuant to ss 439A(6) and 447A of the Corporations Act 2001 (Cth). The administrator also sought an order under s 447A(1) that Part 5.3A operate in relation to Demolition Co such that the second meeting of creditors of Demolition Co required under s 439A may be convened at any time before, or within, five business days after the end of the convening period as extended by the Court. This type of order is known as a “Daisytek order” named after the decision in In the matter of Daisytek Australia Pty Ltd (administrators appointed) (2003) 45 ACSR 446; [2003] FCA 575. The convening period for the second meeting of creditors of Demolition Co will, unless extended, end on 6 March 2026.

3    In support of the application, the administrator relied on his affidavit sworn on 4 March 2026, an affidavit of Naim Bittar, solicitor, sworn on 5 March 2026 and a written outline of submissions.

4    The application was listed before me as the Commercial and Corporations Duty Judge at 2.15pm on 5 March 2026 and was heard ex parte. Notice of the application was given to the Australian Taxation Office and other creditors, albeit late on 4 March 2026, and no creditor appeared to oppose the application.

5    For the reasons that follow, I was satisfied that the convening period should be extended until midnight on 23 March 2026 and I made orders substantially in the terms sought by the administrator.

background

Demolition Co

6    Demolition Co provides demolition services to residential and commercial clients. It has a workforce of two staff members plus the director and shareholder, Mr Scott Beasley. In addition to his knowledge of the business operations, Mr Beasley holds key operational licences including a Class B Asbestos Removal Licence.

Financial position of Demolition Co

7    In the course of his investigations to date, the administrator has ascertained that Demolition Co experienced significant growth in recent years with turnover increasing from $762,457 in the financial year ending 30 June 2021 to $2,275,286 in the financial year ending 30 June 2024. The company underwent a period of expansion between 30 June 2022 to 30 June 2024, which resulted in its overhead expenses increasing proportionally to the increase in turnover. Turnover contracted in the financial year ending 30 June 2025, however, which resulted in the business generating insufficient income to meet all of its costs.

8    Based on the investigations and proofs of debt, the administrator has ascertained the following in relation to Demolition Co’s financial position:

(a)    in the financial year ended 30 June 2025, the business turnover was approximately $2,116,000 and the company incurred a trading loss of $240,218;

(b)    Demolition Co has creditors with a total projected amount owing of approximately $1,582,652, including seven secured creditors owed $467,421.03, employee liabilities of $71,851 and 23 unsecured creditors owed approximately $943,152;

(c)    a potential liability of $369,580.65 is owing to the Australian Taxation Office, which has not yet submitted a proof of debt;

(d)    Demolition Co has various assets including excavation equipment and motor vehicles which are subject to security arrangements or finance and the administrator has not ascertained the value of the assets; and

(e)    Demolition Co does not have any ongoing lease obligations.

Administrator’s investigations

9    Since his appointment, the administrator has undertaken a high-level review of Demolition Co’s financial affairs, as well as conducting investigations into the circumstances leading to the company entering into voluntary administration. In addition, the administrator has been operating the business and Demolition Co has been trading on a limited basis during the voluntary administration period in order to maintain the value and goodwill of the business.

10    In mid-February 2026, a secured creditor with a claim of $303,042.98 was in communications with the administrator regarding the appointment of a receiver and manager over assets of Demolition Co.

11    In late February 2026, the administrator was told that Mr Beasley may propose a deed of company arrangement (DOCA) to creditors. The administrator has been advised that the secured creditor is willing to withhold taking any action against the company to allow a DOCA proposal to be submitted.

12    Based on his investigations to date, the administrator expects the business to be able to continue in operation as a going concern. However, the administrator has not yet received a proposal for the purchase of the business or had sufficient time to explore the possibility of a DOCA.

13    The administrator states that the extension of the convening period would allow him to explore the possibility of a DOCA and make a comprehensive and complete recommendation to creditors, which he is presently unable to do. Furthermore, it is proposed that the company will continue to trade during the extended convening period, with the administrator stating that there are sufficient funds available to cover operating expenses.

relevant principles

14    The principles relevant to an application to extend the convening period for the second meeting of creditors are well established and were set out by me in Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) (2025) 174 ACSR 61; [2025] FCA 219. Without repeating all of the relevant principles, the following are worth setting out in the context of this application:

(a)    the Court must balance the expectation that an administration will be undertaken in a relatively speedy and summary manner with the need to ensure that the administration is not concluded without consideration of sensible and constructive options that may provide better returns for creditors and any return to shareholders, or to enable the company to return to trading in the interests of creditors and shareholders: Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] (Barrett J); Farnsworth v About Life Pty Ltd (Administrator Appointed), in the matter of About Life Pty Limited [2019] FCA 11 at [4] (Thawley J).

(b)    the categories of cases in which an extension has been granted were summarised by Thawley J in About Life at [6], and relevantly include cases where additional time will enable a proposal for a DOCA, a sale of the business as a going concern or enhance the return for unsecured creditors; and

(c)    the opinion of the administrator as to the need for an extension will be given weight in an application of this kind: Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) (2020) 144 ACSR 347; [2020] FCA 717 at [68] (Middleton J).

consideration

15    The purpose of the power to grant an extension of the convening period is to enable the Court to allow further time to advance the purposes of the administration where it is appropriate to do so. This includes maximising the chances of the company or as much as possible of its business continuing in existence: s 435A of the Corporations Act.

16    For the reasons that follow, I was satisfied that granting the extension sought by the administrator is an appropriate exercise of the power afforded under s 439A(6) and that it is consistent with the object of Part 5.3A, as expressed in s 435A of the Act.

17    First, in the administrator’s opinion, the business should be able to continue in operation as a going concern which will maximise the prospects of the sale of the business, however, the administrator is yet to receive a proposition for the purchase of the business and has not had sufficient time to explore the possibility of a DOCA. The extension will allow the Administrator to explore the possibility of a DOCA, which will likely produce a better return for creditors than a liquidation scenario.

18    Conversely, if the application were not granted, the administrator would likely be required to recommend that Demolition Co be placed into liquidation.

19    Finally, the period of the extension is relatively modest and, in the administrator’s opinion, will not unduly prejudice creditors as there are sufficient funds available for the administrator to cover operating expenses during the extended convening period when it is proposed that Demolition Co will continue to trade, with the benefit of Mr Beasley’s expertise and assistance, in order to maintain the value and goodwill of the business.

20    No creditor appeared to oppose the application. The period of notice of the application was admittedly short. There will be liberty to apply to any person who can demonstrate sufficient interest to discharge or modify the orders on the giving of three business days’ written notice to the administrator and the Court.

21    For those reasons, I made orders substantially in the form of the orders sought by the administrator.

Associate:

Dated: 6 March 2026