Federal Court of Australia

Olsen, in the matter of Babyskin Laser & Cosmetic Clinic Pty Ltd (Administrators Appointed) [2026] FCA 622

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to s 439A(6) of the Corporations Act 2001 (Cth) (Act), the period within which the plaintiffs must convene the second meeting of creditors of the Company under s 439A is extended to 12 August 2026.

2.    Pursuant to s 447A of the Act, Pt 5.3A of the Act is to operate in relation to the Company such that, notwithstanding s 439A(2) of the Act, 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 of these orders.

3.    The plaintiffs take steps to cause notice of these orders to be given, within one business day of making these orders to:

(a)    the creditors of the Company as identified by the plaintiffs in the following manner:

(i)    where the plaintiffs have an email address for a creditor, by notifying each such creditor, via email of the making of these orders;

(ii)    where the plaintiffs do not have an email address, sending a short message service text message containing a link to the portal accessible via the plaintiffs' website on which a copy of the orders can be accessed;

(iii)    where the plaintiffs do not have an email address or a mobile telephone number, by sending a copy of the orders to the postal address as recorded in the books and records of the Company;

(iv)    publishing the orders on the website portal maintained by the plaintiffs; and

(b)    the Australian Securities and Investments Commission, by its email address.

4.    The plaintiffs' costs of and incidental to this application are to be costs and expenses in the administration of the Company and be paid out of the assets of the Companies.

5.    Any person who can demonstrate a sufficient interest has liberty to apply to vary or discharge any orders made on three business days' notice being given to the plaintiffs and the Court.

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

REASONS FOR JUDGMENT

VANDONGEN J:

1    From about 12 December 2020 until about 2 April 2026, the first plaintiff, Babyskin Laser & Cosmetic Clinic Pty Ltd (Babyskin), operated a business from a premises in Adelaide that provided cosmetic and aesthetic services, including facial treatments, non-surgical skin treatments, laser and energy-based treatments, doctor-led medical aesthetic treatments and semi-permanent cosmetic treatments. However, on 14 April 2026, the second plaintiffs, Travis Graham William Olsen and Matthew Ormsby were appointed as administrators of Babyskin, pursuant to s 436A of the Corporations Act 2001 (Cth).

2    The first meeting of Babyskin's creditors, as required by s 436E of the Corporations Act, was held on 24 April 2026. Pursuant to ss 439A(1) and 439A(5)(b), the administrators were required to convene a second meeting of creditors (second meeting) by no later than 12 May 2026.

3    On 8 May 2026, the administrators urgently applied to extend the convening period for the second meeting to 12 August 2026 relying on an affidavit sworn by Mr Olsen on 7 May 2026. That application came on for hearing before me as duty judge at which time I made several orders, including an order that the period within which the administrators must convene the second meeting under s 439A be extended to 12 August 2026. These are my reasons for making those orders.

Relevant statutory provisions and applicable principles

4    Section 439A(1) of the Corporations Act provides that the administrator of a company under administration must convene a meeting of the company's creditors within the convening period as fixed by s 439A(5) or extended under s 439A(6). That meeting must be held within five business days before, or within five business days after, the end of the convening period: s 439A(2). For the purpose of this matter, the convening period is the period of 20 business days beginning on the day after the administration of Babyskin began: s 439A(5)(b). Accordingly, the convening period in this case ended on 12 May 2026.

5    The Court has the power to extend the convening period: s 439A(6). In Freeman, in the matter of Regional Express Holdings Limited (administrators appointed) (No 2) [2024] FCA 968 at [33] to [40] Cheeseman J made several observations about the Court's exercise of that power, which I have set out below and which I gratefully adopt:

The principles applicable in relation to when the Court will extend the convening period for the second meeting of creditors pursuant to s 439A(6) of the [Corporations Act] are well established. In making such an order, the Court must reach an appropriate balance between an expectation that the administration will be relatively speedy and summary and the countervailing factor that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising a return for creditors: Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611; Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10]. See also Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717; 144 ACSR 347 at [64]-[68], Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [18]-[20] and Walker, in the matter of Plumbfirst Pty Ltd (Administrators Appointed) [2023] FCA 441 at [16].

It is clear that the Court should not allow longer than is required for the diligent exercise of the powers of the administrator. It may be appropriate to grant an extension in circumstances where:

(a)    there is a proper evidentiary case for the extension;

(b)    there is no evidence of material prejudice to those affected by the moratorium during the continued period of administration; and

(c)    the length of the extension sought by the administrator is exposed as having a reasonable basis.

In exercising the discretion to extend the convening period the Court will generally afford significant weight to the view of the administrator as to the needs and circumstances of the particular company in considering whether it is appropriate to grant an extension having regard to the objects of Pt 5.3A: Wight, in the matter of Responsible Entity Services Ltd (Administrators Appointed) [2024] FCA 458 at [36], [38] (and the authorities cited therein).

The particular circumstances in which an extension may be granted include, where the size and scope of the business is substantial, where the extension will allow a sale of the business as a going concern, and more generally, where additional time is likely to enhance the return for unsecured creditors: Farnsworth v About Life Pty Limited (Administrator Appointed), in the matter of About Life Pty Ltd (Administrator Appointed) [2019] FCA 11 at [3]-[8]; In the matter of Kavia Holdings Pty Limited (administrators appointed) (receivers and managers appointed) [2013] NSWSC 737 at [15]; Silvia, in the matter of Austcorp Group Limited (Administrators Appointed) [2009] FCA 636 at [18]; Metha, in the matter of Hans Continental Smallgoods Pty Ltd (Administrators Appointed) [2008] FCA 1933 at [20].

An extension of the administration period to facilitate either (or both) of: (a) the sale of the business of the company as a going concern, so as to maximise the value of the company's assets; or (b) the progression and assessment of a deed of company arrangement (DOCA) proposal that may provide a better return to creditors than a winding up, are well-recognised examples where the court has extended the convening period: Virgin (No 2) at [66]; Bonza Aviation Pty Ltd (Administrators Appointed) [2024] FCA 575 at [12].

An additional factor in favour of extending the convening period is the need for creditors to have sufficient information at the second meeting to allow them to exercise their decision as to the future of the company in as informed a manner as possible: Re Foodora Australia Pty Ltd (Administrators Appointed) [2018] NSWSC 1426 at [11]; Hill, in the matter of Autocare Services Pty Ltd (administrators appointed) [2021] FCA 167 at [28].

The interests of creditors who are affected by the statutory moratorium are relevant, but are not decisive: Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 at [9]; ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No. 8) (2009) 73 ACSR 478 at [52]-[53]; Re South Burnett Wines (2004) 52 ACSR 298 at [14] (Campbell J, as his Honour then was)) [sic].

Ultimately, it is necessary to consider the best interests of the creditors as a whole, having regard to the purpose of Part 5.3A of the [Corporations Act].

6    In relation to the last paragraph of the passage quoted from Cheeseman J's reasons in Freeman, the objects of Pt 5.3A of the Corporations Act, as set out in s 435A, are to:

provide for the business, property and affairs of an insolvent company to be administered in a way that:

(a)    maximises the chances of the company, or as much as possible of its business, continuing in existence; or

(b)    if it is not possible for the company or its business to continue in existence - results in a better return for the company's creditors and members than would result from an immediate winding up of the company.

The convening period should be extended

7    Since their appointment on 14 April 2026, the administrators have been conducting investigations into Babyskin's business, property, affairs and financial circumstances, with a view to forming an opinion about whether it would be in the interests of creditors to execute a deed of company arrangement (DOCA), for the administration to end, or for Babyskin to be wound up: s 438A. As a result of those investigations the administrators have identified that from about 12 December 2020 up until about 2 April 2026, Babyskin operated a business providing 'cosmetic and aesthetic services, including facial treatments, non-surgical skin treatments, laser and energy-based treatments, doctor-led medical aesthetic treatments, and semi-permanent cosmetic treatments'.

8    The administrators have not caused Babyskin to trade its business at any point since they were appointed and, according to Mr Olsen, they have no intention to do so.

9    Babyskin operated its business from leased premises located at an address in Adelaide. According to Mr Olsen, the lease appears to have expired on or about 31 December 2024, but Babyskin continued to occupy those premises on a holding over basis following that date. However, Mr Olsen has also discovered that from 1 May 2026 the premises was leased to a separate entity, Babyskin Aesthetic Clinic Pty Ltd. One of the directors of that company is also a director of Babyskin. Further information that is available to the administrators suggests that Babyskin provided a bank guarantee to the owner of the leased premises as security for its obligations under the lease. The administrators are investigating those matters.

10    Before Babyskin ceased to trade on or about 2 April 2026, it employed approximately seven staff. Four of those employees have resigned. The administrators have not terminated the employment of the remaining employees, and their positions have not been made redundant.

11    The administrators have identified Babyskin's key assets, which include treatment machinery, shop fit-out, information technology equipment and intellectual property. The administrators have also identified that Babyskin does not appear to have any secured creditors, but that it has unsecured creditors who claim to be owed about $180,000. That amount is made up of around $15,500 in priority creditor claims for outstanding wages and superannuation, with the balance claimed by ordinary unsecured creditors, including suppliers as well as customers who prepaid for services that were not provided before the administrators were appointed.

12    According to Mr Olsen, Babyskin appears to have gone into administration because, amongst other things:

(1)    there was a sudden interruption to trading, including closure of the clinic and cancellation of scheduled appointments, which resulted in significant loss of revenue;

(2)    Babyskin experienced operational and staffing disruption, including inconsistent and conflicting directions to employees, which disrupted normal business activities and resulted in loss of revenue; and

(3)    the directors of Babyskin were in dispute regarding the management, operation and direction of the company, which impacted on its ability to operate effectively and resulted in a loss of revenue.

13    Mr Olsen has spoken to the two directors of Babyskin about their interest in purchasing the company's business and assets. As at the date of his affidavit, Mr Olsen had received offers to purchase Babyskin's business and assets, and he was taking steps to seek to further negotiate, finalise, document and complete a sale. According to Mr Olsen, he anticipates that a sale of Babyskin's business and assets may result in the realisation of sufficient funds to pay all creditors in full, with a surplus remaining for the shareholders. However, he also said in his affidavit that he:

(1)    is yet to conclude any sale;

(2)    has not formally called for or sought proofs of debt from persons claiming to be creditors of Babyskin, and that he has not had sufficient time to identify the full extent of potential claims;

(3)    is aware that several of Babyskin's taxation lodgements relating to periods before the administrators were appointed remain outstanding;

(4)    is not yet able to reach an informed or concluded view about Babyskin's overall financial position; and

(5)    is not yet able to form an opinion about whether it is in the best interests of the Babyskin's creditors for a DOCA to be executed, for the company to be wound up, or for the administration of the company to end.

14    Mr Olsen has also been in contact with the directors of Babyskin regarding the possibility of a DOCA being proposed, and he has received one such proposal in the context of discussions regarding a possible sale of the company's business and assets.

15    According to Mr Olsen there are several reasons for extending the convening period, namely, to allow him to:

(1)    continue to negotiate, finalise, document and complete a sale of Babyskin's business and assets;

(2)    consider any DOCA proposals, and to take advice on any such proposals;

(3)    attend to the finalisation and submission of outstanding taxation lodgements;

(4)    take further steps to seek to identify potential creditor claims against Babyskin, including by calling for proofs, considering claims received, and forming views about the admissibility and enforceability of all submitted claims;

(5)    further investigate and consider Babyskin's financial position; and

(6)    complete the investigations, inquiries and analysis, including the matters referenced above, which are required for him to form an opinion under s 438A(b) and to comply with his other duties under the Corporations Act to report to creditors concerning his recommendations.

16    Mr Olsen noted that the business of Babyskin is not currently trading and that there is no intention for it to trade. This means that the administrators are not incurring substantial costs, expenses and remuneration associated with a trading voluntary administration.

17    Mr Olsen's evidence was that, if the convening period were not extended, he would recommend that the second meeting be adjourned. If the second meeting were to be adjourned, then this would mean that the administrators would be required to prepare two detailed reports to creditors and there would need to be two creditors' meetings. According to Mr Olsen, this would result in the payment of substantial additional costs, expenses and remuneration. Mr Olsen estimated that the total costs in that scenario would be approximately $30,000.00 to $40,000.00 higher than if the convening period were to be extended.

18    Mr Olsen also expressed the following opinions:

The best return to creditors is likely to be derived from a Potential Business Sale as that may see all of the Company's creditors paid in full, with a possible return to shareholders. It is also unclear at this stage whether a liquidation of the company will provide the best outcome for all stakeholders.

Accordingly, in my view, the Proposed Extension is in the best interests of the Company's creditors. If the Proposed Extension is not granted, I will not be able to complete the tasks [set out earlier in my affidavit] before the end of the existing convening period, which may result in the Company's liquidation.

19    At the hearing of the administrators' application I formed the view that an extension of the convening period under s 439A(6) to 12 August 2026 struck an appropriate balance between the legislative expectation that the administration of Babyskin will be relatively expeditious against the need to allow sufficient time for sensible and constructive activity to occur with a view to maximising a return for its creditors and, if possible, for its shareholders.

20    The evidence before me established that the administrators were continuing to responsibly investigate Babyskin's financial position. Those investigations included carrying out inquiries in relation to the circumstances in which Babyskin's lease of the premises located at an address in Adelaide came to an end and where the premises were then leased by another company associated with one of Babyskin's directors. Further, the administrators were attending to outstanding taxation lodgements, as well as identifying and considering creditor claims.

21    I accepted that those investigations were required, for among other reasons, to enable the administrators to effectively negotiate a sale of Babyskin's business and assets, and to consider any proposed DOCA. In that regard, it is significant to note that Mr Olsen expressed the view that the sale of Babyskin's business and assets may result in the realisation of sufficient funds to pay all creditors in full, with a surplus remaining for shareholders. I placed significant weight on Mr Olsen's opinions, having regard to his extensive experience in corporate insolvency and administration.

22    I also accepted Mr Olsen's opinion that, if the Court did not extend the convening period to 12 August 2026, the administrators would not be able to complete the tasks that he said needed to be completed. If the administrators are not able to complete those tasks, the creditors and members of Babyskin may be denied a better return than would result from the company being placed into immediate liquidation.

23    It is also relevant to observe that, if the convening period was not extended, it seemed likely that the second meeting would be adjourned in any event. Based on Mr Olsen's evidence, this would probably have resulted in costs, expenses and remuneration being unnecessarily incurred by the administrators.

24    Counsel for the administrator properly drew my attention to the fact that an extension of the convening period will delay the ability of Babyskin's employees to file claims under the Department of Employment and Workplace Relations' Fair Entitlements Guarantee Scheme, under which claims may be payable in the event of any liquidation. However, and as was submitted, if the extension of the convening period is granted there appears to be a reasonable chance that the employee creditor claims will be paid in full in any event upon completion of a sale or DOCA. Further, a sale or DOCA may lead to future employment opportunities for these employees. Accordingly, while an extension of the convening period may cause some prejudice to the employees, when weighed in the balance, that prejudice did not persuade me that the Court should not exercise its discretion in favour of granting the extension sought.

Conclusion

25    Ultimately, I formed the view that there was clear and cogent evidence of a real prospect that an extension of the convening period would enhance the prospects that the creditors and members of Babyskin will receive a better return than would result from an immediate winding up. On that basis, I considered that it was appropriate to grant the extension of time sought.

26    It may be that the administrators will be able to call the second meeting earlier than 12 August 2026. Accordingly, I also concluded that it was appropriate to make a so-called 'Daisytek order' pursuant to s 447A(1) of the Corporations Act: In the matter of Daisytek Australia Pty Limited [2003] FCA 575; (2003) 45 ACSR 446 at [10] to [18]. That order was to the effect that Pt 5.3A of the Corporations Act is to operate in relation to Babyskin such that, notwithstanding s 439A(2), the second meeting may be convened at any time before, or within five business days after, the end of the convening period as extended. As Wheatley J recently noted in Vasudevan, in the matter of Harbour Guidance Pty Ltd (Administrators Appointed) [2025] FCA 486 at [45], citing In the matter of L.E.D. Builders Pty Ltd (admins apptd) [2008] NSWSC 633 at [2] and Byrnes, in the matter of Murray River Organics Proprietary Limited (Administrators Appointed) (Receivers and Managers Appointed) [2022] FCA 232 at [33], such orders have been described as 'sensible and almost routine'.

27    In circumstances in which the application to extend the convening period was made on an urgent ex parte basis, the administrators responsibly submitted that orders should be made requiring them to take certain steps to inform Babyskin's creditors that the convening period had been extended, including by notifying those creditors by email, short message service text message or postal delivery. The administrators also submitted that an order should be made giving any person who has sufficient interest in the matter to be granted liberty to apply to vary or discharge the order to extend the convening period. I formed the view that it was also appropriate to make those orders.

Associate:

Dated:    19 May 2026