Albarran, in the matter of Chala Metals Limited [2025] FCA 984 (20 August 2025)

Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25

Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635

Farnsworth v About Life Pty Ltd (Administrator Appointed), in the matter of About Life Pty Ltd (Administrator Appointed) [2019] FCA 11

Frisken, in the matter of Xpress Transport Solutions Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) [2023] FCA 448

Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) [2025] FCA 219

In the matter of Daisytek Australia Pty Ltd [2003] FCA 575

In the matter of Hamelin Brands Pty Ltd [2021] NSWSC 137

In the matter of Riviera Group Pty Ltd (administrators appointed) (receivers and managers appointed) [2009] NSWSC 585

Livingstone, in the matter of Vertical 4 Pty Ltd (Administrators Appointed) [2025] FCA 382

Lombe, Re Australian Discount Retail Pty Ltd [2009] NSWSC 110

Mighty River International Ltd v Hughes (as deed administrators of Mesa Minerals Ltd) (2018) 265 CLR 480; [2018] HCA 38

Re ATG Developments Pty Ltd (1994) 13 ACSR 261

Silvia, in the matter of FEA Plantations Ltd (Administrators Appointed) [2010] FCA 468

Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717

Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182

IN THE MATTER OF CHALA METALS LIMITED ACN 648 213 610 (ADMINISTRATORS APPOINTED)

RICHARD ALBARRAN, BRENT TREVOR-ALEX KIJURINA AND AARON JOSEPH DOMINISH (IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF CHALA METALS LIMITED ACN 648 213 610 (ADMINISTRATORS APPOINTED))

1. Pursuant to s 447A(1) of the Corporations Act 2001 (Cth), Part 5.3A of the Act is to operate in relation to Chala Metals Limited ACN 648 213 610 (Administrators Appointed) (the Company) as if s 439A(6) provided that the period for convening the second meeting of creditors of the Company be extended from 21 August 2025 to 21 November 2025.
2. Pursuant to s 447A(1) of the Act, Part 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 of the creditors of the Company may be convened at any time before, or within, five business days after, the end of the convening period as extended by Order 1.
3. The plaintiffs are, within two days, to give notice of these orders to creditors of the Company by means of a circular informing them of the substance of these orders and enclosing a sealed copy of the orders:

(a) sent by email in respect of those creditors who have informed the plaintiffs that email is their preferred method of communication; and

(b) otherwise sent by post in respect of all other known creditors.

1. The plaintiffs give notice to creditors of the meeting referred to in Order 2 in accordance with r 75-15 and r 75-225(1) of the Insolvency Practice Rules (Corporations) 2016 (Cth).
2. Liberty to apply is granted to any person who can demonstrate sufficient interest to modify or discharge these orders on not less than 48 hours' notice to the plaintiffs.
3. The plaintiffs' costs of the application are costs in the administration of the Company.

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

Delivered ex tempore, revised from transcript

1. Applications of the present kind are commonplace: Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) [2025] FCA 219 at [24] (Neskovcin J). That circumstance should not be misconstrued so as to give rise to a false impression that an extension of the convening period for the second meeting of the creditors of a company in administration may be obtained as of right. The period fixed by s 439A(5) of the Corporations Act 2001 (Cth) for the convening of such a meeting is "designedly brief", and the "evident purpose of Pt 5.3A is thus to confine administrations to the strict time limits laid down by Pt 5.3A subject only to such extensions as the courts may be satisfied are appropriate to be granted in exercise of the specific power of extension conferred by s 439A(6) or the general power of varied application conferred by s 447A(1)": Mighty River International Ltd v Hughes (as deed administrators of Mesa Minerals Ltd) (2018) 265 CLR 480; [2018] HCA 38 at [72] and [74], per Nettle and Gordon JJ.
2. That is not, of course, to suggest that a court will require anything like special or exceptional circumstances in order to reach the required state of satisfaction, or even that there is a general predisposition against granting extensions. It is well-settled that the role of the Court is to "strike an appropriate balance between the expectation that administration will be a relatively speedy matter and the requirement that undue speed should not be allowed to prejudice sensible and constructive actions directed towards maximising the return for creditors and any return for shareholders": Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [19]. See also, e.g., Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 2) [2020] FCA 717 at [64] (Middleton J); ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No 5) [2008] FCA 1947 at [8] (Emmett J).
3. It does mean, however, as Austin J observed in In the matter of Riviera Group Pty Ltd (administrators appointed) (receivers and managers appointed) [2009] NSWSC 585 at [18]:

[A]n important principle from the older cases remains good law: the applicant for an extension must adduce evidence establishing grounds, adequate to enable the court to carry out the balancing exercise about which the modern cases speak. The administrator is expected to explain with some particularity the problems that make the extension necessary .... The longer the extension that is sought, the more important it is for the court to be given a clear and complete explanation of the state of the administration, the grounds for the extension and any potential prejudice that would flow from granting it.

1. A corollary of the fact that the grant of an extension must be justified, and not assumed, is that an application for one should be made, to the extent possible, in circumstances permitting proper scrutiny by the Court, including, in appropriate cases, with the benefit of the participation of affected persons. The undesirability of applications of this kind being brought on the eve of the expiry of the convening period, and the difficult position in which a Court hearing such an application is placed, has long been remarked upon: see, e.g., Re ATG Developments Pty Ltd (1994) 13 ACSR 261 at 262 (Young J); Silvia, in the matter of FEA Plantations Ltd (Administrators Appointed) [2010] FCA 468 at [34]- [35] (Dodds-Streeton J); In the matter of Hamelin Brands Pty Ltd [2021] NSWSC 137 at [35] (Williams J); Frisken, in the matter of Xpress Transport Solutions Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) [2023] FCA 448 at [24]- [28] (Cheeseman J).
2. A related aspect of the undesirability of applications being made in circumstances of avoidable urgency is that the opportunity for affected persons to be notified and, just as importantly, to have time to consider their position, is diminished. In particular, it has been repeatedly pointed out by judges in this Court that creditors should be given as much notice as is reasonably possible of applications for an extension of the convening period for a second meeting of creditors: see, e.g., Frisken at [24]-[28] (Cheeseman J); Beattie (Administrator), in the matter of Sharvain Facades Pty Ltd (Administrator Appointed) [2025] FCA 304 at [32] (Halley J); Livingstone, in the matter of Vertical 4 Pty Ltd (Administrators Appointed) [2025] FCA 382 at [15] (Owens J). At the very least, a failure to afford interested parties the opportunity to appear in relation to an application deprives the Court of a valuable perspective in what is otherwise an ex parte application. That problem is not cured, as the cases to which I have just referred make clear, by orders granting leave to interested parties to apply on notice after the event. As Cheeseman J observed in Frisken at [28]:

While such an order may serve a protective purpose in respect of interested parties of which an administrator is not reasonably aware or for whom an administrator cannot reasonably ascertain contact details, it should not be used instead of taking reasonable steps to give adequate notice in advance of the application where it is reasonably practicable to do so. To do that, in my view, is to put the cart before the horse. The approach taken by the administrator in this case should be avoided in future applications of this type unless it is demonstrated to be unavoidable.

1. The first notice that the Court received of the potential for the present application was an email to my chambers at 7:46pm on the evening of 18 August 2025, requesting a hearing at 10:00am the following day, 19 August 2025. That email stated that the application was urgent, because the convening period would, unless extended, expire on 21 August 2025. There was thus a period of two days within which the application was required to be determined.
2. Considered in isolation, of course, a two-day period is more than ample to deal with an application of this kind. It will rarely be the case, however, that a busy duty judge will have no other demands upon his or her time, including matters of genuinely unavoidable urgency. In those circumstances, as Williams J observed in Hamelin Brands at [35], the creation of an artificial urgency "interferes with the orderly and efficient management of the publicly funded resources of the Court that must be available for all litigants to call upon".
3. There will of course be situations where applications of this kind can only be made on short notice. This was not such a case. I was informed that instructions to bring the application had been provided by the plaintiffs to their solicitor on 8 August 2025. As will become apparent, even by that point it must have been clear for some time to the administrators that they would wish to seek an extension. In any event, those instructions were received on the last day that the solicitor responsible for the matter was at work before taking holidays, returning to work on 18 August 2025. The matter was not progressed during her absence. No attempt whatsoever was made to notify creditors that the application would be made, or even that it was in contemplation.
4. The circumstances in which this application came to be made were thus unsatisfactory, and care should be taken to ensure that they are not repeated.

1. The plaintiffs were appointed joint and several administrators of Chala Metals Limited on 22 April 2025, by resolution of the company's two directors.
2. The company's primary assets are its all but 100% shareholdings in two Peruvian companies, which own mining concessions over 2,200ha of land in Peru, as well as drilling rights over neighbouring land.
3. The first meeting of creditors was held on 2 May 2025, at which the minutes record creditors were told that "the Voluntary Administration process typically runs for a period of 4-6 weeks unless additional time is required, which will be determined during the course of the Administration".
4. The second meeting of creditors was required to be convened by 21 May 2025. On 16 May 2025, however, on the application of the plaintiffs, the Court made an order pursuant to s 439A(6) of the Corporations Act extending the convening period to 21 August 2025. The creditors of the company were informed of that fact on 21 May 2025 and were told that, as a result, "the Administrators have until 28 August 2025 to hold the Second Creditors' Meeting", at which time they would be given the opportunity to vote on whether the administration should end, the company should be wound up, or any Deed of Company Arrangement be executed if one was proposed.
5. In the period since 16 May 2025, the plaintiffs have undertaken a good deal of work directed to investigating the company's affairs, and attempting to sell its valuable assets. Of particular relevance:

(a) The plaintiffs prepared various documents designed to elicit expressions of interest in the company's mining assets, and established a data room containing documents relevant to the proposed sale:

(i) Advertisements calling for expressions of interest by 25 June 2025 were published in the Australian Financial Review on 12 and 14 June 2025.

(ii) A "Teaser Overview" and accompanying Confidentiality Deed were distributed by email to a large number of potential purchasers on 18 and 24 June 2025. They called for expressions of interest by 25 June 2025 and 2 July 2025 respectively.

(iii) An Information Memorandum, dated 1 July 2025, was prepared, which called for non-binding offers by 18 July 2025, and best and final offers by 8 August 2025.

(b) The plaintiffs engaged in negotiations with neighbouring landowners, directed towards enabling a joint sale campaign of all parties' assets. Agreement with the neighbouring landowners was reached on 18 July 2025, with final documentation being received on 29 July 2025. One of the plaintiffs gave evidence that:

This agreement is critical to the overall sale process, as the Company holds drilling rights over the land for which the neighbouring party owns mining concessions. In my opinion, the inclusion of these additional mining concessions significantly enhances the attractiveness and commercial viability of the asset package, thereby increasing the likelihood of achieving a better outcome for creditors.

(c) The plaintiffs thus prepared an updated Information Memorandum, dated 12 August 2025, which calls for non-binding offers by 29 August 2025, and best and final offers by 12 September 2025. That, and accompanying documents, have been emailed to prospective purchasers (on 15 and 17 August 2025), the data room has been updated, and other steps taken to further progress the sales.

1. The negotiation of the agreement with the neighbouring landowner is plainly regarded by the plaintiffs as a significant beneficial outcome, which has materially altered the nature of the proposed sale. To take advantage of that fact, the marketing and sale process has, in some respects, had to start again. Fundamentally, the plaintiffs seek a further extension of the convening period to allow that process to bear fruit.

1. Although the plaintiffs initially framed their application as one for a further extension pursuant to s 439A(6), that section authorises only one extension of time: see, e.g., Lombe, Re Australian Discount Retail Pty Ltd [2009] NSWSC 110 at [31] (Barrett J); Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 at [2] (Jacobson J). Where further extensions are required, the relevant power is to be found in s 447A: see, e.g., Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 at [12]- [13] and the cases cited therein (Middleton J).
2. The principles that apply when considering a further extension are the same as those that apply for any extension of the convening period: Virgin Australia Holdings (No 7) at [14] and the cases cited therein (Middleton J). Those principles can be found collected usefully in many places, including, for example: Onesteel at [24]-[30] (Neskovcin J); Frisken at [30]-[38] (Cheeseman J); Virgin Australia Holdings (No 2) at [64]-[68] (Middleton J); Farnsworth v About Life Pty Ltd (Administrator Appointed), in the matter of About Life Pty Ltd (Administrator Appointed) [2019] FCA 11 at [3]- [6] (Thawley J); North Queensland Heavy Haulage Services at [18]-[19] (Markovic J).

1. The fundamental basis upon which the plaintiffs sought to justify the further extension was that the additional time was required in order to complete a sale of the company's assets. The evidence of one of the plaintiffs was that completion of the presently envisaged sale process was:

critical to ensuring the sale campaign reflects the full value of the Company's interests, including rights over land held by the neighbouring party. The joint campaign is expected to result in a more attractive offering and a better outcome for creditors. Accordingly, an extension to the convening period is sought to allow these steps to be completed.

1. In and of itself, the fact that time is required to sell an asset did not seem to me to explain why an extension of the convening period was required.
2. It is of course true that a well-recognised category of case in which extensions have been granted is one where time is required to execute an orderly process of disposal of assets, or where it is necessary in order to achieve a sale of a business as a going concern, or similar kinds of situation: see, e.g., About Life at [6] (Thawley J) and the authorities there collected. But the crux of the analysis in those cases is that the sale in the course of the administration would produce a better outcome than a sale in a liquidation. The critical fact justifying the extension, in other words, is not that more time is required to sell an asset; it is that the prolongation of the administration provides some advantage worth pursuing.
3. A related category of case is that where there may be a risk that winding up a company will have the effect of destroying or impairing some valuable asset of the company: see, e.g., Albarran, in the matter of Bonza Aviation Pty Ltd (Administrators Appointed) [2024] FCA 575 at [6] and [14] (Jackman J).
4. In other cases, whether or not an asset can be sold, and if so for how much, may be relevant to the identification and development of the range of options that may be presented for creditors' consideration at the second meeting.
5. In short, while the range of circumstances capable of justifying an extension of the convening period will be capable of almost infinite variation, ultimately some basis needs to be identified as to why (consistently with the object stated in s 435A of the Corporations Act) the administration should be prolonged, instead of giving creditors the opportunity to make the decision allowed to them under s 439C of the Corporations Act. Inevitably, doing so will require some form of comparison or weighing of alternatives.
6. The evidence adduced on the first return of this hearing did not identify any basis upon which the continuation of the administration, as opposed to some other outcome, might be regarded as likely to achieve a better outcome for creditors and shareholders. There was not, for example, any evidence suggesting that a better price for the company's assets might be achieved in a sale during the administration (indeed the marketing material prepared in relation to the sale emphasised that the sale was a "low entry cost opportunity" because the "administrator-led process" created "potential value dislocation"). There was no evidence in relation to the risks of timing that might be introduced by a liquidation, and how they may be relevant in the particular circumstances of this case. There was no evidence that the range of options that might be put to creditors at the second meeting would differ in any material way based on the terms of any sale that might be agreed.
7. Ultimately, the evidence that was relied upon initially did not travel much beyond a formulaic recitation of phrases used in previous cases to explain why an extension had been granted.
8. It was said, for example, that "the size and scope of the administration of the Company is substantial, with a complex corporate group structure including foreign companies". As far as the evidence disclosed, the group was no more complex than the company and its two, effectively wholly-owned, Peruvian subsidiaries. And on what basis it was contended the "size and scope" of the administration were substantial was not made clear. But in any event, the real problem is that no chain of reasoning was identified to explain why some particular feature of this administration justified a further extension of the convening period. Indeed, the evidence rather suggested that any difficulties presented by these kind of factors had been overcome during the period of the first extension. I gained the impression that this factor, having been used to justify the first extension, was simply repeated on the present occasion without any real thought being given to its applicability.
9. In this context it is worth referring back to the observations of Austin J in Riviera Group at [18] that I have quoted above.
10. In any event, when the precise basis upon which the extension was sought to be justified was raised with the plaintiffs' solicitor, it emerged that the real basis was not mentioned in the evidence. At that point, an adjournment was sought and granted to allow further evidence to be obtained. (I might observe, incidentally, that the potential for this kind of development provides a further reason why it is undesirable for extension applications to be brought on the eve of the expiry of the current period. Had I not been able to accommodate the hearing of the application on 19 August 2025, the plaintiffs may not have been able to obtain the further evidence they wished to rely upon.)
11. The real reason, it emerged, that a sale of the company's assets in administration provides an advantage to creditors is that, analogously to the situation in Bonza Aviation, there is a risk that a liquidation of the company would, or at least may, trigger a range of practical, contractual and regulatory consequences that would have the effect of destroying, or seriously impairing, the value of the mining concessions sought to be sold (including their cancellation, or the imposition of restrictions on their transfer). The liquidation of the company, as the parent company of the companies through which the Peruvian mining concessions are held, may thus impair or destroy the value of the company's only valuable assets.
12. Insofar as the interests of creditors are concerned, the plaintiffs submitted that they could not be disadvantaged by the extension. There are no secured creditors, and only two unrelated unsecured creditors. The company has no assets other than the mining concessions, and it follows that if their value were destroyed or impaired then creditors would inevitably be worse off.
13. I have already mentioned that no effort was made to notify creditors of the application for a further extension of the convening period. That was unfortunate, especially in circumstances where an express representation had been made to creditors after the previous extension was obtained that the second creditors' meeting would be held by 28 August 2025, at which time they would be given the opportunity to vote. Moreover, the small number of creditors involved meant that no real expense or diversion of resources would have been involved in doing so. Once I agreed to adjourn the matter for one day to allow the plaintiffs to obtain further evidence, they very sensibly sought to obtain the views of the company's small number of creditors. Those creditors who communicated a view in response to that notification, which included both of the unrelated creditors, either supported or at least did not oppose the grant of the extension. I will, in any event, grant leave to any interested person to apply on notice should they wish to do so.
14. Overall, the period of the extension sought is reasonable in light of the presently anticipated sale schedule, the potential for minor slippage, the need to formalise and complete any agreement, and the inevitable potential for things to take longer than they might by reason of the location of the assets in a foreign country.
15. For the foregoing reasons, I am satisfied that allowing sufficient time for an orderly sale process of the company's assets to be concluded is appropriate to strike the balance identified in the authorities, and I would grant the further extension sought.
16. The plaintiffs also seek a so-called Daisytek order pursuant to s 447A of the Corporations Act. Such an order allows administrators to hold the second meeting of creditors prior to the expiry of the extended convening period if desirable, so as to avoid requiring administrators simply to wait and do nothing until the period expires: In the matter of Daisytek Australia Pty Ltd [2003] FCA 575 at [14]- [17] (Lindgren J). I am satisfied that that is an appropriate order to make.

I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Owens.