In the matter of Stone Solutions Sydney Pty Ltd

Legislation Cited: Corporations Act 2001 (Cth)

Cases Cited: In the matter of Offshore & Ocean Engineering Pty Ltd [2012] NSWSC 1296
In the matter of Operational Services Australia Pty Ltd [2025] NSWSC 1507
In the matter of Reed Constructions Australia Pty Ltd [2012] NSWSC 1045
In the matter of SFL/PILTECH (EA) Pty Ltd [2018] NSWSC 637

Texts Cited: N.A.

Category: Principal judgment

Parties: Workers Compensation Nominal Insurer (plaintiff)
Stone Solutions Sydney Pty Ltd (Administrator Appointed) (defendant)

Representation: Solicitors:
Hall & Wilcox (plaintiff)
SLF Lawyers (defendant)

File Number(s): 2025/367206

Publication restriction: N.A.

JUDGMENT - EX TEMPORE (REVISED FROM THE TRANSCRIPT)

1. On 1 December 2025, this matter was listed for hearing the application to wind up Stone Solutions Sydney Pty Ltd (Stone Solutions). The application is made by Workers Compensation Nominal Insurer. That listing was made after the application had been adjourned previously on four occasions.

2. An application was made today for the hearing of the application to wind up Stone Solutions to be adjourned. The application for the adjournment by Stone Solutions is made under s 440A(2) of the Corporations Act 2001 (Cth). That section provides that the Court is to adjourn the hearing of an application for an order to wind up a company if the company is under administration and the Court is satisfied that it is in the interests of the company's creditors for the company to continue under administration rather than be wound up.

3. The application for the adjournment is supported by an affidavit of Mr Ivan Glavas, sworn on 29 January 2026. Mr Glavas was appointed as the administrator of Stone Solutions on 9 January 2026 in accordance with s 436A of the Corporations Act*,* pursuant to a resolution of the sole director, Mr Blake Johnson.

4. On 13 January 2026, Mr Glavas circulated a report to known creditors of the company, being the first report to creditors. Mr Glavas has undertaken some initial investigations and has had discussions with Mr Johnson. He has been advised that the company ceased trading prior to his appointment. The discussions between Mr Glavas and Mr Johnson include discussions about the prospect of a deed of company arrangement (DOCA). Mr Johnson has advised Mr Glavas that there will be a deed fund compiled by financial contributions from Mr Johnson's family and friends.

5. There is evidence of an email from Mr Johnson's solicitor proposing third party payments in the sum of $350,000 in two tranches, namely, $150,000 within two weeks of execution of the proposed DOCA, and $200,000 within six months of execution of the proposed DOCA. Those funds are said to then be available in satisfaction of all claims by creditors.

6. Mr Glavas gives evidence about the work he has undertaken to date in his role as the administrator. Pursuant to s 439A of the Corporations Act, Mr Glavas is required to give written notice of the second meeting of creditors to the creditors of the company by circulating his major report to creditors by no later than 9 February 2026. That notice must be accompanied by a report in relation to the business, property, affairs and financial circumstances of Stone Solutions, as well as a statement setting out Mr Glavas’s opinions, with reasons, about matters, including whether it would be in the best interests of the creditors of Stone Solutions for the company to execute a DOCA, or the administration to end, or Stone Solutions to be wound up. He is required to convene and hold a second meeting of creditors of the company by no later than 16 February 2026.

7. Mr Glavas's evidence is that from his initial investigations into the affairs of the company, the only potential return to creditors appears to be by way of a DOCA, and that if the company were to be wound up, there will likely be no return to creditors of the company. His evidence is that that is his preliminary view. His investigations are ongoing.

8. The application made by Mr Glavas in his capacity as administrator of Stone Solutions is that the hearing of the application to wind up Stone Solutions be adjourned until after the circulation of the major report but before the second meeting of creditors. That means that the application is, in effect, an application to adjourn the winding up application for a period of a little over one week.

9. The law in relation to an application to adjourn a winding up application under s 440A is well-known. I was taken to the decision of Brereton J in I**n the matter of SFL/P**ILTECH (EA*)* Pty Ltd [2018] NSWSC 637. At [6], his Honour summarised the relevant principles. Those principles, again by way of summary, are that an application under s 440A requires the following:

10. the Court must be satisfied that it is in the creditors’ interests to continue the administration in all the circumstances, which involves there being a sufficient possibility, as distinct from mere optimistic speculation, that the creditors’ interests will be accommodated to a greater degree in an administration than in a winding up – a substantial degree of persuasion that administration rather than liquidation is in the best interests of the company's creditors is necessary;

11. the defendant company bears the burden of satisfying the Court that an adjournment should be granted; and

12. the Court will view with scepticism the appointment of the administrators at the last minute in the face of winding up proceedings.

13. In the decision of Brereton J in I**n the matter of Reed Constructions Australia Pty Ltd [2012] NSWSC 1045, his Honour considered relevant considerations in the application of s 440A, which included whether it has been demonstrated that there is a realistic prospect that there will be a substantial injection of funds from a third party that would increase the funds available to creditors. In that case, his Honour rejected speculative evidence given on information and belief from an unstated source as to what the proposed DOCA might include. His Honour also noted that another consideration which is usually relevant is that, typically, liquidation will have an advantage for creditors in triggering the availability of the provisions that enable recovery of the proceeds of uncommercial transactions and remedies for insolvent trading.

14. In In the matter of Offshore & Ocean Engineering Pty Ltd [2012] NSWSC 1296, Brereton J made an observation at [15] that when a manifestly insolvent company appoints voluntary administrators following resistance to a creditor's statutory demand and the initiating of winding up proceedings, the Court approaches with a degree of scepticism whether the appointment is not an attempt as a last resort to avoid the consequences of liquidation.

15. The relevant principles were also identified recently in the decision of Black J in In the matter of Operational Services Australia Pty Ltd [2025] NSWSC 1507. In that case, his Honour observed at [2] that the lateness of an application is also a relevant matter, particularly where the appointment is made shortly before the hearing of a winding up application.

16. In this case, the plaintiff on the winding up application submitted that Stone Solutions had not proved to a sufficient standard that an adjournment should be granted.

17. It is true that the application in this case was made late. It is also true that the appointment of the administrator can properly be described as having occurred at the last minute. Those are factors which point against the granting of an adjournment. Another factor that seems to me to be significant is that the evidence does not identify who is to provide the funding for the DOCA, or the financial ability of those persons to provide that funding. It is appropriate to treat with some scepticism aspects of the proposed adjournment and the events that have occurred, given that there have been previous adjournments of the winding up application, and that the proceedings in substance followed from a statutory demand that was made in June 2025.

18. However, a relevant consideration is the length of the period of the proposed adjournment. In this case, as I have said, the proposed adjournment is for between seven to fourteen days. That period would enable the administrator to prepare the major report for creditors. At the moment, there is very little information before the Court about the identity of the creditors or of their circumstances. The debt to the petitioning creditor is in the sum of approximately $78,000, and there is evidence that the total amount due to all creditors is in the vicinity of $870,000, although there is some uncertainty about the precise amount due to all creditors.

19. It seems to me that the relevant question is whether it is in the interests of creditors for there to be a short adjournment in order to enable the administrator to provide the major report to creditors. I consider that it is in the interests of the company's creditors within the meaning of s 440A for there to be a short adjournment in order for that to occur. Once the Court has the major report to creditors, the Court will be in a better position than it is today to determine whether or not the company ought to be wound up, or whether it is in the best interests of the company's creditors for the administration to continue past that point in time.

20. I accept that the materials before the Court would not justify an extended adjournment of the winding up application. But where the adjournment application is for a very short period and will permit the Court to have the benefit of the major report to creditors, I consider that the adjournment is justified and satisfies the requirements of s 440A.

21. I will adjourn the hearing of the winding up application until 9.30am on 11 February 2026.

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