In the matter of Tahmoor Coal Pty Ltd

By Originating Process filed over six months ago, on 6 August 2025, the Plaintiff, Coal Mines Insurance Pty Ltd ("CMI") applied for the winding up of Tahmoor Coal Pty Ltd ("Tahmoor"). On 17 November 2025, the Court granted leave to Tahmoor to adduce expert solvency evidence which was to be filed by 12 December 2025, subject to a qualified guillotine order. On 15 December 2025, the Court extended the time for Tahmoor to file and serve expert solvency evidence to 2 February 2026, again subject to a qualified guillotine order. The Court also then listed CMI's winding up application with a view to hearing it, if practicable, in the Corporations Motions list today. There has been, and will be, sufficient time to hear that application in the List today, although a significant amount of time has been lost to an adjournment application, in two alternative forms, which I will address in a moment. Because of the delay in the hearing of the winding up application that already occurred by 15 December 2025, the Court then extended the period in which the winding up application must be determined until 27 February 2026.

Today, although not by formal application filed by interlocutory process, Tahmoor seeks to further adjourn the winding up application, either on a narrow basis for a relatively short period until next week, or for a longer period of a month, which would take the application until early March 2026 and require a further extension of time under s 459R of the Corporations Act 2001 (Cth) (“Act”). As will emerge below, the application for an adjournment for a month was plainly something of a stalking horse, since it was apparent that an adjournment of at least several months, or longer, would be required to complete any reconstruction of Tahmoor’s holding company or sale of Tahmoor’s shares or assets, depending upon whether any purchaser of shares or assets of Tahmoor was a local or foreign purchaser.

I will first address the applicable principles. In determining whether to adjourn the application today, I must have regard to ss 56–58 of the Civil Procedure Act 2005 (NSW) (“CPA”) and particularly to the Court's obligation to bring about the just, quick and cheap resolution of the real issues in dispute in the proceedings. Section 57 requires proceedings to be managed having regard, inter alia, to the just determination of the proceedings. I also have regard to the case law, which has repeatedly emphasised that the prompt determination of proceedings is an essential aspect of the just determination of proceedings in that delay in determining proceedings has the capacity to erode, and frequently does erode, their just determination.

I must also bear in mind, importantly, s 459R of the Act, which relevantly provides that an application for a company to be wound up in insolvency is to be determined within six months after it is made. Section 459R(2) allows the Court to extend the period within which such an application to be determined, but only where it is satisfied that special circumstances justify that extension. That section plainly reflects a legislative policy that the winding up of a company should be determined promptly, and ordinarily within the six month period specified, although it recognises that there are some circumstances in which that time should be extended, as already occurred once here.

Tahmoor's first application is for an adjournment for a shorter period, into next week, which is intended to allow it to perfect an aspect of its case to which I will refer below. Tahmoor reads the affidavit of Mr Atkins dated 9 February 2026 in support of that application, which refers to steps which have been taken to transfer an amount, apparently from offshore, to ANZ Bank, which is then to be paid to the Supreme Court of New South Wales in respect of the amount which was the subject of the creditor’s statutory demand sought by CMI. It appears that this adjournment is sought in order to allow Tahmoor to bolster its case in that respect, because the amount has not presently been received by ANZ Bank and would then have to be transferred from ANZ Bank to the Court to allow Tahmoor to put the proposition that it had in fact been paid into Court, in opposition to the winding up application. I pause here to note that that payment relates only to CMI, the creditor which is presently proceeding with the winding up application, and not to the several other supporting creditors which have appeared today in respect of the winding up application.

Tahmoor's more substantial adjournment application extends to an adjournment for a period of a month, in order to progress, to a limited extent, a restructuring which is proposed in respect of its holding company, Liberty Primary Metals Australia Pty Ltd (“LPMA”), which appeared by its deed administrators in support of the adjournment application.

Tahmoor reads the affidavit dated 9 February 2025 of the Deputy Chief Executive Officer of the GFG Alliance Group, Mr Sogani, in support of that application. Mr Sogani there refers to a deed of company arrangement ("DOCA") executed in respect of LPMA on 30 December 2025, and explains the several funds which are to be created under that DOCA and the potential treatment of creditors of Tahmoor under that DOCA. He notes that, on 22 January 2026, the deed administrators of LPMA commenced a market testing process for the sale of LPMA’s shares in Tahmoor, which is presently plainly at an early stage. He observes his understanding from the deed administrators of LPMA that the sales process is expected to require at least three months to complete from the date of closure of the initial expressions of interest period, which has not yet been reached. That appears to understate the position, as advised by Mr Hynes who appears for the deed administrators, who indicate that the sales process is expected to take nearly five months to complete, to June 2026, apparently on the assumption that a purchaser is a local purchaser and does not require approval under the foreign investment review regime.

Mr Sogani in turn expresses a somewhat conditional view as to the proposition that Tahmoor's creditors would be repaid before any funds are available to LPMA's creditors under the DOCA, although that plainly depends upon the outcome of the sale process.

Mr Sogani also addresses the current circumstances of Tahmoor and the circumstances in which employees are paid wages and entitlements. That proposition is said to include superannuation, although it is not clear in that respect, where superannuation entitlements would ordinarily be paid to a superannuation fund referable to an employee, rather than to the employee personally; and there is no statement as to the currency of payment to such funds. Mr Sogani in turn refers to employee liabilities of Tahmoor, which are extensive and which it appears would be crystalised on redundancy of the employees.

Mr Sogani also sets out additional monthly costs of approximately $2.5 million per month which are paid by Tahmoor during the period of its limited operations, as described. Mr Sogani notes that those expenses are currently being paid by funding received from other entities within the GFG Alliance. It is notable, there, that CMI, which is the Plaintiff in these proceedings, provides compulsory workers compensation insurance in respect of Tahmoor’s coal mining operations, but, consistent with the fact that CMI brings this application on a substantial unpaid debt, Mr Sogani there refers to no allowance for continuing payments to CMI for the services which CMI is obliged to provide while Tahmoor maintains its operations, whether on a limited basis or otherwise.

Mr Sogani also refers, in more detail, to the limited operations of the mine and to funding that has been provided to Tahmoor by GFG Alliance entities, to which I have regard. Mr Sogani gives evidence, in paragraph 34 of his affidavit, that Tahmoor has utilised those funds to make regular payments to "key contractors and suppliers" and there identifies payments made to four creditors, presumably because they are creditors who Tahmoor regards as “key contractors and suppliers”. Again, that list of four creditors does not include CMI, the Plaintiff in this application, notwithstanding the workers’ compensation insurance services that it is continuing to provide to Tahmoor. It is also apparent, from that paragraph, notwithstanding the submission to the contrary that was one point put by Mr Assaf who appears for Tahmoor, that the reference to payments to "key contractors and suppliers" necessarily accepts that non-key contractors and suppliers are not paid. I can readily draw that inference because that paragraph is limited to refer only to payments to “key contractors and suppliers”, and Tahmoor and I can infer that Tahmoor would have led, through Mr Sogani or otherwise, evidence of payments to creditors it does not regard as “key contractors and suppliers”, were it making them.

Mr Sogani also refers to what he describes as support from supporting creditors for an adjournment and there refers to several creditors, in circumstances where multiple other creditors are here present as supporting creditors in respect of the application.

Mr Sogani in turn exhibits voluminous documents, including a letter dated 2 February 2026 sent shortly before this application was due to be heard from Tahmoor's solicitors, which indicates that:

I note, in that respect, that the first aspect of that paragraph sought a longer extension than is now sought, but one which was still likely shorter than the period which would be required to complete any sale process of Tahmoor’s shares or assets. The second aspect of that paragraph was not raised by Mr Assaf in submissions, likely sensibly, when the Court had twice allowed extended periods for Tahmoor to lead expert evidence as to solvency, both under qualified guillotine orders; and it extended that period once, and solvency evidence had not been filed in that time.

Further correspondence addresses a question as to whether liquidation of Tahmoor will result in a materially worse outcome for creditors, and, apparently, the continuance of Tahmoor in restricted operations, without either a liquidator or voluntary administrator being appointed, into the future. It is not necessary to determine that question in order to determine the adjournment application.

Mr Sogani also exhibits a letter dated 8 February 2026 by which the solicitors for Tahmoor indicated that an amount would be paid to CMI, not by Tahmoor or any of its subsidiaries, but by a GFG entity outside GFG's Australian Metals and Primary Steel Group. By an email dated 8 February 2026, the solicitors for CMI declined the suggested tender of that amount. As I noted above, the shorter adjournment application is in turn directed, it appears, to the payment of that amount to the Supreme Court of New South Wales, where it has not been accepted by CMI. Mr Assaf foreshadowed a submission, which I understand will primarily be made in respect of an application to defer a winding up order under s 467 of the Act, or to decline to make a winding up order under s 467 of the Act, that it was unreasonable for CMI not to accept that offer. Presumably, although Mr Assaf did not squarely put that proposition, that proposition is put on the basis that CMI need not be concerned that the payment was a preference, because the application of the preference regime under the Act would be avoided, and the disadvantage of a preference to other creditors would be left unaddressed because the payment to CMI would be made from outside GFG's Australian Metals and Primary Steel Group, not by Tahmoor or any of its subsidiaries, but by another entity associated with the controllers of LPMA or Tahmoor. It seems to me that, in those circumstances, there is little prospect that CMI could be criticised for refusing that tender. To put that another way, it seems to me that a responsible corporate entity is not under an obligation to lend its assistance to an artifice to avoid the preference regime under the Act; and is perfectly entitled to take the view that, if a payment could not be made to it directly without exposing it to a risk of being a preference and has to be paid by an associated entity in order to avoid the risk that it is a preference, then the payment should be declined. Why, it might be asked, should the directors of CMI take the risk that they may ultimately have to explain to the community or to CMI’s regulators why they were prepared to participate in such an arrangement, as distinct from declining to do so?

I interpolate that, at this point, Mr Assaf interrupted my incomplete observations as to the evidence as to this matter and its potential implications to make the submission that “[t]hat concept of reasonableness was not debated”. At this point, I am reviewing the evidence and implications that may arise from it. My observation as to this issue was introduced by the word “[p]resumably”, and I there recognised that Mr Assaf had not squarely addressed the possible implication of that letter. That is not a criticism, where Mr Assaf had indicated that he would defer his substantive submissions as to this issue to be addressed in respect of the discretion under s 467 of the Act and Tahmoor will have the opportunity to address the inferences that might follow from that letter when he makes his further submissions in respect of it. So far as I have expressed any view as to the conduct of responsible corporate entities generally, Mr Assaf will then have the opportunity to make any submission that an entity is obliged to accept an otherwise preferential payment, not available to other creditors, if made by an associated entity of a debtor outside the scope of the preference regime and, so far as I have asked a rhetorical question as to the position of CMI, Mr Assaf will also have the opportunity to address that matter, in each case at the point that he wishes to make his substantive submissions as to the “tender” of payment to CMI in respect of the s 467 discretion. The observations I have made as to these matters are tentative and subject to those further submissions. I now return to my oral judgment, as I continued it after it was interrupted.

I recognise, however, that this issue was only raised at this stage in respect of the adjournment application and that Mr Assaf had indicated that it would be raised in connection with the s 467 discretion. I am here addressing it in the context of the affidavit evidence, and I will reserve the opportunity to Tahmoor to say what it wishes to say in respect to that matter, if it is pressed in respect of the s 467 discretion. I note, at this point, that it seems to me that there is simply not so strong a case in respect of the unreasonableness of any rejection of a third party payment, in respect of the amount claimed by CMI, to support the shorter adjournment application on that basis. I return to that question below.

Tahmoor also reads the affidavit dated 9 February 2026 of Mr Brereton, one of the deed administrators of LPMA, who refers to the potential benefits of completion of the DOCA and addresses LPMA’s funding arrangements, including its arrangements with a third party, Oaktree Capital. Mr Brereton there observes that:

I will assume, without deciding, that there may well be a loss of value in a liquidation, although I recognise that Mr Brereton may not be able to predict, at least with any degree of certainty, the actions that secured creditors or that GFG Alliance would take in a liquidation. As Mr Assaf fairly accepted in submissions, it is often the case that a liquidation will be less advantageous to creditors than an alternative. Nonetheless, a liquidation may well take place, in circumstances where the company is presumed to be insolvent and is not placed in voluntary administration, before a winding up application is heard. That result can, of course, be avoided by a company utilising the voluntary administration regime that the Act permits.

Mr Brereton in turn addresses the market testing and sale process which he fairly indicates would not reach the point that binding offers would be received until April 2026, well after the one-month adjournment would expire, and which, as Mr Hynes indicated in submissions, would not likely reach completion until June 2026 at the earliest, if a local rather than a foreign purchaser was involved. Mr Brereton in turn addressed the view that it was in the best interests of Tahmoor's creditors to allow the market testing and sale process to be carried to completion. Again, I assume that is possible, but that would be a matter that would be primarily relevant in respect of the exercise of the discretion under s 467 of the Act, when it would be weighed against the importance of prompt determination of winding up applications and the case law dealing with that discretion.

Tahmoor also tendered, although I was not taken to in any detail, the administrator's report to creditors dated 1 December 2025.

CMI in turn reads the affidavit dated 9 February 2026 of its solicitor, Mr Maguire, who referred to CMI's role, by virtue of the Workers Compensation Act 1987 (NSW) and the Coal Industry Act 2001 (NSW), in providing workers compensation insurance cover in relation to workers engaged in the coal industry in New South Wales and its obligation to provide that cover notwithstanding any non-payment of associated premiums. He addressed the quarterly payments that were due to CMI in respect of the provision of that cover. By a further affidavit dated 9 February 2026, Mr Barnicoat referred to other debts which had not been claimed in the creditor’s statutory demand which were owed to CMI and unpaid by Tahmoor.

CMI also tendered (Ex CMI1) the financial statements and reports of Tahmoor for the year ended 30 June 2024. I have addressed the content of those reports in an earlier judgment, in dealing with Tahmoor’s objection to tender of those reports. As I there noted, the reports deal with events after the end of the 2024 financial year and up to the date on which they were executed, 23 October 2025. They refer, inter alia, to the commencement of these proceedings and to the fact that creditors with a total of $17.4 million in unpaid balances have joined in the winding up proceedings, including presumably CMI and supporting creditors, although I recognise that some of those supporting creditors have now been paid out in the course of these proceedings. That report also indicates that, as of the date of the financial statements, 23 October 2025, Tahmoor had received statutory demands and statement of claims from several creditors for total outstanding balances of $18.9 million, and was currently assessing the legal and financial implications of those demands in engaging with relevant creditors to resolve the matters. Plainly, that engagement has not been completed as at the hearing today, given the number of supporting creditors who have appeared.

The directors' declaration in turn indicates a belief that there are reasonable grounds that Tahmoor was able to pay its debts as and when they became due and payable, subject to the uncertainties that are material as set out in note 1.3 "Going concern". Note 1.3 "Going concern" in turn addressed a number of matters, at some length, in respect of that view, and identified the key assumptions used in the cashflow forecast and the uncertainties attached to their achievement. Those financial statements also addressed issues going to the ability of the group to continue as a going concern, noting that the ability was materially uncertain due to the dependence on several matters, which were largely not addressed in the evidence. Those included, for example, full restart of coal mining operations in January 2026, which the evidence suggests has not occurred.

I turn now to the adjournment applications, noting that the evidence has gone widely in that regard. Mr Assaf relied on very detailed written submissions in respect of the application, and he also advanced very detailed oral submissions. Mr Hynes made brief oral submissions, and it has not been necessary to hear from Mr Gee in respect of the adjournment application. Mr Assaf there addressed the procedural history of the matter, including the previous adjournments of the winding up application, and noted that creditors, whose debts appear to have totalled the relatively small amount of $120,000 have withdrawn as supporting creditors, where their debts have been paid since the proceedings commenced. Mr Assaf there refers to Tahmoor's funding arrangements, and, consistent with the affidavit evidence, notes that funds have been utilised to make regular payments to "key contractors and suppliers." I have referred above to the implication that other, non-key contractors and suppliers, have not been paid. Mr Assaf in turn addresses the position in respect of funding by a secured creditor, Oaktree, and addresses conditions precedent to tranches of the Oaktree facility, which it is hoped the DOCA process in respect of LPMA may assist in satisfying. Mr Assaf in turn addresses the proposed sales process under the DOCA, and the suggested consequences if the DOCA and sales process is "not permitted" to proceed, because a liquidation intervenes. That submission is intended to demonstrate, and I will assume that it does demonstrate, that there would be adverse consequences of a winding up order, at least by comparison with the kind of ordered restructuring that might have occurred if the DOCA had been entered into by LPMA, and in the previous period, a voluntary administrator had been appointed to Tahmoor.

Mr Assaf submits, first, that a short adjournment provides a genuine opportunity for a restructuring outcome to be “advanced”. It seems to me that that submission is put in a balanced way. It is plain enough that the adjournment of a month that is sought would allow the restructuring to go some way, although it would be far from completion. The longer adjournment of three months that was originally sought would allow the restructuring to proceed further and it may still be on foot at the end of that period. However, the implication of the deed administrator's assessment that at least five months would be required to reach completion of the sales process, and possibly longer with a foreign purchaser, is that ultimately, the Court would be required to adjourn the winding up proceedings for up to another five months in order to allow a prospect of a restructuring of LPMA to be achieved. There is no suggestion that, for example, CMI would be paid the continuing workers compensation insurance premiums that fall due within that five-month period and no evidence that addresses the position of other creditors which Tahmoor does not regard as “key contractors and suppliers” during that period.

Mr Assaf recognises that the Court must take into account the overriding purpose of s 56 of the CPA in that respect and recognises that the courts have recognised the potential prejudice to creditors and other members of the public in granting adjournments of winding up applications. He refers, for example, to my observations in Re V & M Davidovic Pty Ltd (recs and mgrs apptd) [2012] NSWSC 1598 (“Davidovic “) in that respect. He submits that the adjournments sought by Tahmoor will not be prejudicial to CMI because Tahmoor is in the process of paying into Court the balance of the full amount claimed in the statutory demand. I pause to note that, at least by reference to the solicitors' correspondence, that submission is inaccurate. Tahmoor is not in the process of paying into Court the balance of the full amount, and if it were, a question of whether that amount would potentially be a preference would arise. The correspondence suggests that, instead, another company associated with its controllers are is in the process of paying the amount to ANZ Bank, and then into Court. I have noted above the likelihood that that structure seeks to avoid the preference regime, although I have reserved the opportunity to Mr Assaf to make further submissions in that respect.

Mr Assaf in turn submits that the systemic and community prejudice which I noted in Davidovic is attenuated here. I do not accept that submission where there is evidence that those who Tahmoor considers are “key contractors and suppliers” are being paid, but the evidence does not address the position of creditors more widely; and the number of supporting creditors here present suggests that their claims have not been met.

Mr Assaf submits that there is a substantial prejudice to Tahmoor, its employees and the general body of creditors if an adjournment is refused, and I accept that that matter has greater significance here that it would have in a company that had fewer employees and fewer creditors. Nonetheless, the difficulty here is that, at least so far as a creditor's statutory demand has been served and not set aside and no evidence as to solvency has been led, there is an unrebutted presumption of insolvency of the kind that was identified by the High Court of Australia in Australian Securities & Investments Commission v Lanepoint Enterprises Pty Ltd [2011] 244 CLR 1; [2011] HCA 18 at [28].

No voluntary administrator has been appointed and there is no independent management of Tahmoor of the kind that would arise from the appointment of a voluntary administrator. Ordinarily, the position of a company continuing to trade while a presumption of insolvency exists and has not been rebutted, whether on a care or maintenance or limited basis, raises issues of concern to creditors (who do not fall within the category of “key contractors and suppliers” which the evidence indicates are paid) and to the community generally. It is for that reason, among others, that companies that are insolvent or likely to become insolvent are allowed the opportunity to appoint a voluntary administrator which has here not been taken up by Tahmoor.

Mr Assaf in turn addresses the exercise of a discretion under s 467 of the Act, which he seeks to invoke in respect of the adjournment application while reserving the opportunity to put the submission that the winding up order should be deferred or not made if it would otherwise be made. I bear in mind the possibility that the Court could exercise a discretion in Tahmoor’s favour under that section and the fact that Tahmoor would rely on the payment to be made into Court in respect of that application which is not yet complete. It seems to me that that matter does not strongly support an adjournment for the shorter or for the longer period because the Court can have regard to the matters relevant to s 467 of the Act in determining whether a winding up order should be made, and there is no reason that the Court cannot determine that question on the basis that Tahmoor has indicated that a payment will be made by a company associated with its controllers into Court in the manner that I have noted above.

In oral submissions, Mr Assaf, in turn, submits that there are several reasons why the Court should adjourn for the shorter or longer period. The first is to permit payment into Court tomorrow, but it seems to me that the Court can address the s 467 discretion on the basis that that payment is proposed; and if it were otherwise likely to defer or decline a winding up order, could allow that payment to be perfected as a condition of doing so. Second, Mr Assaf submits that a winding up order will destroy a pathway to a restructuring of LPMA. I accept that submission may be put in respect of s 467 of the Act, although, I have noted that it will need to be balanced against the criteria applicable under that section.

It seems to me that the adjournment of a month that is sought will not advance the position of a restructuring where at least several months to June 2026 would be required; and the longer adjournment which would ultimately be required would be inconsistent with the legislative intention reflected in s 459R of the Act.

Next, Mr Assaf submits that it is desirable that Tahmoor should be permitted to continue on a limited basis in order, at least, to pay entitlements of employees. I bear that matter in mind but, again, an adjournment for a month is only a step towards that result where, ultimately, an adjournment of several months would be required and that would need to be balanced against the risk that other creditors (who do not fall within the category of creditors who are regarded by Tahmoor as “key contractors and suppliers” which are being paid) would not have that advantage.

Mr Assaf also advances the submission that the decision by CMI to refuse the tender of the amount owed to it was unreasonable. That would depend on the question of the structure of the payment, a matter as to which I have noted issues above and reserved the opportunity to Mr Assaf to address them in respect of any s 467 application. I also noted above that the evidence to which I have been taken does not suggest that there is any regime in place for payment of the amounts that would fall due to CMI during the adjournment period.

Mr Assaf in turn suggests that the balance of prejudice favours an adjournment, implicitly on the basis that the adjournment will leave the restructuring open. I accept that the adjournment for a month would leave the restructuring open, but it would only allow the restructuring to complete if it were extended for several months further, as I have noted above, and I have pointed to the inconsistency with s 459R of the Act in that respect.

For these reasons, I am not satisfied that, having regard to the criteria in s 56–58 of the CPA or the legislative policy arising under s 459R of the Act, the shorter or longer adjournment that is sought should be granted. I will, however, hear counsel as to whether the Court should now sit on, which it is able to do, in order to determine the winding up application; or whether the more convenient course will be to adjourn the matter until mid tomorrow to deal with the question of whether the presumption of insolvency has been established or rebutted and with submissions under s 467 of the Act, which have been partly addressed but, possibly, not completed in the course of the hearing today.

As I noted above, by Originating Process filed on 6 August 2025, CMI applied for the winding up of Tahmoor. The Court allowed two opportunities for Tahmoor to lead expert evidence of its solvency, but it did not do so. When the matter reached hearing yesterday, Tahmoor sought an adjournment of the application, for a shorter or longer period, on alternative bases. I declined to adjourn the winding up application but, when the hearing had completed late yesterday afternoon, with the consent of all parties, adjourned the matter to today. Plainly enough, that left open the possibility that, overnight, voluntary administrators might be appointed to Tahmoor. In the event, at a very late point, that has occurred.

By Interlocutory Process filed, by leave, today, Mr Hayes, one of the joint and several voluntary administrators now appointed to Tahmoor, applies for a short adjournment of the winding up application for a period of one week. It should immediately be recognised that this is a different application from the application I declined yesterday, because it has been brought on the basis that the voluntary administrators (who I will assume, for today’s application, are sufficiently independent) have now been appointed to Tahmoor and the conduct of the company's affairs is now under the control of its voluntary administrators and not its previous management.

The voluntary administrators read Mr Hayes’ affidavit dated 10 January 2026. I recognise that only a short time has plainly been available to them to prepare that affidavit since their appointment last night. Mr Hayes points to his professional experience, and I recognise that he has practised in the insolvency area for many years and has significant experience of insolvency administrations, including voluntary administrations. Mr Hayes refers to previous contacts, in April 2025, with the then adviser to the controllers of Tahmoor in relation to his possible appointment as voluntary administrator of LPMA, although he was not appointed to that role. Mr Hayes does not there outline the content of the approximately ten meetings he then had with that adviser, although I recognise that he will be required to do so in his Declaration of Independence, Relevant Relationships and Indemnities in respect of his appointment, and he will also likely need to do so in any further evidence led in any application for a further adjournment of the winding up in order to substantiate the proposition that he is, in fact, independent of Tahmoor and its controllers.

Mr Hayes refers to the entry into a funding agreement (“Funding Agreement”) with Tahmoor and Clydesdale Engineering Ltd, a company which appears to be connected with the controllers of Tahmoor. He addresses the terms of that Funding Agreement, which contemplate the availability of a large amount of funding for the voluntary administration, and he notes that some part of that funding has been made available. No application has been made before me under the s 447A of the Act in respect of that Funding Agreement and it is not necessary to engage in any review of its detailed terms today, beyond noting that Mr Hayes is funded for the early work of a voluntary administration.

Mr Hayes, in turn, sets out what he has done since the voluntary administrators’ appointment last night, although there was plainly limited time available for that work. He also addresses the objectives of a voluntary administration, and notes that the funding offered to the voluntary administrators would permit them to explore steps that may maximise the chances of the company, or as much of its business as possible, continuing in existence, consistent with the objectives of the voluntary administration regime. Mr Hayes also expresses the view that:

There is nothing implausible about that proposition (I interpolate, if its premise is correct), where funded voluntary administrators could continue the care and maintenance, and conduct a wider marketing campaign, which would likely not be available to an unfunded liquidator. However, I should add to my oral judgment that the correctness of the premise that the voluntary administration will be funded up to the amount stated in the Funding Agreement will likely need to be considered if the voluntary administrators seek a further adjournment of the winding up. By email dated 12 February 2026, my Associate advised the parties that I would seek their assistance as to any evidence as to the robustness of the funding arrangements for the voluntary administration at that point.

Mr Hayes in turn notes that:

There was one notable omission from that observation, which was subsequently addressed by oral evidence of Mr Hayes when I drew it to counsels' attention. Plainly enough, the voluntary administrators cannot properly assume that a voluntary administration should complete by a recapitalisation process rather than transitioning to a liquidation, where that requires a comparison of the outcomes for creditors from the two alternatives. The result of that comparison might of course differ if a liquidator were funded, and that comparison would also need to have regard to the recoveries that may be available to a liquidator, by way of matters such as insolvent trading claims or preference claims, which have not yet been investigated by the voluntary administrators in the short time since they were appointed.

I would not assume that Mr Hayes, given his experience, has failed to recognise the need to compare those alternatives. His oral evidence was that his work in the first week of the voluntary administration would be directed to doing so, although he fairly recognised that it was unlikely that the administrators would, within a week, have reached any particularly advanced views as to the availability of claims against third parties in a liquidation. Obviously enough, where the voluntary administrators seek an adjournment for a week, one would expect that at the end of that week they will be able to disclose the investigations that they have in fact made to identify any claims that would be available in liquidation, by way of insolvent trading or otherwise; and what further investigations they propose to undertake, although I recognise that a week is a relatively limited time to advance that matter.

As I noted above, Mr Hayes elaborated on his affidavit evidence in additional oral evidence and he was in turn cross-examined by Mr Gee who appears for CMI. Mr Gee drew Mr Hayes’ attention to the financial statements and reports of Tahmoor for the year ended 30 June 2024 (Ex CMI1), which had only recently been signed by its directors, and Mr Hayes had not yet had access to that document. That is not a matter for criticism of Mr Hayes, where the voluntary administrators have only just been appointed. I bear in mind that, on one view, the matters recorded in that document may raise an inference of Tahmoor's insolvency, but the voluntary administration regime is, of course, available to companies that are in fact insolvent, or likely to become insolvent, and that is no reason why the voluntary administration regime would not be available here.

Many cases have considered the circumstances in which a winding up should be adjourned, by reason of the appointment of a voluntary administrator. The voluntary administrators bring the adjournment application, appropriately, by reference to ss 440A and 467 of the Act. Section 440A(2) of the Act relevantly provides that:

The application is also brought, in the alternative, under s 467 of the Act, which provides that, on hearing a winding up application, the Court may relevantly adjourn the hearing conditionally or unconditionally. Those two jurisdictions to adjourn a winding up application coexist: Deputy Commissioner of Taxation v Bradley Keeling Management Pty Ltd (2003) 44 ACSR 377; [2003] NSWSC 47 at [14] (“Bradley Keeling”); Inglewood Farms Pty Ltd v AM No 1 Pty Ltd (admins apptd) [2012] NSWSC 564 at [2] (“Inglewood Farms”).

The case law has consistently recognised several relevant factors to an adjournment application of the kind now brought by the voluntary administrators, including the length of the proposed adjournment, which is here very short; and whether there is persuasive evidence that creditors’ interests will be served by that course, for example, because assets would produce a larger dividend to creditors if realised under a voluntary administration rather than a winding up. The case law has also recognised that less evidence will be needed to justify a short adjournment at an earlier point in an administration than might be required to support a longer adjournment, or an adjournment once the administration has proceeded further: Bradley Keeling; Inglewood Farms at [4].

Mr Sulan, who appears for the voluntary administrators, also draws attention to my decision in Re Brew Still Pty Ltd (admin apptd) [2023] NSWSC 256. I there referred to the observations of Griffiths J in Deputy Commissioner of Taxation v Fyna Constructions (Hire & Sales) Pty Ltd (admins apptd) [2019] FCA 578, where his Honour undertook a detailed review of the matters relevant to an adjournment application and recognised that, among other things, the voluntary administrator carries the onus of persuading the Court that it should attain the relevant satisfaction under s 440A(2); and the question whether the administration should continue is closely related to the question whether creditors could hope to benefit more financially from an administration as opposed to a winding up, although plainly, less evidence as to that matter would be available at a very early point in the voluntary administration.

The case law has also recognised that the lateness of the appointment of a voluntary administrator may be a relevant factor, particularly where that appointment is made shortly before, or, here, during, the hearing of a winding up application: Re Offshore and Ocean Engineering [2012] NSWSC 1296 at [15], leave to appeal refused in Offshore and Ocean Engineering Pty Ltd (recs and mgrs. apptd) (admin apptd) v Greenwich Contractors Pty Ltd [2012] NSWCA 371; Re Australian Tailings Group Pty Ltd [2020] NSWSC 1543 at [6]. In particular, the Court may treat an application for adjournment of a winding up where a voluntary administrator is appointed on the eve of a hearing, or here, in the course of the hearing with a degree of scepticism, particularly where it involves a reversal of a company's previous position that it is solvent, or at least that it does not acknowledge that it is insolvent or likely to become insolvent. The Courts have also recognised the fact that the lateness of an appointment may deprive the administrator of any real understanding of the company's affairs.

Nonetheless, the statutory test set by s 440A of the Act and the matters by which the Court is likely to exercise its jurisdiction under s 467 of the Act are directed to the interests of creditors; and it is possible that, in a particular case, the appointment of a voluntary administrator at a late stage will be in the interest of creditors. It seems to me that, here, that proposition is plausible for the reasons identified by Mr Hayes in his affidavit, to which I have referred above, including that a funded voluntary administration may have the capacity to undertake a more effective sale process in a manner that an unfunded liquidation would not. Rightly, Mr Hayes does not express that view as a concluded view, where he has only been in office for a short time, but I recognise that it is consistent with a position that has also been put by the deed administrators of LPMA, as parties appearing by leave in this application.

I recognise that, obviously enough, this application has been made late. Nonetheless, it seems to me that it is in the interest of Tahmoor’s creditors to adjourn the winding up for the relatively short period that is sought, rather than immediately to proceed to hear and determine the winding up application today. The advantages of that course are, obviously enough, namely that it will allow the voluntary administrators the opportunity to undertake further investigations, directed not only to the possibility of a sale process of the mine or assets of Tahmoor but also, as I have noted above, to the likely recoveries of a liquidation; it will at least preserve the opportunity of continuing employment for employees and of the sale of the mine on the basis that it is under care and management rather than closed for lack of funding; and it will not exclude the possibility that, in a week's time, or a longer period, the Court will ultimately conclude that the winding up should not be further adjourned and should be determined. I bear in mind, in reaching that view, that here the adjournment sought is primarily based, not upon the outcome of the investigations that will be undertaken by the voluntary administrators because that is not yet known, but upon the desirability of allowing them to undertake those investigations and leaving options available where those options may be for the benefit of creditors generally. I bear in mind, in that respect, that the continuance of a voluntary administration, at least for a short period, will also allow the benefit of the moratorium, which may ultimately assist in an orderly realisation of Tahmoor's assets.

For these reasons, although I recognise the lateness of the appointment of the voluntary administrators and this application, and I also recognise that CMI would, but for the appointment of voluntary administrators, have had an expectation that the winding up be heard and determined today, I am satisfied that I should make the order sought by the voluntary administrators, that the winding up be adjourned for about a week. I will hear counsel as to the most convenient time to relist the matter to consider whether it should then be further adjourned, or whether the winding up should then be determined.