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[2026] NSWSC 218
General information, not legal advice.
Supreme Court of NSW
2026-03-06
Black J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: In the matter of Tahmoor Coal Pty Ltd (admins apptd) [2026] NSWSC 218
Hearing dates: 5 and 6 March 2026
Date of orders: 6 March 2026
Decision date: 06 March 2026
Jurisdiction: Equity - Corporations List
Before: Black J
Decision: The winding up application not be further adjourned and the company be wound up. Orders made approving term sheet and loan agreement in respect of the liquidation.
Catchwords: CORPORATIONS — winding up — practice and procedure — application to adjourn winding up application under Corporations Act 2001 (Cth) s 440A(2) — whether further adjournment in creditors’ interest
CORPORATIONS — winding up — failure to comply with creditor’s statutory demand — presumption of insolvency — where no solvency evidence led by company
CORPORATIONS – winding up – application for approval of entry into funding agreement – whether approval of entry into funding agreement is in best interests of creditors
Legislation Cited: - Civil Procedure Act 2005 (NSW), 56–58
- Corporations Act 2001 (Cth) ss 440A, 467, 477(2B)
- Evidence Act 1995 (NSW) s 136
- Insolvency Practice Schedule (Corporations), s 90-15
Cases Cited: - Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd (recs and mgrs apptd) (2011) 244 CLR 1; [2011] HCA 18
- Deputy Cmr of Taxation v Fyna Constructions (Hire and Sales) Pty Ltd (admins apptd) [2019] FCA 578
- Offshore and Ocean Engineering v Greenwich Contractors Pty Ltd [2012] NSWCA 371
- Re Australian Tailings Group Pty Ltd [2020] NSWSC 1543
- Re Brew Still Pty Ltd (admin apptd) [2023] NSWSC 256
- Re Glenvine Pty Ltd [2020] NSWSC 642
- Re Hawkesbury House Pty Ltd (in liq) [2019] NSWSC 1673
- Re HIH Insurance Ltd [2004] NSWSC 5
- Re McDermott & Potts in their capacities as liquidators of Lonnex Pty Ltd (in liq) [2019] VSCA 23
- Re Offshore and Ocean Engineering Pty Ltd [2012] NSWSC 1296
- Re 777 389 301 44 Pty Ltd (in liq) (formerly Commercial Indemnity Pty Ltd) [2017] NSWSC 452
Category: Principal judgment
Parties: Proceedings 2025/300503
Coal Mines Insurance Pty Ltd (Plaintiff)
Tahmoor Coal Pty Ltd (admins apptd) (Defendant)
Proceedings 2026/62876
Joseph Hayes and Christopher Johnson in their capacity as joint and several administrators of Tahmoor Coal Pty Ltd (admins apptd) (First Plaintiffs)
Tahmoor Coal Pty Ltd (admins apptd) (Second Plaintiff)
Representation: Counsel:
Proceedings 2025/300503
C Withers SC/G Gee (Plaintiff)
D Sulan SC/K Dyon (Defendant)
J Hynes (Deed Administrator of Liberty Primary Metals Australia) (5 March 2026)
V Whittaker SC/J Williams (Proposed Liquidators)
Several supporting creditors appearing
Proceedings 2026/62876
D Sulan SC/K Dyon (Plaintiffs)
C Withers SC/G Gee (Coal Mines Insurance Pty Ltd) (Interested Party)
Solicitors:
Proceedings 2025/300503
Hicksons (Plaintiff)
Jones Day (Defendant)
Bird & Bird (Deed Administrator of Liberty Primary Metals Australia) (5 March 2026)
Ashurst Australia (Proposed Liquidators)
Several supporting creditors appearing
Proceedings 2026/62876
Jones Day (Plaintiffs)
Hicksons (Coal Mines Insurance Pty Ltd) (Interested Party)
File Number(s): 2025/300503
2026/62876
By Originating Process filed on 6 August 2025, the Plaintiff, Coal Mines Insurance Pty Ltd ("CMI") applies to wind up Tahmoor Coal Pty Ltd ("Tahmoor") in insolvency. That winding up application was previously adjourned on several occasions, on the basis of representations by Tahmoor that it would seek to lead evidence as to its solvency, which was never led. On 9 February 2025, the matter was listed for hearing, and Tahmoor brought a further adjournment application, which was declined. The matter was then adjourned to be heard on 10 February 2025. After that adjournment, on 9 February 2026, and notwithstanding Tahmoor's previous claims of solvency, its directors appointed voluntary administrators on the basis, required by the statutory regime, that it was insolvent or likely to become insolvent.
The voluntary administrators, Messrs Hayes and Johnson, who had just been appointed, then properly brought an application, when the matter was to continue on 10 February 2026, further to adjourn the winding up to allow them to undertake further investigations. That adjournment was initially allowed for a relatively short period, until 18 February 2026. The matter was again adjourned on that date, on the application of the voluntary administrators and by consent of CMI; and listed for hearing on 5 March 2026.
A contested application for a further adjournment of the winding up was then heard on 5 March 2026 and continuing on 6 March 2026. That application raises questions as to whether, first, the winding up should be adjourned under s 467 of the Corporations Act 2001 (Cth) ("Act") or in the Court's inherent control over its own process, or whether the winding up should be adjourned under s 440A(2) of the Act, which relevantly 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 interest of the company's creditors for the company to continue under administration rather than be wound up."
I should first address the applicable principles, which are well established and were uncontroversial in the application. First, s 467 of the Act provides that, in hearing a winding up application, the Court may take certain steps, which include adjourning the hearing. Obviously enough, that section overlaps with the Court's jurisdiction to adjourn any application which it hears, which will be exercised in accordance with ss 56–58 of the Civil Procedure Act 2005 (NSW) (“CPA”) so as to promote the just, quick and cheap determination of the real issues in dispute in the proceedings. Mr Sulan, with whom Ms Dyon appears for the voluntary administrators, rightly points out that that jurisdiction is at large, and not confined by the specific matters identified in s 440A of the Act.
So far as s 440A of the Act is concerned, it is helpful to commence with the submissions made by Mr Sulan as to the applicable principles. He there notes that the Court must be satisfied that there is a "sufficient possibility, and not mere speculation" that the interest of creditors will be accommodated to a greater degree than would otherwise be the case in a winding up, in order to adjourn a winding up, referring to my decision in Re Australian Tailings Group Pty Ltd [2020] NSWSC 1543 at [5] and [7] (“Australian Tailings Group”). Mr Sulan also rightly points out that, if the Court reaches the relevant level of satisfaction, it must order the adjournment, which is not a matter of discretion: Re Glenvine Pty Ltd [2020] NSWSC 642 at [8].
I also have regard to my summary of the applicable principles in Australian Tailings Group at [5]ff, to which Mr Sulan referred. Mr Sulan also refers to the decision of Griffiths J in Deputy Cmr of Taxation v Fyna Constructions (Hire and Sales) Pty Ltd (admins apptd) [2019] FCA 578, and to my review of that decision in Re Brew Still Pty Ltd (admin apptd) [2023] NSWSC 256 at [19]ff, which noted several relevant factors. First, the defendant in a winding up application, or here the voluntary administrators as applicant, has the onus of persuading the Court that it should be satisfied of the matter specified in s 440A(2), namely, that it is in the interest of creditors of the company to continue in administration rather than be wound up. Second, that question is closely related to the question whether creditors could hope to benefit more financially from an administration rather than winding up. Third, persuasive evidence is required to allow the Court to be satisfied that there are assets that would produce a larger dividend or an accelerated dividend in an administration rather than a winding up. Fourth, it is relevant to take into account the extent to which the administrator had an opportunity to examine the affairs of the relevant companies. Plainly, the voluntary administrators are now significantly further advanced in this matter than they were when the winding up was first adjourned. Fifth, the principal inquiry under s 440A of the is whether the adjournment for the relevant period is in the creditors' interests, and the reference to creditors' interest is a reference to their interests in recovering the debt owed to them. Additionally, the views of primary external creditors as to their commercial interests should be given significant weight. I have drawn this summary from Mr Sulan's helpful submissions.
I now turn to the affidavit and other evidence which was comprehensive, and addressed the substantive issues between the parties, in respect of the assessment of the potential outcome of a voluntary administration on the one hand or a liquidation on the other.
The voluntary administrators read the affidavit dated 17 February 2026 of Mr Hayes, who is one of the voluntary administrators. He there referred to his experience, and I recognise that he is an insolvency practitioner with very substantial experience. He referred to his previous dealings with the GFG Alliance, which is the company group of which Tahmoor forms part, in respect of his potential appointment, initially, as a possible voluntary administrator to Liberty Primary Metals Australia Pty Ltd ("LPMA"), which did not proceed, and later his potential appointment as voluntary administrator of Tahmoor. He identified the background to Tahmoor and its operations, and recognised, as is common ground, that Tahmoor owns an underground coal mine at Tahmoor in the Southern Highlands region of New South Wales, the business of which was the production of hard coking coal for steelmaking. Importantly, Mr Hayes recognises that the Tahmoor mine has been on care and maintenance and not in active operation since February 2025, now for over a year.
Mr Hayes there addressed Tahmoor's pre-appointment financing arrangements, including dealings with Clydesdale Engineering Ltd ("Clydesdale"), which was party to a tripartite financing arrangement with Tahmoor and LPMA as at 31 July 2025. Mr Hayes there noted that Clydesdale claims that an amount of $202 million is owed by Tahmoor to Clydesdale pursuant to that arrangement, although he recognised that the quantum of that claim was subject to ongoing investigation. He noted that Clydesdale is an English company that is owned, at least 75% or more, by Mr Sanjeev Gupta. I will refer to Clydesdale's role as a funder of the voluntary administration below. Mr Hayes also referred to the entry into a secured facility with a third party, Oaktree Capital Management ("Oaktree") in around September 2025, although he noted that only a portion of the commitments under that facility were drawn down by Tahmoor. He also noted that that facility appeared to be secured against Tahmoor's assets. Mr Hayes there outlined the position in respect of other creditors of Tahmoor, which are substantial, including a very substantial amount owed to the New South Wales Government and substantial amounts owed to trade creditors. He also referred to the position in respect of Tahmoor's assets.
Mr Hayes also referred to the terms of a Funding Agreement (“Clydesdale Funding Agreement”) between Clydesdale, Tahmoor and the voluntary administrators for an amount of $40 million (or such higher amount as Clydesdale agrees) in respect of the voluntary administration. The Clydesdale Funding Agreement has since been amended to address terms that previously gave rise to concern, including a term which would have permitted Clydesdale to terminate it for convenience, and in effect, at will.
"I have discussed Clydesdale's publicly filed accounts with representatives of Clydesdale, including their financial advisors, and requested that Clydesdale confirm the sources of liquidity available to it to assist in meeting its obligations under the [Clydesdale] Funding Agreement. I have not received any response to those requests."
That matter was of some significance, because it is now common ground that a review of Clydesdale's balance sheet makes clear that Clydesdale does not itself have the capacity to provide the funding that it has committed to provide to the voluntary administrators under the Clydesdale Funding Agreement. Clydesdale is therefore dependent upon funding provided by third parties, presumably its associated companies, which are presently unidentified, to perform its obligations under that agreement. Properly, Mr Hayes has sought to identify the persons who would in fact place Clydesdale in a position to perform those obligations, but his evidence has indicated that his proper attempts to clarify that matter have achieved no success.
Mr Hayes also referred to the steps which he had taken to seek to clarify the circumstances in which Clydesdale's auditors resigned, and he noted that he had been provided with an oral explanation of that matter, but no written confirmation of that explanation from Clydesdale. Little may turn on whether that explanation is oral or in writing, and I give less weight to the status of Clydesdale's audit, or the fact that it no longer has auditors, than to the fact that it is plainly unable to perform its obligations under the Clydesdale Funding Agreement from its own resources and has not identified the other resources available to it to meet those obligations. Mr Hayes rightly recognised that he had then requested several amounts by way of further funding and that those amounts had been received. Mr Hayes recognised, also rightly, that that is a matter to be taken into account, but there is no suggestion that Mr Hayes assumes that the fact that amounts have been paid by Clydesdale in the past provides any warrant to assume that further amounts will be paid in the future.
Mr Hayes also again addressed the position in respect of creditors' claims against Tahmoor, and that matter is of particular significance. He noted that the view of Tahmoor's directors is that the total amount of creditors' claims against the company is $432 million dollars, obviously a very large amount, of which some $228 million or 53% is comprised of related party claims ($135 million or 59% of which are secured) and $204 million is comprised of claims of unrelated parties including secured creditors and employees. Mr Hayes there rightly noted that he has not yet adjudicated claims, but that the proofs of debt submitted in connection with the first creditors' meeting demonstrate that related party creditors have a substantial interest in the outcome of the administration. A second matter which emerges from that is the size of the claimed secured debts in respect of Tahmoor. The status of those securities, and whether they are liable to be set aside, is plainly a significant matter for the conduct of any voluntary administration or liquidation.
Mr Hayes also there updated his assessment of the benefits of a voluntary administration as compared to a liquidation and again expressed the view that a voluntary administration is preferable than an "immediate, uncontrolled liquidation" of Tahmoor. Mr Hayes noted that, at that point, he was not aware of a proposal for a funded liquidation of Tahmoor, but that position has since advanced. He there expressed the view that, importantly:
"Based on my investigations of [Tahmoor’s] affairs, my view is that it is in the best interests of [Tahmoor's] creditors for the winding up application to be further adjourned for eight weeks to allow the administrators to pursue an orderly, value maximising transaction with respect to [Tahmoor] and/or its assets in coordination with a reputable and experienced investment bank."
Mr Hayes also expressed the view that an expedited sale process would be achieved within an eight to ten week period. It is important to note the emphasis, there and elsewhere in Mr Hayes' affidavit, on the desirability of an adjournment for an eight-week period, which will become relevant to an assessment of the voluntary administrators' alternative application for an adjournment for a three-week period, which developed greater prominence in the course of the hearing.
It is also important to note that Mr Hayes there observed (at [55]) that:
"It is unlikely that I will be able to begin a credible sale process in circumstances where the continuation of the administration remains in question, as this will likely affect the confidence prospective buyers have in the sale process and their appetite to invest time and resources in a diligence process."
That matter is also significant, so far as the voluntary administrators’ alternative application is concerned.
Mr Hayes also there addressed a comparison of the estimated outcomes to creditors in a voluntary administration as compared to an immediate liquidation, although I have noted above that the position in that regard has continued to develop as the proceedings have continued.
Mr Hayes exhibited to that affidavit, inter alia, correspondence received from the solicitors acting for the Minister for Natural Resources and the Department of Primary Industries and Regional Development for the New South Wales Government, which raised the possibility that receivers would be appointed to the assets of Tahmoor by reason of a failure to pay mining royalties. That matter is of significance, and I return to it below, so far as it would have a potential impact upon the conduct of a sale process, whether within a voluntary administration or a liquidation. That exhibit also referred to a then debate between the voluntary administrators of Tahmoor and the deed administrators of LPMA as to how a sale process would proceed, and submissions were made as to that matter. However, it became apparent at the commencement of the hearing that LPMA, by its deed administrators, now accepts that a sale process should be conducted by the voluntary administrators of Tahmoor, and that issue has been substantially displaced.
By a further affidavit dated 4 March 2026, Mr Hayes addressed matters raised by an affidavit of Mr Fraser, the liquidator nominated for appointment by CMI, and expressed, in strong terms, his disagreement with aspects of Mr Fraser's approach. He referred, importantly, to Mr Fraser's reference to recovery actions that may be available to a liquidator, and went on to observe that:
"I have investigated and referred to these claims in detail in the report attached to my Third Affidavit. These claims I have investigated may be of considerable value, but the Administrators believe the sale and marketing process should be undertaken before the future of the company is determined so that the range of options available to provide for creditor recoveries are known with a degree of certainty that is not yet known to any party. As I have said in my prior evidence, once I have had further time to consider these claims, conducted a competitive bid process and assessed the range of options available for a transaction, I may well form the view that an asset sale (possibly through a DOCA) followed by liquidation and the pursuit of recovery actions provides the best outcome for creditors. If that is the case, I would pursue that course of action."
Several things should be noted about that observation. First, the proposition that it is likely that a sale process would be pursued before any substantial steps were taken in recovery actions seems to be plainly correct, and was properly accepted by Mr Fraser in cross examination. Second, it seems plain enough that Clydesdale does not share an expectation that the outcome of the voluntary administration is likely to be a DOCA followed by liquidation and the pursuit of recovery actions against Clydesdale. That inference can be drawn because, as a matter of commercial good sense, it is inconceivable that Clydesdale would advance some monies to date, and commit to advancing up to $40 million in total, so as to fund a voluntary administration leading to a DOCA which will lead to the pursuit of recovery proceedings against it and its associated entities. Mr Hayes does not address that obvious proposition in his evidence, but Mr Sulan ultimately accepted that that proposition was obvious in the course of his oral submissions. It is, of course, neither necessary nor appropriate to speculate as to Clydesdale's motives; but the fact that Clydesdale is acting in a manner which does not, on its face, contemplate that the outcome to which Mr Hayes refers will come to pass must raise some question as to the likelihood that that outcome will arise.
Third, with all respect to Mr Hayes, the proposition that, if he forms the view that an asset sale followed by liquidation and the pursuit of recovery actions provides the best outcome for creditors, he would pursue that course of action overlooks one obvious difficulty, namely that the voluntary administrators do not have control over the second creditors' meeting. I have already noted that, at least as matters stand, related parties would have the majority of votes by value, albeit not by number, at the second creditors' meeting. I accept that Mr Hayes would seek to take that course if he had the opportunity to do so and formed the view that it was the proper course. However, even if he makes a recommendation for that course, the majority of value of creditors that are related party creditors are not bound to accept that recommendation, and he may or may not have the opportunity to have a casting vote in that regard. There was, in the course of submissions, some discussion as to the manner in which votes would be cast at a second meeting of creditors. I do not consider it necessary to address that matter, because the history of litigation concerning second meetings of creditors in this Court demonstrates that there is room for parties with significant interests to influence the outcome of those meetings. While I do not assume that will occur here, it is a possibility which is not recognised in Mr Hayes' evidence that he would take that course of action if he considered it was the preferable course.
Mr Hayes also there addressed the continued funding of the administration, and I recognise that, to date, Clydesdale has not defaulted on its obligations to continue to fund the voluntary administration under the Clydesdale Funding Agreement.
"If liquidation occurs, a large number of people will lose their jobs. Those that will not lose their jobs also support the VA because of the impact the redundancies will have on the ability to maintain the mine and issues with restart."
Mr Davey also addressed the position in respect of the conduct of the mine over the last 12 months and expressed a view, admitted with a limiting order as to his understanding, as to the adverse impact of redundancies on the maintenance of the mine and as to the difficulty of recruiting an experienced workforce if redundancies now took place. Mr Davey also addressed the stress on employees, their families and the community arising from this matter. That evidence was also admitted with a limiting order under s 136 of the Evidence Act as his understanding, but I accept that stress is real and that the position in respect of significant redundancies will be significantly adverse for employees, their families and the community. That is a matter to which I will return and to which I have given substantial regard. Mr Davey also there addressed discussion with employees at a recent meeting, which underpins the views which he has expressed.
The voluntary administrators also tendered a letter from Clydesdale, indicating its support for an adjournment of the proceedings and its continued commitment to funding the voluntary administration. The voluntary administrators also drew attention to Oaktree’s support for the voluntary administration.
Turning now to the evidence led by CMI, it read the affidavit dated 18 February 2026 of its solicitor, Mr Maguire, in respect of an earlier application, which exhibited documents relating to Clydesdale, including financial information that indicated the limited assets of Clydesdale. By a second affidavit dated 4 March 2026, Mr Maguire addressed CMI’s position, including as to premiums payable by coal miners to CMI or other insurers, in respect of workers compensation insurance. That matter is plainly relevant to CMI's wish to pursue the winding up, where those premiums have not been paid. I also bear in mind the fact that multiple supporting creditors have, at various times, appeared in the proceedings; some have now withdrawn; and some have advised the Court of their reasons for doing so, including the continuing costs incurred and the number of other supporting creditors who have appeared. Mr Maguire also there referred to correspondence indicating differences of view between the deed administrators of LPMA and the voluntary administrators of Tahmoor in respect of the way in which a sale process would be conducted. That would have been a significant matter had it subsisted, but it has now largely been displaced, as I noted above.
By an affidavit dated 4 March 2026, Mr Fraser, who is, as I noted above, one of CMI’s proposed nominees (with Mr Henry) as liquidators for Tahmoor, addressed his extensive professional experience, including in the conduct of coal mines; the experience of his firm;, and the approach which was taken by the voluntary administrators in respect of the voluntary administration. Helpfully, Mr Fraser acknowledged several matters with which he agreed with the voluntary administrators, including that a funded administration of Tahmoor would be superior to an unfunded liquidation, although I have noted above that there have since been developments in the funding of the liquidation. He also accepted that a cessation of care and maintenance operations in an uncontrolled manner would have adverse consequences, although that risk appears to have now been displaced. He agreed that a sale process of some eight to ten weeks was appropriate given Tahmoor's present position, rightly recognising the possibility that delays may arise in respect of mining lease transfers and any need for approval from the Australian Competition and Consumer Commission (“ACCC”) or the Foreign Investment Review Board (“FIRB”).
By an affidavit dated 6 March 2026, Mr Fraser again addressed, in detail, the position in respect of the proposed funding of the liquidation. He referred to correspondence between the solicitors for Keyview and the nominees as liquidator, which confirmed agreement as to the terms of the Keyview Loan Agreement and the associated General Security Deed. He also addressed, at length, the conditions precedent to funding, in both a first and second tranche, and pointed to the extent to which those conditions precedent had already been satisfied or would be satisfied by steps that are shortly to be taken. Mr Sulan, in submissions, had drawn attention to one step which was potentially difficult, namely an application to the Court seeking directions under s 90-15 of the Insolvency Practice Schedule (Corporations) in respect of the liquidator's lien, which needed to be satisfied prior to the second and larger tranche of funding under the Keyview Loan Agreement. That condition precedent has since been amended to require only that the application be brought, and not that it succeed, and that is plainly a significant difference.
I have also been taken to, and have had careful regard to, the terms of the Keyview Loan Agreement, which I will not set out at length, where this is already a lengthy judgment. I have also had regard to further correspondence between the solicitors and I note, in particular, an email dated 6 March 2026 from the solicitors for Keyview who have confirmed that its custodian has now executed the relevant agreements, although on terms that it will not release those agreements until CMI's nominees have been appointed as liquidators, if that occurs as a result of these applications.
I have the benefit of very detailed and helpful submissions by both parties, and I mean no disrespect to the parties in addressing those submissions relatively briefly, before turning to a determination of the adjournment application.
Mr Sulan, as I noted above, provided a helpful overview of the relevant principles, and addressed the position in respect of the funding that the voluntary administrators had obtained from Clydesdale. His written submissions focused on the voluntary administrators' application for the longer adjournment, where the application for a shorter adjournment arose in the hearing, and that matter was in turn addressed in oral submissions. Mr Sulan emphasised, both in his written submissions and in oral submissions, the advantage of flexibility in the voluntary administration process, and rightly pointed to the fact that at least some external creditors, including Clydesdale, Oaktree and the MEU, on behalf of relevant employees, support the continuance of the voluntary administration.
Mr Withers, in written submissions, in turn addressed the issues as to whether the Clydesdale Funding Agreement was robust, a matter which I have noted above. He addressed the dispute that then existed as to the conduct of the sale process, which has now been displaced by the fact that the deed administrators of LPMA accept that the voluntary administrators for Tahmoor should conduct that process. He pointed to the development that the potential liquidators were funded; and addressed aspects of the comparison between the outcome of a liquidation and a voluntary administration to which I have regard and, importantly, the risk that the voluntary administration would devolve into an unfunded liquidation if Clydesdale at any point ceased to provide funding to the voluntary administrators, because of the issues as to the robustness of its funding to which I have referred above.
With this background, which I appreciate has been lengthy, I now turn to a determination of the application. I will first deal with the voluntary administrators' application to adjourn the winding up under s 467 of the Act or on case management grounds in the court's inherent jurisdiction and under the CPA, whether to 28 April 2026 (as originally sought) or to 26 March 2026 (an alternative raised in the course of the hearing, as I noted above). I am comfortably satisfied that I should not adjourn the hearing of the winding up on that basis, where it seems to me that it would be plainly inconsistent with the just, quick and cheap resolution of the real issues in dispute in the proceedings to do so. The case law has long recognised that delay is generally corrosive of the administration of justice, and that is particularly the case here, where costs in the legal proceedings and delay to the sale process would potentially erode the return to creditors. This case has been very fully argued before me, by some seven or so counsel including several senior counsel, instructed by likely more than seven very competent solicitors, over a day and a half, with multiple supporting creditors attending in person and by telephone, and follows two previous adjournment applications. While deciding it may be difficult, a decision should not be further delayed on case management grounds alone. I emphasise that that does not exclude the possibility that the proper decision will in fact be a further deferral of the winding up, if the voluntary administrators do establish that the interests of creditors will be served by that course, in accordance with s 440A of the and the principles to which I have referred above.
I should note something as to the cost of this application, where I express only a preliminary view where I have not yet heard from the parties. In some cases, including cases which I have decided, voluntary administrators who have brought applications of this kind, in respect of the last-minute adjournment of a winding up application, have been exposed to cost orders against them personally in respect of those applications. Subject to hearing from the parties, it seems to me that this is far from such a case. I have noted above the difficulty of this application, where the exercise of discretion is finely balanced, and there are real adverse consequences of the result that I have reached. My preliminary view is that the voluntary administrators plainly had a reasonable basis for bringing this application, and pursuing it, particularly where the liquidators' funding only emerged in a final form on the second day of this hearing, 6 March 2026. The issues raised by the voluntary administrators were real and substantial, including the impact of the liquidation on employees, and their case was put in a measured and efficient way.
My preliminary view, subject to hearing from the parties, is that the voluntary administrators’ costs of this application, which may well be substantial given its complexity, should be costs of the voluntary administration. I will give any party who wishes to submit to the contrary an opportunity to be heard. CMI did not seek to be heard further as to this matter.
As I noted above, by Originating Process filed on 6 August 2025, CMI applies for the winding up of Tahmoor. This application is reached after an extended process, where the Court has dealt with applications to adjourn the winding up application, and has today declined to further adjourn that application. I also note that, on 10 February 2026, the Court extended the time for determination of the winding up proceedings to 31 March 2026.
Mr Gee, who appears for CMI in this aspect of the proceedings, draws attention to the Originating Process filed by CMI on 6 August 2025, which annexed a creditor’s statutory demand (“Demand”) for payment of debt in the amount of $4,984,242.37 referable to insurance premiums payable by Tahmoor. That Originating Process also annexed the affidavit of debt dated 6 June 2025 of Mr Barnicoat, the Chief Financial Officer of CMI’s parent company, in support of the Demand, and an affidavit of service of Mr Chowdhury affirmed 4 August 2025 relating to service of the Demand on Tahmoor. By an affidavit dated 2 September 2025, Mr Lynch referred to service of the winding up proceedings, although he made an error in the date of service, which was subsequently corrected by a further affidavit. By an affidavit dated 2 September 2025, Mr Maguire, a solicitor acting for CMI, proved notification of the application to ASIC and publication of the application. By an affidavit dated 5 February 2026, Mr Lynch corrected the date of service noted in his earlier affidavit in respect of the Originating Process, and there is no suggestion by Tahmoor that any issue arises from that matter. A consent of liquidator of Messrs Fraser and Henry is in evidence.
By an affidavit dated 9 February 2026, Mr Maguire outlined CMI’s role in respect of the provision of insurance in the coal industry. By an affidavit of debt dated 4 March 2026, Mr Barnicoat proved that the substantial part of the debt claimed in the Demand has not been paid by Tahmoor, although it was reduced in part by an applicable hindsight credit. That matter did not extinguish CMI's standing as creditor to bring this application, where the substantial part of the debt remained unpaid. Mr Barnicoat also addressed, although I need not address, further debts which had since fallen due to CMI. By an affidavit dated 4 March 2026, Mr Maguire in turn annexed a company search, which indicated that no winding up order had been made, no other winding up applications were pending, and no small business restructuring practitioner had been appointed to Tahmoor. There were, of course, multiple supporting creditors in the application.
The principles which apply to an application of this kind are well established. A presumption of insolvency arises from Tahmoor's non-compliance with the Demand. The effect of that presumption was discussed by the High Court of Australia in Australian Securities and Investments Commission v Lanepoint Enterprises Pty Ltd (recs and mgrs. apptd) (2011) 244 CLR 1; [2011] HCA 18 at [28]. That presumption of insolvency is sufficient to support the winding up application, absent proof of Tahmoor's solvency. Tahmoor had foreshadowed that it would lead evidence of solvency but did not do so despite opportunities to do so, and the presumption of solvency has not been displaced. I also note that the voluntary administrators that were appointed to Tahmoor have formed the view that Tahmoor had been insolvent for a substantial period.
By Interlocutory Process filed on 6 March 2026, by leave, Messrs Fraser and Henry, who have today been appointed as liquidators of Tahmoor, apply for approval, under s 477(2B) of the Act of a proposed Term Sheet, in a form exhibited to an earlier affidavit in the proceedings and tendered in the proceedings; and the long form Keyview Loan Agreement, also in a form that has been tendered. The application for approval of the Term Sheet is made, although that Term Sheet was on one view preliminary to the Keyview Loan Agreement, because that approval of the Term Sheet is a condition precedent to the Keyview Loan Agreement.
The applicable principles are well established. Under s 477(2B) of the Act, except with the approval of the Court or a committee of inspection, or a resolution of creditors, a liquidator of a company must not enter into an agreement on the company's behalf if the term of the agreement may end, or obligations of a party to the agreement may, according to its terms, be discharged by performance, more than three months after the agreement is entered into, even if the term may end, or the obligation may be discharged, within those three months.
The purpose of the section is to ensure that the Court exercises some oversight of the liquidator's actions and, in effect, confers or completes the necessary powers on or of a liquidator to enter into an agreement under which obligations will extend for a term of more than three months, only where it can be seen that the case for exercise of that power in the particular circumstances has been sufficiently shown: Re HIH Insurance Ltd [2004] NSWSC 5. The primary consideration in an application of this kind is the impact of the agreement on the duration of the liquidation and whether, in all the circumstances, the agreement is in the interests of the liquidation: Re McDermott & Potts in their capacities as liquidators of Lonnex Pty Ltd (in liq) [2019] VSCA 23 at [92](7).
Ms Whittaker, with whom Ms Williams appears for the liquidators, also draws attention to my decision in Re Hawkesbury House Pty Ltd (in liq) [2019] NSWSC 1673, in a somewhat similar context, where I identified other relevant factors in the context of approval of a funding agreement, and also noted that the primary question was whether the entry into such an agreement was a proper or bona fide exercise of the liquidator's power and was not ill advised or improper on the part of the liquidator. I also there referred to Gleeson JA’s summary of the applicable principles in Re 777 389 301 44 Pty Ltd (in liq) (formerly Commercial Indemnity Pty Ltd) [2017] NSWSC 452 at [54]ff, who pointed to the Court's reliance on the liquidator's commercial judgment, and noted that it was neither necessary nor appropriate for the Court itself to assess the commercial desirability of the transaction. His Honour also there noted that the Court would not generally interfere unless there was some lack of good faith, or error of law or principle, or real or substantial ground for doubting the prudence of the liquidator's proposal.
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(2011) 244 CLR 1
I should also recognise one additional matter, that the lateness of an appointment of a voluntary administrator may be relevant, where that appointment is made shortly before the hearing of a winding up application: Re Offshore and Ocean Engineering Pty Ltd [2012] NSWSC 1296 at [15]; leave to appeal refused in Offshore and Ocean Engineering v Greenwich Contractors Pty Ltd [2012] NSWCA 371; Australian Tailings Group at [6]. I recognise that this case involves a very late appointment of voluntary administrators, made in circumstances where the appointment of the voluntary administrators was a reversal of Tahmoor’s previous position that it was solvent, on the basis of which it had obtained previous adjournments of the winding up so as to lead evidence of its solvency. I give less weight to this matter than would ordinarily be the case, because I recognise that the voluntary administrators have now been in office for some time, and that there are important issues as to the potential outcome of a voluntary administration on the one hand, and a liquidation on the other, for creditors. It seems to me to be preferable to determine the matter by reference to those matters rather than by reference to the lateness of the voluntary administrators' appointment. I should, however, also recognise that it was unfortunate that the hearing before the Court on 9 February 2026 proceeded without any disclosure of the fact that discussions had been occurring between Tahmoor and the voluntary administrators, for a considerable period, in respect of their potential appointment as voluntary administrators to Tahmoor. I make no criticism of the voluntary administrators in that respect, because they were not present at that hearing and had no opportunity to make any such disclosure.
Mr Hayes also there addressed a "preliminary assessment" of the benefits of a voluntary administration as compared to an "immediate unfunded liquidation". That assessment was plainly preliminary in character, where he had only just been appointed; has since been refined over several affidavits; and was addressed to an "unfunded" liquidation, where there is now a real question as to whether any liquidation of Tahmoor would be funded or unfunded, which I address below. An exhibit to that affidavit included, relevantly, the Clydesdale Funding Agreement and an Amendment Deed in respect of that funding agreement, and the voluntary administrators' report dated 17 February 2026, obviously again as at a preliminary stage of the voluntary administration.
By a second affidavit dated 18 February 2026, Mr Hayes updated the position in respect of the funding of the administration and noted that requests for funding had, to that point, been made and met by Clydesdale; and addressed further correspondence with parties, including the voluntary administrators of LPMA, in respect of, inter alia, the manner in which any sale process for the assets or shares of Tahmoor would proceed.
By a third affidavit dated 3 March 2026, Mr Hayes indicated that he and Mr Johnson continued to hold the view that unsecured creditors would receive a materially higher return pursuant to the voluntary administration of Tahmoor than would be received in any liquidation. He provided a further, and detailed, update on the conduct of the voluntary administration; and an update on the funding of the voluntary administration, which addressed steps which were then being taken by the voluntary administrators to assess alternative funding in light of issues raised by CMI, the applicant on the winding up, in relation to the Clydesdale Funding Agreement. Those issues have been the subject of considerable focus in this application. He also there referred to steps which had been taken to explore alternative funding in respect of, inter alia, a potential purchaser of Tahmoor’s assets. He noted that he had then not received any proposal for alternative financing from a third party, and that position remains the case as at the determination of this application.
Mr Hayes there referred to the amendment of the Clydesdale Funding Agreement to remove Clydesdale's contractual right to terminate that agreement for convenience, to which I referred above, and that removed an aspect of uncertainty in respect of the funding under that agreement. Mr Hayes referred to a refinement of his estimate of the cost of maintaining care and maintenance operations of the mine, on the premise that all of its employees would continue to be employed, to an estimate of $10-$11 million per month. He referred to further inquiries which he had made in respect of Clydesdale, where CMI had raised concerns as to the robustness of the funding provided by Clydesdale and the Australian Securities and Investments Commission (“ASIC”) had drawn attention to the resignation of Clydesdale's auditors, a matter which also received some focus in this application. Mr Hayes noted that:
I have been taken, in the course of submissions, to an estimated outcome statement which is also exhibited to Mr Hayes' affidavit dated 4 March 2026 and which is, I should record, a very detailed and helpful document. It is plain that Mr Hayes has made a conscientious and diligent attempt to seek to forecast the relevant outcomes. It is also plain that, first, there is a significant difference in those outcomes depending upon whether securities granted to creditors, including companies within the GFG Alliance, in the recent past can be set aside. Mr Fraser also points out, and Mr Hayes does not seem to contest, that the estimated outcome statement is highly vulnerable to changes in its assumptions and to matters that are unknown, most significantly the amount for which the mine may be sold as a result of any sale process. Ultimately, with respect to the detail of that analysis, I can give limited weight to it, where it is a product of its assumptions.
I also recognise that, rightly in my view, Mr Sulan accepted in submissions that it is presently impossible to forecast the economic outcome of a sale process, although he emphasised the flexibility that is available to a voluntary administration. That uncertainty reflects, among other matters, the difference between the voluntary administrators' approach which assumes full employment of the employees of Tahmoor, and the proposed liquidators' approach which assumes the redundancy of a significant number of employees, in a manner that would plainly be disadvantageous to those employees as I will note below. Each approach has economic costs and economic benefits, and may affect the price which is to be paid by a purchaser. In particular, the uncertainties involve weighing the crystallisation of immediate employee entitlements on the one hand against the continued cost of employing a significantly larger number of employees on the other and the question whether a purchaser will wish to immediately recommence the operation of the mine, in which case it would likely prefer to have employees remain employed, or retain it on care and maintenance, possibly pending any improvement in the coal price, when its position would be less clear.
Mr Hayes was cross examined as to the basis on which, in the course of this hearing, he advanced the alternative application for a shorter adjournment, and I will return to that alternative application below. Mr Hayes fairly recognised creditors' concerns as to whether the funding for the voluntary administration that was provided by Clydesdale was robust. I pause to note that that is plainly not only a matter of creditors' attitude to that question but, as Mr Withers, with whom Mr Gee appears for CMI points out, an issue of fact which has loomed large in this application for some time. Mr Hayes there expressed optimism as to the benefit of a three-week adjournment of the voluntary administration, which was not wholly consistent with his earlier evidence as to the uncertainties that would introduce in the sale process given some two days before. At the same time, Mr Hayes there readily accepted that there would be continuing uncertainty in the work of the voluntary administrators, given a shorter adjournment.
Mr Hayes pointed in cross-examination to the fact that Clydesdale had made required payments to date. As I noted above, it plainly does not follow from the fact that payments have been made to date, that Clydesdale will make continued payments in the future. Mr Hayes fairly acknowledged that he had not been able to obtain alternate funding for the voluntary administration to date, but expressed optimism as to his ability to do so in the future and noted that unidentified third-party funders were presently considering the position. In a rather less convincing aspect of his evidence on cross examination, Mr Hayes suggested that he would consider pursuing Clydesdale for funding, by bringing proceedings in the United Kingdom, if it failed to perform its obligations under the Clydesdale Funding Agreement. There is an obvious difficulty with that evidence, so far as an assessment of the prospects of those proceedings would plainly need to take into account Clydesdale's relatively limited assets and the fact that, even if Mr Hayes were to devote his firm's personal resources to the pursuit of those proceedings, in circumstances that his funding for the voluntary administration had failed, any such proceedings would plainly not be resolved in sufficient time to restore that funding.
Mr Hayes was cross examined as to the inability to undertake compulsory investigations while a voluntary administration continued. I accept his evidence that it is practically unlikely that either a voluntary administrator or a liquidator would take significant steps to pursue investigations, at least to the point of an attempt to undertake compulsory examinations, in the near future; and Mr Fraser fairly gave evidence to similar effect in his cross-examination. Importantly, in cross examination, Mr Hayes also acknowledged the transactions which likely warranted further investigation and emphasised the possibility that he would recommend, at a second meeting of creditors, a structure that preserved the ability to undertake such investigations. I have noted above the obvious difficulty that, accepting that he would make such a recommendation, he has no control as to the outcome of the second meeting of creditors and cannot be sure that he will have any opportunity to exercise a casting vote.
The voluntary administrators tendered, initially, an email dated 5 March 2026 from Mr Davey, who is the District Secretary for the Mining and Energy Union South Western District (“MEU”), which indicated that the MEU supported the funded voluntary administration as it provided employment for permanent employees at Tahmoor Colliery. That email was admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) (“Evidence Act”) as indicating the view taken by Mr Davey and the MEU.
Mr Davey then attended the hearing, with a view to giving oral evidence if necessary, but an outline of evidence was tendered in place of oral evidence, and he was not required for cross examination. He again confirmed the MEU's support for a funded voluntary administration and noted that, under the voluntary administration, MEU members employed in the colliery would receive their wages and keep their positions. He expressed the view, which appears to be consistent with the evidence, that:
Mr Fraser also identified areas of disagreement with Mr Hayes, including recognising the possibility that a funded liquidation may be preferable to a voluntary administration, so far as it would permit the investigation of the significant transactions to which I have referred above. He also addressed, in some detail, the likely approach of a buyer to its assessment of the value of the mine and the matters which would impact upon a sale process. He expressed the view, as I noted above, that the preferable course was to retain only a sufficient number of employees in Tahmoor to conduct the mine on a care and maintenance basis, and this is a significant difference between Mr Hayes' and Mr Fraser's proposed approaches. Mr Fraser also there addressed the position in respect of the proposed funding of the liquidation and referred to a term sheet which had been negotiated with a third party, Keyview Financial Group ("Keyview"), in respect of the funding of the liquidation. While there was some scrutiny of the term sheet in the course of submissions, it is not necessary to address it further where events have since developed, by the entry into a long form Keyview Loan Agreement and General Security Deed as between a custodian as agent for Keyview and the proposed liquidators.
By a further affidavit dated 5 March 2026, Mr Fraser again addressed the funding position in respect of the liquidation, a foreshadowed application for approval of the funding arrangements under the s 477(2B) of the Act and the urgency of funding, if the liquidators were appointed to Tahmoor.
Mr Fraser was also cross examined. He was an impressive witness, plainly very knowledgeable, who readily noted the areas of his agreement with Mr Hayes and explained, in a concise and logical way, the areas of his disagreement. He acknowledged the utility of the voluntary administration regime generally and its obvious advantages. He also rightly recognised that this matter raised unusual features, to which I have referred above, the most obvious of which is the substantial transactions that affect the position of secured and unsecured creditors, and that warrant further investigation.
Mr Fraser accepted, in particular, the benefit of the moratorium available in a voluntary administration and recognised that, at least as the voluntary administrators plan to conduct the voluntary administration, it would not crystallise employee entitlements. He acknowledged that those entitlements would be crystallised under the proposed liquidators’ approach, where the number of employees would be reduced to those necessary for the continuing care and maintenance regime in respect of the mine. Mr Fraser also referred to discussions with two major creditors and the state government, although he fairly acknowledged that those had not provided certainty as to their approaches, if liquidators were appointed. Mr Fraser was also cross examined, importantly, as to the impact of a voluntary administration or liquidation on the sale process itself. His evidence, which I accept, was that, while he recognised the advantages of the voluntary administration, he considered that the difference in process would have limited impact on the value achieved in a sale of the mine in the relevant circumstances, by reason that buyers would look to the underlying resource in the mine and its capacity to generate revenue, and that both processes would involve a sale in a distressed scenario.
CMI also read an affidavit dated 5 March 2026 of Mr Sloan, a solicitor acting for CMI's nominees as liquidators, which addressed correspondence with secured creditors and with other creditors. CMI also tendered, on the first day of the hearing on 5 March 2026, the then draft of the loan agreement in respect of Keyview's proposed funding of the liquidation, although that has now been superseded by the executed Keyview Loan Agreement which makes a substantive alteration as to one matter.
I now turn to the application as originally framed by the voluntary administrators, for an adjournment of the winding up to 28 April 2026, a period which Mr Hayes has estimated would be sufficient for the sale process, unless further approvals are needed, as I noted above, from the ACCC or FIRB. I have noted above that this was a very late appointment of the voluntary administrators. I have also noted above that I will give little weight to that matter given the other issues which are of greater substance in this application.
Mr Sulan points to several advantages that generally exist in respect of voluntary administration, and those advantages were recognised both by Mr Hayes and by Mr Fraser. These include the availability of the statutory moratorium in respect of creditors' claims and the protection against ipso facto clauses allowing termination of contracts, although I also give weight to Mr Fraser's evidence that the practical benefit of the latter protection will be qualified to the extent that other grounds for termination may commonly arise in matters of this kind. I recognise, as Mr Hayes points out and Mr Fraser accepts, that a voluntary administration allows a range of options to implement a transaction, including a deed of company arrangement as an alternative to a sale agreement in respect of assets.
Mr Hayes has also contemplated the possible sale of shares in Tahmoor as the alternative to an asset sale, but a share sale would need to meet the requirements of s 444GA of the Act, and there is an unresolved dispute between the voluntary administrators and the deed administrators of LPMA as to whether LPMA's shares in Tahmoor have value so as to limit the prospects of approval under that section. I give less weight to the advantage of a sale of shares, where the question whether such a sale process would be available under s 444GA of the Act is unresolved.
I recognise that a significant matter here, although it is not a necessary feature of the voluntary administration regime, is that the voluntary administrators presently propose to continue employment of Tahmoor employees generally, whereas CMI's nominees as liquidators propose to continue the employment only of a smaller number of employees necessary for the care and maintenance of the mine. I have not neglected Mr Sulan's criticisms of the extent to which CMI's nominees as liquidators have been able to investigate that matter, where they have had no access to Tahmoor’s management. However, it seems to me that those criticisms are significantly displaced by the expertise and experience of Mr Fraser. There is no reason to doubt, given the evidence as a whole, including Mr Davey's evidence as to how employment at the mine is presently organised, that a significantly smaller number of employees could successfully maintain the mine on a care and maintenance basis. I also recognise that the continued employment of a larger number of employees at Tahmoor under the voluntary administrators’ plans is a very significant advantage of the voluntary administration for those employees, who likely prefer, consistent with Mr Davey's evidence, the continuance of their jobs, at least during the voluntary administration, to a crystallisation of their entitlements. I bear in mind the real and substantial personal hardship to employees, their families and the local community, of a significant displacement of employees. I have given great weight to this issue, and I recognise the force of Mr Davey's evidence as to the impact of that matter for the employees.
However, the position is more complex than a simple comparison between a position where employees will keep their jobs, at least while the voluntary administration continues, and a position where a significant number of jobs are lost in the liquidation. I put that matter in that way because, first, the sale process is expected to take some eight to ten weeks, and the position of employees will then be determined by the purchaser of the mine, not by the voluntary administrators. At best, the continuance of the voluntary administration gives the employees comfort as to the continuance of their employment for the eight to ten week period of the voluntary administration, after which the matter will then be outside the hands of the voluntary administrators. Once again, I do not underrate the fact that for an individual employee, or all employees collectively or their families, eight to ten weeks of employment is far better than an immediate loss of employment.
Second, and critically, the proposition that the voluntary administrators will continue the employment of employees assumes the availability of funding to them to do so, and I will return below to the significant difficulties in assuming that funding will continue, where Clydesdale is the funder. Importantly, the position of employees in an unfunded voluntary administration, if Clydesdale ceases to provide funding, will be substantially the same as their position in an unfunded liquidation and worse than their position in a funded liquidation, where at least some employees would have the opportunity to retain positions in a care and maintenance role. I recognise that Mr Hayes has indicated that he would seek to transition to liquidation if funding failed, but, as matters stand, that would presently be an unfunded liquidation, where Clydesdale's funding has ceased or terminated in a liquidation, and he has no other funding in place against the contingency of liquidation. In that event, as I noted above, even those employees who would retain their positions under the approach to be taken by CMI's nominees as liquidators would also lose their jobs.
Mr Sulan in turn emphasises the economic effect of the crystallisation of employee entitlements in a liquidation, which would be met in part by the Fair Entitlements Guarantee Scheme, but which would increase the amount of debts in the liquidation by about $30 million. I recognise that, in absolute terms, an increase of claims by an additional $30 million is large, but it should also be recognised that Tahmoor is itself an entity with an extraordinarily large level of secured and unsecured debts in total. That matter also has to be assessed against the economic cost to Tahmoor of continuing to retain all of its employees, which will be reduced to the extent that the number of employees are reduced and the risk to unsecured creditors that their returns will be significantly reduced if the securities recently taken by companies within the GFG Alliance are not challenged by a liquidator, whether by CMI's nominees or by Mr Hayes if he were successful in transitioning to a liquidator's role. Importantly, the continuance of all employees in a voluntary administration will impose substantial additional costs in that voluntary administration, at the likely expense of creditors generally. As Mr Sulan ultimately accepted in submissions, its impact on sale proceeds of the business is unknown, where that will substantially depend upon the identity of the purchaser and its plans for the business, which are presently unknown and unknowable.
This in turn leads me to a critical point, which is now not substantially contested. As Mr Hayes now recognises, the funding promised by Clydesdale for the voluntary administration is fragile, at best, and it seems to me that the voluntary administrators and the Court could not be satisfied that Clydesdale will continue to perform its obligations under the Clydesdale Funding Agreement, although both the voluntary administrators and the Court would recognise that it is possible that Clydesdale will do so, if it is in its commercial interests to do so.
First, as I have noted above, the fact that Clydesdale has performed its obligations in the past does not mean that it will do so in the future. Second, I bear in mind that Clydesdale does not, as is now common ground, itself have sufficient resources to comply with its obligations under the Clydesdale Funding Agreement, and even if proceedings were rationally brought by the voluntary administrators against it in the United Kingdom, they would not assist where the amount of its assets falls well short of its funding obligations. Third, the source of Clydesdale's ability to fund the voluntary administration depends on the unidentified funders who are presently doing so, and their capacity to fund the voluntary administration in the future is unknown. Fourth, Clydesdale and its representatives have declined, now over a reasonably long period, to respond in a substantive way to inquiries that Mr Hayes has rightly made to seek to satisfy himself as to whether Clydesdale's funding arrangements were in fact robust. I have noted above that, notwithstanding Mr Hayes' evidence in cross examination, it seems to me that the likelihood that Mr Hayes could or would bring any proceedings in the United Kingdom to enforce the funding obligations of Clydesdale or that those proceedings would bring any benefit, is doubtful, for the reasons to which I have referred. Fifth, while the voluntary administrators have explored alternative funding sources, no evidence of the potential terms of such funding has emerged and there has not, in fact, been any commitment by such persons to provide such funding after two previous adjournments of the winding up application.
The voluntary administrators also point to the potentially higher return on a voluntary administration than a liquidation. I have referred above to their estimate of the relevant outcomes, which has developed over time, and I have acknowledged the detail and apparent care with which that estimate has been prepared. Nonetheless, I accept Mr Fraser's evidence that the assumptions which underlie that estimate are so uncertain that I can give little weight to it, and I have recognised above that the return to unsecured creditors will be very sensitive, among other matters, to the extent to which security, including in favour of related parties, can be set aside.
As I have noted above, Mr Hayes relies on the possibility that the voluntary administration would transition to a liquidation so as to preserve claims against Clydesdale and related parties. I also give limited weight to that prospect. As I have noted above, the commercial logic of Clydesdale's position suggests that that is not its present assessment, because, if it considered that that would be the likely outcome of the voluntary administration, then it would be unlikely to continue to fund that likely outcome. Second, that proposition depends upon the outcome of a creditors' meeting which, as I have noted above, is not within the voluntary administrators' control.
I recognise that some creditors, including at least Clydesdale and Oaktree support the voluntary administration, and they are owed, or claim to be owed, significant debts. I recognise that others, including the numerous supporting creditors who have appeared in the course of the proceedings, do not support the continuance of the voluntary administration. I give limited weight to this matter, because ultimately it is difficult to know what creditors as a whole would consider, particularly if informed of all relevant matters, as the Court has been through this very comprehensive examination of the relevant issues.
I recognise that the voluntary administrators also point to the disadvantages of a liquidation, which would reflect in part the absence of a moratorium which I have noted above. I remind myself once more of the adverse impact on employees who will not be retained, other than for those in a care and maintenance role, under CMI's nominees' proposed approach, although I also recognise the risks which I have noted above to employees if Clydesdale's funding ceases, and the voluntary administration is unfunded or transitions to an unfunded liquidation.
Here, I recognise that these risks are mitigated by several matters. First, as I have noted above, Mr Sulan has rightly acknowledged that it is not possible to predict the different outcomes of a voluntary administration on the one hand and a liquidation on the other. While the process of a voluntary administration may be more flexible, the important question here is whether the outcome of a voluntary administration is more advantageous to creditors, and it is not possible to conclude that it will be. That conclusion is supported by Mr Fraser's evidence, to which I give weight, that the amount of the sale proceeds will ultimately be determined, substantially, by matters such as the resources of the mine, their return to a purchaser and the speed with which a sale can be executed. Second, CMI's nominees as liquidators are plainly very experienced, including in respect of mining assets. Third, it seems to me that the liquidation is now, for all relevant purposes, a funded liquidation. The first tranche of that funding is sufficient, on Mr Fraser's assessment, to fund a sale process, although the additional conditions precedent to the second tranche will now be more readily satisfied where they have been amended in the manner noted above. I should record here that this is of course a very late development, where the Keyview Loan Agreement was only executed in the course of the hearing on 6 March 2026. It is important to recognise, in fairness to the voluntary administrators, that they have had little real opportunity to digest this development, and that it is possible that they would have taken a different attitude in this application had this matter been known to them at some earlier point. Fourth, I also recognise that the structure of the proposed funding does not adversely affect the position of secured creditors, where the security which will be taken is against the liquidator's Universal Distributing lien, and amounts which are the subject of that lien would not be available to secured creditors in any event.
Critically, the Keyview Loan Agreement is with an apparently substantial and independent third-party funder, and there is no reason to doubt Keyview’s capacity to perform its obligations, by contrast with the position as to the Clydesdale Funding Agreement. Also importantly, the proposed liquidators will have the certainty that they can conduct, and are obliged to conduct, investigations in respect to the significant transactions to which I have referred above, and I accept Mr Withers' submission that the funding arrangements are sufficiently wide to include the cost of those investigations. That is important, both because of the significant impact of a successful challenge to the securities taken by companies within the GFG Alliance to creditors, and because of the public interest in that respect. I recognise that criticisms are made of the expense of the Keyview Loan Agreement, and it is plain that that arrangement involves multiple fees, which in total may amount to significant amounts. It is also plain enough that the funding arrangement is one which involves significant risk to the funder, and the extent of the fees are perhaps not surprising in that context.
Mr Sulan also points to the risk that Oaktree or the New South Wales Government may appoint a receiver if liquidators are appointed, and at least Oaktree has not indicated any intent to do so while the voluntary administration continues. I recognise that risk exists. However, a receiver would be funded and likely indemnified by its appointor; it would assume liabilities in connection with the control of the mine; and to that extent, would likely be obliged to bring about compliance with continuing requirements, including environmental requirements, in respect of the operation of the mine. That has two consequences. The first is that the appointment of a receiver is less likely unless the appointor is prepared to assume those liabilities. The second is that, in substance, a sale conducted by a funded receiver would be substantially equivalent to a sale conducted in a funded liquidation. In those circumstances, while I recognise the risk to which Mr Sulan points, it is not adverse to creditors, unless I had concluded that a funded liquidation was more adverse than a funded voluntary administration.
Returning now to the first of the applications brought by the voluntary administrators, namely that I should adjourn the winding up to 28 April 2026. I should recognise that this is the most difficult case which I have dealt in nearly 15 years in the Court, many in this List. I have been conscious of, and troubled by, in particular, the impact upon employees of not adjourning the winding up to permit the voluntary administration to continue. Nonetheless, I must apply a statutory test, and that statutory test is directed to the outcome for creditors as a whole of the adjournment of the winding up. For all the reasons that I have noted, I cannot be satisfied that it is in the interest of creditors to adjourn the winding up for the longer period, to 28 April 2026.
I have also concluded that I should not adjourn the winding up for the shorter period to 26 March 2026, the alternative period raised in the course of oral submissions. I have recognised that, Mr Sulan put, with considerable force, the possibility that an adjournment for that period of about three weeks would allow the voluntary administrators the opportunity to explore alternative funding arrangements. That, however, is only a possibility, and that possibility, alone or with other matters, does not seem to me to meet the statutory test for the adjournment. I recognise, in that respect, that the voluntary administrators have not achieved or secured alternative funding arrangements in the period in which they have been in office to date. I have referred above to the criticisms made of the costs of the liquidators’ funding under the Keyview Loan Agreement. However, there is no reason presently to think that, assuming the voluntary administrators could obtain alternative funding within a three week adjournment, alternative funding is likely to be, for example, on more favourable terms than that obtained by CMI's nominees as liquidators; and the position as to the voluntary administration will remain uncertain during that three week period.
That takes me to the next aspect of that application. I recognise that the alternate adjournment is sought for only a three week period, but it seems to me that, having regard to Mr Hayes' evidence, as later sought to be amended in cross examination, there is a real risk that that three week adjournment would prolong uncertainty in the sale process and generate uncertainty for any potential funders of the voluntary administration other than Clydesdale. Both parties and the supporting creditors would also be put to the significant costs of preparing for a further Court hearing, which would predictably agitate some if not all of the matters which have now been agitated for a day and a half before me. With all respect to the voluntary administrators, there is a significant tension between their strong evidence in Mr Hayes’ affidavits of the desirability of extending the voluntary administration for a longer period, and implicitly not for a shorter period; and the greater optimism which was expressed by Mr Hayes in his cross examination as to what could be done with a shorter adjournment. I am also not satisfied, in these circumstances, that the statutory test to adjourn the winding up for the shorter period is satisfied.
For these reasons, the basis of the winding up application is established. I make orders in accordance with the short minutes of order initialled by me and placed in the file with the result that Tahmoor is wound up, and Messrs Fraser and Henry are appointed as its liquidators.
Ms Whittaker here reads several affidavits of Mr Fraser, one of the liquidators, and tenders several exhibits. Those affidavits had previously been read, and those exhibits previously tendered, in the contested application for an adjournment of the winding up proceedings in which Messrs Fraser and Henry were ultimately appointed as liquidators. Relevantly, Ms Whittaker reads the affidavit dated 4 March 2026 of Mr Fraser and tenders the exhibit to that affidavit, now marked Exhibit CMI2 in the proceedings; she reads Mr Fraser's affidavit dated 5 March 2026; and she also reads an affidavit of Mr Sloan dated 5 March 2026 and tenders the exhibit to that affidavit, now marked Exhibit CMI3 in the proceedings. She also reads an affidavit dated 6 March 2026 of Mr Fraser, also read in the adjournment application, and tenders the exhibit to that affidavit, which is now marked Exhibit CMI5, which contains the final version of the Keyview Loan Agreement for which approval is now sought. I will not further summarise the terms of those affidavits and exhibits, since I have done so in some length above in determining the earlier adjournment application.
Here, the Court is in the unusual position that there has been a contested application, involving sophisticated counsel, in which the terms of the loan agreement and its desirability or otherwise have been in issue. Substantive submissions were there put by Mr Sulan, who appeared for the voluntary administrators of Tahmoor, to the effect that the funding under the Keyview Loan Agreement is expensive, and the same would be said, by way of implication, of the anterior Term Sheet. I have regard to that matter, but I also note, as I noted above, that the expense of the funding likely reflects the commercial risk of providing funding to a company in liquidation in a contentious setting. I also note that, obviously enough, the liquidators have formed the view, by reference to their substantial experience, that the terms are appropriate in the relevant circumstances. Ms Whittaker has also taken me to aspects of the Keyview Loan Agreement, in addition to those which had particular focus in the adjournment application, which establish, through the definitions of "Financial Close", "Initial Termination Date", which refers to date six months after Financial Close, and "Termination Date", that it is at least conceivable that the term of the Keyview Loan Agreement will be six months, although it may be extended by agreement or possibly contracted by agreement between the liquidators and the funder.
I am satisfied, here, of the matters necessary to the grant of the relevant approval under s 477(2B) of the Act. First, there is no basis for concern that the entry into the Keyview Loan Agreement, or the Term Sheet which proceeds it, will unduly extend the scope of the liquidation. There is here no likelihood that the liquidation of Tahmoor, involving even an abbreviated sale process, and associated steps in respect of investigations and potential challenges to other transactions, would take less than six months, irrespective of entry into the Term Sheet or the Keyview Loan Agreement. There is also no reason to think that the entry into the Term Sheet or the Keyview Loan Agreement is imprudent, or is not in good faith or involves an error of law on the part of the liquidators, where the funding of the liquidation is plainly essential to its effective operation. The somewhat expensive costs of that funding are, as I have noted above, not apparently inconsistent with the risk involved in the relevant funding and are costs that the liquidators consider are properly justified in the relevant circumstances.
In these circumstances, the Court can also be satisfied, and there is at least no reason to doubt, that the entry into the Term Sheet and the Keyview Loan Agreement is in the interests of the liquidation, where the liquidation plainly could not proceed without adequate funding for a sale process; the retention of at least some employees for the mine in a care and maintenance mode; and the investigative and possibly enforcement steps that will need to be taken by the liquidators. For these reasons, I make orders as initialled by me and placed in the file. I also make an order that these orders be entered forthwith.