Federal Court of Australia

Tacora Capital, LP v Mine & Rail Company Pty Ltd (Administrators Appointed), in the matter of Mine & Rail Company Pty Ltd [2026] FCA 903

ORDERS

THE COURT NOTES THAT:

1.    The plaintiff through its counsel:

(a)    gives the usual undertaking as to damages; and

(b)    undertakes to pursue this proceeding with all due expedition.

THE COURT ORDERS THAT:

1.    Once the Deed of Company Arrangement (DOCA) proposed by the second defendant has been executed, then aside from payment by the second defendant of the Deposit of $100,000 and the Retention Amount of $100,000 into the DOCA Fund which are due upon execution of the DOCA, the defendants are not to take any further step to effectuate the DOCA pending determination of the originating process filed by the plaintiff on 2 July 2026.

2.    The plaintiff provide security for the undertaking as to damages by way of payment into Court in the amount of $350,000 by 5.00pm on 10 July 2026.

3.    If the plaintiff does not comply with Order 2, then the proceeding is stayed.

4.    The defendants file and serve any evidence in response to the originating process by 4.00pm on 15 July 2026.

5.    The plaintiff file and serve any evidence in reply and written submissions of no more than ten (10) pages in support of the originating process by 4.00pm on 20 July 2026.

6.    The defendants file and serve any written submissions of no more than ten (10) pages in response by 4:00pm on 22 July 2026.

7.    The whole of the proceeding be referred to the National Operations Registrar for allocation to a docket judge.

8.    The proceeding be listed for hearing on a date after 22 July 2026, to be fixed by the docket judge.

9.    The plaintiff’s interlocutory process dated 7 July 2026 be dismissed.

10.    Liberty to apply.

11.    Costs reserved.

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

REASONS FOR JUDGMENT

GOODMAN J:

1    On 5 March 2026, the third and fourth defendants (Mr Barry Wight and Mr Thomas Birch, together the Administrators) were appointed as voluntary administrators of the first defendant (Company).

2    On 19 May 2026, the plaintiff (Tacora) submitted a proof of debt for $45,433,380.84 comprising:

(1)    an amount of USD $7,000,000, relating to an advance made by Tacora to the Company under a binding Term Sheet (Term Sheet Claim); and

(2)    an amount of USD $23,000,001, relating to an advance made by Tacora to the Company under a Convertible Note Deed (Convertible Note Claim).

3    Following an invitation from the Administrators, Tacora provided to the Administrators a proposal for a Deed of Company Arrangement (DOCA). Another creditor of the Company, the second defendant (Valiant), provided a proposal for a different DOCA.

4    Each of Tacora and Valiant provided further versions of their proposals for a DOCA and a decision as to which updated proposal (if any) should be entered into was made by the creditors of the Company at a meeting of those creditors held on 19 June 2026.

5    The minutes of that meeting record, relevantly, the following matters.

6    First, Mr Birch, qua Chairperson noted the following with respect to the claims made by Tacora in its proof of debt:

Tacora Claim

•    In respect of the USD $7,000,000 Term Sheet Claim, submitted by Tacora, this claim has been admitted in the amount of AUD $9,982,000 for voting purposes. In respect of the Convertible Note Claim, submitted by Tacora, this claim has been admitted for the nominal amount of AUD $1 for voting purposes on the basis that the Administrators were unable to form a just and estimate value of the claim for the purposes of today’s meeting.

•    Tacora disagreed with the Administrators’ assessment in respect of Tacora’s Convertible Note Claim. Based on the information currently available, the Administrators’ position at the meeting remains unchanged in relation to Tacora’s claim for voting purposes.

7    There was further discussion later in the meeting concerning the Administrators’ decision to admit Tacora’s Convertible Note Claim for $1.

8    Secondly, Mr Birch advised, with respect to voting procedures that:

•    if a poll is requested, a resolution is passed if a majority of the creditors voting vote in favour of the resolution and a majority in value of the creditors voting vote in favour of the resolution

•    if no result is reached in a poll, the Chairperson may be able to exercise a casting vote in favour of or against the resolution

9    Thirdly, Mr Birch provided an update in relation to the proposals received to that date. After a detailed recitation of those events, Mr Birch made a recommendation that it was in the interests of the creditors of the Company for the Company to execute a DOCA reflecting the latest proposal provided by Tacora (Tacora DOCA proposal) rather than the latest proposal provided by Valiant (Valiant DOCA proposal), which recommendation is recorded in the minutes as follows:

The Administrators’ Final Recommendation

•    Given that Tacora’s Second Revised DOCA Proposal provides a greater return to unsecured creditors (excluding related parties) and notwithstanding that there will be additional time and money, though that will be covered by Tacora and that there is a small amount of risk (which is considered to be low) the Administrators revised their recommendation and considered it to be in the creditors’ interests and, specifically, in the interests of the unsecured, unrelated creditors, for the Company to execute Tacora’s Second Revised DOCA Proposal.

•    The Chairperson noted that this was his independent view and that creditors may disagree.

(underline emphasis in original)

10    Fourthly, under the heading “Future of the Company”, the minutes record the votes taken with respect to the Tacora DOCA proposal and the Valiant DOCA proposal:

The Chairperson explained the options available to creditors under s 439C of the Corporations Act 2001 (Cth), being:

a)    That the Company execute a deed of company arrangement as proposed by Tacora Capital, LP which was tabled and circulated to creditors at the meeting.

b)    That the Company execute a deed of company arrangement as proposed by Valiant Resources Limited which was tabled and circulated to creditors in the Administrators’ Further Supplementary Report dated 18 June 2026.

c)    That the Administration should end.

d)    That the Company be wound up.

The Chairperson further noted that the second meeting of creditors had already been adjourned to the maximum period permitted under the Act, and that no further adjournment would be available.

Deed of company arrangement as proposed by Tacora Capital, LP

The Chairperson referred to Tacora’s proposed deed of company arrangement as circulated to creditors at the start of this meeting.

The Chairperson advised that the Company would enter into Tacora’s proposed deed if creditors passed the resolution for the Company to execute this deed of company arrangement.

The resolution was put to a vote by the Chairperson, pursuant to s 439C of the Corporations Act 2001, “That Mine & Rail Company Pty Ltd (Administrators Appointed) ACN 635 568 900 execute a deed of company arrangement as proposed by Tacora Capital, LP, substantially in accordance with the proposed deed of company arrangement as circulated to creditors at the meeting.”

The Chairperson indicated that a poll would be used to determine the outcome of this resolution and that he would ask each creditor how they wished to vote.

The results of the poll were:

Result: The Chairperson declared the resolution lost as there was a majority in number and value voting against the resolution.

The Chairperson noted that Mr Trevor Brown had lodged a special proxy in favour of the Chairperson; however, he subsequently withdrew the proxy and elected to vote in person.

In these circumstances, the Chairperson included his vote in the poll.

The Chairperson abstained from voting with the general proxy held in his name from FBT.

The Chairperson also abstained from voting with the special proxy held in his name from Bell Potter. The Chairperson noted that Bell Potter voted against Tacora’s DOCA in its special proxy.

Deed of company arrangement proposed by Valiant Resources Limited

The Chairperson referred to Valiant’s proposed deed of company arrangement as described in the Administrators’ Further Supplementary Report to Creditors dated 18 June 2026.

The Chairperson advised that the Company would enter into Valiant’s proposed deed if creditors passed the resolution for the Company to execute a deed of company arrangement.

The resolution was put to a vote by the Chairperson, pursuant to s 439C of the Corporations Act 2001, “That Mine & Rail Company Pty Ltd (Administrators Appointed) ACN 635 568 900 execute a deed of company arrangement as proposed by Valiant Resources Limited, substantially in accordance with the proposed deed of company arrangement as described in the Administrators’ Further Supplementary Reports to Creditors.”

The Chairperson indicated that a poll would be used to determine the outcome of this resolution and that he would ask each creditor how they wished to vote.

The results of the poll were:

Result: The Chairperson declared the resolution passed as there was a majority in number and value voting for the resolution.

The Chairperson abstained from voting with the general proxy held in his name from FBT.

The Chairperson also abstained from voting with the special proxy held in his name from Bell Potter. The Chairperson noted that Bell Potter voted for Valiant’s DOCA in its special proxy.

The Chairperson noted that only the unrelated creditors have the economic interest in both DOCA proposals, with all related party creditors having no claim in the proposed DOCAs

The Chairperson advised that he has reviewed both DOCA proposals independently and objectively. In circumstances where he admitted Tacora’s claim for AUD $45,000,000 there would have been a split in the vote on majority in number and in value.

The Chairperson advised that, if either DOCA proponent was unsuccessful, they indicated that may seek to challenge or set aside the alternative DOCA and outcome of the meeting.

The Chairperson further noted that the Administrators had considered both DOCA proposals on their merits, balancing all relevant factors in forming their view.

The Chairperson reiterated that the Administrators’ role is to act independently and to take steps aimed at achieving the best outcome for creditors as a whole.

The Chairperson noted that, notwithstanding the Administrators’ recommendation, creditors voted against Tacora’s proposed DOCA.

The Chairperson further advised that creditors may consider their position following the meeting, including whether to take steps to challenge the outcome of today’s meeting at the Court.

Mr Mulvenna queried whether, in the event of a split vote on Tacora’s proposed DOCA, the Chairperson would exercise a casting vote in favour of Tacora’s DOCA.

The Chairperson advised he was not going to be drawn into hypotheticals and that the voting results indicated that a majority in both number and value were against Tacora’s proposed DOCA.

Mr Mulvenna queried whether the Administrators’ recommendation would still stand.

The Chairperson advised that the Administrators had made their position clear prior to the vote. Notwithstanding this, the Chairperson noted that creditors did not adopt the Administrators’ recommendation. The Chairperson also noted that weight has to be given to the unrelated creditors and the decision has been made.

The Chairperson noted that Tacora is entitled to apply to the Court to challenge the outcome and seek to set aside the DOCA.

The Chairperson further advised that the Administrators would abide by any determination of the Court.

(bold and underline emphasis in original. Mr Mulvenna is a solicitor in the employ of the solicitors for Tacora)

11    Thus, in summary:

(1)    Tacora’s vote as to value was with respect to $9,982,000 as allowed by the Administrators, in circumstances where Tacora contended that that value ought to have been with respect to $45,433,380.84;

(2)    the Administrators recommended that creditors resolve that the Company enter into a DOCA in accordance with the Tacora DOCA proposal;

(3)    the resolution that the Company execute a DOCA in accordance with the Tacora DOCA proposal was defeated by the majority in: (a) number and (b) value of the voting creditors; and

(4)    the resolution that the Company execute a DOCA in accordance with the Valiant DOCA proposal (Valiant DOCA) was passed by the majority in: (a) number and (b) value of the voting creditors.

12    The Valiant DOCA has not been executed. By dint of the operation of s 444B(2) of the Corporations Act 2001 (Cth), it must be executed within 15 business days after the end of the creditors meeting (or such further period as the Court allows on an application made within those 15 business days).

13    It is common ground that the 15 business days period expires today.

14    On 2 July 2026, Tacora commenced this proceeding. The defendants are the Company, the Administrators and Valiant.

15    The orders sought in the originating process are:

(1)    an order pursuant to s 90-15 of the Insolvency Practice Schedule (Corporations) (IPS), being Schedule 2 to the Act, that Mr Birch’s decision to admit Tacora’s proof of debt for $9,982,000 in respect of the Term Sheet Claim and $1 in respect of the Convertible Note Claim be varied such that it is admitted for $45,433,380.34, or other amount as determined by the Court;

(2)    an order pursuant to s 90-15 or s 75-41 of the IPS that the resolution of creditors on 19 June 2026, that the Valiant DOCA be executed, be set aside;

(3)    an order pursuant to s 447A of the Act, or s 90-15 of the IPS, that Tacora, the Company and the Administrators enter into the Tacora DOCA;

(4)    in the alternative to order 3, an order pursuant to s 447A of the Act, or s 90-15 of the IPS, that the Administrators convene a meeting of creditors of the Company pursuant to s 439A of the Act;

(5)    an order pursuant to s 447A of the Act that the requirements of s 439A(2) of the Act are satisfied by holding the meeting referred to in order 4 within a period of time to be determined by the Court;

(6)    an order pursuant to s 90-15 of the IPS, that at the meeting referred to in order 4 above, Tacora’s proof of debt be admitted for $45,433,380.34, or other amount as determined by the Court;

(7)    in the alternative to orders 3 and 4, an order pursuant to s 447A of the Act, or s 90-15 of the IPS, that the Company be wound up in insolvency and that nominated persons be appointed as liquidators of the Company; and

(8)    further or in the alternative to order 3, if the Valiant DOCA has already been executed, an order pursuant to ss 445D and or 447A of the Act, or s 90-15 of the IPS, that the Valiant DOCA be terminated or set aside.

16    Tacora seeks the following orders by way of interlocutory relief:

1    Pursuant to s 444B(2)(b) and/or s 447A of the Corporations Act, the time for the first defendant, second defendant, third defendant and fourth defendant to execute the deed of company arrangement proposed by the second defendant (Valiant DOCA) is extended to the earlier of:

a.    7 days after determination of these proceedings; or

b.    further order of the Court.

2    Upon the plaintiff, through its counsel, giving the usual undertaking as to damages, the defendants, be restrained from executing the Valiant DOCA until the earlier of:

a.    7 days after determination of these proceedings; or

b.    further order of the Court.

3    The plaintiff will provide security for the undertaking as to damages in the amount of $350,000 to be provided by way of payment into court by 5.00pm on 10 July 2026.

(bold emphasis in original)

17    Thus, the interlocutory relief sought would prevent the execution of the Valiant DOCA (and necessarily any steps to effectuate it).

18    In contrast, Valiant and the Administrators contend that if the Court is satisfied that Tacora has a sufficient prima facie case then the appropriate course is not to injunct the execution of the Valiant DOCA, but instead to allow it to be executed and to order that – aside from the payment by Valiant of the Deposit of $100,000 and the Retention Amount of $100,000 into the DOCA Fund (as those terms are defined in the Valiant DOCA) – the defendants are to take no further step to effectuate the Valiant DOCA, pending determination of the originating process.

19    The considerations to be taken into account in deciding whether to grant interlocutory injunction are well-established and need not be repeated.

20    Tacora’s contentions as to the existence of a sufficient prima facie case may be summarised as follows:

(1)    the Administrators’ adjudication that the Convertible Note Claim be admitted for only $1 for voting purposes is incorrect and ought be overturned. In this regard, Tacora foreshadows asking the Court to undertake a de novo review of the adjudication of its proof of debt;

(2)    if that claim had been admitted for its full value, then Tacora would have had a majority in value on the vote on the Tacora DOCA;

(3)    if Tacora had the majority in value on the vote on the Tacora DOCA, then Mr Birch qua Chairperson would have been required to exercise his casting vote; and

(4)    Mr Birch would have exercised that casting vote in favour of the Tacora DOCA, in circumstances where Mr Birch had earlier in the creditors meeting recommended that the Company enter into the Tacora DOCA.

21    Valiant accepts that there is a sufficient prima facie case with respect to the first of these propositions. It also accepts the second and third propositions. However, it puts in issue the fourth proposition and contends that Tacora’s prospects of establishing that proposition are low and that as a result there is an insufficient prima facie case for the relief that Tacora seeks. In this regard, Valiant contends that Mr Birch would not have exercised the casting vote in favour of the Tacora DOCA, for the reasons given by him in his affidavit read on this application. That evidence is:

G.    Exercise of the Administrators’ casting vote

28    I acted as chairperson of the Further Reconvened Meeting. At that meeting, the resolution to approve the Valiant DOCA was carried by a majority of creditors in both number and value, and every unrelated unsecured creditor in attendance who stood to benefit from a distribution under a deed of company arrangement voted in favour of the Valiant DOCA. Accordingly, the need for me to exercise a casting vote did not arise.

29    I note that, in its substantive claim, Tacora challenges the adjudication of its proof of debt. As recorded in the Minutes, Tacora’s convertible note claim was admitted for the nominal amount of a dollar for voting purposes on the basis that the Administrators were unable to form a just estimate of its value, given the limited recourse nature of the instrument and the absence of any valuation of the underlying shares in Mine & Rail Corporation (MRCo US). I am satisfied that the adjudication of Tacora’s proof, and the admission of the convertible note claim for a dollar, was an appropriate exercise of discretion.

30    Even if Tacora’s proof of debt had been admitted for its claimed value, it would not have changed the outcome of the Further Reconvened Meeting.

31    If Tacora’s proof of debt had been admitted for its claimed value then, all other matters being equal, there would have been a deadlock between number and value on a poll in respect of the resolution to execute the deed of company arrangement proposed by Tacora (Tacora DOCA). It would have then fallen to me, as chairperson, to exercise my casting vote. Had it been necessary for me to exercise a casting vote, I would not have exercised it in favour of the Tacora DOCA, in circumstances where all unsecured, unrelated creditors in attendance at the Further Reconvened Meeting who stood to benefit under either proposed deed of company arrangement voted against the Tacora DOCA and in favour of the Valiant DOCA.

32    Even if Tacora’s proof of debt had been admitted for its full claimed value, Tacora would have held a majority in value, but not in number. Notwithstanding that, in considering the exercise of any casting vote, I would not have deferred to the gross value of Tacora’s claim, or that the Administrators had previously made a recommendation to execute the Tacora DOCA. In my view, the following factors would have weighed against doing so:

a.    Tacora is a related party creditor of the Company, by reason of a common director;

b.    Tacora was the proponent of the Tacora DOCA, being the alternative deed of company arrangement to the Valiant DOCA, and does not itself stand to receive any distribution as a creditor under either proposed deed of company arrangement;

c.    Tacora’s existing rights against the Company do not appear to have been adversely affected by the Valiant DOCA; and

d.    excluding all related party voting at the Further Reconvened Meeting, there would still have been a majority of unrelated creditors in number and in value that would have voted against the Tacora DOCA and in favour of the Valiant DOCA. I note that two unrelated creditors abstained from voting as one was a general proxy in favour of me as the Chairperson and the other was a special proxy in favour of the Chairperson and voting for the Valiant DOCA proposal, however, had been received prior to the revised Tacora DOCA and Valiant DOCA being submitted.

33    In exercising any casting vote, I understand that I am required to act honestly and in accordance with what I believe to be the best interests of those who may be affected by the vote. Given that a winding up of the Company would not have been to the benefit of creditors, and that every unrelated unsecured creditor who stood to receive a distribution voted in favour of the Valiant DOCA, I confirm that, had a casting vote been required, I would have exercised it in favour of the Valiant DOCA.

(bold emphasis in original)

22    Of course, Tacora has the burden of establishing that if Mr Birch had been required to exercise the casting vote, then he would have voted for the execution of the Tacora DOCA and against the execution of the Valiant DOCA. That is a question to be determined at a final hearing and following a thorough analysis of the evidence, including any cross-examination. During his submissions on this application, counsel for Tacora identified several matters which may provide a basis to challenge the evidence of Mr Birch set out above. Having considered those matters, I am not satisfied that Tacora’s prospects of establishing that Mr Birch would have voted for the execution of the Tacora DOCA and against the Valiant DOCA are so low as to mean that Tacora does not have a sufficiently arguable prima facie case. In my view Tacora’s case is sufficiently arguable, albeit its prospects of success appear far from overwhelming.

23    I turn now to the question of the balance of convenience. As noted above: (1) Tacora seeks to enjoin the execution of the Valiant DOCA and thereby any step that may be taken under it; and (2) Valiant and the Administrators contend that an appropriate means of preserving the status quo pending the determination of the originating process would be to: (a) allow (i) the Valiant DOCA to be signed and (ii) payment of the Deposit and the Retention Amount into the DOCA Fund; and (b) prevent the defendants from taking any further step to effectuate the Valiant DOCA.

24    I have come to the view that the balance of convenience is best achieved by taking the course that Valiant has suggested. That course will likely allow Tacora sufficient protection in the event that it is successful in the proceeding. In this regard, the payment by Valiant of the Deposit and the Retention Amount will not prejudice Tacora when they are made, or in the event that Tacora is successful in the proceeding given that the fact that such payments will have been made is unlikely to have any effect upon the awarding of any of the relief sought by Tacora. Further, I am not persuaded that Tacora would otherwise be prejudiced by the fact of execution of the Valiant DOCA when its effectuation (save for the above-mentioned payments) is otherwise stayed. In reaching this conclusion as to the appropriate orders to be made, I have also taken into account my views as to the limited strength of Tacora’s case, as set out at [22] above.

25    I note for completeness that Valiant contended that delay on the part of Tacora disentitled it from any of the interlocutory relief that it seeks. Although Tacora could have acted more quickly than it did, I am not persuaded that any delay is sufficient to deny relief.

26    I note also that it was agreed that if interlocutory relief was to be ordered then Tacora would provide security of $350,000 with respect to its undertaking as to damages.

27    I will made orders accordingly, together with (agreed) orders for the preparation of the proceeding for hearing.

Associate:

Dated:    10 July 2026

SCHEDULE OF PARTIES