Justice Shaun McElwaine of the Federal Court has removed Hellyer Metals liquidator Liam Bailey and appointed Adam Johnston in his place, finding Mr Bailey failed to properly investigate a "prima facie highly questionable" transaction between the company and an associated entity, Celestial Group, and demonstrated a "serious error of judgement" by sharing a draft report with company directors.
The decision comes 12 months after the Tasmanian government ordered the Hellyer Gold Mine in north-west Tasmania temporarily shut over unpaid debts, at about the time the transaction was made. Hellyer Metals was also being pursued by resources company Goshawk Mining and investment firm Saxby Capital for damages totalling more than $36 million over a failed business deal.
Justice McElwaine said “very real” questions on Mr Bailey's impartiality had been raised, and that along with his lack of action since his appointment in January, it was clear “a new liquidator with a laser-like focus” was required. The judge criticised Mr Bailey for choosing a lawyer known to Hellyer Metals to represent him, and for providing a draft of his statutory report to the company's directors. “These are the very people intimately involved in the transaction,” the judge said.
Justice McElwaine said Mr Bailey undertook little investigative work before the plaintiffs sought the court's intervention, and was “spurred into action because of it”. He said a “reasonable liquidator … would have acted with more haste”. Mr Bailey had submitted that no proper cause for his removal had been shown, but Justice McElwaine disagreed, saying removal was “justified, indeed required”. Justice McElwaine said a new liquidator with a focus on thoroughly and quickly investigating the transaction with adequate funding was in the administration's best interests.
Analysis
Why This Matters
- The ruling restores creditor confidence that the liquidation will be properly conducted, with potential recovery of millions of dollars for Hellyer Metals' creditors.
- It highlights the legal standards expected of liquidators in investigating related-party transactions, an issue that arises in many corporate collapses.
- The Hellyer Gold Mine's future, already disrupted by the stop-work order, could be affected by the outcome of the new liquidator's investigation.
Background
Hellyer Metals part-owned the Hellyer Gold Mine in north-west Tasmania. The Tasmanian government issued a three-week stop-work order in October 2025 over alleged compliance failures and unpaid mining royalties. The company entered voluntary administration in January 2026, appointing Liam Bailey as liquidator. At the same time, two companies, Goshawk Mining and Saxby Capital, were pursuing Hellyer Metals in court for over $36 million in damages from a failed business deal. The disputed transaction with Celestial Group occurred around the time of the stop-work order.
Key Perspectives
Justice Shaun McElwaine: Found that Mr Bailey failed to properly investigate the transaction, lacked impartiality and made serious errors of judgement, including sharing a draft report with company directors and hiring a lawyer known to Hellyer Metals. The judge said removal was necessary for the proper conduct of the liquidation.
Liam Bailey: Submitted to the court that no proper cause for his removal had been shown.
What to Watch
- Adam Johnston, the new liquidator, is expected to move quickly to investigate the transaction with Celestial Group and pursue potential recoveries.
- The outcome of the $36 million damages claims by Goshawk Mining and Saxby Capital, which may depend on the liquidation's findings.
- Whether the Hellyer Gold Mine resumes operations or faces further regulatory action.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedThe judge removed Hellyer Metals liquidator Liam Bailey and criticised his conduct as a “serious error of judgement.”Just In: “That was a serious error of judgement and demonstrative of a lack of independence.”
- SupportedThe Federal Court said Bailey failed to properly investigate a transaction described as “prima facie highly questionable.”Just In: “He said, in the following months, Mr Bailey failed to properly investigate the company he was liquidating and the circumstances of the transaction”
- SupportedThe judge described the transaction as “prima facie highly questionable.”Just In: “The transaction is prima facie highly questionable by reason of the timing, the individuals behind it and the consequence that Hellyer Metals appears to have been stripped of assets for no valuable consideration,”
- SupportedQuestions were raised about Bailey’s impartiality.Just In: “Justice McElwaine said "very real" questions on Mr Bailey's impartiality had been raised”
- SupportedJustice McElwaine removed Bailey and appointed Adam Johnston in his place.Just In: “On Tuesday, federal court Justice Shaun McElwaine removed Hellyer Metals liquidator Liam Bailey and ordered him to hand over all relevant records to Adam Johnston, who he appointed in Mr Bailey’s stead.”
- SupportedThe transaction was between Hellyer Metals and its associated company, Celestial Group.Just In: “a "highly questionable" transaction was made from Hellyer Metals to an associated company, Celestial Group.”
- SupportedThe judge said Bailey demonstrated a serious error of judgement by providing a draft statutory report to Hellyer’s directors.Just In: “He also said Mr Bailey provided a draft of his statutory report of the liquidation to Hellyer's directors. "These are the very people intimately involved in the transaction," the judge said. "That was a serious error of judgement”
- SupportedThe judge said Bailey undertook little investigative work before the plaintiffs began the court proceeding and was “spurred into action because of it.”Just In: “"Liam Bailey undertook little investigative work prior to the commencement of this proceeding," Justice McElwaine said. "He was spurred into action because of it."”
- SupportedThe judge said a reasonable liquidator would have acted with more haste.Just In: “Justice McElwaine said a "reasonable liquidator … would have acted with more haste".”
- SupportedBailey submitted that no proper cause for his removal had been shown, but the judge disagreed and said removal was justified and required.Just In: “Mr Bailey submitted to the court that no proper cause for his removal had been shown, but Justice McElwaine disagreed.”
- SupportedThe judge said a new liquidator focused on investigating the transaction thoroughly and quickly, with adequate funding, was in the administration’s best interests.Just In: “A new liquidator with a laser-like focus on the need to thoroughly and quickly investigate the transaction with adequate funding is in the best interests of the administration.”
- SupportedThe decision came 12 months after the Tasmanian government ordered the Hellyer Gold Mine temporarily shut over unpaid debts.Just In: “The decision comes 12 months after the Tasmanian government ordered the Hellyer Gold Mine be shut down temporarily over unpaid debts”