Hellyer Metals liquidator lashed for 'serious lack of judgement'

A federal judge has fired the liquidator of Hellyer Metals, which part-owned a north-west Tasmanian gold mine, saying he failed in his duties and behaved in "objectively concerning" ways.

The decision comes 12 months after the Tasmanian government ordered the Hellyer Gold Mine be shut down temporarily over unpaid debts, which occurred at about the time a "highly questionable" transaction was made from Hellyer Metals to an associated company, Celestial Group.

At the same time, Hellyer Metals was being pursued in court by resources company Goshawk Mining and investment firm Saxby Capital for damages totalling more than $36 million over a failed business deal.

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.

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.

Plaintiffs lose confidence in liquidator

In a lengthy decision, Justice McElwaine detailed a complex timeline over recent years that resulted in Hellyer Metals entering voluntary administration in January this year and appointing Mr Bailey as liquidator.

Justice McElwaine said at that time Hellyer Metals had recently conducted the transaction in question, after which Goshawk Mining obtained a Supreme Court order freezing $36.4 million worth of assets in Hellyer's associated companies.

"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,"

Justice McElwaine said.

He said, in the following months, Mr Bailey failed to properly investigate the company he was liquidating and the circumstances of the transaction, despite having access to voluminous records and financial resources.

Justice McElwaine said the plaintiffs, Goshawk Mining and Saxby Capital, sought the federal court's intervention and Mr Bailey's removal as they had lost confidence in him and his impartiality.

Mr Bailey submitted to the court that no proper cause for his removal had been shown, but Justice McElwaine disagreed.

"Liam Bailey undertook little investigative work prior to the commencement of this proceeding,"

Justice McElwaine said.

"He was spurred into action because of it."

Justice McElwaine also criticised Mr Bailey's decision-making in choosing a lawyer known to Hellyer Metals to represent him in this case.

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 and demonstrative of a lack of independence."

Sacking 'required' for proper liquidation

Justice McElwaine said a "reasonable liquidator … would have acted with more haste".

"For more than eight months Liam Bailey has had the benefit of a detailed analysis of the transaction … which manifestly warranted urgent investigation," he said.

"The potential recovery for creditors is very substantial. In contrast, the inactivity of Liam Bailey is objectively concerning."

Justice McElwaine said removal of a liquidator is a discretion "not lightly exercised", but in these circumstances Mr Bailey's removal was "justified, indeed required".

"The liquidation of Hellyer Metals is still at an early stage, despite Liam Bailey's appointment on January 22, 2026.

"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."