Tom Birch.
Recommendations as to DoCA proposals are odd phenomena, seemingly existing only to fulfil the requirements of S439A. Beyond that they’re ephemera, to be disowned the moment creditors reject an administrator’s choice, as events in the saga of Mine & Rail Company Pty Ltd (MRC) usefully illustrate.
” .. counsel for Tacora identified several matters which may provide a basis to challenge the evidence of Mr Birch. 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.”
As lead administrator of MRC, Cor Cordis partner Tom Birch was in the fortunate position of having competing DoCA proposals to assess.
We use the past tense in respect of fortunate because at the June 19 second meeting the deed proposal Birch did not recommend gained majority support of creditors in both number and value.
Subsequently Tacora Capital, the proponent whose deed Birch did recommend obtained orders in the Federal Court restraining Perth-based Birch and colleague Barry Wright from effectuating the creditor’s pick until the court hears its application for various orders, which if granted will see Birch and Wright replaced and Tacora’s DoCA substituted for the incumbent deed proposed by Valiant Resources Limited (Valiant).
That of course is a big “if”. Tacora is hanging much of its case on Birch’s adjudication of one of its two proofs of debt, a claim for in excess of $45 million which Birch admitted for voting purposes for $1.00.
Tacora is arguing that if the claim had been admitted for its full amount the vote would have been deadlocked, forcing Birch to use his casting vote in favour of the deed proposal he recommended.
But as the minutes of the meeting show, Birch wasn’t going to die in a ditch for a recommendation the creditors spurned.
Once the subsequent vote in favour of the Valiant deed was concluded lawyer Michael Mulveena for Tacora asked Birch if he he would’ve used his casting vote to push the Tacora DOCA through if the vote had been deadlocked.
The man who had weighed up the competing proposals and indicated to creditors that Tacora’s was superior responded by saying he wasn’t going to indulge in hypotheticals.
What’s hypothetical about 50 cents in the dollar as opposed to 35 cents?
All Birch would say in response to Mulveena’s protests was that weight had to be given to the unrelated creditors, which is a consideration sure to exercise the mind of whichever judge presides over Tacora’s challenge. Also sure to exercise the trial judge’s mind is the legal advice from Corrs which Birch and Wright relied on when adjudicating Tacora’s proofs.
We asked Birch why he refused to back his own recommendation and received no response prior to publication. Perhaps his lawyers recommended he keep shtum?
In Tacora Capital, LP v Mine & Rail Company Pty Ltd (Administrators Appointed), in the matter of Mine & Rail Company Pty Ltd [2026] FCA 903 Justice Scott Goodman decided Tacora had met the standard necessary to bring its claims to a hearing, though only just.
“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,” the judge said.
“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.”
The approach of Chair after resolutions was very appropriate, as after all it was academic