HOPE Wine Group was placed in voluntary liquidation this week, a day before the company was due in the NSW Supreme Court being sued for more than $1.2 million by Bulga Coal Management.
The Hunter Valley vineyard's trading company has not operated for about a year and has no external creditors.
It's understood the action means the court case, that was due to begin on Thursday, will be stayed.
Winery owner Michael Hope said this week the pandemic had forced a restructure of the family business.
"This was the trading company at the winery, it didn't own any property or have any assets," Mr Hope said.
"There are no creditors and suppliers will not be impacted as the company hasn't traded for sometime due to a restructure."
Hope Wine Group was being sued for more than $1.2 million by Bulga Coal Management following a dispute about alleged unpaid rent and damage to a vineyard at Broke.
In the mine versus wine battle, Bulga Coal was alleging that Hope Wine welshed on a rental agreement and failed to leave the vineyard in good repair when it left.
Bulga bought the former Hope Wine property in mid-2006 because it wanted to extend its coalmining operations under the land, and leased the vineyard back to the winemaker.
The court previously heard that after contracts were exchanged for the sale, and as Hope Wine was negotiating to buy another Hunter Valley property, Bulga Coal sought amendments to the leaseback agreement.
This included changes to the length of the lease, cost of rent and notice period for termination.
Bulga later claimed it was owed $1.284 million in damages due to breaches of the lease. The figure included alleged unpaid rent, rates, water charges, services, land tax and $1.18 million claimed for make-good costs associated with work done at the property after the lease ended.
Hope Wine conceded it did not comply with the lease in relation to rent and outgoings, claiming it did not have to because it was not enforceable. It denied it breached the make-good obligation and that Bulga Coal suffered any loss.
The court heard that Hope Wine claimed the miner made "no demand for rent for eight years". According to Hope Wine director Michael Hope, he had a conversation with Bulga's property manager Val Istomin before the property sale was completed and the lease-back agreement was signed.
Mr Hope said he was told that Bulga's parent company, Swiss mining giant Xstrata now Glencore, would not accept the leaseback to be rent free or $1 per year. Mr Hope said it was also discussed that the miner knew he was buying another property and needed to settle the Bulga Coal sale in order to complete the new purchase.
He alleged that the proposed amendments to the lease agreement were presented as a "mere formality" to keep the Xstrata board happy and would not affect the working relationship with Hope Wine and Bulga Coal.
Bulga Coal admitted that it said Xstrata would not accept the lease at the rate of $1 per year, but denied that it made any other representations.
During a one-day hearing in November last year, Hope Wine applied to the court for a host of information and documents from the miner, spanning 16 years, before the matter was listed for trial this month.
Justice Julie Ward said that Hope believed that the depths of Bulga Coal's IT archives could contain "some smoking gun" in relation to why it did not charge rent for eight years.
Bulga Coal opposed the application on the grounds it did not have a centralised document management system for part of the time, and the documents requested were stored on employees' hard drives.
The miner said it would take between nine and 12 months to set up the necessary systems to retrieve the relevant documents and could cost more than the $1.28 million in damages being claimed.
Some of the documents requested by Hope Wine related to mine subsidence at the property.
"Hope Wine submits that the issue of mine subsidence will have an impact on both the vines and the state of the trellises," Justice Ward said. "Noting that Bulga Coal is running a 7000-hectare mine with underground seams on and in the vicinity of the vineyard."
But Hope admitted it had not investigated if subsidence was linked to crop failures at the site. At the time Justice Ward dismissed Hope's application and ordered the winemaker to pay the miner's court costs.
