Re HKSTC Warrington Fire Research Ltd.

HCCW 684/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 684 OF 2001

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D E C I S I O N

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1. After a two-and-half day hearing, I gave an order on 23 April 2002 that HKSTC Warrington Fire Research Limited (hereinafter referred to as "the Company") should be wound up. I made the usual order which I will refer to later.

2. In this petition, the Petitioner was one of the two shareholders of the Company. The petition was opposed by the other shareholder in its capacity as Opposing Contributory and Creditor. Notwithstanding that fact, the petition remained a petition which was not a shareholders dispute (as I have pointed out in paragraph 7 of my judgment) and it remained a winding-up petition based on the Company's inability to repay a debt to the Petitioner, although of course, as with any petition to wind up a company, the Court retains a discretion whether or not to order the Company to be wound up.

3. At the end of the hearing, I found that the alleged debt was indeed due to the Petitioner and after consideration of a number of grounds put up by both the Company and the Opposing Contributory and Creditor, in the exercise of my discretion, I ordered the company to be wound up.

4. I gave the usual order which included an order that the Petitioner's costs should be borne out of the assets upon liquidation and that the Opposing Contributory and Creditor should bear its own costs.

5. I have now been asked to depart from that general rule as to costs and to make an order that the Opposing Contributory and Creditor pay the Petitioner's costs, and indeed even the Company's costs of opposing the petition.

6. Costs are of course in the discretion of the Court and I have found, after considering the materials placed before me and Counsel's submissions, that in this case, there is nothing to warrant a departure from the usual order as to costs.

7. In my view, it cannot be said that the Opposing Contributory and Creditor's opposition was unreasonable. This was not a case such as Re Datacom [2000] 2 HKC 241 where the only opposition came from the contributory in its capacity only as contributory. Here, Warrington Fire Research Group Limited, the Opposing Contributory, was also a substantial creditor of the Company which had invested a large amount of money into the Company. As such it was entitled to present its view to the Court whether, in the light of all the circumstances, the Court should exercise its discretion whether to order the Company to be wound up.

8. I had made no finding of any lack of bona fides on the part of the Opposing Contributory and Creditor and I have left open the conduct of the Opposing Contributory and Creditor in incorporating a company of a similar name to the Company when the co-operation between the Petitioner and the Opposing Contributory and Creditor broke up.

9. Further, it is clear that mere self-interest on the part of an Opposing Contributory and Creditor is not in itself objectionable such as to warrant a departure from the usual order as to costs. In the circumstances, I would decline to vary the usual order as to costs.