BOZELL ASIA (HOLDING) LTD v. CAL INTERNATIONAL LTD AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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DECISION ON COST

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1. I am not going to give a detailed Decision on this aspect of this case since I think it is very clear. First of all, I make the order for winding up under Section 177(1)(d). In view of the practice of the court and the authorities, it is wrong to order a stay at this stage and I refuse any application for stay. If grounds are shown to apply for a stay at a later stage application can be made then, but at this stage I see no reason for granting a stay and my understanding of the law and practice is it would be wrong to do so.

2. As regards the appointment of Joint Liquidators, I will adjourn that application and that can be renewed as and when the paper work has been prepared. In view of the circumstances and in view of the identity of the proposed Joint Liquidators and their previous role as partners of the firm of auditors of the company, I foresee there is little difficulty in their appointment and indeed I apprehend it would be very much the Official Receiver's own wishes that other Liquidators are appointed.

3. As regards the costs, the costs of the winding up petition should be paid by CAL. They were the Respondents. In effect this was contested litigation between CAL and the Petitioner and I think the costs should follow that particular event.

4. As regards the Miscellaneous Proceedings what I indicated in my judgement was that, in view of the way Section 228A is worded, it is really for those seeking to restrain the further continuation of such proceedings to establish grounds as to why the court should grant a stay. Whereas I doubted that the circumstances provided good and sufficient reasons for the use of 228A rather than one or other of the other provisions for winding up, as I indicated on page 24 of my judgement it would really be a case it seems to me, that the Court would largely be guided by the question of the insolvency or otherwise of the company, as proved, in deciding whether to exercise its discretion to stay the proceedings. In the upshot, I stayed the Section 228A proceedings because the compulsory winding up was proceeding and, of course, one could not have 2 sets of winding up proceedings going simultaneously.

5. At the end of my judgement, I said that the costs in so far as they had been duplicated should be disallowed. Mr. Tong QC, on behalf of the petitioners in the compulsory winding up and the respondents in the Miscellaneous Proceedings, has argued that there should be no order as to costs on the Miscellaneous Proceedings. I consider that in view of the issues that were involved and the decision that I came to, which was perhaps not based on the issues which were argued between the parties but more as I saw it myself, I consider that the fair order is that there should be no order for costs on the Miscellaneous Proceedings and I so order.