SUMMIT PRESTIGE ENTERPRISES LTD v. PEAK NO. 1 HOLDINGS LTD

HCCW 106, 107, 108, 109/2024

[2024] HKCFI 999

HCCW 106/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP)  PROCEEDINGS NO 106 OF 2024

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AND

HCCW 107/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP)  PROCEEDINGS NO 107 OF 2024

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________________________

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AND

HCCW 108/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP)  PROCEEDINGS NO 108 OF 2024

________________________

________________________

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AND

HCCW 109/2024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES (WINDING-UP)  PROCEEDINGS NO 109 OF 2024

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D E C I S I O N

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1.  There are 8 summonses before the court:

(1)  The first 4 summonses dated 26 February 2024 (“Continuation Summonses”)  issued by the Petitioners for continuation of the orders made by this Court on 23 February 2024 appointing Mr Edward Middleton and Ms Tiffany Wong as provisional liquidators over the Companies[1] (together “PLs”)  upon the ex parte applications made by the Petitioners on the same day (“Appointment Orders”). 

(2)  The other 4 summonses dated 5 March 2024 (“Discharge Summonses”)  purportedly issued by (a)  Peak No. 1 Holdings Limited (“Peak”), the respondent in HCCW 106/2024; (b) Seaside Holdings Limited (“Seaside”), the respondent in HCCW 107/2024; (c)  Mid-Levels No. 1 Holdings Limited (“Mid-Levels”), the respondent in HCCW 108/2024; and (d)  Zhengtan Holdings Limited (“Zhengtan”), the respondent in HCCW 109/2024 (collectively “Companies”)  to discharge and/or set aside the Appointment Orders or alternatively, to stay the Appointment Orders pending final determination of the appeal against the “WU Order” (as defined in §7 below)  and the proceedings commenced in the names of the Petitioners[2] against the Liquidators and the registered agent of the Petitioners[3] in BVIHC(COM)  No. 159 of 2023 (“BVI Proceedings”).

2.  I use the word “purportedly” as it has not been established by  the 6 individuals purporting to act as directors of the Companies (as described in §15(2)-(4)  below)  (“Purported Directors”)  that they had been properly appointed as directors. 

3.  More importantly, even if (contrary to my view)  the Purported Directors were properly appointed and have authority to act on behalf of the Companies, I do not think that they have any valid ground to seek a discharge or stay of the Appointment Orders.  

A.  BACKGROUND

A1.  CPG

4.  The dispute arose out of the liquidation of China Properties Group Limited (“CPG”), a company incorporated in the Cayman Islands whose shares were until 4 August 2023 listed on The Stock Exchange of Hong Kong Limited. 

5.  Prior to its liquidation, CPG:

(1)  was an investment holding company which, through its direct and indirect subsidiaries incorporated in the BVI, Hong Kong and the Mainland, engaged in petroleum trading and property development business in the Mainland (together “Group”);

(2)  had a principal place of business at 14/F Wheelock House, 20 Pedder Street, Hong Kong (“Premises”);

(3)  had a majority shareholder, Hillwealth Holdings Limited, which is a company owned and controlled by Mr Wong Sai Chung (汪世忠)  (“Mr Wong”); and

(4)  was under the management and control of its executive directors which included (a)  Mr Wong, (b)  Mr Wang Shih Chang George (汪世昌), the elder brother of Mr Wong (“George Wang”), and Mr Xu Li Chang (徐禮昌)  (“Mr Xu”)  (collectively “Former Directors”). 

6.  On 28 February 2022, a winding-up petition based on insolvency ground was presented by a creditor against CPG in HCCW 67/2022.

7.  After a contested hearing, on 31 May 2023, Anthony Chan J ordered CPG to be wound up (“WU Order”)[4]. Although CPG filed a notice of appeal in CACV 197/2023 against the WU Order (“WU Appeal”), no further step has been taken to pursue the Appeal after the filing of a notice of setting down on 28 June 2023.

8.  On 23 June 2023, the Judge made a regulating order under ss.227-227B of Companies (Winding Up and Miscellaneous Provisions)  Ordinance (Cap. 32)  (“CWUMPO”)  against CPG and appointed Mr Middleton and Ms Tiffany Wong (i.e. PLs)  as liquidators of CPG (together “Liquidators”).

9.  The Liquidators considered that the Former Directors could not pass any resolution without giving notice to the non-executive directors of CPG who had not resigned, whereas the Former Directors claimed that all the non-executive directors had resigned[5]. This however is not a real issue.  It is clear that upon the making of the WU Order, the Former Directors ceased to have any power to act in the name or on behalf of CPG other than for the limited purpose of pursuing the WU Appeal or seeking a discharge of the appointment of the Liquidators (Re Union Accident Insurance Co [1972] 1 WLR 640; Fletcher, The Law of Insolvency, 5^th ed., §22-102). 

10.  The principles are well-established but it is worth repeating here as the Former Directors repeatedly ignored the principles and continued to act as if they had power to act in the name of CPG and even went so far as to cause legal proceedings to be commenced in the name of CPG against the Liquidators in HCMP 1015/2023.

11.  The statutory scheme of winding-up has been described by Lord Diplock in Ayerst v C&K (construction)  Ltd [1976] AC 167, at 176E-177D as follows:

“… the making of a winding-up order brings into operation a statutory scheme for dealing with the assets of the company that is ordered to be wound up. The scheme is now contained in Part V of the Companies Act 1948 and extends to voluntary winding as well as to compulsory winding up; but in so far as it deals with compulsory winding up its essential characteristics have remained the same since it was first enacted by the Companies Act 1862…..

Upon the making of a winding-up order:

(1)  The custody and control of all the property and choses in action of the company are transferred from those persons who were entitled under the memorandum and articles to manage its affairs on its behalf, to a liquidator charged with the statutory duty of dealing with the company’s assets in accordance with the statutory scheme (section 243[6]). Any disposition of the property by the company otherwise than by the liquidator is void (section 227[7]).

(2)  The statutory duty of the liquidator is to collect the assets of the company and to apply them in discharge of its liabilities (section 257(1))[8]. If there is any surplus he must distribute it among the members of the company in accordance with their respective rights under the memorandum and articles of association (section 265[9]). In performing these duties in a compulsory winding up the liquidator acts as an officer of the court (section 273[10]); and if the company is insolvent the rules applicable in the law of bankruptcy must be followed (section 317[11]).

(3)   All powers of dealing with the company’s assets, including the power to carry on its business so far as may be necessary for its beneficial winding up, are exercisable by the liquidator for the benefit of those persons who are entitled to share in the proceeds of realisation of the assets under the statutory scheme….”

12.  The fact that the Former Directors did not have any power to cause CPG to commence HCMP 1015/2023[12] or to pass any resolutions on behalf of CPG to change the board of the Petitioners had been raised by the Liquidators repeatedly but were ignored by the Former Directors.  To-date, the Former Directors and their solicitors, Messrs. Kobre & Kim (“KK”), have not been able to show that the acts taken by the Former Directors in the name or on behalf of CPG after the WU Order are valid and effective. 

A2.  Petitioners

13.  The Petitioners (i.e. One World, Summit and Top Integrated):

(1)  are companies incorporated in the BVI on 5 January 2022;

(2)  are wholly owned subsidiaries of CPG;

(3)  have since the incorporation of the Companies on 11 January 2023 been the sole shareholders of the Companies;

(4)  were controlled by Mr Wong as their sole director until 24 July 2023; and

(5)  have since 24 July 2023 been managed by Tiffany Wong (one of the Liquidators)  in her capacity as their sole director.

A3.  Companies

14.  On 11 January 2023, the Companies were incorporated under the Companies Ordinance (Cap. 622)  (“CO”)  and became the registered owners of all the equity in 4 property holding companies established in the Mainland which, in turn, own substantial real estate projects in Chongqing city (collectively “Chongqing Projects”).  Details of the Companies and the Chongqing Projects are as follows[13]:

Companies	Shareholders	Principal Assets
Sea Side	One World Group Ltd (“One World”)  (999 shares)   Ms Yu Ling Ling (余玲玲)  (“Yu”)  (1 share)	100% equity in Chongqing Yinwei Real Estate Co. Ltd (重慶茵威房地 產有限公司), which owns重慶世貿廣場-中央公園A區項目   (legal representative: Mr Wong until 11/9/2023)
Peak	Summit Prestige Enterprises Ltd (“Summit”)  (999 shares)   Yu (1 share)	100% equity in Chongqing Peak No.1 Real Estate Co., Ltd (重慶山頂1號房地產有限公司), which owns 重慶世貿廣場-中央公園B區項目   (legal representative: Mr Wong until 11/9/2023)
Mid-Levels	Top Integrated Group Ltd (“Top Integrated”) (999 shares)   Yu (1 share)	100% equity in Chongqing Banshan 1 Real Estate Co., Ltd (重慶半山1號房地產有限公司), which owns 重慶世貿廣場-半山公園項目   (legal representative: Mr Wong until 11/9/2023)
Zhengtan	Top Integrated (999 shares)     Yu (1 share)	100% equity in Chongqing Zhengtian Investment Ltd (重慶正天投資有限公司), which owns 重慶協和城項目   (legal representative: Yu until 10/8/2023)

15.  According to the documents filed at the Companies Registry and the information obtained by the Liquidators in January 2024, the registered office of the Companies is the Premises and the directors of the Companies are as follows[14]:

(1)  From 11 January 2023 to 23 September 2023, Yu (company secretary of CPG)  and Ms Ho Man Yi (何敏儀)  (human resources and administrative manager of the Group)  (“Ho”);

(2)  From 23 September 2023, Mr Wang Ming (王銘)  (“Wang”), Mr Hsieh Cheng Sen (謝正森)  (“Hsieh”);

(3)  On 11 January 2024, Wang and Hsieh appointed 4 additional directors, who are Mr Li Jianjun (黎建軍), Mr Wang Shixiang (汪世祥), Mr Yang Hu (楊虎)  and Mr Chen Gang (陳剛)  (collectively “4 Appointees”).  This however was only made known to the Liquidators on 26 January 2024, 2 weeks after the EGMs had been held on 12 January 2024 (see §58 below). 

(4)  The 6 individuals described in §(3)  are the Purported Directors closely associated with Mr Wong and they appear to reside outside the jurisdiction.   

16.  The Chongqing Projects are subject to various security created in favour of creditors who have commenced legal proceedings in the Mainland to enforce the security over the Chongqing Projects. 

B.  OBSTRUCTIONS ENCOUNTERED BY LIQUIDATORS

17.  Despite the appointment of Liquidators, the Former Directors and former officers of CPG (i.e. Yu, Ho and Mr Lai Siu Hung, the Group’s general manager – corporate accounts department (“Lai”)  (collectively “Former Officers”))  refused to cooperate with the Liquidators.  Instead, they took elaborate steps designed to ensure that the Liquidators would not be able to gain access to or obtain control over the assets, books and records of CPG and its subsidiaries including the Petitioners and the Companies. 

B1.  Refusal to provide SOA or information about Group to Liquidators

18.  The Former Directors failed to submit any statement of affairs (“SOA”)  to the Liquidators and refused to attend any meeting with the Liquidators, which constituted a breach of s.190 of CWUMPO.

19.  Even after being ordered by the “15 Sept Order” (as defined in §40(4)  below)  to submit a SOA by 6 October 2023, Mr Wong still failed to submit any SOA until 17 October 2023.  However, apart from confirming that CPG was insolvent, no meaningful information has been provided by Mr Wong about CPG or the Group[15].

20.  Further, despite repeated requests made by the Liquidators since 21 November 2023, Mr Wong failed to attend any interview with or provide any further information about the SOA to the Liquidators[16].

B2.  Refusal to hand over Group’s Documents to Liquidators

21.  The Former Directors and the Former Officers refused to hand over the documents, books and records of CPG and its subsidiaries (including the Petitioners and the Companies), whether in physical or electronic form (collectively “Group’s Documents”), to the Liquidators even though they have no right to retain or hold onto the Group’s Documents. 

22.  The objective facts show that despite the many attempts made by the Liquidators to inspect and obtain possession of the Group’s Documents during the past 10 months, they have only been able to obtain possession of 9 out of 132 boxes of documents kept at the Premises.

23.  On 27 June 2023, the Liquidators visited the Premises with a view to secure the property, books and records of CPG pursuant to s.197 of CWUMPO.  This was met with resistance by the Former Officers who claimed that the Premises are shared and/or co-occupied with 50 (unspecified)  private companies owned or controlled by Mr Wong.  Yu even called the Police twice, who advised her to comply with the WU Order[17].

24.  Between 30 June and 3 July 2023, the Liquidators served notices pursuant to s.211 of CWUMPO requiring the Former Directors, agents and auditors of CPG to deliver, surrender or transfer to the Liquidators any money, property, or books and papers in their hands to which CPG is prima facie entitled.  However, neither the Former Directors nor the auditors complied with the notices[18].

B3.  Commencement of HCMP 1015/2023 against Liquidators

25.  On 29 June 2023, Mr Wong instructed KK to commence HCMP 1015/2023 in the name of himself (as 1^st plaintiff), CPG (as 2^nd plaintiff)  and 75 companies (as 3^rd – 77^th plaintiffs)[19] against the Liquidators and sought ex parte (on notice)  injunction to restrain the Liquidators from accessing or inspecting any documents or property at the Premises on the grounds that (1)  they belonged to CPG’s subsidiaries or Mr Wong’s private companies; and/or (2)  were subject to legal professional privilege (“LLP”).  The court did not grant any injunction[20], apparently because the parties had given a series of undertakings to the court to conduct a joint inspection of the documents and other properties kept at the Premises (“Undertakings”).[21]

26.  It is difficult to see why the Liquidators considered it appropriate to give the Undertakings in circumstances where:

(1)  KK had no authority to commence the proceedings in the name of CPG;

(2)  the Premises were the registered office of CPG and the Group, and one of the places where the Group’s Documents were kept;

(3)  the Liquidators were (and still are)  the only persons entitled to take custody and control of the documents, books and records of CPG;   

(4)  the subsidiaries are assets of CPG, and only the Liquidators are entitled to take custody and control of the subsidiaries including their documents, books and records by exercising the power of CPG qua shareholder of such subsidiaries including the power to remove and replace all their directors;

(5)  the Former Directors and the Former Officers had no power, right or interest in retaining control over CPG’s subsidiaries  (including their documents, books and records)  without the agreement of the Liquidators;

(6)  any LLP could only be claimed or asserted by the Liquidators on behalf of CPG; 

(7)  the Former Directors and the Former Officers had no power or right to claim or assert any LLP against the Liquidators, whether on behalf of CPG or CPG’s subsidiaries; and

(8)  if and insofar as there was any proper basis to suggest that there are documents belonging to Mr Wong’s private companies (“Private Documents”)  and such documents had been mixed with the Group’s Documents (none had been suggested), it was up to Mr Wong to identify those private companies and inform the Liquidators of the whereabouts of the Private Documents. Unless and until this was done, there was simply no basis for Mr Wong or the Former Officers to refuse to hand over the Group’s Documents to the Liquidators.

27.  The Undertakings proved to be problematic and unworkable in that:

(1)  the Liquidators’ requests to inspect the documents at the Premises pursuant to the Undertakings were repeatedly delayed and derailed by the various excuses or conditions deployed or imposed by the Former Officers[22];

(2)  in late July and early August 2023, the Former Officers even tried to evict the Liquidators from the Premises when the latter were attempting to collect CPG’s books and records[23];

(3)  since September 2023, no further inspection has taken place[24]; and

(4)  no step has been taken by Mr Wong or his companies to pursue the their claims in HCMP 1015/2023.

28.  As at the date of the Appointment Orders, only 9 out of 132 boxes of documents jointly inspected have been passed to the Liquidators, and those are documents in the public domain (such as announcements, annual reports and interim accounts published by CPG).  There are 116 boxes marked as “Subsidiary Disputed Items”, 5 boxes marked as “LLP Disputed Items” and 2 boxes as “documents to be further reviewed” which are locked inside a meeting room at the Premises and remain inaccessible to the Liquidators[25].

29.  There was no basis for the Former Directors or the Former Officers to refuse to handover the “Subsidiary Disputed Items” or the “LLP Disputed Items” for the reasons stated in §26 above.

B4.  Liquidators’ application under ss.286B-C

30.  By summons dated 24 August 2023 issued in HCCW 67/2022, the Liquidators applied under ss.286B-C of CWUMPO against Mr Wong, Yu, Ho and Lai for (1)  an injunction to compel them to hand over control over CPG’s subsidiaries to the Liquidators; and (2)  an order for oral examination and production of the Group’s Documents. 

31.  At the hearing on 18 October 2023, the Recorder adjourned the injunction application and gave leave to the Liquidators to withdraw those parts of the application which overlap with the relief sought in HCMP 1015/2023.  The remaining application has not been determined[26].

B5.  Liquidators’ application to discharge Undertakings

32.  On 6 October 2023, the Liquidators issued a summons in HCMP 1015/2023 to seek (1)  a discharge of the Undertakings, (2)  dismissal of the proceedings, and (3)  delivery up of all property and documentation concerning CPG (including the Companies)  located at the Premises.

33.  At the substantive hearing on 29 December 2023, the Recorder observed that the Liquidators should be entitled to have access to the Group’s Documents at the Premises and suggested the parties to agree on the terms of an order and reserved judgment[27].

34.  Not surprisingly, no agreement was reached between the parties.

B6.  Refusal to relinquish control over Petitioners

35.  Mr Wong refused to relinquish control over the Petitioners and took every conceivable steps to ensure that the Liquidators would not be able to take control over the Petitioners:

(1)  As the only shareholder of the Petitioners, CPG (under the control of the Liquidators)  was entitled to remove Mr Wong as sole director of the Petitioners, and appoint one of the Liquidators as their sole director. 

(2)  On 24 July 2023, OMC upon the instructions of the Liquidators registered the change in director by replacing Mr Wong with Tiffany Wong as sole director of the Petitioners[28].

36.  However, by KK’s letter of 24 July 2023, Mr Wong refused to accept the change in director, relying on (1)  the WU Appeal; (2)  the assertion that the regulating order allegedly did not reflect the view of the majority of creditors; and (3)  the appointment of Liquidators had not been recognised in the Cayman Islands or the BVI, as grounds in support of his refusal[29].

37.  On 30 August 2023, Mr Wong caused the Petitioners to commence the BVI Proceedings to seek an injunction to restrain the Liquidators and OMC from taking any step to take control of the Petitioners until an order for recognition and assistance has been obtained from the BVI court[30]. 

38.  The hearing of the BVI Proceedings was scheduled to be heard on 18 September 2023. 

B7.  1^st Decision & 15 Sept Order

39.  In view of the stance taken by Mr Wong, on 4 September 2023, the Liquidators applied (in HCCW 67/2022)  for inter alia (1)  an injunction to compel Mr Wong to execute written resolutions to acknowledge and ratify the appointment of Tiffany Wong as sole director of the Petitioners (“Resolutions”); and (2)  an order requiring the shares in the Companies to be vested in the names of the Liquidators pursuant to s.198 of CWUMPO[31].

40.  After a contested hearing on 11 September 2023, the Recorder handed down his Decision dated 15 September 2023 [2023] HKCFI 2346 (“1^st Decision”), holding that:

(1)  The court exercises a supervisory jurisdiction over the liquidations in Hong Kong and will make order to assist liquidators in the discharge of their duties (§§19-20). 

(2)  The court has implied jurisdiction to make whatever orders which are necessary to give effect to its own judgments. Where a winding-up order is made against a foreign company, the court may make order, by way of injunction or otherwise, against persons who are subject to the in personam jurisdiction of the court so as to make the underlying assets of the company in liquidation available to the liquidators (§21, citing Kam Leung Sui Kwan v Kam Kwan Lai (2015)  18 HKCFAR 501, §39).

(3)  The benefits to be derived from a winding up order made in Hong Kong are not dependent upon the liquidators having been recognised by another court (§§22-29).

(4)  In view of the various steps and proceedings taken by Mr Wong including commencing the BVI Proceedings to challenge the change in directorship, it was necessary for the court to grant an injunction requiring Mr Wong (who is subject to the in personam jurisdiction of the court)  (a)  to sign the Resolutions within 2 days, and (b)  to submit a SOA to the Liquidators within 21 days (“15 Sept Order”). No prejudice would be caused to Mr Wong as he had already been removed as director of the Petitioners.  The court should facilitate and promote the effectiveness and efficiency of liquidation, rather than passing the burden to the BVI courts to determine the issue (§§30-44).

(5)  It was not necessary to grant any anti-suit injunction to enjoin Mr Wong from pursuing the BVI Proceedings (§§45-46).

(6)  There was no proper basis for the court to make a vesting order sought by the Liquidators as the shares in the Companies belong to the Petitioners, not CPG (§§47-48).

(7)  Mr Wong was ordered to provide a SOA and to file an affirmation setting out his complete dealings with CPG and its subsidiaries.  There was no excuse for Mr Wong not to comply with his obligation under s.190 of the CWUMPO (§§49-51).   

41.  The 15 Sept Order was served on Mr Wong on the same day.  In the evening of 17 September 2023, Mr Wong through KK provided the signed Resolutions dated 17 September 2023 to the Liquidators[32].

B8.  Steps taken to frustrate 15 Sept Order

42.  However, the 15 Sept Order did not deter the Former Directors (and their associates)  from taking steps to prevent the Liquidators from taking control over the Petitioners.

43.  Shortly before the first hearing of the BVI Proceedings, on 18 September 2023, KK’s BVI office sent the minutes and resolutions passed by George Wang and Mr Xu qua directors of CPG on 16 September 2023 purporting to approve (“1^st Purported CPG Resolutions”):

(1)  the appointment of Wang and Hsieh as additional directors of the Petitioners; and

(2)  the removal of Mr Wong as director of the Petitioners with effect from 16 September 2023 (i.e. before Mr Wong signed the Resolutions on 17 September 2023 in compliance with the 15 Sept Order)[33].

44.  This was followed by the request made by Wang on 19 September 2023, where he relied on the 1^st Purported CPG Resolutions and required OMC to change the director of the Petitioners from Tiffany Wong to himself and Hsieh[34].

45.  On 21 September 2023:

(1)  George Wang and Mr Xu passed further resolution qua directors of CPG purportedly resolving that the Resolutions signed by Mr Wong was invalid[35] (“2^nd Purported CPG Resolution”). 

(2)  This was followed by a request made by KK requesting the Liquidators to give an undertaking to the BVI court that they will not take any steps to deal with the assets of the Petitioners in the BVI (i.e. the shares in the Companies)  pending final determination of the BVI Proceedings.  The Liquidators (rightly)  did not give any undertaking requested by KK[36].

46.  For the reasons discussed in §§9 - 12 above, the 1^st and 2^nd Purported CPG Resolutions were invalid as George Wang and Mr Xu had since 31 May 2023 (i.e. date of WU Order)  ceased to have power to pass any resolutions in respect of CPG other than for the limited purpose of the WU Appeal.  Consequently:

(1)  Tiffany Wong remains the sole director of the Petitioners; and

(2)  neither Wang nor Hsieh were properly appointed as directors of the Petitioners, and they did not have proper authority to instruct KK or KK BVI to act on behalf of the Petitioners in the BVI Proceedings.

B9.  BVI court refused to grant injunction against Liquidators

47.  Nevertheless, Wang and Hsieh continued to act as if they had been properly appointed as directors of the Petitioners and caused the Petitioners to file an application on 3 October 2023 in the BVI Proceedings to seek an interim injunction to enjoin the Liquidators from using or relying on the Resolutions to justify the appointment of Tiffany Wong as sole director of the Petitioners[37].

48.  At the hearing on 20 November 2023, Wallbank J observed that the Liquidators were entitled to take control of CPG and procured CPG to exercise its right qua shareholder of the Petitioners without first seeking an order for recognition or assistance from the BVI court, and dismissed the Petitioners’ application for interim injunction[38]. 

B10.  Liquidators’ inability to gain control over Companies

49.  The Liquidators have not been able to obtain control over the Companies or their documents, books and records:

(1)  On 16 August 2023, the Liquidators directed Yu and Ho, who were director and company secretary of the Companies at the time, to appoint Tiffany Wong as sole director of the Companies[39].

(2)  In their letter dated 25 August 2023, Yu and Ho saw fit to question the authority of the Liquidators to act on behalf of the Petitioners as a matter of BVI law[40].

50.  In view of the obstructive stance adopted by the Former Directors and the Former Officers in the past 4 months, the Liquidators issued an ex parte summons dated 4 October 2023 (in HCCW 67/2022)  to seek:

(1)  an injunction against the Former Directors to enjoin them from acting as directors of CPG or exercising the voting right in respect of CPG’s shares in the Petitioners;

(2)  a direction under s.200(3)  of CWUMPO that as a matter of Hong Kong law, (a)  Tiffany Wong is the sole director of the Petitioners, (b)  she is the only person empowered to vote in respect of the Petitioners’ shares in the Companies, and (c)  the Liquidators are under a statutory obligation to collect and realise the Petitioners and the Companies and their assets; and

(3)  an order under s.570 of the CO to convene general meetings of the Companies for the purpose of allowing the Petitioners (acting by Tiffany Wong)  to pass resolutions to appoint new directors, together with a direction that the Petitioners shall constitute quorum for such meetings[41] (“s.570 Application”). 

51.  The s.570 Application was heard on 18 October 2023 and adjourned for arguments before the Recorder on 6 December 2023. 

52.  In the meantime, on 9 October 2023, the Liquidators became aware that certain ND2A Forms had been filed at the Companies Registry for the purpose of notifying the public of the changes in directors of the Companies but the Forms were not available for inspection. It was only after protracted exchange of correspondence (during which the Registrar of Companies had to obtain consent from the persons who submitted the Forms)  that on 15 January 2024 the Forms were made available to the Liquidators[42].

53.  On 24 November 2023, Tiffany Wong (as sole director of the Petitioners)  requisitioned the directors (whose identity were not known to the Liquidators)  to call an extraordinary general meeting of each of the Companies in accordance with article 28(3)  of their articles of association and s.566 of the CO (collectively “EGMs”)  for the purpose of appointing herself, Mr Middleton and 3 other persons nominated by the Liquidators as additional directors[43] (“Requisitions”).

54.  At the substantive hearing of the s.570 Application on 6 December 2023:

(1)  Mr Wong gave undertaking to the court that he will not act or hold himself out or otherwise give any instruction, without leave of the court, as director of CPG or in any way represent CPG including by voting or purporting to vote CPG’s shares in the Petitioners;

(2)  The court granted an injunction against George Wang and Mr Xu in the same terms of the undertaking given by Mr Wong;

(3)  Yu undertook in writing to attend the EGMs of the Companies if they were convened in accordance with the terms of her undertaking[44];

(4)  The Recorder stated that there was insufficient evidence to demonstrate that it was “impracticable” to convene EGMs of the Companies as required by s.570, and the Companies should be given a further opportunity to call the EGMs in accordance with the Requisitions[45];

(5)  The Recorder observed that as a matter of Hong Kong law, since 24 July 2023, Tiffany Wong had been the sole director of each of the Petitioners, and the only person who has authority to conduct or direct the affairs and dealings of the Petitioners[46]; and

(6)  The Recorder indicated that the parties could inform the court should any problem arose in respect of the EGMs, and ordered the Liquidators to pay 70% of the costs of the s.570 Application[47].

55.  On 15 December 2023, notices to convene EGMs of the Companies to be held on 12 January 2024 were issued[48]. However, at the EGMs held by way of a hybrid meeting at the Premises[49]:

(1)  A person identified himself as “Mr Li” claimed that he was a director and chairman of the board of each of the Companies, and acted as chairman of the EGMs despite the challenge made by Tiffany Wong;

(2)  Wang asserted that by virtue of a “BVI legal Opinion” (which he did not produce), he was the lawful proxy holder of each of the Petitioners in respect of the 999 shares in each of the Petitioners;

(3)  The resolution to appoint 5 additional directors (nominated by the Liquidators on behalf of CPG)  in respect of each of the Companies was put to vote: Tiffany Wong voted for the resolution on behalf of each of the Petitioners, while Wang purportedly voted against the resolution on behalf of the Petitioners;

(4)  Mr Li without giving any reason said that Tiffany Wong did not have authority to vote on behalf of the Petitioners, and “to be fair”, he would disallow the votes casted by Mr Li on behalf of the Petitioners;

(5)  As a result, only the one share held by Yu in each of the Companies was accepted, and she voted against the proposed resolution; and

(6)  Throughout the EGMs, Mr Li refused to entertain the objections and questions raised by Tiffany Wong. 

56.  As stated above, on 15 January 2024, the Forms ND2A filed at the Companies Registry were finally released to the Liquidators.  They reveal that since 23 September 2023[50]:

(1)  Yu has ceased to be director and company secretary while Ho has ceased to be director of the Companies; and

(2)  Wang has been a director and company secretary while Hsieh has been a director of the Companies.

57.  The 4 Appointees (§15(3)  above)  were not mentioned in the Form ND2As made available to the Liquidators. It was only on 19 January 2024 (i.e. one week after EGMs)  that additional Forms ND2A were filed at the Companies Registry but the same were not available for inspection[51].

58.  It was only after the Liquidators’ solicitors wrote to Messrs. KB Chau & Co. (“KBCC”), solicitors purportedly acting for the Companies[52], to complain about the lack of authority on the part of Wang and Hsieh and the irregularity in the conduct of the EMGs that on 26 January 2024, KBCC provided the written resolutions purportedly passed by the directors of the Companies dated 11 January 2024 (i.e. one day before the EGMs)  resolving to appoint the 4 Appointees as additional directors of the Companies on the same day[53].

B11.  Changes in legal representatives of subsidiaries in Mainland

59.  While Mr Wong and his associates remained in control of the Companies, they took steps to change the legal representatives of the 4 wholly owned subsidiaries which hold the Chongqing Projects from Mr Wong and Yu (who are subject to the jurisdiction of the court)  to Wang (who are outside the jurisdiction)  on 10 August 2023 and 11 September 2023[54]. Although Mr Wong sought to justify the changes by suggesting that it was necessary and appropriate for “restructuring” or re-financing of CPG and of the Group, no restructuring or re-financing has ever been put forward by Mr Wong[55].

C.  APPOINTMENT ORDERS

C1.  Ex parte applications

60.  It was against the above background in particular, the extensive obstructions posed by the Former Directors, the Former Officers and the Purported Directors to prevent the Liquidators from taking control over the Companies and the Chongqing Projects that the Liquidators considered that there was an “overwhelming need” for immediate appointment of provisional liquidators over the Companies. 

61.  At the ex parte application, the Liquidators contended that there is a good prima facie case for winding-up the Companies on the just and equitable grounds because:

(1)  There had been an irretrievable breakdown of mutual trust and confidence between each of the Petitioners and the Purported Directors who remained in control of the Companies;

(2)  There had been misconduct, suspicious conduct and low commercial morality in the conduct of the Companies;

(3)  The Purported Directors had demonstrated a lack of probity;

(4)  The substratum of the Companies had failed and/or had never existed since inception;

(5)  The Petitioners as majority shareholder had been excluded from participating in the management of the Companies;

(6)  There was pubic interest in conducting a thorough investigation into the Companies and the Group;

(7)  There was a need to progress the liquidation of CPG; and

(8)  They had on behalf of the Petitioners attempted to pursue all alternative remedies but had not been able to obtain control over the Companies and, as such, there was no reasonable alternative other than seeking winding-up orders and appointment of provisional liquidators over the Companies [56].

62.  Each of the above grounds were explained in TW 1^st and repeated in the Petitions. 

63.  It is difficult to see why the Petitioners have to rely on these extensive grounds in seeking to wind up the Companies when it is indisputable that they are the only persons entitled to take control over the Companies.  It would not be in the interests of the creditors of CPG to see the Petitioners incurring much time and costs in pursuing the Petitions when it does not appear that there is any person who has real interest in the Companies will oppose the Petitions.

64.  As regards the circumstances justifying the appointment of PLs, the Liquidators relied on the following matters[57]:

(1)  The Liquidators had already attempted but were unsuccessful in taking control over the Companies through other means, as Mr Wong and his associates had taken steps to prevent the Liquidators from taking control at every juncture;

(2)  The need to preserve the assets of the Companies before they were moved out of the control of CPG and the Group;

(3)  The urgent need to commence investigations in the affairs of CPG and the Group, which was the reason for the court making the regulating order;

(4)  The urgent need to facilitate the Liquidators in carrying out their function was the basis for the Recorder granting the 15 Sept Order against Mr Wong;

(5)  In view of their past conduct, if PLs were not appointed, Mr Wong and those in control of the Companies would most likely engage in further detrimental actions and misconduct against the Companies and the Group; and

(6)  Due to the actions of Mr Wong and his associates, there was uncertainty in the identity of the directors of the Companies.  The appointment of PLs would remove such uncertainty and immediate steps can be taken to amend the records filed at the Companies Registry.   

65.  As regards the justification for making the application on ex parte basis, the Liquidators pointed to the risk that the Purported Directors who controlled the Companies and/or their associates including Mr Wong and Yu, would very likely take steps to prevent the Liquidators from being appointed as provisional liquidators of the Companies or from exercising control over the sub-subsidiaries of CPG, and there was a risk that they might transfer the shares of the Companies or the directorship to parties not in Hong Kong or otherwise subject to the jurisdiction of the court[58].

C2.    Applicable principles

66.  The principles governing ex parte application are well established:

(1)  An ex parte application should only be made where either the delay would cause injustice to the applicant, orthe defendant would take action which may nullify the effect of the injunction (Ho Tak Eng v Fame Brilliant Ltd [2006] 1 HKLRD 34). 

(2)  The need to provide good grounds (typically the need for secrecy or great urgency)  to justify the court taking the exceptional course of hearing the application in the absence of the other party are reiterated in PD 3.7[59], at §5. 

67.  As regards appointment of provisional liquidators, the principles have been stated in Re Next Digital Limited [2021] HKCFI 3087, §§16-20, and may be summarised as follows:

(1)  The applicant needs to satisfy the court that (a) there is a good prima facie case for a winding-up order at the hearing of the petition; and (b)  in the circumstances of the case, it is right that a provisional liquidator should be appointed (Re Union Accident Insurance Co Ltd [1972] 1 All ER 1105, at 1110a-c; McPherson & Keay, The Law of Company Liquidation, 5^th ed., §6-011).

(2)  The basis for appointing provisional liquidator is to protect the assets of the company and hence some danger to the assets, not limited to malfeasance, had to be shown; the appointment must be for the purpose of the winding-up; and the court would consider whether the appointment would serve any useful purpose (Re Legend International Resorts Ltd [2006] 2 HKLRD 192, §§25-27, 35-37, 49-50). 

(3)  Suspicious circumstances coupled with a need to preserve the status quo to ensure the least possible harm to all concerned pending the hearing of the petition, or a need for an independent investigation of the affairs of the company without delay are sufficient to justify appointment of provisional liquidators (Re Luen Cheong Tai International Holdings Ltd[2002] 3 HKLRD 610, §§11-12;Re China Metal Recycling (Holdings)  Ltd, HCCW 210/2013, 12 November 2014, §29).

(4)  Appointment of provisional liquidators may also be justified where there is paralysis of the company, or where a company has no directors to manage its affairs (McPherson & Keay, §§6-012 to 6-013; Tickle v Crest Insurance Co of Australia Ltd (1984)  2 ACLC 493[60]).   

(5)  Ultimately, whether provisional liquidators should be appointed has to be decided based on commercial realities, the degree of urgency and need established by the petitioner, and the balance of convenience according to the circumstances (Re Boldwin Construction Co Ltd [2003] 2 HKLRD 237, §29(4), per Kwan J).   

C3.  Reasons for making Appointment Orders

68.  After considering the evidence and submissions made on behalf of the Petitioners (acting by Tiffany Wong), this Court was satisfied that there were good grounds for the court to make the Appointment Orders on an ex parte basis for the following reasons.

69.  First, it is indisputable that upon their appointment, the Liquidators are the only persons entitled to take control over the Petitioners, the Companies and the Chongqing Projects, but the Companies remained under the control of the Purported Directors as a result of the wrongful actions taken by the Former Directors, the Former Officers and the Purported Directors in the past 10 months.  Unless and until the Purported Directors are displaced, the Liquidators had no means to ensure that the assets of the Companies would not be dissipated or misapplied by the Purported Directors, who have no right or interest in the Companies.  This fact alone shows that there is a prima facie case for winding up order the Companies, should it be necessary to do so.  It also provides a good reason for the court to appoint the PLs over the Companies. 

70.  Second, the extensive actions taken by Mr Wong and his associates to prevent the Liquidators from taking control over the Petitioners and the Companies, both before and after the 15 Sept Order, left the court with much unease that if the Purported Directors were allowed to remain in their position, they would do anything to fit their own or Mr Wong’s purposes and without any regard to the interests of CPG or the Companies; and they would take steps to nullify any order which would be made by the court after hearing the parties’ arguments:  

(1)  It was abusive for Mr Wong to flout the 15 Sept Order by signing the Resolutions on the one hand and procuring his associates (George Wang and Mr Xu)  to pass the 1^st and 2^nd Purported CPG Resolutions for the purpose of invalidating the very Resolutions he signed.

(2)  There was simply no basis for Mr Wong and his associates (the Former Officers, Wang and Hsieh)  to deny Tiffany Wong’s authority to represent the Petitioners after 24 July 2023, or to change the constitution of the boards of the Companies against the instructions of Tiffany Wong.  This was particularly so after the court had held (in the 1^st Decision)  that Tiffany Wong was the only person with authority to act on behalf of the Petitioners.

(3)  It was disturbing to see that after Mr Wong (through his counsel)  had successfully persuaded the court that it was not “impracticable” for the Companies to hold any EGMs as requisitioned by the Petitioners, he saw fit to procure his associates (Yu, Wang, Hsieh and “Mr Li”)  to defeat the votes casted by Tiffany Wong on behalf of the Petitioners at the EGMs for appointment of 5 additional directors.

(4)  The conduct of Mr Wong’s associates at the EGMs could only be described as contumelious, as by the time of the EGMs, both the Hong Kong court and the BVI court had held that Tiffany Wong was the only person with authority to represent the Petitioners.

71.  Third, very substantial time and costs had already been incurred by the Liquidators in the past 10 months in trying to take control over the Petitioners, the Companies and the Chongqing Projects, which would not have been unnecessary had the Former Directors and the Former Officers cooperated with the Liquidators in the same way as any former directors and officers of a company being wound up by the court.  The Appointment Orders though draconian, were the only effective means to displace the Purported Directors and allow the Liquidators to take control over the Companies, which are very substantial assets of CPG. 

72.  Fourth, the constant changes in the constitution of the boards of the Companies at the behest of Mr Wong’s associates left much uncertainty in the state of the Companies and if allowed to continue, would only result in further dispute and litigations between Mr Wong’s camp and the Liquidators.  The Appointment Orders would put such uncertainty and dispute to an end.

C4.  Grounds for discharge

73.  In his Skeleton, Mr Victor Joffe SC[61], counsel for the Companies, submits that if the court is not minded to discharge the Appointment Orders, there should be an interim stay of the Appointment Orders pending determination of the 8 summonses at the substantive hearing, given that the PLs have since the Appointment Orders already seized and obtained possession of all the books and records from the Premises.  Following this Court’s indication that it is not minded to grant an interim stay of the Appointment Orders, the Companies elect to pursue the applications for discharge of the Appointment Orders. 

74.  Mr Joffe submits that the court should discharge the Appointment Orders for the following reasons.

75.  First, there was no basis for making the applications on ex parte basis given that:

(1)  Ex parte relief is only justified in cases of extreme urgency or where there is a need for secrecy (C v D1 & D2 [2021] HKCFI 228, §27).  Lack of justification for applying on an ex parte basis is an independent ground for setting aside or not continuing the ex parte order (C v D1 & D2, §26; Yifung Developments Ltd v Liu Chi Keung [2014] 4 HKLRD 483, §§15-16, citing Luck Continent Limited v Leonora Yung and Ors, CACV 42/2010, 22 October 2010,  §§19-20).

(2)  The Petitioners’ applications clearly lack any real urgency: (a)  the alleged obstructions of the liquidation of CPG are not new as the allegations “span back many months”.  The Petitioners failed to draw to the court’s attention that their allegations of obstruction had been comprehensively dealt with by Mr Wong and Yu in their affirmations filed in the past; and (b)  the events at the EGMs took place 5 weeks before the ex parte applications. 

(3)  The Petitioners’ reliance on the 1^st Decision in an attempt to justify the urgency of the application is “wrong and liable to mislead” as the application before the Recorder was made by way of inter partes summons, and the Recorder emphasised the importance of due process and the need for the respondent to file evidence to contest the application.  The Petitioners failed to highlight the fact that they had attempted to make an ex parte application by “Ex Parte Summons” dated 4 October 2023 in HCCW 67/2022 but the Recorder declined to hear the matter on ex parte basis, and adjourned it for arguments on 6 December 2023. 

(4)  There was no possible argument on “secrecy”.  The parties’ dispute had been “live and ongoing for many months”, and there was no element of “secrecy” on any of the allegations of the Petitioners including as to the conduct of the EGMs.  According to Hsieh, there had “never been any dissipation of assets nor changes in corporate structure within the Group” and the Petitioners failed to fairly highlight this to the court. 

76.  Second, there were serious material non-disclosures on the part of the Petitioners in that they failed to draw to this Court’s attention of the following matters:

(1)  The lack of urgency and secrecy in their applications.  The court would be very reluctant to appoint provisional liquidator because of the expense involved, the slur cast on the business and the risk of injustice to the respondent (Hollington on Shareholders’ Rights, 10^th ed., §8-42).  This was compounded by the fact that as the Petitioners accepted, there is a lack of precedent for the applications, and their unusual applications “do not fit conveniently into any particular category of previous examples”[62].

(2)  The allegations in relation to the EGMs was “grossly incomplete and unfair”.  In particular, they failed to (a)  refer (in TW 1^st)  to the fact that the chairman was expressly exercising his powers to disallow voting under article 38, which provides that any objection to the qualification of any person voting may only be raised at the meeting, and the chairman’s decision is final; (b)  disclose the relevant law that the chairman’s decision “can only be challenged for bad faith and if it is exercised knowingly for an improper purpose (Kwok Hiu Kwan v Johnny Chen & ors [2020] HKCA 972, §§8, 41-50); and (c)  disclose the fact that in the absence of any suggestion that the chairman’s decision was made in bad faith, it was not open to the Petitioners to seek to dispute his decision. 

(3)  There were a number of alternative legal avenues which the Petitioners (or Tiffany Wong)  could have taken including (a)  making application to invalidate the chairman’s decision; and (b)  applying to the court for further directions, as  stated by the Recorder at the hearing on 6 December 2023.

(4)  The argument that upon the liquidation of CPG, there was a “statutory trust” over all the assets of CPG “including indirect or derivative interests in the [Companies]” is plainly wrong, and has been rejected by the Recorder on multiple occasions on the basis that “it ignores one of the most fundamental principles of company law ie a shareholder of a company has no legal or beneficial interests in the company’s assets”[63].

(5)  The chairman’s decision at the EGMs (a)  was supported by the “independent legal opinion prepared by the BVI law firm Collas Crill”; (b)  is consistent with the Liquidators’ own position at the hearing on 18 October 2023 in HCCW 67/2022 that under the BVI law, the Liquidators were “not recognised as the directors of the BVI companies”, and (c)  is consistent with Tiffany Wong’s acceptance that the Liquidators had not applied for recognition in the Cayman Islands and the Cayman court may refuse to recognise the Liquidators and their control over CPG and their assets[64]. The issue as to whether Tiffany Wong has authority to act on behalf of the Petitioners is “pending determination by the BVI Court in the BVI Proceedings”, as expressly recognised by the Recorder’s Decision in Re China Properties Group Ltd (in liq) [2024] HKCFI 539 handed down on 29 February 2024 (on s.570 Application), §§28-29. 

(6)  The “various safeguards and undertakings which were already in place” (i.e. the Undertakings); and the availability of alternative remedies including the pending applications already made by the Liquidators.

(7)  The assets of the Companies were not in any imminent danger nor did they require protection by the appointment of PLs (David Golan v Janek Davitashvili, HCCW 255/2016, 1 March 2017, §71; Re Vision International Investment (HK)  Ltd, HCCW 1277/2004, 11 January 2006, §101).  The appointment of PLs is “an unnecessary and drastic measure, which would cause irreparable harm to [the Companies] and the subsidiaries”.

(8)  The undertakings as to damages were given by the Petitioners, which cannot give any meaningful redress for the irreparable harm which might be suffered by the Group.   

77.  I do not think that there is any valid ground for the court to discharge the Appointment Orders, let alone at the behest of the Purported Directors who purported to act on behalf of the Companies. 

78.  Contrary to Mr Joffe’s arguments, the Petitioners made the ex parte applications on the grounds of urgency and need for secrecy.  The latter was referred to in TW 1^st §180 (see §65 above).  For the reasons stated in §70 above, this Court considered that the need for secrecy provided a justification for the applications to be heard on an ex parte basis.

79.  I do not think that there were material non-disclosures as submitted by Mr Joffe.  I deal with the points made by Mr Joffe in the same order as they appear in §76 above.

(1)  §76(1): There were valid ground for the Petitioners to make the applications on an ex parte basis.  See §78 above.  I do not think it is right to characterize the applications as “unprecedented”.  Apart from the example in Nefertiti Estates Ltd [2003] EWHC 1709 (Ch)  referred to in §75 of Mr Wood’s Skeleton at the ex parte applications, the court did in the past appoint the liquidators of the holding company as provisional liquidators of the subsidiaries where the circumstances warranted the appointment. 

(2)  §76(2): The description of the Petitioners on the EGMs was fair and complete.  In the first place, it had not been explained, let alone established, whether before or at the EGMs, how “Mr Li” could assume the position as chairman of the EGMs when he had not been appointed as a director of the Companies.  As stated in §58 above, it was only on 26 January 2024 (i.e. 2 weeks after the EGMs)  that KBCC provided the resolutions purporting to show that the 4 Appointees had been appointed as directors one day before the EGMs.  In any event, it was impossible to see how Mr Li could have acted in “good faith” in disallowing the votes casted by Tiffany Wong when the court had already held that she was the only person who has authority to act on behalf of the Petitioners. 

(3)  §76(3): Far from failing to draw to the court’s attention the alternative legal avenues, the fact that the Recorder indicated to the parties that they could return to him should any difficult arose in relation to the EGMs was disclosed in TW 1^st.  In view of the conduct of the Former Directors, the Former Officers and the Purported Directors as described in Section B and §70 above, I do not think that the “alternative legal avenues” are reasonable or viable avenues as it would only result in further unnecessary litigations and waste of time and costs. 

(4)  §76(4): The “statutory trust” is a shorthand label used in TW 1^st to describe the consequence of the WU Order and the appointment of the Liquidators.  It was made very clear in TW 1^st that the Petitioners and the Companies are subsidiaries and sub-subsidiaries of CPG, and the Liquidators had along proceeded on the basis that they needed to take control of the Petitioners in order to take control over the Companies.  

(5)  §76(5): As pointed out by Mr Wood, the fact that “Mr Li” could not have acted in reliance on the independent legal opinion of the BVI law firm is confirmed by the fact that the said opinion was only produced on 15 January 2024, which was 3 days after the EGMs had been held.  In view of the holdings of the Recorder and Wallbank J, there is no proper basis to suggest that there is any issue as to the authority of Tiffany Wong to act on behalf of the Petitioners or that such issue remains pending in the BVI Proceedings.  

(6)  §76(6): The Undertakings have proved to be unworkable and problematic for the reasons stated in §§26-29 above.  I note that the Recorder has in Wong Sai Chung & ors v The Joint & Several Liquidators of China Properties Group Ltd (in liq) [2024] HKCFI 540 handed down on 29 February 2024  discharged the Undertakings.  As regards the other pending applications before the court, they were fully described in TW 1^st.

(7)  §76(7): For the reasons stated in §§69-70 above, I consider that the Liquidators had no means to ensure that the assets of the Companies would not be dissipated or misapplied by the Purported Directors, who have no right or interests in the Companies and whose conduct do not inspire confidence. 

(8)  §76(8): As the Companies are wholly owned subsidiaries of the Petitioners, it is difficult to see what “irreparable harm” would be suffered by the Group.  None has been identified by the Purported Directors.   

80.  For the above reasons, I make the following order:

(1)  The Appointment Orders be continued until determination of the Petitions or further order of the court; and

(2)  The Discharge Summonses be dismissed. 

81.  As for costs, I make a costs order nisi that:

(1)  For the purpose of Order 62 rule 6(2)  of the Rules of the High Court, the Purported Directors are not entitled to recover from the estate of the Companies any costs they have incurred in connection with the Continuation Summonses and the Discharge Summonses;

(2)  the Petitioners’ and the Companies’ costs in respect of the Discharge Summonses and the Continuation Summonses be costs in the Petitions; and

(3)  the Official Receiver’s costs in the amount of HK$29,000 be costs in the Petitions.

82.  It seems to this Court that although there are grounds to order the Purported Directors to pay the costs of and occasioned by the Discharge Summonses on the basis that have no valid grounds to cause the Companies to seek a discharge or stay of the Appointment Orders, it may not be in the interests of the Petitioners or the Companies to incur further costs in dealing with the joinder of the Purported Directors as parties for the purposes of costs and filing of evidence and submissions on costs, when it is not clear where the Purported Directors are located and whether they have the means to pay any costs which may be ordered against them.  In any event, it does not appear that the Petitioners have incurred much costs in dealing with the Discharge Summonses, which are heard and disposed of at the return date of the Continuation Summonses.