RE CHINA SOLAR ENERGY HOLDINGS LTD

HCCW 108/2015

[2018] HKCFI 1932

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING‑UP PROCEEDINGS NO 108 OF 2015

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DECISION ON COSTS

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1.  On 27 January 2017 the petitioner, Ankang Limited (“Ankang”), issued a summons seeking various relief, namely, the winding up of the Company, the discharge of the provisional liquidators, and the setting aside of various agreements entered into with an investor for the restructuring of the Company.

2.  In my decision of 20 March 2018, I dismissed the summons for the reasons explained in my decision, and made a costs order nisi that Ankang pay the provisional liquidators’ costs with a certificate for two counsel.  The Company and the investor have issued summonses seeking a variation of the costs order nisi: both seek an order that their costs also be paid by Ankang; in the case of the Company they seek an order that there be a certificate for two counsel. 

3.  Ankang have contested the summonses on the basis that as the joint and provisional liquidators were represented at the hearing and were the principal opponent to the application, the representation of the Company by two counsel and by one counsel in the case of the investor were unnecessary, and therefore the Company and the investor should not have their costs.

4.  I disagree.  It seems to me to be clear that not only was the summons served on the Company and the investor but also when the matter came to be fixed for a hearing, they were invited to attend in order that their own counsel’s availability could be taken into account in fixing dates, rather than there being a suggestion that it was unnecessary for them to be represented. 

5.  It also seems to me that at the outset, both the Company and the investor had their own specific interests which they were entitled to want to ensure were properly represented at the hearing, even if in practice it might well be that a substantial amount of the argument dealing with the legal issues discussed in my decision would in the first instance be advanced by counsel for the provisional liquidators.  As Mr Scott SC correctly reminded me the joint and provisional liquidators’ principal interest was to represent the economic interests of the creditors in the proposed restructuring that Ankang were trying to derail, the board of the Company’s interest obviously extended further and to the contributories of the Company generally; the investor had an independent commercial interest in ensuring that the application was properly contested and its interests adequately protected. 

6.  The only matter which it seems to me requires much consideration is Ankang’s suggestion that it was not necessary for the Company to be represented by two counsel, given the representation that the joint and provisional liquidators appointed.  This, of course, is a matter of judgment, and a judgment that had to be made at the time it was necessary for the Company to determine what representation was appropriate for the hearing.  It is not a matter that can be assessed with the benefit of hindsight.  It does seem to me that the issues that were raised by the summons were sufficiently important and sufficiently complicated that it was not unreasonable for the Company to take the view that it was appropriate for two counsel to be instructed. 

7.  I will, therefore, make orders in the terms of the summonses issued by the Company and the investor for a variation of the costs order nisi.