RE YUN JIP AUTO SERVICES LTD.

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J U D G M E N T

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Sir Derek Cons, Ag. C.J.:

1. In 1980 the Yun Jip Auto Services Ltd was incorporated as a company in this jurisdiction. The object was to run bus services and it seems to have functioned within, and also in and out of, Mainland China.

2. In August 1989 the then shareholders apparently split into two factions. On the 30th August one faction, the faction which has brought the appeal before us today, lodged a petition under s. 168A of the Companies Ordinance which is the section which can give relief to minority interests who claim they are being unfairly prejudiced. Various reliefs were sought. In March 1990 the other faction, filing a most lengthy petition, sought to have the company wound up under the just and equitable provisions of the Ordinance; to that petition the faction which brings today's appeal became opposing contributories.

3. In October of the same year the two factions came to a settlement which was embodied in a consent order by Barnett, J., on the 24th of the month. By that consent order one or other faction agreed to sell its shares to the alternate faction according to terms set out therein. Unfortunately the order proved unworkable because it required shares to be valued by a Mr. Morrison and his valuation produced a nil value for the shares. Nevertheless, by reason of a joint venture with a concern over the border, the company continued in operation, I assume at some profit.

4. Earlier this year, i.e. on 8th January, the parties came again before Barnett, J., who then ordered the company to be wound up, giving the petitioners their costs to be paid out of the company assets.

5. An application to vary that order so that the cost of the opposing contributories should also be paid out of the company assets is to be heard by Barnett, J., on the 28th of next month.

6. The opposing contributors appealed the order to wind up. The grounds of appeal are set out in the notice dated the 14th January and a supplemental notice of the 22nd May. Hearing of the appeal was due to commence today, but the opposing contributories no longer wish to pursue the appeal. The reason is that the Mainland party to the joint venture has decided not to renew its agreement. In other words, as from August this year the company will have no business and it is therefore to nobody's advantage to continue the argument as to which faction ought to be in control. We have before us a formal application that the appeal be dismissed.

7. The only question then remains as to the costs of the aborted appeal. Mr. Bernacchi, Q.C., who appears for the opposing contributors, suggests that they should all be borne by the company, or at least, although he does not specifically ask the Court to make such an order, that there be no order as to costs. He rests his argument on a provision in the consent order which provided for winding up in the last resort and in that event, for all the costs of the winding up, together with the costs of several other proceedings which had been or were continuing between those involved, should come out of the company assets. With respect to him, for my part I cannot see that that provision assists him in any way. His clients did not abide by the agreement reflected in the order. Instead they opposed the winding up and, by the appeal, they continued their opposition. I cannot see that the consent order in any way provided for the situation which they created after the winding up order had been made. I appreciate their reasons for asking for the appeal to be dismissed and I am very happy that it should be so dismissed; but it must be on the normal order as to costs, which is that the appellants shall pay the costs of the respondents.

Kempster, J.A.:

8. I agree with the order proposed by my Lord and with the reasons for it.

Kaplan, J.:

9. I also agree.