XCHRX PERIWIN DEVELOPMENT LTD. v. GRANDFIELD PACIFIC HOTEL LTD.

HCCW 29/2001

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS NO. 29 OF 2001

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D E C I S I O N

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1. I have before me a summons taken out by the Respondent, Grandfield Pacific Hotel Limited ("the Company"), on 28 February 2001 seeking to discharge the order made on the ex parte application of the Petitioner, Periwin Development Limited, for the appointment of provisional liquidators of the Company. The ex parte order was made by Cheung J on 18 January 2001 and continued by Hartmann J on 29 January 2001. It was further continued and varied by the order of Deputy Judge To made on 13 February 2001 and an order made by me on 26 February 2001. The variation made in the last two orders was due to an application by the provisional liquidators that they be permitted to cease the business operations of the Company unless they were to receive further funding from the directors and/or shareholders of the Company within a stipulated period in view of the projected cash deficiency of the Company.

2. On 26 February 2001, I granted leave to the provisional liquidators to cease business operations unless they were to receive further funding from the directors and/or shareholders of the Company in the sum of HK$800,000.00. In view of the fact that the Company's application to discharge the order appointing the provisional liquidators was to be heard in just over a week, I ordered that my order giving leave to the provisional liquidators to cease business operations on the aforesaid basis was not to take effect until after the determination of the Company's application to discharge the appointment of the provisional liquidators.

3. The background matters of the present application may be given as follows.

4. The Petitioner is a company incorporated in Hong Kong on 14 July 1992. It was set up by the Foshan City People's Government in the Guangdong Province for the purpose of investing in real estate in Hong Kong. Its managing director was Mr Joseph Leung Kai Man ("Mr Leung") until he resigned in October 1998. Mr Leung was engaged by Full Luxury Limited, another company owned by the Foshan City People's Government as a consultant to advise on the investment in real estate.

5. The Petitioner acquired the property at No. 18 Percival Street, Causeway Bay, Hong Kong ("the Property") and is still its registered owner. Initially, the Property was an office building. On 19 July 1996, the Petitioner executed a legal charge in favour of the Bank of China, Hong Kong branch ("BOC"), to secure general banking facilities granted by BOC to the Petitioner. It would appear from a letter of undertaking from the Foshan City People's Government to BOC dated 9 July 1996 that an advance of HK$342.5 million was made.

6. In or about mid-1996, the Petitioner decided to convert the Property into a hotel and the Company was acquired as a shelf company for this purpose. The Company was incorporated on 6 June 1996 and its name was changed to its present name, Grandfield Pacific Hotel Limited, on 15 October 1996. An agreement was entered into between the Petitioner and the Company on 22 November 1996 ("the Agreement") by which the Petitioner was to carry out certain modification works as listed under Schedule I of the Agreement with the view to convert the Property into a 3-star hotel "in accordance with international hotel standards (AAA-approved and rated)". It was further provided that the Petitioner and the Company "shall enter into a Lease" of the Property on the principal terms and conditions as set out in the Agreement. In essence, the Company was to lease the Property from the Petitioner for ten years at the rent at varying rates as stipulated, it was to carry out fitting and decoration work to the Property as contained in Schedule II to the Agreement, and to manage the Property as a 3-star hotel.

7. Other material terms of the Agreement were as follows:

(1) In clause 1.1, the "Hotel" was defined as "the 3-star hotel and hotel related facilities to be provided by [the Company] at the Leased Property" and "Formal Opening" was defined as "the date on which the Hotel modified in accordance with Schedule I shall open for business to the public."

(2) Clause 2.2 provided that the Petitioner should use its best endeavours to obtain within 6 months from the date of the Agreement approval by the Building Authority and all other approvals and authorisations required to use the Property as a hotel and to permit the carrying out of the modification work; to obtain the consent of BOC within two months from the date of the Agreement for the Petitioner to convert the Property into a hotel and to lease it to the Company; and to procure the amendment of the deed of mutual covenant to enable the operation of a hotel at the Property.

(3) Clause 5 provided in considerable detail the principal terms of the lease to be entered into between the parties. As mentioned earlier, the term was for a period of ten years subject to a break clause in the event that the Petitioner should desire to sell the Property. As for the rent payable, this was to be a guaranteed rent at varying rates or 60% of the operation profits of a particular month, whichever was the greater.

(4) By clause 6.2, it was provided that the Company should during the term of the lease, appoint Mr Leung and one director of the Petitioner as the president and the deputy financial controller of the Company respectively and they should have access to all the books, reports and papers of the Company and be informed of all important management matters concerning the hotel.

(5) Clause 7.3 provided that time should in all respects be of the essence of the Agreement.

(6) Clause 7.8 provided that the parties should not be deemed by reason of the Agreement to have entered into a joint venture or partnership with each other.

8. Pursuant to the Agreement, Mr Leung was appointed a director of the Company on 6 December 1996. Thus, Mr Leung was the common director of the Petitioner and of the Company, until he resigned as a director of the Petitioner in October 1998.

9. On 1 September 1998, a licence was granted by the Government to the Company to operate a hotel at the Property for a period of one year. The parties however did not enter into a lease as envisaged in the Agreement, nor was any rent paid by the Company to the Petitioner under the Agreement. It is not in dispute that the Company has been in occupation of the Property. According to an affirmation of Mr Leung made on behalf of the Company on 13 April 1999 in HCMP No. 6220 of 1998 ("the mortgage action"), "as a matter of fact, the Company started operating the Property as a hotel since 22 November 1996 pending the issuance of the Hotel Licence". There is also evidence in a report prepared by the management team of the Hotel on 15 October 1998 that the Hotel had "soft opened" on 26 November 1997.

10. On 14 September 1998, Mr Leung wrote to BOC on behalf of the Petitioner referring to the Petitioner's application for BOC's consent to the conversion of the Property to a hotel in December 1996 and enclosing a copy of the licence of the hotel dated 1 September 1998. Mr Leung requested BOC to issue its consent to the Petitioner at the earliest opportunity.

11. On 17 September 1998, a new director of the Petitioner was appointed. On 9 October 1998, Mr Leung resigned as a director of the Petitioner with immediate effect. On 13 October 1998, the management team of the hotel sent a memorandum to the Petitioner on the instructions of the Company's board of directors to facilitate a "review" of the Agreement. It was acknowledged in that memorandum that the Petitioner had invested around HK$30 million to implement its obligation under the Agreement and mention was made, apparently for the first time in writing, that the Petitioner had failed to implement certain obligations under the Agreement and "to normalise the Hotel management up to a standard of 3-star Hotel". It was followed by a report of the management team of the Hotel dated 15 October 1998 which I have mentioned and in which certain problems were set out to be rectified. Copies of the memorandum and the report prepared by the management team of the Hotel were supplied by Mr Leung to BOC under cover of a letter dated 16 October 1998, this time in his capacity as a director of the Company.

12. On 19 November 1998, BOC commenced the mortgage action against the Petitioner claiming the monies advanced and possession of the Property. The Company intervened as an applicant to oppose an order for possession in favour of BOC. It was for this reason that Mr Leung made his affirmation on 13 April 1999 as I have stated earlier. In his affirmation, Mr Leung asserted that even if BOC did not give consent for the Company to operate a hotel at the Property, BOC was estopped from evicting the Company because the Company had incurred a total sum of not less than HK$13 million to convert the Property into a hotel in reliance of the Petitioner's agreement to grant a ten-year lease to the Company.

13. On 20 April 1999, an order was made in the mortgage action that BOC was to recover from the Petitioner the sum of about HK$396 million secured by the legal charge with interest and costs and that the application for a possession order was adjourned sine die with liberty to restore. As at present, BOC has not restored its application for a possession order.

14. Instead, BOC exercised its right under the legal charge to appoint receivers of the Property by a deed of appointment dated 26 August 1999 and Mr Stephen Liu Yiu Keung and Mr Matthew O'Driscoll of Ernst & Young were appointed. On 1 September 1999, Messrs Koo & Partners, the solicitors for the receivers, wrote to the Company's solicitors at the time, Messrs Wilkinson and Grist, demanding the Company to pay to the receivers all outstanding rent under clause 5.1 of the Agreement within three days, failing which proceedings would be instituted against the Company. The Company's solicitors replied on 2 September 1999 stating that "the Company had no objection to pay the rent to the Receivers or the Bank provided that the amount is to be properly agreed". It was further stated that although the Agreement provided that there should be a rental payment of HK$2 million a month to the Petitioner, due to the fact that the Petitioner had not carried out its obligations under the Agreement, the Hotel could not generate enough revenue to support the rental of HK$2 million. The Company was willing to negotiate with the receivers or BOC to work out "an acceptable level" of rental payment. A further letter to the same effect dated 14 December 1999 was sent by the Company's solicitors to the receivers' solicitors, alleging that the Petitioner was in breach of the Agreement and that it had failed to carry out the modification work as required and asserting that the Company had a claim in damages against the Petitioner. Despite requests from the receivers' solicitors to the Company's solicitors from January 2000 to November 2000 for the accounts and facts of the alleged claim for damages of the Company against the Petitioner, no information was ever provided by the Company or its solicitors to substantiate its claim for damages against the Petitioner.

15. On 9 January 2001, the receivers as agent for the Petitioner presented a petition for winding-up against the Company on the basis that the Company is insolvent and unable to pay its debt. It was stated in the petition that as from 1 September 1998 when the hotel licence was issued up to December 2000, a period of 22 months, the total amount of rent due to the Petitioner was HK$53 million and no payment has been made by the Company to the Petitioner despite repeated demands.

16. On 18 January 2001, the receivers acting as the agent of the Petitioner applied ex parte for the appointment of provisional liquidators "for the usual reason of protecting and preserving assets of the Company." In the supporting affirmation of Mr Stephen Liu, it was stated that a factor critical to the view that the appointment of provisional liquidators was necessary to ensure preservation of the Company's assets was that the receivers "are in no doubt that the actions of Mr Leung for [the Company] is simply for [the Company] to continue occupation of the Hotel without paying rent whatsoever." The receivers deposed to a strong distrust of Mr Leung as there was no way of knowing his agenda, despite the receivers had made every attempt to obtain substantiation of the Company's claim for damages including corresponding with the Company and making investigations with the Petitioner. Fear was expressed that Mr Leung would not hesitate to frustrate and block the actions of the receivers in order that the Company would continue occupation of the Hotel for as long as possible. Reliance was also placed on the unaudited management accounts of the Company up to December 1998 which showed that the Company had a carried forward loss of over HK$12 million and that it would appear that the Company was trading at a loss even when it had not paid anything to the Petitioner for rent. Cheung J made an order appointing the provisional liquidators on the usual undertaking as to damages given by the Petitioner and by BOC as the mortgagee under the legal charge.

17. On the question if the appointment of the provisional liquidators should be continued, it was accepted by both sides that I have a fresh discretion to exercise on the inter partes application and that I should consider the circumstances known to the court at present, not just the information available to the court at the time of the ex parte application. It was also accepted that the court's jurisdiction to appoint a provisional liquidator under Section 193 of the Companies Ordinance Cap. 32 is unfettered and how that discretion is to be exercised depends on the circumstances of each particular case. In deciding whether to exercise that power, the court should consider two matters. The first is whether the Petitioner has made out a good prima facie case for a winding-up order at the hearing of the petition. If such a case is made out, the second matter to consider is whether it is right that a provisional liquidator should be appointed in all the circumstances (Re Union Accident Insurance Co. Ltd [1972] 1 All ER 1105 at 1109h, 1110a-b). The question whether it is right to appoint a provisional liquidator has to be decided on the basis of commercial realities, the degree of urgency and need established by the Petitioner and the balance of convenience according to the circumstances (Re Five Lakes Investment Co Ltd v. Multiford Co. Ltd [1985] HKLR 273 at 284A-B; Securities and Futures Commission v. Mandarin Resources Corporation Limited & Anr [1997] HKLRD 405 at 408J to 409C).

Has the Petitioner made out a good prima facie case

18. At this stage, I need only form a provisional view whether the Petitioner has made out a good prima facie case for a winding-up order at the hearing of the petition. In order to make out a prima facie case, the Petitioner must show, by believable evidence, facts which are not disproved and which, if eventually proved at the hearing of the petition, will entitle it to a winding-up order (Re Fives Lakes Investment Co. Ltd v. Multifold Co. Ltd, supra, at 284D-E).

19. It was submitted by Mr Robert Tang, SC on behalf of the Company that there is a genuine and substantial dispute over the debt of HK$53 million claimed by the Petitioner as guaranteed rental under the Agreement. It was the Company's case that although the Property was converted into a hotel, the Petitioner was in breach of clause 3.1 of the Agreement in that the Petitioner was obliged to carry out the modification work "with a view to convert the Leased Property into a 3-star hotel in accordance with international hotel standards (AAA-approved and rated)." I understand "AAA" stands for the American Automobile Association and it is this body that gives star rating to hotels. It was alleged that notwithstanding substantial sums of over HK$30 million had been incurred by the Petitioner in the modification work, the work carried out was incomplete or not of such quality to make it attain the standards of a 3-star hotel or alternatively it has not been rated as a 3-star hotel. The Company does not deny that it is liable to pay an amount to the Petitioner for its use and occupation of the Property but it was contended that the Company should not be liable to pay the guaranteed rate as provided and what that amount should be would have to be assessed by the court after a trial. Furthermore, it was alleged that the Company has a substantial counterclaim against the Petitioner and this counterclaim has been quantified at HK$132 million alternatively HK$92 million. The loss and damage was said to comprise the profits that the Company would have made if the Hotel had been able to generate revenue as a 3-star hotel, that the Hotel should have been in operation in June 1997 instead of September 1998, and the assumptions and projections as to profits and occupancy rate in a business proposal prepared in 1996 were to be adopted. The counterclaim estimated at HK$132 million alternatively HK$92 million was in respect of loss and damage calculated only up to January 2001. In addition, it was submitted that as the Company would be entitled to a ten-year lease under the Agreement and assuming that the period of the lease had begun to run from September 1998, the lease would have another seven years to run and the Company would also claim loss and damage for the next seven years or so.

20. I should also mention that a number of subsidiary points were taken by Mr Leung in the affirmations he filed disputing the Petitioner's claim. I do not propose to mention them here except to say that I have considered them.

21. On the part of the Petitioner, it was submitted by Mr James Thomson that one should look at the reality of the situation, which was that a substantial sum of HK$33 million had been spent by the Petitioner towards the modification work. Further, the receivers had obtained a report from a firm of surveyors, A. G. Wilkinson and Associates in October 2000 in which the surveyors expressed the view that based on the assumptions that the invoiced items were true and had been carried out, the amount of HK$33 million would have been sufficient to convert an office building into a 3-star grade hotel in 1997. I have been taken to the letters of complaint written by the Company to the Petitioner regarding the alleged failure to carry out the modification work to the required standard of a 3-star hotel. Mr Thomson pointed out that if the Company had been suffering a substantial loss of more than HK$2 million a month, one would have expected the Company to do more than merely writing letters to the Petitioner. The earliest letter written to the Petitioner by the Company would appear to be in January 1999, after Mr Leung had ceased to be a director of the Petitioner. Further, Mr Leung claimed that the Company had incurred a sum of not less than HK$13 million alternatively HK$10 million towards the decoration work of the hotel, of which only HK$1.28 million was apparently substantiated by invoices. As for the counterclaim, there was no provision in the Agreement that the modification work must be completed by June 1997 or any particular date. The claim of loss and damage over the next seven years has not taken into account the break clause in the Agreement or the duty to mitigate. I note that Mr Tang has acknowledged that the computation of the Company's loss and damage is "not scientific". I need say no more about the colossal sums in the counterclaim which were apparently quantified for the first time in the affirmation of Mr Leung filed in February 2001.

22. As I have stated, I am only required to form a provisional view at this stage whether a good prima facie case has been made out. In my view, the Petitioner has shown by believable evidence, facts which are not disproved and which if eventually proved at the hearing of the petition, will entitle it to a winding-up order.

Whether it is right to appoint provisional liquidators in the circumstances

23. In the order made by Cheung J on 18 January 2001 on the ex parte application of the Petitioner, it was provided that the powers of the provisional liquidators should be limited to, inter alia, the following acts:

(a) to do everything necessary to identify, locate and preserve all assets of the Company and, if necessary, to carry on the business of the Company; and

(b) to do all things reasonably necessary to preserve the value of the Company's business pending the determination of the petition.

24. These powers are in line with the objective of the ex parte application, which was to protect and preserve the assets of the Company, as I have mentioned earlier.

25. Following their appointment, the provisional liquidators have taken various steps and carried out investigation into the affairs of the Company. They have submitted three reports to the court dated 8 February 2001, 23 February 2001 and 6 March 2001. Much more is known about the operations of the Hotel and the financial position of the Company as compared to the time when the ex parte application was made.

26. The principal activity of the Company is the operation of the Hotel at the Property. It has been trading at a loss for some time even if no regard is to be made to its liability to pay rent to the Petitioner, which is in dispute. Its continued operation was and is dependent on funding from its shareholders and directors. According to Mr Leung, he had provided some HK$13 million to the Company as shareholders' loan and directors' loan but he would not demand payment of the loans for the time being. The financial position of the Company as appeared from the audited and unaudited accounts may be summarized as follows:

27. It should be noted in the two audited accounts that they were heavily qualified with a disclaimer from the auditors that they were unable to form an opinion as to whether the accounts gave a true and fair view of the state of the Company's affairs. In the report of the auditors dated 28 August 2000 for the accounts of the year ended 30 April 1999, the auditors considered that there was a "significant level of concern as to the appropriateness of the going concern basis" in view of the fundamental uncertainty arising from the difficulties encountered in the estimation of the possibility of future legal action relating to the Company's liability to pay rent to the Petitioner.

28. The operating expenses of the Hotel were in the region of HK$700,000.00 to HK$800,000.00 a month based on the figures of last year, according to the financial controller of the Hotel. Also according to the figures provided by the financial controller, the Company had an operating surplus for the year 2000 in the sum of about HK$4.6 million, without making provision for any liability to pay rent. The provisional liquidators have confirmed that the hotel operations are conducted mainly on a cash basis.

29. Notwithstanding the financial controller's information that the Company had an operating surplus of HK$4.6 million from its operations in 2000, the provisional liquidators only found HK$117,363.00 cash in the bank account at the date of their appointment. Mr Leung's explanation was that the profits made had been used to reduce the loans and repay the debts of the Company. Given the limited cash in the bank account, the drop in occupancy rate of the Hotel since the provisional liquidators' appointment (which is dealt with below), and that the operating expenses would be at least HK$700,000.00 a month, the provisional liquidators made a cash-flow forecast if the Company was to continue operating the Hotel until the end of April 2001 when the petition would have been heard. They projected a cash-flow deficit of about HK$426,000.00, to which figure should be added the arrears of wages for January 2001 and the maintenance cost of the air-conditioning system and this would bring the total projected cash-flow deficit to HK$808,452.00. It was in these circumstances that I made the order on the application of the provisional liquidators on 26 February 2001 granting them leave to cease business operations unless further funding was received from the directors and/or shareholders.

30. Given that the objective of the appointment of the provisional liquidators was to protect and preserve the assets of the Company, and given what is known about the operations and financial position of the Company, I ask myself whether that objective would be achieved if the appointment of the provisional liquidators is to continue. It seems to me that there are little or no assets of the Company that would be put in jeopardy, given the present state of affairs. The most valuable asset of the Company is its right to operate the Hotel under the Agreement. If insufficient revenue is generated to cover operating expenses without a further funding from Mr Leung or the other shareholders and directors, as the provisional liquidators thought should be done, the business would not be viable and it could not be carried on, with or without the appointment of the provisional liquidators, as the operations of the hotel have been conducted mainly on a cash basis.

31. It was submitted by Mr Thomson for the Petitioner that the appointment of the provisional liquidators should be continued because they have uncovered certain irregularities in the Company's accounts and they should be allowed to continue with their investigations, which have not been completed, due to the un-cooperative attitude of Mr Leung and the staff at the Hotel. Mr Thomson pointed to the fact that only HK$117,363.00 was found in the bank account on the provisional liquidator's appointment despite an operating surplus of HK$4.6 million for last year according to the financial controller's information. There was also some kind of special arrangement between the Company and SAJ International Consultants Limited ("SAJ"; a company substantially owned and controlled by Mr Leung) by which the Company had requested SAJ to collect moneys due from travel agents on its behalf and pursuant to which SAJ had paid about HK$7.9 million to the Company from September 1999 to 18 January 2001. Up to the last report of the provisional liquidators on 6 March 2001, the provisional liquidators' investigations into the accounts and ledger records of the dealings between the Company and SAJ have not been completed as no commentary, reconciliation or explanation was given by Mr Leung on the bank statements of SAJ and the cash ledger accounts of the Company. Mr Thomson submitted that it was necessary that appointment of the provisional liquidators should continue as there is a risk that the revenue of the Hotel might be depleted or diverted to SAJ or elsewhere, in view of the huge discrepancy between the profits generated in 2000 and the actual cash position.

32. It seems to me that the risk of dissipation of assets is over-stated. Whatever might have happened in the past, given the present financial position of the Company, that it is barely able to cover operating expenses from the revenue generated, I do not think the risk as envisaged by Mr Thomson has been demonstrated. The provisional liquidators have undoubtedly done invaluable work in investigating the affairs of the Company and the information they have gathered and the work they have done would be of considerable assistance to the liquidator, in the event that a winding-up order is made. The work and investigations that have not been completed by the provisional liquidators could be carried on by the liquidator, if one is appointed eventually, but at the moment, it has not been demonstrated to me that there is a pressing or urgent need for the appointment of the provisional liquidators to continue so that they could carry on with their investigations.

33. I also look at the downside to the Company if the order appointing the provisional liquidators is not discharged. The officers and staff of the Company have not co-operated with the provisional liquidators and this has caused much difficulty in the work of the latter. The staff had organised a sit-in and demonstration at the offices of the provisional liquidators when their wages were not paid in February 2001. There was picketing at the Hotel and banners were put up. There were other acts of hostility towards the staff of the provisional liquidators assigned to work at the Hotel. It is not surprising that the occupancy rate of the Hotel had dropped in this kind of atmosphere and bookings were cancelled by travel agents. I set out below the drop in occupancy rates from the latest report of the provisional liquidators:

	2001 Average %	2000 Average %
19 to 31 January	34.7	79.4
1 to 28 February	35.2	58.6
1 to 5 March	40.6	68.5

34. I should mention that in making a cash-flow forecast of the revenue to be generated after their appointment, the provisional liquidators have made their projection on the basis of a 30% drop in occupancy rate. The average occupancy rate of the Hotel in 2000 was 70%. Although the occupancy rates might have gone up slightly according to the bookings placed with the Hotel for March and April (they were 51% and 48% respectively according to Mr Leung's figures), there would still be a drop compared to the figures of last year.

35. I also take into account that the fees and expenses of the provisional liquidators and their legal advisers, up to 6 February 2001, were estimated to be in the region of HK$1.25 million. Their work was extremely time consuming due to the non-cooperative attitude of the Company's officers and staff.

36. In exercising my discretion whether to continue the appointment of the provisional liquidators, I need to balance the serious consequences to the Company and the need to preserve and protect the assets of the Company, which was the stated objective of the Petitioner in making the application. On the material before me, it does not seem to me that the balance of justice and convenience comes down in favour of continuing the appointment. I am not satisfied that the Petitioner has established the need for the appointment of provisional liquidators to be continued as the evidence did not show that any assets of the Company would be in jeopardy before the hearing of the petition or that there are assets which require protection by the appointment of provisional liquidators. In the special circumstances of this case, I do not think the appointment of provisional liquidators should be continued merely because the Company has been operating at a loss and that it may not be viable if there is no funding within a short time. In my view, it would be a disproportionate remedy to continue with the appointment of provisional liquidators in the circumstances. For these reasons, I make an order in terms of paragraph 1 of the Company's summons dated 28 February 2001 that the orders appointing the provisional liquidators be discharged.

37. I should also mention that the Company has also relied on material non-disclosure as a ground for discharge of the orders appointing provisional liquidators. It does not appear to me that this ground has been made out.

38. The Company has also sought an order in its summons that the Petitioner do pay the Company such damages to be assessed that have been sustained by the Company by reason of the orders appointing provisional liquidators which the Petitioner ought to pay. I decline to make such an order at present. I have yet to hear submissions from the Petitioner regarding this. What I would do is to give the Company liberty to apply to the court to enforce the undertakings in damages given by the Petitioner and by BOC to the court when the Petitioner obtained the order appointing provisional liquidators on 18 January 2001. If and when such an application is made by the Company, subject to what the Petitioner and BOC may have to say, my present inclination is to direct that the application be stood over until after the hearing of the petition.

39. I will hear the parties on the costs of the Company's application to discharge the orders appointing provisional liquidators, the costs of the Petitioner's application for the appointment of provisional liquidators, and the costs of the appointment of the provisional liquidators.