Re Sunny Nation Ltd.

HCCW000424/1997

HCCW 424/1997

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

COMPANIES WINDING-UP PROCEEDINGS No. 424 OF 1997

Coram: Hon Sakhrani J in Chambers

Date of Hearing : 10 July 2000

Date of Decision: 10 July 2000

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D E C I S I O N

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1. On 29 March 1999, upon the undertaking of counsel for the Petitioner and counsel for the Respondent that the company be put into voluntary liquidation, Le Pichon J ordered that the Petition be dismissed and that the costs of the Petition be dealt with by the judge hearing HCA 10036/97 after the hearing of that action.

2. I was the trial judge who heard HCA 10036/97 in January this year. That was an action by the Petitioner, as Plaintiff, against the Respondent, as Defendant, for the return of $140,000.00 which he paid the Respondent on 28 February 1997. The dispute between the parties in that action was a dispute of fact. I believed the Petitioner and disbelieved the Respondent in that action. I found in favour of the Petitioner and gave judgment to the Petitioner against the Respondent for the said sum with interest and costs.

3. By the summonses issued by the Petitioner and the Respondent, both parties ask for the costs which have been reserved in the Petition.

4. The Petition was presented on 14 August 1997. It is plain to me that there was deadlock between the Petitioner and the Respondent and that this led to the presentation of the Petition by the Petitioner. By the Petition, the Petitioner sought an order that the Respondent purchase his shares in the company at a reasonable market price and/or an order that the property of the company be sold by private treaty or public auction at market price and/or an order that the company be wound up.

5. I am satisfied that the Respondent failed to put forward any concrete proposals to the Petitioner and that this has resulted in the presentation of the Petition. It was, in my view, necessary for the Petitioner to present the Petition.

6. There were a number of hearings. Rogers J (as he then was) on 11 November 1997, made an order for sale appointing Jones Lang Wootten Ltd as the sole agent. This was an order made by consent. Thereafter, there appears to have been some delay in the sale of the property which was the only asset of the company. Because of market conditions, it was not easy to dispose of the property earlier. The property was eventually sold on 27 January 1999 and the proceeds of sale have been divided up between the Petitioner and the Respondent after expenses.

7. As the only asset of the company was disposed of, there was really no real reason for the Petition to continue. For that reason and upon the undertaking of counsel for the Petitioner and for the Respondent that the company be put into voluntary liquidation, Le Pichon J on 29 March 1999 ordered that the Petition be dismissed. The only outstanding matter was the question of costs which had been reserved.

8. The fact that the Petition was dismissed was not a determination on the merits of the Petition. It was dismissed because there was no point in carrying on with the Petition after the sale of the only asset of the company. Both parties recognized that.

It seems to me that the justice of the case would be met if I made an order that the costs of the presentation of the Petition and the first hearing of the Petition, which was on 15 October 1997, be costs to the Petitioner and to be paid by the Respondent. The costs thereafter appears to me should be borne by each party, and the order I make is that in respect of the costs which had been reserved, apart from the costs of the presentation of the Petition and the first hearing, each party should pay their own costs. This, of course, does not affect the order for costs made by Findlay J on 2 September 1998 as those costs have already been dealt with and have not been reserved. That is the order I make.

Representation:

Mr James Cheng, instructed by Messrs George Y C Mok & Co., for Petitioner

Mr Henry Ho, of Messrs Edmund W H Chow & Co., for Respondent