Winding-up order maintained despite merits defect; costs shifted to Official Liquidator and impartial liquidation directed.

Where a court finds a prior winding-up order unjustified on its merits but substantial delay and intervening events make setting it aside impracticable or prejudicial, the order may be maintained while adjusting consequential relief. The note explains that the winding-up order was left in place for those reasons, but costs and directions were reallocated: the Official Liquidator is held responsible for partisan conduct and ordered to pay the company's costs of the petition, the High Court appeal and the present appeal from company assets; petitioners are denied costs. The liquidation must be conducted impartially with procedural reconsideration to protect contributories.

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Issues: (i) Whether the High Court's winding-up order of 13 November 1924 should be discharged as unjustified; (ii) Allocation and payment of costs arising from the petition, the High Court appeal and this appeal.

Issue (i): Whether the winding-up order of 13 November 1924 ought to be set aside.

Analysis: The Board examined the merits of the petition and the Trial Judge's findings, finding the petition's serious allegations unproved and the Trial Judge's dismissal justified. The Appellate Court's grounds for making the winding-up order were not supported by the evidence; nevertheless, subsequent extensive delay, intervening events, and the practical consequences of setting aside the order (including dissolution of the company's business and risk of extensive disruptive litigation) were considered. The Board also reviewed the conduct of the liquidation, the role and partisanship of the Official Liquidator, and numerous subsequent orders made in the liquidation.

Conclusion: The winding-up order, though not justified when made, is to be maintained because of the lapse of time and intervening events; it is not discharged on merits.

Issue (ii): How costs of the petition, the High Court appeal and this appeal should be allocated and paid.

Analysis: The Board held that petitioners should not receive costs in either court; the Official Liquidator had pursued opposition at the expense of the assets in a partisan manner and must bear responsibility for certain costs. The Board directed that the Official Liquidator must pay out of the assets the company's costs of the petition, the High Court appeal and this appeal, and that petitioners should have no costs of this appeal.

Conclusion: Costs are reallocated against the Official Liquidator and out of the company's assets; petitioners shall have no costs of the appeal and must not be awarded costs in either Court.

Final Conclusion: The Board advised that the winding-up order should be maintained notwithstanding that it was not justified when made; however, the order is discharged as to costs and directions are given for impartial conduct of the liquidation and reconsideration of procedural steps to protect contributories.

Ratio Decidendi: Where a winding-up order is shown to have been unjustified on its merits but substantial delay and intervening events make setting it aside impracticable and prejudicial to all parties, the court may maintain the order while adjusting consequential relief such as costs and directing impartial future conduct of the liquidation.

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