RE MASTERLINK SECURITIES (HONG KONG) CORPORATION LTD

HCMP 1031/2024

[2024] HKCFI 2069

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1031 OF 2024

_________________

_________________

_________________

_________________

JUDGMENT

_________________

1.  This is an application made by the applicant by way of an ex parte originating summons filed on 18 June 2024, for an order, inter alia, to pay unclaimed cash and securities (“the Unclaimed Assets”) into court and otherwise dispose of them pursuant to sections 56 and 62 of the Trustee Ordinance (Cap.29, Laws of Hong Kong) (“the Ordinance”).

2.  At the beginning of the hearing, leave has been granted to the applicant to amend the said originating summons which is necessitated by changes in the amount of the assets held by the applicant since the commencement of this action (“the Amended Originating Summons”).

3.  At all material times, the applicant has been a licenced securities broker.

4.  In March 2023, the applicant decided to cease business on 30 September 2023. The business cessation date was subsequently postponed to 31 October 2023.

5.  Since June 2023, the applicant had taken various steps to inform its clients about its cessation of business, and urged them to take back their assets. It had issued written notices (sent by email and by post, as the case may be), made telephone calls, sent SMS by mobile phone and posted notices on its webpage. It had also caused Chinese and English notices to be published in Sing Tao Daily, The Standard, The Hong Kong Commercial Daily and even in newspapers published in the Mainland and in Taiwan, so as to ask its clients to provide the applicant with written direction as to how to deal with their assets deposited with the applicant.

6.  The applicant had also tried to return the unclaimed cash by transferring the same to its clients’ designated accounts, if any.

7.  The applicant had also made it clear to its clients by various means that it intended to apply to pay the Unclaimed Assets into Court if they remained uncollected.

8.  Despite such reasonable efforts on the part of the applicant, there were still unclaimed assets (including cash and securities) held by the applicant on behalf of its clients.

9.  Section 56(1) of the Ordinance provides that:

“Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, expenditure, or other transaction, is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument, if any, or by law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, if any, as the court may think fit and may direct in what manner any money authorized to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.”

10.  Pursuant to the above provision, if the Court considers it expedient to do so, it would confer power(s) on a trustee for the purpose of managing or administering trust properties vested in such a trustee. The powers as provided by the said section 56(1) are wide-ranging. The Court would confer on the trustee such powers which are necessary for the aforesaid purpose. Before making the order, the Court would have to be satisfied that the trustee did not have such powers in the first place.

11.  While conferring such powers on the trustee, the Court may also impose terms and conditions as it thinks fit, and direct the manner in which the authorised expenditure and costs of the transactions involved are to be paid or borne between capital and income.

12.  Section 62 of the Ordinance stipulates that:

“62. Payment into court by trustees

(1) Trustees, or the majority of trustees, having in their hands or under their control money or securities belonging to a trust, may pay the same into court, and the same shall, subject to the rules of court, be dealt with according to the orders of the court.

[…]

(5) Every transfer, payment and delivery made in pursuance of any such order shall be valid and take effect as if the same had been made on the authority or by the act of all the persons entitled to the money and securities so transferred, paid or delivered.”

13.  An applicant for an order under section 62 of the Ordinance has to establish that:

(1)  The assets in question are held by the applicant as trustee; and

(2)  Despite reasonable efforts, the beneficiaries cannot be contacted or unresponsive, or the trustee is otherwise unable to obtain instructions as to how to deal with, dispose of or return the trust assets.

14.  I have considered the evidence filed in support of this application. I am satisfied that the applicant has established the two matters as required under section 62 of the Ordinance. In the circumstances of the present case, I hold the view that, in principle, it is expedient for the Unclaimed Assets to be paid into Court.

15.  By reasons of the aforesaid, I make an order in terms of the draft order submitted to the Court by solicitors acting for the applicant, save that a paragraph be added to the effect that no payment into Court may be made before the applicant’s filing of the Amended Originating Summons.