RE YARDLEY SECURITIES LTD

HCMP 2818/2024

[2025] HKCFI 1844

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2818 OF 2024

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D E C I S I O N

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1.  By ex-parte originating summons filed on 31 December 2024 (“the OS”), Yardley Securities Limited (“Yardley”), the applicant, makes an application pursuant to sections 56 and 62 of the Trustee Ordinance, Cap.29 (“the TO”) to deal with/dispose of the unclaimed properties in its possession so as to achieve complete cessation of its business and revocation of its license with the Securities and Futures Commission (“SFC”). This application is supported by the affirmation of Leung Tak‑shing Raymond. Mr Leung is a director of Yardley.

2.  The legal principles relating to this kind of applications are well settled. Sections 62(1) and (5) of the TO provide that:

“(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.”

3.  These applications are not uncommon these days. These provisions in the TO provide a flexible and pragmatic solution to the applicant which intends to cease its securities business and deal with unclaimed assets in a way that protects the interests of its clients: see Re Ying Wah Securities Co Ltd [2023] HKCFI 834 at §5.

4.  Basically, there are two requirements to be met by the applicant. First, the applicant has to show that it holds the unclaimed property as trustee. Secondly, the applicant has to adduce evidence to show that it has made a reasonable effort to contact the beneficiaries for instructions relating to the disposal of the unclaimed properties but in vain.

5.  On the evidence of Mr Leung, I am satisfied that these two requirements have been satisfied. First of all, Yardley is a SFC-licenced securities brokerage firm in Hong Kong. There is no question that it is a trustee over the money and securities which Yardley holds on its clients’ behalf.

6.  Further, I accept the evidence of Mr Leung that the applicant notified its clients from January 2024 to April 2024, by way of telephone calls, emails, SMS, WhatsApp or WeChat messages, and by way of letters addressed to each of its clients’ last known addresses, of the applicant’s intention to cease its securities trading business and required its clients to give their written instructions to the applicant in order to dispose of their respective monies/securities held by the applicant.

7.  As set out by Mr Leung in his affirmation, further steps taken by the applicant’s solicitors to notify the applicant’s clients of the unclaimed property include the following. First, the applicant sent pre-paid ordinary post letters to the last known addresses of those clients whose addresses are within Hong Kong. Letters were sent by air mail to the last known addresses of those clients whose addresses are situated outside the jurisdiction.

8.  At least two attempts to contact each of the rest of the applicant’s clients by telephone to the last known telephone number of those of the rest of the applicant’s clients who had previously provided telephone contact numbers. And notices either in Chinese or English in the China Daily, the Hong Kong Economic and Hong Kong Commercial Daily, were posted on 12 July 2024, announcing the business cessation plan of the applicant and requiring anyone who has assets being held by the applicant to give written instructions to the applicant within 14 days from the date of the notices.

9.  Despite all these steps taken, altogether 107 clients remain unreachable or in the case of corporate clients, they had been either dissolved or struck off, or did not provide instructions or clear instructions on how to deal with the money and the unclaimed property. For some individual clients, they either have already passed away or simply did not contact the applicant.

10.  Mr Leung exhibited to his affirmation (marked “LTSR-7”) a big table giving a summary of information relating to the remaining clients and the unclaimed property presently held by the applicant on their behalf. It is shown that presently the total unclaimed cash balance stands at $1,991,366.85 and the market value of the unclaimed shares is assessed at $2,716,629.54, making a grand total of $4,707,998.39.

11.  Ms Chan, for the applicant, informed the court that since the issue of the OS, the applicant has not received any further claim of the unclaimed property.

12.  The applicant’s clients were informed of the intended cessation of business of the applicant more than one year before the hearing of the OS. I am satisfied that sufficient opportunities have been afforded to those clients to deal with their properties in the possession of the applicant.

13.  In the circumstances, I am satisfied that discretion should be exercised in favour of a grant of an order of payment pursuant to section 62 of the TO.

14.  I have gone through the order sought in the OS and I am satisfied that such order are necessary and expedient. In line with the guidance in paragraph 85/2/4 of the Hong Kong Civil Procedure 2025, I would make an order in terms of the OS.

15.  For costs of this application, Ms Chan has handed up a statement of costs asking for $439,283. She highlights to this court the complexity of this matter due to the number of the clients of the applicant and a great number of correspondence was necessitated. Further, legal research was required.

16.  I do appreciate the onus on the applicant is quite a heavy one and I am impressed by the evidence prepared by the applicant. However, I am still of the view that the total costs now sought by the applicant is on the high side. I would make a summary assessment of such costs by taking a broad-brush approach.

17.  I do not believe that most of the work for the purpose of communication of a client of the applicant should have been undertaken by a very senior solicitor. A junior solicitor and a litigation clerk would be competent to handle such matters. I would only allow $220,000 as costs to be recoverable by the applicant and as stated in paragraph 2 of the order, the applicant be permitted to first use the cash known receipts for the purposes of paying the summarily assessed costs of the applicant.