RE QUEST STOCKBROKERS (HK) LTD

HCMP 655/2022

[2022] HKCFI 2578

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 655 OF 2022

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DECISION

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BACKGROUND

1.  This is the application made by Quest Stockbrokers (HK) Limited, by way of an ex parte originating summons filed on 26 May 2022, for an order to pay unclaimed cash and securities (“the Unclaimed Assets”) into court pursuant to sections 56 and 62 of the Trustee Ordinance (Cap.29, Laws of Hong Kong) (“the Ordinance”).    

2.  The applicant was incorporated in Hong Kong on 26 March 1992 and has been carrying on business as a securities broker.

3.  In around late 2019, the applicant decided to cease its business.

4.  Since then, the applicant had taken various steps to inform its clients about its cessation of business. It had issued letters, made telephone calls and even caused Chinese and English notices to be published in Ming Pao and South China Morning Post, so as to ask its clients to withdraw or transfer away their assets deposited with the applicant.  It is evident that in those letters and newspaper advertisements, the applicant had made it clear that it would apply to the Court for directions on the disposal of the unclaimed assets, and in which case such assets might be realised with the sale proceeds paid into court or otherwise disposed of without further notice.

5.  Despite such 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.

APPLICATION OF THE LEGAL PRINCIPLES

6.  Section 62 of the Ordinance provides 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.”

7.  In an application of this sort, the applicant 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.

8.  I have considered the evidence filed in support of this application.  I am satisfied that the applicant has established the aforesaid two matters.  In the circumstances of the present case, I hold the view that it is expedient for the Unclaimed Assets to be paid into Court.

ORDER

9.  By reasons of the aforesaid, I make the following orders:

(1)  It be declared that the unclaimed assets as set out in the Annexes to the draft order lodged with the Court together with counsel’s skeleton submissions are held by the applicant as a trustee for each of the clients as set out therein;

(2)  The applicant be permitted to use the Unclaimed Assets for the purposes of (a) paying the assessed costs of $96,210 (as described in paragraph 8 below) and (b) defraying newspaper advertising fees to be incurred under paragraph (6) below;

(3)  The applicant do have leave to pay into Court the balance of the unclaimed cash as particularised in Annex 1 subject to deduction of costs and expenses under paragraph (2) above;

(4)  The applicant do have leave to pay into Court the unclaimed securities (whether held in its own name or in the name of others) as particularised in Annex 2 by withdrawing the physical share certificates, and thereafter depositing the same (whether in the name of the Registrar or the High Court of Hong Kong or otherwise) with the Registrar of the High Court of Hong Kong;

(5)  The applicant do have leave to sell or otherwise dispose of (including forfeiture thereof) the unclaimed securities (whether held in its own name or in the name of others) as particularised in Annex 3 or Annex 4 (and those unclaimed securities as particularised in Annex 2 that are unable to be withdrawn) as it sees fit, and to pay any proceeds from the sale of any such unclaimed securities into Court;

(6)  Notification of this order and the rights of the clients of the applicant as set out in the Annexes to apply for payment out of their respective unclaimed cash or securities, as the case may be, under Order 92 of the Rules of the High Court (Cap.4A), be given by way of advertisements in a Chinese language and an English language daily newspapers in Hong Kong on or before 30 August 2022, and by way of letters to such clients at their last known addresses (if any) by post;

(7)  It be further declared that, upon compliance with paragraphs 2 to 6 above, the applicant be discharged from any obligations or claims in respect of the Unclaimed Assets and Order 92 rule 4 of the Rules of the High Court (Cap.4A) is deemed to have been complied with by the applicant;

(8)  The costs of and occasioned by this application be paid to the applicant out of the Unclaimed Assets on a trustee basis, summarily assessed at $96,210; and

(9)  There be liberty to apply.