RE X LTD

HCMP 1658/2017
[2018] HKCFI 15

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1658 OF 2017

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D E C I S I O N

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1.  I have before me an amended ex‑parte originating summons seeking an order pursuant to section 62 of the Trustee Ordinance, Cap 29, dealing with certain assets of the applicant, X Limited.

2.  The application arises in the following common circumstances: the applicant has withdrawn its relevant business operations from Hong Kong.  The principal activity that it was involved in was providing mortgage finance.  Various clients of the applicant had provided securities to the applicant by way of partial security for the facilities made available to them.  The applicant has, as part of the process of closing down its operations in Hong Kong, sought to contact the transferees of such securities, and also to identify the beneficiaries in the case of various unclaimed securities where ownership is unclear.

3.  Section 62 of the Trustee Ordinance provides:

“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.

(2) The receipt or certificate of the proper officer shall be a sufficient discharge to trustees for the money or securities so paid into court.

(3) Where money or securities is or are vested in any persons as trustees, and the majority are desirous of paying the same into court, but the concurrence of the other or others cannot be obtained, the court may order the payment into court to be made by the majority without the concurrence of the other or others.

(4) Where any such money or securities is or are deposited with any banker, broker, or other depositary, the court may order payment or delivery of the money or securities to the majority of the trustees for the purpose of payment into 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.”

4.  Applications of this sort are relatively common and have been dealt with by the court in a number of cases.[1]

5.  I am satisfied on the evidence before the court that the assets which are the subject of the application are trust property held by the applicant on trust for the beneficiaries identified expressly in the application, or for unidentified beneficiaries. 

6.  I am also satisfied having read the evidence that the applicant has taken necessary steps in order to contact the known beneficiaries and also to identify those whose its records do not identify.  Those steps have resulted in the position that the various securities and assets listed in the proposed annexes to the order that I will make need to be dealt with in accordance with section 62, this will involve:

(1) disposal of securities to the extent that this is possible, and the payment of the proceeds of sale into court;

(2) in the event that any of the securities have not been sold after three months from the date of this order, the relevant shares certificates being obtained and delivered to the Registrar of the High Court; and

(3) in the case of dividend cheques of minimal value and which have either expired or will shortly expire, the applicant is granted leave to dispose of them as it sees fit.

I append to these reasons the precise form of the order that I will make as a schedule.

7.  One issue which I considered with Mr Tang of Linklaters, who appeared for the applicant, was how the matter would proceed in the event that a person were to come forward and claim any of the securities. It seems to me that the position would, depending on the precise time that this occurred, be dealt with as follows: if, as is proposed, the applicant is put into voluntary liquidation, then any claim can be made to the liquidator and adjudicated by him; if, by the time a claimant came forward, the applicant had been dissolved, it would be necessary for an application to be made to the court for the restoration of the company to the Register and the re-appointment of a liquidator who could then deal with the claim.

Schedule

1.   The applicant do have leave to amend the Ex Parte Originating Summons and to file the Amended Ex Parte Originating Summons.

2.   There be a declaration that (i) the securities (the “Unclaimed Securities”) and (ii) the unclaimed dividend cheques (the “Unclaimed Dividends”), both of which remain unclaimed by their beneficiaries, are held on trust by the applicant as trustee.

3.   The applicant do have leave to sell or otherwise dispose of (including forfeiture thereof) the Unclaimed Securities as it sees fit, and to pay any proceeds from the sale of any of the Unclaimed Securities into court.

4.   In the event that any of the Unclaimed Securities have not been sold after three months from the date of this order, the applicant be authorised to withdraw the relevant share certificates from the relevant stock exchange and/or custodian (as applicable) and deliver the same to the Registrar of the High Court.

5.   Upon satisfaction of paragraphs 2 and/or 3 (as applicable), the applicant be discharged from any obligations or claims in respect of the Unclaimed Securities.

6.   The applicant do have leave to dispose of (including forfeiture thereof) the Unclaimed Dividends and any additional dividend cheques which it may receive prior to its liquidation (the “Additional Dividends”), as it sees fit and be discharged from any obligations or claims in respect of the Unclaimed Dividends and any Additional Dividends.

7.   The applicant do have leave to dispense with the requirements under Order 92, rule 4 of the Rules of the High Court (Cap 4A).

8.   There be no order as to the costs of the Ex Parte Originating Summons, the Amended Ex Parte Originating Summons or the Amendment Summons.