RE WAH THAI SECURITIES LTD

HCMP 2370/2020

[2021] HKCFI 355

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2370 OF 2020

________________________

________________________

________________________

________________________

D E C I S I O N

________________________

1.  The Applicant is a limited company which carried on business as a corporation licensed by the Securities and Futures Commission to carry on securities trading under the Securities and Futures Ordinance, Cap 571. Since 30 September 2020, it has ceased its business in securities trading.

2.  Since 1 June 2020, the Applicant had been contacting its clients by phone and letter to inform them of the Applicant’s intention to cease business.  On 15 October 2020, the Applicant also published advertisements in newspapers in Hong Kong and Mainland China requesting clients to contact the Applicant to deal with their assets.  In those advertisements, the Applicant also made clear that it intended to apply to transfer any unclaimed shares into the High Court. 

3.  Despite efforts of the Applicant, there still remain unclaimed cash and securities held by the Applicant on behalf of its clients.  The Applicant therefore took out this originating summons under sections 56 and 62 of the Trustee Ordinance, Cap 29, for an order for payment into court.

4.  Section 62 provides that 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 the court, be dealt with according to the orders of the court.  The receipt or certificate of the proper officer shall be a sufficient discharge to trustees for the money or securities so paid into court.

5.  What has to be established for an application of the present nature are that (a) the assets in question are held by the applicant as trustee; and (b) despite reasonable efforts, the beneficiaries cannot be contacted or the trustee is otherwise unable to obtain instructions as to how to deal with, dispose of or return the trust assets: Gold Fund Securities Co Ltd, [2020] HKCFI 2884, §13, K Yeung J. 

6.  The Court will make an order for disposal (such as sale), if in its opinion it is expedient to do so: section 56 of the Trustee Ordinance; Re Joint and Several Liquidators of Bankamerica Nominees (Hong Kong) Ltd [2020] HKCFI 399, §17, DHCJ Le Pichon.

7.  In the case of shares in delisted companies which have been compulsorily wound up, dissolved or struck off and where it is not possible for new share certificates to be issued in the name of the Registrar of the High Court, the Court may give liberty to the applicant to deal with those shares as they see fit, including forfeiture thereof: Re Piper Jaffrey Asia Securities Ltd (in liquidation) [2013] 2 HKLRD 835; Re A One Investment Co Ltd, HCMP 1518/2013, 23 October 2013.

Analyses

8.  The Client’s Agreement between the Applicant and its client provided expressly in Clause 4 that, unless otherwise instructed, the Applicant would hold its client’s money in a client’s account or trust account in an approved financial institution.  As for securities, Clause 5.1 provides that securities may be placed in an independent trust/client’s account or be registered in the Applicant’s name.  The Applicant is plainly holding cash and securities as a trustee for its respective clients.  The requirement in paragraph 5(a) above is established.

9.  In view of paragraph 2 above, I am satisfied that the requirements in paragraph 5(b) above have been established.

10.  There are 3 categories of unclaimed assets set out in the Schedule to the originating summons:

(1)  Cash (Part A of the Schedule);

(2)  Unclaimed shares of listed companies and companies which have been delisted but still exist, the shares certificates should be withdrawn from the Central Clearing and Settlement System (“CCASS”) or the relevant delisted companies and deposited into court (Part B1 of the Schedule); and

(3)  The shares of companies that have been delisted, wound up or struck off, the shares of which are of little or no market value and it is not possible to obtain the share certificates from CCASS or the relevant companies (Part B2 of the Schedule).

11.  It is in my opinion expedient for the cash and shares in Parts A and B1 to the Schedule to be paid into Court and for the Applicant to be given leave to dispose of (including selling and forfeiting) those shares in Part B2 of the Schedule.  Upon sale, it should deposit the proceeds into Court.

12.  I order as follows:

(1)  There be a declaration that the assets as set out in the Schedule are held by the Applicant as trustee for each of the named clients set out therein.

(2)  The cash and shares in Parts A and B1 to the Schedule are to be paid into Court.

(3)  There be leave to the Applicant to dispose of (including selling and forfeiting) those shares in Part B2 of the Schedule. Any proceeds of sale shall be deposited into Court.

(4)  There be notification of this order and the rights of the Applicant’s clients to apply for payment out of their respective unclaimed assets under Order 92 of the Rules of the High Court advertisements in one Chinese and one English newspaper respectively within 21 days from the date of this order, and by way of letters to the clients and/or their legal or personal representatives at their last known addresses by post.

(5)  Upon satisfaction of paragraphs (2)-(4) of this order, 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 (notice of lodgment into Court) is deemed to have been complied with by the Applicant.

(6)  Liberty to apply.

(7)  There be no order as to costs.

13.  I thank Mr Ken Lee for his assistance.