RE MUFG SECURITIES ASIA LTD

HCMP 83/2022

[2022] HKCFI 948

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 83 OF 2022

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DECISION

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1.  This is an ex-parte application issued by the applicant seeking various orders under sections 56 and 62 of the Trustee Ordinance, Cap 29 (“Ordinance”).

2.  The background leading to this application has been set out in the skeleton arguments by Counsel Mr Look-Chan Ho for the applicant, which is copied as follows (with bundle references omitted):

“2. The Applicant is a securities broker licensed by the Securities and Futures Commission.

3. As part of its business, the Applicant would hold the following assets on trust for its customers: (a) securities; and (b) cash arising from the customers’ original cash balance, proceeds of sale of securities, and dividends.

4. The Applicant also holds trust assets for customers inherited from Towa Securities (Hong Kong) Limited (“Towa”) and MUFG Securities Asia (Singapore) Limited (“MUS(SG)”):

(a) In November 2010, Towa (then known as Mitsubishi UFJ Securities (HK), Limited) and the Applicant issued a notice of transfer of businesses of the former to the latter under the Transfer of Business (Protection of Creditors) Ordinance (Cap 49) such that the Applicant would carry on Towa’s businesses, including securities trading and custody services.

(b) In January 2020, under an asset purchase deed between the Applicant and MUS(SG), the Applicant was appointed as trustee in place of MUS(SG) in relation to unclaimed shares and associated cash balances held on trust for persons unknown.

5. At present, the Applicant holds some securities and cash for some uncontactable customers (“Customers”), namely:

(a) Mr Anton Jose Ansaldo Estrada, a former customer of Towa since 1997;

(b) Salop Investment Limited, a former customer of Towa since at least 1998;

(c) certain unidentifiable Hong Kong customer(s); and

(d) certain Singapore customer(s), being former customer(s) of MUS(SG).

6. The securities held for the Customers are shares in companies in the following categories:

(a) existing companies which are still listed in Hong Kong, Shanghai, Malaysia or Indonesia;

(b) an existing company which was formerly listed, but has been privatised;

(c) companies which have been dissolved.

7. Especially in the course of 2021, the Applicant has attempted to contact the Customers on multiple occasions, including through the following means (where applicable):

(a) correspondence;

(b) telephone calls;

(c) personal visits; and

(d) newspaper advertisements.

8. Despite the Applicant’s multiple attempts, the Applicant has not been able to contact the Customers.”

3.  In the originating summons, the orders sought are in relation to 3 categories of unclaimed assets as set out in a schedule attached to the originating summons (“Schedule”):

(1) Part A: Cash

(2) Part B: Unclaimed shares in existing companies

(3) Part C: Unclaimed shares in companies that no longer exist

4.  The applicant seeks a declaration that the cash and shares in the Schedule are held by the applicant as trustee for each of the Customers set out in the Schedule. The applicant seeks leave to (i) pay into court the cash in Part A together with interest thereon; (ii) to deposit with the court the share certificates in respect of the unclaimed shares in Part B; and (iii) to dispose of (including by selling or forfeiting) as it sees fit the unclaimed shares in Part C and to pay the sale proceeds into court.

5.  The applicant now seeks leave to amend the originating summons as upon further enquiry by the applicant, certain aspects of the order sought in the originating summons are no longer feasible in practice, as the applicant is not able to obtain physical share certificates for the non Hong Kong stocks set out in Part B (“Non Hong Kong Stocks”) such that the applicant cannot deposit the relevant share certificates into court and the applicant seeks leave that those shares should fall into Part C instead of Part B.

6.  Section 56 of the Ordinance sets out this Court’s power to authorise trustees dealing with trust property. Section 62 (1) of the Ordinance provides for 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 be, subject to the rules of court, be dealt with according to the orders of the courts and under section 62(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.

7.  The principles governing the Court’s exercise of its discretion under sections 56 and 62 of the Ordinance have been well set out in a various authorities cited to this Court by Mr Ho: Re X Ltd [2018] HKCFI 15; Re Gold Fund Securities Co Ltd [2020] HKCFI 2884; Re Wah Thai Securities Ltd [2021] HKCLC 181; Re Wing Fai Securities Ltd [2021] HKCFI 3851; [2021] HKCLC 1801.

8.  As said by Yeung J in paragraph 13 of his judgment in Re Gold Fund Securities Co Ltd, in general, what has to be established for an application of the present nature are (1) the assets in question are held by the applicant as trustee; and (2) despite reasonable endeavours, the beneficiaries cannot be contacted or are unresponsive, or the trustee is otherwise unable to obtain instructions as to how to deal with dispose of or return the trust assets.

9.  In the present case, General Counsel for the applicant, Mr Wong Koon Martin, has filed two affirmations respectively in support of the orders sought in the originating summons and for leave to amend the originating summons and the Schedule.

10.  Having considered Mr Wong’s evidence, I am satisfied that the assets set out in the Schedule are trust assets held by the applicant for the Customers set out in the Schedule. I am also satisfied that reasonable efforts have been made by the applicant to contact the Customers and that notwithstanding such efforts, there have been no responses.

11.  As seen in Mr Wong’s 1^st affirmation, as one of the Customers is a Filipino from Manila, and one of the unidentified Customers is in Singapore, I am of the view that the notification of this order and rights of the applicant’s Customers should also be made by way of (i) advertisement in an English newspaper and a Tagalog newspaper in Manila, (ii) advertisement in one English and one Chinese newspaper in Singapore; and (iii) also on the applicant’s website in both English and Chinese, in addition to the advertisement in one Chinese and one English newspaper in Hong Kong.

12.  According to Mr Wong, due enquiry has been made in relation to the Non Hong Kong Stocks and that it is not possible to obtain the physical share certificates and to deposit the physical share certificates into court.

13.  In the above circumstances, I am prepared to grant leave to the applicant to amend the originating summons and the Schedule as sought upon the applicant’s undertaking to file the same and Mr Wong’s 2^nd affirmation upon expiry of GAP period.

14.  I grant an order as sought in the amended draft order, save as amended by the Court as indicated earlier.