Re Times Securities Co Ltd

HCMP 1431/2021

[2022] HKCFI 1810

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1431 OF 2021

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Before:  Hon K Yeung J in Chambers

Date of Written Submissions:  14 June 2022

Date of Decision: 22 June 2022

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DECISION

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1.These are the Applicant’s applications by (a) ex parte Originating Summons of 24 September 2021 (the “Ex Parte OS”) supported by the 1^st affirmation of So Mee Har (“SMH”, “SMH Aff1”) for an order under sections 56 and 62 of the Trustee Ordinance (Cap 29) (the “TO”) to deal with certain unclaimed and relinquished assets (the “Subject Assets”), and (b) a subsequent summons of 31 May 2022 (the “Amendment Summons”) for amendment of the Ex Parte OS.

2.I have previously directed that both the Ex Parte OS and the Amendment Summons be dealt with on the papers.

3.I have read the submissions of Mr Ross Li of 14 June 2022 in support. Below is my Decision.

The Amendment Summons

4.The Amendment Summons is supported by the 2^nd affirmation of SMH (“SMH Aff2”).  It is filed to correct certain details in relation to the Subject Assets previously set out in the Ex Parte OS and SMH Aff1.

5.I am satisfied that the inaccuracies requiring amendment are the results of the Applicant’s inadvertent mistakes.  They are necessary so that details of the Subject Assets are accurately stated.  No party will be prejudiced thereby.

6.I grant an order in terms of the Amendment Summons, and amend the Ex Parte OS as per the draft Amended Ex Parte Originating Summons attached thereto (the “Amended Ex Parte OS”).

The Amended Ex Parte OS

7.The Applicant was incorporated in Hong Kong on 2 May 1996.  It has been an exchange participant of The Stock Exchange of Hong Kong, and a holder of a “Type 1” licence granted by the Securities and Futures Commission (the “SFC”).

8.On 6 August 2019, the Applicant’s board of directors resolved that it would cease its securities trading business.  On 13 August 2019, the Applicant applied to the SFC for approval to cease carrying on “Type 1” activities with effect from 28 November 2019.  Correspondence between the Applicant and the SFC ensued.  From those correspondence, the Applicant understands that before approval can be obtained, it has to return to its clients (or otherwise properly dispose of) all the assets held in its name for its clients.  The Applicant has encountered difficulties in that regard.  Some assets have remained unclaimed despite attempts to contact its customers.  Some others have been relinquished.  The present application has hence become necessary.

9.In an application under section 62 of the TO, it has to be shown that:

(a)  the applicant is a trustee of the assets sought to be dealt with; and

(b)  it has made reasonable efforts to contact the clients to deal with the unclaimed assets.

10.I note the nature of the Applicant’s business activities.  I have considered the terms of the relevant account opening forms, account documents, Cash Client’s Agreements (and in particular Clauses 3.1, 4, 5 and 7(1) thereof) and Uniform Margin Client’s Agreements (and in particular Clause 3 and 8(a)) thereof.  I am satisfied that the Applicant has been a trustee of the Subject Assets.

11.The Applicant has made efforts to reach its clients.  Some of them have successfully been reached.  Some of those have decided to relinquish the securities concerned, and have signed “Declarations of Relinquish of Shares” in confirmation.  Some have remained uncontacted despite efforts.  The efforts included advertisements in South China Morning Post and Sing Tao Daily, posting of registered mails, making of phone calls, and sending of WhatsApp messages.  A few of the clients have passed away, but that the personal representatives could not be reached. 

12.On the evidence before me, I am satisfied that the Applicant has made reasonable efforts to contact its clients.

13.The Subject Assets comprised several categories.  They need to be dealt with differently.  In gist:

(a)  for unclaimed cash sums, they are sought to be paid into court;

(b)  for unclaimed securities in respect of which there remains a market, they are sought to be sold and the proceeds paid into court;

(c)  for unclaimed securities in respect of which there is no or no longer any market (due to the companies concerned having been delisted or otherwise), they are sought to be dealt with as the Applicant sees fit (including forfeiture);

(d)  for relinquished securities in respect of which there remains a market, they are sought to be sold and the proceeds paid into court;

(e)  for relinquished securities in respect of which there is no or no longer any market (as the companies concerned never having been listed, or been delisted, or otherwise), they are sought to be dealt with as the Applicant sees fit (including forfeiture).

14.I have considered the various appendices and amended appendixes appended to SMH Aff1 and Aff2.  I am satisfied that the application and the orders being sought are appropriate.

15.I also order for the purpose of Order 92 rule 4 that notice of lodgment be made by advertisement.

16.I make an order in terms of the Amended Ex Parte OS.

Written Submissions by Mr Ross Li, instructed by Iu, Lai & Li, for the Applicant