Re Lamtex Securities Ltd

HCMP 274/2023

[2023] HKCFI 1107

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 274 OF 2023

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JUDGMENT

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1.This is an application made by Lamtex Securities Limited by way of an ex parte originating summons filed on 21 February 2023 (“the Originating Summons”), for an order, inter alia, to pay unclaimed cash and securities (“the Unclaimed Assets”) into court and otherwise dispose of them pursuant to sections 56 and 62 of the Trustee Ordinance (Cap.29, Laws of Hong Kong) (“the Ordinance”).

2.The applicant has been a licenced securities broker since April 2004.

3.On 2 July 2020, the applicant decided to cease carrying on Type 1 regulated activity with effect from 10 August 2020.

4.Since 2021, the applicant had taken various steps to inform its clients about its cessation of business. It had issued notices of suspension, further reminders and letters by post, made telephone calls and caused Chinese and English notices to be published in Hong Kong Commercial Daily and The Standard, so as to ask its clients to withdraw or transfer away their assets deposited with the applicant. The applicant had also made it clear to its clients that, should they fail to claim such assets, it would apply to pay the unclaimed assets into Court 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.

6.Section 56(1) of the Ordinance provides that:

“Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, expenditure, or other transaction, is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument, if any, or by law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, if any, as the court may think fit and may direct in what manner any money authorized to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.”

7.Pursuant to the above provision, if the Court considers it expedient to do so, it would confer power(s) on a trustee for the purpose of managing or administering trust properties vested in such a trustee. The powers as provided by the said section 56(1) are wide-ranging. The Court would confer on the trustee such powers which are necessary for the aforesaid purpose. Before making the order, the Court would have to be satisfied that the trustee did not have such powers in the first place.

8.While conferring such powers on the trustee, the Court may also impose terms and conditions as it thinks fit, and direct the manner in which the authorised expenditure and costs of the transactions involved are to be paid or borne between capital and income.

9.Section 62 of the Ordinance stipulates 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.”

10.An applicant for an order under section 62 of the Ordinance 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.

11.I have considered the evidence filed in support of this application. I am satisfied that the applicant has established the two matters as required under section 62 of the Ordinance. In the circumstances of the present case, I hold the view that it is expedient for the unclaimed assets to be paid into Court.

12.By reasons of the aforesaid, I make an order in terms of the draft order submitted to the Court by counsel.

Ms Jasmine Cheung and Ms Clara Wong, instructed by Michael Li & Co, for the applicant