Re Rich Bay Securities Ltd

HCMP 1064/2023

[2023] HKCFI 2399

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1064 OF 2023

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DECISION

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1.The Applicant now applies by an ex-parte Originating Summons dated 7 July 2023 for an order under sections 56 and 62 of the Trustee Ordinance Cap. 29 to pay certain unclaimed assets into court and to dispose of certain other, which assets are set out in the Schedule thereto (“the Unclaimed Assets”).

2.The Applicant was a limited company licensed by the Securities and Futures Commission to carry out types 1, 2, 4 and 5 regulated activities. It had been engaging in the business of these regulated activities since late 2003. On 31 March 2023, the Applicant ceased its business.

3.Mr Ken Lee, counsel for the Applicant, referred the court to a number of authorities including Re Gainwell Securities Co Ltd [2018] HKCFI 1497, Re Joint and Several Liquidators of Bankamerica Nominees (Hong Kong) Ltd [2020] HKCFI 399, and Re Gold Fund Securities Co Ltd [2020] HKCFI 2884. In the case of Re Gold Fund Securities Co Ltd, K Yeung J set out the matters required to be established:

“13. In general, what have 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, or dispose of or return the trust assets.”

4.I have considered the 2 affirmations of Cheung Keung Tak filed respectively on 7 July 2023 and 17 August 2023.

5.I have considered the contractual documents between the Applicant and its clients, including the Account Opening Form and the Securities Client Agreement in standard form. I am satisfied that the Applicant has been holding the Unclaimed Assets as trustee for each of the named clients.

6.On the evidence, I am satisfied that reasonable endeavours have been made by the Applicant to contact its clients since mid-December 2022 to inform them of its cessation of business and to urge them to collect or to give instructions as to the disposal of their assets. Such endeavours and efforts included sending letters and emails, making telephone calls, publishing newspaper advertisements in Hong Kong and the Mainland, sending push-notifications in its mobile application e-trading platform (through which 95% of the Applicant’s clients opened their accounts), and postponing its date of cessation twice. However, despite such endeavours, it remains unable to obtain instructions from the clients concerned to deal with the Unclaimed Assets.

7.At the hearing, this court observed that (a) Part B of the Schedule should be divided into Part B(i) and Part B(ii) such that shares of relatively small value be listed in Part B(ii) which should be sold and the proceeds paid into court, or if they cannot be sold, leave be given to the Applicant to forfeit them, and (b) the notification of this Order ought to be published in the Mainland in 2 Chinese language daily newspapers once each week for two consecutive weeks. Since then, the 3^rd affirmations of Cheung Keung Tak was filed to exhibit the revised Schedule and the supplemental skeleton submissions of the Applicant was lodged attaching thereto the revised draft order.

8.In the premises, I make the declaration and order in terms of the said revised draft order.

Mr Ken Lee, instructed by Messrs. Yu, Chan & Yeung, for the Applicant