Re China-hong Kong Link Securities Company Ltd (in Members’ Voluntary Liquidation)

HCMP 523/2025

[2025] HKCFI 2571

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 523 OF 2025

____________

____________

____________

________________________

D E C I S I O N

________________________

A. BACKGROUND

1.This is an ex parte application filed by Originating Summons on 3 April 2025 (“OS”). The Applicant applies for an order to pay unclaimed monies and securities into court and/or otherwise dispose of them pursuant to ss.56 and 62 of the Trustee Ordinance, (Cap.29) (“TO”).

2.The Applicant was once a licensed securities brokerage company. It submitted cessation notifications to the Securities and Futures Commission on 27 July 2022 notifying its intended cessation of regulated activities with effect from 20 August 2022.

3.On 22 August 2022, the sole member of the Applicant passed a special resolution to wind up the company and appointed Mr Lai and Mr Osman Mohammed Arab as the joint and several liquidators.

4.Despite efforts on the part of the Applicant, there are still unclaimed assets held by it on behalf of its clients, comprising of monies kept in the bank (“Unclaimed Monies”) and securities (“Unclaimed Securities”) (collectively “Unclaimed Assets”).

5.As of 31 December 2024,

(a) the Unclaimed Monies are in the sum of HK$245,620.44; and

(b) the Unclaimed Securities of listed companies are of the market value of HK$79,679.30; those Unclaimed Securities that had already been delisted do not have any market value.

B. APPLICABLE PRINCIPLES

6.Section 56(1) of TO provides that the Court can confer wide-ranging powers on a trustee for the purpose of managing or administering trust property vested in the trustee if it is in the opinion of the Court expedient to do so, 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.

7.Section 62 of TO provides that the trustee may pay the trust assets into Court.

8.In order to seek relief under sections 56 and 62, the applicant should demonstrate that: (i) the asset is held on trust by the applicant; (ii) there is no power vested in it as a trustee to dispose of the assets; (iii) despite reasonable efforts, 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; and (iv) it is expedient for the court to confer that power on it: Re Wing Fat Securities Limited [2021] HKCFI 3851 at §32, Winnie Tsui J; Re Ming Hon Securities Ltd, at §10, DHCJ H Au-Yeung (as he then was).

9.The powers provided by s.56(1) are wide-ranging. In the case of unclaimed securities with little or no value, the Court may allow the applicant to sell or otherwise dispose of them (including forfeiture thereof) as it sees fit, and to pay the proceeds, if any, into court: Re Gold Fund Securities Co Ltd [2020] HKCFI 2884 at §18, K Yeung J; Re Time Securities Company Ltd [2022] HKCFI 1810 at §§13(c) and 13(e), K Yeung J.

10.The Court may impose terms and conditions as it thinks fit, and direct the manner which the authorized expenditure and costs of the transactions involved are to be paid or borne between capital and income: Re Ming Hon Securities Ltd, at §8.

C. ANALYSIS

11.A broker generally is a trustee over the money and security it holds on behalf of its clients: Re Gainwell Securities Co Ltd [2018] HKCFI 1497 at §4, DHCJ Maurellet SC.

12.Moreover, the Declaration known as “客戶協議及風險披露聲明” made between the Applicant and its clients provides in Clause 2 of the preamble that “中港通證劵同意，按照本協議之條款和條件，開立及維持戶口，並以客戶之代理人或經紀身份執行買賣及處理證券的指令及提供存置及穩妥保管證劵的設施”. I am therefore satisfied that the Unclaimed Assets are held on trust.

13.However, the Declaration does not vest power in the Applicant trustee to dispose of the Unclaimed Assets.

14.The Applicant has made attempts to contact its clients, who own the Unclaimed Assets (“the remaining clients”) on the cessation of business and the termination of accounts. In particular:

(1) Both before and after the cessation of its business, the Applicant posted notices on its website on 4 May 2021, 9 July 2021, 13 September 2021 and 30 September 2021;

(2) From October 2022 to January 2025, the Applicant made attempts to contact its remaining clients through telephone calls;

(3) The Applicant sent three formal notices to its remaining clients by email and post, on or about 17 October 2022, 23 November 2022, 6 May 2024; and

(4) On 24 May 2023, the Applicant placed advertisements in Chinese and English in two locally circulated newspapers, to give notice and contact details to the remaining clients for arranging withdrawal of the Unclaimed Assets.

15.The responses received from the remaining clients can be categorized into three groups.

(1) Category A: clients who could be contacted, but did not or were not willing to provide any written instructions to the Applicant; One of the clients had passed away on 5 March 2017, and her family member is applying for letters of administration for her estate; and

(2) Category B: clients who confirmed giving up their securities; and

(3) Category C: clients who did not respond.

16.As of 1 April 2025, there are still 27 clients’ accounts which have not been closed as there are still Unclaimed Assets. Clients of Categories A and C have been informed about the hearing of this OS by letters dated 16 April 2025.

17.By reasons of paragraphs 14-16, I am satisfied that the Applicant has made reasonable attempts to contact its clients but they could not be contacted or were unresponsive.

18.As the Applicant has ceased business, it would be expedient to dispose of the Unclaimed Assets.

19.Considering the relatively small amount of Unclaimed Cash and the value of the Unclaimed Assets, payment into Court would not impose an undue burden on the Court’s resources: Re Grand Cartel Securities Limited [2022] HKCFI 743 at §30, Winnie Tsui DHCJ (as she then was).

20.Having considered the evidence, I am of the view that it is expedient to make an order for payment of the Unclaimed Assets into Court as suggested by the Applicant.

D. DISPOSITION

21.I order as follows:

(1) There be a declaration that the Unclaimed Assets are held by the Applicant as trustee for the respective clients as set out in Annex 1 to the OS [to be annexed to the Order];

(2) The Applicant be allowed to pay the Unclaimed Monies be paid into court, after deducting costs and expenses pursuant to s.62 of the HCO and Order 92 of the RHC;

(3) As for the Unclaimed Securities, it being in the opinion of the Court that it is expedient but the same cannot be effected by reason of the absence of any power for that purpose vested in the Applicant by law or by the trust instrument,

(a) The Applicant be allowed to pay the unclaimed securities as set out in the Annex 1 to this Order into court by registering the unclaimed securities (except those the clients intend to forfeit and the delisted securities) and depositing the share certificates with the Registrar of the High Court;

(b) The Applicant be allowed to sell and/or dispose the unclaimed securities (except the delisted securities) of which the clients intend to forfeit as set out in the Annex 1 to this Order and pay the proceeds of them (if any), after deducting costs and expenses, into court under Section 62 of the TO and Order 92 of the RHC;

(c) The Applicant be allowed to dispose of (including forfeiting) the delisted unclaimed securities in any way where the Applicant has not obtained written authorization from the clients as set out in the Annex 1 to this Order;

(d) The Applicant be allowed to pay into court dividends, if any, received by it in respect of the Unclaimed Securities as set out in Annex 1 to this Order;

(4) The Applicant shall within 28 days advertise in both a Chinese language and an English language daily newspaper a notification of the above orders and the rights of the clients to apply for payment out of his unclaimed monies under Order 92 of the RHC;

(5) Upon compliance with paragraphs (1) to (4) above, the Applicant be discharged from any obligations or claims in respect of the unclaimed assets, and Sections 56 and 62 of the TO and Order 92 of the RHC are deemed to have been complied with by the Applicant;

(6) There be no order as to costs.

22.I thank Mr Yan for his assistance.

Mr Yan Kwok Wing, instructed by CLKW Lawyers LLP, for the Applicant