Re Chekiang First Securities Co Ltd

HCMP 923/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 923 OF 2006

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BETWEEN

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Before: Deputy High Court Judge L. Chan in Chambers

Date of Hearing: 7 June 2006

Date of Decision: 7 June 2006

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D E C I S I O N

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1.This is an application by the applicant for an order under section 62 of the Trustee Ordinance, Cap. 29 and Order 92 of the Rules of the High Court, Cap. 4A. 

2.The applicant is a wholly-owned subsidiary of Chekiang First Bank Limited.  The bank has been acquired and taken over by Wing Hang Bank Limited.  Wing Hang Bank has its own security subsidiary.  To avoid duplication of services and efficient use of resources, Wing Hang Bank intended to stop the operation of the applicant if the take-over should materialize. 

3.There were listed securities and moneys kept in the accounts of many of the applicant’s customers.  The securities were kept in the applicant’s account with the Hong Kong Central Clearing and Settlement System and/or other settlement systems.  They were all scriptless.  These securities and moneys were held by the applicant as trustee for its customers, and I refer to Re Peregrine Brokerage Limited,HCMP2736 of 2003.

4.Before the actual takeover of Chekiang First Bank by Wing Hang Bank, it was already known that if the takeover should proceed, Wing Hang Bank would stop the operation of the applicant.  The applicant thus in February 2004 issued a standard letter to all its customers, asking them to either authorise the switching of their accounts to Chekiang First Bank or to withdraw all their securities and moneys from the applicant. 

5.From February 2004 onwards, the staff of the applicant also tried to contact the customers by telephone, asking them either to switch their account to Chekiang First Bank or to withdraw their securities and moneys.  Many customers responded to the applicant’s requests but some did not.  There are also some customers who have already passed away but there are not yet any personal representatives appointed to administer their estates.

6.On 25 August 2005, the applicant’s solicitors, Messrs Yu, Tsang & Loong, wrote to all those customers, advising them that unless they respond to the applicant or its solicitors, the applicant would apply to this court for an order allowing the applicant to lodge with this court all their securities and moneys under section 62 of the Trustee Ordinance.

7.I am satisfied that the applicant has made reasonable efforts to contact its customers so that they can either switch their accounts or withdraw their securities and moneys.  I am also satisfied that there are still some securities and moneys in the accounts of the applicant’s customers as particularised in the lodgement schedule annexed to the originating summons and these customers are either out of touch or have passed away as stated in the said schedule.

8.In the premises, I declare and order that the applicant be allowed to pay the unclaimed cash and deposit the unclaimed securities as particularised in the said schedule into court under section 62 of the Trustee Ordinance and Order 92 of the Rules of the High Court.  I further order that the applicant shall advertise once within the next 7 days and once on the 1st day of July 2006 in both a Chinese-language and an English-language daily newspaper a notification of this order and of the rights of these customers or the personal representatives of their estates to apply for payment out of such cash and securities under Order 92, and that any unclaimed cash and securities be dealt with in accordance with Rule 23 of the High Court Suitors’ Fund Rules, Cap. 4B.

9.I make no order as to costs.

Ms So Wen Yin, Yvonne, of Messrs Yu, Tsang & Loong, for the Applicant