Re Peace Town Futures Ltd

HCMP 1355/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 1355 OF 2012

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Before: Deputy High Court Judge L. Chan in Chambers

Date of Hearing: 1 August 2012

Date of Judgment: 1 August 2012

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J U D G M E N T

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1.This is an application for an order to pay the unclaimed cash of 62 clients totalling HK$108,285.90 into court under section 62 of the Trustee Ordinance, Cap 29 and Order 92 of the Rules of the High Court.

2.The applicant is a Hong Kong Company that used to carry on the trading of commodity futures and leveraged foreign exchange and provide commodity trading services to clients which are regulated activities under the Securities and Futures Ordinance.

3.The group of companies which comprised the applicant resolved to consolidate its regulated activities into one company namely Peace Town Securities Limited which is now called Peace Town Financial Services Limited.

4.The applicant had issued three letters to its clients on 20 July, 16 August and 2 September 2010 advising them to contact the applicant’s investment representatives to arrange for continuation of services by the other company.  In the second letter, the applicant further advised the clients that the applicant would stop all its commodity trading business on 28 August 2010.  In the third letter, the applicant further advised the clients that its commodity trading services had been transferred to Peace Town Securities Limited and urged those who had not opened an account with that company to contact the investment representatives to deal with the procedure.

5.On 15 December 2011, the Hong Kong Futures Exchange Limited approved the applicant’s application for resignation as an exchange participant and relinquishment of its futures exchange trading right from 22 December 2011.

6.Most of the applicant’s clients had closed their accounts with the applicant.  There are however 62 of them who have not done so.  The applicant’s staff had between 1 September 2010 and 28 February 2012 made at least two attempts to contact each of these clients.  It did so based on the contact details of these clients as kept in its records and by its account representatives.  Such attempts included phone calls and emails but were without success.  It could not obtain any instructions from them on how to deal with their cash in their accounts.  The details of the cash positions of these clients are set out in a schedule produced in exhibit YHC-6 of an affidavit of one Yiu Hi Cheong, the financial controller of the applicant.  The total sum held in these 62 accounts is HK$108,285.90. 

7.The applicant has also applied to the Securities and Futures Commission for revocation of its licence to carry on regulated activities. The revocation is now subject to the condition that the monies of these 62 clients are properly dealt with.

8.The applicant has also produced the account opening forms executed by these 62 clients.  They provide that the cash or property in the client’s account should be held by the applicant as trustee for the client and shall be segregated from the applicant’s own assets.  The applicant may apply the cash of a client for meeting its obligations to any party insofar as such obligations should arise in connection with or incidental to the commodities business transacted by the applicant on behalf of such client.

9.In the premises, it is clear that the applicant is the agent of the 62 clients and is holding their monies as their trustee (see Re Peregrine Brokerage Ltd & Anr [2004] 1 HKLRD 856; Re Celestial Finance Ltd & Anr, HCMP 657/2005, 21 June 2005; Re Chekiang First Securities Co Ltd, HCMP 923/2006, 7 June 2006; Re CMB International Capital Corporation Ltd, HCMP 355/2011, 28 April 2011).

10.In the premises, I am satisfied that the applicant is entitled to the following relief:

(1) I declare that the items of cash set out in the schedule in Exhibit YHC-6 to the affidavit of Yiu Hi Cheong filed on 4 July 2012 are held by the applicant as trustee for the 62 unclaimed clients against whom the items of unclaimed client’s cash are respectively stated in the schedule;

(2) the applicant do have leave to pay into court the unclaimed clients’ cash particularised in the said schedule;

(3) the applicant shall give notification of the declaration in paragraph 1 above and this order and the rights of the unclaimed clients to apply for payment out of their respective unclaimed cash under Order 92 of the Rules of the High Court, Cap 4A by way of advertisements in one Chinese language and one English language daily newspaper within 7 days from the date of this order and by way of letters to the unclaimed clients at their last known addresses;

(4) upon compliance of paragraph 3 above, O 92 r 4 of the Rules of the High Court is deemed to have been complied with by the applicant;

(5) no order as to costs of this application.

Ms T Yuen, of F Zimmern & Co, for the applicant