RE DEREK LAI KAR YAN AND ANOTHER, JOINT AND SEVERAL LIQUIDATORS OF NEW JAPAN SECURITIES INTERNATIONAL (HK) LTD

RE DEREK LAI KAR YAN AND ANOTHER, JOINT AND SEVERAL LIQUIDATORS OF NEW JAPAN SECURITIES INTERNATIONAL (HK) LTD

The court held that the securities and cash held by the company were trust assets and it was expedient under Trustee Ordinance section 59(1) to allow the liquidators to sell the securities and, under section 62, to deposit the proceeds and cash (including future dividends) into court; however, the court refused to shorten the five‑year period in Rule 23(1) to an automatic three‑month transfer to General Revenue and adjourned the application relating to Mr Lu sine die with liberty to restore.

Citation
RE DEREK LAI KAR YAN AND ANOTHER, JOINT AND SEVERAL LIQUIDATORS OF NEW JAPAN SECURITIES INTERNATIONAL (HK) LTD
Parties
Joint and Several Liquidators (applicants): Derek Lai Kar Yan and Darach E Haughey; Company (in Members' Voluntary Liquidation): New Japan Securities International (HK) Limited
Court
Court of First Instance
Jurisdiction
Hong Kong
Judgment Date
27 April 2007
Case Number
HCMP373/2007
Procedural Posture
Application Under Trustee Ordinance and Companies Ordinance (members' Voluntary Liquidation) / Originating Summons Heard; Judgment Delivered (interlocutory Relief)
Outcome
Application granted in part and refused in part
Legal Topics
Unclaimed Trust Funds, Payment Into Court, Sale of Securities Held on Trust, Suitors' Funds Rules, Company Dissolution
Source Language
EN
Trusts Insolvency Company Law Civil Procedure Unclaimed Trust Funds Payment Into Court Sale of Securities Held on Trust Suitors' Funds Rules +1 more

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Parties

Derek Lai Kar Yan and Darach E Haughey

Joint and Several Liquidators (applicants)

New Japan Securities International (HK) Limited

Company (in Members' Voluntary Liquidation)

Procedural Posture

Application Under Trustee Ordinance and Companies Ordinance (members' Voluntary Liquidation) / Originating Summons Heard; Judgment Delivered (interlocutory Relief)

Legal Issues

  1. 1 Whether the securities and cash held by the company are trust assets of former clients
  2. 2 Whether liquidators may realise (sell) the securities under section 59(1) of the Trustee Ordinance
  3. 3 Whether proceeds and cash may be deposited into court under section 62 of the Trustee Ordinance

Ratio Decidendi

The court held that the securities and cash held by the company were trust assets and it was expedient under Trustee Ordinance section 59(1) to allow the liquidators to sell the securities and, under section 62, to deposit the proceeds and cash (including future dividends) into court; however, the court refused to shorten the five‑year period in Rule 23(1) to an automatic three‑month transfer to General Revenue and adjourned the application relating to Mr Lu sine die with liberty to restore.

Court Disposition

Application granted in part and refused in part

Orders

  • Liquidators permitted to realise (sell) the securities held on behalf of the former clients pursuant to section 59(1) of the Trustee Ordinance
  • Direct the liquidators to deposit the proceeds of sale and all cash balances (including future dividends) into court pursuant to section 62 of the Trustee Ordinance