RE EVERHOT SECURITIES LTD

RE EVERHOT SECURITIES LTD

The court found the applicant holds the unclaimed securities as trustee, the applicant took reasonable and sufficient steps to notify residual clients, and practical impediments (Registrar not a CCASS participant) justify authorising the applicant to sell or otherwise dispose of the unclaimed securities under s56 TO...

Source-derived case information.

Citation
[2019] HKDC 1464
Parties
Applicant: Everhot Securities Limited; Residual Clients/beneficiaries: Residual Clients; Beneficial Owner (residual Client): Mr Cheng
Court
District Court
Jurisdiction
Hong Kong
Judgment Date
30 October 2019
Case Number
DCMP2697/2019
Procedural Posture
Miscellaneous Proceedings (originating Summons Under Trustees Ordinance) / Hearing and Decision (in Chambers)
Outcome
Originating summons granted in terms except paragraph (4) substituted to grant liberty to applicant to deal with 600 shares in 401 Holdings Ltd including forfeiture and discharge from obligations in respect of those shares.
Legal Topics
Unclaimed Securities, Payment Into Court Under Section 62 Trustees Ordinance, Sale/disposal of Trust Property Under Section 56 Trustees Ordinance, Notice by Advertisement, Revocation of SFC Licence
Source Language
en
Trusts Securities Regulation Civil Procedure Company Law Unclaimed Securities Payment Into Court Under Section 62 Trustees Ordinance Sale/disposal of Trust Property Under Section 56 Trustees Ordinance Notice by Advertisement +1 more

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Parties

Everhot Securities Limited

Applicant

Residual Clients

Residual Clients/beneficiaries

Mr Cheng

Beneficial Owner (residual Client)

Procedural Posture

Miscellaneous Proceedings (originating Summons Under Trustees Ordinance) / Hearing and Decision (in Chambers)

Legal Issues

  1. 1 Whether a trust subsists between the broker (applicant) and its clients in respect of unclaimed securities
  2. 2 Whether the court should authorise sale or disposal of the unclaimed securities and payment of net proceeds into court to end the trust under Trustees Ordinance ss56 and 62
  3. 3 Whether notice to residual clients was sufficient and whether the court may permit forfeiture or alternative dealing with unsaleable shares

Ratio Decidendi

The court found the applicant holds the unclaimed securities as trustee, the applicant took reasonable and sufficient steps to notify residual clients, and practical impediments (Registrar not a CCASS participant) justify authorising the applicant to sell or otherwise dispose of the unclaimed securities under s56 TO and pay net proceeds into court under s62 TO to end the trust and discharge trustee obligations; for unsaleable shares where the beneficial owner has abandoned claim (600 shares in 401 Holdings Ltd), the court granted liberty to deal with them including forfeiture and discharged the applicant from obligations in respect of those shares.

Court Disposition

Originating summons granted in terms except paragraph (4) substituted to grant liberty to applicant to deal with 600 shares in 401 Holdings Ltd including forfeiture and discharge from obligations in respect of those shares.

Orders

  • Declaration that a trust subsists between Everhot Securities Limited and its clients in respect of the unclaimed securities
  • Order authorising the applicant to procure sale or otherwise dispose of the unclaimed securities under section 56(1) Trustees Ordinance and to pay the net proceeds into court