Restitution Discussion Group Archives
| Sender: |
Rupert Shiers |
| Date: |
Thu, 30 Mar 2000 16:05:42 |
| Re: |
Hong Kong Securities Ordinance and the Grocer's Dilemma |
I wonder whether
this just one of those situations where the drafting of the legislation
forces us into a nonsense position. Without seeing the background, I my
feeling is that the effect of 85 is that the shopkeeper would not take title
to the money. Which offends my sensibilities as much as it does yours (tho,
of course, might have been the legislative intention - Hong Kong may prefer
to protect the stockbroker's client at the expense of the shopkeeper).
Nor do I think that 86 helps. The grocer's claim is not
within 86(1) as, by this time, the money is no longer in the account.
86(2) is also irrelevant.
85(2) is presumably, largely, to prevent the dodgy stockbroker
"washing" the money by giving it to his friends, etc. Therefore, it should
probably have said that the dodgy stockbroker cannot GIVE title to the
money. In that case, the shopkeeper would be protected. That is because
his title does not derive from the stockbroker, but from the operation
of law. (This, of course, assumes that Hong Kong has the same approach
to the doctrine of currency as we do in England).
Sadly, I don't see much of a way round this, and the
legislation may require amendment. Unless, of course, the courts were
to put a heavy spin on the legislation, and read in a qualification to
85(2) that it does not prevent title passing in currency (the House of
Lords took a step down this sort of road in a case this year where the
legislation governing appeals through the UK courts was defective - unfortunately,
the name of the case totally escapes me.)
Finally, I have only dealt with the proprietary situation
here. Of course, there may be a personal remedy to protect the poor man
wrongfully deprived of his eggs, as Jason Neyers suggested. Jason, did
you really mean to accuse the shop-keeper of depravity?
-----Original Message----- From: arianna pretto Dear All,
I would welcome any comments on one
small issue regarding the HK Securities Ordinance (Chap 333), which
I cannot figure out for myself without resorting to contorted explanations.
Lionel Smith was quick in enlightening me as to possible ways of interpreting
what follows, but he also suggested that I post it all to the list.
S 84 says stockbrokers/dealers must
pay into a trust account money received from clients to buy shares and
from buyers where they have sold shares for the clients. That is all
normal. Equally normal is s 85(1) which says the money in the trust
account is not available for payment of the debts of the dealer or liable
to be taken in execution.
But 85(2) says any payment in contravention
of 85(1) is void ab initio 'and no person to whom the money is paid
shall obtain any title to it'.
Does this last phrase cover the shopkeeper,
who is paid for the eggs and the butter with money the dealer has taken
from the trust account? Will he therefore have to give the money back?
Instinct would tell me that the sub-section
is nonsense in the case I put, and that the money belongs to the innocent
grocer as soon as the eggs are bought (i.e. the banknotes are delivered
to him).
The only solutions to this impasse
I can come up with are not really satisfactory. For instance, s 86 reads
'claims not affected': 'Nothing in this part shall be construed as taking
away or affecting any lawful claim or lien which any person has (1)
in respect of any money held in a trust account or (2) in respect of
any money received for the purchase of securities or from the sale of
securities before the money is paid into a trust account'. Can the shopkeeper's
claim to the value of the eggs and butter be construed as one such claim?
Arianna Pretto
Brasenose College ________________________________
_________________________
Sent: 30 March 2000 14:32
To: restitution@maillist.ox.ac.uk
Subject: RDG: Hong Kong Securities Ordinance and the Grocer's Dilemma
Oxford
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