Hong Kong Law Journal 1971 - 2024

This article critiques the recent decision of the Hong Kong Court of Appeal in Ma Bik Yung v Ko Chuen, the first case to be tried under Hong Kong's Disability Discrimination Ordinance. The Court of Appeal upheld the District Court's finding of disability harassment but granted the appeal from the finding of disability discrimination. The author argues that the Court erred, by introducing a hypothetical factual scenario that was inconsistent with the District Court's findings of fact and by failing to apply s 3 of the Ordinance. The article also criticises the Court's holding that an unwilling apology is outside the scope of remedies allowed by the Ordinance. In fact similar statutory language is regularly used in Australia as the basis for orders to apologise. The author concludes by considering the potential conflict between the right to free expression and court-ordered apologies and suggests two possible approaches to the issue.

Under section 23 of the Securities (Insider Dealing) Ordinance, the Insider Dealing Tribunal is given the power to sanction culpable insider dealers by making financial orders. Such financial orders are calculated with reference to profit gained or loss avoided as a result of the insider dealing. In Insider Dealing Tribunal v Shek Mei Ling, the court of Final Appeal has provided authoritative guidance on how the profit gained or loss avoided is to be calculated.

In contrast to the abundance of similar litigation in other common law jurisdictions, software-related litigation has been relatively infrequent in Hong Kong. This article considers the different kinds of litigation in relation to defective software that are possible under Hong Kong law. It also evaluates the adequacy of the current legal framework in dealing with software contracts, and considers how the existing legal framework can be improved, drawing on the experience of other countries. It concludes that while defective software may not have produced a significant amount of litigation locally, a host of issues will soon have to be addressed by the Hong Kong courts. In addition, the need for new legislation for software liability may have to be addressed by the legislature.

Taxation reform has dominated public debate in Hong Kong since the Financial Secretary, Sir Donald Tsang, announced in the early days of the new millennium that budget deficits in Hong Kong were 'systemic'. It is, therefore, particularly appropriate at this time to reflect upon the future role of estate duty in Hong Kong's overall system of taxation. In this context, it is submitted that, contrary to many voices raised in opposition, estate duty should have a future and the case for its abolition has not been adequately established. However, looking back over the past 80 years since the enactment of the Estate Duty Ordinance, there has been little attempt to change the now outdated legislation. Estate Duty is a tax in dire need of reform. The major problem areas reflected by the current law and practice of estate duty are identified and appropriate responses to meet them are suggested. These responses range from the prosaic (simplification in certain areas), to technical amendments (where the law appears unclear), to changes in the rate structure (to achieve greater horizontal equity). Detailed criticism is focused upon the controlled company provisions and it is suggested that they be radically changed in favour of general anti-avoidance criteria that reflect well-established practice. In conclusion, the argument is made for both systemic reform and simplification to make the ordinance more easily understood and more in line with modern Hong Kong conditions.

This article examines the circumstances in which one person may attract liability for the fraud of another person. In common law systems, fact situations are traditionally distinguished according to whether the person concerned assisted in the fraud, or beneficially received the proceeds. The issues have been characterised as arising under the law of trusts, and labelled 'knowing assistance' and 'knowing receipt' respectively. Knowing assistance is now clearly established as a fault-based form of accessory liability, requiring dishonesty on the part of the accessory. In the case of knowing receipt, the liability of the recipient is restitution-based, but there is no consensus as to the degree of fault required. A strong body of opinion favours abandoning fault altogether, and focusing instead on change of position as a defence. This article seeks to consider the issues specifically from the perspective of banks and other financial institutions. They are almost always caught up in fraudulent activity of any magnitude, if only as the innocent holders and transmitters of funds. Fixing appropriate liability rules raises significant policy issues taking into account the need to protect the victims of fraud and encourage high standards in the financial sector, and yet avoid imposing unrealistic burdens which would be borne ultimately by innocent depositors.

The article examines the role of law and the legal system in catalysing Singapore's development success. It argues that there is a dichotomy in the approach with regard to commercial law and law relating to individual freedom and rights and civil society. Universalism characterises the treatment of commercial laws while cultural relativism and a communitarian-based understanding of rights and obligations are features of the law relating to the rights of the individual. Instrumentalism, driven by a particularistic communitarian political philosophy underpinned by strong Confucianist values, is very much motivated by the need for good governance as a prerequisite for economic growth and to nourish the nascent nation-building process. This helps to explain the universalism-relativism dichotomy in the approach to different laws. While it is argued that there is a strong element of instrumentality in its treatment of the legal system and the law, the government has always been careful to ensure that the laws and the legal system enjoy widespread public support and legitimacy. Such a trend is also anticipated for the Hong Kong SAR, another ethnic Chinese-majority political entity, provided that political expediency and a neo-colonial attitude are not the motivating concerns of the Beijing government.

The PRC Law-making Law was promulgated to solve problems plaguing the Chinese legislative system, such as conflicts between laws, violation of legislative powers and procedures, and poor legislative quality.However, its role may be more symbolic than practical. Among the achievements of this new legislation, the division of legislative powers is most impressive.It signifies the institutionalization of China's legislative system and incorporation of federalist elements into the Chinese state system.On the other hand, the law itself contains serious problems, eg insufficient guarantees for local legislative powers, lack of an independent legislative supervision system and omissions of any pwo9ers for the courts to interpret laws.These problems render the prospects for using the law to solve legislative problems rather slim. It may, nevertheless, lay the foundations for future legislative reform in China.

As a result of financial pressure, many Hong Kong Government departments have in recent years made an administrative decision to levy charges for some of their services. In so doing, the time-honoured constitutional principle that there is no power to levy charges in the absence of clear legislative authority may well have been overlooked. The author warns that in the absence of express or implied statutory power, such levies will be ultra vires.

This paper explores the legal nature of a Personal Identification Number (PIN) and the legal position when it is voluntarily or involuntarily disclosed to a third party. It also comments on the legality of the standard form contracts that contain terms relating to the use of PINs. It will be argued that the common law should now regard a PIN as a signature, in light of the development of modern information technology. Further, a PIN holder owes a duty of care to his bank when using his PIN. However, if the PIN disclosure is obtained from the holder by unconscionable or deceptive means, the holder should not be held liable for any consequential losses. Moreover, a bank has a duty to warn its customers of any criminal act which may be practised upon a PIN holder.

Under Hong Kong law, an owner of property with defects caused by the builder or architect's negligence has no legal remedy. This position has come about as a result of the reception of pre-handover English authorities characterizing such property damage as economic loss, and therefore outside of the law's protection. It is here argued that this position runs counter to common sense notions of fairness and the expectations of ordinary people, is not supported by social and economic policy considerations, nor defensible legal principle, and should be judicially repealed at the first opportunity.

This article examines the court's jurisdiction in section 23A of the Wills Ordinance to order that a will be rectified so as to carry out the testator's intentions with contrasting reference to the general equitable remedy of rectification. The types of mistake that can be rectified are analysed in the light of the section's providence and of the relevant case law on the analogous English provision. The important practical impact of the jurisdiction on actions against solicitors for negligence in relation to the drafting of wills is illustrated by showing how an initial application for rectification may be required to mitigate any tortious liability arising out of an alleged mistake in a will.

Procedural rules reflect different, often competing, interests. The rules governing applications to set aside default judgments are an example of this tension. The traditional approach to setting aside 'irregular' default judgments, the 'as of right' rule, entitles defendants to have the judgment set aside, without considering the merits. The rule ensures that litigants comply with the relevant procedural rules, and that defendants have notice of proceedings and are protected from the injustice that might result if judgment is unfairly entered against them. However, Hong Kong courts have begun to reconsider the as of right rule, as a result of the 1998 English Court of Appeal decision in Faircharm v Citibank. That decision departed from the traditional approach in that the Court of Appeal considered the merits of the defence, decided there was no defence and refused to set aside the 'irregular' judgment. In doing so the court introduced a new consideration, that cases should be dealt with expeditiously and proportionately. Hong Kong courts must now consider whether to retain the as of right rule, or whether the Faircharm approach would better serve Hong Kong's interests.

Conventionally, the Hong Kong Courts follow English authorities in choosing multipliers in personal injury litigation. Most judges select the multiplier by reference to a spread of multipliers in comparable English and Hong Kong cases. The House of Lords deviated from this approach recently in Wells v Wells [1999] AC 345. It approved actuarial evidence as the primary method of assessing future pecuniary loss. The actuarial tables, known as the 'Ogden Tables', issued by the British Government Actuary's Department should be regarded as the starting point for selection of the appropriate multipliers in England. Although in theory the courts of the Hong Kong Special Administrative Region are not bound by this House of Lord decision, it is anticipated that the conventional approach to choosing multipliers in Hong Kong will be hotly contested. This article attempts to analyse the legal and practical implications of Wells v Wells in Hong Kong, and surveys the modern trend of using actuarial evidence in personal injury litigation in other major jurisdictions.

This article discusses the philosophical origins of the conciliatory approach to dispute resolution in traditional China. It begins by comparing Western and Chinese institutions of dispute resolution. Then it develops the proposition that the praise of harmony and dislike of confrontational means of dispute resolution are not peculiar to Confucianism but constitute the common theme of all major schools of traditional Chinese philosophy. The creation of a utopia without disputes was the common goal. Different schools had however different, or even conflicting, ideas of how this goal might be achieved, although they all put emphasis on dispute prevention. Lastly, it is pointed out that some Confucians were not against litigation. They took it as a means to create a Confucian utopia.

Video surveillance of domestic helpers by their employers in order to confirm parental fears of child abuse has recently become topical in Hong Kong, as a result of number of recent instances coming before the courts and reported in the press. The lawfulness of such surveillance is questioned by the author, who argues that the correct interpretation of the 'domestic purposes' exemption in section 52 of the Personal Data (Privacy) Ordinance does not apply to this kind of activity. However, given the very real interests of parents in protecting their children from violence at the hands of domestic helpers, the author argues for the adoption by the Commissioner of Privacy of a code of practice on the subject under section 12 of the Ordinance.

Prompted by a recent decision in the Hong Kong Court of First Instance, the author considers the legal position of a pregnant woman on a hunger strike. Medical treatment cases demonstrate that the courts favour the principle of freedom to refuse treatment, even where the patient is pregnant, although the results in the cases have, as a practical matter, been inconsistent. Case-law concerning congenital disabilities actions against the mother may offer some guidance. In the author's view, the resolution of cases involving a hunger-striking pregnant woman cannot ignore the rights of the foetus, and will require a delicate balancing of the duty of care owed by the mother to the unborn, and the human rights of the mother on whom the duty falls.

A combination of major reform of the Arbitration Ordinance on 27 June 1997 and China's resumption of sovereignty over Hong Kong on 1 July 1997 resulted in an unfortunate hiatus in the summary enforcement in Hong Kong of arbitral awards from Mainland China and Taiwan. Enforcement in the SAR of awards from these jurisdictions could henceforth only be effected by way of an action on the award, a situation which did not promote Hong Kong as a centre for arbitrating China disputes or for enforcing Chinese awards. It was not until two further sets of amendments to the Ordinance took effect on 1 February and 23 June 2000 that this situation was redressed. Whilst these amendments have restored the status quo ante, they also make provision for interlocutory orders and directions of any arbitral tribunal sitting outside of Hong Kong to be enforced by the Hong Kong courts, with no requirement for reciprocity. The author cautions that the scope of this power, and the circumstances in which the courts of the SAR should exercise their discretion in favour of enforcement, are matters requiring definition.

The Basic Law of the Hong Kong Special Administrative Region is a unique legal product of the concept and practice of 'one country, two systems'. It represents an organic link between the socialist legal system in mainland China and the common law system in Hong Kong. The principles governing the interpretation of the Basic Law are primarily those developed by the common law tradition. However, in interpreting the Basic Law, it may also be necessary to take into account the peculiar features of the systems of constitutional and legislative interpretation in mainland China. This article examines the experience of constitutional interpretation in the common law world, particularly the United States with its relatively long tradition of the interpretation of a written constitution. It also introduces the characteristics of constitutional and legislative interpretation in the legal system of contemporary China. The article then reviews Hong Kong's experience in constitutional interpretation, both in the colonial era and under the new constitutional regime governed by the Basic Law. It suggests that there is much that Hong Kong can learn from comparative studies. In the author's view, Hong Kong's journey in constitutional interpretation has only just begun.

In 1996 the Sex Discrimination Ordinance came into force in Hong Kong. In addition to discrimination, the Ordinance also prohibits sexual harassment in a broad range of fields, including employment. This article analyses the elements of Hong Kong's statutory definition of sexual harassment, drawing on relevant case-law in the field from the United Kingdom, Australia, and the United States. The article also discusses factors that will influence whether or not the employer is held vicariously liable for unlawful harassment by an employee. The author concludes by considering certain cultural issues, including the role of individual complaints in the enforcement of the law, the reluctance of many Hong Kong women to litigate, and the debate on Asian values.

The advent of digital technology and its ability to deliver content from a variety of traditional media forms has blurred the boundaries between the computer, telecommunications and television sectors, and has led to the emergence of a 'convergence' phenomenon, thereby posing new problems and challenges for the regulators of media industries worldwide. In this article the authors trace the emergence and development of the convergence phenomenon, set out various theories put forward by communications scholars to account for its emergence, and examine the regulatory issues and concerns for media regulators that arise from the convergence phenomenon. The authors then examine the approach adopted by Hong Kong in dealing with the convergence phenomenon, and discuss briefly the recently enacted Telecommunications (Amendment) and Broadcasting Ordinances. The authors conclude that Hong Kong should shift from a 'gradualist' to a 'radical' approach in its media policy and regulation, if it is to deal adequately with the convergence phenomenon in the 21st century.

This article critiques the (in)famous 1997 decision of the Privy Council (and of the Hong Kong Courts) in Union Eagle Ltd v Golden Achievement Ltd, in which a vendor was allowed to resile from an agreement of purchase of sale solely because the purchaser was ten minutes late in tendering the purchase monies and other necessary closing documents as 'time was of the essence'. The author argues that the Court erred in employing a strict and ancient interpretation that equity will not intervene when time is made of the essence. The author suggests that the Courts should have taken the more modern approach utilized by Canadian and Australian courts. The Courts should have invoked the concepts of 'good faith', 'unconscionability', or de minimis non curat lex, among others, to force the vendor to complete the transaction, as the lateness was trivial and caused no damage. The article calls for Hong Kong courts to introduce commercial decency and reasonable standards of fair dealings into their decision making so as to allow the completion of bargains that are honestly made. The author concludes by suggesting a test for determining when equity may intervene to allow a 'grace' period for the breaching party despite time being made of the essence.

In Union Eagle Ltd v Golden Achievement Ltd the Hong Kong Court of Appeal and the Privy Council held that a purchaser of land late with payment by a few minutes did not qualify for the court's equitable jurisdiction to intervene on his behalf to save the transaction. In doing so the courts rejected the purchaser's argument in support of a broader equitable jurisdiction to intervene on the basis of unconscionability. The author considers the Union Eagle decision in light of the more recent decision of the Hong Kong Court of First Instance in Speedy Rich (Asia) Limited v Leung Pui Shu and Ho Yuen Yeuk, in which the court exercised its equitable jurisdiction to grant relief to a late-paying purchaser. The author argues for the introduction in Hong Kong of legislation similar to section 49 (2) of the English Law of Property Act 1925, which grants a broad power to the court in circumstances where it refuses to grant specific performance, to order a return of the deposit.

The certainty required in conveyancing transactions is not to be lightly compromised. However much circumstances of unconscionabiility may, in appropriate cases, warrant equity's intervention on behalf of a purchaser, the role of equity in rescuing a purchaser late with payment, even by only a few minutes, must be carefully circumscribed. The author argues for a cautious and pragmatic approach to such cases. A balance must be struck between the competing considerations of commercial certainty on the one hand, traditionally safeguarded through rigorous rules of the common law, and that of fair play and conscionability on the other.

China's prospective accession to the WTO has caused the country to open banking and other financial services to foreign investment. This article examines the legal framework for Chinese mortgages in order to identify the legal risks and difficulties inherent in the mortgage market in China. In certain areas, such as registration of mortgages, the Chinese law simply lacks sophistication. In others, for example the legal enforcement of mortgages, a systemic overhaul of the judiciary will be the only way to create confidence for foreign lenders in the market. Good contract documentation is absolutely necessary, although it may not entirely circumvent the flaws in Chinese law and its enforcement.