Hong Kong Law Journal 1971 - 2024

Section 7(2) of the Limitation Ordinance provides that an action for the recovery of land expires twenty years after the date of accrual of the cause of action. In a recent decision of the Hong Kong Court of Final Appeal, the court considered the application of section 7(2) in relation to the right of a mortgagee against a mortgagor who never made any payments on the mortgage. Surprisingly, the court found, despite the passage of 27 years from the date of the mortgage, that the mortgagee's rights were not time-barred. The author questions the correctness of the decision in light of the authorities, and identifies a number of concerns to which the decision gives rise.

A novel form of dispute resolution, an alternative to litigation and arbitration, is about to be introduced in Hong Kong. The authors explain the characteristics of the new dispute resolution system, and identify a number of legal questions to which the new system gives rise. On balance, the authors conclude that the new dispute resolution system will not constitute an unacceptable ouster of the court's jurisdiction, and will provide an expeditious and useful alternative to existing mechanisms.

This article is based on a lecture given at the invitation of the Judicial Studies Board, in which the author, Lord Millett, who served as leading counsel in the landmark tax avoidance case of Ramsay v Inland Revenue, considers the recent application of that case by the Hong Kong Court of Final Appeal. The author is of the view that the Court of Final Appeal was correct in its interpretation and application of the decision, and reflects on the consequences.

In this article, based on a lecture delivered as the inaugural Peter Willoughby Memorial Lecture, the author, a former Permanent Judge and now Non-Permanent Judge of Hong Kong's Court of Final Appeal, ruminates on the age-old legal judicial tension between deciding cases according to the judge's "conscience" or individual "sense of justice", and deciding them according to established principle. Using as the basis of his discussion the recent decision of the Privy Council in Union Eagle Ltd v Golden Achievement Ltd, a case concerning a late payment in a land transaction, the author warns of the dangers of the former approach. The author concludes that decisions made according to established principle can also be "common sense" decisions.

The Personal Data (Privacy) Ordinance has been in force for over four years. The law and practice of discovery in civil litigation has a history that is measured in centuries. This article discusses the potential for conflict between the two and seeks to provide an analysis of how co-existence may be achieved. The article concludes that such co-existence is possible if the Ordinance is interpreted and applied in a practical and pragmatic manner. However, the author suggests that consideration be given to amendment of the Ordinance in order to avoid the possibility of the Ordinance being applied rigidly in discovery at the expense of achieving a just result in the litigation concerned.

Domain name disputes, a byproduct of the growth of the Internet and electronic commerce, are becoming more frequent in Hong Kong. The author considers how domain name disputes can be dealt with under Hong Kong law, having regard to legal developments on domain name dispute resolution in other jurisdictions. The author also considers the Uniform Dispute Resolution Policy ('UDRP') adopted in 1999 by the Internet Corporation for Assigned Names and Numbers ('ICANN'), the international corporation responsible for international domain name policy. The author concludes that Hong Kong should adopt a UDRP-like dispute resolution procedure, as best suited to facilitate electronic commerce in Hong Kong.

An agent is a fiduciary and as such owes a duty of loyalty to his principal. This clear rule of equity is of long and distinguished pedigree. The law of England and Hong Kong are identical on this issue. Acting for two principals in respect of the same transaction is a clear breach of the duty of loyalty, but may be overlooked if the agent provides full information by way of disclosure to both principals and seeks their informed consent. Estate agents in Hong Kong habitually act for both parties in the sale and purchase of land and seek double commissions. The rule against such double employment and the requirements needed to avoid it are discussed with particular reference to several recent cases, and avenues to allow the estate agency profession to avoid the invalidity of their agency contracts are explored.

This article is concerned with the legal requirements for a valid execution of documents by a company, with special emphasis on the problems in execution of assignments by a single director of a company. For a valid execution, the specific provisions in a company's articles or the requirements of statute or common law must be followed. This article argues that in the absence of express provision in a company's articles to exclude the statutory requirements, the provisions of the statute are binding. The common law will apply only in the event of an express provision in the company's articles saying so. Where the company's articles do not say so, an execution by a single director is prima facie defective giving rise to serious problems, especially in relation to conveyancing transactions.

The forthcoming accession of China to the World Trade Organisation will benefit China, particularly in respect of the financial markets, with Shanghai as an important securities and banking centre. The necessary adaptation of the legal framework and its practical application, however, require a large amount of work and education that can hardly be provided within the five-year transitional period before accession. In contrast, Hong Kong already has a comparative advantage in that the conditions of a stable political, social, and legal environment are already fulfilled. If Hong Kong carefully observes the developments in the financial sector and continues to implement an adequate legal framework, one that is problem-oriented, with basic government regulation, and complemented by reasonable self-regulation, the prospects are good that the present status of Hong Kong as a major financial centre can be maintained over time.

A formal tax system was set up in Mainland China some fifty years ago. It has undergone frequent and drastic changes as China learns from international experience to improve and strengthen its own revenue laws and moves from a planned economy to a socialist market economy. However, even after the latest series of reforms in the 1990s, an equitable playing field does not exist in China as foreign capital enterprises are enjoying privileged tax incentives. This study provides a framework of the current tax system in China, examines the evolution of tax laws in light of the socio-economic developments, and investigates the current structure of tax administration. In the author's view, reforms in Chinese tax laws will likely continue, and with China future accession to the WTO, these will be significant reforms, including unification of income tax laws, and the implementation of a comprehensive value-added tax system.

In May 2001, the Companies (Corporate Rescue) Bill was gazetted. The Bill makes provision for a statutory corporate rescue mechanism, to be known as provisional supervision. The most controversial aspect of the Bill is the treatment of workers' wages. The Bill essentially requires that before a company may even enter into provisional supervision, it must have paid off in full all debts (and other entitlements) owing to its workers. The Bill does not, however, explain how a financially distressed company is supposed to find the cash to meet the statutory requirement. This requirement may also be criticised because it is at odds with the treatment of workers' wages in other insolvent procedures, thus leading to unfairness. This article proposes an alternative approach, one which, it is suggested, is in the interests of both financially troubled companies and their workers.

This article is based upon a lecture concerning constitutional interpretation delivered in Hong Kong in April 2000. The author addresses general questions such as what a constitution is, who interprets a constitution, and how constitutional interpretation relates to politics, and applies them to Hong Kong and mainland China, with attention to recent developments that have taken place in those jurisdictions. The author reflects on how some of these developments appear to an American constitutional lawyer, and revisits some general issues about constitutional interpretation in light of those developments.

In this article, the author examines the theoretical basis for the equitable defence established in Liggett (B) (Liverpool) Ltd v Barclays Bank Ltd, namely, that a bank is entitled to the benefit of a payment made without the customer's authority if the payment discharges a legitimate debt of the customer. The author analyses recent cases where the defence was considered, and postulates that the defence can be best explained on the basis of the doctrine of apparent authority.

The decade of the 1990s has been marked by financial crises in countries around the world, often with international and global impact. As a result of these crises, considerable focus has been placed on developing a "new international financial architecture", building upon the existing international systems and institutions. The debate has focused on the development of standards for implementation through informal organisations such as the Basle Committee on Banking Supervision in individual countries and in developing systems for the monitoring of this process of implementation, particularly through the International Monetary Fund. Such standards and their implementation and monitoring may have a significant impact in reducing financial crises in the future, but certain gaps and problems remain.

Much has been written about youth crime, justice and corrections in Hong Kong in the past three decades, in particular, about the historical roots of the youth justice system, causes of juvenile delinquency, and the outcomes of different rehabilitative programmes for young offenders. However, little is known in theory, practice and policy about how community-based and custodial sentences can achieve the goals of rehabilitation and correction for young offenders. In this paper, the author analyses the purposes of penal measures with reference to the classical theories of punishment, rather than empirical data or statistics. The author argues that a community-based sentence, in many respects, performs as or more effectively than a custodial programme in achieving the various sentencing aims.

The author proposes a three-stage approach to making legal findings of dishonesty in both civil and criminal cases. This approach considers the following issues: what were the relevant facts and matters, and what was the significance of the defendant's knowledge? What standard of honesty is to be applied to the facts? And was the defendant aware that he fell below this legal standard? After considering the combinations of possible outcomes at each stage, the author arrives at five formulations of dishonesty. These formulations lie along a spectrum from the most subjective standard (defendant is aware that he has fallen below his own sense of honesty) to the most objective (given the imposed knowledge, defendant's conduct falls below objective standards of honesty). The author proceeds to apply his analytical framework in critically assessing authorities in the area of accessory liability for dishonest assistance. The author hopes that the framework proposed can assist courts in reaching greater consistency and coherence in this and other areas of law involving legal determinations of dishonesty.

In April 2001, a group of insolvency professionals from the Hong Kong Special Administrative Region visited Beijing and held a constructive meeting on cross-border insolvency with a delegation of Beijing government officials and insolvency professionals. The meeting was initiated by the Foreign Economic and Trade Commission of the Beijing Municipal Government. This article describes the discussions of the meeting with some analysis of the issues concerned, with a focus on cross-border insolvency issues arising in the insolvency of foreign investment enterprises in Beijing. The article argues that China should adopt a national solution to cross-border insolvency issues and that the Mainland judiciary should be more actively involved in the process.

Should foreign offenders be entitled to a discount on sentence for the hardships they will experience in a Hong Kong jail? There have been conflicting decisions from the Court of Appeal on this issue. One approach is to say that the offender waives any right to complain about such hardships which are, after all, foreseeable. Another approach is to say that the hardships are too real for the law to ignore and must be considered (with any other relevant factors) to ensure that the punishment is proportional to the crime. The author argues, from both a legal and a philosophical perspective, that the second approach should be followed.

Section 13 of the Immigration Ordinance provides that the Director of Immigration may authorise any person who landed in Hong Kong unlawfully to remain in Hong Kong. In Lai Yau Chik v Director of Immigration, the Court of First Instance recently held that this power could only be exercised by the Director of Immigration personally. The court appears to have taken the view that the legislature intended to exclude the general principle of delegation in this context. On its terms, this decision has far-reaching consequences for a large number of Hong Kong citizens whose permission to remain in Hong Kong was granted by lesser Immigration Department officials. The author critically assesses this decision in light of the statutory scheme, and the principles of devolution and delegation of statutory powers.

Dental practitioners are thought to be subject to the same principles in relation to the tort of negligence as are medical practitioners. However, in addition to their common law liability, dental practitioners may be more vulnerable to strict liability under the Sale of Goods Ordinance because, unlike medical practitioners, provision of materials is a large part of dental practice. The classification of the provision of dental materials to patients can affect the potential liability of dentists, ie whether there is a contract for the supply of goods, for the supply of services, or something else. This article explores the implications of the Sale of Goods Ordinance and the impact of reforms recently recommended by the Law Reform Commission of Hong Kong on dental practitioners in Hong Kong.

This article provides a brief overview of the development of administrative law in Australia, with comparisons drawn with developments in England. The author first outlines the operation of the Australian Administrative Appeals Tribunal and refers to the Australian Government's unsuccessful attempt to restrict the jurisdiction of the Tribunal. The author then discusses the development of the doctrine of substantive legitimate expectation as developed in the ex parte Coughlan case in England, and notes that Australian courts have not gone as far. The author then addresses the difficult question of availability of judicial review against decisions of non-government entities, and argues that the broad composite approach adopted in England, which takes into account the source and nature of the power as well as the consequences of the decision, should be followed in Australia.

A recent bill in Hong Kong proposes a number of amendments to the offence of rape and other related sexual offences as they apply to married persons. Part A of this article discusses the proposed amendments to the offence of rape and examines the case law under the analogous English legislation, with a particular focus on the House of Lords' decision of R v R [1992] 1 AC 599 and its relevance to Hong Kong law. Part B considers the effect of the proposed amendments on a number of related sexual offences, in particular the effect of the new definition of "unlawful sexual intercourse". It is argued that, whilst the amendments to rape and several other key offences are to be warmly welcomed, this new definition is likely to cause confusion and may also reduce the protection currently afforded to certain categories of women against sexual offences committed by their husbands, thus necessitating further review and reform.

Protection of integrated circuits (ICs) is one of the most neglected fields within the area of information technology law. This article reviews the international developments in the protection of ICs and the case of Hong Kong. While Hong Kong has undoubtedly met international standards in this regard by creating a sui generis system for protecting IC topographies, it has yet to deal with a fundamental and unresolved problem, namely, the relationship between the sui generis system and the copyright system. This article investigates the cause of the problem and traces it to two possible legislative oversights in the Copyright Ordinance (Cap 528).

This article examines the legal effects of publications that interfere with the administration of justice. Of primary concern is the interplay between the strict liability rule of the Contempt of Court Act 1981 that applies to contempt proceedings, and the concept of abuse of process that applies in the trial that was the subject of the publication. It is argued that the two are asymmetrical, ie that there is no necessary connection between them. The reasons for this asymmetry, and its implications for the administration of justice, are discussed.

After almost 15 years of lobbying and negotiation, China has finally cleared all the hurdles to gain World Trade Organisation (WTO) membership, joining in November 2001. However, foreign investors in China are increasingly embroiled in disputes with Chinese companies due to logistics barriers. This article is a literature review which examines the idea that China's entry into the WTO and its legal reforms in response to globalisation will have a significant impact on the entire system of logistics management. The existing literature reveals very little systematic research in this area from the legal perspective. With continual legal reforms, there are tremendous opportunities to fundamentally improve logistics theory and practice. Within such a theme, this article critically investigates the constraints of logistics management in China in the context of its WTO entry, and puts forward ideas that may help to create a blueprint for China's future legal reforms.