Hong Kong Law Journal 1971 - 2024

The Appeal Committee of the Hong Kong Court of Final Appeal (CFA) ruled unanimously in a recent determination that it had no jurisdiction to abridge the time for a litigant to seek leave to appeal to the court in a civil cause or matter. This article draws on the judgment of the court in A Solicitor v Law Society of Hong Kong (Secretary for Justice, intervening) (December 2003) and contends that the Appeal Committee’s determination was per incuriam and that the Appeal Committee failed to seize the opportunity presented by the application to further describe the court’s power of final adjudication.

On the subject of a bank’s responsibility for the misconduct of the debtor in inducing the surety to give a guarantee or mortgage, the landmark House of Lords decisions in Barclays Bank v O’Brien and Royal Bank of Scotland v Etridge (No 2) have radically altered the law, and put in place a complex and controversial framework of principles and rules. This article examines the recent Hong Kong cases and the extent to which these principles have been discussed and applied in the Hong Kong courts, and considers some of the difficult issues to which the application of these principles gives rise.

The constitutional guarantee of a free press has been almost taken for granted by all in Hong Kong. In safeguarding press freedom, the protection of journalistic sources is of particular importance to ensure that the press can properly perform its role as society’s watchdog. However, in So Wing Keung v Sing Tao Limited and Hsu Hiu Yee, the Hong Kong Court of Appeal has taken quite a different view on the matter. This could have a long-term impact on the development of press freedom and the use of journalistic material in Hong Kong. This article seeks to look at the subtle, but significant change in the landscape on press freedom resulting from the Court’s decision.

The extent to which the press is allowed to intrude into and report on certain aspects of an individual’s private life was recently considered by the House of Lords in England in the case of Campbell v MGN Limited. In carefully balancing the fundamental values of privacy and the journalist’s right to freedom of expression, the House ruled (by a three to two majority) that the scales were tipped in favour of protecting the privacy of the claimant. In reviewing the Campbell decision, the authors examine and question the approach taken by the English courts towards protecting the informational privacy of individuals through modern extensions and interpretations of the action for breach of confidence. The authors further query whether the courts have truly appreciated the place and value of privacy in English law, particularly in respect of other forms of privacy intrusions beyond the mere violation of informational autonomy.

While constitutional conventions were relatively insignificant in Hong Kong under British rule, they are shaping the post-colonial political system. Some relatively old practices have continued to be adopted by political actors since the retrocession. A few practices have been revised. It remains to be seen whether these practices will develop into conventions. The Rosanna Wong resignation served as a precedent that had the potential to become a convention. The car scandal of Antony Leung shows that neither the Chief Executive nor Beijing was initially prepared to accept ministerial resignation. However, the debacle over Article 23 of the Basic Law and the mass protests of 1 July 2003 constituted a political earthquake necessitating political transformations. The Chief Executive and Beijing had to accept Leung’s and Regina Ip’s resignations. Leung’s resignation was a turning point in the development of the constitutional convention of ministerial resignation. It followed the precedent of Rosanna Wong and demonstrated the principal official’s belief that resignation was morally obligatory and constitutionally justifiable. Public criticisms of Yeoh Eng-kiong’s handling of the Severe Acute Respiratory Syndrome (SARS) became a critical factor leading to his eventual resignation, thus entrenching the convention of ministerial resignation in the Hong Kong Special Administrative Region (HKSAR). While the impact of the resignation of Lam Woon-kwong on the development of practice remains to be observed, the resignation of Chief Executive Tung Chee-hwa has perhaps revealed a number of important practices with regard to the relationship between the HKSAR and the central government in Beijing.

In other developed jurisdictions, tax on income from employment is typically collected by means of PAYE (Pay-As-You-Earn). That is, the employer is required to withhold tax from payments to the employee, remit it to the Hong Kong Government, and pay to the employee only the balance. In Hong Kong, however, there is no PAYE. Rather, persons liable to tax on income from employment are obliged to discharge the liability directly themselves. At various times since 1940, when taxes on income were first introduced in Hong Kong, the possibility has been raised of establishing some form of PAYE in the territory. Most recently, discussion of this topic has been prompted by the financial difficulties encountered by the Government in recent years and by the revelation that significant amounts of revenue have been lost as a result of persons liable for tax leaving the jurisdiction without paying. This article examines both the problems posed by the current system and the possibility of reform. It concludes that some tightening of the current system might be desirable but that it would be premature and undesirable, at this juncture, to introduce PAYE in Hong Kong.

When divorce and bankruptcy collide, legal uncertainties arise. By means of three hypothetical scenarios, this article will analyze three major controversial areas: (1) the provability in bankruptcy proceedings of unsatisfied lump sums and periodical payments ordered by the Family Court; (2) the time at which the interest in real property passess under a Family Court's transfer order; and (3) the release upon the discharge of the bankrupt of the "debt" created by, or as a result of, the Family Court's order. Unfortunately, the answers provided by the case and statute law in Hong Kong to these difficult questions are by no means certain. Suggestions are proposed as to the possible solutions.

The review by the United Nations of China’s initial report under the International Covenant on Economic, Social and Cultural Rights in April 2005 will put the PRC in the human rights spotlight. This makes it timely to look back at China’s reporting under human rights treaties over the last 20 years. This article focuses on China’s procedural and de jure compliance with human rights treaties, including the question of the status of international human rights law in the domestic legal order. Through this lens, the article seeks to elucidate China’s view of its domestic and international obligations under international human rights law. The author argues that the Chinese government essentially views these obligations as a matter of foreign affairs, and seeks to insulate the domestic arena from the reach of international human rights law, both in symbolic and practical terms.

The Chinese authorities must urgently master the challenges in the banking industry arising from China’s World Trade Organization (WTO) obligations. These require the lifting, by December 2006, of all major restrictions on the participation of foreign banks in its financial sector. But considering that the problems of Chinese banks are more deeply rooted in Chinese history and tradition than they look, the Chinese authorities may continue their strategy of market intervention, and of attaching strings to the opening of the market to foreign bankers. When the overseas listing plan of Chinese banks materializes, it is very likely that many foreign banks may want to have a slice of those banking shares. But even after foreign banks become the major shareholders of China’s big four banks, the Chinese authorities may not want to let go of its control over the domestic banks. Given its ineffectual central bank, its highly fragile banking system, and the lack of an effective regulatory framework for its non-bank financial institution, a financial crisis is looming. And about the time when the bomb starts to tick, it will be too late for foreign banks to fix the problems or to exit without suffering substantial damage.

Medical decisions matter most when they concern the life and death of an individual patient. This is where disagreements between doctors, patients and patient’s family are likely to come before the court. These issues are often deeply personal in nature, yet they also go beyond the personal to familial, societal, moral, ethical, legal and human rights concerns. This paper highlights some of the controversial recent English cases addressing the principle of sanctity of life versus autonomy, the right to life verse the right to die in three groups of individual: children, competent and vulnerable adults. It concludes that society and the law will continue to struggle with these problems, probably in greater intensity as advances in medical science and technology push its frontier.

In this article, originally delivered as the Peter Allan Memorial Lecture in Public Law, the author, the President of the Supreme Court of Israel, reflects on the role of a Supreme Court in a constitutional democracy, in particular, in a democracy that is under the constant threat of terrorism. The author argues that the role of a Supreme Court in upholding legal principles and the rule of law cannot be compromised in deciding difficult cases, even in the face of a constant terrorist threat, however much such decisions may prove unpopular with the government, and however much such decisions may be perceived as hindering the fight against terrorism.

In a previous article in this series, a number of challenges faced by litigants in person were identified. This article examines one such challenge, namely the difficulties that a successful litigant in person may encounter in trying to recover costs from the losing party. The article will look at the process of costs recovery, explore the history of the existing rules, identify inconsistencies in their interpretation and suggest ways in which the rules may be altered to provide a more streamlined mechanism in keeping with the underlying objectives of Hong Kong’s civil justice reform.

This article examines the law governing the tax consequences of withdrawals of trading stock, and the difference in approach between the House of Lords and the Hong Kong Court of First Instance. The author proposes a middle ground, according to which a trader who takes an item of trading stock for her own use should be taxed as if she had never acquired the item at all (in accordance with Hong Kong authority), so long as she can satisfy two evidential requirements. Specifically she must demonstrate (1) precisely what her financial position would have been if she had never acquired the item and (2) that this alternative method of calculating her liability would not permit her to extract profits from her business without paying tax on them. If she cannot satisfy these two requirements, she should be taxed as if she had sold the item at market value (in accordance with House of Lords authority). This solution, it is argued, is more protective of the Revenue than current Hong Kong authority, and more equitable in its treatment of taxpayers than current English law.

This article considers jurisdictional issues arising when a local resident’s intellectual property rights are infringed by Internet contents uploaded overseas. It considers the implications of the double actionability rule in such cases, and questions the view that local courts do not have jurisdiction to enforce foreign intellectual property rights. The article outlines the jurisdictional rules relating to Order 11 of the Rules of the High Court, discusses the application of the rules to cases involving IP rights and explores how the borderless nature of the Internet impacts on the application.

This article examines the doctrine of forum non conveniens as applied in Hong Kong, Australia, the US and Sweden, and considers the criticism that has been raised against the doctrine. The author argues that some of this criticism is valid, some of it is valid only in relation to some countries’ application of the doctrine, and some of the criticism is unfounded. The author concludes that the test applied in Hong Kong and most other common law jurisdictions – the clearly or distinctly more appropriate forum test – is the better option. The author goes on to make a number of other recommendations regarding the application of the doctrine, including the suggestion that the doctrine would benefit from being implemented in legislation.

This article first sets out the current law to determine the source of profits for the purposes of Hong Kong profits tax. It then examines, by reference to both case law and Inland Revenue Department practice, the pressing areas of dispute and concludes that the source/residence dichotomy may be somewhat illusory. Should these critical issues be left to develop on a case-by-case basis? If not, how should they be dealt with – by legislative fiat or by a clear statement of departmental practice? This article goes on to analyse these questions and concludes that, although the general principles for determining source of profits developed by the Courts are clear, the problems of mapping them to existing departmental practice and then applying them to common forms of cross-border transactions are real, militate against certainty of taxation treatment, and should no longer be ignored.

The topic of this paper is the prohibition of entry of persons with infectious diseases in the countries of East and Southeast Asia. The paper examines legislative and regulatory mechanisms in Asia to bar would-be immigrants from entry if it is found or suspected that they carry infectious diseases such as tuberculosis, cholera, HIV, et cetera. Further, the paper outlines the characteristics and transmission of these diseases, recent outbreaks, as well as international health regulations that address the issues of entry prohibitions and quarantine. The paper concludes by arguing that immigration restrictions are rarely, if ever, successful in preventing and suppressing the spread of infectious diseases; it proposes international cooperation and behavioural change as more appropriate tools to contain such diseases.

This article adopts an historical approach to examine China’s dynastic commercial development and regulatory environment and their implications for modern commercial law. Firstly it reviews dynastic commercial developments and examines factors contributing to the traditional commercial culture such as the State’s role in commercial regulation, the influence of the agrarian society in commercial development and the impact of orthodox ideology on business practices. Secondly, it discusses guild rules that constituted a self-regulatory regime in an environment in which commercial law was virtually non-existent. It then reviews the development of commerce and business enterprises in the late Qing dynasty which featured the “Self-Strengthening Movement”. Finally, it analyses the first Chinese Company Law and the historical implications of commercial and regulatory developments in dynastic China. It concludes that many problems in today’s Chinese business and companies all have deep roots in history.

In this paper the author critiques the recent decision of the Hong Kong High Court in Leung v Secretary for Justice (2005), in which four provisions regulating particular forms of sexual conduct (including, most famously, the act of “buggery”) were struck down as being in violation of the applicant's constitutional equality and privacy rights as a homosexual man. In the author's view, it is unfortunate that the Court opted to employ an equality analysis in declaring one of the four provisions (section 118C of the Crimes Ordinance) to be unconstitutional when the constitutional right to privacy alone would have sufficed. This is so as the nature of the equality analysis that was used in regard to this section (which prohibited buggery for both same-sex and heterosexual couples) served to implicitly endorse the view that homosexual individuals (men in particular) are abnormally preoccupied with sexual relations such that legislative restrictions on buggery represented an intolerable and unconstitutional attack on their identity as gay men. The judicial promotion of such a “hypersexualised” stereotype serves to impede rather than enhance the full and equal participation of homosexual persons in society. Though some might object to the application of privacy rights in such contexts, these objections ought to be discounted on the basis that they tend to be based on an outmoded conception of the right to privacy. It is hoped that these considerations will be taken into account by the Court of Appeal in its forthcoming review of the Leung decision.

This article examines the feasibility of multi-lateral recognition of PKI certification authorities in the Asia region. It begins with a review of PKI technologies and the role of certification authorities. In the following sections, the notion of legal harmonisation of PKI certification authorities and issues in transborder data flow are explored by way of comparative analysis of Hong Kong, the PRC and Singapore. This examination compares and contrasts the legal recognition of PKI certification authorities in the relevant legislation as well as legislation relating to privacy, that is, the protection of personal data. It is argued throughout that any notion of multi-lateral legal recognition of PKI certification authorities should only be considered where a certain threshold has been met to harmonise the legal principles of PKI legislation, and where there is sufficient protection of personal data (privacy).

For minority shareholders, in particular those of small private companies, who suffer because the affairs of the company has been conducted in a manner that is unfairly prejudicial to their interests, the availability of a buyout order is an important remedy. Unfortunately, an application for a buyout order is usually very expensive and the process can take a very long time, and it is therefore equally important for the minority shareholders and their advisors to be able, before a Petition is even filed, to ascertain the likely results of the application, both in terms of whether an order will be granted and the valuation therefore. This artcile analyses the principles involved from decided cases.

The present system of land registration in Hong Kong is a deeds registration system governed by the Land Registration Ordinance, which provides a record of the instruments affecting a particular property, but gives no guarantee of title. In order to establish title, it is necessary to check the title documents relating to all the transactions affecting the property that extend to not less than 15 years before entering into a new transaction. There has long been a desire to convert to a land title registration system, and on 7 July 2004, the Land Titles Ordinance was enacted to provide greater security to property interests and simplify conveyancing procedures. This paper seeks to explore the major issues and controversies of the development of the Land Titles Ordinance, in an attempt to understand the effects of the new system, and to determine whether the reform achieves the aims it sought to achieve.

An often overlooked feature of the Employees' Compensation Ordinance is that an employee who meets the basic requirements for a claim can nonetheless be denied compensation under certain provisions of the Ordinance, if his misconduct or his contribution to the injury is viewed as sufficiently serious. These provisions are rarely resorted to, but their potential should not be underestimated. Moreover, these provisions overlap with each other, and contain certain internal contradictions. They also overlap with and to some degree contradict certain of the provisions establishing the basic qualifying conditions for compensation. This article will explore recent and historical case law in which these provisions have been interpreted and applied, and will consider the extent and effect of the overlap between them and the extent to which they overlap with and contradict the basic qualifying conditions. Some simple suggestions for reform will be proposed.

This paper addresses the controversial claim of wrongful life - a claim brought in negligence by a disabled neonate against a medical professional. This paper will contend that wrongful life claims should be a cognizable cause of action in certain cases, and in such cases can be substantiated according to the traditional elements of the negligence action in common law tort: duty, breach, causation and damage. This paper will also contend that it is public policy concerns which provide the most significant hurdle to successful wrongful life litigation, rather than any perceived difficulties associated with causation or actionable damage.

This paper examines some recent steps taken in mainland China towards providing a better system of justice for criminal defendants and considers how effective these reforms are in practical terms. Many of the reforms contained in the Criminal Procedure Law of 1996 were intended to introduce aspects of the adversarial system of justice to the prevailing system. However, the safeguards introduced often lack the necessary guarantees to ensure compliance. To demonstrate the need for mainland China to adopt further reforms, the author compares aspects of the criminal justice system in mainland China with that of the common law jurisdictions of Hong Kong, the United Kingdom, and Australia (Victoria), in four key areas: (1) the collection and admissibility of illegally obtained evidence; (2) the duty of disclosure placed on the prosecution and the defendant's right to all material evidence; (3) the defendant's right to competent and adequate legal advice and representation and (4) the presumption of innocence.

After its “revitalization” after the Cultural Revolution, China's people's mediation system declined throughout the 1990s. However, a “second revitalisation” that began in 2002 has quite successfully reversed this trend. This article discusses this reform effort in four parts. Part I explores the reasons for the 1990s decline of people's mediation in urban China and the government's interest in strengthening this institution. Policy reforms at the national level - particularly the issuance of the “Three Documents” - are analysed in Part II. Part III describes the basic unit in the urban people's mediation web, the community PMC, and then details the web's “vertical expansion” and “horizontal expansion,” including new forms of cooperation with the police and courts. The paper concludes with Part IV, which discusses the new “legalised” nature of urban people's mediation and evaluates the significance of the reforms described above.