Hong Kong Law Journal 1971 - 2024

Harold Hsiao-Wo Lee Professor Philip St John Smart was a great scholar and leading authority in Hong Kong as well as overseas jurisdictions on conflict of laws. My privilege and honour to teach courses and do research together with him started from the very beginning when I joined the University of Hong Kong in 1997. His tireless research, intellectual power and sagacious scholarship have not only inspired me, but also made a great contribution to, inter alia, the development of law and legal education in Hong Kong, particularly on the cross-border legal relations between mainland China and Hong Kong. On 16 June 2008 as our normal exchange of information and ideas he sent me a newly decided case as “the first Hong Kong case on cross border divorce (concerning mainland China)” with a brief comment by e-mail while I was in a trip in Chicago. After some e-mail exchange on 17 June at 11:15 am (Hong Kong time), just a few hours before his unexpected departure, we agreed to arrange a time to discuss the case after I went back to Hong Kong. Although the appointment now can never be kept, my intellectual dialogue with Professor Smart will continue in the future. Professor Smart and I co-authored an article right after the conclusion of the ground-breaking Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and Hong Kong SAR Pursuant to the Parties’ Choice of Court Agreements (“The Enforcement Arrangement”). The purpose of this article is to pay my sincere tribute to Professor Smart by way of reflecting some recent developments on the regional conflict of laws as his research focus did in the past decade.

It is with great trepidation that I publish this joint paper with Philip. The paper was written for a workshop at our faculty in 1998; neither author considered it significant enough to deserve posterity in published form. Sadly, Philip’s sudden and untimely death has provided a reason for publishing it, if only to provide another window to the mind of a genuine scholar and analytical writer one finds in him. To preserve the integrity of the paper, it is published in its original form, with an update in the Epilogue.

The authors discuss a corporate governance crisis in Hong Kong involving the investigation of insolvent companies. Over the last decade the rates paid to insolvency practitioners to handle “summary cases” in liquidation has been steeply declining. At the current rate of HK$2,558 per case, it is not possible to undertake a proper investigation of the insolvent company. To address this problem, the authors propose that the government consider establishing a special investigations unit.

The author would like to dedicate this article to the late Professor Philip St. John Smart, in acknowledgement of his role in leading her to insolvency law research and inspiring her with his wealth of knowledge. At the request of the HKU Law Faculty, Professor Smart applied for and helped secure the funding to create the author’s position as a Research Assistant Professor in Insolvency Law. This article constitutes the first part of a joint research project provisionally entitled “A Comparative Study of the Remunerations of Liquidators in Hong Kong and Bankruptcy Administrators in Taiwan”, which was planned originally to be engaged and co-authored by Professor Smart and the author.

The Official Receiver of Hong Kong operates two schemes known commonly as the Panel A and Panel T Schemes for the purposes of contracting-out its workload. There was a Panel B Scheme but it has now ceased to operate. It is expected, as a result of the economic impact of the current global financial crisis, that the number of court winding-up cases will continue to rise, and therefore it is imperative to streamline the practices of private-sector provisional liquidators and liquidators and the payment schemes under which they are paid. This article first identifies the different circumstances that call for the appointment of private insolvency practitioners to act as liquidators under the Panel A Scheme, and as provisional liquidators and / or liquidators under the Panel T Scheme. Then, this article will examine whether the percentage basis or the time-cost basis shall be used as the default to determine their fees and remuneration. Finally, the shortfall met out by the government subsidy is available currently for the Panel T Scheme only, not the Panel A Scheme. Whether such subsidy should be removed by cross-subsidising Panel A and Panel T Scheme cases or whether a “cab rank” system should be introduced will also be examined.

The systemic phase of the current global financial crisis was triggered by the failure of large complex global financial conglomerates. In this context, as recognised by the Group of 20, one of the greatest failures of both international and domestic legal and regulatory systems has been the lack of appropriate arrangements, including adequate insolvency arrangements, to address such failures when they occur. Following a discussion of the difficulties of dealing with the failure of large complex global financial conglomerates, the article discusses advocates a framework based upon prevention of failure as the first element and mechanisms to address failure when they occur as the second framework. The article concludes that while it may be possible to develop adequate international arrangements relating to prevention, there is still insufficient consensus in respect of actual insolvency arrangements for any international framework to emerge at present.

In the last ten years, the common law rule in Foss v Harbottle concerning when a disgruntled shareholder could bring a “derivative” action on behalf of the company has been put on a statutory basis in many jurisdictions, including Hong Kong. This article examines the most recent interpretations of the statutory remedy, the continuation of an inherent jurisdiction under which a shareholder may still sue, and the decision on the Hong Kong Court of Final Appeal in Waddington v Playmates which has defined the situations in which a “multiple derivative action” may be brought. The spate of academic writing and case-law on the topic indicates its continuing importance. Indeed, as shareholder activism takes hold more generally, one may predict that the importance of the statutory derivative action will continue to increase.

Tang Siu-pun ( 鄧紹斌或斌仔), also known as Ah Bun, wrote to the Hong Kong Legislative Council on 15 March 2004 to request euthanasia ( 安樂死). His campaign for euthanasia alerted Hong Kong society to his plight and raised awareness of the issues relating to the “right to die”. This article explains Ah Bun’s request in legal terms, illustrating the differences — controversial as they may be — between the right of a competent patient to have one’s ventilator (or other form of life support) removed, as opposed to euthanasia or assisted suicide. Both assisted suicide and euthanasia are currently illegal and raise many difficult moral and social questions. However, the law recognises, by way of the application of a general legal principle, a more limited right of a competent patient to have a life support machine switched off, even if this would inevitably accelerate, or lead to, death.

Hong Kong is rewriting its Companies Ordinances to enhance its competitiveness as an international business and financial centre and one of the provisions being reviewed is whether financial reporting standards in Hong Kong should be given legal backing. Contrary to the initial consultation recommendation and subsequent consultation responses, this article presents arguments that it is in the best interest of investors that the Hong Kong financial reporting standards be given statutory backing so that the quality of the reported financial statements can be assured. The “true and fair override” provision does not provide adequate investor protection in Hong Kong where the division of the oversight responsibility for financial reporting irregularities is divided between a self-regulatory professional body HKICPA and a partially independent statutory body FRC.

The Court of Appeal in Secretary of Justice v Ocean Technology has unfortunately cast a pall over the future of collateral challenges in Hong Kong criminal proceedings, contrary to the current trends and development of the English common law. It has conflated the criminal plea of a general defence with the constituent elements of a statutory offence; it has failed to consider a key CFA decision in Leung Kwok Hung and has misconstrued House of Lords precedents by examining whether the impugned statute authorised a collateral attack when it was the validity of the statute itself that was being challenged.

Sovereign Wealth Funds (SWFs) possess unlimited potential for public wealth creation, but there ought to be some scepticism about state investment activities in the absence of proper regulation. Massive state capital flows could be used as a disguised form of aggressive foreign policy or a destabilising weapon for political rather than financial ends. The “Santiago Principles” (a recent transnational attempt to produce voluntary regulation of such activity) merely reiterate the wanting status quo. If the investment constraints practiced by the new Chinese Investment Corporation (CIC) were adopted as the regulatory model instead, the regime would be far more effective. In this article, the author presents a brief overview of SWF trends, highlighting the growing distinction between capitalism and democracy with the international resurgence of authoritarian-capitalism. Next, the CIC is presented as an example of the possibilities and dangers of state projections of economic power into private markets, including a selection of the Santiago Principles being examined in the context of the CIC’s activities. Finally, three cardinal principles of SWF investing extracted from CIC practice will be offered which should underlie a binding international regime.

The House of Lords in The Indian Grace (No 2), in the speech of Lord Steyn, sought to clarify the true nature of the admiralty action in rem. It did not, however, succeed in doing so. In what has been called a “volcanic disturbance”, it was held, in effect, that the right to proceed in rem does not extend beyond cases involving maritime liens and that the true defendants in such an action are the owners of the ship. The decision is not supportable in either respect, having regard to authority. Accordingly, it should not be followed.

Company promoters play an indispensable role in the formation of a company. With companies as a form of business vehicle becoming increasingly popular in China, a law which clearly delineates the rights and legal obligations of promoters is much needed. The Chinese Company Law (CCL) is the major law regulating the legal position of promoters with regard to incorporation activities in China. However, despite its substantial revision in 2005, the CCLs provisions on promoters are still unsatisfactory. In particular, the CCL focuses largely on the capital contribution aspect of promoters, but has laid down few guidelines on other prominent issues such as the secret profit of promoters and their liability regarding pre-incorporation contracts. By adopting a comparative approach, this paper examines the CCLs framework that governs company promoters and suggests how it can be reformed to better prevent fraud and achieve justice.

This comment reflects on the Hong Kong government’s announcement that it plans to reform its “torture screening” mechanism and provide a statutory framework for the consideration of claims under Article 3 of the Convention against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (Torture Convention). I argue that the new mechanism should go beyond the requirements of the Torture Convention and also examine claims for protection from non-refoulement (non-return) based on other standards in customary international law and the International Covenant on Civil and Political Rights (ICCPR).

The House of Lords in The Indian Grace (No 2), in the speech of Lord Steyn,sought to clarify the true nature of the admiralty action in rem. It did not,however, succeed in doing so. In what has been called a “volcanic disturbance”, it was held, in effect, that the right to proceed in rem does not extend beyond cases involving maritime liens and that the true defendants in such an action are the owners of the ship. The decision is not supportable in either respect, having regard to authority. Accordingly, it should not be followed.

The Air Pollution Control (Amendment) Ordinance 2008 was passed in July 2008. This ordinance establishes an emissions trading scheme to facilitate pollution reduction by the two electricity generation companies operating in Hong Kong. This article analyses the features of this scheme from a legal and regulatory perspective, and advances three claims. First, the regulatory authority plays a significant coordination and oversight role, which may be necessary to steer the market and to ensure the environmental integrity of the scheme. This underscores the need to be cautious of claims of the cost-effectiveness and administrative ease of emissions trading, particularly in the context of trading across jurisdictions which differ in environmental quality, laws and enforcement. Secondly, the environmental effectiveness of the emissions trading scheme is questionable given the size of the market. Finally, this article draws parallels between the Hong Kong scheme and the Kyoto Protocol’s Clean Development Mechanism and argues that an independent regulatory body is essential to guarantee due process and environmental integrity.

On 20 October 2008 CITIC Pacific Limited, a constituent stock of the Hang Seng Index, issued a profit warning to announce that it had losses of approximately HK$15.5 billion on leveraged foreign exchange contracts. This quantum represented some 80 per cent of its aggregate after tax profit for the preceding two financial years and caused a 55 per cent slump in its share price by the close of trading on 21 October following its one-day suspension. In addition, the losses necessitated the issue of a US$1.5 billion convertible bond to CITIC Group in Beijing which on conversion increased its shareholding to a 57.6 per cent majority interest in CITIC Pacific. In the opinion of the author this case highlights a gap in the regulatory framework in Hong Kong with some anomalous outcomes likely. In a nutshell, while the company and its directors may be censured for their breach of the Listing Rules, there remains a distinct possibility that they may escape liability under the Securities and Futures Ordinance. This article contends that the rectification of such anomalies requires the introduction of statutory backing to the Listing Rules which was first discussed by the government in 2003.

Recently, Anselmo Reyes J in the Court of First Instance handed down two decisions on trademarks registration. In the first, Re Naked, his Lordship allowed the applicant to register the word “Naked” as a trade mark for condoms whilst in the second, Re Alldressedup, the learned judge denied an application to register “alldressedup” as a trade mark for jewellery, articles made from animal skins and clothing. This Comment seeks to argue that the approaches taken by Reyes J in the two cases vis-à-vis the registrability of trademarks are inconsistent with each other. It is also this author’s submission that Re Naked was correctly decided whilst the second applicant’s “alldressedup” mark was wrongly denied registration for the class of goods relating to jewellery and articles made from animal skins and was correctly rejected for the class on clothing.

This article argues that some of the existing procedural requirements in traditional judicial review proceedings will have to be modified in light of the increasing number of challenges against constitutionality of legislation. It also argues for a more flexible approach to the granting of declaratory relief and damages in judicial review, and while it advocates in favour of a power to grant a stay of a declaration of unconstitutionality of legislation, it queries whether such an approach has been adopted in practice.

The Hong Kong Equal Opportunities Commission (“EOC”) was set up to perform the important function of an independent body which would receive and investigate complaints of discrimination within the community and to help Hong Kong strive to become a society in which discrimination on grounds such as sex, disability, family status, and race would not be tolerated. Despite the broad powers of inquiry and investigation given to the EOC to enable it to effectively perform this critical role, its inherent limitations have resulted in the limited impact the EOC has had on the implementation of anti-discrimination laws in Hong Kong. This article discusses some of these inherent limitations and outlines the structural and substantive issues that have plagued the EOC in recent years.

In view of these matters, it is argued that without an immediate change in the institutional design, membership and culture of the EOC, it is unlikely that the EOC will have any significant impact in the years to come. The article concludes with some suggestions on the changes that need to be put into place to help the EOC be born anew so that it can lead Hong Kong closer to substantive outcomes in anti-discrimination law and policy.

One of the key concepts of the contemporary international legal order is that of the responsibility to protect human rights. This concept involves the responsibility to prevent violations of human rights, to react to violations, and to help rebuild societies that have experienced gross violations of human rights. However, this concept has so far been discussed mainly in relation to its international dimensions and there has been little articulation of the content of the national responsibility to protect human rights. This article is one of the first to explain what the national responsibility to protect entails. It argues that the national responsibility to protect requires that each government show that it has in place a national protection system with six dimensions: a constitutional order that faithfully reflects international human rights law, legislation that gives effect to international legal obligations, courts that are able to draw upon international human rights law, national protecting institutions such as a national commission on human rights, preventive arrangements to head off potential conflicts, and arrangements to teach human rights in schools and universities. The article discusses the relevant caselaw and practice on these and related issues and on the importance of the role of the courts under the rule of law, as well as of judicial remedies for violations of human rights.

The global expansion of intellectual property (IP) underpinned by the Lockean theory of intellectual property is widely seen as a threat to continuous innovation and the public interest in using knowledge. This paper argues that Lockean theory, while being a very suitable explanation of some other rights, is inherently incompatible with the rights associated with knowledge creativity and dissemination. This paper then examines the unique history of misapplication of Lockean theory in the IP field by publishing monopolists in 17th and 18th century England, which so far has fundamentally influenced our modern understanding of how intellectual property should be.

Riparian States share common interests in the use and conservation of international watercourses, which, by virtue of their ecological unity, give rise to a community of interests. As shared natural resources, their use involves transboundary cooperation. In practice, to exercise a community of interests States need to take collective actions aimed at an equitable and reasonable utilisation of an international watercourse. Riparian States from different regions of the world attempt in various ways to achieve that goal and ultimately exercise a community of interests. This article compares in particular the Amazon and Mekong River basins. This comparison shows that the Mekong States have worked more effectively towards an equitable and reasonable utilisation of shared water resources, especially by creating the Mekong River Commission and other organs.

The recent Hong Kong decisions of Rowse and Lam Siu Po have struck down as illegal certain longstanding policy provisions and black letter laws which effectively denied public servants any real right to be legally represented in civil service disciplinary proceedings. As a consequence of these decisions, Hong Kong public sector employment law is in need of reform, in order to ensure the necessary procedural fairness found lacking in those decisions. In such an exercise Australian law may provide some lessons. Recent Australian decisions and statutory law aims to facilitate a public sector system of employment which is both flexible for the government (and recognises its unique character) and also fair to employees. While these new laws, themselves, have shortcomings, they may nonetheless be seen as a baseline standard of fairness, especially since Australia does not have a Bill of Rights. In addition to that comparative analysis, this article considers criticisms, in both Hong Kong and Australian case law, of civil service investigative processes and how they can be improved.

The rule against bias is one of the two pillars of natural justice. The hearing rule governs the procedural features of decision making. The bias rule governs the attitude or state of mind of the decision maker. This article examines the foundation of the bias rule and the fiction of the “fair minded and informed observer” by whose conclusions claims of bias are determined. The article considers whether the objective test that supposedly underpins the notion of the fair minded and informed observer does little more than provide a cloak for the subjective views of the judges who apply that doctrine.

China’s ancient tax system, primarily built on land tax, suited its huge agrarian economic basis, which remained little changed for several thousand years. A variety of other taxes and revenue-like sources including the monopoly of salt and iron and compulsory labour duties were imposed as supplements to formal taxation. Informal taxation existed along with the development of formal taxation because formal tax revenues often could not meet government needs particularly at local levels. An advanced “provincial and prefectural” political regime evolved, from the time of the Qin Dynasty, to enable emperors or rulers to control the large territory. Tax administration was managed by the powerful bureaucratic government which effectively controlled nearly all aspects of state power. Yet taxation appears to have had little or no effect on shaping China’s constitutional polity. Given the linkage between taxation and political-legal development in Western countries, this article examines the reason why, during the long period of China’s political-legal transition, taxation failed to play a similar role in helping create a more developed constitutional polity.

Arbitration makes sense only when the award can be enforced satisfactorily. With the development of the Chinese economy, arbitration is becoming popular in China. Despite the progress and achievements China has made, the award enforcement regime under Chinese arbitration law is seriously defective due chiefly to the out-dated “dual-track system”, unsatisfactory enforcement of the New York Convention awards and prohibition of ad hoc arbitration. These measures make Chinese arbitration law increasingly discriminatory against domestic arbitration and lower courts, and consequently hurt the competitiveness of Chinese arbitration. To ensure the healthy development of Chinese arbitration, mere amendment of legislation is not enough; rather, a full-range judicial reform is needed.

This article analyses the depiction of judges and lawyers in some of Shanghai’s most famous movies of the 1930s and 1940s. During that golden age for early Chinese cinema, scenes in courts and lawyers’ offices often appeared in movie plots, despite the relative newness of a modern legal profession. Thus, in Street Angel we see a mercenary lawyer dismiss two worthy but penniless clients – but Bright Day and Long Live the Missus show us versions of the model lawyer that might resonate now. Indeed, though all these movies were very much the products of their time and place (and the views of their writers and directors), their broader themes – access to justice and the use of law by ordinary people – remain of great importance in China’s legal system today.

The 2007 PRC Property Rights Law has clarified certain property relationships and consolidated the regime of ownership and property rights in place in China since the 1980s. In this article I argue, using two exemplary sets of statutory provisions, that despite these achievements, the rules and principles of the Property Rights Law are rhetorically over-protective of property rights in the private sphere, and under-protective regarding government expropriations. This is the result of contradictory historical developments that shaped the current law. As a further result, current property law fails to articulate adequate standards for the resolution of property related disputes, and supports a style of dispute resolution heavily reliant on legally unconstrained State power. In conclusion I argue, however, that because the new law is more than just an authoritatively enacted text, the future of Chinese property law cannot be defined by this text’s flaws. Its important symbolic function in citizen activism adds another dimension of significance to the new law as an image of PRC history.

This essay argues that China’s economic growth over the past thirty years without a robust property rights regime should make social scientists rethink the conventional wisdom about the economic role of property rights. Western theory has emphasised the need for legally defined and judicially enforced property rights for economic growth, but China’s record confirms earlier experience in the West that property rights are not necessary to growth and indeed can inhibit it. This essay describes briefly how China has dealt with property rights in the areas of township and village enterprises, land requisitioning, and informal real estate transactions. It speculates that property rights theorists have not integrated the Chinese experience into the development theory because of the need for development institutions to think on a global, not local scale, and the recent tendency to conceive the rule of law as a technical rather than a political instrument. It does not deny that property rights can play an important role in development, but concludes that, that role may be more political than economic.

Economic growth and industrial restructuring over 30 years of reform and development since 1979 have led to large-scale relocation of heavy-polluting enterprises out of the cities, leaving contaminated sites for urban redevelopment. Using the Beijing experience as a case study, this article investigates the environmental problem of land contamination in urban China and evaluates local initiatives and national administrative responses. It examines the gap in Chinese Environmental Law and reveals the urgency for a national cleanup legal regime. Based on local programmes and national measures, and with reference to foreign legislative experience, key legal issues are addressed in developing a national cleanup law.

Western-oriented investigations into China’s law and legal system invariably presume that its many regulatory problems are problems of a regulatory laggard – that they are problems that stem from China’s failure to as yet construct a mature legal system, such as those found in the advanced industrial countries of the so-called “West” (particularly that of the United States of America). In this essay, I wish to suggest that this is not necessarily the case. China may actually, in many aspects, be operating at the very forefront of the regulatory horizon, compelled by its location in a distinctly post-Fordist Asian economic world to confront regulatory problems that are just beginning to seep into the more “Fordist” West. Many of China’s regulatory problems, in other words, may often be those of a regulatory pioneer, not those of a regulatory laggard.

This paper examines the challenge of co-ordinating norms of corporate social responsibility with practices of corporate governance. While corporate social responsibility (CSR) involves primarily issues of relations between business firms and the outside community, corporate governance is largely an internal matter. And while CSR concerns challenges of justice (social, economic, environmental, etc) for those who are affected by business behaviour, corporate governance generally addresses issues of efficiency in business management. Including CSR norms in the processes for strengthening corporate governance faces challenges similar to those facing the problem of co-ordinating compliance with international trade and human rights standards. These difficulties stem in part from conceptual differences and assumed tradeoffs between regimes of efficiency and justice, as well as from general lack of communication and collabouration between specialists involved in these different sectors. Drawing on the author’s paradigms of Selective Adaptation and Institutional Capacity, this paper will examine the normative and organisational challenges to co-ordinating CSR norms with corporate governance practices in China.

The amendments to the Securities Law of China solved many issues that had not been addressed in the old version. The Supreme People’s Court rules on securities fraud litigation further added life and meaning to enforcement against securities misconduct. However, problems remain as to the lack of private lawsuit remedy for investors who suffer losses arising from insider trading and market manipulation, the controversial requirement of a prior administrative or criminal ruling and difficulties in pursuing a class action against fraudulent disclosure. In contrast, the US securities fraud litigation is very dynamic yet rife with injustice and misallocation of incentives and liabilities. It has been showed that these troubles in the US system, rooted in the openness of issuers to suits, is probably the exact scenario sought to be avoided in China where the issuers of securities are still largely controlled by the state and the government is concerned about the social chaos that might accompany a wave of collective private lawsuits. After reviewing the experiments in Germany and Taiwan, this essay proposes to further coordinate the efforts of public and private securities enforcement and suggests that the “reform and opening up” policy should be further strengthened to encourage greater private participation in domestic markets.

The world economy has recently been affected by one of the worst global recessions in living memory. Originating with irresponsible lending practices by banks engaged in the United States of America (USA) sub-prime mortgage market, the crisis soon started affecting other businesses which were no longer able to rely on banks for cash flow and loans. In response, governments across the globe initiated various policy measures, most commonly involving increased public borrowing and spending. While an overall verdict on these measures is still outstanding, it is possible to reflect on the role which competition law might play in times of economic crisis. One of the responses to the crisis has been for governments to ease the burdens of complying with competition law but as this study will show, that may not be a desirable policy response to recessionary circumstances and may even have the opposite effect.

The influence of international law, in particular international treaties, on the Chinese legal order has been the subject of many studies published in English that focus on the period prior to the early 1990s. This article investigates the relationship between Chinese law and international treaties, particularly focussing on how this area has developed during the past 15 years following the reform and opening policy. The position of the People’s Republic of China (PRC) will be analysed with respect to the abstract relationship between international law and municipal law, treaty-making competence, legal doctrine of treaty application, legislative and adjudicative practice of treaty application in addition to the rank of treaties within the municipal legal system.

On 24 September 2009, the Court of First Instance of Hong Kong’s High Court delivered its judgment in the case of Cheng Kar-shun and Leung Chi-kin v the Honourable Li Fung-ying and Others.1 On 18 November 2009, the Government of the Hong Kong Special Administrative Region (HKSAR) published its Consultation Document on Methods for Selecting the Chief Executive and for Forming the Legislative Council in 2012. Both may be regarded as landmark events that can shape the future development of constitutional law and the political system of the HKSAR. This comment describes the two events and reflects on their significance.

In Hong Kong, the development of public interest litigation faces mounting difficulties due to the lack of means to secure funding to finance judicial review applications. While activists and non-governmental organizations are anxious to test the constitutionality of legal provisions and the legality of alleged wrongful acts by the public authorities in order to pursue their causes, they are, as depicted by Hartmann J, “placing [their] neck[s] beneath the guillotine of costs” in the process as they have to bear the uncertain risks of the respondent public authority’s legal costs if they do not succeed in the challenge. This article will discuss the funding system and the costs jurisprudence of public interest litigation in Hong Kong. It will seek to argue for an expansion of the funding regime for public interest litigation. In light of the public benefits arising from public interest litigation in the elucidation of public law, promotion of deliberative democracy and good administration, the court should adequately reflect such benefits in the cost allocation of public interest cases. Costs discretion should be exercised in a flexible and purposive manner, with due regard to access to justice concern, so that the future development of public interest litigation will not be unnecessarily stifled.

In 2008 this journal published an article by the present author in which the question of whether it was possible in Hong Kong to acquire a right of way by long, open and uninterrupted usage was examined.1 The article concluded that it was possible and that the method of recognition should be the doctrine of lost modern grant. Suggestions that Hong Kong’s leasehold system of landholding was an obstacle to that acquisition were examined and found to be flawed. Since the writing of that article the courts have been active in consideration of this question, culminating in a landmark decision by the Court of Final Appeal. During the same period litigation concerning rights of way has continued apace, illustrating the importance of law which enables such rights to be acquired by long enjoyment, particularly in the rural New Territories. The object of this note is to continue the account of rights of way in Hong Kong and to examine the most recent judicial decisions in this area.

Upon the handover, the Application of English Law Ordinance (Cap 88) (AELO) was banished from Hong Kong. The AELO was once a revolution. Properly understood, it jettisoned a general adoption of around 1800 pieces of English municipal legislation for a Schedule mentioning only 70 statutes. By mid-1997, only 21 such statutes remained. They were not localised by ordinances in time to be clearly embraced by Article 8 of the Basic Law. In Chandler, the Court of Appeal confirmed that the Schedule had been lost to the SAR. This article revisits that conclusion. By returning to the history and context of the AELO, it reveals a strong argument that the Schedule is impliedly part of Article 8 of the Basic Law. Yet, it ultimately rejects the argument, while warning that doing so: (a) requires, along with deep consideration of the law of repeals, an ambitious construction of Article 8 of the Basic Law; and (b) begs the question of whether the Schedule should now be localised, perhaps even retroactively.

Variants of the “market overt” rule and other nemo dat exceptions exist in many legal systems. Whether true owners or innocent purchasers should prevail is a challenging question. It requires a legal response striking a pragmatic balance between owners’ proprietary interest and the public interest in promoting trade by protecting purchasers. Following its repeal in England, the market overt rule is now facing the prospect of abolition in Hong Kong. Law reformers must properly consider relevant factors before recommending abolition of the market overt rule. Reasonable people at different times and places can adopt different legal responses, all of which are plausible. Although there is no demonstrably right response, law reformers in England and Hong Kong alike should reconsider consolidating the existing nemo dat exceptions into a single general exception, with the attendant advantages of clarity and simplicity.