Hong Kong Law Journal 1971 - 2024

"Due deference" – the giving of appropriate weight to the government's judg­ment in the court’s reasoning – is a tool that courts use to maintain the sepa­ration of powers in constitutional rights review. This note aims to provide a theoretical framework for understanding the issue of deference, and to analyse the Court of First Instance (CFI)’s approach to deference in two recent cases, Chan Kin Sum and Kong Yun Ming. The author argues that the CFI has adopted a spatial approach that failed to specify the contested issues that called for deference, inappropriately considered democratic legitimacy as a factor for deference and made broad presumptions about the democratic character of pri­mary decisions. This approach may lead to an over-deferential attitude that threatens the separation of powers, and the malleability of the approach may be subject to courts’ manipulation. The author argues for a more context-sensitive approach based purely on institutional factors.

After the Lehman Brothers Minibonds saga, Hong Kong has attempted to further strengthen risk disclosure requirements with respect to the sale of structured products to retail investors. This article distinguishes between two types of risk disclosure, namely, financial risk disclosure and behavioural risk disclosure. Drawing from behavioural law and economics literature, it is argued that traditional risk disclosure requirements, which are classified in this article as financial risk disclosure, cannot sufficiently protect retail investors from cognitive and psychological biases. Behavioural risk disclosure, however, may be able to mitigate some of these biases, and help consumers make better decisions. This can lead to enhanced consumer responsibility. It is also argued that behavioural risk disclosure could have other beneficial side-effects, the most notable of which being enhanced professional ethics. Nonetheless, it is suggested that behavioural risk disclosure should be seen as a complement, but not a substitute, to financial risk disclosure.

Hong Kong has very recently launched the civil justice reform (CJR) to enhance its competiveness with the evolving dispute resolution environment. One of the most notable features of the reform is the courts’ encouragement and facilitation of the use of alternative dispute resolution (ADR) methods, in particular mediation, with a view of “filtering” litigation cases and procuring early settlement. The reform has, however, alarmed many legal professionals here whose habitual practice is shaped by an adversarial and confrontational approach to litigation. This article presents arguments that the reforms not only bring challenges but also opportunities to the legal profession. Being the frontier participants of the civil justice system, lawyers must face the reality proactively. Their active response can convert the challenge into opportunities, and they shall be able to play a more versatile role in the dispute resolution business. In the long run, the success of civil justice reform in light of the development of ADR in general and mediation in particular, will rely upon the intelligent and dynamic culture of the legal profession in Hong Kong and active involvement of lawyers.

This article consists of three parts. The first part, which is also the lengthiest, reviews Hong Kong’s tax history from 1940 (when taxes on income were first introduced) until the present day. The second part considers the future. It argues that democracy in Hong Kong will probably not lead to a steeply progressive income tax, so long as the government introduces neither PAYE (that is, withholding of tax on income from employment) nor GST. The third part of the article considers what the rest of the world might be able to learn from the spectacular successes of Hong Kong’s tax system. The main lessons are: (a) that it is possible to structure a combination of very light taxes and very low public spending so that it enjoys very broad public support; (b) that it is possible for a developed jurisdiction’s tax legislation to be simple; and (c) that a progressive consumption tax is feasible.

The course of “localisation” provided a very good opportunity for Macau to update and modernise its conflict of laws system. For numerous reasons Macau has not fully taken advantage of this opportunity. Macau’s conflict of laws system has essentially inherited the notions and approaches of its colonisers, although improvements have been made in some areas. A vacuum of court decisions and legal doctrines needs to be urgently filled to give practical sense to the rules in this system. It is to be hoped that Macau’s conflict of laws system will be modernised in the process of integration with the mainland and Hong Kong.

In March 2006, the Hong Kong government issued a Consultation Paper proposing the merger of the existing Telecommunications and Broadcasting Authorities into a unified communications regulator called the Communica­tions Authority, which should be similar to the Office of Communications (OFCOM) established by the United Kingdom (UK) in 2003. In this arti­cle, the authors first study the proposals of the Hong Kong government on the establishment of a unified Communications Authority. They then examine the background for the establishment of OFCOM by studying the telecommuni­cations law and policy development in both the European Union (EU) and United Kingdom. The authors then evaluate the implementation experience of OFCOM from both legal and policy perspectives, and analyse the Office of Communications Act 2002, the Communications Act 2003 and the Regula­tory Framework for Electronic Communications Services 2002 adopted by the EU, as well as the regulatory and personnel policies of OFCOM. Finally, the authors argue that Hong Kong can learn eight lessons from the UK in its future implementation of a unified communications regulator. These include strong political support, systematic planning, the appointment of credible and compe­tent staff, adequate supporting legislation, a “light-hand” regulatory approach, openness and transparency, the guarantee and promotion of media and cul­tural diversity and finally, adequate legal control of the powers of the regulator together with legal remedies for members of the public aggrieved by the policies or decisions of the regulator.

This article examines China’s recently enacted Anti-Monopoly Law focusing on the potential effects of Article 8 and Chapter V’s absolute restrictions on administrative monopolies. If enforced, public administrators at lower levels of government will face a predicament: how to manage the necessary or legitimate functions of government that incidentally have an anti-competitive effect. Without the National People’s Congress or State Council enacting exceptions, it is likely that the current approach will hamstring flexible and responsive public administration. In light of the likely legal conundrum arising in China, this article suggests possible lessons drawn from Australian jurisprudence concerning section 92 of the Constitution. The principles developed by the High Court of Australia, after almost a century of case law, overcame a similar quandary to that confronting the Chinese. That is, an apparently absolute statement of law seeking to stamp out internal protectionism which provided the text, but not the test. This comparative study concludes that adopting lessons from the Australian constitutional experience of section 92 to improve the efficacy of the Anti-Monopoly Law is not simply comparing apples with oranges. Applying an Australian legal solution to a Chinese law conundrum provides an elegant and feasible solution to a universal problem.

Thirty years ago, at the start of a new period in the development of the legal system in China, Prof. Jerome Cohen wrote: “… both in basic assumptions and in institutions and practices, judicial administration in contemporary China displays some striking resemblances to its predecessor under the Chinese empire.” This paper examines five current examples to test whether Cohen’s insight remains true today. The paper concludes that traditional Chinese law does continue to influence the development of China’s modern legal system, but the influence is indirect rather than direct. The persistence of traditional elements creates contradictions with some elements of a modern legal system.

This article compares two legal reforms in China, that of the 1990s and 1070s, both in a Chinese political context. The purpose is to examine the former together with the latter within a conceptual framework using a histori­cal and comparative perspective. The findings show insightful similarities and differences in terms of sources, agents and dynamics of change, among other things. Both cases witnessed stability but inefficiency in the beginning, and evolved into an unstable but efficient stage when reform was in full swing. While the 1070s reform eventually failed in readjustment and ended up in a stage of instability and inefficiency, the outcome of the 1990s reform is still unfolding before us. To look ahead in perspective, this article suggests obser­vation on the path of professionalisation and the balance between the need for incremental change and the urgency of regaining stability within a rapidly changing legal system.

This article examines whether the European model of integration can be adopted by, or be a lesson for, China and Taiwan in achieving cross-Strait political ecumenism for the common good. The cross-Strait’s goal is to maintain peace, promote harmony and avoid engulfing ideological differences and contradictions. The European model, and in particular the common market model, has been discussed by policymakers and scholars in cross-Strait relations as a possible model for integration. However, there has been no systematic discussion of how such a model can fit into cross-Strait polity against various economic, social and legal conditions. This article uses the theoretical framework of legal transplant, which has previously been a successful technique in establishing one country’s legal structures in another. Hence, the article treats the European model as a legal model and examines how such a model can be transplanted into cross-strait polity, taking into account the respective legal doctrines, legal systems and legal traditions in China and Taiwan against the Pan-European legal tradition upon which the European model is built. In conclusion, this article proffers policy suggestions with regard to how the model should be modified without changing its spirit and objectives, and how other legal doctrines can be implanted to enhance the efficacy of the model.

Hong Kong lacks a statutory corporate rescue regime, despite repeated attempts at legislative reform beginning with recommendations made in 1996 by the Law Reform Commission (LRC). Each attempt at passing a version of so-called “provisional supervision” failed due to irreconcilable views of diverse stakeholders. The main point of contention has centred on the treatment of labour claims and, in particular, on the feasibility of full satisfaction of labour claims as a precondition to entering provisional supervision. In October 2009 the government of Hong Kong tried once again to bridge the differences with proposals set forth in a consultative paper entitled, Review of Corporate Rescue Procedure Legislative Proposals, issued by the Financial Services and Treasury Bureau (FSTB). This article addresses two key issues relating to the possible enactment of a provisional supervision regime in Hong Kong – (1) the need to achieve acceptable compromise on the treatment of employees’ outstanding entitlements and (2) the advantages of including a hybrid debtor-in-possession approach that would allow management in certain cases and with creditor approval to continue administering the debtor during the statutory rescue process.

Right from the beginning of Singapore’s nationhood, an obvious and unbridgeable disconnect appeared – between its leadership’s political ideology and the aspirations on human rights and constitutionalism of its legal community. Singapore’s political leadership has spent much energy articulating a “pragmatic” ideology on political governance – placing primacy on economic progress, good governance and nation-building and emphasising a “communitarian” approach to human rights instead of individual rights. The political leadership’s conception of the rule of law smacks of a “thin” one. The government religiously adheres to legal formalities, rather than substantive theories of political morality, to legitimise its actions, if primarily for the instrumental role of rule of law in economic prosperity. This article examines the government’s response to the seminal Court of Appeal case of Chng Suan Tze v Minister of Home Affairs, where the government’s immediate and hard-hitting constitutional and legislative amendments – overruling the court’s decision on a preventive detention case – clearly demonstrated its intent to ensure that the Singapore judiciary accept its limited role and that the judiciary accept a concept of the rule of law which should not be substantially different from that understood and accepted by the political leadership. This article examines in detail how the Singapore judiciary’s acceptance of the government’s “thin” conception of the rule of law has a direct bearing on the approach taken towards constitutional adjudication in Singapore.

The standard form ISDA Master Agreement published by the International Swaps and Derivatives Association (ISDA) is the pre-eminent market standard contract used by the global derivatives market to document OTC derivative transactions. The recent collapse of Lehman Brothers and other major financial institutions around the world has exposed certain weaknesses in the termination and close-out provisions of the ISDA Master Agreement, especially where the counterparty in a derivative contract becomes insolvent. This article will examine the universal problems faced by insolvency administrators and liquidators globally when trying to terminate and close out ISDA contracts, and recover amounts due to the insolvent counterparty (if any). Experience will be drawn from recent court rulings on these issues in Australia and the United States of America (which had opposing outcomes), with a view to consider the legal position in Hong Kong and potential endgame solutions for Hong Kong liquidators facing similar difficulties.

“Derivatives are financial weapons of mass destruction”-Warren Buffett

In an attempt to ensure propriety, parties to international commercial arbitrations (ICAs) frequently have the arbitrations administered by specialist institutions. Traditionally, a handful of select institutions have facilitated a majority of institutional ICAs. Recently, however, a variety of specialist and regional ICA institutions have developed, creating a more competitive international private justice market (IPJM), and resulting in changes to the ICA regime. Although ICA is widely accepted, many criticisms have been made concerning developing nations in the ICA process. The overarching criticism is that the ICA regime was created by developed nations to serve their own exploitative interests. This article explores the rise of the ICA regime, investigates whether the criticisms of ICA have been justified, examines whether the genesis of the IPJM will alter past trends in ICA and considers what the likely effects of resulting new trends will be for developing nations.

Creative Commons is a non-profit organisation founded by Professor Lawrence Lessig in the United States. The organisation seeks to replace the default rule of “All Rights Reserved” under copyright law with a flexible “Some Rights Reserved” approach in order to promote the wider dissemination of knowledge and innovation in society. It achieves its aims by offering user-friendly copyright licences which authors and creators can attach to their works so as to encourage free use and remix by others within the prescribed limits. Creative Commons licences have been adapted to Hong Kong copyright law since 2008. This article contends that the current copyright system fails to promote the education and creativity of the young generation and examines how Creative Commons could assume a pivotal role in advancing the education and creative sectors in Hong Kong. Case studies are drawn from the local community and overseas where appropriate.

This article considers the extent to which a legal right to equality and non-discrimination – as it has been expressed and developed in international law, domestic legislation and constitutional provisions – can support inclusion in education for persons with disabilities. Article 24 of the United Nations Convention on the Rights of Persons with Disabilities (CRPD) and other relevant human rights standards serve as reference points for this discussion. The article explores the concepts of disability (based on the social model), substantive equality, and inclusion and argues that these notions combine to form a theoretical foundation for a strong legal framework that requires transformative measures. It considers how these concepts are reflected in international human rights law and how they have been applied in Hong Kong domestic law. It concludes that legal reforms are necessary for Hong Kong to fully implement its obligations to ensure inclusive education and substantive equality under the CRPD.

Both China and Canada are signatories to the United Nations Convention on the Rights of Persons with Disabilities. By examining the right to education guaranteed in the Convention and domestic Canadian law, the article examines Canada’s implementation of that right. To be meaningful, a right to education must be inclusive. Inclusion is achieved on two levels: individual accommodation and systemic changes that challenge established procedures that may result in discrimination. Systemic changes are often seen as more difficult or expensive, and Canadian courts have been reluctant to impose them. However, inclusive education requires a dual focus to combat discrimination on an individual and systemic level, and to uphold international commitments that both China and Canada have made.

The Convention on the Rights of Persons with Disabilities (CRPD) came into force in 2008 and now has 87 states parties. As discussed in Part I, Article 24 obligates states parties to provide an inclusive education with appropriate accommodations. This will be challenging for many governments in the Asia Pacific, where school enrolment rates for children with disabilities remain low. States parties also have an obligation to provide effective implementation mechanisms, including procedures to resolve disputes that may arise among education providers, students and their parents. In order to illustrate the elements of a possible enforcement model, Part II of the article discusses the legal framework that has evolved in the United States, which requires an “individualized education program” (IEP) for every child with a disability. Part III analyses the primary conflict resolution mechanisms, including mediation, resolution conferences, and due process hearings. While mediation has many advantages, power imbalances may undermine a child’s right to an inclusive education. Thus, due process hearings continue to provide an important safeguard in the United States. Part IV considers how these mechanisms might be adapted and improved upon in the Asia Pacific, in order to develop a rights-based enforcement model that is true to the values of the CRPD but retains the advantages of alternative dispute resolution. While it may be tempting for governments to rely upon general anti-discrimination legislation, Article 24 of the CRPD requires a more proactive and sustained approach to inclusive education.

The enactment of the Minimum Wage Ordinance (MWO) in July 2010 was a milestone of sorts in the history and development of Hong Kong’s law and economy. It marks arguably the most serious legislative incursion to date into Hong Kong’s much vaunted free market economy, rivalled only by the enactment of the discrimination ordinances in the 1990s. The MWO resonates more because of its explicit economic implications. It will no doubt place in jeopardy Hong Kong’s standing as the freest economy in the world.

This article examines the controversy that arose from the Hong Kong Government’s plan to extend the South East New Territories Landfill in Tseung Kwan O into the Clear Water Bay Country Park, particularly how the proposed landfill extension led to a confrontation between the government and the legislature. The authors argue that s 14 of the Country Parks Ordinance (Cap 208) imposes an obligation on the Chief Executive to make an order which he is not free to repeal thereafter. This arrangement comports with the overall statutory scheme and purpose of the legislation which features a four-stage process with provisions for public consultation. The controversy calls into question the efficacy of this four-stage process as well as that of the environmental impact assessment regime. The authors suggest that there is a need to consider strengthening the statutory mechanism for public involvement to prevent a repetition of the present controversy. This article also examines the broader issue of the territory’s waste management strategy and the need for more environmentally sustainable policies.

In W v Registrar of Marriages, the Court of First Instance declined to allow a post-operative male-to-female transsexual to marry as a woman, citing as reasons the lack of a judicial license and of a societal consensus to alter the meanings of “man” and “woman” which would have profound ramifications including the possibility of same-sex marriage. In light of the evolving jurisprudence over legal recognition of post-operative transsexuals under international law and in overseas jurisdictions, this article seeks to shed some light on the purported conceptual links between allowing transsexuals to marry in their new sex and removing the sex requirement of marriage altogether. No matter whether the logical progression will materialise, society faces another question as to why consensus matters.

Discrimination can be broadly defined as indefensible differential treatment based on certain prohibited grounds. It is implicit in the concept of differential treatment to have a comparator who is in similar or not materially different circumstances. It is argued that it is not always possible to find an appropriate comparator in the context of marital status discrimination, and a liberal and holistic approach is called for in the case of hiring or dismissal involving a spouse. The article concludes with some reflections on when such hiring or dismissal decisions could be justified, and points out that while a liberal and holistic approach is desirable, the present statutory regime may not permit such an analysis in the case of direct discrimination, and that the court will find itself engaged in a tortuous and artificial comparator analysis to avoid a finding of discrimination when the differential treatment may be justified.

In Yong Vui Kong v Public Prosecutor, the Singapore Court of Appeal recently reaffirmed the constitutionality of the mandatory death penalty for drug trafficking offences under the Misuse of Drugs Act. Specifically, the Singapore Court held that the judicial obligation to impose a capital sentence, once guilt for the drug offence was so established, was neither a violation of the accused’s constitutional right against the deprivation of his life in accordance with law nor a denial of his right to equal protection under the law. In this article, the author argues that, whilst one may be sympathetic to their Lordships for reaching the result they did, in light of the political realities underpinning Singapore’s constitutional arrangement, the legal arguments advanced by the Court of Appeal for their decision unfortunately do not withstand close scrutiny.

Section 70 of the Employment Ordinance prevents an employer from agreeing with an employee to reduce or extinguish, in the contract of employment between them, the minimum rights and benefits conferred on the employee under the Ordinance. While preventing “contracting out” of rights and benefits under the Ordinance is a critical part of achieving its aim of protecting employees, it is questionable how far s 70 goes in fettering the freedom of contract of employers and employees. This article examines whether s 70 ought to be construed broadly enough to capture, not only contracts under which an employer agrees to engage a person as an employee, but also agreements that an employer and an employee may make at the conclusion of their relationship to finalise matters between them. This article examines the provision in light of its context and purpose and concludes that on a proper construction, s 70 should not be understood as extending so far. Moreover, while little consideration of this question can be found in case law, the weight of existing cases can be understood to support this conclusion.

This article describes the historical laws under which habitation in certain neighbourhoods in Hong Kong was reserved for Europeans. The tools for such reservation evolved as did the rationale, from prohibiting the building of “Chinese tenements” in a “European District” to an outright ban in the Peak District on renting to the Chinese, to conditioning residence in the Peak District and in the southern half of Cheung Chau on permission from the Governor-in-Council. The perceived threat to Europeans, of being crowded out by Chinese people, also evolved as the Chinese community developed in wealth and importance. But the genesis of all such laws was the system for raising revenues for the government, namely, charges or “premiums” levied upon the development of land. This system requires the government to keep the price of land high, which it does by keeping it scarce. Under the Basic Law and the Bill of Rights Ordinance these laws would be unconstitutional because of their racist effects or wording. But the problem which they tried to solve, in a deeply flawed way, persists, ensuring substandard living space in Hong Kong.

The article sets out the current law relating to secondary party criminal liability in Hong Kong, beginning with joint enterprise and then considering accessorial liability in the absence of prior agreement. The object is to ensure that any adoption of recent changes of approach in England, specifically those in and arising from Rahman and Bryce, is a matter of deliberate and informed choice. The article concludes that taking the subjective mens rea requirements for secondary party liability seriously requires taking Hong Kong’s current strong agreement/intention/knowledge requirements with respect to target offences seriously and guarding against dilution of actual foresight of possible collateral offences requirements by excessive abstraction of foreseen and committed acts. In other words, Rahman, Bryce and their progeny should be rejected.

Primary legal materials, namely statutes and statutory instruments, judgments and judicial opinions and other materials produced by the pillars of government, are important public documents. This paper traces the rights that have accumulated in these materials, starting with common law literary rights and the prerogative and moving on to modern English and Hong Kong copyright statutes. By comparing the special nature of primary legal materials with the fundamental objectives underpinning copyright, and with the support of a broad comparative survey, this paper argues that there is a strong public interest in reforming law and policy in Hong Kong to clarify the public nature of primary legal materials and to open up these documents for unrestricted and unencumbered use.

Since its establishment in 1997 coinciding with the transfer of sovereignty and the coming into force of the Basic Law, the Court of Final Appeal has faced a number of constitutional challenges. In responding to these challenges the Court has recognised and accepted its role as a constitutional check on laws and executive acts that violate the Basic Law, and has employed a range of constitutional remedies, both traditional and innovative. In this article the author reviews the record of the Court of Final Appeal in dealing with these constitutional challenges and asks whether it has made the right choices, or whether it has on occasion gone too far or not far enough. While there cannot be a right without a remedy, the courts must bear in mind the role of the judiciary within the constitutional framework of Hong Kong.

There are very few established providers dedicated to the supply of free or subsidised legal services in Hong Kong. The Legal Aid Department (LAD) bears the primary burden of providing legal assistance to disadvantaged and low-income individuals, and is almost exclusively the provider of such assistance in civil disputes. The restriction on eligibility for legal aid means that a significant proportion of individuals and institutions cannot access legal advice and representation. The author argues that a pro bono clearinghouse model, such as the Public Interest Law Clearing House, which has been operating in Australia for many years, is worthy of consideration as a model for improving access to justice and, to remedy some of the shortfalls of the current system. A concomitant benefit of such a model is that it can also serve as a platform for law students and lawyers seeking to engage in pro bono work.

Despite its small size, Singapore occupies a position of special significance in the debate on the relationship between economic development and political, social and legal institutions. The ruling People’s Action Party (PAP) of Singapore legitimises its authoritarian political regime – and insulates it from substantive scrutiny – via a three-pronged strategy: first, through its tightly controlled media and communication channels; secondly, by delivering an admirable economic performance and, creating and maintaining an awe-inspiring standard of living; and thirdly – and most importantly – through its legal institutions. However, there are profound logical flaws and stark absences of consistency in the judgments that help secure this legal state of affairs. This article confines its analysis to the criminal offence of scandalising the judiciary, in the context of critical reporting of the judgments in political defamation cases in Singapore.

In this article the author explores a number of misapprehensions concerning common law trusts, under three headings. The first is “misusing trusts”, in which he describes situations in which a failure to appreciate the juridical nature of the trust relationship can lead to the breakdown of carefully planned transactional structures. In the second, “mischaracterizing trusts”, he describes how legislatures, especially in Canada, have frequently treated the common law trust as if it were a person or an entity, with unfortunate results. The third is “misappropriating trusts”, in which he describes an opposite and more recent development in US law, namely a decision to label certain corporations as trusts. In his conclusion, the author appraises the significance of all of these misapprehensions and the problems to which they may lead, and offers some positive suggestions as to how they can be addressed.

In this article, based on his keynote conference address, the author offers his reflections on the common law in Asia, the relevance of comparative legal analysis, the convergence of laws, and the role of the legal academic.

The focus of this paper is on the role that the courts in both Singapore and Hong Kong play in facilitating international trade. Five key factors are identified that have cumulatively enabled the courts of Singapore and Hong Kong to play a significant role in creating a predictable and stable legal environment in support of international trade. In doing so the courts have had to grapple with the tension between the borderless nature of international trade and the territorial limits of domestic courts. The author concludes with a reminder of the importance for judges to keep abreast of developments outside the courtroom, and of the importance of the assistance that members of the academia can provide in this regard.

Based on first-hand interviews and archives, and secondary Chinese language books and journal articles, this paper examines the role of local people’s congresses in Party-state China. It explores the relationship between the Chinese Communist Party and local people’s congresses, as well as the functions of local people’s congresses. It argues that, on the one hand, the congresses’ role in checking the Party-state is improved in the reform era, but still limited. On the other hand, the congresses entrench the Party-state by providing a channel to absorb social opinions, address grievance and resolve basic-level conflicts.

Legal & Legislative Drafting: Paul Salembier, [Canada: LexisNexis, 2009, 575pp, Hardcover, $HK1182, $CAD155], ISBN 9780433453611