Michael Thomas SC

Hong Kong’s outstanding success story since 1997 has been its legal system. Within the Basic Law’s template, standards and efficiency have improved and the injection of local talent has raised the quality of the bench many notches. At its apex, the Court of Final Appeal has met the challenges of the new constitutional order, developed Hong
Kong’s very own jurisprudence in many different topics and given a new, meaningful context for human rights.

The man to be given most credit for this success is Andrew Li, appointed from the bar to become Chief Justice in 1997. His skilled advocacy and legal advice brought many clients to his door. Yet, for a busy practitioner, he was unique in devoting time to public service (chairing the Prince Philip Dental Hospital, the University and Polytechnic Grants Committee, membership of ExCo, and much more). A talent for administration was in his blood; his father was a dedicated Hong Kong civil servant, rising to be Secretary for Home Affairs and chair of the Public Service Commission.

Cometh the hour of midnight on 1 July 1997, cometh the man to be the new Chief Justice.

Andrew was perfectly qualified to oversee the setting up and staffing of a new court in the old French mission chapel, with its quiet dignity in the precincts of the Anglican cathedral. He presided over half its caseload, deciding all the important constitutional issues. This he did authoritatively, courteously patient with obstreperous counsel, ever astute to spot critical points in an argument. For the rest of his time he worked tirelessly for the judiciary, ensuring adequate provision of resources, maintaining appropriate conditions of service to safeguard independence, spotting talented candidates for judgeships and promoting changes to promote efficiency. He also travelled abroad as an ambassador for the common law’s newest full member, spreading the word of Hong Kong’s rule of law.

The CFA has acquired a steadily growing reputation for first class exposition of legal principles and sound analytical reasoning. Before 1997, much public controversy had delayed its establishment. It was a remarkable concession for the sovereign power to accept that a procession of foreign judges might enter its territory to adjudicate local disputes in the HKSAR Court of Final Appeal. This engendered rows over whether the concession was for two judges rather than one, now ancient history.

The itinerant top judges from overseas who gave the novices confidence and support in early days increasingly seem less influential, more and more leaving the permanent judges to produce leading judgments. A dissenting voice is rare. I recall only two cases –  I happened to appear in both – in which the court divided three to two, with the overseas judge in the minority both times.

For the virtue of leadership for the public good, there is a shining example in Andrew Li. All who rejoice in the boon of judicial independence and rule of law wish him a happy and long rest from the pressures of the office he has held for 13 years with such distinction and success.

Michael Thomas SC

Kevin Zervos SC

When the Basic Law came into effect on 1 July 1997, a new constitutional order was established in Hong Kong. The Court of Final Appeal rests at the apex of the judicial pyramid and under the stewardship of Chief Justice Li it was quick to recognise the vital role of the judiciary as a constitutional check on laws or executive acts that were inconsistent with the Basic Law or the Bill of Rights.

In the formative period of the Li Court, the Chief Justice stressed the importance of the constitutional role of the judiciary and its independence: Ng Ka Ling v Director of Immigration [1999] 1 HKC 425 at 427 (giving the judgment of the court). He described the Basic Law as a living instrument intended to meet changing needs and circumstances. He said that the courts of the Region had a duty to enforce and interpret the Basic Law and the exercise of jurisdiction was a matter of obligation, not of discretion, so that, if legislation or acts of the executive authorities were found to be inconsistent with the Basic Law, the courts were bound to hold them to be invalid at least to the extent of the inconsistency. He also said that under the Basic Law the courts had independent judicial power within the high degree of autonomy conferred on the Region.

The Li court, in relation to criminal cases, has on many occasions been responsive and progressive in addressing issues concerning constitutional and human rights violations and has shown a preparedness to use and fashion remedies sensitive to context and to
the purposes of the right or freedom at stake. These decisions have significantly redefined and advanced the criminal law and related areas by the pronouncement of statements of principle that provide certainty and clarity through a contextual and purposive approach to relevant human rights law.

It has been stated that the primary role of the CFA in the administration of criminal justice is to resolve real controversy on points of law of great and general importance and that it is not a second court of appeal. It is said that it does not function as a court of criminal appeal in an ordinary way and reviewing convictions to see if they were safe and satisfactory is entrusted to the intermediate appellant court. As to the substantial and grave injustice limb, it is said that it exists as a residual safeguard to cater for cases where there is a real danger of something so seriously wrong that justice demands an enquiry and that in order to satisfy this limb, it must be shown that there has been to the appellant’s disadvantage a departure from accepted norms which departure was so serious as to constitute substantial and grave injustice: So Yiu-fung v HKSAR [2000] 1 HKC 348 at 351–352 per Bokhary PJ.

In certain criminal appeals the CFA has a tendency to act as a second court of appeal, in that, under the limb of substantial and grave injustice it has conducted a fairly wide ranging examination of issues and the evidence. The problem that arises is that such an examination is generally limited and issues can sometimes get distorted if there is
not an overall and thorough appreciation of the evidence presented before the trial court. The CFA therefore needs to guard against this limb becoming a vehicle for general and wide ranging grounds of complaint that are unclear and lack specificity.

The Li court has made a major contribution to the criminal justice system and where necessary has fashioned the criminal law and related areas to be consistent with the Basic Law. It has performed the important role of bridging the gap between law and society and protecting the Basic Law.

Kevin Zervos SC
Deputy Director of Public Prosecutions

Gerard McCoy SC on criminal law

The only Chief Justice of the HKSAR will leave office soon with the satisfaction of knowing that he has fashioned as his enduring legacy a Court of Final Appeal that has deservedly earned international cachet and prestige for its decisions. The transition from the Privy Council as our court of last resort went seamlessly. What could have been a disruptive and even tumultuous phase for the Judiciary proved to be an almost effortless event because of the foresight and wisdom with which the Honourable Andrew Li approached his unique challenge. The Li era has been characterised by his own pervasive equanimity, by the imposition of a quest for excellence in the Judiciary and profession alike, and by a strategic vision for the HKSAR, indissolubly a part of China, as a common law blue-chip on the world scene.

The range and nature of the criminal law challenges that beset the Chief Justice over the last 13 years extended far beyond the appeals and applications before the court. The Chief Justice commissioned extensive law reform of the anomalous and intricately complicated hearsay rule (under the Chairmanship of the Honourable Stock V-P) and other criminal law subjects. (This Hearsay Report which will eliminate injustice should not be allowed to typically languish in the doldrums between government bureaucracy and legislative inaction.)

One significant feature of the court, happily differentiating it from most other final courts, has been the tendency to give leave to appeal in Magistracy appeals. What prospect was there of getting a Magistrate’s trial from Hong Kong ending up in the Privy Council? I can only think of Gammon (HK) Ltd v A-G of Hong Kong [1985] AC 1 and the exceptional early Hong Kong Bill of Rights case of A-G of Hong Kong v Lee Kwong Kut [1993] AC 951, and then that was a prosecution appeal. Some of the most powerful criminal jurisprudence from the court is the culmination of a trial before a Magistrate. The recent decision in Hin Lin Yee v HKSAR [2010] 2 HKLRD 826 is an outstanding judgment that will be gratefully appropriated by overseas courts and has completely supplanted the comparator Privy Council and House of Lords decisions.

The turning points of the criminal law in the CFA have often involved deep structural constitutional law challenges. The complexity of these issues dwarf those of the orthodox black letter statutory interpretation issues, the usual cannon-fodder of appellate courts. The reading down of reverse persuasive burdens to evidential burdens in the Dangerous Drugs Ordinance (Cap 134), the eradication of antediluvian laws criminalising homosexuality and the pointed reaffirmation of the presumption of innocence as a constitutional norm, have all been issues that the court has adroitly dealt with.

These fundamental issues have provoked the Li court to its very best – clear, coherent, thematic and homogenous reasoning with a deep integration of eclectic international learning. The Chief Justice’s fingerprints are, to the discerning reader, all over these
judgments, which have guaranteed the respect and admiration of the profession here and beyond. The Chief Justice’s oeuvre is assured with the final courts of the United Kingdom, Canada, Australia and New Zealand themselves now increasingly adopting our court’s criminal decisions as their own eg HM Treasury v Ahmed [2010] 2 WLR 378;
R v Boulanger (2006) 2 SCR 49; R v Huy Vinh Quach [2010] VSCA 106; Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1. Decisional law has now become an important export commodity.

The Honourable Andrew Li GBM – a Man of Law, who like Lord Coke in the Case of Proclamations (1611) 12 Co Rep 74 judged ‘according to the golden metewand of the law and not by the crooked cord of discretion’, ushered in thereby a standard for judgment and fairness that is emblematic of the success and confidence of the entire HKSAR.

Gerard McCoy SC
 

Gary Meggitt on civil procedure

There are three factors to keep in mind when looking at the Court of Final Appeal’s decisions on civil procedure from 1997 to 2010.

The first is the need to obtain leave to appeal. Most procedural disputes are raised and resolved at interlocutory hearings. No appeal to the CFA from the Court of Appeal will be admitted unless leave has been granted by either of them: Hong Kong Court of Final Appeal Ordinance (Cap 484) s 23. Leave to appeal one of its interlocutory judgments (if it even gets that far) lies at the discretion of either court. As a consequence relatively few procedural disputes reach the CFA.

The second is the disparate nature of ‘civil procedure’ when compared to, say, the law of tort or contract. The RHC contain 121 separate Orders and four appendices. Whilst RHC Order 1A contains the ‘underlying objectives’ there is no equivalent of the ‘neighbour principle’ from Donoghue v Stevenson [1932] AC 562 or the need for a common intention to enter into legal obligations (see Rose and Frank Co v Crompton Bros [1923] 2 KB 261 per Atkin LJ at 293) which are fundamental to negligence or contract law respectively.

The third is the ‘Banquo’s ghost’ of Civil Justice Reform (CJR). The Chief Justice himself initiated the CJR and two members of the CFA sat on its Working Party. The CJR arguably gave the CFA’s members more scope to influence civil procedure than they had through the ‘usual channels’ of litigation. Moreover, the changes under the CJR could mean that pre-April 2009 decisions do not provide a useful guide to the CFA’s future approach.

Having said that, there are over 80 ‘Li court’ judgments on civil procedure.  Among the more interesting decisions is Poon Hau Kei v Hsin Cheong Construction Co Ltd [2004] 2 HKLRD 442, where Bokhary PJ held that a court was entitled to decide in favour of a plaintiff on the basis of a factual ‘scenario’ pleaded by the defendant, even if it was different from that pleaded by the plaintiff. Thus not only should counsel plead their own client’s case with precision, they should avoid pleading the other side’s case too!

In PCCW-HKT Telephone Ltd v Aitken [2009] 2 HKLRD 274, the plaintiff argued that legal professional privilege provided a basis for obtaining Bolkiah-type relief against its ex-employee (see Prince Jefri Bolkiah v KPMG [1999] 2 AC 222). The CFA rejected the
plaintiff ’s claim. Lord Hoffmann NPJ stressed that the Bolkiah principle was a part of the law of confidence, not privilege. His Lordship added that it was not possible to ‘transfer features of the law of privilege into the law of confidence’.

Finally, in Town Planning Board v Society For The Protection of The Harbour Ltd [2004] 1 HKLRD 396, the Chief Justice himself stated that indemnity costs would not only be ordered ‘where a case has been brought with an ulterior motive or for an improper purpose or where there is some deception or underhand conduct on the part of the
losing party’. Thus, an award of indemnity costs to the Society, which took into account the public importance of the case, was justified.

The relative lack of CFA decisions on civil procedure may, perhaps, demonstrate that the ‘system’ works as these matters are usually dealt with at a lower level. We shall have to see if the CJR, with its emphasis on ‘active case management’, results in more or fewer cases reaching the CFA in the future.

Gary Meggitt
Assistant Professor
The University of Hong Kong

William Waung on commercial law

In 1997, the Court of Final Appeal took over from the Privy Council as the court of final appeal of Hong Kong and continued the steady development of commercial law. The easy access to the CFA of commercial appeals brought as of right resulted in many appeals being heard with only a small number involving important questions of commercial law.

Of the some 17 significant commercial appeals over the period 1997-2010, most of the leading judgments were given by two Permanent Judges (Bokhary and Ribeiro), often with strong support from the Non-Permanent Judges. Dissent is, however, rare (Litton in
Bewise Motors Co Ltd v Hoi Kong Container Services Ltd [1998] 4 HKC 377 and Polyset Ltd v Panhandat Ltd [2002] 3 HKLRD 319).

The Chief Justice preferred to give no leading judgment in any substantial commercial appeal. This must be attributed to his astute judgment that the public interest of Hong Kong required him to concentrate his energy and attention to the demanding, important and difficult public law of Hong Kong and that he could safely leave commercial law in the many safe hands in the CFA. This is a good example of what Sir Anthony Mason NPJ referred to when he describes the Chief Justice’s leadership as one with a strategic vision and a capacity for the long view.

In the limited space available, I can do no more than mention that the CFA, in different areas of law relating to commerce and business, gave judgment on:

• Contract (Polyset on deposit; Shanghai Tongji Science & Technology Industrial Co Ltd v Casil Clearing Ltd [2004] 2 HKLRD 548 on contract by conduct; Unruh v Seeberger [2007] 2 HKC 609 on champerty);
• Shipping (Bewise on sub-bailment; Re Resource 1 [2000] 3 HKC 285 on admiralty jurisdiction; Carewins Development (China) Ltd v Bright Fortune Shipping Ltd [2009] 5 HKC 160 on straight bills of lading);
• Arbitration (Hebei Import & Export Corp v Polytek Engineering Co Ltd [1999] 2 HKC 205 on Beijing award enforcement; Swire Properties Ltd v Secretary for Justice [2003] 3 HKC 347 on domestic award appeal);
• Moneylending (Emperor Finance Ltd v La Belle Fashions Ltd [2003] 3 HKLRD 995; Celestial Finance Ltd v Yu Man Hon [2005] 1HKLRD 747; Strong Offer Investment Ltd (In liq) v Nyeu Ting Chuang [2007] 3 HKC 234 – all on the Ordinance (Cap 163));
• Banking (Bank of China (Hong Kong) Ltd v Fung Chin Kan [2003] 1 HKLRD 181 on collateral contract; Li Sau Ying v Bank of China (Hong Kong) Ltd [2004] 3 HKLRD 106 on undue influence);
• Confidence (Nam Tai Electronics Inc v PWC [2008] 1 HKC 427 on qualifications to duty of confidence; PCCW HKT Tel Ltd v Aitken [2009] 2 HKC 342 on ex-employee injunction); and
• Company (Tan Man Kou v Chime Corp Ltd [2004] 3 HKLRD 922 on a section 168A petition and a derivative action; The Joint and Several Liquidators of Akai Holdings Ltd v The Grande Holdings [2006] HKCU 2083 on liquidator’s power).

On the negative side, one decision was adversely commented upon by the academic community. In Polyset, on the most unusual facts, the CFA (Litton dissenting) regrettably decided that the 35% deposit (paid in four instalments) could not be forfeited. Scholars considered Polyset a missed opportunity to develop our own law for deposit, appropriate for Hong Kong where we have a particularly volatile property market.

On the positive side, apart from the Empire Finance line of cases finally settling the law of moneylending in Hong Kong, at least four cases will stand out as important judgments worthy of consideration by the other common law courts. Ribeiro PJ’s analysis in Unruh of the modern diverse strands which constitute the public policy of
non-enforceable contracts will be closely studied. In Nam Tai, the scope of the various qualifications to the duty of confidence (consent qualification, self-interest qualification and self-defence) were examined carefully by Ribeiro PJ. In Chime, the CFA (particularly
Scott NPJ) showed the distinction between a section 168A petition and a derivative action. In Akai, Millett NPJ clarified the necessity for the extensive statutory power of the liquidator to seek information in relation to the affairs of the company.

The high reliability of the CFA in commercial appeals has substantially contributed to the continued high regard for Hong Kong by the international business community. Under Chief Justice Andrew Li, the CFA has continued to maintain an internationally recognised
high standard.

William Waung
Adjunct Professor, The University of Hong Kong
and Chinese University of Hong Kong
Former Judge of the Court of First Instance, HKSAR

Malcolm Merry on land law

During the first 12½ years of its existence the HKCFA decided about 50 appeals concerning land. The subjects of these cases ranged from adverse possession to unauthorised structures. They embraced matters as unusual as Chinese customary trusts over land and rights of way by prescription, and as mundane as agreements for  the sale of land and preliminary agreements for tenancy. The majority of the cases
concerned agreements for sale and purchase, title and conveyancing, but there were also disputes relating to government leases, land compensation and building management.

In the course of its judgments in these cases the CFA has departed from English law at least twice and has expanded (or newly discovered) the common law at least once. The court has also confirmed and developed certain special features of Hong Kong conveyancing. In the main though, it has applied well-settled principles of law to facts,
sometimes after the Court of Appeal had failed to do so.

The CFA has delivered judgments which both please and disappoint developers and speculators. It has found both for and against vendors and purchasers. It has found for two landlords and one tenant. If it has favoured any litigant, that would be the government.

The most influential land decision was Jumbo King Ltd v Faithful Properties Ltd [1999] 4 HKC 707, one of a number of cases arising out of the 1997 property collapse to reach the CFA, in which the court laid down a contextual approach to the interpretation of deeds and contracts. This approach has been employed in numerous subsequent cases, many not involving land.

Jumbo King also confirmed the importance of shares in the land in the Hong Kong scheme of title to flats in buildings in multiple ownership. This judgment, together with the court’s subsequent decision in Kung Ming Tak Tong Co Ltd v Park Solid Enterprises Ltd [2008] 6 HKC 42, now provides the authority for that scheme.

A decision of wide practical impact was Leung Tsang Hung v The Incorporated Owners of Kwok Wing House [2007] 5 HKC 227 in which the CFA held an owners’ corporation liable in public nuisance for dangers to the public arising from the dilapidated state of the common parts (in that case, the external surfaces) of their building.

Two cases of legal importance and debateable correctness are Polyset Ltd v Panhandat Ltd [2002] 3 HKLRD 319 and Director of Lands v Yin Shuen Enterprises Ltd [2003] 2 HKC 490. In the first, the court held that a deposit of 35% of the purchase price was not a true deposit and was not forfeitable even though the purchaser had expressly acknowledged that it would be forfeitable because of the long completion date and fragile state of the market. In the second, the court held that the ‘real value’ which, according to Article 105 of the Basic Law must be paid by the government when it resumes land, was something less than the market value.

However the land case of greatest legal interest is China Field Ltd v Appeal Tribunal (Buildings) [2009] 5 HKC 231 in which the CFA decided that the grant and acquisition of rights of way by long, uninterrupted enjoyment was possible between leaseholders, in the process upsetting more than a century of precedent in England.

Malcolm Merry
Associate Professor
The University of Hong Kong

Rick Glofcheski on tort law

In the 13 year period since the establishment of the Court of Final Appeal, tort law has remained largely intact with only a few significant developments. Of the 30 tort appeals heard during this period, 18 concerned negligence, and of these eight concerned work-related personal injuries. The most important and recurring issue in these cases is the question of who is an employee, an issue relevant to the reach of employment law protection under common law and statute. Through its decisions, in particular that of Poon Chau Nam v Yim Siu Cheung [2007] 2 HKC 135, the CFA has entrenched a more
principled approach, and brought a dose of reality that more accurately reflects the relationships on the work site in Hong Kong.

One other important work-related issue of CFA concern is the employer’s duty to provide safe conditions of work. The CFA’s configuration of the duty in Cathay Pacific Airways Ltd v Wong Sau Wai [2006] 3 HKC 178 is an increased vigilance expected of employers in
thinking about and planning for a ‘safe system of work’, even in what appear to be routine work activities.

On the issue of vicarious liability the CFA achieved its greatest reform in negligence law, greatly expanding the scope of employer’s vicarious liability in Ming An Insurance Co (HK) Ltd v Ritz-Carlton Ltd [2003] 1 HKC 225 by extending the ‘close connection’
test to cases of employee negligence. The trend toward the expansion of liability continued with the unanimous decision in Leung Tsang Hung v Incorporated Owners of Kwok Wing House [2007] 5 HKC 227, imposing public nuisance liability on Incorporated Owners for injury to pedestrians from falling illegal structures created by an individual
owner/occupier.

The one other area in which there was a significant break with the previous law is that of defamation, specifically, the defence of fair comment. In Cheng v Tse Wai Chun [2000] 4 HKC 1, the CFA ruled that motive was irrelevant in fair comment, that the only form of malice that would defeat a comment that otherwise satisfied the objective requirements of the defence was dishonesty, namely that the speaker did not believe what he said. In this single stroke, the CFA effectively shifted the balance between free speech and protection of reputation decidedly in favour of the former, at a time when basic rights and freedoms were the cause of considerable anxiety in posthandover Hong Kong. The decision has implications for the wider common law world, and has already been cited and accepted as the law by English courts: see, for example, Branson v Bower [2002] QB
737 (QB) and Lowe v Associated Newspapers Ltd [2006] 3 All ER 357 (QB).

The final observation that space allows me to make, and a perhaps more interesting one, is that the CFA has demonstrated a decidedly pro-plaintiff, pro-rights tendency when deciding tort law appeals. A sample of statistics shows that of the 12 negligence and employees’ compensation cases concerning work-related personal injury, the plaintiff emerged the victor in 11, suggesting a judicial understanding of the unsatisfactory state of industrial safety law and practice in Hong Kong, and a judicial urge to right the balance; and looking at the defamation cluster, the plaintiff succeeded in only one in five of the cases, but this is saying nothing more than that the CFA ruled in favour of the exercise of free speech in four of the cases.

Rick Glofcheski
Associate Professor
The University of Hong Kong

Mark Daly on human rights

The retirement of Andrew Li CJ provides an opportunity to reflect on the Court of Final Appeal 1997-2010 and consider the future. My perspective is that of a human rights lawyer and practitioner before the court. The cases that my firm has litigated have involved issues of constitutional importance and/or fundamental human rights. I consider that the role of the court is to do justice, and I prefer the term ‘justice system’ as opposed to legal system or court system.

Can we achieve justice in our courts and in the Court of Final Appeal? Can we win? This seems to be the fundamental question, certainly for the practitioner, and before working towards an answer I wish to make a few initial observations.

The Hong Kong Court of Final Appeal is an enormously important court in the world today, given the collision with the legal system of mainland China; its reputation and position in the ‘region’; the importance of the rule of law in the Hong Kong SAR; and at times its function as a forum where ‘Asian values’, relativistic and universal values compete. I am fond of the quote from Professor Yash Ghai (from ‘Democracy, Development and Human Rights: Challenges for Lawyers’, Forum Asia and the Indonesian Legal Aid Foundation, 1995) in which he compares the roles of human rights in the West and in Asia:

“The role of human rights is to fine-tune the administrative and judicial system and fortify rights and freedoms that are largely uncontroversial. In Asia, on the other hand, human rights have a transformative potential.”

I believe that the Chief Justice has steered us capably through unique and difficult times when, because of the post-handover political uncertainty, perhaps a more conservative approach was deemed important when it came to human rights. But serious human rights problems remain and, for the future court, a more rights-conscious public is not going to be satisfied with a legal system that does not deliver practical justice. Concerns about the possibility of achieving justice are heightened when barriers to success in the courts are erected, such as the misuse of margin of appreciation and the increased
threshold for leave. The pressure on the future court to find a remedy is exacerbated by the fact that in Hong Kong there exists a democratic deficit and there is no ‘Strasbourg’.

My own view has been that the applicant has a better chance of success in the Court of Final Appeal, although it is not easy to get there. The danger for Hong Kong lies in the installation of further barriers so that human rights victims consider it futile to use the
courts.

Mark Daly
Partner
Barnes & Daly