At the invitation of the Chairman, Mr R ALLCOCK briefed members on why the Administration considered it permissible to add the relevant amendments to the Bill by way of Committee stage amendment (CSA) (as set out in his letter dated 4 November 1996 which had been issued to members vide LegCo Paper No. CB(2) 359/96-97). He urged members not to consider the merits of the amendment at the present stage but only the question as to whether the amendment was in order or not. If the amendment was ruled as out of order, the Administration would introduce a separate bill and wished that the House Committee would refer that bill to the existing Bills Committee. Mr ALLCOCK added that the ruling to be made by the LegCo President would have significant implication for CSA to other bills in the future.

2. The Chairman then invited views from members on the matter. In this connection, Miss Margaret NG declared an interest as a practising barrister. She pointed out that the Bill was an 18-purpose Bill, not an omnibus bill as suggested by the Administration. There was a fine difference between the two. The proposal regarding rights of audience was not contained in the Bill. She therefore inclined more towards not to accept it as within the scope of the Bill. Miss NG explained that rights of audience were granted by the court. If the two branches of the legal profession could agree on areas in which rights of audience could be extended, in the interest of the clients as well as that of the public, and if such agreement was accepted by the court, permitting solicitors to acquire extended rights of audience could still proceed without legislation. However, Mr ALLCOCK reminded members that the two branches of the legal profession differed to a very large extent on the matter. The Hong Kong Bar Association opposed a general extension of the rights of audience to solicitors. Mrs Selina CHOW also cast doubt on whether the subject matter of the proposal was related to the Bill. She felt it necessary to seek a private ruling from the President on whether the proposal fell within the scope of the Bill before the Bills Committee could consider the merits of the proposal. Mr Howard YOUNG pointed out that "rights of audience" was a subject of importance which would call for considerable attention of members and he considered that it should be introduced under a separate bill, for members to consider whether a separate Bills Committee (with separate membership) should be formed to study it, or additional membership to the Bills Committee should be called for.

3. The Chairman asked and Legal Adviser advised that former rulings made by the President were not binding precedents. Each proposal should be studied on its own merits, in the light of its background and circumstances. In this case, the Administration which initiated such proposal would need to provide full justifications for the President to make a ruling, especially when some members had expressed reservation on its procedural propriety. Nevertheless, the President would have regard to the view of the Bills Committee in making a well-informed decision. He reminded members that no party had ever raised formal objection from the procedural angle for the amendments to be included in the Prevention of Bribery (Miscellaneous Provisions) Bill 1995 in the course of studying proposed amendments to section 30 of the Ordinance, and the President had not been requested to give a procedural ruling.

4. After discussion, the Bills Committee decided that the Administration should seek a private ruling from the President on the procedural propriety of its proposal. Members agreed to adopt no stance on it.

(Post-meeting notes : The Administration asked and the President subsequently gave a private ruling that the proposed amendment to permit solicitors to acquire extended rights of audience exceeded the scope of the Bill and might not be proposed to the Bill.) Adm

II.Meeting with the Action Committee

Solicitor corporations and Foreign lawyer corporations

(LegCo Paper No. CB(2) 483/96-97)

5. At the invitation of the Chairman, Mr David GLYNN said that although the Action Committee did not object to the proposal on solicitor corporations in principle, it did oppose the hasty way by which such an important and complicated area of law was dealt with in the Bill. The Action Committee was of the view that the issue should be referred to an objective, knowledgeable and independent commission with expertise for a careful and proper examination because: (a) there was no urgency of the issue and demand from the public as well as the legal profession for its implementation; and (b) the proposals had important and far-reaching impact and all the outstanding questions regarding their implementation remained largely unresolved.

6. Messrs GLYNN and Anthony SHIN then proceeded to brief members on their submission on solicitor corporations and foreign lawyer corporations which was subsequently issued to members vide LegCo Paper No. CB(2) 804/96-97 on 24 December 1996. In this connection, Mr Andrew CHENG asked and Mr SHIH agreed to provide a brief comparision of the Bill with relevant legislation in Australia in respect of solicitor corporations for members information.

(Post-meeting notes : The Action Committee has provided the brief comparision of the Bill with relevant provisions of the legislation in Australia which was attached to LegCo Paper No. CB(2) 804/96-97).

Action
Committee

7. Mr Ronald ARCULLI referred to the Solicitors Incorporated Practice Rules prepared by the Law Society of England and asked what was the purpose of the compensation fund covenant to the Law Society by a solicitor corporation. Mr GLYNN explained that the effect of the covenant would be that the costs of grants paid from the Compensation Fund in respect of the practice would in certain circumstances be recoverable from its shareholders. Mr ARCULLI then remarked that such an effect might defeat the purpose of limited liability of a solicitor corporation.

8. Mr Ronald ARCULLI also asked whether the Action Committee had considered limiting the liability of a solicitor for individual case in lieu of solicitor corporations, i.e. by setting a ceiling to the liability in coveyancing transaction for each claim. Mr GLYNN said that the Action Committee had not considered such an approach. However, he remarked that clients with claims exceeding the ceiling would not be adequately protected.

Invalidation of contractual provision requiring purchaser to pay costs of vendor

(LegCo Paper No. CB(2) 613/96-97)

9. At the invitation of the Chairman, Mr Jeff TSE and Ms Melissa PANG briefed members on their submission on invalidation of contractual provision requiring purchaser to pay costs of vendor (Clause 18 of the Bill) as attached.

10. Mr Ronald ARCULLI asked whether Clause 18 would apply to existing contracts, in the view of the Action Committee, which would not only be an intervention of the freedom of contract but also an alternation of contract. Mr Jeff TSE drew members attention to section 5 of Schedule 3 in the Bill which stated that section 34A of the Conveyancing and Property Ordinance (Cap. 219) did not apply to an agreement for the sale and purchase of undivided shares in land if the agreement was entered into before the commencement of that section. He therefore took the view that Clause 18 should not apply to existing contracts. Mr ARCULLI reminded members that section 5 of Schedule 3 only dealt with an agreement for sale and purchase of undivided shares in land whereas Clause 18 also gave a right to exclusive occupation of unit or other interest in uncompleted or completed development of the land. Mr TSE remarked that it might only be a matter of drafting and there was no difference in substance between section 5 of Schedule 3 and Clause 18.

11. Mr Howard YOUNG asked and Mr Jeff TSE responded that the Action Committee preferred that no further action be taken on the Bill if no thorough and proper study could be undertaken on its implications which could be far-reaching because Hong Kong could not afford to make such an irreversible mistake.

III.Dates of future meetings

12. The Chairman reminded members that the next meeting would be held on Tuesday, 7 January at 2:30 pm to meet Mr Robert SAYER, the then Vice-President of the English Law Society. Members further agreed to schedule the following meetings:

Thursday, 9 January 1997 at 8:30 am to meet Mr Winston CHU on abolition of scale fees for conveyancing work and to meet Mr TSE Lin-chung on the Bill separately; and
Friday, 17 January 1997 at 8:30 am to meet the Hong Kong Bar Association on the Bill, in particular the proposed provisions relating to the new status of Senior Counsel, the Barristers Disciplinary Tribunal and the solicitor corporations.

13. The meeting ended at 6:50 pm.

LegCo Secretariat
2 January 1997

Last Updated on 27 October 1997

Minutes of the Sixth Meeting of the Bills Committee on the Legal Services Legislation (Miscellaneous Amendments) Bill 1996

held on Tuesday, 10 December 1996 at 4:30 pm in Conference Room A of the Legislative Council Building

I.Meeting with the Administration

Proposed Committee stage amendment on "Rights of Audience"

II.Meeting with the Action Committee

Solicitor corporations and Foreign lawyer corporations

Invalidation of contractual provision requiring purchaser to pay costs of vendor

III.Dates of future meetings

Minutes of the Sixth Meeting of the Bills Committee
on the Legal Services Legislation (Miscellaneous Amendments) Bill 1996

held on Tuesday, 10 December 1996 at 4:30 pm
in Conference Room A of the Legislative Council Building