EC(1999-2000)11

For discussion
on 19 May 1999

ITEM FOR ESTABLISHMENT SUBCOMMITTEE
OF FINANCE COMMITTEE

HEAD 46 - GENERAL EXPENSES OF THE CIVIL SERVICE
Subhead 009 Recoverable salaries and allowances
(Land Registry Trading Fund)
    Members are invited to recommend to Finance Committee the retention of the following supernumerary post under the Land Registry Trading Fund for a period of four years from 21 June 1999 -

      1 Deputy Principal Solicitor
      (DL2) ($116,650 - $123,850)

      offset by the deletion of the following permanent post -

      1 Senior Solicitor
      (MPS 45 - 49) ($76,485 - $88,115)

PROBLEM

The existing supernumerary post of Deputy Principal Solicitor (DPS) (DL2) will lapse on 21 June 1999. The Land Registrar needs the continued support of a legal officer at directorate level to implement the title registration system under the Land Titles Bill.

PROPOSAL

2. We propose to retain the supernumerary post of one DPS (DL2) for four years from 21 June 1999 to assist the Land Registrar to finalise the drafting of the Land Titles Bill, to steer the Bill through the Executive Council and the Legislative Council and to plan and prepare for implementation of the title registration system.

JUSTIFICATION

3. We originally planned to introduce the Land Titles Bill into the Legislative Council in March 1999. The Secretary for the Civil Service has approved under delegated authority the creation of one supernumerary post of DPS in the Land Registry for a period of six months up to 20 June 1999 to undertake preparatory work prior to implementation of the Bill and to oversee the Legal Division of the Land Registry Trading Fund (LRTF), which has three Senior Solicitors and one Solicitor. The DPS is also responsible for advising the Land Registrar on the legal aspects of the operation of the Land Registry as a trading fund and liaising with the Department of Justice and other government departments and policy bureaux for this purpose.

4. Since the creation of the post in December 1998, with the assistance of the DPS, the Land Registrar has consulted a number of interested parties, including the Law Society of Hong Kong, the Hong Kong Bar Association, the Heung Yee Kuk, the Consumer Council, the Hong Kong Association of Banks, the Real Estate Developers Association and the Hong Kong Institute of Surveyors. In addition, the Land Registrar and the DPS have arranged for briefings for interested associations and groups, including the Lands and Buildings Advisory Committee, various Legislative Councillors and the Legislative Council Panel on Planning, Lands and Works. The DPS has collated and analysed the views and comments received from the parties concerned during the consultation and briefing exercises.

5. In order to gain further insight into how a title registration system would operate in Hong Kong, the DPS has also been gathering information on the operation of land title systems in other jurisdictions. The DPS has consulted 15 jurisdictions which have a title registration system, including England and Wales, a number of Australian states, Singapore, Toronto, New Zealand and Shanghai, and is now assessing the information obtained.

6. Due to the complexity of the Bill, we have yet to complete the consultation exercise. The feedback we have received so far reveals some general concerns about certain provisions of the Bill, particularly those relating to the indemnity fund, the conversion arrangements and the treatment of property in fraud cases. We are now reviewing the draft Bill in the light of the comments received and will conduct further research on land title systems elsewhere before conducting a fresh round of consultations with key stakeholders. We now plan to introduce the Bill into the Legislative Council in 2000. In the meantime, the Land Registrar needs the support of the DPS beyond 21 June 1999 to help steer the Land Titles Bill through the Executive Council and to prepare for submission to the Legislative Council, to draft the Land Titles Regulations and related subsidiary legislation on the assumption that the Bill would be enacted in late 2001 and brought into operation by late 2002. The legal officer is also required to draft new procedures and forms governing the operation of property conveyancing and ownership in Hong Kong, to consult the Law Society and other bodies on the new procedures, to explain the Bill and the associated regulations to the media, to prepare the Land Registry for dealing with the legal aspects of implementing the Land Titles Bill and to undertake training of staff. The DPS would also be required to examine the feasibility of title insurance for Hong Kong and to advise whether it should be adopted as part of the title registration system.

7. In view of these commitments, we consider that there is a need to continue the tenure of the existing DPS with the necessary drafting, conveyancing, operational, negotiating and management skills and experience. We therefore propose that the supernumerary post of DPS (DL2) be retained for a period of four years from 21 June 1999. The DPS will provide legal support for the planning and steering of the Land Titles Bill, including all aspects of work described in paragraph 6 above, up to late 2002 when the Bill is expected to be brought into operation. After the Bill is in operation, the DPS would render legal support for the implementation of the Land Titles Bill, particularly with regard to the payment of indemnity, up to June 2003. We shall review the need for directorate support in early 2003. In the event that the Executive Council or Legislative Council does not support the Land Titles Bill, we will delete this supernumerary post upon withdrawal of the Bill.

8. An organisation chart of the Land Registry and a job description of the DPS are at Enclosures 1 and 2 respectively. Encls.1 & 2

9. We have considered the implications of the Enhanced Productivity Programme and propose to offset the retention of the DPS post by deleting a Senior Solicitor post in the Land Registry. After deletion of the Senior Solicitor post, other members of the Legal Division will absorb the existing duties of the Senior Solicitor.

FINANCIAL IMPLICATIONS

10. The additional notional annual salary cost of this proposal at mid-point is -

$No. of Posts
Supernumerary post to be retained
DPS (DL2) 		1,443,0001
Permanent post to be deleted
Senior Solicitor (MPS 45 - 49) 		985,2601
Additional Cost 457,7400

11. The additional full annual average staff cost of the proposal, including salaries and staff on-costs, is $823,932.

12. In addition, this proposal will necessitate the retention of one non-directorate post of Personal Secretary I at a notional annual mid-point salary cost of $291,840 and a full annual average staff cost of $408,576.

13. The funding requirement to implement the above proposal represents 0.3% of the estimated total recurrent expenditure of the Land Registry. Therefore, the proposal will have minimal impact on fees.

14. Sufficient provision is available under the 1999-2000 Land Registry Trading Fund Business Plan to cover the costs of the proposal.

BACKGROUND INFORMATION

15. The Land Registrar is the General Manager of the LRTF established under the Trading Funds Ordinance to operate on a self-financing basis. The Land Registrar is responsible to the Secretary for Planning, Environment and Lands for the performance of the LRTF and for advising on policies and legislative issues concerning land registration and the registration of title to land. The LRTF is responsible for maintaining an efficient and effective land registration and search system to facilitate the orderly conduct of land transactions.

16. Hong Kong has operated on a deeds registration system for over 150 years. Drawing on the experience of the common law jurisdictions that have moved from deeds registration to title registration, we consider that the introduction of a title registration system in Hong Kong would bring about the advantages of certainty of title, simplified conveyancing procedures and provision of guarantee of title by Government. This system of title registration is the practice in many common law jurisdictions and would bring Hong Kong into line with such jurisdictions.

17. At the Finance Committee meeting on 25 February 1994, Members approved the creation of the supernumerary post of DPS (EC(93-94)60) to take over from the former Registrar General (D7) responsibility for finalising and introducing the Land Titles Bill into the Executive Council and Legislative Council, and undertaking preparatory work for implementation of the new legislation. The Bill was introduced into the Legislative Council on 16 November 1994 and a Bills Committee and a technical sub-group were formed to examine the Bill, but their work was curtailed in July 1995 when the legislative session ended. The supernumerary post subsequently lapsed on 1 July 1996.

18. Since July 1995, the Land Registrar has carried out further consultations with the Law Society and other interested bodies such as the Consumer Council, the Bar Association, the Society of Accountants, and the Association of Banks and revised the Bill in the light of the comments received.

The Law Society, while voicing certain concerns on the Land Titles Bill, has given support in principle to the title registration system.

19. We consulted the LegCo Panel on Planning, Lands and Works on the proposal in this paper on 15 April 1999. Members of the LegCo Panel had no objection to the proposal.

CIVIL SERVICE BUREAU COMMENTS

20. Having regard to the justifications put forward, the level of responsibility and the complexity of the Bill, Civil Service Bureau supports the retention of the proposed supernumerary directorate post in the Land Registry. The grading, ranking and duration of the proposed post are considered appropriate.

ADVICE OF THE STANDING COMMITTEE ON DIRECTORATE SALARIES AND CONDITIONS OF SERVICE

21. As we propose to retain the DPS post on a supernumerary basis, we shall report the arrangement, if approved, to the Standing Committee on Directorate Salaries and Conditions of Service in accordance with the agreed procedure.

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Planning, Environment and Lands Bureau
May 1999

Enclosure 1 to EC(1999-2000)11

Proposed Organisation Chart of Land Registry Land Registrar

Enclosure 2 to EC (1999-2000)11

Job Description
Deputy Principal Solicitor/Land Registry

Rank : Deputy Principal Solicitor (DL2)

Major Duties and Responsibilities -

Responsible to the Land Registrar for the following main duties and responsibilities -

  1. To assist the Secretary for Planning, Environment and Lands and the Land Registrar in steering the Land Titles Bill and subsidiary legislation through the Executive Council and the Legislative Council.

  2. To draft the Land Titles Regulation and related subsidiary legislation of the Land Titles Ordinance in consultation with the Law Draftsman.

  3. To update the numerous consequential amendments to other legislation arising from the Land Titles Bill and the Land Registrar's proposal to introduce Central Registration, and to update the Solicitors Guide on the Land Titles Ordinance for use by Law Society Members and the Registration Manual on the Land Titles Ordinance for use by Land Registry staff.

  4. To consult the Law Society and other professional bodies on the amended Land Titles Bill, the draft Land Titles Regulation, and other legislation amended consequential to the Land Titles Bill and Land Titles Regulation.

  5. To plan for, and organise the legal aspects for implementing the Title Registration System. This includes drafting new conveyancing legal documents, statutory forms and prescribed forms, and devising a new set of registration procedures in compliance with the Land Titles Bill and other relevant legislation, in consultation with the Law Society of Hong Kong. These documents, forms and procedures together with the Land Titles Regulation will govern the entire operation of property conveyancing and property ownership in Hong Kong.

  6. To conduct research into, and advise on the arrangements for, an indemnity fund under the Title Registration System; this is a particularly important aspect as the indemnity provisions of the Land Titles Bill will substantially increase the Land Registrar's liabilities and responsibilities.

  7. To examine issues of title insurance and to advise whether such insurance should be part of the title registration system in Hong Kong.

  8. To head the Land Registry's Legal Division, and provide legal advice to the Land Registrar on the effect of the land title legislation on land registration processes and training programmes in the operation of the new legislation.

  9. To advise the Land Registrar on the legal aspects of the operation of the Land Registry as a trading fund, and to liaise with the Department of Justice and other government departments and policy bureaux for this purpose.

  10. Any other duties assigned by the Land Registrar.