Legislative Council

LC Paper No. CB(2) 1815/98-99

Ref.: CB2/H/1

Background

At the last House Committee meeting on 23 April 1999, it was proposed that a subcommittee be formed to pursue the matter of whether notices on the maximum fares for licensed ferry services were subsidiary legislation, and also to consider further the case for a judicial review. Members requested a paper be prepared to facilitate the House Committee's consideration of the proposal.

Report of the Transport Panel

2. The Transport Panel reported to Members at the last House Committee meeting that given the difference in legal opinions between the Administration and the Legal Adviser, it could not reach a common view with the Administration on whether notices on the maximum fares for licensed ferry services issued by the Commissioner for Transport under section 33(1) of the Ferry Services Ordinance (Cap. 104) were subsidiary legislation.

3. The Panel also drew Members' attention to the fact that there were many provisions in current legislation which contained reference to "by notice in the Gazette" and that there had not been consistency in treatment in that some were published as legal notices while some as general notices. The Panel considered that a clear distinction should be made in the relevant legislation between instruments of a legislative character, and those of an administrative character. The Administration had advised that the matter was under examination by the Department of Justice.

4. Subsidiary legislation is defined under section 3 of the Interpretation and General Clauses Ordinance (Cap 1) as "any proclamation, rule, regulation, order, resolution, notice, rule of court, bylaw or other instrument made under or by virtue of any Ordinance and having legislative effect". However, there is no direct legal authority on the precise meaning of "having legislative effect". The Administration has advised that based on case references in other common law jurisdictions, certain factors or criteria are relevant in determining whether an instrument has legislative effect.

5. The Administration holds the view that notices under section 33(1) of Cap. 104 do not have legislative effect. They are published as general notices and need not be tabled in Council. The Legal Adviser advises that such notices have legislative effect and should be published in the form of legal notices and be subject to the "negative vetting procedure" of the Council under section 34(1) and (2) of Cap. 1. The arguments put forward by both sides are summarized in the Appendix for Members' easy reference.

6. Members may wish to note that notices on the maximum fares for licensed ferry services under section 33(1) of Cap. 104 have always been published in the form of a general notice while an order made by the Chief Executive in Council under section 19(1) of the same Ordinance for determining the maximum fees chargeable on franchised ferry services is treated as subsidiary legislation. Since the Administration has replaced franchised ferry services by licensed ferry services, it means that fare adjustment proposals from ferry operators will no longer be subject to the "negative vetting procedure" of the Council.

The Way Forward

7. At the last House Committee meeting, some Members proposed that a subcommittee be formed to pursue further the matter of the legal procedures for the determination of maximum fares of licensed ferry services, including examining further the case for a judicial review. These Members expressed concern about the Council's power to scrutinize such ferry fares being deprived of, if notices under section 33(1) of Cap. 104 had legislative effect and should be published as subsidiary legislation. However, other Members had reservation about the proposal, pointing out that given such terms of reference, the subcommittee would largely be repeating the Transport Panel's earlier work on the matter. Members agreed to defer a decision on the proposal to the House Committee meeting on 30 April 1999.

8. In considering the way forward, Members are invited to note that the deliberations on whether notices under section 33(1) of Cap. 104 are subsidiary legislation have served to raise a much broader and more fundamental issue of whether the existing legislative mechanism for the Legislative Council to monitor the exercise of power to make subsidiary legislation should be examined in order to provide a clear means of identifying which of the instruments with legal effect made by persons under delegated authority provided by statute should be subject to the Council's scrutiny and intervention. In fact, at the last House Committee meeting, there was a suggestion that the issue should be followed up by the Constitutional Affairs Panel.




Legislative Council Secretariat
29 April 1999

p-subleg

Appendix

Relevant factors for determining whether an instrument made under an ordinance is "having legislative effect"	Administration's view	Legal Adviser's view
There is an express statutory provision in identifying the instrument as subsidiary legislation.	There is no such express provision in the Ferry Services Ordinance (Cap. 104).	No reference to this factor has been made in case law.
The instrument extends or amends existing legislation.	The Commissioner's determination of maximum fares does not amend or extend the Ordinance.	Such notice has the effect of determining or extending the content of section 33(1) as a rule of conduct or declaration as to power, right or duty on the part of the licensee and members of the public who use or propose to use the service.
The instrument has general application to the public or a class, and formulates a general rule of conduct.	A notice under section 33(1) of Cap. 104 does not have general application nor does it formulate a general rule of conduct. It only applies or extends to, or otherwise binds, the licensee. The rights and obligations of the user depend on the terms and conditions of the contract between them; such rights and obligations have neither been extended nor reduced by the Ordinance.	(a) Such notice imposes a legal obligation on a licensee not to charge a fare exceeding the maximum fares as determined by the Commissioner; moreover, such notice confers an enforceable right, or at least a legitimate expectation, on members of the public to use the ferry service at a fare not exceeding the maximum fares determined by the Commissioner. (b) The relationship between a licensee and the users, insofar as the provision of service is regulated by statute, is not purely contractual; the Commissioner, who as a public officer, is under a duty to take necessary action to ensure that the ferry service is available to the public at a fare not exceeding the maximum level determined under section 33(1) and the licensee is liable to be prosecuted for charging in excess of the maximum fares. A notice under section 33(1) affects the interests of all members of the public who use or propose to use the service.
The legislative intent is that the instrument is subsidiary legislation	The legislative intent of the provision is to empower the Commissioner as the only person to determine the maximum fares for licensed services. Since the passage of the Ferry Services Bill in 1982, determinations of maximum fares for licensed ferry services have been effected as executive acts.	Had the legislature intended that the determination of the maximum fares to be administrative in nature, it would not have been necessary to include a separate section 33(1) when section 28(2)(b), which provides that a licensee shall be subject to conditions as the Commissioner may specify, is sufficiently wide to include maximum fares chargeable as one of the conditions. Section 33(1) is drafted in similar manner as section 19(1). Orders made under section 19(1) have been treated and published as subsidiary legislation.

s-cb21815A