Legislative Council

LC Paper No. LS 54/98-99

Paper for the House Committee Meeting
of the Legislative Council
on 30 October 1998

Legal Service Division Information Paper on
Maximum Fares for the Licensed Ferry Service
between Central and Tsuen Wan via (Tsing Yi)
(Under G.N. 4547 gazetted on 18 September 1998)

Maximum Fares for the Licensed Ferry Service
between Discovery Bay and Chek Lap Kok
(Under G.N. 5086 gazetted on 23 October 1998)

This is an information paper which sets out the background and the legal analysis relating to the above General Notices to assist Members in their consideration of item No. VI on the agenda of the House Committee meeting on 30 October 1998.

Background

2. Under section 28(1) of the Ferry Services Ordinance (Cap. 104), the Commissioner for Transport (the Commissioner) may if he thinks fit grant to any person a licence to operate a ferry service between such points as may be specified in the licence. Section 33(1) of Cap. 104 provides that the Commissioner may by notice in the Gazette determine the maximum fares that may be charged for the carriage of passengers, baggage, goods and vehicles on any licensed service.

3. In exercise of the power under section 33(1) of Cap. 104, the Commissioner has given two notices determining respectively the maximum fares for the licensed ferry service between Central and Tsuen Wan via Tsing Yi (G.N. 4547 gazetted on 18 September 1998) and for the licensed ferry service between Discovery Bay and Chek Lap Kok (G.N. 5086 gazetted on 23 October 1998). G.N. 4547 and G.N. 5086 have taken effect from 20 September 1998 and 23 October 1998 respectively.

4. As G.N. 4547 had not been published in form of a legal notice, it was not laid on the table of the Legislative Council at the meeting on 23 September 1998. Accordingly, section 34 of the Interpretation and General Clauses Ordinance (Cap. 1) could not be brought into operation. However, Members may note that notice of this kind has been published in form of a general notice in the Gazette.

Legal Analysis

5. Under section 34 of Cap. 1, all subsidiary legislation shall be laid on the table of the Legislative Council at the next sitting after the publication in the Gazette of that subsidiary legislation. Therefore, if a notice given under section 33(1) of Cap. 104 is subsidiary legislation, section 34 of Cap. 1 will apply and such notice will be governed by the negative procedure under section 34(1) and (2) of Cap. 1.

Definition of subsidiary legislation

6. Section 3 of Cap. 1 defines subsidiary legislation 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�

7. To determine whether a notice in the Gazette given by the Commissioner under section 33(1) of Cap. 104 is subsidiary legislation, it is necessary to decide whether such notice has legislative effect�

Definition of legislative effect

8. There is no direct authority on the precise meaning of having legislative effect. However, there are cases in the Commonwealth jurisdictions in which judges have expressed opinions on the meaning of those words. These opinions are not binding on the courts in Hong Kong. According to these opinions, it would appear that an instrument having legislative effect is one made under or by virtue of an Ordinance that :

  1. has the effect of determining the content of the law, rather than applying the law in a particular case; and

  2. has the direct or indirect effect of affecting a privilege or interest, or imposing an obligation, creating a right, or varying or removing an obligation or right of persons generally or of persons of a specified class.


Administration's view

9. The Administration is of the view that a notice under section 33(1) of Cap. 104 does not have legislative effect and is purely administrative in nature for the following reasons :-

  1. as the fares of licensed service have never been part of the Ordinance, the notice under section 33(1) does not amend or extend the Ordinance;

  2. the notice imposes an obligation on the ferry service licensee not to charge a fare in excess of the maximum fares determined by the Commissioner. It does not have general application to the public, a class or to a significant section of the public;

  3. there is no express provision in the Ordinance that identifies the notice as being subsidiary legislation; and

  4. the fact that orders made by the Chief Executive in Council under section 19(1) of the Ordinance have been treated as having legislative effect does not mean that notices under section 33(1) of the same Ordinance have such effect.


10. In arriving at this view, the Administration has adopted what it regards as commonly adopted�criteria for determining whether an instrument has legislative effect. These criteria are :-

  1. does the instrument extend or amend existing legislation?

  2. does the instrument have general application to the public or a class, or to a significant section of the public?

  3. does the instrument formulate a general rule of conduct without reference to particular cases operating in the future?


Our view

11. The criteria adopted by the Administration are worded in different terms from the criteria set out in paragraph 8 above. We are asking the Administration to provide us with the legal basis for the criteria it has adopted. Our analysis in this paper is based on the assumption that courts in Hong Kong will accept the opinions of judges as set out in paragraph 8 above and apply the same to the present case. On such basis, it seems likely for the courts to hold that a notice made by the Commissioner under section 33(1) of Cap. 104 has legislative effect for the following reasons :-

  1. such notice determines or extends the content of section 33(1); and

  2. apart from imposing an obligation on the ferry service licensee not to charge a fare exceeding the maximum fares as determined by the Commissioner, the notice obviously affects the interest of members of the public using the licensed service.


12. Whether a notice made under section 33(1) of Cap. 104 has legislative effect may also depend on the true construction of the Ordinance. Since the Hansard does not offer much assistance in ascertaining the legislative intent, we have to resort to the literal interpretation of the relevant sections. Under section 28(2)(b) of Cap. 104, a ferry service licence granted by the Commissioner shall be subject to such conditions as the Commissioner may specify. Such conditions would appear to be wide enough to include the maximum fares chargeable on a licensed service. In our view, had the legislature intended that the determination of the maximum fares chargeable on a licensed service is purely administrative in nature, it would not have been necessary to include a separate section in the Ordinance [section 33(1)], which makes express provision for determination of fares by notice in the Gazette.

13. The corresponding section in Cap. 104 relating to conditions governing a franchise [section 6(3)(b)] is worded in similar terms to section 28(2)(b) except that those conditions are specified by the Chief Executive in Council and some examples of conditions are given. Similar to section 28(2)(b), section 6(3)(b) makes no reference to the maximum fares chargeable as one of the conditions. However, section 19(1) provides that the Chief Executive in Council may by order determine the maximum fares chargeable on a franchised service. Such order has been published in form of subsidiary legislation and laid before the Legislative Council in accordance with section 34 of Cap. 1.

14. If the above construction is accepted by courts, it could be argued that the purpose of having a separate provision for determining the maximum fares chargeable on a franchised service or a licensed service is possibly to highlight the fact that fares are not purely a matter subject only to administrative decision. If it is accepted that an order made under section 19(1) of Cap. 104 has legislative effect and given the similarity in the effect of such order and a notice under section 33(1) of the same Ordinance, there appears no logical reason why the latter should not have legislative effect.

15. Although not forming part of our legal analysis, Members may wish to note that the determination of fares to be charged on vehicles operating under a passenger service licence issued by the Commissioner under the Road Traffic Ordinance (Cap. 374) is not subsidiary legislation. This is so because the relevant provision [section 29(1)(b)(viii)] in Cap. 374 expressly makes the fares to be charged one of the conditions of such licence to be specified by the Commissioner. The way that section is drafted suggests that the fares to be charged is purely an administrative decision made by the Commissioner.

Effect on validity if an instrument has not been laid before the Legislative Council

16. There is no direct authority on whether an instrument is legally valid if it has not been laid before the Legislative Council. Judges have expressed conflicting opinions on this issue. Opinions have been expressed by judges in England and Hong Kong that the requirement to lay an instrument before the legislature is not mandatory but directory only. According to these opinions, the legal validity of an instrument might not depend upon laying before the Legislative Council. On the other hand, there is a dictum to the effect that an instrument acquires legal validity only when it is laid before Parliament. In a more recent English case , the Court of Appeal expressed the view that a legislative command to lay an instrument before Parliament does not amount to a mandatory requirement. It was, however, assumed that a command to lay coupled with a provision for affirmative resolution was a strict and mandatory requirement.

17. In the absence of a clear court judgment on this issue, it remains uncertain as to whether an instrument would be rendered inoperative if it has not been laid before the Legislative Council. This is a difficult issue which needs to be resolved by the courts.

Conclusion

18. Following from the above analysis and subject to any further legal arguments that may be put forward by the Administration, there appears to be sufficient grounds to argue that the original intent of section 33(1) of Cap. 104 was that notices under that section have legislative effect.

19. In arguing the above proposition, we have taken into account the fact that notices under section 33(1) of Cap. 104 have hitherto been published in form of a general notice. It seems to be the case that both the Executive and the Legislature have not treated such notices as subsidiary legislation. However, such phenomenon should not be the only basis for determining what was intended by the said provision when it was enacted.

Recommendation

20. Apart from section 33(1) of Cap. 104, there are many other provisions in the existing laws which contain the reference to notice in the Gazette. In the absence of a clear and binding decision on the meaning of having legislative effect, there may be uncertainty as to whether every such notice is subsidiary legislation . Members may consider whether to refer this subject to the appropriate LegCo Panels for detailed study. For Members�information, the Transport Panel will discuss the legal procedure for adjustment in fares of licensed ferry services and the nature of notices made under section 33(1) of Cap. 104 at its meeting on 27 November 1998.



Prepared by

FUNG Sau-kuen, Connie
Assistant Legal Adviser
Legislative Council Secretariat
27 October 1998