Legislative Council

LC Paper No. CB(2)631/98-99
(These minutes have been seen
by the Administration)

Ref : CB2/PL/AJLS

Legislative Council
Panel on Administration of Justice and Legal Services

Minutes of Meeting
held on Tuesday, 20 October 1998 at 4:30 pm
in the Chamber of the Legislative Council Building


Members Present:

Hon Margaret NG (Chairman)
Hon Jasper TSANG Yok-sing, JP (Deputy Chairman)
Hon Martin LEE Chu-ming, SC, JP
Hon James TO Kun-sun
Hon Mrs Miriam LAU Kin-yee, JP
Hon Ambrose LAU Hon-chuen, JP
Hon Emily LAU Wai-hing, JP

Members Absent:

Hon Albert HO Chun-yan

Public Officers Attending:

Item I

Ms Elsie LEUNG, JP
Secretary for Justice

Mr Stephen LAM, JP
Director of Administration & Development

Mr R C ALLCOCK
Deputy Law Officer

Item IV(a)

Mrs Rebecca LAI
Acting Secretary for Financial Services

Mr Bryan CHAN
Principal Assistant Secretary (Financial Services)

Ms Carol YIP
Acting Deputy Secretary for Constitutional Affairs (1)

Mr I G M WINGFIELD, JP
Law Officer (Civil Law)

Mrs Carrie YAU, JP
Director of Administration

Ms Rosanna LAW
Assistant Director of Administration (2)

Items IV(b)

Ms Carol YIP
Acting Deputy Secretary for Constitutional Affairs(1)

Mrs Carrie YAU, JP
Director of Administration

Ms Rosanna LAW
Assistant Director of Administration (2)

Mr I G M WINGFIELD, JP
Law Officer (Civil Law)

Mr R C ALLCOCK
Deputy Law Officer

Mr Llewellyn MUI
Senior Government Counsel, Legal Policy Division

Attendance by Invitation:

Items IV

Hong Kong Bar Association

Mr Philip DYKES, SC

The Law Society of Hong Kong

Mr Raymond HO
Ms Teresa KO
Mr Jeremy PARR
Mr David STANNARD
Ms Patricia SHIH

Clerk in Attendance:

Mrs Percy MA
Chief Assistant Secretary (2) 3

Staff in Attendance:

Mr Jimmy MA
Legal Adviser

Mrs Justina LAM
Assistant Secretary General 2

Mr Paul WOO
Senior Assistant Secretary (2) 3



I. Briefing by the Secretary for Justice on the Chief Executive's Policy Address 1998
(Booklet on Policy Objective for Department for Justice; the Secretary for Justice's speaking note)

At the invitation of the Chairman, the Secretary for Justice ("SJ") addressed members on the Policy Objective of the Department of Justice, the progress made in the past 12 months on the various pledges made in previous years, and the new initiatives which the Department would implement in the coming years. A copy of SJ's speaking note was tabled at the meeting.

2. SJ then responded to questions raised by members.

Rule of law

3. Mr Martin LEE cited two incidents which, in his opinion, had cast doubt on SJ's remark that every member of the community remained equal in the eyes of the law, viz -

  1. the decision of the Government of the Hong Kong Special Administrative Region ("HKSARG") not to prosecute the Xinhua News Agency ("Xinhua") for failure to comply with the requirements in the Personal Data (Privacy) Ordinance (Cap. 486) ("Cap. 486") in dealing with a data access request made to it by Ms Emily LAU; and

  2. in relation to adaptation of laws, the legislative amendments passed by the Provisional Legislative Council in April 1998 which, by adapting references to "Crown" to "State" in section 66 of the Interpretation and General Clauses Ordinance (Cap. 1) ("Cap. 1"), allowed certain State organs not to be bound by the law. This was contrary to the spirit of Article 22 of the Basic Law ("BL") which provided that "All offices set up in the Hong Kong Special Administrative Region by departments of the Central Government, or by provinces, autonomous regions, or municipalities directly under the Central Government, and the personnel of these offices shall abide by the laws of the Region."

4. In response to (a) above, SJ said that under the Basic Law, the conduct of criminal proceedings was the sole responsibility of the Department of Justice. There were a number of factors which the Department of Justice had to take into consideration in deciding whether or not to launch a prosecution. These factors included, inter alia, whether there was sufficient evidence to justify criminal proceedings; whether there was a reasonable prospect of obtaining a conviction, and whether it was in the public interest to institute the proceedings. These principles had been observed in dealing with the Xinhua case. She advised that under the common law, every person had exactly the same right to institute a criminal prosecution as that of the Secretary of Justice or any one else. As regards the case referred to by Mr Martin LEE, it was inappropriate for her to comment at this stage as a private prosecution was now in progress.

5. On the matter of adaptation of laws, SJ said that the Decision of the Standing Committee of the National People's Congress on Treatment of the Laws Previously in Force in Hong Kong in accordance with Article 160 of the Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China adopted on 23 February 1997 set out the principles on which the previous laws were adopted and how various expressions inconsistent with the status of Hong Kong as a Special Administrative Region of the People's Republic of China ("PRC") were to be construed in accordance with the Basic Law. Such principles had been enacted as part of the local laws under the Hong Kong Reunification Ordinance. In line with such general principles, more detailed principles of interpretation had been added to Cap. 1. SJ said that adaptation of references to "Crown" to "State" in section 66 of Cap. 1 preserved the original meaning of the law and followed the common law principle.

6. Mr Martin LEE said that the reason for the "Crown" not bound by an Ordinance unless it contained an express provision that it was bound before 1 July 1997 was that Hong Kong was then a British colony. But Hong Kong was now a SAR of the PRC. BL 64 and BL 22 clearly provided that the HKSARG and all Mainland offices in the HKSAR must abide by the laws in the Region. In his view, it was wrong to replace the "Crown" with the "State" in section 66 of Cap. 1, thus placing Mainland offices and the HKSARG which were within the definition of "State" above the law. The adaptation in question violated the spirit of BL 22 and BL 64.

7. SJ replied that the adaptation of section 66 of Cap. 1 was consistent with BL 22. The fact that certain Ordinances bound certain classes of people or bodies and not the others should not be construed as a breach of the principle that all persons were equal before the law.

8. Mr Martin LEE pointed out that the Chief Executive had once mentioned that the Xinhua case involved a technical breach of Cap. 486. The Chairman and Mr LEE asked what was the meaning of a technical breach and whether a technical breach of the law was not subject to prosecution. SJ replied that there were provisions in Cap. 486 which set out specific circumstances under which the Privacy Commissioner for Personal Data might refuse to take action on a complaint, having regard to the circumstances of the case. In deciding whether or not to prosecute a particular case, SJ had to consider the merits of the case and other relevant factors including public interest. SJ referred members to the Booklet on "Prosecution Policy" published in March 1998 which spelt out the general principles and other considerations which the Department of Justice would have regard to in the decision to institute proceedings. She added that in normal circumstances the Department would not make public the reasons for not instituting prosecution in a particular case.

9. Ms Emily LAU expressed the view that the Government's decision not to prosecute Madam AW Sian and Xinhua had raised wide-spread concern both locally and elsewhere about whether the principle that all people were equal before the law was being upheld in Hong Kong. To allay public concern, she said that the Government should provide a detailed explanation of its decision in these two cases. Referring to the Xinhua case, she asked whether the fact that Xinhua fell within the definition of "State" was a consideration for the Government's decision not to institute prosecution.

10. SJ said that in the Xinhua case, the alleged breach of Cap. 486 took place before 1 July 1997 whereas the adaptation of section 66 of Cap. 1 took effect after the reunification. The Government's decision was in no way connected with the adaptation exercise. She added that a person's status was immaterial in the Government's decision to prosecute or otherwise. In further response to Ms LAU, she said that the Department of Justice had no intention to take over Ms LAU's private prosecution.

11. In relation to private prosecution, Mr James TO referred to a recent case in which a private prosecution against a Government officer for abuse of power was discontinued after being taken over by SJ, thus depriving the person an opportunity to pursue the prosecution on his own. Mr TO enquired of the principles governing SJ's decision to intervene in a private prosecution, with particular reference to the decision to take over a private prosecution and then bringing it to a halt. He opined that for public justice to be seen to be done, the individual concerned should have the right to decide whether or not to continue the private prosecution, even if SJ considered there were insufficient justifications for a public prosecution.

12. SJ replied that the Prosecution Policy had clearly set out that every private citizen had the right to initiate and pursue a private prosecution. SJ, however, had the power to take over, and continue or discontinue, a private prosecution under exceptional circumstances. She advised that in the particular case referred to by Mr TO, the Government had sought independent legal advice as the case involved proceedings against a public officer, and the advice was that prosecution should not take place. She said that the case was an extraordinary one involving vexatious litigation. The Government had fully considered the merits of the case and what it had done complied with the guidelines specified in the Prosecution Policy.

13. The Chairman said that even if a case involved vexatious litigation or abuse of legal process, it should be for the court to judge, instead of having it terminated by way of intervention of the SJ. In reply to the Chairman, SJ said that before taking over the case concerned and deciding to terminate the prosecution, the Department had obtained independent legal advice that the case should not be proceeded with.

14. SJ supplemented that to enable the Panel and members of the public to make a fair assessment of the Government's decision in the case mentioned, the Director of Public Prosecutions could brief members on the prosecution policy and related issues at a future meeting.

Appointments to senior posts in the Department of Justice

15. Referring to filling of senior posts in the Department of Justice, Ms Emily LAU cautioned that it might adversely affect public confidence in the integrity and independence of the legal system if individuals with strong political background were appointed. The Chairman added that the appointment of a public officer with political status might generate public concern about the officer's impartiality and independence in performing his duties.

16. SJ responded that a person's political views and status should not preclude the candidate from being considered for appointment to civil service posts. There were sufficient safeguards within the existing system to ensure that there would be no conflict of roles. Under the Civil Service Regulations which bound all civil servants, officers holding certain positions which were considered to be in conflict with the proper discharge of their public duties were required to give up those positions giving rise to such conflict. The Director of Administration & Development supplemented that selection of candidates for a specific post was based on factors including the person's ability, working experience and professional competence. The candidate's background would be taken into account to ensure that it would not lead to any conflict of interest.

17. In response to Mr Martin LEE's question on whether SJ had recommended a particular person to be the next Solicitor General, SJ said that the recruitment exercise had been conducted in strict accordance with Civil Service procedures. It was not for her alone to decide on the suitability of a candidate for appointment to a particular post.

Service of legal documents

18. The Chairman enquired about the progress relating to arrangements for service of legal documents between the HKSARG and the Mainland. SJ replied that discussion between the two sides had taken place. The Administration was discussing with Mainland counterparts how the Supreme People's Court could help coordinate the service of documents to and from other Mainland judicial bodies. She added that further discussion to finalise details would be held next month and it was hoped that a formal agreement to promulgate the arrangements would be initialled before the end of the year.

19. In reply to Mr Martin LEE's question, SJ said that at present, a party in the HKSAR could appoint a lawyer in the Mainland to serve legal documents there, and vice versa. She was not certain whether a local solicitor in Hong Kong could serve documents on a party in person in the Mainland.

Mutual legal assistance in transfer of criminal offenders

20. Referring to the recent Telford Gardens murder case, Mr James TO said that there had been reports that the authorities in PRC had refused to surrender the suspected murderer on the ground that the suspect was a Chinese citizen in the Mainland. He asked whether the HKSARG had sought for transfer of the suspect from the Mainland for trial in the HKSAR.

21. SJ responded that according to clause 7 of the Chinese Criminal Law, the PRC had extra-territorial jurisdiction over its nationals for criminal offences committed outside its boundary, if the offence in question was punishable by imprisonment of over three years. She believed that this provision applied in the Telford Gardens case. She further advised that whether a request should be made in individual cases for the return of fugitive offenders from another jurisdiction was a policy matter for the relevant Bureaux and Departments. In the absence of any agreement on transfer of offenders between the HKSAR and Mainland authorities, there was no legal basis for the HKSAR to make a request to the Mainland authorities for surrender of the suspect in question.

22. SJ supplemented that mutual legal assistance between the HKSAR and Mainland authorities had not been discussed by the Sino-British Joint Liaison Group before 1 July 1997 because the issue was then considered by the Chinese side to be an internal affair. The matter was now receiving urgent attention by the Security Bureau which was the responsible policy bureau. However, owing to the different legal systems between the HKSAR and the Mainland, particularly in relation to capital punishment, a bilateral agreement on arrangements for transfer of suspects across the border had yet to be reached. She emphasised that cross boundary crimes were a matter of great concern and both Governments were trying to work out the necessary arrangements for transfer of offenders. She stressed that any agreement would have to be in the interest of justice both in the HKSAR and the Mainland.

    (Post-meeting note: The subject of "Arrangements with the Mainland on surrender of fugitive offenders" will be discussed by the Panel on Security on 3 December 1998)

23. In reply to Ms Emily LAU's enquiry of whether some criminals had in fact been transferred from the Mainland despite the absence of a formal agreement, SJ said that the Security Bureau was in a better position to respond.

24. The Chairman thanked the SJ for addressing the Panel on the Policy Address.

II. Confirmation of minutes of meeting on 15 September 1998
(LC Paper No. CB(2) No. CB(2)428/98-99))

25. The minutes of meeting on 15 September 1998 were confirmed.

III. Items for discussion at the next meeting
(LC Paper No. CB(2)436/98-99(01))

26. Members agreed that the next regular meeting to be held on 17 November 1998 would discuss the following items -

  1. Creation of a new rank of Chief Court Prosecutor in the Department of Justice; and

  2. Prosecution policy.

IV. Review of binding effect of ordinances

  1. Binding effect of securities-related legislation on the Government
    2.  (LC Paper No. CB(2)436/98-99(03))

    27. At the invitation of the Chairman, Law Officer (Civil Law) ("LO(CL)") highlighted the information paper (LC Paper No. CB(2)436/98-99(03)) which summarised the purposes of the 12 securities-related Ordinances and set out their binding effect. He said that having gone through the relevant Ordinances, the Administration had concluded that the State, including the Government, was not bound by any of the Ordinances either by express provision or by necessary implication.

    28. Mr James TO said that following the Government's intervention in the securities and futures markets in August 1998 and in view of the substantial holding of shares the Government had acquired, the role of the Government had effectively shifted from that of a regulator to a "market-player". He asked whether the binding effect of the securities-related Ordinances should be reviewed, particularly in the context of whether these Ordinances should bind the Government by necessary implication.

    29. Drawing members' attention to section 135 of the Securities Ordinance (Cap. 333) which dealt with creation of false markets and trading on the Unified Exchange, Mr Martin LEE opined that the Government's activities in August might be caught by the provisions of that section, even if the purpose of the Government's actions was to "punish the foreign manipulators" as avowed by the Government. Mr LEE queried why the Government, by abandoning its expected role as a regulator, was not bound by necessary implication of the law in respect of its buying activities.

    30. LO(CL) responded that as a matter of law, it was the conclusion of the Administration that the Ordinances did not bind the Government. He said that the test given in the Privy Council decision in Province of Bombay v. Bombay Municipal Corporation [1974] AC 58 was that in the absence of an express provision, an intention of the law to bind the Crown could only be implied where "it was apparent (from the statute's term) that the beneficial purpose must be wholly frustrated unless the Crown were bound". He said that the term "market-player" did not accurately reflect the Government's intervention actions, the purpose of which was to ensure the stability of the currency market and the financial system of Hong Kong. In the special circumstances of the case in question, he did not see that the functioning of the law would be wholly frustrated if the Government was not bound. Hence the matter of binding effect by necessary implication did not arise.

    31. In response to the Chairman, Mr David STANNARD expressed the view that given the substantial shareholding held by the Government, the Government should be bound by the relevant statutory requirements such as the disclosure of interests rules. Otherwise it would prejudice the interests of other private sector investors who were entitled to know whether there were substantial shareholders of the companies whose shares had been actively traded at the time. This would defeat the fundamental intent underlying the relevant Ordinances which was to ensure a level playing field for all investors in the interests of the market as a whole. Mr STANNARD's view was shared by Ms Emily LAU. She asked whether the relevant Ordinances should be amended to take into account the new role performed by the Government which departed from its ordinary role as a regulator.

    32. At the invitation of the Chairman to respond, Acting Secretary for Financial Services ("S for FS (Ag)") said that in launching operations in the markets in August, the Financial Secretary had exercised his powers in accordance with the provisions under the Exchange Fund Ordinance (Cap. 66). Given the strong indication of cross-market manipulation activities which seriously threatened the integrity and stability of the local financial market at that time, the purpose of the Government's actions was to restore the order of the markets to safeguard the public interests. The Government considered that under the special circumstances at the time, disclosing details of the stock portfolio acquired by the Government would undermine the effectiveness of its actions.

    33. S for FS (Ag) added that one had to look at the consequences of Government's actions to decide whether any amendment to the law was warranted, or whether public concern could be better addressed by other means. She advised that the Administration had explained to the Legislative Council ("LegCo") the background to and rationale for its actions, which was supported by the majority of LegCo Members. She further advised that the Government was in the course of setting up a company to manage its stock portfolio. That company would be established under the Companies Ordinance and would be subject to the requirements of the relevant Ordinances in the same way as any other companies engaging in similar business in Hong Kong.

    34. In reply to Ms Emily LAU's question, S for FS (Ag) said that the Land Fund as part of the Government's reserves had held local and overseas shares as part of its assets.

    35. In response to the Chairman, Mr Philip DYKES said that in his opinion, the motive behind the Government's intervention in the markets was irrelevant in considering whether or not an ordinance should bind the Government. He pointed out that one should consider the subject matter of the Government's activity; whether it was a distinct governmental role or merely an ordinary contractual function to which the basic contractual principles applied. He opined that engaging in buying and selling activities in the securities market did not seem to be a normal function of the Government but an ordinary economic activity. If the Government chose to conduct itself in such activities, one might tend to think that it should also be amenable to the supervision of the legislation which regulated those activities.

    36. LO(CL) responded that by virtue of section 66 of Cap. 1, whether the law bound the Government was not related to the functions to be performed by the Government under specific circumstances. The binding effect of the law on the Government also differed from that of an ordinary contractual obligation. He said that the conclusion that the securities-related Ordinances did not bind the Government was consistent with the principles of common law which applied in Hong Kong.

    37. In response to the Chairman, Mr Raymond HO said that the existing provisions of the Exchange Fund Ordinance (Cap. 66) did confer the power on the Government to use the Fund under justifiable circumstances. Furthermore, it was established under common law that the Crown was not bound by legislation except by express provisions of the law or by necessary implication. There were no express provisions in the securities-related legislation which provided that the Government was bound thereby. He opined that it was a matter for the LegCo to decide at the end of the day whether or not these Ordinances should be amended such that they should also bind the Government.

  2. Ordinances binding on the Government but not on relevant PRC organs

    3. (LC Paper Nos. CB(2)415/98-99(01); CB(2)415/98-99(02); CB(2)415/98-99(03); CB(2)436/98-99(02))

    38. Director of Administration (D of A) informed the meeting that the Administration had completed the preliminary review of the 17 Ordinances that expressly bound the "Government", but were otherwise silent on their applicability to "State organs" in Hong Kong. The preliminary results of the review were that, as a matter of policy, the State organs and their personnel should abide by the following 15 Ordinances -

    1. Gas Safety Ordinance (Cap. 51)

    2. Occupational Safety and Health Ordinance (Cap. 509)

    3. Sex Discrimination Ordinance (Cap. 480)

    4. Disability Discrimination Ordinance (Cap. 487)

    5. Family Status Discrimination Ordinance (Cap. 527)

    6. Ozone Layer Protection Ordinance (Cap. 403)

    7. Dumping at Sea Ordinance (Cap. 466)

    8. Marine Parks Ordinance (Cap. 476)

    9. Environmental Impact Assessment Ordinance (Cap. 499)

    10. Plant Varieties Protection Ordinance (Cap. 490)

    11. Patents Ordinance (Cap. 514)

    12. Registered Designs Ordinance (Cap. 522)

    13. Arbitration Ordinance (Cap. 341)

    14. The Legislative Council Commission Ordinance (Cap. 443)

    15. Mandatory Provident Fund Schemes Ordinance (Cap. 485)

    39. D of A said that the Administration would work on the 15 Ordinances to consider the amendments required. During the process, the Administration would also examine whether the proposed amendments should include any exemptions.

    40. D of A added that the Social Workers Registration Ordinance (Cap. 505) only applied to individuals (i.e. social workers) and not their employers. As such, it had no relevance to either the "Government" or "State organs". The remaining Ordinance under review, i.e. the Personal Data (Privacy) Ordinance (Cap. 486) was more complicated. The Administration had to examine this Ordinance carefully before making any recommendations.

    41. Mr James TO enquired if matters relating to national security would be a factor to be considered in providing exemptions, if any, to Cap. 486. D of A undertook to report back to the Panel as soon as the review of the Ordinance was completed. Adm

    42. In reply to Mr Martin LEE, D of A said that there were 36 Ordinances which were applicable to "Government" but were silent on their applicability to the State organs, as set out in LC Paper No. CB(2)436/98-99(02). She said that the Administration would be happy to explain details relating to these Ordinances if members so wished.

    43. The Chairman requested the Administration to give in due course the reasons for the recommendation that the Ordinances listed in paragraph 38 above should now bind the State organs and their personnel, as well as the progress of the overall review exercise including the review of Cap. 486. Adm

V. Special meeting

44. Members agreed that a special meeting should be held on 2 November 1998 at 4:30 pm to discuss the following items -

  1. Review of ordinances binding on the Government but not on relevant PRC organs; and

  2. Adaptation of Laws Programme

45. There being no other business, the meeting ended at 6:50 pm.


Legislative Council Secretariat
16 November 1998