D: The Hong Kong court’s reluctance to apply horizontal effect in private law.
Even thought the theoretical analysis above does not preclude the possibility of horizontal effect in Hong Kong, the case law during the past 20 years has shown that the Hong Kong court is reluctant to activate the horizontal effect in the disputation between private parties.
(a). Case law review
There are few cases in Hong Kong supporting the direct horizontal effect. It is worthy to mention a recent case Leung Sze Ho Albert v Bar Council of the Hong Kong Bar Association[1], a case regarding the freedom of choice of occupation, which is protected by article 33 of Basic Law. The claimant in this case are the claimant Leung Sze Ho Albert,who was a barrister and wanted to make Neuro-Beautology as his second occupation, but his application was rejected by Hong Kong Bar Association, the other party of the case. This is a rare situation in which Hong Kong court “had the opportunity to examine whether such restrictions violate art.33 of the Basic Law”[2]. Initially, Court of First Instance supported claimant’s argument, and “held that the restriction is not prescribed by law as it is not accessible given the general wordings of the restrictions and for lack of certainty….This case represents one instance in which an applicant has been successful in getting the impugned provisions declared as violating art.33 of Basic Law.”[3]
However, the decision was reversed by Court of Appeal in January 2017[4], which was further affirmed by the Court of Final Appeal in August 2017[5]. This shows the Hong Kong court’s unwillingness to expand the constitutional protection to the sphere of private law. The Court of Appeal held that even though this dispute had potential great social influence, Leung Sze Ho Albert failed to provide reasonable cause for this dispute and therefore dismissed claimant’s application.
Even thought this attempt is eventually failed, but it opened the gate of the application of direct horizontal effect in Hong Kong. Actually, the academic has long supported this direction. Its controversy derives from issue of the statues of a professional association. As Yash Ghai suggested, “some restriction on free choice is implied by art.142 of the Basic Law, which grants a significant degree of self-governance of entry into and discipline within the profession….This does not mean that the professional rules are not open to review by courts on the grounds of arbitrariness or generally for violating constitutional rules.” [6]
Besides the issue of direct horizontal effect, the indirect horizontal effect has also been considered in the past case law.
In the landmark case regarding defamation Cheng v Tse Wai Chun[7], the Court of Final Appeal overruled the traditional approach that “the defendant would be regarded as having been actuated by malice if he had some improper or ulterior motive when making the defamatory statement”[8]. Lord Nicholls NPJ said that: “A comment which falls within the objective limits of the defence of fair comment can lose its immunity only by proof that the defendant did not genuinely hold the view he expressed”[9]. This decision aligned with the constitutional protection of reputation in the article 14 of HKBORO. Furthermore, in Ma Bik Yung v Ko Chuen[10], the CFA support to grant remedy to the victim: “the courts have the power under s.72(4)(b) of the DOO to order an unwilling defendant to apologise to the claimant, though this power would be exercised only in exceptional circumstances”
The right of privacy is another controversial area whether the constitutional principle should be applied. In modern world, the persona data can be easily accessed and controlled by both public authority and private bodies. Some opponent of the initial version of HKBORO to include the third party rights is that it can “inhibit the exchange of personal information which may take place between such institutions on a regular basis”[11].
The article 14 of HKBORO said that :“(1)No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence, nor to unlawful attacks on his honour and reputation. (2)Everyone has the right to the protection of the law against such interference or attacks.”And the articles 28, 29 and 30 of Basic Law are also relevant to privacy and unlike HKBORO, they “arguably applies equally to interferences or intrusions by individuals (or “non-governmental parties”).”[12]
But in reality, an individual suffering from the intrusion of privacy cannot bring action directly under the Basic Law or HKBORO. Therefore, the constitutional protection on the intrusion of privacy by another individual is less powerful. In Hong Kong, it is difficult for the victim to make a successful claim under this basis. “Uncertainty remains as to the enforceability of art.14 of the Hong Kong Bill of Rights against a private individual. Further, ‘breach of privacy’ does not itself presently give rise to any civil liability in Hong Kong; instead, an aggrieved citizen must show that the conduct in question gives rise to legal liability by way of some other cause of action, such as trespass, nuisance or breach of confidence.”[13] Therefore, only acknowledging the applicability of horizontal effect can the right of ‘personal privacy’ be fully protected in Hong Kong.
The clash between the public law and private law reached into a new climax in the Occupy Central Movement in 2014. In the case Chiu Luen Public Light Bus Co Ltd (2014), the court The Court of Appeal upheld the injunctions on appeal in ruling that the Umbrella Movement’s ‘noble cause’ gave no right to its participants ‘to trample upon the rights of the others who may or may not agree with their cause’.
The issue of equality is also a highly disputed area. The right of equality is a parallel right which was protected by the Article 25 of Basic Law and Article 22 of BORO. Besides the constitutional protection of Basic Law and HKBORO, there are four anti-discrimination statutes including Sex Discrimination Ordinance (CAP 480), Disability Discrimination Ordinance (CAP 487), Family Status Discrimination Ordinance (CAP 527), Race Discrimination Ordinance (CAP 602). These four statutes “bind the government as well as private sector.”[14] They can offset some negative effects of the exclusion of discrimination between individuals by HKBORO. However, the protection under the four ordinances is not comprehensive. Because of the four ordinances, there is no problem between the private parties for the dispute regarding the relevant inequality. But the question is what’s about the right of equality outside the scope of the four ordinances?
In fact, Hong Kong is a city in which discrimination based on race is legal. As Paul Harris said, “While there is a Bill of Rights which binds only the state, there continue to be significant violations of rights by private individuals for which there is no legal remedy. The people in Hong Kong have not received any commitment to the introduction of anti-discrimination legislation and no commitment to the establishment of an effective Human Rights Commission.”[15]
(b) The border between public authority and private bodies
The question became more thorny when it is relevant to the “private bodies operating in the field placed on the borders of public and private activity, and which can produce, by virtue of their activity, certain general effects beyond strict inter partes relations.”[16]It mainly related to the non-pubic professional associations (such as labor union and bar association) and their relevant internal regulations. An indirect horizontal effect can arise in this situation, which is typical scenario of vertical effect between state and individual. The EU’s position is that the solution can be found within the sphere of private law, “A violation might be found if relations with the other party become, to some degree, ‘institutional’, namely, when they are subject to private rules established in advance and applicable to a given category of contractors or in defined circumstances.”[17]
In Hong Kong, from the case Leung Sze Ho Albert, it is obvious that the court rejected to apply direct horizontal effect in this situation, but it is still not clear whether there is indirect horizontal effect under this situation. Regarding the rules of private institutions on the freedom of conscience and religious belief, “in a number of cases, the Commission appears to have applied a ‘freedom of contract’ paradigm or one which canvasses the individuals concerned as autonomous agents capable of exercising voluntary choice in determining questions of infringement of the right to manifest religious belief.”[18]
(c) The land issue of indigenous inhabitants
On some controversial issues, the Basic Law even impedes the development of the private law in Hong Kong. The most obvious example is the right of new territories indigenous inhabitants, which is expressed in the article 40 of Basic Law.
The land issue is the core element of the right of new territories indigenous inhabitants. In the case Hong Kong Kam Lan Koon Ltd v Realray Investment Ltd (No.5)[19], the court held “that the right to compensation provided by art.105 was restricted to cases of deprivation of property by the state and did not extend to cases where paper title owners lost their right to assert their title against squatters”[20]. In this case, the court declined to apply the right under art. 105 of Basic Law to the land dispute between individuals.
The most ironical point is the remedy to the paper owner of a land. As the court’s reluctance to apply horizontal effect in land issue, the paper owner whose land suffered from illegal occupy by squatter has no legal weapon the get back his property, while at the same time is “continued to be liable for any breach of covenants rates and Government rent.”[21] The absurd outcome shows that the horizontal effect is not just some ornaments to current legal system in Hong Kong, but also an imperative mechanism to protect the property right of some individuals.
E, The possible explanation of Hong Kong court’s reluctance of the application of horizontal effect
It can be seen from the above cases law that, unlike EU court, the Hong Kong is highly reluctant to activate the application of the horizontal effect. There are two possible explanations to this reluctance. The first one is that, as the principle “Entities are not to be multiplied without necessity”, there are already sufficient schemes in common law, therefore it’s not necessary to activate the constitutional protection between individual parties.
But as Andrew Byrnes has pointed: “While the existing system of statue and common law in Hong Kong provides legal protection for individuals against infringements of rights by private individuals, there are important areas in which such protection does not exist (in particular in relation to discrimination by private individuals), despite the existence of international obligations which seem to require such protection.”[22] As has been mentioned previously, there are still some legal issues including private discrimination and privacy to which common law cannot provide sufficient solutions.
Another possible reason is the worry of the floodgate and uncertainty of the operation of the HKBORO and Basic Law if activating the horizontal effect in case law. The objections regarding the initial version of HKBORO rest on several concerns, one of which is that “‘recalcitrant debtors’ and ‘discontented employees’ would be able to utilize the Bill of Rights to frustrate the legitimate interests of their creditors and employers.”[23]
Marek Safjan and Przemysław Mikłaszewicz also mention that the extensive application of direct horizontal effect may produce adverse effect on the operation of private law. “A good example is the application of a general principle of equal treatment. If this principle was to be applied too extensively, it might deeply interfere with the fundamental freedom of contract…. A prohibition on discrimination cannot be an obstacle to shaping freely private contents. Otherwise, the very core of private autonomy would be destroyed.”[24] However, they give one possibility of the direct horizontal effect, as “a substantive inequality being the effect of an initial inequality of the parties may, in certain circumstances, constitute discrimination.”[25]
The conservative attitude of Hong Kong court to the horizontal effect is largely following the UK’s tradition. However, after the resumption of sovereignty in 1997, the legal system in Hong Kong has become more and more distinctive from that of UK. First, there is no written constitution in UK, but the Basic Law can be treated as the written constitution in Hong Kong because it has the function of a constitution in Hong Kong. Therefore, the court has to harmonize the relationship between constitution and common law and it is not realistic to segregate the common law and the Basic Law.
Furthermore, the UK citizen can appeal to EU court for remedy if they cannot get remedy from UK court as EU court is more willing to acknowledge the horizontal effect. But individual from Hong Kong has no similar channel as an individual from Hong Kong cannot appeal to NPSCS of PRC China for remedy. Therefore, to Hong Kong, the horizontal effect is more necessary and valuable than UK.
Another explanation is rested on the common law tradition which is strongly maintained by Hong Kong court. In the early constitutional cases from Ng Ka Ling to Chong Fung Yuan, the disputing point is whether Hong Kong should protect the common law approach when interpreting the Basic Law. Hong Kong court is inclined to adopt the generous interpretation approach when dealing with the dispute between government and individuals. In UK law, historically, “human rights were historically regarded as imposing obligations upon state, not upon private individuals”, that’s because “state were regarded as possessing more power than private individuals, giving rise to a greater ability to harm human rights.”[26] Therefore, it is reasonable for court to lean more to the individual to reach a balance by considering whether the government’s act is proportionate and reasonable. However, in most places, there is no such imbalance between different individuals and there is no need to use generous interpretation. And “to impose an obligation between human rights upon private individuals could create conflicts between human rights that do not arise when human rights obligations are imposed upon the state.”[27]
But the problem is that it is not so simple. The power between different individuals can also be out of balance. For example, as having been discussed previously, the private bodies operating in the field placed on the borders of public and private activity can work on the function of public authority with the status of private institution. The balance of power between a big insurance company and an individual is similar to that between a public authority and an individual. Under this situation, it is reasonable not to reject the generous interpretation. Hong Kong is a city in which business organization has much more power than other places in the world. The initial proposal of HKBORO has a provision which binds “the Government and all authorities and persons, whether acting in a private or public capacity”[28], this shows the concerns of the drafter of HKBORO. However, as the “result of sustained opposition from sectors of the business community”[29], the application of HKBORO to inter-citizens disputes was removed in the final version.
Under EU law, Marek Safjan and Przemysław Mikłaszewicz also indicate that there should be better solution in this situation and the issue should be “resolved like a typical conflict in a public sphere…the assessment of such situations may vary and will depend on the particular circumstances of the case.”[30] But they did not provide a specific yardstick.
F. Conclusion
Although the BORO and Basic Law primarily govern the disputes between individuals and government or public authority, they should have played a more important role in the development of the private law in Hong Kong.
Even under current scheme of HKBORO, the horizontal effect can still be activated. The breakthrough is the status of court. It is clear that court is not a branch of government. But it can be argued that court is one of the “public authorities” under s (7) of HKBORO. “The court would have to modify the common law rule so that they were consistent with the Bill. This would apply not only to cases in which the state was involved as a litigant, but also to cases in which the litigants were private parties and what was at issue was the enforcement of rights derived from the common law.”[31]
And another corollary is that, regarding the yardstick to activate the horizontal effect, it’s more reasonable to measure according to the balance of power between two parties, instead of whether one party is public authority. Under this scheme, the standard to decide whether to apply horizontal effect should not be whether one party is public authority , but whether the power between the two parties are out of balance. If the answer is positive, then it is necessary to apply horizontal effect; if negative, than it is not necessary to apply horizontal effect. On this point, there is great potential for Hong Kong Common Law and future barrister to make a difference of Hong Kong legal system and make it more beautiful. This approach is become popular in modern world. In English law, “it is possible that a private company will be required to uphold Convention rights when performing a public function”[32]. In EU, many countries have given European Convention provisions third party effect, which means horizontal effect[33]. There is no reason for Hong Kong to reject this international trend.
[1] HCAL 63/2014, (2015) HKEC 2009.
[2] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,918.
[3] Ibid 918.
[4] Leung Sze Ho Albert v Bar Council of Hong Kong Bar Association [2017] HKEC 191.
[5] Leung Sze Ho Albert v Bar Council of Hong Kong Bar Association [2017] HKEC 1745.
[6] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,917.
[7] (2000) 3 HKCFA 339.
[8] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,739.
[9] Cheng v Tse Wai Chun (2000) 3 HKCFAR 339,360.
[10] (2006) 9 HKCFAR 888.
[11] Johannes Chan and Yash Ghai, The Hong Kong Bill of Rights: A Comparative Approach, Butterworths Asia, 1993,85.
[12] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,763.
[13] Ibid 764.
[14] Ibid 995.
[15] Johannes Chan and Yash Ghai, The Hong Kong Bill of Rights: A Comparative Approach, Butterworths Asia, 1993,88.
[16] Marek Safjan and Przemysław Mikłaszewicz, “Horizontal Effect of the General Principles of EU Law in the Sphere of Private Law”, European Review of Private Law 3-2010[475-486],483.
[17] Ibid 484.
[18] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,894.
[19] [2007] 5 HKC 122.
[20] Johannes Chan SC (Hon) and C.L.Lin, Law of The Hong Kong Constitution, 2nd Edn, Sweet & Maxwell 2016,483.
[21] Ibid 484.
[22] Johannes Chan and Yash Ghai, The Hong Kong Bill of Rights: A Comparative Approach, Butterworths Asia, 1993,80.
[23] Ibid 83.
[24] Marek Safjan and Przemysław Mikłaszewicz, “Horizontal Effect of the General Principles of EU Law in the Sphere of Private Law”, European Review of Private Law 3-2010[475-486],485.
[25] Ibid 485.
[26] Hoffman D, The Impact of the UK Human Rights Act on Private Law, Cambridge University Press 2011,30.
[27] Ibid.
[28] Johannes Chan and Yash Ghai, The Hong Kong Bill of Rights: A Comparative Approach, Butterworths Asia, 1993,71.
[29] Ibid 72.
[30] Marek Safjan and Przemysław Mikłaszewicz, Horizontal Effect of the General Principles of EU Law in the Sphere of Private Law, European Review of Private Law 3-2010[475-486],484.
[31] Johannes Chan and Yash Ghai, The Hong Kong Bill of Rights: A Comparative Approach, Butterworths Asia, 1993,94.
[32] Hoffman D, The Impact of the UK Human Rights Act on Private Law, Cambridge University Press 2011,19.
[33] A Drzemczewski, European Convention on Human Rights in Domestic Law: A Comparative Study, Clarendon Press 1983, 199-228.