KONG YUNMING v. THE DIRECTOR OF SOCIAL WELFARE

CACV 185/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 185 OF 2009

(ON APPEAL FROM HCAL NO. 127 OF 2008)

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BETWEEN

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And

CACV  153/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 153 OF 2010

(ON APPEAL FROM HCAL NO. 69 OF 2009)

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BETWEEN

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J U D G M E N T

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Hon Stock VP:

Introduction

1.  In June 2003, the Chief Executive in Council ordered that, subject to the approval of the Finance Committee of the Legislative Council, a person aged 18 years or over was eligible for Comprehensive Social Security Assistance (CSSA) only if he (or she) had been a Hong Kong resident for at least seven years and, further, had resided in Hong Kong continuously for at least one year immediately before the date of application.  This policy took effect from 1 January 2004.  It did not apply to those who had become Hong Kong residents before that date.  On 27 June 2003, the proposal was endorsed by the Finance Committee.

2.  The appellants in these proceedings were each refused CSSA.  Those refusals were the subject of separate proceedings for judicial review.  The legality of those decisions to refuse CSSA was impugned on the basis that the residential requirements of the 2003 policy decision were unconstitutional. 

3.  In the first application, that of Mdm Kong, the challenge was to the constitutionality of the seven-year rule.  By a judgment dated 23 June 2009, Andrew Cheung J, as he then was, dismissed the application.

4.  In the second application, that of Mr Yao, the challenge was to the constitutionality of the one-year rule.  By a judgment dated 21 June 2010, the same judge allowed the application, quashed the decisions which had rejected Mr Yao’s application for CSSA and declared that the one-year requirement was unconstitutional.

5.  There are now two appeals before us: Mdm Kong’s appeal, by which she contends for the unconstitutionality of the seven-year rule; and the appeal of the Director of Social Welfare in the Yao case by which he contends for the constitutionality of the one-year rule.  The hearings of these appeals were consolidated.

6.  The appeals turn upon similar issues; in particular upon the justification advanced for each rule.  There are other issues common to both appeals, such as the extent of the Government’s obligation, if any, under the Basic Law to provide social welfare benefits to Hong Kong residents and whether eligibility criteria must be prescribed by law and, if so, whether the residential criteria have so been prescribed.  But in the event the real issue in both cases is the justification for the distinction which the policy effects between two groups of Hong Kong residents: do the distinctions based on length of residence pursue a legitimate aim; if so, are the measures adopted rationally connected to that aim; and, if so, has the Director shown that the differences in treatment are no more than are necessary to accomplish that aim?

THE SEVEN-YEAR ISSUE

Mdm Kong’s case

7.  I turn first to the case of Mdm Kong and the seven-year issue.

8.  It is, for the purposes of this appeal, unnecessary to rehearse in detail the facts pertaining to Mdm Kong’s case.  That is no disrespect to her or to her circumstances but merely a recognition of the fact that the issues are affected by none of her individual and unfortunate circumstances but rather by the sole circumstance that at the date of her application, she had not resided in Hong Kong for seven years.

9.  Mdm Kong was born in December 1941 in Guandong, divorced her first husband in 1983, and married a Hong Kong permanent resident in October 2003.  At all material times since 1985 he had been a recipient of social welfare.  He suffered from a chronic illness and, sadly, died the day after she arrived in Hong Kong.

10.  She arrived in Hong Kong in December 2005 on a one-way permit from the Mainland.  She was granted permission to remain for 7 years.  She obtained a Hong Kong identity card.  In March 2006 she lodged an application for social welfare which, on 16 May 2006, was rejected by the Director of Social Welfare on the basis that she had not resided in Hong Kong for at least seven years.

11.  After her husband’s death, she obtained some support from a variety of charitable sources, but it is not suggested that this is an adequate substitute for the assistance under the CSSA.  There is some evidence about temporary employment which from time to time she held but this, again, is of little significance to the issues in this appeal.  It is accepted that but for the seven-year rule, her means at the material time were such as to entitle her to assistance under the Scheme.

12.  There was, but no longer is, a challenge to the decision of the Social Security Appeal Board dismissing her appeal against the Director’s decision; and there is no challenge to the exercise of the Director’s discretion to refuse to grant CSSA notwithstanding the applicant’s failure to meet the seven-year requirement.

13.  The questions raised on Mdm Kong’s behalf in the appeal are whether the seven-year requirement:

(1)  breaches the terms of article 36 of the Basic Law which specifies that “Hong Kong residents shall have the right to social welfare in accordance with law.”

(2)  breaches article 25 of the Basic Law which states that: “All Hong Kong residents shall be equal before the law.”

(3)  breaches article 22 of the Hong Kong Bill of Rights, which is in the same terms as article 26 of the International Covenant on Civil and Political Rights (ICCPR) – itself, as applied to Hong Kong, given effect by article 39 of the Basic Law – which provides for equality before the law and that the law shall prohibit discrimination on any ground “such as race, colour, sex, language, religion and political or other opinion, national or social origin, property, birth or other status”, the contention being that the exclusion of those who have resided in Hong Kong for under seven years constitutes discrimination under the “other status” limb of the prohibition;

(4)  is a retrogressive measure and therefore contrary to the obligation imposed by article 145 of the Basic Law upon the Government of the Hong Kong Special Administrative Region to develop and improve the system of social welfare.

The relevant provisions

14.  Article 24 of the Basic Law classifies residents of the Hong Kong Special Administrative Region as either permanent residents or non-permanent residents.

15.  The significance of an examination of article 24 rests in the fact that a prime justification advanced for the seven-year rule is that it accords or stands in alignment with or is rationally referable to eligibility for permanent resident status.

16.  Article 24 states that :

“The permanent residents of the Hong Kong Special Administrative Region shall be:

(1) Chinese citizens born in Hong Kong before or after the establishment of the HKSAR;

(2) Chinese citizens who have ordinarily resided in Hong Kong for a continuous period of not less than seven years before or after the establishment of the HKSAR;

(3) Persons of Chinese nationality born outside Hong Kong of those residents listed in categories (1) and (2);

(4) Persons not of Chinese nationality who have entered Hong Kong with valid travel documents, have ordinarily resided in Hong Kong for a continuous period of not less than seven years and have taken Hong Kong as their place of permanent residence before or after the establishment of the HKSAR;

(5) Persons under 21 years of age born in Hong Kong of those residents listed in category (4) before or after the establishment of the HKSAR; and

(6) Persons other than those residents listed in categories (1) to (5) , who, before the establishment of the HKSAR, had the right of abode in Hong Kong only.”

17.  Article 24 goes on to provide that permanent residents shall have the right of abode in the HKSAR and that non-permanent residents are those qualified to obtain a Hong Kong identity card but have no right of abode.

18.  Article 36, which falls under Chapter III of the Basic Law “Fundamental Rights and Duties of the Residents”, provides:

“Hong Kong residents shall have the right to social welfare in accordance with law. The welfare benefits and retirement security of the labour force shall be protected by law.”

19.  Article 39 is germane to this case because the arguments advanced on behalf of Mdm Kong and Mr Yao seek reinforcement by its reference to the International Covenant on Economic, Social and Cultural Rights (ICESCR):

“The provisions of the International Covenant on Civil and Political Rights, the International Covenant on Economic, Social and Cultural Rights,… shall remain in force and shall be implemented through the laws of the Hong Kong Special Administrative Region.

The rights and freedoms enjoyed by Hong Kong residents shall not be restricted unless as prescribed by law.  Such restrictions shall not contravene the provisions of the preceding paragraph of this Article.”

20.  Article 48 (4) is said by the Director to be relevant to the basis in law for the CSSA scheme:

“The Chief Executive of the Hong Kong Special Administrative Region shall exercise the following powers and functions:

…

(4) To decide on government policies and to issue executive orders.”

21.  Article 54 states that:

“The Executive Council of the Hong Kong Special Administrative Region shall be an organ for assisting the Chief Executive in policy-making.”

22.  And then there is article 145, upon which the Director places particular emphasis:

“On the basis of the previous social welfare system, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of this system in the light of the economic conditions and social needs.”

23.  Article 145 is heavily relied upon by the Director because he says that article 36 must be read in the light of article 145, whereby it is clear that a purposive construction of the two articles read together illustrates the discretion given to the Government as to what services are provided, the level of support in relation to each selected service and the flexibility of the system’s development dictated by ever-changing economic and social circumstances.

24.  The equality provisions relied upon are:

(1)   Article 25 of the Basic Law:

“All Hong Kong residents shall be equal before the law”;

(2)   Article 26 of the ICCPR:

“All persons are equal before the law and are entitled without any discrimination to the equal protection of the law. In this respect, the law shall prohibit any discrimination and guarantee to all persons equal and effective protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status”

Domestic effect is given to art. 26 ICCPR by article 22 of the Hong Kong Bill of Rights Ordinance.

25.  Professor Chan SC, for Mdm Kong, prays in aid of his argument article 9 of the ICESCR which states that:

“The States parties to the present Covenant recognize the right of everyone to social security, including social insurance.”

The CSSA Scheme

26.  The scheme in question is a non-statutory, non-contributory and means-tested scheme administered by the Social Welfare Department.  Policy is formulated by the Labour and Welfare Bureau.  It is designed to provide cash assistance to needy individuals and families so as to raise income to a level designed to meet basic needs such as food, clothing, fuel and light, rent and schooling expenses.  It is funded entirely from the General Revenue and since it is a non-contributory scheme, it requires heavy subsidy.

27.  The figures which were before the judge were summarized in his judgment:

“14. In 2006-2007, total recurrent public expenditure on social welfare reached $32.8 billion, taking up 16.0% of the total recurrent public expenditure amongst various policy areas, including education (21.9%), health (14.6%), housing (5.0%), security (11.1%), infrastructure (5.4%), economic (5.3%), environment and food (3.9%), community and external affairs (3.4%) and support (13.1%). In 2006-2007, total actual expenditure of the Social Welfare Department was $32.5 billion. Social security took up the largest share (73.3%) amongst the various welfare services in 2006-2007, according to the materials placed before the Court.

15. The social security services provide a safety net for individuals or families who are unable to support themselves financially because of age, disability, illness, low earnings, unemployment or other family circumstances. The CSSA scheme and the SSA scheme form the mainstay of the social security system. The CSSA scheme provides cash assistance to people suffering from financial hardship to enable them to meet basic need. Apart from cash assistance, the Social Welfare Department also provides personalised employment assistance under the Support for Self-reliance scheme to help able-bodied unemployed CSSA recipients move towards full-time paid employment and become self reliant.

16. According to statistics, as at the end of 2007, there were 288,145 CSSA cases providing assistance to 496,922 people.  The expenditure in 2007 amounted to $18.12 billion.  The CSSA scheme is a non-statutory scheme administered by the Social Welfare Department.  It is based on the government’s policy to provide financial assistance to bring the income of needy individuals and families up to a prescribed level to meet their basic needs, which broadly include food, clothing, fuel and light, rent and schooling expenses for children etc.  The amount of assistance is determined by the amounts of income and needs of a family.  The difference between the total assessable monthly income of a family and its total monthly needs as recognised under the scheme in terms of various types of payment will be the amount of assistance payable.  As the CSSA scheme is non-contributory, heavy subsidies from the government are required to carry out its stated objective.  In order to ensure that only people suffering from genuine financial hardship are benefited, the CSSA scheme is means tested, which includes both income and assets test.”

The residence requirements

28.  The requirements which are at the heart of these appeals and which came into force on the 1 January 2004 are in the following terms:

“The applicant must satisfy the following residence requirements:

a. he/she must have been a Hong Kong resident for at least seven years; and

b. he/she must have resided in Hong Kong continuously for at least one year immediately before the date of application (absence from Hong Kong up to a maximum of 56 days during the one-year period is treated as residence in Hong Kong).

Note that:

(1) Persons whose presence in Hong Kong is unlawful or persons who are permitted to stay in Hong Kong for a purpose other than residence (example, imported workers or visitors) are excluded from the Scheme.

(2) Persons who have become Hong Kong residents before 1 January 2004 are exempted from the residence requirement in a. above.

(3) Hong Kong residents aged below 18 are exempted from the residence requirements in a. and b. above.

(4) In exceptional circumstances, CSSA may be granted at the discretion of the Director of Social Welfare to a person who does not satisfy the residence requirements.”

The discretion

29.  Guidelines have been issued by the Department for the exercise of the discretion to grant CSSA despite the failure to meet the residence requirements.  The guidelines are as follows:

“Guidelines on the exercise of discretion

• In general, financial hardship alone does not merit exceptional treatment, especially in the case of able-bodied adults.

• The SSO(D) can exercise discretion to exempt a Hong Kong resident from the [seven-year residence] rule if the applicant can satisfy all the following criteria:

- having no or insufficient income to meet his/the family’s basic needs;

- having no relative or friend to turn to for assistance;

- no other forms of assistance being available to him/his family;

- having suffered a substantial and unexpected change in circumstances beyond his/the family’s control (see Note below);

- having genuine difficulty in returning to his country of origin or the place where he came from;

- the total resources available to him/his family, including any savings or other assets held by him/his family and any CSSA payable to his family members, are not sufficient to meet his/his family’s recognised needs under the CSSA Scheme for two months.

Note

Some examples of the types of situation that would constitute a substantial and unexpected change are given below:

…

Failure to find or keep employment by a new arrival ... is usually not regarded as a substantial and unexpected change in circumstances justifying exceptional treatment …”

History

30.  A healthy analysis of the two primary issues that fall for our determination, namely, the purposive construction of article 36, read in conjunction with article 145, and the justification for excluding from CSSA the class of persons who have been excluded, requires an understanding of the history of social security provision in Hong Kong and the circumstances in which the 2003 decision, now impugned, came to be made.

31.  In the late 1940s Hong Kong experienced a massive influx of immigrants from the Mainland and there was a degree of social and economic unrest.  The newly established Social Welfare Office imposed a residence requirement of ten years for receipt of public assistance.

32.  In the late 1950s, that Office had become a Government department and provided food and shelter to the destitute.  In 1959, as a result of changes in social and economic circumstances, the residence requirement was lowered to5 years. In a Executive Council memorandum of April 1965 the point was made that in the special conditions of Hong Kong, including the high density of the population, further anticipated immigration as well as a low death rate, it was not realistic to envisage comprehensive public assistance services without careful consideration of the effect on the economy.  There were at this stage no cash grants, merely assistance in kind.

33.  After a comprehensive review in 1968, the policy was revised in 1970 by the introduction of a cash payments scheme which was subject to a means test.  The residence requirement was lowered to one year with a discretion conferred upon the Director of Social Welfare to provide assistance to those who do not fulfil the conditions in the particular circumstances were such as necessitated the provision of aid.  This was the Public Assistance Scheme, the precursor to the CSSA which covered food costs and other basic needs.  Rates were revised in 1972 to cover additional items of essential household expenditure.

34.  Thereafter, improvement measures were introduced which included increases in payment rates, the introduction of special supplements and a range of special grants to meet the needs of different categories of recipients.

35.  In July 1993 the CSSA and Social Security (SSA) schemes were introduced and there followed significant improvements including a substantial increase in the level of benefits.

36.  In 1997 a review of the operation of CSSA was prompted by “growing public concern about the rapid growth in the CSSA caseload and its expenditure, the high levels of CSSA benefit from large families as compared with market wages, the sharp increase in the number of people of working age turning to CSSA. … [and] an increasing perception that some people [were] abusing the system. … .”[1]

37.  The 1998 Report described the increase in expenditure as “dramatic”, a threefold increase since 1993/1994 and the share of the Department’s budget increasing from 27% to 45%.  That increasing growth was said to be “worrying and unsustainable in the long term bearing in mind it is a non-contributory scheme, financed by general revenue obtained from a low tax base.  CSSA expenditure has taken up the lion’s share of the public resources available from economic growth to meet the community’s aspirations for new or improved services.”  The situation was said directly and significantly to constrain the Government’s ability to expand and improve services in other areas.[2] It was suggested that the rapid growth in caseload and expenditure might be explained by an ageing population and other factors.

38.  In 2002 the Chief Executive announced the “urgent need for development of a comprehensive population policy … [which] … will be designed to fit Hong Kong’s long-term social and economic development, will complement family requirements, and will address the interests of different sectors in our community.”[3] (Emphasis added). 

39.  A Task Force on Population Policy was established, chaired by the Chief Secretary for Administration and its Report was released on 26 February 2003.

40.  The Report noted that :

(1)  Hong Kong’s population was ageing rapidly, and there was a low birth rate: a quarter of the population was expected to be aged 65 years or more by 2031.

(2)  In consequence, the size of the workforce was going to shrink as the prime working age population declined.

(3)  One of the serious economic problems caused by an accelerated increase in the number of elderly people in the population was constituted by social security payments and it had further to be recognised that an ageing population dictated steep increases in health care expenditure with the consequence that fewer resources would be devoted to productive investment or to the younger members of society. The result, it was forecast, would be a prolonged period of slower economic growth, frustrated expectations and declining competitiveness against economies with younger populations.

(4)  The Government was committed to providing financial assistance to elderly people in need and, at the date of the Report, more than 600,000 persons aged 60 years or above received financial assistance through either the CSSA or the Old Age Allowance (OAA), both of which schemes were funded entirely from general revenue.  Total government expenditure in financial assistance for the elderly was estimated to be $11.8 billion in 2002-03 which accounted for 5.4% of recurrent public expenditure and which represented an increase of 50% when compared to the $7.8 billion paid out in 1997-98.  The authors of the Report estimated that if the rate of payment and the eligibility criteria for OAA remained unchanged, the total payment for OAA alone by 2031 would rise to $10.4 billion and would leapfrog to $20.8 billion for CSSA.[4] None of this took into account the anticipated steep increase in health care expenditure.

(5)  Between 1997 - 2001, new arrivals from the Mainland admitted under the one-way permit (OWP) scheme, at the rate of 150 individuals per day – increased in 1995 from 100 per day – made up 93% of Hong Kong’s population growth.  In 2002 only 28% of the increase in Hong Kong’s population was attributable to natural increase, whereas 72% was generated by the net inflow of people, most of whom arrived under the OWP scheme.  Many of the adult new arrivals possessed few work skills and little education.  A significant feature of the OWP scheme, a scheme devised in the main to facilitate family reunion, was that it was “neither appropriate nor feasible to impose screening criteria and there was no control over the quality of intake”, by which was meant, no doubt, that there was no control as in the case of immigration policies in other jurisdictions in the sense of admitting only those with particular skills.

(6)  As at the end of 2002, 14.9% of CSSA recipients were new arrivals. The expenditure for CSSA in 1993-94 was $2.4 billion, whereas for 2003-04 the draft estimate was $17 billion for CSSA which constituted $780 million more than the revised provision in 2002-3.  Between March 1999 in December 2002, the number of CSSA cases involving new arrivals increased by 48% and the CSSA caseload by 14%.[5]

(7)  Over the past decades emigration had decreased significantly.

(8)  The growing proportion of immigrants born outside Hong Kong was inevitably going to have a profound impact on the social and economic structure of Hong Kong. 

(9)  The economic downturn had led to a fiscal deficit.  There was a need to ensure a rational basis upon which social resources were allocated, “in particular against our current austere fiscal situation when available resources are increasingly limited and demand is continuously rising.”[6]

(10)   In relation to this need for a rational basis for allocation of resources, it was noted that although many public services in Hong Kong were heavily subsidised[7], some required prospective applicants to meet a residence requirement, others not; and the result was a considerable discrepancy in the eligibility for various privileges among residents with different lengths of residence.[8] In the case of public rental housing, the residence requirement was one of seven years.

(11)  Proportionately more CSSA resources were allocated to new arrivals than to the rest of the population.

(12)  Because of rising public expenditure in the provision of a variety of highly subsidised services, the implications for public finances had become an issue of major concern for the Government and the community.  A balance had to be struck between the interests of various sectors of the community, having proper regard “to the long-term sustainability of our social services within limited financial resources.”[9]

41.  In relation to eligibility for public benefits, the Report concluded that:

“… given the complexity of the issue and our tight time-table, we have focused our deliberation on CSSA and public health and hospital services for this exercise, since together they account for some 21% of our total public expenditure in 2001/02. After careful consideration the Task Force considers that there is a strong case for removing the anomaly that exists in the eligibility criteria for major subsidized benefits, and for applying a uniform seven-year residence rule for providing all heavily subsidized social services including CSSA and public healthcare benefits. Eligibility based on a seven-year residence requirement reflects the contribution a resident has made towards our economy over a sustained period of time in Hong Kong. A seven-year residence is also normally required to grant of permanent resident status in Hong Kong, for which additional rights are prescribed in the laws of Hong Kong. In applying this “seven-year” rule to CSSA applicants, we believe that children under the age of 18 should be exempted as in the case of public housing. For exceptional cases, the Director of Social Welfare, of course, will have discretionary power to grant CSSA on compassionate grounds waiving the residence rule. These measures should take effect from a future date. Current residents in Hong Kong will not be affected.”[10]

42.  It was stated that it was important that the new policy be subject to regular review.[11]

43.  The proposed policy was placed before the Legislative Council Panel on Welfare Services for discussion in March 2003 with some members expressing disquiet over the possible effect of the proposed seven-year rule.

44.  On 3 June 2003, the Chief Executive in Council ordered that the new proposed residence requirements for CSSA be adopted with effect from the 1 January 2004, subject to the approval of the Finance Committee of the Legislative Council.  The proposal was endorsed by the Finance Committee on 27 June 2003.

45.  One of the points made by the Director in presentation of the case to these groups was that the new proposals would be given wide publicity so that those intending to come to Hong Kong under the OWP scheme would be aware in advance of the non-availability of CSSA for seven years.

The judgment appealed

46.  The judge noted the periodic changes in the residential requirements and the reasons for those changes.  He emphasised the broad reach of social welfare and the reality that any social welfare system had necessarily to react to changing economic conditions and public needs, a reality reflected in article 145 of the Basic Law.

47.  He took the view that it was impermissible to judge the meaning of article 36 by examining it in isolation: it was to be read in conjunction with article 145 and did not confer an absolute right to social welfare; what entitlement was conferred from time to time and with what qualifying criteria was to be determined by the Government in the light of economic conditions and social needs, a determination which the courts should be slow to second-guess.  

48.  He rejected the argument that the new residential rule, since it denied social security to those who would have benefited but for the change, contravened the requirement of article 145 that policies be formulated for the improvement of the system.

49.  The judge accepted that a policy that constituted discrimination, properly defined, was not one that could be regarded as a development and improvement of a pre-existing system and was of the view that the present case boiled down to an issue of discrimination.  But he was satisfied that the policy pursued a legitimate aim and was not disproportionate to that aim, and was therefore not discriminatory.  He dismissed the challenge.

Articles 36 and 145

50.  The contention advanced on behalf of Mdm Kong is that article 36 confers upon all Hong Kong residents a right to social welfare subject only to such restriction as is limited by law; which is to say, statute law or common law formulated with such precision as the occasion demands and which is accessible.

51.  Lord Pannick Q.C. on behalf of the respondent answers by suggesting that a purposive construction of article 36 does not result in the conferment of a prima facie right to social welfare in all or any of its forms.  What it means is that Hong Kong residents shall have such social welfare as may be accorded pursuant to the formulation of policies envisaged by article 145; that that right or entitlement carries within itself eligibility criteria; and that, insofar as a basis in law is required for such rights as may be afforded, that basis is to be found in article 145.

52.  It is as well to recognise the essential characteristics of the argument advanced for Mdm Kong, for by so doing one might see at once the difficulties with it.

53.  The argument for Mdm Kong presupposes that article 36 confers a prima facie right in all residents to all forms of social welfare and even then regardless of eligibility criteria or level of benefit.  That has to be the proposition, for article 36 does not restrict itself to social security which is but one form of social welfare; it does not even mention social security.  It speaks only of the right to social welfare.  If, on the other hand, it be suggested that social security, viewed broadly, is intended to be equated with social welfare, then the argument equally presupposes that there is a prima facie right reposed in all residents to all forms of social security, and that that is the starting point.

54.  It is trite that a proper construction of article 36 must be a purposive one.  To be purposive, the construction must:

(1)  take account of the broad phraseology of this constitutional instrument and of the particularly broad phraseology of article 36;

(2)  fully recognise that the right conferred by article 36 is, by its place in Part III of the Basic Law, afforded the status of a fundamental right, so that any interpretation is not to render article 36 a mere mantra;

(3)  recognise the nature of the right in issue;

(4)  take into account other relevant articles of the Basic Law in such a way as to make sense of them as a whole or, put another way, in such a way as to avoid inconsistency of effect as between article 36 and the other relevant articles; 

(5)  recognise the historical context in which the relevant articles, including article 36 were formulated; and

(6)  consider the practical ramifications of suggested interpretations in order to assess which, if any, fall outwith the possible contemplation of the Constitution’s framers.

55.  Article 36 is on its face in extraordinarily broad terms.  As Lam J commented in the course of the hearing of this appeal, it differs from the other rights to which Chapter III refers and the rights to which the ICCPR refers in that, by and large, the scope of the other rights are instinctively recognizable; whereas the scope of social welfare is of a different order in terms of breadth and meaning. 

56.  What does social welfare encompass?  This is an important question if Professor Chan’s proposed construction is to hold water.

57.  Social security in Hong Kong as administered by the Social Welfare Department takes the form of cash assistance to the financially vulnerable and for the special needs of the severely disabled and the elderly.  There are two such schemes: the CSSA Scheme which is the means tested scheme with which this case is concerned and the Social Security Scheme (SSA) which is a non-means tested allowance for the severely disabled and the elderly.  These schemes are supplemented by three other schemes, namely, the Criminal Law Enforcement Injuries Compensation Scheme, the Traffic Accident Victims Assistance Scheme and Emergency Relief.

58.  But there are other services provided by the Department under its social welfare remit[12]. These include:

(1)  Family and Child Services which in turn include the provision of family service centres, clinical psychological service, residential care services for children, child care centres for children aged under three years, an adoption service, a hotline service and services for streets sleepers; 

(2)  services for the elderly designed to enable them to remain active members of the community and, where necessary, to provide community or residential care for the elderly frail;

(3)  rehabilitation and medical social services designed to assist persons with disabilities and this in turn includes pre-school rehabilitative services; residential care services; day training and vocational rehabilitation services; community support services; medical social services in public hospitals; specialist outpatient clinics; and preventive and rehabilitative services for drug abusers;

(4)  services for offenders designed to help them integrate into the community.  These services include supervision, counselling, academic courses, pre-vocational and social skill training, probation and after care services, operation of a remand and residential training complex, administration of the Community Service Orders scheme, the Community Support service scheme, the post-release supervision of prisoners scheme and a young offender assessment panel;

(5)  services for community development such as neighbourhood community development projects; and

(6)  services for the young, such as school social work service, and children and youth centres.

59.  This is not an exhaustive list of what may properly be categorized as social welfare.  Governments in many parts of the world provide a host of different social welfare services to one degree or another depending upon the state of their economic development and upon geo-political considerations which include priorities and, of course, willingness.  Social welfare might include support for widows and orphans; industrial welfare; housing assistance; educational programmes; nutrition for infants; conciliation in family matters; meals on wheels; transport services for the elderly; laundry services for the elderly and sick; support or counseling for substance abusers; maintenance allowances for children; subsidies for students; job placement programmes; and social security benefits or income support.  It does not require evidence to appreciate how wide might be the range of services that may be encompassed by the concept of “social welfare”.

60.  My point in listing the services provided by the Social Welfare Department and in listing as well other services which fall under the rubric “social welfare” is to illustrate the degree to which the argument advanced here and below has cherry-picked one facet of social welfare – an important facet, I accept – thereby inviting a non-contextual and, with respect, unrealistic construction of article 36.

61.  There is a further aspect of this non-contextual and counter-purposive argument, which is the isolation of the Government’s social welfare obligations from its other cost-bearing obligations or functions: the cost of the civil service; civil engineering and highways; urban development; transport; water supplies; hospitals; health; fire services; civil aviation; correctional services; environmental protection; trade and industry; university grants; rates and taxes; public housing; port and airport maintenance and development – to name but some obvious ones.

62.  It is against this complex matrix – as well as against the historical background, which we will have to visit – that the argument falls to be examined; the argument that article 36 envisages, indeed requires, that social welfare is to be accorded to all residents, save to the extent specifically limited or denied them by law, so that, unless specifically excluded, its provision in all its forms is obligatory regardless of oversight and regardless of competing demands.  That may sound a far-fetched proposition but the fact must be faced that that is the logical consequence of the argument.

63.  That cannot have been intended by those who framed the Basic Law.  The framers of the Basic Law can be taken to have been aware of the competing demands upon governmental expenditure, of the breadth of the term “social welfare”, of the ambit of social welfare services in Hong Kong at the time the Basic Law was drafted, of the unpredictability of socio-economic developments, often outside control of a government, and of Hong Kong’s peculiar susceptibility to immigration pressures.  It is in those circumstances quite unrealistic to suppose that they envisaged by article 36 a right to all forms of social welfare – a right which, to be meaningful, would have to be met by the provision of adequate funds to satisfy the needs of each individual – save to the extent specifically excluded and even then (for this is a significant aspect of the argument) a level of benefit which, by reference to the word “improvement” in article 145, was never to be less advantageous to the qualifying individual recipient than previously.

64.  It is precisely because of the nature of the creature and its place in any society with competing demands, the fulfilment of which is constrained by resource limitations, that article 145 was, no doubt, drafted.  The true effect of the applicant’s contention in this case is, with respect, to treat article 145 as if it were not there.  But it is there; and it addresses the very same subject matter as does article 36.  It follows that article 36 must be read together with it and in its light.

65.  Central to an analysis of article 145 is recognition of three of its salient features:

(1)  What is envisaged for the future are policies based on “the previous system”; whereas, as it seems to me, the applicant’s argument envisages a new system altogether: a legislative code creating a much wider, increasingly generous system, conferring on all residents the right to all forms of social welfare, save to the extent specifically excluded.

(2)  Article 145 speaks of the formulation of policies “in the light of economic conditions and social needs.”  This is an unsurprising but vital phrase.  The Article does not speak of formulation of policies regardless of economic conditions and social needs.  To the contrary, it recognises that whatever measures are taken will be taken subject to the constraints of such economic conditions as prevail from time to time.  It would be odd were it otherwise.

(3)  It looks to the development and improvement of the system.  It does not say that whenever there is a change to a welfare benefit, the benefit must be enhanced.  It does not say that whenever there is a change to the criteria for eligibility to any one form of social welfare, the criteria must be less onerous than previously.  Not only would such an interpretation fly in the face of the injunction to look to economic conditions but it proceeds on the basis of periodic snapshots at the expense of the long-term viability of “this system” and at the expense of future deserving recipients of welfare benefits.

66.  It is argued that because the previous residential qualification was one year, a seven-year criterion is a retrogressive step which therefore falls foul of the requirement to develop and improve the system.  But, I ask rhetorically, what if an “improvement” today in one benefit necessarily results in the diminution of another?  What if increased expenditure today upon social welfare benefits results in no funds tomorrow for any social welfare benefits?  How then stands the Government’s obligation under article 145 to develop and maintain the system?  A system is only a viable system if it is sustainable at a meaningful level for future generations.

67.  So if, in order to maintain a viable system for future generations, the criteria change, as they have in this instance, it seems to me to be difficult to conclude that steps taken to that end are other than in conformity with article 145.

68.  What then of article 36?

69.  It is suggested that the phrase “in accordance with law” (which, we were given to understand, was added during the drafting process) should be taken to mean “subject only to such restriction as is limited by law.”

70.  Article 36 does not say what counsel suggests it says.  It does not say that the right to social welfare shall not be subject to any restriction except those which are provided by law, the formula used, for example, in article 12 (3) of the ICCPR (article 8(3) of the Hong Kong Bill of Rights).  Generally, “in accordance with law” is another way of saying “in conformity with law.”  I note in this regard the brief analysis of these various phrases in Nowak’s “U.N. Covenant on Civil and Political Rights: CCPR Commentary”[13] which distinguishes between phrases such as “described by law”, “provided by law”, “established by law”, and “prescribed by law” used in articles 9, 12, 18, 19 and 22 of the ICCPR on the one hand and, on the other, the phrases “in accordance with law” and “in conformity with the law” used in articles 13 and 21 of the ICCPR.  The suggestion is that the former group envisages a law which itself sets down the grounds for restrictions whereas the latter phrases have a different (i.e. less strict) meaning, the latter permitting administrative interference which is in conformity with law.[14]

71.  In any event the construction suggested by Professor Chan is inconsonant with the intent of article 145, in the sense I have postulated and further, if the phrase “in accordance with law” in the context of article 36 was intended to be a necessary vehicle by which to restrict an otherwise unrestricted, unconditional, right, the phrase would be otiose because such a vehicle would be provided by article 39.

72.  It is, strictly speaking, not necessary for the purpose of the instant exercise to decide what article 36 does mean.  It suffices, for the present purpose, to conclude, as I do, that it does not bear the meaning for which the applicant contends.  But one might nevertheless venture to suggest what article 36 read with article 145 envisage.  With the previous social welfare system as a base, they envisage the continuous formulation and promulgation of policy in the realm of social welfare for the benefit of Hong Kong residents – as opposed to visitors – in the light of such economic conditions and social needs as prevail from time to time, with the objective of developing and improving the system, it being manifestly implicit that that objective can only be met if the system be nurtured and sustained for the meaningful benefit of future generations as well as the present.  In order to meet these requirements and in any event inherent in any such system, the right to social welfare carries with it qualifying conditions.  Hong Kong residents are to enjoy that right, so long as they meet the qualifying conditions, for the right itself includes the conditions.  The conditions must be lawful, so that conditions that are discriminatory are not permissible.

‘Prescribed by law’

73.  An argument advanced before us but not at first instance, is that the limitations on the right to social welfare, evidenced by the qualifying criteria, have not been “prescribed by law” within the meaning of article 39 of the Basic Law.  Since article 36, properly construed, envisages qualifying conditions to be inherent in the right itself, it is inappropriate to view qualifying conditions as constituting a restriction contemplated by article 39.

74.  I would in any event say that in substance the qualifying conditions may justifiably be described as prescribed by law in that they are authorized by article 145 itself, are accessible, establish rules of general application and do not permit arbitrary or random decision-making: see R (Munjaz) v Mersey Care NHS Trust[15], and Greater Vancouver Transportation Authority.[16]

The ICESCR

75.  The notice of application for leave to apply for judicial review does not include as a ground of challenge any suggested failure to comply with the International Covenant on Economic Social and Cultural Rights (ICESCR).  But it is argued that article 36 of the Basic Law must be construed insofar as is possible to accord with the requirements of the ICESCR, not merely because that is an accepted approach to the construction of any legislative instrument which coincides in its subject matter with that covered by applicable international obligations but also because article 39 of the Basic Law refers to that Covenant.

76.  The relevant article of the ICESCR is article 9:

“The States Parties to the present Covenant recognize the right of everyone to social security, including social insurance.”

77.  It was not suggested in argument that article 9 is part of domestic law and it is not necessary for the purposes of this case to determine whether article 39 of the Basic Law in its reference to the ICESCR gives direct effect to the Covenant or envisages implementation by diverse legislative measures.

78.  The argument in relation to the ICESCR commenced with an exhortation to dispense with the concept that the ICESCR was aspirational, an adjective which is said incorrectly to devalue the obligations undertaken by States Parties into statements of vague intention or hope.  There is a misguided tendency, it is argued, to treat ICESCR rights as second-class rights.

79.  It is, in my view, not necessary for the purpose of this case to engage this particular debate, although I do not think that it is at all a question of second-class rights.  It is always a question of the particular right in issue and what measures are required to fulfil the obligations under the Covenant in respect of that right.  There are some obligations the immediate fulfilment of which are not resource-sensitive, including the obligation in article 2 itself “to take steps” towards the full realisation of the rights in the Covenant.  But it cannot feasibly be gainsaid that, without prejudice to that core obligation or to the non-discrimination obligations of articles 2(2) and 3, article 9 of the Covenant is resource-sensitive as is article 145 and therefore article 36 of the Basic Law.

80.  That much has been recognized by the Committee on Economic, Social and Cultural Rights:

(1)   “The concept of progressive realization constitutes a recognition of the fact that full realization of all economic, social and cultural rights will generally not be able to be achieved in a short period of time.  In this sense the obligation differs significantly from that contained in article 2 of the [ICCPR] which embodies an immediate obligation to respect and ensure all of the relevant rights.  Nevertheless, the fact that realization over time, or in other words progressively, is foreseen under the Covenant should not be misinterpreted as depriving the obligation of all meaningful content.  It is on the one hand a necessary flexibility device, reflecting the realities of the real world of the difficulties involved for any country in ensuring full realization of economic, social and cultural rights.  On the other hand, the phrase must be read in the light of the overall objective, indeed the raison d'être, of the Covenant which is to establish clear obligations for States parties in respect of the full realization of the rights in question.  It thus imposes an obligation to move as expeditiously and effectively as possible towards that goal.  Moreover, any deliberately retrogressive measures in that regard would require the most careful consideration and would need to be fully justified by reference to the totality of the rights provided for in the Covenant and in the context of the full use of the maximum available resources.”[17]

(2)   “The Committee … considers many of the provisions in the Covenant to be capable of immediate implementation … by way of example, articles 3, 7(a)(i) , 8, 10.3, 13.2(a), 13. 3, 13.4 and 15. 3.”[18]

81.  It is not my intention to examine the suggestion of immediate implementability of the cited articles, but I note that article 9 is not amongst them.  That is not to say that a State party has no obligation to take steps towards its fulfilment; merely to say that it is recognised that its ultimate fulfilment is sensitive to resources in the light of competing legitimate objectives.

82.  In relation to article 9 itself, the Committee has stated that measures designed to render social security available to all (presumably meaning to all in need of support and protection) may be constituted in a variety of acceptable ways: for example, contributory or insurance-based schemes; non-contributory schemes; and other forms of social security including privately run schemes and self-help or other measures.[19] The system should be established, it is said, under domestic law and “the schemes should also be sustainable, including those concerning provision of pensions, in order to ensure that the right can be realised for present and future generations.”[20]  (emphasis added).

83.  The reference in the General Comment No 3[21] to deliberately retrogressive measures is prayed in aid as reflected in the requirement of article 145 of the Basic Law for improvement and development of the system and it is said that the change from a one-year to a seven-year residential requirement is a deliberately retrogressive measure of the kind contemplated.  My answer to this suggestion is the same as the answer I have canvassed in relation to article 145, that regression is not, in this context, a snapshot concept and it is relevant to note the Committee’s concern that measures must be designed to render the system sustainable not only for present but also for future generations.

84.  In the event, the provisions of the ICESCR and the Comments of the Committee to which we have been taken, do not affect my interpretation of article 36 of the Basic Law.  

Discrimination

85.  In the court below the judge, correctly in my opinion, was of the view that the case boiled down to the question of discrimination.

86.  The essence of the argument is that the 2004 residential requirement differentiates between two categories of residents, excluding a wide class, and that the respondent has not justified the differentiation, so that the guarantee of equality provided by article 25 of the Basic Law and article 26 of the ICCPR (article 22 of the Bill of Rights) is flouted.

87.  The test is that stated in Secretary for Justice v Yau Yuk Lung[22]:

“20. … the guarantee of equality before the Law does not invariably require exact equality. Differences in legal treatment may be justified for good reason. In order for differential treatment to be justified, it must be shown that:

(1) The difference in treatment must pursue legitimate aim. For any aim to be legitimate, a genuine need for such difference must be established.

(2) The difference in treatment must be rationally connected to the legitimate aim.

(3) The difference in treatment must be no more than is necessary to accomplish the legitimate aim.”

88.  The aim of the differentiation seems self-evidently to me to be legitimate.  It was stated by the judge to be a differentiation designed in the context of finite public resources and rising social expenditure, to ensure the long-term sustainability of the provision of social security benefits in the light of the Government’s constitutional obligation under article 145 to develop and improve the social welfare system.[23]

89.  It also appears to me sufficiently clear that the measure taken, the impugned residential qualification, is rationally connected to that aim.

90.  The sole question, therefore, is whether the difference in treatment is no more than is necessary to achieve the legitimate aim.

91.  It is argued that in order to decide that last question, the judge applied too loose a standard of curial review.

92.  The recognised approach to the standard of review of laws and administrative decisions that differentiate in their impact upon individuals or groups is that a severe standard requiring particularly weighty justification is required where differentiation centres upon personal characteristics inherent to the individual such as race, gender or sexual orientation whereas differentiation based upon general social and economic considerations but not founded on characteristics inherent in the individual permit less stringent review, requiring rational justification.  See: Lau Cheong and another v HKSAR[24]; Fok Chun Wah v Hospital Authority and Secretary for Food and Health[25]; Regina (Carson) v Secretary of State for Work and Pensions[26].

93.  The judge concluded that length of residence as a ground for differentiation sat more comfortably with the second category.[27] A ground of appeal upon which much emphasis has been placed is that in that conclusion, the judge erred.

94.  It is said, first, that the right to social security is a fundamental right and, for that reason alone, reasons advanced for denying it to individuals or groups require particularly severe scrutiny.  Secondly, the argument continues, the differentiation is inherently an affront to individual dignity and therefore amenable to severe scrutiny, for it is directed at a group stereotyped by clear implication in the reasons given for their exclusion as unskilled, of low education and a likely burden upon society; added to which is the fact that most of those excluded are, or are likely to be, women, so that in fact the differentiation also has a gender-based impact.  Further, the point made is that no alternative, less sweeping, proposals appear to have been examined or canvassed; then, that the reasons or justifications advanced do not withstand logical analysis; and, finally, that in stating that in socio-economic matters “a substantial degree of deference must be accorded to the Government”[28], the judge has impermissibly diluted the court’s review obligation.

95.  With due respect to the care and conscientiousness which have underlined the arguments, I do not agree with these propositions.

96.  With regard to the first, notwithstanding that article 36 finds itself in that Chapter of the Basic Law entitled “Fundamental Rights and Duties of the Residents”, it is, for reasons I have provided, not an absolute right either by its nature or in the context of the Basic Law as a whole (the article 145 point).  Conferment of the right anticipates qualifying criteria and, given the terms of article 145 and the historical context, that must include the possibility of residential qualifications going beyond the mere establishment of the status of a Hong Kong resident.  It is accepted in this case that in and of itself a minimum period of residence is a permissible qualification.

97.  As for the second argument – the suggested stereotype categorisation of a kind that diminishes the dignity of the excluded individual – the risk of possible offence to dignity is, unfortunately, occasionally a consequence of any immigration policy which chooses to admit some and deny admission to others.  But such a denial is not directed at intrinsically objectionable grounds of differentiation: it is often directed at the lack of professional qualifications or financial means, at the economic position of an individual at a given point in time.  In any event a residential qualification, without more, impacts upon those excluded whatever their financial means or employment prospects.  Insofar as it might be answered that this is not a case concerned with immigration policy, but with social welfare policy and entitlement, the truth is that it is a blend of the two.  Because of the OWP scheme, the Government is not in a position to refuse entry to those with a one-way permit on the basis of normal immigration considerations.  What the Government does instead, in this unique situation, is to say that whilst the individual with a one-way permit has a right to enter the Region, the person who exercises that right does so in the knowledge that security benefits will not, save in exceptional circumstances, be available for the specified period.  As has been contended in argument, that may well constitute a harsh policy given that the objective of the OWP scheme is family reunion; yet the sole question for the court is one of legality, for which reason the court has to look at the justification advanced for the rule.  And the justification for a seven year rule is essentially an economic one designed to sustain the social welfare system.

98.  The point is that there are certain grounds for differentiation that strike at the core of our values and at the respect which those values dictate must be accorded the individual.  Thus, according to Lord Hoffman in Carson[29], which was a challenge by a British citizen against her exclusion from an annual cost of living increase because the challenged regulations denied  that increase to citizens no longer resident in the United Kingdom:

“Characteristics such as race, caste, noble birth, membership of a political party and … gender, are seldom, if ever, acceptable grounds for differences in treatment. In some constitutions, the prohibition on discrimination is confined to grounds of this kind … . But the Strasbourg court has given article 14 [of the European Convention] a wide interpretation, approaching that of the Fourteenth Amendment, and it is therefore necessary, as in the United States, to distinguish between those grounds of discrimination which prime facie appear to offend our notions of the respect due to the individual and not a statistical unit. On the other hand, differences in treatment in the second category (eg on grounds of ability, education, wealth, occupation) usually depend upon considerations of the general public interest. Secondly, while the courts, as guardians of the rights of the individual to equal respect, will carefully examine the reasons offered for any discrimination in the first category, decisions about the general public interest which underpin differences in treatment in the second category are very much a matter for the democratically elected branches of government.”

99.  We see the like theme – albeit in the context of the approach of an international court to the policies of national governments – in the decision of the European Court of Human Rights in Stec v United Kingdom[30] :

“The scope of this margin [of appreciation] will vary according to the circumstances, the subject-matter and the background. As a general rule, very weighty reasons would have to be put forward before the Court could regard a difference in treatment based exclusively on the ground of sex as compatible with the Convention. On the other hand, a wide margin is usually allowed to the State under the Convention when it comes to general measures of economic or social strategy. Because of their direct knowledge of their society and its needs, the national authorities in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds, and the Court will generally respect the legislature’s policy choice unless it is "manifestly without reasonable foundation”.

100.  Those different standards of scrutiny apply in effect whether the reviewing judicial body is a national or a supra-national court[31] .

101.  It is suggested in the grounds of appeal[32] that a person’s length of residence is a personal characteristic and that therefore a difference in treatment based upon residence is an invidious ground of distinction requiring strict scrutiny.  I do not consider it necessary to engage the difficult question of what constitutes a personal characteristic or whether there is for present purposes a material difference between an inherent characteristic over which the individual has no control and an acquired status, such as residence, which may be said to have become a characteristic[33].  It seems to me that at least where residence is a result of choice it is an extraneous circumstance of the individual at a given point in time rather than an immutable intrinsic characteristic, and that the difference in treatment in this case depends upon considerations of the general public interest, of economic and social strategy, and is not one which is based on that which has come to be described as a core ground.  I have no doubt but that the subject matter in present issue falls within the category which requires scrutiny of a less stringent kind and that in conducting its scrutiny, the court must necessarily recognise that governmental decisions in such an arena call for the making of difficult judgments which are reached in the thicket of multi-layered, often conflicting, policy considerations, usually after taking into account a variety of views, and in the context of finite resources intended to be divided to meet competing needs.

102.  Criticism is made on behalf of the applicant of the judge’s several references to the deference that must be accorded to the Government in the scrutiny exercise.  It is entirely obvious from a reading of the judgment as a whole that the judge was not thereby suggesting abdication of the court’s role of scrutiny, or that the court took as conclusively rational and reasonable whatever justification the Government offered.  He was saying no more than has been said in many cases in this jurisdiction and elsewhere, that the courts must necessarily recognize that in the realm of social and economic policy, that by reason of function, available information and experience, governments are better equipped to make such policy decisions than are the courts, just as the courts are better equipped to determine issues of law.  Governments determine policy; courts determine legality.  In determining legality, the courts may be required to examine the reasons advanced for a particular policy but the courts do so with these advantages and limitations in mind.

103.  I would myself prefer to jettison use of the word “deference” in the judicial review context, because it can give rise to precisely the type of misunderstanding that underlies the applicant’s argument.  I would instead respectfully endorse the sentiments of Lord Hoffman in R(Prolife) v BBC[34]:

“75.   My Lords, although the word “deference” is now very popular in describing the relationship between the judicial and the other branches of government, I do not think that its overtones of servility, or perhaps gracious concession, are appropriate to describe what is happening.  In a society based upon the rule of law and the separation of powers, it is necessary to decide which branch of government has in any particular instance the decision-making power and what the legal limits of that power are.  That is a question of law and must therefore be decided by the courts.

76.   This means that the courts themselves often have to decide the limits of their own decision-making power.  That is inevitable.  But it does not mean that their allocation of decision-making power to the other branches of government is a matter of courtesy for deference.  The principles upon which decision-making powers are allocated are principles of law.  The courts are the independent branch of government and the legislature and executive are, directly and indirectly respectively, the elected branches of government. Independence makes the courts more suited to decide some kinds of questions and being elected makes the legislature or executive more suited to deciding others.  The allocation of these decision-making responsibilities is based upon recognised principles.  The principle that the independence of the courts is necessary for a proper decision of disputed legal rights or claims of violation of human rights is a legal principle. … On the other hand, the principle that majority approval is necessary for a proper decision on policy or allocation of resources is also a legal principle.  Likewise, when a court decides that a decision is within the proper competence of the legislature or executive, it is not showing deference. It is deciding the law.”

104.  There is no question in such a situation of the court abdicating its duty to determine legality.  The court is always vigilant to determine legality but in doing so is required to recognise that the processes by which policymakers in a developed governmental milieu make decisions are complex and are not, in their detail, feel and considerations of balance, processes with which the judge is as familiar as is the policymaker, but that nonetheless “every exercise of governmental power must be justified in law”.[35]

105.  As for the suggestion that the policy decision reached was unlawful because it is not demonstrated that alternative solutions were considered, the argument misses the test. In considering whether the means chosen to address a legitimate aim go further than reasonably necessary to achieve that aim:

“… courts should have in mind that theirs is a reviewing role. Parliament is charged with the primary responsibility for deciding whether the means chosen to deal with a social problem are both necessary and appropriate. Assessment of the advantages and disadvantages of the various legislative alternatives is primarily a matter for Parliament. The possible existence of alternative solutions does not in itself render the contested legislation unjustified… . ”

Wilson v First County Trust Ltd (No 2) per Lord Nicholls[36]

106.  The logical consequence of a search for alternatives may be a search for the best solution.  Apart from the fact that the court will rarely be equipped to make such a determination, an attempt to do so would exceed its legitimate remit : see Mellacher v Austria[37].

107.  I consider, finally, the attack on the justifications advanced for the seven-year rule.

108.  That a tightening of the belt was necessary is amply demonstrated; by which I mean that ample justification has been provided for the contention that in order to sustain the viability of the social welfare system, the eligibility criteria required amendment.  That was the result of anticipated problems posed by an ageing population, a low birth rate, by the fiscal deficit at the time of the decision, the continuing flow of OWP holders with a concomitant absence of control of immigration intake from that direction, decreasing emigration and the fact that the scheme was a non-contributory one.

109.  In those circumstances and given that the fact of a residency requirement is not of itself objectionable, the question comes down to the length of the residency requirement.

110.  We may start with the proposition that a line must be drawn somewhere and that there will inevitably be hard cases falling on the “wrong” side of the line.  In the context of social welfare rights and residency requirements, recourse to jurisprudence elsewhere is of limited utility because the circumstances of each jurisdiction is unique.  Nonetheless, some broadly-set statements may usefully be examined.  In Mathews v Diaz[38], the Supreme Court held that Congress was entitled to impose qualifying conditions of admission as a permanent resident and five years continuous residence upon an alien’s eligibility for participation in a medical insurance programme.  The Court was satisfied that some duration or requirement was appropriate, in other words that:

“… it is unquestionably reasonable for Congress to make an alien’s eligibility depend on both the character and the duration of his residence. Since neither requirement is wholly irrational, this case essentially involves nothing more than a claim that it would have been more reasonable for Congress to select somewhat different requirements of the same kind.

We may assume that the five-year line drawn by Congress is longer than necessary to protect the fiscal integrity of the program. We may also assume that unnecessary hardship is incurred by persons just short of qualifying. But it remains true that some line is essential, that any line must produce some harsh and apparently arbitrary consequences and, of greatest importance, that those who qualify under the test Congress has chosen may reasonably be presumed to have a greater affinity with United States and those who do not. In short, citizens and those who are most like citizens qualify. Those who are less like citizens do not.

The task of classifying persons for medical benefits, like the task of drawing lines for federal tax purposes, inevitably requires that some persons who have an almost equally strong claim to favored treatment be placed on different sides of the line; the differences between the eligible and the ineligible are differences in degree rather than differences in the character of their respective claims. When this kind of policy choice must be made, we are especially reluctant to question the exercise of congressional judgment. In this case, since appellees have not identified a principled basis for prescribing a different standard than the one selected by Congress, they have, in effect, merely invited us to substitute our judgment for that of Congress in deciding which aliens shall be eligible to participate in the supplementary insurance program on the same conditions as citizens. We decline the invitation.”[39]

111.  It would be singularly unattractive and inappropriate in Hong Kong’s context to classify residents, especially those coming to join their families under the OWP scheme, as aliens but that is not the relevant point that emerges for present purposes from those passages in the Opinion of Justice Stevens.  What emerges is the common sense of the statement that the line must be drawn somewhere and that, unless the line be demonstrated to be a self-evidently unreasonable one, the court has no legitimate basis upon which to interfere.

112.  In argument for the applicant Kong, the rationale for choosing seven years has been attacked.  It is argued, first, that insofar as it was said by the policymakers that eligibility based on the seven-year residence requirement reflected the contribution a resident had made towards Hong Kong’s economy over a sustained period of time[40], the logic is flawed in that the needy, by definition, are unable to contribute economically and, further, that contribution to society does not necessarily follow from long residence.

113.  I think that there is validity in the criticism as far as it goes but it is not a criticism which destroys the essence of the point as a whole.  There is evidence that some residents, including OWP holders, do not stay in Hong Kong but move on at some stage before the passage of seven years.  Those who stay longer than a year or two are more likely to adopt Hong Kong as their permanent home.  Furthermore, we can, I think, take judicial notice of the fact that the work ethic in Hong Kong is strong and unemployment relatively low so that, generally speaking – though of course there are exceptions – those who stay in Hong Kong contribute more in various ways to this society the longer they stay.  And, yet further – the point made in Mathews v Diaz – the longer the residence, the greater the affinity to the adopted society.  There is a cogent argument that there will be many who have recently arrived to take up residence who nonetheless view Hong Kong as home, especially those who have come here to join their families, and may in some circumstances have a greater future, or present emotional, commitment to Hong Kong than some who enjoy the status of permanent resident.  But pursuit of that line of thought is to travel the impermissible route of contemplating what else might have been done, a contemplation more appropriately the province, in such a category of policy, of the policymaker.  It suffices to say that the essence of the point is as a whole not irrational.

114.  It is then said that there is no rational connection between the seven-year residence requirement and the stated objective of encouraging new arrivals to enter the labour market.  In this regard it is argued that there might be many reasons why new arrivals are unable to find gainful employment.  I am sure that that is so but, as a broad objective, it seems to me to be rationally connected with the aim.

115.  Much emphasis was placed upon the powerful judgments of the South African Constitutional Court in Khosa v Minister of Social Development and others[41], a case directed at the right of access to social security pursuant to the provisions of the Constitution of the Republic of South Africa, in which the Court addressed the suggested need to limit the cost of social welfare, put forward by the Government as a justification for excluding from certain social welfare rights permanent residents who had not resided in South Africa for five years.  The Court’s answer to that suggestion was that it was within the power of the State to control applications for permanent residence by excluding those who may become a burden on the State and that “if it chooses to allow immigrants to make their homes here it is because it sees some advantage to the state in doing so.  Through careful immigration policies it can ensure that those admitted for the purpose of becoming permanent residents are persons who will profit, and not be a burden to the State.  If a mistake is made in this regard, and the permanent resident becomes a burden, that may be a cost we have to pay for the constitutional commitment to developing a caring society, and granting access to socio-economic rights to all who make their homes here.”[42]

116.  These passages are prayed in aid for the proposition that if the Hong Kong Government chooses to allow immigrants to make their homes here under the OWP scheme, it is because it sees some advantage in doing so, namely, the attainment of the laudable goal of family reunion.

117.  The analogy is not apt.  The South African position and the Hong Kong position are as different as might be, not, one hopes, in the value placed upon human rights and dignity, but in their operative socio-economic and immigration settings.  South Africa is a vast country, with a population density dramatically different from that of Hong Kong, and with immigration pressures of an entirely different order, immigration pressures over which it has as much formal control as it desires.  The fact and nature of the OWP scheme is an elephant in the room which the applicant’s argument fails, with respect, to recognize.

118.  Then, it is said that the availability of other financial assistance schemes is neither here nor there, for they do not compare with the benefits available under the CSSA scheme.  And it is further contended that the discretion to waive the residence requirement is no substitute for the right, not least because the guidelines for the exercise of discretion stipulate that the mere fact of financial hardship is not sufficient.

119.  It may well be that other financial assistance schemes are not an adequate substitute but the fact of the discretion, the fact that it has in many cases been exercised favourably, the fact that those aged under 18 years are exempt from the criterion, and the fact that publicity is given to the criteria are to be looked at as a whole.  No one consideration is offered as sufficient in itself to justify the seven-year rule.  The policy was formulated as a result of a conglomeration of considerations and I see no basis upon which to conclude that the seven-year rule is not rationally connected to the legitimate aim which has been identified or that it goes further than is reasonably necessary to achieve that aim.

Conclusion

120.  Accordingly, I would dismiss the appeal in Kong’s case.

THE YAO CASE

The one-year rule

121.  It will be remembered that the order made by the Chief Executive in Council on 3 June 2003 was that :

“To be eligible for CSSA, a person must have been a Hong Kong resident for at least seven years and have resided in Hong Kong continuously for at least one year immediately before the date of application (absence from Hong Kong up to a maximum of 56 days during the one-year period is treated as residents in Hong Kong).”

122.  Mr Yao’s case concerned the second limb of that decision, namely, the one-year rule.

123.  As with the seven-year rule, those aged below 18 years are exempt from any prior residence requirement and in exceptional circumstances assistance may be granted at the discretion of the Director of Social Welfare to a person who does not meet that requirement.  Those who became Hong Kong residents before the seven-year rule came into effect, are required to satisfy only the one-year rule.

The facts of Mr Yao’s case

124.  Mr Yao’s circumstances are set out in the judgment of Cheung J and I gratefully adopt his summary:

“6. The applicant is a Hong Kong permanent resident and holder of a Hong Kong permanent identity card. He was born in Hong Kong in 1944 and is now almost 66 years old. He was educated up to Form 3 level. From about 1962 to 2006, the applicant worked continuously in the garment industry as a clerk. According to his unchallenged evidence, the applicant was employed by a Hong Kong textile manufacturing company in April 2006. The company subcontracted works to factories in Guangdong and Fujian provinces. The applicant was required by his employer to work on the Mainland and he was stationed mostly in Guangdong. On 31 August 2008, his employer gave him two months’ notice for termination of his employment, which became effective on 1 October 2008.

7. On 30 September 2008, the applicant returned to Hong Kong[43] .

8. After his return to Hong Kong, not surprisingly, given his age, the applicant has been unemployed despite active efforts to find employment.

9. On 1 December 2008, the applicant applied for CSSA on the ground of unemployment. At an interview on 17 December 2008, the applicant was told that he was not eligible for CSSA as he failed to satisfy the 1-year continuous residence requirement. (There was no difficulty with satisfying the 7-year residence requirement.) It was also explained to him that he was not considered to be in immediate genuine hardship for the purposes of invoking the discretion of the Director of Social Welfare to waive the 1-year continuous residence requirement. The applicant withdrew his application for CSSA on the same day, but he was given to understand that he might make an application again when necessary in future.

10. On 29 January 2009, the applicant made another application for CSSA. At an interview on 5 February 2009, the applicant was again told that he was not qualified for CSSA as he failed to meet the 1-year continuous residence requirement. The applicant requested the Director of Social Welfare to exercise his discretion to waive the 1-year continuous residence requirement and explained that his absence from Hong Kong was due to working on the Mainland. After further investigations, including a home visit, the Director concluded that the applicant’s case did not fall within his guidelines for waiving the 1-year continuous residence requirement. The applicant was notified of the rejection of his application for CSSA on 17 February 2009.

11. On 25 March 2009, the applicant lodged an appeal to the Social Security Appeal Board against the decision of the Director. However, the Appeal Board upheld the Director’s decision and by a letter dated 5 June 2009, it notified the applicant of the decision.

12. On 22 June 2009, the applicant applied for leave to apply for judicial review to challenge the respective decisions of the Director and the Appeal Board. Leave was granted on 26 June 2009.

13. Very properly, the Appeal Board has not taken any active part in these proceedings (see Dato Tan Leong Min v Insider Dealing Tribunal [1999] 2 HKC 83, 99A-I).  On the other hand, the Society for Community Organisation, a concern group set up in 1971 to promote the rights and interests of the under-privileged in our society, has joined in these proceedings as an interested party.  Through its representative, Mr Richard Tsoi, the interested party has actively participated at the substantive hearing.”

The grounds of challenge

125.  The grounds of the application for judicial review were that the one-year rule violates:

(1)   article 36 of Basic Law: the argument, as with the seven-year rule argument, is that the rule limits the right of Hong Kong residents to social welfare, that that limitation has not been prescribed by law and in any event does not satisfy the proportionality test;

(2)   article 145 of the Basic Law: because the rule is not one for the “development and improvement” of the social welfare system but is a regressive measure.

(3)   article 31 of the Basic Law which guarantees that a resident shall have freedom to travel and to enter or leave the Region.  The argument is that the rule constitutes a prohibited obstacle to free movement because it deters travel, is not prescribed by law and in any event is a measure beyond that necessary to accomplish such legitimate purpose as has been suggested for the restriction;

(4)   article 33 of the Basic Law which provides that Hong Kong residents shall have freedom of choice of occupation.  The argument here is that the rule forces persons such as Mr Yao from taking up any employment that requires the employee to work outside the Region on a periodic or short-term or long-term basis; and

(5)   article 25 of the Basic Law which states that all Hong Kong residents shall be equal before the law, since it differentiates between categories of Hong Kong residents for an aim which is not legitimate or, if legitimate, is a measure not rationally connected to the aim and is in any event more than is necessary to accomplish the aim.

The stated aim and its purported justification

126.  The background to the measure is the same as that to the seven-year rule.  It springs from the recommendations of the Task Force on Population Policy and is said to be designed to ensure the allocation of public resources on a rational basis and the long-term sustainability of heavily subsidised public services.[44]

127.  The Report stated that because of rising public expenditure in providing various highly subsidised services, the implications for public finances had become an issue of major concern[45] and in the passages immediately following this comment in the Report, came the proposal for the seven-year residence rule.

128.  There then followed this paragraph:

“More and more residents of Hong Kong are moving to foreign countries or the Mainland to live and work nowadays. They probably contribute less to the local economy and are paying no local taxes. There is concern whether they should enjoy the same privileged access to subsidized public services as other residents once they return. The Task Force considers that this concern involves complex issues. Some residents, though away from Hong Kong for a long period of time, may still maintain close links with Hong Kong through property or other asset ownership, supporting the livelihood of residents (e.g. their relatives) in Hong Kong, charitable donations, etc. Time does not permit the Task Force to get into this matter in detail and come to a conclusive recommendation. We suggest that the Administration should review it later.”[46]

129.  That was all that was said about the matter at that stage and the “Recommendations regarding Eligibility for Public Benefits”, which immediately followed the cited paragraph, contained no proposal for a one-year rule.

130.  In a Paper presented to the Legislative Council Panel on Welfare Services in March 2003, the Panel was told that the Task Force had recommended not only the adoption of the seven-year requirement but also a review in the longer term of access to subsidised benefits by residents “absent from Hong Kong for a long period of time.”

131.  In a Legislative Council brief dated 3 June 2003 the Council was informed of the order made by the Chief Executive for the adoption of the new residence requirements.  The only justification stated for the one-year rule was that:

“This additional requirement aims to discourage people who have lived outside Hong Kong for a long time from relying on CSSA as soon as they return to Hong Kong.”[47] (Emphasis added)

132.  It was also noted in that Brief that:

(1)   there existed, prior to the decision of the Executive Council, disparities in qualification requirements as between the requirements for CSSA, disability allowance and old age allowance and that it was intended to bring them all into line;

(2)   there were other forms of assistance available to persons in need and that the Director would have a discretion to waive the residence requirements in cases of genuine hardship.

133.  In late June 2003, a paper was put to the Finance Committee of the Legislative Council in anticipation of that Committee’s discussion on 27 June at which it was invited to approve the new residence requirements.  Again, we see much the same material and justification for the new measures placed before Committee as had been placed before the Panel.  The Committee was told that there was a strong case for the seven-year rule and a number of reasons were offered for the proposed change: that CSSA was entirely financed by taxation; that the new rule would encourage new arrivals to try their best to stand on their own feet before turning to welfare assistance; that it was important to send a clear message to potential migrants that they should plan carefully and make sure they had sufficient means to support themselves in Hong Kong; that there were other forms of assistance; and that the existence of the discretion to waive the residence requirement was there in cases of genuine hardship.[48] The “additional requirement” of the proposed one year rule was aimed to discourage people who have lived outside Hong Kong for a long time from relying on CSSA as soon as they returned to Hong Kong.  After discussion, the Committee approved the proposals.

134.  In her affirmation in opposition to Mr Yao’s application, Ms Choy, the Principal Assistant Secretary for Labour and Welfare, said that as was apparent from this history “ … the introduction of the 1-year continuous residence requirement not only serves to meet the aim of ‘discouraging people who have lived outside Hong Kong for a long time from relying on CSSA as soon as they return to Hong Kong”, but also served to align the residence requirements for CSSA, OAA and DA[49]; to address public disquiet about burgeoning welfare spending on CSSA; to respond to the general consensus in the community that the residence requirement for CSSA should be tightened; to provide an effective long-term sustainable safety net for the financially vulnerable; and “to provide a rational basis for the allocation of public resources in the light of fiscal constraints and ever rising demands and to sustain a non-contributory social security system”.[50]”

135.  Ms Choy produced to the court below a table which showed the cumulative number of CSSA applications from June 2007 to end June 2009 in which the applicants did not meet the one-year requirement.  In that period there were received 110223 CSSA applications; of which number 5149 applied for the waiver of the one-year requirement of which, in turn, 3414 were approved and only 111 rejected, with 1600 withdrawn.

136.  In 2009 a further paper was submitted to the Welfare Panel’s Subcommittee on Poverty Alleviation, in which the aim of the one-year rule was, once again, stated to discourage people who had lived outside Hong Kong for a long time from relying on CSSA as soon as they returned to Hong Kong.

137.  Ms Choy’s contention is that this illustrated that the one-year rule “serves to discourage people who have lived outside Hong Kong for a long time from relying on CSSA as soon as they return to Hong Kong, while striking a reasonable balance between the interests of various sectors of the community having regard to the long-term sustainability of a social security system and the need for a rational basis on which our public resources are allocated.  The existing residence requirements were formulated following extensive deliberations on the topic, including debates and discussions by the Legislature.”[51] She points out as well that in the year 2007-2008 total recurrent public expenditure on social welfare reached $33.9 billion, taking up 16% of the total recurrent public expenditure amongst various policy areas Social Security cost took up the lion’s share (73%) amongst the various welfare services. [52]

138.  As for the operation of the system, the example given in the evidence filed[53] is of an application made, say, on 24 May 2010 by a person who has been absent from Hong Kong for a period of 90 days in the previous year, which is 34 days more than the 56 days permitted by the rule.  Upon his initial application in May for CSSA, that applicant will be notified of his ineligibility and advised to re-apply after the expiry of an additional 34 days, assuming that he is not again absent during the remaining 34 days.

The judgment

139.  I intend to summarise in more detail than is usually the case upon an appeal of this kind, the judge’s reasoning and conclusions.  I do so because (save only in regard to his conclusion that no legitimate aim was shown), his reasoning is, in my judgment, compelling and the examples he offers of the effect of the one-year rule are cogently illustrative of the mis-match between, on the one hand, the intended targets of the rule as identified in the policymaker’s papers to the Legislative Council and in the affirmations to the court and, on the other, the swathe of those in fact caught by the rule whose connection with, and commitment and contribution to, Hong Kong is not in the least diminished by their absence.

140.  The judge noted that in Mr Yao’s case, the one-year issue had become academic since the grant of leave because he had since been residing in Hong Kong for over one year and had therefore become entitled to apply once more for CSSA.  However, the challenge raised questions of general importance and, in accordance with established principle, he acceded to the suggestion that court should hear the substantive application.

141.  The judge first addressed the issue of discrimination which in this case was concerned with the difference in treatment of permanent residents.  He was satisfied that the issue did not concern a ground of differentiation which was inherently invidious or suspect and which on that basis attracted the closest scrutiny.  But, he added, the fact that where considerations of the general public interest, such as social economic policy, were engaged the scrutiny was less intense than in the “suspect grounds” category of case, did not entitle the court to abdicate its supervisory responsibility.

142.  In relation to the question whether the stated aim was a legitimate aim, he said the stated aim was “to discourage people who have lived outside Hong Kong for a long time from relying on CSSA as soon as they returned to Hong Kong”. Relying on the passage from the judgment of Chief Justice Li in Secretary for Justice v Yau Yuk Lung which states that “for any aim to be legitimate, a genuine need for such difference [in treatment] must be established”,[54] he said that the problem with the stated aim was the lack of sufficient evidence to establish it as a genuine need.  The Report of the Task Force contained no detailed discussion, he remarked, of the social, economic or financial problems, if any, caused by those who had lived outside Hong Kong for a long time and who applied for CSSA as soon as they returned to Hong Kong.  As to the suggestion in the Report that those who move to foreign countries or to the Mainland to live and work probably contributed less to the local economy than did those who stayed, he noted that the same part of that Report recognised that the issue was complex since some residents, even though away from Hong Kong for a long time, still maintained close links with Hong Kong through property asset ownership, supporting the livelihood of relatives in Hong Kong, charitable donations and the like.  Since the burden was on the Government to justify differential treatment to demonstrate a genuine need, the evidence was hardly sufficient.

143.  He noted as well that the various papers provided for the Legislature’s consideration were bereft of any detailed analysis to back the suggestion that there was a genuine need to discourage people who had lived outside Hong Kong for a long time from relying on CSSA.  There were no estimates, for example, of how many people each year were returning to Hong Kong after staying away “for a long period of time” and how many applied for CSSA upon return.  The figures and data contained in the various papers and in the Task Force Report were directed essentially at the seven-year requirement and had little to do with the one-year idea.

144.  He noted that the figures produced for his consideration for the years 2007 to 2009 showed, if anything, that those who turn to CSSA as soon as they returned to Hong Kong after living outside comprised a very minor proportion of the total CSSA applications and given the even smaller number who failed to obtain a waiver, it was difficult to see how this category of person could, when viewed in full context, cause a significant strain on the finite resources available.  He was satisfied that the Government had failed to demonstrate a genuine need for the differential treatment.

145.  But that aside, it was difficult to see, in his view, that the Government had discharged its burden of showing that the measures were rationally connected to the suggested aim and, more particularly, that the measures went no further than reasonably necessary to achieve the aim.

146.  All that was required for a resident to fall foul of the rule was for him or her to be absent for more than an aggregate of 56 days in the year immediately preceding the application.

147.  A central point made by the judge was that an absence of a mere 56 days in the year “is simply not an absence ‘for a long time’ within the plain and ordinary meaning of that phrase… regardless of how much deference the court is bound to accord to the Government’s decisions in matters of the present type.”[55]

148.  He offered a series of examples to illustrate the impact of the rule and how palpably ill it sat with the core suggestion offered in paper after paper and in these proceedings that it was acceptable because it was directed at long time absentees:

(1)   It engaged the permanent resident who had been away for 60 days as it did the permanent resident who had been away for 60 years.

(2)   It caught the Hong Kong permanent resident who spends weekends in Shenzen because that is where his wife and children live and it catches him even though he cannot possibly be described as someone who has lived outside Hong Kong for a long time;

(3)   It brought within its ambit the civil servant sent to attend a course overseas as part of his training, another category of person who could hardly be described as someone who had lived outside Hong Kong for a long time.

(4)   The volunteer worker who chose to stay behind in an area affected by a natural disaster on the Mainland to help victims or orphans and did so for, say, half a year – he too, if he returned to find himself in financial straits, was relegated to waiting out the required period before he could seek assistance with any assurance of relief; an assurance not provided by the existence of a discretion.

(5)   The patient receiving medical attention, perhaps for a matter of months, on the Mainland was precisely the type of person who might need assistance upon his return,

(6)   The elderly parent who spent a few months with her children or relatives overseas or on the Mainland – she too was lumped into the same category as the person who years ago had left Hong Kong.

149.  The judge accepted that, as with the seven-year rule, a line had somewhere to be drawn but in his judgment, to draw a line at 56 days was to draw it at a self-evidently unreasonable point.

150.  He noted as well that the rule operated indiscriminately, regardless of the reasons for the absence.  The rationale had been advanced that those who were away from Hong Kong “for a long time” made a contribution less than that of those who were not away and had a lesser commitment to Hong Kong but if that was a justification, it was a sweeping statement which took no account of the reason for absence which, if examined, may well in individual cases reveal that the absentee’s contribution and commitment to Hong Kong (take, for example, the civil servant sent on a lengthy course abroad) had not been diminished by his absence. Similarly, the applicant in the present case required by his employer to work mainly on the Mainland – what of his contribution as an employee to his Hong Kong employer?  What of his connection with and commitment to Hong Kong?  It was one thing to direct such a policy at those who had emigrated and had been away in a foreign country for years; quite another to alight upon such a short period without even inquiring into the reasons for and circumstances of absence.  The rational connection, he found, between aim and measure was missing and the measure went well beyond that necessary to achieve the purported aim.

151.  The fact that the rule operated only to suspend applications for such period as the applicant had been absent for more than 56 days made no difference to the judge’s view of the matter.  As for the discretion, the guidelines governing the exercise of discretion did not even require the decision-maker to consider the reason for the applicant’s failure to meet the one-year rule.  The objective of aligning the residence requirements in the eligibility criteria for various social security schemes was neither here nor there, if the rule itself was fundamentally flawed.  Furthermore, he remarked, the evidence failed to show “what, if any, impact on those who had lived outside Hong Kong for a long time and who had applied for CSSA immediately upon their return were making on the system as a whole or what the situation would likely be if no action was to be taken to address the concern.”[56]

152.  As for the suggestion that the rule provide a rational basis for the allocation of public resources in the light of fiscal constraints and to sustain a non-contributory social security system, the judge remarked that there was “simply no or insufficient evidence to suggest that the introduction of the [one-year rule as opposed to the seven-year requirement] was necessary to achieve the aim.”[57] For these reasons, he held that the one-year rule failed the justification test and therefore constituted an unconstitutional discrimination against those residents covered by it.

153.  In relation to the argument on the restriction upon the right to travel, the rule, he held, imposed an effective sanction upon anyone travelling outside Hong Kong for a total period exceeding 56 days in a year; that the only way to avoid the suspension was not to travel: and that that plainly was a restriction on the right to travel.  That restriction failed the proportionality test and therefore, constituted an infringement of the protected right.

154.  There was no need in the event for him to address the argument which concentrated upon choice of occupation under article 83 of the Basic Law.

155.  Accordingly, the judge quashed the decisions of the Director of Social Welfare and of the Social Security Appeal Board in relation to Mr Yao and he declared the requirements of the one-year rule to be unconstitutional.

Grounds of appeal

156.  The Director contends that the judge imposed an excessive burden on the Government to justify the one-year requirement, particularly given the recognised approach that the court should be exceptionally slow to interfere with a governmental assessment made in the context of socio-economic policy and the allocation of limited financial resources.

157.  It is argued that the judge confused the question of legitimate aim with that of proportionality for he failed to recognise that the legitimate aim in question was that of seeking to restrict public expenditure on welfare services. He failed further, it is argued, in his application of the proportionality test by not paying proper regard to the principle that at the end of the day it is for government in such matters to draw a line which will inevitably involve hard cases falling on the wrong side of that line, and that having regard to the need for a workable rule and for certainty, the court should not interfere with a line the effect of which is on the whole beneficial: see R (Animal Defenders) v Culture Secretary.[58] The rule, it is said in the Grounds of Appeal “achieves the objective of excluding from CSSA many people who have less strong links with Hong Kong.”[59]  The judge furthermore failed to accord sufficient regard to the discretionary provisions and to the shortness of time that a person caught by the rule would have to wait before becoming eligible.  Whilst the number of applicants for CSSA seeking exemption from the one-year rule was relatively small, the cost of providing CSSA to that group was not insignificant, and it is said that this Court is further entitled to take into account that between the date of judgment (June 2010) and end 2010 there was evidenced an increase of 168 cases in this category per month, an increase of about 80%.

158.  In relation to the right to travel, the same arguments as to justification and to the judge’s approach are made, with the added point that the infringement upon the right to travel is in the context of this particular rule minimal.

159.  There is a respondent’s notice which addresses the suggested infringement of article 36 of the Basic Law and, further, invites the Court to engage the freedom of choice of occupation issue.

160.  The Court had as well the advantage of submissions by Mr Tsoi Yiu Cheong who appeared on behalf of the interested party, the Society for Community Organisation.  He provided us with written as well as oral submissions and with documentary evidence and we are grateful for his measured presentation.

Analysis

161.  I would respectfully depart from the finding of the learned judge that there was not established a legitimate aim for the one-year rule.  Our difference in this regard stems from the identification of the aim.  Cheung J identified the aim as the discouragement of people who had lived outside Hong Kong for a long time from relying on CSSA as soon as they returned to Hong Kong; whereas, so it seems to me, the aim was the restriction of public expenditure in order to sustain the welfare system as a whole.  The means by which that aim was to be achieved was, in addition to the seven-year residence rule, the exclusion from the scheme of those who were said, by the resulting policy, to have lived outside Hong Kong “for a long time”.

162.  The aim which I have identified seems to me to be a legitimate aim. If, for example, the aim was one which was contrary to public policy or if the stated aim were a cover for a hidden motive, the aim would not be legitimate.[60]  But there can be and is no such suggestion in this case.

163.  The problem with the Secretary’s case is with the stated justification not for the aim but for the measure adopted to achieve the aim.

164.  I accept that the test for justification of the one-year rule is the same as that for the seven-year rule; that the measure falls under the umbrella of policy matters of a kind with which the courts should be slow to intervene.  I accept as well that the line must be drawn somewhere and that the court should only intervene where that line has been drawn at a self-evidently unreasonable point.  But, as I have said before in this judgment and as the judge said in the court below, the court nonetheless retains a function of scrutiny and if the facts drive the court to the conclusion that the line has been arbitrarily drawn or drawn in such a way as to be substantially out of kilter with the reasons given for drawing the line at that point or juncture, the court may then conclude that the policy is unlawful.  The point was made in this way by Lord Neuberger in R (RJM) v Work and Pensions Secretary[61]:

“56. In my view, the discrimination in the present case was justified, in the sense that the Government was entitled to adopt and apply policy at issue. This is an area where the court should be very slow to substitute its view for that of the executive, especially as the discrimination is not on one of the express, or primary, grounds: see R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173, paras 14-17 ( per Lord Hoffman) and paras 55-58 (per Lord Walker of Gestingthorpe). Further, it does not seem to me to be unreasonable for the Secretary of State to take the view that he should be encouraging the disabled homeless to seek shelter and help. Similarly, I do not think it possible to characterise as unreasonable his view that the disabled will be less likely to need a supplement if they are homeless than if they are not.

57. The fact that there are grounds for criticising, or disagreeing with, these views does not mean that they must be rejected. Equally, the fact that the line may have been drawn imperfectly does not mean that the policy cannot be justified.  Of course, there will come a point where the justification for a policy is so weak, or the line has been drawn in such an arbitrary position, that, even with the broad margin of appreciation accorded to the state, the court will conclude that the policy is unjustifiable.  However, this is not such a case, in my judgment.”

165.  I do not say that it is unreasonable for the appellant Secretary, in the circumstances with which we are concerned, to have decided to restrict public expenditure on social welfare by adopting a measure designed to exclude from entitlement, at least for a while after they return, those who have lived outside Hong Kong “for a long time” on the basis that such people may be taken to have contributed less to and to have a weaker connection with or commitment to Hong Kong than others.  But that is not the measure which has been adopted.

166.  The measure which has been adopted is one that catches within its net those who, palpably, have not been absent from Hong Kong for “a long time” within any sensible meaning of that phrase in the context of this issue.  A person who leaves a meeting for half an hour may be said to have been away from the meeting for a long time.  A person who lives in a region for seven years or more and then goes away, perhaps for only a couple of days at a time in the course of the 10^th or 20^th year of his residence for a total of 57 or 70 or 90 days cannot reasonably be described as someone who has, for that reason, “lived outside Hong Kong for a long time.”  And, further, the examples of commonplace situations offered by the judge graphically demonstrate the illogicality of suggesting that persons such as those illustrated by those examples are people whose commitment or contribution to Hong Kong is diminished.  In many instances, no doubt such persons will have made a greater contribution to Hong Kong, or have a greater commitment to it, than others who do not fall foul of the one-year rule.

167.  My emphasis on the phrases used is not an exercise in reading comments made by policymakers as if they were used in a statute.  The emphasis is, I think, realistic because those phrases and specific justifications were advanced time and again by the policymakers, to the Executive Council, the Legislative Council Panel and the Finance Committee, as well as to the court.  The point is this, that the policymakers and the decision-makers took the view that there was a sound basis for excluding from entitlement those who had lived away from Hong Kong for a long time and for giving them notice that upon their return, they should not expect immediate entitlement to welfare benefits.  That view and that approach can hardly be said to have been unreasonable.  No one suggests that it is.  And no one could cogently suggest that the drawing of a line which excluded that category of person was unreasonable and or that there was only one point, one particular period of years, which could reflect the time at which a person had lived elsewhere for a long time or had cut or reduced his commitment or contribution to Hong Kong.  But what one can do, sensibly and reasonably, is recognise a line which has been drawn at a point that simply does not reflect the rationale offered.  And that, in my judgment, is what has happened in this instance.

168.  It is said that this is to ignore the existence of the discretion and the fact that funds are indeed saved by the rule.  In terms of CSSA applications as a whole, the numbers who were effectively excluded, after the exercise of the discretion, appears to have been small but it is an odd scheme that requires an application by those whom it was evidently not intended to exclude in the first place.  Much paperwork was expended in explaining to the Legislature the rationale for the seven-year rule, by which comment I intend no criticism.  My point is, rather, that whilst it would be unfair to describe the one-year rule as almost an afterthought, it certainly had considerably less attention paid to it and I see no evidence of any analysis or recognition – even to this day – of its impact on the type of individuals to whom the examples given by the judge relate.  I see no attempt at marrying that category of individuals with the group of long-term absentees at whom the cut-off point was said by the papers and affirmations to be directed.  In my judgment, the judge was justified in holding the one- year rule to be unlawful.

169.  It is not necessary in the circumstances to address the other issues raised.  The objections to the judge’s findings in relation to the right to travel outside Hong Kong are along much the same lines as the grounds touching upon the discrimination issue, save that it is suggested that the argument here is even stronger because the travel restriction is indirect and that the effect of the restriction is limited.  For the same reasons as I uphold the judge in relation to the discrimination argument, I agree with his conclusion as to the non-compliance of the impugned decisions with article 31 of the Basic Law.

Conclusion

170.  Accordingly, I would dismiss the appeal in Yao’s case.

Hon Lam J:

171.  I respectfully agree with the judgment of the Vice-President.  I only wish to contribute by way of some additional thoughts on the question of discrimination which, as my Lord observed, is the core question in these appeals.

172.  Properly understood, the criticism of Professor Chan in respect of the judgment of A Cheung J (as he then was) on discrimination mainly directs towards the intensity of His Lordship’s scrutiny of the seven-year rule.  And the challenge is not directed towards a residence requirement simpliciter.  At the hearing of this appeal, Professor Chan made the following submission,

“I am not saying a residence requirement by itself is an impermissible criterion [for CSSA benefit], I am only saying that 7 years is unreasonable as it raises the bar to such an extent that is not justifiable.”

173.  In other words, Professor Chan accepted that some form of residence requirement can be imposed as a prerequisite for CSSA benefit without any infringement of Article 36 reading together with Article 25.  In my view, this must be right.

174.  Even though Article 25 provides that all Hong Kong residents shall be equal before the law, it does not mean that all Hong Kong residents shall be treated equally in terms of entitlement to CSSA benefit.  As emphasized by the Chief Justice in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335 at paras.19 and 20, identical treatment is only required in comparable situations, see also Fok Chun Wa v Hospital Authority CACV 30 of 2009, 10 May 2010, paras.73 and 74.  The corollary of this proposition is put by Lord Hoffmann in R (Carson) v Work and Pensions Secretary [2006] 1 AC 173 at para.14: “There is obviously no discrimination when the cases are relevantly different.”

175.  As observed by my Lord, a residence requirement is not a criterion falling within the suspect category in the context of discrimination.  In this respect, see also the discussions in Carson by Lord Hoffmann at paras.16-17 and Lord Walker at paras.55 to 60 and that of Lord Walker at para.5 in R(RJM) v Work and Pensions Secretary [2009] 1 AC 311.  Though the residence of a person can loosely be regarded as a personal attribute, it is not a characteristic that is innate, immutable and closely connected with an individual’s personality.  Though I would not rule out the possibility of having a case of discrimination based on such characteristic, a policy pertaining to allocation of finite public resources using it as one of qualifying criteria can, in most cases, be justified as setting out the relevant basis for differential treatments between those coming within the scope of the policy and those outside its scope.  When such criteria is justified, it is no more than a reflection on the priority placed by our community on those who have a lengthier connection with Hong Kong in terms of the use of our limited resources.  Money saved from the adoption of such a policy would be used for other public purposes serving the interest of our community as a whole, see para.118 of the judgment of the learned judge at the court below. 

176.  In the context of a residence requirement under the CSSA policy, the concept of equality under Article 25 has to be considered in the light of the width of the definition for residents under Article 24.  Residents include non-permanent residents who do not have right of abode in Hong Kong.  Under Article 24(4) of the Basic Law, non-permanent residents are those who are qualified to obtain Hong Kong identity cards in accordance with the laws of Hong Kong.  The relevant piece of legislation is the Registration of Persons Ordinance Cap.177 and its subsidiary legislation.  Basically, it covers everyone who is given permission by the Director of Immigration to land and stay in Hong Kong for more than 180 days.

177.  Further, as canvassed by the Vice-President, social welfare can cover many types of subsidized public services and facilities made available to the residents in Hong Kong.  CSSA is but one form of social welfare.  The Basic Law does not prescribe that for those in need, social welfare must be provided by way of CSSA.  Article 145 empowered the Government to formulate on its own social welfare policies in the light of the economic conditions and social needs.  The non-availability of CSSA should not be equated with the complete withdrawal of social welfare for those who cannot meet the residence requirement.  The court can take judicial notice that in Hong Kong social support and assistance are provided to those in need directly by the Government as well as by some voluntary agencies (many of them are subsidized by subvention from the Government or other public funding including the Community Chest).  In the formulation of its policy as to CSSA, the Government must be entitled to take this into account.

178.  Viewed thus, it is not difficult to see the good sense of having some form of residence requirement in terms of entitlement to CSSA benefit.  An appropriate residence requirement, like a means test, serves to identify the relevant group of residents who could receive social welfare benefit by way of CSSA.  No-one could sensibly gainsay the adoption of a means test as an infringement of Article 25.  In my view, bearing in mind what have been said above, equally there could not be any Article 25 objection to a residence requirement per se as a relevant criterion for allocation of finite public resources. 

179.  Professor Chan contended that the crucial question here is the length of the residence requirement.  In the judgment of the court below, A Cheung J (as he then was) noted that a drastic increase as to the length of the residence requirement may go beyond a matter of degree and become a matter involving questions of principle, see para.116 of the judgment.

180.  At para.70 of his written submissions in this appeal, Professor Chan submitted that the learned judge’s approach amounted to a holding that the court should give deference or margin of appreciation to government policies regarding allocation of resources.  After referring to the some comments on the doctrine of deference in other cases, Professor Chan contended at para.74,

“At the end of the day, the role of the court is to decide issues on the basis of evidence and arguments. The court will have to decide which arguments are more persuasive, bearing in mind the nature of the issues involved. This applied even within the range of choices of reasonableness --- the judiciary is not to leave the decision to the executive but rather that the weight of the argument is such that the court will follow or support the decision of the executive. It still requires the court to assess the strength of evidence and arguments, and not to determine a constitutional issue based on a classification of the nature of rights in abstract.”

And then at para.75,

“Putting it differently, the court has a duty to review the justifications put forward to justify any restriction of a fundamental right. In doing the review, the court will take into account the nature of the subject matter. Ultimately, it boils down to an issue of proportionality.”

Counsel cited the judgment of Ma CJHC (as he then was) in Kwok Hay Kwong v Medical Council [2008] 3 HKLRD 524 at para.25 to support his submissions.

181.  Though the learned judge did refer to deference and discretionary judgment of the Government at some parts of his judgment, reading the judgment as a whole it is plain that the learned judge had also scrutinized the seven year policy by reference to the justification test.  With respect, I do not think the learned judge had determined the issue based on a classification of the nature of rights in abstract.  Nor do I see any basis for suggesting that the learned judge had failed to have regard to the evidence in assessing the strength of the argument advanced on behalf of the Director to justify the policy.

182.  Kwok Hay Kwong is a case about freedom of expression and the justification test was considered in the context of justification for restriction of constitutional rights.  In contrast, in the present context, the justification test is applied (in accordance with Yau Yuk Lung) for the purpose of determining whether the differential treatment can be justified.  At para.22 of the judgment in Yau Yuk Lung, the Chief Justice stressed that where a difference in treatment is justified there is no discrimination.  The conceptual distinction is highlighted,

“Unlike some other constitutional rights, such as the right of peaceful assembly, it is not a question of infringement of the right which may be constitutionally justified.”

183.  Therefore, with the greatest of respect to Professor Chan, it is inapt to refer to the justification for restriction of fundamental right in the present context.  There is no right to equal treatment in all cases irrespective of the differences between the situation of a claimant and another person.  When the court addresses the question as to the relevance of a particular difference in personal characteristic, it is not seeking justification for restriction of the right to equality.  Rather, the court examines the prior question of whether the right of equality is engaged at all.  Though the contents of the justification test appear to be the same in these different contexts, one must not lose sight of the ultimate issue in the context of Article 25, viz. whether the cases are relevantly different.  As Lord Hoffmann pointed out at para.15 in Carson, the answer to that ultimate question is partly a matter of rationality and partly a matter of values.  Because of that, in discrimination cases a distinction in terms of the intensity of scrutiny is drawn between the suspect grounds of differential treatment and the other grounds.  As mentioned, a residence requirement does not fall within the suspect grounds and the references to deference and discretionary judgment by A Cheung J should be read in that light.

184.  By way of contrast, Yau Yuk Lung is a case about differential treatment based on a suspect ground: sexual orientation.  Therefore the Court of Final Appeal needed not and did not examine in that case the intensity of scrutiny in respect of alleged discrimination on non-suspect ground.

185.  The distinction between the two types of grounds was explained by Lord Hoffmann in Carson at paras.15 and 16.  What His Lordship said at para.16 is of great importance for present purposes,

“There are two important consequences of making this distinction. First, discrimination [based on suspect grounds] cannot be justified merely on utilitarian grounds, e g that it is rational to prefer to employ men rather women because more women than men give up employment to look after children. That offends the notion that everyone is entitled to be treated as an individual and not a statistical unit. On the other hand, differences in treatment [based on non-suspect grounds] (eg on grounds of ability, education, wealth, occupation) usually depend upon considerations of the general public interest. Secondly, while the courts, as guardians of the right of the individual to equal respect, will carefully examine the reasons offered for any discrimination in the first category, decisions about the general public interest which underpin differences in treatment in the second category are very much a matter for the democratically elected branches of government.”

186.  At para.32 in Carson, Lord Hoffmann gave an explanation as to why what in Hong Kong is known as the justification test came to be applied in some discrimination cases.  In my respectful view, that may account for what happened in Yau Yuk Lung.

“It might be more logical to confine question (iv)[62] to justification for different treatment of cases which were not relevantly different, eg to achieve some legitimate teleological or administrative purpose, such as correcting the effect of past discrimination or the administrative convenience of having clear distinctions. That would explain why in such cases the courts insist that the discrimination must be necessary and proportionate for the object to be achieved.”

187.  It is also noteworthy that none of their Lordships in Carson decided the case by reference to the justification test in terms of going through the detail reasoning in respect of each element in that test.  Though the comment was made with regard to the Michalak test as opposed to the justification test, their Lordship emphasized that the question of discrimination should not be determined by mechanically going through a series of questions.

188.  At para.30 Lord Hoffmann referred to the overlap between the comparator question (question (iii) in the Michalak test) and the justification question (question (iv) in that test) and Laws LJ’s suggested modification of the test.  At para.31, His Lordship opined that the division of reasoning into different stages is artificial.  Instead,

“There is a single question: is there enough of a relevant difference between X and Y to justify different treatment?”

At para.33, Lord Hoffmann set out the three relevant considerations in that case. They did not fit into the Michalak formulation.  Nor did they fit into the structured justification test as applied in Yau Yuk Lung.

189.  The other Law Lords expressed similar views, see Lord Nicholls at para.3; Lord Rodger at paras.43 and 44; Lord Walker at paras.63 to 69.

190.  On the intensity of review in cases on differential treatment based on non-suspect grounds, Lord Walker expressly agreed with the approach of Wilson J at first instance, see paras.85 to 91.  That approach was set out by His Lordship at paras.85 and 86 (citing para.28 of the judgment of Wilson J),

“… I regard it as unnecessary, indeed inappropriate, for me to address the arguments presented by the [Secretary of State] by way of justification for the demarcation with a degree of detail into which, drawing upon a statement of an eminent statistician as well as a host of other material, Mr Gill would have me descend. Indeed, as his enthusiastic argument proceeded, I increasingly sensed the incongruity that such a debate was proceeding in court instead of in Parliament.”

In respect of the policy considerations put forward as justification, the standard of scrutiny applied by Wilson J was to ask whether the final outcome is “manifestly without reasonable foundation”, see the end of para.86 in the judgment of Lord Walker.

191.  After alluding to Laws LJ’s full agreement with the approach of Wilson J at para.88, and rejecting counsel’s challenge to this approach based on two authorities, Lord Walker said at para.91,

“… in my opinion the courts below were entirely correct in their approach to the appropriate intensity of scrutiny. Demarcation lines of this sort have to be reasonably bright lines, and the task of drawing them is (as the United States Supreme Court said in Massachusetts Board of Retirement v Murgia 427 US 307, 314): ‘peculiarly a legislative task and an unavoidable one’. …”

192.  In this connection, it is also instructive to read the judgment of Laws LJ in Carson reported at [2003] 3 All ER 577 at paras.70 to 74, which were endorsed by Lord Walker at para.78.  As Laws LJ observed, the court’s duty to protect and vindicate human rights should not mandate a judicialisation of the political function.  At para.73, after referring to Lord Hoffmann’s observation in ProLife on deference, he said,

“I hope it is consistent with this exposition to say that the powers of the courts and the powers of the other branches of government, if they do not overlap, at least may operate in the same field; they are not marked off by walls without windows; they are in constellation with each other, so that what government may settle as policy may be qualified by the constraint of law, settled by the judges. The teaching which Lord Hoffmann’s observation provides, if I may say so, is that in any particular area the decision-making power of this or that branch of government may be greater or smaller, and where the power is possessed by the legislature or executive, the role of the courts to constrain its exercise may be correspondingly smaller or greater. In the field of what may be called macro-economic policy, certainly including the distribution of public funds upon retirement pensions, the decision-making power of the elected arms of government is all but at its greatest, and the constraining role of the courts, absent a florid violation by government of established legal principles, is correspondingly modest.”

193.  R (RJM) v Work and Pensions Secretary [2009] 1 AC 311 is another case about welfare payment and the complaint of discrimination was based on a non-suspect ground: the status of homelessness.  Whilst there were references to the justification test (see Lord Mance at paras.14 and 15 and Lord Neuberger at para.48), the approach of their Lordships as to the intensity of review is similar to the one adopted in Carson.  See in particular the manner in which Lord Neuberger, who delivered the lead judgment, dealt with the justification issue at paras.54 and 57.

194.  The standard of review applied by Wilson J, endorsed by Laws LJ and Lord Walker, “manifestly without reasonable foundation”, was derived from the Strasbourg decision in James v UK (1986) 8 EHRR 123 at para.46.  In Hong Kong, Stock V-P in Fok Chun Wa v Hospital Authority CACV 30 of 2009, 10 May 2010 applied essentially the same approach in respect of review of differential treatments on non-suspect ground in the context of highly subsidized obstetric services by public hospital which, as the court recognized, is a form of social welfare, see paras.74, 78-79 and 89-99 of the judgment.  What His Lordship said at para.79, in my respectful view, is equally apposite in the present context,

“In recognizing the parameters of its legitimate function and of its expertise, the court will bear in mind,

(1) That the policy-maker and the legislature have often to determine where a line is to be drawn, that ‘some line is essential, [and] that any line must produce some harsh and apparently arbitrary consequences’; and

(2) The danger of examining the subject matter at hand in isolation, with due regard to the fact that competing demands require prioritization within the constraints imposed by economic realities.” 

195.  At para.89 of Fok Chun Wa the learned Vice-President held that if the aim of the policy was legitimate, “the question that would then remain is whether this Court is in a position to say that the line was drawn at a self-evidently unreasonable point.”  This is the standard which Lord Pannick QC invited this court to apply in the present appeals.  At para.111 above, my Lord again alluded to this standard.

196.  As a matter of substance, I do not consider there is any difference between this test and the test of “manifestly without reasonable foundation” adopted in Carson.

197.  In the Report of the Task Force on Population Policy, part of it was quoted at para.41 above, in drawing the line at seven years reference was made to the normal requirement to attain permanent resident status and additional rights being conferred on permanent residents.  Bearing in mind the legitimate aim for the policy as to the residence rule, and in the context of allocation of finite resource for one form (which is by no means the only form of social welfare available in Hong Kong) of non-contributory social welfare benefit, I do not think there can be any complaint even if the line for CSSA benefit were drawn by reference to permanent resident status and subject all non-permanent residents to a discretionary regime similar to the one prescribed by the Guidelines set out at para.29 above.

198.  Does it make any difference that the line was drawn at seven-year residence as opposed to permanent resident status?  I do not think so.  In this connection, I respectfully agree with the analysis by the Vice-President at paras.112 to 119 above.

199.  As regards the Yao case, as explained by my Lord at para.166 to 167 above, the measure adopted cannot be justified because the line drawn does not match the professed rationale for drawing the line.  In short, the one-year rule as implemented unreasonably (in the Wednesbury sense) excludes those have not lived outside Hong Kong for a long time.

Hon Barma J:

200.  I agree with the judgments of Stock VP and Lam J.

Hon Stock VP:

201.  Accordingly:

(1)   the appeal (in CACV 185 of 2009) by which Kong Yunming challenges the order of Mr Justice Cheung that her application for judicial review be dismissed, is dismissed; and there will be a costs order nisi that the costs of the appeal be to the respondent Director, to be taxed if not agreed and an order for legal aid taxation of the appellant’s own costs; and

(2)   the appeal (in CACV 153 of 2010) by which the Director challenges the order of Mr Justice Cheung that the application by Yao Man Fai George for judicial review be allowed, is dismissed; and there will be a costs order nisi that (i) the costs of the appeal be to the applicant Yao to be taxed if not agreed, and (ii) there be no order for costs in relation to the respondent’s notice.  There will be an order for legal aid taxation of Yao’s own costs.