THE CATHOLIC DIOCESE OF HONG KONG ALSO KNOWN AS THE BISHOP OF THE ROMAN CATHOLIC CHURCH IN HONG KONG INCORPORATION v. SECRETARY FOR JUSTICE

FACV No. 1 of 2011

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 1 OF 2011 (CIVIL)

(ON APPEAL FROM CACV NO. 18 OF 2007)

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J U D G M E N T

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Chief Justice Ma and Mr Justice Ribeiro PJ:

A. The question in this appeal

1.  On 8 July 2004, the Education Ordinance[1] (“the Ordinance”) was amended by the Education (Amendment) Ordinance 2004.  The amendments came into operation on 1 January 2005, instituting changes to the way schools must be managed.

2.  The appellant is a corporation sole led by the Roman Catholic Bishop of Hong Kong, created under the Bishop of the Roman Catholic Church in Hong Kong Incorporation Ordinance.[2]  The appellant and other Catholic organizations have a long and distinguished record of sponsoring schools and providing education in Hong Kong. 

3.  The appellant objects to the 2004 amendments, contending that they are inconsistent with certain provisions of the Basic Law and therefore unconstitutional.  Its essential complaint is that the amendments have resulted in loss of absolute control over the management of the aided schools sponsored by it; a control it had exercised hitherto. Its challenge failed at first instance[3] and in the Court of Appeal.[4] Leave to appeal to this Court was granted by the Appeal Committee[5] on the basis that the following question of the requisite importance arises in the appeal:

“Are the provisions of sections 40BK(2) & (3)(a) and 40BU(2) & (3) of the Education Ordinance, Cap 279, inconsistent with Article 136(1) and/or Article 137(1) and/or Article 141(3) of the Basic Law and therefore unconstitutional?”

As we shall presently see, the appellant asserts before this Court only breaches of Articles 136(1) and 141(3) of the Basic Law.

B. The schools concerned

4.  Schools fall into four categories in Hong Kong, namely, aided, direct subsidiary scheme, government and private schools.  We are only concerned with aided schools which form by far the largest category.  They constituted 560 out of 710 primary schools (78.9%) and 375 out of 524 secondary schools (71.6%) in the school year 2005/06.

5.  Aided schools are operated by non-governmental sponsoring bodies (also referred to as school sponsoring bodies or “SSBs”) through management committees within the framework of the Ordinance.  Such schools are very largely financed by public funds in accordance with Codes of Aid which lay down the conditions of the subsidy.  Typically, the government provides the land and the school building and meets all recurrent running costs.[6] The sponsoring body meets the initial cost of furnishing and equipping the school.[7]

6.  The evidence was that the annual government subvention for all aided schools amounted to $24 billion.  A standard class of thirty students in a secondary school cost the public about $38 million each year, while a primary school class cost about $22 million.

7.  The appellant is a sponsoring body which operates 80 aided schools (26 secondary and 53 primary)[8].  It is directly accountable to and (in its words) “wholly under” the Roman Catholic Bishop of Hong Kong, represented in educational matters by the Episcopal Delegate of Education who is generally a member of a Catholic religious order. 

8.  Other Roman Catholic organizations, including Caritas and certain Catholic congregations, also run aided schools.  In the year 2000, 49 such schools were run by Caritas and 138 by Catholic congregations. Those schools are not directly accountable to the Bishop but are pastorally and canonically under his direction and generally expected to operate in unison with him.  The contribution of the Roman Catholic Church to primary and secondary education in Hong Kong is therefore extensive, Catholic schools providing some 30% of all school places.

C. The 2004 amendments objected to

9.  The question put forward for decision[9] refers to sections 40BK(2) and (3)(a)[10] and 40BU(2) and (3)[11] of the Ordinance.  However, those are sections which merely impose a duty on school sponsoring bodies to submit by specified dates to the Permanent Secretary for Education draft constitutions for their school management committees.  There is nothing unconstitutional about those provisions in themselves.  The appellant’s objections are actually directed at the content of the draft constitutions to be submitted, taking issue in particular with the school management structures which are required to be reflected therein.  The relevant features of Part IIIB of the Ordinance must therefore be examined if the appellant’s challenge is to be understood.

10.  Part IIIB requires each aided school to draft and submit for approval by the Permanent Secretary, a constitution which regulates the operation of its management committee which is to be registered as an incorporated body.[12]  This incorporated body is known as an incorporated management committee or “IMC”. Section 40AE defines the respective roles of and the relationship between the school sponsoring body and the incorporated management committee as follows:

(1) The sponsoring body of a school shall be responsible for-

(a) meeting the cost of furnishing and equipping the new school premises of the school to, where applicable, standards as recommended by the Permanent Secretary;

(b) setting the vision and mission for the school;

(c) maintaining full control of the use of funds and assets owned by it;

(d) deciding the mode of receiving government aid;

(e) ensuring, through the sponsoring body managers, that the mission is carried out;

(f) giving general directions to the incorporated management committee in the formulation of education policies of the school;

(g) overseeing the performance of the incorporated management committee; and

(h) drafting the constitution of the incorporated management committee.

(2) The incorporated management committee of a school shall be responsible for-

(a) formulating education policies of the school in accordance with the vision and mission set by the sponsoring body;

(b) planning and managing financial and human resources available to the school;

(c) accounting to the Permanent Secretary and the sponsoring body for the performance of the school;

(d) ensuring that the mission of the school is carried out;

(e) ensuring that the education of the pupils of the school is promoted in a proper manner; and

(f) school planning and self-improvement of the school.

11.  The role of the incorporated management committee is therefore to manage the school.[13]  It has to do so in accordance with the vision and mission set by the sponsoring body and pursuant to the constitution which is drafted by the sponsoring body.  It is generally accountable to and subject to the oversight of the sponsoring body and the Permanent Secretary.  The importance attached to the “mission and vision” and the educational policies and principles set by the sponsoring body is emphasised by section 40AF(1) which states:

“An incorporated management committee of a school may do anything that appears to it to be necessary or expedient for the purposes of, or in connection with, the proper management, administration or operation of the school in accordance with the vision and mission and the general educational policies and principles set by the sponsoring body of the school.”

12.  Central to this appeal is the fact that Part IIIB lays down statutory requirements regarding the composition of the incorporated management committee.  It must be made up in accordance with its constitution[14] and must comprise as managers, apart from those appointed by the sponsoring body, the principal, not less than one teacher, not less than one parent and not less than one independent manager.[15]  Of particular importance is section 40AL(3) which limits the number of managers which the sponsoring body may appoint to 60% of the maximum number of managers under the constitution.

13.  The Permanent Secretary may refuse approval of a draft constitution if she is not satisfied that “the operation of the committee in accordance with the constitution is likely to be satisfactory”; or if the constitution fails to make proper provision for the composition and tenure of managers on the management committee or for appropriate nomination and election procedures for managers, principals, supervisors and so forth.[16] If a school fails to establish an incorporated management committee or if it appears to the Permanent Secretary that the school is not being satisfactorily managed or that the composition of the committee is such that the school is unlikely to be managed satisfactorily, she is empowered to put in her own managers to run the school.[17]

14.  A specific objection made by the appellant concerns an amendment which disapplied section 72A of the Ordinance to aided schools.  It was a section which had previously treated the views of the sponsoring body as prevailing in certain circumstances over the views of the management committee.  This is considered later in this judgment.

D. The nature of the Appellant’s objections

D.1 Control of management under the 2004 amendments

15.  Pausing here, it is fair to state that on any view, the 2004 amendments ensure that sponsoring bodies like the appellant are able to exercise overall control over the management of their schools.  It is the sponsoring body which drafts the constitution[18] and can appoint up to 60% of the managers sitting on the incorporated management committee.[19]  It sets the vision and mission for the school and is empowered to ensure, through the managers it appoints, that the mission is carried out.[20]  It can appoint the supervisor who chairs the committee (or decide instead that he or she should be elected by the managers in accordance with the constitution it drafts).[21]  It can reserve solely to itself the right to nominate candidates to be selected as principal by the principal selection committee (whose composition is also determined by the constitution drafted by the sponsoring body).[22]  It has full control over funds and assets held[23] and can give the committee general directions as to how the educational policies of the school should be formulated, overseeing the committee’s performance.[24] 

16.  Conversely, the 2004 amendments impose duties on the incorporated management committee to formulate educational policies for the school in accordance with the vision and mission set by the sponsoring body[25] and to plan and manage financial and human resources following the sponsoring body’s guidelines for the raising of funds and entering into contracts.[26]   The committee is accountable to the sponsoring body (as well as to the Permanent Secretary) for the school’s performance.[27]

17.  The appellant emphasises the importance it attaches to setting a Catholic vision and mission for its schools.  One formulation describes the educational mission and primary aim of Catholic schools as follows:

“With Christ as the foundation of the whole educational enterprise, to endeavour to present the Christian concept of life according to the Gospel and the invaluable core of Chinese culture, so as to generate human attitudes and help youth and students to cultivate wisdom and virtues, pursue the truth, verify merits and develop into persons who cherish human values and who are sound in body and mind, moral courage, good taste and creativity.”[28]

18.  The appellant’s printed case explains what this involves in practical terms:

“In practice, the Appellant has sought to achieve the vision and mission by requiring all its aided schools to have at least two periods of religious study per week, as well as daily morning prayers.”[29]

19.  Mr Martin Lee SC, appearing for the appellant, accepted that the 2004 amendments do not impede the appellant from setting such a vision and mission for its schools or from adhering to a practice of morning prayers and religious instruction.  Indeed, as we have seen, the 2004 amendments specifically empower sponsoring bodies to set their desired vision and mission and require incorporated management committees to carry them out.

D.2 Loss of “absolute control”

20.  What then is the appellant’s objection to the 2004 amendments?  As Mr Lee SC and the appellant’s printed case make plain, the appellant’s complaint is that the amendments put in place a management structure which derogates from its practice of exercising what it describes as “absolute control” over Diocesan schools. 

21.  Thus, the printed case asserts:

“The Appellant, as the spiritual head of all Catholics in Hong Kong, has always exercised absolute control over Diocesan schools as their [school sponsoring body] through ‘an Episcopal Delegate for Education … whose function is to coordinate and supervise those schools and to ensure that they are operated in accordance with the vision and mission of Catholic education …’”[30]

22.  Such control, the appellant complains, has been lost in particular with respect to determining the composition of schools’ management committees:

“The [appellant’s] level of representation in schools’ management bodies is significantly reduced under the New System. Under the Previous Practice, the Management Committee was composed of Managers (including the Supervisor) all of whom were nominated directly by the Sponsoring Body. All nominations were made by the [appellant] free from the interference of any other party or any legal duty to consult anyone else’s views, and were subject only to the approval of the Director.”[31]

23.  The 2004 amendments’ requirement that the committee should include managers beyond those appointed by the appellant, representing teachers, parents, students (via alumni managers) and the community (via independent managers), is therefore seen as unwelcome “interference”.  Complaint is also made of the enhanced position of the principal and his or her prescribed place on the committee:

“The expansion of the Principal’s role is also evidenced in the complete change of his/her status. Under the Previous Practice, the Principal was not a member of the Management Committee even though he/she was a representative of the [appellant]. The New System however stipulates the Principal to be the ex-officio Manager of the Incorporated Management Committee.”[32]

24.  The appellant’s concern is summarised as follows:

“The New System therefore forces the [appellant] to operate schools through a body that only partly represents it, and specifically, through non-representatives who may not adopt the educational and management approach and Catholic philosophy held by the [appellant] in the manner which representatives of the [appellant] would. Most importantly, the New System imposes this on the [appellant], having taken away the Guarantee of Priority.”

D.3 Section 72A

25.  Mention in the paragraph just quoted of “the Guarantee of Priority” is the appellant’s way of referring to the 2004 amendment to section 72A of the Ordinance.  Before dealing in substance with the appellant’s complaints, we ought to identify the nature of the particular complaint based on section 72A, for this is not readily apparent. A little legislative history is needed for this purpose.

D.3a From 1971 to 1993

26.  In the version of the Education Ordinance enacted in 1971,[33] no one could act as a school manager without first being registered as such.[34] Here, the majority of the school management committee was given considerable sway: the Director was bound to refuse registration if the applicant was not acceptable as a manager to the majority of the committee.[35]  Similarly, if the majority found the relevant person no longer acceptable as a manager, the Director was bound to cancel his or her registration.[36] 

27.  Since a person could not be approved as a supervisor unless he or she was a registered manager, this effectively also gave the management committee a veto over any proposed appointment of a supervisor.[37] Principals had to be teachers and were recommended by the management committee to the Director for approval as such.  Subject to being satisfied that the candidate was a fit and proper person, the Director had to accept the management committee’s recommendation.[38]

28.  The important point is that under the 1971 Ordinance, the appellant, as a sponsoring body, was given no statutory role in the approval of school managers, supervisors and principals.  Instead, the management committee of each school was, as a matter of law, given a substantial – and sometimes dispositive – say in determining who should occupy those positions.  That remained the position until June 1993 when the Education (Amendment) Ordinance 1993 was passed.

D.3b The Education (Amendment) Ordinance 1993

29.  Certain sponsoring bodies evidently considered the position described above unsatisfactory and, by causing section 72A to be inserted, secured the right to have their views taken into account by the Director and given priority over those expressed by the management committee in connexion with the approval of managers, supervisors and acting supervisors (but, oddly, not in respect of principals).

30.  Section 72A provided as follows:

“(1) Where the Director has approved a sponsoring body for a particular school in exercising his powers under sections 30(2), 31(2)(a), 37(d), 38(2) and 38A(2) in respect of such a school, the Director shall, in addition to taking account of the views of the management committee, also take account of the views of the sponsoring body, but nothing in this section shall impose a duty on the Director to seek the views of the sponsoring body.

(2) The views of the sponsoring body shall be expressed by resolution of its board, or other governing body as established by its constitution, and a copy of the resolution shall be sent to the Director.

(3) A sponsoring body may express its views on a matter relating to the provisions referred to in subsection (1) whether or not the management committee of the school has expressed its views on the matter and, where the management committee has expressed its views on the matter, the views of the sponsoring body shall prevail.”

31.  In subsection (1), the powers under sections 30(2) and 31(2)(a) related to approval of managers; and those under sections 37(d), 38(2) and 38A(2) related to approval of supervisors and acting supervisors.

32.  The drafting of section 72A left much to be desired.  The 1971 Ordinance provided in mandatory terms that in certain cases the Director “shall” grant or withdraw approval in accordance with the majority views of the management committee.[39]  It is by no means clear whether, by having section 72A(3) provide that “the views of the sponsoring body shall prevail”, those earlier sections were impliedly amended so that the Director was no longer bound to act in the manner still laid down in those sections, but became bound instead to act in accordance with the views of the sponsoring body.  This doubt is accentuated by the fact that section 72A(1) provided that the Director was under no duty to seek the sponsoring body’s views.

33.  Nevertheless, since the case has been argued on the footing that section 72A effected such an implied amendment, we will proceed on that basis for present purposes.  Thus, we will assume that whereas previously, the Director had been bound in certain cases to grant or refuse approval in accordance with the majority’s views, in 1993, by virtue of section 72A, he became bound instead, to give effect to any contrary views expressed by the sponsoring body on the specified matters.

D.3c The effect of the 2004 amendments on section 72A

34.  That position changed with the 2004 amendments.  The words “without IMC”[40] were inserted into subsection (1) of section 72A so that it now reads:

“(1) Where the Permanent Secretary has approved a sponsoring body for a particular school without IMC, in exercising his powers under sections 30(2), 31(2)(a),[41] 37(d), 38(2) and 38A(2) in respect of such a school, the Permanent Secretary shall, in addition to taking account of the views of the management committee, also take account of the views of the sponsoring body, but nothing in this section shall impose a duty on the Permanent Secretary to seek the views of the sponsoring body.” (Emphasis added)

35.  Since, as we have seen,[42] all aided schools are now required to have incorporated management committees, section 72A no longer applies to such schools, including those sponsored by the appellant, since they fall outside the category of schools “without IMC”.  The scheme described in Section D.3b above no longer operates.  There is now no provision permitting the sponsoring body to override the views of an aided school’s incorporated management committee or to require the Permanent Secretary to give effect to the sponsoring body’s view in preference to those of the committee regarding approval or rejection of managers and supervisors.

36.  Approval and registration of managers under section 30(2) now depend on compliance with the statutory composition requirements, consistency with the committee’s constitution and the fitness of the candidate, rather than the views of the management committee or the sponsoring body.[43] Supervisors and acting supervisors are now appointed in accordance with the constitution, with the Permanent Secretary thereafter being given notice of the appointment, without any need for her approval.[44]

D.4  The nature of the appellant’s complaint

37.  As appears from the foregoing, the appellant’s complaint is that the 2004 amendments now prevent it from exercising 100% control, through the Episcopal Delegate of Education, over the composition of each school’s management committee and over the appointment of supervisors and principals, in accordance with its previous practice.  Until abrogated in 2004, it was a practice endorsed, the appellant argues, by section 72A which gave the sponsoring body’s views priority over those of the management committee in connexion with the approval of managers and supervisors.

38.  It should be noted that the nature of the appellant’s complaint involves a focus on its previous practice and not on any assertion of previous legal rights or privileges.  This is so since clearly, as a matter of law, the appellant never enjoyed “absolute control” over the management of Diocesan schools, and in particular, such control over the composition and constitution of their management committees.

39.  Thus, section 41(1)(b) of the 1971 Ordinance provided as follows:

“If it appears to the Director that the composition of the management committee of a school is such that the school is not likely to be managed satisfactorily ... he may appoint one or more persons to be managers of the school for such period as he thinks fit.

40.  And by section 84 of that Ordinance, the Governor in Council was empowered to make regulations, inter alia, “for ... the constitution and duties of management committees”. 

41.  Such a regulation was indeed made.  Regulation 75 of the Education Regulations is in the following terms:

“(1) The Director may, by notice in writing to the supervisor, require the managers of any school to prepare, execute and submit to him for his approval a written constitution in accordance with which the school shall be managed, and within a time to be specified in such notice the supervisor shall comply therewith.

(2) Every such constitution shall, unless the Director otherwise directs –

(a) define the powers and duties of the managers, make adequate provision for the meetings of the managers, the voting and procedure at such meetings, the keeping of minutes and records thereof and any quorum which may be required;

(b) define the powers and duties of the supervisor and of each other manager and of the principal;

(c) provide for the holding and administration of the property of the school, the collection, banking and administration of its revenue and the keeping and audit of accounts; and

(d) provide for such other matters in relation to the management of the school and the administration of the property and revenues of the school as the Director may specify in such notice.

(3) The Director may require by notice to the supervisor any such constitution to be altered or amended, in such manner as he may specify, and such constitution shall be altered or amended accordingly by the managers.

(4) Every such constitution when approved by the Director shall be binding upon the school and the managers and teachers thereof and shall not be altered or amended without the prior approval in writing of the Director.

42.  Echoing section 41(1)(b) of the 1971 Ordinance, the Codes of Aid which contractually govern the public subvention of aided schools provide (in their September 1994 Edition) that:

“If it appears to the Permanent Secretary ... that the composition of the School Management Committee is such that the school is not likely to be managed satisfactorily ... he may appoint one or more persons to be additional managers of the school for such period as he thinks fit.”[45]

43.  It is a conspicuous aspect of the appellant’s case that it seeks to strike down statutory provisions forming part of the 2004 amendments, not on the basis that it enjoys certain protected legal rights, but because (so it contends) its previous practice qualifies as such for constitutional protection.  Reliance is placed in particular on Articles 136(1) and 141(3) of the Basic Law.  In the Courts below, the appellant had also relied on Article 137(1).[46]  However, Mr Lee (in our view correctly) accepted that he could not get home on the basis of that Article and abandoned reliance on it.[47]  We therefore turn to the arguments raised under the other two Articles.

E. Article 136(1) 

44.  Article 136(1) of the Basic Law provides:

“On the basis of the previous educational system, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of education, including policies regarding the educational system and its administration, the language of instruction, the allocation of funds, the examination system, the system of academic awards and the recognition of educational qualifications.”

E.1 The appellant’s argument

45.  The appellant contends that Article 136(1) places a constitutional limit on the kinds of educational policy that the government is allowed to formulate.  Such policies must rest “on the basis of the previous educational system”, meaning the system in place just before 1st July 1997. Since (so the appellant argues) the policy leading to the enactment of the 2004 amendments was “a brand new policy”, it was not one “based on the previous educational system”. The government therefore acted beyond those constitutional limits in promoting the 2004 amendments so that they must be struck down as unconstitutional.

46.  There are two aspects to this argument that must be examined before the constitutional arguments under Article 136(1) can be resolved.  The first is factual.  It is necessary to examine the circumstances in which the policy underlying the 2004 amendments was formulated.  Then, as a matter of interpretation, consideration must be given to what is meant by the phrase “based on the previous educational system” in order to decide whether the facts relating to the policy’s formulation bring it within those words.

E.2 The evolution of the policy of school-based management

47.  The policy underlying the 2004 amendments was developed in what was called the “School Management Initiative” or “SMI” and the policy which evolved was the policy in favour of “school-based management” or “SBM”.

48.  In 1971, universal compulsory free primary education for six years was introduced.  In 1979, an additional three years’ free secondary schooling was made compulsory.  Subvention of schooling beyond the first nine years was also provided, with students then having to meet about 18% of the recurrent costs.  These measures resulted in the rapid expansion of our educational system.

49.  The School Management Initiative, introduced in a booklet published by the government in 1991,[48] was a response to problems in the management of schools caused by such expansion:

“Over the past year or two, the government has been able to turn its attention away from the provision of school places – for our targets are now almost fully achieved – and towards questions of educational quality in schools. During two decades of rapid expansion in opportunity, questions of quality, though certainly not ignored, have had to take second place to the more urgent task of providing enough places for every child of compulsory school age, and for all those able and willing to continue beyond compulsory education.”[49]

50.  Key problems identified involved the lack of any framework of responsibility and accountability in the running of schools[50] and the absence of any performance measures or any linkage of public funding to effective performance.[51]  Such problems were seen to arise from “inadequately defined roles and responsibilities throughout the education system, and from inadequate management systems for defining objectives and evaluating results”.[52]

51.  The booklet made a series of recommendations aimed at making schools accountable to the government for the effective use of public funds and to parents and pupils for the quality of the education provided.[53] Recommendations included a requirement that every school management committee prepare a constitution setting out the objectives of the school and the procedures by which it would be managed;[54] the inclusion of teachers and parents among the managers;[55] a review of the roles of supervisor and principal;[56] participation in formal decision-making by teaching staff, the principal, the management committee, parents and students; and institution of a pilot scheme to test the recommendations made.[57]

52.  The SMI booklet, dating back to 1991, therefore contained the seeds of the school-based management policy which underlies the 2004 amendments.  In discussing implementation of the initiative, the booklet stated:

“... Each SMC will need to be constituted by a formal document, setting out its composition, operating procedures and the procedure by which the school will be managed. After suitable consultation the Director will specify the range of matters to be covered in the constitution, and will draft standard clauses. Appropriate flexibility will be allowed for schools to vary specific provisions. The process of drafting this document will provide a useful opportunity for the SMC and Principal to define the school’s goals, and the relationships between management and executive staff. It will also focus attention on the adequacy or otherwise of the existing composition of the SMC.”[58]

53.  A consultation process was duly undertaken in parallel with a pilot scheme spanning a period of seven years.  Beginning in May 1991 and every year thereafter, circulars were sent to schools inviting participation in each annual phase of the SMI. They explained its aims and provided a sample constitution which defined the management committee’s responsibilities and its composition which included as managers, the principal and representatives elected by teachers, parent-teacher associations and alumni.  The constitution also set out the functions and duties of the supervisor and principal.

54.  In 1996[59] and 1997,[60] the Education Commission endorsed the SMI and recommended that all schools “should by the year 2000 practise school-based management in the spirit of the School Management Initiative”, including in particular, preparation of a written constitution, providing for participation of teachers, parents and alumni in school management and clearly setting out both the role and duties of the school sponsoring body and the accountability of the school management committee to the sponsoring body.

55.  It had been the government’s hope that the reforms would be voluntarily undertaken.  However, the take-up rate was low and it was decided to proceed by way of legislation.  The policies underlying the Amendment Bill were explained in a Legislative Council Brief dated 20 November 2002 as involving greater autonomy for schools to manage their own operation and resources to meet the particular needs of their students (hence “school-based management”) and, as a quid pro quo for such autonomy, greater transparency and accountability to the community for the schools’ performance and the proper use of funds.  The means of achieving those objectives involved registration of management committees as incorporated bodies with constitutions providing for the participation of stakeholders in the school’s management and providing procedures for the appointment of the principal who would be accountable to the management committee for the school’s day-to-day operation.

56.  As we have seen, a Bill was duly introduced into the Legislative Council and the 2004 amendments passed (after extensive public consultation) in July 2004.

E.3 Within Article 136(1)

57.  In our view, from any relevant perspective, there is no basis for regarding the 2004 amendments as overstepping the limits of Article 136(1). 

58.  There are in the first place, two reasons of specific relevance to school-based management for reaching that conclusion.  As we have seen,[61] before 1st July 1997, the educational system included powers given to the Director by Ordinance and by the Codes of Aid to require binding constitutions to be drawn up and to appoint managers to management committees if he was of the opinion that the composition of such committees made it unlikely that the relevant schools would be managed satisfactorily. The powers in the 2004 amendments objected to by the appellant are in the same vein and do not in principle break any new ground. 

59.  Moreover, as demonstrated above,[62] the policy underlying the 2004 amendments was first formulated in 1991 and evolved in a continuous process which culminated in the enactment of those amendments.  The policy favouring school-based management is therefore not merely a policy resting on the previous educational system but one elaborated and developed as part of that very system and carried over into the present.

60.  While these are points which are conclusive against the appellant’s reliance on Article 136(1), we respectfully agree with the Court of Appeal[63] that compliance with that Article does not require such specific historical connection to be demonstrated.  As Stock VP put it, even if the relevant amendments had not found their origin before 1st July 1997, they were based on the previous educational system.

61.  In Secretary for Justice v Lau Kwok Fai,[64] this Court had occasion to consider the meaning of Article 103 of the Basic Law[65] which provides for the “previous system of recruitment, employment, assessment, discipline, training and management for the public service” to be maintained.  It was held that the Article was designed to preserve the continuity of the system as a whole and not to prevent changes to elements of the system which could be expected to occur under any system governing public service.  As Sir Anthony Mason NPJ put it, a constitutional provision in such terms would only inhibit a development which was “such a material change that it resulted in the abandonment of the previous system”.[66]

62.  It is important to note that in authorising the HKSAR government to formulate policies on the “development and improvement of education”, including the policies therein specified, Article 136(1) similarly accepts that changes may be made to elements of the previously existing system and, in our view, the Lau Kwok Fai approach is equally applicable.  On that approach, the 2004 amendments plainly do not involve abandonment of the pre-1997 educational system and do not fall foul of Article 136(1). 

63.  We therefore agree with the courts below that no violation of Article 136(1) has been made out.

F. Article 141(3)

64.  We turn next to the reliance placed by the appellant on Article 141(3).  Article 141 provides:

“(1) The Government of the Hong Kong Special Administrative Region shall not restrict the freedom of religious belief, interfere in the internal affairs of religious organizations or restrict religious activities which do not contravene the laws of the Region.

(2) Religious organizations shall, in accordance with law, enjoy the rights to acquire, use, dispose of and inherit property and the right to receive financial assistance. Their previous property rights and interests shall be maintained and protected.

(3) Religious organizations may, according to their previous practice, continue to run seminaries and other schools, hospitals and welfare institutions and to provide other social services.

(4)   Religious organizations and believers in the Hong Kong Special Administrative Region may maintain and develop their relations with religious organizations and believers elsewhere.”

F.1 The appellant’s approach to its constitutional challenge

65.  When, as in the present case, a constitutional challenge is made to a piece of legislation or to certain executive or administrative conduct, the court must generally begin by ascertaining what, if any, constitutional rights are engaged.  If no such constitutional rights can be identified, the challenge necessarily fails in limine.  If certain constitutional rights are engaged, the court considers whether the legislation or conduct complained of amount to interference with those rights.  If they do, the court has to consider whether those rights are absolute and if not, whether the interference can be justified on a proportionality analysis.

66.  The principal defect in the appellant’s case is that it fails to take the first step of identifying the protected constitutional right.  Instead, Mr Lee concentrates on a textual argument and, basing himself on the words “according to their previous practice” in Article 141(3), asserts that the appellant is entitled to claim constitutional protection for what constituted its “practice” in the running of its schools as a matter of fact prior to 1st July 1997. 

67.  Mr Lee draws attention to the Court of Appeal’s positing of two possible meanings in its judgment as follows:

“Does the scrutinised phrase – “religious organizations may according to their previous practice continue to run schools” – mean that religious organizations may run schools according to the manner in which they have in the past run schools, or does it mean that as has been the case in the past, religious organizations may establish and run schools?”[67]

He submits that the Court of Appeal erred in choosing the latter meaning, arguing, primarily on the basis of the Chinese version of the text, that the former meaning – “according to the manner in which they have in the past run schools” – is the correct meaning to adopt.[68]

68.  Thus, Mr Lee contends that constitutional protection is given to the appellant’s previous practice of exercising the sole and exclusive authority to appoint 100% of each school’s management committee and of similarly appointing the supervisor and principal.  Such protection, he submits, is aimed at reducing the risk of disharmony and dissent at management committee meetings. 

69.  This argument leads to somewhat bizarre results.  Thus, Mr Lee accepts that on his argument, any educational policy that the government may wish to espouse cannot be imposed on any school run by a religious organization which had adopted an inconsistent previous practice. Obviously, differences may well exist in the practices of individual schools run by the same religious organization.  Such differences are even more likely to exist as between schools run by religious organizations professing different faiths or as between religious and purely secular schools.  If Mr Lee is right, this would mean that the government would first have to make enquiries of each school run by a religious organization (but not of secular schools) to ascertain what policies Article 141(3) will permit it to devise in respect of that school.  It would mean that the government could not formulate policies on the development and improvement of education to be applied uniformly to all schools in Hong Kong.  It is impossible to imagine that the framers of the Basic Law could have intended such a dysfunctional situation.  It is moreover a conclusion which flies in the face of Article 136(1)[69] which is expressed in general and unqualified terms.

70.  Mr Lee’s argument also runs the risk of tying the hands of religious organizations by confining them to running their schools according to their previous practice, preventing them from making desirable changes.  Mr Lee submits that Article 141(3) should not be given such a reading and that it allows schools voluntarily to make such changes.  However, he was driven to accept, on that line of argument, that protection against government “interference” applies only to the practices of schools run by religious entities which were current before 1st July 1997.  If the school itself changed its previous practice at some point after that date, Article 141(3) would place no obstacles in the way of legislation or executive conduct regulating and modifying the changed practice. We find it again impossible to see why constitutional protection should be conferred in such an idiosyncratic manner.

F.2 The Court of Appeal’s and the respondent’s approach to Article 141(3)

71.  Both A Cheung J and the Court of Appeal rejected the appellant’s interpretation of Article 141(3) largely on the basis that, viewed contextually and purposively, the framers of the Basic Law cannot have intended to stultify the development of policies in relation to publicly funded aided schools, hospitals and other welfare institutions.  We respectfully agree.

72.  However, there are difficulties with the Court of Appeal’s own interpretation of Article 141(3) which identifies the constitutional right solely in terms of protection against discrimination.  Mr Justice Stock VP, with whom the other members of the Court agreed, stated:

“83. Art. 137 of the Basic Law includes the provision that:

‘Schools run by religious organizations may continue to provide religious education, including courses in religion.’

84. Art. 141(3) is a provision that lives within the Article as a whole. The Article as a whole concentrates on freedom, is designed to ensure against discrimination and, as the judge suggested, is there to give ‘prominence to the protection that the Basic Law accords to religious organizations. It singles out religious organizations for specific mention, so as to highlight the protection and guaranteed right given.’ [Judgment §181] It is in that context that the references to continuity are to be interpreted. Just as, in the past, religious organizations have established and run educational, medical, welfare and social services, so they may do in the future. Just as, in the past, they have not been debarred, they will not be debarred in the future.

85.     This, in my judgment, is the only interpretation that is contextually purposive, recalling as well, as one is bound to do, that schools, hospitals and other organizations run by religious institutions and publicly funded have always in this jurisdiction been subject to executive oversight authorized by the legislature.  So long as that oversight does not result in discriminatory practices or in its effect denude religious organizations of their right to establish and run such services, I see no breach of art. 141.”

73.  The Court of Appeal therefore held that Article 141(3)’s purpose is to preserve the right of religious organizations to continue running schools after 1st July 1997.  It guards against any possible discriminatory policy aimed at excluding them from establishing or running schools, etc, in Hong Kong on the ground merely that they are religious organizations.

74.  While we agree that that was one of the purposes of the Article, we think Mr Lee was right to point out that such purpose could be achieved by Article 141(3) simply providing that “Religious organizations may ... continue to run seminaries and other schools, hospitals and welfare institutions and to provide other social services”.  The Court of Appeal’s interpretation therefore effectively treats the phrase “according to their previous practice” as otiose. 

75.  We note in passing that in paragraph 83 of its judgment, the Court of Appeal referred to Article 137 which lacks the relevant phrase. But its absence from Article 137 obviously does not mean that the phrase – which does appear in Article 141(3) – should be treated as if it has no content.

F.3   The context of Article 141(3)

76.  Meaning can and should be given to the phrase “according to their previous practice” by reading Article 141(3) in the context of Article 141 as a whole.[70]

77.  Article 141(1) lays down the core constitutional right to freedom of religious belief, freedom from interference in internal affairs and freedom to take part in lawful religious activities in relation to religious organizations.  The other parts of the Article are ancillary and shore up that core right.  They ensure that international relations with religious organizations and co-religionists abroad can be maintained[71] and that the property rights of religious organizations are preserved.[72]

78.  Article 141(3) is similarly ancillary to that core right.  It seeks, like the other provisions of Article 141, to make that freedom an effective right in the context of educational, hospital and welfare institutions operated by religious organizations.  Thus, Article 141(3)’s provision that religious organizations “may, according to their previous practice, continue to run ... schools...”, read purposively, should be taken to mean that religious organizations “may, according to their previous practice in so far as it involves the exercise of their right to freedom of religious belief and religious activity, continue to run ... schools (etc)”. 

79.  So read, the meaning given to the phrase “according to their previous practice” relates to the core freedom addressed by Article 141.  It is the religious dimension of their previous practice that receives protection as part of the core constitutional right to religious freedom as applicable to religious organizations.  Thus, a legislative reform or executive direction which, for instance, banned morning prayers or religious instruction forming part of a religious organization’s previous practice, would fall foul of Article 141(3) and be unconstitutional. However, policies which have no religious content, for instance, as to the teaching of second languages, providing more physical education or information technology classes, or providing student travel or textbook subsidies, would not engage the protections.

80.  Mr Paul Shieh SC, appearing for the government, adopted this interpretation as his “fall back” position (the respondent’s primary position being to support the reasoning of the Court of Appeal identified above[73]).

F.4   Article 32(2) of the Basic Law

81.  When the foregoing interpretation of the phrase “according to their previous practice” was put to Mr Lee at the hearing, he submitted that it should be rejected as being also otiose in the light of Article 32(2) of the Basic Law which provides:

“Hong Kong residents shall have freedom of religious belief and freedom to preach and to conduct and participate in religious activities in public.”

82.  He argued that since religious freedom is fully catered for by Article 32(2) it makes no sense to read Article 141(3) in the manner suggested above. 

83.  With respect, we do not agree.  In the first place, as stated above,[74] Article 141 addresses religious freedom in relation to religious organizations.  Article 32(2), on the other hand, is concerned with “Hong Kong residents” which is a concept which may well not cover corporations, including a statutory corporation sole.  Secondly, the general freedom of religious belief and freedom to preach and conduct religious activities in public may well fall short of addressing the place of religion in the education of school children.  Absence of express provision might give rise to a debate in which a distinction could well be drawn between immature school children receiving religious instruction and preaching to the public at large. Specific treatment by Article 141(3) of permitted activities by religious organizations in schools is therefore clearly not otiose.

F.5   Articles 137(1) and 141(1)

84.  On 10 October 2011, a week after the conclusion of the hearing, counsel for the appellant sought leave to lodge further submissions in writing with the Court.  Such a course is most unusual and will generally not be countenanced.  However, having considered de bene esse the contents of those submissions, the Court decided exceptionally to grant the appellant leave to file the same, but also decided that it was unnecessary to trouble the other side for a response.

85.  The written submission argues that reading the words “previous practice” in Article 141(3) in the manner we have set out in Section F.3 above would be unjustified by virtue of Articles 137(1) and Article 141(1) because:

“... the only religious elements in the running of a Catholic school consist in religious lessons and morning prayers which are already protected by the last sentence of [Article 137(1)] and the last two clauses of [Article 141(1)] …”

86.  We do not accept that argument.  To take Article 137(1) first, it provides:

“Educational institutions of all kinds may retain their autonomy and enjoy academic freedom. They may continue to recruit staff and use teaching materials from outside the Hong Kong Special Administrative Region. Schools run by religious organizations may continue to provide religious education, including courses in religion.”

87.  The protection given by the sentence relied on by the appellant, namely: “Schools run by religious organizations may continue to provide religious education, including courses in religion” has a more limited reach than the protection conferred by Article 141(3) in at least two respects. 

88.  First, Article 137(1) is confined to conferring protection in relation to the running of schools, while Article 141(3) protects the right of religious organizations to continue to run not merely schools, but also hospitals and welfare institutions.  The previous practice involved in running such other institutions is very likely also to have a religious dimension, which, on the interpretation adopted in Section F.3 above, receives protection.

89.  Secondly, we do not accept that the relevant sentence in Article 137(1) protects bothreligious lessons and morning prayers. What it protects is the provision of religious education, including courses in religion.  That is a formulation apt to cover religious lessons, but not morning prayers.  Religious freedom may be exercised and manifested in numerous ways that do not amount to the provision of religious education or the giving of religious instruction.  Catholic religious organizations, for instance, in accordance with previous practice, might arrange for masses to be said on certain days; or for confessions to be heard; or for saints’ feast days to be celebrated; or for crucifixes to be displayed, and so forth, in the course of running their schools.  Such activities would not be characterised as “giving religious instruction” and would not receive protection under Article 137(1).

90.  Next, it is odd that the written submission relies on the last two clauses in Article 141(1).  That Article consists of a single sentence, as follows:

“The Government of the Hong Kong Special Administrative Region shall not restrict the freedom of religious belief, interfere in the internal affairs of religious organizations or restrict religious activities which do not contravene the laws of the Region.”

91.  The provision must obviously be read as a whole and, as stated in Section F.3, it lays down the core constitutional right to freedom of religious belief and religious activity in relation to religious organizations.  Read purposively in the context of Article 141(1), Article 141(3), like the other sub-articles of Article 141, takes its meaning from that core right, operating to shore up that core right.  It provides not merely that religious organizations may continue to run schools, but that they may do so according to their previous practice in so far as such practice involves the exercise of their right to freedom of religious belief and religious activity.

92.  We reject the suggestion that Article 141(1) already protects freedom of religious belief and activity so that Article 141(3) should not be read as covering the same ground, but interpreted as striking out on its own, outside the ambit of religious freedom, giving constitutional protection to an amorphous “previous practice” without religious content.

F.6   No violation

93.  When the constitutional right protected by Article 141(3) is correctly identified,[75] it becomes apparent that it is not infringed by the 2004 amendments.

94.  As noted previously,[76] nothing in the 2004 amendments impedes the appellant from setting a Roman Catholic vision and mission for each sponsored school.  Indeed, the amendments require the incorporated management committee to ensure implementation of such mission and secure for the appellant overall control of the school’s management, as discussed above.[77] 

95.  Mr Lee accepted in the course of argument that the amendments do not interfere with the appellant’s practice of having prayers and religious instruction in its schools.  However, the written submission now seeks to suggest that even espousing the interpretation of Article 141(3) adopted in this judgment, the 2004 amendments do interfere with the running of the appellant’s schools in a way involving exercise of the freedom of religious belief and religious activity by having “destroyed the very structure of governance of Catholic schools with the appellant as their SSB”.  That submission seeks to re-hash arguments fully ventilated at the hearing and we reject it. The effect of the 2004 amendments is analysed in Sections C to D.3 above and for the reasons there given, we see no basis for suggesting that they give rise to any actual or potential infringement of the protected constitutional right.

96.  The appellant’s asserted authority to appoint 100% of a school’s management committee, as well as the school’s supervisor and principal according to its previous practice, is not a constitutional right protected by the Basic Law.  Modification of that practice by the 2004 amendments involves no infringement of any constitutional right protected by Article 141(3).

G. Conclusion

97.  For the foregoing reasons we hold that no violation of any constitutional rights enjoyed by the appellant has been made out and would therefore dismiss this appeal.  If the parties are unable to reach agreement as to costs, they should have liberty to lodge written submissions as to costs within 14 days of the date of this judgment and to lodge any written submissions in reply within 14 days thereafter. 

Mr Justice Bokhary PJ :

98.  I respectfully agree with Chief Justice Ma and Mr Justice Ribeiro PJ that this constitutional challenge fails and that costs should be dealt with as they propose.  The challenge fails because the challenged legislation leaves religious organizations free to nominate a majority of the persons serving on the incorporated management committees of aided schools which they sponsor.

99.  Plainly the core right or freedom on which the Catholic Diocese’s constitutional challenge rests is the one guaranteed by art.141(3) of our constitution the Basic Law.  It is the right or freedom of religious organizations to continue to run schools “according to their previous practice”.

100.  The Court of Appeal gave art.141(3) a reading which deprived the crucial phrase “according to their previous practice” of content.  Thus they in effect denied the very existence of the one right or freedom concerned.  Its existence was rightly recognized by the trial judge. He accepted that the challenged legislation imposed a material change on the Catholic Diocese’s previous practice.  His decision against the Catholic Diocese rested on his view that the policy of the challenged legislation was formulated “[o]n the basis of the previous educational system” within the meaning of art.136(1) of the Basic Law and that such legislation was for that reason constitutional even if contrary to a “previous practice” within the meaning of art.141(3).  The problem with that view – and the reason why it is in error – is quite simply that any such previous practice would have been a part of the previous educational system.

101.  Freedom of religion is a freedom to follow any faith or none.  Neither belief of any kind nor unbelief is officially imposed or promoted.  In Hong Kong as in other parts of the world, religious organizations have, to put it in the language of art.141(3), run “schools, hospitals and welfare institutions”.  Welfare institutions range from orphanages to leper colonies.  In all of these activities, each religious organization has followed practices by which it has taught and promoted the religion to which it adheres, doing so by congregational prayer, by formal instruction and by worthy example.  Such previous practices are protected by art.141(3) to the extent that they include organizing prayers and providing religious instructions at schools.  Article 141(3)’s protection of religious activities extends to hospitals and welfare institutions, but nothing more need be said as to that now.

102.  The challenged legislation makes no direct attack on religious activities at schools.  And as long as religious organizations are free to nominate the majority of the persons on the incorporated management committees of schools which they sponsor, religious activities at such schools are acceptably safe from indirect attack and from erosion.

103.  Before parting with this appeal, I express the hope that the Catholic Diocese and the Government will find it possible very soon, if not immediately, to put this dispute behind them.  The school sponsoring bodies of aided schools will hopefully find it in themselves to appreciate the aid that they receive from the Government.  And the Government will no doubt find it in itself to appreciate what religious organizations, very notably the Catholic Diocese, have done and are doing in the field of education.  Who is aiding whom?, one might ask.  But the answer is not important.  What is important is that children receive a good education.

Mr Justice Tang NPJ :

104.  I agree with the judgment of Chief Justice Ma and Mr Justice Ribeiro PJ.

Mr Justice GleesonNPJ :

105.  I agree with the judgment of Chief Justice Ma and Mr Justice Ribeiro PJ.

Chief Justice Ma :

106.  For the above reasons, this Court unanimously dismisses the appeal. Costs will be dealt with as indicated in paragraph 97 above.