YAO MAN FAI GEORGE v. THE DIRECTOR OF SOCIAL WELFARE

HCAL 69/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO 69 OF 2009

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J U D G M E N T

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1.  INTRODUCTION

1.  This application for judicial review challenges the constitutionality of the requirement that, subject to a grace period of 56 days, an adult applicant for comprehensive social security assistance (“CSSA”) must have resided in Hong Kong continuously for at least one year immediately before the date of application (“the 1-year continuous residence requirement”).

2.  This rule, which came into effect on 1 January 2004, is in addition to another residence requirement, namely, that an applicant for CSSA must have been a Hong Kong resident for at least seven years (“the 7-year residence requirement”).  The 7-year residence requirement also came into effect on 1 January 2004.  Prior to that, the old requirement was one year’s residence in Hong Kong.  This old 1-year residence requirement is different from the 1-year continuous residence requirement in that the old residence requirement did not require the applicant for CSSA to have resided in Hong Kong continuously for at least one year immediately before the date of application.  On 1 January 2004, the old 1-year residence requirement was extended to 7 years and thus became the present 7-year residence requirement.

3.  The 7-year residence requirement has survived a constitutional challenge: Kong Yun Ming v Director of Social Welfare [2009] 4 HKLRD 382.  This time, it is the turn of the new 1-year continuous residence requirement to go through a constitutional scrutiny.

4.  To different extents, the two new residence requirements have their genesis in a Government population policy review conducted in 2002 and 2003.  As a result of the review and consequential Government decisions, access and entitlement to all social welfare benefits, including public health care benefits, have been tightened up.  In relation to subsidised obstetric services, the reform has led to litigation: Fok Chun Wa v The Hospital Authority, CACV 30/2009, 10 May 2010.

5.  Like the previous challenges, various grounds have been raised in support of the present application for judicial review against the 1-year continuous residence requirement.  In particular, the grounds based on discrimination and the right to travel have attracted most arguments.

2    FACTS

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[1].

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.

3    THE 1‑YEAR CONTINUOUS RESIDENCE REQUIREMENT

3.1     Pre-2004 position

14.  It is unnecessary to repeat in detail here the history and development of Hong Kong’s social welfare system and the CSSA system, or the changes made to the relevant residence requirements.  Nor is it essential to recount here the 2002/2003 general population policy review carried out by the Task Force on Population Policy chaired by the then Chief Secretary for Administration, which released its report on 26 February 2003.  These matters have been covered in this Court’s judgment in Kong Yun Ming at paras 13 to 32, and in the judgment of the Court of Appeal in Fok Chun Wa at paras 20 to 23.

15.  Suffice it to say, prior to 2004, entitlement to CSSA (and before that, public assistance) had always been subject to a residence requirement.  At the beginning, it was 10 years’ residence.  In 1959, it was lowered to 5 years.  In 1970, the Government considered that a reduction of the residence requirement from 5 years to 1 was appropriate given the then economic conditions and social needs.  It remained the case until the report of the Task Force on Population Policy recommended that it be increased to 7 years in the light of the drastic changes in social and economic circumstances that had taken place in the intervening years.  As mentioned, the new 7-year residence requirement came into effect on 1 January 2004.

16.  It should be stressed, at the risk of repetition, that the 7‑year residence requirement, like its predecessor (the 1-year residence requirement), does not require the applicant to have resided in Hong Kong for a continuous period of 7 years (or, previously, 1 year) immediately before the application for CSSA.

17.  Rather, prior to 2004, there was no separate requirement that the applicant must have resided continuously in Hong Kong for a period of time immediately before the application for CSSA.  The 1‑year continuous residence requirement was an entirely new rule for CSSA which was introduced by the Government together with the 7‑year residence requirement (which was nothing more than an extension of the previous 1‑year residence requirement to 7 years).  It is also important to note that although the two rules were introduced by the Government at the same time and both came into effect on 1 January 2004, the 1‑year continuous residence requirement was essentially a side issue in the 2002/2003 population review and consequential policy reforms.

3.2     The Task Force’s report recommended a future review

18.  It should be remembered that the Task Force was set up in September 2002 to develop a comprehensive population policy which would be designed to fit Hong Kong’s long term social and economic development, complement family requirements, and address the interests of different sectors in the society.  The Task Force’s immediate task then was to focus on analysing the demographic characteristics of Hong Kong’s population; identifying the major challenges and concerns arising from the demographic trends; setting an objective which the population policy sought to achieve; and proposing a set of coherent policy initiatives which the Administration could explore in the short to medium term to achieve the objective.

19.  Because of the then rising public expenditure in providing various heavily subsidised services, the implication for public finances had become an issue of major concern to the Government and the community.  The Task Force therefore suggested that in formulating a population policy for Hong Kong, the privileges of its residents should be considered critically in terms of their eligibility for subsidised services and it must ensure that there was a rational basis on which social resources were allocated.  The Task Force realised that it had to strike a very fine balance among the interests of various sectors of the community, whilst giving due regard to the long term sustainability of Hong Kong’s social services within limited financial resources.

20.  Against this background, the Task Force recommended in its report, amongst other things, that a uniform 7-year residence requirement be applied to all heavily subsidised social services.  According to the Task Force, eligibility based on a 7-year residence requirement reflected the contribution a resident had made towards Hong Kong’s economy over a sustained period of time, and was normally required for the grant of permanent resident status for the enjoyment of additional rights as prescribed by the laws of Hong Kong.

21.  The Task Force’s report was a long and comprehensive document containing many particulars, valuable data and intensive analysis.  Yet, it is noteworthy that on the question of whether any additional residence requirement, apart from the new 7-year residence requirement recommended in the report, should be introduced, the report was extremely brief.  The only hint that some such additional requirement might be imposed in future was found in paragraph 5.59 on page 68 of the lengthy report, which ran to 79 pages:

“5.59    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 go into this matter in detail and come to a conclusive recommendation. We suggest that the Administration should review it later.

Recommendations regarding Eligibility for Public Benefits:

To adopt the principle of “seven-year” residence requirement for providing social benefits heavily subsidized by public funds. To consider tightening up the eligibility criterion for CSSA so that such benefits should, from a future date, be available only to residents who comply with the seven-year residence rule (except for children under the age·of 18; current residents in Hong Kong will not be affected by this rule); to apply the same principle in respect of public healthcare services to Two Way Permit holders and other visitors and to consider how this policy could apply and be implemented for the rest of the population; to review in the longer term access to subsidized benefits by residents absent from Hong Kong for a long period of time.”

22.  On page xii of the summary of recommendations of the report, the Task Force recommended, under “Eligibility for Public Benefits”, the Administration:

“to review in the longer term access to subsidized benefits by residents absent from Hong Kong for a long period of time.”

3.3     Government’s and Legco Panel’s immediate response

23.  In the Administration’s paper, LC Paper No CB(2)1401/02-03(03) dated March 2003, prepared for the consideration by the Panel on Welfare Services of the Legislative Council in conjunction with the Task Force’s report, the focus of discussion was entirely on the pressing financial needs to introduce the proposed 7‑year residence requirement in replacement of the previous 1‑year residence requirement.  In paragraphs 9 and 29 of the paper, the Administration simply noted the recommendation made by the Task Force in its report to review in the longer term “access to subsidized benefits by residents absent from Hong Kong for a long period of time”.  The paper itself did not otherwise deal with the suggested review.

24.  The meeting of the Panel held on 10 March 2003 concentrated on the proposed new 7-year residence requirement.  The suggested review of access to subsidised benefits by residents absent from Hong Kong for a long period of time was not touched on at all in the meeting.

3.4     Government’s decision to introduce the requirement

25.  According to the evidence filed on behalf of the Director in these proceedings, the next thing one knows about the proposed review is the order made by the Chief Executive in Council on 3 June 2003 that, subject to the approval of the Finance Committee of the Legislative Council, the two new residence requirements for CSSA, namely, the 7‑year residence and the 1‑year continuous residence requirements, should be adopted with effect from 1 January 2004.  This is what the affirmation of Choy Bo Chun, Polly filed on behalf of the Director in these proceedings on 3 September 2009 says about the introduction of the 1‑year continuous residence requirement:

“19.   The public coffer is not without limit. As suggested by the Task Force, the Administration considered that there was a need to ensure a rational basis on which our public resources were allocated and to address the discrepancies in the rules governing eligibility for these benefits. The Administration also recognized a need to align the residence requirements for our social security schemes, i.e. CSSA, Old Age Allowance (“OAA”) and Disability Allowance (“DA”). On 3 June 2003, the Chief Executive ordered that the two residence requirements for CSSA, namely the 7-year residence and 1-year continuous residence requirements, should be adopted with effect from 1 January 2004, subject to the approval of the Finance Committee of the Legislative Council.

20.    On 9 June 2003, the Panel was briefed on the Administration’s proposal to revise the residence requirement for CSSA from one year to seven years for adoption from 1 January 2004. In addition, a person aged 18 or above applying for CSSA 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 within that one-year period prior to the date of application will be treated as residence in Hong Kong.  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. …”

26.  The Legislative Council Brief dated 3 June 2003 was a 20-page document.  Again, its main focus was on the proposed 7-year residence requirement and the societal financial justification for the requirement.  Only paragraphs 21 and 22 on page 7 of the Brief dealt with the proposed new 1‑year continuous residence requirement:

“21.   In addition to the seven-year residence rule, we propose that a person aged 18 or above applying for CSSA 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 within that one-year period prior to the date of application will be treated as residence in Hong Kong.

22.    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.”

27.  Annex A to the Brief summarised and contrasted the pre-existing and proposed new residence requirements.  Annex B to the Brief set out the financial and sustainability implications of the Government’s proposals.  However, it is plain that Annex B contained little information on the financial needs or justification for the introduction of the new 1‑year continuous residence requirement or the implications of adopting (or not adopting) such a requirement for CSSA.

28.  Thus, paragraph 14 of the Brief which mentioned the growing public disquiet about the burgeoning welfare spending and a general consensus in the community that there was room for tightening the then existing residence requirement for CSSA, which was considered too lax, was immediately preceded by paragraph 13 which gave figures and percentages relating solely to “new arrivals” from the Mainland applying for CSSA before they had resided in Hong Kong for 7 years.  There was no discussion or data on those who had lived outside Hong Kong “for a long time” and who applied for CSSA after their return to Hong Kong without having resided in Hong Kong again for a period of time.

29.  For the sake of completeness, it should be pointed out that the 1‑year continuous residence requirement was not an entirely new rule in itself.  A similar rule had already been in existence for claiming disability allowance.  The Government’s decision was that the same rule be extended to those applying for CSSA and for old age allowance.

30.  The Legislative Council Brief explained that disability allowance was a long-term support, granted only to those who had “a genuine, long-term connection with Hong Kong before claiming [the allowance]”, so as to protect public funds (para 29).  The Brief pointed out that there were discrepant requirements for applying for CSSA, old age allowance and disability allowance and recommended importing the 1‑year continuous residence requirement for disability allowance to CSSA and old age allowance.

31.  In another paper submitted to the Finance Committee of the Legislative Council (FCR(2003-04)33), the Administration stated that the existing residence requirements for Hong Kong’s major social security benefits had to be revamped to ensure a rational basis on which public resources were allocated and to address the current discrepancies in the residence requirements governing eligibility for these benefits.  The paper was similar in contents to the Legislative Council Brief and focused on the problems caused by the new arrivals from the Mainland.  On 27 June 2003, the proposal to introduce the 1-year continuous residence requirement to CSSA was endorsed by the Finance Committee.

3.5     Purposes to be served

32.  According to paragraph 25 of the affirmation of Choy Bo Chun, Polly, the adoption 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 serves the following purposes:

“(a)    to align the residence requirements in the eligibility criteria for social security schemes (i.e. CSSA, OAA and DA) in the context of an ageing population;

(b)    to address the public disquiet about the burgeoning welfare spending on CSSA; .

(c)    to respond to the general consensus in the community that the residence requirement for CSSA should be tightened;

(d)    to provide an effective and long-term sustainable safety net for the financially vulnerable; and

(e)    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.”

3.6     Guidelines on waiving the requirement

33.  The Director of Social Welfare has internal guidelines for exercising his discretion to waive the 1‑year continuous residence requirement.  As they have not been published, it is worth setting them out here:

“C. Hong Kong residents not meeting the one-year-continuous-residence (OYCR) rule

(1)    Procedures for handling CSSA applications involving any Hong Kong resident not meeting the OYCR rule

· In principle, a CSSA applicant who meets all eligibility requirements except the OYCR rule will not be eligible for assistance until a date to be determined by the number of days of absence from Hong Kong in excess of the 56-day permissible limit during the one-year period immediately before the date of application (hereunder the ‘assumed’ eligibility date).

· Where a Hong Kong resident applying for CSSA is unable to meet the OYCR rule, the IO [Investigating Officer] will, after investigation, arrange to issue a notification letter to the applicant advising him of his ineligibility as well as the ‘assumed’ eligibility date so that he can re-apply in due course if he wishes to. The case will be put aside or closed as appropriate afterwards. (The case will remain open if the applicant will be eligible for assistance within a month subject to his remaining in Hong Kong up to the ‘assumed’ eligibility date; otherwise the case will be closed for administrative convenience.)

· No discretion should be exercised to waive the OYCR rule except in cases where the applicant is considered to be in genuine hardship (see sub-paragraph (2) below) or where the applicant is a wage earner in the family.

(2)    Where the applicant is in genuine hardship

How to determine whether a CSSA applicant is considered to be in genuine hardship

· To determine whether a CSSA applicant who does not meet the OYCR rule is considered to be in genuine hardship, we will take into account:

- the resources available to him/his family, including any savings and other assets held by him/his family and any CSSA payable to his family members; and

- any assistance available to him/his family from relatives, friends or other sources.

· A CSSA applicant unable to meet the OYCR rule is not considered to be in genuine hardship if the total resources available to him/his family are sufficient to meet his/his family’s recognized needs under the CSSA Scheme for not less than two months.

· A CSSA applicant is considered to be in genuine hardship if the total resources available to him/his family are insufficient to meet his/his family’s recognized needs under the CSSA Scheme for two months.

· If, after investigation, a CSSA applicant is considered to be in genuine hardship, the IO will submit his findings in the Officer’s Report to the AuO [Authorising Officer]. Where appropriate, the AuO will consider putting up the case through the Supervisor to the SSSO(D) [Senior Social Security Officer (District)] for a decision.

Guidelines on the exercise discretion

· If the SSSO(D) is satisfied that a CSSA applicant is in genuine hardship, he will exercise discretion to exempt the applicant from the OYCR rule in the following manner:

- Where the total resources available to the applicant/the applicant’s family are insufficient to meet his/his family’s recognized needs from the date of his application for CSSA for one month, discretion can be exercised to exempt the applicant from the OYCR rule from the date of his application.

-  Where the total resources available to the applicant/the applicant’s family are sufficient to meet his/his family’s recognized needs from the date of his application for CSSA for one month but for less than two months, discretion can be exercised to exempt the applicant from the OYCR rule from the first day of the second month from the date of his application (The exercise of discretion is not required if the applicant is able to meet the OYCR rule before that date.  Where discretion has been exercised to exempt the applicant from the rule from that date, the case should be re-assessed accordingly if necessary).”

3.7     Post-2004 position

34.  According to the evidence, since 1 January 2004, the 1‑year continuous residence requirement has been applied universally across the board, ie to all adult applicants for social security benefits, regardless of their place of birth.  According to the Director’s figures, for the period between 1 June 2007 and 30 June 2009, there had been a total of 110,223 applications for CSSA.  5,149 applications (around 4.7% of the total applications) did not satisfy the 1‑year continuous residence requirement and applied for a waiver of the requirement.  3,414 of those applications successfully obtained a waiver.  111 of those applications had their waiver applications and therefore their CSSA applications rejected.  Another 1,600 applications had simply been withdrawn.  Apparently, a majority of the applicants concerned had previously resided on the Mainland before they applied for CSSA within their first year of return.

35.  According to the latest figures supplied in the evidence, in 2007-2008, total recurrent public expenditure on social welfare reached $33.9 billion, taking up 16.0% of the total recurrent public expenditure amongst various policy areas, including education (22.1%), health (14.9), support (13.5%), security (11.4%), infra-structure (5.4%), economic (5%), housing (4.4%), environment and food (4%), and community and external affairs (3.3%).  Total actual expenditure of the Social Welfare Department was about $34 billion.  Analysed by programme, social security took up a lion’s share (73%) amongst the various welfare services in 2007-2008.  The other programmes were elderly services (9.7%), rehabilitation and medical social services (8.1%), family and child welfare services (4.1%), youth services (3.9%), offender services (0.8%) and community development (0.4%).  As at end-March 2009, there were 289,469 CSSA cases providing assistance to 478,562 people.  The annual expenditure on CSSA in 2007-2008 amounted to $18.04 billion.

4    PRELIMINARY OBSERVATIONS

36.  It is quite apparent that the present challenge mounted by the applicant against the 1‑year continuous residence requirement has become largely academic since the grant of leave.  The simple reason is that he has since been residing in Hong Kong for over 1 year and has become entitled to apply for CSSA again.  However, it is common ground that the present challenge raises a question of general importance.  In accordance with established principles, the parties agree, and the Court accepts, that it should exercise its exceptional discretion to hear the substantive application.  See generally Leung v Secretary for Justice [2006] 4 HKLRD 211; Chit Fai Motors Co Ltd v Commissioner for Transport [2004] 1 HKC 465; Secretary for Security v Prabakar (2003) 6 HKCFAR 397; Po Fun Chan v Winnie Cheung (2007) 10 HKCFAR 676, para 18.

37.  The present case is not concerned with the residence requirement for those who are already receiving CSSA.  No comparison is sought to be made, in terms of the relevant residence requirements, between those who are applying for CSSA and those who are already receiving CSSA.  In those circumstances, in considering the applicant’s complaint and challenge, the Court would disregard the position of those who are already receiving CSSA.

38.  Mr Hectar Pun, for the applicant, relies on four grounds to challenge the 1‑year continuous residence requirement.  Mr Tsoi, representing the interested party, raises various other grounds.  As indicated at the outset, two of these grounds merit special attention.

5     DISCRIMINATION

5.1     The law

39.  First, discrimination or inequality before the law.  Article 25 of the Basic Law provides that all Hong Kong residents shall be equal before the law.  Article 22 of the Hong Kong Bill of Rights, which is constitutionally entrenched by article 39 of the Basic Law, also provides that all persons are equal before the law and are entitled without any discrimination to the equal protection of the law.

40.  The law in this regard has been examined in some detail in Kong Yun Ming at paras 66-102 and Fok Chun Wa at paras 73-79, and it is not necessary to repeat it here.  Nonetheless, the oft-cited passage in the judgment of the Chief Justice in the leading case of Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335, paras 19 to 21, is worth reiterating:

“19.    In general, the law should usually accord identical treatment to comparable situations. As Lord Nicholls observed in Ghaidan v Godin-Mendoza [2004] 2 AC 557 at p. 566C:

Like cases should be treated alike, unlike cases should not … be treated alike.

20.    However, 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 a 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.

The above test will be referred to as “the justification test”. In the present case, the Court has had the benefit of submissions on its appropriate formulation. There is no material difference between the justification test and the test stated in R v Man Wai Keung (No 2) [1992] 2 HKCLR 207 at p. 217 which was used by the Court in So Wai Lun v HKSAR (2006) 9 HKCFAR 530 at para. 20.

21.    The burden is on the Government to satisfy the court that the justification test is satisfied.  Where one is concerned with differential treatment based on grounds such as race, sex or sexual orientation, the court will scrutinize with intensity whether the difference in treatment is justified.  See Ghaidan v Godin-Mendoza [2004] 2 AC 557 at p. 568G (Lord Nicholls).”

5.2     Differential treatment requires justification

41.  In the present case, one is, by definition, dealing with those Hong Kong residents who have satisfied the 7-year residence requirement.  In other words, in most cases, one is concerned with permanent residents of Hong Kong.  In the following judgment, I will, for the sake of convenience, simply refer to these residents as “permanent residents”.

42.  In this case, one is concerned with a difference in treatment of permanent residents, depending on whether they have resided in Hong Kong for a continuous period of not less than 1 year immediately prior to the application for CSSA, subject to the grace period of 56 days.

43.  In my view, the differential treatment plainly requires justification in order to be constitutional and lawful.

5.3     Intensity of scrutiny

44.  There is no controversy that like the 7-year residence requirement dealt with by this Court in Kong Yun Ming, the differential treatment involved in the 1‑year continuous residence requirement in the present case does not concern a ground of differentiation which is inherently invidious and suspect and attracts the closest scrutiny by the court.  See Kong Yun Ming, paras 72 to 81.

45.  However, it does not follow that differentiating permanent residents according to their lengths of continuous residence in Hong Kong immediately before their applications for CSSA for the purposes of determining their entitlement to CSSA is prima facie unobjectionable or does not require justification.  The true view is that unless justified in terms of the justification test set out in Yau Yuk Lung, such differential treatment would amount to unconstitutional and unlawful discrimination.  All it means, when one says that no inherently invidious or suspect ground of differentiation is involved, is that in applying the justification test, one does not scrutinise with intensity whether the difference in treatment is justified; rather, where considerations of the general public interest, such as considerations involving social or economic policy are involved, the court would, where appropriate, defer to the judgments or decisions of the Government or Legislature.  It does not mean, however, that the court would abrogate its supervisory role.

46.  What varies, depending on the category of ground of differentiation concerned, is the intensity of the scrutiny.  What remains unchanged, regardless of the type of ground of differentiation involved, is the requirement of the justification test.

5.4     The stated aim as the legitimate aim – any genuine need shown?

47.  The first element of the justification test is the pursuit of a legitimate aim for the differential treatment.  I have already mentioned that in the evidence filed on behalf of the Director, various aims have been alluded to.

48.  However, it is plain from the contemporaneous Government papers, the evidence filed as well as counsel’s submission that the primary aim relied on is the stated objective “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” (“the stated aim”).  I will therefore focus on this stated aim, and presently return to the other possible aims to justify the differential treatment.

49.  As the extracted passage from the judgment of the Chief Justice in Yau Yuk Lung shows, for any aim to be legitimate, “a genuine need for such difference must be established” (para 20(1)).

50.  The problem with the stated 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 as a legitimate aim in the present case lies with the lack of sufficient evidence to establish the same as “a genuine need”.

51.  As has been mentioned, the report of the Task Force did not contain any detailed discussion on the social, economical 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, whether in the past, at the time or in the future.  All the report did (at para 5.59) was to note that more and more residents of Hong Kong were moving to foreign countries or the Mainland to live and work, and they probably contributed less to the local economy and paid no local taxes.  But even on this point, the same paragraph recognised that the matter involved complex issues as some residents, though away from Hong Kong for a long period of time, might still maintain close link with Hong Kong “through property or other asset ownership, supporting the livelihood of residents, such as their relatives in Hong Kong, charitable donations, etc.”  The report simply said that there was concern whether these people should enjoy the same privileged access to subsidised public services as other residents once they returned.

52.  By itself, this is hardly sufficient – and the burden, as the Court of Final Appeal has pointed out, is squarely on the part of the Government to justify the differential treatment – to demonstrate a genuine need, so as to render the stated aim a legitimate aim for the purposes of the justification test.

53.  I have also referred to the various papers that the Government prepared for the consideration of the Legislature, as well as the evidence filed on behalf of the Director in these proceedings.  It is fair to say that one simply does not find any detailed analysis, data or statistical figures, to back any suggestion that there was, at the time the new rule was introduced, a genuine need 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.  For instance, one simply has no idea, as a matter of statistics, or even as a matter of rough estimates, how many people per year were returning to Hong Kong after staying overseas or on the Mainland “for a long period of time”, whatever that little phrase means (see below), and how many of them applied for CSSA as soon as they returned to Hong Kong.  Nor can one find any projection or estimate as to what the short term, medium term or long term situation was (or is) likely to be.

54.  In this regard, one must not be confused by the very detailed analysis, figures and data that were contained in the various Government papers and in the Task Force’s report.  As stressed before, they were essentially materials dealing with the reasons for introducing the 7‑year residence requirement, and had little if anything to do with the separate and new 1‑year continuous residence requirement.

55.  Certainly, at the time, there was public disquiet with the burgeoning welfare spending on CSSA and a general consensus in the community that the then residence requirement (ie the 1‑year residence requirement which was subsequently changed to the 7‑year residence requirement) should be tightened.  Yet it is a fair comment to make that they were all related to the problems caused by the substantial influx of “new arrivals” from the Mainland, a high proportion of whom would turn to CSSA soon after their arrival.  All this was dealt with in great detail in this Court’s judgment in Kong Yun Ming.  Indeed, the report of the Task Force did not relate the public disquiet and general consensus to any problems caused by those who applied for CSSA as soon as they returned to Hong Kong, after living outside Hong Kong for a long time.  It merely recommended an in-depth review in future.

56.  Even if one were, for our present purposes, entitled to rely on the benefit of hindsight, the post-2004 statistical figures disclosed in the evidence would simply be insufficient to build a case of a genuine need, in order to salvage the stated aim as a legitimate aim.  As mentioned, according to the statistics, in the 25 months between 1 June 2007 and 30 June 2009, only 5,149 applications out of a total of 110,223 applications for CSSA failed to meet the 1‑year continuous residence requirement and applied for a waiver of the same.  That was 4.7% of the total applications.  Moreover, according to the same statistics, of the 5,149 applications which applied for a waiver, 3,414 were successful.  In other words, 66.3% of the applications for a waiver were successful.  Those who failed to obtain a waiver and those who withdrew their applications voluntarily only amounted to 1,711 applications, or 1.55% of the total applications for CSSA during those 25 months.  If these figures mean anything, they suggest that those permanent residents, who turned to CSSA as soon as they returned to Hong Kong after living outside Hong Kong “for a long time”, only comprised a very minor proportion of the total CSSA applications, and those who failed to satisfy the 1‑year continuous residence requirement and also failed to obtain a waiver were of an even smaller proportion.  At least on the face of it, they did not cause or could not have caused a significant strain on the finite resources available, when viewed in the entire context.

5.5     Burden of proof on Government

57.  It has to be stressed, as the Court of Final Appeal has stressed in Yau Yuk Lung, that the burden is squarely on the Government to justify the purported aim as a legitimate aim, in the sense that there was, at the material time, a genuine need for the differential treatment.  Indeed in Yau Yuk Lung itself, the Government failed to do precisely that.  At issue was a statutory provision which criminalised only homosexual buggery otherwise than in private.  Its purpose was apparently for the protection of public decency.  By enacting the provision, the Legislature sought to protect the community from outrageous public behaviour.  However, the Court of Final Appeal rejected that as a legitimate aim for the sole reason that “a genuine need for the difference in treatment” was not made out.  On behalf of the Government, it was argued that in enacting the provision, the Legislature must be taken to have considered that there was a genuine need for such a specific offence as part of the package to reform the law relating to homosexual conduct.  The Chief Justice rejected the argument in the following terms:

“27.  The appellant’s submission does not address the critical question. What must be established is a genuine need for the differential treatment. That need cannot be established from the mere act of legislative enactment. It must be identified and made out. In the present case, no genuine need for the difference in treatment has been shown. That being so, it has not been established that the differential treatment in question pursues any legitimate aim. The matter fails at the first stage of the justification test.

28.    In enacting a package of measures to reform the law governing homosexual conduct, the Legislature was entitled to decide whether it is necessary to enact a specific criminal offence to protect the community against sexual conduct in public which outrages public decency.  But in legislating for such a specific offence, it cannot do so in a discriminatory way.  Section 118F(1) is a discriminatory law.  It only criminalises homosexual buggery otherwise than in private but does not criminalise heterosexuals for the same or comparable conduct when there is no genuine need for the differential treatment.”

58.  Bokhary PJ, in his concurring judgment, also took the view that there was simply no demonstrable genuine need for the differential treatment.  As far as protecting public decency was concerned, this was already covered by the common law offence of outraging public decency, which is neutral on sexual orientation.  His Lordship explained:

“45. By its effect, s. 118F(1) departs from identical treatment. And it does so in a particularly serious way since it is a penal law of some severity. But there is simply no demonstrable genuine need for this departure. Such non-discriminatory objective as can be attributed to this subsection is, at least in general, catered for by the common law offence of outraging public decency, which s. 101I of the Criminal Procedure Ordinance, makes punishable by up to seven years’ imprisonment. This common law offence does not have the effect of targeting any group. The present appeal is not an occasion for identifying the full definition of this common law offence. Suffice it to say that, on the English cases, it would appear that this common law offence is committed when there is done, in a place where there is a real possibility of members of the public witnessing it, any act of a lewd, obscene or disgusting nature that outrages public decency. Given the existence of this common law offence and the maximum penalty for it, the alleged prevalence of homosexual buggery in public does not begin to give rise to a demonstrable genuine need for a provision like s. 118F(1). So one cannot begin to justify this subsection.”

59.  Certainly, one bears in mind that in Yau Yuk Lung, one was concerned with a ground of discrimination that was inherently invidious or suspect, and therefore attracted an intensive scrutiny.  However, even giving due allowance for that difference, the present case still suffers from the same difficulty, namely, that the Government has simply failed to demonstrate that there was a genuine need for the differential treatment.

60.  When contrasted with the substantial amount of contemporaneous materials made available to the court to justify the respective decisions under challenge in Kong Yun Ming and Fok Chun Wa[2],the dearth of such materials in the present case is unmistakable.  Mr Jat SC, Mr Abraham Chan with him, argues that whilst it is desirable or convenient to establish a legitimate aim by reference to figures and analysis, their absence does not mean that there can be no legitimate aim.  I am prepared to accept that on occasions, an objective may self-evidently be a legitimate aim without additional or extraneous proof.  However, it all depends on the facts.  In the present case, given the stated aim, I do not think it can amount to a legitimate aim without proof of a genuine need.  Restrained by the very limited materials available in the evidence to establish the supposed legitimate aim, Mr Jat is simply unable to demonstrate to the Court the requisite genuine need.

61.  Indeed, when pressed, Mr Jat asked the Court not to assume that the necessary analysis, particulars or statistical figures were in existence or had been considered by the Government before imposing the new 1-year continuous residence requirement.  That was a long way of saying that the Government was unable to make out a case of a genuine need for the differential treatment.

62.  In the circumstances, the Government’s case fails at the first hurdle.

5.6     Rational connection and no-more-than-necessary

63.  For the sake of completeness, I should go on to discuss whether the stated aim satisfies the other two elements of the justification test, namely, rational connection and no-more-than-necessary.  On the facts, the two elements can be examined together here.

64.  The stated aim is 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.  Given this stated aim, one would reasonably expect to find a requirement which, first, defines the persons who are caught by the new rule by reference to their lengths of absence from Hong Kong; and, secondly, sets out, as regards a person so caught by the new rule, the length of suspension of his entitlement to CSSA after his return to Hong Kong.

65.  But that is not to be.  Instead, one finds a single rule, in the form of the 1-year continuous residence requirement, which states that, subject to a grace period of 56 days, an adult applicant for CSSA must have resided continuously in Hong Kong for no less than one year immediately prior to the application.

66.  Mr Jat explains to the Court that this rule deals with the two matters outlined above in one-go:

(1)    As regards the length of absence from Hong Kong that would trigger suspension, it is expressed in terms of a positive requirement to live continuously in Hong Kong for a period of 1 year (subject to the grace period of 56 days) immediately before the application;

(2)    As for the period of suspension, it is set at the actual period of absence less 56 days, subject to a ceiling of 309 days (ie one year less 56 days) – provided that the applicant stays in Hong Kong for the requisite period of suspension.

5.7     What is the triggering period of absence?

67.  Putting aside for the time being the period of suspension, which requires some explanation, and focusing on the triggering length of absence, one encounters confusion in the Government’s case.

68.  Mr Jat’s case is that the length of absence from Hong Kong that would trigger suspension is expressed in terms of a positive requirement to reside continuously in Hong Kong for a period of 1 year (subject to the grace period of 56 days) immediately before the application.  He submits that there is no substantive difference between expressing the requirement in terms of a period of continuous residence in Hong Kong and expressing it in terms of a period of absence from Hong Kong.  That is true so far as it goes.  It is not the form but rather the substance that matters.  However, one must not get confused between the (maximum) period of absence from Hong Kong permitted beyond which suspension would be triggered and the (minimum) period of continuous residence in Hong Kong required, which are not the same numerically.

69.  What is the minimum period of continuous residence in Hong Kong required under the 1-year continuous residence requirement?  The answer is one year (less the grace period), or 309 days (365 days – 56 days).  That is not the same as the maximum period of absence from Hong Kong permitted beyond which suspension would be triggered.  The maximum period of absence from Hong Kong permitted is not one year (less the grace period), as on occasions the submissions made at the hearing would seem to suggest[3].  Rather, the maximum period of absence from Hong Kong allowed is only 56 days, that is to say, the length of the grace period[4], beyond which entitlement to CSSA would be suspended.  

70.  To the (occasional) extent that the Government’s case has confused the minimum period of continuous residence in Hong Kong required with the maximum period of absence from Hong Kong permitted, and proceeded on the basis that the maximum period of absence permitted is one year (less the grace period) or 309 days, it is erroneous.  It is therefore not necessary to deal with what the position would have been if the maximum period of absence permitted had really been one year (less the grace period) or 309 days, particularly in terms of the court’s general deference to the Government’s decisions in matters of the present type.

71.  As the stated aim is to discourage those who have lived outside Hong Kongfor a long time from relying on CSSA as soon as they return, it is much more convenient to speak in terms of the maximum period of absence from Hong Kong permitted beyond which suspension would be triggered, in considering whether the 1-year continuous residence requirement bears a rational connection to the stated aim and is no more than is necessary to achieve the aim.

5.8     Many not away “for a long time” are caught

72.  Once it is clarified that the 1-year continuous residence requirement only permits an absence from Hong Kong for an aggregate period of 56 days in the year immediately preceding an application for CSSA, the problem with the requirement is instantly apparent. 

73.  Quite obviously, 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 as used in the stated aim, regardless of how much deference the court is bound to accord to the Government’s decisions in matters of the present type.

74.  A moment’s reflection on how the 1-year continuous residence requirement works in practice would reveal that it affects all sorts of people who have only been away from Hong Kong temporarily.  For example, a permanent resident who has been outside Hong Kong for a total of 60 days in the year immediately preceding his application for CSSA would fail the 1-year continuous residence requirement, just as a permanent resident who has been away from Hong Kong for 60 years.

75.  I would, for the time being, put aside the question of how long the person who has been away for 60 days has to wait (and reside in Hong Kong) before the suspension would end, as it relates to the second question of the period of suspension.  Yet it must be correct to say that any period of suspension of his entitlement to CSSA is objectionable as a matter of principle, because his case plainly falls outside the ambit of the stated aim.  The stated aim, at the risk of repetition, is 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.

76.  In my example, the person has only been away from Hong Kong for a total period of 60 days and he can hardly be described as somebody who has “lived outside Hong Kong for a long time”.  Yet he is caught by the 1-year continuous requirement.  In fact, the period of 60 days in my example need not be a continuous period.  The person’s absence from Hong Kong can be scattered over the year and nonetheless he is caught by the requirement if the total number of days for which he has been away is in excess of 56 days.

77.  Thus, for instance, a Hong Kong permanent resident who has spent every weekend across the border in Shenzhen because his wife and family reside there and, in addition, has spent some of the public holidays such as the Chinese New Year holidays etc, with his family in Shenzhen, would fail the 1-year continuous residence requirement, although in everyday parlance, he cannot possibly be described as someone who has “lived outside Hong Kong for a long time”.

78.  The Court is of course mindful that it must not get bogged down by fringe cases where the period of absence only exceeds the grace period by several days, or by isolated examples affecting just a few people.  The Court readily accepts that the existence of anomalous results in fringe or isolated cases could be justified by the need to draw lines: Kong Yun Ming at para 126, citing R (Carson) v Secretary of State for Work and Pensions [2006] 1 AC 173, para 41.  That is not objectionable by itself once it is accepted that a line has to be drawn somewhere.  But the crucial question remains: whether the Court is in a position to say that “the line has been drawn at a self-evidently unreasonable point”?  Fok Chun Wa at para 80 (per Stock VP). 

79.  Take the case of a civil servant who has been sent by the Government to attend a short course lasting several months overseas as part of his training.  He is caught by the 1-year continuous residence requirement upon his return.  But has he been away from Hong Kong “for a long time”?

80.  Similarly, a volunteer worker who chooses to stay behind at an area affected by a natural disaster on the Mainland to help the victims or orphans there for a short period of time, say half a year, will find himself disqualified from applying for CSSA, for a period of time, upon his return to Hong Kong.

81.  Students who are 18 or above and who study at universities overseas will not be able to apply for CSSA for a period of time after their return to Hong Kong, notwithstanding that, for instance, they spend all their term breaks and summer holidays in Hong Kong.  A university student on a half-year overseas exchange student programme will be caught by the 1-year continuous residence requirement.

82.  Likewise, a patient who seeks medical treatment on the Mainland and remains there for several months will find himself disqualified from claiming CSSA for a period of time upon his return to Hong Kong, perhaps just when he needs it most.  An elderly parent who spends a few months with his children and relatives overseas or on the Mainland will face the same consequence upon his return to Hong Kong.

83.  There is no need to multiply the examples.  The common thread to all these very different examples involving a broad spectrum of people is that in none of them can one fairly say that the resident affected has “lived outside Hong Kong for a long time”. 

84.  In my view, the line in the present case has been drawn at a “self-evidently unreasonable point” (of 56 days), and one is not simply concerned with harsh and apparently arbitrary consequences in fringes or isolated cases only.  In terms of the justification test, there is simply no rational connection between the stated aim as a legitimate aim and the 1-year continuous residence requirement, so far as those people who are only temporarily absent from Hong Kong are concerned.  From another perspective, the 1-year continuous residence requirement simply goes beyond what is necessary to achieve the stated aim (as a legitimate aim).  Many “innocent” people, as it were, are caught by the requirement.  Admittedly, the chances of some of these people needing to apply for CSSA immediately or shortly after their return to Hong Kong are apparently small.  However, this does not make any difference to the above analysis, unless one can say that the overall chances of all these “innocent” people requiring CSSA after their return are so slim that they can be ignored when drawing the line in question at 56 days.  But certainly no one can say that on the very limited evidence available.

5.9      Requirement operates indiscriminately regardless of reasons of absence

85.  Equally if not more significantly, the 1-year continuous residence requirement operates irrespective of the reason for the departure from Hong Kong and once the limit of 56 days is exceeded, the suspension of entitlement to CSSA applies indiscriminately to all situations.

86.  This is objectionable.  According to the Task Force’s report (para 5.59) and the limited materials available (including counsel’s submission on behalf of the Director[5]), the rationale behind the stated aim is that permanent residents who are away from Hong Kong for a long time make less contribution to Hong Kong, are less connected with and have lesser commitment to Hong Kong.  Therefore, they are, in effect, required to live in Hong Kong after their return for a period of time to re-establish contribution and commitment to, and connection with Hong Kong, before they can resume their entitlement to CSSA. 

87.  Thus analysed, it is especially important to find out the reasons why and the circumstances under which the applicants for CSSA have lived or been away from Hong Kong for a long time immediately prior to their applications for CSSA.  Therefore, for instance, a civil servant has been sent overseas by the Government to work or study for a substantial period of time, say, two years.  Whilst his absence from Hong Kong might be said by some to have been “for a long time”, it would be wholly wrong and indeed unfair to the civil servant to say that his contribution and commitment to, and connection with, Hong Kong has become less during or by reason of those two years’ absence.  

88.  The same logic applies to an employee working in the private sector.  Indeed, the applicant in the present case provides a convenient example.  He was employed by a Hong Kong textile manufacturing company, and was required by his employer to work mainly on the Mainland.  On the face of the evidence available, it is difficult to see how his contribution to Hong Kong, in the form of his contribution as an employee to his Hong Kong employer, has become less, just because he carried out his work on the Mainland on the instructions of his employer.  Neither can one say that he has had a lesser connection with Hong Kong because he was working on the Mainland for a Hong Kong company.  Nor can one question the applicant’s “commitment” to Hong Kong in those circumstances.

89.  The situation could be very different if one is concerned with, for instance, a permanent resident of Hong Kong who has emigrated to live and work in a foreign country for many years.

90.  In short, as the Task Force’s report very fairly pointed out, this is a complex issue.  The stated aim to discourage a permanent resident who has lived outside Hong Kong for a long time from applying for CSSA as soon as he returns to Hong Kong is itself based on a consideration of the resident’s contribution and commitment to, and connection with, Hong Kong.  To simply determine a permanent resident’s entitlement to CSSA by reference to his length of absence from Hong Kong immediately before the application for CSSA, without inquiring into the reasons and circumstances for his absence, is therefore quite unacceptable, even after giving due allowance for the policy need to employ hard and fast rules that are easy to understand and apply in this type of situation.  Put another way, to the extent indicated above, the requisite rational connection between the purported legitimate aim and the means to achieve the aim is missing, and the means adopted simply goes beyond what is necessary to achieve the purported aim.

5.10   Period of suspension

91.  I would now turn to the second aspect of the requirement, namely, the period of suspension.  Prima facie, the requirement itself would suggest that the period of suspension would vary depending on the number of days of absence and how those days of absence were scattered over the one-year period immediately prior to the application.  Thus, for a person who has been absent from Hong Kong for a total of 60 days, depending on how those 60 days were scattered over the one-year period immediately before his application, his period of suspension would vary between four days and 309 days (365 days less 56 days) – assuming he remains in Hong Kong during the period of suspension.

92.  However, according to the supplementary evidence which the Director has filed with the leave of the Court, that is not really the case[6].  Put in a simplified form[7], the requirement, as implemented by the Director, is that in the example I gave, ie a person who has left Hong Kong for 60 days, the period of suspension would only be four days, so long as the person involved reapplies for CSSA within a year after his first (unsuccessful) application for CSSA.  The first application has, in substance, the effect of crystallising the one-year period for counting his days of absence.  In the example I gave, the person has only exceeded the grace period by four days, and therefore his period of suspension is only four days. 

93.  Four days may seem insignificant.  But one can hardly say that they can be ignored by the application of the de minimis rule.  Nor is one only concerned with fringe cases here[8].  Thus for a permanent resident who has been away from Hong Kong for, say, three months, in the year immediately preceding his application, the period of suspension would be 34 days, or more than a month, which must be considered to be significant from the perspective of someone in need of financial assistance, whether in terms of the length of suspension or of the amount of financial assistance involved.  Yet such a person cannot possibly be said to have lived outside Hong Kong “for a long time”, and thus within the ambit of the stated aim in the first place.  Speaking in terms of his contribution and commitment to or connection with Hong Kong, it is difficult to see how the permanent resident in my example can be said to have contributed less to the society or have become less connected with or committed to Hong Kong by reason of his absence of three months.

94.  I therefore return to my earlier point.  There is simply no justification, in terms of rational connection or necessity, for suspending the entitlement to CSSA of those people described above, who have not, by any stretch of the language, lived outside Hong Kong for a long time.

5.11   Discretion to waive does not help

95.  It is true that a real discretion to waive the 1‑year continuous residence requirement is vested with the Director of Social Welfare, and he regularly exercises his discretion to waive the requirement in deserving cases, as the statistics available fully testify.  The guidelines governing the exercise of his discretion are well-established.  However, it should be noted that the guidelines do not require or permit the relevant officer to consider the reason for the applicant’s failure to meet the 1‑year continuous residence requirement.  Thus, for instance, in the present case, the fact that the applicant was sent to work on the Mainland by his Hong Kong employer was not considered by the relevant officer to be a relevant consideration.  Indeed the guidelines specifically state that “[n]o discretion should be exercised to waive the [requirement] except where the applicant is considered to be in genuine hardship … or where the applicant is a wage-earner in the family”.  This simply reflects the position presented in the Government papers which merely described the discretion to waive as exercisable “in cases of genuine hardship”[9].

96.  In those circumstances, there is no question of the Director’s using his discretion to waive the requirement to alleviate the wholly unwarranted hardship that the requirement works on those who were merely temporarily absent from Hong Kong for several months in total in the year immediately preceding the application for CSSA, or those who were absent from Hong Kong for a longer period of time but for “good” or “innocent” reasons such as those discussed above.  In other words, the existence of the discretion to waive the requirement, as it is designed or is exercised in practice, does not salvage the Director’s case in relation to rational connection and necessity for the differential treatment.

97.  For all these reasons, I take the view that even assuming that the stated aim is a legitimate aim in the present case, it still fails the second and third elements of the justification test.

5.12   Other possible legitimate aims

98.  So much for the stated aim as a legitimate aim and the application of the justification test to that aim.  I turn to the other possible legitimate aims alluded to in paragraph 25 of the affirmation of Choy Bo Chun, Polly which has been extracted above.  They can be disposed of quickly.

99.  First, “to align the residence requirements in the eligibility criteria for social security schemes (ie CSSA, OAA and DA) in the context of an ageing population”.  I doubt whether, on the facts, there was a genuine need for this purported aim.  One is here concerned with a “need”, rather than something that is just “reasonable” or “desirable” to have: cf The Sunday Times v United Kingdom (1979) 2 EHRR 245 at 275, 277-278.  In any event, adoption of the 1-year continuous residence requirement for CSSA was plainly not necessary.  To align the different residence requirements, one could simply drop the pre-existing requirement of one year’s continuous residence for disability allowance, rather than extend the requirement to CSSA and old age allowance.  Furthermore, the justification for the adoption of the requirement in the case of disability allowance was that the allowance was a long-term support, granted only to those who had “a genuine, long-term connection with Hong Kong before claiming [the allowance]”, so as to protect public funds[10].  For reasons explained, this justification does not hold up to scrutiny.

100.  Second, “to address the public disquiet about the burgeoning welfare spending on CSSA”.  This can be taken together with the third supposed legitimate aim, namely, “to respond to the general consensus in the community that the residence requirement for CSSA should be tightened”.  As mentioned before, the evidence available all focused on the problems posted by the new arrivals from the Mainland, and that was met by the extension of the pre-existing 1-year residence requirement to seven years (ie the introduction of the 7-year residence requirement).  The necessity for the introduction of the additional 1-year continuous residence requirement is not shown.

101.  Fourth, “to provide an effective and long-term sustainable safety net for the financially vulnerable”.  Again, the long-term financial sustainability of the system was threatened, at the time, by the new arrivals, a problem addressed by the introduction of the 7-year residence requirement.  The evidence simply fails to show what, if any, impact, 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.

102.  Finally, “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”.  Again, there is simply no or insufficient evidence to suggest that the introduction of the 1‑year continuous residence requirement (as opposed to the introduction of the 7‑year residence requirement) was necessary to achieve the aim.

103.  In any event, it is difficult to see, in relation to these possible legitimate aims (save for the first one), how suspending the entitlement to CSSA of those who were simply absent temporarily from Hong Kong for a total period of several months prior to their applications, or those who were absent for a longer period of time due to “good” or “innocent” reasons such as those discussed above, would be rationally connected to the suggested legitimate aims, or necessary for the achievement of any of these aims.

104.  For similar reasons, the Government’s case is not improved by considering all these possible legitimate aims as well as the stated aim together, when applying the justification test.

5.13   Conclusion

105.  For all these reasons, I have come to the conclusion that the 1‑year continuous residence requirement fails the justification test.  In other words, the requirement constitutes an unconstitutional and unlawful discrimination against those permanent residents (understood in the sense used in this judgment) who have been absent from Hong Kong for a total period of more than 56 days in the year immediately prior to their applications for CSSA, when compared with those permanent residents who have not been so absent from Hong Kong immediately prior to their applications.

6    RIGHT TO TRAVEL

6.1     The arguments

106.  I now turn to the freedom to travel and to leave the Hong Kong Special Administrative Region guaranteed under article 31 of the Basic Law.  Article 8(2) of the Hong Kong Bill of Rights also guarantees that everyone shall be free to leave Hong Kong.  Mr Pun argues that the 1‑year continuous residence requirement infringes upon one’s relevant right and freedom to travel and to leave Hong Kong.  In short, it imposes a penalty on the right to travel.

107.  Mr Pun accepts that the right to travel is not absolute and may be restricted, provided that the restriction satisfies the proportionality test.

108.  Mr Jat, for the Director, contends that the right is not engaged at all, as all permanent residents are free to travel and to leave Hong Kong.  The 1-year continuous residence requirement does not prevent them from doing so.

6.2     Chan Wing Hing

109.  I reject Mr Jat’s argument.  In my view, the matter is squarely covered by the Court of Final Appeal’s decision in Official Receiver & Trustee in Bankruptcy of Chan Wing Hing v Chan Wing Hing (2006) 9 HKCFAR 545.  The case involved section 30A(1) of the Bankruptcy Ordinance (Cap 6) which provides that a bankrupt is automatically discharged from bankruptcy after the expiration of the “relevant period”.  Under section 30A(2), the relevant period for a first time bankrupt is four years.  Section 30A(10)(b)(i), the provision under challenge, stipulated, however, that where a bankrupt left Hong Kong without notifying the trustee of his itinerary and where he could be contacted the relevant period should not continue during the period he was absent from Hong Kong and until he notified the trustee of his return.  The constitutionality of section 30A(10)(b)(i) was challenged on the ground that it amounted to a restriction on the right to travel, specifically the right to leave Hong Kong, guaranteed both by article 31 of the Basic Law and by article 8(2) of the Hong Kong Bill of Rights.

110.  The Court of Final Appeal took the view that the right to travel should be given a generous interpretation.  The Court acknowledged that the bankrupt could freely leave without giving the notification.  Nonetheless, the majority of the Court concluded that the need to notify together with the sanction for failure to notify constituted a restriction on the right to travel.  Ribeiro PJ, dissenting, took the view that the notification requirement alone constituted the restriction.  This is how the majority reasoned that there was a restriction:

“37. Before discussing the application of the proportionality test, the nature of the restriction on the right to travel contained in s. 30A(10)(b)(i) must first be examined. Where a bankrupt leaves Hong Kong, the provision does not impose on him an express duty to notify the trustee of his itinerary and where he can be contacted. The bankrupt may freely leave without giving the notification. What the provision does is to impose a sanction for non-notification, namely, the relevant period for automatic discharge shall cease to run during the period of his absence and until he notifies the trustee of his return. Where he exercises his right to travel and leaves Hong Kong without giving the notification, he suffers the adverse consequence provided for by statute. The sanction of suspension provides the incentive for the bankrupt to notify and may be regarded as a constraining measure to seek to ensure notification. The bankrupt needs to notify in order to avoid the sanction.

38. Where the bankrupt leaves Hong Kong, it is obviously in his own interests to notify the trustee so as to avoid the sanction. The giving of notification is of course entirely within the bankrupt’s control and is not an onerous matter for him. No formality is prescribed. He may do so in writing or orally. Where the bankrupt travels outside Hong Kong frequently on short trips for business, leisure or any other reason, he may, if he is in a position to do so, give an overall notification in advance covering all his intended trips over a forthcoming period. He need not separately give a notification for each trip.

39. The restriction on the right to travel is contained in s. 30A(10)(b)(i) which provides for both notification and the sanction in the event of non-notification. It is the need to notify, taken together with the sanction for failure to notify, which should properly be regarded as constituting the restriction on the right. The exercise of the right to travel triggers the need to notify and the sanction in the event of failure to notify. The burden on the right consists not only of the need to notify but also the sanction for failure to notify. It would be artificial to isolate the need to notify from the sanction and to regard only the former as constituting the restriction. In substance, the sanction for non-notification is integral to the need to notify and they together constitute the restriction on the right to travel. Different considerations would applyif failure to notify carries no sanction.

40.    The decision in Association of Expatriate Civil Servants of Hong Kong v Chief Executive of HKSAR [1998] 1 HKLRD 615 (Keith J) provides an illustration of the approach that in considering the restriction on the right to travel, the relevant requirement must be taken together with the sanction for its non-compliance as constituting the restriction.  That case concerned the Chief Executive’s Executive Order relating to the public service which prohibits an interdicted officer from leaving Hong Kong without the Chief Executive’s permission and provides for possible disciplinary proceedings if the officer leaves without obtaining permission.  It was held that the requirement for permission together with the sanction of possible disciplinary proceedings where it is not obtained constitute the restriction on the right to travel.  See pp.624I-625A.”

111.  The majority of the Court went on to apply the proportionality test to determine whether the restriction could be justified.  On the facts, the majority concluded that the restriction could not be justified and declared that the provision in question was unconstitutional.

6.3     A restriction on the right to travel

112.  In the present case, the 1-year continuous residence requirement does not prevent any permanent resident from leaving Hong Kong as such.  However, it imposes a sanction in the sense that for anybody travelling and staying outside Hong Kong for a total period exceeding 56 days in the year immediately before the application for CSSA, his entitlement to CSSA is suspended for a period of time.  In my view, that plainly impedes upon the constitutional right to travel.

113.  Mr Jat seeks to distinguish Chan Wing Hing by pointing out that in that case, it was the notification requirement coupled with the sanction which constituted the restriction on the right to travel.  In the present case, there is no notification requirement.

114.  That is very true.  However, in my view, it only makes the present case worse.  In Chan Wing Hing, at least there was an escape route in the form of the notification procedure.  The sanction could be avoided by notifying the trustee, although according to the Court of Final Appeal, such a notification requirement, when backed by a sanction, nonetheless constituted a restriction which required justification.

115.  In the present case, there is no such escape route.  Anybody who has had any reason to stay outside Hong Kong for an aggregate period exceeding 56 days in the preceding year is subject to the suspension of his entitlement to CSSA upon his return to Hong Kong.  The only way to avoid the suspension is not to travel outside Hong Kong for more than 56 days in a year, and that plainly is a restriction on the right to travel. 

116.  The fact that upon his return, the permanent resident may or may not have reasons to apply for CSSA immediately is neither here nor there and does not make any difference to the analysis.  The entitlement to CSSA is a valuable right, which is in fact constitutionally guaranteed under article 36 of the Basic Law (which has been interpreted in Kong Yun Ming).

117.  The US cases of Shapiro v Thomson 394 US 618 (1969) and Saenz v Roe 526 US 489 (1999) provide illustrations, albeit under different constitutional settings, of how a requirement of minimum residence immediately preceding an application for social welfare benefits in a State in the Untied States could infringe the constitutionally guaranteed right to inter-state travel.  In a sense, the present case is an a fortiori situation because it involves suspending a permanent resident’s entitlement to CSSA upon his return to Hong Kong after a period of absence, whereas in the two US cases, the Supreme Court was concerned with US citizens applying for social welfare benefits in a State to which they had just immigrated (from another State within the United States).  See also the further discussion of these and other US authorities by Bokhary PJ in Gurung Kesh Bahadur v Director of Immigration (2002) 5 HKCFAR 480, paras 50-55.

118.  By similar reasoning, given the way suspension of entitlement to CSSA works once it is triggered by previous travelling, a permanent resident’s right to travel is also restricted during the period of suspension in that the removal of suspension would depend on whether he refrains from exercising his right to travel and resides in Hong Kong during that period of time.

6.4     Is the restriction necessary?

119.  For these reasons, I conclude that the 1-year continuous residence requirement restricts the right to travel. 

120.  The restriction requires justification by the application of the proportionality test.  In the context of the right to travel, the test takes the form of whether the restriction is necessary, as per article 8(3) of the Hong Kong Bill of Rights, in the sense that: (1) the restriction must be rationally connected to the protection of the rights of others; (2) the means used to impair the right to travel must be no more than is necessary to protect the rights of others.  Chan Wing Hing, paras 36 and 81.

121.  I have already considered at great length whether the 1-year continuous residence requirement satisfies the justification test in the context of discrimination.  It is apparent that the matters to be taken into account when applying the proportionality test in the context of the right to travel are similar to those already considered under the justification test. 

122.  For similar reasons, I conclude that in the present context of the right to travel, the restriction represented by the 1-year continuous residence requirement also fails the proportionality test. 

123.  I therefore need not deal with Mr Pun’s submission that in applying the proportionality test in the present context, the Court should not accord the same deference to the Government’s judgment and decision as it does when applying the justification test to determine discrimination[11].

6.5     Prescribed by law

124.  Nor do I need to decide whether the 1-year continuous residence requirement is a restriction that is “prescribed by law” (article 39(2) of the Basic Law) or “provided by law” (article 8(3) of the Hong Kong Bill of Rights), on the ground that there is no (direct) statutory underpinning of the requirement and that, in any event, the internal guidelines on counting the period of suspension and on exercising the discretion to waive the residence requirement are not published.  See Gurung Kesh Bahadur at para 34; Leung Kwok Hung v Chief Executive of the Hong Kong Special Administrative Region, CACV 73 & 87/2006, 10 May 2006, para 38; but see R (Munjaz) v Mersey Care NHS Trust [2006] 2 AC 148, paras 34, 103 & 122; A (Torture Claimant) v Director of Immigration [2008] 4 HKLRD 752; Fordham, Judicial Review Handbook (5^th ed) para 59.1.4.

6.6     Conclusion

125.  For these reasons, the 1-year continuous residence requirement is also unconstitutional and unlawful for infringing the right to travel.

7        APPLICANT’S OTHER ARGUMENTS

126.  In the circumstances, I do not propose to deal with Mr Pun’s two other arguments.  The first one is based on the freedom of choice of occupation guaranteed under article 83 of the Basic Law.  The second one relies on article 145 of the Basic Law which concerns the Government’s right and responsibility to formulate policies on the “development and improvement” of the pre‑existing social welfare system in the light of the economic conditions and social needs.

7.1     Freedom of choice of occupation

127.  In relation to the freedom of choice of occupation, there is no dispute that this does not entail a positive obligation on the part of the Government to provide jobs or guarantee the right of employment in any field of occupation.  However, it imposes a negative obligation against conscription for a job.  See Cheng Chun-ngai Daniel v Hospital Authority, HCAL 202/2002, 12 November 2004, Hartmann J, paras 54 to 56; Yash Ghai, Hong Kong’s New Constitutional Order, the Resumption of Chinese Sovereignty and the Basic Law (2^nd ed), 435 to 436.  Mr Pun contends that just as in the case of the right to travel, the 1‑year continuous residence requirement interferes with a permanent resident’s choice of occupation, to the extent that if the chosen job in Hong Kong requires the resident to work outside Hong Kong for a total period exceeding 56 days in the year preceding an application for CSSA, the resident’s entitlement to CSSA is affected.

128.  Given my conclusions above in relation to discrimination and the right to travel, it is unnecessary for the Court to deal with this argument of Mr Pun.  The Court is also reluctant to do so given that very limited materials are referred to by counsel in respect of this argument.  As observed by Hartmann J in Cheng Chun-ngai Daniel at para 54, article 33 of the Basic Law does not yet appear to have been the subject of judicial scrutiny, leaving aside Hartmann J’s own judgment, which only touched on the point.

129.  On the basis of the arguments actually heard, I am not prepared to express any definite view on the point in question.

7.2     Development and improvement of social welfare system

130.  As regards article 145 of the Basic Law, Mr Pun’s argument is essentially that the pre-existing social welfare system has not been “developed and improved” by the introduction of the 1-year continuous residence requirement, which is discriminatory in nature and amounts to an unjustified restriction on the right to travel.  In this regard, Mr Pun has in mind what this Court has said in paragraph 53 of its judgment in Kong Yun Ming.

131.  However, precisely because the new requirement is discriminatory in nature and infringes upon one’s right to travel, there is nothing to be gained by resorting to this “development and improvement” argument: see the Court’s discussion of a similar situation in Kong Yun Ming at paras 58 to 65.  Everything boils down to discrimination and the unconstitutional restriction on the right to travel.

8    INTERESTED PARTY’S ADDITIONAL ARGUMENTS

132.  Mr Tsoi, representing the interested party, raises additional arguments based on article 36 of the Basic Law (right to social welfare); article 3 of the Hong Kong Bill of Rights (cruel, inhuman or degrading treatment); and articles 2, 4, 5, 9 and 11 of the International Covenant on Economic, Social and Cultural Rights (ICESCR), which is also constitutionally entrenched by article 39(1) of the Basic Law.  Those articles in the ICESCR relate to the right to social security and the right to an adequate standard of living, including adequate food, clothing and housing.  

133.  Mr Tsoi also takes the point that in deciding to adopt the 1-year continuous residence requirement, the Government failed to take into account a relevant consideration, namely, its international obligation under the ICESCR. 

134.  Mr Tsoi further runs the argument that the exemption to the 1‑year continuous residence requirement given to those under 18 years old constitutes discrimination against others by reference to age, and is particularly unfair to elderly people.

135.  The ground based on article 36 per se must be rejected as unarguable, given this Court’s decision in Kong Yun Ming, paras 39-65.  Indeed a similar ground relied on by the applicant was rejected by the Court when it gave leave to apply for judicial review.

136.  As regards the other grounds, they are additional grounds not relied on by the applicant.  I am not prepared to deal with them for two main reasons.  First, given my conclusions based on discrimination and the right to travel, it is unnecessary to consider these grounds.  Secondly, the interested party only made known these grounds to the respondent and to the Court on the first day of the substantive hearing.  The Director was caught totally by surprise.  Understandably, the evidence filed did not cover all the additional grounds sought to be relied on.  Furthermore, Mr Jat and his team were wholly unprepared for arguing against these additional grounds.  In those circumstances, it would be unfair not only to the Director, but also to the Court, for these grounds to be entertained in the present case.  See Lo Hom Chau v Director of Marine, HCAL 59/2009, 17 March 2010, Andrew Cheung J.

9    OUTCOME

137.  The application for judicial review succeeds.  The Court grants the following substantive relief:

(1)     an order of certiorari to bring up and quash the decision of the Director of Social Welfare contained in a letter dated 17 February 2009 rejecting the applicant’s application for CSSA on the sole ground that he did not satisfy the 1-year continuous residence requirement;

(2)    an order of certiorari to bring up and quash the decision of the Social Security Appeal Board contained in a letter dated 5 June 2009 dismissing the applicant’s appeal from the Director’s decision rejecting the applicant’s application for CSSA;

(3)    a declaration that the requirement that, subject to a grace period of 56 days, an adult applicant for CSSA must have resided in Hong Kong continuously for at least one year immediately before the date of application violates articles 25 and 31 of the Basic Law and articles 8(2) and 22 of the Hong Kong Bill of Rights and is unconstitutional and unlawful.

138.  The Director has not asked for a temporary suspension order in relation to the Court’s declaration regarding the constitutionality of the 1‑year continuous residence requirement, in case the Court is not with the Director, so that the Government may have time to work out some alternative measure in replacement of the 1‑year continuous residence requirement, if it so wishes.  In any event, the Court does not consider that this is an appropriate case for the exercise of the Court’s exceptional jurisdiction to grant such an order.  See generally Koo Sze Yiu v Chief Executive of the HKSAR (2006) 9 HKCFAR 441; Chan Kin Sum Simon v Secretary for Justice, HCAL 79/2008, 11 March 2009, Andrew Cheung J. 

139.  Amongst other things, the Court has taken into account the fact that on the evidence, there is simply little material to demonstrate a genuine need for the stated aim to discourage people who have lived outside Hong Kong for a long time from applying for CSSA as soon as they return to Hong Kong.  The Court has also borne in mind the relatively small number of applications which did not meet the 1-year continuous residence requirement and which, additionally, failed to invoke the Director’s discretion to waive the requirement, on the statistical evidence available.  The Court further doubts the utility of a temporary suspension order in the present case given that such an order would not shield the Government from liability (save for committing contempt of court for acting in breach of a court declaration): Chan Kin Sum Simon at paras 63 to 64.

140.  As regards costs, I make the following costs order nisi, namely, that the Director pay to the applicant the costs of these proceedings, including all costs previously reserved, to be taxed if not agreed; that there be legal aid taxation of the applicant’s own costs; that there be no order as to costs as between the interested party and the Director; and that for what it may be worth, there be a certificate for two counsel.  As I have not been prepared to decide the present case on any of the additional grounds advanced by the interested party in support of the application for judicial review, I am of the provisional view that the fairest order regarding the interested party’s costs is to make no order as to costs.  See generally this Court’s judgments in Hong Kong Aircrew Officers Association v The Director-General of Civil Aviation, HCAL 96/2008, 4 September 2009 and Cheng Kar-shun v Hon Li Fung-ying, HCAL 79/2009, 11 December 2009.

141.  Any application to vary the costs order nisi must be made within 14 days after this judgment is handed down.  Any such application shall be dealt with by written submissions; absent agreement, the parties concerned shall have liberty to seek the Court’s directions regarding the timetable for the lodging of submissions.

142.  I thank counsel, as well as Mr Tsoi, for their assistance.