FOK CHUN WA AND ANOTHER v. THE HOSPITAL AUTHORITY AND ANOTHER

FACV No. 10 of 2011

IN THE COURT OF FINAL APPEAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

FINAL APPEAL NO. 10 OF 2011 (CIVIL)

(ON APPEAL FROM CACV NO. 30 OF 2009)

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J U D G M E N T

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Chief Justice Ma:

A  INTRODUCTION

A.1  The Essential Complaint

1.  The second applicant is now a resident of Hong Kong, but this was not her status at the time the present judicial review proceedings commenced in 2007.  At that time, the second applicant was representative of a number of women from the Mainland bearing the following similarities: she was married to a Hong Kong resident, held a Two-Way Permit (the permit issued by the Mainland authorities enabling a Mainland resident to visit Hong Kong up to a maximum of 90 days) and was in the course of applying for a One-Way Permit (also a permit issued by the Mainland authorities whereby a Mainland resident would be permitted effectively to emigrate to Hong Kong and once here to become a Hong Kong resident, and be entitled to a Hong Kong Identity Card).  The second applicant, prior to her becoming a Hong Kong resident, had all along maintained that she had substantial connections with Hong Kong.  In the course of this litigation, the second applicant and those women who share the qualities just described, have for convenience been called the A2 Group.  I will continue to use this term to describe this group of women.

2.  The second applicant had also given birth to a child in a public hospital in Hong Kong.  The subject matter of the present proceedings is the level of fees payable by the second applicant and others in the A2 Group.  The main complaint made by them is that they have been unlawfully discriminated against in that the level of fees payable by them for obstetric services in public hospitals in Hong Kong was substantially higher than those payable by Hong Kong resident women.  The line between these two groups of women was drawn (as evidenced by the relevant three decisions which I shall identify shortly) at residence status – in short, Hong Kong residents (holding an ID card) as against non-Hong Kong residents, to which group the second applicant belonged. This, they say, breaches the right to equal treatment guaranteed under Article 25 of the Basic Law and Article 22 of the Hong Kong Bill Of Rights contained in the Hong Kong Bill Of Rights Ordinance Cap 383.  As was put in their Case lodged with this Court, the constitutional duty imposed on the respondents was to ensure equality among analogous groups of pregnant women.

3.  This is the principal issue for determination in this appeal and involves the court discharging its responsibility – and this is a constitutional duty – of subjecting government measures to the test of lawfulness by reference to fundamental rights guaranteed under the Basic Law and the Bill of Rights.  The applicants also rely on other arguments to support their submission that the level of fees chargeable to the A2 Group was unlawful.  I shall identify these other arguments in due course.

A.2  The Parties

4.  I have already introduced the second applicant.  The first applicant is her husband and he was at all material times a Hong Kong permanent resident. The second applicant is from the Mainland.  After they married, the second applicant would regularly come to Hong Kong on the strength of Two-Way Permits, returning to the Mainland briefly after the expiry of the 90 days stay allowed under that Permit (and correspondingly permitted by the Hong Kong Immigration Department), but applying almost immediately (or at least very quickly) for another Two-Way Permit.  She, like many in the A2 Group, was a regular visitor to Hong Kong but, in legal terms, only that, a visitor.  She was not a Hong Kong resident.

5.  The first applicant sues by his next friend, his father, by reason of his mental incapacity.

6.  The first respondent, the Hospital Authority, is a statutory body having the responsibility of managing and controlling public hospitals in Hong Kong. This responsibility is governed by and defined in the Hospital Authority Ordinance Cap 113.  Among its responsibilities is recommending to the Secretary for Food and Health (the second respondent in these proceedings) policies on the fees chargeable in public hospitals.  I shall in due course be referring in greater detail to the first respondent’s responsibilities when dealing with the issues raised by the applicants based on the Padfield principle (see Padfield v Minister of Agriculture, Fisheries and Food [1986] AC 997).  The applicants also relied on the Wednesbury principle (see Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223).  As will be seen, the Wednesbury ground adds nothing to the other grounds raised by the applicants.

7.  The second respondent (formerly the Secretary for Health, Welfare and Food – for convenience I will refer to both the past and present posts as the second respondent) is the government official responsible for the formulation of medical and health policies (including policies on fees chargeable in public hospitals) and the monitoring of the first respondent.

8.  It is the various decisions from 2003 to 2007 (having the effect of raising the fees for obstetric services in public hospitals for non-residents) made by the first and second respondents that have led to the present proceedings.  I now turn to these decisions, and the facts and circumstances leading up to them.

B  THE DECISIONS

B.1    The General Background

9.  Three decisions are impugned by the applicants in the present proceedings:-

(1) The classification on 1 April 2003 whereby spouses of Hong Kong residents became were classified as Non-Eligible Persons (NEPs) for the purpose of receiving subsidized obstetric services.  This included the A2 Group and resulted in higher charges payable by them for these services.  (The first Decision).

(2) The decision dated 22 August 2005 in which a package charge for obstetric services for NEPs was introduced, to take effect on 1 September 2005, thereby increasing even more the charges payable by these persons.  (The second Decision).

(3) The decision dated 22 January 2007 increasing yet again the package charge payable by NEPs, affecting persons like the second applicant and the A2 Group.  (The third Decision).

10.  In the public sphere, financial resources are limited and decisions have to be made by the Government as to how Hong Kong’s finite resources are to be utilized.  Thus, socio-economic policies have to be devised and periodically revised in order to allocate public funds to the various sectors of society requiring them: (to name a few) education, housing, welfare, infrastructure and the area which provides the background to the present case, public health. Such policies have to take into account manifold considerations and the allocation of public funds to various sectors are inter-related.  At times, a fine balancing exercise may have to be struck, always against the background of limited financial resources and long-term considerations.  If increased funds are given to one sector over others, this may have the consequence of reducing the funds available to those other sectors.  Limited resources are not confined to the question of financial resources either.  Manpower resources are also finite: there is no limitless supply of professional or skilled people.  In the area of health, for example, there is a limited supply of doctors, nurses, midwives and other medical helpers.  All these factors are legitimate factors to be taken into account in devising socio-economic policies.

11.  The medical services available to what are now known as Eligible Persons (formerly called Entitled Persons) (EPs) in Hong Kong are heavily subsidized by public funds.  The evidence before the court indicated a subsidy in the region of 95%.  These services included the provision of obstetric services to EPs.

12.  Prior to the establishment of the first respondent in 1990 under the Hospital Authority Ordinance, public hospitals in Hong Kong were managed by the Government.  Subsidized health services were made available to EPs and the categories of EPs were gazetted.  These included: holders of Hong Kong ID cards, their children under the age of 11, UK citizens and other persons approved by the Director of Hospital Services or the Director of Health.  Spouses of Hong Kong ID holders were included in the list of eligible persons entitled to subsidized health services.

13.  After the first respondent was set up, these categories of EPs remained, except that the last category was to be approved by the Director of Operations of the first respondent.  Spouses of Hong Kong ID holders continued to be included in the list of approved persons entitled to subsidized health services.  This was the position until the first Decision.

B.2  The First Decision 2003

14.  In his inaugural speech on 1 July 2002, the Chief Executive at the time stated:-

“There is an urgent need for development of a comprehensive population policy, and we will work on this within this year. This population policy will be designed to fit Hong Kong’s long-term social and economic development, will complement family requirements, and will address the interests of different sectors in our community.”

15.  A Task Force on Population Policy was then set up under the responsibility of the Chief Secretary for Administration.  A Report was issued by the Task Force in February 2003 in which its stated objective was to devise a population policy and to recommend policy initiatives for the Administration to consider for the short and medium terms.  One of the issues examined by the Task Force was eligibility for public benefits and within this, eligibility for public healthcare.

16.  In dealing with the aspect of public benefits, the Report stated (in para 5.56) the need to “strike a very fine balance” between different sectors of society and giving “due regard to the long-term sustainability of our social services within limited financial resources”.  That paragraph then referred to the fact that CSSA (Comprehensive Social Security Assistance), and public health and hospital services accounted for 21% of the Government’s total public expenditure for 2001/2002.  Earlier in the Report, reference was made to the need to have a rational basis on which Hong Kong’s social resources were to be allocated, in particular seen against “our current austere fiscal situation when available resources are increasingly limited and demand is continually rising”.

17.  While the Report recommended that eventually, eligibility for social benefits ought to be based on a seven year residence requirement, nevertheless account had to be taken of the immediate impact on a large number of people that would be caused by a change in policy.  Accordingly, as far as public health and hospital benefits were concerned, it was recommended (in para 5.58) that any new arrangements should initially exclude Two-Way Permit holders and other visitors to Hong Kong.  These classes of persons were held out as being distinct from residents of Hong Kong, One-Way Permit holders and migrant workers.

18.  Before leaving the Report, I should just draw attention to the reference therein to population flow and the growing influx of Mainland arrivals at the time.  It was stated that between 1983 and 2001, a total of 720,000 Mainland people were admitted into Hong Kong under the One-Way Permit scheme, this accounting for 11% of the population of 6.72 million in 2001.  From 1997 to 2001, new arrivals from the Mainland under the scheme made up 93% of the population growth.  Many of these persons included children of Hong Kong residents having the right of abode in Hong Kong and also spouses from the Mainland who were married to Hong Kong ID card holders.  The Report expressed sympathy for this latter group and recommended the encouragement of these spouses to visit Hong Kong under the Two-Way Permit scheme as soon as they had applied for a One-Way Permit to enable them to “familiarize themselves with Hong Kong’s way of life and the living conditions of their Hong Kong families, thus helping them decide whether they wish to settle in Hong Kong”.  This group of Mainland spouses would obviously include (and probably comprise to a significant extent) the A2 Group.  However, the Report also made the point, in relation to CSSA, that proportionately more resources were allocated to the new Mainland arrivals than the rest of the population.  In para 3.24, it was stated, “In formulating a population policy for the HKSAR, we need to take the opportunity to consider critically the privileges of Hong Kong’s residents in terms of their eligibility for subsidized services”.  In the second affidavit of Mr Nip Tak Kuen (the Deputy Secretary for Food and Health) on behalf of the second respondent, he stated that it was a “well established principle under the population policy that these heavily subsidized services [such as the public healthcare system] should not be diverted to non-residents and visitors at the expense of local residents”.  The Court of Appeal criticized this phraseology (para 88 of its Judgment) but, while it could have been better and more sensitively expressed, the deponent was here merely dealing with principles of population policy.

19.  Following the recommendation made by the Task Force regarding public health and hospital benefits (see para 17 above), the second respondent distributed a memorandum dated 28 February 2003 in which it was stated that as from 1 April 2003, non-Hong Kong residents, including the spouses of Hong Kong residents, would be charged the same rate as NEPs.  In other words, as from that date, spouses of Hong Kong residents would become NEPs so far as subsidized health and hospital services were concerned.

20.  On 28 March 2003, revised charges for hospital services provided by the first respondent were gazetted to take effect as from 1 April 2003.  From that date, NEPs were to be charged $3,300 a day for inpatient services, including obstetric services, in the public wards of public hospitals.  This is the First Decision whereby members of the A2 Group were classified as NEPs and therefore no longer entitled to subsidized health services.  The figure of $3,300 was based on a simple arithmetical calculation of the cost of inpatient services divided by the number of beds.  It made no distinction between different types of medical services.

21.  To complete the background in relation to the First Decision, I refer to the Appendix annexed to this Judgment.  This Appendix consists of two statistical tables (which were exhibited to the 3rd affirmation of Dr Cheung Wai Lun, the Director (Cluster Services) of the first respondent.)  These tables provide statistical information on :-

(1) The number of births in Hong Kong between 2002 and 2007.

(2) The number of such births by EPs and NEPs.

(3) Within the group of NEPs, the number of births by Mainland women married to Hong Kong permanent residents.

(4) The number of births where NEPs had been admitted into the Accident and Emergency Department of public hospitals.  As we shall see, this was a problem that needed to be tackled and is relevant to the Second and Third Decisions.

22.  Insofar as relevant to the First Decision, it can be seen that in 2002, the vast majority of NEP births were by Mainland women (8,506), of which a significant percentage were women who were married  to a Hong Kong permanent resident (85.3%).  Thus, it can be inferred that a significant proportion of the births in Hong Kong related to the A2 Group.

B.3    The Second Decision 2005

23.  As the Appendix shows, the number of Mainland women giving birth in Hong Kong (and within this class the majority being women who were married to Hong Kong permanent residents) began to climb in the years from 2003 to 2005.  This was despite the increased charges introduced under the First Decision.

24.  In addition, there was a noticeable trend (and this can be seen in the figures for 2004 and 2005) in the number of births among NEPs which took place in the Accident and Emergency wards of hospitals.

25.  These two aspects were continually highlighted by the Administration throughout 2004 and 2005.  In a  Paper prepared by the Health, Welfare and Food Bureau for a meeting of the Legislative Council Panel on Health Services on 15 December 2004, the following points were made by the Government:-

(1) The same point as that referred to in para 18 above was made, namely that in relation to heavily subsidized public services such as public medical services, a distinction had to be made between Hong Kong residents and non-residents.

(2) In the months leading up to December 2004, there had been a significant increase in non-Hong Kong residents accessing public medical services, particularly those from the Mainland.  Of the NEPs, 95% were from the Mainland, of which the majority were female, with over half of these women requiring obstetric services.

(3) It was also noted that there was an increasing trend of Mainland women, whose husbands were not Hong Kong Identity card holders, giving birth. However, it is clear (as the Tables in the Appendix show) the majority of Mainland women giving birth in Hong Kong were married to Hong Kong residents.

(4) A serious problem that was highlighted was the increase in NEPs giving birth in public hospitals who had not received any antenatal care in Hong Kong or who would discharge themselves soon after giving birth.   This gave rise to potential health problems for both mother and child.  The reason for this behavior was presumably economic (meaning that it was cheaper not to remain in a Hong Kong hospital for any longer than necessary).

(5) A number of possible measures were canvassed in the Paper.  Among them was to increase medical fees to beyond cost recovery, approximating to or even higher than the private sector, in order to encourage NEPs to make use of private hospitals, and in turn discouraging use of public hospitals.  Minimum charges were also considered in order to discourage premature discharge against medical advice.

(6) Another possible measure was one in which the applicants placed great emphasis to support their case.  In view of the importance the applicants place on this measure, I set it out in full from the Paper : -

“Stop providing non-emergency medical services to NEPs who are not (i) the spouses or (ii) children under 18 years of age of holders of HKID Card? We propose to make a distinction between NEPs who are

(i) spouses; or

(ii) children under 18 years of age

of holders of HKID Card and others who do not belong to this group because most of them are eligible for One-way Permits to settle in Hong Kong and would become Hong Kong residents in the near future. It is in the community’s overall and long-term interest to provide medical services to the former group, otherwise the healthcare expenditure on them could be even larger when they become Hong Kong residents with poor health. Furthermore, visiting spouses from the Mainland are able to stay in Hong Kong virtually year-round on the strength of the multiple visit endorsement while they are waiting for their turn for One-way Permits. Providing medical services to those who would like to receive such services in Hong Kong would cause less distress to their family members resident in Hong Kong, e.g. the father in the family would not be required to stay at home to look after the children whenever the mother has to return to the Mainland to seek medical treatment, hence is in a better position to join the workforce. However, for NEPs without any such close connection in Hong Kong, we doubt if there is any strong reason for public medical services to be provided to them even if a profit can be made from such services, bearing in mind that?

· more patients would mean a dilution of attention doctors, nurses and other healthcare workers can devote to each patient;

· Hong Kong has a strong private medical sector which are ready to offer medical services to them; and

· few jurisdictions elsewhere in the world would provide such non-emergency services to visitors.”

26.  At an Administration and Operational Meeting of the first respondent on 21 April 2005, the following point was discussed in relation to NEPs.  It appeared that many NEPs were presenting themselves at the Accident and Emergency Department of public hospitals just after midnight to give birth and then discharging themselves (against medical advice) within 24 hours in order to save on fees.  The following problems were identified as a result of this dangerous behaviour:-

(1) It was dangerous in that the health of both mother and baby was put at risk through the lack of medical observation and intervention both before and after birth.

(2) Such late admissions increased the workload of hospital, in particular, nightshift staff.

(3) The existing fee of $3,300 a day for inpatient medical services was insufficient to cover the cost of obstetric services.  These costs were at their highest in the first two days of hospitalization.

27.  It was therefore proposed that a minimum obstetric package of $20,000 be introduced to deal with these problems.  The package would cover the cost of delivery and three days (two nights) of the stay in hospital.  Any additional period of stay would be charged at $3,300 a day.  By proposing this package, it was hoped that the dangerous behavior of NEPs would be curbed and that they would be deterred from using public hospitals by reason of their being cheaper than private hospitals.  It was also hoped that the charge would cover the actual costs of hospitalization, in particular the costs of the first few days, and would also help cover the higher costs of looking after NEPs who did not have proper or adequate antenatal care.

28.  This proposal was endorsed by the Board of the first respondent and a letter was submitted to the second respondent on 26 April 2005 seeking approval.

29.  These matters (as well as the points made in the December 2004 Paper) were repeated in a Paper prepared by the Health, Welfare and Food Bureau and the first respondent for the meeting of the Legislative Council Panel on Health Services on 17 May 2005.  At the meeting, members were recorded as supporting the introduction of the proposed package.  The only doubt expressed by Panel members was whether the package would in fact reduce the number of NEP mothers giving birth in public hospitals.

30.  The new obstetric package (as described in para 27 above) was gazetted on 22 August 2005, to take effect on 1 September 2005.  This was the Second Decision.

B.4  The Third Decision 2007

31.  The introduction of the obstetric services package in September 2005 initially had the desired result of discouraging NEP mothers from giving birth in Hong Kong public hospitals.  In the first eleven months of 2006, there was a decrease of 15.1% in the number of NEP women giving birth, but the figure began to rise again as from about October 2006.  Not only that, there was also a corresponding increase in the number of admissions through the Accident and Emergency Department of hospitals.  In short, the number of NEP mothers and instances of what I have called dangerous behavior (see para 26 above) was on the increase again.

32.  This increase coincided with an increase in demand from EP mothers.  All this in turn caused considerable pressure to be placed on the obstetric neonatal services in public hospitals and their staff.  This raised public concern.  On 19.11.2006, a group of 60 local mothers organized a street protest to complain about being crowded out by the presence of NEP mothers in public hospitals.

33.  This led to the first respondent and the Health, Welfare and Food Bureau being tasked in December 2006 to find a solution to these problems.  At an Administration and Operational Meeting of the Board of the first respondent on 21 December 2006, a number of measures were proposed, with the stated objective of ensuring that priority would be given to EP mothers.  These measures included:-

(1) Implementing a centralized booking system for antenatal and obstetric services, so that prior bookings could be made and under which EPs would be given priority over NEPs.  It was felt that such a system would also enable the first respondent to gather the necessary information in order better to assess the various needs for obstetric services.

(2) Increasing the obstetric package from the minimum of $20,000 to a minimum non-refundable sum of $39,000 where a prior booking had been made.  Where no prior booking had been made, the sum would be $48,000.  It was felt that the $20,000 obstetric package charge was still low compared with the charges for similar services levied by private hospitals.  The new charges were calculated by reference to the charges made by private hospitals so as further to remove the attraction of giving birth in public hospitals by reason of the lower charges.

34.  The justification for these measures was to deal with the problems identified in paras 31 and 32 above.  They were endorsed by the Board of the first respondent at the meeting and a letter was accordingly sent to the second respondent on 5 January 2007 seeking approval.

35.  A Paper was prepared by the Health, Welfare and Food Bureau and the first respondent for the meeting of the Legislative Council Panel on Health Services on 8 January 2007.  The increasing trend of births by NEPs in public hospitals, the consequent pressure on obstetric services (including the tight manpower situation among midwives and neonatal intensive care nurses), the dangerous behavior of NEPs and the other points referred to earlier were all detailed in this Paper.   The policy was stated in para 10 of the Paper, “As public hospital system is established primarily for the benefit of Hong Kong residents, the Government and the Hospital Authority are committed to ensuring that local expectant mothers would have priority in the use of obstetric services in public hospitals”.  The increase in the obstetric services package was stated “To remove the financial incentive for mainland women from accessing hospital services”.

36.  The Legislative Council Panel on Health Services met on 8 January 2007.  There was no objection in principle to these proposals.

37.  The revisions to the obstetric package resulting in the increased charges were gazetted on 22 January 2007.  This was the Third Decision.

B.5  The Effect of The Decisions

38.  From the above, it can clearly be seen that in arriving at the three Decisions and their policy on the level of fees chargeable for obstetric services in public hospitals, the respondents drew the line at residence status (as evidenced by possession of a Hong Kong ID card): this was the critical difference between EPs and NEPs so far as subsidized obstetric services were concerned.

C  THE ISSUES IN THIS APPEAL

39.  As stated earlier, the applicants’ essential complaint is that the A2 Group (this was the second applicant’s status at the commencement of the present proceedings) have not been treated on an equal basis with EPs so far as the three Decisions were concerned.  In short, the A2 Group were treated as NEPs when they ought to have been treated in the same way as EPs.  This, it is submitted by the applicants, breaches the right to equal treatment guaranteed under the Basic Law and the Bill of Rights.  Drawing the line merely at residence status without regard to the similarities between women in the A2 Group and EPs, was unconstitutional.

40.  Factually, the applicants rely on the similarities they share with a Hong Kong resident family.  Much reliance was placed on the summary of these similarities contained in the judgment of Stock VP in the Court of Appeal:-

“The second applicant, as well as any woman in the EP group, bore children of Hong Kong resident fathers, children who upon birth would become Hong Kong residents themselves, where the woman and child were part of a family unit whose centre of life was Hong Kong and where each woman had a substantial de facto residential connection with Hong Kong.”

41.  Reliance was also placed on the alternative solution articulated in the Paper prepared for the Legislative Council Panel on Health Services meeting on 13 December 2004 (see para 25(6) above).

42.  In addition, Mr Denis Chang SC (who represented the applicants) placed great emphasis on the views of the members of the Legislative Council Panel on Health Services at the meeting on 16 April 2007, in which considerable sympathy was expressed for women in the A2 Group.  That meeting resulted in the following motion being passed (as translated):-

“That this Panel expresses regret that the new obstetric package charge ($39,000/$48,000) implemented by the Health, Welfare and Food Bureau and the Hospital Authority in early February this year for Mainland women giving birth in public hospitals has failed to take into account its impact on Hong Kong families (i.e. father being a Hong Kong resident and mother a Two-way Permit holder), and urges the Government to exempt these families from the new fee charging policy.”

43.  To reinforce the argument based on discrimination, Mr Chang invited us to draw a distinction between the A2 Group and other NEPs (he referred to the women in this group who wished to give birth in Hong Kong as “transient mothers”). It was clear, he submitted, that the former had close connections with Hong Kong, unlike the latter group who had little or no connection with Hong Kong. This was a distinction that the respondents (it is argued) had failed to draw. As Mr Chang put it, the A2 Group women were simply “lumped together” with other NEP women.

44.  The main issue for determination by both courts below was the question of equality and this remains the main issue for this Court to examine.

45.  I have at the outset mentioned the applicants’ reliance on the Padfield and Wednesbury principles.  Save perhaps for one aspect, the arguments deployed in support of the applicants’ case here were exactly the same as those submissions advanced in support of the equality issue.  For example, it is said in relation to the Wednesbury argument that the constitutional duty imposed on the respondents was to “ensure equality among analogous groups of pregnant women” (meaning pregnant women in the A2 Group and pregnant women who were EPs).

46.  The additional argument deployed in relation particularly to the Padfield argument, relied on s 4(d) of the Hospital Authority Ordinance.  This can be put in the following way: in discharging their responsibilities, the respondents had to bear in mind and also promote the policy and objects of the Hospital Authority Ordinance, and this included in particular the affordability principle contained in s4(d) of the Ordinances.

47.  Section 4(d) of the Hospital Authority Ordinance states:-

“4 Functions of the Authority

The Authority shall -

(d)  …..recommend to the Secretary for Food and Health, for the purposes of section 18, appropriate policies on fees for the use of hospital services by the public having regard to the principle that no person should be prevented, through lack of means, from obtaining adequate medical treatment.”

48.  The applicants’ case proceeds along the lines that in arriving at the three Decisions, the respondents have not taken s 4(d) into account either sufficiently or at all.  In particular, the third Decision resulted in such an increase in charges that the respondents could not have taken into account the affordability aspect stipulated in s 4(d).  It was submitted that the rise in the charges for the obstetric services following the Third Decision exceeded the actual cost of those services. 

49.  The Padfield point based on s 4(d) of the Hospital Authority Ordinance becomes therefore a subsidiary point that will have to be determined in this appeal.  There are no separate substantive arguments based on the Wednesbury ground.

D  THE CERTIFIED QUESTIONS

50.  On 25 August 2011, the Appeal Committee granted leave to appeal to this Court on four questions of great, general or public importance:-

“A. Whether the blacket exclusion from eligibility to subsidized obstetric services in Hong Kong public hospitals of spouses of Hong Kong permanent residents who are themselves not holders of HKID Cards is unconstitutional as being unfairly discriminatory or otherwise contrary to the Basic Law and the Hong Kong Bill of Rights Ordinance, at least where such exclusion is based solely on the spouses’ said immigration status and notwithstanding that they are holders of two-way permits and are awaiting the grant of one-way permits and who are in the meantime residing for the greater part of the time in Hong Kong (hereinafter called “the A2 Group”):

B. Whether the relevant Decisions of the 1^st Respondent, and the relevant directions of the 2^nd Respondent and/or the underlying policy are unconstitutional or otherwise contrary to the Basic Law and the Hong Kong Bill of Rights Ordinance to the extent they mandated or required differential treatment of A2 Group from Hong Kong residents and unfairly lumped the A2 Group with other groups of non-HKID Card Holders;

C. Further and/or alternatively whether insofar as the Decision of the 22 January 2007 and/or the underlying policy increased the pre-packaged obstetrics fees to a level way above cost recovery the same is unfairly discriminatory and unconstitutional or alternatively contrary to the affordability principle in s 4 of the Hospital Authority Ordinance; and

D. Whether such Decisions, directions and/or the underlying policy sought to be impugned by the Applicants by way of judicial review are in any event contrary to or made without due regard to the said affordability principle and/or all relevant considerations, are Wednesbury unreasonable, or otherwise contrary to the Padfiled principle having regard to the objects and purposes of the Hospital Authority Ordinance and/or the functions, powers and duties thereunder of the relevant officials and decision-makers.”

51.  The first and second questions relate to the main issue of equality. The two remaining questions relate to the Padfield point as I have set out above.  (As I have stated earlier, there is no separate argument in relation to the Wednesbury objection).

E  EQUALITY

E.1  The Legal Approach

52.  I have earlier referred to the relevant equality provisions contained in Article 25 of the Basic law and Article 22 of the Bill of Rights:-

(1) Article 25 of the Basic Law

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

(2) Article 22 of the Bill of Rights

“Equality before and equal protection of law

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

53.  A small point arises at once in relation to Article 25 of the Basic Law in that the reference therein is to “Hong Kong residents”.  The first applicant (and others in the A2 Group) were not at the commencement of the present proceedings Hong Kong residents.  The first applicant was at that time a visitor to Hong Kong and, as described in the applicants’ Form 86, a resident of the Mainland. This is not a point of any great significance, however, given the reliance on Article 22 of the Bill of Rights.  The constitutional right to equality of treatment is accordingly engaged for determination.

54.  The starting point on the legal approach to questions regarding equality is the decision of this Court in Secretary for Justice v Yau Yuk Lung (2007) 10 HKCFAR 335.  In that case, the Court dealt with the issue of equality in relation to the offence of buggery in public between men.  The issue was whether the constitutional right to equality was violated in circumstances where there was different treatment as between homosexuals and heterosexuals.  The difference was therefore based on sexual orientation.  The Court concluded that the right was breached.

55.  Chief Justice Li, with whose judgment all members of the Court agreed, stated the essence of the right to equality in the following way (at 344E-G (paras 1-2)):-

“1. Equality before the law is a fundamental human right (the right to equality). Equality is the antithesis of discrimination. The constitutional right to equality is in essence the right not to be discriminated against. It guarantees protection from discrimination. The right to equality is enshrined in numerous international human rights instruments and is widely embodied in the constitutions of jurisdictions around the world. It is constitutionally protected in Hong Kong.

2. Discriminatory law is unfair and violates the human dignity of those discriminated against. It is demeaning for them and generates ill-will and a sense of grievance on their part. It breeds tension and discord in society.”

56.  In what are now well-known passages dealing with the approach of the courts when considering the constitutional right of equality, the Chief Justice said this at 348H-349H (paras 19-22):-

“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 that 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).

22.       In requiring differential treatment to be justified, the view has been expressed that the difference in treatment in question is an infringement of the constitutional right to equality but that the infringement may be constitutionally justified. See the Court of Appeal’s judgment in the present case at p.208B-C (Ma CJHC) in Leung v Secretary for Justice [2006] 4 HKLRD 211 at p.234G-H. This approach is not appropriate. Where the difference in treatment satisfies the justification test, the correct approach is to regard the difference in treatment as not constituting discrimination and not infringing the constitutional right to equality.  Unlike some other constitutional rights, such as the right of peaceful assembly, it is not a question of infringement of the right which may be constitutionally justified.”

57.  Both Poon J and the Court of Appeal regarded this passage as specifying a two-stage test essentially as follows:-

(1) The first stage is at the outset to identify the comparators: in every challenge based on equality, the person complaining is comparing his position with someone who is said to be in a comparable position.  The question is asked: are these persons in comparable positions?

(2) The concept of persons in comparable positions has been variably described: for example in Wandsworth London Borough Council v Michalak [2003] 1 WLR 617, at 625 (para 20), Brooke LJ referred to persons in “analogous situations”.

(3) The second stage assumes that the first stage is passed; in other words, the Court regards the comparators as being in comparable or analogous positions.  In this second stage, the differences in treatment between the comparators have to be justified using what was described in Yau Yuk Lung as the justification test.  This test has three facets.

58.  While perhaps in some cases, this two-stage approach can neatly be applied, it is important that it should not be regarded as if it were a statute and treated as such.  A step by step approach is useful as far as it goes but it must not give rise to complicated and long-drawn out (but ultimately unproductive) arguments as to whether this step or that step has been overcome.  Such arguments will often obscure the real issues in a case.  This should be borne in mind when dealing with issues of equality where the two-stage approach is useful but must not give rise to complex and unnecessary arguments.  I have been guided here by the remarks of Lord Walker of Gestingthorpe in his speech in R (Carson) v Secretary of State for Works and Pensions 2006 1 AC 173, at 194B-F (para 63).  For my part,  I have no objection in adopting the two-stage approach set out in Yau Yuk Lung as long as one firmly bears in mind the following points:-

(1) The object of the exercise (when considering issues of equality) is ultimately to ask a simple question and here, I would respectively adopt the way in which this was put by Lord Hoffmann in Carson in 186H (para 31), “is there enough of a relevant difference between X and Y [the comparators] to justify differential treatment?” 

(2) In the majority of cases where equality issues are involved, it will be necessary for the Court to look at the materials which go to the three facets of the justification test before this crucial question is answered.  It will be rare case, I daresay, where the court will comfortably be able to answer this question without any recourse to the issue of justification at all.  Seen in this way, it may matter not at all whether the court’s approach is seen as a two-stage one or not.

(3) Here, I associate myself with the approach of Lord Nicholls of Birkenhead in Carson in 179C-E (para 3):-

“3. For my part, in company with all your Lordships, I prefer to keep formulation of the relevant issues in these cases as simple and non-technical as possible. Article 14 [of the European Convention on Human Rights – the equipment of Article 22 of the Bill of Rights] does not apply unless the alleged discrimination is in connection with a Convention right and on a ground stated in article 14. If this prerequisite is satisfied, the essential question for the court is whether the alleged discrimination, that is, the difference in treatment of which complaint is made, can withstand scrutiny. Sometimes the answer to this question will be plain. There may be such an obvious, relevant difference between the claimant and those with whom he seeks to compare himself that their situations cannot be regarded as analogous. Sometimes, where the position is not so clear, a different approach is called for. Then the court’s scrutiny may best be directed at considering whether the differentiation has a legitimate aim and whether the means chosen to achieve the aim is appropriate and not disproportionate in its adverse impact.”

59.  This approach, which I believe to be a principled one, recognizes that in most questions involving the right to equality, there will be an overlap in the application of the two-stage test set out in Yau Yuk Lung.

60.  In the present case, it will be necessary to examine the evidence submitted by the respondents (for it is they who have the burden of justifying) in order to determine the issue of equality.

61.  The application of the three facets of the justification test will generally pose few problems for the court.  It is however important in this exercise to bear firmly in mind the relevance of what is known as the aspect of the margin of appreciation, particularly in circumstances where the court is asked to examine issues involving socio-economic policy.

62.  The concept of margin of appreciation, or deference (as it is sometimes referred to), derives from the jurisprudence of the European Court of Human Rights.  The modern statement of this concept as it applies to national courts examining the constitutionality of legislation or of executive acts, finds it roots in the speech of Lord Hope of Craighead in R v Director of Public Prosecutions ex p Kebilene [2000] 2 AC 326, at 380H-381D:-

“… But in the hands of the national courts also the Convention should be seen as an expression of fundamental principles rather than as a set of mere rules. The questions which the courts will have to decide in the application of these principles will involve questions of balance between competing interests and issues of proportionality.

In this area difficult choices may have to be made by the executive or the legislature between the rights of the individual and the needs of society. In some circumstances it will be appropriate for the courts to recognise that there is an area of judgment within which the judiciary will defer, on democratic grounds, to the considered opinion of the elected body or person whose act or decision is said to be incompatible with the Convention. This point is well made at p.74 para 3.21 of Human Rights Law and Practice (1999), of which Lord Lester of Herne Hill and Mr Pannick are the general editors, where the area in which these choices may arise is conveniently and appropriately described as the “discretionary area of judgment.” It will be easier for such an area of judgment to be recognised where the Convention itself requires a balance to be struck, much less so where the right is stated in terms which are unqualified. It will be easier for it to be recognised where the issues involve questions of social or economic policy, much less so where the rights are of high constitutional importance or are of a kind where the courts are especially well placed to assess the need for protection.”

63.  This concept or principle has been applied in Hong Kong:  where the constitutionality of legislation has been in issue (Lau Cheong v HKSAR (2002) 5 HKCFAR 415, at 448B-449F (paras 102-105) where reference was made to the courts giving “particular weight to the views and policies adopted by the legislature”; HKSAR v Lam Kwong Wai (2006) 9 HKCFAR 574, at 601D-I (para 45); Mok Charles v Tam Wai Ho (2010) 13 HKCFAR 762, at 786-7 (paras 54-56) where it was said that it was sometimes helpful, particularly in the context of the public interest, “to have regard and pay due respect to the views of the legislature”); or where the decisions of a professional governing body have been challenged (Kwok Hay Kwong v Medical Council of Hong Kong [2008] 3 HKLRD 524, at 536-539 (paras 22-25).

64.  The use of the expressions margin of appreciation or deference have sometimes met with criticism:- see for example Mok Charles  v Tam Wai Ho at 792 (para 78) per Bokhary PJ.  But, in the final analysis, these expressions are really used for convenience only in order to convey the principle expressed in Ex p Kebilene.  The principle reflects the different constitutional roles of the judiciary on the one hand, and the executive and legislature on the other.  The role of the judiciary was succinctly (but accurately) described by Lord Hobhouse of Woodborough in Wilson v First County Trust Limited (No 2) 816, at 861 (para 131): “The judiciary is the part of government which has the responsibility for applying the law”.  Where matters of state or community policy are concerned, these are matters predominantly for the Executive or the Legislature.

65.  A clear example of state or community policy are the socio-economic policies of a government.  Here, it is the responsibility of the executive to devise and implement such policies.  Article 48(4) of the Basic Law states that the Chief Executive has the responsibility of deciding on government policies (assisted of course by the Executive Council – Article 54).  Article 62 of the Basic Law places the duty on the Government to formulate and implement policies (sub-para (1)) and to formulate budgets and final accounts (sub-para (4)).  In discharging its responsibilities, the Executive will of course take into consideration many different factors and interests – no doubt these factors and interests often pulling in different directions – to arrive at the chosen policy.  In the context of healthcare and the setting of fees chargeable in public hospitals, the Hospital Authority Ordinance contains relevant provisions that place the obligation on the respondents to recommend and devise appropriate policies.  See for example: ss 4, 5 and 18 of the Ordinance.  I have already set out s 4(d) of that Ordinance (see para 47 above).  So far as the Legislature is concerned, the policy consideration was put in this way by Chief Justice Li (in the context of legislation regarding serious crime, namely murder) in Lau Cheong at 449C (para 105), “the legislature has to make a difficult collective judgment taking into account the rights of individuals as well as the interests of society”.

66.  Accordingly, it would not usually be within the province of the courts to adjudicate on the merits or demerits of government socio-economic policies. That said, where appropriate (and this will be elaborated on below) the court will intervene, this being a part of its responsibility to ensure that any measure or policy is lawful and constitutional.  This has been the consistent position of the courts.

67.  In International Transport Roth GmbH v Secretary of State for the Home Department [2003] QB 728, at 767B-E, Laws LJ referred to decisions in the area of macro-economic policy as being relatively remote from judicial control (this owing to the subject matter being within the province of the authorities or legislature rather than the courts).

68.  In Wilson v First County Trust Ltd (No 2), Lord Nicholls of Birkenhead captured the essence of the point in the following passage at 844E-G (para 70):-

“70. In approaching this issue, as noted in R v Johnstone [2003] 1 WLR 1736, 1750, para 51, courts should have in mind that theirs is a reviewing role. Parliament is charged with the primary responsibility for deciding whether the means chosen to deal with a social problem are both necessary and appropriate. Assessment of the advantages and disadvantages of the various legislative alternatives is primarily a matter for Parliament. The possible existence of alternative solutions does not in itself render the contested legislation unjustified; see the Rent Act case of Mellacher v Austria(1989) 12 EHRR 391, 411, para 53. The court will reach a different conclusion from the legislature only when it is apparent that the legislature has attached insufficient importance to a person’s Convention right. The readiness of a court to depart from the views of the legislature depends upon the circumstances, one of which is the subject matter of the legislation. The more the legislation concerns matters of broad social policy, the less ready will be a court to intervene.”

69.  In Carson (in the Court of Appeal [2003] 3 All ER 577) at 608c-d (para [73]), Laws LJ (in a passage approved by Lord Walker of Gestingthorpe in the House of Lords: see [2006] 1AC 173 at 198H-199C (para 78)) said:-

“In the field of what may be called macro-economic policy, certainly including the distribution of public funds upon retirement pensions, the decision-making power of the elected arms of government is all but at its greatest, and the constraining role of the courts, absent a florid violation by government of established legal principles, is correspondingly modest. I conceive this approach to be wholly in line with our responsibilities under the Human Rights Act 1998. In general terms I think it reflects a recurrent theme of the Strasbourg jurisprudence, the search for a fair balance between the demands of the general interest of the community and the protection of individual rights: see Sporrong v Sweden (1982) 5 EHRR 35.”

70.  This last passage highlights the particular facet of socio-economic policy that is relevant to the present case, namely, the distribution of public funds.  I have earlier in this judgment referred to allocation of public funds in Hong Kong and “limited financial resources”: see paras 10 and 16 above.  In the area of healthcare, where resources are also limited and the demands from many different interests heavy, the courts are not equipped (nor is it their role) to make the “difficult and agonizing judgments” (in the words of Sir Thomas Bingham MR in R v Cambridge Health Authority ex parte B [1995] 1 WLR 898, at 906E-F) that have to be made allocating funds to one sector or another.  As the European Court of Human Rights emphasized in Sentges v The Netherlands, unrep, 8 July 2003, “this margin of appreciation  is even wider when, as in the present case, the issues involved an assessment of the priorities in the context of the allocation of limited State resources”.  That case involved the decision of a health insurance fund authority in The Netherlands rejecting a request from the applicant for the provision of a robotic limb.  The applicant’s complaint was that there had been a breach of Article 8 of the European Convention on Human Rights (the right to respect for private and family life) in that his right to a private life was adversely affected by his dependence on others on account of his disability.

71.  In this area where limited public funds are involved, the courts have recognized that lines have had to be drawn by the executive or the legislature.  On the whole, save where the line has been drawn in contravention of core values (this will be further discussed below) or where it is shown to be manifestly without reasonable foundation, the courts have left it to the authorities to identify the relevant line to be drawn: see R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [2008] 1AC 1312, at 1348C-D (para 33) where Lord Bingham of Cornhill made the point that it was for the Legislature to decide where the line had to be drawn, even if it meant that hard cases would arise when persons would fall within the wrong side of the line; Mathews v Diaz (1976) 426 US 67, at 83-84 (a decision of the US Supreme Court).

72.  In the area of qualification for social benefits or social welfare, the courts have consistently upheld legislation or acts which have drawn the line at residence status: see for example Mathews v Diaz at 78-80, 83, 85; R (Westminster City Council) v National Asylum Support Service [2002] 1 WLR 2956, at 2962D-F (paras 19-20): Carson at 183C-E (para 18).  The point I would make is that where governments have at their disposal only finite resources with which to devise an economic or social strategy, they should be left to decide (1) whether to have any social or welfare scheme in the first place, (2) the extent of such a scheme and (3) where such a scheme is devised, to choose who is to benefit under it.

73.  I am also of the view that when a line is drawn between those who are entitled to a benefit and those who are not, the court can legitimately take into account the clarity of the line and the administrative convenience of the implementing the policy or scheme thereunder.  Naturally, this factor must be weighed against other factors, but where, for instance, the line is drawn so vaguely or ambiguously that the underlying policy or scheme may effectively be undermined, if not frustrated, this is a factor that can be considered by the courts.  In Carson, Lord Hoffmann in 188E referred to “ the need for legal certainty and a workable rule”, and Lord Walker of Gestingthorpe (at 202D-E (para 91)) referred to demarcation lines having to be “reasonably bright lines”.  Drawing the line at resident status is a clear line and also convenient to administer.

74.  In this context of socio-economic policies, there may be open to the authorities a number of solutions to any perceived problem.  In the present case, for example, as we have seen, the Government considered a number of options to deal with the problems of Mainland women giving birth in Hong Kong public hospitals: see for example paras 25(5) and (6) above.  In such situations, the approach of the court will not be to try to find a better solution or alternative itself.  That is really not the role of the court at all.  As Lord Nicholls of Birkenhead said in Wilson v First County Trust Ltd (No. 2) at 844E-F (I have provided a fuller passage in para 68 above), “Assessment of the advantages and disadvantages of the various legislative alternatives is primarily a matter for Parliament.  The possible existence of alternative solutions does not in itself render the contested legislation unjustified”. Reference was made to the decision of the European Court of Human Rights in Mellacher v Austria (1989) 12 EHRR 391, at 411 (par 53).

75.  Where a number of alternative solutions are open to the executive, legislature or other authority in dealing with any particular problem, how far must the court go in inquiring as to the alternative that is least intrusive into the constitutional protected right in question?  This is a question that particularly arises when one is dealing with the third limb of the justification test, that is, the requirement that any difference in treatment must be “no more than necessary” to accomplish the legitimate aim.  This question at one stage caused me some concern, for this third limb seemed at first blush to require the court, even in a socio-economic policy context, to embark on an exercise of searching for the best alternative among different alternative solutions.  On reflection, this concern is unfounded.  In the socio-economic context, where policy considerations are best left to the executive, legislative and other authority, the position is as follows:-

(1) While the third limb of the justification test does on occasion call for a comparison between the different options that may be available, the purpose of the exercise must be borne in mind: it is to see whether the relevant act or decision satisfies the justification test.  The justification test is similar in nature to the test for proportionality: see Yau Yuk Lung at 349D-E (para 20) (para 56 above).  To ask whether a difference in treatment is justified is the same as asking whether what has been done (or omitted to be done) or decided is a proportionate response to the legitimate aim.

(2) The recognition of the respective roles of the judiciary, the executive and the legislature (or, to use the term, margin of appreciation) is relevant at all three stages of the justification test.

(3) Where a number of alternative, but reasonable, solutions to a problem exist, the court will not put itself in a place of the executive or legislature or other authority to decide which is the best option.  That is not its role. The court will only interfere where the option chosen is clearly beyond the spectrum of reasonable options; in other words, the option has clearly gone too far (or further than necessary) to deal with the problem.  In this situation, the court will not have been satisfied under the third limb of the justification test.

(4) This view is supported by authority.  In Robert Libman Equality Party v. The Attorney General of Quebec 1997 3 RCS 569, the Supreme Court of Canada observed at 605-606 that in the social, economic or political spheres, where (as in that case) the legislature had to reconcile competing interests in choosing one policy against other policies which were also acceptable, the Court had to respect the choice made on the basis that the legislature was in the best position to do so.  Reference was made to the judgment of McLachlin J (now McLachlin CJ) in RJR – McDonald Inc v Attorney General of Canada [1995] 3 SCR 199, at 342 where, in the context of legislation affecting the freedom of expression, it was observed, “If the law falls within a range of reasonable alternatives, the courts will not find it overbroad merely because they can conceive of an alternative which might better tailor objective to infringement.”

(5) Further support for the view expressed in sub-para (3) can be found in the decision of the European Court of Human Rights in Blecic v Croatia (2005) 41 EHRR 185, at 197-8 (para 67).  This was a case dealing with socio-economic policy matters.  That case was referred to in R (Wilson) v Wychavon District Council [2007] QB 801, an equality case, where Richards LJ emphasised (at 825 G-H (para 61)) that the existence of a less restricted alternative did not mean that the margin of appreciation should not be considered.

(6) As we shall presently see, however, outside the area of socio-economic or other general policy matters, where fundamental concepts or core-values are involved, the court will be particularly stringent or intense in the application of the justification test. But in the area of socio-economic or other general policy matters, attempts to search for more and more alternatives to the solution that was adopted in any one case, should be discouraged.  This, I reiterate, is not the role of the court.  I have already referred above to what was said by McLachlin J in RJR – McDonald Inc.  Inaddition, as Justice Blackmun pithily observed in Illinois State Board of Elections v Socialist Workers Party  (1979) 440 US 173, at 188-189, “a judge would be unimaginative indeed if he could not come up with something a little less ‘drastic’ or a little less ‘restrictive’ in  almost any situation, and thereby enable himself to vote to strike legislation down.”

76.  To summarise, unless the solution or alternative in question is manifestly to beyond the spectrum of reasonableness (or manifestly without reasonable foundation) the court will not interfere.   

77.  It is, however, important to put what has just been discussed into proper perspective.  The proposition that the courts will allow more leeway when socio-economic policies are involved, does not lead to the consequence that they will not be vigilant when it is appropriate to do so or that the authorities have some sort of carte blanche.  Afterall, the courts have the ultimate responsibility of determining whether acts are constitutional or lawful.  It would be appropriate for the courts to intervene (indeed they would be duty bound to do so) where, even in the area of socio-economic or other government policies, there has been any disregard for core-values.  This requires a little elaboration.  Where, for example, the reason for unequal treatment strikes at the heart of core-values relating to personal or human characteristics (such as race, colour, gender, sexual orientation, religion, politics, or social origin), the courts would extremely rarely (if at all) find this acceptable.  These characteristics involve the respect and dignity that society accords to a human being.  They are fundamental societal values.  On the other hand, where other characteristics or status which do not relate to such notions or values are involved, and here I would include residence status, the courts will hesitate much more before interfering; in other words, more leeway is given to the Executive, Legislature or other authorities.  I have found useful in this context the analysis contained in the speech of Lord Hoffmann in Carson at 182E-183B (paras 15–16).  As Lord Hoffmann observed, there can of course be borderline cases but generally there ought to be little difficulty in differentiating between a core value and a mere question of general, social or economic policy: at 183C (para 17).  In the present case, using residence status as the dividing line in relation to health benefits clearly falls within the latter.  This status has less to do with personal characteristics (in the sense used above) than with social and economic considerations.

78.  Where core values relating to personal characteristics are involved, the court will naturally subject the relevant legislation or decision to a particularly severe scrutiny.  Lord Pannick QC (for the respondents) used the term “inherently invidious” to describe any decision which offended these core values.  While I would, for myself, not have used this expression, it nevertheless conveys the necessary sentiment.

79.  It is convenient here also to remind ourselves that where the subject matter of the challenge has to do with fundamental concepts, in contradistinction to rights associated with purely social and economic policies, the courts will be particularly vigilant to protect the rights associated with such concepts, and consequently much less leeway or margin of appreciation will be accorded to the authority concerned.  These fundamental concepts are those which go to the heart of any society.  They include, for example, the right to life, the right not to be tortured, the right not to be held in slavery, the freedom of expression and opinion, freedom of religion (among others).  Fundamental concepts also include the right to a fair trial and the presumption of innocence.  Here, the courts have been vigilant to ensure that the proportionality or justification test is satisfied.  Thus, in relation to the presumption of innocence, the courts have read down provisions in criminal statutes (which placed a legal or persuasive burden of proof on an accused person) to an evidential burden: see HKSAR v Lam Kwong Wai  (para 63 above), HKSAR v Hung Chan Wa (2006) 9 HKCFAR 614.

80.  The entitlement to social welfare or to subsidized health services is not a fundamental concept as I have used that term.  It is a right that is inextricably bound with socio-economic considerations and therefore to be considered in such light.  The subject matter of the present case involves entitlement to subsidized obstetric services in public hospitals in Hong Kong. While the applicants have made reference to the right to family life and family unity, this argument has obvious limits.  The three Decisions in the present case do not prevent women in the A2 Group having children.  There has been no real suggestion of this.  Afterall, no evidence has been put before the court to the effect that women in the A2 Group could not give birth in the Mainland if they chose to.  The applicants’ case is that the A2 Group women simply desire to give birth in Hong Kong.

81.  It is sometimes said that in cases where core-rights or fundamental concepts are concerned, the courts will adopt an ‘intense’ or ‘more intense’ level of scrutiny.  These terms, like the terms margin of appreciation or deference, are used for convenience only and not be taken literally.  They are used to convey the principles identified earlier in this section of the Judgment. There is of course, no question of a court taking a laxer or less vigilant approach whenever any questions of constitutionality arise.  Each case is of course approached seriously, only that the legal approach will inevitably differ depending on the circumstances of the case.  Where core values or fundamental concepts are involved, these are areas where the courts have (for want of better terms) expertise and experience, and it is part of their constitutional duty to protect these values or concepts.  In policy matters not involving these matters, the courts do not have this expertise or experience and, more important, it is not within its constitutional remit to determine matters of government or legislative policy, save where questions of legality arise.  As Sir Anthony Mason NPJ put it in HKSAR v Lam Kwong Wai at 601E (para 45) “the weight to be accorded to the legislative [and I would add, the executive and other authorities’] judgment by the court will vary from case to case depending upon the nature of the problem, whether the executive and the legislature are better equipped than the courts to understand its ramification and the means of dealing with it.”

E.2 Application to the Present Case

82.  Both Poon J and the Court of Appeal applied the  two-stage test in Yau Yuk Lung, though with different results.  Poon J concluded that the second applicant (and those in the A2 Group) were not similar to women who were EPs (in other words, Hong Kong resident women).  This conclusion was reached essentially by the application of the justification test, as Stock VP observed in his judgment. The essential difference between members of the A2 Group and EPs was the fact of residence status.  The learned judge also, for the sake of completeness, dealt with the second stage and found in favour of the respondents applying the justification test.  The Court of Appeal was of the view that Poon J erred in his conclusion on the first stage of the test.  I have already set out the reasons given by Stock VP (with whom the other members of the Court agreed) in taking the opposite view to the Judge that the second applicant (and thus in the A2 Group) were in an analogous position to Hong Kong resident women (see para 40 above).  The Court of Appeal then dealt with the justification test, applied the principles that I have set out in the previous Section and concluded that the dividing line based on residence status was justified.

83.  In the present case, there is a considerable overlap between the first and second stages of the Yau Yuk Lung test.  It is one of those cases where the Court will need to look at the evidence before it on justification in any event in order to answer the important question identified in para 58(1) above: is there enough of a difference between the second applicant (and the A2 Group) and women who are EPs to justify the different treatment received under the three Decisions?  Accordingly, I would approach the present case adopting this as the fundamental question for the court to resolve in determining the issue of equality.

84.  As Stock VP observed in his Judgment with characteristic sensitivity, this litigation has evoked much emotion.  He refers to the slight felt by the applicants (and others in the A2 Group) that they are not treated in the same way as a Hong Kong resident family and that as a result, this has adversely impacted on family unity.

85.  I do not disagree with these sentiments and can readily sympathize with the position of the applicants and others like them.

86.  However, in applying the legal principles set out earlier, I am firmly of the view that the applicants’ objections based on equality must fail when seen against the facts.

87.  I have already set out (in Section B above) the background and relevant circumstances surrounding each of the three impugned Decisions.  The fundamental basis, that is the dividing line, used by the respondents was that of residence status - Hong Kong residents (holding a Hong Kong Identity Card) were to be treated as EPs while non residents, including the A2 Group, were to be treated as NEPs.

88.  As a matter of law, this difference in status is of course sufficient to engage the application of Article 22 of Bill of Rights.  The critical question is whether there has been a breach of the right to equality.

89.  We have seen that the courts have on a number of occasions held that where socio-economic policies are concerned (and within this, health and the welfare policies), drawing the line at residence status has justified differential treatment: see para 72 above.  This line may not in every situation be justifiable but, in my judgment, it is in the present case : -

(1) As we have seen, as far back as July 2002, the Chief Executive had already stressed the need for a comprehensive population policy.  The Task Force that was as a result set up emphasized the need to give due regard to the long-term sustainability of Hong Kong’s social services in the context of limited public resources, both financial and manpower.

(2) In such circumstances, it would come as no surprise at all that hard decisions would have had to be made regarding the entitlement of persons to social or health benefits.  What may have been affordable in the past might no longer be the case in the modern context (cf the remarks of Lord Hoffmann in the NASS case (see para 72 above) at 2962 D-F (paras 19-20)).

(3) In the particular area of healthcare and within this, obstetric services in Hong Kong’s public hospitals, problems were identified by the respondents.  As can be seen from the facts set out above in relation to all three Decisions and from the tables in the Appendix annexed to this Judgment, many of the obstetric services were utilized by Mainland women, of which a sizeable proportion belong to the A2 Group (see in particular paras 16, 18, 21 – 25, 31-32 above).

(4) There was also the problem of dangerous behaviour among Mainland women giving birth, which included the A2 Group (see the Appendix and para 26 above).  It will be recalled the problem lay in Mainland mothers seeking admission at the Accident and Emergency Department of public hospitals just after midnight and then discharging themselves against medical advice within 24 hours in order to save money.

(5) The obstetric services provided to Mainland women (including the A2 Group) adversely affected Hong Kong resident mothers (who even staged a street protest in November 2006: see para 32 above).  In the third affirmation of Dr Cheung Wai Lun, he referred to the pressure of providing adequate obstetric services and beds.  For example, in 2006, the number of deliveries in public hospitals was 40,063, which exceeded the delivery capacity of 39,347.

(6) Accordingly, in order to deal with these problems (many of which were caused by the A2 Group) and to ensure that preference was given to Hong Kong residents rather than non-residents, the three Decisions came to be made.

90.  These Decisions were made as part of the Government’s socio-economic responsibilities and represent the implementation of policies in these areas. For my part, it is no part of the court’s role to second-guess the wisdom of these policies and measures in the circumstances I have described above.  Nor is it (as discussed in paras 74-76 above) the court’s role in such matters of socio-economic policy to examine whether better alternative solutions could have been devised.  It is sufficient to say in the present case that the line drawn by the respondents at residence status is entirely within the spectrum of reasonableness.  In my view, all three aspects of the justification test are satisfied.

91.  In many ways the real complaint of the applicants is that members of the A2 Group have been “lumped together” with other NEPs (namely the transient mothers), who have far fewer (if any) connections with Hong Kong than they.

92.  I suppose if the respondents had drawn the line to include the A2 group as EPs, this might well have been acceptable from a legal point of view, but in using residence status as the criterion, the respondents’ decisions here cannot be impugned.  Residence status is comprehensible and rational.  The respondents cannot be criticized for not choosing to differentiate between different categories of NEPs when drawing the line where they did.  Even acknowledging the links to Hong Kong that members of the A2 Group have, they remain in law visitors with no rights of residence in Hong Kong.  In other words, they are non-residents, even though they are close perhaps to becoming Hong Kong residents.

93.  There is also the factor of administrative convenience to which I have alluded in para 73 above.  While this is not a major consideration, it is nevertheless of some relevance.  Residence status is clear and relatively easy to implement.

94.  For these reasons, I am of the view that the applicants’ challenge based on equality, fails.

F  PADFIELD

95.  On analysis, this point can be dealt with shortly.  Although the applicants’ arguments were based on s 4(d) of the Hospital Authority Ordinance (see para 47 above), in reality this was just a variation of their submissions regarding equality.  The applicants object to the second applicant and the A2 Group being treated in the same way as the transient mothers (and other NEPs) by being charged much higher than EPs; thus, it is argued, when discharging its duties, the first respondent had failed to take into account the so-called affordability principle in s 4(d).

96.  For the same reasons as articulated above supporting the conclusion that there was no breach of the right to equality, so the Padfield ground fails as well.  There are two additional matters that ought to be raised. 

97.  First, while the first respondent had to bear in mind affordability, that was not the only factor relevant toits duty to recommend appropriate policies on fees.  As Lord Pannick QC emphasized, the first respondent also had the responsibility to advise the government of the needs of the public for hospital services and of the resources required to meet those needs (ss 4(b) and s 4(c)(i)).  It is clear that the responsibility of the respondents under the Hospital Authority Ordinance in relation to fees required an overall view to be taken of all relevant factors, of which affordability was one.  Limited resources, the need to deal with problems which arise (such as the problem of Mainland women using obstetric services in public hospitals) were all matters which had to be considered.  In the present case, account was taken of the affordability factor by the first respondent.  Where a material consideration has been considered, it is up to the relevant authority to determine the weight to be attached to it: see Tesco Stores Limited v Secretary of State for the Environment [1995] 1WLR 759, at 780 F-G.

98.  Secondly, there was a complaint raised by the applicants in relation to the Third Decision that the fee for the obstetric package was raised to a level that went beyond cost recovery.  I can see how such a complaint can arise if the fee had been increased to an unreasonably high level (this would probably in any event take the decision beyond the reasonablespectrum of acceptable alternatives) but that is far from the facts of the present case.  As can be seen above, the fees were raised to deal with the problems existing at that time (to which reference has already been made) and they were raised to a level to approximate with those charged by private hospitals (see para 33(2) above).

99.  The Padfield objection therefore also fails.

G  CONCLUSION

100.  For the above reasons, I am of the view that this appeal should be dismissed and I would so order.  As for costs, I would make an order nisi that the respondents should have the costs of this appeal, to be paid by the applicants, such costs to be taxed if not agreed.  The applicants’own costs should be taxed in accordance with the Legal Aid Regulations.  If any party wishes to have a different order for costs, written submissions should be served on the other party or parties and lodged with the court within 14 days of the handing down of this Judgment, with liberty on the other party or parties to lodge written submissions within 14 days thereafter.  In the absence of such written submissions, the order nisi will stand absolute at the expiry of the time limited for these submissions.

Mr Justice Chan PJ:

101.  I agree with the judgment of the Chief Justice.

Mr Justice Ribeiro PJ:

102.  I agree with the judgment of the Chief Justice.

Mr Justice Mortimer NPJ:

103.  I agree with the judgment of the Chief Justice.

Lord Millett NPJ:

104.  I agree with the judgment of the Chief Justice.

Chief Justice Ma:

105.  Accordingly, for the above reasons, this appeal is unanimously dismissed.  As for costs, the Court makes the order set out in para 100 above.