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

CACV 30/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 30 OF 2009

(ON APPEAL FROM HCAL NO. 94 OF 2007)

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BETWEEN

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J U D G M E N T

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Hon Stock VP:

Introduction

1.  The cost of medical services provided by public hospitals to Hong Kong residents is heavily subsided. For the purpose of charges at public hospitals, an individual who seeks medical services is classified either as an eligible person (EP) or as a non-eligible person (NEP). Whilst an NEP has access to medical services at public hospitals, he or she is subject to higher charges than those levied upon an EP.

2.  Prior to April 2003 those who were not residents of Hong Kong – meaning those who did not hold Hong Kong identity cards (HKID) – but who were spouses of HKID holders were categorized as EPs. But in April 2003, they were re-classified as NEPs, and have remained thus re-classified ever since. Revised charges for NEPs were gazetted. In 2005, a charging package was introduced specifically for obstetric services, by reason of which the charge for NEPs seeking to utilize such services at public hospitals was substantially increased. In 2007, the package was altered, resulting in further significant increases in the charges.

The main issues

3.  Under challenge in these proceedings is the decision to categorise spouses of HKID holders as NEPs, more particularly to make, and then to maintain, that classification in respect of Mainland women who were and are two-way permit holders waiting for the issue of a one-way permit.

4.  At issue is whether the decisions thus challenged are discriminatory; in other words, whether they constitute as between individuals or groups in a similar position a differentiation in treatment which is not reasonably justified.

5.  There is a further issue, which is whether in considering a request by the applicants to waive the fees allegedly due, the decision maker, the Hospital Authority, has misdirected itself as to the existence and scope of its discretion and, if so, whether relief should nonetheless be denied.

6.  These issues were the subject of judicial review proceedings. Following leave granted by the Court of Appeal, the application was heard by Poon J but was dismissed by him on 17 December 2008. This is an appeal from that decision.

The applicants

7.  The appellants (applicants) are husband and wife. The first applicant, Mr Fok Chun Wa, is a permanent resident of the Hong Kong Special Administrative Region. He therefore holds a Hong Kong identity card. Because he suffers from a mental disability, his father, Mr Fok Siu Wing, has been appointed as his next friend.

8.  In 2005, the first applicant married a resident of the Mainland, Mdm Zeng, who is the second applicant. At all material times she did not hold a Hong Kong identity card but has been in Hong Kong on the strength of a two-way permit. Towards the close of the appeal hearing we were informed by Mr Chang SC, for the applicants, that she has recently been granted a one-way permit. That, however, is irrelevant for the purpose of the issues raised in this appeal which affect her liability to pay the fees levied in respect of her obstetric care and which also affect others who remain in the same position as was she before the issue to her of the one-way permit.

9.  A two-way permit is one that is issued by the Mainland authorities to Mainland residents to permit them to visit Hong Kong. The maximum period of stay in Hong Kong which is allowed by such a permit is, in the case of visits to relatives, 90 days. The issue of such a permit does not guarantee entry into Hong Kong; that is a matter for the Hong Kong immigration authorities. That said, a two-way permit holder who is given permission to land in Hong Kong as a visitor will not be permitted to stay for a period longer than that allowed by the two-way permit.

10.  It is in these circumstances that the second applicant has stayed in Hong Kong for some years, living with her husband when here, but required periodically to return to the Mainland, coming back to Hong Kong after obtaining fresh two-way permits.

11.  In 2007 she fell pregnant. On 21 December 2007 she was admitted to the Princess Margaret Hospital through its accident and emergency department and on 26 December 2007gave birth by Caesarean section to a boy. On 30 December 2007 she discharged herself from the hospital against medical advice. She was presented with charges of $48,000. The outstanding fees including interest, for which she is allegedly liable as a NEP, are now in the region of HK$150,000.

The Hospital Authority

12.  In 1990, the Hospital Authority (the Authority) was established by the Hospital Authority Ordinance Cap. 113 as a body corporate. Its function is to manage and control public hospitals, to advise the Government of the needs of the public for hospital services and of the resources required to meet those needs; to manage and develop the public hospitals system in ways which are conducive to the use of hospital facilities to the highest possible standard within the resources obtainable; and to ensure accountability to the public for the management and control of that system[1].

13.  The Authority provides primary care through 74 general outpatient clinics, and secondary and tertiary care through inpatient services at 41 public hospitals and 48 specialist outpatient clinics.

14.  The evidence placed before the court below is that “the Government has been heavily subsidizing the standard fees and charges for hospital maintenance and outpatient consultation in public hospitals/clinics, which cover a wide range of medical services, procedures and consultations, at an average rate of around 95%.”[2]

15.  Furthermore, one of its functions is “to recommend to the Secretary for Food and Health 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.”[3]

16.  Section 18 of the Ordinance provides for the determination of fees payable for public hospital services. By virtue of s. 18(6) the Secretary for Food and Health may give directions in writing of a general or specific character to the Authority in relation to the determination of such fees and the Authority is required to comply with such directions.

17.  Before the Authority was established, EPs (then called ‘entitled persons’) were defined as:

(1)  holders of a Hong Kong identity card or their children aged under 11 years;

(2)  United Kingdom citizens; or

(3)  other persons approved by the Director of Hospital Services or the Director of Health.

18.  Amongst the third category, namely, ‘other persons approved by [one of the Directors]’, were included spouses of HKID holders even if they were not themselves HKID holders.

19.  The same categorisation applied upon and after the establishment of the Authority in 1990, but in 1997 an alteration was made to reflect the change in the exercise of sovereignty: on and after 1 July 1997, the mere fact of UK citizenship no longer entitled a person to be classified as an EP.

The 2002 Report

20.  In July 2002, the Chief Executive announced that there was an urgent need for the development of a comprehensive population policy for Hong Kong. Pursuant to that announcement, there was established a Task Force on Population Policy the remit of which was to identify significant challenges to Hong Kong arising from its demographic trends and characteristics and to recommend a set of policy initiatives to be explored.

21.  The Report issued by the Task Force highlighted the increasing flow of arrivals from the Mainland admitted under the one-way permit scheme – a scheme devised to facilitate family reunion[4] – as well as the pace of population aging. These factors, amongst others, resulted in increases in social security payments and health care expenditure. The Report remarked on the fact that many public services in Hong Kong were heavily subsidised and that “[w]hile some require prospective applicants to meet a residence requirement, others do not. For public healthcare services, the heavily subsidised services are available not only to permanent residents, but also foreign domestic helpers, migrant workers and two-way permit holders who are spouses or children under 11 years of age of Hong Kong Identity Card holders. There is considerable discrepancy in the eligibility for various privileges among residents with different lengths of residence. We need to ensure that there is a rational basis on which our social resources are allocated, in particular against our current austere fiscal situation when available resources are increasingly limited and demand is continuously rising.’[5]

22.  The Report made reference to the one-way permit scheme recommending, inter alia:

(1)	continuation of the practice “whereby the OWP[6] issuing authorities in the Mainland take meticulous measures to verify the claims by OWP applicants and, if necessary, confirm with the [Hong Kong Government] the validity of those parts of their claims involving Hong Kong residents on a case-by-case basis”;[7]
(2)	encouragement of Mainland spouses to visit Hong Kong under the two-way permit scheme, as soon as they had applied for a one-way permit “so that they may familiarise 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”[8]; and
(3)	adoption of a seven-year residence requirement for the provision of social benefits heavily subsidized by public funds.  In this last regard, the Report itself noted that some of the heavily subsidized services required prospective applicants to meet a residence requirement (eg. seven years for subsidized housing) whilst others, such as education and public health did not.  The seven-year residence requirement was set to reflect “the contribution a resident has made towards our economy over a sustained period of time in Hong Kong.  A seven-year residence is also normally required for the grant of permanent resident status in Hong Kong, for which additional rights are prescribed in the laws of Hong Kong” – for example, the right to vote.[9]  Public healthcare services were available “not only to the general population, but also to the transient population that includes foreign domestic helpers and migrant workers and to two-way permit holders who are spouses or children under 11 years of age of Hong Kong Identity Card holders…. In sum, while people living in Hong Kong generally enjoy the same fundamental political and human rights, there is considerable discrepancy in the eligibility for various privileges among residents with different lengths of residence.”[10]

23.  The Report noted that access to social benefits depended upon a residency test – in the case of public housing rental, seven years residence in Hong Kong – whereas no such rule applied to access to public medical services and that users of such services were not even subject to a means test; that the implication for public finances of the increasing expenditure in providing heavily subsidized social services was becoming a matter of concern; that there had to be a rational basis for the allocation of financial resources so as to ensure the long-term sustainability of the public healthcare system and the Report suggested that there was a strong case for applying a uniform seven-year residence rule for access to all heavily subsidized social services, including public health care benefits. It was, however, recognized that immediately to impose a seven-year residence requirement would have too drastic an impact on large numbers resident in Hong Kong but not resident for as long as seven years, for which reason the initial arrangement suggested was one which excluded non-residents but benefitted both permanent and non-permanent residents. Accordingly, a new rule was proposed that would exclude visitors, including two-way permit holders, from benefits. The rationale was that heavily subsidized services should not be diverted to non-residents and visitors at the expense of local residents.[11]

The 2003 decision

24.  In the event, the Secretary for Health, Welfare and Food directed the Department of Health and the Authority that, as from 1 April 2003, non-Hong Kong residents who were spouses of HKID holders should be charged NEP rates for the use of public medical services and “other persons approved by the Director” was to be redefined so as to exclude such spouses. This exclusion therefore affected female spouses who were in Hong Kong on two-way permits.

25.  Revised charges were gazetted. Their effect was that NEPs were to be charged $3,300 per day for inpatient, including but not limited to obstetric, services in public wards of the Authority’s general hospitals. This sum was set on the basis of the general average cost of providing inpatient services to a patient per day at an Authority hospital but was a sum which was significantly lower than the average cost of providing obstetric services.

2004

26.  The evidence filed for the purposes of these proceedings is to the effect that in 2004 there was a significant increase in the number of patients from the Mainland, not resident in Hong Kong, attending public hospitals here. NEP patients were predominantly female and a significant proportion of those females presented themselves for obstetric services. In a paper presented in December 2004 to the Legislative Council Panel on Health Services (‘the Panel’), the Health, Welfare and Food Bureau said that around 70% of NEP mothers who gave birth in public hospitals did not receive any antenatal care in Hong Kong. In order to minimise the hospital fees payable, an increasing number of Mainland NEP women presented themselves at public hospitals after midnight and, against medical advice, discharged themselves within 24 hours of delivery of the child. This placed the health of mother and child in jeopardy, increased the workload for night shift staff, thereby diverting limited resources to the care of non-residents at the expense of local residents, and meant that the charging mechanism did not in fact cover the cost of the obstetric services provided.

27.  Whilst the same paper stated that an increasing number of NEP women who presented themselves to give birth at public hospitals were women whose husbands were not Hong Kong residents, the figures given illustrate that both in 2004 and before that, at least three-quarters of the Mainland women giving birth in Hong Kong at such hospitals were wives of Hong Kong resident husbands.[12] There was a high default rate amongst NEPs in respect of payment of fees.

28.  A number of solutions were canvassed in the paper. One of the alternatives put forward was to cease providing non-emergency medical services to NEPs who were not spouses or children of holders of HKID cards. The exclusion from this proposal of spouses and children of HKID holders was put on the basis that most were eligible for a one-way permit to settle in Hong Kong and would become Hong Kong residents in the near future. The paper pointed out that on the strength of multiple visit endorsements whilst waiting their turn for a one-way permit, visiting spouses were able to stay in Hong Kong “virtually year-round” and “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 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.” The Panel recommended the establishment of a working group “to address and solve expeditiously the problems brought about by non-Hong Kong residents coming to Hong Kong for child birth.”

29.  What then happened was that the Bureau made a proposal for the establishment of an “obstetric package” whereby a NEP giving birth in a public hospital would be charged $20,000, a sum intended to cover the cost of delivery and a three day – two night hospital stay. The object was to curb the unhealthy and dangerous behaviour to which I have already referred, to deter the use of public medical services by NEPs, and to recover cost. The existing charges were well below the level of charges by private hospitals for obstetric services; the increasing number of Mainland women using such facilities was placing a strain on manpower; and there was a desire to ensure that local (resident) mothers were adequately served at public hospitals.

The 2005 decision

30.  The proposed package was discussed by the Panel in May 2005. The paper presented to the Panel by the Bureau suggested that “heavily subsidized medical services should not be diverted to non-residents and visitors at the expense of local residents” and that the introduction of a minimum package charge “would remove the financial incentive for NEP mothers to cut short their length of hospital stay deliberately.”[13] The paper did not canvass a distinction between two-way permit holders simpliciter, and two-way permit holders who were spouses of Hong Kong resident husbands and who, in addition, were awaiting a one-way permit.

31.  In July 2005, the Secretary for Health Welfare and Food directed the Authority to introduce the new obstetric package as from 1 September 2005.

2006

32.  In the first ten months or so of 2006, there was a decrease in the number of NEPs giving birth at public hospitals but the number remained higher than in the financial years 2002-03 and 2003-04; the ratio of EP births to NEP births was decreasing; about 80% of NEP mothers presented themselves without having had proper antenatal care so that there were increased problems in labour, and the charges for obstetric services at public hospitals continued to be more attractive than those at private hospitals.

33.  However, the trend of the first ten months of 2006 was not maintained. In October 2006, there was an increase of 9% in births to NEP mothers compared with October 2005 and the figure was 28% higher than that of September 2006. It was predicted that there would be an increase in the birth rate the following year, due to the “Golden Pig Year” effect. Also, there were reports of many complaints from expectant EP mothers who said that they were receiving a lower standard of care as a result of the overloading of public hospitals by NEP mothers.

34.  In a paper prepared for discussion by the Authority in December 2006, it was noted that the forecasted increase in the birth rate, both from local and Mainland women, was inevitably going to augment the pressure on obstetric services, including, in particular, on neo-natal intensive care services since all babies requiring intensive care are required, in Hong Kong, to be referred to Authority hospitals. There was a need, so the paper recorded, to guarantee such services to local mothers but that capacity was strained; wards were already congested in obstetric units; and there was a shortage of midwife and neo-natal intensive care nurses.[14] The paper canvassed a number of possible measures, including an enhanced ante-natal booking system by which priority booking would be accorded to Hong Kong mothers, meaning mothers who were Hong Kong residents. In relation to fees, the paper said:

“One of the measures to control the increase in demand will be through the adjustment of fees and charges.  The September 2005 increase had an impact on reducing demand for the first 10 months, and so pricing has an impact on demand.  Recent trend and the projected increase in the number of non-local mothers, suggests the need to further increase fees for non-local mothers.  The proposed increase aims to ensure NEP expectant mothers would not be attracted to use the public obstetric services because of financial incentives.  The increased fees will also be set at differential rate for booked and non-booked cases with a view to encouraging NEP mothers to seek antenatal care during the course of pregnancy.”[15]

The 2007 decision

35.  A revised obstetric package was gazetted on 22 January 2007. It replaced the scheme for NEPs as follows:

(1)	For those who made a booking arrangement with the Authority for ante-natal check-up and delivery before having a delivery in an Authority hospital, clinic or accident and emergency department, a minimum non-refundable fee of $39,000 would be charged on booking.  This fee was to cover the charge for one antenatal attendance at a specialist outpatient clinic, the delivery, and the first three days of hospitalisation in a general ward;
(2)	For those patients who delivered or received delivery care service in such a hospital, clinic or accident and emergency department without a prior booking arrangement or without having attended any ante-natal clinic, a minimum fee of $48,000 would be charged for the delivery and the first three days of hospitalisation; and
(3)	For hospitalisation beyond the first three days, there would be a daily charge, as before, of $3300.

36.  One of the objectives was to divert NEP expectant mothers to private hospitals or to the use of the Authority’s private services. The level of fees was set having regard to obstetric service charges levied by two private hospitals known to have a high number of patients in the NEP category and to the charges of the Authority for its private services.

37.  The rationale for the approach was summarized by the Principal Assistant Secretary for Health, Welfare and Food at a meeting of the Panel on 30 April 2007 as follows:

(1)	to ensure that ‘local’ pregnant mothers were given proper obstetric services, and priority to such services;
(2)	to limit the number of non-local pregnant women coming to Hong Kong to give birth to a level that could be supported by Hong Kong's health-care system; and
(3)	to deter dangerous behaviour of non-local pregnant women in seeking emergency hospital admissions shortly before labour.

38.  The scheme also embraced a difference between the charges for newborn babies of EP status and those of NEP status but the charges were and remain determined by the status of the newborn child and not by the status of the child's mother. For newborn EPs, no maintenance fee is charged for their stay in the nursery ward before their mothers are discharged but if the baby cannot be discharged as the same time as the mother, a charge will be levied at half the maintenance fee appropriate to the type of bed occupied. For newborn babies with NEP status who receive healthcare at a public hospital, the charge is the full maintenance fee from the date of birth. Newborn babies eligible for the right of abode are categorised as EPs regardless of the status of the mother.

39.  In conjunction with the new fee system, there was introduced, as from 1 February 2007, a central booking system for obstetric services by which all pregnant women, whether resident in Hong Kong or on the Mainland, were required to make prior arrangements with hospitals in respect of ante-natal examination and delivery. It was decided that the Hospital Authority would reserve sufficient places for Hong Kong resident pregnant women to ensure priority over NEPs. If extra places were available, the Authority would accept bookings from Mainland women but once service capacity was reached, the Authority would stop accepting their bookings. The fee for those with bookings had to be paid in full at the time of the booking and the Authority would issue a certificate to NEPs who had booked and paid. An arrangement was made with private hospitals which offered obstetric services that they too would issue booking confirmation certificates for those who had booked and paid.

40.  This booking system was supported by immigration measures by which the Immigration Department was to conduct specific clearance checks upon all non-resident pregnant women who were at an advanced stage of pregnancy, meaning those who had been pregnant for 28 weeks or more. Mainland women suspected of seeking to enter Hong Kong to give birth were to be asked by immigration officers upon entry to produce booking confirmation certificates issued by Hong Kong hospitals, failing which they might be denied entry. This booking system and the supporting immigration measures were the subject of a press release on 16 January 2007.

The figures

41.  The following table was produced in the Court below to illustrate the number of births in public hospitals in the years 2002 to 2007 inclusive. :

Number of births in Public Hospitals

Year	By Eligible Persons (EP)	By Non-eligible Persons (NEP)			Total
		Not admitted Via A&E	Admitted via A&E	NEP subtotal (Figures in bracket referred to babies whose fathers are Hong Kong Permanent residents)
2002	28,939	6,054	2,194	8,248 (7,343)	37,187
2003	26,702	4,970	3,823	8,793 (7,373)	35,495
2004	26,675	3,874	7,118	10,992 (8,257)	37,667
2005	27,347	4,154	9,757	13,911 (7,663)	41,258
2006	28,438	2,208	9,839	12,047 (5,196)	40,485
2007	30,925	7,023	1,753	8,776 (3,859)	39,701

42.  The table was produced to show:

(1)	the significant proportion of births to NEP mothers;
(2)	the significant percentage in each year ( save in 2007) of NEP births after admission via accident and emergency departments;
(3)	the fact that of the NEP mothers giving births, most were wives of HKID holders; and
(4)	the dramatic drop in 2007 of births to NEPs and, more particularly, of pregnant women presenting themselves at accident and emergency units.  Whilst the number of babies born in Hong Kong to Mainland resident women in both public and private hospitals increased in the 11 months after February 2007, when compared with the same period in 2006, and whilst there was also an increase in the number of babies born in Hong Kong to Hong Kong resident women, the number of births in public hospitals to non-resident pregnant women dropped on average by almost 30% as compared with the 2006 period, whereas the number of births to local women in public hospitals increased by almost 9%.  Furthermore, in that 11 month period, the number of births to non-local pregnant women who sought emergency hospital admission dropped by about 86%.

43.  What the figures do not show is how many of those admitted for these obstetric services, who were wives of Hong Kong resident husbands, were women waiting for one-way permits. The evidence is that the Authority did not and does not have the statistics of how many NEP women applied for and were waiting for a one-way permit.[16]

44.  We were invited as well to consider the figures in the context of the Authority’s capacity to absorb Mainland pregnant women for obstetric services. The evidence in this regard is limited. The number of deliveries in public hospitals in 2006 (40,063) is said to have exceeded the delivery capacity of the Authority in that year. To seek to cope with the figures shown by 2006 deliveries, capacity was increased for the year 2007 to 41,477. Whilst this exceeded the actual number of births, the evidence is that there was a concomitant scaling down of non-urgent gynaecological work; a move of overflow gynaecological patients to other wards; the use of non-obstetric ward facilities for ante-natal and post-natal care; the diversion of resources from other non-obstetric services which in turn affected the level of such services to Hong Kong residents who required them; and a requirement for staff to take leave before and after peak birth months to ensure optimal strength of staff during those months.[17]

45.  In April 2007, a further meeting was held by the Panel, for which purpose another discussion paper was produced by the Bureau. It was noted in that paper that the number of non-booked obstetric cases by NEPs in public hospitals had significantly dropped: “In the nine weeks since 1 February, a total of 371 non-local pregnant women sought emergency hospital admission through A&EDs, which was 75.5% lower on average than the same period in 2006 and 67% lower than January 2007.”[18] The point was made that the new obstetric service arrangements had been effective in establishing a control mechanism in that “the total number of births by non-local women in Hong Kong was… about 4.1% lower than the same period in 2006 and 28% lower than January 2007. More importantly, the booking systems coupled with the immigration control measures are giving hospitals the necessary means to control the total number of their obstetric patients to a capacity that they can support. In the nine weeks since 1 February, public hospitals and private hospitals handled 5,952 and 4,547 deliveries (i.e. total by local and non-local women) respectively.”[19]

46.  The paper went on specifically to address the question of NEPs whose spouses were Hong Kong residents. This had been the subject of considerable agitation by members of the Panel and by representatives of various non-governmental organizations. The justification for the failure to distinguish between NEPs who did not have Hong Kong resident husbands and those who did was that the Hong Kong public hospital system was established primarily for the benefit of Hong Kong residents. The paper then stated:

“We appreciate that some Hong Kong residents with non-local wives may wish their pregnant wives to be able to enjoy the high quality obstetric services available in Hong Kong.  The new obstetric service arrangements have already allowed for flexibility in this regard.  The main rationale for restricting eligibility for heavily subsidized public medical services to holders of Hong Kong identity cards and children under 11 years of age who are Hong Kong residents is the rational use of public resources.  As large amount of public resources are involved in the provision of medical services which are over 95% subsidized, there is a need to impose appropriate requirements on the eligibility for such services so as to ensure the long-term sustainability of our public healthcare system.  As a matter of fact, some other heavily subsidized social services such as public housing and social security are also subject to eligibility requirements to protect the interests of the local public.

The new obstetric service arrangements aim to limit the number of births by non-local women to a level that can be supported by our healthcare system.  We believe that it is in the public interest to do so.  Irrespective of the new measures, there will continue to be cases where children of Hong Kong residents are to be born in the Mainland.  There are established procedures for these children to apply to the relevant Mainland authorities for permission to move to Hong Kong permanently for family reunion in an orderly fashion under the One Way Permit Scheme.

We understand that marriages between residents of Hong Kong and the Mainland may become more prevalent given the increasing exchanges between the two places.  This however does not constitute any reason to go against our well-established policy that heavily subsidised medical services should only be made available to local residents but not their non-local spouses.  The onus should be on those couples who engage in cross-boundary marriages to make appropriate plans to meet their medical needs.

One of the suggestions made… was for the [Authority] to adopt a two-tier structure for its NEP Obstetric Package Charge by applying the revised rate of $39,000/$48,000 to NEPs with no marital ties in Hong Kong while allowing NEPs whose spouses are Hong Kong residents to pay the old rate of $20,000.

We have no intention to make a distinction amongst NEP pregnant women between those are the spouses of Hong Kong residents and those who are not, and introduce an extra tier in the NEP Obstetric Package Charge for the former group.  The revised rates of $39,000/$48,000 were introduced to remove the financial incentive for non-local pregnant women from accessing the obstetric service of public hospitals.  The old rate of $20,000 was much lower than what most private hospitals charged for similar services at the relevant time.  It was, therefore, necessary for the [Authority] to revise its obstetric service charge for NEPs so that public hospitals are less attractive to the non-local pregnant women.”[20]

The notice of application

47.  What is challenged by the notice of application for leave to apply for judicial review, as amended on several occasions, is:

(1)	the decision by the Authority dated 22 January 2007 to increase the package charge for obstetric services for persons deemed to be NEPs;
(2)	that decision as well as earlier decisions (that is to say the 2003 and 2005 decisions) in relation to fees “insofar as they purport to exclude or mandate the exclusion from the category of eligible persons … spouses of holders of Hong Kong identity cards who themselves are not holders of Hong Kong identity cards, alternatively on the basis that they purport to exclude or mandate the exclusion of spouses of holders of Hong Kong identity cards who are holders of two-way permits or alternatively who are holders of two-way permits waiting for the application for one-way permit is to be granted.”; and
(3)	the refusal by the Authority on 16 May 2007 to provide obstetric services to the second applicant, Madam Zeng, save on payment of fees charged to NEPs.the significant proportion of births to NEP mothers;

48.  The relief sought is a declaration that the three decisions (2003; 2005 and 2007) and their underlying policy contravene certain articles of the Basic Law and of the Hong Kong Bill of Rights Ordinance, and an order to bring up and quash those decisions.

The constitutional challenge

49.  The primary basis of the challenge is that the measures are discriminatory in that, so it is argued:

(1)	the second applicant (and those in her situation) was (prior to the grant to her of the one-way permit) in a position closely analogous to Hong Kong resident pregnant women whose spouses were also Hong Kong residents, and that her family – that is to say, her husband and children and herself – all living in Hong Kong, are, as a unit, analogous to Hong Kong resident families all of whose Hong Kong resident members hold HKID cards.  The analogy is all the more cogent when taking into account the fact that the second applicant had applied for a one-way permit.  For the purpose of these proceedings those in the second applicant’s position (pregnant women who are two-way permit holders awaiting a one-way permit and who are spouses of HKID card holders) are referred to in this judgment as “the A2 group”;
(2)	the impugned decisions of 2003, 2005 and 2007 differentiate in the treatment of those in the A2 group and their families, on the one hand, and Hong Kong resident mothers-to-be and their families, on the other.  The differentiation in treatment is that the A2 group have to pay fees which resident mothers and their families (as “resident” has been interpreted by the decision-maker) do not have to bear and that in practice means that they are relegated to giving birth on the Mainland, separated from the father and such of the baby’s siblings as there may be;
(3)	the aim pursued by these fee decisions does not pursue a legitimate aim, since such problems to which the decisions were directed were caused by those who have been labelled in these proceedings as ‘transient visitors’ – in other words, women who do not ordinarily reside in Hong Kong, who have not evidenced an intention to make Hong Kong their home, but visit here only for the limited purpose of giving birth;
(4)	the decisions were not rationally connected with the stated aim, because their effect, most especially the effect of the 2007 decision, was to leave untouched transient visitors who could afford the new fees but to exclude those who could not, namely, those in the A2 category, and did not take into account the impact of the measures on the families, resident in Hong Kong, of the A2 women; and
(5)	the measures adopted went further than reasonably necessary to achieve the stated objective since that objective was achievable by imposing the new fees only on transient visitors or by stopping booking for transient visitors.

50.  This alleged discriminatory treatment is said to infringe a number of provisions of the Basic Law and of the Hong Kong Bill of Rights Ordinance:

(1)	In the re-re-amended notice of application for leave to apply for judicial review, art. 145 of the Basic Law is said to be engaged.  Art. 145 stipulates that: “On the basis of the previous social welfare system, the Government of the Hong Kong Special Administrative Region shall, on its own, formulate policies on the development and improvement of this system in the light of the economic conditions and social needs.”
(2)	It is said that this power must be exercised in the light of arts. 25 and 36 of the Basic Law: Art. 25 provides that: “All Hong Kong residents shall be equal before the law.” Insofar as is said to be relevant to this case, art. 36 provides that: “Hong Kong residents shall have the right to social welfare in accordance with law. …”
(3)	Also prayed in aid are arts. 4 and 41 of the Basic Law: Art. 4 says: “The Hong Kong Special Administrative Region shall safeguard the rights and freedoms of the residents of the Hong Kong Special Administrative Region and of other persons in the Region in accordance with law.” Art. 41 states that: “Persons in the Hong Kong Special Administrative Region other than Hong Kong residents shall, in accordance with law, enjoy the rights and freedoms of Hong Kong residents prescribed in this Chapter.”
(4)	Then the applicants point to provisions of the Hong Kong Bill of Rights and the articles of the International Covenant on Civil and Political Rights (ICCPR) to which those provisions correspond: ●Art. 1(1) (ICCPR Art. 2) : “The rights recognized in this Bill of Rights shall be enjoyed without distinction of any kind, such as race, colour, sex, language, religion political or other opinion, national or social origin, property, birth or other status.” For the purpose of this case, the applicants emphasise “other status”. ●Art. 19 (ICCPR Art. 23): “(1)  The family is the natural and fundamental group unit of society and is entitled to protection by society and the State. …. (4)  Spouses shall have equal rights and responsibilities as to marriage, during marriage and its dissolution…. .” In this regard, the applicants argue that the impugned decisions undermine the family unit and fail to recognize the responsibilities of and burdens upon the first applicant, and those in his position. ●Art. 20 (ICCPR Art. 24): “Every child shall have, without any discrimination as to race, colour, sex, language, religion, national or social origin, property or birth, the right to such measures of protection as are required by his status as a minor, on the part of his family, society and the State." ●Art. 22 (ICCPR Art. 26): “All persons are equal before the law and are entitled without any discrimination to 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."

51.  The illogicality of the differentiation is manifest, says Mr Chang SC for the applicants, when one appreciates that those in the A2 group are ordinarily resident in Hong Kong, yet have been treated in the same manner as those who are not and whose only connection with Hong Kong is their intent on using obstetric services here whilst on temporary visits. The scheme, he says, is one which casts a stigma upon those within the A2 group, and upon their families, treating them as undeserving, when in truth all that separates their family and their residential conditions from those categorized as Hong Kong residents is the tenure in the latter group by one family member, the mother-to-be, of an identity card, an artificial difference for those awaiting a one-way permit. Moreover, he argues, it is not the new fees which has caused the drop in the numbers admitted to the accident and emergency units but rather the immigration policy which precludes from entry those without booking papers.

The Ordinance

52.  I have referred earlier to some of the functions of the Authority as prescribed by the Ordinance.[21] It is now convenient to refer to the Ordinance in further detail.

53.  By section 4 of the Ordinance the Authority is required to:

“(a) in accordance with the provisions of this Ordinance and the relevant agreements referred to in section 5(a) entered into, manage and control public hospitals;

(b) advise the Government of the needs of the public for hospital services and of the resources required to meet those needs;

(c) manage and develop the public hospitals system in ways which are conducive to achieving the following objectives-

 

(i)	to use hospital beds, staff, equipment and other resources efficiently to provide hospital services of the highest possible standard within the resources obtainable;
(ii)	to improve the efficiency of hospital services by developing appropriate management structures, systems and performance measures;
(iii)	to improve the environment in public hospitals to meet the needs of patients;
(iv)	to attract, motivate and retain qualified staff;
(v)	to encourage public participation in the operation of the public hospitals system; and
(vi)	to ensure accountability to the public for the management and control of the public hospitals system;

(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;

(e) establish, and assist others to establish, public hospitals;

(f) promote, assist and take part in-

(i) the education and training of persons involved or to be involved in hospital services or other services relevant to the health of the public; and

(ii) research relating to hospital services;

(g) perform such other functions as are imposed on it under this Ordinance or any other enactment; and

(h) apply its resources towards the performance of its functions specified or referred to in this section, in particular the promotion, development and maintenance of hospital services.”

54.  Section 5 of the Ordinance prescribes the powers of the Authority, amongst which is the power to “establish and maintain such hospital services as the Authority considers necessary or desirable for the purposes of this Ordinance”[22], and “ subject to section 18, charge fees for the provision of hospital services.”[23]

55.  Section 7 provides that the resources of the Authority shall consist of all money paid by the Government to the Authority and appropriated for that purpose by the Legislative Council or otherwise provided to the Authority by the Government as well as “all other money and property…received by the Authority.” The Secretary for Financial Services and the Treasury may give directions in writing to the Authority in relation the amount of money which may be expended in any financial year.

56.  Section 18 provides as follows:

“(1) A Hospital Governing Committee may, subject to any directions given to it under subsection (5), determine the fees payable for hospital services provided by the public hospital for which it is established.

(2) At any time when there is no Hospital Governing Committee established for a public hospital, the Authority may, subject to any directions given to it under subsection (6), determine the fees payable for hospital services provided by the public hospital.

(3) A Hospital Governing Committee in a determination under subsection (1), and the Authority in a determination under subsection (2), may, subject to any directions given to it under subsection (5) or (6), as the case may be, specify, either generally or specifically, the circumstances in which, and by whom, a fee for a hospital service provided by the public hospital to which the determination relates may be reduced, waived or refunded, in whole or in part.

(4) Where a Hospital Governing Committee has made a determination under subsection (1), or the Authority has made a determination under subsection (2), it shall, as soon as practicable, and subject to any directions given to it under subsection (5) or (6), as the case may be, cause the determination made by it to be published in the Gazette.

(5) The Authority may, subject to any directions given to it under subsection (6), give directions in writing of a general or specific character to a Hospital Governing Committee in relation to the exercise of its power under subsection (1) or (3), or the performance of its duty under subsection (4), and the Hospital Governing Committee shall comply with those directions.

(6) The Secretary for Food and Health may give directions in writing of a general or specific character to the Authority in relation to the exercise of its power under subsection (2), (3) or (5), or the performance of its duty under subsection (4), and the Authority shall comply with those directions.”

The judgment

57.  In the court below, the applicants failed at the first hurdle on the discrimination ground in that the judge held that the case of the applicants was not sufficiently similar to those presently classified as EPs to trigger the equality provisions of the Basic Law and of the Bill of Rights. The cardinal difference, he found, was the fact that the second applicant was but a visitor to Hong Kong whereas those categorized as EPs were not. He held that ‘the position of the 2^nd applicant, as a visitor, is materially different from that of an EP – a Hong Kong resident’.[24] Insofar as it was the applicants’ case that the true analogy was not just the individual applicant for obstetric services but rather the family, the judge answered by saying that the resident family was not the true analogue: the true analogue was the individual who sought the service. That said, the judge held that, in any event, the reasons proffered by the respondents for such differentiation as resulted satisfied the test in law for their justification thereby defeating the allegation of discrimination.

Residence

58.  There is one argument that requires disposal at the outset, for it muddies the waters. It is to the effect that the policy that motivated the impugned decisions erred in treating possession of a Hong Kong identity card as the sole criterion for determining who was in law a Hong Kong resident. The suggestion is that the second applicant was ordinarily resident in Hong Kong and that by reason of art. 24 of the Basic Law, she – and others in the A2 group – are to be regarded as residents. Whether this argument goes to the decision-making process or to the constitutional issue of discrimination is not clear but that matters not because in my judgment the argument is misconceived.

59.  Art. 24 of the Basic Law states as follows :

“Residents of the Hong Kong Special Administrative Region ("Hong Kong residents") shall include permanent residents and non-permanent residents.

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

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

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

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

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

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

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

The above-mentioned residents shall have the right of abode in the Hong Kong Special Administrative Region and shall be qualified to obtain, in accordance with the laws of the Region, permanent identity cards which state their right of abode.

The non-permanent residents of the Hong Kong Special Administrative Region shall be persons who are qualified to obtain Hong Kong identity cards in accordance with the laws of the Region but have no right of abode.”

60.  The applicants would place emphasis on the word ‘include’ in art. 24(1) which is said to carry the implication that there are those other than permanent and non-permanent residents who are in law residents of Hong Kong.

61.  So important is the question of qualification for the status of resident of the Region on and after 1 July 1997, that one can rest safe in the assumption that those who framed the Basic Law would not have left the issue to the loose interpretation which we are invited to place upon art. 24.

62.  Two categories of resident are mentioned: permanent residents and non-permanent residents. As matter of common parlance, it is difficult to think of a third category. That means that we need to ascertain who, by reason of the provisions of the art. 24, are permanent residents and who are non-permanent residents. Clearly the second applicant is not a permanent resident. It is not suggested that she has ordinarily resided in the Region for the requisite period there stipulated; though in any event I would find it difficult to uphold an argument that any person permitted to remain as a visitor for only 90 days at a time could acquire the status of ordinary resident.

63.  Was she then a non-permanent resident? That depends upon whether she was at the material times ‘qualified to obtain [a Hong Kong identity card] in accordance with the laws of the Region,’ for which we must look to the Registration of Persons Ordinance, Cap. 177, and regulations made thereunder.

64.  Section 3 of that Ordinance requires every person in Hong Kong to be registered under the Ordinance unless exempted by regulations made under section 7 of the Ordinance. A person not exempted must apply for an identity card[25]. But a person who has been granted permission to remain in Hong Kong by the Director of Immigration for not more than 180 days and is in possession of a valid travel document bearing an appropriate visa or in possession of an identity document showing that he or she normally lives outside Hong Kong is an exempt person. A sensible reading of these provisions illustrates that a person in the second applicant’s position was not qualified to obtain an identity card. No doubt in recognition of that fact, she did not apply for one. Indeed the evidence filed on her behalf described her as a resident of the Mainland.

65.  The word ‘include’ in art. 24 is to be read contextually and a purposive interpretation of it in context dictates a restrictive rather than an expansive meaning:

“The word ‘include’ is very generally used in interpretation courses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include.  But the word ‘include’ is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to shew that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined.  It may be equivalent to ‘mean and include’, and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.”

per Lord Watson in Dilworth v Commissioner of Stamps.[26]

66.  I am satisfied that in the context of art. 24 ‘permanent residents and non-permanent residents’, as those terms are defined in the remainder of that provision, represent exhaustively the categories of residents of the Hong Kong Special Administrative Region and that the second applicant was, at all material times, neither a permanent nor a non-permanent resident.

Article 145

67.  Art. 145 does not confer a right to social welfare. Rather, it imposes an obligation upon the Government of the Hong Kong Special Administrative Region to develop and improve the social welfare system on the basis of that which previously existed but, obviously, only insofar as economic conditions allow. But as Andrew Cheung J said in his judgment in Kong Yun Ming v Director of Social Welfare[27] a policy formulated under art. 145 must not ignore constitutional rights; so that, to take the example he gave, it would not be lawful to promulgate a policy which results in unequal treatment amongst residents of the Region that could not be justified.

Article 36

68.  Neither does art. 36 of the Basic Law of itself assist the applicants’ case, for although it confers upon residents a right to social welfare, that is not an absolute right: it is, for the reasons provided by Andrew Cheung J in the same judgment, Kong Yun Ming[28], reasons with which I respectfully agree, a right that may be restricted, as long as the restrictions are themselves lawful.

Article 41

69.  Art. 41 provides that persons in the Special Administrative Region other than Hong Kong residents shall, in accordance with law, enjoy the rights and freedoms of Hong Kong residents prescribed in Chapter III, the section on fundamental rights and duties of residents.

70.  The range of rights within Chapter III is broad and the degree to which rights of non-residents in Hong Kong at any given time may lawfully be circumscribed so as to differ from those enjoyed by residents must depend upon the context. So, for example, it is not possible to envisage circumstances in which it would be lawful to deprive a non-resident of the freedom from arbitrary detention or imprisonment. On the other hand, it would be a non-purposive construction that supposed that art. 41 intended that non-residents be accorded all the same privileges and benefits as residents, unqualified by considerations of residence status, or other connection with Hong Kong, and regardless of the impact of according such privileges and benefits on Hong Kong residents, benefits such as the freedom of occupation (art. 33) or the right to social welfare (art. 36). A point to the same effect has been made in the United States, albeit within its own constitutional and statutory framework:

“The fact that all persons, aliens and citizens alike, are protected by the Due Process Clause does not lead to the further conclusion that all aliens are entitled to enjoy all the advantages of citizenship or, indeed, to the conclusion that all aliens must be placed in a single homogeneous legal classification.  For a host of constitutional and statutory provisions rest on the premise that a legitimate distinction between citizens and aliens may justify attributes and benefits for one class not accorded to the other; …

…

In particular, the fact that Congress has provided some welfare benefits for citizens does not require it to provide like benefits for all alien.  Neither the overnight visitor, the unfriendly agent of a hostile foreign power, the resident diplomat, nor the illegal entrant, can advance even a colourable constitutional claim to a share in the bounty that a conscientious sovereign makes available to its own citizens and some of its guests.  The decision to share that bounty with our guests may take into account the character of the relationship between the alien and this country: Congress may decide that, as the alien’s tie grows stronger, so does the strength of his claim to an equal share of that munificence.

The real question presented by this case is not whether discrimination between citizens and aliens is permissible; rather, it is whether the statutory discrimination within the class of aliens– allowing benefits to some aliens but not to others – is permissible.”[29]

Discrimination

71.  There is in constitutional challenges a developing tendency to adopt a shot-gun approach by which every provision in the Basic Law, the ICCPR, and the Bill of Rights that might remotely be said to touch upon the subject matter at hand is thrown into the pot by the pleader even though only one or two clearly identifiable foundations for the argument readily present themselves. This is an addictive tendency which makes life more difficult for the Court and which ought to be resisted.

72.  What this particular case comes down to, as far as it addresses constitutionality of the impugned decisions and the policy behind them, is the issue of discrimination, and the appropriate umbrella for that issue is art. 25 of the Basic Law, and art. 26 of the ICCPR (reflected in art. 22 of the Bill of Rights) to which constitutional effect is given by art. 39 of the Basic Law.

73.  The term ‘discrimination’ as used in the ICCPR:

“… should be understood to imply any distinction, exclusion, restriction or preference which is based on any grounds such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status, and which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise by all persons, on an equal footing, of all rights and freedoms.”[30]

But such distinctions, exclusions, restrictions or preferences will not constitute discrimination unless:

(1)	the differentiation “involves less favourable treatment of the complainant than that of someone else on prohibited grounds in comparable circumstances’’ or the rule, requirement or condition in issue “impacts disproportionately upon particular groups”[31]; and
(2)	the criteria for the differentiation “are reasonable and objective and … the aim is to achieve a purpose which is legitimate under the Covenant.”[32]

74.  It follows that differentiation in treatment does not necessarily constitute discrimination.[33] If the differential treatment is attached to circumstances or situations which are not comparable, the issue does not arise, for discrimination entails a failure to treat like cases alike[34]. The approach is “not to look for identity of position between different cases, but to ask whether the applicant and the people who are treated differently are in ‘analogous situations’ ”[35]. Even if the circumstances are comparable, the differential treatment will not constitute discrimination, as contemplated by the ICCPR and therefore by the Basic Law, if the difference in treatment is justified, the burden of showing which is on the Government. The weight of that burden will depend on the ground of differentiation: where the ground offends one’s notion of the respect due to the individual such as a ground based on race, gender, religion, or adherence to a political view, scrutiny by the court will be particularly keen, for such grounds are seldom if ever acceptable[36]; where, on the other hand, the ground is not based upon considerations that offend fundamental notions of dignity of the individual but rather on considerations of the general public interest, the margin of appreciation accorded to the legislature or other decision-maker is greater.

75.  The approach thus summarized was explained in Secretary for Justice v Yau Yuk Lung[37] :

“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 566C:

“Like cases should be treated alike, unlike cases should not to 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 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 at 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 208B-C (Ma CJHC) and in Leung v Secretary for Justice [2006] 4 HKLRD 211 at 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.”

76.  The two stage approach –are the cases alike and, if so, is the differential treatment justified – is technically the correct one but in practice the stages often overlap and the questions resolve themselves by addressing the single issue of justification.

77.  In this particular case, the judge found against the applicants at the first suggested hurdle on the basis, he said, that the situation of the second applicant was not comparable with that of Hong Kong resident women. In that regard I think he erred, because he used the justification advanced to render the situations unlike each other. I am of the opinion that the comparators were in clearly analogous situations. 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. That seems to me to suffice to pass the first hurdle, a conclusion with which neither respondent takes issue.

78.  It is clear also that this case falls within the second category of case referred to by Lord Hoffman in Carson, namely, a case which concerns general social policy. The basis for the differentiation is not here a ground which, as Andrew Cheung J described it in Kong Yun Ming, is intrinsic to the individual, such as race or gender or sexual orientation or religion[38] but depends upon residential qualification, which carries with it all the hallmarks of a ground founded on social and economic policy. That being so, the level of scrutiny is one that recognises that in such questions, the legislature and the policy branch are better equipped than are the courts to glean and to assess the range of competing considerations. In such circumstances, the different function of court and policy-maker is highlighted: the policy-maker makes policy, the court decides legality; and in so deciding the court does not determine which policy it would prefer and where it would draw the line – a question essentially one of judgment for the policy-maker and the legislature – but whether the policy adopted falls within a permissible range, by which I mean a range that is rationally justifiable.

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

(1)	that the policy-maker and the legislature have often to determine where a line is to be drawn, that ‘ some line is essential, [and] that any line must produce some harsh and apparently arbitrary consequences’[39]; and
(2)	the danger of examining the subject matter at hand in isolation, without due regard to the fact that competing demands require prioritisation within the constraints imposed by economic realities.[40]

The constitutional point: analysis

80.  Much was said by Mr Chang to the effect that the reasons put forward by the respondents for the impugned decisions smacked of ex post facto rationalization. Lord Pannick, in response, argued that when the Court addresses the question of discrimination, it is to the material placed before the Court, rather than the reasons advanced at the time of the decisions, to which it must look, for the question is whether rights have in fact been infringed and not whether the decision making process was defective: see R(SB) v Governors of Denbigh High School[41]; and Belfast City Council v Miss Behavin’ Ltd[42].

81.  I do not think that Lord Pannick’s answer necessarily resolves the point made by Mr Chang, for if Mr Chang is suggesting that the justification now provided is an afterthought in the sense that the justification advanced is a fabrication, then that suggestion is relevant to the constitutional challenge for, absent justification, the policy is, in relation to those in the A2 group, discriminatory. It is however difficult for Mr Chang to advance this argument for there was in the court below no application to cross-examine the respondents’ deponents and one cannot possibly say that any of the respondents’ affirmations or affidavits is improbable on its face.

82.  The characteristic that enables women to be favoured as EPs by the respondents’ policy on the provision of obstetric services is that they are holders of Hong Kong identity cards, which in turn results from the fact that they are resident in Hong Kong, as that status is defined by art. 24 of the Basic Law. Women who do not benefit from the policy and are classified as NEPs fall into four groups:

(1)	those who are not resident in Hong Kong and, accordingly, not holders of HKID cards;
(2)	spouses of HKID card holders but who are not themselves holders of HKID cards;
(3)	spouses of HKID card holders who do not themselves hold HKID cards but who possess two-way permits; and
(4)	spouses of HKID card holders who themselves do not hold HKID cards, but who possess two-way permits and have applied for a one-way permit.

83.  It seems to me that no-one can reasonably suggest that those in the first group have any arguable basis for asserting unjustified exclusion from the benefits conferred by EP status.

84.  The second and third groups are distinguished only by the place whence they hail. The second group, to which the second applicant does not belong, would embrace women other than Mainland women, who live abroad but whose husbands are HKID card holders. The third group are Mainland residents.

85.  It is the fourth group (the A2 group) upon which the argument by Mr Chang has concentrated, for it is the group to which the second applicant belongs and which has the closest ties with Hong Kong, since not only are women in that group married to men who lawfully reside here but they are women who have an expectation, normally, of securing permission to live in Hong Kong permanently.

86.  Mr Chang also pointed out that non-Mainland spouses of HKID card holders enjoy an advantage over their Mainland counterparts in that the overseas non-Mainland spouse who joins her husband to reside in Hong Kong may do so without first seeking and obtaining a one-way permit. The point, though, is one made in passing and the case is not pursued on the basis of an alleged discrimination between Mainland and overseas non-Mainland women.

87.  What distinguishes the second applicant from women who are classified as EPs is her status as a non-resident. The suggestion that by reason of art. 24 of the Basic Law, the second applicant is, and has at all material times been, a lawful resident of Hong Kong is, for reasons I have provided, not tenable. It follows that her immigration status has at all relevant times been that of a visitor, regularly constrained by limits of stay to not more than 90 days per visit and, by reason of reg. 2(1) of the Immigration Regulations Cap. 115A, automatically subject to conditions of stay not to take any employment, not to establish a business, and not to enrol as a student at any educational institution.

88.  There is much in Mr Chang’s submissions, and in the facts upon which they are based, with which most objective observers would sympathise. It is to be noted that a child born on the Mainland who by reason of decent is entitled to the right of abode in Hong Kong may not enter Hong Kong without first securing exit approval from the Mainland authorities and a one-way permit[43]. It follows that but for the fact that the fees payable by those in the A2 group may compel the child’s A2 group mother to go to the Mainland for the birth, that child would escape the one-way permit hurdle and would be enabled to reside in Hong Kong from the time of birth. In this way the policy may be said impact upon family unity. It is in any event difficult to feel at ease with some of the phraseology deployed in the evidence in respect of the A2 group; for example, the contention that heavily subsidized services ‘should not be diverted to non-residents and visitors at the expense of local residents’. The discomfort arises when one places oneself in the shoes of the second applicant and her husband who, as a pair, feel slighted by the implication that they are less deserving than local residents, for they no doubt consider themselves, as a matter of reality and as a family, to be local residents. One can understand as well the grievance which the first applicant, the husband, almost certainly nurtures at the notion that the scheme effectively told him that if he was to avoid charges which he could not afford, he had to send his wife to the Mainland to give birth to their child. To say that the birth of a child is a highlight of any family’s history, an experience that should be unifying and joyful, is to state the obvious, yet those in the applicants’ position will assess what was placed in their path by the 2007 policy as a denial of that experience on the basis of what they see to be an artificial nicety.

89.  All that said, if the aim of the policy at the three stages (2003, 2005 and 2007) was legitimate and the means used to achieve that aim was rationally connected to the aim, the line had to be drawn somewhere and the question that would then remain is whether this Court is in a position to say that the line was drawn at a self-evidently unreasonable point.

90.  The aim of the policy at each of the three stages was, in my judgment, legitimate. The Authority has a statutory duty to provide as high a standard of health care to the residents of Hong Kong as it is able within the resources available to it. Those resources are finite. The resources are intended to be utilized for a variety of health services, only one of which is obstetric care. A balance must be struck in the allocation of the resources available. If the demands upon obstetric services are such that meeting them unacceptably threatens to affect the quality of care provided for other categories of health service, it becomes logical to trim the demands, if that can reasonably be done. Similarly, if the nature of the demands upon obstetric services takes a form which endangers patients or the unborn or newly-born child, it becomes logical to address the cause of the problem.

91.  The history behind the policies towards obstetric services has been rehearsed in this judgment in some detail precisely in order to illustrate the complexity of the problems faced by the respondents. The problems were manifold: unhealthy and dangerous practices; increasing pressure on resources available for obstetric services; a strain on capacity; the threat of having to divert resources needed for other types of medical care; and a threat to the quality of available obstetric care in public hospitals. The aim of the impugned measures was to tackle these problems and it seems to me self-evident that the measures adopted were rationally connected to those aims.

92.  Did they go further than reasonably necessary? This is a judgment call and the more the argument before us descended into the fine detail of what measures might have been taken instead, the more it seemed to me that this Court was being asked to play the role of policy-maker, to guess what impact one course might have had rather than another, and to approach the case as if it were a merits-based appeal.

93.  The line drawn, that of lawful residence, is not an unusual line to draw when it comes to social policy and to the conferring of publicly subsidized benefits. We see from the cases in this and other jurisdictions how often that is the line which is drawn and we see from this jurisdiction itself that with other benefits such as housing benefits, the residence bar is set even higher than in the case of the policy now impugned; and that there are other benefits to which those in A2’s group are not entitled, benefits which carry economic advantages, such as the right to engage in work. The choice of a residence bar is not illogical. It may work harshly in individual cases but that fact does not render the policy illegitimate or unjustified. It is an acceptable test or line because those who provide public funds are themselves residents, because public funds are intended to be used for the benefit of residents, and because those with the closest connection to Hong Kong and who have settled in and have themselves contributed to the community, are fairly seen as having a claim ahead of those who have not yet settled here, even if they intend to do so.

94.  I accept that, in the present context, that is to isolate the second applicant from her family members who are settled here and that the benefits of which we speak, if accorded to her, would assist not only herself but also those members of her family who in reality foot the cost of her care if she chooses to give birth in Hong Kong, and who have established themselves in this community.

95.  The point was made – indeed argument on the applicants’ behalf eventually focused on the point as crucial – that the line has been finely drawn, excluding from affordable obstetric services those in A2’s group whose ties to Hong Kong are effectively as strong, it is said, as that of women who are themselves HKID card holders, the only difference being that those in the A2 group have not yet been granted the one-way permit even though it has been applied for. In support of this argument, emphasis wasplaced on the suggestion that neither respondent had ascertained the numbers within that category; so how, it was asked, could it be said that their exclusion from the EP group went no further than was reasonably necessary?

96.  There is an obvious advantage both to the administrators of a policy once formulated, and to those who are affected by the policy, in clarity and certainty. To draw the line at the holding of a HKID card carries that distinct advantage. In relation to a line drawn at a particular age, it was argued in Carson that the line drawn in that instance (a lower benefit for someone aged under 25 years than aged 25 years or above) was arbitrary and that there could be no relevant difference between a person the day before and the day after his birthday, as to which Lord Hoffman said:

“That is true, but a line must be drawn somewhere.  All that is necessary is that it should reflect a difference between the substantial majority of the people on either side of the line.  If one wants to analyse the question pedantically, a person one day under 25 is in an analogous, indeed virtually identical, situation to a person aged 25 but there is an objective justification for such discrimination, namely the need for legal certainty and a workable rule.’[44] (Emphasis added)

97.  To draw the line, as has been suggested, so that those who have applied for a one-way permit are categorised as EPs would be no less certain in terms of ascertaining who has and who has not applied, but it takes little imagination to see the uncertainty that would attend the consequences of such a policy. Applications would inevitably increase and include those who are not entitled to a permit as well as those who had no intention of settling in Hong Kong in the event of its grant. It is to be remembered that that the majority of NEP births in Hong Kong public hospitals since 2002 have been of babies whose fathers are Hong Kong permanent residents, that that proportion dropped dramatically in 2007 and that the evidence discloses an assessment that marriages between Mainland women and Hong Kong residents is likely to become more prevalent as time passes.

98.  The policy impugned is one that is said to ignore the impact on family unity and we were taken to a passage in the minutes of a meeting of the Panel which, if accurate, suggests that the second respondent did not take that impact into account. It is however difficult to conclude that that was ignored, given the obvious ramifications of the policy, the voices raised on behalf of families, and the fact that the same minutes attribute to the second respondent’s representative the emphasis on the one-way permit as a vehicle to facilitate family reunion. It was also suggested that the policy-makers did not consider making a distinction between one-way permit applicants and others, but that is not correct: that the idea of a two-tier structure was addressed is evident from the April 2007 paper to which I have earlier referred.[45]

99.  The policy under challenge has been and remains controversial, exciting bitterness and passion on the part not only of those directly affected but on the part also of those who support their cause. However, it bears repeating that it is not within this Court’s remit to substitute its views for those of the policy-makers. The Court’s remit, on the constitutional limb of the case, is to determine whether such differentiation in treatment as is represented by the policy, as that policy has in its separate stages evolved, has a legitimate aim, is rationally connected to that aim and, within the margin of appreciation accorded to the policy-maker in such socio-economic matters, is reasonably justifiable, remembering that the burden of satisfying the Court on each limb rests upon the respondents. For the reasons I have given, I am satisfied that that burden has been discharged.

Articles 36 and 37

100.  We were presented with no fewer than 33 grounds of appeal in response to which the Court asked those acting for the applicants more precisely to refine the issues for this Court’s determination. That was done. Under the constitutional challenge, there would appear to be a limb with which I have yet to grapple. The 2007 decision is said to fall foul of arts. 36 and 37 of the Basic Law. In this regard, the appeal focuses on the child.

101.  I am not sure whether I understand the argument correctly in this regard. In the ‘issues clarification’ document with which we were presented it is put thus:

“[The 2007 decision breaches] arts 36 and 37, because of breach of the equality provisions; and as regards [art] 36, because charges did include fees incurred in respect of permanent resident child in delivery room before being taken to ward.  Further, as regards [art] 37, it was a disproportionate infringement of [the applicants’] right to family life.”

102.  The suggestion in relation to art. 36 seems to be that there is unjustified differentiation in relation to charges levied in respect of a child born in Hong Kong of a non-resident Hong Kong mother (an NEP mother) but a Hong Kong resident father. The comparison is with a child born of a mother with EP status. Art. 36 is said to be breached in relation to the child because, so it is said, the charges levied under the 2007 policy include fees incurred in respect of a permanent resident child in the delivery room before the child is taken to the ward.

103.  The factual premise upon which the argument appears to be based is misconceived. The evidence is that the NEP obstetric charges relate solely to the care services received by the mother. For newborn children who themselves have EP status (such as the child of the second applicant) there are no charges under the 2007 policy for their stay in the nursery before the mother is discharged, but a charge is levied if the child cannot be discharged at the same time as the mother though at half the fee appropriate to the type of bed occupied. Newborn babies who are themselves of NEP status at birth are charged nursery maintenance fees even before the mother is discharged and the full appropriate fee thereafter.[46]

104.  I understand the sentiment that the impugned policy may in particular cases affect family life in that the fees may be a burden on a family and may force the family into financial hardship if they choose to have the birth in Hong Kong or to split the family at the time of birth if they decide that the mother needs to return to the Mainland to give birth. I do not however see this as a breach of art. 37.

105.  It is not necessary in this case to ponder the parameters of the protection guaranteed by art. 37 and by the similar protection afforded by art. 23 of the ICCPR (art. 19 of the Bill of Rights Ordinance). These Articles underscore the prominence of the family in our social setting, a “vital nucleus” of society to be safeguarded for the welfare of the society itself so that “the state and society are obliged to guarantee, by law, the existence of the family and the opportunity to create one by natural or contractual union”[47]; an obligation that carries with it concomitant protections (for example the protection of children, protection against forced marriage, and protection of the property rights of spouses). But the rights to marriage and to raise a family are not rights without boundaries set for the benefit either of the family or of society in general. In the full context of the Basic Law and its setting, art. 37 cannot have been intended to confer on spouses a right to free obstetric services in this jurisdiction for their non-resident marriage partners. The possible ramifications of such a proposition have only to be considered briefly to appreciate why that would be a non-purposive interpretation. At the end of the argument, therefore, what remains is the question, which has already been answered, namely, whether the policy which differentiates between, on the one hand, applicants in the A2 group and, on the other,EPs is discriminatory, as that concept is in law properly understood.

The ‘Padfield’ ground

106.  Although, as far as I can tell, this does not feature in the list of clarified issues which we were given, there is pursued a ground of appeal to the effect that the policy adopted contravenes the legislative purpose or imperative suggested by s. 4 (d) of the Hospital Authority Ordinance, so asto offend the principle in Padfield v Minister of Agriculture, Fisheries and Food[48].

107.  Section 4, as we have seen, requires the Authority to “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 shall be prevented, through lack of means, from obtaining adequate medical treatment.” (Emphasis added).

108.  It is said by Mr Chang that s. 4(d) is a cornerstone of the Ordinance. The argument has been articulated thus in the skeleton argument:

“On [a] true construction of s. 4(d), the [Authority] must not recommend fee levels for the use of hospital services ‘by the public’ that would have the effect or intended effect or of depriving people of adequate medical treatment because of lack of means.  The section makes no distinction between residents and non-residents but even where a legitimate distinction is made, the policy (even assuming constitutionality) must not be implemented without regard or proper regard to the differences and similarities between the various categories of persons affected and other relevant circumstances.”

109.  I do not, with respect, think that this argument holds water for the purposes of this case. One has only to glance a few lines above sub-section 4(d) to note in sub-section (c) that the Ordinance imposes upon the Authority a duty efficiently to manage and develop the public hospitals system “within the resources attainable” and then to glance a few lines below sub-section 4(d) to sub-section (g) to note a duty imposed upon the Authority to “charge fees for the provision of hospital services”. Section 18 provides a mechanism for the determination of the fees and makes provision for the reduction, waiver or refund of fees either generally or specifically. Properly read, section 4(d) does not impose a duty to provide free medical treatment, unqualified by any circumstances. The principle to which reference is made in subsection (d) is aspirational, though important and consonant of course with the ethical approach one would expect of the medical profession. But it seems to me that the applicants take the matter too far in suggesting that the emphasised provision renders the policy adopted contrary to one permitted by the intention of the legislation.

Wednesbury

110.  I have found difficulty in pin-pointing the complaint under this head. The argument before us under this limb seemed to concentrate on the suggestion that in relation to the 2007 decision, the decision-maker(s) did not take into account the likely impact of the policy upon the family as a whole and concentrated instead exclusively on those in the position of the second applicant.

111.  This was not an omission on the decision-maker’s part that was pleaded quite in that way in any of the versions of the notice of application for leave that periodically emerged and I accept Lord Pannick’s submission that this was why the respondent did not file evidence in answer to it. In the re-re-amended notice of application for leave, the Wednesbury ground is put on the basis that “the [2007] decisiondoes not consider and/or does not sufficiently consider the constitutional guarantees conferred onto the first applicant and his family. A reasonable person, equipped with the knowledge of the constitutional guarantee conferred onto the applicants, would not have arrived at the decision at all.”

112.  If my conclusion upon the constitutional argument be correct, namely, that such constitutional guarantees as exist are not infringed by the decision, it follows that it cannot logically be said that a reasonable person equipped with knowledge of the constitutional guarantees conferred on the applicants or upon either of them or upon their child could not have arrived at the impugned decision.

113.  Insofar as it might be implicit in the re-re-amended notice of application that the decision-makers have not shown that in coming to their decision they were conscious of such constitutional rights as were engaged, the argument is an echo of the one rejected in Belfast City Council v Miss Behavin’ Ltd[49]. There, too, it was said that the decision was “unlawful unless it was inevitable that a reasonable council which instructed itself properly about [European] Convention rights would have reached the same decision,” as to which Lord Hoffmann said:

“This approach seems to me not only contrary to the reasoning in the recent decision of this House in R(SB) v Governors of Denbigh High School [2007] 1 AC 100 but quite impractical. What was the council supposed to have said?  ‘We have thought very seriously about your Convention rights but we think that the appropriate number of sex shops in the locality is nil’?  Or: ‘Taking into account article 10 and article 1 of the First Protocol and doing the best we can, we think that the appropriate number is nil’?  Would it have been sufficient to say that they had taken Convention rights into account, or would they have had to specify the right ones?  The construction of the 1998 Act which requires ordinary citizens and local government to produce such formulaic incantations would make it ridiculous.  Either the refusal infringed the applicants Convention rights or it did not.  If it did, no display of human rights learning by the Belfast City Council would have made the decision lawful.  If it did not, it would not matter if the councillors had never heard of article 10 or the First Protocol.”

Waiver

114.  The final question put to us for determination was as follows: Were the refusals of the respondents to waive fees for the second applicant a proper exercise of the discretion under the Ordinance?

115.  Poon J categorized this ground of complaint as one which contended that: “The refusal to exempt the second applicant from NEP obstetric charges is unlawful because it is no more than a blanket application of the [2007] Decision.”[50]. The learned judge held that the decision, based as it was on residence, served “to promote legal certainty and to avoid the problems of arbitrariness and inconsistency inherent in weighing on a case-by-case basis.”[51]

116.  As we have seen, s. 18(3) of the Ordinance specifies that subject to any directions given to it by the Secretary for Food and Health, the Authority may specify, either generally or specifically, the circumstances in which a fee for a hospital service provided by a public hospital may be reduced, waived or refunded, in whole or in part.

117.  In February 2003, the Secretary for Health, Welfare and Food,directed the Chief Executive of the Hospital Authority and the Director of Health that as from 1 April 2003, non-residents who were the spouses of HKID card holders would be charged NEP rates. In the Gazette notice in 2003 which gave notice of the list of public charges for services in public hospitals, the Chairman of the Authority stated that the Authority had determined that: “The Chief Executive of the Hospital Authority may, subject to the Hospital Authority Ordinance, in any case reduce, waive or refund in whole or in part any fee for a hospital service provided by public hospitals.” No contrary direction, depriving the Authority of its power to waive fees in individual cases, has ever been issued by the second respondent.

118.  It is accepted on behalf of the first respondent that the Ordinance confers on the Authority a discretion to waive fees in individual cases. It is further accepted that in the course of 2007, a number of representations were made by or on behalf of the second applicant for waiver of the fees for the obstetric services which had been provided to her. In a letter dated 22 May 2007, the first applicant’s father wrote to the Chief Executive of the Region drawing to his attention, amongst other matters, the hardships that had befallen his particular family. He stated that he and his wife were the parents of two mentally handicapped children, one of whom is the first applicant, for which reason they were particularly anxious that births within the family were preceded by suitable pre-natal care; that the fees charged were, in the family's economic circumstances, prohibitive; and that the second applicant had fallen ill and was bedridden.

119.  This letter was passed to the second respondent on whose behalf a reply was sent in June 2007 commenting that the adjusted charge for package obstetric services was applicable “to any person who is not a HKID holder and who is the non-local wife of a local resident. To confine that only to Hong Kong residents are entitled to the heavily subsidised public medical service is in line with the current population policy of the government. The new arrangements have won initial success. We have no intention to amend or withdraw the recently revised measures and arrangements including the newly implemented obstetric service package charge for ‘non-eligible persons’ ”.

120.  As one sees, there is no acknowledgement there of any discretion to waive fees and no intimation of any consideration of the applicants’ individual circumstances.

121.  By letter dated 13 June 2007, the Director of Legal Aid wrote on behalf of the applicants to the Authority, drawing to its attention that the charges were so prohibitive to the family that they would not be able to afford pre-natal examination and asked whether the Authority had a discretion to waive or to reduce the fees and, if so, what were the criteria for its exercise.

122.  The reply to the letter, from the Hospital Authority, came months later, namely, on 5 September 2007 when a Dr Cheung on behalf of the Chief Executive of the Authority said that: “There is no waiver of the above fees for NEPs receiving obstetric services including delivery, antenatal and postnatal care.” Nothing in the remainder of the letter qualified that statement.

123.  There was other correspondence before September 2007 between the second respondent and the first applicant’s father which takes the matter no further in that that correspondence contains no recognition of a duty to consider waiver.

124.  It is in my judgment obvious that the approach of the Authority to the question of waiver in individual circumstances was not lawful. The power vested in the Authority to charge fees and the policies formulated in exercise of that power permitted of the exercise of a discretion; yet what happened was that the Authority shut its mind in such a way as to fetter or exclude that discretion. The result was that the policy, thus approached, was inevitably destined to dictate the outcome of any application made to the Authority. That is what happened in the instant case.

125.  It follows that in so approaching its duty, the Authority’s decision in response to the applicants’ request for waiver of the fees was unlawful:

“What is required by the law is that, without falling into arbitrariness decision-makers must remember that a policy is a means of securing a consistent approach to individual cases, each of which is likely to differ from others.  Each case must be considered, therefore in the light of the policy but not so that the policy automatically determines the outcome.”[52]

126.  Lord Pannick realistically accepts that the approach adopted by the Authority in 2007 in response to requests for waiver of fees cannot be sustained. He accepts that, but for the question of the Court’s discretion, the decisions in 2007 not to waive the fees fall to be set aside.

127.  The basis upon which it is argued that relief should not be granted isthat, so it is said, the issue has since properly been addressed. For this purpose, reliance is placed upon the affidavit of Mr Shane Solomon, Chief Executive of the Authority sworn on 13 May 2008. In it he says that in September 2007 and thereafter it remained “the general policy of the 1^st Respondent not to waive the 1^st respondent’s obstetric package charge for NEPs. However as the Chief Executive of the 1^st respondent, I have a discretion to, in any case, reduce, waive or refund in whole or in part any fee for a hospital service provided by public hospitals”, in which regard he refers to paragraph 6 of the Gazette Notice 44 of 2003 to which I have earlier referred. He adds:

“7.  I consider that I should only exercise my above-mentioned discretion to depart from the general policy of no waiver of the obstetric package charge for NEPs in exceptional circumstances, otherwise the objectives of the obstetric package charge for NEPs would be defeated.

8.  I have considered the case of [the second applicant] according to the evidence put forward by the applicant, including the fact that [the second applicant] is married to the applicant and the applicant is a permanent resident in Hong Kong, that [she] is financially dependent on the applicant and [his father] who themselves are recipients of comprehensive social security assistance and that the child born to [the second applicant] has the status of a permanent resident of Hong Kong.

9.  I do not think that there are exceptional circumstances in [the second applicant’s] case to justify a departure from the general policy of no waiver… .  To allow an exception to the general policy for [her] case would tend to frustrate the objectives of the obstetric package charge for NEPs.

10.  I have only come to reviewing the individual case of [the second applicant] since 5^th May 2008 because, prior to that date, the applicant has not pursued the issue of waiver in this action.”

128.  It is authoritatively said that:

“The general approach ought to be that a claimant who succeeds in establishing the unlawfulness of administrative action is entitled to be granted a remedial order.  The court does, however, have discretion – in the sense of assessing ‘what it is fair and just to do in the particular case’– to withhold a remedy altogether … . But the requirements of the rule of law mean that ‘the discretion of the court to do other than quash the relevant order or action where such excessive exercise of power is shown is very narrow’.”[53]

129.  In my judgment, this is not a case in which it would be appropriate to refuse relief. This is a case in which the applications for waiver were addressed in a manner which must have been perceived by the applicants, understandably, as entirely impersonal and without regard to their own circumstances. The affidavit of Mr Solomon makes no reference to two of the matters peculiar to this family and to the second applicant – namely, the family history of mental handicap and the length of time over which the second applicant has been a regular visitor to Hong Kong, each time for extended periods, to be with her family. The fact, as we have been given to understand, that the mental handicap occasioned to more than one child born to this family was as a result of problems with delivery, rather than genetically caused, is really not to the point. Moreover, neither applicant was informed by the Authority that the application for waiver of fees was under reconsideration or invited to make further representations for the purpose of that reconsideration. Given the history of correspondence, one can safely assume that fresh representations would have been made, drawing specific attention to factors peculiar to this family and bringing the Authority up-to-date with their circumstances.

130.  In my judgment, there ought to be fresh consideration of the application for waiver or reduction of fees, enabling the applicants to make such representations as they wish.

Conclusion

131.  Accordingly, for the reasons I have provided, I would, as did the judge below, reject such challenges as have been made in these proceedings to the validity of the decision in 2003 to categorise those in the second applicant’s group as NEPs and to the charging policies that were promulgated in respect of NEPs in 2003, 2005 and 2007. However, I would allow the appeal on the single issue of waiver and set aside the refusals by the first respondent in 2007 to waive or reduce the fees to be levied upon the second applicant in respect of the obstetric services to be provided in relation to the birth of her child later that year. I would remit the matter to the Authority to address that issue afresh, according to law.

132.  In relation to costs, the respondents have succeeded to the extent I have indicated, a success attributable to a large proportion of the argument. On the other hand, the applicants have succeeded on the waiver issue, a matter of individual significance to them. I would therefore make an order nisi that (1) the order in the court below, by which the respondents were awarded their costs against the applicants, be set aside; (2) that there be no order as to costs of the application for judicial review; and (3) that there be no order as to the costs of this appeal.

Hon Andrew Cheung J:

133.  I agree with the judgment of the Vice-President and the orders he proposes. I only wish to add something by way of a footnote.

134.  At one stage, I was inclined to the view that the 2007 decision to raise the obstetric fees from $20,000, which represented the cost of the services, to $39,000 (or $48,000) was unjustifiable because it failed to take into account the closer connection to Hong Kong that those within the A2 group have than those non-EPs who do not fall within the A2 group. Without differentiation, all non-EPs were required to pay an inflated fee which went beyond cost recovery in order to obtain obstetric services. On the 2006 statistical figures, it would appear that some less drastic way could have been worked out to deal with the problems then faced by the respondents without lumping those within the A2 group together with the other EPs. In particular, the surplus delivery capacity of the hospitals (after taking care of all EPs) would appear to be sufficient to absorb the entire A2 group, provided that appropriate administrative measures were put in place to give those in the A2 group priority for services over all other non-EPs.

135.  However, on more mature reflection, this is an over-simplification of the picture. The decision-maker was entitled to take a longer perspective of the problems he or she faced. Unused surplus capacity and resources could be re-deployed for other or better use. Possible administrative difficulties and abuse if a more complicated scheme was to be adopted should not be under-estimated. All these – and there were others – were matters that the decision-maker was entitled to take into account. Given the societal economical context, the Court should not lightly interfere with the resulting decision on the ground of discrimination.

136.  One additional consideration here is the existence of a real discretion to reduce or waive fees in deserving cases. That would alleviate the hardship that might otherwise be caused to those within the A2 group who could not afford to pay the new fees. The fact that the pregnant woman belongs to the A2 group is a factor which should be given due weight in considering an application for a reduction or waiver of fees.

137.  Having considered the matter in the round, I am not prepared to say that the 2007 decision failed the justification test.

Hon Bharwaney J:

138.  I agree with the judgments of Stock VP and Andrew Cheung J.

Hon Stock VP:

139.  Accordingly, the appeal is allowed to the extent only that the order declining to bring up and quash the decisions in 2007 by which the Authority refused to waive the fees payable by the second applicant is set aside, those decisions are quashed and the request for waiver is remitted to the Authority for fresh consideration. There will be a costs order nisi in the terms specified in paragraph 132 above.