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Percy Lo-Kit Chan
5 October, 2009  
Letter from Honkers

Government “tampers” with judicial salaries … While Ernst & Young tampers with collapsed company documents … Legco’s power to call witnesses upheld … Percy Lo-Kit Chan reports


imageThe inability of a government to reduce the salaries of sitting judges is frequently regarded as a foundation of judicial independence.

In the HKSAR the salaries of some senior civil servants have been reduced by almost percent a year in response to the GFC and deflation which has struck Hong Kong.

Would the administration attempt to do the same thing to the judges?

Not exactly. Rather, a “pay freeze” as recommended by the Standing Committee on Judicial Salaries and Conditions of Service has been put into effect.

In coming up with this formulation the committee noted that some overseas jurisdictions have a constitutional or legislative protection against any reduction in judicial remuneration.

The retiring CJ is paid almost HK$242,000 a month (the HK dollar, which is pegged to the US dollar at 7.8 to 1 has been sliding against the Aussie over the last three months to the chagrin of every local with Australian remittances to make!).

That works out at about AUD$450,000 a year (plus perquisites) on a modest tax rate, but still does not begin to equate with the earnings of a top silk.

Unsurprisingly, the senior civil servants association has asked for their own work to be similarly regarded, no doubt with a view to circumventing the mooted forced reduction in pay that has yet to come into effect.

* * *

What is the extent of the power of the HK Legco to summon witnesses and compel the production of documents before a select committee?

Does it have the full armoury of inquiry weapons that, say, Australian parliaments do?

An inquiry has been continuing for some time regarding the wisdom of a large land developer employing at a senior management level a former Director of Housing.

Various potential witnesses had contended that the committee lacked the power to require them to give evidence.

This would no doubt have stymied the inquiry and greatly reduced its effectiveness – in much the same way that narrow terms of reference worked to hamstring Commissioner Clarke’s inquiry into the Haneef affair.

The Court of First Instance has rejected any suggestion that the Legislative Council lacks the requisite powers.

In particular, the notion that Article 73 of the Basic Law meant that only Legco as a whole with a 50 percent quorum could compel attendance was discountenanced.

There may well be an appeal but at least for the present the rule of law has been considerably strengthened by the decision.

* * *

It is always a risky decision to open “high” in any civil claim.

Such an approach, however, has paid off handsomely for the liquidators of electronics group Akai, which collapsed spectacularly some years ago.

A claim against the accountants, Ernst & Young, commenced in bravura fashion before Justice Stone with the liquidators’ leading counsel alleging that various defence documents and reports, vital to its case, had been tampered with and altered.

The matter settled on confidential terms without any of the allegations being investigated by the trial judge but the Commercial Crimes Bureau is now involved in questioning senior staff at the accounting firm (and arresting one of them who was subsequently released with no charges laid as yet).

It would seem to have been inevitable that the alterations (some of which were said to have been made with “white out”) would come to light.

What is more surprising is that the alterations were only “discovered” virtually on the eve of the trial when for the first time solicitors for the plaintiffs obtained access and examined in detail the original documents, rather than the photocopies originally supplied.

Percy Lo-kit Chan