Lai See
PUBLISHED : Wednesday, 14 August, 2013, 12:00am
UPDATED : Thursday, 15 August, 2013, 2:24pm

Impatience over the slow pace of implementing law reforms

BIO

Howard Winn has been with the South China Morning Post for two and half years after previous stints as business editor and deputy editor of The Standard, and business editor of Asia Times. His writing has also been published in the Far Eastern Economic Review, the Wall Street Journal, and the International Herald Tribune. He writes the Lai See column which focuses on the lighter side of business.
 

We have heard some muttering about the pace of implementing recommendations made by the Law Reform Commission. There is a feeling that while the commission does good work, the amount of time the government's policy bureau takes to make the changes is getting larger.

The extent of the problem is laid out in a paper presented to the Legislative Council Panel on Administration of Justice and Legal Services in June.

It starts by noting: "Law reform plays an important role in any society which aspires to maintain the rule of law. As our society evolves and new challenges arise, our laws have to change so as to meet the needs of society."

Following a brief outline of how the commission works, there is a table of recommendations showing when they were published and how long it took for them to be implemented.

The commission started its work in 1980 when implementation generally took six months to four years with some exceptions. Implementation in the early 1990s took between one and five years.

An exception was the recommendations dealing with sales descriptions of flats and pre-contractual matters, which was published by the commission in April 1995 and implemented 17 years later. Efforts to introduce Hong Kong's version of Chapter 11 have so far taken 18 years and still have not been implemented.

There was a recommendation in 1998 for civil liability of unsafe products that never made it to the statute books after encountering opposition from trade representatives.

The Financial Services and the Treasury Bureau has been fiddling with the commission's recommendation on insolvency, published in 1999, for 14 years and is still not finished. The Commerce and Economic Development Bureau has spent 10 years over contracts for the supply of goods. The list goes on.

It would be harsh to say civil servants are too busy exploiting their perks, privileges and housing arrangements to do their jobs properly. Admittedly, the chaos in Legco has not helped, but the slowing pace of law reform is going to undermine Hong Kong's rule of law and its claim to being Asia's world city.

 

Another Annells investigation

Another leading professional body has started an investigation into the business practices of Hong Kong-based tax consultant Deborah Annells. The founder and managing director of AzureTax, she was last month found to have committed six instances of dishonesty by the disciplinary tribunal of Britain's Chartered Institute of Taxation (CIOT) and was expelled. The Hong Kong Institute of Chartered Public Accountants (HKICPA), of which she is a member, subsequently started an investigation to determine whether she should face disciplinary proceedings.

Annells is also a member of the Society of Trust and Estate Practitioners (STEP), which has confirmed that it has launched a similar investigation. STEP is a worldwide professional association for practitioners dealing with family inheritance and succession planning.

The chief executive of the organisation, David Harvey, said in an e-mail: "I can confirm that a judgment such as this against a member from a body of CIOT's standing will normally lead to a full disciplinary process, an investigation prior to this possible action has been launched."

In one of the instances cited by CIOT, Annells was found to have dishonestly used trust funds entrusted to the care of AzureTrustees to make payments of HK$5.2 million that were not for the benefit of any of the beneficiaries of the trust, although no trust moneys were ultimately lost.

The client in this case had to sue her to get the money back. Annells admitted "mistakes" had been made but denied acting dishonestly. She was arrested by police in December 2011 and has been on bail since then.

The events surrounding AzureTrustees have highlighted the need for tighter regulation of the local trust industry. A particular weakness has been that complainants have had to go to Britain to get their complaints heard, while the financial secretary, who has the power to appoint an inspector, and the HKICPA declined to act on the same evidence, which resulted in CIOT's findings and Annells' expulsion.

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