Wednesday, 4 December 2013

Dissenting Thoughts about Quistclose Trust

If we compare those two cases, Quistclose and Twinsectra, carefully, we will find that the concept of ‘primary trust’ maybe problematic. The loan in Quistclose is for the purpose of paying dividend to shareholder. However, in Twinsectra, the loan is used for the purpose of buying some property.So, looking at these two loans from the perspective of commercial practice. There should not be any substantial difference.

Nevertheless, if we want to apply the ‘primary trust’ concept, we can’t apply in a consistent way.
In the Quistclose scenario, the shareholders are the beneficiaries. But in the Twinsectra scenario, the two-tier analysis is incapable to be applied, because we can’t find any beneficiary other than the Lender. Thus, according to Lord Millett, only one resulting trust is enough, there is no need to split into a primary one and a secondary one.

Besides, there is another problem. Lets look at this situation, where a lender said “I lend $100 to B to do its business. The purpose that I lend the money to B is that B promised to me that I will get 10% interests. So, in total, I can get $110. Otherwise, I wouldn’t lend the money to B.”

Then, the question is that should a Quistclose trust be imposed in this situation when the lender says he has a purpose? If YES, I believe every commercial loan has some purposes. If NO, wouldn’t there be a risk to cause unfair preference?

Friday, 19 July 2013

Independence of Lawyers from a Mathematical Perspective

Today's tutorial topic in the course of PRC Legal System is about the current status of legal education and the legal profession in the PRC. At the end of the presentation, Prof asked the presenting team a question, "what is the meaning of independence of lawyers, and why do you think independence of lawyers is necessary?". One of the team answered that it is because the independence of lawyers can help avoid conflict of interests, for example, the conflict of interest b/w the state and the lawyer's client. However, it seemed that Prof was not quite satisfied w/ the answer. He was of the opinion that lawyers' independence is not a prerequisite to achieve the best practice. He said "the independence of lawyers is not part of law or constitutionalism"

I agree w/ the prof from the perspective that if the State's interest is in the same line with its citizens' interest, then lawyers are not necessarily required to exercise their duties independently from the state. In such context, lawyers will be forced to do their jobs for the best interesting of their clients, even though they are obliged to serve the interest of the State at the same time.

But when we think this point in a mathematically way. We will find the fundamental flaw in this argument. First, it will be hard to sum up what is the interest of a state. The state government is divided into different divisions in different levels, and every single level of division is implementing the policy made by the central government in varying ways. Moreover, all governors and civil servants are simply humans who have their own interests. All these interests are interweaving with the so-call state interests. So, what is exactly state interest? Maybe no one can answer. It is also clear that people have competing interest against each other under the complicated social system. Hence, there are possibilities of conflict of interest b/w people who are governing the state and some people who are governed. Under such a situation, suppose lawyers are strictly regulated by local government, and a citizen are just suing a governor of the government, will the lawyer , who are representing the citizen as his client, take into consideration of the influences of the case on his own? If so, it may become unfair to his client as the lawyer may not try his best to fight for the best interest for this client. Keep in mind that we are talking about probability, which means if a lawyer, who is 90% percent independent from all other parties, are only required to exercise his duty in accordance with the law; And, all other factors will affect the result are 100%  perfect. Then, the court system will decision 90% of all the cases fairly. Which means, if there are 10000 cases involves citizens suing other people who have a direct or indirect relationship with the government, 9000 of them will get a fair judgment. However, if a lawyer is required to serve the best interest of the party and the government, and will be liability if they does not choose so, then the independence of lawyer will be lowered, let's make a assumption as example, to 70%. Then, 3000 of 10000 cases will not get fair results.

Although the above computation is too naive and simplified, it at least represents that there is a positive correlation b/w the independence of lawyers and the good running of our justice system. Furthermore, there may be reasons to protest against democracy as it is a more abstract idea and defects in several ways. But I really don't see any rational to protest against the independence of lawyers. If one way is less risk in causing unfairness, why shall we choose another way?

Monday, 22 April 2013

Judicial Review and Non-Judicial Control

Here is a hypothetical case based on the facts in LEUNG Chin-man controversy: Andrew is a former government official in charge of land development. He retired in July 2008 and joined the Good Old Days Group (GOD) which bidding for a project development successfully during the term of Andrew. The Code of Conduct for Civil Servant states that any former civil servant who wants to join the business sector after their retirement must get an approval from the Committee of Civil Servant Retirement. According to the code of conduct, it requires the applicant to attach a certificate of declaration of interest with the application form. Furthermore, the approval must be signed by Chairman F, who is Andrew's father-in-law, and other 3 members from the Committee of Civil Servant Retirement. In 2010, Andrew's approval to join GOD was signed by 4 committee members including Chairman F. However, no declaration of interest was provided. Andrews was soon challenged by the public that he has a conflict of interest w/ GOD as he was the former official in charge of approving the project of land development. Rumors forced LegCo to form an investigation committee to hear this case. Later it was found out that legislator C, who was one member sitting in the investigation committee, was an employee of GOD and dismissed 2 years ago, did not declare conflict of interest in the investigation. After the hearing, the investigation committee produced a report saying that Andrew did have a conflict of interest w/ GOD.

The first question come to us is whether the LegCo's decision, which formed the investigation committee, is subject to judicial review. A simple answer is yes. LegCo is obviously a public authority,  and the decision to form a public authority is for the purpose of public benefit. The affected parties will undoubtedly be Andrew and GOD because their reputation will be damaged due to the report. The problem is, according to the decision of Cheng Kar Shun case, appointing a Select Committee is the practical need for the LegCo to fulfil its duties and exercise its powers. And the doctrine of separation of powers requires a court not to intervene the internal management of the Legislative Council. So, is the delegation of its power to an investigation committee subject to the jurisdiction of any court. In the first place it seems, there can be no review of the legislature. However, s.23 of Legislative Council (Powers and Privileges) Ordinance states, 'The council, the President or any officer shall not be subject to the jurisdiction of any court in respect of the lawful exercise of any power conferred or vested in the Council'. This provision would not seem to preclude an examination of unlawful exercises of power by the Council or the President. So Andrew and GOD have strong standing to apply for a judicial review because the delegation may be ultra vires in the aspect of natural justice. They can focus mainly their grounds on rules against bias, because Legistor C should be automatically disqualified.

Besides the decision made by LegCo, it seems there are two other decisions. One is approval made by Andrew involved in the land project. Another is the approval allowing Andrew to join GOD.

Due to the lack of facts, we will not consider the first decision which allowed the land project. The second seems more interesting because it affected nobody's interest immediately after the decision. All the parties involved in that approval, like Andrew, his father-in-law and GOD, were seemed beneficiaries. So it would be very likely that nobody would trouble himself to sue, then there would be no judicial review at all. To address this problem, we can break the discussion into two parts. In the first part, we will seek a practice way to deal w/ such kind of irregularity; In the second part, we will check whether there is really no possibility of judicial review.

Before the discussion, let's recall what is the central aims of judicial review. In simple words, it is for the object of a good administration. This includes ensuring that the government is fair in procedure and acting in the public interest in decision-making. However, judicial review is not the answer to all administrative problems due to its limitations in various aspects. In these situations, there can be other types of practical non-judicial control on government to promote good administration. To better illustrate how this non-judicial control works, the background of the New World case - Tang Chin-man controversy should be checked. Like approval in Andrew's case, the Secretary of Civil Servant, Yue Chung-yee signed the approval for Mr. Leung to take up the job in New World Company. Also, this caused public outcry amidst widespread suspicion of conflict of interest. The pressure of that outcry forced Chief Executive to ask Yue to explain. And about one week later, Yue submitted a report admitting that she had not taken into Mr. Leung's role in Hung Hom Peninsular project when approving his appointment. By reading her report, Chief Executive said, "OK, then you need to reconsider the approval". And the next following day, Mr. Leung resigned from the New World Company. So, we can see that unlike judicial review, which can be a long and expensive process, the non-judicial mechanism is very efficient. In the Leng Chan man controversy, it just spent half a month to achieve the result which has the same effect like certiorari and mandamus. Another thing should be noted in the controversy is check and balances and separation of powers. Although LegCo intervened later, and spent almost two years to produce a report saying that there was serious conflict of interest b/w Mr. Leung and New World Group, and asking Yue to be fully responsible. However, Chief Executive neglected the report because he thought Yue's apology is enough, and he would not seek for her resignation. So, it shows that LegCo cannot replace the Chief Executive's decision w/ its own decision.

Nevertheless, sb may ask whether non-judicial control is the only way to address the issue. Arguably, because Chairmen F seems exercised their power unlawfully, I think it is still amenable to judicial review as long as someone can establish his or her standing and willing to go to court. In my opinion, the first potential applicant is GOD. Let us make an assumption that GOD is actually innocent and it never has any exchange of interest with Andrew. It just wants Andrew to be ordinary employed for business consideration, and they think Andrew can do a good job. In such a situation, the misconduct of Chairman F will invalidate its contract with Andrew and further on affected its goodwill and probably its business. There may be a question whether the it is a direct affection. But it is still an arguable standing. However, what if there is not a public outcry, everything works out ok. Then it makes no sense for GOD to sue. In such a situation, I think the only possibility is to rely on someone is a responsible citizen and incidentally find that there is an irregularity in the exercising of public power and sue on citizen standing. According to Felixstowe Justice, a journalist is entitled to represent the public interest as a "private Attorney-General". In the case of Chu Hoi Dick, the claimant is also a journalist who lunch judicial review via public interest litigation. The only question here is whether the interest of the potential claimant, as a citizen other than an individual, is sufficient. It is a question to be decided up to the court.

All in all, from the example we discussed above, we can see that judicial review is not the only way or maybe not the best way to achieve good administration. And judicial review and other non-judicial control mechanisms should be supplementary to each other.

Wednesday, 13 March 2013

Pickpocket -> Attempt Theft?

I want to say life is full of coincidence. My wallet was stolen several days ago. Then, the criminal law professor w/o knowing that allocated me a case about pickpocket.

The problem question is as following:
     In a crowd street, there were two PCs, C and E, patrolling for the purpose of anti-pick pocket. They were on plain clothes so that no body can recognize that they were PCs. Also, there was a foreigner, with his wallet in his back pocket of his trousers, walking on that street. Anyone behind was able to see his wallet because part of the it was sticking out of the his pocket. Sam was a person following closely behind the foreigner at the that time. A few seconds later, Sam stretched out his right hand and used his thumb and index fingers of his hand to touch the pocket. At the moment his finger touched on the top of the wallet, the foreigner felt a little bit itchy with his back and scratched his lower back using his hand. It seems Sam did not want the foreigner to be aware that he touched the wallet. So he stepped back. The wallet was still in the foreigners packet. Then Sam just gave up following the  foreigner and went to look into the window of a nearby shop. The two PCs, E and C , who had observed the whole scenario did not take any action, instead, they continued their patrol.

The problem is: If you had been one of the PCs, would you have acted differently?

It is obvious that the answer of this question depends on what kind of criminal offences Sam may have already committed. If there is not any offence, then it is correct for the two PCs to continue their patrol; If it can be justified that Sam liable for a criminal offence, the two PCs should arrest Sam immediately and put him into trial.

Firstly, we need to determine what kind of substantive offence that Sam may be liable. It could be prima facie a theft case if Sam successfully pulled the wallet out of the pocket and left immediately. This can be confirmed by checking section 2(1) of Theft Ordinance which says: "A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently deprive of it." It is clear that Sam will satisfy both mens rea and actus rea of theft if he take the wallet away.

However, in our scenario, Sam just touched on the wallet. There is no substantive offence completed. Instead, we need consider inchoate offences. The most probable one is attempt theft. According to section 159G(1) of Crimes Ordinance, two elements should be proved in order to convict Sam a attempt offence. On the mens rea part, the prosecution need to provide that Sam really intended to commit the substantive offence which mean Sam really want to steal the wallet; On the actus reus part, it should be proved that Sam's touch on that wallet is more than merely preparatory.

Mens rea is most essential part in determining this case. However, since the above scenario mentioned nothing about Sam's intention to touch the wallet. What we can do is only to infer from the Sam's acts. So I would like to discuss actus reus first, base on a presumption that Sam intended to steal the wallet.

Unfortunately, the description of "an act that is more than merely preparatory" is unclear. It provides no further guidance of where is appropriate threshold for criminal liability. Nevertheless, we have a variety of cases to help us to solve this issue. Until now, the most acceptable principle is what is described as the "Gullefer test":
The attempt begins when the merely preparatory acts have come to an end; And the defendant embarks upon the crime proper. No actual standard should be formulated if your want this statute to apply to all offences. So it will be determined of course upon the facts in any particular case.
According to the above principle, what could be the possible arguments for the prosecution if Sam is put into trial. I think Jones [1990] 1 WLR 1057 could be a good one to apply in this case. In Jones, the court stated  that D's actions in obtaining the gun, in loading it, in putting on his disguise and in going to school where the potential victims car may appear is only preparatory acts. However, it concluded that J was properly convicted of attempted murder, given the evidence that J, in disguise and armed with a shotgun, clambered into the rear set of the potential victim's car and pointed the gun to the victim with intention of killing him. Even though J had not yet unlocked the safety catch and put the fingers on the trigger, the court said he had already gone beyond merely preparatory. Actually, we can make a perfect mapping between the acts of both Jones and current case. For example, Sam's actions in tailing and getting close to the foreigner can be mapped to J's action in putting on disguise and going to V's school. So, Sam's acts at this point can still be regarded as  only preparatory. However, Sam's following actions in stretching his hand, in touching on the top of the wallet can be mapped to J's actions in taking out the gun and pointing it at V. Therefore, on this ground, Sam had already done an act not merely preparatory. Then, Sam should be convicted.

For the defence counsel, it may bring a defence by adopting Campbell [1991] Crim LR 268. The evidence shows that C, while carrying a imitation gun and a threatening note, visited and reconnoitered a post office which he planed to rob. At the time he was arresting, C was going back to his motorbike, having decided, as he said, not to go ahead with the robbery. The court ruled what C had done, is "at best merely preparatory". Therefore, in our case, Sam can argue that he just touched on the top of the wallet for the purpose of testing and checking, as shown in Campbell case, to see whether the foreigner is sensitive. At last, he decided not to go ahead with theft. If the the prosecution want to convict Sam, they must show that Sam had the tendency to pull the pocket, which means, at least,  he need to put a little bit force on his fingers in order to firmly pick the wallet out.

Nevertheless, I think it is quite a weak argument. In Nguyen Thi Huong [1998] HKCU 2290, which is a case the defendant tried to pickpocket twice. The facts is quite similar and the court said:
In deed, on the facts as found by the learned magistrate, it is difficult to imagine that if the appellant had gone one step further, she would not have been facing a charge of theft rather than attempt theft.
 So, on this basis, it seems there is a large possibility for Sam to be convicted, if he really intent to steal.

Then, we need to examine Sam's intention. I think the prosecution will have a bad luck in proving Sam's intention. For instance, Sam can raise a reasonable doubt by claiming that what his original idea was to pick the wallet, show it to the foreigner and tell him it was not safe, in this crowd street, to put the wallet in his back pocket. So the intention of Sam to steal is a questionmark. If there is no dishonest intention, Sam should be acquitted.

The statutory offence of attempt is a matter of degree. In stead of a clear dividing line, it seems there is a grey area in determining what is merely preparatory acts and what is acts beyond merely preparatory. The difficulty lies in balancing the need to ensure there is sufficient evidence that the defendant has psychologically committed himself to committing the offence; and to ensure law enforcement officers can both intervene in a timely fashion and yet still secure a conviction.

Finally, we can come back to our question: would you have acted differently if you had been the policeman? I think we can safely get rid of the option of continue to patrol, because Sam was obviously a criminal suspect. So beside arresting Sam immediately, imoho, there is a third option. We can draw clue from Lee Shek [1976] HKCA 149, Nguyen Thi Huong [1998] HKCU 2290, HKSAR v Xiao Ping [2013] HKEC 3], in which all the witnesses or policemen waited or were aware of until those defendants tried to steal more than once. Hence, if I had been the policeman on that street, I would follow Sam and wait until Sam tried to steal for the second time. This can add more certainty on Sam's intention to steal. If Sam do not try again, given the described facts, then there is a reasonable doubt that Sam may not be a thief .

PS: This is a tutorial question I presented yesterday. Prof. argued that scene is a deciding factor (I don't know whether he really agree w/ his point or just want find some contention point to train us). He argued that Campbell should not be applied as a defending case because Campbell was arrest outside the post-office. However, I don't think it is settled down. If the scene is a deciding factor, then Campbell should be convict once he had entered the post-office, why the court said Campbell need at least go to the counter, and show some hostile acts? On the contrary, in Griffin [1993], the mother who want to abduct her own child was convicted even though there is no evidence shows that she is in control of the child or she took her child to the harbor (inconsistent with Geddes [1996], which requires confrontation with a student). So I don't think whether a defendant presents in the scene should be the key factor. We should, in each case, look at all the factors as a whole.

Friday, 8 March 2013 comes

Finally and initially, I get my personal legal blog successfully setup. I've been considering to start blogging for a long time because I've had enough w/ my poor legal writing. As a student who has studied in law school for more than one and half years, I find it will still spend me a prolonged time to finish one little essay which requires just one or two thousand words. The struggle feeling of extracting and piecing together words, phrases and sentences from text/case books really makes me crazy. So I realized things must be changed. is the first step I carry out my plan. The ration behind is simple: if you want to improve, then  keep practicing. I've spent one day in coding and setting up this blog and I don't want to waste my effort. So I believe I will press on w/ writing. As writing going on, I believe I will be a better Lawyer.

Another benefit that I think I can gain from writing a legal blog is it will help me to learn law in a active and critical way.  Before, I only read passively, sometimes, I even don't know what I am reading. It's like the content I read never goes into my thought. IMOHO, writing as a Lawyer is a good tool to test whether I've actually understood those laws I learned. So, once I can't writing anything, it means I need to go back to learn and truly absorb the knowledge.

Anyway, I started up, the next thing is to be persistent.

PS: sth. technical need to be mentioned. I'm also a code farmer, So I setup this blog by myself. I chose django as webframework. I really appreciate for its clean design which helps me reduced the time to do coding stuffs. The hosting provider I used is openshift, which offers good free tier service to developers. I like openshift a lot because I don't have any thing to pay for hosting services. Besides my poor English, I've a poor pocket. lol