THE LAW REFORM COMMISSION

OF HONG KONG

REPORT

ON

EXTRINSIC MATERIALS AS AN AID TO

STATUTORY INTERPRETATION

MARCH 1997

The Law Reform Commission was established by His Excellency the Governor in Council in January 1980. The Commission considers such reforms of the laws of Hong Kong as may be referred to it by the Attorney General or the Chief Justice.

The members of the Commission at present are:

The Hon Mr J F Mathews, CMG, JP (Attorney General) (Chairman)

Mr Tony Yen (Law Draftsman)

The Hon Mr Justice J Chan

Mr Eric Cheung

Professor Yash Ghai, CBE

Professor Kuan Hsin-chi

Dr Lawrence Lai

Mr Andrew Liao, QC

Mr Gage McAfee

Mr Alasdair G Morrison

Mr Robert Ribeiro, QC

Professor Derek Roebuck

Professor Peter Wesley-Smith

Mr Justein Wong Chun, JP

The Secretary of the Commission is Mr Stuart M I Stoker and its offices are at:

20/F Harcourt House,

39 Gloucester Road,

Wanchai,

Hong Kong.

Telephone: 2528 0472

Fax: 2865 2902

E-mail: reform@legal.gcn.gov.hk

A summary of this report can be found on the Internet at: http://www.info.gov.hk

Miss Paula Scully, Senior Crown Counsel, was principally responsible for the writing of this Commission report.

Introduction

Terms of reference

1. The request for a study of extrinsic aids to statutory interpretation arose from a discussion by the Law Reform Commission of a recommendation in the Sub-Committee Report on the Adoption of the UNCITRAL Model Law of Arbitration, that the Courts should be permitted to refer to the report of the Commission as an aid to interpretation.¹

2. That request was made in May 1987. A preliminary background paper was prepared and was sent to certain interested parties² to canvass their views on whether the present law was satisfactory, or whether it required further study.

3. As a result of the views expressed, it was decided that the subject merited further study, and that there should be a formal reference to the Commission for consideration and report.

4. The formal terms of reference are as follows:

“Should the law governing the use of extrinsic materials in relation to the interpretation of statutes be changed and, if so, in what way?”

5. These were signed by the Acting Chief Justice and the Acting Attorney General on the 3rd and 4th June 1992 respectively.

Background Paper

6. Since the many judicial developments that have taken place over the years, particularly the seminal judgment of Pepper v Hart,³ the Secretariat decided that the subject merited a more detailed and updated Background Paper. This was tabled before the Commission in March 1995. The Commission decided to establish a sub-group to consider the recommendations contained in the Background Paper.

Membership and method of work

7. The membership of the sub-group was as follows :

Professor Peter Wesley-Smith (Chairman)	Dean of the Law Faculty University of Hong Kong
Mr Eric Cheung	Solicitor Johnston Stokes & Master
Mr Andrew Liao QC	Queens Counsel
The Hon Mr Justice Nazareth	Court of Appeal
Mr Tony Yen	Law Draftsman
Miss Paula Scully (Secretary)	Senior Crown Counsel Law Reform Commission

8. The sub-group met on six occasions. A report was prepared, summarising the sub-group’s deliberations, which was submitted to the Commission in November 1995. In the light of the views of the sub-group and the Commission itself, the original Background paper was amended and a Consultation Paper issued in February 1996. Because of the nature of the subject the Commission solicited views directly only from the Bar Association, the Law Society, the Judiciary, the Universities, the Legislative Council Secretariat and the Legislative Council’s Panel on Legal Services. The paper was of course also made publicly available to anyone else who wished to express a view. The Commission considered the submissions made by the consultees at its meeting in July 1996. This Report is the culmination of the work of the Commission, having taken account of the submissions made to it by the consultees. The Commission expresses its gratitude to all those who made submissions.

What is the importance of statutory interpretation?

9. “Legislation constitutes the single most important source of law in our society. There is hardly any aspect of the education, welfare, health, employment, housing, income and public conduct of the citizen that is not regulated by statute”.⁴ Every day, officials, private individuals, and professional advisers interpret legislation, in order to carry out their functions. However, it is only where there is a doubt about the meaning or scope of a statutory provision, or about its relationship with other provisions that recourse to judicial interpretation is made.⁵

10. The interpretation of statutes is not only a matter to be considered by reference to the decisions of the courts. A statute is directed according to its subject matter, to audiences of varying extent. The intelligibility of statutes from the point of view of ordinary citizens or their advisers, cannot be dissociated from the rules of interpretation followed by the courts, for the ability to understand a statute depends on intelligent anticipation of the way in which it would be interpreted by the courts.⁶

11. The United Kingdom Law Commissions in their joint Report stressed the importance of rules of interpretation of legislation being workable rules of communication between the legislator and the legislative audience as a whole. This consideration is particularly important in any assessment of the value of the aids to interpretation extraneous to the statute itself.⁷

What are extrinsic aids to interpretation?

12. Briefly, they are as follows:⁸

(1) the historical setting;

(2) parliamentary history and debates;⁹

(3) official reports including Law Reform Commission reports;

(4) explanatory memoranda issued by government departments;

(5) textbooks and dictionaries;

(6) international conventions;

(7) travaux preparatoires;¹⁰

(8) other statutes;

(9) conveyancing and administrative practice;

(10) uniform court decisions and usage;

(11) statutory regulations made under an Ordinance.

These will be dealt with in more detail in Chapter 2.

Scope of report

Internal aids

13. The original Background paper did not deal with the internal aids to interpretation as, strictly speaking, they were outside the terms of reference. Internal aids include:

(1) the title, short and long, of an Ordinance;

(2) the preamble;

(3) the side note of a section;

(4) headings;

(5) provisos;

(6) interpretations sections;

(7) schedules;

(8) punctuation.¹¹

14. However, section 15AB(2)(a) of the Australian Acts Interpretation Act 1901¹², which provides for extrinsic aids to be used in interpretation, does include “all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer”. The Commission concluded that this subsection should be included in proposed draft legislation,¹³ as users of ordinances do in fact use annotations, marginal notes, headings and similar internal aids. Otherwise the Commission did not deal with internal aids.¹⁴

External aids

15. Chapter 1 deals with the role of the courts and how they have developed rules of construction¹⁵ as aids to interpretation of statutes. It also discusses the constitutional theory of judicial interpretation. Chapter 2 goes into detail in describing extrinsic aids and how the courts have interpreted them.

16. Chapter 3 discusses the rationale used by the courts in relying on extrinsic aids. Chapter 4 deals with the rationale of the courts in excluding extrinsic aids. Chapter 5 analyses the important changes made by the House of Lords in Pepper v Hart¹⁶ in allowing the use of Parliamentary debates as aids. Chapter 6 deals with subsequent judicial developments in the United Kingdom and Hong Kong arising out of the judgment.

17. Chapter 7 focuses on options for reform of the law which were proposed prior to Pepper v Hart, and on whether that judgment addresses all these concerns. It undertakes a comparative analysis of the responses in other jurisdictions to extrinsic aids, with the exception of Australia. Chapter 8 reviews the Australian legislation and judicial interpretation of it.

18. Chapter 9 describes the legislative process and its deficiencies vis a vis the availability and accessibility of extrinsic aids.

19. Chapter 10 deals with such collateral matters as the impact of the Bill of Rights on statutory interpretation, stare decisis and the China dimension.

20. Chapter 11 sets out options for reform in Hong Kong and the recommendations of the Commission.

21 Chapter 12 is an Executive Summary of the conclusions and recommendations of the Commission. This summary is available in Chinese and English and is the only part of the report which is bilingual.

Chapter 1

The Role of the Courts

Introduction

1.1 Donaldson J described the role of the courts in a colourful fashion thus:

“The duty of the Courts is to ascertain and give effect to the will of Parliament as expressed in its enactments. In the performance of this duty the Judges do not act as computers into which are fed the statutes and the rules for the construction of statutes and from whom issue forth the mathematically correct answer. The interpretation of statutes is a craft as much as a science and the judges as craftsmen, select and apply the appropriate rules as the tools of their trade. They are not legislators, but finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing”.¹⁷

Background : constitutional theory

1.2 The doctrine of the sovereignty of Parliament has been traditionally understood to include the proposition that the judicial function in relation to legislation is confined to its interpretation and application.¹⁸

1.3 On the other hand the courts, in the past at least, regarded statutes “as an interloper upon the rounded majesty of the common law”.¹⁹ The dynamic between Parliament and the courts in relation to the creation and interpretation of law, and the need for a harmonious balance between them, must always be borne in mind, in the debate whether, and to what extent, the courts can look at extrinsic aids. This dynamic and balance is illustrated by the historical development by the Judiciary of the rules of construction of legislation. We now look at these rules in turn.

The “mischief” rule

1.4 The “mischief” rule was clearly expounded in Heydon's Case:²⁰

“That for the sure and true interpretation of all statutes in general ( be they penal or beneficial, restrictive or enlarging of the common law) four things are to be discerned and considered: (1) what was the common law before the passing of the Act, (2) what was the mischief and defect for which the common law did not provide; (3) what remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth; (4) the true reason of the remedy. And then the office of all the judges is always to make such construction as shall suppress the mischief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and pro private commodo, and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, pro bono publico”.

1.5 Arguments based upon the mischief dealt with by an Act gradually gave way to those based upon the actual words used in it. This shift began following the emergence of the doctrine of the legislative supremacy of Parliament and was considerably hastened by the development of more exacting styles in the nineteenth century.²¹ The mischief rule is now seen as incorporated into a purposive rule of construction. In Carter v Bradbeer,²² Lord Diplock noted a trend “away from the purely literal towards the purposive construction of statutory provisions.” Lord Simon, in Stock v Frank Jones (Tipton) Ltd,²³after referring to the Rule in Heydon’s case, stated “Nowadays we speak of the ‘purposive’ or ‘functional’ construction of a statute.”

1.6 In Hong Kong, unlike the United Kingdom, the mischief rule is incorporated into legislation. Section 19 of the Interpretation and General Clauses Ordinance (Cap 1) states:

“An Ordinance shall be deemed to be remedial and shall receive such fair, large and liberal construction and interpretation as will best ensure the attainment of the object of the Ordinance according to its true intent, meaning and spirit”.²⁴

1.7 Mortimer J, in Foo Ying executor to the estate of Law Choy-wan v Commissioner of Estate Duty,²⁵ stated, in following section 19, that where the meaning of the words is not plain, it is permissible to seek assistance from a consideration of the remedial purpose of the legislation and its context.²⁶ The word “context” was defined in its widest sense, by Lord Simonds, in Attorney -General v Prince Ernest Augustus of Hanover,²⁷ to include “not only other enacting provisions of the same statute, but its preamble, the existing state of the law, other statutes in pari materia, and the mischief which I can, by those and other legitimate means, discern the statute was intended to remedy”.

The “literal” rule

1.8 This rule stated that the words of a statute must be given their ordinary meaning, no matter what the result. This also showed the attitude of the judiciary to their role vis a vis Parliament, as Tindal C.J. said in the Sussex Peerage Claim²⁸:

“The only rule for the construction of Acts of Parliament, is that they should be construed according to the intent of the Parliament which passed the Act. If the words of the statute are in themselves precise and unambiguous, then no more can be necessary than to expound those words in that natural and ordinary sense²⁹. The words themselves alone do, in such cases, best declare the intention of the lawgiver”.

1.9 Some of the Courts took an extreme interpretation of the literal rule, which had almost an “Alice in Wonderland” quality to it. Lord Esher M.R. in R v The Judge of the City of London Court ³⁰ stated “If the words of an Act are clear, you must follow them, even though they lead to a manifest absurdity. The Court has nothing to do with the question whether the Legislature has committed an absurdity.” This view was reinforced in Vacher & Sons Ltd v London Society of Compositors,³¹ where Lord Atkinson said:

“If the language of a statute be plain, admitting of only one meaning, the Legislature must be taken to have meant and intended what it has plainly expressed, and whatever it has in clear terms enacted must be enforced though it should lead to absurd or mischievous results. If the language of this sub-section be not controlled by some of the other provisions of the statute, it must, since its language is plain and unambiguous, be enforced, and your Lordship's House sitting judicially is not concerned with the question whether the policy it embodies is wise or unwise, or whether it leads to consequences just or unjust, beneficial or mischievous.”

1.10 This sidesteps the issue of what the courts must do when the meaning is not plain and unambiguous. The literal rule is closely linked with the parol evidence rule, that excludes extrinsic evidence as to the meaning of written documents.

The “golden” rule

1.11 The classical statement of the “golden” rule was stated by Lord Wensleydale in Grey v Pearson;³²:

“I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Courts of Law ..., that in construing wills and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther”.

Criticism of the rules

1.12 The United Kingdom Law Commissions commented in their report that:

“There is a tendency in our systems, less evident in some recent decisions of the courts but still perceptible, to over emphasise the literal meaning of a provision (i.e. the meaning in the light of its immediate and obvious context) at the expense of the meaning to be derived from other possible contexts; the latter include the ‘mischief’ or general legislative purpose, as well as any international obligation of the United Kingdom, which underlie the provision”.³³

1.13 They also stated that to place undue emphasis on the literal meaning of words is to “assume an unattainable perfection in draftsmanship”.³⁴ This was written in 1969 and in the light of more recent judicial developments,³⁵ it seems that the courts have shifted somewhat from the literal approach. Zander³⁶ contends that:

“The main principles of statutory interpretation-the literal rule, the golden rule and the mischief rule-are all called rules, but this is plainly a misnomer. They are not rules in any ordinary sense of the word since they all point to different solutions to the same problem. Nor is there any indication, either in the so-called rules or elsewhere, as to which to apply in any given situation. Each of them may be applied but need not be”.

1.14 Zander, in his more recent book,³⁷criticised the golden rule for being silent as to how the court should proceed if it does find an unacceptable absurdity.

The present rule

1.15 Driedger³⁸ formulates the modern interpretation of the rules of construction as follows:

“(1) The Act as a whole is to be read in its entire context so as to ascertain the intention of Parliament (the law as expressly or impliedly enacted by the words), the object of the Act (the ends to be achieved), and the scheme of the Act (the relation between the individual provisions of the Act).

(2) The words of the individual provisions to be applied to the particular case under consideration are then read in their grammatical and ordinary sense in the light of the intention of Parliament embodied in the Act, and if they are clear and unambiguous and in harmony with that intention, object and scheme and with the general body of the law, that is the end.

(3) If the words are apparently obscure or ambiguous, then a meaning that best accords with the intention of Parliament, the object of the Act and the scheme of the Act, but one that the words are reasonably capable of bearing, is to be given them.”

1.16 In interpreting the modern rules of construction Lord Simon of Glaisdale in Maunsell v Olins³⁹ drew a distinction between the different audiences that the legislation is aimed at:

“It is sometimes put that, in statutes dealing with ordinary people in their everyday lives, the language is presumed to be used in its primary ordinary sense, unless this stultifies the purpose of the statute, or otherwise produces some injustice, absurdity, anomaly or contradiction, in which case some secondary ordinary sense may be preferred, so as to obviate the injustice, absurdity, anomaly or contradiction, or fulfil the purpose of the statute: while in statutes dealing with technical matters, words which are capable of both bearing an ordinary meaning and being terms of art in the technical matter of the legislation will presumptively bear their primary meaning as such terms of art (or, if they must necessarily be modified, some secondary meaning as terms of art”.

1.17 This analysis brings us on to the question whether the intention of Parliament can only be gleaned from the current rules of construction, which are a mixture of a literal and purposive interpretation,⁴⁰ or, whether the courts need the assistance of extrinsic aids to determine the intention of Parliament. This will be dealt with in chapter 2.