Chapter 3 - Should domicile be retained as a general connecting factor?

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3.1 In the last chapter, we have identified the various problems associated with determining a person's domicile under the existing law. It may be opportune at this juncture to point out that other connecting factors are also employed in Hong Kong for the purposes of connecting a person with a system of law. We discuss in this chapter these connecting factors and consider whether any of them should replace domicile as a general connecting factor in Hong Kong.

Other common connecting factors

3.2 Apart from domicile, the more common connecting factors are habitual residence, nationality and ordinary residence. We will also consider permanent residency and right of abode as possible options.

Habitual residence

3.3 Habitual residence is applied in a number of contexts, including: (a) determining the formal validity of a will[1]; (b) determining jurisdiction of the court in proceedings for divorce and nullity[2]; (c) determining jurisdiction of the court in proceedings for presumption of death[3]; (d) recognition of overseas divorces or legal separations[4]; and (e) declaration of a person's status[5].

3.4 The term "habitual residence" is adopted in the Hague Conference on Private International Law. The term is deliberately left undefined[6], and is not treated as a term of art but according to the ordinary and natural meaning of the two words. The English Court of Appeal has stressed that habitual residence is basically a question of fact to be determined by referring to the circumstances of each case.[7] Habitual residence must, however, be distinguished from mere residence and the word "habitual" connotes a quality of residence but not its length.

Nationality

3.5 In Hong Kong, nationality is also applied as a connecting factor in a number of circumstances, such as in determining the formal validity of a will[8], and recognition of overseas divorces or legal separations[9].

3.6 Until the beginning of the 19^th century, domicile was universally regarded as the basis for determining an individual's personal law.[10] It was the Code Napoleon in 1804 in France which pioneered a shift from domicile to nationality in continental Europe. Belgium, Luxembourg, Austria and the Netherlands subsequently adopted the provisions of the French code. The real catalyst for the shift from domicile to nationality on the continent of Europe was the Italian Civil Code. In the second half of the 19^th century, domicile was replaced by nationality in code after code in continental Europe. The use of nationality later spread to Japan and some South American countries. Nationality has traditionally been used as the major connecting factor in the civil law system on the Mainland of the People's Republic of China.

Ordinary residence

3.7 Ordinary residence as a connecting factor appears in various contexts, including: (a) as a condition for presenting a bankruptcy petition[11]; (b) as a condition for making an order prohibiting a debtor from leaving Hong Kong[12]; and (c) as a prerequisite for entitlement of a trade mark to protection under the Paris Convention as a "well-known trade mark"[13].

3.8 It has been suggested in some cases that ordinary residence is nothing more or less than residence.[14] It is submitted that the better view is that the word "ordinary" does add something: an element of continuity, order or settled purpose.[15] There are also different views as to the relationship between habitual residence and ordinary residence. Some cases suggest that habitual residence is "something more than" ordinary residence,[16] but that "something more" is elusive. It has, however, been held that there is no real distinction between the two.[17] It has also been said that the two concepts of habitual residence and ordinary residence share "a common core of meaning".[18] In Ikimi v Ikimi[19], the Court of Appeal held that in respect of family law legislation, the two concepts must be synonymous.

Permanent residence and right of abode

3.9 Article 24 of the Basic Law defines the categories of permanent residents having the right of abode in Hong Kong. This is a familiar and important concept. It might be asked why this should not replace domicile as a connecting factor. However, the right of abode is used to determine a person's status in public law, whereas domicile is used to determine a person's private or personal law. Applying the law of a jurisdiction in which a person has permanent residence or right of abode would in certain circumstances prove more restrictive than domicile. It would, for instance, (unlike domicile) exclude a jurisdiction to which a person has recently moved with the intention of permanently residing there. A further difficulty in using right of abode as a general connecting factor is that, unlike domicile, a person may have a right of abode in more than one jurisdiction at the same time, or he may not have a right of abode anywhere.

Reform proposals considered in other jurisdictions

3.10 Nauru, one of the smallest Commonwealth jurisdictions, has been a pioneer in replacing domicile as a general connecting factor with habitual residence.[20] The Irish Law Reform Commission recommended the same change in its 1983 report on domicile.[21] In contrast, the law reform Commissions in England, Scotland and South Africa have all recommended retaining the concept of domicile as a general connecting factor.

3.11 In their joint report on domicile in 1987, the English and Scottish Law Commissions set out the advantages and drawbacks of using habitual residence and nationality as connecting factors.[22] According to the two Commissions, habitual residence has the following advantages over domicile:

(1) it is generally easier to establish than domicile since it is less dependent on the intention of the person in question;

(2) it is more easily understood by laymen; and

(3) it is directly applicable to all persons, including children, without the need for additional concepts such as domicile of dependency.

3.12 There are, however, a number of disadvantages of habitual residence:

(1) The connection between a person and his place of habitual residence may not be sufficiently strong to justify his civil status and affairs being determined according to the law of that place.[23]

(2) The concept of habitual residence is relatively undeveloped as a legal concept. In particular, there are uncertainties:

(i) as to the importance of intention in determining whether residence is habitual;

(ii) as to how long residence must persist to become habitual; and

(iii) as to the position where a person has more than one habitual residence or none.

Special statutory provisions may be needed to address these uncertainties, which would detract from the simplicity of the concept which is one of its claimed advantages.

3.13 The English and Scottish Law Commissions also analysed the advantages of nationality over domicile:

(1) The concept of nationality is more readily understood by laymen.

(2) It provides a degree of certainty in that it is more easily ascertained and proved, since the change of nationality is a public and conscious act of record, either involving naturalisation or a marriage which brings a new nationality. This can be more easily determined than a person's intention.

(3) Acquiring a new nationality involves the consent of the person and the country in question. Hence, the connection created by a new nationality is less likely to be criticised by those affected by it.

3.14 In the Commissions' opinion, however, shifting to nationality would have a number of drawbacks:

(1) Additional rules will be required to deal with stateless persons or those with more than one nationality. In federal or composite states, nationality alone would not indicate the particular jurisdiction within the state with which a person should be connected.

(2) Nationality as a connecting factor may connect a person with a country which he may have never visited, since nationality does not depend on residence.

(3) Nationality as a connecting factor may apply to a man, against his wishes, the law of a country from which he has risked his life to escape.

Despite the Irish Law Reform Commission's recommendation that domicile should be replaced with habitual residence, the English and Scottish Commissions did not support such a course in the United Kingdom. The two Commissions were aware that nationality would not affect temporary expatriates as adversely as habitual residence. They nonetheless concluded that, because of the drawbacks of habitual residence and nationality which they had identified, domicile should be retained as a connecting factor, though it should be modified in the ways recommended in their report.

3.15 The South African Law Commission in its 1990 report[24] also considered the possibility of replacing domicile with nationality or habitual residence. The advantages and drawbacks of these two alternatives set out in the report were similar to those mentioned in the English and Scottish Law Commissions' report. The South African Law Commission observed that replacing domicile with other connecting factors was a drastic step. In the Commission's opinion, a convincing case had not been made out that such a course would present more benefits than difficulties. The Commission accordingly recommended that domicile should be retained as a general connecting factor.

3.16 In contrast, the Irish Law Reform Commission in its "thinly-argued"[25] report recommended that habitual residence should be substituted for domicile as a general connecting factor. The Commission's recommendation has yet to be implemented, however.

Conclusion

3.17 We have considered in some detail the advantages and disadvantages of replacing domicile with nationality or habitual residence which have been identified by law reform agencies elsewhere. Some of the drawbacks have particular force in Hong Kong. For instance, the fact that there are four law districts within the People's Republic of China means that it would be impracticable in many cases to use nationality to replace domicile unless the concept were further refined so as to be able to identify one of the four separate law districts within the People's Republic of China. This might be done by adopting a two-stage approach: ie (1) nationality and (2) habitual residence. Thus the court might select Hong Kong law for Chinese nationals living in Hong Kong and Mainland law for Chinese nationals living in, for example, Shanghai. However, such an approach might be thought to combine all the disadvantages of both nationality and habitual residence.

3.18 Conversely, the adoption of habitual residence as a connecting factor would mean that the personal law of Hong Kong people who live and work on the Mainland for a prolonged but temporary period may be that of the Mainland. In this case, the individual's personal law would in most cases no longer reflect the place which they would generally regard as their permanent home. The problem is that the connection between a Hong Kong person and his place of habitual residence on the Mainland may not be sufficiently strong to justify his civil status and affairs being determined according to the law of that place. In addition, the increased mobility of people in today's world means that the adoption of habitual residence as the test may have the effect of changing the individual's personal law too readily. The Hong Kong Bar Association believed that imposing a minimum requirement for the period of residence might alleviate this concern. The Bar also pointed out that a short-term stay would be unlikely to be regarded as habitual residence since the House of Lords held In Re J (A Minor) (Abduction) that residence for an "appreciable period of time and a settled intention" to reside on a long term basis were required for acquisition of a new habitual residence.[26] We note, however, that this opinion was obiter, as the case was concerned with the loss of habitual residence, rather than its acquisition.[27] We do not think that the solution is to stipulate a minimum period of residence in the legislation, since that does not take account of individual circumstances. In our view, substituting domicile with habitual residence or nationality may lead to strange results which would not necessarily be the most appropriate outcome.

3.19 We note that none of the overseas law reform bodies whose reports we have discussed above considered ordinary residence as a possible alternative to domicile. Ordinary residence is less commonly used than other connecting factors and has particular shortcomings. It is, for instance, possible for an individual to have more than one ordinary residence at a time. The ease with which ordinary residence can be established or changed is also a drawback, and could lead to confusion and uncertainty.

3.20 We see the force in the argument that the greater fluidity of modern society and the increasing global trend for businessmen and others to work away from their homeland call for a concept which promotes a stable legal background against which people can conduct their domestic affairs, but not for a concept which allows their civil status and rights to fluctuate as they move from one place to another.[28] Having weighed the arguments for and against adopting other connecting factors, we are persuaded that domicile, a concept which links the individual to the country where he has his home, is more appropriate for determining which system of law should govern a person's civil status and other personal affairs. While connecting factors other than domicile can be employed in particular cases as alternative or supplementary connecting factors, we consider that domicile should be retained as a general connecting factor.

3.21 The Hong Kong Bar Association observed that the circumstances in which domicile would be overridden or supplemented by other connecting factors are unclear. This in turn means that the concept of domicile may vary in meaning, depending on the situation.[29] Although the court might have more room to manoeuvre so as to achieve the most appropriate conclusion, this would be at the expense of consistency and certainty. We do not agree with the Bar's view on this point. Although the legislation may adopt other connecting factors in addition to domicile as alternative or supplementary connecting factors on a case-by-case basis, this does not mean that the concept of domicile may vary in meaning.

3.22 While we recommend that domicile as a general connecting factor should be maintained, the numerous problems set out in Chapter 2 pertaining to the existing rules for determining a person's domicile make it clear that these rules require modification. We make recommendations later in this Report as to how we believe the rules should be changed to remove the anomalies of the present law.

Recommendation 1

Domicile should be retained as a general connecting factor, but the existing rules for determining a person's domicile should be modified as recommended in this Report.

[1] Section 24 of the Wills Ordinance (Cap 30).

[2] Sections 3 and 4 of the Matrimonial Causes Ordinance (Cap 179).

[3] Section 6 of Cap 179.

[4] Section 56 of Cap 179.

[5] Section 6 of the Parent and Child Ordinance (Cap 429).

[6] The aim is to leave the notion free from technical rules which can produce rigidity and inconsistencies as between different legal systems.

[7] Re M (Minors) (Residence Order: Jurisdiction) [1993] 1 FLR 495. Hartmann J of the Court of First Instance in Hong Kong applied this principle in determining a child's habitual residence in a case of international child abduction, Re N (a Child) [2001] 2 HKLRD 377.

[8] Section 24 of Cap 30.

[9] Section 56 of Cap 179.

[10] See generally Dicey and Morris on the Conflict of Laws (Sweet and Maxwell, 13^th Ed, 2000) at para 6-128.

[11] Section 4 of the Bankruptcy Ordinance (Cap 6).

[12] Section 21B of the High Court Ordinance (Cap 4).

[13] Section 4 of the Trade Marks Ordinance (Cap 559).

[14] Levene v IRC [1928] AC 217, at 225 per Viscount Cave, LC. Mr Justice Bokhary PJ stated that the expression "ordinarily resident" should be given its natural and ordinary meaning. (Fateh Muhammad v Commissioner of Registration (2001) 4 HKCFAR 278 at 283).

[15] Dicey and Morris on the Conflict of Laws, 13^th Ed, 2000, at para 6-118.

[16] Cruse v Chittum [1974] 2 All ER 940, at 943.

[17] Cameron v Cameron, 1996 SC 17.

[18] Nessa v Chief Adjudication Officer [1999] 1 WLR 1937, 1941 (HL). Lord Slynn, however, reserved the question whether the terms were always synonymous. Each might take a shade of meaning from the context in which it was used.

[19] [2001] EWCA Civ 873, [2002] Fam 72 (CA).

[20] Conflict of Laws Act 1974.

[21] The Irish Law Reform Commission, Report on Domicile and Habitual Residence as Connecting Factors in the Conflict of Laws, 1983, paras 7 to 18.

[22] The Law Commission and the Scottish Law Commission, Private International Law, the Law of Domicile, (Law Com No 168 and Scot Law Com No 107), paras 3.4 to 3.16.

[23] This can best be illustrated by the situation of a person who works or lives abroad for a prolonged but temporary period, such as an English domiciled oil field worker in Saudi Arabia on a long term contract. If habitual residence were adopted as the connecting factor, various "intimate" matters relating to his status and property, such as his legal capacity to marry, would be determined by the law of Saudi Arabia. This will cut his links with his homeland, isolating him from its law and courts. It would be especially acute where the cultural background of the place of habitual residence is very different from that of a person's homeland.

[24] South African Law Commission, Report on Domicile, Project 60, March 1990, paras 5.1 to 5.29.

[25] Dicey and Morris on the Conflict of Laws, 13^th Ed, 2000, at para 6-134.

[26] [1991] 1 FLR 266.

[27] See Dicey and Morris on the Conflict of Laws, 13^th Edition, 2000, at para 6.124 footnote 36).

[28] Law Com No 168 and Scot Law Com No 107, para 3.8.

[29] W W Cook, Logical and Legal Bases of the Conflicts of Laws (Harvard University Press, 1942) at 194. We are of the view that the reference to W W Cook's book by the Hong Kong Bar Association is not relevant to the present discussion.

Hong Kong Law Reform Commission