LegCo Paper No. CB(1) 1740/95-96
(These minutes have been seen by the Administration)
Ref : CB1/BC/11/95/2

Bills Committee on Estate Agents Bill

Minutes of Meeting
held on Tuesday, 28 May 1996 at 10:45 am
in Conference Room B of the Legislative Council Building

Members Present :

    Hon Andrew CHENG Kar-foo (Chairman)
    Hon Edward S T HO, OBE, JP
    Hon Ronald ARCULLI, OBE, JP
    Hon LEE Wing-tat
    Hon LI Wah-ming
    Hon CHAN Yuen-han
    Hon NGAN Kam-chuen

Members Absent :

    Hon Mrs Selina CHOW, OBE, JP
    Hon Albert CHAN Wai-yip
    Hon James TO Kun-sun
    Hon CHAN Kam-lam
    Dr Hon LAW Cheung-kwok

Public Officers Attending:

Mr William SHIU
Principal Assistant Secretary for Housing
Miss Eva TO
Assistant Secretary for Housing
Ms Sherman CHAN
Senior Assistant Law Draftsman (Atg)

Staff in Attendance :

Mrs Vivian KAM
Chief Assistant Secretary (1)2
Mr Stephen LAM
Assistant Legal Adviser 4
Miss Becky YU
Senior Assistant Secretary (1)3


The Chairman reported that the Bills Committee had completed scrutiny of Parts I, II and III of the Bill at the last meeting on 24 May 1996, and was awaiting the Administration’s response on observations made by members at the previous meetings. The Committee would examine Part IV of the Bill starting with Clause 29 at the current meeting.

Part IV - Investigations and Discipline

Clause 29. Investigations

2. Members considered the power of investigation for the Estate Agents Authority (EAA) and its investigators too wide given that the EAA could conduct investigations once it had reason to believe that a provision of the Ordinance might not have been complied with, or might have been contravened by a licensee. They sought clarification on whether the phrase “has reason to believe” under sub-clause 29(1) had the same meaning as “reasonably believe” which was more commonly adopted.

3. Mr William SHIU said in response that the power of investigation was essential for the EAA to implement the regulatory system on the one hand and to enhance transparency of the trade on the other. Miss Eva TO supplemented that the investigation power under Clause 29 referred to the power to require the production of documents and explanations in the event the licensee under investigation refused to co-operate. Similar provisions could also be found in the Securities and Futures Commission Ordinance (SFCO) and the Leveraged Foreign Exchange Trading Ordinance (LFETO). Ms Sherman CHAN also advised that the Bill had adopted a moderate approach when compared with the Travel Agents Ordinance which empowered the Registrar of Travel Agents to conduct investigations if he suspected that the business of a licensed travel agent was being carried out contrary to the public interests. On the last point concerning the phrase “has reason to believe”, Ms CHAN clarified that the ground of reasonableness had been considered judicially in the context of the Matrimonial Causes Act 1965. Members considered a direct comparison with the SFCO and the LFETO inappropriate since these two Ordinances had a significantly broader scope of control over the financial market whereas estate agency work was just a trade.

4. While members agreed in principle that the EAA had a monitoring and investigating role, they were of the view that the provisions should not be too harsh on estate agents. Mr SHIU emphasised that it was necessary for the EAA to have sufficient power to conduct its investigations to ensure professional integrity among its member agents. He took note of members’ concern and would consider whether the clause needed rephrasing taking into account similar provisions in other legislation. In reply to a related question, Ms CHAN advised that other professional bodies such as the Law Society of Hong Kong also had similar investigating power over its members.

5. Members sought clarification on whether a person under investigation by the EAA could have access to data in an investigation report by virtue of the Personal Data (Privacy) Ordinance. The Assistant Legal Adviser advised that the EAA was a statutory body and would therefore come under the jurisdiction of the said Ordinance. Mr SHIU noted members’ concern and undertook to seek legal advice from the Attorney General’s Chambers (AGC) on the compatibility of the Administration’s proposal for withholding data in the investigation report other than the results of the investigation with the Personal Date (Privacy) Ordinance. On the need to safeguard the confidentiality of information given by a licensee under investigation and the possible incrimination against investigators for breaches of confidentiality requirement, Mr SHIU shared members’ concerns and undertook to relay their view to the AGC for consideration.

6. Members expressed concern over the possibility of self-incrimination under sub-clause 29(4)(b) if a person being investigated was required to give explanations or provide further particulars on documents produced. They questioned whether such arrangements were consistent with the Common Law and with similar provisions in the Organized and Serious Crimes Ordinance. In reply, Ms CHAN advised that while sub-clause 29(4)(b) required a licensee under investigation to give explanation or further particulars in respect of the documents, sub-clause 55(2)(d) provided that neither the questions nor the answers should be admissible in evidence against the licensee in criminal proceedings except for perjury, etc. if such answers might tend to incriminate him. The combined effect of both clauses eroded the right to silence but it should be noted that the questions and answers were generally inadmissible as evidence against the person in criminal proceedings. The intention of sub-clause 55(2)(d) was to facilitate investigation so that persons could answer questions freely and fearlessly. Mr SHIU emphasised that the power to require an answer was only confined to investigations involving inspection and interpretation of documents and the power itself did not compromise the spirit of a fair trial; the Common Law would apply in the event of criminal prosecutions. Ms TO supplemented that similar provisions also existed in both the SFCO and the LFETO. Members remarked that information on the circumstances which prompted the inclusion of such provisions in the two Ordinances would be useful.

7. Members noted that under sub-clause 29(7), the court might order a convicted licensee to pay the EAA the whole or part of the costs or expenses of the investigation and asked whether acquitted persons on the other hand could ask the EAA to shoulder the costs. They also considered a need for comparison with other legislation with similar provisions. Mr SHIU advised that reference had been made to other legislation in this regard but in general the presiding judge was the authority for making the decision having regard to the circumstances of the case.

8. In reply to members, Ms TO clarified that under sub-clause 29(8) banking institutions were only required to disclose or produce information in relation to the records of a customer if the EAA considered this necessary for the purpose of the investigation.

9. Members urged the Administration to qualify the provision in sub-clause 29(9) on retrieval of information. Mr SHIU agreed to consider refining the wording.

Clause 30. Complaints

10. Members sought clarification on the basis upon which a person was deemed fit and proper under sub-clause 30(1)(b). Miss TO advised that the fit and proper criteria had been defined in sub-clauses 19(2), 20(2), 20(3) and 21(3) which were concerned with the various aspects of financial credibility, past criminal records, mental state, etc. On the rationale for appointing non-EAA members to handle complaint cases, Mr SHIU advised that the intention behind the clause was to provide for flexibility for the EAA in discharging its duties. Consideration would be given to specifying in the clause, as a member suggested, the type of persons who might be eligible for appointment to deal with complaint cases as well as the principle of excluding persons with conflict of interests from conducting enquiries. As regards the level of fees payable to persons so appointed, Miss TO advised that since the EAA would be a self-financed organization, it would have the autonomy to decide on the level of fees payable.

Clause 31. Disciplinary powers

11. Members suggested re-phrasing the term “well-founded” in sub-clause 31(1)(b)(ii) as the meaning was ambiguous. They also considered a need for appointing a list of persons to a disciplinary committee to ensure consistency in standard of disciplinary action taken. To allay members’ concern on the ambiguity, Ms CHAN advised that one possible approach would be to re-replace the phrase “the complaint or submission is well-founded” in the said clause by “the facts referred to as the grounds on which the complaint is lodged exist”. On the last point, Mr SHIU acknowledged the need for consistency in standard of disciplinary action to be taken and undertook to consider members’ views.

12. In reply to members, Mr SHIU confirmed that the relevant committee could make such order as it considered necessary with regard to the payment of costs as stated in sub-clause 31(1)(vi), and that the provision for suspending a licence for a period not exceeding two years under sub-clause 32(1)(a)(iv) would not prohibit the EAA from imposing additional disciplinary actions against unscrupulous licensed estate agents.

Clause 32. Appeals

13. Members sought clarification on whether estate agents could continue with their business during the period of appeal, both for renewal and suspension of licences. Miss TO said in response that the EAA was required under sub-clause 32(1)(a) to inform the licensee concerned of its decision together with the reasons for such a decision by way of a notice within 21 days. An appeal however should not affect the coming into force of such a decision on the date of its notification or on such later date as might be specified in the relevant notice. Members views were divided on the proposed discontinuation of business. While some considered that licensees concerned should be allowed to continue with their businesses having regard to practices as in the case of liquor licences and provisions in the proposed Buildings (Amendment)(No. 3) Bill 1995, others agreed with the Administration’s approach but emphasised the need to specify the period during which appeals should be made and processed. Mr SHIU noted members’ concerns and advised that different approaches would be adopted in different circumstances such in the case of renewal or revocation of licences. He supplemented that references would be drawn from other legislation in this respect.

Clause 33. Appeal panel and tribunals

14. In reply to members, Mr SHIU confirmed that members of the EAA were not eligible for appointment to the appeal panel.

15. There being no other business, the meeting closed at 12:45 pm.

LegCo Secretariat
5 July 1996

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