Provisional Legislative Council

PLC Paper No. CB(1) 1285

Ref : CB1/BC/5/97/2

Bills Committee on
Housing (Amendment) (No.3) Bill 1997

Minutes of meeting held on
Monday, 16 February 1998, at 10:45 am
in Conference Room B of the Legislative Council Building

Members present :

Hon CHAN Yuen-han (Chairman)
Hon WONG Siu-yee
Hon Edward HO Sing-tin, JP
Hon Mrs Selina CHOW, JP
Hon CHAN Kam-lam
Hon Ambrose LAU Hon-chuen, JP
Hon CHOY Kan-pui, JP
Dr Hon TANG Siu-tong, JP

Members absent :

Hon HO Sai-chu, JP
Dr Hon Raymond HO Chung-tai, JP
Hon Mrs Peggy LAM, JP
Hon MA Fung-kwok
Hon CHENG Kai-nam
Hon Frederick FUNG Kin-kee
Hon Andrew WONG Wang-fat, JP
Hon Bruce LIU Sing-lee

Public officers attending :

Housing Bureau

Miss Sandy CHAN,
Principal Assistant Secretary for Housing (2)

Housing Department

Assistant Director of Housing (Central Services & Management Policy)

Mr Simon LEE,
Assistant Director/Legal Advice

Ms Monica LAW,
Senior Government Counsel

Clerk in attendance :

Ms LEUNG Siu-kum,
Chief Assistant Secretary (1)2

Staff in attendance :

Mr Arthur CHEUNG,
Assistant Legal Adviser 5

Miss Becky YU,
Senior Assistant Secretary (1)3

I Meeting with the Administration

(Provisional Legislative Council Brief ref: HB(CR)5/4/21

PLC Paper Nos. LS 72 and CB(1) 815)

Making false declarations to the Housing Authority

Members sought clarification on the number of convictions against better-off tenants for making false declarations. The Assistant Director of Housing (Central Services & Management Policy) advised that nine cases had been processed since the implementation of the policy of requiring tenants who had been living in public housing for ten years or more with a household income exceeding the corresponding Subsidy Income Limit to pay 1.5 times or double net rent plus rates on 1 April 1987. Of these, six were successfully convicted and the fines for which ranged from $2,000 to $7,000. The remaining three were still under investigation. With the introduction of the requirement for better-off tenants to pay market rent on 1 April 1997, six cases had been processed of which two were convicted and the fines were $2,500 and $8,000. Investigation on the other four cases had been discontinued due to insufficient evidence.

2. Some members remained unconvinced of the need to increase sanctions in view of the small number of convictions and the low level of penalty imposed by the Court. They insisted that efforts should be made to convince the Court that abuse of public housing subsidy was a serious offence justifying heavier penalties. The Principal Assistant Secretary for Housing (2) (PAS for H (2)) responded that the low number of convictions might not be able to reflect the true extent of abuses as the Housing Department (HD) could only afford checking the declarations at random given the lengthy time required in conducting investigation and collecting evidence. She reiterated that with the implementation of the requirement for better-off tenants to pay market rent on 1 April 1997, it was necessary to increase the sanctions to deter people, in particular better-off tenants from making false declarations. The Assistant Director/Legal Advice (AD/LA) clarified that in determining whether the accused were guilty, the Court would only consider evidence with respect to false declarations, and that the amount of housing subsidy abused relating to the offence of making false declarations had not been considered. The proposed additional fine of three times the rent undercharged would enable the Court to take into consideration the amount of housing subsidy abused when determining the level of penalty. PAS for H (2) said that the additional penalty would also help to drive home the message that offenders would not profit from fraudulent declarations, thereby enhancing the deterrent effect. She envisaged that the additional fine, together with the enhancement of publicity on the criminal liability for making false declarations, would serve as more effective deterrent. She also assured members that HD would review the declaration forms as suggested by a member to avoid false declarations due to misinterpretation.

3. On the basis upon which the fine of treble the amount of rent undercharged was arrived at, AD/LA advised that this was modelled after provisions in the Inland Revenue Ordinance. The Administration had considered other references such as the penalty provisions in the Companies Ordinance, under which company directors making false declarations would be liable to daily penalty upon conviction. Considering that such provisions were not commonly known to the public, these had not been adopted. The Administration had also considered the possibility of pursuing deception cases through civil proceedings but this had also been discarded for the lack of a cause of action. Furthermore, the fine recovered from civil proceedings which was equivalent to the actual amount of rent undercharged might not be sufficient to cover the cost of investigation. As to whether the Administration would consider issuing notices-to-quit to offenders, AD/LA advised that this might not be an effective deterrent as tenants concerned were well aware of the risk of being evicted when making false declarations.

4. In conclusion, while some members agreed with the need for further fine, some considered it unnecessary. Others remained unconvinced of the Administration's justifications for the proposal because of its non-binding effect on judges in sentencing.

Assessment of market value of Home Ownership Scheme (HOS) and Private Sector Participation Scheme (PSPS) flats

5. Since it was already a common practice for government departments to contract out various kinds of work to private consultants, Mr Edward S T HO questioned the need to spell out explicitly in the Housing Ordinance the power of the Director of Housing (D of H) to delegate his function to assess Prevailing Market Value (PMV) to qualified estate surveyors in the private sector. AD/LA explained that without an express delegation provision in the Ordinance, HD would have to verify each assessment done by outside surveyors, and this would impair the ability of HD to provide effective and efficient service of premium assessment for HOS and PSPS flat owners. AD/LA added that the ultimate responsibility for assessments would still rest with D of H after the delegation.

6. As regards the accuracy of PMV computed by outside surveyors, AD/LA assured members that this would be monitored by HD through an internal monitoring mechanism. Although operational details had yet to be worked out after the enactment of the Bill, the preliminary approach would be for HD to provide a PMV index for each HOS and PSPS estate which would serve as a reference for outside surveyors. Nevertheless, adjudication from the Lands Tribunal could be sought in the event of disputes over PMV.

7. While agreeing with the need for delegation, Mr HO was of the view that an approval mechanism should be available to vet the assessments done by outside surveyors.

Membership of appeal panel

8. On the membership of the appeal panel, AD/LA advised that this comprised tenants, professionals and members of the public. The main objective of the panel was to hear appeals against termination of leases of public rental and interim housing. Judicial review could be sought in the event of disputes over the decision of the appeal panel. Members were generally supportive of the proposed removal of the limit on the number of members of the appeal panel.

9. Members then proceeded to examine the Bill clause by clause.

Clause 1. Short title and commencement
Clause 2. Interpretation
Clause 3. Appeal panel and tribunals

10. No particular comments were made on these clauses.

Clause 4. Leases of land in estates

11. A member was of the view that the Administration might need to review other provisions in the Ordinance in the light of the addition of the new phrase "total household income or total household income and assets". AD/LA undertook to relay the member's concern to the Department of Justice for consideration. Admin

Clause 5. Section added

12. Members were generally supportive of the delegation but agreed that an approval mechanism should be made available.

Clause 6. Power to obtain information

13. No particular comments were made on this clause.

Clause 7. False statements
Clause 8. Limitation of time for prosecution of offences

14. Members had no particular comments on the technical aspect of these clauses. Nevertheless, some members remained unconvinced of the need to increase sanctions.

II Any other business

15. As members had concluded examination of the Bill, the next meeting scheduled for Monday, 23 February 1998 was cancelled.

16. There being no other business, the meeting ended at 12:40 pm.

Provisional Legislative Council Secretariat
29 April 1998