Lloyd's Maritime and Commercial Law Quarterly
THE DEPENDENCY OF BUSINESS AND FINANCE ON THE COMMON LAW IN HONG KONG: A PARADIGM JURISDICTION
The Honourable Chief Justice Geoffrey Ma *
Hong Kong is a common law jurisdiction, this being mandated by the Basic Law, the constitutional document which governs the Special Administrative Region. It has often been described as one of the great laissez-faire, free economies but this is an incomplete description of how business and finance in fact operate, because of the need to take into account the legal infrastructure. In this context, the common law, while seeking to achieve those two objectives essential to commerce-certainty in the law and what can be termed commercial justice—has also tried to develop the law in a principled, but flexible, manner. This development of the law has arisen from real, not theoretical, experiences, particularly in the aftermath of financial problems or crises. The fundamental principles of commercial law are largely judge created and statute recognises this. This lecture deals with these facets of business and finance from a Hong Kong perspective.
It is a characteristic of common law jurisdictions that there are perennial debates on judicial activism. These discussions usually take place in the context of public law but a cogent argument can be made for this debate to be engaged regarding the law of business and finance. In common law jurisdictions, much of the law that is referred to as commercial law has been driven, if not created, by the courts—to the extent that one can quite comfortably say that business and finance are actually dependent on the common law and on the good commercial sense of its judges1 to deliver commercial justice. In the same way that the concept of justice2 (beyond the simple definition that merely equates it with a rudimentary sense of fairness) requires a mix of different components to be evaluated depending on context, it is important to analyse this concept as it applies to commercial law bearing in mind the tensions that can pull in different directions. These tensions include certainty or predictability, a just result in any given case, the practice of particular markets and also the public interest in preventing unconscionable or inequitable
* Chief Justice, Hong Kong Court of Final Appeal. This is the slightly revised text of a talk delivered as the Bapsybanoo Marchioness of Winchester Lecture 2018, in the series “The common law and finance: perspectives from the bench”, at the University of Oxford, on 7 November 2018. I am grateful for the assistance I have received from the Judicial Assistants of the Hong Kong Court of Final Appeal: Mr Harry Chan; Mr Griffith Cheng; Ms Samantha Lau; Mr Adrian Lee; Mr John Leung; Mr Wing So; Ms Hayley Wong; Mr Jasper Wong.
1. This is where the activism comes in. As we shall presently see, judges have for a long time been utilising the tool of commercial good sense in deciding business and financial cases.
2. This, after all, is the core business of the courts and judges.
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