Introduction
We discussed the judgment of the Court of First Instance (“CFI”) in Leung Chun Kwong v Secretary for the Civil Service and Another [2017] CFI 736; HCAL 258/2015 and also its appeal judgment of the Court of Appeal (“CA”) ([2018] HKCA 318; CACV 126/2017) respectively in our Newsletters June 2017 and June 2018 issues. This year, the appellant (“Mr Leung”) took his appeal to the Court of Final Appeal (“CFA”) fighting for his rights as a gay couple to enjoy the same civil servant spousal benefits as those of his heterosexual counterparts and to elect joint salaries tax assessment. On 6 June 2019, the CFA unanimously allowed the appeal and delivered its judgment ([2019] HKCFA 19; FACV 8/2018) overturning the CA’s judgment.
Background
Mr Leung is a Hong Kong permanent resident of Chinese nationality. He has been employed by the Government of the HKSAR as an immigration officer since 2003. Mr Leung is a homosexual and, in 2014, he married his gay partner, Mr Scott Adams, in New Zealand, where same-sex marriage is legal.
The Benefits Decision
As a civil servant, Mr Leung is entitled to medical and dental benefits provided by the Government under the Civil Services Regulations (“CSRs”). These benefits are extended to a civil servant’s family including his “spouse”. Having regarded same-sex marriage is not recognized in Hong Kong, the Civil Service Bureau denied Mr Leung’s right to update his marital status and, as a result, his spouse, Mr Adams was denied access to the spousal benefits under the CSRs. Mr Leung complained to the Secretary for the Civil Service (“SCS”). The SCS maintained Mr Leung’s same-sex marriage with Mr Adams was not a marriage within the meaning of Hong Kong law, hence Mr Adams was not Mr Leung’s spouse for the purpose of CSRs and accordingly, Mr Adams was not entitled to spousal benefits (“Benefits Decision”).
The Tax Decision
Under section 10 of the Inland Revenue Ordinance (Cap. 112) (“IRO”), salaries tax of spouses is to be paid separately unless they elect to be jointly assessed. Mr Leung filed tax return and sought to elect for joint assessment of salaries tax with Mr Adams. The election was refused by the Commissioner of Inland Revenue (“CIR”) on the ground that Mr Leung and Mr Adams were not husband and wife for the purposes of the IRO (“Tax Decision”).
Consequently, Mr Leung brought a judicial review against the SCS regarding the Benefits Decision and the CIR regarding the Tax Decision.
The lower courts’ judgments
The CFI’s rulings
The CFI held that the Benefits Decision constituted a difference in treatment of Mr Leung was, at least, indirectly discriminating against his sexuality and was therefore unjustifiable. The Honourable Mr Justice Anderson Chow allowed Mr Leung’s application for judicial review of the Benefits Decision. His Lordship rejected Mr Leung’s challenge of the Tax Decision on the basis that construing “marriage” under the IRO as including same-sex marriage would be inconsistent with its meaning under the Hong Kong statutes. Mr Leung’s application for judicial review of the Tax Decision was dismissed.
The CA’s rulings
The SCS appealed the CFI’s judgment and Mr Leung cross-appealed. The CA overturned the CFI’s ruling on the Benefits Decision and held that although differential treatment may constitute indirect discrimination against same-sex married couples on the ground of sexual orientation, it was reasonably necessary to achieve the legitimate aim of protecting and not undermining the status of marriage in Hong Kong, being a voluntary union of a man and a woman. The CA upheld the CFI’s ruling that “marriage” in the IRO should not be widened to include same-sex marriage by statutory construction. As a result, the CA unanimously affirmed the constitutionality of both the Benefits Decision and the Tax Decision. Mr Leung appealed the CA’s judgment to the CFA.
The CFA’s judgment
The nature of discrimination
In an unanimously judgment, the CFA (comprising Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Fok PJ, Mr Justice Tang NPJ and Mr Justice Gleeson NPJ) stated that it is a cardinal principle of a system governed by the rule of law that all persons are equal before the law and that principle is enshrined in the Basic Law and the Hong Kong Bill of Rights. As the CFA made clear in its judgment in QT v Director of Immigration(2018) 21 HKCFAR 324 (“QT”), unlawful discrimination is “fundamentally unacceptable”. However, the law has to draw distinctions between different situations or types of conduct, to which different legal consequences may attach. Principles have therefore been established “for determining when distinctions drawn by legal or administrative measures are rational and fair and when such distinctions constitute unlawful discrimination”.
In QT, the CFA acknowledged that there are three forms of differential treatment, which may be described as discriminatory. They are: (1) direct discrimination where like cases are not treated alike; (2) direct discrimination where unlike cases are treated in the same way; and (3) indirect discrimination where an ostensibly neutral criterion is applied which operates to the significant prejudice of a particular group.
Differential treatment and the justification test
The CFA ruled in QT that in case of any alleged unlawful discrimination, the correct approach is, first, to determine whether there is differential treatment on prohibited ground and if so, to examine whether it can be justified. Differential treatment which is justified does not constitute unlawful discrimination. However, where differential treatment is not justified, it is unlawful discrimination.
The initial step of determining whether there is differential treatment on a prohibited ground essentially involves a comparison exercise. The complainant needs to demonstrate that he or she has been treated differently to a person in a comparable position and that the reason for this difference in treatment can be identified as a prohibited ground (such as race, religion or sexual orientation). Only after this is demonstrated does it then become necessary to consider whether such differential treatment is lawful. If the treatment is held to be unlawful, then the complainant will be entitled to remedies.
In order to determine whether differential treatment is unlawful, the courts apply the same test used to determine if incursions into constitutionally protected rights are lawful. When applied in the context of an analysis of constitutionality, that test is usually referred to as the “proportionality” test. When applied in the context of determining whether differential treatment is unlawful, that test is usually referred to as the “justification” test, which consists of four steps or elements: (1) does the differential treatment pursue a legitimate aim; (2) is the differential treatment rationally connected to that legitimate aim; (3) is the differential treatment no more than necessary to accomplish the legitimate aim; and (4) has a reasonable balance been struck between the societal benefits arising from the application of differential treatment and the interference with the individual’s equality rights.
The parties’ respective cases
It was Mr Leung’s case that the Benefits Decision and the Tax Decision constitute unlawful discrimination against him on the ground of his sexual orientation. The marriage criterion applied by the SCS for spousal benefits and the CIR for joint tax assessment for a married couple is limited to heterosexual married couples and excludes same-sex married couples. As a gay man, Mr Leung is never going to be able to qualify within the marriage criterion applied by the SCS and the CIR.
The SCS and the CIR contended that the Benefits Decision and Tax Decision did not amount to unlawful discrimination. It was conceded by them that there is different treatment on ground of sexual orientation amounts to indirect discrimination. However, the SCS and the CIR argued that the differential treatment is not an unlawful discrimination because it is justified. They submitted that there is a legitimate aim in protecting the unique status of heterosexual marriage, being the only form of marriage recognised in Hong Kong and deeply imbedded in our legal system.
Although Mr Leung asserted that his claim for unlawful discrimination on the basis of his same-sex marriage places him in a relevantly comparable position to a man married to a woman, the CFA considered that this appeal does not concern the question of whether same-sex couples have a right to marry under Hong Kong law. It was not argued in this appeal that the constitutional freedom to marry and raise a family makes marriage available to same-sex couples.
Whether differential treatment on the basis of sexual orientation
The CFA agreed that protection of the traditional family institution serves a legitimate aim as supported by a number of authorities. The CFA considered the issue in this appeal was whether the differential treatment of Mr Leung was rationally connected to the legitimate aim of the protection of the traditional family in the circumstances of the present case.
The CFA did not accept that denying Mr Leung’s spousal employment benefits (i.e. the Benefits Decision) and his right to elect for joint tax assessment (i.e. the Tax Decision) is rationally connected to protecting institution of marriage in Hong Kong. In particular, the CFA rejected the CA’s analysis that restricting the benefits to opposite-sex married couples was justified on the ground that heterosexual marriage is the only form of marriage recognised under the laws of Hong Kong, and considered this analysis as “circular”. The CFA did not agree that heterosexual marriage would be undermined by the extension of the employment and tax benefits, which were merely to acknowledge the economic reality of the family unit or to encourage the recruitment and retention of staff, to same-sex married couples. Besides, the CFA remarked that the Benefits Decision is in contrast to the Government’s published policy as an equal opportunities employer. Furthermore, given that the IRO to some extent recognizes polygamous marriage by extending the meaning of “marriage” to that between a man and his principal wife, the CFA found it difficult to accept that it is necessary for the IRO to promote institution of marriage (being heterosexual and monogamous).
Accordingly, the CFA held that neither the Benefits Decision nor the Tax Decision is rationally connected to the legitimate aim and that the differential treatment is not justified but constitutes an unlawful discrimination.
Implications on LGBT community in Hong Kong
The CFA’s judgment marks a landmark victory for Hong Kong’s LGBT community. Following the CFA’s decision, it is expected that same-sex married couples may now be entitled to other benefits or policies that have previously been enjoyed by married heterosexual couples only.
Does the CFA’s decision imply that same-sex marriage will be recognised in Hong Kong soon? It appears not. In its judgment, the CFA repeatedly stressed that it was only dealing with the benefits to the same-sex married couples but not legalising same-sex marriage in Hong Kong. The CFA in fact acknowledged that the traditional family institution in Hong Kong constituted by marriage, being the voluntary union for life of one man and one woman to the exclusion of all others, should be protected.
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This article was originally published on ONC Lawyers.
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