tim's experiment

It is becoming increasingly easy to believe that judges of the Court of Appeal are beamed down to us from another planet, where they spend the early part of their lives completely insulated from life as most people live it in Hong Kong.

Consider the judgement of their lordships in the recent case of Mr Donald Tsang’s appeal against his conviction for misconduct in high office.

I have no quarrel with the rejection of his appeal against conviction. It is a nice irony that the man who vandalised our public housing system should be brought low by a penthouse flat for his own use. Let them eat subdivided apartments, as Marie Antoinette might have said.

Nor can there be any quarrel, I suppose, with the reduction of his sentence to one year. A year is a long time. It would be nice to see more awareness of this in the cases of poor and non-famous people who are jailed for decades at the urging of the same judges.

What had me choking on my port (I was on holiday in Portugal when this came out) was the way their lordships dealt with the matter of costs, which went like this:

On the reduction of legal fees, the judges said although Tsang and his wife had around HK$50 million in their bank accounts, their savings must have been significantly reduced after hiring top lawyers in three trials. They said Tsang is unlikely to start another career and can only resort to what is left of his savings and pension.“Financially, the Costs Order may have a crippling effect on the applicant,” the judges said.

The judges seem at this point to be assuming rather a lot. I have some difficulty in believing that Mr Tsang, who in his well-publicised socialising with millionaires must have received a good deal of financial advice, has kept the entirety of his savings in bank accounts.

One has to wonder about the possibility of other assets which can be monetised without too much trouble. Are there really no Ming vases, no gold bricks, no shares in the British Virgin Islands or in Virgin Islands of other nationalities?

Clearly at Mr Tsang’s age there can be no question of another career in the usual sense, but does that really mean no hope of other income?

Well let us follow the judges in assuming that there will be no paid motivational speeches, no directorships in the gift of Mr Tsang’s former friends, no book contracts and no advisory posts.

The question we are left with is this. Is someone aged 73 to be regarded as “financially crippled” if his financial reserves are reduced from $50 million to $45 million by an order to pay $5 million in legal costs?

Let us suppose that one of the Tsangs can be expected to live to 100. This means that the $45 million has to last for 27 years. We will ignore for the purposes of this calculation the year or so Mr Tsang may spend in a rather Spartan hotel at our expense. So the Tsangs, or the surviving Tsang, will have to get by on $1.6 million a year or $138,000 a month. This may usefully be compared with the average monthly salary in Hong Kong, which is – according to the relevant department — $15,897.

The Tsangs will also, of course, qualify for two lots of fruit money (bringing their monthly income up another $6,000 or so) cheap trips on public transport, medical vouchers and other goodies showered on us old folk by our generous leaders.

Alternatively they might wish to invest their remaining $45 million and live on the proceeds, which would come, at a modest 4 per cent yield, to $1.8 million a year or $150,000 a month. Another possibility would be an annuity along the lines of the government’s recently announced HKMC Annuity Plan. The plan itself, actually, is clearly intended for people even more financially crippled than the Tsangs, because the upper limit is only $1 million.

Assuming, though, that a private sector version of equal generosity could be found with no upper limit on the amount purchased, the Tsangs’ nest-egg would earn a guaranteed lifetime monthly income of $278,000 (if the life concerned is Mrs Tsang’s) or $316,000 if we decide Donald is a better bet.

The details are, in any case, not too important. Suffice it to say that the Tsangs will clearly not be reduced to collecting cardboard boxes for a living. The incidence of legal costs frequently results in unfairness. This is generally treated as an unavoidable deficiency in the system which cannot be remedied without greatly reducing the income of lawyers, and hence cannot be remedied at all.

It would be nice to think that from now on litigants who would be financially crippled by an order for costs will be spared the full rigour of the system. But this case was not, perhaps, a good place to start this new arrangement.