Comments on the Consultation Paper on the Proposals of the SCCLR Made in Phase 1 of the Corporate Governance Review
- The Hong Kong Bar Association ("HKBA") has
of course not sought to duplicate the SCCLR’s work in reviewing the
substantive law on corporate governance in Hong Kong and other jurisdictions,
but seeks to comment constructively on the Proposals.
- The HKBA recognises the importance of the reform of
corporate governance, and the opportunity available to Hong Kong to
try to introduce a modern system of regulation (legal and internal)
which enables dynamic businesses to flourish whilst maintaining their
- It is not apparent from the Consultation Paper that
the SCCLR has had the benefit of reports on New Zealand and Canadian
law on corporate governance (para. 1.03). As jurisdictions which have
undergone reform in this area, their systems may also warrant examination.
- In so far as the SCCLR proposes to adopt models from
other jurisdictions, the HKBA invites the SCCLR to make very clear the
extent to which it adopts the foreign model, with or without modifications.
Once the Proposals make their way into legislation, it will be important
for the purposes of interpretation for the lawyers and the court to
know to what extent regard may be had to foreign jurisprudence, in particular
- The HKBA considers that companies whose business is
managed or controlled in Hong Kong (irrespective of whether they are
companies listed on the Stock Exchange of Hong Kong Limited ("SEHK")
or not) should prima facie be subject to Hong Kong corporate governance,
notwithstanding they are not incorporated in Hong Kong. This is consistent
with the promotion of good corporate governance in Hong Kong, as opposed
to the good corporate governance of Hong Kong incorporated companies.
Such a jurisdictional matter would have to be embodied in statute, and
would have to be consistently applied.
- The HKBA expresses no view on the desirability of
codifying directors’ duties but would like to put forward the alternative
views formed by some members for SCCLR’s consideration.
- Certain members are in favour of the views expressed
by SCCLR (para. 6.13), the reason being that unless the law in this
respect could be fully and comprehensively codified, there is little
point in making any attempt to codify part of the law.
- On the other hand, certain members have queried whether
it is really unnecessary or undesirable to codify directors’ duties,
the main reason being whilst lawyers may find the law certain as to
the nature of directors’ duties, it cannot be said that such law is
easily accessible to businessmen, particularly directors of small and/or
family companies. Codification would make a statement of the principal
duties of directors readily available to directors and shareholders,
and should serve to promote good governance. If the law is certain,
that permits codification without great controversy or difficulty. The
SCCLR’s objections (para. 6.13) are surmountable in that:-
- the codified statement of duties may be expressly
stated to provide an inclusive rather than exhaustive list, setting
out duties which are already well established and allowing room for
addition by case-law and/or amendment;
- public awareness of a director’s principal duties
must be more desirable than a lack of such awareness, even if legal
assistance may be required as to the niceties of the law in a particular
set of circumstances;
- the courts’ ability to develop and refine the
principles by case law may be expressly stated/preserved; and
- a finding of breach of duty will of course be dependent
on the facts, but the proposal under consideration is whether to codify
the duties, and not to codify the situations in which there will be
- On that view, codification is particularly desirable
in the case of misappropriation of company assets, fraud and dishonest
acts (even if no specific sanction is imposed in relation to such breaches).
- It is doubtful whether the Code of Best Practice would
have the merit suggested by SCCLR (para. 6.15) in relation to smaller
companies. If, contrary to the view set out in paragraphs 8 and 9 above,
the SCCLR maintains that codification of there is no codification of
directors’ duties is not necessary or desirable, the HKBA suggests
that consideration a requirement (alternativelymechanism encouragement)
be devised to allow for a basic Code of Best Practice to to be incorporated
in the Articles of Association, for example, by inserting them in Table
A. Unless that is done, it is doubtful whether the shareholders or directors
of smaller companies would ever consider the question of adopting any
such Code of Best Practice until they find that the directors have mis-conducted
themselves in the management of the companies.
Voting by Directors in relation
to Directors’ Self-dealing
11. The HKBA expresses no firm
view on this issue, given the opposing views expressed by different
members which are summarised in paragraphs 12 to 23 below.
12. Some members support SCCLR’s
proposal that the exception in Regulation 86 of Table A which allows
an interested director to vote on contracts or arrangements in which
he is interested should be amended in the manner proposed (para. 7.09(a),
(b) and (d)). However, they believe that a mechanism should be devised
and enacted to enable the disinterested directors to approve the transactions
or arrangements even though they cannot form a quorum. In this way,
the expenses and delay in convening shareholders’ meetings to approve
such transaction can be minimised. To prevent any abuse, the mechanism
should only be available where the transactions or arrangements do
not exceed a certain value (e.g. a defined percentage of the net assets).
13. Any de minimis exception
should be drafted so as to avoid a transaction which would otherwise
fall foul of the rule being structured as a series of transactions
each of which falling within the de minimis exception.
14. These members also consider
it desirable to mandate the interested director to make a disclosure
of his interest on an ad hoc basis (para. 7.09(c)) for the
additional reason that given the informal nature of directors’ proceedings,
in particular, the absence of any requirement to specify the nature
of the business to be transacted at directors’ meetings, it is often
impractical or impossible for directors to give advance notice of
his interest in a particular transaction.
15. Members holding the opposing
view consider the proposal that the law should be amended to impose
a general prohibition against directors of both listed public companies
or private companies to vote in transactions in which they have an
interest (except under certain statutorily exempted situations) to
be a major change in the existing law in Hong Kong (2.03(a)). The
current emphasis is only on disclosure. The impact of the proposal
on private companies particularly warrants further consideration.
16. The flexibility currently
afforded by section 162(2) of the Companies Ordinance will be taken
away by the proposal under paras. 2.03(b) and 7.09. The proposal requires
that an interested director be statutorily required to give an ad
hoc notice in addition to a general declaration of interest
already given in advance. The rationale given is that an ad hoc declaration
of interest would remind the board of directors of possible conflicts
when the matter is put forward for consideration. The provision allowing
general declarations of interest would apparently then be rendered
17. The proposal to widen the
ambit of section 162 of the Companies Ordinance to cover "transactions",
"arrangements" and "connected persons" is yet
another move to incorporate into the general regime of company law
specific concepts presently applied under the Listing Rules to only
public companies listed on SEHK.
18. These concepts are understandably
designed to be wide when applied to listed companies in order to maximize
protection for the investing public. It is not uncommon that these
concepts, in particular "connected persons", create problems,
making it necessary for listed companies to seek professional advice.
19. Compliance officers of listed
companies may be comforted by the fact that they enjoy the option
of consulting with the regulators at SEHK at no extra cost. This option
however would not be available to an operator of a private company.
20. It is recognized at para.
3.04 of the Proposals that for private companies, without any mandatory
minimum number of independent directors, there may difficulties in
having the necessary quorum of disinterested directors. The proposed
solution offered is to have the matter put to the vote by shareholders.
However, this solution apparently has not taken into account situations
where all the shareholders and directors are the same individuals
and they are all interested, in their personal capacity, in the contract
with the private company that they wholly own and control.
21. Paragraph 13.08 of the Proposals,
although entitled "Whether the requirement to abstain from voting
should be incorporated into the law", does not address this question.
Further consideration should perhaps be given to allow a wider spectrum
Shareholder Approval for Connected
Transactions of Significance Involving Directors
22. Generally, the HKBA agrees
with the approach of the SCCLR. The HKBA expresses no firm view on
the questions posed by SCCLR in paragraph 8.25 of the Proposals but
(1) Where the intention is
to achieve shareholder approval in respect of significant transactions
involving directors, a significant transaction may objectively
be one which is significant by reference to turnover or profitability,
as well as by reference to net asset value.
(2) It is clearly desirable
that there be no ambiguity about what would be a significant transaction
for the purposes of obtaining approval, so that the directors
(3) In the event that the
SCCLR considers there is more than one relevant measure of significance,
the HKBA suggests consideration of a test with more than one criterion
i.e. a requirement for shareholder approval where the transaction
is "significant", with "significant" being
defined e.g. where value of transaction is x% of net asset value,
or y% of previous year’s (or average over * years) turnover.
(4) Any requisite percentage
or de minimis figure is necessarily arbitrary. A balance
must be drawn between efficient conduct of business by the board
and shareholder control over significant connected transactions.
The HKBA comments that a requisite percentage in excess of 10%
of net asset value would be surprising.
23. As to the SCCLR’s proposal
at paragraph 8.29(d) in imposing criminal penalties where there is
a breach of the proposed statutory provision within one year of liquidation,
is this modelled on another jurisdiction’s provision? Is the SCCLR
giving general consideration to insolvency situations in the course
of its corporate governance review? In particular, is it considering:
(1) other civil remedies for
the benefit of the insolvent company e.g. a "transaction
at an undervalue" provision (as in bankruptcy in Hong Kong
at s.49 of the Bankruptcy Ordinance, and in English corporate
insolvency at s.238 of the Insolvency Act 1986), which would give
the Court wide powers in the case of transactions with "connected
persons" without the company getting adequate consideration
within a specified time of liquidation; and
(2) a statement of directors’
duties in an insolvency context e.g. the English "wrongful
trading" provision (s.214 of the Insolvency Act 1986), which
effectively requires a director, once he knows or ought to conclude
that there is no reasonable prospect that the company would avoid
liquidation, to take every step with a view to minimising the
potential loss to the company’s creditors.
Transactions between directors
or connected parties with an associated company
24. Agree with the proposals of SCCLR.
Nomination and election of directors
25. Generally, the HKBA supports
SCCLR’s view that provisions should be made to preserve or enhance
the shareholders’ right to nominate and elect directors in the manner
proposed in paragraph 10.29 of the Proposals.
26. However, the HKBA believes
that any mechanism to enhance the shareholders’ right to nominate
and elect directors can easily be defeated by the controlling shareholders
(through their nominees) in exercising their power to remove other
directors at Board meetings where the articles of association so provides.
The HKBA believes that consideration should be given to limit the
power of the directors to remove other directors without proper or
27. The proposal relating to the
requirement to set out the biographical details of a candidate for
directorship (para. 10.29(b)) should be effected by statute rather
than through the rules of SEHK so that public companies whose shares
are not listed on SEHK will also be bound by such requirement.
28. In so far as it is proposed
that a formal procedure for the nomination of directors be encouraged
as a matter of best practice, the HKBA has some the same reservations
as those set out in paragraph 10 above. Even if the Code of Best Practice
is adopted by the companies and the directors have acted in breach
of it, it may be difficult for shareholders to complain about such
breach as the Court has persistently refused to consider whether good
corporate governance had been observed except where the standards
for such governance are laid down by the law, e.g. the Companies Ordinance
and the common law fiduciary duties of the directors.
Role of the independent director
29. No comment.
Self-dealing by controlling shareholders
30. It is understood that the SCCLR
(1) to require disclosure
of interest and abstention from voting by interested shareholders
in respect of (a) shareholder votes on transactions (b) ratification
of transactions between the company and directors or connected
persons, and transactions between associated companies and directors
or connected persons;
(2) that certain transactions
will not be capable of ratification in any event.
31. Some confusion may be caused
by the apparent interchangeable use of "waste of corporate assets"
(a US law concept) with "misappropriation of company assets".
32. Should the civil liability
of the interested shareholder proposed in paragraph 13.18(g) of the
Proposals extend to any situation in which (1) the transaction is
not ratifiable or (2) the transaction is not voidable ?
33. As to the criminal (and possibly
civil) liabilities, and presumptions, proposed in the event of a liquidation
within one year of the transaction, please see the comments at paragraph
34. Provision should also be made
for the situation where there are insufficient disinterested shareholders
to vote on the approval of a transaction.
35. Is the new statutory derivative
action intended to be in addition to or in substitution for the common
law procedure? Paragraph 15.25 of the Proposals suggests it will be
additional, whereas paragraph 15.27 suggests that it will be a substitution.
36. Given the objective of producing
a simpler procedure, it is submitted that the new action should be
a replacement for the common law, although the new action should be
capable of being developed by case law. It would be confusing and
undesirable to simply create additional avenues for complaint.
37. It is understood that the
SCCLR proposes the following statutory "derivative" action:-
(1) an action which may be
brought by shareholders at the time of the relevant wrongdoing,
present shareholders, directors and officers of the company, without
giving consideration of whether they are entitled to bring the
action on the company’s behalf;
(2) the wrongdoing must be:
- such as has not been approved or ratified by disinterested
- is not capable of ratification, alternatively,
- affects the personal rights of shareholders (para.
(3) the wrongdoing would be conduct
- default in relation to any rules or laws;
- breach of any fiduciary or statutory duty.
38. The proposals apparently suggest
not simply a new procedure / wider locus standi, but a new
substantive action, in so far as the proposals set out the grounds
for the action. If the SCCLR only proposes a new statutory procedure
for the determination of whether leave should be given to bring a
derivative action, this should be clarified.
39. However, if the proposals
are understood correctly, they appear to suggest that shareholders,
directors and officers may commence actions on behalf of the company
where they perceive a wrong to have been done to the company, without
there being any determination of their standing.
(1) Generally, this appears
to undermine the separation of legal personalities. This would
be a fundamental departure from established principles of company
(2) Although the common law
exceptions to the "proper plaintiff" rule are complex
and should be clarified and amended, that is not to say that the
proper plaintiff rule should be abolished or eroded more than
necessary to meet the requirements of minority shareholders.
(3) Two particular issues
arise: (a) standing to commence proceedings (b) standing to continue
Standing to commence proceedings
40. Is it right to permit anyone
other than a present shareholder to bring the action?
(1) What interest does a former
member have in bringing an action on behalf of the company? If
the company is successful, this will presumably only affect the
current value and/or the current management and only be in the
interests of the current shareholders?
(2) Directors and officers
of the company, whether past or present, should not be permitted
to commence a derivative action at all. They, who have no ownership
interest in the company, should not be given the right to commence
a derivative action to redress a wrong done to the company. If
the justification is that directors and officers owe a duty to
the company to commence an action to redress a wrong done to the
company, they can always do so by raising the issue at Board meeting
or bringing it to the attention of a shareholder. If the majority
of the Board does not support a decision to commence an action,
the director should be bound by such a decision. If the present
shareholders are happy with the management’s conduct, no action
should be permitted.
41. To give standing to anyone
other than present members will open the floodgates for interference
with management, and (in smaller companies) possibly fetter the conduct
of business whilst management deal with the actions.
Standing to continue proceedings
42. It is submitted that at some
stage of the proceedings when the allegations or issues have been
clearly stated, the Court should be required to consider whether the
plaintiff(s) should be permitted to continue with the action. For
instance, one important issue is whether it is in the company’s
interests generally (rather than just the plaintiff’s interests)
that the action be continued. For the avoidance of doubt, it is not
suggested that there be a preliminary issue or mini-trial to determine
standing, but that the issue be reviewed by the Court at a convenient
point in the proceedings. It may be necessary to coordinate with the
Civil Justice Reform, in which a proposal (#24) has been made to adopt
a procedural provision governing derivative actions.
43. In a particularly meritless
and/or vexatious case, the company may rely on the Court’s existing
jurisdiction and seek to strike out the action at an earlier stage,
prior to the consideration by the Court contemplated in paragraph
44. The consultation paper does
not address the question of against whom the new action will be available.
45. As to the grounds for the
application, (on the basis that the derivative action is intended
to allow interested persons to apply to the Court on behalf of and/or
for the benefit of and/or in the interests of the company where some
wrong has been done to the company where the company is unable or
unwilling to make its own application), it is suggested that:-
(1) a clear delineation is
required between the interests of the company and those of the
applicant. For example, whether or not the personal rights of
shareholders are affected is presumably an issue for the shareholders
to take up on their own behalf by personal action;
(2) the grounds for the application
be stated inclusively rather than exhaustively, to permit development
(3) a clear statement be provided
as to the status of previous case-law on the common law action,
and future case-law as a means of developing and refining the
46. Jurisdiction in relation to
overseas incorporated companies should be made clear, particularly
if the derivative action is to become a statutory substantive remedy.
47. It would be helpful to state
clearly the relationship between this derivative action and s.168A(2)(b).
48. The principal difficulties with
the existing remedy are:-
- the costs to be expended by the applicant not on
his own behalf but on behalf of the company;
(2) the lack of access to information.
49. In so far as it is suggested
that it is a difficulty or disincentive that a successful derivative
action will produce damages for the company and not the plaintiff
shareholder, it is submitted that no change should be made. The incentive
for the derivative action is to correct a wrong done to the company
in which the shareholder, as an owner, has an interest.
50. The HKBA supports the introduction
of an express power to the Court to order that the company indemnify
the applicant as to costs, and inspection of documents. The power
to indemnify the applicant as to costs should be unfettered and can
be exercised at any stage of the proceedings to ensure that the applicant
does not have to bear the burden of financing the costs of the action.
51. The HKBA invites the SCCLR
to consider introducing ADR in derivative and unfair prejudice actions.
(1) The parties initially
be encouraged to use ADR rather than required to do so, with the
use and effectiveness of ADR in such cases being monitored with
a view to making it mandatory in the future if it is successful
(e.g. Commercial Court in England).
(2) ADR may be particularly
attractive in circumstances where there has been a misunderstanding
of events or facts: ADR may permit earlier exchange of information
and views and may prevent costs being incurred.
(3) ADR may be particularly
attractive to family companies where the parties wish to avoid
having family members give evidence against each other in court.
(4) The introduction of ADR
offers a wider range of remedies to the parties: whereas ADR cannot
result in a winding up by the Court (which of course requires
a court order), it may permit settlement on commercial terms which
would not be within the Court’s jurisdiction (e.g. involve the
transfer of assets owned by different companies not before the
Court, or settlement of other disputes not before the Court at
the same time as part of a global package, or settlement on terms
which provide "personal" rather than commercial value).
52. It is suggested that detailed
procedural rules be introduced as part of the rules of Court, with
only the principal rules being introduced by company legislation.
Such procedural rules could include notice requirements, consideration
of leave to continue, access to information, costs, ADR etc. This
may permit more flexibility in amendment. Additionally, as a principal
downfall with existing shareholder remedies is that they are lengthy
and costly, the ability of the Court to exercise judicial control
at various stages would be valuable.
53. In so far as a minority shareholder
is concerned that there has been a wrong done to the company, which
the company itself will not pursue by action, the shareholder must
consider whether the derivative action or the unfair prejudice remedy
is the best way forward. To what extent is it possible to clarify
by statutory amendment (including the introduction of the new derivative
action) the appropriate procedure to remedy the corporate wrong?
54. As stated above, if the wrong
is to the company, then it is the company who should receive compensation
(although the shareholder plaintiff’s expenses, in particular legal
costs, ought to be indemnified by the company). An award of damages
in favour of a shareholder rather than the company should not be available
pursuant to s.168A where the wrong is to the company rather than the
55. If damages are an available
remedy, against whom can the orders for damages be made? It may be
difficult to justify a damages award against the company (to the detriment
of the shareholders generally, no doubt).
56. Is the proposal at para. 16.27
(c) necessary in the light of s.168A(2)(d)?
57. As to overseas companies, see
paragraph 5 above.
58. Is there any merit in attempting
to streamline the unfair prejudice procedure by the creation of statutory
presumptions as recommended by the Law Commission of England &
Wales i.e. (1) a presumption of unfair prejudice where there has been
exclusion from management of a person with more than 10% of the voting
rights in a company which is, or is substantially, an owner-managed
company and (2) a presumption that the valuation of minority shares
should be on a pro rata, not discounted, basis? As noted by the Law
Cmn., the presumptions would shift the burden of showing otherwise
on to the persons likely to be in the best position to bear the burden
59. Is there any merit in proposing
new articles of association for adoption by private companies e.g.
an exit article, an arbitration article, a valuation procedure article?
60. The SCCLR’s recommendation
for clarification of the law is noted. The HKBA supports the desirability
of avoiding a duplicity of actions in respect of the same wrong.
Orders for inspection
61. The HKBA agrees that there
should be a facility for inspection of company records but has some
reservations about the proposal.
62. Requirement to make application
(1) To require a shareholder
who wishes to obtain access to the company records to apply to
the court may pose too much of an obstacle to the shareholder,
given the time and expenses associated with such an application;
(2) The HKBA suggests that
consideration be given to devise a mechanism whereby:
- the shareholder can obtain access as of right
to certain company records (to be specified by statute) upon written
request to the company;
- in any other situation, the shareholder should
make written request to the company for access to specified company
records (query whether he need provide any reason), and if the
company refuses it must state its reasons for refusal; whereupon
the shareholder may make application to Court; and
- where there is urgency or other good reason
for not first applying to the company, the shareholder may make
direct application to the court without going to the Court in
63. The two-fold requirement of
satisfying the Court that the shareholder is "acting in good
faith" and the inspection is "for a proper purpose"
appears to be too onerous and may be subject to abuse by directors
who do not want shareholders to have access to the company records.
The HKBA therefore recommends that the shareholder should only be
required to satisfy the Court that the inspection is made "for
a proper purpose" and not further or otherwise.
64. The shareholder should be
able to recover the costs of the application for inspection if it
is shown that the inspection is required for a proper purpose. This
is easier to justify where the company has already had an opportunity
to provide the documents voluntarily.
Other Powers of the court
65. The SCCLR’s proposal in
respect of giving the Court a general power to grant injunctions against
any contravention of the Companies Ordinance or any breach of fiduciary
duties on the application of any affected person or a relevant authority
appears too wide.
(1) In contrast to the existing
power of the Court to order injunctions in an appropriate case,
the SCCLR’s proposal is to permit this power to be exercised
whether or not it appears that the proposed injunctee has previously
engaged or intends to engage in the conduct to be restrained,
and whether or not there is an imminent danger of substantial
person. With respect, this could lead to a deluge of applications,
which might affect the ability of a company to continue its business,
irrespective of whether there is a risk of the relevant conduct
taking place and whether or not there is a risk of such conduct
(2) "Any affected person"
also appears very wide.
Damages in addition to or instead
66. The proposal that the Court
should also have a general power to order a person to pay damages
to any other person, in addition or in substitution for the grant
of an injunction requires more consideration or explanation. A cross-undertaking
to pay damages for an injunction improperly obtained is understandable.
An order for damages resulting from breach of an injunction is also
understandable. However, a power to order damages in favour of any
person requires more consideration, particularly in the corporate
context, where the envisaged wrongs are corporate wrongs so that the
company itself should prima facie be entitled to compensation. The
company can of course pursue compensation on its own behalf, or by
Orders as to costs
67. As indicated above,
the proposal to permit the Court to order that a shareholder’s costs
be indemnified by the company in derivative and unfair prejudice actions
68. See paragraph 5 above.
The role of regulators
69. No comment.
Filing of financial statements
- The HKBA expresses no firm view on this issue but
seeks to summarise the views expressed by some members in paragraph
73 to 76 below.
71. The proposal that private
companies with limited liability should file their financial statements
with the Companies Registry (CR) for public inspection is to be welcomed.
It gives traders and creditors more confidence to trade with Hong
Kong private companies. Litigants can also decide whether to pursue
a claim against a private company with the benefit of the information
from its financial statements.
72. The proposal that private
companies ought to file their financial statements with the Companies
Registry for public inspection is premised on the objective of allowing
their suppliers/creditors to have better access to their financial
information. As a result, better risk assessment can be achieved.
73. In practice, suppliers and
creditors of private companies generally would require and rely on
personal guarantees by directors or shareholders or other security.
This practice in fact resulted from the not uncommon fact that the
private company in question is only a business vehicle for a specific
project. Requiring it to file annual accounts may often not reveal
anything of substance.
74. Investors, creditors or suppliers
of listed companies already have access to the financial position
of these companies because they are obliged under the Listing Rules
to publish their accounts with elaborate disclosures and notes at
regular intervals. Such financial information is also complemented
by mandatory disclosure of details of "notifiable transactions"
as well as, where appropriate, forecasts and other business plans
as may be required under the Listing Rules.
Inconsistencies between the audited
financial statements and other financial information contained
in the directors’ report and other sections of the annual report
75. There is no good reason why
the Companies Ordinance should not have enabling provisions for auditors
to include in their reports on the financial statements any inconsistencies
between the audited financial statements and financial information
contained in other sections of the annual report. Indeed, the SCCLR
may consider making it compulsory for auditors to record such inconsistencies
in their reports on the financial statements.
Accounting reference date
76. The provision of an accounting
reference date, an accounting reference period and financial year
will be an improvement with the benefit of certainty and consistency.
Standards setting process
77. Agree with paragraphs 26.14 and
26.15 of the Proposals.
Body to investigate financial statements
78. The setting up of a body with
authority to investigate financial statements and enforce compliance
is essential in giving effect to the various measures proposed to
improve corporate reporting.
Quality of audit practice and monitoring
of audit practice
79. There is in principle no objection
to possible improvements to the mechanism for monitoring the quality
of audit practice.
Revision of audited financial statements
and related matters
80. As disclosure of information
is a continuous process, the proposals set out in paragraph 29.10
of the Proposals are to be welcomed.
14th December 2001