Update on Hong Kong Compensated Surrogacy Law

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Parental Orders, Criminal Liability and the Authorization of Expenses Trap in Hong Kong: Has the Trap Door Opened?

Two recent cases may have opened the door to relaxing Hong Kong’s legislative restrictions on surrogacy. The Hong Kong Human Reproduction Technology Ordinance, Cap. 561 (HRTO), s17(1)(a)(i) makes it a criminal offense for Hong Kong resident Intended Parents (IPs) to make a payment of any amount to agents or middle men anywhere in the world for the purposes of locating and/or hiring a surrogate mother with a view to making a surrogacy arrangement. The issue of s17 HRTO criminal liability was highlighted in detail in my two articles published in 2018: International Family Law Journal article, "Avoiding the cross hairs - criminal liability arising from surrogacy arrangements in Hong Kong and the UK" ([2018] 1FL 95) and in the Hong Kong Lawyer.

S17(1) HRTO states: No person shall –
  1. whether in Hong Kong or elsewhere, make or receive any payment for –
    1. initiating or taking part in any negotiations with a view to the making of a surrogacy arrangement;
    2. offering or agreeing to negotiate the making of a surrogacy arrangement; or
    3. compiling any information with a view to its use in making, or negotiating the making of, surrogacy;
  2. seek to find a person willing to do any act which contravenes paragraph (a);
  3. take part in the management or control of a body of persons corporate or un-incorporate whose activities consist of or include any act which contravenes paragraph (a); or
  4. carry out or participate in any act in furtherance of any surrogacy arrangement where he knows, or ought reasonably to know, that the arrangement is the subject of any act which contravenes paragraph (a).

Two new Hong Kong cases have finally recognized the impact and effect of s17 HRTO:
  1. FH, MH and WB, HB [2019] HKCFI 1748 (the FH case) - judgment date 15 July 2019; and
  2. Re A&B, HCMP 1571/2018 (the A case) - judgment dated 14 October 2019
These are the first cases in which the issue of criminal liability under s17 has been fully recognized and addressed. As explained in my articles, the only two reported surrogacy cases in Hong Kong up to the date of publications of those articles - D (Parental Order) [2014] HKEC 1948 and S v J (Surrogacy: Wardship) [2017] HKEC 1998 - had not done so, and the conflict between the criminal liability imposed by s17 HRTO on the one hand and the authorizing of expenses section under s12 of the Parent and Child Ordinance, Cap. 429 (PCO) on the other remained as a much-misunderstood trap (also see the introduction in my February 2018 IFL article where I stated, "it is of concern that some family practitioners in Hong Kong are ignoring s17 HRTO and the definition of 'payments' in s2(1) HRTO and assume that the law is exactly the same in Hong Kong as it is in the UK. It is not."). I describe this as the Authorization of Expenses Trap (AET).

The first case: In FH, the IP parental order applicants, FH and MH, had been married for 17 years. They were U.S. citizens, but were also Hong Kong permanent residents. They had been introduced to a surrogacy agency in California which, in turn, introduced them to WB and HB, a married couple, with whom they entered into a gestational carrier agreement. WB as the gestational carrier (GC) gave birth to the twins in California. Eight days after the birth of the twins, the California court declared the applicants genetic and legal parents of the twins; and declared the GC and her husband not to be legal parents of the twins.

On the twins' birth certificates, issued in California, the applicants were recorded as their parents. About two months after birth, the twins entered Hong Kong as visitors on the strength of their parents' U.S. passports. They were granted dependent visas by the Director of Immigration without having to provide evidence of the surrogacy arrangements.

In mid-January 2018, FH made an application to renew the twins' dependent visas. On 20 March 2018, in the course of answering the requisitions of the Director through solicitors, FH disclosed to the Director that the twins were born out of a surrogacy arrangement and his intention to bring the application for a parental order.

The IPs did not know that they needed a Hong Kong parental order. Despite having had California legal advice the court held that, “FH only became aware of the need for a parental order after he received a letter from the Director on 20 February 2018 asking for, among other details, antenatal check documents and pregnancy photos of MH during her pregnancy with the twins and five family photos taken on the day of birth of the twins, and different periods thereafter."

FH then sought Hong Kong legal advice and discovered that a parental order was needed under Hong Kong law, regardless of the California position. He also was advised that it would be difficult to seek independent visas for the twins without first establishing parentage over them under Hong Kong law. And, crucially, without dependent visas or a parental order, the twins could not be enrolled into a kindergarten in Hong Kong.

The court highlighted the other consequences of not making a parental order and stressed that a parental order has the effect of strengthening the chance of a child born through surrogacy becoming a Hong Kong permanent resident. It referred to the U.K. case of In A v P [2012] Fam 188 in which that court described the consequences of not making the order:
  1. There is no legal relationship between the child and his biological father who is also the commissioning father.
  2. The child is denied the social and emotional benefits of recognition of that relationship.
  3. The child may be financially disadvantaged if he is not recognized legally as the child of his father (in terms of inheritance).
  4. The child does not have a legal reality which matches the day-to-day reality.
  5. The child is further disadvantaged by the death of his biological father.
The court found that, “it is not in the best interests of a child that he be granted only a visitor's or dependent's visa while the commissioning parents have right of abode in Hong Kong. A parental order has the effect of strengthening the chance of the child becoming a Hong Kong permanent resident.”

Mr. FH and Mrs. MH had two significant hurdles to overcome:
  1. they had applied for the parental order too late; and
  2. they had - clearly inadvertently - committed a criminal offence contrary to s17 HRTO. For both hurdles, the court found a pragmatic workaround. 

The Six-Month Time Limit Under s12(2) PCO

In order to obtain a parental order, PCO s12(2) requires married IPs to apply for a parental order, “within six months of the birth of the child”. The IPs were outside the six-month limit.

The court found that the six-month time limit in s12(2) PCO was “not ambiguous,” but strict adherence to it can lead to [an] “absurdity”; the judge stated that, "if an application out of time is dismissed, the absurd result would be that a child could have two sets of legal parents, one set in Hong Kong and the other in the state where the child was born. The child will have no identity as the commissioning parents' child in Hong Kong although they have been taking care of him/her. At the same time, the surrogate mother may have given up, or, (as in the present case,) never had parental rights to the child in the jurisdiction where she has given birth. So, if the Director does not grant the child resident status here, should the child be "deported" to the place where the surrogate mother is and where the child is not wanted?”

The court found that “given the significance of a parental order, the Legislature could not have intended such consequences on the child who has not chosen the manner through which he came into this world. It would be absurd to suggest that an application made even one day out of time should deprive the child of his/her legal relationship, status and identity to the commissioning parents for life. Such a consequence would be totally disproportionate to the one-day delay and plainly against the welfare principle.”

The court decided it had the power to extend the time, having regard for the welfare principle and principles of statutory interpretation, and applied the U.K. case of Re X (A Child) where the court extended the time limit. The welfare of a child prevails over his/her parents’ delay.

The court also decided there was further authority to extend the time by interpreting s12(2) in a way which was compatible with two other Hong Kong statutes:
  1. Article 14(1) of the Hong Kong Bill of Rights Ordinance, Cap 383 (HKBOR) which protects privacy and family;
  2. Article 19(1) of HKBOR which protects rights in respect of family;
  3. Article 20 of HKBOR which protects the rights of a child against discrimination as to birth; and
  4. Article 35 of the Basic Law which guarantees the right of access to courts.

Criminal Liability Under S17 HRTO and the AET

S39 HRTO makes violation of s17 HRTO a criminal offense punishable with a fine of H.K. $25,000 (approximately U.S. $3,200) and six months' imprisonment on first conviction. It is a summary offense, with a time limit of six months "from the time when the matter of such complaint or information respectively arose" for prosecution: s26 Magistrates Ordinance, Cap. 227.

It appears that the IPs did not know they might have committed a criminal offense in contravention of s17 HRTO because, “it was on the court's own motion that HRTO was referred to - to ascertain what type of payments under surrogacy arrangements were regarded as illegal and to see if the Applicants ought to be referred to the Department of Justice for prosecution” [my emphasis].

The court determined that an offense had been committed but that prosecution was time-barred because “this is a summary offense, with a time limit of six months ‘from the time when the matter of such complaint or information respectively arose’ for prosecution: s26 of the Magistrates Ordinance, Cap. 227 and the IPs “took part in negotiating with a view to making the GC agreement. They made payments on four occasions--on 24.12.2014, 30.4.2015, 27.10.2015 and 10.12.2015. Prosecution was plainly time-barred.”

For the first time the court effectively recognized the AET situation--a “tension between s12 PCO and s17(1) HRTO”.

“There also is an issue under s12(7) as to reasonableness of some of the expenses incurred in the surrogacy arrangement. In particular, some of those expenses might be in breach of ss 17 and/or 39 of HRTO. Although the six-month period for prosecution of the Applicants has expired, there is an issue as to whether or not ss17 and 39 HRTO should be read down in a way consistent with the Applicants' constitutional rights.”

The court stated that, “this is the first surrogacy case where the court has to assess the reasonableness of expenses. It would not be fair to deprive the child of a parental order where his parents were ignorant of the law and simply had no authorities in Hong Kong to guide them as to the court's view…..Given the tension between s12(7) PCO and s17(1) of HRTO….The court is put into the awkward position of having to approve expenses (which pass the non-reasonable expenses tests) under s12(7) PCO, and yet are regarded as illegal under ss17(1) and 2 of HRTO.”

The court refused to reinterpret ss17 and 39 HRTO. It decided, however, that, because prosecution was time-barred, it did not need to do so and after a rigorous review of the expenses paid, item by item, authorized all the expenses totaling U.S. $108,198.

The second case: A very similar scenario resulted in a second case, reaffirming many of the legal principles above. In the A case the Applicants were a married couple and had lived in Hong Kong together since 2008. They were both permanent residents of Hong Kong. They entered into a surrogacy arrangement via a surrogacy agency in Mainland China, with E acting as the surrogate mother in a hospital using ovum from an anonymous female donor and sperm of A. The Applicants paid a total of RMB300,000 (approximately U.S. $43,000) for the surrogacy arrangement, which resulted in twins born in Mainland China in 2017. The Applicants have been the primary caregivers of the twins since their birth. The twins had lived in Hong Kong with the Applicants in their family home since they were brought to Hong Kong in 2017 on dependent visas. The twins acquired U.S. citizenship at birth. The Applicants obtained E’s consent to make an application for a parental order. Similar circumstances as in the FH case applied--the Applicants were making the application out of time and there was an issue of the Applicants having contravened s17 HRTO. Again, that was dealt with by a direction that prosecution was time-barred, and all the expenses were then authorized after a thorough review.

The FH case judgment is the lead judgment and the A case judgment cross-refers to the FH case judgment, and vice-versa.

Key Points to be Drawn from the FH and A Cases to Increase the Chances of Obtaining a Parental Order

  1. Applicants will have to apply for a parental order after the deadline after which prosecution under ss17 and 39 HRTO will be time-barred.
  2. Notwithstanding the requirement in s12(2) PCO to apply for a parental order within six months of the child’s birth, an application may be made out of time.
  3. The welfare of a child prevails over his/her parents’ delay in applying for a parental order or their innocent ignorance of the law.
  4. Applicant wives should be unable to give birth to children by natural means as contemplated by HRTO (and provide a medical certificate to that effect).
  5. The court will expect the surrogate mother to have received counselling.
  6. Applicants should show an unintentional violation of local law and exhibit no conduct which would be an “abuse or affront to public policy.”
  7. Applicants should provide full and frank disclosure of the surrogacy arrangements and be able to produce a full breakdown of expenses paid and to whom with documentary evidence in support, including receipts. It is “not sufficient for the applicants to state the expenses in the form of a lump sum. They should give a breakdown of the expenses, for example, the medical check-up fees, hospital expenses, foreign legal fees, counseling fees, insurance, loss of income of the surrogate mother, accommodation, travel expenses, etc. Documentary evidence of the expenses should be produced.”
  8. The court will balance between the welfare of a child (as a paramount consideration) and the public policy of adhering to legislation and decisively determine in favor of welfare. It will withhold an order only in the clearest case of abuse of public policy—"Where the surrogacy arrangement and/or birth took place outside Hong Kong, expert evidence should be adduced to show, at least, whether or not surrogacy is permitted in that jurisdiction, how the law defines the legal relationship among the surrogate mother, her husband, the child and the commissioning parents. This would assist the court in the issue of whether there has been abuse of public policy.”
  9. Applicants should act in good faith and have no intention to defraud the authorities including the Director of Immigration.
  10. There should be “no moral taint” shown in the Applicants’ dealings with the surrogate mother before and after the birth(s).
  11. Payments should not be “so disproportionate as to be an affront to public policy”.
  12. The surrogate mother (and if applicable, her husband) should be a party to the proceedings. “It is only in the clearest cases where the husband was not aware of and had not consented to the surrogacy that he need not be joined or served.”

About the Author

Marcus Dearle is a Partner and Head of Family Asset Protection at international law firm, Bryan Cave Leighton Paisner LLP (BCLP). He works from the BCLP Hong Kong and London offices. He is qualified in England & Wales, Hong Kong SAR and the BVI. He is Vice Chair of the International Bar Association Family Law Committee and a Fellow of the International Academy of Family Lawyers. He was one of the first lawyers in the U.K. to develop expertise in surrogacy law with an international element, having advised on complex international surrogacy issues since 1999.

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