Update on the complexities of Hong Kong surrogacy law: parental orders, criminal liability and the authorisation of expenses
Bryan Cave Leighton Paisner, Hong Kong
The Covid-19 pandemic has caused us to put more time aside to review and reconsider the ways in which we apply the law, including surrogacy law. Two recent Hong Kong High Court cases may have opened the door to relaxing Hong Kong’s legislative restrictions on surrogacy and possibly formal law review and reform. They are of particular of interest to lawyers outside Hong Kong who advise surrogate mothers and intended parents. The issue of criminal liability under section 17 of the Human Reproduction Technology Ordinance Cap 561 (HRTO) was highlighted in detail in my two articles published in 2018. Unlike many other areas of family law, surrogacy legislation is uniform throughout the UK’s three legal jurisdictions.
Both cases were presided over by the Hon Au-Yeung J:
These are the first cases in which the issue of criminal liability under section 17 has been fully recognised and addressed. As explained in my 2018 articles, the only two reported surrogacy cases in Hong Kong up to the date of publication of those articles had not done so, and the conflict between the criminal liability imposed by section 17 HRTO on the one hand, and the authorising of expenses section under section 12 of the Parent and Child Ordinance Cap 429 (PCO) on the other, then remained a much-misunderstood trap. This is what I call the ‘Authorisation of Expenses Trap’ (AET): in FH, the judge recognised for the first time the ‘tension’between section 12 PCO and section 17 HRTO in that connection.
In FH, the intended parents parental order applicants, FH and MH, were married US citizens and 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 with WB as the gestational carrier.
The California court declared the applicants genetic and legal parents of the twins and WB and her husband, HB, not to be legal parents of the twins. On the twins' birth certificates, issued in California, the applicants were recorded as their parents.
In mid-January 2018, FH made an application to renew the twins' dependent visas. In the course of answering the requisitions of the Director of Immigration (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 intended parents did not know that they needed a Hong Kong parental order. Despite having taken 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, because the Californian orders were not recognised, 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 Hong Kong kindergarten.
The court highlighted the other consequences of not making a parental order, which are so often overlooked. It also 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 UK case of In A v P  Fam 188 in which that court described the consequences of not making the order:
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: they had applied for the parental order too late, after the six-month time limit; and they had – clearly inadvertently – committed a criminal offence contrary to section 17 HRTO. The court found a pragmatic workaround for both of these hurdles.
The six-month time limit under section 12(2) PCO
In order to obtain a parental order, PCO section 12(2) requires married intended parents to apply for a parental order ‘within six months of the birth of the child’. The intended parents were outside of the six-month time limit.
The court found that the six-month limit in section 12(2) PCO was ‘not ambiguous’, but strict adherence to it can lead to an ‘absurdity’: ‘a child could have two sets of legal parents… the child will have no identity… 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.’
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’, and the child’s welfare is the ‘first and paramount’ consideration.
It decided it had the power to extend the time, having regard to the welfare principle and principles of statutory interpretation, and applied the UK 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 section 12(2) in a way which was compatible with two other Hong Kong statutes:
- Article 14(1) of the Hong Kong Bill of Rights Ordinance, Cap 383 (HKBOR) which protects privacy and family;
- Article 19(1) of HKBOR which protects rights in respect of family;
- Article 20 of HKBOR which protects the rights of a child against discrimination as to birth; and
- Article 35 of the Basic Law (BL) which guarantees the right of access to courts.
Criminal liability under section 17 HRTO and the ‘Authorisation of Expenses Trap’
Section 39 HRTO makes violation of section 17 HRTO a criminal offence punishable with a fine of HKD25,000 (approximately US$3,200) and six months’ imprisonment on first conviction. It is a summary offence, with a time limit of six months ‘from the time when the matter of such complaint or information respectively arose’ for prosecution: Section 26 Magistrates Ordinance, Cap 227.
It appears that the intended parents did not know they might have committed a criminal offence in contravention of section 17 HRTO because the court stated, ‘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’. As I stressed in my Hong Kong Lawyer article, there is no equivalent offence which incriminates intended parents under UK law.
The court determined that an offence had been committed but that prosecution was time-barred because ‘this is a summary offence, 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 intended parents “took part in negotiating with a view to making the gestational carrier agreement. They made payments on four occasions--on 24 December 2014, 30 April 2015, 27 October 2015 and 10 December 2015. Prosecution was plainly time-barred.” ’
For the first time the court effectively recognised the ‘Authorisation of Expenses Trap’ situation as a ‘tension between section 12 PCO and section 17(1) HRTO’:
The court refused to reinterpret/read down sections 17 and 39 HRTO. It decided that, as prosecution was time-barred, it did not need to do so and, after a rigorous review of the expenses paid, item by item, authorised all the expenses totalling US$108,198 (approximately HKD840,000).
In making its final determination in the case, the court relied heavily on a number of key factors including that FH and MH had made no attempt to defraud the authorities, including the Director.
The court recognised that, ‘the UK counterpart of section 12(7) was the former section 2(1) of the Surrogacy Arrangements Act 1985. That UK provision forbade commercial surrogacy but did not have the extra-territorial effect of section 17 of HRTO.’ The judgment does not record that surrogate mothers and intended parents in the UK do not commit an offence in the UK even if a payment (of the type that would be illegal under Hong Kong Law contrary to section 17 HRTO) is made in the UK: whereas payments made by or to middlemen in the UK in such cases do. This is the reason why there is no discussion in UK cases as to whether or not intended parents have committed a criminal offence.
The judge stated ‘that the mischief that HRT Bill targeted at was the commercialisation of surrogacy which could give rise to abuse and the legislation was to penalise both the payer and payee. The intention of the Legislature was not to stop a married couple like the applicants who had a genuine need to resort to surrogacy and used their own sperm and egg’.
So the question was left open as to what would happen where there are intended parents who have committed an offence contrary to section 17 HRTO but where their offences have not yet been time-barred. The judge stated that, ‘any question on reading down HRTO should be left to a more appropriate case in future.’But she did indicate that section 12 PCO and sections 2 and 17 of HRTO need to be reviewed.
There was a similar scenario in the A case, but with a Mainland China connection, reaffirming most of the legal principles above. The applicants were a married couple who had lived together in Hong Kong since 2008. They were both permanent Hong Kong residents. 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 obtained E’s consent to make an application for a parental order. As in FH, the applicants were making the application out of time and there was an issue of the applicants having contravened section 17 HRTO. Again, that was dealt with by a direction that prosecution was time-barred, and all the expenses were then authorised after a thorough review.
FHis the lead judgment and the A case judgment cross-refers to FH, and vice-versa.
This article is an abridged version of one published in the April 2020 edition of the Hong Kong Lawyer.
‘Avoiding the cross hairs – criminal liability arising from surrogacy arrangements in Hong Kong and the UK’, Lexis Nexis International Family Law Journal, 2018 1FL 95; and ‘Complexities in Hong Kong Surrogacy Law’, Hong Kong Lawyer, May 2018, available at: http://www.hk-lawyer.org/content/complexities-hong-kong-surrogacy-law, last accessed 9 June 2020.
 D (Parental Order)  HKEC 1948and S v J (Surrogacy: Wardship)  HKEC 1998.
- ‘There also is an issue under section 12(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 sections 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 sections 17 and 39 HRTO should be read down in a way consistent with the applicants’ constitutional rights.’
‘Thisis 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 section 12(7) PCO and section 17(1) of HRTO… The court is put into the awkward position of having to approve expenses (which pass the non-reasonable expenses tests) under section 12(7) PCO, and yet are regarded as illegal under sections 17(1) and 2 of HRTO.’