AS THIS COLUMN HAS PREVIOUSLY NOTED, over the centuries, lawyers, legislators, judges and many others have debated the nature of law and the essential attributes of law (for a discussion about the nature of law, see China Business Law Journal volume 3 issue 5: Law or equity?). A related – and equally important – question is what is the source of law? In other words, where does law come from and how does it originate (for a discussion about the source of law, see China Business Law Journal volume 3 issue 2: Binding or persuasive)?
Irrespective of whether a jurisdiction follows the common law tradition, the civil law tradition or another tradition, law does not appear out of nowhere. The law must establish its roots in human society and human relationships. In his book, Law and Revolution: The Formation of the Western Legal Tradition, the American comparative law scholar Harold Berman wrote that law is “custom transformed, and not merely the will or reason of the lawmaker. Law spreads upwards from the bottom and not only downward from the top.”
This article outlines the circumstances in which custom becomes law. It then examines the relevance of custom in common law jurisdictions and in China. It concludes by analysing an important provision in China’s new General Provisions of the PRC Civil Law.
CUSTOM AND CUSTOMARY LAW
It is generally accepted that custom becomes customary law (and binding) when there is proof, determined objectively, of a customary practice within a relevant community and the members of that community consider subjectively that the customary practice is binding.
Legal pluralism – the co-existence of multiple legal systems within one jurisdiction – refers to the situation where a jurisdiction recognises customary law alongside formal written law, and customary law is allowed to develop independently of the formal written law. Customary law is recognised in several Asian jurisdictions, including Malaysia, Indonesia, Thailand and the Philippines, and is most common in areas relating to property, family and inheritance.
In other jurisdictions, customary law has been codified and subsumed by statute and no longer develops independently of the formal written law. An example of this situation is Australia, where the customary law of the indigenous people concerning land (or “native title”) has been codified by statute, which constitutes the sole and exclusive basis on which native title rights are recognised and defined. Some people criticise the codification of customary law in such circumstances on the ground that codification freezes custom in time and prevents it from developing organically.
CUSTOM AND THE COMMON LAW
In English legal history, custom has its roots in Anglo-Saxon law, which was the body of written rules and customs that existed in England before the Norman Conquest of 1066. After the Norman Conquest, custom was recognised by the feudal system introduced by the Norman kings. Subsequently, following the creation of a national system of courts, the signing of Magna Carta in 1215 and other developments that established the statutory authority of the Parliament of England, the general customs that had traditionally been recognised throughout England were incorporated into case law and statutes, which together formed the “common law” of England (for a discussion about Magna Carta and the development of the common law, see China Business Law Journal volume 3 issue 5: Law or equity; China Business Law Journal volume 6 issue 5: Magna Carta).
Although general custom has been subsumed within the common law, the English courts have continued to recognize local customs that exist outside of the common law. Such customs do not become part of the law until they are recognized by the courts. The courts will recognize local customs only if certain conditions are satisfied, including the following: (1) the local custom must have existed since “time immemorial” (effectively, the local custom must have existed for as long as living memory); (2) the local custom must be reasonable, certain and capable of precise definition; (3) the local custom must relate to a specific locality; (4) the custom must be exercised peaceably, openly, and as of right (i.e. it must not be necessary to obtain permission from anybody in order to exercise the custom); (5) the custom must be consistent with other customs that are recognized; and (6) the custom must not conflict with statute law.
A relatively recent example of a case in which the English courts have recognized local custom is New Windsor Corporation v Mellor, which was decided in 1975 by the Court of Appeal. In that case, the court recognized the customary rights of the inhabitants of a village to use a piece of private grassland for recreational purposes (the land had actually been used for archery in mediaeval times) and decided that the owner could not use the land in a way that was inconsistent with such use.
CUSTOM IN CHINA
During the imperial dynasties in China, many areas of society were regulated by customary practices, which were embodied within private contracts and governed by customary law. As was the case in ancient England, there was significant variation in custom between regions. The Chinese used to describe this variation by saying that there were “different practices within the space of three li (a Chinese unit of length) and different customs within the space of five li”.
The impact of custom and customary law was particularly strong in the area of property rights. In particular, two property rights were recognized as part of China’s customary practices and were governed by customary law: perpetual tenancy rights and redeemable sale rights.
Perpetual tenancy rights involved the granting of land usage rights by private landowners to tenants on a long-term or perpetual basis in return for the payment of rent, usually on a fixed basis, to the landowner. During the Ming and Qing Dynasties in China, this customary practice led to the phenomenon known as “divided ownership”, under which customary law recognized a split between the ownership of subsoil rights and surface rights. The holder of the surface rights enjoyed absolute rights in relation to the use of the land, including the right to sell and otherwise deal with the land in the capacity of an owner, and the holder of the subsoil rights remained as a passive owner for whom the sole benefit from ownership of the subsoil rights was the receipt of rent from the holder of the surface rights.
Redeemable sale rights involved the sale of land on terms that the original owner or dian (redeemable sale) maker enjoyed the right to “redeem” the land at some point in the future in return for payment of the original price at which the land had been sold. This arrangement was known as a “live sale” as distinct from an absolute sale and was often undertaken by owners of land who had an urgent need to raise funds (e.g. to repay debt) but did not want to sever the connection between the family and the land. This connection was important, particularly in circumstances where the land had been passed down through the generations from the ancestors. During the term of the dian, the dian-holder could deal with the land, including selling its rights to a third party on similar terms (this was known as a sub-dian) and leasing the land to third parties.
A former partner of Linklaters Shanghai, Andrew Godwin teaches law at Melbourne Law School in Australia, where he is an associate director of its Asian Law Centre. Andrew’s new book is a compilation of China Business Law Journal’s popular Lexicon series, entitled China Lexicon: Defining and translating legal terms. The book is published by Vantage Asia and available at www.vantageasia.com.