Hong Kong - The Court of Appeal Wednesday upheld the Court of First Instance's ruling that the Chief Executive's executive order on covert surveillance was unconstitutional.

The Court of Appeal also dismissed Hong Kong activist-lawmaker Leung Kwok-hung's appeal against the six-month grace period of the executive order after the first-instance ruling.

The appellate court also dismissed the other appeal from Leung, who accused the Hong Kong Chief Executive of not signing and putting into operation the Interception of Communication Ordinance, which was passed in June 1997.

Disappointed by the verdict, Leung immediately filed an application for leave to appeal to the Court of Final Appeal after reading the judgment.

In a statement, a spokesman for the Hong Kong Security Bureau said the government welcomed the judgment in respect of the temporary validity of the present regime.

"We are studying the court's judgment in consultation with the Department of Justice," the spokesman said. "We are working closely with the Legislative Council to scrutinize the Interception of Communications and Surveillance Bill. "

"The judgment will in no way affect our aim to have the bill enacted by the end of this legislative session," he added.

But the statement falls short of saying if the government would bring the case to the Court of Final Appeal for an ultimate ruling.

Given the slow progress in the examination of the said bill, it remains to be seen if a law can be enacted by the time the six-month temporary validity expires in early August.

In a written judgment, the Court of Appeal concurred with the Court of First Instance's February 9 decision that the executive order comprises administrative directions only and does not constitute a set of "legal procedures" for the purpose of Article 30 of the Basic law.

Besides, section 33 of the Telecommunications Ordinance, which provides for secret interception of limited types of private communications, was ruled as failing to comply with Article 39 of the Basic Law.

"Any restrictions on the fundamental rights must be prescribed by law. The executive order is not law. Both (the executive order and section 33) are unconstitutional," said the Court of Appeal.

But the Court of Appeal accepted that the six-month temporary validity of the executive order was an exceptional remedy to allow the government and Legislative Council to enact a corrective legislation.

As to the Chief Executive's refusal to appoint an effective date for the Interception of Communications Ordinance, the appellate court concurred that the Chief Executive had not acted unlawfully.

"The making of the order was an exercise of discretion (by the Court of First Instance). We see no reason to interfere," said the judgment.

Accordingly, the Court of Appeal dismissed Leung's appeal and also the cross-appeal from the government.

There is no operative law in Hong King that provides for all forms of covert surveillance.

It was only on August 5 last year the Chief Executive published the executive order after the government had lost two court cases which relied on evidence obtained through interception of conversations between the defendants and other persons.