PHILIP K H WONG & KENNEDY Y H WONG (a firm of solicitors) AND ANOTHER v. THE COMMISSIONER OF THE INDEPENDENT COMMISSION AGAINST CORRUPTION

HCAL 70/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 70 OF 2007

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J U D G M E N T

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Introduction:

1.  The background to this matter is set out in a judgment given by me on 14 December 2007, in which I held that the two search warrants at issue should be quashed, consequent upon a failure of ICAC to follow procedures set down in s 4 & 5 Organised Serious Crimes Ordinance, Cap 455 (OSCO). 

2.  On 28 March 2008, that decision was reversed by the Court of Appeal, and the warrants found to be validly issued, subject to a further argument in relation to legal professional privilege (LPP) that had been reserved in the proceedings originally before me.

The issue now:

3.  The primary issue now involves the determination of which of two propositions is correct.  They are, first, that propounded by Mr Dykes for the Applicants:

When a lawyer’s premises are to be searched pursuant to a search warrant, as a matter of law, conditions must be attached to the warrant designed to minimise the risk of LPP materials being seized, or to protect putative LLP materials pending resolution of the question as to whether they do constitute such material.

Or, second, that propounded by Mr McCoy for the Commissioner:

The attachment of such conditions is merely a matter of “best practice” so that a failure to attach such conditions will not invalidate the warrant.

4.  This question was deferred in the original hearing as the Court of Appeal were soon to determine Rmbsa Corporate Services Ltd & Anor v Secretary for Justice, CACV 327/2006, which it was then thought would provide the definitive answer to that question.  The decision in that case was handed down on 14 February 2008.

The position of Philip (Nominees) Ltd:

5.  Philip (Nominees) Ltd, (Nominees), is a company operated by the 1^st Applicant, (the Solicitors).  The company provides corporate services and company secretarial services.  In my judgment of 14 December 2007, I said that Nominees shared the same premises as the Solicitors.  That is not correct.  The Solicitors and Nominees occupy adjacent premises on the same floor of the same building, but, quite properly, in accordance with the requirements of the Law Society, the two offices are kept quite distinct.

6.  The decision of the Court of Appeal in Rmbsa is conclusive in so far as Nominees is concerned.  In Rmbsa the search warrant was directed at documents belonging to a company which may or may not be a client of a law firm, and in relation to the affairs of companies and connected individuals for which that corporate entity (not the law firm) provided corporate (not legal advisory) services: see Rmbsa, para 44.  Nominees is in precisely the same position.  Nominees is a company which provides corporate services and company secretarial services.  It provided corporate services and company secretarial services for the corporate subject of the search warrant.  In character Nominees is, in all respects, identical to the subject of the warrant in Rmbsa.

7.  The Court of Appeal held that, in relation to such a search warrant, the absence of conditions to protect LPP did not invalidate the warrant.  The unsuccessful appellant in Rmbsa, the corporate services provider, sought leave from the Court of Appeal to appeal to the Court of Final Appeal.  Leave was refused.  Leave to appeal was sought from the Court of Final Appeal, and the application was dismissed under Rule 7(2) of the Hong Kong Court of Final Appeal Rules, without hearing.  I accept Mr McCoy’s submission that the law as to the requirement for LPP conditions on search warrants in relation to entities other than solicitors is now clearly stated by Rmbsa.

8.  Mr Dykes did not challenge the proposition that in so far as Nominees is concerned the challenge to the warrant fails and the application for judicial review must be dismissed.  I note that a claim for LPP was made in relation to 3 of the 55 items seized from Nominees.  I will deal with the disposition of that claim later in this judgment.

The position of the Solicitors:

9.  The situation in relation to the Solicitors is different.  Rmbsa  did not deal directly with the question of the search of a solicitor’s office.

10.  It must be beyond argument that, when a search warrant is sought in relation to the documents of a client of a firm of solicitors, in that solicitor’s office, there will be a reasonable apprehension that there will be present in that office documents to which the client, the subject of the search warrant, may be able to assert LPP.  Consequently, the factual circumstances of this case raise directly the question of the requirement, if any, of conditions to be attached to a search warrant to protect LPP.  It is accordingly necessary for me to address this issue which did not arise directly in Rmbsa.

The scope of a search warrant:

11.  There is nothing in s 10C Independent Commission Against Corruption Ordinance Cap 204, (ICACO), the statutory provision under which the warrants were issued, that permits seizure, pursuant to a search warrant, of documents to which LPP attaches.  Even if documents to which LPP attaches fall within the class of documents described in a search warrant there is no right to seize those documents.  They are privileged, and not subject to seizure.

12.  But at the same time, a mere assertion on the part of the solicitor that LPP is attached to a particular document is not determinative of that fact.

13.  In order to avoid the obvious conflict that may arise when an investigator, be he an ICAC investigator, a police officer, or any other officer lawfully authorised to search, wishes to seize documents which are subject to a claim for LPP, a practice has developed to protect the position.  That practice is that when the warrant is executed, a solicitor will usually be present, who makes the claim for LLP, and the relevant documents are sealed, without inspection at the time by the investigators, and subsequently, with or without the assistance of the Court, the validity of the claim for LPP is determined.

14.  Mr McCoy did not argue with Mr Dykes’ description of paragraph 48 of the judgment of Stock JA in Rmbsa as characterising the practice described above as being the “best practice”, and that it was desirable that such conditions should be attached to a warrant to be issued in circumstances where issues of LPP might arise.

The importance of LPP:

15.  The importance of LPP is set out in the judgment of Sears J. in Re Ip & Willis [1990] 1 HKLR 154 at 158E- 159I.  A clear statement as to LPP is set out in Kaplan J. in Shun Tak Holdings Ltd v Commissioner of Police [1994] 2 HKC 363 at 368G-369G.  In Pang v Commissioner of Police [2002] 4 HKC 579 at 587H-589H, Hartmann J. described LPP as a “fundamental human right”.  That must be right. 

16.  The privilege is now effectively enshrined by Articles 29, 30, 35 & 87 of the Basic Law, and Article 14 of the Hong Kong Bill of Rights.  In A Solicitor v The Law Society of Hong Kong (2006) 9 HKCFAR 175, Bokhary PJ at p 185I-186C, cited with approval the decision in R v Derby Magistrates’ Court ex p B [1996] AC 487 at 507D, where LPP was described as “a fundamental condition on which the administration of justice as a whole rests”.

17.  Consequently, any consideration of a search warrant directed at the search of a solicitor’s office must be undertaken with this fundamental nature of the rights of Hong Kong citizens as the primary entitlement to be upheld.

The conditions sought:

18.  Mr Dykes now says that LPP having been enshrined in the Basic Law as a fundamental human right, it is no longer sufficient, in relation to a search of a solicitors office, to rely upon a practice.  Mr Dykes says that the law should impose specific conditions to be attached to a warrant for the search of the solicitor’s office, whether that search be under s 10C ICACO, or any other statutory provision, and that in the absence of such conditions the warrant would have been unlawfully issued and the search and seizure undertaken pursuant to it equally unlawful.

19.  The conditions which Mr Dykes says should be imposed on the warrant are:

(1) a lawyer must be present during the search;

(2) if a lawyer from the firm of solicitors to be searched is not available, then an independent lawyer must be provided to give advice to the investigators;

(3) the search must be conducted during office hours or on hours specified through prior notice;

(4) the identities of the officers authorised for the search must be specified in the warrant;

(5) a clear procedure for handling seized materials which are subject to disputed claims of LPP must be set out;

(6) there must be limitations on requests for information search arising under s 15(1) Prevention of Bribery Ordinance[1].

20.  The case for the Solicitors is that because none of these conditions were attached to the warrant for the search of their premises, the warrant was unlawfully issued.

The law in other jurisdictions:

21.  Mr Dykes argued that the absence of conditions that were necessary to protect LPP would invalidate the warrant.  He said it was not sufficient that there be merely a “best practice”, giving rise to a notion of “potential invalidity” of the warrant, with actual invalidity depending upon the manner of execution of the warrant, and whether the required safeguards were present, either through the arrangements of the searching party or by choice.

22.  The submission was based upon a consideration of the law in New Zealand and Canada.

(a)  New Zealand:

23.  In Rosenberg v Jaine [1983] NZLR 1, a search warrant was issued entitling police to search a solicitor’s appointment book and/or correspondence relating to appointments.  Two solicitor’s business cards had been found near a stolen car, each card had written on at a time and date.  The police speculated that the person who had the appointments may have been involved in the taking of the vehicle.    The warrant was held to be too wide and general in its terms, as the solicitor could not identify the client or clients concerned, and was not sufficiently specific to include documents falling within LPP.

24.  Davison CJ, at p 7, reviewed the law as to LPP finding that it was firmly established in New Zealand as a substantive rule of the common law.  Because the documents sought in terms of the warrant might fall within the category of privileged documents, and in the absence of any greater particularity to define or limit the scope of the search, the claim for privilege in relation to the appointment book and correspondence was upheld.

25.  At the end of the Judgment, at pp 13-14, the Chief Justice said this:

“For the assistance of those who may have cause to consider the issue of warrants for search of solicitors offices, I indicate the following matters for guidance:

1.  It is not competent to issue a warrant for the search and seizure of documents covered by the privilege of confidentiality.

2.  Any warrant issued should clearly identify the client and the material sought to be seized.  Where, as in the present case, the client could not be identified by name, it was at least possible to identify the client by reference to the appointment card.

3.  The person issuing a warrant should attach methods to the execution of the warrant that are suitable to safeguard to the maximum the right to confidentiality of a solicitor’s client.  In particular, the solicitors should be given the opportunity to claim the privilege where he considers on reasonable grounds that it exists and if necessary to test his claim for privilege before an appropriate Court.”

26.  In Calver v District Court at Palmerston North (No 1) (2004) 21 CRNZ 371, Miller J, at p 384, para 48, held that a warrant to search a solicitor’s premises must be subject to conditions designed to protect privilege in confidentiality in material that may be viewed or seized during the search.

27.  At p 385, para 51, the judge considered what conditions were necessary to ensure that the search was not unreasonable.  General observations were offered by way of guidance.  These include the opportunity to identify privileged material, and to deal with claims to privilege by allowing police to take privileged material on terms that it is sealed and referred to a Judge to resolve claims to privilege.  As it could not be assumed that the solicitors being searched would authorise such a process, the judge thought it may also be appropriate to require that the search be conducted by or under the supervision of the police lawyer, who was an officer of the court and competent to assess privilege, with provision for ceiling and review by the court where privilege was still in dispute.

28.  Thus, while requiring the warrant to be subject to conditions, the precise scope of the conditions was left open.  It is clear however that the conditions envisaged closely mirror the practice that has developed in Hong Kong.

29.  Calver was cited to the New Zealand Court of Appeal in A Firm of Solicitors v District Court at Auckland [2006] 1 NZLR 586, a case dealing with a warrant obtained by the Serious Fraud Office (SFO), but was not directly relied upon by the court in reaching its decision.

30.  However, the court had this to say in respect of future searches where privilege was an issue:

“[135]    We indicated to counsel in the course of the argument that the SFO may need to take a different approach to applications for search warrants in cases like this.  The following comments may assist.

[136] It is essential that searches involving law firms, where privileged information will be held, must involve a very clear focus on the preservation of legal professional privilege.  The SFO should involve appropriate legal advisers in the preparation of the application for a warrant: it may be that senior counsel should be engaged.  The application needs to be carefully drafted, as does the affidavit in support, to ensure that the issuing Judge has before him or her a very clear picture of the alleged criminal offending, the state of the investigation and the nature of the evidence which the SFO believes may be obtained in the conduct of the search of the relevant law offices.  The issuing Judge must be clearly informed that there is likely to be privileged material (and much irrelevant material) at the premises being searched (especially on computer systems likely to be at the premises) so he or she can address his or her mind to the need for conditions to preserve privilege where no waiver of privilege has been given.

[137] The application should be accompanied by a memorandum of counsel, setting out the legal issues which require decision by the issuing Judge, and outlining the arguments on both sides.  Where it is proposed that there will be cloning of a computer hard drive, or removal of a computer hard drive with subsequent cloning, there should be an affidavit from an appropriately qualified computer expert explaining why that is necessary (referring to the factors noted at para [106] above) what process involves on the safeguards which will be followed.

[138] There will be a need for extensive conditions to ensure the protection of privileged material, and the provision of an opportunity to the firm to refuse to disclose privilege material as permitted under s 24(1), with the invoking of the s 24(5)^[2] procedure in case of disputes.  As mentioned below, it may well be that the most appropriate course would be to provide for an independent lawyer to be present at the search for the purpose of reporting back to the issuing Judge on the conduct of the search, and to ensure that the safeguards set out in the conditions of the warrant are followed.”

[139] The onus is on the SFO to place before the issuing Judge appropriately balanced material on all of these issues, and to ensure that the issuing Judge is given a proper basis to make an informed decision.  Except in cases of utmost urgency, the application should not be made on the basis that an immediate answer is demanded: the issuing Judge should be given (and insist upon) adequate time to read all the papers carefully and to question the counsel involved about the legal issues.”

31.  The Court went on to record that the jurisprudence that has developed in relation to Anton Piller orders in the civil jurisdiction of the High Court could provide useful guidance in the development of appropriate procedures in search warrants involving legal professional privilege.

32.  Although the invalidity of the warrant turned on the lack of specificity of its terms, and not the absence of conditions, it is clear from the judgment that the law in New Zealand now requires that where the SFO seeks to obtain search warrant that might involve an intrusion into material subject to legal professional privilege, appropriate conditions must be attached to protect that privilege. 

33.  It seems clear to me that the requirement for the conditions arises from the specific provisions of s 24 of the SFO Act: see para 138, cited above, that is legislative provisions requiring the protection of LPP.  It is not suggested by the court that the requirement for the conditions arises independently from the mere fact that a search warrant is to be obtained in circumstances where LPP issues arise.

34.  Of course, it will certainly be arguable from the decision that in New Zealand, in respect of other search warrants obtained by other enforcement authorities, even though there may be no equivalent of s 24 SFO, in that enforcement authorities’ empowering legislation, that the omission of such conditions in appropriate circumstances will invalidate the warrant.  But the decision is not authority for that proposition in relation to other enforcement authorities.

(b)  Canada:

35.  A consideration of the Canadian authorities begins with Descoteaux v Mierzwinski & AG of Quebec (1982) 141 DLR (3d) 590, a decision of the Supreme Court of Canada.  There, police officers had obtained a search warrant to search the premises of the Legal Aid Bureau in Montréal in order to obtain an application for legal aid by one L.  It was alleged in the search warrant that L had reported a low income in order to be eligible for legal aid contrary to s 324 of the Criminal Code.  When the warrant was executed an officer of the Quebec Bar Association intervened, and as a result the police officers did not search the premises, but received the documents they were told they were looking for in a sealed envelope.

36.  The judgment of the court, delivered by Lamer J, reviewed the law as to legal professional privilege and the relationship of that right to confidentiality with the provisions of the Canadian Criminal Code giving authority to a Justice of the Peace to issue search warrants.  The Court holds that where the material is sought is undoubtedly subject to LPP, then there is no jurisdiction to issue the warrant: see pp 612-614.

37.  The judgment then considers the circumstances where the justice of the peace has the necessary jurisdiction to authorise the search where issues may arise as to documents subject which may be subject to legal professional privilege.  Such circumstances arise because a lawyer’s file may contain a host of information concerning a client, some of which remains confidential even though the information is no longer privileged.  The following passage appears at p 615:

“Be that as it may, there are places to which authorization to search should generally be granted only with reticence and, where necessary, with more conditions attached than for other places.  One was not enter a church in the same way as a lion’s den, or warehouse in the same way as a lawyer’s office.  One does not search the premises of a third-party was not alleged to have participated in the commission of a crime and same way as those of someone who was the subject of such an allegation: see on the subject J A Fontana The Law of Search Warrants in Canada, p 174.

The Justice of the Peace, in my view, has the authority, where circumstances warrant, to set out execution procedures in the search warrant;….”

38.  Mr McCoy pointed out that in this passage the court used the expression “should”, not “must”, and court was merely setting a standard of best practice and not imposing a condition upon which would determine the validity of the warrant.  With respect to Mr McCoy, that submission is made on an incomplete reading of the decision.  Lamer J goes on, at p 616, to review the decision in Re Pacific Press Ltd and The Queen et al (1977) 37 CCC (2d) 487, where Nemetz CJ, of the British Colombia Supreme Court quashed a search warrant because there was no reasonable information available to the justice of the peace to show that two prior conditions had not been met; namely whether a reasonable alternative source of obtaining the information was or was not available, and if available, that reasonable steps had been taken to obtain the information from that alternative source.  Lamer J then said:

“Moreover, even if the conditions are met, the justice of the peace must set out procedures for the execution of the warrant to reconcile protection of the interests this writer is seeking to promote with the protection of those the search power is seeking to promote, and limit the breach of this fundamental right to what are strictly inevitable.” (Original emphasis).

39.  It is clear that passage that it is mandatory in Canada that where a search warrant is likely to intrude upon LPP the absence of appropriate execution procedures (conditions) will render a warrant invalid.

40.  The issue came before the Supreme Court of Canada again in Maranda v Leblanc & Ors [2003] 3 RCS 193.  There, suspecting that C was involved in money laundering and drug trafficking, the RCMP obtained authorization to search the appellant’s law office for any documents relating to fees and disbursements billed to C or relating to the ownership of an automobile that C had allegedly transferred to his lawyer in payment for professional services. 

41.  At first instance, see [1998] R.J.Q. 481, the Crown had conceded that the search was invalid and void, but the hearing continued having regard to the importance of the issues raised in relation to the procedure for authorising and executing searches in a lawyers’ offices, and the scope of the protection afforded by legal professional privilege.  The trial judge concluded that the judge authorising the search warrant must try to minimise any violations of privilege and confidentiality of the information covered by the warrant.  The fact that there was no minimisation clause could make the search unreasonable.

42.  Although the point was moot, the Crown having conceded invalidity, the Crown took the matter on appeal, and again because of the importance of the points involved the Court of Appeal heard the appeal: see [2001] R.J. Q. 2490.  On almost every point the judge at first instance was reversed.  It was held that the absence of the conditions suggested, which included that a lawyer should be present at the search, did not invalidate the warrant, and that such conditions went beyond what was required by the Criminal Code. 

43.  Because the Court of Appeal had virtually entirely reversed the judge at first instance, and despite the fact that the issue was moot, the matter was appealed to the Canadian Supreme Court.  That court held that there was no doubt that a duty exists to minimise impairments of solicitor-client privilege when a search in a lawyer’s office is authorised and executed: see para 14.  The court confirmed first that such a search should not be authorised unless there is no other reasonable solution.  The court confirmed the principles laid down by Lamer J in Descoteaux v Mierzwinski, and confirmed that the authorisation to search must be given in terms that, to the extent possible, the impairment of solicitor-client privilege must be limited.

44.  The appeal was allowed for the sole reason that the issuing judge should not have issued a search warrant without imposing conditions to ensure that the intrusion inherent in the search was minimised.  It is accordingly clear that the law in Canada is that if a search warrant is likely to intrude into the area of LPP, the absence of appropriate conditions, called execution procedures in Canada, will render the warrant invalid.

45.  In an earlier decision of Lavelle, Rackel & Heintz v Canada (AG) [2002] 3 RCS 209, the basis for the requirement for such conditions clearly emerges.  The Canadian Criminal Code in s 488 makes specific provisions for the course of action to be taken where an officer acting under the authority of the Criminal Code or any other Act of Parliament is about to seize a document in the possession of a lawyer who claims that a named client of his has a solicitor-client privilege in respect of that document. 

46.  A specific procedure is set out.  It is not an unfamiliar procedure.  When a claim for legal professional privilege is made, prior to the examination or seizure of the document, the document is placed in a package, which is sealed and identified.  There then follows a specific procedure for the resolution of the issue enabling a judge to determine the objection to the seizure of the document.

47.  It seems clear to me that, just as in New Zealand in relation to warrants under the SFO Act, the need for conditions in Canada, the absence of which will render warrant invalid, arises from specific provisions in Canadian legislation requiring protection of LPP.

The Hong Kong cases:

48.  An analysis of the cases in Hong Kong begins with that of Re Ip & Willis [1990] 1 HKLR 15, a decision in which Sears J. found a search warrant issued on the application of the Commissioner of ICAC to search the office of a firm of solicitors to be invalid.  The learned judge followed the decision in Rosenberg v Jaine, in holding that the warrant must be sufficiently specific in regard to what is authorised to be searched for and seized so as to enable the occupier of the premises to understand and, if necessary, obtain legal advice about permissible limits of the search.

49.  As the warrant was silent as to the offence in respect of which it was issued, did not refer to the documents or material which ICAC was authorised to search for and seized, and did not exclude documents in respect of which LPP existed, it was held to be so wide in general and its terms is to be invalid.

50.  The judge held that the information sought by ICAC was not the subject of LPP, nor would the solicitors have been in breach of the duty of confidentiality in giving the information to ICAC.  The search warrant having been held to be invalid because it was so wide and general, and the information not being the subject of LPP, the question of whether or not conditions to protect LPP in the course of the search did not arise.

51.  In Shun Tak Holdings the search warrant had been issued pursuant to the general power of search given to the police under s 50(7) Police Force Ordinance Cap 232.  Two applications for judicial review were brought, one by Shun Tak Holdings, the other by five directors and two senior managers of that company.  When the search warrant was executed solicitors representing the individuals and the company attended at the company’s premises and made a claim that some of the documents were covered by LPP.  By agreement the documents under challenge were sealed and detained by the Commercial Crime Bureau to enable the judicial review applications to be brought.

52.  The report does not indicate whether the course of sealing the disputed documents was followed as a result of conditions attached to the warrant, but there is no suggestion that such conditions were attached.  However, the procedure that had been followed was approved by Kaplan J. who described it as “sensible”.  The proposition that the warrant was invalid because of the absence of conditions was not argued, but the judgment records that counsel for the applicants took the point, “faintly”, that the warrant was invalid because on its face it failed to exclude documents and records protected by LPP.  The judge concluded that the warrant was not bad simply because it failed to exclude documents which may be covered by LPP.

53.  The question of the validity of search warrants came before the Court of Appeal in Apple Daily Ltd v Commissioner of the ICAC [2000] 1 HKC 295, however the case involved claims for journalistic protection, and not LPP protection.  The decision does not advance consideration of the issue.

54.  The issue of LPP arose in Pang v Commissioner of Police & Anor [2002] 4 HKC 579, where the court was concerned with the extent of the obligation of barristers and solicitors to comply with the provisions of s 25A OSCO, requiring reporting to authorised officers of information about property that may be connected to an indictable offence.  The court restated the law in relation to LPP confirming that it was recognised as constituting one of the pillars upon which the administration of justice rested in an open society.  But again, the question of the imposition of conditions on search warrants to protect LPP did not arise.

Are the conditions proposed required in Hong Kong:

55.  The search warrant at issue was issued by the magistrate, exercising power under s 10B Independent Commission Against Corruption Ordinance, Cap 204, (ICACO) which provides:

“Without prejudice to section 17(1) of the Prevention of Bribery Ordinance (Cap. 201) ^[3], if a magistrate is satisfied by information on oath that there is reason to believe that there is in any premises or place anything which contains evidence of the commission of any of the offences referred to in section 10, he may by warrant directed to any officer authorize such officer, and any other officers assisting him, to enter and search such premises or place.”

56.  There is nothing specific in either the Prevention of Bribery Ordinance, Cap 201 (POBO), or the ICACO which requires the magistrate when issuing a warrant to search premises to have regard to issues of LPP.  However, the right to LPP has been enshrined in Hong Kong’s fundamental constitutional documents, the Basic Law and the Bill of Rights Ordinance.  The existence of these provisions parallel the provisions in the Canadian and New Zealand legislation, both of which ensure that LPP must be taken into account in the issue of search warrants.  The absence of a similar provision in the legislation authorising the search warrant in this case does not lessen the importance of LPP, to the contrary the presence of provisions in the law of Hong Kong protecting LPP in Hong Kong’s fundamental constitutional documents, if anything, enhances its importance.

57.  Crime and criminals are becoming ever more sophisticated and society demands, often vigorously and openly, that investigators take all possible steps to prevent and to investigate crime.  That situation, it seems to me, is likely to encourage investigators to seek to extend the envelope of lawful investigative behaviour.  To an extent, that may be seen in the course adopted by the investigators in Secretary for Justice v Shum Chiu [2008] 1 HKLRD 155, where a course of investigation involving the surreptitious recording of a meeting of a suspect with a solicitor took place, that recording being prima facie a deliberate invasion of privileged solicitor-client communication.

58.  There is in my view a real risk today that investigators may, in their laudable desire to investigate crime and apprehend criminals, deliberately or inadvertently step over the line of lawful behaviour in pursuit of the investigation.  The courts in overseeing the actions of investigators, in the public interest, are required to balance the competing interests of the right of society to have crime properly investigated, and the rights of all citizens, including the fundamental importance and nature of the right to LPP.

59.  It is right that a practice has developed whereby enforcement authorities required to execute a search warrant as a solicitor’s office will do so during normal office hours and, upon a claim for LPP being made, will seal and protect the relevant documents, pending resolution of the claim.  But, having regard to the fact that no search warrant can ever authorise the seizure of documents to which LPP attaches, and the importance of LPP, and balancing the right of society to have crime properly investigated, with the need to provide investigators with proper tools of investigation, I have come to the conclusion that time has now arrived to elevate that practice to the requirement of formal conditions, creating a mechanism by which the right to LPP enshrined in the Basic Law and the Bill of Rights Ordinance may be properly protected, and at the same time investigators be able to properly use their lawful powers of search.

60.  For these reasons, I am satisfied that in circumstances where a search warrant is issued for the search of a solicitor’s office, in the absence of appropriate conditions to protect LPP, the warrant will be unlawfully issued.

61.  In reaching this conclusion I have carefully borne in mind that the Court of Appeal did not find the absence of such conditions to invalidate the warrant in Rmbsa.  It needs to be remembered in that respect that that case was not dealing with a solicitor's office, but with the office of a corporate services provider where there was no real likelihood that LLP documents would be held.  The question was specifically left open: see para 46.

What conditions are appropriate:

62.  The requirement that there be conditions on a search warrant which might impinge on LPP for that warrant to be lawful is, ideally, a matter for the legislature.  However, it in the absence of there being any legislative scheme governing the issue of search warrants were LPP is at risk, I am satisfied that it is appropriate that the Court should outline the nature of the appropriate conditions to be applied in future. 

63.  The New Zealand courts have indicated the “best course”, and the Canadian courts have prescribed conditions, in order to protect the rights to LPP enshrined in the relevant legislation in those countries.  The appropriate course to follow may vary depending upon the legislation under which the search warrant is to be issued.  But it seems to me that the following matters must be taken into account, (I offer no apology for following closely in this respect the decision of the New Zealand Court of Appeal in A Firm of Solicitors):

(1) It is essential that the judicial officer who is asked to issue the search warrant should be fully and clearly informed of the fact that a solicitor’s office is to be searched.  This information should be contained in an affidavit, in addition to the affidavit in support of the search warrant, as a separate affidavit containing this information need not be subject to a claim for public interest immunity.

(2) The application for a search warrant should be accompanied by a memorandum of counsel setting up a legal issues which require decision by the issuing judicial officer, and outlining the arguments on both sides.

(3) The warrant must clearly identify the client whose documents are sought and the nature of the documents sought.  If the client cannot be identified by name, then there should be sufficiently precise information to enable the solicitors to identify the client, even if the name is not known to the investigators.

(4) The person issuing the warrant should attach methods to the execution of the warrant that a suitable to safeguard to the maximum the right of the solicitor’s client to LPP.

(5) As a minimum those methods will include the following:

(i)  the search must be undertaken in the presence of a principal of the firm of solicitors whose office is to be searched;

(ii) except in special circumstances, to be appropriately established by affidavit, a search must be conducted during office hours, or on hours specified by prior notice to the solicitors;

(iii) in an extreme situation where a principal of the firm of solicitors cannot be found, for example if a search is required to be undertaken after hours and/or when a principal of the firm cannot be located, an appropriately experienced and independent solicitor or barrister should be present to make a claim for LPP on behalf of the client;

(iv)    upon a claim for LPP being made the relevant documents are not shown to the investigators, but immediately placed in an appropriately opaque container and sealed pending resolution of the claim;

(v) a schedule describing the general nature of the documents to which claim for LPP is made must be supplied to the investigators;

(vi)    pending resolution of the claim for LPP the seized sealed documents shall remain, sealed, in the custody of the investigators;

(vii)    no later than seven days following the seizure the claimant for LPP, either personally or by solicitors or counsel, shall appear before the judicial officer issuing the warrant in order that the claim for LPP may be determined;

(viii)   at that hearing solicitors or counsel for the investigators may appear and be heard, but except as otherwise ordered by the judicial officer neither the solicitors nor counsel for the investigators, nor investigators themselves, at such a hearing shall have any right to inspect the documents prior to the determination of the claim for LPP;

(6) Where information from a computer is sought, either by direct copying, the cloning of a computer hard drive, or the removal of computer hard drive with subsequent cloning, there should be an affidavit from an appropriately qualified computer expert explaining why that it is necessary, and the process, involving appropriate safeguards, to be followed.

(7) The investigators seeking the warrant should have prepared in advance an appropriate schedule of the conditions to be attached to the warrant for the consideration of the judicial officer.

64.  I emphasise that I consider these provisions to be guidelines to give effect to the “best practice” that has been adopted now for some time.  It may be that the specific circumstances in a particular case will require further conditions.  In the event that a judicial officer being requested to issue a search warrant is not informed that the premises to be searched raise issues of LPP, or that there is a failure to attach appropriate conditions to the search warrant, any warrant issued will be unlawfully issued.

65.  There may be circumstances in which criminal behaviour on the part of solicitors themselves is suspected.  In such a case LPP will not give any protection in relation to documents created by the solicitors in the course of that criminal behaviour.  The documents will be subject to seizure and will not be entitled to protection.  But in such circumstances it is entirely possible that LPP material may be revealed to the investigators.  In circumstances where a solicitors themselves are suspected, the application for the warrant needs to make the circumstances precisely clear, and will have to identify procedures to be put into effect to give protection to legitimate claims for LPP.

66.  There is no reason to draw any distinction between the ICAC and other law enforcement authorities in relation to conditions to be imposed on the warrant that might infringe LPP.  It follows that what I have had to say is equally applicable to police officers as it is to ICAC, and any other investigating authority.

The remedies sought:

67.  The remedies sought by the Solicitors are as follows:

(1) Certiorari to bring up and quash the decision of the magistrate made on 22 May 2007, to issue the warrant to enter and search the offices of the Solicitors;

(2) Certiorari to bring up and quash the decision of the Commissioner of ICAC made on 23 May 2007, to seize and detain documents materials from the offices of the Solicitors;

(3) A declaration that the warrant issued on 22 May 2007, to enter and search the offices of the Solicitors and the seizure of documents materials by the Commissioner of the ICAC on 23 May 2007 were unlawful;

(4) A mandatory injunction requiring the Commissioner of the ICAC to return to the Solicitors all the documents and materials seized from the offices of the Solicitors on or about 23 May 2007;

(5) An injunction under O 53 r 3(10)(b) requiring the Commissioner not to unseal the documents seized and carried away by his officers on 23 May 2007;

(6)    Damages for trespass and trespass to goods under O 53 r 3(3).

The entitlement to remedies in judicial review:

68.  Mr Dykes contended that in any situation where the court found that administrative action was unlawful the court should not refuse relief.  It would be quite wrong, he said, to find that the decision to issue the search warrant by the magistrate was unlawful, but at the same time not quash the warrant.  While superficially attractive as a submission, I am satisfied that it is not correct. 

69.  The starting point in respect of final remedial orders in judicial review is that all remedies are discretionary; see de Smith’s Judicial Review, para 18-023:

“A distinctive feature of all these remedies is that the court has a discretion to withhold them from a claimant even if the defendant public authority is held to have acted unlawfully.”

And also Fordham, Judicial Review Handbook 4^th Ed, para 24.3:

“It is a first principle of judicial review that all remedies are discretionary.  This means that a claimant could win on every other point and still find that the Court refuses a remedy, in the exercise of its discretion.”

70.  That said, de Smith acknowledges that there is a presumption in favour of relief; see para 18-048:

“The general approach ought to be that a claimant who succeed in establishing the lawfulness and administrative action is entitled to be granted a remedial law.  The court does, however, have a discretion - in the sense of assessing “what is fair and just to do in the particular case” - to withhold a remedy altogether or to grant a declaration (rather than a more coercive quashing, prohibiting all mandatory order or injunction which may have been sought by the claimant) or to grant relief in respect of one aspect of the impugned decision, but not others.  But the requirements of the rule of law mean that “the discretion of the court to do other than quash the relevant order or action where such excessive exercise of power is shown is very narrow”.”

71.  I have regard also to the following statements.  In R v Take-over Panel, ex p Datafin Plc [1987] 1 QB 815 at 840B, Sir John Donaldson MR said:

“Furthermore, the court had the ultimate discretion whether to set (decisions by the Take-over Panel) aside and may refuse to do so in the public interest, notwithstanding that it holds and declares the decision to have been made ultra vires….”

In Neill v North Antrim Magistrates’ Court [1992] 1 WLR 1220, HL, at 1231F, Lord Mustill said:

“It is however one thing to hold that it is for the magistrates to rule on admissibility, if invited to do so, so that a decision on the issue must in principle be reviewable, and quite another to say that the grant of relief should follow as a matter of course.”

72.  I am quite satisfied that even if the search warrant were found to have been unlawfully issued it is still open to me to refuse relief to the Solicitors.

73.  There are a number of bases upon which a remedy may, in the exercise of discretion, be refused.  A specific basis to refuse a remedy is where there has been undue delay by the claimant, and that the grant of the remedy would cause substantial prejudice, hardship or detriment to good administration.  That situation does not arise in this case.  Other grounds include a lack of standing, or the extent of the sufficient interest of the claimant; that the remedy would serve no practical purpose; that the claimant has suffered no harm; and the financial implications of a remedy: see de Smith para 18-054-18-058.

74.  The extent of the relief that granted will depend upon the circumstances of the particular case.  It will, in my view, be perfectly proper for the court, in circumstances where it is established that a claimant has suffered no harm at all and that a remedy would serve no practical purpose, to refuse relief other than a declaration that the administrative action in question was unlawful, leaving it to the authority to decide how to respond to such a declaration in the future, as was done in Great North Eastern Railway Ltd v Office of Rail Regulation [2006] EWHC 1942 at para 97, per Sullivan J.

Discussion on remedy:

75.  In the present case, had the conditions that I have found ought to be imposed on a warrant to search a solicitor’s office, been imposed, there would have been conditions attached to the warrant to ensure that the investigators executed the warrant during ordinary working hours, to have present during the execution of the warrant a solicitor who was able to make a claim for LLP, and a procedure should have been specified to deal with disputed claims of LLP.

76.  In determining whether or not I should grant any relief I must have regard to the fact that in reality, notwithstanding the complete absence of any conditions, everything that should have been done was done.  In simple terms, there has been no injustice to the clients of the Solicitors, who are the subject of the search warrant.  There has been no breach of LPP.

77.  The warrant was executed at 10.03 a.m. on Wednesday 23 May 2007, during proper working hours in a normal working day during the working week.  The investigators spoke initially to a receptionist, who brought to them, in a conference room, a director of Nominees, who was an employee, but not a partner of the Solicitors.  At that person’s request the investigators waited in the conference room until a partner of the Solicitors was brought to the conference room.  The investigators identified themselves by their warrant cards and explained the purpose of their visit.  The investigators requested the assistance of the Solicitors to retrieve material relating to the company and the individual who are the subject of the warrant.  The partner of the Solicitors agreed to this and brought the relevant material to the investigators, in the conference room, without the need for the investigators to physically conduct a search.

78.  At 10.25 a.m. another partner of the Solicitors came to the investigators in the conference room and expressed concerns in respect of LPP.  The investigators say that they agreed that anything seized from the Solicitors under the search warrant would be placed in a sealed container and the seal would not be broken before the expiry of seven days from the date of seizure within which the Solicitors may institute legal proceedings to establish their claims of LPP.  This claim is disputed by the Solicitors, but in any event everything seized from the Solicitors was not inspected by the investigators, but was immediately sealed, and has remained sealed, pending the resolution of these proceedings.

79.  In fact, everything that might have been achieved by the imposition of the conditions sought by Mr Dykes has been achieved.  The protection of LPP to which the company and the individual, the subject of the search warrant, are prima facie entitled has not been infringed.  The appropriate method to examine whether or not the claim of LPP is justified may still be undertaken, and no harm at all has been suffered by either the company or the individual.

80.  It is necessary in the exercise of my discretion that I should undertake a balancing exercise between the need of society on the one hand to successfully prosecute corrupt behaviour, and the rights of the individual on the other hand.

81.  No challenge is made by the Solicitors to the evidence of the investigators that the individual, the subject of the warrant has arguably been engaged in corruption on a gigantic scale.  No challenge is made by the Solicitors to the evidence of the investigators that the company, the subject of the warrant, has arguably been used by the individual to deal with the proceeds of that corruption.  It is plainly in the public interest that, if possible, that that corruption and its proceeds should properly be pursued.

82.  As I have indicated, neither the company nor the individual has so far suffered any breach of their rights to LPP.  The protection to which they are entitled has been ensured by the course of action adopted by the investigators, albeit without the formal imposition of conditions on the search warrant.

83.  It is right that, if the warrant has been unlawfully issued, then there has been a technical trespass of the Solicitors’ office, because the Solicitor’s agreement to supply to the investigators the documents sought was obtained only as a result of the unlawfully issued search warrant. 

84.  But that trespass must be seen in the light of the way in which the investigators conducted themselves, that is by first going to the receptionist and making enquiry for a person in authority, then waiting in a conference room as requested until that person arrived, and finally by agreeing with the Solicitors not to conduct a physical search, but to permit the Solicitors to bring to them the relevant documents.  This is not a case where the investigators rode roughshod over protest in order to seize the documents they sought.

85.  The extent to which that technical trespass has been ameliorated by the conduct of the investigators is demonstrated by Mr Dykes’ concession that, in the whole of the circumstances, nominal damages of only $100 would be appropriate in respect of any trespass.

86.  I am satisfied that this is a very plain case where first, the applicant for judicial review, that is the Solicitors, have suffered no harm beyond a technical trespass; second, that the rights of the subjects of the warrant have not been compromised; third, that the public interest in properly investigating corruption outweighs the interests of both the Solicitors and the subjects of the warrants.  In the circumstances of this case it would be out of all proportion to quash the warrant, with the consequences that might flow from such a decision involving the return and potential risk of destruction (by the clients) of the documents.

87.  For these reasons I have come firmly to the view that this is not a case in which certiorari quashing in the decision of the magistrate to issue the warrant should be granted.  Neither is it necessary in circumstances for there to be a certiorari to quash the decision of the Commission of the ICAC to seize and detain documents and materials from the officers of the Solicitors. It follows that the injunction requiring Commission of the ICAC to return the documents and materials should also not issue.

88.  In the whole of the circumstances a declaration that the warrant was unlawfully issued is in my view the only appropriate relief.  Such a declaration adequately acknowledges the circumstances in which the warrant was issued, and provides the formal basis for an award of damages for trespass.  There will be a declaration accordingly, and an award to the Solicitors of $100 nominal damages.

Determination of the LPP issue:

89.  Mr Dykes suggested that the appropriate procedure to determine whether or not LPP applied to any of the seized documents would be an ex parte proceeding in which I should inspect the documents and hear argument form him as to why LPP applied and determine the status of the documents.  Like Kaplan J. in Shun Tak Holdings, I am not at all happy at the concept of an ex parte proceeding even for a purpose such as this, however I note that in that case counsel for the Crown did not object to the procedure, on the basis that the judge might require assistance from counsel for the claimant in determining the validity of any claim.

90.  I would prefer to conduct an inter partes hearing, in the course of which the documents would not be shown to the Respondent, but the general nature described openly to the Court, thereby indicating to the Respondent the general nature of the document but not its content, with the Court then ruling on the claim, having inspected the document of necessary.  In the unlikely event that the Respondent is unable to make appropriate argument on a document without inspecting it I would be prepared to consider a confidential inspection by counsel for the Respondent.  I do not rule now on the procedure merely indicate a potential course of action for consideration by the parties.

91.  Pending the resolution of the claim for LPP the documents must remain sealed.  I am confident I can leave it to the good sense of counsel for both parties to make an appropriate arrangement for counsel for the company and individual, the subject of the warrant, (whose privilege it is to be claimed), to inspect the documents and to take appropriate instructions.  The issue is to be set down for argument before me on the first available date, convenient to counsel.

Costs:

92.  Nominees has failed in its application for judicial review.  In the normal run of events an order for costs would be made against Nominees.  The Solicitors have succeeded in obtaining a declaration the warrant was unlawfully issued, and an order for nominal damages, but the substantial relief sought has been refused.

93.  In these circumstances it seems to me that the appropriate order should be an order nisi that there be no order as to costs, each party thereby meeting their own costs.

[1] S 15(1) POBO provides: “Save as is provided in this section, nothing in this Ordinance shall require the disclosure by a legal adviser of any privileged information, communication, book, document or other article."

[2] The following provisions of s 24 of the SFO Act (NZ), which makes special provision in relation to legal professional privilege, are relevant:

S 24  (1) Except as provided in subsection (2) of this section, nothing in this Act shall require any legal practitioner to disclose any privileged communication.

  (5) Where any person refuses to disclose any information will document on the ground that it is a privileged communication under this section, the Director of that person may apply to a District Court Judge for an order determining whether or not the claim of privilege is valid; and for the purposes of determining any such application, the District Court Judge may require the information to be produced to him or her.

[3] This section gives further powers of search to investigating officers, investigating offences suspected to have been committed under the Prevention of Bribery Ordinance.