PANG YIU HUNG ROBERT v. COMMISSIONER OF POLICE AND ANOTHER

HCAL 133/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST
NO.133 OF 2002

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J U D G M E N T

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Introduction

1. On 14 March 2002, the applicant, a practising barrister, was arrested by the 2nd respondent, an officer in the Organized Crime and Triad Bureau ('the OCTB') of the Hong Kong Police. Further to his arrest, in terms of a warrant issued by a magistrate, the applicant's chambers were searched and a number of papers seized. The applicant, by way of judicial review, now seeks various forms of declaratory relief which relate to the lawfulness of his arrest. Initially, the applicant also sought declaratory relief relating to the lawfulness of the search of his chambers and the seizure of papers but, for reasons which will appear in the body of this judgment, that has not been pursued.

2. That being so, the single decision challenged by the applicant is that of the 2nd respondent to arrest and detain him pursuant to s.50 of the Police Force Ordinance, Cap.232, which, in its relevant parts, reads :

"(1) It shall be lawful for any police officer to apprehend any person who he reasonably believes will be charged with or whom he reasonably suspects of being guilty of

(a) any offence for which the sentence is fixed by law or for which a person may (on a first conviction for that offence) be sentenced to imprisonment; or

(b) ..."

3. At the time of his arrest, the offence alleged against the applicant was a contravention of s.25A(1)(a) of the Organized and Serious Crimes Ordinance, Cap.455 ('OSCO'). It is the intent and breadth of s.25A, in so far as it relates to legal practitioners, and in particular barristers, that lies at the heart of this application. OSCO was enacted in 1994. In 1995 the Ordinance was amended, s.25A being added. For the purposes of this judgment, the relevant parts read :

" (1) Where a person knows or suspects that any property

(a) in whole or in part directly or indirectly represents any person's proceeds of;

(b) was used in connect with; or

(c) is intended to be used in connection with,

an indictable offence, he shall as soon as it is reasonable for him to do so disclose that knowledge or suspicion, together with any matter on which that knowledge or suspicion is based, to an authorized officer.

(2) ...

(3) A disclosure referred to in subsection (1)

(a) shall not be treated as a breach of any restriction upon the disclosure of information imposed by contract or by any enactment, rule of conduct or other provision;

(b) shall not render the person who made it liable in damages for any loss arising out of

(i) the disclosure;

(ii) any act done or omitted to be done in relation to the property concerned in consequence of the disclosure.

(4) ...

(5) A person commits an offence if, knowing or suspecting that a disclosure has been made under subsection (1) or (4), he discloses to any other person any matter which is likely to prejudice any investigation which might be conducted following that first-mentioned disclosure.

(6) In proceedings against a person for an offence under subsection (5), it is a defence to prove

(a) that he did not know or suspect that the disclosure concerned was likely to be prejudicial in the way referred to in that subsection; or

(b) that he had lawful authority or reasonable excuse for making that disclosure."

4. A person who contravenes s.25A(1) is liable on conviction to a fine at level 5 and to imprisonment for three months : s.25A(7).

5. The evident purpose of s.25A is to provide law enforcement authorities with timely information about property that may be connected to an indictable offence. More particularly, the section looks to providing assistance to law enforcement authorities in their investigation of the increasing evil of what is called 'money laundering'. Legal practitioners are not expressly exempted from the constraints of s.25A. Indeed, in a report dated 1 February 2001 the Financial Action Task Force on Money Laundering ('FATF'), an inter-governmental agency tasked with the development and promotion of policies to combat money laundering (money laundering being the processing of criminal proceeds in order to disguise their illegal origins), identified the legal profession as fulfilling functions of considerable usefulness to money launderers. The report says :

" Lawyers, notaries, accountants and other professionals offering financial advice have become the common elements to complex money laundering schemes. This trend is mentioned by almost all FATF members."

6. Among the functions fulfilled by lawyers and other professionals which are exploited by money launderers are the taking of cash deposits, the issuing and cashing of cheques and matters similar. The report says :

" In some of these functions, the potential launderer is obviously not only relying on the expertise of these professionals but is also using them and their professional status to minimise suspicion surrounding their criminal activities. A solicitor representing a client in a financial transaction or providing an introduction to a financial institution lends a certain amount of credibility in the eyes of the transactor because of the ethical standards presumed to be associated with the work of such professions."

7. Against this background, the applicant's arrest on 14 March 2002 was declared by the 2nd respondent in the following terms :

"You [the applicant] are under arrest for failing to make a disclosure to an authorised officer of a suspicion that property which in whole or in part represented the proceeds of an indictable offence, namely securities and futures held by John HUI Yat-sing ['John Hui'] at HSBC Broking Securities (Asia) Ltd was to be sold, and then the proceeds transferred into the client account of Susan Liang & Co at the Hong Kong and Shanghai Bank."

8. At all material times the applicant was representing John Hui in his professional capacity as a barrister. They had no social or independent business relationship. The applicant had been briefed to represent John Hui by the firm of solicitors named in the declaration of arrest, Susan Liang & Co. Notwithstanding such professional representation, what was alleged against the applicant was that, at the time when an attempt was being made to sell certain securities held by John Hui (apparently valued at around $9 million) in order to place the proceeds into a client account of Susan Liang & Co., the applicant knew or must have suspected that either in whole or in part the value of those securities represented the proceeds of an indictable offence. Despite that knowledge or suspicion, however, the applicant failed to report the matter, as he was constrained to do in terms of s.25A(1)(a), to an authorized officer (defined in s.2 of the Ordinance) as soon as it was reasonable for him to do so.

9. To the trained lawyer, the issue of legal professional privilege ('LPP') springs immediately to mind, a privilege that rests in the client not the legal practitioner but which in common law the practitioner is bound to uphold. Indeed, when the applicant sought judicial review, it was on the basis that the police, in effecting his arrest, must have been of the view that s.25A of OSCO is not subject to LPP; in short, that the section overrides the privilege.

10. As it presently stands, s.25A is not by express provision made subject to LPP. This is in contrast to a number of other sections in OSCO. Indeed, although the applicant (supported by the Bar Council and the Law Society) has contended that s.25A must be read as being subject to the privilege, it has been conceded that the section is, on its face at least, ambiguous. Hence the application to this court for clarification by way of declaratory relief.

11. The relevant declarations that were sought at the commencement of the hearing (and pursued during it) were expressed in the following terms :

"1. A Declaration that on the true construction of section 25A of OSCO, it does not cover information and communications communicated to counsel which are covered by legal professional privilege when taking instructions and rendering legal advice; and

2. Further or alternatively, a Declaration that section 25A of OSCO, insofar as it relates to information or communications communicated to counsel which are covered by legal professional privilege contravenes Articles 35, 39 and 87 of the Basic Law and Article 14 of the International Covenant on Civil and Political Rights, 1966; and

3. Further or in the further alternative, a Declaration that section 25A of OSCO, insofar as it requires a barrister of Hong Kong to disclose any matters which are covered by legal professional privilege contravenes Articles 35, 39 and 87 of the Basic Law and Article 14 of the International Covenant on Civil and Political Rights, 1966; and

4. A Declaration that the arrest and detention of the Applicant by Detective Senior Inspector Ngai Shiu Kei of the Organized Crime and Triad Bureau, Hong Kong Police Force on 14th March 2002 was arbitrary and unlawful ..."

Legal professional privilege : an overview

12. During the course of the hearing, it was in no way disputed that LPP is one of the pillars upon which the administration of justice in Hong Kong rests. Its history has been narrated and expounded upon in numerous authorities. Nevertheless, if only briefly, the importance of the privilege in Hong Kong must be underscored.

13. Practicing barristers, admitted in terms of the Legal Practitioners Ordinance, Cap.159, are constrained to adhere to the Code of Conduct of their profession under pain of professional and civil sanctions. In adhering to that Code, one of their fundamental duties is to preserve the confidentiality of their clients affairs. Rule 116 of the Code of Conduct of the Hong Kong Bar describes that duty succinctly in the following terms :

"A barrister employed as Counsel is under a duty not to communicate to any third person information which has been entrusted to him in confidence, and not to use such information to his client's detriment or to his own or another client's advantage. This duty continues after the relation of Counsel and client has ceased. A barrister's duty not to divulge confidential information without the consent of his client, express or implied, subsists unless he is compelled to do so by order of a Court or the circumstances give rise to a public duty of disclose or the protection of the barrister's professional interests requires it."

14. The purpose of LPP has been stated by Lord Bingham CJ in R v. Manchester Crown Court, ex parte Rogers [1999] 1 WLR 832 (at 839) :

" It is in my judgment important to remind oneself of the well established purpose of legal professional privilege, which is to enable a client to make full disclosure to his legal adviser for the purposes of seeking legal advice without apprehension that anything said by him in seeking advice or to him in giving it may thereafter be subject to disclosure against his will ... legal professional privilege applies, and applies only, to communications made for the purpose of seeking and receiving legal advice." [ my emphasis]

15. The rule of LPP which applies with equal force to solicitors is long established in the common law. Over 150 years ago, in Greenough v. Gaskell (1833) 1 My.& K. 98, 103, in himself reviewing earlier authorities, Lord Brougham commented :

" The foundation of this rule is not difficult to discover. It is not (as has sometimes been said) on account of any particular importance which the law attributes to the business of legal professors, or any particular disposition to afford them protection ... But it is out of regard to the interests of justice, which cannot be upholden, and to the administration of justice, which cannot go on without the aid of men skilled in jurisprudence, in the practice of the courts, and in those matters affecting rights and obligations which form the subject of all judicial proceedings."

16. LPP is today recognised as a fundamental human right, one protected in such conventions as the International Covenant for Civil and Political Rights ('the ICCPR'). In R (Morgan Grenfell & Co. Ltd) v. Special Commissioner of Income Tax and another [2002] 2 WLR 1299, Lord Hoffmann expressed it thus (at 1302) :

" LPP is a fundamental human right long established in the common law. It is a necessary corollary of the right of any person to obtain skilled advice about the law. Such advice cannot be effectively obtained unless the client is able to put all the facts before the adviser without fear that they may afterwards be disclosed and used to his prejudice."

17. In Hong Kong, LPP is protected by the Basic Law as a fundamental right. Article 35 of the Basic Law guarantees that

" Hong Kong residents shall have the right to confidential legal advice, access to the courts, choice of lawyers for timely protection of their lawful rights and interests or for representation in the courts, and to judicial remedies." [my emphasis]

18. Article 87 of the Basic Law makes it plain that such a fundamental safeguard as LPP, central to Hong Kong's administration of justice prior to the change of sovereignty, shall remain of equal force and effect after it

" In criminal or civil proceedings in the Hong Kong Special Administrative Region, the principles previously applied in Hong Kong and the rights previously enjoyed by parties to proceedings shall be maintained."

19. The nature (and importance) of LPP has recently been stated in the clearest 19terms by Lord Taylor CJ in his speech in the House of Lords in R v. Derby Magistrates Court, ex parte B [1996] 1 AC 487 (at 507) :

" The principle which runs through all these cases, and the many other cases which were cited, is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth. The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent. Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests." [my emphasis]

20. As far back as 1792, the principle was stated that once LPP is established, the lawyer's mouth is "shut for ever" : see Wilson v. Rastall [1782] 4 Durn. & E. 753 (at 759) per Buller J, cited with approval by Taylor CJ in R v. Derby Magistrates (supra).

21. As was said by Lord Brougham, the rule of LPP has not been constructed merely to serve the interests of lawyers. It is vital to the administration of justice generally. Any encroachment on that rule therefore effects not just the legal system but has an impact too on the broader public interest.

22. In summary, therefore, LPP is an ancient rule of common law, a rule which reflects a fundamental right of confidentiality between a client and his legal advisor, a right protected by the Basic Law. It is a rule recognised as constituting one of the pillars upon which the administration of justice rests in an open society.

When the privilege does not apply

23. With regard being had to any constitutional restraints, it is accepted that LPP may be limited by legislation. This will be so when there is express statutory language to that effect or when, as a matter of interpretation, the implication that it is limited is clearly necessary.

24. Within the common law itself, LPP will not apply in respect of communications made in order to obtain advice for a criminal purpose. That exception applies whether the lawyer knows or is ignorant of the criminal purpose. The rule was stated in R v. Cox and Railton [1884] 1 QBD 153 (commencing at 168) in the following terms :

" ... the rule does not apply to all which passes between a client and his solicitor, but only to what passes between them in professional confidence, and no Court can permit it to be said that the contriving of a fraud can form part of the professional occupation of an attorney or solicitor.

... In order that the rule may apply there must be both professional confidence and professional employment, but if the client has a criminal object in view in his communications with his solicitor one of these elements must necessarily be absent. The client must either conspire with his solicitor or deceive him. If his criminal object is avowed the client does not consult his adviser professionally, because it cannot be the solicitor's business to further any criminal object. If the client does not avow his object he reposes no confidence, for the state of facts, which is the foundation of the supposed confidence, does not exist. The solicitor's advice is obtained by a fraud."

25. The exception has been so stated in a number of subsequent authorities, among them Banque Keyser Ullmann SA v. Skandia (UK) Insurance Co. Ltd [1986] 1 Lloyds Reports 336 in which Lord Justice Parker in the Court of Appeal said :

" The rationale appears to be perfectly plain, namely, first, that a fraudulent party who communicates with his solicitor for the purposes of the furtherance of a fraud or crime is both communicating with his solicitor otherwise than in the ordinary course of professional communications, and secondly that in any event it would be monstrous for the Court to afford protection from production in respect of communications which are made for the purpose of fraud or crime."

26. How then is it to be determined when LPP applies and when, by reason of what I will call criminal or fraudulent purpose, it does not? A mere suspicion or surmise will not strip otherwise confidential communications of their confidentiality. In Bullivant v. Attorney General for Victoria [1901] 196 the Earl of Halsbury L.C. said (at 201) :

" ... if it is sufficient for the party demanding the production [of documents claimed to be subject to LPP] to say, as a mere surmise or conjecture, that the thing which he is so endeavouring to inquire into may have been illegal or not, the privilege in all cases disappears at once. The line which the Courts have hitherto taken, and I hope will preserve, is this that in order to displace the prima facie right of silence by a witness who has been put in the relation of professional confidence with his client, before that confidence can be broken you must have some definite charge either by way of allegation or affidavit."

He continued (at 203) :

" What you would have to do when you got to trial and the privilege was pleaded would be this : the judge would have to satisfy himself whether there was really established to his satisfaction a charge of fraud or something that would displace the privilege I do not say prove it-but it would be a reasonable and proper thing under the circumstances to establish the proposition that the issue to be tried was whether there was really a fraud or not, and that this was a piece of evidence relevant to establish the fraud."

27. In O'Rourke v. Darbishire [1920] AC 581 (at 632) Lord Wrenbury said that for the privilege to be stripped away the court must be satisfied that the allegations of fraud (or other criminal purpose) "are not merely the bold assertions of a reckless pleader but are such as to be regarded seriously as constituting prima facie a case of fraud resting on solid grounds".

The extent of legal professional privilege in respect of information related to payments of money

28. The reason for the applicant's arrest was founded essentially on the allegation that he had failed to disclose actions being taken by his client to place a large amount of money with a firm of solicitors, the same solicitors who, in representing the client, had retained the applicant's services. This raises a specific issue concerning the scope of LPP; namely, the extent to which the privilege encompasses information about the payment of moneys to meet fees charged or to be charged.

29. In R v. Manchester Crown Court, ex parte Rogers (supra), Lord Bingham, having defined the extent of LPP as applying only to "communications made for the purpose of seeking and receiving legal advice", went on to consider whatever certain documents in respect of which LPP was claimed were protected by the privilege. In this regard, he said (at 839) :

" The record of time on an attendance note, on a time sheet or fee record is not in my judgment in any sense a communication. It records nothing which passes between the solicitor and the client and it has nothing to do with obtaining legal advice. It is the same sort of record as might arise if a call were made on a dentist or a bank manager. A record of an appointment made does involve a communication between the client and the solicitor's office but is not in my judgment, without more, to be regarded as made in connection with legal advice. So to hold would extend the scope of legal privilege far beyond its proper sphere, in my view."

30. In R v. Crown Court at Inner London Sessions, ex parte Baines & Baines (a firm) and another [1987] 3 All ER 1025 the headnote reads :

" The records of a conveyancing transaction itself were not privileged under s 10 of the 1984 Act as being communications between a legal adviser and his client in connection with the giving of legal advice, and therefore a solicitor could be required to produce such records to the police pursuant to an order made under para 1 of Sch 1 to that Act. However, correspondence between the solicitor and his client regarding the conveyance would be privileged if it contained advice."

31. What then of information concerning payments made to legal practitioners? In Re Furney [1964] ALR 814 a solicitor was required to attend before a registrar to answer questions in respect of his client's affairs. One of the questions related to payments made by the client to the solicitor within a stated period. The solicitor refused to answer on the basis that to do so would breach LPP. Clyne J directed that the question should be answered as it related to matters of objective fact.

32. Re Furney was cited with approval by the Court of Appeal of Queensland in Packer v. Deputy Commissioner of Taxation (1984) 1 Qd R 275, a decision in which it was held that certain trust account ledgers held by solicitors were not subject to LPP. The core issue recognised by the court was whether the documents had been made or brought into existence for the sole purpose of seeking or giving advice or for the sole purpose of use in existing or anticipated litigation. Sheperdson J, a member of the court, observed :

"Now it seems to me that as trust accounts are not solely within the realm of solicitors one must be careful to ensure that a client is not able to gain legal professional privilege simply by ensuring that a particular transaction passes through a solicitor's trust account even though it might well have just as conveniently passed through the trust account of say a stock and station agent or a real estate agent. In other words this Court should be careful to ensure that as a class solicitor's trust account ledgers are not to be made a kind of Alsatia for persons who, irrespective of advice from solicitors, have decided to move their moneys in a certain way.

I should add that this is not to say that trust account ledgers can never be the subject of legal professional privilege whether such privilege exists will depend on the particular ledger and whether or not that ledger is written up in such a way that it records the advice given by the solicitor to the client."

33. Re Furney was further cited with approval in Re Ontario Securities Commission and Greymac Credit Corp. (1983) 146 DLR (3d) 73, a decision of the Ontario High Court of Justice, Divisional Court. The headnote to the judgment reads :

" Payments into and out of a solicitor's trust account do not constitute communications from the client and accordingly are not covered by solicitor-and-client privilege. Thus, a solicitor may be compelled to give evidence as to the movement of funds into and out of his trust account, including the source and recipient of payments, and to produce for inspection his books and records relating thereto."

In the body of the judgment itself, the following is said (at 83) :

" ... if I may say so with respect, the Furney case was rightly decided. Evidence as to whether a solicitor holds or has paid or received moneys on behalf of a client is evidence of an act or transaction, whereas the privilege applies only to communications. Oral evidence regarding such matters, and the solicitor's books of account and other records pertaining thereto (with advice and communications from the client relating to advice expunged) are not privileged, and the solicitor may be compelled to answer the questions and produce the material.

It may be helpful to ask in such a case whether the client himself if he were the witness, could refuse on the ground of the solicitor-and-client privilege to disclose particulars of a transaction directed by him through his solicitor's trust account. The fact that a client has paid to, received from, or left with his solicitor a sum of money involved in a transaction is not a matter as to which the client himself could claim the privilege, because it is not a communication at all. It is an act."

34. On the strength of these authorities, in respect of the present case, I am satisfied that information as to the objective fact that a client has instructed that funds be paid to a legal practitioner are not matters covered by LPP, not at least as those matters stand in isolation unconnected to advice given or sought. In my view, a client who informs his solicitor that he will deposit funds with him and then does so cannot look to that communication (and the subsequent act of payment) as being protected by LPP, not, as I have said, as those matters stand in isolation.

The representation of the Bar Council and the Law Society

35. Both the Bar Council and the Law Society were so concerned by what appeared to be the assertion by the police (in effecting the arrest of the applicant) that s.25A(1) of OSCO was not subject to LPP and that accordingly legal practitioners were under a statutory duty to disclose matters which would otherwise be the subject of that privilege, that they sought to be heard as interested parties. As both bodies have a general right of audience in matters affecting the professional practice, conduct and discipline of their professions, (see s.24 and 33 of the Legal Practitioners Ordinance, Cap.159), leave was granted.

36. During the course of their submissions, leading counsel for the Bar Council, Mr Dykes SC, and leading counsel for the Law Society, Mr Scott SC, emphasized that, if s.25A(1) of OSCO was to be read as abrogating LPP, it would present legal practitioners with an invidious dilemma in the conduct of their profession. As Mr Dykes expressed it, barristers when defending persons accused of crime have a professional duty to protect their clients from being convicted except on the basis of admissible evidence and it would be antithetical to this rule that barristers should be a source of admissible evidence against their clients. A law, he said, which co-opts barristers (and solicitors) in the discharge of their professional duties to act as informers against their clients is fundamentally incompatible with the constitutional guarantee of an independent profession implicit in Articles 35 and 87 of the Basic Law (cited in paras.13 and 14 supra). A bar that is not independent, said Mr Dykes, will over time compromise the independence of the judiciary itself. That must be so. See, for example, Labelle v. Law Society of Upper Canada [2001] 52 O.R. (3d) 398 per McKinnon J (at 408) :

"An independent bar is essential to the maintenance of an independent judiciary. Just as the independence of the courts is beyond question ..... so the independence of the bar must be beyond question. The lawyers of the independent bar have been the constant source of judges who comprise the independent judiciary in English common law history. The 'habit' of independence is nurtured by the bar. An independent judiciary without an independent bar would be akin to having a frame without a picture."

'Unreasonable dilemma' or compelling the impossible

37. During the course of the hearing, as submissions were made and the true issues in contest identified, profound concern was expressed on behalf of the applicant and the Bar Council that, even if s.25A is declared in all respects to be subject to LPP, it still places a barrister (fulfilling his professional duties) into a position of impossible conflict. How is a barrister, of his own volition (that is, without the benefit of an order of court), to determine when he is constrained by LPP and unable thereby to make a report pursuant to s.25A(1) and when he is not so constrained and accordingly obliged in law to make a report without of course advising his client of that report? For 'tipping off', as it is called, is prohibited by the terms of s.25A(5). As Ms Gladys Li SC, leading counsel for the applicant, expressed it, even if s.25A is read as being subject to LPP as defined in common law, for a barrister (fulfilling his professional duties) it brings about an unworkable result. It does so because it places the barrister in a position where his duty to the client and his duty to report are in direct conflict.

38. The author of Statutory Interpretation (1977 ed.), F.A.R. Bennion, has termed it 'the unreasonable dilemma'. The author has said (at page 753) that, in looking to a statute, a 'strained construction' may be justified in order to avoid 'an unworkable result'. One such result, it is said (at page 754), would occur where 'the literal meaning places persons who are the subject of the Act in a dilemma so unreasonable that Parliament cannot be supposed to have intended it'.

39. Mr Dykes, for the Bar Council, submitted that s.25A could not be read as applying to barristers acting in their professional capacity because it would subject them not simply to an unreasonable dilemma but in all practical terms would place them in an impossible situation. The maxim therefore applied lex non cogit ad impossibilia (law does not compel the impossible). If what the enactment requires is impossible, it will be presumed that the legislature intended it to be modified so as to remove the impossible element.

40. From these submissions, Ms Li, on behalf of the applicant, sought an additional declaration in the following terms :

"Further or in the further alternative, a Declaration that section 25A of the Organized and Serious Crimes Ordinance, Cap.455 insofar as it requires a barrister to report to an authorized officer any information or communications communicated to him when he is acting for or advising his client in the capacity as a barrister contravenes Article 35 and 39 of the Basic Law and Article 14 of the International Covenant on Civil and Political rights, 1966; and"

The amendment to s.25A

41. In July of this year, the Drug Trafficking and Organized Crimes (Amendment) Ordinance, No.26 of 2002, provided that s.2 of OSCO be amended by adding a provision that nothing in the Ordinance 'shall require the disclosure of any items subject to legal privilege'. I understand that the amendment is to take effect next year. From that time therefore by expression provision s.25A will be subject to what is termed in OSCO as 'legal privilege'.

42. 'Legal privilege' is already defined in s.2(1) of OSCO to provide for those instances where the term is presently used in the Ordinance : in s.3(9), s.4(11) and s.5(5). S.2(1) states that it means

"(a) communications between a professional legal adviser and his client or any person representing his client made in connection with the giving of legal advice to the client;

(b) communications between a professional legal adviser and his client or any person representing his client or between such an adviser or his client or any such representative and any other person made in connection with or in contemplation of legal proceedings and for the purposes of such proceedings; and

(c) items enclosed with or referred to in such communications and made

(i) in connection with the giving of legal advice; or

(ii) in connection with or in contemplation of legal proceedings and for the purposes of such proceedings,

when they are in the possession of a person who is entitled to possession of them,

but excludes any such communications or items held with the intention of furthering a criminal purpose."

43. From the wording of s.2(1) it is clear that the intention of the legislature is to encapsulate the common law principles governing LPP including the exception to the privilege. See, for example, R v. Central Criminal Court, ex parte Francis & Francis [1989] 1 AC 346 in which the House of Lords, in considering an almost identical section (s.10) of the Police and Criminal Evidence Act 1984, found that the purpose of the section was to reflect the common law position. Lord Griffiths (at page 382) said :

"The definition corresponds closely with the established common law principles that govern the existence of legal privilege. Section 10(1) sets out the scope of legal privilege in terms that would be instantly recognised by any lawyer as covering the position at common law, and when I first read section 10(2) I was in no doubt that it was setting out the exception to legal privilege established in Reg. v. Cox and Railton, 14 Q.B.D. 153, which provides that no legal privilege attaches to legal advice obtained for the purpose of committing crime."

44. S.25A, when amended, will be subject to LPP as defined in s.2(1) of the Ordinance, essentially therefore as it is defined in common law. If s.25A, as it is presently expressed, is subject to LPP, the legislature could only have intended that it be the privilege comprehended in common law or as defined in s.2(1) of the Ordinance. Both in substance are the same. However, in the absence of express provision, if LPP is not abrogated it must be as comprehended by common law.

45. It is plain however that the amendment to s.25A has no retrospective effect. Accordingly, the predicament of the applicant arising out of his arrest in March of this year remains unaffected. So does the concern which has given rise to the application for what I have called an additional declaration, even with the amendment that concern remains valid.

The position of the respondents

46. The respondents have opposed the making of all the declarations sought by the applicant, including the additional declaration formulated and placed before the court during the course of the hearing.

47. Although, on a reading of the applicant's papers alone, it may have appeared that the battle lines would be drawn with the respondents over the applicability of LPP to s.25A, as it transpired there was no difference of opinion in respect of this fundamental issue. A letter from the Department of Justice dated 25 October 2002 made this clear while at the commencement of the hearing, Mr Blanchflower SC, leading counsel for the respondents, accepted that s.25A is certain in its meaning in that it does not require a person to report communications which are covered by LPP. The amendment to s.25A enacted in the Drug Trafficking and Organized Crimes (Amendment) Ordinance, he said, was made in order to dispel any possible ambiguity and for no other reason.

48. Concerning the arrest of the applicant by officers of OCTB, Mr Blanchflower argued that it was a misconception on the part of the applicant to assume that the officers believed that s.25A(1)(a) of OSCO abrogated LPP. Both the arrest of the applicant, he said, and the subsequent search of his chambers were conducted in full recognition of the position in law that s.25A(1)(a) was subject to LPP. The decision of the officers (for it was not made by the 2nd respondent alone) was made after a review of the evidence known to the officers at that time and was founded on what the officers reasonably suspected the applicant must have come to know or suspect by way of information coming to his knowledge outside of the confines of LPP. As Mr Blanchflower put it, the grounds for arrest did not spring from any assumption of what must have been said or done during the course of confidential meetings between the applicant and his clients but solely from matters not subject to protection and/or matters that fell into what he called 'the public domain'.

49. That being the case, Mr Blanchflower submitted that the first three declarations sought by the applicant (listed as such in para.11 supra) should not be granted as they were not necessary and would serve no useful purpose. They would amount, in his submission, to no more than a means of providing an advisory opinion.

50. As to what I have called the additional declaration, Mr Blanchflower contended that legal practitioners (including barristers who do not handle a client's moneys) are subject to s.25A and in constitutional terms are lawfully made subject to it. To express it broadly, Mr Blanchflower emphasised that today illegal funds flow across international borders with little restraint; those funds must be legitimized by laundering and, as FATF itself has reported, all forms of businesses and professions are exploited to achieve this end. Legal practitioners are not obliged to become 'state agents', he said. They do not have to actively investigate. But there may be occasions when matters come to their knowledge outside of the bounds of LPP and, if so even if it rarely happens there is then an obligation in law to report to an authorised officer. What is required, said Mr Blanchflower, is a 'heightened awareness' on the part of all practitioners as to when they are bound by LPP and when they are not.

51. As to the submission that barristers would be placed in the unworkable (indeed impossible) position of having to decide, without reference to the client, whether to make a report or not and do so without any prior finding by a court, Mr Blanchflower referred to s.25A(1) which states that a person need only make a report when 'it is reasonable for him to do so'. That, he contended, gave time to a barrister to consult his governing body, the Bar Council, before deciding whether or not a report should be made. Accordingly, while the sensitivities of such matters were understood, it would be wrong to say that s.25A should not apply to barristers because it would put them in an 'unreasonable dilemma' or because the maxim lex non cogit ad impossibilia applied.

52. As to the declaration sought by the applicant that his arrest on 14 March 2002 had been arbitrary and unlawful, Mr Blanchflower argued that, in terms of s.50 of the Police Force Ordinance, the 2nd respondent had reasonable grounds to suspect that the applicant, on the basis of information not subject to legal professional privilege, should have made a report pursuant to s.25A(1)(a) and had failed to do so. The arrest made was therefore lawful.

53. It was further submitted that in any event, having regard to the factual complexities, it was not appropriate for this court to be asked to make a declaration as to the lawfulness of the arrest. The correct forum for a determination of the issue was therefore a trial court. It would also be wrong in principle to seek a declaration that the arrest was unlawful in order to have a platform from which to launch a claim by way of writ for damages.

54. In this latter regard, however, it should be mentioned that Ms Li, on behalf of the applicant, said that the applicant had no intention to seek damages. A declaration by way of judicial review had been sought in order to state the law and thereby to declare that his arrest had not been made in terms of the law. Exoneration was sought, not financial compensation.

The factual background

55. From what has been said, it is apparent that the history of what led to the applicant's arrest and what occurred thereafter is integral to a resolution of the matters in dispute. Some history must therefore be given.

56. In 2001, auditors at the Bank of China in Guangdong Province discovered that, over a period of some nine years commencing in or about 1992, the sum of US$75 million had been fraudulently taken from the bank.

57. The fraud, it is alleged, had originated in a single branch of the bank. It is said that three successive managers had arranged a serious of supposed loans to a local state - run company and with the connivance of the managing director of the company had arranged for the funds to be moved to Hong Kong where they were placed into a bank account held by a Hong Kong registered company, Ever Joint Property Company Limited ('Ever Joint Property').

58. John Hui, a cousin of one of the bank managers apparently responsible for defrauding the Bank of China, was the managing director of Ever Joint Property. He and his wife were also signatories of the company's bank account. After the stolen funds had been received by Ever Joint Property, it was alleged that they were distributed to the various perpetrators.

59. Officers of the OCTB discovered that John Hui, who had at one time had been an employee of a Hong Kong bank on a relatively modest salary, had prospered financially when he took on the management of Ever Joint Property. On the evidence available to them at the time, the officers of OCTB believed that Ever Joint Property was a vehicle for laundering moneys stolen from the Bank of China and that the source of John Hui and his wife's new prosperity had to lie in those laundered funds.

60. On 22 October 2001, John Hui and his wife were arrested and charged with dealing in property which they knew or had reasonable grounds to believe represented the proceeds of an indictable offence, contrary to s.25(1) of OSCO. That section reads :

" Subject to section 25A, a person commits an offence if, knowing or having reasonable grounds to believe that any property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence, he deals with that property."

61. On the day of the arrest, the applicant was briefed by Ms Mary Chan ('Ms Chan'), a solicitor with the firm of Susan Liang & Co., to appear on behalf of John Hui and his wife at the magistrates court when they appeared there the next day. One of the purposes of the brief was to apply for bail for the couple. John Hui and his wife were not known to the applicant. At all times the applicant's dealings with them were professional.

62. The next day (23 October 2001), the applicant and his instructing solicitor, Ms Chan, held a meeting with their clients in the cells of the magistrates court. During the course of that meeting the matter of legal costs was raised. In his Notice of Application to Apply for Judicial Review the applicant has described the incident in the following terms :

"One of the matters discussed was the estimated costs of the trial of Mr. Hui and Madam Wong, and arrangements to put Susan Liang & Co. in funds to cover potential legal costs for their defence. Mr. Hui wanted to liquidate all his positions in a securities account, later known to be HSBC (Futures) Asia Limited and HSBC (Securities) Asia Limited, and have the balance transferred to Susan Liang & Co.'s client account. He asked Ms. Chan and the applicant if there would be any problems with such arrangement.

Ms. Chan or the Applicant had asked whether the securities and therefore the funds represented by the securities were involved in the investigation by the police. Mr. Hui assured Ms. Chan that they were not, they being his own personal monies, whereas the investigations by the police and the complainant, the Bank of China, was in respect of monies in companies of which Mr. Hui was a director. Steps were then taken to effect this arrangement."

63. In order 'to effect this arrangement', John Hui wrote an instruction to his brokers worded as follows :

"I hereby instruct your Bank to sell all the shares owned by me and to transfer all my monies to the bank account of my solicitors, SUSAN LIANG & CO., HK Bank 111-493102-002."

64. No suggestion has been made that the applicant took any practical steps necessary to bring about the liquidation of John Hui's securities, merely, as I understand it, that he would have been present when the handwritten instructions were given.

65. According to police investigations, the value of John Hui's securities held with the two HSBC companies was at that time approximately HK$9.1 million.

66. At this juncture it should be said that, aside from any funds intended to be released from the liquidation of his securities, on 22 and 23 October John Hui and his wife gave to their solicitors a deposit against legal costs of HK$220,000 by way of cash and a cheque.

67. As it transpires, John Hui's handwritten instructions were wrongly addressed. On 24 October, Ms Chan received a faxed letter to the following effect :

"Please note that we are unable to act because said instruction is not addressed to the right entity. In order for us to proceed, please advice your client, Mr. Hui, to give us another instruction with his signature in original form addressed to HSBC Broking Securities (Asia) Limited. For your information, Mr. Hui also maintains a futures account with HSBC Broking Futures (Asia) Limited. If it is Mr. Hui's intention to also liquidate the position in his futures account, please advice him to instruct us accordingly."

68. That same day, John Hui (who was in custody) was able to sign typed instructions to liquidate both accounts and transfer all proceeds to Susan Liang & Co. How it was that John Hui was able to arrange for that to be done has been a matter of investigation by the police. It appears to have involved another solicitor from a firm other than Susan Liang & Co. But there is no suggestion that the applicant was aware of this and it need be considered no further.

69. It is, of course, implicit in his application for judicial review that the applicant has denied the factual premise for his arrest; namely, that he knew or must have suspected that the securities held by John Hui which he desired to have sold constituted the proceeds of an indictable offence. In support of this, his counsel, Ms Li, spoke of the fact that at the bail hearing on 23 October 2001, after the applicant had met with his clients for the first time, he placed the following matters before the magistrate in open court

(a) that there was no evidence that funds obtained by defrauding the Bank of China had gone through the personal accounts of John Hui or his wife;

(b) that there was no evidence that either of them had received any benefit from the defrauding of the Bank of China, and

(c) that they had fixed assets in Hong Kong valued at some HK$17 million, making it less likely that they would abscond.

70. The application for bail was unsuccessful. John Hui and his wife were ordered to remain in custody until the next hearing on 30 October 2001.

71. When it came to the notice of OCTB that John Hui had given instructions for his two security accounts to be liquidated, a restraining order was obtained pursuant to s.15 of OSCO. The transfer of funds to Susan Liang & Co. was stopped.

72. On 30 October 2001, John Hui and his wife appeared again before a magistrate. The applicant represented them. He applied for bail a second time and again it was opposed by the prosecution. The written grounds of opposition included the following :

"Hui managed to have instructions given to Hong Kong Bank to sell all his shares and transfer all his monies to another person's account. If bail is granted, it is likely that he would commit further offences by dissipating assets because he attemped to dissipate proceeds of crime even when he was in custody." [my emphasis]

73. When this ground of opposition was made known to him, the applicant explained to the magistrate that the other person's account was in fact the client account of his instructing solicitors. To prove this he handed up the two type-written instructions signed by John Hui on 24 October. When the magistrate enquired as to the value of the two securities accounts, the applicant, it seems, took instructions from Ms Chan and then advised the magistrate that the figure was '$HK5-7 million'.

74. What then of the police investigations concerning the applicant? In an affirmation prepared for these proceedings, an officer in OCTB, Detective Senior Inspector Cope, has said :

" As a result of my investigation, as of the date of the applicant's arrest on 14 March 2001, I had the following information upon which I reasonably suspected the Applicant knew or suspected that the property in HUI's accounts in whole or in part, directly or indirectly represented the proceeds of an indictable offence, i.e. the Bank of China thefts

(a) The applicant was aware that HUI was detained in custody for a serious criminal offence involving the laundering of alleged proceeds of thefts from BoC, and that the offence HUI was charged with related to his employment as the manager of a company whose source of funding was alleged to be money stolen from BoC in Kai Ping. This was based on documents given to him during court proceedings on 23 October 2001 and 30 October 2001.

(b) The Applicant was aware that HUI, before his employment by Ever Joint Property was an employee of Sin Hua Bank. This was based on documents given to him during court proceedings on 23 October 2001 and 30 October 2001. However, since working for Ever Joint Property, HUI had amassed considerable assets - that can only have come as a result of his employment by Ever Joint Property. The applicant was aware of HUI's large personal assets when the prosecuting counsel addressed the court on 23 October 2001.

(c) The Applicant was present when the handwritten instruction dated 23 October 2001 was prepared in the cells of Eastern Magistracy on 23 October 2001."

75. In his affirmation, the 2nd respondent, the arresting officer, has said :

" After studying every document in the Action File, in particular the case facts prepared by the officer-in-charge of the case, DSIP Cope, I understood the applicant was allegedly present in the detention center of Eastern Magistracy on 23 October 2001 when HUI signed the hand-written transfer request asking the HSBC Broking Services Ltd. to sell all the shares owned by HUI and to transfer all the monies to the bank account of Susan LIANG & Co. He was Counsel for HUI in the proceedings on 23 October 2001 when he was given a summary of the facts of the case. And, by 30 October 2001 the Applicant was allegedly aware of two further typewritten requests to the HSBC when he applied for bail on behalf of HUI and HUI's wife. I learnt from the case facts prepared by DSIP Cope that the funds in the HSBC stocks accounts were approximately HK$9.1 million. I thought this sum was apparently far too much to settle the legal expenses at the early stage of the legal proceedings. From the case facts prepared by DSIP Cope, I believed that the funds in the accounts held by HUI were in whole or in part, directly or indirectly proceeds from the thefts form the Kai Ping Branch of the Bank of China in Mainland China.

9. From reading all the material in the Action File, I reasonably suspected that the Applicant knew or suspected that the attempted transfers of funds in October 2001 involved in whole or in part, directly or indirectly, the proceeds from the thefts from the Kai Ping Branch of the Bank of China in Mainland China, yet the Applicant had made no disclosure to any authorized officer."

76. As to the issue of legal professional privilege, the 2nd respondent said the following in his affirmation :

" None of the information upon which I reasonably suspected the Applicant was guilty of the offence of 'Failing to make a disclosure of his knowledge or suspicion that property in whole or in part directly or indirectly represents any person's proceeds of an indictable offence', contrary to section 25A(1) and (7) OSCO, came from information subject to legal professional privilege. I had no idea of what was discussed amongst the applicant and Mary CHAN ..."

77. As to the issue and execution of the search warrant enabling the police to search the applicant's chambers, Mr Blanchflower pointed out that during the search the applicant had claimed legal professional privilege in respect of all the material seized and that claim had been honoured. As a consequence, the material was seized but not examined and was placed into sealed envelopes. Later, with the applicant present, the envelopes were opened and examined by DSIP Cope. The majority of the documents were returned to the applicant. In respect of the documents (some 12 pages) retained by DSIP Cope, there was no claim of legal professional privilege maintained either by the applicant or by his clients.

78. There was, I am told, considerable publicity surrounding the arrest of the applicant. This publicity had a material effect on his practice. In June 2002, some three months after his arrest and after the applicant's legal representatives had been informed by OCTB that a criminal investigation into his conduct was still proceeding, the applicant issued his Notice of Application for Leave to apply for Judicial Review. Leave was granted by myself ex parte on 17 June 2002.

79. On 25 June 2002, some eight days after I had granted leave to the applicant, officers of OCTB referred the results of their investigation to the Department of Justice. Advice was received in July to the effect that no criminal proceedings would be brought against the applicant in respect of the offence for which he had been arrested. The applicant was informed of this by letter dated 17 July 2002. The letter reads :

" As you are aware, there was a police investigation into the suspected offence under section 25A of the Organised and Serious Crimes Ordinance, Cap 455 concerning you and others. The investigation into you is now complete.

Please be informed that insofar as it concerns you, at this stage no further action will be taken." [my emphasis]

80. However, the applicant was concerned that the use of the phrase 'at this stage' in the letter indicated that the investigation was not conclusively finalised and that he remained in jeopardy of it being re-opened subject to what he believed the police position to be on the applicability of LPP to s.25A of OSCO; namely, that the section was to be read as abrogating to the privilege. Accordingly, the applicant proceeded with his application for judicial review.

Does s.25A limit or abrogate legal professional privilege?

81. I am satisfied that s.25A of OSCO does not in any way limit or abrogate the common law rule of LPP or, to express it in positive language, I am satisfied that the section is in all respects subject to the rule. I have been greatly assisted in coming to this finding by the unanimous view of counsel.

82. Earlier, I said that, while legal professional privilege may be limited by legislation, this will only be so where the legislation expressly provides for the limitation or where, as a matter of interpretation, it must necessarily be implied. This, I believe is the test.

83. In R (Morgan Grenfell) v. Special Commissioner of Income Tax (supra), Lord Hoffmann stated the test in the following terms :

"... the courts will ordinarily construe general words in a statute, although literally capable of having some startling or unreasonable consequence, such as overriding fundamental human rights, as not having been intended to do so. An intention to override such rights must be expressly stated or appear by necessary implication. The speeches of Lord Steyn and myself in R v Secretary of State for the Home Department, Ex p Simms [2000] 2 AC 115 contain some discussion of this principle and its constitutional justification in the context of human rights. But the wider principle itself is hardly new. It can be traced back at least to Stradling v Morgan (1560) I Pl 199."

84. The test has been stated to the same effect in a number of common law jurisdictions. See, for example, the dicta of Elias CJ in the recent judgment in Auckland District Law Society v. B [2002] 1 WLR 721.

85. There is no reference in s.25A to LPP or indeed to legal practitioners. The question therefore is whether by necessary implication the section must be read as abrogating or limiting LPP. A necessary implication is not the same as a reasonable implication. This was underscored by Lord Hobhouse in R (Morgan Grenfell) v. Special Commissioner of Income Tax (supra) who (at 1311) defined a necessary implication in the following terms :

"A necessary implication is one which necessarily follows from the express provisions of the statute construed in their context. It distinguishes between what it would have been sensible or reasonable for Parliament to have included or what Parliament would, if it had thought about it, probably have included and what it is clear that the express language of the statute shows that the statute must have included. A necessary implication is a matter of express language and logic not interpretation."

86. I confess I find it puzzling that the draftsman should expressly have reserved LPP elsewhere in the Ordinance when he has not done so in s.25A. But I do not from that draw any conclusion that there must thereby have been an intention on the part of the legislature that only in respect of matters falling under s.25A was the privilege to be abrogated. That is not a necessary logical consequence of reading the sections together and in the context of the Ordinance . The sections in which LPP is preserved appear in Part II of the Ordinance, that part being headed 'Powers of Investigation', and are-

(a) S.3 in which a mechanism is set in place for the delivery up of information. However, in terms of sub s.(9), no information subject to LPP need be divulged; a lawyer need only give the name and address of his client.

(b) S.4 in which a mechanism is set in place for the delivery up of material or obtaining access to it. However, in terms of sub s.(11), material which is subject to LPP need not be produced nor access given to it.

(c) S.5 in which a mechanism is set in place for searching for material. However, in terms of sub s.(5) material that is found may only be seized and retained if it not subject to LPP.

87. If, in the coercive mechanisms of investigation laid down in Part II of the Ordinance to assist the authorities in the detection and investigation of relevant offences, LPP is expressly preserved, why then in the absence of express language should it be implied that the privilege is abrogated in s.25A which itself has as its principal purpose the rendering of assistance to the authorities in the detection of those same offences? There can be no logical imperative to that effect. Indeed, to the contrary, the logical imperative must be that reports must be made in terms of s.25A provided they do not breach legal professional privilege. That reading would be entirely in harmony with the stated intent and purpose of the sections to which I have referred in Part II of the Ordinance.

88. My view that s.25A cannot be read as by implication necessarily abrogating LPP is fortified by a consideration of the internal structure of the section, more particularly a consideration s.25A(3)(a). That section provides that

A disclosure referred to in subsection (1)

(a) shall not be treated as a breach of any restriction upon the disclosure of information imposed by contract or by any enactment, rule of conduct or other provision;

(b) ..."

89. The subsection makes it plain that a duty to report must be discharged even when there are obstacles to so doing in public or private law. At the same time as stating the extent of the duty, it offers protection to those who discharge it. In this latter regard, subsection (b) which I have cited earlier in this judgment (para.3) provides immunity against a claim for damages.

90. But subsection (3)(a) refers only to the breach of any restriction upon the disclosure of information imposed "by contract or by any enactment, rule of conduct or other provision". It makes no express reference to any restriction imposed by LPP. The privilege, however, is not to be read as being included in the language used. LPP does not fall under the description of 'contract' nor 'enactment'. Nor, in my view, can it be described as a 'rule of conduct'; it is far more profound than that and is of a different genus being an ancient rule of common law encapsulating a fundamental human right. As to the general residuary expression 'or other provision', I am satisfied, by adherence to the ejusdem generis principle, that it refers only to matters falling into the classes of what have been specifically described before. See, for example, R v. Edmundson (1859) 28 LJMC 213 (at 215) :

"... where there are general words following particular and specific words, the general words must be confined to things of the same kind as those specified."

91. If s.25A was intended by the legislature, if only by necessary implication, to abrogate legal professional privilege why then was that privilege not referred to in subsection(3)(a)? It can only mean that it was not because LPP unlike a contractual obligation or one laid down by an enactment was never intended to be the subject of any breach; in short, was never intended in any way to be limited or abrogated.

92. Finally on this issue, it must be remembered that in 1995 when s.25A was enacted the Letters Patent provided that those provisions of the ICCPR made applicable to Hong Kong (which included what I will describe as fundamental litigation rights) were to be implemented through the laws of Hong Kong and no laws were to be implemented which restricted the rights contained within those provisions in a way which was inconsistent with the ICCPR. Art.14, para.3(b) of the ICCPR directs that in the determination of a criminal charge or in a civil suit everyone shall "have adequate time and facilities for the preparation of his defence and to communicate with counsel of his own choosing". That provision, it has been said, incorporates what in common law we call LPP. In this regard, see, for example, the UNHCR General Comment 13 (para.9)

"... this subparagraph requires counsel to communicate with the accused in conditions giving full respect for the confidentiality of their communications. Lawyers should be able to counsel and to represent their clients in accordance with their established professional standards and judgment without any restrictions, influences, pressures or undue interference from any quarter."

93. The legislature, at the time s.25A was enacted, would have been cognizant of the fact that a restriction on the fundamental right of LPP in the Ordinance would have been inconsistent with Art.14 of the ICCPR. How then can it be said that, in the absence of express provision, the legislature must nevertheless be implied to have intended to abrogate a right protected by the ICCPR and as such entrenched in our law pursuant to the Letters Patent?

94. Being satisfied therefore that s.25A does not in any way limit nor abrogate common law LPP, there is no need for me to consider whether, if the section did so, that it would be inconsistent with the Basic Law or art. 14 of the ICCPR.

Should a declaration be made that s.25A does not limit nor abrogate legal professional privilege?

95. The applicant (supported by both the Bar Council and the Law Society) has sought not merely a finding that s.25A does not limit nor abrogate LPP but a formal declaration to that effect. It is the first declaration sought.

96. The respondents reply by saying that, as they have never disputed that s.25A is subject to LPP and as the arrest of the applicant was founded as evidential material unrelated to confidential communications between him and his clients, a formal declaration will serve no purpose and should not be made. In this regard, Mr Blanchflower has relied on the dicta of Godfrey VP in Cheung Man Wai v. Director of Social Welfare [2000] 3 HKLRD 255 (at page 259) :

"The Court, even in public law proceedings, is loath to make any declaration in the nature of an advisory opinion as to the true construction or effect of legislation. It is equally loath to make a declaration in a situation which can be described as academic or hypothetical, because such a declaration would not be grounded on any factual basis. And the Court will certainly not make a declaration unless it is satisfied that the making of that declaration will serve some useful purpose."

97. S.21K(2) of the High Court Ordinance, Cap.4 provides that :

" An application for a declaration or an injunction ... may be made in accordance with rules of court by way of an application for judicial review, and on such an application the Court of First Instance may grant the declaration or injunction claimed if it considers that, having regard to

(a) the nature of the matters in respect of which relief may be granted by orders of mandamus, prohibition or certiorari;

(b) the nature of the persons and bodies against whom relief may be granted by such orders; and

(c) all the circumstances of the case,

it would be just and convenient for the declaration to be made or the injunction to be granted, as the case may be."

98. O.15 r.16 of the Rule of the High Court directs that

" No action or other proceeding shall be open to objection on the ground that a merely declaratory judgment or order is sought thereby, and the Court may make binding declarations of right whether or not any consequential relief is or could be claimed."

99. In the result, as Lord Keith said in R v. Secretary of State for Employment, ex parte Equal Opportunities Commission [1995] 1 AC 1 (at 36), "the history of declaratory relief, authority and the terms of O.15, r.16 all point to the court having power to make a declaratory judgment in judicial review proceedings brought by a [claimant] who has locus standi, whether or not the court could also make a prerogative order".

100. The respondents, of course, do not say that this Court has no power to grant a bare declaration, they say rather that, in the exercise of this Court's discretion, it would not be just and convenient to do so. It would not be just and convenient because there is no dispute, and never has been, as to s.25A abrogating LPP; that at best therefore the dispute is theoretical and in the result a declaration would constitute an advisory declaration.

101. I do not agree. As I have accepted earlier, s.25A is far from clear as to the matter of LPP. The applicant's fear that his arrest could only have been lawful if the police believed, and were correct in their belief, that LPP was overridden by s.25A was, in my view, a rational fear. As I will demonstrate later, very little evidence existed outside of the constraints of LPP to indicate that he was guilty of a contravention of s.25A(1)(a). A declaration to the effect that s.25A did not limit nor abrogate LPP would materially perhaps decisively assist him in respect of what he could only assume were on-going investigations into his alleged criminal conduct. A declaration would assist because it would demonstrate that his failure to make a report pursuant to s.25A(1)(a), if one factually was ever required, was explained by his obligation, recognised in the Ordinance, to adhere to the constraints of LPP.

102. On the material placed before me, I could well understand the applicant being of the belief that the applicability of LPP to s.25A of OSCO was an issue central to his predicament. In this regard, the following must be remembered :

(a) The applicant had had no social or business relationship with his client. Their relationship had been purely professional. The applicant could not therefore, in looking to the reasons for his arrest, look to any independent relationship or financial dealings with his clients.

(b) In his mind, understandably, matters of substance concerning his client's finances could only have arisen in the course of communications protected by LPP (for example, the communication as to the provenance of the assets held in the securities accounts and whether, in law, they could be liquidated) or, if falling outside of LPP, had already been openly announced by him in court, with the prosecution present (for example, why it was intended to liquidate the securities accounts and for whom the funds were intended).

103. The clear statement made on behalf of the respondents that in their view s.25A did not limit nor abrogate LPP, while welcome, did not dispose of the matter. Uncertainty as to the true position in law remained. The applicant wished for the matter to be put beyond doubt in the form of a declaration by this Court or any higher court with which the matter may finally rest.

104. A declaration as to whether s.25A limited or abrogated LPP was also integral to the further relief sought by the applicant; that is, as to the lawfulness of his arrest. For that lawfulness to be determined, first a declaration in respect of the applicability of LPP was required.

105. It must also be recognised that when this hearing commenced there was a degree of uncertainty both as to a true reading of s.25A and as to the manner in which the police (that is the officers of OCTB) viewed the limits of LPP. That uncertainty had created and continued to create apprehension as the part of those responsible for guiding the legal profession as to exactly where their members stood. Were their members as vunerable as the applicant or were they not?

106. I have not exhausted all the matters that I have taken into consideration. They are sufficient, however, for me to be able to say with confidence that the issues that came before me in respect of the first declaration sought were not merely theoretical and were of general importance.

107. In Gouriet v. Union of Post Officers Workers [1978] AC 435, Lord Edmund-Davies (at 513) recognised that, although the power to grant declaratory relief was at first exercised sparingly, by no later than 1899 it was recognised as an 'innovation of a very important kind'. In the same judgment, Lord Diplock described it as a useful power, one that has become more extensively used.

108. At the vanguard, some judges have ruled that in appropriate circumstances a public law court ought to exercise the jurisdiction to give what may be criticised as advisory opinions. See, for example, the words of Laws J in R v. Secretary of State for the Home Department, ex parte Mehari [1994] QB 474 (at 491).

109. In the present case, in granting the declaration sought, I do not believe that it will constitute an impermissible advance into a new advisory declaratory jurisdiction. The applicant in this matter was faced with a specific predicament. That predicament potentially confronted other practicing members of the profession. Accordingly, this Court was not looking to hypothetical facts or to some possible future concern. The problem was an existing one and was given a keen edge by the ambiguity of the legislation.

110. A declaration settles the problem. Not only does it put the matter beyond doubt for the applicant himself, I believe it will provide some guidance for the profession as a whole and also for the law enforcement authorities.

Should the additional declaration be made?

111. The seeking of this declaration (which came during the course of the hearing) has arisen out of the concern expressed by counsel for the applicant and the Bar Council that, even if s.25A is subject to LPP, its obligations nevertheless place barristers (in the ethical conduct of their profession) in an impossible position, one in which their duty to safeguard the fundamental rights enshrined in LPP is in direct conflict with their duty to make reports to the authorities pursuant to s.25A.

112. Barristers, of course, unlike solicitors, do not involve themselves in the handling of client's funds. They do not manage trust or client accounts. They do not receive moneys direct from a client, invest them, put through the conveyance of real property and the like. Barristers, by the nature of their profession and their relationship with solicitors, are removed from such affairs and are not therefore a physical conduit for or a repository of client funds. This being the case, barristers are to be distinguished from solicitors and that is why, as I understand it, the additional declaration relates only to them. The declaration has been cited earlier in this judgment but bears repeating

"Further or in the further alternative, a Declaration that section 25A of the Organized and Serious Crimes Ordinance, Cap.455 insofar as it requires a barrister to report to an authorized officer any information or communications communicated to him when he is acting for or advising his client in the capacity as a barrister contravenes Article 35 and 39 of the Basic Law and Article 14 of the International Covenant on Civil and Political rights, 1966; and"

113. I have found it a little difficult to comprehend the boundaries of what has been sought in this declaration. As I read it, what has been sought is a declaration that it is a contravention of the Basic Law and the ICCPR to require a barrister to report any information coming to his knowledge, whether that information comes directly from the client or not, if that information arises out of the barrister's professional (i.e. his lawful) representation of that client. This is so whether the information does or does not fall under the protective umbrella of LPP.

114. For the applicant, Ms Li said that LPP as a fundamental right guaranteed by the Basic Law is absolute. There is (and must be) a prima facie presumption that all communications between a lawyer and his client are subject to LPP and it is impermissible therefore to compel a legal practitioner of his own volition to make a report to the authorities.

115. What is called, the 'crime/fraud exception', she said, only allows a lawyer to disclose information in an appropriate situation; invariably when ordered to do so by a court which has had an opportunity to hear evidence from relevant parties and to consider relevant materials. Disclosure when compelled by a court order and reporting on your own volition are entirely different concepts, the latter amounting to an unlawful restriction on (or incursion into) LPP which offends art.35 of the Basic Law.

116. Clearly the concepts are different. But I have been unable to find any authorities which state that a legal practitioner is compelled to keep silent on all matters arising out of his relationship with his client until directed by a court to do otherwise. I would imagine that today, in the knowledge of the limits of the privilege, many documents are handed over and information revealed by lawyers without the need for a court order because they are satisfied that the material is not subject to the privilege. What Ms Li has spoken of therefore may often have been the invariable practice but it is not part of the concept of LPP itself.

117. Ms Li furthered her submission by saying that to construe s.25A in such a way as to allow a police officer to arrest a barrister on the basis that the officer had a reasonable suspicion that the barrister himself suspected that property of his client may represent the proceeds of an indictable offence would not only put all barristers at unacceptable risk but would mean construing s.25A to allow for the infringement of the client's right to confidentiality.

118. There was simply no way in which the fundamental right of LPP vesting in the client could be left unrestricted if a barrister was forced to comply with the provisions of s.25A. Hence the requirement for the declaration that a barrister should not be required to disclose anything that arises out of the barrister's professional representation of his client.

119. In my judgment, on a plain reading, it is patent that the legislature intended all persons, including legal practitioners, to be subject to the obligations imposed by s.25A of OSCO. In that general sense, legal practitioners are not to be distinguished from bankers, accountants, stockbrokers, merchants and business people of all kinds : all are the potential victims of money laundering schemes. When I speak in this context of legal practitioners, I include barristers. On a plain reading, I am confident that they too were intended, in a general sense, to be subject to the obligations imposed by s.25A. While barristers may not physically deal with a client's funds, many do advise on how best a client's funds may in law be invested or protected and may, in the course of representing a client, come to learn something of a1 client's finances.

120. But while, in a general sense, I believe it is patent on a plain reading of s.25A that the legislature intended both solicitors and barristers to be subject to s.25A, they, in particular, are exempted from the obligations imposed by the section, if, in order to fulfil those obligations, a breach of LPP would be required. The legislature has therefore recognised the fundamental human right of confidentiality protected by art. 35, 39 and 87 of the Basic Law and art. 14 of the ICCPR. What is required, however, is that information which is not protected by that fundamental right must be reported.

121. In this respect, I would pause to say that if LPP is an absolute right then (as with absolute privilege in judicial proceedings) it is a privilege to be kept within defined boundaries and courts should be slow to extend the scope of the privilege : see Waple v. Survey County Council [1998] 1 All ER 629 (at 627).

122. The law, of course, has always recognised that LPP has its limits and those limits are to a material extent defined by the vunerability of LPP to exploitation and abuse. As Lord Justice Parker said in Banque Keyser Ullmann v. Skandia (UK) Insurance (supra) "it would be monstrous for the Court to afford protection ... in respect of communications which are made for the purpose of fraud or crime."

123. Flowing from this, it may be asked : why should it be that a person who communicates with his barrister for the purpose of furthering a crime; namely, a money laundering scheme, should nevertheless be held, in all practical terms, to be communicating with his barrister in the ordinary course of professional communications? Does that not constitute an impermissible extension to the scope of LPP and will that not, as Lord Justice Parker expressed it, afford a 'monstrous' protection to those whose purpose it is to further a criminal enterprise? These questions need only be asked to appreciate their force. In my view, if barristers, like Nelson, are able to turn a blind eye because of the difficulties which would otherwise face them, it would have the result in the long run of undermining the integrity of LPP itself.

124. The difficulties facing barristers are fully recognized. Under s.25A a barrister is not able to keep his silence until called to court to put his position and then submit himself to the decision of the court as to whether what he has learnt is or is not protected by LPP. In terms of the section, a barrister is obliged of his own volition, and by reason of s.25A(3) without consulting his client, to make a report 'as soon as it is reasonable for him to do so'.

125. But it is in that last phrase, said Mr Blanchflower, for the respondents, that the dilemma facing the barrister of whether, if he reports, he will breach LPP or not, while difficult to resolve, is made capable of resolution. For barristers, like solicitors, are able to turn to a governing body that is able to give guidance in respect of the multitude of difficulties that from time to time face members of the profession. That being so, a barrister faced with the dilemma of whether to make a report or not will be able to seek guidance from his governing body, the Bar Council, and act accordingly. If he does so and makes a report, he will have made that report as soon as it is reasonable for him to do so. He will not be subject to disciplinary sanction by the Council itself and, in respect of any civil claim for damages, will be protected by the provisions of s.25(3)(b) of the Ordinance.

126. Mr Blanchflower emphasised that LPP is not some amorphous concept, ill-defined and, in respect of any given set of facts, incapable of determination. For well over a century the courts of the common law have been tasked with making such determinations, invariably the judges of those courts having come from the ranks of barristers.

127. But while all of this, said Ms Li, for the applicant, may speak for the interests of barristers, the fact that the legal profession can regulate itself is neither here nor there. Who speaks for the interests of the client? The client can have his right to confidentiality stripped away without notice because his barrister finds himself in a dilemma and the client is left with no remedy. This argument, in my view, applies equally to solicitors and barristers. If a member of either profession makes a report pursuant to s.25A, the innocent client finds himself in a position where his right to confidentiality has been stripped away without notice.

128. Looking to the question from the perspective of society as a whole, there is, in combating money laundering, notoriously an evil to be met. The huge flow of illegal funds involved in money laundering has been shown to distort economies, cause corruption and materially undermine the orderly working of open and free societies. That being so, in my view, the objective of s.25A, in being applied to all persons, is sufficiently important to justify making both legal practitioners and clients aware of the fact that LPP does have its limits. The measures put into place in s.25A in respect of legal practitioners, while far-reaching, are, I believe, rationally connected to that legislative purpose and no more than is necessary has been put into place to achieve the purpose. As to when LPP does or does not apply, lawyers have always been obliged to understand its limits and to act accordingly. Clients too should know that it has its limits and is not, by means of disguising their true intent from their lawyers, an invulnerable mechanism for seeking advice on (or being helped in) the pursuit of criminal purposes.

129. The observations of Lord Goff in R v. Central Criminal Court, ex parte Francis & Francis [1989] 1 AC 346 (at 393) are pertinent. In looking to s.10(2) of the Police and Criminal Evidence Act 1984 and the meaning of 'items subject to legal privilege', he said :

" It is not to be forgotten that the privilege is the privilege of the client, not of the solicitor; and so it is to be expected that the privilege should be negatived where the client has the intention to further a criminal purpose, whether or not his intention is shared with his solicitor. Indeed, one of the most important points established in the leading case of Reg. v. Cox and Railton was that legal professional privilege does not exist where the client has such an intention, even though his intention is unknown to his solicitor; and it would surely be most extraordinary if section 10(2) was drafted with the intention of excluding that principle, thereby substantially extending the scope of the privilege to protect the dishonest client."

130. What is to be emphasised is that a fundamental right such as LPP is not easily set aside. In respect of all matters arising out of the professional relationship between a legal practitioner and his client the presumption must be that LPP applies unless it is demonstrated not to apply. A court will not set LPP aside unless a prima facie case 'resting on solid ground' (see : O'Rourke v. Darbishire, supra) is demonstrated. That, in my view, must also be the standard that applies to legal practitioners. LPP must be maintained until a case has been demonstrated that compels a finding to the contrary; not a case proved beyond reasonable doubt but nevertheless a substantial case, one resting on solid grounds, one capable of shifting the heavy weight of a fundamental right.

131. I have given consideration to the submissions made that a legal practitioner could not lawfully act pursuant to s.25A unless he knew that, for whatever reason, LPP did not apply; in short, that suspicion was not sufficient, there must be actual knowledge. But to 'suspect', as the word is used in the section, does not carry with it a connotation of mere surmise. What is suspected must be demonstrated to the high degree to which I have made reference.

132. As intimated, the dictates of s.25A will present difficulties to both barristers and solicitors, even if (hopefully) they are rare. But, for the reasons I have given, I am satisfied that those difficulties, while sometimes profound, will not place the barrister in a position where the maxim lex non cogit ad impossibilia applies.

133. Similarly, I am not convinced that in respect of s.25A the maxim impotentia excusat legem (the law does not punish a person for not doing what they lacked power to do, or for being in a situation they were powerless to avoid) has any application.

134. As for the contention that the principle of statutory interpretation of 'unreasonable dilemma' should apply, I am far from convinced that a declaration in the form of (or similar to) the additional declaration should be granted on the basis of it. Difficulties themselves do not bring the maxim into effect. Legislation confronts many classes of people with difficulties. For the additional declaration to be granted, what is required, in my view, is for it to be shown, that if barristers remain subject to s.25A, they will for all practical purposes be impaled on the horns of an almost impossible dilemma. As it is expressed in Statutory Interpretation by FAR Bennion (3rd Ed) at 754 :

" A strained construction is necessary where the literal meaning places persons who are subject to the Act in a dilemma so unreasonable that Parliament cannot be supposed to have intended it."

The legislature, however, has not directed persons subject to s.25A to make a report 'immediately' or 'forthwith' but only when it is reasonable for them to do so. For a barrister that will be when he has considered his position in law (and he, perhaps best, will know the law) and when, if he deems it prudent, he has sought the guidance of the Bar Council which no doubt will ensure appropriate guidelines. That being so, having regard to the evil being combated, I do not see that s.25A places barristers in a dilemma so unreasonable that the legislature cannot be supposed to have intended it.

Should the declaration be made that the applicant was unlawfully arrested?

135. For the reasons already given, I am satisfied that legal practitioners, both barristers and solicitors, are subject to s.25A and may therefore, even when practising as such, contravene the section. Their subjection to the section is, however, subject to the proviso that they are in law under an express obligation not to reveal matters protected by LPP.

136. That being the case, it is necessary to return to the provisions of the Police Force Ordinance to determine whether the arresting officer effected the applicant's arrest lawfully in terms of s.50 of the Ordinance. That section (to cite it again) directs that

"(1) It shall be lawful for any police officer to apprehend any person who he reasonably believes will be charged with or whom he reasonably suspects of being guilty of

(a) any offence for which the sentence is fixed by law or for which a person may (on a first conviction for that offence) be sentenced to imprisonment; or

(b) ..."

[my emphasis]

137. Suspicion alone is not sufficient. The public are safeguarded by the requirement that the suspicion is reasonable and what is reasonable will, of course, depend not only as the information available to the arresting officer in each case but how that information is to be considered in light of the relevant law, by which I mean the law relevant to the offence for which the arrest is contemplated.

138. The test to determine reasonable suspicion was stated by the House of Lords in O'Hara v. Chief Constable [1997] AC 286, Lord Hope describing it as a simple but practical one. He continued :

" It relates entirely to what is in the mind of the arresting officer when the power is exercised. In part it is a subjective test, because he must have formed a genuine suspicion in his own mind that the person has been concerned in acts of terrorism. In part also it is an objective one, because there must also be reasonable grounds for the suspicion which he has formed. But the application of the objective test does not require the court to look beyond what was in the mind of the arresting officer. It is the grounds which were in his mind at the time which must be found to be reasonable grounds for the suspicion which he has formed. All that the objective test requires is that these grounds be examined objectively and that they be judged at the time when the power was exercised.

This means that the point does not depend on whether the arresting officer himself thought at that time that they were reasonable. The question is whether a reasonable man would be of that opinion, having regard to the information which was in the mind of the arresting officer. It is the arresting officer's own account of the information which he had which matters, not what was observed by or known to anyone else. The information acted on by the arresting officer need not be based on his own observations, as he is entitled to form a suspicion based on what he has been told. His reasonable suspicion may be based on information which has been given to him anonymously or it may be based on information, perhaps in the course of an emergency, which turns out later to be wrong. As it is the information which is in his mind alone which is relevant however, it is not necessary to go on to prove what was known to his informant or that any facts on which he based his suspicion were in fact true. The question whether it provided reasonable grounds for the suspicion depends on the source of his information and its context, seen in the light of the whole surrounding circumstances.

139. Suspicion is not to be equated with prima facie proof. It was said by Scott CJ in Dumbell v. Roberts [1944] 1 All ER 326 (at 329) that "the police are not called upon before acting to have anything like a prima facie case for conviction."

140. As to the nature of the required suspicion, in Hussien v. Chong Fook Kam and Another [1970] AC 942 (PC) Lord Devlin said (at 948) :

"Suspicion in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove.' Suspicion arises at or near the starting-point of an investigation of which the obtaining of prima facie proof is the end."

Lord Devlin qualified this by saying :

" To give power to arrest on reasonable suspicion does not mean that it is always or even ordinarily to be exercised. It means that there is an executive discretion."

141. Once a reasonable suspicion has been formed, an officer is not, however, obliged to refrain from effecting an arrest in order to make further inquiries. With the benefit of hindsight, prudence may have dictated courses of inquiry that could have been taken before making an arrest. But that is not the point. It is for the officer, in the exercise of his discretion, to determine when he should make an arrest. That 'executive discretion', as Lord Devlin described it, is restrained in law by the principle only that, at the time of the arrest, the arresting officer must have a 'reasonable' suspicion.

142. I turn now to the arrest of the applicant himself for an alleged contravention of s.25A(1)(a) of OSCO. In respect of that offence the arresting officer must have had a reasonable suspicion that the applicant himself must have known or suspected that the assets being liquidated by his client, John Hui, for the purposes of lodging funds with Susan Liang & Co. were the proceeds of an indictable offence and that, despite such knowledge or suspicion, the applicant had failed to make a report to an authorised officer.

143. From the affirmation of the arresting officer it is apparent that, viewed subjectively, he did have a genuine suspicion in his mind that the applicant had contravened s.25A(1)(a). That has not been disputed. The issue has always been the reasonableness of that suspicion.

144. What is reasonable depends on the circumstances and, in my view, in considering the arrest of a legal practitioner for a contravention of s.25A, it would be entirely unreasonable for a police officer to found his suspicions on any material that is known to be, or may well be, subject to LPP. A suspicion that is reasonable may only be founded on matters that are not encompassed by LPP. It is fundamental that a police officer must recognise that a legal practitioner is under a duty in law to protect the confidentiality of all communications between himself and his client that have arisen for the purpose of seeking and/or receiving legal advice. It would constitute an attack on the administration of justice itself if a legal practitioner could be lawfully arrested for adhering to his lawful duty to maintain the sanctity of what is now recognised as a fundamental human right. No such contradiction of duties between law enforcement authorities and the legal profession could have been envisaged by those who passed OSCO into law.

145. In the present case, of course, the arresting officer affirmed that none of the information upon which he suspected that the applicant was guilty of a contravention of s.25A(1)(a) arose from matters subject to LPP. Certainly, the instructions given by John Hui to his brokers to liquidate his securities and forward the proceeds to Susan Liang & Co. record no advice sought or given. The objective fact of those instructions cannot, in my view, fall within the protective walls of LPP and it is those instructions which form the basis for what the arresting officer has said was his reasonable suspicion that the applicant had contravened s.25A(1)(a) of OSCO.

146. Without explanation, it is understandable that, when they learnt of the instructions given by John Hui to his brokers, the police were concerned. On the day following his arrest for a serious money laundering offence, one in respect of which the police believed he had benefited over a number of years, and having already lodged more than $200,000 with his solicitors, John Hui had proceeded to give instructions that his securities accounts with HSBC were to be liquidated in full and the proceeds placed in trust with his solicitors. The value of those accounts was approximately $9.1 million. The securities were to be liquidated as soon as reasonably possible and all proceeds paid to the solicitors. Even taking into account the severe impact that the cost of legal proceedings can have on an individual in Hong Kong, it seemed to the arresting officer to be an entirely extravagant sum to be lodging at that early stage as a further deposit against fees and disbursements. To compound matters, in the haste to ensure that the instructions were lodged in proper form, third parties had become involved in a manner open to question.

147. But while there may have been reasonable suspicion to justify the arrest of the other parties (although I stress that I make no findings whatsoever in that regard), what of the applicant himself?

148. A reasonable suspicion means a reasonably informed suspicion. In the present case, that means that the suspicion of the arresting officer, to be reasonable, must have been knowledgeable of the essential role that a barrister plays in representing a client in legal proceedings and how his role is to be contrasted with that of a solicitor. A barrister does not look directly to the client for payment of his fees. His paymaster is the solicitor who briefs him. The responsibility lies on the solicitor to deal directly with the client and to ensure in any practical way necessary that he is placed in funds. The barrister does not involve himself in handling the client's moneys; he does not receive them, hold them, secure them on terms. In that regard, acting professionally, he should be a stranger to the mundane financial practicalities.

149. No suggestion has been made by the police that, as a barrister, the applicant improperly involved himself in the handling of John Hui's assets. Indeed, it is apparent from a reading of the reports and affirmations of the investigating officers that, in their view, the applicant had played an essentially passive role in the attempted movement of those assets. In this regard, one of the police case reports known to the arresting officer reads :

" In respect of the [applicant] he was undoubtedly present in the detention center of Eastern Magistracy when John HUI signed the hand written transfer request, and he was aware of the two further type written request by 30th October 2001 when John HUI made his second bail application. Whilst on the information currently available he has done no overt acts in respect of the attempts to move John HUI's funds, he was aware of the suspicious attempted fund transfer and yet has made no disclosure to any authorized officer ..."

150. Flowing from this, when looking to matters known to the arresting officer at the time he arrested the applicant, the following is to be noted :

(a) There was no evidence that the applicant was aware of the objective fact that on 22 and 23 October 2001 John Hui had place Susan Liang & Co. in funds in excess of $200,000. Indeed, as a barrister, there was no cause for the applicant to concern himself with that matter.

(b) Although the objective evidence indicated that on 23 October 2001 the applicant would have been present when John Hui wrote his instructions to his brokers to liquidate his securities accounts, there was no evidence that at the time the applicant had any knowledge of the value of those accounts.

(c) The applicant may have known, when all the relevant papers were placed before court at the bail hearing, that John Hui had been a one-time employee of a retail bank and certainly he knew that John Hui was now affluent. Indeed, as part of his advocacy, the applicant emphasized, the value of his clients' fixed assets in Hong Kong to try and persuade the magistrate that John Hui and his wife were unlikely to abscond. But, with respect, it is a complete non sequitur to suggest, as the police have done, that, with his background as a relatively modest retail banker, John Hui's wealth could only have come from his years of managing Ever Joint Property, the company alleged to be a money laundering vehicle, and that the applicant must have been aware of this. Wealth may be inherited, it may be earned by other members of the family, it may be generated in countless different ways. It was not for the applicant at that time, at an initial bail application, to actively probe the sources or possible sources of his client's affluence and to gauge the full extent of it. All this would (or should) have been appreciated by the arresting officer.

(d) There was no evidence to suggest that the applicant had played a role in the somewhat hectic and involved attempts to ensure that John Hui's instructions to his brokers were lodged in proper form or indeed that the applicant had any knowledge of these events. To the contrary, the probabilities were that the applicant was ignorant of them.

(e) Seemingly, the arresting officer, at the time he arrested the applicant, was not aware of exactly what had been said at the second bail hearing that took place on 30 October 2001. At that hearing, John Hui's attempt to liquidate his securities accounts had been raised and, in stating the facts of the matter, it appears that the applicant had had to take instructions from his solicitors as to the approximate value of those accounts : some '$5-7 million'. In ignorance of this, was the arresting officer entitled to assume, however, that on 23 October, when the handwritten instructions had been made out by John Hui, that he must have stated the value of those accounts? In my view, he was not. It would have been pure speculation.

151. At the end of the day, having considered with some care the various matters put forward by the arresting officer to found the reasonableness of his suspicions, I confess to being at a loss to find any substance in them. It appears to me that, being quite properly concerned as to the attempted liquidated of John Hui's securities accounts, whatever the strength of the case against the others, the police effected the arrest of the applicant to see if, in questioning him and searching his chambers, they could find grounds for a reasonable suspicion. For, in truth, before the arrest they had nothing which, judged objectively, can be called reasonable grounds for suspicion against him. It states the obvious, of course, to say that reasonable suspicion must exist at the time of arrest, it cannot be a legitimate purpose to make an arrest in the hope thereby of forming it.

152. The question then arises whether a declaration should be granted that the arrest of the applicant was unlawful. I am satisfied that it should.

153. While actions for unlawful arrest may normally (perhaps invariably) be instituted by way of writ, there has been no dispute as to facts in this matter. The reasons given by the police for the arrest of the applicant have been set out in detail and have been accepted by the applicant. The issue was whether those reasons would found a lawful arrest.

154. In addition, through Ms Li, the applicant has declared that he does not seek damages. His complaint against the police has related to the infringement of what he has said are his rights protected in public law. The applicant has not therefore sought a declaration as a tactical measure to enable him thereafter to commence proceedings claiming damages.

155. In any event, this court has the power in terms of O.53, r.9(5) to treat an application for judicial review as one begun by writ and I would, if necessary, rely on that power.

156. Nor do I consider the granting of a declaration to be purely advisory. It is no small matter for a person any person to be arrested. The applicant seeks exoneration of his name to enable him to pursue his career in the law without the restraints that his arrest (with the ensuing publicity) have placed upon him. In addition, he seeks a declaration as a bulwark against any possible continuation of the criminal proceedings against him.

157. This matter also has a broader importance for the profession and the police, both of whom must grapple with the difficulties presented by s.25A of OSCO.

Conclusion

158. I will therefore in substance, although not exactly as sought, grant two of the declarations; namely, declarations 1 and 4

"1. A Declaration that on the true construction of section 25A of OSCO, it does not cover information and communications communicated to counsel which are covered by legal professional privilege, and

4. A Declaration that the arrest and detention of the Applicant by Detective Senior Inspector Ngai Shiu Kei of the Organized Crime and Triad Bureau, Hong Kong Police Force on 14th March 2002 was unlawful."

159. As to costs, as the applicant has been substantially successful, I see no reason at this time why he should not be awarded his costs. There will be an order nisi to this effect.

160. As to the Bar Council and Law Society, as I have not had the benefit of hearing submissions, there will be an order nisi that there be no order as to costs in respect of them.

161. Both orders nisi will be made final within 30 days after handing down this judgment unless an application is made within that time to argue the matter.