RMBSA CORPORATE SERVICES LTD AND ANOTHER v. SECRETARY FOR JUSTICE AND ANOTHER

cacv 327/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal no. 327 of 2006

(on appeal from HCAL NO. 57 of 2006)

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J U D G M E N T

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Hon Ma CJHC:

1.    I agree for the reasons contained in the Judgment of Stock JA, that the appeal should be dismissed.  I also agree with the orders nisi as to costs.

Hon Stock JA:

Introduction

2.    In April 2006 a search warrant was issued by a magistrate pursuant to the provisions of the Mutual Legal Assistance in Criminal Matters Ordinance, Cap. 525 (‘the Ordinance’).  It authorised the search of premises of a corporate service provider (‘Rmbsa’) which were also the premises of a foreign law firm.  The warrant was executed.  By an application for judicial review, Rmbsa (first applicant) and the law firm (second applicant) challenged the validity of the warrant and of its execution.  That application was dismissed by Hartmann J on 10 August 2006.  This is an appeal from that dismissal. 

3.    With the authority of the Central Government, Hong Kong is party to a series of agreements for mutual legal assistance in criminal matters.  The Ordinance gives domestic legal effect to specific arrangements for mutual legal assistance between Hong Kong and other jurisdictions and in respect of which the Chief Executive in Council has by order directed that the Ordinance shall apply[1].  One such arrangement, in respect of which such an order has been made, is between Hong Kong and the Government of the Republic of the Philippines[2].

4.    The arrangement requires the signatory parties to provide assistance in the investigation and prosecution of criminal offences and in proceedings related to criminal matters, so long as that assistance accords with the provisions of the arrangements.  Such assistance includes the execution of requests for search and seizure.[3]  Requests are to be made by and to a designated Central Authority in each jurisdiction.[4]

5.    On 18 January 2006 the appropriate authority for such purposes in the Philippines made a request to the Secretary for Justice for legal assistance.

6.    The assistance sought was the issue and execution of a search warrant for the purpose of an investigation in the Philippines in connection with the construction of a terminal at Ninoy Aquino International Airport in Manila.  The allegations include the suggestion that the bank accounts of two companies incorporated in the British Virgin Islands, Jetstream Pacific Ltd (‘Jetstream’) and Mainland Global Ltd (‘Mainland Global’) were used for the transfer of corrupt funds to a person whom we shall call L whose function it was to bribe officials in the Philippines.  Those two companies were administered in Hong Kong by Rmbsa, the company that provides corporate services.  It is said that very substantial sums of money passed through these accounts.  The law firm, at its principal office in the Philippines, acts as counsel for a company alleged to have been complicit in the corrupt activities[5].  No allegation is made against the law firm.

7.    In January 2005, the office of the Ombudsman of the Republic of the Philippines – which, we are informed, carries out a prosecutorial function – issued indictments against a number of individuals, and investigations into the alleged bribery continues in the Philippines.  The purpose of the request to Hong Kong for mutual legal assistance was to pursue those investigations.  The evidence is that the assistance sought included a request for the search of the offices of Rmbsa, the registered office of Jetstream and Mainland Global, and for the seizure of such items there as related to Rmbsa’s relationship with those two companies as well as to other matters, to the details of which I will return[6].

8.    After receipt of the request, the Independent Commission Against Corruption (‘ICAC’) obtained records from the Companies Registry and conducted observation outside the registered address of Rmbsa.  Its Articles of Association show that it was established to act as secretary, director, accountant, registrar, and to provide nominee, custodian, trusteeship and other corporate services.  The entry in the Companies Registry showed that the only shareholders were a Mr Alejandro and Mr Buenaventura who together with a Mr Ramiro were the directors.  The registered office of Rmbsa was at Far East Finance Centre, Harcourt Road, Hong Kong.

9.    The complication which is at the core of this case is that that registered address is also the address of the law firm, which is a foreign law firm registered as such in Hong Kong of which Mr Alejandro and Mr Buenaventura are partners.

The warrant

10.    On 7 April 2006, an application was made by information of Tse Yuk-tsing, an investigating officer of the ICAC, to a magistrate for the issue of a search warrant under section 12 of the Ordinance.  The uncontested evidence is that the magistrate was asked what premises were to be searched and that he was told by Mr Tse that “the premises to be searched included the Hong Kong office of a Philippine law firm, which provided company secretarial services.”[7]  The information included the following:

‘The companies’ articles of incorporation provide no information regarding their owners, although the registered director of both [companies] accounts is Rmbsa Nominees Ltd, a Hong Kong affiliate of [P’s] Philippine legal counsel, the law firm of Romulo Mabanta Buenaventura Sayoc and de los Angeles.  … ( Rmbsa Nominees has since changed its name to Rmbsa Corporate Services Ltd).”

The reference to [P] is to a company that secured the contract to build the terminal and is said to have been involved in the alleged corruption. 

11.    The magistrate issued the warrant.  Its terms are important.  It recites the fact of the request by the Special Prosecutor of the Office of the Ombudsman in the Philippines for the issue of a search warrant under section 12 of the Ordinance and the fact that there has been laid before him, the magistrate, an information on affirmation “setting out the grounds for the belief that the things to which that requests (sic) relates are at Rmbsa Corporate Services Ltd (formerly Rmbsa Nominees Limited) Room 4206, Far East Finance Centre … .”  The warrant then continues as follows:

“	4.	I am satisfied that there are reasonable grounds for issuing the warrant.
		NOW THEREFORE I, under section 12 of the Ordinance, hereby authorize you, for the purpose of investigation in relation to those external serious offences, with such assistance, and by such force, as is necessary and reasonable:
			at any time of the day between 7:00 a.m. and 7:00 p.m. to enter into the said land and premises, to search for those things;
			and to seize those things found in the course of the search that you believe on reasonable grounds to be relevant to that investigation in relation to those external serious offences.
		Schedule
		Things of Rmbsa Corporate Services Limited (formerly Rmbsa Nominees Limited) relating to:
		(i)	its business purpose, powers, and date of incorporation;
		(ii)	its relationship to the Philippine law firm Romulo Mabanta Buenaventura Sayoc and de los Angeles;
		(iii)	its relationship to Jetstream Pacific Ltd and Mainland Global Ltd;
		(iv)	its financial transactions in Hong Kong and other bank account information, including transactions and bank account information in relation to Jetstream Pacific Ltd and Mainland Global Ltd;
		(v)	its relationship, or the relationship of Jetstream Pacific Ltd and Mainland Global Ltd, to:
			[There is here a list of individuals, companies and accounts which for the purpose of this appeal it is not necessary to reproduce.]
		THIS WARRANT ceases to have effect on the 7th day of May 2006, being a date for not later than one month after the issue of this warrant.”

12.    There is uncontested evidence that before the search warrant was executed, Mr Tse and another ICAC officer held a meeting with Mr Walsh, Deputy Principal Government Counsel of the Department of Justice, ‘who advised that should anyone claim legal professional privilege during execution of the search warrant, the items in question should be sealed in the presence of the claimant without examination and retained pending further resolution of the claim.’[8]

Execution of the warrant

13.    The warrant was executed on 12 April 2006 by a team of ICAC officers, led by Mr Tse, at Room 4206 Far East Finance Centre.  As to what transpired once the ICAC officers arrived at the premises there is some factual dispute on the affidavits and affirmations but those disputes are not necessary to determine for present purposes.  It seems relatively clear however that no separate facilities had been set aside to accommodate the files of Rmbsa.  That at least is the picture that emerges from the evidence presented by the applicants themselves, but is a matter to which I will later return.[9]

14.    Once at the offices, the search warrant was shown to Mr Alejandro and, according to one side of the evidence, he was told that the searching officers were interested only in documents that related to the secretarial service provided by Rmbsa.[10]  There is a dispute as to how matters unfolded thereafter but it suffices for present purposes to record that there was produced by Mr Alejandro’s staff two ring-folders, namely, the company kit of Mainland Global Ltd and the company kit of Jetstream Pacific Ltd.  These were examined by the officers.

15.    The testimony is that the company kit of Mainland Global Ltd contained the following documents:

(1)	an incorporation document;
(2)	a document showing that the first applicant was the Director of Mainland Global Ltd;
(3)	copy of a bank account opening form of Mainland Global Ltd of which Mr L was sole signatory; and
(4)	company minutes of Mainland Global Ltd showing that L was the beneficial owner of the company.

16.    The company kit of Jetstream Pacific Ltd is said to have included:

(1)	an incorporation document;
(2)	a document showing that the first applicant was the Director of Jetstream; and
(3)	a copy of a bank account opening form of Jetstream in respect of which Mr L was the sole signatory.

17.    Also produced was a company kit of Rmbsa.  According to the evidence it consisted of company registration documents; memorandum and articles of association; and a copy of a bank account opening form. 

18.    There were then were two further files relating to Jetstream and Mainland Global, and so labeled.  It is common ground that upon their production Mr Alejandro asserted that the material in the files were covered by legal professional privilege since they related to an arbitration in the Philippines to which Jetstream and Mainland Global were parties.  Mr Tse reported this to Mr Walsh and, in accordance with his instructions, the two files were sealed in an envelope in the presence of Mr Alejandro.  Mr Tse left the premises.  After he left, one of his colleagues asked if there was storage space in the premises designated for Rmbsa’s files and was told that there was and a room in which filing cabinets were located was inspected but nothing further was seized.  A list of seized items was provided to Mr Alessandro.

19.    Mr Alejandro’s testimony, on affidavit, contradicts that of the ICAC officers as to the claims for privilege.  Mr Alejandro asserts that he made clear to the officers that the premises were the offices of a law firm and was told that that was irrelevant because the warrant was addressed not to the law firm but to the first applicant at its registered address[11].  He says that he told the officers that all the materials on the premises were subject to legal professional privilege.[12]  He agrees that some of the material was sealed at the premises, but not the two ‘non-kit’ files of Jetstream and Mainland Global.  Be that as it may, by letter dated the 13 April 2006 solicitors acting for the law firm wrote to the ICAC asserting privilege in relation to all the documents seized and demanding that all be sealed pending judicial determination.  The items not sealed on 12 April were sealed in the presence of the solicitors on 13 April.

The application for judicial review

20.    The notice of application for leave to apply for judicial review, dated 2 May 2006, challenges the decision of the magistrate to issue the search warrant, the decision of the Commissioner of the ICAC to execute it, and the decision of the Commissioner to seize matters that were or appeared to be subject to legal professional privilege.  The remedy sought is an order of certiorari quashing the decision of the magistrate to grant the warrant; declarations that the execution of the warrant and the seizure of the documents were unlawful; an injunction to compel the Commissioner to return the documents; and damages for the tort of trespass.  Leave was granted on 12 May 2006.

21.    The notice of application cites article 29 of the Basic Law for the protection it confers against unlawful search; article 35 of the Basic Law for its protection of the right of Hong Kong residents to confidential legal advice and to article 39 of the Basic Law for similar protections, unnecessary here to recite, conferred by the International Covenant on Civil and Political Rights.

The issues

22.    The prime issue before us has boiled down to a narrow one.  It is whether, in the circumstances of this case, the magistrate was required by law to attach conditions to the warrant:

(1)	that no material covered by legal professional privilege was to be seized; and
(2)	that if at the time of entry to the premises, lawyers were not present, a lawyer of the second applicant’s firm was to be notified of the proposed execution of the warrant before that execution proceeded;

and if such conditions were required, whether the failure to attach them, or either of them, rendered the warrant invalid.

23.   There is a second issue, which is whether there was non-disclosure to the magistrate of material facts when the application for the warrant was made.

The statutory framework

24.    In March 2004 an Order-in-Council was made under section 4 of the Ordinance by which it was directed that the Ordinance was to apply to the mutual legal assistance arrangement between Hong Kong and the Republic of the Philippines.

25.    That arrangement provides for the establishment on each side of a Central Authority to make and receive requests pursuant to the agreement.  Various forms of mutual legal assistance are covered including search, seizure and delivery of material to a requesting party provided that the request contains information that would justify search and seizure under the law of the requested party.[13]  The Central Authority in Hong Kong is the Secretary for Justice or his duly authorised officer.[14]  The agreement stipulates a list of circumstances in which the requested party shall refuse assistance (for example, that the request will result in a person being prejudiced on account of his race, religion, or nationality) and circumstances in which the requested party may refuse assistance (for example, where the provision of assistance could prejudice an investigation in the jurisdiction of the requested party).[15]  There is a confidentiality clause by reason of which the requested party, if so asked, is obliged to protect the confidentiality of the request.[16]  There is a requirement for the prompt execution of requests and if the requested party decides not to comply with the request it must inform the requesting party promptly of that decision and of the reasons for it.[17]

26.    Section 5 of the Ordinance specifies the circumstances in which a request for assistance shall be[18], or may be[19], refused and the basis for a refusal is the opinion of the Secretary for Justice upon one or more of a number of specified matters; a mirror, in essence, of grounds specified in the agreements.  None of these specified circumstances relate to the privileged status of material; but section 2(10) of the Ordinance provides that “… nothing in this Ordinance shall require the disclosure of any items subject to legal privilege within the meaning of section 13”; and section 13 provides a definition which accords with established principle.

27.    The Ordinance contemplates a request to the Secretary for Justice for assistance.  Part III of the Ordinance covers assistance in relation to search and seizure.  Where there are reasonable grounds to believe that a thing relevant to a criminal matter involving an external serious offence in a place outside Hong Kong is located in Hong Kong, the Secretary for Justice may, pursuant to a request, nominate in writing an authorised officer to apply to a magistrate for a search warrant, and where such an officer has reason to believe that the matter to which the request relates is upon or in any premises he may lay before magistrate an information setting out the grounds for that belief and apply for the issue of a warrant.[20] 

28.    Section 12 addresses the issue of warrants.  Where such application is made by an authorised officer:

“	(3)	… the magistrate shall, subject to subsection (4), issue a warrant authorising an authorised officer…
			…
		(c)	to search any such … premises for the thing; and
		(d)	to seize any thing found in the course of any such search that the relevant officer believes, on reasonable grounds, to be relevant to the criminal matter in the place outside Hong Kong concerned.
	(4)	A magistrate shall not issue a warrant under the section unless –
		(a)	the informant or some other person has given to the magistrate either orally or on oath or by affidavit, such further information, if any, as the magistrate requires concerning the grounds on which the issue of the warrant is sought; and
		(b)	the magistrate is satisfied that there are reasonable grounds for issuing the warrant.
	(5)	There shall be stated in a warrant issued under this section –
		(a)	the purpose for which the warrant is issued, including a reference to the nature of the criminal matter in relation to which the search is authorised;
		(b)	whether the search is authorised at any time of the day or night or during specified hours of the day or night;
		(c)	a description of the kind of things authorised to be seized; and
		(d)	a day, not being later than one month after the issue of the warrant, on which the warrant ceases to have effect.”

29.    Section 7 of the Mutual Legal Assistance in Criminal Matters Regulation prescribes the form which search warrants issued under section 12 of the Ordinance shall take.

Argument

30.    Mr Dykes SC for the appellants (applicants) concentrates his argument primarily on the absence of conditions attached to the warrant.  It was, he contends, obvious on the facts presented to the magistrate that there was inherent in the proposed search and seizure a risk that material protected by legal professional privilege might be included in the items covered by the application for the warrant and he asserts that, as a matter of law, it was therefore incumbent upon the magistrate to set conditions for the execution of the warrant, namely, a condition that no item the subject of such privilege was to be seized and a further condition that if lawyers were not present at the time of entry they should be notified before any search commenced.  He makes suggestions for further conditions that might be imposed, such as one requiring an independent lawyer to accompany the law enforcement authority to the search so that that individual might then determine at the scene whether documents intended to be seized were or were not privileged from seizure, but he does not suggest that these conditions are a sine qua non of validity, for which reason I do not intend to address them.

31.    With one exception, all the authorities to which Mr Dykes drew our attention were cases of searches authorized on the offices of legal advisers, there being no suggestion in any of those cases that any other business was conducted at the premises by another company or for purposes unconnected with the rendering of legal advice.

Analysis

(1) The question of privilege

32.    A search warrant is a serious inroad upon the integrity of a person’s property and upon his privacy.  Such an inroad can only be lawful if clearly authorized by law: see Entick v Carrington[21] and Attorney General of Jamaica v Williams[22].  The law relied upon for the requested intrusion in this case is the Ordinance.  It follows that the warrant will be invalid only if the requirements of the Ordinance properly construed have been breached: see Inland Revenue Commissioners v Rossminster Ltd[23]; R v Inland Revenue Commissioners, ex parte Tamosius & Partners (a firm) [24]; Re an application by a firm of Solicitors[25]; and Apple Daily Ltd v Commissioner of the Independent Commission against Corruption[26].  Precisely because the power to issue a search warrant engages the potential for interference with fundamental liberties, the court is enjoined to look critically at the legislation when construing it, but not destructively:  Re a firm of Solicitors, above[27]. 

33.    In Apple Daily, Chan CJHC, as he then was, summarized the effect of Rossminster as follows :

“	(1)	it is matter of construction of the empowering statute to decide (a) the scope of the powers of the issuing authority, (b) the conditions which have to be satisfied for the issue of the warrant, and (c) what is to be stated in a warrant.  The second and third matters go to what are sometimes called the essential and formal validity of the warrant respectively;
	(2)	if it appears that a warrant falls strictly and exactly within the provisions of the empowering statute in that all the conditions have been satisfied, it would be upheld;
	(3)	if the empowering statute does not require any particular form for the warrant, it would be held valid so long as it contains the basic details which are provided for in the statute.”[28]

34.    Since the validity of a search warrant depends upon the terms of the statute under which it is issued, case law must always be examined in the context of its statutory setting.  Statutes authorizing the issue of warrants vary widely in their requirements.  So, to take examples from cases to which we have been referred, the Police and Criminal Evidence Act 1984 which governs the subject in the United Kingdom expressly requires the magistrate to satisfy himself that the material sought does not consist of or include items subject to legal privilege,[29] and there is a whole series of highly specific conditions governing orders for search and seizure of other information of a confidential nature, referred to as excluded and special procedure material.  Section 20C of the Taxes Management Act 1970 provides that the issue of a warrant under that regime does not authorise the seizure and removal of documentation in respect of which a claim to professional privilege could be maintained, but the extent of the search and seizure permitted, once the warrant is issued under the procedure there prescribed, does not then depend upon the terms of the warrant for once the warrant is issued the officer is entitled to seize and remove “any things whatsoever found there which he has reasonable cause to believe may be required as evidence”.[30]  Mr Dykes, in this case, as in Apple Daily, has taken the Court to a number of decisions in other common law jurisdictions, primarily to some which suggest the inclusion upon warrants of conditions of the type for which he contends in this case; although as I have emphasized the cases, save one, concern searches directed at law firms themselves.  As pointed out by Nazareth VP in Apple Daily cases elsewhere ‘do reveal some difference in the effect they held to result from deficiencies in warrants, in particular minor deficiencies that apparently did not have any practical or consequential significance.’

35.    In this case we are concerned with the provisions of section 12 and by reason of that section, a warrant will be valid if:

(1)	an authorised officer properly nominated by the Secretary for Justice has reason to believe that the thing to which the foreign request relates is or will at a specified time be upon or in any premises, on a person, on certain land, or otherwise in a person’s effective control;
(2)	that officer lays an information which sets out on the grounds for that belief;
(3)	the magistrate is satisfied, with the benefit of such further information, if any, as he may require concerning the grounds on which the issue of the warrant is sought, that there are reasonable grounds for issuing the warrant; and
(4)	there is a statement in the warrant of the purpose for which it has been issued, the time at which the search is authorised and the date of its expiry, as well as a description of the kind of thing that is authorised to be seized.

36.    On its face, all these conditions were satisfied in this case as was the prescribed form of warrant.  I accept, however, that the magistrate may not authorize the seizure of material which he knows or on reasonable grounds believes to be subject to legal professional privilege.  So much is common ground as a matter of fundamental principle, and implicit from section 2(10) of the Ordinance.  Subject only to a question to which I will return touching upon one specific item, the warrant in this case did not authorize, either expressly or impliedly, a search or the seizure of privileged material.  It did not even authorize a search of the files of a solicitor’s firm, and it is in this regard that this case is to be distinguished from the many upon which Mr Dykes invited us to rely.  I respectfully agree with the factual analysis of Hartmann J[31] that:

(1)	the company named in the warrant was a corporate services company that shared office space with a law firm, but was an entity separate from the law firm;
(2)	the search warrant on its face limited search and seizure to documents in the possession of the company Rmbsa and was not directed at any of the law firm’s practice files or other practice documents;
(3)	there was no material described in the warrant that was on its face protected by legal professional privilege, although the possible exception to this was item (ii) which sought things ‘relating to [Rmbsa’s] relationship to the … law firm’; as to which I will say more later; and
(4)	if there were a requirement in the circumstances of a particular case to spell out in the warrant the exclusion of privileged documents, the likelihood of the documents sought in this case being privileged was not such as to warrant such an express condition.

37.    I commented earlier that it seemed relatively clear that no separate facilities had been set aside to accommodate the corporate service files of Rmbsa[32].  My impression during the hearing that that was common ground is qualified only by a passage in the evidence which has since caught my eye: it arises in an affirmation of an ICAC officer, Mr Ho, who says that after Mr Tse left the premises he “… asked Mr Alejandro whether there was any storage space in the premises designated for Rmbsa’s files.  He answered in the affirmative and indicated to me a room where file cabinets were located.”[33] The thrust of the evidence however was that no clear division had been effected.  In the Notice of Application the applicants asserted that “for all practical purposes, the first and second applicants share the same staff, file cabinets and office facilities.”[34]  Furthermore, in his affirmation of 26 July 2006 Mr Alejandro said that when asked by the ICAC officer if there were things in the warrant other than the corporate kits that had been produced, “I repeated … that our HK office was a law office and that the materials kept on the premises were subject to legal professional privilege.”[35]  In the same affidavit he described the offices as shown by photographs exhibited to it and there is no suggestion there of any separate facility or storage for corporate service companies.[36]  Indeed, he went on to say that Rmbsa “… is at all time treated as part of the legal practice of our HK office, and we draw no distinction between the two entities.”[37] 

38.    I proceed first on the assumption, which seems a safe one in the light of the passages to which I have drawn attention, that no distinction was drawn between the two entities.

39.    It seems to me that a solicitor should not so organize his firm’s affairs that its records become mixed with those of a separate business which he is lawfully entitled to run, with the result, though not intended by the solicitor, that a client may obstruct lawful requirements for expeditious disclosure which that client would not otherwise be able to resist.  

40.    Principle 2.08 of the Hong Kong Solicitors Guide to Professional Conduct, by which foreign law firms registered as such in Hong Kong are also bound provides that:

“

A solicitor shall not by himself or with any other person set up or operate a separate business, other than a solicitor’s practice, which offers any service which may normally be offered by a solicitor as part of his practice; provided that this principle shall not apply to a wholly-owned executor and trustee company, nominee company or company to provide company secretarial services.”

Mr Dykes would have us read that as a requirement upon a solicitor to treat such a secretarial service as part of his practice, thereby endorsing by implication the non-separation of files that, on one view of the evidence, we see in this particular case.  I do not agree with that interpretation.  It seems to me clear from that provision, and more particularly as a matter of practical commonsense, that the company secretarial service if established by a solicitor is to be treated by him as “a separate business”, with all that that implies.

41.    The fact that documents happen to be housed in the same premises as are occupied by a firm of solicitors but which have not been created or delivered there for the purpose or as a result of seeking or providing legal advice does not, simply because they happen to be there, transform them into privileged material or attract to them the sort of privilege-related condition which Mr Dykes would have us require as a material part of a search warrant.  Were it otherwise, it is easy to see with what readiness those with a motive to avoid search warrants would deliver documents to their solicitors.  

42.    In this case the assumption seems to have been made by the firm that everything in the premises was part of the practice and that everything there was therefore necessarily covered by solicitor-client privilege.  That was not a correct assumption either on the facts or as a matter of law.

43.    The point has been made in Perry Kilbreath and others v The Attorney General of Saskatchewan[38] – a case in which the court refused to hold that the warrant was invalid simply because it did not set out terms and conditions designed to prevent breach of solicitor-client privilege – that the conditions that must be established before the solicitor-client privilege applies:

“	15.	… are often misunderstood or forgotten by lawyers who mistakenly believe that whatever they do and whatever they are told is privileged merely by the fact that they are lawyers.
	16.	Thus, as examples that are by no means exhaustive, the solicitor-client privilege does not attach to documents unrelated to the giving of proper advice, but stored with the solicitor to avoid seizure.  (R v Colvin [1970] 3 O.R. 612 (Ont. H. C.)).  The privilege does not apply to documents merely held by the lawyer, including accounting records and trust reconciliations, conveyancing documents and documents relating to the sale of property where no advice was sought or given in respect of them [Kranz v Canada (Attorney General) [1999] B.C.J. No 1182 (B.C. [In Chambers]).  It does not apply to actual currency, which does not communicate any information other than the value of the individual bill: … . It does not apply to the deposits of funds into a lawyer's trust account unrelated to the giving or receiving of advice, but merely to protect the funds from seizure: R v Sefarty [2004] O.J. No 1952 (Ont,. S.C.J.).  It does not apply where the connection between the parties is more in the nature of a business or commercial relationship, or where the disclosure sought is of actions taken, rather than communications passing between solicitor and client, or where the communications are in furtherance of criminal or fraudulent activity. …
	17.	The solicitor for the applicants argues that the counselling records forwarded to his office just before the execution of the “place of worship warrant” could contain matters covered by solicitor-client privilege, in the sense that perhaps legal advice was sought or rendered in the process of counselling that may appear in the counselling notes.  Accordingly, he says, the presumption of privilege should apply.
	18.	Here, the assertion of privilege is made in circumstances that, at first blush, are not representative of the classic situation.  These counselling records are not documents that prima facie appear to be matters protected by a solicitor-client privilege … .  As such, it called for the exercise of some speculation on behalf of counsel for the applicants regarding the invocation of solicitor-client privilege ….”

44.    This reminder may with some utility be applied to the present case.  There is nothing on the face of the warrant which suggests that it expressly or impliedly authorised a search of the law firm’s legal advisory documents or documents that had come into its possession for that purpose.  The search warrant is directed at documents belonging to a company which may or may not be a client of the law firm, and in relation to the affairs of companies and connected individuals for which that corporate entity (not the law firm) provides corporate (not legal advisory) services.  As in Kilbreath, the assertion of privilege in this case is not representative of the classic situation with which the authorities placed before us were concerned, namely, search warrants directed at legal advisory entities in whose premises one could safely say privileged material inevitably would be kept.  The suggestion that the facts of the case were bound to raise in the magistrate’s mind the spectre of solicitor-client privilege because he, the magistrate, knew that the address was the same as that of a law firm entails an assumption that, contrary to sensible practice, the documents of the corporate service provider would be enmeshed with those of the solicitor’s practice files.  

45.    If on the other hand, Mr Ho’s testimony[39], which seems at odds with that of the applicants, is correct and is to be read as indicating a clear division of facilities accorded to Rmbsa, then all the more obvious should it be to the firm that Rmbsa’s affairs were not part of the firm’s legal advisory service; and, further, on such a factual scenario, the likelihood of stumbling across privileged material is of a quite different order, rendering the applicants’ arguments correspondingly weaker.

46.    It is not necessary for the purpose of this case to decide whether the conditions for which Mr Dykes contends would have been necessary had a warrant authorised a search of practice papers or had it been known or believed on reasonable grounds that the material sought was subject to legal professional privilege, but assuming for the sake of argument that that were so, that is not the present situation and I am not prepared to hold that in the present circumstances such conditions were necessary or that their absence renders the warrant invalid.

47.    There is in the warrant one matter itemised which may be said to stand in a category different from the others listed.  It is the one described as ‘things of Rmbsa … relating to ... its relationship to the Philippine law firm, Romulo Mabanta Buenaventura Sayoc and de los Angeles.’  One knows not how this was relevant to the investigation in the Philippines but, be that as it may, Mr McCoy SC for the respondent contends that this was directed not at communications related to the seeking or giving of advice, but at the structural relationship between the two entities.  On its face that would appear to be what was intended, for which reason it seems to me that the warrant does not in this particular authorise the seizure of privileged material although the warrant in this regard was not drawn with the precision that was desirable to ensure that the search and seizure went no further than its intent.  It seems to me also that the seizure of such material as went to the nature of the relationship ran a risk that it might reveal privileged documents.  Even so, that is in my judgment not a fact that in this case renders the warrant a nullity.  Putting the matter at its highest against the respondent on this point, and even assuming that the warrant gave authority in this one regard which it could not in law give, such excess of authority went to only one of a series of items and that in my assessment would not render the entire warrant invalid.  If the conditions for the issue of a warrant have been observed, the fact – if it be a fact – that one part of the warrant was surplus in the sense that it purported to give authority which it had not the power to give does not, absent prejudice to the person affected by it, render the warrant invalid: Apple Daily Ltd, above.[40]  There was no prejudice caused in this case.  As Hartmann J emphasized,[41] care was taken in this case to ensure that privileged documents were safeguarded: officers of the ICAC took legal advice before executing the warrant and were advised that if privilege was claimed during the search of items for which such a claim was made should be sealed in the presence of the claimant without examination; a lawyer for Rmbsa was present when the warrant was produced at the premises and executed; there is evidence that he was told that the officers were interested only in documents related to the secretarial service provided by Rmbsa; further legal advice was taken by the officers when at the premises after a claim to privilege was made; and documents in respect of which a claim was made were sealed, even though in this last regard there is an issue as to timing of some of them.  There is no suggestion that any information has been passed to the investigators.

(2) The presence of lawyers 

48.    As for the contention that the warrant ought to have embraced a condition that the warrant was not to be executed without the presence of a lawyer, it would in my opinion on the facts of this case have been better to include such a condition; and I would add that since the premises of Rmbsa was shared with the law firm, the hours for the search ought in the warrant to have been restricted to office hours, or to such other hour of which prior notice had been given.  But neither of these features are in this case such as to render the warrant invalid and one notes, as matters transpired, that the warrant was executed within office hours and with Rmbsa’s lawyers present.

(3) An allegation of non-disclosure

49.    There is one separate matter advanced by the appellants which is the suggestion that the warrant was obtained in the face of material non-disclosure.  It is not a matter dealt with in the judgment of the court below though we are assured that it formed the subject matter of submissions.

50.    It is not necessary to delve into the detail of the complaint because I am satisfied that it does not get off the ground.  It suffices to say that the complaint relates to non-disclosure to the magistrate of the suggested fact that at the time of the application for the search warrant, there were related court proceedings in the Philippines that had been made the subject of a stay order; an order, I understand, now under appeal.  There is some dispute as to the status of those connected proceedings at the date of that application but that matters not for present purposes.  

51.    The appellants’ contention is that by virtue of the provisions of the international arrangement encompassed in the Order, the Philippine authorities were bound to bring those procedural developments to the attention of the Central Authority in Hong Kong.  There is an obligation upon an applicant for the warrant to make full and frank disclosure of such facts as may be relevant to the exercise of the judicial power to issue a warrant, and the failure to do so may mean that the warrant will be set aside[42].  

52.    There is no suggestion that the authorised officer was aware of these connected proceedings or of their status and there is no question of him misleading the court.  It remained the fact, as it does today, that a “criminal matter”[43], as defined by the Ordinance[44], had by then been commenced and it remained the fact that there were reasonable grounds to believe that things relevant to the investigations that constituted the criminal matter were located in Hong Kong and that the officer had reason to believe that the specified things to which the request related were to be found in the premises of Rmbsa.  That being so, the magistrate was duty-bound to issue the warrant.  If it were to transpire in any particular case that there has been a breach of the terms of the international arrangement, that would be a matter for the Executive ultimately to consider if and when it comes to decide whether to send seized material to the requesting jurisdiction.

Conclusion

53.    For these reasons, this appeal should, in my judgment, be dismissed.  I would make a costs order nisi that the costs of this appeal be to the respondent, to be taxed if not agreed.  There is a respondent’s notice that asks the court to examine the files seized to determine the claim of privilege; and a suggestion of some breach of the Foreign Practice Rules.  It has not been necessary to go into that, and I would make an order nisi that there be no order as to the costs of that notice.

Hon Yeung JA:

54.    I agree with the judgment of Stock JA and have nothing to add.

Hon Ma CJHC:

55.    For the above reasons, the appeal is dismissed.  There will also be an order nisi that the costs of the appeal, including the costs of the applicants’ summons dated 18 October 2007, be to the respondents, such costs to be taxed if not agreed (the costs not to include the costs of the respondent’s notice, for which no order is made).