SECRETARY FOR JUSTICE v. SHUM CHIU AND OTHERS

HCAL 101/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 101 OF 2005

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J U D G M E N T

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Introduction

1. On 23 June 2005, the four respondents appeared for trial in the District Court before Deputy Judge Livesey.  The charge sheet alleged the commission of four offences.  Two were offences of conspiracy to bribe public officers, two were offences of conspiracy to falsify documents.

2. At the commencement of the trial, counsel representing the four respondents – who, for convenience, I shall refer to as the defendants – applied to the court for a permanent stay of proceedings.

3. The applications were all based on the admitted fact that, during the course of investigations, officers of the Independent Commission Against Corruption (‘the ICAC’) had arranged for the covert recording of a meeting between the third defendant, Mr Yu Chi Wai, and his solicitors.  Counsel for the defendants asserted that the meeting had been protected by legal professional privilege, a fact which must have been known to the ICAC operatives who arranged for it to be secretly recorded.

4. In our law, the right to confidential legal advice is a constitutionally protected right, one that is not in any way to be compromised.  It has long been recognised as a fundamental condition on which the administration of justice as a whole rests.

5. On behalf of the four defendants, it was said that the intentional recording of the third defendant receiving confidential legal advice from his solicitors constituted such a serious abuse of executive power that it threatened the integrity of the administration of justice.  In addition, it was said that, in respect of three of the defendants – those who were denied knowledge of what had been said when the confidential legal advice had been given – a fair trial had been rendered impossible.

6. In exceptional cases – it being asserted by defence counsel that this was one – our courts have the jurisdiction to stay criminal proceedings.  There are essentially two bases upon which the jurisdiction may be exercised :

(i)	Proceedings will be stayed if, notwithstanding the range of remedial measures available at trial, a fair trial for the accused is found to be impossible so that to continue the prosecution would amount to an abuse of process (the ‘first limb’).
(ii)	Rarely, even though a fair trial is possible, proceedings will be stayed when the circumstances have involved an abuse of process which amounts to such an affront to the public conscience that irreparable prejudice would be caused to the integrity of the judicial system if the prosecution was allowed to be continued (the ‘second limb’).

7. The application by the third defendant for a permanent stay of proceedings was based on the second limb only.  The applications for a stay by the three other defendants were based on both the first and second limbs.

8. At the commencement of the voir dire to determine the applications, certain facts were agreed on what was described as a ‘premise basis’ : presumably therefore for the purposes of the voir dire only.  The premised facts were not therefore formally agreed in terms of s.65B or 65C of the Criminal Procedure Ordinance, Cap.221.

9. In light of that agreement, prosecuting counsel indicated that, while all the applications for a stay would be opposed, he did not intend to call evidence in opposition.  In addition, although not in any way formally conceded, prosecuting counsel accepted that the meeting between the third defendant and his solicitors had been protected by legal professional privilege.

10. However, when the applications had been advocated, and it was for the prosecution then to present its case in opposition, prosecuting counsel sought the court’s favourable exercise of discretion in respect of two matters.  First, prosecuting counsel sought to resile from the concession earlier made that the meeting between the third defendant and his solicitors had been privileged.  For a number of reasons, it was no longer accepted, he said, that the meeting had been privileged.  Second, prosecuting counsel sought to resile from his earlier indication that the prosecution did not intend to call any witnesses in opposition.  He sought to call two witnesses, both ICAC officers.  The witnesses which he intended to call would, of course, to a greater or lesser degree, give evidence relevant to the issue of whether they had had good grounds for believing that the meeting between the third defendant and his solicitors would not be privileged.

11. Having heard submissions, the trial judge ruled that the prosecution was not permitted to resile from its earlier concession that the meeting between the third defendant and his solicitors had been privileged.  The trial judge further ruled that the prosecution was not entitled to resile from its earlier indication that no witnesses would be called. 

12. In the result, prosecuting counsel was forced to present the prosecution case in opposition to the applications within the restrictions imposed by the ruling of the trial judge.  No witnesses were called by prosecuting counsel. 

13. At the conclusion of the voir dire, the trial judge ordered that there be a permanent stay of proceedings on the grounds relied upon by the defendants; that is, on both the first and second limbs.  In giving her ruling, the trial judge said that the secret recording by the ICAC of the third defendant’s meeting with his solicitors had constituted ‘a cynical and flagrant’ infringement of his right to confidential legal advice.  She considered that the action was an affront to the public conscience with severe consequences for public confidence in the administration of justice in Hong Kong.

14. The applicant, the Secretary for Justice, seeks orders of certiorari to bring up and quash the two rulings of the trial judge which together resulted in the order that there be a permanent stay of proceedings against the four defendants.  The Secretary for Justice further seeks orders of mandamus remitting the matter to the District Court so that it may be determined in accordance with law.

Legal professional privilege

15. The common law has long recognised that the right to confidential legal advice is of such importance to the due administration of justice that, if that right is compromised, then justice itself is undermined.  As Lord Taylor CJ expressed it in R. v. Derby Magistrates Court, ex parte B [1996] 1 AC 487, at 507, legal professional privilege is much more than an ordinary rule of evidence, limited in its application to the facts of a particular case; in the common law it is ‘a fundamental condition on which the administration of justice as a whole rests’.

16. In Hong Kong, legal professional privilege is protected by the Basic Law as a fundamental human right.  Art.35 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.”  (Emphasis added)

17. Art.87 of the Basic Law makes it plain that legal professional privilege, as a right enshrined in the common law and fashioned by the common law prior to the change of sovereignty, has remained 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.”

18. The accusation against the ICAC that its officers had, to use the words of the trial judge, cynically and flagrantly infringed the third defendant’s constitutional right to confidential legal advice was therefore a profound allegation, one that, if proved, demonstrated a most serious abuse of executive power.

19. If any illustration of the seriousness of the accusations is required, it is to be found in R. v. Grant [2005] 3 WLR 467, a judgment of the English Court of Appeal much quoted in the proceedings before the trial judge.  The headnote to the judgment says the following :

“… acts done by the police, in the course of an investigation which would lead in due course to the institution of criminal proceedings, with the intention of eavesdropping upon communications of suspected persons which were subject to legal professional privilege, were unlawful and capable of infecting the proceedings as an abuse of the court’s process; that, although not every misdemeanour by police officers in the course of an investigation would justify a stay on grounds of abuse, and although there were cases where prejudice or detriment to the defendant had to be shown, the court would not tolerate or endorse illegal conduct by police or state prosecutors which threatened or undermined the integrity of the justice system and the rule of law, and therefore would not countenance any associated prosecution; that the deliberate interference with a detained suspect’s right to the confidence of privileged communications with his solicitor seriously undermined the rule of law and justified a stay on grounds of abuse of process, notwithstanding the absence of prejudice to the defendant …”  [my emphasis]

20. R. v. Grant, as I have said, was much quoted before the trial judge in the voir dire proceedings.  It was one of two judgments which arose out of the same set of facts.  The other judgment, also much quoted, was R. v. Sutherland and Others (unreported) 29 January 2002, Case No.T20027203, a first instance judgment by Newman J sitting in the Nottingham Crown Court.

21. The relevant facts giving rise to these two judgments may be summarised as follows.  The police were investigating a murder.  To use the description employed by Newman J in Sutherland : “A young man had been executed by a brutal shooting”.  The body apparently had been buried in a secret grave.  Suspects were arrested and kept at police stations.  The police set up covert recording systems.  The avowed purpose was to intercept what the suspects may say to each other when exercising in the exercise yards.  However, unless escorted by a police officer, no two prisoners were permitted to be in the exercise yards at the same time.  On the facts, therefore, it was found that the system had been set up in the exercise yards with the intention of capturing any conversation which might take place between the suspects and their solicitors, either before or between police interviews.  Those conversations, of course, manifestly and to the knowledge of the police, were privileged.

22. Although the crime being investigated by the police was of the most serious kind, a cold-blooded slaying, it was held that that did not permit the police to undermine the right to confidential legal advice.  The right, therefore, was not to be balanced against any form of moral compulsion to undermine it.

23. Nor was the breach of the right to be condoned because nothing of any value was obtained by the investigating authorities.  The breach itself constituted the abuse of power.

24. Grant and Sutherland illustrate therefore the seriousness of the allegations made against the officers of the ICAC.  In the Sutherland judgment, Newman J concluded by saying :

“I thus have had to weigh all these factors, which amount to the weighing the public interest, between the desirability for these defendants to be tried for the grave and horrific offences alleged against them; and against that, the public interest in the need to uphold principles of law, for the Court not to countenance flagrant breaches of the law, and for all defendants, however serious the charges they face, to be given a fair and open opportunity of presenting to a jury and investigating before a jury any issue which may be relevant to the defence they have.

I have concluded in this case that justice has been affronted in a grave way …

I have come to this conclusion, as everybody will realise, only after exhaustive consideration … There is no cause for triumphalism in the conclusion to which I have come, namely that the indictment must be stayed save, I hope, only the muted voice that the law and the principles of law which we regard as fundamental can seen to have been upheld.”

25. As Newman J said, and as his judgment makes plain, he came to his conclusion that justice had been affronted in a grave way only after exhaustive consideration of all the evidence, evidence through which both the police and the applicants were able to put their respective positions.

26. It is fundamental, I think, that the rules of fairness dictate that when any person, or group of persons, is accused in legal proceedings of a grave, indeed shameful, act which is said to amount to an abuse of the system of justice, that person, or those persons, must be given a full opportunity to answer the accusation.  That principle is to be applied equally to officers of investigating agencies.  Unless they are given that opportunity, leaving aside justice being done to them as individuals, how else can the court weigh the public interest in bringing defendants to trial against the public interest in ensuring that officers of investigating agencies do not themselves flout the law?

27. In the present case, Mr Zervos SC, counsel for the Secretary for Justice, submitted that the first ruling of the trial judge, the ruling given before the commencement of the prosecution’s case in opposition, had had the manifest effect of preventing the ICAC from being given the opportunity to fully state its case in answer to accusations that it had been guilty of a gross abuse of power.  In all the circumstances, said Mr Zervos, that amounted not simply to an exercise of discretion that was wrong on the facts but one that was wrong in law.

28. The covert recording of the meeting between the third defendant and his solicitors was made possible by officers of the ICAC being authorised to fit a recording device on the body of a person who may be described as an accomplice, that person agreeing to act as an undercover agent for the ICAC.  The recording device was fitted in the knowledge that the third defendant would be attending a meeting with a lawyer and that the accomplice, the undercover agent, has been asked to attend that meeting too.

29. On the evidence, there was no suggestion that the recording device could be switched on or off by the accomplice.  It followed therefore, and in this regard could not have been misunderstood, that, notwithstanding what may be said and recorded before the meeting or after it, what was said during the meeting itself was going to be recorded.  To that extent the covert recording of the meeting, at which, on all the probabilities, legal advice was going to be sought and given, was an intended act.  How then could it not amount to a breach of the right of legal professional privilege vested in the third defendant?

30. One of the reasons finds its basis in the principle that not all meetings between client and professional legal adviser are privileged.  The privilege applies only to communications made bona fide for the purpose of seeking and receiving legal advice.

31. If the communications are made in order to obtain advice for a criminal purpose then, of course, legal professional privilege does not attach itself to those communications.  This exception applies whether the lawyer is a knowing party or is ignorant of the criminal purpose and is being used as an innocent tool by the client alone and/or with third parties to advance a criminal purpose.  In Banque Keyser Ullmann SA v. Skandia (UK) Insurance Co. Ltd [1986] 1 Lloyd’s Rep 336, Lord Justice Parker 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.”

32. That being the case, it must follow, I think, that if there are objectively cogent grounds for believing that a meeting, which prima facie is protected by legal professional privilege, is in fact to be used in order to further a criminal enterprise – and will not therefore in fact be privileged – then the investigating authorities must be able to discover what has passed at that meeting.

33. In the voir dire proceedings, it is apparent that, when the prosecution came to present its case in opposition, the trial judge was aware that the prosecution now contended, even though it may not earlier have done so, that the meeting between the third defendant and his solicitors had not been privileged or, at least, that there had been reason to believe in good faith that it would not be privileged.  In this regard, in her first ruling made before the commencement of the prosecution case the trial judge made the following observation :

“… it is clear, from the prosecution’s submission, that they are not saying that the decision to record the meeting was not taken deliberately and intentionally.  They are submitting that they had good reason for recording the meeting because of, in particular, what is contained in a tape dated 11 November and that they thus did not record the meeting knowing/believing that the meeting was privileged and, if it was privileged, then that privilege was likely to have been waived because of the nature of the matters being discussed and the nature of the advice being given.

This is a very serious allegation to make in relation to a solicitor who is an officer of the court.  In my judgment, it requires a very secure foundation before such action is taken when one is concerned with legal professional privilege.  Mere suspicion is not sufficient.”

34. At this stage, it is pertinent to note that the trial judge made no reference in her first ruling to the solicitor, or solicitors, who attended the meeting being used as ‘innocent tools’, as I have earlier used the description.  In his submissions, Mr Zervos, for the Secretary for Justice, emphasised that, on the material before her at the time, the trial judge was not entitled to find that allegations of culpable intent had been made, or would be made, against the solicitors.  Her finding in this regard, said Mr Zervos, constituted a material error of fact.

Granting a permanent stay : the applicable principles

35. The two rulings challenged in this application for judicial review resulted in the trial judge ordering a permanent stay of proceedings against all four defendants.  Ordering a stay on either of the two limbs which I have described in para.6 of this judgment has been described as an act of last resort.  It is only to be ordered in exceptional cases.  It follows, of course, when any application for a stay is made, that it is incumbent on the court – on a consideration of all the evidence – to assure itself that the case identified is an exceptional one.

36. The principles to be applied in determining an application for a permanent stay of proceedings have been comprehensively considered and determined in two judgments of the Court of Final Appeal (‘the CFA’), both arising out of the same set of criminal proceedings.  The judgments are HKSAR v. Lee Ming Tee & Another (2001) 4 HKCFAR 133 and HKSAR v. Lee Ming Tee and Securities and Futures Commission (2003) 6 HKCFAR 336.

37. In the first Lee Ming Tee judgment, the CFA confirmed that a stay would only be ordered ‘in exceptional cases’.  It was, said the court, a jurisdiction to be ‘only most sparingly exercised’.

38. In respect of the first limb, the CFA said that a stay would be granted if, ‘notwithstanding the range of remedial measures available at the trial, a fair trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process’.  In respect of this first limb, the court said that :

(i) In determining whether a fair trial was possible, a court should look to whether fairness is achievable in practical and not absolute terms.

(ii) The power to ensure a fair trial is not simply a power to stop a trial before it starts.  It is instead a power to mould the procedures of the trial to avoid or minimise prejudice.  As Brennan J said in Jago v. District Court of New South Wales (1989) 168 CLR 23, at 47 :

“When an obstacle to a fair trial is encountered, the responsibility cast on a trial judge to avoid unfairness to either party but particularly to the accused is burdensome, but the responsibility is not discharged by refusing to exercise the jurisdiction to hear and determine the issues.  The responsibility is discharged by controlling the procedures of the trial by adjournments or other interlocutory orders, by rulings on evidence and, especially, by directions to the jury designed to counteract any prejudice which the accused might otherwise suffer.”

39. In respect of the second limb, the CFA referred to those ‘rare cases’ where, although the fairness of the trial was not in question, the Court granted a stay because the circumstances involved an abuse of power which so offended the Court’s sense of justice and propriety that the entire prosecution was tainted as an abuse of process.

40. The CFA emphasised that a stay under the second limb is not to be employed as a disciplinary measure; for example, in order to express a court’s disapproval of official conduct.  As the court said :

“The public interest lies in the guilt or innocence of the accused being fairly and openly determined at trial.  For this to be displaced, powerful reasons must exist for concluding that such a trial, although fair, would nonetheless constitute an intolerable abuse of the court’s process.  The instances where such an argument has any prospects of success must necessarily be very rare.”

41. As to the principles to be applied in considering an application under the second limb, these were more fully considered in the second Lee Ming Tee judgment.  In this second judgment, the CFA (per Sir Anthony Mason NPJ) adopted the principles stated by Lord Steyn in R. v. Latif [1996] 1 WLR 104 :

“In this case the issue is whether, despite the fact that a fair trial was possible, the judge ought to have stayed the criminal proceedings on broader considerations of the integrity of the criminal justice system.  The law is settled.  Weighing countervailing considerations of policy and justice, it is for the judge in the exercise of his discretion to decide whether there has been an abuse of process which amounts to an affront to the public conscience and requires the criminal proceedings to be stayed: R. v. Horseferry Road Magistrates’ Court, ex parte Bennett [1994] 1 A.C. 42”

42. As I have said, the CFA recognised that only in exceptional cases will a stay be granted on an application under the second limb.  The court qualified what this meant by citing L’Heureux-Dubé J’s observations in R. v. O’Connor (1996) 130 DLR (4^th) 235 at p.277B-C:

‘… a stay of proceedings is only appropriate ‘in the clearest of cases’, where the prejudice to the accused’s right to make full answer and defence cannot be remedied or where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued.’”

43. The CFA continued :

“In the absence of a finding of ‘bad faith’, this standard will rarely, if ever be satisfied in a case where a fair trial is still possible.  Even if there be a finding of ‘bad faith’, that finding would not necessarily conclude the matter.”

44. Mr Zervos contended that, on a true reading of the second Lee Ming Tee judgment, a stay under the second limb could never be granted unless bad faith was demonstrated.  I do not accept that contention.  The CFA accepted in its second judgment that it was not possible to limit a court’s jurisdiction under the second limb to specified circumstances.  The court recognised that ‘an infinite variety of cases’ could arise.  Without seeking to put an impermissible gloss on the words of the CFA, I have understood it to say no more than that, while there may be rare exceptions, invariably there will have to be a finding of bad faith before a stay is ordered.

45. Accordingly, in the infinite variety of cases that may come before the courts, it is clear that the presence or absence of bad faith, while not a mandatory finding, will inevitably be a material consideration for the court.  After all, it is difficult to contemplate a case where the actions of the authorities have been carried out in good faith in the belief that such actions are lawful, and yet those actions will still constitute an affront to the public conscience of such gravity as to threaten the integrity of the system of justice.

46. In the course of his submissions, Mr Zervos argued that the first ruling of the trial judge had resulted in the prosecution being unable in any effective manner to put evidence before the court as to the state of mind of the ICAC officers when they arranged for the covert recording of the meeting between the third defendant and his solicitors.  By that ruling therefore the court prevented itself from inquiring whether the ICAC had, in all the circumstances, acted in good faith or bad faith.

The role of this court

47. In the face of the various submissions by Mr Zervos, some of which I have outlined, counsel for the defendants laid emphasis on the limited role of this court.  It is not a court of appeal.  As such, it has no power to set aside the exercise of discretion contained in the two rulings of the trial judge on the basis only that, on the merits, her exercise of discretion is considered to be wrong.

48. That is correct.  In Secretary for Justice v. Cheung Chung Chit [2003] 3 HKLRD 447, at 451, I set out what I considered to be the role of the court in matters of this kind.  I said that judicial review is quite different from an appeal.  It is concerned with the legality rather than the merits of a decision.  This Court has no jurisdiction to substitute its opinion as to the merits for those of the trial judge.  To do so would be to usurp the power vested in the judge.  Judicial review is limited in its scope, looking essentially to whether a decision that is challenged is wrong in law, arrived at by a flawed process or is a decision that is so unreasonable that no tribunal, directing itself as to the relevant law and properly appreciating the relevant facts, could have reached.  In a nutshell, the question is not whether this court may disagree with the merits of the decision made by the trial judge, the question is whether the decision of the judge has been vitiated by reason of some recognisable public law wrong.

A fuller consideration of the background

49. It is in the light of the principles of law that I have set out, that I proceed to a fuller consideration of the factual background to this matter.

50. At the time of the alleged offences detailed on the charge sheet, the first three defendants held senior positions in corporations that competed with each other in the supply to the building industry of electrical components known as miniature circuit breakers.  Miniature circuit breakers (‘MCBs’) are designed to break electrical circuits.  When they ‘trip’ it is an indication that the circuit has overloaded or that there has been a short circuit.  MCBs are integral to all modern electrical systems installed in buildings.  The first defendant was a director of a company called Rickson Engineering, the second defendant a director of Mpower Engineering while the third defendant was the General Manager of a company called ABB Industrial and Building Systems (‘ABB’).

51. It was alleged that the first three defendants had conspired together, and with others, to bribe one or more officers in the Housing Department so that, with the help of that officer, or those officers, in respect of contracts awarded by or through the Housing Department, they would be able to operate a cartel.  This cartel would enable the respondents to prevent or delay the addition of new approved suppliers while at the same time permitting them to secure optimum prices for their products.

52. The sixth defendant (the fourth respondent in this application) was not charged with conspiracy to bribe.  It was alleged only that, as an employee of ABB, she had conspired with others to falsify purchase orders of various kinds, the bogus documents being required apparently to ensure the smooth running of the cartel and/or to disguise its existence.

53. In May 2002, the ICAC had arrested a sales manager at ABB, Mr Tang Hop Sing.  Mr Tang had agreed to co-operate with the ICAC.  He is the accomplice, the undercover agent to whom I have earlier made reference.  During the course of the voir dire, Mr Tang being an intended prosecution witness, was referred to as PW1.  I shall refer to him in the same way.

54. On 7 November 2002, ICAC officers raided the offices of ABB.  Documents were seized and arrests made.  One of those arrested that day was the sixth defendant (the fourth respondent).

55. PW1, whose earlier arrest by the ICAC had been kept secret, was informed before the raid that it was to take place and made sure that he was elsewhere when the raid took place.

56. Although on the evidence it is clear that the third defendant, the General Manager of ABB, was a suspect at the time of the raid, he was visiting the Mainland on the day of the raid and was not arrested.  His arrest only took place in August of the following year.

57. If the prosecution had proceeded, it was anticipated that PW1 would give evidence that in the days following the ICAC raid he spoke to the third defendant and another employee of ABB, Mr Keith Leung, about the raid and its consequences.  PW1 would testify that both the third defendant and Keith Leung knew that many of the purchase orders were bogus documents and were anxious to come up with some plausible explanation for their existence.  PW1 would testify that, in fact, he was the one who was asked by the third defendant and/or Keith Leung to invent some plausible explanation.

58. It was further anticipated that PW1 would testify that during this period he was informed by the third defendant’s secretary that the third defendant had arranged to have lunch with ‘the lawyer’ the following day and he was asked to go to that meeting.  ‘The lawyer’, although not named when PW1 was invited to the meeting, would in all probability, to PW1’s understanding, have been the solicitor retained to protect the interests of ABB and its employees, a Mr Fung.  PW1 had earlier been told of Mr Fung.

59. The intended meeting with ‘the lawyer’ was reported to the ICAC by PW1 and on the following day, 16 November 2002, an internal ICAC authorisation having been received, PW1 was fitted with a hidden recording device.  At around lunch time, PW1 and the third defendant went to a restaurant in Kowloon Tong called Amaroni’s Little Italy.  Keith Leung did not go with them.  At the restaurant, they met and spoke with two solicitors, both those solicitors being from the firm of Haldanes : Mr Fung and Mr Booth.  The meeting was covertly recorded by means of the device hidden on PW1.  

60. After the restaurant meeting, as I shall now call it, it was anticipated that PW1 would testify that he spoke with the third defendant and again the invention of a plausible explanation for the bogus purchase orders was discussed.  This conversation too was covertly recorded.

61. As it was, although the recording of the restaurant meeting was studied by one or more ICAC officers, what was said during the course of that meeting was to form no part of the charges laid against the defendants.  As such, no officer in the Department of Justice, nor any person briefed by the Department to prepare or present the prosecution, nor any of the legal representatives of the defendants, had any knowledge of what was said on the recording. 

62. The existence of the recording (as opposed to its contents) only became known to the defence when it was discovered as unused material. 

63. It was that discovery which led to the applications for a stay of proceedings on the part of all four defendants.  The applications were made in the light of two important assertions :

(i)	That the third defendant did not agree, nor had he ever agreed, to waive the privilege vested in him in respect of what had passed professionally between himself and his solicitors at the restaurant meeting.
(ii)	That on 21 November 2002, only five days after the restaurant meeting, PW1 had made a witness statement to the ICAC in which, it was submitted, he had materially altered the version of events given by him in an earlier witness statement or series of such statements.

64. As I have said earlier, the third defendant sought a stay on the second limb only; namely, that the covert recording of the restaurant meeting had constituted such a flagrant attack on his right to confidential legal advice that irreparable prejudice to the integrity of the administration of justice would be caused if the prosecution against him was permitted to be continued.

65. The remaining defendants sought a stay on both limbs; namely, that a fair trial had been rendered impossible and, in any event, the flagrant abuse of executive power by the ICAC demanded that there be a stay.

66. As to the first limb; namely, that a fair trial had been rendered impossible, the submissions of counsel may, I believe, be summarised by making reference to two essential contentions both of which, to a greater or lesser degree, had their genesis in R. v. Sutherland and Others (cited in para.20 of this judgment).

67. First, it was contended that it would not be possible to explore why PW1 had changed his evidence so soon after the restaurant meeting because it would not be possible to cross-examine him as to what had been said and done at that meeting.  The third defendant had not waived his right to legal professional privilege in respect of that meeting and accordingly it remained barred to exploration by way of cross-examination.

68. Second, it was contended that it could not be known what, if any, use had been made by the investigating authorities of any of the information contained in the recording of the restaurant meeting.  Perhaps, in some way, if information of some value had been obtained – and that itself could never be explored – that information may have been used, even if only indirectly, to advance the prosecution case.  What it boiled down to was this.  The prosecuting authorities had come into possession of information which could never be divulged.  That possession of information by the prosecution which was denied to the defendants, other than the third defendant himself, resulted in an ‘inequality of arms’.  The prosecuting authorities, however, could not protest there was no such inequality; for example, that no information of any value had been obtained.  They could not do so, it was said, because, by their own actions, they had put that protest beyond any meaningful forensic examination.

The commencement of the voir dire

69. When the voir dire commenced, the first application was made by Mr Duncan SC on behalf of the third and sixth defendants.

70. In his opening remarks, Mr Duncan acknowledged that the prosecution’s resistance to the application would no doubt be founded on the assertion that the ICAC was justified in recording the restaurant meeting because it was believed that the meeting would be used not in a bona fide way to obtain advice but for the purposes of advancing a criminal enterprise; namely, an attempt to pervert the course of justice.  In short, that the ICAC was justified in recording the meeting because it had reason to believe it would not be a privileged meeting.

71. In this regard, in his opening remarks, Mr Duncan read from a written statement of facts that had been prepared by prosecuting counsel.  The penultimate paragraph of that statement read :

“PW1 told by the ICAC prior to the meeting that instructions given – if any – by lawyer – may relate to an offence of obstructing justice.  Further informed by ICAC of legal professional privilege.”

Mr Duncan countered this by saying :

“We do not accept that there was any justification for the ICAC to tape this conversation on the grounds that it may disclose an offence of obstructing justice … We want that matter thrashed out, if necessary, by way of evidence.

…

if his [prosecuting counsel’s] position is that the ICAC had justification, legal justification, for embarking on the taping, it’s over to the ICAC to prove that they had that justification.  If they don’t give evidence on it, we will comment on it.  If they do give evidence on it, we will cross-examine their witnesses …”

A little later, Mr Duncan said :

“The sole outstanding … matter seems to be the suggested justification of the ICAC to proceed with this process in a lawful manner.  As I say, it’s going to be our contention that this was not a lawful exercise of their powers … If my learned friend wishes to call evidence on that, we will handle it accordingly.”

72. In answer, prosecuting counsel said :

“In that case, we may be calling quite a number of witnesses, including Mr Tang, and, obviously, I’ll need time to think about that …”

73. At that early juncture therefore it was plain enough, I think, that the application for a stay would be resisted on the basis that there was evidence that a person or persons, as yet unidentified, intended to exploit the meeting at the restaurant in order to advance a scheme to pervert the course of justice.

74. After the luncheon adjournment, however, prosecuting counsel informed the court that the applications made on behalf of all the defendants would now be able to proceed on what he described as a ‘premise basis’; that is, as I understand it, on a set of factual propositions agreed for the purposes of the voir dire only.

75. In addition, prosecuting counsel indicated that there would now be no need for the prosecution to call witnesses to testify in opposition to the applications.

76. As to the restaurant meeting itself, and whether the ICAC accepted that it had, in fact, been privileged, I have been unable to find any specific concession made at this time by prosecuting counsel.  But such a concession must at least have been understood because later in the proceedings prosecuting counsel fully accepted that there had been such a concession and, of course, sought the court’s consent to resile from it.

The testimony of Mr Fung

77. As it was, in part as a result of the first ruling, only one witness testified during the course of the voir dire.  That witness was Mr Fung, one of the solicitors who attended the restaurant meeting.  His testimony was short and to the point.  He testified that during the course of the restaurant meeting he had given legal advice to both PW1 and the third defendant.  That legal advice, he said, had concerned the ICAC raid on the offices of ABB on 7 November 2002.  Mr Fung was not cross-examined.

78. In her first ruling, when asked to listen to the tape recording of the restaurant meeting in order to determine whether, in the light of all the evidence, the meeting was privileged or not, the trial judge said the following :

“I have also been asked to listen to the tape of 16 November to determine whether or not it is privileged and to what extent.  There is already evidence before the court that the meeting on 16 November was protected by legal professional privilege.  Paragraph 5(h) of Mr Duncan’s submissions set out that two solicitors from Messrs Haldanes were present: Mr Louis Fung and Mr Geoffrey Booth.  Both are partners of the firm of solicitors.  I also have the unchallenged evidence of Mr Fung that legal advice was given at that meeting.”

79. With respect to the trial judge, who had a complex case to determine, one that has taken me considerable time to analysis, the fact that legal advice was given at the restaurant meeting did not mean that the meeting was, by that fact, a privileged meeting.  For reasons to which I shall come shortly, it seems to me that the very issue which the prosecution sought to have resolved was whether, even though legal advice was given, because the meeting was for a criminal purpose, it was not protected by legal professional privilege.  

The premised facts

80. The premised facts, by agreement at the commencement of the voir dire, set out the factual context in which both the applications for a stay and the opposition to them were now to be determined.  It is necessary to consider those facts to see whether, and, if so, to what extent, they explain the basis upon which the ICAC sought to oppose the applications.

81. The premised facts, as I understand it, were contained in five documents.  They were marked ‘MFI’ 1, 2, 3 and 4.  ‘MFI’ stood for the phrase ‘marked for identification’.  The fifth document, an internal ICAC form bearing the heading – ‘authorisation for covert obtaining of tape evidence’ – was an annexure to ‘MFI’ 2.

82. In considering the premised facts, I have described the persons mentioned in those facts in the same manner that they are described in this judgment.

‘MFI’ 1

83. This document consists of a succinct chronology of events, seemingly prepared by counsel for the defendants, setting out how PW1 came to act as an undercover agent for the ICAC.  It speaks of the ICAC raid at the offices of ABB and states that on that same day the solicitors, Haldanes, ‘were retained by ABB to protect the interests of the company and its employees’.  It says nothing of any conversations that PW1 allegedly had with the third defendant and/or Keith Leung following the raid.  As to the restaurant meeting on 16 November 2002, it says the following :

“	(f)	On 14th November 2002, PW1 informed the ICAC that the third defendant’s secretary had asked him to attend a lunch with the third defendant and a lawyer on 16th November.  The third defendant was the second most senior executive in ABB – PW1 was one of his subordinates.
	(g)	Having been informed as to this, the ICAC arranged for the covert taping by PW1 of the luncheon meeting.
	(h)	PW1 attended the meeting at which were present the third defendant and two solicitors from Haldanes – Messrs. Louis Fung and Geoffrey Booth.  The meeting lasted about an hour and was audio taped.
	(j)	After the meeting, and once the solicitors had departed, a conversation between the third defendant and PW1 ensued.  This was also taped and it is the prosecution’s intent to adduce the contents of this tape in evidence.”

84. In paragraph (j), while it is acknowledged that after the restaurant meeting a conversation took place between PW1 and the third defendant, a conversation that was recorded, nothing is said of the nature of that conversation.  All that is said is that the prosecution would seek to produce the recording in evidence.  Presumably, although it is far from clear, this means in the trial itself.  From that it can be presumed to be a conversation of some probative value for the prosecution.  But how and why, and the degree to which, if at all, it is relevant to the issue of why the ICAC hid a recording device on PW1 that day, is not explained, at least not in this document.

‘MFI’ 2

85. This document, seemingly prepared by prosecuting counsel, sets out a terse chronology.  It confirms the arrest of PW1, his agreement to act for the ICAC and the fact that he made a number of statements to the ICAC over a period of time described as ‘non prejudicial statements’.  It continues :

“7^th Nov 2002                 ICAC raid ABB’s offices.

                                       The fourth defendant was arrested at the offices.

                                       The third defendant was absent from the offices.

                                       ABB retain Haldanes

11^th November 2002       2 covertly taped telephone conversations between PW1 and Keith Leung.

11^th November 2002       Covertly taped meeting between PW1 and Keith Leung in a private car.  This meeting included discussion of ABB documents.

16^th November 2002       The taped meeting – subject/basis of this application.  PW1 knew in advance that a lawyer would be present.”

86. ‘MFI’ 2 originally contained the assertion that I have cited in para.71 above.  To cite it again :

“PW1 told by the ICAC prior to the meeting that instructions given – if any – by lawyer – may relate to an offence of obstructing justice.  Further informed by ICAC of legal professional privilege.”

That paragraph, however, was deleted from ‘MFI’ 2.  Nothing specific, therefore, appears in ‘MFI’2 to assist the court in understanding the basis of the prosecution’s opposition.

The annexure to ‘MFI’ 2

87. The annexure to ‘MFI’ 2 is the ICAC form of authorisation to fit PW1 with a recording device on the day of the restaurant meeting.  It is dated the day before that meeting.  It is a purely internal form, an administrative document.  It is signed by a Principal Investigator of the ICAC, Mr Ng Ping Kwok.

88. The document contains a series of printed headings with information inserted beneath those headings :

(i)     As to the persons to be the subject of the covert recording, the document lists PW1 (who would, of course, carry the recording device), the third defendant, Keith Leung and ‘unknown persons’.  Nothing is said of one or more of those ‘unknown persons’ being a solicitor.

(ii)     A printed heading seeks information on ‘other persons – non suspects – whose privacy may be infringed’.  No names are stated, however, nor details given.

(iii)     Provision is made on the form for detailing the evidence being sought, its anticipated value and – of some importance – what, if any, alternative means may be available for obtaining the evidence.  Under this heading, the following is inserted :

“Audio taped evidence is sought to corroborate offences under s.4(1) Prevention of Bribery Ordinance and s.19 Theft Ordinance alleged by Mr Tang against the third respondent, Keith Leung and others.  Evidence of a possible offence of perverting the course of justice can also be secured.”  (my emphasis)

(iv)     Finally, a synopsis of the investigation is required.  In so far as it is relevant, what is typed under this heading is as follows :

“In May 2002 … PW1, on a non-prejudicial basis, implicated the third defendant, Keith Leung and other staff of ABB to have conspired together to manipulate prices of miniature circuit breakers in collusion and to offer bribes to [a member of the Housing Department] for his corrupt assistance.  Subsequent to … a recent operation, during which ABB was searched and its staff arrested/interviewed, PW1 disclosed that the third defendant and Keith Leung (both not yet arrested) were concerned about the investigation, in particular how they should act in the event that ICAC approached them.  Meetings are being arranged between them for discussions.”

89. It will be seen that this internal form of authorisation does not indicate to the ICAC officer who must authorise the covert recording that it will almost certainly include the recording of a meeting with a lawyer. 

90. On all the premised facts, it is plain that PW1’s report to the ICAC was that he had been asked to attend a lunch meeting with the third defendant and a lawyer.  A reasonable inference to be drawn was that the lawyer was the person already retained to represent the interests of ABB and its employees.  From that, quite evidently, there was a real likelihood that legal advice would be given during the meeting; put succinctly, that it would – prima facie at least – be a privileged meeting.  This was clearly appreciated by the ICAC because PW1, who agreed to carry a hidden recording device, was asked to waive his legal professional privilege.  Despite this, however, nothing appears on the form of authorisation to the effect that a meeting with a lawyer would be recorded.  It is as if, for the officer who filled out the form, that probability was of no consequence.

91. The form does say that evidence of perverting the course of public justice can ‘also’ be secured.  But nothing is said as to the circumstances in which it can be secured.

MFI’ 3

92. ‘MFI’ 3 seeks to set out a chronology of events.  It speaks of the ICAC raid on the offices of ABB and the events that followed in the following terms :

“On 7^th November 2002 the ICAC searched the ABB offices and arrested the fourth defendant.  PW1 had prior notice of the search and had absented himself in the Mainland.  The third defendant and Keith Leung, another ABB employee who was under suspicion, were also by chance out of Hong Kong and were not arrested.

Keith Leung frequently contacted PW1 during the ensuing days and both he and the third defendant told him not to say anything if he was arrested, but to contact Mr Fung of Haldanes Solicitors.

Later the same day PW1 met with Keith Leung wearing a covert recording device.

On 14^th November, PW1 was asked by the third defendant to attend a meeting with the third defendant’s lawyer at a lunch on 16^th.  PW1 immediately reported this request to the ICAC, including the fact that a lawyer was to be present to give advice.  The ICAC asked him to attend the meeting wearing a recording device.”

93. ‘MFI’ 3 goes on to say the following :

“The ICAC were aware that this was to be a meeting between the third defendant, PW1and his lawyer.  Obviously, the third defendant was not aware that PW1 was cooperating with the ICAC nor that the proceedings were to be recorded by him.  The explanation given by the ICAC to PW1 for recording such a conference was that they:

‘had reason to suspect that the third defendant and Keith Leung (another ABB employee) might instruct me to make false statements to the ICAC officers, which might be an offence of obstructing the course of justice.  As a result, the ICAC had reason to believe that the third defendant’s purpose in asking me to meet the lawyer together with him might be to instruct me to make false statements.’” 

The ‘first person’ quotation is taken from what is described, as the ‘non-prejudicial statement’ of PW1 dated 21 November 2002.

‘MFI’ 4

94. This document sets out an extensive list of documents seized by the ICAC during the course of their raid on the offices of ABB.  The descriptions of the documents are succinct.  The following extract illustrates the point :

“Exhibit Number	Description	Page Reference
50	Photocopy of Rickson’s Invoice to ABB	195
51	Photocopy of ABB’s project job costing table re Tai Yuen Estate and Kwong Fok Estate (S/O no. 872)	196
226	One set of documents re Mpower invoice to ABB	585-588 ”

95. ‘MFI’ 4 concludes by saying :

“The said documents were subsequently shown to PW1 and used by him in some of his Non-prejudicial statements to the ICAC.

The said documents are documents which the prosecution intends to adduce at the trial in these proceedings as being relevant to the charges 1 to 4.”

The prosecution case contained in the premised facts

96. While I appreciate that time was limited, I confess that it has not been the easiest task to understand the nature and extent of the prosecution case contained in the premised facts.  I bear in mind, of course, that prosecuting counsel intended to expand upon and complement the premised facts when presenting his case in opposition.

97. However, in my judgment, one central basis of opposition does emerge from the premised facts, its core being contained in ‘MFI’ 3.

98. The ‘first person’ quotation contained in ‘MFI’ 3 as to why PW1 was asked to go to the lunch wearing a recording device is broad in its language and under scrutiny is capable of different interpretations.  But that being said, it must include, I think, the meaning that the ICAC had reason to believe that the third defendant and/or Keith Leung would exploit any legal advice given at the meeting for a criminal purpose; namely, to colour their instructions to PW1 as to how he should falsify evidence.

99. That being the case, it follows that what was alleged by the ICAC was that it had reason to believe that a conspiracy had been formed to pervert the course of public justice.  The perversion, aided by any legal advice given, would consist of creating false evidence in order to try and give a legitimate explanation for the bogus purchase orders seized in the course of investigations.

100. The members of that conspiracy, the ICAC had reason to believe, were the third defendant, Keith Leung and PW1 himself.  Nothing appears in that ‘first person’ quotation to suggest that the ICAC considered that a lawyer, or more than one, was a party to the conspiracy.

101. The ‘basis of opposition’, as I have described it, follows the indications given at the commencement of the voir dire; indications that I have described in para.70 above.

102. In addition, when making his submissions for the court to permit the prosecution to resile from its earlier concessions, prosecuting counsel suggested that the trial judge should listen to the recording of the restaurant meeting.  In doing so, he said the following :

“Your Honour, it’s only by listening to the tape that you can establish whether legal professional privilege does or does not exist.  The point is, of course, that legal professional privilege is lost if guidance or help is provided to a criminal enterprise even if it is without the knowledge of lawyers.  The privilege is lost by the criminal intent of the client, regardless of whether or not the solicitors were aware of it.”

Counsel continued :

“Your Honour, the court knows, from the written opening, what the criminal conduct is and the manner in which it is alleged to have been carried out.  Now, when listening to the tape or reading the transcript, the court will be in a position to assess whether or not legal professional privilege has, in fact, been lost.  The prosecution is unable, just as the defence would be in public interest immunity hearings, for example, to make submissions on whether or not the tape is, in fact, privileged or not because we don’t know what’s in it.

Your Honour, all we’re limited to saying is that we do not believe that it is privileged and the reason why we say that is the surrounding circumstances and we ask the court to hear about those surrounding circumstances and then listen to the tape.”

103. The trial judge, although she had to deal with a broad range of submissions by prosecuting counsel, some, with respect, being of limited merit, understood the ‘basis of opposition’.  In para.33 of this judgment, I cited her observations in the first ruling.  They bear citation again :

“… it is clear, from the prosecution’s submission, that they are not saying that the decision to record the meeting was not taken deliberately and intentionally.  They are submitting that they had good reason for recording the meeting because of, in particular, what is contained in a tape dated 11 November and that they thus did not record the meeting knowing/believing that the meeting was privileged and, if it was privileged, then that privilege was likely to have been waived because of the nature of the matters being discussed and the nature of the advice being given.”

104. In the result, although not immediately self-evident, the premised facts, in my judgment, read in context with all the submissions of prosecuting counsel made prior to the giving of the first ruling, indicate the following broad basis of opposition to the applications for a stay :

(i)	That the ICAC had good reason to believe that any advice given was to be exploited for a criminal purpose and that the restaurant meeting would not be privileged.  That being the case, even if, as it turned out, the meeting was privileged, it could not be said that the ICAC had acted in bad faith, in recording that meeting.  Their actions, therefore, even if mistaken, had not constituted an abuse of power, certainly not of the gravity alleged.
(ii)	That, despite the giving of legal advice, there was evidence to show that the advice had been exploited for a criminal purpose and that accordingly the meeting, or a material portion of it, had not, in fact, been privileged.

The creation of an ‘ideal case’ by counsel for the Secretary for Justice

105. During the course of his submissions, Mr Zervos outlined what he said may have emerged in evidence if the trial judge had permitted prosecuting counsel to resile from his earlier concession that the restaurant meeting had been privileged and if she had permitted him to call evidence.  Evidence, said Mr Zervos, may have emerged to indicate the following :

(1)	That after the ICAC raid at the offices of ABB PW1 had a meeting with both the third defendant and Keith Leung about the ICAC seizure of purchase orders.  At that meeting (on the afternoon of 11 November 2002), in the presence of the third respondent, Keith Leung said that he would give PW1 copies of the purchase orders so that he could invent some explanation in respect of them.
(2)	Later that same day, Keith Leung had a further meeting with PW1 in which he reiterated that PW1 should invent a false account to explain the purchase orders.

106. In light of this, said Mr Zervos :

(i)	There was therefore evidence of a conspiracy to pervert the course of justice by the creation of false evidence to try to explain away the bogus purchase orders seized by the ICAC.  PW1, the third defendant and Keith Leung were co-conspirators.
(ii)	It was only three days after these meetings that PW1 was informed that the third defendant had set up a lunch time meeting with ‘the lawyer’ and was asked to attend that meeting.
(iii)	In the circumstances, the ICAC had reason to believe that the third defendant and Keith Leung – or the third defendant only if Keith Leung did not attend the meeting – would use the meeting to advance the purpose of the conspiracy; namely, to use the legal advice given to help fashion some rational explanation for the bogus purchase orders.
(iv)	Of course, the fact that one or more of the conspirators intended to use the meeting for that purpose did not mean that the lawyer, or lawyers, who attended the meeting to give advice knew of that purpose.

107. As it was, after the restaurant meeting the third defendant did speak to PW1, said Mr Zervos, suggesting ways in which explanations for the false purchase orders may be invented and instructing him to present any such explanations to the lawyer to test his reaction.  This conversation, which was recorded, was ‘the proof of the pudding’, evidence in other words that the ICAC had been correct in their suspicions that the meeting had not been protected by legal professional privilege.

108. It is to be noted that the submissions by Mr Zervos as to the meeting between the third defendant and PW1 after the restaurant meeting formed part of the submissions by prosecuting counsel when seeking to have the court permit the prosecution to resile from its earlier concessions.  In this regard, prosecuting counsel said :

“Your Honour, indeed, when Mr Tang went to the meeting on 16 November, yes, there were conversations with the lawyer that took place there but, after the lawyers left, there was a conversation between Mr Tang and the third respondent outside the restaurant which was also recorded and it appears on the same tape, the latter part of the same tape, which the prosecution are seeking to adduce as part of this case because – of course, the only reason that we’re seeking to produce it is because we believe that it furthers our case; otherwise, we wouldn’t bother.”

109. This outline of evidence that may have emerged if the trial judge in her first ruling had permitted it, was criticised by counsel for the defendants as a case which had been created with the benefit of hindsight, an ‘ideal case’ that had never been before the trial judge.  It was said that either the evidential matters spoken of by Mr Zervos had never been before the trial judge or, in so far as they may have been, the trial judge could never have been expected to bring them together in the coherent form advocated in this application.

110. It is, of course, a basic principle that the lawfulness of a decision is to be determined on the basis of the material available to the decision-maker at the time the decision was made.  It is not to be determined on the basis of material only made available after the decision has been made or only ‘packaged’ after the decision has been made so that, when presented afresh, it constitutes a materially different case, a case that was simply not available to the decision-maker to consider before making his decision.

111. In my judgment, it is debatable whether all of the matters referred to by Mr Zervos would have emerged.  I have been at pains not to come to conclusions on the basis of matters that should have been before the trial judge but were not or, if available, were presented in a way that made it impossible for the judge to put them in the context advocated by Mr Zervos.

112. In my opinion, judicial review being a discretionary remedy, the outline presented by Mr Zervos serves the purpose only of showing that, if the first ruling had been different, there would, prima facie at least, have been matters of substance (going to the question of whether the restaurant meeting was privileged) to be advanced in opposition to the applications for a stay.

Unsustainable conclusions in the first ruling

113. Mr Zervos contended that the first ruling of the trial judge was in a number of respects erroneous in law in that conclusions were reached which were not sustainable on the evidence placed at that time before the trial judge and/or in light of the submissions of prosecuting counsel.  The trial judge, he submitted, although the task before her was not a easy one, had not accurately comprehended certain of the submissions and the evidence upon which they were based.  These errors were material and led to conclusions that were wrong, not simply in fact, but in law.  In my judgment, in at least two respects, Mr Zervos was correct in this submission.

(a)       The recording of the meeting with Keith Leung

114. The second witness who prosecuting counsel sought to call was an ICAC officer who would produce the tape recording of a meeting between PW1 and Keith Leung had on 11 Novemn included in thed facts : see, for example, ‘MFI’ 2 and 3.

115. The trial judge ruled that the witness could not be called nor the recording produced :

“The tape of 11 November, to which the prosecution ask me to listen, concerns a conversation between PW1 and a Keith Leung.  None of the defendants was present during this conversation.  Further, Mr Leung is not before the court in any capacity and he was not present at the meeting on 16 November nor, indeed, was he expected to be at that meeting.

Further, I am informed that no separate action of a criminal nature has been brought on the basis of the meeting of 16 November.  It is thus, in any event, very questionable as to whether such evidence would take the matter any further.  The nexus is quite strained.”

116. As I have said, the fact of the meeting of 11 November 2002 had been included in the premised facts.  But the fact of that meeting alone, it would seem to me, without knowing what was said during the meeting, would not advance matters particularly.  That must have been why prosecuting counsel sought to lead evidence as to what had been said.

117. If, on the basis of the premised facts, the ICAC alleged that they had reason to believe that a conspiracy had been formed to pervert the course of justice and that the members of that conspiracy consisted of, or included, the third defendant, Keith Leung and PW1, then clearly what was said during the course of the meeting on 11 November 2002 was significant.

118. The third defendant may not have been at that meeting but, despite the indications of the trial judge, that did not render evidence of what was said inadmissible in respect of him.  As I understand it, the acts and declarations of a person engaged in a joint criminal enterprise and made in pursuance of that enterprise may be admissible against another who is not present if the evidence reveals the complicity of that other in the criminal enterprise.

119. What was said during the meeting of 11 November 2002 was, on this basis, significant in determining the issue of how and why the ICAC came to record the restaurant meeting because, of course, it was the ICAC case, at least in part and even if submissions were sometimes ambiguous, that the meeting was being exploited to further the conspiracy and it was that exploitation which stripped the meeting of any protection of privilege.

120. The fact that Keith Leung was not a defendant in the criminal proceedings could not, in my view, have affected the asserted fact (which the prosecution hoped to demonstrate) that he had been a conspirator.

121. Equally, the fact that the alleged conspiracy itself had not resulted in any formal criminal charge would not of itself determine whether there had, in fact, been a conspiracy or had, in fact, been cogent grounds at the time for believing such a conspiracy existed.

122. What must also be remembered is that the issue of an alleged conspiracy to pervert the course of justice had been raised only in respect of the stay applications; it had been raised in an attempt to explain the actions of the ICAC which had given rise to those applications.  In that critically important but nevertheless limited regard the issue of the existence of a conspiracy, and what was said in furtherance of it, had to be of crucial relevance to the issues that fell for determination by the trial judge.

123. In my judgment, however, when dealing with the request to produce evidence of what was said at the meeting of 11 November 2002, the trial judge failed to consider the application in the context which I have outlined.  In my judgment, that amounted not simply to an error of fact, a matter going to the merits, but, in the circumstances, to an error of law.  Put simply, I believe the trial judge failed to take into account a materially relevant consideration and in so doing, led herself to take into account irrelevant ones.

(b)     The finding that allegations of culpability were being made against the solicitor or solicitors who attended the restaurant meeting

124. In her ruling, as I have already cited in para.33 above, the trial judge came to the conclusion that, if an allegation was being made that the restaurant meeting was being used to further a criminal purpose, that had to constitute a serious allegation against the solicitors who attended that meeting in order to give advice.  She said that such an allegation would require a very secure foundation; mere suspicion would not be sufficient. 

125. But, of course, on the premised facts, and in light of the submissions of prosecuting counsel, nothing to my knowledge had been said up until the giving of the first ruling that the solicitors were in any way complicit in exploiting the meeting for a criminal purpose.  To the contrary, on my reading of all the material, as I have attempted to illustrate, allegations of conspiracy to pervert the course of justice were made only against the third defendant and Keith Leung, PW1 being a conspirator too.  On that basis, it had to be concluded that, if the conspiracy was proved, the solicitors were being used as ‘innocent tools’.

126. In my judgment, the conclusion reached by the trial judge was materially wrong on the basis of the evidence before her at the time.  Nor did it take into account that a meeting at which legal advice is sought and given will not be privileged if it is exploited for a criminal purpose, not by the professional legal advisor, who is at all times ignorant of the true purpose of the advice, but by the client, either alone or with a third party.

The failure to conduct a full inquiry

127. It was fundamental to the submissions of Mr Zervos that the trial judge was wrong in law in her first ruling because, by refusing to allow the prosecution to resile from the concessions earlier made, she denied herself the ability to inquire into the circumstances of the case.  The authorities, however, said Mr Zervos, made it plain that, before a court took the exceptional step of staying proceedings on the basis that there had been a gross abuse of executive power, there had to be a full inquiry.  

128. By way of a preamble, Mr Zervos emphasis the following matters :

(i)	That the concessions made by prosecuting counsel; namely, that it was conceded that the restaurant meeting had been privileged and that it was not the intention of the prosecution to call witnesses in the voir dire, had been made at the outset of the voir dire before any of the applications for a stay had been advocated.
(ii)	That the application to resile from the concessions had been made at the very commence meant of the prosecution’s case in opposition.  It was not therefore as if the prosecution had completed its case, closed it and then asked to re-open it.  To the contrary, it had not – in any substance – even opened its case.
(iii)	The investigating agency, the ICAC, stood accused of a deliberate course of conduct which was so unworthy and shameful that it constituted an affront to the public conscience.  Yet, now that the full extent of the applications were understood by prosecuting counsel, the ICAC was denied the ability to give evidence to state its position, a position which, even if at times ambiguously, it had always advocated.

129. As to the need to conduct a full inquiry, Mr Zervos referred to two authorities.

130. In R. v. Loosely [2002] 1 Cr. App. R.29, 360, at 373, Lord Hoffmann, looking to the emergence of the jurisdiction in the English law, made it plain that the court had an obligation to inquire into allegations of an abuse of executive power and, if it found those allegations proved, had the power then, in its discretion, ‘to stay the proceedings’.  Mr Zervos also referred to a first instance decision given by myself : Secretary for Justice v. Cheung Chung Chit [2003] 3 HKLRD 447 at 453.  In that decision, I said :

“If a stay is to be a matter of ‘last resort’ and is to be avoided if possible by the taking of practical measures, this indicates that invariably an inquiry is necessary.  By that I do not mean that a formal inquiry, some form of voir dire, must always be held.  But it speaks for itself, I think, that if the court is under a duty to attempt to control procedures to avoid or minimise unfairness then some inquiry must be made by the court as to how that can best be done.  In this regard, the headnote to the decision of the Court of Appeal in R v. Takeshi Machiya[1990] 1 HKL 73 reads :

In order to ascertain whether or not injustice would be done to the defendant if the trial were to proceed, and so that the exercise of the judge’s discretion could be a properly informed one, it was clearly necessary for the trial judge to consider that which they would have said were they to live up to proof.  The trial judge should have held a form of preliminary inquiry, considered the victim’s statement, and any other evidence relevant to the issue before coming to a decision.  A-G v Ma Chiu Keung [1988] 2 HKLR 64 applied.

During the course of submissions much was said of the dangers of a judge assuming an inquisitorial role if compelled to make an inquiry.  I find nothing of substance in that concern.  Our courts have an obligation to control their own procedures so that, as far as possible and in accordance with law, a fair trial is assured.  From time to time that places upon presiding judges the obligation to seek answers, implicitly thereby to make some form of inquiry.  In guarding the integrity of the judicial process in their courts common law judges cannot be entirely passive.”

131. Earlier in this judgment, I considered the need for a full inquiry in matters of the kind facing the trial judge.  It is appropriate, I think, to repeat what I said in para.26 : ‘It is fundamental, I think, that the rules of fairness dictate that when any person, or group of persons, is accused in legal proceedings of a grave, indeed shameful, act which is said to amount to an abuse of the system of justice, that person, or those persons, must be given a full opportunity to answer the accusation.  That principle is to be applied equally to officers of investigating agencies.  Unless they are given that opportunity, leaving aside justice being done to them as individuals, how else can the court weigh the public interest in bringing defendants to trial against the public interest in ensuring that officers of investigating agencies do not themselves flout the law?’

132. In my judgment, while this court must only interfere with an exercise of discretion by the judge of the lower court when that discretion is clearly shown to be wrong in law, and not merely on the merits, in the present instance, in all the circumstances, I have been drawn to the conclusion that the refusal by the trial judge to allow prosecuting counsel to resile from his earlier concessions acted to prevent the court from conducting the searching inquiry which it was obliged to conduct.  I find it difficult, for example, to see how the court could determine whether the ICAC had or had not acted in bad faith – a consideration of central importance – without allowing officers of the ICAC to explain their position.

Conclusion

133. In all the circumstances, for the reasons given, the first ruling of the trial judge must be quashed as being wrong in law.  It follows that the matter will have to be remitted to the District Court for a fresh determination in accordance with law. 

134. In my judgment, all of the defendants are affected by this ruling and it therefore applies to each of them.  A fresh determination will determine both limbs of the stay applications. 

135. The first ruling being quashed, there is no need for me to consider the lawfulness of the second ruling; indeed, it would be wrong of me to do so.

136. As to costs, if necessary, I will hear from the parties.