A COMPANY v. THE COMMISSIONER OF ICAC

1996, MP No. 544

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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J U D G M E N T

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1. This is a motion for judicial review of the decision of the Deputy Commissioner of the ICAC to issue a search warrant to Brian Leonard Lloyd, a Senior Investigator of the ICAC, in respect of the Applicant's premises leave having been given by Yeung, J. on 14th February 1996 in respect of the second warrant.

2. There are two affidavits filed by the Respondents, and one by the Applicant's Senior Manager.

3. The facts are relatively straightforward. The Operations Department of the ICAC has been investigating the question of alleged payments of secret commissions by employees of the Applicant company to employees of a specified travel company and other travel companies to encourage tourists to buy jewellery from the Applicant's company's premises rather than from those of other companies. The investigation was concentrating on the activities of the Applicant's Business Promotions Manager in his relationship with a named employee and other employees of the specified travel company.

4. A warrant was issued on 9th February 1996 under s. 17(1) of the Prevention of Bribery Ordinance to search the office of the Accounting Department of the Applicant's premises.

5. There is no dispute that that warrant was a valid one and properly executed, and that documents which fell into the category set out were properly seized under s. 10C(1)(c) of the ICAC Ordinance. However it is important to consider the position in relation to this first warrant.

6. S. 17 relating to the warrant requires the Commissioner to have reasonable cause to believe that in any premises or place (other than that of a public body) there maybe anything which is or contains evidence of the commission of an offence under this Ordinance, in order to issue a warrant directed to an Investigating Officer, empowering him to enter such premises and search the same.

7. The warrant itself specifies a particular person as having committed an offence or offences whilst in the course of his employment, and also specifies the recipient of the inducement and his employers, a travel agency. The wording of the section does not require such particularity, only a statement as to the offence under the Ordinance viz. Prevention of Bribery Ordinance Cap. 201.

8. Since the investigation was in relation to the Applicant company and payments made by its employees to employees of travel companies it was not necessary to particularise individuals, even though the investigation was focusing on a particular aspect of that activity.

9. In the course of executing that warrant, the Senior Investigator came into possession of a document which gave him information in relation to commission payments by the Applicant company to a number of individuals and companies. In an affidavit sworn by the Senior Manager of the Applicant company, it appears that the particular named Manager ceased to be employed by the Applicant company at the end of December 1993. Mr. Lloyd's affidavit is silent as to this matter but it is a reasonable inference from paragraphs 6 and 9 of his affidavit that he was informed of this and that this was the reason for his seeking a warrant to extend the period referred to viz. the period of the Manager's employment. It is not unimportant that although he was orally informed of this that he was not obliged to accept it. The warrant in any event specified only that there may be accounts, books, documents, records or other articles in the Accounting Department, which are or contain evidence of the commission of an offence under the Ordinance. There was no requirement to be more specific than that.

10. If the execution of this warrant entitled the ICAC to consider and seize (under the seizure section) the document which gave rise to a suspicion and belief of offences under the Ordinance having been committed other than the particular one specified within the body of the warrant, but within the general statement of an offence, then the second warrant was superfluous or redundant.

11. In his attractive and direct argument Mr. Philip Dykes for the Applicant has argued that since the first warrant specifies the particular individuals and a particular offence or series of offences, the ICAC are "hoist with their own petard," even though it was not necessary for them to be so particular when they could have relied upon the general statement of an offence under the Ordinance. The document concerned, it is alleged, is outside the ambit of that particular inquiry. When one considers the reality of this position it would mean that the Investigating Officer, having come into possession of a document which was presumptive evidence of the general nature of offences being investigated, would have to leave it, and return to obtain a fresh warrant to cover its examination and seizure, simply because on the face of the first warrant, an offence was alleged which was within a specific time scale, namely the period of employment of the Applicant's Business Manager.

12. The document produced, exhibited to Mr Lloyd's affidavit, disclosed commission payments in May 1994, to named guides of agents who were identified only by code numbers. For the full significance of that document to be appreciated other documents and/or records would need to be searched for and obtained. Ignoring for the moment the argument that the precise offence indicated a time scale namely 31st December 1993 outwith which this document fell, it would certainly have been covered by the general statement of the ambit of the search and the Ordinance and its retention was valid as would be the follow-up search to ascertain the identities of the coded agents and any related documents.

13. Accepting for the moment Mr. Dykes' argument that the more specific offence referred to in the body of the warrant establishes a time scale to which the warrant is confined, what then is the position? It may well be that the Business Manager resigned at the end of 1993, but the aspect of his alleged criminality may not be confined to such a time scale. The timing of such payments may have been later when the value of such "bribe" custom had been ascertained. That means a corrupt system established by him during his actual employment may not bear fruition for the recipient until after his alleged resignation. Is the ambit of the search under a valid warrant to be restricted in terms of the dating of the documents to the last day on which an alleged offender was employed as the Applicant's manager? To my mind the answer must be no, because such restriction may exclude significant evidence to support the contention or belief that such an offence has been committed and would impose a handicap upon a proper investigation. And if the document discloses that the corrupt activity was not confined to the named recipient and company but to other individuals and companies is it to be put aside even though it is consistent with more extensive corrupt activity? It is important not to overlook the fact that the empowering Ordinance is designed to expose and prevent crime which can easily pass undetected and unproven without the powers provided for. There has to be a balancing exercise because the right of the individual privacy is enshrined in our common law. There is not to be countenanced an abuse of executive power which threatens such individual rights. Is the retention of such a document and the extended search to ascertain the identities of the suspected/believed companies (which will clarify the identity of the recipients of the commissions) to be stigmatized as unlawful and therefore an abuse? I think not.

14. I find support for this in the approach of the Hong Kong Court of Appeal In re An Application by a Firm of Solicitors [1990] Vol. II HKLR Hunter J.A. at p. 156:

"It seems to us that this warrant was properly and carefully drawn with these principles in mind. (those in IRC and Rossminster [1980] A.C. 952 considered earlier in detail in the judgment).

It is specifically limited to "documents used in the commission of a criminal offence". In this context this means documents which the searcher has reasonable cause to believe evidence the commission at least of one of the offences named in the warrant. We say at least because the principle of Chic Fashions (West Wales) Ltd. v. Jones [1968] 2 QB p. 299 as applied in Rossminster both by Lord Diplock at p. 1010 and Lord Scarman at p. 1023, probably justify the seizure under s. 10C(1)(c) of the ICAC Ordinance, of any document evidencing another offence under the Ordinance."

15. I turn then to the speech of Lord Diplock at p. 1010 E - H:

"As regards more detailed specification in the warrant of the offence of which the circuit judge was satisfied that there were reasonable grounds for suspecting had been committed this would not help the person whose premises were searched to know what documents were liable to be seized, since the right of seizure under ss. 3 is not limited to documents that may be required as evidence in the proceedings for that offence alone but, on the true construction of the subsection, extends to documents that may be required as evidence in proceedings for any other offence that falls within the genus of offences involving any kind of fraud in connection with or in relation to tax. This as it seems to me, is the plain meaning of the words "such an offence as is mentioned in ss. 1 above". Nor do I find it surprising that parliament should grant a power of search under the warrant wider in its scope than those things which it was already suspected would be found on the premises when the warrant was issued. Even at common law as it had developed by the time the act was passed a warrant to search premises for stolen goods particularised in the warrant justify seizure of other goods found upon the premises at the time the warrant was executed if there were reasonable grounds for believing that those other goods were stolen."

16. Similarly the speech of Lord Scarman at p. 1023 G - H:

"An officer can enter only if armed with the warrant issued under ss. 1 i.e. a warrant authorising entry and search. Having entered he may seize and remove anything which he has reasonable cause to believe may be required as evidence "in respect of such an offence as is mentioned in ss. 1 above". I construe these words as a reference to the kind of offence there mentioned and not limited to the particular offences suspected i.e. to any offence involving any form of fraud in connection with or in relation to tax. Such a construction is, as my noble and learned friend Lord Diplock points out, consistent with the power of seizure of goods other than those mentioned in the warrant conferred by a common law warrant to search premises for stolen goods."

17. It is clear that there is good authority for the statutory power being construed as giving power to seize evidence relating to another offence within the Ordinance. S. 10C(1)(c) of the ICAC Ordinance (Cap. 204) empowers the officer authorised by the warrant to "seize and detain anything which such officer has reason to believe to be or to contain evidence of any of the offences referred to in s. 10." S. 10 is, of course, principally concerned with the Prevention of Bribery Ordinance (Cap. 201).

18. This is in my view a matter of common sense. It would hardly facilitate the "public interest in the detection of crime" if police officers, who were properly authorised to enter premises, to search for and seize documents which may be evidence of a particular crime, and find other documents which evidence another offence, other than the one specified in the warrant but which nonetheless is under the general umbrella of the Ordinance concerned, are unable to detain or seize such a document simply because it is not concerned with the particular offence.

19. In Mr. Lloyd's affidavit - and I shall return to the context and content of the two affidavits from the ICAC later - at paragraph 8 when he deals with the effect upon him of the contents of the document he said

"I was satisfied that this information, together with other information available from the investigation, provided me with reasonable grounds to suspect that these vouchers contained evidence of an offence under the Prevention of Bribery Ordinance."

20. The section states "reason to believe to be" - not, "reasonable grounds to suspect" and Mr. Dykes rightly points out that the terms are not synonymous and there is good authority to support him. However, I take the view that this was an occasion when there was an inaccurate use of language by Mr. Lloyd and that the whole tenor of paragraph 8 of his affidavit has to be considered. I do not consider that on this occasion it was essential to use the accurate term. What he was in fact expressing was his belief that the document because of its contents in at least one respect, contained evidence of bribery. It is, however, important as a general principle to follow the language of the Ordinance, if that is in fact the state of mind of the deponent. (see George v. Rockett 93 ALR p. 482 - 483 - and Johnson v. Whitehouse 1984 RTR at p. 47.)

21. An objective assessment of the situation leads me to the same conclusion. The first warrant was issued on the strength of "reasonable cause to believe that there may be documents etc. which are or contain evidence of the commission of an offence under the Ordinance". The offence is specified as relating to the offering of advantages to tourist guides as an inducement. The officer received a document detailing payments made to named tourist guides, their employing agencies being designated by a code number. It is difficult to see in those circumstances how Mr. Lloyd's mind can have been other than in a "believing" state.

22. It follows therefore that the document, and collateral documents and records, fall within the ambit of the first warrant whether the warrant operates in respect of the general statement of the offence or in respect of the particular persons involved in the alleged offence or offences.

23. In order to do justice to Mr. Dykes' extensive arguments I need to consider one further aspect in relation to this warrant as well as the position in relation to the second warrant, in the event that I am wrong on the ambit and operation of the first warrant.

24. If the document in question did not fall within the purview of the first warrant either because it did not fall within the scope of the documents to be searched for in relation generally to an offence under the Ordinance, or because it was outwith the scope of those which could be searched for and seized in relation to this specific offence set out in the body of the warrant, were the ICAC officers acting as trespassers on the Applicant's premises when they had possession of and considered that document?

25. Mr. Dykes' contends that the authority of the first warrant had by then been exhausted. But the authority of the warrant is to look at documents, books, records etc. in respect of an offence under the Ordinance. The fact that a document looked at may not, relate to such an offence, does not mean that there and then the authority to enter and search terminates such as to make continued presence a trespass. In any event, Investigating Officers remained on the premises even though Mr. Lloyd left for a time, carrying out a search or pending resumption or clarification of the search. It is clear that in order to obtain the relevant documents it is necessary to make a search which may well involve handling, or detention for clarification, documents which may ultimately not be such as afford evidence of the alleged offence or offences. If it were possible to identify specifically each and every document which met the need, it would not be necessary to conduct the search to ascertain the requisite documents, and they could be identified specifically in the warrant. Accordingly, until the search is completed and the requisite documents obtained, listed and all other formalities completed, the presence remains a lawful one.

26. Mr. Dykes does not contend that the mere absence of the officer to whom the warrant is directed makes the continued presence of others a trespass and he is correct in my view. He does, however, challenge the validity of the second warrant on a number of bases and I now pass to consider those in the event that I am wrong in my conclusion that the first warrant covered the position without any need to consider the second warrant.

27. Firstly he says that the very fact of it being sought indicates that the officer considered that particular document referred to, did not fall within the ambit of the first warrant and he could not lawfully detain it and any collateral documents explaining its contents. That is certainly the clear inference to be drawn from Mr. Lloyd's affidavit - he almost says as much. Mr. McWalters on behalf of the ICAC contends that the decision to seek another warrant was simply in order to set at rest the concerns of the Applicant's employee. That is not what it says in the affidavit and I have little difficulty in rejecting that.

28. If the second warrant was necessary to deal with the document (and any collateral document) outside the period of the offence specified in the first warrant, was it valid?

29. The content of the affidavits of Mr. Lloyd and Mr. Buckle are attacked for their deficiencies and with some justification. Mr. Lloyd does not say he spoke to Mr. Buckle - nor does Mr. Buckle say he spoke to Mr. Lloyd. In Mr. Lloyd's affidavit is a short uncommunicative sentence - "I contacted the ICAC explaining the position and requesting that a new enlarged s. 17(1) warrant be issued to enable seizure of documents outside the time limit specified in the first warrant and not confined to the specified travel agency." I would then have expected an explanatory paragraph but that is the end of the information.

30. Mr. Buckle's affidavit is hardly more informative. Paragraph 6 says - "as a result of that (overt investigation on 12 February) I became aware of further information that other unidentified persons were involved in the giving and receiving of secret commissions in similar circumstances." And in paragraph 7 he goes on to say - "I also received information which made it appear to me that there was reasonable cause to believe that in the same premises of the Applicant company there might be things which were or which contained evidence of the commission of an offence under the Prevention of Bribery Ordinance by these unidentified persons."

31. However, unsatisfactory I regard the form of these affidavits I remind myself that I must look at them critically not destructively just as I should view the legislation on this aspect, as Lord Wilberforce and Lord Diplock indicated in IRC and Rossminster.

32. It does not require much deduction to conclude that one of these sources and information must have been Mr. Lloyd either directly or indirectly. The second warrant was issued only because Mr. Lloyd sought it and some information as to Mr. Lloyd's need must have come to Mr. Buckle.

33. It is clear from the principles enunciated by the House of Lords in IRC v. Rossminster (as re-iterated by the Court of Appeal in Hong Kong In re An Application by a Firm of Solicitors) that the Applicants are not entitled to information relating to "the reasonable ground" upon which the warrant is based. Any investigation of that is not to take place until after the public interest immunity factor has evaporated. That, however, is not to prevent a Court from setting aside a warrant if there is a clear indication that reasonable grounds do not exist. It must be vigilant to ensure that there is no abuse of the executive power particularly where there has been no judicial scrutiny or consideration of the original application for the issue of such a warrant. I am satisfied that it was properly issued and a valid warrant.

34. The particulars of the offence set out go far beyond what is required under s. 17(1) - as did the first warrant - those requirements are therefore satisfied. But as in the case of the first warrant, having been more specific than simply stating an alleged offence under the Ordinance, the executor of the warrant may only search for, detain and seize documents which fall within the ambit of that offence.

35. I am satisfied that the document concerned, and collateral documents and records which explain and or clarify the coded or imprecise contents of that document, fall within the purview of that warrant. The ICAC, having by the details of the specific offence set out on the first warrant imposed upon itself a time scale, extended that time scale by framing a particular offence in a second warrant to incorporate the apparent details of the document concerned. As I have indicated, they were mistaken in my view in considering that they needed to do this, but in the event that I am wrong in my construction, the second warrant remedied the position. The validity of the first warrant continued to run. It was not exhausted by the issue of the second warrant. There is no logical reason in my view why the two valid warrants should not be executed at the same time.

Summary

36. It may be helpful to set out my conclusions in short and sequential form:-

(1) The first warrant was valid. That is not disputed.

(2) The ICAC, having specified a more particular offence under the Ordinance, though they did not need to do so, are fixed by that and therefore the execution of the warrant is confined to documents, records etc. relating to that specific offence or offences.

(3) The first warrant was properly executed and the document disclosed to the officers, exhibited to Mr. Lloyd's affidavit, and the collateral documents or records, fell within the ambit of the search and seizure appropriate to the particularised offence.

(4) In any event the ICAC officers were entitled to seize this document (and any collateral documents or records) under s. 10C(1)(c) of the ICAC Ordinance (Cap. 204)

(5) If I am wrong in law on 3) or 4) the steps to obtain a second warrant to cover this document (and of the collateral documents and records) were proper and expeditious, and the warrant obtained was valid and covered the search and seizure of this and the collateral documents and records. The second warrant, like the first, contained details of a more specific offence or series of offences than the bare assertion of an offence under the Ordinance. It could be executed only in respect of the documents and records material to that specified offence or series of offences. I am satisfied that in any event the document (and collateral documents and records) were within the ambit of that warrant.

(6) The hiatus, if there were such, between the receipt of that document and the obtaining of the second warrant, did not mean that there was a trespass by the officers on the Applicant's premises. The validity of the first warrant continued to run.

(7) The document (and any collateral documents or records) could properly be seized under s. 10C(1)(c) of the ICAC Ordinance.

Affidavits

37. It is necessary in my view to state the position and attitude of the Court to affidavits or affirmations as I consider in this case too little attention has been paid by or on behalf of the ICAC to the status, purpose and form of them.

38. No deponent should swear to the contents of an affidavit unless they are accurate. Mr. Lloyd deposed to the reason for his obtaining the second warrant. It is not open to the ICAC to suggest that that was not the reason.

39. In general, it is not for the Court to draw inferences to complete what may appear to be gaps or to correct deficiencies in two or more affidavits which purport to deal with a communication directly or indirectly between two deponents. There was, in my view, no reason why the form and the nature of the communication, and the parties concerned, should not have been fully and precisely set out, without in any way compromising the public interest immunity factor. In this case I felt able to fill in those gaps because logic and fairness compelled me to do so, but the sort of approach to affidavit evidence, evident in this instance, is inappropriate. The onus upon those seeking to justify the issue and execution of such warrants is to be clear, accurate and comprehensive in expression and content. The arguments to explain an item in an affidavit which start "what the deponent really means to say is" and or "we did not have much time" will not do. In the case of the former it would never be acceptable; in respect of the latter, time would have to be sought, either by establishing a priority that such a matter calls for immediate and careful application of the persons concerned, or by seeking an adjournment.

Publication

40. To date, the identity of the companies and their employees have remain undisclosed. I have decided that this position should remain so and I order accordingly. Mr. McWalters took a neutral stance on behalf of the ICAC. Mr. Dykes positively sought such an order.

41. The reasons for my decision to order that the identity should remain unpublished are, that as far as the potential defendants are concerned, publication could affect their business, reputation and in some cases possibly security of employment. No charges or proceedings have been laid or initiated.

42. As far as the ICAC is concerned, it cannot be in the public interest, which requires matters to be properly and fully investigated without interruption, for anyone who may be alerted by such publicity, to take steps which may obstruct the investigation. It is not difficult to see that the public interest immunity principle may be compromised.

43. I make no order for costs. The reasons for this are implicit in my findings.

Conrad Seagroatt

(Judge of the High Court)