HKSAR v. Chen Keen (Alias Jack Chen)and Others

HCCC 309/2019

[2021] HKCFI 3024

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CRIMINAL CASE NO 309 OF 2019

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Before: Deputy High Court Judge Bruce SC in Court

Dates of Hearing:  15, 17, 22, 24 to 26 March, 1, 15, 16, 21 to 23 April 2021

Date of Ruling:  26 March, 1 and 21 April 2021

Date of Reasons for Ruling:  12 October 2021

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RULING:
APPLICATION TO ISSUE A SUMMONS FOR CERTAIN
DOCUMENTS HELD BY MS KATHERINE CHAN
OR HER FORMER SOLICITORS

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INTRODUCTION

General

1.Ms Chan Wai-kay, Katherine (“Ms Chan”) testified as the first prosecution witness in this trial.  In essence, her testimony was that in 2009 she became a director and then executive chairman of China Jin Hui Mining Corporation Limited the listed company at the centre of the charges levelled against the Accused.  In this discussion, I propose to refer to that company by its stock code number “462”.

2.A proposal was put to Ms Chan by or through the 1^st Accused about a project which might be taken up by 462.  The essence of the proposal was that 462 would buy in stages an interest in a New Zealand company which in turn owned or was to own certain dairy farms in New Zealand.  The New Zealand company was owned or under the control of the 2^nd Accused. Ms Chan played an important role in the design of the proposal and the implementation of the proposal to which I have referred.  To that end, her knowledge and understanding of what was involved in the proposal and its implementation is utterly critical to the determination of this case.  As the proposal progressed through the various stages which are necessary for such a large deal, it is alleged by the prosecution that the 3^rd Accused became involved in that process.

3.It will be appreciated that the foregoing outline is superficial in the extreme and is expressed in as neutral as possible terms because much of the details of the proposal and its implementation is hotly contested by the Accused in this case.

4.Ms Chan’s testimony is the vital to the prosecution case.  In the course of her cross-examination, a series of propositions were put to Ms Chan by Mr Winter, QC.  The first proposition was that there came a time when Ms Chan was arrested by the ICAC in connection with her participation in the proposal and the implementation of the proposal. Although Ms Chan was never charged, the bases for the arrest were allegations which included bribery of Ms Chan by, amongst others, the 1^st Accused and an allegation that she was party to false and misleading statements in the announcement and the circular by 462 on 4 June 2009 and 8 September 2009 respectively. The second major proposition was that although Ms Chan was not worried about the allegation of bribery.  However, she was worried about the allegation of the false and misleading statements.  The third major proposition was that with the assistance of her lawyers, K & L Gates, she was able to be released on bail following her arrest and the ICAC were persuaded not to charge Ms Chan.  In this connection, there was a period where she was prohibited from leaving Hong Kong.  In due course, her liberty to travel was restored to her and following that she agreed to be a prosecution witness.

5.The essence of the accusation made by Mr Winter, QC is bound up in a question asked by him as follows:^[1]

Rather than take the risk of being prosecuted and having to explain that you’d acted throughout on the advice of K&L Gates and ShineWing, you chose to implicate Ms Wang to buy your way out of the problem, didn’t you^[2]?

The answer of Ms Chan was:^[3]

I disagree.  It is absolutely not true.  I did not buy my way for anything.

6.The essence of the allegation was that Ms Chan decided to cooperate with the ICAC to get herself out of trouble or make sure she stayed out of trouble with respect to the allegation of being, in essence, a party to the supply of false figures in the announcements. It is possible a jury could view Ms Chan’s testimony in an adverse light if they thought that the propositions put by Mr Winter, QC had a sound basis.

7.It is important in understanding the issues which arise to note that no disclosures of any records of any “deal” between the ICAC and Ms Chan have ever been made.  The prosecution asserts that no such records exist.

The claim and possible waiver of legal professional privilege

8.In the course of cross-examination of Ms Chan, Mr Winter, QC asked her about the events which occurred following her arrest.  In the course of her answers, Ms Chan testified that although she remained silent when questioned by officers of the ICAC she did so because of advice from her lawyers (who were, at that time, K & L Gates) and while she acted on that advice she wished to answer the allegations put to her in the interview with the ICAC under caution. The transcript of this is important and is outlined below. The first passage of important areas is^[4]:

Q.  And you exercised perfectly lawfully, perfectly properly and there is no criticism about it at all, your right not to answer the question?

A.  Yes.  And I think -- I told my lawyer “I want to answer every question”.  It was under his advice that I should not answer.  I said, “I want” --

Q.  Just pause a moment.  You need to be careful about waiving your legal privilege and I think your Lordship ought to advise.

MS DRAYCOTT:  I think --

COURT:  Let me. You, of course, realise that whatever you told your lawyer is privileged unless you personally choose to reveal it.

A.  I have no problem revealing.

Mr Winter, QC then asked:^[5]

MR WINTER: Are you waiving your privilege over what you told your lawyer?

A.  Yes, I’m waiving it.

There was a further exchange and then Mr Winter asked:^[6]

MR WINTER: Madam Chan, are you sure you are waiving your privilege over your instructions to and advice from your lawyer in respect of your arrest, are you?

A. What does that mean, my Lord?

COURT: Well, waiving the privilege, that’s lawyer-speak for giving up your right to absolutely confidentiality of what passes between you and your lawyer.

A. Well, I said what I said just now.

COURT: Yes.

9.Ms Chan was then asked whether she asked the ICAC to be treated as a witness.^[7]  She said that she did not.  She was then asked whether the ICAC approached her to be a witness.  Her answer was as follows:^[8]

A. They approach me and -- yes, they approach me and want me to be a witness.  I'm not a Crown witness, for your information, I know you are trying to incriminate me, but I am not, I am a witness.

A great deal later in her testimony, after multiple references to the phrase “Crown witness”, it became obvious that what Ms Chan was referring to so far as that was concerned was a witness who gave testimony in exchange for some form of immunity.^[9]  It became obvious that she distinguished this from merely being a witness.

10.In cross-examination, Ms Chan faced accusations of various aspects in which she had lied in the course of her testimony.  She was asked about the issue of giving a witness statement to the ICAC.^[10]  Ms Chan was questioned about the fact that she had a number of meetings she had with the ICAC.  It was alleged in cross-examination that she “brokered” the deal with the ICAC.^[11]  This was vehemently denied.

11.The topic of the dealings by Ms Chan with the ICAC arose later in the cross-examination.  In the course of that Ms Chan reiterated her position that she wished to tell the ICAC everything but that her lawyer had advised her not to do so and she followed that advice.[12]  Mr Winter, QC then asked her a series of questions based on a document in his possession. The questions related to a series of attendances at the ICAC in February and April 2011, the thrust of which was to assert that her discussions with the ICAC started long before October 2011.[13]  Ms Chan repeatedly put the proposition in answer to questions that she did not “trade” with the ICAC.[14] Further questions were asked about a solicitor’s account from K & L Gates to Ms Chan in relation to the dates of her dealings with the ICAC.[15]  The solicitors account apparently referred to drafting statement.[16]  Ms Chan told the Court that this concerned her answers to the questions that the offices of the ICAC had put to her when she was questioned under caution (and which she declined to answer such questions).

12.The matter was picked up in re-examination of Ms Chan by the prosecutor. She took Ms Chan through a series of documents and correspondence from Ms Chan’s solicitors and the ICAC. The point being made in these questions was there was nothing in the content of this material which suggested the proposal of a deal between Ms Chan and the ICAC. There were further exchanges about a meeting in the offices of Ms Chan’s solicitors.  The re-examination then moved to a letter sent by Ms Chan.  She was asked by the prosecutor what her motivation was in sending the letter. We then see the following exchange:^[17]

Q.  What was your intention in giving this information to the ICAC?

A.  My intention was because during the interview my lawyer Stephen Lo doesn’t allow me to talk, even in our private meetings I said I wanted to talk, he doesn’t allow me.  I said, “Why?”  He said, “It’s for your protection”.  I said, “I don’t need protection, I’m clean”, I said.  

But -- so in the end I took it his advice, I kept silent, but I really regretted it, so I asked him to call back the ICAC.  That was the intention. I want to -- because, you know, when you remain silent they still ask the question and recorded it in writing, right, so I have the questions in front of me, so I was just answering to the question they asked me. 

13.The critical component of the exchange is that there is a continued reference by Ms Chan to the advice given to her by her solicitor in relation to the first interview by the ICAC where Ms Chan had declined to answer questions on the advice of that solicitor.  A little later on in re-examination she confirmed that there was no suggestion from her solicitor that she become a witness at this stage.^[18]

14.Ms Chan told the Court that she refused the offer by the ICAC of further bail.  For all practical purposes, this forced the ICAC to decide whether to charge Ms Chan or let her go without charge.  The ICAC chose the latter course.  There was also the series of communications with the ICAC over whether Ms Chan could get her passport back because she wished to travel in the course of her business. She then testified that it was the ICAC who asked her to become a witness and she acceded to that proposal.[19]

ISSUES FOR CONSIDERATION

Application for summons for documents

15.Counsel for the 2^nd Accused has applied for a witness summons directed at the partners of K & L Gates for:

Documents to be produced: all communications (i) between Ms Chan and lawyers at K&L Gates and between K&L Gates and the ICAC during the period from 16 December 2010 (when Ms Chan was arrested by ICAC) and the date when she formally became a prosecution witness; and (ii) all records of meetings between Ms Chan and lawyers at K & L Gates, and/or all material recording the instructions she gave and the advice that she was given during that period, in relation to or connected with Ms Chan’s arrest by the ICAC on 16 December 2010 and/or her becoming a prosecution witness.

16.Counsel for the 2^nd Accused made submissions in support of that application.  Given Ms Katherine Chan’s interest in the matter, the Court directed that she be informed of the hearing on that date and that should she wish to do so, she could attend herself or through counsel representing her.  In the result, she attended herself. At that hearing, the Court asked Ms Chan what her position was. She said that she did not wish to waive her privilege.  She told the Court that at the hearing when the matter was first raised she was confused about what rights she had and what rights she was being asked to waive.  Mr Winter QC read out the relevant passages from the transcript and the Court asked her what her position was.  She said:^[20]

“… I was only talking about my lawyer told me not to say anything, I wanted to answer every question that the ICAC has…”

17.A little later on in the hearing, she asserted that she was only waiving her privilege in relation to this topic.^[21]  She then said that she did not understand what “legal professional privilege” was.  Ms Chan asserted that she should have been given legal advice.  The Court asked her to explain what she meant by getting legal advice, Ms Chan replied:^[22]

“…I should have been given the opportunity to seek independent legal advice rather than have Mr Winter force on me and say I have waived my legal professional privilege. Even after your Lordship, you explained to me, I was thinking, and that’s why I answer, ‘Well, I said what I said’, meaning I already said those two sentence. I thought just by saying those two sentence:

“I told my lawyer [told me not to say anything]

‘I want to answer every question’.”

I was referring to those two sentence[s].  But they made the conclusion I gave this waiver already.  I was not.  I didn’t understand what it is.  If I had understand, I would not have asked your Lordship, ‘What does that mean?’

That’s my explanation.”

Principles

18.Legal professional privilege attaches to confidential communications between lawyer and client made for the purpose of giving or receiving legal advice or for use in existing or anticipated litigation.^[23]  The law concerning legal professional privilege is no mere rule of evidence.  In R v Derby Magistrates’ Court, Ex parte B [1996] AC 487 it was observed:^[24]

“Legal professional privilege is thus much more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests.”

Article 35 of the Basic Law enshrines the right to confidential legal advice. In Solicitor v Law Society of Hong Kong (2006) 9 HKCFAR 175, Bokhary PJ made the point that this underlines the proposition that the Courts must always be vigilant to accord proper protection of the right. ^[25]  The privilege is absolute and, if it is established, it yields to no competing interests such as, for example, the interests of justice.^[26]

19.In the present case, the competing interest asserted is the interest in knowing whether or not Ms Chan came to an arrangement with the ICAC whereby she received a benefit for giving witness statements and, giving witness statements in the form that she did. On any view, the authorities are plain as to the interests at stake.^[27]  Any benefit accorded to Ms Chan by the ICAC would be subject to disclosure.^[28] While disclosure is a constitutionally-protected right accorded to an accused person as part of fair trial rights, as I understand the authorities, it must yield to legal professional privilege.

20.Legal professional privilege may be waived by the person in whom the privilege is vested. Because of the fundamental and constitutionally-protected nature of the privilege, in determining whether or not there has been waiver if there is any doubt about whether there was any waiver of the privilege, the question should be resolved in favour of upholding the privilege: Goldlion Properties Ltd & Ors v Regent National Enterprises Ltd [2006] 1 HKLRD 793, §31. In Citic Pacific Ltd v SJ, Hartmann JA (as Hartmann NPJ then was) observed in this regard:^[29]

“That being the case, it seems to me to be inherently contradictory to say that privilege, although a fundamental human right unassailable to competing issues of public interest, may nevertheless be lost in criminal matters without any intention on the part of the holder, indeed on no more than a whim of fate; that is, by accident or inadvertence, or even (at the outer extreme) by the surreptitious conduct of a third party. I do not accept that the Basic Law affords such frail protection. I am satisfied that, in both civil and criminal matters, privilege is not lost unless there is evidence that it has been intentionally waived by the holder of that privilege.”

21.Waiver may be expressly done or may be implied. It may also be a partial waiver.^[30]  In Citic Pacific Ltd v SJ, Hartmann JA held that evidence of the intention to waive privilege may be inferred from all the circumstances.  He did say that waiver would not be lightly inferred.^[31]  He also held that whether there had been a full or partial waiver was to be determined by reference to all the circumstances of the alleged waiver, in particular what was expressly or impliedly communicated between the person sending and the person receiving, the documents in question, and what they must or ought reasonably to have understood.^[32]  

22.As far as I can see, none of the authorities explicitly suggest a standard of proof for facts which might establish waiver.  Certainly, the burden of proof must be on the party which asserts the waiver.  As to standard of proof, I consider that requiring proof on the balance of probabilities is consistent with the principles outlined in the authorities.  The application of such a standard was considered in criminal proceedings albeit in a different context in HKSAR v Lee Ming Tee & Securities and Futures Commission (Third Party) (2003) 6 HKCFAR 336.  In that case, Mason NPJ observed:^[33]

“It is not in dispute that the civil standard was applicable and that the civil standard of proof on the balance of probabilities calls for a degree of satisfaction which varies according to the gravity of the fact to be established. The principle is that in a civil case, even a civil case involving allegations of the commission of a criminal offence, the tribunal of fact must be reasonably satisfied of the fact sought to be established, having regard to the gravity of what is sought to be established, though not with the degree of certainty which is indispensable in criminal proceedings…”

That approach is apt given that the effect of a determination that there has been a waiver of legal professional privilege or an aspect of it is to diminish a fundamental and constitutionally-protected right.  The “gravity of what is sought to be established” relates to the proof of facts which may establish the waiver of legal professional privilege.

Evaluation

23.The principles which have been articulated as to the nature of legal professional privilege and the circumstances in which it can be waived.  The standard of proof for waiver is stringent. There can be no doubt that but for an express or implied waiver which may have occurred, that any communications between Ms Chan and her legal advisers for the purpose of seeking and giving legal advice on the matters involving and consequent on her arrest on serious criminal allegations would be subject to the privilege.

24.Counsel for the 2^nd Accused argues that there has been complete waiver.  In this regard, Mr Winter, QC contends that the affirmative answer by Ms Chan to the question “Madam Chan, are you sure you are waiving your privilege over your instructions to and advice from your lawyer in respect of your arrest, are you?”[34]  makes the waiver as to legal advice sought and legal advice given in relation to criminal matters consequent on the arrest of Ms Chan until the decision to give a statement (or statements) to the ICAC is a complete waiver.  It is to be noted that her response to this question following an intervention by the Court was “Well, I said what I said just now.” [35]  That answer itself calls for evaluation.

25.When Ms Chan appeared as an interested party in the hearing to determine whether to grant the summons to seek privileged materials from her former solicitors, her position was:

(1)  legal professional privilege was only waived in relation to the advise in connection with the interview under caution by the ICAC with Ms Chan;

(2)  she did not waive her legal professional privilege at all because in the urgency of the situation she did not fully appreciate what was going on; and

(3)  (connected to (2)) she should have been accorded the opportunity to obtain legal advice as to whether or not to waive her privilege.

26.In my opinion, the stance adopted by Ms Chan in the hearing to determine whether to issue the summons is inherently contradictory.  On the one hand she asserts only a limited waiver and on the other hand she asserts she did not fully appreciate what was going on and, accordingly, there was no effective waiver at all.  The evaluation of these circumstances starts with the advantage that the Court has having seen Ms Chan testify for many, many days.  On any view, she is an intelligent, articulate woman well-versed in business affairs and, in particular, the business affairs of listed companies.  While, as far as I can tell, she has only been the executive director of one listed company - 462, she has long been licensed by the Securities and Futures Commission in connection with listed companies and their obligations.  It follows from that and it was apparent in relation to her dealings concerning 462 that she was well acquainted with the importance of legal advice. In my judgement, given her strong and articulate responses to questioning in the course of her testimony and, particularly, under a searching cross-examination on the part of Mr Winter, QC, the proposition that she did not appreciate what she was doing or saying is not one that I can, for present purposes, accept.  All of that said, it is important to remember that the jury may, in due course, have to evaluate the testimony of Ms Chan in relation to a wide variety of matters highly critical to the issues which arise on the trial of the indictment.  Nothing in my limited evaluation for the purposes of these proceedings should in any way detract from the primacy of their position.  It is conceivable that I may have to undertake some evaluation of the testimony of Ms Chan in the event that there is a submission of no case to answer. Again, the danger of anyone inferring my attitude to Ms Chan as a witness of truth from my limited determination here would be, to put it bluntly, a fool’s errand.

27.Applying what I consider to be the appropriate standard of proof, the practical choice, so it seems to me, is between a full waiver and a partial waiver.  In this regard, the strictures articulated by Hartmann JA in Citic Pacific Ltd v SJ (above) must not be ignored. Of all cases, this is the case where context is everything and the passage I have cited from the exchanges between Mr Winter, QC and Ms Chan to paragraphs above cannot be taken from their context.  It immediately followed discussions about the conflict between Ms Chan and her legal advisers over the issue of what she should say in the interview under caution conducted by the ICAC shortly after her arrest.  It seems to me that the inescapable conclusion is that when she said what she said to Mr Winter, QC, she was referring to that context and conceding nothing further.  When Mr Winter, QC put the question which invited a more general waiver, her answer was, as I have noted “Well, I said what I said just now.”  What she had said “just now” could be said to be the limited waiver.  After careful reflection, I cannot interpret it as Ms Chan acceding to the broader waiver that Mr Winter, QC by his question sought.

28.I recognise that further questions were asked in cross-examination and in re-examination and that it is conceivable that that might weaken the conclusion I have just expressed.  However, the strictures articulated by Hartmann JA underline the care and restraint that I must adopt in evaluating the circumstances to determine whether there has been an express or implied waiver of legal professional privilege.  The same restraint must be applied in determining the extent of the implied waiver.   There was such a waiver. It was a limited one.

CONCLUSION

29.Accordingly, I would be prepared to accede to a documentary summons on the basis that Ms Chan expressly gave a limited waiver of legal professional privilege in connection with the legal advice sought by her and tendered to her in relation to the interview under caution between her and the ICAC.

30.In my opinion, the terms of the summons proposed would have to be amended both as to the timeframe and as to scope.  As presently drafted, the summons is in any event to wide and must be focused only to material evidencing communications between Ms Chan and her legal advisers in which she either seeks legal advice or legal advices is given to her.

Ms Charlotte Draycott, SC leading Mr Li Chun Ngai Martin, on fiat and Miss Ng Oi Lam, Joycelyn SPP of the Department of Justice, for HKSAR

Mr Tim Owen QC leading Mr Tsoi Y M Benson, instructed by Boase Cohen & Collins, for the 1^st accused

Mr Ian Winter QC leading Mr Cao Yuan Shan and Ms Chiu Betty instructed by Haldanes, for the 2^nd accused

Mr David A S Khosa, instructed by Hobson & Ma, for the 3^rd accused