Shuntak Holdings Ltd and Others v. The Commissioner of Police

HCMP001367/1994

THE JUDGE HAS AUTHORISED PUBLICATION OF THIS JUDGMENT

H E A D N O T E

Criminal law and procedure - judicial review - search warrant under section 50(7) of the Police Force Ordinance Cap 232 - issues relating to Legal Professional Privilege ("LPP");

(1) Does LPP apply at issue and execution stage?
HELD: Yes, declining to follow Diplock L.J. in Parry Jones v Law Society [1969] 1 Ch 1 and following, inter alia, Baker v Campbell [1983] ALR 385;

(2) Has section 50(7) of the Police Force Ordinance Cap 232 abrogated the common law rule held to exist under (1) above?
HELD: No;

(3) Was the warrant bad on its face because it did not exclude documents covered by LPP?
HELD: No;

(4) Has the court the jurisdiction to inspect disputed documents to ascertain whether claims to LPP are good and not overridden?
HELD: Yes;

(5) Should the court exercise its discretion to look at the documents for itself?
HELD: Yes, because
(a) Claim to privilege somewhat vague and uncertain;
(b) There was some material which raised some suspicion that some of the documents might have come into being in the course of a criminal activity;
(c) Public interest required that the courts should look at the documents rather than leave the final decision to the solicitor for the applicants and another solicitor against whom an allegation had been made.

(6) The court would inspect and if of the view that any documents were liable to production would give applicants an opportunity to appeal before ordering production;

(7) The court will inspect on its own without assistance from the prosecution;

(8) The court will render a short supplemental judgement when it has inspected the documents.

1994 MP No. 1366 and 1367

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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[IN THE MATTER OF an application by Shun Tak Holdings Limited & Others for Judicial Review under Order 53, rule 5, Rules of the Supreme Court]

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Coram: The Hon. Mr. Justice Kaplan in Chambers

Dates of hearing: 20 and 21 July 1994

Date of handing down judgment: 27 July 1994

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J U D G M E N T

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1. I have before me an application for judicial review brought with the leave of Mayo J. He also ordered that this matter be heard in Chambers because of commercial sensitivity factors but, because this matter raises some points of public importance, I have decided to give permission for this judgement to be published.

2. The point at issue in a nutshell is whether or not the well known principles of Legal Professional Privilege ("LPP") apply at all to the issue and execution of a search warrant granted pursuant to the terms of section 50(7) of the Police Force Ordinance Cap 232.

3. It appears that section 50(7) has been part of the Ordinance for some considerable time and probably since the Ordinance was first introduced in 1948. Amendments were made to subsection 7 in 1992; it is common ground that these are immaterial to the issues I have to decide.

Section 50(7) provides as follows:

"Whenever it appears to a magistrate upon the oath of any person that there is reasonable cause to suspect that there is in any building, vessel (not being a ship of war or a ship having the status of a ship of war) or place any newspaper, book or other document, or any portion or extract therefrom, or any other article or chattel which is likely to be of value (whether by itself or together with anything else) to the investigation of any offence that has been committed, or that is reasonably suspected to have been committed or to be about to be committed or to be intended to be committed, such magistrate may by warrant directed to any police officer empower him with such assistants as may be necessary by day or by night -

(a) to enter and if necessary to break into or forcibly enter such building, vessel or place and to search for and take possession of any such newspaper, book or other document or portion of or extract therefrom or any such other article or chattel which may be found therein, and

(b) to detain, during such period as is reasonably required to permit such a search to be carried out, any person who may appear to have such newspaper, book or other document or portion thereof or extract therefore or other article or chattel in hispossession or under his control and who, if not so detained, might prejudice the purpose of the search." [emphasis added]

4. The Financial Secretary appointed Mr John Lees, Chartered Accountant, to investigate the affairs of The World Trade Centre Group and in due course, Mr Lees presented his report to the Financial Secretary.

5. Pursuant to a search warrant issued under section 50(7) of the Police Ordinance Cap 232 by Mr Hugh Sinclair, Magistrate, officers of the Commercial Crimes Bureau ("CCB") began to execute the warrant at the premises of Shun Tak Holdings Limited on 30th March 1994 ("the Company").

6. In MP 1994 No. 1366, the 1st, 2nd, 3rd, 4th and 7th Applicants are all Directors of the Company. The 5th and 6th are senior managers of the Company. In MP 1994 No.1367, the Company is the sole Applicant.

7. During the course of the execution of the search warrant, solicitors from Herbert Smith and from Johnson Stokes & Master represnting respectively the individual Applicants and the Company attended at the Company's premises and made a claim that some of the documents which the police officers were gathering together pursuant to the warrant were documents covered by LPP. To cut a long story short, these documents were sealed into 8 packages and have, quite sensibly, been detained by the CCB to enable the Applicants to make this application. The grounds of both applications are that the documents are and were at material times subject to LPP. Mr Schapel for the Crown submitted that I should not be satisfied that the claim for LPP has been made out; first, because of the vague way in which it is alleged the claim for LPP has been made and second, because in the light of other documents taken from Mr Tam when he was arrested, there is a suspicion on the part of the police that these documents, or some of them, may have come into being in the course of furtherance of criminal activity. In all the circumstances, Mr Schapel invites me to inspect these documents and to decide whether the claim for LPP has been made out or is overridden. Initially, he suggested that if I were persuaded to look at these documents,

8. I should do so in conjunction with himself and an officer from the CCB, so that they could assist me. I have no hesitation in rejecting that submission; it would be absurd if the prosecuting authorities could look at these documents in the course of the Judge's consideration whether they should or should not be allowed to see them at all. Just as in cases involving Public Interest Immunity ("PII"), should the Judge decide to inspect the documents, the Judge should look at those documents on his own, without assistance from the party who wishes production of those documents even though that party may well have a better idea than the Judge whether the documents are essential to his case. It seems to me that if I am permitted as a matter of law to look at these documents and if it is appropriate for me to look at them, then I must do this on my own without the benefit of assistance from either party and the Crown will just have to accept that a Judge of the High Court has done his best to take all relevant matters into account when deciding whether production should be allowed.

9. Mr Huggins QC, Counsel for the Applicants, has submitted that the claim for LPP has been made in proper form and should be accepted at face value and that in those circumstances, I should resist the temptation to take a "judicial peep", to borrow a phrase from Lord Edmund Davies in Burmah Oil v Bank of England [1980] AC 1090.

10. Both sides have agreed that if I am persuaded to look at these documents, then the following procedure should be adopted. If having looked at the documents, I am satisfied that the claim to LPP has been made good, then I must grant the relief sought. If, on the other hand, all or some of the documents are, in my judgement, liable to be produced then, having identified them, I should not at that moment order production until such time as the Applicants have had an opportunity of considering whether they wish to take the matter further and, if so, inviting me to stay production until after an appeal: see Sankev v Whitlam 53 ALJR 11 at 23 and Burmah Oil supra at p.1146.

Legal Professional Privilege ("LPP")

11. It has long been recognised that it is in the public interest for persons to be able to communicate freely and confidentially with their legal advisers without fear that such communications will at some future stage be disclosed to third parties and perhaps used against their interests. As Wilson J. put the matter in Baker v Campbell [1983] ALR 385 at 415:

"It may be accepted that the basic reason why the law has come to respect professional confidences between lawyer and client is the belief that in so doing the client will be encouraged to be entirely open and candid in telling his story to his lawyer - to bare his breast to his lawyer as Sir George Jessel MR said in Anderson v Bank of British Columbia (1876) 2 ChD 644 at 649. Conversely the cloak of secrecy may encourage the lawyer to be completely frank in the expression of his advice."

12. Originally this doctrine was founded on confidentiality but by the time of the Duchess of Kingston's case (1776) 20 State TR 355, the public interest became the reason for the rule. By 1833, in Greenhough v Gaskell (1833) 1 MY&K 98 at 103 and 39 ER 618 at 621, Lord Brougham was able to say:

"It is evident that the rule which protects from disclosure confidential communication between solicitor and client does not rest simply upon the confidence reposed by the client in the solicitor .. but upon the necessity of carrying it out."

For further references to the cases dealing with this aspect of the privilege, one can do no better than refer to the speech of Lord Simon of Glaisdale in D v NSPCC [1978] AC 171.

13. It is clear that the law relating to LPP has developed considerably this century. Whereas originally the privilege was thought to apply to matters relating to litigation, it is now clear that it also relates to the furnishing of legal advice: see Balabal v Air India [1988] 1 Ch 317. As is made clear in the notes to Order 24 rule 5 of the Rules of the Supreme Court (Annual Practice page 443):

"Letters and other communications passing between a party or his predecessors in title, and his, or their solicitors are privileged from production, provided they are, and are sworn to be, confidential and written to, or by, the solicitor in his professional capacity and for the purpose of getting legal advice or assistance to the client."

14. It has long been recognised that this privilege is that of the client and not of the solicitor and, of course, it is open to the client to waive the privilege. It has also long been recognised that LPP does not extend to cases where the document came into existence as a step in a criminal or illegal proceeding, such as where a solicitor is consulted on how to carry out an illegal act (see R v Cox & Railton (1884) 14 QBD 153; Bullivant v Att. General for Victoria (1901) AC 196; Butler v Board of Trade [1971] Ch 680).

Does Legal Professional Privilege apply to section 50(7) of the Police Force Ordinance Cap 232?

15. The crucial issue which I have to decide is whether LPP has any relevance in the context of proceedings other than those of a judicial or quasi-judicial nature; ie does it apply to the issue and execution of search warrants pursuant to section 50(7) of the Police Force Ordinance Cap 232. Mr Schapel, who appears for the Crown, submitted that this issue has not been decided in relation to this section. He submitted that the decision of Sears J. in Re Ip and Willis [1990] 1 HKLR 154 was a decision based upon section 10b of the Independent Commission against Corruption Ordinance Cap 204, section 18 of which provided:

"Nothing in this Ordinance shall prejudice any claim to privilege which any person may have at common law or other thing made or given to a solicitor or counsel."

16. Similarly, in Re an application for Judicial Review by a firm of Solicitors [1990] 2 HKLR 146, a search warrant had been issued under section 17 of the Prevention of Bribery Ordinance Cap 201 and in that case, the warrant was specifically limited to "documents used in the commission of a criminal offence" to which, as I have made clear, privilege would not apply in any event. I was also referred to section 10 of the Police and Criminal Evidence Act in England ("PACE") which expressly obliges a Justice of the Peace to consider the issue of privilege when issuing a search warrant.

17. Mr Schapel submitted that none of these sections which deal specifically with LPP shed any light on the construction of section 50(7) of Cap 232 which is distinguishable, so he submitted, from such other legislation.

18. Mr Schapel further submitted that the position in the United Kingdom in respect of privilege affecting the issue and execution of search warrants before PACE was not clear. He cited Parry-Jones v Law Society [1969] 1 Ch 1 where Lord Justice Diplock (as he then was) said at page 9:

"So far as Mr Parry-Jones' point as to privilege is concerned, privilege, of course, is irrelevant when one is not concerned with judicial or quasi-judicial proceedings because, strictly speaking privilege refers to a right to withhold from a court, or a tribunal exercising judicial functions, material which would otherwise be admissible in evidence."

19. Mr Schapel submitted that this description of the proper context of LPP at common law was correct. If it was, then the question of LPP at the issue and execution stage of this warrant would be irrelevant but that would not mean that the documents could be introduced into evidence because they were protected by LPP unless they came into existence in the course or furtherance of a criminal activity. In essence, what Mr Schapel submitted was that police could execute a warrant without regard to LPP and make such use of any LPP documents they discovered for the purposes of their investigation but that they could not introduce those documents into evidence. Put slightly differently, these documents would direct them in their inquiries and encourage them to prove the contents of the documents by other admissible evidence.

20. In support of his submissions, Mr Schapel relied heavily on the wording of the subsection, namely, "which is likely to be of value ... to the investigation of any offence that has been committed."

21. Mr Huggins QC recoiled in horror at this submission. He asked, rhetorically, what would prevent the Police from seeking and executing a warrant for production of an accused person's proof of evidence and using the knowledge thereby obtained to their advantage. Mr Schapel's answer to this was that it would be unlikely that a magistrate would grant such a warrant, particularly because it would not assist the investigation as that would have been completed by the time the accused had been charged. I have to say that I was neither convinced not comforted by Mr Schapel's answer. In a sense, he seemed to be making a circular argument. He was trying to persuade me that LPP was irrelevant at the issue stage but then when pressed as to why a warrant would not be sought to search counsel's chambers or a solicitors office, he was forced to contend that it was unlikely that a magistrate would issue such a warrant because of the nature of the premises to be searched. However, if I were to find for Mr Schapel on this point, there would be a decision of this court binding upon the magistrate to the effect that LPP was irrelevant at that stage. I must confess to considerable unease at being forced to conclude that a magistrate must ignore LPP and that it is wholly irrelevant at the search stage. There would be grave danger in whittling down important individual freedoms and privileges if this were to be the law.

22. It has to be said that the observations of Diplock LJ in the Parry-Jones case supra have come in for some considerable criticism by the High Court of Australia in Baker v Campbell supra. Although Diplock LJ's observations had been approved in various Australian decisions, nevertheless Dawson J. in Baker v Campbell pointed out that the Parry-Jones case was "slender authority for the proposition that LPP is relevant in only judicial or quasi-judicial proceedings." Dawson J further pointed out:

(1) The matter was not argued at length;

(2) It was argued by the appellant in person;

(3) The decision was not reserved;

(4) The observations were clearly obiter,

(5) The point involved was whether a solicitor was obliged to produce for an investigation by the Law Society documents relating to his practice as a solicitor.

Lord Denning in Parry-Jones held that the rules overrode any privilege which might have subsisted between solicitor and client but did not deal with the issue of whether, apart from the rules, the solicitor was entitled to claim privilege for any documents.

23. I do not propose to set out all the cases which have followed Parry-Jones and those which have not, because they are all set out in the various judgements in Baker v Campbell supra. However, it appears to me that the issue whether this observation of Diplock L.J. was correct is at the heart of the matters I have to decide in this application.

24. Mr Huggins, QC submitted that the authorities in common law jurisdictions speak with one voice as to whether LPP applies outside the court. In Australia, Baker v Campbell supra and Amo v Forsyth [1986] 65 ALR 125 strongly support this proposition. In New Zealand, in Rosenberg v Jaine [1983] NZLR 1 it was held that the relevant statutory provision authorising the issue of a warrant did not abrogate the common law rule of LPP. As Murphy J. pointed out in Baker v Campbell, courts in Canada "have strongly asserted that the privilege is not restricted to judicial or quasi-judicial proceedings": see Descoteaux v Mierzwinski (1982) 141 DLR (3d 590). In the United States of America, Borrows v Superior Court (1974) 529 P. (2d 590 at 598) and O'Conner v Johnson (1979) 287 NW (2d 400) have asserted the privilege against extra judicial searches and seizures.

25. It is also worth noting the decision of the European Court in European AM & S Europe Limited v Commission of the European Community [1983] 3 WLR 17. The report to the court of the Advocate-General, Sir Gordon Slynn (as he then was), contains a summary of the laws of Member States in relation to LPP. Although there are, of course, significant differences between the law of member states about the scope of LPP, nevertheless, there is a common thread which shows that the doctrine of LPP extends to protect privileged documents from production or seizure in the course of administrative enquiries as opposed to being restricted, as would have Diplock LJ, to judicial or quasi-judicial proceedings. As Sir Gordon Slynn stated:

"There exists in all the member states a recognition that the public interest and the proper administration of justice demand, as a general rule, that a client should be able to speak freely, frankly and fully to his lawyer."

26. I am quite satisfied that at common law the question of LPP is relevant at both the issue and execution stage of the search warrant and that this conclusion is fully consistent with authority in other common law jurisdictions. One of course gives weight to any observation falling from Lord Diplock at any stage of his illustrious career but, on this occasion, I am satisfied that "Homer has nodded". In the circumstances, therefore, I do not propose to follow his obiter dictum in Parry-Jones.

27. I now turn to consider whether the terms of section 50(7) of the Police Force Ordinance have expressly or impliedly abrogated the common law rule which applies the doctrine of LPP at the stage of the issue and execution of a search warrant.

28. Mr Schapel submitted that there was great significance in the fact that whereas the Independent Commission against Corruption Ordinance expressly maintains LPP, the Police Force Ordinance is significantly silent.

29. In my judgement, this submission can be disposed of in the following manner. When the legislature enacted section 50(7) in 1948 and amended it in 1992, they must have had in mind that the doctrine of LPP was firmly entrenched in our law. They must have been aware that the doctrine was one which had been developed over the years and had been held to be in the public interest to maintain.

30. I cannot bring myself to conclude that by enacting this section, the legislature in Hong Kong intended to abrogate this doctrine which for years has been held to be fundamental to a proper administration of justice. It seems to me that if that was the intention of the legislature then, in the light of the way in which this doctrine has been developed and the importance attached to it, they would have expressly stated that in Hong Kong, at least, it was not to apply other than in the courtroom. I am quite satisfied that the legislature did not intend to abrogate the rule and that the law of Hong Kong accords with the law of the other major common law jurisdictions to which I have made reference, which of course includes the United Kingdom, where the matter has been put beyond any question since the enactment of section 10 of PACE.

Is the warrant invalid because on its face it failed to exclude documents and records protected by LPP?

31. This point was faintly taken by Mr Huggins QC because there are obvious problems with it. It is true that in Re Ip and Willis supra, the warrant was set aside but this was because section 18 of the Independent Commission against Corruption Ordinance Cap 204 expressly preserved LPP in relation to search warrants issued under that Ordinance. No such restriction applies here. Further, it would be impossible for the magistrate to know in advance whether LPP was correctly claimed or whether, in the circumstances of any particular case, it had been overridden. Further, the privilege may not be that of the party under investigation. A third party may be perfectly prepared to waive the privilege. In my judgement there is nothing in this point and the warrant is not bad simply because it fails to exclude documents which may be covered by LPP.

Can and Should the court look at the documents to see whether the claim to LPP is well founded?

(i) Can the court look?

32. Both counsel are agreed that the court has jurisdiction to look at documents; the only real issue, is whether, given the circumstances of this case, it would be proper to exercise that right. In R v Govemor of Pentonville Prison, ex parte Osman (1989) 2 All ER 701, Lloyd J. (as he then was) at p.730 said this:

"On the contrary, we would be inclined to go further than the magistrate on the second ground, since as at present advised we can see no objection to the magistrate looking at the documents, if necessary, in order to determine if they came into existence in furtherance of a criminal purpose. Indeed, Stephen J. in R v Cox and Railton (supra) appears expressly to contemplate the court looking at matters "proposed to be given in evidence". We were unable to follow the suggested distinction between public interest privilege and legal professional privilege in that connection."

33. In Grant v Downs [1976] 135 CLR 674 at 689, Stephen, Mason and Murphy JJ put the matter thus;

"He may succeed in achieving this objective [successfully claiming LPP] by pointing to the nature of the documents or by evidence describing the circumstances in which they were brought into existence. But it should not be thought that the privilege is necessarily or conclusively established by resort to any verba formula or ritual. The court has power to examine the documents for itself, a power which has perhaps been exercised too sparingly in the past, springing possibly from a misplaced reluctance to go behind the formal claim of privilege. It should not be forgotten that in many instances the character of the documents the subject of the claim will illuminate the purpose for which they were bought into existence"

34. See also NCA v S [1991] 100 ALR 151. I am perfectly satisfied that I have power to inspect these documents.

(ii) Should I inspect the documents?

35. In many respects, this was the most contentious part of the application. Mr Huggins QC submitted that the claim for privilege had been made in the proper form in the first affidavit of Mark Douglas Johnson, a partner in the firm of Herbert Smith. I set out the relevant part of paragraph 13 of Mr Johnson's affidavit sworn on 31 May:

"As stated therein legal professional privilege is claimed on the basis that all the documents fall into one or more of the following categories:-

(a) correspondence between the Applicants on the one hand and Herbert Smith on the other for the purpose of giving or obtaining legal advice;

(b) correspondence between Mr Ambrose So (the 4th Applicant) and Mr Andrew Tse (the 7th Applicant) of Shun Tak on the one hand and Mr Anthony Carter (a Hong Kong practising solicitor) on the other for the purpose of giving or obtaining legal advice on their behalf or on behalf of Shun Tak;

(c) correspondence between Herbert Smith and third parties (including Mr Anthony Carter and overseas professional advisers) in contemplation of and/or for the purposes of giving advice in respect of legal proceedings;

(d) notes, documents and draft documents produced by the Applicants on the instructions of or for the submission to their legal advisers themselves, for the purposes of and in relation to contemplated proceedings or for the purposes of obtaining or recording such advice;

(e) correspondence between Shun Tak and third parties appointed on the instructions of Johnson Stokes & Master in the context and for the purposes of contemplated legal proceedings;

(f) documents relating to the provision of funds for the payment of legal fees and disbursements (and fees and disbursements of others associated with the exercise for preparation to contemplated legal proceedings)."

36. Mr Huggins QC submitted that I should approach the matter similarly to the way in which I would deal with the matter in relation to a claim of LPP in civil proceedings. He pointed out that in civil proceedings, if the claim to privilege is in proper form, the court will not usually go behind the affidavit in support. The position is made clear by observations of Lord Justice Jenkins in Westminster Airways v Kuwait Oil [1951] 1 KB 134 at 146 where he said in respect of RSC Order 24 rule 13:

"The question whether the Court should inspect the documents is one which is a matter for the discretion of the Court, and primarily for the Judge of first instance. Each case must depend upon its own circumstances; but if, in looking at the affidavit (and now the list of documents verified by affidavit), the Court finds that the claim to privilege is formally correct and that the documents in respect of which it is made are sufficiently identified, and are such that, prima facie, the claim for privilege would appear to be properly made in respect of them ... the Court should, generally speaking, accept the affidavit as sufficiently justifying the claim without going further and inspecting the documents."

37. This is of course a helpful passage which is set out on p.465 of the White Book. Nevertheless as the learned Lord Justice was at pains to make clear, the court has a discretion and in appropriate cases, where there is any doubt in the mind of the court, it can and should exercise that discretion.

38. I think that it is necessary for me to consider whether it is right that in criminal proceedings such as the present, the approach should be the same as in civil proceedings. Mr Schapel submitted that it should not and submitted that the rules in relation to discovery in civil cases are unhelpful. He pointed out that in civil cases, a claim of privilege in the context of discovery affects only the relationship of the parties to those proceedings. However, in the wider context of criminal investigations, the police have a statutory duty to prevent and detect crime and a statutory power to seize relevant evidence: see section 10b of Cap 232. It is because of this wider aspect of public interest that he submitted that the courts clearly have power to examine a claim of privilege and should not be over-timid in the exercise of such power. In cases where it is alleged or suspected that documents have come into being in the course or furtherance of a criminal activity, it is particularly important, he submitted, that the court should be prepared to see for itself whether such allegation is well founded rather than accept a statement on oath by a solicitor who might not be versed in the subtleties of criminal law or aware of the precise factual matrix against which the police investigation has to be judged.

(1) Has Mr Johnson made out a sufficiently clear case of LPP so as to render adjudicial peep quite unnecessary?

39. I have already set out the way in which Mr Johnson has made his claim for privilege. I think there is some force in Mr Schapel's criticism that the recital of the documents and the reasons for the claims for privilege are vague and uncertain. It is not entirely clear precisely on behalf of whom the claim for privilege is made in respect of each class of documents. Further, the fact that a claim for privilege was laid to a hotel bill of a Mr Anthony Carter, a Hong Kong solicitor living in California, does raise some query in my mind as to whether the claim for LPP does in fact cover all the documents which are the subject matter of this application.

40. I am satisfied that the court is not bound to approach this matter in precisely the same way as it would approach a claim to LPP in civil proceedings. I am quite satisfied that there is a wider public interest involved in the criminal context and that in any case where there is a reasonable doubt in the mind of the court, the court must and should exercise its right to inspect the documents to satisfy itself that the claim is well-founded.

41. Some assistance can be obtained by having regard to the approach of the courts to looking at documents in respect of which a claim for Public Interest Immunity ("PII") has been made.

The least favourable formulation is that of Lord Wilberforce in Burmah Oil Co. v Bank of England [1980] AC 1090 at 1117 where he said that it was not desirable for the court to inspect:

" ... except in rare instances where a strong positive case is made out, certainly not upon a bare, unsupported assertion by the party seeking production that something to help him may be found, or upon some unsupported - viz, speculative - hunch of its own."

42. Lord Edmund-Davies in the same case at p.1129 was of the view that a Judge should not call for production of documents for his private inspection if they are "'likely' to contain material substantially useful to the party seeking discovery". At p.1135, Lord Keith referred to:

"... situations where grave doubt arises, and the court feels that it cannot properly decide upon which side the balance falls without privately inspecting the documents."

Lord Scarman at p1145 said:

"Inspection by the court is, I accept, a power to be exercised only if the court is in doubt, after considering the certificate, the issue in the case and the relevance of the documents whose disclosure is sought."

43. As Lord Frazer pointed out in Air Canada v Sec. of State for Trade [1983] 2 AC 395 at 435:

"I do not think it would be possible to state a test in a form which could be applied in all cases. Circumstances vary greatly. ... The most that can usefully be said is that, in order to persuade the court even to inspect documents for which public interest immunity is claimed, the party seeking disclosure ought at least to satisfy the court that the documents are very likely to contain material which would give substantial support to his contention on an issue which arises in the case ..."

44. It seems to me that in the context of a criminal investigation where one has a clash between competing public interests namely, on the one hand investigation of criminal offences and, on the other, the maintenance of LPP, the courts should not be reluctant to examine the disputed documents themselves in order to carry out the necessary balancing exercise. This is not to say that in every case where LPP is raised, the court should embark upon inspection. But where in a case there is sufficient material to create in the mind of the court a feeling of unease, then the court should be prepared to inspect the disputed documents.

(2) Should the court inspect in order to determine whether any privilege is overridden by the fact that these were documents made in the course or furtherance of crime of fraud?

45. This issue arises in the following way. When Mr Tam was arrested on 24 December 1993, a handwritten note was found in his possession and later seized by police. It now appears as Exhibit RJS1 to the first affidavit of Detective Superintendent Rodney Starling of the CCB. It is clear from one page of these notes that a legal team was being set up to deal with various allegations which had been made and which no doubt had surfaced in the course of Mr Lees' inspection. At the top of one page of these notes, one finds the following:

"To set up a team to build up the file and write up the book of accounts and to decide what documents to be kept and what documents to be destroyed."

46. Mr Tam told the police that these notes were notes of a discussion about the World Trade issue in relation to the Shun Tak Group which said conversation took place in San Francisco. During this conversation, there was a lawyer present which Mr Tam told the police was Mr Anthony Carter.

47. In Mr Starling's first affidavit, he sets out what I might refer to neutrally as the background to this investigation. He ended his affidavit with a statement to the effect that the matters contained in his first affidavit were true to the best of his knowledge and belief. During the course of the hearing, I gave leave for Mr Starling to file a further affidavit in which he gave the general sources of the assertions of fact contained in his first affidavit. It is by reading Mr Starling's first affidavit and the notes taken by Mr Tam that lead Mr Schapel to submit that this material establishes that there was in existence a prima facie case of fraud and that there are reasonable grounds for believing that there has been an attempt to pervert the course of justice in respect of the investigation of that fraud. In those circumstances, he submits that the court is entitled to examine the documents to determine whether they were in fact made in the furtherance of crime or fraud.

48. Mr Huggins QC attempted to pull the rug from under Mr Schapel's feet by submitting that vast chunks of Mr Starling's first affidavit should be struck out on the grounds that they were inadmissible, irrelevant and/or oppressive within the meaning of RSC Order 41 rule 6 which provides that:

"The court may order to be struck out of any affidavit any matter which is scandalous, irrelevant or otherwise oppressive."

49. This submission is based upon Order 41 rule 5 which states that subject to certain other Orders which are not material:

"(1) an affidavit may contain only such facts as the deponent is able of his own knowledge to prove

(2) an affidavit sworn for the purpose of being used in interlocutory proceedings may contain statement of information or belief which the sources and grounds thereof"

50. Mr Huggins QC submitted that this was not an interlocutory hearing and that therefore the deponent could only speak as to matters within his own knowledge. Mr Schapel submitted that the information contained in Mr Starling's affidavit was not put forward to prove the truth of the contents because at this stage the court is not concerned with whether or not the applicants are guilty of any criminal activity. In relation to a written request from Herbert Smith seeking the source of some of the facts stated in Mr Starling's affidavit, Mr Schapel submitted that the Crown was not obliged to answer such questions at this stage because this would lead to an investigation as to the truth or otherwise of these assertions which is not the issue at this point in these proceedings.

51. I am not at all sure that it is possible with certainty to classify these proceedings as either interlocutory or final. In one sense, judicial review is a final detemnination of the issues between the parties. On the other hand, this application relates to the execution of a search warrant and raises issues as to privilege which are usually disposed of in interlocutory proceedings.

52. In my judgement, Mr Starling's affidavit was designed solely to give the court some indication of the factual matrix against which this investigation was being conducted. To require him to give evidence solely of matters within his own knowledge would, in the context of a criminal investigation at this stage, be somewhat futile. In his latest affidavit, Mr Starling has given the sources as best he can of the information provided to the court and I do not think it realistic for him to do more. Once it is accepted that Mr Starling is not putting forward the background to the investigation as confirmed facts but only as an outline of the parameters of the investigation, it seems to me that the criticisms are unfounded. If the criticisms were valid, it would make it virtually impossible for a senior police officer to give the court any assistance in circumstances such as these. I do not think that that can be the law. It is also significant that section 50(7) of the Police Force Ordinance Cap 232 refers to the concept of "reasonable suspicion" and that is all that Mr Starling has deposed to. When I examine the documents, I shall determine whether that suspicion was reasonable.

53. In the circumstances, therefore, I am not prepared to accede to Mr Huggins QC's application to strike out vast chunks of Mr Starling's affidavit. I accept that Mr Huggins QC and his clients are concerned lest these, as yet unproved, allegations should leak out, as is not infrequent in this jurisdiction. It is for this reason that Mr Justice Mayo ordered this application to he heard in Chambers and it is why I have been circumspect in setting out in this judgement the matters contained in

54. Mr Starling's affidavit. I am also satisfied that under RSC Order 63(4), any affidavit filed in these proceedings is not open to public scrutiny and I am sure that the prosecuting authorities can be trusted to abide by the confidentiality of this Chambers hearing.

55. In the light of the three sheets taken from Mr Tam, I am satisfied that it is appropriate for me to exercise my discretion to look at these documents and satisfy myself as to whether the claim for privilege is properly made and has not been overridden. I reject Mr Huggins QC's submission that I should not look at the documents because the Tam sheets do not tie up with or refer to the documents the subject matter of this application. I propose to satisfy myself as to whether there is any orany sufficient link between these documents. I am not at all surprised that the Tam documents themselves have excited police suspicion. It seems to me that it is in the public interest that the court should decide whether this suspicion is justified or not.

56. Another reason why I felt it appropriate to inspect the documents is this: it may well be that Mr Johnson believes that these documents have not come into being in the course or furtherance of a crime. However, it was not submitted to me that Mr Johnson was an experienced criminal practitioner and, being a partner in Herbert Smith, I would be surprised if he was. It may well be that Mr Johnson has not looked at these documents with the keen eye of a criminal prosecutor and he may not have been clear as to precisely what offences, if any, it could be said were supported by these documents.

57. It should also be noted that Mr Carter has sworn an affidavit to the effect that he has never advised any of the Applicants to destroy or fabricate evidence relating to this investigation or otherwise nor has he ever been a party to any discussion with these Applicants in which such matters were discussed. In the light of the Tam notes and the statement of Mr Tam to the police that Mr Carter was present at these discussions it would be quite absurd if, as Mr Huggins QC has submitted, I should allow Mr Carter to be the final arbiter of this dispute. It may well be that Mr Carter was not in any way involved but in the light of the circumstances of this case, it must surely be in the public interest for a Judge to satisfy himself that, in the light of these documents, this is indeed the case. When I have examined the documents and if there is nothing in them which involves Mr Carter, I will expressly so state in a supplemental judgement so that he is cleared from any complicity and any wrongdoing which may be said to arise from these documents. I would have thought that Mr Carter would have preferred it this way rather than the court declining to inspect and leaving in the minds of the Police a lingering doubt that all is not well.

58. I wish to make it clear than in coming to the conclusions that I have, I have taken into account all of Mr Huggins QC's comments about Mr Starling's first affidavit but have accepted it for what it is, namely no more than the background to this investigation from the standpoint of the police and that it has been provided simply for the assistance of the court.

CONCLUSION

59. For all the reasons which I have endeavoured to state in this judgement, I propose to inspect these documents at the earliest opportunity and I shall then render a supplemental judgement dealing with the question of production.

Representation:

Mr Adrian Huggins QC and Mr Johnny Mok instructed by Herbert Smith for the Applicants

Mr Anthony Schapel for the Commissioner of Police, the Respondent.