Rmbsa Corporate Services Ltd and Another v. Secretary for Justice

HCAL 57/2006

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST

NO. 57 OF 2006

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BETWEEN

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Before : Hon Hartmann J in Court

Dates of Hearing : 2, 3 and 7 August 2006

Date of Handing Down Judgment : 10 August 2006

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J U D G M E N T

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Introduction

1.In 2004, Hong Kong and the Philippines entered into an agreement for the provision of mutual legal assistance in criminal matters.  The domestic legislation governing that agreement is the Mutual Legal Assistance in Criminal Matters Ordinance, Cap.525 ('the MLA Ordinance').

2.Part III of the MLA Ordinance provides for requests made by Hong Kong or to Hong Kong for the search and seizure of material relevant to criminal matters.  In respect of requests made to Hong Kong, s.12(1) of the Ordinance states :

“(1) Where— 

(a) a criminal matter involving an external serious offence has commenced in a place outside Hong Kong;

(b) there are reasonable grounds to believe that a thing (including a thing belonging to a class of things) relevant to the criminal matter is located in Hong Kong; and

(c) an appropriate authority of that place requests the Secretary for Justice to arrange for the issue of a search warrant under this section in relation to that thing,

the Secretary for Justice may nominate in writing an authorized officer to apply to a magistrate for the search warrant so requested.”

3.In January 2006, Hong Kong received a request from the Government of the Philippines for assistance in connection with a criminal investigation into the possible payment of bribes to public officials, the bribes being paid to facilitate the construction and operation of a new terminal at the Ninoy Acquino International Airport in Manila.  The investigating authorities in the Philippines believed that corrupt funds may have been channelled through two companies incorporated in the British Virgin Islands : Jetstream Pacific Ltd and Mainland Global Ltd.

4.The investigating authorities had reason to believe that these two BVI companies had at all material times been administered in Hong Kong by a locally registered company which provided corporate and secretarial services.  The name of that company was Rmbsa Corporate Services Limited, the first applicant in this matter.

5.The Government of the Philippines sought the issue of a warrant under Part III of the MLA Ordinance so that material believed to be in the possession of Rmbsa Corporate Services concerning the two BVI companies, together with additional material relevant to the corruption investigation, could be seized.

6.Having considered the request, the Secretary for Justice, acting pursuant to his powers under s.12(1) of the MLA Ordinance, nominated Mr Tse Yuk Sing, an officer of the ICAC, to apply to a magistrate for the issue of a search warrant.

7.Prior to applying for the issue of the search warrant, the ICAC discovered that the business premises of Rmbsa Corporate Services was also the premises of a foreign law firm.  The sign in the reception described the firm as 'Romulo, Philippine attorneys at law'.  That law firm, the Hong Kong branch of a law firm in the Philippines, is the second applicant in this matter.

8.When the application for the issue of a search warrant was made to a magistrate on 7 April 2006, although nothing was said in the information itself, it is not disputed that the magistrate was informed that the premises to be searched 'included' the premises of a foreign law firm; in short, that the premises of Rmbsa Corporate Services, the 'target' of the search warrant, and the foreign law firm was the same premises.

9.S.39A(2) of the Legal Practitioners Ordinance provides that legal professional privilege exists between a foreign lawyer and his client to the same extent that it exists between a Hong Kong solicitor and his client.

10.Having considered the application, the magistrate authorised the issue of the search warrant without setting any conditions as to the manner in which the warrant was to be executed.

11.On 12 April 2006, officers of the ICAC executed the search warrant.  They did so in the presence of one or more members of the foreign law firm.  Certain materials were seized.  Legal professional privilege was claimed in respect of all of that material.  It was therefore put under seal without examination by the ICAC and remains under seal.

12.On 2 May 2006, the applicants instituted judicial review proceedings seeking to quash the search warrant and obtain the return of all the seized material.  More specifically, the relief sought was to the following effect :

(i) an order of certiorari quashing the decision of the magistrate made on 7 April 2006 to grant the search warrant;

(ii) declarations that the execution of the search warrant and the seizure of materials pursuant to it were unlawful, and

(iii) an order of mandamus compelling the return of all seized material.

13.In their application for judicial review, the applicants did not assert that there had been a failure to comply with the strict provisions of the MLA Ordinance, such a failure making the search warrant invalid.  Nor did the applicants assert that the warrant authorised the seizure of materials in excessively wide or uncertain terms.

14.During the course of the hearing it became apparent that, through their leading counsel, Mr Graham Harris, the applicants contended instead that the decision by the magistrate to authorise the issue of the search warrant was vitiated in law by a single but profound oversight.  Mr Harris submitted that, as the search warrant was to be executed in the offices of a law firm, there had to be and was a real danger that legal professional privilege ('LPP') vested in clients of the firm may be undermined.  In light of that danger, it was fundamental to the lawful issue of the warrant that full regard be had to that danger and how best, in a practical way, steps could be taken to avoid it or at least to minimise the risk it presented.  As it was, said Mr Harris, no consideration was given to the matter.  That failure to give consideration to, or to take any steps to protect, a fundamental constitutional right vested in clients of the law firm, said Mr Harris, vitiated the validity of the warrant itself and rendered everything done pursuant to it unlawful.

15.That being the case, submitted Mr Harris, nothing would be advanced by the court examining the seized materials in order to determine whether in fact they were or were not protected by LPP.  The issue was the lawfulness of the issue of the warrant itself and thereby all actions taken pursuant to it.

16.In light of that, Mr Harris opposed the application made by Mr Wayne Walsh, counsel for the respondents, for an examination of the seized material by myself in order to determine whether it was or was not privileged.

17.Having considered the issue, I ruled that I would not examine the seized material.  The applicants' challenge went to matters that would not be determined by any examination.

18.On behalf of the respondents, it was submitted by Mr Walsh that there was no substance in the contention that the warrant was invalid.  To the contrary, the evidence showed that it was issued in compliance with law and that, in the factual circumstances, what risk there was of inadvertently undermining any LPP vested in clients of the law firm was taken into account.  In this regard, Mr Walsh made the following submissions :

(i) The search warrant was issued and executed in strict accordance with the statutory criteria; that is, the provisions of the MLA Ordinance.  No irregularity in that regard was shown.

(ii) The search warrant on its face was expressly limited to the search for and seizure of materials not of the law firm but of Rmbsa Corporate Services, a Hong Kong registered company which carried on the business of administering companies.  Rmbsa Corporate Services was not itself a law firm even if it carried on business in conjunction with one.  It was a distinct and separate entity carrying on a distinct and separate business.

(iii) There was no evidence of a misrepresentation of the facts by the ICAC officer who applied for the warrant.  Indeed, it was accepted that the magistrate was informed that Rmbsa Corporate Services shared offices with a foreign law firm.  It must therefore be taken that the magistrate, in Hong Kong always a professional lawyer of experience, would have taken that fact into account when he granted the warrant, doing so without imposing any conditions.

(iv) The search warrant did not on its face authorise the search for and seizure of material which was demonstrably subject to LPP.

(v) In light of this, the applicants could do no more than contend that the issue of the warrant raised some risk that privileged documents of the law firm may inadvertently be examined when the warrant was executed even though any search of documents and records of the law firm itself was outside of the authority contained in the warrant, a fact plain on its face.

(vi) A consideration of the operation as a whole, however, revealed that the ICAC officers who executed the search warrant took the risk into account, taking care to ensure that there was no inadvertent invasion of LPP in respect both of documents in the possession of Rmbsa Corporate Services and the law firm.

A further consideration of the background

19.It is often said that in law context is everything.  When the validity of a search warrant is considered, each case invariably will depend on its own facts.  Reference to judicial statements made in the context of one case may have little value in the context of another.  In the present case, in my judgment, a great deal turns on the facts and more detailed consideration must therefore be given to them.

20.As I have said earlier, the Philippine authorities believed that corrupt funds may have been channelled through two BVI companies administered in Hong Kong by Rmbsa Corporate Services.  The Philippine authorities informed the Hong Kong authorities that, to their understanding, Rmbsa Corporate Services itself was affiliated to the Manila law firm of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles which represented Piatco, the consortium which had successfully bid to construct and operate the new terminal at Manila's international airport.  The second applicant is of course the Hong Kong branch of that law firm.

21.At this juncture, it must be made clear, I believe, that at no time was any suggestion made that members of the law firm, either in Manila or here in Hong Kong, were in any way involved in any corrupt activities believed to have been carried out by their clients.

22.Having been nominated by the Secretary for Justice in terms of s.12(1) of the MLA Ordinance to apply for and execute a search warrant, Mr Tse Yuk Sing made certain enquiries which revealed :

(i) That Rmbsa Corporate Services was a Hong Kong registered company.

(ii) That the two shareholders of Rmbsa Corporate Services were Mr Joseph Alejandro and Mr Jose Buenaventura who were (together with a Mr Epifanio Ramiro), the directors of the company.

(iii) That the registered office of Rmbsa Corporate Services was Office 4206 in a building called the Far East Finance Centre, that having been its business address since late 1999.

23.An ICAC officer went to Office 4206 although, for obvious reasons, did not enter it.  Looking into the reception area, however, as I have said earlier, he could see the name of a firm of foreign lawyers displayed : 'Romulo, Philippine attorneys at law'.

24.Further investigations revealed that Mr Alejandro and Mr Buenaventura – the shareholders in, and directors of, Rmbsa Corporate Services – were lawyers at that firm.  

25.It was also known that Mr Alejandro was a partner in the Manila firm of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles.

26.Accordingly, when Mr Tse applied for the issue of a search warrant on 7 April 2006 he would have understood that :

(i) Rmbsa Corporate Services, as its name stated, carried on business providing corporate and secretarial services.  As such it was a distinct legal entity from Romulo, a legal firm.

(ii) However, although a separate entity, Rmbsa Corporate Services was no doubt operated by Romulo and, as such, its business premises was the business premises of the law firm.

(iii) There was some affiliation between the Hong Kong foreign law firm, Romulo and the firm in the Philippines of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles.

27.On 7 April 2006, with this information to hand, Mr Tse applied to a magistrate for the issue of a search warrant.

28.During the course of argument before me it was suggested by Mr Harris that an obligation rested on Mr Tse to investigate whether there was some manner in which the information sought by the Philippines authorities could be obtained without the need for the issue of a search warrant and the risks that ran with it of undermining LPP vested in clients of the law firm that operated Rmbsa.  I do not accept that contention.  What must be remembered is that Mr Tse was not running his own domestic investigation, he was instead assisting a foreign jurisdiction in terms of treaty arrangements.  As such, he was obliged to act in accordance with, and under the constraints of, Part III of the MLA Ordinance.  S.12(2) of the Ordinance provides that :

“Where an authorized officer nominated under subsection (1) has reason to believe that the thing to which the request relates is, or will, at a specified time, be— 

(a) on a person;

(b) in the clothing that is being worn by a person;

(c) otherwise in a person's effective control;

(d) upon any land; or

(e) upon or in any premises,

the relevant officer may— 

(i) lay before a magistrate an information on oath setting out the grounds for that belief; and

(ii) apply for the issue of a warrant under this section.”

29.Mr Tse, with the information available to him, clearly had reason to believe that the material requested by the Philippine authorities was to be found in the premises of Rmbsa Corporate Services.  He was therefore in terms of s.12(2) obliged to lay an information before a magistrate in order to obtain the issue of a search warrant.  I do not see how it can be said that he acted irregularly in this regard.

30.The contents of an information placed before a magistrate in order to apply for a search warrant are covered by public interest immunity, certainly until the criminal proceedings to which they relate are completed : see Inland Revenue Commissioners v. Rossminster Ltd [1980] 952, adopted by the Hong Kong Court of Appeal in Apple Daily Ltd v. Commissioner of the ICAC [2000] 1 HKC 295.

31.In light of this, in the present case the full contents of the information placed before the magistrate have not been disclosed.  However, in respect of the two BVI companies – which were the central subject of the intended search – Mr Tse said that the information revealed the following :

“The [BVI] companies' articles of incorporation provide no information regarding their owners, although the registered director of both companies is Rmbsa Nominees Ltd., a Hong Kong affiliate of Piatco's Philippine legal counsel, the law firm of Romulo Mabanta Buenaventura Sayoc and de los Angeles.  Neither company is, or has been, registered to do business in the Philippines.  On 13 July 2004, both companies were dissolved by one Joseph Anthony M. Alejandro, a Romulo Mabanta partner (Rmbsa Nominees has since changed its name to Rmbsa Corporate Services Ltd.).”

32.Although, in my view, that passage is somewhat dense in its language, it would have been apparent to the magistrate, I think, that Rmbsa Corporate Services was a Hong Kong company affiliated in some way with the Philippine law firm of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles.

33.Of course, while that information would have enabled the magistrate to understand the position of Rmbsa Corporate Services within the broader context of matters, nothing was said in the information to alert the magistrate to the fact that Rmbsa Corporate Services shared offices with a foreign law firm that was a branch office of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles. 

34.That being said, however, although nothing was contained in the information, in his affirmation of 5 July 2006 Mr Tse recalled telling the magistrate that there was a sharing of the premises :

“At the outset of the application, the learned magistrate asked me what premises were to be searched.  I told him that the premises to be searched included the Hong Kong office of a Philippine law firm, which provided company secretarial services.”

35.It is not disputed that words to this effect were said.  To put it another way, it is accepted that the magistrate was told that, in some manner, Rmbsa, a corporate services company, and a foreign law firm shared the office premises.

36.I accept that the magistrate was not informed in specific terms that the foreign law firm appeared to be the Hong Kong branch of Romulo, Mabanta, Buenaventura, Sayoc and de los Angeles.  But I do not see that as being in any way determinative.  What is important, in my view, is that the magistrate was informed that the premises which was to be the subject of the search was the premises not only of the Rmbsa but also of a law firm.

37.In the circumstances, it must be taken that the magistrate turned his mind to the issue raised by the applicants; namely, the risk in the execution of the warrant of opening privileged material to scrutiny.  The fact that there is no direct evidence of this is not to the point.  The magistrate was not obliged to give reasons.  In the absence of evidence to the contrary, regularity of process is assumed.  In any event, a rational approach to the likely realities dictates that the magistrate, as a professional lawyer of experience, would have understood the implications.  The fact that the magistrate did not lay down conditions regulating the execution of the warrant other than those appearing on the face of the warrant does not mean that he did not turn his mind to the risks which Mr Harris hi-lighted.

38.It is in any event common enough for Hong Kong solicitors to run corporate service companies to assist their clients.  In this regard, Rule 2.08 of the Solicitors Practice Rules directs that :

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

39.Rule 2.08 is amplified by a commentary which reads :

“1. Where solicitors are permitted to form a company, it must be wholly owned by the principals and any profits from it must go to the firm.  The name of the company can be similar to the name of the firm of solicitors controlling it.  Clients who use this service must be informed of the nature of the company.

2. Solicitors who form such a company will be responsible for ensuring that the company is not used as a means to avoid or evade the requirements of the Solicitors' Practice Rules, for example, to share profits with unqualified persons, and that the company is at all times operated in compliance with the rules of professional conduct as if it were part of the solicitors' practice.”

40.In his affidavit of 26 July 2006, Mr Alejandro said that he was the managing partner of Romulo.  Rmbsa Corporate Services, he said, was the corporate services arm of the firm.  The company, he said, was at all times treated “as part of the legal practice”, no distinction being drawn between the two entities.

41.In my judgment, however, it does not, and cannot, follow that, because a law firm is permitted to operate a corporate services company from its offices, that the company and the law firm become one, all the protections afforded to the law firm in order to avoid undermining LPP being equally afforded to the company.  The fact that the law firm is obliged to operate the company in accordance with principles that reflect the standards of the legal profession does not mean that the firm and the company lose their individual identities.

42.If it was otherwise, corporate services companies run by law firms would be afforded a greater measure of protection in respect of legitimate searches than similar companies independently managed or run, for example, by firms of accounts.

43.Of course, practical realities must always be taken into account and some intermingling of files can be expected.  In this regard, I am informed that the Law Society does not lay down any rule, nor offer any guidance, as to how legal firms should best manage their affairs to ensure that the records of the legal practice are kept separate from the records of any corporate services company run by the firm.

44.That being so, the execution of a search warrant at the offices of a law firm will always demand that caution be exercised.

45.As it is in the present case, when viewing the operation as a whole, it is apparent that such caution was exercised.  Before the search warrant was executed, Mr Tse and his officers took advice from a Government Counsel as to how best to deal with the risk presented by any claim being made for LPP.  In this regard, in his affirmation of 5 July 2006, Mr Tse said they were told that “should anyone claim legal professional privilege during the execution of the search warrant, the items in question should be sealed in the presence of the claimant without examination and retained pending further resolution of the claim”.

46.As to the material to be searched for and seized in terms of the search warrant granted by the magistrate, Mr Harris, for the applicants, accepted that, on its face, only one category of things indicated the possibility of the existence of LPP, that being the category described in paragraph (ii) of the Schedule, the Schedule itself, in so far as relevant, reading —

“Things of Rmbsa Corporate Services Limited (formerly Rmbsa Nominees Limited) relating to:

(i) …

(ii) its relationship to the Philippine Law firm Romulo Mabanta Buenaventura Sayoc and de los Angeles;”

47.As to the execution of the search warrant on 12 April 2006, the evidence shows that Mr Alejandro himself was informed that no search of the firm's records was intended and that he was requested to deliver up the materials detailed in the search warrant.  Having taking advice, seemingly from his head office in Manila, Mr Alejandro arranged for the following to be surrendered; first, what are described as the 'company kits' of Jetstream Pacific and Mainland Global and, second, what are described as the 'correspondence files' relevant to the two companies.

48.There is a dispute as to when LPP was claimed in respect of the company kits.  The ICAC said it was not claimed immediately, the applicants said it was.  As it was, however, when, according to the ICAC, LPP was claimed, both kits were placed under seal.  Accordingly, I do not see that much turns on this.

49.In respect of the correspondence files, it is accepted that LPP was claimed immediately.  After the ICAC had taken legal advice over the telephone, those files were placed under seal.

50.One ICAC officer, Mr Hui Cheung Yu, checked the cabinets in which files were kept.  In his affirmation of 5 July 2006, he described the nature of his search as follows :

“6.   … I found around 10 cabinets in the room.  I then checked the files inside the cabinet located just next to the entrance of the room.  I found that each of the files inside that cabinet was labelled by way of a sticker with a name on it and the files were arranged in alphabetical order.  I took out two of the files in that cabinet and found that the files contained company documents relating to the company named on the sticker.  As I was satisfied that those two files were not within the scope of the search warrant, I put them back into the cabinet.

7. I then checked the indexes marked on the outside of each of the cabinets.  It appeared that the files were stored in alphabetical order as indicated by the letters marked on the indexes of the cabinets.

8. I then opened three other cabinets which I believed might contain the files of Jetstream Pacific Ltd, Mainland Global Ltd and Rmbsa because the indexes of those three cabinets indicated that they should contain files beginning with letters 'J', 'M' and 'R' respectively.  However, no file relating to Jetstream, Mainland Global or Rmbsa was found in those three cabinets.

9. … I then checked the indexes of the box files that were placed on top of the cabinets.  No box files marked with the name Jetstream, Mainland Global or Rmbsa was found.

10. At about 1155 hours, I finished the inspection of the room without any document seized.”

51.Apart from checking two files to confirm that they contained documents relating to the labels on their covers, those two files apparently containing company documents, it is evident that Mr Hui did no more than check indexes and the like and did not examine individual documents contained within files.

52.In my view, the officers of the ICAC had an obligation to ensure that the execution of the warrant was a thorough one.  As such, even though all the materials seized were surrendered to them by Mr Alejandro, they were entitled to make a cautious check to ensure that there had been no innocent oversight of relevant materials that were not privileged.

Legal professional privilege

53.Essentially, as I have said, the applicants' challenge to the validity of the search warrant was based on the asserted failure of the magistrate, in issuing that warrant, to take steps to ensure that, when the warrant was executed, any material protected by LPP was not made the subject of scrutiny.  The challenge was based therefore on the profound importance of LPP in the administration of our system of justice.

54.The nature and importance of LPP has been considered in a number of Hong Kong judgments and nothing is advanced by revisiting those judgments.  The importance of LPP, however, must be underscored.

55.LPP is protected as a fundamental human right by art.35 of the Basic Law.  As Lord Taylor CJ expressed it in R. v. Derby Magistrates Court, ex parte B [1996] 1 AC 487 (at 507) :

“The principle which runs through all these cases, and the many other cases which were cited, is the a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth.  The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent.  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 rest.”  [my emphasis]

56.LPP is a necessary corollary of the right of every person to obtain skilled advice as to matters of law.  The privilege is therefore vested in the client not the lawyer.  Nor is it a privilege which must be claimed in order to come into existence.  Its existence is independent of any claim.

57.It follows, of course, that material which is privileged, because it is not admissible in evidence, cannot lawfully be the subject of a search warrant.  That being said, there was no suggestion in the present case that material protected by LPP was targeted.  What was asserted essentially, as I understood it, was that there was always a real risk that LPP would be undermined.  That risk obliged the magistrate to lay down, or at least to consider laying down, conditions to minimise that risk.

58.Whenever the issue of a search warrant runs the risk of undermining LPP, two conflicting public interests, both of importance, have to be weighed.  The first is the efficient investigation of crime.  The second is the protection of LPP.  In determining the balance, LPP weighs heavier in the scales.  Public interest demands that crime be efficiently investigated.  But if the right of every person to legal professional privilege is undermined that would threaten confidence in our entire system of justice.

59.In R. v. Chesterfield Justices, ex parte Bramley [2001] 1 All ER 411, at 417b, Kennedy LJ said :

“But what if, after making his inquiries, the magistrate has reasonable grounds for believing that the material sought includes items subject to LP?  Then, as it seems to me, the targeted material must be redefined in such a way as to enable the magistrate to be satisfied that there are no longer reasonable grounds for believing that it includes items subject to LP, otherwise he cannot issue the warrant.”

60.In this judgment, Kennedy LJ was considering the powers and duties of a magistrate in the context of Part II of the Police and Criminal Evidence Act 1984.  But it seems to me, bearing in mind the importance of preserving legal professional privilege that, absent any specific legislative provision to the contrary, his words are of general application.  To express it in terms relevant to the present case, while invariably a reasonable balance can be struck, if nevertheless in a rare case a magistrate is drawn to the reasonable conclusion that the risk of undermining LPP remains unacceptable then he cannot issue the warrant.

Was the risk of undermining LPP unacceptable in this case?

61.The difficulty I have had with this application is that, in my view, despite the urgency of the advocacy employed by Mr Harris, I do not see that there was ever the gravity of risk that he sought to describe.

62.First, the magistrate knew when he issued the warrant that Rmbsa Corporate Services, the 'target' company, shared offices with a law firm.  The risk which Mr Harris described would therefore have been appreciated by him.

63.Second, although Mr Harris criticised what he described as the woeful lack of information given to the magistrate by Mr Tse concerning the fact that Rmbsa Corporate Services shared offices with a foreign law firm, he did not say what extra information should have been given.  The ICAC had no knowledge of the internal arrangements in the premises for storing records.  To that extent, understandably, Mr Tse was acting 'blind'.  Yes, more information may have been given about the inter-relationship between the various parties.  But how would that of itself have assisted the magistrate to any material degree in considering the risk in executing the warrant of opening privileged documents to scrutiny?  The basic disclosure that there was a sharing of offices would have sufficiently alerted the magistrate and it must be taken that it did alert him.  As I have said earlier, absent evidence to the contrary, regularity of process on the part of the magistrate must be presumed.  There are no grounds therefore for holding either that there was material misrepresentation on the part of Mr Tse or a failure by the magistrate to take into account the risk that the execution of the warrant in shared offices presented.

64.Third, the search warrant authorised entry only between 7 a.m. and 7 p.m., essentially during the hours of business.  The magistrate would have come to his decision therefore on the basis that the warrant would be executed during office hours when professional members and/or staff of the law firm would be present to ensure that the search for and seizure of materials was in accordance with the terms of the warrant.  The magistrate had no reason to think otherwise.

65.Fourth, and of fundamental importance, the search warrant, on its face, was limited to the seizure of material of Rmbsa Corporate Services not of the law firm.  However indistinguishable the applicants may have considered themselves to be, the fact is that Rmbsa Corporate Services and Romulo, the law firm, were distinct and separate entities and the warrant gave no authority of any kind of the ICAC to seize material of the law firm.  To state it another way, the warrant was not directed at the law firm's practice files and documents.

66.Fifth, on the face of the warrant, there was no material described which was demonstrably protected by LPP.

67.Sixth, while quite obviously the files of the law firm would contain a great deal of material protected by LPP, there was nothing to suggest that the files of Rmbsa Corporate Services would equally obviously contain such a wealth of material.  The issue of LPP was not therefore, in all the circumstances, of such central importance that it demanded to be addressed in a positive way; that is, by making the execution of the warrant subject to stated conditions other than those appearing on the face of the warrant itself.

68.Seventh, in R. v. The Director of the Serious Fraud Office, ex parte Montgomery QBD 7 April 1998, CO/3263/97 Pill LJ said that, in his view, it was appropriate to consider 'the operation as a whole' in assessing the validity of search warrants.  Doing the same in the present case, it is apparent that :

(i) the ICAC officers took professional legal advice in respect of LPP before executing the warrant and had recourse to that advice during the operation itself.

(ii) When the ICAC officers arrived at the offices, a member of the law firm was informed that material of the law firm itself was not the subject of the warrant and was asked to surrender the material that was subject to the warrant; that is, the material of Rmbsa Corporate Services.

(iii) Only in a peripheral way did the ICAC act independently during the search.

(iv) Material claimed to be protected by LPP was sealed in accordance with legal advice.

69.In light of these factors, in my view, if the applicants are to succeed it can only be on the basis that, despite there being no actual risk of any magnitude, there was nevertheless a failure on the part of the magistrate to set protective conditions in addition to those stated on the face of the warrant and that failure, as a principle of law, rendered the search warrant unlawful.  In my judgment, however, whatever the law may be in other common law jurisdictions, the law of Hong Kong, as it stands, does not impose such an obligation in each and every case in which the premises of a law firm is to be searched.

The role of the magistrate

70.Although in practice, on a day-to-day basis, the judicial duty discharged by a magistrate in determining whether to issue search warrants may seem humdrum, the duty is far from what is often described as being 'a rubber stamp' duty.  The duty is one of constitutional importance.  Lord Hoffmann, in Attorney-General of Jamaica v. Williams and Others [1998] AC 351, at 358, described it as follows :

“The purpose of the requirement that a warrant be issued by a justice is to interpose the protection of a judicial decision between the citizen and the power of the state.  If the legislature has decided in the public interest that in particular circumstances it is right to authorise a policeman or other executive officer of the state to enter upon a person's premises, search his belongings and seize his goods, the function of the justice is to satisfy himself that the prescribed circumstances exist.  This is a duty of high constitutional importance.  The law relies upon the independent scrutiny of the judiciary to protect the citizen against the excesses which would inevitably flow from allowing an executive officer to decide for himself whether the conditions under which he is permitted to enter upon private property have been met.”

71.As to the manner in which a magistrate must discharge his constitutional duty, in my opinion the seminal authority in Hong Kong, certainly in so far as it binds my approach in the present case, is that of Apple Daily Ltd v. Commissioner of the ICAC (supra), a decision of our Court of Appeal made after the change of sovereignty and therefore after the Basic Law came into effect.

72.In that judgment, at 323H, Chan CJHC said that the guiding principles which a court must bear in mind when examining a search warrant challenged as to its validity are the following :

“(1) a warrant involves an erosion of a citizen's rights and privacy and must therefore be justified by law.  This hardly needs any authority in support;

(2)   the court has a constitutional duty to supervise the exercise of power in the issue and execution of a warrant and to safeguard citizens against abuse.  See Inland Revenue Commissioner v Rossminster Ltd, [1980] AC 952, HL, Lord Wilberforce at 997H, Viscount Dilhorne at 1003H, Lord Diplock at 1008D, Lord Salmon at 1015B, Lord Scarman at 1022A and Attorney General of Jamaica v Williams [1998] AC 351, PC, Lord Hoffman at 358F;

(3)   the court must construe the statute which empowers the issue of a warrant to determine its validity and, in doing so, should adopt a strict and restrictive construction.  Any doubt which may arise should be resolved in favour of the citizens.  See Rossminster, Lord Wilberforce at 998A, Lord Diplock at 1008D, Lord Salmon at 1017E and Williams, Lord Hoffman at 363B;

(4)   the court in discharging this constitutional duty must balance two competing aspects of the public interest, namely, the interest in the detection of crimes and bringing criminals to justice on the one hand and the interest in the protection of the citizens' rights and privacy on the other.  See Rossminster, per Lord Diplock 1007C; Lord Salmon at 1015B and Williams, per Lord Hoffman at 361A.”

73.Chan CJHC, along with Keith JA and Nazareth VP, held that the principles to be found in Inland Revenue Commissioner v. Rossminster Ltd (cited in para.30 supra) and Attorney-General of Jamaica v. Williams and Others (cited in para.70 supra) were the principles which reflected the law of Hong Kong.

74.Indeed, of direct relevance in the present case, Nazareth VP, at 322F, said that the relevant authorities applying to Hong Kong at the change of sovereignty were those of Rossminster and Williams.  He continued :

“They would thus be definitive of the common law applied to Hong Kong by art 18 of the Basic Law: see Tang Siu Man v HKSAR [1998] 1 HKC 371 at 405I.  It has not been suggested that there has since been any departure from what was held in those judgments, in Hong Kong, or of persuasive authority in the United Kingdom.  In the result, even if the effect of the decisions in other jurisdictions goes as far as contended by Mr Dykes, insofar as they depart from Rossminster and Williams, they would have to be rejected, at any rate by this court.  In any event, it seems to me that the approach adopted in Rossminster and Williams is, with respect, to be preferred.”

75.As to the principles to be found in Rossminster and Williams, Chan CJHC said the following, at 324E :

“In my view, what the House of Lords decided in Rossminster was:

(1)   it is a matter of construction of the empowering statute to decide (a) the scope of the powers of the issuing authority, (b) the conditions which have to be satisfied for the issue of the warrant, and (c) what is to be stated in a warrant.  The second and third matters go to what are sometimes called the essential and formal validity of the warrant respectively;

(2)  if it appears that a warrant falls strictly and exactly within the provisions of the empowering statute in that all the conditions have been satisfied, it would be upheld;

(3)  if the empowering statute does not require any particular form for the warrant, it would be held valid so long as it contains the basic details which are provided for in the statute.

The Privy Council in Williams held that if the requirements of the empowering statute have been complied with, the validity of the warrant would not be affected by a trivial excess of power, the absence of a reference in the warrant to the power under which it is issued or any errors of drafting not leading to substantive abuse.”

76.What is confirmed is the requirement to go to the empowering statute to determine, first, the scope of the issuing authority (in the present case the magistrate) and, second, the conditions which have to be satisfied for the issue of the warrant.

77.Of fundamental importance in the present case, is the principle that, if it appears that the warrant falls strictly and exactly within the provisions of the empowering statute in that all the conditions have been satisfied, then the validity of the warrant must be upheld.

78.What then of the statutory criteria in terms of which the search warrant was issued in the present case?

79.The magistrate drew his statutory power to issue the search warrant from s.12(3) and (4) of the MLA Ordinance :

“(3) Where an application is made under subsection (2), the magistrate shall, subject to subsection (4), issue a warrant authorizing an authorized officer (whether or not named in the warrant), with such assistance, and by such force, as is necessary and reasonable to do such of the following as are specified in the warrant— 

(a) to search a person specified in the warrant for the thing;

(b) to enter upon land, or upon or into premises, specified in the warrant;

(c) to search any such land or premises for the thing; and

(d) to seize any thing found in the course of any such search that the relevant officer believes, on reasonable grounds, to be relevant to the criminal matter in the place outside Hong Kong concerned.

(4) A magistrate shall not issue a warrant under this section unless— 

(a) the informant or some other person has given to the magistrate either orally on oath or by affidavit, such further information, if any, as the magistrate requires concerning the grounds on which the issue of the warrant is sought; and

(b) the magistrate is satisfied that there are reasonable grounds for issuing the warrant.”  [my emphasis]

80.In exercising his powers under the MLA Ordinance, the magistrate was, of course, obliged to take into account that, pursuant to s.2(10) of the Ordinance, professional privilege remained protected.  But, for the reasons I have given earlier, there is no evidence that the magistrate failed to do so.  S.2(10) does not impose any obligation to specifically state on the face of a warrant that LPP has been taken into account.

81.The search warrant in any event had to be issued in a prescribed form : see Rule 7 of the MLA Regulations.

82.As to the required form of the search warrant, Mr Harris pointed to paragraph (d) in the preamble to the warrant which contains the following provisions :

“I am satisfied, having regard to such further information as I have required,*/that there are reasonable grounds for issuing the warrant

* Delete whichever is inapplicable”

Mr Harris pointed to the fact that, in the warrant as issued, this provision was typed as follows :

“I am satisfied that there are reasonable grounds for issuing the warrant.”

83.Accordingly, said Mr Harris, the only way of reading the warrant was on the basis that the warrant had not been issued in consideration of any 'further information' sought by the magistrate, evidence that he had not made any enquiries concerning the sharing of the office premises by Rmbsa Corporate Services and the law firm.

84.But it was accepted, of course, that Mr Tse had informed the magistrate that the offices were shared and, that being known, I do not see that the magistrate was obliged to seek further information.

85.In any event, in so far as paragraph (d) in the warrant should have referred to 'further information' being obtained, I do not see that it is an error of sufficient gravity (in light of Rossminster and Williams) to invalidate the warrant.

86.The submissions by Mr Harris, of course, were not that there had been a failure to comply with the strict dictates of the legislation but rather that there had been a failure by the magistrate to ensure the protection of a fundamental constitutional right and it was that failure which vitiated the lawfulness of the warrant.  It may be said that Mr Harris relied on the second guiding principle stated by Chan CJHC in the Apple Daily judgment (cited in para.71 supra); namely, that this court has the constitutional duty, when considering the validity of the issue of a search warrant, to safeguard citizens against abuse.

87.In advancing his submissions, Mr Harris emphasised the important role that the magistrate played not only in ensuring strict compliance with the requirements of the relevant legislation but more broadly in preventing abuse of fundamental rights.  Reference was made to Williams v. Somerfield [1972] 2 QB 512, at 518, in which Lord Widgrey CJ said :

“Generations of justices have, or I would hope have, been brought up to recognise that the issue of a search warrant is a very serious interference with the liberty of the subject and a step which would only be taken after the most mature careful consideration of all the facts of the case.”

88.The fact that, in the present case, the warrant did not authorise the seizure of materials from Romulo itself but only from Rmbsa Corporate Services could not be determinative, said Mr Harris.  What could not be ignored by the magistrate was that the warrant was to be executed in the offices of the law firm and that there was every possibility that the records of the law firm and the corporate services company would, to a greater or lesser degree, be intermingled.  There was therefore a real risk of abuse of a fundamental constitutional right.  This was a matter which both the ICAC and the magistrate were bound to take into account by ensuring that protective measures were put in place.  But none were put in place.  In short, there was a failure to prevent possible abuse.

89.Mr Harris submitted that, even if the requirements of the MLA Ordinance were met in the present case, the magistrate still had a discretion to refuse to issue if it appeared that fundamental constitutional rights were endangered.  In this regard, Mr Harris placed heavy reliance on the words of Lamer J in the judgment of the Supreme Court of Canada in Descoteaux v. Mierzwinski 141 DLR(3d) 590.  In that judgment, Lamer J compared what I may term the restrictive approach and the approach of broader discretion, coming down on the side of the latter.  He said (at 615) :

“Some say that the justice of the peace has no discretion to refuse to issue a search warrant or to impose terms of execution once the requirements of form and substance in s. 443 have been met. …

Others, on the contrary, say that generally the justice of the peace has the discretion to refuse the warrant, so long as this discretion is exercised judicially and so long as the decision to refuse the warrant is not capricious or arbitrary.

I come down on the side of the discretion, as it allows more effective judicial control of the police.”

90.Lamer J explained why he had come to this conclusion :

“Searches are an exception to the oldest and most fundamental principles of the common law, and as such the power to search should be strictly controlled.  It goes without saying that the justice may sometimes be in a poor position to assess the need for the search in advance.  After all, searches, while constituting a means of gathering evidence, are also an investigative tool.  It will often be difficult to determine definitively the probative value of a particular thing before the police investigation has been completed.  Be that as it may, there are places for which authorization to search should generally be granted only with reticence and, where necessary, with more conditions attached than for other places.  One does not enter a church in the same way as a lion's den, or a warehouse in the same way as a lawyer's office.  One does not search the premises of a third party who is not alleged to have participated in the commission of a crime in the same way as those of someone who is the subject of such an allegation …”  [my emphasis]

91.It seems to me, however, that, in relying upon the judicial reasoning of Lamer J, Mr Harris was asking me to move away from the more restrictive approach adopted by our Court of Appeal in Apple Daily Ltd v. Commissioner of the ICAC and that I do not see that I am permitted to do.

92.In any event, even if I am wrong in that regard, Lamer J spoke only of the exercise of a discretion.  In the present case, for the reasons which I have given earlier in this judgment, I fail to see how it can be said that the magistrate in the present case either failed to exercise his discretion at all or, if he did exercise his discretion, did so in a manner which, by failing to prevent the real risk of abuse of fundamental rights, fell outside of the broad parameters of that discretion.  In so far as it was incumbent on the magistrate to guard against the possible abuse of fundamental rights, for the reasons already given I do not see that there was any real danger of that abuse taking place.  Indeed, as events turned out, it does not appear that there was any abuse.

93.At the end of the day, it seems to me that Mr Harris was forced to rely on the fairly narrow submission that the failure to dictate protective measures was of itself evidence of a failure on the part of the magistrate to lawfully exercise his discretion or that in all cases when a warrant was to be executed at the offices of a legal firm conditions had to be laid down.  In the latter regard, Mr Harris relied on a number of Canadian and New Zealand authorities in support of his proposition that a search of a law firm's premises must be made subject to conditions.  Inter alia, reference was made to Calver v. District Court at Palmerston North [2005] DCR 114, a judgment of the New Zealand High Court in which it was held that “a warrant issued in respect of solicitors' premises must be specific with respect to subject matter, and subject to conditions designed to secure privilege and confidentiality and ensure records of other clients are not seized”.

94.As to the nature of the conditions to be applied, these would of course depend on the circumstances of each case.  In Calver, the following guidelines were given :

“An important consideration is whether the solicitors are accused of complicity in their client's offending.  If not, as in this case, the issuer might consider giving the solicitors the option of avoiding a police search, by imposing conditions that police offer them the opportunity (a) to identify relevant material, and (b) to deal with claims to privilege by allowing police to take privileged material on terms that it is sealed and referred to a Judge to resolve claims to privilege.  That process parallels s 198A, with the important distinction that the warrant does not authorise police to seize privileged material: the decision is that of the solicitors, who may prefer to authorise removal on such terms rather than have police search their files.  Since the issuer cannot assume that the solicitors will authorise such a process, it may also be appropriate to require that the search be conducted by or under the supervision of a police lawyer, who is an officer of the Court and competent to assess privilege, with provision for sealing and review by the Court where police conclude material is not privileged but the solicitors maintain that it is.  In some cases, it also may be appropriate to exclude police officers who are involved in the investigation from the search.”

95.While I accept that there may be circumstances in which, to avoid the abuse of fundamental rights, it will be incumbent upon a magistrate to lay down protective conditions, I do not see that it is the law of Hong Kong, as I am obliged to interpret it, that in all cases involving the offices of a law firm conditions must be laid down.  In short, in my judgment, Calver is not the law of this jurisdiction.

Conclusion

96.For the reasons given, the application for judicial review is dismissed.  Costs will follow the event and are awarded to the respondents.

Mr Graham Harris and Mr Dennis Kwok, instructed by Victor Chu & Co., for the Applicants

Mr Wayne Walsh, DPGC of Department of Justice, for the Respondents