Secretary for Justice v. Shum Chiu and Others

cacv 50, 51 & 52/2006

in the high court of the

hong kong special administrative region

court of appeal

civil appeal noS. 50, 51 & 52 OF 2006

(on appeal from hcal NO. 101 of 2005)

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BETWEEN

Before: Hon Ma CJHC, Stuart-Moore VP and Stock JA in Court

Dates of Hearing: 19-22 September 2006

Date of Handing Down Judgment: 21 December 2006

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J U D G M E N T

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Hon Stock JA (giving the judgment of the Court):

The issue

1.This appeal concerns a decision of a District Court judge in the course of an application for a permanent stay of criminal proceedings, and the order that followed, namely, to stay the proceedings.  After the close of evidence for the defence in the stay application, and after counsel for the defendants had made their submissions, counsel for the prosecution sought leave to call evidence, having originally said that he would not.  The judge declined to allow him to call that evidence.  There was then a judicial review of that decision as well as of the trial judge’s determination to order a stay, a determination that was an inevitable consequence of the evidence decision.  That review resulted in orders that quashed the decision to refuse the prosecutor’s application to call evidence, quashed the determination to stay the proceedings, and remitted the case to the District Court.  This is an appeal from those orders.

2.The stay application was based upon the fact that officers of the Independent Commission against Corruption (ICAC) had recorded a conversation at which were present a defendant and his solicitors, an act said to be an abuse of power of such a kind as to be an affront to the public conscience, to which the courts should not lend themselves, wherefore the proceedings should be stayed.  

3.Such an act is liable to arouse deep instinctive concern and for that reason it is important to appreciate at the outset what this appeal is about and what it is not about.  The prime question at this stage is whether the District Court judge’s approach to the application to call evidence was flawed.  It is not about the merits of the stay application, although we are asked to say that a hearing of the evidence would have made no difference, that a stay would have been the inevitable result.  There was a second limb to the stay application, that because three of the four defendants were not present at the recorded meeting and could have no access to the tape because the doctrine of legal professional privilege precluded disclosure of its content to them, those three could not have a fair trial; this limb does not concern us for the purpose of this appeal.

4.In the judicial review, Hartmann J held that what motivated the conduct of the ICAC was a matter that was crucial to a determination whether or not the impugned conduct was an affront to the public conscience, that it was difficult to see how a court in a case such as the present could weigh the public interest in bringing defendants to trial against the public interest in ensuring that law enforcement authorities did not deliberately and gravely flout the law, without hearing such evidence as those authorities sought to put forward in an attempt to justify their actions, and that in her reasoning for refusing the application to call evidence, the judge had erred.  He remitted the matter for that application to be determined afresh.  By sending the case back, there was of course no implication as to which way he thought the substantive application might go: he was merely saying that the judge had erred in her approach to the evidence application.  The appellants, on the other hand, stress that in refusing the prosecution’s application to adduce evidence, the trial judge exercised a discretion which, in the light of how matters had developed, is not shown to have been exercised in a manner that entitles a court on review to interfere; that in arriving at his decision, Hartmann J wrongly took into account material that was not placed before the trial judge; but that in any event the material which it is said the trial judge should have received could have made no difference to the outcome of the stay application because, so the argument runs, that material is wholly insufficient to convert the conduct of the ICAC into something other than an affront to the public conscience.  The respondent prosecutor retorts that the material shows that the ICAC had genuine reason to believe that the defendant in question intended to utilise the meeting with the solicitors for a criminal purpose such as would denude the occasion of the protection of professional privilege, so that whatever in fact passed between those present at the meeting, the decision of the ICAC to record it was not an affront of such a kind, if an affront at all, that warrants a stay of proceedings.

The allegations behind the charges

5.It will be convenient to refer to the appellants throughout as ‘the defendants’, and to use the numbered references to them that have been employed by counsel.

6.D3 is the person who had the meeting in question with his lawyers.  He was the Vice President of a company called ABB Industrial and Building Systems (ABB), of which company D6 was the financial controller; and of which a man called Tang (who was PW1 at trial) was a sales manager, Victor Law a manager and Keith Leung the General Manager.  D1 and D2 were directors of companies called Rickson Engineering Limited and Mpower Engineering Limited respectively.  The allegations are of corrupt dealings with officers of the Housing Department in relation to sub-contracts for the installation of miniature circuit breakers (MCBs) at Housing Authority building projects.  The contention is that a cartel was formed between ABB, Rickson and Mpower, who were each suppliers of MCBs, by which tender exercises were so complicitly arranged that each would secure contracts in turn at prices higher than would result from a genuinely competitive tendering process.  However, in order to ensure that contractors nominated by the Housing Authority would choose these particular suppliers rather than others, certain Housing Department officials were bribed to secure pressure on them to favour these three companies.

7.The assertion is that in late May 1999 it was agreed between D1, D2, D3 and Tang that it was time for ‘tea money’ to be paid because of favourable efforts already exerted by such officials and a sum of $700,000 was agreed to be borne equally between the three companies, a sum of $233,350 each.  This assertion gave rise to the first charge, a charge against D1, D2 and D3, of conspiracy to offer an advantage to public servants.  That payment had somehow to be accounted for in the books and the allegation was that D3 told Tang to prepare a bogus purchase order that would show the purchase of equipment by ABB from Mpower.  This was done and D6, knowing that the order was bogus, nonetheless signed it and approved payment.  From this came the second charge, a charge against D2, D3 and D6 of conspiracy to falsify a document for accounting purposes.  Charges 3 and 4 were in similar vein, in that Charge 3, against D1, D2 and D3, alleged a conspiracy to offer an advantage of $1,200,000 to public servants, another ‘tea money’ payment, and Charge 4 alleged a conspiracy between D1, D2, D3 and D6 to falsify an account, this time two bogus purchase orders, to cover payment of ABB’s share of the bribe asserted by Charge 3.

History

8.Tang was arrested on 3 May 2002 as was D1 and D2.  Tang decided to assist the ICAC in their investigations.  In doing so he made a series of non-prejudicial statements, which is to say statements that would not be used against him in any proceedings.  He also took documents from the offices of ABB which he gave to the ICAC.

9.On 7 November 2002, the ICAC conducted a raid on the offices of ABB and arrested a number of persons including D6, but not D3 or Leung who were then out of Hong Kong.  On that day, ABB retained the services of a firm of solicitors, Messrs Haldanes, to protect the interests of the company and of its employees.

10.In the days that followed, there were frequent contacts between Leung and Tang, and between D3 and Tang.  Most particularly, there were two telephone conversations between Leung and Tang on 11 November and a conversation between them in a motor vehicle.  All three meetings were covertly recorded by means of a device affixed to Tang’s person.

11.On 14 November 2002, Tang informed the ICAC that he had been asked by D3’s secretary to attend a lunch on 16 November with D3 and a lawyer.  It is the decision to record that meeting that was at the heart of the stay application.  An authorization was sought and granted for that purpose, to the terms of which we refer at [38] below.

12.On 16 November 2002, the meeting took place at lunch time at a restaurant in Festival Walk, Kowloon Tong.  It was attended by Tang, D3 and two solicitors from Haldanes, namely, a Mr Fung and a Mr Booth.  After the solicitors left, there was a conversation between D3 and Tang and this too was recorded.

13.On 21 November 2002, Tang made a further non-prejudicial statement, the fifth he had thus far made, therefore referred to in these proceedings as NPS 5.

14.On 16 August 2003, D3 was arrested.  He has refused to waive such privilege as might attach to the conversation in the restaurant.

The stay application

15.Given that the application for judicial review challenged the decision of the trial judge, Deputy District Judge Livesey, to refuse the prosecutor leave to adduce evidence, and that it has been held at first instance that she was wrong to do so, the circumstances in which she came to make that decision are central to this appeal.  It follows, regrettably, that it is necessary to provide a rather detailed account of how matters unfolded before her. 

16.It is common ground that the prosecution had notice of the stay application by D3 and D6 only two days before it was made, and in the case of the other defendants notice and the basis of their applications was given on the day of the application itself, which was the first day of trial.  This was not acceptable notice for any stay application, let alone for one in which there was as much factual meat and as much case law as in this application.  We shall as an addendum to this judgment have something to say about practice in this regard, but for the present it suffices to say that the procedural mess that was the hallmark of the stay application in this case found its origin, though by no means its entire explanation, in the lateness of notice of the application and in the prosecutor’s failure to seek an adjournment so that he could properly consider what course he should adopt in answer to the application, a failure that may have been due to an understandable desire not to put off proceedings that had long been set down for trial and at which no fewer than eight counsel on the other side were present and ready to proceed.

17.The skeleton submissions served on behalf of D3 and D6 recited the broad history of the events leading to the restaurant meeting, and that the application was made on the footing that the recording of the hour-long meeting with the solicitors was an affront to the public conscience and cited in support of the application a number of authorities.  The written material signed by leading counsel on behalf of D1 and dated the first day of the hearing, namely, 23 June 2005, suggested that the decision by the ICAC to record the meeting was impermissible in the absence of “the strongest evidence that the meeting was to pursue some criminal intention” and, again, it included reference to a significant number of authorities.  Then there was a written submission on behalf of D2 covering much the same ground but citing a further authority.

18.The hearing on 23 June 2005 commenced with counsel for the prosecution telling the court that there was to be an application for a stay, he having received notice on behalf of some of the defendants to this effect only ten minutes previously.  The law, he said, was that since the defendants brought the applications “the burden is on them to prove the factual basis on which they bring the applications” and that his immediate reply to the charge of abuse based on a shock to the conscience of the court was that it was for the applicants to “prove the factual basis… on which [they] make the application.”  Given that it was at that stage agreed that there had been a recording of a meeting with solicitors present and that the ICAC knew in advance that lawyers would be present this was, we have to say, an odd approach by prosecuting counsel, for one would have thought that with those fundamental facts accepted, it was for the prosecution to show strong justification for the highly unusual course taken by the investigating officers.  This misapprehension of how matters stood may go some way to explaining why prosecuting counsel did not at the outset seek either an adjournment or to call evidence.  Counsel went on to say that the prosecution had no intention of utilising the recorded conversation at trial and that neither he nor the officers in charge of the case had listened to it.

19.Leading counsel for D3 and D6, Mr Duncan SC, then opened his application.  He traversed the history leading up to and including the recording of the restaurant meeting and he said that during that meeting legal advice was given to the third accused and also to Tang, adding that neither the third defendant nor the solicitors knew at the time of that meeting that Tang had been arrested.  He took the learned judge to some of the authorities and having done so said that “the issue now arises … as to how we proceed from here.”  He told the judge that he and prosecuting counsel had held some discussions as to whether it would be possible to proceed on the basis of certain agreed or, as all counsel for some reason preferred to call them, ‘premised’ facts, but the premised basis had thus far not been agreed, for which reason he, leading counsel, proposed to call one of the solicitors who was present at the restaurant meeting, adding that: “It will then be a matter for my learned friend, I would respectfully suggest, to decide whether he wishes to call any evidence, and at the end of that passage, we will wish to make a few closing remarks which are designed to provide just a little bit more detail … with the way in which the principles are being currently applied in an overseas jurisdiction.  I'm in a position to call Mr Fung [one of the solicitors at the restaurant meeting] right now.”  There followed extensive debate as to how to proceed, with prosecuting counsel suggesting that there were premised facts which might be agreed in which case the matter could proceed without witnesses.

20.In the course of this discussion, counsel for D3 said that he was not prepared to accept as a ‘premised’ fact, as had been proposed by prosecuting counsel, that Tang had told the ICAC prior to the restaurant meeting that instructions given, if any, by the lawyer who was to be present “may relate to an offence of obstructing justice.”  In that regard, Mr Duncan said this: “We do not accept that there was any justification for the ICAC to tape this conversation on the grounds that it may disclose an offence of obstructing justice and that’s going to be the plaint [plank?] of my learned friend’s submission on this matter.  We want that matter thrashed out, if necessary, by way of evidence.”  Then he added this: “… what my learned friend said with regard to burdens of proof and whatnot, if his position is that the ICAC had justification, legal justification, for embarking on the taping, it's over to the ICAC to prove that they had their justification.  If they don't give evidence on it, we will comment on it.  If they do give evidence on it, we will cross-examine their witnesses as to just what procedures they did go through.”  Mr Surman's response was that in that event, “we may be calling quite a number of witnesses, including [Tang]” and he said he needed time to think about it and to arrange the witnesses.  Mr Duncan then said that if that was so, he would wish to have witness statements in order for the defence to prepare its case.

21.So far as we are aware, the judge had not been forewarned of the application for a stay or of the basis of its unusual ground, or of any of the authorities in support.  Had she been, we have no doubt but that she would have appreciated that if there was suggested justification for recording a conversation that was prima facie privileged, it was going to be quite impossible for the question of abuse of executive power fairly to be determined without hearing the evidence in support of that justification.  What was developing was a mess, with no idea on the first day of the application whether witnesses were to be called or not and with recognition by defence counsel themselves that there may have to be an adjournment for statements to be served, a recognition of some significance given the issue in the judicial review.  Once matters started off on this unsatisfactory footing, nothing augured well for a disciplined and clear development of the application and, as often happens when things start to go wrong, they became less clear still with each subsequent exchange.

22.Mr Cheng Huan SC rose next, to express his interest in what witnesses might be called, at which point the judge asked him whether he had made prosecuting counsel aware of the basis of his application.  Yes, said Mr Cheng, he had that very morning handed a bundle to his learned friend, the prosecutor, but had no idea what factual disputes there might be.  Mr Surman pointed out that whilst something had indeed been given to him at five minutes past 10 that morning, it was given to him only to be taken away and for him to be served with a revised submission at five minutes past 11.  We have to say that the judge showed remarkable patience and might have been excused had she expressed considerable frustration at the fact that such scant notice had been given and that on the first day of trial, this application for stay had emerged without counsel having already settled what was and was not agreed and whether and, if so, which witnesses were to be called.  In the event, Mr Surman was given time to read Mr Cheng’s submissions.

23.Counsel returned to court at 2:30 p.m. and Mr Surman announced that “it seems that we are going to be able to proceed on a premise basis”.  We shall return to the premised basis in a moment but we pause to note that Mr Surman took pains to point out that “these are not admitted facts.  They are a premise on which we’re hearing this application for stay.”  We are puzzled by the notion of ‘premised’ facts in the context of a stay application based upon conduct said to be a gross abuse of executive power, but that is what happened: counsel for the prosecution clearly indicated that the prosecution was happy to proceed on the basis of these ‘premised’ facts.

24.Mr Duncan then called his only witness, namely, Mr Fung, a partner in the firm of Haldanes who testified about the meeting on 16 November 2002.  He said that at that meeting he gave legal advice to Tang and to D3 “in respect of the raid by the ICAC of the premises at ABB earlier that week.”  That was the long and the short of his evidence.  There was no cross-examination.

25.Defence counsel then made their submissions upon the application.  The submissions were extensive and it was made clear at the very outset that their contention was that “the ICAC deliberately recorded a conversation between an individual – the 3^rd accused – and his solicitors, knowing that the communications would probably, if not inevitably, be privileged communications.  The second point we wish to make,” said Mr Duncan, “is that on the facts, … the prosecution have failed totally to justify that their actions in covertly taping this meeting were justifiable actions.”  Counsel then referred, yet again, to the possible contention – presaged in the ICAC’s internal authorisation for the eavesdropping – that there had been evidence of a possible offence of perverting the course of justice to be furthered at this restaurant meeting; and he said that there would have to be something very substantial, something cogent, to justify an intrusion into the solicitor-client relationship and that “a mere expression by the officer submitting the request, who we haven't heard from in these proceedings, that possibly evidence of perverting the course of public justice might be thrown up during the conversation is, in our submission, not enough.”  He then took the judge extensively through the relevant authorities including one, Sutherland and others, an unreported judgment of Newman J in the Nottingham Crown Court, 29 January 2002, not in his written submissions, but which was only referred to in Mr Cheng’s submissions handed in that day.  The hearing was adjourned, and then resumed the following morning, 24 June 2005, at which stage the submissions continued with lengthy contentions as to the law.

26.In the course of his submissions on the morning of 24 June, Mr Cheng too made the point that the onus was on the prosecution to justify the action taken by the ICAC.  When the court resumed the hearing after adjourning for the mid-morning break, Mr Surman intervened and in the course of his intervention said this:

“Now, legal professional privilege is claimed in respect of this conversation.  Now, for the purposes of argument, I wouldn’t dispute that, but D3, by attending a meeting in the presence of third party, in other words PW1, has effectively waived his legal professional privilege, at least so far as PW1 is concerned.”

and in relation to the contention that the other defendants could not have a fair trial, Mr Surman offered to have the tape provided or transcribed so that it could be given to the other defendants.  The suggestion of waiver was a significant comment because it may reveal why it was that Mr Surman had taken the view that it was unnecessary for him to call any evidence.  If that was the supposition upon which he acted, namely, that there had been a waiver of privilege by D3, then, with respect he had fallen into error.  Be that as it may, this all gave rise to a fresh flurry of exchanges, but matters settled down and Mr Cheng continued with his substantive submissions.

27.Before the luncheon adjournment Mr Surman told the court that what he intended to do after Mr Marash SC completed his submissions was to “speak very briefly this afternoon, give you the authorities that I will seek to rely on … give them to my learned friends, as well, so that they can be digested over the weekend, and then continue on Monday.”

28.In the afternoon Mr Marash addressed the court.  He concentrated on the unfairness suggestedly occasioned to his client by not knowing what had transpired during the recorded conversation, it being the contention of those defendants not present at the restaurant meeting that in the non-prejudicial statement NPS 5, Tang had materially altered his story and that he might well have done so pursuant to an exercise in which he had been asked to listen to a tape of that restaurant conversation; yet without the benefit of the tape they were not in a position to test that possibility.  In relation to the suggested unconscionability of ICAC's conduct in recording the conversation itself, he invited the court’s specific attention to the fact that no evidence had been adduced about their conduct to explain why they did what they did.  He remarked that there was no evidence “to contradict the submission that [the ICAC] acted mischievously and deliberately to tape a legally privileged conversation … .  In the absence of evidence to the contrary, the court should conclude that the ICAC’s conduct was deliberate and without justification.”  The hearing was then adjourned until Monday 27th June 2005. 

29.On 27 June 2005, Mr Marash continued with, and concluded, his submissions.  Mr Cheng then addressed the court on the question of waiver; and finally Mr Surman commenced his argument.  We would pause at this stage to note that in his judgment, Hartmann J has referred to this as the stage “for the prosecution then to present its case in opposition.”  We take that to mean that it was the prosecution’s task then to present its arguments in response to those of the defendants.  There was no question at that stage of any presentation of a case in the sense that includes evidence.  The evidence stage had long since closed.

30.There then followed lengthy submissions by Mr Surman, that followed the scheme of written submissions he had handed to the court, a copy of which we have.  The submissions were designed to persuade the court to listen to the recorded conversation as well as to allow the prosecution to adduce the testimony of two witnesses: first, the officer who signed the authorization for the conversation to be recorded, and second, an officer to produce the transcript of a conversation between Leung and Tang on 11 November.

31.At the outset of these submissions, Mr Surman sought to resile from the prosecution's previous position in that the prosecution wished now to assert that legal professional privilege did not attach to the conversation that had been recorded.  The basis of that assertion was that “the prosecution are instructed that privilege either (i) does not attach to the taped conversation at all or (ii) if found that it does attach to the taped conversation then it attaches only to a very limited part in the taped conversation.”  One must assume from this submission and from the way in which it was developed that someone who had listened to the conversation had suggested to Mr Surman that the conversation or a significant part of it did not involve the giving of legal advice, or that such advice as was sought or was given was for an illegitimate purpose so that legal professional privilege did not apply.  He contended that if only the judge would listen to the tape or read a transcript of it she could then conclude, one way or the other, whether the conversation was in fact privileged or not, and if partly privileged then the privileged parts could be excised.  This, with respect, rather missed the point, for the point at issue was not whether, as matters transpired, the conversation was or was not privileged, but whether the investigating authority had a sufficient basis upon which to decide to listen in to a conversation between D3 and his lawyers, knowing full well that his lawyer was to be present.  It cannot be accepted that it is open to law enforcement authorities to intrude on a conversation that is prima facie privileged on the off-chance that it might not be and then to justify the intrusion on the footing that as matters have turned out the discussion was not covered by privilege.  It is the pre-existing ground for intrusion that must be demonstrated, and an off-chance is far from enough.

32.Mr Surman contended that it had not been clear to him from the written submissions provided on behalf of the applicants how significant was the question of deliberate and intentional breach of privilege.  In this regard he argued that there was no deliberate intention to capture conversations which they knew were privileged but that, rather, the capturing of the conversation was intended merely as an aide memoire for Tang’s benefit.  This argument ran along the lines that it was open to Tang to give oral testimony of the conversation and that the point of recording it was to enable him better to recall its detail.  It is not for us at this stage, in the light of the decision we have made upon this appeal, to comment upon this: it will no doubt be explored at the restored hearing.

33.Then there was a further submission by which counsel sought comfort in what he described as the ‘but for’ test.  In this regard he referred to a number of cases in which executive abuse of power had resulted in a stay of proceedings where, so he contended, the criminal proceedings would not have commenced but for the abuse.  The kidnapping of a suspect overseas, thus avoiding extradition proceedings, was such an example.  He contended, however, that in the instant case these defendants “would have been brought to trial even if this conversation had never been taped.”  This was effectively to ignore those cases in which proceedings had, without any regard to some ‘but for’ test, been stayed after there had been a deliberate and inexcusable infringement of legal professional privilege, because of the grave affront to the public conscience constituted by such conduct, conduct to which the court will not lend itself by permitting the proceedings to continue.

34.In relation to the conversation between Leung and Tang on 11 November, the details of which were now sought to be adduced in evidence, Mr Surman came closer to the point which is said in the judicial review to have demanded the hearing of testimony.  He said that that and other conversations had “led the ICAC to believe that there [were] (a) ongoing matters in relation to the conspiracy; and (b) the potential for other criminal offences, namely, obstruction.”  He went on:

“Now … they had that conversation; the ICAC knew what had taken place there.  Some days later, D3 arranges to meet with PW1.  Now, if we are allowed to call evidence, I believe that you will hear evidence to the effect that here was D3, a suspect, meeting with PW1 who was also involved in the operation and it was thought, at the time, that there may be conversations going to support the charges that have been brought, namely, section 4 corruption and section 19 false accounting, - and that's on the form, … the authorisation form.

And, your Honour, indeed, when PW1 went to the meeting on 16 November, yes, there were conversations with the lawyer that took place there but, after the lawyers left, there was a conversation between PW1 and D3 outside the restaurant which was also recorded and it appears on the same tape, the latter part of the same tape, which the prosecution are seeking to adduce as part of this case because -- of course, the only reason that we’re seeking to produce it is because we believe that it furthers our case; otherwise, we wouldn't bother.

And, so, if you look at the authorization … that was signed, it says there, section 4 corruption, section 19 false accounting and it’s either obstruction or perversion, right?  So there are three matters there.  Now, we have a taped conversation which we’re going to try and adduce in evidence which does speak to section 4 and section 19.  So, when the ICAC wired him up – and they did, they deliberately wired him up – and they sent him along to the meet, it's not with an intent to capture legally privileged conversations – that would be foolish – but with an intent to try and record, to help PW1 with his memory and recollection of events, evidence that might speak to either section 4 or section 19 and, possibly, an obstruction charge.

….

When the ICAC wired up PW1 to go on to this meeting, they knew that he was going to meet the 3^rd defendant, a suspect.  They also knew, and we accept, that lawyers had been arranged to meet them but this was lunch in a public place and, in fact, 16 November was a Saturday lunch-time.  Now, PW1 went along to that meeting.  How were the ICAC to know that PW1 and D3 were not going to have a conversation sitting at the restaurant table before the lawyers arrive about section 4 and section 19, which was the basis of the investigation?  Or, how did they know that D3 and PW1, in the absence of lawyers, were going to have a conversation about section 4, section 19 and, possibly, about obstruction? 

And how do the ICAC know that, after the lawyers had left the meeting – and lawyers, as we know, includes a whole variety of different species of individuals, solicitors, partners in firms, assistant solicitor and law clerks – and how … did the ICAC know that, after the lawyers had left, there wouldn't be a conversation between D3 and PW1 in relation to the offences that were being investigated?  And indeed, that is exactly what happened because, after the lawyers left, D3, PW1, they stepped outside of the restaurant and they do have a conversation which we say is important to our case and we’re trying to adduce that part of the tape.

So, this wasn’t deliberate and intentional.

….

… if it were the case that the court concluded that there was no deliberate and intentional bugging in this case, then it would be open to the court to adopt a different approach.”

(Emphasis added). 

35.It is as well at this stage to pause to summarise how the prosecution were, after the weekend adjournment and having reconsidered their position, putting their case.  They were saying:

(1)         that they were instructed that the conversation that had taken place was not in fact privileged – a suggestion never put to Mr Fung – but that to determine whether or not it was privileged, the court should listen to the tape;

(2)         that there had been no intention to intrude upon privilege but merely to provide an aide memoire for the assistance of a witness who would in any event be able to give oral testimony about the conversation;

(3)         that the ICAC had been justified in the decision taken because they believed that the conversation to be taped would provide further evidence of the offences in respect of which the defendants had been arrested, namely corruption and false accounting and, further because the conversation might provide or had the potential to provide evidence for the offence of obstruction of justice; and

(4)         that the ICAC had been justified in the decision they took, for how else were they going to record conversations that would take place when the lawyers were not present.

36.If that is how matters had been left and had the judge based her decision not to hear evidence on what Mr Surman had thus far said, then there could be no possible criticism of the outcome at the hands of the District Court judge, for the motives suggested could not conceivably provide any justification for the recording of a privileged conversation.  But that is not all that he said.  Towards the very end of his oral submissions, he referred to suggestions in witness statements by Tang that Tang had been asked by Leung to find some acceptable or exculpatory reason for the purchase orders; to say that they were in connection with payment for services in fact provided.  In this regard, he said he wanted to produce evidence of the meeting between Tang and Leung on 11 November “so that you get a full flavour of what went on prior to the recorded meeting” (page 147); “so that you will be in a position to judge the conduct of the ICAC on the 16^th and the motivation and the reasons behind them recording, covertly recording, the meeting on 16^th”(page 149).  He did not show the court any transcript of the meeting on 11^th or any witness statement about it, saying that he was loathe to do so because the judge might, if the stay application were refused, be influenced thereby at the trial of the substantive issues.

Premised facts

37.In this latter regard, the judge had before her the ‘premised facts’.  Those premised facts included the fact that Tang had informed the ICAC that he had been asked to attend a lunch with D3 and a lawyer on 16 November and that having been informed about this, the ICAC had arranged the covert taping of the luncheon meeting.  Deleted from the proposed premised facts in document MFI 2 was the paragraph referred to by counsel in their early submissions: “PW1 told by the ICAC prior to the meeting that instructions given – if any – by lawyer – may relate to an offence of obstructing justice.  Further informed by ICAC of legal professional privilege.”  Although this was deleted, its essence was revived by paragraph 7 of MFI 3, the third set of premised facts, which were lifted from the written stay application submitted by Mr Cheng:

“7.       The ICAC were aware that this was to be a meeting between D3 and PW1 and his lawyers.  Obviously D3 was not aware that PW1 was cooperating with the ICAC nor that the proceedings were to be recorded by him.  The explanation given by the ICAC to PW1 for recording such a conference was that they:

‘had reason to suspect that D3 and Keith Leung  (another ABB employee) might instruct me to make false statements to the ICAC officers, which might be an offence of obstructing the course of justice.  As a result, the ICAC had reason to believe that D3’s purpose in asking me to meet the lawyer together with him might be to instruct me to make false statements.’

8.        The ICAC told PW1 of his own right to privileged communication with the lawyer should he be offered advice.”

(Emphasis added).

The authorization

38.The application to authorise the recording was submitted on 15 November to a principal investigator, Ng Ping-kwok.  Of note in that authorisation is the statement of the offences alleged or suspected, namely section 4 of the Prevention of Bribery Ordinance, section 19 of the Theft Ordinance “and perverting the course of justice.”  Under the heading “Persons to be recorded – if known” are the names of D3, Tang, Leung and then “and unknown persons” with no reference anywhere in the request to the presence of lawyers.  A blank is left under the further subheading of “Other persons – non-suspects – whose privacy may be infringed, details of possible infringement.”  Reference is made to previous covert recordings including the conversation between Tang and Leung on 11 November.  As to the evidence sought it is said: “Audio taped evidence is sought to corroborate offences under s 4(1) POBO and s 19 Theft Ord. alleged by Tang against [D3], Leung and others.  Evidence of a possible offence of perverting the course of justice can also be secured.” 

The rulings

(a) On the question of evidence

39.In refusing the application by the prosecutor to call evidence, the judge noted that the prosecution had had little time to digest the basis of the defence applications but that nonetheless it must or ought to have been obvious to the prosecution that an allegation was being made of deliberate eavesdropping by the ICAC.  She then said this:

“The likelihood of D3 and the solicitor talking about totally unrelated matters only, during this meeting, was negligible.  I find no basis to this point.”

What the judge was there saying, it seems, was that in so far as the prosecution might be suggesting that it was not anticipated that legal professional matters would be covered by the conversation, that suggestion was untenable.  But she then moved on to the gravamen of the matter as it is now presented, namely, the assertion that there was thought to be good cause for suspecting that the restaurant conversation was for a purpose that was not protected by professional privilege.  Whatever one might say about the various reasons advanced by the prosecutor for the decision to record the restaurant meeting, and though it might be said that the reason now addressed had been buried amongst the others, the fact remains that the judge was apprised of the issue now presented as justification for the decision to record:

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

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

It is very questionable whether the authorisation for the covert taping, signed pursuant to ICAC guidelines, was, on the face of the document, properly issued even under their own internal guidelines.  There is no mention of the fact that the solicitor was to be present at the meeting and there was no basis set out as to why an offence of perverting the course of justice was possible.

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

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

(Emphasis added).

She noted that the prosecution was seeking to resile from a fact which had been agreed for the purpose of submissions, namely, that the conversations were in fact privileged and adding that these were not circumstances in which rebuttal evidence would be allowed, she refused the application to call fresh evidence and she refused also the application that she should listen to the tape of the 16 November meeting.

(b) On the stay application

40.The judge’s ruling on the question of stay of proceedings is revealing.  She reminded herself of the gravity of such applications and of the fact that the consequence of allowing this one would be to deprive the prosecution of its right to a trial.  She noted that the ICAC had informed Tang of his right to claim privilege in relation to what was going to happen at the meeting, and she noted that the record of conversation had been listened to thereafter by Tang and two ICAC officers when Tang was asked to confirm that the contents of the tape were correct.  She was satisfied that:

“… the ICAC deliberately and intentionally recorded a conversation between D3 and his solicitors, knowing that legal advice would almost certainly be given and would almost certainly cover matters relating to the raid, which meeting would, therefore, be prima facie privileged.  The fact that they warned PW1, prior to the meeting, that he would have a right to privilege in relation to any advice given during the meeting and that they obtained his waiver prior to the meeting clearly shows that it was in their mind at that stage.”

She then noted that the only relevant circumstance in which such an interception was permissible was if the law enforcement authority had grounds to believe that the meeting with the lawyer ‘was concerned in the furtherance of some criminal activity’.  She noted that there was no mention in the application for authorisation that solicitors would be present and she added this:

“It is also of note that, although there is reference to the possibility that evidence of a possible offence of perverting the course of justice being secured, there was no factual or, indeed, any basis to such belief set out in the document. … In this case, no mention was made in the application that solicitors’ communications not just might but would be picked up.  There was reference to the possibility of an offence of perverting the course of justice taking place.  There has been no evidence of such an offence taking place since but, more importantly, the ICAC were relying upon the claimed impropriety of Keith Leung was not present at the meeting, was not expected to be there, and is to play no part in these proceedings… in this case, there was no need to carry out the covert recording of this meeting.  The ICAC had PW1 working inside the company; he was providing them with the necessary documentation and other covertly taped conversations.  They were only looking for evidence to corroborate their case, as stated in the application for the authorisation.

….

In this case, it was, in my judgment a cynical and flagrant infringement of D3’s rights to legal professional privilege as, I repeat, it was unnecessary and they knew precisely the nature of the problems they were getting to.  They had sufficient evidence.  They had, inter alia, PW1 and the necessary documents obtained in their search operations.

In the authorisation, reference was made to obtaining evidence which would corroborate the section 4(1) Prevention of Bribery Ordinance offence.  They sent PW1 into the meeting advising him of his right to legal professional privilege and obtained a waiver from him first.”

Law

41.A permanent stay of criminal proceedings is justified only in highly exceptional circumstances.  Those circumstances are discussed in HKSAR v Lee Ming Tee and another (2001) 4 HKCFAR 133, in which it was emphasized, at pp 148, 149, and 151, that:

“… In general if a prosecution is brought, the court’s duty is to try the case. … However, the court also unquestionably has jurisdiction to stay criminal proceedings brought by the Secretary [for Justice] in the exceptional cases where such a course is justified.  That jurisdiction rests on the court’s inherent power to prevent abuse of its own process … .

In most such cases, the court only grants the stay because, notwithstanding the range of remedial measures available at trial, a trial for the accused is found to be impossible and continuing the prosecution would amount to an abuse of process.

….

A second line of stay cases ... proceeds on a different basis.  These are the rare cases where the court is prepared to grant a permanent stay even though a fair trial undoubtedly remains possible.  The leading authority is the decision of the House of Lords in R v Horseferry Road Magistrates Court Ex parte Bennett [1994] 1 AC 42, where, although the fairness of the trial was not in question, the court granted a stay because the circumstances involved an abuse of power which so offended the court’s sense of justice and propriety that the entire prosecution was tainted as an abuse of process.

….

… in cases where a fair trial remains possible even though official misconduct may be involved in the bringing of the prosecution, the courts does not exercise the jurisdiction to stay proceedings as a means of disciplining the police or prosecuting authorities. ... The public interest lies in the guilt or innocence of the accused being fairly and openly determined at trial.  For this to be displaced, powerful reasons must exist for concluding that such a trial, although fair, would nonetheless constitute an intolerable abuse of the court’s process.  The instances where such an argument has any prospects of success must necessarily be very rare.”

42.What must be shown if there is to be stay other than on the basis that an applicant has been deprived of the opportunity of a fair trial, is an abuse such as to amount to ‘an affront to the public conscience with severe consequences for public confidence in the administration of justice’: see HKSAR v Lee Ming Tee and Securities and Futures Commission (Intervener) (2003) 6 HKCFAR 336 at 395: or, put another way, ‘where irreparable prejudice would be caused to the integrity of the judicial system if the prosecution were continued’: see R v O’ Connor (1996) 130 DLR (4^th) 235 at 277). 

43.Where it is suggested in answer to an allegation of misconduct on the part of a law enforcement authority such as to be an affront to the public conscience, that the act relied upon as constituting misconduct has not taken place, then the issue could not possibly be decided conscientiously absent a determination of the facts and, in all or almost all cases, that will require a hearing.  Similarly where the impugned acts are admitted but it is alleged that in the particular circumstances of the case they do not amount to a grave affront because, for example, there was good or excusable reason for the conduct then, again, it is difficult as a rule to see how a court could properly dismiss that answer without hearing evidence; and it is right to recall the remark of Sir Anthony Mason in the second Lee Ming Tee judgment, at page 395, that in the absence of bad faith the standard required to justify a stay on the basis of prejudice to the integrity of the legal system “will rarely, if ever be satisfied where a fair trial is still possible.  Even if there be a finding of ‘bad faith’, that finding would not necessarily conclude the matter.”  What the judge has to do, he said, at page 395, is “to weigh the countervailing considerations of policy and justice and then, in the exercise of the discretion, decide whether there is an abuse which requires a stay.”

44.The affront to the public conscience in this case is said to have been the deliberate decision to record a conversation at which it was known by the ICAC that lawyers would be present in their capacity as legal advisers.  On its face, any decision by a law enforcement officer to eavesdrop upon or to record covertly a conversation which he knows to be between an individual and his legal adviser is an affront to the rule of law and cannot be countenanced, unless there exists strong justification for the action taken.  It is not possible for a rights-based system of law to work if individuals cannot be assured that they may consult freely with their lawyers without fear that what they say and what is said to them is being overheard by outsiders.  There is no point in according to those accused of crimes the right to legal advice and representation unless confidentiality of communication is secure, and the courts must be the firm guardian of that principle:

“The fundamental justification for the sixth amendment right to counsel is the presumed inability of a defendant to make informed choices about the preparation and conduct of his defense.  Free two-way communication between client and attorney is essential if the professional assistance guaranteed by the sixth amendment is to be meaningful.  The purpose of the attorney-client privilege is inextricably linked to the very integrity and accuracy of the fact finding process itself.  Even guilty individuals are entitled to be advised of strategies for their defense.  In order for the adversary system to function properly, any advice received as a result of a defendant’s disclosure to counsel must be insulated from the government.  No severe definition of prejudice, such as the fruit-of-the-poisonous-tree evidentiary test in the fourth amendment area, could accommodate the broader sixth amendment policies.  We think that the inquiry into prejudice must stop at the point where attorney-client confidences are actually disclosed to the government enforcement agencies responsible for investigating and prosecuting the case.  Any other rule would disturb the balance implicit in the adversary system and thus would jeopardize the very process by which guilt and innocence are determined in our society.”

United States v Levy 577 F. 2d 200 (1978) at 209.

45.The appellants rightly rely, as they did in the District Court, upon two decisions of the English courts, by which proceedings were stayed because eavesdropping by law enforcement authorities on communications between client and solicitor was held in the circumstances of each case to amount to an affront of the type warranting a stay.  Those decisions are R v Grant [2005] 3 WLR 437, and Sutherland (see para [25] above).  In Grant, the defendant was charged with conspiring to murder his wife’s lover.  Privileged communications between solicitors and their clients were deliberately recorded by police in an exercise yard, and it was held that:

“52.      Acts done by the police, in the course of an investigation which leads in due course to the institution of criminal proceedings, with a view to eavesdropping upon communications of suspected persons which are subject to legal professional privilege are categorically unlawful and at the very least capable of infecting the proceedings as abusive of the court’s process.  So much seems to us to be plain and obvious and no authority is needed to make it good.  The only question that requires examination is whether such proceedings ought to be characterised as an abuse of the process, and the prosecution stopped, if the defendant or defendants have suffered no prejudice in consequence of the relevant unlawful acts.

….

54.      … we are in no doubt but that in general unlawful acts of the kind done in this case, amounting to a deliberate violation of a suspected person’s right to legal professional privilege, are so great an affront to the integrity of the justice system, and therefore the rule of law, that the associated prosecution is rendered abusive and ought not to be countenanced by the court.

….

56.       Where the court is faced with illegal conduct by police or State prosecutors which is so grave as to threaten or undermine the rule of law itself, the court may readily conclude that it will not tolerate, far less endorse, such a state of affairs and so hold that its duty is to stop the case.”

46.The same principles are echoed in Sutherland's case, although that case is noteworthy for the tribunal’s exhaustive examination of the facts necessary before a proper conclusion could be reached.  Without for one moment detracting from the strong general principles there stated, it is to be noted that the phraseology used (‘capable of infecting the proceedings’; ‘in general’; ‘may readily conclude’) recognizes that the ultimate decision is fact-sensitive.  In other words, there may be cases where, unusually no doubt, strong cause is shown for the decision taken to eavesdrop upon such communication even though it later transpires that the communication was in fact a privileged one.  So, for example, if there be demonstrated to have existed cogent reasons to believe that the occasion was to be used to further a free-standing criminal purpose, it is unlikely that a court will order a stay of prosecution simply because it transpires after the event that the communication was not in fact for such an illicit purpose.

47.The relevance of the example given is that communications which are criminal in themselves or intended to further a criminal purpose are not protected by legal professional privilege, because legal professional privilege protects communications made in the ordinary course of the solicitor-client relationship and, as was emphasised in The Queen v Cox and Railton (1884) 14 QB 153, at 167, “a communication in furtherance of a criminal purpose does not come into the ordinary scope of professional employment.”  Loss of the privilege does not necessarily depend on the complicity of the solicitor in the criminal design:

“In order that the rule may apply there must be both professional confidence and professional employment, but if the client has a criminal object in view in his communications with his solicitor one of these elements must necessarily be absent.  The client must either conspire with his solicitor or deceive him.  If his criminal object is avowed, the client does not consult his adviser professionally, because it cannot be the solicitor's business to further any criminal object.  If the client does not avow his object he reposes no confidence, for the state of facts, which is the foundation of the supposed confidence, does not exist.”

Cox and Railton above, page 168.

48.That said, such cases, in other words cases where a client uses his solicitor in order to further a criminal purpose, must be distinguished from cases in which a client uses a solicitor as the innocent vehicle for putting forward a bogus defence.  It can hardly be asserted that every time a client consults a solicitor and puts to him an account, whether in civil or in criminal proceedings, that is ultimately found to be untrue, that the consultation was, for that reason, not a protected one:

“… the common law principle of legal professional privilege cannot be excluded, by the exception established in Reg. v. Cox and Railton, 14 Q.B.D. 153, in cases where a communication is made by a client to his legal adviser regarding the conduct of his case in criminal or civil proceedings, merely because such communication is untrue and would, if acted upon, lead to the commission of the crime of perjury in such proceedings."

per Lord Goff of Chieveley in R v Central Criminal Court Ex parte Francis & Francis [1989] 1 AC 346, at 397.

49.And, to the same effect, Glidewell LJ said in R v Snaresbrook Crown Court Ex p Director of Public Prosecutions [1988] QB 532 at pp 537-538:

“Obviously, not infrequently persons allege that accidents have happened in ways other than the ways in which they in fact happened, or that they were on the correct side of the road when driving when actually they were on the wrong side of the road, and matters of that sort.  Again, litigants in civil litigation may not be believed when their cases come to trial, but that is not to say that the statements they had made to their solicitors pending the trial, much less the applications which they made if they applied for legal aid, are not subject to legal privilege.  The principle to be derived from Reg. v Cox and Railton, applies in my view to circumstances which do not cover the ordinary run of case such as this is.”

50.It is said in the present case that the purpose, so it was thought, for which consultation was to take place with the solicitors at the restaurant was to further an attempt to pervert the course of justice, namely, the fabrication of a story to pass off to the investigating authorities as genuine, the bogus purchase orders that had been created, an attempt that, if successful, might stave off a prosecution.  In this regard, it is not to be concluded that privilege automatically applies to any solicitor-client communication that takes place after litigation, criminal or civil, commences, and by commencement of litigation we would include for present purposes events after arrest:

“… the mere fact that litigation has begun does not prevent the application of the fraud exception to legal professional privilege.  But it also shows that the exception may not apply if what is in issue is merely an issue in the proceedings, eg a denial of having committed a crime or (as discussed in the Hallinan case) an assertion of an alibi or telling a lie to a solicitor about the side of the road on which one is driving.  The fraud exception is more likely to apply if the evidence of criminality is “freestanding and independent”.”

See: Kuwait Airways Corpn v Iraqi Airways Co [2005] 1 WLR 2743, at 2746, where Longmore LJ provided two examples, the first where a criminal conspiracy is hatched before litigation, at which stage no privilege attaches to an inquiry made to a solicitor in furtherance of that conspiracy.  But at a later stage of that story:

“31. … In the course of the litigation, the conspiracy has to continue and may well, indeed, be “improved” by the concealment of evidence that does exist or the invention of evidence that does not exist. … That is all in furtherance of a conspiracy that constitutes the antecedent transaction.  It would be little short of absurd to say that the fraud exception applies until litigation is contemplated but thereafter it does not apply.  Furthering the same criminal purpose after litigation begins (or is contemplated) cannot attract privilege any more than the original criminal purpose did.  This is shown by civil fraud cases such as to Dubai Bank Ltd v Galadari (No 6), The Times, 14 October 1992 ... where there was an undoubted antecedent fraud but the fraud exception continued to apply to prevent privilege being used to “stifle” that antecedent fraud. …

32. Secondly, take a criminal purpose which only came into existence after litigation has begun.  On the authority of the Snaresbrook case [1988] QB 532 and the Francis case [1989] AC 346 merely giving to a solicitor an untrue statement about issues in the proceedings will not forfeit privilege.  But a criminal conspiracy, particularly if it is separate from the actual issues in the proceedings albeit (inevitably) related to them, will be a self-standing criminal purpose outside the issues in the proceedings and privilege will not attach; that is shown by the Hallinan case [2005] 1 WLR 766.”

51.Hallinan, which is there referred to, was a case in which P had been arrested and charged with several offences including an offence of possession of cocaine with intent to supply.  P’s solicitors had in their possession a witness statement from K who claimed to have been present at P’s arrest.  There was evidence that K and P and a barrister’s clerk had conspired to pervert the course of justice, which was constituted by the making by K of a false entry on a computer diary as to where she was at the time of P’s arrest.  The thrust of the false evidence which K was preparing was that she saw the police planting the cocaine on P.  The police sought to obtain from P’s solicitors a witness statement and other material pertaining to K, an attempt that the solicitors resisted on the basis that the material was subject to legal privilege.  The judge at first instance, as well as the Divisional Court, held that the material was not privileged from production since the items had reached the solicitors in furtherance of a continuing purpose of perverting the course of justice.  Rose LJ noted, at p 770, that “conspiracy may be, and often is, a continuing offence capable, certainly in the case of conspiracy to pervert justice, of being ‘improved’ by assistance from legal advice”.  He concluded at p 771:

“It is a truism that whether material is legally privileged depends on the circumstances of the particular case.  In order to defeat a claim to legal professional privilege, it will not be appropriate, for example in a case where an alibi has been raised, to seek to analyse the issues which are likely to arise in the criminal investigation or trial which gives rise to the initial privilege.  To do so, as it seems to me, would be to put the cart, in the form of analysis of the issues, before the horse, that is the trial.  Where, however, there is evidence of specific agreement to pervert the course of justice, which is freestanding and independent, in the sense that it does not require any judgment to be reached in relation to the issues to be tried, the court may well be in a position to evaluate whether what has occurred falls within or outwith the protection of legal professional privilege as explained in R v Cox and Railton 14 QBD 153.

26.      In the present case, as it seems to me, the judge was fully entitled to conclude that the material here sought had reached the entirely innocent claimants from his client and/or others, whose intention, it could be inferred, was to further their continuing purpose of perverting the course of justice.”

52.It is worthy of note that in Hallinan the accused had been charged with possession of cocaine, and it appears that his defence was that the cocaine had been planted on him by the police.  The conspiracy to pervert was directly related to that defence yet was said to be free-standing from the issues to be determined at trial.  There may, it seems to us, be cases where the dividing line is not clear cut.  In the present case, the perversion of the course of justice which is said by the prosecution to have been afoot both before and after ABB personnel had been arrested was the creation of bogus purchase orders and instructions to Tang to concoct stories to back them up.  It is said that it was thought that the meeting with the solicitors was to be used to run that false story through them before interview with the ICAC as a vehicle for testing the worth of, or for improving upon, the stories.  If one stopped there, then it might be said that the situation was analogous to that in Hallinan, but the difference is that in the present case there was already an arrest directed partly to the act of perversion itself, said to take the form of false accounting.  The running of a story past solicitors which was a defence to a false accounting allegation would seem to us to be in the ordinary course of consultation about the very charge contemplated and therefore probably privileged.

53.Be that as it may, Mr Surman, resiling from his earlier stance wished to argue that the communication was not in fact privileged.  The issue was not however one that was ever determined by the judge in the District Court.  It seems to have been assumed by her that privilege in fact applied, and that that issue was clear cut.

54.The question arose in the course of arguments before us as to the weight of evidence of impermissible purpose that might warrant an intrusion by a law enforcement authority upon a solicitor-client communication. Such intrusions and the circumstances in which they might be authorized are now the subject of legislation, namely, the Interception of Communications and Surveillance Ordinance No. 20 of 2006, so what we say in this regard is not likely to have impact on future cases.  Mr Zervos SC asserted that such intrusion was warranted if there was a prima facie case of a prohibited, non-privileged, purpose.  We disagree.  Mr Dykes SC took us to a series of authorities in the sphere of non-criminal cases in which the threshold that would warrant disclosure of documents for which privilege was claimed is set higher than that suggested by Mr Zervos.  As the law stood at the date of these investigations, it would in our opinion have required strong evidence of a prohibited purpose to have justified intrusion.

Analysis

55.Whether there was strong evidence of such impropriety as would denude the communications of their privilege was an issue of fact for the judge to determine; but even if there was not, that is not necessarily the end of the stay inquiry that the court was required to conduct.  Mr Caplan QC contended that where there is a deliberate decision by a law enforcement authority to invade a meeting between solicitor and client an abuse of process such as to require a stay of proceedings is automatically constituted, unless there was strong prima facie evidence that the meeting was to be used for an unlawful purpose.  This became known in the course of the appeal hearing as the automatic red card argument.  Whilst we can see that the proposition has considerable force, there was discussion in the course of argument whether that result could be predicted as invariable, an automatic red card, remembering that the court is to examine at the end of the day whether in the circumstances of the particular case, the conduct was an affront to the public conscience.  We canvassed as an example a hypothetical case where there had been a genuine error of judgment as to whether the suspected unlawful purpose of the communication was free standing, and we are of the opinion that the hard-edged automatic red card proposition, devoid of case-specific factual context, goes too far, as we think Mr Caplan was minded to concede.

56.The question is always case and fact specific.  As was said in Grant, a deliberate violation of a suspect’s right to privileged legal advice will in general be so great an affront to the integrity of the system that the prosecution will be rendered abusive.  That said, a number of questions in such cases have to be asked and answered: was the occasion one that prime facie was privileged; if so, was the intrusion carried out with knowledge, or where the authority ought to have known, that the occasion was privileged; if the occasion was privileged, was there nonetheless strong ground for believing that it was not protected by privilege; and if there was not strong ground, is there, even so, something in the reasons put forward by the law enforcement authority for the conduct – assuming that the evidence of those reasons is believed – that takes the situation out of one that would, but for that reason, be condemned as an affront to the public conscience?  As to that last question, it is not possible, and it is not wise, to speculate what may suffice but we would suggest that ignorance of the law of privilege would not, for there lies a slippery slope.

57.None of these questions was asked by the judge and what evidently Hartmann J was that without hearing evidence of the suggested justification advanced by the ICAC, the judge disabled herself from conducting the weighing exercise, the inquiry, that ought to be conducted in such cases.  He noted that whilst not conclusive against a stay, the absence of bad faith might in a given case be a material factor, yet that issue was not determined in this instance.

58.Some of the reasons put forward by the prosecutor would not begin to justify the decision taken to record the meeting.  But the fact is that the judge alighted upon the one reason that did warrant an inquiry, namely, the suggestion that it was thought that the meeting was to take place for an unlawful purpose.  In coming to her conclusion on the application to call evidence, she was influenced in a number of aspects that call for comment:

(1)         that there was an assertion of solicitorial complicity, which was a very serious allegation to make, and in respect of which mere suspicion was not enough.  There was no overt allegation of complicity by the solicitor, though one might have been implied by the suggestion that whoever had listened to the tape had concluded that the communication was not or might not be protected.  Counsel made it clear immediately after the ruling that there was no suggestion of complicity, but that assurance did not, apparently, make a difference to the judge.  The judge seemed to assume that an unlawful communication could only be constituted with the illicit cooperation of the solicitor;

(2)         that the authorization was inadequate.  That would seem obviously correct, but that particular point went to the question whether there should be a stay, not whether evidence should be permitted;

(3)         that the tape of 11 November related to a conversation between Tang and Leung at which none of the defendants was present and, further, that Leung was not present at the meeting on 16 November.  But if, as is the prosecution case, what transpired between Tang and Leung on 11 November was part of the factual background that motivated the decision to record the restaurant meeting, then the conversation of 11 November was relevant; and

(4)         that “no separate action of a criminal nature has been brought on the basis of the meeting of 16 November.  It is thus very questionable as to whether such evidence would take the matter any further.  The nexus is quite strained.”  This again was to confuse the decision whether to allow testimony to be called with the decision whether the recording in itself may have been justified and, even if not, was conduct that warranted a stay.  Whether the question of criminal proceedings was ever on the table and if not why not, one has, in the absence of evidence no idea; but in any event the issue was what was in the minds of the decision makers on and before 16 November.

59.It is these errors of reasoning in the judge’s decision as to whether to permit the prosecutor to call evidence that motivated Hartmann J to quash that decision and to remit the matter to the District Court for the application to be heard afresh in accordance with law.  We agree that because of these errors the decision of the judge refusing the prosecutor’s application fell to be quashed, and we agree too with the intimations of Hartmann J in the course of his judgment that it is difficult to see how the application to stay in this case based on the issues at hand could fairly be decided in the absence of evidence from the law enforcement authority.  None of this is to make any judgment as to the ultimate strength or weakness of the prosecution position on the substantive stay application.  In saying that, we do not undermine the signal importance of legal privilege, nor suggest that anything other than a most searching inquiry into any suggested justification for an invasion of solicitor-client communication is called for.  But the same respect for the rule of law that requires strong justification for any deliberate invasion of communications that are prima facie privileged also requires that the determination of any application to stay criminal proceedings be conducted with due regard to standard procedures for determining relevant issues of fact.  There is sometimes a danger in so recoiling at apparent executive abuse as to rush to judgment.  An initial impression may often be proved well founded, yet still the courts have an adjudicative function to perform and must perform it.

60.It may be said – indeed has been in this case – that the prosecutor had his chance and did not take it, and it was too late for him to change his mind, and that in any event the question was one for the exercise of the judge’s discretion.  As to the exercise of the judge’s discretion, she did not exercise it on the basis that it was all too late: she exercised it for the substantive reasons we have recited.  It cannot be said that the prosecutor’s approach was other than unsatisfactory and it is a matter of some surprise that he realized as late as he did what the core issue was.  That said, there could be no prejudice occasioned to any of the defendants had his application to call evidence succeeded.  As we have seen, Mr Duncan anticipated at one stage that after he had called the solicitor as a witness, Mr Surman would only then decide what evidence, if any, to call.  Messy though the proceedings had been – a mess to which most of the parties contributed – the lateness of the application was in the circumstances of no great significance.  

61.It is argued that nonetheless there is no point in sending the matter back for the application for a stay is destined to succeed.  This argument depends in large part on what became known as the ‘red card’ argument before us namely, that any decision deliberately to intrude on privileged communication must necessarily amount to an abuse that so shocks the conscience that a stay must follow.  We have explained why we think this goes too far.  But it is then said that this Court knows what the suggested justification is and that on any view it hinges on mere suspicion and, as seems suggested by the authorization and by what prosecuting counsel said to the judge, is an afterthought, watered down by other reasons of no conceivable merit.

62.In deciding whether the judge’s decision not to allow evidence to be called was a decision with which we might properly interfere, we restricted ourselves to the material that was before her when she made that decision.  In deciding whether there is merit in the contention that there is no point in remitting the case, we are entitled to examine what evidence it is said will be placed before the District Court were the matter remitted.  That evidence includes a contention that it was anticipated that the restaurant meeting was to be used to convince Tang to lie to the ICAC and that it was thought that the chance of a lawyer, as opposed to a solicitor’s clerk, being present was remote, not least because the venue was not a lawyer’s office; and there is also an implicit assertion as to why the presence of a clerk as opposed to a solicitor made a difference to the investigators’ perception of what might transpire.  It is said that to cater for the ‘unlikely event’ of a lawyer being present, Tang himself was told that if in fact legal advice was given to him at the meeting, he could claim privilege in relation to anything said.

63.Were this evidence to be adduced, then it will inevitably be the subject of cross-examination and no doubt submissions will be made about it in the context of the whole.  We cannot say what view will be taken of its veracity, nor what assessment would be made by a judge as to whether in the light of it there has been an affront of the type that warrants a stay.  What we are not prepared to do is to forecast how matters will transpire or to say that a stay is inevitable.  There may be a stay.  There might not be.  But the gun should not be jumped.

64.Accordingly, the appeal is dismissed.

Addendum

65.A note must be sounded about practice in relation to stay applications.  Such applications have now become frequent at all first instance levels.  It is unacceptable to spring these applications upon the prosecuting authority and upon the courts without proper notice both as to the grounds of the application, supported by written argument, chronology where appropriate, and the cases to be cited.  If ample notice is not given the court should of its own motion and in the absence of sound reason to the contrary, vacate the hearing.

Mr Kevin P Zervos SC, SADPP & Ms Winnie Ho, SGC of Department of Justice for the Applicant

Mr Jonathan Caplan QC, Mr Michael Blanchflower SC, Ms Charlotte Draycott & Ms Maggie Wong instructed by Messrs F. Zimmern & Co. for the 1^st Respondent

Mr Gary Plowman SC, Mr Philip Dykes SC, Mr Keith Yeung & Mr Derek Chan instructed by Messrs Boase, Cohen & Collins for the 2^nd Respondent

Mr Paul Harris SC & Ms Ody Lai instructed by Messrs Haldanes for the 3^rd Respondent

Mr Paul Harris SC & Ms Ody Lai instructed by Messrs Haldanes for the 4^th Respondent