HKSAR v. Wong Hung Ki and Another

CACC 424/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 424OF 2008

(ON APPEAL FROM DCCC NO. 687 OF 2004 (PART A))

BETWEEN

Before: Hon Stock VP, Hartmann JA and Wright J in Court

Date of Hearing: 26-28 January 2010

Date of Reasons for Judgment: 11 May 2010

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REASONS FOR JUDGMENT

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Hon Stock VP (giving the reasons of the Court):

Introduction

1.In December 2008, the appellants were convicted by Judge Andrew Chan in the District Court of two offences of conspiracy to offer an advantage to public servants and two offences of conspiracy to falsify accounts. Each was sentenced to a total of five years’ imprisonment and each sought leave to appeal their convictions and sentences.

2.On 28 January 2010 we granted leave to appeal against conviction, treated the hearing of the applications for leave as the appeals, allowed the appeals and set aside the convictions and sentences. We ordered a permanent stay of the proceedings insofar as they affect these two appellants. We said that we would give our reasons later. These are our reasons.

Procedural history

3.The trial was first scheduled to take place before Deputy Judge Livesey in June 2005. An application was made to her for a permanent stay of proceedings. The basis of the application was an alleged abuse of power on the part of the Independent Commission Against Corruption (ICAC). The argument was that the ICAC had intentionally breached legal professional privilege by covertly recording a meeting at which one of the applicants received legal advice from his solicitors. Judge Livesey held that the ICAC had committed a flagrant infringement of D3’s right to legal professional privilege and ordered the proceedings to be stayed.

4.That decision was the subject of an application for judicial review which was determined in the respondent’s favour by Hartmann J (as he then was)[1]. His decision was affirmed in December 2006 by the Court of Appeal[2] which described the proceedings in the District Court as a procedural mess. Counsel for the prosecution had initially conceded that the meeting was covered by legal professional privilege, then sought to retract that concession and, having earlier indicated that he did not intend to call witnesses, then applied to call witnesses after all. Judge Livesey refused his application to call evidence. This Court held that she had erred in doing so, for without hearing evidence of the suggested justification for monitoring the meeting, the judge had disabled herself from ascertaining whether there had in fact been good reason for conduct which, on its face, was unlawful. The appeal from Hartmann J was dismissed, leaving in place his order that the case be remitted to the District Court for a fresh determination.

5.A subsequent application to the Court of Final Appeal for leave to appeal was dismissed.[3]

6.Thus the matter came before Judge Chan. There were four defendants including these two appellants who were D2 and D3 at trial. They renewed the application for a stay of proceedings. There was an extensive hearing on that issue. On 27 June 2008 the application was dismissed although the reasons for the dismissal were not given at that stage.

7.There was then an application that the judge recuse himself from hearing the trial of the substantive issues. The contention was that during the stay application he had considered evidence which would be inadmissible at trial and had come to conclusions which, it was said, rendered it inappropriate for him to continue. He rejected that application.

8.The case then proceeded to trial of the substantive issues though not in relation to D1, with whom we are not concerned, because he was ill. There remained three defendants: D2, D3 and D6.

9.On 4 December 2008 the judge convicted these two appellants of the four charges they faced and D6 in respect of two charges. On the same day, he delivered his reasons for dismissing the stay application.

10.We were no longer concerned with D6 who had abandoned her applications against conviction and sentence: those applications therefore stood dismissed.

The grounds of appeal

11.The grounds of appeal fell into three categories: the contention that the judge erred in dismissing the stay application; the argument that he ought to have recused himself; and grounds relating to the substantive issues at trial.

12.In the event, it was not necessary to address any of the grounds save those relating to the stay application, for it was upon the issue of abuse of process that the appeal was determined.

The alleged offences

13.In its judgment in Shum Chiu, this Court summarised the allegations behind the charges. It suffices for present purposes to repeat that summary:

“6.  … [D3] 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 [Shum] and D2 [Wong] 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 the contractors nominated by the Housing Authority would choose these particular suppliers rather than others, certain Housing Department officials were bribed to secure [the exercise of] pressure on [the contractors] 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.”[4]

The suggested abuse

14.The abuse of process in this case was said to be constituted by the fact that on 16 November 2002 officers of the ICAC tape-recorded a conversation at Amaroni’s Restaurant in Festival Walk, a well-known shopping mall in Kowloon, and by the fact that on 21 November 2002, ICAC officers listened to the recording of that conversation.

15.The conversation at the restaurant took place between an alleged co-conspirator, Tang (PW1 at trial), D3 and two solicitors from the firm of Haldanes, namely, Mr Fung and Mr Booth. It was argued that before the meeting took place the ICAC knew or ought to have known that this was to be a conversation covered by legal professional privilege and that, in any event, they clearly knew after the meeting but before they listened to the recording that the conversation was covered by that privilege but that the decisions to monitor and to listen were made in reckless disregard of the right to confidentiality. Tang also listened to the recording, after which he made a full statement to the ICAC which contained several material changes to statements earlier made.

16.It was said by the appellants before the trial judge that they should succeed in their stay application for two reasons:

(1)	that there had been a deliberate infringement of legal professional privilege which constituted so grave an affront to the court’s sense of justice and propriety that the proceeding should be stayed for that reason alone; and
(2)	in relation to D2, that whilst his privilege had not been infringed, he could not, by reason of the privilege that reposed in D3 and which D3 did not waive, have access to what had transpired in the course of that conversation to which the ICAC had become privy, so that he could not have a fair trial.

17.In allowing this appeal and ordering a permanent stay, we concluded that the trial judge had failed to make findings of fact on central issues, erred in some of the findings he did make, and that the circumstances in which the ICAC had on 21 November 2002 listened to the conversation taped on 16 November 2002 constituted a deliberate infringement of legal professional privilege which, in all the circumstances, amounted to a grave affront to the court’s sense of justice or, put another way, to the conscience of the public – to whom must be attributed, for these purposes, an appreciation of how the rule of law is impacted by such a deliberate infringement – and which in the case of D2 deprived him of a fair trial.

Tang’s evidence

18.In order to explain our findings, it is necessary to rehearse the factual history in some detail. Some of the historical background is common ground but some not. Important issues of credibility were raised and assertions were made that the judge failed to make important findings of fact in relation to them. We agree with that criticism and for that reason it is necessary also to refer in some detail to the testimony itself.

19.In August 2001 a senior official of the Housing Authority, Chan Kau Tai, was arrested by the ICAC in connection with certain offences of bribery. His arrest and the allegations were widely reported in the media. According to Tang’s testimony, D3 became concerned and gave Tang documents relating to the “gains sharing” activities of the subcontractors and asked Tang to destroy them. He destroyed documents but he kept copies of purchase orders as well as an accumulated record of the alleged collusive tendering business. He subsequently provided these documents to the ICAC.

20.In April 2002 Chan Kau Tai was charged with soliciting and accepting bribes.

21.On 3 May 2002 Tang was arrested. In return for the possibility of an immunity from prosecution, he agreed to co-operate with the ICAC. On the day following his arrest, he agreed to record conversations between D3, other ABB personnel and himself. He continued working at the offices of ABB although his employers were unaware of the fact that he was passing information to the ICAC. In May, August, September and early November 2002 he provided four statements, called “non-prejudicial statements”, to the investigating authority.

22.On 7 November 2002, the ICAC executed search warrants at the offices of ABB and arrested Ann Wong (D6) and Victor Law. They had intended to arrest D3 and Keith Leung as well but they were out of Hong Kong that day. In anticipation of the events of which he had been forewarned, Tang travelled to Shenzhen. On the same day Mr Louis Fung, solicitor, of Haldanes, visited Victor Law in the detention centre of the ICAC and was present when Law was interviewed.

23.There was frequent contact that day between D3’s secretary and Tang and between Keith Leung and Tang. Leung, who was not aware that Tang was in contact with the ICAC and reporting back to them as events progressed, kept Tang up to date with developments and provided him with the telephone number of the lawyer Fung, telling Tang that if the ICAC contacted him, he should say nothing but should telephone Fung to seek assistance. Concern was expressed by Leung in the course of these conversations about what the ICAC would make of the various purchase orders issued by ABB and, according to Tang’s testimony, Leung told Tang to inform the ICAC that the purchase orders had been issued to ABB in respect of services provided to the company in respect of replacement items.

24.There were further telephone conversations between Leung and Tang on 8 November in the course of which concern was again expressed about the potential problem constituted by the existence of purchase orders and Leung said that he and D3 would travel to Shenzhen to discuss matters with Tang. The ICAC instructed Tang to make an excuse not to meet the men in Shenzhen and that in any subsequent discussions with Leung and D3, he, Tang, was to play a passive role and let them speak. Tang managed to avoid Leung and D3 for several days and then returned to Hong Kong.

25.Tang returned to his ABB office on 11 November and there spoke with D3 and Leung. They told him that if the ICAC contacted him, he need not say anything but should telephone Mr Fung to seek his assistance. D3 asked Tang whether he remembered why there were so many service purchase orders issued to other MCB suppliers, and how explanations might be given as to why ABB needed to issue such orders. Tang feigned feeling unwell and went home. There was a similar conversation that afternoon in the course of which D3 mentioned that the lawyer who had been to see Victor Law at the ICAC detention facility had told D3 that Victor Law had spoken to the ICAC and had said that D3 and Tang had attended “gains sharing” meetings. D3 was worried about the purchase orders and asked Tang to find some reasons to suggest that the purchase orders were indeed for the provision of services.

26.Leung requested a further meeting with Tang that night. Tang was again advised by the ICAC to take a passive role. It was arranged for the forthcoming conversation to be taped. The two men met in Shatin. The question of the “troublesome” purchase orders was raised again. Tang was to say that services were indeed provided, in other words, that the MCB suppliers had carried out engineering projects for ABB which were represented by those purchase orders. Tang was to make up stories that would explain why ABB needed such services. Because of the number of purchase orders involved, it was going to be difficult to find explanations. Furthermore, in so far as Victor Law had told the ICAC about “gains sharing” meetings, Tang was to tell the ICAC that he, Tang, had told Law about these meetings as a fabrication to deceive Victor Law into believing that, because of agreements already reached, it was not possible to reduce prices of MCB products as he, Victor Law, had suggested. In his witness statement, Tang said that Leung also told him to ask the lawyer whether he could use this as an explanation or not. Leung had photocopies of documents taken away by the ICAC from ABB; Tang was to look at the documents and try to make up stories to explain the purchase orders.

27.There was a further meeting between Leung and Tang on 13 November; again a discussion about purchase orders and the desirability of finding an explanation for them.

28.On 14 November 2002, D3’s secretary told Tang that D3 had arranged a lunch with a lawyer on Saturday 16 November and asked Tang to attend with D3. The purpose of the meeting was not mentioned. Tang telephoned Mr Lau of the ICAC. According to Tang’s witness statement, an ICAC officer contacted him later to say that the ICAC had reason to believe that the purpose in meeting the lawyer might be to instruct Tang to make false statements but since the investigators did not exclude the possibility that the lawyer might give legal advice to Tang and since Tang was possessed of legal professional privilege, he asked whether Tang was nonetheless willing to carry out a monitored and audio recorded meeting for the purpose of recording the entire conversation between Tang, D3 and the lawyer. Tang agreed to assist.

29.On 15 November, D3’s secretary informed Tang that the lunch was to take place at Amaroni’s restaurant at 1 p.m. the following day.

30.On 16 November and in anticipation of the meeting, Tang met Mr Tong, an ICAC officer, in the morning and, according to his witness statement dated 21 November 2002, “Tong instructed me that when I talked with D3 and other persons present including the lawyers I had to play a passive role and let them take the initiative to talk to me.” An audio tape recorder was strapped to Tang. He went to the restaurant.

31.At the restaurant, D3 introduced Tang to Mr Fung whose name card was provided. Then Mr Booth arrived and he too provided a name card showing his name and that he was a partner in Haldanes. The conversation, according to Tang’s witness statement “roughly concerned things about the search at the ABB and the arrests of one Victor Law by the ICAC. Mr Fung and Mr Booth suggested that I took a look at the photocopies of the documents of the ICAC took away from ABB and also told me that I had the right to remain silent before the ICAC.” The meeting lasted for more than an hour.

32.After the meeting, once the solicitors had left, D3, according to his witness statement, told Tang to tell Mr Fung that there had been no cartel and that he, D3, would say that he was not clear about the details or purpose of the purchase orders. D3 said that he was worried lest he and Tang gave different explanations for the purchase orders. D3 then provided a number of suggested explanations which Tang might give for the purchase orders and that Tang should “ask Mr Fung and let him decide whether I could say it in that way.”

33.In his oral testimony:

(1)	Tang asserted more than once that he had never listened to the tape recording of the lunch conversation with the lawyers.In the light of other evidence, it is apparent that this assertion by Tang was untrue.
(2)	Tang said that he expected a lawyer to show up at the meeting on 16 November, told the ICAC that he was due to meet a lawyer with D3, and that the ICAC officers had not suggested that a lawyer might not turn up or that the person in attendance from the lawyer’s office was likely to be a solicitor’s clerk – to the relevance of which we shall shortly refer.
(3)	It was established that Tang was given no instructions as to what he should do if it transpired at the lunch meeting that the person attending from Haldanes was a lawyer, as opposed to a clerk, or what to do if a lawyer gave legal advice to D3 in the course of the meeting.There was no instruction, for example, for Tang to switch off the recording at some given signal.  Nothing had been said to him about D3’s right to confidential communication with his lawyer.
(4)	It was established that in none of the contemporary notes made by Tang prior to 16 November had he recorded any suggestion that he had been told to run a false story past the lawyer to see if the story was ‘acceptable’.The transcript of the audio recording of the meeting with Leung on the evening of 11 November 2002 shows that Leung mentioned the need for Tang to discuss matters with a lawyer but the effect of what was said seems to have been twofold: (a) that if there was to be any bargaining between Tang and the prosecuting authorities, that should be done with the benefit of legal advice and (b) if the story to be proffered by the defendants resulted in the lawyer advising that there was no defence, the defendants would have to think again.
(5)	Tang conceded that after listening to the tape on 21 November and in the course of making his sixth non-prejudicial statement in early 2003 he made a number of material changes to his story, in particular regarding the timing and the amounts of the bribes.
(6)	Tang said that after the lunch on 16 November he informed the ICAC that he had met lawyers at the lunch meeting and that he conveyed to the ICAC the gist of the conversation that had taken place with the lawyers.

The ICAC evidence

(i) The officers

34.Evidence was given by a number of ICAC officers. They were:

(1)	a principal investigator, Mr Ng.  He was kept informed of the progress of the investigation and was available to exercise certain powers (such as authorisation of audio recordings) exercisable only by an officer at his level.
(2)	Mr Yau, chief investigator at the material time, whose function was to oversee a number of officers engaged upon the Chan Kau-tai investigation.
(3)	The case officer, Mr Eric Tong, whose rank was that of senior investigator; and
(4)	Mr Nelson Lau who was Tang’s ‘handler’, a role he had assumed from one Terence Cheung.

35.Amongst the documents disclosed for the purpose of the stay application were investigation diaries compiled by Nelson Lau. They include an entry on 7 November 2002 recording the fact that “Leung gave [Tang] the telephone number of a lawyer and asked Tang to seek assistance whenever ICAC approached him.” He recorded what Tang had told him on the days following.

(2) The 11 November authorisation

36.With a view to recording the meeting between Leung and Tang on the night of 11 November, Ng signed an authorization for the covert obtaining of evidence.

37.The authorisation document is in effect a request form with particulars to be supplied by the requesting officer and, towards the end, a paragraph for the approval or non-approval of the request and another paragraph for the insertion of conditions or restrictions to the authorisation. Under the heading “Offences alleged or suspected” was stated: “s.   4 [Prevention of Bribery Ordinance], s. 19 Theft Ordinance and perverting the course of justice”. Under the heading “Evidence sought, assessment of its anticipated value; alternative means of obtaining evidence” was written:

“Audio taped evidence is sought to corroborate offences under s 4(1) POBO and s 19 Theft Ord alleged by Tang … against Yu [D3] … Leung … and others. Evidence of a possible offence of perverting the course of justice can also be secured.”

38.Whilst the form contains a broad description of the alleged corruption, nothing more is said about the possible offence of perverting the course of justice save that under the heading “Synopsis of Investigation” there is included the contention that recently:

“Tang disclosed that Yu [D3]and Leung…were concerned about the investigation, in particular how they should act in the event the ICAC approached them.  Meetings are being arranged between them for discussions.”

(3) Ng

39.In his oral testimony, Ng said that, as a result of what had transpired between 7 and 11 November, the ICAC thought that there appeared to be taking place an effort by Leung and D3 “to urge Mr Tang to make up some stories with regard to the purpose of the purchase orders, that’s why we suspected that there may be an offence of perverting the course of justice.” When he learned that there was to be a meeting on 16 November between D3 and a lawyer, he discussed the matter with a team of officers and the team suspected that such a meeting may well be an attempt by D3 to convince Tang to tell lies to the ICAC. They were very suspicious and thought that if there was to be a lawyer the purpose was “more likely a further attempt by D3 to convince Mr Tang to tell lies to the ICAC”, the presence of the lawyer designed to add weight to the pressure. He continued:

“… indeed, we reviewed the situation critically, and we have assessed that the likelihood of the presence of a lawyer would be pretty slim, because we think that if D3 was to receive any legal advice, he has ample opportunity, because he had been tipped off by Mr Victor Law’s lawyer quite a few days ago … and if any legal advice is to be given to D3, we considered it should be given in the law firm, in confidence, rather than in a public restaurant, during a peak season of lunch hour, in the presence of Mr Tang, who has apparently some potential conflict of interest with D3. … we think that the likelihood of a lawyer being present at the meeting is pretty low… we… think of other possible individuals from a lawyer for in the Chinese community, solicitor’s clerks are quite often addressed as ‘lawyers’ or ‘solicitors’…. That’s why we suspect, if there is at all anyone coming from the law firm, it maybe likely a solicitor’s clerk.  After all, we don’t think a solicitor or a lawyer will be so foolish to pursue a perversion in open place, in a restaurant.  That’s why we think, at most, it will be a solicitor’s clerk, rather than a lawyer.  However if there is at all a perversion going on, the presence of a lawyer will just make him an accomplice. … the consideration is whether the meeting is a genuine meeting for legal advice to be provided or whether it is a meeting for a conspiracy to pervert.  That is our primary concern.  If the purpose of the meeting was to conspire to pervert the public course of justice, then it is an offence and there will be no privilege at all.  Whereas, if it’s a proper occasion when legal advice is provided, then, apparently, it is protected and whether we should monitor such a meeting that is a crucial factor to be considered.  That’s why we, first of all, have to consider whether there will be someone from the law firm being present in the meeting.  And secondly, if, indeed there is or there was such an individual, then whether it would be an occasion where genuine legal advice are provided to D3 or even Mr Tang. … we discussed the matter thoroughly before I approved the authorisation.  …. We assessed the situation that it is quite unlikely for D3 to obtain legal advice under such a situation. … but we cannot rule out the unlikely event that legal advice, proper legal advice, would be given to Mr Tang instead.  That’s why I instructed my officers to contact Mr Tang informing him of his privilege in case genuine legal advice were provided to him.”

40.In Nelson Lau’s diary entries, we see an entry for 14 November recording the assertion that the ICAC suspected that D3 and Leung might intend to urge Tang to provide false statements to the ICAC and that “regarding the lawyer, I reminded Tang that his lawyer might give some advice on the whole matter and that communication (Tang and the lawyer) are subject to the protection under the ‘legal professional privilege’. … So he has the right not to disclose content of such conversation to ICAC”. The entry for Friday 15 November was to the effect that Tang told him that D3’s secretary had said that a table had been reserved for 1 p.m. the following day at Amaroni’s and that D3 would be there with a lawyer. There is no suggestion in this contemporaneous record that a lawyer might not be present and no hint that a lawyer’s clerk might attend instead.

41.There exists no contemporary record either of the suggested critical review meeting of which Ng spoke. It is therefore not surprising that it was put to Ng that no such review took place. It was also put to him that the suggestion that a solicitor’s clerk was expected rather than a lawyer, was false.

42.It is pertinent to note that at no stage did the ICAC seek legal advice in relation to the anticipated meeting; what to do if a qualified lawyer attended; or what to do if it transpired that legitimate legal advice – in other words, advice not in furtherance of a criminal purpose – was proffered. According to this officer’s testimony, no legal advice was sought because the matter was “an operational decision,” and because in any event the chance of a lawyer being present was remote.

The 15 November authorisation

43.As a result of the critical review which Mr Ng said had taken place, a request dated 15 November 2002 was made by Mr Tong to audiotape the meeting of 16 November. Since much turned on the terms of the request, we set it out in full:

“	CONFIDENTIAL
AUTHORISATION FOR COVERT OBTAINING OF TAPE EVIDENCE
1.	Officer(s) using Device
2.	Offence(s) alleged or suspected
	s.4 POBO, s.19 Theft Ord & Perverting the course of justice
3.	Person(s) to be recorded – if known
	YU Chi-wai, TANG Hop-sing, LEUNG King-wai and unknown persons
4.	Location of Device
	Yau Yat Chuen
5.	Other persons – non suspects – whose privacy may be infringed, details of possible infringement
6.	Period for which use of device is sought
	Lunch time, 16.11.2002
7.	Previous covertly obtained similar tape evidence
	Covert audio recordings between TANG Hop-sing and another suspect (LAW Yuk-wah) in September 2002.
	Covert audio recordings between TANG Hop-sing and LEUNG King-wai on 11.11.2002
8.	Evidence sought, assessment of its anticipated value; alternative means of obtaining Evidence
	Audio taped evidence is sought to corroborate offences under s.4(1) POBO and s.19 Theft Ord alleged by TANG Hop-sing against YU Chi-wai, LEUNG King-wai and others.  Evidence of a possible offence of perverting the course of justice can also be secured.
9.	Synopsis of Investigation  File Ref: IF/2000/3057 S.F.30
	In May 2002 during Operation “Dragonfly” Ph III, TANG Hop-sing on an NP basis implicated YU Chi-wai, LEUNG King-wai and other staff of ABB (HK) Ltd to have conspired together to manipulate prices of miniature circuit breakers in collusion and to offer bribes to CHAN Kau-tai of Housing Department for his corrupt assistance.  Subsequent to the recent “Ph V” operation, during which ABB was searched and its staff arrested/interviewed, TANG disclosed that YU and LEUNG (both not yet arrested) were concerned about the investigation, in particular how they should act in the event the ICAC approached them.  Meetings are being arranged between them for discussions.
	Officer Submitting Request  Eric Tong
	(Date/Time)  1500 hours 15.11.2002
10.	Approved/Not Approved
11.	Restriction
	Principal Investigator  NG Ping-kwok
	Group C  (Date/Time)  15-11-02 1505 hrs”

44.It will be noted that there is a reference to “unknown persons,” yet no reference to the possibility of lawyers or a solicitor’s clerk and therefore no hint as to why it was thought, if it was, that the meeting with lawyers or with a solicitor’s clerk was likely to advance the feared attempt to pervert the course of justice. Nor, it follows, was there any suggestion as to what safeguards might be put in place to preclude an intrusion upon legal professional privilege. Nor was there any reference to the alleged waiver by Tang, to which we refer in the next paragraph, of legal professional privilege or to the circumstances which allegedly gave rise to the question of waiver. The form repeats, almost verbatim, the details of the form dated 11 November 2002.

Ng: Cross-examination

45.In cross-examination, Ng said that he knew that D3 would be present at the lunch meeting and that he had considered D3’s rights. The ICAC officers thought it unlikely, a “pretty remote” likelihood, that a lawyer would be present and he repeated as reasons for that belief, the suggestions that D3 had by then had ample opportunity to seek legal advice and that it would be unlikely for a lawyer to pursue in a public place an attempted perversion of justice. It was however possible that a lawyer was going to be present giving proper legal advice, in respect of which concession he was asked whether he had considered what to do if the meeting turned out to be “a genuine lawyer’s meeting”. The effect of his answer was that they could not rely on what Tang told them as to what had transpired during the meeting but would have to check for themselves by listening to the tape. Nor could he rule out the possibility that the lawyer himself, if one attended, might be involved in the conspiracy to pervert the course of justice.

46.16 November was a Saturday and on Monday 18 November, when Ng came to his office, he was informed that in fact two solicitors had attended the lunch meeting, Mr Fung and Mr Booth.

47.Much of the emphasis in the course of Ng’s testimony hitherto had been on the remoteness of the possibility of a lawyer being present at the lunch meeting or of participating, in a public place, in a conversation designed to pervert the course of justice; an assertion that was an echo of a witness statement he had made in which he had said: “It was considered that a lawyer would not be so foolish as to coach a client to pervert the course of justice and openly during peak hours in a restaurant.”

48.Not surprisingly, therefore, cross-examination moved on to the decision to listen to the audio recording of the lunch meeting, a decision taken after it was known that lawyers – not solicitor’s clerks – had been present at the meeting.

49.The tape was listened to on 21 November, so that, since the recording, five days had passed in which to consider whether it was proper to do so.

50.What steps, Ng was asked, did he take to re-evaluate the position before allowing anyone to listen to the tape? First, he answered, he needed Tang to be debriefed:

“and then we will decide if there is a need to listen to the tape.  In this particular situation, we understand – well, I was told – that after the departure of the two lawyers, there were some conversation between Mr D3 and Mr Tang which… that means the purpose of that meeting will very likely, as we forecast, a further attempt by Mr D3 to convince Mr Tang to do according to his desire.  What has been said during the lunch becomes important as well.  After the meeting, there were discussions; what about during the meeting?  If indeed, during the meeting there was similar discussions, we would have to consider the matter again.”

51.He still nurtured suspicions about what had transpired during the lunch meeting. Mr Ng was asked whether he authorised officers to listen to the recording after he had become aware that lawyers had been present. He said that he could not recall but that there was no need for an authorisation to listen. He agreed that he would have had to be satisfied that it was really necessary to listen to the audio tape of the lunch meeting and that there would have to be strong evidence of a criminal purpose that had there been served. It was put to him that he was making up his evidence as he went along.

(4) Yau

52.Mr Yau, Chief Investigator, said that at the stage of the suggested critical review, he did not think that a lawyer would be present at the lunch meeting and he thought also that it was very likely that the meeting was to be merely another occasion for D3 to pervert the course of justice by asking Tang to make up stories to explain the purchase orders. One pauses to note that Yau was asked by prosecuting counsel whether any mention had been made by the ICAC officers about the likely presence of a solicitor's clerk. It was a blatantly leading question on a matter of some importance, to which question objection was taken but, surprisingly, the question was allowed by the judge on the basis that the answer “could be a ‘Yes’ or it could be a ‘No’”. Be that as it may, the witness said that there was a discussion whether it might be a lawyer or a solicitor's clerk and if a lawyer, whether the lawyer’s presence was designed:

“to be …used by Yu to give credibility to the whole arrangement, such that Tang … they would be successful in asking Tang not to say anything, or to remain silent, when interviewed by ICAC.  ... it would be to add credibility to the whole arrangement, such that Tang would be legitimately asked not to say anything to the ICAC, to remain silent when interviewed, and on the other hand it would provide another opportunity for Yu to directly ask Tang to…explain the purchase orders.”

However, if a lawyer was there, “legal professional privilege would be there and we need the consent, the waiver, of Mr Tang before we can proceed.”  Had Tang not waived privilege:

“We would not go ahead with the meeting, and then we will decide whether Tang should attend the meeting by himself.

Q: When you mean not go ahead with the meeting, what do you mean by that?..

A: By not monitoring or recording the meeting.

Q: Because why?

A: Because it is…legal professional privilege. …if there is any legal professional privilege attached to the meeting and it belongs to Tang and if he did not agree to waive it, then there’s no right for ICAC to monitor and record the meeting.”

53.There was, he admitted, a possibility that in the meeting, admissions might be made to the substantive offences which were under investigation. Tang had been told to remain passive so it followed that if admissions were made they would be made by D3 to his lawyer but according to the officer, that would not matter because the lawyer was not, he said, D3’s lawyer; the lawyer was there to see Tang.

54.After the meeting was over, Yau was given a report by officers whom he had assigned to cover the meeting and to handle Mr Tang, namely, Ada Lau and Eric Tong. He was told that two lawyers had been present at the meeting and that D3 had also been present. There was some suggestion that what had been recorded outside the restaurant after the meeting might amount to evidence of perverting the course of justice. As for the meeting with the lawyers “there was nothing similar to what happened after the lawyers left; there was nothing so clear. Even if I had asked, the witness might just say, you know, there was conversation but, as regards, you know, clear evidence of perverting, it happened after the lawyers had left.” As to whether anything criminal had occurred during the lunchtime meeting, he was “not certain”.

55.He had then instructed Mr Terence Cheung to debrief Tang about what happened at the lunch meeting:

“ …we could not just rely on the information given by the witness Tang.  So what I asked Mr Cheung to do is to go through the recording together with Tang so he would know whether there is any part of the meeting which might amount to evidence of the offence of perverting the course of justice.”

56.That instruction to debrief included an instruction to Cheung to listen to the tape with Tang. There was no question raised of seeking legal advice before that instruction was given and Yau had no idea whether legal advice had been given to D3 during the lunch meeting. Before giving that instruction he had sought no information as to who had been doing the talking during the lunch conversation. It was put to him in cross-examination that Tang could simply have been asked whether D3 had talked to the lawyers. Yau’s answer was that “that was the purpose of the debriefing”. He did not examine the visual surveillance to see whether D3 had been talking to the lawyers although he said that had he seen that happen “I would have been more prudent”. Yet, he said, the possibility that D3 might have been having a confidential conversation with his lawyers had not occurred to him.

57.He was asked what he was told after the debriefing as to what had transpired during the meeting. His answer was he was told that:

“when the lawyers had left, D3 talked to Tang privately asking him to make up explanations to account for the purchase orders and to consult a lawyer to see if what was said by D3 would make sense.  As regards … what happened over lunch, Mr Cheung told me that there was only a brief mention of the search of ABB”;

at which point in the evidence objection was taken by counsel on behalf of D3 to further disclosure of what had been said during the meeting, on the basis that what had been said was privileged.

58.No suggestion was then made nor has it since been made that the conversation at the lunch was not in fact covered by legal professional privilege. Indeed Yau testified that no transcription was made of the audio-recording of the meeting because “there is no information suggesting that the part that happened within the restaurant contained anything relevant to our investigation.”

(5) Tong

59.Mr Eric Tong was the officer who first spoke to Tang after the lunch meeting. His testimony about this was as follows:

“A: We arranged to pick up [Tang] somewhere nearby.  I then asked [him] the other two people who were the other two people apart from [Yu] during the meeting.

Q: Yes.  Did he tell you?

A: He said “lawyers”.

Q: And was there any other conversation between you and PW1, Mr Tang ?

A: I then asked Mr Tang what happened during the lunch, like perverting the course of justice.

Q: Yes.

A: He said, during the lunch it was just a general conversation talking about the case, nothing else.” (Emphasis added)

60.Tang then told Tong that after the meeting D3 had spoken to him separately and asked him to make up a story to explain away the bogus purchase orders. Tong then reported to Yau what Tang had told him as to the lunch meeting – including the fact that lawyers had been present and that nothing special had been discussed – and about his conversation with D3 after the meeting.

(6) Others

61.Ms Ada Lau was an assistant investigator engaged in setting up the taping arrangements for Tang and in monitoring the meeting of 16 November. She said that before the meeting she had been briefed by Eric Tong to expect a lawyer to attend that meeting.

62.Ms Corrina Kwan was one of the officers who, with Tang present and on Yau’s instructions, listened to the entire tape of the lunch meeting. She then discussed the contents of the tape with Tang.

The solicitors

63.The solicitors gave evidence on behalf of the appellants. The effect of their evidence is summarised in the judge’s reasons for ruling[5]. On 7 July 2002, the firm was requested to represent ABB and their employees. They regarded both D3 as well as Tang as a client. In the course of the lunch meeting on 16 November, both gave legal advice to D3 and Tang. There was no reason for either of them to believe that the meeting was designed for anything other than a proper professional purposes. Neither had any idea that the meeting was monitored by the ICAC. Mr Booth’s testimony was that the original arrangement was for him to meet D3 at the lunch and to advise him as to his position but that later, Tang arrived.

Statement changes

64.It is common ground that after the events of 16 November 2002, Tang made further witness statements which contained information at variance in certain material aspects with information previously provided, including different dates for the alleged bribes to Housing Authority officials and a material difference in the amount of the second bribe. The case for D2 was that it was logical to assume that events on 16 November led to these changes, and that the ICAC was privy to those events but that D2 was not, so that D2 was thereby placed at a disadvantage on a material matter.

The judge’s findings

65.It is a statement of the obvious that a decision to stay or to refuse to stay proceedings on the basis that they constitute an abuse of process is a decision that can only be made upon findings of fact. In this case it was necessary for the judge to decide whether there had or had not been a violation of a suspect’s right to confidential legal advice and, if there had been, whether it had been occasioned accidentally or, if not accidentally, then on the basis of strong grounds to believe that the communication was not privileged; conversely, whether the violation had been deliberate or in reckless disregard of rights. These are the type of questions which we intimated in our judgment in Shum Chiu were not asked in the first application before Judge Livesey but which needed to be asked on this occasion.[6]

66.It is evident from a reading of the transcript of the evidence that the credibility of the ICAC officers was heavily challenged. It was put to them in terms that they were making things up as they went along. We had the benefit of that transcript and we are in as good a position as was the judge to assess whether material parts of their evidence sat comfortably with inherent probabilities. It was our judgment that some of the evidence did not sit comfortably with inherent probabilities or with other testimony and that, for that reason, their evidence required particularly close analysis and also express findings as to credibility.

67.So, for example:

(1)	it was asserted that there had been a critical review which canvassed the likely attendees at, and the purpose of, the meeting scheduled for 16 November; yet there existed no contemporary record of any such review and the authorisation request dated 15 November made no reference to the anticipated presence of a solicitor’s clerk, let alone of a solicitor;
(2)	it was said that it was anticipated that the chances of a lawyer being present were “pretty slim” and that that was why it was thought acceptable to record the conversation; yet that contention sat ill with much of the evidence – for example, Lau’s diary entry, Tang’s evidence, as well as Ada Lau’s – that clearly suggested that the presence of a qualified lawyer was anticipated;
(3)	the expectation that no lawyer would attend was heavily emphasised, as if to suggest that that made a material difference to the decision to record; yet once it became obvious to the officers that a lawyer was present, the recording proceeded nonetheless and even after the meeting, when there could be no doubt that lawyers had attended, the ICAC listened nonetheless;
(4)	it was asserted that it was unthinkable that a lawyer would discuss a perversion of the course of justice in a public place; yet when it was known that a lawyer had attended that public place, it was suggested that listening to the taped conversation was justified anyway because there was cause to suspect that a free-standing criminal purpose had been pursued – this despite Tang’s report to Tong that no such thing had taken place;
(5)	it was suggested that the prime justification for recording the lunch conversation was an anticipated attempt to pervert the course of justice; yet that was not the prime justification advanced in the authorisation request which referred, almost as an aside, to that as a mere possibility; and
(6)	Tang gave evidence that he never listened to the tape recording of the lunch meeting; evidence completely at variance with the testimony of the ICAC officers.

68.In his ruling, the judge reviewed the evidence extensively. He found that the lunch meeting was “prima facie privileged”[7]. Legal advice had in fact been rendered to Tang and D3 by the two lawyers. He found also that the ICAC ought to have contemplated that such legal advice as might be given would be for D3’s benefit as well and that, accordingly, they “ought to have known that the occasion – at least prima facie – was privileged.”[8]

69.The judge concluded that the effect of the conversation between Leung and Tang on the night of 11 November was to ask Tang to concoct an explanation for the issue of purchase orders and to tell a lie as to why he had told Victor Law that there had been a price-fixing cartel. This was, he concluded not merely the proposed running of a story past solicitors which was a defence to a false accounting allegation, the very charge contemplated, but was a “conspiracy [which was] much larger than that. The attempts, in addition to putting up false explanations, include (1) asking [Tang] to shoulder all criminal responsibilities; (2) asking [Tang] to [lessen] other suspect’s (D3’s) criminal responsibilities; (3) asking [Tang] to undermine other suspect’s (Victor Law’s) credibilities. If putting up false explanation was not regarded as a freestanding, independent agreement to pervert the course of public justice, I am of the decision that the others are.”[9] We confess, with respect, to some difficulty in following this reasoning but we do not think it necessary to analyse its validity.

70.The judge took the view that the conversation of 11 November provided strong evidence of an attempt to pervert the course of public justice and that, accordingly, he was not all surprised by the decision to record the lunch meeting on 16 November. He concluded that the ICAC had strong grounds to believe that the upcoming lunch was “yet another attempt by D3 to pervert the course of public justice, and the occasion should not be protected by legal professional privilege.”[10] In support of this conclusion he referred to the rationale allegedly behind the ICAC’s conclusion about the purpose of the meeting including in particular, the fact that no lawyer was likely to be present; that “in the unlikely event that a legal representative was present, it was more likely to be a solicitor’s clerk;” that the venue of the meeting made it unlikely that a genuine lawyer would be present dispensing genuine advice; that “in the unlikely event that even a genuine lawyer did turn up to give genuine legal advice, it would be to [Tang] and not to D3 as they were in conflict with each other”; and whether a genuine lawyer turned up or not, the purpose of the meeting was, in any event, to pervert the course of justice.[11]

71.As for this rationale, the judge said that:

“225.  It is not my intention to answer all these issues point-by-point; suffice for me to say that I have taken them all into my consideration.  I accept some of the issues were more real than the others.  However, as [Ricky Yau] put it, the ICAC were reacting to events happened to [Tang] and the meeting on the 16th was not initiated by the ICAC; they were just contemplating all kind of possibilities that might happen in that meeting.

226.  With the benefit of hindsight, the ICAC were wrong in a number of respects.  For examples, lawyers and not law clerks turned up – not just one, but two; they gave legal advice to not only [Tang] but [Yu], as well;…

227.  The ICAC, however, were right on one very important aspect: the purpose of the meeting was to pervert the course of public justice.

…

230.  However, it is not that easy to understand why the ICAC thought of the attendance of solicitor’s clerk since it was no more than speculation.

231.  It is not my function to defend the ICAC’s actions or inactions.  However, given the constant changing situations happened in an active ongoing operation, I am of the decision that their beliefs, at the time, were not being unreasonable.  Albeit some of their beliefs turned out to be mistaken, there was, certainly, no bad faith on their part.

…

234.  Having heard all the evidence, I am satisfied the purpose of the covert recording on the 16th was to gather evidence for the offence of perverting the course of justice; it was not employed indiscriminately, as such.

…

236.  [As for the criticisms concerning the information provided in the authorisation form] [t]rue, there were deficiencies…; I am, however, satisfied that most of these deficiencies … accurately reflect the ICAC’s thinking, again, rightly or wrongly at the material time…. lawyers were not mentioned because the ICAC did not contemplate their presence.”

72.As for the decision to listen to the recorded conversation, the judge found as follows:

“238.  When the [initial] approval was given, it must be implicit in that decision that listening, being part of the exercise, was to be carried out.  After all, there was no restriction or prohibition for simultaneous recording and listening.

239.  According to [Tang’s] testimony, once outside the restaurant, acts of perverting the course of justice were committed by D3.  It seems to me that there would be a derogation of [duty] if ICAC officers chose not to listen to the part inside the restaurant.  Conversation can only be understood in their proper context.  Although [Tang] was an undercover operative, he was, nevertheless, still a suspect and an accomplice.”

73.The judge went on to say that he was satisfied, on the balance of probabilities, that the lunch meeting “was, in fact, not privileged.”[12] There had, he said, been a freestanding and independent criminal conspiracy to pervert the course of public justice which existed between August 2001 and November 2002, to which both Tang and D3 were party. “The scope of the perversion” he said, was not confined “simply to make up various explanations to purchase orders. Ways and means to lessen D3’s involvement were discussed. … All in all, I am satisfied the whole meeting on the 16th was yet another occasion where D3 was trying to pervert the course of justice. Lawyers from Haldanes were being used as innocent tools to further his criminal purpose. I am satisfied the meeting inside the restaurant, albeit legal advice had been given, was nevertheless a meeting where legal professional privilege had no application. As such, all communications are not subject to any legal professional privilege. Parties are at liberty to listen.”[13]

74.None of the parties availed themselves of this invitation to listen to the recorded conversation, maintaining their stance that the communications were in fact privileged and that it was therefore inappropriate for them to do so.

Analysis

75.In R v Grant[14] the Court of Appeal noted that it was asked to overturn the decision of an experienced judge upon issues of fact, an unusual course for an appellate court. The Court found it “very striking” that the first instance judge had made no finding of the credibility of a key witness, a credibility that was “surely central to the submissions with which he had to deal.” True it is that in a case where an abuse is alleged, the burden of proving the facts which constitute the suggested abuse lie upon the applicants but in this case there was obviously sufficient evidence established by the applicants – the recording of a lengthy conversation between solicitor and client and the decision thereafter to listen to the recording – to show, prima facie, an abuse, such that the conduct required cogent explanation by the ICAC witnesses. We would, with respect, have expected the judge in this case to make express findings of fact in relation to the credibility of the officer’s evidence and of that of Tang and to provide some rationale for those findings. But there is no express finding of credibility either generally or in relation any single contested item of the evidence. The highest that it can be put for the respondent is that it is implicit in the judge’s ruling that he accepted all the testimony given by the ICAC officers. Given some of the difficulties inherent in the story advanced, we did not think this to be a satisfactory approach.

76.Most particularly, the judge seems, without saying so in terms, to have accepted the veracity of the contention of those officers who said that they thought that the possibility of the lawyer’s presence was remote and that it was more likely to be that of a lawyer’s clerk. Yet he failed to explain why it was that he accepted this evidence given that Tang had been given the name and telephone number of Mr Fung, a solicitor and not that of a solicitor’s clerk; that no one had told Tang to expect a solicitor’s clerk; that Ms Lau had been briefed by Mr Tong to expect a lawyer to attend the meeting which she was to monitor; that Lau’s diary entries clearly evidenced an expectation that a lawyer would attend the meeting; and that when it was clear beyond peradventure that lawyers had in fact turned up and had given advice, it made no difference to the conduct of the ICAC investigation.

77.The judge said that it was not his intention to answer, point by point, the ICAC’s proffered reasons for expecting that a lawyer would not attend. He ought to have done so, we think, for their proffered rationale demanded close scrutiny. He himself expressed a reservation about the evidence that the ICAC thought that a solicitor’s clerk would attend. That reservation required resolution because if that testimony was untrue – for example, an afterthought to provide an acceptable excuse for an intrusion into what transpired to be a privileged occasion[15] – then the untruth was a vital one.

78.The judge was satisfied that lawyers were not mentioned in the authorisation request “because the ICAC did not contemplate their presence”. Yet he had noted earlier in his ruling that they contemplated it as a possibility. Further, he failed to marry his conclusion that they did not even contemplate the presence of a lawyer with their evidence that they had secured from Tang a waiver of legal professional privilege.

79.The judge concluded that the lunch conversation was not in fact covered by legal professional privilege because, so he found, it was in pursuance of an independent criminal conspiracy to pervert the course of public justice. Yet in this context, he failed to address the vital and unchallenged testimony of Tong that he had specifically asked Tang whether anything untoward had transpired at that meeting in the nature of a plan to pervert the course of justice and had been told that nothing of that kind had transpired; indeed, in the fact-finding section of his judgment, he failed even to mention it.

80.The judge failed to resolve the issue which had been placed before him by lengthy questioning, namely, what was the main purpose of the eavesdropping exercise? Was it (as counsel for the prosecution before Judge Livesey had suggested and as some of the evidence before Judge Chan tended to suggest) to obtain evidence of the suspected conspiracies to bribe and to defraud or was it to obtain evidence of a scheme to pervert the course of justice? Was there strong evidence before the ICAC that the meeting was for a freestanding illicit purpose, or was such a purpose a mere possibility – as to which, we note the judge’s finding that the ICAC “were just contemplating all kinds of possibilities that might happen in the meeting”. A mere possibility would not have warranted the action taken.

81.In our judgment, the judge further failed satisfactorily to address the decision by the ICAC to listen to the conversation once they were aware that solicitors had attended the meeting. He failed to address the question why no contingency plans were put in place for such an eventuality. It did not require Tang to tell the ICAC who had attended the meeting. They could observe that for themselves and would know as soon as it commenced that lawyers were in attendance, a fact which – on their own evidence – rendered a perversion exercise in public less likely; yet no instructions were given to Tang to excuse himself for a few minutes in such an event, nor had any other plan discussed for terminating the recording. The judge failed to address the credibility of Tang in the light of his testimony, clearly untrue, that he had not listened to the recording. He failed to consider the importance of the fact that the ICAC gave no consideration to seeking legal advice at any stage of the exercise, most particularly once they contemplated listening to the lunch conversation in the knowledge that lawyers had attended the meeting. And the judge’s conclusion that the ICAC officers would have been in derogation of their duty if they had not listened to the tape conversation was in our opinion a conclusion that cannot reasonably be supported.

82.For these reasons, we came to the conclusion that the judge had failed satisfactorily to address his fact-finding task and that his findings of fact and the consequential exercise of his discretion could, accordingly, not be supported. For this reason alone, his ruling had to be set aside.

Whether to order a stay

83.We had, however, to consider whether in addition to setting aside his ruling we ought ourselves to order a stay of proceedings on the basis that there had been demonstrated an abuse of process that demanded such a stay. This is the issue to which we next turn.

The principles

84.In Shum Chiu, we rehearsed the relevant principles that emerge from reported decisions, principles to be applied to applications to stay criminal proceedings and the circumstances in which a breach of legal professional privilege might constitute an abuse of process that might warrant a stay.[16] It suffices if we summarise the key principles:

a.	A permanent stay of proceedings is justified only in highly exceptional circumstances.[17]
b.	Whilst the right to a fair trial is absolute, the range of remedies available to a court in the course of a trial – for example the grant of an adjournment, the provision of appropriate directions, the exclusion of inadmissible evidence or of evidence the prejudicial value of which exceeds its probative value – will normally suffice to ensure a fair trial despite inappropriate conduct in the investigatory or prosecutorial process.
c.	However, where a defendant shows on the balance of probabilities that, by reason of factors outside his control, he is prejudiced to the extent that a fair trial cannot be held, the continuation of the prosecution will then constitute an abuse of process because the process of the court is one which requires justice to be dispensed with impartiality and fairness.[18] This is by far the most usual basis upon which the jurisdiction to stay proceedings is invoked, even though invoked rarely.
d.	Where a fair trial remains possible despite official misconduct in the bringing of the prosecution, the public interest lies in proceeding with the trial in order to determine the guilt or innocence of the accused.
e.	That said, there will be circumstances, though rare indeed, in which, despite the availability of a fair trial, an abuse of power so offends the court’s sense of justice and propriety or, put another way, is of such a kind as to affront the court’s sense of justice and propriety with severe consequences for public confidence in the administration of justice, that the court may feel duty-bound to exercise its discretion to order a stay of the proceedings[19].
f.	Such a circumstance will most obviously arise where illegal conduct by law enforcement authorities or prosecutors “is so grave as to threaten or undermine the rule of law itself” in which case 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.”[20]
g.	Whether the circumstances are such as to warrant a stay under this second limb (a serious affront to the court’s sense of justice and propriety) is a highly fact-sensitive question.
h.	Our adversarial system cannot work justly if lawful confidential communications between client and legal adviser are not insulated from law-enforcement authorities responsible for investigating and prosecuting a case. But for the astute preservation of that confidentiality, the process by which we determine guilt or innocence is undermined.[21] In general, therefore, where there is a deliberate violation of a suspected person’s right to legal professional privilege, that constitutes an affront so great to the integrity of the system of justice and therefore the rule of law that “the associated prosecution is rendered abusive and ought not to be countenanced by the court”[22].
i.	Whilst legal professional privilege is engaged to protect communications made in the ordinary course of a solicitor–client relationship, communications in furtherance of a criminal purpose are not protected, so a client who uses his solicitor to further a criminal purpose is not entitled to claim the privilege.[23] This is the fraud exception to legal professional privilege. However, a communication from client to legal adviser regarding the conduct of forthcoming proceedings is not deprived of the privilege “merely because such communication is untrue and would if acted upon lead to the commission of the crime of perjury”[24] . The fraud exception is “more likely to apply if the criminality is freestanding and independent.”[25]
j.	If there is demonstrated a deliberate intrusion upon a suspect’s privileged communication with his legal adviser by reason of which intrusion confidential information is disclosed to the law enforcement authorities, it is not necessary to establish, in order to secure a stay, that the defendant has thereby suffered prejudice in the conduct of his case.[26]

85.We were taken by Mr Zervos to a number of cases in which the court had ordered a stay of proceedings on the footing that the misconduct disclosed was an affront to the conscience of the court and it was suggested that, by comparison, what happened in this case came nowhere near the extent of illegality shown in those cases[27]. That is not to say that Mr Zervos accepted that there had in this case been a misuse of power but the exercise in comparison was undertaken on the assumption, for the sake of argument, that this Court were to find that the conduct of the ICAC in recording or in listening to the lunch conversation went beyond that which was permissible. One of the problems with Mr Zervos’ argument is that it assumes the truth of all or almost all of the evidence advanced by the ICAC, in respect of which we have earlier pointed to a number of inherent difficulties.

86.In the present context, a comparison of cases is of limited value. The point was made in R v Latif[28] that an “infinite variety of cases” can arise in which, even though a fair trial is possible it would be “contrary to the public interest in the integrity of the criminal justice system that a trial should take place”; and that “general guidance as to how the discretion should be exercised in particular circumstances will not be useful.” What the judge has to do is to “weigh in the balance the public interest in ensuring that those that are charged with grave crimes should be tried and the competing public interest in not conveying the impression that the court will adopt the approach that the end justifies any means.”

87.We are concerned in this case with serious offences, albeit not as serious as the murder cases represented by Grant and Sutherland. We are concerned also with a principle which lies at the heart of the rule of law. The cases are replete with expressions about the fundamental character of legal professional privilege; that the honouring of it in practice is vital to the operation of the adversarial system; that suspects, whether in fact guilty or not, must have recourse to confidential legal advice; that deliberate eavesdropping upon such privileged communications is without question unlawful and viewed by the courts with such disapprobation that they will in general divorce themselves from proceedings tainted by this category of illegality.

88.The suggestion was made that on the facts of this case the public conscience would not be affronted for there was cause to suspect that bogus defences were in the course of fabrication and because in due course the ICAC disclosed to those acting for the applicants the fact of the recording of the lunch conversation.

89.When one considers the public conscience in this context, there is necessarily implicit the notion of a public that is sufficiently informed to appreciate the manner in which a deliberate infringement of legal professional privilege undermines the rule of law and why principle is more important than the individual case.

90.We have no doubt but that there was in this case an unwarranted infringement of legal professional privilege on two occasions: first, when the lunch conversation was taped and, second, when the tape was listened to.

91.Argument has been advanced that there was good reason to suppose when the first decision was taken, that the communications at the lunch would not be privileged because they were designed to pursue a freestanding criminal enterprise. The argument makes a host of suppositions which are not safe to make. One such supposition is that the prime purpose of the decision to record the conversation was not to secure evidence of the offences under investigation but to gather evidence of a conspiracy to pervert the course of justice, and that there were strong grounds for so suspecting. This is a supposition that does not sit readily with the terms of authorisation request or with the case as it was put by counsel for the prosecution before Judge Livesey[29]. A further supposition is that the testimony of Tang as to what had transpired between him and Leung and D3 in the two weeks or so prior to 16 November 2002 was true, a conclusion which had in turn to depend for its validity upon an assessment of his credibility which, in relation to at least one vital piece of evidence, was demonstrated to be wanting. The transcript of the conversation on 11 November 2002, which is independent of Tang’s oral testimony, illustrates a discussion amongst two suspects about a bogus story in relation to the very charges under investigation, the story that was then to be put to the lawyer to see if it constituted a defence. As the cases to which we referred in Shum Chiu illustrate[30], privilege is not removed merely because the communication from client to solicitor is untrue.

92.Be that as it may, we do not think it necessary to traverse the authorities, some of which illustrate that the dividing line between a freestanding criminal enterprise on the one hand and, on the other, legitimate communications with the legal adviser on the very issues arising in the investigation or proposed prosecution, is not always an easy line to draw. We are minded to the view that in this case the ICAC officers confused the two and erroneously assumed that any communication was deprived of its privilege so long as the defence to be put forward was, to the knowledge of the suspect, untrue. But it is unnecessary for present purposes for us to decide the issue whether there was or was not a freestanding criminal purpose. That is because we were satisfied that the decision to listen to the recording and the act of listening could not, on any view, be justified.

93.It would have been clear to the officers at the outset of the meeting that, contrary to such expectations as they say they harboured, lawyers were in attendance. No steps had been taken to cater for that situation. The lunch meeting was prolonged, yet recording continued. After the meeting a decision was taken – not in haste, not in an atmosphere of “constant changing situations”[31], but with the benefit of the passage of five days – to listen to the tape recording, in the presence of the prime prosecution witness, even though the ICAC had specifically asked that witness about the nature of the meeting and had been told by him that it had not concerned a plan to pervert the course of justice. The officers knew by then that D3 had been present and must have known, or had good grounds for believing, that he had received legal advice. They deliberately listened thereafter to this conversation even though they must have appreciated that there was a significant risk that it contained privileged communications. Despite that clear risk, no fresh authorisation was sought; and no consideration was given to seeking legal advice from the Department of Justice. That was the very least step to be taken. There was no operational imperative, no urgency, that dictated otherwise. The suggestion that the first authorisation dated 15 November necessarily covered the decision thereafter to listen, ignored the fact that, on the ICAC’s own story, the circumstances had, by 21 November, changed dramatically. Further, the suggestion that they could not rely on Tang’s assurance that nothing amiss had taken place at the meeting was to proceed on the basis of a mere possibility and, in any event, the evidence of Tang’s observance of ICAC instructions hitherto spoke loudly of his co-operation with them.

94.At the end of the day an assessment has to be made by the Court based on experience, with an appreciation of the fact that operational considerations often require difficult decisions but, at the same time, with due regard to the rule of law’s requirement that its underpinning principles be respected and not deliberately flouted. In our judgment, the evidence in this case displayed on the part of the ICAC officers who took the key decisions, particularly the decision to listen to the recorded conversation, either a cavalier approach to privileged communications or a failure to appreciate the nature and importance of the principle. It matters not which it was, for if it was the latter, it is a failure on a fundamental issue which cannot be countenanced in the case of a law enforcement authority operating in a society governed by the rule of law.

95.For these reasons, we determined that there had been an abuse of process which was an affront to the conscience of the court and to which the court should not lend itself by permitting the proceedings to continue and, accordingly, we ordered a stay of the proceedings. In our judgment, the proceedings as a whole were affected, not merely as against D3, whose professional privilege had been infringed but also as against D2. In the case of D2, we ordered a stay on the additional ground that he could not enjoy a fair trial. That is because he was precluded from knowledge, in the hands of the investigating authorities, of what had transpired at the lunch meeting and whether and to what extent what had there happened led to the material changes in the subsequent statements made by Tang.

96.One further aspect of the case is worthy of mention. It is that the story provided by the ICAC officers to the judge sat wholly at odds with the account provided by counsel for the prosecution to Judge Livesey when the first stay application was made. This Court referred to it in Shum Chiu,[32] a judgment which, it is evident from the ruling, Judge Chan had read before he reached his decision on the stay application. Counsel for the respondent had asserted before Judge Livesey that “the capturing of the conversation was intended merely as an aide memoire for Tang's benefit”; that the ICAC believed that “there [were] (a) ongoing matters in relation to the conspiracy; and (b) the potential for other criminal offences, namely, obstruction.” We have emphasised the word “potential” because it echoes the thrust of the ICAC evidence before Judge Chan that what they had in mind was the possibility of the use of the lunch meeting in furtherance of an attempt to pervert the course of justice. At para 34 of Shum Chiu, the Court cited what prosecuting counsel had said to Judge Livesey:

“ … you will hear evidence to the effect that here was [Yu], a suspect, meeting with [Tang] 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. … so, when the ICAC wired him up… they sent him along to the meeting, 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 [Tang] 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 [Tang] 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, [Tang] went along to the meeting.  How were the ICAC to know that [Tang] and [Yu] were not going to have a conversation sitting at the restaurant table before the lawyers arrive about ss 4 and 19, which was the basis of the investigation?  Or, how did they know that [Tang] and [Yu], in the absence of the lawyers, were going to have a conversation about ss 4, 19 and, possibly, about obstruction?” (Emphasis added).

97.These were representations made by him on the prosecution’s behalf after a weekend’s adjournment and one is entitled to assume that counsel spoke with the benefit of instructions. The case then put is too obviously at variance with the evidence led before Judge Chan to require any particularisation of the differences. These differences add to the skepticism with which the Court is bound to view the case and is a matter to be put in the balance in deciding whether this is a case which warrants a stay. It is yet another factor which confirmed this Court in its view that the prosecution case on the abuse issue was not tenable.

Costs

98.Counsel intimated that, once these reasons were delivered, they wished to be heard as to costs. We direct that written submissions for the appellants, as to costs, be filed within 21 days and a reply within 14 days thereafter. An oral hearing, if requested or if directed by the Court in the absence of such a request, will thereafter be fixed in consultation with counsel’s diaries.

Mr Kevin P Zervos, SC, DDPP, Mr Keith Oderberg, Counsel on fiat and Mr Giles Surman, Counsel on fiat of the Department of Justice, for the Respondent

Mr Edward Fitzgerald, QC and Mr Derek Chan, instructed by Messrs Boase, Cohen & Collins for D2 /1^st Appellant

Mr Leo Remedios, Ms Lisa Remedios, Mr Samuel Yip, instructed by Messrs Bernard Wong & Co. for D3/2^nd Appellant

Application by the respondent for leave to appeal out of time to Court of Final Appeal refused. Please refer to FAMC43/2010 dated 14 September 2010