Secretary for Justice v. Ftcw and Others

CACV 101/2013 &

CACV 107/2013

(Heard together)

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NOS. 101 and 107 OF 2013

(ON APPEAL FROM HCMP NO. 188 OF 2012)

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BETWEEN

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JUDGMENT

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Hon Lam VP (giving the Judgment of the Court):

1.This judgment deals with the appeals by the 2^nd to 4^th Defendants against the order made by Ng J [“the Judge”] in HCMP 188 of 2012 on 14 May 2013. By that order, the Judge granted access to the Secretary for Justice to inspect and take copies of documents (identified as Categories 1 to 5 in his judgment of 14 May 2013) which had been filed or lodged in court or placed before the trial judge Saunders J in HCMC 5 of 2008 and HCA 566 of 2010. He also released the 1^st Defendant [“the Wife”] from her implied undertaking in HCMC 5 of 2008 for the sole purpose of:

“(a) disclosing to the Secretary for Justice and the Hong Kong Police such of the Documents as may be required in the course of the criminal investigation, and specifically, all documents and correspondence relating to the ‘Agreement for the Grant of a Loan Conversion Option’ between the 2^nd and 3^rd Defendants dated 9^th February 2006 (“2006 CLA”); and

(b) discussing the documents in (a) above with the Secretary for Justice and the Hong Kong Police in the course of the criminal investigation.”

2.These appeals were heard after CACV 154 and 166 of 2012, the appeals in HCMC 5 of 2008.  This judgment is handed down on the same date as the judgment on those appeals.  We shall not repeat what had been said in that judgment regarding the background of HCMC 5 of 2008 and HCA 566 of 2010.  The application in HCMP 188 of 2012 was the aftermath of the referral by Saunders J to the Director of Public Prosecutions [“the Director”] of his judgment handed down on 1 December 2011.  In that judgment, Saunders J found on the civil standard of proof that forgery, conspiracy to pervert the course of justice and acts of perjury had been committed by the 2^nd Defendant [“the Husband”] and the 3^rd Defendant [“STL”]. In our judgment in CACV 154 and 166 of 2012 [“the matrimonial appeals”], we have explained why Saunders J should not have made those findings.  We also held that the referral is not appealable.

3.Though Saunders J referred his judgment to the Director, he did not at the same time grant access to the Director in respect of the documents under the custody of the court.  Therefore, the Director had to apply to court for such access by an originating summons.  The application originally came before Saunders J on 7 June 2012.  At that hearing, the Husband and STL applied for Saunders J to be recused.  For the reasons given in written Reasons for Decision of 6 July 2012, Saunders J acceded to that application.  The matter was adjourned and heard by Ng J in February 2013.    

4.The Wife had made an application for the release from implied undertaking for the purpose as mentioned above in HCMC 5 of 2008.  After she was served with the Director’s application, she made a similar application in HCMP 188 of 2012.  It was dealt with by Ng J at the same time when he heard the application by the Director.

A. The discrete nature of these appeals

5.Submissions have been advanced before us on the interplay between these appeals and the matrimonial appeals.  Mr Thomas SC (appearing for STL) at one point went as far as submitting that if we were to set aside the referral by Saunders J which was the foundation of the application by the Director, we should not assist the Director by granting access.

6.Though we held in the matrimonial appeals that the findings by Saunders J on forgery, conspiracy and acts of perjury were flawed as a result of procedural irregularities, we did not deem it appropriate to set aside the referral.  Once a referral had been made, the matter was in the hands of the Director who would exercise his independent professional judgment in deciding whether there should be any investigation and what steps should be taken in respect of such investigation.  We would expect the Director and those responsible for criminal investigation to exercise the same standard of care and independent professional judgment in carrying out their duties by reference to the merits of the case and the available evidence irrespective of the source of complaints.

7.Likewise, the court would also apply its own professional and independent judgment in assessing the merits of the application by the Director for access to papers in the custody of the court.

8.We have not heard any suggestion that the allegations of forgery, conspiracy and perjury are frivolous and vexatious. Whilst we appreciate that STL and the Husband are justifiably aggrieved by the flaws in the proceedings before Saunders J (and we therefore deemed it necessary to correct that in our judgment in the matrimonial appeals), based on the materials before us we would not say that there is nothing to investigate in respect of these allegations.

9.As we see it, the setting aside of the findings by Saunders J is a separate and discrete question from the issue that we have to decide in the present sets of appeal: whether the Director should have access to the documents in the custody of the court.  It does not follow from our setting aside of the findings that we must allow these appeals.

10.In light of our setting aside of the findings of Saunders J in the other sets of appeal, it would be right for us to state in this judgment that all the references below on perjury, forgery and conspiracy to pervert the course of justice are only references to allegations which are the subject matters of the investigation by the Director and the police.  And all references to incriminating statements are references to potentially incriminating statements. They are not the findings of this court.

B. The jurisdiction to grant access

11.In their respective notices of appeal, the Husband and STL challenged the Judge’s conclusion that the court has inherent jurisdiction to grant access in respect of papers in the court’s custody.  In the skeleton submissions of Mr Pointer QC (appearing for the Husband) and Mr Thomas SC (for STL), their challenges focused on the Judge’s reliance on Beck v Value Capital [1974] 3 All ER 437 to come to that conclusion.

12.Before the hearing of the appeal, this court referred counsel to the recent authority of R (Guardian News and Media Ltd) v Westminster Magistrates’ Court [2013] QB 618.  In light of that authority, Mr Pointer properly accepted at the hearing it would be hopeless to contend that the court does not have inherent jurisdiction to grant access to third parties with regard to documents which formed part of the court process.  He however advocated that the jurisdiction should not be exercised in the present case for a number of reasons, which we shall come to later.

13.In Guardian News at para 85, Toulson LJ said:

“In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. … I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.”

14.Mr Thomas did not seriously argue otherwise though he queried the source of the inherent jurisdiction. He submitted that the Guardian News case was about the trial process and the concept of open justice.  He also drew attention to the need to conduct a balancing exercise and contended that there are countervailing factors in the present case.  We would observe that the last point, like the submissions of Mr Pointer, go to the exercise of the jurisdiction rather than its existence. 

15.In his written submissions, Mr Thomas also submitted that in view of the regulation of the subject by Order 63 there is no room for invoking or extending the inherent jurisdiction to cover the same topic. However, he also contended in the other parts of his skeleton submissions that Order 63 does not cover documents which had not been filed in the Registry and none of the documents in question (except what was identified as Category 4 documents) were so filed.

16.In our judgment, it is clear beyond peradventure that the court has inherent jurisdiction to control access to the documents placed in its custody in relation to legal proceedings, whether they are filed in accordance with the rules or produced as exhibits during the course of proceedings or simply lodged with the court or handed up to a judge by the parties for the purpose of the legal proceedings.  Such control would include the power to restrict as well as the power to grant access.  Whilst there are different rules governing specific areas of this power in the Rules of the High Court, e.g. Order 35 Rules 12 and 13 and Order 63 Rules 4 and 9, as well as the Matrimonial Causes Rules (Rule 121), they are not a comprehensive code.  They only represent some facets of the general power of control exercisable by the court over access to documents within its custody.  We do not accept the submission that those rules have the implied effect of abrogating any common law power of the court in granting or restricting access to documents.  A similar contention based on rule 5.8 of the Criminal Procedure Rules 2011 was rejected by the English Court of Appeal in the Guardian News case.  In that case, Toulson LJ considered the power to grant access as an incidence of open justice.  Whilst we are in respectful agreement with that analysis, the underlying rationale for the existence of such inherent power can also be explained by reference to the nature of the judicial process, which is of greater relevance in the context of the present appeals. 

17.One significant difference between the adjudication of a dispute by a court of law and the resolution of such dispute by other means like arbitration or mediation is that the exercise of judicial power is one with public authority.  The judicial process is a coercive one, meaning that it is not a consensual process.  Rather a judicial decision is backed up by sanction imposed by a public authority.  An order or a judgment of the court can be enforced coercively by means which are not available to other private dispute resolution mechanism.

18.There is another facet to this public character of the judicial process: it is not up to the parties to decide consensually what the rules are. They have to follow the rules in the relevant set of rules of court and other directions given by the court in the conduct of their litigation.  That is so irrespective of whether the court hears a case in open court or, like most first instance hearings in family cases, hears a case in chambers not open to public.  The parties do not have control over the process.  Thus, once a document has been filed, lodged or otherwise placed in the custody of the court, a party has no control over its use.  Whilst he or she might advance submissions to the court as to whether there should be restriction on the access to the document, he or she cannot withdraw the document unilaterally.  Nor can he or she dictate the terms as to which the document is supplied to the court.  This does not mean that the court can exercise its control over the document arbitrarily.  But it does have the power to determine to whom access should be given in respect of a document and to regulate the manner in which such access should be exercised. 

19.Though the documents are sourced from the parties (or witnesses), once they come into the possession and custody of the court, they are subject to the power of the court in terms of access to the same.  The court does not exercise its power of possession or custody on behalf of the person from whom the document is supplied.  The court has possession and custody of the document as part of the judicial process and it exercises its power of control over the document with reference to the interest of that process.  Whilst the primary interest of the process is the fair adjudication of the dispute, the court also has a duty in safeguarding the integrity of the process. 

20.This brings us to a third aspect of our judicial process, which is of some significance in the present context: litigants are liable to sanction if they breach the rules for the process.  One very important rule in this process is that a litigant or witness who lies under oath or affirmation or uses forged document in the course of the proceedings is liable to be punished.  The integrity of the judicial process depends on the availability of public sanction against those who tell lies or those who used forged documents for the purpose of legal proceedings.  Without such sanction, the process could become farcical. Under our laws, such punishment could be severe: sentence of imprisonment could be imposed.  The principal means to achieve that is by way of criminal prosecution for perjury or forgery.

21.Criminal prosecution is usually conducted by a prosecutor under the authority of the Director who is usually not a party to the civil proceedings in which the lies were told or the forged document was used. Thus, for the efficacy of the legal sanction against perjury and using forged document in civil proceedings, the Director would need to be able to understand what had happened in the course of the civil proceedings.  How can he do so without any access to the documents in court?  Mr Thomas submitted that he could do so by applying for search warrants to get documents from the parties and their solicitors.  With respect, that does not appear to us to be realistic.  The party who is alleged to have committed perjury would resist by pleading privilege against self-incrimination and his solicitor would plead legal professional privilege.  There may be many reasons why his opponent may not wish to be involved.  In many cases, the most reliable and direct source of information is the court.

22.In light of the above observations as to the nature of the judicial process and the power of the court in the custody and possession of documents, we can now answer Mr Thomas’s query as to the source of the inherent jurisdiction of the court to control access to those documents.  In addition to the principle of open justice, we can add that it is inherent from the need to ensure the integrity of the judicial process.  Mr Thomas criticized that an inherent jurisdiction founding upon the need to protect the integrity of the court’s process is an unruly horse.  With respect, we do not agree.  It is well established that the court has inherent jurisdiction to prevent any abuse of its process, see Ng Yat Chi v Max Share Ltd (2005) 8 HKCFAR 1.  In Choy Bing Wing v Chief Executive of HKSAR [2006] 1 HKLRD 666, it was held that the court should on its own motion exercise such inherent jurisdiction to strike out a vexatious claim when the proper administration of justice demands this.  Protecting the integrity of the judicial process is another side of the same coin.  We see no reason why the court should not have the power under its inherent jurisdiction to give access of documents in its custody to the Director with a view to protect the integrity of its process.      

23.Given our conclusion on inherent jurisdiction, we do not find it necessary to deal with submissions on the exercise of the power under the specific rules of court.  We shall note that it is accepted by Mr Pointer and Mr Thomas that the court has the power to grant access to affidavits filed in the ancillary relief proceedings pursuant to Order 63 Rule 4.

24.We have no hesitation in rejecting the jurisdictional challenge.

25.Since the rationale for the exercise of such jurisdiction does not depend solely on the principle of open justice and in these appeals we are only considering access being given to the Director as opposed to some other parties, we are of the view the mere fact that a document has not been deployed in open court proceedings (whether being read or simply referred to or otherwise) is not determinative of the question whether the court should grant access to the Director.

26.Further, we do not think the power to grant access to documents is confined to evidence filed in the civil proceedings or documents lodged in court pursuant to specific rules of court.  There are authorities showing that the court’s control over documents could extend to materials which had been withdrawn from the scope of admissible evidence: see Television New Zealand Ltd v Rogers [2008] 2 NZLR 277; Attorney General of Nova Scotia v MacIntyre [1982] 1 SCR 175 (both cited in Guardian News); Beck v Value Capital [1974] 3 All ER 437.  There are also authorities showing that it could extend to non-evidential materials like skeleton submissions placed before a judge: SmithKline Beecham Biologicals SA v Connaught Laboratories Inc [1999] 1 All ER 498; R v Howell [2003] EWCA Crim 486 (cited in Guardian News).   

27.Mr Pointer submitted that special consideration should be given to confidentiality of family proceedings.  We can make several points on this submission.  First, we see no reason why the special nature of family proceedings should altogether wipe out the court’s inherent jurisdiction to control access to documents in its custody though we accept this might be a matter to be taken into account in the balancing exercise as postulated by Toulson LJ at para 85 of Guardian News.  Second, the confidentiality of family proceedings should not be over-emphasized and there are different considerations in respect of different proceedings. One can readily see the greater interest in preserving confidentiality in children cases.  But even in children cases, as Mr Howard QC (appearing for the Wife) pointed out, there could be cases (e.g. investigation into allegations of sexual abuse) where the public interest in pursuing a line of criminal investigation may outweigh the interest in confidentiality.  Thus, it would not be right to adopt a generalized assumption that family cases are subject to different rules.  Third, having said that, we also accept that the duty to give full and frank disclosure in ancillary relief application may give rise to special consideration (which is in essence the R v K point) in the balancing exercise and we need to consider that below.  Fourth, it should also be emphasized that the need for preserving the integrity of judicial process in terms of effective legal sanction against perjury and using forged documents in the court process is equally potent for family proceedings as in other civil proceedings.

28.As it should also be apparent from what we have said, though we concluded that the court does have inherent jurisdiction to grant access to the documents in its possession, the exercise of that jurisdiction must be subject to a balancing test in terms of weighing the relevant conflicting interests and rights.  As Toulson LJ said in Guardian News, the question of proportionality has to be assessed. Unlike the Guardian News case, we are not concerned with a journalist’s request for access.  We are dealing with a request from the Director for the purpose of investigating allegations of perjury, conspiracy to pervert the course of justice and use of forged documents in the course of legal proceedings.

29.Before we turn to the balancing exercise, we must examine two principal grounds relied upon by Mr Pointer and Mr Thomas in resisting permission to grant access:

(a) Privilege against self-incrimination [“PSI”]; and

(b) Legal professional privilege [“LPP”].

In the course of doing so, we must also consider (if such privileges can be relied upon) whether the privilege concerned present an absolute bar against the grant of access instead of being one weighty factor in the balancing exercise.

C.        Privilege against self-incrimination

30.On the submissions advanced before us and having regard to the Judge’s reasoning in his judgment, the following are the issues which we need to decide under this topic:

(a) Whether PSI is capable of being engaged;

(b) Whether PSI had been abrogated in the matrimonial proceedings and what are the consequences; and

(c) If the Husband and/or STL can claim PSI, whether that should prevent the grant of access to the Director.

C 1.   Whether PSI is capable of being engaged?

31.There are three sub-issues under this head.  First, whether the documents in question are part and parcel of the acts of alleged criminal conducts themselves, as such they cannot be subject to the claim of PSI. Second, whether the Husband and/or STL can claim PSI in respect of documents disseminated by them when they were not yet charged with any offence.  Third, whether the documents can be regarded as materials which had an existence independent of the will of the Husband and STL in respect of which no PSI can be claimed.

32.On the first sub-issue, it must be remembered that the allegations are perjury, using forged documents and conspiracy to pervert the course of justice in the course of the matrimonial proceedings by advancing a false case based on what has been called the 2006 CLA.  The documents in respect of which the Director seeks access are: (a) documents filed, lodged or placed before the court by the Husband and STL and their lawyers in that set of matrimonial proceedings advancing their case; and (b) documents filed, lodged or placed before the court by the Wife and her lawyers refuting their case.

33.In Allen v UK App No 76574/01, 10 September 2002, the European Court of Human Rights drew a distinction between statements made under compulsion with regard to offence previously committed and statements made in the course of committing the offence.  The former can be protected by PSI, but not the latter. The case concerned a person who had delivered to the Inland Revenue a false tax return.  He was subsequently charged and convicted of cheating the revenue by delivering that false return.  He challenged the conviction on the basis that there was a breach of his right against self-incrimination as he had been compelled under threat of penalty to incriminate himself by filing the return.  The European Court said, at CD 291:

“The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent in the context of criminal proceedings and the use made of compulsorily obtained information in criminal prosecutions. It does not per se prohibit the use of compulsory powers to require persons to provide information about their financial or company affairs…

The Court notes that in this case the applicant does not complain that the information about his assets which he gave the Inland Revenue was used against him in the sense that it incriminated him in the commission of an offence due to acts or omissions in which he had been involved prior to that moment.  His situation may therefore be distinguished from that of the applicant in Saunders.  Nor was he prosecuted for failing to provide information which might incriminate him in pending or anticipated criminal proceedings, as in cases of Funke, Heaney and McGuinness and JB … The applicant was charged with and convicted of the offence of making a false declaration of his assets to the Inland Revenue. In other words, he lied, or perjured himself through giving inaccurate information about his assets. This was not an example of forced self-incrimination about an offence which he had previously committed; it was the offence itself.  It may be that the applicant lied in order to prevent the Inland Revenue uncovering conduct which might possibly be criminal and lead to a prosecution.  However, the privilege against self-incrimination cannot be interpreted as giving a general immunity to actions motivated by the desire to evade investigation by the revenue authorities.”

34.Like the Judge, we accepted that distinction and, for that reason alone, we see no basis for the Husband and STL to claim any PSI in respect of the documents in question.  The same point can be illustrated by the following example.  If a witness gave false evidence and produced a forged document as exhibit in the course of trial under the compulsion of a subpoena, he cannot claim PSI to resist the court from giving the transcript of his evidence to the prosecuting authority for investigating whether charges of perjury and forgery should be laid against him.  Why should there be any difference when such falsehood was perpetuated through the giving of evidence in affidavits or affirmations?

35.The Husband and STL had no real answer to this argument. Mr Pointer, in his oral reply, tried to deal with it by saying that the Husband and STL were compelled to provide such evidence in the matrimonial proceedings and therefore protected by PSI.  We would come back to the issue of compulsion below.  But even assuming for a moment that there were compulsion, they were not compelled to lie or to use forged document.  Just like a witness who perjured under oath when giving evidence on subpoena cannot object to the transcript of evidence to be used against him in the subsequent prosecution for perjury, the Husband and STL cannot object on the ground of PSI to the admissibility of their documents filed, lodged or placed before the court in the course of the perpetration of the alleged perjury, forgery or conspiracy to pervert the course of justice.

36.Mr Thomas in his oral reply accepted that there is a distinction between a document which was the offence itself and the other documents. He said he only resisted the access to those other documents which he identified as principally the correspondence which is subject to the claim of LPP.  We would deal with LPP later.  However, that cannot assist STL with regard to PSI.  Insofar as the other documents filed, lodged and placed before the court by STL in advancing the case based on the 2006 CLA, including affidavit evidence defending the case based on the genuineness of the 2006 CLA, they formed part of the series of conduct in the course of the perpetration of the alleged perjury, forgery or conspiracy to pervert the course of justice.

37.When this court invited Mr Thomas to identify the self-incriminating aspect of the documents emanated from his client, he said STL had in his affidavit gone into the history of the 2006 CLA and in the subsequent prosecution (if any) the Director might use such affidavit to discredit STL or cross-examine him in case of any inconsistencies in such history given by STL in the criminal trial or other occasions.  In our judgment, this is exactly analogous to a situation where a defendant under a trial for perjury is being discredited or cross-examined by reference to the evidence he had given earlier in the first set of legal proceedings in which it is alleged that the perjury was committed. It is plain that such a defendant cannot prevent the prosecution from pursuing such line of cross-examination by pleading PSI on the basis that he gave evidence under compulsion in the first trial.  For the same reason, STL cannot claim PSI in respect of the affidavit he filed in the matrimonial proceedings accounting for the history of the 2006 CLA.

38.The Husband and STL did not advance any submissions before us that a distinction should be drawn between documents filed, lodged or placed before the court before the compromise in February 2011 and those filed, lodged or placed before the court after that compromise. Insofar as there were further potentially incriminating statements in documents filed, lodged or placed before the court by the Husband and STL after the compromise, it has not been demonstrated that they were not part of the series of conducts pursuant to the alleged perjury and conspiracy.    

39.The second sub-issue is an argument based on the absence of any criminal charges being laid against the Husband and STL.  Because of that, the Judge held that any claim for PSI is pre-mature.  Mr Thomas and Mr Pointer submitted that the Judge was wrong in so holding.  They said that once Saunders J referred his findings of perjury, forgery and conspiracy to the Director, it would constitute charges for the purpose of Article 10 of the Hong Kong Bill of Rights [“HKBoR”] in the guarantee of fair trial.  Though they cited several authorities in support of their contention, it is not necessary to refer to all of them in this judgment.  We accept their submission on the law on this point in light of Heaney & McGuiness v Ireland [2001] EHRR 12; Shannon v UK (2006) 42 EHRR 31; O’Neil v HM Advocate (No 2) [2013] 1 WLR 1992.  See also Koon Wing Yee v Insider Dealing Tribunal [2008] 3 HKLRD 372 at para 81. For the purpose of these Articles in the HKBoR, “charge” has an autonomous meaning.  The test is whether the situation of the suspected person has been substantially affected.  And his position will have been substantially affected as soon as the suspicion against him is being seriously investigated and the prosecution case compiled.  This test was adopted by Stock JA (as he then was) in the context of the HKBoR Article 10, with the concurrence of Ma CJHC (as he then was), in Secretary for Justice v Latker [2009] 2 HKC 100.  Stock JA further observed that this is a case-specific question.  

40.Since the statements and disclosure of documents were made in the course of the matrimonial proceedings before Saunders J made the findings and referral, even assuming that the referral can be regarded as “charges” (which we have some doubts given what we said above with regard to the independence of the Director from the court’s interference in decision to prosecute), this cannot be determinative.

41.Counsel submitted that the referral was relevant because the application for access was made after the referral.  In our judgment, in principle, the relevant time should be the time when the statements were made and when discovery of documents were given.  PSI is an aspect of the guarantee for fair trial under Article 10, see Secretary for Justice v Latker [2009] 2 HKC 100.  The essence of PSI is that “no one is bound to answer any question if the answer would have a tendency to expose the deponent to any criminal charge, penalty or forfeiture which the judge regards as reasonably likely to be preferred or sued for.”  (per Goddard LJ in Blunt v Park Lane Hotel Ltd [1942] 2 KB 253 at 257, cited by Lord Neuberger MR in Gray v News Group Newspapers Ltd [2012] 2 WLR 848 para 14).

42.In HKSAR v Lee Ming Tee [2001] 1 HKLRD 599 at p 620, Ribeiro PJ explained the PSI at common law (which is wider in scope than the protection under Article 10, see para 47 below) by reference to Lam Chi Ming v The Queen [1991] 2 AC 212:

“It entitles a person; … to refuse to answer a question, or to produce any document to thing, if to do so ‘may tend to bring him into the peril and possibility of being convicted as a criminal’ …”

43.Further, at p.621, His Lordship said:

“Assuming … that some of the answers were self-incriminating, once the respondents gave them to the Inspector, their privilege against self-incrimination was extinguished in relation to the answers given. This is because the essence of the privilege is the withholding of answers. Having given the answers, the respondents were left with the protection afforded by the prohibition against use of the answers in evidence against them.”

44.In light of the discussion in the subsequent paragraphs in that judgment, it is apparent that that Ribeiro PJ’s reference to the prohibition against the use of the answers in evidence in the last sentence was referring to the direct use prohibition, viz. using the evidence directly as evidence in the subsequent criminal trial. There is no free-standing derivative use immunity at common law.

45.Therefore the relevant moment to consider an entitlement to PSI is the time when the answer is given or when a document is produced. In submitting that the relevant time was the time when the Director made the application for access, counsel proceeded on the erroneous basis that the Director was requesting access from the Husband and STL.  The Director did not do so.  The Director applied to the court for access to these documents.  As explained earlier, the court does not possess these documents for the parties.  Therefore, the date of application should not be the relevant moment.  The Husband and STL had made the statements and disclosed the documents well before Saunders J making the findings and referral.

46.There was no suggestion that at the time when they made the statements and gave discovery of documents, the suspicion against them were being seriously investigated by either the prosecuting authority or the police.  Thus, even though we agree with Mr Thomas and Mr Pointer on their legal submission on the meaning of “charge” under Article 10 of the HKBoR, we are not satisfied that PSI as an aspect of Article 10 was engaged when the documents were filed and lodged on behalf of the Husband and STL.

47.But that is not the end of this sub-issue.  Under common law, PSI has a wider scope than the guarantee for fair trial under Article 10, see A v Commissioner of Independent Commission Against Corruption (2012) 15 HKCFAR 362 at para 111.  It could be relied upon by a person even though there was no pending criminal investigation.  All that is required is that there is a real and appreciable risk of being prosecuted. In Gray v News Group Newspapers Ltd [2012] 2 WLR 848, Lord Neuberger said at para 15:

“The nature of the risk which must be present before PSI can be invoked was described by Lord Denning MR in Rio Tinto Zinc Corpn v Westinghouse Electric Corpn [1978] AC 547, 574 as “a real and appreciable risk as distinct from a remote or insubstantial risk”. It appears that PSI can be asserted not only if the risk claimed is that the evidence sought will or may be used directly to support a prosecution, but also where the risk claimed is that such evidence ‘may set in train a process …which may lead to discovery of real evidence of a criminal character” to quote from Lord Wilberforce in Rank Film Distributors Ltd v Video Information Centre [1982] AC 380, 331B …”

48.Counsel did not advance any arguments on real and appreciable risk at the time when the statements were made by the Husband and STL and when they produced the documents.  In the absence of arguments, we are not minded to say that there was no real and appreciable risk in the present circumstances and we would not rest our decision on the non-engagement of PSI on such a ground.

49.The third sub-issue is the independent existence of the materials from the will of the Husband and STL.  In Saunders v UK (1997) 23 EHRR 313 p.337-8, at para 69, the European Court said:

“The right not to incriminate oneself is primarily concerned, however, with respecting the will of an accused person to remain silent. As commonly understood in the legal systems of the Contracting Parties to the Convention and elsewhere, it does not extend to the use in criminal proceedings of material which may be obtained from the accused through the use of compulsory powers but which has an existence independent of the will of the suspect such as, inter alia, documents acquired pursuant to a warrant, breath, blood and urine samples and bodily tissue for the purpose of DNA testing. …”

50.On the facts of Saunders, the European Court did not need to decide on what materials come within the category of documents which has an existence independent of the will of the suspect obtained under compulsion.  The materials in question before the court was the transcript of statements obtained from the applicant by the Inspectors which did not come within that description.  The court went on to hold that there had been infringement of the right not to incriminate oneself, see paras 69 to 76.

51.This principle was adopted in Attorney General’s Reference No.7 of 2000 [2001] 1 WLR 1879 at para 59 and C plc v P [2008] Ch 1.  In Attorney General’s Reference, the documents in question were cheque stubs, bank statements, returned cheques, a betting file and some loose gambling statements, see para 16 and they came to light in circumstances described at para 17 of the judgment. In C plc v P, the incriminating evidence in question was the images stored in the computers seized pursuant to a search order. In both cases, there was statutory abrogation of PSI.

52.In C plc v P [2008] Ch 1 at para 16, independent evidence was held by Peter Smith J at first instance to mean “evidence that came into existence independently of (and usually prior to) any compulsory questioning of the defendant or any application of the court’s compulsory discovery process”.  The Court of Appeal did not adopt another meaning for the expression in its judgment.

53.The principle was also mentioned by Ribeiro PJ in HKSAR v Lee Ming Tee [2001] 1 HKLRD 599 at p.641:

“In evaluating this balance, it is important to bear in mind that the purpose of the privilege is to respect the will of the accused to remain silent, thereby ensuring that the accused is not compelled to provide proof of his or her guilt. The privilege has no application to provide evidence which exists independently of the will of the accused. This proposition was expressly recognized in Saunders v United Kingdom (1996) 23 EHRR 313 at para 69. Indeed, in my judgment, there is much to be said for the general proposition that there is no inherent unfairness in establishing a person’s guilt by the use of reliable objective evidence obtained from an independent source, even if the acquisition of that evidence was facilitated by clues contained in the excluded admissions …”

See also Koon Wing Yee v Insider Dealing Tribunal [2008] 3 HKLRD 372 at para 81.

54.Mr Thomas submitted that this principle has been subject to doubt in England.  Counsel referred us to R (Bright) v Central Criminal Court [2001] 1 WLR 662; R(Malik) v Manchester Crown Court [2008] 4 All ER 403, Thanki, The Law of Privilege, 2^nd Edn paras 8.32 to 8.40.  In Malik [2008] 4 All ER 403 at paras 74 to 78 Dyson LJ was of the view that the law was in an uncertain state.

55.However, after Malik, the English Court of Appeal’s decision in R v S(F) [2009] 1 WLR 1489 Lord Judge CJ applied this principle as established law, see paras 18 to 19.

56.We do not consider it necessary to review the soundness of this principle at length in this judgment. We are bound by the judgments of the Court of Final Appeal. Further, on the basis that this principle is part of Hong Kong’s common law, subject to the question of compulsion which we shall examine below, the documents which emanated from the Husband and STL are obviously not having an independent provenance as those considered in Attorney General’s Reference No.7 and  C plc v P.  Assuming that the Husband and STL were correct in contending that those documents were disclosed under compulsion, we do not think it can be argued that they fall within the scope of this principle.

57.For these reasons, we would not rest our decision on the non-engagement of PSI on this ground. 

58.In addition to these sub-issues, one may also queried whether the Husband and STL can claim PSI in respect of documents supplied by the Wife or her lawyers to the court.  It is a separate question from the release of the Wife from her implied undertaking because once the documents had been filed, lodged or placed before the court, it is the court that has possession, custody and control, not the Wife.  The Wife did refer to materials disclosed by the Husband and STL in the course of the proceedings in her documents (or those placed before the court by her lawyers). But that does not make those the Husband’s or STL’s documents. It is analogous to a witness to an incriminating statement by a suspect repeating to the court such a statement.  The Wife was not compelled by the court to make those statements.  On what basis can the Husband and STL claim PSI in respect of those?  This point was not debated before us (though Mr Howard made a similar point in the context of the Wife’s application for release from her implied undertaking).  Given our conclusion on the first sub-issue, we do not need to decide the appeal by reference to it.

59.To sum up, we hold that PSI is not engaged because the documents were conduct comprising in the acts of perjury, forgery and conspiracy to pervert the course of justice. This is sufficient to dispose of the Husband and STL’s reliance on PSI.

C2.   Abrogation of PSI in matrimonial proceedings

60.This issue relates to the question of compulsion. Mr Thomas and Mr Pointer submitted that the Husband and STL were compelled to make the statements in their affidavits and disclosed documents in the matrimonial proceedings because of the abrogation of PSI in matrimonial proceedings.  As a result, they contended, the court should not regarded their filing of affidavits and disclosure of documents as exhibits as voluntary acts, waiving whatever claims they might have on PSI.

61.The documents in respect of which the Husband and STL claimed LPP were produced pursuant to an order of Saunders J based on his conclusion on the fraud exception in R v Cox & Railton (1884) 14 QBD 153 despite the objection of the Husband and STL.  There is little doubt that those documents were produced under compulsion.  Thus, the discussion of this issue has no bearing on those documents.

62.The principal authority relied upon by Mr Thomas and Mr Pointer is R v K [2010] QB 343.  That was a decision of the English Court of Appeal in the context of a criminal trial.  The defendant was charged with cheating the public revenue.  The evidence proposed to be adduced by the prosecution included materials disclosed by the defendant in the earlier matrimonial proceedings between him and his wife including the Form E and answers to questionnaire.  He objected to the admissibility of such evidence on the basis that he had been compelled to disclose such information in the ancillary relief proceedings as he could not invoke PSI there.  Thus, the use of such evidence in the criminal trial would be against the guarantee for fair trial in article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms.  This argument failed at first instance before Judge Karsten QC who followed the decision of Charles J in A v A [2000] 1 FLR 701 held that a party could rely on PSI to withhold information in ancillary relief proceedings.  The defendant appealed and succeeded before the Court of Appeal.

63.After referring to the duty of the parties to give full and frank disclosure in matrimonial proceedings as discussed in Jenkins v Livesey [1985] AC 424, Moore-Bick LJ held in the Court of Appeal that the purpose of section 25 of the Matrimonial Causes Act 1973 would be frustrated if parties could withhold from the court relevant information on the grounds of PSI.  Adopting the same approach as in Bishopsgate Investment Management Ltd v Maxwell [1993] Ch 1, he went on to hold that by necessary implication, parties to ancillary relief proceedings were not entitled to invoke PSI and the incriminating materials were obtained from the defendant under compulsion.  Then following the principles set out in Saunders v United Kingdom 23 EHRR 313, the court held that the use of such materials would deprive the defendant a fair trial and they should be excluded from the evidence.

64.In the court below, the Judge did not follow R v K. At paras 76 and 77, he said:

“76. The fundamental logic of the decision in R v K was that the purpose of the matrimonial legislation would be frustrated if parties were allowed to rely on the privilege against self-incrimination to withhold from the court relevant information related to their financial affairs. I cannot accept that proposition. In my view, the opposite would be true – the purpose of the equivalent Hong Kong matrimonial legislation (or indeed any legislation) would be frustrated if parties and witnesses are given a general immunity for providing false information and forged documents to the court in the course of ancillary relief proceedings (or any legal proceedings).

77. For that reason, I am far from persuaded that the Hong Kong equivalent of sections 23 and 24 of the Matrimonial Causes Act 1973 and the Family Proceedings Rules have by necessary implication abrogated the privilege against self-incrimination.  Indeed, I am not convinced that the 2^nd or the 3^rd Defendant had in mind any implied abrogation of the privilege against self-incrimination when they gave discovery of documents or filed their affirmations in court in the course of the ancillary relief proceedings.  Quite on the contrary, the privilege had been asserted on behalf of the 2^nd and 3^rd Defendants at the Trial, as recorded in the Main Judgment at paragraph 128 and the Barrell Judgment at paragraphs 68-69; 72; 83.”

65.It had to be noted that in R v K, the court had to deal with the admissibility of the objected evidence in a criminal trial for tax evasion, which was plainly collateral to what had been in issues in the matrimonial proceedings.  By the time the matter came before the court for consideration, the Revenue had already obtained the evidence from an informer.  It is not clear from the report as to who was the informer and how he/she got access to the materials.  The objection of the defendant was in respect of the direct use of such evidence in the criminal trial by the Revenue.  There was no objection as to derivative use.

66.Thus, Moore-Bick LJ said at p.360B-C:

“In many cases information obtained by way of disclosure in ancillary relief proceedings will provide leads that enable the Crown to obtain evidence from other sources that is sufficient to support a prosecution and in such cases there will be no need to rely on evidence obtained from the accused himself.”

67.In other words, the English Court of Appeal did not consider the implications of its holding on abrogation of PSI in respect of access to incriminating materials for derivative use.  Nor did it consider such implications in respect of investigation of offences which stemmed from issues directly relevant in the matrimonial proceedings like perjury or forgery which we are now concerned with.

68.The Court of Final Appeal in A v ICAC (2012) 15 HKCFAR 362 emphasized that the principle of legality is applicable in construing a statute which is said to have the effect of abrogating PSI.  In the joint judgment of Bokhary and Chan PJJ, at para 24, their Lordships summarized the principle succinctly:

“By virtue of the principle of legality, human rights and fundamental principles of law, even where derogable, cannot be overridden except by express words or necessary implication.”

69.The need to have special regard to this principle was explained by Lord Hoffmann in R v Secretary of State for the Home Department, ex p Simms [2000] 2 AC 115 at p.131 and the Australian High Court in Coco v The Queen (1993) 179 CLR 427 at p.437.  After referring to those authorities and the decision of the Appeal Committee in Chan Sze Ting v HKSAR (1997-98) 1 HKCFAR 46 at p.50, Ribeiro PJ (with whom the Chief Justice and Lord Hoffmann NPJ agreed) said at para 71 of the judgment in A v ICAC (2012) 15 HKCFAR 362:

“The question is therefore whether [the relevant statutory provision] unmistakably, expressly or by necessary implication, abrogated the appellant’s privilege against self-incrimination.”

70.With the greatest respect, whilst we have no reason to disagree with the result reached in R v K, we do not accept the proposition that the duty of full and frank disclosure arising from section 7 of the Matrimonial Proceedings and Property Ordinance (reading together with the related subsidiary rules) necessarily call for a wholesale abrogation of PSI in matrimonial proceedings.

71.As the present case demonstrated, PSI affords protection to a person in a wide range of circumstances even in matrimonial proceedings. Notwithstanding the duty of full and frank disclosure, there is no need to abrogate PSI in respect of perjury or forgery of documents actually used by a party in matrimonial proceedings.  The same can be said for conspiracy to pervert the course of justice in such proceedings.  Thus, if a party is cross-examined in an ancillary relief application about a certain part of his affidavit and if it is suggested that he was deliberately lying, section 7 does not prevent him from declining to answer by pleading PSI.  That was exactly what happened in the present case when the Husband and STL were cross-examined about the 2006 CLA at the trial before Saunders J.

72.Were it otherwise, the Husband and STL would be obliged to answer questions regarding the authenticity of the 2006 CLA no matter how incriminating the answers might be.  If (and we emphasize that it is a hypothetical situation as we have not come to any conclusion with regard to the authenticity of the 2006 CLA) the 2006 CLA were not executed on the date as it appeared on the face of the document, the Husband and STL would in effect be obliged to admit to giving inaccurate statements in their previous evidence in their affidavits when questioned about it whether by way of cross-examination or by questionnaire.

73.A plea of PSI in such circumstances would not frustrate the court from performing its duty under section 7.  The court can still adjudicate on the issues by reference to other evidence before it and if necessary draw adverse inference against the party who rely on PSI, see Rank Film Distributors v Video Information Centre [1982] AC 380 at p.423-4 per Templeman LJ:

“In every case in which a defendant is faced with possible self-incrimination as a result of discovery or interrogatories and especially where the tort and the crime are constituted by the same activity, the defendant has a choice. The defendant may choose to rely on the silence and concealment afforded by the doctrine against self-incrimination in order at one and the same time to hamper the plaintiff in the proof of his civil action and as a means of resisting or avoiding criminal prosecution or conviction. Alternatively the defendant may abandon his defence to the civil action in which case he will be immune from discovery and interrogatories and will not need to rely on the doctrine against self-incrimination unless and until he is confronted with an inquiry as to damages. Failure to defend the civil action will not prejudice the defendant in any criminal proceedings. Alternatively again, if a defendant wishes to maintain a plausible defence to the civil suit, he will waive the privilege and give frank answers to interrogatories and full discovery.

The plaintiff is not wholly or necessarily defeated and the defendant is not necessarily assisted by the defendant relying on the privilege against self-incrimination. The civil court may draw conclusions where a criminal court may not. If the privilege is raised in connection with an inquiry as to damages the court will be driven to draw conclusions as to the scope and harm caused by the defendant’s activities and, in the face of silence and concealment on the part of the defendant, will not be slow to make assumptions and draw inferences which will enable damages to be awarded on a scale which will do justice to the plaintiff. If in the event damages are more generous than would have been the case if the defendant had answered all the interrogatories and afforded full discovery, the defendant can hardly complain.”

74.Citing Den Norske Bank v Antonatos [1999] QB 271 at p.295-6 per Waller LJ; V c C [2001] EWCA Civ 1509 at para 40; R (Mohamed) v Foreign Secretary (No 1) [2009] 1 WLR 2579 para 83; Memory Corporation v Sidhu [2000] Ch 645 at p.660-1, Thanki, The Law of Privilege 2^nd Edn at paras 8.17 and 8.18 expressed the following view:

“Therefore, the position with the privilege against self-incrimination is in marked contrast to a claim for legal professional privilege, where it is established law that the court is not entitled to draw any adverse inference against the party asserting the claim.”

75.Judges exercising family jurisdiction are entitled to and very often do draw adverse inference against a party who does not give full disclosures of his financial position, see for example L v C [2007] 3 HKLRD 819 at paras 68 to 71.

76.Mr Howard also referred to the scenario of allegation of sexual abuse of a child being raised in the context of matrimonial proceedings. The general understanding appears to be that a party can plead PSI in the face of such allegation.

77.In respect of financial matters, the English Court of Appeal authority of Mubarak v Mubarak [2001] 1 FLR 698 was decided on the basis the guarantee for fair trial under article 6 of the European Convention is applicable in the context of judgment summons.  Though there was no separate discussion on PSI, it is an aspect of the right to fair trial and presumption of innocence which had been explicitly recognized as rights applicable in judgment summons proceedings.  This point emerged for decision in the recent case of M v M [2013] EWCA Civ 586 in which Thorpe LJ distinguished R v K.

78.It is not necessary for us to decide whether there is room for holding that PSI is abrogated to a limited extent in matrimonial proceedings.  It suffices for us to say in the present context that there was no abrogation of PSI with regards to statements of the Husband and STL which might incriminate them in respect of perjury, forgery and conspiracy to pervert the course of justice.

79.We are of the view that the documents in question (except those subject to a claim for LPP produced pursuant to the order by Saunders J) were not filed, lodged or placed before the court by the Husband and STL under compulsion. It follows that they cannot succeed in resisting access being granted to the Director on the ground of PSI.

80.Mr Howard submitted that in any event as STL was not a party to the marriage, he was not subject to the duty of full disclosure and the rationale of R v K has no application in his case.  In view of our foregoing conclusion, we do not find it necessary to decide this point. We would simply record the respective submissions before us.  Mr Pointer contended (and Mr Thomas adopted the same position) that as STL had been joined as intervener in the divorce proceedings, he was subject to the same duty of disclosure and as such, his right to rely of PSI was likewise abrogated.  Mr Pointer accepted that PSI would not have been abrogated if the dispute between STL and the Wife were litigated in an ordinary civil action. Counsel also accepted that even in the context of matrimonial proceedings, the rights of third parties should be determined according to their strict legal rights under the general law: TL v ML [2006] 1 FLR 1263.  Counsel also agreed that if a third party is called as a witness in matrimonial proceedings, he is entitled to claim PSI when giving evidence in court.  Mr Pointer did not explain in principle why there should be a difference if the third party is joined as an intervener.

C3.   Should a successful claim of PSI bar the grant of access to the Director?

81.The issue here is whether PSI presents a bar against granting access to the Director instead of merely preventing the materials to be used as evidence in criminal proceedings.  The Director submitted that granting access to the documents and the subsequent use of the documents are two different matters.  Even assuming PSI can be successfully invoked by the Husband or STL, the Director submitted that it cannot present a bar to derivative use.  At the highest, the Director said, it would only present a bar to the admissibility of such documents in the criminal trial, if any.

82.Apart from the judgment of Ribeiro PJ in Lee Ming Tee cited above, the Director also relied on the judgment of the Court of Final Appeal in A v ICAC (2012) 15 HKCFAR 362 where the court drew a distinction between direct use and derivative use.  In the context of statutory abrogation of PSI, Ribeiro PJ said at para 77:

“Such statutes generally do not seek to prohibit and do not have the effect of prohibiting ‘derivative use’ of the compelled answers. Thus, there is usually no prohibition against using the compulsorily obtained answers to develop new lines of inquiry; to identify sources of independent evidence; to assist in formulating applications for search warrants; and so forth. Such derivative use of the compelled answers does not raise any issue concerning self-incrimination or admissibility since it is use which does not involve any attempt to adduce the answers in evidence in any curial setting. The law has always drawn a distinction between (inadmissible) compelled answers themselves and (admissible) derivative evidence independently developed from indications contained in the compelled answers.”

83.In the footnote to that paragraph, Ribeiro PJ referred to three authorities: Lee Ming Tee; R v Lam Chi Ming [1991] 2 HKLR 191 and R v Hertfordshire County Council, ex p Green Environmental Industries Ltd [2000] 2 AC 412 at p.421.  In the last case, Lord Hoffmann said at p.421G to 422A the following in respect of certain information obtained under compulsion:

“No doubt this information could have been used to assist the council in gathering evidence for a prosecution against the appellants, but English law does not regard the use of evidence obtained in consequence of an involuntary statement in the same light as the admission of the statement itself: see Lam Chi-ming v The Queen [1991] 2 AC 212, in which Lord Griffiths said that an involuntary confession did not become admissible because it had led to the discovery of evidence which confirmed its truth. On the other hand, subject to the trial judge’s discretion under section 78, evidence was not inadmissible merely because it had been discovered in consequence of an involuntary confession; see Rex v Warickshall (1783) 1 Leach 263. The appellants cannot therefore say that the possible use of evidence obtained in consequence of the information provided under section 71(2) would offend any policy of English law.”

84.It is accepted by Mr Thomas and Mr Pointer that the Court of Final Appeal had made this distinction. Counsel however submitted that such distinction was only relevant in the context of construction of the scope of statutory protection in terms of prohibited use of materials obtained under statutory compulsion with express or implied abrogation of common law privilege.  In the present case, there is no statutory protection in place and, so it was argued, therefore such distinction is not relevant.

85.Whilst the Court of Final Appeal did consider the question of derivative use in the context of statutory construction in Lee Ming Tee and A v ICAC, we do not think the endorsement of such distinction by that court was confined to the construction of statutory protection.  As can be seen from the judgments of Ribeiro PJ in Lee Ming Tee and Lord Hoffmann in Green, the distinction is based on the common law principle set out in Rex v Warickshall (1783) 1 Leach 263.  That has nothing to do with construction of statutory protection.  The principle was that facts discovered as a result of an inadmissible confession could be proved but they must be proved without calling in aid of any part of the confession. The observations of their lordships also went beyond examining the distinction from the perspective of statutory construction.

86.Mr Thomas also referred to Shannon v United Kingdom (2006) 42 EHRR 31 and Gray v News Group Newspapers Ltd [2012] 2 WLR 848 and contended that the right to a fair trial extended beyond admissibility of evidence at the trial.  Those cases concerned statements or documents obtained from a suspect under compulsion. In light of our conclusion under the previous section, we are not dealing with such situation. Further, even assuming that there was compulsion, those cases focused on the legality of such compulsion (and the criminal sanction backing up such compulsion) as opposed to the derivative use of materials obtained pursuant to such compulsion.  These, in our judgment, are separate issues.  We do not think these authorities undermine the analysis of the Court of Final Appeal and Lord Hoffmann in respect of derivative use.

87.In the premises, we agree with the submission of the Director that so long as the documents are not used directly, there would not be any infringement of PSI as a matter of common law. Derivative use of such documents is permissible.  Thus, access should not be denied on the assumption that they would be directly used at the criminal trial.

D. Legal professional privilege

88.Before the Judge, although LPP was relied upon by the Husband and STL, there was no clear identification of documents which were allegedly subject to LPP.  Nor was there any evidence placed before the Judge with regards to how LPP was said to have arisen in respect of those documents.  The Husband and STL did not file any evidence at all in these proceedings.

89.Instead parties proceeded to argue on LPP on the basis of very limited materials.  The Judge described the claim of LPP and the competing contentions before him at paras 78 to 81 of his judgment.  We would only quote from para 81 of the judgment:

“81. It was submitted to this court that the Secretary for Justice had failed to independently establish a case against the 2^nd or 3^rd Defendant based on R v Cox and Railton in order to justify disclosure and production of prima facie LPP documents. It was said that the approach of the Secretary for Justice in simply relying on Saunders J’s ruling was flawed. In any event, it was submitted that Saunders J did not have the benefit of the recent Court of Appeal decision in Citic Pacific Ltd v Secretary for Justice [2012] 2 HKLRD 701, which also considered the fraud exception, and that the learned Judge had failed to apply the correct principles. This court was invited to conclude that, on a correct application of the law, the correspondence between the 3^rd Defendant and his solicitors was indeed subject to LPP and need not have been disclosed in HCMC No. 5 of 2008 because there was no evidence that the 3^rd Defendant sought legal advice to facilitate a fraudulent purpose.”

90.For the reasons he gave at paras 82 to 83 of the judgment, the Judge said he did not have appellate jurisdiction over Saunders J and concluded that he should accord full weight to Saunder J’s rulings that no LPP attached to the communications between the Husband/STL and the solicitors and the Secretary for Justice was entitled to rely on those rulings.  He further held that the doctrine of limited waiver could not assist the Husband/STL because as a matter of law no LPP attached to any materials which are within the compass of the Cox and Railton exception and the question of waiver did not arise, see paras 85 to 89 of his judgment.

91.Though Mr Thomas and Mr Pointer advanced submissions on limited waiver based on Citic Pacific Ltd v Secretary for Justice [2012] 2 HKLRD 70, we do not read that authority (which endorsed the principle of partial waiver) as equating the effect of a court order with a waiver. There is obvious difference between a finding by a court on the Cox and Railton exception (and its consequential order for disclosure) and waiver stemming from the voluntary disclosure by a party.  There is no suggestion before us that Judge was wrong in law in holding that LPP does not attach to documents coming within the Cox and Railton exception.  The only question is whether the Judge was correct in dismissing any LPP claims by reason of the rulings by Saunders J. 

92.Thus, the appeal on this aspect of the case is a narrow one. The issue is whether the Judge should examine the claim of LPP afresh instead of simply adopting the rulings of Saunders J on the Cox and Railton exception.  If the Judge was correct, the Husband and STL are bound by the rulings of Saunders J in these proceedings.  If the Judge was not correct, the court must examine their claims for LPP.  As we indicated at the beginning of the hearing, this court is not in a position to undertake the task of examining such claims given the manner in which the issue was argued below.  If we come to the conclusion that the LPP claims should be examined independently from the rulings of Saunders J, the proper course is to remit the matter back to a judge of the Court of First Instance with directions for such LPP claims to be properly ventilated below.

93.Mr Thomas submitted that the Judge erred in law in adopting the rulings of Saunders J.  He relied on the legal principle discussed in Hollington v Hewthron [1943] KB 587 that generally a judgment only affect and bind those privy to the original proceedings.  A judgment in personam between A and B cannot be relied upon by C as evidence in C’s claim against A.  At p.596 Goddard LJ said:

“If [a judgment] given between the same parties they are conclusive, but not against anyone who was not a party. If the judgment is not conclusive we have already given our reasons for holding that it ought not to be admitted as some evidence of a fact which must have been found owing mainly to the impossibility of determining what weight should be given to it without trying the former case.”

94.Though the actual result in Hollington v Hewthron [1943] KB 587 had been reversed by section 62 of the Evidence Ordinance Cap 8 in respect of the effect of a criminal conviction in subsequent civil proceedings, subject to that statutory provision the general principle with regard to the effect of a judgment in subsequent legal proceedings remains good law: see R v Hertfordshire County Council [2010] EWHC 2056 (Admin), [2011] PTSR 269 paras 39 to 51; Caylon v Irene Michailaidis [2009] UKPC 34, [2010] 2 LRC 280 at paras 28 to 32.

95.The Director did not argue to the contrary. As there is no suggestion that the Director is privy to any party before the court when Saunders J ruled on the Cox and Railton exception, the Judge erred in law in adopting the rulings of Saunders J on the basis that he had no appellate jurisdiction over Saunders J.

96.In the appeal, the Director contended that the Husband and STL were estopped from advancing any plea of LPP by reason of the rulings of Saunders J based on the extended doctrine of res judicata discussed in Bragg v Oceanus Mutual Underwriting Association  [1982] 2 Ll Rep 132 and China North Industries Investment v Chum [2010] 5 HKLRD 1.  Though that was not the basis on which the Judge decided the issue and the respondent notice of the Secretary for Justice did not raise this argument, there was no objection from Mr Thomas and Mr Pointer to such point being taken.  We have heard full submissions on the point and we see no reason why we cannot decide on it. 

97.This line of cases were recently considered by this court in King’s City Holdings Ltd v De Monsa Investments Ltd [2013] 4 HKC 450. In that case, Fok JA (as he then was) reviewed the relevant cases, including the Privy Council’s judgment in Caylon v Irene Michailaidis [2009] UKPC 34, [2010] 2 LRC 280 and the judgment of Teare J in Michael Wilson & Partners v Sinclair [2012] EWHC 2560 (Comm), [2013] 1 All ER (Comm) 476.  The following propositions can be taken from that judgment:

(a) Under the extended doctrine of res judicata, the court has the power to strike out attempts to re-litigate a decided issue as an abuse of process of the court, even where the parties to the subsequent proceedings are not the same and cannot be described as privies of the original parties (para 39);

(b) The exercise of this power is based on the jurisdiction of the court to prevent abuse of process and it is a separate principle from the admissibility of judicial findings in earlier proceedings as evidence in subsequent proceedings (para 78);

(c) The burden of establishing abuse rests upon the party who relies on the earlier decision and it is highly fact sensitive (para 40);

(d) The jurisdiction would not be engaged simply because there is a re-litigation of an issue previously decided between different parties (para 43);

(e) The jurisdiction would be engaged if it is shown to the satisfaction of the court that permitting a party to re-litigate would either be manifestly unfair to the other party or would bring the administration of justice into disrepute. If either of these conditions is satisfied (and the onus is on the party contending that there is an abuse), there is no need to show any further special circumstances (paras 41 to 47);

(f) There is no requirement to show that the subsequent re-litigation would have the effect of reversing the outcome of the earlier litigation (para 55);

(g) Re-litigation based on substantially the same evidence would bring the administration of justice into disrepute and the jurisdiction can be invoked on that ground (paras 64 to 69);

(h) A litigant’s disadvantage in previous proceedings may weigh against a conclusion that re-litigation of an issue is an abuse of process (para 73); and

(i) A court should not deprive a litigant his day in court lightly and should only exercise such jurisdiction by way of striking out in a plain and obvious case (para 74).

98.In his submissions, the Director said it is manifestly unfair to the Secretary for Justice for the Cox and Railton exception to be re-litigated. He relied on the following factors:

“a. in HCMC No. 5 of 2008, Saunders J made a series of orders (“Disclosure Orders”) at the interlocutory stages requiring D2 and D3 to produce documents normally covered by LPP (Judgment of Ng J para 79 [3542];

b. The Disclosure Orders were not subject to any appeal;

c. Documents were then disclosed and used in the course of the proceedings;

d. No attempt to claim any privilege had been made;

e. The Conspiracy Counterclaim has been settled in D1’s favour;

f. The alleged criminal acts formed the main theme of the cross-examination undertaken on D1’s behalf.  D2-D4 had all the opportunities to make submissions in that regard, and no doubt full submissions had been made;

g. Any liberty to re-litigate the issue of LPP in the circumstances will send a completely wrong message to the society, thereby bringing the system into disrepute.”

99.Further, he also highlighted the difficulty faced by the Secretary for Justice in view of the lack of access to the relevant materials as Saunders J only directed his judgments be given to the Director.

100.Alternatively, the Director submitted that in view of the same factors it would bring the administration of justice into disrepute if the Husband and STL were allowed to re-litigate on the Cox and Railton exception.

101.Amongst these factors, we observe as follows:

(a) Factors (a), (b) and (e) are neutral as far as the present exercise is concerned;

(b) As regards (c), there is a dispute as to whether the LPP documents had been properly admitted as evidence in the trial. For the reasons given in our judgment in the matrimonial appeals, we hold that Saunders J was incorrect in regarding them as  evidence before him;

(c) As regards (d), it is factually inaccurate. The Husband and STL did claim privilege though they did not appeal against the rulings of Saunders J on the Cox and Railton exception;

(d) As regards (f), we would again refer back to our judgment in the matrimonial appeals. In the light of our conclusions there, this factor cannot assist the Director; and

(e) Factor (g) is a self-serving proposition and it cannot take the debate further.

102.On the limitation faced by the Director at this stage, the handicap can be ameliorated by the grant of access to him in respect of materials which are not subject to any LPP claims. The court should give a reasonable opportunity to the Director to advance a case of Cox and Railton exception after such access has been given.  Further, the Director is assisted in this regard by Saunders J’s account of the relevant events in his main judgment.  That can at least serve as a guide through the papers he obtained from the court.  At the same time, Mr Thomas referred us to an authority suggesting that the court must observe the exception has to be established without reference to documents in respect of which LPP is claimed unless there is some exceptional factor of real weight: see BBGP Managing General Partner v Babcock & Brown Global Partners [2011] Ch 296 paras 69 to 72.  It is not necessary for us to decide in these appeals how the discretion to inspect the closed materials is to be exercised if the LPP claims were to be considered afresh and we would not pre-empt any course to be taken in the future.

103.The fairness of the situation can be tested this way: assuming that the rulings of Saunders J had gone the other way, viz. the Cox and Railton exception does not apply, there is nothing to stop the Director to come to court to seek a search warrant in respect of the documents if he is armed with sufficient evidence to make out a case of Cox and Railton exception.

104.We are not satisfied that it would be manifestly unfair to require the Director to establish the Cox and Railton exception before access of LPP materials is granted to him.

105.The factors relied upon by the Director are, in our view, insufficient to establish a case of bringing the administration of justice into disrepute if the Husband and STL were permitted to re-litigate the Cox and Railton exception in the context of grant of access of LPP materials to the Director.  The relevant rulings of Saunders J were made on 20 December 2010. Because of the limited access to materials on the part of the Director, the evidence before Saunders J and the competing submissions before His Lordship are not placed before the Judge.  Nor do we have regard to such materials in these appeals.  Under such circumstances, the Judge could only refer to para 107 of the main judgment of Saunders J as to how the rulings came to be made.  That paragraph was as follows:

“107. In the course of the interlocutory steps I had made orders requiring the husband and the father to disclose documents which would ordinarily have been protected from disclosure by legal professional privilege. Those orders were made because I was satisfied that there was sufficient prima facie evidence of criminal or illegal acts on the part of the husband and the father, in which circumstances legal professional privilege does not extend to protect the documents: see e.g. Cox v Railton (1884) 14 QBD 153. A number of very revealing documents were required to be produced.”

106.The rulings were made in the context of the section 17 proceedings and the fraud action which were due to be tried in February 2011.  Though that trial was scheduled to take place in open court, the section 17 application and the fraud action was settled. Notwithstanding Mr Howard’s submissions based on Smith Klein Beecham Biologicals SA v Connaught Laboratories [1999] 4 All ER 498, we do not think the LPP materials should be regarded as having been referred in open court.  The revocation of a patent in that case was a different process (involving the judge exercising an independent judgment pertaining to a matter affecting public interest on monopolistic rights irrespective of the positions taken by the parties) and the defendant only adopted a passive stance of not resisting.  In contrast, STL and the Husband positively consented to the setting aside of the relevant transactions in February 2011. Further, even if the documents had been referred in open court, the court still retains the discretion in deciding whether access of such documents should be given to any third parties: see R (Guardian News and Media Ltd) v Westminster Magistrates’ Court [2013] QB 618.

107.Though there were extensive references to the LPP materials in the main judgment of Saunders J, even with the general publication of that judgment pursuant to our decision in the matrimonial appeals, this is not the same as giving full access of such documents to the Director.  In other words, the right of the Husband and STL to claim LPP over such materials has not been completely abrogated as a matter of fact.

108.The strongest argument on the part of the Director in advancing his case on bringing the administration of justice into disrepute is the referral by Saunders J.  He contended that the Secretary for Justice was involved because of that referral and there were findings by Saunders J which call for investigation. He submitted that justice could not be done if the Husband and STL were allowed to re-litigate the Cox and Railton exception when they had an overwhelming advantage over the Director due to the lack of access to relevant documents on his part. 

109.We have already set out at the beginning of this judgment our view on the proper approach of this court with regard to the investigation by the Director despite the setting aside of the findings of Saunders J.  We have also explained above that reasonable time should be given to the Director to put forward a case of Cox and Railton exception after he gains access to the other relevant materials. It must not be assumed that the re-litigation of the Cox and Railton question would result in the withholding of these materials from the Director.  As held in King’s City Holdings Ltd v De Monsa Investments Ltd [2013] 4 HKC 450, re-litigation of the same issue is not per se an abuse of process.  Unlike that case, we cannot say whether the same evidence as those advanced before Saunders J would be relied upon in the debate between the Husband and STL on the one side and the Director on the other.  Viewed thus, we cannot accept the submission that such re-litigation would bring the administration of justice into disrepute.

110.This is particularly so when one bears in mind that the Director may obtain access to the same materials by other means.  We shall consider the Wife’s application for the release from her implied undertaking below.  If we uphold the Judge’s decision in that respect, the Director would gain access to the relevant documents through the Wife.

111.Alternatively, given the information already contained in the main judgment of Saunders J, the Director may take other steps to obtain the relevant documents from other sources.  Whilst he may be equally faced with a plea of LPP in pursuing such courses, the Director can also try to establish a case on the Cox and Railton exception in those other applications. Given the principle in Hollington v Hewthron, there is no reason why the Director should be endowed with the benefit of the rulings of Saunders J in those other applications.  

112.Moreover, based on the information already contained in the main judgment of Saunders J, the Director could pursue the necessary investigation in many respects. As there were quite detailed recitation of the relevant events and documentations in that judgment, as far as derivative use goes, access to copies of the LPP materials which are now in the custody of the court may not be as crucial as one might otherwise think.  As regards direct use in criminal trial (if there were to be one), we do not think the prosecution can rely on the rulings of Saunders J to pre-empt the Husband or STL from re-arguing the Cox and Railton question in view of the inapplicability of issue estoppel in criminal proceedings: see DPP v Humphreys [1977] AC 1.

113.For these reasons, we respectfully disagree with the Judge on his adoption of the rulings of Saunders J.

E. The balancing exercise

114.After due consideration on the principal grounds of the Husband and STL to resist access being granted by the court to the Director, we can now come back to the balancing exercise.  We repeat para 85 of Guardian News in which Toulson LJ set out the approach for balancing conflicting factors:

“In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be counterveiling reasons. … I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court’s evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others.”

115.We have already explained why, in the context of access being sought by the Director as opposed to a journalist, in addition to open justice, the relevant consideration can also be extended to the public interest in the proper investigation for criminal sanction against activities which undermine the integrity of our administration of justice.  This is particularly of relevance in the present case when the proposed investigation by the Director is in respect of allegations of perjury, conspiracy to pervert the course of justice and using forged documents for the purpose of court proceedings.  In our judgment, where access is sought for such purpose, the case for allowing it is even stronger than the case for granting access for proper journalistic purpose.

116.Even so, we must consider the counterveiling interests of those opposing the grant of access. In his reply submissions, in addition to PSI and LPP, Mr Pointer advanced the following counterveiling factors:

“(1) the transactions said to have been based on the doubtful document have all been reversed by court order;

(2) the document itself [2006 CLA] has been set aside;

(3) W is being paid her indemnity costs of that process;

(4) W is entitled to damages for any loss she can establish [in fact none as already shown];

(5) W has secured a substantial ancillary relief award in her favour [however it may be modified on appeal];

(6) there is in fact no reason to think that the sum ultimately held to be due will not be paid;

(7) this is in truth ‘a family squabble’ [as has been stated by STL];

(8) W is herself guilty of serious misconduct; and

(9) the trial judge has already held that (a) W was herself the first person to engage in financial misbehaviour and (b) that W’s financial misconduct stimulated STL and H to react in their opposition to her claim.”

117.With respect, we have given serious consideration to these factors.  We do not think we need to address them at length.  We can simply observe at the end of the day, it is a matter for the Director to decide whether there should be any prosecution and if he deems fit, these factors could be taken into account.  At the risk of repeating ourselves, it is not for this court to tell the Director whether the criminal investigations on these very serious allegations should be pursued and how they should be pursued.  Within the context of the balancing exercise in the court’s grant of access of documents to the Director, we do not think these factors, whether taken individually or collectively could carry much weight.  For reasons already canvassed at length, PSI cannot assist the Husband and STL.  The only counterveiling factor of any real weight is LPP, which as explained above, has not been properly resolved before the Judge.  In our judgment, but for the LPP factor, the balance is overwhelmingly in favour of upholding the Judge’s decision.

118.Subject to the directions we give below for the proper disposal of the LPP claims, we will uphold the Judge’s decision on the grant of access of the documents to the Director.

119.Mr Thomas informed the court that apart from the documents disclosed pursuant to the orders of Saunders J after his rulings on the Cox and Railton exception, there are other materials which STL would claim LPP as well.  We assume the same stance is adopted by the Husband. In the light of our conclusion on the effect of the rulings of Saunders J as between the Director and the Husband/STL, we do not think it is appropriate for the LPP claims to be considered without proper identification and particularization of the subject matters of the claims.

120.Further, as we have said, the Director should be given a reasonable opportunity to study the materials not subject to any LPP claims in order to advance his own case on Cox and Railton.  We do not accept Mr Thomas’ submission that it is now too late for the Director to do so. As we see it, as the Husband and STL had not filed any evidence in this case, they have not yet advanced a proper claim for LPP.  Further, by reason of their objections, the Director has not been able to access other relevant materials (those not subject to LPP) which he should have.     

121.We therefore direct as follows as between the Director and the Husband and STL:

(a) Subject to compliance by the Husband and STL with (b) below, the question of LPP shall be remitted back to a judge of the Court of First Instance to decide;

(b) The Husband and STL shall file their respective affidavits within 21 days identifying  the documents which each of them claims LPP and the grounds for advancing such claims;

(c) In respect of documents not subject to such claims or in the event that no affidavit is filed pursuant to (b) above, paragraph 1 of the order of the Judge of 14 May 2103 shall be implemented after 21 days from the date of handing down of this judgment;

(d) The Director shall have 42 days from the date when he obtains access to the documents pursuant to (c) above to file his evidence in reply, including evidence on the Cox and Railton exception; and

(e) There shall be liberty to apply to the judge assigned to hear the matter for further directions.

F. Release of the Wife from implied undertaking

122.Though counsel made submissions before us on the applicability of Order 24 Rule 14A in the present case, we are of the view on the facts of this case the resolution of that point should not bring about any material difference to the end result in terms of the release of the Wife from her implied undertaking.  Even if the case is within the scope of Rule 14A, the court still has discretion to order otherwise.  At the same time, if the case is outside the scope of Rule 14A, the court also has the discretion to grant the release.  The main difference between the two scenarios is this: the Wife need not make an application if the case is within Rule 14A, it would be for STL and the Husband to make an application and show special reasons.  Now that an application has been made by the Wife and the substantive objections on the part of STL and the Husband to the release are before us, this court should determine the appeal by reference to the substantive issues as opposed to procedural considerations.

123.In the circumstances, on the question of the applicability of Rule 14A, we shall confine ourselves by saying that we respectfully agree with the Judge that the trial before Saunders J did not take place in open court and the Wife cannot pray in aid that rule in her application for release from the implied undertaking.

124.We have been referred to a number of authorities on how the court should approach an application for release of implied undertaking as to confidentiality in respect of documents obtained from discovery.  Before we discuss the relevant principles, we would make some general observations.  First, it appears that some of documents in question were not documents obtained by discovery.  Though Mr Thomas and Mr Pointer relied on R v K to contend that all materials filed by the Husband and STL should be regarded as filed under compulsion due to the duty of full disclosure in ancillary relief proceedings, we have set out our reservations as to the analysis in R v K and its applicable scope above.  Submissions before us have proceeded on the basis the same restriction applies to materials filed other than by way of documents produced from discovery. We do not propose to consider on our own whether this approach is correct as we can decide the appeal without drawing a distinction between the documents produced by way of discovery and those filed and lodged by the Husband and STL as part of their own case. 

125.Second, Mr Thomas and Mr Pointer placed great reliance on the Canadian case of Juman v Doucette [2008] 1 RCS 157.  But the duty to discovery in Canada is different from the position in Hong Kong. As it is apparent from that judgment, in particular at paras 20 and 46, a party is obliged to produce documents without regard to PSI.  That is not the general position in Hong Kong. In respect of ancillary relief proceedings, we refer back to our discussion on R v K.  In any event, the issue in Juman revolved around whether there should be an exception from the implied undertaking if the release of the information is for bona fide disclosure of criminal conduct.  The Supreme Court of Canada held that the balance of interests relevant to whether disclosure should be made of alleged criminal conduct is better evaluated by a court than by a litigant.  In other words, leave should be obtained from the court.  This is not in dispute in the present case.

126.Third, counsel relied on EMI v Spillane [1986] 1 WLR 967 to contend that the mere fact that the release is for investigation of criminal activity is not enough.  Whilst we agree that investigation of criminal activity may not be enough to outweigh the counterveiling interest of the party giving discovery, it all depends on the facts of the case. What the Vice-Chancellor said in that case was:

“So long as documents are held solely as the result of discovery … in my judgment, it would be quite wrong to authorize their use in criminal proceedings brought under fiscal laws and having no connection with the original cause of action.”

127.Counsel referred us to the judgment of Lindsay J in O v Z [2005] EWHC 238 at para 83 as support for the proposition that this observation should not be confined to offences under fiscal laws.  However, if one were to read the whole section of the discussion of Lindsay J on the release from implied undertaking at paras 72 to 85, it is clear that Lindsay J did not regard the dicta in Spillane as laying down an immutable principle of law that release cannot be granted in respect of criminal offences not related to the original cause of action.  On the facts of  O v Z, the court released a computer expert from the implied undertaking to permit the disclosure of the offensive material to the police.  The material was obtained by the expert in the execution of a search order granted in an intellectual property case.  In the examination of the same, paedophile pornography of a serious nature was found.

128.Lindsay J derived considerable guidance from the judgment of Swinton Thomas LJ in Re C (a minor) (care proceedings: disclosure) [1997] Fam 76.  In that judgment, Swinton Thomas LJ set out 10 relevant factors in considering whether the court should authorize disclosure of materials in proceedings concerning children whilst emphasizing that it is impossible to place them in any order of importance as it would vary from case to case.  We recognize that the court plays a special role in proceedings concerning children and as such not all factors enumerated by His Lordship are relevant in other contexts.  However, ultimately it is a balancing exercise. 

129.As far as general principles are concerned, the law can be found in the judgment of Lord Oliver in Crest Homes plc v Marks [1987] 1 AC 829.  The implied undertaking is given to the court and the court can release or modify it in appropriate cases.  How the discretion is to be exercised is case and fact sensitive.  In general, the court will not release or modify the implied undertaking save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery.  

130.In the context of release of information for criminal investigation by public authority, see Marlwood Commercial Inc v Kozeny [2005] 1 WLR 104 at paras 41 to 56 and Re NDT (BVI) Trading Ltd (No 2) [2009] 5 HKLRD 615 paras 5 to 8.  In NDT, Kwan JA granted a release of the implied undertaking to permit a party to lodge a criminal complaint in respect of perjury. In that context, Her Ladyship said at para 7:

“It is a balancing exercising whether what is sought to be achieved by relaxing the implied undertaking is more important for the administration of justice generally, such as in discouraging and punishing false evidence, than in maintaining confidentiality so as not to operate as a disincentive to full and frank discovery.”

131.This should be read together with para 6,

“In exercising this discretion, the court may have regard to many factors and they vary from case to case. It is not possible to give an exhaustive list. A number of these factors were mentioned in Mead Corp v Carbonless Papers (Australia) Pty Ltd [2002] WASC 237 para 45. They include the nature of the document, the nature of the information in the document, any prejudice the author of the document may sustain, and the likely contribution of the document to achieving justice in the second proceedings.”

132.Mr Pointer submitted that since Kwan JA placed some reliance on A v A [2000] 1 FLR 701 which had in turn been questioned by R v K, we should re-examine the approach.  With respect, we do not think there is anything said in R v K which calls into question the cogency of the reasoning in NDT.

133.In the present case, the Wife is applying for the release from the implied undertaking so that she could provide information to the Director in respect of the allegations of perjury, forgery and conspiracy to pervert the course of justice in the course of the matrimonial proceedings. If those complaints were found to be valid, she is as much as a victim of such criminal conduct as the court.  Mr Howard made a forceful submission that it is her fundamental right to seek redress from the prosecutorial authority under the criminal law and the court should allow her to do so.

134.Mr Pointer and Mr Thomas submitted that the Wife is not prevented from making any report to the police regarding these allegations. But, according to them, one must not conflate that with releasing her from implied undertakings.  In other words, she could make a report without furnishing any of the documents which are subject to the implied undertaking to the police.

135.With respect, we are not impressed by this submission. The implied undertaking applies not merely to the documents discovered but also to information derived from those documents whether it be embodied in a copy or stored in the mind, see Crest Homes plc v Marks [1987] 1 AC 829 at p.854 where Lord Oliver approved this observation by Scott J in Sybron Corporation v Barclays Bank [1985] Ch 299. Thus, it is impossible for the Wife to make a report to the police without any breach of the implied undertaking.  Further, in the absence of any documents in support, given the nature of the complaints, it is difficult to see how she could seek effective redress.  

136.As we have said above, based on the materials before us, though we have to set aside the findings of Saunders J, simply on the basis of documents quoted in his main judgment, we would not regard the complaints as frivolous and vexatious.

137.In terms of the counterveiling interests of the Husband and STL, as in their appeal against the order granting access to the Director, they relied principally on their rights under PSI and LPP.  For the reasons given above, we do not see any merits in their case on PSI.

138.In respect of LPP, the Wife is in a stronger position than the Director.  The Wife was a party to the rulings of Saunders J on the Cox and Railton exception. She is entitled to the benefit of the doctrine of issue estoppel on this issue in the contest between her and the Husband and STL. She had actually made an identical application for the release from her implied undertaking in the matrimonial proceedings, see para 5 of the Reasons for Decision handed down by Saunders J on 6 July 2012.  Had her application been considered in the context of the matrimonial proceedings, the principle of res judicata would prevent the Husband and STL from re-litigating the Cox and Railton exception against the Wife.  We see no reason why the outcome should be different simply because her application was considered, perhaps fortuitously, in the context of an originating summons taken out by the Director as opposed to the matrimonial proceedings.

139.We are of the view, vis-à-vis the Wife, the Husband and STL are bound by the rulings of Saunders J and they could no longer assert any LPP against her in respect of documents disclosed pursuant to the order of Saunders J.

140.As regards other counterveiling factors, notwithstanding Mr Pointer’s submission based on the outcome in the matrimonial proceedings and his miscellaneous points discussed above in the context of the Director’s application, we do not find them to be matters of any great weight in terms of potential injustice to the Husband and STL.

141.Apart from the Wife’s interest in seeking redress for perjury, conspiracy to pervert the course of justice and forgery, another relevant consideration is the public interest in upholding the integrity of the administration of justice.  These allegations of criminal conduct are serious. Activities of this nature are inimical to the fair and proper adjudication of dispute by the courts.  Public confidence in our civil justice system will be diminished if the Wife’s effective report to the police is hampered by an unduly restrictive approach of the court in releasing her from the implied undertakings.  This is a factor of great weight in this balancing exercise.

142.At the same time, we do not see the release of the Wife from her implied undertaking doing much harm to the legitimate protection to litigants who give full and frank discovery in legal proceedings.  There is no nexus between the duty to give full and frank discovery and the commission of perjury and using forged documents for the purpose of legal proceedings.

143.Nor do we see any injustice to the Husband and STL in view of our conclusions on PSI and LPP.  They already had the full opportunity to contest LPP vis-à-vis the Wife before Saunders J.  They also had full opportunity to canvass their arguments on PSI before the Judge and us. Further, if the prosecution chooses to use any documents as evidence, they can still contest the admissibility of the documents in the criminal trial (if any).

144.Mr Thomas also relied on Citic Pacific Ltd v Secretary for Justice [2012] 2 HKLR 701, in particular paras 42 to 51.  We do not think that authority assists the Husband and STL in opposing the Wife’s application.  That case is primarily concerned with the issue of partial waiver. As explained above, the present case is not about waiver at all.  If the Wife is released from the implied undertaking, her disclosure of the documents to the police would not be inadvertent or surreptitious.

145.Further, once the documents are in the hands of the police, it is permissible for them to make derivative use of the same irrespective of the admissibility of the same at the criminal trial.  There is nothing in Citic Pacific which suggests otherwise.  In any event, we are bound by Lee Ming Tee; A v ICAC; and Kennedy v Cheng Kelly (2009) 12 HKCFAR 601 para 37 in this respect.

146.In our judgment, the balance is overwhelmingly in favour of modifying the implied undertaking in the manner ordered by the Judge.  We shall dismiss the appeal in this respect.

Disposition

147.There shall be an order in terms of para 121 in respect of the appeal against para 1 of the order of the Judge and the appeal against para 2 of that order is dismissed.

148.We make a costs order nisi that the Husband and STL shall bear the costs of the Wife in this appeal.  As between the Husband and STL on the one part and the Director on the other, we order the Husband and STL to pay 60% of the costs of the Director.  The costs are to be taxed if not agreed.

149.Mr Thomas asked for an interim stay to allow his client to consider appealing against our decision.  We do not see the need to stay our order in respect of the appeal against para 1 as we have already built into our directions a period of  21 days before the Director could have access to any documents in court.  As regards our dismissal of the appeal against para 2 of the order of the Judge, we would grant an interim stay of 21 days in respect of the execution of that para 2. 

Mr Keith Yeung, SC (DPP) and Mr Derek Wong (SPP), instructed by Department of Justice, for the Plaintiff

Mr Charles Howard, QC, and Ms Lorinda Lau, instructed by Florence Tsang & Co, for the 1^st Defendant

Mr Martin Pointer, QC, Mr Russell Coleman, SC, Mr Graham Harris, SC, and Mr Jeremy S K Chan, instructed by Stevenson, Wong & Co, for the 2^nd Defendant

Mr Michael Thomas, SC, Mr Richard Todd, QC, Mr Norman Nip, and Mr Derek Chan, instructed by Stephenson Harwood, for the 3^rd and 4^th Defendants

(1) Please refer to FAMV9/2014, FAMV10/2014, FAMV11/2014 and FAMV12/2014 for the relevant appeal(s) to the Court of Final Appeal. (2) Please refer to FACV5/2014 and FACV6/2014 for the relevant appeal(s) to the Court of Final Appeal.