Keen Lloyd Holdings Ltd and Others v. Commissioner of Customs and Excise and Another
Read the full judgment text of HCAL 113/2012 on BabelCite. This High Court CFI judgment was delivered on 23 December 2014.
1. In June 2011 the Hong Kong Customs and Excise Department (“C&E”) and its PRC counterpart in the Pearl River Delta, the Huangpu Customs of the PRC embarked on a joint investigation of the cross‑border smuggling of goods from Hong Kong to the Mainland via the Pearl River. As other Customs units of the Mainland may have been involved I shall refer to them collectively as (“the Mainland Customs”). As part of their investigation, officers of the C&E obtained sixteen search warrants against fourt
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HCAL 113/2012 and IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 113 OF 2012 ____________
IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE CONSTITUTIONAL AND ADMINISTRATIVE LAW LIST NO 82 OF 2013
____________ (Consolidated by order of the
_______________ J U D G M E N T _______________ Introduction 1.In June 2011 the Hong Kong Customs and Excise Department (“C&E”) and its PRC counterpart in the Pearl River Delta, the Huangpu Customs of the PRC embarked on a joint investigation of the cross‑border smuggling of goods from Hong Kong to the Mainland via the Pearl River. As other Customs units of the Mainland may have been involved I shall refer to them collectively as (“the Mainland Customs”). As part of their investigation, officers of the C&E obtained sixteen search warrants against fourteen premises. The warrants were all obtained under provisions of either the Import and Export Ordinance, Cap 60 (“IEO”) or the Organized and Serious Crimes Ordinance, Cap 455 (“OSCO”). These two Ordinances were involved because the smuggling activities were suspected to involve breaches of their provisions; namely the offence of exporting unmanifested cargo in the former Ordinance and the offence of dealing in the proceeds of an indictable offence (ie money laundering) in the latter Ordinance. 2.In the covert stage of this investigation the C&E applied for and obtained thirteen search warrants against thirteen different premises which they intended to execute once their investigation was ready to be turned overt. Six warrants were obtained on 3 September 2011, five warrants were obtained on 6 September 2011 and two were obtained on 2 November 2011. 3.On 12 January 2012 the operation was turned overt and a number of people were arrested and the search warrants executed and seizures affected. Thus, by the time the warrants were executed they had been outstanding for periods of 4 and 2 months from the date they had been issued by the magistrate or District Court judge. This is one of the grounds on which the applicants attack the warrants. 4.On 18 January 2012 two further search warrants were applied for and obtained and they were executed the following day. The last search warrant was obtained on 30 January 2012 and was executed the next day. 5.Throughout the overt stage of the investigation officers from C&E and Mainland Customs liaised with one another including travelling to each other’s jurisdictions. Both investigations were turned overt simultaneously and both involved the searches of premises and the seizure of materials from them. 6.The applicants subsequently became aware that C&E had allowed their Mainland counterparts to have access to the materials seized under the search warrants and possession of copies of some of them. This knowledge led to these judicial review applications. 7.On 24 August 2012 the applicants filed their application for leave for judicial review in HCAL 113 of 2012 and leave was granted by me on 31 August 2012. This application seeks to review the decision of the Commissioner of the C&E (“the Commissioner”) to provide to the Mainland Customs copies of documents that were seized after entry into and search of premises that was authorized by the search warrants. 8.On 6 May 2013 an application for leave to apply for judicial review in HCAL 82/3013 was filed and on 22 May 2013 I granted leave to the applicants to proceed with this judicial review and at the same time I ordered that the two applications for judicial review be consolidated. HCAL 82/2013 seeks to review two decisions. The first is the decision to obtain sixteen search warrants against fourteen premises which decision is being impugned because it is said to have been made mainly or substantially for the improper purpose of providing law enforcement agencies in the PRC with copies of seizures obtained under the warrants so as to assist them in carrying forward their investigation. Thus, the decision being judicially reviewed is the decision to apply for the warrants. The second decision is the decision to execute thirteen of the sixteen warrants at a time when several months had elapsed from the date that they were obtained. 9.The applications for judicial review called for a resolution of a number of factual and legal issues. The factual issues concerned the reasons why the Commissioner, through his officers, made the decisions that are being judicially reviewed. The legal issues concern the construction of the statutory regimes pursuant to which the warrants were issued, the effect of non-compliance with those regimes and the effect of the delay in execution of certain of the warrants on their validity. 10.Evidence was taken on the hearing of the applications on 26‑29 August 2013. 11.When the matter was resumed for final submissions on 12 September 2013, the Court raised certain legal issues with the applicants which caused them to seek an adjournment in order to consider their position. Ultimately, the applicants sought leave to amend their Form 86s in both applications and leave was granted, by consent, on 17 September 2013, for them to do so. The Form 86 in HCAL 82 of 2013 was amended to judicially review the decisions of the Commissioner to apply for, the decision of a magistrate to issue and the decision of the Commissioner to execute three search warrants under the IEO in respect of commercial premises. The attack upon these decisions is based upon a construction of the IEO regime that it does not authorize the issue by a court of a search warrant against commercial premises. Furthermore, the warrants that were issued appear, on their face, to have been issued under section 21 of the IEO which is the section empowering C&E officers to enter and search non-residential premises and not section 22 which is the section empowering a court to issue an enter and search warrant in respect of domestic premises. HCAL 113 of 2012 was amended to include reference to these three allegedly invalid warrants. 12.In the applicants’ Supplemental Closing Submissions dated 29 November 2013 an attack was also mounted, for the first time, on the constitutionality of the section 21 IEO search power. This necessitated a further amendment to the Form 86 in HCAL 82/2013 and the final Re‑Amended Form 86 was filed on 23 January 2014. 13.It may be easier to understand this judgment if I set out the effect of this history in table form.
14.Final submissions were, unfortunately, further delayed because of difficulties with counsels’ diaries but were concluded on 23 January 2014. 15.At the conclusion of the hearing I reserved my judgment which I said I would hand down at a later date. This I now do. The Applicants and the Search Warrants 16.The applicants’ positions vis-à-vis each other and the search warrants can be summarised as follows:
17.The details of the search warrants, using the numbering as set out in the two form 86s, are as follows:
The Search Warrant Powers 18.As I have mentioned the authority to issue these warrants derives from two Ordinances, the IEO and the OSCO. A number of features need to be highlighted in respect of these search warrant powers in order to address the legal issues that have arisen on this judicial review. The IEO 19.The IEO distinguishes between, domestic and non-domestic premises. “Domestic premises” is defined in section 2 of the Ordinance to mean:
20.Section 20(1)(a) of the IEO confers on C&E officers a rather narrow and somewhat specialized search warrant power. It is a power to enter and search at any reasonable time any premises (other than domestic premises) but this power may only be exercised in respect of premises registered under the IEO and may only be exercised for the purposes of the IEO. This is a free-standing statutory power which does not depend on judicial authority for its exercise. It has a limited form of seizure power in respect of certain materials that the C&E officers are entitled to examine or require to be produced. Other than being one of the powers given to C&E officers by the IEO to help in the enforcement of its provisions, this particular power has no relevance in these proceedings. 21.However, the IEO contains another search power and this is in section 21(1). It is said to be subject to section 22 but otherwise it is a broad entry and search power with an accompanying seizure power contained in section 21(2). Like section 20(1)(a) it is a free-standing statutory entry and search power which does not depend on any judicial authority for its exercise. It empowers the entry and search of any “premises or place” but, as I have said, it is drafted as being subject to section 22. 22.Section 22 is a judicially authorized search warrant power and subsection (1) states:
Subsection (2) provides:
Because section 21(1) is said to be subject to section 22, the C&E will have to seek a judicially issued warrant under section 22(2) whenever the premises to be entered and searched fall within the definition of “domestic premises”. Thus the effect of section 21(1) being made subject to section 22 is to confine the exercise of the power in section 21(1) to premises other than domestic premises as that term is defined in section 2. For ease of description I shall refer to the premises to which section 21(1) applies as non-domestic premises. 23.Section 22 does not, itself, provide a seizure power but there is a seizure power contained in section 21(2)(a)[1] which states as follows:
24.Leaving aside the section 20(1)(a) power, the effect of sections 21(1) and 22(2) of the IEO is to create a two pronged search power regime according to the nature of the premises to be searched. For non-domestic premises C&E officers are granted a free‑standing statutory entry and search power that they can access without judicial authority and in respect of domestic premises they have a separate judicially authorized entry and search warrant power. Thus, for non-domestic premises they do not have to apply to a magistrate for a warrant and a magistrate would not have power under section 22(2) to issue a warrant in respect of such premises. The OSCO 25.The search warrant power in OSCO is contained in section 5. Under section 5(1) an authorized officer, which is defined to include C&E officers, may apply to the Court of First Instance or the District Court for a warrant under section 5. Section 5(2) empowers these courts on such an application to “issue a warrant authorizing an authorized officer to enter and search the premises …”. Thus, the warrant that is issued by the Court is only an entry and search warrant. 26.However, section 5(5) provides:
This subsection is the source of the seizure power. Clearly, it is a free-standing statutory power and it is not a power which the Court issuing the warrant grants. The Search Warrants 27.As mentioned, the search warrants all purport to be issued under the IEO and section 5 of OSCO. The OSCO warrants were all issued by a District Court judge whilst the IEO warrants were all issued by a magistrate at Kwun Tong Magistracy. The IEO Warrants 28.Three of the IEO warrants related to non-domestic premises yet were purportedly issued under section 22(2). They were clearly issued without authority and the respondents accept this to be so. Consequently, these warrants, which are numbered 3, 4 and 9, must, therefore, be quashed. 29.Regrettably, there was an unfortunate lapse by all concerned when it came to applying for, issuing and executing these warrants. But, there is no evidence before me to indicate this was a lapse in integrity by any of the decision makers or that there was any impropriety by any of them in their decision making process. The only inference I can draw is that in this process, there was simply not enough attention given to, and consequently there was not enough understanding of, the provisions of the legislative regime by those involved with these three warrants. That this is the inference to be drawn is, I believe, also supported by the presence of other anomalies in the warrants which I discuss below. 30.The IEO warrants contained, at the top left hand side of the face of the warrant, a reference to section 21 of the Ordinance conveying the impression that the warrant was issued under the authority of that provision. However, the incorrect reference to section 21 does not, in my view, affect the validity of these warrants. The warrants are otherwise in compliance with section 22 and are properly issued in accordance with the power contained in that section. 31.The body of the warrant recites that an information has been laid before the magistrate that there are:
The italicised words represent a summary of the seizure and some of the other powers contained in section 21(2) of the IEO. 32.The location within the IEO warrants of the reference to the power of seizure tends to give the impression that the power is being granted by the warrant under the authority of the issuing magistrate. Clearly that is not so as the power derives from section 21(2). I presume that the reference to the power is for the purpose of informing those affected by the warrant of the existence of the power so that when the warrant is executed against their premises they will not be surprised that items within the premises are seized notwithstanding the lack of any grant of authority within the warrant to do so. If this be so then, in my view, in order not to mislead any person to whom the warrant is shown, the appropriate place for such information is below the signature of the magistrate either as a separate paragraph or as a notation to the warrant. The wording should also include mention that the power derives from section 21(2). The OSCO warrants 33.The section 5(2) OSCO warrants are all similarly drafted and purport to empower all members of the C&E Service to enter the specified premises “at any time and there to search for and seize and retain any material, other than items subject to legal privilege, with respect to which an offence has been committed or is about to be committed against the provisions of s. 25(1) of the Ordinance …” 34.I do not think anything turns on the presence within the warrant of words purporting to grant a seizure power by the issuing District Judge to those executing the warrant. A similar position arose in respect of warrants issued under the Prevention of Bribery Ordinance, Cap 201 in Apple Daily Ltd v Commissioner of the ICAC (No. 2) [2000] 1 HKLRD 647. 35.In that case the legislation was similar in that the search warrant power was an entry and search power only, pursuant to a warrant issued by a magistrate, with a separate free-standing statutory power of seizure. The Court of Appeal rejected the argument that the purported authority to seize that was contained in the warrant vitiated it. It held that if the warrant is otherwise compliant with the statutory provision under which it was issued and no prejudice is caused by the purported authorization as the officers are, in any event, empowered by statute to effect the seizures, then the warrant is valid. 36.Applying this reasoning to the OSCO warrants I am of the view that the existence of words within the warrants purporting to grant a power of seizure should be treated as mere surplusage not affecting the validity of the warrants. The Late Execution of the Warrants 37.The applicants contend that the search warrants must have a limited life to them at the end of which they cease to have any legal validity and can no longer authorize the entry upon and search of the premises for which they were issued. This argument applies to all warrants other than those numbered 6, 7 and 15. It would have applied also to warrants 3, 4 and 9 had they been validly issued. 38.There is no doubt that once executed a search warrant is spent. There is also no doubt that neither the OSCO nor the IEO (nor as far as I am aware other Hong Kong Ordinances creating search warrant powers) impose a time limit for the execution of warrants issued under their respective provisions. It is clear from the Court of Appeal’s decision in Philip K H Wong, Kennedy Y H Wong & Co v Commissioner of ICAC (No. 2) [2009] 5 HKLRD 379 at pages 397-399, that judicial officers issuing search warrants can impose conditions upon the execution of the warrant. I do not see any reason in principle why one such condition could not be that the warrant be executed within a specified time. However, be that as it may, that was not done in respect of any of the warrants with which I am concerned. 39.The argument of the applicants is a simple one. A search warrant is sought in order to enable a law enforcement agency to preserve and acquire evidence before it is destroyed. There is, necessarily, a degree of urgency associated with its execution. Furthermore, it cannot be issued unless the judicial officer is satisfied that the statutory pre-conditions to the issue of the warrant have been met. One of these conditions is always that the judicial officer harbour a certain state of mind (usually either suspicion or belief or being satisfied of the existence of reasonable grounds that give rise to a suspicion or belief) that an offence has been committed and that evidence of this offence might be found in the premises to be searched. 40.Enabling the judicial officer to harbour this state of mind requires the law enforcement officer to place before the judicial officer information relating to his investigation. Search warrants are thus issued on the basis of a judicial officer’s state of mind that there are grounds for believing or suspecting that evidence of a specified crime can be found in the premises for which the warrant is sought as at the point in time at which the warrant is sought. His state of mind is, in turn, based upon the knowledge that the law enforcement officer has of the criminal activity at that same point in time. 41.But, in a continuing criminal investigation the state of the investigating officer’s knowledge of the criminal activity and the likely existence and location of evidence to prove it are constantly changing. The longer the delay in executing the warrant the more likely it is that the state of knowledge of the investigating officer will have changed and, therefore, the more likely that the information placed before the judicial officer will be different. This requires, so the applicants argue, that the common law imply a time limit on the execution of the warrant requiring that it be executed within a reasonable time. 42.In support of its argument the applicants rely upon the decision of Higgins J of the Supreme Court of the Australian Capital Territory in Applebee (1995) 79 A Crim R 554. In that case officers of the Australian Federal Police to whom a search warrant had been issued, delayed in executing the warrant because they wanted to keep the premises in respect of which the warrant had been issued under surveillance. A period of 4 weeks elapsed between issue and execution of the warrant. Higgins J specifically found that notwithstanding this lapse of time the police officers still had, as at the date of execution of the warrant, a genuine suspicion that the stolen property for which the search warrant was issued was still in the premises to be searched. 43.Higgins J started his analysis from the proposition that as a search warrant authorizes what otherwise would be a trespassory entry, “the warrant must clearly define the scope of the authority it confers and must not be exceeded”.[2] He continued at pages 557-558 and said:
44.The respondents agree that the circumstances on which a warrant was issued may well change but not necessarily in a way which would negate the decision of the judicial officer. Further information may strengthen, not weaken, the justification for issuing the warrant. The mere lapse of time, the respondents argue, does not undermine the original justification by the judicial officer for the grant of the warrant. 45.Reliance was also placed on the decision of the English Court Appeal of The Queen (oao) Pearce & Anor v Commissioner of Police of the Metropolis [2013] EWCA Civ 866 for the proposition that when a search warrant is executed is an operational decision for the executing law enforcement agency. I regard this as uncontroversial but as not conflicting with the principle that a search warrant has only a limited life. For, whatever that limited life may be, whether days or weeks, the decision of when within that period the search warrant should be executed will always be an operational decision for the investigating law enforcement agency. 46.The respondents also argue that in the absence of the legislature specifying a particular validity period for warrants it is inappropriate for a court to arbitrarily set a period. A “reasonable period” is too vague and the correct approach, the respondents say, is to recognize that a search warrant’s life is indefinite [4] and only comes to an end when either it is executed or the circumstances relevant to its issue have changed in a way which could affect the state of mind required to be harboured by the judicial officer issuing the warrant. Whether the circumstances have so changed is, the respondents argue, a matter for the investigating officer to determine. 47.Here, there was no such change and for proof of this the respondents rely on the affirmation of Senior Investigator Lui Siu Fai. In his affirmation Senior Investigator Lui said that in respect of the search warrants obtained in September and November 2011 he, as the officer-in-charge:
48.However, if, as a matter of legal principle, a search warrant only has a limited life then the fact that there has been no material change in circumstances will not save it from lapsing by effluxion of time. 49.The reason why the warrants were sought so long before their execution was explained by Assistant Superintendent Lai Chi Wing Barry. In an affirmation he explained the thinking at the time application was made for the warrants:
50.In cross-examination Assistant Superintendent Lai confirmed that the delay was because their Mainland counterparts were not yet ready to turn the investigation overt. 51.I can well understand how obtaining the warrants at an early date and then just sitting on them till both sides were ready so that their actions could be synchronized, would be regarded as a practical and convenient method of dealing with this element of the operation. But it is an approach to obtaining search warrants which is quite inconsistent with the fundamental principle underlying the grant of such warrants, namely that at the time of application evidence is placed before the judicial officer that will enable him to be satisfied of the preconditions to the issue of the warrants. The right of entry and search is only granted on the basis of the judicial officer harbouring the state of mind required by the statute based upon the evidence placed before him at the time of application. 52.The passage from Senior Investigator Lui’s affirmation emphasizes that underlying the respondents’ argument is the substitution of the judgment of the law enforcement officer for the judgment of the judicial officer on the key issue of whether the statutory pre-conditions to the grant of a warrant are satisfied. This, in my view, must be avoided if the rights of the citizen are to be properly protected. Lord Hoffmann in Attorney General of Jamaica v Williams [1998] AC 351 sounded a warning of the risks of allowing law enforcement to decide for themselves whether the statutory pre-conditions are met when, he said at page 358G:
53.The time may well come when the legislature attaches time limits to the life of warrants issued under statutory provisions which it enacts but until that happens the courts can do no more than respect the intention of the legislature that courts act as guardians of the citizens’ rights and that intrusions into those rights should only be allowed when courts are satisfied that there is justification for so doing. 54.The important role of the courts in standing between the citizen and the state was emphasized by Chan CJHC (as he then was) in Apple Daily Ltd v Commissioner of the ICAC [2000] 1 HKLRD 595 when he said at page 600 A-B:
55.The need for there to be a judicial gatekeeper to grant access to law enforcement to powers which intrude on the rights of the citizen was echoed by Li CJ in P v Commissioner of ICAC (2007) 10 HKCFAR 293. In this case the Court of Final Appeal was concerned with the special power of investigation granted to the Independent Commission Against Corruption by section 14(1)(d) of the Prevention of Bribery Ordinance, Cap 201. This power, which enables the ICAC to compel persons to provide information, is only exercisable after judicial authorization has been obtained. At pages 300J-301B Li CJ said of this judicial safeguard:
56.In Apple Daily Limited v Commissioner of ICAC (No. 2) [2000] 1 HKLRD 647 at 673I-674E, Chan CJHC provided a summary of what he called “the guiding principles which the court should bear in mind when examining a warrant which is being challenged.” The third of his four guiding principles he expressed as :
57.Construing the section 22(1) search warrant provision as allowing search warrants to have an infinite life and as reposing with the law enforcement officer the power to determine when that life comes to an end contradicts the role that the legislature has determined the courts should play in the protection of the rights affected by this type of law enforcement power. Consequently, in my view, where an ordinance is silent on the life of the warrant then, as a matter of statutory construction, it should be assumed, absent any clear legislative intention to the contrary, that the legislature intended the warrant to have a finite, rather than infinite, life. Such an approach to the construction of an ordinance containing a search warrant power is consistent with Chan CJHC’s third guiding principle. 58.The desirable course is for issuing judicial officers to impose as a condition on the warrant a time limit for its execution. But where that has not been done and where an ordinance containing a search warrant power is silent on the duration of the life of the warrant and there is nothing in the ordinance to clearly indicate that the warrant was intended to have an infinite life, then the court will construe the warrant as having only a finite life. To give effect to such a construction, the courts will imply a condition that the warrant must be executed within a reasonable time. 59.What is reasonable will inevitably be a fact specific question and no absolute figure can be laid down without descending into arbitrariness. In some cases it may be hours rather than days, in other cases it will be days rather than weeks and yet others, weeks rather than months. In most cases it will be days to weeks, perhaps up to 2 weeks. However, the longer the period between issue and execution of the warrant the more exceptional the circumstances will have to be for such a period to be regarded as a reasonable period. 60.Here, the bulk of the search warrants were executed 2 or 4 months after they were obtained. These periods are well beyond what I would regard as reasonable in respect of an investigation into on-going smuggling activities when the landscape of the criminal activity must be fluid and changing from one day to the next. In my view all these warrants ceased to have any validity by the date of their execution. The only valid warrants as at the date of their execution were warrants numbered 6, 7 and 15. The effect of my so deciding is that unless the entry into the premises was lawful by some other power then the seizures effected by these warrants were all unlawful and must be returned to the owners. The Legality of the Warrants and the Seizures 61.After my examination of the statutory regime I have concluded that all those warrants validly issued by judicial officers that were executed beyond a reasonable time had lapsed and did not therefore provide the C&E officers purporting to execute them with lawful authority to enter and search the premises the subject of those warrants. As I have said above, this means that only the warrants numbered 6, 7 and 15 were validly executed. These are all OSCO warrants. 62.There are three warrants, those numbered 3, 4 and 9, that were issued unlawfully by the magistrate purporting to exercise the power granted by section 22(2) of the IEO. As I have said, it is accepted by the respondents that these warrants were issued without authority and must be quashed. 63.But, in my view, that does not render the entry by the C&E officers into these premises a trespass as they had statutory authority to effect such an entry and conduct a search of the premises under section 21(1). The only issue that then arises is whether, once having lawfully entered, they were entitled to effect any seizures. In my view the powers that are contained in section 21(2) apply to officers in both situations of having entered lawfully upon premises, whether by the warrantless statutory power under section 21(1) or under the authority of a warrant issued by a magistrate under section 22(2). When a statute, as here, creates a number of different powers of entry and search without an accompanying seizure power and then separately from these entry and search powers creates an independent free-standing seizure power it must have been intended by the legislature, in the absence of any indication to the contrary, that the free-standing seizure power could be exercised by officers when entering and searching premises under authority of any of the separate entry and search powers. 64.However, there is one further argument which must be addressed before any final conclusion is reached on the legality of the seizures effected under the section 21(2) IEO power from the premises particularized in warrants 3, 4 and 9. This is the argument that the entry and search power contained in section 21(1) is unconstitutional. If that argument prevails then it means that the seizures were effected in the course of an unlawful entry and search. The Constitutionality of Section 21 of the IEO 65.The legal issue raised by the applicants under this head is whether the wide way in which section 21 of the IEO is drafted renders it unconstitutional. If it does then the entries and searches purportedly made under the invalidly issued IEO warrants that are numbers 3, 4 and 9, and which now depend upon section 21(1) for their legitimacy, would be unlawful. 66.The applicants argue that section 21(1) is a provision which restricts the rights contained in Article 29 of the Basic Law and Article 14 of the Hong Kong Bill of Rights (HKBOR). As such, in order to be Basic Law and HKBOR compliant, it must satisfy the proportionality requirement. In a nutshell the applicants maintain that the section is not proportionate because it is a power which can be exercised without any pre-authorization and secondly even if non pre-authorization is permissible, it is limited, or should be limited, to those situations where operational exigencies militate against any delay and require the law enforcement agency to act immediately in order to preserve and acquire evidence. 67.Article 29 of the Basic Law provides as follows:
Article 14 of the HKBOR states, so far as is relevant:
68.The concept of privacy as contained in Article 17 of the International Covenant on Civil and Political Rights (ICCPR), which is identical to Article 14 of the HKBOR, was discussed by Ma CJHC, as he then was, in HKSAR v Chan Kau Tai [2006] 1 HKLRD 400. At page 437 F-I he said:
69.He later concluded that there is “no reason why a person should not be entitled to privacy in his office or workplace” and that “the right to privacy (and a reasonable expectation of privacy) can exist as far as a person’s office or workplace is concerned”.[5] 70.The theme that privacy involves freedom and what rights were encapsulated in this freedom was the focus of a definition provided by a Canadian judge, White Prov. J of the Saskatchewan Provincial Court in R v Symbalisty (2004) 119 CRR (2d) 311. At page 319, paragraph 30, he said:
71.There cannot be any doubt that the right of privacy includes a right to be free from unlawful searches of one’s home or office. This is a conclusion that Jerome Chan J had reached as long ago as 1994 in his judgment in R v Yu Yem Kin (1994) 4 HKPLR 74 where, at page 92, he said of Article 14 that it “confers on an individual the right to be free from arbitrary or unlawful interference in the form of search or seizure”. 72.Relying on these articles the applicants argue that there is a right to be free from unlawful search of both domestic and non-domestic premises by agents of the state and for any such search to be lawful the authorizing legislation must comply with these articles. This is not a controversial proposition and I do not understand the respondents to disagree with it. Although Article 14(1) of the HKBOR specifically mentions “privacy” whilst Article 29 of the Basic Law does not, I do not see, for present purposes, that Article 14 adds anything to Article 29. 73.The key words in both articles are “arbitrary and unlawful” and they are used to describe what it is that renders the interference with privacy through a search of premises a breach of the article. The search warrant power being enacted legislation is lawful but that does not necessarily mean that it is not arbitrary. If it falls foul of the arbitrariness principle, the fact that it is enacted legislation will not save it from being unconstitutional. 74.So what does arbitrariness add to what is required of the restriction? There is no definition of arbitrariness which applies to every restriction of a constitutional right or freedom. In Lau Cheong & Anor v HKSAR (2002) 5 HKCFAR 415, the Court of Final Appeal at page 435 F-G quoted without dissent the statement of the United Nations Human Rights Committee which said:
75.The meaning which the Court of Final Appeal adopted for determining the constitutionality of the criminal liability for murder of a person who intends to inflict upon his victim only grievous bodily harm was a formulation that it borrowed from a New Zealand Court of Appeal decision dealing with arrest and detention. This formulation was as follows:
76.However when discussing the arbitrariness of a mandatory sentence of life imprisonment for those convicted pursuant to the grievous bodily harm rule, the court introduced the concept of proportionality, saying at page 450F and E-J:
77.Whether proportionality, in the sense described above, is added to the test of arbitrariness for the purpose of determining whether section 21(1) of the IEO is arbitrary does not appear to me to matter for the section in my view is clearly not arbitrary. I say this because the section is part of a regime which does require the use of a magistrate’s warrant to search domestic premises and so consciously limits the use of the warrantless power to non-domestic premises. Secondly it employs a test for the trigger of the exercise of the power which is all but identical to the test laid down for the issue by the magistrate of a warrant under section 22(2). Both have objective elements and both are set at the level of suspicion. The section 21(1) power requires the C&E officer “reasonably suspects” whilst the section 22(2) power requires the magistrate to be satisfied “that there is reasonable ground for suspecting”.[7] 78.I do not see how such a provision can be described as capricious, unreasoned, without reasonable cause or so disproportionate as to reduce the law to something that brings it within this description. I conclude that section 21(1) is not “unlawful or arbitrary”. 79.But there is no doubt that section 21(1) is a restriction on the rights contained in Article 29 of the Basic Law and Article 14 of the HKBOR. As such if falls to be determined whether it complies with the constitutional requirements that any such restriction must meet. 80.The first, under Article 39(2) of the Basic Law, is that the restriction is prescribed by law. This requires that it satisfy the legality or legal certainty requirement. The applicants do not suggest that section 21(1) does not satisfy this requirement. 81.However, apart from satisfying the requirement of legal certainty, any restriction on a constitutional right must be shown to be necessary. In HKSAR v Lam Kwong Wai & Anor (2006) 9 HKCFAR 574, Sir Anthony Mason NJP noted that ever since R v Sin Yau Ming [1992] 1 HKCLR 127 a justification provision had been implied in the HKBOR and said that the same approach applies to the Basic Law. In this way an encroachment upon, a restriction of or a derogation from a right may be constitutional as long as it can be justified. It will be justified, he said “if it has a rational connection with the pursuit of a legitimate aim and if it is no more than necessary for the achievement of that legitimate aim”.[8] This justification has become commonly known as the requirement of necessity and as involving the application of a proportionality test. The proportionality test requires the court to identify the legislative objective which the restriction is designed to accomplish and then to address the questions of whether:
82.The applicants do not argue that the section 21(1) power is not rationally connected to the legislative objective of enforcing the provisions of the IEO and effectively investigating breaches of those provisions. The applicants assert, however, that the second requirement, the proportionality requirement, is not satisfied. They argue that given the importance of the right of privacy to home and business premises, for any power of search of these premises to be proportionate “an objective standard must be established by an impartial adjudicator and subject to objective criteria for granting pre-authorization in order to provide a consistent, clear and identifiable standard for identifying the point at which the interests of the state prevail over the interests of the individual.” This would effectively mean that no warrantless or non pre-authorized power would ever be proportionate and so, lest this is pitching their argument too high, the applicants alternatively argue that a warrantless or non pre-authorized power must be confined to only those situations where the circumstances make it impracticable to obtain a warrant or pre-authorization. 83.In support of their argument that a warrantless search is, per se, unconstitutional the applicants rely on Canadian jurisprudence. But this jurisprudence also does not go as far as the applicants maintain. The case on which the applicants rely is Hunter et al v Southam Inc. (1984) 11 DLR 641. At page 653, Dickson J, in giving the judgment of the Supreme Court of Canada, discussed the purpose of section 8 of the Canadian Charter of Rights and Freedoms and said:
84.However, he went on to say, in the very next paragraph:
85.Dickson J went on to say that the pre-authorization provides “an opportunity, before the event, for the conflicting interests of the State and the individual to be assessed, so that the individual’s right to privacy will be breached only where the appropriate standard has been met, and the interests of the State are thus demonstrably superior”[10]. For this to be meaningful, Dickson J said that the person authorizing the search must “be able to assess the evidence as to whether that standard has been met, in an entirely neutral and impartial manner”. Whilst this did not require that the person performing the pre-authorization function be a judge he “must at a minimum be capable of acting judicially”. 86.These requirements that the Supreme Court said entry and search powers should meet in order to be constitutional can be summarised as that there be:
87.All of these elements can normally be found in Hong Kong’s statutory search warrant powers. Where there is pre-authorization it will be by a judicial officer, usually a magistrate, but in some cases a District Judge or even a Court of First Instance Judge of the High Court. In this way elements (1)-(3) are satisfied. The evidential trigger usually contains an objective element in respect of the assessment of whether the evidential standard has been met and the evidential standard is normally set at the level of either suspicion or belief. 88.The applicants also rely on the Symbalisty judgment of White Prov. J who summarized the requirements laid down in Hunter, describing them as criteria which “must be met for a legally valid search ie a ‘reasonable search’ … A search conducted by police authorities without a warrant is presumptively unreasonable.” (Emphasis added) 89.I do not believe that this is the law of Hong Kong. Clearly the presence of all these requirements in a statutory search power will assist in ensuring the power is constitutional but it does not follow that the absence of one or more of them renders the power prima facie unconstitutional. Rather, I would express the position as being that the absence of one or more of these requirements may make it more difficult to persuade a court that the statutory search power is rational and proportionate. But there is no presumption in favour of unconstitutionality merely because one of these requirements is absent. This is so, it seems to me, even if the absent requirements are the first three, namely pre-authorization by a person acting judicially who determines whether the statutory evidential standard has been met. 90.It follows from what I have said that, to the extent I have set out, I reject the Canadian jurisprudence as representing the law of Hong Kong. But even the Canadian jurisprudence goes only so far as making the statutory power presumptively unconstitutional. It does not ban absolutely all warrantless powers of search. The applicants have not been able to place before me any authority which supports the breadth of their first proposition. I, therefore, reject the first of the applicant’s propositions that any warrantless power is per se unconstitutional. 91.However, the applicants are on stronger ground in respect of their second proposition that even if a warrantless power of search is not per se unconstitutional, the power of search in section 21(1) does not satisfy the proportionality test because it is not confined to those situations when it is impracticable to apply to a judicial officer for a warrant. 92.In support of their argument that warrantless powers of search should be limited in their availability to those occasions when it is impracticable to obtain a warrant, the applicants rely on the judgment of Jerome Chan J in R v Yu Yem Kin (1994) 4 HKPLR 75. I note that in this case Jerome Chan J also rejected the first of the propositions on which the applicants rely; namely that warrantless powers of search are, per se, unconstitutional. In this case he was dealing with a warrantless power of search and seizure contained in section 52 of the Dangerous Drugs Ordinance, Cap 134 that was given to both police and C&E officers to investigate drug offences. He held that merely because it was warrantless did not make the power unconstitutional; what made it unconstitutional was that the warrantless power had not been shown to be justified in combating drug offences in all circumstances. At page 98 he said:
93.This decision was not appealed and in consequence of it section 52 was amended “to limit the power of entry and search without a warrant to the situations where it is not reasonably practicable to obtain one, in order to make the provision compatible with the Bill of Rights, and to provide a mechanism for the issuing of warrants”.[11] It is useful to compare the new section 52(1) with section 21(1) of the IEO. Section 52(1) is as follows:
94.Interestingly section 52 only requires a warrant for entry and search of “any place or premises” and warrantless search is allowed for any “ship, aircraft, vehicle or train”. This distinction would appear to reflect the reality that the mobility of ships, aircraft, vehicles or trains justifies the use of a warrantless entry and search power whereas in respect of premises there will be occasions where it is practicable to obtain a warrant from a magistrate. Like section 52, section 21 applies to “any premises or place, vessel, aircraft or vehicle” but, unlike section 52, makes no distinction between “premises or place” and “vessel, aircraft or vehicle” in terms of the practicability of obtaining a warrant. 95.In defence of the power, the respondents argue that in its drafting section 21(1) reflects a very clear goal of being proportionate. It contains an acceptable evidential standard that triggers its exercise and it is limited to non-domestic premises in respect of which it is said there is a lower expectation of privacy. This lower expectation of privacy, it is argued, is relevant to the proportionality test. Additionally, there exists civil law remedies for any wrongful exercise of the power. These legal matters must then be placed in the law enforcement context to which the IEO relates, namely the importation and exportation of goods into and out of Hong Kong. 96.If one compares a person’s dwelling with his workplace then it is true that there is not the same intrusion of his personal property rights and it was the intrusion with personal property rights that was originally the focus of the common law’s concern. But in modern times the intrusion of a person’s privacy has assumed increasing importance in the area of search warrant law and in the area of the intrusion of privacy there may be much less reason to distinguish between home and workplace. Nowadays the workplace may contain much personal property and personal information belonging to the worker who treats the space within which he or she performs the employer’s duties as his or her own private space, and so any intrusion into it will frequently be a significant intrusion into the privacy of the person occupying that workplace. It is not surprising that the law recognises that in respect of the workplace a worker has a reasonable expectation of privacy. 97.One of the cases on which the applicants rely is R v Rao 9 D.L.R. (4th) 542, a decision of the Ontario Court of Appeal. The decision is useful for its very detailed discussion of the common law of search and seizure and how it had developed in Commonwealth countries and the United States of America up till the date of the judgment, which was 1984. The particular search and seizure power coming under the scrutiny of the Ontario Court of Appeal was contained in section 10(1)(a) of the Narcotic Control Act which granted to police officers a warrantless power of entry and search of any place other than a dwelling-house and power to seize any narcotics found therein. 98.It was, therefore, a warrantless entry, search and seizure power whose reasonableness (that being the operative word under the Canadian Charter) was being justified by the fact that it distinguished between dwelling houses and other places. In giving the judgment of the court Martin JA discussed the development of search powers under the common law in England and some Commonwealth countries and compared the approaches of those jurisdictions with Canada in their various attempts at legislating in this area. He summarized the position as follows:
99.His analysis led him to conclude that “the legal systems derived from the common law generally require a warrant to enter and search private premises, as distinct from vehicles and vessels which may rapidly move away” [13] and that in England “statutory authority to enter and search private premises without a warrant appears, in the main, … to be confined to emergency situations where it is not practicable to obtain a warrant”.[14] 100.Bearing in mind the importance of the right to be protected [15] and the importance of the requirement of a warrant in providing “a safeguard against an intrusion at the discretion of a police officer” [16] he was of the view that even though there is no express constitutional warrant requirement under the Canadian Charter:
101.Drawing upon his historical analysis of the common law and comparative study of legislative enactments in other common law jurisdiction he expressed his conclusions at pages 567-568 of the judgment as follows:
102.Like Martin JA and the Ontario Court of Appeal I can see less justification in the present day to distinguish between domestic and non‑domestic premises. But, unlike the Canadian courts, I am not concerned with whether section 21(1) is a reasonable restriction but whether it is a proportionate one. I accept that for domestic premises the likelihood is that the intrusion of privacy is greater than it would be in the workplace but the issue is not whether a greater weight or value should be placed on the privacy enjoyed at home as opposed to the privacy enjoyed at work, but rather whether there is a reasonable expectation of privacy in the workplace. The answer to that question has, in Hong Kong, already been answered in the affirmative by the decision of our Court of Appeal in the Chan Kau Tai decision previously quoted. Nor do I see how a qualitative distinction between privacy in the home and privacy in the office is relevant to the proportionality of the restriction being in the form of a warrantless power of search. For it must be remembered that we are not determining the necessity for C&E officers having a search power but rather the necessity for them having a warrantless one. The question then becomes, what is the justification, the need, for C&E officers to have a warrantless power of search, to which, in my view, the only reasonable answer is because the circumstances are such that it is impracticable for them to obtain a warrant. 103.To assist me in understanding the operational difficulties faced by C&E officers in their daily work, the respondents filed an affirmation affirmed by Assistant Superintendent Lai Chi Wing Barry. In respect of C&E’s duties under the IEO he explained:
104.This was followed by a description of the various search powers granted to C&E officers under the IEO. He said:
105.He then referred to each of these sections explaining how each operated to assist C&E officers in carrying out their duties. 106.Assistant Superintendent Lai cited operational examples in order to demonstrate the need for the power of warrantless search in section 21. He said that usually a minimum of 3 to 4 hours is needed for the preparation of the warrant. This delay, he said, may seriously affect the C&E investigation. This is particularly so in respect of the investigation of the smuggling by cross-border truck drivers. 107.I accept completely the need for C&E officers to have warrantless search powers in respect of anything that is mobile, such as vehicles, vessels, planes and trains. I also accept completely that there will be occasions when they may need such powers in respect of immobile places. But the affirmation of Assistant Superintendent Lai does not reveal a need for a warrantless search power of non-domestic premises, other than when it is not practicable to go before a magistrate. 108.This approach was adopted when amending section 52 of the Dangerous Drugs Ordinance and nothing has been placed before me to show that such an approach would be inappropriate for section 21 of the IEO. I note that in the present case, C&E officers, in ignorance of the provisions of sections 21 and 22 of the IEO actually applied to a magistrate for warrants, those numbered 3, 4 and 9, in respect of non-domestic premises. Thus, their actions in the present case actually gainsays their need for an unconstrained warrantless power of search. Their mistake in respect of all the warrants that lapsed through delay in executing them, was not in preparing the judicial applications in advance, but rather in making those applications in advance. Had the documents been prepared in advance then they could have been easily updated to accommodate any changes in the circumstances and then placed before the magistrate. 109.I am also aware that section 17 of the Prevention of Bribery Ordinance, Cap 201 was amended in 1996 to change it from a warrantless search power to a power exercised by warrant issued by a magistrate, but with a residual power left with the Commissioner of the ICAC to issue his own warrant where he was satisfied that there was reasonable cause to believe that the making of an application to the magistrate would seriously impede the ICAC’s investigation. 110.Thus, on at least two occasions the Government has amended warrantless search power legislation to bring the exercise of the power under judicial control when it was practicable to apply to a magistrate for the issue of a warrant. Implicit in the Government’s actions is a recognition of the importance of having a judicial safeguard overseeing law enforcement’s access to search warrant powers. At paragraphs 52-55 of this judgment I have quoted judicial authority which emphasizes the need for the independent scrutiny of the courts and the characterization of such scrutiny as being “of high constitutional importance”. Those statements are also relevant to my present task. 111.The distinction between domestic and non-domestic premises does not, for the reasons I have mentioned, justify a warrantless entry and search power for the latter type of premises. Being a distinction which is based upon an assumption that the right to privacy in respect of non‑domestic premises is somewhat less valuable or less important than the right to privacy enjoyed by the occupants of domestic premises, it is not, in my view relevant to the issue of whether a warrantless search power is a proportionate response to the law enforcement need. 112.There is no other distinction contained in section 21(1) or other aspect of it which impacts on the proportionality test. I conclude therefore that a warrantless power of entry and search of immobile premises is not proportionate unless it contains a provision that it is only to be employed when it is not practicable to obtain a warrant from a person acting judicially. Absent such a provision, section 21(1) is not a proportionate response to the problem it seeks to address and is, therefore, inconsistent with Article 29 of the Basic Law. 113.The consequence of my so finding is that there was no statutory underpinning of the C&E officers’ entry and search of the premises in respect of which warrants 3, 4 and 9 were issued and, therefore, nothing to legitimise those entries and searches thereby rendering unlawful all seizures effected in the course of them. Conclusion on the Legality of the Warrants 114.As a result of my conclusions on the lateness of the execution of the warrants only those numbered 6, 7 and 15 were validly executed and the seizures lawfully made. These warrants are all OSCO warrants. 115.However warrants were unnecessary in respect of the premises particularized in warrants 3, 4 and 9 as these were premises which C&E officers were authorized to enter and search without warrant pursuant to the power granted to them by section 21(1). But my conclusion on the constitutionality of section 21(1) has rendered their entry and search of these premises unlawful and as a consequence the seizures effected in the course of the search were unlawful. 116.Thus the only outstanding issue is the decision of the Commissioner to apply for the three OSCO warrants that are numbered 6, 7 and 15. The Factual Background 117.Evidence was placed before me by both the applicants and the respondents in the form of affirmations. The respondents did not ask for any of deponents of the applicants to be cross-examined but the applicants crossed-examined the four deponents of the respondents. They were Assistant Superintendent Chan Tsz Tat, Senior Investigator Li Kin Kei, Assistant Superintendent Lai Chi Wing Barry and Senior Investigator Lui Siu Fai. Assistant Superintendent Chan was responsible for the smuggling side of the investigation and Assistant Superintendent Lai for the money laundering side of the investigation. Senior Investigator Li went to the Mainland and inspected evidence bundles put together by Mainland Customs for the Guangzhou Peoples Procuratorate which made use of materials, or information contained in them, that had been seized by C&E under the search warrants and provided to Mainland Customs. Senior Investigator Lui was responsible for a team of officers that determined, via a filtering exercise, what documents and hard disks should be provided to their Mainland counterparts. 118.I shall set out only so much of the factual background as is necessary in order to explain my findings. As a result of the conclusions I have reached on the legal issues, the factual issues have assumed much less importance. However, the fact that I do not mention certain evidence does not mean that I have not taken it into account. 119.From evidence placed before the court by the respondents it is clear that the C&E has a substantial number of Hong Kong-Mainland cross‑border smuggling cases. Assistant Superintendent Lai in his first affirmation said:
120.In order to regulate this cooperative relationship and facilitate their investigations the C&E and Mainland Customs entered an arrangement which is set out in a document called the Customs Cooperative Arrangement (CCA). 121.As the CCA was the basis for the provision by the C&E of copies of the materials they seized under the warrants to their Mainland counterparts, it is necessary to say something about it. 122.Section 2 of the CCA is headed “Intelligence exchange”. “Intelligence” is not defined but obligations to provide it are set out. One of them is to provide intelligence “in respect of any violations of the customs law that has taken place or under planning and involved the import or export” of various listed articles; and “intelligence which may be useful for the other party in the investigation of activities in violation of the customs law”. 123.There is a separate section on assisting each other with verification of documents and other matters relating to the import and export of goods. 124.It is also provides for what it calls “parallel operations by both parties” which I take to be the CCA terminology for joint operations. 125.There is a separate section headed “Use of intelligence and documentation” which because of its relevance to this case I shall set out in full. It is as follows:
126.The investigation in the current case commenced around June 2011 and was into the syndicated smuggling of precious metals, electronic products, frozen meat, etc resulting in the evasion of PRC Customs tax estimated to be in excess of RMB 600 million. The smuggling was suspected of having been on-going since 2009 and the criminal proceeds that flowed from it were suspected of being laundered through Hong Kong bank accounts. When the investigation was turned overt on 12 January 2012, 19 persons were arrested in Hong Kong and over 100 persons were arrested in the Mainland. Both C&E and Mainland Customs coordinated their investigation and turned them overt at the same time. The decision as to when their investigation should be turned overt was one jointly made by both Customs authorities. 127.In order to carry forward the investigation it was necessary to go through an exercise comprehensively comparing and cross-matching the declarations made and documents submitted to both C&E and the Mainland Customs including cargo manifests, invoices and sale contracts amongst others. 128.It is abundantly clear to me that this caused the investigations in both jurisdictions to become interdependent on one another and necessitated close cooperation between C&E and Mainland Customs. There were frequent meetings between C&E and Mainland Customs on a monthly basis and sometime more than once a month. There were intelligence exchanges under the CCA and undoubtedly the exchange of intelligence, materials and investigative findings was indispensable to the success of the investigation. 129.Assistant Superintendent Lai confirmed that C&E received from its Mainland counterparts a request for exchange of intelligence in this joint investigation. This request was first made in June 2011 and was made pursuant to the CCA. C&E made a similar request of Mainland Customs and it was pursuant to this request that C&E enlisted the support of Mainland Customs and gave them copies of the seizures to enable them to provide the assistance requested. Thus, from the outset the two Customs authorities were conducting a joint investigation in the course of which they expected they would be exchanging with one another intelligence which each acquired in the course of their enquiries and which each thought might be of assistance to the other. This is a very important part of the context and it is a part of the context which was regulated by the CCA. 130.Assistant Superintendent Lai confirmed that the intelligence exchanges that took place were handled under the CCA and that the copies of seizures effected by the searches that were provided to Mainland Customs were provided under the CCA. He also made it clear that it was only copies of seizures effected under the IEO that were provided to Mainland Customs. He said that what was provided to Mainland Customs was determined by a Senior Investigator under the supervision of the Divisional Commander. 131.The particulars of the seizures are as follows:
132.Assistant Superintendent Lai set out in some detail the general nature of the assistance that Mainland Customs provided and also specifically the assistance it provided in respect of particular categories of documents. 133.Some of the documents provided were banking records of the applicants. Among them were 21,000 pages of Cheque Requests/Voucher Forms and Assistant Superintendent Lai explained why it was necessary to enlist the assistance of their Mainland counterparts in respect of these documents. In relation to 4,782 pages of bank account records, only 323 pages were provided to Mainland Customs as it was only in respect of these pages that it was considered that their Mainland counterparts could be of assistance. 134.Even though the terms of the CCA allow the parties to exchange intelligence in the form of copies of materials seized, a restriction is placed on the use that may be made of this intelligence material. This restriction is made clear by a caveat that is applied to such material which is to the following effect:
All copies of documents provided by C&E to Mainland Customs pursuant to the CCA had a similar, but not identical, caveat printed on them. 135.According to Senior Investigator Lui Siu Fai, in respect of all material for which he was responsible, the following caveat was photocopied onto every photocopy of a document and affixed as a sticker to the cloned hard disks:
136.The Judiciary interpreter has translated this as:
137.The purpose of the caveat was clearly to remind C&E’s Mainland counterparts that there was a limit on the use they could make of the intelligence; the caveat did not and was not intended to be a prohibition on the Mainland Customs making any use of the intelligence for that would have been contrary to the CCA. The Mainland Customs was perfectly entitled to make use of the materials for an intelligence purpose. In his affirmation Assistant Superintendant Lai explained:
Of course, once C&E surrendered the seizures to Mainland Customs they lost all ability to control the use that might be made of them. 138.The presence of the caveat on the copied documents would have prevented their use as court documents in the Mainland. But anything stored on the hard disks, or at least some of the hard disks, may have been capable of being printed out without the printed copy bearing the caveat. 139.It was Senior Investigator Lui Siu Fai who provided an affirmation explaining the screening process employed in respect of documents and computer hard disks seized in the execution of the search warrants. 140.In respect of the documents that were seized, around 15 Customs Officers worked for around two months under the supervision of Senior Investigator Lui. Certain criteria were used to identify what was relevant to the investigation and the screening process was carried out manually by the officers and Senior Investigator Lui. 141.In respect of the hard disks a total of 1,011.9 GB had been cloned and provided to Mainland Customs. The relevancy of the material stored on these hard disks had been determined at the time of seizure by making enquiries of the staff who operated the computers where hard disks were seized. The seized hard disks were cloned and the cloned copies handed over to officers for screening of the contents. The officers doing this screening were some of those involved in the screening of the documents. Twenty two computer hard disks were then identified as containing information relevant to the investigation and the provision of which to Mainland Customs would assist C&E’s investigation. These twenty two hard disks were again cloned and provided to their Mainland counterparts. He explained why it was necessary to clone the whole of the hard disk, rather than specific files on it. He said it was in order,
142.He gave an example of how Mainland Customs successfully located some hidden files on a hard disk which C&E was then able to retrieve. 143.Senior Investigator Lui said he handed the copy documents and cloned hard disks to officers of Mainland Customs between 31 January 2012 to 21 June 2012. 144.In respect of the documents for which Assistant Superintendent Lai was responsible, his staff scanned them into soft copies and a computer application was used to affix a caveat to each page. These soft copies were then copied onto compact discs which were given to their Mainland counterparts. 145.Notwithstanding the close cooperation between the parties the respondents maintain that at no stage were materials that had been seized in the course of executing search warrants handed to Mainland Customs for the purpose of assisting the investigation of suspected offences in the Mainland. It is not disputed that access was granted to Mainland Customs to seized materials nor is it disputed that copies of seized material were handed over to them. However, it is asserted that this was done for the purpose only of assisting the C&E investigation. However the C&E concede that as a result of their actions the Mainland Customs have been able to reconstruct the contents of these documents for the purpose of their own prosecutions and may have made use of information derived from them. 146.The extent of the cooperation can be gleaned from cover sheets prepared by the Mainland Customs in respect of reconstructed documents. For example exhibit CKC-4 is headed:
147.In June 2013 a trial took place at the Guangzhou Intermediate People’s Court of certain defendants arrested by the Mainland Customs. At the court hearing the Mainland Customs were asked to explain the source of the C&E evidence. In a written statement tendered to the court by the Mainland Customs the following explanation was made:
148.Nevertheless the respondents argue that the fact the Mainland Customs made derivative use of the materials supplied to them and the fact that they would do so may have been foreseen by the C&E officers does not detract from C&E’s claim that their only purpose in providing these materials was to advance their own investigation. The Decision to Apply for the Search Warrants 149.This ground of judicial review attacks the decisions of the Commissioner to apply for the issue of the sixteen warrants. It is argued by the applicants that the warrants were sought for the purpose of facilitating the Mainland Customs’ investigation and for the purpose of providing that body with copies of the documents seized under the warrants to assist that investigation. Alternatively, it is said that as this was a joint investigation the C&E officers always intended to provide copies of their seizures to Mainland Customs in order to assist them in their part of the joint investigation and the presence of this improper purpose taints the Commissioner’s decision to apply for the warrants. 150.The position of the respondents is that the C&E had its own on-going investigation into offences and that the warrants were sought and seizures effected in order to carry forward that investigation. 151.The only evidence that supports the assertion of the applicants is first that this was a joint investigation involving very close cooperation between C&E and Mainland Customs with each rendering assistance to the other so that their investigation could be successfully carried forward. Secondly, there was a substantial amount of material provided by C&E to Mainland Customs that had been seized under search warrants. 152.I do not regard the first piece of evidence as significant. Nowadays much of crime is transnational in nature and that has required law enforcement agencies (“LEAs”) to develop close relationships with their counterparts in other jurisdictions. The level of cooperation and assistance will depend upon many factors, not least of which will be the legislative and administrative arrangements put in place by the respective governments to regulate these relationships. This can range from legally based obligations flowing from the governments being parties to bilateral or multilateral treaties or from the governments having in place mutual legal assistance legislation to the purely administrative arrangement of the kind that C&E entered into with the Mainland Customs in the form of the CCA. That the CCA exists is hardly surprising, indeed it would be disappointing if it did not exist for in today’s world such legal and administrative systems or arrangements are crucial to a LEAs’ ability to investigate cross-border crime. 153.The second piece of evidence is the fact that a significant part of the seizures were provided to Mainland Customs. For reasons which I shall set out later in this judgment I find that these seizures were provided by C&E in order to assist and carry forward its own investigation and to assist their Mainland counterparts in their side of this joint investigation. 154.In my view it is beyond doubt that C&E was legitimately conducting an investigation into criminal offences it suspected were being committed in Hong Kong. The commission of these offences necessarily involved the culprits in criminal activity in both Hong Kong and the Mainland. In these circumstances it made sense for C&E and Mainland Customs to conduct a joint investigation. This much is commonsense and uncontroversial. But, a joint investigation means helping one another as part of the process of working together. This will involve the sharing of intelligence and making operational decisions which will enable a coordination of their respective investigations. 155.But participating in a joint investigation with each party agreeing to share information that they uncover that may be useful to the other’s investigation is quite a different matter from applying for search warrants for the dominant or primary purpose of assisting the other’s investigation. Implicit in this conduct is a deliberate misleading of the judicial officer by falsely representing to him, in order to obtain the issue of the warrant, that there are reasonable grounds for suspecting that in the premises for which approval is sought to enter and search, there is evidence of an offence or offences committed in Hong Kong. 156.I regard such an allegation as inherently improbable and before I could be satisfied even on the lower civil standard of a preponderance of probability that it was true, I would need more compelling evidence than that adduced by the applicants. In this respect it is particularly pertinent that there is no evidence that the seizures found in any one of the premises searched related only to the PRC investigation or that C&E officers must have known that the premises from which they were seized were likely to contain materials relevant only to the PRC investigation. 157.It is my view that the fact that there is a joint investigation, even when combined with the fact that subsequently seizures of materials were handed over to Mainland Customs, does not allow of the inference that the warrants were obtained only or primarily or for the dominant purpose of assisting the PRC side of the investigation. Even if officers contemplated, at the time they applied for the warrants, the possibility that , in accordance with the provisions of the CCA, they would provide, where relevant, copies of seizures effected under the warrants to their Mainland counterparts, I do not regard that fact on its own as rendering unlawful or improper their applications for the warrants. 158.The applicants have not succeeded in showing that there was any impropriety in the decision to apply for these search warrants. The Decision to Provide Copies of the Seizures to the Mainland Customs 159.Only copies of seizures made under the IEO were provided to Mainland Customs. No copies of seizures effected under the OSCO warrants were disseminated. Consequently, in view of my findings on the IEO warrants and the constitutionality of section 21(1) of the IEO the issue of why the seizures were copied to Mainland Customs is no longer an issue that needs to be addressed. Nevertheless, in case I am wrong in any of my conclusions on the legality of the warrants or the constitutionality of section 21(1) I think I should say how I would have decided this aspect of the judicial review had it been necessary for me to do so. 160.As a starting point it is worth reminding ourselves that there is nothing unusual in a LEA executing search warrants and affecting seizures under them in the course of conducting a criminal investigation. Nor is there anything unusual in a LEA showing its seizures to others as part of its investigation. That’s how the LEA obtains evidence in relation to its seizures and a better understanding of the relevance of the seizures to the criminal activity being investigated. The LEA would not normally relinquish possession of the original seizure as it does not own it but is only being allowed a temporary possession of it. Once the seizure is no longer needed for the criminal investigation or any prosecution flowing from it, then it must be returned to its owner or otherwise disposed of in accordance with a court order. 161.Thus, there is nothing improper in C&E seeking the assistance of the Mainland Customs in respect of its seizures if this was done in order to advance the C&E investigation, and there is nothing wrong in providing Mainland Customs with copies of the seizures if this is necessary to obtain their assistance in respect of them. The question is, was this the only reason the C&E approached Mainland Customs in respect of these seizures. 162.As the evidence emerged from the witnesses in this case a number of things became quite apparent to me. 163.First, there appeared to exist in the minds of the C&E officers a perception that the CCA legitimized their actions of providing copies of seized material to Mainland Customs for them to use for their own private purposes. Of course it does not. It is purely an administrative arrangement and has no force of law. If legal justification is needed for the provision of this material it must be found elsewhere than in the CCA. No such legal justification can be found in the IEO. There is nothing in this ordinance which allows the C&E Department to disseminate materials seized pursuant to its provisions to third parties other than for the purpose for which the materials were seized. This is to be contrasted with the position in section 6(2)(b) and (4) of OSCO which authorizes the Secretary of Justice, in certain circumstances, to disseminate seized materials to external LEAs. No such similar provision exists in the IEO. 164.In the absence of a specific statutory provision the seized materials cannot be used, including being disseminated to third parties, for a purpose other than that for which the LEA had authority to seize them. The authority to seize them is limited to the LEA’s authority to investigate crime which is itself limited to offences occurring within its jurisdiction which, other than some extra-territorial crimes, will be offences committed within the territorial boundaries of Hong Kong or otherwise justiciable here. All of this was made clear by the Court of Appeal in Attorney General v Ocean Timber Transportation Ltd [1979] HKLR 298. At pages 300-301 Huggins JA said:
165.I also note that in Ho Shau Hong v Commissioner of Police & Anor [1987] HKLR 96 Power J (as he then was) expressed the view at page 105G-H that the public interest in the form of the right of the citizen to be secure in their homes and offices was of fundamental importance and that:
166.The consequence of these legal principles is that a LEA cannot do whatever it likes with materials seized by it in the course of executing search warrants, but will normally be limited in the use it can make of them by the purposes for which they were seized, namely the investigation and prosecution of the criminal conduct as described in the Information placed before the judicial officer who issued the warrant or any other criminal conduct uncovered in the course of that criminal investigation.[18] 167.When a LEA seizes privately owned property pursuant to a search warrant, it does not become the owner of the property but only its temporary custodian and all the property and privacy rights attached to it continue whilst the property remains seized and in the custody of the LEA. The owner is not entitled to the immediate redelivery of his property but he still has the remainder of the possessory right over the seized property.[19] 168.The second matter that became apparent to me is that there appears to exist in the minds of the C&E officers a belief that if the seized material is described as “intelligence” and a caveat placed on limiting its use to effectively an intelligence purpose, then it is lawful to provide it under the CCA to Mainland Customs. In my view such a belief is in direct conflict with the fundamental principles of the law of search and seizure; namely that property seized under a lawful search does not cease to be the property of its owner; the LEA seizing it may only retain it for as long as it is needed for the investigation or any prosecution flowing from it; the LEA is under an obligation to return the seized property to its owner unless a court orders otherwise and the LEA may only use the property for the purpose for which it was seized. 169.Added to this is the protection which the common law has developed in respect of property seized under warrant, namely that there exists a duty of confidentiality that is owed by the seizing LEA to the person entitled to the property. In HKSAR v Lee Ming Tee & Anor (2001) 4 HKCFAR 133 at page 158D-G the Court of Final Appeal quoted with approval the following words of Sir Nicholas Browne-Wilkinson VC at trial that had been cited with approval by Dillon LJ in the Court of Appeal in Marcel v Commissioner of Police of the Metropolis [1992] Ch 225 at pages 255-6:
170.The Court of Appeal in the Marcel case said that in respect of seizures effected by a search warrant the LEA owed a duty of confidentiality to the owners of the seizures and that duty is of the “same character as that which formed the basis of the House of Lords decision in Attorney General v Guardian Newspapers Ltd (No.2) [1990] 1 AC 109”.[20] 171.Thus, it seems to me that describing the seized material as “intelligence” and providing it for a limited purpose to another not authorized to receive it, cannot, and does not, transform the seizures into something they are not, or cause them to lose all the personal property and privacy rights that attached to them at the time of their seizure, or extinguishes the duty of confidentiality that the seizing LEA owes in respect of them. 172.Of course some seized property such as bank and business records will contain a mine of information but access to this information is only obtained pursuant to statutory powers and judicial process. This personal information does not cease to be the private information of its owner simply because it is contained in documents seized under lawful compulsion. I am of the view, therefore, that it would be equally contrary to fundamental principles of search warrant law to allow a LEA to derive information from materials acquired under compulsive process, to characterize it as “intelligence” and then to pass it to third parties not otherwise authorized by law to receive it. 173.In defence of C&E’s actions Mr Pang SC, for the respondents argued that “there is no general prohibition against derivative use of materials obtained by compulsion in Hong Kong, unlike in other jurisdictions e.g. Canada/USA.” In respect of the derivative use made of the seizures by Mainland Customs the Mr Pang said “it is unrealistic and artificial that the Mainland authorities turn a blind eye to the utility of information contained in material delivered to them for a Hong Kong investigatory purpose.” 174.I do not agree. Derivative use is of course permissible by the LEA who executed the search warrants and thereby became possessed of the seized materials. Here that is the C&E. There is nothing at all unusual about a law enforcement officer using information acquired in the course of an investigation, including derivatively obtained information, to carry that investigation forward. That is what investigators do. But where they acquire materials compulsorily they come under a number of obligations in respect of those materials as I have sought to demonstrate. 175.One of those obligations is not to relinquish possession of the materials into the hands of a third party not otherwise authorized by law to receive them. If it is necessary to do so as part of the LEA’s investigation then the LEA who compulsorily acquired the material remains under a continuing obligation to ensure that the rights of the person from whom they were acquired are respected. 176.Where it is necessary for the seizing LEA to temporarily relinquish possession of the compulsorily acquired materials to a third party, that third party does not have the right to make use of them for its own private purposes. The third party, not being authorized by law to acquire possession of the materials for itself, cannot make use of them for its own private purposes and that includes making derivative use of the information contained in them. If the third party is unwilling to receive the materials on these conditions or cannot be trusted to abide by these conditions then the LEA who compulsorily acquired the materials must not, because of the obligations to which it is subject in respect of the materials, hand them over to that third party. This is a very important duty of the LEA for whilst it has temporary possession of the seized materials it acts a guardian of the rights of the person to whom those materials must ultimately be returned. 177.It is these misconceptions under which in my view C&E officers labored that, when set in the context of a joint investigation, explains their handling of the seized materials. This is apparent from the evidence of the C&E officers. When Assistant Superintendent Lai was being cross-examined the following exchange took place between he and Mr Bell SC for the applicants:
178.In the course of testifying to the assistance rendered by their Mainland counterparts the following exchange took place between the Court and Assistant Superintendent Lai:
And later in Assistant Superintendent Lai’s cross-examination:
Senior Investigator Li Kin Kei expressed a similar view:
179.There is no doubt in my mind that, believing that they were entitled, pursuant to the CCA, to share the seized materials with Mainland Customs as long as a caveat was put on their use, and believing that because of the caveat put on their use it was legitimate to regard the seized materials as intelligence only, they provided copies of the seized materials to Mainland Customs. I find they had dual purposes in doing so. The first was to seek the assistance of Mainland Customs in respect of the seizures so as to carry forward the Hong Kong side of the joint investigation and the second was to assist Mainland Customs to carry forward the Mainland side of the joint investigation. This is an irresistible and the only reasonable inference that can be drawn from the evidence and the only realistic view of what took place. 180.These dual purposes were so inextricably intermingled with one another that they cannot be separated out. To describe one as the dominant purpose is, to my mind, unrealistic. Each purpose was equally important. Both Customs authorities had made requests of each other for the exchange of intelligence and I have no doubt that the copies of the seizures were provided in compliance with the obligations that C&E had under the CCA as well as for the purpose of obtaining the assistance they needed for the Hong Kong side of the investigation. In my view the way in which the C&E provided these materials was unlawful. Conclusion 181.As long ago as 1979 in the Ocean Timber case the Court of Appeal recognized the need for legislation in this important area of law enforcement activity. At page 303 of the report Huggins JA said:
182.That time did come and Hong Kong now has the Mutual Legal Assistance in Criminal Matters Ordinance, Cap 525. But section 3(1) of that ordinance states that it shall not apply “to the provision or obtaining of assistance in criminal matters between Hong Kong and any other part of the People’s Republic of China”. The only recourse available to law enforcement in their dealings with their Mainland counterparts is the court‑to‑court letter of request mechanism – hardly a satisfactory mechanism for effective trans-national criminal investigations in the modern age. However, until such time as the legislature enacts a mutual legal assistance in criminal matters regime between Hong Kong and the Mainland our LEAs must abide by the current common law. In this respect I can do no better than to again quote Huggins JA in the Ocean Timber case. In prescient words that decades later resonate with the circumstances of the current investigation and the dilemma in which the C&E officers found themselves, he said at page 300:
Relief 183.The only issue that remains is to determine the relief that I should grant. In respect of the issue of damages the parties asked that this be determined after I had issued my judgment on the merits of the judicial review and determined the other areas of relief. On the resumed hearing of this case I shall hear the parties on the order I should make in respect of the relief sought in the form of damages. 184.In respect of the other relief sought:
185.For the sake of clarity I should state that warrants numbered 6, 7 and 15 are valid. There is nothing about their contents that is fatal to their validity; they were executed within a reasonable time of their issue; and, being all OSCO warrants, none of the seizures effected under them were shared by C&E with their Mainland counterparts. 186.I make an order nisi that the respondents pay the applicants costs of these proceedings.
Mr Robert Pang SC and Mr Edwin Choy, instructed by the Secretary for Justice, for the respondents Mr Adrian Bell SC and Ms Tanie Toh, instructed by Ho Tse Wai, Philip Li & Partners, for the applicants [1] There are also other powers contained in section 21(2), such as a power to seize vessels and to require information, but it is the power in section 21(2)(a) which is relevant to the warrants under consideration. [2] Applebee (1995) 79 A Crim R 554 at 557. [3] It should be mentioned that in this case the Crown agreed that some time limit for execution of the warrant must be implied. [4] The respondents rely on the statement by Richard Stone in his book, The Law of Entry, Search, and Seizure, 5th edition at paragraph 1.55, page 20: “… it is submitted that unless a time limit is imposed by statute … a warrant for entry would likewise remain in force until executed or withdrawn.” However, the author provides no authority or reasoning for this submission. [5] HKSAR v Chan Kau Tai [2006] 1 HKLRD 400 at page 438B and D-E. [6] Lau Cheong & Anor v HKSAR (2002) 5 HKCFAR 415 at 436H. [7] I note that in R v Yu Yem Kin (1994) 4 HKPLR 75, at 96, Jerome Chan J said he was “wholly satisfied that there is nothing per se arbitrary about a statutory power which can only be exercised upon the existence of a reasonable suspicion on the part of the person entrusted with such power.” [8] HKSAR v Lam Kwong Wai & Anor (2006) 9 HKCFAR 574 at 593B-C. [9] See Leung Kwok Hung v HKSAR (2005) 8 HKCFAR 229 and HKSAR v Ng Po On (2008) 11 HKCFAR 91. [10] Hunter et al v Southam Inc. (1984) 11 DLR 641 at 654. [11] This comment was made by the Secretary for Security on the Second Reading of the Dangerous Drugs (Amendment) Bill 1994 – see Hong Kong Hansard, 18 May 1994 at page 3875. [12] R v Rao 9 D.L.R. (4th) 542 at page 559. [13] Ibid, at page 565. [14] Ibid, at page 566. [15] At page 567 of his judgment Martin JA said of it: “The legitimate expectation of privacy in one’s home or office is one of the most valued rights of the individual afforded protection by a democratic society.” [16] Ibid, at page 567. [17] Ibid, at page 565. [18] I say “normally be limited” because it may be that a seizing LEA is entitled to pass seized material or information contained in them to another LEA or regulatory body in its jurisdiction if that LEA or regulatory body is tasked to investigate the specific conduct revealed by the disseminated materials or the information obtained derivatively from them. See the comment by Sir Nicolas Browne‑Wilkinson VC in Marcel v Commissioner of Police [1992] Ch 225 at 235D-E. [19] Attorney General v Ocean Timber Transportation Ltd [1979] HKLR 298. [20] Marcel v Commissioner of Police of the Metropolis [1992] Ch 255 at page 261B-C. In Attorney General v Guardian Newspapers Ltd (No.2) [1990] 1 AC 109 Lord Goff of Chievely said at page 281B-C: “… a duty of confidentiality arises when confidential information comes to the knowledge of a person (the confidant) in circumstances where he has notice, or is held to have agreed, that the information is confidential, with the effect that it would be just in all the circumstances that he should be precluded from disclosing the information to others.” | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cases cited in this judgment
Further hearings and rulings under HCAL 113/2012