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A A

B CTEA 1/2017 B

C [2018] HKCT 1 C

D IN THE COMPETITION TRIBUNAL OF THE D


HONG KONG SPECIAL ADMINISTRATIVE REGION
E E
COMPETITION TRIBUNAL ENFORCEMENT ACTION NO 1 OF 2017
F ____________ F

BETWEEN
G G

COMPETITION COMMISSION Applicant


H H
and
I I
st
NUTANIX HONG KONG LIMITED 1 Respondent
J J
BT HONG KONG LIMITED 2nd Respondent
K K
SIS INTERNATIONAL LIMITED 3rd Respondent

L INNOVIX DISTRIBUTION LIMITED 4th Respondent L


(trading as “INNOVIX DISTRIBUTION”)
M M
TECH-21 SYSTEMS LIMITED 5th Respondent
N ____________ N

O O
Before: Hon G. Lam J, President of the Competition Tribunal in Chambers

P Date of Hearing: 9 February 2018 P


Date of Decision: 14 March 2018
Q Q

_______________
R R
DECISION
S _______________ S

T T

U U

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A A

B TABLE OF CONTENTS B
Paragraph
C I. Introduction 1 C
II. Background 3
III. Position on discovery of documents 9
D IV. The present application 15 D
V. Legal framework 18
E
VI. Class 1 — Any without prejudice correspondence and records 28 E
of without prejudice communication between the Commission
and respondents in relation to the Commission’s Leniency
F Policy F
A. Scope 28
B. Leniency Policy 29
G G
C. The claim for public interest immunity 34
D. Informer privilege 35
H E. International practice 41 H
F. Balancing the relevant considerations 48
G. Without prejudice privilege 55
I VII. Class 3 — The Complainant’s original electronic complaint 66 I
form which was submitted to the Commission on 21 July 2016
J VIII. Class 5 — All without prejudice correspondence and records 77 J
of without prejudice communications between the
Commission and any Respondent where an agreement has not
K been reached K
IX. Class 6 — All confidential internal reports, minutes and 75
correspondence relating to the Commission’s investigation
L L
and present proceedings. This includes any records of
communication between Commission staff during the
M execution of search warrants under s 48 of the Competition M
Ordinance
A. Relevance 76
N N
B. Legal professional privilege 84
C. Public interest immunity 86
O X. Mr D documents 104 O
XI. Residual prayer of summons 121
XII. Itemisation of documents 123
P XIII. Conclusion and orders 128 P

Q Q

I. Introduction
R R

1. This is the Tribunal’s decision on the 3rd respondent’s


S S
application for orders of discovery against the Competition Commission
T who is the applicant in the substantive proceedings. The application raises T

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A A

B questions of principles regarding the Commission’s obligations of B

discovery and claims of public interest immunity and without prejudice


C C
privilege as well as questions in the application of the principles to the
D particular facts. D

E E
2. The other respondents have neither opposed the
F 3rd respondent’s application nor appeared at the hearing. I shall refer to the F

1st, 2nd, 3rd, 4th and 5th respondents as Nutanix, BT, SiS, Innovix and
G G
Tech-21 respectively.
H H

II. Background
I I

3. The underlying proceedings in this case are an application by


J J
the Commission against 5 undertakings for a declaration pursuant to s 94
K of the Competition Ordinance (Cap 619) (“Ordinance”) that they have K

contravened the first conduct rule (s 6(1)) and for the imposition of a
L L
pecuniary penalty on each of them pursuant to s 93.
M M

4. Broadly described, the allegation is that in July 2016, in


N N
response to the Hong Kong Young Women’s Christian Association’s
O (“YWCA”) invitation to tender for the supply and installation of an IT O

server system, BT planned to submit a bid based on a system supplied by


P P
Nutanix. YWCA’s procurement policy required a minimum of 5 bids for
Q this tender. Where fewer than 5 bids were received, approval of a certain Q

committee and board would be required before the contract could be


R R
awarded. To assist BT’s bid, Mr A1 of Nutanix agreed with Mr B of BT
S that Mr A would obtain 4 “dummy” bids (ie not genuine bids) from friends S

T T
1
The identity of the individuals involved will be kept confidential, at any rate at this stage, pursuant
to the confidentiality ruling dated 28 March 2017.
U U

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A A

B of his. Mr A then agreed with each of 3 individuals who worked in SiS, B

Innovix and Tech-21 respectively and an individual who worked in another


C C
firm, for them to do so. It is said that pursuant to these agreements SiS,
D Innovix and Tech-21 (but not the fourth firm) each submitted a dummy bid D

to YWCA. The Commission contends that the conduct of the


E E
5 respondents constituted “bid-rigging” and therefore “serious
F anti-competitive conduct” under the Ordinance and contravened the F

first conduct rule.


G G

H 5. In particular, in the case of SiS, it is alleged that Mr A H

telephoned Mr D, a manager of SiS, told him there were insufficient


I I
tenders, and asked him to help submit a bid. Mr A emailed Mr D the
J completed tender documents and asked Mr D to print out 2 copies, sign J

and stamp them, which Mr D did as requested. He also deposited the


K K
tender at YWCA at Mr A’s request.
L L

6. Some of these allegations made are based on a statement made


M M
by Mr D dated 13 February 2017, in which Mr D further said he only
N submitted a bid because Mr A asked for his help and that, from his point N

of view, the bid was submitted just to make up the required number,
O O
without any thought of winning the tender. The Commission alleges that
P the arrangement between Mr A and Mr D was an anti-competitive vertical P

bilateral arrangement between Nutanix and SiS which contravened the


Q Q
first conduct rule.
R R

7. In these proceedings, the Commission has filed a witness


S S
statement of Mr D dated 19 October 2017 (which confirmed his statement
T of 13 February 2017 subject to some amendments) and a supplemental T

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A A

B witness statement of Mr D dated 27 November 2017. B

C C
8. SiS has, in its Response, raised various grounds in opposition
D to the Commission’s case. It is not necessary to set them all out here for D

present purposes. Suffice it to say that SiS submits that Mr D’s statements
E E
were obtained in highly questionable circumstances, challenges the facts
F as narrated in Mr D’s statements, and contends in any event that Mr D F

lacked authority and acted on a frolic of his own and in fraud of SiS in
G G
doing what he is said to have done.
H H

III. Position on discovery of documents


I I

9. Although the provisions of O 24 r 2 of the Rules of the High


J J
Court (“RHC”) for automatic general discovery do not apply to
K enforcement actions before this Tribunal, an order for discovery by the K

Commission was made at the first case management conference on 26 May


L L
2017, essentially with the agreement of the parties. The terms of the order
M directed that the Commission do file and serve: M

N “a list of documents … separating (a) those sought to be relied N


upon and used by the Applicant in these proceedings and
(b) unused materials, with the origination of each of the
O documents identified (eg ‘From R2’)”. O

P P
10. The basis of this direction was explained in the Tribunal’s
Q Reasons for Decision dated 12 June 2017 (at §4) as follows: Q

R “As regards discovery, the Applicant takes the position that it R


will disclose both used and unused materials in its possession to
the Respondents, following the approach the Court of First
S Instance has recently held to apply in disqualification S
proceedings under s 214 of the Securities and Futures Ordinance
T (Cap 571): Securities and Futures Commission v Wong Yuen Yee T
[2017] 1 HKLRD 788. There is no dispute in principle regarding

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A A

B the scope of disclosure by the Applicant.” B

C 11. The Commission has since filed 4 lists of documents, whose C

format resembles those used in actions in the High Court. The first list is
D D
substantial, containing 231 entries (some compendiously described) in
E E
part 1 of schedule 1. The subsequent lists are supplemental in nature. The

F
documents disclosed include, amongst others, all the pre-existing F
documents obtained by the Commission during the investigation and all
G G
the records of interview conducted under s 42 of the Ordinance. In addition,

H on the application of Nutanix and Innovix, the Tribunal on 12 October H


2017 made an order for discovery by a third party, namely, YWCA, for a
I I
range of documents that were not in the possession of the Commission.
J J
12. Both the first and second lists filed by the Commission dated
K K
23 June and 31 August 2017 respectively contain this statement:

L L
“The Applicant objects to produce the documents enumerated in
Part 2 of [Schedule 1 hereto] on the ground that they are by their
M nature privileged from production or subject to public interest M
immunity.”

N N
13. Part 2 of Schedule 1 in the first list contains 4 classes of
O O
documents (numbered 1 to 4) while that in the second list has 2 classes

P
(numbered 5 to 6), described as follows: P

No. Description
Q Q
1. Any without prejudice correspondence and records of
without prejudice communication between the
R Commission and respondents in relation to the R
Commission’s Leniency Policy.
S 2. Affirmations of Wong Kam Hung (together with S
exhibits), and drafts thereof, for the purpose of applying
T
for search warrants in HCCM 261/2016. T
3. [The Complainant’s] original electronic complaint form
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A A

B which was submitted to the Commission on 21 July B


2016.
C 4. Correspondence, reports, and other documents passing C
between the Commission and its solicitors for the
purpose of this action, instructions to Counsel, advice,
D D
opinions and drafts; correspondence, reports and other
documents passing between the Commission and its
E solicitors and other parties written or prepared for the E
purpose of obtaining evidence or furnishing to the
Commission’s solicitors information which might lead
F to the obtaining of evidence to be used in legal F
proceedings, statements, notes, memoranda, and other
G documents prepared by or for the use of the G
Commission’s solicitors for the purpose of legal
proceedings.
H H
5. All without prejudice correspondence and records of
without prejudice communications between the
I Commission and any Respondent where an agreement I
has not been reached.
J 6. All confidential internal reports, minutes and J
correspondence relating to the Commission’s
investigation and present proceedings.
K K
This includes any records of communication between
Commission staff during the execution of search
L warrants under section 48 of the Competition L
Ordinance.
M M

14. The specific grounds for objecting to production of these


N N
documents were set out in the affidavits filed with those 2 lists.
O O

IV. The present application


P P
15. SiS’s application is made by summons issued on 3 November
Q Q
2017 (following a debate in correspondence) and amended on 24 January
R 2018, pursuant to rule 24 of the Competition Tribunal Rules (Cap 619D) R

(“CTR”) and RHC O 24 r 7.


S S
(1) In form, the summons seeks an order that the Commission file
T T
and serve a list of documents, to include all documents in

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A A

B B
Class 1, 3, 5 and 6 and all documents passing between the
Applicant and “other parties” under Class 4 above, with each
C C
of the documents identified individually and the originator
D thereof specified. D

(2) The summons seeks an order for a list of documents to include


E E
all documents (again, to be individually identified) described
F in the schedule to the summons (all being, broadly speaking, F

documents relating to Mr D, which I shall refer to as “Mr D


G G
documents”). There are 7 sub-categories in the schedule
H which are set out in §104 below. H

(3) The summons also seeks an order essentially for a list of other
I I
documents which should be but have not yet been disclosed
J by the Commission. J

(4) The summons asks for an affidavit from the Commission


K K
verifying the fresh list of documents to be filed and stating, in
L particular, “to the extent that privilege from production in L
respect of any part(s) of any of the documents is asserted, the
M M
grounds for objection be specified for each part of each
document”.
N N
(5) Finally, the summons seeks a direction that the grounds for
O O
and the extent of objection from production claimed by the
Commission shall be in accordance with the determination of
P P
the Tribunal.
Q Q

16. Regarding Class 4 as set out in the table above, since SiS does
R R
not dispute that the Commission is entitled to claim legal advice privilege
S for communications between itself and its lawyers, the application was S

directed at communications with “other parties”. It was initially opposed


T T
on the ground of litigation privilege but, at the hearing, Mr Mok SC (who
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A A

B appeared with Ms Lam) confirmed on behalf of the Commission that it B

would no longer claim litigation privilege in this respect and would file a
C C
further list in consequence. It is therefore unnecessary to deal with Class 4
D or the question of litigation privilege in this decision. D

E E
17. The Commission opposes the rest of the summons on various
F grounds including (i) public interest immunity, (ii) without prejudice F

privilege, (iii) the factors referred to in CTR r 24(3), and (iv) lack of
G G
relevance. As the context of argument varies as between different classes
H of documents, I shall address each category of documents separately before H

dealing with the question of enumeration and the form of any order to be
I I
made.
J J

V. Legal framework
K K

18. S 144(1) of the Ordinance provides that the Tribunal may


L L
decide its own procedure, and may follow the practice and procedure of the
M Court of First Instance in the exercise of its civil jurisdiction, and for this M

purpose, has the same jurisdiction, powers and duties of the Court.
N N
Pursuant to s 158, the CTR have been made by the Chief Judge of the High
O Court. O

P P
19. CTR r 24(1) provides that a party may apply to the Tribunal
Q for an order for discovery and production of a document relating to the Q

proceedings from a person for inspection. RHC O 24 (except rr 1, 2, 3, 4


R R
and 6) is specifically incorporated and applies to proceedings before the
S Tribunal by virtue of r 24(4) of the CTR. This includes O 24 r 5 which S

provides that the grounds on which documents are privileged from


T T
production are to be stated in the list of documents, and O 24 r 15 which
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A A

B makes clear the rules on discovery are without prejudice to public interest B

immunity. CTR r 4(2)(a) specifies that if any provision of the RHC applies,
C C
it applies with any necessary modifications.
D D

20. CTR r 24(1) provides:


E E

“A party may apply to the Tribunal for an order for discovery


F and production of a document relating to the proceedings from a F
person for inspection.”
G G

21. CTR r 24(3) — a special provision found only in the


H H
CTR — specifically provides:
I I
“The Tribunal may make or refuse to make an order for
discovery and production of a document having regard to all the
J circumstances of the case, including — J

(a) the need to secure the furtherance of the purposes of the


K Ordinance as a whole; K

(b) whether the information contained in the document sought to


L L
be discovered or produced is confidential;

M (c) the balance between the interests of the parties and other M
persons; and

N (d) the extent to which the document sought to be discovered or N


produced is necessary for the fair disposal of the
proceedings.”
O O

P This rule makes clear that discovery is in the discretion of the Tribunal, to P

be exercised in all the circumstances including the 4 matters specified. The


Q Q
application of RHC O 24 and the jurisprudence on discovery in actions in
R the High Court should be approached accordingly. R

S S
22. Reference should also be made to Part 8 (ss 122-128) of the
T Ordinance intituled “Disclosure of Information”. By s 123, information T

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A A

B obtained by the Commission in the course of, or in connection with, the B

performance of its functions that relates to the private affairs of a natural


C C
person, the commercial activities of any person that are of a confidential
D nature, or the identity of any person who has given information to the D

Commission, and information given to the Commission on terms that or in


E E
circumstances that require it to be held in confidence, is regarded as
F “confidential information”. S 125 stipulates that a “specified person” F

(which includes the Commission and its employees 2) must preserve and
G G
aid in preserving the confidentiality of confidential information, must not
H disclose it to any other person, and must not suffer or permit any other H

person to have access to it. By virtue of s 126, however, this does not apply
I I
if disclosure is made with “lawful authority”, which is the case if, inter alia,
J the disclosure is made in accordance with an order of the Tribunal or any J

K
other court or in accordance with a law or a requirement made by or under K
a law, or in connection with judicial proceedings arising under the
L L
Ordinance.3

M M
23. Subject to the CTR, the Commission accepts on this
N application, as it has from the outset in this case, that the scope of discovery N

O
it is to give — especially the test of relevance — is as set out in Securities O
and Futures Commission v Wong Yuen Yee [2017] 1 HKLRD 788; hence
P P
it consented to the order for discovery set out in §9 above. It was held in

Q
that case that the Securities and Futures Commission’s discovery, in an Q
application for disqualification orders under s 214 of the Securities and
R R
Futures Ordinance (Cap 571), should approach the standard applicable to

S the prosecution in criminal proceedings as explained in HKSAR v Lee Ming S

T 2
S 122. T
3
S 126(1)(c) and (d).
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A A

B Tee (2003) 6 HKCFAR 336 and encompass relevant “unused materials”, B

which
C C

“should ordinarily include the information and documents it has


D obtained from the investigation of the transactions that are D
eventually relied upon and complained of in the disqualification
proceedings, except those which are obviously irrelevant even
E E
on this generous test”.

F F
24. It was stated that the duty of the prosecution is to disclose to
G the defence “relevant material which may undermine its case or advance G

the defence case”.4 Reference was also made there to the test suggested by
H H
Jowitt J in R v Melvin (unrep, 20 December 1993):
I I
“I would judge to be material in the realm of disclosure that
which can be seen on a sensible appraisal by the prosecution:
J (1) to be relevant or possibly relevant to an issue in the case; J
(2) to raise or possibly raise a new issue whose existence is not
K apparent from the evidence the prosecution proposes to use; K
(3) to hold out a real (as opposed to a fanciful) prospect of
providing a lead on evidence which goes to (1) and (2)”
L L

M
At §83 of Wong Yuen Yee, the court observed that the language expressing M
the R v Melvin test is not radically different from the traditional test of
N N
relevance in civil cases as laid down in Compagnie Financière et

O Commerciale du Pacifique v The Peruvian Guano Co (1882) 11 QBD 55, O


62–63.
P P

Q
25. “Unused materials” generally encompass materials gathered Q
during the investigation but, as was pointed out in Wong Yuen Yee at §71,
R R
even in criminal cases the law does not require automatic disclosure of all

S unused materials, but only in accordance with the test for relevance. S

T T
4
Wong Yuen Yee at §71, citing HKSAR v Lee Ming Tee at §170.
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A A

B Mr Mok also pointed out that neutral material or material damaging to the B

respondents need not be disclosed: R v H [2004] 2 AC 134, §35.


C C

D 26. Mr McCoy SC, who appeared with Mr Parker on behalf of D

SiS, placed heavy reliance on Wong Yuen Yee. It should be noted, however,
E E
that the debate in Wong Yuen Yee centred round the test of relevance. In
F particular, it did not decide whether public interest immunity or without F

prejudice privilege could be claimed; this kind of issues was simply not
G G
raised in that case (see Wong Yuen Yee, at §81).
H H

27. Counsel also emphasised the penal nature of the penalty


I I
sought by the Commission in these proceedings. Mr McCoy submitted that
J these are criminal proceedings but acknowledged that it is not necessary to J

decide this question here on which I heard no argument. I recognise there


K K
are special features of enforcement actions for pecuniary penalty such as
L this, as distinct from ordinary civil actions between private parties. Even L

if these proceedings involve the determination of a criminal charge within


M M
the meaning of Article 11 of the Hong Kong Bill of Rights (Cap 383),
N however, it does not necessarily mean that criminal jurisprudence and N

procedures apply or apply in the same way in all respects to these


O O
proceedings. As Lord Bingham put it in Brown v Stott [2003] 1 AC 681,
P 704D-G: P

Q “The jurisprudence of the European Court very clearly Q


establishes that while the overall fairness of a criminal trial
R
cannot be compromised, the constituent rights comprised, R
whether expressly or implicitly, within article 6 are not
themselves absolute. Limited qualification of these rights is
S acceptable if reasonably directed by national authorities towards S
a clear and proper public objective and if representing no greater
qualification than the situation calls for. The general language
T T
of the Convention could have led to the formulation of hard-
edged and inflexible statements of principle from which no
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A A

B departure could be sanctioned whatever the background or the B


circumstances. But this approach has been consistently
eschewed by the Court throughout its history. The case law
C shows that the Court has paid very close attention to the facts of C
particular cases coming before it, giving effect to factual
D differences and recognising differences of degree. Ex facto D
oritur jus. The Court has also recognised the need for a fair
balance between the general interest of the community and the
E personal rights of the individual, the search for which balance E
has been described as inherent in the whole of the Convention:
see Sporrong and Lönnroth v. Sweden (1982) 5 EHRR 35, at
F F
para 69; Sheffield and Horsham v. United Kingdom (1998) 27
EHRR, 163, at para 52.”
G G

VI. Class 1 — Any without prejudice correspondence and records of


H H
without prejudice communication between the Commission and
respondents in relation to the Commission’s Leniency Policy
I I

A. Scope
J J

28. Class 1 concerns what may be described as “leniency


K K
documents”. They contain correspondence and records of communications
L with leniency applicants in relation to the Commission’s leniency policy, L

but two important qualifications should be noted. The Commission raises


M M
no objection to production of (i) any pre-existing documents which could
N serve as evidence in these proceedings provided during the course of the N

leniency process, or (ii) any “successful” communications, ie those where


O O
leniency is granted.5 Subject to this, the Commission objects to production
P of Class 1 documents on the grounds of both without prejudice privilege P

and public interest immunity. In particular, it is said that the Commission


Q Q
is concerned to protect the identity of the party who engaged in leniency
R R
5
This is consistent with the Commission’s stance that without prejudice privilege ceases to apply
S where an agreement is reached, but is of theoretical interest only in this case since no undertaking S
has been granted leniency. It was said in the certificate of the Chairperson of the Commission that
even in the case of successful leniency applicants, there is a need to withhold from disclosure without
T prejudice communications pursuant to which the application is made (such as the application T
statement or “proffer”, as referred to in §2.18 of the Leniency Policy). As this aspect does not arise
in the present case, it is unnecessary to deal with it.
U U

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A A

B communications with the Commission. The class is drawn in general terms B

because, the Commission submits, it is not practicable to identify the origin


C C
of the documents without revealing the identity of the person concerned.
D D

B. Leniency Policy
E E

29. Leniency is an important investigative tool found in the


F F
competition law and practice of many jurisdictions to combat cartels.
G Hard-core cartels are virtually universally condemned by competition G

authorities as being economically harmful. By their very nature they are


H H
also usually difficult to detect, investigate and prove. This has led to the
I adoption of leniency programmes which are, in essence, schemes designed I

to reward co-operation by a cartel member to aid in exposing cartels. A


J J
leniency programme operated by an enforcement agency typically offers
K persons involved in a cartel immunity from fines (or sometimes a reduction) K

which might otherwise be imposed, in return for cooperation, often in the


L L
form of provision of information and evidence. The value of such a
M programme extends beyond dealing with the immediate case to creating “a M

general climate of uncertainty among potential cartel members which may


N N
6
inhibit the actual formation of cartels”.
O O

30. In Hong Kong, the Commission’s leniency programme has


P P
express statutory foundation. S 80(1) of the Ordinance empowers the
Q Commission to enter into leniency agreements in these terms: Q

R “The Commission may, in exchange for a person’s co-operation R


in an investigation or in proceedings under this Ordinance, make
an agreement (a “leniency agreement”) with the person, on any
S S
terms it considers appropriate, that it will not bring or continue

T T
6
per Advocate General Mazák in §31 of his opinion in Pfleiderer AG v Bundeskartellamt,
Case C-360/09, 14 June, 2011; [2011] 5 CMLR 7.
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A A

B proceedings under Part 6 for a pecuniary penalty in respect of an B


alleged contravention of a conduct rule against [that person or
any employee, officer, agent, partner, as appropriate] in so far as
C the contravention consists of the conduct specified in the C
agreement.”
D D

S 80(2) provides that the Commission must not, while a leniency


E E
agreement is in force, bring or continue proceedings for a pecuniary
F penalty in breach of that leniency agreement. Thus the Ordinance F

expressly contemplates the Commission using leniency as a means of


G G
facilitating the performance of one of its principal functions, namely, the
H investigation of conduct that may contravene the competition rules H

(s 130(a)).
I I

J 31. The Commission has promulgated its “Leniency Policy for J

Undertakings Engaged in Cartel Conduct” (“Leniency Policy”) setting out


K K
its approach to leniency, albeit strictly applicable only in relation to
L leniency agreements with undertakings. As to persons who are not L

undertakings, it is stated that the Commission “will consider case by case


M M
whether it is appropriate to exercise its enforcement discretion towards
N such persons”.7 N

O O
32. The principal features of the Leniency Policy include the
P following: P

Q (1) Leniency is available only in respect of cartel conduct Q

contravening the first conduct rule.


R R
(2) Leniency is provided only to the first successful applicant.
S Potential applicants are ranked in sequence of time by a S

marker system whereby a potential applicant, upon providing


T T
7
Leniency Policy, p 1.
U U

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A A

B B
sufficient information, is given a marker which identifies the
time and date of the call.
C C
(3) The Commission makes a preliminary determination whether
D D
the reported conduct is cartel conduct and whether leniency is
available.
E E

(4) If the Commission determines that there is cartel conduct and


F F
leniency is available, it will notify the undertaking with the
highest ranking marker that it may make an application for
G G
leniency.
H H
(5) Before the applicant submits its application, it will be asked to

I
agree to a non-disclosure agreement with the Commission I
which provides that the applicant will keep confidential:
J (a) the fact that it is submitting an application for leniency; J

and (b) the information provided or to be provided.


K K
(6) The applicant is asked to provide a detailed description of the
L cartel, the entities involved, the role of the applicant, a L

timeline of the conduct and the evidence the applicant can


M M
provide. This is commonly referred to as a “proffer”. The
N proffer may be made in hypothetical terms and through a legal N
representative on a “without prejudice” basis.
O O
(7) After considering the proffer, the Commission may ask the
P applicant to provide access to some evidence in support of the P

proffer such as documentary evidence (including pre-existing


Q Q
documents relating to the cartel) and/or by making available
witnesses to be interviewed by the Commission. Information
R R
of this kind provided to the Commission during the proffer
S stage will not be used as evidence in proceedings for a finding S

of a contravention of the First Conduct Rule against the


T T
applicant or any other person.
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A A

B B
(8) Based on the proffer and any additional information requested
and provided by the applicant, the Commission will determine
C C
whether to make an offer to enter into a leniency agreement.
D D
(9) The leniency agreement, according to the template annexed to
the Leniency Policy, specifies the parties and their current and
E E
former officers or employees against whom the Commission
F agrees not to bring proceedings and the specific obligations of F

the parties by way of cooperation. The Commission may use


G G
any information or documents provided by the parties under
H the agreement. H

I 33. Paragraph 5.7 of the Leniency Policy states: I

J “Subject to paragraph 3.4 above8 on the use of information by J


the Commission in Tribunal and other court proceedings and the
requirements of Part 8 of the Ordinance to the extent applicable,
K K
it is the Commission’s policy not to release Leniency Material9
(whether or not it is confidential information under section 123
L of the Ordinance) and to firmly resist, on public interest or other L
applicable grounds, requests for Leniency Material, including
the fact that leniency has been sought or is being sought, where
M such requests are made, for example, in connection with private M
civil proceedings in Hong Kong or in other jurisdictions unless:
N N
(a) it is compelled to make a disclosure by an order of the
Tribunal or any other court, by law or any requirement made
O by or under a law; O

(b) it has the consent of the leniency applicant to disclose the


P material; P

Q
(c) the relevant information or document is already in the public Q
domain; or

R R
8
Paragraph 3.4 concerns the situation where a leniency agreement has been terminated (as envisaged
under s 81 of the Ordinance). It states: “Information provided by an undertaking to the Commission
S pursuant to a leniency agreement which has been terminated may be retained by the Commission S
and used as evidence against that undertaking and other persons involved in the cartel.”

T
9
Defined as (a) any confidential information provided to the Commission by a leniency applicant for T
the purpose of making a leniency application and/or pursuant to a leniency agreement, and (b) the
Commission’s records of the leniency application process, including the leniency agreement.
U U

V V
- 19 -
A A

B (d) the Commission, after entering a leniency agreement, has B


terminated the leniency agreement under section 81 of the
Ordinance.”
C C

D C. The claim for public interest immunity D

E
34. In support of the claim for public interest immunity, the E
Commission has filed a certificate made by its Chairperson, Ms Anna Wu
F F
(“Chairperson”), which states as follows:

G G
“12. It is … essential that the Leniency Policy gives cartel
participants sufficient incentives for them to come forward to the
H Commission. As part of these incentives, it is key that H
undertakings which come forward to the Commission to report
cartel conduct, ie leniency applicants, are not placed in a worse
I position than those who have not applied for leniency at all. I

13. That would be the case, for example, where the without
J J
prejudice records and communications relating to an
unsuccessful leniency application are disclosed in proceedings
K related to the cartel conduct in question. In this respect: K

(a) The leniency application will usually involve the leniency


L applicant engaging in without prejudice discussions with the L
Commission in order to persuade the Commission that the
M applicant qualifies for leniency before the Commission will M
enter into a leniency agreement with the Commission.

N (b) In that context, the applicant has probably made an N


admission in relation to some or all of the conduct in question.
O (c) Where the Commission ultimately institutes proceedings in O
respect of the cartel conduct, the position of the unsuccessful
P leniency applicant in the proceedings would be unfairly P
prejudiced compared to other respondent cartel members,
should the content of its earlier without prejudice
Q communications with the Commission be revealed to the Q
Tribunal and other respondents. For example, the interests
of the other respondents may not be aligned with those of the
R R
unsuccessful leniency applicant and might even be
diametrically opposed.
S S
(d) A requirement that the Commission disclose and produce
without prejudice correspondence and records of without
T prejudice communications between the Commission and an T
unsuccessful leniency applicant would unduly dissuade
U U

V V
- 20 -
A A

B potential leniency applicants in the future because of their B


knowledge that the contents of such communications may
become disclosable if their leniency application is
C unsuccessful. C

D
…… D

15. Thus, the effectiveness of this essential tool in the


E detection, investigation and prosecution of cartel activities E
would be severely undermined if the fact and content of these
leniency discussions were to be held disclosable. This would in
F turn inhibit and adversely affect the proper functioning of the F
Commission and the effect investigation and prosecution of the
G infringements of competition.” G

H D. Informer privilege H

I 35. At common law, there is a rule of law (not a matter of I

discretion for the court) that an informer’s identity is privileged from


J J
disclosure in criminal or civil proceedings: Marks v Beyfus (1890) 25
K QBD 494. This covers not only the informer’s name but any information K

that singly or in combination might tend to reveal his or her identity. The
L L
rule, which may be regarded as a species of public interest immunity, is
M subject to an exception in a criminal trial where the information is M

necessary in order to demonstrate the accused’s innocence.


N N

O 36. SiS has not contended that the privilege does not apply to O

informers of the Commission; nor do I see in principle why it should not


P P
apply. The public interest in protecting informers is as important to an
Q enforcement agency such as the Commission as it is to the police: Q

Australian Securities and Investments Commission v P Dawson Nominees


R R
Pty Ltd (2008) 169 FCR 227, §48. S 123(1)(a)(iii) of the Ordinance
S specifically classifies as confidential information that relates to “the S

identity of any person who has given information to the Commission”. The
T T
privilege was held in an Australian case to be engaged in respect of the
U U

V V
- 21 -
A A

B identity of persons providing information under the immunity programme B

of the competition law enforcement authority there (equivalent to the


C C
Leniency Policy of the Commission in Hong Kong): Australian
D Competition and Consumer Commission v Prysmian Cavi E Sistemi D

Energia SRL [2011] FCA 938, §182.


E E

F 37. In HKSAR v Agara [2014] 2 HKLRD 648, Stock VP said: F

G “2. The first point is that the circumstances in which the G


disclosure of an informer’s identity in a criminal trial may be
justified is an exception — indeed the sole exception — to
H informer privilege. One does not start from the other end, which H
is to say one does not start from a presumption that unless it be
I shown that the public interest considerations otherwise demand, I
a defendant is entitled to that information.

J 3. This point is evident from a study of the judgment of J


McLachlin J in R v Leipert to which Yuen JA refers where it was
said, at 293, that :
K K
‘Connected as it is to the essential effectiveness of the
L criminal law, informer privilege is broad in scope … Subject L
only to the ‘innocence at stake’ exception, the Crown and the
court are bound not to reveal the undisclosed informant’s
M identity. M

Informer privilege prevents not only disclosure of the name


N N
of the informant, but of any information which might
implicitly reveal his or her identity. Courts have
O acknowledged that the smallest details may be sufficient to O
reveal identity.
P … P

… In the case at bar [the judge] noted: ‘The privilege is a


Q Q
hallowed one and it should be respected scrupulously.’

R … R

In Bisaillon v Keable … this Court held (at p 93):


S S
‘The rule is subject to only one exception, imposed by
the need to demonstrate the innocence of an accused
T person.’” (Emphasis added).” T

U U

V V
- 22 -
A A

B 38. The “innocence at stake” exception (as it has been called) was B

previously considered to be the only exception to the rule in the UK: D v


C C
National Society for the Prevention of Cruelty to Children [1978] AC 171,
D 218E-F. This remains the case in Canada: see R v Leipert [1997] 1 D

SCR 281 and, more recently, R v Durham Regional Crime Stoppers Inc,
E E
2017 SCC 45. Authorities in the last two decades show that, in the UK,
F further exceptions to the rule are recognised, and that even in a case not F

falling within the established exceptions, a balancing exercise would still


G G
be required between the public interest in the protection of informers and
H the countervailing interests advanced by the person seeking disclosure.10 H

I I
39. In HKSAR v Agara, Yuen JA noted there might be a
J difference in approach between the UK and Canada, and adopted the J

Canadian approach at least for drug cases. Whilst agreeing with Yuen JA,
K K
Stock VP emphasised several points as quoted above, evidently basing his
L decision on the Canadian case of R v Leipert.11 Derek Pang J agreed with L

both judgments.12
M M

N 40. Since the Commission has invited this Tribunal to take the N

balancing approach, it is unnecessary for me to decide whether in the


O O
present kind of case, the informer privilege is as a matter of Hong Kong
P law subject only to the “innocence at stake” exception. I shall deal with P

the competing interests after canvassing the practice of other jurisdictions.


Q Q

R R
10
See the summary by Auld LJ in Chief Constable of the Greater Manchester Police v McNally
S [2002] Crim LR 832, at §§14-21. S
11
See §§2-5, although his Lordship also emphasised the special role of informers in drug cases: §§6-7.
See also HKSAR v Lam Timothy Yat Fung [2015] 4 HKLRD 666 (English translation at [2015] 4
T HKLRD 679), at §§14-15, applying HKSAR v Agara. T
12
At §65.
U U

V V
- 23 -
A A

B E. International practice B

C 41. On behalf of SiS, Mr McCoy submitted that the C

Commission’s stance is “wholly out of step” with the practice in the UK,
D D
Australia and the EU. This submission does not seem to me to be wholly
E accurate. The practice in the UK, where it is the administrative agency E

which imposes sanctions for anti-competitive conduct in the first instance


F F
subject to appeals to the Competition Appeal Tribunal, may be gleaned
G from the guidance in Applications for Leniency and No-Action in Cartel G

Cases published by the Office of Fair Trading in 2013 (and adopted by the
H H
Competition and Markets Authority in 2014). At §7.7, it is stated:
I I
“Disclosure of application statements may be of particular
concern to applicants because application statements sometimes
J disclose certain aspects of the application that the OFT has J
chosen not to pursue or the applicant’s own analysis of the
K emerging details of the cartel at the time of the application, and K
there is therefore a potential risk that any unnecessary
disclosures may put leniency applicants at a disadvantage
L relative to non-leniency parties. Accordingly, whilst application L
statements, including transcripts of oral statements, will be
placed on the OFT’s file, when assessing the need for disclosure,
M M
the OFT will give weight to the strong public interest in
encouraging full and frank applications, and notes that
N non-disclosure of such material may be in the public interest in N
order to protect the efficacy of the leniency regime. In practice,
this means that the OFT will not ordinarily grant access to the
O O
application statement to other recipients of a statement of
objections. 13 However, in the event that the application
P statement contains relevant evidential material that has not been P
presented in other forms that can be made available as part of
access to the file*, it may be necessary to grant access to the
Q application statement, for rights of defence purposes. In such Q
cases, we will keep confidential any parts of the statement that
R
are not relevant to the case in question. …” (emphasis added) R

S S

T
13
A statement of objections notifies the relevant parties of a proposed infringement decision in respect T
of the competition law prohibitions. It is provisional and affords the parties an opportunity of making
representations on the matters set out, before a final decision is made.
U U

V V
- 24 -
A A

B 42. The footnote to the text marked with an asterisk above states: B

C “The OFT expects applicants to provide all primary source C


material that led to the generation of the application statement
that the OFT considers is relevant to its case, so this situation is
D expected to be exceptional, rather than the norm.” D

E E
43. While it is stated in §7.8 of Applications for Leniency and
F No-Action in Cartel Cases that: F

G “Even in the case of an unsuccessful leniency applicant or in the G


case of a leniency applicant which is not proceeded against or
where the leniency application was subsequently withdrawn, it
H cannot be excluded that disclosure of some or all of the material H
provided as part of the leniency application, including the
I identity of the applicant, may have to be disclosed to other I
parties in the course of access to the file”,

J J
it is fair to infer that this would be the case primarily where, as stated in
K §7.7 quoted above, the application statement contained relevant evidential K

material that had not been presented in other forms that could be made
L L
available. In the present case, the Commission has not sought to withhold
M any pre-existing documents which could serve as evidence in these M

N
proceedings, and has further confirmed that Class 1 documents do not N
contain any relevant evidential material or other material or information
O O
that may undermine the Commission’s case against SiS or advance SiS’s

P
case that have not been presented in other forms already disclosed. P

Q Q
44. For the position in Australia, Mr McCoy referred to the

R
decision of Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) 246 ALR 137, R
[2008] FCA 88. There, following earlier proceedings mounted by the
S S
Australian Competition and Consumer Commission (“ACCC”) against a

T
company (Visy) and other entities for colluding with Amcor to fix prices T
in the cardboard box market, Cadbury brought an action against Amcor for
U U

V V
- 25 -
A A

B damages under the Trade Practices Act 1974 (Cth). Visy was joined by B

Amcor as a respondent to Amcor’s cross-claim in the damages action. The


C C
relevant issue was whether certain witness proofs of Amcor employees
D drafted by ACCC and served on Visy in the earlier proceedings were D

protected by public interest immunity from being disclosed and produced


E E
by Visy and Amcor to Cadbury in the damages action. Gordon J held that
F they were not. But, with respect, the case does not advance Mr McCoy’s F

submissions for the following reasons:14


G G

(1) Amcor was a successful applicant to the ACCC for leniency


H H
(see §29)15 — disclosure of the communications with Amcor
I would be consistent with the Commission’s position in the I

present case that successful leniency communications would


J J
be disclosed. Gordon J’s observation (in §30) that “it must be

K
taken for granted that a cartel participant contemplating a K
confession to the authorities knows, or should know, that his
L statements will be used by the authorities to prosecute the L

other party or parties” was made in the context of such an


M M
applicant.16 In contrast, an applicant for immunity or leniency
N can legitimately be said to have a reasonable expectation that, N
if his application is unsuccessful, the statements he has made
O would not be disclosed or used in the proceedings that may O

well include him as a respondent.


P P
(2) Secondly, Amcor did not seek any confidentiality guarantee in
Q Q
its immunity application, as a result of which the court
considered that the force of any public interest immunity
R R
14
Incidentally it may be noted that the court actually held that certain other statements of Amcor’s
S witnesses were subject to ACCC’s litigation privilege (§§39-42). See also ACCC v Yazaki S
Corporation [2014] FCA 1316 on the application of litigation privilege to information obtained
pursuant to ACCC’s immunity policy.
T 15
See also see [2007] FCA 617 at §8. T
16
See also §35.
U U

V V
- 26 -
A A

B B
claim was vitiated (see §29).

C (3) Thirdly, the court observed that the proofs in question were C
statements by witnesses that Cadbury would be free to
D D
approach in order to obtain all relevant information, so that
ACCC’s argument boiled down to that Cadbury should not
E E
enjoy a “free ride” on ACCC’s work (§§31-33).
F F
(4) The practice in Australia has since been changed. Shortly
after the decision of Gordon J in Cadbury Schweppes Pty Ltd
G G
v Amcor Ltd (2008) 246 ALR 137, [2008] FCA 88 and of the
H Full Court in [2009] FCAFC 32, legislative amendments were H

introduced via the Trade Practices Amendment (Cartel


I I
Conduct and Other Measures) Act 2009. The Explanatory
J Memorandum to the Bill stated the context as follows: J

“7.2 The ACCC has expressed concerns that its ability to


K obtain confidential information regarding cartel conduct has K
been significantly hindered by concerns that it may be
required to disclose that information to third parties in
L L
certain circumstances.

M 7.3 The ability of the ACCC to obtain confidential M


information from informants is of particular importance to
the detection of cartel conduct. Cartel conduct by its nature
N is often engaged in covertly. As a result, information from N
cartel participants or those closely connected to a cartel
O
participant is often required to reveal the conduct. O

7.4 However, given the relationship of such informants


P to the cartel, they may be discouraged from providing the P
relevant information if concerns or uncertainty exist as to the
circumstances in which the information may be disclosed to
Q others. Q

For example, if appropriate protection was not afforded


R R
informants may be reluctant to cooperate with the ACCC due
to concerns such as reprisals or liability to third parties.
S S
7.5 For the TP Act to meet its objectives it is essential
that the ACCC is able to obtain the information necessary to
T effectively enforce it. If the protection provided to T
confidential cartel information is not clarified, the ACCC’s
U U

V V
- 27 -
A A

B ability to obtain the information necessary to enforce the B


cartel provisions of the TP Act may be frustrated.”
C (5) Consequently, a new provision, s 157B, was inserted into the C

statute, which provided that the ACCC is not to be required to


D D
disclose “protected cartel information”17 to a court or tribunal
E except with leave of the court or tribunal. In exercising this E
power, the court or tribunal must have regard to a number of
F F
specified matters, namely:

G “(a) the fact that the protected cartel information was given G
to the Commission in confidence;

H (b) Australia’s relations with other countries; H

(c) the need to avoid disruption to national and international


I I
efforts relating to law enforcement, criminal
intelligence and criminal investigation;
J J
(d) in a case where the protected cartel information was
given by an informant:
K K
(i) the protection or safety of the informant or of
persons associated with the informant; and
L L
(ii) the fact that the production of a document containing
M protected cartel information, or the disclosure of M
protected cartel information, may discourage
informants from giving protected cartel information
N in the future; N

(e) in the case of a court — the interests of the


O O
administration of justice;

P (f) in the case of a tribunal — the interests of securing the P


effective performance of the tribunal’s functions.”

Q Q
45. Australian Competition and Consumer Commission v
R Prysmian Cavi E Sistemi Energia SRL [2011] FCA 938, on which R

Mr McCoy also placed reliance, was likewise a case where disclosure was
S S

T T
17
Defined in s 157B(7) to mean information given to the ACCC in confidence relating to breaches of
certain sections of the statute.
U U

V V
- 28 -
A A

B ordered in relation to the identity of a person to whom immunity had been B

granted (see §34), and therefore takes the matter no further.


C C

D 46. The Commission of the EU also treats leniency material in a D

special way. Parties to whom a statement of objections has been addressed


E E
may have one-time access to corporate leniency statements in the files of
F the Commission (the primary decision-maker as to liability and level of F

fine) provided they shall not make any copy by mechanical or electric
G G
means of any information,18 while there is an absolute ban on the disclosure
H of leniency statements for the purposes of follow-on damages claims. At H

the level of the individual member states of the EU, however, different
I I
practices exist as regards access to the file.19
J J

47. It can be seen from this brief review that while practices vary
K K
significantly across different jurisdictions, they all regard the adverse
L deterrent effects unimpeded disclosure may have on informants to be L

sufficiently harmful to the public interest to be singled out as potential


M M
justification for non-disclosure or restricted disclosure. In comparison, the
N approach adopted by the Commission is in my view by no means markedly N

less favourable to respondents to enforcement actions. In fact, Mr Mok


O O
submitted that the approach of the UK Competition and Markets Authority
P described above is in substance the same as the Commission’s approach P

and should be adopted.


Q Q

R R

S S
18
See Commission notice on immunity from fines and reduction of fines in cartel cases OJ [2006]
C 298/17 (as amended by Communication 2015/C 256/01) §§33-34.
T T
19
As recognised in ECN Model Leniency Programme (revised in November 2012), Explanatory Notes
§52.
U U

V V
- 29 -
A A

B F. Balancing the relevant considerations B

C 48. It is in my view plain that public interest considerations are C

engaged. In deciding whether or not to order discovery, the Tribunal needs


D D
to take account of the need to secure the furtherance of the purposes of the
E Ordinance as a whole (r 24(3)(a) of CTR). As the long title to the E

Ordinance states, one of its purposes is “to prohibit conduct that prevents,
F F
restricts or distorts competition in Hong Kong”. The Commission’s
G Leniency Policy is ultimately devised and operated to further that purpose G

in the public interest, with express statutory support in s 80.


H H

I 49. There is in my opinion a strong public interest in encouraging I

eligible parties to apply for leniency and in facilitating free and frank
J J
communication during the process. The process is rightly treated with
K strict confidence, although I recognise this is by no means a complete K

answer to disclosure because any assurance of confidentiality by the


L L
Commission has to be subject to its disclosure obligations in legal
M proceedings and to any order for disclosure that may be made by the M

Tribunal.
N N

O 50. While a person can perhaps reasonably be held to expect that O

if his leniency application is successful, the statements made by him will


P P
be disclosed and used vis-à-vis third parties, it seems to me that the
Q distinction drawn in relation to unsuccessful leniency communications has Q

a sound logical basis. The position of a party who has unsuccessfully


R R
applied for leniency would be undermined if the without prejudice
S communications were disclosed to the other respondents. By definition, S

the person has failed to obtain immunity, and is as such likely to be among
T T
the respondents proceeded against by the Commission. It can be a real
U U

V V
- 30 -
A A

B concern for an informant that if his leniency application is unsuccessful, B

information disclosed by him including admissions made by him can be


C C
used, whether or not directly or indirectly against him, by other
D respondents. As the Chairperson stated in her certificate, he would be D

placed in a worse position than those who had not applied for leniency in
E E
the first place. Informants would be deterred from coming forward or from
F being full and frank in the information furnished to the Commission during F

the application process, and this would plainly be harmful to the public
G G
interest.
H H

51. The agreed confidentiality protocol in the present case, using


I I
a “confidentiality ring”, does not seem to me to afford adequate protection
J to the unsuccessful applicant. For example, the ring encompasses in-house J

representatives including SiS’s financial controller. More importantly, the


K K
prejudice to the unsuccessful applicant is in the information being
L disclosed to other respondents and used by them in the proceedings, and L

that would not be mitigated in any way by a confidentiality protocol.


M M

N 52. Even in the UK where informer privilege may be overcome N

after a balancing exercise (and not only under the “innocence at stake”
O O
exception), it is recognised that informer privilege remains a “general rule”
P and “very considerable weight” should be accorded to the public interest P

in the protection of informers: Commissioner of Police for the Metropolis


Q Q
v Bangs [2014] EWHC 546 (Admin), §45, per Beatson LJ.
R R

53. On the other hand, there is the public interest that proceedings
S S
before the Tribunal should be determined on the basis of all information
T available, or to put it slightly differently, the interest that SiS should have T

U U

V V
- 31 -
A A

B all relevant material to mount its defence. This in my view applies with B

particular force to an enforcement action seeking pecuniary penalties.


C C
Having said that, it is relevant to note that in the present case:
D D
(1) All pre-existing documents gathered in the leniency process
E that could serve as evidence in these proceedings have been E

disclosed.
F F
(2) Further, the Commission has reviewed the documents and
G confirmed that none of the documents falling with Class 1 G

contain any relevant evidential material or other material or


H H
information that may undermine the Commission’s case
I
against SiS or advance SiS’s case that have not been presented I
in other forms already disclosed.
J J
(3) Whatever the correct characterisation of this enforcement
K
action may be (be it criminal, quasi-criminal or civil), it is K
ultimately not proceedings in which the respondents’ or
L anyone’s liberty is at stake: see Chief Constable of the Greater L

Manchester Police v McNally [2002] Crim LR 832, §23;


M M
Bangs, supra, at §45.
N (4) While I appreciate that SiS has not seen the documents, it has N

not attempted to show that this class of documents is required


O O
for the purposes of demonstrating that it was innocent of any
P breach of the first conduct rule. This is not a case in which P

the respondents are running a “cut-throat” defence. In fact,


Q Q
Mr McCoy has not sought to demonstrate how any material

R
prejudicial to others would be likely to be of assistance to R
SiS’s defence. All that is being said is that the Commission
S has to disclose them to SiS as part of the “unused materials”. S

T
(5) It seems to me that the right of SiS to defend itself would not T
be significantly impaired by non-disclosure of this class of
U U

V V
- 32 -
A A

B B
documents.

C C
54. On balance, I am of the view that the public interest in
D non-disclosure outweighs any contrary interest in disclosure. D

E E
G. Without prejudice privilege
F F
55. The Commission also relies on without prejudice privilege in
G resisting production of Class 1 documents. The justification usually cited G

for this privilege is the public policy explained in Rush & Tompkins Ltd v
H H
Greater London Council [1989] AC 1280, 1299, per Lord Griffiths:
I I
“The ‘without prejudice’ rule is a rule governing the
admissibility of evidence and is founded upon the public policy
J of encouraging litigants to settle their differences rather than J
litigate them to a finish. It is nowhere more clearly expressed
than in the judgment of Oliver L.J. in Cutts v. Head [1984]
K K
Ch. 290, 306:

L ‘That the rule rests, at least in part, upon public policy is clear L
from many authorities, and the convenient starting point of
the inquiry is the nature of the underlying policy. It is that
M parties should be encouraged so far as possible to settle their M
disputes without resort to litigation and should not be
N discouraged by the knowledge that anything that is said in N
the course of such negotiations (and that includes, of course,
as much the failure to reply to an offer as an actual reply)
O may be used to their prejudice in the course of the O
proceedings. They should, as it was expressed by Clauson J.
in Scott Paper Co. v. Drayton Paper Works Ltd. (1927) 44
P P
R.P.C. 151, 156, be encouraged fully and frankly to put their
cards on the table … The public policy justification, in truth,
Q essentially rests on the desirability of preventing statements Q
or offers made in the course of negotiations for settlement
being brought before the court of trial as admissions on the
R question of liability.’ R

S
The rule applies to exclude all negotiations genuinely aimed at S
settlement whether oral or in writing from being given in
evidence.”
T T

U U

V V
- 33 -
A A

B 56. The rationale of the rule is not only to prevent the use of B

admissions, but that “parties and their representatives who are trying to
C C
settle a dispute should be able to negotiate openly, without having to worry
D that what they say may be used against them subsequently, whether in their D

current dispute or in some different situation”: per Lord Rodger in Ofulue


E E
v Bossert [2009] 1 AC 990 at §43. The public policy protects negotiations
F from disclosure “whilst liability is still in issue”: Cutts v Head [1984] F

Ch 290, 310. This protection continues so long as the dispute remains


G G
unresolved one way or another for there was a risk that things said in
H negotiations might be used against the parties; the precise way in which H

they might be used against them is beside the point: per Lord Hope in
I I
20
Ofulue at §9.
J J

57. The rule is “generous in its application. It recognizes that


K K
unseen dangers may lurk behind things said or written during this period,
L and it removes the inhibiting effect that this may have in the interests of L

promoting attempts to achieve a settlement”: Ofulue at §12. To dissect out


M M
identifiable admissions and withhold protection from the rest would not
N only create huge practical difficulties but would be contrary to the N

O
underlying objective of giving protection to the parties so that they could O
speak freely about all issues in the litigation when seeking compromise:
P P
Unilever plc v The Procter & Gamble Co [2000] 1 WLR 2436, 2448-9.

Q Q
58. These judicial statements were uttered in the context of
R R
private civil litigation. While the actions that may be taken by the

S S
20
In Ofulue v Bossert [2009] 1 AC 990, the issue arose, in a second action for possession, as to whether
T it was permissible for the registered owner to rely, as an acknowledgment of title, on a without T
prejudice offer made by the occupiers to buy the land in a previous action for possession between
the same parties which was struck out for inactivity. The House of Lords held it was impermissible.
U U

V V
- 34 -
A A

B Commission for infringement of competition rules are not ordinary civil B

actions between private parties, there is in my view an at least equally


C C
strong public interest in facilitating the kind of cooperation and settlement
D envisaged in the Leniency Policy (as well as other forms of cooperation D

and settlement referred to below in relation to Class 5). Such arrangements


E E
enable the Commission to carry out its investigations more efficiently, save
F the public time and costs, and (especially in the case of settlement) give F

early redress to any harmful conduct, thereby benefitting society as a whole.


G G

H 59. In Property Alliance Group Ltd v Royal Bank of Scotland plc H

[2016] 1 WLR 361, where the bank had previously negotiated with the
I I
(UK) Financial Services Authority in relation to alleged manipulation of
J Libor which resulted in a financial penalty being imposed, it was held that J

a privilege had arisen in respect of the communications between the bank


K K
and the authority by analogy with the without prejudice rule, which could
L in principle be asserted against a third party who sought disclosure of the L

documents in a subsequent civil suit against the bank (see §99). Similarly,
M M
I see no reason in principle why without prejudice privilege cannot apply
N to the negotiations between the Commission and persons subject to N

O
investigation or proceedings even though the context lies outside litigation O
of private rights.
P P

60. Without prejudice privilege does not only mean the


Q Q
information cannot be used as evidence against a party but generally
R R
permits privileged documents to be withheld from third parties in litigation

S
connected with the same subject matter: see Rush & Tompkins Ltd v S
Greater London Council [1989] AC 1280, 1301.
T T

U U

V V
- 35 -
A A

B 61. Mr McCoy submitted that such negotiations between the B

Commission and a third party on potential cooperation or settlement, even


C C
where they have not resulted in any agreement, should be disclosed to SiS,
D even though they remain “without prejudice” to the third party concerned D

and therefore, for instance, could not be used by the Commission in any
E E
enforcement proceedings against him. I view this submission with some
F alarm because, if accepted, it would mean that no one could safely F

negotiate with the Commission on a without prejudice basis with any


G G
confidence that the communications would remain confidential between
H them at least unless and until an agreement is reached. On that submission, H

as soon as an enforcement action has begun, the Commission would have


I I
to disclose to the respondents all these communications. The line between
J using the information against the negotiating party and allowing other J

K
parties to make use of it for their own purposes is too fine to offer any K
comfort.
L L

62. In this connection it is to be noted that in September 2017,


M M
when another respondent herein applied for an order to expunge from the
N affidavits and the Commission’s list of documents references to certain N

O
without prejudice communications, and for a consequential order that the O
other respondents deliver up copies of the documents, SiS did not object
P P
on the ground that without prejudice privilege did not justify withholding

Q
the documents from the other respondents or on any other ground. Q

R R
63. Relying on R v K(A) [2010] QB 343, Mr McCoy made a

S
sweeping submission that without prejudice privilege simply does not S
apply in proceedings such as these as against respondents that are not party
T T
to the negotiations. In R v K(A), the relevant issue was whether statements

U U

V V
- 36 -
A A

B made by a person in a without prejudice meeting with his wife’s lawyers B

relating to ancillary relief, which tended to show he had failed to account


C C
for tax, were admissible as evidence in his subsequent prosecution for
D cheating the public revenue. The English Court of Appeal held that they D

were. For the reasons below, however, I do not consider the decision to be
E E
authority for Mr McCoy’s wide proposition:
F F
(1) R v K(A) did not concern a contest for disclosure and
G production of the materials, but rather their admissibility in G

circumstances where they had already fallen into the hands of


H H
a third party, i.e. the Crown — this was emphasized in the
I
judgment (see pp 365G, 367C, 368B, 368G, 369B-C). In I
referring to R v Derby Magistrates’ Court, ex parte B [1996]
J AC 487, the court specifically noted that legal professional J

privilege (the subject matter of Derby Magistrates’ Court)


K K
was concerned with disclosure and not with admissibility (see
L §69). This could also be seen from the reliance placed on R v L
Tompkins (1977) 67 Cr App R 181 (and also R v Cottrill [1997]
M M
Crim LR 56) which held that although the defendant could
have refused to disclose a privileged note, it was admissible
N N
in evidence once it had fallen into the hands of the prosecution
O (see §§70, 71). O

(2) The charge prosecuted in R v K(A) was wholly unconnected


P P
with the without prejudice negotiations. On that basis, and
Q noting that “the public interest in preserving confidentiality Q

becomes weaker the more remote the subject matter of those


R R
proceedings becomes from the subject of the original
S negotiations” (see §72, p 369D), the Court held that the public S
interest in prosecuting crime outweighed the public interest in
T the settlement of disputes. Here, in contrast, the without T

U U

V V
- 37 -
A A

B B
prejudice negotiations were conducted by the Commission in
connection with the very proceedings as those involving SiS
C C
in which disclosure is being sought.
D D
(3) These proceedings do not concern the prosecution of a
traditional hard-core criminal offence. Even if they involve
E E
the determination of a criminal charge within the meaning of
F Article 11 of the Hong Kong Bill of Rights, this does not mean F

that they are to be equated for all purposes with criminal


G G
proceedings. See also §27 above.
H (4) In any event, R v K(A) only decided that without prejudice H

statements in negotiations connected with prior civil


I I
proceedings could (once they had found their way into the
J prosecution’s hands) be adduced in evidence by the J
prosecution against the maker of the statements. It did not
K decide that the prosecution was obliged to disclose without K

prejudice negotiations with one defendant to a co-defendant


L L
where no settlement had resulted. Specifically, it did not
M decide that documents covered by the kind of privilege held M

in Property Alliance Group Ltd v Royal Bank of Scotland plc


N N
to subsist in the negotiations between a person and a

O
regulatory authority, could be disclosed by the authority and O
used by other respondents in the very proceedings which those
P negotiations unsuccessfully sought to avoid. P

Q
(5) Accordingly R v K(A) does not seem to me to provide the Q
answer to the question at hand at all. Of greater relevance in
R my view are three Canadian authorities not cited by counsel. R

In R v Bernardo [1994] OJ No 1718 (10 May 1994), LeSage J


S S
of the Ontario Court (General Division) said (at §16):
T “I agree … that there should be a recognised privilege T
surrounding plea discussions vis-à-vis the accused and the
U U

V V
- 38 -
A A

B Crown. There are many reasons in the nature of public B


policy that would suggest that such a privilege does exist or
ought to exist in order to encourage Crown and defence to
C have full, frank and private negotiations in criminal cases. … C
I am of the view that the public interest is well served by
D encouraging such frank and full discussions between counsel D
for the accused and counsel for the Crown. The saving to the
public and the resulting benefit to the administration of
E justice in resolving cases that ought to be resolved is E
substantial. …”
F F
These considerations mirror those canvassed in the context of
the question of public interest immunity above.
G G

(6) Mr McCoy was not able to cite any case in which failed plea
H H
negotiations between the prosecution and one defendant were
I required to be disclosed to a co-defendant. The case of R v I

Sayers and Elanik 2003 NWTSC 58 is authority to the


J J
contrary. There Sayers had entered into plea negotiations with
K
the Crown which resulted in an agreed statement of facts K
being prepared, but eventually he did not plead guilty. Elanik,
L who was jointly charged and to be jointly tried with Sayers for L

second degree murder, sought disclosure of the agreed


M M
statement of facts. Schuler J of the Supreme Court of
N Northwest Territories rejected the application, holding that N
Sayers was still an accused and very much at risk of prejudice.
O O
The line advocated on behalf of Elanik, between using the
information for her own case and using the information
P P
against Sayers in their joint trial, was “so fine as to be
Q non-existent”. Any agreed statement of facts and other Q

information provided to the Crown in the course of the plea


R R
bargaining on Sayers’ behalf was privileged and the privilege
S was a reasonable limitation on Elanik’s Charter right to make S
full answer and defence.
T T
(7) R v Sayers and Elanik may be contrasted with R v Nestlé
U U

V V
- 39 -
A A

B B
Canada Inc 2015 ONSC 810, where two companies, Cadbury
and Hershey, sought to prevent information they had provided
C C
to the Competition Bureau of Canada under its immunity and
D leniency programmes (during the “proffer” stage) from being D

disclosed by the Crown to persons who were subsequently


E E
indicted and facing trial for price fixing contrary to the
F
Competition Act. Nordheimer J of the Ontario Supreme F
Court held that settlement privilege 21
(the Canadian
G equivalent of without prejudice privilege) did not apply to G

prohibit disclosure to the accused of the information in


H H
question to the extent it was factual information. As I read the
I decision, a critical fact was that Cadbury had been granted I
immunity and Hershey had received leniency treatment and
J J
pleaded guilty, so that neither of them was facing any criminal
proceedings (or, indeed, any civil proceedings), nor could
K K
they point to any prejudice that would be occasioned to them
L from the disclosure sought: see §§11, 15-16, 64, 69. The L

judge relied on R v Bernardo, supra, in which Lesage J held


M M
that the privilege surrounding the plea negotiations between
N the Crown and Homolka (an accomplice of Bernardo) did not N
prevent disclosure of the materials to Bernardo because the
O negotiations had resulted in a plea and Homolka was no O

longer at risk of prejudice and was instead being called as a


P P
witness for the Crown in the trial of Bernardo (see §§16-17).
Q Q
(8) These Canadian authorities fortify my view that privilege
R exists in relation to leniency and settlement negotiations R
between the Commission and a potential target of
S S
investigation or enforcement at least where they have not

T T
21
It should be noted that public interest immunity was not relied upon by the Crown in that case: see
§74.
U U

V V
- 40 -
A A

B B
resulted in a successful settlement.

C C
64. Mr McCoy further referred to Davies and Davies v Nyland
D and O’Neil (1975) 10 SASR 76, but the relevant passages seem to me, with D

respect, to support no more than the proposition that statements made


E E
during a discussion for compromise that constituted one or more of the
F ingredients of the tort of interference with contract may be admitted in F

evidence (see pp 88-91, per Wells J at first instance). As such the


G G
statements may well fall within a recognized exception to the without
H prejudice rule, namely, where the privilege is a cloak for wrongdoing. The H

authority does not assist SiS in the present case. The same may be said of
I I
the cases cited by Mr McCoy in the same vein including New Zealand
J Institute of Chartered Accountants v Clarke [2009] 3 NZLR 264, §46; J

K
Jung v Templeton (HC Auckland CIV-2007-404-5383, 30 September K
2009), §36; and Pisimi v Kari [2011] PGNC 52, §22.
L L

65. For the above reasons, the Commission is in my view also


M M
entitled to withhold from SiS all Class 1 documents on the ground of
N without prejudice privilege or a privilege akin to it as applied to these N

O
proceedings. O

P VII. Class 3 — The Complainant’s original electronic complaint form P


which was submitted to the Commission on 21 July 2016
Q Q
66. The Commission objects to production of this document on
R R
the ground of public interest immunity. The Chairperson’s certificate filed

S for this purpose stated that the vast majority of the Commission’s current S
investigations were commenced by way of complaints lodged by members
T T
of the public or companies based in Hong Kong, and that it is important
U U

V V
- 41 -
A A

B that complainants not be discouraged from reporting to the Commission B

potential anti-competitive conduct which merits investigation. It is said


C C
that some complainants would be reluctant to lodge a complaint if the
D contents of their originating complaint (including their identity and contact D

details) would be made known to the subject of the complaint, and that
E E
disclosure of such information might expose the complainant to the risk of
F retaliatory or punitive measures and unnecessary harm. This concern is F

reflected in the Commission’s Guideline on Complaints issued under s 38


G G
of the Ordinance, where it is stated that the Commission “will not normally
H disclose the Complainant’s identity, without the Complainant’s consent”. H

I I
67. Having regard to the discussion above in relation to Class 1
J documents, I accept that normally the complaint form, which contains the J

complainant’s name and other details that might tend to reveal his identity,
K K
would not only be confidential but also covered by informer privilege.
L L

68. The Complainant’s identity in this case was, however,


M M
revealed by the Commission of its own motion in the Originating Notice
N of Application.22 The fact that it made a complaint was deployed as part N

of the Commission’s case (since the knowledge of the complainant is a


O O
relevant issue in this case). Having regard to the statement in the
P Commission’s Guideline on Complaints set out above, it can be inferred P

that this was done with the consent of the Complainant. While the
Q Q
Complainant’s identity has been redacted in the public version of the
R R
document, this does not alter the fact that it has from the start been known

S
to the respondents and “pleaded” as part of the Commission’s case. S

T T
22
At §34.
U U

V V
- 42 -
A A

B 69. Mr Mok submitted that even though the identity of the B

complainant had been disclosed, the identity of the individual who signed
C C
the complaint form has not yet been disclosed. But there is nothing to
D suggest that the Complainant consented to the disclosure of its identity on D

condition that the signer’s identity be concealed. The Commission has also
E E
disclosed documents recording information provided by the Complainant
F shortly after the submission of the initial complaint. It seems to me that in F

these circumstances there is little left in the rationale for the complaint form
G G
to be withheld. Further, as I understand the position, the key individuals
H within the Complainant involved in the tender will be giving evidence at H

the substantive hearing of the proceedings. The complaint form may well
I I
constitute a prior statement on which they can be cross-examined.
J J

70. For this reason, there is in my view no further interest to


K K
protect that requires the complaint form to be withheld from SiS.
L Relevance is not denied and the document should therefore be made L

available within the confidentiality ring.


M M

N VIII. Class 5 — All without prejudice correspondence and records of N


without prejudice communications between the Commission and any
O Respondent where an agreement has not been reached O

P 71. The following points should be highlighted as regards the P

scope of this class:


Q Q

(1) Class 5 differs from Class 1 in that:


R R
(a) Class 5 (referring to “Respondent”) is limited to
S communications with the 5 respondents in these S

proceedings (though SiS obviously only seeks the


T T
Commission’s communications with the other
U U

V V
- 43 -
A A

B B
4 respondents).

C (b) Class 5 applies to without prejudice communications that C


do not fall under the Leniency Policy, and thus covers
D D
communications with regard to other forms of
cooperation or settlement agreement with the
E E
Commission where the respondent did not qualify under
F the Leniency Policy or it was otherwise inapplicable. F

(2) Further, as in the case of Class 1 (see §28 above), the


G G
Commission’s objection:
H H
(a) does not extend to any pre-existing documents which

I
could serve as evidence in these proceedings provided I
during the without prejudice communications; and
J J
(b) covers only unsuccessful without prejudice
K
communications. Thus the Commission has disclosed K
the communications with Mr D which led to the
L conclusion of a cooperation agreement. L

M M
72. These other forms of cooperation or settlement agreement
N with the Commission may take different forms, as can be seen from the N

Commission’s Enforcement Policy, §§4.1-4.5:


O O

“4.1 Persons may wish, at any time, to cooperate with the


P Commission in its investigations. The Commission will take P
such cooperation into account in considering the proportionate
enforcement response in relation to that person.
Q Q
4.2 Persons may also wish to approach the Commission to
R seek to settle a matter. Approaches to the Commission to discuss R
settlement may be made on a “without prejudice” basis.

S 4.3 The Commission will rely on its general enforcement S


discretion to consider offers of settlement. Settlement may take
various forms, such as:
T T
(a) the Commission agreeing not to take action against
U U

V V
- 44 -
A A

B individuals who wish to provide assistance to the B


Commission in their personal capacity in return for their
cooperation;
C C
(b) the person entering a commitment with the Commission
D
not to engage in anti-competitive conduct again, and/or D
to offer appropriate redress to parties affected by the
conduct; or
E E
(c) the person agreeing to resolve Tribunal proceedings on a
consent basis through a statement of agreed facts and by
F seeking specific orders. F

G
4.4 If the Commission decides to apply for a penalty or other G
order before the Tribunal, settlement may, to the extent
permitted by law, involve the Commission agreeing to make
H submissions for a reduced penalty and/or other appropriate H
orders by the Tribunal having regard to the timing, nature, value
and extent of cooperation provided.
I I
4.5 Where cooperation relates to cartel conduct, the
J Commission will exercise this discretion mindful of the J
Commission’s Leniency Policy for Undertakings Engaged in
Cartel Conduct.”
K K

L
73. I should mention that the mechanism of “commitment” L
mentioned in §4.3(b) has express statutory basis in s 60 of the Ordinance,
M M
and that the resolution of proceedings on a consensual basis through a

N statement of agreed facts, referred to in §4.3(c), appears to be within the N


scope of CTR r 39.
O O

P
74. In the present case, since the commencement of investigation, P
the Commission has engaged in without prejudice correspondence and
Q Q
communications with certain respondents with a view to resolving the

R Commission’s concerns in respect of those parties or entering into an R


agreement for cooperation in exchange for favourable treatment. The
S S
Commission objects to production of these communications on the grounds
T of public interest immunity and without prejudice privilege. It may be that T

informer privilege does not apply to this class of documents. It is, however,
U U

V V
- 45 -
A A

B unnecessary to consider the wider question of public interest immunity for B

I find that, for the reasons set out in connection with Class 1 above, Class 5
C C
documents may be withheld from SiS on the ground of without prejudice
D privilege or a privilege akin to it applicable in these proceedings. In any D

event, as SiS accepted, it is very unlikely that without prejudice


E E
communications regarding matters other than ultimately liability,
F eg agreeing procedural matters or interlocutory steps, would be relevant. F

G G
IX. Class 6 — All confidential internal reports, minutes and
H
correspondence relating to the Commission’s investigation and present H
proceedings. This includes any records of communication between
Commission staff during the execution of search warrants under s 48 of
I I
the Competition Ordinance

J 75. The Commission objects to production on the ground that this J

K
class of documents are irrelevant. As a fall-back position, the Commission K
submits that the documents are covered by public interest immunity as a
L L
class and also asserts legal professional privilege over documents brought

M
into existence for the dominant purpose of obtaining or providing legal M
advice.
N N

O
A. Relevance O

76. On behalf of the Commission Mr Mok submitted that Class 6


P P
documents fall outside even the generous ambit of disclosure as explained
Q in HKSAR v Lee Ming Tee, supra, and SFC v Wong Yuen Yee, supra. It is Q

to be noted that in Lee Ming Tee, Sir Anthony Mason NPJ said (at §§148,
R R
161), after referring to the judgment of Lord Hope in R v Brown (Winston)
S S
[1998] AC 367, 377D, that the duty of disclosure related to materials

T
“gathered by the investigating agency”. In the seminal case of R v Ward T
[1993] 2 All ER 577, 601j, the English Court of Appeal also referred in
U U

V V
- 46 -
A A

B this context to “all the material evidence which the prosecution have B

gathered”. In Wong Yuen Yee, the Court also stated (at §82) that the
C C
required disclosure “should ordinarily include the information and
D documents [the SFC] has obtained from the investigation of the D

transactions that are eventually relied upon and complained of”.


E E

F 77. Mr Mok submitted that internal documents generated within F

the Commission do not constitute materials gathered or obtained by it in


G G
the investigation. I think that would generally be the case. This is perhaps
H why the Prosecution Code published by the Department of Justice of H

Hong Kong states (at §12.6): “Internal records and materials generated by
I I
the prosecution in the preparation of the case may not be disclosable”
J (italics added). Likewise, the practice of the European Commission, as J

stated in Commission Notice on the rules for access to the Commission file
K K
in cases pursuant to Articles 81 and 82 of the EC Treaty, Articles 53, 54
L and 57 of the EEA Agreement and Council Regulation (EC) No 139/2004, L

is that:
M M

“Internal documents can be neither incriminating nor


N exculpatory. They do not constitute part of the evidence on N
which the Commission can rely in its assessment of a case. Thus,
O the parties will not be granted access to internal documents in O
the Commission file. Given their lack of evidential value, this
restriction on access to internal documents does not prejudice the
P proper exercise of the parties' right of defence.” (footnotes P
omitted)
Q Q

Examples of internal documents given in the footnote are


R R

“drafts, opinions, memos or notes from the Commission


S departments or other public authorities concerned”. S

T T
78. The same approach is adopted by the Competition and

U U

V V
- 47 -
A A

B Markets Authority of the UK, allowing the authority to exclude “internal B

documents” from access by a relevant party: see rule 6(2) of the


C C
Competition Act 1998 (Competition and Markets Authority’s Rules)
D Order 2014 (SI 2014/458).23 D

E E
79. Mr McCoy’s riposte to this is that the list of documents as
F ordered by the Tribunal should only contain relevant documents. If F

documents are irrelevant, they should not have been included in the list in
G G
the first place. It is difficult to fault this logic, but the history of the matter
H shows that Class 6 was added by way of a supplemental list in order, inter H

alia, to assert public interest immunity over internal documents, in


I I
response to challenges in correspondence raised on behalf of SiS and
J Innovix. Mr Mok submitted that public interest immunity was the J

fall-back position of the Commission in the event the documents were not
K K
held to be irrelevant. Accordingly I do not think the Commission is
L precluded from contending that the documents are irrelevant, although this L

has led to difficulties in assessing the immunity claim as I shall explain


M M
below.
N N

80. There is undoubtedly reason to believe that the vast majority


O O
of the documents within Class 6 are irrelevant and not necessary for the
P fair disposal of the proceedings. The opinions and assessments of the P

Commission’s members and staff are neither evidence nor material that
Q Q
will assist any party in any relevant sense, as is accepted by SiS. Nor will
R R
23
“Internal document” is defined in rule 1(1) as: “(a) a document produced by, or exchanged
between, the CMA, a regulator or another public authority and which has not been produced
S S
for the purpose of public disclosure by the CMA, a regulator or another public authority, or (b) a
document produced by, or exchanged between, any person from time to time retained under a
contract for services by the CMA, a regulator or another public authority and the CMA, a
T T
regulator or another public authority and which has not been produced for the purpose of public
disclosure”.
U U

V V
- 48 -
A A

B communications of an administrative nature generally be relevant. One B

can readily see that internal reports, Commission’s minutes, internal


C C
comments, analyses, assessments and the like, so long as the primary
D materials on which they are based are disclosed, are unlikely to be relevant. D

Their disclosure would be quite unnecessary for the fair disposal of the
E E
proceedings.
F F

81. But it does not follow that a document is necessarily irrelevant


G G
simply because it is an internal communication within the Commission.
H An internal document containing information gathered during the H

investigation which is not otherwise recorded and disclosed may for that
I I
reason be a relevant document. A hypothetical example was raised during
J argument: supposing an officer of the Commission, after speaking on the J

telephone to a person approached for information or evidence, did not


K K
create a separate note of the conversation but instead recorded what he was
L told in an email to a colleague, that email, albeit internal, would contain a L

record (not found elsewhere) of information gathered in the investigation.


M M
Mr Mok was driven to accept that the email would be disclosable. Whether
N such documents in fact exist is not known, but there were in the present N

O
case external communications of which no note has been produced (see, O
for example, §108 below).
P P

82. The Commission said that there are at least 7,325 internal
Q Q
emails alone that were generated during the investigation, not all of which
R R
apparently had been inspected by the Commission for relevance or

S
sensitivity. If one seeks to focus on those that may possibly contain S
external information not otherwise disclosed, I do not think the task would
T T
be oppressive. In future, the Commission can adopt practices to minimise

U U

V V
- 49 -
A A

B the possibility that its internal documents become relevant and potentially B

disclosable.
C C

D 83. It follows that I am unable to accept that a document must be D

irrelevant merely because it originated and was destined within the


E E
Commission and was not produced for the purposes of disclosure outside
F the Commission. The Commission should in my opinion review its F

position to see whether on the basis explained above there are any Class 6
G G
documents that are relevant and prima facie lie within its duty of disclosure.
H H

B. Legal professional privilege


I I

84. Within Class 6 the Commission invokes legal professional


J J
privilege for “internal confidential documents which were produced or
K brought into existence with the dominant purpose that they or their contents K

be used to obtain or provide legal advice from the Commission’s in-house


L L
lawyers”.
M M

85. There is no dispute of principle here. SiS accepts that the


N N
Commission is entitled to claim legal advice privilege over the entire
O continuum of communications, provided that the documents in question O

are actually connected with the seeking of legal advice from a qualified
P P
lawyer, whether external or in-house, acting in a legal professional capacity:
Q see Super Worth International Ltd v Commissioner of the Independent Q

Commission Against Corruption [2016] 1 HKLRD 281, §63; Balabel v Air


R R
India [1988] Ch 317, 330.
S S

C. Public interest immunity


T T

86. The law recognises that an immunity may arise where


U U

V V
- 50 -
A A

B disclosure of a document is injurious to the public interest. To assess a B

claim for immunity the court has to examine closely, inter alia, the
C C
potential damage to the public interest that, it is said, would result from
D disclosure. The initial affidavit of the Commission verifying the D

supplemental list of documents claimed public interest immunity over


E E
Class 6 en bloc based on the need for the Commission’s staff to freely
F communicate with each other and because the effectiveness of the F

Commission’s operations may be prejudiced if its internal reports,


G G
correspondence and minutes are disclosed. That approach seems to me far
H too general. I am unable to accept the sweeping proposition that every H

internal communication is privileged on such general grounds.


I I

J 87. The Chairperson’s certificate subsequently filed divided the J

internal documents generally generated by the Commission into


K K
5 sub-categories but several of these sub-categories are still widely defined.
L Moreover, since the question of public interest immunity only arises if a L

document is relevant and is necessary for the fair disposal of the


M M
proceedings, and a balancing exercise may be involved, it has been difficult
N to assess the claim for immunity in any final manner because it is at present N

O
not clear precisely which documents might be relevant and at least what O
kind of relevant information they might contain. Doing the best I can in
P P
the circumstances, I shall deal with the 5 sub-categories in turn stating my

Q
views to the extent appropriate. Q

R R
(i) Records of internal communications between Commission staff during
the execution of search warrants issued under s 48 of the Ordinance
S S
88. It appears that this class of documents relate solely to the
T T
execution of search warrants. It is not easy to see how they would contain
U U

V V
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A A

B anything relevant or necessary for the fair disposal of the proceedings. It B

is not in dispute that the affirmations made in support of the application for
C C
search warrants are covered by public interest immunity (Class 2 above).24
D It seems to me that if and to the extent these internal communications tend D

to reveal the Commission’s sources of information or its plans, methods,


E E
procedures and tactics in investigation, then they likewise should be
F privileged because their disclosure would be prejudicial to the discharge of F

the Commission’s functions in future. There seems to me to be little basis,


G G
however, to hold that all internal communications during the execution of
H search warrants would, as a widely defined class that may comprise H

communications of all sorts, meet that condition.


I I

J (ii) Preliminary and preparatory working drafts of witness statements of J


informants, complainants and/or persons under investigation generated
K internally by staff of the Commission K

L 89. The Chairperson has explained that, after Commission staff L

has conducted an interview with an informant, complainant or person


M M
under investigation and before the information gathered is reduced to a
N finalised witness statement, initial or working drafts of some form of a N

statement would normally be prepared by the staff responsible for the


O O
questioning. These initial drafts represent an interpretation of the
P information provided in the interview only and will by nature be P

incomplete, not yet fit or approved for external review, and may not have
Q Q
been cross-checked for accuracy. Often such drafts will be prepared by
R junior staff, with the intention that they would be reviewed by a supervisor R

prior to being finalised. It was said that disclosure of such drafts might
S S

T T
24
As has been held in the authorities, eg Apple Daily Ltd v Commissioner of the Independent
Commission Against Corruption (No 2) [2000] 1 HKLRD 647.
U U

V V
- 52 -
A A

B lead to inaccurate representations of fact or evidence and misinformed B

challenges, unnecessarily require staff to perfect what are merely intended


C C
to be working drafts and thereby prejudice the Commission’s overall
D investigation process. D

E E
90. I doubt if these feared consequences are sufficient to
F constitute substantial harm or real damage to the public interest so as to F

attract public interest immunity. It may be that the real objection to


G G
disclosure of purely internal drafts not communicated to the maker of the
H statement in question, is that such internal works-in-progress, varying in H

content from time to time as the relevant staff works on it, are irrelevant
I I
and not necessary for the fair disposal of the proceedings. In the absence
J of anything more, however, I do not think a case for public interest J

immunity has been made out for such drafts.


K K

L (iii) Internal preparatory and briefing notes prepared by Commission L


staff for the purpose of conducting interviews or executing warrants
M under s 48 of the Ordinance M

N 91. The Chairperson explained that, in practice, prior to N

questioning persons under investigation or executing a search warrant,


O O
Commission staff would generate (for their own use) preparatory notes for
P the relevant meeting, interview or operation. Briefing notes may thereafter P

be prepared for use by other staff participating in the investigation of the


Q Q
case to expedite their grasp of the facts, suggest potential lines of
R questioning, or advise on operation tactics. Such records are of an informal R

and incomplete nature, created for the use of staff in discharge of their
S S
duties.
T T

92. It is said that if such records are disclosable, there is a very


U U

V V
- 53 -
A A

B real risk that the staff responsible for the investigation would be inhibited B

from expressing themselves in a clear, frank and forthright manner when


C C
reporting their views, opinions, suspicions and recommendations. This
D would prejudice the proper conduct and management of the Commission’s D

investigatory work. The disclosure of the manner and methods by which


E E
the Commission carries out its gathering of evidence, including for
F example interview or operation tactics, would enable persons to develop F

counter-measures to thwart the Commission’s investigations.


G G

H 93. To the extent this sub-class concerns the execution of search H

warrants and the documents in it might reveal the investigation methods,


I I
procedures and tactics of the Commission, I consider that, for the reason
J referred to in §88 above in relation to sub-class (i), such documents should J

also be covered by immunity.


K K

L 94. Other internal preparatory and briefing notes, however, have L

not traditionally been treated as covered by public interest immunity as a


M M
class. Nor do I think that the considerations put forward in the certificate
N are sufficient to justify conferring protection on all such documents N

irrespective of contents, many of which would not be of a sensitive


O O
character at all. Nevertheless it seems to me these documents may well
P generally fall outside the duty of disclosure, though not because of public P

interest immunity, but because they are not materials gathered in the
Q Q
investigation nor are they otherwise relevant. Preparatory and briefing
R R
notes record the planning, subjective understanding, appraisal of the

S
materials and proposed strategies of the Commission’s staff, not what the S
interviewees say. They are prepared before the relevant operation, not as
T T
a record of it afterwards. They are for the staff’s own use, not shown to

U U

V V
- 54 -
A A

B the interviewees for confirmation or otherwise. B

C C
(iv) Records of internal communications, recommendations, approvals,
meetings and the relay of information generally, as between Commission
D D
staff and Commission Members, for the purpose of the performance of the
Commission’s investigative and enforcement functions
E E

95. The Commission consists of up to 16 members one of whom


F F
is the Chairperson.25 It is the Commission that decides, in meetings or by
G written resolutions, how to discharge its statutory functions and exercise G

its powers including the bringing of applications before the Tribunal. The
H H
Commission has to rely on its staff to conduct investigations and produce
I reports, recommendations, updates and other communications for the I

Commission members to keep them apprised of the progress of particular


J J
cases and to seek their approval for particular steps.
K K

96. Although this category covers communications both ways, it


L L
seems unlikely that there would be anything relevant in the approvals,
M instructions or decisions relayed by the Commission to its staff. The focus M

is, I believe, on the communications from the staff to members of the


N N
Commission. Even then I think the category is drafted too widely:
O “internal communications” and “the relay of information generally” may O

include administrative matters such as notices to Commission members of


P P
the date of a forthcoming meeting, which cannot possibly be relevant or
Q attract public interest immunity in the present context. Q

R R
97. It seems to me that the category of documents answering this
S description which may possibly be privileged is much narrower, and may S

T T
25
s 2 of Schedule 5 to the Ordinance.
U U

V V
- 55 -
A A

B consist, for example, of some of the substantive reports made by the staff B

to the Commission members for their decision and the Commission’s


C C
minutes. We are concerned only with these internal documents themselves,
D as opposed to their annexes which may include primary documents D

generated such as statements and notes or records of interview or materials


E E
gathered such as pre-existing documents seized or otherwise obtained
F during the investigation. As I understand the position, such primary or F

pre-existing documents have already been disclosed by the Commission.


G G

H 98. In the context of such reports and minutes, there is in my view H

much force in the Chairperson’s statement that disclosure could reveal


I I
highly sensitive and confidential information, for example in relation to the
J Commission staff’s appraisal of the case, the Commission members’ J

internal deliberations and the Commission’s approval mechanisms


K K
generally, and that it would prejudice the Commission’s effectiveness in
L its future operations by stifling proper and robust analysis and debate by L

Commission members and staff due to disclosure concerns. Taylor v


M M
Anderton (Police Complaints Authority Intervening) [1995] 1 WLR 447
N and O’Sullivan v Commissioner of Police of the Metropolis (The Times, N

O
15 June 1995), both decided after the seminal decision of the House of O
Lords in R v Chief Constable of West Midlands Police, ex parte Wiley
P P
[1995] 1 AC 274, are authorities for the view that reports of such nature

Q
may properly be said to belong to a class to which public interest immunity Q
attaches.
R R

S
99. Taylor concerned reports prepared by investigating officers S
during investigations into police conduct pursuant to the (UK) Police and
T T
Criminal Evidence Act 1984 for use of the police authority which

U U

V V
- 56 -
A A

B commissioned it and the Police Complaints Authority. In Taylor, Sir B

Thomas Bingham MR stated (at p 465E-H):


C C

“I am fully alive to the existence of a current of opinion strongly


D flowing in favour of openness and disclosure. I am also, D
however, mindful of the fundamental public interest in ensuring
that those responsible for maintaining law and order are
E E
themselves uncorrupt, law-abiding, honest and responsible. I do
not myself find the points made by Mr. Cartwright in his
F affidavit to be unconvincing, unrealistic or suggestive of F
self-interested special pleading. In very many cases where an
investigating officer is appointed, there must be a real prospect
G of civil, criminal or disciplinary proceedings. I have no G
difficulty in accepting the need for investigating officers to feel
H free to report on professional colleagues or members of the H
public without the apprehension that their opinions may become
known to such persons. I can readily accept that the prospect of
I disclosure in other than unusual circumstances would have an I
undesirably inhibiting effect on investigating officers’ reports.
J
I would therefore hold that the reports of investigating officers J
made in circumstances such as these form a class which is
entitled to public interest immunity. …”
K K

100. O’Sullivan concerned the initial report form sent by the police
L L
to the (UK) Crown Prosecution Service following an investigation into a
M suspected criminal offence. Butterfield J held that such report, as the M

N
genesis of a dialogue between the police and the Crown Prosecution N
Service commenting upon and expressing opinions about the primary
O O
material, belonged to a class of documents to which public interest

P
immunity attached. P

Q Q
101. I agree it is equally vital that there should be freedom of

R
communication in this context between the Commission and its staff, R
without apprehension that what was expressed might be disclosed to
S S
respondents in future. An appropriately defined sub-category of these

T
documents could well, in my view, be covered by immunity. Not knowing T
more precisely what these documents are, nor (assuming there are such
U U

V V
- 57 -
A A

B documents that are relevant) what it is they contain that make them relevant, B

I am not in a position to assess whether they are necessary for the fair
C C
disposal of the proceedings or whether on balance their disclosure should
D still be required despite the immunity. D

E E
(v) Records of general internal communications between Commission
staff responsible for investigations or litigation-related tasks, including
F F
internal reports and electronic correspondence
G G
102. The Chairperson explained that a large volume of general

H internal communications, reports and records may be generated by H


Commission staff in the performance of investigation and litigation-related
I I
tasks. This includes the preparation of reports or memoranda seeking
J internal approval from other Commission staff in relation to various J

investigative steps. It was said that in these contexts, the Commission’s


K K
staff must be able to communicate with one another without fear that their
L views and discussions would be disclosed and scrutinised by parties to L

proceedings. The prospect of disclosure would inhibit and prejudice the


M M
discharge of the Commission’s regulatory, investigatory and enforcement
N functions, and could give rise to misinformed challenges against tentative N

conclusions.
O O

P 103. With respect, I am unable to accept that so large and general P

a class of internal documents all fall within the protection of public interest
Q Q
immunity. The reality is probably that the vast majority of them are simply
R irrelevant because they concern administrative matters, or represent the R

opinions and analyses of Commission’s staff, or simply rehearse and


S S
therefore add nothing to other documents already disclosed. To the extent
T they encompass reports to senior officers of a nature similar to the kinds of T

U U

V V
- 58 -
A A

B reports to Commission members considered in (iv) above, they may be B

protected by public interest immunity, but in the absence of more specific


C C
evidence about such reports I am not prepared to declare blanket immunity
D here. D

E E
X. Mr D documents
F F
104. This class of documents sought by SiS, as stated in its
G supporting affirmation, relate to how the statement of Mr D dated G

13 February 2017 came about. The schedule to the summons sets out the
H H
following 7 sub-classes of documents sought:
I I
1. All drafts, notes, or earlier versions of Mr D’s Statement

J 2. Documents or records on how the communication between J


Mr D and the Commission was initiated
K 3. Documents recording the “offer of cooperation” from Mr D K

L
4. Attendance notes of the telephone discussions on L
9 December and 16 December 2016

M 5. The relay of information to the Commission on 15 December M


2016 and the process for deciding whether to grant Mr D any
guarantee/immunity
N N
6. Notes on the questions posed to Mr D to generate the
O
information given on 14 December 2016 and 31 December O
2016

P 7. Internal communication of the Commission relating to Mr D P

Q 105. Mr McCoy’s overarching submission in respect of Mr D Q

documents is that Mr D is no mere witness in this case. He was a party to


R R
the alleged wrongdoing who has been given immunity in exchange for
S S
evidence relied upon by the Commission against SiS. Counsel relied on

T
the principle established by authorities that where a party to the T
wrongdoing alleged is given immunity and presented as a witness against
U U

V V
- 59 -
A A

B other alleged parties, the court and the defence are to be given a “warts and B

all” account. The phrase originated in this context from the judgment of
C C
the Court of Appeal in R v Tsui Lai-ying & Others [1987] HKLR 857,
D given by Silke JA, where he said (at p 873B): D

E “It is clear beyond peradventure that in cases like this the E


accomplice should be presented to the Court warts and all. The
defence, is entitled to know everything about him, the terms of
F F
the immunity and any matters surrounding it which could affect
the credibility of his evidence. …”
G G

106. One example of the reasons for this need was given by
H H
Hartmann JA in HKSAR v Chong Chi Ho (unrep, CACC 259/2008, 29 May
I 2009), at §51: I

J “For example, the manner in which he came to agree to give J


accomplice evidence may reveal that he was more interested in
protecting himself than giving evidence as to the truth.”
K K

L 107. The Court of Appeal recently reiterated the particular L

importance of the prosecution’s duty of disclosure in respect of prosecution


M M
witnesses who themselves are accomplices in the offence concerned:
N HKSAR v Wun Shu Fai [2017] 2 HKLRD 896, §§62-63. Mr Mok had no N

quarrel in principle with the application of this approach in these


O O
proceedings as far as Mr D is concerned.
P P

108. To put the application in context it is necessary first to set out


Q Q
the relevant course of events:
R R
(1) On 9 December 2016, following a telephone call between a
S Manager in the Operations Division of the Commission S
(Mr Au) and Ms Wai, the principal of Wai & Co, the solicitors’
T T
firm acting for Mr D, Wai & Co wrote to the Commission

U U

V V
- 60 -
A A

B B
confirming a meeting on 14 December. This letter has been
disclosed by the Commission. Mr Au had stated he did not
C C
take a note of the telephone conversation.
D D
(2) On 14 December, Mr D, accompanied by Ms Wai, attended a
meeting with Mr Lear (then Executive Director (Operations)
E E
of the Commission) and Ms Tam (a Legal Counsel of the
F Commission) at which Mr D’s offer to cooperate in the F

Commission’s investigation was discussed. The


G G
Commission’s file note and a 1-page handwritten note of this
H meeting have been disclosed. H

(3) On 16 December, Mr Lear had a telephone call with Ms Wai


I I
informing her of the Commission’s position with regard to
J Mr D’s offer of cooperation. Apparently no notes of this J
conversation exist.
K K
(4) On 22 December, the Commission wrote to Wai & Co setting
L out the Commission’s position as communicated orally on L
telephone on 16 December by Mr Lear to Ms Wai. On
M M
29 December, Wai & Co returned the acknowledgment signed
by Mr D. This correspondence thus constituted the
N N
cooperation agreement reached between the Commission and
O Mr D. It has been disclosed by the Commission. O

(5) On 31 December, Mr Wong (a Manager in the Operations


P P
Division of the Commission) and Ms Li (an officer of the
Q Commission under the supervision of Mr Wong), met with Q

Mr D, Ms Wai and a barrister instructed on behalf of Mr D for


R R
the purpose of interviewing Mr D. The notes of this meeting
S have been disclosed by the Commission, being a 10-page S
handwritten note prepared by Ms Li and a 2-page handwritten
T note made by Mr Wong. T

U U

V V
- 61 -
A A

B B
(6) Following this meeting, Ms Li drafted a statement based on
her notes and recollection of the meeting, on which Mr Wong
C C
provided comments to Ms Li orally. Ms Li then prepared a
D second draft reflecting Mr Wong’s input, which she sent to D

Mr Wong for review. During this process, they contacted


E E
Mr D by way of “brief telephone calls” (the exact number of
F
which cannot now be recalled) to verify the accuracy of F
certain factual information in these initial drafts, but no
G records of such conversations exist.26 G

H (7) On 8 February 2017, a draft statement of Mr D was circulated H


by the Commission to Ms Wai by email which stated that the
I draft was attached for her reference. This draft statement was I

disclosed in the Commission’s list of documents. The


J J
covering email was not disclosed in the list as it was thought
K to be obviously irrelevant, but has been exhibited to the K

Commission’s affidavit made in response to the present


L L
application.

M (8) The statement was signed by Mr D and dated 13 February M

2017 and has been disclosed.


N N
(9) Mr D has made a witness statement after the commencement
O of proceedings dated 19 October 2017 (in which he confirmed O

the statement of 13 February 2017 subject to specified


P P
revisions). He also made a supplemental statement dated
Q
27 November 2017. These were the statements exchanged Q
under the Tribunal’s case management directions.
R R

109. In relation to the matters leading to Mr D’s statement dated


S S

T T
26
To explain the absence of telephone notes, the Commission prays in aid the practice of the European
Commission referred to in §112 below.
U U

V V
- 62 -
A A

B 13 February 2017, therefore, SiS has already been given: the co-operation B

agreement with Mr D; the 2-page file note and a 1-page handwritten note
C C
of the meeting with Mr D on 14 December 2016; Mr Wong’s 2-page note
D and Ms Li’s 10-page note of the meeting with Mr D on 31 December 2016; D

the draft statement circulated to Mr D on 8 February 2017; and the


E E
statement itself signed and dated 13 February 2017. I now deal with the
F 7 items listed in the schedule to SiS’s summons. F

G G
Item 1 — All drafts, notes, or earlier versions of Mr D’s Statement
H H
110. In the light of the evidence, the focus falls on the two draft
I statements prepared by Ms Li based on the meeting of 31 December 2016 I

and reviewed by Mr Wong referred to in §108(6) above. Mr Mok argued


J J
that they are internal documents prepared for internal purposes only, not
K for “external consumption”. K

L L
111. I have already explained more generally in §90 above why the
M claim for public interest immunity in respect of draft statements fails. M

Moreover, on the evidence, as pointed out by Mr McCoy, these statements


N N
are not purely internal works-in-progress. Whilst not circulated to Mr D,
O the drafts were at least in part the result of conversations with Mr D “during O

the process”, on unknown dates and in unknown number of telephone


P P
conversations, during which his response was sought. Mr McCoy accepted
Q that had a full record been kept of such communications, it might be Q

convincingly argued that the intermediate draft versions were irrelevant as


R R
they “could add nothing to the picture”. As it is, however, there being no
S other records of what the Commission gathered from Mr D on those S

occasions, and having regard to the special position of Mr D, it seems to


T T
me that the two drafts should be disclosed.
U U

V V
- 63 -
A A

B Item 2 — Documents or records on how the communication between B


Mr D and the Commission was initiated
C C
Item 3 — Documents recording the “offer of cooperation” from Mr D
D D
Item 4 — Attendance notes of the telephone discussions on 9 December
E
and 16 December 2016 E

112. As for items 2, 3 and 4, the Commission has stated that no


F F
document exists. Mr McCoy submitted that it was difficult to believe no
G written record was made, but counsel’s incredulity alone is not a ground G

H
for disregarding the prima facie conclusive affidavit evidence filed by the H
Commission as to the non-existence of the documents: Tai Fook Futures
I I
Ltd v Cheung Moon Hoi Jeff [2006] 4 HKC 81, §§33-35. In any event, to

J
counter SiS’s submission that it is inherently improbable that no written J
note was created, the Commission prays in aid the practice of the European
K K
Commission which, as stated in §13 of Commission Notice on Access to

L File, involves “no obligation on the Commission departments to draft any L


minutes of meetings with any person or undertaking.”
M M

N
113. It is, however, not clear whether in confirming that no written N
records exist, the Commission has included its “internal” documents or
O O
communications (see §§76-83 above). Mr McCoy gave the example of an

P internal email reporting a call from an insider in SiS who offered to tell all P

in exchange for immunity. I have already explained above why such


Q Q
communications cannot automatically be excluded from the scope of
R disclosure on the ground of irrelevance or public interest immunity merely R

by reason of their being “internal”. As things stand, the Commission’s


S S
affidavit evidence in response to these items need to be supplemented or
T clarified. T

U U

V V
- 64 -
A A

B Item 5 — The relay of information to the Commission on 15 December B


2016 and the process for deciding whether to grant Mr D any
C guarantee/immunity C

114. The Commission submitted that item 5 (as well as item 7) are
D D
obviously irrelevant as they do not contain contemporaneous records of
E any communications with Mr D. I think that “the process for deciding E

whether to grant Mr D any guarantee/immunity”, so far as it refers to the


F F
internal assessment by the Commission, is irrelevant and unnecessary.
G Such documents, to the extent they reveal the Commission’s deliberations G

and approval process for settlement or immunity, may also fall within
H H
sub-class (iv) of Class 6 and be potentially covered by public interest
I immunity (see §§95-101 above). I

J J
115. But item 5 has arisen in part because the Commission’s file
K note of the meeting on 14 December 2016 recorded that Mr Lear told the K

meeting that:
L L

“the purpose of the meeting was to ascertain what evidence


M [Mr D] may be able to provide to assist in the investigation. This M
information will then be relayed to the Commission on Thursday
N (15 December 2016), who will decide whether or not to grant N
some form of guarantee/immunity to [Mr D]”.

O O
116. The information as to what evidence Mr D could provide
P seems to me to be material gathered from the investigation. Insofar as an P

internal document was then produced which “relayed” such information to


Q Q
the Commission on 15 December which was not already wholly
R R
reproduced in other documents disclosed (such as the file note of

S
14 December), the ground of objection of irrelevance would be invalid. S
Nor do I think that the claim for public interest immunity is a valid basis
T T
for objecting to production of this relaying of factual information, which

U U

V V
- 65 -
A A

B seems to me within the scope of presenting Mr D “warts and all”. Indeed, B

at the hearing, Mr Mok accepted that if a document is found to exist that


C C
recorded the relay of information, it will be disclosed (presumably subject
D to any appropriate redaction). D

E E
Item 6 — Notes on the questions posed to Mr D to generate the
information given on 14 December 2016 and 31 December 2016
F F

117. The evidence is that prior to the meeting of 14 December 2016,


G G
Mr Wong, the case manager, prepared a short briefing note setting out the
H factual information gathered to date and suggesting some potential lines of H

questioning that might be pursued should the opportunity arise, in order to


I I
give Mr Lear and Ms Tam the necessary background to Mr D’s
J involvement in the case. Mr Wong also spoke with Ms Tam prior to the J

K
meeting and she made some handwritten notes in Chinese in preparation K
for the meeting. No list of questions as such was prepared for either this
L L
meeting or the one on 31 December 2016.

M M
118. On this evidence, I do not think these internal notes made by
N the officers prior to meeting Mr D and asking him questions are of N

O
relevance. I refer to §§91-94 above in relation to sub-category (iii) of O
Class 6 more generally.
P P

Item 7 — Internal communications of the Commission relating to Mr D


Q Q

119. While a high degree of disclosure is accepted in this context,


R R
“warts and all” does not mean everything under the sun. Given that ex
S hypothesi we are not concerned with any document falling within items 1 S

to 6 above, it is difficult to see why all internal communications “relating


T T
to Mr D” fall within the ambit of the Commission’s accepted obligation of
U U

V V
- 66 -
A A

B disclosure. B

C C
120. In Counsel’s submissions, item 7 was explained to be a
D broader catch-all designed: D

E “to require production of any internal communications that E


directly or indirectly reveal the contents of the communications
between Mr D and the Commission about his being given
F immunity, and about what he will say when called as a F
witness”.27
G G

Provided it is so limited to the contents of the communications with Mr. D,


H H
it seems to me this residual sub-category of documents (if in existence)
I may be disclosable. I

J J
XI. Residual prayer of summons
K K
121. In addition to the various specific classes of documents
L discussed above, §1(d) of the summons asks for a list of “all other L

documents in relation to these proceedings which have not been disclosed


M M
by the Applicant to date”. This seems to me to add nothing to the
N obligation accepted by the Commission from the outset. SiS sought this N

order because (it alleged) there were shortcomings in the Commission’s


O O
discharge of its discovery obligations which led to doubts as to whether it
P had carried out a proper discovery exercise. P

Q Q
122. In my view, while the position taken by the Commission on
R discovery has not entirely been accepted by this Tribunal, the differences R

are disagreements in opinion which in no way cast doubt on the good faith
S S
of the Commission. Having regard to the nature of what was disclosed in
T T
27
SiS’s skeleton submissions §151.
U U

V V
- 67 -
A A

B the supplemental lists, I do not think they in any way show that the B

Commission has taken a cavalier or obstructive approach to disclosure.


C C
Accordingly, I do not think this repetitive order is called for.
D D

XII. Itemisation of documents


E E

123. By CTR r 24, RHC O 24 r 5 expressly applies to the discovery


F F
of documents in proceedings in the Tribunal. R 5(1) and (2) provide:
G G
“(1) A list of documents made in compliance with rule 2 or
with an order under rule 3 must be in Form No. 26 in
H Appendix A, and must enumerate the documents in a convenient H
order and as shortly as possible but describing each of them or,
in the case of bundles of documents of the same nature, each
I I
bundle, sufficiently to enable it to be identified.

J (2) If it is desired to claim that any documents are privileged J


from production, the claim must be made in the list of documents
with a sufficient statement of the grounds of the privilege.”
K K

L
124. In the case of Classes 1, 4, 5 and 6 (see §13 above), the L
production of which was opposed by the Commission, it can be seen that
M M
the documents have been described as a class. SiS submitted that the

N proper approach was to list and identify each document individually, with N

the originator specified, and with parts redacted (as appropriate) stating the
O O
grounds of objection to disclosure of each part.
P P
125. While O 24 r 5(1) requires that the list “must enumerate the
Q Q
documents … describing each of them”, it is the long established practice,

R based on authorities, that in the case of documents for which privilege is R

claimed, it is not required to list them individually; it is “permissible to


S S
give a compendious description by type or category, so long as it is possible
T to identify them, … provided that the ground of privilege and the facts T

giving rise to the claim for privilege are clearly stated”: Re Kong Wah
U U

V V
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A A

B Holdings Ltd (in compulsory liquidation) (No 4) [2007] 5 HKC 202, citing B

Ventouris v Mountain [1990] 3 All ER 157, 160g and Derby & Co Ltd v
C C
Weldon (No 7) [1990] 3 All ER 161, 178j. As stated in the commentaries
D in Hong Kong Civil Procedure 2018, §24/5/4 (said in Re Kong Wah D

Holdings Ltd at p 201C to be an accurate summary), it is not required that


E E
the dates of the documents should be specified nor the names of the makers.
F “ ‘Correspondence between the (defendant) and his solicitors for the F

purpose of obtaining legal advice’ is sufficient”. There was nothing in the


G G
context to indicate that the direction given for discovery (see §9 above)
H was intended to depart fundamentally from this established practice. H

I I
126. In Kong Wah Holdings Ltd itself, Kwan J (as she then was)
J directed the respondent to provide “a list of the documents being withheld J

from production on the grounds of legal professional privilege, detailing


K K
the date of the particular document, the author, the addressee, a brief
L description of its nature (without disclosing its contents) and the ground of L

privilege relied upon” (see §§42, 72). However, that case was concerned
M M
not with discovery of documents but with an order for production of
N documents made under s 221 of the then Companies Ordinance (Cap 32)28. N

O
No valid reason has been identified for the Tribunal to depart from the O
practice of the High Court so far as discovery is concerned.
P P

127. Public interest immunity seems to me to stand on a different


Q Q
footing, at any rate where immunity is claimed by content not by class. To
R R
make a proper claim for immunity, it would be incumbent on the

S
Commission to specify the document and state the grounds on which it is S
said immunity exists in as much detail as possible (except perhaps where
T T
28
Now s 286B of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32)
U U

V V
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A A

B to do so would itself undermine or defeat the privilege). B

C C
XIII. Conclusion and orders
D D
128. In broad summary, my conclusions are that:
E E
(1) Class 1 documents are covered by informer privilege and
F
without prejudice privilege and Class 5 documents are F
covered by without prejudice privilege. They do not have to
G be produced. G

H (2) Class 3 — the original complaint form — is ordinarily H


protected by informer privilege but should be disclosed in this
I case within the confidentiality ring because the identity of the I

complainant has already been disclosed and deployed in the


J J
Commission’s case (with the inferred consent of the
K Complainant). K

(3) Class 6 documents cannot as a whole be said to be irrelevant


L L
simply because they were internal. Instead, relevance has to
M be judged by content. Nor are Class 6 documents protected M

by public interest immunity as a single class of internal


N N
documents. Even based on their division into 5 sub-classes in
O
the Chairperson’s certificate, the class formulations seem too O
wide. It is likely that two narrower types of documents,
P ie (without trying to define them) (i) reports to and minutes of P

the Commission concerning the results of the investigation


Q Q
and the enforcement steps to be taken, and (ii) certain internal
R communications and notes relating to the execution of the R
search warrants showing the methods, procedures and tactics
S S
of the Commission, would be covered by public interest
immunity, but immunity for the rest of Class 6, if claimed,
T T
would have to be justified by content following the proper
U U

V V
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A A

B B
procedures.

C (4) As for Mr D documents, the two intermediate drafts of the C


statement made between 31 December 2016 and 8 February
D D
2017 — which fall within item 1 — should be disclosed. The
Commission should review and clarify whether there are
E E
documents including internal documents that respond to
F items 2, 3, 4 and 7 (as explained in §120 above). Documents F

within item 5 should be disclosed insofar they contain the


G G
relay of information to the Commission on 15 December 2016.
H Item 6 would not be ordered. H

(5) No order need be made for a list of other documents not yet
I I
disclosed.
J (6) Where privilege is claimed by the Commission (except J

documents for which public interest immunity is claimed by


K K
content), it is permissible for it to describe the documents
L compendiously in the conventional way without listing each L
and every document individually.
M M

129. The orders of the Tribunal are therefore:


N N

(1) The Applicant do within 14 days from the date hereof file and
O O
serve on the 3rd Respondent a list of documents (“List”), such
P List to include: P

(a) all documents under Class 3 and all documents passing


Q Q
between the Applicant and “other parties” under Class 4
R in Part 2 of Schedule 1 to the List of Documents of the R

Applicant dated 23 June 2017;


S S
(b) all documents under Class 6 in Part 2 of Schedule 1 to
T the Supplemental List of Documents of the Applicant T

U U

V V
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A A

B B
dated 31 August 2017, such list to include (without
limitation) (i) the 2 drafts of the statement referred to in
C C
paragraph 12b of the 2nd Affidavit of Stephen Joseph
D Ryan filed on 7 December 2017; (ii) any documents D

falling within items 2, 3, 4 and 7 of the Schedule to the


E E
3rd Respondent’s summons; and (iii) any documents
F
relaying information to the Commission as envisaged in F
the file note of the meeting held on 14 December 2016
G (item 114 of the List of Documents of the Applicant G

dated 23 June 2017).


H H
(2) The Applicant do at the same time as the List is filed, file and
I serve an affidavit verifying the List, setting out (if applicable) I

its claim for public interest immunity in respect of any


J J
documents.
K (3) The 3rd Respondent be at liberty to serve a written notice on K

the Applicant to request for inspection or copies of any of the


L L
documents in the List within 3 working days after service
M thereof. M

(4) Subject to any privilege or immunity claimed, the Applicant


N N
do allow inspection or provide the copies requested by the
O 3rd Respondent within 4 working days of the service of such O

notice. In the case of Class 3 in Part 2 of Schedule 1 to the


P P
List of Documents of the Applicant dated 23 June 2017, the
Q
document shall be made available only to the Confidentiality Q
Ring Members established pursuant to the Order of the
R Tribunal dated 26 May 2017. R

S (5) There be liberty to apply. S

T 130. On the question of costs, failing agreement, SiS should lodge T

U U

V V
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A A

B brief written submissions within 21 days, followed by the Commission B

within 14 days thereafter.


C C

D D

E E

(Godfrey Lam)
F Judge of the Court of First Instance, High Court F

President of the Competition Tribunal


G G

H Mr Johnny Mok SC and Ms Catrina Lam, instructed by Winston & Strawn, H


for the Applicant
I I
Mr Gerard McCoy SC and Mr Timothy Parker, instructed by Norton Rose
J
Fulbright Hong Kong, for the 3rd Respondent J

K K

L L

M M

N N

O O

P P

Q Q

R R

S S

T T

U U

V V