In 2014, the law of privilege was considered from various angles, with the year closing on a Court  of Final Appeal decision emphasising the primacy of legal professional privilege ("LPP") as an  absolute right guaranteed by the Basic Law of Hong Kong.

While the cases outlined below generally provide comfort that the law of privilege in Hong Kong  holds strong, we offer a few practical points to help safeguard the privilege of legal advice:

  • be aware of whom you show your legal advice to, both inside and outside of your organisation;  not everyone in your organisation will be considered the "client" for the purposes of LPP.
  • be aware of long tails of emails; when sharing any communications from your lawyer, ensure  that you are not inadvertently sharing inappropriately.
  • involve lawyers at the beginning so that privilege is on the agenda at an early stage.

The Court of Final Appeal

In Secretary for Justice v Florence Tsang Chiu Wing1, the CFA reversed the decision of the Court of  Appeal, which had released a party to litigation from her implied undertaking not to use documents  obtained by discovery for a purpose outside of the proceedings in which they were disclosed.  The  CFA held that to do so would amount to side-stepping the right to protection of LPP.

The application related to the extraneous use of documents obtained through the discovery process  in matrimonial proceedings.  The husband asserted that the documents were privileged.  At first  instance, the court ruled that privilege did not apply since the documents involved the commission  of a crime and granted a third party, the Secretary for Justice ("SJ"), access to the documents.   On appeal, the Court of Appeal overruled the order granting access and required the SJ to establish  the crime exception independently.  However, the Court of Appeal also released the wife from her  implied undertaking to only use the documents for the proceedings in which they were disclosed,  which effectively allowed her to hand over the documents to the SJ.

The CFA reversed the order releasing the wife from her implied undertaking.  The protection of LPP should not be side-stepped.  LPP is an absolute right  enshrined in the Basic Law.

While the Court has an inherent jurisdiction to grant or restrict access to any document used in  proceedings, the Court's discretion is subject to privilege, which is absolute.  Legal professional  privilege is not subject to any balancing exercise between competing interests of open justice or  harming legitimate interests.

Inadvertent waiver of privilege

In Chinachem Financial Services Ltd v Century Venture Holdings2, the Court of First Instance  refused to find that LPP had been waived impliedly, where a document had inadvertently found its way into the possession of the other party.

The court looked at several English decisions and found that in contrast to the approaches taken in  Australia and the US, the test in English law was based neither on general principles of fairness  nor on relevance. Although relevance was a necessary precondition for disclosure, it was not  sufficient for a finding of waiver. Under English law, there is no general implied waiver of  privileged material merely because a state of mind or certain actions are in issue; the court will  only find a waiver if the party deploys the contents of the legal advice in the litigation.

The Court rejected the Australian approach and adopted the English position in order to avoid any  inroad into the right of legal professional privilege in Hong Kong. The importance of privilege  could be seen in Article 35 of the Basic Law. Moreover, privilege had long been recognised by the  Hong Kong Courts as a fundamental human right3 , the waiver of which would not be lightly inferred.

Developments in English law

In a contrasting decision, in Rawlinson and Hunter Trustees, Vincent Tchenguiz and others v  Director of Serious Fraud4, the English Court of Appeal considered itself bound to apply established principles summarised in Al Fayed v Commissioner of Police for the Metropolis5, that if documents are inadvertently allowed to be  inspected by the other party, in general it will be too late to claim privilege and seek an injunction. Where justice required, for example where there was fraud or where the documents have  been made available as a result of an obvious mistake, the courts could intervene. However, on the  facts of the case, the documents were found not to have been made available as the result of an  'obvious mistake'.

The English Court applied the principles on legal professional privilege from Al Fayed because it  considered itself bound by the decision. However, Longmore LJ suggested, obiter, that if the UK  Supreme Court were to be presented with another case where privileged documents had been  inadvertently disclosed, they should find instead that the courts should ordinarily permit the  correction of such a mistake and order the return of the documents.

Back to Hong Kong

While in Chinachem, the Hong Kong Court chose to follow the English position, the hard-line  approach taken in Tchenguiz is unlikely to be followed in Hong Kong, where our Courts appear to  afford greater protection to privilege, in line with the obiter approach recommended by Longmore  LJ.

In Citic Pacific,6 a 2012 Court of Appeal case establishing that Hong Kong law recognised a partial  waiver of privilege, the court preferred not to follow English authority on the point of whether  inadvertent disclosure is admissible once in the hands of the prosecution. Instead, the Court of  Appeal turned to a New Zealand decision, B v Auckland District Society7, in considering that privilege is not to  be balanced against competing public interests no matter how compelling they may be, and is not lost unless there is evidence it has been intentionally waived by the holder of  the privilege.

Auckland District Society was also cited with approval by the CFA in Florence Tsang Chiu Wing,  quoting Lord Millett's feline metaphor in relation to losing LPP because of "letting the cat out of  the bag",

"… The policy which protected them from unauthorised disclosure is the same. The cat is still a  cat.  It can be put back in the bag."

E-discovery and Privilege

It is worth noting that the new Practice Direction on electronic discovery (PDSL1.2) contains  clause C.6 which states that parties undergoing electronic discovery should endeavour to 

agree that discovery is undertaken without prejudice to the entitlement to subsequently claim privilege over any inadvertently disclosed information.  This  retention of privilege is in-line with the current Hong Kong position regarding inadvertently disclosed documents.

Takeaway Points

While the doctrine of legal professional privilege is still absolute in Hong Kong, one must take  care with one's privileged information to ensure that it remains so.

Please download our simple user guide to retaining privilege: Ten Rules for Retaining Privilege.