In the recent case of Super Worth International Ltd & Ors v Commissioner of the ICAC & another (CACV 168/2015), the Hong Kong Court of Appeal (the "Court") adopted the UK Supreme Court's reasoning in R (on the application of Prudential plc and another) v Special Commissioner of Income Tax and another [2013] UKSC 1, and held that legal advice privilege ("LAP"), a limb of legal professional privilege ("LPP"), does not extend to legal advice given by non-lawyers such as accountants.

The Court also considered conflict of laws issues that arise in the privilege context, and the scope of the crime/fraud exception to LPP.

Our earlier blog post on the Prudential case can be found here.


The Plaintiffs were subjects of an ICAC investigation, following which they were all charged with conspiracy to defraud in inducing a Hong Kong-listed company to acquire certain farms in New Zealand.

The Plaintiffs sought to establish that certain documents seized in the course of the investigation were protected by LPP. The Court of First Instance ("CFI") rejected the claim, finding a strong prime facie case that the documents concerned were for the purpose of guiding or facilitating the commission of criminal offences, and hence fell under the crime/fraud exception to LPP.


Two of the Plaintiffs appealed to the Court, specifically in relation to the following two documents (the "Documents"):

  • an email in which the Plaintiffs' New Zealand solicitor forwarded an email he had received from an employee of an accounting firm in relation to the movement of funds between various companies involved in the allegedly fraudulent transactions. Instructions were being sought to allow issues of New Zealand Goods and Services Tax to be considered; and
  • a draft fax created by a partner/employee in the accounting firm giving consideration to issues of New Zealand Goods and Services Tax. The fax was addressed to the New Zealand Inland Revenue Department. It also refers to the movement of funds surrounding the various companies involved in the allegedly fraudulent transactions.

The issues before the Court were:

  1. Whether the lex fori (law of the place where the proceedings were being heard, i.e. Hong Kong) or lex causae (law of the place where the advice was given, i.e. New Zealand) applied to determine the existence of privilege.
  2. Whether as a matter of Hong Kong common law, LAP should be extended to communications of legal advice between accountants and a client.
  3. Whether the crime/fraud exception applied to the Documents.

The Appellants contended that the applicable law was the lex causae (i.e. New Zealand law). Alternatively, if Hong Kong law applied, the Documents, despite being prepared by accountants, were nonetheless covered by LAP.  The Appellants also contended that the crime/fraud exception did not apply, contrary to the CFI's findings. The Appellants hence claimed that the Documents were protected by LAP.

The Court's ruling

The Court (Vice-President Lam and Justices of Appeal Barma and Macrae) dismissed the appeal. However, in doing so, it overturned the CFI's decision that the crime/fraud exception applied. Contrary to the approach taken by the CFI, the Court determined the appeal primarily on the 2nd issue, and on the fact that the Documents did not contain or relate to the seeking of legal advice.

(1)  Lex fori or lex causae?

The Court found this issue to be academic, as there is in fact no material difference between New Zealand law and Hong Kong law on LPP. Both jurisdictions limit LAP to communications between clients and qualified legal practitioners. The CA found the Appellants' reliance on a statutory right of non-disclosure in New Zealand misconceived, as it only provides for the non-disclosure of tax advice by a tax adviser to the New Zealand Inland Revenue Department and does not extend generally to communications of tax law advice in ordinary civil proceedings.

The Court nonetheless held that the lex fori applies in determining the existence of LPP. LPP does not stem from the expectation of confidentiality of a client in respect of the communication with his advisers. It is instead justified by the public interest in the promotion of the rule of law. Different jurisdictions have different rules on the scope of LPP, reflecting differences in the assessment by domestic courts or legislatures on the necessary extent of the privilege for the promotion of the rule of law in the particular jurisdiction in question. Any conflicts of laws should therefore be resolved in favour of the law of the jurisdiction in which the proceedings are heard, in this case, Hong Kong law.

(2)  Does LAP cover legal advice given by accountants?

In deciding this issue, the Court followed the majority view in Prudential, despite the powerful dissenting judgements by Lords Sumption and Clarke in that case. The Court found that:

  • Extending the scope of LAP would cause uncertainty and confusion to a well-established principle. In particular, extending the ambit of advisers covered by LAP would leave the law in a state of real uncertainty, as it is not necessarily easy to define what constitutes a "profession" or "legal advice".
  • Extension of LAP to cover legal advice given by non-lawyer professionals involves questions of policy that are more appropriately considered by the legislature after appropriate public consultations, rather than by the courts on a case-by-case basis. The Court also noted that so far, there have not been any jurisdictions in which LAP has been extended by judicial decisions.
  • Section 39A(2) of the Legal Practitioners Ordinance (which provides that privilege exists between a foreign lawyer and his client to the same extent as it does between a solicitor and his client) seems to embody the legislature's assumption that LAP is limited to advice from qualified lawyers. This suggests that it would not be appropriate for the courts to take it upon themselves to extend the ambit of LAP beyond its commonly understood bounds.

Hence, to the extent that that the Documents contained legal advice, as such legal advice was given by accountants, no LAP could attach.

(3)  Did the crime/fraud exception apply?

The Court held that the crime/fraud exception should be construed narrowly. On the facts, the Court disagreed with the CFI's view that there was a strong prima facie case of fraud. The Court found no clear evidence that the contents of the documents had any relation to fraud and money-laundering charges.

This conclusion did not assist the appellants. Looking at how the Documents came into being, the Court held that they did not contain or relate to the seeking of legal advice. In particular, the Plaintiffs' solicitor acted merely as a conduit for enquiries between the accounting firm and the Plaintiffs. In any event, given the Court's answer to the 2nd issue, even if the Documents contained legal advice, they would still not be protected by LAP.


Although it remains to be seen whether there will be an appeal to the Court of Final Appeal, for the time being, Hong Kong law on LPP relating to legal advice given by non-lawyers mirrors the English position.

The decision also highlights LPP's roots in the public interest and the rule of law, and as such, acknowledges that the legislature is better-placed than the courts in attempting to define its scope.

On the other hand, the Court's ruling that the lex fori applies in determining the existence of privilege is unsurprising, and reflects the traditional view taken in numerous English and Hong Kong authorities.

Practically, clients should be mindful that communications with non-lawyer professionals (such as tax advisers) are likely to be discoverable in litigation or investigations, regardless of whether they contain legal advice. They must therefore be cautious in deciding what to include in such communications. Close involvement of qualified lawyers in any communications where legal advice is being sought or given is the only sure way to attract protection of LAP.