Professional Documents
Culture Documents
B CTEA 1/2017 B
C [2018] HKCT 1 C
BETWEEN
G G
O O
Before: Hon G. Lam J, President of the Competition Tribunal in Chambers
_______________
R R
DECISION
S _______________ S
T T
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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
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A A
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
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
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.
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A A
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
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A A
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
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
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A A
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,
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
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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
(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
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
V V
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A A
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
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
V V
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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
M (c) the balance between the interests of the parties and other M
persons; and
P This rule makes clear that discovery is in the discretion of the Tribunal, to P
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
(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
T 2
S 122. T
3
S 126(1)(c) and (d).
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A A
which
C C
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
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
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
V V
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A A
A. Scope
J J
V V
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A A
B. Leniency Policy
E E
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
(s 130(a)).
I I
O O
32. The principal features of the Leniency Policy include the
P following: P
V V
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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
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
V V
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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
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.
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A A
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
V V
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A A
D
…… D
H D. Informer privilege H
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
O 36. SiS has not contended that the privilege does not apply to O
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
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A A
R … R
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A A
B 38. The “innocence at stake” exception (as it has been called) was B
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
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
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.
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A A
B E. International practice B
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
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.
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A A
B 42. The footnote to the text marked with an asterisk above states: B
E E
43. While it is stated in §7.8 of Applications for Leniency and
F No-Action in Cartel Cases that: F
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
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A A
B damages under the Trade Practices Act 1974 (Cth). Visy was joined by B
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
V V
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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
V V
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A A
G “(a) the fact that the protected cartel information was given G
to the Commission in confidence;
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.
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A A
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
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
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A A
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
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
Tribunal.
N N
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
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A A
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
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
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
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A A
B all relevant material to mount its defence. This in my view applies with B
disclosed.
F F
(2) Further, the Commission has reviewed the documents and
G confirmed that none of the documents falling with Class 1 G
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
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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
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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
they might be used against them is beside the point: per Lord Hope in
I I
20
Ofulue at §9.
J J
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
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A A
[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
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
S
connected with the same subject matter: see Rush & Tompkins Ltd v S
Greater London Council [1989] AC 1280, 1301.
T T
U U
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A A
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
K
parties to make use of it for their own purposes is too fine to offer any K
comfort.
L L
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
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A A
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
U U
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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
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
V V
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A A
(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
V V
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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
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
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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
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
O
proceedings. O
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
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A A
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
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
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
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A A
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
V V
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A A
B B
4 respondents).
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
V V
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A A
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
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
informer privilege does not apply to this class of documents. It is, however,
U U
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A A
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
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
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
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
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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
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
T T
78. The same approach is adopted by the Competition and
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A A
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
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
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
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A A
Their disclosure would be quite unnecessary for the fair disposal of the
E E
proceedings.
F F
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
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
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A A
B the possibility that its internal documents become relevant and potentially B
disclosable.
C C
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
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
V V
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A A
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
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
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A A
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
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
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A A
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
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
and incomplete nature, created for the use of staff in discharge of their
S S
duties.
T T
V V
- 53 -
A A
B real risk that the staff responsible for the investigation would be inhibited B
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
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A A
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
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
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
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A A
B consist, for example, of some of the substantive reports made by the staff B
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
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A A
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
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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
conclusions.
O O
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
U U
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A A
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
L
4. Attendance notes of the telephone discussions on L
9 December and 16 December 2016
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
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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
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
U U
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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
U U
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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
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
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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
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
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
V V
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A A
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
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
U U
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A A
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
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
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
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
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A A
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
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
V V
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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
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
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
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A A
B the supplemental lists, I do not think they in any way show that the B
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,
giving rise to the claim for privilege are clearly stated”: Re Kong Wah
U U
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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
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
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
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
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A A
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
V V
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A A
B B
procedures.
(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
(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
U U
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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
U U
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A A
D D
E E
(Godfrey Lam)
F Judge of the Court of First Instance, High Court F
K K
L L
M M
N N
O O
P P
Q Q
R R
S S
T T
U U
V V