B.C. Supreme Court Justice Anne MacKenzie has ruled the prosecution properly asserted legal privilege to protect the identity of a confidential informant in the B.C. Rail corruption trial.

The justice conducted an in-camera hearing yesterday, sanctioned by the Supreme Court of Canada, at which defence attorneys, the three accused and the public were banned.

After reviewing Crown concerns, MacKenzie said special prosecutor Bill Berardino had acted appropriately.

The previous trial judge, Justice Elizabeth Bennett, who was replaced after being appointed to the B.C. Court of Appeal, initially said the defence could attend the closed-door hearing. But the prosecution balked and appealed all the way to the country's highest court, saying it would consider staying the charges rather than reveal the confidential informant's identity.

The Supreme Court reversed Bennett's decision Nov. 19 and said the defence should be excluded from the hearing to examine the reasons for the secrecy.

MacKenzie now is reviewing more than 400 documents that are part of the investigation to ensure they were properly edited to protect police sources without keeping relevant evidence from the defence. She will continue resolving such pre-trial issues at the hearing today and next month, forestalling the start of the actual trial until at least February.

Dave Basi, a former senior aide to the finance minister, and Bob Virk, an aide to the transportation minister, are accused of fraud, breach of trust and accepting benefits in connection with the auction for B.C. Rail assets in 2004.