Debtor-Creditor

In the case of Foley v Hill, for money owed and received, a customer filed a lawsuit against
his banker. The customer claimed that the relationship between the principal and the agent
was fiduciary. As a result, he has the right to know how his money was handled by the banker
and what gains were made from its use. He claimed that a banker is a trustee, and that the
statute of limitations would not apply to him. The court dismissed the customer's claims,
stating that the relationship between a banker and a customer is that of a debtor and creditor.
If the money is in the banker's possession, he is free to do whatever he wants with it.
In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The allegation had not been barred by law,
according to the Court of Appeal. According to Bankes LJ, it would have appeared ridiculous
for a customer to have to apply for a loan cancellation. The debt was not due and payable
unless a customer requested compensation from the bank, so it could not be barred by
restriction.
In Proven Development Sdn. Bhd. v Hongkong & Shanghai Banking Corporation, the
plaintiff had a current account at the defendant bank. One of the plaintiff company's directors
gave a verbal instruction to the defendant bank to debit some funds from its account. Plaintiff
claimed that the debit was not authorised and filed a lawsuit against the defendant. The
defendant bank, on the other hand, stated that the oral instructions were approved by the
bank's directors, but that the bank was unable to deliver the same due to the passage of time.
The court held that it was the customer's responsibility to notify the bank of any irregularities
in the company's account as soon as they were discovered. The company failed to notify the
bank of the irregularity and had to wait 9 years before filing a lawsuit. They couldn't do
anything because of the statute of limitations.
In the case of Bank Pertanian Malaysia Bhd. v Mohd. Gazzali Ismail, the bank attempted to
impose a sale of the protection after a default on a housing loan. The issue of whether the
argument was time-barred arose. The court ruled that where the loan had express terms, they
must apply. It was a contractual requirement that a demand be made, and time started to tick
away from that date and the failure to pay it.
In the case of Standard Chartered Bank v Tiong Ngit Ting, the respondent claimed an
amount of RM10,000 plus interest from a purported fixed deposit with the appellant bank.
The appellant claimed that no deposit had been recorded in the ledger, and the letter sent to
the respondent was not a certificate of fixed deposit. The letter of receipt for RM10,000 did
not contain information such as the rate of interest or the deposit duration, according to the
High Court. As a result, it wasn't a fixed deposit, but rather a current account deposit pays in
slip. To bind the parties in the arrangement, a fixed account must have fixed terms between
the depositor and the bank. Period of deposit and rate of interest returnable are two elements
to include in a fixed deposit arrangement.
In the case of R v Davenport, larceny was prosecuted against a person who had wrongly
withdrawn money from another person's bank account. The court ruled that the charge should
not be made because the money belonged to the bank, not the client. He merely debited the
account holder's account; however, he may be charged with fraudulent check conversion.
In the case of Agip (Africa) Ltd. v Jackson & Ors., Mr Zdiri, an employee of Agip Ltd,
changed the name on a $518,000 payment order to Baker Oil Services Ltd, a puppet operated
by Mr Jackson and other accountants who carried out clients' orders. The funds were moved
from Tunisia's Banque du Sud to Baker Oil's Lloyds Bank account in London. The remaining
$43,000 was then billed to unidentified parties. Mr. Jackson was sued by Agip Ltd for the
return of the money. The court ruled that a consumer whose funds were wrongfully drained
using forged orders has the right to recover the funds from the people whose accounts the
funds were transferred to.
In the case of Kehar Singh a/l Jasa Singh v Standard Chartered Bank, a stranger had
entered the bank and diverted the couple's attention by luring them to the ground in order to
collect money. The stranger grabbed the money on the counter and walked away while the
customers were busy. While the couple was a "walk-in" client, the court found that the bank
owed them a duty of care because they had signed a contract for the purchase of a bank
draught.
In the case of Balmoral Supermarket Ltd. v Bank of New Zealand, armed robbers stole
money from the plaintiff as he stood at the register, ready to hand it over to the cashier for
counting. It was decided by the courts that the bank was not responsible because the money's
title had not been transferred to it.
In the case of Chambers v Miller, a bank teller had charged a cheque drawn on insufficient
funds by mistake. Unfortunately, he had already moved the five-pound notes through the
window when he discovered them. The teller then continued to demand that the customer
return the money, but he declined. As a result, the teller falsely imprisoned the customer and
forcibly reclaimed the money. The teller was found to be responsible for conversion. A
compensation application should be filed in order to recover the funds.
Agent & Principal
In Westminster Bank Ltd v Hilton, the complainant sends a telegram to prevent a particular
cheque from being cashed. Plaintiff's account is also debited by the bank, which finances the
cheque. Even though it is known that a banker and customer relationship is one of debtor and
creditor, the court held that the drawing and payment of a customer's cheque against the
customer's money in the bank's custody often displays a principal and agent relationship.
Fiduciary
In the case of Barnes v Addy, William Crush, John Lugar, and John Addy were appointed
testators and executors in Henry Barnes' will. His money will be saved and then used to
provide a £100 annuity to his widow, Ann, and three daughters and son. The last remaining
trustee, John Addy, named a new trustee with an indemnity. Mr William Duffield, Addy's
solicitor, cautioned against naming a single trustee, but drew up the deeds of appointment and
indemnity, introduced him to a stockbroker, and the stockbroker transferred the trustee
money. This trustee misappropriated trust funds and went bankrupt. Addy and the solicitors
were sued by the children. The court held that the elements to be proven for a bank to be
liable as a constructive trustee is that the bank offered assistance by releasing the money;
secondly, the bank had actual or constructive knowledge; thirdly, there was dishonest and
fraudulent design or intention.
In the case of Lipkin Gorman v Karpnale Ltd.& Lloyds Bank plc., Cass was a partner at a
firm of solicitors that was the plaintiff. Cass was a compulsive gambler who, as a result, stole
money from the firm's bank account and used it to gamble at defendant's bar, losing a large
sum of money. The defendants appeared to be unwitting beneficiaries of the funds. The
plaintiff, on the other hand, argued that under equitable tracing laws, a criminal could not
transfer good title to stolen money under S.18 of the Gambling Act 1945. The plaintiff's
claim that the club had not provided valuable consideration was upheld by the Court. The
innocent person who received stolen money was only required to refund the owner if they
had not given it any thought. They were deemed to be the money's proactive trustees.
In the case of Baden v Societe Generale, the Luxembourg Mutual Investment Fund was
liquidated by Mr George Baden, Jacques Delvaus, and Ernest Lecuit. They alleged that
Societe Generale owed them $4 million in a trust account that it had set up for its client, the
Bahamas Commonwealth Bank Ltd. BCB instructed Societe Generale to move funds to
Banco Nacional de Panama, to a non-trust account under BCB's name. Baden then argued
that Societe Generale had acted as a constructive trustee and was thus liable. Societe
Generale was found not responsible because it had no idea of the fraud to which it
contributed. In this situation, there were five different mental states that could be used to
create positive trusteeship. Firstly, actual knowledge; secondly, wilfully shutting one’s eyes
to the obvious; thirdly, wilfully and recklessly failing to make such inquiries as an honest and
reasonable man would make; fourthly, knowledge of circumstances which would indicate the
facts to an honest and reasonable man; fifthly, knowledge of circumstances which would put
an honest reasonable man on inquiry. The fifth mental state can be seen in the case of
Belmont Finance Corporation, where the courts ruled that if all of the facts which make the
transaction unlawful were known to the parties, ignorance of the law will not excuse them.
In the case of Tan Kok Ming, Phillip v Royal Brunei Airlines, Borneo Leisure Tracel Sdn
Bhd has named Royal Brunei Airlines as its agent for booking passenger flights and cargo
transport in Sabah and Sarawak. Mr Tan, who is also the company's majority shareholder,
was the company's managing director. Royal Brunei's money was supposed to be deposited in
a separate trust. Mr Tan, on the other hand, who had experience and assistance, put the
money into his own company. The deal was terminated when the business refused to pay on
time, and Royal Brunei demanded the money back from Mr Tan. Mr Tan was found to be
liable as a constructive trustee because he was in the mindset of a deceptive assistant.
In the case of Re Montagu, the tenth Duke has appointed his trustees under a provision that
requires the trustees to make an inventory so that upon the death of the ninth Duke, all
chattels and articles will be granted to him. The trustees, on the other hand, had refused to
make an inventory of the chattels and had thus released them all to the tenth Duke. The
solicitor, however, was aware that the trustees had broken the clause and ordered that all
things be published to the tenth Duke. The eleventh Duke filed a constructive trustee suit
against the tenth Duke for failing to inventory the chattels and release them to the tenth Duke.
The court held that the tenth Duke has no knowledge that he was not entitled to the release of
chattels.
In the case of Eagle Trust plc. v SBC Securities Ltd., a financial adviser was sued for
negligence in selecting sub-underwriters. The court held that for It is sufficient to show that
the individual knew the funds paid to him were trust funds and misapplied them to create
"knowing receipt." Baden's categories 4 and 5 should not be applied to commercial
transactions because they enable parties to be overly suspicious.
In the case of Barlowe Clowes International Ltd. v Eurotrust International Ltd., Barlow
Clowes International Ltd was in the process of being liquidated. The company transferred
140 million pounds from investors to an Isle of Man company of which Mr Henwood was a
director. Mr Henwood had dishonestly aided in the dissipation of the investors' capital,
according to the liquidator of Barlow Clowes. The court held that Mr Henwood was found to
be liable for fraudulent assistance because an individual might know and believe money was
being misappropriated without knowing whether or not the money was kept on trust. He had
been told that Barlow Clowes' director had been misappropriating client funds, but no
investigations had been made.
In the case of T Sivam a/l Tharamalingam (sebagai wakil/ pentadbir kepada harta pusaka
mendiang Nagamuthu a/l Periasamy) v Public Bank Berhad, a parcel of land was
fraudulently sold to a third party, who then applied for a loan from PBB and used the land as
collateral. The loan papers were prepared by a solicitor who was involved in both the selling
and purchase of the property as well as the loan transaction. The issue was whether the
solicitor's prior or different transaction experience could be applied to Public Bank. The court
decided that a third party could not know if key details had been transferred to Public Bank
by the solicitor. Such sensitive information is considered to have passed for purposes of third-
party security. As a result, the solicitor's knowledge of the land title conflict is attributed to
Public Bank. The claim against the public bank was dropped.
Receipt
In the case of Agip (Africa) Ltd. v Jackson & Ors., Mr Zdiri, an employee of Agip Ltd,
changed the name on a $518,000 payment order to Baker Oil Services Ltd, a puppet operated
by Mr Jackson and other accountants who carried out clients' orders. The funds were moved
from Tunisia's Banque du Sud to Baker Oil's Lloyds Bank account in London. The remaining
$43,000 was then billed to unidentified parties. Mr. Jackson was sued by Agip Ltd for the
return of the money. The court ruled that a consumer whose funds were wrongfully drained
using forged orders has the right to recover the funds from the people whose accounts the
funds were transferred to.
Dishonest Assistance
In the case of Tan Kok Ming, Phillip v Royal Brunei Airlines, Borneo Leisure Tracel Sdn
Bhd has named Royal Brunei Airlines as its agent for booking passenger flights and cargo
transport in Sabah and Sarawak. Mr Tan, who is also the company's majority shareholder,
was the company's managing director. Royal Brunei's money was supposed to be deposited in
a separate trust. Mr Tan, on the other hand, who had experience and assistance, put the
money into his own company. The deal was terminated when the business refused to pay on
time, and Royal Brunei demanded the money back from Mr Tan. Mr Tan was found to be
liable as a constructive trustee because he was in the mindset of a deceptive assistant.
In the case of Brinks Ltd v Abu-Saleh, Mr Elcombe, Mrs Elcombe's husband, had been
engaged in money laundering. She had no idea that she would be accompanying him in his
money laundering activities. Brinks Ltd claimed she had dishonestly aided in the breach of
confidence dishonestly. Mrs. Elcombe was found by the court not to have aided her husband
because her presence was merely "in the power" of his wife rather than providing cover for
money laundering.
Banker’s Rights to Set-Off
In the case of Rahimah b Abd. V Bank Bumiputra M’sia Bhd, to receive an overdraft
facility given to Malrich Holdings, the plaintiff deposited RM300,000 in a fixed deposit with
the bank. The bank asserts its right under a letter of set-off signed by Rahimah if Malrich
defaults. The case revolved around whether a fixed deposit could be used as a legal protection
for an overdraft. The court decided that any money added to a customer's bank account
reflects the bank's indebtedness to the customer. In certain cases, the bank has a general lien
for all securities deposited with it. As a result, the bank was correct in putting the fixed
deposit up as collateral.
In the case of Eng Ah Mooi & Ors v OCBC Ltd, OCBC attempts to assert its lien on an
account but it was set aside by security. The court held that a right of lien is dependent on the
nature of the transaction. The bank could not use its right to set off because another account
the bank chose to exercise its lien on had a protection set aside for it.
Combination of Accounts
In the case of Garnett v Mc Kewan, Garnett had two accounts with the same bank, one in
credit and the other in debit, in two separate branches. The customer wrote a cheque, which
the bank declined to accept. The bank was only liable to the customer for the net sum after
the credit balance in one account was offset by the debit balance in the other, according to the
court. As a result, the Bank was under no obligation to honour the cheque.
In the case of Re K, the client had two accounts with the bank, two credit deposit accounts
and one overdraft account. A restraining order was imposed on the accounts after the client
was convicted of drug-related offences. The Bank requested a change in the order so that it
could merge the accounts. The bank must merge the accounts, according to the court, since it
was only performing an accounting process to calculate the sum of money on hand. It also
had the right to set off.
Limitations on Combinations
In the case of National Westminster Bank Ltd v Halesowen Presswork & Assemblies Ltd,
Halesowen Assembly & Pressworks Ltd was a small company based in Halesowen, West
Midlands. They had an account with National Westminster Bank which in February 1968 was
overdraw by £11,339. An agreement was reached whereby the bank account (which was to be
called the "No. 1 account") would be frozen, and a new account (the "No. On 20 May 1968
the company gave the bank notice of a meeting of creditors to be held on 12 June under
sections 294 and 295 of the Companies Act 1948. The bank did not rely on that notice as
constituting a material change of circumstances within the terms of their agreement. 2
account on 13 June and cleared on 14 June. In the liquidation, the bank claimed to be entitled
to set off the £8,611 against the company's indebtedness on the No. The liquidator did not
accept that the bank was entitled to set-off in this manner, and the liquidator (through the
company) brought an action against the bank. The court held that if there is an implied
agreement to keep the funds separate, the bank is not allowed the combine the accounts.
Honouring Customer’s Mandate
In the case of Young v Grote, a customer left his wife with blank signed checks and left. The
clerk filled out one for the partner, who was unfamiliar with business matters. It was then
filled out in such a way that the banker could increase the sum to be paid fraudulently. The
customer's "gross negligence" estopped him from demanding the money back, according to
the court, and he was responsible for his own negligence. This case demonstrates that it is the
customer's responsibility to carefully write checks in order to avoid fraud.
In the case of London Joint Stock Bank v Macmillan, the clerk's job was to fill out checks
and show them to the partners for signature. One of these checks had been signed by a
partner, and it only had the numbers “2.0.0” written on it. The clerk changed the number to
“120.0” and added the words “one hundred twenty pounds.” The cheque was later presented
and cashed. The company was found to have been negligent and was barred from suing the
bank. Customers' instructions must be followed by the bank. As a result, it is the customer's
duty to draw cheque with fair caution.
Reliance on bank’s expert advice
In the case of Woods v Martin Bank Ltd & Anor, the equity places an obligation on a bank
not to give a customer an unfair advantage. Plaintiff, a bank customer with no prior
investment experience, sought investment advice. The defendant's bank manager told him to
invest in a business that had an undisclosed large overdraft with the bank. The manager was
advising the claimant in a role where there was a conflict of duty and interest that was not
reported to the claimant, so the court found that there was a fiduciary relationship.
In the case of Barclays v Svizera Holdings and Maneesh Pharmaceuticals, the claimant,
Barclays Bank, served as an agent and offshore security trustee for a group of lenders. A
facility agreement allowed the Syndicate to lend 45 million dollars to Svizera Holdings BV.
The First Defendant's parent company, Maneesh Pharmaceuticals Limited, served as
guarantor under the Facility Agreement. The plaintiff served a claim on the second defendant
after the first defendant defaulted under the facility agreement. The second defendant, on the
other hand, had failed to meet the demand, prompting the plaintiff to file a lawsuit for more
than 35 million dollars. The defendant countered that the plaintiff said it could and would
secure a USD currency swap for the first defendant at ordinary commercial rates. As a result,
the plaintiff owed the defendants a fiduciary obligation by giving negligent counsel,
according to the claimant. The complainant had not made any representations to the
defendants for the currency exchange, according to the court. Furthermore, the claim that a
bank owes a fiduciary obligation is invalid since the true essence of the relationship is a
contractual one. Any fiduciary responsibility or advisory relationship between the parties was
specifically excluded from the agreement.
In Grant Estates Ltd v RBS, Grant Estates is a property firm that entered into a swap deal
with RBS, the defendant, to lower the interest rate on the firm's 777,000-pound borrowings.
Unfortunately, interest rates had dropped significantly by the time the agreement was signed.
The plaintiff was forced to file for bankruptcy due to the cost of paying interest rates. The
plaintiff claimed that they were given financial advice that interest rates were likely to rise
and that this would protect the business. They had taken action based on the bank's advice.
However, before entering into the arrangement, the plaintiff signed a waiver specifying that
they would not receive advice and would not depend on any advice, which the court held
effectively barring them from claiming that the bank had breached its advisory obligation.
In the case of Abdul Rahim Abdul Hamid & Ors v. Perdana Merchant Bankers Bhd & Ors,
it was an appeal to overturn the appointment of the Receiver and Manager (R&M) for the
appellant in a company's liquidation on the grounds that PMBB was to blame for the
appellant's financial difficulties. The main issue was whether PMBB, in executing an order to
transfer money, had done so in an unauthorized manner. When the Facility Agreement was
signed, PMBB arbitrarily amended clause 5(e) to release the funds in one payment rather than
the two payments that had been settled upon previously. When the appellants signed the
agreement, they were not aware of this material update. The court ruled that when PMBB
arbitrarily amended a material contractual term without consulting the Respondents, there
was a violation of duty of care. The R&M's appointment was overturned because the
appellants' financial difficulties were exacerbated by PMBB, who did not benefit from their
wrongdoing.
Duty to honour Cheques
In the case of Joachimson v Swiss Bank Corporation, the plaintiff was a partner in a
partnership that attempted to dissolve it and demanded recovery of funds deposited in the
bank. The bank declined to pay the plaintiff for two reasons: first, the partnership had made
no previous requests for recovery of the funds; and second, the right to repayment had
already been barred by the statute of limitations. The allegation had not been barred by law,
according to the Court of Appeal. According to Lord Atkin, the duty is promise to repay at
the branch where the account is kept during banking hours repay any part upon the written
order of the customer to the bank. The above is subject to the implied terms that the cheque is
properly drawn account has sufficient credit to pay the entire amount no legal cause such as
Garnishment which makes the credit amount unavailable.
In the case of Rolin v Steward, the court held that a banker could be held liable for
substantial damages if he dishonoured a customer's acceptance and cheques when he had
ample assets in his possession at the time to satisfy them. This is because businesses rely
heavily on the security of their image to ensure uninterrupted operations. Despite the fact that
a banker-customer partnership is contractual in nature, a tort suit may be brought for the
violation of his legal right arising from the contract.
In the case of Gibbons v Westminster Bank, the court held that if the individual is not a
dealer, special harm incurred by the bank wrongfully dishonouring the customer's cheque,
which is a legal loss to his credit, must be shown.
In the case of Sim v Stretch, for a brief period of time, the claimant had a housemaid, who
then re-entered the defendant's service. The defendant gave the complainant the following
telegram upon the maid's arrival, “E. has resumed her service with us today. Please send her
possessions and the money you borrowed, also her wages to […]” The court held that a
client, whether a trader or not, can bring a defamation suit for libel for unfair cheque
dishonour and the resulting loss of reputation.
In the case of Exporaya Sdn Bhd v Public Bank Berhad and Another, the case involved a
defendant, a business with a current account with the respondent bank. Since the director had
resigned, the respondent had adjusted the mandate or signatories to manage the bank account,
withdrawing one existing signatory and adding two new signatories. The bank, on the other
hand, had received complaint letters requesting that the signatories be held and not issued to
new signatories. As a result, the bank account had been frozen. When this happened, three of
the respondent's checks were refused by the bank, with the phrase "pending confirmation"
written on them. The respondent claimed that the words "pending confirmation" were
defamatory and constituted libel. Although the appellants argued that the account freezing
was not only legal, but also necessary in their situations.
The court held that, the relationship between a bank and its customer is contractual in nature
and premised on a debtor-creditor relationship. The bank has an obligation to honour the
customer’s mandate regarding the payment of money from the customer’s account. The
bank’s duty to pay on demand of an account co-existed with a duty to take reasonable care in
all the circumstances as agent of the account holder. However, the duty should not be overly
burdensome. The standard of reasonable care and skill to be exercised by a bank towards its
customer is an objective standard. The bank is not entitled to ignore evidence or information
showing that the customer is being defrauded. The bank's duty of care does not require it to
do anything other than to honour the mandate in the absence of circumstances which put the
bank on enquiry when the bank approved the respondent's application to change signatories
to operate its account, there was no "abnormality" or "irregularity" detected. The appellant
bank was duty bound to honour the customer’s instruction, in the absence of notice of fraud
or other irregularity. When it was put on inquiry. The bank had to freeze the account pending
further inquiry. It was plainly not practical to give prior notification. The words "Pending
Confirmation" did not disparage the respondent's reputation.
In the case of CIMB Islamic Bank Bhd v. Mohd Saufi Taib & Ors., the plaintiffs were
partners in a firm of solicitors, and the defendant was a bank. Customers who had a current
account with the defendant are the victims. The plaintiffs had deposited four checks into the
defendant's bank accounts. The complainant then gave a new check to the defendant, which
was returned due to the defendant's comment "refer to drawer." The appellants claimed that
the words "refer to drawer" were used in a defamatory and malicious manner.
The court held that the relationship between a bank and its customer is that of principal and
agent. The bank's obligation to honour its customer's payment order is subject to certain
qualifications, inter alia, that the customer must have sufficient funds to enable the bank to
effect payment of the entire sum as at the date on which the bank is obliged to effect
payment. The defendant owed the duty of care to manage the account of the plaintiffs
reasonably and diligently. The failure on the part of the defendant to credit the payment of the
EON Bank cheques within three working days was clear negligence and breach of duty. The
contention that the delay was due to the CTCS problem was rejected because such problem
was the defendant's internal management problem. The action against the defendant was the
negligence of the defendant in the failure to credit the payment in time. The fault on the part
of the defendant to credit the cheques within three or four working days where the said
account appeared to lack sufficient funds and the publication of the remarks 'refer to drawer'
was not malice that negated the defence of a qualified privilege. Therefore, there was no libel
in the remarks. The plaintiffs were traders and not merely an ordinary individual and were
therefore entitled for reasonable damages for injury to their reputation. Reasonable and fair
general damages was RM15,000.
Duty of Confidentiality and Secrecy
In the case of Tournier v National Provincial & Union Bank of England, the plaintiff's
details had been retrieved from the drawer of a cheque written in his favour, which the Bank
had revealed to the plaintiff's employer. The plaintiff's employer did not renew the plaintiff's
employment contract after receiving this detail. As a result, the plaintiff filed a lawsuit
against the bank for breach of contract. The court held that the customer's right to
confidentiality and privacy is a legal right that is eligible rather than absolute. The obligation
of confidentiality extends not only to the actual state of the customer's account, but also to the
information derived from it. This refers to any details gathered from sources other than the
customer's actual account. Confidentiality was an implicit concept in the customer's contract,
and any violation could result in negligence liability if there was a loss.
In the case of Pharaon & Ors. V Bank of Credit & Commerce International SA, BCCI
made loans to a number of companies and purportedly took a fee over the funds in the bank
accounts these companies had with BCCI as collateral in exchange for the loans. The court
decided that a banker's duty of confidentiality does not apply when fraud is suspected and a
document is necessary to promote private international litigation. This is due to the fact that it
is in the public interest.
In the case of Barclays Bank plc v Taylor, under section 9 of the Police and Criminal
Evidence Act 1984, the bank received notice from the police that they intended to apply for
an access order against the defendant's accounts (one of which was a joint account with the
defendant's wife) (PACE). The police notice specifically instructed the bank not to notify the
defendant about the ongoing application. The defendant (or his wife) were not notified of the
notice by the bank. When the PACE orders were issued, the bank made full disclosure to the
police in order to comply with the order. The defendant denied guilt but counterclaimed,
claiming the bank had breached its duty of confidentiality and other implied contractual
responsibilities resulting from the banker-customer relationship. The court held that a bank
has no obligation to oppose a court order for disclosure, but it does have a responsibility to
make fair attempts to notify its customers about the order.
In the case of Maurice Robertson v Canadian Imperial Bank of Commerce, a bank is
obligated to follow a subpoena whether or not a client gave permission. The court held that
the duty to the court took precedence over the duty of confidentiality.
In the case of Sunderland v Barclays Bank Ltd, the bank had to defend a breach of duty of
confidentiality suit brought against it by one of its clients, and it did so on the grounds that
she had impliedly consented to it revealing her affairs to her husband over the phone. The
bank had dishonoured cheques drawn on the account and was attempting to explain why it
had refused to grant Mrs. Sunderland an authorised overdraft during the phone call. The court
held that since it was irrational for the bank to provide overdraft facilities to the plaintiff
because of her rampant gambling, the bank implied a consent to share details about its
customers. Furthermore, since there was a private assault on the bank's credibility, the bank
was justified in disclosing this knowledge to her husband. This case demonstrates that
consent can be inferred from customer’s conduct.
In the case of Tan Lay Soon v Kam Mah Theatre Sdn Bhd, on the supposed arrangement to
sell some land from the defendant to the plaintiff, the plaintiff filed a claim for clear
execution of a contract. The intervener had paid the estate, but the plaintiff had ordered a
caveat over it. The defendant, on the other hand, argued that if the injunction was issued, the
intervener would have revealed his details, which would be a violation of BAFIA S.97. The
intervener had revealed the defendant's account since it had already started proceedings and
issued an order for the selling of the property. The intervener's disclosure of the information
was illegal because it had not received explicit or implied consent.
In the case of AG of Hong Kong v Lorrain Esme Osman & Ors and AG of Hong Kong v
Zauyah Wan Chik & Ors and another appeal, it was about the lack of extraterritorial effect
of BAFIA S.97. Officers of Bank Bumiputera Malaysia Bhd were the applicants. They sought
orders to ensure that their disclosure would not violate the confidentiality obligations
imposed by BAFIA Section 97. The court ruled that the law would not apply if it was made
outside of Malaysia because it had no extraterritorial effect.
In the case of Wako Merchant Bank (Singapore) Ltd v Lim Lean Heng & Ors, Mareva
injunction was sought by the plaintiff in many bank accounts. This was accomplished by a
private investigator hired by the plaintiff discovering the bank account's data. The defendants
argued that the information was inadmissible because it was obtained in violation of BAFIA
Section 97. The principle of unclean hands, however, was not held to be a bar to the argument
in this case. It was claimed that the Parliament had not discussed the admissibility of
evidence obtained under S.97 of the BAFIA, and that making the evidence inadmissible
would entail an explicit provision by the Parliament. The evidence was admissible in court
because the complainant had come to court with a legitimate Mareva injunction, despite the
fact that it was an offence under BAFIA S.97.
In the case of Hj Salleh Hj Janan v Financial Information Services Sdn. Bhd., Affin ACF
Finance Bhd received reports from Financial Information Services Sdn Bhd that the plaintiff
had been bankrupt twice. FIS, on the other hand, failed to mention that the two adjudication
orders had been rescinded, prompting a libel suit against the company. The defendant was
found not liable for defamation because it only restated material that was already public
knowledge.