Gunning, Patrick --- "Cases & complaints" [1998] PrivLawPRpr 8; (1998) 4(7) Privacy Law & Policy Reporter 134

Cases & complaints

Bank of Credit and Commerce International (Overseas) Ltd (in liq) v Price Waterhouse

High Court of England — Chancery Division

Laddie J, 23 May 1997 (reported at [1997] 4 All ER 781)

Bank customer information – whether received under or for the purposes of an Act — meaning of ‘disclose’

BCCI carried on a worldwide banking business before becoming insolvent. The liquidators of BCCI sued BCCI’s auditors for negligence. The auditors were in possession of documents arising out of the relationship between BCCI and the Bank of England. Some of these documents contained references to the affairs of BCCI’s customers. Section 82 of the English Banking Act 1987 made it a criminal offence for a person who received information relating to the business or other affairs of any person under or for the purposes of the Act to disclose that information without the consent of the person to whom it relates and (if different) the person from whom it was received. A question arose whether the auditors were prevented from giving discovery of these documents by virtue of s 82.

Held

1. The purpose of s 82 was to protect the interest of anyone whose business or affairs were disclosed to the Bank of England in the course of exercising its regulatory powers or to a third party (such as an auditor) for onward transmission to the Bank of England. It followed that, unless one of the exceptions applied, if any party to the litigation has received information relating to the business or other affairs of any person (including a customer of BCCI) under or for the purposes of the Banking Act, he committed a criminal offence if, without that person’s consent, he disclosed it to a third party: Melton Medes Ltd v Securities and Investments Board [1995] Ch 137, considered.
2. In determining whether information was received for the purposes of the Banking Act, it is the recipient’s intention or understanding of the purposes at the time of receipt which is relevant. Because s 82 provides for a strict liability offence, where, at the time of receipt, the recipient anticipates that the information would be relevant to and used for non-Banking Act purposes and he receives it with that use in mind, it will not contravene s 82 to disclose that information, even if at the same time the recipient also anticipates that it is relevant to and to be used for Banking Act purposes.
3. A person only ‘discloses’ information to another person when the recipient was previously unaware of that information: Attorney-General v Associated Newspapers Ltd [1994] UKHL 1; [1994] 2 AC 238, followed.

Comment

In Australia there are many instances of obligations of confidence imposed on regulators similar to s 82 of the English Banking Act. Some statutes, notably Pt 13 of the Telecommunications Act 1997 (Cth) (for discussion see (1997) 4 PLPR 105), clearly apply to information held by non-government bodies. The approach taken by Laddie J to interpreting such offences (particularly in relation to dual purposes) is likely to prove influential in Australia. The clarification of the meaning of ‘disclose’ will be critical for prosecutions of these offences (in that it will result in an obligation on the prosecution to prove a negative, namely that the recipient was not previously in possession of the relevant information) and has wider implications for information law generally.

Patrick Gunning,

Mallesons Stephens Jaques.