ARTICLES
applying either the “officious bystander”19 or “business efficacy”20 tests.21 Conversely, terms are only implied in law “where ‘necessary’ to the particular type of contract or relationship”22 without inference to the parties’ objective intentions.23 In this author’s view, the duty of confidentiality is one which is implied by law in the bankercustomer contract. This is because such a term is implied given the nature of the bankercustomer relationship, not the specific intention of the parties, embodied in the contract and its terms. The ambiguity in the legal bases for the implication of the duty of confidentiality in bank-customer contracts has led to controversies concerning the proper scope of the duty and the Tournier qualifications. 2. Lacunae in the Qualifications A bank’s duty of confidentiality is a qualified, not absolute, not absolute duty.24 Where a Tournier qualification applies, the bank is under no duty of confidentiality.25 However, the scope of these qualifications is often unclear. Earlier decisions suggest that “necessity, not reasonableness” governs the implication of
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the actual intention of parties: Equitable Life Assurance Society v Hyman [2002] 1 AC 408, per Lord Steyn, at 459. 19 Shirlaw v Southern Founderies (1927) Ltd [1939] 2 KB 206, per MacKinnon LJ, at 227. 20 The Moorcock (1889) 4 PD 64 (CA). 21 Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another (“Marks and Spencer”) [2015] UKSC 72, [2016] AC 742, per Lord Neuberger of Abbotsbury, at [21]; Attorney General of Belize v Belize Telecom Ltd (“Belize”) [2009] 1 WLR 1988, per Lord Hoffmann, at [27]. 22 Burrows (n 18) 94 (emphasis added); Treitel (n 16) paras 6-043 to 6-047; Liverpool CC v Irwin [1977] AC 239 (HL); Scally v Southern Health and Social Services Board (“Scally”) [1992] 1 AC 294, at 302 (“the search, based on wider considerations, for a term which the law will imply as a necessary incident of a definable category of contractual relationship”, emphasis added) (HL); Mahmud v Bank of Credit and Commerce International SA [1998] AC 20 (HL), per Lord Steyn, at 45 (a “standardised term implied by law”, emphasis added). 23 Treitel (n 16) para 6-044. 24 Tournier (n 3), per Bankes LJ, at 472-3; and per Atkin LJ, at 484; See also, Robertson v Canadian Imperial Banking Corpn [1994] 1 WLR 1493 (PC); Lipkin Gorman v Karpnale Ltd [1989] 1 WLR 1340 (CA); Turner v Royal Bank of Scotland (n 16). 25 Barclays Bank plc v Taylor [1989] 1 WLR 1066, per Lord Donaldson of Lymington MR, at 1074; El Jahwary v Bank of Credit and Commerce International SA [1993] BCLC 396, per Sir Donald Nicholls V-C, at 400; Hood (n 3) para 2.15.
terms in law.26 However, terms are implied in law “based on wider policy grounds”.27 Dyson LJ held the implied term must be fair, reasonable and balance competing policy considerations.28 Thus, the considerations of “justice and policy” are the contemporary requirements for contractual terms to be implied in law.29 These considerations of “justice and policy” in turn affect the scope of the Tournier qualifications. a. Legal Compulsion Bankers may be required by statute or a court order to disclose a customer’s information.30 Parties cannot contract out of their duty “to comply with the law of the land”.31 However, several questions linger about the scope of this qualification. Where a banker is unable to contact their customer about a legally compelled disclosure, is he under an implied obligation to inform the court? Courts have not hitherto held that banks are required to do so.32 Banks will also have to beware that information which is not subject of the proceedings should remain confidential.33 Further, it is also unclear if the bank should obtain a customer’s approval before the disclosure.34 Thus, in this author’s view, this 26 Scally (n 21), at 307; Cf Tai Hing Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80, at 104-5; Spring v Guardian Insurance Plc [1995] 2 AC 296, at 339 and 354; Reid v Rush & Tompkins Group Plc (n 17), at 220. 27 Burrows (n 18) 94; Shell UK Ltd v Lostock Garage Ltd (n 17), per Lord Denning MR, at 1196. 28 Crossley v Faithful & Gould Holdings Ltd [2004] EWCA Civ 293, [2004] 4 All ER 447, per Dyson LJ, at [36]; See also, E Peden, ‘Policy concerns behind implication of terms in law’ (2001) 117 LQR 459. 29 The Star Texas [1993] 2 Lloyd’s Rep 445, at 491; Crossley v Faithful & Gould Holdings Ltd (n 28), per Dyson LJ, at [36]; Treitel (n 16), para 6-045. 30 Hood (n 3) para 2.29 to 2.31. 31 Parry-Jones v Law Society of England and Wales [1969] 1 Ch 1, per Diplock LJ, at 9 (CA). 32 Robertson v Canadian Imperial Bank of Commerce [1994] 1 WLR 1493, per Lord Nolan, at 1499-1500 (PC). 33 Hood (n 3) para 2.33; Robertson v Canadian Imperial Bank of Commerce (n 32), per Lord Nolan, at 1499; Pharaon v Bank of Credit and Commerce International SA (in liq) [1998] 4 All ER 455, per Rattee J, at 465-6. 34 Robertson v Canadian Imperial Bank of Commerce (n 32),