Tournier v. Nat'l Prov. & Union Bank of England

[1924]		461
1 K.B.

[IN THE COURT OF APPEAL.]

TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND.

1923 Nov. 9, 12; Dec. 17.

BANKES, SCRUTTON, and ATKIN L.JJ.

Banking - Banker and Customer - Implied Contract between - Obligation of Secrecy - Limitations of.

It is an implied term of the contract between a banker and his customer that the banker will not divulge to third persons, without the consent of the customer express or implied, either the state of the customer's account, or any of his transactions with the bank, or any information relating to the customer acquired through the keeping of his account, unless the banker is compelled to do so by order of a Court, or the circumstances give rise to a public duty of disclosure, or the protection of the banker's own interests requires it.

The plaintiff was a customer of the defendant bank. A cheque was drawn by another customer of the defendants in favour of the plaintiff, who instead of paying it in to his own account indorsed it to a third person who had an account at another bank. On the return of the cheque to the defendants their manager inquired of the last named bank who the person was to whom it had been paid, and was told it was a bookmaker. That information the defendants disclosed to third persons:-

Held (by Bankes and Atkin L.JJ.), that that disclosure constituted a breach of the defendants' duty to the plaintiff, for though the information was acquired not through the plaintiff's account but through that of the drawer of the cheque, it was acquired by the defendants during the currency of the plaintiff's account and in their character as bankers.

By Scrutton L.J., contra, that although the disclosure was a breach of the defendants' duty to the drawer, it was not a breach of their duty to the plaintiff.

APPEAL of the plaintiff from a verdict and judgment in favour of the defendants at the trial before Avory J. and a jury.

The plaintiff was a customer of the Moorgate Street branch of the defendants' bank, and in March, 1922, his account was overdrawn to the amount of 9l. 8s. 6d. The defendants pressed him to pay off the overdraft, and in April, 1922, he entered into an arrangement with them to pay off 1l. a week commencing on April 17. He paid three instalments, and then ceased to make any further payments. On June 8, 1922, he entered the service of a company called Kenyon & Co. under an agreement for a three months' employment as traveller and

[1924]		462
1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)

salesman. Shortly afterwards a cheque for 45l. was drawn in his favour by a company called Woldingham Traders, Ld., who were also customers of the same branch of the defendants' bank, but the plaintiff did not pay that cheque into his account. The cheque was eventually returned to the defendants for payment by the London City and Midland Bank. The manager of the defendants' Moorgate Street branch, a Mr. Fennell, then inquired of the London City and Midland Bank who their customer was for whom payment of the cheque had been collected, and was told he was a bookmaker of the name of Lloyd. Mr. Fennell then rang up Kenyon & Co. on the telephone and had a conversation with two directors of that company, a Mr. Wells and a Mr. Kenyon. He asked for the plaintiff's private address, and told them that the plaintiff was indebted to the bank, and that though several letters had been written to him he had not replied. Mr. Fennell, according to his own evidence, added: "Tournier must be getting money from somewhere or other; I have seen a cheque coming through the bank payable to Tournier and have been informed that one cheque has gone to the credit of a bookmaker's account, and if that is the case he ought to pay the bank off some of his debt." In consequence of that communication Kenyon & Co. refused to renew the plaintiff's employment when the three months' agreement expired.

The plaintiff brought this action (1.) for slander, and (2.) for breach of an implied contract that the defendants would not disclose to third persons the state of the plaintiff's account or any transactions relating thereto. The slander alleged was twofold: it was alleged in para. 2 that Mr. Fennell said over the telephone to Mr. Wells, "I am afraid that Mr. Tournier is engaged with bookmakers, as we have been able to trace a cheque or cheques passing from Mr. Tournier's account to bookmakers"; and in para. 3 that he said to the other director, Mr. Kenyon, "Tournier's account is overdrawn, and various promises made by him to give the matter his attention have not been fulfilled, cheques passed through Tournier's account were for betting men, and we think that

[1924]		463
1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)

Tournier is betting heavily"; the innuendo being that the plaintiff was an undesirable person to be employed by Kenyon & Co. and a person not fit to conduct their business or to be entrusted with money. At the trial the actual words proved in evidence were slightly different from those above set out in the statement of claim, and also from the evidence of Mr. Fennell. According to Mr. Wells' evidence the words spoken to him were, "As we have been able to trace a cheque or cheques to a bookmaker we are afraid he is mixed up with bookmakers." Mr. Kenyon said that the words spoken to him were, "He has made various promises to look into the matter and has not done so, and various cheques going through Tournier's account were going to betting men." On the second head of claim, that for breach of an implied contract of secrecy, the obligation claimed was alleged to be an absolute obligation unqualified by any exceptions. It appeared that in the pass books issued by the defendants to their customers, including the pass book of the plaintiff, there was on the first page a statement that "The officers of the Bank are bound to secrecy as regards the transactions of its customers."

Avory J. left the following questions to the jury:-

1. Were the words complained of in para. 2 or para 3 of the statement of claim spoken by Mr. Fennell? Answer No. The plaintiff's counsel had asked the judge to add to the question the words, "or words to the like effect," but the judge had refused.

2. If so, were such words defamatory of the plaintiff, that is, were they calculated to expose him to hatred, ridicule, or contempt in the mind of a reasonable man? Answer No.

3. Has the plaintiff suffered actual damage by the speaking of such words? Answer No. On this head the evidence was that business was not brisk and that Kenyon & Co. would probably have declined to renew the plaintiff's employment in any case.

4. Was Mr. Fennell actuated by malice in speaking the words, that is, was he acting from any indirect motive other than a desire to do his duty? Answer No.

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5. Was the communication with regard to the plaintiff's account at the bank made on a reasonable and proper occasion? Answer Yes.

6. What damages? None.

Judgment was thereupon entered for the defendants.

The plaintiffs appealed.

Sir H. Smith K.C. and Pitt for the appellant. The summing up of the learned judge was defective on both heads of the claim. On the claim for slander he omitted to ask the jury whether the words proved to have been spoken by Fennell were the same in substance as those pleaded in paras. 2 and 3 of the statement of claim, and though in actions for slander it was formerly essential to prove the actual words pleaded, that strict rule has been relaxed, and "for a long time it has been held to be enough to prove the substance of the words alleged in the declaration": per Lord Coleridge C.J. in Harris v. Warre. (1) He refused to ask the jury whether "words to the like effect" had been spoken by Fennell, although in Dalgleish v. Lowther (2) an interrogatory administered to the defendant in an action of slander asking whether he had spoken the words set out in the statement of claim "or words to that effect" was held by the Court of Appeal to be a proper interrogatory. On the claim for breach of the implied contract of secrecy also the summing up was defective, as the learned judge asked the jury the question whether the communication with regard to the plaintiff's account was made "on a reasonable and proper occasion," without giving them any direction as to the circumstances in which the occasion would be reasonable or proper. In Hardy v. Veasey (3) where the plaintiff, a customer of the defendants' bank, alleged in his amended declaration that the defendants had communicated the state of his account to a third person in breach of their implied promise not to disclose it "except on a reasonable and proper occasion," it is true that no direction was given by the trial judge as to

(1) (1879) 4 C. P. D. 125, 128.

(2) [1899] 2 Q. B. 590.

(3) (1868) L. R. 3 Ex. 107.

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what constituted a reasonable and proper occasion, and no objection was taken by the Court to that omission. But it was not necessary to do so. The plaintiff had overdrawn his account, and the third person to whom the defendants mentioned the fact was a moneylender from whom they tried to obtain assistance for the plaintiff, and the only question left to the jury was whether the communication to the moneylender was officious and unjustifiable, the judge telling them that if it was made with an honest intention of getting such assistance he doubted whether the action was maintainable. The jury having found for the defendants, the only objection taken to the summing up was that the latter statement was a misdirection. The Court held that it was not.

J. G. Hurst K.C. and Morle for the respondents. On the claim for slander the judge was right in refusing to add to the question left to the jury the words "or words to the like effect." "In libel and slander the very words complained of are the facts on which the action is grounded. It is not the fact of the defendant having used defamatory expressions, but the fact of his having used those defamatory expressions alleged, which is the fact on which the case depends": per Lord Coleridge C.J. in Harris v. Warre. (1) In that case a statement of claim, which alleged that the defendant had written letters to the chief constable charging the plaintiff with having been concerned in a murder, without setting out the actual contents of the letters, was held bad on demurrer. That case is quite consistent with Dalgleish v. Lowther. (2)In exhibiting interrogatories a plaintiff may ask: "Did you use [specific words] or words to that effect?" But a very different and much more strict standard is to be applied when it is a matter of correspondence between pleadings and proof. If the plaintiff's counsel intended to treat the words proved to have been spoken by Fennell as material he ought to have asked for an amendment of the claim, but he did not. In Ecklin v. Little (3) the words alleged in the statement of claim were: "I hear the plaintiff is a divorced man; you

(1) 4 C. P. D. 125, 128.

(2) [1899] 2 Q. B. 590.

(3) (1890) 6 Times L. R. 366.

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had better inquire." The words proved in evidence were such that the jury might infer that the defendant was asserting as a fact that the plaintiff had been divorced, and not merely that she had heard a rumour to that effect from third persons. Under those circumstances the Court held that the plaintiff could not rely on the words proved without an amendment.

With regard to the second head of the plaintiff's claim that there was a breach of the implied contract of secrecy it is to be observed that it has never yet been decided that the duty not to disclose the state of the customer's account is anything more than a moral one. In Hardy v. Veasey (1)the Court expressly said that it was not necessary for them to decide whether there was a contract or legal duty not to disclose; their decision was nothing more than that, if there was such a duty except on a reasonable and proper occasion, the circumstances of the case brought it within the exception. It is clear that a banker is compellable to disclose the state of the customer's account if ordered to do so by a judge: Loyd v. Freshfield. (2) It also seems clear that there are other exceptions than compulsion of law. In Tassell v. Cooper (3), a count which alleged that the plaintiff was a customer of the defendant bank and that it became the duty of the defendants not to disclose the particulars of the plaintiff's account without his authority except to persons presenting for payment cheques or bills drawn or accepted by the plaintiff, "unless compellable by due course of law so to do," was held bad. In Foster v. Bank of London (4)the holder of a bill of exchange for 532l. accepted by the plaintiff payable at the defendants' bank on presenting it for payment was told that the plaintiff's balance was not sufficient to meet it by 104l., whereupon the holder paid in 104l. to the plaintiff's account and obtained payment of the bill. In an action against the bank for disclosing the state of the plaintiff's account Erle C.J. left it as a question of fact to the jury whether there was such a duty, and the

(1) L. R. 3 Ex. 107.

(2) (1826) 2 C. & P. 325.

(3) (1850) 9 C. B. 509.

(4) (1862) 3 F. & F. 214.

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jury, having found that there was, gave the plaintiff a verdict for the amount at which his balance stood before the 104l. was paid in, apparently upon the ground that the act of the banker was in fraud of the plaintiff's other creditors: see per Martin B. in Hardy v. Veasey. (1) In the present case the plaintiff alleged the banker's duty of non-disclosure to be not merely a legal duty, but an absolute one without exceptions. All that Avory J. was called upon to do was to rule whether the duty as pleaded existed, and he was right in ruling that it did not. But even if the duty of non-disclosure is a legal duty, it is subject to the exception that the banker may do what is necessary for the protection of his own interests. Here the defendants were in the position of creditors trying to recover the balance of an overdraft. The state of the plaintiff's account was a matter in which they were interested. Their communication of it was on a privileged occasion, and there was no evidence of malice. The intimation that the plaintiff had been dealing with bookmakers was not a breach of the duty of non-disclosure at all, for it was based on facts which had no connection with his account, but which they had learnt from another source.

Cur. adv. vult.

Dec. 17. The following written judgments were delivered:-

BANKES L.J. In this appeal the plaintiff asks for a new trial on the ground of misdirection by the learned judge. The action was founded on statements alleged to have been made by an acting manager of a branch of the defendant bank. The plaintiff complained that the statements were slanderous, and further that they constituted a breach of the duty owed by the bank to him. The short facts leading up to the action were as follows: The plaintiff was a customer of the Finsbury Pavement branch of the defendant bank. In April, 1922, his account was overdrawn to a small amount, and on April 8 the plaintiff signed a document agreeing to pay off the debt by weekly instalments of 1l.

(1) L. R. 3 Ex. 107.

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Bankes L.J.

At the time this document was signed the plaintiff was about to enter the employ of a firm of Kenyon & Co., and on the document containing the agreement the plaintiff wrote their name and address. The plaintiff did not pay the weekly instalments as agreed. In July the acting manager of the branch, by name Fennell, got into telephonic communication with Kenyon & Co. for the purpose of ascertaining the plaintiff's private address. The inquiry led to further conversation with two directors of the company, one of the name of Wells, and the other of the name of Kenyon. The plaintiff's complaint in the action was that in the course of that conversation on the telephone Fennell had told Kenyon that the plaintiff's account was overdrawn, that various promises made by him to give the matter his attention had not been fulfilled, that cheques which passed through his account were for betting men, and that the bank thought that he was betting heavily. To Wells Fennell was alleged to have said that he was afraid that the plaintiff was engaged with bookmakers, as the bank had been able to trace a cheque or cheques passing from the plaintiff's account to bookmakers. The innuendo pleaded was that the words complained of meant and were understood to mean that the plaintiff was an undesirable person to be employed by Messrs. Kenyon & Co., and a person not fit to conduct their business or to be entrusted with money. Wells and Kenyon were called as witnesses for the plaintiff, and they deposed to a conversation with Fennell in the terms alleged in the statement of claim. So far therefore as the plaintiff's evidence was concerned there was no necessity for the judge to ask the jury any question other than the one which he did ask them, namely - whether the words complained of were spoken by Fennell. In order to contradict the plaintiff's version of the conversation Fennell was called for the defendants. His account of the conversation was that he rang up Messrs. Kenyon in order to ascertain what the plaintiff's private address was, and whether he was working on salary or commission. He was asked why he made the inquiry, and he then explained that the

[1924]		469
1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Bankes L.J.

plaintiff was indebted to the bank in a small amount, and that he had not replied to letters. He then went on to say that the plaintiff must be getting money from some source or other, that he had seen cheques coming through the bank payable to the plaintiff, and that he had made it his business to find out where one cheque had gone to, and that he had been informed that it had gone to the credit of a bookmaker's account, and that if that was the case he thought that the plaintiff ought to have paid off some of his debt to the bank. It was after and in consequence of this evidence by Fennell that the plaintiff's counsel pressed the learned judge to ask the jury whether the words complained of or words to a like effect had been proved, his object being obviously to obtain a verdict on Fennell's evidence if the jury accepted his version of the conversation in preference to that of Wells and Kenyon. The learned judge refused to adopt this course. The question on this part of the case is whether he was right in so deciding. The strictness of the old rule in reference to variance between proof and pleading in actions of libel and slander has long ago disappeared. It is still necessary to plead the exact language complained of, but proof of language substantially the same as that pleaded is admissible and should be submitted to the jury. Lord Coleridge C.J. states the present rule in Harris v. Warre (1) as follows: "In libel and slander everything may turn on the form of words, and in olden days plaintiffs constantly failed from small and even unimportant variance between the words of the libel or slander set out in the declaration and the proof of them. For a long time it has been held to be enough to prove the substance of the words alleged in the declaration, but if there was difference between both the form and substance of the words alleged, and of the words proved, the defendant was entitled to succeed. In libel and slander the very words complained of are the facts on which the action is grounded. It is not the fact of the defendant having used defamatory expressions, but the fact of his having used those defamatory

(1) 4 C. P. D. 125, 128.

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expressions alleged, which is the fact on which the case depends." There can be no question as to the difference in form between the rival accounts of the conversation. Do they differ in substance? Every case must depend upon its own circumstances, and no rule can be laid down as to what constitutes a substantial difference. In my opinion there was such a substantial difference between the rival accounts of the conversation that Fennell's version ought not to have been submitted to the jury as proof of the plaintiff's pleaded case without an amendment. Even if that view is not correct I do not think that the learned judge was wrong in refusing to add to his question "or words to the like effect." If Fennell's evidence was to be submitted to the jury at all in proof of the plaintiff's case it should have been done by a series of questions which would have made it quite clear to the jury that when they had to consider whether the words were defamatory they must consider that question in reference only to the version of the conversation which they accepted. I do not take the view that there was any material misdirection by the learned judge on this part of the case; though had the question depended upon whether the ancient definition of what constitutes a slander is sufficiently wide for a case like the present I should have hesitated before saying that it is. As the other members of the Court think that the order for a new trial should include both branches of the claim I do not differ from them, though I do adhere to my view that an amendment is necessary to enable the plaintiff to do what he attempted unsuccessfully to do at the trial.

The case with regard to the claim for damages for breach of duty raises a very important question, and one on which the learned judge did not, in my opinion, sufficiently direct the jury. The case for the plaintiff as alleged in the statement of claim was that the bank were absolutely pledged to secrecy in regard to the plaintiff's account and business, and all matters incidental thereto, and that it was an implied term of the contract between the plaintiff and the bank that they would not disclose to any one any of the plaintiff's business with the bank or matters arising therefrom, or the nature

[1924]		471
1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Bankes L.J.

or state of his account, or any transactions relating thereto. The learned judge very properly, in my opinion, ruled against the existence of any such absolute contract. The matter might have rested there. It did not do so, however, because in his summing up the learned judge did give a direction to the jury on the law on the point, and asked them a question with regard to it. The question was this: "Was the communication with regard to the plaintiff's account at the bank made on a reasonable and proper occasion?" and his direction on this point was as follows: "Fifthly, I shall have to ask, in view of the other claim for breach of contract, whether the communication of the state of the plaintiff's account at the bank, which was made to his employers, was, under the circumstances, made on a reasonable and proper occasion; that is to say, whether there was a reasonable justification for his making that communication? I shall hold, as a matter of law, that there is no such absolute contract as Sir Harold Smith has contended for between a banker and his customer. He has contended that there is an absolute contract that the banker shall not under any circumstances disclose the state of a customer's account to another person. I hold, as a matter of law, that there is no such absolute contract. But, if the banker has made that disclosure justifiably, that is to say, if, under the circumstances of the particular case, it was reasonable and proper that he should make the communication, then there is no breach of contract on his part." With all respect to the learned judge this is not a sufficient explanation of what is a difficult and hitherto only very partially investigated branch of the law. The judge no doubt took the form of the question from the case of Hardy v. Veasey (1), in which the judges raised, without deciding them, a number of questions in relation to the duty of banker towards customer not to disclose his affairs, and amongst others the question whether the duty was a legal or only a moral one, and if legal whether it arose out of contract or out of tort. At the present day I think it may be asserted with confidence that the duty is a

(1) L. R. 3 Ex. 107.

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legal one arising out of contract, and that the duty is not absolute but qualified. It is not possible to frame any exhaustive definition of the duty. The most that can be done is to classify the qualification, and to indicate its limits. For this purpose the case of Hardy v. Veasey (1) is of no assistance. The plaintiff in his amended declaration in that case set out a promise on the part of the bank not to disclose the state of his banking account except "on a reasonable and proper occasion." To this the defendants pleaded a denial, and leave and licence. The disclosure complained of was made to a moneylender, to whom the defendant's manager applied with a view of obtaining assistance for the plaintiff. The learned judge who tried the action stated that the question for the jury would be "Whether the communication to the moneylender of the state of the plaintiff's account was an officious and unjustifiable one?" and he added: "If it was made with reasonable hope and an honest intention of getting assistance for the plaintiff I should doubt whether the action is maintainable." The jury found for the defendants. The discussion in the Court of Exchequer took place upon an application for a new trial, and no decision was given except that there had been no misdirection and no wrong verdict. The plaintiff by his pleading had confined his complaint to a disclosure on some occasion other than a reasonable and proper occasion, and the Chief Baron in his judgment is only referring to the plaintiff's complaint when he uses those words. The question was never raised, whether it was a proper way of ascertaining what the defendants' duty was to ask a question of the jury in that form. Had that question been discussed, I cannot think that the Court would have approved of such a question, partly because it is leaving to the jury a question which is primarily a question for the judge, and partly because it leaves the jury entirely without instruction as to what the circumstances are which they are entitled to take into consideration in arriving at a conclusion as to what is reasonable and what is propel. In my opinion it is necessary in a case like the present to direct the jury what

(1) L. R. 3 Ex. 107.

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are the limits, and what are the qualifications of the contractual duty of secrecy implied in the relation of banker and customer. There appears to be no authority on the point. On principle I think that the qualifications can be classified under four heads: (a) Where disclosure is under compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of the bank require disclosure; (d) where the disclosure is made by the express or implied consent of the customer. An instance of the first class is the duty to obey an order under the Bankers' Books Evidence Act. Many instances of the second class might be given. They may be summed up in the language of Lord Finlay in Weld-Blundell v. Stephens (1), where he speaks of cases where a higher duty than the private duty is involved, as where "danger to the State or public duty may supersede the duty of the agent to his principal." A simple instance of the third class is where a bank issues a writ claiming payment of an overdraft stating on the face of the writ the amount of the overdraft. The familiar instance of the last class is where the customer authorizes a reference to his banker. It is more difficult to state what the limits of the duty are, either as to time or as to the nature of the disclosure. I certainly think that the duty does not cease the moment a customer closes his account. Information gained during the currency of the account remains confidential unless released under circumstances bringing the case within one of the classes of qualification I have already referred to. Again the confidence is not confined to the actual state of the customer's account. It extends to information derived from the account itself. A more doubtful question, but one vital to this case, is whether the confidence extends to information in reference to the customer and his affairs derived not from the customer's account but from other sources, as, for instance, from the account of another customer of the customer's bank.

It is very necessary to speak with caution on this question upon which there is no authority. I desire therefore to confine my observations to the facts of this particular case.

(1) [1920] A. C. 956, 965.

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The information which the branch manager is said to have disclosed, and which disclosure is said to have constituted a breach of duty, came to the bank in the following manner. A cheque was drawn by a customer of the bank on their Moorgate Street branch in favour of the plaintiff. The cheque was paid in to the account of a customer at the London City and Midland Bank. When the cheque came back to the Moorgate Street branch Mr. Fennell's attention was called to the fact that the plaintiff had not paid the cheque in to his account, and Mr. Fennell then made inquiries of the London City and Midland Bank, the reply to which he is said to have committed a breach of his duty in disclosing. The privilege of non-disclosure to which a client or a customer is entitled may vary according to the exact nature of the relationship between the client or the customer and the person on whom the duty rests. It need not be the same in the case of the counsel, the solicitor, the doctor, and the banker, though the underlying principle may be the same. The case of the banker and his customer appears to me to be one in which the confidential relationship between the parties is very marked. The credit of the customer depends very largely upon the strict observance of that confidence. I cannot think that the duty of non-disclosure is confined to information derived from the customer himself or from his account. To take a simple illustration. A police officer goes to a banker to make an inquiry about a customer of the bank. He goes to the bank, because he knows that the person about whom he wants information is a customer of the bank. The police officer is asked why he wants the information. He replies, because the customer is charged with a series of frauds. Is the banker entitled to publish that information? Surely not. He acquired the information in his character of banker. So in the present case Mr. Fennell was put upon inquiry by a cheque drawn in the plaintiff's favour upon a customer's account. He acquired the information which he is said to have divulged in his character as the plaintiff's banker. I use the expression "in the character of banker," because I find that expression

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used by Gurney B. in the case of Davies v. Waters (1), in which the question was raised whether a solicitor had acquired certain information as attorney for a client or as his trustee. In his judgment Gurney B. says this: "But the objection here goes further; for just an hour before the trial, being possessed of the deed, and possessed of it in the character of trustee, he takes it to the consultation, and there, in the character of attorney for the defendant, and for the express purpose of informing the minds of the counsel for the defendants, he reads the deed, and by that means acquires his knowledge of its contents. Can it be doubted that this is a knowledge acquired in the character of professional adviser of the party? If so, it is fit and proper that knowledge so acquired should be held sacred." Rolfe B. did not agree with this view of the facts, but I cite the passage because it introduces what is, I think, a convenient indication of the limits of professional or commercial privilege in relation to non-disclosure. In Taylor v. Blacklow (2) Vaughan J., in speaking of a violation by a solicitor of the professional privilege, speaks of it as a breach of a great moral duty, and he adds that "the law is never better employed than in enforcing the observance of moral duties." In the present case I think that the information obtained by Mr. Fennell as the result of his inquiry of the London City and Midland Bank was covered by the privilege of the customer, and that the bank are liable for any disclosure of that information which may have caused damage to the plaintiff unless the bank can bring the disclosure of the information so derived under one of the classified qualifications I have already referred to.

It follows from what I have said that in my opinion a direction to the jury in a case such as the present must inform the jury of the nature and limits and qualifications of the duty of the bank as a matter of law, leaving to them only questions for the purpose of ascertaining their view whether the communication complained of was or was not made, and whether it did or did not come within any of the protected occasions to which I have called attention. For these reasons

(1) (1842) 9 M. & W. 608, 613.

(2) (1836) 3 Bing. N. C. 235, 249.

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)

I consider that the appeal must be allowed with costs, the judgment entered for the defendants set aside, and a new trial ordered. The costs of the first trial to abide the event of the new trial.

SCRUTTON L.J. This application for a new trial raises questions of some general importance, though I can understand the jury who answered all questions against the plaintiff not taking a favourable view of his case. He had an account with the defendant bank which, in October, 1921, was overdrawn about 8l. He paid nothing in to this account until April, 1922, when, being pressed to pay his debt, he agreed to do so by weekly instalments of a pound. He paid three of these, but not punctually, and in July, 1922, had not paid for some time, his overdraft then being 6l. or so. Under these circumstances the bank manager found that cheques made payable to him were being paid to strangers at another bank, instead of being used to discharge his overdraft. He also found that one of these cheques came to the bank from the account of a betting man. He was naturally annoyed, and in endeavouring to obtain the private address of the plaintiff from his employers, he made statements, the exact terms of which were in dispute, about the state of the plaintiff's account, and the cheque coming from a bookmaker's account. On hearing of this the plaintiff brought an action against the bank (1.) for slander, alleging as special damage the loss of his situation, (2.) for breach of contract to keep his account secret. The two causes of action have different histories and arguments relating to them, and I deal with them separately.

As to slander, the plaintiff alleged two conversations, one with Wells, to whom Fennell is alleged to have said: "I am afraid that Mr. Tournier is engaged with bookmakers, as we have been able to trace a cheque or cheques passing from Mr. Tournier's account to bookmakers"; the other with Mr. Kenyon, to whom he is alleged to have said: "Tournier's account is overdrawn, and various promises made by him to give the matter his attention have not been fulfilled, cheques

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passed through Tournier's account were for betting men, and we think that Tournier is betting heavily." The witnesses gave evidence substantially as pleaded. The bank manager said he asked the plaintiff's employers for his private address, and whether he was paid by salary or commission, and on being asked why he wanted to know said that the plaintiff was slightly overdrawn, and had not answered the bank's letters, and as the manager had seen cheques payable to the plaintiff coming through another bank account, and found they came from a bookmaker's account, he thought the plaintiff ought to pay up. It will be seen he alleges that he said nothing about cheques passing from Tournier's account to bookmakers, or that Tournier was betting heavily; he did mention the overdraft, and that one cheque payable to Tournier had passed through a bookmaker's account. No application was made by the plaintiff to amend by relying on the words proved by the defendants, but when the judge proposed to ask the jury the question: "Were the words complained of in paragraph 2, or paragraph 3 of the claim, spoken by Mr. Fennell?" counsel asked him to add "or words to the like effect," which the judge refused. The jury found that the words alleged in the claim were not spoken. They went on to find that they, presumably the words alleged, were not defamatory. On this the judge had directed them that defamatory words were words tending to expose the plaintiff to "hatred, ridicule, and contempt" in the mind of a reasonable man. I do not myself think this ancient formula is sufficient in all cases, for words may damage the reputation of a man as a business man, which no one would connect with hatred, ridicule, or contempt. This misdirection is, however, not raised by the notice of appeal. The jury appear to have thought that to say that a man's account was overdrawn, and that he betted, was no reasonable cause for "hatred, ridicule, and contempt"; whether they would have thought such words damaging to the reputation of a business man I do not know. The more substantial matter is the refusal of the judge to add the words "to the like effect," and his failure to direct the jury that they should

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consider whether the words alleged, or a material and defamatory part of them, were in substance uttered. There is no doubt that precise words must be alleged in the statement of claim, and only a century ago the most minute variation in proof was ground for non-suiting the plaintiff. One who complained of the words: "This is my umbrella, and he stole it from my back door," and proved: "It is my umbrella, and he stole it from my back door" was nonsuited in 1819 by the full Court: Walters v. Mace (1), it being proved that the umbrella was not in the presence of the speaker, so that "This" referred to a present umbrella, and "It" to an absent one, a different thing. But I think modern practice is, as stated by Lord Coleridge in Harris v. Warre (2), that it is enough to prove the substance of the words alleged, or I would add, of a material and defamatory part of them. In the case of interrogatories the Court has decided that the defendant may be asked whether he spoke the words "or words to that effect," meaning, according to Sir Francis Jeune, "anything in substance like them," "words which, though not exactly the same, are to that effect." (3) So far as the words proved make a materially different allegation, amendment is necessary if that allegation is to be relied on; but in my view the jury should be directed that if they think the defendant used, in substance, the words, or a material and defamatory part of the words complained of, they should say so, and he is liable. I have no doubt that in this case part of the words alleged are materially different from the defendant's admission, but I think the jury should have been directed to consider whether or not part of the defendant's admission was a material and defamatory part of the words complained of. It is obvious, however, that if the claim for slander stood alone the statement about overdraft was justified, and the jury obviously did not think, and might reasonably not think, the statement about one cheque from a bookmaker's account defamatory. On this part of the case, if it stood alone, I should not be disposed

(1) (1819) 2 B. & Al. 756.

(2) 4 C. P. D. 125.

(3) Dalgleish v. Lowther [1899] 2 Q. B. 590.

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to order a new trial, though I think the summing up was defective.

The other cause of action is of far more public interest. The plaintiff alleged an absolute contract to be implied that the bank should not disclose the plaintiff's account or matters arising therefrom, or any transactions relating thereto, to anybody. The judge directed the jury there was no such absolute contract, and I think he was right. There is clearly no privilege to abstain from answering in a Court of justice questions as to a customer's account: Loyd v. Freshfield (1), per Abbott C.J.; and the bank can disclose the state of the account by bringing an action to recover overdraft.

The learned judge left to the jury the question: "Was the communication with regard to the plaintiff's account at the bank made on a reasonable and proper occasion?" I think he took these words from the judgments of Kelly C.B. and Martin B. in Hardy v. Veasey (2), though in that case the actual question left to the jury was: Was the communication "an officious and unjustifiable one?" But having read them the questions, the learned judge, by some unfortunate oversight, omitted to give the jury any direction as to the standard by which reasonableness and propriety were to be considered; indeed, as the jury had found that the words alleged by the plaintiff were not uttered, it is not clear to what communication the question and answer related.

It is curious that there is so little authority as to the duty to keep customers' or clients' affairs secret, either by banks, counsel, solicitors or doctors. The absence of authority appears to be greatly to the credit of English professional men, who have given so little excuse for its discussion. As to bankers, there is the ruling of Abbott C.J., already referred to, as to the duty to disclose in the law Courts; there is the opinion of two judges on demurrer in Tassell v. Cooper (3)in 1850, that a count that a bank had a duty not to disclose the state of a customer's account showed no cause of action; but here counsel, who was winning on another count,

(1) 2 C. & P. 325, 329.

(2) L. R. 3 Ex. 107.

(3) 9 C. B. 509.

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abandoned the count attacked (1); there is the fact that in 1862, in Foster v. Bank of London (2), Erle C.J. asked the jury whether it was the duty of the bank not to disclose to a person presenting a bill or cheque the exact state of a customer's account as contrasted with a statement of "not sufficient assets," and on their replying that the duty was as stated said "he knew of no law against that"; and lastly, the judgment in 1868 in Hardy v. Veasey (3) of the Court of Exchequer, that if there was a duty not to disclose the state of a customer's account it was subject to an exception in favour of disclosure reasonable and proper in the interests of the customer himself. It is to be noticed that in the last case the Court were under the impression that there was no reported case in which an action had been brought against a solicitor for disclosure of his client's affairs; they had not been referred to Taylor v. Blacklow (4), an action for such disclosure, where all the judges recognized such a duty, tracing it back to a passage in Comyn's Digest, tit. "Action on the Case for Deceit," A.5. (5) It might be possible to rest the duty on the express words in the bank's pass book: "The officers of the bank are bound to secrecy as regards the affairs of its customers," though even then exceptions must be introduced by implication. The contract is alleged in the claim as "implied," and according to the decision of this Court in In re Comptoir Commercial Anversois and Power (6), implied terms are a question of law for the Court, the jury finding such facts as are necessary or material to enable the Court to judge of the implication. The Court will only imply terms which must necessarily have been in the contemplation of the parties in making the contract. Applying this principle to such knowledge of life as a judge is allowed to have, I have no doubt that it is an implied term of a banker's contract with his customer that the banker shall not disclose the account, or transactions relating thereto, of his customer except in certain circumstances. This duty

(1) 9 C. B. 532.

(2) 3 F. & F. 214.

(3) L. R. 3 Ex. 107.

(4) 3 Bing. N. C. 235.

(5) 3 Bing. N. C. 248, 249.

(6) [1920] 1 K. B. 868.

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equally applies in certain other confidential relations, such as counsel or solicitor and client, or doctor and patient. The circumstances in which disclosure is allowed are sometimes difficult to state, especially in the case of a medical man; and I do not propose to do more than indicate the exceptions material to the present case. I think it is clear that the bank may disclose the customer's account and affairs to an extent reasonable and proper for its own protection, as in collecting or suing for an overdraft; or to an extent reasonable and proper for carrying on the business of the account, as in giving a reason for declining to honour cheques drawn or bills accepted by the customer, when there are insufficient assets; or when ordered to answer questions in the law Courts; or to prevent frauds or crimes. I doubt whether it is sufficient excuse for disclosure, in the absence of the customer's consent, that it was in the interests of the customer, where the customer can be consulted in reasonable time and his consent or dissent obtained. I think also, in accordance with well-known authorities on the duties and privileges of legal advisers, that the implied legal duty towards the customer to keep secret his affairs does not apply to knowledge which the bank acquires before the relation of banker and customer was in contemplation, or after it ceased; or to knowledge derived from other sources during the continuance of the relation. For instance, the banker hears from an entirely independent source that one of its customers has speculative dealings in oil, may it disclose that fact to another of its customers also interested in oil? As we have only to imply terms which the parties must necessarily have contemplated, how can it be said that it is a necessary term that the bank shall not talk about the customer at all, though the subject matter of its conversation is not derived from its dealings with the customer? This position would be the same as prevails in the case of legal advisers, as stated in Taylor on Evidence (1), and supported by the cases of Brown v. Foster (2); Griffith v. Davies (3), as to which see per Alderson B.

(1) 11th ed., 930, heads 2 to 5.

(2) (1857) 26 L. J. (Ex.) 249.

(3) (1833) 5 B. & Ad. 502.

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in Davies v. Waters (1); Lewis v. Pennington. (2) It appears to me, therefore, that we cannot imply an obligation to keep secret information about a customer derived not from that customer or his account, but from the account of another customer. The second customer may complain, but not the first. It is not possible to apply this rule to the facts of the present case so as to avoid a new trial, for we do not know what words were spoken, or how any statement about cheques for betting was mixed up with statements about overdraft. I hold therefore that if the bank knows something about customer A., through customer B.'s account, his duty not to disclose is one owing to customer B. and not to customer A.

None of these matters, or standards by which the propriety of disclosure should be judged, were explained to the jury, and it is obvious that some of them were very material to the facts of this case. What, if anything, was known or suspected about betting was known through the account of another customer, but the suggestion, if made, that the overdraft was due to betting, might be considered by the jury as the disclosure of the plaintiff's account, or might not. I think a new trial should be ordered of this issue, which is an important one; and as the treatment of the issue as to slander was not very satisfactory, I think the new trial should extend to the whole action, and I therefore do not comment further on the facts of the case. The plaintiff must have the costs of the appeal, and those of the first hearing should abide the event of the second hearing. The plaintiff must consider whether he should apply to amend.

ATKIN L.J. This is an action brought by the plaintiff against the defendant bank in respect of words spoken by the manager of a branch of the bank. The plaintiff alleges as causes of action: (A) slander; (B) breach of an implied contract not to divulge information concerning the plaintiff's transactions with the bank. The second point involves a question of considerable public importance, and I propose to consider it first.

(1) 9 M. & W. 608, 611.

(2) (1860) 29 L. J. (Ch.) 670.

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Atkin L.J.

In Joachimson v. Swiss Bank Corporation (1) this Court had to consider what were the terms of the contract made between banker and customer in the ordinary course of business when a current account is opened by the bank. All the members of the Court were of opinion that the contract included several implied terms, some of which were then stated, so far as was necessary for the determination of that case, which turned upon the necessity of a demand before the customer could sue the bank for the amount of his credit balance. It is now necessary to consider whether there is any, and if so what, implied term as to an obligation of secrecy on the part of the bank. The question of what terms are to be implied in a contract is a question of law: In re Comptoir Commercial Anversois and Power (2); and the rules by which the Court should be guided are contained in passages from the judgments of Lord Esher in Hamlyn v. Wood (3), and of Lord Watson in Dahl v. Nelson, Donkin & Co. (4), cited by Bankes L.J. (5) The principle is stated by Scrutton L.J. in words substantially to the same effect (6): "The Court," he says, "and not the jury, are the tribunal to find such a term; they ought not to imply a term merely because it would be a reasonable term to include if the parties had thought about the matter, or because one party, if he had thought about the matter, would not have made the contract unless the term was included; it must be such a necessary term that both parties must have intended that it should be a term of the contract, and have only not expressed it because its necessity was so obvious that it was taken for granted." Is there any term as to secrecy to be implied from the relation of banker and customer? I have myself no doubt that there is. Assuming that the test is rather stricter than Lord Watson would require, and is not merely what the parties, as fair and reasonable men, would presumably have agreed upon, but what the Court considers they must necessarily

(1) [1921] 3 K. B. 110.

(2) [1920] 1 K. B. 868.

(3) [1891] 2 Q. B. 488.

(4) (1881) 6 App. Cas. 38.

(5) [1920] 1 K. B. at pp. 886-7.

(6) Ibid. at pp. 899-900.

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Atkin L.J.

have agreed upon, it appears to me that some term as to secrecy must be implied. The bank find it necessary to bind their servants to secrecy; they communicate this fact to all their customers in their pass-book, and I am satisfied that if they had been asked whether they were under an obligation as to secrecy by a prospective customer, without hesitation they would say yes. The facts in this case as to the course of business of this bank do not appear to be in any degree unusual in general banking business. I come to the conclusion that one of the implied terms of the contract is that the bank enter into a qualified obligation with their customer to abstain from disclosing information as to his affairs without his consent. I am confirmed in this conclusion by the admission of counsel for the bank that they do, in fact, consider themselves under a legal obligation to maintain secrecy. Such an obligation could only arise under a contractual term.

The important point, and one which presents difficulties, is as to the extent of the obligation. The plaintiff's pleading alleged the obligation in wide terms as absolute and unconditional. The learned judge, as I think quite rightly, ruled that there was no such absolute duty, and the trial then proceeded without further amendment of the pleadings on the footing that the plaintiff relied on a breach of the true contract, whatever it was. The learned judge directed the jury: "If the banker has made the disclosure justifiably, that is to say, if, under the circumstances of the particular case, it was reasonable and proper that he should make the communication, then there is no breach of contract on his part." Without any further direction he left to the jury the question: "Was the communication with regard to the plaintiff's account at the bank made on a reasonable and proper occasion?" The direction and question appear to follow the direction to the jury given by Byles J. in Hardy v. Veasey (1), affirmed by the Court of Exchequer. I think that the decision in that case was based on the fact that the formula approved was that adopted by the plaintiff's counsel

(1) L. R. 3 Ex. 107.

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Atkin L.J.

in his pleading, and accepted by him as representing the true issue to be left to the jury. In fact, however, to leave to the jury what is "justifiable" or "proper" is merely to tell them that the bank may not divulge information except on occasions when they may divulge it, and that of what those occasions are the jury are the judges. This appears to me to treat as fact what is matter of law, and to afford no guidance to the jury, leaving the rights and duties as between customer and banker to vary with the individual views of juries in each case.

The first question is: To what information does the obligation of secrecy extend? It clearly goes beyond the state of the account, that is, whether there is a debit or a credit balance, and the amount of the balance. It must extend at least to all the transactions that go through the account, and to the securities, if any, given in respect of the account; and in respect of such matters it must, I think, extend beyond the period when the account is closed, or ceases to be an active account. It seems to me inconceivable that either party would contemplate that once the customer had closed his account the bank was to be at liberty to divulge as it pleased the particular transactions which it had conducted for the customer while he was such. I further think that the obligation extends to information obtained from other sources than the customer's actual account, if the occasion upon which the information was obtained arose out of the banking relations of the bank and its customers - for example, with a view to assisting the bank in conducting the customer's business, or in coming to decisions as to its treatment of its customers. Here, again, counsel for the bank admitted that the bank treated themselves as under such an obligation, and this, I think, would be in accordance with ordinary banking practice. In this case, however, I should not extend the obligation to information as to the customer obtained after he had ceased to be customer. Speaking for myself, I find little assistance from considering the implications that have been found by the Courts to arise from contracts in other occupations and

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Atkin L.J.

professions, such as those of solicitors or doctors. The limitation of the implied term must vary with the special circumstances peculiar to each class of occupation. On the other hand, it seems to me clear that there must be important limitations upon the obligation of the bank not to divulge such information as I have mentioned. It is plain that there is no privilege from disclosure enforced in the course of legal proceedings. But the bank is entitled to secure itself in respect of liabilities it incurs to the customer, or the customer to it, and in respect of liabilities to third parties in respect of the transactions it conducts for or with the customer. It is difficult to hit upon a formula which will define the maximum of the obligation which must necessarily be implied. But I think it safe to say that the obligation not to disclose information such as I have mentioned is subject to the qualification that the bank have the right to disclose such information when, and to the extent to which it is reasonably necessary for the protection of the bank's interests, either as against their customer or as against third parties in respect of transactions of the bank for or with their customer, or for protecting the bank, or persons interested, or the public, against fraud or crime. I have already stated the obligation as an obligation not to disclose without the customer's consent. It is an implied term, and may, therefore, be varied by express agreement. In any case the consent may be express or implied, and to the extent to which it is given the bank will be justified in acting. A common example of such consent would be where a customer gives a banker's reference. The extent to which he authorizes information to be given on such a reference must be a question to be determined on the facts of each case. I do not desire to express any final opinion on the practice of bankers to give one another information as to the affairs of their respective customers, except to say it appears to me that if it is justified it must be upon the basis of an implied consent of the customer.

As to the rest of the case based on slander, I think that this issue must also be submitted for a new trial. I do not

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1 K.B.	TOURNIER v. NATIONAL PROVINCIAL AND UNION BANK OF ENGLAND. (C.A.)	Atkin L.J.

think that it is a sufficient direction to a jury on what is meant by "defamatory" to say, without more, that it means: Were the words calculated to expose the plaintiff to hatred, ridicule, or contempt, in the mind of a reasonable man? The formula is well known to lawyers, but it is obvious that suggestions might be made very injurious to a man's character in business which would not, in the ordinary sense, excite either hate, ridicule, or contempt - for example, an imputation of a clever fraud which, however much to be condemned morally and legally, might yet not excite what a member of a jury might understand as hatred, or contempt. Speaking for myself, I also think that it is undesirable where an issue of privilege is raised to leave a question of express malice to be decided by the jury before the judge has ruled whether the occasion is privileged. The judge has to determine, not only whether the occasion is privileged, but whether the defendant has gone beyond the privilege which the occasion creates: Adam v. Ward. (1) In the words of Lord Loreburn: "All this is for the judge alone, and the question of malice, which is for the jury, cannot arise till the judge has ruled on the whole question of privilege." In many cases, and I think this is one, the jury cannot form a correct opinion as to what is express malice until the judge has ruled whether the circumstances exist, as to legal or social duty and so forth, on which the legal privilege depends; and if the occasion is not privileged, or has been, in fact, exceeded, the question of express malice is irrelevant; and I think it is a disadvantage to the administration of justice that questions should be asked of the jury unnecessarily when the final decision may appear to conflict with their answers. It is also, I think, clear that the plaintiff was entitled to put before the jury his case that the words proved, though not the very words pleaded, were words substantially to the same effect. Whether this be done by amending the pleading, by framing the question to the jury so as to raise the point, or by directing the jury that the words pleaded would be proved by proof of words substantially to the same

(1) [1917] A. C. 309, 321.

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effect, seems to me immaterial. No slander of any complexity could ever be proved if the ipsissima verba of the pleading had to be established. There appears to me to be ample authority in well established every day practice, and in the decisions upon the form of interrogatories in such cases, to support the view that I am expressing.

For the above reasons, without expressing an opinion upon the points raised between the parties at the trial, I come to the opinion that this appeal must be allowed, and a new trial ordered.

Appeal allowed.

Solicitor for the appellant: J. R. Cort Bathurst.

Solicitors for the respondents: Wilde, Wigston & Sapte.

J. F. C.