Fiji Law Reports

Commercial Banking Co. v. R.H. BrH. Brown & Co. (1972) 2 Lloyds Rep. 360

Compagnie Financiere du Pacifique v. Peruvian Guano Co. [1883] UKLawRpKQB 95; (1882) 11 QBD 55

Cutts v. Head [1984] Ch. 290

Swift v. Winterbotham (1873) LR 6 Q.B. 2>

v. E v. Egdell [1989] EWCA Civ 13; [1990] 1 All ER 835

W.B. Anderson & Sons Ltd. v. Rhodes (Liverpiverpool) Ltd. (1967) 2 All E.R. 850

Woods v. Martins Bank Ltd. [1959] 1 Q.B. 55
&#16>Inbr>Interlocutory application in the High Court

M. /i> for the the Plaintiff
S. Parshotam for the Defendr> <160;
Fatiaki J:

Ts an locutory applicatlication lodged by Solicitors acting for the plaintiff company seeking intg inter alia an order for full discovery by thendant &#82. of thof the complete files of its Naviti Streettreet Branch, Lautoka containing all paperpapers, documents, letters, reports etc. that the defendant has in its possession relating to its customer R.V. Patel and/or its Directors or servants and in particular the Defendants’ inter office memorandum file which relates to R.V. Patel’s various accounts with the Defendant ...”

The applicatioopposed bsed by the defendant bank on various grounds more expressly set out in defence counsel’s written submissions but principal amongst which are:

“In mw, the dthe description of ‘fishing’ in thhorities ... comes to this: an applicant is fishing when heen he seeks to obtain information or documents by interrogatories or discovery der to discover a cause of e of action different from that pleaded or in order to discover circumstances which may or may not support a baseless or speculative cause of action.”

e present case the plai plaintiff’s Statement of Claim&aand affidavit evidence including its solicitor’s synopsis of the files sought to be discovered, clearly setsa welwn cause of actioaction based on the dual torts of deceit and negligent mis-statements aris arising in factual circumstances that cannot now be considered unprecedented. Nor I would add can the plaintiff’s claim be characterised as either baseless or speculative. Indeed, the plaintiff company in this application seeks discovery of documents that plainly exist and were in the possession, custody and control of the defendant bank’s solicitors. There is clearly no merit in this ground of objection which is accordingly dismissed.

The next ground of objection raises the head of ‘banker/customer’ confidentiality as a basis for refusing discovery. That a duty of secrecy exists in the normal relationship of a banker and its customer iar from the dicta of Lord Dord Donaldson

M.R. when he sa Barclays Bank P.L.C. v. Taylor [1989] 3 All E.R. 56p. 565: 565:

“anker customustomer relationship imposes on a bank a duty of confidentiality in ron tormatincerninerning its customers and his affairs whichwhich it acquires in the character of his his banker. But it is not an absolute duty. It is subject to four well-known qualifications. These entitle the bank to make disclosure where (a) disclosure is under compulsion by law, (b) there is a duty to the public to disclose, (c) the interests of the bank require disclosure (d) the disclosure is made by the express or implied consent of the customer.”

Lord Diplock in discg ting the nature of the duty of a banker to maintain the confidentiality of his customer’s affairs and in recognising its limitations said in Parnes v Society&#16> [1969] 1 Ch.D.p.9: .
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&#8hat we are conceconcerned with here is the contractual of confidence, generally implied though sometimes expressed ... Such a duty exists ... bet. between banker and customer, doctor and patied accountant and client. Sut. Such a duty of confidence is subject to and over-riden by, the duty of any party to that contract to comply with the law of the land ... For example, in the case of banker and customer, the duty of confidence is subject to the over-riding duty of the banker at common law to disclose and answer questions as to his customer’s affairs when he is asked to give evidence of them in the witness box in a court of law.”

In my view an oof the Cthe Court directing a party to any cause or matter to make discovery pursuant to Order 24 r.3 of the High Court Rules would amount to ‘disclosure nder compulsion of law’ under qualification (a) aboveabove and gives rise to an over-riding duty on the party so-ordered to comply.

As was said byham L.J. L.J. in W v. Egdell&[1990] 1 All E.R. 835 at p. 848:<160;
“T220;The deccases very clearly establisablish (1) that, the law recognises an important public interest in maintaining professional duties of conce but (2) that the law treats such duties not as absolute lute but as liable to be over-ridden where there is held to be a stronger public interest in disclosure. Thus the public interest in the administration of justice may require a clergyman of a banker, a medical man, a journalist or an accountant to breach his professional duty of confidence.”

Furthermore Sectiof thef the Bankers Books Evidence Act (Cap.45) empowee Court tor rder “any party to a legal proceedings... to inspect and take copies of a of any entries in a bankers book” which view includes any books files or papers ordinarily used or maintained by a bank in the cone conduct of its ordinary banking business irrespective of whether such books, papers or files relate to a party to the proceedings or not.

Defence counsel showeveowever to limit such discovery to ‘parties in the proceedings’ of which the defendant bank’s customer R.tel & Co. is plainly not, and counsel quotes various extracts from the judgments in&#16n Staffordshire Tramways ways Company v. Ebbsmith (1895) 2 Ch669 in supposupport of his objection.

I am satisfied howthat that whilst the C must indeed be circumspect and cautious in ordering discoviscovery of matters concerning non-litigant third parties, the power to do so nheless exists and may be exercised in exceptional circumstaumstances in the interests of the administration of justice and where the Court is of opinion that such an order is necessary either for disposing fairly of the cause or matter or for saving costs. (per Lord Mackay in O’van v. Herdman&#man’s Ltd. [1987] 3 All E.R. 129 especially at p.136)

The applon in this case case however, is not directed to a non-litigant third-party, nor does it seek to discover confidential corrdence emanated from a third-party, or is in the custodustody and control of a non-litigant thirdthird party.

True it might beefence ence counsel claims that such documents relate to the affairs of a non-litigant third party and are covered by the defendank’s duty of confidentiality towards its customers, but, as was said by Lord Cross ioss in Alfred Crompton v. Commissioners of Customs (No.2) [197All E.R. 1169 at p.l184.l184f:

“Confidentiality is not a separate he privilege, but it may he a very material consideration to bear in mind when privilege is c is claimed on the ground of public interest. Whe Court has to do is weigh on the one hand the consideratierations which suggest that it is in the public interest that the documents in question should he disclosed and on the other hand those which suggest that it is in the public interest that they should not be disclosed and to balance one against the other.”

Earlier his Lordship a1 p.1180, referred to an approved statement of general principle in Bray on Discovery whiads as follows:
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Bearie above in mind annd and mindful that at the material time the non-litigant third party R.V. Patel & Co. was a customer of the plaintiff company and the deft bank, and was placed under receivership in January 1991 b991 by the defendant bank itself, there is not the slightest doubt in my mind of the relevance of the documents sought to be discovered, but also, that the ba of coof competing considerations is strongly in favour of maintaining and upholding the public interest that in a civil action the Court should be possess all ant information to enable it to reach a decision.sion.
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I am further fortified by a decision in a South African case Rainsford v. African Bankinq Corporation Ltd. (1912) C.P29 which is n is noted in Vol.18 of The Digest;(2nd re-issue) at p.142 under the following relevant eant entry:

8220;Confidential corr correspondence between a bank as bra and confidentialntial documents relating to the dealings of the bank with customers not paot parties to the suit, which are relevanthe issue between the partiearties, are not privileged and are not excluded from inspection and production.”

In som similar vein andn and referring to internal minutes of the Law Society, Sir Robert Megarry V.C. said in Buckley v. The ociet&#16> [1983] 1 W.L.R. 985 at p. b90:

“I do notk annk any dany documents should be excluded merely be they are internal documents, for the question is one of there being reason to suspect dish dishonesty on the solicitor’s part, and nal documents may showh howh how much or how little reason there was for the suspicion.”

This second ground of objection is accordingly rejected.

The third and final ground of objection is based upon the so-called ‘without dice’ opportunity given to the plaintiff’s solicitors to inspect the defendant dant bank’s files with a view to set the plaintiff company̵’s claim.

In this regard Griffithffiths said in Rush; Tompkins v. G.L.C..L.C. [13 W.L.R. 939 at p.942":

“The ‘without prejudice’ rule is a rule governing the sibilf evi and isnd is founded upon the public policy of enof encouraging litigants to settle their deir differences rather than litigate them finish. It is no where more more clearly expressed than in the judgment of Oliver L.J. in Cut Head [1984]1984] Ch. 290, 386.”

and later, afiting a pa a passage from Oliver L.J’s judgment (op.cit) Lord Griffiths continuer>&#1r>“The rule applies to exclude all negotiatotiations genuinely aimed at settlement whnt whether oral or in writing from being given in evidence ... However, the application of the rule is not dependant upon the use of the phrase ‘without prejudice’ and if it is clear from the surrounding circumstances that the parties were seeking to compromise the action, evidence of the content of those negotiations will, as a general rule, not be admissible at the trial and cannot be used to establish an admission or partial admission.”

and lastly at p.943/is his Lordship laid down the following general rule:

8220;I would thereforeefore hold as a general rule that the ‘without prejudice’ rule renders inadmissible in ansequetigation connectenected with the same subject matter proof of any admissions made in a genu genuine attempt to reach a settlement.”

I confess thatdefendantndant’s objection raises the question of the application of the ‘without prejudice’ rule in wholly unusual and novel circumstances insofar as it is not any written or oral negotiations or admissions made by the defendant bank that is sought to be protected, but rather, the occurrence of an event, in which the plaintiff’s solicitors were permitted to peruse various files and documents belonging to the defendant bank.

It is therefore noturprsurprising that counsel for the plaintiff did not seek to address defence counsel’s submissions or affidavit evidence at regard save as to the question whether or not such documents and files as were made avai available during counsel’s inspection, would be protected under a claim of ‘solicitor/client privilege’, which quite plainly they could not, since their creation and existence occurred long before any litigation was ever contemplated.

The case of Rabin v.oza & Coo. [1954] 1 W.L.R. 271 shows however that even between the parties to ‘without prejudice’ correspondence they are not entitled to discovery against one ano In tase, a surveyor&#yor’8217;s report obtained by the defendant’s in pursuance of ‘without prejudice’ discussions between the parties was considered to be entitled to protection from production owing to its ‘without prejudice’ status.

But even in case the dehe defendant was obliged to disclose the existence of the report in its affidavit of documents and “... (the) report was clearly made solely for the purposes of the ‘without prejudice’ negotiations. The solicitor for the plaintiff himself says in his affidavit that at the time of the interview it was contemplated that steps such as these should be undertaken.” (per Lord Denning M.R. at p.273-274 ibid)

e present case before more me however, the files and documents sought to be discovered were clearly not made and did not come into existence either generally or solely for the purposes of settling the plaintiff’s 17;s claim, nor could their creation have been within the contemplation of either the plaintiff’s or the defendant’s counsel at the relevant time much less can they give rise to a claim for privilege against disclosure on the basis of the ‘without prejudice’ rule.

There is no merit either in this third ground of objection which is also rejected. The defendant bank’s objections having all been rejected, the plain#8217;s application is granted with costs to be in the cause.

(Application tion granted; discovery ordered.)

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