Banker's privilege under English Act does not block subpoena attendance if verified copies are provided.

[*476] 1984 Feb. 27

(BOYADJIS, P.D.C.)

IN THE DISTRICT COURT OF NICOSIA

Niki Aristidou,

Applicant,

v.

Iacovos Aristides,

Respondent.

(Maintenance Application No.41/83)

Evidence - Banker and Customer - Banker’s obligation to secrecy - Common Law - Banker’s privilege thereunder inoperative when, in obedience either to an order under the English Bankers’ Books Evidence Act, 1879 or to a subpoena duces tecum, he is required to attend the Court with his books or verified copies thereof, provided always that the information he is required to disclose is relevant to the matters in issue in the proceedings in which the customer is a party.

Evidence - The English Bankers’ Books Evidence Act, 1879 - Applicable in Cyprus by virtue of section 3 of the Evidence Law, Cap. 9 - Sections 3,4,5,6 and 7 of the said Act - Effect of section 6 - It gives relief to Bankers from production of their bank books - Reservation of power of Court to order production of actual books where special circumstances make it advisable - The section was not intended to substitute altogether the suppoena duces tecum in the cases of bankers.

K. Talarides for the Applicant.

E. Odysseos for the Respondent.

RULING

The following ruling was delivered by:

BOYADJIS , P D C.: This case raises a question of [*477] considerable interest

regarding the nature and extent of the obligation to secrecy cast by law on the banker not to divulge to third persons, without the express or implied consent

of the customer, any information relating to the customer’s account or transactions with the bank, viewed in he light of the provisions of the Banker’s Books Evidence Act, 1897.

The question has arisen in the following circumstances; The applicant who is the lawful wife of the respondent filed against her husband an application under section 40 of the Court of Justice Law for an order requiring him to pay to her and her minor children maintenance in the

sum of £668.- per month. The application was opposed by the respondent. A few days before the day when the application stood fixed for hearing the applicant served

on the manager of one of the Nicosia branches of the Popular Bank Ltd., a subpoena duces tecum requiring him to attend the Court on the day of the hearing and produce details “of the respondent’s

account or accounts kept with the bank, including his account No.70-11-000909 from 1.1.1982 till today, including also the loans, mortgages, agreements and other documents related

to any one of the aforesaid accounts”.

In obedience to the aforesaid subpoena, a certain [*478] Efstathios Savvides, the sub-manager of the said bank, attended the Court on the day of the hearing, i.e. on 3rd December 1983, and was called by the applicant as her first witness. Learned, counsel for the respondent took objection to the presence of this witness in the witness box. He based his objection on section 6 of the Bankers’ Books Evidence Act. After hearing arguments for and against the objection, the Court gave its ruling ex-tempore in the following terms:

Ruling dated 3,12.1983: The applicant has today called as her first witness in the present matter .Mr. Efstathios Savvides, the sub-manager of the Cyprus Popular Bank Ltd., who has appeared in Court today in obedience to a summons of witness which has been served upon him for the purpose of producing to the Court a statement of account which the respondent keeps with the aforesaid bank and also to give oral evidence in respect of that account.

Counsel for the Respondent has objected to the presence of this witness in the witness box and to his giving any evidence whatsoever regarding the aforesaid account on the ground that, in accordance with section 6 of the Bankers Book Evidence .Act 1879, this witness is not compellable [*479] since the bank is not a party to the present proceedings. Section 6 of the said English Act; reads as. follows:

“A banker or officer of a bank shall, not, In any legal proceedings to which the bank is not a party, be compellable to produce any banker’s book the contents of which can be proved under this Act, or to appear as a witness to prove the matters, transactions, and accounts therein recorded, unless by order of a .judge for special reason’.

“Mr. Odysseos for the respondent has alleged that this English Act is part of our Law by virtue of section 3 of the Evidence Law, Cap.9 and continues to be so after the Constitution in 1960 by virtue of section 29(1) (e) of the Courts of Justice Law, Cap. 14/1960.

“Mr. Talarides for the applicant on the other hand has submitted that the Bankers’ Books Evidence -Act 1879 is a procedural Act which ceased to form part of our law following the Constitution, in view of Articles 188.2, 30.3(c) and 28 of our Constitution. He submitted that it is contrary to the aforesaid two Articles of the Constitution and therefore should be ignored.

“In answer to this unconstitutional point raised by Mr. Talarides, Mr. Odysseos referred the Court to the cases of Andreas Azinas and Another v. [*480]“The Police (1981) 2 C.L.R. 9, and The Attorney-General of

the Republic v. Theocharis.Theocharides and Others (1973) 2 C.L.R. 75, where, he submitted, the aforesaid English Act

was considered and it was held that it still forms part of our law and it is not unconstitutional.

“I do not think that it is necessary to decide the issue of the constitutionality of section 6 of the Bankers’ Books Evidence Act for the purposes of my present ruling. It seems to me that the object of section 6 of this Act is to give to a banker or officer of a bank who complies with sections 3 - 5 of the Act, the right to refuse to appear before a Court either for the purposes of producing any banker’s book or for the purpose of proving by oral evidence the matters, transactions and accounts therein recorded unless he is served with special order of the judge to that effect. Section 6 does not provide and cannot be interpreted as providing that any banker or officer of a bank is not a competent witness on the aforesaid matters. There is no allegation in the present case that the matters which the witness has been called to testify are matters which bear no relevance to the issues raised in this application. It is also relevant to state in the present juncture [*481] that there is no allegation of the existence of any banker’s privilege; therefore, once the witness is present in Court and once there is no objection as to the relevance of the evidence he is going to give I overrule the objection of the learned counsel for the respondent.”

Following the aforesaid ruling, the witness invoked what is known as banker’s privilege not to disclose anything regarding the customer’s account with the bank without the latter’s consent. Learned counsel for the respondent expressed the wish to address the Court in support of the privilege set up by the witness and applied for an adjournment to prepare himself. Learned counsel for the applicant expressed the wish to address the Court in opposition to the alleged privilege and the hearing was consequently adjourned by consent, learned counsel having agreed to file written address on the matter. The last written address having been filed on 28.1.1984, the ruling of the Court was reserved till today.

Learned counsel for the respondent argued that the banker’s privilege prevailing in England is part of ourlaw in as much as it is part of the common law; that the privilege is subject to several qualifications laid down in Tournier v. National Provincial and Union Bank of England (1924) 1 K.B. 461, C.A., including the qualification that disclosure is allowed when it is under compulsion [*482] of law; that in cases where, like the present one, the bank is not a party to the proceedings, compulsion of law means only an order under sections 6 or 7 of the Bankers’ Books Evidence Act, 1879 and not a subpoena duces tecum; that such an order is made only in very special circumstances; that, in any case, no application in the proper form has been made by the applicant in the instant case for an order of the Court under any one of the aforesaid sections; and that, therefore, the banker may validly set up the provilege and deny disclosure of his customer’s account against his expressed wish.

Learned counsel for the applicant, on the other hand, argued that, if the contents of the customer’s account with the bank is relevant evidence in proceedings between the customer and a third person, the bank is under a duty to the Court to disclose information regarding such account; that if a banker served with subpoena furnishes or produces in Court verified copies of its business records, he can be excused from producing in Court the actual books of the bank, in as much as such certified copies are, under section 3 of the Act, admissible in evidence by way of exception to the hearsay rule; that a banker who has not complied with sections 3 to 5 of the Act cannot take advantage of section 6 of the Act; and that, if the Court rules that the Bankers’ Books Evidence Act, 1879, had the effect of conferring upon [*483] bankers special privileges or had placed them in a different position than all other witnesses with reference to the subpoena power of the Court under sections 48,49 and 51 of the Courts of Justice Law, the provisions of the

Act which have brought about such result are contrary to Articles 30.3 (e) and 28.1 of our Constitution and should be

considered as having been repealed by Article 188 of the Constitution or should, at least, be read with such modifications as is necessary to bring it in conformity with Articles 28 and 30 of the Constitution.

Having considered the arguments advanced and the several authorities cited by both learned counsel I have formed the view that two distinct and completely different issues are involved which should not be confused or related. The first issue concerns the banker’s privilege in common law; the second concerns the effect of the Bankers’ Books Evidence Act, 1879. The first issue has arisen from the statement of the witness that he considers himself bound by the banker’s obligation to secrecy and that, without the consent of his customer, the respondent in the present proceedings, he is not willing to disclose anything regarding the customer’s account unless the Court orders him to do so. The witness has not invoked the provisions of the Bankers’ Books Evidence Act, 1879, and the second question would have never arisen if [*484] Mr. Odysseos had not submitted on respondent’s behalf that the

“order” referred to by the witness is an order either under section 6 or under section 7 of that Act, which can only be made upon an application in the proper form. The impact of the Act

on the law and/or procedure prevailing prior to its enactment has thus become again an issue in this case, this time in a somewhat different context than the one covered by my ruling dated 3rd December, 1983. This led me to the conclusion that I should consider further the Bankers’ Books Evidence Act, I879, instead of treating the matter as an attempt to re-open the matter decided by my aforesaid first ruling, as it might perhaps look on its face.

From the arguments relating to this submission of this submission of Mr. Odysseos it seems that the second issue may best be formulated thus: Whether, assuming there is a banker’s privilege in cases other than those under compulsion by law, the banker is, nevertheless, entitled to withhold from the Court relevant evidence regarding the customer’s account, in proceedings between the customer and third persons, unless and until the Court makes the specific order provided for in sections 6 or 7 of the Act.

I have examined both issues in the light of the circumstances of this case, taking, in particular, into consideration that (i) there is no allegation that the [*485] financial position of the respondent as reflected in the bank account sought to be adduced in evidence, is not material or relevant in deciding the quantum of the maintenance, and (ii) it has become evident from the objection of the witness that he was never ready or willing to comply with section 3 of the Act by furnishing verified copies of the books of the bank, as provided for in sections 4 and 3, containing the respondent’s account unless ordered by the Court and that in fact he has furnished none.

I shall first consider the banker’s duty to maintain secrecy. The leading case in this matter is that of Tournier v. National Provincial and Union Bank of England 1924) 1 K.B. 461 where it was held by the Court of Appeal that the duty exists and that it is legal in nature, arising out of contract. It was pointed out, however, that it is not an absolute duty, but qualified, being subject to certain exceptions. Considering the duty and its qualifications, BANICES L.J. said the following at p. 472-473 of the report:

“In my opinion it is necessary in a case like the present to direct the .jury what are the limits, and what are the qualifications of the contractual duty of secrecy implied in the relation of banker and customer. There appears [*486] to be no authority on the point. On principle I think that the qualifications can he classified under four heads: (a) Where disclosure is under compulsion of 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..…”

It is clear that the last three qualifications to the banker’s privilege, laid down by Bankes L.J. have no application in the circumstances of the present case. If, therefore, the bank is to loose the protection of the privilege, it will do so only because of the first qualification, i.e. because the disclosure is under compulsion of law, an instance of which, according to Bankes L.J., is the duty to obey an order under the Bankers’ Books Evidence Act. Does this mean that the subpoena power of the Court is not another instance of compulsion of law rendering the banker’s privilege as such inoperative? I think it is. I have found nothing in the judgment of Bankes L.J. in the case above cited to justify the submission of Mr. Odysseos that only an order under the Bankers’ Books Evidence Act amounts to the compulsion of law [*487] which Bankes L.J. had in mind when defining the first exception to the banker’s privilege using the language hereinabove set out.

I think that the view of the matter which I have taken is supported by the judgment of SCRUTTON L.J, in the same case, who also examined the several qualifications to the banker’s privilege, and said this at p.479 of the report:

‘‘There is clearly no privilege to abstain from answering in a Court of Justice questions as to the customer’s account. Lloyd v. Freshfield (2 C.v. P. 325, 329) per Abbott C.J.”

Referring in the same case to the same exception to the banker’s privilege, Atkin L.J. did not mention the Bankers’ Books Evidence Act, either. He, instead, used the following words at p.486 of the report:

“On the other hand, it seems to me clear that there must be important limitations upon the obligation of the bank not to divulge information as I have mentioned. It is plain that there is no privilege from disclosure enforced in the Court of legal proceedings.”

Further support is to be found in Phipson on Evidence, 12th Edn., p. 243, where we read that [*488]

“It is plain that there is no privilege entitling a banker to refuse to disclose his customer’s confidences, if such disclosure is necessary in legal proceedings.”

The relevant consideration, therefore, is not the prior issue of an order under section 6 of the Act, but the necessity to disclose the information to the Court for the better administration of justice, which necessity arises from the fact that the information is material to the matters in issue before the Court. The procedural means of securing the presence of the banker in Court is a different matter altogether.

I should lastly refer to Parry-Jones v. Law Society (1968)1. All L,R. 117 where, speaking of the contractual duty of confidence, DIPLOCK, L.J. said at p.180:

“Such a duty exists not only between solicitor and client, but, for example, between banker and customer, doctor and patient, and accountant and client. Such a duty of confidence is subject to, and overridden by, the duty of any party to that contract to comply with the law of the land. If it is the duty of such a party to a contract, whether at common law or under statute, to disclose in defined circumstances confidential information, then he must do so, and any express [*489] contract to the. contrary would be illegal and void. For example, in the case of banker and customer, the duty of confidence is subject to the overriding 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 on them in the witness box in a Court of law.”

In the light of the above authorities I have come to the conclusion that the banker’s privilege is inoperative when, in obedience either to an order under the Bankers’ Books Evidence Act or to a subpoena served on him, the banker is. required to attend the Court with his books or verified copies thereof containing a customer’s account, provided always that the information sought to be disclosed is relevant to the matters in issue in any particular case where the customer is a party.

The same conclusion is arrived at if the matter is examined in the context of the second issue, i.e. with reference only to the Bankers’ Books Evidence Act, 1879, which is to be applied in Cyprus by virtue of section 3 of the Evidence Law, Cap,9. See in this respect Azinas and Another v. The Police (1981) 2 C.L.R. 9. This Act has no particular bearing on the banker’s privilege as such. It has been said by Lord Widgery C.J. in Williams and Others v. Summerfield (1972) 2 Q.B.D. 1972 that it can [*490] fairly be described as an Act for the relief of bankers, its object being to enable entries in a banker’s books to be proved in legal proceedings without the disruption of the bank which would result if the original books had to be taken away and kept in Court. It is in fact a procedural Act and it was never intended either to create or to strengthen or to take away or qualify in any way any substantive right or privilege enjoyed by bankers or any other class of professional men. This is evident, inter alia, from the fact that, although section 7 of the Act makes special provision for inspection of bankers’ books, it was held in the King v. Bono and Another (1913) 2 K.B. 635 that its object was not to increase facilities for discovery. Its true meaning and effect is clearly stated in the following extracts from the judgments of Coleridge, C.J. and Smith, L.J. in Emmott v. The Star Newspaper Company (1892) 62 L.J. Q.B. 77, cited with approval by Triantafyllides P. in the Attorney-General of the Republic v. Th. Theocharides and Others (1973) 2 C.L.R. 75 at pp. 79-80:-

Coleridge, C.J. said:-

“What was the duty of a banker in regard to the supplying of evidence at the time when this Act was passed? It was the same as that of any other person. He was obliged to attend under a subpoena with his books if their contents were receivable in evidence. But this was said to be a grievance in the case of bankers, and to cause to that class a peculiar and practical hardship in disturbing their business and [*491] displacing their business books, filled as they were with the details of other people’s affairs quite external to the matters in dispute. The Act, or rather the original Act of 1876, which the Act of 1879 repeals, and for which it is substituted, was passed to give a sensible and

reasonable relief for this particular class of persons, but not to alter the whole of the rules of evidence so as to place bankers in a

different position in regard to giving evidence from any other subjects of the Queen. Bankers are not to be so differently treated, nor was any such change intended. They remain bound at common law to attend and to produce their books under subpoena, except in so far as the inconvenience may be modified by the statute. That is to say, they are allowed by the Bankers’ Books Evidence Act, 1879, to prove the entries in their books by copies verified orally, or on affidavit, as being correct, and as being made from the ordinary books of the bank, and having been entered also at the time in the usual and ordinary course of business. Then, under section 6, a banker is to be relieved from being compelled to attend and produce his books in any proceedings to which his bank is not a party, so long as the contents of these books can be proved in the manner provided by the preceding sections, unless by order of a Judge made for a special cause. The section does not say that he is not to be [*492] compellable in any cases where the contents of the books could formerly be proved at common law, but only in cases ‘where their contents can be proved in the manner provided by this Act’. If the banker does not choose to follow out these provisions of the Act, he is left with the old burden of personal attendance and production of the books. The construction contended for by the defendants would otherwise give a banker an unreasonable amount of relief. If the banker will not attend or supply the copies required at the trial, he must be subpoenaed to produce the books at the trial as before the Act, If he will not take the course pointed out by the Act, or attend under the subpoena, he will find himself in a bad way at the trial. That would be an attempt to defy the jurisdiction of the Court, and could be dealt with as such”.

and Smith L.J. stated;-

“What is the true meaning of the Act? That “bankers were not in any case to which their banks were not a party to be compelled to appear or to produce their books? I do not think that this is the construction of sections 6 and 7. Sections 2 to 5 were passed for the benefit of bankers, to enable them to prove entries by copies, and to verify the copies on oath, either sending a clerk to attend the trial, or by affidavit. [*493] Then comes section 6. It does not stand alone. It must be read in conjunction with sections 2, 3, 4 and 5. Taken together, the sections convey that if a banker chooses to take advantage of these first sections, he shall not be compelled, in cases to which section 6 applies, to attend or to produce his books without an order of the Court made in view of special circumstances”.

The applicant in this case did not file an application under section 7 of the Act for an order to inspect the respondent’s account with the bank prior to the hearing. Does this mean that, unless an order under section 6 is made, there does not exist other legal means to compel proof of the banking transactions of the respondent? It seems that the counsel appearing for the Attorney-General, who made the application to the Supreme Court in the Theocharides case (supra) for an order under section 6 was under the impression that there did not exist any other legal means. Triantafyllides P.,

however, after citing the aforesaid extracts from the judgments of Coleridge, C.J. and Smith, L.J concluded by saying

this -

“In the light of this judgment the required evidence may possibly be placed before the trial Court without there existing any need for an order under section 6”.

Regarding the effect of section 6 we read the following Notes in Halsbury’s Statutes of England, vol.9, P. 599:- [*494]

“Effect of section: This section only excuses the attendance of a banker with his books where he has complied with s.3. If he has not furnished or been willing to furnish verified copies of the required entries the books may still be obtained by subpoena duces tecum (Emmott v. Star Newspaper Co. (1892), 62 L.J. Q.B. 77)”.

Moreover, in Paget’s Law of Banking, 8th Edition, cited by learned counsel for the respondent, it is clearly stated at p.168 that it is only when the banker has complied orally and fully with the requirements of the Act that he is entitled to its protection under section 6 thereof, and that presumably this includes the giving of all reasonable facilities to a party authorised to inspect and take copies of entries by an order under section 7 of the Act.

Upon a careful consideration of the language of section 6 of the Act and Emmott’ s case (supra), Bono’s case (supra) and Arnott v. Hayes (36 Ch. D-731 ) it seems to me that the object of section 6 was to give relief to bankers from the production of bank books, at the same time reserving to the Court the power, in cases where special circumstances make it advisable, to issue a special order requiring the banker to produce his actual books irrespective of whether he has actually furnished authenticated copies thereof as provided in sections 4 and 5 of the Act. Section 6 was never intended to substitute altogether the subpoena duces tecum in the cases of bankers. [*495]

For the reasons which I have endeavoured to state hereinabove, the objection is overruled. This, however, should not be taken to mean that the witness cannot produce authenticated copies of the books of the Bank as is provided in sections 4 and 5, containing the respondent’s account. Regarding the costs occasioned by the objection, I direct that they remain in the cause but shall not in any event be against the applicant.

Objection overruled. Costs in cause.