National Irish Bank Ltd v Raidió Teilifís Éireann

JurisdictionIreland
CourtSupreme Court
JudgeLynch J.,Keane J.
Judgment Date20 March 1998
Neutral Citation[1998] IESC 2
Docket Number[H.C. No. 1998 1306P; S.C.
Date20 March 1998
NATIONAL IRISH BANK LTD v. RTE

BETWEEN

NATIONAL IRISH BANK LIMITED AND NATIONAL IRISH BANKFINANCIAL LIMITED
Plaintiffs/Appellants

AND

RADIO TELEFIS EIREANN
Defendant/Respondent

[1998] IESC 2

Hamilton, C.J.

O'Flaherty, J.

Barrington, J.

Keane, J.

Lynch, J.

51/98

THE SUPREME COURT

Synopsis

Practice and Procedure

Disclosure; confidential information; publication; scheme for evasion of tax; injunction sought to restrain publication of confidential information; claim that publication is justified on the grounds of public interest; consideration of the "iniquity" defence; whether the public interest in the maintenance of confidentiality is outweighed by the counter veiling public interest in exposing such conduct; consideration of the extent of the disclosure which is legitimate Held: Appeal dismissed; warning not to publish the names of innocent investors and to cooperate with regulatory authorities National Irish Bank Limited v. Radio Telefis Eireann - Supreme Court: Hamilton C.J., O'Flaherty J., Barrington J., Keane J., Lynch J. - 20/03/1998 - [1998] 2 IR 479 - [1998] 2 ILRM 196

Citations:

ANNESLEY V EARL OF ANGLESEA 1743 17 ST 1139

LAVERY COMMERCIAL SECRETS: THE ACTION FOR BREACH OF CONFIDENCE IN IRELAND (1996) CH 6

GARTSIDE V OUTRAM 1856 26 LJ CH (NS) 113

INITIAL SERVICES LTD V PUTTERILL 1968 1 QB 396

HUBBARD V VOSPER 1972 2 QB 84

BELOFF V PRESSDRAM LTD 1973 1 AER 241

LION LABORATORIES V EVANS 1985 1 QB 526, 1984 2 AER 147

SCHERING CHEMICALS LTD V FALKMAN 1981 2 AER 321

AG V GUARDIAN NEWSPAPERS LTD (NO 2) 1988 3 AER 545

SMITH-CLINE & FRENCH LABORATORIES (AUSTRALIA) V DEPT OF COMMUNITY SERVICES 1990 FSR 617

WOODWARD V HUTCHINS 1977 2 AER 751

FRANCOME V MIRROR GROUP NEWSPAPER 1984 2 AER 408

A COMPANY'S APPLICATION, IN RE 1989 3 WLR 265

X V Y 1998 2 AER 648

FRAZER V EVANS 1969 1 QB 349

AG FOR ENGLAND & WALES V BRANDON BOOKS 1986 IR 597

CONNOLLY V RTE 1991 2 IR 446

MAGUIRE V DRURY 1995 1 ILRM 108

1

JUDGMENT delivered the 20th day of March, 1998by Keane J. [HAMILTON AGR.]

2

The interim injunction granted by the High Court (Smith J.) in these proceedings on 30th January last was1 one

"restraining the defendant, by itself, its servants or agents or otherwise howsoever from making any use whatsoever (andinparticular from making any publication of) information falling within the categories described in the Schedule to the summons."

3

The Schedule was as follows:-

4

2 "(1) Any documentation or information identifying or tending to identify a customer of the plaintiffs.

5

(2) Any information or documentation identifying or tending to identify an account of a customer held with the plaintiffs.

6

(3) Any information or documentation identifying or tending to identify the transactions on any account of any customer held with theplaintiffs.

7

(4) Any information or documentation identifying or tending to identify investments made by, or business transacted by, any customer of the plaintiffs."

8

At the hearing of the appeal, Mr. Nesbitt, S.C. on behalf of the plaintiffs/appellants (hereafter "the bank") accepted that the adjective"confidential" should appear after the word "any" in each, of the paragraphs in the Schedule.

9

Some features of the scheme being operated by the bank and Clerical Medical International (hereafter "CMI"), and details of which are set out in the judgment which Lynch J. will deliver, should be noted. The operation of such a scheme by the bank, provided the necessary licences or permissions under any relevant legislation were obtained, was not of itself unlawful. The participation by customers of the bank in the scheme was also not of itself unlawful. Since, however, one of the results of the scheme was that accounts formerly held in the names of customers were now held in the name of CMI, the evasion of tax by the customers concerned could thereby be facilitated. The defendants (hereafter "RTE") say that, in the absence of any legitimate fiscal advantage resulting to the customer from his participation in the scheme, the conclusion is inescapable that one of its objects was to enable customers of the bank with "sensitive" accounts to put their monies beyond the reach of Revenue Commissioners. The bank for their part, while conceding that there were what they described as "shortcomings" in the manner in which the scheme was operated, deny the allegation that it was established by them in order to facilitate tax evasion.

10

While it is said in the affidavit sworn on behalf of the RTE that the material which has provided the basis for the allegations made by theirnewsdivision against the bank is not based exclusively on the furnishing to them of documents or information in breach of the confidential relationship between the bank and its customers, they acknowledge that they are in possession of such information and claim the right to publish it as they wish in their broadcasts. Mr. Feeney, S.C. on their behalf informed the court during the hearing of this appeal that they had in their possession the account numbers of twenty accounts involved in the CMI Scheme and the names of six customers entitled to the funds in the accounts, some of whom, he said, had informed RTE that the accounts had been opened for the purposes of tax evasion. Mr. Feeney says that his instructions are that one or more of the named customers - but not all six - had made such admissions. It is not in dispute that in excess of 150 customers of the bank accepted an invitation to participate in the scheme.

11

The bank does not claim to be entitled to an injunction restraining RTE from broadcasting allegations against them that they have been operating a scheme which facilitates tax evasion. What they seek to enjoin is the use (including its transmission to the world at large) of the names of their customers and the details of their accounts and transactions entered into by them. That, they said, would constitute a breach of the confidential relationship between the bank and their customers which will cause them irreparable damage. While RTE accept that the dissemination of the information will amount to a breach of the confidential relationship in question, they say that itis justified by the overriding requirements of the public interest: they submit that the evidence adduced by them to the High Court provides a strongly arguable case for holding that the public interest in the investigation and exposure of wrong doing outweighs the requirements ofconfidentiality.

12

The legal principles applicable to these circumstances must now be considered. The bank in this case seeks the equitable relief of an injunction and, accordingly, the maxim that "he who comes into equity must come with clean hands" is applicable. Moreover, where, as here, the bank say that they are entitled to prevent the use by RTE of confidential information, another legal principle, sometimes called the "iniquity" defence is relevant. In an Irish case a from the 18th century, the court approved of counsel's submission that:-

"No private obligations can dispense with that universal one which lies on every member of society to discover every design which may be formed, contrary to the laws of society, to destroy the publicwelfare."

13

[Annesley v. Earl of Anglesea] 1743] 17 State Trials 1139]

14

Thereafter the doctrine was largely developed by the English courts. A helpful analysis can be found in Chapter 6 (The Defence of PublicInterest) of Mr. Paul Lavery's recent work CommercialSecrets: The Action for Breach ofConfidence in Ireland (Dublin 1996). The "iniquity" label was first given to the defence by Wood VC in Gartside v.Outram (26 LJ Ch NS 113 at p.l14) where he said:-

"But there are exceptions to this confidence, or perhaps, rather only nominally, and not really exceptions. The true doctrine is that there is no confidence in the disclosure of iniquity. You cannot make me the confidant of a crime or a fraud and be entitled to close up my lips upon any secret which you have the audacity to disclose to me relating to any fraudulent intention ???or??? your part; such a confidence cannot exist."

15

The modern English authorities have proceeded on the basis that such a defence, based as it is on the public interest in the prevention of wrongdoing, extends not merely to cases of criminal or fraudulent misconduct, but also to other wrongs or misdeeds, whether already committed or in contemplation. This was so held by the Court of Appeal in Initial Services Limited v. Putterill [1968] 1 QB. A series of cases in that jurisdiction also established that the defence of "public interest" - which now, rather than the more old fashioned term "iniquity", was the preferred description - extended to cases in which while there was no evidence of misdeeds as such, the disclosure of theinformation could avert some danger to the public such as the marketing of particular drugs: see Hubbard v. Vosper [1972] 2 QB 84, Beloff v. Pressdram Limited [1973] I All ER 241; LionLaboratories v. Evans [1985] 1 QB 526; and Schering Chemicals Limited v. Falkman [1981] 2 ???All???ER 321.

16

The English authorities indicated that the appropriate approach was for the courts to engage in a balancing exercise, described as follows by Lord Goff in Attorney General v. Guardian Newspapers Limited(No.2) [1988] 3 All ER 545:-

"...Although the basis of the law's protection of confidence is that there is a public interest that confidences should be preserved and protected by law, nevertheless that public interest may be outweighed by a countervailing public interest which favours disclosure. This limitation may apply, as the learned judge pointed out, to all types of confidential information. It is this limiting principle which may require a court to carry out a balancing operation, weighing the public interest in maintaining confidence against a countervailing public interest...

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