AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
7.2 Laws to Protect “Banking Secrecy” Common Law Under the common law, a banker’s duty to keep confidential certain affairs of their customers is dependent on the terms of the engagement as between the banker and its customer. This duty of confidentiality is usually an implied term of the contract between a banker and customer, although it may be express, and extends beyond the mere state of affairs of customers’ bank accounts to any information derived from the banking relations of the bank and its customer. This includes any transactions that involve the customer’s account. The duty is qualified by four exceptional circumstances, where it is permissi - ble for a banker to disclose otherwise privileged information. These exceptions were enumerated by Bankes LJ in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461. These circumstances include: • where disclosure is under compulsion of law; • where there is a duty to the public to disclose; • where the bank’s interests necessitate disclo - sure; and • where the disclosure is in accordance with the customer’s express or implied consent. Additionally, there may be a concurrent equita - ble duty to maintain confidentiality, where exist - ing customers expect that information that they provide to a bank is protected by law. Arguably, this is a more robust basis for the duty of confi - dentiality, as it does not rely on the existence of a contract. By comparison, the contractual basis requires a court’s determination that such a duty can be implied in the contract. This distinction between the equitable and contractual bases is reinforced by the fact that parties are free to insert express provisions that are inconsistent with the general duty of confidentiality.
Statutory Duty of Confidentiality From a privacy perspective, a banker is restrained from disclosing personal information, unless the customer has consented to the disclosure, the disclosure is required by law, or the disclosure is reasonably necessary for the enforcement of the criminal law, or of a law imposing a pecuni - ary penalty, or for the protection of the public revenue (Privacy Act 1988 (Cth) Section 14). Statutory Requirements to Disclose In certain circumstances, the duty of confidenti - ality may be negated in order to facilitate the pro - duction of evidence under statutory instruments. For instance, a banker may be required to dis - close evidence in relation to a fraud claim under Section 28 of the Australian Crime Commission Act 2002 (Cth). Additionally, under Section 213 of the Proceeds of Crime Act 2002 (Cth) a finan - cial institution may be required to provide infor - mation or documents to an “authorised officer” , as defined in Section 338 of the Proceeds of Crime Act 2002 (Cth), to determine any of the following information: • whether an account has been held by a specified person; • the balance of the account; • whether a particular individual is a signatory to an account; • details of transactions on an account; • the details of any related accounts; • determining whether a stored value card was issued to a specified person; • the details of transactions made using this card; or • whether a transaction was conducted by the financial institution on behalf of the specified person.
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