PUBLIC BANK BERHAD v 1. ) NATIONAL FEEDLOT CORPORATION SDN BHD (P-1) 2. ) NATIONAL MEAT & LIVESTOCK CORPORATION SDN BHD (P-2) 3. ) AGROSCIENCE INDUSTRIES SDN BHD 4. ) REAL FOOD COMPANY SDN BHD (P-4) 5. ) Dato' Sri Dr Mohamad Salleh Bin Ismail (P5)

Case Significance

Affirms that a banker owes an enforceable duty of confidentiality to its customers, sourced in both the Tournier principle and section 97(1) of the Banking and Financial Institutions Act, and that a bank may be held liable for unauthorised disclosures of customer information.

This Federal Court decision concerns a bank's duty of confidentiality to its customers and its liability for the disclosure of customer information, and was heard together with a companion appeal on damages. The appellant bank appealed against the Court of Appeal's decision holding it liable to the respondent customers — a group of companies and an individual — for breach of the duty of confidentiality arising from the disclosure of their banking information, while the customers appealed against the award of only nominal damages of RM10,000.00 despite proven liability, having claimed very substantial general, aggravated and exemplary damages. On liability, the appeal engaged the nature and source of a banker's duty of confidentiality: the implied contractual term recognised in the Tournier principle, its continued application in Malaysia through the Civil Law Act 1956, and its interaction with the statutory duty of secrecy under section 97(1) of the Banking and Financial Institutions Act, together with the recognised exceptions to that duty. A central question was whether the bank was liable for disclosures made by rogue employees said to be on a frolic of their own, and whether the duty was strict or fault-based. The Federal Court dismissed the bank's appeal on liability, upholding the finding that the bank had breached its duty of confidentiality. It went on to allow the customers' companion appeal on damages, setting aside the Court of Appeal's nominal award and the High Court's decision on liability and damages, and awarded the customers costs of RM200,000.00 in the bank's appeal. The judgment is significant for affirming the banker's duty of confidentiality in Malaysia and the bank's responsibility for unauthorised disclosures of customer information. The court's treatment of the rogue-employee argument confirms that a bank cannot readily escape responsibility for unauthorised disclosures of customer information by characterising the conduct of its own staff as a frolic of their own, and that the duty of confidentiality is a serious obligation whose breach sounds in damages. The companion damages appeal, allowed at the same time, reflected the Court's view that a proven breach of so important a duty should not be met with a merely nominal award where the customers had put their loss in issue.