ALI SAID HAMDAN AL RAWAHI v 1. ) AHMAD BIN HASSAN 2. ) MALAYAN BANKING BERHAD

Case Significance

Illustrates the limits of third-party discovery under Order 24 rule 7A against a bank — the applicant must show the documents are relevant and necessary and that the bank is their exclusive custodian, and banker-customer confidentiality and unexplained delay weigh against granting such discovery.

This High Court decision at Shah Alam concerns an application for third-party discovery in a suit arising from allegedly unauthorised withdrawals from a company's bank account. The plaintiff, a foreign national who was a director and shareholder of a flour-milling company, alleged that RM1,000,000 had been withdrawn from the company's account and that a board circular resolution bearing his name, used to effect the withdrawal, contained a forged signature. His substantive claim against the second defendant, Malayan Banking Berhad, had earlier been dismissed on the ground that the bank owed him no duty of care, as he was not the account holder in his personal capacity. By this application the plaintiff sought discovery, under Order 24 rule 7A of the Rules of Court 2012, of bank statements, transaction slips, transfer forms and the supporting documents for the board resolutions authorising the withdrawals.

The bank opposed the application, contending that the documents sought were largely company records over which it owed duties of confidentiality as a banker, that it owed the plaintiff no duty in his personal capacity, and that the application was a fishing expedition and an abuse of process. The court considered whether the documents were relevant and necessary, whether the plaintiff had exhausted proper attempts to obtain them from the company and its officers, whether the application was an abuse, and whether banker-customer confidentiality weighed against the order.

The court held that the threshold for third-party discovery was not met: the plaintiff had not proved that the bank was the exclusive custodian of the relevant board resolutions and internal company approvals, some of which had been held by company secretaries and lodged with the Companies Commission, from where the plaintiff had already retrieved material. It also weighed the plaintiff's long period of non-enforcement and unexplained delay. The court dismissed the application with costs of RM5,000.00. The judgment illustrates the limits of third-party discovery against a bank.