INSPECTION OF BANKERS’ BOOKS UNDER THE EVIDENCE ACT
In Alliance Divine Impex Pte Ltd v Arulappan Tony (DBS Bank Ltd, non-party) [2024] SGHC 227 (the “Judgment”), the applicant applied under s 175(1) of the Evidence Act 1893 (2020 Rev Ed) (“EA”) and/or O 11 r 11 of the Rules of Court 2021 (“ROC 2021”) for the non-party, DBS Bank Ltd (“DBS”), to produce the respondent’s bank statements and related specific documents. The High Court allowed the application pursuant to s 175(1) of the EA, but also made observations on the relationship between s 175 and O 11 r 11 of the ROC 2021.
Facts. The respondent was employed by the applicant as a senior sales and marketing manager (“Sales Manager”) from February 2019 to May 2022 (Judgment [3]). After the respondent left the applicant’s employ, the applicant suspected that the respondent may have entered into unauthorised transactions with various entities (Judgment [4] - [5]).
The applicant therefore applied for pre-action discovery against the respondent in HC/OA 679/2023 (“OA 679”), relying on potential causes of action such as conversion and unjust enrichment (Judgment [6]).
The court granted OA 679 and ordered the respondent to disclose (Judgment [6]):
“(a) bank statements of his bank account with DBS from February 2019 to May 2022 (both months inclusive); and
(b) bank statements of all such other bank accounts that the respondent may have in Singapore from February 2019 to May 2022 (both months inclusive), also for the same period.”
However, the respondent did not furnish the documents he was ordered to disclose (Judgment [7]). Ultimately, the applicant filed the present summons in HC/SUM 1940/2024 (“SUM 1940”) within OA 679 to seek the documents from DBS under s 175(1) of the EA and/or O 11 r 11 of the ROC 2021 (at [7]).
S 175(1) of the EA. Under s 175(1) of the EA, the court has the power to make an order for the inspection or taking of copies of entries in a banker’s book (Judgment [9]).
“Court or Judge may order inspection
175.—(1) On the application of any party to a legal proceeding, the court or a Judge may order that such party be at liberty to inspect and take copies of any entries in a banker’s book for any of the purposes of such proceedings.
...”
S 175(1) (which is under Part 4 of the EA), is an exception to the banking secrecy established in s 47(1) of the Banking Act 1970 (2020 Rev Ed) (“BA”) (Judgment [8]), and this is an exception permitted by s 47(2) read with para 7 of the Third Schedule of the BA (Judgment [10)].
The Court found that the requested bank documents fell within the definition of “bankers’ books” under s 170 of the EA (Judgment [13] - [14]), and was satisfied that OA 679 constituted “legal proceedings” under s 175 of the EA (Judgment [15] - [17]).
The Court found for the applicant and decided that an order to inspect and take copies should be made under s 175(1) of the EA, adding that (Judgment [18]):
“18 ... In this regard, the court’s power to make an order under s 175(1) is discretionary. It is trite that such discretionary power must be exercised in accordance with principle. While there does not appear to be any local decision in which the factors affecting the exercise of this discretionary power have been expressly explored, I would think that a court should be concerned with (a) the relevancy of the documents to the underlying “legal proceeding” in s 175(1) of the EA; (b) the applicant’s efforts in seeking disclosure of the documents concerned prior to taking out an application under s 175(1); and (c) the applicant’s good faith in seeking inspection and taking of copies. The consideration of these factors would balance the need for banking secrecy with an applicant’s need for the disclosure of documents from the bank for legitimate purposes.”
O 11 r 11 of the ROC 2021. The Court also addressed, for completeness, the applicant’s alternative ground under O 11 r 11(1) of the ROC 2021 (Judgment [27]).
“Production before action or against non-parties (O. 11, r. 11)
11.—(1) The Court may order the production of documents and information before the commencement of proceedings or against a non-party to identify possible parties to any proceedings, to enable a party to trace the party’s property or for any other lawful purpose, in the interests of justice.”
While it was not necessary for the court to decide on this alternative ground (Judgment [30]), the court doubted “whether the applicant’s intended causes of actions actually asserted any proprietary claim so as to bring them within the reasoning in Bankers Trust” (Judgment [31]), which is “a disclosure order against a bank or other financial institution to preserve or trace an asset” (Judgment [28]).
While the applicant submitted that it had shown a prima facie case of the respondent’s wrongdoing (Judgment [28]), the Court was of the view that the applicant’s intended claims for conversion and unjust enrichment, as described in the supporting affidavit, were “personal claims for compensation” (instead of proprietary claims to assets), “as the claim is still fundamentally an assertion that the respondent owes the applicant money and not that the moneys in the respondent’s account with DBS belong to the applicant.” (Judgment [31] - [32])
Potential for further development? The Court then suggested that had it not been bound by the Court of Appeal decision of Goh Seng Heng v Liberty Sky Investments Ltd and another [2017] 2 SLR 1113 (“Goh Seng Heng”), it would have doubted whether O 11 r 11(1) could compel a bank to disclose a customer’s banking documents via a court order (Judgment [33] - [35]).
This was because, as “the Third Schedule is exhaustive of the situations where banking secrecy may be disregarded ... it is arguable that the BA generally does not allow a party to circumvent s 175(1) of the EA by relying on O 11 r 11(1) to compel a bank to disclose a customer’s banking documents.” (Judgment [33])
Nonetheless, the Court noted that, based on Goh Seng Heng, the applicant may have relied on a different limb of O 11 r 11(1), being disclosure “for any other lawful purpose”, which has been described by the authors of the Singapore Civil Procedure 2024 vol 1 (Cavinder Bull gen ed) (Sweet & Maxwell, 2023) at para 11/11/5 as providing “a catch-all ground” (Judgment [34]).
The Court concluded its observations as follows (Judgment [35]):
"35 It is readily appreciable that, based on current authority, where an O 11 r 11 application is taken out in respect of a “banker’s book” to which s 175(1) is applicable, there would be a natural overlap between the factors the court must consider under O 11 r 11 and that of an application for a s 175(1) inspection order. Without deciding the issue, and assuming that it is equally open to a court to order disclosure under s 175(1) and O 11 r 11, I observe that it would be anomalous for the result of an application to differ depending upon whether the applicant chooses to proceed under s 175(1) or O 11 r 11(1). In both cases, the court would have to strike the proper balance between the juridical interests of the applicant in seeking access to the “bankers’ books” at issue and the confidentiality of the banker-customer relationship (see [18], [20]-, and [23] above).”
Significance. This case shows that when a party seeks to obtain documents from a bank, it is important to bear in mind the provisions relating to banking secrecy, and to consider how to bring the application. For now, it appears that such an application may be made pursuant to both s 175(1) of the EA and/or O 11 r 11 of the ROC 2021, provided that the applicant can satisfy the court that relevant requirements are met, though it is important to bear in mind also the nature of the cause of action in question.
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