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Cite as: [1998] 2 IR 465, [1998] IEHC 46

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National Irish Bank v. RTE [1998] IEHC 46; [1998] 2 IR 465 (6th March, 1998)

THE HIGH COURT
1998 No. 1306p
BETWEEN
NATIONAL IRISH BANK LIMITED AND NATIONAL IRISH BANK FINANCIAL SERVICES LIMITED
PLAINTIFFS
AND
RADIO TELEFIS EIREANN
DEFENDANT

JUDGMENT delivered the 6th day of March, 1998 by Mr Justice Peter Shanley .

1. On the 30th of January, 1998 the Plaintiffs in this action made an ex parte application to the High Court in which they applied for and obtained an interim injunction. The form of injunction obtained was an injunction restraining the Defendant by itself, its servants or agents or otherwise howsoever from making any use whatsoever (and in particular from making any publication of) information falling within the categories described in the Schedule to the Plenary Summons. The categories identified in the Schedule to the Summons were:-


1. Any documentation or information identifying or tending to identify a
customer of the Plaintiffs.
2. Any information or documentation identifying or tending to identify an
account of a customer held with the Plaintiffs.
3. Any information or documentation identifying or tending to identify the
transactions on any account of any customer held with the Plaintiffs.
4. Any information or documentation identifying or tending to identify
investments made by or business transacted by any customer of the Plaintiffs.

2. A Notice of Motion was issued on the 30th January, 1998 which was returnable for the 9th February, 1998 in which the Plaintiff sought a number of reliefs, including the relief which it had obtained on its ex parte application: in addition to that relief the Plaintiffs sought an Order directing the Defendant, its servants or agents to deliver up to the Plaintiffs all documentation in their possession, power or procurement, consisting of or containing information falling within the categories described in the Schedule set out in the Plenary Summons.


THE BACKGROUND
(i) RTE is the State broadcasting authority and operates a national television service. National Irish Bank Limited is a company which has a banking business within and without the State. The second named Defendant (National Irish Bank Financial Services Limited) is a wholly owned subsidiary of National Irish Bank Limited (hereinafter referred to as NIB) and it provides services of a financial nature to customers of NIB.

(ii) On the 20th January, 1998, NIB received a letter from one Charles Bird Special Correspondent, RTE News. The letter indicated that RTE was working on a story for transmission the next day on NIB's involvment with Clerical Medical Insurance, a company based in the Isle of Man and New York. The letter contained a series of nineteen questions. Two of the questions are set out hereunder and they give a flavour of the contents of the letter of the 20th January, 1998.

"RTE News has learnt that in 1996 there were somewhere in excess of
$150 million in these CMI personal portfolio accounts being held at Wilton Terrace. Is this correct?"

"RTE understands that the initiative for the arrangement with CMI came from Financial Advice and Services division of NIB and was approved at Chief Executive level within the Bank. Is this correct?"

3. By letter dated the 21st January, 1998 and sent by fax and post, the Solicitors for NIB responded to Mr Bird's letter and said that, in their view, having regard to the contents of the letter, RTE were in possession of confidential information, which it would be wrongful for RTE to disclose or publish in any way. On Friday the 22nd January, 1998, RTE broadcast a story concerning the relationship between Clerical Medical Insurance and NIB. A further story was transmitted relating to that relationship on the 29th January, 1998. Again, the Solicitors for NIB, Messrs Matheson Ormsby & Prentice, wrote to the Director-General of RTE on the 29th of January, 1998, in which they sought an undertaking from RTE not to publish any confidential information in its possession, power or procurement relating to National Irish Bank or its customers. That undertaking was sought to be given before 12 noon on the 30th January, 1998, in default of which NIB's Solicitors indicated that they would be making an application to the High Court for injunctive relief. No such undertaking was given in consequence of which NIB and its subsidiary applied successfully to Mr Justice Smith for the interim injunction to which I have already referred and that injunction remains in force up to today's date.


(iii) NIB's application is to restrain RTE from using confidential information in the hands of RTE. They say that the letter of the 20th January, 1998 indicates (as it does) that Charles Bird has information which belongs to NIB, which is of a confidential nature. They say that publication of that information would damage the relationship of trust and confidence between the bank and its customers. They say that the bank's reputation will be irreparably damaged if there is disclosure of the information and such would result in a movement of customers from their bank. NIB says it prides itself in keeping the business affairs of their customers confidential.

(iv) RTE says that the information it has in its possession comes from a number of sources, including interviews with former employees of the bank and some of the bank's customers. It does not disclose whether the information includes documents, and if so, the nature of the documents: RTE has submitted that to disclose the nature of the information which it has (and whether it is of a documentary kind or otherwise), would be likely to have the effect of disclosing the source of such information. While RTE admits to having information about NIB which is not in the public domain, it says even if it attracts the protection of confidence, its publication is justified on grounds of the public interest: to better understand the position of RTE, it is useful to set out in general terms the subject of the information at issue.

(v) In an Affidavit sworn on behalf of RTE, Edward Mulhall, who is the Director of News of Radio Telefis Eireann, deposed (at paragraph 15) of his Affidavit to the nature of the scheme at issue:-

"In brief terms certain NIB customers were invited to participate in the scheme, which involved the closure of their accounts in the bank and the use
of the proceeds to purchase a life assurance linked investment bond from CMI Insurance Company Limited. Within days the most of the monies withdrawn for investment was back in the same bank branch in a money deposit account
deposited by CMI in trust for the investor. The bonds did not have a fixed term or lock-in period, with the result that the investors could gain access to their monies at any time."

4. Mr Mulhall then quoted from a brochure used, he says, by NIB officials to explain the scheme to its customers:-


" 1. CONFIDENTIALTY/SECURITY
Deposit is transferred out of existing account and reinvested in the names of a holding company. Therefore clients names does (sic) not appear on any account."

5. At paragraph 17 of his Affidavit, Mr Mulhall states:-


"Most of the monies invested by the bank's customers ended up back on deposit with the bank earning the same rate of interest than it had done before the investment was made."

6. He went on to say on the same paragraph that:-


"There appears to be no reason whatever why any responsible financial advisor would advise a client or customer to invest in such a scheme."

7. At paragraph 18 of his Affidavit, Mr Mulhall stated as follows:-


"The nature and structure of the scheme permitted investors to evade their taxliabilities and RTE are satisfied from the information in its possession that the greater part of the investors of the scheme invested in it for this reason. Furthermore, I say and believe that the information in the possession of RTE, derived from a number of sources including interviews with former employees of the bank and some of the bank's customers, indicates clearly that officials of the bank, in conjunction with local branch managers, targeted certain accounts which for various reasons were considered 'sensitive' for investment in this scheme. These 'sensitive' accounts included accounts falsely registered as non-resident accounts, accounts in fictitious names and accounts holding monies undeclared to the Revenue Commissioners".

(vi) There is no ambiguity whatsoever in RTE's allegation: It is expressly to the
effect that the scheme was used "by the greater part" of the investors for tax evasion and that the bank knew that the scheme could enable the customers to evade tax and they deliberately targeted persons who would be interested in such a scheme.

(vii) The bank, for its part, deny that it ever had a policy to act in the manner which facilitated or encouraged or achieved tax evasion by its clients. They say that they are conducting an investigation of their own to determine whether there has been any wrongdoing on the part of NIB, its servants or agents and if there has, they propose to notify the appropriate regulatory authorities.

THE SUBMISSIONS OF THE PLAINTIFF

8. NIB contend that it is not disputed but that RTE has in its possession information or documents which are secret and concern the business of NIB. NIB say that they are not certain as to the nature and the extent of the information in the possession of RTE but that the letter of Mr Bird of the 20th January, 1998 and the Affidavit of Mr Mulhall, are such, as to make it clear that the information in Mr Bird's possession (in whatever form) relates to customer accounts of NIB and internal decision-making of NIB relating to such accounts. It is submitted that such information clearly has the necessary character of confidence about it. The bank say they do not know how RTE came to be in possession of the information although it is clear that the information is of different varieties (customer interviews, ex-employee interviews and other sources). They do contend that the information (having the necessary quality of confidence about it) is information which is not in the public domain and which the bank has not authorised RTE to use and which they are entitled to enjoin RTE from using.


THE SUBMISSIONS OF THE DEFENDANT

9. The Defendant concedes it has confidential information which it has not been authorised by NIB to have or to use and which has not previously been in the public domain. To disclose the form or type of information would (say RTE) risk disclosing the source of the information. RTE concedes that the publication of such information would, in ordinary circumstances, amount to a breach of confidence but the law has long recognised, it says, a defence allowing publication where there is an overriding public interest in such publication. RTE says there is a compelling public interest in favour of publication in the present case because the information discloses the banks complicity in a scheme designed to evade tax and further discloses that the greater part of the investors (of some £30 million) had invested their monies for the purposes of tax evasion. It is worthwhile pausing to observe that the foregoing represents allegations of RTE which are denied by NIB and which remain to be established in evidence at the trial of this action. In the submissions of Counsel for the Plaintiff, Mr Nesbitt, and Counsel for the Defendant, Mr Feeney, I was referred to a significant number of authorities which are of much assistance to me and many of which are set out hereunder in my summary of the applicable legal principles.


THE APPLICABLE LAW
(a) Where a person in whom confidential information reposes discloses that information to the detriment of the party who has confided in him, he commits the tort of breach of confidence. The law recognises that a duty of confidence will arise in circumstances where confidential information is so reposed and the Courts will restrain any apprehended breach of such a duty of confidence or award damages for actual breach of that duty. To attract the duty of confidence, the information in issue must not be trivial information and must be information which is not already in the public domain. Finally, the public interest (for such it is) in the maintenance of confidences may in certain circumstances have to be balanced against the public interest favouring disclosure. While most claims for injunctions restraining disclosure of confidential information have related to commercial matters and relationships, nonetheless a range of other relationships have given rise to such claims and the law has been willing, if the circumstances of a relationship require it, to recognise the existence of an obligation of confidence and give redress for any apprehended or actual breach of confidence.

(b) It is common case that the character of confidence attaches to such of the information RTE has which derived from the information supplied by ex-employees of NIB and which derive from documents (if any) obtained by RTE from NIB; equally there is no dispute but there is a duty of confidence owed by RTE to NIB; the only matter, which has in reality, been at issue is whether the public interest in that confidential information remaining confidential outweighs the public interest which RTE says exists in making known the alleged tax evasion scheme and participants. The so-called "public interest" defence has its origins in the case of Gartside v. Outram 1856 26 LJCH 113 where Wood V.C. said at page 114:-
" There is no confidence as to the disclosure of iniquity" .

10. The defence, or exception, was considered (and extended) by Denning M.R. in Initial Services Limited v. Putterill and Anor 1967 (3) All England Reports 145, where at page 148, he said:-


"The exception should extend to crimes, frauds and misdeeds both those actually committed as well as those in contemplation provided always - and this is essential - that the disclosure is justified in the public interest".

11. It seems to me that disclosure of confidential information will almost always be justified in the public interest where it is a disclosure of information as to the commission or the intended commission of serious crime because the commission of such crime is an attack upon the State and the citizens of the State and such disclosure will always be in the public interest. While the disclosure of serious crime will always be in the public interest there is also a range of other activities (which are not necessarily criminal) the disclosure of which may also justify a breach of confidence on the grounds that its disclosure is also in the public interest. It would, I believe, be unwise to attempt to define the boundaries of the so-called exception of public interest and I refrain from doing so other than to observe (as Ungoed-Thomas J. did in Beloff v. Pressdram Limited 1973 1AER 241 at page 260) that:-

"Misdeeds of a serious nature and importance to the country"
will justify disclosure on the grounds that such disclosure is invariably in the public interest. In Lion Laboratories Limited -v- Evans 1984 2 AER 417 Stephenson L. J. expressed the principle thus (at page 423):-

"Some things are required to be disclosed in the public interest, in which case no confidence can be prayed in aid and to keep them secret and (inequity) is merely an instance of a just cause and excuse for breaking confidence."
(He was there adopting the views of Denning M.R. in Fraser v. Evans 1969 IQB 349 at page 362).
In Lion Laboratories Limited v. Evans, Supra , the Court of Appeal was considering the issue as to how it might approach, on an interlocutory application, a defence raised of "public interest" . Griffiths L J. said at page 435:-

"When the press raise the defence of public interest the Court must appraise it critically but if convinced that a strong case has been made out the press should be free to publish leaving the Plaintiff to his remedy in damages."

12. In considering how I should exercise my discretion in this case, it seems to me that I should follow the principles laid down by the Supreme Court in Campus Oil Limited V. the Minister for Industry and Energy Number 2 1983 IR 88. Accordingly, on an interlocutory application, in which an injunction is sought, I should first ask whether the Plaintiff has established in evidence that there was " a serious question" to be argued; in the event that the Plaintiff satisfies that test, the next question is whether damages are an adequate remedy; and, finally, if they are not an adequate remedy, where the balance of convenience lies - in other words, would it in all the circumstances be more oppressive on the Plaintiff to refuse an injunction that it would be on the Defendant to grant such an injunction? It seems to me that it is where the Plaintiff establishes that there is a serious issue to be tried and that damages are not an adequate remedy that one considers (under the head of balance of convenience) the competing public interests. As I have already identified, the first public interest is the preservation of confidences: the countervailing public interest is that of the public being kept informed on matters which are of real public concern. A further public interest, of course, is the public interest in preserving freedom of expression, which freedom of expression is enshrined in Article 40.6.i of Bunreact na hEireann where it is stated that:-


"The State guarantees liberty for the exercise of the following rights, subject to public order and morality:-
The right of the citizen to express freely their convictions and opinions."

13. In considering these rights, if the Court is satisfied that, on the interlocutory application, a strong case has been made out for the publication of the confidential information on a public interest basis, then the Court in its discretion should not grant the interlocutory injunction but (as Griffith L J. said in Lion Laboratories Limited v. Evans , Supra, at page 435) "leave the Plaintiff to his remedy in damages" .

14. As I have indicated, I am deciding this interlocutory application on the basis of the principles laid down in the Campus Oil Case, Supra: it might well be argued that the application, being in the nature of a quia timet application, should be decided having regard to the test adumbrated by Fitzgibbon Lord Justice in AG -v- Rathmines and Pembroke Joint Hospital Board 1904 1IR at page 161, where Lord Justice Fitzgibbon stated that a Plaintiff who seeks to restrain an anticipated commission of a tort must prove:-


"A well grounded apprehension of injury - proof of actual and real danger - a strong probability almost amounting to a moral certainty".

15. It seems to me that where the Court is dealing with circumstance where a defendant actually concedes that his aim, if not enjoined by the Court, is to publish confidential information belonging to the plaintiff ( and seeks to justify that publication on the grounds only of the public interest), the principles laid down in Campus Oil are a more appropriate guide than the more stringent evidential burden the Rathmines case would impose on NIB.


CONCLUSIONS
(i) It is common case that RTE is in possession of confidential information obtained from the Plaintiffs. How it got that information is presently a mystery but does not concern this Court at this stage. RTE proposes to publish the information and has refused to undertake to NIB not to do so or to return to NIB any documentary confidential information obtained by it. NIB has clearly established that there is a serious issue to be tried.

(ii) Equally NIB has satisfied me that the publication of the information may well have an adverse effect on its relations with its customers; they may well go elsewhere to other banks where their confidence is guaranteed. The effect of that exodus, if any, cannot be quantified in damages. Damages are therefore not an adequate remedy.

(iii) A consideration of the balance of convenience involves not only a consideration of the rights of both the Plaintiff and the Defendant but also the public interest in maintaining confidences and the countervailing public interest in the disclosure of certain types of information. As I have already indicated Article 40.6.i of the Constitution contains a guarantee to citizens that they shall be entitled to "express freely their convictions and opinions" . If one allows that RTE is entitled to invoke Article 40.6.(i) it should be remembered that the Article expressly cautions that the State shall endeavour to ensure that organs of public opinion "shall not be used to undermine public order or morality or the authority of the State".

16. Section 18(1) of the Broadcasting Act, 1960 (as amended) provides that the authority, in its news and current affairs coverage, shall not express its own views but ensure its coverage is presented in an objective and impartial manner. This limitation in the coverage by the authority of its news and its current affairs was undoubtedly influenced by the provisions of Article 40.6.i of Bunreach na hEireann NIB has suggested that the statutory provision has the effect of prohibiting RTE from disclosing the confidential information or documents it has obtained, or from making any observations thereon, as such would, says NIB, represent RTE's "own views" and as such their broadcast would be an infringement of Section 18(1) of the 1960 Act (as amended). While RTE are undoubtedly constrained by Section 18(1) of the 1960 Act in the expression of its own views, I am not going to conclude, on the evidence before me on this application, that a disclosure of the confidential information or documents at issue in this case, or any analysis of such information or documents, would necessarily amount to a breach of Section 18 of the 1960, Act. Indeed, I will presume that RTE in relation to the broadcast of any material involving the documents and information sought to be injuncted will abide the statutory obligations of objectivity and impartiality imposed on them by Section 18 of the 1960 Act: if NIB were not to obtain interlocutory relief on this application, such would not be a licence to RTE to infringe the law.

17. Apart from any freedom of expression belonging to RTE, one must balance against the public interest in preserving confidences, the public interest in favour of disclosure of serious wrongdoings. In the present case, RTE unequivocally alleges that NIB was complicit in a scheme designed to enable its customers to evade tax and further, that the "greater part" of the NIB customers who invested in the scheme did so to evade tax. The charges could not be more explicit or serious. If they are correct they will have serious consequences for NIB and its customers involved in the scheme for the purpose of tax evasion. If they are incorrect that will have serious consequences for RTE. RTE say that the conclusions it has reached are based on a number of sources of information including interviews with ex-employees and with some customers. It also relies on the brochure that advertises the scheme and it draws the Court's attention to the advertised advantage that the:-


"Deposit is transferred out of an existing account and reinvested in the names of a holding company. Therefore, clients name does (sic) not appear on any account".

18. RTE draws attention to the fact that the money of the customer ends up back in NIB on deposit earning the same rate of interest which it had done before the investment was made. It says that there is no reason whatsoever for a customer to invest in such a scheme other than to avail of the anonymity and therefore the tax evasion potential of the scheme. I am quite satisfied that the public interest defence which has been raised on this application has not been raised frivolously and that RTE has made out a strong case (which may or may not succeed at trial). It is clear that RTE proposes to stand over its allegations, and I am satisfied that in such circumstances I should allow publication of the confidential information preferring, as I do, the public interest in the disclosure of such information as against the interest in preserving its confidence. I should observe that whilst I have adverted to RTE having made out "a strong case" (being the test proposed by Griffith L. J. at the interlocutory stage: see Lion Laboratories Limited v. Evans, Supra, at page 435), it is only a case made out on Affidavit on an interlocutory application: it may well be at the trial of this action, witnesses from or on behalf of NIB will satisfy the trial Judge that there was no basis for the public interest exception which allowed disclosure: if that be so, RTE will bear the consequences of such a determination. For the present, however, I will discharge the ex parte injunction and refuse the reliefs sought on the Notice of Motion. I will reserve the costs.

© 1998 Irish High Court

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