Case Study

Issue 

• Whether Darlington Bank is acting within its rights to combine the accounts that were opened in Jack’s name?
• Does Darlington Bank owe Jack a duty of confidentiality?
• What are the duties of the bank are regarding the transactions that Tom is channeling through account 2?

Rule

There are several rules and regulations which have shown the duty of the confidentiality in the common laws for the people. It has also shown that how people work and their possible duty of the confidentiality to keep the information safe. The duty of confidentiality is arrived from the common law interpretation that has been followed in the case of Tournier v National Provincial and Union Bank of England [1924] 1 KB 461. This case arrived from the contract between the customer and the bank which shows the duty of the people related to keeping data confidentiality.  The duty has been based on the expectation that the customer will assume that the bank will maintain the business of the customer financial and personal matters.  In the case of Tournier v National Provincial and Union Bank of England it has been stated that in some circumstances, the bank has the right to reveal the confidential information.  However, these certain circumstances have been revealed in the given case. Nonetheless, in the normal case, bank would not reveal the confidential data of the client to other person otherwise they will be responsible for the heavy penalties. The cases in which the bank can reveal the information are the exceptions that are first when the law requires the information, secondly there has been the interest of the bank for the disclosure, thirdly when there is the public duty to disclose the information and lastly when the client has given the consent even implicitly for the disclosure.  These are the certain cases in which bank would be bound to disclose the confidential information of client. Nonetheless, in the public interest, bank would be liable to disclose this information to government officer whenever bank would be asked. 

The Code of Banking Practice 2008 and the Privacy Act 1988 has provided various standards of conduct that are applied to the banks and has provided all the exceptions which  has been given in the case of Tournier.  This shows that bank is working under the contract and being party to the contract it could not make the violation of the banking laws and regulations. 

The contract law states that there must been two parties to enter into a valid contract and there are some essentials that must been satisfied for the contract to be valid. To enter into a valid contract it is required that essentials of contract must been satisfied. The five essentials are:-

• Offer and Acceptance- The offer has been made by one party that is called offeror. The offer does not deem to be completed till the time it is not accepted. The other party who accepts the offer than it is said to be called acceptance.  
• Consideration – The consideration is an amount, promise to pay something in exchange. It gives some type of acceptance to the other party. 
• Intention- The intention is an important part of the contract as without intention the contract cannot been valid. The intention binds the parties into the legal relations. The parties must have an intention to binding into an agreement. 
• Legal capacity- It is found that in order to enter into a valid contract it is required that the parties must have legal capacity to enter into the contract. 
• Free will- It is analyzed that both parties should be entered into the contract with their free will and they should not be forced for the same. 

The Federal Criminal Code Act 1995 (Cth) (Criminal Code)  in which Part 10.2 defines the money laundering offences as similar laws to these applies in Australia. The Australian federation police is the main authority that investigates the money laundering cases. In Lin v R [2015] NSWCCA case, it has been found that the gambling is a part of money laundering and shall been punished under various laws (Harvey, 2019). Nonetheless, in some of the country gambling and speculation is legal and would be considered accordingly. 

Application 

After assessing the case and reading all the required material, it is found that the facts of the case:-

• A student aged 18 years named called Jack 
• He opens two bank accounts in the Darlington bank
• Persuaded to the bank for overdraft
• After talks with the bank Jack signed the contract
• The clause has been in the contract that it has been authorized by the customer to the bank that it can link its accounts but without any approval
• The condition was only that Darlington bank should state its intention prior a week to combine its both accounts
• Jack does a part time job on Sunday
• The wages received by him in account 1 
• Jack has many expenses related to his hobbies
• The account is maximum time had been overdrawn with the limit of $5,000. 
• Jack’s dad earns money from an illegal gambling business
• To make money whitewashed he deposits the money into Jack accounts 2
• Bank tries to contact Jack to pay overdrafts but jack ignores that 
• Three weeks later the bank has combined the accounts and has informed Jack later.
• The bank has suspicious of the Jack’s account 

After assessing the case, it had been advised to the bank that according to the case Tournier v National Provincial and Union Bank of England. The case that has been applied on the does Darlington owes a duty of confidential information to the bank. Yes bank owes the duty of confidential information not be disclosed but according to the case study the confidential information was such that is the matter of law (Hansen, Treumer, & Andhov, 2018). Therefore the bank can leak the information that the information of the law and it is also the public duty.  Being in the public duty position, bank would be liable to disclose these given information whenever it is being asked. Nonetheless, bank would not be liable for any legal penalty and issues in this case (May, 2017).

The bank has linked the accounts as bank has tried to contact to the jack and he has ignored the messages and calls and therefore the bank has the right according to contract that it can link the accounts of the Jack if there has been overdraft. Thus bank has a right to combine the accounts of Jack.  In this case, bank has not made any mistakes and nor violated any of the banking laws and regulation. Bank has complied with the banking procedure which it needed to follow while disclosing any information about the client to officer. It was Jack who neglected the message and did not respond accordingly. Therefore, in this case, Jack would be considered as person who does not perform his action (Smits, 2017).

The bank has the duty to reveal the information to proper authority called Australian federation police that deal in frauds and money laundering cases. Therefore, any information revealed by bank to officer would not be considered as illegal act and Bank would not be questioned by the Jack for disclosing his personal information.  The bank will not been held guilty for revealing the information as applied in the case Lin v R [2015].  As per the rules and facts held in the case of Lin v R [2015], it is held that bank would be free from any of the liability for disclosing Jack’s personal information and would be held liable. Bank has performed its best duty by informing Jack about the case and investigation made by the officer for his account (Hook, 2016). 

Conclusion 

There are several facts and application of the rules which needs to be followed by the Bank and jack both. These both person are parties to the contract and has to perform their duties accordingly. In this case, bank was asked to disclose the personal information of Jack due to some reason. However, the case in which disclosure of the personal information was asked is given in the exceptional case in which bank could disclose the information. Therefore, bank would be free from any of the liabilities and would be considered right in this case.  It has been concluded that the bank has no fault in accordance with the laws. The bank has the right to link the accounts. The bank has reveal the confidential information as demanded by law. The bank has the duty to inform the proper authority in money laundering cases. In this case, Jack could not held bank liable for the breach of any of the laws and regulation neither in banking law nor of contract law.