Re International Monetary Bank ((in Liquidation))

• Jurisdiction: Cayman Islands
• Judge: Summerfield, C.J.
• Judgment Date: 17 January 1978
• Court: Grand Court (Cayman Islands)
• Date: 17 January 1978

Re International Monetary Bank (In Liquidation)

Summerfield, C.J.

Grand Court

Banking law - Protection of bank's interest — Meaning of “interest” — Bank not entitled to advance own self — interest by disclosing confidential information about client in action to which client not party and bank has no legitimate claim against client.

Banking law - Confidential Relationships — Consent of principal — Majority consent of bank depositors — No authority to disclose confidential information about individual non — consenting depositor merely because consent from majority in value of depositors.

Appearances:

RA Alberga, Q.C. and H. Rutter for the liquidator;

S. Panton for the Attorney General as amicus curiae.

Summerfield, C.J.

1 The applicant is the liquidator of the International Monetary Bank (hereinafter called “the bank”) which was put into voluntary liquidation in December 1974. By an order of this court of January 1975 the winding up was ordered to be continued subject to the supervision of this court. On that basis the applicant seeks the directions of this court in relation to a suit he has instituted in his capacity as liquidator in the Circuit Court of the Eleventh Judicial Circuit in and for Dade County, Florida, Case No. 74– 37006, against the Bank of North Bay Village, George Davis and Maureen Davis for the recovery of a sum of approximately US$192,000 which he contends forms part of the assets of the bank.

2 Under the relevant procedure before the Circuit Court, the defendants George Davis and Maureen Davis caused to be served on the applicant's attorneys interrogatories dated December 6th, 1976. Interrogatory 7D requested “a list of any and all creditors, their addresses, the amounts claimed as well as a brief description of the nature of their claim.” On legal advice the applicant submitted the answer that:—

“…it seeks information not relevant to the subject-matter of this action and … not reasonably calculated to lead to the discovery of admissible evidence; and the Banks and Trust Companies Regulation Law, 1966 of the Cayman Islands, s.10(1) and (2) makes it an offence, inter alia, to disclose any information relating ‘to the affairs of a licensee or of any customer of a licensee….’ Accordingly no information can be supplied at this time regarding any creditors or claimants against International Monetary Bank. The plaintiff intends to make application to the relevant Cayman Islands court for guidance on this matter.”

3 By an order of the Circuit Court dated February 9th, 1977, that court reserved its ruling on the applicant's objection to answering that interrogatory and ordered further documents to be filed.

4 By letters sent out in July 1977 the applicant sought the approval of depositors with the bank to the disclosure of the requested details of themselves and their accounts for the purpose of the action. In reply, 44 depositors whose aggregate deposit represented 62.57% of the total deposits with the bank consented to the release of the information requested and 45 depositors representing 37.03% of the total deposits refused.

5 Through his attorneys in Miami the applicant offered to disclose to the defendants the information he had permission to disclose and also other limited information about other deposits without disclosing the identity of the other depositors but the defendants' attorneys indicated that this was not acceptable and, by motion, are seeking to compel the applicant to answer the interrogatories in full.

6 The applicant's attorneys in Miami have advised him that on the merits of the case he is likely to succeed but that if he fails to comply with the procedural rules and answer the interrogatories in full there is a strong possibility that his case will be dismissed for failure to comply and that, in any event, such failure would be likely to prejudice him in the presentation of his case.

7 The applicant is of the opinion that it is in the interest of the bank's creditors that he pursue the action to the best of his ability in the belief that he will succeed in recovering substantially all of the sum claimed which will then be available for distribution to creditors. Accordingly, he seeks the direction of this court on...