Bank granted court order for other financial institutions to disclose customers’ contact information

A judge at the High Court in London had originally refused the applications, but later granted the orders for disclosure after being asked to reconsider the applications in light of a judgment in another case which represented a “significant extension of the earlier law”.

The judge, Master Matthews, was asked in January 2014 to deal with three paper applications made by Santander UK plc for “Norwich Pharmacal” orders for disclosure against the Royal Bank of Scotland, HSBC andNationwide.

It was alleged in each case that Santander had made a payment to the recipient bank for the account of that bank’s customer, mistakenly thinking that it had its own customer’s instruction and authority to make it, whereas in fact it did not.

In all cases Santander was unable to debit its customer’s account, and the payee neither returned the sum paid nor consented to his or her details being passed by the recipient bank back to the bank.

Although the bank knew to which recipient bank the payment had been made, and the branch sort code and account numbers concerned, it did not know the identity of the recipient bank’s customers, prompting the application to the court.

Master Matthews took the view that the Norwich Pharmacal jurisdiction enabled the court to order that the recipient bank disclose information to the claimant bank to identify the customer whose “wrongdoing” or alleged wrongdoing was facilitated by the defendant or in which the defendant was “innocently mixed up”, but he declined to make the orders sought as there was “no evidence of any wrongdoing” by the customer before the money arrived in his or her bank account.

Further, even if, contrary to that finding, the customer was guilty of a wrong, that could only be refusing to pay back the money once received and demand made for its return, because it was not legally wrong in itself passively to receive the money into the customer’s own bank account and in any event there was no evidence of a refusal by the customer to pay.

However, in July 2014, Mr Justice Birss delivered judgment in further applications made by Santander against a variety of other banks and building societies, in which the judge made the orders sought, following which the solicitors for the bank asked for reconsideration of earlier applications which were refused.

Master Matthews decided to grant the orders despite the fact he considered that the Mr Justice Birss’s decision on the applicability of the Norwich Pharmacal jurisdiction to the facts of these cases was “flawed”.

The judge explained that one of the points on which the applications were refused was that the claim in “restitution” – or “unjust enrichment” – was not a wrong for the purposes of the Norwich Pharmacal jurisdiction.

In the Santander case, however, counsel submitted to Mr Justice Birss that it was, citing in support the 1980 decision of the Court of Appeal in Bankers Trust v Shapira, and the judge held that a claim in restitution was a wrong capable of justifying a Norwich Pharmacal order.

“In our legal system, the law is developed by the judges. My appreciation of this judgment is that…it represents a significant extension of the earlier law,” Master Matthews said.

In a written judgment, Master Matthews said: “ince a High Court judge has after hearing argument, albeit only on one side, reached the conclusion that restitution is a sufficient wrong, and that the recipient bank has sufficiently facilitated the commission of the wrong, for the purposes of this jurisdiction, I consider that it is my duty to follow that decision, so that the courts speak with one voice on points of principle, unless and until a different view is reached at High Court judge level or above.

“It is for this reason that I have subsequently allowed applications for Norwich Pharmacal orders on similar facts. However, in such cases, in the exercise of my discretion I have not ordered the recipient banks to disclose information other than their own customer’s name and address.”

Master Matthews added: “If the applications that I previously refused are renewed …then assuming I was satisfied that it was otherwise proper to make the order, I would make an order for the disclosure in each case by the recipient bank concerned of the name and contact address of the third party, but not the telephone number, email address, or date of birth.

“I would also require an undertaking by the bank in terms such as ‘Not, without the permission of the court, to use any documents or information obtained as a result of this order, except for the purpose of enforcing its legal rights in connection with the mistaken payment ’.

“I would not require or allow the bank to use the information for the purpose generally of tracing the third party, because that would go too far. In theory, at least, it would allow the bank to trace him or her for the purpose of trying to sell him insurance.

“The undertaking I have suggested is wide enough to allow the bank to use the information for the purpose of tracing the account holder, so far as this was to enable the bank to enforce its legal rights against him or her.”