Reconciling the obligations to divulge information to financial institutions and the duty of secrecy: legislative responses and comparative perspectives: part 2

A creditor under the common law in Australia, as shown in the previous article (Part 1), 1 is not under a duty to reveal

all facts with regard to the debtor and the loan that would be relevant to the decision of the surety or guarantor to

give a contract of suretyship or guarantee. The law relating to guarantees requires, inter alia, "disclosure of facts only

if concealment of those facts would otherwise misrepresent the transaction which the guarantor is undertaking as the

guarantee". 2 The leading case in respect of the bank's duty of secrecy or confidentiality is found in Tournier, 3 where

it was held that there is an implied term in the contract between a banker and customer that the information obtained

relating to the customers and their accounts should not be disclosed to third parties such as guarantors. In this case, Banks

LJ spelt out the exceptions available for bankers to disclose particular information about their customers-these being

"where disclosure is under compulsion by law; where there is a duty to the public to disclose; where the interests of the

bank require disclosure; and where the disclosure is made by the express or implied consent of the customer". 4