Case Update: Singapore High Court holds no general implied duty of confidentiality between lender and borrower

International Financial Services (S) Pte Ltd v Old Mutual International Isle of Man Ltd Singapore Branch [2018] SGHC 127

Significance: the Singapore High Court held at [27] that there is no implied general duty of confidentiality between a lender and borrower.

Where an entity is tasked as an agent with keeping deposits, that duty creates a fiduciary relationship in the context of the management of the account. To say, in that context, that financial information relating to the account is confidential, is entirely reasonable.

The relationship is wholly different between an entity lending money and its customer.  In this case, the matters sought to be kept confidential are not matters of financial information revealed to secure the loan, but the existence of the debtor-lender relationship, the debtors’ default in payment and the lender’s determination to take further action.

Valerie Thean J thought that it would not be reasonable to regard such information as confidential. First, the risk of such information becoming public knowledge is a risk which borrowers in the market commonly bear, and one which incentivises commercial actors to borrow and spend prudently. Secondly, non-payment raises an expectation that a creditor would exercise his rights through any legitimate commercial means. To do so, disclosure must inevitably follow, first with advice from professionals, and then later, to the world at large, in the pursuit of any remedy. The fact of the relationship and the fact of default are commercial facts which cannot be said to be of a confidential nature unless expressly provided for.

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