NATIONAL COMMERCIAL BANK JAMAICA LTD V OLINT CORPORATION LTD (JAMAICA)

[2009] UKPC 16, Privy Council, Lord Hoffmann, Lord Rodger of Earlsferry, Lord Carswell, Lord Brown of Eaton-under-Heywood and Lord Mance, 28 April 2009

Banking – Bank closed client’s account fearing public association with the client’s alleged Ponzi scheme – Whether bank entitled to close account – Whether anti-competitive – Criteria for issuing an interlocutory injunction –Fair Competition Act, sections 19, 20, 34 –Banking Act, section 4 – Civil Procedure Rules 17.4(4)

The respondent company, Olint, was a client of the appellant bank. Its business was to provide administrative support to an investment club offering very high returns, allegedly a Ponzi scheme. Following some bad publicity, the bank closed the defendant’s account giving 32 days’ notice. Shortly before the termination date, Olint applied for an injunction against the bank preventing it from closing the accounts. The application was rejected at first instance but granted by the Court of Appeal until trial. This was the bank’s appeal of the Court of Appeal’s decision. It was alleged by Olint that the bank was acting maliciously, contrary to its statutory obligations under the Banking Act and the Fair Competition Act and with the intention of inducing breaches of contract between the company and members of the investment club whose monies had been deposited. The Privy Council allowed the appeal on the following grounds. There was no triable case under the Banking Act nor the Fair Competition Act. The regulatory provision in the Banking Act requiring the bank to have fit and proper persons as directors had not modified the bank’s contractual right to terminate the banking relationship. The case under the Fair Competition Act could not succeed. The bank did not have a dominant position and if it did, it had not abused it. A refusal to supply services was not a case of price-fixing and section 34(1)(b) must be read as confined to discrimination for the purpose of maintaining prices. Although at least one other bank had also closed the company’s accounts, there was no evidence of collusion. The final ground was inducement of breach of contract. That tort required the bank to know that it would cause the breach of a contract between the company and the members of the investment club and to intend to cause that breach. There was no evidence to that effect. There were also procedural reasons for why the order should not have been granted. There was no reason in this case why the order should be granted without notice to the bank – wherever possible, CPR 17.4(4) should be observed. Further, damages would have been an adequate remedy. Whether the injunction was prohibitory or mandatory, the underlying principle was that the court should take whichever course seemed likely to cause the least irremediable prejudice. The practical consequences should be examined on the particular facts of the case, rather than adopting a box-ticking approach and the factors should be weighted together.