ADI Residents Action Group and Department of Finance and Administration and Anor
[2001] AATA 45
•29 January 2001
DECISION AND REASONS FOR DECISION [2001] AATA 45
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2000/232
GENERAL ADMINISTRATIVE DIVISION )
Re ADI RESIDENTS ACTION GROUP
Applicant
AndDEPARTMENT OF FINANCE AND ADMINISTRATION
Respondent
AndLEND LEASE DEVELOPMENT PTY LIMITED
Party Joined
DECISION
Tribunal Senior Member M D Allen
Date29 January 2001
PlaceSydney
Decision The decision under review is affirmed.
(Sgd) M D ALLEN
..............................................
Senior Member
CATCHWORDS
FREEDOM OF INFORMATION - Whether documents being Heads of Agreement and a Development Agreement should be released. Whether obligation of confidence existed. Would disclosure be reasonably expected to diminish commercial value of the information contained in the documents. Was a public interest factor relevant where not specified in the exemption section relied upon.
Freedom of Information Act 1982 - ss3, 22, 40, 43, 45 and 61
Searle Australia Pty Ltd v Public Interest Advocacy Centre 36 FCR 111
Re Baueris and Commonwealth Schools Commission, Department of Education 10 ALD 77
Department of Health and McKay v Jephcott 9 ALD 35
Telstra Australia Limited and Australian Competition and Consumer Commission [2000] AATA71
Director of Public Prosecutions v Kane (Unreported Supreme Court NSW No 11386 of 1997; Hunt CJ)
Attorney-General for the United Kingdom v Heinemann Publishers Australia Pty Ltd 10 NSWLR 86
Moorgate Tobacco Co Limited v Philip Morris Limited [No 2] (1984) 156 CLR 414
Gill v Department of Industry, Technology and Resources & Ors [1987] VR 681
Re Marple and Department of Agriculture 9 VAR 29
Attorney-General's Department v Cockcroft 10 FCR 180
REASONS FOR DECISION
29 January 2001 Senior Member M D Allen
By application made 10 February 2000 the Applicant which is, as its name suggests, a community action group, sought review of a decision by an officer of the Respondent to deny to the Applicant access to two documents, namely:
(1)a document dated may 1994 and titled "Heads of Agreement between Australian Defence Industries Ltd and Lend Lease Development Pty Limited"; and
(2)a document dated September 1994 and titled "Development Agreement between Australian Defence Industries Ltd and Lend Lease Development Pty Limited".
By order dated 15 November 2000 the Tribunal directed that Lend Lease Development Pty Limited be joined as a party to this application.
The said application for review came on for hearing before me in Sydney on 12 and 13 December 2000. At that hearing the following documents were taken in as exhibits, namely:
T1 – T11: The documents prepared for the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975
Exhibit A1: The affidavit of Colin Kenneth Audet dated 6 December 2000
Exhibit A2: Copy letter from the Humane Society to Applicant dated 4 December 2000
Exhibit A3: Copy letter from Nature Conservation Council of NSW Inc, dated 5 December 2000, addressed to the Administrative Appeals Tribunal
Exhibit A4: Copy letter from World Wide Fund For Nature to Applicant dated 6 December 2000 to Applicant
Exhibit A5: Copy letter from National Parks Association of NSW to Applicant dated 6 December 2000
Exhibit A6: Copy letter from Hawkesbury Nepean Catchment Management Trust to Applicant dated 11 December 2000
Exhibit A7: St Marys Masterplan – four volumes
Exhibit R1: Affidavit of Megan Coombs sworn 11 December 2000
Exhibit R2: Affidavit of Megan Coombs sworn 18 November 2000
Exhibit R3: Affidavit of William Thomas Mitchell sworn 11 December 2000
Exhibit R5: Company Search – ADI Limited
Exhibit R6: Joint Venture Agreement Novation Deed dated 1 October 1999
Exhibit R7: Schedule to Joint Venture Agreement Novation Deed (Confidential Exhibit)
Exhibit PJ1 : Affidavit of Joe Banek sworn 4 December 2000
Exhibit PJ2 : Affidavit of Joe Banek sworn 12 December 2000 (Confidential Exhibit).
In addition, oral evidence was given by Mr Audet who is the current Chairman and spokesman for the Applicant, Ms Coombs of the Department of Finance and Administration, and Mr Mitchell, the General Manager of Comland Limited, the successor to ADI Limited.
The background to the application is a decision taken circa 1991 by ADI Limited, no doubt at the direction of the government of the day, to dispose of the St Marys Ammunition Factory in Western Sydney and the surrounding land. This land originally had been acquired by the Department of Defence but was transferred to ADI Limited. The area in question consists of 1535 hectares. Apart from the buildings of the ammunition factory itself and dispersed ammunition bunkers, the remainder of the site remains in its natural state and contains a population of native animals.
As a result of a tendering process, ADI Limited signed a Heads of Agreement document with the Party Joined on 3 May 1994 and on 1 September 1994 the parties signed a Development Agreement. It is these documents to which the Applicant seeks access pursuant to the Freedom of Information Act 1982 (the FOI Act).
Both ADI Limited and ComLand Limited are what are known as GBEs (a Government Business Enterprise). A GBE is a commercial entity established by the Commonwealth government to provide commercial services.
Mr Mitchell, in his affidavit of 11 December 2000 (Exhibit R4), states that ComLand Limited on 1 July 1999 acquired the land and the improvements thereon from ADI Limited at both St Marys in Sydney and at Maribyrnong in Victoria. The St Marys land is now owned by a subsidiary company of ComLand Limited, namely St Marys Land Limited, and Exhibit R6 is the Joint Venture Novation Deed between ADI Limited, St Marys Land Limited and the Party Joined by which St Marys Land Limited was substituted for ADI Limited.
ComLand Limited is incorporated under the Corporations Law and has a board of four directors, three of whom are from the private sector and one who is an officer of the Department of Finance and Administration. There is but one shareholder, the Minister of Finance who holds that share on behalf of the Commonwealth.
The Development Agreement between ADI Limited and the Party Joined allows for a mix of developments to take place on the former ammunition factory site. This includes housing plus infrastructure such as roads, shops, schools, recreational and sporting facilities, plus a considerable amount of parkland. The development proposal has been the subject of extensive public consultations and Exhibit A7 is a series of four volumes of a glossy production by the party Joined referred to as the St Marys Masterplan. As I understand Mr Audet's evidence, a copy of this document is available to the public at the Municipal Library conducted by the Penrith City Council.
The Applicant's preferred use of the site is as a Regional Park with the whole site in public ownership. Subsection 11(2) of the FOI Act provides that the motives for a FOI request are irrelevant, and although Mr Audet candidly admitted that his organisation wished to obtain copies of the documents to ascertain if they contained any material which would assist its lobbying efforts against the current planned developments, that motive cannot affect the outcome of these proceedings.
Document T11 is the decision under review. In refusing access the Review Officer in the Respondent Department referred to s45 and para 40(1)(d) of the FOI Act. On review this Tribunal is, however, not restricted to those grounds – see Searle Australia Pty Ltd v Public Interest Advocacy Centre 36 FCR 111.
Before the Tribunal the Respondent submitted that the following provisions of the FOI Act would found a claim for exemption from production, namely paras 40(1)(d), 43(1)(b) and (c)(i) and (ii) and s45. Those provisions read:
"40. (1) Subject to subsection (2), a document is an exempt document if its disclosure under this Act would, or could reasonably be expected to -
…(d)have a substantial adverse effect on the proper and efficient conduct of the operations of an agency; …
43. (1) A document is an exempt document if its disclosure under this Act would disclose:
(a)…
(b)any other information having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed; or
(c)information (other than trade secrets or information to which paragraph (b) applies) concerning a person in respect of his or her business or professional affairs or concerning the business, commercial or financial affairs of an organization or undertaking, being information:
(i)the disclosure of which would, or could reasonably be expected to, unreasonably affect that person adversely in respect of his or her lawful business or professional affairs or that organization or undertaking in respect of its lawful business, commercial or financial affairs; or
(ii)the disclosure of which under this Act could reasonably be expected to prejudice the future supply of information to the Commonwealth or an agency for the purpose of the administration of a law of the Commonwealth or of a Territory or the administration of matters administered by an agency.
…
45. (1) A document is an exempt document if its disclosure under this Act would found an action, by a person other than the Commonwealth, for breach of confidence.
(2) Subsection (1) does not apply to any document to the disclosure of which paragraph 36(1)(a) applies or would apply, but for the operation of subsection 36(2), (5) or (6), being a document prepared by a Minister, a member of the staff of a Minister, or an officer or employee of an agency, in the course of his or her duties, or by a prescribed authority in the performance of its functions, for purposes relating to the affairs of an agency or a Department of State unless the disclosure would constitute a breach of confidence owed to a person or body other than -
(a)a person in the capacity of Minister, member of the staff of a Minister or officer of an agency; or
(b)an agency or the Commonwealth."
In its submissions the Party Joined placed emphasis upon para 43(1)(b) and s45 of the FOI Act. If the Party Joined were to succeed upon either of those particular grounds for exemption from production then that would be an end of the matter and I mean no disrespect to the Respondent's helpful submissions by concentrating upon para 43(1)(b) and s45 of the FOI Act in these reasons.
Considerations of the abovementioned provision of the FOI Act cannot be undertaken without regard to s3 and subs61(1) of the said Act. Section 3 reads inter alia:
"3. (1) The object of this Act is to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth by -
(a)making available to the public information about the operations of departments and public authorities and, in particular, ensuring that rules and practices affecting members of the public in their dealings with departments and public authorities are readily available to persons affected by those rules and practices; and
(b) creating a general right of access to information in documentary form in the possession of Ministers, departments and public authorities, limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by departments and public authorities; and
(c)creating a right to bring about the amendment of records containing personal information that is incomplete, incorrect, out of date or misleading.
(2) It is the intention of the Parliament that the provisions of this Act shall be interpreted so as to further the object set out in subsection (1) and that any discretions conferred by this Act shall be exercised as far as possible so as to facilitate and promote, promptly and at the lowest reasonable cost, the disclosure of information."
Whereas subs61(1) reads:
"61. (1) Subject to subsection (2), in proceedings under this Part, the agency or Minister to which or to whom the request was made has the onus of establishing that a decision given in respect of the request was justified or that the Tribunal should give a decision adverse to the applicant."
Section 22 of the FOI Act permits a document to be released with deletions. I have perused the two documents the subject of this application and do not consider that s22 is applicable in this matter. Obviously the release of the purely formal parts of the said documents would not meet the Applicant's claim.
At the outset I accept the submissions of the Party Joined that where the legislature has imposed a public interest test in determining whether or not a document should be released, it has specifically said so – cf subs40(2) to s43 and s45.
If Searle Australia v Public Interest Advocacy Centre 36 FCR 111 at 125 is cited for the proposition that an indirect public interest test can be implied into the legislation even though such a test is not expressly stated by the draftsman, the comments by the Court referred to the word "unreasonably" in subpara 43(1)(c)(i) of the FOI Act and no doubt by taking a purposive approach to interpretation that can be justified so far as relates to subpara 43(1)(c)(i) but no such test can be imported into s45 or para 43(1)(b) which refer to a breach of confidence or the destruction of commercially valuable information and do not address reasonableness. To import such a test would require adding words to the legislation.
In Re Baueris and Commonwealth Schools Commission, Department of Education 10 ALD 77 at 85 the Tribunal (the Honourable Sir William Prentice, Dr Renouf and Mr Stevens) rejected the proposition that s45 required the public interest to be considered. In so ruling they relied upon the earlier decision of the Full Court of the Federal Court in Department of Health and McKay v Jephcott 9 ALD 35, particularly the judgment of Davies J who said (at p40 9 ALD):
"… The paragraph is unequivocal in terms and, in the context, has a sensible operation. It should be read according to its terms. No ground exists for implying a qualification. As Lord Mersey said in Thompson v Goold & Co [1910] AC 409 at 420; 'It is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do.'"
Similar comments are equally apposite to para 43(1)(b) of the FOI Act.
Re Baueris supra was taken on appeal – see 13 ALD 470. However, the appellate Judge, Beaumont J stated at 13 ALD p471 that the argument regarding subs45(1) containing a public interest element was not pursued before the Federal Court on appeal.
As to what will found an action for breach of confidence, in Telstra Australia Limited and Australian Competition and Consumer Commission [2000] AATA71 Deputy President Mcmahon stated:
"12. Clearly an application for exemption under section 45 must be based upon a quality of confidentiality in the material contained in the document. In Re Kamminga and Australian National University 15 AAR 297 at 304 and 305, this Tribunal (presided over by its President) adopted as the appropriate test to be applied in section 45 cases a passage from the dissenting judgement of Gummow J in Corrs Pavey Whiting and Byrne v Collector of Customs (1987) 14 FCR 434 at 443. The Tribunal (quoting His Honour) said:
'It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff: (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question; and must also be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence; and (iv) there is actual or threatened misuse of that information: … It may also be necessary as Megarry J thought probably was the case (Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 48), and as Mason J (as he then was) accepted in the Fairfax decision was the case (at least for confidences reposed within government), that unauthorised use would be to the detriment of the plaintiff.'
The Tribunal adopts this passage as an appropriate test to apply in determining whether an action would lie against the Commonwealth."
I respectfully adopt Deputy President McMahon's reasoning as fully applicable to this matter.
Just what constitutes the equitable obligation of confidence was also discussed by Hunt CJ (Common Law Division) in Director of Public Prosecutions v Kane (Unreported Supreme Court NSW No 11386 of 1997; Hunt CJ). At p6 of his unreported reasons for judgment Hunt CJ says:
"A convenient statement of principle in relation to the equitable obligation of confidence is to be found in the dissenting judgment of Gaudron J in Johns v Australian Securities Commission (1993) 178 CLR 408 at 459-460:
'The jurisdiction to grant equitable relief with respect to confidential information is not in doubt. Nor is it in doubt that the basis for the jurisdiction lies in an obligation of conscience. The question whether there is an obligation of that kind ordinarily depends on the 'circumstances in or through which the information was communicated or obtained (Moorgate Tobacco Co Ltd v Philip Morris Ltd [No 2] (1984) 156 CLR 414 at 438).' However, other circumstances may be relevant when it is claimed that persons who were not parties to the original confidence are bound by it or come under a duty with respect to the information involved."
His Honour then says at pp6 and 7:
"The situation in which equitable relief with respect to confidential information is more usually sought is that described by Sir Robert Megarry V-C in Malone v Metropolitan Police Commissioner ( [1979] Ch 344 at 361):
'If A makes a confidential communication to B, then A may not only restrain B from divulging or using the confidence, but also may restrain C from divulging or using it if C has acquired it from B, even if he acquired it without notice of any impropriety …. In such cases it seems plain that, however innocent the acquisition of the knowledge, what will be restrained is the use or disclosure of it after notice of the impropriety.'"
And his Honour added:
"It is nevertheless also clear from such cases that, where the information has already been passed on, equitable relief is available against that third party as well, and (as Sir Robert Megarry points out) however innocently that third party may have acquired that information. Nor does there need to be impropriety on the part of the person from whom the third party acquired it. It is sufficient if it were given to the third party inadvertently, once that party learns that it had been obtained in breach of confidence. That is made clear by the second paragraph of the passage which I have quoted from the judgment of Gaudron J in Johns."
In this matter the circumstances in which the two documents in question came into the hands of the Respondent are explained in the affidavits of Ms Coombs and Mr Mitchell.
In Exhibit R1 Ms Coombs states:
"4. As Branch Manager of the CSAU I have a knowledge of the operations of Government Business Enterprises (GBEs), and have been involved in the monitoring of GBEs since 1990. A GBE is a commercial entity established by the Commonwealth to provide commercial services. The three broad criteria for a Government Business Enterprise are that the entity operates on a commercial basis, the entity trades outside of the public sector and it is not primarily a regulatory body.
5.GBE's operate on the principles of competitive neutrality, in accordance with the Competition Principles Agreement 1995 entered into by the Commonwealth and State and Territory governments. The competitive neutrality principles require that government business activities do not enjoy net competitive advantages over their private sector competitors simply as a result of their public ownership.
6.…
7.It is public knowledge that in 1999 the assets of a GBE called ADI Limited (ADI) were sold by its sole shareholder the Commonwealth. The documents for which exemption has been claimed were provided by ADI to the Office of Asset Sales and information Technology Outsourcing (OASITO), an autonomous office within the Department, in relation to the proposed sale by the Commonwealth of ADI's assets.
8.…
9.I am informed by Mr Anthony Eaton of OASITO, the officer who headed the project team for the sale of ADI's assets, and I believe, that ADI's rights and responsibilities in respect of the St Marys land development project were transferred to ComLand during the sale of ADI's assets in 1999. I am also informed by the said Anthony Eaton, and I believe, that before ADI provided the joint venture documents to OASITO, a deed of confidentiality was entered into between ADI and the Commonwealth on 10 September 1997, in which the Commonwealth undertook to use the information only for the purposes for which it was provided, namely, to inform itself and to provide due diligence access for the purposes of a proposed sale of the assets of ADI. Access to the documents was conditional upon proposed recipient of information entering into a similar deed. I refer to the copy of the Confidentiality Deed annexed to my affidavit of 22 November 2000."
In Exhibit R2 Ms Coombs stated:
"3. All the documents for which exemption has been claimed were provided by the government-owned corporation ADI Limited (ADI) to the Office of Asset sales and Information Technology Outsourcing (OASITO), in relation to the proposed sale of ADI on behalf of its owner and sole shareholder, the Commonwealth of Australia. OASITO is an executive agency of the Portfolio. The documents concern a joint venture agreement entered into between ADI and a private sector corporation for the development of a parcel of land at St Mary's (sic) in Sydney. ADI's rights and responsibilities were assumed by ComLand during the sale of ADI in 1999.
4.Prior to the documents being provided to OASITO by ADI, a deed of confidentiality was entered into between ADI and the Commonwealth on 10 September 1997, in which the Commonwealth undertook to use the information only for the purposes for which it was provided, namely, to inform itself and to provide due diligence access for the purposes of a proposed sale of ADI. Authorisation was conditional upon the proposed recipient of information entering into a similar deed of confidentiality. A copy of the Deed is attached hereto and marked with the letter 'A'.
5.The Deed defines 'confidential information' to include the whole or part of any material or information which has commercial value to ADI other than that which is public knowledge. To the best of my knowledge no authorisation has been given to the Commonwealth to disclose any of the documents or parts of documents to any other person otherwise than under the Deed. Neither has the Commonwealth been legally compelled to disclose any of the information contained in the documents. The Department has been advised that disclosure without such authorisation or compulsion may amount to a breach of the Deed.
6.Included in the information provided by ADI to OASITO is information pertaining to LendLease Development Limited (LendLease), the private sector corporation with which ADI had entered into a joint venture agreement. Prior to this information being provided by ADI to OASITO, the consent of LendLease was sought and obtained for the same limited purpose of ensuring due diligence in the sale process. All documents provided by ADI have been kept secure."
Mr Mitchell, in his affidavit of 18 November 2000 (Exhibit R3), stated:
"2. Comland Limited (ComLand) is a government business enterprise (GBE) which conducts property development activities in the open market, often in association with the private sector. ComLand's profits return to the Commonwealth through dividends and its profitability depends on being able to compete effectively in the wider marketplace.
3.In 1999, ComLand entered into a series of instruments by which it assumed the rights and responsibilities of the former Commonwealth-owned company ADI Limited (ADI) under its joint venture agreement with Lend Lease Development Limited (Lend Lease) for the development of land at Penrith/St Marys in New South Wales. Lend Lease is a private sector property development company.
4.I understand that at the time of entering into the Deed that the joint venture agreement had been provided to the Department of Finance as part of the due diligence requirements attaching to the sale of ADI. I understood, however, that the Commonwealth had entered into a Deed of Confidentiality which prevented it from disclosing the documents to other parties, and we also understood that by assuming ADI's rights and responsibilities the protection of the Deed extended to ComLand also. This was an important point for ComLand as the ability to function in the general market depends upon our being allowed to maintain the privacy of our commercial arrangements in the same way as our competitors."
In his later affidavit of 11 December 2000 (Exhibit R4) Mr Mitchell stated:
"15. Prior to the sale of ADI's assets, in which I was involved as General Manager (Property), ADI provided information about the St Marys project to the Department of Finance, and in particular to the Office of Asset Sales and Information Technology Outsourcing, to assist with the due diligence requirements of the sale (that is, the process to establish there has been no negligence or misrepresentation in the transaction). ADI provided all information sought, including minutes of the Board of Directors, reports, and all relevant information. ADI gave its wholehearted co-operation in the sale. The information was provided under a Deed of Confidentiality, and ComLand assumed ADI's rights and responsibilities under that Deed when it took over the St Marys project.
16.Under paragraph 1.1(a) of the Deed of Confidentiality, the term 'confidential information' is defined so as to include the whole or part of any material or information which has commercial value to ComLand other than that which is public knowledge. ComLand has not given permission to the Commonwealth to disclose the material which is at issue in this matter, and the information has not become public information.
17.Although the documents are now six years old, the project is still current and some aspects of the project are still under negotiation with State and local government bodies, or have yet to be contracted out. The methodology contained in the documents has an ongoing commercial value for this and for other developments. ComLand regards the information as having continuing sensitivity and considers that the material remains inherently confidential despite the effluxion of time."
There was nothing in the cross-examination of Ms Coombs and Mr Mitchell which caused me to have reservations about the matters they deposed to as set out above.
Mr Banek, the Development Manager of the Party Joined, stated in his affidavit of 4 December 2000 (Exhibit PJ1):
"22. The process by which LLD came to be selected as joint venture partner was one in which commercial sensitivity and confidentiality was involved from the beginning. This aspect of the relationship continued in relation to the Documents. Thus the Heads of Agreement is clearly marked 'STRICTLY CONFIDENTIAL' at the top and bottom of every page.
23. Although the Development Agreement is not marked in this way, essentially the same considerations apply as to why the details of the document are commercially sensitive and confidential. The reason for the difference, so far as I can recall, is that the details of the Heads of Agreement were particularly sensitive until the Development Agreement had been completed. Once this was done, one particular reason for confidentiality had been removed, but this did not affect the other reasons why the details of the Agreement are confidential and commercially sensitive, set out below in Part E. It was my understanding that the Development Agreement, as well as the Heads of Agreement, was subject to a duty of confidence."
Mr Banek was not required for cross-examination.
Given the above evidence I find:
(i)the information can be identified with specificity, namely the terms and conditions set out in the two documents the subject of the application;
(ii)the information is inherently confidential. As stated in Mr Banek's affidavit, the Heads of Agreement is marked "STRICTLY CONFIDENTIAL" and the Development Agreement was regarded as confidential. They were released for a limited purpose, namely the due diligence process undertaken for the sale of ADI Limited. That access was itself subject to a confidentiality undertaking (see Ms Coombs in Exhibit R1, para 9, and in cross-examination transcript p62); and
(iii) a mutual understanding of confidence existed. The information was received by the Commonwealth subject to a deed of confidentiality. See Exhibit R2 para 4. Likewise the consent of the Party Joined was obtained to the Commonwealth receiving the documents for a limited purpose, namely ensuring due diligence in the sale process.
The confidentiality deed annexed to Ms Coombs' affidavit of 22 November 2000 is between the Commonwealth of Australia and ADI Limited. Recital D reads:
"In the course of the Project Confidential Information will be provided to the Commonwealth and the Advisers and the Commonwealth has undertaken to preserve the confidentiality of the Confidential Information, including entering into a appropriate obligations of confidentiality with the Advisers, in accordance with this Deed."
The Novation Agreement (Exhibit R6) is between ADI Limited (described as the Current Party), St Marys Land limited (described as the New Party), and the Party Joined (described as the Continuing Party). Clause 2.1(a)(ii) of the said agreement reads:
"the Continuing Party has rights against, and owes obligations to, and is bound by and part of all agreements agreed to, accepted imposed on or entered into (knowingly or otherwise) with, the New Party in connection with the Joint Venture Agreements,"
Without more it seems to me that the terms of these agreements are such as to permit both ComLand Limited or its subsidiary St Marys Land Limited, as the successor to ADI Limited, or the Party Joined to bring an action against the Commonwealth for breach of confidence should it seek to disclose the information contained in the two documents the subject of this application for review.
Even if I am wrong on that point, as was pointed out by McHugh JA (as he then was) in Attorney-General for the United Kingdom v Heinemann Publishers Australia Pty Ltd 10 NSWLR 86 at 189:
"Independently of contract, an enforceable equitable obligation of confidence may arise if confidential information is imparted in circumstances imputing an obligation to keep it confidential: … Sometimes the information may be conveyed with the express statement that it is confidential. But perhaps more frequently the obligation of confidence is to be deduced from the circumstances. In a business context, relevant circumstances will include the extent to which the information is known inside and outside the business, the measures taken to guard the secrecy, the value of the information to the person disclosing the information and his competitors, the amount of effort and capital invested in acquiring the information and the ease with which it can be acquired by others: … But that list is not exhaustive: … In other cases the obligation will arise simply from the common expectations or understandings of people in general. …"
Cf Deane J in Moorgate Tobacco Co Limited v Philip Morris Limited [No 2] 156 CLR 414 at 438 where his Honour said of the proposition that there was an equitable jurisdiction to grant relief against an actual or threatened abuse of confidential information not involving any tort or any breach of some express or implied contractual provision or some wider fiduciary duty or copyright or trademark:
"A general equitable jurisdiction to grant such relief has long been asserted and should, in my view, now be accepted: … Like most heads of exclusive equitable jurisdiction, its rational basis does not lie in proprietary right. It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained."
See also the Full Court of the Federal Court in Wiseman v The Commonwealth (Unreported Full Court of the Federal Court 24 October 1989).
To my mind, it is quite clear and I so find, that at the time the Department of Finance and Administration obtained the two documents they were supplied by ADI Limited, and with the concurrence of the Party Joined, on the understanding that they would be held as confidential documents. Should the Respondent now seek to resile from this obligation, an action for breach of confidence could be brought not only by ADI Limited or its successors but also by the Party Joined.
That being so the claim for exemption from disclosure pursuant to s45 has been made out and the decision under review will be affirmed.
Notwithstanding that it is unnecessary to do so I will also discuss, albeit briefly, the claim for exemption pursuant to para 43(1)(b) of the FOI Act.
As stated above, I am satisfied no public interest element is involved in a consideration of a claim for exemption pursuant to para 43(1)(b) of the FOI Act.
The commercial value of the information in the documents was adverted to by Mr Banek in his affidavit at paragraphs 7, 30, 31, 32, 36 and 40. Those paragraphs read inter alia:
"7 …
·The Documents set out the approach which Lend Lease takes towards such major developments. This information has commercial value which would be greatly diminished if it were released, causing a significant adverse effect on LLD. Competitors would be placed in a better position to win tenders against the company if they possessed such information. Also, future development partners might seek to extract further concessions from the company by referring to what LLD has done in the past.
…
30There are three types of damage that I believe could have a significant effect on the business of LLD if the details in the Documents were able to be made public under the FOI Act.
31First, it would reveal commercially valuable information, and trade secrets, to potential competitors of LLD, and this could be used by those competitors to the detriment of LLD. For example, the greater the degree of disclosure of the nature of the commercial relationship established between the parties (eg in relation to the management/decision-making process within the relationship, or the provisions made for dispute resolution or for termination of the agreement), then the greater the prospect that a competitor would be able to exploit that information by offering more attractive arrangements in the future.
32Secondly, it would reveal this type of information to potential future partners of LLD, and this would enable them to gain bargaining advantages, and to extract further concessions, in relation to future joint venture projects. For example, the greater the degree of disclosure as to the extent of risk which LLD is prepared to assume under a joint venture, the greater would be the ability of other government bodies to insist that the same degree of risk (or higher risk) be assumed in other projects.
…
36In relation to the first and second types of damage, it is important to understand that Lend Lease has developed a particular model for shaping and conducting partnership relationships for such substantial, lengthy projects as St Marys. In my view this model is a highly attractive and successful one, as is shown by the very fact that LLD was successful in becoming the St Marys joint venturer, along with its success in relation to, for example, the Fort Hood project in the United States. Both the particular details of that model, and the general style, are matters which are of great commercial value to Lend Lease, and which are protected as trade secrets.
…
40The freedom of movement that LLD had in developing its proposal meant that it was able to make full use of its accumulated experience, its model of doing such business, and its trade secrets in how to shape successful long-term joint venture developments. Thus the documents relating to St Marys are of particular commercial sensitivity – more so than for equivalent documents for other sites."
As stated above, Mr Banek was not required for cross-examination.
In Exhibit R1 Ms Coombs states:
"11. It is clear from my examination of the documents at issue that they contain commercial information pertaining to Lend Lease, the private sector corporation with which ADI had entered into a joint venture agreement. I am informed by the said Anthony Eaton, and I believe, that prior to this information being provided by ADI to OASITO, the consent of Lend Lease was sought and obtained for the same limited purpose of ensuring due diligence in the sale process. All documents provided by ADI have been kept under secure conditions, in locked files in a secure area and available only to a very limited number of authorised persons on a 'need to know' basis."
And Mr Mitchell in Exhibit R4 states:
"17. Although the documents are now six years old, the project is still current and some aspects of the project are still under negotiation with State and local government bodies, or have yet to be contracted out. The methodology contained in the documents has an ongoing commercial value for this and for other developments. ComLand regards the information as having continuing sensitivity and considers that the material remains inherently confidential despite the effluxion of time.
18. The information contained in these documents would have an unreasonable adverse effect on ComLand's business operations were it to be disclosed. The information includes such details as the profit and risk sharing arrangements of the parties, incentives, funding proposals, and the particular methodology for managing the contract from which the parties expect to derive commercial benefit. It would reveal to competitors our market strategies, and would disclose to parties with whom we are currently negotiating, or with whom we may negotiate in future, the strengths and weaknesses of our bargaining position. Disclosure of the information could be expected to reduce the pool of prospective partners in future joint ventures, as private sector organisations would be reluctant to risk the disclosure of their commercial information, which could be used by their competitors to undermine their profitability.
19. In particular, ComLand would be adversely affected by the release of information concerning the methodology of the project. The strategy and structure for management of the project is unusual and comprises a different method for adding value to the project than is usual, in my experience of the property development industry. The mechanism for profit-sharing is also uncommon. I believe this information would be of considerable commercial value to other property developers, and were it to become common knowledge, its commercial value to ComLand would be diminished or destroyed, and its advantage to ComLand would be lost."
The evidence referred to above makes it clear that the subject documents have a commercial value both to ADI Limited or its successor, ComLand Limited, and to the Party Joined. This is, in these proceedings, a matter of fact but if any law is required I would refer to the wide interpretation given to the words "other matters of a business, commercial or financial nature" in subs34(1) of the Freedom of Information Act 1982 (Vic) by Murray J in Gill v Department of Industry, Technology and Resources & Ors [1987] VR 681.
In Re Marple and Department of Agriculture 9 VAR 29 at 52 Deputy President Macnamara upheld a claim for exemption under subs34(4) of the Victorian FOI Act for a contracting out agreement. In his reasons for decision, the Deputy President said:
"Dr Lawson swore that disclosure of the terms of this draft contracting out agreement would reveal the precise terms upon which the department was willing to do business and the concessions which it was ultimately, or at least at that stage of the negotiation, prepared to make. For this knowledge to be known widely in the commercial community would, it was said, expose the department to disadvantage in further negotiations upon contracting out or privatisation arrangement. I see no reason not to accept Dr Lawson's evidence on this point. Accordingly I uphold the exemption …"
This passage confirms that the terms of agreements made in the conduct of commercial activities can have of themselves a commercial value.
The term "could reasonably be expected" has received consideration in previous cases. In Searle Australia Pty Ltd v Public Interest Advocacy Centre 108 ALR 163 at 175 the Full Court of the Federal Court referred to the decision of a previous Full Court in Attorney-General's Department v Cockcroft 10 FCR 180 and the comment by Bowen CJ and Beaumont J that the words are:
"… are ordinary words of the English language and are used in the sense in which they would be employed in common parlance."
Their Honours then went on to say at p176:
"Their Honours did not suggest, as was submitted by Mr Bayne, that it was sufficient that there be a possibility not irrational, absurd or ridiculous that the specified consequence would occur. Their Honours specifically rejected that approach, saying that the words 'could reasonably be expected' meant what they said. The practical application of their Honour' view will not necessarily lead to a result different from that proposed by Sheppard J.
In the application of s 43(1)(b), there would ordinarily be material before the decision-maker which would show whether or not the commercial value of the information would be or could be expected to be destroyed or diminished if the information were disclosed. It would be for the decision-maker to determine whether, if there were an expectation that this would occur, the expectation was reasonable."
In this matter, given the evidence of Mr Banek and Mr Mitchell, I am satisfied that should the information in the documents be released, which information does have a commercial value to ADI Limited and ComLand Limited on the one hand and on the other hand to Lend Lease Developments Pty Ltd, the commercial value of the said information could reasonably be expected to be diminished.
I would therefore affirm the decision under review pursuant to the exemption in para 43(1)(b) of the FOI Act in any event.
I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of:
Senior Member M D Allen
Signed: Kwai-Ling Wong .....................................................................................
AssociateDates of Hearing 12 and 13 December 2000
Date of Decision 29 January 2001
Counsel for the Applicant Mr I Harvey
Solicitor for the Applicant Mr B Moran, Public Interest Advocacy Centre
Counsel for the Respondent Ms m Campbell
Solicitor for the Respondent Ms S Byrne,
Australian Government Solicitor's Office
Counsel for the Party Joined Dr G Flick
Solicitor for the Party Joined Mr J Kirk, Freehills
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