AK v Gosford City Council

[2007] NSWADT 289

CITATION:	AK v Gosford City Council [2007] NSWADT 289
DIVISION:	General Division
PARTIES:	APPLICANT AK RESPONDENT Gosford City Council
FILE NUMBER:	073155
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	27 August 2007
DATE OF DECISION:	12 December 2007
BEFORE:	Higgins S - Judicial Member
CATCHWORDS:	Privacy - information protection principle - collection - from third party - Privacy - information protection principle - personal information - use
MATTER FOR DECISION:	Principle matter
LEGISLATION CITED:	Privacy and Personal Information Protection Act 1998 Local Government Act 1993
CASES CITED:	Not applicable
REPRESENTATION:	In person M Everingham, solicitor
ORDERS:	The decision of Council is set aside and remitted for reconsideration by Council in accordance with these reasons for decision.

REASONS FOR DECISION

Introduction

1 This is an application by AK seeking review of conduct by and on behalf of Gosford City Council (‘the Council’) in regard to advertising material that was included in Council’s 2006 annual rates notice and mailed to AK in July 2005. AK is a resident and owner of property in the Gosford Shire.

2 The advertising material was contained in a four page flyer that was sent in the same envelope as the rates notice. The front page of the flyer was headed “Early Rate Payers Reward: pay your rates in full by 31 August 2006 and you can win:” At the top right hand side of the front page was the Council’s logo and under the heading was a list of “Prizes that can be won”. The prizes included a P & O holiday for two, home insulation and ventilation, blinds and a home security system. Against each prize was the name of the sponsor of the prize and the remainder of the front page, the second page and fourth page of the flyer contained promotional advertisements of the three sponsors of the prizes.

3 AK has asserted that the conduct of the Council in sending him the advertising material was a breach of section 17 and 18 of the Privacy and Personal Information Protection Act 1998 (‘the PPIP Act’) in that the Council:

(a) used, without his consent, his name and address for a purpose other than for which it had collected AK’s name and address (see section17 of the PPIP Act); and

(b) disclosed AK’s name and address to a third person when that disclosure was not directly related to the purpose for which Council had collected his name and address (see section 18 of the PPIP Act).

Issue

4 The parties have not questioned the capacity in which Council collected and held the name and address of AK as being personal information about AK.

5 As there is no evidence of the Council having disclosed, in the relevant sense, AK’s name and address to a third party it is unnecessary to consider whether Council’s conduct was a breach of section 18 of the PPIP Act. As pointed out below even though AK’s name and address, together with the names and addresses of all ratepayers within the Shire was provided to a private printing and mailing company, it was provided to that company not for the use of that company for its own purposes but for use by the company on behalf of the Council for its purposes of preparing and issuing the annual rates notices.

6 What is in issue is whether Council’s conduct in mailing to AK the advertising flyer was a breach of section 17 of the PPIP Act. That section relevantly provides as follows:

17 Limits on use of personal information

A public sector agency that holds personal information must not use the information for a purpose other than that for which it was collected unless:

(a) The individual to whom the information relates has consented to the use of the information for that other purpose, or

(b) The other purpose for which the information is used directly related to the purpose for which the information was collected, or

(c) …

7 AK argues that the use of his name and address to send him the flyer the subject of this application was for the purpose of circulating Council endorsed local business advertising which was not a purpose directly related to the purpose for which the Council had collected his name and address and therefore a breach of section 17(b) of the PPIP Act. Council had not considered this argument in its internal review of the conduct in question, but on external review it argued that the flyer was directly related to its function of collecting rates from rate payers and that it came within section 17(b) of the PPIP Act.

8 In my opinion there is an additional issue and that relates to the issue of consent as set out in section 17(a) of the PPIP Act.

The conduct

9 In an affidavit sworn on 23 July 2007, Ms Carol Banks, Senior Rates Clerk, of the Council provided an explanation about the flyer and its purpose. She said that each year, since 1992, Council has approved a rate incentive scheme to encourage rate payers to pay their rates in full within 1 month of receiving their notices. She said that rates paid in full within a month of receipt enabled Council to invest that money and the interest earned on that investment together with the savings made in administrative costs enabled Council to have more funds available to provide better services to members of the community.

10 The 2006 incentive scheme was to give ratepayers, who paid their rates in full within one month of receipt of their rates notice, a chance to win a prize, donated to Council from local businesses (it is assumed that similar incentive schemes were used previously). The promotion of these prizes, including the preparation and printing of the flyer was conducted pursuant to a licence issued by the Department of Gaming and Racing. As mentioned above, in accordance with usual practices, in 2005 Council engaged a private company to prepare, package and mail its annual rates notices. Council provided that company with a data file containing an extract from Council’s property ownership records (i.e. 70,000 rate assessments and the names and addresses of those persons to whom these assessments were directed), which the company is contractually bound not to disclose. Council also provided the flyer to that company and the total cost to Council was approximately $7,000 in printing and $50 for the licence fee. Ms Banks said it was common practice for Council to have included in these mail outs additional information such as, Council’s report to the community, Rural Fire Service bush fire information, brochure from the Valuer-General, and information regarding the Floral Festival.

11 Ms Banks went on to say that at the end of August, the assessment numbers of all ratepayers who had paid their rates in full within the month are placed into a container and a draw is conducted in the presence of the Mayor, the General Manager, the Director of Corporate Services, the Finance Manager, rates staff and the sponsors of the prizes. When an assessment number is drawn out the rates staff identify who the winning ratepayer is and then contacts them and their name is given to the sponsor of the relevant prize. The names of prize winners are also published in the local paper.

Section 17(b) of the PPIP Act – use is directly related to the purpose for which the information was collected

12 Purpose for which information collected - The starting point is to determine the purpose for which the name and address of AK and other rate payers were collected by Council. This is to be found by having regard to the provisions of the Local Government Act 1993 (‘LG Act’) as this is the Act which sets out Council’s functions and powers.

13 Section 8 of the LP Act sets out the charter of a Local Council. This includes the following:

8 The council’s charter

(1) A council has the following charter:

(a) to provide directly or on behalf of other levels of government, after due consultation, adequate, equitable and appropriate services and facilities for the community and to ensure that those services and facilities are managed efficiently and effectively
(b) …

(c) to raise funds for local purposes by the fair imposition of rates, charges and fees, by income earned from investments and, when appropriate, by borrowings and grants

(d) …
14 Chapter 15 of the LG Act deals with rates and charges that a Council is entitled to levy. Section 562 of the LG Act makes provision for the payment of rates and charges. It provides as follows:
562 Payment of rates and annual charges

(1) Annual rates and charges may be paid in a single instalment or by quarterly instalments.

(2) If payment is made by quarterly instalments, each instalment is to be a quarter of the rates or charges, disregarding any remainder, together, in the case of the first instalment, with the remainder. However, if the amount of an instalment, other than the first instalment, is not a multiple of 10 cents, the amount of each instalment in excess of a multiple of 10 cents is to be subtracted from that instalment and added to the first instalment.

(3) Except as provided by subsection (4):

(a) if payment is made in a single instalment, the instalment is payable by 31 August, and

(b) if payment is made by quarterly instalments, the instalments are payable by 31 August, 30 November, 28 February and 31 May.

(4) If the rates and charges notice is not served by 1 August:
(a) the single instalment (if payment is made in a single instalment), or

(b) the first 2 instalments (if payment is made by quarterly instalments),

is or are payable by 30 November, or by the day that is 30 days after service of the notice, whichever is the later.

(5) On or before 31 October, 31 January and 30 April, a council must send reminder notices (to be sent separately from the rates and charges notice) to each person whose rates and charges are being paid by quarterly instalments.

15 And section 563 of that Act makes provision for a discount for prompt payment of rates and charges. It provides as follows:
563 Discount for prompt payment in full

A council may discount the amount of a rate or charge to such extent as it determines if the whole of the discounted amount of the rate or charge is paid by a date nominated by the council.

16 The LG Act makes no mention of incentive schemes in regard to the payment of rates. No does the incentive scheme operated by Council form a discount as provided for in section 563 of the LG Act.

17 On the basis of the provisions of the LG Act, I find that Council’s collection of the names and addresses of those who own property within its area of responsibility is for the purpose of it fulfilling its charter, which includes the issue of annual rate assessment and charges notices.

18 Was the use of AK’s name and address to forward the promotional flyer to AK a use directly related to the purpose for which his name was collected? Whether the promotional advertising flyer is directly related to the purpose of Council fulfilling its charter depends on the proper characterisation of that flyer. To the extent that the flyer contains information about Council, the use of the names and addresses of ratepayers to provide them with this information is unobjectionable, as it is clearly a use for which the names and addresses were collected.

19 The flyer to the extent it contains a list of prizes may also be unobjectionable as they are directly related to the payment of the annual rates and charges. Whether this form of unsolicited lottery comes within the functions of Council having regard to section 563 of the LG Act is another issue and one which the tribunal has no power to determine. However, in my opinion, the sending of the flyer, to the extent it contained commercial advertising of the sponsors of the prizes, is a use of the name and address of AK which is not directly related to Council’s charter and function of issuing rate assessment and charges notices. That is, to this extent the conduct would not fall within section 17(b) of the PPIP Act and would be a breach of that section, unless it is otherwise a non prohibited use under section 17(a) of the PPIP Act or a modification of the requirement under a direction of the Privacy Commissioner or otherwise.

20 Modification of the requirements of section 17 by direction of the Privacy Commissioner - In his submissions, the Acting Privacy Commissioner, Mr J. Dickie, explained that section 17 of the PPIP Act has been modified, by a direction of the Commissioner, pursuant to section 41 of that Act. That direction is set out in the Privacy Code of Practice for Local Government, which relevantly provides as follows:

Council may use personal information for a purpose other than the purpose for which it was created in the following circumstances:

(i) where the use is in pursuance of Council’s lawful and proper function/s and Council is satisfied that the personal information is reasonably necessary for the exercise of such function/s; or

(ii) where personal information is to be used for the purpose of conferring upon a particular person, an award, prize, benefit or similar form of personal recognition.

21 The Acting Privacy Commissioner argued that the conduct of Council in including the promotional advertising flyer with the rate notices was arguably conduct that fell within the terms of this modification.

22 It is difficult to see how the Council’s conduct in using the names and address of AK to send him the promotional flyer was conduct that fell within (ii) above as the flyer did not confer upon him a prize, what it did was to give him a chance to win a prize if he paid his rates in full within a month of receiving the notice. As mentioned above it was an unsolicited lottery.

23 In my opinion, however, the sending of the flyer to AK was a use of AK’s name and address in pursuance of Council’s lawful and proper functions, enlivening the operation of (i) above. The question is whether Council can also demonstrate that it was satisfied that the use of AK’s personal information was reasonably necessary for the exercise of its function in collecting rates. Ms Banks does not give any evidence in this regard other than a general assertion of the benefits to Council of receiving payment of rates in full and early. As pointed out by AK there is no material before the tribunal to indicate that the incentive scheme has in fact resulted in ratepayers altering their practices in regard to paying their rates by paying their rates early and in full. He asserts that only 14% of ratepayers paid their rates in this way and that the persons benefiting the most from the advertising material were the sponsors as they were given the opportunity, at the expense of ratepayers and with the endorsement of Council, to have their advertising circulated to 70,000 ratepayers. If he is correct then there may be an argument that Council cannot be satisfied that the use of AK’s name and address and those of ratepayers generally was reasonably necessary for the exercise of its functions.

24 In my opinion these are questions that Council should be given an opportunity to address as they have not considered the conduct the subject of this application in light of section 17(b) of the PPIP Act as modified by the abovementioned direction.

Section 17(a) of the PPIP Act – consent to the use of personal information

25 As mentioned above, the evidence from Ms Banks is that Council has been using an incentive scheme since 1992. On the assumption that this scheme has operated in the same manner each year with a promotional flyer containing advertising of sponsors of prizes being included with rate notices when mailed to ratepayers, it is arguable that those ratepayers who have previously received this material and not complained about being sent the flyer have by implication consented to their names and addresses being used by Council to forward to them this material. If that is correct then the ‘use’ is in accordance with section 17(a) of the PPIP Act.

26 In regard to AK, there is no material before the tribunal as to whether he has previously been issued with Council rate notices which included this promotional material and of which he did not complain. If he has, he can of course withdraw that implied consent, but it is not until after he has withdrawn that consent that section 17(a) of the PPIP Act will cease to apply. Nor is there any material from Council to indicate whether AK has previously complained about the use of his name and address for the purpose of sending him advertising material.

Conclusions

27 In my opinion, for the reasons set out above, the internal review decision of Council that is the subject of this application is not the correct and preferred decision as Council has not considered the relevant conduct in the context of the requirements of section 17 of the PPIP Act, as modified by the direction of the Privacy Commissioner. In my opinion Council should be afforded that opportunity, particularly as it has for a number of years, apparently without complaint, used the names and address of its ratepayers to send this form of advertising material to them as part of issuing the annual rates and charges notices.

28 Accordingly the appropriate order is for the tribunal to set aside the decision the subject of review and to remit it to the Council for further consideration and determination in accordance with these reasons for decision. In reconsidering the matter the tribunal recommends Council confer with AK so that he may be satisfied about action, if any, the Council proposes to undertake in regard to the conduct in question generally or in regard to AK in particular.