Audit Office of New South Wales v Cianfrano (GD)

[2008] NSWADTAP 77

Appeal Panel - Internal

CITATION:	Audit Office of New South Wales v Cianfrano (GD) [2008] NSWADTAP 77
PARTIES:	APPELLANT Audit Office of New South Wales RESPONDENT Robert Cianfrano
FILE NUMBER:	089054
HEARING DATES:	17 November 2008
SUBMISSIONS CLOSED:	17 November 2008
DATE OF DECISION:	25 November 2008
BEFORE:	O'Connor K - DCJ (President)
CATCHWORDS:	Freedom of Information - Agency Functions Exemption - Auditor-General - meaning of "report functions" - Freedom of Information Act 1989, s 9, Schedule 2
DECISION UNDER APPEAL:	Cianfrano v Audit Office of New South Wales [2008] NSWADT 183
FILE NUMBER UNDER APPEAL:	073351
DATE OF DECISION UNDER APPEAL:	06/24/2008
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Freedom of Information Act 1989 Interpretation Act 1987 Public Finance and Audit Act 1983
CASES CITED:	Cianfrano v Audit Office of New South Wales [2008] NSWADT 183 Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282 Independent Commission Against Corruption v McGuirk [2007] NSWSC 147 McGuirk v Independent Commissioner Against Corruption [2006] NSWADTAP 17 McGuirk v Independent Commission Against Corruption [2008] NSWCA 302 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355
REPRESENTATION:	APPELLANT J McDonnell, Crown Solicitor's Office RESPONDENT C Saggers, agent
ORDERS:	1. Leave granted. 2. Appeal allowed. 3. Application dismissed for want of jurisdiction.

1 The Audit Office has appealed against a preliminary decision as to jurisdiction by the Tribunal at first instance.

2 The Office is respondent to an application for review lodged under the Freedom of Information Act 1989 (the FOI Act). The Office assists the Auditor-General in the performance of the Auditor-General’s functions under the Public Finance and Audit Act 1983 (the PFA Act).

3 The Office objected to the Tribunal exercising jurisdiction, on the basis that the applicant’s access request sought documents that fell within the functions of the office that are exempt from the FOI Act: see s 9 and Schedule 2, item 1. The Tribunal rejected the objection: see Cianfrano v Audit Office of New South Wales [2008] NSWADT 183.

4 The appeal is an interlocutory one, and the bench is constituted by one presidential member, as permitted: see Administrative Decisions Tribunal Act 1997, s 24A; 113 (2A), (2B) and (2C). The appellant requires leave to proceed with an interlocutory appeal. Leave is granted. The question raised is a clearly arguable one going to jurisdiction.

Agency functions exemption

5 Section 9 provides:

‘ 9 Certain bodies etc exempt from operation of Act

Any body or office specified or described in Schedule 2 is, in relation to such of the functions of the body or office as are so specified or described, exempt from the operation of this Act.’

6 In allowing an appeal against the Appeal Panel decision in McGuirk v Independent Commissioner Against Corruption [2006] NSWADTAP 17, the Supreme Court (Simpson J) held in Independent Commission Against Corruption v McGuirk [2007] NSWSC 147 that once an office or agency has categorised documents as s 9 documents, the FOI Act has no further application to that body or office. It is not, in such circumstances, required to go on and make a formal determination under s 24 of the FOI Act. In her Honour’s opinion, that did not preclude an access applicant from agitating the issue before the Tribunal.

7 The decision has been upheld: see McGuirk v Independent Commission Against Corruption [2008] NSWCA 302 (Giles, Hodgson JJA). Hodgson JA said at [17]:

‘The view of the Appeal Panel was that s 9 of the FOI Act exempted ICAC only “in relation to certain functions” and not in respect of the application of s 53 of that Act. I see no basis for so limiting the effect of s 9. The definition of exempt document in s 6 does not give such a basis because it applies to cases where a document of the relevant kind is in the possession of an agency other than an agency exempted by s 9.’

8 (I respectfully agree with Simpson J’s view as to the right of access applicants to agitate a s 9 decision before the Tribunal, one not criticised by the Court of Appeal. If an agency decision to decline to deal with an access application on a s 9 ground were not open to be agitated, a reviewable (‘deemed’) refusal of documents (see s 24(2)) might not be identified. I also note that the Supreme Court decisions restore the practice the Tribunal had followed in dealing with s 9 claims prior to the Appeal Panel decision. The Tribunal had not prior to considering the claim required the agency to make a formal determination in such circumstances.)

The Auditor-General’s functions exemption

9 Schedule 2, item 1 specifies the exempt functions as follows:

‘The office of Auditor-General—investigative, audit and report functions.’

10 Arguably the above exemption can be read in various ways. One is as a collective single concept – ‘investigative, audit and report’ functions. Under this approach the reports exempted by the Act would be those that have as their antecedents investigation and audit. Another is as two concepts – ‘investigative functions’ and ‘audit and report functions’. A third is as three separate concepts – ‘investigative functions’, ‘audit functions’ and ‘report functions’, with ‘report functions’ not limited by the words ‘investigative’ and ‘audit’.

The FOI Application

11 The text of the FOI application is set out at para [2] of the Tribunal’s reasons. The Tribunal said at [19]:

‘15 The first three categories of documents sought by Mr Cianfrano appear to be, essentially, background documents relating to two specific pages of the Auditor-General’s Report to Parliament for 2001 [vol 1, 189, vol 7, 665] and one specific page of the Auditor-General’s Report to Parliament for 2002 [vol 6, 521].’

12 The 2001 report at p 189 under the heading ‘Significant Developments during the Year’ referred to the creation of the Flemington Markets Taskforce. It set out, briefly, the Taskforce’s role and a summary of reasons why the lessee’s offer to purchase the freehold property was not sufficient. At p 665 there was a further reference to the Flemington Markets Property under the heading ‘Crown Property Portfolio Key Issues’. This text contained some detail that was beyond the detail given at p 189, for example that the lessee and the Government had resumed negotiations. Finally, the 2002 Report under the Crown Property Portfolio heading advised that a sale had been effected, and gave details of the price and the purchaser’s leasing arrangements.

The Tribunal’s Reasons

13 The Tribunal concluded that the functions exemption in Sch 2 did not affect the Annual Report or its background material. The Tribunal said:

‘19 The phrase ‘report functions’ is not defined in the FOI Act . I agree with the Respondent that it is the ordinary meaning of such a phrase that should first be considered, which, in this context, is that of the function of providing an account or statement (see, for example, the definition of ‘report’ in The Concise Oxford Dictionary and The Macquarie Concise Dictionary ). Performing such a function necessarily entails the preparation or gathering together of relevant background documents to enable the writing of the report. In my view, it is reasonable to interpret the phrase ‘report functions’ as including such documents.

20 However, when interpreting the provisions of a statute, the application of judicial presumptions should be considered where relevant. In this instance, the application of the judicial presumption noscitur a sociis – that the meaning of a word is to be derived from its context, suggests that the meaning of the word ‘report’ in the phrase “investigative, audit and report functions” should be qualified by its use in the context of the investigative and audit functions of the office of the Auditor-General. A reading of the PFA Act indicates that those functions include investigating and auditing the financial position of, for example, statutory bodies and Departments, and then reporting to the head of the statutory body or Department, or to the responsible Minister, the Treasurer or Premier, on the outcome of the investigation and audit.

21 The Auditor-General also has an obligation to present an Annual Report to Parliament: section 52A PFA Act. Clearly, information in such an Annual Report would refer to the performance of the functions of the office, including investigative, audit and report functions. But, in my view, it is not the Annual Report that is specifically the focus of the exemption since this report is a public document. Rather it is the more specific reports that follows from the investigative and audit functions of the office, which may, of course, be background documents to a reference to particular activity in the Annual Report.’

14 The Tribunal at [22] took into account the Second Reading Speech accompanying the amendment that gave rise to the functions exemption in its present form. It had set out the relevant passage from the Speech at [22]. The following extract commences with para [14]:

‘14 Mr Saggers referred to the Second Reading Speech on the FOI (Amendment) Bill on 6 May 1992 (Hansard, Executive Council, pages 3635-3636) by the Hon EP Pickering, who said:

“the blanket exemption which now exists in relation to the ICAC, the Director of Public Prosecutions, the Ombudsman and the Auditor-General will be removed and be replaced by a more limited exemption. In future, those bodies will only be exempt in respect of their operational and not their administrative functions.”

22 … Reference to this document, being extrinsic material, would be for the purpose of confirming the ordinary meaning of a provision or determining its meaning if, for example, the meaning of the provision is ambiguous or obscure: Interpretation Act 1987, section 34(1). I have said that I agree with the Respondent that it is the ordinary meaning of the phrase that should first be considered, which, in this context, is that of the function of providing an account or statement. However, a closer examination of the context in which the phrase is used suggests an ambiguity in so far as the Annual Report to Parliament is a public document.

23 I note that the distinction drawn between operational and administrative functions in the Second Reading Speech and the Minister’s statement that “the blanket exemption” will only apply in respect of operational and not administrative functions. In the case of the office of Auditor-General, this indicates that it is documents concerning the investigative, audit and report operational functions which are intended to be the subject of the exemption, together with, in my view, relevant background documents.’

15 It will be seen that the Tribunal read down the words ‘report functions’ so as to distinguish between public and non-public reporting functions. It also drew a distinction between operational and administrative functions.

16 As I read the reasons, the Tribunal saw as not covered by the term ‘report functions’ any part of the text of the Auditor-General’s Annual Report to Parliament, and in respect of other ‘non-public’ report documents, all text not of an ‘operational’ nature.

17 The actual words used in Sch 2, item 1 do not contain a ‘public’/‘non-public’ distinction or an ‘operational’/‘non-operational’ distinction.

18 I do not think that either of these approaches can be sustained.

19 The PFA Act gives to the Auditor-General a wide variety of report powers. Apart from s 27, mentioned below, there is s 38A (report on performance audit), s 43 (general audit), s 45(2) (particular audits), s 45I (reports on inspection of department’s financial reports, books and records), ss 49 ff (the annual report provisions), s 52(3) (special reports to Parliament).

20 As I see it, there is no clear distinction drawn in the PFA Act between ‘public’ reports and ‘non-public’ reports.

21 Many of the functions conferred on the Auditor-General allow for audit reports done in the ordinary course of the Office’s operations to be published to Parliament. For example, sub-cl (3)(b) of s 27B of the PFA Act states as a function: ‘to provide any particular audit or audit-related service to Parliament at the joint request of both Houses of Parliament’. Function (c) allows for the provision of a report on a particular audit or audit-related service to the Treasurer. As I read the Act, there is nothing to prevent the Treasurer going on, if he or she chooses, and tabling such a report in Parliament, thereby making it public. The next function, function (d) is ‘to report to Parliament as required or authorised by law’. There is no qualification here, as appears in (b) and (c), confining the subject-matter to audit or audit-related services. In s 52A there is, as the Tribunal noted, a statutory obligation to present an Annual Report to Parliament.

22 The appellant drew attention to s 38C(5). Section 38C deals with the conduct of performance audits. Sub-section (5) states:

‘The Auditor-General may include the report in any other report of the Auditor-General’.

23 It was submitted that, therefore, it was open to the Auditor-General to include an inspection report or a performance audit report (for example) in the Annual Report.

24 The appellant also referred to an opinion of mine, sitting at first instance, in Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282 (Cianfrano 282). In that case, a s 9/Sch 2 claim, relying on the Auditor-General’s functions exemption was made by the Department of Commerce in respect of ten documents, described by me as follows:

‘49 The evidence is that all the documents are concerned with the Auditor-General’s audit in 2001 of the Crown Property Portfolio (CPP): see further Mr Hoogesteger’s affidavit. The agency notes accurately that the documents consist in drafts of the Auditor-General’s report to Parliament, 2001 and comments received by the Auditor-General from the Taskforce in relation to that part of the report dealing with the Flemington Markets site. The final report of the Auditor-General to Parliament is a public document. The submission is that the documents contain matter relating to the reporting functions of the Auditor-General in relation to the Auditor-General’s office and are therefore exempt under s 9 and Schedule 2.

52 The documents are accurately described by Mr Havenstein in his affidavit as follows:

‘Document 130 sets out a recommended amendment to an Amended Audit Report prepared by the Auditor-General and attaches a draft version of the Auditor-General’s Report to Parliament 2001 Volume Five. Document 137 is a duplicate, with hand written notations. Document 131 notes all information on the attached sheet is to be treated as confidential and attaches page 2 of Document 130. Document 132 has been released with the exception of page 4 of the document. Page 4 details a draft update on the Flemington Markets Property, for report to Parliament. Documents 134 and 138 are duplicates of Document 132. Document 133 is a fax to the Treasurer from the Audit Office and attaches a draft version of the Auditor-General’s Report to Parliament 1998 Volume One. Document 135 is a duplicate of page 2 of Document 4 (with additional documents). Document 136 contains an email suggesting a rewording of an audit report to Parliament. It also contains a duplicate of Document 3 and a document obtained from the Audit Office. Document 139 is the first page 1 of the draft version of the Auditor-General’s Report to Parliament 2001 Volume Five, with additional hand written notations.’

25 I held that these documents were protected by s 9. I said:

‘53 All documents relate to the Auditor-General’s reporting activity. Though there is no direct evidence from the Auditor-General on the point, the Tribunal recognises that it is a usual aspect of the reporting function of oversight bodies such as the Auditor-General to consult agencies in the course of drafting reports, and to have regard to comments on draft texts, before finalising those texts and publishing them to the world through report to Parliament.’

26 These observations do not appear to have been cited to the Tribunal below.

27 The appellant submitted that my interpretation reflected the correct interpretation. (The appellant’s reliance on my prior decision gave rise to an apprehended bias objection at the beginning of the hearing, which I rejected.)

28 The question in this case arises in a slightly different way to how it arose in Cianfrano 282, in that it seeks background documents to statements in the Audit Office’s Annual Report as distinct from investigative and audit documents held in an agency overseen by the Audit Office. My conclusion is that while such a difference can be propounded, it is not a material one, and the view I adopted in Cianfrano 282, involving as it did a more limited review of the legislation than has been undertaken in this appeal, is correct.

29 The literal or grammatical construction of ‘report functions’, in my opinion, embraces all species of reporting referred to by the PFA Act.

30 The Tribunal, and the respondent in his submissions, referred to Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355. Statutes are to be interpreted in a purposive way. As the respondent submitted, it is not permissible to interpret words in a statute in grand isolation. It is necessary to have regard to the context in which they appear, and to the objects of the legislation. McHugh, Gummow, Kirby and Hayne JJ, put it this way at [78] (footnotes omitted):

‘However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.’

31 In my view, there is nothing in the FOI Act to suggest that the literal or grammatical meaning of the Auditor-General’s s 9 exemption should be varied. In my view this is a case where the ordinary grammatical meaning provides the legal meaning.

32 Moreover, in my view there are textual indications in Sch 2 itself which support the submission of the appellant.

33 There are a number of agencies listed in Sch 2 that have ‘report functions’ exemptions: for example, the Independent Commission Against Corruption, the Inspector of the ICAC, the Police Integrity Commission, and the Inspector of the PIC. In each instance the words follow on from a list of specific functions.

34 There are also a number of agencies that have ‘reporting functions’ exemptions (my emphasis). In two instances the words ‘reporting functions’ are qualified by the further words ‘in relation to competitive neutrality complaints’ – the Independent Pricing and Regulatory Tribunal, and the State Contracts Control Board.

35 The presence of these qualifications suggests to me that the Parliament turned its mind to the situations where words of generality such as ‘report functions’ or ‘reporting functions’ should be circumscribed.

36 The words ‘report functions’ can not, it seems to me, properly be read down to give effect to distinctions of the kind suggested by the Tribunal. (It may be the usage ‘reporting functions’ has a more narrow connotation in the Sch 2 exemptions where that phrase appears. This issue is not addressed by this decision.)

37 There will, I accept, as a result of the view I have expressed, be material in the Auditor-General’s Annual Report that is of an administrative, non-operational kind that will incidentally obtain protection under s 9 (information about such matters as its own budget, its personnel arrangements, its expenditure on information technology and the like).

38 The Annual Reports produced by the Audit Office, as the present case shows, are very detailed and comprehensive, and run to many volumes. They contain summary accounts of the audit work done by the Office during the year, and give status reports and outcomes. Much of the content is in fact operational as distinct from non-operational.

39 As I see it, the protection given to the Audit Office by s 9 would be undermined if material that could not be obtained by a direct request for audit reports were open to be obtained if the Auditor-General referred to the matter in the Annual Report to Parliament. It may well be that such a discrepancy would lead the Auditor-General to say less in Annual Reports about operational activities. This is a further consideration, it seems to me, which supports giving the words ‘report functions’ their ordinary meaning.

Orders

1. Leave granted.

2. Appeal allowed.

3. Application dismissed for want of jurisdiction.