Butler and Commonwealth Scientific and Industrial Research Organisation (Freedom of information) - [2018] AATA 2668

Butler and Commonwealth Scientific and Industrial Research Organisation (Freedom of information) [2018] AATA 2668 (7 August 2018)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2017/4246

FREEDOM OF INFORMATION DIVISION )

Re: Beverley Butler
Applicant

And: CSIRO
Respondent
DIRECTION
TRIBUNAL: Senior Member Theodore Tavoularis
DATE of CORRIGENDUM: 7 August 2018
PLACE: Brisbane
The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth), to alter the text of the decision in this application as follows:

The name “Beverly” should be replaced by the name “Beverley”.

..............................................[sgd]..................
Senior Member
Division:FREEDOM OF INFORMATION DIVISION
File Number: 2017/4246
Re:Beverly Butler
APPLICANT

AndCommonwealth Scientific and Industrial Research Organisation
RESPONDENT

DECISION
Tribunal:Senior Member Theodore Tavoularis
Date:7 August 2018
Place:Brisbane

The decision under review is affirmed.
.........................[sgd]...............................................
Senior Member Theodore Tavoularis
CATCHWORDS
FREEDOM OF INFORMATION – where Applicant seeks documents from the CSIRO regarding testing of fire alarms – whether documents are exempted from the Freedom of Information Act 1982 (Cth) – section 7 – whether request was in respect of documents in respect of the CSIRO’s commercial activities – commercial activities – whether activities undertaken on a commercial basis – whether the CSIRO was in competition with others – the CSIRO was not in competition with others – whether it was reasonably expected in the foreseeable future that the CSIRO would be in competition with others – the documents are exempted – decision under review affirmed
LEGISLATION
Freedom of Information Act 1982 (Cth), ss 3, 7, 11, 24, 24AA, 24AB, 55K
Science and Industry Research Act 1949 (Cth), ss 9, 9AA
CASES
Bell and Commonwealth Scientific and Research Organisation [2007] AATA 1569
Bell v Commonwealth Scientific and Industrial Research Organisation [2008] FCAFC 40
Papps and Australian Postal Corporation [2004] AATA 833
REASONS FOR DECISION
Senior Member Theodore Tavoularis
7 August 2018
INTRODUCTION

Ms Beverly Butler (“the Applicant”) is deeply concerned about the safety of ionisation smoke alarms. Alongside her brother, Mr Adrian Butler, she asserts that ionisation smoke alarms do not effectively or reliably become activated when there are “smouldering” fires. Ultimately, they seek to show the public that these smoke alarms are dangerous.
In pursuit of this aim, the Applicant submitted a freedom of information (“FOI”) request to the Commonwealth Scientific and Industrial Research Organisation (“the Respondent”) on 22 October 2015 for test data in relation to the Respondent’s testing of ionisation smoke alarms.[1] In particular, they sought:
…information, under urgency, for all ionization smoke alarms tested by the CSIRO in accordance with AS2362.17 that are listed on the CSIRO’s ActivFire website as at the date of this transmission:
1. Make and model number of each ionization alarm.
2. The MIC ‘X’ and smoke density at which each actuating device entered the alarm state as required to be recorded by the CSIRO in Section 7 of AS2362.17.[2]
[1] Exhibit R3, T-Documents, T3, p 9.
[2] Ibid, pp 9-10.
On 2 November 2015, the Respondent sent to the Applicant a notice of intention to refuse her FOI request pursuant to s 24AB of the Freedom of Information Act 1982 (Cth) (“the FOI Act”). In sending this notice, the Respondent relied on a number of grounds. First, it said that the request was substantial, requiring “an estimated 80 hours being undertaken to process [the Applicant’s] request”.[3] The Respondent further noted that “It is highly likely that s 7 will operate to exempt from the operation of the FOI Act, the documents relevant to your request”.[4] In the notice, the Respondent concluded with a consideration that the release of the documents requested would be unreasonable.
[3] Ibid, T4, p 14.
[4] Ibid, p 15.
In response to the Respondent’s notice of intention to refuse, the Applicant revised her request as follows:
Information for all ionization smoke alarms tested by the CSIRO in accordance with AS2362.17 since the year 2005 regardless of whether the smoke alarms tested were Listed with the CSIRO ‘Activfire’ listing scheme or not.
1. Make and model number of each ionization alarm.
2. The MIC ‘X’ and smoke density at which each actuating device entered the alarm state as required to be recorded by the CSIRO in Section 7 of AS2362.17.
The time, MIC ‘X’ value and smoke density at which each smoke alarm entered the alarm state in each of the required four tests. This information is typically available in the Appendices of the test report required under section 7 of AS 2362.17. There are typically two tables for each test, the first table being the ‘Test Environment Conditions’ and the other the ‘Smoke Alarm Operational Results’ or similarly named. Please copy these tables complete with titles from each report. This should be a relatively quick exercise.[5]
[5] Ibid, T5, p 17.
On 23 November 2015, the Respondent formally refused the Applicant’s amended FOI request.[6] Ultimately, the Respondent determined that the “substantial resource burden” of complying with the request “would be unreasonable having regard to”:
(i) the need to ensure that other FOI applicants are afforded an opportunity to have their requests dealt with in a timely way;
(ii) the public interest in not diverting officers involved in the subject matter of the request away from performing their usual duties for an excessive duration;
(iii) the realistic and very likely possibility that a significant proportion, if not all, of the documents requested are exempt from the operation of the FOI Act pursuant to s 7[7]
[6] Ibid, T7, p 21.
[7] Ibid, p 22.
Accordingly, the Respondent found that there was a “practical refusal reason” pursuant to s 24AA of the FOI Act and, having complied with the process in s 24 of the FOI Act, refused to give the Applicant access to the requested documents.[8]
[8] Ibid.
On 22 March 2016, the Applicant requested a review of this decision by the Office of the Australian Information Commissioner (“OAIC”).[9] This review came about after the Applicant had made a complaint to the Commonwealth Ombudsman where she argued that the Respondent, in relying on essentially the same grounds in its notice of intention to refuse and in its decision, had acted in bad faith. She further asserted that there were strong public interest reasons why the documents should be released.[10] In response, the Commonwealth Ombudsman informed the Applicant that it was not a merits review body and that if she had an issue with the Respondent’s decision, she could request for it to be reviewed by the OAIC. It was after receiving this information that the Applicant submitted her request.[11]
[9] Ibid, T7, p 25.
[10] Ibid, pp 26-27.
[11] Ibid, p 25.
After a lengthy process including an extension of time request, requests for documents and further information from the Respondent and submissions from both the Applicant and the Respondent, the OAIC made its decision. In a decision dated 22 June 2017, the OAIC varied the Respondent’s decision pursuant to s 55K of the FOI Act and in its place determined that the Respondent “is exempt from the operation of the FOI Act in relation to the documents sought under s 7(2) of the FOI Act”.[12] It is this decision which the Applicant seeks to review before the Tribunal.
[12] Ibid, T2, p 3.
I note at the outset that the Applicant sought to adduce a large amount of evidence in support of her claim. However, the bulk of that evidence – including the oral testimony of her brother, Mr Adrian Butler, and of Mr David Isaac – although interesting and in its own way compelling, was not relevant to the limited issue at hand. Rather, it generally went to contextualising her request under the FOI Act and explaining why she sought this information. Unfortunately for the Applicant, I am bound in my consideration of this matter by the provisions of the FOI Act. I will address the evidence relevant to this inquiry below.
EMPOWERING PROVISIONS
It is necessary to identify the legislative imprimatur facilitating the Respondent’s capacity to – for present purposes – perform the testing services under consideration. Section 9(1) of the Science and Industry Research Act 1949 (Cth) relevantly sets out the functions of the Respondent which, inter alia, comprise:
Functions of the Organisation
(1) The functions of the Organisation are:
(a) to carry out scientific research for any of the following purposes:
…
(iv)any other purpose determined by the Minister.
Section 9AA of the Science and Industry Research Act 1949 (Cth) then invests the Respondent with certain specific powers. Relevantly for present purposes, they comprise, inter alia, the following:
Powers of the Organisation
(1) The Organisation has power to do all things necessary or convenient to be done for or in connection with the performance of its functions and, in particular, may:
…
(e) charge such fees, and agree to such conditions, as the Chief
Executive determines for research and other services carried out, or facilities made available, by the Organisation at the request of any person.
Plainly, the CSIRO had the lawful authority to undertake the tests at issue in this case.
THE ASSERTED GROUNDS OF REFUSAL
The Respondent has moved away from the original grounds of refusal – namely the assertion that there was a practical refusal reason pursuant to s 24 of the FOI Act. Rather, it now relies on the same exception which was found to exist by the OAIC: s 7 of the FOI Act.[13] Accordingly, I will address this ground of refusal first.
[13] Exhibit R1, Respondent’s Statement of Facts Issues and Contentions, [17].
It is instructive to set out the relevant provisions of s 7 of the FOI Act in full:
Exemption of certain persons and bodies
…
(2) The persons, bodies and Departments specified in Part II of Schedule 2 are exempt from the operation of this Act in relation to the documents referred to in that Schedule in relation to them.
…
(3) In subsection (2AA) and Part II of Schedule 2, commercial activities (except when used in relation to NBN Co) means:
(a) activities carried on by an agency on a commercial basis in competition with persons other than governments or authorities of governments; or
(b) activities, carried on by an agency, that may reasonably be expected in the foreseeable future to be carried on by the agency on a commercial basis in competition with persons other than governments or authorities of governments.
…
(4) In subsection (2AA) and Part II of Schedule 2, a reference to documents in respect of particular activities shall be read as a reference to documents received or brought into existence in the course of, or for the purposes of, the carrying on of those activities.
[emphasis in the original]
Part II of Schedule 2 of the FOI Act lists among the agencies that are exempt in respect of particular documents the “Commonwealth Scientific and Industrial Research Organisation, in relation to documents in respect of its commercial activities”. This definition is augmented by ss 7(3) and 7(4). Section 7(4) broadens the definition of documents to any documents “received or brought into existence in the course of, or for the purposes of” the carrying out of the Respondent’s commercial activities. Section 7(3), meanwhile, provides two alternative definitions. Either the activities must be carried out “on a commercial basis in competition with persons other than governments or authorities of governments”, or they are activities that “may reasonably be expected in the foreseeable future to be carried on… on a commercial basis in competition with persons other than governments or authorities of governments.”[14]
[14] Freedom of Information Act 1982 (Cth), ss 7(3)(a)-(b).
The test for the Tribunal, then, is twofold. First, I must determine whether the Respondent was undertaking commercial activities in its testing of the smoke alarms, pursuant to either limb of s 7(3). Secondly, I must determine whether the documents sought by the Applicant were documents in respect of the Respondent’s commercial activities, as defined by s 7(4).
Was the Respondent Engaging in Commercial Activities?
I will now proceed to determine whether the Respondent was in fact engaging in commercial activities as defined in s 7(3)(a). There are several constituent steps necessary to making this finding: (1) there must be a factual finding as to what the relevant activities which the Respondent was engaged in were; (2) it must be determined whether the Respondent was engaging in those activities on a commercial basis; and (3) it must be determined whether the Respondent was being engaged in those activities in competition with others. Section 7(3)(b) contains similar elements, but the question shifts from whether the activities were actually undertaken on a commercial basis in competition, to whether they “may reasonably be expected in the foreseeable future” to be carried on by the Respondent on such a basis. I will first address s 7(3)(a) and its constituent steps.
What were the activities and was the Respondent engaging in them on a commercial basis?
The Applicant asserted, in her oral evidence, that “if the product can’t be sold, there can’t be competition”. This misunderstands the nature of the activity in which the Respondent was engaged. The “product” which the Respondent was selling was its testing of smoke alarms and the production of associated reports. It was not accreditation, and it was not the sale of smoke alarms itself.
The additional argument which can be gleaned from the Applicant’s submissions is, at first blush, more compelling: that the specific activity which is subject to the request is testing under AS2362-17, a particular testing type and standard. Conversely, the Respondent argues that the activity was the testing of fire alarms writ large.
Of these two views, I find the Applicant’s more compelling. While I accept that the Respondent undertook and undertakes smoke alarm testing writ large, the documents requested are not documents related to the entirety of the Respondent’s smoke alarm testing apparatus. Rather, the request was specifically tailored to only refer to documents in relation to a single kind of testing – testing under AS2362-17.
I consider the specificity of this request to be significant. Section 11 of the FOI Act establishes that there is a general right of access to documents produced by the Commonwealth Government or its agencies. When read together with the object of the FOI Act as enunciated in s 3, it is clear that although “the access and exemption provisions must be construed according to their terms”,[15] where those terms are ambiguous, a narrower approach should be favoured.
[15] Bell v Commonwealth Scientific and Industrial Research Organisation [2008] FCAFC 40, [36].
Mr Mark Burgess, who had oversight of the Respondent’s smoke alarm testing at the relevant time, deposed:[16]
4.        The fire systems team [of the Respondent]… undertakes smoke alarm testing and a range of other testing including commercial fire detection…
5.        The fire systems team conduct a range of tests based on Australian and International standards. The testing facility is accredited by the National Association of Testing Authorities (“NATA”).
6.        Testing smoke alarms intended for sale in Australia is performed in accordance with the requirements of Australian Standard AS 3786:2014, Smoke alarms using scattered light, transmitted light or ionisation.
7.        When a customer approaches CSIRO for testing of smoke alarms, they are provided a commercial quotation for the testing to be undertaken. If accepted, customers are asked to sign a commercial contract for the testing services to be undertaken.
8.        At completion of the testing, the customer is provided with a test report that contains the results of the testing. The test report can be used as evidence for subsequent product certification purposes.[17]
[16] Director, Infrastructure Technology and Testing Services, CSIRO: See exhibit R2: Affidavit of Mark Alan Burgess, sworn 28 November 2017.
[17] Ibid, paragraphs [4], [5], [6], [7] and [8].
From Mr Burgess’ evidence, it is apparent that the Respondent tests smoke alarms to several different standards. His oral evidence also made it clear that the nature of this commercial enterprise is that some of the Respondent’s clients will approach it to test smoke alarms to specific standards – including AS2362-17. In these circumstances, it would be painting with altogether too broad a brush to classify the activities undertaken as merely being the testing of smoke alarms. A better description of the Respondent’s activities would be to say it offers a number of services, each of which is testing smoke alarms to a specific standard, using testing methodologies required by those standards. While each test undoubtedly constitutes the testing of a smoke alarm, it is apparent that different clients and different standards require different methodologies to be used in testing.
Especially where the request for documents is for a narrow and specific class of documents which aligns with testing to a particular standard – testing using the methodologies specified in AS2362-17 – it would be inappropriate to lump together the testing to each standard. I consider this to be especially the case where the methodologies are discrete and distinct, and where it appears that certain clients specifically required testing to an individual standard.
A better description of the Respondent’s business of testing smoke alarms would thus be to say it offers testing to certain standards. The testing to each discrete standard is, for present purposes, best-considered as an individual activity undertaken by the Respondent, which may or may not satisfy the requirements of s 7(3).
At issue in the present case is therefore whether, when the Respondent was undertaking testing to determine whether smoke alarms met the AS2362-17 standard, it was doing so on a commercial basis in competition with non-governmental agencies.
I am satisfied that the Respondent was engaging in testing to this standard on a commercial basis. The unchallenged evidence of Mr Burgess is that the Respondent “sells” its testing services to parties for a fee, and produces reports on the test results as a part of the transactions. Indeed, the evidence before me is that the Respondent was approached to undertake testing to the AS2362-17 standard and produce a report on its results for a commercial fee on at least one occasion. Simply, it is abundantly clear that the Respondent was undertaking a commercial transaction when it tested smoke alarms to the AS2362-17 standard.
Was the Respondent engaging in testing in competition with other organisations?
The Applicant argued that the Respondent was not “struggling to get customers” and so was not actively in competition with UL International. She contended that the Respondent had effectively confected the claims that it was in competition with UL International, and that the Respondent’s mentioning of UL International came at a late stage of the proceedings because the Respondent only discovered that UL International had been testing fire alarms late in the piece.
I do not give any credence to this assertion of bad faith on the part of the Respondent. Rather, I accept Mr Burgess’ evidence that the Respondent was aware of competitors because it had been asked to undertake testing both to ensure its competitors’ results were accurate and because it offered testing to standards not offered by some other firms.
Further, the mere fact that the Respondent conducts the majority of smoke alarm testing to Australian standards does not mean that it is not in competition with others. It is fundamentally incorrect to say – as was contended by the Applicant – that there is no genuine climate of competition where, in a theoretical market of a thousand customers, one competitor has 999 customers and the other competitor has one. To my mind, this belies a lack of understanding of what it means for an organisation to be in competition with another. “Competition” does not require or mandate either a titanic struggle between market participants or a consistent, recurring, scenario where respective competitive endeavours produce a “level-pegging” outcome.

Rather, competition in a given marketplace involves multiple firms selling the same (or inherently comparable) goods or services in a given geographic area. Often, all it requires is the absence of a monopoly. With Government agencies, such a monopoly may be state-granted, for instance when the Australian Postal Corporation undertakes “reserved letter services”.[18]
[18] See, e.g., Papps and Australian Postal Corporation [2004] AATA 833.
As was deposed to by Mr Mark Burgess, there was (at the time the requested documents were created) and currently is a clearly identified competitor in the smoke alarm testing area. In his affidavit tendered in evidence, Mr Burgess said:
9.        On 30 October 2017, I sent an email to Mr Ken Wilson, General Manager, Australasia, UL International New Zealand requesting he confirm that UL’s laboratory in New Zealand in 2009 contained a testing facility for smoke alarms in accordance with former Australian Standard AS 3786-1993. On the same day, Mr Wilson responded to my email and confirmed that UL’s Christchurch laboratory operated test facilities for the evaluation of smoke alarms in accordance with AS 3786-1993 in and around 2009. His email states that the facility was operated under International Accreditation New Zealand (“IANZ”) accreditation 363 and was available for third party testing…
12.      I believe that Underwriters Laboratories International New Zealand Ltd is no longer accredited for testing to the requirements of AS 3786-1993, nor do I believe they offer testing to AS 3786:2014
13.      I believe that UL International in Northbrooke, [sic] USA, is accredited to perform testing to the Australian smoke alarm standard AS 3763:2014. This is based on UL promotional material which advertise this service.[19]
[19] Ibid, paragraphs [9], [12] and [13].
It is also relevant to make reference to two exhibits annexed to Mr Burgess’s affidavit. The first, “MAB-3” comprises a photograph of UL International’s stand at 2017 Fire Australia in Sydney. This photographic depiction clearly shows a sign telling the public that “UL is now accredited to perform testing to AS 3786-2014 smoke alarm standard in Australia. Ask how we can help.”
The second exhibit, “MAB-4” comprises a copy of a press release offering smoke alarm tests for Australian customers by UL International. The relevant part of the press release dated September 2015 bears the heading “Australia & New Zealand, Compliance Solutions Update” and says as follows:
Testing of Smoke Detectors to AS 3786
UL has recently added Australian Standard AS 3786 to the scope of accreditation of our Life Safety and Security facility in Northbrook, Chicago. This enables us to issue NATA-MRA endorsed test reports suitable for certification in Australia.
UL accreditation covers the new 2015 edition of AS 3786 and we are excited to offer this new service to our customers within the region.
For information on this service including quotation, turnaround and available testing schedule, please contact…
It is therefore clear that at least one other firm in the marketplace conducted the testing of smoke alarms. However, as discussed above, the specific market at issue here is the market of testing smoke alarms to the AS2362-17 standard. There is no evidence that any organisation besides the Respondent engaged in such testing during the period to which the sought documents relate. Indeed, the evidence of Mr Burgess was that the Respondent was approached to undertake such testing specifically because other firms did not offer it. I therefore cannot find that the Respondent was testing smoke alarms in competition with others so as to satisfy the requirements of s 7(3)(a) of the FOI Act.
May it reasonably have been expected that in the foreseeable future the Respondent would have been engaging in the testing on a commercial basis in competition with others?
A finding that s 7(3)(a) of the FOI Act is not satisfied is not the end of the inquiry. It is also necessary to consider whether the Respondent’s testing of smoke alarms could be exempted pursuant to the alternate provision: s 7(3)(b).
As I have found above, it is clear that the Respondent was engaging in testing on a commercial basis. The question now is whether it may reasonably have been expected that in the foreseeable future the Respondent would have been engaging in the testing in competition with others, pursuant to s 7(3)(b) of the FOI Act.[20]
[20] Discussed in Bell and Commonwealth Scientific and Research Organisation [2007] AATA 1569, affirmed by the Full Court of the Federal Court in Bell v Commonwealth Scientific and Research Organisation [2008] FCAFC 40.
The evidence of Mr Burgess clearly shows that the Respondent was aware that other organisations – including UL International New Zealand – were engaged in the commercial testing of fire alarms. Indeed, UL International based in Northbrook, Chicago, USA has:
(1) issued a press release in September 2015 offering such testing services;[21] and
(2) actively offered those services at a public trade show in Sydney in 2017.[22]
[21] See Exhibit “MAB-4” to the Affidavit of Mark Alan Burgess sworn 28 November 2017 comprising Exhibit R2.
[22] Ibid.
His oral evidence further indicates that clients were coming to the Respondent because other firms did not at that time undertake testing to the AS2362-17 standard. I attribute some significance to this. In an environment of competition, selling a product that others do not sell – here, testing to the AS2362-17 standard – provided the Respondent with a competitive advantage. I am satisfied that it would reasonably have been expected by the Respondent that other firms would seek to neutralise this advantage, and prevent the loss of clients, by commencing testing to the AS2362-17 standard. I am therefore satisfied that the test in s 7(3)(b) has been made out.
IS THERE A GROUND TO OVERCOME SECTION 7?
The Applicant has brought a number of arguments to the effect that the exemption of s 7 is overridden because of the abovementioned “duty of care” on the part of the Respondent to protect the members of the Australian public.
With respect, these arguments are misconceived. The effect of s 7 of the FOI Act is that the Respondent, in certain circumstances which I have already found exist here, is exempted from the operation of the FOI Act. The consequence of this is that the legally-enforceable right to access which the FOI Act otherwise gives individuals under s 11 of the FOI Act does not apply here. The Tribunal’s jurisdiction in this case is limited to claims under the FOI Act. In the absence of a legally enforceable right under that Act to give access to certain documents, I simply cannot make the order that the Applicant seeks.
CONCLUSION
In view of the above, the only finding that is reasonably open to me is to affirm the decision under review. There can be no doubt that the Respondent was engaged in the testing of fire alarms in a commercial capacity. While there is more of an argument regarding whether it was actively in competition with another, I find that it was reasonably foreseeable that the Respondent would be in competition with another firm in the future. Thus, s 7(3)(b) precludes the disclosure of the subject documents under the FOI Act.
Thus, the decision under review is affirmed.

I certify that the preceding 43 (forty -three) paragraphs are a true copy of the reasons for the decision herein of Senior Member Theodore Tavoularis

........................[sgd]................................................
Associate
Dated: 7 August 2018

Date of hearing: 9 July 2018

Applicant: In person

Advocate for the Respondent: Ms Elena Arduca

Solicitors for the Respondent: Australian Government Solicitor

Date of hearing:	9 July 2018
Applicant:	In person
Advocate for the Respondent:	Ms Elena Arduca
Solicitors for the Respondent:	Australian Government Solicitor