Gales Holdings Pty Ltd v Tweed Shire Council (No 2)

[2006] NSWADT 41

CITATION:	Gales Holdings Pty Ltd v Tweed Shire Council (No 2) [2006] NSWADT 41
DIVISION:	General Division
PARTIES:	APPLICANT Gales Holdings Pty Ltd RESPONDENT Tweed Shire Council
FILE NUMBER:	043319
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	09/23/2005
DATE OF DECISION:	02/09/2006
BEFORE:	Higgins S - Judicial Member
CATCHWORDS:	Costs
MATTER FOR DECISION:	Costs
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Freedom of Information Act 1989
CASES CITED:	Brooks Maher v Cheung [2001] NSWADT 18 Gales Holdings Pty Ltd v Tweed Shire Council [2005] NSWADT 168 Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255
REPRESENTATION:	APPLICANT B Woolf, solicitor RESPONDENT N Lawson, barrister
ORDERS:	The Respondent to pay, within 28 days, half of the Applicant’s costs for the preparation for hearing and the Applicant’s costs of the hearing as assessed or agreed.

Background to costs application

1 The Applicant has made an application for costs following its successful application seeking review of a decision of the Respondent to refuse it access to documents that it had requested pursuant to the Freedom of Information Act 1989: see Gales Holdings Pty Ltd v Tweed Shire Council [2005] NSWADT 168 (“the Review Decision”).

2 On 16 July 2004, the Applicant, Gales Holdings Pty Ltd, through its solicitors, had requested the Respondent, Tweed Shire Council, to grant it access to three categories of documents pursuant to the Freedom of Information Act 1989 (“FOI Act”). The first two categories related to documents that evidenced the cost to the Respondent of two specified studies that it had commissioned. The third category related to specified retail studies or investigations undertaken by named consultants engaged by the Respondent. Although the full details of the FOI request and the Respondent’s response to that request are set out in the Review Decision, it is necessary to repeat some of these.

3 The Respondent responded to the Applicant’s FOI request on 26 July 2004 stating that access to the documents coming within the first two categories was refused as the Respondent had determined that these were exempt under cl.7(c) of Schedule 1 of the FOI Act (documents containing matter affecting business affairs (see para. [2] of the Review Decision). In respect of the documents coming within the third category, the Respondent advised that it had only received draft copies of the study from its consultants and that once it was finalised it would be presented to Council and then placed on public exhibition. This decision was then confirmed by the Respondent’s General Manager on 24 August 2004 in his internal review determination: see para [4] of the Review Decision. In respect to the first two categories of documents this remained the position of the Respondent until after lunch on the first day of the hearing when the Respondent’s counsel advised the Tribunal that the Respondent had determined to grant access to all the invoices that came within these categories. It is the Tribunal’s understanding that the Applicant had not pressed access to all the documents for which access had been refused.

4 In respect to the third category of documents the Respondent also continued to refuse access to these documents on the basis that the documents were exempt under cl.7 and 13 of Schedule 1 of the FOI Act.

5 Initially there were 19 documents that came within category 3. Included in these was a “Retail Development Strategy for the Tweed Report” prepared by the Respondent’s consultants Core Economics. Three different versions of this report were included in the list. These were substantial reports, which the Respondent claimed were exempt under cl.13, 9 and 7 of Schedule 1 of the FOI Act. Again during the course of the hearing, the Respondent decided to only press the exemption in respect to certain portions of information in those reports. The remainder it determined were factual and historical in nature and not exempt. As a consequence, prior to the second day of hearing, the Respondent gave the Applicant access to a copy of those reports with the exempt material deleted. It was these deletions, together with other documents that came within category 3 that were the subject of the Review Decision and in which I determined that the Respondent had failed to establish the exemption claimed.

Principles governing costs

6 The Tribunal has no inherent power to award costs however, it has been given such a power under s.88 of the Administrative Decisions Tribunal Act 1997 (“ADT Act”) . It is a discretionary power but it can only be exercised where the Tribunal is satisfied that there are “special circumstances” warranting an award of costs. This means that in order to obtain a cost order an applicant has two hurdles to overcome. The first being able to identify “special circumstances” and the second being able to show that the “special circumstances” warranted an award of costs: see Gizah Pty Ltd v AXA Trustees Limited (No. 2) [2001] NSWADT 164 at [29].

7 “Special circumstances” have been defined as “circumstances that are out of the ordinary, but without having to be extraordinary or exceptional”. It is well established that mere success in a review application does not constitute special circumstances: see Brooks Maher v Cheung [2001] NSWADT 18 at [11]. It is also well established that the mere fact that the Tribunal did not agree that the Administrator’s decision was a correct and preferred decision is not sufficient to constitute special circumstances for the purposes of s.88(1) of the ADT Act: see Hutchings Electrical v Director General, Department of Fair Trading (No. 2) [2002] NSWADT 255 at [18].

8 In Practice Note 12, reissued on 11 May 2005, the following examples of “special circumstances” which may warrant an order for costs under s.88(1) of the ADT Act are set out as follows:

“Whether a party has conducted the proceedings in the way that disadvantaged another party to the proceedings by conduct such as:
(i) failure to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(iv) causing an adjournment;

(v) attempting to deceive another party or the Tribunal;

(vi) vexatiously conducting the proceedings;

(vii) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings; and

(viii) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law.

9 The Applicant has contended that the Respondent’s handling of its FOI request and its conduct in the hearing of this application gave rise to special circumstances. In particular, it was contended that the Respondent had:

(a) persistently failed to observe the procedures set out in the FOI Act . In this regard the Applicant pointed to the fact that the Respondent did not provide any reasons for decision in its internal review decision. It also pointed out that in its original determination of the FOI request the Respondent had failed to identify those documents that it held and which came within the Applicant’s request and for which exemption was claimed. These were not identified until after the Applicant had lodged its application for review and the matter came before the Tribunal at a planning meeting.

(b) relied on an exemption that had no tenable basis in fact or law – in this regard the Applicant pointed to various findings in the Review Decision where the Tribunal had found that the Respondent’s claim for or of a particular exemption was misconceived or in respect of which it had produced no evidence to support its claim. The particular paragraphs of the Review Decision relied upon were [13], [16], [53 and 54], [57], [66], [75 and 76], [83-86], [91], [97], [101] and [107];

(c) unreasonably delayed in supplying documents – in this regard the Applicant pointed to the delays in providing the initial list of documents for which exemption was claimed and the further delays in providing an amended list after the Applicant had pointed to obvious absences of documents (e.g. invoices) in the initial list.

10 The Applicant also pointed to the fact that during the hearing of the application the Respondent changed its position in respect of the documents that came within category 3. That is, during the course of the hearing the Respondent gave the Applicant access to a full or edited version to all of these documents, while the Applicant had prepared its case on the basis of there being a refusal for the entirety of each document.

Respondent’s contentions

11 The Respondent contended that in respect of the documents in category 1 and 2, an agreement had been reached between the parties after the first day of hearing. That agreement was for a more limited production of documents sought.

12 In respect to the Tribunal’s findings about the documents, or parts of the documents, that the Respondent had claimed to be exempt the Respondent contended that as the Tribunal had made no adverse findings against the Respondent in this regard and there was no evidence to indicate that the Respondent had acted in a way so as to bring it within one or more of the examples set out in the abovementioned practice note.

13 The Respondent conceded that there was a delay in providing the Applicant with copies of the invoices it had requested. That delay of five weeks the Respondent submitted was not an unreasonable delay.

14 In respect to the allegations of having relied on an exemption that had no tenable basis in fact or law, the Respondent contended that the mere fact that the Tribunal found that the Respondent had failed to establish its claim of exemption did not mean that there was no basis for such a claim.

Reasoning

15 While I agree with the Respondent that the fact that the Tribunal found that the evidence did not support the exemption claimed, does not automatically give rise to special circumstances, let alone special circumstances that warrant an order for costs.

16 However, in my opinion, in this particular application, when regard is had to the manner in which the Respondent determined the Applicant’s FOI request, together with the Respondent’s persistence in claiming that documents were exempt and then changing its position just before or during the hearing of the application does give rise to special circumstances.

17 In this case, the terms of the Applicant’s FOI request was clear in that the documents for which access was sought were well particularised. However, the Respondent appears to have failed to properly consider and assess each of the documents it held against the exemptions it claimed as being the basis of its refusal to grant access. This, in my opinion, is reflected in both the notice of the initial and the internal review determination. What is to be contained in such notices is set out in s.28 of the FOI Act. Where there is a determination to refuse access, para 28(2)(e) requires the agency to specify in the notice the reasons for refusal and “the findings on any material questions of fact underlying those reasons, together with a reference to the sources of information on which those findings are based. It is generally accepted that the “reasons” for refusal must be one or more of those set out in the FOI Act for which an agency can refuse access.

18 In this case, in the initial determination the Respondent said that access was refused to all the documents in categories 1 and 2 as they were exempt under cl.7(1)(c) of Schedule 1 of the FOI Act. That exemption relates to documents affecting the business affairs of an agency or another person. However, in its notices of determination (initial and internal review) the Respondent did not specify the material facts on which that decision was made. It was not until the planning meetings before the Tribunal that the Respondent’s legal representative gave an explanation of the factual basis on which the exemption was claimed. That explanation was to the effect that the documents would disclose the rates of charges of the consultants who had been engaged by the Respondent and that these rates were confidential and commercially sensitive.

19 In respect of the documents that came within category 3, the notices of determination (initial and internal review) failed to specify the particular exemption relied on by the Respondent in refusing access to the documents requested. Section 26 of the FOI Act makes provision for deferral of access in certain circumstances, however, this was never a ground relied on by the Respondent. As mentioned in the Review Decision, subsequently after the Applicant had made its application for review, the Respondent identified various other grounds for refusal of access.

20 In light of the inadequate determination notices of the Respondent it is understandable that the Applicant sought review in the Tribunal. These inadequate notices of determination are not necessarily sufficient to constitute special circumstances. However, as I have mentioned above, in my opinion, in this application, they were a substantial contributing factor.

21 In respect to the documents coming within the first two categories, the Applicant clearly sought access to copies of invoices received and paid by the Respondent in respect to the two named studies. In the event there was any doubt, on 21 January 2005, following the first planning meeting and on receiving the Respondent’s list of documents that it held and which came within these categories, the Applicant’s solicitor wrote to the Respondent’s solicitor advising that the Applicant did not seek documents that contained information about the rates of charges of the consultants – it only sought access to documents that identified what had been paid by the Respondent for these studies. In the letter the Applicant’s solicitor went on to point out that the Respondent’s list of documents did not contain any reference to invoices from the relevant consultants. As a result of the letter the Respondent provided an amended list, which did include such invoices and for which the Respondent continued to claim the cl.7(1)(c) exemption in that they contained information that affected the business affairs of the consultants who had issued the invoice. The Tribunal understands that these invoices were subsequently released in full during the course of the hearing.

22 It is difficult to see how the cl.7(1)(c) exemption could have applied to these invoices, particularly as the Respondent did not put on any evidence (confidential or otherwise) that would support such an exemption or any other exemption. The consultants’ work had clearly been done and been paid for by the Respondent. They are the type of document that Parliament intended members of the public should have a right to access to should they wish to.

23 I agree that, in this application, the Respondent’s delay in providing an updated list of documents is not a relevant factor in determining whether there are special circumstances that warrant a cost order. However, for the reasons set out above, the Respondent’s inadequate notices of determination, its persistence in claiming that the invoices were exempt without any evidence to support such a position and the fact that ultimately at the hearing it agreed to release the documents constitutes special circumstances. This, in my opinion, was conduct that disadvantaged the Applicant. In proceedings for a review of an agency’s determination to refuse an applicant access to documents under the FOI Act, every applicant is notionally under a disadvantage as the content of the exempt document cannot be disclosed: see s. 55 FOI Act. The reason for this is obvious. This disadvantage, however, has been counterbalanced by the agency being required to satisfy the Tribunal that the documents are in fact exempt: see s.61 FOI Act. Accordingly, depending on the types of documents in dispute and the nature of the exemption claimed an applicant’s role at a hearing varies. The applicant very rarely files any evidence, but usually makes submissions on the open evidence that is filed and responds to the agency’s submissions and reason for the decision that is the subject of review. In this application, the Applicant tendered into evidence documents in support of its contention that the documents in issue were not exempt as claimed by the Respondent. It also briefed counsel to appear at the hearing and to make extensive submissions on its behalf. In my opinion, having regard to the position adopted by the Respondent up to the middle of the first day of hearing this was not an inappropriate position for the Applicant to adopt as there was a lengthy history behind the documents for which access was sought. However, had the Respondent, prior to the application being set down for hearing, given proper consideration to the exemption claimed in respect of the invoices the Applicant would not have been required to expend costs on preparation and hearing, which related to these.

24 In respect to the documents in the third category, the Respondent’s change of position to these documents during the course of the hearing, in my opinion, also constituted special circumstances. In this regard it was not the fact of a change of position, but the fact that the change occurred so late in the proceedings. Furthermore, that material, which was released the Respondent acknowledged was factual in nature and could under no circumstances be claimed to be exempt.

25 On the other hand, in my opinion, it cannot be said that in respect of the category 3 documents the Respondent relied on exemptions that had no tenable basis in fact or law. It is not uncommon for an agency to claim a document is exempt on more than one ground, however in order for its determination to refuse access to be affirmed on review it only needs to satisfy the Tribunal that it is exempt under one of those grounds. In this application there were grounds relied on, which in my opinion, were arguable, but as set out in the Review Decision the Respondent failed to satisfy the Tribunal that the deletions in the relevant documents were in fact exempt.

26 In my opinion, the special circumstances set out above also warrant an order for costs being made under s.88 of the ADT Act as the conduct of the Respondent resulted in the Applicant incurring unnecessary costs. Those unnecessary costs being in respect to the costs incurred by the Applicant in its preparation for and the hearing of its review application and which related to the Respondent’s claim of exemption in respect of the invoices and the other material that was released from the documents that came within category 3. It is difficult to attribute with precision that portion of the hearing that was unnecessary, however, in my opinion had the hearing proceeded only on those particular deletions in the documents for which the Respondent ultimately claimed exemption, the hearing would have taken no more than one day. Accordingly, in my opinion, the appropriate order would be for the Respondent to pay half of the Applicant’s costs in the preparation for hearing and in having legal representation at the hearing. Had there been evidence of the Respondent seeking to conduct the proceedings vexatiously the position would have been different. However, there was no such evidence. As explained above, at most the evidence was that the Respondent had failed to give proper consideration to the Applicant’s FOI request in that it failed to meet its statutory obligations when determining the Applicant’s FOI request and that through its late change in position it caused the Applicant unnecessary costs in its preparation for and during the hearing.

Decision

27 For the reasons set out above, the Tribunal orders that the Respondent is to pay, within 28 days, half of the Applicant’s costs for the preparation for hearing and the Applicant’s costs of the hearing as assessed or agreed.