Goodenough v Coffs Harbour City Council

[2024] NSWCATAD 276

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Goodenough v Coffs Harbour City Council [2024] NSWCATAD 276

Hearing dates:

11 and 12 March 2024

Date of orders:

19 September 2024

Decision date:

19 September 2024

Jurisdiction:

Administrative and Equal Opportunity Division

Before:

J D Little, Senior Member

Decision:

(1)   The orders numbered orders 4 and 5 made on 12 March 2024 be set aside to the extent that they pertain to the following information and/or documents (such that the following information and/or documents no longer fall within the meaning of "Confidential Material" as defined in order 2 made on 12 March 2024):

(a)   The names of the Transaction Documents.

(b)   The fact that the Implementation Agreement relates to, amongst other things, the transfer of certain assets for the operation, maintenance or development of the Airport and the grant of the lease of the "Leased Area" including the Enterprise Park.

(c)   The fact that the Development Agreement relates to the development of the "Leased Area" including the Enterprise Park.

(d)   The fact that the Transitional Services Agreement relates to the provision of services during a transitional period

(e)   The fact that the current zoning of the site proposed for the Enterprise Park and the need to rezone the site which is a matter of public knowledge as evidenced in the minutes and agendas of the Council and publicised in the media.

(f)   The Permission Letter.

(g)   Any other information disclosed publicly by virtue of this decision.

(h)   The documentary evidence relied upon by the Respondent and the Intervenor to contend that an obligation of confidentiality arises either with respect to the tender process or the executed Transaction Documents being:

(i)   the Confidentiality Provisions of each of the Transaction Documents including the definitions of the defined terms as used in those provisions;

(ii)   the Deed Poll;

(iii)   the Non-Binding Bids Process Letter; and

(iv)   the Binding Bids Process Letter

(2)   The decision of the Respondent is set aside.

(3)   Within 5 days of the making of these orders, a copy of this decision be provided to the Respondent and Intervenor with the following paragraphs unredacted:

(a)   Paragraphs marked “NOT FOR PUBLICATION”; and

(b)   Paragraphs marked “NOT FOR PUBLICATION FOR 35 DAYS”.

(4)   Within 35 days of the making of these orders:

(a)   The information responsive to the Infrastructure Information Access Request and the Rezoning Information Request (as defined at paragraph 2 of this decision) be provided to the Second Applicant by way of a redacted copy of the Development Agreement redacted consistent with paragraphs 252 and 253 of this decision.

(b)   A copy of this decision be published with the following paragraphs unredacted:

(i)   Paragraphs marked “NOT FOR PUBLICATION FOR 35 DAYS”

Catchwords:

ADMINISTRATIVE LAW – access to government information – access applications – balancing exercise - public interest considerations in favour of disclosure – public interest considerations against disclosure – whether overriding public interest against disclosure

Legislation Cited:

Administrative Decisions Review Act 1997

Civil and Administrative Tribunal Act 2013

Government Information (Public Access) Act 2009 Health Records and Information Privacy Act 2002

Privacy and Personal Information Protection Act 1998

Cases Cited:

AFW v Workcover Authority of NSW [2013] NSWADT 51

Australians for Sustainable Development Inc v Barangaroo Delivery Authority [2013] NSWADT 252

Battin v University of New England (2013) NSWADT 73

Camilleri v Commissioner of Police, NSW Police Force [2012] NSWADT 5

Collins v Department of Finance, Service and Innovation [2018] NSWCATAD 60

Commissioner of Police v Danis [2017] NSWCATAP 7

Commissioner of Police, New South Wales Police Force v Camilleri (GD) [2012] NSWADTAP 19

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434

Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409

Ex parte Palme 216 CLR 212

Flack v Commissioner of Police, New South Wales Police [2011] NSWADT 286

Hopson v Commissioner of Police, NSW Police Force [2017] NSWCATAD 379

Hurst v Wagga Wagga City Council [2011] NSWADT 307

Johnson v Wollondilly Shire Council [2022] NSWCATAD 182

Jy v Commissioner for Police, NSW Police Force [2008] NSWADT 306

Male v Kempsey Shire Council [2022] NSWCATAD 39

McKean v Attorney-General and Justice [2015] NSWCATAD 176

Moran v Shellharbour City Council [2022] NSWCATAD 112

Optus Networks Pty Ltd v Telstra Corp Ltd (2010) 265 ALR 281

Parry-Jones v Law Society [1968] 1 All ER 177;

Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73

Taylor v Destination NSW [2020] NSWCATAD 137

Thomson v Commissioner of Police [2021] NSWCATAD 53

Walker v Northern Beaches Council [2021] NSWCATAD 251

Texts Cited:

R Meagher, J Heydon and M Leaming, Meagher Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002)

Category:

Principal judgment

Parties:

Shannon Goodenough (First Applicant)
H A Bachrach (Nom) Pty Ltd (ACN 005 026 326) (Second Applicant)
Coffs Harbour City Council (Respondent)
Coffs Harbour Airport Pty Ltd (First Intervenor)
NSW Information Commissioner (Second Intervenor)

Representation:

Counsel:
Q M Noakhtar (Applicant)
R Coffey (Respondent)
L Livingston SC; S Hoare (First Intervenor)

Solicitors:
Fishburn Watson O’Brien (Applicant)
HWL Ebsworth Lawyers (Respondent)
Minter Ellison (First Intervenor)

File Number(s):

2023/00232401

Publication restriction:

(1) Section 64 of the Civil and Administrative Tribunal Act 2013 applies to those paragraphs of these reasons identified as [NOT FOR PUBLICATION]. That material is not to be published or released to the Applicants.
(2) Section 64 of the Civil and Administrative Tribunal Act 2013 applies to those paragraphs of these reasons identified as [NOT FOR PUBLICATION FOR 35 DAYS] for a period of 35 days from the date of this decision. That material is not to be published or released to the Applicants during that period of 35 days.

REASONS FOR DECISION

1. This is an application for administrative review of a decision of the Respondent concerning access to government information under the Government Information (Public Access) Act 2009 (the GIPA Act).

2. The access request relates to certain agreements made by the Respondent (the Council) with respect to the leasing of the Coffs Harbour Airport (the Airport) and the development of an “Enterprise Park” (the Enterprise Park Development). The access request has been further limited such that the entire agreements making up what is referred to below as the “Transaction Documents” are no longer sought. During the proceedings, the information the subject of the access request was limited to the Transaction Documents in so far as they contain the following information:

1. any infrastructure-type works agreed to be undertaken by the Council on the Enterprise Park such as site remediation, roads, sewerage, power and the like (Infrastructure Information Access Request).

2. any rezoning planned or agreed to be undertaken by Council for all or part of the Enterprise Park (Rezoning Information Request).

3. As discussed further below, according to the Council’s decision (the Original Decision), the information the subject of the access request were not disclosed because there was an overriding public interest against disclosure in consideration of section 14 table items 4(b) and (d) of the GIPA Act, namely:

• reveal commercial-in confidence provisions of a government contract; and

• prejudice any person’s legitimate business, commercial or professional or financial interests.

4. The Council maintains this position despite the limiting of the access request and also relies upon section 14 table, items 1(d) and 1(g) and submits that the disclosure could reasonably be expected to:

1. prejudice the supply of confidential information to the Council; and

2. found an action against Council for breach of confidence or otherwise result in the disclosure of information provided to Council in confidence.

5. The Second Applicant challenges the Council’s position and maintains that access should be granted.

6. For the reasons that follow, I set aside the Respondent’s decision and grant access to the information falling within the scope of the access application.

Background

7. The changes to the governance and management of the Airport and the Enterprise Park Development have a long and complex history.

8. As early as May 2013, the Council considered an evaluation regarding possible changes to the governance and management model for the Airport. At that time, the Airport was being operated by the Council albeit managed by way of a third-party management contract with an airport manager but with the operations undertaken through a Council business unit. The management contract was due to expire in March 2019.

9. The 2013 evaluation report is not before the Tribunal, however, according to the Council’s agenda for a subsequent meeting on 23 November 2017 relating to the governance of the Airport (the Governance Agenda), the models considered included, but were not limited to, a “Private Sector Concession Model” (or “Public Private Partnership”). The Governance Agenda states:

Although the [2013] report did not clearly recommend an option, the Private Sector Concession Model scored the highest in the evaluation.

10. While it was determined by the Council that none of the models ought to be advanced at that time, it was ultimately through the consideration of these “possible governance and management models” that the idea of a long-term lease of the Coffs Harbour Airport was born. The documents support that the development of an Enterprise Park was being considered in unison with the possibility of changing the governance model of the Airport.

11. This is reflected in the fact that the possibility of revisiting the issue of the preferable governance model was raised again by the Council in 2015 but it was not pursued because the subdivision development application relating to the land intended for the Enterprise Park was not yet determined (i.e. a 99-lot subdivision in the northern precinct of the Airport). While the Governance Agenda does not refer to “the Enterprise Park”, the minutes of meeting of 23 November 2017 numbered BS17/47 do (the Enterprise Park Development Minutes) and it is clear from reading the documents together along with the minutes of meeting also of 23 November 2017 numbered BS17/48 (the Governance Minutes) that the references to the “subdivision development application” which is located in the “northern precinct” in the Governance Agenda is to the land intended for the Enterprise Park. The Governance Agenda states:

… a report was presented to Council in July 2015 to undertake a study as a first phase to inform future governance options for {the Airport]. However, Council resolved to take no action at the time. It was understood that this was partly due to the fact that the land division subdivision DA had not yet been determined.

12. In July 2017, the development application relating to the subdivision was approved by the Northern Joint Regional Planning Panel.

13. Following this approval, in November 2017, the Council considered it appropriate to progress with a study of possible governance and management options for the Airport in unison with the continued progress of the Enterprise Park Development. To do this, the Council consulted with “The Airport Group” which is described in the Governance Agenda as “specialised airport consultants” who had “previously provided a number of briefings to Council on airport related matters”.

14. According to the Governance Agenda, the issues that required consideration in determining the appropriate governance and management model for the Airport included, but were not limited to, the means to fund the Enterprise Park Development. With respect to the issue described as “Capital investment and growth”, the Governance Agenda states:

… [the Airport] is continuing the process to develop its land holdings to produce additional revenue and more appropriate returns. In July 2017 the development application for a 99 lot subdivision in the Northern Precinct of the airport was approved. The financial modelling associated with the land development shows a significant capital investment in the order of $24M will be required to complete the development.

… the capacity for [the Airport] to continue to comfortably fund its capital investment requirements into the future is becoming constrained.

Governance options that leverage third party funds such as long term leasing, joint venture or other corporate arrangements are options worth exploring in this regard.

15. Additionally, with respect to the issue of “Economic returns”, the issue is described in part as:

… an option such as long term leasing also provides an opportunity for upfront returns which provides a cash flow that Council may choose to use to fund other capital intensive initiatives.

16. Another issue that was raised included “Long term management” and the preference to “share risk”. With respect to “Long term management”, the Governance Agenda stated.

The current management services contract expires in March 2019. The tender for airport management services held in 2013 did not receive a strong response from the market. It is also a specialist management area. Therefore, it is somewhat uncertain that this will remain a long term viable option and therefore it would be prudent for Council to further explore other options that mitigate that risk.

17. With respect to “Risk Analysis”, the Governance Agenda stated:

The current governance and management arrangements have Council as the owner and operator carrying the full risk associated with [the Airport]. Some other governance models. Particularly those involving a third party partner, provide a mechanism to share risk and returns…

18. On 23 November 2017, by way of the Governance Minutes, the Council endorsed the undertaking of an options study to inform consideration of future governance/management options for the Airport. The proposal was carried unanimously.

19. On the same day as the Council meeting endorsing an options study as to future governance/management options for the Airport, the Council made resolutions to continue to progress the Enterprise Park Development which had already been advanced including by the completion of an “Airport Masterplan” which incorporated the development as described in the Enterprise Development Minutes. The Enterprise Development Minutes stated:

ORDINARY COUNCIL MEETING MINUTES

23 NOVEMBER 2017

B31717 COFFS HARBOUR REGIONAL AIRPORT ENTERPRISE PARK DEVELOPMENT

EXECUTIVE SUMMARY

Coffs Harbour Regional Airport (CHRA) has identified land in the northern general aviation precinct that is surplus to future airside operational needs and is suitable for the development of the Enterprise Park to cater for economic growth in the region. The development of this area is also contained in the Airport Masterplan.

Planning approval to redevelop the precinct as a 99-lot subdivision was determined by the Northern Joint Regional Planning Panel in July 2017.

The 99-lot development will be staged with an approximate total investment of $24M. The project is intended to make a meaningful contribution to Coffs Harbour’s regional role as an economic and employment hub that leverages from the competitive advantages of the existing airport infrastructure and the inherent natural advantages of the site.

However, to test the financial feasibility of the land development CHRA commissioned two financial models. Both financial models demonstrate that the land development provides positive. It is intended that the development be undertaken in up to seven stages and preliminary assessment suggest that the initial development should provide for stages 1 and 2. The initial investment for stages 1 and 2 is estimated at $10.5M.

If required, funding can be provided through internal borrowings from Councils Water and/or Sewer Funds and thereby utilise some of the currently held unexpended loan funds of approximately $46.8M. However, it is also possible that grant funding for the Enterprise Park may be gained through NSW Regional Growth Fund.

The preparation of a Probity plan to guide the ongoing CHRA Enterprise Park development will ensure proper decision making processes are followed, conflicts of interest are managed and Council's reputational risk is minimised.

2017/280 RESOLVED (Cr Keith Rhoades / Cr George Cecato)

That Council:

1.   Continue to advance the CHRA Enterprise Park development, in particular stages 1 and 2.

2.   Note the preparation of a Probity Plan to guide the ongoing CHRA Enterprise Park development.

3.   Continue to seek grant funding from the NSW Regional Growth Fund for the CHRA Enterprise Park development.

4. Seek ministerial approval under Section 410(3) of the Local Government Act 1993 to undertake internal borrowing from the Water and/or Sewer Funds, in order to provide debt funding of up to $10.5M for stages 1 and 2 of the CHRA Enterprise Park development.

For: Crs Knight, Adendorff, Amos, Cecato, Rhoades, Strom and Swan

Against: Cr Townley

CARRIED

20. As indicated above, these resolutions were not carried unanimously.

21. In or around March 2018, The Airport Group were retained to undertake the options study in accordance with Council's resolution as described in the Governance Minutes.

22. According to the evidence of Mr Andrew Beswick, who at the time was the Director of Business Services for the Council, The Airport Group produced a report setting out the various options available through which a public infrastructure asset such as the Airport can be operated and managed along with case studies. The report is not in evidence despite having been included as an attachment to the Council Meeting Agenda of 28 June 2018 which is in evidence and despite it not being noted in the agenda that it was “confidential” (which is the case with attachments to other agendas as detailed below). The description of the report contained in the agenda refers to the report considering “various options” with a number being dismissed. Rather, the ‘’in-depth analysis” only focused on options considered workable in the environment being:

1. A Council operated airport;

2. Airport management contract with a third-party operator;

3. Transfer of the Airport operations into a Council owned corporate entity; and

4. Long term lease of the Airport to a third-party investor/ operator

23. According to the description in the agenda:

The report recommends that further work be done on both the airport management contract model and airport lease model to gauge readiness for implementation of both these options…

24. Despite the recommendation in the report, the resolution made by the Council on 28 June 2018 not only provided for further investigation into the possibility of an airport management contract and a leasehold arrangement but also the possibility of a Council owned corporate entity model. The work was to include:

1. That Council seek a formal valuation for the Coffs Harbour Airport offered for tenure with a long term lease.

2. That Council seek a formal valuation for the proposed Enterprise Park at Christmas Bells Drive, exploring various leasehold and long term tenure options.

25. The motion was carried unanimously.

26. According to the evidence of Mr Beswick, The Airport Group produced a further report recommending that the Airport Lease model be implemented. As stated by Mr Beswick, that recommendation was made “on the basis of that it would create separation of operational and ongoing funding responsibility, deliver financial benefits to the Council, and the opportunity to partner with a financially capable investor.”

27. The further report is not included in the open evidence. It is described in the agenda as being:

Confidential in accordance with Section 10A(2)(c) of the Local Government Act as it contains information that would, if disclosed confer a commercial advantage on a person with whom the Council is conducting (or proposes to conduct) business.

28. Section 10A of the Local Government Act 1993 (NSW) (the Local Government Act) states:

10A Which parts of a meeting can be closed to the public?

(1) A council, or a committee of the council of which all the members are councillors, may close to the public so much of its meeting as comprises--

(a) the discussion of any of the matters listed in subclause (2), or

(b) the receipt or discussion of any of the information so listed.

(2) The matters and information are the following--

(a) personnel matters concerning particular individuals (other than councillors),

(b) the personal hardship of any resident or ratepayer,

(c) information that would, if disclosed, confer a commercial advantage on a person with whom the council is conducting (or proposes to conduct) business,

(d) commercial information of a confidential nature that would, if disclosed--

(i) prejudice the commercial position of the person who supplied it, or

(ii) confer a commercial advantage on a competitor of the council, or

(iii) reveal a trade secret,

(e) information that would, if disclosed, prejudice the maintenance of law,

(f) matters affecting the security of the council, councillors, council staff or council property,

(g) advice concerning litigation, or advice that would otherwise be privileged from production in legal proceedings on the ground of legal professional privilege,

(h) information concerning the nature and location of a place or an item of Aboriginal significance on community land,

(i) alleged contraventions of any code of conduct requirements applicable under section 440.

(3) A council, or a committee of the council of which all the members are councillors, may also close to the public so much of its meeting as comprises a motion to close another part of the meeting to the public.

(4) A council, or a committee of a council, may allow members of the public to make representations to or at a meeting, before any part of the meeting is closed to the public, as to whether that part of the meeting should be closed.

29. The information in the agenda makes clear that the Enterprise Park was a consideration in determining the appropriate model, with respect to the Airport Management Contract Model, the agenda describes the further report as stating:

Enterprise Park

The responsibility for funding the Enterprise Park would still rest with Council (approximately $24 million). Whilst an airport management contract could include the requirement to oversee the development and marketing of the Enterprise Park this would come at an additional cost to the management fee outlined above.

30. With respect to the development of the Enterprise Park and the Airport Lease Model, the agenda described the substance of the further report as follows:

Enterprise Park

In addition to the approximate $24 million of capital required to undertake the civil works, there is the potential to invest in building development in the Enterprise Park. Historically this has been the approach by airport lessees at other airports. The Enterprise Park could accommodate approximately $200 million of building development.

31. On 6 December 2018, the Council resolved to:

1. Progress the Airport Lease model for the Airport to the next stages of preparation and due diligence and undertaken an expression of interest (EOI).

2. Endorse the procurement of independent expert advisors to assist with advancing the airport lease process.

3. Note that a further report on the outcome of the EOI will be provided to Council for consideration.

32. These resolutions were not carried unanimously with Councillor Townley voting against.

33. The next day on 7 December 2018, the Daily Telegraph published an article entitled “Vision for international airport a step closer” to reality. The article stated, inter alia:

The recommendation to progress the lease model to the next stage was passed 6-1 with councillor Sally Townley voting against, saying she believed the airport should remain under public ownership.

Mayor Denise Knight, however, said it was important to “move forward” for the benefit of locals, agriculture, and tourism.

Speaking at the council meeting, Coffs Harbour Chamber of Commerce president Martin Wells cautioned councillors it would be the “most important decision” to come before them.

…

Speaking against, Peter Wardman, who has experience on the airport council committee, said airport users could be overcharged under a third-party arrangement.

The Airport lease process

34. In May 2019, KPMG were retained as the independent expert advisors for the Airport Lease process following a tender process that began in February 2019. The agenda for this meeting attached an assessment of KPMG’s tender. The agenda marks it as “Confidential” pursuant to s 10A(d)(i) and (d)(ii) of the Local Government Act. This is not included in either the open or closed evidence in these proceedings.

35. According to the Council’s minutes of meeting of 9 May 2019:

1. $450,000 was allocated by the Council in the 2018/19 budget for the Coffs Harbour Airport Independent Advisory Consultancy from the Council’s Strategic Initiatives Reserve; and

2. approval was given to the payment of KPMG’s fixed fee pursuant to a fixed fee contract which was $872,000 excluding GST.

36. The motion was not unanimous with Councillor Townley voting against the motion.

37. According to the evidence of Mr Beswick, the Airport lease process was managed in five stages as proposed by KPMG being:

1. The first stage involved a “Review” by which a gap analysis report would be produced so by KPMG to establish an action plan for the transaction. The indicative timing was between June to August 2019.

2. The second stage was a period to obtain “Expressions of interests and non-binding bids”. The indicative timing was between August to October 2019. This stage included:

1. marketing sounding;

2. registration of interest and advertising campaign;

3. receipt of confidentiality deed polls;

4. issuance of information memorandum and process letter;

5. non-binding bid process from 1 to 25 October 2019; and

6. bid receipt and evaluation

3. The third stage was “Tender for Binding Bids.” The indicative timing being from November 2019 to February 2020.

4. The fourth stage was “Preferred tenderer lease negotiations and execution” being from February to March 2020.

5. The fifth stage was lease monitoring.

38. Mr Beswick also gives evidence that “at the commencement of the airport lease process” other third-party service providers were retained including:

1. the law firm Ashurst to provide legal advice;

2. O’Connor Marsden to prepare an Airport lease probity plan; and

3. Other experts to provide due diligence reports on various elements and for inclusion in a data room for the third stage.

39. The evidence before this Tribunal does not include a copy of legal advice from Ashurst or the probity plan as described above.

Non-binding bid process

40. On 27 August 2019, an advertisement was listed in the Australian Financial Review and distributed to an email database of groups that were perceived to have a financial interest in airports. This was part of the registration of interest stage which was stage two.

41. According to Mr Beswick, parties who registered their interest were provided with, inter alia, a request to submit their details and to execute a Confidentiality Deed Poll. According to Mr Beswick, this “Confidentiality Deed Poll” (as described by Mr Beswick) was prepared by Ashurst and:

… set out [that the] information disclosed by potential bidders or the Council and its advisors during the bidding process was to be kept strictly confidential.

42. Mr Douglas Park, who is a director of the Intervenor and an investment manager of Palisade Investment Partners Limited (being the investment manager of the company that owns 100% of the shares in the Intervenor) (Palisades) exhibits a copy of the deed poll which was executed by Palisades on 27 September 2019 to his Affidavit which was prepared by Ashurst (the Deed Poll). He describes it as a “confidentiality agreement”. In the context of describing the Deed Poll, Mr Park states:

The bid and tender process required the exchange of confidential information between Palisade and Council with both parties committing to preserve the confidences of the other.

Palisade signed a confidentiality agreement as part of the tender process to ensure all information shared y Council to Palisade in connection with the Coffs Harbour Airport was not disseminated (noting this information is commercial-in-confidence). Palisade’s submissions during the tender process was shared on a strictly private and confidential basis and the non-indicative binding bid submission document contained an explicit confidentiality requirement for Council. A copy of the confidentiality agreement is exhibited at Tab 1 of DP-1.

…If Palisade had been made aware that confidentiality would not be preserved during any stage of the process for acquiring the long term lease of the [Airport], Palisade would have reassessed its approach to participating in the process including its approach to negotiating the Transaction Documents.

43. Mr Park does not annex “non-indicative binding bid submission document” to his Affidavit and given the substance of the documents that are before the Tribunal, it is unclear what document he is referring to as discussed further below.

44. Upon receipt of a signed deed poll from a potential bidder, an “Information Memorandum” which was prepared by KPMG was issued as well as the “Non-Binding Bids Process Letter” which provided the potential bidder with the terms and conditions that applied to the process including those related to confidentiality.

45. The form of the “Non-Binding Bids Process Letter” is in evidence as Appendix A to the Evaluation Report described at paragraph 48 below.

46. Between 1 October 2019 to 29 October, potential bidders were given an opportunity to provide a non-binding bid.

47. Between 16 October 2019 to 12 November 2019, the Council exhibited an updated Airport Master Plan which has been updated from an existing 2014 Airport Master Plan (the Draft Plan) which overlapped with the period that potential bidders could provide a non-binding bid as described above. During the period of exhibition three written submissions were received.

48. By at least 28 November 2019, the non-binding bids received by Council had been evaluated and given a score by what is described as the “Evaluation Panel”. An Evaluation Report was prepared (the First Evaluation Report). The First Evaluation Report is not included in the open evidence.

49. [NOT FOR PUBLICATION]

50. [NOT FOR PUBLICATION]

51. On 28 November 2019, there were several meetings of Council as described by Mr Beswick:

1. the Council resolved to adopt the Draft Plan and Mr Beswick exhibits a copy of the agenda of Council's meeting (but not the minutes of meeting nor a copy of the Draft Plan). The agenda attached “Confidential Submissions” that the agenda describes as being confidential in accordance with s 10A(2)(e) of the Local Government Act because it allegedly “contains information that would, if disclosed prejudice the maintenance of law”. The agenda states:

The CHA Master Plan Update 2019 is the key planning document for the airport and its adoption and implementation will contribute significantly to the future success of the airport.

2. the Council also had a meeting regarding the lease of the airport which is described in the agenda as “Airport Long Term Lease”. The agenda notes that by this time the non-binding bids received by Council had been evaluated and the recommendation was that the Council progresses the lease process to binding bids and allocate necessary funds. Attached to that agenda was the Evaluation Report and term sheets which are both marked “Confidential”. The Evaluation Report is marked confidential pursuant to s10A(2)(c) and (d)(ii) of the Local Government Act. No basis is given in the agenda for the marking of “Confidential” with respect to the term sheets.

3. With respect to “Economic – Delivery Program/ Operational Plan Implication”, the agenda notes:

The cost of progressing the airport lease model through to conclusion is estimated to be in the order of $700,000. A large portion of this will need to be spent on further vendor due diligence (financial, tax, environmental and technical), lease and other agreement preparation, probity and advisory services in the binding bids stage. This will be funded from the Coffs Harbour Airport Business Unit Reserve.

Importantly, the investment in the Non-Binding Bids and Binding Bids processes need to be considered in the context of the likely returns to Council and the community from a successful binding bid and potential lease, as identified in Confidential Attachment 1 [which is the Evaluation Report]

4. In respect of the Airport long term lease, the Council resolved to:

1. Progress the Airport Lease Model to the Tender for Binding Bids Stage;

2. Consider and adopt the recommendations as detailed in the Evaluation Report;

3. Allocate $700,000 from the Coffs Harbour Airport Business Unit Reserve to fund the lease process

4. Note that a further report on the outcome of the Tender for Binding Bids Stage will be provided to Council for consideration.

5. The resolution was not unanimous with Councillors Amos and Townley against the proposal.

Binding bid process

52. The evidence with respect to the commencement of the bidding process is difficult to reconcile as explained below.

53. Prior to the opening of the binding bids, a “Binding Bids Evaluation Plan” had been developed by Council. The “Binding Bids Evaluation Plan” set out an evaluation process by providing direction and guidance to “personnel” that would be involved in the evaluation of the binding bids. The purpose of the plan being, inter alia, to ensure that the evaluation process is conducted with due probity and all personnel involved in the evaluation process understood the process and their roles.

54. [NOT FOR PUBLICATION]

55. [NOT FOR PUBLICATION]

56. On 5 December 2019, by way of letter from KPMG, the Council exclusively invited Palisade to submit a binding offer to lease the Airport. This is referred to as the “Binding Bid Process Letter”.

57. [NOT FOR PUBLICATION]

58. According to the “Binding Bid Process Letter”, the period of exclusivity was from the date of the letter until 3pm on 2 March 2020. Unlike “Non-Binding Bids Process Letter”, this letter places restrictions on the Council in Clause 6 including but not limited to not discussing or negotiating the long-term lease with another third party. However, these restrictions were limited to the period of exclusivity and designed to give effect to the promise of an exclusive period of negotiation. Otherwise, the confidentiality obligation as provided in this letter was in identical terms as the confidentiality obligation in the “Non-Binding Bids Process Letter” (but for the fact that it references the contents of the “Binding Bid Process Letter” as opposed to the “Non-Binding Bids Process Letter”). The “Public Access to Information” Clause is also identical.

59. Mr Beswick gives evidence that additional due diligence was undertaken by and further development of key transaction documents was undertaken by Council. This development was undertaken “following the resolution to go to tender [of 28 November 2019], and prior to going to Tender” being development of the following which were then provided to the bidder:

1. the Lease;

2. Implementation Agreement;

3. Development Agreement related to the Enterprise Park; and

4. Transitional Services Agreement

60. Mr Beswick also gives evidence that the “tender proposal documents” were not released by Council until 3pm 12 June 2020 being after the period originally set for the submission of a binding bid.

61. This can be contrasted with what is described in the other documentation before the Tribunal which states that:

1. According to numerous agenda’s, the tender for binding bids commenced on 12 June 2020 (See for example agenda dated 26 November 2020). This date correlates with the release of the tender proposal documents.

2. According to the agenda dated 26 November 2020, negotiations with Palisade did not commence until 15 October 2020.

3. This sits uneasily, however, with the “Binding Bid Process Letter” which is dated 5 December 2019 which, on its face initiates an exclusive negotiation period in the context of submitting a binding bid with the “binding bid process” as described in that letter including the release of transaction documents by Council to Palisades; exchanges of those documents with comments by Palisades and commercial meetings to discuss the “commercial parameters”;

4. [NOT FOR PUBLICATION]

5. [NOT FOR PUBLICATION]

62. The absence of at least the “Equity Commitment Deed” is explained by Mr Beswick as follows:

On 26 November 2020 the outcomes of the negotiations were reported to Council and Council resolved to execute the Transaction Documents, excluding the Equity Commitment Deed which was no longer required due to a final financial arrangement of the lessee.

63. According to the definition of Transaction Documents in the Airport Lease that was ultimately signed, a Financier Tripartite Deed exists but as noted above, is not before the Tribunal.

64. Mr Beswick attempts to explain the delay to the binding bid process with reference to the Covid-19 pandemic, the withdrawal of Tiger Airways services from Coffs Harbour and the voluntary administration of Virgin Australia.

65. In any case, the indicative timeframe for Stage 3 was extended by request. The submission deadline for a binding bid to be submitted was extended to 3pm on 17 July 2020.

66. Following this time, Council reviewed the binding bid received from Palisades and took advice from third parties and the Council’s Evaluation Panel.

67. A Binding Bid Evaluation Report was prepared for Council’s consideration (the Second Evaluation Report). This included a summary of Palisade’s departures from the tender documents.

68. It is not clear precisely when the Second Evaluation Report was made available to Council as it is marked “August 2020” but it must have been provided on or after 12 August 2020 given that the document attached as Annexure A is marked this date. According to the agenda dated 26 November 2020, it was “provided to Council on 27 August 2020” which was the same day as Council’s meeting resolving to negotiate with the “preferred tenderer” (as described below).

69. [NOT FOR PUBLICATION]

70. The Second Evaluation Report is not included in the open evidence.

The issue of re-zoning and Council’s potential conflict of interest is raised in the media

71. On 12 August 2020, being around the same time as the Second Evaluation Report, an article was published in the Daily Telegraph entitled “Airport re-zoning bid raises questions – One councillor asking: “just who is making this request?”. That article states:

A PROPOSAL to re-zone land in the council's Airport Enterprise Park development is raising an important question: just who is making this request?

A Coffs Harbour City Councillor is also asking why rezoning has now been put on the table while negotiations for a long-term lease of the airport and the Enterprise Park development are currently underway.

A report, which will go to the council at this week's meeting, states there is potential conflict arising as council is both the developer of the 23ha park through the Airport Development Group, as well as the approval authority.

The report therefore seeks to amend the probity plan so that council is no longer the approval authority for any requests to re-zone the area, which is currently zoned for aviation-related activities.

While the council is the owner of the land, negotiations are currently underway to handover the airport and Enterprise Park development to a third-party company under a long-term lease.

The lease has not been finalised and a report on the chosen bidder is yet to go to a council meeting.

Councillor Sally Townley has now questioned why probity around rezoning has all of a sudden become urgent.

"Legal advice dated just a few days ago advises that council may have a conflict of interest is a rezoning is proposed and council is both developer and approval authority," Cr Townley said.

"But so far there has been absolutely no public disclosure of what the Airport Development Group are considering with regard to rezoning.

"So it places councillors in an awkward position that rezoning is suddenly introduced when the negotiations for the airport lease are actively underway."

In November 2019, after numerous non-bindings bids had been received during the expression of interest process, councillors had voted to advance the lease to the binding bids stage.

At the time it was slated that the management of the airport would be officially handed over to a private company by the end of March, however this was delayed due to COVID-19.

A council report now reveals the result will go to a council meeting at the end of August.

The binding bid of Palisade

72. [NOT FOR PUBLICATION]

73. [NOT FOR PUBLICATION]

74. [NOT FOR PUBLICATION]

75. [NOT FOR PUBLICATION]

76. [NOT FOR PUBLICATION]

77. The Council was due to meet on 27 August 2020 to consider the way forward with respect to the Airport long term lease. According to the agenda for that meeting, the recommendation was to:

1. Progress the airport lease through negotiations in-line with the recommendation contained within the Binding Bids Evaluation Report; and

2. Receive a further report on the outcome of the negotiations.

78. The agenda attached the following documents all marked “Confidential”:

1. A document described as “Issues and Options” which is noted as confidential pursuant to s 10A(2)(c) of the Local Government Act

2. Binding Bids Evaluation Report;

3. The Binding Bid which is described as the Binding Bids and

4. Airport Lease Transaction Documents.

79. A few days prior to that meeting on 22 August 2020, the Daily Telegraph published an article entitled “Crunch time for Coffs Airport lease – Councillors set to make crucial decision on the proposed long-term lease of the airport” which states:

IT'S crunch time for the proposed lease of the airport and Enterprise Park development, with Coffs Harbour City Councillors to make a crucial decision on the matter on Thursday.

Councillors will vote whether to officially enter into negotiations that would ultimately see the management of the council-owned assets handed to a private company under a long-term lease.

According to the report being put before councillors, although it is not recommended, this would essentially be the last opportunity to pull out of the lease process without facing significant reputational risk.

The recommendation in the report is that councillors should vote in favour of progressing the lease to the next stage, and begin negotiations with the binding bidders.

Many details including just who these bidders are, and how long the lease will be for, remains confidential at this stage.

The report states that if councillors do vote to enter into the negotiations, a further report on the outcome will be brought back for consideration in 4-6 weeks.

However the report warns that it would be unreasonable for the council not to finalise the lease agreement after this point, not only for the council's reputation but also because of the financial risks.

The council has so far spent about $1.6 million on the lease process, including on advisory and services, market forecasts and environmental investigations.

After the negotiation stage, this is expected to rise to $2 million.

The council had first voted in favour of exploring the potential of a long-term lease with an expression of interest process back in December 2018.

80. According to Mr Beswick, on 27 August 2020 Council resolved to pursue the recommendation in the Second Evaluation Report to negotiate with the “preferred tenderer”. It is unknown whether this was carried unanimously or otherwise as a copy of the minutes of that meeting has not been included in the evidence before this Tribunal.

Concerns amongst some of the Councillors regarding transparency

81. By around September and October 2020, the evidence supports that there were concerns by some of the Councillors as to the implications of progressing the Airport lease as well as the lack of information disclosed to the public with respect to the proposal, specifically the term of the lease.

82. On 10 September 2020, Councillors Arkan, Amos and Swan sought to rescind the resolution that was made on 27 November 2020. According to the recission notice, if that motion was successful, they intended to move the following:

1. That Council

1. Bring back a report containing further information on the implication of potential financial impacts of an additional 50 years option.

2. Provide a further detailed direct comparison on the financial implications and advantages of maintaining airport management under Council control verses leasing options.

3. Seek further clarity as to our control over hours of operation, projected flight paths and anticipated arrival and departure times over the length of the lease.

83. The motion resulted in a tied vote with Councillors Arkan, Amos, Swan and Townley voting in favour and Councillors Knight, Adendorff, Cecato and Rhoades against. The Mayor used his casting vote and the recission notice was declared lost.

84. On 8 October 2020, Councillor Amos sought by way of Notice of Motion for the length of the lease to be disclosed to the public on the basis that it was no longer commercial-in-confidence information. Noting that at this time neither the length of the lease nor the identity of the potential lessee had been disclosed.

85. The Agenda for that meeting attached two documents that were, once again, marked confidential. The documents are described as

1. “Disclosure of Confidential Information - Letters” and the basis of the claim of confidentiality is purportedly s10A(2)(c) of the Local Government Act; and

2. “Length of Proposed Airport Lease Contract – Advisor’s Advice.”

86. Neither of these documents are before the Tribunal.

87. The Agenda states:

Rationale:

*The circumstances surrounding the Airport Lease negotiations have now reached a point where the length of lease proposed should no longer be classified as commercial in confidence.

The proposed lease length should now be available to the public.

This disclosure will have no impact on the lease negotiations now.

Information as to the application of the commercial in confidence principle is defined in the NSW local Governments Act as follows.

d) commercial information of a confidential nature that would, if disclosed-

(i) prejudice the commercial position of the person who supplied it, or

(ii) confer a commercial advantage on a competitor of the council, or reveal a trade secret,"

Staff Comment:

Previous Council reports on Airport Management and Governance Options, and the Proposed Long Term Lease have cited section 10(2)(c) of the Local Government Act 1993 for the reason for attachments to be treated as confidential, which states:

(c) information that would, if disclosed, confer a commercial advantage on a person with whom the council is conducting (or proposes to conduct) business,

The airport lease transaction is at the sensitive stage of negotiation with a preferred bidder. Council advisors do not recommend the disclosure of partial lease information at this time. Their detailed reasons are contained in the Confidential Attachment with summary statements provided in italics below.

From a probity standpoint:

In summary, making public the proposed length of the Airport Lease Contract at this point of the Transaction runs against probity principles and accepted negotiation practice and is not recommended.

88. According to the agenda for the meeting of 12 November 2020, on 8 October 2020 it was resolved that:

That Council write to the potential lessee of the airport asking for permission to release the length of the lease and option of the airport with an expedited response. This response is to be reported by Council with a view to providing transparency and confidence in the community.

89. Mr Beswick states in his open affidavit:

Following the Motion, Council sought the response of the preferred tenderer as to whether they would object to disclosure of the length of the term of the Airport Lease

90. The “detailed reasons” upon which the Council was of the view that it required Palisades permission has not been disclosed in these proceedings.

91. The letter from Council to Palisades is dated 13 October 2020 (as disclosed in the agenda for the meeting of 12 November 2020 (the Permission Letter)). The letter was marked as a confidential attachment to the agenda of 12 November 2020 on the basis of 10A(2)(c) of the Local Government Act as is the “Advisor’s Advice”.

92. The Permission Letter stated, in part:

Although a holistic and agreed communications strategy will be required once a lease transaction is entered into by both parties, Council would appreciate your consideration and agreement to a limited disclosure of currently confidential information in line with Council's resolution.

93. The Council’s view that there was a need for a “holistic communications approach” is disclosed in the open evidence and specifically the agenda of 12 November 2020 which states:

A holistic communications strategy will need to be prepared to ensure the appropriate messaging is provided if the negotiations with the Bidder are successful and a transaction is announced to the market, including which key points to highlight to give context to the decision to enter into such transaction.

94. Palisades letter in response is not included in either the open or closed evidence. However, it is extracted in the agenda dated 12 November 2020 with the Council acknowledging in that agenda that the extract represents “the substantive part of their response” (the Permission Response Letter). As extracted, Palisade’s response stated:

Many thanks for your letter dated 13 October 2020.

Given negotiations on the transaction are still ongoing we do not consider it is appropriate to publicly disclose aspects of the potential transaction at this time. [We] fully support transparency and community engagement (including disclosure of the length of the lease and option of the airport) once negotiations have been finalised and a transaction is signed. We are hopeful this point is only several weeks away.

Accordingly, we respectfully decline the request at this stage. We hope you can appreciate our position on this matter.

We appreciate the Council’s continued engagement on the lease process. We look forward to successfully concluding our negotiations shortly and working together with Council to operate and grow the airport into the future. [Emphasis added]

95. According to the agenda dated 12 November 2020, the reasoning given by Palisades is consistent with “external advice” but as noted above, a copy of this advice is not before the Tribunal. Some reasons are given in the agenda dated 12 November 2020 which includes, inter alia, that the release of information is subject to “binding confidentiality agreements with the bidders, which moderate the type of information that can be disclosed”. To the extent these “binding confidentiality agreements” are references to the Deed Poll, the “Non-Binding Bids Process Letter” and/or the “Binding Bids Process Letter”, my findings with respect to this allegation of confidentiality are below.

96. On 12 November 2020, Councillor Rhoades moved on the motion that the following motion be put (the Motion):

Interrupt negotiations with any potential lessee until approval is given by that entity to allow Coffs Harbour City Council to provide to the Coffs Harbour community some meaningful information as to the length of lease and lease option being proposed.

97. Councillors Adendorff, Cecato and Rhoades voted for the Motion to be put and Councillors Knight, Amos, Arkan, Swan and Townley voted against and the motion lost.

98. Debate continued and later at the same meeting, another vote was taken and the motion to put the Motion was carried. In that vote, Councillors Knight, Adendorff, Cecato and Rhoades voted in favour and the Mayor used her casting vote such that the motion was carried.

99. On the Motion being put, all the Councillors voted against it except for Councillors Amos and Arkan.

The meeting of 26 November 2020 and a further attempt to stop the signing of the Transaction Documents

100. The agenda for the meeting of 26 November 2020 recommended, inter alia, that a delegation be given to the General Manager to sign the Transaction Documents and:

Note the development of a joint communication plan with the preferred tenderer

101. The agenda notes that the costs associated with the Airport Lease process, to date, were $1.9 million with the total costs projected to be $2 million.

102. Attached to that agenda was a “Lease Negotiation Report” which is, once again, marked “Confidential” on the basis of s 10A(2)(c) of the Local Government Act. This document is not before the Tribunal. Also attached were the “Transaction Documents”.

103. The “Transaction Documents” that were ultimately signed on 9 December 2020 were:

1. Implementation Deed;

2. Airport Lease which was a lease for 50 years with a 49 extension option;

3. Airport Lease Supplemental Deed;

4. Transitional Services Agreement;

5. Development Agreement; and

6. Independent Certifier Deed.

104. The Transaction Documents are in evidence except for the “Independent Certifier Deed.” The Lease is part of the open evidence and marked “I4”. The other Transaction Documents are part of the closed evidence and marked “Confidential I5”.

105. According to the evidence of Mr Arthur Chant (who is an aviation consultant and specialist who advised Palisade on their tender and subsequently accepted a position on the board of the Intervenor) the Transaction Documents were intentionally structured so that the purported “sensitive information” were in the documents other than the Lease – the Lease being the only document that would be made public. Mr Park refers to this as being “intentionally agreed”.

106. The minutes of the meeting of 26 November 2020 reflect the differing views of Councillors as to the transaction. The motion having been put resulted in a tie with Councillors Knight, Adendorff, Cecato and Rhoades voting for the motion and Councillors Amos, Arkan, Swan and Townley voting against. The Mayor used her casting vote and the resolution was passed. The amendment that was proposed by Commissioners Amos and Arkan was also lost namely that rather than executing the Transaction Documents, the Council should prepare a report to highlight alternate management arrangements for the Airport.

107. The next day, on 27 November 2020, the following article appeared in the Daily Telegraph. It was entitled “’Let’s get on with it’: Council votes to privatise airport – “This is about the future of this town, not whether you’re paying more or less parking fees,” one councillor said”:

THE management of Coffs Harbour Regional Airport will officially be placed into the hands of a private company under a long-term lease.

Coffs Harbour City Councillors last night debated for nearly an hour before coming to a tied vote on executing the controversial airport lease.

An exasperated Michael Adendorff had told his fellow councillors they were experiencing 'analysis paralysis' before urging them to move on.

"This is not about mum or dad flying to Sydney - this is about serious business," he said.

"This is about the future of this town, not whether you're paying more or less parking fees. Let's just get on with it, please."

It has been more than three years since the airport lease process first began, with a succession of decisions by councillors having led up to the ultimate vote last night.

The details of the lease - including who the lessee is - has been bound by confidentiality, which has proven contentious among some councillors and the public.

Councillors were last night split on whether to execute the lease with some arguing council was best placed to operate the public asset, while others said the airport would not prosper particularly after COVID-19 without the experience and investment from the private lessee.

The lessee, who still remains confidential at this stage, will take over both the airport and Enterprise Park development.

Cr George Cecato, who was a tenant at the airport for several years, urged councillors to vote in favour of the lease.

He revealed former long-term airport manager Dennis Martin had sent councillors an email prior to the meeting which contained four pages on why they should do so.

Mr Martin had held the position under contract with the council since 2008, before retiring last year.

He had taken over the management with a view to establish it as a stand-alone business, with revenue more than doubling during his time in the position.

Cr Cecato further revealed the interim subcontractor manager, Glenn Robinson, had also "strongly suggested" the lease, expressing concerns for the airport in the next 5-10 years due to COVID-19.

"It's time to make a decision, it's time to look at the future and take the airport to the next level - the lease will allow us to do exactly that," Cr Cecato said.

Cr Sally Townley, against the airport lease, argued that privatisation would see prices rise for the travelling public.

She also shared concerns that handing over the development of the Enterprise Park at this 'midway' point would see council suffer a loss.

"What we have at the moment is a transport hub which gives affordable air travel - and accessible air travel - to tens of thousands of people in the region.

"I don't think you'd find an example of an airport anywhere which became cheaper after privatisation.

"Prices are going to escalate because the investor's responsibility is to their shareholders, whereas council's responsibility is to ratepayers and also the travelling public to create a transport hub all people can use."

After some debate, the lease execution was put to the vote with councillors Adendorff, Keith Rhoades, Denise Knight and Cecato voting in favour, while Townley, Paul Amos, John Arkan and Tegan Swan voted against.

Mayor Cr Knight's casting vote brought it over the line.

Details including who the lessee is, and how long it will be for, will soon be made public with the lessee now working with council to develop a communications strategy.

108. Prior to the execution of the Transaction Documents, Councillors Swan, Townley and Amos called an extraordinary Council meeting on 2 December 2020 and sought to rescind the resolution of 26 November 2020 and to move on the motion that the Council not proceed with the long term lease of the Airport at that time. As with the motion of 26 November 2020, Councillors Knight, Adendorff, Cecato and Rhoades voted against the motion and in support of signing the Transaction Documents and Councillors Amos, Arkan, Swan and Townley voted for it. On the minutes of meeting, it states:

The motion on being put to the meeting in a tied vote and therefore, the motion was declared lost in accordance with the Code of Meeting Practice, Clause 11.3

The Transaction Documents are signed which include confidentiality provisions

109. On 9 December 2020, the “Transaction Documents” were signed. The Transaction Documents contained provisions relating to confidentiality.

Council meetings following the signing and Council’s media release representing the value of the Airport Lease as $500 million

110. The next day, on 10 December 2020, the Council had a further meeting according to an article dated 21 December 2020 published in the News of the Area published an article entitled “Business And Industrial Rezoning Sought For Airport Enterprise Park”. The agenda nor the minutes of that meeting have been included in evidence by either party. The description given to the matters disclosed at that meeting by way of the article include:

1. the current re-zoning of the land intended for the Enterprise Park was currently zoned as SP1 Special Activity (Air Transport Facility) under the Coffs Harbour Local Environment Plan 2013 which constrains land uses to airport operations and aviation related uses;

1. the proposal in order to facilitate the Enterprise Park was to apply to have the land re-zoned to B5 (Business development) and IN1 (General Industrial) while retaining some SP1 zoning;

2. Council resolved to:

1. Request the Minister for Planning to appoint the Northern Regional Planning Panel to be the Planning Proposal Authority for the re-zoning application (identified as the “Proponent Led Planning Proposal – Request to Amend Local Environmental Plan 2013 for the Coffs Harbour Airport Enterprise Park”).

2. Approve the lodgement of the re-zoning application.

4. the Northern Regional Planning Panel had been delegated as the Planning Proposal Authority for the rezoning application so as “to resolve Council’s conflict of interest in being both the developer of the Park and the regulatory authority”. Commissioner Cecato being quoted as disclosing that this “removal” of Council was the substance of the legal advice received by the Council. Commissioner Cecato is quoted as disclosing, inter alia:

… our legal advice has been that we remove ourselves.

5. Mr McGrath (General Manager) disclosed that the Transaction Documents account for the potential change in value of the lease attributable to a change in zoning which is why the “draft form [of planning proposal] was shared with the lessee”.

111. That article states in full:

WITH the new lessee of Coffs Harbour Airport and the length of the lease now public knowledge, Coffs Harbour City Council is seeking to rezone the nearby Airport Enterprise Park to attract industrial and high-tech businesses into the area.

Council is currently constructing the approved 98 lot subdivision at Coffs Harbour Airport.

The subdivision application was approved by the Joint Regional Planning Panel in 2017, and will deliver a 43-hectare subdivision yielding 23 hectares of leasable land.

Airport Enterprise Park is currently zoned SP1 Special Activity (Air Transport Facility) under the Coffs Harbour Local Environment Plan 2013 (LEP), and land uses are constrained to airport operations and aviation related uses.

Council is now seeking to lodge a Proponent Led Planning Proposal (PLPP) to request an amendment to the LEP for the subdivision, to rezone the site to allow for further land uses.

The PLPP seeks to create three distinct and well defined zones within the Airport Enterprise Park (AEP) including retaining areas of SP1 zoning, as well as creating a B5 (Business Development) precinct and an IN1 (General Industrial) precinct.

“The current SP1 zoning over the entire subdivision creates limitations on the types of businesses that can establish within the AEP,” a Council report on the rezoning stated.

“A successful rezoning of the AEP subdivision will have a positive impact upon the Coffs Harbour community by providing a greater range of business opportunities within the subdivision and enhance its attractiveness to new business to the region.”

The Northern Regional Planning Panel have been delegated by Council to be the Planning Proposal Authority for the rezoning of the Airport Enterprise Park to resolve Council’s conflict of interest in being both the developer of the Park and the regulatory authority, in relation to the development of the subdivision.

Cr George Cecato said at Council’s latest meeting on Thursday 10 December the rezoning was needed to ensure that Council attracts a “wider suitability of business”.

“We need to complement the SP1 zoning with additional permissible uses,” Cr Cecato said.

“Long ago we seeked and we got conditional approval by the NSW Department of Planning, Industry and Environment; there will be three distinct and well defined zones and our legal advice has been that we remove ourselves.

“Rather than us assessing the planning proposal we delegate that authority to the Minister and we suggest that they appoint the Northern Regional Planning Panel.”

Cr Sally Townley was one of several councillors to express concern over the proposed rezoning.

“If this rezoning proposal is eventually successful I would assume that land would have a much higher market value so I just wonder how we feel about that in view of the fact that we just made arrangements for the lease at a market value of the existing zoning,” Cr Townley asked Council staff at the recent meeting.

Coffs Harbour City Council general manager Steve McGrath said the potential Airport Enterprise Park rezoning formed part of the Airport lease negotiations.

“That was all part of the negotiations, and the values that were attributed were based on achieving a certain zoning outcome along the line and that’s why the proposal in a draft form was shared with the lessee,” Mr McGrath said.

“It has been factored into.”

Mr McGrath said the vision was for high-tech businesses to take up space within the Airport Enterprise Park.

“They’re the sort of businesses that we want to attract to assist the City in its growth,” he confirmed.

“Employment generation activities is the primary purpose of the Airport Enterprise Park zone.”

Cr Paul Amos and Cr Michael Adendorff questioned what businesses were permissible in a B5 Business Development zone.

“I’m thinking that the composition of this Enterprise Park needs more scrutiny because it sounds like we can have a car yard sitting at an entry to our City,” Cr Amos said.

“What we see here now is an Enterprise Park, just with those very words people are not thinking car yards.

“I think this needs more thought.”

Council staff stated that under the Coffs Harbour Airport lease arrangement Council has retained responsibility to develop the Airport Enterprise Park.

“It (Council) is the one who has received the grant funds from both the Federal and State Government and it is responsible for filling those grant deeds,” Council staff stated.

“When the Airport Enterprise Park has been developed it will then be the lessees responsibility.”

General manager Steve McGrath confirmed that development applications for businesses within the Airport Enterprise Park will still need to be lodged with Council for approval.

“The only role that the NRPP is being asked to take on in this particular issue is to handle the gateway proposal, the rezoning, once that’s achieved it’s like any other land in Coffs Harbour,” Mr McGrath said.

“Development applications need to be lodged with Coffs Harbour City Council and processed, so Council does have a say through that process ultimately.”

Councillors resolved to request the Minister for Planning to appoint the Northern Regional Planning Panel to be the Planning Proposal Authority for the Proponent Led Planning Proposal-Request to Amend Local Environmental Plan 2013 for the Coffs Harbour Airport Enterprise Park, and [to approve] the lodgement [of] the Proponent Led Planning Proposal-Request to Amend Local Environmental Plan 2013 for the Coffs Harbour Enterprise Park.

The B5 Business Development zone is for business, warehouse and specialised retail premises uses that require a large floor area such as warehouses or distribution centres, specialised retail premises, hardware and building supplies, landscaping material supplies and garden centres.

The IN1 General Industrial zone caters for businesses like those in the South Coffs Industrial area including agricultural produce, depots, funeral homes, garden centres, general industries, kiosks, landscaping material supplies, light industries, fuel depots, neighbourhood shops, places of public worship, takeaway food, timber yards, vehicle sales etc.

112. On or around 16 December 2020, the Council released a media release. Mr Beswick gives evidence of the media release and describes it as recording the Council’s representation that the Airport Lease was valued at $500 million. Mr Beswick provided a link to that media release but the link is not effective. The Second Applicant has, however relied upon that media release as part of its evidence which is dated 16 December 2020 and is entitled “Coffs Council secures Landmark Airport Lease Deal worth almost $500 million”. That media release states:

Coffs Harbour City Council has secured Palisade Investment Partners as its commercial operating partner for the long-term lease of Coffs Harbour Airport, with the value to the community forecast at almost $500 million over the term of the lease and option.

Palisade Investment Partners, one of Australia’s leading regional airport investors has entered into a 50-year lease, with an additional 49-year option, of the Coffs Harbour City Council owned airport.

The agreement includes $81.5 million in fixed payments over an initial period including for the development of the Airport Enterprise Park, a 23-hectare greenfield employment precinct adjacent to the airport.

Council will also receive a share of revenue earned from both the Airport and Enterprise Park, forecast to be in excess of $400 million over the term of the lease and option. Palisade will be able to take up the 49-year lease extension option subject to a range of legal and commercial requirements being met.

Coffs Harbour City Council General Manager Steve McGrath said he was pleased to have reached such a positive outcome for the community with such an experienced commercial airport operator.

“This deal is great news for the community as this revenue stream will allow the Council to fund strategic community projects into the future. This will also allow us to invest in improved services for current and future generations,” he said.

Coffs Harbour City Council Director of Business Services Andrew Beswick said the Palisade team would draw on the expertise and resources from its existing airport investments, which includes Sunshine Coast Airport, Darwin Airport, Alice Springs and Tennant Creek as part of their portfolio. Coffs Harbour Airport will be their fifth aviation asset.

“With the total value of the partnership to the Coffs Harbour community sitting at almost half a billion dollars, this deal demonstrates that our airport is considered a high-quality asset with substantial growth potential,” Mr Beswick said.

“We have secured a strong financial outcome that exceeds both the pre-COVID valuations provided by two independent experts when we started the Airport lease process. This is an important point for the community to know.

“In addition to a very positive financial result, the deal will also see Council’s continued involvement in the airport with the contract conditions requiring that Council will be consulted on the master planning and strategic direction of the airport,” Mr Beswick said.

Palisade Investment Director, Mike Reynolds, said they were very excited at the potential of Coffs Harbour Airport.

“The Coffs Harbour region has a great deal of potential and we’re really looking forward to becoming an active part of the community, supporting tourism growth and other local industries,” Mr Reynolds said.

“We look forward to building on the expertise of the existing Coffs Harbour Airport team to grow this critical infrastructure asset.”

KPMG Real Estate Advisory acted as the commercial and financial advisor to Coffs Harbour City Council throughout the lease process. Market engagement included market sounding, global expression of interest, a binding bid phase and subsequent exclusive negotiation period to finalise the lease with Palisade.

A further report will be brought before Council on a holding structure and governance arrangements for funds received from the lease. These arrangements will uphold the current Council resolution that no revenue will be directed towards the Cultural and Civic Space project.

Palisade Investment Partners is set to take over airport management in early 2021, subject to customary regulatory approvals. Once finalised, the lease will be registered and publicly available to view. [Emphasis added]

113. According to the media release, the $500 million appears to be a value attributed based on projections and therefore assumptions. The way this projected value has been calculated is unclear based on the materials before the Tribunal.

A question is raised regarding the value of the Airport Lease

114. In February 2021, Councillor Amos put the Councillors on notice of the following question:

Question

•The recent awarding of the long term lease over the Coffs Harbour Regional Airport was supported publicly by a forward cumulative "forecast" based on projections provided by the bidder over 99 years.

Due to significant variations in the continuity of when income is expected to be received, what is the actual net present value of the income stream, as presented to counsellors and applying the diligence of consultants KPMG for the Coffs Harbour councillor's ultimate consideration?

That is, what is value to the community expressed in today's dollars, of the proposed 99-year lease term?"

115. The response from Council as contained in an agenda for the meeting of 11 February 2021 was:

The net present value of the negotiated 50 year airport lease and 49 year option is calculated to provide a benchmark to compare to valuations and to other offers received as part of the evaluation process. The net present value is between $127.5 million and $132.3 million and is significantly higher than two independent valuations, the net asset value recorded in the Coffs Harbour Airport's balance sheet, and also higher than the binding bids received in October 2019 before the COVID-19 pandemic.

The airport lease has not been structured for Council to receive a single upfront lease premium (such as the net present value) but as a combination of an upfront payment, deferred payments and a share of revenue each year. The cumulative value of these payments are estimated to be in the order of $500 million, in nominal dollar terms, over the lease and option periods.

116. On 10 February 2021, and after the agenda for the 11 February 2021 meeting had been made available, the Daily Telegraph published an article entitled “A good deal?: Real value of airport lease revealed – A councillor has questioned the publicly touted $500m value of the airport lease – with new figures suggesting it may not be worth all it’s cracked up to be.”. That article, which is reproduce in full below, refers to Councillor Amos seeking greater transparency with respect to the Airport Lease. The article states:

One councillor's crusade for transparency on the long-term lease of Coffs Harbour Airport and the Enterprise Park development has revealed new figures, suggesting the deal may not be worth all it's cracked up to be.

After more than two years of confidential discussions, Coffs Harbour City Council announced in December that it had struck a $500m deal with investment firm Palisade Investment Partners to lease the assets over a potential 99-year period.

However Cr Paul Amos has suggested that this publicly touted figure of $500m is not an accurate representation of just how much the deal is actually worth.

Cr Amos questioned senior council staff about the real value of the lease, considering the lease is structured so that the council's income would be received at varying times over the 99 year period as opposed to an upfront payment.

In the council agenda for this week, Cr Amos received a written response to his question of just how much the real value of the lease is in today's dollars, which takes into account factors such as inflation.

The Director of Business Services Andrew Beswick replied that the real value of the lease is between $127.5m and $132.3m in today's dollars.

Cr Amos explained to The Advocate that this means the community could be looking at an income of up to $1.3m a year from the deal.

Cr Amos has repeatedly expressed his concerns on handing over the Enterprise Park - the "golden goose" - saying it would be a missed opportunity for council to develop the precinct itself and reap the revenue.

"Remember - this is not just for the airport, but also the 99 industrial lots that go with it," he said.

"I was worried about the income stream, because if you've got something going over a 100 years ... it's going to skew the value of that deal.

"I'm totally satisfied my question has been answered. The real figure in today's dollar terms is $130m for 99 years."

According to Palisade Investment Partners, the terms of the lease include an upfront payment of $25m to council, additional payments totalling $56.5m over seven years (including contributions to the development of the Airport Enterprise Park) and a share of revenue from both the airport and Enterprise Park operations.

With the lease being touted to the community as a "landmark deal" of $500m when it was executed late last year, Mr Amos declined to comment when asked whether he felt there was an issue of transparency regarding this publicly released value.

"All I'll say is the most accurate figure to assess the value as presented by the council's consultants is $130m."

Despite this, the Director of Business Services stated in his response that the real value of between $127.5m and $132.3m was higher than two independent valuations, the net asset value recorded in the Coffs Harbour

Airport's balance sheet, and also higher than the bindings bids received in October 2019 before the COVID-19 pandemic.

The lease has not yet commenced.

Transition period and the hand-over of Airport

117. By May 2021, the Airport was being transitioned to Palisades. On 2 May 2021, the Daily Telegraph published an article entitled “Lots to come: New Coffs Harbour Airport operators look to the future”. That article describes: early excavation works being underway at the Enterprise Park and an expectation that transition period would conclude in “about a month’s time”.

118. On 31 May 2021, Council ceased ‘owner-occupied operations’ of the Airport.

119. On 1 June 2021, the Daily Telegraph published the following article entitled “Coffs Harbour Airport privatised as long-term lease officially begins”:

Coffs Harbour Airport has officially been privatised, with operations now transferred to Palisade Investment Partners under a long-term lease.

The lease, which began on Tuesday June 1) after a lengthy transition period, has the potential to be in place for nearly a century with Palisade signing on for 50 years with a 49-year extension option.

It includes the development and operations of the Airport Enterprise Park, a $26m, 23-hectare commercial, industrial and logistics precinct adjacent to the airport which is under construction.

Incoming General Manager Frank Mondello has taken on the reins after leaving the ranks of the management team at Sunshine Coast Airport.

He's led a number of significant projects including the Sunshine Coast Airport Expansion Project, which brought a new internationally capable $344m runway into operation last year.

Mr Mondello joins Coffs Harbour as part of Palisade's newly established management group dubbed Agilis Airports, which has been formed to oversee the operations of both the Sunshine Coast and Coffs assets.

Coffs Airport and the Enterprise Park is also now being overseen by a board chaired by aviation industry stalwart Dennis Chant, who was formerly the CEO of Queensland Airports Limited.

Mr Mondello said the region had an "exciting" future and the assets played a crucial role in helping reach its potential.

"Over the last few months, we have been working closely with the existing Coffs Harbour Airport team and the Coffs Harbour City Council to add more destinations, airlines and frequencies and to ensure a smooth transition of airport operations," he said.

"I'm looking forward to working closely with the tourism industry, local businesses and the broader community to ensure we make the most of the opportunities for the airport to deliver benefits to the region."

Palisade Investment Partners' Investment Director Mike Reynolds said Coffs Harbour was set to benefit from a significant pipeline of investment, such as the $1.8 billion bypass project and the $194 million Coffs Harbour Hospital Campus Expansion.

"The Coffs Coast region is one of the fastest growing regional areas within NSW and the airport presents an exciting opportunity not only for the Coffs community, but also for Palisade investors," Mr Reynolds said.

246. As with the Deed Poll and the “Non-Binding Bids Process Letter”, there was no reasonable basis, based on the terms of the “Binding Bid Process Letter”, upon which Palisades (or the Intervenor who still did not exist in any case) ought to have had an expectation that information disclosed by them would be kept confidential by the Council generally but by virtue of the express terms of this letter, Palisades could not have had such an expectation in the context of a GIPA application.

247. In respect of the Intervenor’s contention that Palisade is a “Related Entity” for the purposes of the meaning of Confidential Information in the Transaction Documents (sub-paragraph (a)), reliance is placed on a company search of the Intervenor and Palisade and unit certificates for Coffs Harbour Airport Trust and the Coffs Harbour Holding Trust and the descriptions given in the Affidavit evidence of the relationship between those entities. Even accepting that the Intervenor is in the same corporate group with Palisade (albeit two or three levels removed from the Intervenor), the evidence is insufficient to satisfy me that Palisade "controls" the Intervenor for the purposes of section 50AA of the Corporations Act or otherwise pursuant to the meaning of "Control" in the Transaction Documents (see above for the definition of “Related Entity” and “Control”). Establishing that two entities are part of the same corporate group, does not establish that proposition.

248. Accordingly, for the purposes of these proceedings, I have no basis to find that where the information relates to Palisades "business, assets and affairs", that the confidentiality provisions of the Transactions Documents offers any protection to Palisade who is not a party to the Transaction Documents.

249. Lastly, with respect to the contention that the Intervenor made the information in the Transaction Documents available to Council through the process of drafting the Transaction Documents - there has been no attempt by the Intervenor or Council to identify the information in the Transaction Documents that was disclosed to the Council by the Intervenor (as opposed to the other way around) during the negotiations. There is no evidence to support that the Intervenor made available to Council “all of the terms of the Transaction Documents” by the process of drafting them. Rather, the evidence of Mr Beswick is that the Transaction Documents were prepared by Council and disclosed as part of the Tender Documents. This is reflected in the fact that the Transaction Documents are marked with the “Ashurst” logo being the Council’s lawyers in respect of the transaction. No doubt, negotiations were undertaken on behalf of the Intervenor and information was disclosed by it - but where to draw that line to make good that submission is unclear on the evidence before this Tribunal. However, I do not find that information disclosed during the negotiation is responsive to the access request in any case given that the access request is limited to what was agreed by Council.

First element: Whether the information responding to the access request is confidential

251. The Intervenor (and Council) contend that information responding to the Infrastructure Access Request and the Rezoning Information request is exclusively contained in the Development Agreement. Having reviewed the Transaction Documents, I accept this proposition.

252. [NOT FOR PUBLICATION FOR 35 DAYS]

253. [NOT FOR PUBLICATION FOR 35 DAYS]

254. [NOT FOR PUBLICATION]

255. The Intervenor’s contentions (adopted by Council) as to why the information disclosed in these parts are confidential are summarised in detail above.

256. In short, it was submitted that disclosure of these clauses would place the Intervenor at a substantial commercial disadvantage in relation to (a) other contractors; (b) with competitors and (c) with any counter-party if it ever elects to relinquish its interest in the Airport. The intervenor also contended that release of that information to the Second Applicant would be releasing it to a direct competitor of the Intervenor due BNG Group's property holdings and specifically HomeBase which is a relevant matter to consider pursuant to s 55 of the GIPA Act.

257. In respect of those submissions and having considered the clauses responsive to the access requests:

1. I do not accept that the release of the information responsive to the access requests would allow "reverse engineer[ing of] financial modelling" of the Intervenor and could prejudice the Intervenor's ability to negotiate competitive leases and to compete with other property developers. I see no basis for this claim based on the information that responds to the access requests and other than the assertion that such “reverse engineering” was possible, no attempt was made to make that claim good.

2. I accept that disclosure of certain clauses would disclose where the Intervenor has accepted a “reasonable endeavours”-standard as opposed to a “best endeavours”-standard but to the extent that this information comes to the attention of counterparties in future negotiations, I do not accept that this would cause substantial disadvantage to the Intervenor’s position.

3. with reference to the Schedule to the Intervenor’s written submissions in chief, which is relied upon to support that the provisions are "commercial-in-confidence” - no reference is made in that Schedule to the clauses responding to the Infrastructure Information Access Request. With respect to the Intervenor's written submissions in reply, they too make no specific reference to any of the clauses responding to the Infrastructure Information Access Request as being "commercial in confidence" provisions (the reference being limited to information responding to the Rezoning Information Access Request). As such, no support for this proposition has been given by the Intervenor (or Respondent) by virtue of these documents.

4. with reference to the information responding to the Rezoning Information Request:

1. [NOT FOR PUBLICATION FOR 35 DAYS]

2. [NOT FOR PUBLICATION FOR 35 DAYS]

258. With respect to the Intervenor's claim that an equitable obligation of confidentiality arises with respect to the information, I also reject this contention. An equitable obligation of confidence arises where the formalities for the formation of a contract are not present and information has the necessary quality of confidence is imparted in circumstances importing an obligation of confidence. Parry-Jones v Law Society [1968] 1 All ER 177; R Meagher, J Heydon and M Leaming, Meagher Gummow & Lehane's Equity: Doctrines & Remedies (4th ed, 2002), [41-020]; Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434, 443; Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73, 86-87. For the reasons given, I reject the contention that the information responsive to the access request has the necessary quality of confidence to enliven this equitable duty.

259. Consistent with my findings above, I do not accept that the information that responds to the access requests is objectively confidential in substance. As such, the controversy as to whether the Second Applicant or BNG Group is a competitor of the Intervenor for the purposes of s 55 of the GIPA Act need not be resolved however, I note that for that competition to exist, so much as tenants of business premises are concerned, the Enterprise Park would need to exist or at least its existence would need to be assured. Without that, there are no business premises to be leased presently or in the future. The evidence before this Tribunal is that the Enterprise Park is still being developed and the necessary rezoning has not yet been obtained. Those facts sit uneasily with the contention that the Intervenor is in direct competition with the Second Applicant.

Second and third element: Whether disclosure could “prejudice” the supply of information to the respondent in the future and the effect of disclosure on an agency’s functions

260. The second element concerns whether the disclosure of the information could reasonably be expected to prejudice the supply of information to the respondent in the future: Hurst v Wagga Wagga City Council [2011] NSWADT 307at [60], Flack v Commissioner of Police, New South Wales Police [2011] NSWADT 286 at [52]; Walker v Northern Beaches Council [2021] NSWCATAD 251 at [139] stated:

“… the Tribunal must consider whether material of the kind sought to be protected would, if released, prejudice the supply of similar material in the future as a matter of reasonable expectation (Director General, Department of Education & Training v Mullett (GD) [2002] NSWADTAP 13 at [58] ; cited in Medlyn v Cmr for Police [2020] NSWCATAD 125 at [88]-[89].”

261. The third element involves an evaluation of the effect of the effect of disclosure on the agency’s functions.

262. Given that I have not accepted that the information that responds to the access request is objectively confidential, I do not accept that the disclosure of it in response to the access request would prejudice the supply of similar material in the future and nor would it have a detrimental effect of the agency’s functions. The parties expectation, created by way of agreement between them, of non-disclosure of all provisions in the Transaction Documents except those contained in the Lease cannot lead to a different conclusion where the information that responds is not objectively confidential. To find otherwise, would allow parties to effectively contract out of the GIPA Act by including vastly expansive confidentiality provisions which would frustrate and make redundant the purposes for which that legislation was enacted namely as per s 3(1):

to maintain and advance a system of responsible and representative democratic Government that is open, accountable, fair and effective, the object of this Act is to open government information to the public …

263. Accordingly, I give little weight to this consideration.

Item 1(g) of the s 14 Table – found an action against an agency for breach of confidence or otherwise result in the disclosure of information provided to an agency in confidence

264. This consideration against disclosure applies if disclosure of the information could reasonably be expected to found an action against an agency for breach of confidence or otherwise result in the disclosure of information provided to an agency in confidence.

265. It was held in AFW v WorkCover Authority of NSW [2013] NSWADT 51, that it is ultimately a question of fact as to whether information was obtained “in confidence”. While I accept that the answer to the inquiry will depend on how the information was obtained, it will also depend on the manner the obligation of confidence arose and whether a breach of that obligation arises from its disclosure, in the circumstances. As stated in Thomson v Commissioner of Police [2021] NSWCATAD 53:

In Re B and Brisbane North Regional Health Authority [1994] QICmr 1; (1993) 1 QAR 279 it was held that the words "found an action for breach of confidence" in the Queensland Freedom of Information Act, should be taken to refer to a legal action brought in respect of an alleged obligation of confidence in which reliance was placed on one or more of the following causes of action:

* a cause of action for breach of an obligation of confidence;

* a cause of action for breach of a contractual obligation of confidence;

* a cause of action for breach of a fiduciary duty of confidence and where account is taken of the recognised defences to an action for breach of confidence.

This case was followed in Public Service Association and Professional Officers Association, Amalgamated Union of NSW v Director General, Premier's Department. That matter concerned an application under the repealed Freedom of Information Act 1989, however I am satisfied that this principle applies equally under the GIPA Act.

266. The parties in these proceedings concentrated on the apparent tension between clause 1(g) and section 113 of the GIPA Act. Section 113 restricts the possibility of an action for breach of confidence in that the Respondent is protected from any claim for breach of confidence. These provisions were considered by Senior Member McAteer in Hopson v Commissioner of Police, NSW Police Force [2017] NSWCATAD 379. At paragraph [71] he stated:

71. … the GIPA Act contemplates (by the fact that cl (1) (g) sits outside of Sch (1), that there will be circumstances whereby irrespective of the fact that the release of information could found an action for breach of confidence etc., that information will be invariably released. If it is released after a proper consideration of the application, the agency is quarantined from any legal repercussion arising by the operation of section 113.

72. Cl 1 (g) includes other words than ‘breach of confidence’, namely or otherwise result in the disclosure of information provided to the agency in confidence.

267. The Intervenor relied on Male v Kempsey Shire Council [2022] NSWCATAD 39 at [273] for the proposition that despite the tension between s 113 of the GIPA Act and item 1(g) of the table to s 14, that it is still open to the Tribunal to conclude that release of the information could reasonably be expected to found an action for breach of confidence.

268. I accept that proposition. As stated by Senior Member McAteer, s 113 is consistent with the fact that information may still be released in circumstances where it would constitute a breach of confidence because that is but one factor to consider in the weighing up exercise. In those circumstances, s 113 protects the agency from that action. Therefore, consideration is given to whether there would be a breach in the circumstances of item 1(g) without reference to s 113. To the extent that Moran v Shellharbour City Council [2022] NSWCATAD 112 held differently, I do not accept that interpretation.

269. However, I do not accept that where the obligation of confidentiality is purely contractual (as in the present circumstances), that the ambit of that duty (including contractual qualifications) is irrelevant to the inquiry pursuant to item 1(g) of the s 14 Table. Such provisions are clearly relevant in defining the obligation and whether disclosure of the information by the agency could found an action against an agency for contractual breach of confidence.

270. As noted in paragraph 237(1) the contractual obligation of confidentiality was qualified and a “permitted disclosure” of Confidential Documents included “to satisfy the requirements of any Government Agency, administrative or judicial body or tribunal”. The meaning of “Government Agency” includes the Council and a requirement of the Council is to comply with the GIPA Act. As such, disclosure of “Confidential Information” to comply with the GIPA Act was and is a permitted disclosure. Given my ultimate findings with respect to the access applications, I am of the view that the information responsive to the access requests be released consistent with the agent’s obligations pursuant to the GIPA Act. I am therefore not satisfied that disclosure in the present circumstances could found an action against an agency for breach of confidence.

271. Even if this was incorrect, as I have found that the obligation of confidence is purely contractual, the action as against the agency would be limited to a claim for breach of contract and it is unclear what damages could be said to flow from that breach given that I have found that the information the subject of that obligation to the extent it responds to the access application is not objectively confidential.

272. That leaves the question of whether in the disclosure of information provided to an agency in confidence. For the reasons at paragraphs 236 and 237, I accept that there an expectation of confidentiality was mutually set in the 'minds' of both the Council and the Intervenor with respect to the terms and conditions of the Transaction Documents (with the exception of the Lease) and as such, with respect to information responding to the access request.

273. However, given my findings that information that responds to the access requests is not objectively confidential in substance, I give this consideration little weight.

Items 4(b) and 4(d) of the s 14 Table – reveal commercial-in-confidence provisions of a government contract and/or prejudice any person’s legitimate business, commercial, professional or financial interests

274. Clause 1 of Schedule 4 of the GIPA Act defines “commercial-in-confidence provisions” to be:

"commercial-in-confidence provisions" of a contract means any provisions of the contract that disclose--

(a) the contractor's financing arrangements, or

(b) the contractor's cost structure or profit margins, or

(c) the contractor's full base case financial model, or

(d) any intellectual property in which the contractor has an interest, or

(e) any matter the disclosure of which would place the contractor at a substantial commercial disadvantage in relation to other contractors or potential contractors, whether at present or in the future.

275. The Intervenor submitted, and the Second Applicant accepted, that the Transaction Documents are “government contracts”. The Second Applicant also accepted that there would be some “commercial-in-confidence” provisions in the Transaction Documents as defined in the GIPA Act.

276. However, for the reasons given at paragraphs 251 to 259 above, I do not accept that the information responsive to the access requests is “commercial in confidence”; that its disclosure would prejudice the Intervenor’s legitimate business, commercial, professional or financial interests or place it at a substantial commercial disadvantage.

Conclusion

277. Section 5 of the GIPA Act establishes a presumption in favour of disclosure of government information unless there is an overriding public interest against disclosure. Therefore, the requested information must be released unless there is an overriding public interest against disclosure.

278. I do not accept, for the reasons above, that the considerations against disclosure outweigh or override the public interest in favour of disclosure. The Intervenor (nor the Council) have not overcome the presumption in favour of disclosure.

279. In the final analysis, having considered the evidence and the submissions, including reading the confidential material and having applied the principles in s 15 of the Act, I have concluded that on balance, the considerations against disclosure do not outweigh those in favour of disclosure. The considerations in favour of disclosure significantly outweigh the considerations against disclosure.

280. Disclosure of the information in response to the access requests by way of a redacted copy of the Development Agreement as well as those parts of this decision that discloses this information is to occur 35 days after this decision is published. This qualification is to allow the parties to take such steps as they deem appropriate including exercising any appeal rights and/or application for a stay. If this short delay was not provided, the information which is responsive to the access requests would be immediately disclosed by virtue of this decision and become immediately publicly available information. This process would frustrate each party’s ability to challenge this decision by predetermining the outcome of any appeal.

Orders

281. I make the following orders:

1. The orders numbered orders 4 and 5 made on 12 March 2024 be set aside to the extent that they pertain to the following information and/or documents (such that the following information and/or documents no longer fall within the meaning of "Confidential Material" as defined in order 2 made on 12 March 2024):

1. The names of the Transaction Documents.

2. The fact that the Implementation Agreement relates to, amongst other things, the transfer of certain assets for the operation, maintenance or development of the Airport and the grant of the lease of the "Leased Area" including the Enterprise Park.

1. The fact that the Development Agreement relates to the development of the "Leased Area" including the Enterprise Park.

2. The fact that the Transitional Services Agreement relates to the provision of services during a transitional period

3. The fact that the current zoning of the site proposed for the Enterprise Park and the need to rezone the site which is a matter of public knowledge as evidenced in the minutes and agendas of the Council and publicised in the media.

4. The Permission Letter.

5. Any other information disclosed publicly by virtue of this decision.

6. The documentary evidence relied upon by the Respondent and the Intervenor to contend that an obligation of confidentiality arises either with respect to the tender process or the executed Transaction Documents being:

1. the Confidentiality Provisions of each of the Transaction Documents including the definitions of the defined terms as used in those provisions;

2. the Deed Poll;

3. the Non-Binding Bids Process Letter; and

4. the Binding Bids Process Letter

2. The decision of the Respondent is set aside.

3. Within 5 days of the making of these orders, a copy of this decision be provided to the Respondent and Intervenor with the following paragraphs unredacted:

1. Paragraphs marked “NOT FOR PUBLICATION”; and

2. Paragraphs marked “NOT FOR PUBLICATION FOR 35 DAYS”.

4. Within 35 days of the making of these orders:

1. The information responsive to the Infrastructure Information Access Request and the Rezoning Information Request (as defined at paragraph 2 of this decision) be provided to the Second Applicant by way of a redacted copy of the Development Agreement redacted consistent with paragraphs 252 and 253 of this decision.

2. A copy of this decision be published with the following paragraphs unredacted:

1. Paragraphs marked “NOT FOR PUBLICATION FOR 35 DAYS”

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 19 September 2024