Kung Fu Wushu Australia Limited and Australian Sports Commission (Freedom of information)

[2018] AATA 157

Kung Fu Wushu Australia Limited and Australian Sports Commission (Freedom of information) [2018] AATA 157 (7 February 2018)

Division:GENERAL DIVISION

File Number(s):      2017/2080

Re:Kung Fu Wushu Australia Limited

APPLICANT

AndAustralian Sports Commission

RESPONDENT

AndWushu Council Australia Limited

OTHER PARTY

DECISION

Tribunal:Deputy President Gary Humphries

Date:7 February 2018

Place:Canberra

The decision dated 22 March 2017 of the Information Commissioner is affirmed.

.....................................................................

Deputy President Gary Humphries

Catchwords

Freedom of Information – request for access to documents – whether disclosure would result in a breach of confidence – whether disclosure involves the disclosure of trade secrets – whether disclosure would destroy or diminish information with commercial value – whether disclosure would involve disclosure of information concerning an organisation’s business, commercial or financial affairs which would unreasonably affect that organisation – whether disclosure could reasonably be expected to prejudice future supply of information to the Commonwealth – decision under review affirmed.

Legislation

Freedom of Information Act 1982 ss 11, 11A, 11B, 45, 47, 47F, 47G, 54L, 55D and 61

Cases
Cockroft and Attorney-General’s Department (1985) 12 ALD 462
Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434
Department of Employment, Workplace Relations and Small Business v Staff Development and Training Company [2001] FCA 1375
Kamminga and Australian National University [1992] AATA 84
Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111
Wushu Council Australia Limited and Australian Sports Commission [2017] AICmr 26

Secondary Materials

Office of the Australian Information Commissioner, Guidelines issued by the Australian Information Commissioner under s 93A of the Freedom of Information Act 1982

REASONS FOR DECISION

Deputy President Gary Humphries

7 February 2018

INTRODUCTION

1. Kung Fu Wushu Australia Limited (KWA – the Applicant in these proceedings) and Wushu Council Australia Limited (Wushu Council – the Other Party) each represent a segment of the community which participates in the martial art of kung fu (or wushu[1]) in Australia. The two bodies have enjoyed a long-standing and often acrimonious rivalry.

   [1] The Tribunal was told kung fu (Cantonese) and wushu (Mandarin) means time and effort. In this decision I prefer the term kung fu, the description better recognised in the Australian community.

2. KWA is recognised by the Australian Sports Commission (ASC) as a National Sporting Organisation (NSO) – in effect, the peak body representing kung fu in Australia. The ASC is the statutory body responsible for developing and funding sport in Australia. Certain privileges are accorded to an NSO by the ASC in the administration of sport in Australia. KWA succeeded another body – the Australian Kung Fu (Wu Shu) Federation (the Federation) – as the NSO for kung fu.

3. In January 2015 Wushu Council applied to the ASC for access to certain documents under the Freedom of Information Act 1982 (the Act). The documents included correspondence between KWA and the ASC, and KWA’s applications to the ASC for recognition as an NSO. On 9 April 2015 the ASC advised Wushu Council that it had identified 55 documents within the scope of the access request. The ASC decided to provide Wushu Council with access to 12 documents in full, one document in part, and refused access to the remaining 42 documents.

4. On 17 April 2015, Wushu Council sought a review of the ASC’s decision by the Australian Information Commissioner (IC) pursuant to s 54L of the Act, seeking release in full of all documents falling within the scope of the original request. KWA opposed access, and submitted that various exemptions applied. On 22 March 2017 the IC set aside the ASC’s decision and instead determined that a total of 43 documents, which were by that time the subject matter of the review, were not exempt and should be released to Wushu Council, except to the extent that they contained personal information about third-party individuals or strategic plans for the years 2009-2012 and 2014-2018 in particular documents. To the extent that the documents so released contained that material, they were to be redacted.

5. On 12 April 2017, KWA applied to the Tribunal for merits review of the decision of the IC. It sought the reinstatement of the decision of the ASC of 9 April 2015, based on the applicability of certain exemptions under the Act (though its position with respect to those exemptions was modified during the hearing). Wushu Council is the third party to this application. It sought to uphold the whole of the IC decision of 22 March 2017. It told the Tribunal it wishes to understand the ASC’s mechanism for transferring NSO recognition from the Federation to KWA. The ASC made a submitting appearance at the hearing but made no submissions with respect to the issues before the Tribunal.

   BACKGROUND

6. The 43 documents which constitute the subject of this application for review fall into several categories. They include:

   ·email correspondence between the ASC and KWA

   ·email correspondence between the ASC and the former NSO for kung fu (the Federation)

   ·audit reports, annual reports and financial statements of KWA

   ·KWA policies and codes of practice

   ·the constitution of KWA

   ·results from international kung fu championships.

7. Unsurprisingly, the documents tend to focus on transactions in the relationship between the ASC and KWA, given the latter’s status as an NSO. The Tribunal was told that recognition as an NSO confers a range of benefits. The principal advantage is eligibility for certain grants administered by the ASC, as well as for state government funding initiatives, funding which depends for eligibility on status as an NSO.

8. Criteria are prescribed by the ASC for recognition as an NSO. They include that the relevant organisation be the pre-eminent body taking responsibility for the development in Australia of that particular sport, and that it be a not-for-profit body. Only one NSO is recognised for a given sport. There are also minimum membership requirements, presence requirements in states and territories and governance and financial auditing requirements. 

9. Some of the benefits conferred on KWA by its recognition as an NSO are set out in a Recognition Agreement with the ASC dated 12 May 2013. The agreement provides, inter alia:

   1. Recognition benefits

   The ASC will provide the following benefits to the NSO as a recognised national sporting organisation:

   a) the opportunity to use the ASC logo and/or the following words on stationery (letterhead, complimentary slips), in sponsorship and funding applications, annual reports, newsletters and magazines, and sponsors page or similar on organisation's website as outlined in the ASC Branding Guide for National Sporting Organisations [...]

   b) the opportunity to apply to use the Commonwealth Coat of Arms on playing and dress uniforms of Australian representative sports persons and by accompanying officials on their dress uniforms [...]

   c) entry in the ASC's online Australian Sports Directory as the national sporting organisation for Kung Fu (Wushu);

   d) invitations to attend workshops, seminars and other ASC forums conducted for recognised national sporting organisations;

   e) access to NSO services from the ASC's National Sport Information Centre;

   f) the opportunity to access the ASC's National Coaching Accreditation Scheme, National Officiating Accreditation Scheme and associated programs and services.

   g) the opportunity for policy development assistance and financial support through various grants programs administered through the ASC's Participation and Sustainability Management Section.

   ISSUES

10. The ASC prepared a schedule which lists the documents falling within the access request (the Schedule). The key issue is whether these 43 documents are exempt under one or more of the following provisions of the Act:

    (a)Section 45 – Disclosure which would result in a breach of confidence.

    (b)Section 47(1)(a) – Disclosure of trade secrets.

    (c)Section 47(1)(b) – Disclosure which would destroy/diminish information with commercial value.

    (d)Section 47G(1)(a) – Disclosure of information concerning an organisation’s business, commercial or financial affairs which would unreasonably affect that organisation in respect of its business, commercial or financial affairs.

    (e)Section 47G(1)(b) – Disclosure of information concerning an organisation’s business, commercial or financial affairs which could reasonably be expected to prejudice future supply of information to the Commonwealth/an agency for the purpose of administering a law or matters administered by the agency.

11. The decision of the IC exempted from access parts of certain documents on the basis that release would involve the unreasonable disclosure of personal information under s 47F. It was not disputed before the Tribunal that those exemptions should be preserved.

12. Pursuant to s 61, KWA bears the onus of establishing that the decision of the ASC refusing to give access to the documents in question is justified. In making this decision the Tribunal has had regard to the Guidelines issued by the Australian Information Commissioner under s 93A of the Freedom of Information Act 1982 (the Guidelines).

    CONSIDERATION

    Conduct of the hearing

13. Mr Walt Missingham, the President of KWA, gave live evidence. He said that the annual reports, strategic plans and financial statements of KWA which were contained within the subject documents had commercial value. He was unable to quantify that value. He said the value was that KWA’s competitors would be able to compete more successfully with KWA. He said that financial plans and historical data of KWA could be used in a takeover. The statements could be analysed and used by competitors.

14. He said that KWA was a company limited by guarantee, and that it had six members representing states and territories. KWA had reduced the flow of information to the ASC in recent years because of fears of misuse of that information.

15. KWA sought the right to call an officer of the ASC and an office holder in Wushu Council to give evidence. In relation to the former, it described this evidence as being relevant to the reasons the ASC had declined to give access to certain documents. In relation to the latter, this was described as assisting the Tribunal to understand the motives of Wushu Council in mounting its application. It submitted that Wushu Council sought access to damage or destroy KWA. KWA submitted that the motives of Wushu Council and its principals were relevant to the Tribunal’s consideration of s 47G(1)(a), in that the mala fides of an applicant could reasonably be expected to adversely affect the organisation in respect of its lawful business, commercial or financial affairs.

16. After hearing submissions on the question, the Tribunal declined to allow either witness to be called. It was not satisfied as to the relevance of the postulated testimony in either case. In particular, the Tribunal notes s 11, which provides:

    (2) Subject to this Act, a person's right of access is not affected by:

    (a) any reasons the person gives for seeking access; or

    (b) the agency's or Minister's belief as to what are his or her reasons for seeking access.

17. Section 47G(1)(a) requires a decision maker to consider the nature of information in a document and the extent to which disclosure of that information would affect an organisation’s business affairs adversely. Read together with s 11, the section does not require consideration of an applicant’s motives in seeking disclosure. In other words, the outcome of an application should be the same regardless of whether the applicant is, say, an academic undertaking research or a competitor pursuing commercial advantage.

18. Additionally, during the hearing KWA indicated that it wished to tender certain documents which should not, it said, be made available to Wushu Council, and to make submissions to the Tribunal in relation to documents in the Schedule in the absence of the representatives of Wushu Council. The Tribunal indicated its reluctance to accept evidence, oral or documentary, which was not available to all of the parties. As it transpired, KWA was able to make submissions in relation to particular Schedule documents, in the presence of representatives of Wushu Council, in which the characteristics KWA asserted that the documents bore were discussed without disclosing the relevant content of the documents. Ultimately, KWA did not seek to tender any documents to which access by Wushu Council was to be denied.

    Overview

19. The submission of KWA to the Tribunal, seeking to deny access to documents in the Schedule, might be summarised as a concern regarding competition from Wushu Council. In its written submission it contended:

    The discussions [in the Schedule documents] go to our commercial strategies, noting that while we exist to promote Australian Kung Fu – Wushu nationally and internationally, we need to maintain commercial viability to accomplish this. For an acknowledged competitor – and openly antagonistic – organisation (in this case [Wushu Council]) to have access to our thinking allows them the benefits of our work, at little cost to themselves. It may also allow them the opportunity to counter some of our strategies. Both likelihoods place KWA at a commercial disadvantage, and we argue, unreasonably, given the safeguards for business within the FoI Act.

20. Putting aside the question of whether such concerns are countenanced in the exemption provisions within the Act, it must be observed that many of the documents in the Schedule simply do not appear to give rise to considerations of competition – reasonable or otherwise – between KWA and Wushu Council. Document 32, for example, is an email to which are attached dozens of pages of results from national and international kung fu championships. The covering email makes a passing but oblique reference to (presumably) Wushu Council. Though the document’s disclosure might conceivably be the basis for some embarrassment to KWA, the document itself discloses no basis for exemption from access under the Act.[2] Other claims made for exemption were simply misconceived. KWA sought the redaction of part of the minutes of its 2013 Annual General Meeting, for example, on the basis that if our thinking is known before it is put into place we’d be seen by potential members, and perhaps by members, as being possibly less organised than we’d like to be. Such criteria are not within the ambit of the Act.

    [2] It did not appear, ultimately, that KWA pressed the argument for Document 32 to be withheld.

21. Apart from general concerns regarding the erosion of its commercial position, KWA made submissions regarding specific provisions of the Act which it said protected the documents from disclosure. The submissions are dealt with below.

    Section 45 – breach of confidence

22. Section 45(1) provides:

    (1) A document is an exempt document if its disclosure under this Act would found an action, by a person (other than an agency or the Commonwealth), for breach of confidence.

23. KWA pointed to several documents which were emails labelled Commercial-in-Confidence. It maintained that the ASC clearly expected that the information supplied should be treated as confidential. On this basis it argued that documents so labelled met the requirements of s 45.

24. Wushu Council argued that the section only applies where disclosure would be actionable. It cited Kamminga and Australian National University [1992] AATA 84, where the Tribunal said at [22]:

    Prior to the amendment of the Act, s 45 was not limited in its application to situations where disclosure would be actionable at general law: Corrs Pavey Whiting and Byrne v Collector of Customs (Vic) and Anor [1987] FCA 266; (1987) 14 FCR 434. The words “found an action” in the amended section establish that that is no longer the case. The effect of the new s 45 is accurately stated in the Explanatory Memorandum to the amending legislation:

    “Clause 32 implements a Senate Committee recommendation that the breach of confidence exemption in the Act be amended to make clear that it provides exemption where, and only where, the person who provided the confidential information would be able to prevent disclosure under the general law relating to breach of confidence. The amendment overcomes decisions by the Administrative Appeals Tribunal which have created uncertainty as to the scope of section 45 and which have expanded the exemption to protect some confidences that the general law does not protect, such as information about a crime or fraud.”

25. Wushu Council further submitted:

    For a breach of confidence action to lie at general law, there would need to be either a contractual obligation of confidence (of which there is none here), or a claim in equity for breach of confidence. The leading statement of the elements of a breach of confidence action in equity is the judgment of Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434. At 443, his honour said:

    … It is now settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question, and must also be able to show that (ii) the information has the necessary quality of confidentiality (and is not, for example, common or public knowledge), (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence, and (iv) there is actual or threatened misuse of that information…

    …

    These requirements are not met here. [KWA] has not identified with specificity the information said to be confidential, and has failed to show that the information has the quality of confidence. [KWA] refers to the fact that documents 15, 31, 34, and 37 are labelled ‘commercial-in-confidence’; but that does not imbue those documents with the necessary quality of confidentiality.

    Nor has [KWA] demonstrated that the information was given in such circumstances as to import an obligation of confidence. That is particularly so given that all organisations which apply to be NSOs are required to give a declaration which includes the following statement:

    We further understand that the ASC is subject to Freedom of Information legislation and may be obliged to disclose our information to other people.

26. These contentions must be upheld. The use of the Commercial-in-Confidence label does not, by itself, confer on a document the character of one that must be treated confidentially. KWA was invited in the hearing to nominate a person or body which might have the right to bring an action for breach of confidentiality should the documents so labelled here be released; it was unable to do so.

27. The Tribunal considers that no exemption under s 45 is established.

    Section 47(1)(a) – trade secrets

28. Section 47(1)(a) provides:

    (1) A document is an exempt document if its disclosure under this Act would disclose:

    (a) trade secrets...

29. KWA identified a Martial Arts App it had developed, either in its own right or as part of the Martial Arts Industry Association, as a trade secret. The App, which is now operational, allows members of the public to identify accredited martial arts courses and instructors to approach. However, during the hearing KWA conceded that intellectual property in the Martial Arts App belonged to the industry association, not itself alone, and that Schedule documents did not contain technical information about the App (such as programming code). As the hearing progressed KWA appeared to abandon its claim that any documents containing reference to the App should be exempted on that basis alone.

1. KWA claimed that information relating to future directions of the App should be considered a trade secret. It submitted that information in other documents should be treated as trade secrets in that the information is not widely known, and has commercial value. In particular, it pointed to the commercial workings of Kung Fu organisations which have distinct accreditation requirements and commercial relationships. It further contended that trade secrets should be defined to include secrets which a business uses in its trading.

2. The term trade secret is not defined in the Act. The Guidelines explain:

   To be a trade secret, information must be capable of being put to advantageous use by someone involved in an identifiable trade.

3. Wushu Council made the following submission with respect to whether the commercial workings of kung fu organisations could be regarded as trade secrets:

   The meaning of trade secrets in the predecessor to s 47(1) was discussed by the Full Court of the Federal Court of Australia in Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111. That earlier section was in relevantly the same terms as s 47(1). The Full Court cited the following passage of Staughton LJ in Lansing Linde Ltd v Kerr (1990) 21 IPR 529 at 536:

   It appears to me that the problem is one of definition: what are trade secrets, and how do they differ (if at all) from confidential information? Mr Poulton suggested that a trade secret is information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. I would add, first, that it must be information used in a trade or business, and, secondly, that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.

   The Full Court drew a distinction between trade secrets and information which was merely confidential. The Court said (at FCR 122):

   An aspect of the concept of “trade secrets” which was not discussed by the Tribunal is that the secrets must be used in or useable in the trade. A trade secret is an asset of the trade. Past history and even current information, such as mere financial particulars, may be confidential. The law may protect the disclosure of such information by a person who has obtained it in the course of a relationship which requires confidentiality, such as that of employee, solicitor or accountant.  But such information may not be a trade secret.

   Hence, a trade secret is not merely something that is confidential to a business; it must also be an asset of, and usable in, a particular trade. (Footnote omitted.)

4. Again, the Tribunal considers that these submissions carry some weight. In the first place, is not clear what trade KWA purports to engage in, such that it holds trade secrets in relation thereto. In its submissions, it described its trade or business as the teaching of Chinese Martial Arts. However, the objects clause of its constitution (contained in Document 31) makes no reference to the teaching of martial arts. Its asserted function as the peak body for the promotion of kung fu in Australia implies that it serves as an umbrella body for others to engage in the role of teaching. Wushu Council submitted that KWA was in fact in the trade of accreditation.

5. Even if KWA could be regarded as being in the trade of teaching Chinese martial arts, it is not clear how information in the documents in question is capable of being put to use by someone else involved in that trade. The Tribunal could not identify, and its attention was not drawn to, any document which might constitute a trade secret relating to the teaching of martial arts. In addition, KWA failed to demonstrate that information in the documents is specifically secret, as opposed to being merely confidential: per the Full Federal Court in Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111at 122. The Tribunal accepts the contention of Wushu Council that information which relates to the commercial workings of Kung Fu organisations is not an asset of, or useable in, an identifiable trade, certainly not the trade of teaching martial arts. Equally, relationships between and with other (subsidiary) Kung Fu organisations are not assets of such a trade.

6. The Tribunal is not satisfied that the exemption under s 47(1)(a) is available to KWA.

   Section 47(1)(b) – information of commercial value

7. The second limb of s 47(1) provides:

   (1) A document is an exempt document if its disclosure under this Act would disclose…

   (b) any other information having a commercial value that would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed.

8. KWA contended that s 47(1)(b) afforded exemption from disclosure for information which relates to the commercial workings of Kung Fu organisations, accreditation requirements, and commercial relationships, for financial statements and for the minutes of its annual general meetings from 2009 to 2014. As already indicated, it initially argued that information related to its martial arts app was also protected under this paragraph, but vacated that position as the hearing progressed. Similarly, Wushu Council made a submission that it should be given access to KWA’s strategic plans – plans which the IC considered to be exempt – but later told the Tribunal it now accepted the decision of the IC in relation to those plans. Given the apparent convergence of the parties with respect to those documents, the Tribunal will not disturb the decision of the IC in those respects.

9. In Wushu Council Australia Limited and Australian Sports Commission [2017] AICmr 26, the IC made the following comments and findings with respect to s 47(1)(b) (at [25]-[29]):

   For a document to be exempt under s 47(1)(b), it would need to be shown that the document contains commercially valuable information, and that value would be destroyed or diminished by disclosure.

   It is a question of fact whether information has commercial value, and whether disclosure would destroy or diminish that value. The commercial value may relate, for example, to the profitability or viability of a continuing business operation or commercial activity in which an agency or person is involved. The information need not necessarily have ‘exchange value’, in the sense that it can be sold as a trade secret or intellectual property.

   The Guidelines explain that indicators of commercially valuable information are:

   ·whether the information is known only to the agency or person for whom it has value or, if it is known to others, to what extent that detracts from its intrinsic commercial value

   ·whether the information confers a competitive advantage on the agency or person to whom it relates — for example, if it lowers the cost of production or allows access to markets not available to competitors

   ·whether a genuine ‘arm’s-length’ buyer would be prepared to pay to obtain that information

   ·whether the information is still current or out of date (out of date information may no longer have any value)

   ·whether disclosing the information would reduce the value of a business operation or commercial activity — reflected, perhaps, in a lower share price.

   …

   [KWA] submits:

   The information concerned is known to members of KWA, and shared with the ASC only. It is not known to our competitors.

   The information…would help our competitors, as it would help them target their resources more efficiently, and in some cases, if they could duplicate our otherwise acquire the information, would provide them with funding at the cost of KWA funding and opportunities – For example, members of KWA, and members of those members have access to our insurance arrangements, to technology such as the martial Arts App, and to our accreditation schemes. These are essential to our business model, and our commercial success. Further, our competitors would be likely to use any information they acquire of our operations to “spoil” our attempts to make alliances with other industry members.

   …

   The information concerned is still valuable – the Martial Arts App for example is still being rolled out and advertised. Past strategies are still valuable, as they at least indicate the trends of our thinking, but in general, because strategic planning is continually evolving and 2010 plans are still valid today

   The relevant documents and attachments were produced between 2009 and 2014 and therefore much of the information they contain is now historical. The Financial Statements from 2009 to 2012, for example, are merely a record of [KWA’s] financial situation at that time. [KWA] submits that the information the relevant documents and attachments contain is known only to it, ASC and its member organisations. However, it is apparent from the documents and submissions that [KWA] has a national network of member organisations.

   With the exception of [KWA’s] strategic plans, it is my view that the passage of time and the distribution of the relevant information to a national network of member organisations would have destroyed any commercial value the relevant documents and attachments may have had. I am satisfied that if the relevant documents and attachments ever had a commercial value, they do not retain that commercial value today. (Footnotes omitted.)

10. In Department of Employment, Workplace Relations and Small Business v Staff Development and Training Company [2001] FCA 1375 the Full Federal Court considered the meaning of (then) s 43(1)(b) of the Act, the predecessor provision to s 47(1)(b). The court at [28] observed that the information over which the exemption was sought must not merely have value to the creator of the information:

    That value must also be able to be described as commercial in character

11. The commercial character of the documents KWA purports are protected by s 47(1)(b) is not easily identifiable on a casual examination. The documents deal with operational matters relating to financial management and planning of a kind that one imagines any national not-for-profit organisation would concern itself with. The commercial value of this information to others is not readily apparent, nor was it demonstrated in KWA’s submissions.

12. Some of the documents dealt with KWA’s procedures for accrediting kung fu instructors. Wushu Council submitted that, as the NSO for kung fu in Australia, KWA has the exclusive right to accredit kung fu instructors under the national scheme. Information about the accreditation procedures would therefore have little or no commercial value in the hands of other organisations. A rival organisation could, conceivably, use information about KWA’s accreditation procedures to improve its own chances of supplanting KWA as the kung fu NSO, but that process does not diminish or destroy the information. It is also difficult to see how details of accreditation procedures would qualify as information known only to the agency or person for whom it has value (per the Guidelines). Presumably details of the accreditation procedures are provided to any individual or body who seeks accreditation with or through KWA.

13. KWA submitted that a competing organisation (including Wushu Council) could use this information to their advantage and our disadvantage. Specifically, it says that the information could be used to allow Wushu Council to make a future application to supplant KWA as the NSO for kung fu. It does not seem to the Tribunal that either s 47(1)(b) – or any other provision of the Act – operates with the intention of restricting competition per se. Competition between entities in both the commercial sector and the not-for-profit sector must be regarded as healthy and desirable, and a regime of open access to information must be seen as dovetailing with such an outcome. Arguments that exemptions in the Act must be interpreted as protecting holders of information from competition per se are misconceived.

14. In the Tribunal’s opinion, s 61 requires KWA to indicate the commercial value intrinsic to its relationship with its constituent bodies, if it wishes to avail itself of the exemption. Generally speaking, it has failed to do so in these proceedings. As Wushu Council points out:

    [KWA’s] recognition as an NSO also belies its contention that there is commercial value in this information, let alone that it would be diminished or destroyed on disclosure. Its raison d’être as a non-profit NSO is to advance the sport by, among other things, developing lines of communication with persons engaged in the sport. The idea that this information has commercial value which must be kept from public access is at odds with the recognition status which it sought and obtained.

15. Similarly, the commercial value in financial statements dating back to 2009 has not been demonstrated. KWA argued that some of this information is still relevant today, and discloses the patterns in our thinking and financial priorities. Wushu Council submitted:

    … the Information Commissioner was correct in finding that [KWA’s] financial statements for the years 2009 to 2012 were not of commercial value. That conclusion was based on the fact that the statements are historical, showing a snapshot of [KWA’s] financial position from between approximately 6 to 9 years ago. That information was also known by [KWA’s] national network of member organisations. It is doubtful this information ever had any commercial value, but if it did, it is long gone. In its written submissions, [KWA] volunteers the information that some of the income and expenditure patterns are still relevant. However, Wushu Council does not know to what degree and in what manner the financial statements may be still relevant some 6 to 9 years after the fact. To the extent that [KWA] volunteers further information about how the historical financial records are still relevant, it will have voluntarily disclosed as much; and if that occurs, [KWA] cannot thereby bootstrap itself into an argument that Wushu Council can now draw further information from the historical financial statements.

16. This argument carries some weight. It is worth observing that KWA’s financial statements disclose a very small financial operation; on perusal, nothing in the statements appears to have any commercial sensitivity, much less commercial value. Similarly, meeting minutes from 2009 to 2014 indicate nothing of commercial value, much less a value which would be destroyed or diminished if disclosed.

17. The Tribunal considers that KWA has not satisfied its onus of showing that s 47(1)(b) applies.

    Section 47G(1)(a) – Business affairs unreasonably affected

18. Section 47G(1)(a) provides, relevantly:

    (1) A document is conditionally exempt if its disclosure under this Act would disclose information concerning a person in respect of his or her business or professional affairs or concerning the business, commercial or financial affairs of an organisation or undertaking, in a case in which the disclosure of the information:

    (a) would, or could reasonably be expected to, unreasonably affect that person adversely in respect of his or her lawful business or professional affairs or that organisation or undertaking in respect of its lawful business, commercial or financial affairs…

19. In relation to this provision, KWA contended that a number of documents concern its business, commercial or financial affairs, matters that could be unreasonably affected by disclosure. It claimed that this is because the documents disclose our past, present and future strategies, intentions, constraints and opportunities, and that Wushu Council could reasonably be expected to use this information to KWA’s detriment.

20. Against these contentions Wushu Council submitted:

    First, the exemption does not apply to internal governance documents. The term “business affairs” in s 47G(1)(a) has been interpreted to mean the totality of the money-making affairs of an organisation or undertaking, in contradistinction [to] its private or internal affairs. [KWA’s] contention that the phrase “business, commercial or financial affairs” should be read disjunctively, and to include governance documents, does not accord with authority. In Re Cockroft and Attorney-General’s Department (1985) 12 ALD 462 at 464-465, this Tribunal said:

    “The section refers to “business, commercial or financial affairs.” Counsel for the applicant sought to read this phrase disjunctively… Having regard to the phraseology finally adopted in the Act, we do not consider this a valid approach. Notwithstanding the use of the word “or” it appears to us that the three words are intended to widen rather than narrow the operation of the section. Indeed the end result might be wider than the sum of all three words. They may be considered as a statutory hendiadys. The phrase itself is a comprehensive phrase intended to embody the totality of the money-making affairs of an organisation or an undertaking as distinct from its private or internal affairs.” (Emphasis added)

    …

    Secondly, the prospect that disclosure of the information falling within the access request will affect [KWA’s] business, commercial or financial affairs adversely is inherently implausible. [KWA] provides no coherent explanation of how the totality of their money-making affairs would be impacted by disclosing old meeting minutes and financial statements.

    Thirdly, even if [KWA] might somehow be affected adversely in its business, commercial or financial affairs, on no view could it be said that it would be unreasonably affected. The release of financial statements of between 6 to 9 years ago, and meeting minutes from 4 to 9 years ago, is likely to have no effect at all. There is no evidentiary basis to conclude otherwise.

    Fourthly, the public interest in disclosure means that any adverse impact on [KWA] is less unreasonable. In Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111 at 125, the Full Court of the Federal Court of Australia said that the public interest in disclosure could be factor relevant to whether a person would be unreasonably affected by the disclosure:

    “If it be in the public interest that certain information be disclosed, that would be a factor to be taken into account in deciding whether a person would be unreasonably affected by the disclosure; the effect, though great, may be reasonable under the circumstances.”

21. In his decision, the IC made the following observations (at [37]-[38] and [42]):

    The term ‘business affairs’ has been interpreted to mean ‘the totality of the money-making affairs of an organisation or undertaking as distinct from its private or internal affairs’.

    Accordingly, in this IC review for the s 47G(1)(a) conditional exemption to apply, the documents must concern [KWA’s] money-making affairs as distinct from its internal governance affairs.

    …

    It is clear from [KWA’s] submissions that ‘many’ of the documents refer to its governance and may therefore not be caught by the first limb of s 47G(1).

22. The IC found that the documents in this category were not exempt, on the basis that the ASC had not established that its decision was justified, pursuant to s 55D.

23. Once again, KWA asserted that it was entitled to the non-disclosure of its documents on the basis of competition from bodies such as Wushu Council. It argued:

    Our money making affairs are linked to our recognition as the NSO for Kung Fu – Wushu. They are however, primarily dependent on our ability to recruit and retain members. There is at least one competitor organisation which purports to be a national organisation [Wushu Council]. There are some other organisations which also seek to recruit members within the Chinese martial arts community.

24. This contention, repeated in one form or another throughout KWA’s submissions, would seem to belie the statement that KWA is in the business of teaching Chinese martial arts. The contention is more consistent with KWA being in the business – if that term can properly be used in this context – of providing leadership and coordination within the martial arts community in Australia. For that business to succeed, it depends on membership, and to the extent that it might lose membership to rival organisations such as Wushu Council, it might be said that its business model is threatened.

1. However, the competition from which KWA evidently seeks protection is not the kind of competition dealt with in s 47G(1)(a). That section deals with disclosure which might adversely affect the business affairs – that is, the entrepreneurial or money-making activities – of an organisation. In the case of KWA, its money-making activities are not, it seems, particularly at risk by virtue of disclosure of its internal governance arrangements. Seemingly at risk is its capacity to retain the loyalty of constituent martial arts organisations if other bodies are able to emulate or better the leadership paradigm used by KWA. Its concern at the threat to that paradigm is understandable, but it does not seem to the Tribunal that s 47G(1)(a) is designed to afford protection against competition of that kind.

2. Even if disclosure could be said to adversely affect the lawful business …affairs of KWA, construed to be its activities in pursuit of leadership of the sector, it cannot be said that the adverse effect is unreasonable. As a peak national sporting organisation with a preferred status conferred by the ASC, there is a legitimate public interest in the way in which KWA operates. It does not seem consistent with that status that it should, for example, keep secret its financial statements, particularly when it must be assumed that its bottom line has been improved by virtue of that conferred status.

3. KWA claimed exemptions for parts of certain documents (annual general meeting minutes, for example) on the basis that they discussed elements of the strategic plans to which access had been refused by the IC. Because the release of the strategic plans was not in issue between the parties, the Tribunal did not examine those plans in any detail, but it is not satisfied that the elements of the plans selectively quoted elsewhere attract protection under s 47G(1)(a). For example, one reference is to a scheme to establish websites; the details provided are so unexceptional, so lacking in strategic insight, that it is impossible to envisage any adverse impact from its release. Another example deals with a governance reform considered in February 2013 but not, apparently, actioned since then. The fact the proposal is five years old robs it of any potentially adverse impact arising from disclosure.

4. An exemption was sought over part of the written report presented by Mr Missingham to the KWA annual general meeting of 6 December 2014. The part in question related to an initiative Mr Missingham was announcing. The Tribunal was told that the initiative was announced at the meeting but has only been partially implemented since then. Given the document’s age, and the fact of its disclosure to a network of members, it is unlikely its release will adversely affect KWA.

5. One document (dated August 2014), and two parts of another document (dated November 2013), deal with KWA’s relations with both existing members and potential new members. The Tribunal was told that the issues discussed in these documents were still playing out. Had the documents been of more recent origin, the Tribunal might have considered them to be conditionally exempt on the basis that their disclosure may have adversely affected KWA’s (business) relationship with those bodies. It seems clear, however, that the information in the documents has been degraded by the passage of time. KWA has not satisfied the Tribunal that the documents should be protected.

6. No documents are conditionally exempt under s 47G(1)(a) of the Act.

   Section 47G(1)(b) – prejudice to supply of information to Commonwealth

7. The second arm of s 47G(1) provides:

   (1) A document is conditionally exempt if its disclosure under this Act would disclose information concerning a person in respect of his or her business or professional affairs or concerning the business, commercial or financial affairs of an organisation or undertaking, in a case in which the disclosure of the information…

   (b) could reasonably be expected to prejudice the future supply of information to the Commonwealth or an agency for the purpose of the administration of a law of the Commonwealth or of a Territory or the administration of matters administered by an agency.

8. KWA contended that, following Wushu Council’s application for access to documents under the Act, it made a decision to reduce the amount of information shared with the ASC, because of the risk that organisations such as Wushu Council might have access to information we would wish them not to have. KWA conceded this is not an ideal situation, even though it met the ASC’s requirements, because the free discussion that had previously occurred with ASC had now ceased. It also anticipates that other NSOs may adopt KWA’s strategies, leading to less collaboration within the sports sector.

9. Wushu Council made the following submissions in response:

   First, the ASC itself has not raised any concern about prejudice to the supply of information to it. The ASC is the body responsible for administrating and recognising NSOs. It is in the best position to understand and articulate the problems it might face with collecting information needed to perform its statutory functions. Significant weight should be given to the fact that it has not raised such concerns in this review.

   Secondly, [KWA] itself recognises that recognition as an NSO is a competitive process. That competition is likely to mean that organisations will continue to provide ample information to the ASC in order to obtain and maintain NSO recognition. There are many NSOs which do publish their financial statements, meeting minutes, and strategic plans online.

   Thirdly, all entities seeking NSO recognition are given notice that the documents they provide to the ASC are potentially available for disclosure. Those organisations are required to give a declaration which includes the following statement:

   We further understand that the ASC is subject to Freedom of Information legislation and may be obliged to disclose our information to other people.

   (Footnote omitted.)

10. In relation to s 47G(1)(b) the IC made the following observations (at [53]-[57]):

    For a document to be conditionally exempt under s 47G(1)(b), disclosing a document that concerns an organisation in respect of its business affairs must reasonably be expected to prejudice the future supply of information to ASC, another agency or the Commonwealth.

    In reasons for decision, ASC said:

    In deciding whether disclosure of the documents would, or could reasonably be expected to, prejudice the future supply of information to ASC, I considered:

    The confidential manner in which the correspondence was engaged in;

    The ASC’s duty to maintain an open and confidential information flow between itself and the sporting organisations that it is required to advise and support;

    That I received strong objections to the release of information from the third parties consulted, which included submissions that the respective third parties considered that:

    ·The information is confidential and sensitive in nature;

    ·The third parties (and, possibly, other sporting organisations) would be reluctant to provide the ASC with information in the future

    As I discussed above… the term ‘business affairs’ has been interpreted to mean ‘the totality of the money-making affairs of an organisation or undertaking as distinct from its private or internal affairs’.

    Accordingly in this IC review, for the s 47G(1)(b) conditional exemption to apply, the documents must concern [KWA’s] money-making affairs as distinct from its internal governance affairs.

    As I have already found that ASC has not discharged its onus of establishing that the documents concern [KWA’s] business affairs, as distinct from its governance affairs, I am satisfied that ASC has not established that its decision is justified in respect of its application of s 47G(1)(b).

11. KWA disputed Wushu Council’s assertion that the ASC itself has not raised any concern about prejudice to the supply of information to it. Although it made no submissions during the hearing before the Tribunal, it did refer to such prejudice in its decision of 9 April 2015 and in its subsequent submissions to the IC. The Tribunal accepts that the ASC has, at least historically, expressed concern about the possibility that disclosure in this case may have an adverse impact on the willingness of others to supply information to it.

12. Notwithstanding the submission of KWA and the imputed position of the ASC, the Tribunal was not provided any reasons as to why client bodies of the ASC might now choose to reduce the supply of information. It was not contested during the hearing that some NSOs publish, in a variety of fora, the kind of information about their activities which KWA here seeks to suppress. The argument that KWA’s decision to reduce the information it was supplying demonstrates that Wushu Council’s application will restrict the supply of information to the Commonwealth is, with respect, circular and self-serving. In any case, s 47G(1)(b) makes it clear that the information, the future supply of which might be prejudiced by disclosure, is information for the purpose of the administration of a law of the Commonwealth …or the administration of matters administered by an agency. It is one thing to say that client organisations might reduce the amount of gratuitous information they supply in future; it is quite another to say that they will not supply that information which the law requires. Even KWA concedes that it will continue to supply that information to the ASC which is stipulated for its NSO accreditation. No argument was advanced – or would be credible – that other NSOs would cease to provide information required by the ASC for accountability purposes merely because Wushu Council’s application for access was upheld.

13. The onus on KWA to demonstrate that the conditional exemption in s 47G(1)(b) applies to its documents has not been discharged.

    The public interest test

14. The Tribunal finds that no documents the subject of these proceedings are entitled to conditional exemption under s 47G(1)(a) or (b). Had it found that any documents were conditionally exempt, it would have been required to consider whether it would be contrary to the public interest to give Wushu Council access to them at this time (s 11A(5)).

15. Although it is therefore unnecessary for the Tribunal to consider the public interest test, it comments that the evidence establishes that it would not have been contrary to the public interest to grant access.

16. The Tribunal notes these submissions from Wushu Council:

    Another factor in favour of disclosure is promoting effective oversight of public expenditure: s 11B(3)(c). NSOs are eligible for funding from the ASC, as well as a range of other benefits. The Recognition Agreement …describes some of the benefits to which [KWA] became entitled. However, the ASC only recognises one NSO for each sport. The selection of an NSO excludes other organisations from eligibility for that exclusive funding and benefits regime for that particular sport. As such, access to documents relating to the circumstances of recognition of NSOs has the quality of enhancing scrutiny of public expenditure. It enables the public and other organisations which do not have NSO status to see the circumstances in which entities are selected to be eligible for public funding.

    [KWA] claims it does not currently receive funds from the ASC. Whether or not it actually does so at the moment is not the point.  As an NSO, it is eligible to apply for funding from the ASC (as well as State government bodies) under an exclusive regime.  And, by holding NSO status, [KWA] excludes other Kung Fu Wushu sporting organisations from occupying the seat of eligibility for such funding.

    Even if the benefits conferrable on NSOs are not classified as public expenditure, there is a clear public interest in enhancing scrutiny of which bodies receive limited public goods which the government allocates to only one organisation per sport.

17. It is tolerably clear that, whether or not it receives grants from the ASC, KWA is the beneficiary of public expenditure directed towards sport (see s 11B(3)). The public interest is served by a high level of openness and disclosure regarding organisations in the privileged position of being an NSO.

    Section 47F – personal privacy exemption

18. Section 47F confers conditional exemption on a document if disclosure would involve the unreasonable disclosure of personal information about any person. In his decision of 22 March 2017 the IC determined that the relevant documents before him contained information about identified individuals which constituted personal information for the purposes of s 47F(1). He was satisfied that it would be an unreasonable disclosure of personal information to disclose material in the relevant documents that could reasonably identify individual members of KWA. He was also satisfied that giving Wushu Council   access to the documents that were conditionally exempt under s 47F at that time would, on balance, be contrary to the public interest.  He instructed the ASC to prepare an edited copy of the relevant documents by removing material that could reasonably identify certain members of KWA.

19. Wushu Council told the Tribunal it did not press for the release of any information which the process initiated by the IC deemed to be personal information. The Tribunal does not propose to disturb the redactions which were the outcome of the IC’s decision.

    CONCLUSION

20. The decision of the Information Commissioner dated 22 March 2017 is affirmed.

I certify that the preceding 73 (seventy-three) paragraphs are a true copy of the reasons for the decision herein of Deputy President Gary Humphries

......................................................................

Associate

Dated: 7 February 2018

Date(s) of hearing:	19 January 2018
Date final submissions received:	19 January 2018
Advocate for the Applicant:	Mr Neal Hardy
Solicitor for the Respondent:	Ms Sandra Coburn
Counsel for the Other Party:	Mr Brent Michael