Lawrence v Port Stephens Council

[2008] NSWADT 243

CITATION:	Lawrence v Port Stephens Council [2008] NSWADT 243
DIVISION:	General Division
PARTIES:	APPLICANT Wayne James Lawrence RESPONDENT Port Stephens Council
FILE NUMBER:	073317
HEARING DATES:	On the papers
SUBMISSIONS CLOSED:	27 May 2008
DATE OF DECISION:	29 August 2008
BEFORE:	Montgomery S - Judicial Member
CATCHWORDS:	Freedom of Information Act - access to documents - Legal professional privilege - Access to documents- business affairs
LEGISLATION CITED:	Freedom of Information Act 1989
REPRESENTATION:	APPLICANT In person RESPONDENT T Wickham, agent
ORDERS:	The decision under review is affirmed.

1 In April 2007 Mr Lawrence applied to the Port Stephens Council (“the Council”) under the Freedom of Information Act 1989 (“the FOI Act”) and requested access to:

"...copy of bill of cost received as to legal bill $14,914.00 stated in Annual Report 2005-2006 - Lawrence Waterhouse v Port Stephens Council ".

2 The background to this request was legal action in the Land & Environment Court commenced by Lawrence Waterhouse Pty Ltd in respect of a dispute concerning a development consent. In early 2006, the proceedings were discontinued. The Registrar awarded $300 in costs in favour of the Council. During the proceedings, Sparke Helmore Lawyers represented the Council. Sparke Helmore retained Rapid Process Service to serve the Council's notice of motion on Lawrence Waterhouse. Both Sparke Helmore and Rapid Process Service issued invoices to the Council. Correspondence between the Council and Mr Lawrence shows that Mr Lawrence was concerned about the amount that the Council’s external solicitors had charged the Council in legal fees.

3 An officer of the Council determined Mr Lawrence’s FOI application and found that the Council held no document that fell within the scope of the request. However, the Council officer identified nine invoices (“the invoices”) for costs in the Lawrence Waterhouse v Port Stephens Council matter. Eight of the invoices related to legal services from Sparke Helmore and one of the invoices related to process serving from Rapid Process Service.

4 The Council’s officer determined that documents were exempt documents pursuant to Schedule 1 to the FOI Act and he refused to release any of the documents.

5 Mr Lawrence applied for an internal review of the determination to refuse to release any of the documents to him. On internal review, a different officer of the Council determined that the documents were considered to be subject to legal privilege and were therefore exempt documents under clause 10 of Schedule 1 to the FOI Act. She determined not to release the documents.

6 Mr Lawrence applied to this Tribunal for an external review of the determination to refuse to release any of the documents.

7 The matter came before me for planning meetings and discussion took place between the parties in an attempt to resolve the matter. Following these discussions the Council agreed to disclose the invoices but with all references to chargeable amounts and total amounts payable (“the withheld amounts”) deleted in accordance with section 25(4) of the FOI Act. The Council relied upon the business affairs exemption under clause 7(1)(c) of Schedule 1 to the FOI Act and the legal professional privilege exemption under clause 10 of Schedule 1 to the FOI Act in refusing access to the deleted matters.

8 Each of the parties has consented to this matter being determined on the basis of the material filed without the need for a Hearing.

Applicable legislation

9 Section 5 of the FOI Act relevantly provides:

“5 Objects

(1) The objects of this Act are to extend, as far as possible, the rights of the public:

(a) to obtain access to information held by the Government, and

(b) to ensure that records held by the Government concerning the personal affairs of members of the public are not incomplete, incorrect, out of date or misleading.

(2) The means by which it is intended that these objects are to be achieved are:

(a) by ensuring that information concerning the operations of the Government (including, in particular, information concerning the rules and practices followed by the Government in its dealings with members of the public) is made available to the public, and

(b) by conferring on each member of the public a legally enforceable right to be given access to documents held by the Government, subject only to such restrictions as are reasonably necessary for the proper administration of the Government, and

(c) by enabling each member of the public to apply for the amendment of such of the Government’s records concerning his or her personal affairs as are incomplete, incorrect, out of date or misleading.

(3) It is the intention of Parliament:

(a) that this Act shall be interpreted and applied so as to further the objects of this Act, and

(b) that the discretions conferred by this Act shall be exercised, as far as possible, so as to facilitate and encourage, promptly and at the lowest reasonable cost, the disclosure of information.”

10 Section 16 of the FOI Act provides that a person has a legally enforceable right to be given access to an agency's documents in accordance with the Act.

11 Section 25(1) of the FOI Act provides, in part, that an agency may refuse access to a document if it is an exempt document. Section 25(4)(a) provides, in part, that an agency shall not refuse access to a document if it is practicable to give access to a copy of the document from which the exempt matter has been deleted. Pursuant to section 61 of the FOI Act, the agency has the burden of establishing that its determination was justified.

12 Clause 7 of Schedule 1 of the FOI Act provides as follows:

7 Documents affecting business affairs

(1) A document is an exempt document:

…

(c) if it contains matter the disclosure of which:

(i) would disclose information (other than trade secrets, commercial-in-confidence provisions or information referred to in paragraph (b)) concerning the business, professional, commercial or financial affairs of any agency or any other person, and

(ii) could reasonably be expected to have an unreasonable adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency.

13 Clause 10 of Schedule 1 of the FOI Act provides as follows:

10 Documents subject to legal professional privilege

(1) A document is an exempt document if it contains matter that would be privileged from production in legal proceedings on the ground of legal professional privilege.

(2) A document is not an exempt document by virtue of this clause merely because it contains matter that appears in an agency’s policy document.

14 The Council no longer relies upon the legal professional privilege exemption under Clause 10 of Schedule 1 of the FOI Act in refusing access to each invoice. However, it asserts that the invoices are exempt pursuant to Clause 7(1)(c) of Schedule 1 of the FOI Act.

15 The Council argues that if the withheld amounts were disclosed, Mr Lawrence would be able to calculate the hourly rate that Sparke Helmore charges for certain classes of work. It is submitted that it is reasonable to expect that the consequence of disclosing the withheld amounts would enable Sparke Helmore's competitors to understand and perhaps undercut Sparke Helmore's pricing strategy

16 The Council relies on a letter dated 24 April 2008 from Mr Daryl Gray, a partner of Sparke Helmore, objecting to Council granting access to the invoices. In particular, Mr Gray stated that:

"Of particular concern to us is that the Invoices disclose details of our firm's hourly charge out rate. The information contained in the invoices is not common knowledge and is not otherwise in the public domain. This information, if disclosed to the public at large (which would be the effect of a grant of access in the present circumstances), could assist a competitor law firm to compete more effectively against our firm, and therefore diminish the commercial value of the information."

17 The Council also argues that the Rapid Process Service contains a single fee for one item of work, and that the service provided is the part of the core business of a process serving company. It is similarly submitted that it is reasonable to expect that the consequence of disclosing the single fee would enable Rapid Process Service's competitors to understand and perhaps undercut Rapid Process Service's pricing strategy.

18 Accordingly, it is submitted that the withheld amounts in the Sparke Helmore invoices and the withheld amounts in the Rapid Process Service invoice are exempt matters pursuant to the business affairs exemption and that, since the consequences of their disclosure could have material adverse effects on these service providers, it is reasonable for the Council to exercise its discretion to refuse access to the withheld amounts.

19 In support of its arguments the Council relies on the decision in Vincent Neary v State Rail Authority [1999] NSWADT 107, which has been, followed in other Tribunal decisions. It is submitted that the principle in relation to the disclosure of consultant's invoices that was established in Neary's case is that any information that would disclose information regarding the consultant's pricing strategy (and could be reasonably expected to have adverse effects on the consultant's business) is exempt on the ground of the business affairs exemption.

20 The Council further submitted that there are no strong grounds justifying the overriding of the business affairs exemption in this case. It says that the risk of adverse effects on Sparke Helmore's and Rapid Process Service's businesses are material. It further says that Mr Lawrence has been provided with the invoices clearly showing the nature and the extent of the work carried out by Sparke Helmore and Rapid Process Service and that any further information would be of little further utility to him.

Submissions By Mr Lawrence

21 Mr Lawrence submitted that the reasons the Council denied access to the invoices is no longer relevant because Sparke Helmore no longer act for the Council.

22 He further says that the items on each of the invoices do not provide any material that would be considered as privileged.

Findings

23 For a document to be exempt under clause 7(1)(c) it must contain information concerning the business, professional, commercial or financial affairs of an agency or an other person, and its release could reasonably be expected to have an unreasonable adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency.

24 In Vincent Neary v State Rail Authority the Tribunal's President considered whether the disclosure of information in Crown Solicitor's Office's invoices was exempt matter under the FOI Act. His Honour said at [40] to [41]:

40 As to the information in relation to expenditure on services provided by the Crown Solicitor’s Office, release of information as the total amounts paid does not, I consider, place at risk in any meaningful way the nature of the arrangements that might exist between the agency and that Office. The only information shown in the invoices which might, arguably, fall within the protection of the exemption is the reference (found in hand-writing on two of the invoices) showing a multiple of a number (the hours of service rendered) and an hourly rate.

41 That information does, I consider, bear on the contractual relationship between the agency and the Office. It gives an insight into what rate the Office charges for a certain class of work. That information, if known to others with whom the agency deals in relation to the provision of legal services, might give an advantage to those third parties in negotiation of rates. Consequently, applying the tests referred to, I consider that the hand-written references to the hours and hourly rates should be exempted from disclosure.

25 The decision in Neary has been followed in relation to both the fees charged by the Crown Solicitor's Office and the fees charged by other consultants: see for example Fulham v Director General, Department of Environment and Conservation [2005] NSWADT 68; Cianfrano v Director General, Department of Commerce and anor [2005] NSWADT 282; Cianfrano v Director General, New South Wales Treasury [2005] NSWADT 7; and Cianfrano v Director General, NSW Department of Commerce [2007] NSWADT 99.

26 In my view it is fair to characterise the withheld amounts as part of the consultants’ ‘business, commercial or financial affairs’. However, the question remains as to whether an adverse effect on those affairs could ‘reasonably be expected’ to arise as a result of releasing the amounts.

27 In Watt v Forests NSW [2007] NSWADT 197 I considered the meaning of the expressions ‘could reasonably be expected’ and “an unreasonable adverse effect” and summarised a number of authorities in which those expressions have been considered. I stated at paragraphs [120] – [125]:

Could reasonably be expected

120 The expression ‘could reasonably be expected’ has been considered in a number of cases. The words refer to an expectation for which real and substantial grounds exist when looked at objectively. The words call for the decision-maker to discriminate between unreasonable expectations and reasonable expectations, between what is merely possible (e.g. merely speculative/conjectural "expectations") and expectations which are reasonably based, i.e. expectations for the occurrence of which real and substantial grounds exist: Re "B" and Brisbane North Regional Health Authority (1994) 1 QAR 279 at paragraph [160].

121 The Full Federal Court in Re: Searle Australia Pty Ltd and: Public Interest Advocacy Centre and Department of Community Services and Health (1992) 108 ALR 163 considered that, in the context of the interpretation of the similar exemption in section 43 of the Freedom of Information Act 1982 (Cth) (“Cth FOI Act”), the word "unreasonably" should be given its ordinary meaning. If something could reasonably be expected it must not be purely speculative, fanciful, imaginary or contrived.

122 In Neary v State Rail Authority the Tribunal’s President considered a number of Federal Court cases which examined this issue in the context of the interpretation of the similar exemption in section 43 of the Cth FOI Act. He stated at paragraph [35] – [36]:

35 An objective view must be brought to bear on an agency's claim that release will have an adverse impact on its financial affairs. The Tribunal should approach issue from the viewpoint of a reasonable administrator. The administrator should have reasonable grounds for his or her perception. There must be more than a mere risk. While the key word used in the relevant provision - `expect' - carries a firmer connotation than words such as `anticipates', it is not necessary that the level of risk be such that it be assessed as more probable than not. Nor is it necessary for the administrator to apply a balance of probabilities calculus similar to that used to set the burden of proof in litigation. All relevant factors, including public interest considerations, should be taken into account. The extent and nature of the effect will be relevant, and often decisive. It is necessary to assess what is reasonable in the circumstances.
An unreasonable adverse effect

123 The inclusion of the expression ‘unreasonable’ as an element of this exemption requires a judgement about disclosure that takes into account all of the relevant circumstances and a balancing of legitimate interests. In Colakovski v Australian Telecommunications Corporation (1991) 100 ALR 111 the Federal Court held that the question of whether disclosure was unreasonable required consideration of what amounts to a limited public interest test.

124 In Re Chandra and Minister for Immigration and Ethnic Affairs (1984) 6 ALN N257, the AAT said:

(51) ... [I]t is not every document, the disclosure of which would involve the disclosure of information relating to the personal affairs of a person, that is exempt from disclosure under the Act. Exemption is only attracted if the disclosure would involve the unreasonable disclosure of information relating to those affairs. Whether a disclosure is "unreasonable" requires, in my view, a consideration of all the circumstances, including the nature of the information that would be disclosed, the circumstances in which the information was obtained, the likelihood of the information being information that the person concerned would not wish to have disclosed without consent, and whether the information has any current relevance.’
125 The ‘adverse effect’ must be sufficiently serious or significant to cause concern to a properly informed reasonable person ( Re Thies and Department of Aviation (1986) 9 ALD 454).

28 Applying those guiding principles to the circumstances of the present matter I am satisfied that an adverse effect on Sparke Helmore's and Rapid Process Service's businesses affairs could reasonably be expected to arise as a result of releasing the withheld amounts. It follows in my view that the withheld amounts are exempt pursuant to Clause 7(1)(c) of Schedule 1 of the FOI Act.

29 It is necessary to consider whether the withheld amounts should be released to Mr Lawrence notwithstanding the fact that they are exempt.

30 In University of New South Wales v Gerard Michael McGuirk [2006] NSWSC 1362, Nicholas J confirmed that, by virtue of section 63 of the Administrative Decisions Tribunal Act 1997 read in conjunction with section 25(1)(a) of the FOI Act, the Tribunal has discretion to order access to be given to exempt documents if it decided that to do so is the correct and preferable decision with regard to the material then before it.

31 The principles guiding the exercise of the discretion were discussed by the President of the Tribunal in Cianfrano v Director General, Premier’s Department [2007] NSWADT 216. The question to be considered is whether, bearing in mind the objects of the FOI Act expressed in section 5, there are strong grounds justifying the overriding of the exemptions found to apply. At paragraph [27] the President set out some of the factors relevant to the exercise of the discretion as follows:

- whether the exempt matter was, by other means, in the public domain,

- whether the circumstances that have made the exempt matters sensitive at the time it was refused remain current or significant,

- the nature of the Government activity under scrutiny, and the extent of public or community concern or interest in having a fuller knowledge of that activity,

- the public interest in an informal debate on issues of significance to the community,

- whether there were adverse consequences for the proper administration of government, and their extent,

- whether any adverse consequence is remote or innocuous.

32 In my opinion, release of the withheld amounts could give rise to adverse effects on Sparke Helmore's and Rapid Process Service's businesses affairs and this far out weighs any interest the public may have in knowing that information. I agree with the Council’s argument that Mr Lawrence has been provided with the invoices clearly showing the nature and the extent of the work carried out by Sparke Helmore and Rapid Process Service, and that any further information would be of little further utility to him.

33 For these reasons, I find that the decision of the Council is the correct and preferred decision and should be affirmed.

Orders

The decision under review is affirmed