Leech v Sydney Water Corporation

[2010] NSWADT 298

CITATION:

Leech v Sydney Water Corporation [2010] NSWADT 298

DIVISION:

General Division

PARTIES:

1st APPLICANT
Michael Leech

2nd APPLICANT
Steve Yang Constructions Pty Ltd

RESPONDENT
Sydney Water Corporation

FILE NUMBER:

103112

HEARING DATES:

6 October 2010

SUBMISSIONS CLOSED:

6 October 2010

EXTEMPORE DECISION DATE:

6 October 2010

BEFORE:

Montgomery S - Judicial Member

CATCHWORDS:

Freedom of Information Act - access to documents – business affairs

LEGISLATION CITED:

Administrative Decisions Tribunal Act 1997
Freedom of Information Act 1989

CASES CITED:

Colakovski v Australian Telecommunications Corporation (1991) 29 FCR 429
Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135
Neary v State Rail Authority [1999] NSW ADT 107
Robinson v Director General Department of Health [2002] NSWADT 222
Searle Australia Pty Ltd v PIAC (1992) 108 ALR 163

REPRESENTATION:

1st APPLICANT
J Dawson, solicitor

2nd APPLICANT
A Yang, agent

RESPONDENT
J Mattson, solicitor

ORDERS:

The matter is remitted for re-consideration by Sydney Water pursuant to section 63(3)(d) of the Administrative Decisions Tribunal Act 1997 with the recommendation that documents be released in a redacted form. The information referred to at paragraph [23] of these reasons should be removed from the documents before they are released.

REASONS FOR DECISION

1 Mr Leech applied to Sydney Water Corporation (“Sydney Water”) under the Freedom of Information Act 1989 (“the FOI Act”) for access to the following documents:

1. All documents including file notes, correspondence, letters and emails recording communications between Sydney Water on one hand or any person on its behalf and Steve Yang Constructions Co Pty Limited CAN 057 281 839 ("the company”) or any person on the company's behalf, on the other hand in respect of the period 1 January 2005 to date.
2. All documents appointing or authorising the company to hold itself out as being accredited by Sydney Water.
3. All documents recording any complaints to Sydney Water in respect of the company's performance and/or the provision of inaccurate advice in respect of the period 1 January 2000 to date.
4. All documents including file notes, reports, correspondence and the like giving directions to the company for the period 1 January 2003 to date,
5. Any file notes, reports, correspondence, emails and any other records or communications in respect of an incident on 30 June 2008 at 23 Mount Street Hunters Hill when a sewer line was ruptured.
6. Without limiting the generality of the above, the file relating to the company for the period 1 January 2003 to date.

2 One of the issues that prompted Mr Leech to make the request to Sydney Water was his concern about Sydney Water's processes for accrediting and monitoring the performance of its accredited suppliers.

3 Sydney Water considered that the disclosure of certain documents was likely to concern the business affairs of third parties, and therefore I sought the views of those parties with respect to the release of this information. Steve Yang Constructions (“SYC”) objected to the release of some of the documents that Mr Leech had sought.

4 The Sydney Water review found that most of the documents could have an unreasonable adverse effect on SYC's business affairs and were therefore exempt under clause 7(1)(c) of Schedule 1 to the FOI Act. Other documents that were found to have no impact on business affairs were released to Mr Leech.

5 Mr Leech applied to the Tribunal for review of Sydney Water’s determination. On 10 August 2010 I directed that SYC be joined as a party to the proceedings.

6 The matter came before me for hearing on 6 October 2010. Following the hearing I set aside Sydney Water’s determination and remitted the matter for reconsideration, with the recommendation that the documents sought be released with the exceptions that some material contained within some of the documents not be released. This reflected the fact that Mr Leech had conceded that that material need not be released. SYC has sought written reasons for the decision and more detailed reasons are now provided.

7 Clause 7(1)(c) of Schedule 1 to the FOI Act provides:

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.
...

8 Accordingly in considering a claim for exemption under Clause 7(1)(c) the Tribunal must be satisfied that disclosure would:

(i) reveal information concerning the business, professional, commercial or financial affairs of SYC; and
(ii) could reasonably be expected to have an unreasonable adverse effect on those affairs.

Sydney Water’s case

9 Sydney Water submits that the Tribunal should remit the matter for redetermination of its decision to the effect that the remaining documents are to be released to Mr Leech subject to the redaction of personal information of clients of SYC in accordance with clause 6 of Schedule 1 of the FOI Act.

SYC’s case

10 SYC’s solicitors provided written submissions to the Tribunal in support of SYC’s case. Harry Kwon submitted that the main issue is whether or not disclosure of the documents could have an unreasonable adverse effect on SYC’s business affairs and that a second issue is whether it is reasonable for Mr Leech to demand to release of SYC's unreleased documents in order to prepare for other proceedings.

11 In my view, the “second issue" that Mr Kwon has identified is not relevant to these proceedings and it is not addressed in these reasons.

12 Mr Kwon argued that the documents in issue may contain information about audited reports. SYC has operated as an accredited supplier for more than 10 years. Sydney Water audits its constructors every year in order to renew its accredited supplier agreement. Mr Kwon said that an audit was carried out with respect to a complaint by Mr Leech against SYC. Mr Kwon argues that the release of the audited documents could have an adverse affect on SYC’s business. He says that the audited related material contains internal documents between Sydney Water and SYC and that if these kinds of documents are disclosed, SYC’s competitors or other persons could use the information not in good faith. This could result in serious damages to SYC and SYC’s business may be in danger.

13 The second issue raised by SYC is that the documents may contain information about the price structure used by SYC. SYC has its own price structures for its services and these price structures are different to that of other suppliers. Mr Kwon argues that the release of that information to SYC’s competitors or to others could impact on SYC’s ability to compete against other Sydney Water suppliers. This could bring serious adverse damage on its business.

14 The third issue raised by SYC is that the documents may contain information about SYC’s customers. Mr Kwon argues that the release of customers’ sensitive information could result in commencement of other proceedings against SYC or Sydney Water and this could result in adverse effects on SYC.

15 In a letter to the Tribunal dated 15 September 2010 Steve Yang, SYC’s Managing Director, submitted that it is in the best interest of the company not to have the documents released to Mr Leech, for the following reasons:

1. The release of the documents and the information it contains may have a negative effect on SYC’s brand name if used incorrectly.
2. The intentions of Mr Leech in asking for the documents appear to be of a negative nature rather than to resolve the matter on hand.
3. Private and confidential information contained in the documents were between Sydney Water and SYC.

Mr Leech’s case

16 Mr Dawson, solicitor for Mr Leech, conceded that it is open to the Tribunal to draw the inference that the documents in issue have a business, commercial and/or financial character. At the hearing I accepted that the documents have that character. I was satisfied that the documents in issue contain information concerning the business affairs of SYC.

17 Mr Dawson submitted that there is still an onus on SYC to establish that there is a reasonable expectation of an unreasonable adverse effect by reason of the disclosure of the documents. He relies on a number of authorities in which these matters were considered. In Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135 Judicial Member Higgins stated:

121 Apart from the common requirement of “reasonableness”, each limb of cl. 7(1)(c)(ii) of the FOI Act is directed to a different issue. The first limb is concerned with there being “an unreasonable adverse effect” on the business, professional, commercial or financial affairs of the agency or the third party. This means that the agency must show that the effect of disclosure of the document in question will be adverse, that the adverse effect is unreasonable and that the adverse effect could reasonably be expected to occur (see Cossins, Annotated Freedom of Information Act New South Wales (1997), at 107.15).

122 On the other hand the second limb is concerned with the future supply of such information to the Government or agency. ...

123 In this case both limbs are relied on. It is noted that it is asserted that disclosure of the invoices will have an adverse effect on the business or financial affairs of the persons issuing the invoice, however there is no evidence as to the nature of that adverse effect, and that a disclosure would be unreasonable having regard to that adverse effect. In my opinion, it is not sufficient to merely make the assertion for the exemption to apply. Accordingly, having regard to the context of the invoices I am unable to find that they will have the requisite adverse effect on the respective business or financial affairs of the person issuing the invoice.

124 I also find that there is no evidence, for the purpose of the second limb of the business affairs exemption, that disclosure of the invoices would prejudice future supply of such information. In this regard, I agree with Mr Hynes’ submission that to suggest otherwise is absurd.

18 In Neary v State Rail Authority [1999] NSW ADT 107, in considering the meaning of the words "could reasonably be expected to have an unreasonable adverse effect", the Tribunal’s President said that there must be more than a "mere risk".

19 In Robinson v Director General Department of Health [2002] NSWADT 222 at [66] Deputy President Hennessy held that the decision-maker must have real and substantial grounds for the decision and not mere speculation or conjecture.

20 Mr Dawson submitted that SYC relies on nothing more than speculation and conjecture.

21 Mr Dawson further submitted that the word "unreasonable" sometimes requires that competing public interests be balanced. In this regard it has been held that the question of an "unreasonable" adverse effect often imports a public interest balancing test: Colakovski v Australian Telecommunications Corporation (1991) 29 FCR 429.

22 He submitted that there is insufficient evidence for the Tribunal to find that the documents should be exempted on the grounds relied upon by SYC. He says that there are public interest considerations which weigh in favour of the release of the documents. The application arose out of an event when a sewer main was ruptured and a huge volume of raw sewage flowed across the Applicant's land down an embankment onto his neighbours' properties and then into the Lane Cove River. It is submitted that there is a significant public interest in the release of all documents related to that event considering the health and safety implications and the potential for environmental damage. He says that there is also a public interest in disclosing to the public the system of accreditation employed by Sydney Water and the management of persons appointed by Sydney Water as accredited suppliers of services.

23 Mr Leech agreed that, with the exception of references to SYC, the information contained within the documents in issue that would identify the name of businesses or their owners or other individuals should be redacted prior to release of the documents. He also consents to the removal of any information concerning SYC’s price structure.

Discussion

24 As noted above, I accept that the documents in issue concern SYC’s business affairs. I also accept that release of the information contained in the documents concerning SYC’s pricing structure an unreasonable adverse effect on SYC’s business by providing commercially valuable information to SYC’s competitors.
25 The term ‘could reasonably be expected’ has been considered in a number of cases. The words have their ordinary meaning: Searle Australia Pty Ltd v PIAC (1992) 108 ALR 163. The test to be applied is an objective one, approached from the view point of the reasonable decision-maker: Neary v State Rail Authority. Something which could reasonably be expected is something which is more than a mere possibility, risk or a chance. It must be based on real and substantial grounds, and it must not be purely speculative, fanciful, imaginary or contrived: Searle Australia Pty Ltd v PIAC.

26 In the present matter, I am not satisfied that there is more than a mere possibility that release of the document in issue would result in an adverse effect on SYC’s business.

27 No evidence has been presented that would support such a finding. However, even if the disclosure would have an ‘adverse effect’ on SYC’s business, the exemption applies only if that ‘adverse effect’ is ‘unreasonable’. SYC relies on nothing more than speculation and conjecture to argue that that would be the case. In my view, SYC has not discharged the onus to establish that the release of the documents in a redacted form would affect its business in that way.

28 In my view, the correct and preferable decision is that proposed by Sydney Water. The appropriate decision is to remit the matter to allow the concessions to be put into effect. The decision is that :

Order

29 The matter is remitted for re-consideration by Sydney Water pursuant to section 63(3)(d) of the Administrative Decisions Tribunal Act 1997 with the recommendation that documents be released in a redacted form. The information referred to at paragraph [23] of these reasons should be removed from the documents before they are released.