OnMarket BookBuilds Pty Ltd and The Treasury (Freedom of information)
[2023] AATA 2328
•31 July 2023
OnMarket BookBuilds Pty Ltd and The Treasury (Freedom of information) [2023] AATA 2328 (31 July 2023)
Division:GENERAL DIVISION
File Number(s): 2021/9874
2022/4753
Re:OnMarket BookBuilds Pty Ltd
APPLICANT
AndThe Treasury
RESPONDENT
DECISION
Tribunal:The Hon. John Pascoe AC CVO, Deputy President
Senior Member G LazanasDate:31 July 2023
Place:Sydney
The decisions under review, namely, the decisions of the Respondent dated 19 August 2021 and 23 March 2022, respectively, are affirmed.
...............................[SGD].........................................
The Hon. John Pascoe AC CVO, Deputy President & Senior Member G Lazanas
CATCHWORDS
FREEDOM OF INFORMATION – review of decisions of the Treasury to refuse access to documents regarding Australian Business Growth Fund Pty Ltd (ABGF) – whether documents are exempt documents pursuant to s 45 of the Freedom of Information Act 1982 (Cth) (the FOI Act) - consideration of meaning of action for breach of confidence – whether documents are exempt documents pursuant to s 47(1)(b) of the FOI Act – consideration of meaning of information having a commercial value that could reasonably be expected to be destroyed or diminished if disclosed – whether documents are exempt as would be privileged from production on the ground of legal professional privilege pursuant to s 42 of the FOI Act – decisions under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 26
Freedom of Information Act 1982 (Cth) ss 3, 4, 11, 11A, 15, 26, 31B, 42, 45, 47, 54W, 57A, 58, 61, 93A
Judiciary Act 1903 (Cth) ss 55J, 55N
CASES
Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)
(1987) 14 FCR 434 at 443
Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278
DSE(Holdings) Pty Ltd v Intertan Inc
, [2003] FCA 384
Esso Australia Resources Ltd v Commissioner of Taxation
(1999) 201 CLR 49.
Kamminga and Australian National University (1992) 26 ALD 585.
OnMarket BookBuilds Pty Ltd and The Treasury [2022] AATA 3993
Smith Kline and French Laboratories (Aust) v Department of Community Services and Health
(1991) 99 ALR 679
SECONDARY MATERIALS
Office of the Australian Information Commissioner, Freedom of Information Guidelines
J D Heydon, Cross on Evidence, LexisNexis Butterworths, 9th ed (2013)
REASONS FOR DECISION
The Hon. John Pascoe AC CVO, Deputy President & Senior Member G Lazanas
31 July 2023
INTRODUCTION AND ISSUES
By way of two applications to this Tribunal, OnMarket BookBuilds Pty Ltd, the Applicant, seeks review of two decisions of the Treasury, the Respondent, to refuse access to certain documents under the Freedom of Information Act 1982 (Cth) (the FOI Act). As the proceedings were heard concurrently, these reasons address both applications.
Broadly, the documents sought by the Applicant from the Respondent relate to an entity known as Australian Business Growth Fund Pty Ltd (ABGF) which was established by several major banks together with the Commonwealth of Australia as represented by the Treasurer for the purpose of investing growth capital in Australian small and medium-sized enterprises (SMEs). The Respondent was also involved in, amongst other things, the documentation relating to the establishment of ABGF. The Applicant is interested in ABGF’s operations. The Applicant claims to be Australia’s largest equity raising platform and offers a variety of equity raising services to Australian SMEs.
There are two documents sought by the Applicant in Proceedings No. 2021/9874. First, the ABGF shareholders’ agreement between ABGF, Commonwealth of Australia, National Australia Bank Ltd (NAB), Commonwealth Bank of Australia (CBA), Westpac Banking Corporation, Australia and New Zealand Banking Group Ltd, HSBC Bank Australia Ltd and Macquarie Bank Ltd dated 16 October 2020 (the shareholders’ agreement) and, secondly, the ABGF summary of key term sheet dated 24 October 2019 (the term sheet), collectively referred to as the foundation documents. The issue before the Tribunal with respect to the foundation documents is whether the relevant parts are exempt from disclosure under s 45 and/or s 47(1)(b) of the FOI Act. Broadly, pursuant to s 45, a document is exempt if its disclosure would found an action by a person for breach of confidence. Section 47(1)(b) of the FOI Act applies to exempt a document if its disclosure would disclose information having a commercial value that would be or could reasonably be expected to be destroyed or diminished if released.
The documents sought by the Applicant in Proceedings No. 2022/4753 are five emails, together with attachments, between the Australian Government Solicitor (AGS) and King & Wood Mallesons (KWM) and the Respondent’s employees, amongst others, about the establishment of the ABGF, collectively referred to as the emails. The issue before the Tribunal with respect to the emails is whether they are exempt in their entirety from disclosure under s 42 of the FOI Act on the ground of legal professional privilege.
As these reasons will explain, the decisions under review of the Treasury refusing the Applicant access to the requested documents are affirmed.
THE DOCUMENTS IN ISSUE
The documents in issue, and the exemptions claimed by the Respondent are summarised in the table below.
Proceedings
Number
Description Date Pages Claimed exemption 2021/9874 ABGF shareholders’ agreement, including the business plan, schedules and annexures 16 Oct 2020 142 ss 45, 47(1)(b) 2021/9874 Draft ABGF term sheet 24 Oct 2019 25 ss 45, 47(1)(b) 2022/4753 Email from AGS to KWM and Treasury recipients providing comment on draft documents prepared by KWM for ABGF shareholder comment together with attachments 12 Sept 2019 28 s 42 2022/4753 Email from AGS to Treasury recipients providing advice in relation to KWM advice sent to ABGF shareholders together with attachment 30 Oct 2020 6 s 42 2022/4753 Email from AGS to Treasury recipients providing advice on KWM advice sent to ABGF shareholders together with attachment 16 Nov 2020 10 s 42 2022/4753 Email from AGS to Treasury recipients providing advice on KWM advice sent to ABGF shareholders together with attachment 17 Nov 2020 11 s 42 2022/4753 Email from AGS to Treasury recipients providing advice on KWM advice sent to ABGF shareholders 5 Dec 2020 3 s 42
The Respondent produced these documents for our inspection, and it is appropriate to record further comments about them without revealing any matters of substantive content, when we consider the relevant issues.
PROCEDURAL BACKGROUND
It is necessary to briefly set out the procedural background in relation to the two applications before considering the statutory provisions and principles relevant to the documents.
Proceedings No. 2021/9874
On 12 May 2021, the Applicant made a request to the Respondent under s 15 of the FOI Act in the following terms:
On 27 Nov 19, the Treasurer and the Minister for Business made a joint press statement: “The Morrison Government has today announced that it has agreed to terms with the four major banks, HSC and Macq. Group to establish the Australian Business Growth Fund.” I request the following under the Freedom of Information Act:
1) the November 2019, Heads of Agreement or Memo of Understanding, or other such documents that sets out the “agreed terms” referred to in the media release. In absence of such document, emails or file notes on which the Government relied to make statement that it had “agreed terms” with the 4 major banks – in November 2019; and
2) the October 2022 final shareholders agreement between the banks and Gov’t (see other media releases).
Please note:
A) the CBA Chairman said at AGM that she expected Govt to release (if not true, will render shareholder approval subject to re-vote as this info will have been misleading);
B) if agreement contains confid provision, must be read in light of exclusions for info in the public domain, or required by law or by request from authority (such as under FOI provisions); and3) public interest immunity is no longer valid, as agreements are no longer ‘under negotiation and commercial-in-confidence’.
On 8 July 2021, the Respondent identified two documents falling within the scope of this request as set out in [3] and [6] above. Further, the Respondent decided to refuse access to both documents on the basis that they were fully exempt under ss 45, 47G(1)(a) and 47G(1)(b) of the FOI Act.
On 15 July 2021, the Applicant requested that the Office of the Information Commissioner (IC) review the abovementioned decision of the Respondent, and that the review be expedited.
On 20 July 2021, however, the Applicant sought internal review of the abovementioned decision.
On 19 August 2021, the Respondent’s internal review decision-maker affirmed the original decision and refused access to both documents. In contrast to the original decision, it was decided that the documents are exempt under ss 45, 47(1)(b), 47D and 47E(d) of the FOI Act.
On 16 September 2021, the Applicant advised the IC that he wished to proceed with a review of the Respondent’s internal review decision and made a further request that the review be expedited, or otherwise be referred to the Tribunal under s 54W(b) of the FOI Act which allows the IC the discretion not to undertake a review.
On 30 September 2021, the IC informed the Respondent that the Applicant had sought IC review of the Respondent’s decision of 19 August 2021, and that the review be expedited, or otherwise that the IC exercise her discretion under s 54W(b) of the FOI Act to allow the Tribunal to consider the review application.
On 24 November 2021, a delegate of the IC decided not to undertake a review.
On 13 December 2021, the Applicant applied to the Tribunal for review of the Respondent’s decision dated 19 August 2021 (see [13] above), being the reviewable decision.
On 9 September 2022, the parties to the proceeding, and the Tribunal, consented to the alteration of the reviewable decision under s 26(1)(b) of the Administrative Appeals Tribunal Act 1975 (Cth) and, accordingly, the Respondent released parts of the shareholders’ agreement to the Applicant.
Proceedings No. 2022/4753
On 20 January 2022, the Applicant made a request to the Respondent pursuant to s 15 of the FOI Act for the following:
Any correspondence dated between 1 January 2018 ‐ 31 December 2020 from the Australian Government Solicitor or any other legal adviser provided to Treasury that provides advice on the compliance or otherwise of the proposed Australian Business Growth Fund and any ancillary arrangements with the Consumer and Competition Act 2010.
On 21 February 2022, the Treasury made a decision to refuse access to the requested documents under s 42(1) of the FOI Act, “while neither confirming nor denying the existence of relevant documents under s 26(2) of the FOI Act”. The Treasury explained that s 26(2) “provides that FOI decision letters are not required to contain information that would be exempt under the FOI Act … This is because, to state in this decision letter that any such documents exist or do not exist, would serve to effectively disclose the content of the Treasury’s communications with its legal advisers”.
On 21 February 2022, the Applicant sought internal review of the Respondent’s decision.
On 23 February 2022, the Applicant applied for IC review of the Respondent’s decision and requested that the IC either expedite the IC review application or make a decision under
s 54W(b) to decline to undertake a review.
On 23 March 2022, the Respondent made an internal review decision confirming its original decision refusing access to the documents, but again neither confirming nor denying the existence of relevant documents in reliance on s 26(2) of the FOI Act (see [20] above).
On 24 March 2022, the Applicant advised the IC that it wished to proceed with a review of the Respondent’s internal review decision, and that it continued to seek a s 54W(b) decision by the IC.
On 13 May 2022, a delegate of the IC decided not to undertake an IC review.
On 7 June 2022, the Applicant applied to the Tribunal for review of the Respondent’s decision dated 23 March 2022 (see [23] above), being the reviewable decision.
INTERLOCUTORY DECISION
An interlocutory hearing in the two proceedings was held on 30 September 2022 to decide several preliminary issues. On 18 November 2022, the Tribunal, relevantly, refused the Applicant’s request to make orders regarding the disclosure of the confidentiality clauses contained within the foundation documents and refused the Applicant’s request to exclude a KWM letter dated 15 August 2022 from evidence, to which we will come shortly: see OnMarket BookBuilds Pty Ltd and The Treasury [2022] AATA 3993.
RELEVANT STATUTORY PROVISIONS
The overall purpose of the FOI Act is to give the Australian community access to publicly held documents. Section 3 of the FOI Act relevantly provides, as follows:
3 Objects—general
(1) The objects of this Act are to give the Australian community access to information held by the Government of the Commonwealth, by:
…
(b) providing for a right of access to documents.
…
(3) The Parliament also intends, by these objects, to increase recognition that information held by the Government is to be managed for public purposes, and is a national resource.
...
The FOI Act grants every person a legally enforceable right, subject to the Act, to obtain access, in accordance with the Act, to documents of an “agency”, other than an “exempt document” (s 11(1)). The Applicant’s reasons for seeking access to documents, as well as the Respondent’s concerns as to what those reasons might be, are irrelevant to the issue of determining access to documents as per s 11(2) of the FOI Act. Accordingly, as these matters are irrelevant to our decision-making task, it is of no utility to ventilate any of these, especially the Applicant’s various concerns regarding ABGF.
The term “agency” is defined in s 4(1) of the FOI Act to include “a Department”. It was common ground that the Treasury, the Respondent, is an agency for this purpose.
When a person makes a request in accordance with s 15(2) of the FOI Act for access to a document of the agency, the agency must give the person access to the document in accordance with the Act (ss 11A(1) and (3)) but is not required to do so if, relevantly, the document is an “exempt document” (s 11A(4)).
The term “exempt document” is defined in s 4. It is subparagraph (a) of the definition which is relevant:
exempt document means:
(a) a document that is exempt for the purposes of Part IV (exempt documents) (see section 31B); or
...
Paragraph (a) of s 31B, in turn, relevantly, provides:
Exempt documents for the purposes of this Part
A document is exempt for the purposes of this Part if:
(a)it is an exempt document under Division 2; or
(b)…
Note 1: A document is an exempt document for the purposes of this Act (see subsection 4(1)) if:
(a)it is exempt under this section; or
…
Division 2 of Part IV of the FOI Act sets set out the exemptions. Relevantly, the exemptions which were maintained by the Respondent at the hearing are ss 42, 45(1) and s 47(1)(b) of the FOI Act. It follows that a person’s entitlement to access documents of an agency is qualified by exemption provisions. (There are also public interest conditional exemptions set out in Division 3 of Part IV of the FOI Act but none of these were in issue in these proceedings).
Section 42 of the FOI Act states, as follows:
Documents subject to legal professional privilege
(1)A document is an exempt document if it is of such a nature that it would be privileged from production in legal proceedings on the ground of legal professional privilege.
(2)A document is not an exempt document because of subsection (1) if the person entitled to claim legal professional privilege in relation to the production of the document in legal proceedings waives that claim.
(3)A document is not an exempt document under subsection (1) by reason only that:
(a)the document contains information that would (apart from this subsection) cause the document to be exempt under subsection (1); and
(b)the information is operational information of an agency.
Note: For operational information, see section 8A.
Section 45 of the FOI Act relevantly provides, as follows:
Documents containing material obtained in confidence
(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.
Section 47 of the FOI Act relevantly states:
Documents disclosing trade secrets or commercially valuable information
(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.
Other relevant statutory provisions include s 57A(1)(b) of the FOI Act which the Applicant relied on in seeking review of the Respondent’s decisions on the basis that the IC exercised the discretion not to review the reviewable decisions, and s 58(1) of the FOI Act which sets out the Tribunal’s powers regarding review of FOI decisions. The Tribunal relevantly has power to review any decision made by the agency and any decision of the Tribunal has the same effect as a decision of the agency. Significantly, where a document is established to be an exempt document, the Tribunal does not have power to decide that access be granted to it (s 58(2)). Additionally, s 61(1) of the FOI Act relevantly states that it is for the agency to demonstrate that the claimed exemptions to the FOI requests are made out.
THE EVIDENCE
Besides the subject documents which were shown to us by the Respondent in confidence, the evidence relied on by the Respondent comprised written and oral evidence of two persons who were familiar with the establishment of ABGF, being Mr Warren Tease and Mr Anthony Healy. We accept their evidence and make findings, accordingly.
Mr Ben Bucknell, representing the Applicant, mainly relied on the disclosed parts of the foundation documents which were used to prepare a reconstructed shareholders’ agreement. He also referred us to committee papers, minutes and agenda items of the Australian Prudential Regulation Authority (APRA). We did not consider these documents to be particularly helpful, as they are either of a speculative or general nature and or unrelated to the specific legal issues which we had to address.
Mr Warren Tease
Mr Warren Tease is a senior public servant and has served in the role of Chief Adviser in the Respondent’s Markets Group since February 2018. In that role, Mr Tease is responsible for providing advice to the Commonwealth Government on a range of financial market issues. Prior to becoming a public servant in 2015, Mr Tease worked in the private sector in investment banking and investment management roles. Mr Tease is no longer involved with the Treasury’s work on ABGF.
Mr Tease stated that the ABGF was established in 2020 as a private company to provide equity funding to SMEs. ABGF’s initial capitalisation was $540 million. Mr Tease worked on the establishment of the ABGF during the period in which its term sheet and shareholders’ agreement were being negotiated, namely, from mid-2019 through to mid-2020. Mr Tease was in the working group that developed the foundation documents. The working group comprised the Respondent, which Mr Tease represented, the bank shareholders, and KWM, as facilitator and legal adviser to the working group. Mr Tease stated he was aware that KWM continued to advise ABGF and ABGF’s shareholders after ABGF was established. Mr Tease also referred to the fact the Respondent was additionally advised by the ‘commercial arm’ of the AGS in relation to the foundation documents.
Mr Tease’s evidence was that KWM was retained to advise the working group on legal issues relating to the establishment of ABGF and KWM was responsible for drafting the foundation documents. KWM received drafting instructions from the various representatives of ABGF’s shareholders who were on the working group. Mr Tease explained that, occasionally, KWM would be instructed by one of the ABGF shareholders as to its position on issues and it would then seek the views of the working group on those issues, without necessarily disclosing the shareholder that initially raised the issues, such was the sensitivity of the information and negotiations.
Mr Tease recalled that the issue of confidentiality was discussed in the early stages of the preparation of the term sheet and the banks were of the view that the foundation documents contained commercially sensitive information about each of them, and as regards the setup of ABGF. Accordingly, binding confidentiality clauses were included in each of those documents. His evidence is corroborated by the express statement in the term sheet dated 24 October 2019 (as already partly disclosed to the Applicant) that “[t]his term sheet is indicative in nature and, except in relation to the confidentiality obligations contained in Part B, Item 35 below which are intended to be binding on the parties, does not create rights, obligations or liabilities among the parties” (bolding is our emphasis).
Notwithstanding the confidentiality clauses in the foundation documents, Mr Tease acknowledged that the ABGF shareholders considered it appropriate to make high level information about the ABGF public, including for the purpose of promoting it to SMEs. Mr Tease referred to several media releases in November 2019 and in October 2020 and, additionally, to ABGF’s website which publicised ABGF’s objectives, initial capital contributions, and investment guidelines. Other than what was disclosed in those statements, which was general in nature and, partly, intended to attract SMEs, Mr Tease stated that ABGF and the shareholders considered other information contained in the foundation documents to be commercially sensitive and he was not aware of that other information having been disclosed publicly.
Mr Tease stated that all versions of the foundation documents are held securely in the Respondent’s database with access restricted to the Respondent’s personnel in the Financial System Division and Law Division. In his affidavit affirmed 13 September 2022 in relation to Proceedings No. 2021/9874, Mr Tease stated that he was aware ABGF had provided time-limited access to the shareholders’ agreement to the Australian Government Competitive Neutrality Complaints Office (AGCNCO) in the Productivity Commission for determining the Applicant’s competitive neutrality complaint, but that he was unaware of any other sharing of the documents. In a subsequent affidavit affirmed 10 February 2023, and at the hearing, Mr Tease corrected his earlier statements and revealed he had mistakenly omitted other limited instances where the foundation documents had been released to entities within the Government, namely, to the Australian Competition and Consumer Commission, the Department of Finance and both former and current Treasurers.
In further support of the Respondent’s position, annexed to Mr Tease’s affidavit affirmed 13 September 2022 in relation to Proceedings No. 2021/9874, was a letter from KWM dated 15 August 2022 addressed to AGS referencing the Applicant’s FOI request relating to the foundation documents. This is the KWM letter that we referenced at [27] above, which was also the subject of the Tribunal’s interlocutory decision.
KWM, acting on behalf of ABGF and its bank shareholders, states in its 15 August 2022 letter that they “strongly object to the clauses which remain redacted of the shareholders’ agreement and the summary of key term being released”. KWM explained that the contents comprise confidential information about topics such as the shareholders’ positions and risk appetite on, amongst other things, investment mandates, investing with other parties, admission of new investors, distribution policies, voting matters and thresholds. KWM claims that the information also reveals confidential information about ABGF, including its budget and business plan and events which would trigger winding down of ABGF and exit opportunities for the shareholders. These descriptions of the topics and information are confirmed by our inspection of the foundation documents. KWM added that the information was, and continues to be, held securely and with limited access within each bank shareholder’s document management system. For example, within one bank, file access was limited to those working on the deal and to the governance committee members who approve transactions, all of them being subject to strict confidentiality undertakings. Within another bank, where subject area specialists’ assistance was sought as part of negotiating the terms, the specialists were only privy to the specific information pertaining to their subject area and not provided with the entire documents. KWM states that the shareholders’ agreements and term sheet are not publicly available and have always been treated with the highest levels of confidentiality. We have no reason to doubt the content of KWM’s letter as to the steps taken to ensure the foundation documents are kept confidential. In circumstances where KWM acted, and continues to act, for ABGF and the bank shareholders, we also accept the assertion that those parties strongly oppose the public release of the foundation documents.
In his oral evidence, Mr Tease was unable to recall whether each of the shareholders had signed an engagement letter with KWM or if one of the banks acted on behalf of the working group. Mr Tease stated he had no reason to believe that KWM was giving advice solely for the benefit of the ABGF, and not for the shareholder group.
When cross-examined about the Respondent’s exemption claims, Mr Tease stated the claim would be over all relevant iterations, including drafts of the shareholders’ agreement that have been superseded. Mr Tease acknowledged he had no knowledge of the initial discussions between the then Commonwealth Government, APRA and potential shareholders because negotiations for the ABGF began in 2018, and he only began to work on the ABGF in 2019.
In Mr Tease’s opinion, the potential damage or diminution in commercial value that would likely ensue if the shareholders’ agreement were publicly disclosed would be that it would allow competitors to enter the market more easily. Mr Bucknell, representing the Applicant, asked Mr Tease whether there was a disconnect between statements the Respondent had made about the limited negative impact the ABGF would have on competition in the market, when compared to the claim that releasing the shareholders’ agreement would destroy the commercial value of the information. Mr Tease responded noting that the ABGF shareholders had invested time, intellectual capital and money to develop the shareholders’ agreement and its release would allow a competitor to establish themselves without needing to spend that initial capital.
Mr Tease was provided with a draft copy of an agreement between shareholders - reconstructed by Mr Bucknell on behalf of the Applicant – based on an unredacted version as well as freely available information about such agreements, and then cross-examined about aspects of it. Mr Tease identified several clauses that he thought would have diminished value if they were in the foundation documents and if they were disclosed, but also rightly acknowledged that his opinion was speculative and that it was a question better put to the banks and the ABGF who he conceded were particularly concerned about the confidentiality of the foundation documents. Mr Tease explained that whether a standard clause in a shareholders’ agreement would have potentially valuable commercial information would depend on the context and the particular details. Mr Tease acknowledged that while a clause may only serve a mechanical purpose in one shareholders’ agreement, the level of detail included in a similar clause in another shareholders’ agreement, for example, in the foundation documents, could involve commercially valuable information. Our own inspection of the shareholders’ agreement corroborated Mr Tease’s response to the effect that many clauses in the shareholders’ agreement had been specifically tailored to take account of the uniqueness of the arrangement.
Mr Tease was asked about statements made by the chairperson of the CBA to the effect that the shareholders’ agreement would be publicly released. Mr Tease explained that these statements could have indicated the chairperson’s understanding, but that at the time of making those statements, it was not the intention of the Commonwealth Government to release the documents publicly.
We accept that Mr Tease was a reliable witness as he had first-hand involvement at the time of the relevant negotiations concerning the ABGF. Mr Tease was on the working party with respect to the foundation documents and was also one of the Treasury recipients of the emails sent by AGS.
Mr Anthony Healy
The second witness was Mr Anthony Healy who gave written evidence in the form of affidavits affirmed 12 September 2023, and oral evidence before us, including in a confidential setting. He also impressed us as being an earnest and honest witness.
Mr Healy is the Chief Executive Officer and Managing Director of ABGF having commenced in that role in October 2020. Mr Healy’s prior positions were in business and private banking roles at various banks, and he has broad experience across the financial services sector including retail, asset finance and wealth management.
Mr Healy stated that he was familiar with the foundation documents from his continued work with ABGF. Mr Healy explained that he was involved until the formation of the ABGF working group and then had minimal involvement until he was appointed ABGF’s inaugural Chief Executive Officer in October 2020. He stated that ABGF’s structure is somewhat novel for an investment fund.
By way of further background, Mr Healy stated he had direct knowledge in the development and promotion of the concept of ABGF following a trip to the United Kingdom in mid-2018, where part of the purpose of his trip was to look for new ideas and approaches to support the growth and success of SMEs in Australia. At the time of the UK trip, Mr Healy was working with NAB and, on his return to Australia, he supported the CEO of NAB to approach other banks and the Commonwealth Treasurer to promote a business growth fund proposal.
Mr Healy explained that the term sheet was the precursor to the shareholders’ agreement in that it set out the “key terms” that were intended to form the basis of the agreement. The shareholders’ agreement contains the more detailed provisions, including regarding ABGF’s governance, decision making, reporting, further shares issues and transfers as well as exit rights of the shareholders. Mr Healy added that the shareholders’ agreement had the draft ABGF business plan annexed to it and it was a commercially sensitive document, particularly as it included, amongst other things, deal origination and structuring strategies, assumptions underlying ABGF’s proposed investment model, forecast operating and staff costs, return targets, internal risk assessments and key performance indicators. Mr Healy added that businesses competing with ABGF in the deployment of capital do not share such information with competitors and, likewise, ABGF and its shareholders have also kept confidential, certain parts of the shareholders’ agreement including most of the business plan. Our own inspection of the ABGF draft business plan supports Mr Healy’s view that it contained commercially sensitive information.
Mr Healy acknowledged under cross-examination that parts of the shareholders’ agreement and term sheet had been disclosed to ABGF’s advisors in the ordinary course of business, but under strict confidentiality obligations. Mr Healy was also aware that the shareholders’ agreement was shared on a confidential basis with the AGCNCO, however, he noted that before receiving it, the AGCNCO had signed a confidentiality agreement which included an obligation to destroy the copy of the shareholders’ agreement within 14 days of receipt.
It was suggested to Mr Healy under cross-examination by the Applicant’s representative that a comparable business growth fund in the United Kingdom released far more detailed information publicly without suffering a competitive disadvantage. Mr Healy’s response was that ABGF intended to release more information as it grew and reached legislated disclosure thresholds, but he also pointed out that the UK fund had never released or published their business plans, budgets or shareholders’ agreement.
Mr Healy considered that the intellectual property contained in the shareholders’ agreement had significant commercial value, in part due its uniqueness. Indeed, it was evident to us from our inspection of the shareholders’ agreement that it had been carefully drafted to accommodate the interests of its shareholders, including as regards sensitive matters such as how decision-making would occur in relation to specified matters. Mr Healy also maintained that the business plan contained commercially sensitive information, albeit it may have been the initial plan. Mr Healy also emphasised the fact that the foundation documents both contained confidentiality clauses and, he stated that based on his discussions with ABGF’s bank shareholder director representatives, there was a clear expectation that all shareholders, including the Respondent, would keep the information confidential.
As to the emails, Mr Healy clarified in the confidential part of the hearing, that he was aware there was a later agreement with respect to the sharing of KWM’s fees amongst ABGF’s shareholders even though NAB had initially engaged and paid KWM on behalf of the working group. Mr Healy stated he became aware of this although he did not play any role in the drafting of the shareholders’ agreement.
ARE THE FOUNDATION DOCUMENTS CONFIDENTIAL IN NATURE?
The Applicant argued that the confidentiality clause in the shareholders’ agreement itself permits the disclosure of confidential information as it contains an exception which, amongst other things, is applicable to FOI requests. The relevant clause relied on is paragraph (c) of clause 23.1, as follows:
Clause 23.1 Disclosure of Confidential Information
A party may not disclose any Confidential Information to any person except:
…
(c)if it is required to do so by law, at the direction of, or in cooperation with, a Government Agency or by a stock exchange;
….
“Confidential Information” is relevantly defined in clause 1.1 of the shareholders’ agreement, as follows:
Confidential Information means all confidential, non-public or proprietary information regardless of how the information is stored or delivered, provided by or obtained from one party to one or more other parties before, on or after the date of this agreement relating to the business, technology or other affairs of the ABGF or one or more of the Shareholders including:
(a)the terms of this agreement;
(b)any reports provided by the ABGF to Shareholders in satisfaction of the reporting obligations in clause 12.1; and
(c)all trade secrets, business plans, financial, marketing, systems, technology, ideas concepts, know how… intellectual property or any other information which is indicated to be subject to an obligation of confidence, owned or used by or licensed to the ABGF.
Specifically, the Applicant argued that the FOI Act binds the Commonwealth and a disclosure under the FOI Act would be “by law” and “in cooperation with a Government Agency”. Furthermore, the Applicant argued that due to the “entire agreement” clause in the shareholders’ agreement which relevantly states at clause 28.14 that “[t]his agreement and Constitution constitute the entire agreement of the Parties about the subject matter and supersede all previous agreements, understandings and negotiations…”, clause 23.1(c) must be read literally.
In the alternative, the Applicant makes several additional arguments as to why the foundation documents do not meet the criteria of s 45 of the FOI Act, including:
(a)The foundation documents have lost the necessary quality of confidence on the basis that they have been shared with individuals and agencies outside of the AGBF and the Respondent, and that the documents likely mirror publicly available examples of such documents.
(b)The circumstances in which the foundation documents were received did not import an obligation of confidence on the basis that the drafting of clause 23.1(c) reflects an intention of the drafters to grant a unilateral right for the Commonwealth Government as a shareholder to publicly disclose the documents.
(c)The Respondent has the authority to disclose the foundation documents due to the “entire agreement” clause 28.14 and the effect of clause 23.1(c) (see [64] above) and clause 23.1(f), the latter providing for the Government to disclose the information to any other Commonwealth Department or agency.
(d)The disclosure of the information will not cause detriment because:
(i)the documents are substantively similar to publicly available, industry standard terms;
(ii)the current business plan is based on a draft business plan which has been released to the public, which is no longer confidential;
(iii)more expansive release of information would not cause detriment or advantage competitors because of the unique nature of the ABGF.
The test under s 45 of the FOI Act is whether disclosure would be actionable at general law. The formulation of s 45, as amended in 1991, is based on the principles set out in the dissenting judgment of Gummow J in the Federal Court in Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443: see Re Kamminga and Australian National University (1992) 26 ALD 585.
The FOI Guidelines issued by the IC pursuant to s 93A of the FOI Act, to which the Tribunal is required to have regard, are based on the abovementioned judgment of Gummow J and set out the following 5 criteria that must be satisfied in relation to the information:
(a)it must be specifically identified;
(b)it must have the necessary quality of confidentiality (i.e., it must be a secret or known only to a limited group);
(c)it must have been communicated and received on the basis of a mutual understanding of confidence;
(d)it must have been disclosed or threatened to be disclosed, without authority, and
(e)unauthorised disclosure of the information will cause detriment.
It is common ground that the only issues arising with respect to the foundation documents are, first, whether they have the necessary quality of confidentiality; secondly, whether the information has been communicated and received on a mutual understanding of confidence; and, thirdly, whether unauthorised disclosure will cause detriment.
As to the first issue, it is in our view, clear that the foundation documents, to the extent not already disclosed to the Applicant, are confidential as they contain commercially sensitive information and are known only to a limited group, namely, ABGF, and the ABGF shareholders. Importantly, the evidence of both Mr Tease and Mr Healy was categorical with respect to the fact that the documents, from the drafting stage through to their current use, are kept confidential and secure and there has been no public dissemination of the documents. Furthermore, while there have been limited instances of distribution within the Commonwealth Government or by ABGF, including to ABGF’s advisers, they have always been for a limited purpose and with assurances as to confidentiality undertakings, as appropriate and in accordance with the confidentiality clauses. In this regard, we refer to the evidence of Mr Tease and Mr Healy at [48] and [60] above.
As to the second issue, and the question of whether the information has been communicated and received on a mutual understanding of confidence, we adhere to the guidance provided by the Full Federal Court in Smith Kline and French Laboratories (Aust) v Department of Community Services and Health (1991) 99 ALR 679 at 690:
To determine the existence of confidentiality and its scope, it may be relevant to consider whether the information was supplied gratuitously or for a consideration; whether there is any past practice of such a kind as to give rise to an understanding; how sensitive the information is; whether the confider has any interest in the purpose for which the information is to be used; whether the confider expressly warned the confidee against a particular disclosure or use of the information - and, no doubt, many other matters. Confidential information is commonly supplied without payment: for example, by a prospective employee (or his referee) to support an application for employment. The understanding ordinarily would be that the prospective employer would not disclose the information to any third party; but it would hardly be expected that its use would necessarily be confined to the employment application itself.
It is clear from the evidence adduced that the Respondent has not distributed the relevant material to the public at large. Further, it is clear from the evidence that all parties understood their mutual obligation to keep the documents confidential from the outset (see, for example [44] above). Moreover, the actions of the parties in only allowing the foundation documents to be distributed on a limited, need-to-know basis are entirely consistent with the confidentiality clauses. We are reinforced in our views by the fact that our inspection of the foundation documents reveals they contain express confidentiality clauses, as well as quite specific undertakings as regards confidentiality.
We do not accept the Applicant’s argument that paragraph (c) of clause 23 confers an unfettered discretion on the Respondent to disclose information. In this regard, Mr Healy’s evidence is clear that ABGF and ABGF’s shareholders all understood that the relevant clause did not go beyond disclosure to Government Agencies where such disclosure was required as part of that Agency’s regulatory obligations. This is supported by clause 23.5 of the shareholders’ agreement which states, as follows:
A party requiring or wishing to disclose Confidential Information in accordance with clause 23.1(c) must notify (i) the ABGF and (ii) where the relevant Confidential Information comprises Confidential Information of a Shareholder that Shareholder, to the extent reasonably practicable and legally permissible of the proposed disclosure as far in advance as practicable and must comply with the requirements of clause 23.6.
We do not set out clause 23.6 (which is referred to in clause 23.5 immediately above) as an exemption claim applies in relation to clause 23.6. However, we observe that it sets out more stringent and comprehensive requirements in relation to the confidentiality obligations of the parties.
Mr Healy’s oral evidence, as to the operation of clause 23.5, as set out below, also validates the inclusion of detailed confidentiality obligations in agreements in the banking and financial services industry because of the regulatory environment:
My understanding of that clause is that it’s not an uncommon clause, particularly in banking and financial services, that is a carve out that banks or other financial services companies would put into a confidentiality clause to enable them to be able to cooperate with a government agency and provide information to that government agency at its direction or request because it’s a highly regulated industry and there’s often requests for information from regulators or agencies and there’s occasionally investigations. So this clause enables, in my understanding of it, for parties that are subject to this clause – in the case of the ABGF as an example – to provide that information without having to see the matter escalated to the court order, for instance, or to expedite the matter so their cooperating well with a government agency.
We place no weight on the Applicant’s argument that Ms Catherine Livingstone, the former Chair of the CBA, foreshadowed at CBA’s Annual General Meeting on 13 October 2020, that the shareholders’ agreement would be disclosed in the future. This may have been her view at that time, but it is noted the shareholders’ agreement is dated 16 October 2020 and is an agreement between the parties, as indicated at [3] above and has an entire agreement clause (see [66] above). Besides, there is no evidence to suggest that the CBA acted inconsistently with its confidentiality obligations under the foundation documents.
Item 35 of the term sheet provides additional strong support as to the requirement of strict confidentiality, both for the term sheet and the shareholders’ agreement, noting that the term sheet was the precursor to the shareholders’ agreement. The part of Item 35 of the term sheet which was disclosed to the Applicant reads, as follows:
This Term Sheet is a commercially sensitive document containing the trade secrets of the intending Founding Shareholders as to the constitution and operations of the BGF.
The Term Sheet and the information relating to the transactions contemplated by it or the establishment of the BGF are confidential and not to be disclosed to other persons except in circumstances where:-the relevant information has become part of the public domain other than as a result of a breach of confidence;
-the disclosure is made on a confidential basis to a related entity or any of its or their officers, employees, professional advisers or consultants to whom (and to the extent to which) it is necessary to disclose the information in connection with the transactions contemplated by this Term Sheet;
-the disclosure is to an bona fide intending investor on the basis that such investor will be subject to obligations of confidence set out in this term sheet;
-the disclosure is in response to a request by a House or a Committee of the Parliament of the Commonwealth of Australia;
-the details of the Term Sheet or the Term Sheet itself is shared by Treasury within Treasury or within the Commonwealth (including other Commonwealth departments or agencies), provided the relevant member of the Treasury or other Commonwealth department or agency takes reasonable steps to ensure the details of the Term Sheet are not disclosed to the public; or
-the disclosure is required by an applicable law, legal process, any order or rule of any governmental agency, the rules of the Australian Securities Exchange or other recognised stock exchange, provided that any such disclosure is restricted to the minimum legally required.
[…EXEMPTION CLAIMED]
The above extract demonstrates the prescriptive approach adopted by the parties to the topic of confidentiality and the measures intended to maintain the contents confidential. We, therefore, conclude that there was an express expectation of strict confidentiality amongst the parties, with certain exceptions being expressly stated and confined. In these circumstances, clause 23.1(c) of the shareholder’s agreement cannot be interpreted to mean the Respondent has absolute discretion to disclose the agreement to the public. Indeed, the confidentiality provision would be futile if the Respondent had the ability to disclose the agreement to the public in the manner urged by the Applicant. Our position is consistent with Mr Healy’s evidence, including his opinion that “my understanding of that clause is it relates to cooperation to share information with government agencies, not to release information to the public”.
DO THE FOUNDATION DOCUMENTS HAVE COMMERCIAL VALUE THAT WOULD BE REASONABLY EXPECTED TO BE DESTROYED OR DIMINISHED IF DISCLOSED?
Turning to the Respondent’s additional exemption claim under s 47(1)(b) in relation to the foundation documents, the FOI Guidelines state that for a document to be exempt under
s 47(1)(b) of the FOI Act, the document must satisfy the following two criteria:
(a)the document must contain information that has commercial value either to an agency or to another person or body; and
(b)the commercial value of the information would be, or could reasonably be expected to be, destroyed or diminished if it were disclosed.
In relation to the first limb, the FOI Guidelines include the following factors in deciding whether information has commercial value:
(a)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;
(b)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;
(c)whether a genuine ‘arm’s-length’ buyer would be prepared to pay to obtain that information;
(d)whether the information is still current or out of date (out of date information may no longer have any value);
(e)whether disclosing the information would reduce the value of a business operation or commercial activity – reflected, perhaps, in a lower share price.
We are satisfied that the information contained in the foundation documents has commercial value, in large part due to the fact the information was commercially sensitive, known only to a limited group, and would likely reduce the value of ABGF and, in turn, the value to ABGF shareholders if it were disclosed. Clearly, the parties negotiating the foundation documents understood their information was being exchanged confidentially and saw fit to specifically provide for stringent confidentiality provisions. We have already extracted at [78] above the part of Item 35 of the term sheet disclosed to the Applicant which is categorical in its terms. We were particularly impressed by the precision of that “key term” and the forward thinking, for example, to allow as an exception for disclosure of the term sheet and information in it “to a bona fide intending investor on the basis that such investor will be subject to obligations of confidence set out in this term sheet”. That provision is to be contrasted with other “key terms” which were still undecided, as at that stage, such as the governing law in Item 34 which provides “[t]he governing law will be Victoria or New South Wales”. Similarly, in the shareholders’ agreement, subclause 23.1 states “[a] party may not disclose any Confidential Information to any person except …”. We agree with the Respondent’s submission that these clauses are objective evidence that the terms of the documents were agreed to be commercially sensitive and intended by all parties to be confidential. The Applicant’s efforts to gain access to the information in the foundation documents could be seen to support the proposition that the information is of considerable commercial value in the banking and financial services industry, including to potential competitors.
We turn now to the question of whether the foundation documents have commercial value that would be or could be destroyed or diminished by their public release under the FOI Act. We were persuaded by the evidence of both Mr Tease and Mr Healy that the foundation documents would provide a competitor with a blueprint for the establishment of a fund without having to expend the time and money to establish one, and that would, in our view, diminish the commercial value of the foundation documents. Mr Tease, who is an experienced Treasury official and who was on the working group stated, as follows:
I think the argument we’re making - that is, if the shareholder’s agreement was released - it would be easier for competitors to start up, and that could potentially be damaging to the ABGF.
(…)
my experience in developing the shareholders agreement is all of the shareholders invested a lot of time, intellectual capital and money and took the better part of 12 months together with the assistance of six very sophisticated large banks. Releasing the shareholders agreement would, in effect, allow someone to bypass all of that investment, both in terms of dollars and intellectual capability, and if they so chose, use it to set up a fund.
In the confidential part of the hearing, Mr Healy gave a more detailed explanation of the detriment that may be caused to ABGF and its shareholders. It was evident from what he revealed to us that ABGF’s shareholders, and ABGF, regard the information as having substantial commercial value which is ongoing. It suffices to observe that Mr Healy also commented about the possibility that competitors to the ABGF may engage in mischievous activities if the documents were disclosed to them, to potentially disadvantage or even undermine ABGF’s business, that is, the information may be used to damage ABGF and or its shareholders.
We also accept on the basis of the evidence that the information in both the shareholders’ agreement and the term sheet has commercial value in that an arm’s length buyer, including competitors to ABGF, would be prepared to pay for the information, in the knowledge that the documents had been drafted and settled by KWM, the Treasury and the major Australian banks.
Accordingly, we accept that the information in the foundation documents has ongoing value and that the commercial value of the information would be, or could reasonably be expected to be, destroyed or diminished if it were publicly disclosed.
ARE THE EMAILS COVERED BY LEGAL PROFESSIONAL PRIVILEGE?
The concept of legal professional privilege in s 42 of the FOI Act is that developed by the common law, and not that covered by the Evidence Act 1995 (Cth). Accordingly, the key question in relation to the emails is whether legal professional privilege applies under the common law. Broadly, legal professional privilege applies to a confidential communication between lawyer and client brought into existence for the purpose of the lawyer providing legal advice, or for the dominant purpose of use in existing or anticipated litigation: see Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49.
The FOI Guidelines state that to determine whether a communication is covered by legal professional privilege, it is necessary to consider the following 4 factors:
(a)whether there is a legal adviser and client relationship;
(b)whether the communication was for the purpose of giving or receiving legal advice, or use in connection with actual or anticipated litigation;
(c)whether the advice given is independent; and
(d)whether the advice given is confidential.
The Applicant argued in its submissions, as follows:
(a)the subject emails contain advice provided by the AGS to the Respondent in the AGS’s ‘commercial capacity’ and, therefore, fail the dominant purpose test required by common law to establish legal professional privilege;
(b)in the alternative, the Respondent has waived any legal professional privilege over the documents due to either disclosure waiver or issue waiver. As to disclosure waiver, the Applicant argued the Respondent was correct in its original decision that disclosing the existence of the documents would in effect disclose their contents, and, therefore, the more recent acknowledgement of the existence of the documents had resulted in a waiver of that privilege. As to issue waiver, the Applicant submitted the Respondent sought to mislead the Applicant about the content or existence of the legal advice, and the effect of doing so has placed the contents of the emails as an issue in these proceedings, laying open this confidential information to scrutiny by the Applicant, impliedly waiving privilege;
(c)alternatively, s 42(3) of the FOI Act prevents the exemption of the emails on the basis they contain operational information as defined in s 8A of the FOI Act; and
(d)alternatively, the emails fall outside the scope of the Applicant’s FOI request.
It is clear that KWM was engaged by the shareholders of the ABGF and, later by the ABGF too, for the purpose of providing legal advice in relation to the setting up of ABGF, including as to the relationship between the shareholders. The affidavits of Mr Tease and Mr Healy specifically reference the involvement of KWM. For example, Mr Tease states, as follows:
KWM advised the working group prior to the establishment of the Fund, concerning its establishment, and continued advising the Fund and the shareholders after the Fund's establishment. The purpose of the communications recorded in these five emails was for the shareholder group to provide instructions to KWM, and for KWM to provide advice to the shareholders, concerning the preparation of certain documents relating to the governance of the Fund. The email chains also contain advice from the AGS who were separately engaged by Treasury to provide advice and assistance in relation to the establishment of the Fund.
(…)
KWM is a legal firm independent of the Fund and all of the Fund's shareholders. KWM was retained to advise the Fund's working group on legal issues arising from the establishment of the Fund and to draft related documents, including the documents in issue in AAT proceedings 2021/9874. As I have already noted …, AGS was also separately engaged by Treasury to advise in relation to the establishment of the Fund, including providing comment on the draft documents prepared by KWM.
Mr Healy states in his affidavit, as follows:
As at the date of the email, 4 December 2020, KWM was providing legal services to ABGF. Those legal services included, in general terms, providing legal advice and assistance through preparing or advising on a range of governance type documents for ABGF. This was a continuation of legal advice and assistance that KWM had been providing, to the working group via a NAB engagement, prior to the formation of ABGF.
…
The email was sent to ABGF and shareholders for input and comment in the context of this legal advice and assistance.
Accordingly, it is undisputable that there was a legal adviser and client relationship between KWM on the one hand and ABGF and ABGF shareholders on the other hand, and our review of the emails also confirms that the communications involving KWM were for the purpose of giving or receiving legal advice, and that the advice was given independently and confidentially. We were reinforced in our views having regard to the oral evidence given by Mr Healy in the confidential part of the hearing, including in relation to the arrangements made with respect to the payment of KWM’s fees by the shareholders of ABGF, and later by ABGF.
The advice provided by AGS was also clearly legal advice. Pursuant to ss 55J and 55N of the Judiciary Act 1903 (Cth), a professional lawyer and client relationship exists between the AGS and the Respondent. We are also satisfied that AGS acted independently when giving advice to the Respondent as AGS was providing legal advice on KWM’s legal advice to the Respondent. The fact that the AGS advice was provided by the ‘commercial arm’ of AGS is of no consequence and does not mean that it was not legal advice. It is common knowledge that large legal practices are divided into several practice groups which would include a practice group giving legal advice on commercial matters. In this regard, AGS is no different to large legal practices. We reject the Applicant’s notion that any AGS advice was given by the AGS in a “commercial capacity” as distinct from its obvious and recognised capacity as lawyers and legal advisors.
The Applicant sought to argue that there was a waiver of privilege in relation to the legal advice given by AGS and or KWM, however, such an argument cannot be sustained. In one of the emails, the AGS advice was shared confidentially between the shareholders, as evident from the list of recipients, but this was only for the purpose of further explanation or clarification of the KWM legal advice and to amplify or settle differences. In any event, we are of the view that the parties had common interest privilege because they had a formal legal relationship and, therefore, the disclosure of the AGS advice was in respect to matters in which they had a common interest. In relation to the KWM advice, the parties had joint interest privilege as the shareholders represented by the working group had jointly retained KWM to advise them on matters relating to their foundation documents. See, generally, Cross on Evidence at [25265].
There is no evidence that the Respondent, or any other party, waived legal professional privilege. The fact that the Respondent may have initially refused to confirm or deny the existence of documents, which it later confirmed were in existence, plainly does not amount to a waiver of privilege. Significantly, there was nothing done on the part of the Respondent, or any other party, which was inconsistent with the Respondent’s claim for legal professional privilege, and merely confirming the existence of the legal advice does not disclose the content of that advice. If it were the case that merely confirming the existence of legal advice jeopardised legal professional privilege, no person would ever assert legal professional privilege by reference to documents in the first place. Moreover, where joint and or common interest privilege applies legal professional privilege cannot be waived by one of the parties on its own. See, generally, Cross on Evidence, at [25015]. Finally, the Applicant also sought to rely on DSE(Holdings) Pty Ltd v Intertan Inc, [2003] FCA 384, however, such reliance is misconceived as, in this case, there has been no meaningful disclosure of the content of the legal advice to constitute issue waiver.
To the extent that the emails are in a chain of emails, the applicable principles to be applied are articulated in Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278, as follows:
(a) If the communication being the latest email was made for the dominant purpose of the giving or receiving of legal advice, then it may be that the email chain will be privileged because the earlier emails in the chain are to be regarded as copies of documents provided for the dominant purpose of the giving or receiving of legal advice.
For example, if the dominant purpose of the communication being the latest email was the giving of legal advice by a lawyer, then it may be that the email chain will be privileged because the earlier emails in the chain are to be regarded as copies of documents furnished by the lawyer with the advice being the latest email.
By way of further example, if the dominant purpose of the communication being the latest email was the obtaining of legal advice from a lawyer, then the email chain may be privileged because the earlier emails are to be regarded as copies of communications provided to the lawyer for the dominant purpose of obtaining legal advice.
The same principles can apply to earlier emails in the chain. For example, it may be that the latest email in the chain is not privileged, but the penultimate email (in time) may be a communication made for the dominant purpose of the giving or receiving of legal advice, and the earlier emails are to be regarded as copy documents which have been provided for the same dominant purpose.
Based on our inspection of the emails, the latest emails in the chain were all made for the dominant purpose of the giving or receiving of legal advice. It follows, it is not necessary for us to conduct a detailed examination of every email in the chain. Notwithstanding, we did examine each of the emails and reached the view that all of them in the respective chains, as well as the attachments, are also separately covered by legal professional privilege. In broad terms, and without disclosing their contents, they are communications about legal issues arising from the foundation documents and related documents.
The Applicant’s alternative argument regarding s 42(3) of the FOI Act (see extract at [35] above) and ‘operational information’ is misunderstood. Section 8A relevantly defines ‘operational information’ as information held by an agency to assist it to perform its functions or powers in making decisions affecting members of the public. Examples of operational information are an agency’s rules and guidelines. It is not clear how any of the subject emails are operational information to come within ss 8A and 42(3). Furthermore, the FOI Guidelines issued by the IC state that a document is not operational information if it is legal advice prepared for a specific case and not for wider or general use in the agency. As the emails are communications with respect to legal issues arising from a discrete arrangement, they are not operational information and s 42(3) does not apply.
Finally, we note that the emails may fall within the scope of the Applicant’s FOI request, as set out in [19] above.
OTHER ISSUES
During the hearing, the Applicant requested that should the Tribunal find in its favour, either compensation be awarded or there be a recommendation for compensation, for example, under the Commonwealth Government’s Compensation for Detriment due to Maladministration Scheme. The Applicant provided voluminous cases which, in its view, supported this request. However, these cases, while referencing comments made by the Tribunal, were in matters entirely unrelated to the specific issues before us.
In any event, the Tribunal finds no evidence that the Respondent acted in any way improperly in initially refusing to confirm or deny the existence of any legal advice. That may be evidence of uncertainty as to the law regarding legal professional privilege for the purposes of FOI Act matters and may stem from an overcautious, historical approach under the FOI Act, but it does not constitute maladministration nor misfeasance on the part of the Respondent. Accordingly, it is not necessary for the Tribunal to consider any issue of compensation particularly because the Respondent was correct to claim an exemption on the ground of legal professional privilege.
For completeness, we note there is a mechanism for costs to be awarded to a successful applicant in Tribunal proceedings under the FOI Act, however, it appears it may only be applicable where the IC has made a decision but, in any event, it does not need to be decided. In this matter, as stated above, the IC declined to review the reviewable decisions.
The Tribunal notes that the Respondent requested, should the Tribunal make a decision adverse to it, that a stay order be granted. The FOI Act does formally provide a mechanism for a stay order in such a scenario, but the order can, on the terms of 67(2) of the FOI Act, only be granted from the time at which an appeal is instituted. In any event, it is unnecessary to further consider this aspect in circumstances where the Respondent’s decisions under review are affirmed, and the Applicant has not been given further access to any of the subject documents.
DECISION
The reviewable decisions made by the Respondent are affirmed.
I certify that the preceding 104 (one hundred and four) paragraphs are a true copy of the reasons for the decision herein of The Hon. John Pascoe AC CVO, Deputy President and Senior Member G Lazanas
.....................................[SGD]...................................
Associate
Dated: 31 July 2023
Dates of hearing:
13-14 February 2023
Advocate for the Applicant:
Mr B Bucknell
Solicitor for the Respondent:
Mr J Davidson, Australian Government Solicitor
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