Pye and Australian Postal Corporation

[2004] AATA 1097

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1097

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2004/208

GENERAL ADMINISTRATIVE DIVISION		)
Re		WILLIAM PYE

Applicant

And AUSTRALIAN POSTAL CORPORATION

Respondent

DECISION

Tribunal Senior Member K L Beddoe

Date22 October 2004  

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

.................[Sgd]........................

Senior Member

CATCHWORDS

FREEDOM OF INFORMATION – access to documents – documents relate to the “commercial activities” of Australian Postal Corporation – agency exempt from producing documents which relate to its commercial activities – decision affirmed

Freedom of Information Act 1982 ss 3, 4, 7, 11, 13, 14, 15, 16, 18, 19

Australian Postal Corporation Act 1989 ss 27 and 28

Hodges v Frost (1984) 53 ALR 373
Re Ashley Colter (1970) 10 DLR (3d) 502
Hansen v Queensland Industry Development Corporation (1996) QAR 265
Re Geary and Australian Wool Corporation (1984) 7ALN 312

Re Political Reference Service (NSW) Pty Ltd and Australian Telecommunications Commission (AAT No 2799, 7 August 1986)

REASONS FOR DECISION

22 October 2004   Senior Member K L Beddoe          

1.      The applicant applied under the Freedom of Information Act 1982 (“the Act”) for access to:

“All documents relative to the sale of the Sandgate Post Office located in Bowser Parade, Sandgate, Queensland to DM and MG Cross and Tinpike Pty Ltd for the sum of $390,000.”

2.      The applicant’s letter of application then referred to specific documents to be included in his request for access as follows:

“This should include but not be limited to:

all correspondence prepared or received dealing with the negotiations of the sale,

a copy of the contract of sale,

copy of valuation by independent valuer at $280,000,

copy of lease agreement on the new mail sorting building in Connaught Street, Sandgate,

copy of lease agreement of a shop in the proposed shopping centre,

the amount of rental being paid for the Sandgate Post Office until the proposed shopping centre is ready for occupation.”

3. The respondent decided it was exempt within the terms of section 7 of the Act in relation to the applicant’s request. It also decided section 41 of the Act exempted the requested documents.

4.      On internal review the respondent decided to affirm its initial decision. 

5. The object of the Act is found in sub-section 3(1) of the Act which reads as follows:

“3 Object

(1)       The object of this Act is to extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth by:

(a)making available to the public information about the operations of departments and public authorities and, in particular, ensuring that rules and practices affecting members of the public in their dealings with departments and public authorities are readily available to persons affected by those rules and practices; and

(b)creating a general right of access to information in documentary form in the possession of Ministers, departments and public authorities, limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by departments and public authorities; and

(c)creating a right to bring about the amendment of records containing personal information that is incomplete, incorrect, out of date or misleading.”

6. Sub-section 11(1) provides, inter alia, that it is the intention of Parliament that the provisions of the Act shall be interpreted so as to further the object set out in sub-section 3(1).

7. Subsection 3(2) provides, subject to the Act, that every person has a legally enforceable right to obtain access in accordance with the Act to:

“A document of an agency, other than an exempt document; …”

8. Sub-section 11(2) has the effect of making an applicant’s motive for making an application for access an irrelevant consideration.

9. “Agency” is defined in sub-section 4(1) of the Act to include a prescribed authority. It is not disputed and I agree that the respondent is a prescribed authority and I so find.

10. Sub-section 7(2) of the Act provides, in effect, that a body specified in Part II of Schedule 2 of the Act is exempt from the operations of the Act in relation to the documents referred to in that Schedule in relation to the body.

11. Sub-section 7(2) may be contrasted with sub-section 7(2AA) which provides that a body corporate established by or under an Act specified in Part III of Schedule 2 is exempt from the operation of the Act in relation to documents in respect of the commercial activities of the body corporate.

12.     The Australian Postal Corporation Act 1989 (“The Postal Act”) is not specified in Part III of Schedule 2.

13. Part II of Schedule 2 which is headed “Agencies exempt in respect of particular documents” includes the following:

“Australian Postal Corporation in relation to documents in respect of its commercial activities.”

14. For the purposes of Part II of Schedule 2, “commercial activities” is defined in sub-section 7(3) to mean:

“(3)     In subsection (2AA) and Part II of Schedule 2, commercial activities means:

(a)activities carried on by an agency on a commercial basis in competition with persons other than governments or authorities of governments; or

(b)activities, carried on by an agency, that may reasonably be expected in the foreseeable future to be carried on by the agency on a commercial basis in competition with persons other than governments or authorities of governments.”

15. The documents referred to in Part II of Schedule 2 are documents received or brought into existence in the course of, or for the purpose of, the carrying on of those activities (subsection 7(4)).

16. While the respondent also claims exemption of the documents under section 41 of the Act that issue was reserved pending the Tribunal’s consideration and decision in relation to the operation of section 7 of the Act.

17.     At the hearing the applicant conducted his own case and Mr Batskos appeared for the respondent. 

18. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were before the Tribunal as the T documents and further documents were tendered and marked as exhibits as follows:

Exhibit 1:       Affidavit of Anthony Michael Gray

Exhibit 2:       Affidavit of Andrius Caprackas

19. Exhibit 2 identifies documents relevant to the applicant’s request and in respect of which access has been refused. Copies of those documents have been provided to the Tribunal in accordance with section 64 of the Act.

20.     The description of those documents taken from Exhibit 2 can be summarised as follows:

Doc       Description

1        Property Valuation Report

2        Lease agreement

3        Agreement for lease relating to Mail Exchange Centre

4        Contract of Sale relating to Sandgate Post Office

5Letter from lessor to respondent regarding Post Office and other facilities

6Internal message and memoranda re proposed sale of Sandgate Post Office

21.     The background to the application for access is that the Sandgate Post Office was sold for $390,000 in 2001 after the adjoining property (known as the Drill Hall site) was sold by the Commonwealth in 2000 for $800,000 – the two sites being of comparable size.

22. The sale of the Post Office site was the subject of what might be thought to be onerous conditions but those conditions are relevant in this matter only to establish whether documents come within the terms of the applicant’s request for access under the Act.

23.     By way of further background, the Sandgate Post Office was built in 1887 and, prior to its sale by the respondent, had been used for both retail and mail delivery functions of the respondent. The respondent says, and I accept that over time the building had become inadequate to meet the requirements of a modern retail and mail delivery centre. The respondent also says that there were significant occupational health and safety considerations emerging. The upper floor of the building was not being used.

24.     As heritage building restrictions precluded workable renovation and expansion, the respondent says it had no option but to find alternative sites for its retail and mail delivery functions and to sell the Post Office.

25.     It is not the function of this Tribunal to consider the merit or otherwise of the transactions entered into by the respondent, nor is it the function of this Tribunal to consider whether there are any issues in relation to the fact of the Sandgate Post Office being a heritage building.

26.     The respondent acknowledges, however, that the sale of the Sandgate Post Office went ahead on conditions that included that:

(a)the purchaser provides a purpose built facility for the mail delivery function that had been conducted at the Sandgate Post Office;

(b)the retail Post Office function be provided for in a shopping centre development being undertaken by the purchaser on an adjoining property; and

(c)pending the development of the shopping centre, the retail function remains housed in the existing Sandgate Post Office.

27.The evidence of Anthony Michael Gray satisfied me that:

(a)Australia-wide, at 30 June 2003, the respondent owned 554 properties and also leased 741 premises;

(b)as to the properties owned by the respondent there are special purpose properties used for mail centres, parcels and transport centres, warehousing and some stand alone or co-located business centres;

(c)also as to the properties owned by the respondent there are general purpose properties which include post offices, administrative and operational support facilities;

(d)in relation to leased premises, they are mostly commercial or retail type premises including retail “Post Shops” and traditional Post Offices; and

(e)in some remote localities it is necessary for the respondent to retain residential accommodation for staff.

28.     The respondent also engages in commercial activities more akin to property development and investment. In these cases, generally, the respondent occupies part of the property for a Post Office facility and develops the balance of the property to lease to others on commercial terms or otherwise exploit as a profit making undertaking.

29.     There are some relatively rare instances where properties owned by the respondent are leased in their entirety to another person or persons without any occupancy by the respondent in respect of that property. 

Consideration

30. The respondent submits that it is exempt from the operation of the Act in relation to documents in respect of its commercial activities. It says that its activities are conducted on a commercial basis in competition with private sector bodies albeit that it concedes it has a limited monopoly in relation to letter mail because of the operation of Division 2 of Part 3 of the Postal Act.

31.     It is beyond argument that the respondent has the exclusive right to issue postage stamps within Australia (subsection 29(3)).  It is, however, notorious that it does not have an exclusive right to sell postage stamps issued by it so that at the retail level the respondent is in competition with commercial enterprises including licensees and agents in the retailing of postage stamps.

32.     In Hodges v Frost (1984) 53 ALR 373 while discussing the operation of the rule in Griffiths v Kerkemeyer, Kirby J noted in passing (at 381) that commercial agencies will necessarily have an element of profit in their charges. The respondent also submits that a commercial purpose has been interpreted to mean a “purpose relating to trade and the buying, selling and exchange of commodities for profit” (Re Ashley Colter (1970) 10 DLR (3d) 502 at 505).

33.     In supporting its submission, the respondent relies upon its large portfolio of freehold and leasehold property and transactions in relation to those classes of property.

34.     That submission causes me to consider the functions and powers of the respondent.

35. Section 13 of the Postal Act provides that the respondent is a body corporate, has a seal and may sue and be sued in its corporate name.

36. Section 14 of the Postal Act says that the principal function of the respondent is to supply postal services within Australia and between Australia and places outside Australia. Section 15 adds a subsidiary function not relevant for present purposes.

37. Those functions are widened by section 16 of the Postal Act to include any business or activity that is incidental to the functions under sections 14 and 15 and sub-section 16(2) relevantly provides that the functions of the respondent include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried on:

(a)by the use of resources that are not immediately required in carrying out the respondent’s principal or subsidiary function (ie the section 14 and 15 functions); or

(b)in the course of supplying postal services under section 14.

38.     In relation to those functions section 17 provides that the respondent has power to do all things necessary or convenient to be done for, or in connection with the performance of its functions.

39. Section 18 of the Act sets out specific postal and postal related powers in connection with the performance of the respondent’s functions. Section 19 provides that the respondent has all the powers of a natural person and specifies powers by way of example. Those include power to enter into contracts and power to acquire, hold and dispose of real and personal property.

40.     I am satisfied that the respondent was, prima facie, acting within both its functions and its powers when it entered into the contract for sale of the Sandgate Post Office.  It was an activity incidental to the supplying of postal services and clearly within the power to dispose of real property.

41.     Besides the statutory functions and powers the respondent also has statutory obligations which include an obligation to perform its functions in a manner consistent with sound commercial practice (section 26 of the Postal Act).

42. There are also community service obligations in relation to supplying a letter service inside Australia and between Australia and places outside Australia. Those community obligations, as set out in section 27 of the Postal Act, are clearly linked to the reserved services in section 29 of the Act.

43. Section 28 of the Postal Act also imposes obligations on the respondent which might be characterised as corporate governance obligations albeit of limited operation.

44.     The respondent submits in effect that in carrying out its functions and exercising its powers in relation to those functions it conducts its activities on a commercial basis.  This, it submits, is because those activities are carried on in order to make a profit.  The respondent asserts, and I accept, that it is one of the largest property holders in the country (that is ignoring Crown lands including rural leases) and it engages in activities within the property market in order to increase and maximise returns and profits including profits on buying and selling properties.

45.     In relation to whether those activities are in competition with other persons Mr Gray says, and I accept, that the respondent is engaged in the commercial real estate market, on a commercial basis, in competition with persons other than governments and public authorities and so as to increase and maximise returns with a view to making profits.

46.     I also accept that in performing its functions the respondent does not restrict its property transactions to establishing post office and mail handling facilities.  Mr Gray gave evidence about the various factors that influence the respondent’s property transactions.  I accept that the evidence points to a philosophy of property transactions being conducted as an adjunct to the respondent’s primary functions and also conducted for purposes that include increasing the respondent’s profitability.

47.     The applicant submitted in effect that not all of the respondent’s activities were to be characterised as commercial activities as defined. In particular the applicant relies on a decision of the Queensland Information Commissioner in Hansen v Queensland Industry Development Corporation (1996) QAR 265 with particular reliance upon the reasons for decision at paras 19 to 21. 

48.     In so far as the applicant relies on the decisions in Re Geary and Australian Wool Corporation (1984) 7 ALN 312 and Re Political Reference Service (NSW) Pty Ltd and Australian Telecommunications Commission (AAT No 2799, 7 August 1986), I have found those decisions of no assistance in determining the present case.

49.     The applicant submits that the respondent is required to act in a business like manner but that is not to be confused with commercial activities as defined.

50.     I agree with the applicant that consideration of the functions of the respondent is the starting point for determining the character of its activities and in particular whether an activity is a commercial activity as defined. The scope of the activities in performing the functions of the respondent is determined by reference to the powers conferred upon the respondent to carry out its functions (and comply with its obligations).

51.     In my view if the relevant functions performed by the respondent can be properly characterised as commercial activities then it will follow that transactions by the respondent in exercising its powers to carry out those functions will also be commercial activities.

52.     I am satisfied that Post Office activities, whether conducted from a traditional Post Office or from a shop front are commercial activities because they are conducted on a profit making commercial basis in competition with other private retailers.  Clearly some transactions conducted at a Post Office may not be profit-making but the overall impression is one of carrying on business to make a profit.  Selling of stamps for letters is a profit-making undertaking in competition with other retailers who also sell postage stamps, notwithstanding that the respondent has a limited monopoly in respect of the letter service.

53.     The principal purpose of the letter service is to carry within Australia and between Australia and overseas letters that the respondent has the exclusive right to carry.  It is based on the respondent’s exclusive right to carry letters within Australia (section 30 of the Postal Act) but the exceptions to the reserved services in section 30 make it clear that it is only a particular aspect of the postal services where it can be argued that the respondent is not in competition with persons other than governments and public authorities.

54. I am satisfied that the sale of the Sandgate Post Office involved the respondent in exercise of powers within the terms of its functions. In exercising those powers the respondent was engaging in its commercial activities as defined by sub-section 7(3) of the Act.

55.     It follows in my view that the identified documents relating to the sale of the Sandgate Post Office were documents in respect of the respondent’s commercial activities.

56. The consequence is that I am satisfied that sub-section 7(2) of the Act is applicable in relation to the identified documents.

57.     It follows that the decision under review must be affirmed.

I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K L Beddoe

Signed:         Sarah Oliver
  Associate

Date of Hearing  22 July 2004
Date of Decision  22 October 2004

The Applicant appeared in person
Counsel for the Respondent     Mr M Batskos
Solicitor for the Respondent     Mr A Caprakas