State of South Australia (Department of Planning, Transport & Infrastructure) v The Honourable Robert Brokenshire MLC - [2015] SADC 68

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Under Freedom of Information Act)
STATE OF SOUTH AUSTRALIA (DEPARTMENT OF PLANNING, TRANSPORT & INFRASTRUCTURE) v THE HONOURABLE ROBERT BROKENSHIRE MLC
[2015] SADC 68
Judgment of Her Honour Judge McIntyre
1 May 2015
ADMINISTRATIVE LAW - FREEDOM OF INFORMATION
Permission to appeal, and appeal, against part of a Freedom of Information determination of the Ombudsman. Questions of Law - construction of 7 (1)(c), 9 (1), 15 and 16 (1)(a)(iv) of Schedule 1 of the FOI Act
Held: Appeal allowed
Freedom of Information Act 1991 s 40(1); s 19(2)(b); District Court Act 1991 s.242E, referred to.
Santos Ltd v Sanders (1988) 49 SASR 556; Qantas Airways Ltd v Gubbins (1992) 28 NSW LR 26; Griggs v Norris Group of Companies (2006) 94 SASR 126; Victoria Police v Marke (2008) 23 VR at 16; Priebe v SA Police [2007] SADC 119; Attorney-General's Department v Cockcroft (1986) 10 FCR 180; Ipex Information Technology Pty Ltd v Department of Information Technology Services (1997) 192 LSJS 54; Howard and Treasurer of Commonwealth of Australia (1985) 7 ALD 626; Capone v South Australian Police Information Unit [2011] SADC 7; Zeitouneh v SA Police [2015] SADC 34; Harris v Australian Broadcasting Corporation (1983) 50 ALR 551; Konieczka v South Australian Police [2006] SADC 134; ; Re Timothy Robins Thies and Department of Aviation [1986] AATA 141; Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111, considered.

STATE OF SOUTH AUSTRALIA (DEPARTMENT OF PLANNING, TRANSPORT & INFRASTRUCTURE) v THE HONOURABLE ROBERT BROKENSHIRE MLC
[2015] SADC 68

The State of South Australia (the appellant) seeks permission to appeal a decision of the Ombudsman under Freedom of Information Act 1991 (“FOI Act”) dated 30 June 2014. In that decision the Ombudsman varied a FOI determination of the appellant dated 22 August 2013. The proposed appeal is against part of the Ombudsman’s determination; specifically that the appellant release documents 1, 5, 5.1, 5.2, 5.3, 5.4, 7.1, 10, 10.1, 20 and 22. The appellant, being an aggrieved agency, needs permission to appeal and may appeal only on a question of law.[1]
[1] Freedom of Information Act 1991, s40(1)
Background
The respondent, a member of the Legislative Council, applied to the appellant, specifically the Department of Planning, Transport and Infrastructure, requesting access under the FOI Act to:
All reports, briefings, minutes, agendas, analysis or emails held within the department (including emails on the SAGEMS system) whereby the question of toll roads or tolls have been discussed, raised or investigated by any employee within the department.
Names and other identifying information may be removed if it pertains to employees who are not entitled Chief Executive, Deputy Chief Executive or Chief Executive officer.
Time frame: 2012 and 2013 calendar years (to date)
The scope of the respondent’s request was clarified by email dated 17 April 2013 as follows to:
Explore within the time frame whether the department had produced analysis of its own motion, or in response to proposals by stakeholders (I believe for instance SA Road Transport Association had indicated they are willing to accept tolls on trucks but not other vehicles) or alternatively in response to media enquiries.[2]
[2] Exhibit A1, paragraphs 4-6.
The respondent’s application was deemed to have been refused on 14 April 2013.[3] Notwithstanding this on 22 August 2013 an officer of the appellant wrote to the respondent enclosing a table of 28 documents located within the scope of the amended application.[4] All references to document numbers in these reasons reflect the numbering in that table.
[3] Freedom of Information Act 1991, s19(2)(b).
[4] Exhibit A1, Annexure AD3.
On 29 August 2013 the appellant received the respondent’s application for an internal review of the determination under s29 of the FOI Act. The appellant was deemed to have confirmed the refusal of the application on 12 September 2013.[5]
[5] Freedom of Information Act 1991, s29(5).
On 21 October 2013 the Ombudsman wrote to the appellant advising that the respondent had made an application for external review.
The Ombudsman determined the respondent’s application for external review on 1 July 2014. In that determination the Ombudsman granted the respondent access to all documents except:
Document 2 which the Ombudsman determined to be exempt under clause 17(c) of Schedule 1 of the FOI Act.
Document 3 which the Ombudsman determined to be exempt under clause 1(1)(e) of Schedule 1 of the FOI Act
Document 21 which the Ombudsman determined to be exempt under clause 1(1) (b) of Schedule 1 of the FOI Act.
In addition the Ombudsman was satisfied that documents 1 and 5.1 are subject to copyright and accordingly determined that, in accordance with s22(2)(c) of the FOI Act, access should be provided by allowing the respondent the opportunity to inspect those documents.[6]
[6] Ombudsman’s decision, para 47.
On 31 July 2014 the appellant filed a notice of appeal against the determination of the Ombudsman. There was no issue concerning the three documents determined by the Ombudsman to be exempt, namely documents 2, 3 and 21, nor does the appellant challenge the Ombudsman’s determination concerning 14 documents to be released in full, namely documents 4, 6, 7, 8, 9, 11, 12, 13, 14, 15, 16, 17, 18 and 19.
The dispute centres on the remaining 11 documents in respect of which the appellant contends as follows:
· documents 1, 5.1, 5.2, 5.3, 5.4, 7.1, 10.1 and 22 are exempt in full
· documents 5, 10 and 20 are exempt in part.
Permission to Appeal
The appellant seeks permission to appeal on the basis that the appeal raises questions of law regarding the proper interpretation of clauses 7, 9, 15 and 16 of Schedule 1 of the FOI Act. The clauses that are the subject of the appeal provide as follows:
7     Documents affecting business affairs
(1) A document is an exempt document—
……
(c)     if it contains matter—
(i) consisting of information (other than trade secrets or information referred to in paragraph (b)) concerning the business, professional, commercial or financial affairs of any agency or any other person; and
(ii) the disclosure of which—
(A) could reasonably be expected to have an adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency; and
(B) would, on balance, be contrary to the public interest.
9     Internal working documents
(1) A document is an exempt document if it contains matter—
(a)     that relates to—
(i) any opinion, advice or recommendation that has been obtained,     prepared or recorded; or
(ii) any consultation or deliberation that has taken place, in the course of, or for the purpose of, the decision-making functions of the Government, a Minister or an agency; and
(b)     the disclosure of which would, on balance, be contrary to the public interest.
15   Documents affecting financial or property interests
A document is an exempt document if it contains matter the disclosure of which—
(a)     could reasonably be expected to have a substantial adverse effect on the financial or property interests of the State or an agency; and
(b)     would, on balance, be contrary to the public interest.
16 Documents concerning operations of agencies
(1) A document is an exempt document if it contains matter the disclosure of which—
(a)     could reasonably be expected—
(i) to prejudice the effectiveness of any method or procedure for the conduct of tests, examinations or audits by an agency; or
ii) to prejudice on the attainment of the objects of any test,      examination or audit conducted by an agency; or
(iii) to have a substantial adverse effect on the management or     assessment by an agency of the agency's personnel; or
(iv) to have a substantial adverse effect on the effective performance by an agency of the agency's functions; or
(v) to have a substantial adverse effect on the conduct of industrial relations by an agency; and
(b)     would, on balance, be contrary to the public interest.
The appellant contends that the proper application of each of these exemptions requires the consideration of whether disclosure would, on balance, be contrary to the public interest.
The appellant also says that the proper application of each of the exemptions in clauses 7.15 and 16 requires the construction of the phrases included therein, namely:
….’could reasonably be expected to have a substantial adverse effect’ on the business affairs of the agency, on the financial or property interests of the state, or on the effective performance of (sic) the agency of the agencies functions, respectively.[7]
[7] Paragraph 8 of the Appellant's Outline of Argument.
I note however that Clause 7 does not require a “substantial” adverse effect only an adverse effect on business affairs. On the face of it, this is a somewhat lower threshold.
In my view, the appellant’s submission that the appeal raises questions of law is well founded. Those questions of law raise issues of general significance about the purpose, scope and application of clause 7, 9, 15 and 16 of schedule 1. I therefore grant permission to appeal.
The Appeal
The appeal is in the Administrative & Disciplinary Division of the District Court.[8] The appellate jurisdiction of the court on an FOI appeal is covered by Part 6 – Division 2 – subdivision 2 of the District Court Act 1991.
[8] Freedom of Information Act 1991, s4.
The court is not bound by the rules of evidence and may inform itself as it sees fit and allow further evidence or material to be presented. It must act “according to equity, good conscience and the substantial merits of the matter”.[9]
[9] Santos Ltd v Saunders (1988) 49 SASR 556 at 564; Qantas Airways Ltd v Gubbins (1992) 28 NSW LR 26, at 30 and Griggs v Norris Group of Companies (2006) 94 SASR 126.
The court can only depart from the determination made by the Ombudsman if there is a cogent reason for doing so.[10] Under s48 of the FOI Act the agency bears the onus of establishing that the determination made by the agency is justified. In the context of this appeal this means that the appellant bears the onus of establishing that its claims are justified.
[10] District Court Act 1991,s242E.
Under s12 of the FOI Act, the respondent has a legally enforceable right to be given access to the appellant’s documents. His right of access is qualified by the exemptions set out in Schedule 1. His motives in seeking the documents do not matter.[11] There is no limitation upon his use of them once access has been granted. Disclosure to the respondent is disclosure to the world as there are no limits or qualifications the appellant could put upon the use of that the respondent could make of the documents released to him.[12] The possibility of further dissemination is however relevant to the application of the “public interest” test.
[11] Victoria Police v Marke (2008) 23 VR at 16.
[12] Priebe v SA Police [2007] SADC 119.
Appellant’s Contentions as to Error
The appellant contends that, in approaching each of the tests for exemption outlined above, the first premise of the Ombudsman’s determination was the consideration of what he considered to be the then current policy position of the Government and of the Liberal and Family First parties.
The appellant contends that this is an error because the proper application of what “could reasonably be expected to have a substantial adverse effect” requires a judgment as to what are the reasonable, as distinct from irrational, absurd or ridiculous, consequences of disclosure having regard to the objective circumstances;[13] and that the consideration of whether disclosure would be contrary to the public interest involves the objective balancing of the factors relevant to the public interest.[14] The appellant contends that the application of either of these tests therefore does not and cannot depend upon the expression of policies of political figures as expressed from time to time.
[13] Attorney-General's Department v Cockcroft (1986) 10 FCR 180.
[14] Ipex Information Technology Pty Ltd v Department of Information Technology Services (1997) 192 LSJS 54; Re Howard and Treasurer of Commonwealth of Australia (1985) 7 ALD 626; Capone v South Australian Police Information Unit [2011] SADC 7; Zeitouneh v SA Police [2015] SADC 34.
It is said that the Ombudsman in reaching a decision based upon expressions of policy fell into error by concluding that the claims for exemption were “speculative and insufficient to form a reasonable expectation that the specified harm would result from disclosure”. It is also said that the Ombudsman failed to appropriately take into account relevant, objective considerations necessary for the proper application of the tests. The appellant contends that the considerations include the broader inter-governmental context, the need for future contingency planning on the part of the agency and the prudent anticipation and development of policy. Further it is said that even if the expressions of policy from time to time are relevant to a consideration of these tests the Ombudsman failed to take into account that these policies may change from time to time and failed to take into account matters relevant to what could reasonably be expected to have a future substantial adverse effect on the specified matters.
The documents
The appellant states in its outline of submissions that:
A broad description of the documents the subject of this appeal are contained in paragraphs 21 to 28 of the affidavit of Mr Elford. These documents fall broadly into two categories: documents 1 and 3 are reports by Ernst & Young and Parsons Brinckerhoff comprising financial and economic analysis (“the reports”); the remaining documents comprise email correspondence and spread sheets and tables between agency staff, where the data in the reports is either discussed or replicated (‘the ancillary documents’).[15]
[15] Paragraph 16.
Mr Elford describes the Ernst & Young report as including long-term financial analysis and advice. He says that whilst it is difficult to assess its utility over time, the agency requested the analysis for the purpose of long term projects which are expected to be implemented over the next few decades.[16] He describes the Parsons Brinckerhoff reports as containing advice to the Government on expected volumes of traffic on specified routes and the resultant returns to the Government if a road toll was applied.[17]
[16] ExhibitA3, para 24.
[17] Exhibit 3, para 26.
The FOI Act contemplates that in proceedings in this court evidence can be received in the absence of the other party to the appeal. This is expressly provided for in respect of restricted documents in s41 of the FOI Act.
I received one affidavit not served upon the respondent. This was from Andrew Peter Dadswell sworn on 19 February 2015, which annexes the complete and unredacted copy of the documents that are the subject of these proceedings. I have briefly studied these documents and I am satisfied that the description of the documents contained in Mr Elford’s affidavit is accurate.
Document 3, the Parsons Brinckerhoff report, has been included in Mr Elford’s affidavit and the confidential affidavit of Mr Dadswell. The Ombudsman was satisfied that document 3 is exempt under Clause 1(1)(e) of Schedule 1. Whilst the appellant does not seek to appeal that decision it maintains that the document is also exempt under clauses 7, 9, 15 and 16 in the same manner as document 1 the Ernst & Young report.
Both Parsons Brinckerhoff and Ernst & Young advised the Ombudsman that they did not claim any exemption over their reports but Ernst & Young wanted any documents released to be accompanied by an explanatory letter. I do not know what is in that letter but the Ombudsman has provided a copy to the appellant. I infer that it is likely to be some form of disclaimer as to third party reliance.
I accept that the reports and the ancillary documents are documents affecting the business affairs of the agency. Accordingly I am required, under Clause 7(1)(c) of schedule 1 of the FOI Act to consider whether disclosure could be reasonably be expected to have an adverse effect on those affairs or prejudice the future supply of such information to the Government or to an agency and whether disclosure would be contrary to the public interest.
I do not consider that document 1 or document 3 are internal working documents for the purposes of clause 9 of Schedule 1 of the FOI Act but the ancillary documents plainly fall into that category. Accordingly I must consider whether disclosure of those documents would be contrary to the public interest.
Clauses 15 and 16 of Schedule 1 of the FOI Act do not, strictly speaking, relate to the classification of the documents, rather they relate to the effect of disclosure. In clause 15 it is the effect of disclosure upon the financial or property interests of the State, in this case it is contended to be road infrastructure, specifically in the North South Corridor of South Australia. In clause 16, relevantly, it is the effect of disclosure on the effective performance of the agency’s functions in this case identified as the provision of informed advice and policy assistance on and implementation of major road and infrastructure projects together with associated activities. In relation to each clause it is necessary to assess whether disclosure could reasonably be expected to have a substantial adverse effect and whether it would on balance be contrary to the public interest.
Appellant’s Contentions as to Effect of Release
The appellant relies upon the affidavits of Mr Elford[18] and of Mr Buckerfield, sworn on 27 February 2015[19], as to the expected effect of the release of the reports and the ancillary documents.
[18] Exhibit A3 at para 29-35.
[19] Exhibit A4 at para 19-26.
In summary the effects deposed to are as follows:
1Disclosure at large would limit the ability of a third party advisor to provide full and frank advice.
2Any limitations or assumptions that form the basis of the advice may not be fully understood.
3Faced with disclosure at large, professional advice firms may wish to protect their position against third party reliance on the advice and may further qualify or moderate their advice.
4Discussion of external advice within an agency requires confidentiality in order to promote full and frank discussion.
5Confidentiality of advice and discussion of that advice is critical to the integrity, usefulness and quality of the assessment of prospective bids in any competitive tender process or to the analysis of unsolicited proposals.
6Future tenderers might rely on traffic modelling in the disclosed reports resulting in a less robust tender process and possible risk allocation issues.
7Disclosure of information would significantly diminish the Government’s relative bargaining position during any negotiation by creating a perceived base-line and methodology.
The submissions made by the appellant to the Ombudsman as outlined in his reasons for decision are in similar terms to those I have summarised as points 5, 6 and 7 above. The other issues do not appear to have been raised before the Ombudsman.
Could release of the documents reasonably be expected to have a substantial adverse impact?

Whether there is an adverse effect requires an objective judgment as to what are the reasonable as distinct from irrational absurd or ridiculous consequences of disclosure.[20] Whether an impact is “substantial” requires an assessment of gravity. A substantial impact is one that is “sufficiently serious or significant to cause concern to a properly informed reasonable person”.[21]
[20] Attorney-General’s Department v Cockroft (1986) 10 FCR 180.
[21] Harris v Australian Broadcasting Corporation (1983) 50 ALR 551 and Konieczka v South Australian Police [2006] SADC 134; see also Timothy Robins Thies and Department of Aviation [1986] AATA 141.
As I have said there is a difference in the test required under clause 7 to that in clauses 15 and 16. Clause 7 refers to an “adverse effect” whilst clauses 15 and 16 refer to a “substantial adverse effect”. The distinction was not specifically addressed in submissions but it appears to me that the question of whether something causes an adverse effect or a substantial adverse effect is a question of degree with the bar being somewhat lower under clause 7 than in clauses 15 and 16. Nevertheless under each clause it is necessary to consider the reasonably expected consequences of disclosure. The expectation must be based on reason and cannot be fanciful, farfetched or speculative.[22]
[22] Ipex Information Technology Pty Ltd v Department of Information Technology Services (1997) 192 LSJS 54; Searle Australia Pty Ltd v Public Interest Advocacy Centre (1992) 36 FCR 111
The appellant says that the mere fact that toll roads have not been implemented and are not presently being implemented does not render the impacts identified fanciful or farfetched for three reasons.
First the agency is required to properly inform policy development, and be prepared for that policy development in the future. Second, and connected with the first, the relevance of the reports and accordingly the discussion in the ancillary documents remains for the implementation of currently planned and future infrastructure projects for the next few decades. Third, the consideration of the involvement of private entities is a requirement in the course of the agency liaising with the relevant Commonwealth funding entities. [23]
[23] Outline of submissions, para 27.
The respondent on the other hand contends that any potential adverse impact is consequential upon the implementation of tolls, which the major political parties have said they will not implement. The respondent says that for an adverse effect to be reasonably expected there must be a reason to consider that toll roads would be implemented. If there are no such reasons then any ground would be speculative, imaginable or only theoretically possible. The respondent says that accordingly the Ombudsman was required to consider the reasonableness of the expectation of the alleged effect in the light of the information about the policy position of all major political parties as outlined in the Ombudsman’s decision.
The respondent says further that even if there were to be a change in policy in future, implementation of toll roads would take a significant amount of time and that any information in the documents would be likely to be out of date at the time and therefore have limited or no impact. For example, it is said that material and labour prices would have changed from any information contained in the current material and that technology associated with design, implementation and running of toll roads would be different and would affect costings.
I consider that the respondent’s submissions are correct in relation to the link between the likelihood of any adverse effect, substantial or otherwise, upon the future implementation of toll roads and the policy position of major political parties. The effect of disclosure of this material now upon any competitive tender process in the future, in the absence of any stated intention to embark upon such a process, is in my view speculative or theoretical. Likewise the assertion that disclosure now might result in a less robust tender process and affect the Government’s relative bargaining position is hypothetical in the light of the current policy position.
However, it is common experience that policy positions do alter with circumstances. Even if the policy position did not alter a Government might nevertheless wish to have advice on the topic. Further I note that the reports and ancillary documents were prepared in the complex intergovernmental environment referred to in Mr Elson’s affidavit. In those circumstances I accept the appellant’s submission that the agency was required to obtain, consider and discuss professional advice of the kind sought here in order to provide informed advice to Government. I do not consider that it is fanciful or farfetched to expect that disclosure would have an adverse effect upon the obtaining of professional advice and subsequent internal discussions about such advice and the issues in general.
Is disclosure contrary to the public interest?
The assessment of whether disclosure would be contrary to the public interest involves the objective balancing of factors relevant to the public interest. This is an even balancing exercise; there is no presumption in favour of disclosure.[24]
[24] Ipex Information Technology Pty Ltd v Department of Information Technology Services (1997) 192 LSJS 54.
I accept and adopt the factors outlined in the appellant’s written submissions[25] as being general indicators of where the public interest may lie having regard to the documents under consideration in the whole of the circumstances:
28.1The higher the office of the person between whom the communications pass and the more sensitive the issues involved in the communication, the more likely it will be that the communication should not be disclosed;
28.2Disclosure of communications made in the course of development and subsequent promulgation of policy tends not to be in the public interest;
28.3Disclosure which will inhibit frankness and candour in future pre-decisional communications is likely to be contrary to the public interest;
28.4Disclosure, which will lead to confusion and unnecessary debate resulting from disclosure of possibilities considered, tends not to be in the public interest;
28.5Disclosure of documents which do not fairly disclose the reasons for a decision subsequently taken may be unfair to a decision maker and may prejudice the integrity of the decision making process.
[25] Para 28.
The respondent contends that it is in the public interest to disclose this information for the following reasons:
·The general public has an interest in Government held information being accessible;
·There is concern in the community about the implementation of toll roads and disclosure would bring some certainty to the discussions around implementation.
·Roads are an important asset and the public of South Australia has an interest to ensure that the Government is accountable in decision-making and expenditure of public funds.
·Disclosure would provide a contribution to debate on a matter of public concern.
·Some of the material is already public knowledge and disclosure would complete the picture of what is known.
·The public would have the right to participate in and influence the process of Government decision-making and policy formulation.
The appellant’s submissions concerning the public interest issue are summarised in paragraph 30 of its written submissions as follows:
Disclosure of the documents would be contrary to the public interest for six reasons. First, the documents concern the anticipation and development of future policy options. Second, those documents contain confidential financial and economic advice in relation to that policy development, as well as in relation to the implementation of any of the policy options discussed. Third, the advice and discussion relate to matters that, if implemented, would form, in part, the basis of assessing a competitive tender or bid process. Fourth, the documents, insofar as they contain discussion about potential policy options, contain a number of possibilities that may be considered in the future development of policy with respect to infrastructure projects spanning over the next few decades. Fifth, it is necessary to preserve the confidentiality of such discussions to promote the full and frank discussion and development of such policy. Sixth, and finally, the ability of the agency to obtain effective and useful financial and economic advice could be hampered if it is subject to disclosure. (Footnotes omitted)
It can be seen from these submissions that balancing the public interest in these circumstances is difficult. Both parties make valid points in support of their argument and each have identified important matters of public interest. Having carefully considered the matters put to me and the case law to which I have been referred, I consider that the disclosure of the documents would not be in the public interest because of the likely prejudice to the ability of agencies to obtain professional advice and to discuss the development of policy from a range of options in a frank and candid manner.
Conclusion
Accordingly I consider that there are cogent reasons to depart from the Ombudsman’s determination. I make the following orders:
1That the appeal be allowed.
2That documents 5, 5.1, 5.2, 5.3, 5.4, 7.1, 10, 10.1, 20 and 22 are exempt under clauses 7 (1)(c), 9 (1), 15 and 16 (1)(a)(iv) of Schedule 1 of the FOI Act.
3That documents 1 and 3 are exempt under clauses 7 (1)(c), 15 and 16 (1)(a)(iv) of Schedule 1 of the FOI Act.
4That the determination of the Ombudsman ordering the release of documents 1, 5, 5.1, 5.2, 5.3, 5.4, 7.1, 10, 10.1, 20 and 22 be rescinded.
I will hear the parties as to the question of costs.