Thomas v NSW Office of Liquor, Gaming & Racing - [2010] NSWADT 143

No judgment structure available for this case.

CITATION: Thomas v NSW Office of Liquor, Gaming & Racing [2010] NSWADT 143

DIVISION: General Division

PARTIES:
Applicant:
Stuart Macauley Thomas
Respondent:
NSW Office of Liquor, Gaming & Racing

FILE NUMBER: 095142

HEARING DATES: 10 November 2009

SUBMISSIONS CLOSED: 14 December 2009

DATE OF DECISION:
9 June 2010

BEFORE: Montgomery S - Judicial Member

CATCHWORDS: Freedom of Information - exempt document - Documents containing confidential material – whether legal privilege has pass to a successor of the client.

LEGISLATION CITED: Freedom of Information Act 1989
Administrative Decisions Tribunal Act 1997
Evidence Act 1995
Thoroughbred Racing Act 1996
Thoroughbred Racing Amendment Act 2008

CASES CITED: General Manager, WorkCover Authority of NSW v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84
Keriakes v State Rail Authority of NSW [2003] NSWADT 191 at [38].
Mann v Carnell (1999) 201 CLR 1
McGuirk v University of New South Wales [2007] NSWSC McGuirk v University of New South Wales, University of New South Wales v McGuirk [2009] NSWCA 321
McKinnon v Secretary, Department of Treasury [2006] HCA 45
McMahon v Director General, Department of Fair Trading [2003] NSWADT 164
Re Easdown (1987) 2 VAR 102
Re Gordon Peter Wiseman v The Commonwealth of Australia (1989) FCA 434
Re Maher and the Attorney General's Department (No 2) (1986) 4 AAR 266.
Retravision (NSW) Ltd v Copeland (unreported, 8 October 1997)
Ryder v Booth [1985] VR 869 at 878
Simpson v Director General, Department of Education and Training [2000] NSWADT 134
Starr v Sydney Water Corporation [2010] NSWADT 28
University of New South Wales v McGuirk [2006] NSWSC Vella v Commissioner of Police, NSW Police Force [2009] NSWADT 68 at [13].

REPRESENTATION:
Applicant Representative:
L Clegg, solicitor
Respondent Representative:
A Johnson, solicitor

ORDERS: 1. The decision is set aside in regard to that portion of the Report that concerns legal advice given to the Appointments Panel and in regard to the first sentence of the second last paragraph on page four of the Report. That material is to be released after 28 days from the date of this decision.
2. The decision is otherwise affirmed.

1 The Applicant is the Company Secretary of Harbour Radio Pty Ltd and the Chief Operating Officer of its ultimate parent company, Macquarie Radio Network Limited. Harbour Radio broadcasts radio programs using the name and call sign 2GB.

2 This Application is for review of a decision under the Freedom of Information Act 1989 (the "FOI Act”) to provide a redacted copy of a probity report dated 24 October 2008 ("the Report") drafted by Mr Rory O'Connor. The Report, which is entitled ‘Interim Probity Report - Selection for Racing NSW, details probity issues concerning the appointment of the members of Racing NSW. Racing NSW is a statutory body which, along with the Respondent, regulates the racing industry in NSW.

3 The Report details probity issues that arose with respect to the decision made or conduct of members of a panel (“the Appointments Panel”) appointed pursuant to legislation to nominate board members for Racing NSW.

4 An edited copy of the Report has been provided to the Applicant. The Respondent asserts that the redacted material is exempt from disclosure under clauses 10 and 13 of Schedule 1 to the FOI Act.

Factual background

5 The background is not in dispute. The Applicant has provided the following chronology of events that lead to the application. This involved two separate applications by the Applicant

The first application

6 In November 2008, the Applicant sought access to a probity report regarding Racing NSW. Mr Frank Marzic, an officer with the Respondent, subsequently advised that section 31 of the FOI Act provided for consultation with respect to exemptions under clause 6 of Schedule 1 to the FOI Act. Mr Marzic contacted individuals named in the requested report regarding disclosure of their personal affairs.

7 In December 2008, Mr Marzic provided a redacted copy of the Report to the Applicant‘s solicitors. The reasons given for the redaction were that:

(a) disclosure of some parts of the Report would involve the unreasonable disclosure of information concerning the personal affairs of any person, which is an exemption to disclosure under clause 6 of Schedule 1 to the FOI Act;
(b) parts of the Report contain matters, the disclosure of which would disclose information obtained in confidence, which could reasonably be expected to prejudice the future supply of such information to the Government and it would be contrary to the public interest to disclose it, which is an exemption to disclosure under clause 13 of Schedule 1 to the FOI Act; and
(c) parts of the Report contain matter that would be privileged from production in legal proceedings on the ground of legal professional privilege, which is an exemption to disclosure under clause 10 of Schedule 1 to the FOI Act.

The second application

8 In January 2009, the Applicant applied to the Respondent, pursuant to an FOI request, for a copy of the Report.

9 In February 2009, Mr John Braddock, an officer with the Respondent, again provided a redacted copy of the Report to the Applicant. The redactions from the Report provided by Mr Braddock were identical to the redactions from the Report provided by Mr Marzic and the same reasons were given regarding why certain parts of the Report were redacted.

10 In March 2009, the Applicant requesting an internal review of Mr Braddock's decision. Mr Braddock's decision was affirmed and the Applicant applied to the Tribunal for external review of the decision

Applicable Legislation

11 Section 63(2) of the Administrative Decisions Tribunal Act 1987 (“the ADT Act”) provides:

12 The objects of the FOI Act are set out in section 5 of the Act.

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

14 Section 25(1) of the FOI Act provides, in part, that an agency may refuse access to a document if it is an exempt document.

15 Section 25(l)(a) of the FOI Act provides that an agency may refuse access to a document if it is an exempt document in accordance with one or more of the grounds of exemptions referred to in Schedule 1.

16 Section 25(4)(a) of the FOI Act provides that an agency shall not refuse access to an exempt document, if it is practicable to give access to a copy of the document from which the exempt matter has been deleted.

17 The onus is on the agency to satisfy the Tribunal that its decision was justified: section 61 of the FOI Act.

18 Clause 10 of Schedule 1 to the FOI Act provides:

19 Clause 13 of Schedule 1 to the FOI Act provides:

20 Racing NSW is the governing body for the thoroughbred racing industry in NSW and also exercises certain statutory functions in relation to thoroughbred racing. It is established under the Thoroughbred Racing Act 1996 ("the TR Act").

21 The Thoroughbred Racing Amendment Act 2008 (the "Amendment Act") provided for the Minister to convene an Appointments Panel, whose role was to nominate five people for membership of Racing NSW. Clause 32 of the Schedule to the Amendment Act inserted a new Schedule 9 into the TR Act which provided that, as a transitional measure the Minister could convene an Appointments Panel prior to the Amendment Act being commenced. The Appointments Panel was entitled to exercise its functions as if the Amendment Act had commenced.

22 Clause 33 of the Amendment Act inserted Schedule 2 into the TR Act and dealt with the membership of the Appointments Panel. The Appointments Panel was to include one person of the Minister's own choosing to act as a Probity Adviser to the Panel. Under the transitional provisions, the level of scrutiny for the probity check of persons to be nominated for appointment as new members of Racing NSW was to be determined by the Minister: clause 36 of the TR Act as amended by the Amendment Act. In August 2008, the Minister for Gaming and Racing appointed Deloitte Touche Tohmatsu (“Deloitte”) to be the Probity Adviser for the Appointments Panel process and Mr O'Connor, then a partner in Deloitte, carried out the engagement.

23 The Amendment Act was repealed by the Thoroughbred Racing Further Amendment Act 2008 and the provisions of the Amendment Act which related to the Appointments Panel were never commenced. The Further Amendment Act established a different procedure for the appointment of persons as members of Racing NSW.

24 The relevant Evidence Act 1995 provisions are:

(1) In this Division:
client includes the following:
…
(f) a successor to the rights and obligations of a client, being rights and obligations in respect of which a confidential communication was made.
confidential communication means a communication made in such circumstances that, when it was made:
(a) the person who made it, or
(b) the person to whom it was made,
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.
confidential document means a document prepared in such circumstances that, when it was prepared:
(a) the person who prepared it, or
(b) the person for whom it was prepared,
was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law.”

“118 Legal advice

Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:
(a) a confidential communication made between the client and a lawyer, or
(b) a confidential communication made between 2 or more lawyers acting for the client, or
(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person,
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client."

“122 Loss of client legal privilege: consent and related matters

(1) This Division does not prevent the adducing of evidence given with the consent of the client or party concerned.
(2) Subject to subsection (5), this Division does not prevent the adducing of evidence if the client or party concerned has acted in a way that is inconsistent with the client or party objecting to the adducing of the evidence because it would result in a disclosure of a kind referred to in section 118, 119 or 120.
(3) Without limiting subsection (2), a client or party is taken to have so acted if:
(a) the client or party knowingly and voluntarily disclosed the substance of the evidence to another person, or
(b) the substance of the evidence has been disclosed with the express or implied consent of the client or party.
(4) The reference in subsection (3) (a) to a knowing and voluntary disclosure does not include a reference to a disclosure by a person who was, at the time of the disclosure, an employee or agent of the client or party, or of a lawyer of the client or party, unless the employee or agent was authorised by the client, party or lawyer to make the disclosure.
(5) A client or party is not taken to have acted in a manner inconsistent with the client or party objecting to the adducing of the evidence merely because:
(a) the substance of the evidence has been disclosed:
(i) in the course of making a confidential communication or preparing a confidential document, or
(ii) as a result of duress or deception, or
(iii) under compulsion of law, or
(iv) if the client or party is a body established by, or a person holding an office under, an Australian law—to the Minister, or the Minister of the Commonwealth, the State or Territory, administering the law, or part of the law, under which the body is established or the office is held, or
(b) of a disclosure by a client to another person if the disclosure concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person, or
(c) of a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to the proceeding or an anticipated or pending proceeding in an Australian court or a foreign court.
(6) This Division does not prevent the adducing of evidence of a document that a witness has used to try to revive the witness’s memory about a fact or opinion or has used as mentioned in section 32 (Attempts to revive memory in court) or 33 (Evidence given by police officers).”

25 The documentary evidence comprised:

an affidavit of the Applicant sworn 14 October 2009;

a copy of the Report;

Statement of Frank Marzic dated 14 August 2009 with confidential annexure;

Statement of Rory O'Connor dated 25 August 2009 with confidential annexure;

Statement of Les Vance 21 August 2009 with confidential annexure;

26 Mr Marzic and Mr O'Connor presented oral evidence to the Tribunal and were cross-examined. Neither the Applicant nor Mr Vance were required for cross-examination.

The Respondent’s case

27 The Respondent says that the redacted parts of the Report are exempt because of clauses 10 and 13 of Schedule 1 to the FOI Act.

Clause 10

28 The evidence of Mr Vance is that the Appointments Panel, through its Chair, obtained legal advice in confidence from professional legal advisers. A copy of the advice was circulated to members of the Panel. Mr O'Connor was a member of the Appointments Panel having been appointed by the Minister. The Report of Mr O’Connor contains an extract of that advice. The Respondent says that the disclosure of the full Report would disclose the contents of confidential legal advice prepared by senior and junior counsel for the dominant purpose of providing the Appointments Panel with legal advice and so is covered by section 118 of the Evidence Act.

29 Two questions arise in the present context. First, can privilege continue to be claimed in circumstances where the Appointments Panel, the holder of the privilege, has been dissolved? Secondly, was the provision of the Report to the Minister and from there to the respondent a waiver of privilege?

Can privilege continue?

30 The privilege is that of the client, not of the lawyer. It is not in dispute that the client, the Appointments Panel, no longer exists. The Respondent says that the Appointments Panel’s client legal privilege logically passes to the person who established it and on whose behalf it was carrying out its functions - the Minister.

31 Section 117(1)(f) of the Evidence Act provides that ‘client’ includes ‘a successor to the rights and obligations of a client, being rights and obligations in respect of which a confidential communication was made.’ The Respondent says that the Minister is the logical successor to the Appointments Panel.

32 Ms Johnson contends that there are three possible 'successors’ to the Appointments Panel. There is a fourth alternative, which is that there is no successor and no rights or obligations remain in respect of the advice. Ms Johnson presented submissions in regard to each of these alternatives and submits that the best view is that the Appointments Panel's rights and obligations now rest with the Minister.

33 Ms Johnson submits that under the Amendment Act, responsibility for appointing the new members of Racing NSW rested with the Minister, after the Appointments Panel nominated the members. The formal task of appointing the members of the Appointments Panel also rested with the Minister. The purpose of the Appointments Panel was to advise the Minister and the Minister retained ultimate control over the process. She says that the Minister is therefore the logical successor to the Appointments Panel, in so far as its client legal privilege is concerned.

34 In support of that submission she relies on views expressed by Young J in Retravision (NSW) Ltd v Copeland (unreported, 8 October 1997). In relation to the expression ‘successor’ within the meaning of 117(1)(f) of the Evidence Act his Honour said:

“[I]t seems that the purpose of the legislature was to protect a document that had been prepared under legal professional privilege in the hands of not only the person who paid for it to be produced or who retained the lawyer, but also for all those who were claiming under that person. Again, this tends to support a wide approach as to who is a successor.”

35 Section 122 of the Evidence Act closely aligns with the common law of waiver of legal professional privilege as set out in Mann v Carnell (1999) 201 CLR 1. Mann v Carnell established that privilege would be waived if the disclosure were inconsistent with the confidentiality that the privilege serves to protect. At paragraph [29] Gleeson CJ. Gaudron, Gummow and Callinan JJ stated that:

'Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. … What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large".

36 Ms Johnson submits that the Appointments Panel was a body established by an Australian law and the advice was provided to the Minister of the State or Territory, Administering the law, or part of the law, under which the body is established or the office is held. Accordingly, there was no waiver of privilege as section 122(5)(a)(iv) of the Evidence Act applies.

37 Ms Johnson further submits that there was no waiver of privilege when the Minister forwarded the advice and the Report to the Respondent for record keeping purposes. Both entities plainly represent the Crown and as such are the same entity for the purposes of considering a waiver of privilege. In support of that submission she relies on Mann v Carnell at paragraph [16]. She submits that if the Minister was entitled to see the Report without waiving privilege in it, then there can be no waiver when the Minister provided the Report to the Respondent. In the alternative, she submits that there is nothing inconsistent about the Minister providing the legal advice to the Respondent for filing as ministerial correspondence. It is ordinary public sector practice for agencies to undertake ministerial record keeping in this way. There is nothing about the practice that is inconsistent with the maintenance of privilege.

38 In the alternative to its client legal privilege claim, the Respondent submits that disclosure of the legal advice provided to the Appointments Panel would disclose confidential information and so should not be released.

39 The Respondent further submits that the effect of the Court of Appeal decision in McGuirk v University of New South Wales, University of New South Wales v McGuirk [2009] NSWCA 321 ("2009 McGuirk”) is that the Tribunal has no power under section 63(2) of the ADT Act to grant access to a document which is an exempt document by virtue of clause 10 of Schedule 1 to the FOI Act.

Clause 13

40 In considering a claim for exemption under clause 13(b), the Tribunal must be satisfied that a document contains matter the disclosure of which would (i) disclose information obtained in confidence, (ii) which could reasonably be expected to prejudice the future supply of such information to the agency and (iii) would, on balance, be contrary to the public interest.

41 Ms Johnson submits that in order to establish that information was obtained in confidence the terms of the document in issue, the nature of the information, the purpose for which the information was provided and the circumstances in which it was provided, must be considered: see Ryder v Booth [1985] VR 869 at 878. In Simpson v Director General, Department of Education and Training [2000] NSWADT 134, Deputy President Hennessy concluded that the words ‘obtained in confidence’ in clause 13(b) refer to information obtained under an express or inferred understanding that it would be kept confidential. Ms Johnson submits that confidentiality can be inferred from all the circumstances: Re Gordon Peter Wiseman v The Commonwealth of Australia (1989) FCA 434 per Sheppard, Beaumont and Pincus JJ.

42 The evidence of the Respondent is that information of the type contained in the document was given and received on an implied understanding that it would remain confidential.

43 Ms Johnson submits that in determining whether disclosure of the information would ‘prejudice’ the future supply of such information to the agency, the test is not whether the particular confider whose confidential information is being considered for disclosure could reasonably be expected to refuse to supply such information in future. The test is whether the agency will be able to obtain such information in the future: McMahon v Director General, Department of Fair Trading [2003] NSWADT 164 at [25].

44 The evidence of Mr Marzic and Mr O'Connor is that they expect that disclosure of information of this kind would inhibit people from providing information in confidence to probity advisers in the future. Mr O'Connor gave evidence that he would be unable to effectively perform his role as a probity adviser if he could not assure those he speaks to that their comments would be treated confidentially.

45 The Respondent contends that it is in the public interest that a probity adviser appointed to oversee a particular process is able to perform their role effectively. Ms Johnson submits that this is particularly the case in the context of an industry that is subject to allegations of improper influence and cronyism. She says that the majority of the report has already been released to the Applicant, who can understand the concerns of the probity adviser and the adviser’s recommendations to the Minister. The Respondent contends that it has satisfied the public interest in openness and transparency as far as possible and that there would be little additional understanding achieved by disclosing the confidential comments and identities of those who made them, or the legal advice provided to the Appointments Panel.

Residual discretion

46 In light of 2009 McGuirk, the Respondent invites the Tribunal to find that no ‘residual discretion’ exists and that it may not disclose any part of the document that it finds to be exempt under clause 13 of Schedule 1 to the FOI Act. It is submitted that the better and more harmonious interpretation of the FOI Act and one which is consistent with the logic of the Court of Appeal's orders and part of its reasoning in 2009 McGuirk is that the Tribunal does not have a discretion to grant access to exempt documents.

47 Ms Johnson submits that the Court of Appeal must have implicitly accepted that section 25 does not confer a statutory authority on the Tribunal to release a document that is exempt under clause 10. An agency is entitled to release such a document, and so waive its own privilege. However, in doing so, it relies on its general law powers. The agency is entitled to rely on its prerogative powers to release an exempt document (or, as the Court of Appeal put it, waive its own privilege in a document) because those powers are preserved by section 5(4) of the FOI Act.

48 However, she argues that the Tribunal's powers to disclose exempt documents are more limited. Section 63(2) of the ADT Act requires it to identify a statutory authority to disclose exempt material. As no such statutory authority exists for the disclosure of legally professionally privileged material, the Tribunal has no power under section 63(2) of the ADT Act to grant access to a document that is exempt by virtue of clause 13 of Schedule 1 to the FOI Act.

49 The respondent submits that the Tribunal should decide not to grant access to any part of the document that it finds to be exempt, because it does not have the power to do so.

The Applicant’s case

50 The Applicant submits that the claims for exemption by the Respondent under clauses 10 and 13 of Schedule 1 of the FOI Act are not made out. In any event, he submits that the public interest in the public knowing the detail of probity concerns expressed by Mr O'Connor outweighs the Respondent's claims for exemption under the FOI Act. Accordingly, Ms Clegg, for the Applicant, submits that the Tribunal should exercise its residual discretion and set aside the Respondent's decision to redact parts of the Probity Report. She argues that public knowledge of the probity issues that concerned Mr O’Connor is essential to ensuring accountable and responsible regulation of the racing industry, particularly in circumstances where it is accepted by the Respondent that there is (and was at the relevant time) ‘allegations of improper influence and cronyism’.

Clause 10

51 The Applicant agrees that the issue arises as to whether the redacted ‘matter’ in the Report would be privileged from production in legal proceedings. Ms Clegg contends that one does not get to the question of waiver in the present case because, in circumstances where the Appointments Panel has been dissolved, the asserted privilege no longer exists. Contrary to the submissions of the Respondent, she says that there is no ‘successor’ to the Appointments Panel for the purposes of section 117(1)(f) of the Evidence Act.

52 She says that the Appointments Panel no longer exists because new legislation was specifically enacted to eradicate it. Further, the Further Amendment Act provided that the exercise of any function by the Appointments Panel prior to the commencement of the Act was of no effect. She says that the Further Amendment Act effectively recognised that the apparatus of the Appointments Panel was unworkable and made it defunct. No matter how widely the word ‘successor’ is interpreted, neither the Minister nor the Selection Panel is a true successor. To avoid any doubt, the legislation itself makes clear that any function of the Appointments Panel is of no effect. No rights or obligations survive. Such a function must include the obtaining of a confidential communication for the purposes of sections 117 and 118 of the Evidence Act.

53 She says that the gist of the Respondent's submission is that the Appointments Panel should be treated as a part of the Crown, so as to demonstrate the Minister is the ‘logical’ successor. However, whilst having the character of a statutory body providing advice to the Minister, the Appointments Panel was not, in any relevant sense, part of the ‘body politic’ in the way discussed by the High Court in Mann v Carnell. Indeed, the Appointments Panel was designed to be independent of the body politic. Thus there was a clear and highly relevant distinction between the Appointments Panel and the Crown.

54 Further, the Applicant says that Retravision (NSW) Ltd v Copeland can be distinguished because it involved the passing of ‘rights and obligations’ in the legal sense to the assignee of a mortgage and a receiver. Ms Clegg contends that that has not occurred here. She says that no legal rights that were held or any obligations performed by the Appointments Panel have passed on to the Minister. They have been extinguished by statutory amendment. The Minister might now perform the functions of the Appointments Panel, but that is an entirely different question to satisfying the criteria in section 117(l)(f) of the Evidence Act.

55 Ms Clegg submitted that the notion that the Minister is the ‘successor’ to the Appointments Panel is strained and artificial, with the remaining two possible identified ‘successors’ identified by the Respondent even more so. Accordingly, the Applicant says that no privilege survives.

Clause 13

56 Ms Clegg agreed that it is necessary for the Respondent to establish of each of the three elements to the clause 13(b) exemption: that the information was obtained in circumstances of confidence, that disclosure would prejudice the future supply of such information and disclosure would, on balance, be contrary to the public interest.

57 She submits that on the evidence, with the exception of one, or perhaps two, unidentified persons, confidentiality was not sought, expected nor required by the individuals who had discussions with Mr O'Connor. She further submits that there is no evidence to suggest that Mr O'Connor indicated to any persons that he was ‘obtaining’ the information in confidence. Mr O'Connor made no assurances guaranteeing confidentiality.

58 Clause 13(b) focuses on the conduct of the recipient of the information in the way he or she seeks out or obtains the information. It is not concerned with the objective circumstances that are relevant to determining whether there might be an action in equity for breach of confidence. The Applicant submits that clause 13(b) is directed to the circumstances where Mr O'Connor himself was seeking out information, rather than those circumstances where confidential information has been volunteered by a whistleblower or an informant. Thus, it is necessary that the person seeking the information make clear either expressly or implicitly that the information is being obtained in confidence.

59 The Applicant argues that where no express desire for confidentiality is expressed, or assured, there is no presumption of confidentiality over the information. She submits that the following additional features demonstrate that the information was not obtained in confidence:

(a) no person would reasonably expect information sought by a Probity officer would not be disclosed at some later stage either in a probity report, or through an FOI application. The later disclosure of such information to be expected as an inherent feature of the role of public scrutiny performed by the probity officer;

(b) the information was given by persons in the performance of their public obligations;

(c) all of the persons to whom Mr O'Connor discussed probity of the Appointments Panel process would have known that there were probity issues. On that basis, the individuals must have known that the only possible outcome of bringing probity issues to the knowledge of Mr O’Connor was disclosure to others and, ultimately, the public;

(d) in any event, the names and information supplied by the individuals was disclosed in the Probity Report, to the entire Appointments Panel, the Minister and his staff and the Respondent. Such widespread disclosure and dissemination is entirely at odds with the proposition that the information was obtained (and should be maintained) in confidence.

60 The Applicant also submits that a concern expressed now, after FOI proceedings were commenced, about confidentiality expectations at the time the information was supplied, should have no bearing on whether clause 13(b)(i) applied at the time the information was obtained by Mr O'Connor. The Applicant is unable to test the evidence or even review the statements made by the individuals who supplied the information.

61 The Applicant argues that the confidential nature of the proceedings of the Appointments Panel is not relevant because the communications from the Appointments Panel members to Mr O'Connor that are the subject of the Respondent's claims of exemption were not part of the ordinary 'proceedings' of the Appointments Panel.

62 The Applicant also contends that it appears likely that some of the information contained in the Report is the subject of press reports. Ms Clegg submits that to the extent that the redacted information has been publicly disclosed by Appointments Panel members or has been the subject of media reports, there remains no public interest in the redaction of such information given that it is already in the public domain.

63 To satisfy clause 13(b)(ii) the Respondent must show that disclosure could reasonably be expected to prejudice the future supply of such information to the Government or to an agency. The Applicant submits that public officials and other persons performing public duties have ongoing legal obligations and duties to disclose concerns regarding possible improper influence of public officials, including issues regarding probity and candour. Ms Clegg points to Mr Marzic’s concession that the information in question was given by persons in the performance of their public obligations and/or where they were under a duty to disclose the information. She submits that in these circumstances the disclosure of the probity information can be distinguished from situations were a member of the public provides information in the nature of 'whistleblower' or 'dob-in' information. She points to Re Easdown (1987) 2 VAR 102 as authority for the proposition that persons providing information in regard to an investigation, or in regard to a probity process, would expect that the information would be used. She says that in such cases there is a public interest in protecting confidences so that members of the public feel confident in disclosing such information and the public is encouraged to come forward in the future. The same cannot be said for persons providing information in the exercise of their public duties.

64 The Applicant submits that there is unlikely to be any prejudicial impact at all on the ability of probity officers in the future to obtain candid information from persons who are intimately connected with the probity inquiry and who are also performing duties at the same time. Ms Clegg argues that disclosure of the material could not satisfy the requirement in clause 13(b)(ii) of Schedule 1 that disclosure could reasonably be expected to prejudice the future supply of similar information.

65 To satisfy clause 13(b)(iii) the Respondent must show that disclosure would, on balance, be contrary to the public interest. The Applicant argues that the Appointments Panel was intended to play a critical part of maintaining the integrity of the overall apparatus of Racing NSW. Ms Clegg says that there is significant public interest in the mechanism of appointment of persons to Racing NSW. Where probity issues are revealed concerning the discharge of such appointments, there is an overarching public interest in the public being aware of those concerns.

66 The Applicant says that the lack of probity identified by Mr O'Connor was sufficiently serious for the NSW Parliament to pass new legislation abolishing the Appointments Panel and giving the Minister almost total control over the appointments to Racing NSW. Yet the public has been left entirely in the dark as to why that occurred. Ms Clegg argues that disclosure of the information will give the public greater confidence in the operation of the executive function of the government and future processes for the appointment of members of Racing NSW. Further, disclosure of the information is likely to encourage current and future Selections Panel members to comply with relevant probity standards and legal obligations.

67 Ms Clegg submits that the particular circumstances of this case - the acceptance by both parties that there are concerns held by both the government and the public about probity in the racing industry, and the fact that the report of Mr O'Connor led to a complete re-regulation of the basis upon which the members of Racing NSW were appointed - requires the residual discretion to be exercised in favour of the Applicant. She says that the information in question is quintessentially the type of information that the FOI Act is designed to make public.

Residual discretion

68 The Applicant disputes the Respondent’s arguments in regard to the Court of Appeal decision in 2009 McGuirk.

69 Contrary to the submissions of the Respondent, Ms Clegg argues that the Court of Appeal did not implicitly consider whether section 25 of the FOI Act conferred the requisite statutory authority. She says that section 25 of the FOI Act is the statutory source for the original decision maker (or administrator) to refuse access to an exempt document in the case of documents that are exempt under clause 13 of schedule 1. Under section 25(l)(a) an agency may refuse access to a document. A discretion to refuse on the part of the administrator is thereby created. She says that if there is discretion in the administrator to refuse access, there is clearly discretion to grant access to an exempt document.

70 Ms Clegg submits that the discretion to grant access to a document that is classified as an exempt document under the FOI Act is discretion to be implied from the plain words of section 25(l)(a), and not something that operates outside and in isolation from the FOI Act regime.

71 Ms Clegg argues that 2009 McGuirk merely recognises, and places importance upon that fact that the exemption referred to under clause 10 of Schedule 1 to the FOI Act derives from the general law. It explicitly holds that that a waiver of such privilege can only occur under the general law. It says nothing about section 25 of the FOI Act. She refers to the fact that the Court of Appeal expressly declined to address the question of whether there was a residual discretion in the terms described by Nicholas J in University of New South Wales v McGuirk [2006] NSWSC 1362 and submits that this is sufficient to dispose of the Respondent's contention that the effect of the decision is to remove the residual discretion. She says that the decision in 2009 McGuirk does not explicitly address, nor implicitly provide any guidance to the lengthy and comprehensive consideration of this issue by Nicholas J.

72 Ms Clegg further argues that the decision of Associate Justice Harrison in McGuirkv University of New South Wales [2007] NSWSC 806 at [34] expressed the view that the obligations under section 63 of the ADT Act were clarified in the decision of Nicholas J. The observations and findings of Associate Justice Harrison in that case were not obiter. Thus, the Tribunal is bound to follow the current approach of the Supreme Court, as outlined by Nicholas J University of New South Wales v McGuirk [2006] NSWSC 1362 and by Associate Justice Harrison in McGuirkv University of New South Wales [2007] NSWSC 806. She submits that those principles are authority for the proposition that the discretion ought to be exercised so far as possible in favour of disclosure.

Discussion

73 The Respondent has asserted that the redacted portions of the Report are exempt pursuant to either clauses 10 or 13(b) in Schedule 1 to the FOI Act. For the reasons argued by the Respondent, it is my view that part of the redacted material is exempt pursuant to clause 13(b) of Schedule 1 to the FOI Act. However, for the reasons argued by the Applicant, I do not agree that the asserted clause 10 exemption is made out.

Clause 10

74 It is common ground that part of the redacted material in the Report concerns legal advice obtained on behalf of the Appointments Panel and as such is the type of material that would normally be privileged from production in legal proceedings. It is not in dispute that the privilege is that of the client, not of the lawyer. In General Manager, WorkCover Authority of NSW v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84 McColl JA (with whom Handley JA and Hodgson JA agreed) said at [67] – [68]:

Daniels Corporation International Pty Ltd and Anor v Australian Competition and Consumer Commission

Esso Australia Resources Ltd v Commissioner of Taxation

75 It is not in dispute that the Appointments Panel no longer exists. The question is raised as to whether its client legal privilege has passed to ‘a successor to the rights and obligations of a client, being rights and obligations in respect of which a confidential communication was made’: section 117(1)(f) of the Evidence Act.

76 The Respondent says that the Minister is the logical successor to the Appointments Panel. The Applicant says that there is no successor.

77 The Appointments Panel was brought into existence to perform a function at arms length from the Minister. It is not in dispute that the Further Amendment Act provided that the exercise of any function by the Appointments Panel prior to the commencement of the Act was of no effect. In my view, Parliament has acted to remove any rights or obligations that previously resided with the Appointments Panel. Parliament has not provided for the transfer of those rights and obligations. In the circumstances I do not agree that it can be implied that Parliament intended that the rights and obligations that previously resided with the Appointments Panel transferred to the Minister. No legal rights that were held or any obligations performed by the Appointments Panel have passed on to the Minister. I agree with the argument of the Applicant referred to in paragraphs [52] to [54] above. The Respondent has not suggested that there is any other logical successor to the Appointments Panel. That being the case, it is my view that this is one of the rare occasions in which there is no successor to the client.

78 As there is no client to whom the legal privilege that previously resided with the Appointments Panel has passed, the clause 10 exemption cannot be made out. No privilege survives. The issue of waiver of privilege therefore does not arise.

Clause 13

79 As noted, the Respondent has asserted that the redacted portions of the Report are exempt pursuant to either clause 13(b) in Schedule 1 to the FOI Act. The Respondent has asserted that legal advice provided to the Appointments Panel also falls within this exemption as its disclosure would disclose information obtained in confidence and should not be released.

80 I have considered the clause 13(b) exemption most recently in the matter of Starr v Sydney Water Corporation [2010] NSWADT 28. In Starr I accepted Sydney Water’s submission in regard to the clause 13(b) exemption. Those submissions were summarised at paragraphs [82] to [85]:

82 In order for a document to be an exempt document under clause 13(b) of the Act, Sydney Water must satisfy the Tribunal that the documents contain information the disclosure of which:
- would disclose information obtained in confidence; and
- could reasonably be expected to prejudice the future supply of such information to Sydney Water; and
- would, on balance, be contrary to the public interest.

83 In order for an agency to satisfy the Tribunal that information was obtained in confidence, it is not necessary to show that there was an express obligation or understanding that the information was given in confidence. It is sufficient for this to be implied from the circumstances in which the information was obtained or given: Vella v Commissioner of Police, NSW Police Force [2009] NSWADT 68 at [13].

84 For clause 13(b) to apply it must also be established that the future supply of such information could reasonably be expected to be prejudiced. Reasonableness must be decided taking into account any relevant evidence that is before the decision-maker and any relevant arguments that have been advanced: McKinnon v Secretary, Department of Treasury [2006] HCA 45 per Hayne J at paragraph [63]. The word 'prejudice' should be given its common, dictionary meaning - that is 'to cause detriment or disadvantage': Re Maher and the Attorney General's Department (No 2) (1986) 4 AAR 266.

Keriakes v State Rail Authority of NSW

Keriakes

81 For the reasons argued by the Respondent, I am satisfied that the redacted material is information obtained in confidence. I accept Ms Clegg’s argument that there was no express obligation or understanding that the information was given in confidence. I note that Ms Clegg’s arguments in relation to the circumstances in which the information was obtained or given were made in the absence of any knowledge of the contents of the redacted material. However, it is apparent from the redacted material that the circumstances in which the information was obtained or given were such that it should be implied that the information was obtained in confidence. I include the legal advice in this category.

82 For the most part, I also agree with the Respondent that release of the information could reasonably be expected to prejudice the future supply of such information. With the exception of the legal advice, the redacted information is not the type of information that the provider would be obliged to provide. In my view, it is unlikely that the information would have been provided if the provider knew that it might be released pursuant to an FOI request. In the circumstances of a relatively small industry, I accept that disclosure of the information could reasonably be expected to prejudice the future supply of such information.

83 I do not agree that disclosure of the legal advice could reasonably be expected to prejudice the future supply of such information. This is one of the rare occasions in which there is no successor to the client. It is unlikely that an agency would not be able to obtain legal advice when it is sought in the future, because privilege will almost always survive.

84 It is my view that the clause 13(b) exemption has not been made out. Accordingly, that part of the redacted material which concerns the legal advice should be released.

85 I note that the information contained in the first sentence of the second last paragraph on page four of the Report is publicly available information. It should therefore be released.

86 For the reasons argued by the Respondent, I am also satisfied that disclosure of the redacted material that I have found to be exempt would, on balance, be contrary to the public interest. It is in the public interest that a probity adviser appointed to oversee a particular process is able to perform their role effectively. Disclosure of the exempt redacted material would impinge on that process.

87 As it is my view that on balance, it would be contrary to the public interest to release the exempt redacted material, it is unnecessary that I consider arguments regarding whether or not the Court of Appeal decision in 2009 McGuirk affects the Tribunal’s power to order release of a document found to be exempt. In any event, that there are no strong grounds to support the release of the material that has been found to be exempt. In my view, the correct and preferable decision is that the exempt material should not be released.

Order

1. The decision is set aside in regard to that portion of the Report that concerns legal advice given to the Appointments Panel and in regard to the first sentence of the second last paragraph on page four of the Report. That material is to be released after 28 days from the date of this decision.

2. The decision is otherwise affirmed.

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Citations

Thomas v NSW Office of Liquor, Gaming & Racing [2010] NSWADT 143

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Diehm v Greater Taree City Council [2010] NSWADT 241

Cases Citing This Decision

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Diehm v Greater Taree City Council [2010] NSWADT 241

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12

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5

Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64

McGuirk v University of New South Wales; University of New South Wales v McGuirk [2009] NSWCA 321

CITATION:	Thomas v NSW Office of Liquor, Gaming & Racing [2010] NSWADT 143
DIVISION:	General Division
PARTIES:	Applicant: Stuart Macauley Thomas Respondent: NSW Office of Liquor, Gaming & Racing
FILE NUMBER:	095142
HEARING DATES:	10 November 2009
SUBMISSIONS CLOSED:	14 December 2009
DATE OF DECISION:	9 June 2010
BEFORE:	Montgomery S - Judicial Member
CATCHWORDS:	Freedom of Information - exempt document - Documents containing confidential material – whether legal privilege has pass to a successor of the client.
LEGISLATION CITED:	Freedom of Information Act 1989 Administrative Decisions Tribunal Act 1997 Evidence Act 1995 Thoroughbred Racing Act 1996 Thoroughbred Racing Amendment Act 2008
CASES CITED:	General Manager, WorkCover Authority of NSW v Law Society of NSW (2006) 65 NSWLR 502; [2006] NSWCA 84 Keriakes v State Rail Authority of NSW [2003] NSWADT 191 at [38]. Mann v Carnell (1999) 201 CLR 1 McGuirk v University of New South Wales [2007] NSWSC McGuirk v University of New South Wales, University of New South Wales v McGuirk [2009] NSWCA 321 McKinnon v Secretary, Department of Treasury [2006] HCA 45 McMahon v Director General, Department of Fair Trading [2003] NSWADT 164 Re Easdown (1987) 2 VAR 102 Re Gordon Peter Wiseman v The Commonwealth of Australia (1989) FCA 434 Re Maher and the Attorney General's Department (No 2) (1986) 4 AAR 266. Retravision (NSW) Ltd v Copeland (unreported, 8 October 1997) Ryder v Booth [1985] VR 869 at 878 Simpson v Director General, Department of Education and Training [2000] NSWADT 134 Starr v Sydney Water Corporation [2010] NSWADT 28 University of New South Wales v McGuirk [2006] NSWSC Vella v Commissioner of Police, NSW Police Force [2009] NSWADT 68 at [13].
REPRESENTATION:	Applicant Representative: L Clegg, solicitor Respondent Representative: A Johnson, solicitor
ORDERS:	1. The decision is set aside in regard to that portion of the Report that concerns legal advice given to the Appointments Panel and in regard to the first sentence of the second last paragraph on page four of the Report. That material is to be released after 28 days from the date of this decision. 2. The decision is otherwise affirmed.