Department of Innovation, Industry and Regional Development

(1) Application dismissed, following agreement that a mathematical error in the information provided was of no significance.

For the Applicant: Mr M A Adams QC, with Mr S Rowland

1 This application comes before me pursuant to s.50 of the Freedom of Information Act 1982 ("the Act"). It is brought by the applicant, Louise Asher ("Asher") who seeks to review a decision of the Department of Innovation, Industry and Regional Development ("the Department"). The decision of which a review is sought is a decision taken by the Department on 12th November 2004. The decision so taken is one to refuse to Asher access to certain documents, which could be described as parts of one document, on the grounds of exemptions under the Act. The refusal followed a request by Asher for documents relating to the facilitation of investment projects for the financial year 2002-03.

2 I am conscious of the objects of the Act as set out in s.3. I am conscious of the method of interpretation of the Act to be adopted as set out in s.3(2). I am aware of the various authorities, which could be summarised as standing for the proposition that it is proper to give the relevant provisions of the Act that construction which would further, rather than hinder, free access to information, and that the Act is to be interpreted generally in favour of access but not so as to override specific provisions. I am also aware of the proposition that the Department bears the onus of proof in attempting to establish that the documents are exempt documents. I am conscious of various statements made from time to time by those on both sides of Parliament concerning the desirability of there being openness and accountability in Government and by agencies. I have borne the above matters in mind, and have applied them, in coming to a decision in the present case.

3 I am also conscious of the fact that some care has to be taken by me in formulating the wording of this judgment so that details of the information sought are not revealed. I am aware that, should the result be in favour of Asher, I should not render any appeal process effectively useless by "letting the cat out of the bag" in my reasons. Similarly, should the result fall the other way, I should not descend into such detail as to give Asher the information which she seeks, whilst at the same time finding against her.

4 In the present case, counsel who appeared on behalf of Asher had the opportunity to examine what became the document in issue, they having given an undertaking pursuant to s.56(3) of the Act. As I have remarked on previous occasions, when this can be done the conduct of the case becomes very much easier. I have little doubt but that it assisted greatly in having the area of dispute considerably narrowed in this case.

5 Mr Adams QC, with Mr Rowland of counsel, appeared on behalf of Asher. Mr Niall of counsel appeared on behalf of the Department. Oral evidence was received from Mr Ben Foskett, the Chief Executive Officer of Invest Victoria, and from Mr Dermuid McCabe, the Freedom of Information Officer attached to the Department. Each was called on behalf of the Department and was subject to cross-examination. The balance of the material placed before me was introduced by way of the tendering of documents. Very helpful submissions in relation to the law were received from counsel on behalf of each party.

6 In making any findings of fact, I am so doing solely in relation to this application and in order to place it in context. Should there be any dispute between any entity involved in the facilitation of investment process and the Department, the following findings of fact are in no way intended to be determinative of any issue "on the merits". The material received was solely so received for the purposes of the freedom of information process.

7 The Government of the State of Victoria has, as one of its important objectives, a desire to encourage investment in this State. In order to achieve this, and in order to promote job growth, what is described as facilitation is advanced to various entities which may wish to set up business here or establish a new or expanded adjunct to an existing business. The facilitation so provided can be financial or non-financial. In other words, it may be by way of a specific grant of funds. However, the bulk of facilitation provided is by way of other Government assistance. Examples which were given were the adjustment of rail timetables, assistance in dealing with local authorities and the like.

8 I gather that some business entities apply for such facilitation, and others are approached. A database is run by the Department in relation to facilitation. As I understand it, entities seeking facilitation firstly give broad general instructions and information. Later this is condensed by Invest Victoria on behalf of the Department into an electronic form which ultimately becomes the basis of the databank. Thus, it could be said that the information fed into the databank is so fed upon instructions. The information includes the projected capital investment value which the entity seeking facilitation will invest, and the number of jobs which will thus be created. There is also recorded on the electronic form whether or not external release is authorised for the data. In other words, the client manager handling the application records as to whether or not the client, or prospective investor, desires confidentiality or is agreeable to information concerning the application being released.

9 In relation to the general approach adopted by the Department, I accept the evidence of Mr Foskett that, generally, the Department sees it as an advantage to release, if not publicise, details of projected investments and job growth. This assists in creating an image of a job being performed well. I also accept his evidence that, if the client or proposed investor seeks confidentiality, this wish is respected. Thus, in the present case, and as shall be discussed, the Department released information in relation to all entities that consented to this being done.

10 The document concerning which a dispute exists in the present case is an extract or summary obtained from the database. It lists some 165 entities ("the entities") in relation to which the Department states facilitation was afforded in the year under consideration. Previously the information sought to be released was the name of each entity to which such facilitation was allegedly extended, the amount of projected capital investment which the entity would be making, and the projected number of jobs which would thus be created. The request for details of the capital sum to be invested has since been abandoned. Only some of the names and job projections remain in dispute.

11 One of the original grounds for resisting the release of the information was that the task of consulting the 165 entities and obtaining their instructions as to the release would be too time consuming and onerous. Argument concerning this was heard by Senior Member Megay on 24th June last. Without going into the reasons of her detailed ruling, she rejected this argument by the Department and, as a result, contact and consultation with the 165 entities ensued. Some had indicated their preparedness to release information at the time of giving original instructions. At the end of the consultation process, 99 consented to the release of the information (this including 34 who had previously so consented). 42 objected to such release. 4 were not able to be contacted. 20 either did not respond or gave no formal response, in the sense that, for example, they were undecided, or were considering the matter, and then nothing further was heard.

12 Accordingly, the Department has released the information in regard to those 99 entities which consented to or did not object to such a course being adopted. This seems to me to be both sensible and consistent with the stated approach of Mr Foskett. What remains in dispute is the information relating to the remaining 62 entities where there has been either objection taken by them to the release of information or where there has been no, or no formal, response following consultation. In relation to that latter group, I accept that the original instruction of each entity was that external release of the information was not authorised. I should add that there may be some mathematical error in relation to the figures with which I have been supplied. A chart provided by Mr Niall would indicate that information has been released in relation to 99 entities and withheld in relation to 62. That adds up to 161. However, the total number of entities is shown as 165. The difference of 4 may relate to the entities described as uncontactable. As shall be discussed, this apparent discrepancy probably does not affect the ruling which I shall give.

13 Against the above background, I now turn to a summary of the submissions advanced on behalf of the parties. Because of the onus which it bears, the Department assumed the carriage of the action and I shall firstly turn to the case put on its behalf.

14 The submissions advanced by Mr Niall on behalf of the Department could be summarised as follows. As Mr Niall advanced his submissions concerning the exemptions separately rather than globally, I shall deal with them under separate headings.

15 The exemptions relied upon by the Department are those found in s.34(1) and 34(4) of the Act. The Department submits that release of the remaining parts of the document would disclose information which relates to matters of a business, commercial or financial nature and such disclosure would be likely to expose the entities unreasonably to disadvantage within the meaning of s.34(1)(b). Alternatively, such disclosure would expose the Department unreasonably to disadvantage within the meaning of s.34(4).

(a) The Application for Exemption Pursuant to Section 34(1)(b)

16 That the various entities are business, commercial or financial undertakings is admitted. It is also basically indisputable that the information which would be disclosed upon release relates to matters of a business, commercial or financial nature. Thus, the dispute in relation to this exemption revolves around the issue of whether the disclosure would be likely to expose the entities unreasonably to disadvantage. In this regard, it does not have to be established that it is certain or almost certain that disadvantage will result. It only has to be "likely". The word "unreasonably" is related to the balance to be struck between accountability and confidentiality. Reference is also made to s.34(2) of the Act. In assessing whether any disadvantage has been so suffered, it is not simply a question of looking just at the document, but one also looks at what other information can be gleaned from it. In the present instance the release of the document reveals the fact that the entities are proposing to invest in Victoria and that they have sought government assistance. These matters in themselves have the potential to create a disadvantage. Particularly when combined with the further information concerning the number of projected jobs that will be created, this gives competitors valuable information. Large companies in particular (and there are some on the list) take into account a wide range of factors when working out the pricing of goods and the likely pricing of their competitors' goods. The release of such information may act to the disadvantage of an entity that is, for example, intending to purchase additional property into which to expand, or seeking further rental space.

17 In relation to "disadvantage"; the statements made by Young CJ and O'Bryan J in Accident Compensation Commission v Croom [1991] VicRp 72; [1991] 2 VR 322 must be viewed against the background of the facts in that case, which related to an investigator's report and a medical report concerning an injured worker. The disadvantage suffered has to be in the context of the conduct of the business.

18 Those entities which have objected to the release of the information are in a particularly strong position. The information was imparted by them in confidence. There has been consultation with them. They have either maintained their position or now wish that confidence to exist. Those who have not responded may have so failed to do for a variety of reasons including delay, lack of appreciation of the issues and the like. The fact remains that they initially objected to the release of the information, and nothing that has occurred since has changed that position. Confidentiality should also be maintained in respect of them.

19 Further, these entities run a reputational risk. If the information is released against their wishes, and subsequently, for whatever reason, the projected number of jobs is not reached, such entities may be the subject of unfair criticism.

(b) The Application for Exemption Pursuant to Section 34(4)

20 It is common ground that the Department is engaged in trade or commerce. There is also no issue but that the document contains information of a business, commercial or financial nature. The argument centres on whether disclosure would be likely to expose the Department unreasonably to disadvantage. The same submissions are put as to the meaning of the words "likely", "unreasonably" and "disadvantage", save that there is no equivalent to s.34(2) which applies to s.34(4).

21 In relation to the disadvantage suffered by the Department, the attracting of investment to Victoria is a high priority for the Department and the Government. In attracting entities to invest in this state, there is competition both with other states and internationally. In balancing accountability and the need for confidentiality, this is not a situation where full transparency is required. The Department did not blindly accept the need for confidentiality. It consulted with the entities. Some have requested confidentiality and the Department has respected that request. If the information is then released in a situation where the Department has been requested to provide confidentiality and has agreed to this, its ability to attract future investments will be damaged.

22 Further, it is to be remembered that what is being dealt with here is private investment as opposed to public investment. The matter does not concern such things as the building of hospitals or railways. This is relevant to both the issue of full transparency and to the public interest. In the present situation there is a real risk of loss of investment. The evidence of Mr Foskett establishes this. Furthermore, there is adequate scrutiny by the Auditor-General and by the provision of an annual report. If there exists a problem in relation to the wording of the annual report for the relevant year, the releasing of this information does nothing to improve public accountability. The operation of s.50(4) so as to result in release is not warranted.

23 The submissions advanced by Mr Adams and Mr Rowland on behalf of Asher could be summarised as follows. In his submissions, Mr Adams made a more global attack upon the Department's reliance on the exemptions. Therefore I shall not divide this summary under sub-headings as I did with the summary of the submissions advanced by Mr Niall.

24 The central issue is whether the release of the information is likely to expose the entities or the Department unreasonably to disadvantage. "Disadvantage" was described in Croom by O'Bryan J at page 331 as follows:-

"In my opinion, the word "disadvantage" in the context of trade or commerce and information of a business, commercial or financial nature means injury of a financial kind."

25 Whilst "disadvantage" does not have to be proved strictly in terms of dollars and cents, it does not extend, for example, to embarrassment. The argument of the Department based upon damage to reputations is a nonsense.

26 The reporting by government departments to Parliament is of intense public interest. Documents referred to in this regard, and placed before the Tribunal, include the Second Reading Speech upon the introduction of the Freedom of Information (Miscellaneous Amendments) Bill on 11th November 1999; a policy statement dated 11th October 2000 and headed "Insuring Openness and Probity in Victorian Government Contracts"; and a policy document headed "Integrity in Public Life", a document setting out various standards which would be adopted by a Labour Government and which includes a section on freedom of information.

27 Already the application by Asher has flushed out one error in relation to the way the statistics relating to facilitation were recorded in the annual report for the relevant year. The manner of that reporting, particularly in relation to describing new investments as being facilitated and announced as opposed to being projected, is quite misleading and the review by the Auditor-General does not seem to have picked that up. Reference is also made to complaints made by two entities to the effect that they had received no facilitation. This was during the consultation process following the orders of Senior Member Megay. The explanations given in relation to this by Mr Foskett and Mr McCabe were inadequate. Their evidence generally was insufficient to satisfy the burden of proof.

28 In relation to the question of unreasonable disadvantage, "unreasonable" does refer to the balancing exercise that has to be undertaken between the competing factors of public accountability and the need for confidentiality. However, the intention of the legislature as indicated in the Second Reading Speech should be borne in mind. That part of the Second Reading Speech dealing with commercial confidentiality is emphasised in particular.

29 Furthermore, s.34(2)(c) indicates as a consideration "Whether the information could be disclosed without causing substantial harm to the competitive position of the undertaking". Thus, the harm must be substantial. Whilst there is no equivalent sub-section expanding upon s.34(4), the words "unreasonably to disadvantage" must have the same meaning in s.34(4) as in s.34(1)(b). Accordingly, the considerations listed in s.34(2) should also be applied to s.34(4).

30 In addition, it is now some 3 years after the events in question. The expiration of time lends further strength to the arguments in favour of release of the information.

31 It is also emphasised that the document in question is an edited list of innocuous material extracted from a database. Reference is made to the observations of the Full Court of the Supreme Court of Victoria in Director of Public Prosecutions v Smith [1991] VicRp 6; [1991] 1 VR 63 at page 78.

32 In addition to and as part of the above arguments, reliance is placed upon the "public interest override" contained in s.50(4) of the Act.

33 The interpretation urged by the Department is one that effectively equates the perceived need for commercial confidentiality with the "cabinet in confidence" provisions of the Act. This interpretation is not justified or correct, particularly bearing in mind the public government statements which have been made, and the provisions of the Act.

34 Accordingly, the applications for exemption pursuant to s.34(1)(b) and s.34(4) should fail and Asher's application seeking release of the document in full should be granted.

35 In this ruling, I shall deal firstly with the exemption contained in s.34(4) although Mr Niall, in seeking to rely upon the exemptions, firstly turned his attention to s.34(1)(b). I am dealing with the exemptions in this order because, in my opinion and subject to any question arising from the minor discrepancy to which I have referred, I am satisfied that the Department has discharged the burden placed upon it in relation to s.34(4). In those circumstances a ruling in relation to s.34(1)(b) is not required.

36 The parts of the document to which this ruling is directed are the names and projected job numbers of the entities which have not agreed to the releasing of the information. In other words, they are the details relating to entities which initially did not authorise external release of the data and have not resiled from that position or, if there be any, entities that may have initially authorised the release of data but changed their position during the consultation process. I am satisfied that the burden in relation to s.34(4) has been discharged for the following reasons.

37 In the present case there was effectively no argument but that the Department is engaged in trade or commerce. There is no argument but that the relevant information is of a business, commercial or financial nature. In any event, and even if there were no agreement as to this, I am quite satisfied that, in each instance, the requirements have been met.

38 I turn now to whether disclosure would be likely to expose the agency unreasonably to disadvantage. As stated by Mr Niall, the test is one of likelihood rather than of certainty. The relevant definition of "likely" in the Australian Concise Oxford Dictionary is "probable; such as well might happen or be true". In relation to the word "unreasonably", all counsel effectively agreed that the word should be seen in the context of the balancing process between the competing factors of the perceived need for confidentiality and the need for public accountability and transparency on the part of the government, its departments and agencies. I agree with Mr Adams that public government statements and the objects and provisions of the Act are relevant in this regard. In relation to "disadvantage", whilst the submissions of counsel originally were some distance apart, ultimately there was perhaps not much distance between them. As was stated by Young CJ in Croom, "... the information ... must relate to matters of a business nature before exemption can be claimed". In addition, the decision in Croom must be viewed against the background of its own peculiar facts. In the present case, the disadvantage alleged seems to me to be clearly of a business nature. In my opinion, the alleged disadvantage would also be an "injury of a financial kind", to adopt the wording used by O'Bryan J in Croom. The evidence of Mr Foskett, which evidence I accept, is that companies may avoid seeking assistance or avoid investing in Victoria because of the risk that their investment decisions would be prematurely exposed and subject to public scrutiny. The disadvantage, being loss of investment, seems to me to be of a business nature and of a financial kind.

39 I accept the evidence of Mr Foskett in relation to the real risks which exist if information which is of the type under discussion, and which is received in confidence, is subsequently released. It seems to me that this is particularly so if the entity supplying the information specifically does not authorise the release of the information.

40 I accept the propositions put forward by Mr Foskett and submitted by Mr Niall that release of information that an entity is seeking government assistance, and information concerning the number of jobs that may be created if that assistance is forthcoming, carries with it some real risks that such information might be used by competitors to the disadvantage of the entity. That risk has been of no concern to some of the entities. However, others have not authorised the release of the information. If an entity has indicated that it does not authorise the release of the information, which information was given in confidence, and the information is subsequently released, I can well understand that such entity may be reluctant to avail itself of a similar opportunity in the future. I can also understand why other entities, learning of this, might look elsewhere. They might so do as a matter of principle. They are even more likely so to do if the information released carries with it the risk of an advantage to financial competitors.

41 In summary, I accept the evidence of Mr Foskett. I am of the view that disclosure would expose the Department to a disadvantage of a business or financial kind. I am also of the view that this is likely to occur. I understand and accept the logic of the situation as put forward by Mr Foskett and I think that it is indeed likely or probable that, should there be a destruction of trust between the investing entities and the Department, some potential investors will look elsewhere or will not proceed with developments that had been contemplated.

42 Having determined that there is a disadvantage to which the Department is likely to be exposed, I turn now to the word "unreasonably". Counsel are basically in agreement as to the relationship between this word and the relevant balancing exercise which must be performed. Because that balancing exercise also involves elements of public interest, some of the matters which I shall now discuss are also relevant to s.50(4).

43 The various points made by Mr Niall in this regard seem to me to be valid. It is to be borne in mind that what is being considered here is private investment as opposed to public investment. I also accept that, should the information be released, there is a risk of entities being exposed to misleading and unfair criticism. The fact that the entities under discussion have specifically not authorised release of the information seems to me to be relevant when the word "unreasonably" is being considered. On the question of public accountability, the Department is subject to random reviews by the Auditor-General and has obligations in relation to reporting annually. Bearing in mind my earlier findings concerning the real risk of loss of investment in this State, and bearing in mind the matters just mentioned, it seems to me that the balance is quite strongly in favour of the proposition that there is a need for confidentiality, and I have reached this conclusion whilst being fully aware of the objects and provisions of the Act, the relevant second reading speeches, and the various public pronouncements by politicians on either side of the House.

44 Three further matters generally affecting disclosure and the public interest should be mentioned. Firstly, I am of the view that there is some force in the submission of Mr Niall that the Department has already provided a very sizeable sample of the entities that have sought facilitation, and the projected number of jobs thereby created. In every instance where authority has been given by an entity to release the information, it has been so released. I refer again to the evidence of Mr Foskett. The Department wants to be seen to be doing a good job, attracting investment from many well known and substantial companies, and thus also creating jobs. It seems to me that it is taking a perfectly reasonable approach in relation to the information already released and in relation to the request for release generally.

45 Secondly, I do not agree with the argument of Mr Adams concerning s.34(2) and its applicability to s.34(4). Section 34(2) lists some factors which may be taken into account in deciding whether disclosure of information exposes an entity unreasonably to a disadvantage for the purposes of s.34(1)(b). Thus, the sub-section is specifically directed towards the disadvantage that may be suffered by an undertaking, as opposed to by an agency. There is no equivalent sub-section providing assistance as to the interpretation of "unreasonably to disadvantage" in respect of an agency. The legislature opted to omit such a provision. In any event, the sub-section lists factors that may be taken into account in respect of an undertaking or entity. In my opinion it is reading too much into the provisions to say that the disadvantage referred to in s.34(4) must involve "substantial harm". I am not convinced that this is the test which has to be applied.

46 Mr Adams also referred to the passage of time as being a factor in favour of disclosure. Whilst it may often be, I am not of the view that it is an important factor in this case. Firstly, it must be remembered that, although the information was acquired in confidence in the year 2002/03, the disclosure, and any apparent breach of that confidence, would occur now, and, as a matter of principle, could be just as damaging to the environment of trust which the Department understandably sees as desirable as it would have been had it occurred in the relevant financial year. Secondly, the majority of the entities now under discussion are those that recently have taken objection to, or not authorised release of, information as part of the consultation process. Thirdly, some of the projects for which facilitation has been sought or arranged are of a comparatively long term nature. I am not persuaded that the passage of time is a factor of any significance in favour of release.

47 As stated, many of the matters just discussed are also relevant to any possible operation of s.50(4). Wherever the onus of proof might lie in relation to s.50(4), I am of the view that release pursuant to it is not justified in this case. There may be public interest in the reporting by departments to the government, and thus to the people. However, in the present case it seems to me to be in the public interest that the environment of trust between private investors and the Department, and hence the government, not be damaged. It also seems to me to be in the public interest that the Department not be hindered in its attempts to attract private investment to Victoria or encourage expansion by entities already here. I have already referred to several of the factors which I have taken into account as part of the balancing exercise generally and which are relevant to a consideration of the public interest override. I shall not repeat them.

48 In summary, the Department succeeds in its submission that those parts of the document which have not been released are exempt. In other words, where an entity has not expressly authorised release of the relevant information, whether such authorisation be given originally or during the consultation process, the document is exempt. That exemption applies where an entity has not deviated from its initial opposition to release, or has subsequently expressed such opposition. I refer again to the apparent mathematical discrepancy referred to previously. If my assumption in relation to the basis of that discrepancy is correct, and it refers to the uncontactable entities, the ruling would not seem to be affected. If the relevant information in relation to those entities has already been released, no further ruling is required. If it has not, and if the uncontactable entities did not originally authorise release, the information in relation to them is in the same position as that which pertains to the entities which have objected or made no response to consultation. If their initial response was that they did not authorise release, the parts of the document relating to them are exempt. If I have made some error in relation to this apparent discrepancy, I will certainly hear argument in relation to it should that be necessary.

49 Given my ruling in relation to s.34(4), there seems to me to be no need for a ruling in relation to s.34(1)(b). I might say that, for many of the above reasons, I am of the opinion that the exemption was again made out but the situation in relation to s.34(4) seems to me to be more clear cut. Thus, this ruling is based upon it.

50 Subject to the qualification referred to above, the application is dismissed.