Australian Postal Corporation v Johnston

The Decision of the Tribunal 11 At [1], the Tribunal recognises that Australia Post's refusal of access to the list was made on the contended ground that Australia Post is exempt from the operation of the Act in respect of the list by force of s 7 of the FOI Act. At [16], the Tribunal notes that the issue for determination was whether the list is a document in respect of the commercial activities of Australia Post for the purposes of s 7. At [18], the Tribunal notes that this question is concerned wholly with statutory interpretation informed by principles of statutory interpretation derived from the objects of the FOI Act recited in s 3 but also having regard to 'various provisions of the APC Act in relation to the effect of Australia Post's "reserved services" and its "commercial activities"'. At [19], the Tribunal notes that Australia Post took the position before the Tribunal that it did not intend to argue the relevance of any specific exemption under Part IV 'Exempt documents' of the FOI Act in attracting a ground of exemption for the list. 12 The sole question to be determined was whether the document was one in respect of Australia Post's commercial activities. 13 In making the observation at [19], the Tribunal was not recording an election on the part of Australia Post to abandon any contention that the list might be susceptible of exemption pursuant to Part IV of the FOI Act. Rather, the Tribunal was acknowledging the position recorded in the transcript that for the purposes of the application before the Tribunal no question going to Part IV was alive. At AB95, line 25, Mr Batskos for Australia Post described the question for consideration as '… actually quite a narrow one. It has a very narrow compass and it is generally, I think, able to be described as one of strictly being a pure statutory interpretation type question'. 14 At AB96, lines 10 to 16, Mr Batskos said, 'So the question for determination, therefore, is whether the document that is sought by the applicant is a document in respect of the commercial activities of Australia Post. That really is the sole question for determination today'. At AB97, lines 15 to 36, Mr Batskos further identified the narrow focus of the question in issue and the three questions to be answered in the resolution of the narrow question. The questions put to the Tribunal for resolution were, 'Does Australia Post carry on activities on a commercial basis?'; 'Are those activities carried on in competition with persons?'; and 'Was the document received or brought into existence in the course of or for the purposes of the carrying on of those activities?' 15 At AB97, the Tribunal asked Mr Batskos whether, if those questions were answered in the negative, did Mr Batskos wish to deal with s 41 and contend that the documents would be otherwise exempt? Mr Batskos responded at AB98, line 7, that Australia Post, '… would consider that that would require a further hearing by the Tribunal and evidence being filed and dealing with that …'. Mr Batskos said at AB98, line 16, 'Strictly speaking it's just the section 7 issue. … And the idea was to not unnecessarily prepare material if that issue can be resolved by this preliminary question, if you like'. 16 Having framed the question to be resolved in the way described, the Tribunal dealt with the matter in the following way. The Tribunal received evidence from Mr Keen, the National Manager for Australia Post responsible for 'Licensed Post Office Policy and Procedure'. At [7], the Tribunal notes Mr Keen's evidence that LPOs are commercial entities which operate under contractual arrangement with Centrelink for the provision of services and products some of which are mandatory and others are provided at the election of the licensee. 17 Mr Keen gave evidence that there are approximately 3,000 LPOs operating in Australia; mandatory products involve postage stamps, pre‑stamped envelopes and aerograms; mandatory services include money orders, reply paid postal services, change of address, registered post, bill payment services, certain banking services and other services; these products and services are provided under licence between Australia Post and the licensee; other products and services can at the election of the licensee be provided and sold to the public; non‑Australia Post products and services can be marketed, displayed and stocked on the premises of LPOs unless they compete with particular nominated products and services of Australia Post; Australia Post acts as a wholesaler to LPOs of non‑mandatory products; licensees provide additional optional postal services apart from mandatory services [8] - [12]. 18 At [13], the Tribunal notes that optional services provided by Australia Post are provided either through corporate post offices or LPOs in direct competition with the private sector. These services include bill payment services, banking agency services, post office boxes and private or locked bags in competition with private post box services, document exchange services, parcel post and express post services and recharge credit services for mobile phones in competition with retailers. At [14] and [15], the Tribunal notes: 14. In terms of the proportion of business contributing to Australia Post's profit, Mr Keen stated that for the financial year ending 30 June 2005, approximately 25% of Australia Post's profit was derived from its core business of postal services as authorised by the Australian Postal Corporations Act 1989 (the 'APC Act') (that is, its reserved services) while 75% of its profit is derived from commercial activities. 15. In relation to the information sought by the applicant, Mr Keen stated that the information kept on its list of LPOs was maintained for a number of purposes and functions. These include the reimbursement of fees and commissions to LPOs; to supply products requested by LPOs; to communicate changes of products and services with current licensees. His evidence was also that this list changes constantly and that 30 to 40 of these licensees change each month. 19 At [30], the Tribunal determined that a 'commercial activity' could be regarded as an activity which reflects 'a business venture with a profit making objective and, strictly speaking, would involve activity to generate trade and sales with a view to profit'. At [32], the Tribunal concluded that, 'The size of the Australia Post operation described by Mr Keen in his evidence and in his affidavit could undeniably be said to fit within the definition of "commercial activity". Therefore, I find that Australia Post does carry on some of its activities on a commercial basis'. The Tribunal observed that the reserved letter service is not a commercial activity of Australia Post. At [33], the Tribunal noted the contention of Australia Post that competition necessarily involved interaction in a market 'where the behaviour of those participating is motivated by maximising exchange of goods and services and differentiating products and sources of supply'. 20 At [34], the Tribunal observed: 34. Examples of products and services offered were stationery items, computer consumables, packaging materials, bill paying services, and parcel accepted services. These examples are by no means exhaustive. However, profit making is central to the operation of Australia Post and LPOs in their provision of these goods and services. I accept that the examples given are convincing evidence that Australia Post and LPOs compete with private sector bodies. I therefore find that Australia Post is engaged in activities which are "in competition with" private sector bodies. 21 The Tribunal then considered whether the list was brought into existence 'for the purposes of' the carrying on of commercial activities thus found to be in competition in a contestable market with other supply side substitutes. At [36], the Tribunal noted the evidence of Mr Keen that the list of LPOs was created and maintained to enable Australia Post to: (a) pay LPOs the fees and commissions built into the LPO network in respect of the products and services provided by LPOs; (b) market new products and new services which are non-mandatory and which are available from the Australia Post approved range; (c) be able to notify current LPOs of changes in product; (d) be able to communicate with LPOs generally as part of the management of the LPO network including, for example, sending the licensee bulletin providing update information. 22 Those purposes and functions described by the Tribunal at [36] derived from the evidence of Mr Keen particularly at paragraphs [21] to [29] of his affidavit sworn 8 December 2005. The conclusion the Tribunal reached concerning the purposes for which the document was brought into existence is described in terms of the functions the document was to serve. At [38], the Tribunal said this: 38. In considering the submissions made by the respondent, I accept that the document which contains the information sought was brought into existence and is maintained at least to undertake the four functions mentioned in paragraph 36(a) to (d) above. 23 The use of the term "functions" is synonymous with purposes. The reference to maintaining the document or list is a reference to the evidence of Mr Keen that the list is regularly updated with 30 to 40 changes each month. The reference to the term "at least" is a recognition that one of the functions or purposes for bringing the list into existence and bringing a new list into existence each month reflecting the monthly changes is to undertake the four functions of "carrying on" the contestable commercial activities. The reference to the term "at least" must be taken to be a conclusion reached by the Tribunal that there are a number of purposes influencing the bringing into existence of the list. 24 At [39], the Tribunal addresses 'one further matter which needs to be considered' which seems to be a reference to one further purpose or function that needs to be considered. That consideration 'pertains to the fact that the corporate post offices and LPOs carry out a concurrent function of providing a "reserved service" and "commercial activities" as provided by the APC Act'. [39] The question said to emerge from a recognition of concurrent functions was whether the concurrent function 'impinge[s] upon the purpose of the document sought and does it affect any exempt status under the Act'. [39] 25 In examining the extent to which the provision of a 'reserved service' informs the purpose, on the evidence, for which the list was brought into existence, the Tribunal considered questions of construction of the provisions of the APC Act. The Tribunal's reasoning goes along these lines. 26 In construing the FOI Act and its conjunction with the APC Act, a construction that promotes the underlying object of each Act is to be preferred to one that would not promote those objects. The APC Act is the present derived expression of the exercise of Commonwealth exclusive legislative power for 'postal and telecommunications services'. The APC Act confers on Australia Post a 'principal' function, a 'subsidiary' function and an 'incidental business or activity' function. The principal function is 'to supply postal services within Australia and between Australia and places outside Australia' (s 14, APC Act). A subsidiary function is 'to carry on, outside Australia, any business or activity relating to postal services' (s 15, APC Act). 27 Section 16 provides that the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is incidental to supplying postal services under s 14 or the carrying on of any business or activity under s 15. Section 16(2) makes it clear that, 'the functions of Australia Post include the carrying on, within or outside Australia, of any business or activity that is capable of being conveniently carried on by the use of resources that are not immediately required in carrying out Australia Post's principal or subsidiary function; or in the course of supplying postal services under s 14 or carrying on any business or activity under s 15. 28 By s 27 of the APC Act, Australia Post has an obligation to perform its functions, as far as practicable, in a manner consistent with sound commercial practice. By s 29 of the APC Act, Australia Post has reserved to it the exclusive right to carry letters within Australia; the collection within Australia of letters for delivery within Australia; the delivery of letters within Australia; and the exclusive right to issue postage stamps within Australia. 29 Section 30 of the APC Act sets out a range of matters which are expressly excluded from the reserved services described in s 29. Because the APC Act reserves certain services to Australia Post exclusively coupled with a community service obligation expounded by s 27 of the APC Act, ss 29 and 30 of the APC Act are said to create a statutory right in members of the public and a corresponding statutory obligation on Australia Post. Although the content of these rights and obligations is not entirely clear, presumably the statutory right is said to be a right of access to the reserved services. 30 The next limb of the argument is that non‑reserved services create no statutory rights. Non‑reserved services 'are merely the commercial arm of Australia Post', and are 'provided alongside the postal services as specified in Sections 14 to 16'. [50] Because reserved services are non‑commercial activities [55] and are not carried on in competition in the relevant sense, a document brought into existence in part for the purposes of commercial activities but also in part for the purposes of the provision of non‑contestable reserved services in fulfilment of the contended statutory obligation, gives rise to an entitlement in Mr Johnston [56]: … to be granted access to information on the list which relates to reserved services (which coincidentally is the same information as that which applies to commercial activities) although he should not be entitled to information where personal details are involved or which would only be relevant to the commercial activities which Australia Post undertakes with the LPOs. [emphasis added] 31 Australia Post contends that the Tribunal has fallen into error by equating postal services provided by Australia Post with simply its 'reserved services' and therefore distinct from commercial activities. The field of reserved services is expressed narrowly by s 29 of the APC Act and further narrowed by s 30. Although the Tribunal uses the term 'postal services', it seems to use that term in a definitional sense as meaning the core business of reserved services [14]. 32 If the term is used in any broader sense, it would comprehend both reserved services and some non‑reserved commercial services and thus any distinction between such postal services as non‑commercial on the one hand and other activities as commercial, would be misplaced. The APC Act describes the principal function of Australia Post as one of supplying postal services. Within those postal services there are reserved services which are to be exclusively supplied by Australia Post and that exclusion is reinforced by the action for infringement contemplated by s 31 of the APC Act. The field of exclusively reserved services within the field of postal services is further limited by s 30 of the APC Act. The Tribunal concludes that the reserved services are delivered as a service to the public as a whole and are not necessarily profit making [52] and thus not within the field of 'commercial activities'. 33 Therefore, it can be seen based upon the Tribunal's analysis of the statutory provisions that the Tribunal has concluded that the list serves two masters and thus has been brought into existence for the purposes of the commercial activities of Australia Post and the further purpose of discharging a statutory obligation in respect of reserved services. Accordingly, the Tribunal has sought to segment information contained within the document and make information serving the reserved services obligation available to Mr Johnston. 34 The difficulty with this approach is that it fails to address the question to be asked by s 7 of the FOI Act and which was the question to be determined before the Tribunal. Even if it be accepted that the proper characterisation of the provisions discussed by the Tribunal results in a statutory right and a corresponding statutory obligation finding its foundation in the Australian Constitution, the conclusion that the Tribunal has inevitably reached is that the document, by force of the two classes of information within it; the finding that 75% of Australia Post's revenues derive from commercial activities; and that the document was brought into existence to undertake the four functions or purposes forming a part of carrying on the commercial activities of Australia Post, was brought into existence for a purpose of carrying on the commercial activities of Australia Post and that such a purpose was a substantial purpose. 35 The notion that the purpose of carrying on the commercial activities of Australia Post was a substantial purpose can be seen from the emphasis in the findings contained at [36], [37] and [38] and the consequential consideration of one further matter derived from the concurrent function. The findings of the Tribunal do not suggest nor can they be consistent with a finding that such a purpose was at the margins or inconsequential. 36 The sole question to be determined by the Tribunal was whether the list is a document in respect of Australia Post's commercial activities by determining whether the document was brought into existence in the course of or for the purposes of the carrying on of those activities. That test required the Tribunal to determine, on the evidence, the purposes for which the list was brought into existence; whether there was one or more purposes and if more than one purpose including a purpose of carrying on Australia Post's commercial activities, whether that purpose was a substantial purpose. 37 The Tribunal inferentially found that such a purpose subsisted and was a substantial purpose although there is no express finding to that effect. 38 Other evidence was before the Tribunal which supported the pervasive nature of the commercial purpose influencing the bringing of the list into existence. Some of that evidence has already been mentioned concerning Australia Post's contractual arrangements with almost 3,000 LPO licensees; the direct contestable nature of some of the services provided by the LPO licensees (evidence, Mr Keen, AB101, lines 1 to 45 and AB102, lines 1 to 22); the keeping and maintaining of the list for the reasons identified in Mr Keen's affidavit, paragraphs 21 to 29. 39 By paragraphs 27, 28 and 29, Mr Keen deposes to the reasons Australia Post wishes to maintain control over the list, in these terms: 27. First, to facilitate and maintain a commercial relationship with licensees in a way that is not compromised by releasing the list (which is kept up to date with significant effort) to competitors. That is, commercial viability and success. 28. Secondly, to have an appropriate degree of control over the brand of Australia Post to the extent that it is portrayed through the LPO network. That includes policing the adherence by LPOs to the terms of the licence in relation to what can be included in the space allocated to Australia Post's products and services in each LPO premises. 29. The list of LPOs is created, updated and maintained in the course of Australia Post engaging in and carrying on the commercially competitive activities set out in detail in this affidavit and for the purposes of carrying on those activities. 40 Counsel for Mr Johnston says that the Tribunal constructively treated the list as comprising, in effect, two documents. The first list notionally is a list which contains the information which satisfies the contended statutory obligation in respect of reserved services and is thus not influenced by any purpose directed to the commercial activities of Australia Post. The second list notionally is a list comprising information directed to carrying on commercial activities and is thus not influenced by any purpose directed to reserved services. This notional distribution of information into two constructive lists is simply unsustainable. 41 There is one list brought into existence for purposes which include in part a purpose of assembling information which has a connection with the provision of reserved services and a purpose of real substance of carrying on the commercial activities of Australia Post. Although it is not necessary to determine whether such a purpose is the sole purpose or a dominant purpose, the evidence before the Tribunal leads inevitably to the conclusion that such a purpose was of very real substance. 42 By s 44(4), the Federal Court may make such order as it thinks appropriate by reason of its decision on the appeal and by s 44(5) without limiting by implication the generality of s 44(4), the orders the Court may make include an order affirming or setting aside the decision of the Tribunal and an order limiting the case to be heard and decided again, either with or without the hearing of further evidence by the Tribunal in accordance with the directions of the Court. By s 44(7), the Court may make a finding of fact if such a finding is not inconsistent with findings of fact made by the Tribunal and it appears to the Court that it is convenient to make the finding of fact having regard to the factors recited at s 44(7)(b)(i) to (vii). In making any findings of fact under s 44(7), the Court may have regard to the evidence given in the proceedings before the Tribunal. 43 It seems to me, having regard to the findings of the Tribunal and the evidence of Mr Keen and taking into account the desirability of the expeditious and efficient resolution of the whole of the matter, the relative expense to the parties, questions of any delay and the desirability of resolving the matter, an express finding of fact ought to be made consistent with what I regard as the Tribunal's implicit or inferential finding that the list was brought into existence for purposes including the purpose of Australia Post carrying on its commercial activities and that that purpose is a substantial purpose. 44 A question then arises as to whether a substantial purpose among any other purpose of carrying on the commercial activities of Australia Post satisfies s 7(4) of the FOI Act for the purposes of Part II of Schedule 2 thus rendering Australia Post exempt from the operation of the FOI Act in relation to the list for the purposes of s 7(2) of the FOI Act. In Mikasa (NSW) Pty Limited v Festival Stores (1972) 127 CLR 617, the High Court was called upon to consider the proper construction for the purposes of s 66B(2) of the Trade Practices Act 1965 - 1971 (Cth) of the phrase 'for the reason that' in the context of a provision of that Act in terms that 'a person (in this section called 'the supplier') engages in the practice of resale price maintenance if … (d) the supplier withholds the supply of goods to a second person for the reason that the second person [has engaged in a particular conduct - including withholding supply of goods]'. Although the context will, of course, influence the construction to be adopted in any particular given case having regard to the provisions of the Act as a whole, Barwick CJ made this observation at page 634: In my opinion, it is not correct to so emphasise the participle in the phrase "for the reason that" as to interpret the paragraph as requiring the withholding of the supply to be for one reason only. In my opinion, if the likelihood that the would be purchaser would sell at less than the specific price is an operative reason for withholding that supply, the supplier engages in the practice of resale price maintenance, however many other reasons the supplier may in fact have for not supplying the goods; it is enough if it is an operative reason, that is to say, a substantial reason in the totality of reasons for the withholding of supply. [emphasis added] 45 The Trade Practices Act 1974 (Cth) (as amended) ultimately adopted provisions which expressly dealt with consequences in terms of the prescriptions in the Act of conduct engaged in for a purpose and whether, in the case of multiple purposes, the prescribed purpose was a substantial purpose. The remarks of the Chief Justice are directed to the general import of the construction to be given to the phrase 'for the reason that'. In Mikasa, Walsh J also took the view that the phrase 'for the reason that' ought to be construed to mean 'a substantial and operative reason' for withholding supplies (page 646). At page 658 of Mikasa, Stephen J said this: … common experience suggests that decisions (at least of that nature) have lying behind them a process of decision‑making involving the conscious or unconscious weighing of numerous factors, each no doubt of varying weight but each distinct from the others. In such a context each substantial and proximate reason will in my view answer the description of "the reason" in this paragraph. [emphasis added] 46 In National Mutual Life Association of Australia Limited v The Commissioner of Taxation (1970) 122 CLR 13 ('National Mutual'), Gibbs J considered the meaning of the phrase 'for the purpose of producing assessable income' in s 88(1) of the Income Tax and Social Services Contribution Assessment Act 1936 - 1963 (Cth) in a provision which said, 'where a taxpayer has paid any premium in respect of land, premises or machinery used for the purpose of producing assessable income and in the year of income [certain events occurred] a proportionate part of the amount of that premium … shall be an allowable deduction'. Gibbs J at page 18 said this: The question then is whether the words "used for the purpose of producing assessable income" in s 88(1) and (2) on their proper construction apply to land … only when it is solely used or chiefly used for the purpose of producing assessable income. The section itself contains no words restricting its operation in that way. If the provisions are literally construed, they apply when the land is used for the purpose of producing some assessable income even though it is used for other purposes as well. No doubt the application of the section might be excluded if the use of the land for the purpose of producing assessable income was so insubstantial as to call for the application of the principle de minimis non curat lex, but it is unnecessary to consider that situation … [emphasis added] 47 In National Mutual, at page 22, Gibbs J said this: I conclude that the words of s 88 should be given the broad meaning which, in their ordinary and natural sense, they are capable of bearing, and should be understood as including a reference to land which has in fact been used for the purpose of producing assessable income whether or not that was the main use of the land. [emphasis added] 48 A similar position was adopted in Hook v Rolfe (1986) 7 NSWLR 40 per Hope, Glass and Samuels JJA at pp 44 and 45. In Secretary to The Department of Treasury and Finance v Dalla‑Riva [2007] VSCA 11, Buchanan JA with whom Ashley JA and Smith AJA agreed considered the construction to be given to a provision which said, 'a document is an exempt document if it is (b) a document that has been prepared by a Minister or on his or her behalf or by an agency for the purpose of submission for consideration by the Cabinet; (ba) a document prepared for the purpose of briefing a Minister in relation to issues to be considered by the Cabinet' (s 28(1) Freedom of Information Act 1982). At [13], Buchanan JA said this: The purpose identified in the relevant paragraph of s 28(1) may be the dominant purpose or one of a number of significantly contributing purposes. Notwithstanding that the objects of the Act set out in s 3 appear to me to warrant construing the rights conferred by the Act liberally and the exceptions narrowly, in my view as long as a purpose meeting the statutory description was causative in the sense that but for its presence, "the power would not have been exercised" it need not have been the sole purpose for the preparation of the document in question. [emphasis added] 49 See also on the question of the construction of the term, 'in the course of and for the purposes of', Khoon's Official Assignee v Ex Liong Hin Ltd [1960] A.C. 178 at 191 per Lord Denning, Lord Jenkins and the Rt. Hon. L.M.D. de Silva and on the question of approaches to the test of the validity of an act 'when the law makes the object, view or purpose of a man or of a body of men', an element of that validity, Mills v Mills (1938) 60 CLR 150 at 185 and 186 per Dixon J. 50 Accordingly, since the list was brought into existence for the substantial and operative purpose of Australia Post carrying on commercial activities, Australia Post is exempt from the operation of the FOI Act in relation to the list by force of s 7(2) of the FOI Act as the list is a document in respect of Australia Post's commercial activities. The proper approach is not one of distributive treatment of the information contained in the list but one of determining whether the list was brought into existence for the purposes of Australia Post's commercial activities. If so, Australia Post is exempt from the operation of the FOI Act in respect of that document. It follows that the appeal ought to be upheld; the decision of the Tribunal set aside and a decision substituted for that decision, affirming the decision under review. 51 The Court makes those orders. Because no submissions have been addressed to me in relation to the question of costs, I propose to make a further order that short supplementary submissions, if any, on costs ought to be submitted to the Court by Monday, 2 April 2007 in the light of these reasons. I will then determine the question of costs. I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.

Associate: Dated: 26 March 2007 Counsel for the Applicant: Mr Hanks QC

Solicitor for the Applicant: FOI Solutions, Mr Batskos, Solicitor