Victorian Civil and Administrative Tribunal|2010-02-26

Fyfe v Department of Primary Industries (General) [2010] VCAT 240 (26 February 2010)

General List; Freedom of Information Act 1982; Documents relative to proposal for lower emission brown coal demonstration generator; Documents exempt; Section 30(1), Section 34(4)(a)(ii); Public interest override Section 50(4) not engaged

The important or perhaps the most important issue in the world of politics is the issue of manmade climate change. The United Nations and most national governments accept that carbon discharge from human use of fossil fuel and other sources is changing the world's climate and urgent action is required to halt this process.
One of the State of Victoria's contributions to the solution of this problem is a policy known as the Energy Technology Innovation Strategy. According to Mr Redlich who is the Director, Energy, Technology, Innovation Division within the Department of Primary Industries of the State of Victoria, this strategy:

Is an initiative of the Government which aims to drive low carbon emission technology and at the same time to secure Victoria's energy future.

The major source of electric energy in Victoria is the burning of brown coal. About 52% of Victoria's greenhouse gas emissions result from the use of brown coal for electricity generation.
According to Mr Redlich (quoting his department's website) the strategy:

Is a comprehensive approach to progress technology - in a timely manner - along the research - to - market continuum and, in turn, underpin economic development within the State.

Mr Redlich said that his Department consults widely to identify 'technological gaps or opportunities', carries out studies to 'assess those suggested technological gaps for suitability to local conditions'. The matter is then marketed nationally and internationally 'to attract maximum possible interest to the proposed initiative sought to be developed' with a request for proposals tender being released internationally. An assessment panel was formed to advise Government on final determinations.
In 2006 following this process the State of Victoria committed to a project including a grant of $50m subject to a matching grant from the Commonwealth of Australia of $100m to HRL Limited:

To build and run a large scale power demonstration plant using world-first low emissions technology developed in Victoria.

This project entailed drying the brown coal more efficiently and adopting a more efficient gasification combustion process. Mr Redlich said:

Since the joint announcement by the Commonwealth and Victorian Governments in relation to the HRL project, there have been negotiations under way to arrive at a funding agreement in relation to the project and various other ancillary matters. Those negotiations in relation to the funding agreement have been concluded, but they give rise to certain conditions precedent that have to be performed before the project can properly get underway. This matter has involved sensitive and protracted negotiations.

On 23 January 2009 the applicant Ms Melissa Fyfe who is a journalist employed by the Age newspaper lodged a request under the Freedom of Information Act 1982 in the following terms:
1. I seek access under the Freedom of Information Act documents relating to the announcement, on July 2, 2008, of a new $750m clean coal power station for Victoria (press release attached for your convenience). Specifically, I request:

(a) all documents created to brief the Minister and the department managers on the preparation of the media release attached.

I also request documents relating to overseas trips taken by Minister Peter Bachelor during the time he has held the energy and resources portfolio. Specifically I request:

(a) Briefings provided to Mr Bachelor before he took the overseas trip;

(d) Any product of the trips. By products I mean reports, submissions and other output from the trips.

Ms Fyfe's request for access was not processed within the statutory 45 day time limit. As a result on 24 March 2009 she filed the application commencing this proceeding. Following negotiations certain documents were released leaving some five documents or parts of documents the subject of exemption claims by the Department. A schedule of those documents is appended to these reasons.

Document 1 is described as e-mail with attached draft media release. It consists of two pages and the exemption sought is under Section 30(1) of the Freedom of Information Act.
Section 30(1) of the Freedom of Information Act provides as follows:

(1) Subject to this section, a document is an exempt document if it is a document the disclosure of which under this Act -

(a) would disclose matter in the nature of opinion, advice or recommendation prepared by an officer or Minister, or consultation or deliberation that has taken place between officers, Ministers, or an officer and a Minister, in the course of, or for the purpose of, the deliberative processes involved in the functions of an agency or Minister or of the government; and

In the present case there was no dispute that the documents fell within the description in Paragraph (a) which is popularly abbreviated to describe such documents as 'internal working documents'. What was in dispute was whether release would or would not be contrary to the public interest. Mr Redlich in his evidence said that the final press release which it will be recalled was annexed to Ms Fyfe's request, contained more information than the draft. He said the final version was more succinct and better constructed.
On behalf of the Department, Mr Batskos submitted that it was generally inappropriate to release draft documents particularly when the final version was already in the public domain.
I put it to Ms Fyfe that she would not wish drafts of her journalistic articles to be published relying rather than the final version. Similarly a Court or Tribunal would not wish drafts of its decisions to be accessed particularly when final reasons for decision which might materially differ from preceding drafts which had already been publicly released. In City Parking Pty Ltd v City of Melbourne (1996) 10 VAR 170, 229 sitting as the Administrative Appeals Tribunal of Victoria I said:

When one officer submits a draft to another, it is, in my view, an expression of opinion, recommendation or advice as to the appropriateness of the proposed draft. It is contrary to the public interest to disclose documents which upon due consideration, the proposed signatory has regarded as wholly inappropriate for despatch or inappropriate for despatch so as in an altered form.

I remain of that view. If for whatever reason a Departmental officer or in this case, a Minister 'thinks better' of a draft, it is confusing for that draft to be made public. Ms Fyfe correctly observes that the draft can be identified as such. In a painstaking examination of the differences between draft and final version significant inferences may be drawn as to the progress in thinking of the Minister or Departmental officers. Where earlier drafts of great works of art become available significant scholarly work can be done on the development of the final version by reference to the earlier draft. In public debates however the sort of precision required for this scholarly investigation is often absent. In the short run publication of drafts in these circumstances can be damaging, misleading and confusing. I note that by virtue of Section 30(6) the exemption created ceases to apply:

When a period of 10 years has elapsed since the last day of the year in which the document came into existence.

The exemption under Section 30 depends not upon the precise nature of the document in question but rather upon what the document (to quote Section 30(1)(a)) 'would disclose'. Accordingly a document which merely recorded oral advice tendered for instance to a Minister reporting the tendering of the advice as an historical event would nevertheless potentially be exempt under Section 30. For similar reasons the covering fax sheet which discloses the drafting process for the press release is exempt on the same ground as the draft press release itself Honeywood v Department of Education and Training [2003] VCAT 780 [11].
I uphold the exemption claimed for Document 1.
The next document is described as a Ministerial briefing note of a meeting proposed for 5 April 2008 with HRL. Large portions of this document have been released whilst certain names and other personal information has been deleted. Ms Fyfe does not seek access to the personal information and so it may be put to one side. What remains are passages deleted on the basis of an exemption claimed under Section 30(1) and also under a further exemption established by Section 34(4)(a)(ii) of the Freedom of Information Act 1982.

(ii) in the case of an agency engaged in trade or commerce - information of a business, commercial or financial nature -

that would if disclosed under this Act be likely to expose the agency unreasonably to disadvantage;

According to Mr Redlich the document is a draft Ministerial briefing note for a proposed meeting between HRL and the Minister to be held in China on 5 April 2008. Ultimately it seems that meeting did not occur. He said the document included a report:

To the Minister [as to] the status of negotiations with HRL on the funding agreement which were and are, of course, conducted on a commercial in confidence basis. [He continued] that means that if this information entered the market place it could significantly put at risk the project moving forward. It contains information relating to various aspects of the financial side of the negotiations as well as in relation to some of the issues which are alive today in relation to various conditions precedent.

Mr Redlich also gave evidence that arising out of the tender process a funding agreement was being negotiated with HRL and there was continuing debate as to what matters should be regarded as conditions precedent. This condition precedent matter remains a commercial issue between the parties.
To make out the exemption under Section 34(4)(a)(ii) as Mr Batskos submitted it is necessary for the Department to show:

(b) That the document contains information of a business commercial or financial nature; and

The description of the document by Mr Redlich and my own perusal of the passages for which exemption is sought satisfy me that it contains information of a business, commercial or financial nature. Accordingly, it is the first and third criteria for the exemption which remain in dispute.
Dealing first with the requirement that the Department be engaged in trade or commerce, there is nothing in the section which requires trade and commerce to be the predominant activity of the relevant agency. It would appear to be sufficient to make out this element of the exemption if the Department were engaged in trade or commerce at all even if this trade and commerce were incidental to the Department's larger operation. This view accords with the approach adopted by Judge Bowman in Stewart v Department of Tourism, Sport and the Commonwealth Games [2003] VCAT 45; (2003) 19 VAR 363, 373 [41]. For what it is worth it is also in accordance with my own decision in Marple v Department of Agriculture (1995) 9 VAR 29, 47. Ms Fyfe said:

The handing out of public money in the form of grants to private organisations is not a matter of trade and commerce ... we are, after all, talking about the granting of taxpayer's money, not a joint venture between two commercial partners.

In reply Mr Batskos relied upon a decision of Bracks v The Department of State Development (unreported August 1998) given by Judge Wood which he said established that a Government department involved in the management of a grant scheme to attract private sector businesses was engaged in trade or commerce.
I accept that on the evidence before me the respondent Department is and was engaged in trade and commerce. Bracks' case stands for the proposition for which Mr Batskos cited it. Judge Wood was a Vice-President of this Tribunal. That in itself is a reason why I should follow and apply his decision Anteden Pty Ltd v Glen Eira City Council [2000] VSC 366; (2000) 16 VAR 334 per Balmford J. In any event I do not believe that Ms Fyfe's submission properly characterises the strategy which is here being implemented, It is not simply a matter of handing out grants. It may be open to question for instance whether a Government agency that was distributing bushfire relief funds would for that reason be regarded as engaged in trade or commerce. Nevertheless the arrangements here entail not merely a handing out of money but entry into contractual arrangements which would entail the erection of a pilot electricity generation plant. In the circumstances I believe in light of the State of Victoria through the agency of the respondent Department could be regarded as having entered into or negotiating entry into a joint venture arrangement with the other party or parties. The first requirement for the exemption is therefore made out.
The final issue to consider is whether the evidence establishes that disclosure of the relevant information would be 'likely to expose the [Department] unreasonably to disadvantage'. On this point Mr Redlich said that there was a broad issue:

Given that as similar negotiations will need to occur in respect of any project engaged or to be engaged in as part of the implementation of the ETIS initiative, including renewable energy related projects.

It would unreasonably disadvantage the Government as being able to negotiate in good faith and confidence in other similar major projects which would be of great benefit to the State. That is because the Government would be viewed in the market place as representing a financial risk to proponents in relation to the financial information involved, but also in relation to any other financial information which might otherwise be provided or involve such as intellectual property.

He said that the negotiations were carried on in a 'commercial in confidence' basis. Ms Fyfe produced a policy document released by the then Opposition led by Mr Bracks seeking election in 1999 in which there was a promise to:

End the use of commercial in confidence in FOI, abolish recent changes to the FOI Act and extend freedom of information to all State Government agencies and bodies.

She said reliance on commercial in confidence in these circumstances was contrary to that promise.

Here the Department seems to be saying that it has promised its counter parties negotiations on a commercial in confidence basis and it would be embarrassed both in present and future dealings if release of commercial sensitive documents in effect makes a liar of it. There is no exemption in the Freedom of Information Act simply on the basis of 'commercial in confidence' dealings. It cannot be the law that an agency can make the 'commercial in confidence' promise to a counterpart and make it a self fulfilling prophecy by saying the failure to honour the 'commercial in confidence' promise will leave it in a disadvantageous position in the market.

Despite these misgivings upon analysis the exemption relied upon here does not require the establishment of any very extensive or onerous matters. The respondent needs to show merely that disclosure would expose it unreasonably to disadvantage. The evidence of Mr Redlich makes good the threat of disadvantage. The only question is whether that disadvantage would in the circumstances be unreasonable. One view might be and this is a view that was implicitly espoused by Ms Fyfe that the interest of the public will be aware of what is occurring with these relatively big ticket arrangements is so significant that Government departments and other agencies must reasonably accept this form of disadvantage. The result being that release would not unreasonably subject the agency to disadvantage.
Mr Batskos submitted that in an ordinary domestic tendering arrangement such as I considered in Byrne v Swan Hill Rural City Council (2000) 16 VAR 366 such an analysis might be appropriate. As I observed in that case persons dealing with local or State Government authorities must accept the risk that arrangements which would remain private if entered into with a private counterparty may become public if the counterparty is subject to freedom of information legislation. Given that the business undertaking does not wish to vacate the market for supplying services to Government they would simply have to accept this. Mr Batskos submitted however that where a tender process is conducted internationally, market sensitivities are more significant and it cannot be assumed that counterparties would simply accept the possibility of disclosure under the Freedom of Information Act as the Fyfes were going business with Government. These international bodies he said could simply avoid doing business with the Victorian Government.
In the present case the disputed text is not as I read it especially sensitive material nor does it contain any trade secrets or scientific formulae. Nevertheless with some hesitation I accept the submission by Mr Batskos, the exemption under Section 34(4)(a)(ii) is made out with respect to Document 2.
Exemption is also sought with respect to this document under Section 30(1) which was quoted earlier in these reasons. It was not made clear in the course of the hearing whether the exemptions are made with respect to the whole of the unreleased portion of the document under both sections or whether the exemptions under the different sections are made as to different portions of the text. The nature of the document establishes it as a piece of opinion, recommendation or advice and so the requirements of Section 30(1)(a) are made out. Once again it is the public interest criterion which remains in dispute. On this subject Mr Redlich said:

Disclosure of this document would also be misleading as it would give a misleading impression of where negotiations are today compared to where they were a year ago.

With some hesitation I accept this contention of making out the public interest criterion for the exemption under Section 30(1).
I uphold the exemption claimed for Document 2.
The next document for which exemption is sought is designated as Document 9.6. It is described as attachment #6 to Document 9, Ministerial briefing - status update - HRL Project. The same two exemptions are claimed with respect to this document as with respect to Document 2. According to Mr Redlich the document:

Contains information in relation to the negotiations with HRL [viz 31 March 2008] including issues in relation to the funding agreement (which as I have mentioned has been finalised, but is subject to a number of conditions precedent). There is information about the then current status of the negotiations and some discussion of the possible strategies moving forward.

He said the disadvantage to the State would be that perceptions would get:

Into the marketplace that the State is not able to negotiate in a confidential manner; this harm would be affecting the State's international reputation, not just locally.

With some hesitation I accept this evidence as to the claimed exemption under Section 30(1). The same point was made by Mr Redlich and the same considerations arise as with respect to Document No. 2.
The exemption claimed for Document 9.6 is made out.
The next document is No. 9.7. Mr Redlich said:

It is essentially a briefing to the Minister on the negotiations with Solar System and TRU Energy and the Victorian Government as they were moving to finalise an agreement. That agreement was eventually finalised.

The same exemptions are claimed.
Ms Fyfe observed that Solar Systems had gone into administration therefore this transaction should be regarded as not having a future. Accordingly, there would be no disadvantage to the State in the disclosure of the relevant material. Mr Redlich said that another Australian company was negotiating to take over the project which involved the use of solar power. Accordingly he submitted that the transaction should not be regarded as dead.
The same considerations as have been referred to relative to the previous documents make out the exemption with respect to this document.
Document 13 is a Ministerial briefing note relative to a luncheon with certain representatives of Harbin Power Equipment Company. The passages for which exemption is sought and which are challenged by Ms Fyfe are texturally identical to the disputed passages in Document 2. The same considerations therefore make out the exemption for this document.

It is not entirely clear whether Ms Fyfe in addition to challenging the claimed exemptions also sought that they be overridden under Section 50(4) of the Freedom of Information Act 1982. That subsection provides:

(4) On the hearing of an application for review the Tribunal shall have, in addition to any other power, the same powers as an agency or a Minister in respect of a request, including power to decide that access should be granted to an exempt document (not being a document referred to in section 28, section 29A, section 31(3), or in section 33) where the Tribunal is of opinion that the public interest requires that access to the document should be granted under this Act.

The effect if the section applies is that the Tribunal has power to release it despite upholding exemptions if it is 'of opinion that the public interest requires that access to the documents should be granted under this Act'. In presenting her case Ms Fyfe stressed the lack of transparency in the process which we are now considering. She cross-examined Mr Redlich demonstrating that apart from press releases there is next to no public access to information relative to the ETIS program. The public interest which seems to be invoked there is the need for transparency as to these important transactions. As Mr Batskos submitted the decision of the Court of Appeal in Secretary Department of Justice v Osland [2007] VSCA 96 shows that something more is required to provide a basis for the operation of the public interest override than merely to appeal to the concept of transparency. Parliament after all has struck the balance between a general rule that access should be given to public documents subject to exceptions provided for by the various exemptions in the Freedom of Information Act. See Osland's case [2007] VSCA 96 [94] per Maxwell P.
The Respondent's determination should be affirmed.

DPI Ministerial Briefing Note of meeting proposed for 5 April 2008 with HRL

Note: Attachment 1 referred to in this document is duplicate of Document 9.6

S 34(4)(a)(ii) - in part

Ministerial Briefing - Status Update - Solar Systems Project

DPI Ministerial Briefing Note relating to lunch proposed for 11 April 2008 with HRL and Harbin Power Equipment Company

Note: Attachment 1 referred to in this document is duplicate of Document 9.6

s 34(4)(a)(ii) - in part

Fyfe v Department of Primary Industries

At a glance

Court

Decision date

Source

Judgment (63 paragraphs)

Fyfe v Department of Primary Industries (General) [2010] VCAT 240 (26 February 2010)

Parties