Male v Kempsey Shire Council - [2022] NSWCATAD 39 - NSWCATAD 2021 case summary — Zoe

NSWNSWCATAD

Male v Kempsey Shire Council

[2022] NSWCATAD 39

NCAT Administrative and Equal Opportunity|2021-05-31

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At a glance

Source facts

Court

NCAT Administrative and Equal Opportunity

Decision date

2021-05-31

Source

Original judgment source is linked above.

Judgment (33 paragraphs)

[1]

The applicant's case

The applicant's case was advanced as stemming from the public's legitimate interest in the tender evaluation process. Flowing from that asserted public interest, the applicant's case relied upon the general presumption in favour of disclosure in s 5 of the Act and Mr Male's legally enforceable right in s 9 of the Act to access the information unless there is an overriding public interest against disclosure. The applicant also argued considerations in favour of disclosure as set out in examples (a), (b), (c) and (e) in the Note to s 12 of the Act, including enhanced government accountability and the effective oversight of the expenditure of public funds. In support of those considerations, the applicant submitted there were four issues of concern that were key to his argument. He provided an affidavit annexing a considerable volume of material about those issues of concern.
Apart from his argument on the public interest in the tender evaluation process, Mr Male's evidence confirmed that he is a competitor in the industry and has a personal interest in the tender process because he is interested in supplying materials to the Council.
The applicant contended that by not providing access to the information requested, the Council had obscured the transparency of the tender process and that it is not possible to know whether public expenditure on the successful tenderers was in the "best interests" of the community.
The applicant submitted that the Council had not discharged its burden of establishing that its decisions to withhold the information requested were justified. He argued that the reasons relied upon by the Council to withhold information and documents do not demonstrate an overriding public interest against disclosure. In particular, he contended that the information disclosed in the tender process was not commercially sensitive or confidential. This was germane to his arguments against the respondent's reliance upon a number of considerations against disclosure. Further, the applicant argued that since the tender processes have been completed, the information ought now be disclosed.

[3]

The applicant's evidence

Mr Male has more than 20 years' experience in the construction and road making industries. In particular, he has experience in crushing and screening materials ranging from virgin excavated natural material to building demolition materials, which can be used for building and road making. He is employed as the general manager of two companies, NSW Crushing and Screening Pty Ltd (NSWC&S) and NSW Quarry Services Pty Ltd (NSWQ), with day-to-day involvement in supervising the works undertaken by the employees of those companies. Mr Male is the son of Denis Male and Kaylene Male who are the directors and shareholders of NSWC&S and NSWQ.
In or around 2014, NSWQ entered into a profit à prendre with the owner of the land on which a quarry known as Bates Quarry is situated near Kempsey. The primary use for the material extracted from Bates Quarry was to supply materials conforming to RMS 3051 for the upgrade of the Pacific Highway, for road construction generally, and for civil and construction works in the Kempsey Shire local government area.
NSWQ supplies road making material from Bates Quarry to contractors who in turn supply those materials to the Council. Those contractors include GME and Arnway. The materials supplied to the Council are required to conform with RMS 3051.
Under cross-examination, Mr Male said that he developed an interest in the processes of Council in relation to the procurement of gravel in 2014 because the Council was purchasing materials from approximately 80 kilometres from the Kempsey Shire and that did not include Mr Male's company. Mr Male said that he was interested in supplying materials to the Council and that because his company is a competitor in the industry, he was interested in examining the Council's procurement processes.
Mr Male acknowledged under cross-examination that his interest in the processes of Council was because of his own interest, as opposed to the public interest. However, in re-examination, Mr Male said that he was interested in knowing that ratepayers receive value for money. I understood this to mean that Mr Male is interested in value for money being reflected in quality materials being used for roadworks at the best possible price, as funded by the rates paid by the citizens in the local government area.
Mr Male said that the one thing he did not know is the prices that were tendered by tenderers. He also said that he did not know whether the prices as tendered were the same as tenderers' advertised pricing. However, he agreed with the proposition put to him that when a procurement process is underway for competitive pricing, different suppliers will treat the opportunity to tender for a potentially large contract by offering prices below their advertised rates for the purpose of competing against other potential suppliers.
In response to questions about tenderers supplying information on such things as incident reporting and investigation procedures, training, Safe Work Method Statements, first aid and injury management, and emergency procedures, Mr Male said that he was not interested in receiving information about tenderers' proprietary systems for dealing with those matters. He was also not interested in financial information that is inherently confidential to businesses.
In response to a question from the Tribunal, Mr Male said that in his access applications he had not specifically asked for that type of information, and that he was interested in receiving the information provided by tenderers so that he could know "who the successful tenderer should be". Overall, I understood this to mean that Mr Male was not interested in tenderers' safety, risk and quality management systems or financial information (such as information relating to insurance). It was clear to me that his interest was in knowing what pricing had been offered by tenderers who had been successful in the evaluation process.

[6]

The respondent's case

The Council argued that the case before the Tribunal is not about whether it purchased non-compliant materials or misused government funds, but is about whether to release third party tender submissions and prices.
The Council accepted there was a legitimate public interest in the tender evaluation process. It agreed with the applicant's arguments on the public interest considerations in favour of disclosure and considered them to be strong. The Council also accepted there were personal factors pursuant to s 55 of the Act to be taken into consideration as factors in favour of disclosure, and considered those factors to also be strong.
However, the Council contended that the applicant's four concerns were not reasonably related to, and had no bearing upon, whether to disclose the information contained in the Documents Withheld. Further, the Council argued that the release of that information would not provide answers to the applicant's questions and allegations raised in the four concerns, and would not provide any significant additional opportunity for public scrutiny of the tender evaluation process.
The Council acknowledged there had been administrative errors and inconsistencies in relation to entries in the RoGC, the RFQ process and the term of the contract with GME, but argued that those errors did not diminish the significant weight to be placed on the considerations against disclosure. It submitted that proceedings under the GIPA Act should not be used "as a vehicle for the collateral review of the merits or validity of official action", citing Crewdson v Central Sydney Area Health Service [2002] NSWCA 345 at [24]. Further, the Council submitted that if the applicant has concerns about the Council's conduct, there are other avenues available to him to explore his alleged complaints.
The Council contended that the strong weight it had afforded to the considerations in favour of disclosure and the personal factors of the application was reflected in the release of the documents in Exhibit R4 to the applicant which disclose the tender process, procedures, evaluation criteria and conclusions.
The Council relied upon public interest considerations against disclosure as set out in clauses 1(d), 1(g), 3(a), 4(b), 4(c) and 4(d) in the s 14 Table. The Council argued that the public interest considerations against disclosure exceeded any considerations in favour of disclosure, because release of the Documents Withheld would: 1. unconditionally disclose commercial-in-confidence and confidential information of third parties to a competitor in circumstances where the information had been provided in confidence and release of the information could reasonably be expected to reduce the competitive commercial value of the information to the tenderers and prejudice their commercial, business and financial interests; 2. impair its ability to obtain best value for money for goods and services for the community by prejudicing the supply to Council of similar information in the future and undermining future procurement processes by reducing competition.
In relation to clauses 3(a), 4(b), 4(c) and 4(d) in the s 14 Table, the Council submitted that the fact that the applicant is a competitor of the affected tenderers increased the expectation that release of the information sought would have the effects described in those clauses.

[8]

Consideration

Noting that the parties are broadly in agreement on the relevant legal principles to be applied, this case is to be decided on the relevant facts and the overall balancing of competing interests. As correctly pointed out for the applicant, when balancing the considerations in favour of and against disclosure, the balance is always weighted in favour of disclosure. I accept the Council's submission that the applicant's four concerns are only relevant to the weight that should be given to the public interest considerations in favour of disclosure.
I am required to determine which considerations (either for or against disclosure) have greater weight when applying the public interest balancing test as required by s 13 of the Act. The essence of the balancing test in these proceedings requires me to weigh the need for Councils to be transparent and accountable in how they obtain value for money in their expenditure of public funds, against their obligations to not reveal commercial-in-confidence provisions of a government contract, not prejudice any person's legitimate business, commercial or financial interests and not diminish the competitive commercial value of any person's information. This is to be done having regard to the factual circumstances as presented in the evidence before me.
The type of information sought by the applicant in his access applications is consistent with the fundamental proposition advanced in his submissions, i.e. a legitimate interest in the tender evaluation process for ensuring "value for money". In the applicant's submission, value for money is not simply the best price for materials, but the best price for conforming materials that meet the required specifications. I accept this as a fundamentally sound proposition.
The applicant is interested in knowing whether those tenderers who have been appointed as a result of the competitive tender processes in TQE 19/16, TQE 17/35 and TQE 16/16 were legitimately and appropriately evaluated as being suppliers who would provide conforming materials as and when required to the Council during the relevant contract term, at prices which represent "value for money". The Council's decision-making process in evaluating and appointing tenderers is clearly within the scope of Mr Male's access applications.
However, the phase which commences once tenderers have been evaluated and appointed is essentially a contract management phase. In my view, that includes the RFQ process used to ask tenderers to supply materials during the term of the contract and the process of satisfying the Council that materials supplied comply with RMS specifications. Arguably, the exercises of formally engrossing/signing contracts and disclosing contracts in the Council's RoGC (where the value of those contracts is known to reach or exceed the threshold of $150,000) fall outside the tender evaluation phase. They are possibly more appropriately characterised as an administrative function.

[10]

Meaning of "value for money" in the context of the Council's procurement function

I believe it is helpful to look at the evidence before me that is relevant to what "value for money" means in the context of the Council's function to procure (via its tendering processes) gravel and pavement materials for the benefit of its ratepaying citizens. This is not for the purpose of demonstrating that in executing its procurement function, the Council has achieved "value for money", since that is not a matter for me to determine. In the context of these proceedings, the "value for money" proposition assists in determining the weight to be put to considerations in favour of disclosure (such as enhancing Government accountability, informing the public about the operations of the Council and ensuring the effective oversight of its expenditure of public funds).
The concept of "best price" does not necessarily mean "lowest price" in achieving value for money. The Statement of Business Ethics makes this clear in clause 3.3.1: "Value for money is determined by considering the impact of factors such as quality, reliability, timeliness, service, initial and ongoing costs. It does not mean 'lowest price'. However, the lowest price might offer the best value if it meets other essential criteria such as quality and reliability."
The amount of public funds involved in relation to the three tenders the subject of this determination is not precisely known. In the applicant's estimation, TQE 19/16 had a contract value of $4 million, TQE 17/35 had a value of around $3 million and TQE 16/16 had a value of around $4 million.
Those figures were not directly challenged by the respondent, however Mr Reeves said that he believed they were figures calculated by the applicant based on his own pricing and were not reflective of the competitors' pricing. It is evident from Mr Arndell's affidavit that, at least in the calendar years 2015, 2016 and 2017, the Council paid around $1.75 million to Arnway alone (although the amounts paid in subsequent years was considerably lower).
In a "schedule of rates" tender, a tenderer offers to supply and deliver materials to the Council at the rates offered in the tenderer's tender response for a particular term. As and when required throughout the term of contract, the Council will ask tenderers whose tender responses have been accepted, to quote for the supply and delivery of materials on the basis of the rates offered in their tender responses.
Although tenders TQE 19/16, TQE 17/35 and TQE 16/16 gave an indication of the volumes of materials that may be required over the period of the contract, the amount that would be payable to a tenderer over the term of the contract is not known at the time when the contract is formed. Only the rate at which the tenderer is prepared to supply and deliver the material is known. The Tribunal's understanding is that the value of a contract (i.e. the amount actually paid to a supplier during the term of a contract) will only be known on a 'look back' basis at the end of the term.
Mr McKeon said in his affidavit that the "bush telegraph" in the road making material industry is very active such that prices are openly discussed and are not kept "secret". He asserted that "price predominates", such that if material is required to meet a specification, the price for that material will be the price for material on the basis that it has been tested to comply with specifications. However, as acknowledged by Mr Male, a supplier's advertised rates may not be the rates as tendered in a competitive tender process.
In response to a question from the Tribunal about the volatility of pricing for pavement or gravel materials, Mr Male answered that the prices only increase in small amounts. He said that the operating costs dictate the pricing, but that this does not involve "hundreds of dollars". I find this to be inconsistent with the applicant's contention that the pricing information should be disclosed because it is dated.
It is evident to the Tribunal that the market for the supply and delivery of materials for gravel and pavement is potentially lucrative. It is also evident that while the market is relatively static or stable in terms of pricing fluctuation, it is a price competitive market in which pricing is therefore commercially sensitive (noting the exception with respect to GME's disclosure of his tender response to TQE 19/16).

[12]

Applicant's first concern: Signed contracts and entries in the RoGC

The applicant submitted that the Council's process for entering into contracts after tenders were evaluated was ad hoc. To the contrary, the Council argued that process contracts were formed resulting from the tender process, relying upon the decision in Hughes Aircraft Systems International v Airservices Australia (No 3) (1997) 76 FCR 151; [1997] 146 ALR 1 (Hughes).
In Hughes, the Federal Court of Australia found that a process contract had been formed between Airservices Australia and the tenderer through the processes leading to award of contract, the principal terms of which were contained in the request for tender. The Court noted that: 1. whether or not a process contract is formed is to be determined under ordinary principles of contract law (i.e. offer, acceptance, consideration, capacity to contract, certainty of terms and intention to create legal relations); and 2. a process contract will not arise unless the submission of a tender can be characterised as an acceptance of the offer formed by the invitation to tender. Accordingly, a non-conforming tender is more likely to be characterised as a counter offer, than an acceptance of the offer represented by the invitation to tender.
Each of the three requests for tenders contained the standard contract terms that would govern the arrangements between the Council and a successful tenderer. The rates to be charged by a tenderer are referred to in the definition of "Price Schedule", being the Tender Form that a tenderer submits to the Council in its tender response. Clause 12 provides, as a standard term, that payments will made to a tenderer as set out in the Tender Form (i.e. in accordance with a tenderer's tendered rates). Each tender contained the following statement in clause 1.5 which infers, consistent with the reasoning in Hughes, that the TQEs constituted the offer to tender "All complying tenders that meet the requirements of the specification will be accepted [Tribunal's emphasis]. Orders will be placed on an "as required" basis with preference given to the supplier that has the lowest price delivered to each project site when required".
I accept the Council's contention, in line with the reasoning in Hughes, that contracts were formed between the Council and successful tenderers following the acceptance by Council of the terms of the offer by the tenderers as set out in their tender submissions.
Under cross-examination, Mr Reeves acknowledged that, prior to May 2021; the Council had not signed a formal contract with any of the successful tenderers to TQE 19/16. Mr Reeves' affidavit referred to this as an administrative oversight, to be rectified in due course. The exception to this is clearly the contract between the Council and GME which is annexed to Mr McKeon's second affidavit.
The Council's administrative practices in terms of signing formal contracts appear to be lax since the TQEs all specify the standard terms to be included in the resulting contracts and specify that a successful tenderer "must enter into a Contract with Council to undertake the Works." Further, clause 1.5 states: "If Kempsey Shire Council's Contract is not signed by the appropriate person and returned complete with all attachments, Council's letter of Acceptance will be nullified and the contractor will be deemed ineligible. Council will not enter into any other business' or company's Contract or Terms."
Whilst the contract with GME (as annexed to Mr McKeon's second affidavit) does not contain the rates tendered by GME, Mr Male is aware of those rates because they are set out in GME's tender response annexed to Mr McKeon's first affidavit. It is perhaps worth noting that disclosure of a signed contract will not, of itself, disclose the pricing unless the tender form which sets out the rates and charges is also attached. A further significant difficulty for the applicant is that disclosure of the contracts, with the pricing disclosed, would attract public interest considerations against disclosure under clauses 1(d), 1(g) and 4(b), 4(c) and 4(d) of the s 14 Table (refer to my reasoning below in relation to these considerations).
As an aside, the inconsistency between the tender term and the term of the contract with GME demonstrates, at the very least, a serious administrative error. Whilst TQE 19/16 was stated to be for the period from 30 September 2019 to 30 June 2021 (tender period), the contract with GME specifies a contract term from 18 December 2019 to 17 December 2022 (contract period). I note that the error flows through to the entry in the RoGC. Mr Reeves acknowledged this error and said it was a matter on which the Council was obtaining advice. It is not, however, relevant to the issues to be decided by me.
Turning to the applicant's assertions regarding entries in the RoGC, I note that in the RoGC for 2018-2019, there is no entry for TQE 17/35. The RoGC otherwise makes reference to TQE 19/16 and TQE 16/16 by naming the successful tenderers. The entry for TQE 16/16 states in the column for the estimated amount payable to the contractor under the contract: "As per schedule of Rates". The entry for TQE 19/16 is asterisked with the following note: "This contract has been awarded via a procurement process for the provision of services which may or may not exceed the tendering threshold of $150,000 over the period of the contract based upon the contract being awarded based upon the supplier providing a schedule or rates for products and/or services to be procured under the contract."
To the extent that the value of a "schedule of rates" contract is not quantifiable at the time that a process contract is formed and cannot therefore be entered with certainty in the RoGC, the entries for TQE 19/16 and TQE 16/16 appear to appropriately reflect the nature of the "schedule of rates" tender and resulting contracts. Having said that, the Council acknowledged that its administration of the RoGC has not been consistent.
I accept that if contract values for the purchase of pavement and gravel could be disclosed in the RoGC, this would allow ratepayers to know the amount of public funds allocated for the purpose of providing serviceable roads and pavements in the Kempsey shire. However, the applicant's arguments concerning the formal signing of contracts and asserted lack of disclosure in the RoGC (noting the difficulty associated with entering details of "schedule of rates" contracts in the RoGC) do not directly bear on the public interest in the tender evaluation process. To a large extent, the disclosure of the documents to the applicant (Exhibit R4) provides insight into the criteria to be met by prospective tenderers and the Council's processes in evaluating tenders.

[13]

Applicant's second concern: Issuing RFQs

On each occasion that the Council requires materials to be supplied, it issues RFQs to tenderers calling for quotations.
According to Mr McKeon and Mr Arndell, the usual procedure would be for the party requiring materials to issue a purchase order to a successful tenderer for the materials required on each occasion. The tenderer supplies and delivers the materials and then issues an invoice to the Council.
When questioned about the Council's practice of issuing RFQs, Mr Reeves conceded that the RFQs did not need to be sent because it involved another layer of administration that was not required. He agreed that there was no efficiency in terms of the time involved in the process. He said that the advantages were in ascertaining availability and speed of delivery on each occasion that the Council required materials to be supplied to a particular site. Mr Reeves agreed with the proposition that if Council staff had simply looked at the tender documents, they could have worked out what a tenderer could have supplied.
Exhibit A2 annexed a copy of GME's response to TQE 19/16 which included the rate (price) per tonne for 10 types of material and GME's haulage rates per kilometre by truck and dog or rigid truck. For instance, GME's price for uncrushed gravel ex-quarry was $6.75. Once haulage costs are added for delivery to a site distance of 35 kilometres, Mr McKeon said his tender price per tonne delivered by truck and dog came to $17.25.
Mr McKeon said that the Council's subsequent request (while TQE 19/16 was still current) for GME to provide a quotation to provide uncrushed gravel, was the first time he had been asked to do this in his 20 years of experience in the industry. Annexed to Exhibit A2 was a copy of GME's subsequent quotation to supply and deliver uncrushed gravel to a specified site. The price quoted per tonne delivered was $18.10, an increase of $0.85 per tonne over the price quoted in GME's tender response. Mr McKeon's evidence was that despite the currency of TQE 19/16, the Council accepted his subsequent quoted higher price for the uncrushed gravel. The difference between GME's tender price and its subsequent quotation is $8,712.50.
The Council acknowledged that the practice of issuing RFQs, in circumstances where the quotations are not checked against a tender's tendered pricing can result in the Council paying higher rates for materials. Mr Reeves agreed that staff missed the process of double-checking quotations against the tendered rates and that this was an error and should not have occurred. The evidence is that any amounts paid over and above the tendered rates are minimal.
Mr Reeves' evidence was that, to his knowledge, the RFQ process had not resulted in the Council paying suppliers who were not successful in the tendering process. I accept Mr Reeves' evidence, as the Tribunal has no evidence before it to substantiate the applicant's assertions on this point and, in any event, the RFQ process is arguably outside the scope of Mr Male's access applications.
In the contract management phase, the Council's practice of issuing RFQs created some instances of over-charging and could have been avoided. However, that is not a matter coming within the scope of the Council's decision-making process in evaluating tenders. Disclosure of the Documents Withheld has no bearing on the RFQ process and will not, of itself, provide more transparency in relation to the applicant's identified concern.

[14]

Applicant's third concern: Failure to disclose pricing

The applicant argued that by allowing successful tenderers to quote above the prices they tendered and by not disclosing the tendered quotes or any contracts on the RoGC, it is not possible for a member of the public to oversee the expenditure of public funds in relation to the Council's purchase of quarried materials. On behalf of the applicant, it was submitted there is a public interest in promoting open discussion on the value and cost of large government contracts: Zonneyville v NSW Department of Finance and Services [2015] NSWCATAD 175 (Zonneyville) at [40].
I have already dealt with the applicant's asserted concerns about RFQs and the Council's entry of information in its RoGC.
Mr Male's own evidence was that prices only increase in small amounts. Having reviewed the pricing in the confidential material provided to me, it is evident that the market is not volatile, and that pricing has sustained only minor variations since TQE 16/16.
The Council's argument was that if pricing is known, the next time that tender responses are invited, the range of pricing could shrink because participants will seek to "meet and beat" the prices, rather than offer their most competitive rates. Under cross-examination, Mr Reeves maintained the argument that when pricing is known, the market "might tend to price in accordance with what they believe the most favourable price would be rather than the best possible price that they can supply". However, Mr Reeves also conceded that there was potential that if pricing is known, tenderers might try to beat it by as big a margin as they possibly could. Against that, Mr Reeves said that there were other negative impacts that would result from releasing commercially sensitive information, including the competitive commercial value of the information being diminished.
Mr Male referred to the merits of publishing tender prices after tenders have closed, arguing there can be no corruption, as the primary aim of an "open tendering process". That argument fails to explain the connection between pricing being 'out in the open' and potential corrupt conduct. The argument does not advance any hypothesis about the likely competitive behaviour of tenderers if pricing is known.
Hurd's submission focused on the commercial sensitivity of its pricing and the need for pricing to be kept confidential, especially from its competitors. Whilst not explicitly indicating the impact that disclosure of rates might have on its future pricing strategies, Hurd's submission inferred that maintaining the confidentiality of its pricing underpins the competitive nature of the tendering process. Bayval's objection is more explicit, asserting that the supply of confidential information is necessary to keep the tender process competitive.
It is clear to the Tribunal that the primary aim or benefit of a competitive tendering process (whether an open or selective tender is used) is achieving a value for money outcome, as opposed to discouraging corrupt conduct. The rationale for competitive bidding is that suppliers put together their best proposal and compete against other suppliers for a specific project. Mr Reeves' evidence on the effect of disclosure of pricing on competitive behaviour was, overall, somewhat equivocal. However, the views of Hurd, Bayval and Holcim add weight to the Council's argument that disclosure of pricing would likely reduce competition in this particular market.
I am of the view that the public interest in overseeing public expenditure cannot be intended to require the disclosure of pricing where the release of that information could reasonably be expected to have the effects described in clauses 1(d), 1(g), 4(b), 4(c) and 4(d) in the s 14 Table, and those matters are addressed in more detail below.

[15]

Applicant's fourth concern: Purchase of non-compliant materials

Mr Male asserted that the Council's officers have not implemented the testing protocol of RMS 3051. He expressed particular concern, as did Mr McKeon and Mr Arndell that non-compliant materials were being purchased from PBM.
Mr Male's affidavit explained that the testing compliance regime as set by RMS 3051 is critically important to the quality control of the end result in road maintenance; road construction and road upgrade works undertaken by the Council.
In his affidavit, Mr Arndell said that in late 2020 he observed road making material supplied by PBM from its own quarry being used in roadworks at South West Rocks Road. He said that the road making material was delivered by a haulage company that he knew carted material from PBM's quarry. Mr Arndell said that he observed that the DGB20 surface (prior to being sealed) was not smooth. In his view, the surface was breaking up and was not binding as it should, before being sealed. He said that he had subsequently noticed that the roadworks broke up almost as soon as the work had finished, and had to be repaired.
In his affidavit, Mr McKeon also said that he had observed in December 2020 that a new section of road works on South West Rocks Road undertaken by the Council was defective, with pitting and holes in the surface before the road was to be sealed. In his view, the trim of the final surface material DGB20 was not to the appropriate standard prior to sealing. He subsequently observed that, once that section of road had been sealed, potholes appeared and the Council had undertaken work to patch the road.
Mr Male's argument is that the inherent cost to ratepayers in the repair of roads where the RMS testing regime is not implemented is so important that the public must have access to information to demonstrate whether the Council has implemented the testing regime. Further, he asserted there is a need for the public to have available documents that show at what cost and whose cost rectification works have been undertaken as a consequence of the alleged use of non-conforming road making materials by the Council. Mr Male's access application did not specifically seek access to information that may evidence such alleged rectification works and that information is therefore not within the scope of his application.
However, the issue concerning the purchase and use of compliant materials as part of the "value for money" proposition is clearly very important. The Tribunal understands, from the Guide Notes to RMS 3051 that higher standard materials, or materials with higher plasticity, will generally have lower permeability, and the highest standard of material is specified for the heaviest trafficked roads. The issue of plasticity is referred to below with reference to Mr Reece's evidence on whether all tender responses received for TQE 19/16 were compliant with RMS 3051.
In their tender responses, tenderers were required to provide details of the source of the material they proposed to provide, if successful. Tenderers were asked to attach recent test results, as required by the following statement: "Recent test results sampled by a NATA accredited laboratory to confirm that the pavement material complies with the Specification required. The NATA laboratory must be independent of the supplier."
However, tenderers could also submit test results prior to the initial delivery of material, as set out in clause 3.7 of the Specification of Work set out in the invitation to tender: "Testing in accordance with Australian Standards is to be undertaken by an independent NATA accredited laboratory and results are required to be submitted with the tender. If the material tendered has not been produced at the time of the tender the test results may be submitted prior to the initial delivery of material The samples for testing are to be taken by the laboratory from stockpiles and not by the supplier. Acceptance is at the sole discretion of Council's representative and Council reserves the right to carry out its own testing. Should the material be found after delivery to be non-conforming to Specification, Council reserves the right to order the material to be removed from the site at the supplier's expense. Payment will NOT be made for non-conforming material."
Under cross-examination, Mr Reeves was asked to state whether, with reference to a document annexed at Tab 51 to Mr Male's affidavit (Exhibit A1), he considered the PBM testing laboratory to be independent of PBM. Tab 51 is a document issued by the National Association of Testing Authorities, Australia (NATA) confirming the accreditation of Pacific Blue Metal Testing Laboratory and Pacific Blue Metal Laboratory as at 20 January 2010. Mr Reeves said that ownership of the PBM testing laboratory (by PBM) carried requirements for PBM to maintain their accreditation and that this was independently audited. The matter concerning whether the PBM testing laboratory is independent of PBM is not an issue to be decided by me in these proceedings.
In his statutory declaration, Mr Reeves corrected an answer he had given in cross-examination that all submitted tenders received for TQE 19/16 were compliant with respect to materials conforming to RMS 3051. Mr Reeves sought to clarify his answer with respect to PBM's material test results, referencing plasticity levels: "Material test results received and held indicated that the material conformed with RMS3051, these were for DGB20. However, upon close review of test certificates provided for DGS40 as an example within the tender response, the confirming upper limit for RMS3051 is 10. Some test results received to this day are conforming, however some have shown a result of 11, these were received after the hearing date. … There is a possibility that some DGS40 material has been supplied that meets the upper limit of plasticity of 12 for the Australian Standards/AUS SPEC C242, rather than 10 for RMS3051."
The respondent agrees that it is in the public interest to ensure that the Council is purchasing compliant material. To that end, the Council is prepared to release the tests results contained in PBM's tender for TQE 19/16 following consultation under s 54(6) of the Act.
In the interests of promoting transparency and accountability, and having regard to the "value for money" proposition which includes the purchase of complaint materials at the best price, I have decided to release PBM's test results relating to TQE 19/16 subject to the consultation requirements under s 54(6) of the Act.
I now turn to the considerations in favour of disclosure.

[16]

The Tribunal's decision on considerations in favour of disclosure

As already noted, Councils have statutory obligations under the LGA with respect to its procurement activities and the expenditure of public funds. Its tender processes are governed by the OLG Tendering Guidelines. As pointed out in Submissions for the applicant, drawing from those guidelines: "Purchase and disposal activities using the tendering process for local government … are governed by strict considerations of probity, transparency and accountability in the expenditure of public funds for public purposes" (p 6) "Accountability and transparency: Councils must ensure that the process of awarding contracts is open, clear, fully documented and defensible" (p 10) "Councils should not invoice or order split to avoid tendering requirements as such activities would be contrary to the requirements of Council's charter under the Act" (p 25).
I find that the above guidelines, together with the public's legitimate interest in a Council's tender process (including the tender evaluation process) give rise to the following public interest considerations in favour of disclosure because disclosure of the information sought would: 1. promote open discussion of public affairs; 2. enhance government accountability; 3. contribute to positive and informed debate on issues of public importance; 4. assist in keeping the public informed about the operation of agencies; 5. ensure effective oversight of the expenditure of public funds.
The above public interest considerations in favour of disclosure are in addition to the statutory presumption in favour disclosure in s 5 of the Act and the applicant's entitlement to access under s 9 of the Act unless there is an overriding public interest against disclosure.
I regard these considerations in favour of disclosure to be strong, and have afforded them a substantial amount of weight. For the reasons already given, the applicant's fourth concern is within the scope of his access application and is relevant to the "value for money" proposition. Otherwise, the other issues of concern do not increase the weight that should be afforded to the considerations in favour of disclosure.
For completeness, as an additional matter, I note there is a very strong public interest in favour of disclosure of information that reveals misconduct or breaches of a code of conduct: McKinnon v Blacktown City Council [2012] NSWADT 44 at [10]. However, whilst the applicant identified sub-clause (e) in the Note to s 12 of the Act as an example of a public interest consideration in favour of disclosure, he confirmed that he did not allege that the Council or any of its officers had misused government funds. There is room for improvement in the Council's contract management/contract administration practices, however, there is no evidence before me to suggest that disclosure of the information could reasonably be expected to reveal or substantiate that the Council (or a member of the Council) has engaged in misconduct or negligent, improper or unlawful conduct.
I agree with the Council's submissions that complaints about conduct may be explored with independent authorities such as the Department of Local Government, the NSW Office of the Ombudsman or the Independent Commission Against Corruption. I also note the Tribunal's decision in Denyer v Commissioner of Police, NSW Police Force [2018] NSWCATAD 160 that the use of the GIPA Act to audit potential misconduct was misdirected.

[18]

Personal factor to be taken into account as a factor against providing access

Under s 55(1)(a) of the GIPA Act, the applicant's identity and relationship with any other person can be taken into account as factors against providing access if they engage clauses 2-5 in the s 14 Table. Mr Male is a competitor in the market and has business relationships with Mr McKeon (representing GME) and Mr Arndell (representing Arnway) who are also competitors in the market. I also note that GME's tender response to TEQ 19/16 discloses that Mr McKeon uses trucks owned by another competitor, Ball's Earthmoving.
Mr Male operates Bates Quarry and supplies road making materials from that quarry to Arnway which, in turn, supplies materials to the Council. The openness of the relationship between Mr McKeon and Mr Male is evidenced by Mr McKeon's provision of GME's tender response and contract with the Council, to Mr Male. Mr Arndell has disclosed the amount of his earnings for the supply and delivery of material to the Council although his affidavit does not disclose the rates as tendered to the Council in a competitive tendering process, to Mr Male.
If Mr Male's relationship with Mr McKeon and Mr Arndell is such that knowledge of pricing as tendered in a competitive tender carries a risk that in future competitive tenders, they may try to simply beat the pricing and not offer to supply materials at their best possible commercial rates, this is a factor to be taken into account against disclosure. Clause 2.1.10 in the Procurement Procedure Manual states that the Council is committed to ensuring that it deals with suppliers in a fair and ethical manner and any suspicion it has relating to collusive behaviour by tenderers will be reported to relevant authorities. In noting clause 2.1.10, no suggestion is made that the applicant's relationships with Mr McKeon and Mr Arndell or Ball's Earthmoving are in any way collusive.
The release of unredacted tender submissions, tender evaluations and signed contracts (to the extent that contracts have been signed) would disclose tenderers' pricing. This is information which the applicant as a competitor in the market is clearly interested in having access to, given the interests of NSWQ in being awarded contracts to supply roadworks material to the Council in the future. However, I am of the view that the release of pricing to the applicant as a competitor in the market increases the expectation that disclosure will prejudice the legitimate commercial interests of other tenderers. I am also of the view, as already discussed, that release of pricing information could reasonably be expected to lead to a reduction in competition in future tenders.
I give this factor a substantial amount of weight against disclosure.

[20]

First element: Whether the information is confidential or was obtained in confidence

In determining the first element, the Appeal Panel in Commissioner of Police, New South Wales Police Force v Camilleri (GD) [2012] NSWADTAP 19 at [33] said that whether information is "confidential information" is to be examined "primarily at least, by reference to the agency's evidence as to the conditions under which it conducts the service within which the information was received". The Appeal Panel went on to say at [34] that the inquiry concerning cl 1(d) "should focus on the point of receipt, and the administrative standards and community understandings which surrounded it".
In Australians for Sustainable Development Inc v Barangaroo Delivery Authority [2013] NSWADT 252 (Barangaroo) at [68] the Tribunal found that the confidentiality of information can be inferred from the circumstances in which it was provided, even if not expressly stated.
As correctly pointed out in submissions for the applicant, the Tribunal is not bound by government policy documents (i.e. the Statement of Business Ethics, the Procurement Procedure Manual and the OLG Tender Guidelines) in determining this application. However, in my view, they are relevant for the purpose of examining the context or conditions under which the Council invited, received and evaluated tenders. The government policy documents provide some assistance in examining whether it is reasonable to infer from the conditions of tendering that the information sought by the applicant is "commercial-in-confidence" or "confidential" or was supplied "in confidence" to the Council.
The conditions under which the Council invites competitive tenders for the procurement of gravel and pavement materials are set out in the invitation to tender documents. The tender documents are issued within the broader context of the government policy documents. Together, the tender documents and government policy documents comprise the conditions and overall environment for evaluating tenders for the purpose of obtaining "best possible value for public money". It is under those conditions and within that overall environment that the Council invites tenders, and tenderers submit their information.
The applicant relied upon the decision of Senior Member Robertson in South Coast Hunters Club v Eurobodalla Shire Council [2018] NSWCATAD 42 at [68] to contend that the guidelines do not create any presumption that information contained in a tender document is provided in confidence: "I do not accept the submission that the tendering guidelines indicated that the Document would be treated as a confidential document. The tendering guidelines only indicate that documents provided in confidence will be treated confidentially. The tender guidelines do not indicate when a document will be considered to be provided in confidence, the guidelines do not create any presumption that material submitted with a tender is provided in confidence."
I accept that the government policy documents do not create a presumption that material submitted with a tender is provided in confidence. I agree with the applicant's submission that the Council has to establish that the information was provided in confidence and that tenderers asserted that their documents contained intellectual property, proprietary, commercial-in-confidence or otherwise confidential material. The issue is whether the conditions and overall tendering environment were such that tenderers submitted their responses "in confidence", with an expectation that the Council would protect the information and not disclose it to third parties.
Each of the Council's Tenders contained clause 1.4: "All tenders received will be treated, as "Commercial in Confidence" and the name only of the successful contractor(s) will be disclosed."
Each of the Council's Tenders also contained clause 1.6, directing tenders to the Tenderlink site on the Council's web site in order to access the Statement of Business Ethics and a Purchasing of Goods and Services Policy which set standards of behaviour for both the Council and suppliers.
The Statement of Business Ethics contains the following provisions: At clause 4.1(e): "Kempsey Shire Council requires its employees and contract staff to: …. (e) Protect commercial-in-confidence information (clause 4.1(e) At clause 5.2: "Information which is marked confidential, or which a reasonable person would expect to be confidential, should be treated as such. The information could be in various forms such as hardcopy documents or electronically stored."
The Statement of Business Ethics applies to both the Council and its suppliers. When submitting a tender, a tenderer is required to complete a statutory declaration which contains the following statement: "The Tenderer must complete and submit this form with the tender. All submitted information will be treated as confidential."
The statutory declaration serves a dual purpose. First, the tenderer agrees to be bound by the standards of ethical behaviour set out in the Statement of Business Ethics. Second, in executing the required statutory declaration, the tenderer also agrees to have respect for Council staff to act in accordance with the Statement of Business Ethics. This clearly serves to acknowledge that a tenderer is made aware that the Council and its staff must adhere to the required standards, including those concerning the treatment of information as confidential.
Further, under clause 4.2(h) of the Statement of Business Ethics, tenderers are expected to "prevent the unauthorised release of privileged or confidential information, such as commercial-in-confidence information."
In my view, the requirement for tenderers to provide a statutory declaration agreeing to be bound by the Statement of Business Ethics and to respect the protection of commercial-in-confidence information submitted in response to a tender, leads to a reasonable expectation that the tendered material would be protected from disclosure.
The Procurement Procedure Manual states that it is binding upon the respondent and its staff. It is not clear from the documents before me whether the Procurement Procedure Manual is the same as, or a later version of, the Purchasing of Goods and Services Policy referred to in clause 1.6 of the Council's tender. The Procurement Procedure Manual is not, strictly speaking, a document that binds tenderers, although it contains clause 2.1.3 that sets out the conduct expected of them (to be ethical and have integrity, and present the highest standards of professionalism and probity). Nonetheless, it forms part of the "in confidence" environment in which Councils invite tenders and tenderers to submit their information including sensitive or commercial-in-confidence information about their pricing and other proprietary information.
Clause 1.4 in the Procurement Procedure Manual contains the following guiding principle regarding how they are to treat intellectual property and information in tenders that is proprietary, commercial-in-confidence or otherwise confidential: "Confidentiality Information received from tenderers (intellectual property, propriety (sic), commercial-in-confidence or otherwise confidential) is not disclosed without prior consent from the Tenderer. All details of a tendering process, including a recommendation of the tender evaluation must not be disclosed before the outcome of the tender has been determined."
Also under clause 1.4 of the Procurement Procedure Manual, the respondent's staff are required to treat prospective suppliers equally, providing them with access to the same information about proposed procurement, to enable those suppliers to submit tenders and quotations on the same basis. This has the effect of further creating an environment where prospective tenderers submit their tenders in the confidence that they have been afforded the same information as has been provided to other tenderers, that other tenderers have submitted tenders on the basis that their proprietary information and commercial-in-confidence information will be regarded, and treated, as confidential and will be protected from disclosure.
Under clause 2.1.2.1 of the Procurement Procedure Manual, contract prices are considered to be sensitive information. Obligations are placed on the respondent and its staff to maintain the confidentiality of contract prices, and are linked to standards of ethics, integrity and probity: "2.1 Ethics and Probity …. 2.1.2.1 General Councillors and Council staff shall at all time (sic) conduct themselves in ways that are in accordance with the Code of Conduct and are seen to be, ethical and of integrity and will: … Maintain confidentiality of information such as contract prices and other sensitive information."
Under clause 2.1.6 of the Procurement Procedure Manual, the commercial interests of tenderers are emphasised, along with the obligation to maintain confidentiality of their information: "Fair and Honest Dealing … The commercial interests of existing and potential suppliers must be protected. Confidentiality of information provided by existing and prospective suppliers must be maintained at all times, particularly commercial sensitive material such as, but not limited to prices, discounts, rebates, profit, manufacturing and product information."
Under clause 2.1.9 of the Procurement Procedure Manual, information that is disclosed by tenderers or suppliers in tenders or quotations and during tender negotiations is regarded as "commercial in confidence" and must not be disclosed: "2.1.9 Disclosure of Information Information received by Council that is commercial in confidence must not be disclosed and is to be stored in a secure location. Councillors and Council Staff are to protect, by refusing to release or discuss the following: Information disclosed by organisations in tenders, quotation or during tender negotiations All information that is commercial in confidence Pre-contract information including but not limited to information provided in quotes and tenders or subsequently provided in pre-contract negotiations unless required to (sic) so by law and then only to the extent the law requires. Councillors and Council Staff are to avoid references to any contracts in discussion with acquaintances or outside interests."
Clause 2.1.10 of the Procurement Procedure Manual states that collusive behaviour or anti-competitive conduct by tenderers will not be tolerated and, if necessary, the Council may include clauses in its tender documents to deter such behaviour. An example of such a clause would be to require a tenderer to warrant that its tender has not been prepared with any consultation, communication, contract, arrangement or understanding with any competitor regarding prices or the terms of the bid (other than where a joint venture arrangement is proposed and accepted). In my view, clause 2.1.10 serves to strengthen the confidentiality under which tenders are received and evaluated.
In my assessment, the Council and its staff are left in no doubt under the Procurement Procedure Manual about their obligations to regard the information submitted by tenderers during the tender process, including commercial-in-confidence information, as confidential. Staff are reminded not to discuss contracts between the Council and suppliers with any other person, to maintain the confidentiality of those contracts.
The OLG Tendering Guidelines assist Councils in applying clear policies and procedures in accordance with the LGA when engaging in procurement activities using the tendering processes for local government, and set standards of behaviour and ethical principles for procurement and tendering activities.
One of the standards deals with the non-disclosure of confidential or proprietary information, expressed in the context of honesty, fairness and probity of tendering, procurement and business relationships between Councils and suppliers: "Honesty and fairness: Councils must conduct all tendering, procurement and business relationships with honesty, fairness and probity at all levels. Councils must not disclose confidential or proprietary information. (Refer to 1.3 for further information regarding confidentiality)."
Clause 1.3 of the OLG Tendering Guidelines contains the following express obligation imposed upon Councils: "1.3 Confidentiality Councils must not disclose tender information received from tenderers that is intellectual property, proprietary, commercial-in-confidence or otherwise confidential, without their prior consent. In addition, council staff or councillors must not disclose information regarding the specific details of a tendering process, including a recommendation of the tender evaluation or assessment panel before the outcome of the tender has been determined. Where a council is dealing with a tender pursuant to section 55 of the Act and confidential information needs to be disseminated to councillors for the purpose of deciding whether or not to accept any submitted tender, the confidential information should be issued as a separate confidential attachment to the council report with the non-confidential information included in the council business paper which is available to the public."
Clause 1.3 then refers to the effect of s 10A of the LGA in ensuring that a commercial advantage is not conferred on a supplier to the Council: "Section 10A of the Act outlines the circumstances under which a council or council committee meeting may be closed to the public. This includes information that would, if disclosed: Confer a commercial advantage on a person with whom the council is conducting (or proposes to conduct) business with, or Prejudice the commercial position of the person who supplied it, or Confer a commercial advantage on a competitor of the council, or Reveal a trade secret."
Clause 1.3 also contains a statement reminding Councils of the requirement for openness and transparency in its decision-making, and to consider whether information provided in a report for Council's decision does contain proprietary, commercial-in-confidence or otherwise confidential material: "Councils are reminded that the Act [meaning the LGA] emphasises openness and transparency in decision making and councils should consider whether any information provided in the report to the council is intellectual property, proprietary, commercial-in-confidence or otherwise confidential before considering any report in closed session."
The practical application of clause 1.3 of the OLG Tendering Guidelines is evidenced in Exhibit R4 (documents released to Mr Male) which contains (at Tab 5) a report to an ordinary meeting of the Council recommending the acceptance of 7 tenders for the supply of pavement materials in response to TQE 19/16. The report states that it was submitted on a confidential basis because it involves commercial information of a confidential nature that would, if disclosed, prejudice the commercial position of the person who supplied it (relying upon s 10A(2)(d)(i)). The report contains the following paragraph: "On balance, the public interest in preserving the confidentiality of the commercial information supplied, outweighs the public interest in openness and transparency in council decision making by discussing the matter in open meeting."
Neither the report (at Tab 5) nor the attached Tender Evaluation Report (at Tab 6) disclosed the prices tendered by each tenderer, and the following recommendation was made: "The Tender Evaluation Report recommends that all tenders be appointed as panel suppliers as they provide acceptable value of (sic) money for at least one of the materials to be supplied under the tender. Supply from the panel for a specific job or project would be based on which supplier represents best value for money considering material quality, cost including delivery (if relevant) and past performance."
Exhibit R4 also contains (at Tab 12) an extract from minutes of an ordinary meeting of the Council to consider tenders for the supply and delivery of gravel under TQE 17/35. The analysis of the 4 tenders (at Tab 13) received in response to TQE 17/35 concluded that PBM had a clear price advantage at all expected work sites. The tender analysis recommended acceptance of PBM's tender provided the gravel met the required specification at the time of delivery and provided the Council's delivery requirements could be met. None of the tenderers' pricing was disclosed in either the minutes or the tender analysis. Instead, the Council was referred to a "Confidential Appendix S" for details of the tender evaluation, in recognition of the effect of s 10A(1) and s 10A(2) of the LGA requiring the confidentiality of commercial information to be preserved. The minutes contained a statement that the public interest in preserving the confidentiality of the information supplied outweighed the public interest in openness and transparency.
Likewise, Tab 14 of Exhibit R4 contains an extract from minutes of the Council to consider tenders for the supply and delivery of gravel under TQE 16/16, acknowledging that the reports to Council were submitted on a confidential basis since it involved information that would, if disclosed, confer a commercial advantage on a person with whom the council is conducting (or proposes to conduct) business. The Council was referred to a "Confidential Appendix K" which analysed the four tenders received. Three of the four tenders received met the conditions of tendering. One of the tenders did not provide the required details and was therefore not considered. The analysis of tenders was said to be "primarily based on price delivered to site, provided the material meets specification and the suppler can guarantee delivery of the quantities required daily." On the issue of price, the tender analysis found that there was no clear price advantage for any one supplier to all sites due to the differing locations of quarries relative to anticipated work sites. The prices of the three successful tenderers were contained in a spreadsheet attached to Confidential Appendix K to preserve the confidentiality of that information in accordance with s 10A(1) and s 10A(2) of the LGA. The minutes contained a statement that the public interest in preserving the confidentiality of the information supplied outweighed the public interest in openness and transparency.
The respondent also contended that the information contained in tenders is confidential information because it comprises proprietary information about a tenderer's systems and procedures which has intrinsic intellectual property value to each tenderer and is ultimately reflected in its price.
Value for money is described in clause 1.3 of the Council's Tender Evaluation and Probity Plan (Tab 1 of R4) as involving a "comprehensive assessment that takes into account cost represented by the assessment of price and value represented by technical assessment in the context of the risk profile presented by each Tender". The risk profile of each tender typically includes an assessment of a tenderer's financial viability, corporate history, significant litigation (past, present or pending), past performance, experience, qualifications and skills of resources, and corporate social responsibility: clause 5.6.3 of the Tender Evaluation and Probity Plan.
In the context of a competitive tender process where the Council is seeking "the most advantageous price for each project location", it is understandable that a tenderer will offer a competitive price which may be a departure from its otherwise advertised rates. This was acknowledged by Mr Male in his oral evidence. Additionally, in operating a sustainable business that is capable of delivering materials to the Council for the period of a contract term, a tenderer's price will be derived having regard to various components. Those components will logically include a tenderer's operating capacity depending upon how its business is structured with respect to its assets (including plant and vehicles for hauling material), labour, materials and testing of materials, insurances, registrations, licensing and compliance with work, health and safety laws. Other considerations include operating costs associated with implementing various systems and procedures to undertake appropriate risk assessment, the provision of safe work method statements, appropriate supervision, training and induction, emergency procedures, and environmental management. These and other considerations are all evident from reading the invitations to tender.
Having had the benefit of reading the material in Confidential Exhibits CR1, CR2 and CR3, without disclosing information contrary to s 107(1) of the GIPA Act, I am satisfied that in addition to pricing, the Documents Withheld variously contain sufficient proprietary, commercially sensitive and confidential information that was submitted in confidence, and on the basis that the information was confidential, and would be treated as such.
Exhibit R5 evidences Hurd's understanding that documents it submitted to the Council in tenders TQE 17/35 and TQE 16/16 were provided "in confidence". Hurd's submissions were that: 1. its tender documents were submitted to the Council on a confidential basis and on the basis that they would not be disclosed to any third party, especially not to one of its competitors; and 2. its tender documents include pricing which is sensitive information.
Hurd's submissions are persuasive. They provide objective evidence of a tenderer's understanding of the conditions in which a tenderer submits information and a tenderer's expectation and reliance upon that understanding that its tender submission will be regarded and managed as having been submitted in confidence. They strongly support the Council's arguments and contradict the applicant's contention that the information disclosed in tender submissions was not commercially sensitive or confidential. Hurd's objection to disclosure of its information is maintained despite the contract periods having expired in both TQE 17/35 and TQE 16/16.
Bayval objected to the release of the material it provided to the Council on the basis that the material was provided in confidence and on the express condition that it would be kept confidential. In particular, Bayval had "significant concerns" about pricing of materials, products and services which it considered to be commercially sensitive, being disclosed.
Bayval relied upon clause 1.4 in the Tender, the wording at the top of the statutory declaration on the Statement of Business Ethics and clause 5.2 in the Statement of Business Ethics on confidentiality.
Bayval said it was willing to agree to the release of certain pages of its tender but otherwise submitted that: 1. it had provided the Council with "confidential competitive information" under the condition that the information would be confidential, as expressly stated by the Council in multiple documents; 2. the supply of confidential information is necessary to keep the tender process competitive.

[22]

Findings on whether the information is confidential for the purpose of the first element

In characterising the nature of the material contained in the tender responses, the Hurd submission and the objections of Bayval and Holcim confirm that they consider that their tender responses contain commercially sensitive and confidential information. PBM's objection is less specific; however it is my view that disclosure of PBM's tender response contains information the disclosure of which would place PBM at a substantial commercial disadvantage in relation to other contractors, within the meaning of sub-clause (e) of the definition commercial-in-confidence, with the exception of disclosure of material test result as previously discussed.
Other tenderers, i.e. Sheridans, Balls Earthmoving, Thurgood and Coastal Earthmoving have not provided their views on the disclosure of their tender responses. Mindful of the requirement under s 107(1) of the Act that my reasons must not disclose any information for which there is an overriding public interest against disclosure, I will confine my characterisation of the information contained in tender responses to matters that I consider are commercially sensitive or which fall within the definition of "commercial-in-confidence" in Schedule 4 to the Act: 1. I am satisfied that the information in PBM's tender response to TQE 19/16 contains pricing, information on where materials are sourced, financial information relevant to insurance cover, materials testing, and information disclosing the details of its subcontractors all of which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which PBM has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors (noting however, in light of the applicant's submissions, and accompanying affidavit evidence, and for the reasons already given, I have decided to release PBM's materials testing information); 2. I am satisfied that the information in Sheridans' tender response to TQE 19/16 contains financial information relevant to insurance cover, pricing, information on sourcing materials and materials testing information all of which I consider to be commercially sensitive and confidential, as well as a substantial volume of proprietary documents containing intellectual property in which that contractor has an interest and matters the disclosure of which would place Sheridans at a substantial commercial disadvantage in relation to other contractors; 3. I am satisfied that the information in Bayval's tender response to TQE 19/16 contains pricing, information on sourcing materials, details of Bayval's financing arrangements and other financial information relevant to insurance cover, all of which I consider to be commercially sensitive and confidential and the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 4. Notwithstanding the information contained in Mr Arndell's affidavit, I am satisfied that the information in Arnway's tender response to TQE 19/16 contains pricing, information on sourcing materials, materials testing information and financial information relevant to insurance, all of which I consider to be commercially sensitive and confidential as well as proprietary documents containing intellectual property in which Arnway has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 5. I am satisfied that the information in Ball's Earthmoving's tender response to TQE 19/16 contains pricing, information on sourcing materials, and financial information relevant to insurance cover which I consider to be commercially sensitive and confidential, and the disclosure of that information would place Ball's Earthmoving at a substantial commercial disadvantage in relation to other contractors; 6. I am satisfied that the information in Thurgood's tender response to TQE 19/16 contains financial information relevant to insurance cover, pricing, information on sourcing materials and testing of materials information which I consider commercially sensitive and confidential, and the disclosure of that information would place Thurgood at a substantial commercial disadvantage in relation to other contractors; 7. Notwithstanding GME's disclosure of its tender response to the applicant and the Tribunal in these proceedings, I am of the view that the information in GME's tender response to TQE 19/16 contains pricing, information on sourcing materials, testing of materials information and financial information relevant to insurance that I consider to be commercially sensitive and confidential, and the disclosure of that information would place GME at a substantial commercial disadvantage in relation to other contractors; 8. I am satisfied that the information in Arnway's tender response to TQE 17/35 contains pricing, information on sourcing materials, and testing of materials information which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which Arnway has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 9. I am satisfied that the information in Holcim's tender response to TQE 17/35 contains pricing and information on sourcing materials which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which Holcim has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 10. I am satisfied that the information in Hurd's tender response to TQE 17/35 contains pricing and information on sourcing materials which I consider to be commercially sensitive and confidential, the disclosure of which would place Hurd at a substantial commercial disadvantage in relation to other contractors; 11. I am satisfied that the information in PBM's tender response to TQE 17/35 contains pricing, information on sourcing materials and financial information relevant to insurance which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which PBM has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 12. I am satisfied that the information in Hurd's tender response to TQE 16/16 contains pricing, information on sourcing materials, and testing of materials information which I consider to be commercially sensitive and confidential, the disclosure of which would place Hurd at a substantial commercial disadvantage in relation to other contractors; 13. I am satisfied that the information in PBM's tender response to TQE 16/16 contains pricing, information on sourcing materials, and financial information relevant to insurance which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which PBM has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors; 14. I am satisfied that the information in Coastal Earthmoving's tender response to TQE 16/16 contains pricing, information on sourcing materials and testing of materials information which I consider to be commercially sensitive and confidential, the disclosure of which would place Coastal Earthmoving at a substantial commercial disadvantage in relation to other contractors; 15. I am satisfied that the information in Arnway's tender response to TQE 16/16 contains pricing, information on sourcing materials, and testing of materials information which I consider to be commercially sensitive and confidential, as well as proprietary documents containing intellectual property in which Arnway has an interest and matters the disclosure of which would place it at a substantial commercial disadvantage in relation to other contractors.

[23]

Second element: Whether disclosure could "prejudice" the supply of information to the respondent in the future

The second element concerns whether the disclosure of the information could reasonably be expected to prejudice the supply of information to the respondent in the future. In line with the reasoning in Hurst at [60], prejudice under the GIPA Act has been held to have its ordinary meaning, that is, 'to cause detriment or disadvantage' or 'to impede or to derogate from'. The test is whether information of the kind in question facilitates the exercise of the respondent's functions and whether the disclosure of such information could reasonably be expected to impede the supply of such information: Flack at [52]. Prejudice is to be determined at a broad, operational level.
In Meriton Property Services Pty Limited & Ors v UrbanGrowth NSW [2017] NSWCATAD 71 (Meriton) at [87]-[88], the Tribunal found that the release of information that had been supplied under a confidential tender would prejudice the supply of confidential information to the agency in future tender processes.
In Medlyn v Commissioner of Police [2020] NSWCATAD 125 (Medlyn) at [88]-[89], Senior Member Higgins found that the remarks made by the Appeal Panel of the former Administrative Decision Tribunal applied to the public interest consideration against disclosure set out in cl 1(d) of the Table to the Act: "[88] In Director General, Department of Education & Training v Mullett (GD) [2002] NSWADTAP 13, at [58], the Appeal Panel of the former Administrative Decision Tribunal made the following remarks in regard to the exemption in cl 13(b)(ii) of the former Freedom of Information Act 1989 (NSW) (repealed): 58… [requires] the Tribunal to engage in a relatively abstract analysis. It must ask whether material of the kind sought to be protected on the present occasion would, if released, prejudice the supply of similar material to government in the future, as a matter of reasonable expectation. That requires the Tribunal to characterise the nature of the material sought to be protected on the present occasion; to identify the extent to which material of that kind can only be obtained, or can only reasonably be obtained, by confidential communication; the extent to which guarantees of confidentiality may be necessary. We agree with the dicta of Young CJ in Ryder v Booth [1985] VR 870 …: `The question then is, would disclosure of the information sought impair (ie damage) the ability of the [agency] to obtain similar information in future. … It may be noted that it is the ability of the [agency] that must be impaired. The paragraph is not concerned with the question whether the particular doctor whose report is disclosed will give similar information in future but with whether the agency will be able to obtain such information. …' [89] In my opinion, these remarks equally apply to the public interest consideration against disclosure set out in cl 1(d) of the Table to s 14(2) of the GIPA Act, as it is in similar terms to that of the exemption in cl 13(b)(ii) of the former Freedom of Information Act 1989."
More recently, in Walker v Northern Beaches Council [2021] NSWCATAD 251 at [139] the Tribunal cited Medlyn in considering whether information, if released, would prejudice the future supply of similar information: "In respect of whether the information would prejudice the supply to the respondent of confidential information that facilitates the effective exercise of the respondent's functions, the Tribunal must consider whether material of the kind sought to be protected would, if released, prejudice the supply of similar material in the future as a matter of reasonable expectation (Director General, Department of Education & Training v Mullett (GD) [2002] NSWADTAP 13 at [58] ; cited in Medlyn v Cmr for Police [2020] NSWCATAD 125 at [88]-[89]."
The applicant has conceded that it is likely that release of confidential information would be a matter taken into consideration by future tenders.
In the Council's submission, the submission of confidential information serves two purposes. First, it keeps the tender process competitive. Second, it allows the Council to be a well-informed buyer and make sound decisions regarding the contractors it chooses to do business with. The Council's view is that if it discloses tenderers' confidential information, it is less likely that tenderers will participate in the tender process in the future and it is less likely that they will voluntarily provide such information in the future.
In Mr Reeves' opinion, the disclosure of tender responses would reasonably be expected to result in a loss of trust in the Council and would adversely affect the Council's reputation in procurement processes more generally. This opinion is supported by Hurd's submissions and Bayval's objection.
Hurd's submission included a statement that if tender documents were disclosed to third party competitors as a consequence of GIPA applications, the company would have to think twice about what information it submitted to Council and that this would have an effect on Council's ability to obtain such tender submissions in the future.
Bayval objected to the release of confidential information on the basis if the information supplied to the Council in confidence is not kept confidential and is accessed by competitors, businesses would be extremely hesitant to reveal any sensitive information. Bayval also argued that allowing competitors to have access to confidential information of other tenderers would dissuade businesses from participating in tender processes and undermine the tender process.
The Council's opinion, shared by two other competitors, is not speculative, fanciful, imaginery or contrived (consistent with the reasoning in Leech and adopted in Flack). When considered at a broad operational level, the opinion is a matter of reasonable expectation, consistent with the decisions in Hurst, Searle and Page.
I am of the view that if the tender responses were to be released, it could reasonably be expected that a good proportion of potential tenderers would limit the level of detail they would be prepared to provide in future tender. The Council's reputation in procurement processes generally would be negatively impacted because of a reduction in trust about the Council's adherence to maintaining the confidentiality of tender responses.

[24]

Third element: Effect of disclosure on an agency's functions

The third element involves an evaluation of the effect of the effect of disclosure on the agency's functions.
I accept the Council's submission that its procurement of goods and services for the delivery of infrastructure to the local government area is an important function. Under s 24 of the LGA, a Council's function includes the following: 24 Provision of goods, services and facilities and carrying out of activities A council may provide goods, services and facilities, and carry out activities, appropriate to the current and future needs within its local community and of the wider public, subject to this Act, the regulations and any other law.
The LGA contains guiding principles relevant to a Council's function. Under s 8A(b) of the LGA, Councils "should carry out functions in a way that provides the best possible value for residents and ratepayers". Another guiding principle requires Councils to act "fairly, ethically and without bias in the interests of the local community": s 8A(h) of the LGA. Acting without bias requires a Council to ensure there is a level playing field for tenderers to compete fairly. This requires a Council to ensure the same conditions apply to all tenderers. Under s 55(1)(e) of the LGA, a Council must invite tenders before entering into any contract for the provision of goods or materials to the Council. As expressly stated in Council's documents (such as in clause 1.3 of the Tender Evaluation and Probity Plan in Tab 1 of Exhibit R4), the overall objective is to evaluate tenders and identify tenders demonstrating best value for money.
Hurd's submission supported the Council's arguments that release of the Documents Withheld would impair the Council's ability to obtain the best value for money for goods and services for the community by prejudicing the supply to Council of similar information in the future and undermining future procurement processes by reducing competition.
Overall, having examined each of the three elements as recommended in Collins, I am satisfied there is a real risk that, if the Documents Withheld were provided to the applicant, it would prejudice the supply of confidential information that facilitates the effective exercise of the Council's functions because tenderers would be less likely to provide information at the level of particularity and sensitivity in future tenders that has previously been provided. This could impair the ability of the Council to undertake a comprehensive assessment of the overall value proposition and risk profile presented by each tenderer. It could be reasonably be expected that this would have the effect of reducing the effectiveness of the Council's function to evaluate value for money propositions as part of its procurement function.
I give the public interest consideration under cl 1(d) significant weight against disclosure.

[25]

Clause 1(g) of the s 14 Table - found an action against an agency for breach of confidence or otherwise result in the disclosure of information provided to an agency in confidence

The Council relied upon cl 1(g) of the Table to argue that it could reasonably be expected that the release of the Documents Withheld could result in an action against it for breach of confidence.
I agree with the submission made on behalf of the applicant that the question to be considered is whether the information was provided to Council "in confidence".
It is ultimately a question of fact as to whether information was obtained "in confidence": AFW v WorkCover Authority of NSW [2013] NSWADT 51.
The Council relied upon the express statement in cl 1.4 in the TQEs that it would treat tender responses as "commercial-in-confidence" and would only release the names of successful tenderers, as an express promise. It also relied upon assurances in the Statement of Business Ethics that the information within tender responses would remain confidential.
Bayval's strong objection to the release of information said that it submitted information on the express condition that the information would be kept confidential, as outlined by the Council "expressly on multiple occasions". With reference to clause 5.2 of the Statement of Business Ethics, Bayval's view was that a reasonable person would expect the information to be confidential, and treated as such: "Bayval provided Kempsey Shire Council confidential competitive information under the condition that this information would be kept confidential, as expressly stated by Kempsey Shire Council itself numerous times in multiple documents."
Bayval also said that if the Council breached its own "express conditions of confidentiality" Bayval would suffer damage and the precedent it would set far outweighs any public interest in the provision of the information.
Bayval said that it would proceed with any appeal options available to them if its commercially sensitive and confidential information was disclosed.
Hurd's submissions were that its tender documents were submitted to the Council on a confidential basis and on the basis that they would not be disclosed to any third party, especially not to one of its competitors.
It would appear that Mr McKeon, who purchases material sourced from Bates Quarry, has no objection to Mr Male seeing any potential mark up on GME's pricing to the Council. However, that approach is unique to GME and is not shared by some other competitors.
Mr Reeves' evidence was that, even if not expressly stated, it is common knowledge that information provided within a tender submission is inherently confidential, that in his expectation each tenderer would assume the information would remain confidential, and that the information would be treated as confidential.
The applicant drew attention to the Tribunal's decision in Hopson v Commissioner of Police, NSW Police Force [2017] NSWCATAD 379 (recently cited in Thomson v Commissioner of Police [2021] NSWCATAD 53) where the tension between cl 1(g) and s 113 of the Act was discussed.
The applicant: 1. noted the tension that arises with s 113 of the GIPA Act which provides protection to an agency or an officer of any agency for breach of confidence where a decision to disclose government information is made in good faith; 2. argued that the issue to be considered is whether the information was provided to the Council in confidence; 3. argued that since cl 1(g) sits outside Schedule 1 to the Act, there is no conclusive presumption of an overriding public interest against disclosure and there will be circumstances where the information ought be released having regard to the public interest considerations in favour of disclosure (irrespective of the possibility that release of the information would have the effect of founding an action against an agency for breach of confidence).
The risk of a cause of action resulting is difficult to assess in light of s 113 of the Act.
Having read the information contained in the Documents Withheld, and taking into account the objections of Hurd, Bayval and Holcim, I am of the view that despite Mr McKeon's evidence, a reasonable person would assume that tender responses were documents that were provided to the Council "in confidence". I am of the view that tenderers, relying upon the statement in clause 1.4 of the TEQs and the assurances in the Statement of Business Ethics (specifically acknowledged by each tenderer in statutory declarations), have a right to expect that their information will be kept confidential unless there is an overriding public interest in disclosure.
In Meriton at [112], the Tribunal found that where information was provided in reliance on representations that it would be treated as confidential, release of the information could reasonably found an action for breach of an "obligation of confidence". I consider that the Council's expectation that disclosure of the information could found an action against it for breach of confidence is reasonably held, and is not irrational, absurd or ridiculous in line with the reasoning in Cockroft and Solomon. It is, however, not possible to know whether an action for breach of confidence would be successful.
I accordingly give this consideration against disclosure reasonable weight.

[27]

Clause 4(b) of the s 14 Table - reveal commercial-in-confidence provisions of a government contract

The definition of "government contract" in Schedule 4 to the Act captures the contracts formed between the Council and successful tenderers in the three tenders the subject of this application.
As already noted in these reasons, Schedule 4 also defines "commercial-in-confidence provisions" of a contract to mean any provisions of the contract that disclose the matters in sub-clauses (a) to (e) of the definition.
Mr Male argued that the test in cl 4(b) of the s 4 Table requires consideration of each part of the tender responses in order to determine whether the information is actually commercial-in-confidence. Then, he asserted, consideration must be given to whether non-disclosure of the information outweighs the public interest in favour of disclosure.
I have already accepted that process contracts were formed as a result of the tender process. The terms of those contracts are specified as being those within the TQEs and the tender responses submitted, consistent with the reasoning in Randwick City Council v Nancor Trading Co Pty Ltd [2002] NSWCA 108 at [35].
The issue is whether the tender responses contain commercial-in-confidence provisions as defined in Schedule 4 to the Act. Clearly, those provisions which reveal price, product information and systems of a proprietary nature having intellectual property value, are commercially sensitive and confidential. For the reasons discussed in relation to cl 1(d) and cl 1(g), I am of the view that the tender responses which form part of the resulting process contracts variously contain elements of information that come within the definition of "commercial-in-confidence provisions" in Schedule 4 of the Act.
Mr Male's interest is in the pricing. Otherwise, he acknowledged he has no interest in the information provided by tenderers in their tender responses. Having read the confidential material provided to me, setting aside GME's disclosure of its tender response, and taking into account the submissions and objections of Hurd, Holcim, PBM and Holcim, I am satisfied that the Documents Withheld contain elements of information that come within the definition of "commercial-in-confidence provisions". In particular, the pricing information as submitted by tenderers and the pricing analysis as contained within the Council's evaluation of tender documents, would if disclosed place the tenderers at a substantial commercial disadvantage in relation to other contractors or potential contractors, whether at present or in the future, within the meaning of sub-clause (e) in the definition of "commercial-in-confidence provisions" in Schedule 4 to the Act.
I am of view that the Council's reliance on cl 4(b) is justified and I give this consideration a substantial amount of weight.

[28]

Clause 4(c) of the s 14 Table - diminish the competitive commercial value of any information to any person

In order to establish that this consideration applies, it is necessary to establish that the information has a competitive commercial value and that, if so, it would be diminished if the information were disclosed. These are questions of fact to be determined.
According to the Tribunal in Nature Conservation Council v Department of Trade and Investment, Regional Infrastructure and Services (NSW) [2012] NSWADT 195 (Nature Conservation) at [160], the word "competitive" implies that the information would need to provide the person with a competitive edge.
The information will have a "commercial value" if it is valuable for the purposes of carrying on the business: Nature Conservation at [161].
In Media Research Group Pty Ltd v Department of Premier and Cabinet [2011] NSWADTAP 7 (Media Research) the Appeal Panel stated at [48]: "in our view, information of "commercial value" would ordinarily be information with a proprietary character, information of an internal character (such as specialised statistics) or information the product of some unique or special intellectual processes of a high order that might fall below the level of a "trade secret". There should, as we see it, be some uniqueness attaching to the information that justifies treating it as exclusive, secret or confidential."
Mr Male agreed that the "commercial value" of information would be information with a proprietary character and uniqueness justifying its exclusivity, secrecy or confidentiality, consistent with the reasoning in Media Research.
In Zonneyville at [77], the Tribunal found that disclosure could reasonably be expected to diminish the competitive commercial value of information where that information related to the relative strengths and weaknesses of tenderers, or was specific information about a company which could be used by competitors in future tender processes.
NSWQ is a competitor of the tenderers involved in TQE 19/16, TQE 17/35 and TQE 16/16 although it is noted that NSWQ did not provide a tender response to those tenders. NSWQ (previously known as NCS (NSW) Contracting Pty Ltd as per paragraph 74 of Exhibit A1) was successful in previous Council tenders (i.e. TQE 13/6 for the period from 1 June 2013 to 30 June 2014 and TQE 14/8 for the period from 1 September 2014 to 30 November 2014).
Mr Male argued that the information to which he seeks access is dated and no longer holds the commercial value it once held.
The respondent's counter argument was that TQE 19/16 was still current (at the time of the hearing, accepting that the tender period was advertised to end on 30 June 2021) and that it cannot be assumed that the supplier's pricing structures or methods of work have changed in any significant respect. In Meriton at [139]-[140], the Tribunal found that each piece of information provided by tenderers had competitive commercial value to them and that it did not cease to have this character just because the tender process had closed. Further, relying upon Mr Male's own evidence and my reading of the confidential material relating to all three tenders, pricing has not fluctuated markedly since TQE 16/16 and is fairly static.
Both parties agreed that the "commercial value" is to be determined by the Tribunal in an objective way taking into account the subjective view of the business party: Media Research at [44] "The question of whether an item of information has 'commercial value' is to be determined by the Tribunal in an objective way taking account of the subjective view of the business party…".
The respondent relied upon the material before the Tribunal that Hurd, Bayval and Holcim held the views that the information contained in their tender submissions is of commercial value which would, if disclosed, be diminished. In particular: 1. Holcim's objection included the following statement: "Finally, the document referred to at 3 above contains material that has been developed over a long period of time to ensure Holcim has a comprehensive Safety, Health and Environment system in place. This document is clearly not intended to be published in the public domain and if disclosed would cause substantial harm to Holcim's competitive position and would diminish the competitive commercial value of the information." 1. Bayval's objection included the following statement: "Releasing the information provided in confidence during the tendering process would diminish the commercial value of this information. Providing very specific details of assets, insurances, materials and other aspects of Bayval's business to the public including any potential competitors would be very likely to cause loss and/or damage to Bayval." 1. Hurd's submission included the following statement: "The tender documents include sensitive information, being Hurd's prices. The disclosure of such information would adversely affect Hurd's legitimate commercial interests."
PBM objected to having its tender submission in TQE 17/35 released on the grounds generally said to be the provisions in cl 4 of the s 14 Table (Business interests of agencies and other persons). PBM did not otherwise provide further details on the reason for its objection.
In Mr Reeves' view, the release of the Documents Withheld would reduce the value of the information to tenderers because it would be made available to competitors to use, meet and beat in future tenders. In his view, the risk was that future tender submissions would respond to known pricing as opposed to offering to provide services at the best commercial rate.
Based on my reading of the confidential material and taking into account the objections of third parties, I am of the view (consistent with the reasoning in Zonneyville) that the tender submissions contain competitive commercial information which, if disclosed, could reasonably be expected to diminish the competitive commercial value of that information to tenderers because it could be used by competitors in future tender processes. Consistent with the reasoning in Newcastle and Meacham, I consider that the Council's expectation that future tender submissions would respond to known pricing rather than elicit competitively priced bids, is reasonable and not a mere suspicion, since it is supported by logically probative material provided by Hurd, Bayval and Holcim.
I accept that release of the information could also reasonably be expected to diminish the competitive commercial value of information to the Council. This is because it could reasonably be expected that release of the information could lead to a reduction in competition, either through the reluctance of suppliers to participate or through knowledge of competitor pricing, resulting in future tender submissions failing to provide materials at the best commercial rate.
Accordingly, the respondent's reliance upon cl 4(c) is justified. I give this consideration against disclosure substantial weight.

[29]

Clause 4(d) of the s 14 Table - prejudice any person's legitimate business, commercial, professional or financial interests

The respondent argued that release of the Documents Withheld could reasonably be expected to prejudice the business, commercial, professional and financial interests of both the tenderers and the Council.
In Meriton at [148], the Tribunal found that the release of confidential tender information would prejudice the business interests of both the agency and the tender participants: "In my view that can be no doubt that the withheld information concerns the legitimate business, commercial or financial interests of both UrbanGrowth and the tenderers. The relevant question is whether the disclosure could reasonably be expected to prejudice those interests."
The applicant contended that having prices exposed may be the price that a supplier has to pay when the Council proposes to use funds to pay for that supplier's services. Further, Mr Male submitted that: 1. the Council's mere assertion of prejudice is not evidence of prejudice because of an expressed expectation that Council's reputation with prospective suppliers would be damaged if it released the Withheld Documents; 2. the protection of tenderers' prices is a secondary consideration to the public interest in overseeing the expenditure of public funds and exposing prices may be what a supplier should expect to occur in circumstances where the Council uses public funds to pay for that supplier's services.
The respondent argued that the fact that the applicant is a competitor of the third party tenderers increases the expectation that disclosure of the information would prejudice the legitimate commercial interests of the tenderers.
On the evidence of Mr Reeves, the release of the Documents Withheld would also be expected to prejudice the legitimate business, commercial and financial interests of the Council. Two reasons were given for this view, that it would be expected to: 1. damage Council's reputation with prospective suppliers generally; and 2. lead to a reduction in competition in future tender processes, either through the reluctance of suppliers to participate in tenders, or through knowledge of competitor pricing, thereby undermining future procurement processes.
In my view, as reasoned above, there can be no doubt that the information in the Documents Withheld concerns the legitimate business, commercial or financial interests of both tenderers and the Council. The relevant issue is whether the disclosure could reasonably be expected to prejudice those interests. I accept that any opinion regarding the likely effect of disclosure of information is somewhat speculative and is to be treated with caution. Nonetheless, the views of third parties are to be taken into account.
In Hurd's submission, the disclosure of its information would "adversely affect Hurd's legitimate commercial interests". More broadly, Hurd's submission contended that release of a tenderer's response could reasonably be expected to reduce the competitive commercial value of the information to the tenderer and prejudice their commercial, business and financial interests.
Bayval's strong objection included the following statement: "Releasing the information provided in confidence during the tender process would prejudice Bayval's legitimate business, commercial, professional or financial interests. As stated above, disclosing specific details of assets, insurances, materials and other aspects of Bayval's business to the public including any potential competitors would be very damaging to Bayval and their business."
Holcim objected to having its tender submission in TQE 17/35 released on the grounds that it would prejudice Holcim's legitimate business, commercial, professional or financial interests. Holcim argued that its legitimate business interests would be prejudiced if details of the company's supply capacities for its operations at various locations, pricing, the names of its subcontractors appointed under confidential subcontracts and product volumes were released.
Additionally, Holcim submitted that as a multi-national organisation with significant market share in the concrete and aggregates industry, the pricing of its products had a direct correlation to the volume of produce and services delivered and both were "sacred" to its business interests. Holcim further submitted that it must protect its product pricing, in compliance with national pricing regulations (although the applicable regulations were not further explained).
Holcim also expressed concern that disclosure of its information to a competitor would cause substantial harm to Holcim's competitive position: "The pricing of our products is sacred to the business interests of Holcim. As a multi-national organisation with significant market share in the concrete and aggregates industry, Holcim must protect disclosure of this information in compliance with national pricing regulations. The volume of product and services delivered is similarly sacred to the business interests of Holcim. Where pricing is often directly correlated to volume. The risk is further heightened where the applicant individual may be a competitor of Holcim who may be seeking to use Holcim's commercial sensitive information of Holcim to our disadvantage. If this is the case then there is a serious and undeniable probability that the disclosure of this information would prejudice the business interests of Holcim."
In weighing public interest considerations for and against disclosure, the disclosure of information cannot be made subject to any conditions on the use or disclosure of information (s 15 and s 73 of the GIPA Act). If information contained in the Documents Withheld is disclosed to the applicant, it would be open to him to disclose the information more broadly.
On the totality of the evidence before me, and taking into account the objections by Hurd, Bayval, Holcim and PBM, I am satisfied that disclosure of the information sought could reasonably be expected to prejudice the legitimate business, commercial professional or financial interests of both the tenderers and the Council.
Cl 4(d) is therefore a relevant consideration to which I attribute significant weight.

[30]

Conclusion

In making the correct and preferable decision, I am required to be satisfied that the respondent's Decision(s) were justified.
I am satisfied that the applicant is not interested in tenderers' commercial-in-confidence information as defined in Schedule 4 of the GIPA Act insofar as it relates to tenderers' proprietary or intellectual property information contained in such documents as safety and risk management systems, training, and financial information relating to insurance or plant and equipment assets.
It is clear that the applicant is only interested in tenderers' pricing and the Council's pricing analysis, and that he has a particular interest because he is a competitor in the industry and is interested in winning future tenders for the supply of materials to the Council.
I am satisfied that the applicant's arguments concerning the effective oversight of the expenditure of public funds are a legitimate and powerful argument in favour of disclosure. I am, however, of the view that the public interest in overseeing public expenditure cannot be intended to require the disclosure of pricing where the release of that information could reasonably be expected to have the effects described in cl 1(d), 1(g), 4(b), 4(c) and 4(d) in the s 14 Table.
Even if the proprietary information was redacted, disclosure to the applicant of the Documents would be futile since the pricing information would also be redacted for the reasons given.
I do not accept the applicant's argument that the Council has obscured the transparency of the tender process. I consider that the disclosure of the documents to the applicant (Exhibit R4) provide adequate insight into the Council's process for evaluating tenders.
I am satisfied that disclosure of the Documents Withheld would unconditionally disclose commercial-in-confidence and confidential information of third parties to a competitor in circumstances where the information was provided in confidence. I am satisfied that release of the information could reasonably be expected to reduce the competitive commercial value of the information to the tenderers and prejudice their commercial, business and financial interests. I am also satisfied that release of the information would prejudice the legitimate business, commercial, professional or financial interests of the Council because it would impair its ability to obtain best value for money for goods and services for the community by prejudicing the supply to Council of similar information in the future and undermine future procurement processes by reducing competition.
In the final analysis, having considered the evidence and the submissions, including reading the confidential material and having applied the principles in s 15 of the Act, I have concluded that on balance, the considerations against disclosure of the Documents Withheld outweigh those in favour of disclosure by a comfortable margin.
Accordingly, except for the release of the testing results for PBM in TQE 19/16 which I note the Council is prepared to release subject to giving notice to PBM of that course of action and the required consultation in accordance with s 54(6) of the Act, I am satisfied that the respondent's decisions were justified and there is an overriding public interest against disclosure of the Documents Withheld.

Parties

Applicant/Plaintiff:

Male

Respondent/Defendant:

Kempsey Shire Council

Legislation Cited (7)

Administrative Tribunal Act 2013(NSW)

Under the Local Government Act 1993(NSW)

Freedom of Information Act 1989(NSW)

Government Information (Public Access) Act 2009(NSW)

Administrative Decisions Review Act 1997(NSW)

Civil and Administrative Tribunal Act 2013(NSW)

Local Government Act 1993(NSW)

Cases Cited (33)

11] NSWADT 307 Leech v Sydney Water Corporation [2010] NSWADT 198 Manly v Ministry of Premier and Cabinet (1995) 14 WAR 550 Meacham v Commissioner of Police [2020] NSWCATAP 107 Media Research Group Pty Ltd v Department of Premier and Cabinet [2011] NSWADTAP 7 Medlyn v Comissioner of Police [2020] NSWCATAD 125 Meriton Property Services Pty Limited & Ors v UrbanGrowth NSW [2017] NSWCATAD 71 Minister for Immigration & Ethnic Affairs v Pochi (1980) 44 FLR 41 Nature Conservation Council v Department of Trade and Investment, Regional Infrastructure and Services (NSW) [2012] NSWADT 195 Newcastle City Council v Newcastle East Residents Action Group [2018] NSWCATAP 254 Page v Commissioner of Police [2020] NSWCATAD 163 Randwick City Council v Nancor Trading Co Pty Ltd [2002] NSWCA 108 Raven v University of Sydney [2015] NSWCATAD 104 Ryder v Booth [1985] VR 870 Solomon V Corrective Services NSW [2016] NSWCATAD 257 South Coast Hunters Club v Eurobodalla Shire Council [2018] NSWCATAD 42 Sullivan v Civil Aviation Authority (2014) 22 FCR 555; [2014] FCAFC 93 Taylor v Office of Destination NSW [2018] NSWCATAD 195 Thomson v Commissioner of Police [2021] NSWCATAD 53 Transport for NSW v Searle [2018] NSWCATAP 93 Walker v Gosford City Council [2016] NSWCATAD 207 Walker v Northern Beaches Council [2021] NSWCATAD 251 YG and GG v Minister for Community Services [2002] NSWCA 247 Zonneyville v NSW Department of finance and Services [2015] NSWCATAD 175 Category: Principal judgment Parties: Peter Male (Applicant) Kempsey Shire Council (Respondent) Representation: Counsel: Bryce Douglas-Baker (Applicant)

The task of the Tribunal

The Tribunal's task is to make the "correct and preferable decision", having regard to the material before it including any factual material and any applicable written or unwritten law, as to whether access to the Documents Withheld should be given to the applicant: s 63 of the Administrative Decisions Review Act 1997 (NSW) (the ADR Act). The Tribunal re-makes the decision, as if it were the administrator: Commissioner of Police v Danis [2017] NSWCATAP 7 at [31]. However, the time at which the determination is to be made as to the correct and preferable decision is the date and time that the Tribunal makes its decision: YG and GG v Minister for Community Services [2002] NSWCA 247 at [25].
It is well established that, in considering an application for review, the Tribunal is not constrained to have regard only to the material that was before the respondent but may have regard to any relevant material before the Tribunal at the time of its review: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409. In this regard, in addition to the material that was before the respondent, the Tribunal had before it the submissions and affidavit evidence filed in the proceedings by each of the parties, a submission pursuant to s 104(3) of the Act from Hurd (being a party who could be aggrieved by the Tribunal's decision in these proceedings), objections from Bayval, Holcim and PBM, the applicant's oral evidence, the oral evidence of Mr Reeves on behalf of the respondent, oral submissions on behalf of each party and Mr Reeves' statutory declaration provided to the Tribunal after the hearing. The Tribunal also had before it confidential material filed by the respondent and provided only to the Tribunal (not read by the applicant or the applicant's legal representative).
In determining the application, the Tribunal may affirm the decision, vary the decision, set aside the decision and make another decision in substitution for the decision set aside, or set aside the decision and remit the matter for reconsideration by the respondent in accordance with any directions or recommendations of the Tribunal: s 63 of the ADR Act.

Persons exercising rights under s 104 of the GIPA Act

Section 104(3) of the Act recognises the right of a person who could be aggrieved by an administrative review decision of the Tribunal, to appear and be heard in proceedings before the Tribunal. As affirmed in Forbidden Foods at [55], citing Walker v Gosford City Council [2016] NSWCATAD 207 at [31], a person aggrieved has the right to "ventilate any arguments in support of their position or otherwise".
Hurd submitted tender responses to the Council in TQE 17/35 and TQE 16/16 and exercised its right to be heard in this review. Hurd's submission (Exhibit R5) opposed the disclosure to the applicant of documents that Hurd says were submitted to the Council in confidence.

Balancing the competing public interests

Before deciding whether to release or withhold information, an agency must apply the public interest balancing test set out in s 13 of the Act, and decide whether or not an overriding pubic interest against disclosures exists in regard to the information sought. The balance is always weighted in favour of disclosure, unless outweighed by considerations against disclosure: "There is an overriding public interest against disclosure of government information for the purposes of this Act if (and only if) there are public interest considerations against disclosure and, on balance, those considerations outweigh the public interest considerations in favour of disclosure."
How to apply the public interest test under s 13 of the Act was confirmed in Flack v Commissioner of Police, New South Wales Police [2011] NSWADT 286 (Flack) at [19]: "Accordingly, in all cases other than those falling under the terms of Sch 1, the public interest test under the GIPA Act involves the following: (a) identifying the public interest in favour of disclosure; (b) identifying the public interest against disclosure; and (c) determine where the balance lies."
Further guidance on weighing public interest considerations for and against disclosure was provided in Hurst v Wagga Wagga City Council [2011] NSWADT 307 (Hurst) at [94]: "Ultimately, the balancing of these competing interests is a question fact and degree, requiring the weighing of competing matters, and is a task that is not amenable to mathematical calculation."
The balancing exercise requires the Tribunal to make a broad value judgment: Transport for NSW v Searle [2018] NSWCATAP 93 (Searle) at [104], as cited in Page v Commissioner of Police [2020] NSWCATAD 163 (Page) at [51]: "that judgment is to be made, not in a vacuum, but instead in a context which has regard to the objects of the legislation, the general presumption in favour of disclosure of government information, and the principles set out in s 15 of the GIPA Act: Transport for NSW v Searle [2018] NSWCATAP 93 at [104]."

Meaning of "could reasonably be expected to"

Each of the public interest considerations relied upon by the respondent contains the introductory words "could reasonably be expected to have one or more of the following effects…".
The words "could reasonably be expected to" are to be given their ordinary meaning: Attorney General's Department v Cockroft (1986) 10 FCR 180 (Cockroft) at [190], per Bowen CJ and Beaumont JJ (as cited with approval by Senior Member Montgomery in Solomon v Corrective Services NSW [2016] NSWCATAD 257 at [22]-[30]): "In our opinion, in the present context, the words "could reasonably be expected to prejudice the future supply of information" were intended to receive their ordinary meaning. That is to say, they require a judgment to be made by the decision-maker as to whether it is reasonable, as distinct from something that is irrational, absurd, or ridiculous, to expect that those who would otherwise supply information of the prescribed kind to the Commonwealth or any agency would decline to do so if the document in question were disclosed under the Act. It is undesirable to attempt any paraphrase of these words. In particular, it is undesirable to consider the operation of the provision in terms of probabilities or possibilities or the like …"
The words "could reasonably be expected to" have been held to require "something more than a mere risk or chance. It must be based on real and substantial grounds, and it must not be purely speculative, fanciful, imaginary or contrived": Leech v Sydney Water Corporation [2010] NSWADT 198 (Leech) at [28], adopted in Flack at [41]-[42].
Page referred to the principles to be applied when considering whether disclosure of information "could reasonably be expected" to have a particular effect, drawing from the Tribunal Appeal Panel's decision in Searle at [68]: "(1) The appellant bore the onus of establishing the existence of one or more of the relevant public interest considerations against disclosure in cl 1 of the Table in s 14 of the GIPA Act: see s 105. (2) The words "could reasonably be expected" are to be given their ordinary meaning. They require a judgment to be made by the decision-maker as to whether it is reasonable, as distinct from something that is irrational, absurd or ridiculous, to expect that disclosure would have the relevant effect: Attorney-General's Department v Cockcroft (1986) 10 FCR 180 at 190.5; Raven v University of Sydney [2015] NSWCATAD 104 at 48. (3) In order to discharge the onus, the appellant needed to show more than a mere possibility, risk or chance of prejudice. It must be based on real and substantial grounds: Australian Vaccination Network v Dept of Finance & Services [2013] NSWADT 60 at [22]. (4) It will not be sufficient for the decision-maker to proffer the view. It must be supported in some way: Manly v Ministry of Premier and Cabinet (1995) 14 WAR 550 at 573G; Raven at [53]."

Meaning of "prejudice"

Page also relied on the decision in Hurst at [60] as affirmed in Searle at [68] to understand the meaning of "prejudice" and how to determine whether the disclosure of information could reasonably be expected to prejudice the future supply of information at a broad operational level: "(5) "Prejudice" is to be given its ordinary meaning, that is, to cause detriment or disadvantage, or to impede or derogate from: Hurst v Wagga Wagga City Council [2011] NSWADT 307 at [60]. (6) The question as to prejudice to future supply was not to be determined by reference to the particulars of the instant situation. It was not necessary to show that it could reasonably be expected to occur on every occasion. It was to be determined at a broader operational level. Hence, the fact that in the instant situation the specific individual(s) supplying the information was unlikely to be inhibited even if there was disclosure was not determinative against the agency: NSW Police Force v Camilleri (GD) [2012] NSWADTAP 19 at [21], [22] and [26]."
The occurrence of the prejudice does not have to be established on the balance of probabilities but there must be something more than a possibility, risk or chance of the event occurring: Cockroft per Bowen CJ and Beaumont at [106].

Standard of proof (balance of probabilities) and evidentiary requirements

The standard of evidence required to establish that disclosure could reasonably be expected to have a nominated effect, was considered in Newcastle City Council v Newcastle East Residents Action Group [2018] NSWCATAP 254 (Newcastle) at [59]: "Based on these authorities when considering the evidence on which it is asserted that disclosure "could reasonably be expected" to have a particular effect, the following principles should be kept in mind: (1) a mere statement that disclosure could reasonably be expected to have a particular effect is insufficient; (2) there must be real and substantial grounds supporting an opinion that disclosure could reasonably be expected to have a particular effect; (3) prominence should be given to inferences capable of being drawn from established facts, rather than on the subjective views of witnesses."
The Appeal Panel in Meacham v Commissioner of Police [2020] NSWCATAP 107 (Meacham) at [54] and [83] summarised the requirements for proof of questions of fact in administrative review proceedings generally: "[54] Despite not being bound by the rules of evidence, the Tribunal is required to base its findings of fact on "logically probative material", and not on "mere suspicion or speculation", as a corollary of its obligation to act reasonably: Minister for Immigration & Ethnic Affairs v Pochi (1980) 44 FLR 41 (Pochi) at 62, 68 (Deane J); [1980] FCA 85 ; Sullivan v Civil Aviation Authority (2014) 22 FCR 555; [2014] FCAFC 93 (Sullivan) at [5]-[8], [15]-[17] (Logan J). It is an error of law for the Tribunal to make a finding of fact with no evidence, or no probative evidence, to support it. … [83] Proof of matters which are asserted is required in a practical sense, and a party asserting a fact is generally required to provide evidence to substantiate it. As noted above, the Tribunal is required to base its findings of fact on "logically probative material": Pochi at 62, 68; Sullivan at [5]-[8], [15]-[17]."

The respondent has the burden of establishing that its decision is justified

Under s 105(1) of the GIPA Act, the Council has the burden of establishing that its decisions are justified. The Council is obliged to justify its decision through submissions and evidence, sufficient to satisfy the Tribunal: Taylor v Office of Destination NSW [2018] NSWCATAD 195 at [20]; Forbidden Foods Pty Ltd v Rice Marketing Board of New South Wales [2020] NSWCATAD 18 (Forbidden Foods) at [52].

(1986) 10 FCR 180

(1979) 46 FLR 409

(1997) 76 FCR 151

(1995) 14 WAR 550

(1980) 44 FLR 41

(2014) 22 FCR 555