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[2011] AATA 907
General information, not legal advice.
Administrative Appeals Tribunal of Australia
2011-12-16
Original judgment source is linked above.
CATCHWORDS - FREEDOM OF INFORMATION - internal working documents - documents setting out possible settlement scenarios - whether access contrary to the public interest - public policy underlying encouragement of settlement of disputes without litigation - exempt.
FREEDOM OF INFORMATION - secrecy provisions - meaning of "disclosure" - applicant's knowledge of documents or information irrelevant - a de-registered company can be an "entity".
FREEDOM OF INFORMATION - secrecy provisions - whether excluded from relevant provision as already available to the public - regard to be had to all relevant material including legislative provisions and factual background bearing in mind that the decision-maker carries a burden of proof - decision set aside in part.
FREEDOM OF INFORMATION - secrecy provisions - whether excluded from relevant provision as decision-maker under a duty to disclose - identification of duties and when exist - inter-relationship of ss 38(1) and (1A) - decision affirmed.
FREEDOM OF INFORMATION - deletion of irrelevant material - what is "possible" and "reasonably practicable" - decision affirmed.
WORDS AND PHRASES - "disclosure", "entity".
Evidence Act 1995 ss 131, 138(1)(a)
Financial Services and Markets Act 2000 ss 348, 349
Freedom of Information Amendment (Reform) Act 2010 s 3 and item 28 of Part 2 of Sch 3
Freedom of Information Act 1992 (Vic) ss 28, 29A, 31(3), 33, 50(4)
Income Tax Assessment Act 1936 ss 16(2), 170BB, 263, 264, 267
Income Tax Assessment Act 1997 ss 1-7, 330-A, 330-C, 330-J, 330-15(2), 330-95, 330-235, 330-495, 703-10, 995-1(1), 960-100(1)
Mineral Resources Development (Sustainable Development) Act 2006 (Vic)
Taxation Administration Act 1953 ss 3A, 3AA(2), 4, 4A(1), 8C, 14ZAA(2), 14ZAAA, 14ZAF, 14ZAI, 14ZAH, 14ZAJ, 14ZAM, 14ZAQ, 14ZAR(1), 14ZAS, 14ZAU, 14ZZO and Sch 1, 355-25, 355-30, 355-35, 355-45, 355-55, 355-155, 355-265, 357-60(1), 357-65, 357-70(1), 357-70(2), 357-110(2), 359-15, 359-20(2), 359-60, 359-65(1), 359-65(2)
Taxation Laws Amendment (Improvements to Self Assessment) Act (No. 2) 2005 s 3 and Sch 2
Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010 ss 2, 3, 123(3) and Sch 1, Sch 2
Corporations Regulations 2001 r 9.1.01
Financial Management and Accountability Regulations 1997 r 5(1) and Sch 1, Item 127
Botany Bay City Council v Minister for Transport and Regional Development [1996] FCA 1507; (1996) 137 ALR 281
Canadian Pacific Tobacco Co Ltd v Stapleton [1952] HCA 32; (1952) 86 CLR 1
Collins v Parker Unreported, SC (NSW), 11 May 1984
Commonwealth of Australia v Lyon (1979) 24 ALR 300
Danvers v Commissioner for Railways (NSW) [1969] HCA 64; (1969) 122 CLR 529
Deputy Commissioner of Taxation v Australian Securities and Investments Commission [2011] FCA 203
Director of Public Prosecutions v Smith [1991] VicRp 6; [1991] 1 VR 63; (1991) 100 FLR 6
Dun & Bradstreet (Australia) Pty Ltd v Lyle (1977) 15 SASR 297
Ellison v Vukicevic (1986) 7 NSWLR 104
Environment Protection Agency v Mink [1973] USSC 17; 410 U.S. 73 (1973)
Esso Australia Resources Ltd v Federal Commissioner of Taxation (1998) 98 ATC 4768
Foster v Federal Commissioner of Taxation (1951) 82 CLR 606
Harris v Australian Broadcasting Corporation and others [1983] FCA 242; (1983) 50 ALR 551; 5 ALD 545
Harris v Australian Broadcasting Corporation (No.2) [1983] FCA 281; (1983) 50 ALR 567; 78 FLR 264; 5 ALD 560
Hatzimanolis v ANI Corporation Ltd [1992] HCA 21; (1992) 173 CLR 473; 106 ALR 611
Hong Kong Bank of Australia Ltd v Murphy (1992) 28 NSWLR 512
Illawarra Retirement Trust v Secretary, Department of Health and Ageing [2005] FCA 170; (2005) 143 FCR 461; 218 ALR 384; 85 ALD 24
Kavvadias v Commonwealth Ombudsman (No.2) [1984] FCA 179; (1984) 2 FCR 64; 54 ALR 285; 6 ALD 198
Kelly v JRA Ltd (1990) 92 ALR 651
King v The Queen [2003] HCA 42; (2003) 215 CLR 150; 199 ALR 568
London Artists Ltd v Littler [1968] EWCA Civ 3; [1969] 2 QB 375
McKinnon v Secretary, Department of Treasury [2005] FCAFC 142; (2005) 145 FCR 70
McKinnon v Secretary, Department of the Treasury (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516
Nakhl Nasr v State of New South Wales [2007] NSWCA 101
O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210
R v Abdul Nacer Benbrika [2009] VSC 142
R v Gidlow [1983] 2 Qd R 557
R v Skeen and Freeman [1859] EngR 90; (1859) Bell 97; 169 E.R. 1182
Real Estate Opportunities Limited v Aberdeen Asset Managers Jersey Limited [2007] EWCA Civ 197
Re Booker and Department of Social Security [1990] AATA 218
Re Bracken and Minister for Education and Youth Affairs [1985] AATA 8; (1984) 7 ALD 243; 2 AAR 406
Re Carver and Department of the Prime Minister and Cabinet (1987) 6 AAR 317; 12 ALD 447
Re Chapman and Minister for Aboriginal and Torres Strait Islander Affairs (1996) 43 ALD 139
Re Galileo Group Ltd [1999] Ch 100
Re Howard and Treasurer of the Commonwealth of Australia (1985) 7 ALD 626
Re James and Others and Australian National University (1984) 6 ALD 687
Re Lobo and Department of Immigration and Citizenship [2010] AATA 583; (2010) 116 ALD 639; 52 AAR 304
Re Lordsdale Finance Limited and Department of the Treasury [1985] AATA 174
Re McKinnon and Secretary, Department of Prime Minister and Cabinet [2007] AATA 1969
Re Murtagh and Commissioner of Taxation [1984] AATA 249; (1984) 54 ALR 313; 6 ALD 112
Re Radar Investments Pty Ltd and Health Insurance Commission [2004] AATA 166; (2004) 80 ALD 733
Re Smith and Aboriginal and Torres Strait Islander Commission [2000] AATA 512
Re Smith, Kline and French Laboratories (Australia) Ltd and Others v Secretary, Department of Community Services [1991] FCA 150
Re Waterford and Department of the Treasury (No.2) [1984] AATA 67; (1984) 5 ALD 588
Re Waterford and Treasurer of the Commonwealth (No.1) (1984) 6 ALN N347
Re Waterford and Treasurer of the Commonwealth of Australia (No.2) [1985] AATA 114; (1985) 8 ALN N37
Re Young and Commissioner of Taxation [2008] AATA 155; (2008) 100 ALD 372
Shields v Overland [2009] VSC 550
United Service Insurance Co Ltd (In Liq) v Lang (1935) 35 SR (NSW) 487
Village/Nine Network & Ors v Mercantile Mutual [1999] QCA 276
Wallis v Downard - Pickford (North Queensland) Pty Ltd [1994] HCA 17; (1994) 179 CLR 388; 120 ALR 440
Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492
Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
Shorter Oxford English Dictionary, 5th edition, 2002, Oxford University Press
DECISION AND REASONS FOR DECISION [2011] AATA 907
(1) to affirm that part of the decision of the respondent dated 2 December 2010 affirming its earlier decision dated 28 September 2008 except in so far as it claims exemption either in whole or in part for the documents identified in the Schedule of Documents dated 1 December 2011 equating to Documents 519, 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 as identified in the Schedule of Documents dated 24 November 2011; and
(2) in relation to that part of the decision of the respondent dated 2 December 2010 affirming its earlier decision dated 28 September 2008 that claims exemption either in whole or in part for the documents identified in the Schedule of Documents dated 1 December 2011 equating to Documents 519, 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 as identified in the Schedule of Documents dated 24 November 2011, to:
(i) Document 519 is excluded from access under s 12 of the Freedom of Information Act 1982; and
(ii) Documents 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 are not exempt under s 38 of the Freedom of Information Act 1982.
The documents requested by Pratt Consolidated Holdings Pty Ltd (Pratt Holdings) under the Freedom of Information Act 1982 (FOI Act) relate to a mining joint venture in 1998 between Lonsdale Mineral Exploration No 1 Pty Ltd (LME1) and Lachlan Resources NL (Lachlan) (Joint Venture) and arranged by Allco Finance Group Limited (Allco), through its subsidiary, Minex Financial Services Pty Ltd.[1] The Australian Taxation Office (ATO) has claimed that almost 700 documents are exempt, either in whole or in part, from access under the FOI Act. I have decided that, except in relation to 12 documents, the ATO has correctly claimed exemption. In relation to Document 519, I have decided that the ATO has properly refused access but for a different reason. It is not exempt under s 38 as the ATO decided but the ATO did properly refuse access to it as it is open to public access in accordance with another enactment. Therefore, access is excluded under s 12 of the FOI Act. I have decided that Documents 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 are not exempt under s 38 as the ATO has claimed. Each is an ASIC form that either appears to have been completed (and may or may not have been lodged in that form) or is incomplete. On the evidence, I am not satisfied that the information in the documents is prohibited from disclosure under s 355-25 in Schedule 1 of the TA Act, and so exempt under s 38 of the FOI Act, because I am not satisfied that the ATO has established that a decision to that effect is justified. I am not satisfied because it has not satisfied me that the exception found in s 355-45 to the prohibition in s 355-25 is not applicable in the particular circumstances of information in ASIC Forms that are likely to have been lodged.
2. For ease of reading, I have set out the background in the body of the reasons and considered the particular exemptions and further detail in Attachments as below:
Part IVAA of the Taxation Administration Act 1953 (TA Act)
Provisions of Schedule 1 of TA Act applying to Private Ruling
Exemption claimed under s 36: internal working documents
3. For the purposes of this matter, I note that the Joint Venture involved them in carrying out exploration or prospecting for minerals on four tenements controlled by Lachlan. It is not necessary for me to consider whether LME1 and Lachlan reached any further agreement regarding mining on those tenements. At the time, LME1 was a wholly owned subsidiary of another company in a group of companies; Visy Investments Pty Ltd (VI). Much later, that group was to become a consolidated group of companies headed by Pratt Holdings. I will refer to it as the Pratt Group.
4. On 27 January 1998, three companies asked the Commissioner of Taxation (Commissioner) for a Private Ruling under the Taxation Administration Act 1953 (TA Act) relating to the taxation implications of the Joint Venture.[2] Those three companies were LME1, Lachlan and Archaean Gold NL (Archaean), which was a wholly owned subsidiary of Lachlan. On 26 February 1998, the Commissioner issued a Private Ruling that, on the information provided, the exploration and capital expenditure incurred by LME1 in connection with the Joint Venture would be deductible and that LME1 might be entitled to claim a balancing adjustment deduction on disposal of the tenements under subdivision 330-J of the Income Tax Assessment Act 1997 (ITAA97).
5. On 10 March 1998, LME1 and Lachlan executed the Joint Venture agreements. For an acquisition price of $19.6m, Lachlan agreed to provide LME1 with a participating interest in the four tenements. LME1 treated some $18.5m of its acquisition price as allowable capital expenditure. Under a Put and Call Option Deed, LME1 had an option to require Archaean to acquire its interest in the tenements under certain circumstances. On 14 May 1999, LME1 exercised its option.
6. LME1 claimed deductions in respect of losses it had incurred in respect of the 1998 and 1999 tax years. In particular, it claimed the loss it incurred on disposing its interest in the tenements as a balancing adjustment deduction. The loss was the difference between the capital proceeds on the transfer and the undeducted allowable capital expenditure. Tax losses of $1,912,747 and $21,504,589 were transferred to nine other wholly owned companies in the Pratt Group (the group of nine) in the 1998 and 1999 years respectively. The Commissioner allowed deductions in respect of those losses.
7. On 20 July 1999, Lachlan acquired all but one of the ordinary shares VI held in LME1. It acquired the last share in May 2000. On 18 February 2002, LME1 was deregistered.
The Commissioner's investigation of Allco exploration joint ventures
8. Twelve days earlier, on 6 February 2002, the Commissioner commenced its investigation of Allco exploration joint ventures including that it had arranged between LME1 and Lachlan. Between 2003 and 2006, the Commissioner audited LME1's involvement in the Joint Venture. In doing so, it conducted a number of access visits under s 267 of ITAA36 and sought information under s 264 from, among others, the participants in the Joint Venture.
9. The ATO issued a Position Paper to Lachlan on 29 June 2006. In that paper, the ATO took the position that LME1 was not entitled to a balancing adjustment deduction. The Position Paper made no reference to the Private Ruling. On 5 September 2006, the ATO sent Lachlan a copy of a letter dated 29 June 2006, which had not accompanied the Position Paper as intended. In essence, the letter told Lachlan that the Private Ruling was not binding because it was issued on the assumption that LME1 would carry on a mining business but that it had not done so.
10. The Commissioner conducted an audit between 2002 and 2006. As a result of the audit, he issued assessments for the 1999 tax year to each of the companies in the Pratt Group to whom LME1's tax losses had been transferred. He took the view initially that LME1 did not satisfy the tests set out in the table at s 330-15(2) of ITAA97. Therefore, it was not entitled to a deduction in respect of the exploration expenditure under subdivision 330-A, a deduction for capital expenditure under subdivision 330-C or any balancing adjustment deduction under subdivision 330-J. After discussions between the ATO and Pratt Holdings on 24 August 2007, the Commissioner revised his view and decided to allow the claims for deduction for exploration expenditure. He maintained his view that LME1 was not entitled to a balancing adjustment deduction under subdivision 330-J. On 18 February 2008, the Commissioner issued assessments to the group of nine to give effect to the conclusion he had reached.
11. Each of the relevant companies in the Pratt Group lodged Objections on 21 April 2008 contending that the Joint Venture had been entered and carried out in the way described in the application for a Private Ruling by LME1 and its joint venturers. The Commissioner has since made Objection Decisions disallowing the Objections.
12. I have set out the requests made by Pratt Holdings in Attachment A. In summary, it requested access to documents relating to:
(1) the Private Ruling made on the application by LME1 and its joint venturers; and
(2) the views of the ATO concerning the operation and/or application of Division 330 as it appeared in the ITAA97 and the amendments to that Division introduced by the Taxation Laws Amendment Act (No 3) 2003.
13. The ATO has grouped the documents it has identified as coming within the scope of the two requests and which remain in dispute, either in whole or in part, between the parties. They are set out in the affidavits of Mr Henry Bock sworn on
7 and 8 July 2011. I have examined the documents, which have been submitted, and agree with Mr Bock's description and classification. It is set out in more detail in Attachment B but, in summary, at the time the hearing commenced[3] was:
689 documents concerning the ATO's audit, investigation and consideration of the deductibility of the losses transferred from LME1 to the group of nine; and
31 documents concerning the Private Ruling issued to LME1 on
14. Sixteen documents come within both sets of proceedings. They are identified in Mr Shaw's affidavit dated 30 June 2011[4] but it is not necessary to identify them further.
15. Section 11(2) of the FOI Act makes it clear that any reasons a person gives for seeking access to documents do not affect that person's right of access. That person's reasons are one thing and his, her or its identity is another. Identity will be relevant in deciding whether certain exemption provisions apply. So, for example, identity is important in the context of the exemption provided for in s 41 of the FOI Act. The exemption protecting personal information from unreasonable disclosure does not apply by reason only of its containing matter relating to the person requesting it. The same is true for personal information in documents whose disclosure would otherwise be subject to a secrecy provision of the sort referred to in s 38 and to business affairs information under s 43. In this case, the reasons are relevant in considering s 38 of the FOI Act.
16. Mr Janes, who is a Director of the Pratt Group's tax adviser, Deloitte Touche Tohmatsu Ltd (Deloitte), gave evidence that the Pratt Group had been at a substantial disadvantage in pressing its case that the Objections should be allowed. That followed from the group's view that the ATO had not fully explained its reasons for reaching its view that denying the balancing adjustment deduction to LME1, and so to the group of nine, is consistent with the Private Ruling. Having noted that the group of nine will carry the onus of proof under s 14ZZO of the TA Act, Mr Janes contended that:
(1) it is a denial of natural justice to withhold from the Pratt Group documents that are likely to assist it to understand how the ATO reached its conclusions and made its decisions;
(2) the ATO has not given it contemporaneous documents supporting its conclusions;
(3) the Pratt Group needs to be given access to all of the documents and files created by the officer in the ATO who considered LME1's application for a Private Ruling so that it can see whether the Private Ruling was unfavourable, partly favourable or wholly favourable to LME1; and
(4) the Pratt Group needs to have the same documents and information as has been considered by the ATO so that it can discharge its onus of establishing that the assessments issued by the Commissioner are excessive.
17. In so far as it applies to a document of an agency,[5] s 11(1)(a) of the FOI Act provides that "Subject to this Act, every person has a legally enforceable right to obtain access in accordance with this Act to ... a document of an agency, other than an exempt document ...". In so far as it is relevant in this case, an "exempt document" is "a document which, by virtue of a provision of Part IV, is an exempt document".[6] Part IV sets out a number of provisions exempting documents from disclosure. In interpreting those provisions, regard must be had to s 32. It provides that they are not to be construed as limited in their scope or operation in any way by any other provision of Part IV. Furthermore, they are not to be construed as not applying to a particular document because another provision of Part IV also applies to that document. Only two of the provisions in Part IV are in issue in this case: ss 36 and 38. Section 36 exempts documents commonly referred to as internal working documents. Section 36 exempts documents to which secrecy provisions of other enactments apply.
18. Since Pratt Holdings made its requests, the FOI Act has been significantly amended by the Freedom of Information Amendment (Reform) Act 2010[7] (FOI Amendment Act). Although the amendments have not made any significant alteration to s 38 so far as this case is concerned, they have repealed s 36 and substituted an alternative regime in relation to documents to which it previously related. The amendments apply, however, only in relation to requests for access made under s 15 of the FOI Act and received on or after 1 November 2010. That is the effect of section 3 and item 28 of Part 2 of Schedule 3 of the FOI Amendment Act. Therefore, I have reviewed the decisions made by on the basis of the exemption provisions as they applied before their amendment.
19. In its first request dated 29 April 2010 addressed to the ATO,[8] Pratt Holdings requested access to three groups of documents. In summary, they are:
(1) the records of meetings of the Large Business and Internationals Mining and Petroleum Industry Specialist Cell from 1 January 1996 to 31 December 2010 relating to:
(a) the operation or application of Division 330 of the Income Tax Assessment Act 1997 (ITAA97) both before and after it was amended by the Taxation Laws Amendment Act (No 3) 2000 (TLAA);
(b) the impact of the judgment of the Full Court of the Federal Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation[9] on the operation or application of Division 330 before its amendment by TLAA;
(c) the implementation of the amendments to s 330-95 made by TLAA; and
(d) the operation or application of the former Division 330 of ITAA97 and/or Part IVA of the Income Tax Assessment Act 1936 to the exploration joint venture arrangements marketed from late 1996 to early 2000;
(a) giving rise to, or otherwise related to, the measures announced in the Treasurer's Media Release No 120 dated 7 December 1998;
(b) relating to amendments made to s 330-495 of ITAA97 by TLAA; and
(c) the explanatory memorandum to Schedule 5 to TLAA.
20. Pratt Holdings' second request was dated 18 August 2010. It requested:
"All documents relating to the ATO's audit, investigation and consideration of the deductibility of the losses transferred to 9 entities related to the Pratt Consolidated Holdings Pty Ltd ('Transferees') by Lonsdale Mineral Exploration No 1 Pty Ltd ('LME1) in the mining joint venture with Lachlan Resources NL ('Joint Venture'), including but not limited to, all documents (including emails, correspondence, notes, memoranda, reports, opinions, and where applicable any drafts of same) relating to:
∙ the issue of the position paper sent to Lachlan Resources NL under cover of a letter by Graeme Sutton dated 29 June 2006 (which reached conclusions on the deductibility of exploration expenditure and interest that were contrary to those the Commissioner reached in his private ruling dated 26 February 1998 ('Private Ruling');
∙ the further letter Mr Sutton sent to Lachlan Resources NL on 29 June 2006, advising that the Commissioner did not consider himself bound to assess in accordance with the Private Ruling;
∙ the change in the Commissioner's stance expressed in Mr Kevin Hughes' letter dated 24 August 2007 to Mr Janes of Deloitte Touche Tohmatsu Ltd (conceding the Private Ruling was binding, and that he would allow deductions for exploration expenditure and interest in line with the ruling - if not for the balancing adjustment claimed);
∙ how the Commissioner interprets his ruling in paragraph (xi) of the Private Ruling (which deals with the scenario where LME1 exercises its option to put its interest in the Joint Venture tenements back to a subsidiary of Lachlan Resources, and goes on to confirm a balancing adjustment deduction of at least $16.46m) including how he reached the views expressed by Mr Hughes in his letters to Mr Janes dated 24 August 2007 and 8 January 2008 and the views expressed by Mr Vince Bock in his letter to Mr Treloggan of Deloitte Touche Tohmatsu Ltd, dated 18 March 2008 (which refers to the involvement of Mr Kevin Fitzpatrick);
∙ the Commissioner's basis for disallowing the balancing adjustment deduction claimed by LME1 and the proceeding to the issue of the income tax assessments for the 1999 income year to the Transferees, dated 18 February 2008;
∙ the ATO's consideration of the Transferees' objections against these assessments ('Objections') since 21 April 2008 when they were lodged; and
∙ the ATO's consideration of the tax technical issues arising from and/or in relation to the Private Ruling and the Objections."[10]
DOCUMENTS IDENTIFIED AS COMING WITHIN THE REQUESTS
21. The ATO has grouped the documents it has identified as coming within the scope of the two requests:
689 documents concerning the ATO's audit, investigation and consideration of the deductibility of the losses transferred from LME1 to the group of nine and divided into eight categories:
(a) correspondence and documents concerning the establishment of the Joint Venture comprising:
records of communications between the Joint Venture participants, their advisers, banks and contractors regarding the establishment and conduct of the Joint Venture;
(b) correspondence and documents regarding the termination of the Joint Venture comprising:
records of communications between the Joint Venture participants, their advisers and bankers regarding the termination of the Joint Venture, including the exercise of the Put and Call Option, which provided the mechanism for its termination;
(c) applications and correspondence between third parties and government departments regarding:
the renewal of certain mining tenements, the approval of an assignment of a mining lease, stamp duty assessment, forms lodged with the Australian Securities and Investments Commission (ASIC) regarding the issue of shares, change of office holders, discharge of a charge over the property, change of principal place of business and the deregistration of a Joint Venture participant;
(d) drafts of formal agreements and associated correspondence comprising:
drafts of proposed Joint Venture Agreements and of an Explosion Assessment Discussion Paper;
(e) minutes of management committee meetings of the Joint Venture participants;
(f) Joint Venture reports and associated correspondence comprising:
Joint Venture progress reports and Joint Venture exploration activities and expenditure;
(g) requests for private rulings and associated correspondence comprising:
applications for Private Rulings, questions to be answered by the Commissioner and the ATO's correspondence relating to those matters;
(h) Private Rulings and correspondence including:
the Private Ruling and associated correspondence including consents from third parties to the applications for a Private Ruling on their behalf;
(i) Notices issued under s 263 of ITAA36 and associated correspondence;
(j) Notices issued under s 264 of ITAA36 issued to third parties and associated correspondence;
(k) Position Papers and associated correspondence;
(l) draft Media Releases, ASX announcements and associated correspondence;
Statements of Facts and Contentions prepared by ATO officers in relation to the Joint Venture and notes of discussions among taxation officers on tax technical issues relevant to the Joint Venture;
identity profiles and details of assessments issued to third parties;
(o) arrangements under ss 330-235 of ITAA97 comprising:
copies of agreements to allow a purchaser of the mining prospecting rights to include in the allowable capital expenditure amounts incurred by the purchaser in the acquisition of mining and prospecting rights in respect of the mining tenements, correspondence and an unsigned handwritten note referring to the agreements;
(p) bank statements and associated correspondence comprising:
information about bank deposits, drawdown of loans and statements of account for Joint Venture participants;
(q) financial statements and returns of a Joint Venture participant comprising:
audit reports, statements of account and other financial details about a Joint Venture participant;
(r) minutes of meetings, corporate register of a Joint Venture participant and associated correspondence including:
minutes of meetings of directors and secretarial records of a Joint Venture participant;
(s) minutes of meeting of directors of a Joint Venture participant;
(t) financial documents of a Joint Venture participant and associated correspondence comprising:
Consolidated financial statements, property valuations, budget documents, and exploration expenditure schedule and a cash flow analysis for a Joint Venture participant;
(u) financial documents of a shareholder of a Joint Venture participant;
(v) correspondence regarding exploration funding projects comprising:
information about a proposed product to utilise tax losses;
(w) project values for mining tenements comprising:
Valuation and anlaysis of the viability of exploring the mining tenements the subject of the Joint Venture;
(x) development options for mining tenements comprising:
financial analysis of various development options for the mining tenements which are the subject of the Joint Venture;
(y) maps, drawings and details of mining tenements comprising:
Maps, diagrams and other information about the mining tenements; and
payments of professional fees, advice from a bank about a change of address, a file note in relation to the cancellation of an invoice, a facsimile about payment of outstanding amounts, unsigned file notes in relation to sales tax losses and the Joint Venture transaction and advice about nickel prices; and
31 documents concerning the Private Ruling issued to LME1 in 23 February 1998 and divided into five categories:
(a) copies of the request for the Private Ruling made on behalf of LME1 and the other participants in the Joint Venture;
(b) documents provided by the applicants for a Private Ruling with their application;
(c) documents prepared by a group of taxation officers, who came from the ATO's Audit Advisings and Appeals areas and who formed the ATO's Mining and Petroleum Technical Forum (Mining Cell)[11] for the purpose of their considering the application for a Private Ruling comprising:
(i) minutes of a meeting of the Mining Cell (Document 15);
(ii) a discussion paper prepared for the purposes of the discussion among the members of the Mining Cell (Document 16);
(iii) correspondence among members of the Mining Cell about matters they had discussed (Document 17); and
(iv) an agenda for a meeting of the Mining Cell (Document 18);
(d) correspondence with participants in the Joint Venture in relation to their application; and
(e) the Private Ruling issued by the ATO to LME1 and the other participants.
LEGISLATIVE PROVISIONS RELATING TO PRIVATE RULINGS
22. When the Commissioner was asked for, and made, the Private Ruling in 1998, Private Rulings were regulated by Part IVAA of the Taxation Administration Act 1953 (TA Act). Part IVAA was repealed and Private Rulings made the subject of Division 359 in Schedule 1 to the TA Act with effect from 1 January 2006.[12] I note that a Private Ruling in force immediately before 1 January 2006 has effect on and after that day as it were a Private Ruling made under Division 359.[13] I have set out a broad outline of the legislative provisions relating to Private Rulings made in 1998 as was the Private Ruling in this case. It is not intended to be a comprehensive survey of those provisions.
"A person may apply to the Commissioner for a ruling on the way in which, in the Commissioner's opinion, a tax law or tax laws would apply to the person in respect of a year of income in relation to an arrangement."
"(a) scheme, plan, action, proposal, course of action, course of conduct, transaction, agreement, understanding, promise or undertaking; or
The arrangement to which the application related might be an arrangement that had been carried out or that was going to be carried out or that was a proposed arrangement.[15]
25. The application might apply to a past year of income, the current year of income or a future year of income.[16] It had to give whatever information relating to the ruling as the Commissioner required as well as any documents he required.[17] In certain circumstances set out in s 14ZAM and particularly if the Private Ruling could not be made without it, the Commissioner was required to ask the applicant for further information.
26. If the Commissioner considered that the correctness of a Private Ruling would depend on the assumptions made about a future event or other matter, the Commissioner might decline to make the ruling. Alternatively, he might make the assumptions he considered to be most appropriate.[18]
27. The Commissioner made a Private Ruling by preparing, and serving on the applicant, a written notice of it.[19] Section 14ZAS provided that:
"(1) A notice of a private ruling must set out the matter ruled on and, in doing so, identify the person, tax law, year of income and arrangement to which the ruling relates.
(2) If the correctness of a private ruling depends on an assumption, the assumption is, for the purposes of subsection (1), an aspect of the arrangement to which the ruling relates.
(3) An arrangement may be identified in a private ruling by reference to matters set out in a document identified in the ruling and which, or a copy of which, is available to the rulee."
28. In certain circumstances, the Commissioner might withdraw a Private Ruling with, or without, the consent of the rulee and might do so either in whole or in part. In the broadest outline, he might not do so if the arrangement to which it related had not begun to be carried out or, if it had begun, another person would be disadvantaged if the ruling were not withdrawn.[20]
29. In so far as income tax is concerned and subject to qualifications that are not relevant in the context of this case, s 170BB of ITAA36 as then in force
(a) there is a private ruling on the way in which an income tax law applies to a person in respect of a year of income in relation to an arrangement ('ruled way'); and
(b) that law applies to that person in respect of that year in relation to that arrangement in a different way; and
(c) the amount of the final tax under an assessment in relation to that person would (apart from this section and section 170BC) exceed what it would have been if that law applied in the ruled way;
the assessment and amount of final tax must be what they would be if that law applied to the ruled way."
PROVISIONS OF SCHEDULE 1 OF TA ACT APPLYING TO PRIVATE RULING
30. For the most part, the provisions in Division 359 establish a legislative regime similar to the repealed Part IVAA. I will mention only a couple of provisions that add to the legislative context in which the Private Ruling is taken to have been made by virtue of the transitional provisions of the Tax Laws Amendment (Improvements to Self Assessment) Act (No. 2) 2005 (TLAISA Act).
31. The Commissioner makes a Private Ruling by recording the ruling in writing and giving a copy of it to the person who applied for it.[21] It must state that it is a Private Ruling and must identify the entity to whom it relates and specify the scheme and the relevant provision to which it relates.[22] If the Private Ruling contains any assumptions, the Commissioner will have been required to have told the applicant of them and to have given that applicant a reasonable opportunity to respond to them.[23]
32. Section 357-60(1) provides that, in most cases and in the circumstances of this case, a ruling binds the Commissioner in relation to a taxpayer if it applies to that taxpayer and if the taxpayer relies on the ruling by acting, or omitting to act, in accordance with the ruling. If a taxpayer would have achieved a more favourable result by not relying on a ruling and the Commissioner is not prevented from doing so by a time limit, he may apply a relevant provision to a taxpayer in the way it would apply had the taxpayer not relied on the ruling.[24] The Commissioner does not have a duty to do so.[25]
A taxpayer may stop relying on a Private Ruling
33. A taxpayer does not have to rely on a Private Ruling. He, she or it can stop doing so by acting, or omitting to act, in a way that is not in accordance with that Private Ruling.[26]
Objections, reviews and appeals relating to Private Rulings
34. Section 359-60 provides for objections, reviews and appeals relating to Private Rulings. On an objection, s 359-65(1) provides that the Commissioner may consider any additional material that he did not consider when making the ruling. If that is information that the taxpayer did not have, the Commissioner must tell that taxpayer what the information is. Before making a ruling, the Commissioner must allow the taxpayer a reasonable time to respond to the information.[27]
"Subject to this section, a document is an exempt document if it is a document the disclosure of which under this Act:
(a) would disclose matter in the nature of, or relating to, opinion, advice or recommendation obtained, prepared or recorded, or consultation or deliberation that has taken place, in the course of, or for the purposes of, the deliberative processes involved in the function of an agency or Minister or of the Government of the Commonwealth; and
36. The section is qualified in two ways. First, it does not apply to a document by reason only of purely factual material contained in the document:
s 36(5). Second, it does not apply to matter used for the purpose of making decisions or recommendations referred to in s 9(1)(a): s 36(2). Where a decision is made to deny access to a document on the basis that the exemption in s 36 applies, the reasons given under s 26 must state the ground of public interest on which the decision is based.[28]
Harris v Australian Broadcasting Corporation and others[34] when he said that:
"... 'deliberation' suggests not only collective discussion but collective acquisition and exchange of facts preliminary to ultimate decision."[35]
Sheppard J's observation in Kavvadias v Commonwealth Ombudsman is also pertinent and that is to the effect that the expression is not to be confined to policy making.[36]
38. Matter in the nature of a deliberation is not the only matter within the scope of s 36(1)(a). Other matters within its scope are matters in the nature of "opinion, advice or recommendation ... [or] consultation". In the case of Re Smith and Aboriginal and Torres Strait Islander Commission,[37] I set out the ordinary meanings of the other words used in s 36(1)(a) i.e. "opinion, advice or recommendation ... [and] consultation:"
"Taking first the word 'opinion_', it connotes '... a view held about a particular subject or point; a judgement formed; a belief ...' (The New Shorter Oxford English Dictionary, 1993) or a '1. judgment or belief resting on grounds insufficient to produce certainty. 2. a personal view, attitude, or estimation: public opinion 3. the expression of a personal view, estimation, or judgment: to give an opinion on tariffs. 4. a formal or professional judgment expressed, especially in law: counsel's opinion. ...' (The Macquarie Dictionary, 3rd edition, 1997). The word 'advice' means '... The way in which a matter is looked at; opinion, judgement ... consideration, consultation, reckoning ... an opinion given or offered as to action; counsel ... The result of consultation; determination, plan ...' (The New Shorter Oxford English Dictionary, 1993 and see also_ The Macquarie Dictionary_, 3rd edition, 1997) . The meanings of 'recommendation' include '... The action or an act of recommending a person or thing; a recommended course of action etc.; a proposal ...' (The New Shorter Oxford English Dictionary, 1993 and see also_ The Macquarie Dictionary_, 3rd edition, 1997). To a certain extent, the meanings of the words 'opinion', 'advice' or 'recommendation' overlap. Whether they overlap or not, all are expressing the notion of consideration followed by the formation of a view either about a certain subject or about a course of action and the transmission of that view._
The ordinary meanings of 'consultation' include '... A meeting in which parties consult together, or one person consults another, ... ' (The New Shorter Oxford English Dictionary, 1993) and '... the act of consulting; conference. ... a meeting for deliberation ... an application for advice to one engaged in a profession ...' (The Macquarie Dictionary, 3rd edition, 1997). Again, there is a notion of consideration inherent in the meaning of 'consultation'. That consideration may or may not lead to the formation of an opinion, advice or recommendation.
Similarly, the word 'deliberation' encompasses the notion of consideration. That consideration may involve consultation or discussion amongst more than one persons. Equally, a person who considers a matter on his or her own can be said to have deliberated upon it. Whether or not the deliberation leads in either case to the formation of an opinion, advice or recommendation is another matter."[38]
39. On its face, s 36(1)(a) appears to be broadly drafted to gather a broad range of matters within its scope and, with one exception, there is no reason in the context either of the remainder of the section or of the FOI Act to limit the ordinary meanings given to the words "opinion, advice or recommendation ... consultation or deliberation". In Re Booker and Department of Social Security,[39] I gave further consideration to the word "consultation" and, after reviewing various authorities, added that "...in order for there to be a consultation, there must be something of a two way exchange between at least two parties. ...".[40]
40. That brings me to the qualification expressly stated in s 36(1)(a)
to limit the meaning that must be given to the words "opinion, advice or recommendation" and also to the words "consultation or deliberation". That qualification is that it must have been "obtained, prepared or recorded" (if an opinion, advice or recommendation) or "[have] taken place" (if a consultation or deliberation) "in the course of, or for the purposes of, the deliberative processes involved in the functions of an agency ...".
41. The meaning of the expression "taken place" seems clear enough but what of the words "obtained, prepared or recorded"? The word "obtain" was considered by Newman J in Kelly v JRA Ltd[41] in the context of s 234(1)(b) of the Customs Act 1901. That section provided, in part, that "A person shall not ...obtain any ... refund ... which is not payable". His Honour said:
"... The word 'obtain' is defined by the Shorter Oxford English Dictionary as being 'to procure or gain, as a result of purpose and effort ... to possess'.
The Macquarie Dictionary showing consistency with its English counterpart, defines 'obtain' as 'to come into possession of; get or acquire; procure as by effort or request.' In my view the action required of a person to come into possession of a refund of duty from the Collector of Customs requires, on that person's part, a conscious effort to receive a refund evidenced by the fact that to get such refund, the person seeking it must actively do something to get it."[42]
42. It seems to me that a similar meaning should be given to the word "obtain" as it is used in s 36(1)(a). The opinion, advice or recommendation must have been acquired or procured in the course of, or for the purposes of, its deliberative processes involved in its functions. It is not enough that the opinion, advice or recommendation was received by an agency when it was not sought by that agency either explicitly or implicitly.
43. The remaining words to consider are "prepared" and "recorded". Their meanings are clear and, given their context, it is equally clear that the opinion, advice or recommendation must have been "prepared or recorded" in, or for the purposes of collective discussions i.e. the deliberative processes. At one time, it would generally have been expected that the opinion, advice or recommendation would be prepared or recorded within the agency. It could always be envisaged, though, and it has now become more common for an agency to ask a person outside it to prepare or record the opinion, advice or recommendation. Provided it is prepared or recorded with the imprimatur of the agency and that the other criteria in s 36(1)(a) have been met, the opinion, advice or recommendation would come within the paragraph. It is not enough, though, that it has been prepared or recorded and then proffered to the agency. To come within the paragraph, it must have been prepared or recorded in the course of, or for the purposes of, the agency's deliberative processes and so the opinion, advice or recommendation must have been prepared or recorded as a result of the agency's seeking it rather than its simply being the recipient of it.
44. Perhaps their meanings are self explicit but I should also spend a moment on the meaning of the words "in the course of" and "for the purposes of" the deliberative processes "involved in" the functions of an agency, Minister or Government of the Commonwealth as they appear in s 36(1)(a). In order to claim an exemption under s 36, it is not enough that the agency or Minister has a document containing an opinion, advice or recommendation or consultation or deliberation referring to matters for which the agency or Minister has responsibility. It must be matter of that sort that has been obtained, prepared or recorded or, in the case of a consultation, has taken place in the course of, or for the purposes of the deliberative processes involved in their functions.
45. In the context of s 6 of the Contracts Review Act 1980 (NSW), Young J considered the meaning of the expression "for the purpose of a trade, business or profession'. His Honour did so in Ellison v Vukicevic[43] when he adopted what Lee J had said in Collins v Parker:[44]
" The expression 'for the purpose of' has the meaning that the contract under consideration is entered into as an ordinary incident of the carrying on of a particular trade, business or profession then being carried on or proposed to be carried on."[45]
It seems to me that this interpretation is equally apt in s 36(1)(a) of the FOI Act. If matter has been obtained "for the purposes of" deliberative processes, it must have been obtained as an ordinary incident of them.
46. The expression "in the course of" raises similar issues of connectivity between the particular matter and the deliberative processes. Those issues are of the same sort as those that arise when considering whether an injury has occurred "in the course of employment". Deane J considered them in Commonwealth of Australia v Lyon[46] when said:
" Injury in the course of employment means an injury sustained while the worker is engaged in the work which he is employed to do or in something which is a concomitant of, or reasonably incidental to, his employment to do that work ... The course of employment is a temporal concept and it is unnecessary that there be any causal connection between the work which the employee is employed to do and the injury which he sustains ... The scope of what is within it depends upon 'the sufficiency of the connection between the employment and the thing done by the employee' which 'cannot but remain a matter of degree, in which time, place and circumstances, as well as practice, must be considered together with the conditions of employment' (per Dixon J, Whittingham v Commissioner of Railways (WA) [1931] HCA 49; (1931) 46 CLR 22 at 29, and see, generally, per Stephen J Bill Williams Pty Ltd v Williams [1972] HCA 23; [1972-73] ALR 303; 126 CLR at 158-9."[47]
47. There are, of course, later authorities concerned with what is meant by an injury "in the course of employment". One of these is Hatzimanolis v ANI Corporation Ltd [48] in which Mason CJ, Deane, Dawson, Toohey and McHugh JJ said:
That, too, is a principle that is equally applicable in considering whether a matter of the sort described in s 36(1)(a) has been obtained, prepared or recorded or a consultation or deliberation has taken place in the course of the deliberative processes involved in the functions of an agency, a Minister or the Government of the Commonwealth. Regard must be had to the general nature, terms and circumstances of those deliberative functions.
48. It follows that there must be a connection of the sort described between the opinion, advice or recommendation or of the consultation or deliberation and the deliberative processes of an agency. That, however, is not the only connection that must be made for the purposes of s 36(1)(a). There must be a connection of the sort described by the expression "involved in" between the deliberative processes and the functions of an agency, a Minister or the Government of the Commonwealth. What is the nature of that connection? The word "involve" means in this context:
"... to require as a necessary part ..."[51]
Therefore, the deliberative processes must be those that are required as a necessary part of the functions of the agency, Minister or the Government of the Commonwealth.
49. The expression "deliberative processes" has been considered in
Re James and Others and Australian National University in which Deputy President Hall repeated the view he had expressed as a member of the Tribunal in Re Waterford and Department of the Treasury (No.2) that the "deliberative processes" of an agency are its "thinking processes".[52] Sheppard J stated in Kavvadias v Commonwealth Ombudsman that the expression is not to be confined to policy making.[53] Several authorities were reviewed by Davies J in Re Howard and Treasurer of the Commonwealth of Australia.[54] He referred to Re Murtagh and Commissioner of Taxation, with which he agreed and in which the Tribunal had said:
"The term 'deliberative processes' would seem to have a wide ambit.
The term was considered by Beaumont J in Harris v Australian Broadcasting Corporation [1983] FCA 242; (1983) 50 ALR 551. At 560, his Honour said that: '... "deliberation" suggests not only collective discussion but collective acquisition and exchange of facts preliminary to ultimate decision.'"[55]
50. Davies J referred also to the Tribunal decision in Re Waterford and Department of the Treasury (No.2) where it said:
"As a matter of ordinary English the expression 'deliberative processes' appears to us to be wide enough to include any of the processes of deliberation or consideration involved in the functions of an agency. 'Deliberation' means 'The action of deliberating: careful consideration with a view to decision': see The Shorter Oxford English Dictionary_. The action of deliberating, in common understanding, involves the weighing up or evaluation of the competing arguments or considerations that may have a bearing upon one's course of action. In short, the deliberative processes involved in the functions of an agency are its thinking processes - the processes of reflection, for example, upon the wisdom and expediency of a proposal, a particular decision or a course of action. Deliberations on policy matters undoubtedly come within this broad description. Only to the extent that a document may disclose matter in the nature of or relating to deliberative processes does s36(1)(a) come into play._"[56]
51. This passage was considered by Deputy President McDonald in
Re Chapman and Minister for Aboriginal and Torres Strait Islander Affairs.[57] He then said:
" In reaching a decision to characterise a document as being part of a deliberative process the tribunal may seek guidance, but not be bound, by the wording used in the document itself. The determination should be based on a fair reading of the whole of the document and not a disjunctive reading of selected passages. Additionally, the characterisation should be determined not only by having regard to the wording used in the document, but also by reference to the surrounding circumstances and the matters deposed to in any evidence supporting the maintenance of the exemption. ..."[58]
52. While I would not disagree that the whole of any document should be read before coming to a decision, I would disagree with any suggestion, if there be any, that the whole of the document will always be relevant. The occasions on which the whole of the document will not be relevant may be few but the fact that they may occur should be borne in mind. They may, for example, appear in a document that cannot itself be described as a document whose disclosure would reveal matter that would otherwise come within the scope of s 36(1)(a). That this may be so is underlined by the provisions of s 22(1) of the FOI Act in so far as it contemplates the possibility that exempt matter may be deleted from a document so that it is no longer an exempt document. Subject to certain conditions, s 22 permits access to be given to a document that has been redacted in that way.
B.2 The qualification in s 36(5): purely factual material
53. The expression "purely factual material" was considered by Deputy President Todd in Re Waterford and Treasurer of the Commonwealth (No 1).[59]
He concluded "... that to be described as 'factual' the material must be 'factual' in fairly unambiguous terms. ..."[60] As for the word "purely", it "... is clearly not used to denote something about the character of what is comprised in 'factual material'. It has the sense of 'simply' or 'merely' ...".[61] Although it may be more a matter of semantics than of substance, I would approach the matter from a slightly different view of the role of the word "purely". In my view, it is intended to emphasise that the material must be "... wholly ...[or] entirely ..."[62] comprised of factual material and cannot incorporate any material that is not factual material. As Deputy President Todd would say: it comprises merely or simply factual material. It does not contain material that can be described as opinion, advice or recommendation or even conjecture.[63]
54. The distinction was drawn by the Full Court of the Federal Court in Harris v Australian Broadcasting Commission:[64]
" Equally, some conclusions may be classed as purely factual material. We hesitate to import notions from the law of evidence into this field. However, it may be useful to refer to the distinction, with which lawyers are familiar, between primary facts and ultimate facts. In our view a statement of ultimate fact may be a statement of purely factual material, notwithstanding it involves a conclusion based on primary facts. Many common statements of fact may, if analysed, be found to be based on primary facts. For example, the statements X has a cold or Y resides in Sydney are both statements based on primary facts, which are unstated. On the other hand, a conclusion which involves opinion, advice or recommendation for the purposes of the deliberative process may well prevent material from being purely factual and render it exempt."[65]
B.3 The qualification in s 36: matter used for the purpose of making decisions or recommendations referred to in s 9(1)(a)
55. Section 9(1)(a) refers to matter used for the purpose of making decisions or recommendations referred to in s 9(1)(a). Those are "manuals or other documents containing interpretations, rules, guidelines, practices or precedents ..." and must be made available for inspection and purchase in accordance with s 9. Although it may be that Document 312A contains the final draft of the content of what was to become PS 174, it is not the final copy that was available for use by ASIC officers in making decisions or recommendations under the Corporations Act. The document does not bear a PS number, its issue date is blank and the list of related instruments is incomplete. Therefore, the qualification in s 36(1)(a) is irrelevant.
B.4 Section 36(1)(b): "contrary to the public interest"
56. If a document comes within the scope of s 36(1)(a) and is not excluded by one or other of the exceptions in ss 36(5) or (6), it will not be exempt unless its disclosure under the FOI Act would be contrary to the public interest. What is meant by "contrary to the public interest" in s 36(1)(b) was considered by the High Court in McKinnon v Secretary, Department of the Treasury (McKinnon).[66] Before I come to that, I have found it helpful to look at earlier authorities considering the meaning of "public interest" in other contexts.
57. In the different context of defamation law, Lord Denning said in London Artists Ltd v Littler:[67]
"... There is no definition in the books as to what is a matter of public interest. All we are given is a list of examples, coupled with the statement that it is for the judge and not for the jury. I would not myself confine it within narrow limits. Whenever a matter is such as to affect people at large, so that they may be legitimately interested in, or concerned at, what is going on; or what may happen to them or to others; then it is a matter of public interest on which everyone is entitled to make fair comment. A good example is South Hetton Coal Co Ltd v North-Eastern News Association Ltd [1894] 1 QB 133.
A colliery company owned most of the cottages in the village. It was held that the sanitary conditions of those cottages - or rather their insanitary condition - was a matter of public interest. Lord Esher MR, said at p 140, that it was "a matter of public interest that the conduct of the employers should be criticised". There the public were legitimately concerned_. Here the public are legitimately_ interested_. Many people are interested in what happens in the theatre. The stars welcome publicity. They want to be put at the top of the bill. Producers wish it too. They like the house to be full. The comings and goings of performers are noticed everywhere. When three top stars and a satellite all give notice to leave at the same time - thus putting a successful play in peril - it is to my mind a matter of public interest in which everyone, press and all, are entitled to comment freely._"[68]
58. In McKinnon v Secretary, Department of Treasury,[69] Tamberlin J said:
"10. The expression 'the public interest' is often used in the sense of a consideration to be balanced against private interests or in contradistinction to the notion of individual interest ...
13. In the context of freedom of information, the notion of 'the public interest' was helpfully considered by the Appeal Division of the Supreme Court of Victoria in Director of Public Prosecutions v Smith [1991] VicRp 6; [1991] 1 VR 63 at 75, where Kaye, Fullagar and Ormiston JJ said:
'The public interest is a term embracing matters, among others, of standards of human conduct and of the functioning of government and government instrumentalities tacitly accepted and acknowledged to be for the good order of society and for the well being of its members. The interest is therefore the interest of the public as distinct from the interest of an individual or individuals: Sinclair v Mining Warden at Maryborough [1975] HCA 17; (1975) 132 CLR 473 at 480, per Barwick CJ. There are ... several and different features and facets of interest which form the public interest.'
14. The expression 'the public interest' was also the subject of consideration by Lehane J in Botany City Council v Minister for Transport and Regional Development [1996] FCA 1507; (1996) 137 ALR 281 at 308, again in an administrative law context, where his Honour said:
_'_I think it is clear that the principal public interest to which the second respondent was giving expression was an interest in ... the equitable or fair distribution of the noise necessarily associated with an airport close to the centre of a large city; and his view was that that public interest required dispersal of the noise rather than its concentration in
a narrow corridor. ... Others might ... take a different view of what the public interest required. A decision between competing views is not, however, a matter for the court. What the court has to decide is whether the second respondent's reasons disclose reviewable error, particularly, a misconstruction on his part of the expression "the public interest". In my view they do not.'
15. His Honour also referred to the statement by Mason CJ, Brennan, Dawson and Gaudron JJ in O'Sullivan v Farrer [1989] HCA 61; (1989) 168 CLR 210 at 216 that:
'Indeed, the expression "in the public interest", when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only "in so far as the subject matter and the scope and purpose of the statutory enactments may enable ...'"
See also Water Conservation and Irrigation Commission v Browning (1947)
[1947] HCA 21; 74 CLR 492 at 505 and In re Thompson (1964) Tas SR 129 at 143-144.
59. What is clear from these cases is that the public interest is not a static concept. It is, instead, a concept that takes its shape and substance from the circumstances which are said to give rise to it. Those circumstances will be factual and statutory. In Botany City Council v Minister for Transport and Regional Development,[70] for example, the factual circumstances were the airport, the noise it generated and the effect of noise on people. In London Artists Ltd v Littler, the factual circumstances were the sanitary conditions and their provision by an employer.
60. This seems to accord with the approach taken in a decision of Davies J as President of the Tribunal in Re Howard and Treasurer of Commonwealth of Australia.[71] He was concerned with a conclusive certificate and so with whether there existed reasonable grounds for a claim that disclosure of certain documents would be contrary to the public interest. Mr Howard had requested documents provided to the then Government by an Australian Council of Trade Unions' (ACTU) Task Force during the formulation of the 1984/85 Budget. When in opposition, the Government had forged an Accord with the ACTU regarding economic policy. In particular, the Government had agreed to consult with the ACTU regarding income and prices policies including taxation. Access was refused to a minute to the Treasurer and a telex to the ACTU. Both documents advised the Treasurer on the implications and estimated cost of certain taxation options. Davies J referred to previous authorities from which he gleaned that the whole of the circumstances needed to be examined. Those circumstances included any public benefit perceived in their disclosure.[72] He drew five propositions to which I referred in Re McKinnon and Secretary, Department of Prime Minister and Cabinet.[73]
61. Mr Howard had framed his submissions around three points. First, the Accord was a political document. Second, the ACTU had not produced any evidence as to whether maintaining the confidentiality of their discussions was important to them. Third, there is a clear public interest in not only the reality, but the appearance, of equal treatment of claimant groups and their representatives in the Australian community. The Government of the day had appeared, Mr Howard submitted, to have treated the ACTU in a special manner. Davies J dealt with these submissions and analysed the evidence in a way consistent with the approach that appears to underpin the judgments, to which I have referred, and to that of the High Court in McKinnon to which I will refer shortly:
" _In the present case, I think there were and are reasonable grounds for concluding that disclosure of the documents would be contrary to the public interest. In the preparation of the Budget, the Treasurer and officers of his Department would have given consideration to a wide range of options. Some options would have been noted and not further considered, others may have been given scant attention. Some options may have been given serious consideration but not adopted for one reason or another. In the course of the development of the Budget, new options may have come to light. In the end, the Budget would have been formulated. The authorities to which I have referred recognize a public interest in protecting from disclosure such a process of deliberation. Protection of the deliberative process encourages 'creative debate and candid consideration of alternatives', to use the words of Wilkey J (_Jordan v Department of Justice, supra, [591F (2d) 753 (1978)] at 772). It prevents premature disclosure of possible options and confusion arising between options considered and options adopted. And lastly it protects the integrity of the decision-making process by enabling the government to be judged by what it has decided to do rather than by material it has taken into account. These elements of the public interest are as significant in this country as they are in the United States or in the United Kingdom."[74]
62. This brings me to the approach taken by the High Court in McKinnon. Although considering a conclusive certificate that had been issued in relation to a claim that disclosure of certain documents would be contrary to the public interest within the meaning of s 36(1)(b), some mention was made of the general notions of public interest in their Honour's judgments. There were three different approaches in the three judgments in McKinnon.
63. Gleeson CJ and Kirby J examined the object of the FOI Act, the structure of s 36 and its place in the legislation. They continued:
" A conclusion that disclosure of an internal working document would be contrary to the public interest may or may not turn upon contestable facts: either primary facts, or inferences to be drawn from those facts. It may or may not turn upon contestable matters of opinion. Inevitably, it will involve a judgment as to where public interest lies. Such judgment, however, is not made in a normative vacuum. It is made in the context of, and for the purposes of, legislation which has the object described above, which begins from the premise of a public right of access to official documents, and which acknowledges a qualification of that right in the case of necessity for the protection of essential public interests (s 3(1)(b))."[75]
64. Their Honours' reference to the fact that "judgment" is required in determining where the public interest lies and to that judgment's being made in a particular context found expression in a later passage in their judgment:
"... This is a concept that assumes prominence in a different context, in which courts are required to deal with claims of public interest immunity advanced in opposition to the production of documents, for example under subpoena, in civil or criminal litigation. There, it is the public interest in the administration of justice, and considerations of fairness to litigants, that may need to be weighed against aspects of the public interest put at risk by disclosure of documents .... The image of the scales of justice is pervasive in legal thinking, and it is natural to talk of taking account of competing considerations in those terms. Under the FOI Act, however, the matter of disclosure or non-disclosure is not approached on the basis that there are empty scales in equilibrium, waiting for arguments to be put on one side or the other. There is a 'general right of access to information ... limited only by exceptions and exemptions necessary for the protection of essential public interests [and other matters not presently material]' (s 3(1)(b)). That is the context in which a minister makes a decision under s 36(3), and in which such a decision is reviewed under s 58(5). References to 'balancing' create a danger of losing sight of that context. ..."[76]
65. Gleeson CJ and Kirby J were in the minority on the final result but their views are not incompatible with those of Hayne J, who was a member of the majority. Hayne J made the following observations on the meaning of "public interest":
" It may readily be accepted that most questions about what is in 'the public interest' will require a consideration of a number of competing arguments about, or features or 'facets' of, the public interest. As was pointed out in O'Sullivan v Farrer ...[[77]]:
'[T]he expression "in the public interest", when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only "in so far as the subject matter and the scope and purpose of the statutory enactments may enable ... given reasons to be [pronounced] definitely extraneous to any objects the legislature could have had in view" ...[[78]].
That is why a question about 'the public interest' will seldom be properly seen as having only one dimension."[79]
66. In contrast to these expressions of the public interest, Callinan and Heydon JJ made the following observations regarding the public interest:
" Nor are we by any means certain that it is apt to describe the public interest as multifaceted. Neither the fact that different people will see it through different prisms, nor the fact that an all-encompassing definition of it for all occasions is not possible, means that the public interest is multifaceted. ... Judges have usually not found it necessary to direct juries at length as to the meaning of the expression, except to warn them that it is not enough that the matter might be of some personal or prurient interest, or merely something about which they may be curious."[80]
67. The conclusion to be drawn is that the public interest is not multifaceted but a concept which shapes itself to the factual circumstances under consideration and any statutory provisions applicable to those circumstances for its very dimensions and boundaries are drawn by those circumstances and provisions. That is illustrated by the judgment of Gleeson CJ and Kirby J who note that the FOI Act itself begins from the premise of a public right of access to official documents, and which acknowledges a qualification of that right in the case of necessity for the protection of essential public interests.
68. In trying to ascertain the public interest, a distinction must be drawn between the public interest and a matter of interest to the public. In Director of Public Prosecutions v Smith,[81] the Victorian Supreme Court considered a decision made by the former Administrative Appeals Tribunal of Victoria (AATV) to release documents relating to a decision by the Victorian Director of Public Prosecutions not to prosecute a solicitor on the basis that their release was in the public interest. It had been alleged that the solicitor had been a party to a fraud upon a businessman who was a client of the practice in which the solicitor was then employed. Section 50(4)
of the Freedom of Information Act 1992 (Vic) (FOIVIC) empowered the AATV to override most exemptions[82] where it was of the opinion that the public interest required that access to the document should be granted under that Act. The documents to which the Tribunal granted access contained detailed references to business transactions of the former client, who had begun legal proceedings against the solicitor's firm, complained to the Victorian Law Institute and reported the matter to the police.
69. The beginning of the following passage from the judgment of the Full Court of the Supreme Court of Victoria appears in the extract of the judgment of Tamberlin J in McKinnon v Secretary, Department of Treasury. I have set that passage out above.[83] Omitting citations, I will repeat the beginning in order to set the context in which the Full Court drew a distinction between matters of public interest and matters of interest to the public:
"... The public interest is a term embracing matters, among others, of standards of human conduct and of the functioning of Government and Government instrumentalities tacitly accepted and acknowledged to be for the good order of society and for the well being of its members. The interest is therefore the interest of the public as distinct from the interest of an individual or individuals: ... There are ... several and different features and facets of interest which form the public interest. On the other hand, in the daily affairs of the community events occur which attract public attention. Such events of interest to the public may or may not be ones which are for the benefit of the public; it follows that such form of interest per se is not a facet of the public interest. The interest created by Mr Legge bringing his business transactions into the public arena and by the respondent's public statements concerning the prosecution of McArdle were no doubt of the nature of the interest to some members of the public, but those matters were not 'the public interest' to which s 50(4) is directed."[84]
70. There were, however, two other matters that the AATV, constituted by Judge Higgins, had considered to be relevant in considering public interest. They were the interest of the public that the prosecution of Mr McArdle had been effected impartially and according to law and the public interest inherent in the doctrine of legal professional privilege. The Full Court upheld the AATV's decision to release the documents saying:
"... His Honour commenced by accepting without elaboration the high order of importance of the privilege against which he compared the public interest factor of the appearance of justice having been done in exceptional circumstances which had been created to surround the McArdle case. Then he recounted matters and considerations pertinent to the public interest in the appearance of justice having been done. His opinion that the public interest required the disclosure to the public of the exempt documents was reached after comparing the benefit to the criminal justice system by disclosure against the harm to the doctrine of legal professional privilege. To the lawyer steeped in the tradition of the common law, the result may seem unacceptable. Nevertheless the legislature, by not excluding from the operation of s. 50(4) a document referred to in s. 32 indicated the intention that in appropriate circumstances other factors of the public interest might be attributed greater value than the factor of legal professional privilege. Be that as it may, the reasons for his decision were given by the learned judge in conformity with the requirement of s. 49(1) to (3) of the Administrative Appeals Tribunal Act."[85]
71. This approach is consistent with that of Hayne J in McKinnon to the effect that what is in the public interest and so, in a case such as this, what is contrary to the public interest, requires a consideration of a number of matters. That is not to say that the public interest is multi faceted. The matters that are taken into account are confined only in so far as the subject matter and the scope and purpose of the relevant enactment require.
72. Among those matters must be the right of access to information conferred by the FOI Act. The rights to access to information in documentary form under Parts II and III are not limited to "citizens" if, by that word, I am meant to understand "Australian citizens". The right given by s 11, as opposed to the object stated in s 3(1), is expressed more broadly in terms of every person's having a legally enforceable right and it has been interpreted more widely without reference to Australian residence or citizenship.[86]
73. A purpose of the FOI Act is to inform persons about the processes of government but it is not the only purpose. It could be said that it does this under Part II and that Part II is the implementation of the object expressed in s 3(1)(a):
"The object of this Act is to extend as far as possible the right of the Australian community to access to information in the possession of the Commonwealth by:
(a) making available to the public information about the operations of departments and public authorities and, in particular, ensuring that rules and practices affecting members of the public in their dealings with departments and public authorities are readily available to persons affected by those rules and practices; ...
Consistently with this object, s 8 requires agencies to publish certain information about their functions, the categories of documents they maintain and the opportunities that exist for persons or bodies outside the Commonwealth administration to participate in the formulation of policy. Unlike requests for access under Part III, which are limited to requests for information in documentary form, s 8 requires agencies to create documents setting out the relevant information if they do not already exist. Section 9 requires them to make available for inspection and purchase documents that they use in their decision-making processes. All of this informs about the processes of government.
74. The rights given under Part III are not necessarily so limited. When read with the exemptions in Part IV, they appear to be the implementation of the object stated in s 3(1)(b) to create:
"... a general right of access to information in documentary form in the possession of Ministers, departments and public authorities, limited only by exceptions and exemptions necessary for the protection of essential public interests and the private and business affairs of persons in respect of whom information is collected and held by departments and public authorities."
"Subject to this Act, ... a legally enforceable right to obtain access in accordance with this Act to:
(a) a document of an agency, other than an exempt document; or
(b) an official document of a Minister, other than an exempt document."
As s 11(2) goes on to say, subject to the FOI Act itself, a person's right of access is not affected by any reasons given by the person seeking access or any belief held by an agency or Minister as to the person's reasons for seeking access.
76. It is clear from the way in which s 3(1)(b) expresses its object to create a general right of access that the government holds a wide range of information in documentary form. No doubt all of that information is in some way relevant to a function, a power or a duty of an agency but not all of it may in itself disclose the processes of government. A wish to know about the processes of government may or may not be at the heart of a request for access.[87] Given the object of the FOI Act and the nature of the right of access it confers, it seems to me that the public interest is in maintaining that right of access limited as it is only by exemptions necessary to protect private and business affairs of persons in respect of whom information is collected by departments and public authorities and by what is necessary for the protection of essential public interests. Those essential public interests are circumscribed by the exemption provisions of Part IV and, to some extent, by the workload considerations set out in s 24 of Part III that justify refusal of a request. This public interest could also be described in the words adopted by Tamberlin J in McKinnon v Secretary, Department of Treasury as "transparency in public administration"[88] if that expression were understood to encompass transparency of information held in documentary form as well as transparency of processes. That would seem a more appropriate expression of this consideration in determining what is contrary to the public interest under s 36(1)(b) than that of citizens' being informed of the processes of government.
77. Section 36(1)(b) does not purport to limit the matters taken into account by reference only to the essential public interests that it has protected in Part IV. That is clear from the paragraph itself and underlined by s 32(a) which provides that:
"A provision of this Part by virtue of which documents referred to in the provision are exempt documents:
(a) shall not be construed as limited in its scope or operation in any way by any other provision of this Part by virtue of which documents are exempt documents;...
78. There is a public interest in the proper working of government but what does that mean? I have turned to the judgment of Callinan and Heydon JJ in McKinnon for assistance. Their Honours considered the various grounds of public interest that had been claimed by the respondent in that case and said:
" ... The reference to 'ongoing sensitivity' in the first is not entirely clear. We would be inclined ourselves to think that the fact that documents have continuing sensitivity, are controversial and affect a minister's portfolio would not alone provide a reasonable ground for continuing confidentiality. The use of the word 'ongoing' strongly suggests currency, and the use of the word 'controversial' might well at least imply public interest.
The second ground, which speaks of jeopardy to candour, and the desirability of written communications, obviously cannot readily be dismissed, and it seems to us that this is a matter upon which a minister's opinion and experience are likely to be as well informed and valuable as those of anyone else, including senior officials.
The third ground raises an issue of tentativeness, that is to say, that the documents were concerned with matters that were not settled and recommendations that were not adopted. This too, on its face, is a cogent ground. It is difficult to see how it would not be reasonable for a minister to take the view that the release of material of that kind would not make a valuable contribution to public debate.
The fourth ground has so much in common with the third that nothing further need be said about it.[[90]]
The fifth ground is far less persuasive. It claims that the difficulty of putting financial data into context provides reason for the non-disclosure of otherwise relevant documents. It is, we think, unrealistic for any minister to believe that he or she can control, or dictate the context in which matters of public interest are debated. All that a minister can do is seek to explain the data and to provide as accurate a context for it as possible.
The sixth ground takes the point that such documents as are prepared for possible responses to questions in Parliament should remain confidential because their exposure would threaten the Westminster system of government, that is to say, responsible government to which we have earlier referred. This cannot be said to be an unreasonable view. The minister is the one who is responsible for an answer given in Parliament, within the practical modern limits to which we have referred. It is his or her answer itself which is a, or the, matter of public interest, and not the various documents which may have canvassed that answer, or other possible answers. It will be in respect of the answer that the minister actually gives that any political price will have to be paid, just as there may well be a political price to be paid for any claim of conclusiveness, whether it is well-based or not.
The seventh ground is at least arguably not reasonable, in effect, that the public may not be trusted to understand the technicalities of, and the jargon used in otherwise revealable documents. It is not as if the public is unaided by experts and others who can, including, for example, an informed journalist ....
The grounds taken did not clearly articulate something that the oral evidence suggested, namely that the respondent was concerned that what might be disclosed could well be misrepresented, abbreviated or distorted, or at least not presented in a balanced way. Indeed, cross-examination of the appellant's witnesses certainly did go some way towards demonstrating lack of balance, indeed, lack of balance even in the reporting of the particular issue with which the Tribunal was concerned. That would not however be a ground that we would regard as reasonable, for the same reasons as we would reject a ground based upon an asserted lack of technical expertise, or inability to understand jargon on the part of each and every member of the public."[91]
79. The discussion by Callinan and Heydon JJ of the seventh ground needs to be read with their observations regarding their third ground. It would seem to be consistent with other observations they made earlier in their judgment regarding the opinion evidence given by Mr Alan Rose, who has formerly been Secretary of the Attorney-General's Department and President of the Australian Law Reform Commission, and Professor Peter Dixon, who is an applied economist. Mr Rose had expressed an opinion that disclosure of documents that were provisional in nature or that were superseded would make a very useful contribution to the public debate. Callinan and Heydon JJ said:
"... Contrary to Mr Rose's opinion that the exposure of these would make 'a very useful contribution to the public debate', in our opinion documents of that kind are more likely to mislead or confuse, or to make no contribution to any useful, or currently relevant debate.
Some of Professor Dixon's evidence made the point, incontestable we think, that the topics were of public interest, as to the way in which, for example, 'bracket creep' adversely affected many taxpayers. But a distinction that he too did not make in his evidence was the distinction between provisional or superseded documents, and current ones. The former could do little to advance the analyses which Professor Dixon and other economists would wish to do, of 'the Treasury's apparent concern with the number of people who move from one tax bracket to another in any given year'."[92]
80. Hayne J also appears to support the proposition that there could, on the evidence in that case, be a public interest in refusing disclosure of documents in circumstances where they would be likely to mislead. He said:
"... In the case of those particular documents, the relevant grounds for the claim were grounds asserting that release of the material shown in the documents had 'the potential to lead to confusion and to mislead the public'. The appellant did not assert that this could not constitute a reasonable ground for the claim that had been made."[93]
81. The Commissioner has claimed that Documents 555, 556 and 557, as numbered in the Schedule lodged on 1 December 2011 are exempt under s 36. Each has been issued in part. They are documents setting out discussions among ATO officers about the objections and their determination including possible settlement with Pratt Holdings:[94]
(1) Document 555 dated 4 June 2010 is an email entitled "Mining Objection - [s 37] 10 June 2010";
(2) Document 556 dated 10 June 2010 is a Spreadsheet/Table entitled "[s 37] 10 June 2010"; and
(3) Document 557, which is an undated Spreadsheet/Table entitled "[s 37] for Mining Objection".
82. I am satisfied that each of the three documents comes within the description in s 36(1)(a) in that each contains information that discloses deliberations by and among ATO officers relating to possible settlement of the matters. Pratt Holdings has been given access to large parts of the documents that indicate that this is so. They show that the ATO has considered different views and positions that might be taken. Those parts of the three documents to which Pratt Holdings has not been granted access contain further information regarding the officers' consideration of issues relevant to any settlement of matters relating to the taxation liabilities of the group of nine. Consideration of whether to reach a settlement with a taxpayer regarding tax liability, rather than proceed to review in the Tribunal or appeal in a Court, is a function of the Commissioner and so of the ATO.[95] These are documents that disclose deliberations that have taken place or opinions expressed in the course of, or for the purposes of, those deliberative processes. Therefore, they come within
83. Apart from the contents of the documents themselves, the evidence that regarding the second limb in s 36(1)(b) is found in the affidavit of Mr Shaw sworn on 30 June 2011 when he said:
"15. I am informed by Theo Richter, the ATO officer with responsibility for the determination of the Objections, and believe that each of the Objection documents has been prepared for the purpose of determining the Objections or otherwise revolving the dispute in relation to the Objections.
84. This is a matter in which proceedings are still ongoing between Pratt Holdings and the Commissioner. On 9 December 2011, Pratt Holdings lodged a Notice of Appeal against the Commissioner's Appealable Objection Decision.[97] It may be that the appeal is heard and determined by the Federal Court or it may be that the parties negotiate a settlement. It is in the public interest that events take their course and that the Commissioner be able to adopt a position in relation to those proceedings that is shaped by the law and the evidence and his assessment of them and of the views that the Court might take of them. His position may vary from time to time as events unfold. It is in the public interest that the Commissioner be permitted to carry out his functions in relation to the resolution of the matter unfettered by any views that his officers might have expressed regarding settlement at a previous time or scenarios they might have considered and analysed from time to time.
85. This is a very different situation from that considered by the Tribunal in Murtagh. As I said in footnote 93 above, that case concerned a taxpayer's request for documents leading up to the making of an assessment and of an Objection Decision relating to that taxpayer. There were proceedings in the Tax Board of Review (Board. The Tribunal in Murtagh decided that there was nothing in the documents that would prejudice the Commissioner's case before the Board and acknowledged that it was often the case in taxation cases that the applicant held the majority of the information rather than the Commissioner. It thought that taxpayers might be encouraged to disclose all the relevant facts if the ATO were readily prepared to disclose to taxpayers the information upon which it acts. Even if a case is before the Board, the Tribunal continued, it is not contrary to the public interest for a taxpayer to have a full understanding of the basis on which an assessment is made.
86. A full understanding of the basis upon which an assessment is made is one thing but but an indication of the basis or bases on which the Commissioner might settle a matter is another. This is a basis or these are bases known only to the Commissioner as they were not communicated to Pratt Holdings. Despite that, I have looked to the law relating to "without prejudice" discussions between parties to see whether it throws any light on the public interest.
87. Section 131(1)(b) of the Evidence Act 1995 (Evidence Act) provides that:
(b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute."
There are 11 exceptions to this prohibition. They include circumstances in which the persons concerned consent to the disclosure,[98] the evidence tends to qualify evidence already admitted, the preparation of the document affects the right of a person[99] and the persons in dispute knew, or ought reasonably to have known, that the document was prepared in furtherance of a deliberate abuse of power.[100]
88. The policy underpinning s 131 is apparent from authorities considering the common law "without privilege". When Chief Justice of the New South Wales Supreme Court, Gleeson CJ said in Hong Kong Bank of Australia Ltd v Murphy:[101]
"That the rule rests, at least in part, upon public policy is clear from many authorities, and the convenient starting point of the inquiry is the nature of the underlying policy. It is that parties should be encouraged so far as possible to settle their disputes without resort to litigation and should not be discouraged by the knowledge that anything that is said in the course of such negotiations (and that includes, of course, as much the failure to reply to an offer as an actual reply) may be used to their prejudice in the course of the proceedings. They should ... be encouraged fully and frankly to put their cards on the table ... The public policy justification, in truth, essentially rests on the desirability of preventing statements or offers made in the course of negotiations for settlement being brought before the court of trial as admissions on the question of liability."[102]
89. Is it possible for the prejudice privilege to prevent disclosure to a third party who has not been involved in the mediation or settlement discussions. In Village/Nine Network & Ors v Mercantile Mutual,[103] Pincus JA explained:
"One can understand rational arguments being advanced, as a matter of policy, against too great an extension of the privilege, one being that it can be a cloak for dishonesty. But that can be so whether or not the person damaged by application of the privilege is a party to the negotiated dispute. There is no sound basis for holding that the basic purpose of protecting negotiations is sufficiently served if one allows the negotiators to be exposed to the risk that that what they privately say, to settle their dispute, may be broadcast to the world at the instance of any person who can make use of it in litigation, unless that person is a party to the dispute being negotiated."[104]
"... This must be correct. The policy that underpins the privileges is not served only where access is sought by another party to pending litigation in which the negotiators happen to be parties. To restrict its reach to parties to litigation would be to render the privilege capricious in operation. Its availability would then depend upon such inconsequential variables as whether proceedings were already on foot and the identity of the particular parties who had been joined when the negotiations took place."[105]
90. Just as it is in the public interest that parties actually negotiate, it is also in the public interest that they turn their minds to negotiation regardless of whether the other party to the dispute has done so at the time and even when the prospects for a negotiated settlement appear bleak. It is in the public interest that they consider whether a negotiated settlement might be feasible. That entails consideration of various scenarios that may present themselves and their responses to them. Those responses will be influenced by a range of issues including the legal issues raised and the probity of the evidence. They will also be influenced to some extent by the range of responses that might be made by the other party and its evidence and arguments on the law but those responses cannot be known definitively at that point. In the case of an administrative decision-maker such as the Commissioner, the law plays a vital role for a decision-maker cannot negotiate a settlement that requires a decision to be made beyond the powers conferred by the law. If negotiated settlements are to be encouraged, it is imperative that an administrative decision-maker be permitted to contemplate those sorts of issues without revealing them to the other party or to the world at large, as would be the case under the FOI Act, at a time that precedes the resolution of the matter. What the Commissioner might, or might not be prepared to accept in a negotiated settlement should not be disclosed to the other party to the world at large under the FOI Act any more than the courts will permit evidence to be led regarding admissions made in the course of without prejudice settlement negotiations between parties. What any party to a dispute may be prepared to entertain before negotiations begin may be more or less than what it is ultimately prepared to accept at the conclusion of the process. To undermine the Commissioner's negotiating position, which is necessarily framed and confined by the law and the evidentiary material, is contrary to the public interest in encouraging not only the resolution of matters outside a court or tribunal framework but their proper resolution.
91. It follows that I am satisfied that disclosure of the three documents under the FOI Act would be contrary to the public interest and that they are exempt under s 36.
SECTION 38: documents to which secrecy provisions of enactments apply
"Subject to subsection (1A), a document is an exempt document if:
(a) disclosure of the document, or the information contained in the document, is prohibited under a provision of an enactment: and
(i) that provision is specified in Schedule 3; or
(ii) this section is expressly applied to the document, or information, by that provision, or by another provision of that enactment or any other enactment."
93. There are two qualifications to the terms of s 38(1). The first is found in s 38(1A), to which it refers:
"A person's right of access to a document under section 11 or 22 is not affected merely because the document is an exempt document under subsection (1) of this section if disclosure of the document, or information contained in the document, to that person is not prohibited by the enactment concerned or any other enactment."
The second qualification, which is set out in ss 38(2) and (3), is concerned with requests for access to a document when it contains personal information about the person making the request. That is not the case here for "personal information" must be information or an opinion about an individual.[106] Pratt Holdings is not an individual but a corporate body.
95. Both secrecy provisions continued to be prescribed provisions but, with effect from 17 December 2010, Division 355 of the TA Act was repealed and a new Division 355 substituted.[109] Section 16 of ITAA36 was repealed.[110] Schedule 3 of the FOI Act was also amended and references to s 16(2) of ITAA36 and to s 355-5 of the TA Act were omitted. In their place, ss 355-25, 355-155 and 355-265 were prescribed.[111]
96. Both s 16(2) of ITAA36 and Division 355 of the TA Act, in both its guises, restrict the disclosure of certain information. The first question is whether I am required to have regard to the secrecy provision in operation when the Commissioner obtained the information, the secrecy provision in force when I make my decision or the secrecy provision in force at some earlier date such as the date on which Pratt Holdings made its request.
97. In two earlier decisions, I have decided that the Tribunal has jurisdiction to review an agency's decision made in relation to a request under the FOI Act in respect of documents coming within the ambit of the request up to and including the date on which the person made the request to that agency and not those that might come into its possession between the date of the request and the date of the Tribunal's decision.[112] That date does not necessarily determine the law to which the decision-maker must have regard in making a decision on that request.
98. Section 8 of the Acts Interpretation Act 1901 (AI Act) is a starting point. In so far as it is relevant, it provides:
"Where an Act repeals in the whole or in part a former Act, then unless the
(c) affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; or
(e) affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid;
and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed."
99. The first matter to isolate is the right, privilege, obligation or liability said to have been affected by amendments. Taking the right of access for a start, it can be said that a person requesting access to documents under the FOI Act has a right to be given access to the non-exempt documents or non-exempt parts of those documents. Does that mean that what are exempt and what are non-exempt documents is to be determined on the date of the request? I do not think that it does. I think that the FOI Act requires the determination to be made according to the law and against the factual material available at the time that the decision is made.
100. My reason for thinking that comes from the exemptions themselves. While some are dependent upon the origin or essential characteristic of the document requested,[113] others are dependent upon the consequences of disclosure.[114] None is dependent upon a characteristic a document might have had in the past but no longer has. So, for example, if disclosure of a document would involve the unreasonable disclosure of personal information about any person, it is exempt under s 41. If it would have involved an unreasonable disclosure at some time in the past but does not do so when the decision is made, the document containing that information is not exempt. The other exemptions in Part IV of the FOI Act provide similar examples. That suggests to me that the exemptions are determined at the time that the decision is made rather than as at the date the request was made. That can favour the person requesting the documents for, as time passes and events evolve, the consequences of disclosure may take the documents outside the scope of the exemptions.
101. Section 38 provides an illustration. It is cast in terms of a document's being an exempt document if its disclosure, or of information contained in it, "is prohibited under a provision of an enactment". It is not cast in terms of its disclosure "having been prohibited" at some time in the past but "is prohibited". That leads me to conclude that the secrecy provision in force at the time the decision is made is that to which I must have regard. In this case, that leads to the conclusion that ss 35525, 355155 and 355265 in Schedule 1 of the TA Act are the secrecy provisions that have been prescribed rather than their predecessor, s 355-5, or s 16(2) of ITAA36. Although 123(3) of Schedule 2 to the Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010 is directed to the documents and their contents rather than the time at which a decision is made, that item is consistent this conclusion. That item provides:
"The amendment made by item 26 of this Schedule [i.e omission of s 355-5 and substitution of ss 35525, 355155 and 355265 in Schedule 1 of the TA Act] applies to exempt documents on or after the commencement of that item, whether the documents came into existence before, on or after commencement of that item."
Sections 35525, 355155 and 355265 in Schedule 1 of the TA Act
102. The sections of the TA Act prescribed in Schedule 3 to the FOI Act are found in Division 355 of Schedule 1 to the TA Act. Of the three prescribed provisions, only s 355-25 is relevant. It provides:
(a) the entity is or was a *taxation officer; and
(ii) discloses information to another entity (other than the entity to whom the information relates or an entity covered by subsection (2)) or to a court of tribunal; and
(c) the information is *protected information; and
(d) the information was acquired by the first-mentioned entity as a taxation officer.
103. Subject to qualifications that are not relevant in this case, an "entity" is defined as:
(e) any other unincorporated association or body of persons;
Note: The term entity is used in a number of different but related senses. It covers all kinds of legal person. It also covers groups of legal persons, and other things, that in practice are treated as having a separate identity in the same way a legal person does."[115]
104. Section 355-25(2) expands upon s 355-25(1) by setting out those entities to whom protected information of another entity (protected entity) may be disclosed with impunity. An entity, described as a "covered entity" is an entity who comes within one of the seven categories set out in s 355-25(2). Among them is that the covered entity is the primary entity's registered tax agent or BAS agent or a legal practitioner representing the primary entity in relation to his, her or its tax affairs, An entity is a covered entity if both the covered entity and the primary entity are members of the same consolidated group or MEC group. A "consolidated group" is the subject of Division 703 of ITAA97. I note only that s 703-10 provides that "A consolidated group consists of: (a) a single *head company; and (b) all the *subsidiary members of the group".[116]
105. Although only s 355-25 is prescribed in Schedule 3 to the FOI Act, it cannot be understood without reference to ss 355-30 to s 355-55. Section 355-30
"(1) Protected information means information that:
(a) was disclosed or obtained under or for the purposes of a law that was a *taxation law (other than the Tax Agent Services Act 2009) when the information was disclosed or obtained; and
(c) identifies, or is reasonably capable of being used to identity, the entity.
(a) the Commissioner or a Second Commissioner of Taxation; or
(b) an individual appointed or engaged under the Public Service Act 1999 and performing duties in the Australian Taxation Office."
The final exception, set out in s 355-50, provides that:
"(1) Section 355-25 does not apply if:
(b) the record or disclosure is made in performing the entity's duties as a taxation officer.
(2) Without limiting subsection (1), records or disclosures made in performing duties as a taxation officer include those mentioned in the following table:
The record is made for or the disclosure is to ...
is for the purpose of administering any taxation law.
is for the purpose of the making, or proposed or possible making, of an order under the Proceeds of Crime Act 2002 that is related to a taxation law.
is for the purposes of criminal, civil or administrative proceedings (including merits review or judicial review) that are related to a taxation law.
is for the purpose of responding to a request for a statement of reasons under the Administrative Decisions (Judicial Review) Act 1977 in relation to a decision made under a taxation law.
(a) determining whether to make an ex gratia payment; or
is for the purpose of enabling the entity to understand or comply with its obligations under a taxation law.
(a) is of information that does not include the name, contact details or ABN of any entity; and
any board or member of a board performing a function or exercising a power under a taxation law
is for the purpose of performing that function or exercising that power.
a competent authority referred to in an international agreement (within the meaning of section 23 of the International Agreements Act 1953_)_
is for the purpose of exchanging information under such an international agreement."
Meaning of "disclose" or "disclosure" used in s 355-25
108. As Mr Pizer submitted, the application of s 355-25 of the TA Act does not turn on the consequences of disclosure as do most of the exemptions under the FOI Act. It turns instead on the disclosure of protected information regarding an entity to another entity (other than a covered entity). Mr Pizer submitted that the word "disclose" should be interpreted so that the offence created by s 355-25 does not extend to disclosure of information to an entity, other than a covered entity, when that entity already knows the information. He referred to definitions in the New Shorter Oxford English Dictionary and the Macquarie Dictionary:
"...1 ... Open up (something closed or folded up); unclose, unfold. ... 2 v.t. Remove the cover from; expose to view. ..."[118]
"... 1. to cause to appear; allow to be seen; make known; reveal: to disclose a plot_. 2. To uncover; lay open to view ..._"[119]
109. Mr Pizer relied on the interpretation of the word "disclose" adopted by the New South Wales Court of Appeal in Nakhl Nasr v State of New South Wales[120] (Nasr). In that case, a father and son sought damages for assault, false imprisonment and negligence from the State of New South Wales on the basis that it was vicariously liable for the actions of police officers on their arrest and subsequent detention. Charges against them had subsequently been withdrawn. During the cross-examination of the son at the hearing of the claim, it was put to him that, more than ten years before, he had been convicted on a charge of using offensive language and two charges of resisting arrest. The charge sheets were tendered in evidence but were objected to on the basis that the convictions were spent under the Criminal Records Act 1991 (NSW) (CR Act). It was decided that the convictions were indeed spent convictions but the Court of Appeal had to consider whether the charge sheets had been obtained in contravention of s 13 of the CR Act. Evidence that is improperly obtained was not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained improperly.[121]
110. For the purposes of this case, it is enough to set out s 13(1) of the CR Act:
"A person who has access to records of convictions kept by or on behalf of a public authority and who, without lawful authority, discloses to any other person any information concerning a spent conviction is guilty of an offence."
Justice of Appeal Campbell, with whom Beazley and Hodgson JJA agreed, said:
" Section 13(1) is a section that prohibits certain types of disclosure of information. The essence of disclosure of information is making known to a person information that the person to whom the disclosure is made did not previously know: R v Skeen & Freeman [1859] EngR 90; (1859) Bell 97; 169 ER 1182 ('uncovering ... discovering ... revealing ... imparting of what was secret ... [or] telling that which had been concealed'); Foster v Federal Commissioner of Taxation (1951) 82 CLR 606 at 614-5 ('... a statement of fact by way of disclosure so as to reveal or make apparent that which (so far as the 'discloser' knows) was previously unknown to the person to whom the statement was made'); R v Gidlow [1983] 2 Qd R 557 at 559 ('telling that which has been kept concealed'); Dun & Bradstreet (Australia) Pty Ltd v Lyle (1977) 15 SASR 297 at 299; A-G v Associated Newspapers Ltd [1994] UKHL 1; [1994] 2 AC 238 at 248 ('to open up to the knowledge of others'); Real Estate Opportunities Limited v Aberdeen Asset Managers Jersey Limited [2007] EWCA Civ 197 at [78] ('the revelation of information for the first time'). In my view, the provision by the keeper of the records of Waverley court of the records of the conviction would be a disclosure of information relating to a spent conviction only if the solicitor at the Crown Solicitors Office to whom that record was provided did not already know the information that was contained in it. When the conviction records were provided as a result of a request made by the relevant solicitor at the Crown Solicitors Office, I would not infer that the provision of the documents amounted to the disclosure of information relating to a spent conviction. There is simply no proof or concession concerning how much that solicitor knew about the convictions before obtaining the charge sheets, beyond the inference that is available from the conceded fact that she asked for the records that she knew enough about the content to make it worthwhile to ask for the records. Thus, in my view the appellants did not establish, even at the level of proof needed to establish an illegality for the purpose of a question of admissibility of evidence in a civil proceeding, that there was any contravention of section 13."[122]
111. Mr Rebikoff referred me to a further definition of "disclose" in the Concise Oxford English Dictionary:
"... make (secret or new information) known. ►allow (something hidden) to be seen. ..."
He submitted that it is the second of these meanings, rather than the first, that should be given to the word "disclose" when used in s 355-25. That would lead to the conclusion that the knowledge of the recipient of the information[123] is an irrelevant consideration.
112. In considering the matter, I have referred also to the definition in Chambers 21st Century Dictionary:
"... to make something known, to show something or make it visible. ..."[124]
This is a definition that draws within its boundaries a revelation whether what is revealed was, or was not, previously secret or new information. I have also returned to Nasr and the authorities on which it relied. I have begun with R v Skeen and Freeman[125] (Skeen and Freeman). Messrs Skeen and Freeman had admitted facts relevant to their having committed an offence before a magistrate. Before their trial, a creditor had taken them before a bankruptcy Commissioner for examination where they had again admitted those facts. At their trial, they claimed that evidence of their having admitted those facts before the bankruptcy Commissioner could not be relied upon for s 6 of 5&6 Vict c. 39 provided that no agent could be convicted on any evidence of an act done by him if he had, before being indicted for the offence, disclosed it in an examination. The majority judgment was given by Lord Campbell CJ,[126] who acknowledged that a person may disclose what is already known or may disclose that which is not known. He continued:
"... Where by the use of clear and unequivocal language, capable of only one construction, any any thing is enacted by the Legislature, we must enforce it, although, in our own opinion, it may be absurd or mischievous. But, if the language employed admit of two constructions, and according to one of them the enactment would be absurd and mischievous, and according to the other it would be reasonable and wholesome, we surely ought to put the latter construction upon it as that which the Legislature intended. Where an agent who has abused the confidence reposed in him, and fraudulently made away with property with which he was entrusted, reveals what was before unknown, or incapable of proof, it may well be that for the information and advantage obtained by his confession, he should be indemnified against the penal consequences of his misconduct, which without his confession could not have been proved. But can it be supposed that the Legislature wantonly to extend the indemnity to cases where there is no merit whatever in the accused, where he states only what he knows to be already notorious, and where neither civil nor criminal justice can be at all advanced by the alleged disclosure? Would it not be a flagrant perversion of justice if a detected delinquent, or whose guilt there is abundant evidence, possibly by a previous voluntary confession, were enabled, after the charge has been made and judicially proved, and when a bill of indictment has been prepared, and is to be preferred against him at the next meeting of the proper criminal court before which he can be tried, to procure a friendly creditor to summon him into the Court of Bankruptcy, and by there making or repeating the confession of his guilt, he might set his prosecutor at defiance and escape with impunity? In the present case where the defendants were examined in the Court of Bankruptcy there was neither uncovering, nor discovering, nor revealing, nor imparting of what was secret, nor telling that which had been kept concealed. Neither for civil nor criminating purposes was the slightest advantage obtained by the alleged disclosure. ..."[127]
113. The majority clearly recognised two meanings of the word "disclose" and looked to the purpose of the legislature in enacting the provision. The same approach has been taken in the other authorities to which reference was made in Nasr. The case of R v Gidlow[128] heard by the Queensland Court of Criminal Appeal turned on a variation of the facts in Skeen and Freeman. The approach adopted by the court was the same.
114. Those were cases concerned with the criminal law and I turn now to the approach taken in civil cases. In Foster v Federal Commissioner of Taxation,[129]
s 170(3) of ITAA36 provided that, subject to one exception, the Commissioner of Taxation could not issue an amended assessment increasing a taxpayer's liability if the assessment had been issued after that taxpayer had made a full and true disclosure of all material facts necessary for the assessment. Mr Foster had not told the Commissioner of a pending appeal but the Commissioner was a party to that appeal and knew of it. The High Court decided that Mr Foster had disclosed that fact to the Commissioner prior to the assessment. In his judgment, Latham CJ said:
"... In my opinion it is not possible, according to the ordinary use of the language, to 'disclose' to a person a fact of which he is, to the knowledge of the person making a statement as to the fact, already aware. There is a difference between 'disclosing' a fact and stating a fact. Disclosure consists in the statement of a fact by way of disclosure so as to reveal or make apparent that which (so far as the 'discloser' knows) was previously unknown to the person to whom the statement was made. Thus the taxpayer could not add anything to the commissioner's knowledge with respect to the appeal. In my opinion in these circumstances it should be held that the failure of the taxpayer to repeat to the commissioner what he already knew did not constitute a failure to disclose material facts."[130]
115. Justice Mitchell of the South Australian Supreme Court adopted a similar interpretation of the word "disclose" in Dun & Bradstreet (Australia) Pty Ltd v Lyle.[131] Her Honour did so in the context of s 8(1)(a) of the Fair Credit Reports Act 1974 (SA) providing that a reporting agency must, without charge, disclose all information in its files relating to the person who makes a written request for it. Dun & Bradstreet was a reporting agency which had previously given Mr Ats copies of reports it held on two companies. Those reports related in part to Mr Ats' business activities. Dun & Bradstreet advised Mr Ats that it held no personal report on him. Although Mitchell J regarded the reports on the companies as relating also to Mr Ats, she decided that:
"... It would be, it seems to me, an insupportable imposition upon a reporting agency if s. 8, properly interpreted, meant that any person could make application for the disclosure recorded information already disclosed to him and the reporting agency be guilty of an offence if it failed, on any application, to provide such information to the applicant. I think that the word 'disclose' in s. 8 is carefully selected, and that it is sufficient compliance with s. 8(1)(a) if a person making an application for information in the files of a reporting agency is told something to the effect that the reporting agency has only the same information as it had when an earlier application for information was made by the person seeking the information. ..."[132]
116. This case must be read against its facts. Justice Mitchell's judgment cannot be read as supporting a conclusion that information is not disclosed to a person if that person already knows it. The furthest that it can be taken is this. Information was not required to be disclosed when it had already been disclosed to the person in response to an earlier application. Dun & Bradstreet had already complied with its statutory obligation by having previously provided the reports and indicating that it held no other material related to Mr Ats.
117. The same is true of the final case to which I will refer and to which reference was made in the passage I have set out from Nasr above. It is Real Estate Opportunities Limited v Aberdeen Asset Managers Jersey Limited[133] (Real Estate Opportunities case). The passage quoted from it in Nasr is at [78]: "the revelation of information for the first time". When regard is had to the whole of the paragraph from which this is taken, it becomes clear that the Court of Appeal was distinguishing between "publication" and "disclosure" in the context of the Financial Services and Markets Act 2000 (FSMA). The Financial Services Authority (FSA) has powers to require authorised persons to provide information or produce documents. Section 348 of the FSMA prohibits the disclosure of confidential information obtained by the FSA in discharge of its functions. Section 391 prohibits the publication of warning and decision notices. The claimant, Real Estate Opportunities Limited (REOL), instituted proceedings against the respondents claiming breach of contract and tortious duties of care. In those proceedings, the defendants discovered, but resisted production of, documents that they held but which arose out of an investigation conducted by the FSA. Lady Justice Arden, with whom Tuckey and Lawrence Collins LLJ agreed, noted that the FSMA created an antithesis between "disclosure" of information and its "publication"[134] and it is in that context that she said:
"... Disclosure involves the revelation of information for the first time whereas publication does not. Publication, however, by its very nature must in my judgment necessarily involve a dissemination with a view to making information available to the public. On this basis, while dissemination to a single person could be publication if done for the requisite purpose, dissemination to a larger number of persons for a different purpose would not necessarily amount to publication. In this case, the dissemination will only be for the purpose of the litigation. The documents of which inspection is given will remain confidential until the trial begins and will thereafter remain confidential if appropriate arrangements are made before they are deployed during the trial. Thus, making documents available for inspection does not of itself result in the publication of the information contained in those documents. ..."[135]
118. It seems to me that, rather than suggesting that the word "disclose" must always be interpreted as referring to making known what was previously unknown or secret, each of these authorities has looked to the context in which the word is used. That is so even though only the earliest of them, Skeen and Freeman, expressly referred to the broader range of meanings attributable to the word.
119. Returning to s 355-25, I do not accept Mr Pizer's view of the meaning of "disclose" and so of "disclosure" as those words are used in s 355-25. In my view, it carries not only the first of the meanings given in the dictionary definitions to which he referred me but also the second. It is a word that is not limited only to the revelation of what is not known to the would-be recipient of the information and I have reached that conclusion having regard to the words of the provision and the context in which they appear.
120. Beginning with the context, I note that s 355-25 appears in Division 355. Section 355-10 sets out the objects of the Division as being:
"(a) to protect the confidentiality of taxpayers' affairs by imposing strict obligations on *taxation officers (and others who acquire protected tax information), and so encourage taxpayers to provide correct information to the Commissioner; and
(b) to facilitate efficient and effective government administration and law enforcement by allowing disclosures of protected tax information for specific, appropriate purposes."
It also falls within Sub-division 355-B, of which s 355-20 states that:
"The main protection for taxpayer confidentiality is in this Subdivision. It is an offence for taxation officers to disclose tax information that identifies an entity, or is reasonably capable of being used to identify an entity, except in certain specified circumstances."
121. Information may come into the possession of taxation officers in various ways. Among them are through the use of the Commissioner's coercive powers to obtain information under ss 263 and 264 of ITAA36. Section 263 gives the Commissioner full and free access to, among other things, books, documents and other papers for any of the purposes of the Act. Section 264 gives him power to require any person to furnish him with such information as he requires and to attend and give evidence before him or one of his officers concerning his or her own income or assessment or that of another and to produce books, documents and other papers relating to those matters.
122. As the person who not only has these powers but also has the general administration of the taxation law, the Commissioner is in a position not unlike that of the FSA in the Real Estate Opportunities case. Section 355-20 seems to suggest that the principles underpinning s 355-25 and its exceptions are not unlike those underpinning s 349 of the FSMA:
"31. What is the apparent object of preserving confidentiality in information provided to the FSA? The preservation of confidentiality appears to serve a number of purposes. First, it ensures respect for the private life of the person who was the subject of information: if none of the gateways provided by section 349 is available, neither the FSA nor a secondary recipient can disclose the information without obtaining the consent of the subject of the information (section 348(1)). Disclosure in those circumstances without such consent might involve a violation of article 8 (respect for private and family life) of the European Convention on Human Rights. Secondly, restrictions on the disclosure of confidential information in the financial markets are likely to assist in the process of regulation because of the encouragement that it is likely to give to people in the market to disclose timeously information which may be of importance to the regulator for the purpose of exercising its regulatory functions. As the judge accepted, the position of the FSA may in this respect be compared to the position of the Bank of England under the Banking Act 1987, of which Lord Woolf MR, giving the judgment of the Court of Appeal in Barings Plc v Coopers & Lybrand [2000] EWCA Civ 148; [2000] 3 AER 910 said ([16]):
'The maintenance of confidentiality under Pt V of the 1987 Act for information provided to the Bank is plainly of great importance. Protecting those who provide information to the Bank encourages voluntary disclosure from institutions, third parties and whistle blowers, any of whom might otherwise be unwilling to divulge material. The Bank is of the view that, absent such protection, it would be deprived of the raw material it requires for effective supervision.'
32. In Re Galileo Group Ltd [1999] Ch 100, at 110, Lightman J made the point that confidentiality enhances candour in favour of other regulators. He said:
'The maintenance of confidentiality as provided in section 82 is of vital importance to the discharge by the bank of its supervisory responsibilities under the Act of 1987. Confidentiality is vitally important to encourage the maximum free flow of information from supervised institutions and third parties whether such disclosure is obligatory or voluntary.'"
123. Having looked at the context, I have looked also to the words of s 355-25. The word "disclose" is not used in Subdivision 355-B only when prescribing the conduct of a taxation officer. It is also found in s 355-30 when defining the expression "protected information". The word "disclose", or a derivative of it, is used to describe how information that becomes protected information has come into the possession of the Commissioner. Apart from two other criteria that the information must satisfy, the information must have been "disclosed or obtained under or for the purposes of a law that was a taxation law ... when the information was disclosed or obtained". This is the effect of s 335-30(a). There is nothing in the provision that suggests that the information disclosed or obtained under or for the purposes of a taxation law will not have been disclosed if it was already known to the Commissioner or his officers. Information comes to the Commissioner from many sources whether it be under his coercive powers or voluntarily from a taxpayer or a third party. Were the word "disclose" to be given a narrow meaning and were the Commissioner to hold the same information from a multitude of sources, he would have to negotiate the equivalent of an administrative labyrinth to unravel the information path to identify the time at which information was first received. It makes no sense to limit the protection in that way from a practical point of view. More importantly, to do so would be inconsistent with the protection s 355-20 describes to limit the meaning of the word "disclosure" to information not already known to the Commissioner. Why would information be protected from disclosure the first time it is disclosed to the Commissioner but loses that protection if it is repeated from another source?
124. The High Court's interpretation of "disclose" in Foster v Federal Commissioner of Taxation does not require me to decide otherwise. The provisions regulating the amendment of assessments has been amended and s 170(3) of ITAA36 and the other provisions in ss 170 to 177 of ITAA36 no longer make a similar provision. The taxpayer's obligations to provide information to the Commissioner are no longer framed in terms of "disclosure". Section 8C of the TA Act, for example, speaks of the taxpayer's obligation "to furnish", "to give", "to lodge" and "to notify" but not "to disclose".
125. Finally, I refer to s 355-35. Its effect is that, in defending a charge that an offence has been committed under s 355-25, a person cannot rely on the fact that the entity to which the protected information relates has consented to its disclosure. That situation is not directly in point in this case but it underlines the restriction on disclosure imposed by Parliament. If consent is not a defence to a charge, it is difficult to see why Parliament would have intended a narrower meaning to be applied to the word "disclosure". Instead, it is clear that Parliament intended that the disclosure of protected information be closely regulated and that favours the interpretation of "disclosure" that I have adopted.
126. Mr Pizer submitted that s 355-25 does not prohibit the disclosure of information relating to a de-registered company. The information relating to it cannot be protected information if it has ceased to exist. He began by referring to s 601AD(1) of the Corporations Act 2001 (Corporations Act), which provides that "A company ceases to exist on deregistration." There can be no question about the correctness of his submission on this point. I note that provision is made in Part 5.A.1 for its property to be vested either in the Commonwealth or in the Australian Securities and Investments Commission, which must deal with it as provided in that Part. As Mr Pizer submitted, de-registration means that a de-registered company can neither sue[136] nor be sued[137] without first being reinstated. Reinstatement for those purposes is made by a court order made under s 601AH(2) of the Corporations Act on the application of a person aggrieved by the deregistration or by a former liquidator of the company.
127. Mr Pizer went on to submit that an assessment of whether s 355-25 applies depends on whether the information is protected information. Whether it is protected information depends upon its meeting the three conditions specified in s 335-30(1). The first of those conditions is to be determined by reference to the time at which it was disclosed or obtained. The second two focus on when the disclosure is to be made and not when the information was disclosed to, or obtained by, the Commissioner, Mr Pizer submitted. That follows from the fact that the conditions are drafted in the present, rather than the past, tense. As LME1 is de-registered, the second two conditions cannot be met as it is not an entity.
128. I agree with Mr Pizer that an assessment of whether information is protected information must be made at the time that disclosure of that information is being considered. As he says, that immediately takes me back to the time at which the information was disclosed or obtained in order to ask whether it was disclosed or obtained under or for the purposes of a law that was a taxation law at that time.
129. Having decided that the information meets that requirement, the next question is to ask whether the information relates to the affairs of an entity. Certainly, that question is posed in the present tense for the requirement in s 335-30(1)(b) is posed in the present tense. That requirement, however, does not necessarily lead to the conclusion that the entity to whose affairs it relates must be an entity currently existing, as in the case of a corporation, alive, as in the case of an individual, or continuing, as in the case of a partnership, unincorporated association or body of persons, trust, superannuation fund or approved deposit fund all of which are entities for the purposes of s 355-30(1).
130. Taking an individual as an example, information can relate to the affairs of an individual even though the individual has died and no longer exists. It relates, in the present tense, to the affairs of that individual when he or she was alive. After his or her death, the information does not change its character to become, for example, information that relates to the affairs of the estate of the late individual or to a trust created under his or her will. There may well be other information that was disclosed or obtained after his or her death and has that character. It may be that the fact that the earlier information is relevant in administering the individual's estate but the fact of death does not change the character of the earlier information from that relating to the individual to that relating to the individual's estate or to a trust or, as Mr Pizer would have me find, to no-one at all.
131. It is not an answer to say that personal information relating to an individual would be likely to be protected from disclosure under s 41 of the FOI Act. Section 32(1)(a) of that legislation provides that an exemption provision under Part IV "... shall not be construed as limited in its scope or operation in any way by any other provision of this Part by virtue of which documents are exempt documents". As exemption under s 38 is determined by reference to provisions of legislation other than the FOI Act, the effect of s 32(1)(a) is that I must not construe or limit the scope or operation of those secrecy provisions by reference to any other exemption provision, including s 41.
132. The reasoning I have adopted in relation to an individual applies to each of the other groups or bodies prescribed as an entity. In relation to a corporation, s 335-30(1)(b) requires that the information relates, in the present tense, to the affairs of the corporation. While it was in existence, all information relating to its affairs came within that provision. The information continues to have that characteristic even when the corporation has ceased to exist. It relates to the affairs of a corporation when that corporation was registered and in existence.
133. Section 335-30(1)(c) requires consideration to be given to the information at the time disclosure is contemplated. The question is whether it identifies, or is reasonably capable of being used to identify, "the entity". The entity is the entity referred to in s 335-30(1)(b). Whether that entity continues to live or exist is irrelevant to the issue to be decided.
134. This interpretation is supported by ss 355-10, which sets out the objects of Division 355 and s 355-20, which sets out what Subdivision 355-B is about.[138] It is also supported by the more general principles to be gleaned from Division 355. Although discussing a different regulatory environment from that of taxation, the statement made by Lightman J in Re Galileo Group Ltd[139] remains apt:
"... The maintenance of confidentiality as provided in section 82 is of vital importance to the discharge by the bank of its supervisory responsibilities under the Act of 1987. Confidentiality is vitally important to encourage maximum free flow of information from supervised institutions and third parties whether such disclosure is obligatory or voluntary."[140]
135. For these reasons and provided the information meets the criteria set out in s 355-30(1), I do not consider it relevant that LME1 was de-registered on 18 February 2002 and no longer exists. It remains an entity for the purposes of s 38.
136. Section 355-25 does not apply if a taxation officer discloses protected information in performing his or her duties. Examples of situations in which a taxation officer would make such a disclosure are set out in s 355-50(2). Relying on the example in Item 6, the Commissioner has given Pratt Holdings access to the Private Ruling, the Review of Private Ruling, the Position Paper setting out the ATO's position together with the documents referred to in that paper, correspondence with the ATO setting out its position, a detailed summary of its position prepared for the purposes of the Objection Decision and the Objection Decisions together with the reasons for making those decisions. Item 6 recognises that disclosure for the purpose of enabling the entity to understand or comply with its obligations under a taxation law is disclosure made in performing a taxation officer's duties as a taxation officer.
137. Mr Pizer submitted, and I agree with him, that s 355-50(2) does not set out all of the circumstances in which a taxation officer may disclose information in the course of performing his or her duties. He referred to three authorities referring to other circumstances that come within a tax officer's duties. The first two were decided in the context of the secrecy provision formerly found in s 16(2) of ITAA36:
" The 'duty' of an officer extends beyond the performance of work of an administrative nature such as processing returns, making assessments, considering and dealing with objections, conducting investigations into the affairs of taxpayers and matters of this nature. It includes the occasions on which he is required by the judicial process to produce documents or give evidence in courts, by affidavit or viva voce, concerning the affairs of some other person which he has acquired as an 'officer', where the proceedings are referable to the imposition, assessment or collection of revenue. ..."[141]
" The functions and proper actions authorised, and indeed required, by the engagement of an officer in the defined sense, include observance of and compliance with obligations arising at common law and in equity, save as excluded or supplanted by statute ... Also included, in my view, in the exception is what is appropriate to discharge or satisfy requirements or duties imposed pursuant to procedures existing under statutes other than the Tax Act. The receipt of a requires which falls within the terms of s 13(1) of the ADJR Act leads, by dint of s 13(2) of that Act, to the imposition of upon the decision-maker of a duty or requirement to prepare and furnish the statement described in subs (1). To the extent that in discharging or satisfying that duty or requirement the decision-maker, being an 'officer' for s 16 of the Tax Act, is divulging or communicating to any person any information respecting the affairs of another person acquired by him by reason of or in the course of his appointment or employment as an officer, he does so in the performance of a duty as an officer and within the exception provided in s s16(2)."[142]
138. The third case to which Mr Pizer referred me was also decided in light of s 16(2). It is a decision of the Tribunal in Re Young and Commissioner of Taxation[143] (Young). Mr Young was the Senior Manager in the Serious Non-Compliance Section of the ATO's Queensland office. In that role, he had taken part in a decision to prosecute Mr Collier for allegedly failing to comply with notices issued under s 264 of ITAA36. The charges were dismissed and Mr Collie instituted civil proceedings in the Supreme Court of Queensland seeking damages from Mr Collie and other officers for alleged malicious prosecution and misfeasance in public office.
139. The Tribunal began by referring to an extract from the judgment of Dixon CJ in Canadian Pacific Tobacco Co Ltd v Stapleton:[144]
"... I think that the words 'except in the performance of any duty as an officer' ought to receive a very wide interpretation. The word 'duty' there is not, I think, used in a sense that is confined to a legal obligation, but really would be better represented by the word 'function'. The exception governs all that is incidental to the carrying out of what is commonly called 'the duties of the officer's employment'; that is to say, the functions and proper actions which his employment authorizes."[145]
140. Having regard to the circumstances of the case, the Tribunal concluded that Mr Young was performing a duty as a taxation officer in defending the Supreme Court proceedings. That meant that the prohibition in s 16(2) of ITAA36 did not prevent him from making copies of documents containing protected information to the extent that, to do so, was arguably relevant to his defending the Supreme Court proceedings.
141. More pertinent to this case is Mr Young's request under the FOI Act for access to certain documents concerning a meeting held on 30 June 2003. The background to the request was that a suggestion had been made that Mr Young had engaged in conduct tantamount to a vendetta against Mr Collie. Mr Young denied any allegation of wrongdoing. In the Tribunal's view, the documents he requested would have been exempt documents had s 38(1) stood alone.
142. As it is, s 38(1) does not stand alone for it is qualified by s 38(1A)[146] and the Tribunal turned to this section saying that:
"26. The operation of the subsection is illustrated by the decision of Branson J in Illawarra Retirement Trust v Secretary, Department of Health and Ageing.[[147]] In that case her Honour was concerned with two documents described as the 'DAT report' and the 'SCS record'. The documents had been produced by the Department of Health and Ageing and the Aged Care Standards and Accreditation Agency respectively. The second respondent, Dr Duncan, was the daughter of a woman who, prior to her death, had been resident in an aged care hospital operated by the applicant, Illawarra Retirement Trust. Dr Duncan had sought access to the DAT report and the SCS record under the FOI Act. Initially the access request had been refused on the basis that each of the documents was an exempt document. However, following a number of internal reviews, a decision had been made to release the DAT report, with some material deleted, to Dr Duncan. An internal review had confirmed the earlier determination that the SCS record was an exempt document for the purposes of the FOI Act.
27. The Trust and Dr Duncan applied to the Tribunal for review of the two decisions. The Tribunal affirmed both of the decisions under review. The Trust appealed the decision to the Court and Dr Duncan brought a cross-appeal. The question for determination was whether, on a proper construction of s 38(1A) of the FOI Act and Div 86 of the Aged Care Act 1997 (Cth), Dr Duncan's right of access to the SCS record under ss 11 and 22 of the FOI Act was not affected by its classification as an exempt document under s 38(1) of the FOI Act. Sections 86-2 and 86-3 of the Aged Care Act were specified in Schedule 3 of the FOI Act. Section 86-2 of the Aged Care Act provided:
(a) the person makes a record of, discloses or otherwise uses information; and
(b) the information is protected information; and
(c) the information was acquired by the person in the course of performing duties or exercising powers or functions under this Act.
(e) conduct that is otherwise authorised under this or any other Act.'
28. Section 86-3 of the Aged Care Act authorised the Secretary of the Department to disclose protected information to specified classes of people or in specified circumstances, in particular to a person who was, in the opinion of the Secretary, expressly or impliedly authorised by the person to whom the information relates to obtain it. Dr Duncan contended that s 86-2(1) did not prohibit disclosure of protected information; it merely set out the consequences of disclosure. Dr Duncan further placed reliance on ss 86-2(2) and 86-3 which permit the disclosure of protected information in prescribed circumstances.
'[56] When the Secretary discloses protected information in circumstances authorised by s 86-3 of the Aged Care Act, the disclosure is made under the Aged Care Act, not under the FOI Act. Section 86-3 has no relevance, in my view, to the operation of s 38(1A) of the FOI Act as it does not affect a person's right to access to a document under the FOI Act. It is only the Secretary, acting under the Aged Care Act, who [sic] s 86-3 exempts from the prohibition contained in s 86-2. No other person may rely on the exception contained in s 86-3.
[57] I note incidentally that a person who uses protected information disclosed to him or her under s 86-3 is guilty of a criminal offence if he or she uses it for a purpose other than the purpose for which the information was disclosed (s 86-5(c)). I did not hear argument on the significance of s 86-5 of the Aged Care Act for Dr Duncan should she wish to disclose information obtained by her pursuant to s 86-3 of the Aged Care Act. I express no view on that question.
[58] As is mentioned above, s 86-3 gives the Secretary authority to disclose protected information to certain classes of people and in certain circumstances. In the events that happened in this case, the second DAT report decision was made by a delegate of the Secretary. In the course of reaching the second DAT report decision, the delegate of the Secretary exercised the authority vested in the Secretary to disclose to Dr Duncan the protected information contained in the edited DAT report on the basis that, in her opinion, Dr Duncan was a person authorised by Mrs Reynolds to obtain it. As is mentioned above, this disclosure was a disclosure authorised by the Aged Care Act; it was not the granting of access to a document under the FOI Act.
[59] The delegate of the Secretary did not exercise the authority given to the Secretary by s 86-3 of the Aged Care Act in respect of the protected information contained in the unedited DAT report or in the SCS record. Disclosure of protected information in the unedited DAT report and in the SCS record remains prohibited by s 86-2(1) of the Aged Care Act, under a provision of an enactment specified in Sch 3 to the FOI Act. The unedited DAT report and the SCS record are therefore exempt documents under s 38 of the FOI Act.
[60] A decision of the Secretary under s 86-3 of the Aged Care Act is not a "reviewable decision" within the meaning of Div 85 of the Aged Care Act. The Aged Care Act does not provide that applications may be made to the Tribunal for review of decisions made under s 86-3 of the Aged Care Act (see s 25 of the AAT Act). As the unedited DAT report and the SCS report are exempt documents under s 38 of the FOI Act, the Tribunal had no power to decide that access to them, so far as they contained exempt matter, was to be granted.'"[148]
143. The Tribunal in Young then set out the way in which it saw s 38(1A) operating in the case before it:
"30. In our view, s 38(1A) operates in this way in the instant case. In defending the Supreme Court proceedings Mr Young is performing his duty as an officer. Thus documents arguably relevant to the defence of those proceedings may be disclosed to him as an exception, created by s 16(2A) of the ITAA 1936, to the general prohibition in s 16(2) of that Act. The documents that answer the description of arguable relevance would ordinarily be exempt documents under s 38(1) of the FOI Act however because disclosure of the documents to Mr Young is not prohibited by another enactment, viz. s 16(2A) of the ITAA 1936, Mr Young's legally enforceable right of access to the documents is not affected.
31. Mr McLeod, counsel for the Commissioner, submitted that it was relevant in considering this aspect of the case to have regard to Mr Young's evidence that the documents were not all required to consider his defence to the Supreme Court proceedings. We do not consider the point is good. If Mr Young has a right of access, his purpose in seeking access is immaterial. We must consider the documents to determine whether they are arguably relevant to his defence of the Supreme Court proceedings.
32. We should add that if Mr Young, having obtained access, were to make use of the documents for any purpose beyond the performance of his duties (and there is no suggestion that he would) he would no longer be entitled to the protection in s 16(2A) of the ITAA 1936."[149]
144. Mr Pizer would have me take the principles set out by Branson J in Illawarra Retirement Trust v Secretary, Department of Health and Ageing[150] to the point where they justify a taxation officer's disclosing protected information to comply with the "hearing rule of natural justice". This is an expression that means, in essence, that a decision-maker must act in accordance with the rules of natural justice or, as they are often called, the rules of procedural fairness. As Kyrou J said in Shields v Overland:[151]
"... In appropriate cases, and especially where the decision-maker has exclusive knowledge of specific information, the hearing rule requires the decision-maker to provide to a person affected not only material that is adverse to that person, but all material that has substantive relevance to the matter in issue - including, but not in particular, any exculpatory material - whether or not the decision-maker proposes to rely upon it."[152]
145. When Pratt Holdings lodges its appeal against the Objection Decision, Mr Pizer submitted, the Commissioner will have a duty to disclose to it all relevant documents. It is not in the interests of natural justice to require Pratt Holdings to wait until it has instituted its appeal before it can have access to the documents that would be "relevant to the challenge to be launched".[153] He continued:
"39.1 The resources of the Court are limited and precious. As a matter of clear policy, it is in the public interest to provide taxpayers with early and full access to relevant documents, as this is likely to reduce the need for litigation, or its scope.
39.2 Further, given the tight timeframes in place in the Federal Court, it is in the interests of justice to provide taxpayers with early and full access to relevant documents to ensure that their ability to challenge decisions of the Commissioner is not unfairly compromised.
40. In the circumstances, if the Commissioner were to disclose many of the documents in dispute to the Applicant (particularly the documents leading up to the Private Ruling being issued), that would be a disclosure in the performance of the Commissioner's decisions on the objections. The disclosure of that information would, therefore, not be prohibited by section 355-25. And since the disclosure of the information would not be prohibited by that section, that information is not exempt under section 38 of the FOI Act."
146. There is no question that the Commissioner (and Pratt Holdings) will be required to give access to documents through the discovery procedures in the Federal Court. Under the procedures set out in Practice Note TAX 1, discovery will be limited four categories of documents unless otherwise ordered by the docket judge.[154] Disclosing protected information in the course of providing that discovery will then be made in the course of a taxation officer's performing his or her duties. Disclosure will come within s 355-50(1) and so be an exception to the prohibition that would otherwise arise under s 355-25.
147. Until the Commissioner's obligation to comply with the Federal Court's discovery procedures arises and his taxation officers make disclosure as a consequence, they cannot be said to be making that disclosure in performing their duties as taxation officers. It is only when they are required to do so that that the particular duty arises and the exception in s 355-50(1) to the prohibition of disclosure of protected information arises.
148. That is not a situation to which s 38(1A) of the FOI Act refers. It is a situation more akin to that described by Branson J in Illawarra Retirement Trust v Secretary, Department of Health and Ageing. In that case, her Honour emphasised that the disclosure was made under the Aged Care Act and not under the FOI Act. The Secretary was authorised to disclose protected information if of the opinion that the person to whom it was to be given was expressly or impliedly authorised to receive it by the person to whom the information relates. That was so even though the Explanatory Memorandum to the Freedom of Information Amendment Act 1991, which added s 38(1A), stated:
"53. New subs 38(1A) is inserted by clause 28 ... to ensure that a person is not denied access under s 38 of the FOI Act to a document merely because the secrecy provision to which s 38 applies prohibits disclosure of the document to other persons but not to that person. For example, if an enactment containing a s 38 secrecy provision also contains a provision allowing disclosure at the discretion of the agency and if the agency exercises the discretion to disclose a document to a person who has made an FOI request for the document, the document is not exempt from disclosure under s 38 to that person."
149. Justice Branson's view might be thought to be at odds with the Explanatory Memorandum but I do not think that is the case. What I think her Honour was saying was that careful regard has to be had to the nature and circumstances of each disclosure. The Explanatory Memorandum makes reference to a general discretion found in the enactment that permits the person requesting access to have that access despite that enactment's also containing a secrecy provision. An example of that would be s 135A(5C) of the National Health Act 1953 (NH Act) which, when referring to the general secrecy provision set out in s 135A(1),[155] provides that:
(a) the provision to a person of a document that was provided to the Secretary by the person in relation to a claim for a pharmaceutical benefit; or
(b) the divulging or communicating to a person of information relating to the person; or
150. Justice Branson, it seems to me, was concerned with a secrecy provision and a discretionary power to give access, which was found in the same enactment but which was not a general discretion of the sort found in s 135A(5C) of the NH Act. It was a discretion confined by the Secretary's forming an opinion about the wishes of the person to whom the information related. That goes beyond the general qualification to the exemption found in s 38(1A). Justice Branson found that the Secretary had not exercised the authority to disclose other documents and they remained exempt under s 38(1).
151. Applying her Honour's interpretation, s 355-50 will exclude from the prohibition in s 355-25 any disclosure required in order to comply with any discovery order in the forthcoming appeal. It will be disclosure that is confined to the documents required to be discovered whether it be limited discovery or more general discovery. Compliance will be a duty and not a discretionary decision of the sort referred to in the Explanatory Memorandum. The duty to make disclosure will not arise until the time to give discovery arrives. Once discovery has been completed, the taxation officers' duty in that regard will be at an end. There is no other discretionary power given to the Commissioner to give access, whether under the FOI Act or otherwise, to an applicant who is a party to litigation against him and to whom he has to give, or to whom he has already, given discovery. As there is no duty, disclosure outside the discovery process cannot be regarded as one of the duties of a taxation officer and disclosure is prohibited.
152. That means that I would take a different view from that of the Tribunal in Young. On its view, the Commissioner had a duty to disclose to Mr Young documents that were arguably relevant in Supreme Court proceedings against him. I would not quarrel with that proposition but, on the basis of the analysis in Illawarra Retirement Trust v Secretary, Department of Health and Ageing, that disclosure would occur as a result of the exercise of a duty unrelated to s 38(1A). It would be unrelated because it would be a duty that arises in one particular set of circumstances. The duty's having been fulfilled, it is at an end. If it is not fulfilled within the requisite time, it would be a matter for the Supreme Court in the management of the proceedings. It would not be a matter for resolution under the FOI Act for there was no ongoing discretion remaining with the Commissioner to give Mr Young access outside the context of the Supreme Court proceedings. Therefore, s 38(1A) would have had no role to play.
153. The same analysis leads to the conclusion that disclosure in the course of complying with the hearing rule of natural justice or the rules of procedural fairness in a proceeding such as a court or Tribunal proceeding relating to an Objection Decision or is disclosure for the purpose of compliance and not under the FOI Act. This is a duty of tax officers but it is not necessary to explore its content. Having complied with it, the duty has been performed and is at an end. The fact that tax officers may be asked for the same documents under the FOI Act does not mean that their disclosure is not prohibited under the s 355-25. The exception in s 355-50(1) applies only when they make the disclosure in performing their duties. Their duty arises only in particular circumstances. Once those circumstances have ceased to exist or do not yet exist, the duty does not arise. Therefore the exception does not apply and disclosure of the protected information is prohibited under s 355-25. If the time at which the circumstances were to exist and the time at which a request for access were to be made under the FOI Act were to coincide, disclosure would be made as a consequence of the duty and not as a consequence of the application of s 38(1A).
154. Disclosure for the purpose of complying with the hearing rule of natural justice at some earlier time before an assessment or Objection Decision raises similar considerations. As Mr Rebikoff submitted, consideration must first be given to the content of that duty and it will be shaped by the taxation law including the TA Act. Disclosure made in complying with the duty will be excluded from the prohibition on disclosure. As the Private Ruling is taken to have been made under Division 359,[156] the Commissioner is taken to have been under a duty when making the Objection Decision to give the taxpayer applying for that Private Ruling. That is a duty that applied at that time. If access is given to information, it is given under s 359-65(2) of the TA Act and not by virtue of s 38(1A) of the FOI Act.
155. Disclosure to a taxpayer is not prohibited if disclosure is for the purpose of enabling it to understand or comply with its obligations under a taxation law. Applying the analysis of Branson J in Illawarra Retirement Trust v Secretary, Department of Health and Ageing, it is arguable that disclosure does not occur under the FOI Act but as a consequence of s 38(1A) of the FOI Act. If, however, the Commissioner were to take the view that disclosure is required for that purpose, there is no reason why he should not make it when giving access under the FOI Act. Any argument about the foundation of the obligation to give disclosure should not cloud the practicalities of making disclosure or giving access.
156. Section 355-45 of the TA Act provides that s 355-25 does not apply if the information is already available to the public otherwise than as a result of certain provisions it specifies. The specified provisions are not relevant in this case. Mr Pizer submitted that most of the information in Documents 78, 435, 437-438, 440. 445-447, 508-509, 519 and 541 in Proceedings No 5419 of 2010 come within the exception to the secrecy provision for they are ASIC forms.
157. Mr Rebikoff submitted that, while the Commissioner accepts that information available to the public is not prohibited from disclosure under s 355-25, the question is whether Pratt Holdings has shown that the information contained in the documents in question is so available.[157]
158. I do not agree that the question should be framed in this way. Section 61 of the FOI Act provides that, subject to a qualification that is not relevant:
"... the agency ... to which or to whom the request was made has the onus of establishing that a decision given in respect of the request was justified or that the Tribunal should give a decision adverse to the applicant."[158]
159. As Gleeson CJ said in King v The Queen:[159]
"... The point of an onus of proof is to identify the party who is obliged to establish a fact and who will bear the legal consequences of failure to do so. ... The onus cannot, at one and the same time, be upon both parties in relation to one and the same factual issue. ..."[160]
160. That does not mean that the decision-maker must necessarily prove a negative at the outset in this case i.e. that the information is not information that is already available to the public. What it does mean is that the decision-maker must look to the type of information that is in question. If it is of a sort that is readily known, or should readily be known at least in the public sector, to be available to the public, it is incumbent upon the decision-maker to consider the matter. If, for example, it is information that might be available to the public through a public register or electronic data base of some type, the enquiry should be made. Information about a variety of matters from bankruptcies to land titles would come within that description and would be expected to be known by someone working in public administration. If the information is available to the public, the effect of s 355-45 is that its disclosure is not prohibited and, to the extent that it contains that information, the document is not exempt under s 38 of the FOI Act.
161. The Federal Court's electronic data base available under the Commonwealth Courts Portal provides another example. Information that Pratt Holdings has lodged an appeal is available to the public on that site.[161] If that same information were to appear in a document in the possession of the ATO in circumstances that made it protected information under s 355-30(1) and it were requested under the FOI Act, its disclosure would not be prohibited under s 355-25 of the TA Act. That would follow from the fact that it is information that was already available to the public and would come within the exception in s 355-45.
162. Section 355-45 does not say that the information is excluded from the prohibition on disclosure only if it is available to the public free of charge. Information remains available to the public even if the public has to pay for that information. Information about land titles and bankruptcies are an example. If that is the case, though, the decision-maker's thoughts should turn also to s 12 of the FOI Act.
"A person is not entitled to obtain access under this Part to:
(b) a document that is open to public access, as part of a public register or otherwise, in accordance with another enactment, where that access is subject to a fee or other charge; or
(ba) a document that is open to public access, as part of a land title register, in accordance with the law of a State or Territory where that access is subject to a fee or other charge; or
(c) a document that is available for purchase by the public in accordance with arrangements made by an agency."
163. The effect of s 12 is that, while the exemption in s 38 may not apply because of a provision such as s 355-45 of the TA Act, the person requesting access under the FOI Act may not be entitled to access if the document requested is open to public access, whether for a fee or not. Care must be taken to ensure that the document to which the request relates is the same as the document that is open to public access. It is not enough that the information in the document, or some of it, is available to public access but in a different form. In that situation the exemption in
s 38(1) will not apply in this case for the information will have been excluded from the prohibition in s 355-25 by the exclusion in s 355-45. Section 38, however, refers to both the "document" and to "information contained in the document" and will apply to either if its disclosure is prohibited under the provision of an enactment of the sort specified in s 38(1)(b). Section 12 is careful to refer to a "document" and not to information in a document. Therefore, if the document is open to public access, a person is not entitled to obtain access under Part III of the FOI Act. Section 11, which is also found in Part III, provides that a person has a legally enforceable right to obtain access in accordance with the FOI Act but that right is subject to the provisions of the FOI Act. Section 12 is one of those provisions and its effect is to exclude from the right of access those documents open to public access.
164. I have examined the documents for which the exemption is claimed under s 38 in accordance with the principles that I have set out in Attachment E in
mind. That means that I have examined each in order to decide whether:
(1) the information contained in a document, or that part of it for which exemption is claimed is protected information within the meaning of
(2) it is protected information but is excluded from the prohibition on disclosure by virtue of ss 355-45 to 355-210; and
(3) a document coming within the terms of the requests is excluded from the right of access by virtue of s 12.
165. Pratt Holdings provided a list of some 160 documents to which they have already had access otherwise than under the FOI Act or which contain the same information. They fall into several categories. By far the largest comprises documents that were obtained from a member of the Pratt Group.[162] They are Documents 593 to 674 in the Schedule of Documents prepared on 24 November 2011. Other documents can be grouped by reference to whether they were obtained by officers of the ATO exercising powers under ss 263 or 265 from the Visy Industries Group, Barrick Gold Corporation, Allco, HSBC Bank Australia Limited, Westchester Financial Services Pty Limited. Their origin appears from the reference number they have been given in these proceedings.[163] A third category of documents is identified by reference to the initials of the taxation officers who wrote them.[164] A final broad category comprises a range of documents coming within the two proceedings and not identified by reference to author or origin particularly.
166. During his cross-examination of Mr Bok, Mr Pizer showed him a number of documents and asked him to compare them with specific documents claimed to be exempt under s 38 of the FOI Act. Mr Bok indicated when there was no difference between the documents, whether the information was the same or essentially so, whether one document contained handwritten annotations and the other did not, whether one appeared to be a part of the other and whether it was not the same document at all. The list of documents identifies all but the documents that were not the same.
167. On the basis of Mr Bok's evidence, I am satisfied that each of the documents contains information that was disclosed or obtained under, whether it be
ss 263 or 264 of ITAA36, or for the purposes of a law that was a taxation law when the information was disclosed or obtained. From my examination of the documents, I am satisfied that the information relates to the affairs of at least one entity. That entity is named in the document concerned and, where its name is not used, the information is reasonably capable of being used to identify it.
168. This is the case for the information in respect of the information in Document 5 in proceedings No. 5080 of 2011 claimed to be exempt under s 38. I take that document as an example indicative of other documents in Pratt Holdings' list of documents already known to it. Document 5 contains protected information and so would be prohibited from disclosure under s 355-25(1) unless it were to come within an exception to the prohibition. The only possible exceptions to the prohibition that might be relevant are those in s 355-50 permitting disclosure in the course of a taxation officer's duties. I have already set out the way in which I think that the exceptions to
s 355-25 and s 38(1A) of the FOI Act fit together. In summary, my view is that, when the exceptions apply, access is not given in response to a request under the FOI Act but in compliance with the taxation officer's duties under the taxation law. It may be that the two coincide in their timing in some instances but not in their characterisation.
169. In the case of Document 5, I am not satisfied that a taxation officer's duties would require its disclosure. If it is relevant in the Federal Court proceedings and is required to be discovered, that duty has not yet arisen. When it does, compliance will take place in the context of those proceedings. Section 38(1A) of the FOI Act cannot be used to found a decision that the document is not exempt under
s 38(1) in relation to the passages for which it is claimed to be exempt. Although the situation may change at some time in the future, at the time of making this decision, its disclosure is prohibited under the TA Act.
170. I have looked also at the duty to disclose information to enable Pratt Holdings to understand or comply with its obligations under a tax law. By way of background, I note that Pratt Holdings has been given access to:
(1) a Private Ruling issued to Lachlan and LME1 on 23 February 1998;
(2) a Review of Private Ruling dated 23 September 2005;
(3) a Position Paper issued to Lachlan Resources NL on 29 June 2009;
(4) a letter from Mr Kevin Hughes of the ATO to Mr Greg Janes of Deloitte dated 24 August 2007;
(5) a letter from Mr Kevin Hughes to Lachlan Resources NL dated
(7) a letter from Mr Bock to Mr Graeme Treloggan of Deloitte dated
(8) a report prepared for the purposes of the Objection Decisions and setting out the basis for the Commissioner's position; and
171. The obligations of Pratt Holdings or of one of the group of nine in the Pratt Group in this particular matter are tied to those of LME1 in relation to the losses it could claim and which were the subject of the Private Ruling. The information for which exemption is claimed in Document 5 does not have any relevance to those particular obligations and so its disclosure is not excluded under s 355-50 from the prohibition in s 355-25.
172. I have taken a second example. That is Document 11 in proceedings No. 5080 of 2011: Document ATO.002.0197. It is a Mining Joint Venture Agreement and, on its face, it might be thought to be relevant to the Private Ruling and so to Pratt Holdings' understanding its obligations under a tax law when its obligations arise from losses incurred by LME1 as a result of a Joint Venture. The obligations, however, arise as a result of the Commissioner's view, and his issuing an assessment as a consequence of his view, that LME1 did not act in accordance with the Private Ruling. That is one of the criterion that must be satisfied before the Commissioner is bound by a Private Ruling. The Private Ruling, whether made under the previous legislative framework as is the case here, or under the present provisions, is a self-contained document. It sets out the arrangement to which it applies and that is the focus of whether a taxpayer acted in accordance with the arrangement and so relied upon the Private Ruling. The documents that might have been considered in the course of making the Private Ruling are not generally relevant at that stage. Therefore, a document such as Document 11 is not relevant to Pratt Holdings' understanding its obligations under the tax law.
173. Two more documents provide an example of a document where it might be expected that the document or the information in it is publicly available. One is Document 519 (ATO.HSBC.001.0013 dated 24 September 1999) in proceedings
No. 5419 of 2011 and listed in the Schedule prepared on 24 November 2011. That is a document available through other means to Pratt Holdings. The other is Document 541 (ATO.HSBC.001.0042 and undated) in proceedings No. 5419 of 2011 and listed in the Schedule prepared on 24 November 2011. It is not listed in the documents known to Pratt Holdings. Both are copies of an ASIC Form 312 entitled "Discharge or Release of Property from a Charge". Document 519 is a signed copy with no obvious omissions. Document 541 is an unsigned and undated copy missing a copy of a document to which it refers.[165] The substance of the documents is not identical in all respects.
174. Although no evidence was given on the issue, I think that I can note that s 1274(1) of the Corporations Act requires ASIC to keep such registers as it considers necessary. Under s 1274(2), a person may inspect any document lodged with ASIC other than those documents described in that provision. In so far as the registers are concerned, s 1274A provides that ASIC may permit a person to search a prescribed register to obtain prescribed information. "Prescribed registers" are those set out in
r 9.1.01 of the Corporations Regulations 2001 (Corporations Regulations). They include the register of companies registered under s 118 of the Corporations Act. "Prescribed information" includes details of its full name, date of its registration, principal place of business, its officers and its paid up and unpaid up capital.[166]
175. Section 5 of the Corporations (Fees) Act 2001 (CF Act) provides that the regulations may prescribe fees for chargeable matters including the inspection or search of a register kept by, or a document in the custody of, ASIC under that Act and the making available by ASIC, under that Act, of information (whether in the form of a document or otherwise).[167] The fees applicable to inspection of documents on ASIC registers are set out in Schedule 1 to the Corporations (Fees) Regulations 2001 (CF Regulations) at items 29 to 37.[168]
176. Returning to Document 519, I am satisfied on the basis of the document produced on behalf of Pratt Holdings that it is a document that has been lodged with ASIC. I reach that conclusion on the basis of the copy of the document in Pratt Holdings' folder of documents known to it. That copy is the same in all respects to that claimed to be exempt in its entirety apart from the fact that it has a lodgement stamp in the form of a barcode that has been placed on it by ASIC. I make that finding on the basis of my knowledge of the ASIC documents that I have examined in cases over the years. It is a document whose inspection is not excluded by s 1274(2) of the Corporations Act as it is lodged under s 269(1) of that legislation and that is not a section named in s 1274(2). In view of the provisions relating to charging, I am also satisfied that it is a document for which a fee or charge must be paid before it may be inspected. Therefore, Document 519 comes within the ambit of s 12 and so outside the scope of the right to access under Part III of the FOI Act. It is excluded from access rather than exempt from access.
177. Document 541 is in a different position. It bears no lodgement stamp from ASIC and would appear to be incomplete. In light of that, I am satisfied that it would not have been lodged with ASIC in that form. Therefore, it is not excluded by
178. The question then becomes: is it excluded from the prohibition from disclosure in s 355-25 of the TA Act for I have already decided that it is protected information? That takes me back to s 355-45. If Document 541 contains information that is available to the public by virtue of the public's right to inspect a lodged document, s 355-45 will exclude that information from the prohibition on disclosure. Unlike s 12, s 355-45 focuses on the information and not on the document. Form 312 is not a form that is excluded from public inspection.
179. On the evidence that I have, I do not know whether a completed version of Document 541 was lodged with ASIC. Section 355-45 focuses on the information that is available to the public and not on the document but it is a document of a sort that might reasonably be expected to have been lodged and required to have been lodged. If it has been lodged, it is likely to be available to the public. I am in a position where I do not know whether the information in the document is, or is not, available to the public. If this were a case in which there were no burden of proof on either party, my state of uncertainty would lead me to conclude that I had failed to reach the state of mind necessary to change the decision that had already been made that the document is exempt.[169] Section 61(1), however, does impose a burden of proof on the ATO. It is a burden to establish "that a decision given in respect of the request was justified or that the Tribunal should give a decision adverse to the applicant." Having reached a state of uncertainty the burden imposed by s 61(1) means that I am not satisfied that the decision given in respect of Document 541 is justified. Therefore, I find that it comes within s 355-45 of the TA Act and so is excluded from the prohibition against disclosure in s 355-25. It is not an exempt document under s 38 of the FOI Act.
180. By way of comparison, I have looked at a document such as Document 288. It is undated but is a form entitled "Department of Mines and Energy Application for Renewal Exploration Permit". Reference is made on the document to s 147 of the Mineral Resources Act 1989 (Vic). The relevant legislation is now the Mineral Resources Development (Sustainable Development) Act 2006 (Vic). It makes no provision for public inspection of documents lodged under the legislation. That places Document 288 in a different position from Document 541 from the outset. Unless Pratt Holdings had produced material to show that it was publicly available or the ATO became aware of it in some other way, I would not expect that ATO to lead evidence to establish that information in a document such as Document 288 is not available to the public in some other way.
181. I have looked at the other documents known to Pratt Holdings in whole or in part. They can be grouped according to the first two examples I have given. I am satisfied that the ATO has correctly claimed exemption under s 38 in relation to the whole or part of the remainder of those documents for the same reason.
182. I have looked at the other documents for which exemption is claimed under s 38 either in whole or in part. Apart from ASIC forms, the examples I have chosen in the previous section of these reasons are equally applicable to these documents. That reasoning leads to the same conclusions as I have in relation to Documents 5 and 11.
183. Documents 78, 435, 437-438, 440, 445-447 and 508-509 are similar to Documents 541 and 519 in that they are ASIC forms. They can be described as:
Form 312 "Notification of discharge or release of property from a charge"
Dated, signed and marked as a "File Copy" but not copy of document bearing ASIC's lodgement code
Dated, signed and marked as a "File Copy" but not copy of document bearing ASIC's lodgement code
Form 902 "Notification of information supplementary to a form or document previously lodged"
Dated, signed and marked as a "File Copy" but not copy of document bearing ASIC's lodgement code
Dated, signed and marked as a "File Copy" but not copy of document bearing ASIC's lodgement code
Form 304 "Notification of change to officeholders"
Dated, signed and marked as a "File Copy" but not copy of document bearing ASIC's lodgement code
Form 203 "Notification of change of office hours or address of one or more corporations"
Dated and signed but not copy of document bearing ASIC's lodgement code
Form 370 "Notification of officeholder of resignation or retirement"
Dated and signed but not copy of document bearing ASIC's lodgement code
Form 902 "Notification of information supplementary to a form or document previously lodged"
Dated and signed but not copy of document bearing ASIC's lodgement code
Form 902 "Notification of information supplementary to a form or document previously lodged"
Dated and signed but not copy of document bearing ASIC's lodgement code
184. For the reasons that I have given in relation to Document 541, I am in a state of uncertainty as to whether the information is available to the public from ASIC. I have no direct evidence that it is, or is not, available from ASIC. In relation to all of the documents listed in the table, it is information of a type and the documents are of a type that would reasonably be expected to have been lodged given that they are completed and signed. It relates to events in a company's history that must be notified to ASIC under the Corporations Act. Those marked "File Copy" would suggest that they have been lodged but I cannot take them any further. In so far as the information in the documents might relate to LME1, which is a deregistered company, I note that ASIC has the power to dispose of records or to destroy them in accordance with
s 1274(10) of the Corporations Act.[170] Its powers are curtailed by the lodgement date of the documents but, given that the oldest of the documents has not yet been lodged for 15 years, it is to be expected that they would not have yet been destroyed if they have been lodged. The ATO has not satisfied me that the documents other than Document 78 is exempt under s 38 of the FOI Act because I am not satisfied that the information, which is protected information, is not excluded from the prohibition under s 355-45. That is to say, I am not satisfied that its disclosure is prohibited by
s 355-25. Therefore, the exemption in s 38 does not apply.
185. Section 22 provides for the deletion of exempt matter or irrelevant material. In this instance, it is relied upon only for the deletion of what is claimed to be irrelevant material.[171] Therefore, I have set out its provisions only in so far as they relate to that. Section 22(1) provides:
(i) not to grant a request for access to a document on the ground that it is not an exempt document; or
(ii) that to grant a request for access to a document would disclose information that would reasonably be regarded as irrelevant to that request; and
(b) it is possible for the agency or Minister to make a copy of the document with such deletions that the copy:
(i) would not be an exempt document; and
(ii) would not disclose such information; and
(c) it is reasonably practicable for the agency or Minister, having regard to the nature and extent of the work involved in deciding on and making those deletions and the resources available for that work, to make such a copy;
the agency or Minister shall, unless it is apparent from the request or as a result of consultation by the agency or Minister with the applicant, that the applicant would not wish to have access to such a copy, make, and grant access to, such a copy."
What is "possible" and what is "reasonably practical"?
186. What is meant by the word "possible" as used in s 22(1)(b)? Its ordinary meanings include "... 1 achievable; able to be done ... 2 capable of happening ...".[172] The ordinary meanings of the word "practicable" include
"...1 capable of being done, used or successfully carried out; feasible...".[173] The word "practical" has the same meanings:
"... But practical has the further connotation of 'efficient, sensible, useful' and is therefore more judgemental. ..."[174]
185. It seems to me that the two words have been chosen carefully. The word "possible" is used in s 22(1)(b) because the sole focus of the enquiry is whether deletions are able to be made to a document that would otherwise an exempt document with the result that it is no longer an exempt document.[175] Workload considerations are not relevant at this point for the sole enquiry is whether it is "possible" to make a copy that would not be an exempt document or disclose information irrelevant to the request. They become relevant in considering what is "reasonably practical".
187. On the face of the provision, it is not relevant to enquire whether the resulting document would make sense to a reader or whether it would be misleading. Section 22(1)(b) appears to focus on the mechanical task of deleting that which makes the document an exempt document from that which does not. Deletion is the only tool that may be used and so, for example, rewriting or reordering the document in any way is not contemplated. Section 22(1)(b) does not appear to focus on whether the material in the document that remains after the deletions have been performed makes any sense.
"... Paragraph (b) appears to be directed to whether the exempt matter is capable of being severed from non-exempt matter without the edited copy being misleading (see Harris v Australian Broadcasting Corporation (No 2) ... at 266 per Beaumont J). ..."[178]
189. When I go to Harris, I cannot find any passage that introduces a requirement that the resulting copy not be misleading. Harris followed on from an earlier judgment of Beaumont J in Harris v Australian Broadcasting Corporation,[179] in which he had considered s 36 of the FOI Act. That section exempts what can loosely be described as internal working documents if disclosure under the FOI Act would be contrary to the public interest.[180] Section 36(5)[181] qualifies what may be regarded as an internal working document, as specified in s 36(1), by providing that:
"This section does not apply to a document by reason only of purely factual material contained in the document."
190. In his earlier judgment, Beaumont J had referred with approval to a passage from Environmental Protection Agency v Mink[182] in which the Supreme Court had looked at Exemption 5 in the United States' Freedom of Information Act 1966. The Supreme Court had considered the historical background to Exemption 5 deciding that it:
"... demonstrates that Congress intended to incorporate generally the recognized rule that 'confidential intra-agency advisory opinions ... are privileged from inspection' (under discovery law) 'memoranda consisting only of compiled factual material or purely factual material contained in deliberative memoranda and severable from its context would generally be available for discovery by private parties in litigation with the Government. ...".[183]
191. In Harris, Beaumont J referred also to a further case from the United States in which Tamm J had said:
" The focus of the FOIA is information, not documents, and an agency cannot justify withholding an entire document simply by showing that it contains some exempt material. It has long been a rule in this circuit that non-exempt portions of a document must be disclosed unless they are inextricably intertwined with exempt portions. In 1974, Congress expressly incorporated that requirement into the FOIA, which now states that '[a]ny reasonably segregable portion of a record shall be provided ... after deletion of the portions which are exempt'. 5 U.S.C. s 552(b) (Supp. V 2975)."[184]
Beaumont J followed this passage with the statement:
" It would seem that the severability test which has been applied in the American courts is reflected in s. 22(1)(b) of the local Act."[185]
192. His Honour then went on to decide whether the investigative material consisting of underlying facts could be severed from material in the nature of recommendations. On his view, one document consisted of factual material in its entirety and no issue of severability arose. With regard to the second document, he found three sections that contained factual material. Those sections could be severed from the rest of the document and access given to them. In the remaining sections of the document, he found "occasional examples of factual material" and decided he did "... not think that it is possible to sever this material from its context and it is thus not 'purely' factual". Beaumont J's reference to its not being "purely factual" was a reference to the document's not being purely factual within the meaning of s 36(5). Had he been able to sever it, he would have been left with a document that was purely factual and so not a document coming within the compass of s 36(1) at all. On my understanding of his judgment, Beaumont J took a purely mechanical approach to the issue. It was not an approach that was determined or even influenced by whether the passages that remained after severance would be cohesive or intelligible.
193. The other cases to which the Tribunal referred in Carver were Re Bracken and Minister for Education and Youth Affairs[186] (Bracken) and Re Waterford and Treasurer of the Commonwealth of Australia (No 2)[187] (Waterford). In the report of Deputy President Hall's reasons in Bracken, I can find no reference to his considering s 22 of the FOI Act. In Waterford, Deputy President Todd did consider
s 22 after he had decided that certain material was exempt under s 36 of the FOI Act. The report, which is presented with lines deleted, records his saying:
" On the question of releasing figures alone, I accept Mr Evans' assertion that [... two lines ...] deleted. If the whole argument were released a reader would have at least some guidance as to how the figures could be used. If one were in possession of the text it would be possible, assuming one were sufficiently knowledgeable, to assess the reliability of any particular piece of data. Without the text no such assessment is possible and the figures, standing alone and with apparent imprimatur of the Treasury, assume an undeserved certainty.
Despite, then, the apparent ease with which the figures can be excised from the remainder of the document, I find that to do so would lead to the production of a highly misleading document. Section 22 does not operate in these circumstances."[188]
194. Deputy President Todd did not give any reasons for concluding that
s 22 "... does not operate in these circumstances." I can find none on the face of s 22. All that s 22(1)(b) requires is that it is possible to make a copy of the document with such deletions that the copy would not be an exempt document (or disclose information reasonably regarded as irrelevant to the request in appropriate circumstances). Parliament has not included misleading as a criterion in s 22(1)(b). Assuming that ss 22(1)(a) and (c) are also met, the obligation upon the agency is to make and grant access to the copy unless it is apparent that the applicant would not wish to have access to it. Section 22 does not base the obligation on any requirement that the copy not be misleading or that the agency might not wish to give access to it for some reason. Whether a document would be misleading has been considered relevant in considering the public interest test under, for example, s 36(1)(b)[189] but there is no public interest test encompassed within s 22 either expressly or impliedly.
195. To introduce a requirement in s 22 that the document from which deletions have been made not be misleading is, in my respectful opinion, to introduce a test that is not found within s 22. That conclusion fits with the structure of the FOI Act. It is concerned with access to documents and not to information as such. Therefore, an agency cannot be required to compile information that does not already exist in documentary form. The FOI Act excludes from its compass documents of certain types or having certain characteristics such as those available under the Archives Act 1982[190] or in the memorial collection within the meaning of the Australian War Memorial Act 1980.[191]
196. The only time that the FOI Act concerns itself with information in documents comes in Part IV when it sets out the criteria for determining exempt documents. Some of those exemption provisions are framed in terms of the characteristics of the documents rather than the information they contain. The Cabinet document exemption in s 34 provides a ready example of that. Others are based on the effect that their disclosure would, or could reasonably be expected to, have. Here, the information contained in the document is crucial for it is the effect of the disclosure of that information that is assessed. Section 43 providing an exemption for documents relating to business affairs is an example and so too is s 45 relating to documents containing material obtained in confidence. If the documents are exempt under Part IV, that is an end of the matter. If the information they contain is such that it is not exempt under Part IV, the FOI Act does not allow the agency to question whether the information makes sense or whether the person having access will be able to understand it or will be misled by it. If the question is not asked in those circumstances, it would seem inconsistent to read such a question into s 22(1)(b) or
s 22 generally, which only arises after issues of exemption have been decided.
197. Workload considerations become relevant under s 22(1)(c). It requires a consideration of whether the work is reasonably capable of being done, and so practicable, having regard to the nature and extent of the work involved in deciding on and making the deletions and the resources available to do the work. Whether it is "reasonably" capable of being done depends upon whether it is:
"... 1 sensible; rational; showing reason or good judgement. ... 3 in accordance with good reason. 4 fair or just; moderate; not extreme or excessive. ..."[192]
Again, that enquiry does not extend to a consideration of whether the document that remains after the deletions have been made will make sense to a reader. Had that been a relevant consideration, Parliament would not have limited the matters to which regard is to be had i.e. to the nature and extent of the work involved in deciding on and making the deletions and the resources available to do that work. Parliament could have chosen, for example, the words "reasonably practical". Arguably, they might have, although not necessarily, introduced concepts of sensibility and usefulness and not simply those of capability of being done and feasibility that accompany the chosen word: "practicable".
198. The Commissioner decided that Documents 35, 550, 675, 676 and 677 as shown in the Updated Schedule of Documents in Dispute dated 1 December 2011 contain information irrelevant to the requests for access. I have considered each of them and their description and my findings and decision about each of them is set out below. In reaching my decisions, I have kept in mind the terms of the requests:
(1) Document 35:Spreadsheet/Table titled Mining Schemes (ATO.003.0248) - released in part
I am satisfied that the information kept from disclosure to Pratt Holdings relates to investigations of the activities of an entity or entities other than Pratt Holdings. To the extent that the document contains that information, it does not come within the terms of either request and would reasonably be regarded as irrelevant to them. Therefore, access should be given to a copy from which that information has been deleted in the manner already decided upon by the Commissioner.
(2) Document 550: Memorandum entitled Office Minute - Briefing Document on Pratt Group Audit & Objections to P Duffus and K Fitzpatrick
I agree with Mr Shaw's description of the content sought to be deleted from this document i.e. it is "... information in respect of other aspects of the operation of the Pratt Group investigated by the ATO."[193] It is not information about aspects of the operation of LME1 or about any other aspect of the information described the two requests. Therefore, the Commissioner has correctly made the decision to delete that information as irrelevant under s 22 of the FOI Act.
(3) Document 675: Report entitled Priority Technical Issue Proposal - File REF - ... from Crowne C of Australian Taxation Office (ATOe.001.0001) - released in part
(4) Document 676: Report entitled Priority Technical Issue Proposal from Crowne C of Australian Taxation Office (ATOe.001.0025) - released in part
(5) Document 677: Report entitled Priority Technical Issue Proposal from Crowne C of Australian Taxation Office (ATOe.001.0036) - released in part
The sole piece of information sought to be deleted is a reference on pages 9, 8 and 8 respectively of the documents to identification numbers for data held on the ATO's computer system.[194] This is not information falling within the scope of the two requests and is properly deleted under s 22.
199. For these reasons, I affirm the Commissioner's decision in so far as it relates to the five documents claimed to contain irrelevant material within the meaning of s 22 of the FOI Act.
(1) affirm that part of the decision of the respondent dated 2 December 2010 affirming its earlier decision dated 28 September 2008 except in so far as it claims exemption either in whole or in part for the documents identified in the Schedule of Documents dated 1 December 2011 equating to Documents 519, 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 as identified in the Schedule of Documents dated 24 November 2011; and
(2) in relation to that part of the decision of the respondent dated 2 December 2010 affirming its earlier decision dated 28 September 2008 that claims exemption either in whole or in part for the documents identified in the Schedule of Documents dated 1 December 2011 equating to Documents 519, 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 as identified in the Schedule of Documents dated 24 November 2011:
(i) Document 519 is excluded from access under s 12 of the Freedom of Information Act 1982; and
(ii) Documents 541, 78, 435, 437, 438, 440, 445, 446, 447, 508 and 509 are not exempt under s 38 of the Freedom of Information Act 1982.
I certify that the two hundred paragraphs are a true copy of the reasons for the decision herein of
Signed: ....................................................................
* These reasons for decision have been prepared in a short time frame to accommodate the time restrictions that apply to Pratt HoldingsR[1] appeal against the Commissioner's Objection Decision. That appeal has been lodged in the Federal Court. My reasons have not be proof read and I reserve the right to correct typographical errors, remove this note and substitute a revised version of my reasons if necessary. The substance of my reasons will remain unchanged.
[2] The provisions of the TA Act applying to Private Rulings in 1998 are set out in Attachment C.
[3] During the course of the hearing, the parties agreed that Document 590 was no longer in dispute and the Documents 17 and 19 were to be released in full. Further parts of Documents 565 and 675 were to be released as not exempt.
[5] A document in the possession of the ATO is a "document of an agency" whether created in the ATO or received in it: FOI Act, s 4(1). The ATO is an "agency" because it is a "prescribed authority". It is a prescribed authority because it is "... an unincorporated body, established for a public purpose by, or in accordance with the provisions of an enactment ...": FOI Act, s 4(1). "An unincorporated body is a body which, of itself, has no separate legal existence apart from its members. It is merely a group or collection of people who have come together for particular shared aims or purposes." (R v Abdul Nacer Benbrika at [2009] VSC 142 at [104] per Bongiorno J). Section 4 of the Taxation Administration Act 1953 (TA Act) provides that there shall be a Commissioner of Taxation and three Second Commissioners of Taxation appointed by the Governor-General. Section 4A(1) provides that the staff necessary to assist the Commissioner are to be persons engaged under the Public Service Act 1999. Together, the Commissioner and the staff form an unincorporated body. It can be said that the body has been established for a public purpose being the administration of taxation legislation (e.g. Income Tax Assessment Act 1997, s 1-7 and TA Act, s 3A). The next question is whether that unincorporated body has been established by, or in accordance with, the provisions of an enactment. It has been established in the sense that it has been "set up" by s 4A(1) and so by an enactment. That this is so is supported by the fact that the body is recognised in s 4A(2) of the TA Act when it provides that "For the purposes of the Public Service Act 1999: (a) the Commissioner and the APS employees assisting the Commissioner together constitute a Statutory Agency; and (b) the Commissioner is the Head of that Statutory Agency." It is further supported by the Financial Management and Accountability Act 1997 (FMA Act). That legislation applies to a "prescribed agency", which is defined in s 5 to mean "... a body, organisation or group of persons prescribed by the regulations for the purposes of this definition." Regulation 5(1) of the Financial Management and Accountability Regulations 1997 (FMA Regulations) provides that, for the definition in s 5, "... the combination of: (a) a body, organisation or group mentioned in Schedule 1; and (b) any other persons who perform financial tasks in relation to a function of that body, organisation or group; is prescribed." Item 127 in Schedule 1 to the FMA Regulations prescribes the Commissioner, Second Commissioners and APS staff assisting the Commissioner as a prescribed body.
[8] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 in proceedings No. 5080 of 2010 (5080T documents) at 28
[10] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 in proceedings
[11] The Mining Cell provided advice to resolve identified complex mining issues.
[12] Tax Laws Amendment (Improvements to Self Assessment) Act (No. 2) 2005 (TLAISA Act), No. 161 of 2005, s 3 and Schedule 2, items 16 and 28
[13] TLAISA Act, s 3, Schedule 2, item 28(2)
[29] (1985) 7 ALD 626, Davies J
[30] [1984] AATA 249; (1984) 54 ALR 313; 6 ALD 112, Davies J, President, Sir Ernest Coates and RA Sinclair, Members
[31] [1984] AATA 67; (1984) 5 ALD 588, Deputy President Hall and I Prowse and CA Hughes, Members
[32] (1984) 6 ALD 687, Deputy President Hall
[33] [1984] FCA 179; (1984) 2 FCR 64; 54 ALR 285; 6 ALD 198, Sheppard J
[35] [1983] FCA 242; (1983) 50 ALR 551; 5 ALD 545 at 560; 553 (see also Re Murtagh and Commissioner of Taxation and Re Howard and Treasurer of the Commonwealth of Australia)
[36] [1984] FCA 179; (1984) 2 FCR 64; 54 ALR 285; 6 ALD 198 at 76-77; 298-299; 210-211
[38] [2000] AATA 512 at [54]- [56]
[39] [1990] AATA 218, 13 September, 1990
[40] [1990] AATA 218, 13 September, 1990 at [25]
[42] (1990) 92 ALR 651 at 657-658
[43] (1986) 7 NSWLR 104 at 111
[44] Unreported, SC (NSW), 11 May 1984 at 18
[45] Both cases were cited with approval by Toohey and Gaudron JJ in Wallis v Downard-Pickford (North Queensland) Pty Ltd [1994] HCA 17; (1994) 179 CLR 388; 120 ALR 440 at 400; 446
[47] (1979) 24 ALR 300 at 303-304
[49] Danvers v Commissioner for Railways (NSW) [1969] HCA 64; (1969) 122 CLR 529 at 537
[50] [1992] HCA 21; (1992) 173 CLR 473; 106 ALR 611 at 484; 618
[51] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[53] [1984] FCA 179; (1984) 2 FCR 64; 54 ALR 285; 6 ALD 198 at 76-77; 298-299; 210-211
[55] [1984] AATA 249; (1984) 6 ALD 112; 84 ALR 313 at 118-119; 319 and see also Re Howard (1985) 7 ALD 626 at 630
[56] [1984] AATA 67; (1984) 5 ALD 588 at 606 and see also Re Howard (1985) 7 ALD 626 at 630
[58] (1996) 43 ALD 139 at 148
[60] (1984) 6 ALN N347 at N349
[61] (1984) 6 ALN N347 at N349
[62] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[63] Where purely factual material is mixed with opinion, advice or recommendation that is exempt under the FOI Act, consideration must be given to whether that exempt matter can be deleted from the document in accordance with s 22.
[64] [1984] FCA 8; (1983) 51 ALR 581, Bowen CJ, St John and Fisher JJ
[65] [1984] FCA 8; (1983) 51 ALR 581 at 586
[68] [1968] EWCA Civ 3; [1969] 2 QB 375 at 391
[69] [2005] FCAFC 142; (2005) 145 FCR 70 at 75-76, Tamberlin and Jacobson JJ, Conti J dissenting
[72] (1985) 7 ALD 626 at 634 Given the position expressly taken in McKinnon that the exercise does not permit the Tribunal to engage in a balancing exercise, it would seem that this aspect of Davies J's reasons for decision relating to any benefit from disclosure might have to be treated cautiously.
[74] (1985) 7 ALD 626 at 636
[75] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 428; 189; 518 [5]
[76] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 433; 193; 522 [19]
[77] [1989] HCA 61; (1989) 168 CLR 210 at 216
[78] Water Conservation and Irrigation Commission (NSW) v Browning [1947] HCA 21; (1947) 74 CLR 492 at 505 per Dixon J
[79] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 443-444; 202; 531[55]
[80] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 468; 221-222; 550-551 [130]
[82] Excluded from the power given by s 50(4) of FOIVIC were the exemptions relating to Cabinet documents (s 28), documents affecting national security (s 29A) Bureau of Criminal Investigation documents (s 31(3)) and documents relating to personal privacy (s 33).
[84] [1991] VicRp 6; [1991] 1 VR 63 at 75
[85] [1991] VicRp 6; [1991] 1 VR 63 at 77
[86] Re Lordsdale Finance Limited and Department of the Treasury [1985] AATA 174 per Deputy President Todd. Australian citizenship was originally required of an applicant for amendment or annotation of personal records but that requirement was removed when s 48 was repealed and replaced by the Freedom of Information Amendment Act 1991 No. 137 of 1991: s 33.
[87] Take, for example, commercial information submitted to government for the purposes of obtaining approval of a pharmaceutical substance: Re Smith, Kline and French Laboratories (Australia) Ltd and Others v Secretary, Department of Community Services [1991] FCA 150 per Sheppard, Wilcox and Pincus JJ
[88] [2005] FCAFC 142; (2005) 145 FCR 70; 220 ALR 587 at 76; 591
[89] Section 36 cannot, of course, be used to justify a decision to give access to a document which is exempt under another provision of Part IV even if its disclosure would not be contrary to the public interest within the meaning of s 36(1)(b).
[90] "The release of the material would tend to be misleading or confusing in view of its provisional nature, as it may be taken wrongly to represent a final position (which it was not intended to do) and ultimately may not have been used or have been overtaken by subsequent events or further drafts." (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 450; 208; 537 [80] per Callinan and Heydon JJ
[91] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 466-467; 220-221; 549-550 [120]-[128]
[92] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 465; 219; 548 [116]-[117]
[93] (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 448; 206; 535 [70]
[94] They are identified by reference to the numbers assigned to them in both the Consolidated Schedules dated 24 November 2011 and 1 December 2011. Both show the same reference numbers assigned by the ATO's solicitors being ATO.KH.001.0077, ATO.KH.001.0079 and ATO.KH.001.0081.
[95] This is analogous with the documents found by the Tribunal in Murtagh to come within s 36(1)(a) even though the documents requested reveal different deliberative processes by the Commissioner. The documents in Murtagh disclosed deliberative processes relating to the exercise of the Commissioner's statutory power to make or amend an assessment and to determine an Objection to an assessment. See [1984] AATA 249; (1984) 54 ALR 313; 6 ALD 112 at 321-322; 119-120
[97] Federal Court proceedings No. VID1425/2011
[98] Evidence Act, ss 131(2)(a) and (b)
[105] [1999] QCA 276 at [35]; footnotes omitted
[106] Definition of "personal information": FOI Act, s 4(1)
[107] Fuel Tax (Consequential and Transitional Provisions) Act 2006 (FTCTP) Act, Act No 73 of 2006,
[108] FTCTP Act, s 3 and Schedule 5, item 153 and s 2
[109] Tax Laws Amendment (Confidentiality of Taxpayer Information) Act 2010, Act No 145 of 2010 (TLA Act), s 3 and Schedule 1, item 1 and s 2
[110] TLA Act, s 3 and Schedule 2, item 32 and s 2
[111] TLA Act, s 3 and Schedule 2, items 24 and 26 and s 2
[112] Re Lobo and Department of Immigration and Citizenship [2010] AATA 583; (2010) 116 ALD 639; 52 AAR 304 and Re Radar Investments Pty Ltd and Health Insurance Commission [2004] AATA 166; (2004) 80 ALD 733
[113] See, for example, s 33(1)(b) (information divulged in confidence by foreign government or international organisation) and 34 (Cabinet documents). Section 38 falls into this category.
[114] See, for example, s 36 (internal working documents), and 37 (affecting enforcement of law and protection of public safety).
[115] TA Act, s 3AA(2) and ITAA97, ss 995-1(1) and 960-100(1)
[116] TA Act, s 3AA(2) and ITAA97, ss 995-1(1) and 703-10(1)
[118] Shorter Oxford English Dictionary, 5th edition, 2002, Oxford University Press
[119] Macquarie Dictionary, revised 3rd edition, 2001, The Macquarie Library Pty Ltd
[120] [2007] NSWCA 101; Beazley, Hodgson and Campbell JJA
[123] The recipient's identity and the purpose of the disclosure would remain a relevant consideration under the exceptions to s 355-25.
[124] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[126] Pollock CB, Wightman J, Martin B, Willes J, Bramwell B, Watson B, Channell B and Hill J agreeing
[127] [1859] EngR 90; (1859) Bell 97; 169 E.R. 1182 at 115-117; 1193
[128] [1983] 2 Qd R 557; Connolly, Macrossan and Carter JJ
[129] (1951) 82 CLR 606; Latham CJ, Dixon, McTiernan, Williams, Webb and Fullagar JJ
[130] (1951) 82 CLR 606 at 614-615
[132] (1977) 15 SASR 297 at 299-300
[133] [2007] EWCA Civ 197; Tuckey, Arden and Lawrence Collins LLJ
[136] United Service Insurance Co Ltd (In Liq) v Lang (1935) 35 SR (NSW) 487; Jordan CJ and Halse Rogers and Street JJ
[137] Deputy Commissioner of Taxation v Australian Securities and Investments Commission [2011] FCA 203; McKerracher J
[140] [1999] Ch 100 at 110
[141] Commissioner of Taxation v Nestle Australia Ltd [1986] FCA 368; (1986) 12 FCR 257 at 262 per Bowen CJ, Lockhart and Sheppard JJ
[142] Australian Institute of Marine and Power Engineers v Secretary, Department of Transport [1986] FCA 443; (1986) 13 FCR 124 at 136 per Gummow J
[143] [2008] AATA 155; (2008) 100 ALD 372; Deputy President Hack SC and the Hon Dr McPherson CBE, Deputy President
[145] [1952] HCA 32; (1952) 86 CLR 1 at 6; appeal dismissed [1952] HCA 32; (1952) 86 CLR 1; McTiernan, Williams and Kitto J
[148] [2008] AATA 155; (2008) 100 ALD 372 at [26]- [32]; 379-380
[149] [2008] AATA 155; (2008) 100 ALD 372 at [26]- [32]; 380
[152] [2009] VSC 550 at [109]; citations omitted
[153] Applicant's Final Submissions at [39]
[154] They are: "(a) documents on which a party intends to rely; (b) documents that materially affect the party's own case adversely; (c) documents that materially affect another party's case adversely; and
(d) documents that materially support another party's case.": Practice Note TAX 1 at [6.1] "... Documents that materially affect or materially support a party's case are documents that would enable a judge to reach a sound, complete and just decision in the case.": Practice Note TAX 1 at [6.2]
[155] "A person shall not, directly or indirectly, except in the performance of duties, or in the exercise of powers or functions, under this Act or for the purpose of enabling a person to perform functions under the Medicare Australia Act 1973 or the medical indemnity legislation, and while the person is, or after the person ceases to be, an officer, divulge or communicate to any person, any information with respect to the affairs of a third person acquired by the first-mentioned person in the performance of duties, or in the exercise of powers or functions under this Act."
[157] Respondent's Closing Submissions at [43]
[159] [2003] HCA 42; (2003) 215 CLR 150; 199 ALR 568; Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ
[160] [2003] HCA 42; (2003) 215 CLR 150; 199 ALR 568 at [18]; 158; 574
[163] Affidavit of Mr Bok, Exhibit 3 at [15]-[20]
[165] Document 542 being Annexure A to Form 312 could be part of the same document but Document 541 is unsigned, undated and incomplete even if Annexure A were to be read as part of it.
[166] Corporations Regulations, r 9.1.02(a)
[167] Definition of "chargeable matter"; CF Act, s 4(c) and (d)
[169] McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354; Woodward, Northrop and Jenkinson JJ at 356; 6 per Woodward J
[170] "ASIC may, if in the opinion of ASIC it is no longer necessary or desirable to retain them, destroy or dispose of:
(i) any return of allotment of shares for cash that has been lodged for not less than 2 years; or
(ii) any balance-sheet that has been lodged for not less than 7 years or any document creating or evidencing a charge, or the complete or partial satisfaction of a charge, where a memorandum of satisfaction of the charge has been registered for not less than 7 years; or
(iii) any other document (other than a constitution or any other document affecting it) that has been lodged or registered for not less than 15 years; or
(c) any document a transparency of which has been incorporated with a register kept by ASIC."
A transparency is defined in s 9 of the Corporations Act and relates to a photograph.
[171] A claim that s 22 applies is often framed in terms of documents' being exempt under s 22 or that an exemption under s 22 is claimed. This is not accurate. Section 22 is a tool and not a barrier. It is a tool that must be used if it is reasonably practical to use it in the sense understood in s 22(1)(c) and if the outcome will be a document that does not contain exempt matter or information irrelevant to the request. I gave my reasons for reaching this conclusion in Re Lobo and Department of Immigration [2011] AATA 705 at [418]- [420]
[172] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[173] Chambers 21st Century Dictionary, Revised Edition, 1999
[174] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[175] It is not relevant under s 22(1)(b) to consider the work involved in deciding whether other grounds of exemption may be claimed: Re Carver and Department of the Prime Minister and Cabinet (1987) 6 AAR 317; 12 ALD 447 at 329; 459 per Deputy President Hall, Senior Member Renouf and Mr Taylor, Member
[178] (1987) 6 AAR 317; ; 12 ALD 447 at 328; 459
[181] A further qualification is found in s 36(6)
[182] [1973] USSC 17; 410 U.S. 73 (1973) at 86
[183] 410 US at 87-88, 89 and cited at [1983] FCA 242; (1983) 50 ALR 551; 78 FLR 236; 5 ALD 545 at 560; 245; 553
[184] Cited at [1983] FCA 281; (1983) 50 ALR 567; 78 FLR 264; 5 ALD 560 at 569; 266; 562
[185] [1983] FCA 281; (1983) 50 ALR 567; 78 FLR 264; 5 ALD 560 at 569; 266; 562
[188] [1985] AATA 114; (1985) 8 ALN N37 at [67]- [68]; N47
[189] McKinnon v Secretary, Department of the Treasury (2006) 228 CLR 423; 229 ALR 187; 91 ALD 516 at 450; 208; 537 [80] per Callinan and Heydon JJ
[192] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
(1996) 137 ALR 281
(1952) 86 CLR 1
(1979) 24 ALR 300
(1969) 122 CLR 529
(1991) 100 FLR 6
(1977) 15 SASR 297
(1986) 7 NSWLR 104
(1951) 82 CLR 606
(1983) 50 ALR 551
(1983) 50 ALR 567
(1992) 173 CLR 473
(1992) 28 NSWLR 512
(2005) 143 FCR 461
(1984) 2 FCR 64
(1990) 92 ALR 651
(2003) 215 CLR 150
(2005) 145 FCR 70
(2006) 228 CLR 423
(1989) 168 CLR 210
(1984) 54 ALR 313
(1994) 179 CLR 388
(1947) 74 CLR 492
(1931) 46 CLR 22
(1975) 132 CLR 473
(1983) 51 ALR 581
(1986) 12 FCR 257
(1986) 13 FCR 124
(1984) 1 FCR 354