D.F. O'Connor J.(1) (President), Mrs J.H. McClintock(1) (Member) and Dr M.E.C. Thorpe(1) (Member)

Freedom of Information - application seeking access to documents relating to intrauterine contraceptive device known as the "Nova-T" - extent of participation in proceedings by the party joined - whether evidence and submissions of party joined limited to grounds of exemption in s 43 - meaning of "document" under the Freedom of Information Act - whether documents which disclose identity of external evaluators exempt under s 40(1)(d) - meaning of "public interest" - meaning of "trade secrets" in s 43(1)(a) - whether information relating to health and safety testing can be "trade secret" - whether documents exempt pursuant to s 43(1)(b) - whether "commercial value" can attach to the compilation of material otherwise publicly available - meaning of "unreasonable" in s43(1)(c)(i) - whether there can be prejudice to the future supply of information within the meaning of s 43(1)(c)(ii) in circumstances where companies are seeking approval in accordance with guidelines to market devices in Australia - tests to be applied in considering "breach of confidence" in s 45(1).

Freedom of Information Act 1982 ss 3,22,27,40(1)(d),43(1)(a), 43(1)(b),43(1)(c)(i),43(1)(c)(ii),45(1)

Administrative Appeals Tribunal Act 1975 ss 30(1A),39

Mitsubishi Motors Australia Ltd v Department of Transport (1986) 12 FCR 156

Re Control Investment Pty Ltd and Australian Broadcasting Tribunal (No.2) (1981) 3 ALD 88

Austin v Deputy Secretary, Attorney-General's Department (1986) 12 FCR 22

Re Marine World Victoria Ltd and Minister for Arts, Heritage and the Environment (1986) 10 ALD 262

Attorney-General's Department v Cockcroft (1986) 64 ALR 97

Re Carver and Department of the Prime Minister and Cabinet (1987) 6 AAR 317

Re James and Australian National University (1984) 2 AAR 327

Re Rae and Department of Prime Minister and Cabinet (1986) 12 ALD 589

Re Angel and Department of Arts, Heritage and Environment (1985) 9 ALD 113

Re Organon (Australia) Pty Ltd and Department of Community Services and Health (1987) 13 ALD 588

News Corporation Ltd v National Companies and Securities Commission (1984) 1 FCR 64

Re Actors' Equity Association of Australia and Australian Broadcasting Tribunal (No.2) (1985) 3 AAR 1

Re Cockcroft and Attorney-General's Department (1985) 12 ALD 462

Corrs Pavey Whiting and Byrne v Collector of Customs (1987) 13 ALR 254

Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1989] FCA 384; (1990) 22 FCR 73

Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1991] FCA 150; (1991) 99 ALR 679

Public Citizen Health Research Group v Food and Drug Administration [1983] USCADC 159; 704 F 2d 1280

Teich v Food and Drug Administration 751 F Supp 243

In matter N88/1223 the Tribunal sets aside the decision under review and in substitution therefor decides that access be granted to some documents and refused to others as set out in the schedule attached to the Tribunal's reasons for decision. In matter N89/537 the Tribunal decides that the document in issue is exempt pursuant to ss 43(1)(b) and 43(1)(c)(i) of the Freedom of Information Act 1982.

On 15 May 1986 the Public Interest Advocacy Centre (PIAC) made a request under the Freedom of Information Act 1982 (the FOI Act) to the then Department of Health (now the Department of Health and Community Services) in the following terms:

"The request is for documents in the possession of the Federal

Department of (H)ealth or other agencies, committees or

sub-departments under the jurisdiction of the Department of Health.

The documents sought are those relating to the intrauterine

contraceptive device NOVA-T. This device was manufactured on behalf

of SCHERING A-G BERLIN by LEIRAS PHARMACEUTICALS FINLAND. It

distributed in Australia by SCHERING PTY. LTD., Sydney.

Specifically, we are interested in obtaining a copy of documents

relating to:

(1) The approval given to allow this device to be imported into

(2) The documentary information supplied by the company upon

which such approval was based; and

(3) Any reports of adverse reactions from users of this device,

their medical practitioners or the company itself prior to and after

the device was allowed into Australia."

2. The bulk of the documents in issue in these proceedings were supplied by Schering Pty Ltd in support of a marketing application for a product called the Nova-T. The Nova-T is an intra-uterine device which functions primarily by the release of copper, copper having a contraceptive effect. In 1983 there was a sales contract entered into between a company, Outokumpu Oy (Outokumpu), and another, Huhtamaki Oy Leiras (Huhtamaki), whereby Outokumpu transferred to Huhtamaki the intellectual property in the Nova-T. Both Outokumpu and Huhtamaki are incorporated in Finland. the Nova-T is manufactured by Huhtamaki and distributed in Australia by Schering Pty Ltd pursuant to a licence agreement between Huhtamaki and Schering AG. Schering Pty Ltd is a wholly owned subsidiary of Schering AG, a company incorporated in Berlin and Bergkamen in Germany.

3. On 6 November 1986, pursuant to its obligations under s27 of the FOI Act, the Department wrote to the Managing Director of Schering Pty Ltd seeking comments on whether disclosure of certain documents would affect the business activities of Schering Pty Ltd in any of the ways set out in s 43 of the FOI Act. Following a response from solicitors on behalf of Schering Pty Ltd on 3 December 1986, a decision was made by an officer of the Department, Dr R.C. Hall, on 20 May 1987 allowing PIAC access to certain documents in full, refusing access to others and providing access to some with deletions. Schering Pty Ltd, through its solicitors was advised of the decision.

4. On 17 June 1987 Schering Pty Ltd sought review of the decision of Dr Hall to release certain documents. Schering Pty Ltd claimed that those documents came within the exemptions provided in s43 of the FOI Act. That application was, however, subsequently withdrawn by the applicant.

5. On 12 October 1987 PIAC, by its solicitors, applied for internal review of the decision of 20 May 1987. The application fee of $40 payable on its internal review request was forwarded by PIAC to the Department on 27 September 1988.

6. On 8 November 1988 Mr P.T. Pflaum reviewed Dr Hall's decision. He upheld Dr Hall's decision with the exception that he decided to release certain further documents being folios 26 and 29 of file 82/2324 and folio 28 of file BS 82/209.

7. On 6 December 1988 PIAC sought review by the Tribunal of the decision of Mr Pflaum that certain documents were either in whole or in part exempt documents under ss 40, 41, 43 and 45 of the FOI Act. That application is matter N88/1223 in these proceedings. On 9 February 1989 a direction was made by a Deputy President of this Tribunal that Schering Pty Ltd be made a party to the proceedings in matter N88/1223.

8. On 2 June 1989 Schering Pty Ltd also sought review of that part of Mr Pflaum's decision to release folio 28 of file BS 82/809 pursuant to PIAC's request under the FOI Act. That application is matter N89/537 in these proceedings and is the so called "reverse FOI" application. On 15 November 1989 a direction was made by the Tribunal that PIAC be joined as a party in these proceedings.

9. At the hearing before this Tribunal PIAC was represented by Dr P. Cashman, the Department of Community Services and Health was represented by Ms R. Henderson of Counsel and Schering Pty Ltd was represented by Dr G. Flick of Counsel. The Tribunal heard evidence from Mr B.T. Bradbury, Company Secretary, Schering Pty Ltd, Mr K.V.E. Jaaskelainen, Development Director of Huhtamaki Oy Leiras, Finland, Mr G.D. Riisfeldt, Manager, Medical Services, Schering Pty Ltd and Mr P.T. Pflaum, National Manager, Therapeutic Goods Administration Division, Department of Community Services and Health.

10. Somewhat surprisingly, during the hearing and after the first witness had begun to give evidence, Dr Cashman raised two "preliminary points" upon which he sought a determination by the Tribunal. The first point related to the definition of "document" under the FOI Act and the second to the extent of participation in the proceedings by the joined party in matter N88/1223, Schering Pty Ltd. No notice was given to any of the parties or the Tribunal that these points would be raised despite the fact that a number of directions had been made by the Tribunal relating to the filing and exchange of statements of facts and contentions and affidavits. By raising these matters at such a late stage this had the potential, particularly bearing in mind the amount of preparation undertaken by the party joined for the hearing, to create prejudice or unduly prolong the hearing.

11. PIAC, while not bearing any onus under the FOI Act to prove its case, did not call any witnesses to further assist the Tribunal. Dr Cashman tendered a number of articles taken from various journals in an attempt to establish that some information allegedly contained in the disputed documents was in fact in the public domain. On a number of occasions Dr Cashman denied that he wished the Tribunal to undertake a line by line comparison between these articles and material in the disputed documents.

12. The Tribunal is aware of the difficult position in which applicants in FOI matters find themselves in that evidence must be directed towards documents which are not in their possession. To that end a practice direction was issued by the then President of this Tribunal on 12 April 1985 requiring respondents in FOI matters to lodge with the Tribunal and serve on the applicant schedules which list and describe as far as possible the documents in issue. Such schedules were prepared in this case. Affidavits setting out the evidence to be relied upon in support of the claims for exemption were also lodged and served by the respondent and the party joined. During the hearing Dr Cashman sought to dispute whether the schedules, in particular that provided by the respondent department, complied with the practice direction. This was despite the fact that Dr Cashman had been aware of the content of the schedules since at least August 1989 and at no time between that date and the first day of hearing did PIAC seek further directions from the Tribunal.

Extent of participation in the proceedings by the party joined

13. During the course of the hearing Dr Cashman submitted that the evidence and submissions of the joined party in matter N88/1223, Schering Pty Ltd, should be confined to the grounds of exemption set out in s 43. In affidavit evidence and submissions to the Tribunal Schering Pty Ltd addressed issues relating to exemptions in other sections of the FOI Act, in particular that relating to confidentiality in s 45. Dr Cashman submitted that in so called reverse FOI proceedings Schering Pty Ltd would be confined to arguments relating to s 43 grounds and that it should be similarly limited where it is joined as a party in proceedings between the applicant and the respondent department. Dr Cashman could not provide the Tribunal with any authority on this point. The Tribunal did not grant Dr Cashman's application during the hearing that the participation of the joined party be limited. In final submissions Dr Cashman again raised this matter and sought a determination upon it.

14. It should be noted that the applicant did not make any such submission at the time Schering Pty Ltd applied to be joined as a party. On 9 February 1989 a direction was made by a Deputy President of this Tribunal that Schering Pty Ltd "be made a party to the proceedings". No objection to the basis of the joinder had been made by the applicant before the hearing in December 1990.

15. It is clear from the Full Court's decision in Mitsubishi Motors Australia Ltd v Department of Tansport (1986) 12 FCR 156 that in reverse FOI proceedings s 59(1) provides a right of review only in respect of a decision that a document is not exempt under s 43. Matter N 88/1223 is not a reverse FOI matter. Schering Pty Ltd was joined as a party to the proceedings pursuant to s 30(1A) of the Adminstrative Appeals Tribunal Act 1975. The rights of Schering Pty Ltd therefore are governed by those joinder provisions.

16. It is also clear that the Tribunal has powers to review certain decisions on the merits and must reach the correct or preferable decision on the material before it. The Tribunal is not constrained by the reasons given by the decision maker. In Re Control Investments Pty Ltd and Australian Broadcasting Tribunal (no.2)(1981) 3 ALD 88 at 95-96 Davies J said:

"(The) Tribunal does not proceed by way of pleadings and therefore will

not be limited to the facts, matters and contentions raised by the

parties in their notices. It may appear to the Tribunal that some other

matter should be taken into account."

17. In Austin v Deputy Secretary, Attorney-General's Department (1986) 12 FCR 22 the Full Federal Court dismissed an appeal from a decision of the Tribunal in an FOI matter. In relation to two documents the Court found that they were exempt upon a different basis to that found by the Tribunal. The Court stated (at 26):

"(T)his Court is empowered in this appeal, by s 44(4) of the

Administrative Appeals Tribunal Act 1975 (Cth), to 'make such order as

it thinks appropriate by reason of its decision'. The information

contained in the two documents numbered 19 plainly falls within s 41(1)

...Notwithstanding that no submission appears to have been put to the

Tribunal, in respect of these documents, under s 41, the Tribunal was

clothed by s 58(1) with the powers of the agency whose decision it was

reviewing, and was expressly empowered by that provision to decide any

matter in relation to the request that, under the Act, could have been

decided by the agency."

Given that the Tribunal must exercise afresh the decision making powers of the administrator, the Tribunal would be assisted by the submissions of all parties before it.

18. In Re Marine World Victoria Ltd and Minister for Arts, Heritage and the Environment (1986) 10 ALD 262 orders were made imposing conditions on the joinder of parties. No such conditions were imposed under the order directing the joinder of Schering Pty Ltd in this case. Section 39 of the Administrative Appeals Tribunal Act provides that, subject to certain other sections of the Act, every party to a proceeding before the Tribunal shall be given a reasonable opportunity to present his or her case, to inspect documents and make submissions in relation to those documents. The Tribunal is therefore of the view that Schering Pty Ltd, being a party joined in these proceedings without limitation, should be permitted to present its case based on any relevant exemptions under the FOI Act.

19. It should be noted that in Attorney-General's Department v Cockcroft (1986)64 ALR 97 at 108 Bowen C.J. and Beaumont J stated that it was "clearly open" to the party joined in that case to seek to uphold an exemption under s 45 of the FOI Act, even though no claim on that ground had been made by the Department.

20. During the course of the hearing Dr Cashman sought a determination from the Tribunal on the meaning of "document" in the FOI Act. Dr Cashman objected to the manner in which documents had been categorised by the Department in dealing with the request for access and in affidavits filed in these proceedings. In particular, Dr Cashman objected to the categorisation of the B1 data, B2 data, B3 data and the application for the extension of in situ life of the device as, respectively, documents 35, 36, 37 and 39. The schedule annexed to the affidavit of Mr Pflaum in matter N88/1223 and dated 19 May 1989 identified document 35 as the B1 data being an application for general marketing approval which comprises "sterilisation data, specifications and research data" contained in one volume of 58 folios. Document 36 is described as the B2 data being an accompaniment to the application comprising "animal and in vitro research" of 679 folios contained in three volumes. Document 37 is described as the B3 data being an accompaniment to the application comprising "studies on efficacy and safety of the device in use by women" of 411 folios in two volumes. Document 39 is described as "application for extension of in situ life" of 292 folios in two volumes.

21. During the hearing Counsel for the party joined provided to the Tribunal further schedules in relation to documents 36, 37 and 39, beings exhibits 5, 6 and 7 in these proceedings. Those schedules sought to break down the folios in those documents into three categories, namely:

a) internal documents prepared by either Schering AG or Huhtamaki Oy

Leiras;

b) documents prepared for submission to drug regulatory authorities;

and

c) published documents.

Dr Cashman submitted that, in particular, documents 36, 37 and 39 could not be classified as single documents for the purposes of the FOI Act. He stated that it was "as plain as a pikestaff" that a document, for the purposes of the FOI Act, cannot be a collection of large numbers of documents having different authors, different dates and some of which are external and some of which are internal.

22. When pressed by the Tribunal Dr Cashman could not give a definition of what is a document but did say (transcript 333):

"...what is clearly not a document, are volumes of information

containing heterogeneous material written by different people, over

different periods of time, some of which is published and some of which

isn't."

Dr Cashman submitted that there were practical consequences as a result of the distinction between the documents in issue being described as single documents or as collections of separate documents. He stated that s 22 of the FOI Act provides for the release of material within a document which would otherwise contain material which was exempt. He further stated that the fact that a document contains exempt matter does not mean that the document is exempt. He said that the application of s 22 would be made more difficult as, in deciding to release a document with deletions, the whole document must be examined to determine which portion of it may be released.

23. The Tribunal considers that Dr Cashman has misconstrued the function of the FOI Act and, in particular, the function of s 22 of that Act. It is clear from ss 11 and 22 of the Act that the Act applies in general to documents and not matter contained in documents. It is the whole document which is exempt if it contains exempt matter (see the definition of "exempt matter" in s 4(1) and Re Carver and Department of the Prime Minister and Cabinet (1987) 6 AAR 317 at 322). Section 22 is merely an ameliorating provision which enables the release of an otherwise exempt document in certain circumstances.

24. The Tribunal must take a commonsense approach to what is and what is not a document for the purposes of the FOI Act. There are some circumstances where a collection of material may be viewed as one document while in others that collection may rightly be broken down into a number of documents. Having viewed the material in issue in this case the Tribunal is not persuaded that the material should not be classified as single documents, even though those documents contain a large number of folios which may be further categorised in the manner proposed by Counsel for the party joined. Nor is the Tribunal persuaded that in this case its task under s 22 of the Act is made more difficult by such a classification.

25. The documents in dispute between the parties were tendered by Ms Henderson for the respondent. An order pursuant to s 35 of the Administrative Appeals Tribunal Act was made on 4 December 1990 restricting disclosure of the documents. For ease of reference the Tribunal has adopted the numbering system appearing in the schedule annexed to Mr P.T. Pflaum's affidavit of 19 May 1989 in matter N88/1223.

Section 40(1)(d)

26. The respondent Department claims that documents 16,17,18,19 and 21 in matter N88/1223 are either exempt by virtue of s 40(1)(d) of the FOI Act or may be released with certain deletions. Section 40 provides:

"40.(1) Subject to sub-section (2), a document is an exempt document

if its disclosure under this Act would, or could reasonably be

expected to -

...

(d) have a substantial adverse effect on the proper and efficient

conduct of the operations of an agency...

(2) This section does not apply to a document in respect of matter

in the document the disclosure of which under this Act would, on

balance, be in the public interest."

The Department claims that the documents are exempt by reason of the fact that they disclose the identity of an external evaluator. Mr Pflaum told the Tribunal that from time to time the Department commissions external evaluators to assist with the evaluation of products.

27. As was stated in Re James and the Australian National University (1984) 2 AAR 327 at 340 the expression "the conduct of the operations of an agency" extends "to the way in which an agency discharges or performs any of its functions". The Tribunal is satisfied that referral of material to external evaluators extends to the Department's discharge of its functions in approving applications for the marketing of therapeutic substances. In Re James (supra at 341) the Tribunal considered that the effect of disclosure on the proper and efficient conduct of the operations of an agency must be "serious" or "significant" and not mere "prejudice". Mr Pflaum, in his affidavit of 19 May 1989, informed the Tribunal that evaluators would be less likely to undertake work for the Commonwealth if they could be personally identified with particular products. He stated that in the past there have been "attacks and criticisms directed at persons involved in evaluations by persons unhappy with decisions." The Tribunal is of the view that disclosure of the documents would have a substantial adverse effect on the proper and efficient conduct of the Department of Health and Community Services.

28. It still remains to be determined whether, on balance, disclosure of the documents would be in the "public interest". In Re Rae and the Department of the Prime Minister and Cabinet (1986) 12 ALD 589 in relation to s 33A which contains a similar public interest requirement, the Tribunal commented at 600 that once the respondent department satisfies the Tribunal that the document is exempt then an onus is placed upon the applicant to make out a positive case with respect to public interest. Dr Cashman sought to elicit statements from witnesses before the Tribunal and himself submitted that various persons would have an "interest" in the information claimed to be exempt. Such persons included women in whom the devices were inserted, medical practitioners, researchers, scientists and "other people in the community who are interested in the evaluation or the testing of the effect of intrauterine devices". In Re Angel and Department of Arts, Heritage and Environment (1985) 9 ALD 113 at 124 the Tribunal commented:

"In relation to the public interest... it needs to be said that

merely because there is a section of the public that is interested

in a certain activity it does not follow that disclosure of

documents related to that activity is in the public interest. There

are two reasons for this. First, there is a distinction between that

in which the public, or a part of the public, is interested, and

that which is 'in the public interest'. Second, it does not

necessarily follow that because there is a public interest in an

activity there is a public interest in disclosure of every document

relating to that activity."

29. It must be shown objectively that there is a public interest in the subject matter to which the documents relate. Having taken into account the above considerations, the Tribunal is not satisfied that, on balance, it would be in the public interest to release the identity of evaluators commissioned by the Department. The Tribunal considers that the documents should be released with deletions so as not to reveal the identity of the evaluators.

30. A large number of documents it was submitted by the respondent Department and the party joined, Schering Pty Ltd, are exempt under s43 of the Act. That section provides:

"43. (1) A document is an exempt document if its disclosure under

this Act would disclose -

(a) trade secrets;

(b) any other information having a commercial value that

would be, or could reasonably be expected to be,

destroyed or diminished if the information were disclosed;

or

(c) information (other than trade secrets or information to

which paragraph (b) applies) concerning a person in

respect of his business or professional affairs or

concerning the business, commercial or financial affairs of

an organisation or undertaking, being information -

(i) the disclosure of which would, or could reasonably

be expected to, unreasonably affect that person

adversely in respect of his lawful business or

professional affairs or that organisation or

undertaking in respect of its lawful business,

commercial or financial affairs; or

(ii) the disclosure of which under this Act could

reasonably be expected to prejudice the future

supply of information to the Commonwealth or an

agency for the purpose of the administration of a

law of the Commonwealth or of a Territory or the

administration of matters administered by an agency."

Sub-section 43(2) renders sub-section (1) of no effect where the applicant is the person or organisation whose trade secrets etc. are disclosed in the document. It has no application in this case.

31. Both Mr Jaaskelainen and Mr Pflaum gave evidence to the Tribunal that the documents contain information relating to manufacturing processes, product specifications, testing methods and procedures, clinical efficacy and safety of the device and sterilisation processes. Mr Jaaskelainen told the Tribunal that although some of the physical qualities of the Nova T and the silver cored copper wire, particularly its measurements and chemical composition, may be ascertainable by competitors through "reverse engineering", the precise specifications and the acceptable variations could not be ascertained through this process. He said that this information was the result of extensive testing and of great commercial value. Mr Jaaskelainen told the Tribunal that considerable costs had been incurred by the company in research and development and clinical testing carried out on the product. Mr Jaaskelainen emphasised to the Tribunal that it is not only the results of testing which the company seeks to protect from competitors but the methodology by which those tests are carried out. Evidence was given by Mr Bradbury and Mr Riisfeldt that Schering Pty Ltd goes to considerable lenghts to protect the security of its premises and of its products and information relating thereto.

32. It was submitted both by Ms Henderson for the Department and Dr Flick for Schering Pty Ltd that many of the documents in issue contain trade secrets, being information relating to manufacturing processes, product specifications, testing methods and procedures, clinical efficacy and safety of the device and sterilisation processes. Both also submitted that we should adopt the factors outlined in Re Organon (Australia) Pty Ltd and Department of Community Services and Health (1987) 13 ALD 588 at 593-94 to which regard should be had in determining the existence of trade secrets for the purpose of the FOI Act. Those factors, as set out in Re Organon (supra), are:

"(a) whether the information is of a technical character;

(b) the extent to which the information is known outside the

business of the owner of that information;

(c) the extent to which the information is known by persons engaged

in the owner's business;

(d) measures taken by the owner to guard the secrecy of the

information;

(e) the value of the information to the owner and to his

competitors;

(f) the effort and money spent by the owner in developing the

information;

(g) the ease or difficulty with which others might acquire or

duplicate the secret."

33. Dr Cashman submitted that in considering what is a trade secret factor (f) above is not relevant. As noted above, Mr Jaaskelainen gave evidence of the amounts of money expended by his company in developing the product. Dr Cashman submitted that such evidence of the historical cost of conducting research is of little relevance to the present value of the information contained in the documents.

34. Dr Cashman further submitted that in FOI proceedings a restrictive interpretation of trade secrets is required. The Tribunal rejects the submission that it is required to give a restrictive interpretation to exemptions in the FOI Act. This very point was considered by the Full Federal Court in News Corporation Ltd v National Companies and Securities Commission (1984) 1 FCR 64. The Court expressly rejected the proposition that when considering rights of access the Court should lean towards a wide interpretation of the provisions of the Act but when considering exemptions should lean towards a narrow interpretation. After commenting on the United States position, Bowen C.J. and Fisher J stated (at 66):

"In construing our Act we do not favour the adoption of a leaning

position. The rights of access and the exemptions are designed to

give a correct balance of the competing public interests involved.

Each is to be interpreted according to the words used, bearing in

mind the stated object of the Act."

35. The Tribunal is of the view therefore that the words "trade secrets" should be given their ordinary meaning under Australian law. Dr Cashman urged the Tribunal to adopt the United States definition of trade secret. He submitted that trade secrets should be defined by reference to the production or manufacturing process. He submitted that in the light of several United States cases, health and safety data and results from clinical trials cannot be characterised as trade secrets. Dr Cashman conceded that information concerning the physical and chemical composition of the product may be characterised as trade secrets but sought to differentiated information relating to the effect the product may have on animals or people when they are exposed to it.

36. Dr Cashman referred the Tribunal to a number of United States cases, in particular Public Citizen Health Research Group v Food and Drug Administration [1983] USCADC 159; 704 F 2d 1280 and Teich v Food and Drug Administration 751 F Supp 243, to support his contention that health and safety data does not come within the definition of trade secret. The Tribunal notes that these decisions are concerned specifically with the interpretation of "trade secrets" in the United States FOI legislation. It is true that the United States courts have taken a restrictive approach to the interpretation of that phrase. In so doing, however, the D.C. Circuit specifically noted in Public Citizen (supra at 1286-87) that there is a wider approach to that phrase in other contexts. We agree with the submissions of Ms Henderson and Dr Flick that that wider approach is the approach taken in Australia to the question of trade secrets. In general, we agree that the approach taken in Re Organon (supra) is a useful guide to the interpretation of "trade secrets".

37. The Tribunal accepts Dr Cashman's distinction relating to health and safety data. Such information does not satisfy the tests laid down in Re Organon (supra) as it is not information "of a technical character". This information requires no technical expertise to be understood and in fact can be understood by an educated lay person. This information may, however, come within the exemption contained in s43(1)(b) and this is discussed below.

38. Dr Cashman submitted that some of the information sought to be exempted as trade secrets was not in fact "secret" as it had been published in numerous journals. Mr Jaaskelainen told the Tribunal that much of the information in the documents was "core information" and had not been published. Dr Cashman, however, did not bring any evidence to support his contention that the information was in the public domain.

39. The meaning of the words "could reasonably be expected" were considered in Attorney-General's Department v Cockcroft (1986) 64 ALR 97 at 106. The majority stated that the words were intended to receive their ordinary meaning. A decision maker is required to make a judgment as to whether there is a "reasonable" basis for a claim that disclosure of information would destroy or diminish the commercial value of such information, as distinct from something that is "irrational, absurd or ridiculous".

40. Dr Cashman disputed that much information contained in the documents has a "commercial value". He submitted that much of the information was already publicly available in the form of patents or in published journals. Again, Dr Cashman sought to make a distinction between information relating to chemical and physical properties and that relating to health and safety, although he did concede that there were circumstances in which health and safety data may have a commercial value. Ms Henderson and Dr Flick submitted that the information claimed to come within the definition of trade secret was also information having a commercial value.

41. In relation to documents 35,36,37,38 and 39 which represent the B1,B2, and B3 data, the Section C data and the application for the extension of in situ life, the Department and Schering Pty Ltd claimed that the whole of the documents were exempt even though parts of the documents were comprised of published articles. Dr Flick submitted that commercial value attached to the compilation of material otherwise publicly available. He submitted that the process of selection, involving commercial expenditure and the application of expertise, is the "value" which attaches to such information. The analogy was advanced during the hearing of a "recipe" for a successful marketing application. Mr Jaaskelainen and Dr Riisfeldt told the Tribunal that it is the selection and arrangement of material which has commercial value. Dr Riisfeldt attributed the high success rate in applications by Schering Pty Ltd to its skills in this area.

42. The Tribunal does not accept this argument. The FOI Act seeks to prevent disclosure of documents in certain circumstances where disclosure would reveal information which should rightly be protected. Section 22 of the Act, as stated above, is an ameliorating provision which permits disclosure of documents which would otherwise be exempt in certain circumstances. The Tribunal is of the view that the "compilation" argument advanced by the Department and Schering Pty Ltd seeks to circumvent the application of that section and is contrary to the intention of the Act. As stated in s 3(1), the object of the Act is to "extend as far as possible the right of the Australian community to access to information in the possession of the Government of the Commonwealth". In addition s 3(2) provides:

"(2) It is the intention of the Parliament that the provisions of

this Act shall be interpreted so as to further the object set out in

sub-section (1) and that any discretions conferred by this Act shall

be exercised as far as possible so as to facilitate and promote,

promptly and at the lowest reasonable cost, the disclosure of

43. The Tribunal is of the view that to interpret s 43(1)(b) as applying to the compilation of material otherwise publicly available would not be in accord with the object of the Act nor the intention of Parliament. In this context the Tribunal notes the reply of Dr Riisfeldt, in answer to a question from Dr Cashman, to the effect that if PIAC was to request published articles from Schering Pty Ltd they would be provided.

44. The Tribunal is of the view, however, that information contained in some of the documents described in the schedule to Mr Pflaum's affidavit does have commercial value. The question then remains of whether that commercial value "would be, or could reasonably be expected to be, destroyed or diminished if the information were disclosed". The Tribunal considers that if information of an identical kind to that in the documents has already been disclosed to the public, then its commercial value would not be further diminished by disclosure under the FOI Act.

45. Dr Cashman submitted that in relation to health and safety data which has not previously been disclosed to the public that data would not lose its commercial value through disclosure under the FOI Act. He submitted that that material could not be used by a competitor because test results were product specific. Mr Jaaskelainen gave evidence that such material was of commercial value to the company, particularly in so far as it disclosed the methodology used in testing. Dr Riisfeldt, on the other hand, told the Tribunal that a large proportion of the details of methodology is evident from papers already published concerning the Nova-T.

46. The Tribunal has come to the conclusion that some health and safety data if not already in the public domain may be commercially valuable to a company, namely Schering Pty Ltd, which is very active in the pharmaceutical market. The value of that information to the company could "reasonably be expected to be" diminished by its disclosure. For these reasons the Tribunal decides that a number of documents as outlined in the schedule are exempt from disclosure pursuant to s 43(1) (b) of the FOI Act.

An adverse effect on lawful business - s 43(1)(c)(i)

47. This sub-section makes use of the words "reasonable" and "unreasonable". The Tribunal considers that the words "could reasonably be expected" should be given the same meaning as those appearing in s 43 (1)(b) as defined in Cockcroft (supra). In Re Actors' Equity Association of Australia and Australian Broadcasting Tribunal (N0.2) (1985) 3 AAR 1 the Tribunal considered the meaning of the word "unreasonable" in s 43 (1)(c)(i). There the Tribunal came to the view that a concept of public interest was imported into the sub-section. We do not agree with that view.

48. The word "unreasonably" should be given its usual meaning and there is no need to balance competing interests. We agree with Dr Flick's submission that in other sections of the FOI Act, such as s 44, the concept of public interest is provided for specifically and if that had been the intention in s 43 it would have been easy to so provide. It is not sufficient for a party to establish that disclosure of information may have an adverse effect upon its business. A decision maker must make a factual judgment that there would be an "unreasonable" effect. That is, the decision maker must be satisfied that the effect is of substance rather than incidental or trivial.

49. In final submissions Dr Cashman sought to raise an issue without notice and upon which there was no evidence before the Tribunal. Dr Cashman submitted that s 43(1)(c)(i) applies only to the "lawful" business, commercial or financial affairs of Schering Pty Ltd. He further submitted that Schering Pty Ltd had failed to disclose health and safety information when distributing the Nova-T and that this amounted to misleading or deceptive conduct, or conduct which was likely to mislead or deceive, within the meaning of s 52 of the Trade Practices Act 1974. For that reason, he submitted, information relating to health and safety does not come within the "lawful" business of Schering Pty Ltd. Dr Cashman could not explain to the Tribunal how we, in the context of the FOI Act, could make a determination under the Trade Practices Act. This Tribunal does not consider that it has any jurisdiction to make any such finding.

50. Dr Cashman submitted that health and safety information contained in the documents does not amount to information concerning the business, commercial or financial affairs of an organisation or undertaking within the meaing of s 43(1)(c). The Tribunal considers that such information can come within that sub-section. Information gathered to prove the efficacy or otherwise of a product manufactured by a company would, in our view, be information concerning the business, commercial or financial affairs of that company.

51. Dr Cashman also submitted that, as the Nova-T was no longer distributed in Australia, there could not be any adverse effect upon the business of Schering Pty Ltd. We consider that the comments made by the Tribunal in Re Organon (supra at 594) concerning the exemption in s 43 (1)(a) relating to trade secrets apply equally to the other paragraphs in that sub-section. There the Tribunal stated that trade secrets should not be restricted to those that are the property of the applicant in a "reverse FOI" situation. The Tribunal further stated:

"Whether or not the applicant in the present proceedings could be

viewed as an agent of the owner of the secret is, in our opinion,

not to the point. The section is intended to preserve the secret

itself. Consequently all those parties who derive benefit from the

continued status of secrecy are entitled to maintain that benefit,

once the existence of a trade secret has been established.

52. In that case Organon (Australia) Pty Ltd was in the same position as Schering Pty Ltd in that it was a wholly owned subsidiary of an overseas company. Organon marketed and distributed the device in Australia. The device itself was manufactured by another overseas company.

53. Mr Jaaskelainen gave evidence of the market elsewhere in the world for the Nova-T. He told the Tribunal that the business interests of Huhtamaki Oy would be adversely affected by disclosure of the documents. He said that if a competitor of Huhtamaki Oy had access to the documents relating to the Nova-T it would be in a position to use the information in the documents to establish itself both as a manufacturer and distributor of the device similar to the Nova-T relatively quickly. He said that such a competitor would not have to incur the development costs which had been borne by Huhtamaki Oy and would be able to sell the device at a price well below the current price of the Nova-T. He stated that this would result in loss of sales to the company of considerable magnitude. Mr Jaaskelainen also told the Tribunal that Huhtamaki Oy is is involved in technology transfer agreements, one of the subjects of which is the Nova-T. He said that if technical information about the Nova-T contained in the documents were to be freely available, the company would be forced to accept a substantially reduced technology transfer fee.

54. Dr Riisfeldt told the Tribunal that the parent company of Schering Pty Ltd, Schering A.G., acquires products other than the Nova-T from Huhtamaki Oy. He said that the release of information by a subsidiary of Schering AG would prejudice the availability to products supplied to Schering AG by Huhtamaki Oy which in turn would affect Schering Pty Ltd. Dr Riisfeldt said that without the continuing availability of imported products Schering Pty Ltd would go out of business.

55. This evidence was uncontested and has been taken into account in deciding not to release certain documents as they are exempt pursuant to the provisions of s 43(1)(c)(i) of the FOI Act.

56. The words "could reasonably be expected to prejudice the future supply of information" were said by Bowen C.J. and Beaumont J in Cockcroft v Attorney-General's Department (supra at 106) to:

"require a judgment to be made by the decision-maker as to whether

it is reasonable, as distinct from something that is irrational,

absurd or ridiculous, to expect that those who would otherwise

supply information of the prescribed kind to the Commonwealth or any

agency would decline to do so if the document in question were

disclosed under the Act."

In Re Organon (supra) the Tribunal adopted comments in Re Cockcroft and Attorney-General's Department (1985) 12 ALD 462 that it was not necessary to draw a distinction between information volunteered to the government and information compelled. This point was not considered by the Federal Court on appeal. We are of the view that in considering whether it is "reasonable" to expect that the future supply of information will be prejudiced, a factor to be taken into account is the context in which such information is supplied, including whether it may be compulsorily required.

57. The importation into Australia of therapeutic goods is highly regulated. The evaluation of such goods for marketing approval is the responsibility of the Department of Community Services and Health. In about 1974 the Department issued "NDF4 Guidelines for Preparing Applications for the General Marketing or Clinical Investigational Use of a Therapeutic Substance". The guidlines (usually referred to simply as NDF4) have been amended from time to time. The application submitted by Schering Pty Ltd and which forms the bulk of documents in these proceedings was submitted in accordance with NDF4. NDF4 sets out the type of information to be submitted with applications and the form in which the information should be presented. It is a very lengthy document and very detailed. The Tribunal was informed that the Department requires each application to be in the form set out in the guidelines.

58. Dr Flick submitted that in carrying out its functions the Department relies on the voluntary supply of information from pharmaceutical companies. Mr Pflaum told the Tribunal that the Department has sought additional information from companies beyond that supplied in accordance with NDF4. In answering a question from Dr Flick as to whether when seeking additional information the Department exercised any compulsory power or merely requested the information, Mr Pflaum replied:

"Well, it has requested the information on the basis that the

application would not be further considered without that information."

Dr Riisfeldt told the Tribunal that if any information provided to the Department by Schering Pty Ltd, including material already published, was disclosed the future supply of information would be prejudiced. Mr Pflaum told the Tribunal that should such material be released there would be a reduction in volume and scope of the information supplied by applicant companies. He said that any reduction would lead to a lengthening of the approval process as the Commonwealth would need to specifically identify and request certain information.

59. The Tribunal has difficulty in accepting the submissions of Dr Flick which were supported by Ms Henderson. This is not a situation where information is supplied to the Commonwealth in a purely voluntary fashion, for example by informants in the law enforcement area. Here companies themselves are seeking approval from the Commonwealth to market a particular product in Australia. As Dr Riisfeldt acknowledged in answer to a question by Dr Cashman, the company would go out of business if it was not prepared to submit information to the Department of Health. The information which is required to be submitted is set out in detail in NDF4. Thus we do not consider that prejudice to the future supply of information arises in these circumstances.

60. Both Ms Henderson and Dr Flick submitted that many of the documents were exempt from disclosure by virtue of section 45(1) of the FOI Act. 6 That section provides:

"45. (1) A document is an exempt document if its disclosure under

this Act would constitute a breach of confidence."

61. The ambit of s 45(1) has been considered by the Federal Court in Corrs Pavey Whiting and Byrne v Collector of Customs [1987] FCA 266; (1987) 13 ALD 254. In that case Jenkinson J, with whom Sweeney J agreed, stated (at 258):

"...the language of s 45(1) is not inapt to confer exempt status on

a document which contains confidential information received under

circumstances importing an obligation of confidence, without regard

to those considerations of public policy to which courts have

allowed an influence in determining whether to grant or withhold

remedies for 'breach of confidence' in exercise of equitable or

common law jurisdiction."

The tests to be applied by the Tribunal are thus two-fold:

(a) was the information communicated in confidence; and

(b) is the information confidential.

62. All parties before the Tribunal sought to derive assistance from the judgment of Gummow J in Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1989] FCA 384; (1990) 22 FCR 73. The decision of Gummow J has since been upheld on appeal (Smith Kline and French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1991] FCA 150; (1991) 99 ALR 679). The Tribunal is of the view that limited assistance can be derived from Smith Kline and French as the case dealt with the extent of the equitable obligation of confidence. It is clear from the judgment in Corrs Pavey Whiting and Byrne that the tests to be applied under s 45(1) of the FOI Act are not those involved in forming a judgment as to whether the disclosure of a particular document would be actionable under the general law. The judgment of Gummow J in Smith Kline and French, however, may be of assistance in determining whether the test in (a) above has been satisfied.

63. The issue before Gummow J, and subsequently before the Full Court, was the extent of the use to be made by officers of the Department of Health and community Services of the B1 data submitted as part of an application for marketing approval of a certain drug in Australia. Gummow J's finding that the B1 data was confidential was not disturbed on appeal. In these proceedings a claim of confidentiality has been made in respect of not only the B1 data but of the bulk of the documents submitted by Schering Pty Ltd to the Department. Mr Pflaum told the Tribunal that there is an "implicit understanding" that product ingredients and specifications, test methods, the results of studies and other commercially sensitive or secret information required to be submitted to the Department in support of marketing applications "constitute confidential material". Dr Riisfeldt also told the Tribunal that Schering Pty Ltd "has regarded all information provided to the Department contained in and in support of NDF4 applications for pharmaceutical products to be confidential". The Tribunal notes that neither Mr Pflaum nor Dr Riisfeldt were able to give direct evidence in relation to the documents in issue in these proceedings as neither was involved in the process at the time. They were, however, able to give evidence as to what may be regarded as departmental and company "practice" in this area.

64. In Smith Kline and French (supra at 91) Gummow J received similar evidence and found that there had been an understanding, implicit rather than explicit, between pharmaceutical companies "that NDF4 information would be kept confidential in the sense that it would not be disclosed to any other pharmaceutical company lest use be made of it to the commercial disadvantage of the company which had supplied the information". We make a similar finding on the evidence before us in these proceedings. We also find that the "understanding" extended to disclosure to third parties in general, other than for example external evaluators employed by the Department or the Australian Drug Evaluation Committee.

65. The Tribunal is not, however, satisfied that all documents meet the requirement in (b) above. That requirement is that the information must have the necessary quality of confidentiality and is not, for example, common or public knowledge. A large number of documents in issue in these proceedings are published articles and summaries of already published material. That material is already in the public domain and can not be described as "confidential".

In relation to the documents in issue in application N88/1223 the Tribunal, in accordance with the above reasons, sets aside the decision under review and in substitution therefor decides that access be granted to some documents and refused to others as set out in the attached schedule.

66. In this matter the conduct of the Department of Community Services and Health regarding its obligations under the FOI Act has been raised incidentally. Mr Pflaum told the Tribunal that in relation to the documents known as the B1, B2 and B3 data, which form the bulk of the documents in this case, he did not examine their contents. In fact, he said that he "skim read" the documents "to get a feel for (their) contents". He said that he knew there was published material among the documents but did not give separate consideration to that material. Mr Pflaum did not address his mind as to whether each document was exempt but rather, in his words, "addressed the matter as a whole" and considered, as the documents formed part of an application to the Department, they were confidential and therefore exempt. In our view, this approach is unsatisfactory.

67. Mr Pflaum also told the Tribunal that the Department did not make applicants aware of the implications of the FOI Act. While it is not incumbent upon Departments to do so, we are of the view that the Department's guidelines for the submission of applications should be developed with FOI in mind. We are also of the view that the Department should be more critical in its examination of material for the purposes of determining whether or not that material is exempt under the FOI Act. It is not sufficient to simply say that, because material is submitted as part of an application to the Department, it is confidential and therefore exempt. The material itself must be examined. In addition, the Tribunal does not feel confident that the Department made sufficient use of appropriate expertise available to it to assist in the task of examining the documents for the purposes of this FOI application.

68. As noted above, matter N89/537 concerns a document which the Department had decided was not exempt under the provisions of the FOI Act and could be released to PIAC. Prior to that decision being made Schering was consulted pursuant to the s 27 of the Act and objected to its release. Following the decision to release the document Schering sought review by this Tribunal.

69. In an affidavit dated 20 October 1989 Mr Pflaum stated that he did not consider the document to be exempt pursuant to s 43 of the FOI Act. He stated:

"(i) The relevant material in the document was not information which

Schering itself would be expected to treat as secret on the basis

of the relativity between its current value to Schering and its

possible value to others in the same business having regard to

the current costs of acquiring or duplicating such information.

(ii) The relevant material was not information about the product or

otherwise which could reasonably be expected to be utilised by

any competitor so as to diminish its commercial value to Schering.

(iii) The relevant material was not information capable of revealing

confidential details of either Schering's products, or its

production and marketing procedures, which could reasonably be

expected to be of value to a competitor to the detriment of Schering.

(iv) The relevant material was not preliminary or inmcomplete (sic)

research or other data reasonably capable of being misconstrued

or used unreasonably to the disadvantage of Schering in any

aspect of its business.

(v) The relevant material was not information the disclosure of

which could reasonably be expected to inhibit the future supply of

information which is supplied for the purposes of the

administration of the therapeutic goods legislation."

70. During the hearing, however, Mr Pflaum resiled from this position. Mr Jaaskelainen had stated to the Tribunal that the document contains information which is confidential and of great commercial value to the company. He said that the document contains details of sterility standards and specifications which are not publicly available. He further stated that a competitor would be able to obtain an advantage if such information were to be released as it could avoid the investment in time and money required to develop such a specification. In answer to questions from Dr Flick, Mr Pflaum deferred to the opinions of Mr Jaaskelainen concerning the commercially valuable nature of the information. Accordingly, the Department does not now press its former stance in relation to this document.

71. The Tribunal decides that the document is exempt pursuant to ss 43(1) (b) and 43(1)(c)(i) of the FOI Act.