"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 devices manufactured and first marketed in the

United States from 1974 by G.D. Searle and Co. This device

was distributed in this country under the brand name Copper-7

by Searle Australia 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 Australia;

(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, medical

practitioners or from the

manufacturing company itself."

This request was treated as encompassing a reference to the Copper-7 device ("Gravigard") and also a reference to a smaller contraception device of the same nature ("Mini-Gravigard").

4. As the result of a decision taken by Dr R.C. Hall on 20 May 1987, as reconsidered by a decision of Mr P.T. Pflaum on 14 November 1988, access was granted to certain documents and to parts of certain other documents. Access was refused to some documents.

5. There were many documents in issue. Some had been provided to the Department by Searle when Searle sought approval under the Therapeutic Goods Act 1966 (Cth) for the importation into Australia and marketing in Australia of the Gravigard and Mini-Gravigard. Other documents had been received from Searle when it voluntarily complied with a reporting system designed to keep the Department aware of problems reported or noticed with respect to medical devices and goods distributed in Australia. Other documents were reports prepared by officers of the Department with respect to Gravigard and Mini-Gravigard, some of them dealing also with similar devices manufactured by other manufacturers.

6. Not all the decisions of the Tribunal were challenged in the appeal and the cross-appeal. Consequently, some documents are no longer in contention. The appeal and cross-appeal raise questions of law only: see s.44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act").

7. It was submitted by Mr Bayne that the Tribunal was limited to considering the grounds of exemption relied upon by the primary decision-maker and could not consider any grounds of exemption put forward by Searle in the proceedings before the Tribunal.

8. However, to take that view would be to introduce an element in FOI applications which does not apply to other proceedings. In general, the function of the Tribunal is to hear matters de novo and to reach a view for itself, untrammelled by the view taken by the primary decision-maker: see Drake v. Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589, 599.

9. The provisions of the FOI Act do not support Mr Bayne's submission. Mr Bayne relied upon s.59(1) of the FOI Act. That section permits a person whose business, professional or financial affairs are referred to in a document and who has submitted that it is an exempt document to apply to the Tribunal for review of a decision by the relevant agency or Minister that it is not exempt. Where that course is taken, the applicant for review is limited to the question whether the document is exempt under s.43. The applicant is not free to argue other grounds of exemption: see Mitsubishi Motors Australia Ltd v. Department of Transport (1986) 12 FCR 156. But the present case was not one where a person opposing disclosure applied to the Tribunal. Searle made no application for review. PIAC was the applicant for review, under s.55 of the FOI Act. Searle, being a person interested, was joined as a party to the proceedings in accordance with s.30 of the AAT Act. In this circumstance, Searle was entitled to put forward any relevant ground of exemption. Section 58(1) of the FOI Act applied and empowered the Tribunal "to decide any matter in relation to the request that, under this Act, could have been or could be decided by an agency or Minister". See e.g. Attorney-General's Department v. Cockcroft (1986) 10 FCR 180 at 192. More-over, s.58(2) expressly enjoined the Tribunal from granting access to a document which was established in the proceedings to be an exempt document.

10. The Tribunal in its reasons for decision did not discuss individually each of the documents before it but stated in general terms its conclusions with respect to the interpretation and application of the relevant sections of the FOI Act. A ground of the cross-appeal is that the Tribunal failed to state adequate reasons for its decisions as required by s.43(2) of the AAT Act. The notice of contention alleges that the Tribunal applied the wrong sections to some documents. It was accepted by counsel for all parties that the decisions of the Tribunal sometimes appeared inconsistent. Counsel were in agreement that it was difficult to determine the grounds upon which access or refusal of access to some documents had been decided. Moreover, the reasons of the Tribunal did not discuss all the issues which were before it.

11. It is unnecessary to deal with those matters as a separate ground of appeal. As, for the reasons later stated, there were errors in the Tribunal's approach to the legal issues, these considerations can be taken into account in the formulation of the orders made.

12. Mr Bayne submitted that s.3 of the FOI Act required the Court to adopt a "leaning approach" to the interpretation and application of the exemption provisions of the FOI Act; that is, that the Court should "lean" in favour of disclosure of documents. Mr Bayne acknowledged that such an approach was rejected in News Corporation Ltd v. National Companies and Securities Commission (1984) 1 FCR 64. In that case, at 66, Bowen C.J. and Fisher J. said:-

"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."

13. However, Mr Bayne said that this aspect of News Corporation should no longer be regarded as good law. Although Mr Bayne referred to several subsequent cases, his major emphasis was on Victorian Public Service Board v. Wright [1986] HCA 16; (1986) 160 CLR 145, a case arising under the Freedom of Information Act 1982 (Vic). That Act is like the Commonwealth Act in containing a section (also s.3) setting out the object of the legislation. In the Victorian statute the expressed object "is to extend as far as possible the right of the community to access to information in the possession of the Government of Victoria and other bodies constituted under the law of Victoria for certain public purposes ...". Section 3 of the Commonwealth Act is in similar terms, save that it refers to the right of "the Australian community" to access to information "in the possession of the Government of the Commonwealth".

14. In Victorian Public Service Board the High Court was concerned with the scope of the power of the County Court to review a certificate that a document was exempt from disclosure. There was an inconsistency between two provisions of the Act. In resolving that inconsistency, the Court (Gibbs C.J., Mason, Wilson, Deane and Dawson JJ.) referred to s.3 of the Victorian Act. The Court also referred to s.16(1), which requires Ministers and agencies to administer the Act "with a view to making the maximum amount of government information promptly and inexpensively available to the public". At 153 their Honours said:-

"In the light of these sections it is proper to give to the

relevant provisions of the Act a construction which would

further, rather than hinder, free access to information."

15. Mr Bayne submitted that a similar approach ought to be taken to the Commonwealth Act, a view which we accept. However, it is important to note that, in Victorian Public Service Board, their Honours went on to say, at 153-4:-

"It is, in our view, evident that such a purpose would not

be promoted by adopting a narrow construction of the

appellate functions of the County Court under the Act or by

imposing any limitation upon the effect of its decisions

beyond any limits plainly imposed by the Act itself". (Our

emphasis).

16. In other words, whilst provisions such as ss.3 and 16 assist the interpretation of any ambiguities in the legislation, they cannot prevail over words plainly expressed. That is what was said in News Corporation. The same point was made by Burchett J., with whom Woodward J. agreed, in Arnold v. Queensland [1987] FCA 148; (1987) 73 ALR 607 at 626:-

"In my view it is too late to regard s.3 as introducing any

bias into the construction of the exemptions in the Freedom

of Information Act. They are as much a part of the Act as

s.11, which confers a right to access expressly subject to

them and as a right relating to documents other than those

which are exempt."

17. None of the other cases cited by Mr Bayne in respect of this matter calls into question the continued appropriateness of News Corporation. His submission on this aspect of the case should be rejected.

18. Section 40 of the FOI Act provides, inter alia:-

"(1) Subject to subsection (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."

19. Mr Bayne submitted that this provision should be read as limited to matters related to the internal administration of the agency, such as a report by an outside agency or consultant on the operations of the agency. The Tribunal rejected a similar submission put to it by Dr Peter Cashman, who then appeared for PIAC. The Tribunal said:-

"41. 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'".

20. In our opinion the Tribunal was correct in rejecting his submission. There is no warrant for importing into the words of the section a limitation along the lines contended for.

21. The issue before the Tribunal was whether the disclosure of the names of external evaluators who had reported to the Department on Searle's applications under the Therapeutic Goods Act would have a substantial adverse effect on the proper and efficient conduct of the operations of the Department. The Tribunal held that disclosure would do so and would not, on balance, be in the public interest. However, in coming to that conclusion, the Tribunal referred with apparent approval to an earlier Tribunal decision, Re Rae and Department of Prime Minister and Cabinet (1986) 12 ALD 589. That decision related to s.33A which contains a similar "public interest" qualification. In the present case the Tribunal noted a comment in Rae at 600:-

"43. ... 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."

22. The reference to onus was an unfortunate one, particularly in the light of s.61(1) which places the overall onus on the agency or Minister. If the Tribunal had disposed of the present case by holding that the applicant had failed to discharge an onus of proof, it would have made an error of law. But the Tribunal did not do so, as is apparent from para 44 of its reasons:-

"44. It must be shown objectively that there is a public

interest in the subject matter to which the documents

relate. There is a public interest in the public knowing

from whom the Department receives information when it

evaluates therapeutic goods. To be balanced against that

must be the Department's ability to obtain sound advice to

enable it to fulfil its responsibilities. 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 or the names of doctors who agreed to be

triallists. The Tribunal considers that the documents

should be released with deletions so as not to reveal the

identity of the evaluators or triallists."

23. The opening sentence of this paragraph seems to repeat the Rae error of casting an onus upon an applicant for disclosure. But the remainder of the paragraph makes it clear that, despite its reference to onus, the Tribunal found that, although there was a public interest in disclosure, the claim for disclosure failed because that public interest was outweighed by the effect of disclosure on the Department's ability to obtain advice.

24. The most crucial issues arise under s.43(1) of the FOI Act which provides:-

"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

organization 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 organization 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

any 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."

25. In its reasons with respect to s.43(1)(a), the Tribunal said:-

"51. It was submitted both by Ms Henderson for the

Department and Mr Walker for Searle Australia that many of

the documents in issue contain trade secrets, being

information relating to manufacturing processes, product

specifications, testing methods and procedures and clinical

efficacy and safety of the devices. 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
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

or duplicate the secret.'

52. In written submissions Dr Cashman submitted that

factor (f) in Re Organon is not relevant. That submission

was not pressed in oral submissions. However, he also

submitted that information relating to what he called 'human

testing data' does not come within the definition of trade

secret.

53. In his written submissions 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. ....

(The Tribunal referred to News Corporation).

54. The Tribunal is of the view therefore that the words

`trade secrets' should be given their ordinary meaning under

Australian law. As he had done in the Schering matters (Re

Public Interest Advocacy Centre and Department of Community

Services and Health and Schering Pty Ltd (1991) 23 ALD

714), 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

differentiate information relating to the results found when

testing the product on human beings.

55. 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 [1983] USCADC 159; 704 F 2d 1280, 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 DC 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

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'.

56. 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 s 43(1)(b) and this is discussed below.

57. 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 publicly available

documents, including material distributed to the medical

profession. Dr Cashman, however, did not bring any evidence

to support his contention that the information was in the

public domain. Mr Hilsden, on the other hand, gave evidence

concerning the steps taken by Searle Australia and its

parent company to prevent the dissemination of certain

information." (Our emphasis)

26. This reasoning of the Tribunal involved errors of law.

27. The ambit of the term "trade secrets" is not easy to delineate but the term has been used in decision of courts and in legislation for a long time. Thus, in Allsopp v. Wheatcroft (1872) Law Rep 15 Eq 59 at 64-5, Sir John Wickens V.C. referred to "a clearly lawful restriction against divulging a trade secret." In Davies v. Davies (1887) 36 Ch D 359, Cotton L.J. at 385 used the same expression and at 384 referred to "the contract not to divulge the trade secret". These are but examples of many such statements. The term "trade secrets" was not always used to convey the concept under discussion. Thus, in Haynes v. Doman (1899) 2 Ch 13 at 28, Romer L.J. referred to "secrets and information relating to the business which ought not to be disclosed to or be at the service of any of the plaintiff's potential rivals in trade".

28. However, the term has come to be an ordinary term of the English language. Thus, the Oxford English Dictionary gives "trade secret" the meaning "a device or technique used in a particular trade or (trans.) occupation and giving an advantage not generally known." The Factories and Workshops Act 1901 (U.K.) by s.116(3) provided that "If anyone engaged as a worker in a factory ... discloses the particulars for the purpose of divulging a trade secret he shall be liable to a fine of ten pounds." Likewise, the Commerce (Trade Descriptions) Act 1905 (Cth), even when first enacted, referred in s.16 to "trade secrets of manufacture or preparation". The term now appears in eleven Commonwealth statutes including s.76B(2)(vi) and s.76D(2)(vi) of the Crimes Act 1914.

29. The term may have been used more frequently in judicial decisions than in common parlance to describe secrets the confidentiality of which courts of law will protect. In the legal area the term is particularly used in cases where an employee/employer relationship is involved and the issue is the extent of the employee's implied obligations to the employer as to confidentiality or as to whether an express obligation is invalid as being too wide and in restraint of trade. Gummow J. in Corrs Pavey Whiting and Byrne v. Collector of Customs (Vic) [1987] FCA 266; (1987) 14 FCR 434 at 449, went so far as to say that the term "trade secrets" in s.43(1)(a) was prima facie a "technical legal expression". At least in the context of the FOI Act, we think that the term does not have a technical legal meaning but is an ordinary term of the English language, though used perhaps more commonly in legal judgments and legal writings than elsewhere.

30. In the protection of information, the law is concerned primarily with the relationship between the parties and the circumstances of disclosure. Thus, the disclosure of confidential information may, because of the circumstances and the relationship of the parties, be protected though the information not be a trade secret. Conversely, there may be circumstances in which the disclosure of trade secrets will not be prohibited by the law. For its part, the FOI Act adopts an objective concept, that of "trade secrets", a term used in several statutes, some of them providing criminal sanctions.

31. Reference was made during argument to several United States authorities. We do not think that they assist in the application of s.43(1)(a) of the FOI Act. The United States legislation is different to the Australian and the approach taken there to analogous provisions is not the same. The FOI Act has adopted an expression which is well known in commerce, in judicial decisions and in Australian legislation. It should be given the meaning well understood in this country.

32. The determination of what is a trade secret is primarily a question of fact for the administrative decision-maker. Nevertheless, it is an error of law for a decision-maker to define a statutory criterion in terms which are not reasonably open: see Hope v. Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 7-8 per Mason J.; Lombardo v. Federal Commissioner of Taxation [1979] FCA 66; (1979) 28 ALR 574 at 576 per Bowen C.J. There may also be an error of law if a decision-maker considers a case pursuant to criteria which are not stated by the statute in preference to the words which the statute uses. See e.g. Bowen C.J. and Beaumont J. in Cockcroft, cited above, at 190. This is because the words of the statute are the means which Parliament has adopted to convey its will. If a term is used in legislation, Parliament is to be taken as requiring that individual cases will be judged against that term, not against other terms or criteria not used in the statute.

33. In the present case the Tribunal applied the criteria listed in Re Organon. Those criteria are not stated in s.43(1)(a). They introduce a limitation, namely that the information is of a technical character, which does not appear in the statute and is not inherent in the term "trade secret". Information may be a secret whether or not it is of a technical character. In determining the facts on the criteria stated in Re Organon rather than the words of the statute, the Tribunal erred in law.

34. Insofar as legal judgments elucidate the basic concept of what is a trade secret, it is useful to refer to Lansing Linde Ltd v. Kerr (1990) 21 IPR 529, in which Staughton L.J. said at 536:-

"In Faccenda Chicken Ltd v Fowler (1985) 1 All ER 724

Goulding J. at first instance had defined three classes of

information, as follows: (i) information which, because of

its trivial character or its easy accessibility from public

sources of information, cannot be regarded by reasonable

persons or by the law as confidential at all; (ii)

information which the servant must treat as confidential but

which once learned necessarily remains in the servant's head

and becomes part of his skill and knowledge; (iii) specific

trade secrets so confidential that, even though they may

necessarily have been learned by heart and even though the

servant may have left the service, they cannot lawfully be

used for anyone's benefit but the master's. There the

dispute was as to the second class so defined. Goulding J.

expressed the view that it could be protected by an express

covenant; this court was of the contrary opinion: see (1986)

1 All ER 617; (1987) Ch 117. Subsequently other judges have

touched on the topic in Balston Ltd v Headline Filters Ltd

(1987) FSR 330 and Lock International plc v Beswick (1989)

16 IPR 497; (1989) 3 All ER 373; (1989) 1 WLR 1268.

It appears to me that the problem is one of definition: what

are trade secrets, and how do they differ (if at all) from

confidential information? Mr Poulton suggested that a trade

secret is information which, if disclosed to a competitor,

would be liable to cause real (or significant) harm to the

owner of the secret. I would add first, that it must be

information used in a trade or business, and secondly that

the owner must limit the dissemination of it or at least not

encourage or permit widespread publication.

That is my preferred view of the meaning of trade secret in

this context. It can thus include not only secret formulae

for the manufacture of products but also, in an appropriate

case, the names of customers and the goods which they buy."

35. There is no reason therefore why there cannot be trade secrets in respect of the manufacture of medical or health products as much as for other products. To take Staughton L.J.'s example, the trade secrets of such a manufacturer may include formulae for the products as well as information concerning customers provided, in each case, that the information is in fact kept secret and would be to the advantage of trade rivals to obtain.

36. The necessity for secrecy means that such matters as the dimensions of products, and of parts of products, already on the market are unlikely to be trade secrets; the products being inspectable, such matters usually will not be secret. Similarly, the composition of a product, though secret in the first instance, may cease to be secret because it has become known through testing, reporting in trade journals, or discussions at seminars or conferences. Information, originally secret, may lose its secret character as time passes. See Attorney-General v. Jonathan Cape Ltd (1976) QB 752 at 771 where Lord Widgery C.J. said:-

"There must, however, be a limit in time after which the

confidential character of the information, and the duty of

the court to restrain publication, will lapse. Since the

conclusion of the hearing in this case I have had the

opportunity to read the whole of volume one of the Diaries,

and my considered view is that I cannot believe that the

publication at this interval of anything in volume one would

inhibit free discussion in the Cabinet of today, even though

the individuals involved are the same, and the national

problems have a distressing similarity with those of a

decade ago. It is unnecessary to elaborate the evils which

might flow if at the close of a Cabinet meeting a Minister

proceeded to give the press an analysis of the voting, but

we are dealing in this case with a disclosure of information

nearly 10 years later."

37. The indicia stated in Re Organon were merely guides. It may be that the more technical the information is, the more likely it is that, as a matter of fact, the information will be classed as a trade secret. But technicality is not required. Many valuable trade secrets could be readily understood by a lay person, if informed of them. See, for example, the reference by Staughton L.J. to "the names of customers and the goods which they buy." As Farwell L.J. said in Sir W.C. Leng and Co Limited v. Andrews (1909) 1 Ch 763 at 774:-

"... it would be a breach of confidence to reveal trade

secrets, such as prices, andc., or any secret process or

things of a nature which the man was not entitled to

reveal."

Paragraph (a) of the indicia enunciated in Re Organon was not stated by Gowans J. in Ansell Rubber Co Pty Ltd v. Allied Rubber Industries Pty Ltd [1967] VicRp 7; (1967) VR 37, whose indicia were otherwise adopted in Re Organon.

38. An aspect of the concept of "trade secrets" which was not discussed by the Tribunal is that the secrets must be used in or useable in the trade. A trade secret is an asset of the trade. Past history and even current information, such as mere financial particulars, may be confidential. The law may protect the disclosure of such information by a person who has obtained it in the course of a relationship which requires confidentiality, such as that of employee, solicitor or accountant. But such information may not be a trade secret.

39. It may be that some of the documents in issue before the Tribunal would disclose information of that type, namely, information which Searle has maintained confidential to itself but which is not a trade secret because it is not information now used for the benefit of Searle's business.

40. The determination in any particular case of the question whether information is a trade secret is a determination of fact. Accordingly, it is for the Tribunal to determine whether the documents described by the undefined term, "health and safety data", contain trade secrets. No general statement may be made about those documents. As we understand the evidence in the present case, there is information in the possession of the Department concerning the efficacy and effects of "Gravigard" and "Mini-Gravigard" and regarding tests which had been undertaken on or in relation to them. This information has hitherto been kept confidential. It may, therefore, properly be described as "secret". It is less apparent that it is information now useable in trade. The question must be determined by the Tribunal, having regard to the content of each of the relevant documents but free of any requirement that the information contained in the document be of a technical character.

41. In reconsidering the material the Tribunal may take account of the fact that counsel are agreed that some of the documents which the Tribunal considered only under s.43(1)(a) should also have been considered under s.43(1)(b) and (c)(i).

42. After the extract from the judgment of Staughton L.J. in Lansing Linde Ltd v. Kerr, cited earlier, his Lordship went on to say:-

"But some may say that not all such information is a trade

secret in ordinary parlance. If that view be adopted, the

class of information which can justify a restriction is

wider, and extends to some confidential information which

would not ordinarily be called a trade secret."

For the purposes of the law, it is rarely necessary to distinguish strictly between, on the one hand, "trade secrets" and, on the other hand, confidential information analogous to trade secrets which, because of its nature should also be protected. Similarly, it would be difficult to find a trade secret which did not also fit within the totality of the descriptions in s.43(1)(a), (b) and (c). The Administrative Appeals Tribunal, when dealing with an issue under s.43, may not find it necessary to state definitively the ambit of the term. If information did not fall within s.43(1)(b) and s.43(1)(c)(i), it would be unlikely to be exempt simply because of s.43(1)(a).

43. In respect of the words "could reasonably be expected to" in s.43(1)(b) and (c), it was submitted that there was a difference between the remarks of Bowen C.J. and Beaumont J. on the one hand and of Sheppard J. on the other in Cockcroft. However, the submission appears to have proceeded upon a misunderstanding of what Bowen C.J. and Beaumont J. intended. Their Honours emphasised that it would not be appropriate to substitute other words. The words of the sub-section are ordinary words of the English language and are used in the sense in which they would be employed in common parlance. Their Honours said at 190:-

"In our opinion, in the present context, the words 'could

reasonably be expected to prejudice the future supply of

information' were intended to receive their ordinary

meaning. That is to say, they require a judgment to be made

by the decision-maker as to whether it is reasonable, as

distinct from something that is irrational, absurd or

ridiculous, to expect that those who would otherwise supply

information of the prescribed kind to the Commonwealth or

any agency would decline to do so if the document in

question were disclosed under the Act. It is undersirable to

attempt any paraphrase of these words. In particular, it is

undesirable to consider the operation of the provision in

terms of probabilities or possibilities or the like. To

construe s 43(1)(c)(ii) as depending in its application upon

the occurrence of certain events in terms of any specific

degree of likelihood or probability is, in our view, to

place an unwarranted gloss upon the relatively plain words

of the Act. It is preferable to confine the inquiry to

whether the expectation claimed was reasonably based: see

Kioa v West [1985] HCA 81; (1985) 60 ALJR 113 per Mason J. and per Gibbs C.J.

The majority of the Tribunal thought an assessment of what

was more probable than than not was called for. As Woodward

J. has pointed out, there are difficulties in this approach

for the legislature has chosen not to introduce the notion

of a `probable' result: cf Ex parte White; In re White

(1885) 14 QBD 600. It is also unnecessary to consider

whether an `even chance' or something of that kind is

needed. It is preferable to confine oneself to the language

of the provision itself and to attempt to form an opinion,

on the evidence, as to what can reasonably be expected to

happen if disclosure occurs. In our opinion, in departing

from the terms of s 43(1)(c)(ii) and requiring the

applicants to establish a case on the balance of

probabilities, the majority of the Tribunal fell into error

in their construction of the provision."

44. Their Honours did not suggest, as was submitted by Mr Bayne, that it was sufficient that there be a possibility not irrational, absurd or ridiculous that the specified consequence would occur. Their Honours specifically rejected that approach, saying that the words "could reasonably be expected" meant what they said. The practical application of their Honours' view will not necessarily lead to a result different from that proposed by Sheppard J.

45. In the application of s.43(1)(b), there would ordinarily be material before the decision-maker which would show whether or not the commercial value of the information would be or could be expected to be destroyed or diminished if the information were disclosed. It would be for the decision-maker to determine whether, if there were an expectation that this would occur, the expectation was reasonable.

46. In para 58 of its reasons, the Tribunal said:-

"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'.

However, the question under s.43(1)(b) is not whether there is a reasonable basis for a claim for exemption but whether the commercial value of the information could reasonably be expected to be destroyed or diminished if it were disclosed. These two questions are different. The decision-maker is concerned, not with the reasonableness of the claimant's behaviour, but with the effect of disclosure. The Administrative Appeals Tribunal failed to determine that question and erred in law in this respect.

"59. 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 that

there were circumstances in which health and safety data may

have a commercial value.

60. An argument was advanced during the hearing by the

respondent and the party joined that certain documents were

exempt even though parts of the documents were comprised of

published articles. The argument was advanced on the basis

of both `commercial value' and confidentiality. Ms

Henderson and Mr Walker both stated that no claim was in

fact made in relation to the content of the material but a

claim was advanced in relation to its compilation, that is,

the choice and arrangement of material for submission to the

Department. Mr Hilsden told the Tribunal that, in his

opinion, which studies out of a pool of information were

selected to support an application to the Department was

something to which commercial value attached. He went so

far as to say that he thought it was in fact a `trade

secret'. In his opinion the `technological know-how' of

assembling an application was valuable commercial

information.

61. A similar argument was advanced in the Schering

matters and not accepted by this Tribunal. 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 Searle

Australia 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 information.'

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.

62. The Tribunal considers, 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'. If

information of an identical kind to that in the documents has

already been disclosed to the public, then it's (sic)

commercial value would not be further diminished by

disclosure under the FOI Act."

On this basis, the Tribunal refused the disclosure of some documents but not of others.

48. In those paragraphs, the Tribunal stated the question as whether the information contained in the documents, which included information as to the particular tests made by Searle, had commercial value. But to find that similar results were stated in public articles would not conclude the inquiry. Commercial value may attach to information contained in any documents which concerned the nature of, techniques used in, and the actual results of Searle's tests. The Tribunal did not make the findings required in this respect.

49. A similar issue was raised with respect to s.43(1)(c). Again, the test is not whether it is reasonable for a person to claim exemption but whether, in the opinion of the decision-maker, having regard to the information before the decision-maker:-

"... the disclosure ... would, or could reasonably be

expected to, unreasonably affect that person adversely".

"66. This sub-section (s 43(1)(c)(i)) makes use of the

words `reasonable' and `unreasonable'. As was stated in the

Schering matters, 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 (No. 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.

67. The word `unreasonably' should be given its usual

meaning and there is no need to balance competing interests.

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, thed

decision maker must be satisfied that the effect is of

substance rather than incidental or trivial."

51. However, the word "unreasonably" should be given its ordinary meaning. Section 43(1)(c)(i) poses the issue whether disclosure of the information would unreasonably affect a person adversely. The issue is not whether "the effect is of substance rather than incidental or trivial", as stated by the Tribunal in para 67.

52. If it be in the public interest that certain information be disclosed, that would be a factor to be taken into account in deciding whether a person would be unreasonably affected by the disclosure; the effect, though great, may be reasonable under the circumstances. To give two examples: if the relevant information showed that a business practice or product posed a threat to public safety or involved serious criminality, a judgment might be made that it was not unreasonable to inflict that result though the effect on the person concerned would be serious. Of course, the extent and nature of the effect will always be relevant, often decisive. Whether the effect of the disclosure is unreasonable cannot be assessed without taking into account all relevant factors: Colakovski v. Australian Telecommunications Corporation [1991] FCA 152; (1991) 100 ALR 111 at 120-1, 123, 123-4.

53. It follows that the Tribunal's approach to s.43 was erroneous in certain respects. However, the ultimate questions, including the meaning of ordinary words used in their ordinary sense, are questions of fact for the Tribunal. They are not matters for us.

54. The next issue arises under s.45(1) of the FOI Act which provided, at the date of the Tribunal decision:-

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

under this Act would constitute a breach of confidence."

"A document is an exempt document if its disclosure under

this Act would found an action, by a person other than the

Commonwealth, for breach of confidence."

55. Mr Bayne submitted that the Tribunal was in error in finding that the subsection required consideration of only two matters: whether the information was communicated in confidence and whether it was confidential.

"80. 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.'

57. The tests to be applied by the Tribunal are thus twofold:

(a) was the information communicated in

confidence; and

(b) is the information confidential.

81. As occurred in the Schering matters, both the

applicant and the party joined 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."

58. In challenging this part of the Tribunal's reasoning, Mr Bayne sought to reagitate the issue whether, in the form in which the section stood at the time of the Tribunal's decision, the words "a breach of confidence" denoted "actionable breach of confidence". That view has been rejected on a number of occasions, including by Sweeney and Jenkinson JJ. in Corrs Pavey Whiting and Byrne, cited previously, at 435, 436-8.

59. In its form at the time of the Tribunal's decision, the section referred to the circumstance where disclosure to the public would be a breach of confidence. Disclosure under the FOI Act is, of course, disclosure to the public, and the particulars and personality of the applicant are of no significance. See s.11 of the FOI Act, which provides that "every person has a legally enforceable right to obtain access in accordance with this Act" (our emphasis).

"82. The issue before Gummow J. (in Smith Kline and French)

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 Searle Australia 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'. Mr Hilsden also told

the Tribunal that Searle Australia regards all information

provided to the Department contained in and in support of

NDF4 applications for pharmaceutical products as

confidential. The Tribunal notes that neither Mr Pflaum nor

Mr Hilsden 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.

83. 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."

61. However, in this finding, the Tribunal failed to have regard to the effect of the FOI Act, a matter which did not arise in Smith Kline and French. Prior to the coming into operation of the FOI Act, most communications to Commonwealth departments were understood to be confidential because access to the material could be obtained only at the discretion of an appropriate officer. With the commencement of the FOI Act on 1 December 1982, not only could there be no understanding of absolute confidentiality, access became enforceable, subject to the provisions of the FOI Act. No officer could avoid the provisions of the FOI Act simply by agreeing to keep documents confidential. The FOI Act provided otherwise.

62. Nonetheless, there may remain a distinction, not discussed by the Tribunal, between those documents emanating from Searle which it provided because it sought a decision under the Therapeutic Goods Act and documents which, on the other hand, Searle voluntarily supplied to the Department on the understanding that the documents would be kept confidential. The documents which Searle supplied in the voluntary program for reporting may have fallen into the latter category. Mr Pflaum referred to such a distinction in, inter alia, paras. 18 and 19 of his affidavit.

63. When considering documents under s.45(1), the Tribunal went on to say:-

"84. Dr Cashman tendered a number of published articles in

an effort to demonstrate that there is a considerable amount

of information in the public domain regarding the devices

and their efficacy. Although the Tribunal was able to

obtain little assistance from this material, we are not

satisfied that all documents for which this exemption is

claimed 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. Some documents in issue in these proceedings are

published articles. That material is already in the public

domain and cannot be described as `confidential'."

As we have already mentioned, the fact that information of some test results was in the public domain does not necessarily lead to the conclusion that more detailed information was not confidential. This treatment manifested an error of law by the Tribunal.

64. We propose to order that the decisions of the Administrative Appeals Tribunal with respect to the documents which are the subject of the appeal, of the cross-appeal and of the notice of contention be set aside and that these matters be remitted to the Administrative Appeals Tribunal to be heard and decided again according to law, either with or without the hearing of further evidence.

65. As the parties have had mixed fortunes on their submissions, and the character of the documents as exempt or non-exempt will not be known until the Administrative Appeals Tribunal has reconsidered the issues, each party should abide its own costs of these proceedings.