Retain Beacon Hill High School Committee Inc v NSW Treasury [1999] VSCA 117 | Case summary

REASONS FOR DECISION Background 1 This matter involves an application by the Retain Beacon Hill High School Committee Incorporated ('the Committee') for the review of a decision by the NSW Treasury to refuse access to the whole or part of certain documents requested by the Committee. 2 By letter dated 28 February 2005, Sue Covey, the Secretary of the Committee, acting on its behalf, applied to the NSW Treasury requesting access to "[a]ll documents and communications in relation to the NSW Government High School defined as, Beacon Hill High School from 11 January 2000 to 28 February 2005". The application specified that the documents sought included all internal and administrative working documents, including all factual and statistical material, records of all phone calls, file notes, diary notes, fax transmission records, memos, emails and "all bits of paper etc". 3 This application is one of a number of applications made by the Committee to NSW Government departments/agencies relating to the site of the former Beacon Hill High School ('BHHS'). The closure of the High School and the proposed sale of the site by the Department of Education and Training ('the DET') have attracted significant community attention. 4 In June 2001, the NSW Minister for Education announced the proposed closure of BHHS. Following this, the DET entered into negotiations with Landcom with a view to Landcom purchasing the site and, in 2005, entered into a conditional contract for the purchase of the site by Landcom. In late 2006, Landcom exercised its right to withdraw from the contract. The DET and Landcom subsequently agreed that Landcom would facilitate the demolition of the buildings on the former BHHS site, would facilitate the division of the site into two lots, one lot comprising the area on which the buildings stood ('the buildings lot'), and other comprising the former playing fields ('the playing fields lot'), and would manage the sale of the buildings lot by public tender. The playing fields lot is to be retained in public ownership. The BHHS buildings have recently been demolished. 5 The Treasury identified 25 documents as falling within the scope of the Committee's application and, on 5 April 2005, agreed to release the whole or part of some of the relevant documents, but refused access to others or parts of others pursuant to s 25 and Sch 1, Pt 2, cl 1, cl 7 and cl 15 of the Freedom of Information Act 1989 ('the FOI Act'), on the ground that they contained exempt information. 6 On 26 April 2005, the Committee applied for an internal review of this decision. By letter dated 5 May 2005, the review officer notified Ms Covey of his decision to affirm the original decision, finding that the exemptions had been correctly applied. On 30 June 2005, the Committee filed an application for a review of this decision by the Tribunal. 7 In the course of the pre-hearing exchange of documents, the Treasury decided to release additional parts of documents 13, 15, 16, 17 and 20. As a consequence, the documents in issue at the hearing were as follows: (1) those claimed to be exempt in part - documents 2 to 21; (2) those claimed to be wholly exempt - documents 22 to 25. Document 1 has been released in full and is not in issue. The Relevant Law 8 Pursuant to s 16(1) of the FOI Act, "[a] person has a legally enforceable right to be given access to an agency's documents". However, s 25(1)(a) states that an agency "may refuse access to a document" if it is an "exempt document", the onus being on the agency to establish this. Section 25(4) provides that an agency shall not refuse access to an exempt document if it is practicable to give access to a copy of the document from which the exempt matter has been deleted and it appears to the agency that the FOI applicant would wish to be given access to such a copy. 9 Section 6(1) defines 'agency' as including a Government Department, and 'exempt document' as including a document referred to in any one or more of the provisions of Sch 1. The exempt documents in Sch 1 include, relevantly, those specified in cl 1, cl 7 and cl 15, as follows: 1. Cabinet documents (1) A document is an exempt document: ... (e) if it contains matter the disclosure of which would disclose information concerning any deliberation or decision of Cabinet. (4) In this clause, a reference to Cabinet includes a reference to a committee of Cabinet and to a subcommittee of Cabinet. 7. Documents affecting business affairs (1) A document is an exempt document: (a) if it contains matter the disclosure of which would disclose trade secrets of any agency or any other person, or (b) if it contains matter the disclosure of which: (i) would disclose information (other than trade secrets) that has a commercial value to any agency or any other person, and (ii) could reasonably be expected to destroy or diminish the commercial value of the information, or (c) if it contains matter the disclosure of which: (i) would disclose information (other than trade secrets or information referred to in paragraph (b)) concerning the business, professional, commercial or financial affairs of any agency or any other person, and (ii) could reasonably be expected to have an unreasonable adverse effect on those affairs or to prejudice the future supply of such information to the Government or to an agency. (2) A document is not an exempt document by virtue of this clause merely because it contains matter concerning the business, professional, commercial or financial affairs of the agency or other person by or on whose behalf an application for access to the document is being made. 15. Documents affecting financial or property interests A document is an exempt document if it contains matter the disclosure of which: (a) could reasonably be expected to have a substantial adverse effect on the financial or property interests of the State or an agency, and (b) would, on balance, be contrary to the public interest. The Evidence 10 The DET filed the 24 confidential documents it claims are exempt or partially exempt, described in the Schedule of Exempt and Partially Exempt Documents ('the Schedule') attached to the original decision. The DET also called three witnesses, each of whom provided a statement. 11 Phillip Peace, the Director, Capital and Infrastructure Finance of the DET, provided an open and a confidential statement, both dated 15 September 2006, and gave oral evidence at the hearing. In his open statement, Mr Peace said that following the announcement of the closure of the BHHS site in June 2001, the Minister approved the sale of the site, consistent with the Government's Total Asset Management principles, pursuant to which there is an obligation for agencies to maximize the return on the disposal of assets. The revenue realised from the sale of the site will be invested in school capital works and maintenance programs on a statewide priority basis. 12 The DET entered into negotiations with Landcom as the preferred purchaser of the site and was assisted in this process by valuations and advice from the Department of Commerce. In July 2003, the Minister for Education and Training approved the sale of the buildings lot to Landcom for the development of 25 to 30 residential allotments, with the management of the playing fields lot to be transferred to Warringah Council. A contract for the sale of the buildings lot to Landcom was entered into, but the contract was subject to certain conditions and, in late 2006, Landcom exercised its right not to proceed with the transaction. 13 However, Mr Peace said that the DET have agreed that Landcom will act as its agent for the demolition of the buildings on the BHHS site and for the marketing and disposal of the buildings lot by the DET, which will be by way of public tender. It is likely that a private bidder will purchase the site. 14 Mr Peace said that despite Landcom having withdrawn from the contract for purchase of the site, the release of information about valuations of the site in relation to this transaction, including the price agreed between the DET and Landcom, and about development and infrastructure costs, remains commercially sensitive information. If known, this could adversely influence the sale of the land, as a result of potential purchasers making lower tenders by reference to the earlier valuations and the DET/Landcom contract price. Rather, potential purchasers should conduct their own due diligence. 15 Mr Peace said the DET's view about the confidentiality of this information has not changed as a result of discussion speculating on the DET/Landcom contract price in Parliament and the Daily Telegraph. 16 Robert Kennedy. Mr Kennedy is the Development Director of Landcom. He provided an open and a confidential statement, both dated 13 September 2006, and gave oral evidence at the hearing. He stated that earlier in 2006, it was decided that Landcom should only undertake developments of statewide significance or which are complex. The development of the BHHS site does not meet those criteria. 17 Although Landcom has now withdrawn from the contract to purchase the buildings lot, it will act as the DET's agent for the demolition of the existing buildings and for the sale of the site by public tender. A Real Estate Agent has been appointed and is currently preparing marketing material. Marketing of the residential lots will commence in late March or early April 2007, and the tendering process will commence from about mid-May, with a view to settlement of the sale by the end of June. 18 Mr Kennedy said that valuations for the site, including the projected costs associated with developing the site, remain sensitive information, the release of which could result in lower tenders and damage the DET's ability to achieve the best possible price on the sale. It is in the DET's best interest that the market makes up its own mind as to the value of the site. 19 Brian Cheney. Mr Cheney is the Director of Arts, Central Agencies and Education of the Treasury. He provided a statement dated 2 May 2006 and gave oral evidence at the hearing. Mr Cheney stated that one of his roles is to oversee the funding of the DET. Any funds raised from the sale of surplus assets by the DET are returned to the DET if required for use elsewhere in its assets portfolio. Agencies are required to obtain market values for the sale or transfer of surplus properties. However, before surplus property can be sold, the Government Asset Management Committee ('the GAMC') must be consulted and, in particular, its Property Asset Disposal Panel ('the Panel'). The Panel will assess the strategic value or merit of a particular parcel of land, canvass with other agencies to see whether it is required by another government agency, and only if it is not required can the property be sold. 20 Mr Cheney said the GAMC and the Panel are serviced by the Treasury. In performing this function, and as a result of his branch of the Treasury being involved in funding and resource allocation for the DET, the Treasury holds documents on the value of the former BHHS site, provided to it either by the DET or Landcom. Mr Cheney said that to disclose information on the valuation of the former BHHS site would undermine the tendering process and be likely to prevent the DET from obtaining the best possible price for the site through the public tender process. It is likely that the release of such information would lead to a reduction in the value of the tenders because the past experience of the DET indicates that where estimates for specific projects have been included in the Budget Papers, tenderers have tendered close to the figure disclosed. The DET has informed the Treasury that since such information has been excluded from the Budget Papers, the tenders it has received have been much more competitive. 21 Mr Cheney said that the first paragraph of document 10 refers to information discussed by the Budget Subcommittee of Cabinet, which is comprised of the Premier, the Treasurer and one or two other Cabinet Ministers. The role of the Subcommittee is to approve the State Budget. The Treasury makes submissions to Cabinet. Only two copies of the minutes of the Subcommittee are held - one in the Cabinet Office and one in the Treasury. 22 Mr Cheney made the original determination on the (Applicant) Committee's FOI application. He sent an enquiry to all areas of the Treasury seeking the identification of relevant documents in response to the application. Mr Cheney denied any suggestion that the search was inadequate or that the documents listed in the Schedule are incomplete. 23 Mr Cheney stated that the following documents contain information about the actual or budgeted sale price of the former BHHS site, the disclosure of which would, in his opinion, have a detrimental effect on financial returns from the sale: documents 2, 3, 4, 7, 11, 12, 18, 19, 21, 22, 23, 24 and 25. Mr Cheney said that many of the documents also contain information concerning other Government programs or Government Departments unconnected with BHHS and outside the scope of the Committee's FOI application. Such material has therefore been deleted from the following documents: 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23, 24, and 25. Submissions, Discussion and Findings Review of the Documents in Issue 24 I have reviewed the documents in issue by reference to the exemptions claimed, having regard to the relevant principles of law and the submissions of the parties. The following is my brief summary of the material in respect of which exemption is sought, according to the document number appearing in the Schedule prepared by the Treasury. Where I have referred to page numbers in respect of a document, this is a reference to the sequence in which the pages of the document occur rather than the page number marked on the page itself. [1. Released in full.] 2. Deleted material comprises valuations of the BHHS site and material outside the scope of the Committee's FOI application. 3. Deleted material comprises funding arrangements, cost estimates for the Revitalisation of Inner Sydney Schools (RISS) program, valuations and estimated revenue figures, together with other material outside the scope of the Committee's FOI application. 4. Deleted material includes a valuation of the BHHS site together with material outside the scope of the Committee's FOI application. 5 & 6. Deleted material is outside the scope of the Committee's FOI application. 7. Deleted material includes a valuation of the BHHS site together with material outside the scope of the Committee's FOI application. 8 & 9. Deleted material is outside the scope of the Committee's FOI application. 10. Deleted material relates to material discussed by the Budget Subcommittee of Cabinet. 11. Deleted material includes valuations of the BHHS site (pages 2 and 4) but is otherwise material outside the scope of the Committee's FOI application. 12. Deleted material is valuation information relating to the BHHS site together with material outside the scope of the Committee's FOI application. 13. All material originally deleted relating to the BHHS site was released by consent of the DET on 1 August 2006. The other material deleted is outside the scope of the Committee's FOI application. 14. Deleted material is outside the scope of the Committee's FOI application. 15. Material originally deleted on page 1 relating to the BHHS site was released by consent of the DET on 1 August 2006. Other material deleted concerns the proposed development of the BHHS site, including valuations, an outline of the proposed development, and costings. Finally, material has been deleted that is outside the scope of the Committee's FOI application. 16. Material originally deleted on page 2 relating to the BHHS site was released by consent of the DET on 1 August 2006. The other material deleted is outside the scope of the Committee's FOI application. 17. Material originally deleted on page 3 relating to the BHHS site was released by consent of the DET on 1 August 2006. The other material deleted comprises valuations of the BHHS site and material outside the scope of the Committee's FOI application. 18. The deleted material includes projected development expenditure for the BHHS site together with material outside the scope of the Committee's FOI application. 19. The deleted material comprises a valuation for the BHHS site. 20. Material originally deleted on page 1 relating to the BHHS site was released by consent of the DET on 1 August 2006. The other material deleted comprises a valuation of the BHHS site and material outside the scope of the Committee's FOI application. 21. The deleted material comprises a valuation for the BHHS site (page 3) and material outside the scope of the Committee's FOI application. 22, 23 & 24. These documents, claimed to be wholly exempt, set out projected asset sales, including the sale of the site of the former BHHS, with estimates of the revenue raised. 25. This document consists of an email and attached asset sales information, including in relation to the proposed sale of the former BHHS site. Clause 1 - Cabinet Documents 25 As in Cianfrano v Director General, NSW Treasury [2005] NSWADT 7, the question is whether there is sufficient evidence to establish a clear connection between the material in respect of which the exemption is claimed and any deliberation or decision of Cabinet or a Cabinet subcommittee. 26 Mr Cheney stated that the first paragraph of document 10, in respect of which a partial exemption is claimed, "refers to information discussed by the Budget Subcommittee of Cabinet". 27 Ms Johnson, for the Treasury, submitted that this was sufficient evidence to establish an exemption under cl 1. Mr Cianfrano, for the Committee, submitted that the Government was using this exemption to seek blanket exemptions for too wide a class of documents. 28 In my view, Mr Cheney's evidence is sufficient to establish reasonable grounds for claiming the exemption under cl 1(1)(e) - that it contains matter the disclosure of which would disclose information concerning deliberations of Cabinet - and I am satisfied that this partial exemption is the correct and preferable decision. Clause 7 - Documents affecting business affairs 29 Clause 7(1)(b). Relevantly, for a document to be exempt under cl 7(1)(b), first, the document must contain information that has a "commercial value" and, second, disclosure of that information "could reasonably be expected to destroy or diminish the commercial value of the information". Thus, the information must have value in terms of some commercial activity in which the agency or other person is engaged and, although that value need not be quantifiable, it must have substance and not be merely "minimal or nominal" (Leichardt Municipal Council v Roads and Traffic Authority [2005] NSWADT 37 ('the Leichardt Municipal Council case'), at par 54). In Freeland v General Manager, Liverpool City Council [1999] NSWADT 95 ('Freeland'), the Tribunal held that the disclosure of land valuations obtained by the Council in relation to the sale of a site would disclose information of commercial value to the Council, which would be reduced by their disclosure and could prejudice the sale of the property. The valuation documents were, therefore, found to be exempt documents. 30 Ms Johnson submitted that I should follow my decision in Retain Beacon Hill High School Committee Inc v NSW Department of Commerce [2006] NSWADT 129, at par 39, where I stated: "the view I have taken is that where a document refers to a valuation or proposed purchase price for the Beacon Hill High School site, or discusses Landcom's proposed options for purchase, or the conditions to which an offer is subject, then that document or part of the document is exempt material under cl 7(1)(b), following the decision in Freeland , in terms of having commercial value that is likely to be diminished by its disclosure." 31 This decision was reviewed by the Appeal Panel in Retain Beacon High School Committee Inc v Department of Commerce (GD) [2006] NSWADT 58. The Panel found, at par 23, that I "stated the law correctly as to the meaning to be given to each of the three exemptions [cl 7(1)(b), cl 7(1)(c) and cl 15], and the approach to their interpretation". 32 Mr Cianfrano, for the Committee, said that the contract price for the sale of the BHHS site by the DET to Landcom is already in the public domain and he tendered a copy of the first page of an unsigned contract showing a contract price, released inadvertently in response to an FOI application requesting access to documents addressed to the Department of Commerce. He said the contract price has also been revealed in papers relating to the closure of BHHS provided to the Legislative Council pursuant to an Order for Production (made under Standing Order No 52) addressed to the DET and Landcom, dated 21 September 2004, and in an article in the Daily Telegraph. Mr Cianfrano contended that this information has no significant commercial value since the former BHHS buildings have now been demolished. Thus, any present valuation for the site will be different. Moreover, any competent valuer will be able to determine a current bare land value for the site. 33 In my view, the Treasury have provided sufficient evidence - namely, that of Mr Peace, Mr Kennedy and Mr Cheney - to establish that information about the valuation of the site, including as to projected development expenditure, costings, and estimated revenue from its sale, is information which, following the decision in Freeland, has a commercial value to the DET and that disclosure of that information could reasonably be expected to diminish its commercial value. 34 Clause 7(1)(c). For a document to be exempt under cl 7(1)(c), first, the document must contain information concerning the business, professional, commercial or financial affairs of any agency or other person and, second, relevantly, disclosure of the information could reasonably be expected to have an unreasonable adverse effect on those affairs. In Vincent Neary v State Rail Authority [1999] NSWADT 107, at par 35, the President of the Tribunal, O'Connor DCJ, said that the Tribunal must adopt an objective approach in assessing what effect can reasonably be expected from the disclosure of the information, and the expectation must be more than a mere risk. 35 In Cianfrano v Director General, NSW Treasury [2005] NSWADT 7, at par 63, O'Connor DCJ said that "the commercial affairs of an agency can include transactions such as the leasing and sale of property vested in it, and related negotiations". He found, at par 67, that the release of documents likely to reveal the Government's approach to developing a price for negotiation in the sale of an asset could reasonably be expected to affect the conduct of potential purchasers in a way adverse to the public's interest in obtaining an appropriate price. 36 Ms Johnson submitted that, in the alternative, if the Tribunal is not satisfied that the information described is commercially valuable, then the documents are exempt under cl 7(1)(c) because they relate to the sale of land or negotiations for the sale of land and as such relate to the business, commercial or financial affairs of the DET. Moreover, the release of the documents would adversely affect DET's ability to obtain the best possible market price for the former BHHS site. 37 In his submissions, Mr Cianfrano referred the Tribunal to the recent NSW Supreme Court decision in University of NSW v McGuirk [2006] NSWSC 1362 ('McGuirk'), which is discussed below. 38 In my view, the evidence establishes that the documents containing information about the valuation of the site, including as to projected development expenditure, costings, and estimated revenue from its sale, contain information concerning the business, commercial or financial affairs of the DET. Revenue generated by the sale of DET property is, according to Mr Peace's evidence, invested in school capital works and maintenance programs. The evidence of all three witnesses is that the disclosure of such information could reasonably be expected to have an adverse effect on the ability of the DET to obtain the best possible market price for the site because tenderers are likely to tender at a price closely related to the agency's valuation. I am satisfied that this would result in an unreasonable adverse effect on the DET's the business, commercial or financial affairs. Clause 15 - Documents affecting financial or property interests. 39 In the Leichhardt Municipal Council case, at par 55 to par 56, the Tribunal emphasised that for an adverse effect to be "substantial" requires that it be serious or significant, and "there must be some evidence rather than merely an expressed concern, to satisfy the Tribunal of the necessity to refuse documents under this clause". In David Miles Connolly v Department of Finance (14 June 1994, AAT No 9571), a decision of the Administrative Appeals Tribunal ('the AAT') on a provision in the Commonwealth Freedom of Information Act 1982 equivalent to cl 15, Deputy President McMahon held, at par 27, that while, prima facie, there was a public interest in the disclosure of documents concerning Australia's uranium stockpile, this was outweighed by the public interest in avoiding a diminution in value of the Commonwealth's property and, more importantly, avoiding a diminution in the price for uranium received by Australia's uranium producers that could reasonably be expected from the release of the documents 40 In Retain Beacon High School Committee Inc v Department of Commerce (GD) [2006] NSWADT 58, at par 34, the Appeal Panel commented: "Clause 15 is, however, a more stringent exemption than cl 7 in two respects. First the degree of 'adverse effect' must be 'substantial', not just 'unreasonable' as in cl 7, and, unlike the position in respect of cl 7, it must be demonstrated that disclosure 'would, on balance, be contrary to the public interest'. Clauses 7(1)(b) and (c) have single-factor discretionary tests, in comparison with cl 15's two factor discretionary test, with a more stringent first element and a new second element. It can be seen that information which might, therefore, fall within the area of coverage of both cl 7(1)(b) and cl 15 might, ultimately, only win protection under cl 7(1)(c) and not under cl 15." 41 Ms Johnson submitted that the evidence establishes that the release of the documents would jeopardise the DET's ability to achieve a market value on the sale of the former BHHS site. This would have a substantial adverse effect on the financial or property interests of the DET. 42 In his submissions, Mr Cianfrano submitted that because the information in respect of which the exemption is claimed is already known, it is unlikely to have a substantial adverse effect on the DET's financial or property interests. Moreover, release of the documents is in the public interest. 43 Mr Peace and Mr Kennedy gave evidence that Landcom has withdrawn from the contract to purchase the former BHHS site. In the light of evidence from the Committee that information concerning the sale price agreed between the DET and Landcom is in the public domain as a result of other documents released to the Committee, papers produced pursuant to the Order for Production of the Legislative Council, and an article in the Daily Telegraph, and given that this sale - to another government agency - is not proceeding, I am not satisfied that the release of information about the valuation of the site will have a 'substantial' adverse effect on the DET's financial or property interests. This makes it unnecessary for me to consider whether the disclosure would, on balance, be contrary to the public interest. I will, however, refer to the public interest in considering exercise of the residual discretion, below. The Residual Discretion 44 In the NSW Supreme Court decision in McGuirk, at par 102, Nicholas J held: "s 63 ADT Act provides the Tribunal with the discretion to order access to be given to documents which are exempt documents under the FOI Act if it decides that to do so is the correct and preferable decision with regard to the material then before it." 45 His Honour cited with approval the Tribunal's decision in Mangoplah Pastoral Co Pty Ltd v Great Southern Energy [1999] NSWADT 93 ('Mangoplah'). In that decision, Smith JM, at par 85, referred to the need for the Tribunal "to consider all issues arising in the case in relation to whether a document should be released". Smith JM stated further: " 90. In general, whether there is occasion to exercise the override discretion must depend upon the particular exemption and the circumstances of the case. The statutory criteria for some exemptions themselves bring into balance all public interest considerations which could favour release or justify withholding. Other exemptions have more limited criteria. For these, satisfaction of the criteria provides a justification for withholding the document, but does not complete the decision-making. The decision-maker must decide whether there is something about the information itself or the surrounding circumstances which, bearing in mind the objects of the FOI Act and the rationale for any exemption which has been satisfied, persuades him or her that the exemption should not be claimed. The touchstone is whether withholding the document is "reasonably necessary for the proper administration of the Government" (s 5(2)(b)). 91. Framing the question in this way produces a need to locate special or overriding circumstances or interests before an exempt document is released, but only in the sense that some reason particular to the circumstances should be found for not claiming the exemption. I would not see the question as necessarily suggesting that such a release would be rare, unusual or exceptional. In some areas of government, there may be many documents which fall within an exemption but, for example, whose public interest in release is overwhelming, or whose potential for relevant damage is so obviously remote as to leave disclosure totally innocuous." 46 In submissions, Ms Johnson referred the Tribunal to the Victorian Court of Appeal decision in Department of Premier and Cabinet v Hulls [1999] VSCA 117 ('Hulls'). The Freedom of Information Act 1982 (Vic), s 50(4), provides a public interest override power, stating: "(4) On the hearing of an application for review the Tribunal shall have, in addition to any other power, the same powers as an agency or a Minister in respect of a request, including power to decide that access should be granted to an exempt document (not being a document referred to in s 28, s 31(3), or in s 33) where the Tribunal is of the opinion that the public interest requires that access to the document should be granted under this Act." 47 In the FOI Act there is no such provision, although a number of the exemptions require that the disclosure would, on balance, be contrary to the public interest (cl 9, cl 13, cl 14, cl 15 and cl 16). However, even with the benefit of an express power such as that contained in s 50(4), the Court of Appeal (Phillips JA with whom Tadgell and Batt JJA agreed) commented in Hulls, at par 55 - par 56: "55. ... The Act contains exceptions, exemptions and discretions, and each is entitled to full weight. Section 50(4) contains an "override" in specific terms and, as already mentioned, that subsection cannot be construed as authorising the tribunal to grant access to a document which is otherwise exempt merely if the tribunal is of opinion that it is in the public interest that the document be released. Yet, as I read the decision below, that is how the Act was understood in this instance. In recognising that there is a public interest in the dissemination of information which facilitates public debate, I think that the tribunal has failed to appreciate the significance of the documents being exempt in the first place. By reason of one section or another within Part IV, the departments were entitled to refuse access on the ground that the documents were exempt (and the tribunal had no power under s.50(4) to grant access unless of opinion that they were not exempt or that the public interest overrode the exemption). ... 56. ... Section 50(4) depends upon first a finding that a document is exempt under Part IV and then an opinion that the public interest is so strong as to demand that access be granted notwithstanding the factors which justify the exemption in the first place. 48 The Hulls decision is, in my opinion, instructive for two reasons. First, in cases where exercise of the residual discretion is in issue, the Tribunal must first consider whether particular documents are exempt under the Act, and only if it finds documents to be exempt should it then consider whether to exercise the residual discretion. Second, the discretion should only be exercised where there are strong grounds justifying the overriding of an exemption. In NSW, the public interest is a relevant matter in determining whether there strong grounds justifying exercise of the discretion, and this should be considered in the light of the objects of the FOI Act, set out in s 5 (see also Dezfouli v Department of Corrective Services [2007] NSWADT 25): "(1) The objects of this Act are to extend, as far as possible, the rights of the public: (a) to obtain access to information held by the Government, and (b) to ensure that records held by the Government concerning the personal affairs of members of the public are not incomplete, incorrect, out of date or misleading. (2) The means by which it is intended that these objects are to be achieved are: (a) by ensuring that information concerning the operations of the Government (including, in particular, information concerning the rules and practices followed by the Government in its dealings with members of the public) is made available to the public, and (b) by conferring on each member of the public a legally enforceable right to be given access to documents held by the Government, subject only to such restrictions as are reasonably necessary for the proper administration of the Government, and (c) by enabling each member of the public to apply for the amendment of such of the Government's records concerning his or her personal affairs as are incomplete, incorrect, out of date or misleading. (3) It is the intention of Parliament: (a) that this Act shall be interpreted and applied so as to further the objects of this Act, and (b) that the discretions conferred by this Act shall be exercised, as far as possible, so as to facilitate and encourage, promptly and at the lowest reasonable cost, the disclosure of information. (4) Nothing in this Act is intended to prevent or discourage the publication of information, the giving of access to documents or the amendment of records as permitted or required by or under any other Act or law." 49 Ms Johnson referred the Tribunal to discussion of the objects clause in the NSW Court of Appeal decision in General Manager, WorkCover Authority of NSW v Law Society of NSW [2006] NSWCA 84. McColl JA (with whom Handley and Hodgson JJA agreed) approved the approach adopted by the Full Federal Court in News Corporation Ltd v National Companies and Securities Commission (1984) 1 FCR 64, emphasising that a "leaning approach" should not be adopted when applying the provisions of the FOI Act. The approach to be taken is one of balancing the competing interests involved according to the words of the Act, bearing in mind the stated objects of the Act. Her Honour stated, at par 151: "The Full Federal Court's approach, in my view, accords with the s 5(3) obligation to interpret and apply the FOI Act so as to further its objects, bearing in mind that while the Act gives a legally enforceable right to be given access to documents held by the Government, that right is subject to such restrictions as are reasonably necessary for the proper administration of the Government: s 5(2)(a) and (b). Determining whether documents should be disclosed involves balancing those two matters. Thus, as Beaumont J said, testing whether disclosure of documents would be contrary to the public interest requires the decision-maker "to weigh the public interest in citizens being informed of the processes of their Government and its agencies on the one hand against the public interest in the proper working of Government and its agencies on the other: Harris v Australian Broadcasting Corporation (at 246)." 50 Ms Johnson submitted that the Tribunal should only exercise the residual discretion where, pursuant to s 5(2)(b) of the FOI Act, restrictions are not reasonably necessary for the proper administration of the Government. The Tribunal should also have regard to the balance struck by Parliament in providing for different categories of exempt documents. Ms Johnson disagreed with Smith JM's suggestion, at par 91 of Mangoplah, that the exercise of the residual discretion to order access to a document would not necessarily be "rare, unusual or exceptional". She submitted that the DET generally takes a liberal approach to the release of documents in terms of the public interest, and noted that the information in issue would be made available to the public (on the internet) once settlement of the sale of the 'buildings lot' component of the former BHHS site has occurred. 51 Ms Johnson suggested that the residual discretion might not apply in the case of documents found to be exempt under cl 1 because they are Cabinet documents. In my view, such an absolute exemption only applies in the case of a Cabinet document in respect of which the Minister, pursuant to s 59 of the FOI Act, has signed a certificate stating that the document is a restricted document. Otherwise, a document found to be exempt under cl 1 is subject to the residual discretion. However, in considering the exercise of the residual discretion in respect of such a document, account must be taken of s 5(2)(b) and whether or not such a restriction is reasonably necessary for the proper administration of government. 52 Mr Cianfrano submitted that the closure of BHHS is a matter of public interest and the Committee is concerned that the Government and its agencies have failed to follow proper procedures and comply with the requirements of the law. He contended that the Tribunal should exercise the residual discretion to order a full release of the relevant documents. The fact that disclosure of a document may cause embarrassment to or loss of confidence in the Government is irrelevant (s 59A of the FOI Act). Mr Cianfrano submitted that the Tribunal should consider all the circumstances of the case, including the impact on the local community of the closure of BHHS and the fact that the information at issue is already in the public domain. The buildings on the site no longer exist, so that the valuations in issue, which were of the site including buildings, are no longer as relevant. Indeed, as stated above, any competent valuer should be able to assess a bare land value for the site. 53 Turning then to whether I should exercise the residual discretion, in my view, there are some unusual aspects of this case. First, the price appearing in the draft contract for the sale of the former BHHS buildings lot by the DET to Landcom is in the public domain. Mr Cianfrano produced a copy of the first page of the draft contract released inadvertently in response to an FOI application requesting access to documents addressed to the Department of Commerce. Mr Cianfrano said the contract price was also revealed in papers produced to the Legislative Council and in an article that appeared in the Daily Telegraph. 54 Second, the contract for the purchase of the buildings lot has now been terminated by Landcom's withdrawal from the contract. Moreover, the contract price agreed appears to have been for the buildings lot with the existing BHHS buildings still in place. These buildings have now been demolished and the site will be offered for public tender as bare land. 55 Third, I am satisfied that there is a strong public interest in obtaining as much relevant information as possible concerning the operations of government in relation to the closure of BHHS and the sale of the buildings lot. 56 In these circumstances, I have formed the view that pursuant to the emphasis given in the objects clause of the FOI Act to the public obtaining access to information held by the Government, there are strong grounds for exercising the residual discretion for the release to the Committee of such exempt information as appears in the documents in issue that comprises purely a valuation of the site, remembering that the period in respect of which access to documents was sought was from 11 January 2000 to 28 February 2005. Having balanced the competing interests, I do not consider that the release of this information will have any significant adverse consequences for the proper administration of the Government. 57 However, such strong grounds do not, in my opinion, exist in the case of other exempt information relating to projected infrastructure and development costs and the estimated revenue generated by the sale of the buildings lot. This information is concerned with the process undertaken by government in determining the valuation of the assets and with the projections utilised in decision-making. I am satisfied that if this information were released, it could have adverse consequences for the proper administration of the Government and, in particular, for the process undertaken by Government Departments and agencies in the transfer and sale of government assets in order to achieve market value and the optimum benefit for the public. 58 In my view, the correct and preferable decision is that the exempt information that should be released pursuant to the exercise of the residual discretion is as follows: Document 2 : the property valuations for the BHHS site appearing on the three relevant pages. Document 3: the property valuation for the BHHS site appearing on p 2 of the document released to the Committee. Document 4: the property valuation for the BHHS site appearing in the second line of p 2 of the Panel briefing paper. Document 7: the property valuation for the BHHS site appearing near the top of p 2 of the GAMC agenda. Document 11: the property valuation for the BHHS site on p 2 and p 4 of the Report to GAMC. Document 12: the acquisition price for the BHHS site on p 1 of the document. Document 15: the purchase price for the BHHS site appearing on p 2 and p 3 of the documents released (p 1 and 2 of the Discussions/Decisions paper). Document 17: the acquisition price for the BHHS site at the bottom of p 1 and p 4 of the documents released. Document 19: the projected revenue for the DET expected from the sale of the BHHS site in 2004/05. Document 20: the acquisition price for the BHHS site on p 3 of the documents released. Document 21: the acquisition price for the BHHS site on p 3 of the documents released. Document 22, 23 & 24: the documents, setting out Estimated Asset Sales for Inner Sydney, should be released in part to show the estimated asset sale price for the BHHS site, with other material deleted, being outside the scope of the FOI application. Document 25: that part of p 2 of the documents showing the projected DET revenue from the sale of the BHHS site should be released, with other material deleted, being outside the scope of the FOI application. Sufficiency of Search 59 In Cianfrano v Director General, Department of Commerce & Anor (No 2)[2006] NSWADT 195, the President of the Tribunal, O'Connor DCJ, reaffirmed that where (1) the applicant places credible evidence or submissions before the Tribunal in support of an assertion that the agency has failed to conduct a thorough search for documents to which access was sought in the FOI application, and (2) the Tribunal is satisfied that there is an arguable case that the agency has, therefore, failed to properly determine the application and that, as a consequence, there has been a deemed refusal of the application (section 24(2) of the FOI Act), then (3) the Tribunal may give directions of a kind that will enable it to determine whether a deemed refusal has taken place. 60 The Committee questions the adequacy of the DET's search for documents in response to its FOI application and contends that not all documents within the scope of its application have been produced by the DET. For example, the Committee notes that documents 4 and 11 refer to other documents that are not listed in the Schedule. 61 Ms Johnson sought to rely on Mr Cheney's evidence as to the adequacy of the search conducted. Mr Cheney said he circulated an enquiry throughout the Treasury seeking the identification of documents relevant to the Committee's application. He denied that the search conducted was incomplete. 62 I have inspected the documents in issue, including documents 4 and 11. In my view, those documents do not indicate that attachments have been excluded. Bearing in mind Mr Cheney's evidence, I am not satisfied that the Treasury has failed to conduct a thorough search for relevant documents nor am I satisfied that there is an arguable case that the Treasury has failed to properly determine the application. Decision (1) The Tribunal affirms the decision under review in respect of the following documents: 5, 6, 8, 9, 10, 13, 14, 16 and 18. (2) The Tribunal varies the decision under review in respect of the following documents in accordance with these reasons: 2, 3, 4, 7, 11, 12, 15, 17, and 19 to 25. The release of additional material is to take place 28 days after the date of this decision.

Retain Beacon Hill High School Committee Inc v NSW Treasury

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Judgment (10 paragraphs)

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Legislation Cited (2)

Cases Cited (3)

Cited By (5)