Telstra Corporation Ltd v Independent Pricing & Regulatory Tribunal [2018] NSWCATAD 269 | Case summary

Should Document 1 (The BEM 2013 Report) Be Disclosed?

All the documents in dispute have been provided to the Tribunal in a confidential bundle.
The task of the Tribunal on review mirrors that of the administrator and is set out in s.13 GIPA Act. It is to determine on balance whether the public interest considerations in favour of disclosure are outweighed by the considerations against, giving appropriate weight to each of the relevant factors. Sec. 15 GIPA Act specifies certain principles to be applied in determining whether there is an overriding public interest against disclosure of government information.
The submissions of Telstra repeated the proposition that there is a general public interest in favour of disclosure of government information. Telstra submitted that its claim could be fortified by considering two other examples contained in s12 GIPA being: 1. that the disclosure of the information would contribute to open public debate of government policy; and 2. that disclosure of the information would permit the checking of improper or unlawful activity by government.
Telstra submitted that in addition to the general public interest in favour of disclosure that significant weight could be attributed to the desirability of disclosure promoting open discussion of public affairs, government accountability and discussion of matters of public importance. They draw attention to the amount of revenue derived by government from Crown leases particularly of telecommunication facilities and say that without the BEM confidential annexure it is not possible to see the basis of the BEM analysis. It may be true that unlike sales evidence which is often public information, finding the levels of rent is difficult because it is not public information. Although it might be thought that informed debate could be somewhat assisted by knowing rentals that are paid, there are countervailing factors which include the fact that there is not complete or anything near complete transparency about levels of rent and in particular there are various other types of Crown leases with various other considerations to be borne in mind such as tollways, pastoral leases, seabed leases, mining leases, exploration leases etc. The Tribunal recognises that tower rents are likely to be not insignificant to the applicant, which may feel that public discussion of the topic could be useful to it. I would place only moderate weight on this consideration as I also consider that there would be only limited interest in public discussion of this question even though the rents are passed through indirectly to consumers of telecommunication services.
The applicant Telstra also draws attention to the factor that disclosure of the government information could reasonably be expected to reveal or substantiate that an agency has engaged in misconduct, negligence, improper or unlawful conduct. Telstra says that this factor should be afforded significant weight. It drew attention to the Victorian and Queensland cases (Bayside City Council v Telstra Corporation Limited (2004) 216 CLR 595; and Telstra Corporation Limited v Queensland [2016] FCA 1213) where the charging regimes were held to be inconsistent with clause 44(1) of schedule 3 to the Telecommunications Act (Cth) 1997 which nullifies provisions of State or Territory law which has the effect of discriminating against a carrier, a particular class of carriers, or carriers generally. Although Telstra said there was no issue of cl.44(1) in this case, it submitted that the clause and authorities provided context for the GIPA application and may inform the public interest considerations.
I am unable to accept that the making of recommendations for levels of fees involves anything which could be regarded as unlawful, improper, negligent or an example of misconduct as referred to in s.12 GIPA Act. In my view these expressions relate to matters which involve some sort of blameworthy behaviour on the part of the relevant agency, not something which may at best be invalid or beyond power. I do not accord any weight to this consideration.
Mr McKernan gave evidence for the applicant. At paragraph 57 of his affidavit he stated that it was not apparent how IPART and BEM had determined the recommended fee levels and that Telstra wants access to the confidential annexure to understand how fee levels were determined by IPART and to review the lawful administration of Crown leases to telecommunications carriers.
Section 105 of the GIPA Act provides that the onus is on the agency to justify its decision to refuse access to documents.
Mr Montague of BEM provided evidence on affidavit. He was involved in both assignments for IPART. The evidence was to the effect that BEM would be reluctant to work in future with IPART if assurances about confidentiality could not be given. BEM understood that the information it provided to IPART would be kept confidential and that IPART would not disclose it without BEM's consent. BEM had obtained information from various market participants on the basis that that information would also be used for IPART'S reviews and would be held in confidence. Mr Montague annexed an email dated 29 November 2012 from IPART to various market stakeholders seeking information to assist BEM, stating that the information provided to BEM would have its confidentiality protected. He said that BEM could not have obtained the information without an assurance of confidentiality, and that site rental evidence is hard to obtain. He also said that the confidential nature of the information was not limited by time. Mr Montague said that he was not familiar with the provisions of GIPA. In cross-examination Mr Montague was taken to various references to GIPA which related to requests by IPART to BEM for quotation for consultancy work. There was no explicit GIPA warning regarding information provided to BEM to enable it to provide its report.
Mr Montague stated that some information was held by BEM from previous assignments with other clients and disclosure would have detrimental impact on BEM's ability to act as a trusted advisor on rental negotiations. He also said that BEM's professional reputation would be adversely affected as it would be seen in the market as having breached confidentiality if the information sought by Telstra was disclosed. He also said that even if the information was de-identified the actual sites could in certain circumstances be identified where there are few similar sites.
Mr Montague was taken to the ACMA location maps for Orange, Wollongong, Northern Suburbs of Sydney, Eastern Suburbs of Sydney and it was obvious that it would not be possible in those areas to be able to identify from de-identified information as requested who the users of various telecommunications facilities were because they were so numerous, however in low density regional and remote areas this would be more straightforward.
My assessment of Mr Montague's evidence and the strength of the various factors is that I doubt that BEM would not apply to work for IPART again. I think it is a strong argument that the information was provided to BEM by stakeholders in confidence. I think there is a fairly strong risk that BEM could suffer reputational damage if the information was released. I regard it as a neutral factor that BEM should have known that GIPA could apply.
Both open and confidential affidavits were filed by two senior IPART officers. Ms Brakey was involved in both IPART reports, and Mr Mansell was involved in the 2013/2014 report.
In Ms Brakey's open affidavit in relation to BEM she notes that it can be difficult for IPART to engage experts to provide consultancy advice because of conflicts of interest encountered.
In 2005 she says it was difficult to find an adequate consultant who was not conflicted and that BEM was engaged due to their experience in the field.
She says that the assistance, information and consultancy services provided by external experts is important to IPART's activities.
If there is disclosure of confidential material she considers that it will be more difficult for IPART to engage experts in the future because those experts will be less willing to communicate if they perceive that the information will be treated as confidential. As a result IPART may have more difficulty in performing its functions conducting its reviews, and the quality of decision making and recommendations could suffer because prices may be set in an inefficient and distortionary way due to a lack of information.
Ms Brakey was not cross-examined on her affidavits.
Mr Mansell's open affidavit states that his understanding was that information provided by BEM in the market evidence confidential annexure to the BEM report for 2013/14 was commercial in confidence and there was an understanding between IPART and BEM that the information in the confidential annexure would not be made public. In his view he considers that release of the information would be likely to affect IPART's ability to obtain similar information in the future.
In his confidential affidavit he says that the majority of the leases recorded in the BEM confidential annexure are still on foot and some have rights of renewal so that the information is of high commercial sensitivity.
Mr Mansell was cross-examined on his affidavits and stated that BEM was the primary source of market information for the 2014 report. He was taken to various places in the documentation where market participants and BEM were warned that GIPA applied but it is to be noted that IPART while warning of GIPA stated that it would make every effort to protect the confidentiality of the information.
IPART in its submissions addressed each of the factors or considerations set out in the Table of s14 in some more detail.
The first question is whether disclosure would be reasonably expected to prejudice the supply of confidential information to the relevant agency which assists it to effectively exercise its functions at a general operational level, taking into account the manner in which it conducts the service into which the information was received, at the point of receipt, given what community expectations are. (See Commissioner of Police NSW v Camilleri [2012] NSWADTAP 19). Commercial information is obviously very useful to IPART in performing its functions, and a perception of loss of confidentiality of such information would disturb the community providing it and could, in my view, be seen as reasonably likely to negatively affect the supply of confidential information (Flack v Commissioner of Police NSW [2011] NSWADT 286 at [52]). The views of Ms Brakey and Mr Mansell are to be given considerable weight as senior public servants who have experience in this area and could rationally consider that disclosure could prejudice IPART obtaining information of the kind provided by BEM or other market participants in the future (Transport for NSW v Searle [2018] NSWCATAP 93). This could include both consultant experts and other agencies and commercial entities, and affect other enquiries by IPART.
I can be satisfied that the usual understanding between IPART and its consultants is that the information flagged as confidential is to be treated as confidential unless there is some agreement to release of the information or its release occurs under the GIPA Act. I agree that the "flow of full and accurate information" from expert consultants and players in relevant markets is important for IPART to be able to function as required, and that if it was not able to keep commercial information confidential then there is likely to be a restriction in the amount of information that persons will provide to IPART. A consequence could be recommendations of reduced quality. Both IPART witnesses have expressed the view that disclosure of the BEM information would prejudice the supply of future confidential information by consultants. This seems to me to be a rational conclusion. It is supported by the evidence of Mr Montague from BEM and it is a reasonable inference from the circumstances under which IPART obtains information and conducts its activities. IPART is reliant upon submissions and information from stakeholders who are often in market competition and supply confidential information for IPART's use alone. There was evidence of a number of submissions being made in the 2005 and 2013/14 inquiries on a confidential basis and such information is treated within the walls of IPART as having confidential status by refraining from publishing any confidential information and storage separately in IPART's document management system.
It is to be noted that IPART when its conducting a review under s9 of the IPART Act has no power to compel the provision of information and must rely on voluntary provision of information.
The case of Transport for NSW v Searle [2018] NSWCATAP 93 establishes that the views of senior public services expressed on a rational basis are to be accepted as relevant to establishing prejudice for the purposes of Clause 1(d) Table to s14 GIPA.
Overall I would accord significant weight to the submissions by IPART on this factor as they are supported by evidence and logic.
Telstra makes the following submissions in relation to these public interest considerations against disclosure. As to the alleged prejudice to the supply of confidential information Telstra identifies that to some extent this is hypothetical and deserves a sceptical consideration. That approach puts the test bar a little too high, in my view. The test of what can be "reasonably expected" is always forward looking, and in that way hypothetical, and requires objective consideration. Scepticism can bleed over into cynicism.
Telstra points to the fact that providers of information including BEM were warned of the potential that information may have to be disclosed under the GIPA Act. Telstra also draws attention to the "drift" in the strength of BEM's expression of reluctance to take on another commission from IPART if confidentiality is not respected. There is some substance in this point. I doubt that BEM would not bid for the work. It would probably be more circumspect however in its reporting arrangements. Telstra also says that there is no evidence of a new IPART review but I regard this as not relevant. Telstra also drew attention to the age of the information. Although the information is about 5-6 years old, Mr Mansell said in his confidential affidavit that his enquiries indicated that lease arrangements from that time are still on foot. Telstra also states that there was, in any case, a general unwillingness to provide market information to IPART whether confidentially or in open submissions. I do not consider much turns upon this. It should not be made harder for IPART to get information, if one would reasonably expect this. Nor am I convinced by Telstra's argument that in other circumstances IPART could compel the production of information. These enquiries were conducted under s. 9 of the IPART Act where information is provided voluntarily. Continuation of this approach is IPART's preference, as a compulsory approach (which is available under s.22 IPART Act) would, I infer, require protective mechanisms, and lead to delay, resistance and complications.
Balancing the various considerations, the Tribunal concludes that the public interest against disclosure on this ground, outweighs the public interest in favour. It is to be reasonably expected that IPART could have more difficulty obtaining confidential information, which would impede its functions if it cannot maintain confidentiality. This is sufficient to dispose of this aspect of the case, but I go on to consider the other grounds and arguments for and against as some of them are more relevant to other documents.
As to whether the question of whether or not release of this document would prejudice the effective exercise of the agency's functions (clause 1(f) Table s14 GIPA Act) it is to be seen that an important part of IPART's functions is to consult with stakeholders and expert consultants as part of the development of reports to the government. The usual practice is for IPART to release an issues paper and invite submissions which can be public or confidential; then there is a workshop or round table at which interested parties and participants can share their views; then there is a draft report by IPART which is circulated and further submissions are invited and can be public, confidential or a mixture. Although persons are on notice of the potential for the GIPA Act to apply, no doubt there is comfort in IPART giving assurance that it will use its best endeavours to maintain confidentiality. IPART is very largely dependent for its information on the willingness of government agencies, commercial stakeholders and external consultants to provide it with information in performing its functions. Obviously, the better the quality of the information, the better the agency can function. The voluntary provision of information is preferred by the agency over invocation of powers to compel provision of information (which can in certain circumstances apply to IPART) for reasons discussed above. I regard the arguments of IPART on this ground to be quite compelling.
Telstra makes the point that there is an overlap between this factor and the prejudice to the supply of confidential information factor (clause 1(d)) and warns that this should not lead to over-attribution of weight to the factors. This is a reasonable point and warning. Telstra also suggests that due to the volume and nature of the public submissions that the agency can obtain a considerable amount of information to assist its decision-making. But this does not take adequate account of the value of commercial-in- confidence information as a resource for the agency. Finally it is suggested that stakeholders are willing to provide information but in my view it is likely that they will be wary in providing any market sensitive confidential information.
The conclusion once again is that on balance the public interest against disclosure outweighs the alternative.
Turning to clause 1(g) the consideration of whether or not disclosure could result in making public information provided in confidence, it would comfortably be able to be said that this is a reasonable expectation given that IPART wrote to market participants requesting that they provide information to BEM and that it would be held on a confidential basis. BEM's evidence was that it also had its own sources of confidential information from its own clients. In my view, it is not necessary to go back to each one of those parties to see whether they would be prepared to waive the duty of confidence. This would make the administration of the provisions administratively very cumbersome.
As to the consideration against disclosure that the information has been provided in confidence Telstra makes the point that BEM and stakeholders in the telecommunications review were given a GIPA warning. They do not address the issue that BEM had other information obtained during its business activities which was of a confidential nature and Telstra also says that to the extent that information was provided confidentially it was in some way conditional confidentiality. This does not seem to be a particularly strong argument particularly if there is little specificity as to the terms of any conditions. Telstra also draws attention to the age of the information but the evidence was that some arrangements in 2013/2014 were still on foot. These can be clearly regarded as involving commercial-in-confidence information. Telstra does say that the email sent out to participants asking for cooperation with BEM and assuring confidentiality was not enough to establish that any communication was necessarily on a confidential basis. Although as a general statement this might be right it is a fair inference that having been assured of confidentiality any stakeholder is likely have taken into account the representation about confidentiality contained in the IPART email.
Finally we turn to the question of whether or not the release of the information could reasonably be expected to prejudice a person's legitimate business, commercial, professional or financial interests (Clause 4(d)).
The evidence from BEM is that its commercial interests would be prejudiced by release of this information due to clients being unwilling to engage them if they are aware their information was not maintained confidentially. This may be somewhat overstated, but client perceptions are important. BEM says it may suffer detriment in obtaining commissions to act as trusted advisor in negotiations, and BEM's reputation as a professional valuation business could also be affected. These are legitimate concerns, but I apply only moderate weight as the information requested is to be de-identified. Also it is open to infer that the commercial entities who provided information to BEM could have their commercial, business or financial interests affected since these market participants are commercial competitors to Telstra and with each other. Once again de-identification should take much of the sting out of this concern. Crown land agencies may also have their commercial, business and financial interests affected as they are the landlords. This may have more substance to it but there is a lack of evidence that assists in assigning weight.
As to the factor of prejudice to business, commercial or financial interests telling against disclosure of the information Telstra says that what must be considered is whether there is a risk of real and substantial grounds of prejudice to business, commercial or financial interests. Although they say that Mr Montague's evidence does not reach that standard, in my view it would be reasonable to expect that there would be some real prejudice to BEM's relevant interests if the information were disclosed. BEM would lose credibility in the market if it could not be seen to maintain client and stakeholder confidentiality. Telstra says that in effect BEM's information has been reflected in the fee schedules which were recommended by IPART in the 2013/14 report and although that may be broadly accepted, there is still the level of detail in Document 1 which could provide insight into commercial confidential information. If this was brought out into the daylight it could prejudice not only BEM but other sources of information such as stakeholders and BEM's other clients. This would have an impact both on BEM and its business interests and reputation and on the confidential commercial information of other stakeholders and BEM's clients.
Overall, I find that while the evidence of prejudice is not overwhelming it is sufficiently persuasive to tip the balance against disclosure.

Should the redacted part of Document 6 be released?

Document 6 is a briefing paper by the IPART Secretariat to the Tribunal dated 28 April 2005. It is stated to contain confidential information and the (redacted) attached price schedule is marked confidential. Apparently the schedule was derived from confidential information provided by Crown land management agencies. Ms Brakey attests that she has searched for the relevant correspondence unsuccessfully but states that her experience was that in liaising with stakeholders IPART would agree to treat information "revealing commercial negotiating positions and granular information about price categories which is not already public as confidential, and not publish it." She also says that IPART observed this agreement in practice.
Ms Brakey says in addition that submitters to the 2005 review were expressly told they could submit on a confidential basis. She says that IPART tries to be as transparent as possible by summarising or aggregating de-identified confidential information when it can, and if they consider there is a strong public interest in publishing the information they will contact the submitter to seek permission before releasing anything confidential.
She also stated that it is administratively much more convenient to integrate confidential information into Tribunal briefings, rather than to split those briefings between public and confidential material. Also mention is made of potential prejudice to other market participants if their site rental details are able to be deduced from the confidential material.
In my view the grounds against disclosure are established in respect to this document. It is clear to see that disclosing the document could be reasonably expected to result in the disclosure of information provided to an agency in confidence, and potentially prejudice the supply to an agency of confidential information that facilitates the effective exercise of that agency's functions. The Tribunal regards these matters as substantive and only lightly eroded by the age of the information in the document. The obligation to maintain confidentiality of information supplied in confidence is, without more, virtually permanent, and is very relevant to a continuing supply of confidential information. If information suppliers do not have confidence that their commercially sensitive information will be protected they will be very reluctant to supply it, and sources of information useful to IPART will dry up. That will also be reasonably likely to prejudice the effective exercise of the agency's functions.
In her open affidavit of 10 August 2018 Ms Brakey states that certain briefings for the 2005 review contain confidential information provided by stakeholders or by BEM. Information provided by BEM is not relevant to this document or to to the later documents under consideration, because the firm had not yet been engaged.
Balancing these factors against those favouring release of the information I find that on balance the public interest considerations against disclosure outweigh those in favour.

Telstra Corporation Ltd v Independent Pricing & Regulatory Tribunal

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Judgment (12 paragraphs)

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Cases Cited (3)