Decision
X Solicitors on behalf of a Receiver and a Mortgage company and Kildare County Council (the Council)
From Office of the Information Commissioner (OIC)
Case number: 190064
Published on
From Office of the Information Commissioner (OIC)
Case number: 190064
Published on
Whether the Council is justified in deciding to grant a request for records concerning notices issued by the Council under section 12 of the Local Government (Water Pollution) Act 1977 as amended
31 May 2019
This review arises from a decision made by the Council to grant access to records on foot of a request to which section 38 of the FOI Act applies.
Section 38 applies to cases where the FOI body has formed a view that the record(s) in question are exempt under section 35 (confidential information) and/or section 36 (commercially sensitive information) and/or section 37 (personal information) but that the record(s) should be released in the public interest.
Where section 38 applies, the FOI body is required to notify an affected third party before making a final decision on whether or not the exemption(s), otherwise found to apply, should be overridden in the public interest. The requester, or an affected third party, on receiving notice of the final decision of the FOI body, may apply directly for a review of that decision to this Office.
I set out Some background information to put this review and my decision into context. Mr Z is the registered owner of a property. In 2011, he noticed an oil spillage at the property. He engaged experts and took other steps. The Council was informed of the pollution in 2017 and in September 2017, it issued a notice to Mr Z under section 12 of the Local Government (Water Pollution) Act 1977 as amended (a section 12 notice). By this time, a mortgage company had appointed a receiver over the property. In December 2017, the Council issued section 12 notices to the receiver and the mortgage company. Very generally speaking, each section 12 notice requires the party to whom it is issued to take steps to prevent further contamination and to implement a remedial works programme.
On 26 September 2018, Mr Z made an FOI request to the Council for records relating to the property, including the section 12 notice and related documents. The Council decided on 2 November 2018 to refuse the request under various provisions of section 32 of the FOI Act (law enforcement and public safety). Mr Z sought an internal review on 28 November 2018. The Council told him on 19 December 2018 that it was annulling its earlier decision. It granted him access to some records and refused access to others under section 31(1)(a) (legal professional privilege) on the basis that they contained legal advice. The Council told Mr Z that it considered the remaining records covered by his request to be exempt under section 35(1)(a) (confidential information) but, as there may be a public interest in their disclosure, it was consulting third parties whose rights would be affected by granting access to the records concerned.
On 20 December 2018, the Council consulted with the third parties under section 38 of the FOI Act. they did not respond. On 24 January 2019, the Council decided to grant access to the records concerned. On 6 February 2019, the third parties' solicitors (the applicant) made an application to this Office for a review of the Council's decision.
I have now decided to conclude my review by way of a formal, binding decision. In carrying out my review, I have had regard to the above exchanges and to correspondence between this Office, the Council, the applicant and Mr Z. I have had regard also to the records considered by the Council and to the provisions of the FOI Act.
This review is confined to whether the Council's decision to grant access to the records the subject of its section 38 consultation process is justified under the FOI Act.
A review by this Office under section 22 of the FOI Act is de novo in that it is based on the circumstances and the law as they apply on the date of the decision. Furthermore, granting access to a record under FOI effectively places the record concerned in the public domain since no restrictions can be placed on the applicant in relation to disclosure of the information in the record.
The applicant says that the records are exempt under sections 35(1)(a) (confidential information) and/or 36(1)(b) (commercially sensitive information) and that the public interest does not require access to be granted to them. I will consider section 36 at the outset.
Section 36(1)(b) - general
Section 36(1)(b) requires the refusal of access to records containing certain types of information whose disclosure could reasonably be expected to result in material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of the person in the conduct of his or her profession or business or otherwise in his or her occupation. The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release.
The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable.
The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the "could reasonably be expected" test in the first part of this exemption. However, this Office takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
In the High Court case ofWestwood Club v The Information Commissioner [2014] IEHC 375 Cross J. held that it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice their financial position. Furthermore, a general prediction without any supporting evidence is not sufficient to satisfy the requirement that access to the record could reasonably be expected to result in the outcome envisaged. In the Supreme Court case ofSheedy v the Information Commissioner ([2005] 2 I.L.R.M. 374, [2005] 2 IR 272, [2005] IESC 35) Kearns J. stated that "[a] mere assertion of an expectation of [prejudice] could never constitute sufficient evidence in this regard”.
Section 36(1)(b)
The records at issue, which include expert reports, are largely concerned with the steps the receiver is taking further to the section 12 notices. The applicant says that the records have commercial value for the experts and may also be used by third parties to formulate an offer for the property having regard to details about the works that have been and will be carried out on it. Further to these arguments, the Council says that prospective buyers would base their bids for the property on public information such as media reporting or public registers. It accepts that the content of the records could further inform purchasers' bids to a significant degree. It now considers that section 36(1)(b) applies.
Mr Z says that his name remains on the property and the section 12 notice and that the Council may prosecute him if the receiver does not clean up the site properly. He says that he should have received the records as a matter of course. He says that he needs to show them to his own experts to ensure that he is not sued and that the environment is protected. He says that the receiver will not engage with him. He takes issue with the quality of the work of the experts appointed by the receiver. He says that the reports do not contain commercially sensitive information about those experts' work processes, which he says are based on widely used and recognised technologies and standard assessments that are in the public domain.
I understand that a receiver's duties include getting the best price for assets being sold. I accept that disclosure of information that might impact on its ability to maximise a sales price for the property could prejudice its competitive position in this regard, which also has financial implications for the mortgage company. I find that the records are exempt under section 36(1)(b) for this reason. Accordingly, there is no need for me to consider whether the records comprise commercially sensitive information about the experts who carried out the works on behalf of the applicants.
I should also say that I do not consider it in keeping with section 18 of the FOI Act to direct in this particular case that access be granted to those (relatively small) parts of the records that concern only the Council's actions in relation to the pollution issue. Section 18(1) provides, that "if it is practicable to do so", access to an otherwise exempt record shall be granted by preparing a copy, in such form as the head of the public body concerned considers appropriate, of the record with the exempt information removed. Section 18(1) does not apply, however, if the copy provided for thereby would be misleading (section 18(2) refers). The Commissioner takes the view that, generally, neither the definition of a record nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from a withheld record for the purpose of granting access to those particular sentences or paragraphs.
Section 36(3) - the public interest
I do not consider that any of the exceptions to section 36(1), as set out in section 36(2) of the FOI Act, apply in this case. Section 36(3) provides that subsection (1) does not apply where the public interest would, on balance, be better served by granting than by refusing to grant the FOI request.
On the matter of where the public interest lies, I have had regard to the comments of the Supreme Court inThe Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v The Information Commissioner [2011] 1 I.R. 729, [2011] IESC 26) (the Rotunda case). It is noted that a public interest ("a true public interest recognised by means of a well known and established policy, adopted by the Oireachtas, or by law") should be distinguished from a private interest. Although these comments were made in relation to another provision of the FOI Act, I consider them to be relevant to consideration of public interest tests generally.
Furthermore, McDermott J., in his December 2016 judgment in the case ofF.P. v the Information Commissioner [2014 No. 114 MCA] said that private as opposed to public interests were not a sufficient basis upon which to exercise the discretion in favour of the appellant under the relevant public interest test in that case. He also said that "the ‘public interest’ in granting access is not to be determined on the basis of the appellant’s personal circumstances or desire to explore or pursue civil proceedings or criminal complaints.” This judgment was upheld by the Court of Appeal in its judgment delivered on 30 January 2019 in F.P. v Information Commissioner [2019] IECA19. Thus, I cannot take into account the applicant's private interests in gaining access to the records.
Further, I do not believe that is it appropriate for me to direct that access should be granted to the records on the basis that Mr Z is unhappy with the receiver's actions. The FOI Act recognises a public interest in ensuring that FOI bodies are open regarding, and may be held accountable for, the performance of their functions. However, this does not necessarily mean that it is appropriate for me to direct that the records should be disclosed simply because Mr Z may feel that the Council has not dealt fairly with him. Furthermore, while the public interest in openness and accountability is entitled to significant weight when the constitutional rights of individuals may be affected by the actions of public bodies, it is important to bear in mind that these records are not solely concerned with the actions of an FOI body.
I accept that a public interest in the availability of environmental information is recognised by law. While I note the applicant's comments on the scale of the pollution, this does not of itself require that access must be granted under the FOI Act to the records.
On the other hand, section 36(1)(b) reflects a public interest in the protection of records containing information that could prejudice a private company's competitive position in the conduct of its business or its negotiations. This Office takes the view that the FOI Act was designed to increase openness and transparency in the way in which FOI bodies conduct their operations and that the Act was not designed as a means by which the operations of private enterprises were to be opened up to scrutiny. In the circumstances of this case, it also seems to me that the Act was not intended to impact on the ability of receivers to perform their functions. Arrangements between private companies and their clients are commercial arrangements that do not involve expenditure of public funds.
In summary, the records disclose information about pollution and the environment and a limited amount of information about the Council's actions in this regard. However, they are largely concerned with the steps being taken by the receiver to address the matter and their disclosure to the world at large could impact on the receiver's ability to maximise the property's sale price. The applicant is already aware to some extent of the actions taken by the Council in relation to the pollution from his own involvement in the matter and the copies of the section 12 notices already released. On balance, I consider that the public interest would, on balance, be better served by refusing than by granting the records concerned.
Having carried out a review under section 22(2) of the FOI Act, I hereby annul the Council's decision to grant access the records. I find that they are exempt under section 36(1)(b) of the FOI Act and that, on balance, the public interest would be better served by refusing than by granting the request.
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Elizabeth Dolan
Senior Investigator