CITATION: Fomiatti v University of Western Sydney (No 2) [2006] NSWADT 210 This decision has been amended. Please see the end of the decision for a list of the amendments. DIVISION: General Division APPLICANT PARTIES: Luke Fomiatti RESPONDENT University of Western Sydney FILE NUMBER: 053285 HEARING DATES: 01/02/06, 16/03/06 SUBMISSIONS CLOSED: 05/11/2006 DATE OF DECISION: 07/17/2006 BEFORE: Wilson R - Judicial Member CATCHWORDS: access to documents - confidential material - Freedom of Information Act - access to documents - confidential material MATTER FOR DECISION: Principal matter LEGISLATION CITED : Freedom of Information Act 1989 CPWB v Collector of Customs (1987) 14 FCR 434 CASES CITED: Doherty v Allman (1878) App Cas 719 PSA & PO Association v Director-General Premier's Department [2002] NSWADT 277 Re B & Brisbane North Regional Health Authority (1993) QAR 27 APPLICANT In person REPRESENTATION: RESPONDENT J Oakley, barrister ORDERS: 1. The determinations of the Respondent are set aside in both matters and in substitution therefore it is determined that the four document under review are exempt documents within clause 13(a) of Schedule 1, Freedom of Information Act 1989 (NSW); 2. The several documents in exhibit R2 item 12, being the confidential documents filed by the Respondent, are not to be released without further order. REASONS FOR DECISION 1 The Applicant has brought these proceedings pursuant to the provisions of the Freedom of Information Act 1989 seeking to review a determination made by the Respondent refusing access to documents, both wholly and in part. 2 During the course of preparing these proceedings for hearing further documents were discovered which had not been dealt with by the Respondent at the time of its internal review decision which is under review (see exhibit R2, item 5). Exemption is also claimed for these particular documents. By agreement between the parties these documents have been included for consideration by the Tribunal in these proceedings. The Tribunal will adopt the course suggested by the parties, no jurisdictional issues being apparent to the parties, nor to the Tribunal, it being common ground that these documents fall within the relevant FOI application. However, to the extent necessary, leave was granted to the Applicant to commence proceedings in the Tribunal, in relation to the review of these documents, forthwith by oral application when the matter came on for hearing. A direction was then made that this fresh matter be heard together with the proceedings listed for hearing that day. Should any jurisdictional issue arise, the Applicant will file an appropriate written application. The Tribunal notes that the parties prepared these proceedings upon the basis that these newly discovered documents would be the subject of argument and determination in the proceedings on foot. 3 The documents subject to exemption claims were, initially, six in number, including the particular documents referred to above, each document being made up of several folios. At the commencement of the hearing the parties informed the Tribunal that two of these six documents, nominated as "Schedule 1" and "Schedule 3", were no longer in issue. The Applicant agreed that this was the position. In submissions the Respondent described the four documents remaining in issue as being "the 2000 contract", "the 2003 variation", "the 2005 contract" and "schedule 4". The second and the fourth documents are contractual variations of the first. The third document is a proposed agreement that was never executed. The Applicant, by reason of the terms of his application for access and the documents that have been released to date, is already aware that these documents concern the employment agreement between the Respondent and its Vice-Chancellor. No issue of confidentiality on this aspect arises so as to limit the Tribunal's publishing of its reasons for decision. THE 2000 CONTRACT 4 Exemption is claimed in relation to those parts of "the 2000 contract" which have been marked with red ink in the copy document that has been filed as a confidential document within Exhibit R2 (Item 12). The unmarked portions of that document have been released. Exemption from release is claimed with respect to the address appearing on page 1, parts of clauses 6, 7, 8, 9,10 and 14 and the note appearing on page 3. The document was executed by the Respondent and its Vice-Chancellor sometime in the year 2000, the day and month not being recorded in the jurat. It is a contractual document. The title page bears the date 28 August 2000. The document contains provisions dealing with the obligations of the parties thereto in relation to the Vice-Chancellor's employment with the Respondent. Clause 24 provides that both parties "will not disclose any of the details of this agreement other than by mutual agreement or if required by law". The first issue is whether this document contains matter the disclosure of which would found an action for breach of confidence so as to fall within clause 13(a) of Schedule 1 to the Freedom of Information Act 1989. The Respondent argues that it does, and relies for this purpose primarily upon the provisions of clause 24 thereof (see the Respondent's submissions filed 15.03.06, paragraph 16). 5 Absent any mutual agreement between the parties to the contract to release the document, and any requirement in law to disclose it to a third party, it is clear that either party to the agreement could, by appropriate legal proceedings, restrain its disclosure in the event of a threatened act in breach of this particular obligation. The proceeding would be one seeking specific performance of clause 24 by way of an injunction against the doing of the threatened act. The argument so formulated does not invoke the particular principles, known to equity alone, whereby a Court of Equity will act so as to protect confidential information, for which see CPWB v Collector of Customs (1987) 14 FCR 434 (at 443), but rather is based upon those principles of law and equity whereby a confidence is protected by contract. These principles will protect a confidence irrespective of its nature, save in the case of iniquity when judicial discretions apply, because the parties have agreed to keep the confidence secret in a way that is contractually binding upon them. 6 The question is whether clause 13(a) of Schedule 1 embraces the situation where parties to a contract are bound to keep secret its provisions. If it does, the release of parts of this particular document to date would not defeat the claim for exemption, as the Act envisages that parts of an exempt document, even one that is exempt in toto, may be released where it is appropriate to do so. Equally, clause 24 of the contract permits disclosure by agreement so that any information so disclosed would not be the proper subject of a specific performance application. 7 Clause 13(a) has application where disclosure of matter contained in a document would found an action for breach of confidence. The act of disclosure referred to is hypothetical and is not the act of the Agency in releasing the document. In the present case, no information in the contract may be disclosed by either party in the absence of consent or legal compulsion. An act of disclosure in such circumstances would found an action, at law, for breach of contract. In such proceedings a plaintiff could seek damages for the breach, a declaration that the disclosure was in breach of the contract, an injunction to restrain any threatened act of disclosure and specific performance of clause 24 itself. The injunction is, for present purposes, the most important of the remedies as it will restrain breach of a negative stipulation in a contract. It is clearly available to the hypothetical plaintiff in these circumstances, given the long line of authorities dating back to Doherty v Allman (1878) App Cas 719 (at 720). The words of clause 13(a) are meant to have application in circumstances where an Agency is considering whether access should be granted or declined upon the basis that the granting of access would found an action for breach of confidence. Consequently, the issue will, in administrative steps under the FOI Act and in proceedings in this Tribunal, invariably arise in circumstances where the act of disclosure has not yet occurred. However, the words of clause 13(a) are such that they suggest that an administrator, and this Tribunal, should assess the question as if the act of disclosure had in fact occurred. This may well affect the remedies available to a plaintiff. Upon this basis, for example, it could be argued by an Applicant that the remedy of specific performance would no longer be available to a plaintiff with respect to the act of disclosure in issue, that act having already occurred hypothetically. This is the first uncertainty that needs to be addressed. 8 The second uncertainty is that clause 13(a) does not specifically reveal who the defendant in the hypothetical action for beach of confidence would be. In a case involving clause 13(a) the agency may well not be a party to the contract under consideration. Should such be the case, and should the Agency in fact grant access to the document, it could not be a defendant in proceedings alleging a breach, or threatened breach, of an express confidentiality clause in a contract between others. Equally, the other party to the contract could not be a proper defendant as that party has neither taken nor threatened action in breach of the clause. This issue may of course not be critical to these proceedings as the Agency is in fact a party to the contract for which access is sought. However, for clarity it should be considered. 9 Clause 13(a), on a broad interpretation, permits an Agency to claim exemption from release of a document where to release it would disclose information that the law protects from disclosure by providing an appropriate remedy, at law or in equity. All it requires is that the parties to the confidence, whether they be parties to a contract or "parties" to the equitable confidence, are bound at law or in equity to keep the confidence secret. If they are not, clause 13(a) will not have application. Whether the Agency, who has possession of the document, is such a party is irrelevant to the issue. Further, on this broad interpretation, it is permissible for an Agency to consider and assess the causes of action and remedies available upon the premise that disclosure is only threatened as well as upon the premise that there has been an actual disclosure. This interpretation means that the Agency may apply clause 13(a) to protect the confidences of others, which in fact appears to be the essential purpose of clause 13(a). The words of clause 13(a) permit this broad interpretation. The majority judgments in CPWB v Customs (op cit) suggest that this is the correct construction. A similar approach has been adopted under Queensland FOI legislation in Re B and Brisbane North Regional Health Authority (1993) 1 QAR 27, which has been considered without disapproval in this jurisdiction (PSA & PO Association v Director-General Premier's Department [2002] NSWADT 277). 10 The several judgments in CPWB v Collector of Customs (op cit) of course only mention the contractual protection of a confidence in passing. The Court was there considering Commonwealth legislation, which is different in form but similar in principle in some respects, and pure equitable protection of a confidence. The majority held that principles that would affect the grant of a remedy, as distinct from the principles which would impose an obligation of confidence, were inapplicable for the purposes of the exemption there under consideration under the Commonwealth Act. The majority thought that it was important to adopt a construction that facilitated decision making at the administrative level, rather than one replete with legal complexities. This approach suggests that the provision in the NSW Act would be broad enough to include a situation where the obligation of confidence is clearly imposed by agreement between the parties to a contract. 11 The Queensland authority cited above discusses the scope of a similar exemption in terms of a hypothetical legal action brought by a plaintiff with standing to bring a suit to enforce an obligation of confidence. This appears to be a very sensible and workable approach to clause 13(a) of our legislation. This would mean that the question for clause 13(a) purposes is simply whether the matter contained in the document under review could be protected from disclosure by appropriate legal proceedings brought by a person with the necessary legal standing against a person who is bound by the confidence. 12 This broad view of clause 13(a) is the better construction. Clause 24 of the document under review imposes a contractual obligation of confidence in relation to the "details of this agreement" and the parties to the agreement could take steps to enforce this obligation and to seek a remedy for actual breach. Consequently clause 13(a) has application and the document itself is one over which this head of exemption may be properly claimed. It follows from clause 13(a) that the entire document is exempt. Partial release under the Act is still open to the Agency under its general discretion. Also, partial release pursuant to s.25(4) of the Act is also possible even though clause 13(a) requires a finding that the document is exempt in toto. This arises by reason that s.25(4) requires consideration of whether "exempt matter", as defined, may be practicably deleted. "Exempt matter" is defined as being matter by reason of which the document is exempt; if exempt matter can be excised the document ought to be released even though it is totally exempt as a document under clause 13(a). However, in this case s25(4) cannot be applied successfully as clause 24 protects all the details of the agreement. The Respondent's general discretion is a matter that has already been considered by the Respondent and dealt with satisfactorily. 13 The Respondent's submissions also contain arguments that the equitable principles whereby a confidence is protected in equity have application (submissions paragraph 18). However, there is no need to consider this aspect. 14 The Applicant's submissions were put in a balanced way and with precision, despite the fact that he is necessarily unaware of the full contents of the document. They contained an argument that clause 24 will except from the secrecy obligation those situations where disclosure is required by law, which is clearly correct, which was then developed upon the basis that the FOI Act itself imposes a statutory obligation upon an Agency to release documents (s. 16). It is correct to say that this section entitles an Applicant to access to documents, with the corollary that an Agency is required to grant access. However, this entitlement, and this obligation, are both subject to the provisions of the Act which permit an Agency to refuse access where one of the exemptions provided for has application. In order to determine whether the FOI Act requires disclosure it is necessary to determine whether any exemption claims have been made out. Therefore, section 16 will not require disclosure of the document in issue if the Agency may properly rely upon one of the exemptions. As this is the case here the Applicant's argument does not carry to the extent necessary. THE 2003 VARIATION and SCHEDULE 4 15 These two documents are contractual variations to the "2000 Contract" just discussed. They take different forms but both documents clearly demonstrate a variation of the terms of the original contract by mutual consent. They are both contracts in their own right, consideration flowing from both parties, and they each operate so as to make provision for various rights and obligations that would otherwise flow from the original contract. The provisions that these two subsequent contracts contain vary those rights and obligations in a number of respects. However, neither of these subsequent agreements contain a provision obliging the parties thereto to keep secret their provisions. They are both silent on this point. Both documents of variation only go so far as to provide that each variation is to be regarded as part of the original agreement but it is unclear whether by this the parties intended that clause 24 should apply to the variation documents. Also, clause 24 of the original agreement is not expressed so as to adopt and include therein any variations that may occur in the future. The question therefore is whether, given the terms of the documents, the parties are required by clause 24 of the original contract to keep secret the provisions of these two subsequent agreements. 16 The two documents of variation each provide, as noted above, that the variations are to be regarded as part of the original agreement. If the law recognises that a provision like this will incorporate the variations into the original agreement then clause 24 of that agreement will have direct application. However, the correct position at law may well be that the parties entered into entirely new and independent agreements every time a variation was put into place. They left the original agreement as it stood but varied its terms by the two later contracts. Therefore the parties, in law, are presently bound by three contracts rather than just a single agreement. However, these contracts are not independent agreements and the two subsequent variations cannot stand alone; they must be read with each other and the original contract for efficacy. This is quite clear as they do not set out all the obligations which affect the parties but only the variations to some of the original terms. Consequently, the law would either import secrecy obligations into each of the variations by necessary implication or would treat each variation as a novation of the original contract incorporating the original terms and the variations as set forth in each of the subsequent agreements as they came into place. The first position means that each of the variations would contain its own secrecy provision equivalent to clause 24 of the original contract. The second means that an act which discloses the matters in either the "2003 variation" or "schedule 4" would disclose "details" of the novated contract and this would be contrary to clause 24 of the novated contract. On either view it follows that disclosure of the matter contained in each of the documents of variation would found an action for breach of confidence upon the same basis as would the disclosure of the terms of the 2000 contract discussed above. Therefore, the Agency is correct in claiming that these two documents fall within clause 13(a) and are exempt from release to the Applicant. Section 25(4) has no application to these documents by reason of their total exemption as discussed above. With regard to these two documents the Respondent's general discretion has also been considered in a satisfactory way. THE 2005 (DRAFT) CONTRACT 17 This document is a draft agreement naming the parties and most likely was intended for the purpose of bringing about a new agreement which was entire in its terms, rather than being a variation of some of the terms of the original contract. It was never executed and there is no evidence that it otherwise became a concluded agreement by written or oral acceptance. Clause 24 of the original agreement does not expressly provide for secrecy in relation to any future negotiations intended to vary or renew its provisions. Therefore it does not have direct application to this document by reason of its terms. 18 The Tribunal has before it a copy of this draft as a confidential exhibit within exhibit R2 (item 12) showing that parts have been released to the Applicant and identifying, by red markings, the parts over which exemption is claimed. The released version, with editing, is also within exhibit R2 (item 7). The document bears an identifying date, 13 April 2005, but is not signed. There is no evidence before the Tribunal revealing any negotiations or discussions between the named parties concerning this document. Therefore it is correct to conclude that this document was never executed or adopted by the parties named therein. This finding is also supported by the fact that the document which is named in these proceedings as "schedule 4" refers to varying the original contract executed in the year 2000, rather than to any contract of later date. 19 Therefore, whilst the 2005 draft contains its own clause 24 relating to secrecy, this document has never become binding on the parties and this clause in this document therefore is not a reason for the application of clause 13(a) of the statute based on a contractually binding confidence. 20 Clause 24 of the original 2000 agreement of course has always remained binding, and still remains so. This clause provides for a mutual obligation expressed as being one "not to disclose any of the details of this agreement". Any act by a party that discloses such details, whether orally or in writing, falls within the prohibition. If one party, after the execution of the 2000 agreement, were to give to a third party a copy of a draft of this agreement that came into being whilst the original 2000 agreement was being negotiated, and that draft contained provisions that eventually became part of the concluded contract, a breach of the prohibition would necessarily occur. Such an act would in fact disclose details of the concluded agreement. The same would apply to any oral or written communication that a party may prepare, for whatever purpose, which disclosed the details of the concluded agreement. 21 It follows from this that a disclosure of any part of the 2005 draft which in fact contains provisions which are the same as the original 2000 agreement, without the consent of the other party, would be an act in breach of clause 24 of the original agreement. The deleted parts of the 2005 draft, with the exception of clause 11.5 thereof, are the same as corresponding details in the 2000 agreement. To disclose such identical parts in the 2005 draft would be contrary to the negative stipulation in the original contract and would found an action for breach of confidence. Consequently, clause 13(a) of the statute would have application to the 2005 draft to this extent. 22 This leaves clause 11.5 of the 2005 draft remaining. Clause 13(a) provides that a document is exempt if it contains matter the disclosure of which would found an action for breach of confidence. Consequently, the entire document is exempt if it contains such material, as the document in question clearly does. However clause 11.5 of the draft is not material of this kind, given that it does not disclose details of the original contract, and it is therefore not "exempt matter" within s.25(4) of the FOI Act. Consequently clause 11.5 of the draft could remain in the excised copy of the draft, as it is not matter by virtue of which the draft is exempt upon the basis under discussion. 23 However, clause 11.5 of the draft does in fact disclose details of what is set forth in the 2003 variation (see paragraph 5 thereof). As discussed above this document is protected by the negative stipulation in clause 24 by way of implication or novation of the original agreement. For this reason clause 11.5 of the draft, if released, would breach that prohibition and consequently is "exempt matter" within s. 25(4). This would require its excise under the section. 24 Given these findings there is no need to consider the further submissions that were put in argument. The Applicant will readily appreciate the spirit of the legislation in preserving the sanctity of confidences that parties have expressly agreed upon, even though a third party may have a justifiable interest in acquiring knowledge of the subject matter of the confidence. CONCLUSION 25 As the documents the subject of these applications have come before the Tribunal in the manner initially described in these reasons, the preferable course is to set aside the determinations of the Respondent and to substitute therefore the determination that the four documents under review are exempt documents within clause 13(a) of the Freedom of Information Act 1989. 26 It is further ordered that the several documents in exhibit R2 item 12, being the confidential documents filed by the Respondent, are not to be released without further order of the Tribunal. 25/08/2006 - To correct name of Respondent - Paragraph(s) Front cover DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.