CITATION: McDermott v Junee Shire Council [2009] NSWADT 29 DIVISION: General Division APPLICANT Peter Anthony McDermott PARTIES: RESPONDENT Junee Shire Council JOINED PARTY Matthew Riley FILE NUMBER: 083322 HEARING DATES: On the papers SUBMISSIONS CLOSED: 31 January 2009 DATE OF DECISION: 10 February 2009 BEFORE: Handley R - Deputy President CATCHWORDS: Access to documents – business affairs LEGISLATION CITED : Freedom of Information Act 1989 Lawrence v Port Stephens Council [2008] NSWADT 243 Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135 CASES CITED: Fulham v Director-General, Department of Environment and Conservation [2005] NSWADT 88 Young v Wicks (1986) 79 ALR 448 Vincent Neary v State Rail Authority [1999] NSWADT 107 APPLICANT In person REPRESENTATION: RESPONDENT J Whitfield, agent JOINED PARTY J Wright, solicitor ORDERS: (1) The decision under review is varied (2) The Tribunal orders Junee Shire Council to release the documents in dispute to Mr McDermott. REASONS FOR DECISION 1 This is an application by Peter McDermott for the review of a decision of Junee Shire Council ('the Council') made under the Freedom of Information Act 1989 ('the FOI Act') to refuse access to documents on the ground that the documents are exempt from disclosure because they are documents affecting business affairs. Background 2 On 8 August 2008, Mr McDermott applied to the Council for access to (1) all invoices/documents submitted to the Council for work completed by four named sub-contractors between 1 July 2007 and 31 June 2008 [sic], (2) all documents completed by Keith Howell (Junee Shire Depot) in response to such invoices, and (3) all other documents generated/completed by the Council on receipt of invoices/documents from those four subcontractors in respect of the same period. 3 On 16 September 2008, the Council's General Manager and FOI officer, John Whitfield determined that the Council did not hold any documents relating to two of the named subcontractors. With regard to a third subcontractor, Junee Back Hoe Services, Mr Whitfield said that as this was a business owned by Mr McDermott, he would have access to the relevant documents concerning this subcontractor without the need for access under the FOI Act, although Mr Whitfield offered to supply copies on request. With regard to a fourth subcontractor, "MSR Excavations (Matt Riley)", Mr Whitfield refused access relying on the exemption set out in clause 7 of Schedule 1 of the FOI Act in respect of documents affecting business affairs. Mr McDermott sought a review of that part of the decision. 4 On 7 October 2008, Greg Campbell, the General Manager of the Council, confirmed the original decision and, on 27 October 2008, Mr McDermott applied to the Tribunal for a further review. 5 Following a Planning Meeting with Mr McDermott and Mr Whitfield on 2 December 2008, Matthew Riley of MSR Excavations requested that he be joined as a party in these proceedings, to which the Tribunal agreed. I conducted a further Planning Meeting with all three parties on 28 January 2009 at which the parties agreed that I should make a decision in this matter 'on the papers'. The Relevant Legislation 6 The objects of the FOI Act are stated in section 5, as follows: 5 Objects (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. 7 Pursuant to section 16(1) of the FOI Act, "[a] person has a legally enforceable right to be given access to an agency's documents". However, section 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. 8 Section 6(1) defines 'agency' as including a council, and 'exempt document' as including a document referred to in any one or more of the provisions of Schedule 1. The exempt documents in Schedule 1 include, relevantly, those affecting business affairs set out in clause 7(1)(c), which are relied on by the Council in these proceedings: 7 Documents affecting business affairs (1) A document is an exempt document: (a) ... (a1) ... (b) ... (c) if it contains matter the disclosure of which: (i) would disclose information (other than trade secrets, commercial-in-confidence provisions 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. Submissions 9 The Council relies on the business affairs exemption set out in clause 7. It notes that the release of the relevant documents – records of work completed and invoices from MSR Excavations for the period 1 July 2007 to 30 June 2008 – could not reasonably be expected to have an adverse effect on the Council's affairs: Lawrence v Port Stephens Council [2008] NSWADT 243, at [27]. While Mr Riley – a qualified, experienced contractor - might withdraw his services from Council, he is unlikely to do so because of the financial impact on his business. However, Mr Riley has objected to the release of the documents in issue on the ground that this would have an adverse effect on his business and financial affairs: "He is fearful of where and to whom his business and financial records may be passed to and what they may be used for. He believes that his proper business dealings with the Council are his business alone. He says that it is this unknown potential that prompted his request to Council to deny Mr McDermott access to these documents. The Council accepts that this is a real and reasonable concern for Mr Riley and that it can reasonably be expected that an adverse effect on his business and financial affairs could occur." 10 The Council contends there is no public interest in a matter that is one between Mr McDermott and Mr Riley. 11 Mr McDermott refers to the decision in Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135, and submits that release of the documents will neither have an adverse effect on the business affairs of Mr Riley, nor prejudice the future supply of such information to the Council. 12 Mr Riley stated that he is a sole trader, trading under the business name 'MSR Excavations' in Junee and its environs. He believes Mr McDermott wishes to commence proceedings for damages against another contractor, a long time friend of Mr Riley's, who retired last year having sold his backhoe business, including a backhoe, to Mr McDermott in 2006. Mr Riley said he purchased that backhoe from Mr McDermott in June 2008, Mr McDermott's earth moving business having failed. 13 Mr Riley believes Mr McDermott is seeking commercial information to support proceedings against the retired contractor, rather than seeking information to see whether there has been any impropriety involving the Council. However, in the period 1 July 2007 to 30 June 2008, Mr Riley states he was never an employee of the retired contractor nor subcontracted to his business. 14 Mr Riley said Junee is a small town and, at the best of economic times, can only support two earthmoving contractors. Currently, he is faced with an uncertain future because of the economic downturn, and is having to work away from Junee on most days. He cannot run the risk of loosing any opportunity to win a contract with the Council, however small. Consequently, he believes release of the documents will prejudice his future business dealings with the Council. Discussion 15 I have reviewed the documents claimed by the Council to be exempt pursuant to the business affairs exemption in clause 7 of Schedule 1 of the FOI Act. The documents comprise invoices submitted to the Council by MSR Excavations with attached work dockets for individual jobs, plus the Council's purchase orders in relation to these invoices with purchase order receipt runs, remittance advices and copies of the cheques for payment of the invoices issued to MSR Excavations or Electronic Funds Transmission Authorisations for payment of invoices. In particular, MSR Excavations' invoices reveal the hourly rate charged for work undertaken. The documents are dated between December 2007 and 15 July 2008 (in respect of work undertaken in June 2008) and cover a wide range of relatively minor work undertaken by MSR Excavations for the Council, usually of only a few hours duration: for example, digging and backfilling graves, removing trees, carting and spreading soil, storm water and drainage work, and kerb and guttering work. 16 For a document to be exempt under clause 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, disclosure of the information 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 agency. 17 In Fulham v Director-General, Department of Environment and Conservation [2005] NSWADT 88, at [29], the Tribunal said: "for a document to concern business, professional or commercial affairs, the document must contain material that goes beyond simply referring to those affairs. The document must contain something relating to business, professional or commercial affairs that is of a real and genuine substance." 18 Business affairs are generally understood to concern the conducting of a business or the carrying on of a commercial operation: Young v Wicks (1986) 79 ALR 448, at [453]. In the present case, I am satisfied that the documents in issue concern both the business affairs of both the Council and Mr Riley. 19 With regard to whether disclosure of the information could reasonably be expected to have an unreasonable adverse effect on those affairs, the Tribunal must adopt an objective approach and the expectation must be more than a mere risk: Vincent Neary v State Rail Authority [1999] NSWADT 107, at [35], discussed in Lawrence v Port Stephens Council [2008] NSWADT 243, at [27]. 20 In submissions to the Tribunal, while the Council acknowledged that disclosure of the documents could not reasonably be expected to have an adverse effect on the Council's affairs, it submitted that disclosure could reasonably be expected to have an adverse effect on Mr Riley's business and financial affairs. It was not contended that release of the documents would prejudice the future supply of such information to the Council. 21 Mr Riley submitted that disclosure of the documents would have an unreasonable adverse effect on his business in so far as his future business dealings with the Council could be prejudiced. 22 Mr McDermott rejected this contention and referred to the decision in Hynes v General Manager, Hawkesbury City Council [2004] NSWADT 135, at [123], where Higgins JM stated, in relation to a claim that the business affairs exemption applied in respect of certain invoices, that "it is not sufficient to merely make the assertion for the exemption to apply". She was not satisfied that release of the invoices would have "the requisite effect on the respective business or financial affairs of the person issuing the invoice". 23 In my view, having reviewed the documents in issue, the only business information that would be revealed by their disclosure is the nature and extent of the work undertaken by MSR Excavations for the Council, the hourly charge for work undertaken invoiced by MSR Excavations, and the amount paid to MSR Excavations over a period of 18 months if the total of payments made is calculated. I am not satisfied from the evidence that the commercial advantage to a competitor in accessing this information is likely to be other than very limited or negligible. Other factors are likely to be taken into consideration by the Council in employing a contractor to undertake such work, such as the quality of the work undertaken by the contractor, the contractor's qualifications and experience, reliability and, given the nature of much of the work, the ready availability of the contractor to undertake work at short notice. The only information that is arguably sensitive appears to be the hourly rate charged by MSR Excavations for the work undertaken. Even with this, it seems likely that the approximate hourly rate usually charged for this type of work, for example involving a backhoe, bobcat or truck, would be a matter of common knowledge in that line of business. 24 Bearing in mind the objects of the Act stated in section 5 and, in particular, the object of extending, as far as possible, the rights of the public to obtain access to information held by the Government, I am not satisfied that release of the documents could reasonably be expected to have an unreasonable adverse effect on Mr Riley's business or financial affairs and it follows that I am not satisfied that the clause 7 exemption applies. Decision 25 The decision under review is varied and the Tribunal orders Junee Shire Council to release the documents in dispute to Mr McDermott. 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.