Case number: 130044

Whether the Council was justified in its decision to refuse a request for access to records under section 7 of the FOI Act in accordance with the provisions of section 27 of the FOI Act.

Review Application to the Information Commissioner under the Freedom of Information Acts 1997 & 2003 (the FOI Act)

Background
On 17 April 2012, the applicant made an FOI request to Youghal Town Council requesting a record which includes details of the terms and conditions concerning the leasing of [a named site] to [a named company]. She said that she did not want any commercially sensitive information but just wanted to know what safeguards, if any there are for the land's use, what zoning the land has been given and when the lease expires.

While processing the FOI request, the Council's decision maker identified one record (namely the lease between Youghal Town Council and [a named recycling company]) which he thought may contain "commercially sensitive" information (section 27(1) of the FOI Act). As section 27(2) of the FOI Act provides for access to records which may be commercially sensitive where the person to whom the record relates gives their consent, the decision maker provided [named company] with an opportunity to make a submission in relation to access to the record. Following receipt of a submission from [named company], the Council's decision maker decided to refuse access to this record under section 27(1) of the FOI Act.

On 1 June 2012, the applicant requested an internal review of this decision and again stated that she did not require commercially sensitive information. On 20 June 2012, the Town Manager wrote to the applicant with her decision to refuse access to the record on the basis of section 27(1) of the FOI Act. On 23 February 2013, the applicant made a late application to the Information Commissioner for a review of the Council's decision and the Information Commissioner has used the discretion given to her under section 34(4)(b) of the FOI Act to accept this late application.

I note that Ms Rachel Dunn, Investigator, wrote to Youghal Town Council on 5 April 2013 informing the Council of her preliminary view that section 27(1) does not apply to this record and that the lease should be released subject to the redaction of monetary amounts for consideration and rent which are contained on page 1 and in the First Schedule of the lease. She invited the Council to submit any further comments that it considered relevant to the review. However, the Council indicated that it would not be issuing any further response. Ms Dunn also wrote to [named company] on 5 April 2013 as an interested third party and indicated that this Office would be happy to consider any further submission from the company in relation to this matter.

The company did not make any submission, therefore I consider that the review should now be brought to a close by the issue of a formal, binding decision. In conducting this review, I have had regard to the submissions of the applicant and [named company] (including those made to both the Council and this Office), and to those of the Council. I have also had regard to the provisions of the FOI Acts and to the content of the record at issue.

Scope of the Review
The applicant confirmed to this Office that she is not interested in any financial information which is contained in this lease and that she would be happy to obtain this record with such information redacted. Having examined the lease, it appears that the only relevant financial information would be the monetary amounts relating to consideration or rents which are contained on page 1 and in the First Schedule respectively of this lease. As the applicant is not seeking access to financial information such as the monetary amounts for consideration and rent on page 1 and in the First Schedule of the lease, this information has been excluded from the scope of this review. Therefore, this review is concerned solely with the question of whether Youghal Town Council was justified, in terms of the provisions of the FOI Act, in its decision to refuse access to the remainder of this record (i.e. the lease with the monetary amounts on page 1 and in the First Schedule of the lease being redacted).

For the purposes of this review, any references to access to the "record" should be understood as being references to that part of the lease which is the subject of this review (i.e. the lease subject to redaction of the monetary amounts for consideration and rent contained on page 1 and in the First Schedule of the lease) because the monetary amounts on page 1 and in the First Schedule of the lease do not fall within the scope of this review.

Preliminary Matters
Under section 34(12)(b) of the FOI Act, a decision to refuse to grant a request is presumed not to have been justified unless the public body concerned shows to the Information Commissioner's satisfaction that the decision was justified. This provision has the effect of placing the burden of proof on the public body to show that its decision not to release the records concerned was justified.

While processing the FOI request, the Council's decision maker considered that the record may contain "commercially sensitive" information which would be exempt from release under section 27(1) of the FOI Act. Section 27(2) provides for access to records which may be commercially sensitive where the person to whom the record relates gives their consent, therefore Youghal Town Council provided [named company] with an opportunity to make any submissions to the Council in relation to access to the record. The [named company] did not provide consent to the release of the record, therefore Youghal Town Council refused access to this record under section 27(1) of the FOI Act.

Under section 27(3) of the FOI Act, a public body may form the view that, notwithstanding any commercial sensitivity, it would be in the public interest to release a record to a requester. If a decision maker is of the view that the information should be released in the public interest under section 27(3), the request is then deemed to be one to which section 29 of the FOI Act applies. In such cases, the public body must then notify the person to whom the record relates of his/her right to make a submission if he/she does not agree that this information should be released in the public interest and that person can subsequently apply to the Information Commissioner for a review of the public body's decision to release the record in the public interest. The Council did not at any stage consider the possibility of release of the record in the public interest under section 27(3) or supply any evidence that it considered any public interest factors for/against release.

Analysis and Findings
Applicability of Section 27
The Council refused access to the record on the basis that it contains commercially sensitive information and is exempt from release pursuant to the provisions of Section 27(1) of the FOI Act. Section 27(1) of the Act provides that a request shall be refused if "the record concerned contains -

(a) trade secrets of a person other than the requester concerned,

(b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation, or

(c) information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates."

Section 27(1)(a)
Section 27(1)(a) protects records containing the trade secrets of a person other than the requester. In case number 98049, the previous Ombudsman, Mr. Kevin Murphy, explained his approach to determining whether information qualifies as a trade secret of a person within the meaning of section 27(1)(a) of the FOI Act. He considered the following factors relevant to the determination:
(1) the extent to which the information is known outside of the business concerned;
(2) the extent to which it is known by employees and others involved in the business;
(3) the extent of measures taken by the business to guard the secrecy of the information;
(4) the value of the information to the business and to its competitors;
(5) the amount of effort or money expended by the business in developing the information;
(6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

He also accepted that a trade secret is information used in the trade or business which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret and that the owner must limit the dissemination of it or at least not encourage or permit widespread publication. The applicant has confirmed to this Office that she is not interested in any financial information which is contained in this lease (i.e. the monetary amounts on page 1 and in the First Schedule of the lease) and that she would be happy to obtain this record with such information redacted. Having applied the test of 'trade secret' to the record at issue in this review (i.e. the lease excluding the monetary amounts on page 1 and in the First Schedule), I am satisfied that the information contained in the record does not constitute a 'trade secret' and that section 27(1)(a) does not apply.

Section 27(1)(b)
Section 27(1)(b) protects information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation. The Council did not provide any justification as to why it considered that section 27(1)(b) applies to this record. However, [named company] said in its submission that the release of this record "could place the business at risk" and that release into the public domain would give its competitor a competitive advantage as it "would allow our competitors to calculate our cost base and put us at a clear disadvantage in any tendering process".

The question that I must address is whether an exemption under Section 27(1)(b) is justified in light of the circumstances that [named company] has outlined. As regards the section 27(1)(b) exemption claimed, I am not satisfied that the information contained in the lease (other than the monetary amounts on page 1 and in the First Schedule of the lease which have been excluded from the scope of this review) comes within the description "financial [or] commercial ...... information". However, the essence of the test in section 27(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. This exemption protects information whose disclosure might reasonably be expected to result in a material financial loss or gain to the person to whom the information relates or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.

While I accept that [named company] is a commercial company, the exemption under Section 27(1)(b) does not prohibit the release of records simply where these records relate to commercial bodies. Rather the section 27(1)(b) exemption requires that the individual record must contain, inter alia, commercial information, the disclosure of which could be expected to result in a material financial loss (or gain) to the body or damage to their competitive position. While the monetary amounts on page 1 and in the First Schedule of the lease indicate the rent that the company has to pay for the site and could possibly be used as a means of calculating part of the company's cost base, I am not convinced that release of the remainder of the lease (other than the monetary amounts on page 1 and in the First Schedule of the lease) could result in a material financial loss to [named company] or cause damage to [named company]'s competitive position.

Having regard to all of the circumstances outlined above, I am satisfied that section 27(1)(b) does not apply in respect of the record (i.e. the remainder of the lease other than the monetary amounts on page 1 and in the First Schedule).

Section 27(1)(c)
Section 27(1)(c) protects information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. The [named company] has said that "knowing the terms and conditions specific to a lease or agreement........would allow our competitors to see restrictions and conditions placed on our company" and that disclosure of the lease "could also prejudice the outcome of ongoing negotiations with our current contracts placing the company at a material financial loss". The [named company] has not put forward any specific arguments as to how the release of the lease could give rise to harm in this regard. Any restrictions or conditions in this lease relate to [named company]'s use of the site in question and not to the operation of the company itself.

Under the circumstances, I cannot see how release of the remainder of the lease (other than the monetary amounts on page 1 and in the First Schedule of the lease) could prejudice any ongoing negotiations with [named company]'s current contracts and cause material financial loss to the company. Therefore, I am satisfied that section 27(1)(c) does not apply in respect of the record.

Section 27(3) - The Public Interest
Given my preliminary view that section 27(1) does not apply to this record, it is not strictly necessary for me to address the possibility of release under section 27(3)of this record in the public interest.

However, as the site in question is owned by a local authority which is funded through public monies, there is a strong public interest in ensuring accountability for the use of public funds, in openness and transparency and in members of the public having a right to know what conditions are attached to the use of public land. In the circumstances, although I am of the view that Section 27(1) does not apply in any event, even if any of the exemptions in section 27(1) were to apply then it is my view that the public interest would, on balance, be better served by the release of the record at issue in this case.

Decision
Having carried out a review under section 34(2) of the Freedom of Information Act 1997, as amended, I hereby vary the decision of the Council in this case. I find that section 27(1) does not apply to this record and that the lease should be released to the applicant under FOI subject to the redaction of the monetary amounts for consideration and rent which are contained on page 1 and in the First Schedule of the lease.

Right of Appeal
A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks from the date on which notice of the decision was given to the person bringing the appeal.

Stephen Rafferty,
Senior Investigator
29 April 2013