Case number: 140151

Whether the Council was justified in refusing access to records concerning an internal audit report on the grounds of sections 21, 23 and 27 of the FOI Act

Conducted in accordance with section 34(2) of the FOI Act by Stephen Rafferty, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

On 17 February 2014, the applicant requested the Council to provide the following:

  • All details of professional fees incurred so far on the West Cork Arts Centre,
  • All internal correspondence on concerns of the LGAS in relation to the procurement processes adopted so far and the level of professional fees,
  • All sums paid to the original tenderer engaged to complete the Bandon Sewerage Scheme and the details of the conciliation process, and
  • The release of the internal audit report carried out in 2012 on the Carrigtwohill Underbridge and all follow up reports, memos, briefs or correspondence with the relevant director.

On 12 March 2014, 7 April 2014 and 28 April 2014, the Council refused various aspects of the above request. On 12 May 2014, the applicant sought an internal review in respect of the decision regarding the first, second and fourth items of his original request (he decided at this stage not to pursue the third item). On 9 June 2014, the Council decided to uphold its original decision. On 11 June 2014, the applicant sought a review by this Office of the Council's decision.

Following communications between Simon Noone, Investigator, and the applicant and the Council, a settlement was reached between the parties in respect of the first and second items of his request. Therefore, the sole remaining element of the request to be considered by me is the fourth item above, i.e. the internal audit report and related follow up records in respect of the Carrigtwohill underbridge scheme. I have decided to conclude this review by way of a formal binding decision. In conducting this review, I have had regard to the contents of the relevant records and to the submissions of the parties.

In the interests of clarity, I should point out that this review was carried out under the provisions of the FOI Acts 1997-2003 notwithstanding the fact that the FOI Act 2014 has now been enacted. The transitional provisions in section 55 of the 2014 Act provide that any action commenced under the 1997 Act but not completed before the commencement of the 2014 Act shall continue to be performed and shall be completed as if the 1997 Act had not been repealed.

Scope of the Review

The scope of this review is concerned solely with whether the Council was justified in refusing access to the internal audit report carried out in 2012 on the Carrigtwohill Underbridge and all follow up records.

Findings

It should be noted that a review under section 34 of the FOI Act is de novo. This means that it is based on the circumstances and the law as they pertain at the time of the review by this Office. Furthermore, the courts have taken the view that, under FOI, records are released without any restriction as to how they may be used and, thus, FOI release is regarded, in effect, as release to the world at large.

The Council refused access to the relevant records under sections 21(1)(a), 23(1)(a)(iv) and 27(1)(c). In its submissions to this Office, the Council identified 23 records as falling within the scope of the request. Record number 4 is the internal audit report. The remaining records contain internal correspondence within the Council, correspondence between the Council and its legal advisers, and correspondence between solicitors. The exemption under section 27(1)(c) was claimed in respect of all the records, and, additionally, section 21(1)(a) was claimed in respect of record numbers 4, 5, 10, 13, 14, 16 and 22. Section 23(1)(a)(iv) was not claimed in respect of any particular record, but I will address the Council's contentions under this exemption in any event.

Mr Noone identified three third parties that might potentially be affected by the release of the records; the developers of the underbridge project, a firm of solicitors acting for the Council, and a firm of quantity surveyors. In accordance with section 34(6) of the FOI Act, he wrote to these third parties and invited them to make submissions on the matter. None of these third parties replied to this invitation, and therefore the only submissions that are before me for consideration are those of the applicant and the Council.

Section 21
Section 21(1)(a) of the FOI Act provides inter alia that an FOI body may refuse to grant access, if the record concerned could reasonably be expected to "prejudice the effectiveness of tests, examinations, investigations, inquiries or audits conducted by or on behalf of a public body..." Subsection (2) provides for a public interest balancing test.

The Council has submitted that "the release of internal audit reports would inhibit the free and frank exchange of views for the purposes of deliberations. The Council's Internal Audit Charter requires a full, free and unrestricted access when undertaking a review. However, there is a distinction between compliance and co-operation in a spirit of team work. The process is undermined if it merely operates on the basis of mere compliance. One of the key objectives of a modern internal audit process is that all parties are encouraged to engage with the process and to recommend improvements."

The requester has submitted that "the audits are completed for some time and have been considered by the local government auditor. Therefore they are not ongoing and cannot be influenced by their release."

Section 34(12) of the FOI Act provides that a decision to refuse to grant a request under section 7 shall be presumed not to have been justified unless the head of the relevant public body shows to the Commissioner's satisfaction that its decision was justified. This means that the onus is on the Council to satisfy this Office that its decision to refuse access to the records sought was justified. In arriving at a decision to claim a section 21 exemption, an FOI body must, firstly, identify the potential harm to the functions covered by the exemption that might arise from disclosure and, having identified that harm, consider the reasonableness of any expectation that the harm will occur. In Sheedy v. Information Commissioner [2005] IESC 35, [2005] 2 I.R. 272, Kearns J. stated, in relation to section 21(1), that "the onus to produce evidence of prejudice fell on the Department and in the absence of same the Commissioner was entitled, under section 34 of the Act of 1997, to hold against the Department. A mere assertion of an expectation [of prejudice] could never constitute sufficient evidence in this regard".

In my opinion, the Council in this case has done little more than assert an expectation of prejudice if the records are released. In essence, it is arguing for the protection of audit reports as a class. Its argument is that the release of internal reports would inhibit the free and frank exchange of views for the purposes of deliberations. This Office has previously considered similar arguments in connection with the release of internal audit reports. For example, in Case no. 030963 (Deputy Kenny and Department of Education and Science, on www.oic.ie), the then Commissioner stated that it was reasonable to assume that all staff of public bodies would co-operate with audit inquiries where such inquiries relate to their work areas or functions, and that it was not sustainable that anything other than full co-operation would be given by public employees to the body's Internal Audit Unit.

In this case, the Council has not adequately demonstrated how the effectiveness of its internal audit function could be harmed, nor has it considered the reasonableness of its expectation that the harm will occur. I do not consider that the Council has shown how the release of these records could "inhibit the free and frank exchange of views", and, having considered the contents of the records, I am of the view that their release is unlikely to do so. Consequently, I am satisfied that the Council has not discharged the onus of proof upon it, and therefore I find that this exemption does not apply.

Section 27
This is a mandatory exemption that protects commercially sensitive information. Section 27(1)(c) exempts records from release which contain "information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates." It is subject to the public interest balancing test set out in subsection (3).

The Commissioner has previously found that, in order for this exemption to apply, the person seeking to rely on it would be able to show that contractual or other negotiations were in train or were reasonably foreseen which might be affected by the disclosure, and also that such a person would be able to explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations; see e.g. Case 99314 (ABC Ltd and the Office of the Comptroller and Auditor General), on www.oic.ie.

In its submissions of 8 July 2014 and 31 July 2014, the Council stated that there were negotiations in existence between it and the developers regarding outstanding monies, and stated that "disclosure of this information now...would, it is suggested, be embarrassing for the developers and may, it is suggested, impact on the negotiations. The Council accepts that there is no certainty that the release would impact on the negotiations but there is also no certainty that the release would not." No other negotiations, actual or potential, were referred to by the Council.

In September 2015, Mr Noone inquired of the Council as to the current status of the negotiations between it and the developers. On 30 September, the Council stated that "terms of agreement have been reached between the developer and Cork Co. Council in this matter."

Therefore, while it may have been the case that the release of the records at an earlier juncture could have prejudiced the outcome of the negotiations between the Council and the developers, I am satisfied that this issue is now moot, as the dispute has been resolved. As no other negotiations have been relied upon by the Council, I am of the opinion that section 27(1)(c) should not apply at this time to prevent the release of the records to the applicant.

Section 23
While not specifically claimed in respect of any particular record, the Council informed the applicant that his request was also being refused under section 23(1)(a)(iv). This is a discretionary exemption which entitles an FOI body to refuse a request for access to a record if the record concerned could reasonably be expected to prejudice or impair the fairness of criminal proceedings in a court or of civil proceedings in a court or other tribunal.

In its submissions of July 2014 to this Office, the Council stated that it "may yet have to consider a legal route to recover the monies due from the developers." However, as stated above, the dispute between the Council and the developers has since been resolved. Therefore, it seems to me that the possibility of civil proceedings to recover the monies no longer exists, and as a result I consider that this exemption cannot now apply to the records.

Legal professional privilege
Sections 21, 23 and 27 were the only exemptions claimed by the Council, and I am satisfied that they should not apply to the records at this time. However, having inspected the records, I am of the view that one other exemption, under section 22, may be potentially relevant. As this exemption is mandatory, I believe it is appropriate for me to address it briefly, notwithstanding the fact that it has not been relied upon by the Council.

I consider that some of the records could come under the exemption provided for by section 22(1)(a), as they could be exempt from production in proceedings in court on the ground of legal professional privilege. However, this privilege exists to protect the client (in this case the Council) rather than the lawyer, and privilege can be waived. The Commissioner has previously found that, where an FOI body has failed to claim that legal professional privilege applies to a record, the privilege has been implicitly waived; see Case 040312 (Cara Technologies and the Environmental Protection Agency). In this instance, I note that, as well as seeking submissions from the Council, Mr Noone invited the Council's solicitors to make a submission but no reply was received from the solicitors. Therefore, neither the Council nor its solicitors have contended that any of the records are protected by legal professional privilege. Consequently, I am satisfied that the privilege has been waived by the Council, and therefore this exemption is not applicable.

In conclusion, as I have found that the exemptions claimed by the Council are not applicable, and additionally that any potential legal professional privilege attaching to some of the records has been waived, I find that the records which are the subject of this item of the request should be released to the applicant.

Decision

Having carried out a review under section 34(2) of the Act, I hereby annul the Council's refusal to allow access to the records concerned, and I direct the release of the records to the applicant.

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 after notice of the decision was given to the person bringing the appeal.

Stephen Rafferty
Senior Investigator