Case number: OIC-53431-B4H2C7 (190180)
20 November 2019
In October 2017, the OPW received a request to source alternative accommodation from a public body whose existing accommodation was no longer suitable for their needs. Following a search of properties advertised for let, a preferred property was identified. In September 2018, the OPW agreed heads of terms with the landlord subject to relevant certifications and planning.
In October 2018, the applicant contacted the OPW and said that he understood that it had been tasked with finding accommodation for a public body. He said that he had a number of properties that may be suitable and he asked when the tender would be published. The OPW informed the applicant that the acquisition of interests in property is not a tender for the purchase of goods and services and properties are acquired through the consideration of market offerings. It said that a property had already been identified and heads of terms had been agreed. The applicant asked the OPW to provide him with details of the selected property. The OPW refused to provide this information on the basis that it was commercially sensitive at that time.
On 29 November 2018, the applicant made an FOI request to the OPW for access to all records in relation to the lease acquisition described above. The applicant confirmed that his request relates to the time period from when the need for such a property was first communicated to the OPW, or when the requirement was first identified by the OPW, to the date of his request. In a decision dated 23 January 2019, the OPW granted the applicant’s request in part. It located 81 records which fall within the scope of his request. It granted access to six records in part and refused access to the remaining records under section 36(1)(b) of the FOI Act. The applicant requested an internal review of the OPW’s decision. In its internal review decision dated 19 March 2019, the OPW affirmed its decision to refuse the request but relied upon sections 40(1)(d) and 42(f) of the FOI Act.
On 16 April 2019, the applicant applied to this Office for a review of the OPW’s decision. Both the applicant and the OPW made submissions during the course of the review. In its submissions, the OPW said that it wished to rely on section 36(1)(b) and not section 40(1)(d) of the Act in refusing access to the records. It said that it also wished to rely on sections 31(1)(a), 32(i)(a)(i)/(iii) and 42(f) in support of its decision. This Office provided the applicant with an update in relation to the OPW’s position and in reply the applicant argued that the records ought to be released.
I have decided to conclude this review by way of a formal, binding decision. In carrying out my review, I have had regard to the submissions made to date. I have also examined the records at issue.
The scope of this review is confined to whether the OPW was justified in refusing access to the records in full or in part on the basis of sections 31(1)(a), 32(i)(a)(i)/(iii), 36(1)(b) or 42(f) of the FOI Act.
Section 13(4) of the FOI Act provides that the actual or perceived reasons for a request must generally be disregarded by the decision maker, including the Information Commissioner, (except insofar as such reasons are relevant to consideration of the public interest or other provisions of the Act).
Section 18 of the Act provides for the deletion of exempt information and the granting of access to a copy of a record with such exempt information removed. This should be done where it is practicable to do so and where the copy of the record thus created would not be misleading. However, the Commissioner takes the view that neither the definition of a record nor the provisions of section 18 envisage or require the extracting of particular sentences or occasional paragraphs from records for the purpose of granting access to those particular sentences or paragraphs. Generally speaking, therefore, the Commissioner is not in favour of the cutting or "dissecting" of records to such an extent.
Although I am obliged to give reasons for my decision, section 25(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. This means that the description which I can give of the background, the records at issue and the material that I can refer to in the analysis is limited. The release of a record under the FOI Act is considered, effectively, as release to the world at large.
Section 36 - Commercially Sensitive Information
As the OPW has relied on section 36(1)(b) in support of its decision to refuse access to each of the records or parts of the records, I will consider that exemption provision first.
Section 36(1)(b) applies to a record containing 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 it 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 essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm that might be occasioned by its release.
The harm test in the first part of subsection (1)(b) is that disclosure of the information "could reasonably be expected to result in material financial loss or gain." The test to be applied in this regard is whether the decision maker's expectation is reasonable. The harm test in the second part of subsection (1)(b) is whether disclosure of the information "could prejudice the competitive position" of the person concerned. The standard of proof necessary to meet this test is considerably lower than the standard to meet the test of "could reasonably be expected to" in the first part of subsection 36(1)(b). 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 his submissions to this Office, the applicant states that he does not understand how release of the information in the withheld records could jeopardise the OPW’s competitive position. He argues that the landlord with whom they are negotiating the lease would already have access to most, if not all, of the information which is being withheld. The applicant also states that the schedule of records provided by the OPW lists a number of records which appear to be advertisements for properties considered by the OPW. He argues that since these advertisements are at least 16 months old, it is highly unlikely that these properties would still be available for lease at this time and the OPW’s argument for not releasing these records is flawed.
The OPW states that the records which were withheld under section 36(1)(b) include correspondence between the client department, OPW property management, the Chief State Solicitor’s Office and the agent for the landlord. It states that these communications relate to ongoing negotiations for the lease of the property. It argues that if these details are released prior to the lease being executed this could prejudice its competitive position. It argues that this could materialise in increased rent, unfavourable conditions or the withdrawal of the property from the market. In relation to the records that contain advertisements from estate agents and property websites, the OPW argues that the value of this information lies in the fact that these are the properties that it was considering; this is the information considered commercially sensitive not the advertisements themselves. It states that should the lease not be executed; these properties would be reconsidered as a second option if still available.
As a general principle, the Commissioner takes the view that section 36 is primarily aimed at protecting the commercial interests of parties engaged in commercial activity. As such, it is not clear that it is entirely appropriate for an FOI body, which is engaged in the provision of public services, to seek to claim exemption under section 36 to protect its financial interests. However, depending on the circumstances of the case, the Commissioner has accepted that the FOI Act does not prohibit an FOI body relying on the provisions of section 36.
The OPW’s property management section is responsible for finding suitable accommodation for staff in public bodies and government departments. Many of these staff are accommodated in State owned buildings; however, the OPW leases additional buildings from the private market to satisfy demand as and when required. I accept that the OPW does compete in the private market with other parties who are seeking to purchase or lease properties.
In this case, the records which were withheld in part contain very detailed information in relation to the selected property. The remaining records contain equally detailed information in relation to the OPW’s property requirements, the pros and cons of properties considered, the terms of lease and status of negotiations. I accept that if these details were released at this time, this could prejudice the OPW’s competitive position both by obstructing it in securing the property selected or the other options and in obtaining the best value in the expenditure of public funds. I consider this to be the case notwithstanding the age of some of the records. I find that the records are exempt under section 36(1)(b) of the Act.
I note that some records also contain information relating to landlords and other third parties and their properties. Given that I have found that the exemption provisions of section 36(1)(b) are met by reference to the potential prejudice to the OPW’s position, I do not consider that it is necessary to consider the impact of release of these records on third parties in my review.
Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arises in this case.
Section 36(3) - the Public Interest
Section 36(3) provides that subsection (1) does not apply in relation to a case in which, in the opinion of the head concerned, the public interest would, on balance, be better served by granting than by refusing to grant the FOI request. Section 36(1) itself reflects the public interest in the protection of commercially sensitive information.
On the other hand, the Act also recognises, both in its long title and its individual provisions that there is a significant public interest in government being open and accountable. The Commissioner takes the view that, in attempting to strike the balance between openness on the one hand and the need to protect commercially sensitive information on the other, it is legitimate to consider two things: the first is the positive public interest which is served by disclosure and the second is the harm that might be caused by disclosure.
The applicant states the Office of Government Procurement Guidelines provide that the rental of existing buildings is exempted from the requirements of procurement rules. He states that his understanding is that the OPW arranged to acquire a building which did not have suitable statutory approvals in place and that while these approvals were being sought, its client used a new building which did not exist at the time heads of terms were agreed. He argues that as the second building did not exist at the relevant time, the procurement process may not have been exempt from the requirements of the procurement rules. He also argues that it is questionable if the first building, which did not have the required statutory approvals in place, could reasonably be regarded as an existing building for the purpose of the procurement rules. The applicant argues that if the records were released, it would, presuming the procurement was carried out in accordance with the relevant rules, clarify the matter and ensure that best practice was followed by a public funded organisation, which is very much in the public interest as the OPW is responsible for managing large amounts of public funding.
The OPW states that the acquisition of interests in property by the State is generally done through the consideration of market offerings. It states that the identification of offerings is achieved in a like manner to a domestic dwelling acquisition, with suitable properties being sourced from consultation with internet sites and auctioneers’ offices. It states that the acquisition of property is not a tender for the purchase of goods and services and therefore not a service contract. The OPW argues that it is normal practice in the property market for tenants to agree heads of terms on a property subject to the landlord satisfying commitments in relation to all the necessary statutory approvals. The OPW states that consideration was given to releasing the records in the interest of openness in relation to how public bodies carry out their functions and accountability in relation to the expenditure of public funds. However, on balance, it was considered that these factors were outweighed by the public interest factors against release. It argues that release of the information at this time could impede the OPW in the effective pursuit of its legitimate business and in obtaining value for money.
It is clear from the records that the property which the OPW agreed to lease did exist at the time heads of terms were agreed. It is also clear that the second building is being used on a temporary basis. It is fair to say that the records disclose very detailed matters in relation to positions of the OPW and its client in relation to various property options in a specific area as well as circumstances particular to the client involved.
I accept that there is a strong public interest in openness and accountability in the use of public funds. Openness in respect of the expenditure of public funds is a significant aid in ensuring effective oversight of public expenditure, in ensuring that the public obtains value for money, and in preventing fraud, corruption and waste or misuse of public funds. It seems to me that this public interest will be met to a certain extent by the fact that the OPW is required to register information on any leases taken out with the Property Services Regulatory Authority within 30 days of the receipt of the stamp certificate. I also note that during the course of the review, the OPW indicated to this Office that once the lease is executed it would reconsider release of further information on request. On balance, I find that the public interest does not weigh in favour of release of the level of detail in these records at this time.
In regard to my finding above, arguably it would be possible to identify certain relatively small parts of the withheld material which, if released, would be less likely than others to prejudice the OPW’s position. However, I am not convinced that a positive public interest has been identified which would be served by directing the release of such parts even if this were feasible. In any case, having regard to section 18 of the FOI Act explained above and to the detailed nature of the records, I concluded that, even if it were practicable to isolate such parts, the resulting redacted records would be misleading when taken out of context in the light of the property issue as a whole (section 18(2) of the Act refers). Being “practicable” necessarily means taking a reasonable and proportionate approach to determining whether to grant access to parts of records.
Finally, as I have found that the records are exempt under section 36 of the Act, it is not necessary to consider whether they are also exempt under sections 31(1)(a), 32(i)(a)(i)/(iii), or 42(f) of the FOI Act.
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the OPW’s decision in this case. I find that records are exempt under section 36(1)(b) of the Act and I find that, on balance, the public interest would not be better served by the release of these records.
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.