Whether the Council was justified in refusing access to records of an agreement between the Council and the developers of the Florentine Centre in Bray, under sections 32(1)(a)(i), 35(1)(b) and 36 of the FOI Act
20 December 2019
On 6 September 2018, the applicant made an FOI request to the Council for an agreement between the Council and the successful tenderer for the development of the Florentine Centre in Bray, and related communications. On 2 October 2018, the Council granted access to some records and refused access to the remaining records on the ground that they were exempt under section 35(1)(b) of the FOI Act. On 4 October 2018, the applicant applied for an internal review of the decision. The Council issued an internal review decision on 24 October 2018, in which it affirmed its original decision. On 15 April 2018, the applicant applied to this Office for a review of the Council's decision.
In conducting my review, I have had regard to the correspondence between the applicant and the Council as outlined above and to the correspondence between this Office and both parties, as well as the content of the records that were provided to this Office by the Council for the purposes of this review. I have also had regard to submissions from the developer concerned, who acted through their solicitors in this matter.
Scope of this Review
During the review process, the parties claimed further exemptions: sections 32(1)(a)(i) and 36 of the FOI Act. The withheld information comprises Record 1 (the development agreement itself) and Records 3 and 4 (email correspondence with attachments), which disclose parts of the agreement. The question for me is whether this information is exempt under sections 32(1)(a)(i), 35(1)(b) or 36 of the FOI Act.
Before considering the exemptions claimed, I wish to note the following points. First, my jurisdiction under section 22 of the FOI Act is to make a new decision, in light of the facts and circumstances as they apply on the date of the review. The Courts have endorsed this approach. Secondly, while I am required to give reasons for my decision under section 22(10) of the FOI Act, I am also required to take reasonable precautions to prevent disclosure of information in an exempt record, under section 25. This means that the extent to which I can describe the records and the level of detail I can discuss in my analysis are limited. Finally, subject to the other provisions of the FOI Act, section 13(4) of the FOI Act requires FOI bodies and this Office to disregard an applicant's reasons for an FOI request. Therefore I can only consider the applicant's reasons insofar as they might be construed as a public interest argument.
Analysis and Findings
Section 35 - Information obtained in confidence
Section 35(1)(b) of the FOI Act provides that an FOI body shall refuse to grant an FOI request if disclosure of the information concerned would constitute a breach of a duty of confidence provided for by a provision of an agreement or enactment (other than a provision specified in column 3 in Part 1 or 2 of Schedule 3 of an enactment specified in that Schedule) or otherwise by law.
Section 35(2) provides that subsection (1) shall not apply to a record which is prepared by a head or any other person (being a director, or member of the staff of, an FOI body or a service provider) in the course of the performance of his or her functions unless disclosure of the information concerned would constitute a breach of a duty of confidence that is provided for by an agreement or statute or otherwise by law and is owed to a person other than an FOI body or head or a director, or member of the staff of, an FOI body or of such a service provider.
The Council refused access to the records on the basis that disclosing them would breach a duty of confidence provided for by a confidentiality clause in the development agreement. The Council submits that it is contractually obliged to keep the agreement confidential and section 35(1)(b) applies to this record in its entirety. It submits that as the email correspondence relates to the agreement, the same position applies to that information. The Council says that the agreement was prepared by solicitors on the Council’s behalf, “as a service provider to Wicklow County Council”. It says that the duty of confidence is owed to the developer.
The developer says that the development agreement is subject to a confidentiality clause. It says: “We do not see any basis for disclosure at this stage on the basis that we have participated in a public tender process which was conducted in accordance with public procurement rules. Once the contract was awarded, its terms are to be kept confidential”.
Clause 26 of the agreement reads as follows:
“26.1 The Developer and WCC hereby covenant and confirm with each other that they will keep confidential the contents of this Agreement and will not divulge to any third party the details thereof (other than to necessary professional advisers and in any proceedings issued or intended to be issued or as required by law).
26.2 Neither the Developer nor WCC shall make, or permit any person to make, any public announcement or communication concerning this Agreement without the prior written consent of the other party (such consent not to be unreasonably withheld or delayed). The parties shall consult together on the timing, contents and manner of release of any announcement.”
Analysis and Findings on section 35
As section 35(1) does not apply if the records fall within the terms of section 35(2), I should consider section 35(2) at the outset. Section 2 of the FOI Act defines “service provider” as “a person who, at the time the request was made, was not an FOI body, but was providing a service for an FOI body under a contract for services and contract for services in this definition includes an administrative arrangement between an FOI body and another person”.
According to the Council, the agreement was prepared by solicitors of the Council as a service provider to the Council. The Council is an FOI body. Therefore, section 35(1) will not apply to the records unless disclosing them would constitute a breach of a duty of confidence owed to a person other than an FOI body/service provider etc. under an agreement or statute or otherwise by law.
The parties to the agreement are the Council and the developer. During the review process, the Investigator pointed both parties to this Office’s Sample Questions on section 35(2) and invited their submissions. Neither party addressed the question of whether the developer was a person other than an FOI body or a service provider.
Under the agreement, the developer has agreed to develop land owned by the Council. A transcript of a Council meeting in January 2018 sets out the background to the agreement and notes that the Council procured the development of the site by tendering publicly for a developer. It also notes that the Council retains ownership of that site until the development is completed. This transcript is publicly available at www.wicklow.ie
. The tender documentation is also publicly available at www.irl.eu-supply.com
. I see that the Council tendered for “the provision of a retail development” and that it said: “the Council aims to rejuvenate the heart of the town and its environs”. In the circumstances, I consider that the developer is a service provider for the purpose of the FOI Act, on the basis that it has contracted with the Council to provide a service - namely developing publicly-owned land - to the Council. Accordingly, I do not see how disclosing the records would constitute a breach of a duty of confidence provided for under the contract which is owed to a person other than
an FOI body or a service provider. Section 35(2) therefore disapplies section 35(1).
If I am wrong in this view, I have gone on to consider whether disclosing the contract would constitute a breach of a duty of confidence under the agreement, for the purposes of section 35(1)(b).
First, clause 26 of the agreement is a general confidentiality clause which concerns the entire agreement. It is not a specific confidentiality clause covering particular information within the contract which the parties consider to be, for example, a trade secret or commercially sensitive, and agree to treat as confidential. I should note at this point that I consider the issue of commercial sensitivity in my finding under section 36 below.
FOI law has been in force for over 20 years. The Council publicly tendered for the development of publicly-owned land. In the circumstances, I cannot accept that the parties could reasonably have had a mutual expectation of confidentiality over the entire agreement which governs that development. I note that the Central Policy Unit of the Department for Public Expenditure and Reform Notice No. 5 on FOI & Public Procurement states: “the Freedom of Information Act 2014 means that FOI bodies are not in a position to give guarantees of confidentiality”. I also see that the tender documentation notified tenderers that the Council was subject to the FOI Act and that as a result, tenderers should identify clearly any aspect of their submission which was either commercially sensitive or confidential in nature. In summary, I do not consider that this blanket confidentiality clause could be enforced so as to oust the application of FOI to the entirety of an agreement by an FOI body which publicly procured a developer for the purpose of developing publicly-owned land.
Secondly, clause 26 allows for the disclosure of the agreement “as required by law”. I take it that a direction by the Information Commissioner to release records under the FOI Act would constitute disclosure required by law and would therefore not breach the confidentiality clause.
Having regard to the content and context of the agreement, I am not satisfied that section 35(1)(b) applies to the records. I find that the Council was not justified in refusing access to them under section 35(1)(b) of the FOI Act.
Section 32 - Law Enforcement and Public Safety
Section 32(1)(a)(i) of the FOI Act provides that access to information may be refused if it could reasonably be expected to prejudice or impair the prevention, detection or investigation of offences, the apprehension or prosecution of offenders or effectiveness of lawful methods, systems, plans or procedures employed for the purposes of the matters aforesaid.
A party relying on section 32(1)(a) should identify the potential harm to the matters specified in the relevant sub-paragraph which might arise from disclosure and having identified that harm, consider the reasonableness of any expectation that any harm will occur. The party should show how releasing the particular record could reasonably be expected to result in the harm.
During the review process, the Council claimed that the records are also exempt under section 32(1)(a)(i). It says that there is a Garda investigation of allegations relating to the Council. It says: “the investigation into matters relating to Wicklow County Council includes all matters and agreements surrounding the Florentine Centre which relates to this agreement”. It submits that disclosing the records now would interfere in the progress of a live investigation and risk prejudicing both the individuals involved and a fair trial. It submits that it would leave any possible prosecution unsafe because of a potential challenge to a lack of fair procedures. The Council refers to this Office’s Guidance Notes on section 32, which say: “The Commissioner has expressed the view that, where an investigation is still ongoing, a prosecution has not commenced and there is a strong possibility that a criminal prosecution will result, the arguments in favour of release of relevant records are weak and remain weak until such time as the investigation has been completed and a prosecution has been concluded or a decision has been taken not to institute a prosecution”.
This Office’s Guidance Notes also make clear that the Commissioner must be satisfied that there is a link between releasing the particular records and the harms envisaged in section 32. A mere assertion of an expectation of harm is not sufficient. The actual content of the records is important and consideration should be given as to what the records actually reveal. However, in its submissions, the Council does not demonstrate how releasing these particular records is expected to cause the harm identified or why the harm could reasonably be expected to occur. In short, it has failed to link the content of the records with the nature of the alleged harm. I cannot see from the content of the agreement itself what connection there might be between the information in it and prejudice or impairment of the kinds envisaged by section 32(1)(a)(i). Even if the records relate to the Garda investigation, as the Council says they do, this does not, in and of itself, establish a link between their release and the harms envisaged in section 32(1)(a)(i).
In the circumstances, I am not satisfied that section 32(1)(a)(i) applies to the records. I find that the Council was not justified in refusing access to them under section 32 of the FOI Act.
Section 36(1) - Commercial Sensitivity
I should note that the parties do not specify whether they rely on sections 36(1)(a), (b) or (c) of section 36 of the FOI Act. Having regard to the content of the submissions made, I consider it appropriate to consider sections 36(1)(b) and (c).
Section 36(1)(b) of the FOI Act provides that an FOI body shall refuse to grant an FOI request if the record concerned contains 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.
The harm test in the first part of section 36(1)(b) is that disclosure "could reasonably be expected to result in material loss or gain". This Office takes the view that the test to be applied is not concerned with the question of probabilities or possibilities but with whether the decision maker's expectation is reasonable. The harm test in the second part of section 36(1)(b) is that disclosure of the information "could prejudice the competitive position" of the person in the conduct of their business or profession. The standard of proof to be met here is considerably lower than the "could reasonably be expected" test in the first part of this exemption. However, this Office takes the view that, in invoking "prejudice", the damage which could occur must be specified with a reasonable degree of clarity.
Section 36(1)(c) of the FOI Act provides that an FOI body shall refuse to grant an FOI request if the record concerned contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. The standard of proof required to meet section 36(1)(c) is relatively low in the sense that the test is not whether prejudice or harm is certain to materialise but whether it might do so. Having said that, the Commissioner expects that a person seeking to rely on section 36(1)(c) 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 explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations.
Section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than refusing the request (section 36(3) refers).
The Council says that the records should not be released as the harm that would be caused to the advancement of the commercial activity on the site relating to the agreement would be “prohibitive”. It says that the developer will make its own submissions on section 36. The developer says that the records contain sensitive information which goes to the core of its private business and should never be made publicly available. It says that negotiations with tenants are highly confidential and disclosing this information could jeopardise these negotiations. It says that the cost of the project or any element of the project are extremely sensitive details which are never revealed to the public.
The applicant says that the project entails the sale of public land to a private developer. He says that he seeks a copy of the agreement to ascertain whether it conveys any additional financial advantage to the developer at the expense of the taxpayer. He says that transparency is essential when public assets are being disposed of.
Analysis and Findings on section 36
I have reviewed the records and considered the parties’ submissions. I note that the amount payable by the developer to the Council for the land at completion of the development was disclosed in the Council transcript referred to above. Notwithstanding this, having regard to the content of the records, I accept that they contain information whose disclosure could prejudice the competitive position of the developer and other third parties named in the records, which would not otherwise be available to competitors and which competitors could use to their advantage. I therefore find that section 36(1)(b) applies to the records. This finding is subject to sections 36(2) and (3), which I consider below.
Although the developer referred to ongoing negotiations with tenants, it did not explain how releasing the records could prejudice any such negotiations and this is not apparent to me from the records’ content. The content of the agreement relates primarily to the development phase and with the possible exception of Appendix 16, which is dealt with below, does not identify tenants or the terms on which they might occupy units in the centre. In the circumstances, I have no basis upon which to find that section 36(1)(c) applies. I find that the Council was not justified in refusing access to the records under section 36(1)(c) of the FOI Act.
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) of the FOI Act requires me to consider whether, on balance, the public interest would be better served by granting than by refusing the request.
On the one hand, section 36(1) itself reflects the public interest in protecting commercially sensitive information. I recognise that there is a legitimate public interest in entities being able to conduct commercial transactions with public bodies without fear of suffering commercially as a result. On the other hand, the FOI Act recognises, both in its long title and in its individual provisions, that there is a significant public interest in government being open and accountable. Section 11(3) of the FOI Act provides that public bodies shall, in performing any function under the FOI Act, have regard to a number of matters, including the need to strengthen the accountability and improve the quality of decision-making of FOI bodies.
I take the approach 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 positive public interest which is served by disclosure; and the harm that might be caused by disclosure.
In relation to the harm which might be caused by disclosure, I have identified a potential prejudice to the competitive position of the developer and third parties named in the records. As a general principle, I do not believe that the FOI Act was designed as a means by which the operations of private enterprises were to be opened up to scrutiny.
As noted above, I can only take into account the applicant’s reasons for seeking access to this information insofar as he identifies a public interest. I cannot take into account his motive for requesting the records. However, I believe that his submissions correctly identify a public interest in transparency and accountability around the use of publicly-owned assets; in this instance land. This is a case of an FOI body entering into an agreement about the development and disposal of publicly-owned land.
In deciding where the public interest lies in respect of the information concerned, I would make the following observations. First and having regard to section 11(3), I believe that there is a strong public interest in transparency and accountability around this agreement, which involves the development and disposal of the asset of an FOI body. Secondly, in deciding what information serves that public interest, I would distinguish between on the one hand, the final agreement between the Council and the developer to develop the site and on the other hand, commercial details relating to third parties in Appendices 2, 6 and 16 of Record 1; correspondence between the Council and its advisers in Record 3; and an unfinalised mark-up of the agreement in Record 4. Thirdly, the amount payable by the developer to the Council has been disclosed in Council minutes, as have the basic requirements of the tender to develop the land, in the tender documentation. Finally, the Council advised this Office that the development is on schedule for practical completion by year end. A recent media report indicates that completion is more likely to occur in February or March 2020. I believe that any potential prejudice to the developer would diminish with the passage of time and that the Council’s fears as regards the advancement of commercial activity on the site are unlikely to materialise as a direct consequence of the release of the agreement at this time.
On balance, I believe that the public interest would be better served by granting access to the records (except for Appendices 2, 6 and 16 of Record 1, the withheld part of Record 3 and Attachment 1 to Record 4). I find that the Council was not justified in refusing access to this information under section 36(1)(b) of the FOI Act. I find that the Council was justified in refusing access to the information in Appendices 2, 6 and 16 of Record 1, the withheld part of Record 3 and Attachment 1 to Record 4, under section 36(1)(b) of the FOI Act.
Having carried out a review under section 22(2) of the FOI Act, I vary the Council’s decision. I annul its decision on the records (except for Appendices 2, 6 and 16 of Record 1, the withheld part of Record 3 and Attachment 1 to Record 4) and direct their release. I affirm its decision on Appendices 2, 6 and 16 of Record 1, the withheld part of Record 3 and Attachment 1 to Record 4 under section 36(1)(b). For completeness, I note that Attachment 2 to Record 4 is a copy of the final agreement and should be treated like Record 1.
Right of Appeal
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 by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.